BILL NUMBER: AB 2578 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Solorio
FEBRUARY 24, 2012
An act to amend Section 69984 of the Education Code, relating to
student financial aid, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2578, as introduced, Solorio. Student financial aid: Golden
State Scholarshare Trust.
The Golden State Scholarshare Trust Act establishes the Golden
State Scholarshare Trust, under the administration of the
Scholarshare Investment Board, to provide financial aid for
postsecondary education costs of participating students. Under the
act, the board segregates moneys received by the Scholarshare Trust
into 2 funds, the program fund and the administrative fund. Moneys in
the program fund are continuously appropriated to the board for
purposes of the act, and moneys in the administrative fund are
available upon appropriation for costs of administration of the
Scholarshare trust. Existing law requires that, on an annual basis,
expenditures from the administrative fund not exceed more than 1% of
the total program fund.
This bill would require, commencing on January 1, 2013, that
contributions by participants who make their contributions pursuant
to a qualified state tuition plan, as provided in a designated
section of the Internal Revenue Code of 1986, be matched by an equal
amount of state funds. The bill would require these state matching
funds to be transferred from the administrative fund to the program
fund, and credited to the appropriate account. The bill would exempt
these matching funds from the 1% limit on expenditures from the
administrative fund. Because the bill would direct the transfer of
funds into the continuously appropriated program fund, it would
constitute an appropriation.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 69984 of the Education Code is amended to read:
69984. (a) (1) The board shall segregate moneys received by the
Scholarshare trust into two funds, which shall be identified as the
program fund and the administrative fund. Notwithstanding Section
13340 of the Government Code, the program fund is hereby continuously
appropriated, without regard to fiscal years, to the board for the
purposes of this article. Funds in the administrative fund shall be
available for expenditure, upon appropriation, for the purposes
specified in this article.
(2) (A) The board shall separately account for any moneys received
by an entity exempt from taxation under Section 501(c)(3) of the
Internal Revenue Code or a state or local government agency,
depositing the money for the benefit of a beneficiary to be named
later pursuant to the operation of a bona fide scholarship program.
(B) There is hereby created the Scholarshare Investment Board,
that consists of the Treasurer, the Director of Finance, the
executive director of the State Board of Education, a member of the
Student Aid Commission appointed by the Governor, a member of the
public appointed by the Governor, a representative from a California
public institution of higher education appointed by the Senate
Committee on Rules, and a representative from a California
independent college or university or a state-approved college,
university, or vocational/technical school appointed by the Speaker
of the Assembly. The Treasurer shall serve as chair of the board. The
board shall annually prepare and adopt a written statement of
investment policy. The board shall consider the statement of
investment policy and any changes in the investment policy at a
public hearing. The board shall approve the investment management
entity or entities consistent with subparagraph (D).
(C) Not later than 30 days after the close of each month, the
investment manager shall place on file for public inspection during
business hours a report with respect to investment performance. The
investment manager shall report the following information, to the
extent applicable, to the board within 30 days following the end of
each month:
(i) The type of investment, name of the issuer, date of maturity,
par and dollar amount invested in each security, investment, and
money within the program fund.
(ii) The weighted average maturity of the investments within the
program fund.
(iii) Any amounts in the program fund that are under the
management of an investment manager.
(iv) The market value as of the date of the report and the source
of this valuation for any security within the program fund.
(v) A description of the compliance with the statement of
investment policy.
(D) Moneys in the program fund may be invested or reinvested by
the Treasurer or may be invested in whole or in part under contract
with an investment manager, as determined by the board.
(b) (1) Transfers may be made from the
program fund to the administrative fund for the purpose of paying
operating costs associated with administering the Scholarshare trust
and as required by this article. On Except
for funds transferred pursuant to paragraph (2), on an annual
basis, expenditures from the administrative fund shall not exceed
more than 1 percent of the total program fund. All costs of
administration of the Scholarshare trust shall be paid out of the
administrative fund.
(2) Commencing on January 1, 2013, contributions by participants
who make their contributions pursuant to a qualified state tuition
plan, as provided in Section 529 of the Internal Revenue Code of
1986, as it is amended from time to time, shall be matched by an
equal amount of state funds. These matching funds shall be
transferred from the administrative fund to the program fund, and
credited to the appropriate account.
(c) All moneys paid by participants in connection with
participation agreements shall be deposited as received into the
program fund, and shall be promptly invested and accounted for
separately. Deposits and interest thereon accumulated on behalf of
participants in the program fund of the Scholarshare trust may be
used for payments to any institution of higher education.