BILL ANALYSIS Ó
SB 1466
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Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1466 (De Leon) - As Amended: June 25, 2012
Policy Committee: Higher
EducationVote:8-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill establishes priorities for allocation within the Cal
Grant program of funds derived from the Higher Education
Investment Tax Credit (HEITC) program proposed to be established
by SB 1356 (De Leon). Specifically, this bill:
1)Requires the California Student Aid Commission (CSAC),
commencing with the 2014-15 academic year, to apply the
following three priorities when allocating funds from the
HEITC program:
a) First priority to students otherwise ineligible for a
Cal Grant A, B, or Transfer Entitlement awards but who meet
eligibility requirements in place for the 2011-12 academic
year.
b) Second priority to students otherwise ineligible for a
Competitive Cal Grant A or B award but who meet eligibility
requirements in place for the 2011-12 academic year, up to
the maximum number of awards authorized for this program in
the annual budget act.
c) Third priority to all other students who meet
eligibility requirements in place for 2011-12 for a Cal
Grant award, except that these students may have a
household income of up to $100,000, consistent with program
income ceilings based on family size.
2)States intent that monies in the HEITC program are intended to
supplement other monies provided for the Cal Grant program,
and are intended for students who would otherwise not be
SB 1466
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eligible except for the expanded eligibility provided above.
3)Sunsets all of the above on December 1, 2018 or until are
HEITC monies are expended, whichever comes last.
4)Makes all of the above operative only upon enactment of SB
1356.
FISCAL EFFECT
1)With respect to Priority #1, allocations from the HEITC Fund
would depend on the extent that students are ineligible for
Cal Grants in 2014-15 and thereafter, but would have been
eligible under the criteria in place for 2011-12. This would
depend on future actions of the Legislature with respect to
Cal Grant eligibility. For 2013-14, there are no changes to
Cal Grant eligibility for students.
2)With respect to Priority #2, the Competitive Cal Grant program
is currently over-subscribed by about 8:1, with tens of
thousands of currently eligible students not receiving
assistance, so it is highly unlikely that any additional
students would a receive assistance under the provisions of
this bill.
3)With respect to Priority #3, the current income ceiling for
Cal Grant A eligibility (for a family of six or more) is
$92,600, with declining amounts for smaller family sizes. Were
these income ceilings to remain constant, CSAC estimates
(based on current Cal Grant award amounts) that allocations
from the HEITC Fund would be about $200 million from 2014-15
through 2017-18, with the last year assisting about 9,200
students. The Cal Grant income ceilings are adjusted annually
for inflation, however, thus the actual HEITC allocation would
be significantly less as the adjusted income ceiling annually
approaches the $100,000 limit in this bill. Once the
cumulative adjustments total about 8% above the current level
(the Cal Grant maximum equals $100,000), there would be no
further allocations under this priority. An increase in the
HEITC income ceiling beyond $100,000 would allow for
additional allocations to qualifying students, assuming monies
are remaining in the HEITC Fund.
COMMENTS
SB 1466
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1)Purpose . The author believes that creative measures are needed
to assist students following years of budget cuts to higher
education. The state's contribution to higher education has
steadily declined, and the author's office calculates that the
share of expenditures borne by students, in the form of
tuition/fees has tripled from 13% in 2000 to 40% in 2011.
According to the author, this bill provides an opportunity to
leverage federal dollars to help offset increases in college
tuition in California and make a public school education more
affordable for middle-income Californians.
2)Contingent Enactment . The provisions of this bill are
contingent upon the enactment of SB 1356 (de Leon), also on
today's Committee agenda, which:
a) Establishes the Higher Education Investment Tax Credit
Program Special Fund.
b) Establishes a tax credit equal to 50-60%, depending on
the year, of contributions to the Special Fund.
c) Requires that all revenue in this fund be allocated to
CSAC for purposes of awarding Cal Grants to students
eligible pursuant to the provisions of this bill.
d) Provides for a repeal of the tax credit in December
2016.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081