BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 174|
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THIRD READING
Bill No: SB 174
Author: De León (D), et al.
Amended: 1/6/14
Vote: 27 - Urgency
SENATE EDUCATION COMMITTEE : 9-0, 1/15/14
AYES: Liu, Wyland, Block, Correa, Hancock, Hueso, Huff,
Monning, Torres
SENATE APPROPRIATIONS COMMITTEE : 6-0, 1/23/14
AYES: De León, Gaines, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters
SUBJECT : Student financial aid: Cal Grant Program
SOURCE : Author
DIGEST : This bill provides for the use of funds from the
College Access Tax Credit (CATC) Fund, proposed to be
established by SB 798 (De León), to be administered by the
California Student Aid Commission (CSAC), for purposes of
increasing the amount of the Cal Grant B Access Award.
ANALYSIS : Existing law authorizes the Cal Grant Program,
administered by CSAC, to provide grants to financially needy
students to attend college. The Cal Grant programs include both
the entitlement and the competitive Cal Grant awards. The
program consists of the Cal Grant A, Cal Grant B, and Cal Grant
C programs, and eligibility is based upon financial need, grade
point average (GPA), California residency, and other eligibility
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criteria, as specified. These programs currently operate as
follows:
1.Cal Grant A High School Entitlement Program provides tuition
fee funding for the equivalent of four full-time years at
qualifying postsecondary institutions to eligible lower and
middle income high school graduates who have at least a 3.0
GPA on a four-point scale and apply within one year of
graduation.
2.Cal Grant B High School Entitlement Program provides funds to
eligible low-income high school graduates who have at least a
2.0 GPA on a four-point scale and apply within one year of
graduation. The award provides up to $1,551 for books and
living expenses for the first year and each year following for
up to four years (or equivalent of four full-time years).
After the first year, the award also provides tuition fee
funding at qualifying postsecondary institutions.
3.Community College Transfer Program provides a Cal Grant A or B
to eligible high school graduates who have a community college
GPA of at least 2.4 on a four point scale and transfer to a
qualifying baccalaureate degree granting college or
university.
4.Cal Grant Competitive Award Program provides 22,500 Cal Grant
A and B awards available to applicants who meet financial,
academic, and general program eligibility requirements. Half
of these awards are reserved for students enrolled at a
community college and who met the September 2 application
deadline.
5.Cal Grant C Program provides funding for financially eligible
lower income students preparing for occupational or technical
training. The authorized number of new awards is 7,761. For
new and renewal recipients, the current tuition and fee award
is up to $2,592 and the allowance for training-related costs
is $576.
Existing law also authorizes the Cal Grant T program to provide
assistance to individuals who attend teacher credential programs
at colleges and universities approved by the California
Commission on Teacher Credentialing. According to the CSAC, the
Governor and the California State Legislature have not permitted
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new awards for the Cal Grant T program since the 2002-2003
academic year.
This bill provides for the use of funds from the CATC Fund for
purposes of increasing the Cal Grant B access award.
Specifically it:
1.Declares the intent that CATC Funds supplement other funds
appropriated for the Cal Grant Program and, once the CATC Fund
is created and exists, prohibits the adjustment of the Cal
Grant B Access Award below the level set in the Budget Act of
2012 ($1,473).
2.Requires the State Treasurer to certify the amount of moneys
available for distribution from the CATC fund beginning April
1, 2015 (and annually thereafter by April 1) for distribution
for the academic year commencing the following July, and
further:
A. Prohibits the amount available for distribution in any
year from exceeding 85% of the certified fund balance.
B. Requires the CSAC to thereafter:
1) Determine the amount of the supplemental awards to
be granted.
2) Determine the administrative costs that will be
incurred.
3) Include the amounts determined in the statutorily
required budget change proposals it submits each fiscal
year.
1.Requires that the amount of the supplemental award and the
administrative costs determined by the CSAC be made available,
upon appropriation by the Legislature in the annual Budget
Act, for the purpose of making supplemental access costs
awards under the Cal Grant B program.
2.Requires that disbursements be made to the CSAC, upon annual
appropriation by the Legislature, be used to supplement awards
for access costs under the Cal Grant B program, and to defray
the CSAC's associated administrative costs.
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3.Requires that any funds remaining after all supplemental
awards are made be retained in the CATC for allocation in
future fiscal years.
4.Establishes the following conditions and restrictions on the
supplemental awards:
A. Requires that they be made for "access costs" as defined
under the provisions of the Cal Grant Program.
B. Caps the amount of the supplemental award, when combined
with the annual award amount established in the annual
Budget Act, at $5,000.
C. Provides that these awards are only payable to the
extent moneys are available from the CATC.
D. Requires the CSAC to inform award recipients that the
award is for one academic year only, not an entitlement,
and that future supplemental awards are subject to the
availability of moneys in the CATC.
1.Makes the provisions of this bill contingent upon the
enactment of SB 798 (De León), which establishes the College
Access Tax Credit Fund.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
$140,000 in staffing costs to CSAC to administer the program
expansion, reimbursed by the CATC.
Cost pressure: This bill prohibits the Cal Grant B Access
Award amounts funded in the annual Budget Act (by the non-CATC
General Fund) from being reduced below 2012 Budget Act levels,
for the duration of the existence of CATC funding. If budget
reductions became necessary, the Cal Grant B Access Award
would be protected at the expense of other programs.
To the extent that expanded Cal Grant Access Awards provide
additional funding to students in California's public
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postsecondary institutions, that funding may supplant some
institutional aid from the segments.
SUPPORT : (Verified 1/22/14)
American Career College
American Federation of State, County and Municipal Employees
Associated Students of UC Davis
Association of Independent California Colleges and Universities
California Catholic Conference
California Community College Association of Student Trustees
California Competes
California Faculty Association
California State Student Association
California Student Aid Commission
Campaign for College Opportunity
Community College League of California
Education Trust - West
Faculty Association of California Community Colleges
Los Angeles Area Chamber of Commerce
Los Angeles Community College District
NAACP California
NAACP Los Angeles
National Council of La Raza 5
Public Advocates
Southern California College Access Network
Student Senate for California Community Colleges
The Institute for College Access and Success
University of California Student Association
West Coast University
Young Invincibles
ARGUMENTS IN SUPPORT : According to the author, adjusted for
inflation, a Cal Grant B award today should be $5,900. Instead,
it has lost most of its purchasing power over time and is
currently only $1,473. Receiving more financial aid to cover
non-tuition costs will enable students to limit their work hours
while enrolled, reduce their need to borrow, and ensure that
they can focus on their studies and graduate.
PQ:nl 1/23/14 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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