BILL ANALYSIS Ó
SB 174
Page 1
SENATE THIRD READING
SB 174 (De León)
As Amended January 6, 2014
Majority vote
SENATE VOTE :34-0
HIGHER EDUCATION 11-0 APPROPRIATIONS 17-0
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|Ayes:|Williams, Fong, Fox, |Ayes:|Gatto, Bigelow, |
| |Jones-Sawyer, Levine, | |Bocanegra, Bradford, Ian |
| |Linder, Medina, Olsen, | |Calderon, Campos, |
| |Quirk-Silva, Weber, Wilk | |Donnelly, Eggman, Gomez, |
| | | |Holden, Jones, Linder, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Provides for the use of funds from the College Access
Tax Credit Fund (Fund) to increase Cal Grant B access awards,
administered by the California Student Aid Commission (CSAC) up
to a maximum of $5,000 per award per academic year, contingent
upon enactment of SB 798 (De León) of the current legislative
session. Specifically, this bill :
1)Provides that monies appropriated from the Fund are in
addition to other monies appropriated for the Cal Grant
Program, and that during the existence of the Fund the amount
of the Cal Grant B access award may not be adjusted below the
amount in the 2012 Budget Act.
2)Requires the State Treasurer, on April 1, 2015, and each April
1 thereafter, to certify the amount of monies available for
distribution from the Fund for the following academic year and
provides that the amount available for distribution may not
exceed 85% of the Fund balance.
3)Requires CSAC to determine the amount of the supplemental
awards to be granted and to include that amount in the annual
budget change proposals previously submitted to the Department
of Finance by CSAC. Upon appropriation by the Legislature to
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the CSAC in the annual Budget Act, the monies become available
for making awards to students.
4)Provides that any monies available in the fund after making
supplemental awards shall remain in the fund for allocation in
future fiscal years.
5)Provides that disbursements from the Fund shall be made for
the following purposes:
a) To supplement awards made for "access costs" as defined
under the provisions of the Cal Grant Program. Limits the
amount of the supplemental award, when added to the annual
access award amount established by the Budget Act, to
$5,000.
b) To defray the administrative costs incurred by CSAC in
connection with these responsibilities.
6)Provides that awards are only payable to the extent monies are
available from the Fund. Requires CSAC to inform award
recipients that the award is for one academic year only, is
not an entitlement, and that future supplemental awards are
subject to the availability of monies in the Fund.
7)Becomes operative only if SB 798 is enacted and becomes
operative on or before January 1, 2015.
8)Declares this act an urgency to take effect immediately in
order for this program to be funded by donations to the
College Access Tax Credit Fund made during 2014, to provide
adequate funding for Cal Grant B access awards beginning in
the 2015-16 academic year so that students receiving these
awards can stay enrolled.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the amount of funds allocated for supplemental Cal
Grant B Access Awards will depend on the amounts contributed by
taxpayers, per the provisions of SB 798, to the College Access
Tax Credit Fund net of the total tax credits claimed by these
taxpayers and state administrative costs. This amount is
unknown but could be up to several hundred million dollars
annually for three years. CSAC will incur annual costs of
around $140,000 for three years for 1.5 positions for
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administrative functions related to the supplemental grant.
COMMENTS : According to the author, this bill will increase the
underfunded Cal Grant B access award amount for California's
lowest income students to improve graduation rates. The author
notes that, adjusted for inflation, the Cal Grant B access award
today should be $5,900; instead it has lost most of its
purchasing power over time and is currently set at only $1,473.
According to the author, there is significant research that
shows that students who work more hours take longer to graduate;
grant aid is the proven equalizer that allows low-income
students to persist and complete degrees at rates that equal
those of their higher-income peers. This bill, in coordination
with SB 798, is intended to enable CSAC to double the Cal Grant
B access award during tough economic times.
The implementation of this bill is contingent upon the funding
source established in SB 798, which would, for taxable years
2014 through 2016, allow taxpayers, upon receipt of California
Educational Facilities Authority certification, to receive a tax
credit for a specified percentage of cash contributions made to
the Fund.
SB 284 (De León) of 2013, which was identical to this bill, was
approved by the Legislature and subsequently vetoed by Governor
Brown due to a technical error contained in the companion
measure, SB 285 (De León) of 2013, that negatively impacted
Proposition 98 of 1988 funding guarantee. The companion measure
to this bill, SB 798 corrects this technical error.
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960
FN: 0004791