BILL ANALYSIS Ó
SB 285
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SENATE THIRD READING
SB 285 (De León)
As Amended May 21, 2013
Majority vote
SENATE VOTE :39-0
HIGHER EDUCATION 12-0 APPROPRIATIONS 16-0
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|Ayes:|Williams, Chávez, Bloom, |Ayes:|Gatto, Harkey, Bigelow, |
| |Fong, Fox, Levine, | |Bocanegra, Bradford, Ian |
| |Linder, Medina, Olsen, | |Calderon, Campos, Eggman, |
| |Quirk-Silva, Weber, Wilk | |Gomez, Hall, Holden, |
| | | |Linder, Pan, Quirk, |
| | | |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 up
to a maximum of $5,000 per award per academic year, contingent
upon enactment of SB 284 (De León). 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 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 the California Student Aid Commission (Commission) 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
the Commission. Upon appropriation by the Legislature to the
Commission in the annual Budget Act, the monies become
available for making awards to students.
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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 the
Commission in connection with these responsibilities.
6)Provides that awards are only payable to the extent monies are
available from the Fund. Requires the Commission 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 284 (De León) is enacted and
becomes operative on or before January 1, 2014.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)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 284, to the 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.
If $240 million was made available through the tax credit, the
access award for that year would be increased from $1,473 to
$3,000 per student.
2)The Commission will incur annual costs of around $140,000 for
three years for 1.5 positions to field additional calls
generated by additional notifications regarding the
supplemental grant, to revise the Web site, publication, and
award notifications, estimate and determine actual award
amounts based on available funds, and other administrative
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functions.
COMMENTS :
Background . In the first award year, Cal Grant B students are
awarded a grant to cover access costs, defined as living
expenses and expenses for transportation, supplies, and books.
After the freshman year, the Cal Grant B award may also include
tuition and fee coverage in the same amount as the Cal Grant A
award. Current law limits the access award to $1,551, but
allows the amount to be adjusted in the annual Budget Act. The
2012 Budget Act reduced the award to $1,473; that amount was
maintained in the 2013 Budget Act. According to the Commission,
in 2012-13, the average income for new Cal Grant B recipients
was $16,511. There were a total of 128,426 new recipients of
Cal Grant B. The largest number and percentage of Cal Grant B
recipients were at the California Community Colleges (48%).
Purpose of this bill . According to the author, this legislation
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 284, is intended to enable the
Commission to double the Cal Grant B access award during tough
economic times.
Contingent enactment . The implementation of this bill is
contingent upon the funding source established in SB 284 (De
León), 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.
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960
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