Bill Text: CA AB2821 | 2021-2022 | Regular Session | Amended
Bill Title: California Kids Investment and Development Savings Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2022-08-22 - Chaptered by Secretary of State - Chapter 164, Statutes of 2022. [AB2821 Detail]
Download: California-2021-AB2821-Amended.html
|
Amended
IN
Assembly
April 04, 2022 |
|
Amended
IN
Assembly
March 24, 2022 |
| Introduced by Assembly Member Nazarian |
February 18, 2022 |
LEGISLATIVE COUNSEL'S DIGEST
(1)Existing
This bill would include expenses at registered apprenticeship programs as qualified higher education expenses at an institution of higher education, for purposes of the KIDS program. By expanding the uses of a continuously appropriated fund, the bill would make an appropriation. The bill would delay the date by which the board is required to determine, for purposes KIDS Program eligibility, to no later than July 1, 2023.
(2)Existing law requires the board to notify each parent of each eligible child about the program within 90 days of receiving birth data from the State Department of Public Health.
This bill would instead require the board to only notify at
least one parent of each eligible child about the program.
(3)Existing law requires the board, upon receiving documentation of a child’s enrollment as a student at an institution of higher education, and the student self-certifying that they have resided in the state for at least one year immediately preceding the payment of qualified higher education expenses on the student’s behalf, to make a specified payment to that institution, as provided.
This bill would eliminate the documentation requirement and instead would only require students to self-certify that they are enrolled at an institution of higher education.
(4)Existing law requires, subject to available funding, that the KIDS Program be implemented on or before July 1, 2022. If the board does not secure adequate funds to implement the program before July 2, 2022, existing law
authorizes program implementation to be delayed while the board makes good faith efforts to secure necessary funding.
This bill would delay those dates to July 1, 2023, and July 2, 2023, respectively.
(5)Existing law establishes KIDS Accounts for all unduplicated pupils entering grades 1 to 12, inclusive, in the 2021–22 fiscal year, and for unduplicated pupils who are entering first grade commencing with the 2022–23 fiscal year, if one has not already been established for them under the KIDS Program.
This bill would instead establish KIDS Accounts for all unduplicated pupils enrolled in grades 1 to 12, inclusive, on the State Department of Education’s official census day in the 2021–22 fiscal year, and for unduplicated pupils who are enrolled in first grade on the State Department of Education’s official census day in the applicable fiscal year, if one has
not already been established for them under the KIDS Program.
(6)Existing law requires the board, on or before June 30, 2022, and annually thereafter, to report to the Department of Finance and the Legislature, information pertaining to the KIDS program’s implementation, as provided.
This bill would delay that initial reporting requirement to June 30, 2023, and in addition to that report would require the board to report to the Department of Finance and the Legislature, on or before December 31, 2023, on specified information for the 2022–23 fiscal year.
Digest Key
Vote:Bill Text
The people of the State of California do enact as follows:
For the purposes of this article, unless the context requires otherwise, the following definitions apply:
(a)“Account” means a Scholarshare 529 account established pursuant to this article under Article 19 (commencing with Section 69980), or other child savings plan where applicable and as determined by the board.
(b)“Beneficiary” is an eligible child receiving funds under the program.
(c)“Board” means the Scholarshare Investment Board created pursuant to Section 69984.
(d)“Enhanced deposit” means an initial or supplemental contribution into a KIDS Account or another plan option
determined by the board pursuant to Section 69996.9.
(e)“Fund” means the California Kids Investment and Development Savings Program Fund established pursuant to subdivision (a) of Section 69996.6.
(f)“Institution of higher education” has the same meaning as “eligible educational institution,” as provided in Section 529(e)(5) of the Internal Revenue Code, and registered apprenticeship programs registered under the National Apprenticeship Act of 1937 (29 U.S.C. Sec. 50 et seq.), except as provided in Section 3226 of Title 29 of the United States Code.
(g)“Internal Revenue Code” means the Internal Revenue Code of 1986, as it is amended from time to time, if, as determined by the board, the amendment is
consistent with the purposes of this article.
(h)“KIDS Account” means an account in which designated funding for eligible children is held.
(i)“Low-income households” means households with a total annual adjusted gross income less than seventy-five thousand dollars ($75,000) or households identified by the board by other means as low-income for purposes of the program.
(j)“Participant” means a parent or legal guardian of an eligible child, or a parent or legal guardian of a child described in subdivision (i) of Section 69996.3, or any private individual or entity who contributes moneys to the program.
(k)“Program” means the California Kids Investment and Development Savings Program established pursuant to this article.
(l)“Qualified higher education expenses” means the expenses of attendance at an institution of higher education, as provided in Section 529(e)(3) of the Internal Revenue Code, or at a registered apprenticeship program, as provided in Section 529(c)(8) of the Internal Revenue Code. Notwithstanding Section 529(c)(7) of the Internal Revenue Code, “qualified higher education expenses” shall not include any tuition expenses in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.
(m)“Seed deposit” means an initial contribution into a KIDS Account for a child born on or after a date determined by the board.
(a)(1)Each child born on or after a date determined by the board pursuant to paragraph (2) who is a California resident at the time of birth is eligible for the program.
(2)The date designated by the board for which eligibility commences shall be no later than July 1, 2023.
(b)No later than 90 days after a birth certificate is registered for a child described in subdivision (a), the State Department of Public Health shall provide the board with identifiable birth data for the
child in a file format as defined by the board. The birth data shall include the child’s name and birth date and the name and contact information of each parent of the child, including the parent’s street address and, if provided to the department, the parent’s mobile telephone number and email address. In addition, upon request by the board, the department shall include, in the birth data it provides to the board, information collected pursuant to subparagraph (C) of paragraph (2) of subdivision (a) of Section 102426 of the Health and Safety Code. The department may provide additional identifiable birth data to the board, upon request, and upon a determination by the State Registrar, in consultation with the board, that the data is necessary for administration of the program. The birth data is confidential and shall not be disclosed except as necessary for the program. No more than 90 days after receiving the birth data from the department, the board shall notify
at least one parent of each eligible child about the program. The notification shall include information on all of the following:
(1)How the parent may opt out of the program.
(2)The KIDS Account opened for the child pursuant to subdivision (f).
(3)How the parent may establish a separate account pursuant to Article 19 (commencing with Section 69980) and additional financial incentives provided pursuant to that article.
(c)The board shall make a child’s designated balance in a KIDS Account viewable by the child’s parent or legal guardian through a secured internet link.
(d)The board shall establish rules and regulations for a program recipient
child, and the child’s parents or legal guardians, to be notified of the moneys deposited and accrued in the child’s KIDS Account, and rules and regulations regarding the establishment and operation of program components, including, but not limited to, the claims process, necessary documentation, deadlines for the claims, an appeals procedure, and any forfeiture procedures. A KIDS Account recipient child and each of the child’s parents or legal guardians shall be informed of the establishment of the child’s KIDS Account, provided information on how the parent or legal guardian may establish a separate account pursuant to Article 19 (commencing with Section 69980), and provided information on opportunities for financial incentives provided pursuant to that article.
(e)The board shall translate program notifications and information provided pursuant to subdivisions (b) to (d), inclusive, into languages pursuant to Section 7295.2 of the
Government Code.
(f)Upon appropriation by the Legislature, the board shall establish one or more accounts and shall make a separately accounted-for seed deposit from the fund into a KIDS Account established within an account in an amount determined by the board. Each seed deposit shall be designated for a particular child for whom the board receives birth data pursuant to subdivision (b), if no parent or legal guardian has opted that child out of the program. Moneys in a KIDS Account designated for a child, including any investment earnings attributed to the amount of the child’s seed deposit since the date of the deposit as calculated by the board, shall be used for the purpose of providing awards for qualified higher education expenses associated with the attendance of the child at an eligible institution of higher education. Each seed deposit shall be at least twenty-five dollars ($25). The board may provide additional financial incentives
designated for a child into a KIDS Account if the parent or legal guardian of the child engages with the KIDS Account by verifying receipt of information provided pursuant to paragraph (2) of subdivision (b), establishing a separate account pursuant to Article 19 (commencing with Section 69980), or engaging with the KIDS Account by other means approved by the board.
(g)Upon the student self-certifying that they are enrolled at an institution of higher education and that they have resided in the state for at least one year immediately preceding the payment of qualified higher education expenses on the student’s behalf, the board shall make a payment to
that institution in the amount of the seed deposit, enhanced deposit, if applicable, and any additional financial incentives designated for the child pursuant to subdivision (f), plus any investment earnings attributed to that amount since the date of that deposit as calculated by the board, for qualified higher education expenses associated with the child’s attendance at that institution.
(h)Subject to available money in the fund, the board may provide additional incentives from the fund for children participating in the program, including, but not limited to, incentives targeting low-income households.
(i)(1)Subject to available funding, a parent or legal guardian, residing in California, of a child who meets the criteria in paragraph (2) may apply to the board to enroll the child into the program. Subject to available funding, the enrollee shall be
eligible for any incentives described in subdivision (h), as applicable, but is not eligible for a seed deposit.
(2)The child is a current California resident under six years of age who was both of the following:
(A)Born on or after the date designated by the board for which eligibility commences.
(B)Not a California resident at the time of birth.
(j)(1)A KIDS Account established pursuant to this article, and its investment earnings, shall remain assets of, and owned by, the state until used for the payment of qualified higher education expenses at an institution of higher education, and funds shall remain invested until they are used for the purposes authorized by this article or until the recipient achieves 26 years of age,
whichever occurs first. If a beneficiary does not use any portion, or all, of the moneys intended for the beneficiary in a KIDS Account for a qualified higher education expense for any reason, including the death or disability of the beneficiary, before the beneficiary turns 26 years of age, all contributions made for the beneficiary into the KIDS Account and any earnings from those moneys shall be forfeited and deposited into the fund for the program.
(2)Notwithstanding paragraph (1), subject to available funding, the board may establish an appeal process to allow a beneficiary to use the moneys designated for the beneficiary in a KIDS Account after the beneficiary turns 26 years of age.
(3)Moneys, less applicable penalties, collected pursuant to Section 529 of the Internal Revenue Code not used within the time period described in paragraph (1) shall revert to the fund after
the payment of any amount determined to be due to the federal government as a result of the reversion.
(4)All contributions made into a KIDS Account for a child who has opted out of the program pursuant to subdivision (b), including any investment earnings attributed to the amount of the child’s seed deposit since the date of the deposit as calculated by the board, shall be forfeited and deposited into the fund for the program in a timely manner.
(k)The board shall encourage each parent and legal guardian of a beneficiary, including each parent and legal guardian of a child who applies to enroll the child into the program as a beneficiary pursuant to subdivision (i), to establish a separate account pursuant to Article 19 (commencing with Section 69980). The board shall provide assistance on how to establish the separate account.
(l)The board may use up to 5 percent of state appropriations provided for purposes of the program for administrative costs. Unless otherwise specified in the annual Budget Act, this subdivision shall not apply to any one-time or ongoing local assistance funds first appropriated in support of the program beginning in the 2021–22 fiscal year.
SEC. 3.SECTION 1.
Section 69996.6 of the Education Code is amended to read:69996.6.
(a) The California Kids Investment and Development Savings Program Fund is hereby established in the State Treasury. Notwithstanding Section 13340 of the Government Code, except for moneys derived from the federal American Rescue Plan Act, moneys in the fund shall be continuously appropriated, without regard to fiscal years, to the board for the program. The fund shall be the initial repository of all appropriations, gifts, or other financial assets received by the board in connection with operation of the program.(a)(1)For the 2021–22 fiscal year, through the program, all of the following shall occur:
(A)Each pupil enrolled in grades 1 to 12, inclusive, on the State Department of Education’s official census day in the 2021–22 fiscal year who meets the requirements to be considered an unduplicated pupil for purposes of paragraph (1) of subdivision (b) of Section 2574 or paragraph (1) of subdivision (b) of Section 42238.02 and who is enrolled at a school district, public charter school, state special school, or other local
educational agency, shall have a KIDS Account established on the pupil’s behalf, unless the pupil’s KIDS Account has already been established pursuant to Section 69996.3, and shall receive an enhanced deposit into the pupil’s KIDS Account in the amount of five hundred dollars ($500).
(B)In addition to the amount allocated pursuant to subparagraph (A), the KIDS Account of each eligible pupil who is also a foster youth, as defined under subdivision (b) of Section 42238.01, shall receive an enhanced deposit of an additional five hundred dollars ($500).
(C)In addition to the amount allocated pursuant to subparagraphs (A) and (B), the KIDS Account of each eligible pupil who is also a homeless pupil meeting the definition of “homeless children and youths” in subsection (2) of Section 725 of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11434a(2)) shall receive an
enhanced deposit of an additional five hundred dollars ($500).
(2)Commencing with the 2022–23 fiscal year, through the program, all of the following shall occur:
(A)Each pupil who meets all of the following conditions shall have a KIDS Account opened on their behalf, unless their account has already been established pursuant to Section 69996.3, and shall receive an enhanced deposit into their KIDS Account in the amount of five hundred dollars ($500):
(i)The pupil is enrolled in first grade on the State Department of Education’s official census day in the applicable fiscal year.
(ii)The pupil meets the requirements to be considered an unduplicated pupil for purposes of paragraph (1) of subdivision (b) of Section 2574 or paragraph (1) of subdivision (b) of Section 42238.02.
(iii)The pupil is enrolled at a school district, public charter school, state special school, or other local educational agency.
(B)In addition to the amount allocated pursuant to subparagraph (A), the KIDS Account of each pupil who meets the requirements of subparagraph (A) and is also a foster youth, as defined under subdivision (b) of Section 42238.01, shall receive an enhanced deposit of an additional five hundred dollars ($500).
(C)In addition to the amount allocated pursuant to subparagraphs (A) and (B), the KIDS Account of each pupil who meets the
requirements of subparagraph (A) and is also a homeless pupil under the definition of “homeless children and youths” in subsection (2) of Section 725 of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11434a(2)) shall receive an enhanced deposit of an additional five hundred dollars ($500).
(D)For pupils for whom a KIDS Account has already been established pursuant to Section 69996.3 and who are also eligible for an enhanced deposit pursuant to this paragraph, the enhanced deposit shall be deposited in the KIDS Account in which funding for that pupil is currently held.
(3)A pupil who receives an enhanced deposit into their KIDS Account pursuant to paragraph (1) or (2) may only have one enhanced deposit made into their existing or newly established KIDS Account pursuant to this article. A pupil shall not have more than one KIDS Account established for them
pursuant to this article.
(b)(1)The board shall collaborate with the State Department of Education, or other relevant governmental agencies, to identify eligible pupils for the purpose of establishing KIDS Accounts or making an enhanced deposit into existing KIDS Accounts pursuant to this section. To the extent feasible, the State Department of Education shall annually provide necessary data using census day data in a secure manner for the board to fulfill its obligations pursuant to this article, including, but not necessarily limited to, eligible pupils’ names, pupil identification, birth dates, grade levels, contact information of parents or legal guardians, and eligibility information. For purposes of this subdivision, the information received by the board shall be considered necessary to facilitate the establishment or enhancement of KIDS Accounts, or the establishment of a notification process for parents or legal
guardians of eligible pupils.
(2)The board shall comply with federal and state laws to protect individual privacy, including, but not limited to, the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code) and all of the following federal statutes:
(A)The Family Educational Rights and Privacy Act of 1974 (Public Law 93-380, as amended).
(B)The Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191, as amended).
(C)The Higher Education Act of 1965 (Public Law 89-329, as amended).
(3)Notwithstanding any other law, individual records or source data associated with the establishment of a
KIDS Account pursuant to this article shall not be subject to disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(c)The Legislature finds and declares that undocumented persons are eligible for KIDS Accounts within the meaning of subsection (d) of Section 1621 of Title 8 of the United States Code.
(d)It is the intent of the Legislature to appropriate state funding in the annual Budget Act to support the establishment of a KIDS Account for any eligible pupil who meets, or could meet in a future year, the requirements to be exempt from nonresident tuition pursuant to subdivision (a) of Section 68130.5.
(a)In addition to the reporting requirements pursuant to subdivision (c) of Section 69996.6, the board shall report to the Department of Finance and the Legislature, in compliance with Section 9795 of the Government Code, on or before December 31, 2023, on each of the following:
(1)The number of KIDS Accounts opened in the 2022–23 fiscal year.
(2)The number of school-aged children receiving a deposit in the 2022–23 fiscal year.
(3)The total costs for the 2022–23 fiscal year.
(b)Pursuant to Section 10231.5 of the Government Code, this section is
repealed on January 1, 2028.
