BILL NUMBER: AB 573	ENROLLED
	BILL TEXT

	PASSED THE SENATE  SEPTEMBER 11, 2015
	PASSED THE ASSEMBLY  SEPTEMBER 11, 2015
	AMENDED IN SENATE  SEPTEMBER 4, 2015
	AMENDED IN SENATE  AUGUST 31, 2015
	AMENDED IN SENATE  AUGUST 18, 2015
	AMENDED IN SENATE  JULY 9, 2015
	AMENDED IN SENATE  JUNE 2, 2015
	AMENDED IN ASSEMBLY  MAY 11, 2015
	AMENDED IN ASSEMBLY  MAY 7, 2015
	AMENDED IN ASSEMBLY  MAY 4, 2015

INTRODUCED BY   Assembly Members Medina and McCarty
   (Principal coauthor: Senator Block)
   (Coauthors: Assembly Members Alejo, Atkins, Baker, Bonilla, Brown,
Calderon, Chau, Chávez, Chiu, Chu, Cooley, Dababneh, Eggman,
Frazier, Gipson, Hadley, Kim, O'Donnell, Olsen, Quirk, Ridley-Thomas,
Rodriguez, Santiago, Thurmond, and Ting)
   (Coauthors: Senators Gaines, Galgiani, Hill, Runner, and
Wieckowski)

                        FEBRUARY 24, 2015

   An act to amend Section 94925 of, and to add Sections 69433.61,
69999.19, 94051, and 94926.5 to, the Education Code, relating to
higher education, making an appropriation therefor, and declaring the
urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 573, Medina. Higher education: campus closures: Corinthian
Colleges.
   (1) The California Private Postsecondary Education Act of 2009
provides for the regulation of private postsecondary educational
institutions by the Bureau for Private Postsecondary Education in the
Department of Consumer Affairs. The act also establishes the Student
Tuition Recovery Fund and requires the bureau to adopt regulations
governing the administration and maintenance of the fund, including
requirements relating to assessments on students and student claims
against the fund, and establishes that the moneys in this fund are
continuously appropriated to the bureau for specified purposes. The
act caps the amount that may be in the fund at any time at
$25,000,000.
   This bill would raise the cap for the fund to $30,000,000.
   (2) This bill would appropriate the sum of $1,300,000 from the
Student Tuition Recovery Fund to the Attorney General for the
purposes of providing grants to eligible nonprofit community service
organizations to assist eligible students affected by the closure of
Corinthian Colleges, Inc., as defined, with loan discharge and other
student loan-related requests and tuition recovery-related claims,
and to pay an amount not to exceed $150,000 for the reasonable
administrative costs of the Attorney General's office related to
these grants, as specified, thereby making an appropriation. The bill
would require the bureau to notify the Attorney General of all
unlawful Corinthian Colleges, Inc., closures within 15 days of the
effective date of these provisions. The bill would require the
Attorney General to, among other things, within 90 days of the
notification, solicit grant applications from eligible nonprofit
community service organizations, select one or more of these
organizations deemed to be qualified, and set additional terms and
conditions of the grants as necessary. The bill would set a schedule
for how grant funds are to be distributed. The bill would require the
grantee to submit specified information to the Attorney General on a
quarterly basis, and require the Attorney General to make these
reports available to the Legislature and the bureau upon request. The
bill would require the Attorney General to provide the Legislature
and the bureau a final report summarizing all the information
submitted to it by grantees, promptly following the time when all
funds are expended by the grantees, or by August, 1, 2018, whichever
is earlier. The bill would authorize the Attorney General to contract
with another qualified entity to perform the Attorney General's
duties under these provisions.
   (3) This bill would, for a period not to exceed 2 years from April
27, 2015, authorize state agencies that provide certification,
registration, or licensure necessary to promote the safety and
protection of the public to, on a case-by-case basis, consider for
certification, registration, or licensure students who were enrolled
in a program of Corinthian Colleges, Inc., that provided education or
training aimed towards these students receiving certification,
registration, or licensure from the state agency, and who did not
receive that certification, registration, or licensure due to the
closure of that institution.
   (4) The Cal Grant Program prohibits an applicant from receiving
Cal Grant awards totaling in excess of the amount equivalent to the
award level for a total of four years of full-time attendance in an
undergraduate program, except as provided.
   This bill would partially exempt from this limitation on Cal Grant
awards a student who was enrolled and received a Cal Grant award at
a California campus of Heald College, and who was unable to complete
an educational program offered by the campus due to its closure.
   (5) The California National Guard Education Assistance Award
Program authorizes the renewal of California National Guard Education
Assistance Awards, for a maximum of the greater of either four years
of full-time equivalent enrollment or the duration for which the
qualifying member would otherwise be eligible pursuant to the Cal
Grant Program, if specified conditions are met.
   This bill would partially exempt from this limitation on
California National Guard Education Assistance Awards a student who
was enrolled and received a California National Guard Education
Assistance Award at a California campus of Heald College, and who was
unable to complete an educational program offered by the campus due
to its closure.
   (6) This bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  It is the intent of the Legislature that unencumbered
restitution funds awarded to the state from a lawsuit involving
Corinthian Colleges, Inc., and its affiliate institutions, including
Heald College, shall be used to repay any funds provided to students
pursuant to this act.
  SEC. 2.  Section 69433.61 is added to the Education Code, to read:
   69433.61.  (a) Notwithstanding any other law, a student who was
enrolled and received a Cal Grant award in the 2013-14 or 2014-15
academic year at a California campus of Heald College, and was unable
to complete an educational program offered by the campus due to the
campus' closure on April 27, 2015, shall not have the award years
used at a Heald College campus considered for purposes of the
limitation on the number of years of Cal Grant award eligibility.
This restoration of award years for Cal Grant eligibility shall not
exceed two years.
    (b) A student shall be eligible for the restoration of award
years if the student was enrolled at a campus of Heald College on
April 27, 2015, or withdrew from enrollment between July 1, 2014, and
April 27, 2015. The Bureau for Private Postsecondary Education shall
provide the commission with information, if available, to confirm
student enrollment for purposes of this section.
   (c) An eligible student shall, before January 1, 2017, notify the
commission of his or her intent to use the restoration of award years
provided under this section and to enroll in an institution eligible
for initial and renewal Cal Grant awards to be eligible for that
restoration.
  SEC. 3.  Section 69999.19 is added to the Education Code, to read:
   69999.19.  (a) Notwithstanding any other law, a student who was
enrolled and received a California National Guard Education
Assistance Award in the 2013-14 or 2014-15 academic year at a
California campus of Heald College, and was unable to complete an
educational program offered by the campus due to the campus' closure
on April 27, 2015, shall not have the award years used at a Heald
College campus considered for purposes of the limitation on the
number of years of California National Guard Education Assistance
Award eligibility. This restoration of award years for California
National Guard Education Assistance Award eligibility shall not
exceed two years.
   (b) A student shall be eligible for the restoration of award years
if the student was enrolled at a campus of Heald College on April
27, 2015, or withdrew from enrollment between July 1, 2014, and April
27, 2015. The Bureau for Private Postsecondary Education shall
provide the commission with information, if available, to confirm
student enrollment for purposes of this section.
   (c) An eligible student shall, before January 1, 2017, notify the
commission of his or her intent to use the restoration of award years
provided under this section and to enroll in an institution eligible
for initial and renewal California National Guard Education
Assistance Awards to be eligible for that restoration.
  SEC. 4.  Section 94051 is added to the Education Code, to read:
   94051.  Notwithstanding any provision of law, for a period not to
exceed two years from the date of the closure of Corinthian Colleges,
Inc., a state agency that provides certification, registration, or
licensure necessary to promote the safety and protection of the
public may, on a case-by-case basis, consider for certification,
registration, or licensure students who were enrolled in a program of
Corinthian Colleges, Inc., that provided education or training aimed
towards these students receiving certification, registration, or
licensure from the state agency, and who did not receive that
certification, registration, or licensure due to the closure of
Corinthian Colleges, Inc. This consideration shall be provided at the
discretion of the state agency in accordance with its public
protection mandate and applicable criteria established by the agency
for consumer safety.
  SEC. 5.  Section 94925 of the Education Code is amended to read:
   94925.  (a) The amount in the Student Tuition Recovery Fund shall
not exceed thirty million dollars ($30,000,000) at any time.
   (b) If the bureau has temporarily stopped collecting the Student
Tuition Recovery Fund assessments because the fund has approached the
thirty million dollar (30,000,000) limit in subdivision (a), the
bureau shall resume collecting Student Tuition Recovery Fund
assessments when the fund falls below twenty million dollars
($20,000,000).
   (c) An otherwise eligible student who enrolled during a period
when institutions were not required to collect Student Tuition
Recovery Fund assessments is eligible for Student Tuition Recovery
Fund payments despite not having paid any Student Tuition Recovery
Fund assessment.
  SEC. 6.  Section 94926.5 is added to the Education Code, to read:
   94926.5.  (a) The Legislature finds and declares all of the
following:
   (1) Corinthian Colleges, Inc., has been the target of consumer and
taxpayer protection enforcement efforts by the federal government,
the Attorney General, and other state and federal authorities.
   (2) Based on findings of harm to students enrolled at Corinthian
Colleges, Inc., campuses, the United States Department of Education
has announced debt relief programs to assist students, including all
of the following:
   (A) A student who attended a Corinthian Colleges, Inc., campus
that closed on April 27, 2015, and withdrew any time after June 20,
2014, is eligible to apply for a closed school loan discharge, so
long as the student does not transfer earned credit and subsequently
complete a comparable program at another institution.
   (B) A student who believes he or she was a victim of fraud or
other violations of state law by Corinthian Colleges, Inc., can apply
for debt relief under borrower defense to repayment. The United
States Department of Education has determined that Corinthian
Colleges, Inc., misrepresented job placement rates for a majority of
programs at its Heald College campuses between 2010 and 2014 and is
in the process of establishing a specific process for federal loan
discharge for these Heald students.
   (C) A Corinthian student who intends to submit a borrower defense
claim may request loan forbearance while a claims review process is
established and his or her claim is reviewed.
   (3) Pursuant to Section 94923, the Student Tuition Recovery Fund
exists to relieve or mitigate a student's economic loss caused by a
documented violation of certain laws or by institutional closure, as
specified.
   (4) On October 10, 2013, the Attorney General filed a lawsuit
against Corinthian Colleges, Inc., for false and predatory
advertising, intentional misrepresentations to students, securities
fraud, and unlawful use of military seals in advertisements, in
violation of the 2007 final judgment of the Los Angeles Superior
Court in the People of the State of California v. Corinthian Schools,
Inc.
   (5) On April 16, 2015, the bureau issued an emergency decision
ordering Corinthian Colleges, Inc., to cease enrollment of any new
students in all programs at Everest College and WyoTech locations in
California effective upon close of business April 23, 2015.
   (6) It is consistent with the purpose of the Student Tuition
Recovery Fund to provide assistance to Corinthian Colleges, Inc.,
students to obtain federal and private loan discharge and other
financial aid relief.
   (b) Upon appropriation by the Legislature, in response to the
student harm caused by the practices and unlawful closure of
Corinthian Colleges, Inc., grant funds shall be timely provided in
accordance with this section to eligible nonprofit community service
organizations, to assist the eligible students of that closed
institution, including veterans, by relieving or mitigating the
economic and educational opportunity loss incurred by eligible
students of that institution.
   (c) Services provided by eligible nonprofit community services
organizations shall include assistance with loan discharge and other
student financial aid, veterans education benefits, loan-related
relief, and tuition recovery-related claims. Assistance may include,
but is not limited to, outreach and education, screening requests for
assistance, referring students for additional legal assistance
through pro bono referral programs, and legal services.
   (d) The terms and conditions of the grant agreements shall ensure
that grant funds are used for the exclusive purpose of assisting
eligible students with federal and private loan discharge and other
financial aid relief, and that students eligible to claim recovery
through the Student Tuition Recovery Fund are referred to the bureau
for assistance with claim processing.
   (e) For purposes of this section, an "eligible nonprofit community
service organization" is an organization that satisfies all of the
following conditions:
   (1) The organization is a 501(c)(3) tax-exempt organization in
good standing with the Internal Revenue Service and in compliance
with all applicable laws and requirements.
   (2) The organization demonstrates expertise in assisting students
with, and currently provides free direct legal services to students
for, or will work in partnership with or under the supervision of an
attorney or a nonprofit legal services organization that has
demonstrated expertise in assisting students with, student loan and
tuition recovery-related matters.
   (3) The organization does not charge students for services,
including services provided pursuant to this section.
   (f) For purposes of this section, an "eligible student" is a
student who was enrolled at a California campus of, or a California
student who was enrolled in an online campus of, a Corinthian
Colleges, Inc., institution, and who is eligible to apply for debt
relief from the United States Department of Education or other
student financial aid relief.
   (g) (1) The bureau shall notify the Attorney General of all
unlawful Corinthian Colleges, Inc., closures within 15 days of the
effective date of this section.
   (2) The notification shall include the name and location of the
school, the programs, and the number of students affected at each
site of the school, as appropriate. The bureau shall provide the
Attorney General with all additional information that the Attorney
General may request, provided that the bureau has access to the
requested information.
   (3) The Attorney General shall, within 90 days of receipt of the
notification, solicit grant applications from eligible nonprofit
community service organizations as described in subdivision (e),
select one or more of these organizations from among the applicants
who are deemed to be qualified by the Attorney General, set
additional terms and conditions of the grants as necessary, and
notify the bureau and the recipient organization or organizations of
the selection and the share of grant funds available that the
organization shall receive. The Attorney General may enter into a
contract with another qualified entity to perform the Attorney
General's duties under this subdivision.
   (h) An eligible nonprofit community service organization that
receives funds pursuant to this section shall enter into a grant
agreement with the Attorney General, or a qualified entity entrusted
with this authority pursuant to paragraph (3) of subdivision (g), as
applicable, and shall use grant funds exclusively for the purposes
set forth in this section in accordance with the agreement. Any
unused funds shall be returned to the Attorney General, for return to
the Student Tuition Recovery Fund. The Attorney General, or a
contracted qualified entity, may terminate the grant agreement for
material breach, and may require repayment of funds provided to the
nonprofit community service organization during the time that the
agreement was being materially breached. However, the Attorney
General, or a qualified entity, shall provide the grantee with
written notice of the breach and a reasonable opportunity of not less
than 30 days to resolve the breach.
   (i) An eligible nonprofit community service organization that
receives a grant may give priority to low-income students if demand
exceeds available grant funds. Otherwise, the organization may
provide assistance regardless of student income level.
   (j) (1) An eligible nonprofit community service organization that
receives a grant shall report to the Attorney General, or a qualified
entity pursuant to paragraph (3) of subdivision (g), as applicable,
quarterly through the grant period on all of the following:
   (A) The number of eligible students served pursuant to the grant
agreement.
   (B) A detailed summary of services provided to those students.
   (C) The number of Student Tuition Recovery Fund claims referred to
the bureau.
   (D) The number of federal loan forgiveness claims filed and the
number of those claims approved, denied, and pending.
   (E) Any other information that is deemed appropriate by the
Attorney General or qualified entity, as applicable.
   (2) The Attorney General or qualified entity, as applicable, shall
make the reports submitted pursuant to paragraph (1) available to
the Legislature and the bureau upon request.
   (3) The Attorney General or qualified entity, as applicable, shall
provide the Legislature and the bureau a final report summarizing
the information submitted pursuant to paragraph (1) promptly
following the time when all funds are expended by the grantees or by
August 1, 2018, whichever is earlier.
   (k) Funds shall be distributed to preapproved nonprofit community
service organizations as follows:
   (1) Fifty percent shall be distributed to the grantee within 30
days of the grantee entering into a grant agreement.
   (2) Twenty-five percent shall be distributed to the grantee upon
the submission of the grantee's second quarterly report.
   (3) Twenty-five percent shall be distributed to the grantee upon
the submission of the grantee's third quarterly report.
   (l) Eligible nonprofit community service organizations may use
grant funds received pursuant to this section to pay the costs of
assisting eligible students who have been served after the date of
closure until June 30, 2018, or until any later date as may be
determined necessary by the Attorney General.
   (m) The adoption of any regulation pursuant to this section shall
be deemed to be an emergency and necessary for the immediate
preservation of the public health and safety, or general welfare.
  SEC. 7.  (a) The sum of one million three hundred thousand dollars
($1,300,000) is hereby appropriated from the Student Tuition Recovery
Fund to the Attorney General for the purposes of providing grants
pursuant to Section 94926.5 of the Education Code, and to pay an
amount not to exceed one hundred fifty thousand dollars ($150,000)
for the reasonable administrative costs of the Attorney General's
office related to these grants.
  SEC. 8.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to provide immediate educational and economic relief to
the thousands of students harmed by the closure of Corinthian
Colleges, Inc., it is necessary for this act to take effect
immediately.