California Assembly Bill AB573 Amended / Bill

 BILL NUMBER: AB 573AMENDED BILL TEXT 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, Chvez, Chiu, Chu, Cooley, Dababneh, Eggman, Frazier, Gipson,  Hadley,  Kim, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Santiago,  and Thurmond   Thurmond,   and Ting  )  (   Coauthors:   Senators   Gaines   and Galgiani   ) FEBRUARY 24, 2015 An act to amend Sections 76300, 94923, and 94925 of, and to add Sections 69433.61 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, as amended, Medina. Higher education: campus closures: Corinthian Colleges. (1) Existing law establishes the California Community Colleges under the administration of the Board of Governors of the California Community Colleges, and establishes community college districts throughout the state that operate community colleges and provide instruction to students. Existing law requires community college districts to charge each student a fee of $46 per unit per semester. Existing law requires the waiver of this fee for students meeting prescribed requirements. This bill would, until July 1, 2018, require the board of governors to waive the fee for students who meet prescribed requirements, were enrolled at a California campus of a Corinthian Colleges, Inc., institution, and were either unable to complete an educational program offered by the campus due to the campus's closure on April 27, 2015, or withdrew from an educational program offered by a  Corinthian Colleges  campus within 120  days, or a greater period determined by the Bureau for Private Postsecondary Education, of the campus's closure on April 27, 2015.   days of that date.  To the extent this provision would impose additional duties on community college districts, it would constitute a state-mandated local program. (2) The California Private Postsecondary Education Act of  2009,   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 requires an institution subject to its provisions to follow certain requirements prior to closing. This bill would require the bureau to establish a standing task force to respond to the closure of institutions that do not comply with these requirements prior to closing. The bill would require the task force to assist the students who were enrolled at, or in an online program offered by, an institution that closes in, among other things, obtaining refunds, loan discharges, and tuition recovery. The bill would, upon the unlawful closure of an institution, require the bureau to provide timely grant funds to local legal aid organizations to assist students of that institution with loan discharge  and other student loan-   related  requests and tuition recovery related claims, as specified. (3) This bill would appropriate the sum of $1,300,000 from the Private Postsecondary Education Administration Fund to the Bureau of Private Postsecondary Education for the purposes of providing financial grants to legal aid organizations, as described above, for students affected by the closure of  Corinthians   Corinthian  Colleges, Inc., as specified, thereby making an appropriation. (4) 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 deem a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution, or a California student who was enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, to be eligible for recovery from the fund under specified circumstances. By expanding the purpose for which moneys in the Student Tuition Recovery Fund may be used, this bill would make an appropriation. The bill would raise the cap for the fund to $50,000,000. (5) 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 a Corinthian Colleges, Inc., institution, and who was unable to complete an educational program offered by the campus due to its closure. (6) This bill would appropriate $100,000 from the General Fund to the Chancellor of the California Community Colleges for allocation to a community college district for the purpose of conducting a statewide media campaign to inform students affected by the closure of Corinthian Colleges, Inc., of the education opportunities available at community colleges, thereby making an appropriation. Funds appropriated by this bill to a community college district would be applied toward the minimum funding requirements for school districts and community college districts imposed by Section 8 of Article XVI of the California Constitution. (7) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. (8) This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. (a) It is the intent of the Legislature that the California Community Colleges shall utilize available resources to provide matriculation services, including, but not limited to, assessments, counseling, and academic  planning to a student   planning, to students  who  was   were  enrolled at a California campus of a Corinthian Colleges, Inc., institution, including Heald College,  or was a   and  California  student   students  enrolled in one or more online programs offered by an out-of-state campus of a Corinthian Colleges, Inc., institution  and was   who were  harmed by the closure of Corinthian Colleges, Inc., that took place on April 27, 2015. (b) (1) The sum of one hundred thousand dollars ($100,000) is hereby appropriated from the General Fund to the Chancellor of the California Community Colleges for allocation to a community college district to conduct a statewide media campaign to inform students affected by the closure of Corinthian Colleges, Inc., of education opportunities available at community colleges. (2) For purposes of making the computations required by Section 8 of Article XVI of the California Constitution, the funds appropriated pursuant to this section shall be deemed to be "General Fund revenues appropriated for community college districts," as defined in subdivision (d) of Section 41202 of the Education Code, for the 2014-15 fiscal year, and included within the "total allocations to school districts and community college districts from General Fund proceeds of taxes appropriated pursuant to Article XIII B," as defined in subdivision (e) of Section 41202 of the Education Code, for the 2014-15 fiscal year. SEC. 2. It is the intent of the Legislature that unencumbered restitution funds awarded to the  students of the state, who received funds pursuant to Section 5 of this act,   state  from a lawsuit involving Corinthian Colleges,  Inc.   Inc.,  and its affiliate institutions, including Heald College, shall be used to repay any funds provided to those students pursuant to  Section 5 of  this act. SEC. 3. 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 a Corinthian Colleges, Inc., institution, including Heald College, and was unable to complete an educational program offered by the campus due to the campus's closure on April 27, 2015, shall not have the award years used at a Corinthian Colleges, Inc., 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 Corinthian Colleges Inc., on April 27, 2015, or had withdrawn from enrollment within 120 days of that date. The Bureau for Private Postsecondary Education shall provide the commission with confirmation of 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. 4. Section 76300 of the Education Code is amended to read: 76300. (a) The governing board of each community college district shall charge each student a fee pursuant to this section. (b) (1) The fee prescribed by this section shall be forty-six dollars ($46) per unit per semester, effective with the summer term of the 2012 calendar year. (2) The board of governors shall proportionately adjust the amount of the fee for term lengths based upon a quarter system, and also shall proportionately adjust the amount of the fee for summer sessions, intersessions, and other short-term courses. In making these adjustments, the board of governors may round the per unit fee and the per term or per session fee to the nearest dollar. (c) For the purposes of computing apportionments to community college districts pursuant to Section 84750.5, the board of governors shall subtract, from the total revenue owed to each district, 98 percent of the revenues received by districts from charging a fee pursuant to this section. (d) The board of governors shall reduce apportionments by up to 10 percent to any district that does not collect the fees prescribed by this section. (e) The fee requirement does not apply to any of the following: (1) Students enrolled in the noncredit courses designated by Section 84757. (2) California State University or University of California students enrolled in remedial classes provided by a community college district on a campus of the University of California or a campus of the California State University, for whom the district claims an attendance apportionment pursuant to an agreement between the district and the California State University or the University of California. (3) Students enrolled in credit contract education courses pursuant to Section 78021, if the entire cost of the course, including administrative costs, is paid by the public or private agency, corporation, or association with which the district is contracting and if these students are not included in the calculation of the full-time equivalent students (FTES) of that district. (f) The governing board of a community college district may exempt special part-time students admitted pursuant to Section 76001 from the fee requirement. (g) (1) The fee requirements of this section shall be waived for any student who meets all of the following requirements: (A) Meets minimum academic and progress standards adopted by the board of governors, which fulfill the requirements outlined in this paragraph and paragraphs (2) to (5), inclusive. Any minimum academic and progress standards adopted pursuant to this section shall be uniform across all community college districts and campuses. These standards shall not include a maximum unit cap, and community college districts and colleges shall not impose requirements for fee waiver eligibility other than the minimum academic and progress standards adopted by the board of governors and the requirements of subparagraph (B). (B) Meets at least one of the following criteria: (i) At the time of enrollment, is a recipient of benefits under the Temporary Assistance for Needy Families program, the Supplemental Security Income/State Supplementary Payment Program, or a general assistance program. (ii) Demonstrates eligibility according to income standards established by regulations of the board of governors. (iii) Demonstrates financial need in accordance with the methodology set forth in federal law or regulation for determining the expected family contribution of students seeking financial aid. (iv) Was enrolled at a California campus of a Corinthian Colleges,  Inc.   Inc.,  institution and was unable to complete an education program offered by the campus due to the campus's closure on April 27, 2015. This clause shall become inoperative on July 1, 2018. (v) Was enrolled at a California campus of a Corinthian Colleges,  Inc.   Inc.,  institution and withdrew from an education program offered by the campus within 120 days, or a greater period determined by the Bureau for Private Postsecondary Education pursuant to Section 94923, of the campus's closure on April 27, 2015. This clause shall become inoperative on July 1, 2018. (2) (A) The board of governors, in consultation with students, faculty, and other key stakeholders, shall consider all of the following in the development and adoption of minimum academic and progress standards pursuant to subparagraph (A) of paragraph (1): (i) Minimum uniform academic and progress standards that do not unfairly disadvantage financially needy students in pursuing their education. (ii) Criteria for reviewing extenuating circumstances and granting appeals that, at a minimum, take into account and do not penalize a student for circumstances outside his or her control, such as reductions in student support services or changes to the economic situation of the student. (iii) A process for reestablishing fee waiver eligibility that provides a student with a reasonable opportunity to continue or resume his or her enrollment at a community college. (B) To ensure that students are not unfairly impacted by the requirements of subparagraph (A) of paragraph (1), the board of governors shall establish a reasonable implementation period that commences no sooner than one year from adoption of the minimum academic and progress standards, or any subsequent changes to these standards, pursuant to subparagraph (A) of paragraph (1) and that is phased in to provide students adequate notification of this requirement and information about available support resources. (3) It is the intent of the Legislature that minimum academic and progress standards adopted pursuant to subparagraph (A) of paragraph (1) be implemented only as campuses develop and implement the student support services and interventions necessary to ensure no disproportionate impact to students based on ethnicity, gender, disability, or socioeconomic status. The board of governors shall consider the ability of community college districts to meet the requirements of this paragraph before adopting minimum academic and progress standards, or any subsequent changes to these standards, pursuant to subparagraph (A) of paragraph (1). (4) It is the intent of the Legislature to ensure that a student shall not lose fee waiver eligibility without a community college campus first demonstrating a reasonable effort to provide a student with adequate notification and assistance in maintaining his or her fee waiver eligibility. The board of governors shall adopt regulations to implement this paragraph that ensure all of the following: (A) Students are provided information about the available student support services to assist them in maintaining fee waiver eligibility. (B) Community college district policies and course catalogs reflect the minimum academic and progress standards adopted pursuant to subparagraph (A) of paragraph (1) and that appropriate notice is provided to students before the policies are put into effect. (C) A student does not lose fee waiver eligibility unless he or she has not met minimum academic and progress standards adopted pursuant to subparagraph (A) of paragraph (1) for a period of no less than two consecutive academic terms. (5) The board of governors shall provide notification of a proposed action to adopt regulations pursuant to this subdivision to the appropriate policy and fiscal committees of the Legislature in accordance with the requirements of paragraph (1) of subdivision (a) of Section 70901.5. This notification shall include, but not be limited to, all of the following: (A) The proposed minimum academic and progress standards and information detailing how the requirements of paragraphs (1) to (4), inclusive, have been or will be satisfied. (B) How many students may lose fee waiver eligibility by ethnicity, gender, disability, and, to the extent relevant data is available, by socioeconomic status. (C) The criteria for reviewing extenuating circumstances, granting appeals, and reestablishing fee waiver eligibility pursuant to paragraph (2). (h) The fee requirements of this section shall be waived for any student who, at the time of enrollment, is a dependent or surviving spouse who has not remarried, of any member of the California National Guard who, in the line of duty and while in the active service of the state, was killed, died of a disability resulting from an event that occurred while in the active service of the state, or is permanently disabled as a result of an event that occurred while in the active service of the state. "Active service of the state," for the purposes of this subdivision, refers to a member of the California National Guard activated pursuant to Section 146 of the Military and Veterans Code. (i) The fee requirements of this section shall be waived for any student who is the surviving spouse or the child, natural or adopted, of a deceased person who met all of the requirements of Section 68120. (j) The fee requirements of this section shall be waived for any student in an undergraduate program, including a student who has previously graduated from another undergraduate or graduate program, who is the dependent of any individual killed in the September 11, 2001, terrorist attacks on the World Trade Center and the Pentagon or the crash of United Airlines Flight 93 in southwestern Pennsylvania, if that dependent meets the financial need requirements set forth in Section 69432.7 for the Cal Grant A Program and either of the following applies: (1) The dependent was a resident of California on September 11, 2001. (2) The individual killed in the attacks was a resident of California on September 11, 2001. (k) A determination of whether a person is a resident of California on September 11, 2001, for purposes of subdivision (j) shall be based on the criteria set forth in Chapter 1 (commencing with Section 68000) of Part 41 of Division 5 for determining nonresident and resident tuition. (l) (1) "Dependent," for purposes of subdivision (j), is a person who, because of his or her relationship to an individual killed as a result of injuries sustained during the terrorist attacks of September 11, 2001, qualifies for compensation under the federal September 11th Victim Compensation Fund of 2001 (Title IV (commencing with Section 401) of Public Law 107-42). (2) A dependent who is the surviving spouse of an individual killed in the terrorist attacks of September 11, 2001, is entitled to the waivers provided in this section until January 1, 2013. (3) A dependent who is the surviving child, natural or adopted, of an individual killed in the terrorist attacks of September 11, 2001, is entitled to the waivers under subdivision (j) until that person attains 30 years of age. (4) A dependent of an individual killed in the terrorist attacks of September 11, 2001, who is determined to be eligible by the California Victim Compensation and Government Claims Board, is also entitled to the waivers provided in this section until January 1, 2013. (m) (1) It is the intent of the Legislature that sufficient funds be provided to support the provision of a fee waiver for every student who demonstrates eligibility pursuant to subdivisions (g) to (j), inclusive. (2) From funds provided in the annual Budget Act, the board of governors shall allocate to community college districts, pursuant to this subdivision, an amount equal to 2 percent of the fees waived pursuant to subdivisions (g) to (j), inclusive. From funds provided in the annual Budget Act, the board of governors shall allocate to community college districts, pursuant to this subdivision, an amount equal to ninety-one cents ($0.91) per credit unit waived pursuant to subdivisions (g) to (j), inclusive. It is the intent of the Legislature that funds provided pursuant to this subdivision be used to support the determination of financial need and delivery of student financial aid services, on the basis of the number of students for whom fees are waived. It also is the intent of the Legislature that the funds provided pursuant to this subdivision directly offset mandated costs claimed by community college districts pursuant to Commission on State Mandates consolidated Test Claims 99-TC-13 (Enrollment Fee Collection) and 00-TC-15 (Enrollment Fee Waivers). Funds allocated to a community college district for determination of financial need and delivery of student financial aid services shall supplement, and shall not supplant, the level of funds allocated for the administration of student financial aid programs during the 1992-93 fiscal year. (n) The board of governors shall adopt regulations implementing this section. (o) This section shall become operative on May 1, 2012, only if subdivision (b) of Section 3.94 of the Budget Act of 2011 is operative. SEC. 5. Section 94923 of the Education Code is amended to read: 94923. (a) The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an educational program, as defined in Section 94837, at an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of his or her enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss. (b) The bureau shall adopt by regulation procedures governing the administration and maintenance of the Student Tuition Recovery Fund, including requirements relating to assessments on students and student claims against the Student Tuition Recovery Fund. The regulations shall provide for awards to students who suffer economic loss. The regulations shall ensure that the following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund: (1) Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau. (2) Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued, if the bureau determines there was a significant decline in the quality or value of that educational program during that time period. (3) Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure. (4) A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so. (5) A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs. (6) A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the student's economic loss. (7) Notwithstanding the requirement of subdivision (a) that the institution not be exempt from this article, a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of April 26, 2015, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section. (c) Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not his or her enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment. (d) The bureau shall establish regulations ensuring, as permissible under California law, that a student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund. (e) The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested. (f) The bureau shall, by regulation, define "economic loss." The regulation shall ensure that the definition of "economic loss" includes, but is not necessarily limited to, pecuniary loss, which is the sum of the student's tuition, all other institutional charges as defined in Section 94844, the cost of equipment and materials required for the educational program as defined in Section 94837, interest on any student loan used to pay for such charges, collection costs, penalties, and any license or examination fees the student paid to the institution but is unable to recover. Economic loss shall also include the amount the institution collected and failed to pay to third parties on behalf of the student for license fees or any other purpose. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920, room and board, supplies, transportation, application fees, or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees. Nothing in this subdivision shall prevent the bureau from further defining economic loss to include loss of educational opportunity. SEC. 6. Section 94925 of the Education Code is amended to read: 94925. (a) The amount in the Student Tuition Recovery Fund shall not exceed fifty million dollars ($50,000,000) at any time. (b) If the bureau has temporarily stopped collecting the Student Tuition Recovery Fund assessments because the fund has approached the fifty million dollar  ($50,000,000)  limit in subdivision (a), the bureau shall resume collecting Student Tuition Recovery Fund assessments when the fund falls below forty-five million dollars ($45,000,000). (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. (d) A student who is eligible for recovery from the Student Tuition Recovery Fund pursuant to paragraph (7) of subdivision (b) of Section 94923 shall be eligible for payments despite not having paid any Student Tuition Recovery Fund assessment. SEC. 7. Section 94926.5 is added to the Education Code, to read: 94926.5. (a) (1) The bureau shall establish and coordinate a standing closed school task force to respond to the closure of institutions that do not comply with the requirements, as applicable, of this article. The task force shall ensure that students who were enrolled at, or in an online program offered by, the institution receive accurate and timely information regarding the school closure process and the students' rights and responsibilities under federal and state law. The task force shall ensure that these students are provided assistance in all of the following: (A) Obtaining refunds, loan discharges, and tuition recovery for which the student is eligible. (B) Obtaining information regarding the option to transfer credits that the student earned while attending the institution, including information necessary to help the student make an informed decision about whether to seek a loan discharge or to transfer credits. (C) Providing other support deemed necessary by the task force in accordance with the bureau's consumer protection mission. (2) The members of the task force should include, but not necessarily be limited to, representatives on behalf of the Student Aid Commission, the Department of Justice, the Office of the Chancellor of the California Community Colleges, the Department of Veterans Affairs,  and  one or more legal aid  organizations.   organizations, and two financial experts, one representing community colleges and one representing a bureau-approved institution that meets the performance requirements of the Cal Grant program.  (b)  (1)    Upon the unlawful closure of an institution, the bureau shall provide timely grant funds to local legal aid  organizations, which may include local legal aid organizations designed specifically to assist veteran students,   organizations  to assist the students of that institution,  including veterans,  for no less than one year following the closure of the institution, with loan discharge  and other student loan-   related  requests and tuition recovery related claims.  The   Assistance shall 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.   (2)     The  amount of grant funds shall be calculated by multiplying the number of students affected by the institution's closure by one hundred dollars ($100).  Legal aid organizations that receive grants should be located in the areas of the state affected by the institutional closure. Legal aid organizations that receive grants may give priority to low income students if demand exceeds available grant funds. Legal aid organizations that receive grants shall report to the bureau after completing their obligations under the grant on the number of students served from the date of the institution's closure.   (3) The bureau shall establish an approval process to ensure each legal aid organization that receives a grant pursuant to this section meets both of the following requirements:   (A) The legal aid 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, including, if required, registration with the Attorney General's Registry of Charitable Trusts.   (B) The legal aid organization demonstrates expertise in assisting students with, and currently provides direct legal services to students for, student loan matters.   (4) A legal aid organization that receives funds pursuant to this section shall enter into a grant agreement with the bureau 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 bureau unless the parties enter into a new agreement authorizing the legal aid organization to expend the unused funds. The bureau may terminate the agreement for material breach. However, the bureau shall provide the grantee with written notice of the breach and a reasonable opportunity of less than 30 days to resolve the breach.   (5) A legal aid organization that receives a grant may give priority to low-income students if demand exceeds available grant funds. Otherwise, the legal aid organization may provide assistance regardless of student income level.   (6) A legal aid organization that receives a grant shall report to the bureau quarterly through the grant period on the number of students served from the date funds are distributed.   (7) Funds shall be distributed by the bureau to preapproved legal aid organizations as follows:   (A) Fifty percent shall be distributed within 30 days of the date of the institution's unlawful closure.   (B) Twenty-five percent shall be distributed upon the submission of the legal aid organization's second quarterly report.   (C) Twenty-five percent shall be distributed upon the submission of the legal aid organization's third quarterly report.  SEC. 8. (a) The sum of one million three hundred thousand dollars ($1,300,000) is hereby appropriated from the Private Postsecondary Education Administration Fund to the Bureau of Private Postsecondary Education for the purposes of providing financial grants pursuant to subdivision (b) of Section 94926.5 of the Education Code to legal aid organizations for students affected by the closure of  Corinthians   Corinthian  Colleges,  Inc.,   Inc.  Legal aid organizations may use grant funds received pursuant to subdivision (b) of Section 94926.5 of the Education Code for affected students served from the date of closure.  The   Notwithstanding paragraph (7) of subdivision (b) of Section 94926.5, the  Bureau of Private Postsecondary Education shall ensure that these grant funds are made available within 30 days of the enactment of this section. The adoption of any regulation pursuant to this subdivision shall be deemed to be an emergency and necessary for the immediate preservation of the public, health, and safety, or general welfare. (b) The amount appropriated in subdivision (a) may include revenues derived from the assessment of fines and penalties imposed, and expenditures of these funds is specifically authorized for purposes of Section 13332.18 of the Government Code. (c) The Private Postsecondary Education Administration Fund reserve limit of six months of operating expenses pursuant to subdivision (b) of Section 94930 of the Education Code shall be suspended until July 1, 2016. SEC. 9. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. SEC. 10. 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.