SB135 - Higher education budget trailer bill.

Senate Bill No. 135 CHAPTER 79 An act to amend Sections 17201, 66014.6, 66292, 66292.1, 66292.2, 69432, 69436, 69439, 70022, 76140, 78261, 78261.5, 78263.1, 84321.65, 84750.4, 87861, and 88826.5 of, to amend, repeal, and add Sections 87766 and 88193 of, to add Sections 10875, 66023.9, 75013, 84750.8, and 89526 to, to add Article 17 (commencing with Section 69870 to Chapter 2 of Part 42 of Division 5 of Title 3 of, to add Article 9 (commencing with Section 78093) to Chapter 1 of Part 48 of Division 7 of Title 3 of, and to add Part 46.3 (commencing with Section 74500) to Division 7 of Title 3 of, the Education Code, to amend Sections 8014 and 8016 of the Health and Safety Code, to amend Section 1095 of the Unemployment Insurance Code, to amend the Budget Act of 2025 by amending Item 6870-101-0001 of Section 2.00 of that act, and to amend Sections 22 and 27 of Chapter 9 of the Statutes of 2025, relating to postsecondary education, and making an appropriation therefor, to take effect immediately, bill related to the budget. [ Approved by Governor July 13, 2026. Filed with Secretary of State July 13, 2026. ] LEGISLATIVE COUNSEL'S DIGEST SB 135, Committee on Budget and Fiscal Review. Higher education budget trailer bill. (1) Existing law establishes the California Cradle-to-Career Data System to be a source for actionable data and research on education, economic, and health outcomes for individuals, families, and communities, and to provide for expanded access to tools and services that support the navigation of the education-to-employment pipeline. Existing law defines “data providers” as the entities that submit the individual, educational, academic, training, employment, social service, health, and other information used to create the data system. This bill would require the data providers, and would request the University of California, to enter into memoranda of understanding for data sharing purposes for implementation of the data system. (2) Existing law establishes the Higher Education Student Housing Grant Program to provide one-time grants for the construction of student housing, or for the acquisition and renovation of commercial properties into student housing for the purpose of providing affordable, low-cost housing options for students enrolled in public postsecondary education in the state. Existing law requires, as a condition of receiving these funds, the Regents of the University of California, the Trustees of the California State University, and the Board of Governors of the California Community Colleges to, from the receipt of funds to completion of a project and following completion of a project for a 5-year period, report by July 1 annually to the Department of Finance and the relevant policy and budget committees of the Legislature with information on the status of the project or the public benefit provided by the project, as applicable. This bill would require this information to be provided by February 1 rather than July 1, together with an annual report provided for in existing law on student housing data, if applicable. (3) Existing law requires the office of the Chancellor of the California State University and the office of the Chancellor of the California Community Colleges, and requests the office of the President of the University of California, to require each of their respective campuses that provide campus-owned, campus-operated, or campus-affiliated student housing to collect and post on its external and internal internet websites, data on student housing, and to submit an annual report with that information to the Legislature, as specified. This bill would require the above-described annual report to be submitted together with certain information required to be provided pursuant to the Higher Education Student Housing Grant Program. (4) Existing law requires each California State University campus, and requests each University of California campus, to establish the position of the Basic Needs Coordinator to, among other responsibilities, assist students with basic needs services and resources, including childcare, and to establish a Basic Needs Center where basic needs services, resources, and staff are made available to students, as provided. This bill would state the intent of the Legislature for certain funds appropriated to the University of California and the California State University in the annual Budget Act specifically for rapid rehousing, basic needs, and student mental health to be used for specified purposes, as provided. The bill would require those funds that are to be provided to students to be distributed to the student by the campus financial aid office, as specified. (5) Existing law requires, among other requirements related to nondiscrimination, the Chancellor of the California Community Colleges, the Chancellor of the California State University, and the President of the University of California to each annually present during a public hearing of the Senate Budget Subcommittee on Education and the Assembly Budget Subcommittee on Education Finance on the state of their respective systems in ensuring that their programs and activities are free from discrimination based on specified characteristics, as provided. This bill would authorize a designee of the Chancellor of the California Community Colleges, the Chancellor of the California State University, and the President of the University of California to perform the above-described presentation on nondiscrimination. (6) Existing law, the Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program, establishes the Cal Grant A and B Entitlement awards, the California Community College Expanded Entitlement awards, the California Community College Transfer Entitlement awards, the Competitive Cal Grant A and B awards, the Cal Grant C awards, and the Cal Grant T awards under the administration of the Student Aid Commission, and establishes eligibility requirements for these awards for participating students attending qualifying institutions. Existing law requires a Cal Grant C award to be used only for occupational or technical training in a course of not less than 4 months. This bill, among other changes related to the Cal Grant C award, would instead require a Cal Grant C award to be used only for occupational or technical training in a program of not less than 8 weeks and provide Cal Grant C award amounts based on the length of the occupational or technical training program, as provided. (7) Existing law prohibits a student who will be 28 years of age or older by December 31 of an award year from receiving a California Community College Transfer Cal Grant Entitlement award. This bill instead would prohibit, for the 2026–27 award year through the 2030–31 award year, inclusive, a student who will be 30 years of age or older by December 31 of an award year from receiving a California Community College Transfer Cal Grant Entitlement award. (8) Beginning on July 1, 2026, for the financial aid award year of 2026–27 and each award year thereafter, existing federal law establishes the federal Workforce Pell Grant program to award grants to eligible students who are enrolled, or accepted for enrollment, in a short-term educational program that, among other things, provides an education aligned with the requirements of high-skill, high-wage, or in-demand industry sectors or occupations, as provided. This bill would require the commission, on behalf of the Governor, to determine whether a short-term program offered by postsecondary educational institution, as defined, meets specified requirements in order to receive federal Workforce Pell Grant program funds for students enrolled in the short-term program. The bill would require the Student Aid Commission to consult with the California Workforce Development Board and the Labor and Workforce Development Agency on the process for making those determinations and the short-term programs that the commission is proposing to approve, as specified. The bill would require a postsecondary educational institution seeking a determination that one or more of its short-term programs meets the requirements of the federal Workforce Pell Grant program to provide to the commission, among other things, a completed program application, and to provide to the Office of Cradle-to-Career Data specified data. The bill would require the Employment Development Department to provide a list of high-skill, high-wage, and in-demand industry sectors and occupations to the Labor and Workforce Development Agency, as specified. The bill would require the Labor and Workforce Development Agency, after presenting the list to the California Workforce Development Board, to provide the list to the commission for the commission’s consideration in determining whether to approve a short-term program. This bill would prohibit the commission from authorizing a participating institution to receive federal Workforce Pell Grant program funds for a short-term program unless the commission determines, among other things, that the short-term program meets the requirements of the above-described federal provisions. The bill would require the commission to determine a participating institution’s eligibility and provide written notice of its decision within 90 days of receiving a request for an eligibility determination and a completed participation agreement, as specified. The bill would require the commission to submit specified reports to the Department of Finance, the Assembly Committee on Budget, and the Senate Committee on Budget and Fiscal Review with, among other things, a list of all institutions seeking an eligibility determination and an evaluation of the federal Workforce Pell Grant program. (9) Existing law establishes the Middle Class Scholarship Program (MCSP) under the administration of the commission. Existing law, subject to an available and sufficient appropriation, makes an undergraduate student eligible for a scholarship award under the MCSP if the student is enrolled at the University of California or the California State University, or enrolled in upper division coursework in a community college baccalaureate program, and meets certain eligibility requirements. Existing law generally sets the MCSP award at an amount that equals the difference between the student’s cost of attendance and the sum of other scholarships, grants, or fee waivers, including those administered by federal, state, and institutions, awarded to the student in excess of $7,898 in expected student contribution, and, for dependent students with a household income exceeding $100,000, a percentage of the parents’ contribution, as specified. If a foster youth or former foster youth receives additional financial aid following the determination of the student’s MCSP award, this bill, for purposes of determining the student’s MCSP award amount, would not require the student’s MCSP award to be recalculated, except as provided. (10) This bill would require the office of the Chancellor of the California Community Colleges to establish the Common Cloud Data Platform to create a unified, modern data infrastructure to enhance statewide reporting, data sharing, and available analytical tools across participating community college districts and the chancellor’s office. The bill would require the Common Cloud Data Platform to be designed to enable certain functions, as specified. The bill would require funding appropriated for the development, implementation, and systemwide adoption of the Common Cloud Data Platform to support specific areas of work. (11) Existing law establishes the California Online Community College, commonly known as Calbright College, under the administration of the Board of Governors of the California Community Colleges, for the purpose of creating an organized system of accessible, flexible, and high-quality online content, courses, and programs focused on providing industry-valued credentials compatible with the vocational and educational needs of Californians who are not currently accessing higher education. This bill would require the office of the Chancellor of the California Community Colleges to develop and submit to the Department of Finance and the Joint Legislative Budget Committee, on or before October 1, 2028, recommendations for equating enrollment in competency-based education programs at all community college districts, including the California Online Community College, to full-time equivalent students for the purposes of generating funding. The bill would require the chancellor’s office to convene a workgroup of experts to support in developing these recommendations. The bill would require, commencing with the 2026–27 fiscal year, the California Online Community College to submit data to the chancellor’s office’s management information system on the same reporting schedule and using the comparable data elements applicable to noncredit programs offered by other community college districts, as provided, and would require the chancellor’s office to post this data on its internet website. The bill, as part of the Credit for Prior Learning Initiative described below, would require the chancellor’s office to make credit for prior learning recommendations for the California Online Community College’s programs and similar programs at other community colleges, as provided, and to submit these recommendations, on or before July 1, 2027, to the Department of Finance and Joint Legislative Budget Committee. (12) Existing law authorizes community college districts to admit nonresident students, and requires that nonresident students be charged a nonresident tuition fee unless an exemption applies. Existing law includes among these exemptions a nonresident, low-income student who: (A) is a resident of Mexico, (B) registers for lower division courses at Cuyamaca College, Grossmont College, Imperial Valley College, MiraCosta College, Palomar College, San Diego City College, San Diego Mesa College, San Diego Miramar College, or Southwestern College, and (C) has residence within 45 miles of the California-Mexico border, as provided. Existing law, in any academic year, prohibits more than 150 full-time equivalent students (FTES) at each of those community colleges from being exempted from payment of the nonresident tuition fee under that exemption. This bill would instead, in any academic year, prohibit more than 1,350 FTES in total, across all community colleges that choose to use the above-described exemption, from being exempted from payment of the nonresident tuition fee. The bill would require the governing boards of the community colleges that choose to use that exemption to develop a plan to jointly administer and allocate the total number of FTES across these community colleges. For an enrolled student granted that exemption for an academic year, the bill would require that the student retains the exemption for that academic year [Text truncated for display. Full text available on Congress.gov.]