Bill > AB1463

This bill establishes the California Covenants Program, a prepaid college tuition program administered by the Treasurer, allowing individuals to purchase tuition certificates for a fixed percentage of undergraduate tuition and mandatory systemwide fees at the University of California, California State University, or participating independent institutions of higher education for a beneficiary. The program will be funded through these purchases and the sale of bonds, with money deposited into the California Covenants Program Fund, from which the Treasurer can allocate funds to educational institutions to cover beneficiary tuition and fees, provided the Director of Finance confirms sufficient funds exist. Importantly, for tax purposes, amounts invested in and disbursed from this program will be excluded from gross income, and any initial investment with accrued interest will be returned without tax penalty if the beneficiary does not attend a participating institution. This bill is declared an urgency statute to take effect immediately due to concerns about rising college costs.