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Legislation to provide nearly a billion dollars in middle-class college and university scholarships passed the Assembly on Wednesday, but lawmakers have not yet taken up a companion bill to provide funding.

The funding measure, Assembly Bill 1500, is fiercely opposed by most Republicans, branded a tax hike by business opponents, and faces far tougher sledding getting the required two-thirds super-majority vote in the Legislature.

Middle-class scholarships will not be provided unless both bills pass the Legislature and are signed into law.

Assembly Speaker John A. Pérez touted his scholarship measure, Assembly Bill 1501, as a vital way to provide much-needed relief to middle-class families slapped by skyrocketing college and university fees the past five years. The final vote was 55-17.

His proposal represents an investment in middle-class families, many of which are forced to choose these days between borrowing large sums or foregoing a college education, he said.

AB 1501 would save middle-class students at state universities about $3,700 per year, and it would save those at University of California campuses about $7,000 per year. Annual tuition for the two university systems is about $6,000 and $12,200, respectively.

Pérez's proposal also would provide about $150 million for community colleges to reduce the impact of enrollment fees or to help cover the cost of books or other educational expenses.

AB 1501 targets families earning less than $150,000 per year, with reduced aid for families earning up to $160,000 per year.

Democrats supported Pérez's scholarship proposal, but only four Republicans did -- Kristin Olsen of Modesto, Cameron Smyth of Santa Clarita, Katcho Achadjian of San Luis Obispo and Jeff Gorell of Camarillo.

Republican opponents complained that AB 1501 did nothing to restrict tuition increases in years to come.

Assemblyman Tim Donnelly, R-Twin Peaks, said the state needs to get college and university spending under control -- not simply throw money at higher education through middle-class scholarships.

"This is absolutely insane," Donnelly said of AB 1501.

"If we don't get the costs under control in our university system, this ship will sink," he added.

Assemblyman Mike Morrell, R-Rancho Cucamonga, called the billion-dollar scholarship plan "a difficult bill, especially at a time that California is strapped for cash."

But Olsen bucked many of her GOP colleagues by defending AB 1501 during floor debate.

"Higher education needs to be a priority in this state," she said. "If we really care about our economy, then this is where we need to invest."

Pérez's companion bill, Assembly Bill 1500, would alter the state's formula for taxing out-of-state corporations that do business in California. The change, requiring use of a formula known as "single sales factor," is touted by supporters as closing a tax loophole and by opponents as a billion-dollar tax increase.

Pérez has not yet announced when he will seek an Assembly vote on the funding measure.

Though Friday marks the deadline for bills to clear their house of origin, AB 1500 is an exception because it is an urgency measure requiring a two-thirds vote for passage.

* Updated at 3:15 p.m. to add Katcho Achadjian to the list of Republican Assembly members who voted for the bill.


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