(a) There is hereby created an instrumentality of the State of California to be known as the Golden State Scholarshare College Savings Trust.

(b) The purposes, powers, and duties of the Scholarshare trust are vested in, and shall be exercised by, the board.

(c) The board, in the capacity of trustee, shall have the power and authority to do all of the following:

(1) Sue and be sued.

(2) Make and enter into contracts necessary for the administration of the Scholarshare trust.

(3) Adopt a corporate seal and change and amend it from time to time.

(4) Cause moneys in the program fund to be held and invested and reinvested.

(5) Enter into agreements with any institution of higher education or any federal or other state agency or other entity as required for the effectuation of its rights and duties.

(6) Accept any grants, gifts, appropriation, and other moneys from any unit of federal, state, or local government or any other person, firm, partnership, or corporation for deposit to the administrative fund or the program fund. Except as otherwise provided in Section 69982, the board may not accept any contribution by any nonpublic entity, person, firm, partnership, or corporation that is not designated for a specified beneficiary, unless the contribution is deposited in the CalSAVE account pursuant to subdivision (d).

(7) Enter into participation agreements with participants, as set forth in Section 69983.

(8) Make payments to institutions of higher education or other third parties pursuant to participation agreements on behalf of beneficiaries.

(9) Make refunds to participants upon the cancellation of participation agreements pursuant to the provisions, limitations, and restrictions set forth in this article.

(10) Appoint an executive director, who shall serve at the pleasure of the board, and determine the duties of the executive director and other staff as necessary and set their compensation. The board may authorize the executive director to enter into contracts on behalf of the board or conduct any business necessary for the efficient operation of the board.

(11) Make provisions for the payment of costs of administration and operation of the Scholarshare trust.

(12) Carry out the duties and obligations of the Scholarshare trust pursuant to this article and have any and all other powers as may be reasonably necessary for the effectuation of the purposes, objectives, and provisions of this article.

(d) (1) There is established within the Scholarshare trust the California Scholarshare Advancement Vehicle for Education (CalSAVE) program to fund scholarships for beneficiaries to be determined by the board that may include, but are not limited to, foster youth, youth in at-promise categories, individuals with demonstrated economic need, former and active members of the California National Guard, individuals seeking undergraduate or postbaccalaureate courses in disciplines in which the state faces shortages, including nursing and teaching, and other categories to be determined by the board.

(2) The CalSAVE account is created within the program fund and is continuously appropriated, without regard to fiscal years, to the board for the purposes of the CalSAVE program. The board shall create subaccounts within the CalSAVE account for each category of beneficiary determined pursuant to paragraph (1). The CalSAVE account shall be funded by contributions from federal or local governments, or any other person, firm, partnership, or corporation, and from the administrative fund established pursuant to Section 69984. A person contributing to the CalSAVE account may designate that the person’s contribution be deposited into any subaccount within the CalSAVE account, or may contribute without any designation. The board shall apportion any undesignated funds among the subaccounts, taking into consideration factors, including, but not limited to, the number of eligible applications received seeking funding from a particular subaccount.

(e) The board shall adopt regulations as it deems necessary to implement this article consistent with the federal Internal Revenue Code and regulations issued pursuant to that code to ensure that this program meets all criteria for federal tax-deferral or tax-exempt benefits, or both.

(Amended by Stats. 2019, Ch. 800, Sec. 15. (AB 413) Effective January 1, 2020.)