(a) (1) Each child born on or after a date determined by the board pursuant to paragraph (2) who is a California resident at the time of birth is eligible for the program.

(2) The date designated by the board for which eligibility commences shall be no later than July 1, 2022.

(b) No later than 90 days after a birth certificate is registered for a child described in subdivision (a), the State Department of Public Health shall provide the board with identifiable birth data for the child in a file format as defined by the board. The birth data shall include the child’s name and birth date and the name and contact information of each parent of the child, including the parent’s street address and, if provided to the department, the parent’s mobile telephone number and email address. In addition, upon request by the board, the department shall include, in the birth data it provides to the board, information collected pursuant to subparagraph (C) of paragraph (2) of subdivision (a) of § 102426 of the Health and Safety Code. The department may provide additional identifiable birth data to the board, upon request, and upon a determination by the State Registrar, in consultation with the board, that the data is necessary for administration of the program. To the extent permitted by state and federal law, the department shall provide amended birth record information of a child to the board in order to assist the board in verifying a legal name change of the child, and any other information necessary, for the administration of the program. The department is not required to provide the board amended birth record information of a child that would reveal information that was sealed by statute or court order. The birth data is confidential and shall not be disclosed except as necessary for the program. No more than 90 days after receiving the birth data from the department, the board shall notify at least one parent of each eligible child about the program. The notification shall include information on all of the following:

(1) How the parent may opt out of the program.

(2) The KIDS Account opened for the child pursuant to subdivision (f).

(3) How the parent may establish a separate account pursuant to Article 19 (commencing with Section 69980) and additional financial incentives provided pursuant to that article.

(c) The board shall make a child’s designated balance in a KIDS Account viewable by the child’s parent or legal guardian through a secured internet link.

(d) The board shall establish rules and regulations for a program recipient child, and the child’s parents or legal guardians, to be notified of the moneys deposited and accrued in the child’s KIDS Account, and rules and regulations regarding the establishment and operation of program components, including, but not limited to, the claims process, necessary documentation, deadlines for the claims, an appeals procedure, and any forfeiture procedures. A KIDS Account recipient child and each of the child’s parents or legal guardians shall be informed of the establishment of the child’s KIDS Account, provided information on how the parent or legal guardian may establish a separate account pursuant to Article 19 (commencing with Section 69980), and provided information on opportunities for financial incentives provided pursuant to that article.

(e) The board shall translate program notifications and information provided pursuant to subdivisions (b) to (d), inclusive, into languages pursuant to § 7295.2 of the Government Code.

(f) Upon appropriation by the Legislature, the board shall establish one or more accounts and shall make a separately accounted-for seed deposit from the fund into a KIDS Account established within an account in an amount determined by the board. Each seed deposit shall be designated for a particular child for whom the board receives birth data pursuant to subdivision (b), if no parent or legal guardian has opted that child out of the program. Moneys in a KIDS Account designated for a child, including any investment earnings attributed to the amount of the child’s seed deposit since the date of the deposit as calculated by the board, shall be used for the purpose of providing awards for qualified higher education expenses associated with the attendance of the child at an eligible institution of higher education. Before the 2023-24 fiscal year, each seed deposit shall be at least twenty-five dollars ($25). Commencing with the 2023-24 fiscal year, each seed deposit shall be at least one hundred dollars ($100). The board may provide additional financial incentives designated for a child into a KIDS Account if the parent or legal guardian of the child engages with the KIDS Account by verifying receipt of information provided pursuant to paragraph (2) of subdivision (b), establishing a separate account pursuant to Article 19 (commencing with Section 69980), or engaging with the KIDS Account by other means approved by the board.

(g) Upon the student self-certifying that they are enrolled at an institution of higher education and that they have resided in the state for at least one year immediately preceding the payment of qualified higher education expenses on the student’s behalf, the board shall make a payment to that institution in an amount determined by the student or their parent or legal guardian, which may include the total or a partial amount of the seed deposit, enhanced deposit, if applicable, and any additional financial incentives designated for the child pursuant to subdivision (f), plus any investment earnings attributed to that amount since the date of that deposit as calculated by the board, for qualified higher education expenses associated with the child’s attendance at that institution. If the child has no account balance with the institution, the institution may distribute funds received for the child pursuant to this subdivision directly to the child for the purpose of paying the child’s qualified higher education expenses.

(h) Subject to available money in the fund, the board may provide additional incentives from the fund for children participating in the program, including, but not limited to, incentives targeting low-income households.

(i) (1) Subject to available funding, a parent or legal guardian, residing in California, of a child who meets the criteria in paragraph (2) may apply to the board to enroll the child into the program. Subject to available funding, the enrollee shall be eligible for any incentives described in subdivision (h), as applicable, but is not eligible for a seed deposit.

(2) The child is a current California resident under six years of age who was both of the following:

(A) Born on or after the date designated by the board for which eligibility commences.

(B) Not a California resident at the time of birth.

(j) (1) A KIDS Account established pursuant to this article, and its investment earnings, shall remain assets of, and owned by, the state until used for the payment of qualified higher education expenses at an institution of higher education, and funds shall remain invested until they are used for the purposes authorized by this article or until the recipient achieves 26 years of age, whichever occurs first. If a beneficiary does not use any portion, or all, of the moneys intended for the beneficiary in a KIDS Account for a qualified higher education expense for any reason, including the death or disability of the beneficiary, before the beneficiary turns 26 years of age, all contributions made for the beneficiary into the KIDS Account and any earnings from those moneys shall be forfeited and deposited into the fund for the program.

(2) Notwithstanding paragraph (1), subject to available funding, the board may establish an appeal process to allow a beneficiary to use the moneys designated for the beneficiary in a KIDS Account after the beneficiary turns 26 years of age.

(3) Moneys, less applicable penalties, collected pursuant to Section 529 of the Internal Revenue Code not used within the time period described in paragraph (1) shall revert to the fund after the payment of any amount determined to be due to the federal government as a result of the reversion.

(4) All contributions made into a KIDS Account for a child who has opted out of the program pursuant to subdivision (b), including any investment earnings attributed to the amount of the child’s seed deposit since the date of the deposit as calculated by the board, shall be forfeited and deposited into the fund for the program in a timely manner.

(k) The board shall encourage each parent and legal guardian of a beneficiary, including each parent and legal guardian of a child who applies to enroll the child into the program as a beneficiary pursuant to subdivision (i), to establish a separate account pursuant to Article 19 (commencing with Section 69980). The board shall provide assistance on how to establish the separate account.

(l) The board may use up to 5 percent of state appropriations provided for purposes of the program for administrative costs. Unless otherwise specified in the annual Budget Act, this subdivision shall not apply to any one-time or ongoing local assistance funds first appropriated in support of the program beginning in the 2021-22 fiscal year.

(m) It is the intent of the Legislature that both of the following occur:

(1) The State Department of Public Health and the board share the information described in subdivision (b) in a manner that promotes data privacy and security.

(2) The State Department of Public Health and the board enter into memoranda of understanding or participation agreements for data sharing purposes, as necessary, for the implementation and operation of this article.

(Amended by Stats. 2023, Ch. 50, Sec. 7. (SB 117) Effective July 10, 2023.)