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It's simple: Have you lived in California for 12 months or more? If you have, answer "yes". If you have not, then answer "no".
And then, enter what date you moved to California.
Like they said, in-state tuition is lower, and in-state students have priority for admissions over out-of-state students. The definition of in-state student is someone who has lived in California for at least the previous 12 months, hence why are they asking you that question.
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