Ah, the margin tax....client's just LOVE to pay their lawyers to tell them, "Well, we really don't know the answer to that because the legislation was so poorly drafted."
The UC does not care one bit how high schools calculate gpa or even which courses high schools use for ranking thier students (altho less than half of Calif HS rank). Instead, the UC performs its own gpa calculation per HS, based solely on UC-approved academic courses -- thus, PE, health, football, driver's ed and honors baton twirling are out.
BTW, to say “thousands” of students are admitted outside of the top-ten is little specious: 2,031 Texas HS grads in 2007. Admission to UT at Austin is all about class rank, and little else.
Specious - true but misleading, as in "Don't worry, thousands of kids get into UT that are not top ten!"
Only you won't tell them yet what the rules are....