BILL ANALYSIS SENATE COMMITTEE ON EDUCATION John Vasconcellos, Chair 2001-2002 Regular Session BILL NO: AB 540 AUTHOR: Firebaugh and Maldonado AMENDED: June 20, 2001 FISCAL COMM: Yes HEARING DATE: June 20, 2001 URGENCY: No CONSULTANT:Shervin Boloorian and Nancy Anton SUBJECT: Public postsecondary education: residency SUMMARY This bill qualifies long-term California residents, as specified, regardless of citizenship status, for financial aid benefits and lower "resident" fee payments at the California Community Colleges and the California State University. The bill would be applicable to the University of California only if the Regents so decide. The bill also extends, to those specified, eligibility for financial aid programs. NEED FOR THE BILL The author claims the bill is necessary to make higher education affordable and accessible to worthy students so that they can acquire a college education. BACKGROUND Current law precludes students who are not in the United States legally from establishing residency in California for the purposes of paying resident fees and tuition. The courts have found this provision of law to be constitutional, and as a result, non-resident tuition is charged to undocumented students in California public colleges and universities. Existing law, generally known as the Uniform Residency Law, establishes a variety of residency requirements for students attending the California Community Colleges or the AB 540 Page 2 California State University. The determination of such residency status is required in order to assess either resident or non-resident fees and tuition. The Regents of the University of California may, by resolution, make these provisions of law applicable to the University of California (and historically have done so). Existing law also authorizes the California State University and California Community Colleges to grant tuition waivers and fee reductions to non-resident students based on certain requirements (Sections 76140 and 89706 of the Education Code). Under federal and state law, undocumented students regardless of academic achievement or financial need, are not eligible for federal or state financial aid, campus-based aid, or subsidized student loans. In addition, current law does not preclude undocumented students from enrolling in a California public colleges or universities; they must, however, pay non-resident tuition. ANALYSIS This bill: 1) Exempts non-residents from paying resident tuition at the California State University (CSU) and California Community Colleges (CCC), provided that they: a) Attended high school in California for three or more years. b) Graduated from a California high school. 2) Authorizes the CSU trustees to waive or reduce the tuition rates for full- time foreign student undergraduates of exceptional scholastic ability and prior scholastic achievement; 3) Sets a 7% cap on the number of waivers the CSU may grant to non-resident students and residents of a foreign country. 4) Requests that the Regents of the University of California take the same action, consistent with the AB 540 Page 3 provisions of this bill, to exempt non-residents from paying non-resident tuition. 5) Makes all persons under the above requirement (1) eligible to apply for financial aid benefits. STAFF COMMENTS 1) Immigrant Taxpayers: Many long term California high school students find that they graduate without having legal residency status, and are precluded from attending California Colleges because of their non-resident student classification. These students and their families pay taxes and invest in the system; therefore, should they not, in return, receive benefits? 2) Non-resident Fees: In the current year, UC, undergraduate resident students pay $3,964 while nonresident students pay in excess of $10,000. At the CSU, undergraduate resident students pay $1,839 in mandatory systemwide fees, while nonresident students pay $7,380. Within CCC, resident students pay $11 per unit while non-residents pay $130 per unit. 3) Legal History: The educational rights of undocumented students is a longstanding issue that has been debated within legislative and judicial arenas for years. Current law was contested in a 1985 court case Leticia A. v. Board of Regents of the University of California . This challenge was filed by a group of undocumented students who were not recognized as California residents for purposes of determining tuition. At that time, the court ruled that charging nonresident tuition to undocumented students was unconstitutional because both UC and CSU used a different definition of "residency" for undocumented aliens than it used for United States (U.S.) citizens. The 1985 decision was later overridden by the 1990 Court of Appeal, Second District decision Regents of the University of California v. Los Angeles County Superior Court , also known as the Bradford decision. In Bradford, the court held that current law was constitutional and that the related Education Code sections were to be upheld. AB 540 Page 4 Both Lettuce A and Bradford dealt solely with the issue of defining "California residency" for purposes of assessing nonresident tuition. Prior legislation on this topic, AB 592 (Polanco/1991), would have statutorily altered the definition of "California residency" as it applies to college tuition. 4) Prior Law : Similar statute has existed before. From 1974 until it was sunset in 1980, the Education Code provided an exception to the Uniform Residency law that permitted long-term California residents to qualify as residents for the purposes of tuition. This law made no distinction with regard to a student's legal status in the United States. 5) Similar Bill Last Session . In 2000, AB 1197 (Firebaugh) was vetoed by the Governor. In his veto message the Governor wrote, in pertinent part: Pursuant to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), undocumented aliens are ineligible to receive postsecondary education benefits based on state residence unless a citizen or national of the United States would be eligible for the same benefits without regard to their residence (Title VIII, Section 1623). In order for undocumented students to be exempt from paying non-resident tuition charges as called for in this legislation, IIRIRA would require that all out-of-state legal residents be eligible for this same benefit. Based on Fall 1998 enrollment figures at the University of California and the California State University alone, this legislation could result in a revenue loss of over $63.7 million to the State. In response to the veto message, the Chief Legislative Counsel issued an opinion that AB 1197 did not violate federal law since it did not tamper with a student's residency status under federal law and because it AB 540 Page 5 excluded from out-of-state tuition exemptions foreign residents as specified in the United States Code (Title 8, Section 1101, Paragraph 15, (a).) 6) Pending Federal Legislation : HR 1918 (Canon/ R, Utah) recently introduced in Congress, would allow states to set their own residency rules without being required to subsidize out-of-state residents. States would have the authority to determine which immigrants, if any, would be exempt from federal immigration laws. 7) Other States: The Governor of Texas recently signed legislation similar to AB 540 allowing long-term immigrants to pay in-state tuition at Texas public colleges and universities if they: a) Graduated from a Texas high school. b) Attended a Texas high school for three years. 8) Ambiguity: Although this bill extends privileges to long-term high school attendees and high school graduates it is not clear why the author has selected an arbitrary 3 year requirement as opposed to four or five. As well, it is unclear if the student is able to substitute California high school graduation with an equivalent document or diploma. 9) Enrollment Projections: A California Research Bureau report indicates that 53% of California's population growth between 1990 and 1998 is due to international migration. According to the California Post-secondary Education Commission, California public higher-education system already has some current excess capacity and faces a powerful demand surge in the coming decade known as "Tidal Wave II", whereby between 1998 and 2010 the Commission anticipates an increase of 714,753 students (35.8%) at all public higher-education levels. 10) Confusion: The current language of the bill could be interpreted to extend fee waiver privileges to any person including those precluded from establishing California residency by reason of federal law. If the intention of the author is to only allow exemptions to AB 540 Page 6 California high school attendees and graduates then staff recommends clarifying language to not extend out-of-state tuition fee exemptions to all undocumented persons. 11) Technical Amendment: The author's intent is to make the students specified in the bill eligible for existing financial aid programs, including the new guaranteed Cal Grant program; however, the related citation as drafted does not take this program into account. Staff recommends a technical amendment to qualify the specified students for Cal Grant guaranteed program as well as other California financial aid programs. SUPPORT The American Civil Liberties Union Mexican American Legal Defense Fund Community College League of California Homeless Healthcare Los Angeles California Federation of Teachers California Teachers Association University of Southern California Huntington Park High School Los Angeles Pierce College National Council of La Raza Services Immigrant Rights and Education Network Thai Community Development Center California Labor Federation, AFL-CIO Los Angeles Mission College Coalition of Orange County Community Clinics Watts/Century Latino Organization California National Organization for Women South Central Family Health Center Garibay Tax Services University of California, Los Angeles Citizenship Project Asian Pacific Islander Caucus Center for Third World Organizing Plaza Community Center Rancho Santiago Community College District Individuals Letters AB 540 Page 7 OPPOSITION Individual Letter