BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2297
                                                                  Page  1

          Date of Hearing:   April 6, 2010

                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION
                                 Marty Block, Chair
                AB 2297 (Brownley) - As Introduced:  February 18, 2010
           
          SUBJECT  :   Community colleges: nonresident fees.

           SUMMARY  :  Would allow the governing board of a California  
          Community College (CCC) to use an alternative method for  
          calculating nonresident fee amounts.  Specifically,  this bill  :  

          1)Allows a CCC governing board to adopt a nonresident fee that  
            is no greater than the average of the nonresident fees of  
            public community colleges of 12 states that are comparable to  
            California in cost of living.  Provides that the determination  
            of comparable states must be based on a composite  
            cost-of-living index as determined by the United States (US)  
            Department of Labor (DOL) or cooperating government agency.

          2)Allows a CCC governing board that calculates its nonresident  
            fees based on the statewide average expense of education to  
            set the nonresident fee at the greater of the current or any  
            of the four immediately preceding fiscal year amounts, if the  
            amount calculated for the succeeding fiscal year is less than  
            the amount calculated for the current fiscal year. 
           
          EXISTING LAW:   Requires CCC district governing boards to adopt  
          nonresident student fees, with exceptions.  Establishes a number  
          of requirements for CCC districts nonresident student fees  
          amounts, including that nonresident fee increases be gradual,  
          moderate, and predictable and that one of the following  
          calculation methods be used in establishing full-time  
          nonresident fee amounts:

          1)The amount expended by the CCC district for the expense of  
            education in the preceding fiscal year increased by the US  
            Consumer Price Index (CPI), divided by the number of full-time  
            equivalent students (FTES) attending the CCC district in the  
            previous year;

          2)The statewide expense of education for all CCC districts,  
            increased by the US CPI and divided by the statewide FTES;

          3)An amount that does not exceed the fee established by the  








                                                                  AB 2297
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            governing board of any contiguous CCC district; or,

          4)An amount that does not exceed the amount expended by the CCC  
            district for the expense of education, but not less than the  
            statewide average set forth under paragraph 2) above.

           FISCAL EFFECT  :  Unknown 

           COMMENTS  :   Background  :  The 1960 Master Plan for Higher  
          Education established California's commitment to an accessible  
          public higher education system.  To ensure accessibility to  
          California residents, taxpayers significantly subsidize the cost  
          of higher education.  California resident students pay fees to  
          help support the cost but not tuition.  Nonresident students at  
          the University of California (UC), California State University  
          (CSU) and CCC pay both fees and tuition.  All public colleges  
          and universities in the country have additional charges for  
          out-of-state students as a way to ensure residents do not assume  
          the financial burden of educating students whose presence in the  
          state is not intended to be permanent and who did not pay taxes  
          to support the public higher education systems.  A determination  
          as to a California student's residency classification is done at  
          the campus level; however, the general definition of California  
          residency requires at least one year of physical presence in the  
          state, coupled with the capability and intent to make California  
          one's permanent home.

           Purpose of this bill  :  The author believes this bill would give  
          CCCs greater authority to charge nonresidents a fee that could  
          be used to increase the quality of education, consistent with  
          the authority granted to UC, CSU and K-12 education.  The author  
          notes that state law sets a floor (marginal cost of instruction)  
          for nonresident student tuition and fees at UC and CSU but  
          provides minimal guidance on a tuition ceiling.  Additionally,  
          state law allows K-12 school districts to charge for the expense  
          of education, the use of buildings and equipment, repayment of  
          local bonds and interest, state building loans, capital outlay,  
          and transportation.  Yet, CCC governing boards must follow one  
          of four specific formulas that ensure that the fee is  
          approximately the pro-rated expense of education.    
           
          CCC nonresident student fees compared to other states  :  In  
          2009-10, the statewide average CCC nonresident fee was $190 per  
          semester unit, with a range from $166 per semester unit at Santa  
          Clarita CCC district, to $226 per semester unit at Redwoods CCC  








                                                                  AB 2297
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          district.  Additionally, some CCC districts have a capital  
          outlay fee, ranging from $5 per unit to $50 per unit.  For  
          2009-10, there are an estimated total of 45,260 nonresident FTES  
          enrolled in credit courses in the CCC system.  The table below  
          is based on data published by the Missouri Economic Research &  
          Information Center and the Washington Higher Education  
          Coordinating Board. The table lists the 2008-09 community  
          college tuition and required fees in the 12 states that are most  
          comparable to California in cost-of-living:

           ----------------------------------------------------------------- 
          |                       |                 |                       |
          |         State         | Cost of Living  |  Annual Nonresident   |
          |                       |      Rank       |        Charges        |
          |-----------------------+-----------------+-----------------------|
          |Oregon                 |       38        |      $7,258           |
          |-----------------------+-----------------+-----------------------|
          |Maine                  |       39        |      $5,613           |
          |-----------------------+-----------------+-----------------------|
          |New Hampshire          |       40        |      $13,153          |
          |-----------------------+-----------------+-----------------------|
          |Massachusetts          |       41        |      $10,298          |
          |-----------------------+-----------------+-----------------------|
          |Vermont                |       42        |      $9,168           |
          |-----------------------+-----------------+-----------------------|
          |Rhode Island           |       43        |      $8,216           |
          |-----------------------+-----------------+-----------------------|
          |Connecticut            |       44        |      $8,912           |
          |-----------------------+-----------------+-----------------------|
          |New York               |       45        |      $7,201           |
          |-----------------------+-----------------+-----------------------|
          |Maryland               |       46        |      $7,890           |
          |-----------------------+-----------------+-----------------------|
          |New Jersey             |       47        |      $6,705           |
          |-----------------------+-----------------+-----------------------|
          |Alaska                 |       48        |      $13,709          |
          |-----------------------+-----------------+-----------------------|
          |Hawaii                 |       50        |$8,399                 |
           ----------------------------------------------------------------- 

           UC and CSU nonresident fees/tuition  :  UC and CSU are required to  
          establish methodologies for annually determining the nonresident  
          tuition rate that take into consideration the total nonresident  
          charges imposed by each of their public comparison institutions,  
          as determined by the California Postsecondary Education  








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          Commission, and the full average cost of instruction of their  
          segment.  Under no circumstances is the institution's level of  
          nonresident tuition and fees to fall below the marginal cost of  
          instruction of that segment.  Annual undergraduate nonresident  
          student charges in 2009-10, average about $31,389 at UC and  
          $15,987 at CSU.  According to 2008-09 data collected by the  
          Washington Higher Education Coordinating Board, national annual  
          nonresident undergraduate charges averaged $19,880 at flagship  
          universities, and $13,928 at all colleges and universities.

           Recommended amendments  :  Committee staff worked with the  
          author's staff, the sponsors of this bill, and Legislative  
          Counsel on amendments to revise this bill's language and  
          clean-up this code section to make it more readable.  The  
          revision does not alter the general content of this code section  
          or the changes proposed by this bill.  Committee staff suggests  
          these amendments be adopted as committee amendments.

           Prior legislation  :  AB 947 (Brownley), Chapter 377, Statutes of  
          2009, authorized a CCC district to charge capital outlay fees to  
          any nonresident student in addition to the nonresident tuition  
          fee.   
           
          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Santa Monica College

           Opposition 
           
          None on File
           
          Analysis Prepared by  :    Laura Metune / HIGHER ED. / (916)  
          319-3960