BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 259 (Hancock)
          
          Hearing Date: 01/19/2012        Amended: 03/14/2011
          Consultant: Maureen Ortiz       Policy Vote: P.E.&R. 3-2
          _________________________________________________________________
          ____
          BILL SUMMARY:   SB 259 expands the definition of employees under 
          the Higher Education Employer-Employee Relations Act to include 
          student employees whose employment is contingent upon their 
          status as students. 
          _________________________________________________________________
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2012-13      2013-14       2014-15     Fund
                                                                      
          Collective bargaining                  $639                
          $6,500              $6,500         General

          Salary compensation                ----potentially $11,681 
          annually------              Gen/Fed*
                                                            dependent on 
          collective bargaining

          *Approximately 85% funding come from Federal grants and Private 
          sources
          _________________________________________________________________
          ___

          STAFF COMMENTS: SUSPENSE FILE. 

          The intent of SB 259 is to authorize graduate student Research 
          Assistants who are employed by the University of California to 
          collectively bargain for benefits.  There are approximately 
          14,000 Research Assistants (RAs) employed by the University of 
          California (UC), and about 85% of the funding comes from 
          non-State sources such as Federal funds and private grants, with 
          the remaining costs coming from the General Fund.  The UC 
          estimates initial costs associated with collective bargaining to 
          be $638,915, and ongoing administrative costs of approximately 
          $6.5 million annually for additional necessary staffing 
          requirements at each of the ten campuses.  Administrative costs 
          stem from the need to provide additional staff support to 








          > (>)
          Page 1


          bargain a contract, develop policy and educational materials, 
          and implement training programs for the campuses.  These costs 
          would likely be paid from the General Fund.   In addition, the 
          UC cost estimate above for salary compensation is based on 
          funding each research assistant at a midpoint range of Level 5 
          if the RAs receive a compensation increase as a result of their 
          new contract.  Though the research assistant positions are 
          mostly funded from grants and federal monies, those grants are 
          in limited supply and any increases in costs would likely result 
          in fewer RA positions being offered.

          The University of California already extends health insurance 
          benefits and tuition fee waivers to Research Assistants.  
          Teaching Assistants, which are subject to collective bargaining, 
          are additionally provided a child care subsidy as a result of 
          their negotiated contract.  If child care is ultimately 
          negotiated as a paid benefit to RAs through the collective 
          bargaining process, the total costs of that benefit would be 
          approximately $150,000 ($22,500 from the General Fund).  This 
          estimate is based on a comparable number of RAs using the child 
          care subsidy as the Teacher Assistants have done.  

          The Higher Education Employer-Employee Relations Act (HEERA) 
          provides a statutory framework to regulate labor relations 
          between the University of California (UC), the 
          California State University (CSU), and Hastings College of Law 
          and their employees.  HEERA is administered and enforced by the 
          Public Employment Relations Board (PERB).

          PERB's decision in Regents of the UC & Association of Student 
          Employees, UAW, et al (1998) (PERB Order No. 1301-H) rendered a 
          determination that under the current statutory language, UC's 
          12,000 Teaching Assistants (TAs), Readers, and Tutors had 
          bargaining rights but, the Research Assistants (RAs) did not.  
          This inequity creates a continuity problem when student 
          employees change positions from TAs to RAs, and back again since 
          while employed as RAs, they are not covered by a contract and 
          consequently lose child care subsidies and other rights and 
          benefits.

          Aside from providing eligibility for UC Research Assistants to 
          participate in a collective bargaining process, the provisions 
          of SB 259 may create a fundamental change in the faculty-student 
          relationship which is currently more of an academic 








          > (>)
          Page 2


          mentor-mentee relationship.  The University of California 
          indicates that this relationship would change to one of 
          employer-employee, and could have a severely negative impact on 
          the University's mission of teaching, research and service. 

          Student employees who work jobs equivalent to RAs at CSU are 
          covered under HEERA by voluntary agreement between the UAW and 
          CSU.

          Universities that are awarded federal grant monies for research 
          activities are always provided with funds to cover costs 
          associated with indirect costs.  The resources required to 
          conduct extramural research include those elements which are 
          distinguishable on a project-by-project basis (such as 
          consumable supplies, salaries of active participants, equipment 
          purchased for the project) and those that are better calculated 
          on an institutional basis rather than cost-out by project (e.g. 
          research administration and accounting, purchasing, library, 
          space, maintenance).

          The Federal Office of Management and Budget, in document 
           OMB-A-21  , defines allowable direct and indirect costs for 
          federal grants and contracts. Direct costs are those that can be 
          specifically identified with the project, whereas Indirect cost 
          items are associated with general infrastructure support.  
          Indirect costs are real costs to the University associated with 
          carrying out extramurally funded research.


          There are eight areas of general infrastructural support 
          described as indirect costs:


                  o         Departmental Administration:  Administrative 
                    support such as staff salaries, supplies, and other 
                    general expenses at the college, department, and 
                    program levels. This indirect cost pool is commonly 
                    the largest of the eight factors built into the 
                    indirect cost rate


                  o         Building use:  Calculated using a depreciation 
                    schedule, and including debt service costs









          > (>)
          Page 3



                  o         Equipment:  Calculated using depreciation 
                    schedules based on "useful life"


                  o         Operations and Maintenance:  Utilities, 
                    repairs, custodial, environmental health and safety, 
                    general facilities management costs


                  o         Library:  Administration, purchase of books 
                    and periodicals


                  o         General Administration:  General 
                    administrative offices' expenses


                  o         Student Service Administration:  A portion of 
                    student services, including admissions, counseling, 
                    health services, etc.


                  o         Sponsored Projects Administration:  Typically, 
                    grant and contract office expenses and associated 
                    accounting.


          While it has not been determined whether the University of 
          California can charge costs associated with collective 
          bargaining activities to contracts and grants as indirect costs, 
          the UC has determined over the last two years that there has 
          been insufficient indirect cost recovery to pay for the actual 
          expenses of conducting research.  Furthermore, the amount of 
          grant monies received, whether for direct or indirect costs, 
          will not change as a result of the enactment of this bill.
















          > (>)
          Page 4