BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1539
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          Date of Hearing:   June 19, 2012

                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION
                                 Marty Block, Chair
                     SB 1539 (Corbett) - As Amended:  May 2, 2012

           SENATE VOTE  :   24-10
           
          SUBJECT  :   Postsecondary education: textbooks.

           SUMMARY  :   Requires the publisher of a textbook, or an agent or 
          employee of the publisher, to provide prescribed data about the 
          textbook to prospective purchasers.   Specifically,  this bill  :   


          1)Requires each publisher, agent, or employee of a publisher of 
            college textbooks to provide prospective purchasers at a 
            California college or university with a complete list of 
            products that are germane to the subject area of interest and 
            offered for sale by the publisher and requires the publishers  
            to provide the following for each of these products:

            a)   The wholesale price of the product;

            b)   The estimated length of time the publisher intends to 
          keep the product on the market; and,

            c)   A complete list of all differences or changes made 
          between the current edition and the previous edition of the 
          textbook for each new edition of a product.

          2)Requires the lists be made available to the prospective 
            purchaser at the start of any sales interaction at a college 
            or university whether in person, by telephone, or 
            electronically and requires these lists by made available on 
            the publisher's web site.

          3)Includes a variety of terms and definitions, as specified.

           EXISTING LAW  :  Numerous federal and state laws specify textbook 
          information that publishers and higher education institutions 
          must disclose.

          The federal Higher Education Opportunity Act (HEOA) requires 
          publishers, when providing information to faculty or others who 








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          select course materials at an institution of higher education 
          receiving federal financial assistance, to include in writing:

          1)The price at which the publisher would make the college 
            textbook or supplemental material available to a campus 
            bookstore and, if available, the price at which the publisher 
            makes the college textbook or supplemental material available 
            to the public.

          2)The copyright dates of the three previous editions of such 
            college textbook, if any.

          3)A description of the substantial content revisions made 
            between the current edition of the college textbook or 
            supplemental material and the previous edition, if any.

          4)Whether the college textbook or supplemental material is 
            available in any other format, including paperback and unbound 
            and, for each other format of the college textbook or 
            supplemental material, the price at which the publisher makes 
            such other format available to the public.

          Federal HEOA law requires each institution of higher education 
          to:

          1)Disclose in the institution's Internet course schedule, for 
            each course listed, the International Standard Book Number 
            (ISBN) and retail price of required and recommended college 
            textbooks and supplemental materials.

          2)Make available to a college bookstore the most accurate 
            information available regarding the course schedule and for 
            each course offered the ISBN, retail price, number of students 
            enrolled in the course, and the maximum student enrollment for 
            the course. 

          Existing state law:

          1)Requires textbook publishers, by January 1, 2020, to make the 
            textbooks available, in whole or in part, for sale in an 
            electronic format.  The electronic version of any textbook 
            must contain the same content as the printed version and may 
            be copy-protected. 

          2)Requires the California State University and California 








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            Community Colleges, and encourages the University of 
            California, to work with their respective academic senates to 
            encourage faculty to give consideration to the least costly 
            practices in assigning textbooks and to work with publishers 
            and college bookstores.

          3)Requires college bookstores to work with the academic senates 
            of each campus to review the process and timelines involved in 
            ordering and stocking textbooks and to create bundles and 
            packages of instructional materials that are economically 
            sound.

          4)Urges textbook publishers to provide specific information to 
            faculty and post that information on the company's website, 
            give preference to supplements rather than producing a new 
            edition and disclose the length of time the current edition is 
            intended to be in production.

          5)Establishes the College Textbook Transparency Act ƯAB 1548 
            (Solorio), Chapter 574, Statues of 2007], which requires:

             a)   Textbook publishers to print on the cover or within each 
               textbook a summary of the substantive content differences 
               between the new and prior editions and the copyright date 
               of the previous edition.

             b)   Textbook publishers to provide, upon a request by 
               adopters, a list of the substantial content differences or 
               changes made between the current edition initially 
               published on or after January 1, 2010, and the previous 
               edition of the textbook, including but not necessarily 
               limited to, new chapters, additional eras of time, new 
               themes, or new subject matter

             c)   Each campus bookstore at any public college or 
               university to post in its store or on its website a 
               disclosure of its retail pricing policy on new and used 
               textbooks. 

             d)   Each public college or university to encourage personnel 
               responsible for selecting course materials (typically 
               faculty) to place their orders with sufficient lead time to 
               enable the bookstore to confirm the availability of the 
               requested materials.









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           FISCAL EFFECT  :   This bill is keyed non-fiscal by Legislative 
          Counsel.

           COMMENTS  :    Background  .  Several reports throughout the last 
          decade have noted the increasing cost of college textbooks.  In 
          2004, the California Public Interest 
          Research Group released a study that found the cost of textbooks 
          has been rapidly increasing, from an average of $642 per year in 
          1996-97 to $898 per year in 2003-04.  A report by the California 
          State Auditor's Office in 2008 found that textbook costs 
          represented 60% of the total cost to education for community 
          college students, with an annual textbook cost of $692 dollars 
          for students taking a full-time course load. 

          The federal HEOA requires the Comptroller General of the United 
          States to report by July 1, 2013, on the implementation of the 
          requirements imposed upon institutions of higher education, 
          college bookstores and publishers, and particularly to examine:

          1)The availability of college textbook information on course 
            schedules.

          2)The provision of pricing information to faculty by publishers.

          3)The use of bundled and unbundled material.

          4)The implementation of the HEOA by institutions of higher 
            education, including the costs and benefits to such 
            institutions and to students.

           Need for this bill  .  According to the author, "SB 1539 seeks to 
          close the gap of AB 1548 (Solorio, 2007), which among other 
          things requires the differences between the newest edition and 
          the previous edition to be printed on the inside cover of the 
          textbook. SB 1539 would require that this information be 
          provided at the beginning of this transaction. Often times the 
          textbook itself would not be given to the professor during the 
          negotiation phase, which means the professor would not have the 
          information needed to make a sound decision". 

           What does this bill do  ?  State and federal laws passed since 
          2008 have worked to substantially increase the amount of 
          information provided by publishers.  As outlined above in 
          Existing Law, publishers are required to give to faculty 
          information about differences from prior editions and the price 








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          the textbook will be offered to the campus bookstore and to the 
          public.  However, publishers are not required to disclose the 
          estimated length of time the product will be on the market, but 
          publishers are already required to disclose to faculty the 
          copyright dates of the three previous edition.  

          Thus, the provisions of this bill essentially restate existing 
          law, except for: 1) the requirements that publishers provide to 
          faculty a list of the all products and the anticipated length 
          the product will be on the market and 2) the requirement that 
          publishers list information about textbooks on their websites. 
          The committee may wish to consider if existing law requiring the 
          publisher to disclose the previous three edition dates 
          demonstrates a pattern that faculty can use to estimate how long 
          an edition will be current.
          
           Issues to consider  .

          1)Is it always possible for the publisher to know how long an 
            edition will be on the market, and what are the consequences 
            if the information is incorrect?

          2)Does existing law requiring the publisher to disclose the 
            previous three edition dates demonstrate a pattern that 
            faculty can use to estimate how long an edition will be 
            current? 

           Definition of products  .  This bill requires publishers to 
          disclose to faculty all products offered for sale that are 
          germane to the faculty's subject area of interest.  This bill 
          defines "product" to include each version of a textbook or set 
          of textbooks, including a supplemental item whether or not the 
          supplemental item is sold separately or together with a 
          textbook. This bill also defines "product" to include digital 
          formats of textbooks. Current law requires publishers to 
          disclose to faculty if textbooks are available in other formats, 
          such as paperback or unbound, but is silent about digital 
          formats.

           Arguments in support  .  The Community College League of 
          California notes that the costs of textbooks are a significant 
          burden for students and their families. The League adds that AB 
          1539 would provide faculty and students with more information 
          about the textbooks they select and purchase, and that the 
          provisions of this bill would assist students and faculty in 








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          making timely and cost-effective decisions.  

           Arguments in opposition  .  The American Association of Publishers 
          (AAP) writes that, "the passage of related state (AB 1548 
          Solorio, the College Textbooks Transparency Act) and federal 
          (Higher Education Opportunity Act (HEOA) laws, have already 
          addressed the authors' concerns." 

          Opponents also argue that, "the bill would place an undue burden 
          on publishers and send the wrong signal to business inside and 
          outside of California.  The bill would set a precedent that 
          could damage the business climate of California by regulating 
          methods of marketing, sales and product delivery.  If the state 
          were to require publishers to provide proprietary information, 
          such as product life cycles, create unreasonable marketing 
          requirements, and dictate their Web page content and layout, 
          other businesses, such as the movies, computer games and IT, 
          would reasonably fear that they too could come under damaging 
          state controls.   There are probably other states or perhaps the 
          federal government that has placed content control on Web sites 
          - content control that requires the business to place additional 
          content on a prominent place on their web sites.  However, we 
          are not aware of any examples."

           Prior legislation  .  SB 832 (Corbett) of 2007, which was vetoed 
          by Governor Schwarzenegger, was nearly identical to this bill.  
          The veto message read:

               I am supportive of efforts to address the cost of college 
               textbooks and share the concern that these education costs 
               have an impact on the affordability of college for many 
               students.  However, this bill focuses strictly on textbook 
               publisher policies and fails to recognize that the 
               affordability of textbooks is a shared responsibility among 
               publishers, college bookstores, and faculty members.
                              
               Therefore, instead of this bill, I am signing Assembly Bill 
               1548.  Many of the same concepts in SB 832 are included in 
               AB 1548, but AB 1548 recognizes the shared responsibility 
               and attempts to address the issue in a more comprehensive 
               manner.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 








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          Associated Students of the University of California, Davis
          California Community Colleges Chancellor's Office
          California Faculty Association
          California Public Interest Research Group
          Community College League of California
          Faculty Association of California Community Colleges
          Kern Community College District
          Los Rios Community College District
          Rio Hondo Community College District
          San Diego Community College District
          University of California
          West Kern Community College District
           
            Opposition 
           
          Association of American Publishers, Inc.


           Analysis Prepared by  :    Kevin J. Powers / HIGHER ED. / (916) 
          319-3960