BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 13
                                                                  Page  1


          ASSEMBLY THIRD READING
          AB 13 (Chávez and Quirk-Silva)
          As Amended  March 11, 2013
          Majority vote 

           HIGHER EDUCATION    13-0        VETERANS AFFAIRS    10-0        
           
           ----------------------------------------------------------------- 
          |Ayes:|Williams, Chávez, Bloom,  |Ayes:|Muratsuchi, Chávez,       |
          |     |Fong, Fox, Jones-Sawyer,  |     |Atkins, Brown, Eggman,    |
          |     |Levine, Linder, Medina,   |     |Fox, Grove, Melendez,     |
          |     |Hagman, Quirk-Silva,      |     |Salas, Yamada             |
          |     |Weber, Wilk               |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           APPROPRIATIONS      17-0                                        
           
           ----------------------------------------------------------------- 
          |Ayes:|Gatto, Harkey, Bigelow,   |     |                          |
          |     |Bocanegra, Bradford, Ian  |     |                          |
          |     |Calderon, Campos,         |     |                          |
          |     |Donnelly, Eggman, Gomez,  |     |                          |
          |     |Hall, Ammiano, Linder,    |     |                          |
          |     |Pan, Quirk, Wagner, Weber |     |                          |
          |     |                          |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Exempts former members of the Armed Forces, who were  
          honorably discharged or released from active duty within the  
          immediately prior year, from paying nonresident tuition at the  
          California State University (CSU) and California Community  
          Colleges (CCC).    

           EXISTING LAW  establishes uniform residency requirements for  
          purposes of ascertaining the amount of fees to be paid by  
          students at CSU and CCC and establishes various exceptions to  
          these residency requirements, including many for current and  
          former members of the Armed Forces (Education Code Sections  
          68074 and 68075).  The University of California (UC), as a  
          result of its constitutional autonomy, establishes its tuition  
          policies; however, these policies traditionally mirror state  
          policies.









                                                                  AB 13
                                                                  Page  2


           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, this bill will result in revenue losses or around  
          $1.4 million in the first year and $250,000 annually thereafter  
          to UC and $1 million to CSU in the first year and $200,000  
          annually thereafter to CSU.  The CCC would incur revenue losses  
          probably in the low hundreds of thousands of dollars.

           COMMENTS  :  Current law establishes the requirements for  
          determining residency for purposes of paying the lower-cost  
          "in-state" student fees at UC, CSU, and CCC.  To qualify for the  
          lower resident fees, students are generally required to have  
          resided in California for more than one year immediately  
          preceding the residence determination date and undertake other  
          specified actions such as registering to vote or registering  
          one's car in California.

          What benefit does this bill provide?  By removing the  
          requirement that veterans must have served in California for one  
          year immediately prior to discharge, this bill would allow  
          veterans from other states to pay resident tuition rates instead  
          of the higher nonresident rate for up to one year.  The  
          Post-9/11 GI Bill benefits fund a student's in-state tuition and  
          fees.  Thus, this bill would provide a subsidy equaling the  
          difference between the resident and non-resident fees at the  
          student's college or university during his or her first year.   
          After the first year, when the student will have had the  
          opportunity to establish residency, the Post-9/11 GI Bill would  
          fully cover the student's fees.  

          Benefits of California-resident classification.  UC, CSU, and  
          CCC are publicly subsidized with the proceeds of state taxes;  
          the lower resident fees for students who reside in California  
          reflect the contribution they and their parents have already  
          made by paying taxes in California.  The fees charged to  
          non-California residents are intended to cover the cost of the  
          subsidy that is generated by California taxpayers.  In addition  
          to in-state tuition and fees, full-time undergraduate students  
          pay the following nonresident tuition:
           
          UC                            $22,878 per year
          CSU                           $11,140 per year
          CCC            $208 per unit
           
           According to the author, the difference between resident and  








                                                                  AB 13
                                                                  Page  3


          nonresident tuition is a significant financial barrier for  
          veterans from other states who wish to attend a California  
          public institution directly after discharge and before they have  
          had the opportunity to establish residency.  

          This bill would extend a benefit to veterans from other states  
          that are not always provided to California veterans.  According  
          to the author, only 19 states currently offer similar residency  
          waivers, although several states are considering similar  
          legislation.  Federal legislation has been introduced in both  
          the House and the Senate to require institutions that are  
          eligible for Post 9/11 GI Bill benefits to charge any veteran  
          the resident tuition rate.  

          All three segments (UC, CSU, and CCC) have seen significant  
          reductions in state support in recent years, resulting in  
          tuition and fee increases and enrollment reductions.  This  
          measure would result in further revenue losses to the segments  
          and competition with California residents struggling to get  
          courses.  If the intent of this bill is to provide a benefit to  
          non-Californian members of the military, it may be more  
          appropriate to provide this benefit directly, such as through a  
          Cal Grant dedicated to these students for the one year it takes  
          to establish residency.  This would allow the Legislature to  
          more easily track the costs of the program, as well as review  
          its merits relative to other student financial aid programs and  
          other state-supported programs, and would spare the segments  
          revenue losses.  

          Related legislation:  SB 290 (Knight), pending in the Senate, is  
          very similar to this bill.  AB 2250 (Beth Gaines) of 2012, which  
          died in the Assembly Appropriations Committee, was substantially  
          similar to this bill.  AB 2478 (Hayashi), Chapter 405, Statutes  
          of 2012, allowed a student veteran to establish residency within  
          two years, rather than one year, of discharge.  Several similar  
          bills have been introduced annually since 2006, and all were  
          held in the Appropriations committees.   

           
          Analysis Prepared by  :    Jeanice Warden / HIGHER ED. / (916)  
          319-3960 


                                                                FN: 0000788








                                                                  AB 13
                                                                  Page  4