BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 13 (Chavez) - Nonresident Tuition Exemptions: Veterans
Amended: June 24, 2013 Policy Vote: Education 5-2
Urgency: No Mandate: Yes
Hearing Date: August 12, 2013
Consultant: Jacqueline Wong-Hernandez
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 13 exempts a student attending a California
community college (CCC), the California State University (CSU),
or University of California (UC) from paying nonresident tuition
if that student was a member of the Armed Forces of the United
States and discharged or released within the immediately prior
year.
Fiscal Impact: The cost of this bill's nonresident tuition
exemption for all veterans discharged or released within the
immediately prior year will depend upon the number of veterans
that choose to utilize the new exemption each year. This bill is
likely to result in significant revenue losses to the CSU, the
UC, and the CCC.
UC: Annual revenue loss likely in excess of $1 million for
undergraduate and graduate student exemptions.
CSU: Annual revenue loss of approximately $2 million for
undergraduate and graduate student exemptions.
CCC: Annual revenue loss likely in excess of $2 million.
Mandate: Likely minor reimbursable mandate on community
college districts to change verification policies and
procedures in compliance with this bill.
Background: Existing law establishes uniform residency
requirements for purposes of determining the amount of fees to
be paid by students at the UC, the CSU, and the CCC and
establishes various exceptions to these residency requirements,
including:
1) A member of the Armed Forces who is stationed in the
state on active duty, except a member assigned for
educational purposes. (Education Code § 68075)
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2) A member of the Armed Forces who is transferred to
another state but continuously enrolled at a college in
California. (EC § 68075)
3) A student who is a dependent of a member of the Armed
Forces stationed in this state on active duty. (EC §
68074)
4) A student dependent of a member of the Armed Forces may
keep his or her resident classification until he or she has
resided in the state for the minimum time necessary to
become a resident in the event the member of the Armed
Forces upon whom they are dependent is transferred outside
of the state or retires as an active member of the Armed
Forces. (EC § 68072)
Existing law, recently enacted by AB 2478 (Hayashi) Ch. 405/2012
provides, for purposes of CCC fees, that a former member of the
Armed Forces can utilize the one-year nonresident fee exemption
within two years of being discharged provided the former member
of the Armed Forces has filed an affidavit with the CCC stating
his or her intention to establish residency in California as
soon as possible. (EC § 68075.5)
Proposed Law: AB 13 exempts veterans who were members of the
Armed Forces of the United States, and discharged or released
within the immediately prior year, from paying nonresident
tuition to attend a CCC, CSU, or UC.
Related Legislation: SB 290 (Knight) exempts a student enrolling
in the CSU or the UC, who was a member of the Armed Forces
within two years of being discharged from paying non-resident
tuition, provided the student has filed an affidavit with the
institution stating his or her intention to establish residency
in California as soon as possible. That bill is currently
awaiting action in the Assembly Appropriations Committee.
Staff Comments: This bill functionally exempts all
recently-separated veterans from the US Armed Services from
having to pay out-of-state tuition in any California public
post-secondary institution. The cost of this bill, which could
be substantial, will be determined by both the number of
veterans who would have enrolled in the CCC, CSU, and UC
regardless and will now receive the new benefit, and by the
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number who will enroll as a direct result of this new benefit.
By extending the benefit to all veterans discharged or released
in the immediately prior year, this bill technically applies to
the 1.5 million active military personnel upon their honorable
discharge or release from active duty. While it is unlikely that
the majority of them would be prompted by this bill to move to
California to pursue higher education immediately upon
separation, the numbers could be significant; costs would
correspond to the number of veterans accessing the benefit, and
the cost of the particular segment they choose to attend.
The segment likely to experience the largest enrollment increase
is the CCC, primarily because it does not have an application
process and related delays. Existing law exempts veterans
formerly stationed in California, who intend to reside in the
state, from paying non-resident tuition at CCCs, and this bill
expands that exemption to any recently-separated veteran
intending to live in California. Each affected veteran would be
eligible to pay $46 per unit, rather than $190 per unit. For
each full time student (enrolled in 30 units per academic year),
the CCC would lose $4,320 in fee revenue. If even 12 students
benefit from this bill, the resulting fee revenue loss would
meet the criteria for referral to the Suspense File.
The number of veterans who will be eligible to benefit from this
bill is not known. There are currently approximately 37,500
veterans enrolled in CCCs statewide. If 1% of them were
full-time students newly eligible to pay resident tuition rates,
the resulting fee loss would be approximately $1.6 million. The
CCC system budget assumes a certain amount of fee revenue each
year. Fee revenue losses result in General Fund cost pressure to
backfill the lost revenue in order to continue to provide
necessary programs.
This bill also exempts veterans from paying nonresident tuition
at the CSU and UC. Each affected veteran enrolling as an
undergraduate in the CSU would be eligible to pay $5,472 per
year, instead of $5,472 + $372 per unit (which would be an
additional $11,160 per year for two 15-unit course load
semesters). Each affected veteran enrolling as an undergraduate
in the UC would be eligible to pay $12,192 instead of $35,070, a
difference of $22,878.
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The CSU has indicated it currently serves approximately 350
nonresident veterans. If even half of those veterans recently
separated from service, they would qualify for in-state tuition
under this bill. If they were full-time students, the revenue
loss to the CSU would be nearly $2 million.
The UC identifies only 27 undergraduate student veterans paying
nonresident tuition, and 61 graduate or professional school
veterans paying nonresident tuition. If even half of those
veterans recently separated from service, they would qualify for
in-state tuition under this bill and the resulting revenue loss
would be nearly $1 million. Because of UC's relatively high
tuition rates, even a minor enrollment increase by recently
separated veterans (resulting from this bill) would result in a
significant additional revenue loss.
Staff notes the full cost of this bill will depend in future
years on the number of veterans who choose to come to California
to take advantage of the benefit. Those veterans can do so under
existing law, but must wait to establish residency before
enrolling in California public post-secondary institutions in
order to take advantage of in-state tuition.
Recommended Amendments: Staff recommends limiting this benefit
to undergraduate enrollment, consistent with this Committee's
amendment to SB 290 (Knight), to modestly reduce the costs of
this bill.