BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 736 (Fox) - California State University: Antelope Valley Campus Amended: June 26, 2014 Policy Vote: Education 7-0 Urgency: No Mandate: No Hearing Date: August 4, 2014 Consultant: Jacqueline Wong-Hernandez This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 736 requires the California State University (CSU) to conduct a study, as specified, regarding the feasibility of CSU satellite program, and ultimately, an independent CSU campus in the Antelope Valley. Fiscal Impact: Feasibility study: Cost pressure of approximately $600,000 (federal or private funds) for the CSU to conduct the authorized study. Formal study: If the feasibility study concludes that there is a "need" for a new campus or center, there will be General Fund cost pressure of $1 million - $2 million to conduct a formal study, as specified. CSU Antelope Valley: To the extent that the feasibility study concludes that there is both need and utility, there will be General Fund cost pressure to create a satellite program or an independent campus. The construction of a new CSU campus will likely require a capital investment of approximately $1 billion. Operating a CSU campus would have an annual cost of approximately $95 million; a satellite program, would have operational cost of approximately $1 million, and construction or leasing costs would depend on local conditions and infrastructure. Background: Existing law declares the intent of the Legislature that sites for new institutions or branches of the CSU shall not be authorized or acquired unless recommended by the California Postsecondary Education Commission (CPEC) and that CPEC should advise the Legislature and the Governor regarding the need for, and location of, new institutions and campuses of public higher education. (CPEC disbanded when the Governor vetoed its funding AB 736 (Fox) Page 1 from the 2011-12 budget.) (Education Code § 66900 and § 66904) Existing law also provides the the CSU Board of Trustees shall have the full power over the construction and development of any CSU campus and any buildings or other facilities or improvements. (EC § 89030, et. seq.) Proposed Law: This bill authorizes the Chancellor of the California State University to conduct a study, as specified, regarding the feasibility of CSU satellite program, and ultimately, an independent CSU campus in the Antelope Valley. This bill requires the study to include all of the following: a) Ten-year enrollment projections and physical capacity analysis; b) regional workforce needs; c) prospective economic impact and job creation in the region; d) infrastructure availability; e) the potential alleviation of overcrowding and traffic at the Bakersfield and Northridge campuses; f) consideration of plausible alternatives; g) academic planning and program justification; g) description of proposed student services and student outreach programs; h) support and capital outlay budget projections; i) geographic and physical accessibility; j) environmental and social impacts; and, k) effects on other educational institutions. This bill requires funding for the study to be derived solely from nonstate sources, and requires the Chancellor to complete and submit the study to the Board of Trustees within 18 months after sufficient funds are available to conduct the study. If the CSU Trustees determine there is a need for a new campus or satellite campus in the Antelope Valley, the Trustees are authorized to conduct a formal study identical in content to the study of a proposed new postsecondary educational program that would have been conducted by the CPEC. Related Legislation: AB 24 (Block, 2009) proposed a study regarding the feasibility of establishing a CSU satellite program and campus at Chula Vista. That bill was vetoed by Governor Schwarzenegger. AB 500 (Conway, 2009) would have required a feasibility study for a CSU campus in the High Desert. That bill failed passage in the Assembly Higher Education Committee AB 736 (Fox) Page 2 Staff Comments: While this bill will not result in direct state costs, it creates substantial cost pressure on the CSU to complete several activities that are geared toward the eventual creation of a new CSU campus in Antelope Valley. This bill "authorizes" the CSU to conduct two studies. The first is a feasibility study that will likely cost $600,000, and which is required to be funded entirely by nonstate funds, to be presented to the CSU Board of Trustees. The CSU already has the authority to conduct such a study, and this bill creates cost pressure for the CSU to seek funding to do so. The funding source is unclear, but the bill prohibits that it be the state. If this study is presented to the Trustees and they agree that there is a need for a new campus or satellite in Antelope Valley, the CSU is "authorized" to conduct a formal study of the type previously conducted by the CPEC. That study is likely to cost $1 million - $2 million, and there is no prohibition against the use of state funds. This will create cost pressure to appropriate General Fund monies for this study. This level of formal study is essentially a plan for establishing a satellite program or campus. To the extent that the studies outline the arguments and plan for a CSU campus, there will be cost pressure to build one, which would likely require a capital investment of approximately $1 billion. The last CSU campus to be built was CSU San Marcos, founded in 1989. That project cost approximately $700 million (in 1989 dollars), and was funded through state funds, nonstate bonds, and local support.