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)
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          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)
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          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.