BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1348
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          Date of Hearing:   May 1, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

             AB 1348 (John A. Perez) - As Introduced:  February 22, 2013 

          Policy Committee:                              Higher  
          EducationVote:13-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill establishes a new state oversight and coordinating  
          body for higher education. Specifically, this bill:

          1)Establishes the California Higher Education Authority, to be  
            governed by a 13-member board of directors, appointed as  
            specified. Board members would be paid $100 per day of  
            official business plus travel expenses.

          2)Establishes the authority's responsibilities, including:

             a)   Developing and monitoring the state's postsecondary  
               education goals and reporting on the postsecondary  
               education segments' progress toward their long-term goals.

             b)   Measuring and reporting on the segments' efficiency and  
               effectiveness in serving the state's needs.

             c)   Providing oversight and advice on postsecondary capital  
               outlay decisions.

             d)   Developing and recommending finance policies to the  
               governor and Legislature regarding such issues as  
               allocation of appropriations among the segments, student  
               fee policy, and financial aid policy.

             e)   Reviewing and making recommendations to the governor and  
               Legislature regarding major capacity decisions, such as  
               state- or fee-funded mission changes or new centers or  
               campuses.









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             f)   Acting as a postsecondary education information  
               clearinghouse for the Legislature, governor, and other  
               agencies, and developing and maintaining a comprehensive  
               database, with specified capabilities.

          3)Transfers to the authority, by July 1, 2014, the data  
            management responsibilities of the former California  
            Postsecondary Education Commission (CPEC).

          4)Authorizes the authority to require the governing boards and  
            institutions of postsecondary education to submit specified  
            data and requires the authority to furnish related information  
            to the governor and the Legislature upon request.

           FISCAL EFFECT  

          In its last full year of operation, CPEC's General Fund  
          operating budget was $1.9 million for the equivalent of 18  
          positions. The new authority established in this bill would  
          likely have a budget of similar magnitude. In addition, the  
          authority would incur one-time information technology costs in  
          the range of $200,000.

           COMMENTS  

           1)Background  . AB 770 (Vasconcellos) of 1973 created CPEC and  
            made it responsible for the planning and coordination of  
            postsecondary education. CPEC was charged with providing  
            analysis, advice, and recommendations to the Legislature and  
            the governor on statewide policy and funding priorities. As  
            part of his 2011-12 budget, Governor Brown proposed  
            eliminating CPEC. Both houses rejected this proposal, but the  
            governor exercised his line item veto to remove all General  
            Fund support for CPEC, describing the commission as  
            "ineffective." In his veto message, however, the governor  
            acknowledged the need for coordinating and guiding state  
            higher education policy and requested that stakeholders  
            explore alternative ways these functions could be fulfilled. 

            On November 18, 2011, CPEC closed its office and ceased  
            operations. Its federal Teacher Quality Improvement grant  
            program was transferred to the California Department of  
            Education (CDE) and its extensive data resources were  
            transferred to the California Community Colleges (CCC)  
            Chancellor's Office.








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            Over the last decade, a substantial number of policy analysts,  
            legislators, and researchers expressed dissatisfaction with  
            the effectiveness of CPEC and its capacity-in part due to  
            budget reductions-to exercise its statutory responsibilities.  
            Another contributing factor to CPEC's perceived lack of  
            effectiveness was its governance. CPEC was seen to be  
            dominated by the segment representatives who advocated a  
            consensus approach to decision making.  In a 2003 review, the  
            Legislative Analyst's Office (LAO) contended that the role  
            CPEC was expected to play "requires a critical perspective on  
            higher education issues and sometimes arriving at conclusions  
            with which the segments may strongly disagree."

           2)Purpose  . In a January report, "Improving Higher Education  
            Oversight," the LAO contends the state needs higher education  
            oversight that enables policymakers and others to monitor how  
            efficiently and effectively the postsecondary system is  
            serving the state's needs, and make changes to improve its  
            performance. The Analyst recommends that the new entity have  
            independence from the public higher education segments, have a  
            more unified governing board appointment process and be  
            assigned limited and clear responsibilities.  AB 1348 is based  
            on the LAO recommendations.

            According to the author, ""Coordination, oversight and  
            accountability in higher education are key to ensuring that  
            taxpayer dollars are being utilized in the most efficient and  
            effective manner possible and that students are progressing  
            toward their educational goals without encountering  
            unnecessary barriers?" The author intends that, unlike CPEC,  
            the California Higher Education Authority would be charged  
            with the responsibility and assigned the authority and fiscal  
            capacity to carry out its mission.

           3)Prior Legislation  . Last year, AB 2190 (John A. Perez), an  
            identical bill, was held on this committee's Suspense file.

            SB 721 (Lowenthal), which was vetoed in 2012, was the latest  
            in a long line of unsuccessful legislative attempts to  
            establish an accountability framework for higher education.

            SB 1138 (Liu), which required the CDE and the State Board of  
            Education to assume CPEC's data management responsibilities,  
            was held on Suspense last year in Senate Appropriations.








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           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081