BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 1348 (J. Perez) - California Higher Education Authority 
          
          Amended: July 2, 2014           Policy Vote: Education 6-0
          Urgency: No                     Mandate: No. See staff comments.
          Hearing Date: August 4, 2014                                 
          Consultant: Jacqueline Wong-Hernandez                       
          
          This bill meets the criteria for referral to the Suspense File. 
          
          Bill Summary: AB 1348 establishes the California Higher  
          Education Authority (CHEA), its governing board and its  
          responsibilities, as specified, phased-in over a three-year  
          period.  

          Fiscal Impact: 
              Annual costs of approximately $2 million - $ 4 million  
              (General Fund), once fully operational.
              Segments: Potentially significant costs to the University  
              of California, California State University, and California  
              Community colleges (CCC), to provide extensive data to CHEA  
              upon its request. See staff comments.

          Background: Existing law establishes the California  
          Postsecondary Education Commission (CPEC) to be responsible for  
          coordinating public, independent, and private postsecondary  
          education in California and providing independent policy  
          analysis and recommendations to the Legislature and the Governor  
          on postsecondary education issues. 

          Existing law also requires the CPEC to (1) act as a  
          clearinghouse for postsecondary education information and to  
          serve as a primary source of information for the Legislature,  
          Governor, and other agencies and, (2) develop and maintain a  
          comprehensive database that supports longitudinal studies of  
          individual students as they progressed through the state's  
          postsecondary educational institutions through the use of a  
          unique student identifier.  Additionally, the CPEC was to  
          provide each of the educational segments access to the data made  
          available to the CPEC for purposes of the database in order to  
          support statewide, segmental and individual campus educational  
          research needs.  (Education Code § 66900 et. seq.)









          AB 1348 (Perez)
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          In 2011, Governor Brown vetoed CPEC funding, resulting in its  
          closure in November 2011. Although the Governor eliminated all  
          General Fund support for CPEC, its statutory authority remains  
          intact.

          Proposed Law: This repeals CPEC's statutory authority, and  
          establishes the CHEA, phased-in over a three-year period.  
          Specifically, this bill:  

             1)   Establishes the CHEA to be governed by a voting  
               11-member board of directors, including nine  
               representatives of the general public, as specified, and  
               two student representatives. 

             2)   Establishes procedures and timelines for board  
               appointments, and specifies legislative intent that  
               appointment of the first members of the board of directors  
               be completed before July 1, 2015. 

             3)   Establishes a nine-member student advisory committee to  
               advise the board of directors on matters related to student  
               fees and policies, financial aid, student services, student  
               life, and educational policy. 

             4)   Authorizes the board of directors to elect a chairperson  
               from its membership and to enter into agreements with any  
               public or private agency, officer, person, institution,  
               corporation, association, or foundation for the performance  
               of acts or for the furnishing of services, facilities,  
               materials, goods, supplies, or equipment.

             5)   Requires the board of directors to appoint an executive  
               officer of the CHEA, who shall serve at the pleasure of the  
               board of directors and is authorized to appoint additional  
               staff of the CHEA as necessary.

             6)   Requires the CHEA to carry out all of the following  
               responsibilities:

               a)        Developing, presenting, and monitoring  
                    postsecondary education goals for the state, as  
                    specified;

               b)        Measuring and reporting on the efficiency and  








          AB 1348 (Perez)
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                    effectiveness of the postsecondary education segments  
                    in serving the state's needs;

               c)        Making recommendations about how to improve the  
                    performance of the postsecondary education segments;

               d)        Developing information in order to assist state  
                    and local policymakers and consumers in making  
                    cost-effective investments in postsecondary education  
                    and training to meet the long-term goals of a strong  
                    state economy and vibrant communities;

               e)        Developing and recommending strategic finance  
                    policy to the Governor and the Legislature on topics  
                    including, but not limited to, the allocation of state  
                    appropriations among the postsecondary education  
                    segments, public postsecondary student fee policy, and  
                    student financial aid;

               f)        Developing and presenting basic policy parameters  
                    for capacity development or realignment, including,  
                    but not limited to, expansion or realignment of  
                    enrollment capacity among or within the postsecondary  
                    education segments, to meet the state's higher  
                    education goals;

               g)        Acting as a clearinghouse for postsecondary  
                    education information, as specified.  

             7)   Requires the CHEA to provide a freshman eligibility  
               report, as specified, within 18 months.

             8)   Requires the board to convene a 10-member technical  
               working group, as specified, to advise on data and policy  
               matters. 

             9)   Authorizes the CHEA to require the governing boards and  
               the institutions of public postsecondary education to  
               submit data on plans and programs, costs, selection and  
               retention of students, enrollments, plant capacities, and  
               other matters pertinent to effective planning, policy  
               development, and articulation and coordination, and to  
               furnish information concerning these matters to the  
               Governor and to the Legislature as requested by them.








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          Staff Comments: This bill creates a successor agency to the  
          CPEC. It specifies the composition of a governing board, a  
          student advisory board, and the duties of the CHEA. Based on the  
          former CPEC budget, costs are likely to be $2 million - $4  
          million (General Fund) annually. 

          This bill does, however, give significant latitude to the CHEA  
          board to make decisions that would affect the size of the agency  
          and its budget. Specifically, this bill authorizes the board of  
          directors to enter into agreements with any public or private  
          agency, officer, person, institution, corporation, association,  
          or foundation for the performance of acts or for the furnishing  
          of services, facilities, materials, goods, supplies, or  
          equipment. The bill also requires the board to appoint an  
          executive officer who "is authorized to appoint additional staff  
          of the CHEA as necessary." Depending on how the board envisions  
          the scope of CHEA's work, staffing resources could be  
          significant and vary over time.

          Additionally, this bill gives CHEA the authority to compel the  
          institutions of public postsecondary education to "submit data  
          on plans and programs, costs, selection and retention of  
          students, enrollments, plant capacities, and other matters  
          pertinent to effective planning, policy development, and  
          articulation and coordination, and to furnish information  
          concerning these matters to the Governor and to the Legislature  
          as requested by them." Depending upon what information is  
          requested, these requests could drive significant workload at  
          each of the segments and campuses. Any data reporting  
          requirements CHEA imposes, with statutory authority to do so, on  
          CCCs will likely be deemed by the Commission on State Mandates  
          to be a reimbursable mandate.