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) Page 1 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) Page 2 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. AB 1348 (Perez) Page 3 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.