BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 860
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          (  Without Reference to File  )

          SENATE THIRD READING
          SB 860 (Budget and Fiscal Review Committee)
          As Amended  June 12, 2014
          Majority vote.  Budget Bill Appropriation Takes Effect  
          Immediately  

           SENATE VOTE  :  Vote not relevant

           SUMMARY  :  Contains necessary statutory and technical changes to  
          implement the Budget Act of 2014 relating to higher education.   
          This bill makes the following statutory changes to implement the  
          budget:
          
          1)Delays by one year a reduction in the amount of the Cal Grant  
            A and B awards for students attending private, non-profit  
            colleges or accredited for-profit colleges.  Students will  
            receive $9,084 for tuition expenses in 2014-15 fiscal year.

          2)Modifies performance requirements for institutions  
            participating in the Cal Grant program to require a graduation  
            rate above 20% and a cohort default rate of less than 15.5%  
            through the 2016-17 fiscal year.  

          3)Allows students who become ineligible for Cal Grant awards  
            because they exceed the income cap in one year to become  
            eligible again in a subsequent year if their income falls  
            below the cap and they meet all other program eligibility  
            requirements.  The change would apply only to students who  
            reapply no more than three academic years after receiving an  
            initial award. 
               
          4)Makes several clarifying and technical changes to statute  
            pertaining to the Middle Class Scholarship, including setting  
            the minimum award for an eligible student and requiring  
            applications to be submitted by March 2.    
               
          5)Codifies current regulatory requirements that each community  
            college district maintain a student equity plan that includes  
            the following for each community college in the district:

             a)   Campus based research as to the extent of student equity  
               by gender and for students that are current or former  








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               foster youth, disabled, low-income, veterans, or specific  
               ethnic and racial categories.

             b)   Goals for access to, and completion of, basic skills,  
               career technical education and workforce training, and  
               transfer courses for the overall student population and for  
               each population group and a determination of what  
               activities are most likely to effectively meet those goals.

             c)   Measures for addressing disparities, as specified,  
               including:  a means of coordinating with, at a minimum,  
               specific student equity-related categorical programs or  
               campus based programs.

             d)   Sources of funds for activities in the plan.

             e)   A schedule and process for evaluation.

             f)   An executive summary that includes, at a minimum, the  
               student groups for whom goals have been set, the goals, the  
               initiatives that the community college or district will  
               undertake to achieve these goals, the resources that have  
               been budgeted for that purpose, and specific contact  
               information.  Beginning in 2016-17, the summary shall also  
               include a detailed accounting of how funding was expended  
               and an assessment of the progress made in achieving the  
               identified goals.

            Requires the California Community College (CCC) Chancellor to  
            allocate funds provided for the purposes of successfully  
            implementing the activities and goals specified in the student  
            equity plans consistent with: ensuring a community college  
            district has submitted a student equity plan, ensuring that  
            community college districts that serve greater populations of  
            students who are high-need students or disadvantaged students  
            receive greater resources for services, establishing criteria  
            to determine the number of high-need and disadvantaged  
            students in a district, and establishing a list of eligible  
            and ineligible expenditures and activities.

          6)Moves requirements for the CCC California Work Opportunity and  
            Responsibility to Kids program, which have been included in  
            annual budget acts, into statute.









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          7)Makes permissive a requirement that community colleges submit  
            specified facilities information to the CCC Chancellor's  
            office, thereby eliminating a reimbursable state mandate (this  
            information will continue to be collected through the state's  
            capital outlay process).

          8)Pays down inter-year deferrals of funding for community  
            colleges by appropriating a total of $592.5 million of funds  
            from fiscal years 2012-13, 2013-14, and 2014-15.  In addition,  
            for the month of June, defers $94.5 million to July.
               
          9)Specifies that, beginning in the 2015-16 fiscal year, career  
            development and college preparation full-time equivalent  
            students shall be funded at the same rate as the credit rate,  
            as specified.  The Legislative Analyst's Office is required to  
            report by March 1, 2016, regarding the impact of this change.

          10)Requires that the CCC Chancellor develop, and the board of  
            governors adopt, a revised apportionment growth formula for  
            use commencing with the 2015-16 fiscal year.  Specifies that  
            the formula shall support the primary missions of the segment,  
            and be based on each community's need for access to the  
            community colleges, as determined by local demographics.  In  
            developing the formula, the chancellor must consider multiple  
            factors, including:  a) The number of persons under the age of  
            25 without a college degree, within a community college  
            district's boundaries, and the number of persons 25 to 64  
            years of age, without a college degree (the chancellor may  
            alter these age ranges dependent on availability of data);  
            and, b) the number of persons who are unemployed, have limited  
            English skills, are in poverty, or exhibit other signs of  
            being disadvantaged.

            In addition, specifies that the maximum amount of growth  
            established by the chancellor shall be no less than 5% nor  
            greater than 10% of a community college district's  
            apportionment base for the preceding fiscal year.
          11)Provides the San Francisco Community College District with  
            additional funding, for the next three fiscal years, as the  
            college works to restore student enrollment and maintain  
            accreditation.  For the 2014-15 fiscal year the district would  
            receive funding equal to the amount it received in the 2013-14  
            fiscal year, with the amount of funding for the district being  
            reduced by 5% and 10% in 2015-16 and 2016-17, respectively.   








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            In order to receive the third year of funding, the district  
            would be required to meet or exceed benchmarks related to  
            fiscal management and controls, as specified.

          12)Adjusts the method for scoring local property tax revenues in  
            the 2013-14, 2014-15, and 2015-16 fiscal years, that formerly  
            flowed to redevelopment agencies and now flow to the colleges  
            as an offset to CCC apportionments, by scoring revenues  
            received late in the fiscal year, after April 15, as having  
            been received in the next fiscal year.  This will provide the  
            colleges with more certainty as they develop and administer  
            their budgets.

          13)Requires the CCC Chancellor, in coordination with community  
            college stakeholder groups, the appropriate fiscal and policy  
            committees of the Legislature, and the Department of Finance  
            (DOF), to develop a framework of indicators designed to  
            measure the ongoing condition of a community college's  
            operational environment in the following areas:  a)  
            accreditation statues; b) fiscal viability; c) student  
            performance and outcomes; and d) programmatic compliance with  
            state and federal guidelines.  Requires that each community  
            college develop, adopt, and publicly post a goals framework  
            that addresses at least of the areas specified above.  Before  
            the commencement of the 2015-16 fiscal year, and annually  
            thereafter, requires the chancellor to publicly post the  
            statewide goals and locally developed and adopted community  
            college or district goals and targets.  The chancellor shall  
            assess the degree to which each community college district is  
            improving its outcomes and offer technical assistance to  
            community college districts that are not improving.

          14)Extents the sunset, from June 30, 2014, to December 31, 2015,  
            on the additional time a person serving as temporary full-time  
            clinical nursing faculty or as a part-time clinical nursing  
            faculty may be employed by a community college district.   
            Under this extension, a person serving as a full-time clinical  
            nursing faculty or as a part-time clinical nursing faculty may  
            be employed by a community college district for up to four  
            semesters or six quarters within any period of three  
            consecutive academic years, which is twice the statutory limit  
            for all other temporary faculty. 

          15)Makes technical and clarifying chances to statutory  








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            requirements for annual reporting on system-wide performance  
            measures by the University of California (UC) and California  
            State University (CSU).

          16)Prohibits a CSU campus, or the chancellor, from approving a  
            student success fee before January 1, 2016, and requires the  
            chancellor to conduct a review of the CSU student fee policy,  
            as specified.  Requires the chancellor to report to the DOF  
            and the appropriate fiscal and policy committees of the  
            Legislature, on February 1, 2015, regarding proposed revisions  
            to the CSU student fee policy related to student success fees.

          17)Provides the CSU with the authority to pledge up to 12% of  
            the state funds provided in its General Fund support budget,  
            less general obligation debt payments and lease payments,  
            towards capital outlay, lease-revenue bond debt financed and  
            pay as you go, inclusive.  Further, provides the CSU with the  
            authority to pursue capital outlay projects, after approval by  
            DOF and review by the committees in each house of the  
            Legislature that consider the state budget, and the budget  
            subcommittees in each house of the Legislature that consider  
            appropriations for the CSU.

          18)Makes technical and clarifying changes to the UC capital  
            outlay process, moves language regarding energy conservation  
            projects that had been included in provisional budget language  
            into statute, and creates one process to authorize UC energy  
            conservation projects instead of two.

          19)Requests the UC Regents to establish the California Blueprint  
            for Research to Advance Innovations in Neuroscience program to  
            leverage California's vast research assets and federal funding  
            opportunities to accelerate the development of brain mapping  
            techniques, including the development of new technologies, in  
            order to achieve the following goals:  a) maintain  
            California's leadership role in neuroscience innovation; b)  
            develop a dynamic map of the human brain, as specified; c)  
            grow California's economy through the expansion of high  
            technology and biotechnology sectors; and, d) train the next  
            generation of scientists.

          20)Provides the UC with authority to begin the Tolman Hall  
            Seismic Replacement Building project on the UC Berkeley  
            campus.








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          21)Authorizes the use of $6 million in excess Student Loan  
            Authority funds (remaining after the recently-approved sale of  
            the Cal Loan program portfolio by the California Educational  
            Facilities Authority) as an offset to the General Fund cost of  
            Student Aid Commission loan assumption program costs. 

          22)Extends the sunset date, to January 1, 2020, for authority to  
            use a portion ($65) of certain appellate court civil filing  
            fee revenue to support the California State Law Library. 

          23)Authorizes the State Fire Marshal to delegate enforcement of  
            building standards on CSU campuses to the CSU.  Authorizes the  
            CSU to use one contract for multiple projects at multiple  
            campuses, and to provide public notice of contract bids on its  
            Internet Web site.

          24)Authorizes adjustments to Proposition 98 of 1998 General Fund  
            spending in whatever amounts are necessary to maintain  
            budgeted funding levels for community colleges, if Proposition  
            30 of 2012 revenue estimates for 2012-13, 2013-14, or 2014-15  
            fiscal years are higher or lower than actual receipts.  

          25)Reappropriates the balance of Item 6870-139-8080 of Section  
            2.00 of the Budget Act of 2013, payable from the Clean Energy  
            Job Creation Fund and extends the ability to encumber this  
            balance until June 30, 2018.

          26)Declares that statutory changes contained in this bill,  
            including appropriations, are consistent with the 2014 budget  
            package.     


           Analysis Prepared by  :    Mark Martin / BUDGET / (916) 319-2099


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