BILL ANALYSIS                                                                                                                                                                                                    


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                                 UNFINISHED BUSINESS

          Bill No:  SB 860
          Author:   Senate Budget and Fiscal Review Committee
          Amended:  6/12/14
          Vote:     21


           ASSEMBLY FLOOR  :  Not available

           SUBJECT  :    Budget Act of 2014:  Higher Education Trailer bill 

           SOURCE  :     Author

           DIGEST  :    This bill provides for statutory changes necessary to  
          enact postsecondary education-related provisions of the Budget  
          Act of 2014.

           Assembly Amendments  delete the Senate version of the bill, which  
          expressed legislative intent to enact statutory changes relating  
          to the Budget Act, and instead add the current language.

           ANALYSIS  :    This bill makes the following statutory changes to  
          implement the 2014-15 Budget Act.

           Cal Grant Cohort Default Rate  .  Modifies an exemption to the Cal  
          Grant cohort default rate that allows institutions with a three  
          year cohort default rate of less than 10% and a graduation rate  
          above 20% to remain eligible for the Cal Grant program through  
          the 2016-17 fiscal year, by changing the cohort default rate to  
          less than 15.5%.  


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           Expand Cal Grant Renewal Eligibility  .  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 applies only to  
          students who reapply no more than three academic years after  
          receiving an initial award. 

           Cal Grant Maximum Award  .  Delays, by one year, a reduction in  
          the maximum 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  

           Middle Class Scholarship  .  Makes clarifying and technical  
          changes to statute pertaining to the middle class scholarship.   
          In addition sets the minimum award for an eligible full-time  
          enrollment student at $90. 

           California Community College (CCC) Student Equity Plans  .   
          Codifies current regulatory requirements that each CCC district  
          maintain a student equity plan that includes the following for  
          each CCC in the district:

          1. Campus-based research as to the extent of student equity by  
             gender and for students that are current or former foster  
             youth, disabled, low-income, veterans, or in specific ethnic  
             and racial categories.

          2. 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.

          3. 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.

          4. Sources of funds for activities in the plan.

          5. A schedule and process for evaluation.



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          6. An executive summary that includes, at a minimum, the student  
             groups for whom goals have been set, the goals, the  
             initiatives that the CCC 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  

          This bill requires the 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 that a CCC district has submitted a student equity  
          plan, ensuring that CCC 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.

           CCC Construction Mandate  .  Makes permissive, a requirement that  
          CCCs 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).  

           CCC Deferrals  .  Pays down inter-year deferrals of funding for  
          CCC 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.

           Enhanced Non-Credit Rate Increase  .  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.

           CCC Growth Formula  .  Requires that the CCC Chancellor develop,  
          and the board of governors of a CCC 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  



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          community's need for access to the CCCs, as determined by local  
          demographics.  In developing the formula, the chancellor must  
          consider multiple factors, including: (1) the number of persons  
          under the age of 25 without a college degree, within a CCC  
          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 (2) the  
          number of persons who are unemployed, have limited English  
          skills, are in poverty, or exhibit other signs of being  

          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 CCC district's apportionment base for the  
          preceding fiscal year.

           San Francisco Community College District Stability  .  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 will 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 five, and  
          10%, in 2015-16 and 2016-17, respectively.  In order to receive  
          the third year of funding, the district will be required to meet  
          or exceed benchmarks related to fiscal management and controls,  
          as specified. 

           CCC Local Property Tax Revenues  .  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 CCC with more certainty as they develop and  
          administer their budgets.

           CCC Performance Measures .  Requires the CCC Chancellor, in  
          coordination with CCC stakeholder groups, the appropriate fiscal  
          and policy committees of the Legislature, and the Department of  
          Finance, to develop a framework of indicators designed to  
          measure the ongoing condition of a CCC's operational environment  
          in the following areas:  (1) accreditation statues; (2) fiscal  
          viability; (3) student performance and outcomes; and (4)  



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          programmatic compliance with state and federal guidelines.   
          Requires that each CCC develop, adopt, and publicly post a goals  
          framework that addresses, at the least, the areas specified  

          Before the commencement of the 2015-16 fiscal year, and annually  
          thereafter, requires the CCC Chancellor to publicly post the  
          statewide goals and locally-developed and adopted CCC or  
          district goals and targets.  The CCC Chancellor shall assess the  
          degree to which each CCC district is improving its outcomes and  
          offer technical assistance to CCC districts that are not  

           CCC Clinical Nursing Faculty  .  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 CCC  
          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 CCC 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. 

           University of California (UC) and California State University  
          (CSU) Performance Measures  .  Makes technical and clarifying  
          chances to statutory requirements for annual reporting on  
          system-wide performance measures by the UC and CSU.

           Student Success Fee Moratorium  .  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 Department of Finance 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.

           CSU Capital Outlay Process  .  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  



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          approval by the Department of Finance 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.  

           UC Capital Outlay Process  .  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  

           California Blueprint for Research to Advance Innovations in  
          Neuroscience (Cal-BRAIN) Act of 2014  .  Requests the UC Regents  
          to establish the Cal-BRAIN 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:  (1) maintain California's leadership role in  
          neuroscience innovation; (2) develop a dynamic map of the human  
          brain, as specified; (3) grow California's economy through the  
          expansion of high technology and biotechnology sectors; and (4)  
          train the next generation of scientists.

           UC Berkeley Tolman Hall Seismic Project  .  Provides the UC with  
          authority to use its General Fund appropriations for the Tolman  
          Hall Seismic Replacement Building project at the Berkeley  

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

           State Law Library Fee Sunset Extension  .  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. 

           CSU infrastructure and contract authority  .  Authorizes the State  
          Fire Marshal to delegate enforcement of building standards on  
          California State University campuses to the CSU.  Authorizes the  



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          CSU to use one contract for multiple projects at multiple  
          campuses, and to provide public notice of contract bids on its  
          Internet Web site.

           CCC Education Protection Account (EPA)  .  Authorizes adjustments  
          to Proposition 98 General Fund spending in whatever amounts are  
          necessary to maintain budgeted funding levels for CCCs, if EPA  
          revenue estimates for 2012-13, 2013-14, or 2014-15 are higher or  
          lower than actual receipts.  

           CCC CalWORKs Program  .  Moves requirements for the CCC CalWORKs  
          program, which have been included in annual budget acts, into  

           Clean Energy Job Creation Fund Reappropriation  .  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,  

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Budget and Fiscal Review Committee,  
          statutory changes contained in this bill, including  
          appropriations, are consistent with the 2014 Budget package.

          PQ:d  6/15/14   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  NONE RECEIVED

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