BILL ANALYSIS Ó AB 1000 Page 1 Date of Hearing: May 13, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1000 (Weber) - As Amended May 6, 2015 ----------------------------------------------------------------- |Policy |Higher Education |Vote:|13 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill imposes several requirements on the California State University (CSU) regarding the implementation and rescission of student success fees. Specifically, this bill: AB 1000 Page 2 1)Prohibits a CSU campus or the CSU Chancellor from approving a new student success fee or increasing an existing fee until the campus: a) Undertakes a consultation process to inform students on a fee's uses, impacts, and costs. b) Holds a binding student election and a majority of students voting vote affirmatively. The fee would then be adopted contingent on final approval by the Chancellor. c) Informs students that the fee may be rescinded by a majority vote of the students, but not less than six months after a vote to implement the fee. Rescission is not allowed, however, for the portion of the fee committed to support ongoing or long-term obligations until satisfied, unless the campus has identified an alternative funding source. 2)Stipulates that a fee proposal may not be brought before the student body more than once per academic year. 3)Provides that a success fee in place as of January 1, 2016, may be rescinded by student vote only after six years have elapsed following implementation. 4)Requires the Chancellor to: a) Ensure there is majority student representation in success fee oversight groups, an annual report to the chancellor from each campus on its success fee, and a AB 1000 Page 3 transparent process for allocation of success fee revenues. b) Define an ongoing or long-term obligation for purposes of the above. c) Report annually on December 1, to the Legislature and the Department of Finance, a summary of fees adopt or rescinded in the prior academic year, and on the uses of proposed and implemented fees. FISCAL EFFECT: The bill's requirements are generally consistent with a recent policy adopted by the CSU Trustees, though placing these requirements in statute would reduce CSU's flexibility to adjust its policy in reaction to reductions in state support. There would be potential cost pressure to substitute, with other CSU funds (including state General Funds), the portion of any rescinded fee dedicated for a long-term obligation. CSU indicates that, of the $95 million in student success fees generated systemwide, about $38 million are for long-term obligations, ranging from $2 million to $9.5 million on individual campuses. COMMENTS: Background and Purpose. Since 2008, 12 of the 23 CSU campuses AB 1000 Page 4 have adopted student success fees, which were adopted largely in response to significant state funding reductions, and are required to be paid by students enrolling in these campuses. Concern over the amount of these fees, the process used for adoption on campuses, and the impact of the fees on low-income students led to the Legislature placing a 18-month moratorium on new fees and establishing CSU reporting requirements in a trailer bill to the 2014-15 Budget Act (SB 860, Chapter 34, Statutes of 2014). In June 2014, the CSU Trustees formed a working group to study the role, process and enactment of student success fees. The working group found that fees had been used in a number of ways by the different campuses, such as to support technology, campus-wide WiFi, library hours, veteran services, career services, athletics and additional otherwise unfunded services. Some campuses have used these fees, however, to fund educational needs traditionally supported by tuition and state appropriation, such as faculty, advisors, counselors and tutors, and to provide more courses. In January 2015, the Trustees adopted a resolution memorializing the final recommendations of the work group. The CSU Chancellor's Office is reportedly in the process of establishing an Executive Order consistent with the requirements of the resolution. This bill is largely consistent with the requirements of the trustees resolution. AB 1000 Page 5 Analysis Prepared by:Chuck Nicol / APPR. / (916) 319-2081