BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1307


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          Date of Hearing:  May 6, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          1307 (McCarty) - As Amended April 23, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill:


          1)Prohibits the California State University (CSU) Trustees and  








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            the University of California (UC) Regents from implementing  
            mandatory tuition increases to California resident students if  
            the Legislative Analyst determines that the Trustees or the  
            Regents, respectively, failed to comply with the notice and  
            consultation requirements of the Working Families Student Fee  
            and Accountability Act.


          2)Authorizes the rescinding in the annual Budget Act of a  
            tuition increase to California resident students adopted by  
            the Trustees or the Regents.


          3)Requires UC, as a condition of receiving state funds, to  
            comply with the Act. 


          FISCAL EFFECT:


          Failure to comply with the Student Fee Act or rescission by the  
          Legislature of an enacted UC or CSU tuition increase will create  
          some combination of significant General Fund cost pressure, to  
          backfill the system's lost tuition revenue with state funds, and  
          requiring UC or CSU to raise other revenues, such as through  
          increases in nonresident fees and/or enrollment, and/or to  
          reduce operating costs, such as through reducing resident  
          enrollment or other cost elements.


          COMMENTS:


          1)Background. Student fees and state General Fund support work  
            interchangeably to fund the core instructional missions of the  
            segments. The state's portion essentially subsidizes the  
            amount paid by students in the form of fees. Because of this  
            link, fees have risen steeply during difficult budget  
            years-generally also years where a down-economy makes it more  








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            challenging for some students and families that do not receive  
            Cal Grants and thus have to pay for the increases-and then  
            declined when state support could be provided to the segments.


          2)Student Fee Act. AB 970 (Fong)/Chapter 620, Statutes of 2012,  
            established the Student Fee Act to require UC and CSU follow  
            certain requirements when approving student fee increases for  
            resident students, specifically:


             a)   Follow prescribed public notice and student consultation  
               procedures before adopting an increase;


             b)   Develop a list of factors to consider when recommending  
               a fee increase;


             c)   Provide the Legislature annual reports on tuition and  
               fees, financial aid, and total cost of attendance.  


             d)   The Legislative Analyst's Office (LAO) is required to  
               report on CSU and UC compliance with the Act.


            On March 25, 2015, the LAO released its annual report  
            regarding UC and CSU compliance with the Act.  LAO found that  
            CSU has not increased resident mandatory systemwide charges in  
            the past year and therefore was not required to follow any  
            consultation or notification procedures required by existing  
            law. UC, on the other hand, was deemed by LAO to be not in  
            compliance with most of the provisions of the law. According  
            to the LAO, UC reported it is not legally obligated to comply  
            with the law because of its constitutional autonomy.


          3)Purpose. This bill requires compliance with the Student Fee  








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            Act as a condition to CSU or UC increasing resident tuition,  
            and provides for legislative rescission of a tuition increase  
            through the Budget Act. Given UC's claim of exemption from the  
            Act, the bill conditions their receipt of state funds on  
            compliance with the Act.


          Analysis Prepared by:Chuck Nicol / APPR. / (916)  
          319-2081