BILL ANALYSIS                                                                                                                                                                                                    Ó






           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                       AB 1307|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 


                                   THIRD READING 


          Bill No:  AB 1307
          Author:   McCarty (D) and Medina (D)
          Amended:  8/18/15 in Senate
          Vote:     21  

           SENATE EDUCATION COMMITTEE:  8-0, 7/15/15
           AYES:  Liu, Runner, Block, Hancock, Leyva, Mendoza, Monning,  
            Pan
           NO VOTE RECORDED:  Vidak

          SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  52-25, 6/3/15 - See last page for vote

           SUBJECT:   Working Families Student Fee Transparency and  
                     Accountability Act


          SOURCE:    Author

          DIGEST:   This bill, requires, in lieu of encouraging, the  
          University of California (UC) and the California State  
          University (CSU) to follow specified notification and  
          consultation timeframes for approving and implementing student  
          fee increases, and urges the segments to continue to set aside a  
          portion of fee increase revenues for institutional aid to assist  
          resident students thereby excluding non-resident students. 

          ANALYSIS:
          
          Existing law: 

          1)Provides that statutes related to UC (and most other aspects  








                                                                    AB 1307  
                                                                    Page  2


            of the governance and operation of UC) are applicable only to  
            the extent that the Regents of UC make such provisions  
            applicable.  (Education Code § 67400)

          2)Confers upon the Trustees of the CSU the powers, duties, and  
            functions with respect to the management, administration, and  
            control of the CSU system. 
          3)(EC § 66066)

          4)States that under the Working Families Student Fee  
            Transparency and Accountability Act (Act), UC and CSU follow  
            specific notice, consultation, and timeframe requirements when  
            approving student fee increases.  (EC § 66028 - 66028.6)  

          This bill requires, in lieu of encouraging, the UC and the CSU  
          to follow specified notification and consultation timeframes for  
          approving and implementing student fee increases, and urges the  
          segments to continue to set aside a portion of fee increase  
          revenues for institutional aid. Specifically, this bill:

          1)Requires, instead of encourages, all of the following:

             a)   As changes in mandatory systemwide fees and financial  
               aid are being considered, the impact of these changes to be  
               explained to students.

             b)   Students be consulted via the appropriate statewide  
               student body associations before increases on mandatory  
               systemwide fees are proposed.

             c)   Adequate advance notice to be provided to students  
               regarding future mandatory systemwide fees.

             d)   All current and prospective students to be provided  
               timely information related to student financial aid.

             e)   The state's public colleges and universities ensure  
               transparency in the uses of mandatory system wide fee  
               revenue and the rationale for implementing mandatory  
               systemwide fee increases. 

          1)Urges the CSU Board of Trustees and the UC Board of Regents to  
            maintain their commitment to institutional financial aid  
            programs by ensuring at least 33% of fee increase revenues  







                                                                    AB 1307  
                                                                    Page  3


            charged to resident students are set aside to assist resident  
            students and thereby excluding non-resident students from  
            receiving that benefit. 
            
          Comments
          
          1)Need for the bill. Under the Act, UC and CSU must follow  
            specific notice, consultation, and timeframe requirements when  
            approving student fee increases. According to the author in  
            November 2014, the UC Board of Regents passed a 5% per year  
            increase for a five-year period beginning with the 2015-16  
            academic year. The author notes, with the passage of this fee  
            increase, the UC was non-compliant with several statutory  
            provisions regarding public notice and transparency of  
            proposed fee increases established by existing law. 

            This bill seeks to ensure that the UC and CSU adhere to  
            notification and consultation timeframes for increase student  
            fees.

          2)Related Legislative Analyst Office (LAO) report.  In March  
            2015, the LAO found UC to be non-complaint with several  
            provisions under the Act including: (a) most notification and  
            consultation procedures and; (b) developing a tuition and fee  
            policy that includes a list of factors taken into account when  
            considering an increase. UC did comply with the reporting  
            provisions by publishing expenditure information and  
            submitting the required institutional financial aid reports.  
            According to the report, UC believes it is not legally  
            obligated to comply because of its constitutional autonomy. To  
            note, CSU had not increased mandatory systemwide fees;  
            therefore, was not required to follow consultation or  
            notification procedures. The report found CSU also complied  
            with all other provisions. 

          3)Fee history.  The Maddy-Dills Act previously required fees to  
            be: (a) gradual; moderate and predictable; (b) limited fee  
            increases to not more than 10% a year, and (c) fixed at least  
            ten months prior to the fall term in which they were to become  
            effective. The policy also required sufficient financial aid  
            to offset fee increases. However, even with this policy, when  
            the state faced serious budgetary challenges the statute was  
            "in-lieued" in order to provide the institutions some  
            flexibility in dealing with the lack of state General Fund  







                                                                    AB 1307  
                                                                    Page  4


            support. The Maddy-Dills Act sunset in 1996 and since then,  
            the state has had no long-term policy regarding the way in  
            which mandatory student fees are determined. 

            Historically, fees have fluctuated in response to the state's  
            fiscal condition and the stated needs of UC and CSU, as  
            negotiated in the budget deliberations. These conditions have  
            triggered mid-year fee increases in the past. This bill seeks  
            to provide students adequate advance notice regarding  
            increases to systemwide fees. 

          4)Related budget activity.  SB 97 (Committee on Budget and  
            Fiscal Review, Chapter 11, Statutes of 2015) among other  
            things, states legislative findings relative to the UC Regents  
            endorsing the framework for long-term funding agreed to by the  
            Governor and the UC President. The agreement freezes tuition  
            in the 2015-16 and 2016-17 academic years, and specifies that  
            the UC will implement reforms to reduce the cost structure and  
            improve access, quality, and outcomes. The reforms included in  
            the framework endorsed by the Regents are intended to create  
            capacity for all campuses of the university to serve more  
            resident students, including by using funds and existing  
            resources that can be redirected to higher priorities, such as  
            those currently being used to provide financial aid to  
            nonresident students are also available to enable more  
            residents students to enter the university at all campuses. 

            Consistent with these legislative findings, this bill  
            encourages, the 33% set-aside for institutional student aid  
            must be used to assist "resident students," in lieu of  
            "students," and thereby excluding non-resident students from  
            receiving those benefits.

          5)Return-to-aid.  For many years, UC and CSU have generally  
            returned 33% of student fee increases to institutional aid  
            programs. At CSU, the grant program is known as the State  
            University Grant (SUG).  According to CSU, despite losing  
            one-third of state funding during the recent economic downturn  
            the system maintained its commitment to the SUG program and  
            has done so for more than two decades. 

          Prior Legislation
          
          SB 1461 (Negrete-Mcleod, 2012), as amended by the Senate  







                                                                    AB 1307  
                                                                    Page  5


          Education Committee, would have limited the amount by which the  
          CSU Board of Trustees could increase the mandatory systemwide  
          fees for resident undergraduate students, in a given year, and  
          would have requested the Regents of the UC adhere to the same  
          limit. SB 1461 passed out of the Senate Education Committee by a  
          vote of 8-0 in April 2012, but was subsequently held under  
          submission in the Senate Appropriations Committee. 

          SB 969 (Liu, 2010) would have placed an upper limit on mandatory  
          systemwide student fees, not to exceed a fixed percentage of the  
          cost of education as defined, and would have prohibited annual  
          mandatory systemwide fee increases from increasing by more than  
          the implicit price deflator for state and local government for  
          goods and services. This version of SB 969 combined elements of  
          SB 969 (Florez) and SB 1199 (Liu, 2010). The bill was passed by  
          the Senate Education Committee by a vote of 8-0, but was  
          subsequently held on suspense in the Assembly Appropriations  
          Committee. 

          SB 969 (Florez, 2010) would have placed an upper limit on  
          mandatory systemwide student fees, not to exceed a fixed  
          percentage of the cost of education, as defined, would have  
          prohibited student fees from ever increasing beyond the amount a  
          student paid at the time of enrollment, and would have  
          prohibited annual mandatory systemwide fee increases for each  
          new cohort of undergraduate students at the UC, CSU, and  
          California Community Colleges from exceeding five percent of the  
          preceding academic year. The bill's provisions were combined  
          with those of SB 1199. The combined version was subsequently  
          authored by Senator Liu.  

          SB 1199 (Liu, 2010) would have required the governing boards of  
          the UC and CSU to develop student fee increase methodologies  
          consistent with specified direction, and would have included  
          many of the same concepts found in SB 969. The bill's provisions  
          were combined with those of SB 969 and the hearing was canceled  
          at the request of the author.

          SCA 26 (Denham, 2010) would have amended the State Constitution  
          and would have imposed upon the UC a waiting period of 180 days  
          before mandatory student fees could take effect and would have  
          limited annual fee increases to no more than a cumulative 10%  
          over the preceding academic year. SCA 26 failed passage in the  
          Senate Education Committee by a vote of 2-2.







                                                                    AB 1307  
                                                                    Page  6



          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          SUPPORT:   (Verified8/25/15)


          American Federation of State, County and Municipal Employees
          California Faculty Association 
          California State Student Association
          University of California Student Association 



          OPPOSITION:   (Verified8/25/15)


          University of California
           

          ASSEMBLY FLOOR:  52-25, 6/3/15
          AYES:  Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon,  
            Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd,  
            Eggman, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,  
            Gonzalez, Gordon, Gray, Hadley, Roger Hernández, Holden,  
            Irwin, Jones-Sawyer, Levine, Linder, Lopez, Low, McCarty,  
            Medina, Mullin, Nazarian, O'Donnell, Patterson, Perea, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Ting,  
            Weber, Williams, Wood, Atkins
          NOES:  Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,  
            Chávez, Dahle, Beth Gaines, Gallagher, Grove, Harper, Jones,  
            Kim, Lackey, Maienschein, Mathis, Mayes, Melendez, Obernolte,  
            Olsen, Steinorth, Wagner, Waldron, Wilk
          NO VOTE RECORDED:  Frazier, Quirk, Thurmond

          Prepared by:Olgalilia Ramirez / ED. / (916) 651-4105
          8/26/15 16:50:41


                                   ****  END  ****


          







                                                                    AB 1307  
                                                                    Page  7