BILL ANALYSIS Ó
AB 1317
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ASSEMBLY THIRD READING
AB
1317 (Salas)
As Amended June 1, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+---------------------+---------------------|
|Higher |13-0 |Medina, Baker, | |
|Education | |Bloom, Chávez, | |
| | |Harper, Irwin, | |
| | | | |
| | | | |
| | |Jones-Sawyer, | |
| | |Levine, Linder, Low, | |
| | |Santiago, Weber, | |
| | |Williams | |
| | | | |
|----------------+------+---------------------+---------------------|
|Appropriations |14-1 |Gomez, Bonta, |Bigelow |
| | |Calderon, Chang, | |
| | |Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Gordon, | |
| | |Holden, Quirk, | |
| | |Rendon, Weber, Wood | |
| | | | |
| | | | |
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AB 1317
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SUMMARY: Establishes requirements regarding executive
compensation increases at the University of California (UC).
Specifically, this bill:
1)Finds and declares all of the following:
a) On November 19, 2014, the UC Regents voted on a "five-year
stability plan," which establishes annual tuition and student
fee increases of up to 5% per year for both undergraduate and
graduate students, with increase levels contingent on state
funding;
b) While increasing tuition costs for students, the regents
also approved compensation increases of up to 20% for several
chancellors and executives;
c) As a public institution designed to serve students, the UC
has a responsibility to keep education accessible and
affordable and to prioritize student needs over executive
pay; and,
d) The State of California has an interest in holding UC
accountable and maintaining affordability in higher
education.
2)Requests the UC Regents refrain from increasing the compensation
of any executive officer when the amount of mandatory system
wide student fees and tuition of the university has been
increased at any time in the immediately preceding two years.
3)Defines "executive officer" to include, but not be limited to,
the President of the UC, a chancellor, a vice chancellor, an
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executive vice chancellor, the general counsel, and the regents
secretary.
4)Applies the aforementioned restriction only to executive
officers that enter into or renew contracts for employment on or
after January 1, 2016.
EXISTING LAW:
1)Establishes UC as a public trust and confers the full powers of
the UC upon the UC Regents. The Constitution establishes that
the UC is subject to legislative control only to the degree
necessary to ensure the security of its funds and compliance
with the terms of its endowments. Judicial decisions have held
that there are three additional areas in which there may be
limited legislative intrusion into university operations:
authority over the appropriation of state moneys; exercise of
the general police power to provide for the public health,
safety and welfare; and, legislation on matters of general
statewide concern not involving internal university affairs.
(Constitution of California Article IX, Section 9)
2)Declares the Legislature's intent that no proposal relating to
the salary, benefits, perquisite, severance payments (except in
the case of a dismissal or litigation settlement), retirement
benefits or any other form of compensation paid to an officer of
the UC become effective unless specified notice requirements
have been met and action taken in an open session meeting of the
regents. (Education Code Section 92032.5)
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill's restrictions on compensation will, to some
indeterminable degree, increase turnover in executive positions at
UC as individuals leave for more favorable compensation prospects.
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Though this bill applies to specifically named positions, it is
not limited to those positions. UC will incur significant
additional costs associated with filling additional vacancies
including the search firm, travel expenses, relocation expenses,
and interim's salary.
The above costs will be partially offset by savings from the
compensation limitations provided for in the bill.
COMMENTS: In May of 2006, the Bureau of State Audits (BSA)
released an audit (Report 2006-103) reviewing UC compensation
practices and finding that stricter oversight and greater
transparency were needed to improve practices. The BSA's
recommendations included improving use of the Corporate Personnel
System to track employee compensation, tracking approved
exceptions to UC compensation policies and identifying
unauthorized exceptions to policies, and requiring highly paid
university employees to disclose all forms of compensation. In
response to issues raised by audits and management reviews,
legislative hearings, and media reports, UC enacted several
reforms to improve transparency and accountability regarding
compensation practices. These reforms include providing an annual
report to the Legislature on senior management compensation and
reform efforts, annually auditing senior management compensation,
establishing new policies governing oversight and market
appropriateness of senior management compensation, expanding
public disclosure of salaries, and establishing comprehensive and
ongoing review of compensation-related policies.
Analysis Prepared by:
Laura Metune / HIGHER ED. / (916) 319-3960 FN:
0000763
AB 1317
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