BILL ANALYSIS Ó
AB 1370
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ASSEMBLY THIRD READING
AB
1370 (Medina and Beth Gaines)
As Amended June 1, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+----------------------+--------------------|
|Higher |11-0 |Medina, Baker, Bloom, | |
|Education | |Chávez, Harper, | |
| | |Levine, Linder, Low, | |
| | |Santiago, Weber, | |
| | |Williams | |
| | | | |
|----------------+------+----------------------+--------------------|
|Appropriations |12-0 |Gomez, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, Eduardo | |
| | |Garcia, Gordon, | |
| | |Holden, Quirk, | |
| | |Rendon, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Revises provisions governing the nonresident tuition at
the University of California (UC). Specifically, this bill:
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1)Prohibits the number of undergraduate nonresident students
enrolled at any UC campus from exceeding the number enrolled in
the 2015-16 academic year.
2)Requires UC, by the 2018-19 academic year and each academic year
thereafter, not less than 50% of the revenues in excess of the
marginal cost of instruction, generated from undergraduate
nonresident enrollment, be directed to fund increased enrollment
of undergraduate resident students across all campuses with
undergraduate students.
3)Requires UC to annually publish an annual report that includes
the amount of revenues generated by undergraduate nonresident
enrollment at each campus, the method by which the revenues were
distributed among the campuses of the university, and, for each
campus, the purposes for which these revenues were expended,
including the number of California resident undergraduate
students admitted.
EXISTING LAW:
1)Requires that a student classified as a nonresident pay
nonresident tuition. Current law authorizes both the UC and the
California State University to establish nonresident student
tuition policies and methodologies to be developed by each
institution's governing body. The annual fee rate is prohibited
from falling below the marginal cost of instruction and the
rates at comparison institutions, as identified by the
California Postsecondary Education Commission, must be
considered. (Education Code Sections 68050-68052)
2)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
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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)
FISCAL EFFECT: According to the Assembly Appropriations
Committee, based on the current enrollment of 25,000 nonresident
undergraduates, the requirement to reallocate 50% of revenue
generated from these students above the marginal cost of
instruction (assumed as $6,500 per student) would result in a
redirection of $160 million, within UC's core funding of almost
$6.3 billion, to fund resident undergraduate enrollment growth
beginning by 2018-19. Assuming a marginal state cost of $10,000
per student, this would fund enrollment of an additional 16,000
resident undergraduates, for an almost 9% increase in
undergraduate enrollment by 2018-19.
COMMENTS: Purpose of this bill. According to the author, the
California Constitution establishes UC as a public institution;
annually, over $3 billion in California taxpayer funds are
provided to support UC's teaching, research, and public service
mission. However, evidence suggests that the way in which UC
enrolls and uses funds generated by nonresident students could be
undermining the UC's public mission.
The author notes that during California's recession and resulting
state budget cuts, UC increasingly relied on tuition (and
nonresident students, in particular, who pay an additional $23,000
in tuition) to meet revenue needs. From 2007-08 to 2013-14 the
number of nonresident undergraduates grew from 7,103 to 20,073.
In 2000, 90% of freshman at UC Berkeley came from California. By
2012, the proportion dropped to 71%. At UC Los Angeles (UCLA),
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the percentage of California residents dropped 23%, to 72% in
2012.
According to the author, UC argues that admitting nonresident
students has allowed the system to enroll about 7,500 California
students for which the state has not provided funding. However,
UC allows tuition revenues generated by nonresident students to be
kept by the campus in which the student enrolls. As the author
points out, according to UC's own records, the majority of
"unfunded students" are attending campuses with very low
nonresident enrollment. In fact, in 2013, UCLA, with 19.2%
nonresidents, was only serving 191 California residents for which
it was not funded. UC Berkeley, with 21.2% nonresidents, was
serving 332 fewer California students than it was funded to serve.
UC Riverside, on the other hand, served 1,871 unfunded
Californians, but enrolled only 448 nonresidents.
The author points to UC's recent indication that, for the 2015-16
academic year, it will be capping the number of in-state
enrollments at current levels pending the outcome of budget
negotiations. While UC has indicated it will cap nonresidents at
UCLA and UC Berkeley, it will continue to enroll nonresident
students at other campuses during this time. According to the
author, this means that UC-qualified California students will be
wait-listed and potentially turned away, while nonresident
students are provided access to the system.
Funding directed toward California resident access. This bill
would require at least 50% of the revenue generated from
undergraduate nonresident enrollment, in excess of the cost of
instruction, to be used to support enrollment of resident
students. According to the Subcommittee, which heard issues
surrounding UC enrollment at a hearing on April 21, 2015, the data
reveal that rising admission and enrollment of nonresident
students has coincided with decreasing admission and enrollment of
Californians at many UC, particularly flagship, campuses. The
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Subcommittee analysis notes that, in a paper published in October
2014 called "Tuition Rich, Mission Poor: Nonresident enrollment
and the changing proportions of low-income and underrepresented
minority students and public research universities," professors at
the University of Arizona, University of Missouri, and University
of Michigan studied enrollment trends at public research
universities across the country - including UC - and reported that
"nonresident enrollment growth may have negative consequences for
access" to low-income and underrepresented students. The intent
of the author is to ensure that campuses enrolling additional
California students benefit from revenues generated by nonresident
enrollment.
Analysis Prepared by:
Laura Metune / HIGHER ED. / (916) 319-3960 FN:
0000765