BILL ANALYSIS Ó SB 42 Page 1 SENATE THIRD READING SB 42 (Liu) As Amended August 31, 2015 Majority vote SENATE VOTE: 38-1 ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Higher |11-2 |Medina, Baker, Bloom, |Chávez, Levine | |Education | |Harper, Irwin, | | | | |Jones-Sawyer, Linder, | | | | |Low, Santiago, Weber, | | | | |Williams | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |12-0 |Gomez, Bloom, Bonta, | | | | |Calderon, Nazarian, | | | | |Eggman, Eduardo | | | | |Garcia, Holden, | | | | |Quirk, Rendon, Weber, | | | | |Wood | | | | | | | | | | | | ------------------------------------------------------------------ SB 42 Page 2 SUMMARY: Establishes the Office of Higher Education Performance and Accountability (OHEPA) to provide statewide postsecondary education planning and coordination. Specifically, this bill: 1)Establishes OHEPA as the statewide postsecondary education coordination and planning entity within the Governor's office and under the direct control of an Executive Director (Director) appointed by the Governor and subject to Senate confirmation. 2)Provides that the Director is responsible for all duties, powers, and responsibilities vested in OHEPA, including contracting for relevant professional or consultant services. The Director is required to appoint any staff positions authorized by the Governor. 3)Establishes an Advisory Board to OHEPA, subject to open meetings requirements and meeting at least quarterly, for the purpose of reviewing and commenting on any recommendations made by OHEPA to the Governor and the Legislature, developing an annual report on the condition of California higher education, issuing an annual performance review of the Director. Provides that the Advisory Board members shall serve without compensation, except reimbursement for expenses. Establishes the Advisory Board membership as follows: a) Three members with experience in postsecondary education appointed by the Senate Rules Committee; b) Three members with experience in postsecondary education appointed by the Speaker of the Assembly; and, SB 42 Page 3 c) The chair of the Senate Education Committee and the chair of the Assembly Higher Education Committee to serve as ex officio members. 4)Requires OHEPA to actively seek input from and consult with the advisory board and higher education segments and stakeholders, as appropriate, in the conduct of its duties and responsibilities. 5)Establishes OHEPA for the purpose of advising the Governor, the Legislature and other appropriate government officials and institutions of postsecondary education, and specifically requires OHEPA to conduct all of the following: a) Inform the identification and periodic revision of state goals and priorities for higher education in a manner that is consistent with the goals, and taking into consideration the metrics, outlined in existing law. OHEPA is required to biennially interpret and evaluate both statewide and institutional performance in relation to these goals and priorities. b) Review and make recommendations, as necessary, regarding cross-segmental and interagency initiatives and programs in areas that may include efficiencies and instructional delivery, financial aid, transfer, and workforce coordination; c) Advise the Legislature and the Governor regarding the need for, and location of, new institutions and campuses of public higher education; d) Review proposals by the public segments for new SB 42 Page 4 programs, the priorities that guide them, and the degree of coordination with nearby public, independent, and private postsecondary educational institutions, and make recommendations regarding those proposals to the Legislature and the Governor; e) Act as a clearinghouse for postsecondary education information and as a primary source of information for the Legislature, the Governor, and other agencies, and develop and maintain a comprehensive database. f) Review proposals for changes in eligibility pools for admission to public institutions and segments of postsecondary education, and make recommendations to the Legislature, the Governor, and institutions of postsecondary education. Provides that OHEPA shall periodically study the percentages of California public high school graduates estimated to be eligible for admission to the California State University (CSU) and the University of California (UC); g) Through its use of information and its analytic capacity, inform the identification and periodic revision of state goals and priorities for higher education in a manner that is consistent with the goals outlined in Education Code (EDC) Section 66010.91 and the metrics outlined in EDC Sections 89295 and 92675. Requires OHEPA to biennially interpret and evaluate both statewide and institutional performance in relation to these goals and priorities; h) Submit reports to the Legislature, as specified; i) Manage data systems and maintain programmatic, policy, SB 42 Page 5 and fiscal expertise to receive and aggregate information reported by the institutions of higher education in this state; and, j) Review public segments' proposals to change eligibility pools, and periodically studying the percentages of California public high school graduates eligible for admission to the UC and the CSU. The first eligibility study shall be conducted, as specified, and the results reported to the Legislature and the Governor by December 1, 2017. 6)Provides that on or before December 31 of each year, OHEPA shall report to the Legislature and the Governor regarding its progress in achieving the aforementioned objectives and responsibilities. 7)Provides that on or before January 1, 2020, the LAO shall review and report to the Legislature regarding the performance of the office in fulfilling its functions and responsibilities. 8)Sunsets the law on January 1, 2021. EXISTING LAW establishes the California Postsecondary Education Commission (CPEC) composed of 17 members representing the higher education segments, the State Board of Education, and nine representatives appointed by the Governor, Senate Rules Committee, and Assembly Speaker to coordinate public, independent, and private postsecondary education in California. (Education Code Section 66900 et. seq.) FISCAL EFFECT: According to the Assembly Appropriations SB 42 Page 6 Committee: 1)In its last full year of operation, CPEC's General Fund operating budget was $1.9 million for the equivalent of 18 positions. The new office established in this bill would likely have a somewhat smaller budget. In addition, the office would incur one-time information technology costs and other start-up costs in the low hundreds of thousands of dollar. 2)One-time General Fund costs for the eligibility study would be around $2 million. 3)The three public higher education segments will incur the following costs to work with the new office and to respond to data requests: a) UC. Ongoing costs of $50,000 for one-half position. b) CSU. Ongoing costs of $110,000 for one position. c) CCC. Estimates ongoing costs of up to $440,000 for four positions, based on prior workload demands involving CPEC. COMMENTS: Background on CPEC. As previously outlined, CPEC was established to coordinate postsecondary education in California and to provide independent policy analyses and recommendations to the Legislature and the Governor on postsecondary education issues. However, CPEC's budget and responsibilities were reduced over time, casting doubt on its effectiveness and triggering calls for its restructuring. In the 2011-12 Budget Act, Governor Brown vetoed funding for CPEC citing the agency's SB 42 Page 7 ineffectiveness in higher education oversight. In his veto message, the Governor acknowledged the well-established need for coordinating and guiding state higher education policy and requested that stakeholders explore alternative ways these functions could be fulfilled. CPEC shut down in fall 2011, transferring its federal Teacher Quality Improvement grant program to the California Department of Education (CDE) and extensive data resources to the California Community Colleges (CCC) Chancellor's Office. There is currently no coordinating entity for higher education in California. Establishing goals and accountability in the absence of CPEC. The National Commission on Accountability in Higher Education, in a report published in 2005, concluded that "real improvement in higher education will come when accountability in higher education provides for explicit shared goals, progress in achieving these goals is measured, and work to improve performance is motivated and guided." Statewide higher education goals and objectives have been considered by the Legislature for over a decade; in recent years, despite the absence of CPEC, some progress has been made on this front. The 2013-14 Budget Act education trailer bill [AB 94 (Budget Committee), Chapter 50, Statutes of 2013] required CSU and UC to report annually on specified performance measures, in order to inform budget and policy decisions and promote effective and efficient use of resources. SB 195 (Liu), Chapter 367, Statutes of 2013, established general statewide goals for higher education, and Legislative intent to identify specific metrics for measuring progress toward statewide goals. The 2014-15 Budget Act [SB 852 (Leno), Chapter 25, Statutes of 2014] required UC and CSU to approve three-year "sustainability plans" that use funding projections to establish projections of enrollment and the university's goals for the performance measures that are required to be adopted pursuant to AB 94; this requirement was continued in the 2015-16 Budget Act. CCCs were required, pursuant to the 2014-15 Budget higher education SB 42 Page 8 trailer bill [SB 860 (Budget and Fiscal Review Committee), Chapter 34, Statutes of 2014], to adopt goals and targets for student performance by June 30, 2015, and to establish and report on Student Equity Plans designed to ensure equal educational opportunities and to promote student success for all students. Purpose of this bill. According to the author, this bill represents the next necessary step towards a higher education performance and accountability structure by creating the OHEPA to serve as the statewide postsecondary coordination and planning agency to steward the public higher education agenda. According to the author, there is no specific statewide entity charged with leading the conversation around the state's higher education goals and the performance and accountability of the public higher education segments. According to the author, in order for the state to improve student access and success, and to align degrees and credentials with workforce needs, an integrated and data-driven coordination structure is necessary. Analysis Prepared by: Laura Metune / HIGHER ED. / (916) 319-3960 FN: 0001711 SB 42 Page 9