BILL ANALYSIS
AB 1413
Page 1
Date of Hearing: April 17, 2007
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Anthony Portantino, Chair
AB 1413 (Portantino) - As Introduced: February 23, 2007
SUBJECT : Public postsecondary education: California State
University: trustees
SUMMARY : Makes numerous changes to the California State
University (CSU) Board of Trustees (BOT) to improve
communications between the CSU Trustees and the Legislature.
Specifically, this bill :
1)Expresses legislative intent that CSU Trustees be held to
appropriate ethical standards relating to any conflict of
interest between the private interests of each member and the
business of CSU and to enact legislation if, after further
review, the Legislature believes it necessary.
2)Allows ex-officio members of CSU BOT to designate a person to
attend board meetings in his or her absence and to act on his
or her behalf at those meetings.
3)Adds an appointee of the Speaker of the Assembly and an
appointee of the Senate Rules Committee for two-year terms to
the CSU BOT.
4)Prohibits the CSU Trustees, on and after January 1, 2008, from
approving a contract for the hiring of an executive officer
unless that contract and its terms are adopted, by resolution,
in a duly noticed meeting of the board.
5)Requires that, to the extent the CSU Trustees approve
transition pay for executive officers who are ceasing to
perform their regular duties, transition pay cannot exceed the
compensation received by the executive officer in the last
year of regular duties and can only be paid for actual duties
performed.
6)Provides that, when the CSU Trustees approve executive
compensation in the form of trustee professorships at the time
an executive officer ceases to perform his or her regular
duties, this compensation cannot exceed the amount a full CSU
professor would be paid for a similar teaching assignment.
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7)Requires the California Postsecondary Education Commission
(CPEC) to report annually to the Legislature and the Governor
on expenditures related to instruction, student services and
administration within the University of California, CSU and
the California Community Colleges as follows:
a) On or before March 15, 2008, CPEC shall appoint a
committee to advise on the reporting responsibilities in
this section, composed of representatives of each system,
including at least one person designated as a manager or
executive, one faculty bargaining representative, one
additional faculty member and one student, as well as a
representative from the Legislative Analyst's Office (LAO)
and the Department of Finance (DOF) and other members as
deemed appropriate by CPEC, with terms set by CPEC.
b) On or before January 1, 2009, CPEC shall issue an
initial report to the Legislature and the Governor that
shall do both of the following:
i) Provide definitions and details of categories of
expenditures in each system related to instruction and
instructionally related expenditures; student support
service expenditures, administration other than
instruction and student support services; all other
expenditures; and,
ii) Report the total itemized expenditures of each
system in each of these newly defined expenditure
categories for the 2006-07 and 2007-08 academic years.
c) On or before January 1, 2010, and on or before January
10, of each subsequent year, CPEC shall provide reports to
the Legislature and the Governor that shall accomplish both
of the following:
i) Report the total itemized expenditures of each
system in each of the defined expenditure categories for
the immediately preceding academic year, both in absolute
and relative terms; and,
ii) Report on any changes in reporting expenditures that
affect these categories and make adjustments in such a
manner that the Legislature and the Governor may compare
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spending on comparable items from year to year.
8)Provide the Legislature and the Governor on or before January
1, 2009, and annually thereafter, a comprehensive review of
compensation policies for faculty, administrators and
executives within California higher education in order to
achieve transparency and accountability in the compensation
process that shall:
a) Take into account and comment upon the competitive
marketplace for recruitment and retention of outstanding
faculty, administrators and executives;
b) Review all compensation and benefits provided, to the
extent that these data are available, and comment on the
nature of compensation and benefits for which data cannot
be obtained and the reasons for which these data are not
available;
c) Provide data on compensation in comparison to
appropriate institutions of like size, mission and control;
and,
d) Undertake this review with the consultation of an
advisory committee to be appointed by March 15, 2008, that
shall include representatives of each system, including at
least one person designated as a manager or executive, one
faculty bargaining representative, one additional faculty
member and one student, as well as a representative from
the LAO and DOF and other members as deemed appropriate by
CPEC, with terms set by CPEC.
EXISTING LAW :
1)Establishes CSU under the administration of the BOT, which is
composed of 25 members, including:
a) Five (5) ex-officio members: the Governor, Lieutenant
Governor, Superintendent of Public Instruction, Speaker of
the Assembly, and CSU Chancellor;
b) A representative from the alumni associations selected
for a two-year term by the alumni council, who cannot be a
CSU employee during his or her term;
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c) Sixteen (16) members appointed by the Governor, subject
to confirmation of 2/3 of the membership of the Senate, to
eight-year terms;
d) Two (2) CSU students appointed by the Governor for
staggered, two-year terms from a list of nominees furnished
by the governing board of any statewide student
organization that represents the CSU students and the
student body organizations of the CSU campuses. Only one
student is eligible to vote at any time; and,
e) A tenured CSU faculty member appointed by the Governor
for a two-year term from a list of names of at least two
persons furnished by the CSU Academic Senate. The faculty
member cannot serve on any subcommittees of the board
responsible for collective bargaining.
2)Authorizes the CSU Trustees to elect a chief executive officer
for CSU, known as the Chancellor, to employ other officers and
employees and to delegate powers and responsibilities to these
individuals.
FISCAL EFFECT : Unknown
COMMENTS : Background : In July 2006, the San Francisco
Chronicle published a series of articles about transition
compensation provided to former CSU executives who were leaving
their positions, revealing previously secret compensation
packages that included transition pay, professorships and
special benefits. Specifically, the articles revealed that
executives were frequently granted transition pay as part of the
CSU Executive Transition Program, allowing a full year's pay
without specified duties. Several executives had begun other
full-time positions and still received CSU transition pay.
Executives were also provided "trustee professorships," although
some executives apparently did not assume teaching duties while
receiving this pay. Finally, these transition pay benefits were
not disclosed in public session and were not approved by the CSU
BOT.
Three-part legislative initiative : There are three Assembly
efforts to address these issues:
1)A request to the Joint Legislative Audit Committee to direct
the Bureau of State Audits to review CSU executive
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compensation.
2)Action by the Assembly Budget Subcommittee on Education
Finance regarding CSU executive compensation for 2007-08.
3)Legislation (this bill) seeking permanent reforms to improve
communication between the CSU BOT and state policymakers,
revise CSU transition pay policies and develop data on
instruction and administration activities to set baseline
standards for future policy deliberations.
Reforms adopted by CSU Trustees : At the time the articles were
published, CSU's executive compensation program for departing
campus presidents and other executives, called the Executive
Transition Program, entitled executives to one paid transition
year after leaving office as part of the executive's employment
agreement. The salary formula was the midpoint between the
executive's salary and the 12-month full professor salary range
maximum. The CSU BOT did not need to approve transition
agreements because they were considered part of the executive's
employment agreement approved by the CSU BOT. This policy was
adopted by the BOT in 1992 and modified in 1997.
In November 2006, the CSU BOT adopted changes to its executive
compensation program, limiting eligibility to those former
campus presidents and executives who intend to return to an
identified position with the CSU. In addition, executives will
not be eligible for compensation under the revised program if
they retire or if they are receiving any non-CSU income.
Need for the bill : According to the author, the reforms adopted
by CSU are an important first step but further change is needed
to address excessive and secret executive compensation and to
build better communication between the Legislature and the CSU
Trustees. In addition, the Legislature and the public need
better information on expenditures in public institutions to
ensure that student learning is the top priority.
The author states that CSU must pay competitive salaries and
benefits to retain talented administrators. However, as a
public institution, it must also disclose those benefits and
account for its resources. Policymakers need more information
regarding the ratio of funding between instruction,
administration, student support and other major activities,
which may set baseline standards for future policy deliberations
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for all segments of public higher education. Finally, most
ex-officio CSU Trustees have duties that preclude them from
regularly attending meetings of the CSU BOT. A designee will
provide an opportunity for ex-officio members to engage in
meetings via a designee and improve governance relationships
between CSU and key state policymakers.
Related legislation : SB 190 (Yee), pending in the Senate, would
make all meetings of the CSU Trustees subject to the
Bagley-Keene Act.
REGISTERED SUPPORT / OPPOSITION :
Support
California Faculty Association (sponsor)
State Employee's Trade Council
The Greenlining Institute
Opposition
None on file.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960