BILL ANALYSIS �
AB 970
Page 1
ASSEMBLY THIRD READING
AB 970 (Fong and Block)
As Amended January 26, 2012
Majority vote
HIGHER EDUCATION 8-0 APPROPRIATIONS 12-2
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|Ayes:|Block, Achadjian, |Ayes:|Fuentes, Blumenfield, |
| |Brownley, Fong, Galgiani, | |Bradford, Charles |
| |Lara, Miller, Portantino | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Donnelly, Norby |
| | | | |
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SUMMARY : Establishes requirements and timeframes for the
University of California (UC) and the California State
University (CSU) regarding the approval and implementation of
student fee increases, and requires the segments to report
annually on their use of student fee revenues. Specifically,
this bill :
1)Requires the UC Regents and the CSU Trustees, at least 90 days
prior to providing public notice of a proposed mandatory
systemwide fee increase, to consult with the appropriate
student representatives of their respective statewide student
organizations.
2)Requires a public notice of a proposed fee increase to be
included in a noticed public agenda of the regent's and
trustee's, respectively, as defined.
3)Prohibits adoption of a fee increase prior to at least 60 days
following issuance of the notice per 2) above, and requires
the governing bodies, during this time period, to solicit and
receive public comments, which, along with appropriate
responses to each comment, are to be made available to the
public at least 10 days prior to the meeting where the regents
or trustees propose to adopt the fee increase.
4)Stipulates that a fee increase is not effective until at least
six months following adoption.
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5)Requires the regents and the trustees, by April 2, 2013, and
in consultation with student representatives, to develop, and
adopt in a public meeting, a methodology for adjusting fees
that, at a minimum, considers the impacts and mitigations as
described.
6)Requires annual UC and CSU budgets incorporating fee changes
to be in accordance with the above methodology and to specify
the intended uses of the increased fee revenues.
7)Requires at least 33% of increases in UC or CSU fee revenues
to be used for institutional financial aid.
8)Requires the regents and trustees, by February 1, 2013, and
annually thereafter, to provide the Legislature information
on: a) the expenditure of revenues derived from student fees;
b) uses of institutional financial aid; and, c) the total cost
of education per graduate and undergraduate student,
respectively, including fixed costs, variable costs, and
administrative, instructional, and student services costs.
9)Requires the Legislative Analyst's Office (LAO) to annually
review and report to the Legislature regarding UC's and CSU's
compliance with all of the above.
10)Requires that mandatory systemwide fees be referred to in UC
and CSU policies, rules, and regulations as "systemwide fees"
or "fees" and not as "tuition."
11)Requires the California Student Aid Commission to report by
July 31, 2013, on the interaction of state and federal student
financial aid programs.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)CSU indicates that the bill's requirement to annually report
on the expenditures derived from fee revenues is a significant
change in the system's budgeting and expenditure accounting,
because CSU currently "pools" General Fund and fee revenues
for these purposes. CSU estimates one-time costs of about $4
million to develop a new system and ongoing costs of a similar
magnitude. CSU notes that such an accounting system that
forces arbitrary divisions between activities funded with fees
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and those funded by the state would be cumbersome and
inefficient. CSU will also incur one-time costs of around
$100,000 to develop the required methodology by April 2013 for
adjusting student fees. Similarly, UC estimates one-time
costs of $1.1 million and ongoing costs of $500,000 for these
tasks.
2)Costs to change references to "tuition" to "fees" when
updating or reprinting campus publications should be minor and
absorbable.
3)Both segments will incur unknown additional administrative
costs to respond to public comments received regarding
proposed fee increases and to make these comments and
responses available to the public prior to adopting a fee
increase.
4)Minor absorbable costs to the Student Aid Commission for the
report on financial aid. UC and CSU may incur minor costs to
provide information requested by the commission for the
report.
COMMENTS : On February 15, 2011, the Assembly Higher Education
Committee held an oversight hearing on "Ensuring Affordability
at California's Colleges and Universities," during which several
themes emerged:
1)General Fund support for higher education has declined since
2007-08, and new fee revenue has offset those reductions.
(LAO)
2)While student fees remain lower than most states, the high
cost of living in California raises the overall cost of
attendance. (California Postsecondary Education Commission)
3)Financial aid programs have generally been spared, and about
half of students receive need-based aid to cover full tuition
costs. Further on average, UC and CSU students graduate with
modest student debt. (LAO and The Institute for Student
Access and Success)
Need for this bill . According to the author, "Current law
governing California's postsecondary institutions lacks needed
policies that guarantee our state will remain committed to
ensuring affordability and access at public colleges and
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universities, and that all financially needy students have the
assistance they need to enroll in institutions of higher
education and reach their postsecondary education objectives."
The author notes that the state does not have a proper
accounting of the total costs of educating students at UC or CSU
or the actual uses of student fee revenues nor does the state
require advance public notice to students or require
consultation with students before fees are increased.
Systemwide fees . There are several types of systemwide fees
charged by UC and CSU, and this bill would apply to each of
those fees, including application, undergraduate, graduate,
teacher credential, doctoral, and professional program fees.
Fee history . Through 1996, fees at California public
postsecondary institutions were governed by the Maddy-Dills Act
(Act), which was enacted by the Legislature in 1985 to provide
for a statewide fee policy. The Act required fees to be
gradual, moderate and predictable; increases to be limited to
10% a year; and, fixed at least 10 months prior to the fall term
in which they were to become effective. The policy also
required sufficient financial aid to offset fee increases. Even
with this policy, when the state faced serious budgetary
challenges in the early to mid-1990s, these provisions were set
aside, typically through "notwithstanding" language in budget
trailer bills, in order to provide flexibility to UC and CSU in
dealing shortfalls in state General Fund support. In 1996, the
Act was allowed to sunset, and since that time, the state has
had no statutory long-term policy to set fees.
Fees and the budget . There is an implicit policy whereby
students and the state are expected to share educational costs,
but the relative proportions are dependent on the state's fiscal
situation. As a result, fees have increased steeply during
difficult budget years and then gradually declined when the
state's fiscal situation improved and more General Fund support
could be provided to UC and CSU.
University Funding and Tuition Since 2007-08
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| Academic Year |UC Budget | UC Fee | CSU | CSU Fee |
| |Reduction | Change | Budget | Change |
| | | |Reduction | |
|--------------------+----------+----------+----------+----------|
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|2007-08 | None | 8.7% | None | 10.0% |
|--------------------+----------+----------+----------+----------|
|2008-09 | $201 | 7.4% | $172 | 10.0% |
|--------------------+----------+----------+----------+----------|
|2009-10 | $610 | 9.3% | $610 | 32.1% |
|--------------------+----------+----------+----------+----------|
|2009-10 midyear fee | -- | 15.0% | -- | -- |
|increase | | | | |
|--------------------+----------+----------+----------+----------|
|2010-11 | None | 15.0% | None | 5.0% |
|--------------------+----------+----------+----------+----------|
|2010-11 midyear fee | -- | -- | -- | 5.0% |
|increase | | | | |
|--------------------+----------+----------+----------+----------|
|2011-12 | $750 | 17.7% | $750 |22.0% |
| | | | | |
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Public notice and consultation . The bill's timelines for
consultation, public notification, and delayed implementation of
fee increases would require this process to begin at least 11
months prior to the start of any academic year for which fee
increases are proposed. To the extent actual state General Fund
support provided to UC and/or CSU through the Budget Act is less
than the segments assume in preparing their budget proposals,
the segments would have to compensate for lower total funding
levels through increased efficiencies, program reductions,
enrollment reductions, and/or other cost saving measures.
However, as was the case when a prior statutory fee policy was
in effect (see Fee history above), subsequent budget-related
legislation could "notwithstand" the requirements of this bill,
thus allowing for a supplemental fee increase to fully or
partially address a funding shortfall. The author has agreed to
further define the student consultation process.
Return-to-aid . This bill requires allocation of at least 33% of
all increases in mandatory fee revenues to institutional
financial aid, which is consistent with longstanding practice
and policy for undergraduate students at UC and CSU. This
provision applies to undergraduate, graduate, and professional
programs, where a one-size-fits-all approach may not be
appropriate or in the state's best interests.
Terminology: fees v. tuition . This bill would prohibit UC and
CSU from changing the terminology of systemwide "fees" to
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"tuition." California has a long-held policy that its public
higher education institutions be tuition-free. However,
various "fees" have been adopted over time, which have become
increasingly significant. The segments believe these fees now
resemble what would otherwise be labeled "tuition" (i.e.,
student charges for teaching expenses), and in November 2010,
the UC Regents and the CSU Trustees voted to change their
respective terminologies from systemwide "fees" to "tuition."
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960
FN: 0003082