BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                    AB 1837

                                                                    Page  1

          Date of Hearing:  April 19, 2016


                                 Jose Medina, Chair

          AB 1837  
          (Low) - As Amended March 17, 2016

          SUBJECT:  Postsecondary education:  Office of Higher Education  
          Performance and Accountability

          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  

          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  


                                                                    AB 1837

                                                                    Page  2

            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 Committee on Rules; 

             b)   Three members with experience in postsecondary education  
               appointed by the Speaker of the Assembly; and, 

             c)   The chair of the Senate Committee on Education and the  
               chair of the Assembly Committee on Higher Education 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  

          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  


                                                                    AB 1837

                                                                    Page  3

               biennially interpret and evaluate both statewide and  
               institutional performance in relation to these goals and  

             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  

             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  
               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, as specified.

             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  


                                                                    AB 1837

                                                                    Page  4

               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 and metrics  
               outlined in existing law.  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,  
               and fiscal expertise to receive and aggregate information  
               reported by the institutions of higher education in this  
               state; and,

          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  

          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  

          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  


                                                                    AB 1837

                                                                    Page  5

          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:  Unknown.  According to the Assembly  
          Appropriations Committee analysis of substantially similar  
          legislation from 2015:

          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)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  


                                                                    AB 1837

                                                                    Page  6

          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  
          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, Chapter  
          50) 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  


                                                                    AB 1837

                                                                    Page  7

          identify specific metrics for measuring progress toward  
          statewide goals.  The 2014-15 Budget Act (SB 852, Chapter 25)  
          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  
          trailer bill (SB 860, Chapter 34), 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  

          Purpose of this bill.  According to the author, "this bill  
          represents the next necessary step in establishing greater  
          clarity and accountability for our higher education system's  
          performance in meeting the statewide goals outlined in the  
          Master Plan of equity, access, and success; alignment with  
          workforce needs; and the effective and efficient use of  
          resources. This bill establishes OHEPA as the statewide  
          postsecondary coordination and planning entity, outlines its  
          responsibilities, functions and authorities, and establishes an  
          advisory board to the office (comprised of legislative  
          appointees) to examine and make recommendations regarding its  
          functions and operations, and to review and comment on the  
          office's recommendations to the Governor and Legislature."  
          Recommendations to reestablish coordination.  A number of  
          reports have been issued in recent years that recommend various  
          approaches to reestablishing higher education oversight and  
          coordination in California.  In 2012, the Legislative Analyst's  
          Office (LAO) recommended, in Improving Higher Education  
          Oversight, the Legislature establish an oversight body and  
          increase the body's independence from the public higher  
          education segments, assign the body with limited and clear  
          responsibilities, and develop a more unified governing board  


                                                                    AB 1837

                                                                    Page  8

          appointment process.  In 2014, California Competes, in  
          Chartering a Course for California's Colleges: State Leadership  
          in Higher Education, also highlighted the importance of  
          impartiality and independence from the higher education  
          segments.  The Institute for Higher Education Leadership and  
          Policy, in March of 2014, issued A New Vision for California  
          Higher Education: A Model Public Agenda, which noted that policy  
          leadership could be best filled by regional consortia that set  
          goals and targets working in coordination with an executive  
          branch entity (such as a Higher Education Office) that reported  
          to the Governor with respect to finance and accountability.       

          Related legislation. AB 2434 (Bonta), which was approved by this  
          Committee on April 12, 2016, would establish a Blue Ribbon  
          Commission on Public Postsecondary Education to provide research  
          and recommendations regarding California higher education.  

          Prior legislation.  Several bills have been introduced in an  
          effort to improve higher education performance and  
          accountability, and to re-establish CPEC's most important  
          functions.  These include the following:

          SB 42 (Liu, 2015) was substantially similar to this measure.  SB  
          42 was vetoed by Governor Brown, who stated, in part "While  
          there is much work to be done to improve higher education, I am  
          not convinced we need a new office and an advisory board,  
          especially of the kind this bill proposes, to get the job done."

          SB 1196 (Liu, 2014) would have established a process for setting  
          specific educational attainment goals for the State.  SB 1196  
          was held in the Assembly Appropriations Committee.

          AB 1348 (John A. Pérez, 2014) would have established the  
          California Higher Education Authority, its governing board and  


                                                                    AB 1837

                                                                    Page  9

          its responsibilities, as specified, phased-in over a three-year  
          period. AB 1348 was held in the Senate Appropriations Committee.

          AB 2190 (John A. Pérez, 2012) would have established a new state  
          oversight and coordinating body for higher education.  AB 2190  
          was held in the Assembly Appropriations Committee.

          SB 721 (Lowenthal, 2012) would have established statewide goals  
          for guiding budget and policy decisions. SB 721 was ultimately  

          SB 1138 (Liu, 2011-12) would have established a central data  
          management system for the higher education segments.  SB 1138  
          was held in the Senate Appropriations Committee.

          AB 2 (Portantino, 2011) and AB 218 (Portantino, 2009)  
          essentially identical bills, required that the state to  
          establish an accountability framework to biennially assess and  
          report on the collective progress of the state's system of  
          postsecondary education in meeting specified educational and  
          economic goals.  Both bills were heard and passed by this  
          Committee and were subsequently held in the Senate  
          Appropriations Committee.



          California Competes

          California Faculty Association

          The Campaign for College Opportunity


                                                                    AB 1837

                                                                    Page  10


          None on File

          Analysis Prepared by:Laura Metune / HIGHER ED. / (916) 319-3960