BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1837


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          Date of Hearing:  May 4, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


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


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          Yes


          SUMMARY:


          This bill, until January 1, 2021, establishes the Office of  
          Higher Education Performance and Accountability (OHEPA), within  
          the Governor's office, as the statewide postsecondary education  
          planning and coordinating agency, and advisor to the Legislature  
          and the Governor. Specifically, this bill: 










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          1)Requires the Governor to appoint an Executive Director of  
            OHEPA, who shall be subject to confirmation by the Senate.


          2)Establishes a six-member advisory board-with three members  
            each appointed by the Assembly Speaker and Senate Rules,  
            respectively-and requires OHEPA to consult with the board, as  
            well as with the higher education segments and stakeholders.


          3)Delineates OHEPA's functions and responsibilities, including:


             a)   Reviewing and advising regarding state goals and  
               priorities for higher education.


             b)   Providing advice regarding the need for new institutions  
               and campuses.


             c)   Reviewing, as specified, proposals from public  
               institutions for new programs.


             d)   Acting as a clearinghouse for postsecondary education  
               information and developing and maintaining a database, as  
               specified.


             e)   Reviewing public segments' proposals to change  
               eligibility pools, and periodically studying the  
               percentages of California public high school graduates  
               eligible for admission to the University of California (UC)  
               and the California State University (CSU). 


             f)   Reporting annually to the Legislature and the Governor  
               on its progress in meeting its responsibilities. 








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          4)Authorizes the office to require that the public segments of  
            higher education to submit data to the office as needed by the  
            office to perform its responsibilities.


          5)Requires the Legislative Analyst's Office (LAO), by January 1,  
            2020, to report to the Legislature regarding OHEPA's  
            performance.


          


          FISCAL EFFECT:


          1)In its last full year of operation, California Postsecondary  
            Education Commission's (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.










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          COMMENTS:


          1)Background. AB 770 (Vasconcellos) of 1973 created the CPEC and  
            made it responsible for the planning and coordination of  
            postsecondary education. CPEC was charged with providing  
            analysis, advice, and recommendations to the Legislature and  
            the Governor on statewide policy and funding priorities. As  
            part of his 2011-12 budget, Governor Brown proposed  
            eliminating CPEC. Both houses rejected this proposal, but the  
            Governor exercised his line item veto to remove all General  
            Fund support for CPEC, describing the commission as  
            "ineffective." In his veto message, however, the Governor  
            acknowledged the need for coordinating and guiding state  
            higher education policy and requested that stakeholders  
            explore alternative ways these functions could be fulfilled. 



            On November 18, 2011, CPEC closed its office and ceased  
            operations. Its federal Teacher Quality Improvement grant  
            program was transferred to the California Department of  
            Education (CDE) and its extensive data resources were  
            transferred to the California Community Colleges (CCC)  
            Chancellor's Office.





            In a January 2013 report, "Improving Higher Education  
            Oversight," the LAO contended that the state needed higher  
            education oversight that enables policymakers and others to  
            monitor how efficiently and effectively the postsecondary  
            system is serving the state's needs, and to make changes to  
            improve its performance.


          2)Subsequent Legislation. A 2013-14 Budget Act trailer bill (AB  








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            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 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 students.


          3)Purpose. According to the author, "this bill represents the  
            next necessary step in establishing greater clarity and  
            accountability for our higher education systems' 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."


          4)Related Legislation. AB 2434 (Bonta), pending on this  
            committee's Suspense file, establishes a Blue Ribbon  
            Commission on Public Postsecondary Education to provide  
            research and recommendations regarding California higher  
            education.


          5)Prior Legislation. SB 42 (Liu, 2015), which was substantially  
            similar to this measure, was vetoed. The Governor 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  








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            advisory board, especially of the kind this bill proposes, to  
            get the job done."

            SB 1196 (Liu, 2014), which would have established a process  
            for setting specific educational attainment goals for the  
            State, was held on this committee's Suspense file.

            AB 1348 (John A. Pérez, 2014), which would have established  
            the California Higher Education Authority, its governing board  
            and its responsibilities, as specified, phased-in over a  
            three-year period, was held on Suspense in Senate  
            Appropriations.

            AB 2190 (John A. Pérez, 2012), which would have established a  
            new state oversight and coordinating body for higher  
            education, was held on this committee's Suspense file.
          


          Analysis Prepared by:Chuck Nicol / APPR. / (916)  
          319-2081