BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1837


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          ASSEMBLY THIRD READING


          AB  
          1837 (Low and Eggman)


          As Amended  March 17, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Higher          |11-2 |Medina, Baker, Bloom, |Chávez, Levine      |
          |Education       |     |Irwin, Jones-Sawyer,  |                    |
          |                |     |Linder, Low, Olsen,   |                    |
          |                |     |Santiago, Weber,      |                    |
          |                |     |Williams              |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |Hernández, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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                                                                    AB 1837


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          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 Committee on Rules; 


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









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             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  
            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; 










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             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  
               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  








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               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  
            responsibilities.


          7)Provides that on or before January 1, 2020, the Legislative  
            Analyst's Office (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  
          Committee:


          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.








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          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)   California Community Colleges (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  
          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  








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          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 (Committee  
          on Budget), 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  
          trailer bill (SB 860 (Committee on Budget), 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 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  








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          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  
          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.       




          Analysis Prepared by:                                             
                          Laura Metune / HIGHER ED. / (916) 319-3960  FN:  
          0003109














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