BILL ANALYSIS                                                                                                                                                                                                    

                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1837 (Low) - Postsecondary education:  Office of Higher  
          Education Performance and Accountability
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          |Version: March 17, 2016         |Policy Vote: ED. 9 - 0, G.O. 13 |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 1, 2016    |Consultant: Jillian Kissee      |
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          This bill meets the criteria for referral to the Suspense File.


          Summary:  This bill establishes the Office of Higher Education  
          Performance and Accountability (Office), a successor agency to  
          the former California Postsecondary Education Commission (CPEC),  
          as the statewide postsecondary education coordination and  
          planning agency.  The purpose of the Office is to advise the  
          Governor, Legislature, and other government officials and  
          institutions of postsecondary education.

           Costs in the low millions annually to maintain the Office once  


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            fully operational.  (General Fund)
           Costs to Segments:  All segments cite costs, totaling about  
            $600,000, related to working with the Office and responding to  
            data requests based on workload from the former CPEC.  The  
            California Community Colleges (CCC) Chancellor's Office  
            estimates costs of about $443,000 across four positions; the  
            California State University (CSU) estimates $110,000 for one  
            position; and the (University of California) estimates the  
            need for an additional half of a position, equating to about  
            $50,000.  (General Fund)
           Potential significant out year costs to the segments for their  
            participation in an eligibility study.  (General Fund)

          Background:  The 1960 Master Plan for Higher Education in California, and  
          through existing law, established the CPEC, a 17 member body, to  
          be responsible for coordinating public, independent, and private  
          postsecondary education in California and providing independent  
          policy analysis and recommendations to the Legislature and the  
          Governor on postsecondary education issues.  The CPEC was tasked  
          with providing fiscal and policy recommendations to the Governor  
          and Legislature; monitoring and coordinating public  
          institutions; and ensuring comprehensive planning for higher  
          education and effective use of resources.  
          In 2011, Governor Brown vetoed funding of about $2 million  
          General Fund for the CPEC resulting in its closure.  In the veto  
          message, the Governor cited the commission's ineffectiveness but  
          requested "that the state's three public higher education  
          segments, along with other higher education stakeholders,  
          explore alternative ways to more effectively improve  
          coordination and development of higher education policy."

          Existing law also establishes the state's goals for higher  
          education.  The goals are to: (1) improve student access and  
          success which includes, but is not limited to, greater  
          participation by demographic groups, including low-income  
          students, that have historically participated at lower rates,  
          greater completion rates by all students, and improved outcomes  
          for graduates; (2) better align degrees and credentials with the  
          state's economic, workforce, and civic needs; and (3) ensure the  
          effective and efficient use of resources in order to increase  
          high-quality postsecondary educational outcomes and maintain  


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          Proposed Law:  
            This bill establishes the Office, a successor agency to the  
          former CPEC, as the statewide postsecondary education  
          coordination and planning agency.  This bill also requires the  
          Legislative Analyst's Office (LAO) to report to the Legislature  
          regarding the performance of the Office and its functions by  
          January 1, 2020.
          Specifically this bill:

          Office makeup

           Establishes the Office within the Governor's Office.  The  
            Governor is required to appoint the Executive Director which  
            is to be confirmed by a majority vote of the membership of the  

           Establishes an advisory board to examine and make  
            recommendations to the Office regarding its functions and  
            review and comment on any recommendations made by the Office  
            to the Governor and the Legislature.  The advisory board  
            consists of the Chairperson of the Senate Committee on  
            Education and the Chairperson of the Assembly Committee on  
            Higher Education and six public members with experience in  
            postsecondary education appointed to four year terms by the  
            Senate Committee on Rules and the Speaker of the Assembly.  

           The advisory board is required to develop an annual report on  
            the condition of higher education in California and an annual  
            review of the performance of the executive director of the  
            Office.  The advisory board members do not receive  
            compensation but do receive reimbursement for actual and  
            necessary expenses for its functions.

          Office functions


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           Requires the Office to:

                  o         Biennially evaluate statewide and  
                    institutional performance related to the state's goals  
                    for higher education and take into consideration  
                    certain metrics.

                  o         Make recommendations on cross-segmental  
                    initiatives in areas such as efficiencies in  
                    instructional delivery, financial aid, transfer, and  
                    workforce coordination.

                  o         Advise on the need and location of new  
                    institutions and campuses of higher education,  
                    proposals by the public segments for new programs, the  
                    priorities that guide the public segments and the  
                    degree of coordination between segments.

                  o         Make recommendations on proposals for changes  
                    in eligibility pools for admission to postsecondary  
                    education segments.  The Office must periodically  
                    conduct a study (often referred to as an eligibility  
                    study) of the percentages of California public high  
                    school graduates estimated to be eligible for  
                    admission to the UC and CSU.

                  o         Maintain programmatic, policy, and fiscal  
                    expertise to receive and aggregate information  
                    reported by the institutions of higher education.

                  o         Develop and maintain a database, with  
                    specified functions, to serve as a clearinghouse for  
                    postsecondary education information. 

                  o         Furnish information from the segments upon  
                    request of the Governor and the Legislature.


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                  o         Annually report to the Governor and  
                    Legislature regarding the progress in achieving the  
                    state goals for higher education.

          Legislation:  Several bills have been pursued in the past that  
          relate to the functions of the former CPEC.  The most recent, SB  
          42 (Liu, 2015), almost identical to this bill, was vetoed by the  
          Governor whose message said 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."

          Comments:  Based on the size of the CPEC's last budget, costs to  
          reinstitute a similar entity such as the one proposed in this  
          bill would be about $2 million General Fund and 19 positions.   
          However, in previous years the CPEC was funded with $3.7 million  
          General Fund.   
          Depending upon the frequency and the nature of data being  
          requested, this could drive significant workload to the segments  
          to compile and submit the information to the Office.  This bill  
          authorizes the Office to require the governing boards and higher  
          education institutions to submit data on plans and programs,  
          costs, selection and retention of students, enrollments, plant  
          capacities, and other matters related to effective planning,  
          policy development, and articulation and coordination.  It also  
          requires the Office to furnish information concerning these  
          matters to the Governor and the Legislature upon request.  Any  
          data reporting requirements the Office imposes, with statutory  
          authority to do so, on the CCCs will likely be deemed by the  
          Commission on State Mandates to be a reimbursable state mandate.  
           Staff notes that currently the segments respond directly to the  
          Administration and Legislature on data requests that cover many  
          of the topics included in this bill.  

          This bill also includes a reporting requirement for the LAO  


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          regarding the performance of the Office and its functions by  
          January 1, 2020.  This date falls before the LAO's annual budget  
          analysis publication.  It may make more sense to require this  
          report at a later date so that it can be included in the budget  
          analysis.  The LAO estimates general costs of about $150,000 to  
          complete a program evaluation.  The requirement in this bill  
          would likely not result in additional costs to the state, but  
          would result in less time available to respond to other requests  
          or complete other reports requested by the Governor and  

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