BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1888

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          Date of Hearing:  May 11, 2016


                               Lorena Gonzalez, Chair

          1888 (Low) - As Amended May 2, 2016

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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill requires, as a condition of voluntary participation in  
          the Cal Grant Program, each Cal Grant participating public and  
          private higher education institution, commencing in 2017-18, to  
          certify both of the following to the California Student Aid  
          Commission (CSAC):


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          1)The institution does not subject an applicant, student or  
            employee to discrimination on the basis of disability, gender,  
            gender identity, gender expression, nationality, race or  
            ethnicity, religion, sexual orientation, age, or disability or  
            any characteristic contained in the state's prohibition of  
            hate crimes, per Penal Code Section 422.6.

          2)The institution shall not have, apply for, or receive a waiver  
            from the United States Department of Education (USDE) from  
            federal nondiscrimination requirements for the receipt of  
            funds under Title IX of the Education Amendments of 1972.

          The bill also:

          3)Provides that, notwithstanding (1): 

             a)   A religious educational institution may hire or employ,  
               or admit or enroll, persons of a particular religion if  
               that educational institution is controlled by a religious  
               institution and the educational institution is directed  
               toward the propagation of that particular religion.

             b)   An institution that since its establishment has had a  
               policy of admitting students of only one sex may continue  
               to do so.

          4)Stipulates that (2) does not apply to an institution that  
            received a waiver, but provides evidence to CSAC prior to  
            2017-18 that it has relinquished the waiver.

          5)Stipulates the Cal Grant recipients attending an institution  
            prior to the academic year in which the institution is deemed  
            ineligible for Cal Grant participation pursuant to this bill  
            are eligible for renewal of their Cal Grant awards for as long  
            as they remain continuously enrolled at that institution.


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          FISCAL EFFECT:

          1)CSAC anticipates needing one new auditor position ($120,000  
            annually GF) to review institutional compliance and  
            student/employee discrimination complaints. The commission  
            indicates that this is similar to the workload demands of  
            recently enacted legislation that also conditioned Cal Grant  
            participation of specific institutional actions.

          2)Given the consequences to the institutions that could be  
            impacted by this bill and the legal issues raised by this bill  
            (see Comment #4 below), the probability of litigation against  
            the state appears fairly high. The state could therefore incur  
            significant legal costs, at least in the hundreds of thousands  
            of dollars.

          3)Based on information from CSAC, seven institutions that  
            participate in the Cal Grant Program have either received or  
            requested a federal waiver: Biola University, Fresno Pacific  
            University, Loma Linda University, Pacific Union College, The  
            Master's College, Simpson University, and William Jessup  
            University. (Pepperdine University requested withdrawal of its  
            religious exemption in January 2016.)  In 2014-15, about 3,200  
            students at these seven schools-representing 20% to 50% of  
            their respective undergraduate enrollments-received $26.6  
            million in Cal Grants. The most recent amendments to this bill  
            allow these students to remain that their institution and  
            continue to receive their Cal Grant. These costs will decline  
            over four years as these students complete their Cal Grant  
            eligibility. If these schools do not relinquish their federal  
            waivers, and to the extent new students eligible under the Cal  
            Grant Entitlement Program would attend one of these schools,  
            and thus forego their Cal Grant award, the state would realize  
            unknown, but potentially significant Cal Grant savings. (The  
            maximum Cal Grant award at such schools is currently about  


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            $8,000.) Many such students likely would elect to attend  
            another institution that participates in the Cal Grant  
            program, however, thus the extent of any possible savings is  

            To the extent some of the Cal Grant-eligible students  
            described above would instead attend a California Community  
            College or the California State University (CSU), the state  
            would bear the costs of those students attendance. For every  
            100 additional CCC or CSU students, state costs would be  
            $475,000 (GF-Prop 98) at the CCC or $750,000 (General Fund) at  
            the CSU. These costs would be offset to some extent by savings  
            from lower Cal Grant awards amounts at the CCC and CSU. 


          1)Purpose. According to the author, AB 1888 upholds California's  
            commitment to nondiscrimination by requiring all Cal Grant  
            participating institutions to certify to CSAC that they shall  
            not discriminate on the basis of a protected class, including,  
            sex, sexual orientation, gender identity, or gender  
            expression.  The author argues that allowing religion to be  
            used as an instrument for discrimination goes against  
            California public policy and should not be supported with  
            state funding.

            Equality California (EQCA), the bill's sponsor, argues that  
            religious protection should not be used to justify  
            discrimination.  According to EQCA, overly broad religious  
            exemptions leave room for individuals and institutions to  
            discriminate depending on how they apply, or choose not to  
            apply, their religious beliefs. 

          2)The Equity in Education Act prohibits, among other  
            protections, a person from being subjected to discrimination  
            on the basis of disability, gender, gender identity, gender  


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            expression, nationality, race or ethnicity, religion, sexual  
            orientation, or any other characteristic that is contained in  
            the definition of hate crimes, in any program or activity  
            conducted by an educational institution that receives, or  
            benefits from, state financial assistance or enrolls pupils  
            who receive state student financial aid. An exemption is  
            provided for an educational institution that is controlled by  
            a religious organization if the application would not be  
            consistent with the religious tenets of that organization.

          3)Federal Title IX of the Education Amendments of 1972 (Title  
            IX) prohibits discrimination, on the basis of sex, in  
            educational programs or activities receiving Federal financial  
            assistance.  Various exemptions are provided, including for  
            fraternities and sororities, military institutions,  
            traditional male or female institutions, and institutions  
            controlled by religious organizations. An exemption is  
            provided for religious colleges that fall within specified  
            guidelines. Federal guidance issued in 2014 clarified that the  
            Title IX discrimination prohibition "extends to claims of  
            discrimination based on gender identity or failure to conform  
            to stereotypical notions of masculinity or femininity." 

            In response to the USDE guidance, a number of religious  
            institutions have applied for exemption to Title IX. According  
            to a report from the HRC, 56 schools nationwide have requested  
            an exemption, 33 have received an exemption from the law as it  
            pertains to protecting students on the basis of gender  
            identity, and 23 have obtained an exemption based on laws  
            pertaining to protecting students on the basis of sexual  
            orientation.  Schools most commonly requested exemptions from  
            provisions of the law relating to housing, access to  
            facilities, and athletics.

          4)Opposition.  The Association of Independent California  
            Colleges and Universities (AICCU) argues, based on current  
            enrollments, that AB 1888 could impact almost 9,000 who would  
            otherwise attend one of the state's faith-based colleges.  
            These low-income students would either have to forgo their Cal  


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            Grants or attend a different institution that would still  
            participate in the Cal Grant program. Several AICCU member  
            schools expressed similar concerns. 

            The National Center for Law and Policy argues that AB 1888  
            unnecessarily restricts educational choices and "serves as an  
            existential threat to church autonomy, the self-governance of  
            religious organizations, and religious liberty?" The Center  
            alludes to lawsuits challenging the unconstitutionality of AB  
            1888, "which coerces a waiver of federal constitutional and  
            statutory rights.

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