BILL NUMBER: SB 1199INTRODUCED BILL TEXT INTRODUCED BY Senator Liu FEBRUARY 18, 2010 An act to add Article 3.5 (commencing with Section 66027) to Chapter 2 of Part 40 of Division 5 of Title 3 of the Education Code, relating to public postsecondary education. LEGISLATIVE COUNSEL'S DIGEST SB 1199, as introduced, Liu. Public postsecondary education: mandatory systemwide resident student fee policy. Existing law, known as the Donahoe Higher Education Act, provides for a public postsecondary education system in this state. This system consists of the University of California, the California State University, and the California Community Colleges. Existing law authorizes these institutions to require that mandatory systemwide fees, among other fees, be paid by students at these institutions. The provisions of the Donahoe Higher Education Act apply to the University of California only to the extent that the Regents of the University of California act by resolution to make them applicable. This bill would add provisions to the act to express legislative findings and intent with respect to the process of setting student fee levels. The bill would provide that the Regents of the University of California and the Trustees of the California State University bear the primary responsibility for adjusting mandatory systemwide resident student fees at their respective systems. The bill would also add provisions to the act to require these universities to develop methodologies for the adjustment of fees in accordance with a prescribed procedure. The bill would require the California Postsecondary Education Commission to annually review, and report to the Legislature and the Director of Finance about, the policies and procedures adopted pursuant to the bill. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Article 3.5 (commencing with Section 66027) is added to Chapter 2 of Part 40 of Division 5 of Title 3 of the Education Code, to read: Article 3.5. Student Fee Policy 66027. The Legislature finds and declares all of the following: (a) The state has long recognized the value of providing broad access to postsecondary education to the state's citizens. It has demonstrated that commitment by investing in postsecondary education and maintaining public student fee levels that are fiscally responsible and affordable. The student fee principles expressed in this section seek to continue the state's historic commitment to ensuring access and maintaining quality throughout the state's public universities while recognizing the fiscal challenges that confront both the state and postsecondary education. (b) Historically, the state has borne the preponderance of responsibility for providing the fiscal resources necessary to ensure that all eligible state residents have access to high-quality educational opportunities at the state's public colleges and universities. Further, the state bears the principal and overarching responsibility for ensuring that all financially needy students have the financial assistance necessary for them to enroll in institutions of higher education and complete their postsecondary education objectives. (c) Changes in resident student fees or in student financial aid funding or packaging policies should take into consideration the total cost to the student of attending the university, including mandatory campus-based student fees, housing and living expenses, as well as all other expenses associated with university attendance. (d) Any necessary increases in mandatory systemwide fees should be accompanied by appropriate increases in funding for need-based student financial aid. 66027.1. The following state policies regarding mandatory systemwide resident fees and financial aid are established for students enrolled in the state's public universities: (a) The total cost of a public postsecondary education should be a shared responsibility of students, families, and the State of California. However, in order to keep resident undergraduate student fees at the state's public universities as low and affordable as possible, the state shall bear the preponderance of responsibility for funding postsecondary education. (b) So that students and their families can better prepare financially for college expenses, any changes in resident student fees should be gradual, moderate, and predictable. Any potential adjustments in resident student fees should take into consideration, and be balanced with, available state General Fund revenues to ensure that the access, quality, and affordability of the state's public universities are not adversely affected. (c) Changes in resident student fees should take into consideration a number of factors, including the total cost of educating a student, the appropriate share of the cost of instruction to be paid by the student, and information concerning families' ability to pay. Student financial aid policy and programs should ensure affordability for students from all income levels. Recognition of these indicators will better ensure that changes in resident student fees are gradual and moderate. (d) As changes in resident student fees and financial aid resources are considered, the state should have an understanding of the impact that these changes will have on both current and prospective students. Efforts should be employed to mitigate any negative impact on financially needy students. (e) To the extent that budget decisions are made in a timely manner, adequate advance notice should be provided to students regarding future student fees, thereby allowing them and their families greater time to prepare for the fees to be assessed. (f) In order to ensure that access is not precluded for any eligible student, but particularly financially needy students, all current and prospective students should be provided with timely information concerning student financial aid, including the processes associated with applying for and obtaining student financial assistance. (g) Students enrolled in graduate and professional programs that provide the prospect of significant personal economic returns may be subject to higher student fees. The regents and the trustees should provide a rationale for any differential student fees to be levied upon any cohort of graduate or professional school students. (h) Student fee and financial aid policies should encourage and promote a student's timely completion of the requirements necessary for degree attainment. (i) To ensure that financially needy students are provided with assistance in managing the total cost of their university attendance, financial aid programs, including institutional aid, should be aligned with the distinct financial needs of the systems' student populations and student fee levels. (j) Revenues derived from student fees should remain within the respective university system's budget in order to provide benefits to the students enrolled within the system. When the system initially adopts the fee methodology pursuant to Section 66027.2, the system shall present this methodology to the appropriate legislative fiscal and policy committees for review and discussion by those legislative committees. (k) It is the intent of the Legislature that all of the following occur: (1) Undergraduate students attending the University of California should pay student fees that equal approximately ____ percent of the overall cost of instruction at that university. (2) Undergraduate students attending the California State University should pay student fees that equal approximately ____ percent of the overall cost of instruction at that university. (3) Undergraduate student fees should not be increased by more than ____ percent in any academic year. (4) After student fees reach the level identified in paragraphs (1) and (2), the student fee amount should be adjusted annually by the annual adjustments in the Consumer Price Index. 66027.2. (a) The Regents of the University of California and the Trustees of the California State University shall bear the primary responsibility for adjusting mandatory systemwide resident student fees at their respective systems. (b) To carry out the responsibilities of this section, the regents and the trustees shall each develop a rational and transparent methodology for adjusting mandatory systemwide resident student fees consistent with the student fee policy principles set forth in Section 66027.1. These methodologies shall be developed in consultation with appropriate student representatives through student fee advisory committees and, once developed, shall be formally adopted by the regents and the trustees, respectively, in open public meetings. The annual budgets of the segments shall be drafted on the basis that fees will change in accordance with the methodology established under this section. (c) In adopting a methodology, each system shall take into consideration the impact that the methodology and its resulting outcome will have on students and the quality of the system. At a minimum, each system shall pay careful attention to the impact that the proposed methodology has on financially needy and underrepresented students, average time to degree completion, and the total cost to the student of obtaining a degree. To the extent that either system recognizes that the proposed methodology will have a negative impact, the system shall include a plan for mitigating that impact. Each system shall annually report to the Governor, the Legislature, and the California Postsecondary Education Commission concerning its analysis of the impact associated with implementation of its student fee methodology. (d) (1) Employing the methodologies adopted under this section, the regents and the trustees shall annually propose an adjustment in the level of their respective mandatory systemwide resident student fees. The regents and trustees shall not assume that state General Fund resources will be made available to backfill for any proposed changes in student fee levels. (2) The proposed adjustments in student fees shall be discussed and acted upon by each system's governing body in an open public meeting. Consistent with the state's open meeting law provisions, each system's governing body shall provide an opportunity for interested constituents to comment on the proposed changes in student fees. (e) The regents and the trustees shall discuss, and act upon, any proposed changes in student fees by no later than each November 30 in order for those fees to take effect the academic term commencing after July 1 of the following calendar year. Following the governing body's action, each system shall employ appropriate procedures to notify students of the proposed changes in student fees. The Legislature finds and declares that this advance notification will enable students and their families to better plan financially. (f) The Legislature finds and declares both of the following: (1) The Governor and the Legislature should recognize the responsibility assigned to the segments under this article, and allow student fees to increase or decrease in a manner consistent with the respective methodologies adopted by the regents and the trustees. (2) To the extent that the Governor or the Legislature identify additional state General Fund resources to provide to higher education, each is encouraged to examine the overall fiscal needs of the state's public colleges and universities and provide state revenues to assist the universities in meeting their ongoing operational needs, rather than using limited state revenues to backfill for proposed changes in fee levels. (g) If, following enactment of the annual Budget Act, because of budgetary restrictions or requirements, the level of student fees to be assessed in the upcoming academic year differs from that previously approved by the regents or the trustees, the affected governing body shall meet in open public session to discuss and act upon the revised level of student fees. This action shall occur in an open public meeting, and provide an opportunity for interested constituents to comment on the proposed change in student fees. The regents and the trustees shall bear the final and ultimate responsibility for determining the student fees to be assessed. (h) Following the final action of its governing body, each system shall employ appropriate procedures to notify students of the student fees to be assessed in the upcoming academic year. In addition, each system shall simultaneously provide students with information concerning the availability of student financial aid and the procedures for obtaining that aid in order to assist students with meeting the increased costs of university attendance. (i) (1) A system shall report to the appropriate legislative fiscal and policy committees by November 30 in any fiscal year in which any of the following situations occur: (A) The system makes any change to the student fee methodology it adopts under this section. (B) The system proposes any changes in its student financial aid policies or student financial aid funding levels. (C) The proposed student fee or student financial aid policies are deemed by the appropriate governing body to have a possible negative impact on disadvantaged or financially needy students of that system. (2) It is the intent of the Legislature that both of the following occur: (A) The systems shall maintain comprehensive outreach efforts to inform students and their families about fee levels and opportunities for student financial aid. (B) Assistance for nontraditional and low-income students shall be a priority for the systems' outreach efforts. (j) As used in this article: (1) "Governing body" refers to the regents or the trustees, as appropriate. (2) "Student fee" refers to mandatory systemwide resident student fees. (3) "System" refers to the University of California or the California State University, as appropriate. 66027.3. Each year, prior to March 1, the California Postsecondary Education Commission shall review institutional compliance with the policies set forth in this article, and report, in writing, to the Legislature and the Director of Finance any findings, conclusions, or recommendations of the commission regarding the implementation of these policies.