AB 656 Summary

• Establishes the California Higher Education Endowment Corporation (CHEEC) in state government to manage a continuously appropriated California Higher Education Fund for higher education institutions.

• Creates an oversight board composed of representatives from UC, CSU, California Community Colleges, Legislature, state officials, and student members from each segment to govern CHEEC and appoint its chief executive officer.

• Imposes a 12.5% oil and gas severance tax on producers, administered by the State Board of Equalization, with all collected revenues deposited into the California Higher Education Fund.

• Allocates fund revenues annually as 50% to California State University, 25% to University of California, and 25% to California Community Colleges for direct classroom instruction, supplementing (not replacing) existing state funding.

• Takes effect immediately as an urgency statute; oil and gas severance tax becomes operative on the first day of the first calendar quarter more than six months after enactment.