Intended to provide background information and preliminary policy options for the California Community Colleges' Commission on Innovation, this document explores the advantages and costs of shifting to year-round operations to increase college capacity and reduce the need for new facilities. Following introductory materials detailing the Commission's charge, projected increases in the statewide demand for college services through the year 2005 are reviewed, indicating that approximately $4 billion worth of construction will be needed to accommodate the growth. The current basis for planning and approving new facilities is also reviewed, defining terms and equations used in determining needs for new facilities. Next, options for using existing facilities more effectively are presented, including the implementation of year-round scheduling using quarters, trimesters, or multi-track calendars. This section indicates that a year-round schedule would increase potential capacity by 12% to 35%, saving from $1.5 billion to $2.5 billion in capital outlay expenditures. Other strategies described include adding instructional programs from 2:00 to 5:00 in the afternoon and developing master campus course schedules that are optimally convenient for the greatest possible number of students. A cost model for capital outlay expenditures with year-round operations, a list of Commission on Innovation Facilities Task Force members, and 24 references are appended. (KP)