Designed to provide background information for a study of higher education in California to be conducted by the Organization for Economic Cooperation and Development, this report describes the essential elements of the system. Section 1 provides an overview of California, postsecondary education in the state, and higher education agencies and associations. Section 2 discusses master planning for higher education prior and subsequent to the development of the "Master Plan for Higher Education in California, 1960-1975," and examines differences among various approaches to master planning. Section 3 examines state financing of higher education, providing information on levels and sources of support, financing of public and independent institutions, student charges, financial aid, and prospects for future funding. Section 4 addresses the coordination of higher education in the United States and California, focusing on the coordinating roles of the California Postsecondary Education Commission and the California Education Round Table. Section 5 deals with economic development issues, while section 6 asseses the size and scope of the educational enterprise in California at undergraduate and graduate levels. Section 7 examines the quality of undergraduate education and the prospects for reform. In section 8, trends in and programs for educational equity for students and employment equity for faculty are reviewed. Section 9 deals with California's community colleges, considering their purpose and mission, shifts in programs and enrollments, student characteristics, faculty and staff, and governance. The final section offers an agenda for higher education, addressing issues of equity and excellence, cooperation with public schools, faculty replacement, teacher education, student financial aid, community colleges, and economic development. Appendixes contain information on master planning, educational finance, the enabling legislation for the Commission, and ethnicity reporting problems. (ALB)