BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1802| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1802 Author: Assembly Budget Committee Amended: 6/27/06 in Senate Vote: 27 - Urgency WITHDRAWN FROM SENATE RULES COMMITTEE ASSEMBLY FLOOR : Not relevant SUBJECT : Budget Act of 2006: education trailer bill SOURCE : Author DIGEST : This bill makes a number of education related changes necessary to implement the Budget Act of 2006. Senate Floor Amendments of 6/27/06 delete the prior version which expressed legislative intent to enact statutory changes related to the Budget Act of 2006. ANALYSIS : This bill makes statutory changes necessary to implement the K-12 and Higher Education portions of the 2006 Budget Act. The bill makes the following statutory changes: PROPOSITION 98 - ONE-TIME SETTLE-UP APPROPRIATIONS Appropriates approximately $2.6 billion in one-time Proposition 98 "settle-up" funds to K-12 education and community colleges for several fiscal years (Sections 43 & CONTINUED AB 1802 Page 2 44). These one-time funds are provided for the following purposes: K-12 Education 1.$908 million to reimburse school districts and county offices of education for outstanding, prior year education mandate claims. This includes $650 million for 2005-06 settle-up payments and $258 million for settle-up payments in prior years. (The budget provides an additional $19 million in one-time funds from the Proposition 98 Reversion Account for prior-year K-12 mandates.) 2.$533.5 million billion for Discretionary Block Grants. Of this amount, $400.1 million (75 percent) is for school site block grants for a variety of purposes to be determined by school site councils, including but not limited to, instructional materials, classroom and lab supplies, school and classroom library materials, education technology, deferred maintenance, professional development and other efforts to close the achievement gap. The remaining $133.4 million (25 percent) is for school district block grants that can be used for the school-site purposes mentioned above, as well as, home-to-school transportation and activities to address outstanding fiscal obligations. 3.$500 million for a block grant to districts for purchase of arts, music and physical education supplies and equipment. 4.$100 million for a block grant that districts may use for instructional materials, school and classroom library materials and education technology. 5.$50 million for teacher recruitment and retention grants to schools ranked in the lowest three deciles of the Academic Performance Index (API). 6.$50 million to the Child Care Facilities Revolving Fund for renovation of existing facilities or purchase of new relocatable child care facilities. These one-time funds are tied to $50 million in ongoing funds provided in the CONTINUED AB 1802 Page 3 budget for expansion of the State Preschool Program. 7.$40 million for grants to school districts to purchase equipment related to career technical education, including a $2.5 million set-aside tied to an allied health professions preparation program. 8.$30 million for supplemental instructional materials designed to assist K-12 students who are English learners. Funds may only be used in addition to standards-aligned materials adopted by the State Board. 9.$20 million for a multi-year research pilot program to identify best practices for improving the academic achievement and English language development of students who are English learners. 10.$15 million to restore funding to an existing parent/teacher involvement grant program. 11.$11.5 million in new funds for local education agencies to prepare for transition to the California Longitudinal Pupil Achievement Data System (CALPADS) in 2008. Of this total, the following amounts are available: $9.5 million in local assistance grants to school districts, county offices of education and charter schools for a less intensive version of California School Information System (CSIS) program; $1.5 million in associated state level CSIS activities; and $533,000 for related CSIS equipment (hardware and software) purchases. 12.$10 million to reimburse districts for their costs of developing fiscal solvency plans for addressing long-term unfunded liabilities related to retiree health benefits. 13.$10 million to provide a new cohort of Healthy Start grants to school districts and charter schools for start-up of comprehensive health programs on or near school sites. 14.$9 million to continue funding the Charter School Facilities Grant Program that helps offset the rental or lease costs of charter school facilities in economically CONTINUED AB 1802 Page 4 disadvantaged areas. 15.$5.5 million to districts for purchase of individual workbooks for students who have failed the California High School Exit Exam. 16.$5 million for a new cohort of grantees under the Early Mental Health Initiative. 17.$4 million for support of the K-12 High Speed Network. The budget provides a total of $15.6 million for support of this network. 18.$3 million in grants for school districts, county offices of education and charter schools for start-up of school breakfast programs. 19.$1.8 million for a new pilot program to increase the number of qualified high school math teachers and improve the capacity of existing high school math teachers. Community Colleges 1.$100 million in general purpose block grants to community college districts to be allocated based on a full-time equivalent student basis. Of this amount, $77.7 million is appropriated in this measure and $22.3 million is appropriated in the Budget Bill from the Proposition 98 Reversion Account. 2.$94.1 million to the community colleges for physical plant and instructional support. Funds are to be distributed to colleges on a per student basis. 3.$40 million for equipment, materials, and minor facility remodeling related to Career Technical Education. 4.$19.7 million associated with the implementation of a new community college funding formula. 5.$15 million for payment of outstanding audited mandate claims. CONTINUED AB 1802 Page 5 6.$5 million for community college professional development activities. 7.$2.5 million to develop a pilot program to recruit and retain full-time nursing faculty at the California Community Colleges. 8.$1.4 million for community college districts to complete connection to the California Research and Education Network. 9.$700,000 for the development and implementation of a community college electronic transcript exchange. 10.$500,000 for the development and implementation of a clinical nursing placement registry 11.$500,000 to conduct research and implement a community colleges statewide strategic plan 12.$100,000 to the Amador County Office of Education to study the feasibility of developing a community college in Amador County. OTHER K-12 EDUCATION PROVISIONS 1. Revenue Limit Equalization . Appropriates $350 million for equalization of school district revenue limit funding and specifies the method of equalization reflecting current law. (Sections 5, 6, & 42) 2. Deficit Factor Buyout . Eliminates revenue limit deficit factors for school districts and county offices of education in 2006-07. Deficit factors were applied as a result of revenue limit reductions and foregone cost-of-living adjustments (COLAs) in 2003-04. The budget provides $309 million to fully restore revenue limits to where they would have been without these reductions. (Sections 1 & 7) 3. Economic Impact Aid Augmentation . Changes, updates and simplifies the formula for distributing funds through the Economic Impact Aid program, which supports districts' compensatory education programs to improve CONTINUED AB 1802 Page 6 the achievement of economically disadvantaged and English learner students. This change is associated with a $350 million augmentation to the Economic Impact Aid program in the budget. (Sections 10-11, 14-16, 20, 22, 35-36) Specifically, the new formula: A. Changes the measurement of economically disadvantaged from CalWorks participant counts to census-based counts used for the federal Title I program. B. Calculates per pupil funding rates by dividing a district's total EIA funding by its Title I and English learner student data counts and holds districts harmless from any loss of per pupil funding in the future. C. Establishes equal funding weights for economically disadvantaged student and English learner student counts. D. Provides a concentration factor for districts with over 50 percent EIA eligible students. E. Provides a funding adjustment to each district calculated on the basis of $600 minus its per pupil funding amount. 4. Extension of the Special Disabilities Adjustment . Continues authorization of the disability adjustment calculation through 2006-07. This adjustment is intended to compensate schools for higher special education costs for some students with disabilities. (Section 17) 5. Cost Pool for High Cost Student Residing in Foster Care . Makes statutory changes to allow school districts to access funds from the extraordinary cost pool for students with disabilities residing in foster care placements. This is associated with a $2 million augmentation for the cost pool in the budget. (Section 18) 6. Extension of Pilot Program for Incarcerated Youth . CONTINUED AB 1802 Page 7 Extends the sunset for a state pilot program by six months - from January 1, 2007 to July 1, 2007. This action will allow a fifth and final year of funding for an interagency agreement between the Department of Education and CSU, San Bernardino to provide monitoring and technical assistance for special education programs for youth with disabilities incarcerated at the Division of Juvenile Justice, Department of Corrections and Rehabilitation. The budget provides $301,000 in federal carryover and General Funds for the final year of this pilot program in 2006-07. (Section 19) 7. CAHSEE Supplemental Intervention . Makes changes to a program created last year to provide supplemental funding for intensive remedial instruction to 12th graders who have not yet passed the California High School Exit Exam (CAHSEE). The changes modify the per-pupil rate from $600 to $500 per eligible 12th grade student and allow CDE to pro-rate remaining funds to serve 11th grade students who have not yet passed CAHSEE. The budget provides $69 million in ongoing funds for this program - an increase of $49 million in 2006-07. (Section 3) 8. High School Counselors . Creates a new block grant for districts to support additional counseling services for students in grades 7-12. (Section 13). Priority for counseling services would be given to students who are at-risk of not passing or who have not passed CAHSEE, as well as, students who are at-risk of not graduating high school due to insufficient credits. The budget provides a $200 million in new ongoing funding for this purpose in 2006-07. (Section 13) 9. School Meal Reimbursements . Increases the state meal rate for free- and reduced- price meals by seven cents in 2006-07. This change is tied to a $37.8 million increase in the budget for this purpose. (Section 12) 10. Migrant Housing Program . Allows the State Allocation Board to transfer unused funds from the inactive Migrant Housing Program to state school facility programs. (Section 2) CONTINUED AB 1802 Page 8 11. Proposition 98 Split . Suspends existing statute that specifies the division of Proposition 98 funding among K-12 educational agencies, community colleges, and other state agencies, and reflects a division of funding that conforms to that of the 2006-07 budget. (Section 4) 12. Appropriation of Program Deferrals . Defers $358 million in various program payments for second principal (P-2) apportionments by one month - from June 2007 to July 2007 - in order to continue budget savings implemented in recent years by scoring expenditures in the following fiscal year. (Section 37) 13. Expenditure Period for Program Deferrals . Extends the authorized expenditure period of appropriations made for specified K-12 programs in 2006-07 and 2007-08 by one month each - from June 30 to July 31. This action is needed to implement continuing apportionment deferrals from one-fiscal year to the next. (Section 39) 14. Proposition 98 Settle-Up Payments . Specifies the fiscal year for allocation of prior year settle-up payments pursuant to Chapter 216, Statutes of 2004. (Section 40) 15. Cost-of-Living (COLA) Adjustments . Declares that the budgeted COLA rate of 5.92 percent for various K-12 programs in 2006-07 is in-lieu of the COLA that would be applied pursuant to any other law. (Section 41) OTHER HIGHER EDUCATION PROVISIONS 1. CSU Student Fees . Shifts California State University (CSU) student fee revenue from the State Treasury to CSU campus-based trust funds. Adopts language to ensure that the expenditure of these funds is subject to audit by the State Controller's Office. (Section 34) 2. Community College Student Fees . Reduces the fees for California Community College students from $26 per unit to $20 per unit, effective for the spring 2007 academic term. (Section 33) 3. Community College Expenditure Deferrals . Continues to defer $200 million of community college expenditures CONTINUED AB 1802 Page 9 from the 2006-07 fiscal year to the 2007-08 fiscal year. (Section 38) 4. Nursing Program Loans . Makes minor modifications to the State Nursing Assumption Program of Loans for Education (SNAPLE) to encourage individuals to complete their graduate education and serve as nursing faculty at an accredited California college or university. (Sections 21-27) 5. Public Interest Attorney Loans . Modifies the Public Interest Attorney Loan Repayment Program to remove components hindering its operation. (Sections 28-32) COMMISSION ON TEACHER CREDENTIALING Restoration of Credential Appeals Programs . Restores two programs within the Commission on Teacher Credentialing that relate to the appeals process for allegations of misconduct. These programs were eliminated as a part of program efficiencies adopted in the 2005-06 budget. (Sections 8-9) FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No DLW:nl 6/27/06 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END **** CONTINUED