BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 1802|
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                                 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          WITHDRAWN FROM SENATE RULES COMMITTEE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 &  
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          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  

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             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  

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             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.


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           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  

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             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  .  

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             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)


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          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  

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             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

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