BILL ANALYSIS                                                                                                                                                                                                    



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          CONCURRENCE IN SENATE AMENDMENTS
          AB 1802 (Budget Committee)
          As Amended June 27, 2006
          2/3 vote.  Urgency
           
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          |ASSEMBLY:  |     |(April 6, 2006) |SENATE: |     |(June 27,      |
          |           |     |                |        |     |2006)          |
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                     (vote not relevant)               (vote not  
          available)

          Original Committee Reference:    BUDGET  

           SUMMARY  :  Makes changes to a variety of education-related  
          statutes in order to effectuate the changes included as part of  
          the proposed 2006-07 Budget Act.  Contains statutory changes  
          necessary to implement the K-12 portion of the 2006 Budget.  

           The Senate amendments  delete the Assembly version of this bill  
          and instead:

           K-12 EDUCATION PROVISIONS

           1)Appropriate $2.05 billion in one-time Proposition 98 funds for  
            the following one-time K-12 purposes, to count toward funding  
            owed to meet the new estimate of the minimum Proposition 98  
            funding requirement for fiscal year (FY) 2005-06:

             a)   $534 million for discretionary block grants.  75% of  
               this amount is for school site block grants to go to all  
               schools, including charter schools, regional occupational  
               centers and programs, adult education schools, and  
               alternative schools, based on 2006-07 enrollment and  
               average daily attendance for a variety of purposes to be  
               determined by the school site council, including but not  
               limited to the following:  instructional materials,  
               classroom and lab supplies, school and classroom library  
               materials, education technology, deferred maintenance,  
               professional development and efforts to close the  
               achievement gap.  25% of this amount is for district block  
               grants based on 2006-07 enrollment and average daily  
               attendance, for uses limited to any of the above purposes,  
               as well as fiscal solvency purposes and home-to-school  
               transportation;








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             b)   $650 million to reimburse districts for prior-year  
               mandate claims that the state has not paid for a number of  
               years.  This amount is in addition to another $277 million  
               in the Budget that pays down the amount the state owes for  
               inadvertently appropriating less than the Proposition 98  
               minimum for schools in prior years.  These two amounts  
               total to $927 million to pay off prior-year mandate claims  
               for K-12, and pay off this debt to schools;

             c)   $500 million for a new block grant that districts may  
               use only for the following types of purchases:  arts and  
               music supplies and equipment and/or physical education  
               supplies and equipment;

             d)   $50 million for transfer to the Child Care Facilities  
               Revolving Loan Fund for the renovation of existing  
               preschool facilities or purchase of new preschool  
               facilities.  This augmentation is related to a $50 million  
               increase in ongoing funds for the expansion of the state's  
               preschool program, pursuant to legislation;

             e)   $100 million for a block grant that districts may use  
               for any of the following one-time uses:  instructional  
               materials, library materials or education technology;

             f)   Provides $50 million in one-time funds for a teacher  
               recruitment and retention block grant to the  
               lowest-performing 30% of schools, to help them attract and  
               retain credentialed teachers.  Eligible schools can use the  
               funds for the following purposes, including but not limited  
               to:  assuring a safe, clean school environment, providing  
               support services for students and teachers, activities  
               focused on the recruitment and retention of highly  
               qualified teachers, small group instruction, and providing  
               time for teachers and principals to collaborate.  This is  
               very similar to a proposal adopted in last year's Budget. 

             g)   $40 million for districts to purchase equipment related  
               to career technical education, with $2.5 million of this  
               amount set aside for capacity-building incentive grants for  
               schools serving grades 7-12 to create health related career  
               pathway programs;

             h)   $30 million for supplemental instructional materials  








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               designed to help English learners learn English;

             i)   $20 million for the multi-year local assistance costs  
               related to a pilot research project to identify best  
               practices for improving the academic achievement and  
               English language development of English learners;

             j)   $15 million to fund a home visitation parental  
               involvement program previously funded by the Legislature,  
               but recently discontinued due to the state fiscal crisis;

             aa)  $11 million to help accelerate the implementation of the  
               California Longitudinal Pupil Achievement Data System  
               (CALPADS), by providing grants to school districts not  
               currently participating in the California School  
               Information System, to ensure these districts have the  
               information technology capacity to fully participate in  
               CALPADS, once it is up and running;

             bb)  $10 million to provide new limited-term Healthy Start  
               grants to establish programs that provide health  
               information and services at school sites;

             cc)  $10 million to reimburse districts for their costs of  
               developing fiscal solvency plans related to their long-term  
               unfunded liabilities related to retiree health benefits;

             dd)  $9 million to continue funding the Charter School  
               Facilities Grant Program, which is an existing program that  
               supports the facility leasing costs of charter schools in  
               low-income areas;

             ee)  $5 million for a new cohort of grantees under the Early  
               Mental Health Initiative;

             ff)  $5.5 million for districts to purchase state-approved  
               individual intervention materials for students that have  
               failed the California High School Exit Exam (CAHSEE);

             gg)  $4 million for support of the K-12 High Speed Network;

             hh)  $1.8 million for a new Mathematics Teacher Partnership  
               Pilot Program to increase the number of qualified  
               secondary-level math teachers, improve the capacity of  
               existing secondary level teachers who teach math, and  








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               provide professional development in how to assist students  
               who are struggling to pass the math portion of the CAHSEE;  
               and,

             ii)  $3 million for additional school breakfast start-up  
               grants.

          2)Eliminate the deficit factor that was once used to track the  
            amount the state "owed" to districts as a result of denying a  
            statewide cost-of-living adjustment (COLA) to local  
            discretionary funds (revenue limits) several years ago due to  
            the state Budget crisis.  This change is linked to a $300  
            million increase in discretionary funds (deficit reduction) in  
            the budget.  The increase pays off what the state owed due to  
            its denial of the COLA several years ago, and establishes  
            revenue limits at the level they would be had the state not  
            denied the COLA during the last Budget crisis.

          3)Appropriate $350 million in ongoing funds for school district  
            revenue limit equalization, pursuant to a formula in existing  
            law that has been used for distributing equalization funds in  
            prior years.

          4)Change, update, and simplify the formula for distributing  
            funds through the Economic Impact Aid (EIA) program, which  
            supports districts' compensatory education programs to improve  
            the achievement of English learners and economically  
            disadvantaged students.  This change is associated with a $350  
            million (50%) augmentation to the EIA program in the Budget.   
            Specifically, 

             a)   Update the data used to measure the number of poor  
               students in a district, by replacing the current use of  
               CalWORKs data with Title I data;

             b)   Hold districts harmless from the change in formula by  
               calculating a new base funding amount for each district  
               based on their current total funding level divided by their  
               count of English learners and economically disadvantaged  
               students; and,

             c)   Provide funding to each district based on the distance  
               between their new base funding amount and the number 600.

          5)Extend the use of the existing special education disability  








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            adjustments through FY 2006-07.  These adjustments were  
            created several years ago to recognize the presence of a  
            higher incidence of high-cost special education students in  
            certain districts, but the adjustments have not been updated  
            for several years due to insufficient data.  

          6)Create a new block grant to increase students' access to  
            counseling services in grades 7-12.  This is associated with a  
            $200 million augmentation in the Budget for this purpose.  As  
            a condition of receiving funds through this program, school  
            districts must:

             a)   Give priority in providing the additional counseling  
               services to students at risk of not graduating from high  
               school; and,

             b)   Hold counseling meetings with students in grades 7 with  
               low test scores and students in grades 10 to 12 that have  
               failed to pass the CAHSEE, to identify needed course work  
               and services to help these students graduate from high  
               school and pass the CAHSEE.

          1)Make changes to a program created last year to provide  
            supplemental funding to provide intensive remedial instruction  
            to 12th graders who have not yet passed the CAHSEE.  The  
            changes modify the per-pupil rate from $600 to $500 per pupil  
            and allow the State Department of Education (SDE) to pro-rate  
            funding to all eligible funds if the number of eligible pupils  
            exceeds estimates and available funding.  

          2)Make statutory changes to allow an existing extraordinary cost  
            pool available to be used for the costs associated with foster  
            children not residing in licensed children's institutes.  This  
            is associated with a $2 million augmentation in the Budget for  
            this cost pool, which provides some relief to districts that  
            face extraordinary costs related to serving specified special  
            education students.  

          3)Increase the rate for the state supplement for free and  
            reduced price meals by $0.07, in accordance with a $37.8  
            million increase in the Budget for this purpose.  

          4)Allow the State Allocation Board to transfer unused funds from  
            the now-defunct School Housing Aid for Districts Impacted by  
            Seasonal Agricultural Employment program to the regular school  








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            facilities program.  

          5)Suspend, for FY 2006-07, the statutory requirement that a  
            specified percentage of total Proposition 98 appropriations be  
            for community colleges.

          6)Continue to defer $388 million in K-12 expenditures from FY  
            2006-07 to FY 2007-08.

          7)Extend by six months the sunset date for an existing  
            requirement that SDE enter into an interagency agreement with  
            California State University (CSU) San Bernardino to monitor  
            the Division of Juvenile Justice of the Department of  
            Corrections and Rehabilitation's compliance with federal  
            special education laws.

          8)Pre-pay a $150 million appropriation that was scheduled for  
            2007-08 to help pay schools for amounts the state owes them  
            for inadvertently appropriating less than the Proposition 98  
            minimum in prior-years ("settle-up" funds).
           
          HIGHER EDUCATION PROVISIONS
           
          9)Reinstate, for first-time teacher credential applicants, the  
            former two-tiered review process, the right to appear before  
            the Committee on Credentials and the mailing certification  
            requirements.  

           10)Shift the CSU student fees from the State's General Fund to  
            CSU's own Trust Fund.  

           11)Reduce the community college student fees from $26 per unit  
            to $20 per unit effective in spring of 2007.  

           12)Provide $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, $22.3  
            million are from the Proposition 98 Reversion Account.  

           13)Appropriate $15 million to community colleges for payment of  
            prior-year amounts owed for mandate cost claims that have been  
            audited.  

           14)Continue to defer $200 million of community college  
            expenditures from FY 2006-07 to FY 2007-08.  








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           15)Revise the State Nursing Assumption Program of Loans for  
            Education (SNAPLE), which is modeled after the existing  
            teacher APLE to encourage individuals to complete their  
            graduate education and serve as nursing faculty at an  
            accredited California college or university. 

           16)Authorize 100 new loan assumption warrants for the Public  
            Interest Attorney Loan Assumption Program.  
           
           AS PASSED BY THE ASSEMBLY,  this bill was a vehicle for a Budget  
          trailer bill.  


           Analysis Prepared by:      Leonor Ehling / BUDGET / (916)  
          319-2099


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