BILL ANALYSIS AB 1802 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1802 (Budget Committee) As Amended June 27, 2006 2/3 vote. Urgency ----------------------------------------------------------------- |ASSEMBLY: | |(April 6, 2006) |SENATE: | |(June 27, | | | | | | |2006) | ----------------------------------------------------------------- (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; AB 1802 Page 2 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 AB 1802 Page 3 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 AB 1802 Page 4 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 AB 1802 Page 5 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 AB 1802 Page 6 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. AB 1802 Page 7 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 FN: 0015323