BILL ANALYSIS                                                                                                                                                                                                    


          |SENATE RULES COMMITTEE            |                   AB 184|
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                                 THIRD READING

          Bill No:  AB 184
          Author:   Block (D), et al
          Amended:  8/17/10 in Senate
          Vote:     27 - Urgency

           SENATE FLOOR  :  26-1, 9/12/09 (FAIL)
          AYES:  Alquist, Calderon, Cedillo, Corbett, Correa,  
            DeSaulnier, Ducheny, Florez, Hancock, Kehoe, Leno, Liu,  
            Lowenthal, Maldonado, Negrete McLeod, Oropeza, Padilla,  
            Pavley, Price, Romero, Simitian, Steinberg, Wiggins,  
            Wolk, Wright, Yee
          NOES:  Wyland
          NO VOTE RECORDED:  Aanestad, Ashburn, Benoit, Cogdill, Cox,  
            Denham, Dutton, Harman, Hollingsworth, Huff, Runner,  
            Strickland, Walters

           SENATE EDUCATION COMMITTEE  :  7-0, 8/11/10
          AYES:  Romero, Huff, Emmerson, Hancock, Liu, Simitian,  
          NO VOTE RECORDED:  Alquist, Price

           SENATE APPROPRIATIONS COMMITTEE  :  11-0, 8/12/10
          AYES:  Kehoe, Ashburn, Alquist, Corbett, Emmerson, Leno,  
            Price, Walters, Wolk, Wyland, Yee

           ASSEMBLY FLOOR  :  Not relevant

           SUBJECT  :    Special education funding

           SOURCE  :     Author



                                                                AB 184

           DIGEST  :    This bill continues the current special  
          education incidence factor formula through the 2010-11  
          fiscal year and makes the adjustment inoperative on July 1,  

           ANALYSIS  :    In 1997, the Legislature reformed special  
          education funding (AB 602 [Davis], Chapter 854, Statutes of  
          2007) to move from a formula based on the number of special  
          education pupils to one based on a school district's  
          overall average daily attendance (thereby removing an  
          incentive to identify higher numbers of pupils as needing  
          special education to drive an increase in funding).  As  
          part of this reform, a funding mechanism was created to  
          provide additional funding to special education local plan  
          areas (SELPAs) having a disproportionately large number of  
          "high-cost" special education pupils.  This funding is  
          based on an incidence multiplier that was developed  
          pursuant to a study completed in 1998 by the American  
          Institutes of Research (AIR).

          Recognizing that these factors may change over time,  
          special education funding reform called for the incidence  
          multiplier to expire after the 2002-03 fiscal year, and  
          called for a new study to be completed by March 2003.  AIR  
          completed this second study, which recommended that the  
          incidence multiplier be updated at least every five years,  
          if not annually, and that the state gradually phase-out  
          SELPAs that have been receiving adjustment funds for the  
          five years prior to the release of the report, and provide  
          full and immediate funding to SELPAs identified as  
          responsible for a disproportionate number of high cost  

          The Legislature has passed six bills to extend the  
          calculation of the special disabilities adjustment, each  
          for an additional fiscal year, with the latest extending  
          this calculation to the 2008-09 fiscal year.

          Existing law adjusts funding for individuals with  
          exceptional needs based on an incidence multiplier, as  
          defined, for each SELPA.

          Current law requires the Superintendent of Public  



                                                                AB 184

          Instruction to annually calculate the special disabilities  
          adjustment for each SELPA based on the incidence multiplier  
          established pursuant to the 1998 American Institutes for  
          Research report.

          Specifically, this bill:

          1.Continues the current special education incidence factor  
            formula through the 2010-11 fiscal year.

          2.Requires that the Superintendent of Public Instruction  
            (SPI) to calculate the special disabilities adjustment of  
            each SELPA for the incidence of disabilities for the  
            2010-11 fiscal year.

          3.Specifies that the special disabilities adjustment for  
            the 2009-10 and 2010-11 fiscal years is to be excluded  
            from the SELPA's base special education funding (per unit  
            of average daily attendance).

          4.Requires the SPI to calculate the special disabilities  
            adjustment for the 2009-10 and 2010-11 fiscal years and  
            adjust this funding for each SELPA regardless of when  
            this bill becomes operative.

          5.Becomes inoperative on July 1, 2011, and as of January 1,  
            2012, is repealed, unless a later enacted statute, that  
            becomes operative on or before January 1, 2012, deletes  
            or extends the dates.

          6.Includes and urgency clause.


           The CDE has annually calculated and allocated the special  
          disabilities adjustment, beginning with the 1998-99 fiscal  
          year.  This funding is sent to SELPAs as part of the  
          overall special education funding, and is made in monthly  
          payments.  CDE began sending monthly payments to SELPAs for  
          the 2009-10 fiscal year in February 2010 (as part of the  
          First Principal Apportionment, also knows as P1), under the  
          assumption that the special disabilities adjustment would  
          continue to be included in the overall special education  
          funding (for those SELPAs that are eligible for the special  



                                                                AB 184

          disabilities adjustment).  However, while the 2009 Budget  
          Act included an appropriation for the special disabilities  
          adjustment (as part of overall special education funding),  
          statutory authority to allocate those funds for the 2009-10  
          fiscal year was not included in the budget trailer bill  
          language, as had been the case in prior years.  As part of  
          the P1 notification to SELPAs, CDE included a link to the  
          calculations used to determine the 2009-10 PI, which  
          specifically states that authority to use the special  
          disabilities adjustment in the calculation of overall  
          special education funding was not extended to the 2009-10  
          fiscal year and that CDE will not include multipliers or  
          special disabilities adjustment funding in its Second  
          Principal Apportionment (P2) calculation if the statute is  
          not extended.  At the point of the P2 calculation (June  
          2010), school districts within SELPAs that received these  
          funds had already included the special disabilities  
          adjustment funding in their budgets and expended some of  
          those funds.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee:

                          Fiscal Impact (in thousands)

           Major Provisions             2010-11             2011-12          
              2012-13            Fund

           Special Disabilities        Prevents reversion of $69.9  
          million in         General*
            Adjustment                  funds appropriated in the  
                                                 Budget Act.

          *Counts toward meeting the Proposition 98 minimum funding  

           SUPPORT  :   (Unable to verify at time of writing)

          San Diego Unified School District

           ARGUMENTS IN SUPPORT  :    According to the author's office,  



                                                                AB 184

          the state budget last year included funds for the 2009-10  
          special disabilities adjustment and the California  
          Department of Education (CDE) has been sending school  
          districts their special disabilities adjustment funding  
          this past year.  In June 2010, CDE announced that it did  
          not have the authority for its distribution in the 2009-10  
          fiscal year and without emergency legislation it would  
          alert the State Controller to offset 2010-11 special  
          education apportionments for school districts that received  
          and spent 2009-10 special disabilities adjustment funds.

          CPM:cm  8/17/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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