BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 184
                                                                  Page  1

          AB 184 (Block)
          As Amended  August 17, 2010
          2/3 vote.  Urgency
          |ASSEMBLY:  |     |(May 4, 2009)   |SENATE: |34-0 |(August 18,    |
          |           |     |                |        |     |2010)          |
               (vote not relevant)

          Original Committee Reference:    BUDGET  

           SUMMARY  :  Extends the authority for the Superintendent of Public  
          Instruction (SPI) to allocate funds pursuant to the special  
          disabilities adjustment (SDA) formula for two additional years,  
          to the 2010-11 fiscal year, and makes the SDA formula  
          inoperative as of July 1, 2011 and repeals it as of July 1,  

           The Senate amendments  delete the Assembly version of this bill,  
          and instead extend the special disabilities funding adjustment  
          by two additional years, and sunset the SDA formula on July 1,  
          EXISTING LAW  requires the SPI through the 2008-09 fiscal year,  
          to perform a specified calculation to determine the adjusted  
          entitlement of each special education local plan area (SELPA)  
          for the incidence of special disabilities according to a  
          specified report.

           AS PASSED BY THE ASSEMBLY  , this bill expressed the intent of the  
          Legislature to enact statutory changes relating to the Budget  
          Act of 2009.

           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, this bill prevents reversion of $69.9 million in SDA  
          funds appropriated in the 2009-10 Budget Act.

           COMMENTS  :  AB 602 (Davis), Chapter 854, Statutes of 1997,  
          reformed special education funding by creating a system designed  
          to fund all Special Education Local Planning Areas (SELPAs)  
          based on the total number of average daily attendance (ADA) in  
          the area, regardless of the number of students receiving special  
          education services.  This approach was intended to eliminate  


                                                                  AB 184
                                                                  Page  2

          fiscal incentives for identifying students for special  
          education.  However, some argued that the "one-size-fits-all" AB  
          602 formula failed to account for the fact that the need for  
          special education services might differ across SELPAs.  

          Based on the findings of an American Institutes for Research  
          (AIR) study, beginning in 1998 the Legislature provided an  
          additional SDA appropriation to certain SELPAs found to have  
          higher incidences of severe and/or "high-cost" special education  
          students residing in their attendance areas in 1997.  An attempt  
          to update the study was made in 2004 however, because of  
          concerns with the data, the adjustment continues to be based on  
          1997 factors. 

          The 2009-10 Budget Act included funding for the SDA but did not  
          include the authority for California Department of Education  
          (CDE) to allocate the funds as had been the case in prior years.  
           However, the CDE has begun allocating these funds.  Absent  
          further action from the Legislature, CDE would need to pull back  
          these funds or adjust funding going forward.  However, because  
          the SDA payments have been counted toward the state's federally  
          required special education maintenance-of-effort level, the  
          funds likely need to continue to be spent for special education  

          This bill is part of the Budget Conference Committee's  
          compromise relative to the SDA formula, and consistent with the  
          compromise, it provides for the continuation of the SDA funding  
          through the 2010-11 fiscal year and repeals the existing formula  
          on July 1, 2011.  The compromise also provides federal funding  
          for a study to determine options for the replacement of the SDA  
          formula; however this bill does not address the issue of the  
           This bill was substantially amended in the Senate, and the  
          subject matter was not heard in Assembly policy committee this  
          legislative session.  The subject matter was however discussed  
          in the relevant Budget subcommittee and the Budget Conference  

          Analysis Prepared by  :    Marisol Avina / ED. / (916) 319-2087 

                                                               FN: 0006298 


                                                                  AB 184
                                                                  Page  3