BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 374
                                                                  Page A
          Date of Hearing:   April 29, 2009

                                Kevin De Leon, Chair

                    AB 374 (Block) - As Amended:  April 14, 2009 

          Policy Committee:                              Education  

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No


          This bill requires the Superintendent of Public Instruction  
          (SPI) to produce a consequences of dropping out (CDO) notice to  
          inform pupils of the consequences of dropping out of school  
          prior to reaching 18 years old or completing high school  
          graduation requirements, as specified.  Specifically, this bill:  

          1)Requires the SPI to make the CDO notice available to school  
            district by posting it on the State Department of Education's  
            (SDE) website.  

          2)Requires the CDO notice to include the following information:  
            (a) specified consequences of dropping out before high school  
            graduation, such as reduced income; likelihood of engaging in  
            criminal activity and receiving public assistance; and the  
            less likelihood of properly caring for and educating children;  
            (b) the right and procedures of a pupil reenrolling in school  
            to complete graduation requirements; and (c) the availability  
            of alternative educational services, as specified.  

          3)Encourages a local education agency (LEA) to download the CDO  
            notice and distribute it to pupils enrolled in grades 9-12,  

           FISCAL EFFECT  

          One-time GF costs, likely in excess of $150,000, to the SDE to  
          develop the CDO notice and post it on its Internet website.  In  
          addition, there may annual, minor absorbable GF cost to maintain  


                                                                  AB 374
                                                                  Page B
          and update the CDO.  


           1)Purpose  .  According to the California Dropout Research Project  
            (CDRP) March 2009 statistics, the statewide graduation rate is  
            71.5%, which falls between the two rates reported by the  
            SDE.<1> The graduation rate for Asians exceeds 90%, while the  
            graduation rate for Whites is 80%. Graduation rates for  
            African American and Hispanic students are much lower at 60%,  
            or more than 20 percentage points below the rate for Asian and  
            White students. 

            The CDRP released a report in October 2008 entitled: Why  
            Students Dropout of School: A Review of 25 Years of Research  
            (Rumberger and Lim), which asserts that "No single factor can  
            completely account for a student's decision to continue in  
            school until graduation.  Dropping out is more of a process  
            than an event; for many students, the process begins in early  
            elementary school. A number of long-term studies that tracked  
            groups of students from preschool or early elementary school  
            through the end of high school were able to identify early  
            indicators that could significantly predict whether students  
            were likely to drop out or finish high school.  The two most  
            consistent indicators were early academic performance and  
            academic and social behaviors."  

            Furthermore, the report states "the decision to drop out is  
            not simply a result of what happens in school. Clearly  
            students' behavior and performance in school influences their  
            decision to stay or leave, but students' activities and  
            behaviors outside of school-particularly engaging in deviant  
            and criminal behavior-also influences their likelihood of  
            remaining in school."

            This bill requires the SPI to develop a CDO notice and make it  
            available on SDE's Internet website.  

           2)Fiscal implications of high school dropouts  .  According to the  
            CDRP's report: The Economic Losses of High School Dropouts in  
            California (Belfield and Levin, August 2007),  California  

          <1>In February 2009, the SDE reported a 9th grade to graduate  
          rate of 67.7% and a No Child Left Behind rate of 80.6%. 


                                                                  AB 374
                                                                  Page C
            experiences $46.4 billion in total in total economic losses  
            from each cohort of 120,000 20 year olds who never complete  
            high school; this is the equivalent of 2.9% of the Annual  
            State Gross Product.  The authors further state that the  
            average high school graduate earns $290,000 more over a  
            lifetime than a high school dropout and pays $100,000 more in  
            federal, state, and local taxes.  Likewise, more the  
            two-thirds of high school dropouts will use food stamps during  
            their working lifetime and a high school graduate is 68% less  
            likely to be on any welfare program.  

           3)Encourages versus authorize  .  This bill encourages LEAs to  
            download and distribute the CDO notice to pupils in grades  
            9-12.  The act of encouraging in state law is something that  
            this committee attempts to avoid simply because it does not  
            have significance.  However, authorizing an entity to do  
            something has more meaning.  As such, this committee  
            recommends that the bill be amended to authorize LEAs to  
            distribute the CDO notice to all pupils, not just those in  
            grades 9-12.      

           Analysis Prepared by  :    Kimberly Rodriguez / APPR. / (916)