BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1610| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1610 Author: Assembly Budget Committee Amended: 10/7/10 in Senate Vote: 27 - Urgency PRIOR VOTE NOTE RELEVANT SUBJECT : Budget Act of 2010: Education SOURCE : Author DIGEST : Senate Floor Amendments of 1/7/10 delete the prior version of the bill which expressed the intent of the Legislature to enact statutory changes relating to the Budget Act of 2010. This bill now makes the necessary statutory changes in the area of Education in order to enact modifications to the 2010 Budget Act. ANALYSIS : This bill makes the following changes necessary to effectuate the 2010 Budget Act: 1. K-12 Education A. Revenue Limit Payment Deferral. Defers a total $1.7 billion in revenue limit payments for K-12 schools from April, May and June of 2010-11 to July of 2011-12. This reduces 2010-11 appropriations, but allows schools to retain general purpose funds for CONTINUED AB 1610 Page 2 programs in 2010-11. B. K-12 Inter-Year Deferral Hardship Waiver. Effective in 2011, allows LEAs facing financial hardship to continue to receive June apportionment payments scheduled to be deferred to July. A total of $300 million in school apportionment relief is authorized for LEA hardship waivers in June 2011. In order to be eligible for hardship waivers, school districts, county offices of education and charter schools must demonstrate that they will be unable to meet June payroll obligations without deferral waivers. C. K-12 Payment Deferrals. Continues about $906 million in inter-year categorical payment deferrals (from June to July of 2011). D. Appropriates Proposition 98 Settle Up Funds. Provides $210 million in one-time funds for K-12 schools and community colleges to satisfy Proposition 98 settle up obligations in 2009-10. Funds will be allocated to K-12 schools and community colleges on a per pupil basis and will count as payment against prior year mandate claims. (These funds are in addition to nearly $90 million in settle-up fund provided for 2010-11 mandate costs appropriated in the budget bill. This brings total 2009-10 settle up funding to $300 million.) E. Revenue Limit Deficit Factors. Establishes county office of education revenue limit deficit factor of 18.250 percent and school district revenue limit deficit factor of 17.963 percent in 2010-11 to continue revenue limit funding at 2009-10 levels. Revenue limit deficit factors keep track of foregone COLA increases in recent years, so they may be restored in future years when state funds are available. F. Cost- of- Living Adjustments (COLAs). Establishes a zero percent COLA for K-12 programs in 2010-11, instead of a negative COLA of -0.39 percent, as currently estimated. However, revenue limit AB 1610 Page 3 deficit factors are decreased by the amount of the negative COLA. G. 2009-10 Categorical Savings. Implements various categorical program reductions and program backfills to reduce appropriations in order to achieve $360 million in one-time program savings for various programs in 2009-10, and to achieve a $340 million reduction for the K-3 Class Size Reduction program in 2009-10. H. Establishes One-Time Statutory Appropriation for K-3 Class Size Reduction Program. Appropriates an unspecified amount of funding for the K-3 CSR program in 2010-11 as determined by the Superintendent of Public Instruction. I. Categorical Flexibility - Consolidate ELAP into EIA. Folds English Language Assistance Program (ELAP) funding into the Economic Impact Aid (EIA) funding to better serve English learner pupils. This action repeals the ELAP statute and clarifies that local educational agencies may continue using this funding for English language Professional Development Institutes. J. Access to Categorical Flexibility Funds for New Schools. Ensures that new charter schools created since 2008-09 can access categorical flexibility funds in 2010-11. AA. Charter School Facility Grant Funding. Converts funding from a reimbursement basis to a grant basis commencing in 2009-10, allowing the program to receive funding in the same year it is earned. BB. County Court Schools Funding. Authorizes county court schools to qualify for Economic Impact Aid funding, beginning in 2010-11, which will provide up to $3.1 million in new funding for economically disadvantaged and English learner pupils. States intent that the average daily attendance records of county court schools be reviewed as part of those schools' routine audits. AB 1610 Page 4 2. Child Care A. Reserve Cap. Places a five percent cap on local child care provider reserves. This cap only applies to the state funds portion of the centers reserves. B. Administrative Allowance. Lowers the limit for the administrative and services allowance of child care contracts from 19 percent to 17.5 percent. C. License-Exempt Provider Reimbursement Rate. Lowers the license-exempt child care provider reimbursement rate from 90 percent to 80 percent of the 85th percentile of Regional Market Rate (RMR). D. San Francisco Child Care Pilot. Extends the San Francisco child care pilot project until July 1, 2013. E. COLA. Provides zero Cost-of-Living Adjustment (COLA) for child care providers. F. Technical Changes. Creates technical fixes for 2009-10 child care budget. 3. K-14 Mandate Reforms A. Modification of K-12 Mandates to Preserve Underlying Statutes, While Eliminating or Reducing State Mandate Costs. Makes statutory changes to several mandates including National Board Certification, Pupil Promotion/Retention, Pupil Truancy Notifications, and School Accountability Report Card in order to continue programs, but remove unnecessary state costs. This list also includes modifications for two very costly state mandates: ? High School Science Graduation Requirement. Specifies that state apportionment funding is offsetting for this mandate, which was intended to be a part of the regular course of study, not an increase to the total number of classes taken by pupils. AB 1610 Page 5 ? Behavioral Intervention Plans. Eliminates ongoing state costs for a pending special education "behavioral intervention plan" mandate that is tied to regulations adopted by the State Board of Education, since state statute and resulting regulations implement federal mandates. B. K-14 Mandate Suspensions. Consistent with budget conference committee action, suspends approximately eight K-14 education mandates during the remaining period of categorical program funding flexibility (through 2012-13). C. Collective Bargaining Redetermination. Requests the Department of Finance to exercise its statutory authority to request the Commission on State Mandates to adopt a new test claim to supersede the existing test claim for the Collective Bargaining mandate affecting K-14 education. D. Mandates Working Group. Establishes a working group led by the Legislative Analyst's Office to examine K-14 mandates and make recommendations to the Legislature for future fiscal and policy action. 1. Community Colleges A. Deferrals. Increases community college apportionment cash deferrals by $189 million. Also, with DOF approval, provides hardship exemption for districts that do not have sufficient cash resources to sustain the deferral. B. ARRA MOE. Shifts $30 million in QEIA funds from 2010-11 to 2009-10 in order to maintain compliance with the federal ARRA Maintenance of Effort requirements. C. Career Technical Education. Removes Career Technical Education (CTE) from categorical flexibility and provides an additional $20 million for CTE. AB 1610 Page 6 D. University of California E. Retirement Plan. Repeals the intent language that University of California (UC) not use any new General Fund dollars for the UC Retirement Program (UCRP). F. University of California and California State University G. Student-Imposed Athletic Fees. States that campuses cannot spend any self-imposed campus student athletic fees on purposes other than those voted on by the students. H. American Recovery and Reinvestment Act. Appropriates a total of $3 million for new ARRA funds: $1 million for K-12, $1 million for University of California, and $1 for California State University. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No PQ:nl 10/7/10 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END ****