BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 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  
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                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  







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                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. 







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          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. 







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                ?       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.








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              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

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