BILL ANALYSIS SB 307 Page 1 Date of Hearing: August 27, 2009 ASSEMBLY COMMITTEE ON APPROPRIATIONS Kevin De Leon, Chair SB 307 (Alquist) - As Amended: August 24, 2009 Policy Committee: Education Vote:9-0 Urgency: Yes State Mandated Local Program: No Reimbursable: No SUMMARY This bill requires, for the 2009-10 fiscal year (FY) to the 2012-13 FY, a regional occupational center program (ROC/P), maintained by a joint powers authority (JPA), to receive its operating funds directly from the county office of education (COE) of the county in which it is located, as specified. Specifically, this bill: 1)Requires the ROC/P JPA to receive its operating funding in a manner consistent with the funding for school districts that comprise the JPA, which is provided to the COE pursuant to the annual budget act. 2)Authorizes a ROC/P JPA that receives funding under this measure to provide funding to the school district (pursuant to its JPA agreement). 3)Specifies that this measure does not prohibit any school district or COE from utilizing ROC/P funding allocated in the annual budget act for any educational purpose, as specified in SB 4 X3 (Ducheny), Chapter 12, Statutes of 2009 (the budget flexibility language enacted in February 2009). FISCAL EFFECT Potential GF/98 cost pressure, likely between $200,000 and $280,000, if a school district does not receive their funding from the ROC/JPA (see comment #3 below). There are 26 ROC/P JPAs in the state. As part of the February 2009 budget package, SB 4 X3 (Ducheny), Chapter 12, Statutes of 2009, provided local education agencies (LEAs) with policy and fiscal flexibility for all ROC/P programs funded in the budget act, including those operated by JPAs. SB 307 Page 2 This bill is contrary to these provisions because school districts participating in the ROC/P JPA will not have direct access to ROC/P funding in order to use in a flexibility manner. COMMENTS 1)Background . ROC/Ps provide high school students 16 years of age and older, and also adult students, with valuable career and technical education (CTE) so students can: (a) enter the workforce with skills and competencies to be successful; (b) pursue advanced training in higher educational institutions; and/or (c) upgrade existing skills and knowledge. There are 74 ROC/Ps in the state serving approximately 470,000 students in secondary schools. Of this number, 26 are operated by a JPA. ROC/Ps fall under one of three distinct organizational structures: (a) school districts participating in a COE-operated ROC/P; (b) school districts participating under a JPA; or (c) a single school district. This bill attempts to rectify funding issues related to ROC/P maintained by a JPA. SB 4 X3 (part of the February budget process), provided LEAs with unprecedented fiscal and policy flexibility related to over 40 categorical programs between the 2008-09 FY to the 2012-13 FY. Specifically, any LEA that received funding for specified categorical programs, including ROC/Ps, in the 2008-09 FY is authorized to use this funding for any other educational purpose until the 2012-13 FY. The LEA may choose to continue operating the categorical program that it received funding for or redirect it for any other educational purpose it deems appropriate. This bill, sponsored by the Metropolitan Education District, requires a ROC/P JPA to receive its funding directly from COEs, not school districts. The author argues this bill is technical clean-up to ensure that ROC/P JPA continue receiving their funding. 2)SB 1197 (Alquist), Chapter 519, Statutes of 2008 , requires, commencing with the 2009-10 FY, ROC/P JPAs to receive funding directly from COE in which it is located, instead of receiving funds from each of the school districts participating in the JPA. Prior to the enactment of Chapter 519, ROC/P JPAs received SB 307 Page 3 their funding from school districts participating in the JPA. The funding is based on their average daily attendance (ADA) (i.e., unit that generates the amount of revenue limit funding). As referenced above, SB 4 X3 (enacted in February 2009) established policy and fiscal flexibility for all ROC/P programs funded in the budget act, including those operated by JPAs. Presumably, the statutory flexibility allows school districts who receive ROC/P funding to do one of two things: (a) continue operating their programs or (b) redirect a portion or all funding for another education purpose during the time period established in statute. This bill requires, for the 2009-10 FY to the 2012-13 FY, a ROC/P JPA to receive its operating funds directly from the COE of the county in which it is located as set forth in SB 1197. As such, it is unclear if school districts participating in the JPA have access to their funding that is allocated for the ROC/P JPA and therefore, have the ability to utilize these funds in a flexible manner as established in SB 4 X3. 3)What happens to funding, if school districts participating in a ROC/P JPA program chooses not to participate ? This bill specifies that nothing prohibits any school district or COE from utilizing ROC/P funding allocated in the annual budget act for any educational purpose, as specified in SB 4 X3. However, it is unclear as to how the school district would access this funding for potential flexibility purposes if it decides not to participate in the ROCP/JPA. For example, under this bill, a COE allocates funding directly to the ROC/P JPA. If a school district chooses not to participate in the program, it is unclear (under local JPA agreements) if any or all of their funding would be returned to it. Therefore, school districts may be paying the ROC/P JPA and not having students served. If a school district does not receive their funding from the ROC/JPA, it is conceivable for a district to request a backfill from the COE or the state. The committee may wish to consider whether or not this bill should address issues related to a school district's desire to terminate the JPA agreement. Analysis Prepared by : Kimberly Rodriguez / APPR. / (916) 319-2081 SB 307 Page 4