BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 847
                                                                  Page  1

          Date of Hearing:   August 30, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  SB 847 (Steinberg) - As Amended:  August 26, 2010 

          Policy Committee:                             Education Vote:9-0

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

           SUMMARY  

          This bill,  as proposed to be amended  , appropriates $1.2 billion  
          in federal Education Jobs and Medicaid Assistance Act (ED Jobs  
          Act) funding to the Office of Planning and Research (OPR) in the  
          2010-11 fiscal year (FY) for distribution to local education  
          agencies (LEAs) for the purposes of rehiring, hiring, and  
          retaining public school employees.  Specifically, this bill: 

          1)Appropriates $128,000 to OPR for the purpose of providing  
            oversight of ED Jobs Act funding.  

          2)Transfers $1.199 billion to the State Department of Education  
            (SDE) for distribution to LEAs (including charter schools) in  
            an amount equal to each LEA's proportion of its revenue limit  
            (general purpose) funding in the 2010-11 FY.  

          3)Requires SDE to calculate a preliminary allocation equal to  
            90% of the estimated final LEA allocation (based on each LEA's  
            proportion of its revenue limit for the 2009-10 FY).  This  
            measure also requires SDE to distribute the ED Jobs Act funds  
            no later than 14 days following the effective date of this act  
            or notification to the state of a federal funding award,  
            whichever is later.

          4)Appropriates $1.5 million to SDE for administrative purposes  
            related to the allocation of the ED Jobs Act funding.  

          5)Requires ED Jobs Act funds allocated pursuant to this measure  
            be used to retain existing employees, to recall or rehire  
            former employees, and to hire new employees, where those  
            employees provide school-level or educational and related  
            services.  

          6)Authorizes LEAs who have any remaining ED Jobs Act funds after  
            the 2010-11 FY to use these funds through September 30, 2010  





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            for the purposes specified above.  

           FISCAL EFFECT  

          This bill distributes $1.2 billion in federal ED Jobs Act  
          funding to LEAs, as specified.  Of this amount, $128,000 is  
          allocated to OPR to perform oversight duties regarding these  
          federal funds and $1.5 million is allocated to SDE for  
          administrative purposes, as specified.  

           COMMENTS  

           1)Purpose  .  On August 10, 2010, President Obama signed the  
            federal Education Jobs and Medicaid Assistance Act (ED Jobs  
            Act), which provides $16.1 billion in expanded Federal Medical  
            Assistance Percentage funding and $10 billion in education  
            funding to states.  California's portion of the education  
            funding is $1.2 billion, which is estimated to support 16,500  
            education jobs in the state.  

            In order to receive the ED Jobs Act funds, the governor  
            submitted an application to the federal government on August  
            13, 2010.  The application required states to meet a number of  
            requirements outlined by the United States Department of  
            Education (USDE), including distributing funds in a timely  
            manner for use in the 2010-11 school year; not requiring LEAs  
            to apply for the funding if they have received State Fiscal  
            Stabilization Funding (SFSF) under the American Recovery and  
            Reinvestment Act of 2009 (ARRA); complying with maintenance of  
            effort (MOE) requirements, and utilizing no more than two  
            percent of funding for administrative purposes.  

            On August 27, 2010, USDE awarded California $1.2 billion in  
            federal ED Jobs Act funding.  This bill appropriates this  
            funding to LEAs for their immediate use in the 2010-11 school  
            year, as specified.    

           2)Committee amendments - change in distribution formula  .  The  
            current version of the bill, as heard by the Assembly  
            Education Committee on Wednesday, August 25, 2010, distributes  
            the federal ED Jobs Act funds to LEAs on the basis of average  
            daily attendance.  Essentially, LEAs would receive an equal  
            per pupil funding amount.  

            After the initial bill hearing, USDE informed the Department  
            of Finance this distribution formula was unacceptable because  
            the federal ED Jobs Act requires states to distribute their  
            funding to school districts based on the state's primary  





                                                                  SB 847
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            funding formula (i.e., Proposition 98) identified in its  
            federal SFSF application or a school districts' relative share  
            of federal Title I funds for poor and needy pupils.  

            California's approved application states the ED Jobs Act funds  
            will be distributed based on the state's primary funding  
            formula, as specified in its federal SFSF application.  As a  
            result, this measure, as proposed to be amended, distributes  
            the federal ED Jobs Act funds to LEAs (including charter  
            schools) in an amount equal to each LEA's proportion of its  
            revenue limit (general purpose) funding in the 2010-11 FY.  

           3)Related legislation .  AB 185 (Buchanan), pending in the Senate  
            Appropriations Committee, allocates a total of $483 million in  
            SFSF (phase two) funding authorized under ARRA to K-14  
            schools, the California State University (CSU), and the  
            University of California (UC).  The following table details  
            this proposed appropriation: 

                       -------------------------------------- 
                      |                  |   Phase 2 SFSF    |
                      |                  |    Allocation     |
                      |------------------+-------------------|
                      |K-12 schools      |       $271 million|
                      |------------------+-------------------|
                      |Community         |         $5 million|
                      |Colleges          |                   |
                      |------------------+-------------------|
                      |CSU               |       $106 million|
                      |------------------+-------------------|
                      |UC                |       $106 million|
                      |------------------+-------------------|
                      |Total             |$488               |
                      |                  |million            |
                       -------------------------------------- 
           

          Analysis Prepared by  :    Kimberly Rodriguez / APPR. / (916)  
          319-2081