BILL ANALYSIS SB 847 Page 1 SENATE THIRD READING SB 847 (Steinberg) As Amended August 30, 2010 2/3 vote. Urgency SENATE VOTE :Vote not relevant EDUCATION 9-0 APPROPRIATIONS 13-0 ----------------------------------------------------------------- |Ayes:|Brownley, Nestande, | |Fuentes, Conway, | | |Ammiano, Arambula, | |Bradford, | | |Carter, Eng, Miller, | |Charles Calderon, Coto, | | |Norby, Torlakson | |Davis, Gatto, Hall, | | | | |Nielsen, Norby, Solorio, | | | | |Torlakson, Torrico | |-----+--------------------------+-----+--------------------------| | | | | | ----------------------------------------------------------------- SUMMARY : Creates an urgency statute that appropriates $1,201,534,585 from the Federal Trust Fund for the purposes of implementing the federal Education Jobs and Medicaid Assistance Act of 2010 (Education Jobs Act), Public Law 111-226. Specifically, this bill : 1)Appropriates $1,201,534,585 from the Federal Trust Fund to the Office of Planning and Research (OPR), and authorizes $128,000 of those federal funds to be available to OPR for the purpose of providing oversight of Education Jobs Act funds allocated to local educational agencies (LEAs). 2)Requires that $1,201,406,585 of those federal funds be transferred to the California Department of Education (CDE) for the purpose of implementing the Education Jobs Act, and requires those funds to be expended as follows: a) $1,199,906,585 to be allocated to LEAs in an amount proportional to the amount calculated for the 2010-11 fiscal year for school district total revenue limits, county office of education revenue limits, and the revenue limit portion of charter school operational funding. Also requires a preliminary allocation equal to 90% of the estimated final allocation, with that estimate based on 2009-10 data, to be distributed no later than 14 days SB 847 Page 2 following the enactment of this bill or the notification of an award for federal funding, whichever is later; and, b) $1.5 million to be available to the CDE for administrative purposes related to the allocation of Education Jobs Act funds to LEAs. 3)Clarifies that LEAs are required to use allocated Education Jobs Act funds in a manner consistent with the requirements of the Education Jobs Act and any related federal regulations or guidance, and requires the funds to be used only for compensation, benefits and other expenses, including support services, necessary to retain existing employees, to recall or rehire former employees, and to hire new employees, where those employees provide school-level educational and related services. 4)Authorizes any LEA that receives an allocation of Education Jobs Act funds and has funds remaining after fiscal year 2010-2011, to use those remaining funds through September 30, 2012, for the purposes specified. EXISTING LAW requires expenditure authority to be granted, through an appropriation in the Budget Act, a continuous statutory appropriation or through an appropriation in special legislation, before a state agency or department is able to expend or allocate funds to other entities, such as LEAs. FISCAL EFFECT : According to the Assembly Appropriations Committee, this bill distributes $1.2 billion in federal Education Jobs Act funding to LEAs. 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. COMMENTS : On August 10, 2010, President Obama signed HR 1586 into law, enacting the Education Jobs Act which includes $16.1 billion in expanded Federal Medical Assistance Percentage (FMAP) funding for the states and $10 billion in education funding provided to the states to support an estimated 160,000 education jobs nationwide. The Education Jobs Act requires that the education funds provided to the states be spent by LEAs to prevent teacher layoffs in the 2010-11 school year, that those funds be expended by September 30, 2012, that the funding be SB 847 Page 3 allocated to LEAs based on a state's primary funding formula as specified in the state's State Fiscal Stabilization Fund (SFSF) application or each districts' relative share of federal Title I funds, that states show that they have met maintainence of effort provisions, and that this funding not be used to supplant state education funding or provide a funding reserve. The $10 billion in education funding will be allocated to the states proportional to state population; California has received an award of over $1.2 billion. The United States (U.S.) Department of Education (USDOE) estimates that this funding will save approximately 16,500 teacher jobs in California; an estimated 22,000 teachers received layoff notices in spring of this year. According to U.S. Secretary of Education (USSE) Arne Duncan, "With the support of the jobs bill, these educators will be helping our children learn instead of looking for work. This is the right thing to do for our children, for our teachers, and for our economy." In order to ensure that states receive funding as quickly as possible, USDOE is streamlining the application process to allow states to submit applications in an expedited manner. The Governor submitted California's application for these funds on August 13, 2010. In that application the Governor responded that the state's primary funding formula as specified in the state's State Fiscal Stabilization Fund (SFSF) application would be used to allocate funds to LEAs, and provided a number of assurances related to this program. On August 27, 2010, the USDOE awarded Education Jobs Act funding to California in the amount of $1.2 billion. The purpose of this bill is to appropriate these federal funds and provide the appropriate state entity with the expenditure authority necessary for the allocation of these funds to LEAs at the earliest time possible. This bill distributes these funds to LEAs (including charter schools) in an amount proportional to each LEA's revenue limit (general purpose) funding in the 2010-11 FY. Analysis Prepared by : Gerald Shelton / ED. / (916) 319-2087 FN: 0006839 SB 847 Page 4