BILL ANALYSIS SB 1380 Page A Date of Hearing: June 30, 2010 ASSEMBLY COMMITTEE ON EDUCATION Julia Brownley, Chair SB 1380 (Hancock) - As Amended: June 22, 2010 SENATE VOTE : 35-0 SUBJECT : School facilities: career technical education facilities SUMMARY : Requires school facilities constructed or modernized using Career Technical Education Facilities program (CTEFP) funds to be used for career technical education (CTE) purposes for a minimum of 10 years. Specifically, this bill : 1)Requires the governing board of an applicant school district to submit a resolution adopted by the governing board stating the intent to use the facilities built or modernized with Proposition 1D funds set aside for the CTEFP for career technical education purposes and provide certification that the facility is being used for CTE purposes during the first year of occupation of the school facility. 2)Authorizes the governing board of a school district to seek a waiver of the CTE use requirement from the SAB if the facility or educational program of the school district changes during the initial 10 years of use. 3)Encourages a school district applying for a CTE grant to include teachers of CTE and members of the local CTE advisory committee in the design and planning process leading to the submission of an application that is a request for full funding or a reservation of funds. 4)Requires qualifying equipment purchased with CTEFP funds to have a life expectancy of at least 10 years, except that up to 25% of the funds may be used for the purchase of items or equipment with a life expectancy of at least five years. EXISTING LAW : 1)Establishes the CTEFP to provide funding to eligible local educational agencies (LEAs) to construct or reconfigure existing facilities, and to purchase equipment with an average SB 1380 Page B useful life expectancy of at least 10 years. 2)Provides that grants shall be allocated on a per-square-foot basis and shall not exceed $3 million per project per schoolsite for a new construction project and $1.5 million per project per schoolsite for a modernization project. 3)Provides that new construction grants shall only be allocated to comprehensive high schools that have an active Career Technical Advisory Committee and a clear and comprehensive Career Technical Education plan. Modernization grants may be awarded to comprehensive high schools or joint power authorities operating career technical education programs that have an active Career Technical Advisory Committee. 4)Requires a school district to contribute a 50% local match that can be provided by private industry groups, the school district, or a joint powers authority. Provides that the SAB shall not waive the local contribution for any basis, including financial hardship. 5)Authorizes the SAB to allow a repayment schedule for the local match consistent with the loan program established under the Charter Schools Facilities Program. 6)Establishes various CTE programs for public schools including but not limited to regional occupational centers and programs (ROC/Ps), partnership academies, adult education programs, and CTE programs in high schools and community colleges. 7)Requires the governing board of each school district participating in a CTE program to appoint a career technical education advisory committee to develop recommendations on the program and to provide liaison between the district and potential employers. FISCAL EFFECT : The Senate Appropriations Committee notes on the prior version of this bill that while the bill's provision to allow the purchaser of a limited amount of equipment with a life expectancy of 5 years would increase the number of eligible items, the bill's limitation on district discretion for use of facilities for a minimum of 25 years may serve to discourage district participation in the program, and actually serve to reduce pressure on the bonds. SB 1380 Page C COMMENTS : Current law establishes the School Facility Program (SFP) under which the state provides general obligation bond funding for various school construction projects, including new construction, modernization, joint-use facilities, and programs to specifically address the construction needs of overcrowded schools, charter schools, and CTE facilities. Proposition 1D, authorized by AB 127 (Nunez and Perata), Chapter 35, Statutes of 2006, and approved by the voters in November 2006, provided $7.3 billion for kindergarten through grade 12 school facilities, and established the CTEFP within the SFP, providing $500 million to construct or modernize facilities and to purchase equipment with an average useful life expectancy of at least 10 years for CTE programs at existing comprehensive high schools. The CTEFP authorizes a grant of $3 million per project per schoolsite for new construction projects and $1.5 million per project per schoolsite for modernization projects. The CTEFP also requires a school district to contribute from local resources a dollar amount equal to the amount of the state grant provided and authorizes the contribution to come from private industry groups, the school district, or a joint powers authority. The SAB is prohibited from waiving the local contribution on any basis, including for hardship assistance. However, the SAB may authorize a repayment schedule and a loan similar to that provided under the Charter School Facilities Program. There are two funding options for CTEFP funds. A LEA may request full funding for a project that has already received approval from the California Department of Education (CDE) and the Division of State Architect (DSA)<1>, considered "construction ready" projects. Otherwise, it may request a reservation of funds and have up to 12 months to obtain the CDE and DSA approvals. Current status of the CTEFP . According to the Office of Public School Construction (OPSC), approximately $409 million of the $500 million has been apportioned to fund approximately 455 --------------------------- <1> The SFP requires approval from CDE, to ensure that the selected site and school specifications are safe and meet the school's education plan, and the DSA, to ensure that the architectural design plans meet fire, life and safety requirements, Field Act requirements, and access requirements under the Americans with Disability Act specified in law and in state regulations. SB 1380 Page D CTEFP projects in the first and second cycles of funding. A total of $91 million remains in the program. The deadline for applications for the third cycle was March 31, 2010, with applications totaling $231 million submitted. OPSC anticipates SAB approval at the end of the year. According to the author, "Several issues have surfaced in the past 2 and a half years which will benefit from legislative review. The Career Technical Education grant program is in need of modification - more assurance that the classrooms built or modernized with the funds are truly used for CTE in the future?" The author further states that the equipment shelf life requirement needs to be revised. This bill specifies that facilities constructed or modernized using CTEFP funds must be used for CTE program purposes for at least 10 years. None of the other programs (e.g., charter schools, joint use) have similar requirements. Presumably, the purpose of this requirement is to ensure that districts are not applying for these funds with the real intention of using them for regular classrooms and to ensure the longevity of CTE programs. It is not known if any district has converted CTE facilities funded by the CTEFP into regular classroom use. Supporters would argue that the CTEFP was established to encourage and enable the establishment of CTE programs, and as such, districts should not be allowed to drop the programs housed in facilities constructed with bond funds dedicated for CTE programs for other facilities uses. Research has shown that CTE opportunities for pupils may provide relevance to the high school curriculum and engage pupils who may be at risk of dropping out. Existing law establishes various CTE programs for public schools including but not limited to ROC/Ps, partnership academies, adult education programs, agricultural programs, tech-prep programs, and CTE courses that may be offered in secondary schools and community colleges. The bill requires a local governing board interested in applying for CTEFP funds to adopt a resolution stating its intent to use the facilities for CTE purposes and if funded, requires the governing board to certify its use during the first year of occupation of the facility. An argument can be made that the value of CTE programs notwithstanding, the use of facilities should not dictate the long-term educational program of a school. There could be unforeseeable factors in the future that SB 1380 Page E may cause a district to discontinue a CTE program or course, including increase or decrease enrollment, inability to secure qualified CTE teachers, changes in the labor market and the demand for certain types of training, or funding challenges. To address that concern, the bill authorizes a governing board to seek a waiver from the SAB of the requirement to use the facility for CTE purposes for 10 years if the facility or educational program of the school district changes during that time. However, it is unclear what criteria will be used to grant or reject a waiver. Is a waiver granted simply upon request by a governing board? Will the SAB need to develop regulations? Is the SAB the most appropriate body to determine whether a district must keep a facility and therefore the educational program for CTE? The CDE may be a more appropriate entity to evaluate enrollment and programmatic needs. Staff recommends requiring the CDE to review the waiver request and provide a recommendation to the SAB for final determination. Staff also recommends establishing the following criteria for consideration of a waiver: 1)Enrollment changes; 2)Enrollment changes in the CTE program; 3)Changes in labor market demand; 4)Inability to hire teaching staff with proper credentials; 5)The district's fiscal conditions; and, 6)Other factors presented by the LEA and deemed significant by the SAB. The CTEFP authorizes funds to be used for equipment with a 10-year lifecycle. This requirement has been a source of complaint since the inception of the program. Districts argue that equipment for some CTE programs, such as broadcasting and digital editing equipment or even specialized systems for automotive repair programs, may not have a 10-year lifecycle, but are necessary for the programs. This bill authorizes districts to use up to 25% of the funds for equipment purchases to be used for equipment with a lifespan of at least five years. Equipment for CTE programs may have extensive electronic components and require high energy use. Staff recommends SB 1380 Page F encouraging LEAs to purchase energy efficient and/or environmentally preferable equipments, to the extent they are available. Another issue that has arisen is the appropriate entity to evaluate the equipment. Districts have expressed frustration that equipment approved as part of the CDE approval process has been rejected by the OPSC. Equipment may be an integral part of CTE programs. Should evaluation of equipment, including whether it meets the five or ten-year lifecycle requirement, be conducted by the CDE rather than OPSC? The bill's requirements apply to all CTEFP projects funded under Proposition 1D, the Kindergarten-University Public Education Facilities Bond Act of 2006. Staff recommends deleting the reference to Proposition 1D. This bill's provisions should apply to all CTEFP projects, regardless of the bond source. REGISTERED SUPPORT / OPPOSITION : Support California Association of Leaders of Career Preparation California Association of Regional Occupational Centers and Programs Small School Districts' Association Opposition None on file Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087