BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 189
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          ASSEMBLY THIRD READING
          AB 189 (Eng)
          As Amended  May 27, 2011
          Majority vote 

           EDUCATION           8-0         APPROPRIATIONS      12-5        
           
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          |Ayes:|Brownley, Norby, Ammiano, |Ayes:|Fuentes, Blumenfield,     |
          |     |          Buchanan,       |     |Bradford, Charles         |
          |     |Butler, Carter, Eng,      |     |Calderon, Campos, Davis,  |
          |     |            Williams      |     |Gatto, Hall, Hill, Lara,  |
          |     |                          |     |Mitchell, Solorio         |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |Nays:|Harkey, Donnelly,         |
          |     |                          |     |Nielsen, Norby, Wagner    |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Modifies the existing public hearing and reporting 
          requirements for participation in categorical flexibility.  
          Specifically,  this bill  :

          1)Requires local educational agencies (LEAs) to hold the 
            regularly scheduled public hearing to take testimony from the 
            public prior to and independent of a meeting where the school 
            district or the governing board of the county office of 
            education (COEs) adopts a budget.

          2)Requires the district and COE governing board, if it intends 
            to close a program, to identify in the hearing agenda notice 
            the program or programs it proposes to close.

          3)Requires the California Department of Education (CDE) to 
            establish a unique resource code for categorical programs 
            subject to the flexibility provision and inform LEAs that 
            these funds shall be considered general purpose nonrevenue 
            limit funding for the purposes of reporting expenditures. 

          4)Authorizes, until July 1, 2015, the governing board of a 
            school district to charge a fee for an adult education class 
            in English and citizenship.

           FISCAL EFFECT  :  According to the Assembly Appropriations 








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          Committee:

          1)General Fund (GF)/Proposition 98 costs, likely between $75,000 
            and $125,000, to school districts to report categorical 
            program information, as specified.  Currently, districts are 
            reporting minimal information on how they are spending their 
            categorical flexibility funds.  This bill requires school 
            districts to report more detailed information.  

          2)Increased GF administrative costs, likely less than $75,000, 
            to CDE to report fiscal information, as specified.  

           COMMENTS  :  There are approximately 60 categorical programs that 
          serve specific goals (e.g., to assist high school students in 
          passing the high school exit exam) or for specific programs 
          (e.g., Regional Occupational Programs/Centers, special 
          education).  There are also numerous statutes and regulations 
          that specify allowable use of categorical funds and how funds 
          are allocated.  The fiscal year (FY) 2009-10 Budget had an 
          important impact on categorical programs.  The Budget agreement 
          imposed a 20% reduction on 39 programs and gave LEAs that 
          received those funds in FY 2007-08 the flexibility to use the 
          funds for any educational purposes from FY 2008-09 through FY 
          2012-13 ÝSB 4 X3 (Ducheny), Chapter 12, Statutes of the 2009, 
          Third Extraordinary Session].  SB 70 (Senate Budget and Fiscal 
          Review Committee), Chapter 7, Statutes of 2011, extends this 
          flexibility until FY 2014-15.  This reduction and flexibility 
          provision is commonly known as "Tier 3" flexibility, which 
          essentially gives LEAs $4.5 billion in additional unrestricted 
          funds.  Tier 1 protected four categorical programs from cuts and 
          flexibility while 11 categorical programs sustained reductions 
          but were given no flexibility under Tier 2.  For Tier 3 funds, 
          school districts receive their allocations for seven years based 
          on the applicable percentage the programs received in FY 
          2007-08.  As a result, until 2015, LEAs are not required to 
          justify or report average daily attendance (ADA) in order to 
          receive the specified categorical funds.  

          Under current law, the governing board of a school district or 
          COE, at a regularly scheduled public meeting, must take 
          testimony from the public, discuss, approve or disapprove the 
          proposed use of the funding.  The sponsor of this bill, the 
          California Council on Adult Education, states that some 
          governing boards believe they have complied with the public 








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          meeting requirement through deliberation of the budget.  This 
          bill requires the governing board of a school district or COE to 
          hold the public meeting prior to and independent of a meeting 
          where the governing board of a school district or COE adopts a 
          budget.  The sponsor also states that adult education programs, 
          one of the 39 Tier 3 programs, are closing as a result of 
          categorical flexibility.  In order to ensure that the public has 
          an opportunity to express their concerns, this bill requires the 
          notice of the agenda to indicate the program or programs 
          proposed to be closed.  

          With the flexibility provisions, LEAs are not required to report 
          how much funds were diverted and to which programs they were 
          transferred.  As a result, there is no data available to discern 
          the extent to which LEAs diverted categorical funds for other 
          educational needs or the number of programs that have been 
          dismantled.  The Legislative Analyst's Office (LAO) has 
          conducted two surveys, in the fall of 2009 and 2010, in an 
          effort to ascertain the effects of flexibility and other 
          resources in helping LEAs balance their budgets.  The survey 
          results were based on 382 completed surveys out of the 1,000 
          school districts; the respondents represent 58% of the state's 
          ADA.  Among the findings in the survey is that more districts 
          are discontinuing programs in FY 2010-11 compared with FY 
          2009-10, including 7% of survey respondents report discontinuing 
          adult education programs in FY 2010-11.

          This bill also requires the CDE to assign a unique resource code 
          for all Tier 3 funding and requires the CDE to inform LEAs that 
          for purposes of reporting expenditures, Tier 3 funds shall be 
          considered general purpose nonrevenue limit funding (as opposed 
          to revenue limit funding or restricted categorical funding).  
          This is to enable the state to better track how Tier 3 funds are 
          spent as a whole without creating extraordinary burdens for LEAs 
          to report the expenditures for each Tier 3 program.  
           
           Adult education schools offer the following 10 programs:  Adult 
          Basic Education, English as a Second Language (ESL), High School 
          Diploma or Adult Secondary Education, including General 
          Education Development certification, Citizenship Preparation, 
          Career Technical Education, Adults with Disabilities, Health and 
          Safety, Parent Education, Home Economics, and Older Adult.

          Education Code Section 52612 authorizes districts to charge a 








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          fee required to maintain a class, except for three programs:  
          Adult Basic Education, ESL, and High School Diploma or Adult 
          Secondary Education, including General Education Development 
          certification classes.  This bill authorizes a LEA to charge 
          fees for English and citizenship classes.  According to the 
          author, some districts have discontinued ESL and citizenship 
          courses but would be willing to maintain them if fees are 
          allowed to be charged.  The author states that in order to 
          address the growing demand in English acquisition courses, 
          eliminating the prohibition to charge fees will prevent the 
          closure of those courses.  This bill authorizes the fees to be 
          assessed only while the flexibility provisions are in effect.    
           

          The California Council for Adult Education states, "California 
          Adult Schools help adult students find jobs, learn English, earn 
          degrees, become citizens and become better parents.  There are 
          5.3 million California adults without high school diplomas and 3 
          million English language learners who need access to adult 
          education resources in order to work in the state's economy.  As 
          categorical flexibility cuts deeper into adult education 
          programs, these opportunities will be lost, perhaps 
          permanently."
           
          Analysis Prepared by  :    Sophia Kwong Kim / ED. / (916) 319-2087 




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