BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 1186
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          Date of Hearing:   May 15, 2013

                                  Mike Gatto, Chair

                    AB 1186 (Bonilla) - As Amended:  May 6, 2013 

          Policy Committee:                              Education  

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


          This bill extends the provisions of categorical funding  
          flexibility by five years (2014 to 2019) and allows only local  
          education agencies (LEAs) to continue using these funds for any  
          educational purpose, if they use at least 9% of the total amount  
          of funds they receive for specified purposes.  Specifically,  
          this bill: 

          1)Requires LEAs to use at least 9% of total flexed categorical  
            program funds for a combination, of the following purposes: 

             a)   Professional development for certificated and  
               administrative employees to implement the Common Core (CC)  
             b)   Purchasing technology for the purpose of implementing  
               state assessments aligned with the CC Standards. 
             c)   Implementation of programs that integrate science,  
               technology, engineering, and mathematics, as appropriate  
               for grades 7-12.  

          2)Deems these provisions inoperative if either the following  

             a)   The total amount provided for flexed categorical  
               programs in the 2013-14 fiscal year (FY) is increased by  
               less than 18% over the amount provided for this programs in  
               the 2012-13 FY.  
             b)   A local control funding formula for grades K-12 is  
               enacted during the 2013-14 Legislative Session.  

          3)Requires the State Department of Education (SDE), if it  


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            determines these provisions apply, to promptly display this  
            fact on its Internet website.  

           FISCAL EFFECT  

          GF/98 cost pressure of at least $823.2 million to increase the  
          amount of funding provided to flexed categorical programs by  
          18%.  If this were to occur, the bill requires 9% of these total  
          funds ($484.7 million GF/98) to be spent on specified purposes.   


           1)Background  .  As part of the February 2009 budget package, SB 4  
            X3 (Ducheny), Third Extraordinary Session, Chapter 12,  
            Statutes of 2009, provided local education agencies (LEAs)  
            with unprecedented fiscal and policy flexibility related to  
            over 40 categorical programs, between FY 2008-09 and FY  
            2012-13. Specifically, any LEA that received funding for  
            specified categorical programs in FY 2008-09 is authorized to  
            use this funding for any other educational purpose until FY  
            2012-13.  The LEA may choose to continue operating the  
            categorical program it received funding for, or redirect it  
            for any other educational purpose it deems appropriate. SB 70  
            (Committee on Budget and Fiscal Review), Chapter 7, Statutes  
            of 2011, extended this flexibility until FY 2014-15. 

            This bill extends the flexibility for five years until 2019-20  
            FY and only allows school districts to continue using these  
            for any educational purpose if they devote 9% of these funds  
            to specified purposes.    

           2)Purpose  .  As a condition of applying for the federal Race to  
            the Top (RTT) grant program, states were required to adopt the  
            CC Standards in ELA and mathematics by the fall of 2010. In  
            August 2010, the SBE adopted these standards. 

            The U.S. Department of Education, using RTT grant funding,  
            issued a competitive grant for the development of a  
            comprehensive assessment system based on the CC Standards in  
            ELA and mathematics that would adhere to the testing  
            requirements of the federal Elementary and Secondary Education  
            Act (ESEA). ESEA requires testing in ELA and mathematics in  
            grades three through eight and once in grades ten through 12. 


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            Two assessment consortia were funded through this process: the  
            Partnership for the Assessment of Readiness for College and  
            Careers and the SMARTER Balanced Assessment Consortium  
            (SMARTER Balanced). Each consortium was awarded grant funding  
            to develop an assessment system aligned to the CC Standards in  
            ELA and mathematics and to help participating states  
            transition implementing the standards and the common  
            assessments. Both consortia are scheduled to operationalize  
            assessments 2014-15 and include use computer administered  

            The author contends the state is in this midst of undergoing a  
            major instructional transformation with the implementation of  
            new standards and assessments.  LEAs will need to revamp their  
            current professional development training, purchase  
            instructional materials aligned to the new standards, and  
            purchase technology to administer the SMARTER Balanced  

           3)The Governor's proposed Local Control Funding Formula (LCFF)  .   
            The LCFF proposes to consolidate the majority of the state's  
            categorical programs, including those under categorical  
            flexibility, within the existing revenue limit (general  
            purpose funding) structure to establish a new K-12 student  
            formula phased in over seven years. The governor's proposed  
            budget provides $1.6 billion GF/98 in FY 2013-14 to begin  
            increasing district rates to a target base rate and provides  
            supplemental funding for English learner pupils, low income  
            pupils, and foster youth.    

            This bill would not become operative if the LCFF or a similar  
            formula were enacted in the 2013-14 Legislative Session.  

           4)Related legislation  .  

             a)   AB 88 (Buchanan), pending in the Assembly Education  
               Committee, implements the LCFF, which establishes a new  
               K-12 funding formula and eliminates all of the flexed  
               categorical programs.  

             b)   SB 69 (Liu), pending in the Senate Appropriations  
               Committee, establishes a LCFF by modifying the governor's  


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             c)   SB 223 (Liu), pending in the Senate Appropriations  
               Committee, extends categorical program flexibility provided  
               that each LEA meets specified accountability requirements. 

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