BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 97
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          Date of Hearing:   August 29, 2013
                                          
                            ASSEMBLY COMMITTEE ON BUDGET
                                Nancy Skinner, Chair
             SB 97 ( Budget and Fiscal Review) - As Amended:  August 28,  
                                        2013

           SENATE VOTE  :   Vote not relevant
           
          SUBJECT  :   Education

           SUMMARY  :   Makes various technical and clarifying changes to  
          statutes related to K-12 and Higher Education in order to  
          implement the 2013 Budget Act. Specifically,  this bill  :   

           K-12 Education:

           1)Makes clarifying changes related to the transfer of the  
            California School Finance Authority from the State Department  
            of Education (SDE) to the State Treasurer's Office.

          2)Makes various technical changes related to implementation of  
            the California Clean Energy Jobs Act (Proposition 39):

             a)   Specifies, for purposes of calculating an average daily  
               attendance equivalent for the state special schools, SDE  
               will use 97% of their prior year enrollment as captured in  
               the state's CalPADS data system. 

             b)   Clarifies that small school districts may receive two  
               years' worth of Proposition 39 funding allocations in the  
               first year, and extends the deadline by which they must  
               apply for this treatment by one month.

             c)   Clarifies an existing statutory requirement that schools  
               receiving Proposition 39 funding repay that funding if they  
               vacate the benefitting facility within five years of  
               project completion, to specify that it applies to every  
               local educational agency, not just school districts. 

          3)Clarifies that the terms and conditions of the General Fund  
            cashflow loan to Inglewood Unified School District shall  
            include costs incurred by the California Infrastructure and  
            Economic Development Bank (I-Bank).  









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          4)Clarifies that the Program Specialists and Regionalized  
            Services (PSRS) and professional development funds are  
            included in the special education base funding when  
            calculating the Statewide Target Rate.

          5)Makes various changes related to the Local Control  
            Accountability Plan (LCAP), including:

             a)   Clarifies that a budget cannot be approved for a school  
               district or county office of education (COE) before a local  
               control accountability plan (LCAP) or update to the  
               existing plan is adopted and clarifies terms under which a  
               budget review committee shall be formed.

             b)   Requires school district and COE actions related to  
               achieving the goals of the LCAP to be consistent with local  
               collective bargaining agreements.

             c)   Clarifies that the initial LCAP program expenditures  
               shall be listed and described in the same manner as the  
               annual LCAP.   

             d)   Provides greater detail related to career technical  
               education state priorities.

             e)   Adds local bargaining units to the groups school  
               district and COEs must consult in the development of the  
               LCAP.

             f)   Requires LCAP to adhere to regulations adopted related  
               to expenditure of supplemental and concentration grant  
               funding.

          6)Makes a several technical and clarifying changes related to  
            the Local Control Funding Formula (LCFF), including:

             a)   Clarifies statutes related to the William's settlement  
               agreement to delink from previous categorical funding while  
               continuing requirements with the new funding model.

             b)   Repeals law related to county community schools and the  
               transfer of students to conform with LCFF requirements.

             c)   Clarifies allocation methodology related to the  
               Education Protection Account (EPA) for revenues for school  








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               districts, charter schools and COEs.

             d)   Continues, through 2016, direct appropriation of  
               categorical funding to Joint Power Authorities if they  
               received these funds directly prior to the passage of the  
               LCFF.

             e)   Authorizes school districts and county offices of  
               education to jointly meet ROC/P maintenance of effort  
               requirements by allowing a county office or school district  
               to include expenditures from both entities so long as the  
               combined expenditures of both entities meet the maintenance  
               of effort requirement in total.  

             f)   Clarifies free and reduce-price meal eligibility is  
               based on federal income eligibility criteria for purposes  
               of unduplicated pupil counts.

             g)   Authorizes LEAs to submit changes to California  
               Longitudinal Pupil Achievement Data System (CALPADS) within  
               the timeframes and procedures established by the SDE. 

             h)   Excludes, for the 2013-14 and 2014-15 fiscal years, $3.5  
               million from the calculation of the LCFF transition  
               adjustment for Torrance Unified School District to reflect  
               the pass through of these funds to Southern California  
               Regional Occupational Center.

             i)   Clarifies the physical location of a charter school for  
               purposes of generating concentration grant funding.

             j)   Clarifies than Necessary Small School (NSS) average  
               daily attendance (ADA) does not count for purposes of base  
               funding but does count for supplemental and concentration  
               grant funding.

             aa)  Clarifies that the amount of NSS funding received by a  
               school district that qualified for NSS funding in the  
               2012-13 fiscal year is included within their hold harmless  
               calculation. 

             bb)  Repeals obsolete code sections related to Capistrano  
               Unified School District and Fallbrook Union High School.

             cc)  Specifies that Superintendent of Public Instruction  








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               (SPI) shall contract with a local education agency (LEA),  
               or consortium of LEAs, to serve as the fiscal agent for the  
               California Collaborative for Educational Excellence (CCEE).  
               (The 2013 Budget Act appropriated $10 million for this  
               purpose.)

          7)Appropriates up to $3.164 million (General Fund) to the SDE  
            for state operations:

             a)   Provides $459,000 (one-time General Fund) for three  
               limited term positions to oversee the California Career  
               Technical Education Pathways Trust competitive grant  
               program;

             b)   Provides up to $1.4 million to support the  
               implementation and administration of the LCFF.   
               Specifically, the bill appropriates $$933,000 (ongoing  
               General Fund) for six positions for this purpose.  An  
               additional $479,000 for up to five positions may be  
               authorized, contingent upon Department of Finance approval  
               of an expenditure plan.

             c)   Provides up to $1.3 million for the support and  
               development of the LCAP.  Specifically, this bill  
               appropriates $570,000 (ongoing General Fund) for five  
               positions for this purpose.  An additional $723,000 and six  
               positions may be authorized, contingent upon Department of  
               Finance approval of an expenditure plan.

          8)Amends Chapter 47, Statutes of 2013 to clarify that the $2  
            million provided to the Office of Planning and Research is  
            non-Proposition 98/General Fund.

          9)Makes other technical and clarifying changes.

           Community Colleges:

           1)Makes technical changes to statutes regarding community  
            college mandates and the apprenticeship program;

          2)Adjusts deferral amounts within the community college system  
            by $2.8 million;

          3)Allows community college districts to use Proposition 98  
            General Fund monies for cash-flow purposes until the final  








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            amount of funds from Redevelopment Agencies is determined.   
            This change gives the Department of Finance discretion to  
            allow districts to use Proposition 98 funding while districts  
            wait for Redevelopment Agency (RDA) funding.  There is no new  
            cost to Proposition 98; the funding is needed for cash-flow  
            purposes and will be reconciled once final RDA amounts are  
            determined.     

           

          Middle Class Scholarship:  

          1)Makes four minor changes to the Middle Class Scholarship  
            program, which was established in the 2013 Budget Act.  The  
            changes are:

             a)   Ensures that students are entitled to discounts of up to  
               40 percent of systemwide tuition and fees at the University  
               of California and California State University under the  
               programs.  Previous language had inadvertently omitted  
               systemwide fees;

             b)    Requires that students maintain "satisfactory academic  
               progress," as defined by federal regulation, to qualify for  
               the program.  This change aligns academic standards with  
               that of the Cal Grant program;

             c)   Clarifies legislative intent that students can qualify  
               for the program if their annual household incomes does not  
               exceed $150,000;

             d)   Clarifies legislative intent that the new program does  
               not allow the University of California or California State  
               University to supplant their institutional financial aid  
               programs and that the systems maintain institutional aid  
               funding levels for undergraduate students at the 2013-14  
               level.  

           EXISTING LAW  :

          1)Establishes the Local Control Funding Formula which replaces  
            the prior revenue limit and categorical funding structure for  
            K-12 education.  The formula is comprised of a base grant  
            (general purpose funding), supplemental grants (funding for  
            English learners (EL), low income and foster youth) and  








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            concentration grants (additional funding for LEAs with high  
            numbers of EL, low income and foster youth students).   
            Existing law also includes accountability requirements through  
            the development and adoption of LCAPs, which require the  
            reporting of detailed pupil achievement data and information  
            related to the expenditure of their LCFF allocations.  Statute  
            further requires the SBE to adopt a template for use by LEAs  
            in developing LCAPs.

          2)Authorizes Inglewood Unified School District to request,  
            through the SDE, up to $55 million in cashflow loans from the  
            General Fund, in lieu of financing through the I-Bank.  The  
            interest charged on these loans are at the annual rate of  
            return of the Pooled Money Investment Account (PMIA) plus 2  
            percent. According to the Department of Finance, the I-Bank  
            has incurred costs of roughly $144,000 to date.

           FISCAL EFFECT  :   Appropriates up to an additional $3.164 million  
          (General Fund) to the State Department of Education for state  
          operations.  

           COMMENTS  :  This bill makes largely technical and clarifying  
          amendments to the education trailer bills passed in June as part  
          of the 2013 Budget Act.  These bills were AB 86, Chapter 48,  
          Statutes of 2013 (Education Omnibus Trailer Bill),  AB 97,  
          Chapter 47, Statutes of 2013 (Local Control Funding Formula) and  
          AB 94, Chapter 50, Statutes of 2013.  

           
          REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          None on file.
           
            Opposition 
           
          None on file.

           Analysis Prepared by  :    Misty Feusahrens and Mark Martin /  
          BUDGET / (916) 319-2099 












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