BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: SB 594
AUTHOR: Steinberg
AMENDED: April 18, 2013
FISCAL COMM: Yes HEARING DATE: May 1, 2013
URGENCY: No CONSULTANT:Lenin Del Castillo
SUBJECT : Career Pathways Investment.
SUMMARY
This bill authorizes several forms of financing mechanisms to
provide financial assistance for local educational agencies
(LEAs), community college districts, and business partnerships
to operate career pathways programs.
BACKGROUND
Existing law also establishes the following career technical
education (CTE) programs for public schools:
1) Regional Occupational Centers and Programs . Existing
law establishes various career technical education (CTE)
programs for public schools including Regional
Occupational Centers and Programs (ROCPs) that allow
students from multiple schools or districts to
participate in career technical training programs
regardless of the geographical location of their
residence in a county or region. Existing law authorizes
the following types of ROCPs operational models:
(Education Code � 52300 et seq.)
a) County ROCP
b) Joint Powers Agency ROCP
c) Single District ROCP
2) Partnership Academies . The Partnership Academy model
is a three-year program, for grades ten through twelve,
structured as a school-within-a-school and incorporates
(1) rigorous integrated academics with a career focus;
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(2) business partnerships that provide support through
curriculum resources, classroom speakers, field trips,
mentors, and internships; and (3) teachers who work as a
team in preparing students for careers and postsecondary
education. (Education Code � 54690 et seq.)
3) Specialized Secondary Programs . A specialized
secondary program is a four-year grant program that
provides opportunities for students to obtain advanced
instruction, in addition to core course work, and skills
in technology appropriate to the curriculum.
Comprehensive high schools may use the grant funds for
programs that provide students with advanced learning
opportunities in a variety of subjects, including but not
limited to English-language arts, mathematics, science,
history and social science, foreign language, and the
visual performing arts. The acquisition of technology
skills and the use of technology as a tool for
instruction and learning are also emphasized in these
programs. Frequently, specialized secondary programs are
established as a smaller learning community or a
school-within-a-school.
(Education Code � 58800 et seq.)
4) Agricultural Career Technical Education Incentive
Program . The Agricultural Career Technical Education
Incentive program provides local educational agencies
(LEAs) with funds to improve the quality of their
agricultural vocational education programs. The goal is
to maintain a high-quality, comprehensive agricultural
vocational program in California's public school system
to ensure a constant source of employable, trained, and
skilled individuals. (Education Code � 52460)
ANALYSIS
1) This bill establishes the California Career Pathways
Investment Committee (Committee) composed of the
following members:
a) The Chancellor of the California Community
Colleges, who will serve as
the Chair.
b) The Superintendent of Public Instruction.
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c) The Chair of the California Workforce
Investment Board.
d) One appointee of the Senate Committee on Rules,
who shall represent
the business community and serve a four-year term.
e) One appointee of the Speaker of the Assembly,
who shall represent the
business community and serve a four-year term.
2) Provides authority for the Committee to allocate to LEAs,
community college districts, and applicants, monies
appropriated to the Career Pathways State Revolving Fund
for state financial assistance, including grants, loans,
and the repayment of Workforce Development Bonds issued
by the Committee.
3) Defines an applicant as a business entity that enters
into a contract or memorandum of understanding with an
LEA, community college, or workforce investment board to
provide career technical education that connects pupils
to real-world experience and provides sustained exposure
to applied academics, skill development, work-related
education, and potential future employment, and that
applies to the Committee for state financial assistance,
as specified.
4) Requires the Committee to establish criteria and
guidelines for evaluating applications for state
financial assistance, as specified, and give priority in
the allocation of state financial assistance as follows:
a) LEAs and community college districts that have
an unemployment rate
higher than the statewide average unemployment rate
for the most recent calendar year, as determined by
the Employment Development Department, or a high
school graduation rate lower than the statewide high
school graduation rate for the most recent calendar
year, as determined by the Committee using the
California Longitudinal Pupil Achievement Data
System.
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b) Local education agencies (LEAs) and community
college districts that
include in their application a significant amount of
private funding support from their business
partners.
c) LEAs and community college districts that
include in their application
articulated pathways connecting high school and
postsecondary certificate and degree programs in
their region.
d) LEAs and community college districts that
include in their application
articulated pathways connecting high school and
postsecondary certificate and degree programs in
their region.
e) LEAs and community college districts that are
not seeking state
financial assistance for existing activities.
However, priority in allocating state financial
assistance shall be given to applicants that seek to
expand or augment existing investments in career
pathways programs.
5) Defines career pathways programs as programs that support
various functions, including integrated academic and
technical learning that prepares pupils for both
postsecondary education and careers in high-growth or
high-need sectors of the economy, as specified,
curriculum and professional development, middle school
and early high school career exploration activities, and
externship and fellowship opportunities that expose
middle school and high school teachers and community
college faculty to the skills and competencies that
pupils need for successful employment in high-growth
sectors of the economy.
6) Provides that the Committee allocate proceeds from the
sale of Workforce Development Bonds to applicants that
have entered into a memorandum of understanding with an
LEA or community college district to fund career pathways
programs. Repayment of the bonds will be linked to
performance-based contracts that measure the academic
progress and employment records of students participating
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in the programs.
7) Requires the Committee to develop performance criteria
for determining the financial returns to private entities
investing in Workforce Development Bonds. The
performance criteria shall include, but are not limited
to, high school pupil and community college student
achievement and opportunity in the following areas:
a) High school graduation.
b) Completion of postsecondary programs that
culminate in a certificate or
degree.
c) Attainment of industry-recognized credentials
that are valued in high-
growth, high-need, or emerging economic sectors.
d) Provision of internships to high school pupils
and community college
students.
e) Provision of paid summer jobs for high school
pupils and community
college students.
f) Provision of externships for high school
teachers and community
college faculty.
g) Provision of scholarships or other financial
assistance for students
pursuing postsecondary education or training in a
relevant career pathway.
h) Offer of paid employment or apprenticeship to
high school pupils or
community college students who are participants or
graduates of a career pathways program.
8) Provides that the Committee prepare forms, establish
procedures, set priorities, assess, and perform other
administrative functions as necessary.
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9) Requires the Superintendent of Public Instruction, the
Chancellor of the Community Colleges, and the California
Workforce Investment Board to enter into a memorandum of
understanding to allocate staff resources to the
Committee. The costs to these entities shall be offset
by fees charged to applicants for Career Pathways Tax
Credits.
10) Allows local educational agencies (LEAs) and community
college districts to issue lease revenue bonds secured by
the lease of any of their property or enter into loan or
lease agreements not subject to the California
Constitution's debt limits with the California Career
Pathways Investment Committee, to finance the operation
of career pathways programs.
11) Establishes the Career Pathways Investment Trust Fund in
each LEA or community college district for the purpose of
financing program and administrative costs relating to
the operation of career pathways programs. The trust
fund may accept revenues from any source, including
one-time property tax revenues resulting from the
dissolution of the assets of the former redevelopment
agencies, proceeds from the sale of Workforce Development
Bonds, other tax revenues, grants, loans, and
contributions or employment training funds made available
through the employment training panel or workforce
investment boards. The trust fund shall be administered
by each LEA or community college district and shall be
used for qualified expenditures, administrative costs,
and grants, loans, and program costs associated with
career pathways programs.
12) Establishes the Career Pathways State Revolving Fund for
the purpose of providing financial assistance to LEAs,
community college districts, and business entities that
have entered into agreements to implement and operate
career pathways programs. Within the fund there shall
also be established a Career Pathways Financing Account,
a Career Pathways Grant Account, a Career Pathways Loan
Account, and additional accounts and subaccounts that the
Committee may establish from time to time, for purposes
as specified.
13) Provides that all monies in the Career Pathways State
Revolving Fund shall be continuously appropriated without
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regard to fiscal year for the support of the Committee
and for expenditures for career pathways programs. The
bill also provides that expenses incurred in carrying out
these purposes shall be payable solely from funds
provided pursuant to the bill's provisions and no
liability or obligation shall be imposed upon the state
and none shall be incurred by the Committee beyond the
extent to which money shall have been provided.
14) Requires for the calendar years beginning on or after
January 1, 2014, the Committee to allocate the Career
Pathways Investment Credit in an amount authorized in the
Budget Act for that calendar year.
15) Requires the Committee to:
a) Allocate the Career Pathways Investment Credit
for up to five calendar
years for each application the Committee approves,
as long as the amount allocated does not exceed the
amount authorized in the Budget Act.
b) Give priority in allocating tax credits to the
following:
i) Applicants that have entered into
contracts or memorandums of
understanding with Local education agencies
(LEAs), community colleges, or workforce
investment boards in communities that have an
unemployment rate higher than the statewide
unemployment rate, as determined by the United
States Census, and a high school graduation
rate lower than the statewide high school
graduation rate, as determined by the Committee
using the California Longitudinal Pupil
Achievement Data System.
ii) Applicants that have entered into a
contract or memorandum of
understanding with LEAs, community colleges, or
workforce investment boards with proportions of
private funding support that exceed the
one-to-one match requirement as specified.
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iii) Applicants that have entered into a
contract or memorandum of
understanding with LEAs or community colleges
that offer articulated pathways connecting high
school and postsecondary certificate and degree
programs in their region.
iv) Applicants that are not seeking tax
credits for existing activities.
However, priority shall be given to applicants
that seek to expand or augment existing
investments in career pathways programs.
c) To the maximum extent practicable, give
priority in allocating career
pathways investment credits to applicants that seek
to expand or augment existing investments in career
pathways programs.
d) The Committee shall not give priority to any
applicant by virtue of the
date of submission except to break a tie between two
applicants with the same rating.
16) Requires applicants to enter into an enforceable contract
or memorandum of understanding with the Committee to
comply with the requirements of this bill. The contract
or memorandum of understanding shall provide for legal
action to obtain specific performance or monetary damages
for breach of contract and shall require regular
programmatic audits.
17) Requires the Committee to adopt criteria that awards
credits to applicants that demonstrate that either the
applicant or the local education agency (LEA), community
college, or workforce investment board meets the
following criteria:
a) The effectiveness of the career pathways
program toward preparing
students for productive, high-wage employment in
growing or high-need sectors of the California
economy, as specified.
b) The level of the applicant's investment in,
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oversight of, and ability to
leverage and sustain current career pathways
programs and current career technical education
programs.
18) Requires the Committee to develop and provide forms for
the purposes of informing potential applicants.
19) Provides that the amount of credit reserved for a
calendar year shall not exceed 50 percent of the
qualified expenditures by the applicant for the calendar
year.
20) Requires the Committee to report to the Franchise Tax
Board, once each year, the identity of the qualified
taxpayers for whom the career pathway credits are
allocated each year.
21) Provides that the Committee may consult with the
Treasurer or the Tax Credit Allocation Committee
regarding allocation of credits, and they must aid the
Committee upon request. The bill also provides that the
Committee shall adopt audit requirements.
22) Defines various terms for purposes of the bill.
23) Expresses legislative intent to appropriate $250 million
from the General Fund in 2013-14 to the Career Pathways
State Revolving Fund. The source of the funds may
include Proposition 98 apportionments and offsetting
budget savings resulting from reforms to the Enterprise
Zone Program and the New Jobs Tax Credit. The bill also
expresses legislative intent to reduce the statutory cap
on the authorization for the New Jobs Tax Credit from
$400 million to $300 million and to authorize $100
million for the Career Pathways Investment Credit,
effective January 1, 2014.
24) Makes a number of related declarations and findings.
STAFF COMMENTS
1) Need for the bill . According to the author's office,
California suffers from too many high school dropouts,
too little meaningful career pathways programs at the
middle and high school levels, and shortages of skilled
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workers in high-growth sectors such as biotechnology,
nursing, and advanced manufacturing to fuel these sectors
of our economy. Investments in high quality career
pathways programs at the secondary school level through
public-private partnerships would bring a greater return
on the state's tax expenditure investment by enhancing
our workforce and leading to wage and employment growth.
2) What are career pathways programs ? This bill defines an
"applicant" as a business entity that enters into a
contract or memorandum of understanding with a local
education agency (LEA), community college, or workforce
investment board to provide career technical education.
According to the bill, the business entities would be
required to connect pupils to real-world experience and
provide sustained exposure to applied academics, skill
development, work-related education, and potential future
employment.
Career pathways programs would support various functions,
including integrated academic and technical learning that
prepares pupils for both postsecondary education and
careers in high-growth or high-need sectors of the
economy, curriculum and professional development, middle
school and early high school career exploration
activities, and externship and fellowship opportunities
that expose middle school and high school teachers and
community college faculty to the skills and competencies
that pupils need for successful employment in high-growth
sectors of the economy. Programs include academically
relevant and rigorous curriculum working in tandem with
local industry experts, paid and unpaid jobs or
internships, and permanent or part-time hires of recent
graduates.
3) Will it work ? Will the bill's financial assistance and
tax credits lead to better education outcomes for
students? SB 594 is premised on the belief that better
linkages between public school curriculum and real world
work experience will result in more engaged and
successful students, increased graduation rates, and
better prepared students for both college and career.
According to a 2006 study of California Regional
Occupational Centers and Programs (CROCP) conducted by
the School Improvement Research Group at the University
of California, Riverside and funded by the State
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Department Education, ROCP students improve their high
school grade point averages at a greater rate than
comparison students, enroll in post-secondary education
in large numbers, earn higher wages than comparison group
peers, have more success in securing raises and
promotions on the job, prefer ROCP classes over other
subjects, and question the value and relevance of many of
their high school courses. A 2010 study conducted by the
Career Academy Support Network finds that, after more
than four decades of development and three decades of
evaluation, career academies (small learning communities
that provide a college-preparatory curriculum with a
career-related theme) have been effective in improving
outcomes for students during and after high school and
declares them a proven strategy to prepare high school
students for college and careers.
4) Priorities . The Committee may wish to consider whether
career technical education program partnerships between
local educational agencies and private business entities
should be encouraged through the use of tax credits and
the other financing tools proposed. The bill would
provide significant state assistance for the
establishment of career pathways programs at a time when
schools have many other compelling needs such as hiring
quality teachers and providing professional development
for existing teachers. Additionally, the bill would
allow local educational agencies and community college
districts to issue lease revenue bonds to establish
career pathways programs allowing them to further
increase their existing debt levels. Is this the
appropriate time for additional borrowing?
SUPPORT
America's Edge California
Bay Area Council
California Association of Regional Occupational Centers and
Programs
California School Boards Association
Sacramento City Unified School District
San Bernardino County District Advocates for Better Schools
San Francisco Unified School District
OPPOSITION
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None received.