BILL ANALYSIS �
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THIRD READING
Bill No: SB 594
Author: Steinberg (D)
Amended: 5/24/13
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-0, 4/24/13
AYES: Knight, Beall, DeSaulnier, Emmerson, Hernandez
NO VOTE RECORDED: Wolk, Liu
SENATE EDUCATION COMMITTEE : 8-0, 5/01/13
AYES: Liu, Wyland, Block, Correa, Hancock, Hueso, Jackson,
Monning
NO VOTE RECORDED: Huff
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : California Career Pathways Investment
SOURCE : Author
DIGEST : This bill establishes the California Career Pathways
State Revolving Fund (Fund) for the purpose of providing
financial assistance to local educational agencies and community
college districts (CCDs) that have entered into agreements to
implement and operate career pathways programs. Within the Fund
there shall be established a Career Pathways Grant Account and
additional accounts and subaccounts that the California Career
Pathways State Investment Committee (Committee) may establish.
This bill authorizes the Committee and local educational
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agencies and CCDs, to enter into, a pay-for-performance contract
for a career pathways pay-for-performance pilot project (Pilot
Project) to fund career pathways programs operated by the
business entity and a school district, CCD, or a consortium of
school districts and CCDs and under which a business entity
partner may be compensated for its costs.
ANALYSIS : California provides various tax credits designed to
provide incentives for taxpayers that incur certain expenses,
such as child adoption, or to influence behavior, including
business practices and decisions, such as research and
development credits and Geographically Targeted Economic
Development Area credits. The Legislature typically enacts such
tax incentives to encourage taxpayers to do something, but for
the tax credit, they would not otherwise do.
The California Constitution requires counties, cities, and
school districts to get voter approval for long-term debt.
Counties, cities, school districts, CCDs, and some special
districts can issue general obligation bonds, secured by ad
valorem property tax revenues, with 2/3-voter approval, and
implemented in statute in the Government Code.
State law allows public agencies to buy and sell property.
Public agencies have used this authority to enter into various
forms of lease transactions, including certificates of
participation and sale-leasebacks, among others. State law
applies specific laws to school and CCDs when leasing property.
Additionally, state law authorizes public agencies to use
certain vehicles to issue lease-revenue bonds, where investors
provide cash to the issuer to build a project, which in turn
produces revenues to repay bond investors.
This bill:
1. Establishes in state government the Committee. The
Committee shall be composed of the following members:
A. The Chancellor of the California Community Colleges
(CCC), or his/her designee, who will serve as the
chairperson of the Committee.
B. The Superintendent of Public Instruction (SPI) or
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his/her designee.
C. The Chair of the California Workforce Investment Board
(Board), or his/her designee.
D. One appointee of the Senate Rules Committee, who shall
represent the business community and will serve a
four-year term.
E. One appointee of the Speaker of the Assembly, who will
serve a four-year term.
The Committee shall be granted the sole authority to allocate
to local educational agencies and CCDs moneys appropriated to
the Fund for state financial assistance, including grants and
pay-for-performance contracts entered into as part of a Pilot
Project.
The Committee shall establish criteria and guidelines for
state financial assistance, including requirements for
commitments of financial or other resources by applicants or
a local educational agency, CCD, or workforce investment
board. The Committee shall give priority in allocating state
financial assistance to the following:
A. Proposals that would fund a work-based learning
specialist to convene, connect, measure, or broker efforts
to establish or enhance a locally defined career pathways
program that provides connections between local
educational agencies and business entities.
B. Local educational agencies and CCDs that have an
unemployment rate higher than the statewide average 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.
C. Local educational agencies and CCDs that include in
their application a significant amount of private funding
support from their business partners.
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D. Local educational agencies and CCDs that include in
their application articulated pathways connecting high
school and postsecondary certificate and degree programs
in their region.
E. Local educational agencies and CCDs 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.
The SPI, the Chancellor of the CCC and the Board shall 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 state
financial assistance.
2. Establishes the Pilot Project. The Committee may spend up to
$10 million of the amount appropriated to the Fund for the
Pilot Project. The performance-based compensation shall be
paid to private entities by educational agency participants
pursuant to a pay-for-performance contract between the school
district or CCD that specifies the accountability and
performance measurements that determine the extent to which a
business entity partnering with the district may be
compensated for its costs. The amount of compensation shall
vary in accordance with demonstrated performance.
Performance measures shall include all of the following:
A. Demonstrated improvement in academic performance.
B. Demonstrated improvement in postsecondary enrollment.
C. Decreased dropout rates.
D. Demonstrated improvement in transitions to appropriate
employment, apprenticeships, or any other job training
school, if applicable.
E. Measurements of pupil, parent, and employer
satisfaction.
3. Establishes in each local educational agency and CCD a Career
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Pathways Investment Trust Fund (Trust Fund) 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 state grants,
one-time property tax revenues resulting from the dissolution
of the assets of the former redevelopment agencies, other tax
revenues, grants, loans, or contributions or employment
training funds made available the employment training panel
or workforce investment boards. The Trust Fund shall be
administered by each local educational agency or CCD.
Moneys in a Trust Fund may be used for any of the following
purposes:
A. Career pathways program operations.
B. Development of rigorous and career-relevant curriculum
by the applicant and school district, CCD or consortium of
districts.
C. Paid internships.
D. Post-high-school financial aid for college, licensing,
and credentialing programs.
E. Wage subsidies for full-time employment for pupils who
successfully complete a career pathways program.
4. The Committee shall develop performance criteria for
determining the financial returns to private entities
participating in a Pilot Project. The performance-based
compensation to be paid to private entities by educational
agency participants for each pay-for-performance contract
shall be specified in the contract. 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 post-secondary programs that culminate in
a certificate or degree.
C. Attainment of industry-recognized credentials that are
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valued in high-growth, high-need or emerging economic
sectors.
D. Provision of high school pupil and community college
student internships.
E. Provision of paid summer jobs for high school pupils
and community college students.
F. Provision of high school teacher and community college
faculty externships.
G. Provision of scholarships or other financial assistance
for students pursuing post-secondary education or training
in a relevant career pathway.
H. Offers of paid employment or apprenticeship to high
school pupils or college students who are program
participants or graduates.
5. Expresses legislative intent to appropriate $250 million from
the General Fund (GF) in 2013-14 to the Fund, and says that
the source of funds may include Proposition 98 apportionments
and offsetting budget savings resulting from reforms to the
Enterprise Zone Program and the New Jobs Tax Credit. This
bill states legislative intent to reduce allocations of tax
credits for the New Jobs Tax Credit from $400 million to $300
million SB 15X3 (Calderon, Chapter 17, Statutes of 2009), and
to authorize $100 million in Career Pathways Investment Tax
Credit, effective January 1, 2014.
6. Makes other legislative findings and declarations supporting
its provisions. This bill also defines many terms, including
"applicant," "authentic application," "budget," "career
pathways investment trust fund," "career pathways programs,"
"career pathways state revolving fund," "committee,"
"qualified expenditures," and "career pathways
pay-for-performance pilot project."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
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Unknown (greater than $50,000 GF) costs to the Franchise Tax
Board related to printing, processing and information
technology costs.
Unknown, likely significant costs to the Department of
Education, Chancellor of the CCC, and the Board, to provide
staff and resources to the Committee.
In addition, this bill states intent (1) to appropriate $250
million from the GF to the Fund, and (2) to redirect $100
million from a current tax credit program to the Career
Pathways Investment Credit.
SUPPORT : (Verified 5/24/13)
America's Edge
Bay Area Council
California Association of Regional Occupational Programs and
Centers
California Chamber of Commerce
California School Board Association
California School Employees Association
Metropolitan Education District
Sacramento City Unified School District
San Bernardino County District Advocates for Better Schools
San Francisco Unified School District
Silicon Valley Leadership Group
Southwest California Legislative Council
United Way of California
AB:k 5/25/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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