BILL ANALYSIS Ó
AB 1064
Page 1
Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1064 (Roger Hernández) - As Amended March 26, 2015
-----------------------------------------------------------------
|Policy |Education |Vote:|7 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill removes the January 1, 2016, sunset date from
provisions of law that require the California Department of
Education (CDE), and any other state agency, to allow the full
indirect cost rate established by the CDE for state or federal
AB 1064
Page 2
grant programs administered by local education agencies unless a
lower rate is required by other state or federal law.
FISCAL EFFECT:
No direct state fiscal impact since any potential funding
distribution would occur within a program and a set amount of
grant funding already dedicated to that program.
COMMENTS:
1)Purpose. AB 2435 (Hernández), Chapter 587, Statutes of 2013,
required, through January 1, 2016, the California Department
of Education (CDE), or any other state agency that administers
a grant or allocation of federal or state funds to a school
district, to allow an indirect cost rate that is not less than
the indirect cost rate established by CDE for each district,
unless federal or state law requires a lower cost rate.
2)Background. The United States Department of Education has
approved a delegation agreement with the CDE that authorizes
the department as the recognized agency to establish indirect
cost rates for the state's local educational agencies (LEAs).
Indirect costs are agency-wide general management costs and
consist of administrative activities necessary for the general
operation of the agency, such as accounting, budgeting,
payroll preparation, personnel services, purchasing, and
centralized data processing. CDE determines the indirect cost
rate for each LEA, typically less than 10 percent.
AB 1064
Page 3
According to the author, LEAs cannot cover their operating
costs when the indirect rate allowed for certain grants and
allocations are less than the CDE determined rate. If LEAs
cannot cover these operating costs, they cannot operate
programs that provide important services for students and
families without putting the LEA at financial risk. The Los
Angeles County Office of Education is sponsoring this bill to
ensure, unless otherwise provided in state or federal law, the
CDE allows LEAs to use the full indirect rate established for
them.
Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081