BILL ANALYSIS Ó
AB 2546
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Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2546 (Calderon) - As Amended April 7, 2016
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|Policy |Rules |Vote:|11 - 0 |
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| |Education | |6 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires, when the history-social science curriculum
framework is revised after January 1, 2017, the Instructional
Quality Commission (IQC) to consider including the topic of
financial literacy. Specifically, this bill:
AB 2546
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1)Requires the IQC to consider including content on financial
literacy at least twice in each of the following grade spans:
Kindergarten through grade 5, grades 6-8, and grades 9-12.
2)Requires that the IQC consider including instruction on: the
fundamentals of banking for personal use, including, but not
limited to, savings and checking; principles of budgeting and
personal finance; employment and understanding factors that
affect net income; uses and costs of credit, including the
relation of debt and interest to credit; uses and costs of
loans, including student loans; types and costs of insurance;
forms of governmental taxation; principles of investing and
building wealth; identity theft and security; planning and
paying for postsecondary education and charitable giving.
FISCAL EFFECT:
No current fiscal effect to the California Department of
Education (CDE). As written, the bill would not require
additional consideration until the next framework, which is not
likely to occur until 2024. It is difficult to project costs
that may occur eight years from now.
COMMENTS:
1)Purpose. According to the author, financial illiteracy
negatively impacts young people entering the labor market.
Young adults aged 18 to 25 tend to have large amounts of
credit card and student loan debt upon entering the workforce.
Risky borrowing not only undermines future homeownership but
also the ability to control one's financial future. Financial
literacy also hinders adults and their hopes for retirement.
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Research has shown that students who had financial education
courses early and more often had higher rates of savings and
were less likely to rely on high-cost methods of borrowing.
2)Background. Existing law requires the IQC and the SBE to
include financial literacy in the history-social science,
health, and mathematics frameworks. The pending History-Social
Science Framework, set for adoption in May of 2016, includes
financial literacy components. According to the CDE, the
majority of the content called for in the bill is already
included in the History-Social Science Framework. AB 166
(Hernández), Chapter 135, Statutes of 2013, required coverage
of financial literacy, including, but not limited to,
budgeting and managing credit, student loans, consumer debt,
and identity theft security in the framework, but the final
text of the framework goes considerably beyond that narrow
list of topics. The IQC and CDE received extensive public
comment related to financial literacy and personal finance,
and integrated many of those comments into the draft as it was
updated. The draft framework contains an elective course for
grade nine entitled "Financial Literacy" that addresses credit
and debt, savings and budgeting, retirement planning, state
and federal laws related to personal finance (e.g.,
bankruptcy), financial credit scores, credit card
applications, bank account applications, simple and compound
interest calculations, retirement calculations, and mortgage
and interest rates. Financial literacy topics are also
mentioned in other grade levels, including a lengthy
discussion in the course description for the grade twelve
"Principles of Economics" course and an overview in the
chapter on instructional strategies.
Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081
AB 2546
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