BILL ANALYSIS Ó
AB 2546
Page 1
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON EDUCATION
Patrick O'Donnell, Chair
AB 2546
(Calderon) - As Amended April 7, 2016
SUBJECT: Pupil instruction: history-social science curriculum
framework: financial literacy.
SUMMARY: Requires that, when the history-social science
curriculum framework is revised after January 1, 2017, the
Instructional Quality Commission (IQC) include specified content
on financial literacy. Specifically, this bill:
1)Requires that, when the history-social science curriculum
framework is revised after January 1, 2017, the IQC consider
including content on financial literacy at least twice in
grade spans: Kindergarten through grade 5, grades 6-8, and
grades 9-12.
2)Requires that the IQC consider including instruction on:
a) fundamentals of banking for personal use, including, but
not limited to, savings and checking
AB 2546
Page 2
b) principles of budgeting and personal finance
c) employment and understanding factors that affect net
income
d) uses and costs of credit, including the relation of debt
and interest to credit
e) uses and costs of loans, including student loans
f) types and costs of insurance
g) forms of governmental taxation
h) principles of investing and building wealth
i) identity theft and security
j) planning and paying for postsecondary education
AB 2546
Page 3
aa) charitable giving
EXISTING LAW:
1)Requires that, concurrently with, but not prior to, the next
revision of textbooks or curriculum frameworks in the social
sciences, health, and mathematics curricula, the State Board
of Education (SBE) ensure that these academic areas integrate
components of human growth, human development, and human
contribution to society, across the life course, and also
financial literacy, including, but not limited to, budgeting
and managing credit, student loans, consumer debt, and
identity theft security.
2)Requires the Superintendent of Public Instruction (SPI), with
the approval of the SBE, to plan and develop a one-semester
course entitled consumer economics, which includes instruction
on the uses and costs of credit, for use in schools
maintaining any of the seventh to twelfth grades, inclusive.
3)Requires students to complete a one-semester course in
economics in order to be eligible to graduate from high
school.
4)Requires the SBE to adopt statewide academic content standards
in core curriculum areas, pursuant to the recommendations of
IQC, for the establishment of academic content standards.
AB 2546
Page 4
FISCAL EFFECT: Unknown
COMMENTS:
Need for the bill. 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.
Lacking a clear understanding of basic financial concepts, 18-25
year-olds are more likely to rely on high-cost methods of
borrowing. 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. Without a base knowledge of financial tools, adults
are less likely to invest in retirement plans. According to the
Employment Benefit Research Institute, 46% of Americans have
less than $10,000 saved for retirement. Another survey found
that 15% had not saved a single cent. Low saving and retirement
participation rates could lead to a dramatic increase in the
number of people on welfare and drive up costs nationally.
Research has shown that early introduction to financial concepts
and repetition of those lessons yields a deeper understanding.
As a result, 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."
Curriculum, standards, frameworks, and model curricula.
California's public school curriculum is based on content
standards in various subjects, including English-Language Arts,
AB 2546
Page 5
Mathematics, Science, History-Social Science, Physical
Education, English Language Development, Career Technical
Education, Health Education, World Languages, and Visual and
Performing Arts. These standards are developed by the IQC
through a public process, and are adopted by the SBE.
These standards form the basis of California's curriculum
frameworks. These documents guide the implementation of these
standards, and are used to establish criteria for the evaluation
of instructional materials for state adoption for grades
kindergarten through grade eight. They also guide district
selection of instructional materials for grades nine through
twelve.
In addition to developing standards in the above subject areas,
the SPI is sometimes directed by law to develop model curricula
on different topics, such as those on the life of Cesar Chavez,
and on human rights and genocide.
Draft History-Social Science Framework revision addresses
financial literacy. The CDE is in the process of revising the
state's curriculum framework in history-social science. The
draft revision to the framework released in September, 2014
includes financial literacy content in at least the following
grades:
Grade 1: Students acquire a beginning understanding of
economics, including how people exchange money for goods and
services, and how people make choices about how to spend
money, including budgeting.
Grade 2: Students learn basic economic concepts of human
wants, scarcity, and choice; the importance of specialization
in work today. Students also develop an understanding of
AB 2546
Page 6
their roles as consumers in a complex economy.
Economics course: Students learn about personal budgeting,
banking, debt, credit cards, interest, student loan debt,
mortgage debt, saving, and investing. This content is
presented in relation to larger economic issues and concepts.
Elective course outline: Students learn about credit cards
and other forms of consumer 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. Students also learn about the
importance of managing credit and debt, and identity theft
security.
History-social science framework adoption delayed. The
History-Social Science standards currently in use were adopted
in 1998, and the most recent framework was published in 2005.
The Curriculum Development and Supplemental Materials Commission
(now the IQC) began revising the History-Social Science
Framework in January of 2008. A significant amount of the
process had been completed (focus groups, selection of
evaluation criteria committee members, five drafting meetings)
when in 2009 the state's fiscal emergency halted all work on
instructional materials adoptions and framework revisions until
the 2013-14 school year AB 4 X2 (Evans) Chapter 2, Statutes of
2009. That suspension was later extended until the 2015-16
school year by SB 70 (Committee on Budget), Chapter 7, Statutes
of 2011.
AB 2546
Page 7
The IQC began work again on the revision in July, 2014, and
released the draft History-Social Science framework for field
review in September, 2014. The draft generated extensive public
comment it generated (nearly 700 comments). The IQC also
determined that more subject matter expertise was needed certain
areas (including some mandated for inclusion by legislation),
and submitted a budget request for $124,000 to hire experts
through an interagency agreement. The IQC held a second field
review for this draft from November, 2015 through February,
2016.
These events have caused significant delays in the production of
the revised framework. Originally scheduled for adoption in
May, 2015, this framework is now set to be recommended to the
SBE by May 2016, with final publication in winter, 2016.
Because this framework is likely to be adopted in 2016, and
curriculum frameworks are revised every eight years, the
requirements of this bill would likely not go into effect until
2024.
Related and prior legislation. SB 1296 (Liu) of this Session
would require "consumer and homemaking education" to include
financial literacy instruction on subjects including, but not
limited to, student loans, credit cards, and investment and
retirement accounts.
AB 166 (Hernández), Chapter 135, Statutes of 2013 requires that,
concurrently with, but not prior to, the next revision of
textbooks or curriculum frameworks in the social sciences,
health, and mathematics curricula, the SBE ensure that these
academic areas integrate components of human growth, human
development, and human contribution to society, across the life
course, and also financial literacy, including, but not limited
to, budgeting and managing credit, student loans, consumer debt,
AB 2546
Page 8
and identity theft security.
AB 391 (Wieckowski) of the 2013-14 Session proposed the Common
Cents Curriculum Act of 2013, requiring the SPI and SBE to adopt
a one semester course in consumer education, include specified
areas of content related to financial literacy, and encouraged
financial literacy instruction to be included in the next
revision of the history-social science frameworks. This bill was
held in the Assembly Appropriations Committee.
SB 1080 (Lieu) of the 2011-12 Session would have authorized
instruction provided in economics to include personal finances,
including budgeting, savings, credit, and identity theft. The
bill would have required the CDE to develop a personal finance
curriculum in the next cycle in which the mathematics and
history-social science curriculum framework were to be adopted.
This was held in the Assembly Judiciary Committee.
SB 696 (Lieu) of the 2011-12 Session would have encouraged the
instruction provided in economics to include instruction related
to the understanding of personal finances, including budgeting,
savings, credit, and identity theft. The bill would also make
several legislative findings and declarations. This bill was
not heard in any committee.
SB 1080 (Lieu) of the 2011-12 Session would have authorized
instruction provided in economics to include personal finances,
including, but not limited to, mathematics, budgeting, savings,
credit, and identity theft. The bill would have required the
CDE to develop a personal finance curriculum in the next cycle
in which the mathematics and history-social science curriculum
framework were to be adopted. This measure was not heard by this
AB 2546
Page 9
committee and was held in the Assembly Judiciary Committee.
SB 779 (Lieu) of the 2011-12 Session authorized a school
district, as part of providing economics instruction in grades
7-12, to include personal finances, including, but not limited
to, budget savings, credit, and identify theft. This bill would
have also required the CDE to consider developing a personal
finance curriculum in the next cycle in which the history/social
science curriculum framework would have been adopted. This bill
was held in the Assembly Appropriations Committee.
SB 223 (Wyland) of the 2009-10 Session would have required that
one-half of the economics course required for high school
graduation focus on personal finance and financial literacy.
This measure was held in the Assembly Appropriations Committee.
AB 1502 (Lieu) of the 2007-08 Session would have required the
SBE and the Curriculum Development and Supplemental Materials
Commission (now the IQC) to ensure that information about
financial literacy be included in appropriate subject area
frameworks, encouraged school districts to include instruction
in personal finance, as specified in economics, and authorized
the SPI to accept private donations for the purposes of
implementing these provisions. This measure was vetoed by
Governor Schwarzenegger.
AB 1950 (Lieu) of the 2005-06 Session authorized school
districts to provide instruction in personal finances in
economics courses. This measure vetoed by Governor
AB 2546
Page 10
Schwarzenegger who stated that school districts already have the
flexibility to incorporate money management into their lesson
plans and that the state's content standards are intentionally
broad in order to allow instruction on a range of topics.
AB 2435 (Wiggins) of the 2003-04 Session authorized school
districts to include instruction related to the understanding of
personal finances in economics courses. This measure vetoed by
Governor Schwarzenegger who stated that school districts already
have the flexibility to incorporate money management into their
lesson plans and that the state's content standards are
intentionally broad in order to allow instruction on a range of
topics.
REGISTERED SUPPORT / OPPOSITION:
Support
None received
Opposition
None received
AB 2546
Page 11
Analysis Prepared by:Tanya Lieberman / ED. / (916) 319-2087