BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  August 26, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 252  
          (Leno) - As Amended August 18, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill prohibits the California Department of Education (CDE)  
          from charging homeless youth a fee to take the California High  
          School Proficiency Exam (CHSPE) and prohibits any contractor or  
          testing center from charging homeless youth a fee to take any  








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          high school equivalency test (also known as the GED).  
          Specifically, this bill:  


          1)Specifies no additional state funds will be appropriated for  
            purposes of implementing the requirements of the bill,  
            however; the bill authorizes the Superintendent of Public  
            Instruction (SPI) to use surplus funds from the special  
            deposit account established for the high school equivalency  
            test, to be used to reimburse contractors for any loss of  
            fees.


          2)Requires a contract executed by CDE for the provision of the  
            high school equivalency test to require the contracting party  
            to accept all examinees, including those that qualify for a  
            fee waiver pursuant to this bill. 


          3)Requires the CDE to include a provision in all memorandums of  
            understanding (MOUs) with contractors providing the high  
            school equivalency test, that if the surplus funds in the  
            special deposit account are depleted, the ongoing costs of a  
            fee waiver will be absorbed by the contractor. 


          4)Authorizes the CDE to adopt emergency regulations to implement  
            the bill as necessary.


          5)Defines homeless youth as an individual who lacks fixed,  
            regular, and adequate residence as defined under the federal  
            McKinney-Vento Act and; the status as a homeless youth is  
            required to be verified by homeless services provider such as  
            a government agency or law enforcement officer.


          6)Requires the Superintendent of Public Instruction (SPI), on or  
            before December 1, 2018, to submit a report to the Legislature  








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            on the number of homeless youth that took a high school  
            proficiency test in each of the 2016, 2017 and 2018 calendar  
            years; the impact of the no cost testing option on homeless  
            youth; estimated number of homeless youth that may take a high  
            school proficiency test in future years; a recommendation for  
            a permanent funding source in future years; the annual and  
            projective administrative costs to CDE and reimbursement to  
            contractors.  Sunsets the reporting requirement on January 1,  
            2020.








          FISCAL EFFECT:


          1)This bill prohibits additional state funding from being  
            provided to implement fee exemptions; however, this bill  
            authorizes the CDE to use surplus funds from the GED special  
            deposit account to support the fee exemption and associated  
            administrative costs. The CDE estimates the fund has a surplus  
            of approximately $1.3 million.  Annual costs to cover the fee  
            exemption are unknown.  Approximately 49,000 homeless youth  
            attended grades 10-12, inclusive, according to 2013-14 data.   
            A field survey indicates approximately 63 homeless students  
            took this test last year.  Presumably, this number would  
            increase if the test was provided at no cost.  Assuming 1% of  
            homeless students in grades 10-12 took the test at a cost of  
            $140 per test, this would result in approximately 490 fee  
            exemptions at a total cost of $68,600. 


          2)This bill prohibits additional state funding from being  
            provided to implement fee exemptions, therefore; any costs  
            associated with a fee exemption for the CHSPE would be  








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            absorbed by other test takers at the local level. (The $1.3  
            million identified in the special deposit account noted above  
            cannot be used for costs associated with the CHSPE).  A field  
            survey indicated approximately 60 homeless students took this  
            test last year.  Presumably, this number would increase if the  
            test was provided at no cost. Assuming 1% of homeless students  
            in grades 10-12 took the test at a cost of $110 per test, this  
            would result in approximately 490 fee exemptions at a total  
            cost of $53,900. 


          3)CDE estimates one-time administrative costs of approximately  
            $100,900 and ongoing costs of approximately $77,000 to process  
            reimbursements to vendors and to collect and process data  
            related to reporting requirements in the bill.  These costs  
            are 50% General Fund and 50% Special Funds.  In addition, CDE  
            anticipates minor costs for regulations and for DGS to process  
            the contracts with test vendors. 


          COMMENTS:


          1)Purpose. According to the author, during the 2012-2013 school  
            year, nearly 270,000 California students experienced  
            homelessness. Twenty-seven percent of these students were  
            enrolled in grades 9-12. California studies have found that as  
            many as 75% of older homeless youths drop out of school.   
            Exempting homeless youth from examination fees will remove  
            financial barriers and increase accessibility to the high  
            school proficiency and equivalency examinations.  



          2)High school equivalency exam.  The state authorizes the high  
            school equivalency test (commonly referred to as the GED) as  
            an alternative to a high school diploma.  The State Board of  
            Education has approved three high school equivalency tests for  
            use in California: one is provided by a not-for-profit company  








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            and two are provided by for-profit companies.  The state has  
            established a special deposit account for fees generated from  
            the test to be used for administrative purposes.  Currently  
            the account has a surplus of $1.3 million.  This amount  
            fluctuates annually depending on administrative needs.  For  
            example, according to the CDE, last year the cost to  
            administer the GED was approximately $800,000; however, the  
            state only collected $600,000.   



            This bill authorizes the CDE to use surplus funds to reimburse  
            contractors for any loss of funds as a result of providing fee  
            exemptions to homeless students.  It is not clear how long the  
            account can sustain these reimbursements.  The bill calls for  
            a study to review the sustainability of this funding source.   
            Additionally, if the surplus funds in the special deposit  
            account are depleted, the ongoing costs of a fee waiver are  
            required to be absorbed by the contractor.


          3)California High School Proficiency Exam (CHSPE). The state  
            also authorizes the California High School Proficiency Exam  
            (CHSPE) as an alternative to a high school diploma. CDE is  
            responsible for the CHSPE and contracts with the Sacramento  
            County Office of Education, with support from Educational Data  
            Systems, Inc, to administer the test. Students pay a fee of  
            $110 to take the CHSPE for those who register by the deadline,  
            $135 for late registration, and $160 for emergency  
            registration.  
            


            Costs associated with providing a fee exemption to homeless  
            students will be passed on to other test takers. The CDE has  
            the authority under existing law to raise the fee as necessary  
            to cover these additional costs.










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          Analysis Prepared by:Misty Feusahrens / APPR. / (916)  
          319-2081