BILL NUMBER: AB 519	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 15, 2008
	AMENDED IN SENATE  AUGUST 22, 2008
	AMENDED IN SENATE  AUGUST 12, 2008
	AMENDED IN SENATE  SEPTEMBER 7, 2007
	AMENDED IN ASSEMBLY  APRIL 24, 2007

INTRODUCED BY    Assembly Member  
Portantino   Committee on Budget 

                        FEBRUARY 21, 2007

    An act to add and repeal Section 7362.01 of the Business
and Professions Code, relating to barbering and cosmetology, and
declaring the urgency thereof, to take effect immediately. 
 An act to amend Sections 2558.46, 41203.1, 42238.146, 52052,
52055.57, 52059, 56836.155, 60604, 60605, 60605.6, 60606, 60616,
60630, 60640, 60641, 60642.5, 60643, 60645, 60647, 69521.3, 69521.4,
69521.5, 69521.10, 69521.11, 69522, 69561, and 76300 of, to add
Sections 12143 and 52055.59 to, and to repeal Sections 60642 and
60644 of, the Education Code, relating to education finance, making
an appropriation therefor, and declaring the urgency thereof, to take
effect immediately. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 519, as amended,  Portantino   Committee
on Budget  .  Barbering and cosmetology.  
Education finance.  
   (1) Existing law requires a revenue limit to be calculated for
each county superintendent of schools and requires the revenue limit
to be adjusted for various factors and to be reduced, as specified.
 
   This bill would reduce the revenue limit for each county
superintendent of schools for the 2008-09 fiscal year by a deficit
factor of 4.396%.  
   (2) Existing law requires the State Department of Education, in
cooperation with the Department of Finance, to prepare a
comprehensive state plan, to be submitted to the Legislature by
January 1 of each year, detailing the prospective expenditure,
allocation, and apportionment of federal funds to be appropriated for
the next fiscal year to all educational agencies in the state. The
department, in cooperation with the Department of Finance, also is
required to submit a comprehensive report, to be submitted to the
Legislature by January 1 of each year, that sets forth in detail the
manner in which all federal funds were allocated and apportioned to,
and expended by, educational agencies in this state in the prior
fiscal year.  
   This bill would require the department to submit, to the
Legislature, the Legislative Analyst's Office, and the Governor, 2
annual reports on federal funds for education in kindergarten and
grades 1 to 12, inclusive. One report, to be submitted no later than
February 15 of each year, would provide a 3-year tracking of federal
funds for each federally funded program that includes detail by type
of funded activity and state budget category and the actual
expenditures for the prior year, a revised estimate of current-year
expenditures, and the budget-year appropriation. The other report, to
be submitted no later than November 1 of each year, would identify
available federal carryover funds, identifying those funds, by fiscal
year and potential reversion date, for each federally funded program
by type of funded activity and state budget category.  
   (3) Existing law requires, for the 1990-91 fiscal year and each
fiscal year thereafter, that moneys to be applied by the state for
the support of school districts, community college districts, and
direct elementary and secondary level instructional services provided
by the state be distributed in accordance with certain calculations
governing the proration of those moneys among the 3 segments of
public education. Existing law makes that provision inapplicable to
the fiscal years between the 1992-93 and 2007-08 fiscal years,
inclusive.  
   This bill, in addition, would make that provision inapplicable to
the 2008-09 fiscal year.  
   (4) Existing law requires the county superintendent of schools to
determine a revenue limit for each school district in the county and
requires the amount of the revenue limit to be adjusted for various
factors.  
   This bill would reduce the revenue limit for each school district
by a 4.713% deficit factor for the 2008-09 fiscal year.  
   (5) Existing law requires the State Department of Education to
identify local educational agencies that are in danger of being
identified within 2 years as program improvement local educational
agencies under the federal No Child Left Behind Act of 2001 (20
U.S.C. Sec. 6301 et seq.), and requires those local educational
agencies identified to comply with certain requirements.  
   This bill, if funding is not provided in the annual Budget Act or
other statute, would delete the requirement that program improvement
local educational agencies comply with certain of those requirements.
 
   Under existing law, a local educational agency that is identified
for corrective action under the federal No Child Left Behind Act of
2001 is subject to one or more sanctions recommended by the
Superintendent and approved by the State Board of Education,
including a requirement to contract with a district assistance and
intervention team to aid the local educational agency.  
   This bill would require the department to develop, and the state
board to approve at a public meeting, objective criteria by which a
local educational agency identified for corrective action and subject
to a sanction would be evaluated for the purpose of determining the
pervasiveness and severity of performance problems of the local
educational agency and the sanction to be imposed. The bill would
authorize a one-year, nonrenewable grant of federal improvement
funding to assist in the improvement process of a local educational
agency. The amount of the grant would vary depending on the
pervasiveness and severity of performance problems of the local
educational agency.  
   The bill would prohibit a local educational agency that receives
funding under this program, or that receives other federal funds for
school improvement, from using those funds to compensate a receiver
or trustee assigned by the state board to administer the affairs of
the local educational agency in place of the county superintendent of
schools and the governing board.  
   The bill, subject to an appropriation in the annual Budget Act or
another statute, would require the Superintendent to contract with an
independent evaluator to complete a comprehensive 3-year evaluation
of the program established for local educational agencies that are
identified for corrective action. The evaluation would be required to
examine the implementation, impact, costs, and effectiveness of the
corrective actions and reform strategies and to determine the
effectiveness of the technical assistance provided by the district
intervention and assistance. The Superintendent would be required to
submit 2 interim reports and a final report to the Governor, the
Department of Finance, the Legislature, and the Legislative Analyst's
Office.  
   (6) Existing law requires the department, for purposes of
complying with the federal No Child Left Behind Act of 2001, to
establish a statewide system of school support to provide a statewide
system of intensive and sustained support and technical assistance
for school districts, county offices of education, and schools in
need of improvement. The system consists of regional consortia, which
may include county offices of education and school districts, that
work collaboratively with school districts and county offices of
education to meet the needs of school districts and schools in need
of improvement.  
   This bill would add district assistance and intervention teams and
other technical assistance providers to the system and would require
the teams and other technical assistance providers to conduct a
needs assessment and complete a report on their findings, including
recommendations for improvement and the redirection of resources to
ensure the implementation of the recommendations.  
   (7) Existing law adjusts funding for individuals with exceptional
needs based on an incidence multiplier, as defined, for each special
education local plan area.  
   This bill would continue the current special education incidence
factor formula through the 2008-09 fiscal year.  
   (8) The Leroy Greene California Assessment of Academic Achievement
Act requires the Superintendent to design and implement a statewide
pupil assessment program, known as the Standardized Testing and
Reporting (STAR) Program. The State Board of Education, in its sole
discretion, is required to designate for use as part of the STAR
Program a single test in grades 3 and 7 and to ensure that the
achievement test contains specified subject areas for grades 3 and 7.
 
   This bill would repeal this component of the STAR Program and make
conforming changes.  
   (9) Existing law authorizes the Director of Finance to act as
agent for the state in the sale of the student loan guarantee
portfolio and certain related assets and liabilities of the student
loan guarantee program not retained by the Student Aid Commission to
an entity approved by the United States Secretary of Education to act
as a state student loan guarantee agency for the Federal Family
Education Loan Program, and selected by the Director of Finance, in
consultation with the Treasurer, pursuant to a prescribed procedure.
Existing requires the Director of Finance, in consultation with the
Treasurer, to select a firm or individual to provide advisory
services. Existing law requires the Director of Finance to send a
Notice of Request for Qualifications to specified entities as part of
the sale process. Existing law also requires the notice to be
published in the State Contracts Register pursuant to specified
statutory provisions. Existing law requires the Director of Finance
to cease the activities he or she is authorized to undertake with
regard to the sale upon the 30th day following written notice by the
director to the Chairperson of the Joint Legislative Budget Committee
or January 10, 2009, whichever occurs earlier.  
   This bill would require the Director of Finance to provide a copy
of the Notice of Request for Qualifications to the Joint Legislative
Budget Committee within 7 days of transmittal to state student loan
guarantee agencies and within 7 days of publication in the State
Contracts Register. The bill would require the Director of Finance to
notify the Joint Legislative Budget Committee in writing within 7
days of entering into a contract with an individual or firm for
advisory services. The bill would extend the alternate date upon
which the Director of Finance is required to cease the activities he
or she is authorized to undertake with regard to the sale from
January 10, 2009, to January 10, 2011.  
   (10) Existing law authorizes the Student Aid Commission to
establish an auxiliary organization to provide operational and
administrative services for the commission's participation in the
Federal Family Education Loan Program or for other activities
approved by the commission and determined by the commission to meet
specified criteria. Existing law prohibits the commission from
including loan origination or loan capitalization activities as
approved activities, but states that the prohibition does not
preclude the commission or the auxiliary organization from
undertaking other permitted activities related to student financial
aid in partnership with institutions that conduct loan origination or
loan capitalization activities.  
   This bill, in addition, would state that the prohibition on
including loan origination or loan capitalization activities as
approved activities does not preclude the commission or the auxiliary
organization from undertaking loan origination or capitalization
activities authorized pursuant to an agreement with the United States
Secretary of Education for the lender-of-last-resort program. 

   (11) Existing law requires the Student Aid Commission to
administer the Student Opportunity and Access Program, under which
the commission is authorized to apportion funds for the support of
projects designed to increase the accessibility of postsecondary
educational opportunities for certain elementary and secondary school
pupils, including those from low-income families, those who would be
the first in their families to attend college, and those who are
from schools or geographic regions with documented low-eligibility or
college participation rates. Projects are required to primarily
increase the availability of information for these pupils on the
existence of postsecondary schooling and work opportunities and to
raise the achievement levels of these pupils.  
   This bill would authorize projects to be implemented under the
program that provide assistance to low-income middle and high school
pupils and their parents in order to implement outreach efforts
designed to use the future availability of financial assistance as a
means of motivating pupils to stay in school by promoting career
technical education public awareness. These projects would be
required to promote the value of career technical education,
available career programs in public school and postsecondary segments
with sequenced courses beginning in high school and continuing into
postsecondary institutions, and the resulting career opportunities.
 
   (12) Existing law requires the governing board of each community
college district to charge each student a fee per unit per semester
and requires this fee to be waived for specified students who
demonstrate eligibility for the fee waiver. The Board of Governors of
the California Community Colleges is required to allocate to
community college districts 2% of the fees waived. The board of
governors also is required to allocate to community college districts
$0.91 per credit unit waived for determination of financial need and
delivery of student financial aid services. These allocations are
required to be made from funds provided in the annual Budget Act.
 
   This bill would state the intent of the Legislature that the funds
described above be used to support the determination of financial
need and delivery of student financial aid services and that the
funds directly offset any mandated costs claimed by community college
districts pursuant to specified Commission on State Mandates test
claims.  
   (13) This bill would appropriate $12,500,000 from the Public
Interest Research, Development, and Demonstration Fund to the
Chancellor of the California Community Colleges. Of that appropriated
amount, the bill would require the Chancellor of the California
Community Colleges to transfer $12,000,000 to the State Department of
Education for expenditure in one-time funds for local grants to be
allocated pursuant to specified statutory provisions regarding
partnership academies over 3 years as specified in the Budget Act of
2008. The bill would require grantees to create partnership academies
that focus on clean technology and energy businesses and provide
skilled workforces for the products and services for energy or water
conservation, or both, renewable energy, pollution reduction, or
other technologies that improve the environment in furtherance of
state environmental laws. The bill would require the Chancellor of
the California Community Colleges to transfer the remaining $500,000
to the State Department of Education to pay for the expenses of
administering the local grants.  
   (14) This bill would appropriate $39,780,000 from the General Fund
to the Board of Governors of the California Community Colleges, in
augmentation of an amount appropriated pursuant to a specified item
in Budget Act of 2008, for the purpose of providing a 0.68%
cost-of-living adjustment to apportionments to community college
districts, for expenditure during the 2008-09 fiscal year. The bill
would provide that, for purposes of satisfying the minimum annual
funding obligation for community college districts required by the
California Constitution, those funds are General Fund revenues
appropriated for community college districts for the 2008-09 fiscal
year.  
   (15) This bill would appropriate $388,283,000 from the General
Fund to the State Department of Education for 10 specified programs
according to a specified schedule, and would require the department
to encumber these funds by July 1, 2009. The bill would provide that,
for purposes of satisfying the minimum annual funding obligation for
school districts required by the California Constitution, the
appropriated funds are General Fund revenues appropriated for school
districts and community college districts for the 2009-10 fiscal
year.  
   (16) This bill would appropriate $200,000,000 from the General
Fund to the Board of Governors of the California Community Colleges
for expenditure during the 2009-10 fiscal year according to a
specified item in the Budget Act of 2008. The bill would provide
that, for purposes of satisfying the minimum annual funding
obligation for community college districts required by the California
Constitution, those funds are General Fund revenues appropriated for
community college districts for the 2009-10 fiscal year.  
   (17) Existing law annually appropriates $150,000,000 from the
General Fund to the Controller for allocation by the Controller to
school districts and community colleges for the purpose of
discharging in full the outstanding balance of the minimum funding
obligation to school districts and community college districts
pursuant to Section 8 of Article XVI of the California Constitution
as determined by specified state officials.  
   This bill would provide that there shall be no annual
appropriation in the 2008-09 fiscal year for this purpose.  

   (18) This bill would set the cost-of-living adjustment for
specified items in the Budget Act of 2007 and for specified items in
the Budget Act of 2008 for the 2008-09 fiscal year at 0%
notwithstanding the cost-of-living adjustment specified in existing
statutes.  
   (19) This bill would require funds appropriated pursuant to
specified items in the Budget Act of 2008 to be encumbered by July
31, 2009.  
   (20) This bill would declare that it is to take effect immediately
as an urgency statute.  
   The Barbering and Cosmetology Act provides for licensure and
regulation of persons engaged in barbering, cosmetology, or
electrolysis by the State Board of Barbering and Cosmetology.
Existing law generally requires a licensee of the board to have
completed certain coursework in a school approved by the board,
including private schools that were regulated by the former Bureau
for Private Postsecondary and Vocational Education, which ceased to
exist on July 1, 2007. Pursuant to Chapter 635 of the Statutes of
2007, certain transition provisions were enacted to be in effect
until July 1, 2008, in anticipation of the establishment of a new
Bureau for Private Postsecondary and Vocational Education. Under
these provisions, the board was authorized, until July 1, 2008, to
approve a school under specified conditions that had not been
licensed by the former bureau.  
   This bill, notwithstanding the requirement for private schools to
be licensed by the former Bureau for Private Postsecondary and
Vocational Education, would provide that all schools of barbering,
cosmetology, or electrology that have a valid approval to operate,
and all instructors holding a valid certificate of authorization from
the former bureau as of June 30, 2007, or from the board as of June
30, 2008, would retain those approvals, licenses, or certificates for
purposes of the interpretation of other provisions of applicable law
that refer or relate to the issuance of a license or registration
and meeting qualifications for licensing examinations. The bill would
also provide that any approvals made by the board on or before
December 31, 2008, of a branch or satellite campus, change of
ownership, or the sale or purchase of an approved school of
barbering, cosmetology, or electrology would be deemed to be valid
and effective on January 1, 2009, provided the school seeking the
approval was lawfully operating prior to July 1, 2007. The bill would
also authorize the board to review the application of a person
desiring to establish a school of barbering, cosmetology, or
electrology and issue approval to operate if the applicant is deemed
able to comply with all other applicable laws governing school
operations, subject to certain requirements. The bill would authorize
the board to charge various fees to applicants and approved schools
in that regard which would be deposited in the Barbering and
Cosmetology Contingent Fund. The bill would make these provisions
inoperative and repeal them on January 1, 2010.  
   The provisions of the bill would be inoperative or would not
become operative if SB 823 is enacted.  
   This bill would declare that it is to take effect immediately as
an urgency statute. 
   Vote: 2/3. Appropriation:  no   yes  .
Fiscal committee: yes. State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 2558.46 of the  
Education Code   is amended to read: 
   2558.46.  (a) (1) For the 2003-04 fiscal year, the revenue limit
for each county superintendent of schools determined pursuant to this
article shall be reduced by a 1.195 percent deficit factor.
   (2) For the 2004-05 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced by a 0.323 percent deficit factor.
   (3) For the 2003-04 and 2004-05 fiscal years, the revenue limit
for each county superintendent of schools determined pursuant to this
article shall be  further  reduced  further
 by a 1.826 percent deficit factor.
   (4) For the 2005-06 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be  further  reduced  further  by a 0.898
percent deficit factor. 
   (5) For the 2008-09 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced by a 4.396 percent deficit factor.
   (b) In computing the revenue limit for each county superintendent
of schools for the 2006-07 fiscal year pursuant to this article, the
revenue limit shall be determined as if the revenue limit for that
county superintendent of schools had been determined for the 2003-04,
2004-05, and 2005-06 fiscal years without being reduced by the
deficit factors specified in this section. 
   (c) In computing the revenue limit for each county superintendent
of schools for the 2009-10 fiscal year pursuant to this article, the
revenue limit shall be determined as if the revenue limit for that
county superintendent of schools had been determined for the 2008-09
fiscal year without being reduced by the deficit factors specified in
this section.
   SEC. 2.    Section 12143 is added to the  
Education Code   , to read:  
   12143.  The department shall submit to the Legislature, the
Legislative Analyst's Office, and the Governor the following two
annual reports on federal funds for education in kindergarten and
grades 1 to 12, inclusive:
   (a) One report, to be submitted no later than February 15 of each
year, shall provide a three-year tracking of federal funds. For each
federally funded program, the report shall include detail by type of
funded activity (state administration, state-level activity, local
assistance, and capital outlay) and state budget category (state
operations, local assistance, and capital outlay). For each program,
by type of funded activity and state budget category, the report
shall include all of the following:
   (1) Actual expenditures for the prior year.
   (2) A revised estimate of current year expenditures.
   (3) The budget-year appropriation.
   (b) The other report, to be submitted no later than November 1 of
each year, shall identify available federal carryover funds.
Specifically, this report shall identify carryover funds, by fiscal
year and potential reversion date, for each federally funded program
by type of funded activity (state administration, state-level
activity, local assistance, and capital outlay) and state budget
category (state operations, local assistance, and capital outlay).

   SEC. 3.    Section 41203.1 of the  
Education Code   is amended to read: 
   41203.1.  (a) For the 1990-91 fiscal year and each fiscal year
thereafter, allocations calculated pursuant to Section 41203 shall be
distributed in accordance with calculations provided in this
section. Notwithstanding Section 41203, and for the purposes of this
section, school districts, community college districts, and direct
elementary and secondary level instructional services provided by the
State of California shall be regarded as separate segments of public
education, and each of these three segments of public education
shall be entitled to receive respective shares of the amount
calculated pursuant to Section 41203 as though the calculation made
pursuant to subdivision (b) of Section 8 of Article XVI of the
California Constitution were to be applied separately to each segment
and the base year for the purposes of this calculation under
paragraph (1) of subdivision (b) of Section 8 of Article XVI of the
California Constitution were based on the 1989-90 fiscal year.
Calculations made pursuant to this subdivision shall be made so that
each segment of public education is entitled to the greater of the
amounts calculated for that segment pursuant to paragraph (1) or (2)
of subdivision (b) of Section 8 of Article XVI of the California
Constitution.
   (b) If the single calculation made pursuant to Section 41203
yields a guaranteed amount of funding that is less than the sum of
the amounts calculated pursuant to subdivision (a), the amount
calculated pursuant to Section 41203 shall be prorated for the three
segments of public education.
   (c) Notwithstanding any other law, this section does not apply to
the 1992-93 to  2007-08   2008-   09
 fiscal years, inclusive.
   SEC. 4.    Section 42238.146 of the  
Education Code   is amended to read: 
   42238.146.  (a) (1) For the 2003-04 fiscal year, the revenue limit
for each school district determined pursuant to this article shall
be reduced by a 1.198 percent deficit factor.
   (2) For the 2004-05 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
0.323 percent deficit factor.
   (3) For the 2003-04 and 2004-05 fiscal years, the revenue limit
for each school district determined pursuant to this article shall be
further reduced by a 1.826 percent deficit factor.
   (4) For the 2005-06 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
0.892 percent deficit factor. 
   (5) For the 2008-09 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
4.713 percent deficit factor. 
   (b) In computing the revenue limit for each school district for
the 2006-07 fiscal year pursuant to this article, the revenue limit
shall be determined as if the revenue limit for that school district
had been determined for the 2003-04, 2004-05, and 2005-06 fiscal
years without being reduced by the deficit factors specified in this
section. 
   (c) In computing the revenue limit for each school district for
the 2009-10 fiscal year pursuant to this article, the revenue limit
shall be determined as if the revenue limit for that school district
had been determined for the 2008-09 fiscal year without being reduced
by the deficit factors specified in this section. 
   SEC. 5.    Section 52052 of the   Education
Code   is amended to read: 
   52052.  (a) (1) The Superintendent, with approval of the state
board, shall develop an Academic Performance Index (API), to measure
the performance of schools, especially the academic performance of
pupils.
   (2) A school shall demonstrate comparable improvement in academic
achievement as measured by the API by all numerically significant
pupil subgroups at the school, including:
   (A) Ethnic subgroups.
   (B) Socioeconomically disadvantaged pupils.
   (C) English language learners.
   (D) Pupils with disabilities.
   (3) (A) For purposes of this section, a numerically significant
pupil subgroup is one that meets both of the following criteria:
   (i) The subgroup consists of at least 50 pupils each of whom has a
valid test score.
   (ii) The subgroup constitutes at least 15 percent of the total
population of pupils at a school who have valid test scores.
   (B) If a subgroup does not constitute 15 percent of the total
population of pupils at a school who have valid test scores, the
subgroup may constitute a numerically significant pupil subgroup if
it has at least 100 valid test scores.
   (C) For a school with an API score that is based on no fewer than
11 and no more than 99 pupils with valid test scores, numerically
significant subgroups shall be defined by the Superintendent, with
approval by the state board.
   (4) The API shall consist of a variety of indicators currently
reported to the department, including, but not limited to, the
results of the achievement test administered pursuant to Section
60640, attendance rates for pupils in elementary schools, middle
schools, and secondary schools, and the graduation rates for pupils
in secondary schools.
   (A) Graduation rates for pupils in secondary schools shall be
calculated for the API as follows:
   (i) The number of pupils who graduated on time for the current
school year, which is considered to be three school years after the
pupils entered  9th  grade  9  for the
first time, divided by the total calculated in clause (ii).
   (ii) The number of pupils entering  9th  grade
 9  for the first time in the school year three school years
prior to the current school year, plus the number of pupils who
transferred into the class graduating at the end of the current
school year between the school year that was three school years prior
to the current school year and the date of graduation, less the
number of pupils who transferred out of the school between the school
year that was three school years prior to the current school year
and the date of graduation who were members of the class that is
graduating at the end of the current school year.
   (B) The pupil data collected for the API that comes from the
achievement test administered pursuant to  Sections 
 Section  60640  and 60644  and the high
school exit examination administered pursuant to Section 60851, when
fully implemented, shall be disaggregated by special education
status, English language learners, socioeconomic status, gender, and
ethnic group. Only the test scores of pupils who were counted as part
of the enrollment in the annual data collection of the California
Basic Educational Data System for the current fiscal year and who
were continuously enrolled during that year may be included in the
test result reports in the API score of the school. Results of the
achievement test and other tests specified in subdivision (b) shall
constitute at least 60 percent of the value of the index.
   (C) Before including high school graduation rates and attendance
rates in the API, the Superintendent shall determine the extent to
which the data  are  currently  are 
reported to the state and the accuracy of the data. Notwithstanding
any other provision of law, graduation rates for pupils in dropout
recovery high schools shall not be included in the API. For purposes
of this subparagraph, "dropout recovery high school" means a high
school in which 50 percent or more of its pupils have been designated
as dropouts pursuant to the exit/withdrawal codes developed by the
department.
   (D) The Superintendent shall provide an annual report to the
Legislature on the graduation and dropout rates in California and
shall make the same report available to the public. The report shall
be accompanied by the release of publicly accessible data for each
school district and school in a manner that provides for
disaggregation based upon socioeconomically disadvantaged pupils and
numerically significant subgroups scoring below average on statewide
standards-aligned assessments. In addition, the data shall be made
available in a manner that provides for comparisons of a minimum of
three years of data.
   (b) Pupil scores from the following tests, when available and when
found to be valid and reliable for this purpose, shall be
incorporated into the API: 
   (1) The assessment of the applied academic skills matrix test
developed pursuant to Section 60604.  
   (2) The nationally normed test designated pursuant to Section
60642.  
   (3) 
    (1)  The standards-based achievement tests provided for
in Section 60642.5. 
   (4) 
    (2)  The high school exit examination.
   (c) Based on the API, the Superintendent shall develop, and the
state board shall adopt, expected annual percentage growth targets
for all schools based on their API baseline score from the previous
year. Schools are expected to meet these growth targets through
effective allocation of available resources. For schools below the
statewide API performance target adopted by the state board pursuant
to subdivision (d), the minimum annual percentage growth target shall
be 5 percent of the difference between the actual API score of a
school and the statewide API performance target, or one API point,
whichever is greater. Schools at or above the statewide API
performance target shall have, as their growth target, maintenance of
their API score above the statewide API performance target. However,
the state board may set differential growth targets based on grade
level of instruction and may set higher growth targets for the lowest
performing schools because they have the greatest room for
improvement. To meet its growth target, a school shall demonstrate
that the annual growth in its API is equal to or more than its
schoolwide annual percentage growth target and that all numerically
significant pupil subgroups, as defined in subdivision (a), are
making comparable improvement.
   (d) Upon adoption of state performance standards by the state
board, the Superintendent shall recommend, and the state board shall
adopt, a statewide API performance target that includes consideration
of performance standards and represents the proficiency level
required to meet the state performance target. When the API is fully
developed, schools  must  , at a minimum,  shall
 meet their annual API growth targets to be eligible for the
Governor's Performance Award Program as set forth in Section 52057.
The state board may establish additional criteria that schools must
meet to be eligible for the Governor's Performance Award Program.
   (e) The API shall be used for both of the following:
   (1) Measuring the progress of schools selected for participation
in the Immediate Intervention/Underperforming Schools Program
pursuant to Section 52053.
   (2) Ranking all public schools in the state for the purpose of the
High Achieving/Improving Schools Program pursuant to Section 52056.
   (f) (1) A school with 11 to 99 pupils with valid test scores shall
receive an API score with an asterisk that indicates less
statistical certainty than API scores based on 100 or more test
scores.
   (2) A school  shall  annually  shall 
receive an API score, unless the Superintendent determines that an
API score would be an invalid measure of the performance of the
school for one or more of the following reasons:
   (A) Irregularities in testing procedures occurred.
   (B) The data used to calculate the API score of the school are not
representative of the pupil population at the school.
   (C) Significant demographic changes in the pupil population render
year-to-year comparisons of pupil performance invalid.
   (D) The department discovers or receives information indicating
that the integrity of the API score has been compromised.
   (E) Insufficient pupil participation in the assessments included
in the API.
   (3) If a school has fewer than 100 pupils with valid test scores,
the calculation of the API or adequate yearly progress pursuant to
the federal No Child Left Behind Act of 2001 (20 U.S.C. Sec. 6301 et
seq.) and federal regulations may be calculated over more than one
annual administration of the tests administered pursuant to 
Sections   Section  60640  and 60644
 and the high school exit examination administered pursuant
to Section 60851, consistent with regulations adopted by the state
board.
   (g) Only schools with 100 or more test scores contributing to the
API may be included in the API rankings.
   (h) The Superintendent, with the approval of the state board,
shall develop an alternative accountability system for schools under
the jurisdiction of a county board of education or a county
superintendent of schools, community day schools, nonpublic,
nonsectarian schools pursuant to Section 56366, and alternative
schools serving high-risk pupils, including continuation high schools
and opportunity schools. Schools in the alternative accountability
system may receive an API score, but shall not be included in the API
rankings.
   SEC. 6.    Section 52055.57 of the  
Education Code   is amended to read: 
   52055.57.  (a) (1)  Any provisions  
Provisions  that are applicable to local educational agencies
under this section are for the purpose of implementing federal
requirements under the federal No Child Left Behind Act of 2001 (20
U.S.C. Sec. 6301 et seq.). The satisfaction of these criteria by
local educational agencies that choose to participate under this
article shall be a condition of receiving funds pursuant to this
section.
   (2) The department shall identify local educational agencies that
are in danger of being identified within two years as program
improvement local educational agencies under the federal No Child
Left Behind Act of 2001  (20 U.S.C. Sec. 6301 et seq.)
 , and shall notify those local educational agencies, in
writing, of this status and provide those local educational agencies
with research-based criteria to conduct a voluntary self-assessment.
   (3) The self-assessment shall identify deficiencies within the
operations of the local educational agency, and the programs and
services of the local educational agency.
   (4) A local educational agency identified pursuant to paragraph
(2) is encouraged to revise its local educational agency plan based
on the results of the self-assessment.
   (5) The program described in this subdivision shall be referred to
as the "Early Warning Program."
   (b) (1) A local educational agency identified as a program
improvement local educational agency under the federal No Child Left
Behind Act of 2001  (20 U.S.C. Sec. 6301 et seq.) 
shall do all of the following:
   (A) Conduct a self-assessment using materials and criteria based
on current research and provided by the department.
   (B) No later than 90 days after a local educational agency
 becomes   is  identified for program
improvement, contract with a county office of education or another
external entity after working with the county superintendent of
schools, for both of the following purposes:
   (i) Verifying the fundamental teaching and learning needs in the
schools of that local educational agency as determined by the local
educational agency self-analysis, and identifying the specific
academic problems of low-achieving pupils, including a determination
of why the prior plan of the local educational agency failed to bring
about increased pupil academic achievement.
   (ii) Ensuring that the local educational agency receives intensive
support and expertise to implement local educational agency reform
initiatives in the revised local educational agency plan as required
by the federal No Child Left Behind Act of 2001  (20 U.S.C.
Sec. 6301 et seq.)  .
   (C) Revise and expeditiously implement the local educational
agency plan  of the local educational agency to
reflect the findings of the verified self-assessment.
   (D) After working with the county superintendent of schools or an
external verifier, contract with an external provider to provide
support and implement recommendations to assist the local educational
agency in resolving shortcomings identified in the verified
self-assessment.
   (2) (A) Subject to the availability of funds in the annual Budget
Act for this purpose, a local educational agency described in
paragraph (1)  may  annually  may  receive
fifty thousand dollars ($50,000), plus ten thousand dollars ($10,000)
for each school that is supported by federal funds pursuant to Title
I of the federal No Child Left Behind Act of 2001  (20
U.S.C. Sec. 6301 et seq.)  within the local educational
agency, for the purpose of fulfilling the requirements of this
subdivision.  If funding is not provided in the annual Budget Act
or other statute, local educational agencies shall not be subject to
the requirements of subparagraphs (B) and (D) of paragraph (1).

   (B) Subject to the availability of funds appropriated in the
annual Budget Act for this purpose, a local educational agency
identified as a program improvement local educational agency during
the 2005-06 fiscal year, shall receive priority for funding based
upon the performance of the socioeconomically disadvantaged subgroup
of the local educational agency on the Academic Performance Index.
Priority for funding shall be provided to the lowest performing local
educational agencies that are identified as program improvement
local educational agencies. It is the intent of the Legislature that
funds apportioned pursuant to this paragraph be used to support
activities identified in paragraph (1).
   (C) It is the intent of the Legislature that a local educational
agency identified as a program improvement local educational agency
receive no more than two years of funding pursuant to this paragraph.

   (c)  (1)    A local educational
agency that has been identified for corrective action under the
federal No Child Left Behind Act of 2001  (20 U.S.C. Sec.
6301 et seq.),  shall be subject to one or more of the
following sanctions as recommended by the Superintendent and approved
by the state board: 
   (A) 
    (1)  Replacing local educational agency personnel who
are relevant to the failure to make adequate yearly progress.

   (B) 
    (2)  Removing schools from the jurisdiction of the local
educational agency and establishing alternative arrangements for the
governance and supervision of those schools. 
   (C) 
    (3)  Appointing, by the state board, a receiver or
trustee, to administer the affairs of the local educational agency in
place of the county superintendent of schools and the governing
board. 
   (D) 
    (4)  Abolishing or restructuring the local educational
agency. 
   (E) 
    (5)  Authorizing pupils to transfer from a school
operated by the local educational agency to a higher performing
school operated by another local educational agency, and providing
those pupils with transportation to those schools, in conjunction
with carrying out not less than one additional action described under
this paragraph. 
   (F) 
    (6)  Instituting and fully implementing a new curriculum
that is based on state academic content and achievement standards,
including providing appropriate professional development based on
scientifically based research for all relevant staff, that offers
substantial promise of improving educational achievement for
high-priority pupils. 
   (G) 
    (7)  Deferring programmatic funds or reducing
administrative funds. 
   (2) In addition to the sanctions prescribed by paragraph (1), the
Superintendent may recommend, and the state board may approve, the
requirement that a local educational agency contract with a district
assistance and intervention team to aid a local educational agency.
 
   (3) Subject to the availability of funds in the annual Budget Act
for this purpose, if the state board requires a local educational
agency to contract with a district assistance and intervention team
pursuant to paragraph (2), the local educational agency may annually
receive fifty thousand dollars ($50,000), plus ten thousand dollars
($10,000) for each school that is supported by federal funds pursuant
to Title I of the federal No Child Left Behind Act of 2001 (20
U.S.C. Sec. 6301 et seq.) within the local educational agency, for no
more than two years, for the purpose of contracting with and
implementing the recommendations of the district assistance and
intervention team.  
   (4) Not later than January 31, 2006, the Superintendent shall
develop and the state board shall approve, standards and criteria to
be applied by a district assistance and intervention team in carrying
out their duties. The standards and criteria shall include all of
the following areas:  
   (A) Governance.  
   (B) Alignment of curriculum, instruction, and assessments to state
standards.  
   (C) Fiscal operations.  
   (D) Parent and community involvement.  
   (E) Human resources.  
   (F) Data systems and achievement monitoring.  
   (G) Professional development.  
   (d) (1) The department shall develop, and the state board shall
approve at a public meeting, objective criteria by which a local
educational agency identified for corrective action and subject to a
sanction listed under subdivision (c) shall be evaluated to determine
the pervasiveness and severity of its performance problems and the
sanction to be imposed.  
   (2) A local educational agency identified for corrective action
and subject to a sanction listed under subdivision (c) may apply for
a one-year, nonrenewable grant of federal improvement funding to
assist in its improvement process and may expend that grant funding
over the time period allowable under federal law. It is the intent of
the Legislature to integrate federal funding that is available for
this purpose, including, but not limited to, funding for program
improvement and school improvement grants pursuant to Section 6303 of
Title 20 of the United States Code.  
   (3) The amount of a grant for a local educational agency with
extensive and severe performance problems shall be one hundred fifty
thousand dollars ($150,000) per school identified for program
improvement pursuant to federal law. The amount of a grant for a
local educational agency with moderate performance problems shall be
one hundred thousand dollars ($100,000) per school identified for
program improvement pursuant to federal law. The amount of a grant
for a local educational agency with minor or isolated performance
problems shall be fifty thousand dollars ($50,000) per school
identified for program improvement pursuant to federal law. 

                                       (4) A local educational agency
that receives funding under this subdivision shall use the funds in
accordance with Section 6316(b) and (c) of Title 20 of the United
States Code. Pursuant to the technical assistance requirements under
the federal No Child Left Behind Act of 2001 outlined in Section 6312
(b) and (c) and Section 6317 of Title 20 of the United States Code,
the Superintendent may recommend, and the state board may approve,
that a local educational agency contract with a district assistance
and intervention team or other technical assistance provider to
receive guidance, support, and technical assistance. A district
intervention and assistance team or other technical provider with
which a local educational agency is required to contract shall
perform the duties specified in subdivision (e) of Section 52059.
 
   (5) Notwithstanding any other law, a local educational agency that
receives funding under this subdivision or that receives other
federal funds for school improvement shall not use those funds to
compensate a receiver or trustee assigned by the state board pursuant
to paragraph (3) of subdivision (c).  
   (d) 
    (e)  A local educational agency that has received a
sanction under subdivision (c) and has not exited program improvement
under the federal No Child Left Behind Act of 2001  (20
U.S.C. Sec. 6301 et seq.)  shall appear before the state
board within three years to review the progress of the local
educational agency. Upon hearing testimony and reviewing written data
from the local educational agency  and   ,
 the district assistance and intervention team  ,  or
county superintendent of schools, the Superintendent shall recommend,
and the state board may approve, an alternative sanction under
subdivision (c), or may take any appropriate action. 
   (e) 
    (f)  Subject to the availability of funds in the annual
Budget Act for this purpose, a local educational agency that is not
identified as a program improvement local educational agency under
the federal No Child Left Behind Act of 2001  (20 U.S.C. Sec.
6301 et seq.)  may annually receive up to fifteen thousand
dollars ($15,000) per school identified as a program improvement
school for the purposes of supporting schools identified as program
improvement schools in the local educational agency and determining
barriers to improved pupil academic achievement. That local
educational agency shall receive no less than forty thousand dollars
($40,000) and no more than one million five hundred thousand dollars
($1,500,000) for those purposes. The Superintendent shall compile a
list that ranks each local educational agency based on the number of,
and percentage of, schools identified as program improvement schools
and shall provide this funding to local educational agencies equally
from each list until all funds appropriated for this purpose are
depleted. These funds shall be provided for no more than three years.

   (f) If there are more local educational agencies that qualify to
receive funds under subdivisions (b), (c), and (e) than the amount
appropriated for these purposes, the Superintendent may redirect
funding for the purposes of subdivision (b). 
   (g) For purposes of this article, "local educational agency" means
a school district, county office of education, or charter school
that elects to receive its funding directly pursuant to Section
47651, and that provides public educational services to pupils in
kindergarten or any of grades 1 to 12, inclusive. 
   (h) For purposes of this section, a "stakeholder" is, but is not
necessarily limited to, any of the following:  
   (1) A parent of a child attending a school within the jurisdiction
of the local educational agency.  
   (2) A community partner of the local educational agency. 

   (3) An employee of the local educational agency, as selected by
the bargaining unit.  
   (i) A local educational agency shall not receive funds pursuant to
subdivision (b), (c), or (e) if it is initially identified for
program improvement or prevention after July 1, 2009. 
  SE   C. 7.    Section 52055.59 is added to
the   Education Code   , to read:  
   52055.59.  (a) Subject to an appropriation in the annual Budget
Act or other statute, the Superintendent shall contract with an
independent evaluator to complete a comprehensive three-year
evaluation of the program established pursuant to subdivision (d) of
Section 52055.57. It is the intent of the Legislature that a total of
one million dollars ($1,000,000) be provided for the independent
evaluation, with three hundred thirty-four thousand dollars
($334,000) provided for the 2008-09 fiscal year, three hundred
thirty-three thousand dollars ($333,000) provided for the 2009-10
fiscal year, and three hundred thirty-three thousand dollars
($333,000) provided for the 2010-11 fiscal year. The evaluation shall
focus on local educational agencies that are identified for
corrective action beginning with the 2007-08 fiscal year, and in the
2008-09, 2009-10, and 2010-11 fiscal years, and shall include data
compiled for those local educational agencies for those years.
   (b) The evaluation shall examine the implementation, impact,
costs, and effectiveness of the corrective actions and reform
strategies undertaken by local educational agencies that are
identified for corrective action, as specified in subdivision (a).
The evaluation also shall determine the effectiveness of the
technical assistance provided by the district assistance and
intervention teams and other technical assistance providers pursuant
to Section 52059.
   (c) The Superintendent shall ensure that the evaluation includes,
at a minimum, all of the following factors:
   (1) Program implementation data, including, but not limited to, a
review of startup activities, the quality of the academic program,
local governance and leadership, the allocation of fiscal resources,
the allocation of personnel, management practices, community support,
parental participation, the use of pupil data to inform
instructional practice, and staff development.
   (2) Pupil performance data, including, but not limited to, results
of assessments used to determine whether local educational agencies
have made significant progress towards meeting their state and
federal academic growth targets and data for each of the following
subgroups:
   (A) English learners.
   (B) Pupils with exceptional needs.
   (C) Pupils who are eligible for funds under Title I of the federal
No Child Left Behind Act of 2001 (20 U.S.C. Sec. 6301 et seq.).
   (3) Data on the percentage of fully credentialed teachers, the
percentage of teachers who hold emergency credentials, the percentage
of teachers assigned outside their subject area of competence, the
accreditation status of the school if appropriate, average class size
per grade level, and the number of pupils in multitrack, year-round
schools. These data shall be compiled for the 2008-09, 2009-10, and
2010-11 school years.
   (d) The evaluation shall include a rigorous qualitative and
quantitative assessment of how program implementation affected pupil
achievement and teacher quality using the information required
pursuant to subdivision (c).
   (e) The Superintendent shall submit two interim reports and a
final report to the Governor, the Department of Finance, the
Legislature, and the Legislative Analyst's Office. The reports shall
be submitted to these agencies no later than November 1, 2009,
November 1, 2010, and November 1, 2011, respectively. 
   SEC. 8.    Section 52059 of the   Education
Code   is amended to read: 
   52059.  (a) For purposes of complying with the federal No Child
Left Behind Act of 2001 (20 U.S.C. Sec. 6301 et seq.), a 
Statewide System of School Support   statewide system of
school support  shall be established by the department to
provide a statewide system of intensive and sustained support and
technical assistance for school districts, county offices of
education, and schools in need of improvement. The system shall
consist of regional consortia  , which may include county
offices of education and school districts, that work collaboratively
with school districts and county offices of education to meet the
needs of school districts and schools in need of improvement
  as well as district assistance and intervention teams
and other technical assistance providers  .
   (b) The  system   regional consortia 
shall  work collaboratively with, and  provide 
technical  assistance to  ,  school districts and
schools in need of improvement by  doing the following  :
   (1) Reviewing and analyzing all facets of the operation of a 
local educational agency or  school, including the following:
   (A) The design and operation of the instructional program offered
by the  local educational agency or  school.
   (B) The recruitment, hiring, and retention of principals,
teachers, and other staff, including vacancy issues. The 
system   regional consortia  may request the
assistance of the Fiscal Crisis and Management Assistance Team to
review school district or school recruitment, hiring, and retention
practices.
   (C) The roles and responsibilities of district and school
management personnel.
   (2) Assisting the  local educational agency or  school in
developing recommendations for improving pupil performance and
school operations.
   (3) Assisting  schools and school districts  
the local educational agency or school  in efforts to eliminate
misassignments of certificated personnel. 
   (c) For purposes of performing the functions specified in
subdivision (b), funds for the regional consortia shall be
distributed based on the number of Title I schools, the pupil
enrollment in those schools, and the number of school districts in
each region that have been identified as being in need of improvement
pursuant to Section 6316 of Title 20 of the United States Code.
 
   (c) In carrying out this article, the department 
    (d)     The regional consortia  shall
ensure that support is provided in the following order of priority:
   (1) To school districts or county offices of education with
schools that are subject to corrective action under 
paragraph (7) of subsection (b) of  Section  6316
  6316(b)(7)  of Title 20 of the United States
Code.
   (2) To school districts or county offices of education with
schools that are identified as being in need of improvement pursuant
to  subsection (b) of  Section  6316
  6316(b)  of Title 20 of the United States Code.
   (3) To provide support and assistance to school districts and
county offices of education with schools participating under the 
federal  No Child Left Behind Act of 2001  (20 U.S.C.
Sec. 6301 et seq.)  that need support and assistance to
achieve the purposes of that act.
   (4) To provide support and assistance to other school districts
and county offices of education with schools participating in a
program carried out under this chapter. 
   (e) In accordance with paragraph (4) of subdivision (d) of Section
52055.57, the Superintendent may recommend, and the state board may
approve, that a local educational agency that has been identified for
corrective action under the federal No Child Left Behind Act of 2001
contract with a district assistance and intervention team or other
technical assistance provider to receive technical assistance,
including, but not limited to, a needs assessment of the local
educational agency.  
   (1) The Superintendent shall develop, and the state board shall
approve, standards and criteria to be applied by a district
assistance and intervention team or other technical assistance
provider in carrying out its duties. The standards and criteria that
a district assistance and intervention team or other technical
assistance provider shall use in assessing a local educational agency
shall address, at a minimum, all of the following areas:  
   (A) Governance.  
   (B) Alignment of curriculum, instruction, and assessments to state
standards.  
   (C) Fiscal operations.  
   (D) Parent and community involvement.  
   (E) Human resources.  
   (F) Data systems and achievement monitoring. 
   (G) Professional development.  
   (2) Not later than 120 days after the assignment of a district
assistance and intervention team or other technical assistance
provider, or the next regularly scheduled meeting of the state board
following the expiration of the 120 days, the team shall complete a
report based on the findings from the needs assessment performed
pursuant to paragraph (1). The report shall include, at a minimum,
recommendations for improving the areas specified in paragraph (1)
that are found to need improvement. The report also shall address the
manner in which existing resources should be redirected to ensure
that the recommendations can be implemented.  
   (3) Not later than 30 days after completion of the report
specified in paragraph (2), the governing board of the local
educational agency may submit an appeal to the Superintendent to be
exempted from implementing one or more of the recommendations made in
the report. The Superintendent, with approval of the state board,
may exempt the local educational agency from complying with one or
more of the recommendations made in the report.  
   (4) Not later than 60 days after completion of the report, the
governing board of the local educational agency shall adopt the
report recommendations described in paragraph (2), as modified by any
exemptions granted by the Superintendent under paragraph (3), at a
regularly scheduled meeting of the governing board.  
   (f) A local educational agency that is required to contract with a
district assistance and intervention team or other technical
assistance provider pursuant to this section shall reserve funding
provided under subdivision (d) of Section 52055.57 to cover the
entire cost of the team or other technical assistance provider before
using that funding for other reform activities.  
   (g) Upon an evidence-based finding that a district assistance and
intervention team or other technical assistance provider has not
fulfilled its legal obligations pursuant to this section, the
Superintendent, with the approval of the state board, may remove the
district assistance and intervention team or other technical
assistance provider from the state list of eligible providers. 

   (h) The provisions of this section are declarative of technical
assistance requirements under the federal No Child Left Behind Act of
2001 outlined in Section 6316(b) and (c) and Section 6317(a) of
Title 20 of the United States Code.  
   (d) 
    (i)  For purposes of this article, all references to
schools shall include charter schools. 
   (e) Funds shall be distributed under this article based on the
number of schools, the pupil enrollment in those schools, and the
number of school districts in each region that have been identified
as being in need of improvement pursuant to Section 6316 of Title 20
of the United States Code, or are participating in the programs
conducted under this chapter. 
   SEC. 9.    Section 56836.155 of the  
Education Code   is amended to read: 
   56836.155.  (a) On or before November 2, 1998, the department, in
conjunction with the Legislative Analyst's Office, shall do the
following:
   (1) Calculate an "incidence multiplier" for each special education
local plan area using the definition, methodology, and data provided
in the final report submitted by the American Institutes for
Research pursuant to Section 67 of Chapter 854 of the Statutes of
1997.
   (2) Submit the incidence multiplier for each special education
local plan area and supporting data to the Department of Finance.
   (b) The Department of Finance shall review the incidence
multiplier for each special education local plan area and the
supporting data, and report any errors to the department and the
Legislative Analyst's Office for correction.
   (c) The Department of Finance shall approve the final incidence
multiplier for each special education local plan area by November 23,
1998.
   (d) For the 1998-99 fiscal year and each fiscal year thereafter to
and including the  2007-08   2008-  
09  fiscal year, the Superintendent shall perform the following
calculation to determine the adjusted entitlement of each special
education local plan area for the incidence of disabilities:
   (1) The incidence multiplier for the special education local plan
area shall be multiplied by the statewide target amount per unit of
average daily attendance for special education local plan areas
determined pursuant to Section 56836.11 for the fiscal year in which
the computation is made.
   (2) The amount determined pursuant to paragraph (1) shall be added
to the statewide target amount per unit of average daily attendance
for special education local plan area determined pursuant to Section
56836.11 for the fiscal year in which the computation is made.
   (3) Subtract the amount of funding for the special education local
plan area determined pursuant to paragraph (1) of subdivision (a) or
paragraph (1) of subdivision (b) of Section 56836.08, as appropriate
for the fiscal year in which the computation is made, or the
statewide target amount per unit of average daily attendance for
special education local plan areas determined pursuant to Section
56836.11 for the fiscal year in which the computation is made,
whichever is greater, from the amount determined pursuant to
paragraph (2). For the purposes of this paragraph for the 2002-03,
2003-04, 2004-05, 2005-06, 2006-07,  and  2007-08
 , and 2008-   09  fiscal years, the amount, if
any, received pursuant to Section 56836.159 shall be excluded from
the funding level per unit of average daily attendance for a special
education local plan area. If the result is less than zero, the
special education local plan area  may   shall
 not receive an adjusted entitlement for the incidence of
disabilities.
   (4) Multiply the amount determined in paragraph (3) by either the
average daily attendance reported for the special education local
plan area for the fiscal year in which the computation is made, as
adjusted pursuant to subdivision (a) of Section 56836.15, or the
average daily attendance reported for the special education local
plan area for the prior fiscal year, as adjusted pursuant to
subdivision (a) of Section 56826.15, whichever is less.
   (5) If there are insufficient funds appropriated in the fiscal
year for which the computation is made for the purposes of this
section, the amount received by each special education local plan
area shall be prorated.
   (e) For the 1997-98 fiscal year, the Superintendent shall perform
the calculation in paragraphs (1) to (3), inclusive, of paragraph (d)
only for the purposes of making the computation in paragraph (1) of
subdivision (d) of Section 56836.08, but the special education local
plan area  may   shall  not receive an
adjusted entitlement for the incidence of disabilities pursuant to
this section for the 1997-98 fiscal year.
   SEC. 10.    Section 60604 of the   Education
Code   is amended to read: 
   60604.  (a) The Superintendent shall design and implement,
consistent with the timetable and plan required pursuant to
subdivision (b), a statewide pupil assessment program consistent with
the testing requirements of this article in accordance with the
objectives set forth in Section 60602. That program shall include all
of the following:
   (1) A plan for producing valid, reliable, and comparable
individual pupil scores in grades 2 to 11, inclusive, and a
comprehensive analysis of these scores based on the results of the
achievement test designated by the state board that assesses a broad
range of basic academic skills pursuant to the Standardized Testing
and Reporting (STAR) Program established by Article 4 (commencing
with Section 60640).
   (2) A method of working with publishers to ensure valid, reliable,
and comparable individual, grade-level, school-level,
district-level, county-level, and statewide scores in grades 2 to 11,
inclusive  , that is based on the achievement test
designated pursuant to subdivision (b) of Section 60605  .
   (3) Statewide academically rigorous content and performance
standards that reflect the knowledge and skills that pupils will need
in order to succeed in the information-based, global economy of the
21st century. These skills shall not include personal behavioral
standards or skills, including, but not limited to, honesty,
sociability, ethics, or self-esteem.
   (4) A statewide system that provides the results of testing in a
manner that reflects the degree to which pupils are achieving the
academically rigorous content and performance standards adopted by
the state board.
   (5) The alignment of assessment with the statewide academically
rigorous content and performance standards adopted by the state
board.
   (6) The active, ongoing involvement of parents, classroom
teachers, administrators, other educators, governing board members of
school districts, and the public in all phases of the design and
implementation of the statewide pupil assessment program.
   (7) The development of a contract or contracts with a publisher or
publishers, after the approval of statewide academically rigorous
content standards by the state board, for the development of
performance standards and assessments of applied academic skills
designed to test pupils' knowledge of academic skills and abilities
to apply that knowledge and those skills in order to solve problems
and communicate.
   (b) The Superintendent shall develop and annually update for the
Legislature a five-year cost projection, implementation plan, and
timetable for implementing the program described in subdivision (a).
The annual update shall be submitted on or before March 1 of each
year to the chairperson of the fiscal subcommittee considering budget
appropriations in each house. The update shall explain any
significant variations from the five-year cost projection for the
current year budget and the proposed budget.
   (c) The Superintendent shall provide each school district with
guidelines for professional development that are designed to assist
classroom teachers to use the results of the assessments administered
pursuant to this chapter to modify instruction for the purpose of
improving pupil learning. These guidelines shall be developed in
consultation with classroom teachers and approved by the state board
before dissemination.
   (d) The Superintendent and the state board shall consider comments
and recommendations from school districts and the public in the
development, adoption, and approval of assessment instruments.
   (e) The results of the achievement test administered pursuant to
Article 4 (commencing with Section 60640) shall be returned to the
school district within the period of time specified by the state
board.
   (f) This section shall become inoperative on July 1, 2011.
   SEC. 11.    Section 60605 of the   Education
Code   is amended to read: 
   60605.  (a) (1) (A) Not later than January 1, 1998, the state
board shall adopt statewide academically rigorous content standards,
pursuant to the recommendations of the Commission for the
Establishment of Academic Content and Performance Standards, in the
core curriculum areas of reading, writing, and mathematics to serve
as the basis for assessing the academic achievement of individual
pupils and of schools, school districts, and the California
educational system. Not later than November 1, 1998, the state board
shall adopt these standards in the core curriculum areas of
history/social science and science.
   (B) The state board shall adopt statewide performance standards in
the core curriculum areas of reading, writing, mathematics,
history/social science, and science based on the recommendations made
by the Superintendent of a contractor or contractors.
   (C) The state board shall require the contractor or contractors to
submit performance standards to the Superintendent and the state
board not later than a specified date that allows sufficient
opportunity for the Superintendent to make a recommendation to the
state board and for the state board to conduct regional hearings
prior to the adoption of the performance standards.
   (2) (A) The state board may modify any proposed content standards
or performance standards prior to adoption and may adopt content and
performance standards in individual core curriculum areas as those
standards are submitted to the state board. The state performance
standards shall be established against specific grade level
benchmarks of academic achievement for each subject area tested and
shall be based on the knowledge and skills that pupils will need in
order to succeed in the information-based, global economy of the 21st
century. These skills shall not include personal behavioral
standards or skills, including, but not limited to, honesty,
sociability, ethics, or self-esteem. The standards adopted pursuant
to this section shall be for the purpose of guiding state decisions
regarding the development, adoption, and approval of assessment
instruments pursuant to this chapter and does not mandate any actions
or activities                                                  by
school districts.
   (B) Because these standards are models, the adoption of these
standards is not subject to the Administrative Procedure Act. This
subparagraph is declaratory of existing law.
   (3) Before adopting academic content and performance standards,
the state board shall hold regional hearings for the purpose of
giving parents and other members of the public the opportunity to
comment on the proposed standards. 
   (b) (1) The state board shall require the department to notify
publishers of the opportunity to submit, for consideration by the
state board pursuant to Section 60642, tests of achievement that
include all of the basic academic skills identified in subdivision
(c) of Section 60603 in grades 2 to 8, inclusive, and the core
curriculum areas of English and language arts, mathematics, and
science in grades 9 to 11, inclusive.  
   (2) The Superintendent shall recommend to the state board which
achievement test to adopt pursuant to subdivision (b) of Section
60642.  
   (c) 
    (b)  (1) The state board shall ensure that the statewide
assessment system adopted pursuant to this chapter yields valid,
reliable individual pupil scores and, where applicable, aggregate
school scores, school district scores, and statewide scores of pupils
and assesses basic academic skills and content standards, including
the use of a direct writing assessment or other applied academic
skills if deemed valid and reliable and if resources are made
available for their use.
   (2) This subdivision does not prevent the state board from
developing or adopting an assessment instrument that also contains
assessments of basic academic skills. 
   (d) 
    (c)  To the extent feasible and as otherwise required,
the state board shall ensure that assessments developed, or
contracted for pursuant to Section 60642.5, by the state are aligned
with the statewide content and performance standards adopted pursuant
to subdivision (a). The department, with the approval of the state
board, periodically shall contract for a review of the achievement
test for conformance with these standards. 
   (e) 
    (d)  After adopting statewide content and performance
standards, the state board shall review the existing curriculum
frameworks for conformity with the new statewide standards and shall
modify the curriculum frameworks where appropriate to bring them into
alignment with the standards. 
   (f) 
    (e)  The state board shall adopt regulations for the
conduct and administration of the testing and assessment program.

   (g) 
    (f)  The state board shall adopt a regulation for
minimum security procedures that test and assessment publishers and
school districts must follow to ensure the security and integrity of
test and assessment questions and materials. 
   (h) 
    (g)  This section shall become inoperative on July 1,
2011.
   SEC. 12.    Section 60605.6 of the  
Education Code   is amended to read: 
   60605.6.  Subject to the availability of funds in the annual
Budget Act for this purpose, the Superintendent, upon approval of the
state board, shall contract for the development and distribution of
workbooks, as follows:
   (a) One workbook to be distributed to all pupils in  the
10th  grade  10  . This workbook shall contain
information on the proficiency levels that must be demonstrated by
pupils on the high school exit examination described in Chapter 9
(commencing with Section 60850). The workbook also shall contain
sample questions, with explanations describing how these sample
questions test pupil knowledge of the language arts and mathematics
content standards adopted by the state board pursuant to Section
60605.
   (b) Separate workbooks for each of grades 2 to 11, inclusive. Each
pupil in grades 2 to 11, inclusive, who is required to take the
achievement tests described in  Section 60642 or 
Section 60642.5 shall receive a copy of the workbook designed for the
same grade level in which the pupil is enrolled. These workbooks
shall contain material to assist pupils and their parents with
standards-based learning, including the grade appropriate academic
content standards adopted by the state board pursuant to Section
60605 and sample questions that require knowledge of these standards
to answer. The workbooks also shall describe how the sample questions
test knowledge of the state board adopted academic content
standards.
   (c) This section shall become inoperative on July 1, 2011.
   SEC. 13.    Section 60606 of the   Education
Code   is   amended to read: 
   60606.  (a) After  designating a test of academic
achievement for use in grades 2 to 11, inclusive, pursuant to Section
60642, or  adopting an assessment of applied academic
skills for use in grades 4, 5, 8, and 10 pursuant to Section 60605,
the state board shall submit  each of those two instruments
when   the instrument, once  designated or adopted
 to   , for review by  the Statewide Pupil
Assessment Review Panel, which is hereby established  , for
review by the panel  .
   (b) The panel shall consist of six members. Three members shall be
appointed by the Governor, one member shall be appointed by the
Senate Committee on Rules, one member shall be appointed by the
Speaker of the Assembly, and one member shall be appointed by the
Superintendent. A majority of the panel shall consist of parents
whose children attend public schools in the state in kindergarten and
grades 1 to 12, inclusive.
   (c) Panel members shall serve two-year terms, without
compensation. No panel member shall serve more than two consecutive
terms.
   (d) The panel shall review the  two instruments 
 instrument  specified in subdivision (a) in order to ensure
that the content of the  instruments  
instrument  complies with the requirements of Section 60614.
Notwithstanding any other provision of law, the panel may meet in
closed session with a publisher for the purpose of addressing
questions and clarifying issues that relate to ensuring that the
content of the publisher's test or assessment, as the case may be,
 comply  complies  with the requirements of
Section 60614.
   (e) The panel shall report its findings and recommendations to the
state board within 10 days of its receipt of  each 
 the  instrument. If the panel fails to report within the
required 10 days, the test or assessment shall be deemed acceptable
to the panel.
   (f) This section shall become inoperative on July 1, 2011.
   SEC. 14.    Section 60616 of the   Education
Code   is amended to read: 
   60616.  Any achievement test  designated pursuant to
Section 60642 or  adopted by the  State Board of
Education   state board  pursuant to this chapter
may be reviewed by any Member of the Legislature or any member of the
governing board of a school district, if the member agrees in
writing prior to the review to maintain the confidentiality of the
test.
   SEC. 15.    Section 60630 of the   Education
Code   is amended to read: 
   60630.  (a) The Superintendent  of Public Instruction
 shall prepare and submit an annual report to the
Legislature and the  State Board of Education  
state board  containing an analysis of the results and test
scores of the assessment of applied academic skills adopted pursuant
to subdivision  (c)   (b)  of Section 60605
 and the achievement test designated pursuant to Section
60642  . The report simultaneously shall be made available
in an electronic medium on the Internet. The analysis may include,
but need not be limited to, the following factors:
   (1) Financial characteristics, including specially funded
programs.
   (2) Pupil and parent characteristics.
   (3) Staff characteristics.
   (4) Instructional methodologies and materials.
   (b) School districts shall submit to the  State Department
of Education   department  whatever information
the department deems necessary to carry out this section.
   SEC. 16.    Section 60640 of the   Education
Code   is amended to read: 
   60640.  (a) There is hereby established the Standardized Testing
and Reporting Program, to be known as the STAR Program.
   (b)  Commencing in the 2004-05 fiscal year and each fiscal
year thereafter, and from   From  the funds
available for that purpose, each school district, charter school, and
county office of education  shall administer to each of its
pupils in grades 3 and 7 the achievement test designated by the state
board pursuant to Section 60642 and  shall administer to
each of its pupils in grades 2 to 11, inclusive, the standards-based
achievement test provided for in Section 60642.5. The state board
shall establish a testing period to provide that all schools
administer these tests to pupils at approximately the same time
during the instructional year, except as necessary to ensure test
security and to meet the final filing date.
   (c) The publisher and the school district shall provide two makeup
days for the testing of previously absent pupils within the testing
period established by the state board in subdivision (b).
   (d) The governing board of the school district may administer
achievement tests in grades other than those required by subdivision
(b) as it deems appropriate.
   (e) Pursuant to Section 1412(a)(17) of Title 20 of the United
States Code, individuals with exceptional needs, as defined in
Section 56026, shall be included in the testing requirement of
subdivision (b) with appropriate accommodations in administration,
where necessary, and those individuals with exceptional needs who are
unable to participate in the testing, even with accommodations,
shall be given an alternate assessment.
   (f) (1) At the option of the school district, pupils with limited
English proficiency who are enrolled in any of grades 2 to 11,
inclusive, may take a second achievement test in their primary
language. Primary language tests administered pursuant to this
subdivision and subdivision (g) shall be subject to the requirements
of subdivision (a) of Section 60641. These primary language tests
shall produce individual pupil scores that are valid and reliable.
   (2) Notwithstanding any other law, the state board shall designate
for use, as part of this program, a single primary language test in
each language for which a test is available for grades 2 to 11,
inclusive, pursuant to the process used for designation of the
assessment chosen in the 1997-98 fiscal year, as specified in
 Sections 60642 and   Section  60643, as
applicable.
   (3) (A) The department shall use funds made available pursuant to
Title VI of the federal No Child Left Behind Act of 2001 (20 U.S.C.
Sec. 6301 et seq.) and appropriated by the annual Budget Act for the
purpose of developing and adopting primary language assessments that
are aligned to the state academic content standards. Subject to the
availability of funds, primary language assessments shall be
developed and adopted for reading/language arts and mathematics in
the dominant primary language of limited-English-proficient pupils.
The dominant primary language shall be determined by the count in the
annual language census of the primary language of each
limited-English-proficient pupil enrolled in the California public
schools.
   (B) Once a dominant primary language assessment is available for
use for a specific grade level, it shall be administered in place of
the assessment designated pursuant to paragraph (1) for that grade
level.
   (C) In choosing a contractor to develop a primary language
assessment the state board shall consider the criteria for choosing a
contractor or test publisher as specified by  Sections 60642
and   Section  60643, and as specified by Section
60642.5, as applicable.
   (D) Subject to the availability of funds, the assessments shall be
developed in grade order starting with the lowest grade subject to
the STAR Program.
   (E) If the state board contracts for the development of primary
language assessments or test items to augment an existing assessment,
the state shall retain ownership rights to the assessment and the
test items. With the approval of the state board, the department may
license the test for use in other states subject to a compensation
agreement approved by the Department of Finance.
   (F) On or before January 1, 2006, the department shall submit to
the Legislature a report on the development and implementation of the
initial primary language assessments and recommendations on the
development and implementation of future assessments and funding
requirements.
   (g) A pupil identified as limited English proficient pursuant to
the administration of a test made available pursuant to Section 60810
who is enrolled in any of grades 2 to 11, inclusive, and who either
receives instruction in his or her primary language or has been
enrolled in a school in the United States for less than 12 months
shall be required to take a test in his or her primary language if a
test is available.
   (h) (1) The Superintendent shall apportion funds to school
districts to enable school districts to meet the requirements of
subdivisions (b), (e), (f), and (g).
   (2) The state board annually shall establish the amount of funding
to be apportioned to school districts for each test administered and
annually shall establish the amount that each publisher shall be
paid for each test administered under the agreements required
pursuant to Section 60643. The amounts to be paid to the publishers
shall be determined by considering the cost estimates submitted by
each publisher each September and the amount included in the annual
Budget Act, and by making allowance for the estimated costs to school
districts for compliance with the requirements of subdivisions (b),
(e), (f), and (g).
   (3) An adjustment to the amount of funding to be apportioned per
test shall not be valid without the approval of the Director of
Finance. A request for approval of an adjustment to the amount of
funding to be apportioned per test shall be submitted in writing to
the Director of Finance and the chairpersons of the fiscal committees
of both houses of the Legislature with accompanying material
justifying the proposed adjustment. The Director of Finance is
authorized to approve only those adjustments related to activities
required by statute. The Director of Finance shall approve or
disapprove the amount within 30 days of receipt of the request and
shall notify the chairpersons of the fiscal committees of both houses
of the Legislature of the decision.
   (i) For purposes of making the computations required by Section 8
of Article XVI of the California Constitution, the appropriation for
the apportionments made pursuant to paragraph (1) of subdivision (h),
and the payments made to the publishers under the contracts required
pursuant to Section 60643 or subparagraph (C) of paragraph (1) of
subdivision (a) of Section 60605 between the department and the
contractor, are "General Fund revenues appropriated for school
districts," as defined in subdivision (c) of Section 41202, for the
applicable fiscal year, and included within the "total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated pursuant to Article XIII B," as
defined in subdivision (e) of Section 41202, for that fiscal year.
   (j) As a condition to receiving an apportionment pursuant to
subdivision (h), a school district shall report to the Superintendent
all of the following:
   (1) The number of pupils enrolled in the school district in grades
2 to 11, inclusive.
   (2) The number of pupils to whom an achievement test was
administered in grades 2 to 11, inclusive, in the school district.
   (3) The number of pupils in paragraph (1) who were exempted from
the test at the request of their parents or guardians.
   (k) The Superintendent and the state board are authorized and
encouraged to assist postsecondary educational institutions to use
the assessment results of the California Standards Tests, including,
but not limited to, the augmented California Standards Tests, for
academic credit, placement, or admissions processes.
   (l) The Superintendent, with the approval of the state board,
annually shall release to the public test items from the
standards-based achievement tests pursuant to Section 60642.5
administered in previous years. The minimum number of test items
released per year shall be equal to 25 percent of the total number of
test items on the test administered in the previous year.
   (m) This section shall become inoperative on July, 1, 2011.
   SEC. 17.    Section 60641 of the   Education
Code   is amended to read: 
   60641.  (a) The department shall ensure that school districts
comply with each of the following requirements:
   (1) The  achievement test designated pursuant to Section
60642 and the  standards-based achievement test provided for
in Section 60642.5  are   is  scheduled to
be administered to all pupils during the period prescribed in
subdivision (b) of Section 60640.
   (2) The individual results of each pupil test administered
pursuant to Section 60640 shall be reported, in writing, to the
 pupil's  parent or guardian  of the pupil 
. The written report shall include a clear explanation of the
purpose of the test, the  pupil's  score  of the
pupil  , and  its   the  intended use
by the school district  of the test score  . This
subdivision does not require teachers or other school district
personnel to prepare individualized explanations of  each
pupil's   the  test score  of each pupil 
.
   (3) (A) The individual results of each pupil test administered
pursuant to Section 60640  also  shall  also
 be reported to the  pupil's  school and
teachers  of a pupil  . The school district shall include
the  pupil's  test results  o   f a
pupil  in his or her pupil records. However, except as provided
in this section, individual pupil test results  may 
only  may  be released with the permission of either the
pupil's parent or guardian if the pupil is a minor, or the pupil if
the pupil has reached the age of majority or is emancipated.
   (B) Notwithstanding subparagraph (A), a pupil or his or her parent
or guardian may authorize the release of individual pupil results to
a postsecondary educational institution for the purpose of credit,
placement, or admission.
   (4) The districtwide, school-level, and grade-level results of the
STAR Program in each of the grades designated pursuant to Section
60640, but not the score or relative position of any individually
ascertainable pupil, shall be reported to the governing board of the
school district at a regularly scheduled meeting, and the countywide,
school-level, and grade-level results for classes and programs under
the jurisdiction of the county office of education shall be
similarly reported to the county board of education at a regularly
scheduled meeting.
   (b) The publisher  designated pursuant to Section 60642
and the publisher  of the standards-based achievement tests
provided for in Section 60642.5 shall make the individual pupil,
grade, school, school district, and state results available to the
department pursuant to paragraph (9) of subdivision (a) of Section
60643 by August 8 of each year in which the achievement test is
administered for those schools for which the last day of test
administration, including makeup days, is on or before June 25. The
department shall make the grade, school, school district, and state
results available on the Internet by August 15 of each year in which
the achievement test is administered for those schools for which the
last day of test administration, including makeup days, is on or
before June 25.
   (c) The department shall take all reasonable steps to ensure that
the results of the test for all pupils who take the test by June 25
are made available on the Internet by August 15, as set forth in
subdivision (b).
   (d) The department shall ensure that a California Standards Test
that is augmented for the purpose of determining credit, placement,
or admission of a pupil in a postsecondary educational institution
inform a pupil in grade 11 that he or she may request that the
results from that assessment be released to a postsecondary
educational institution.
   SEC. 18.    Section 60642 of the   Education
Code   is repealed.  
   60642.  (a) The Superintendent and the state board may consider
any evaluations of independent experts who have not been employed by
a test publisher in the preceding 12 months regarding the suitability
of the achievement tests submitted by publishers as required by
subdivision (b) of Section 60605 for use as part of the STAR Program
established by this article.
   (b) Based upon a review of the achievement tests submitted and the
recommendation made by the Superintendent pursuant to subdivision
(b) of Section 60605, the state board, in its sole discretion, based
on the considerations set forth in Section 60644, shall designate for
use as part of the STAR Program a single test in grades 3 and 7.
   (c) The state board shall ensure that the achievement test
designated pursuant to subdivision (b) contains the subject areas
specified in subdivision (c) of Section 60603 for grades 3 and 7.
   (d) The state board is hereby authorized to designate the
achievement test to be administered pursuant to this article for more
than one academic year subject to the availability of funds.
   (e) The state board shall minimize, to the extent it deems
feasible, the amount of testing time required by the assessment in
subdivision (b) for those content areas for which there also exists a
standards-based examination as provided for pursuant to Section
60642.5.
   (f) This section shall become inoperative on July, 1, 2011.

   SEC. 19.    Section 60642.5 of the  
Education Code   is amended to read: 
   60642.5.  (a) The Superintendent  of Public Instruction
 , with approval of the  State Board of Education
  state board  , shall provide for the development
of an assessment instrument, to be called the California Standards
Tests, that measures the degree to which pupils are achieving the
academically rigorous content standards and performance standards, to
the extent standards have been adopted by the  State Board
of Education   state board  .  This
  These  standards-based achievement  test
 tests  shall contain the subject areas specified
in  paragraph (3) of  subdivision  (c) 
 (a)  of Section 60603 for grades 2 to 8, inclusive, and
shall include an assessment in history/social science in at least one
elementary or middle school grade level selected by the 
State Board of Education   state board  and science
in at least one elementary or middle school grade level selected by
the  State Board of Education   state board
 , and the core curriculum areas specified in  paragraph (5)
of  subdivision  (e)   (a)  of
Section 60603 for grades 9 to 11, inclusive, except that
history-social science shall not be included in the grade 9
assessment unless the  State Board of Education 
 state board  adopts academic content standards for a grade
9 history-social science course, and shall include, at a minimum, a
direct writing assessment once in elementary school and once in
middle or junior high school and other items of applied academic
skill if deemed valid and reliable and if resources are made
available for their use.
   (b) In approving a contract for the development or administration
of the California Standards Tests, the  State Board of
Education   state board  shall consider each of the
following criteria:
   (1) The ability of the contractor to produce valid, reliable
individual pupil scores.
   (2) The ability of the contractor to report results pursuant to
subdivision (a) of Section 60643 by August 8.
   (3) The ability of the contractor to ensure alignment between the
standards-based achievement test and the academically rigorous
content and performance standards as those standards are adopted by
the State Board of Education   state board 
. This criterion shall include the ability of the contractor to
implement a process to establish and maintain alignment between the
test items and the standards.
   (4) The per pupil cost estimates of developing  ,
 and, if appropriate, administering the proposed assessment
with a system to facilitate the determination of future per pupil
cost determinations.
   (5) The  contractor's  procedures  of the
contractor  to  ensuring   ensure  the
security and integrity of test questions and materials.
   (6) The  contractor's  experience  of the
contractor  in successfully conducting testing programs adopted
and administered by other states. For experience to be considered,
the number of grades and pupils tested shall be provided.
   (c) The standards-based achievement tests may use items from other
tests  including items from the achievement test designated
pursuant to Section 60642  .
   SEC. 20.    Section 60643 of the   Education
Code   is amended to read: 
   60643.  (a) To be eligible for consideration under Section
 60642 or  60642.5 by the state board, test
publishers shall agree in writing each year to meet the following
requirements, as applicable, if selected:
   (1) Enter into an agreement, pursuant to subdivision (e) or (f),
with the department by October 15 of that year.
   (2)  With respect to selection under Section 60642.5,
align   Align  the standards-based achievement test
provided for in Section 60642.5 to the academically rigorous content
and performance standards adopted by the state board.
   (3) Comply with subdivisions (c) and (d) of Section 60645.
   (4) Provide valid and reliable individual pupil scores 
only in the content areas specified in subdivision (c) of Section
60642  to parents or guardians, teachers, and school
administrators.
   (5) Provide valid and reliable aggregate scores  only in
the content areas specified in subdivision (c) of Section 60642
 to school districts and county boards of education in all
of the following forms and formats:
   (A) Grade level.
   (B) School level.
   (C) District level.
   (D) Countywide.
   (E) Statewide.
     (F) Comparison of statewide scores relative to other states.
   (6) Provide disaggregated scores, based on
limited-English-proficient status and nonlimited-English-proficient
status. For purposes of this section, pupils with
"nonlimited-English-proficient status" shall include the total of
those pupils who are English-only pupils, fluent-English-proficient
pupils, and redesignated fluent-English-proficient pupils. These
scores shall be provided to school districts and county boards of
education in the same forms and formats listed in paragraph (5).
   (7) Provide disaggregated scores by pupil gender and ethnicity and
provide disaggregated scores based on whether pupils are
economically disadvantaged or not. These disaggregated scores shall
be in the same forms and formats as listed in paragraph (5). In any
one year, the disaggregation shall entail information already being
collected by school districts, county offices of education, or
charter schools.
   (8) Provide disaggregated scores for pupils who have
individualized education programs and have enrolled in special
education, to the extent required by federal law. These scores shall
be provided in the same forms and formats listed in paragraph (5).
This section shall not be construed to exclude the scores of special
education pupils from any state or federal accountability system.
   (9) Provide information listed in paragraphs (5), (6), (7), and
(8) to the department and the state board in the medium requested by
each entity, respectively.
   (b) It is the intent of the Legislature that the publisher work
with the Superintendent and the state board in developing a
methodology to disaggregate statewide scores as required in
paragraphs (6) and (7) of subdivision (a), and in determining which
variable indicated on the STAR testing document shall serve as a
proxy for "economically disadvantaged" status pursuant to paragraph
(7)  of subdivision (a)  .
   (c) Access to  any  information about individual
pupils or their families shall be granted to the publisher only for
purposes of correctly associating test results with the pupils who
produced those results or for reporting and disaggregating test
results as required by this section. School districts are prohibited
from excluding a pupil from the test if a parent or parents decline
to disclose income. This chapter does not abridge or deny rights to
confidentiality contained in the federal Family Educational Rights
and Privacy Act of 1974 (20 U.S.C. Sec. 1232g) or other applicable
 provisions of  state and federal law that protect
the confidentiality of information collected by educational
institutions.
   (d) Notwithstanding any other  provision of  law,
the publisher of the  achievement test designated pursuant
to Section 60642, the publisher of the  standards-based
achievement test provided for in Section 60642.5  , 
or any contractor under subdivision (f) shall comply with all of the
conditions and requirements enumerated in subdivision (a), as
applicable, to the satisfaction of the state board.
   (e) (1) A publisher shall not provide a test described in Section
 60642,  60642.5  ,  or 60650 or in
subdivision (f) of Section 60640 for use in California public
schools, unless the publisher enters into a written contract with the
department as set forth in this subdivision.
   (2) The department shall develop, and the state board shall
approve, a contract to be entered into with  any 
 a  publisher pursuant to paragraph (1). The department may
develop the contract through negotiations with the publisher.
   (3) For purposes of the contracts authorized pursuant to this
subdivision, the department is exempt from the requirements of Part 2
(commencing with Section 10100) of Division 2 of the Public Contract
Code and from the requirements of Article 6 (commencing with Section
999) of Chapter 6 of Division 4 of the Military and Veterans Code.
   (4) The contracts shall include provisions for progress payments
to the publisher for work performed or costs incurred in the
performance of the contract. Not less than 10 percent of the amount
budgeted for each separate and distinct component task provided for
in each contract shall be withheld pending final completion of all
component tasks by that publisher. The total amount withheld pending
final completion shall not exceed 10 percent of the total contract
price.
   (5) The contracts shall require liquidated damages to be paid by
the publisher in the amount of up to 10 percent of the total cost of
the contract for any component task that the publisher through its
own fault or that of its subcontractors fails to substantially
perform by the date specified in the agreement.
   (6) The contracts shall establish the process and criteria by
which the successful completion of each component task shall be
recommended by the department and approved by the state board.
   (7) The publishers shall submit, as part of the contract
negotiation process, a proposed budget and invoice schedule, that
includes a detailed listing of the costs for each component task and
the expected date of the invoice for each completed component task.
   (8) The contracts shall specify the following component tasks, as
applicable, that are separate and distinct:
   (A) Development of new tests or test items as required by
paragraph (2) of subdivision (a).
   (B) Test materials production or publication.
   (C) Delivery of test materials to school districts.
   (D) Test processing, scoring, and analyses.
   (E) Reporting of test results to the school districts, including,
but not limited to, all reports specified in this section.
   (F) Reporting of test results to the department, including, but
not limited to, the electronic files required pursuant to this
section.
   (G) All other analyses or reports required by the Superintendent
to meet the requirements of state and federal law and set forth in
the agreement.
   (9) The contracts shall specify the specific reports and data
files, if any, that are to be provided to school districts by the
publisher and the number of copies of each report or file to be
provided.
   (10) The contracts shall specify the means by which any delivery
date for materials to each school district shall be verified by the
publisher and the school district.
   (11) School districts may negotiate a separate agreement with the
publisher for any additional materials or services not within the
contracts specified in this subdivision, including, but not limited
to, the administration of the tests to pupils in grade levels other
than grades 2 to 11, inclusive. Any separate agreement is not within
the scope of the contract specified in this subdivision.
   (f) The department, with approval of the state board, may enter
into a separate contract for the development or administration of
 any   a  test authorized pursuant to this
part, including, but not limited to, item development, coordination
of tests, assemblage of tests or test items, scoring, or reporting.
The liquidated damages provision set forth in paragraph (5) of
subdivision (e) shall apply to  any   a 
contract entered into pursuant to this subdivision.
   (g) This section shall become inoperative on July, 1, 2011.
   SEC. 21.    Section 60644 of the   Education
Code   is repealed.  
   60644.  In designating an achievement test pursuant to Section
60642, the state board shall adopt only a nationally normed test that
meets nationally recognized criteria for validity and reliability
and shall consider each of the following criteria:
   (a) Ability of the publisher to produce valid, reliable individual
pupil scores.
   (b) Quality and age of empirical data supporting national norm
referenced data analysis of the proposed assessment.
   (c) Ability to report results pursuant to the provisions of
paragraphs (4) to (7), inclusive, of subdivision (a) of Section 60643
by August 8.
   (d) Ability to report results that permit comparability between
data from school districts' previous administration of standardized
achievement tests, if feasible.
   (e) Per-pupil cost estimates of administering the proposed
assessment.
   (f) The publisher's procedure for ensuring the security and
integrity of test questions and materials.
   (g) Experience in the successful conduct of testing programs
adopted and administered by other states. For experience to be
considered, the number of grades and pupils tested shall be provided.

   SEC. 22.    Section 60645 of the   Education
Code   is amended to read: 
   60645.  (a) The panel established pursuant to Section 60606 shall
review  the achievement test designated by the State Board of
Education pursuant to Section 60642,  the standards-based
achievement test provided for in Section 60642.5  , 
and items identified in subdivision (d) for compliance with Section
60614.
   (b)  Any test   Test  questions or test
content identified by the panel to be out of compliance with Section
60614 shall be recommended for deletion or replacement pursuant to
subdivision (e) of Section 60606.
   (c) The  State Board of Education   state
board  shall ensure that any question or content not in
compliance with Section 60614 is deleted from  assessments
designated pursuant to Section 60642 and  the
standards-based achievement test provided for in Section 60642.5.
   (d) If necessary to maintain the requirements of Section 60642.5,
the publisher shall replace deleted test content with revisions that
comply with Section 60614 as required by the  State Board of
Education   state board  pursuant to subdivision
(c).
   SEC. 23.    Section 60647 of the   Education
Code   is amended to read: 
   60647.   Any   An  action to challenge
 any   a  provision of this article or
 any   a  determination made by the
 State Board of Education thereunder   state
board under this article , shall be filed and adjudicated
pursuant to  the provisions of  Sections 860 to 870,
inclusive, of the Code of Civil Procedure  , except that any
determination made by the State Board of Education pursuant to
Section 60642 may only be challenged by an unsuccessful publisher
pursuant to an action filed within 30 days thereafter  . No
exercise of discretion by the  State Board of Education
  state board  in its administration of this
article or exercise of its discretion pursuant to Section 60605 shall
be overturned absent a finding that the  State Board of
Education   state board  acted in an arbitrary and
capricious manner.
   SEC. 24.    Section 6   9521.3 of the 
 Education Code   is amended to read: 
   69521.3.  (a) The Director of Finance is hereby authorized to act
as agent for the state and, in that capacity, to sell the state
student loan guarantee program assets and liabilities not retained by
the Student Aid Commission to an entity that the director, in
consultation with the Treasurer, determines will provide the best
combination of each of the following:
   (1) The highest price for those state student loan guarantee
program assets and liabilities.
   (2) The greatest security for the payment of the purchase price.
   (3) Demonstrated competence and professional qualifications
necessary for the continued satisfactory performance of student loan
guarantee services.
   (4) The approval of the Secretary of Education.
   (5) The quality of student services offered, including, but not
necessarily limited to, borrower training in budgeting and financial
management, including debt management and other forms of financial
literacy.
   (6) Borrower transparency or disclosure policies for products or
services, or both, offered to students outside of the federal student
loan programs.
   (b) Notwithstanding any other provision of law, the sale process
shall include the steps the director, in consultation with the
Treasurer, deems necessary or convenient to achieve the ends set
forth in this section. The process shall include, but not necessarily
be limited to, all of the following:
   (1) The satisfaction of criteria established by the director, in
consultation with the Treasurer, consistent with achieving a
combination of the best price for those state student loan guarantee
program assets and liabilities and the continued operation of student
loan guarantee services for California under the Federal Family
Education Loan Program. These criteria shall include any pertinent
requirements of the Secretary of Education.
   (2) A Notice of Request for Qualifications sent by the Director of
Finance to each firm currently acting as a state student loan
guarantee agency under the Federal Family Education Loan Program and
any entity proposed by the Secretary of Education, and advertised in
the State Contracts Register pursuant to Sections 14827.1 and 14827.2
of the Government Code. This notice shall include a description of
the state student loan guarantee program, a summary description of
the state student loan guarantee program assets and liabilities
offered for sale, and a description of the due diligence review
process to provide potential purchasers with further information
regarding the state student loan guarantee program assets and
liabilities offered for sale, the selection criteria on which the
transaction will be based, the submission requirements and deadlines,
and a Department of Finance contact name and telephone number for
more information.  A copy of the Notice of Request for
Qualifications shall be provided to the Joint Legislative Budget
Committee within seven days of transmittal to state student loan
guarantee agencies. 
   (3) The evaluation by the director, in consultation with the
Treasurer, of all statements timely submitted in response to the
Notice of Request for Qualifications sent pursuant to paragraph (2),
using the criteria contained in the notice, and, based on those
statements, the establishment of a qualified purchasers list.
   SEC. 25.    Section 69521.4 of the  
Education Code   is amended to read: 
   69521.4.  (a) If, after seeking the advice of, and in active
participation with, the Treasurer, the Director of Finance determines
that an alternative arrangement to the sale of the state student
loan guarantee program assets and liabilities may be financially
beneficial to the state, the Director of Finance is also hereby
authorized to enter into an arrangement other than that authorized in
Section 69521.3, for the purpose of maximizing the value of the
state student loan guarantee program assets and liabilities. This
arrangement may take any form the director, in consultation with the
Treasurer, deems advisable to provide the best combination of each of
the following:
   (1) The greatest value to the General Fund.
   (2) The greatest financial security for achieving value to the
General Fund.
   (3) The continued satisfactory performance of student loan
guarantee services.
   (4) The approval of the United States Secretary of Education, to
the extent required by Public Law 94-482, or subsequent federal
regulations.
   (5) The quality of student services offered, including, but not
necessarily limited to, borrower training in budgeting and financial
management, including debt management and other forms of financial
literacy.
   (6) Borrower transparency or disclosure policies for products or
services, or both, offered to students outside of the federal student
loan programs.
   (b) Notwithstanding any other provision of law, this process shall
include the steps the Director of Finance, in consultation with the
Treasurer, deems necessary or convenient to achieve the ends set
forth in this section. The process shall include, but not necessarily
be limited to, all of the following:
   (1) The satisfaction of the established criteria consistent with
achieving a combination of the greatest value to the General Fund and
the continued operation of student loan guarantee services for
California under the Federal Family Education Loan Program. The
criteria shall include any pertinent requirements of the Secretary of
Education.
   (2) A Notice of Request for Qualifications sent by the director to
each nonprofit entity currently acting as a state student loan
guaranty agency under the Federal Family Education Loan Program, any
entity known to the director to be acting as a servicing agent for a
state student loan guaranty agency, and any nonprofit entity proposed
by the Secretary of Education, and advertised in the State Contracts
Register pursuant to Sections 14827.1 and 14827.2 of the Government
Code. The notice shall include a description of the state student
loan guarantee program, a summary description of the state student
loan guarantee program assets and liabilities, and a description of
the due diligence review process to provide further information
regarding the state student loan guarantee program assets and
liabilities, the selection criteria on which the transaction will be
based, submission requirements and date, and a Department of Finance
contact name and phone number for more information.  A copy of
the Notice of Request for Qualifications shall be provided to the
Joint Legislative Budget Committee within seven days of transmittal
to state student loan guarantee agencies. 
   (3) The evaluation by the director, in consultation with the
Treasurer, of all statements timely submitted in response to the
Notice of Request for Qualifications, using the criteria contained in
the notice, and, based on the statements, the establishment of a
qualified purchasers list.
   SEC. 26.    Section 69521.5 of the  
Education Code   is amended to read: 
   69521.5.  (a) The Director of Finance is authorized to take all
actions that he or she deems to be necessary or convenient to
accomplish any of the following:
   (1) To preserve the state student loan guarantee program assets,
pending consummation of their sale or the consummation of any other
transaction, to maximize the value of the state student loan
guarantee program to the state, including, without limitation, as
authorized in Sections 69522, 69526, and 69766.
   (2) To engage in negotiations with, and provide sufficient
information regarding the state student loan guarantee assets and
liabilities to, potential purchasers or any potential transferee
guaranty program operator.
   (3) To either consummate the sale of, and transfer, the state
student loan guarantee program assets and liabilities not retained to
the Student Aid Commission to the transferee guarantee agency, or to
consummate the agreement with the transferee guaranty program
operator.
   (4) To seek and negotiate with the United States Secretary of
Education the designation of any alternative state student loan
guarantee agency for California under the Federal Family Education
Loan Program or the approval of the Secretary of Education of any
transferee guaranty program operator to the extent required by Public
Law 94-82, or subsequent federal regulations.
   (5) To transfer the Federal Student Loan Reserve Fund to any
transferee guaranty agency in a manner that is consistent with the
intentions of the United States Secretary of Education.
   (6) To transfer any of the state student loan guarantee program
assets in the form of cash or investments not transferred to any
transferee guaranty agency or transferee guarantee program operator
directly to the General Fund.
   (7) To retain any state student loan guarantee program assets
determined by the director to be necessary or appropriate for the
purposes of the Student Aid Commission.
   (b) In order to accomplish the purposes of this article, the
Director of Finance shall do all of the following:
   (1) Notify the Chairperson of the Joint Legislative Budget
Committee and the chairpersons of the Senate and Assembly Budget
Committees of the  director's  determination  of
the Director of Finance  to proceed with a transaction other
than the sale of the state student loan guarantee program assets and
liabilities pursuant to Section 69521.3, providing that notice no
 less   later  than 30 days prior to the
consummation of the transaction with the transferee guarantee program
operator  , or at a later date that the director determines
to be most beneficial to the negotiations of the transaction
 .
   (2) Upon the consummation of the sale of the state student loan
guarantee program assets to a transferee guaranty agency, the
Director of Finance shall notify the Secretary of State and the
Chairperson of the Joint Legislative Budget Committee.
   (3) Upon the consummation of a transaction authorized by this
article with a transferee guarantee program operator, the Director of
Finance shall notify the Secretary of State and the Chairperson of
the Joint Legislative Budget Committee.
   (c) In order to accomplish the purposes of this article:
   (1) The Student Aid Commission shall cooperate fully with the
Director of Finance and, in particular, take all steps to preserve
the state student loan guarantee program assets deemed necessary or
convenient by the Director of Finance, including, without limitation,
as set forth in Sections 69522, 69526, and 69766.
   (2) The Student Aid Commission shall direct the auxiliary
organization to cooperate fully with the director.
   (3) Until the consummation of the sale or other transaction to
maximize the value of the state student loan guarantee program to the
state, all of the actions, approvals, and directions of the Student
Aid Commission affecting the state student loan guarantee program
shall be effective only upon the approval of the Director of Finance.

   (4) Notwithstanding any provision of the Nonprofit Public Benefit
Corporation Law (Part 2 (commencing with Section 5110) of Division 2
of Title 1 of the Corporations Code), the auxiliary organization
shall, as directed by the  commission   Student
Aid Commission  under paragraph (2), cooperate fully with the
Director of Finance.
   SEC. 27.    Section 69521.10 of the  
Education Code   is amended to read:
   69521.10.  (a) The Director of Finance, in consultation with the
Treasurer, shall select a firm or individual to provide advisory
services based on demonstrated competence and professional
qualifications necessary for the satisfactory performance of the
services required, in the manner described in this section.
   (b) The Director of Finance and the Treasurer shall establish
selection criteria for selecting an advisor. The criteria may
include, but are not necessarily limited to, factors such as
professional excellence, demonstrated competence, specialized
experience in performing similar services, education and experience
of key personnel to be assigned, staff capability, ability to meet
schedules, nature and quality of similar completed work of the firm
or individual, reliability and continuity of the firm or individual,
and other considerations deemed by the director and the Treasurer to
be relevant and necessary to the performance of advisory services.
   (c) The Director of Finance  shall  , for the
purposes of obtaining services under this section,  shall 
send a Notice of Request for Qualifications to firms and individuals
in the  Treasurer's  underwriter and financial
advisor pools  of the Treasurer  . The director shall
publish this notice in the State Contracts Register pursuant to
Sections 14827.1 and 14827.2 of the Government Code. The notice shall
include a description of the advisory services required, the
selection criteria based on which the contract award will be made,
submission requirements and deadlines, and a Department of Finance
contact name and telephone number for more information.  A copy
of the Notice of Request for Qualifications shall be provided to the
Joint Legislative Budget Committee within seven days of publication
in the State Contracts Register. 
   (d) (1) After the final response date stated in the Notice of
Request for Qualifications, the Director of Finance and the Treasurer
shall review the responses submitted, and shall evaluate them using
the criteria contained in the notice. The director and the Treasurer
shall rank, in order of preference based on the criteria contained in
the notice, the firm or individuals determined to be qualified to
perform the required services.
   (2) The Director of Finance and the Treasurer, or their designees,
may interview any of the qualified firms or individuals regarding
the experience and qualifications of those firms or individuals, as
well as anticipated concepts and the benefits of alternative methods
of furnishing the required services.
   (e) (1) Following the interviews, if any, held pursuant to
subdivision (d), the Director of Finance and the Treasurer shall
adjust the ranking of the qualified individuals or firms to reflect
those firms or individuals deemed to be the most highly qualified to
perform the required services.
   (2) The Director of Finance, in consultation with the Treasurer,
shall enter into negotiations with the firm or individual most highly
ranked pursuant to paragraph (1). If negotiations are concluded
successfully, the director shall enter into a contract. If the
director, in his  or her  sole discretion, concludes that
the negotiations are unsuccessful, the director shall terminate the
negotiations, and begin new negotiations, in consultation with the
Treasurer, with the other firms or individuals ranked pursuant to
paragraph (1) in order of their ranking, and either contract with or
terminate negotiations with each next most highly ranked firm or
individual.
   (3) If, after pursuing the negotiation process set forth in
paragraph (2), the Director of Finance has been unable to negotiate a
satisfactory contract at fair and reasonable compensation, the
director may reinstitute the selection process prescribed in this
section, commencing with the issuance of a new Notice of Request for
Qualifications. 
   (4) The Director of Finance shall notify the Joint Legislative
Budget Committee in writing within seven days of entering into a
contract with an individual or firm pursuant to paragraph (2). 
   SEC. 28.    Section 69521.11 of the  
Education Code   is amended to read:
   69521.11.  (a) The Director of Finance shall notify the Joint
Legislative Budget Committee in writing upon his or her determination
that neither the sale nor any other transaction authorized by this
article is anticipated to achieve the purposes of this article.
                                                     (b) The Director
of Finance shall cease those activities he or she is authorized or
directed to undertake pursuant to this article and Sections 69522,
69526, and 69766 upon the earlier of:
   (1) The 30th day following written notice by the director to the
Chairperson of the Joint Legislative Budget Committee pursuant to
subdivision (a)  of this section  .
   (2) January 10,  2009   2011 .
   SEC. 29.    Section 69522 of the   Education
Code   is amended to read: 
   69522.  (a) (1) The commission may establish an auxiliary
organization for the purpose of providing operational and
administrative services for the  commission's 
participation  by the commission  in the Federal Family
Education Loan Program, or for other activities approved by the
commission and determined by the commission to be all of the
following:
   (A) Related to student financial aid.
   (B) Consistent with the general mission of the commission.
   (C) Consistent with the purposes of the federal Higher Education
Act of 1965 (Public Law 89-329) and amendments  thereto
  to that act  .
   (2) The activities approved by the commission under this
subdivision shall not include either of the following:
   (A) The issuance of bonds.
   (B) Loan origination or loan capitalization activities. This
paragraph shall not preclude the commission or the auxiliary
organization from undertaking  other   either of
the following: 
    (i)     Other  permitted activities
that are related to student financial aid in partnership with
institutions that conduct loan origination or loan capitalization
activities. 
   (ii) Loan origination or capitalization activities authorized
pursuant to an agreement with the United States Secretary of
Education for the lender-of-last-resort program. 
   (b) The auxiliary organization shall be established and maintained
as a nonprofit public benefit corporation subject to the Nonprofit
Public Benefit Corporation Law in Part 2 (commencing with Section
5110) of Division 2 of Title 1 of the Corporations Code, except that,
if there is a conflict between this article and the Nonprofit Public
Benefit Corporation Law, this article shall prevail.
   (c) (1) The commission shall maintain its responsibility for
financial aid program administration, policy leadership program
evaluation, and information development and coordination. The
auxiliary organization shall provide operational and support services
essential to the administration of the Federal Family Education Loan
Program and other permitted activities that are related to student
financial aid, if those services are determined by the commission to
be consistent with the overall mission of the commission.
   (2) On or after the operative date of Article 2.4 (commencing with
Section 69521), the commission shall not authorize the auxiliary
organization to perform any new or additional services except those
deemed by the Director of Finance to be necessary or convenient
either for the operation of the state student loan guarantee program,
as defined in Section 69521.2, or to accomplish the goal of
maximizing the value of the state student loan guarantee program
assets and liabilities pursuant to Article 2.4 (commencing with
Section 69521).
   (3) The implementation and effectuation of the auxiliary
organization shall be carried out so as to enhance the administration
and delivery of commission programs and services. The commission
shall conduct regular performance evaluations of the operation of
auxiliary organizations in furtherance of its fiscal and fiduciary
responsibilities for approved programs.
   (d) (1) (A) The operations of the auxiliary organization shall be
conducted in conformity with an operating agreement approved annually
by the commission. On and after January 1, 2002, the commission may
approve an operating agreement for a period not to exceed five years.
Prior to approval, the commission shall provide a copy of the
proposed operating agreement to the Department of Finance and the
Joint Legislative Budget Committee for their review and comment. The
operations of the auxiliary organization shall be limited to services
prescribed in that agreement.
   (B) On or after the operative date of Article 2.4 (commencing with
Section 69521), the commission shall not approve any operating
agreement that permits the auxiliary organization to perform any new
or additional services, except those deemed by the Director of
Finance to be necessary or convenient either for the operation of the
state student loan guarantee program, as defined in Section 69521.2,
or to accomplish the goal of maximizing the value of the state
student loan guarantee program assets and liabilities pursuant to
Article 2.4 (commencing with Section 69521).
   (2) Prior to approval of any amendment to an existing operating
agreement or any new operating agreement with an auxiliary
organization or subsidiary auxiliary organization for the purpose of
delineating new services or activities authorized pursuant to
subdivision (a), the commission shall provide the Director of Finance
and the Joint Legislative Budget Committee with at least 45 days
advance notice in writing that includes a description of the proposed
operating agreement. If the Director of Finance or the Joint
Legislative Budget Committee notifies the commission regarding issues
of concern with the proposed operating agreement, the commission
shall convene a meeting of appropriate representatives from the
commission, the Department of Finance, and the Legislature to resolve
those issues.
   (e) The commission shall oversee the development and operations of
the auxiliary organization in a manner that ensures broad public
input and consultation with representatives of the financial aid
community, colleges and universities, and state agencies.
   SEC. 30.    Section 69561 of the   Education
Code   is amended to read: 
   69561.  (a) The Student Opportunity and Access Program is
administered by the Student Aid Commission.
   (b) The Student Aid Commission may apportion funds on a progress
payment schedule for the support of projects designed to increase the
accessibility of postsecondary educational opportunities for any of
the following elementary and secondary school  students
  pupils  :
   (1)  Students   Pupils  who are from
low-income families.
   (2)  Students   Pupils  who would be the
first in their families to attend college.
   (3)  Students   Pupils  who are from
schools or geographic regions with documented low-eligibility or
college participation rates.
   (c) These projects shall primarily do all of the following:
   (1) Increase the availability of information for these 
students   pupils  on the existence of
postsecondary schooling and work opportunities.
   (2) Raise the achievement levels of these  students
  pupils  so as to increase the number of high
school graduates eligible to pursue postsecondary learning
opportunities.
   (d) Projects may assist community college students in transferring
to four-year institutions, to the extent that project resources are
available.
   (e) Projects may provide assistance to low-income fifth and sixth
grade  students   pupils  and their parents
in order to implement outreach efforts designed to use the future
availability of financial assistance as a means of motivating
 students   pupils  to stay in school and
complete college preparatory courses. 
   (f)  
   (f) Projects may provide assistance to low-income middle and high
school pupils and their parents in order to implement outreach
efforts designed to use the future availability of financial
assistance as a means of motivating pupils to stay in school by
promoting career technical education public awareness. Projects shall
promote the value of career technical education, available career
programs in public schools and postsecondary segments with sequenced
courses beginning in high school and continuing into postsecondary
education, and the resulting career opportunities. 
    (g)  Each project shall be proposed and operated through
a consortium that involves at least one secondary school district
office, at least one four-year college or university, at least one
community college, and at least one of the following agencies:
   (1) A nonprofit educational, counseling, or community agency.
   (2) A private vocational or technical school accredited by a
national, state, or regional accrediting association recognized by
the United States Department of Education. 
   (g) 
    (h)  The commission, in awarding initial project grants,
shall give priority to proposals developed by more than three
eligible agencies. Projects shall be located throughout the state in
order to provide access to program services in rural, urban, and
suburban areas. 
   (h) 
    (i)  The governing board of each project, comprising at
least one representative from each entity in the consortium, shall
establish management policy, provide direction to the project
director, set priorities for budgetary decisions that reflect the
specific needs of the project, and assume responsibility for
maintaining the required level of matching funds, including
solicitations from the private sector and corporate sources. 

   (i) 
    (j)  Prior to receiving a project grant, each consortium
shall conduct a planning process and submit a comprehensive project
proposal to include, but not be limited to, the following
information:
   (1) The agencies participating in the project.
   (2) The  students   pupils  to be served
by the project.
   (3) The ways in which the project will reduce duplication and
related costs.
   (4) The methods for assessing the project's impact. 
   (j) 
    (k)  Each project shall include the direct involvement
of secondary school staff in the daily operations of the project,
with preference in funding to those projects that effectively
integrate the objectives of the Student Opportunity and Access
Program with those of the school district in providing services that
are essential to preparing  students   pupils
 for postsecondary education. 
   (k) 
    (l)  Each project shall maintain within the project
headquarters a comprehensive  student-specific  
pupil-specific  information system on  students
  pupils  receiving services through the program in
grades 11 and 12 at secondary schools within the participating
districts. This information shall be maintained in a manner
consistent with the law relating to pupil records. 
   () 
    (m)    At least 30 percent or the equivalent of
each project grant shall be allocated for stipends to peer advisers
and tutors who meet all of the following criteria:
   (1) Work with secondary school  students  
pupils  .
   (2) Are currently enrolled in a college or other postsecondary
school as an undergraduate or graduate student.
   (3) Have demonstrated financial need for the stipend. 
   (m) 
    (n)  Each project should work cooperatively with other
projects in the program and with the commission to establish viable
student services and sound administrative procedures and to ensure
coordination of the activities of the project with existing
educational opportunity programs. The Student Aid Commission may
develop additional regulations regarding the awarding of project
grants and criteria for evaluating the effectiveness of the
individual projects.
   SEC. 31.    Section 76300 of the   Education
Code   is amended to read: 
   76300.  (a) The governing board of each community college district
shall charge each student a fee pursuant to this section.
   (b) (1) The fee prescribed by this section shall be twenty dollars
($20) per unit per semester, effective with the spring term of the
2006-07 academic year.
   (2) The board of governors shall proportionately adjust the amount
of the fee for term lengths based upon a quarter system, and also
shall proportionately adjust the amount of the fee for summer
sessions, intersessions, and other short-term courses. In making
these adjustments, the board of governors may round the per unit fee
and the per term or per session fee to the nearest dollar.
   (c) For the purposes of computing apportionments to community
college districts pursuant to Section 84750, the board of governors
shall subtract, from the total revenue owed to each district, 98
percent of the revenues received by districts from charging a fee
pursuant to this section.
   (d) The board of governors shall reduce apportionments by up to 10
percent to any district that does not collect the fees prescribed by
this section.
   (e) The fee requirement does not apply to any of the following:
   (1) Students enrolled in the noncredit courses designated by
Section 84757.
   (2) California State University or University of California
students enrolled in remedial classes provided by a community college
district on a campus of the University of California or a campus of
the California State University, for whom the district claims an
attendance apportionment pursuant to an agreement between the
district and the California State University or the University of
California.
   (3) Students enrolled in credit contract education courses
pursuant to Section 78021, if the entire cost of the course,
including administrative costs, is paid by the public or private
agency, corporation, or association with which the district is
contracting and if these students are not included in the calculation
of the full-time equivalent students (FTES) of that district.
   (f) The governing board of a community college district may exempt
special part-time students admitted pursuant to Section 76001 from
the fee requirement.
   (g) (1) The fee requirements of this section shall be waived for
any student who, at the time of enrollment, is a recipient of
benefits under the Temporary Assistance to Needy Families program,
the Supplemental Security Income/State Supplementary Program, or a
general assistance program or has demonstrated financial need in
accordance with the methodology set forth in federal law or
regulation for determining the expected family contribution of
students seeking financial aid.
   (2) The governing board of a community college district also shall
waive the fee requirements of this section for any student who
demonstrates eligibility according to income standards established by
regulations of the board of governors.
   (3) Paragraphs (1) and (2) may be applied to a student enrolled in
the 2005-06 academic year if the student is exempted from
nonresident tuition under paragraph (3) of subdivision (a) of Section
76140.
   (h) The fee requirements of this section shall be waived for any
student who, at the time of enrollment, is a dependent, or surviving
spouse who has not remarried, of any member of the California
National Guard who, in the line of duty and while in the active
service of the state, was killed, died of a disability resulting from
an event that occurred while in the active service of the state, or
is permanently disabled as a result of an event that occurred while
in the active service of the state. "Active service of the state,"
for the purposes of this subdivision, refers to a member of the
California National Guard activated pursuant to Section 146 of the
Military and Veterans Code.
   (i) The fee requirements of this section shall be waived for any
student who is the surviving spouse or the child, natural or adopted,
of a deceased person who met all of the requirements of Section
68120.
   (j) The fee requirements of this section shall be waived for any
student in an undergraduate program, including a student who has
previously graduated from another undergraduate or graduate program,
who is the dependent of any individual killed in the September 11,
2001, terrorist attacks on the World Trade Center and the Pentagon or
the crash of United Airlines Flight 93 in southwestern Pennsylvania,
if that dependent meets the financial need requirements set forth in
Section 69432.7 for the Cal Grant A Program and either of the
following applies:
   (1) The dependent was a resident of California on September 11,
2001.
   (2) The individual killed in the attacks was a resident of
California on September 11, 2001.
   (k) A determination of whether a person is a resident of
California on September 11, 2001, for purposes of subdivision (j)
shall be based on the criteria set forth in Chapter 1 (commencing
with Section 68000) of Part 41 for determining nonresident and
resident tuition.
   () (1) "Dependent," for purposes of subdivision (j), is a person
who, because of his or her relationship to an individual killed as a
result of injuries sustained during the terrorist attacks of
September 11, 2001, qualifies for compensation under the federal
September 11th Victim Compensation Fund of 2001 (Title IV (commencing
with Section 401) of Public Law 107-42).
   (2) A dependent who is the surviving spouse of an individual
killed in the terrorist attacks of September 11, 2001, is entitled to
the waivers provided in this section until January 1, 2013.
   (3) A dependent who is the surviving child, natural or adopted, of
an individual killed in the terrorist attacks of September 11, 2001,
is entitled to the waivers under subdivision (j) until that person
attains the age of 30 years.
   (4) A dependent of an individual killed in the terrorist attacks
of September 11, 2001, who is determined to be eligible by the
California Victim Compensation and Government Claims Board, is also
entitled to the waivers provided in this section until January 1,
2013.
   (m) (1) It is the intent of the Legislature that sufficient funds
be provided to support the provision of a fee waiver for every
student who demonstrates eligibility pursuant to subdivisions (g) to
(j), inclusive.
   (2) From funds provided in the annual Budget Act, the board of
governors shall allocate to community college districts, pursuant to
this subdivision, an amount equal to 2 percent of the fees waived
pursuant to subdivisions (g) to (j), inclusive. From funds provided
in the annual Budget Act, the board of governors shall allocate to
community college districts, pursuant to this subdivision, an amount
equal to ninety-one cents ($0.91) per credit unit waived pursuant to
subdivisions (g) to (j), inclusive  , for   . It
is the intent of the Legislature that funds provided pursuant to
this subdivision be used to support the  determination of
financial need and delivery of student financial aid services, on the
basis of the number of students for whom fees are waived.  It
also is the intent of the Legislature that the funds provided
pursuant to this subdivision directly offset mandated costs claimed
by community college districts pursuant to Commission on State
Mandates consolidated Test Claims 99-TC-13 (Enrollment Fee
Collection) and 00-TC-15 (Enrollment Fee Waivers).  Funds
allocated to a community college district for determination of
financial need and delivery of student financial aid services shall
supplement, and shall not supplant, the level of funds allocated for
the administration of student financial aid programs during the
1992-93 fiscal year.
   (n) The board of governors shall adopt regulations implementing
this section.
   SEC. 32.    Notwithstanding any other law, the sum of
twelve million five hundred thousand dollars ($12,500,000) is hereby
appropriated from the Public Interest Research, Development, and
Demonstration Fund to the Chancellor of the California Community
Colleges.  
   (a) Of the amount appropriated in this section, the Chancellor of
the California Community Colleges shall transfer twelve million
dollars ($12,000,000) to the State Department of Education for
expenditure in one-time funds for local grants to be allocated
pursuant to Article 5 (commencing with Section 54690) of Chapter 9 of
Part 29 of Division 4 of Title 2 of the Education Code over three
years as specified in the Budget Act of 2008. In addition to the
statutory program requirements, grantees shall create partnership
academies that focus on clean technology and energy businesses and
provide skilled workforces for the products and services for energy
or water conservation, or both, renewable energy, pollution
reduction, or other technologies that improve the environment in
furtherance of state environmental laws. Priority for grants pursuant
to this subdivision shall be assigned to school districts that do
not currently participate in the partnership academies program
pursuant to Article 5 (commencing with Section 54690) of Chapter 9 of
Part 29 of Division 4 of Title 2 of the Education Code. Existing
grantees may apply subject to the availability of funds.  
   (b) Of the amount appropriated in this section, the Chancellor of
the California Community Colleges shall transfer five hundred
thousand dollars ($500,000) to the State Department of Education to
pay for the expenses of administering the local grants pursuant to
this section. Funding for purposes of this section shall be provided
pursuant to an interagency agreement between the Chancellor of the
California Community Colleges and the State Department of Education.

   SEC. 33.    (a) The sum of thirty nine million seven
hundred eighty thousand dollars ($39,780,000) is hereby appropriated
from the General Fund to the Board of Governors of the California
Community Colleges, in augmentation of Schedule (1) of Item
6870-101-0001 of Section 2.00 of the Budget Act of 2008, for the
purpose of providing a 0.68 percent cost-of-living adjustment to
apportionments to community college districts, for expenditure during
the 2008-09 fiscal year.  
   (b) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, the
appropriation made by subdivision (a) shall be deemed to be "General
Fund revenues appropriated for community college districts," as
defined in subdivision (d) of Section 41202 of the Education Code,
for the 2008-09 fiscal year, and included within the "total
allocations to school districts and community college districts from
General Fund proceeds of taxes appropriated pursuant to Article XIII
B," as defined in subdivision (e) of Section 41202 of the Education
Code, for the 2008-09 fiscal year. 
   SEC. 34.    (a) The sum of three hundred eighty-eight
million two hundred eighty-three thousand dollars ($388,283,000) is
hereby appropriated from the General Fund to the State Department of
Education. This appropriation reflects the portion of the June 2009
principal apportionment that is to be deferred until July 2009 and
attributed to the 2009-10 fiscal year. Notwithstanding any other law,
the department shall encumber the funds appropriated in this section
by July 31, 2009. It is the intent of the Legislature that, by
extending the encumbrance authority for the funds appropriated in
this section to July 31, 2009, the funds will be treated in a manner
consistent with Section 1.80 of the Budget Act of 2008. The
appropriation is made in accordance with the following schedule:
 
   (1) Six million two hundred twenty-seven thousand dollars
($6,227,000) for apprenticeship programs to be expended consistent
with the requirements specified in Item 6110-103-0001 of Section 2.00
of the Budget Act of 2008.  
   (2) Ninety million one hundred seventeen thousand dollars
($90,117,000) for supplemental instruction to be expended consistent
with the requirements specified in Item 6110-104-0001 of Section 2.00
of the Budget Act of 2008. Of the amount appropriated by this
paragraph, fifty-one million sixty-one thousand dollars ($51,061,000)
shall be expended consistent with Schedule (1) of Item 6110-104-0001
of Section 2.00 of the Budget Act of 2008, twelve million three
hundred thirty thousand dollars ($12,330,000) shall be expended
consistent with Schedule (2) of that item, four million six hundred
ninety thousand dollars ($4,690,000) shall be expended consistent
with Schedule (3) of that item, and twenty-two million thirty-six
thousand dollars ($22,036,000) shall be expended consistent with
Schedule (4) of that item.  
   (3) Thirty-nine million six hundred thirty thousand dollars
($39,630,000) for regional occupational centers and programs to be
expended consistent with the requirements specified in Schedule (1)
of Item 6110-105-0001 of Section 2.00 of the Budget Act of 2008.
 
   (4) Fifty-two million five hundred eighty-three thousand dollars
($52,583,000) for home-to-school transportation to be expended
consistent with the requirements specified in Schedule (1) of Item
6110-111-0001 of Section 2.00 of the Budget Act of 2008.  
   (5) Four million two hundred ninety-four thousand dollars
($4,294,000) for the Gifted and Talented Pupil Program to be expended
consistent with the requirements specified in Item 6110-124-0001 of
Section 2.00 of the Budget Act of 2008.  
   (6) Forty-five million eight hundred ninety-six thousand dollars
($45,896,000) for adult education to be expended consistent with the
requirements specified in Schedule (1) of Item 6110-156-0001 of
Section 2.00 of the Budget Act of 2008.  
   (7) Four million seven hundred fifty-one thousand dollars
($4,751,000) for community day schools to be expended consistent with
the requirements specified in Item 6110-190-0001 of Section 2.00 of
the Budget Act of 2008.  
   (8) Five million nine hundred forty-seven thousand dollars
($5,947,000) for categorical block grants for charter schools to be
expended consistent with the requirements specified in Item
6110-211-0001 of Section 2.00 of the Budget Act of 2008.  
   (9) Thirty-eight million seven hundred twenty thousand dollars
($38,720,000) for the School Safety Block Grant to be expended
                                         consistent with the
requirements specified in Schedule (1) of Item 6110-228-0001 of
Section 2.00 of the Budget Act of 2008.  
   (10) One hundred million one hundred eighteen thousand dollars
($100,118,000) for the Targeted Instructional Improvement Grant
Program to be expended consistent with the requirements specified in
Item 6110-246-0001 of Section 2.00 of the Budget Act of 2008. 

   (b) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, the
appropriations made by subdivision (a) shall be deemed to be "General
Fund revenues appropriated for school districts," as defined in
subdivision (c) of Section 41202 of the Education Code, for the
2009-10 fiscal year, and included within the "total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated pursuant to Article XIII B," as
defined in subdivision (e) of Section 41202 of the Education Code,
for the 2009-10 fiscal year. 
   SEC. 35.    (a) The sum of two hundred million
dollars ($200,000,000) is hereby appropriated from the General Fund
to the Board of Governors of the California Community Colleges for
apportionments to community college districts, for expenditure during
the 2009-10 fiscal year, to be expended in accordance with Schedule
(1) of Item 6870-101-0001 of Section 2.00 of the Budget Act of 2008.
 
   (b) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, the
appropriation made by subdivision (a) shall be deemed to be "General
Fund revenues appropriated for community college districts," as
defined in subdivision (d) of Section 41202 of the Education Code,
for the 2009-10 fiscal year, and included within the "total
allocations to school districts and community college districts from
General Fund proceeds of taxes appropriated pursuant to Article XIII
B," as defined in subdivision (e) of Section 41202 of the Education
Code, for the 2009-10 fiscal year. 
   SEC. 36.    Notwithstanding paragraphs (1) and (2) of
subdivision (d) of Section 41207 of the Education Code, there shall
be no annual appropriation in the 2008-09 fiscal year from the
General Fund to the Controller for allocation by the Controller to
school districts and community colleges for the purposes described in
Section 41207. 
   SEC. 37.    (a) Notwithstanding Sections 42238.1 and
42238.15 of the Education Code or any other provision of law, the
cost-of-living adjustment for Items 6110-104-0001, 6110-105-0001,
6110-111-0001, 6110-156-0001, 6110-158-0001, 6110-161-0001,
6110-189-0001, 6110-190-0001, 6110-196-0001, 6110-232-0001,
6110-234-0001, 6110-244-0001, and 6110-246-0001 of Section 2.00 of
the Budget Act of 2007 (Chapters 171 and 172 of the Statutes of 2007)
and those items identified in subdivision (b) of Section 12.40 of
the Budget Act of 2008 is zero percent for the 2008-09 fiscal year.
All funds appropriated in the Budget Act of 2008 in the items
identified in this section are in lieu of the amounts that would
otherwise be appropriated pursuant to any other provision of law.
 
   (b) Notwithstanding Section 42238.1 of the Education Code or any
other provision of law, for purposes of Section 48664 of the
Education Code the cost-of-living adjustment is zero percent for the
2008-09 fiscal year. 
   SEC. 38.    Notwithstanding any other provision of
law, the funds appropriated pursuant to Items 6110-103-0001,
6110-104-0001, 6110-105-0001, 6110-111-0001, 6110-124-0001,
6110-156-0001, 6110-158-0001, 6110-161-0001, 6110-190-0001,
6110-211-0001, and 6110-243-0001 of Section 2.00 of the Budget Act of
2008 shall be encumbered by July 31, 2009. This one-month extension
of encumbrance authority is provided due to the effect of the
deferral of the June 2009 principal apportionment on the budget items
specified in this section. It is the intent of the Legislature that,
by extending the encumbrance authority for the funds identified in
this section to July 31, 2009, the funds will be treated in a manner
consistent with Section 1.80 of the Budget Act of 2008. 
   SEC. 39.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to make the necessary statutory changes to implement the
Budget Act of 2008 at the earliest possible time, it is necessary
that this act take effect immediately.  
  SECTION 1.    Section 7362.01 is added to the
Business and Professions Code, to read:
   7362.01.  (a) Notwithstanding subdivision (a) of Section 7362, all
schools of barbering, cosmetology, or electrology that have a valid
approval to operate, including, but not necessarily limited to, a
license to operate, and all instructors holding a valid certificate
of authorization for service or meeting that certification
requirement as previously set, from the former Bureau for
Postsecondary and Vocational Education as of June 30, 2007, or
approved by the board as of June 30, 2008, shall retain those
approvals, licenses, or certificates of authorization for purposes of
the interpretation of other provisions of applicable law that refer
or relate to the issuance of a license or registration and meeting
qualifications for licensing examinations. Those approvals shall
remain effective, unless superseded by a later enacted statute, or
unless the board decides to revoke approval based on noncompliance
with the criteria established for new school applications pursuant to
paragraph (2) of subdivision (c).
   (b) Notwithstanding subdivision (a) of Section 7362, any approvals
made by the board on or before December 31, 2008, of a branch or
satellite campus, change of ownership, or the sale or purchase of an
approved school of barbering, cosmetology, or electrology shall be
deemed to be valid and effective on January 1, 2009, provided the
school seeking the approval was lawfully operating prior to July 1,
2007.
   (c) (1) Notwithstanding subdivision (a) of Section 7362, the board
shall be authorized to review the application of a person desiring
to establish a school of barbering, cosmetology, or electrology and
issue approval to operate if the applicant is deemed able to comply
with all other applicable laws governing school operations. This
authority to review and approve shall remain effective, unless
superseded by a later enacted statute that vests this authority in
another governing agency, board, or bureau, in which case the school
shall be required to seek and obtain approval of that successor
agency, board, or bureau within six months of the date that the
successor agency, board, or bureau commences operations.
   (2) The board shall consider all relevant information to ensure
the ability and willingness of the applicant to comply with the
applicable provisions of this chapter relative to schools and review
of any problematic practices, especially those dealing with students,
including, but not limited to, all of the following:
   (A) Misleading or erroneous advertising, including information
provided to prospective students.
   (B) Unfair or deceptive practices involving financial charges and
contracts with prospective or enrolled students, including
cancellation and refund policies.
   (C) Insufficient full-time enrollees, facility or floor space, or
equipment, or lack of compliance with local building codes or
permits.
   (D) Insufficient number of competent instructors, as determined by
industry experience or academic training or credentialing.
   (3) The board shall not approve any application pursuant to this
subdivision until the board promulgates regulations in that regard
and implements those regulations with necessary and appropriate staff
hired to provide an adequate review of the requirements of this
subdivision.
   (4) The board may consider the certification and approval of
national accrediting agencies recognized by the United States
Department of Education, such as the National Accrediting Commission
of Cosmetology Arts and Sciences, when determining the fitness of the
applicant to meet all relevant and necessary approval criteria.
   (5) The board shall charge the applicant a fee commensurate with
costs associated with the review of the application. The fee shall be
payable whether or not the application is approved. The board may
also charge an annual fee to enforce ongoing compliance of all
schools approved under this subdivision.
   (d) This section shall remain in effect only until January 1,
2010, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2010, deletes or extends
that date.  
  SEC. 2.    (a) If Senate Bill 823 of the 2007-08
Regular Session is enacted prior to this bill, the provisions of this
bill shall not become operative.
   (b) If Senate Bill 823 of the 2007-08 Regular Session is enacted
after this bill, the provisions of this bill shall become inoperative
on the date of enactment of SB 823.  
  SEC. 3.    This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
   In order to provide for the existence and regulation of approved
schools for barbering, cosmetology, or electrology, it is necessary
that this act take effect immediately.