BILL ANALYSIS
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THIRD READING
Bill No: AB 519
Author: Assembly Budget Committee
Amended: 9/15/08 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SUBJECT : Education: Budget Trailer Bill
SOURCE : Author
DIGEST : This bill makes a number of education-related
changes necessary to implement the 2008 Budget Act.
ANALYSIS :
This bill makes the following statutory changes:
1. Revenue Limit Deficit Factors . Calculates a deficit
factor for school districts and county offices of
education to reflect the reduction of statutory
cost-of-living adjustments (COLAs) in 2008-09, so that
in 2009-10 these factors are restored to revenue limit
calculations, as if the full statutory COLA had been
applied. These deficit factors reflect 0.68 percent
COLAs, which amount to $244 million, for K-12 revenue
limit apportionments in 2008-09. (Sections 1 & 4)
2. CDE Report on Federal Funds Availability . Requires the
California Department of Education (CDE) to annually
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submit two reports to the Legislature, Legislative
Analyst's Office and the Governor. Requires one report,
submitted by February 15 of each year, to provide a
three-year tracking of federal funds, as specified.
Requires a second report, submitted by November 1 of
each year that identifies available federal carryover
funds. (Section 2)
3. Proposition 98 Split . Suspends existing statute that
specifies the division of Proposition 98 funding among
K-12 local educational agencies (LEAs), community
colleges, and other state agencies, and reflects a
division of funding that conforms to that of the 2008-09
budget. (Section 3)
4. Federal School Improvement Funding Authorization .
Provides statutory authority to allocate $112.7 million
in federal funds by establishing a one year
non-renewable grant for approximately 150 K-12 local
education agencies facing corrective action under the
federal No Child Left Behind Act. Establishes a new
funding formula for LEAs based on the number of Title I
schools in corrective action under their jurisdiction.
(Sections 6-8)
5. Extension of the Special Disabilities Adjustment .
Continues authorization of the disability adjustment
calculation through 2008-09. This adjustment is
intended to compensate K-12 LEAs for higher special
education costs for some students with disabilities. The
budget provides approximately $81 million for this
purpose in 2008-09. (Section 9)
6. Elimination of Norm-Referenced Test . Repeals the Norm
Referenced Test (NRT), currently administered to
students in grades 3 and 7, as a component of the
Standardized Testing and Reporting (STAR) Program and
makes conforming changes. The budget act eliminates
remaining funds of $2.5 million for NRT in 2008-09.
(Sections 10-23)
7. EdFUND Sale . Extends the date by which the Department
of Finance is authorized to sell, or effectuate an
"alternative arrangement to the sale" of EdFUND, from
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January 2009 to January 2011 (Section 28). Requires the
Department of Finance to meet a series of reporting
requirements delineating progress towards the sale (or
alternative arrangement to the sale) of EdFUND.
(Sections 24-27)
8. Student Aid Commission - Lender of Last Resort .
Authorizes the California Student Aid Commission to act
as the "Lender of Last Resort", under agreement with the
US Secretary for Education, should students, via
colleges and universities, be unable to secure student
loans through the traditional federally-subsidized
student loan programs. (Section 29)
9. Career - Technical Education Outreach . Expands the
authority of the California Student Opportunity and
Access Program (Cal-SOAP) to provide public awareness
and outreach activities related to career-technical
education. (Section 30)
10.Community Colleges . Clarifies the uses of community
college financial aid funding to include financial aid
support services, in response to a recent Commission on
State Mandates decision. (Section 31)
11.^^^" Green" California Partnership Academies .
Appropriates $12.5 million from the Public Interest
Research, Development, and Demonstration Fund to expand
the number of high school Partnership Academies by 61.
New Partnership Academies funded with this appropriation
would (a) meet current statutory requirements as well as
(b) focus on clean technology, renewable energy,
pollution reduction, and other "green" environmental
technologies. (Section 32)
12.Appropriation of K-12 Payment Deferrals . Appropriates
$39.8 million in augmentation of community college
apportionments Budget Act Item to provide a 0.68 percent
cost-of-living-adjustment. (Section 33)
13.Expenditure Period for K-12 Payment Deferrals .
Continues to defer $388.3 million in various program
payments included in the second principal apportionment
by one month - from June 2009 to July 2009 - in order to
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shift payments from the 2008-09 to the 2009-10 fiscal
year. This practice continues budget savings - achieved
by shifting these payments to the next fiscal year -
that were implemented in recent years. (Section 34)
14.Appropriation of Community College Payment Deferrals .
Extends the authorized expenditure period for June
apportionment deferrals by one month - from June 30,
2009 to July 31, 2009. This action makes the
expenditure period for apportionment payment deferrals
consistent with the expenditure period for budget act
appropriations. (Section 38)
15.2008-09 Proposition 98 Settle-Up Payment . Continues to
defer $200 million of community college payments from
the 2008-09 to the 2009-10 fiscal year. (Section 35)
16. K-12 Cost-of-Living (COLA) Adjustments . Defers a
statutory appropriation of $150 million in 2008-09 for
purposes providing payment of prior year Proposition 98
"settle-up". (Section 36)
17. K-12 Cost-of-Living (COLA) Adjustments for Categorical
Programs . Declares that the budgeted COLA rate of zero
percent for various K-12 categorical programs in
2008-09 is in-lieu of the COLA that would be applied
pursuant to any other law. (Section 37)
18. Urgency Clause . Declares that this bill takes effect
immediately as an urgency statute. (Section 39)
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
DLW:cm 9/15/08 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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