BILL ANALYSIS
SB 81
Page 1
SENATE THIRD READING
SB 81 (Alquist)
As Amended September 4, 2009
2/3 vote. Urgency
SENATE VOTE : Vote not relevant
SUMMARY : Creates an urgency statute that:
1)Requires, for the 2009-10 through the 2012-13 fiscal year,
that a regional occupational center or program (ROC/P),
established and maintained by school districts acting as a
joint powers agency (JPA), receive its operating funds
directly from the county office of education of the county in
which it is located in a manner that is consistent with the
apportionments for those school districts that comprise the
JPA and that are provided to the county office of education
pursuant to the annual Budget Act.
2)Authorizes a joint powers agency receiving an apportionment
for a school district pursuant to 1) above to disburse those
funds, pursuant to its joint powers agreement, to the school
district to which that apportionment was made.
3)Specifies that nothing in these provisions prevents any school
district or county office of education from using ROC/P
funding for any educational purpose.
EXISTING LAW :
1)Authorizes the establishment of ROC/Ps by high school
districts, district consortia (operating as a JPA), or county
offices of education.
2)Establishes a funding formula for ROC/Ps based on per pupil
revenue limits for each ROC/P, current year average daily
attendance (ADA) or a cap on funded ADA as established
historically and in the prior year, any annual cost of living
adjustment (COLA) made to the per pupil revenue limit amounts
in the annual Budget Act, and any adjustments to the funded
cap on ADA made for growth.
3)Provides for temporary flexibility to spend the funds
appropriated for nearly all categorical programs, including
funding for ROC/Ps, in order to relieve local budget pressure
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created by the current economic downturn.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis of a substantially similar bill, this bill
creates potential General Fund Proposition 98 cost pressure,
likely between $200,000 and $280,000, if a school district that
terminates its participation in a ROC/P JPA does not receive
their funding from the JPA. There are 26 JPA operated ROC/Ps.
COMMENTS : This bill originally served as a budget bill intended
to enact statutory changes relating to the Budget Act of 2009;
as such, this bill has not been heard in any policy of fiscal
committee. The bill in its current version is substantially
similar to SB 307 (Alquist); that bill was heard by the Assembly
Education Committee and was held under submission in the
Assembly Appropriations Committee.
ROC/Ps offer a vocational educational program for high school
students and adults, and may be operated by a district, a
consortium of districts under a joint powers agreement, or by a
county office of education. Nearly every county office of
education in California operates a single, countywide ROC/P.
California's 74 ROC/Ps have existed as part of California's
educational system for over 35 years. According to the
California Department of Education (CDE), nearly 470,000
students age 16 or older enroll in ROC/Ps each year;
approximately 30 percent of those students are adult learners.
26 of the current ROC/Ps operate as a JPA. These JPAs operate
under specific requirements, defined in Government Code, dealing
with governance, fiscal and programmatic accountability, and the
nature of the agreement between the member districts. The JPA
administers the programs, classes and day-to-day operations of
the ROC/P; ROC/P funding apportioned to each of the member
districts provides the fiscal support for the JPA.
ROC/P funding is provided to districts as part of the Principal
Apportionment, which also includes regular revenue limit
funding, and is included in a block of funding (equal to the sum
of Principal Apportionment funding for all districts in a
county) that the CDE provides to the county office of education
(COE); COEs have historically served as clearinghouses that
distribute this funding to each of the districts in the county
according to a schedule that is also provided by the CDE. Up to
and including the 2008-09 fiscal year, funding for ROC/Ps
operating as a JPA was treated in this manner with the funds
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moving from the CDE to the COE, then being transferred to each
JPA member district, and finally being submitted by the member
districts to the JPA. This process was to be changed commencing
with the 2009-10 fiscal year as a result of SB 1197 (Alquist),
Chapter 519, Statutes of 2008; SB 1197 requires that a ROC/P
operated as a JPA receive its funding directly from the COE,
rather than the funds being transferred from the COE to the
member districts prior to the JPA receiving those funds from
each of the school districts. This new provision was enacted
January 1, 2009, and was to be operative for the 2009-10 fiscal
year.
In February 2009, SB 4 X3 (Ducheny), Chapter 12, Statutes of
2009 Third Extraordinary Session [as amended in July by AB 2 X4
(Evans), Chapter 2, Statutes of 2009 Fourth Extraordinary
Session], implemented categorical flexibility for the 2008-09
through 2012-13 fiscal year; this flexibility allows recipients
to use restricted educational funding from 43 categorical
programs, including ROC/P funding, for any discretionary
educational purpose. This flexibility was achieved by deeming
those funding recipients to be in compliance with the program
and funding requirements contained in statutory, regulatory, and
provisional language associated with those programs. Funding
for these flexible programs is apportioned from the amounts
provided in the Budget Act in an amount based on the same
relative proportion that the recipient received in the 2008-09
fiscal year for those programs. As a condition of receiving
this flexibility, district governing boards and county boards of
education are required to hold public hearings on the proposed
use of the flexible funds, and are required to fully account for
all expenditures.
Implementation of the flexibility provision (i.e., placing the
flexibility provisions of AB 2 X4 ahead of the intent of SB
1197) in the case of JPA-operated ROC/P funding could create
fiscal problems for the JPA, in the same way that other
educational programs may be affected by flexibility, if a JPA
member school district chooses to make use of its flexibility
authority and move ROC/P funds to another use. On the other
hand, failure to allow that district to implement flexibility
(by placing the intent of SB 1197 ahead of the flexibility
provisions), may jeopardize a JPA member district's fiscal
status. The fundamental question raised by this bill is whether
the Legislature, in SB 4 X3, intended that ROC/P funds,
including those apportioned for JPA member school districts, be
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subject to flexibility in that those previously restricted
monies could be used by the recipient school district or COE for
any discretionary purpose?
This bill proposes to resolve this question so that under any
circumstances during the 2009-10 through 2012-13 fiscal years,
COEs transfer the apportioned funds to JPAs in order to continue
the operation of the JPA ROC/Ps. In other words this bill
places the provisions of SB 1197 in a dominant position over the
flexibility provisions of SB 4 X3; effectively this bill
provides a protected status for JPA operated ROC/Ps in that
funding apportioned to JPA member school districts will be spent
on the ROC/P activities with no opportunity for the member
school district to put those funds to another discretionary use.
Supporters of this bill state that, "SB 307 will correct an
unintended consequence of the 2009-10 budget trailer bill [SB 4
X3]," and describe this bill as "a cleanup bill" that "has no
fiscal impact and remains consistent with [SB 4 X3], by ensuring
local control and flexibility."
A question might also be asked as to what entity has the
authority to make decisions over the use of the funds
apportioned to JPA member school districts for ROC/P? Since the
flexibility provision of SB 4 X3, as amended by AB 2 X4, allows
recipients of the funding to use the funds with discretion, and
since funding for JPA ROC/Ps is apportioned to the individual
districts that are members of that JPA, the strongest case might
be made that each member district has the authority to flexibly
use these funds through the 2012-13 fiscal year; this appears
also to be consistent with Legislative intent that all ROC/P
funding be eligible for flexible use. At the same time, the
funds are provided to the COE in its role as a funding
clearinghouse; thus if a COE interprets the SB 1197 requirement
to be dominant over the flexibility provisions, then that COE
could move to transfer the member district's ROC/P
apportionments directly to the JPA. It is clear that such a
COE action, combined with the fact that the funding would then
never be in the possession of the school district to which it
was apportioned, would act to eliminate a district's opportunity
to implement the flexibility provision. As the Assembly
Appropriations Committee noted in its analysis, "this bill is
contrary to these [flexibility] provisions because school
districts participating in the ROC/P JPA will not have direct
access to ROC/P funding in order to use in a flexibility
manner."
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Under this scenario, the only recourse that a JPA member
district would have if it desired to shift ROC/P funding to
another higher priority budget use would be to remove itself
from the JPA. Since SB 4 X3 requires the CDE to apportion "an
amount to recipients based on the same relative proportion that
the recipient received in the 2008-09 fiscal year for the"
program, funds for ROC/P would continue to be apportioned to the
school district even after that school district was no longer a
member of the JPA. Since the provisions of SB 1197 and the
proposal made in this bill only allow a COE to direct these
funds to the JPA for JPA member districts, the funds would go to
the district (albeit constrained by any contract or JPA
agreement signed by the district that speaks to the issue of
funding for former member districts continuing to be provided to
the JPA) and the district could use the funds flexibly.
Unfortunately, constraining districts to this one recourse also
creates a chilling effect on district participation in JPA
ROC/Ps, which may not be an optimal policy in the long run. The
situation thus created could also lead to litigation if a COE
were to transfer a former member district's ROC/P apportionment
to the JPA.
Analysis Prepared by : Gerald Shelton / ED. / (916) 319-2087
FN: 0003012