BILL ANALYSIS
SB 847
Page 1
Date of Hearing: August 25, 2010
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
SB 847 (Steinberg) - As Amended: August 20, 2010
SENATE VOTE : (vote not relevant)
SUBJECT : Education finance
SUMMARY : Creates an urgency statute that appropriates
$1,201,534,585 from the Federal Trust Fund to the California
Department of Education (CDE) for purposes of implementing the
federal Education Jobs and Medicaid Assistance Act of 2010
(Education Jobs Act), Public Law 111-226, requires that
$1,200,034,585 of those funds be allocated to local educational
agencies (LEAs) in accordance with federal law, and makes $1.5
million available to the CDE during the period from August 10,
2010 through December 30, 2012.
EXISTING LAW requires expenditure authority to be granted,
through an appropriation in the Budget Act, a continuous
statutory appropriation or through an appropriation in special
legislation, before a state agency or department is able to
expend or allocate funds to other entities, such as LEAs.
FISCAL EFFECT : This bill appropriates $1,201,534,585 in
federal funds available to the state under the recently enacted
Education Jobs Act.
COMMENTS : On August 10, President Obama signed HR 1586 into
law, enacting the Education Jobs Act which includes $16.1
billion in expanded Federal Medical Assistance Percentage (FMAP)
funding for the states and $10 billion in education funding
provided to the states to support an estimated 160,000 education
jobs nationwide. The Education Jobs Act requires that the
education funds provided to the states be spent by LEAs to
prevent teacher layoffs in the 2010-11 school year, that the
funding be allocated to LEAs based on a state's primary funding
formula as specified in the state's State Fiscal Stabilization
Fund (SFSF) application (in the case of California's application
this would mean that funds are allocated in a manner consistent
with the requirements of Proposition 98) or each districts'
relative share of federal Title I funds, that states show that
they have met maintainence of effort provisions, and that this
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funding not be used to supplant state education funding or
provide a funding reserve.
The $10 billion in education funding will be allocated to the
states proportional to state population; California will receive
an allocation of over $1.2 billion. The U.S. Department of
Education (USDOE) estimates that this funding will save
approximately 16,500 teacher jobs in California; an estimated
22,000 teachers received layoff notices in spring of this year.
According to United States Secretary of Education (USSE) Arne
Duncan, "With the support of the jobs bill, these educators will
be helping our children learn instead of looking for work. This
is the right thing to do for our children, for our teachers, and
for our economy."
In order to ensure that states receive funding as quickly as
possible, USDOE is streamlining the application process to allow
states to submit applications in an expedited manner. The
Governor submitted California's application for these funds on
August 13, 2010. In that application the Governor responded
that the state's primary funding formula as specified in the
state's State Fiscal Stabilization Fund (SFSF) application would
be used to allocate funds to LEAs, and provided a number of
assurances related to this program. Specifically, the Governor
assured USDOE that the state will:
1)Comply and use funds in a manner consistent with all
applicable statutes, regulations, and the state's approved
Education Jobs Act application.
2)Comply with the maintenance-of-effort (MOE) requirements and,
within 60 days of the date of the State's grant award, provide
USDOE the most current applicable MOE data available.
3)Use fiscal control and fund accounting procedures that ensure
proper disbursement of and accounting for funds.
4)Reserve not more than 2 percent of its allocation for the
administrative costs and use all remaining funds to make
awards to LEAs.
5)Make awards to LEAs on a timely basis so that funds are
available for their use during the 2010-2011 school year.
6)Not require an LEA, that has previously submitted the required
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local application under SFSF, to submit an application to
receive funding under the Education Jobs Act.
7)Not use these funds, directly or indirectly, to establish,
restore, or supplement a rainy-day fund; (b) supplant State
funds in a manner that has the effect of establishing,
restoring, or supplementing a rainy-day fund; (c) reduce or
retire debt obligations incurred by the State; or (d) supplant
State funds in a manner that has the effect of reducing or
retiring debt obligations incurred by the State.
8)Develop and implement a monitoring plan that will enable the
State to ensure that its LEAs comply with all applicable
programmatic and fiscal requirements.
9)Comply with the reporting requirements of the American
Recovery and Reinvestment Act of 2009 and other reporting
requirements established by the USSE.
10)Comply with all standard assurances and prohibitions,
including prohibitions against using federal funds for
lobbying purposes.
According to USDOE, it will award funding to states within two
weeks of a state's submission of an approvable application. The
purpose of this bill is to appropriate these expected federal
funds and to provide the appropriate state entity with the
expenditure authority necessary for it to allocate those funds,
when received by the state, to LEAs at the earliest time
possible.
Committee amendments : Committee staff recommends, and the
author has accepted, amendments to conform the appropriation
provisions to federal law, provide resources for administrative
activities related to this federal funding, provide a mechanism
for the allocation of these new federal funds to LEAs, ensure
that the funds are allocated to LEAs as quickly as possible, and
ensure that these funds are used in a manner consistent with
federal law, regulations, and guidance. These amendments
propose to:
1)Appropriate $1,201,534,585 from the Federal Trust Fund to the
Office of Planning and Research (OPR), rather than the CDE, in
order to conform to federal funding requirements under the
Education Jobs Act.
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2)Authorize $128,000 of those federal funds to be available to
OPR for the purpose of providing oversight of funds allocated
to LEAs under the Education Jobs Act.
3)Require that $1,201,406,585 of those federal funds be
transferred to the CDE for the purpose of implementing the
Education Jobs Act, and require those funds to be expended as
follows:
a) $1,199,906,585 to be allocated to LEAs on the basis of
an equal amount per unit of 2010-11 Second Principal
Apportionment average daily attendance (P-2 ADA). Also
requires a preliminary allocation equal to ninety percent
(90%) of the estimated final allocation, with that estimate
based on 2009-10 P-2 ADA, to be allocated no later than 14
days following the enactment of this bill or the
notification of an award for federal funding, whichever is
later. This amendment will ensure that funds are allocated
in an equitable manner and as quickly as possible.
b) $1,500,000 to be available to the CDE for the purposes
of distributing and administering the funds allocated to
LEAs.
4)Clarify that LEAs are required to use allocated Education Jobs
Act funds in a manner consistent with the requirements of the
Education Jobs Act and any related federal regulations or
guidance, and require the funds to be used only for
compensation, benefits and other expenses, such as support
services, necessary to retain existing employees, to recall or
rehire former employees, and to hire new employees, where
those employees provide school-level educational and related
services. These requirements are consistent with the
requirements of the Education Jobs Act.
5)Authorize, consistent with federal law, any local educational
agency that receives an allocation of Education Jobs Act funds
and has funds remaining after the 2010-2011 fiscal year, to
use those remaining funds through September 30, 2012 for the
purposes specified.
6)Make technical and conforming changes to the appropriation
language in the bill.
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REGISTERED SUPPORT / OPPOSITION :
Support
California Teachers Association
Opposition
None on file
Analysis Prepared by : Gerald Shelton / ED. / (916) 319-2087