BILL ANALYSIS �
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THIRD READING
Bill No: AB 202
Author: Brownley (D)
Amended: 8/15/11 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE : 8-0, 6/22/11
AYES: Lowenthal, Alquist, Blakeslee, Hancock, Liu, Price,
Simitian, Vargas
NO VOTE RECORDED: Runner, Huff, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 6-3, 8/25/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
ASSEMBLY FLOOR : 78-0, 5/19/11 (Consent) - See last page
for vote
SUBJECT : Local educational agencies: reimbursable state
mandates
SOURCE : Author
DIGEST : This bill makes various changes to the states
process for the determination and reimbursement of
educational mandates that streamline the reimbursement
process, and augments the reporting requirements placed on
the Legislative Analyst's Office with respect to mandates
filed by a local education agency.
ANALYSIS : The California Constitution requires the state
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to provide a subvention of funds to reimburse costs to
local governments, including local educational entities,
whenever the Legislature, executive order, or a state
agency through adoption of regulations mandates a new
program or higher level of service, with specified
exceptions.
Existing law specifies the process to determine whether or
not a reimbursable state mandate is created and establishes
a procedure for local governmental agencies, including
local education agencies (LEAs), to file claims for
reimbursement of these costs with the Commission on State
Mandates (CSM) that requires the CSM to hear and decide
upon each claim for reimbursement and then determine the
amount to be paid for reimbursement, adopt parameters and
guidelines to guide the payment of claims, and adopt a
reasonable reimbursement methodology (RRM). The CSM is
required to consult with the Department of Finance (DOF),
among other state officials, when adopting parameters and
guidelines for reimbursement.
In addition, existing law requires the CSM to establish
procedures for dealing with incorrect reduction claims.
The State Controller may reduce the amount of any
reimbursement claim that it determines to be excessive or
unreasonable. If the State Controller takes such an action
and the claimant disputes it, the claimant may file an
incorrect reduction claim with the CSM. An incorrect
reduction claim alleges that the Controller incorrectly
reduced the amount paid on a reimbursement claim for a
state-mandated program. The CSM hears and decides whether
the State's Controller reduction was correct.
This bill implements changes related to the state's process
for the determination and reimbursement of educational
mandates that streamline the reimbursement process, and
augments the reporting requirements placed on the
Legislative Analyst's Office (LAO) with respect to mandates
filed by a local education agency. More specifically, this
bill:
1. Defines LEA for the purposes of these provisions to mean
a school district or county office of education, but not
a community college district.
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2. Expresses legislative intent that statues creating a
reimbursable state mandate on LEAs be periodically
reviewed, and the Legislature consider recommendations
on whether these statutes be amended, repealed, or
remain unchanged.
3. Requires the State Controller, consistent with
legislative intent, to notify the appropriate fiscal and
education policy committees of the Legislature within 30
days of the date upon which the State Controller
determines total reimbursement claims filed in a fiscal
year, on any mandate where the LEA test claim exceeds
the adopted statewide estimate of costs for that mandate
by more than 25 percent.
4. Requires the CSM to notify the Legislature within 30
days of the date upon which a test claim is filed by an
LEA, where the LEA submits a written narrative that
identifies the effective date and register number of any
regulation alleged to contain a mandate.
5. Authorizes an LEA test claimant to designate another LEA
for the purposes of drafting and submitting the proposed
parameters and guidelines to the CSM.
6. Changes the process relating to development of an RRM,
as follows:
A. Provides for only one extension of 90 days, in
addition to the initial 180 days allowed for the
development of an RRM.
B. Eliminates the ability of an LEA test claimant or
DOF to unilaterally end the development of an RRM
once this process has begun, and instead authorizes
the parties to jointly request that the RRM process
be ended.
C. Establishes an arbitration process, if a draft of
an RRM is not submitted by the required deadline or
extended deadline, or a joint notification requesting
termination of the RRM process has been submitted.
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7. Requires all of the following to occur if an LEA test
claimant and DOF notify the Executive Director of the
CSM that no further progress in developing the RRM is
possible:
A. The Executive Director declares the development of
the RRM is at an impasse and that binding arbitration
is necessary.
B. The Executive Director notifies the Chief
Executive Officer of Fiscal Crisis and Management
Assistance Team (FCMAT) the test claimant and DOF are
at an impasse.
C. Requires the LEA and DOF to give all available
support materials to the arbitrator within 10 days of
the declared impasse, including but not limited to,
estimates, local cost projections, sample
information, and input from associations or other
interested parties.
D. Requires the Chief Executive Officer of FCMAT to
serve as the sole arbitrator for the RRM impasse and,
within 90 days, mediate or arbitrate a draft RRM and
provide it to the LEA and DOF, as specified.
E. Requires the LEA and DOF, within 30 days of
receiving the draft RRM from the arbitrator, to
jointly submit to the Executive Director the draft
RRM and proposed statewide estimate of costs for the
initial claiming period and budget year.
8. Requires any LEA filing a reimbursement claim to provide
with the reimbursement claim a signed certification from
the superintendent attesting to the accuracy of the data
used to calculate the amount claimed under the approved
RRM.
9. Requires the LAO, in addition, to information currently
required in statute, to also report at least once in
each regular session of the Legislature, on each LEA
reimbursable state mandate that meets the following
criteria:
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A. The CSM has determined the existence of a state
reimbursable mandate.
B. A claim for reimbursement has been filed with the
State Controller by a school district, county office
of education, or other eligible LEA.
C. The Legislature has not provided an appropriation
to fully fund current and pending claims for
reimbursement filed with the State Controller.
10.Requires the LAO to include specified information in the
report, due to the Legislature on or before January 1,
following the adjournment of the regular session for
which the review was made on each mandate, including:
A. A summary of the mandate and its statutory source.
B. Fiscal information, including but not limited to,
the claims paid to date, unpaid claims, pending
claims, and the history of appropriations for the
mandate.
C. Recommendations as to whether the mandate should
be amended, repealed or remain unchanged.
Comments
The motivation for the elements in this bill come from an
October 2009, California State Auditor report concerning
state mandate determination and payment processes.
According to this audit report, "while the Commission on
State Mandates has made progress in reducing its backlog of
test claims for state mandates, the continuing backlog is
large." The State Auditor finds that high workload and
insufficient resources exist at the CSM, and goes on to say
that, "This situation, combined with the long time that
elapses before the Commission makes determinations, means
that substantial costs will continue to build before the
Legislature has the information it needs to take any
necessary action."
Automatic repeal or inoperability of education bills keyed
with a mandate . The State Auditor in their October 2009
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report, after discussion with other states, points out that
some mandates represent permanent solutions to temporary
problems. The State Auditor suggested the sunset of each
mandate, to enable a legislative "reassessment of mandate
activities and costs" at a later time. This bill makes any
bill that imposes a state-mandated local program on an LEA,
as determined by Legislative Counsel, to include an
automatic repeal or makes the requirement inoperative five
years following the date from which the requirement becomes
operative, unless the particular bill includes a provision
"?that expressly notwithstands" this section in this bill.
Though an automatic trigger that would make a prospective
LEA mandate inoperable is one way to activate the
recommendation of the State Auditor and force the
reintroduction and passage of legislation that initially
creates a mandate; arguably, the additional reporting by
the Legislative Analyst, as envisioned in this measure,
should promote the regular "evaluation" of each mandate.
In addition, one Legislature cannot bind a future
Legislature.
Additional background . In 1979, Proposition 4 amended the
California Constitution by adding Article XIII B, Section 6
requiring the state to reimburse local governments for the
cost of new programs or higher levels of service mandated
by the Legislature or any state agency. In 1984, the
Legislature created the CSM, as a quasi-judicial body, to
decide test claims alleging that the State imposed a
reimbursable state-mandated local program. If the CSM
identifies a state-mandated program as eligible for
reimbursement, it adopts parameters and guidelines defining
what activities will be reimbursed and adopts statewide
cost estimates. The CSM is also authorized to hear
incorrect reductions claims (IRCs) from local agencies if
the Controller reduces reimbursement claims upon audit and
the claimant chooses to dispute that reduction. From
beginning to end, the mandate determination process is
sometimes excessively lengthy, often taking five years or
more to be resolved by the CSM.
In November 2004, state voters approved Proposition 1A,
which requires the Legislature to appropriate funds in the
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annual budget to pay outstanding mandate claims, "suspend"
the mandate, or "repeal" the mandate. However, these
provisions apply to local governments only and - by
definition - do not include school districts or community
colleges.
The CSM consists of the State Treasurer, the State
Controller, the Director of DOF, the Director of the Office
of Planning and Research, two local elected officials (with
the restriction that they come from different categories of
local government, including school district governing
boards, city councils, or county boards of supervisors),
and a public member with experience in public finance. No
current member of the CSM is an elected member of an LEA
board.
Prior Legislation
AB 2082 (Assembly Education Committee), 2009-10 Session,
similar to this bill with regard to provisions relating to
legislative review of new mandates and the information on
educational mandates the LAO is required to provide the
Legislature. (Held in Senate Education Committee)
Related Legislation
SB 64 (Liu), 2011-12 Session, provides for a specialized
mandate test claim process for K-12 school districts that
has many of the same process elements as that for local
agencies, with the exception of creating a school district
test claim advisory committee tasked with assisting CSM by
providing recommendations, as specified. (Held under
submission in Senate Appropriations Committee Suspense
File)
SB 887 (Emmerson), 2011-12 Session, enacts the Streamlined
Temporary Mandate Process Act of 2011, a voluntary,
temporary, streamlined alternative mandate reimbursement
process for LEA from the 2011-12 through the 2014-15 fiscal
years. (In Senate Education Committee)
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Arbitration process Likely minor, possible
significant ongoing costs General
Streamline LEA Potential future costs;
some offsetting savings General
mandates
Notifications/reports Minor to significant
ongoing workload General
SUPPORT : (Verified 8/29/11)
California Association of School Business Officials
California Association of Suburban School Districts
California School Boards Association
Education Mandated Cost Network
Manhattan Beach Council of PTAs
Public Advocates
Small School Districts' Association
ARGUMENTS IN SUPPORT : According to the author's office,
the intent of this bill is to implement changes in the
mandate reimbursement process in order to (1) reduce the
impact of ineffective and unnecessary mandates placed on
local educational agencies, (2) reduce the long-term
liability to the state for mandate reimbursements, and (3)
streamline the process and reduce the workload of the CSM,
other state agencies and local educational agencies, so as
to reduce processing time and administrative costs for all
claims.
ASSEMBLY FLOOR : 78-0, 5/19/11 (Consent)
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
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Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel P�rez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. P�rez
NO VOTE RECORDED: Alejo, Gorell
CPM:mw 8/29/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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