BILL NUMBER: AB 478	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Roger Hernández

                        FEBRUARY 15, 2011

   An act to amend Section 84750.5 of the Education Code, relating to
community colleges.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 478, as introduced, Roger Hernández. Community colleges:
funding.
   Existing law establishes the California Community Colleges under
the administration of the Board of Governors of the California
Community Colleges. Existing law authorizes the establishment of
community college districts under the administration of community
college governing boards, and authorizes these districts to provide
instruction at community college campuses throughout the state.
   Existing law requires the board of governors to develop criteria
and standards, in accordance with specified statewide minimum
requirements, for the purposes of making the annual budget request
for the California Community Colleges to the Governor and the
Legislature and allocating state general apportionment revenues.
Those statewide minimum requirements include, among other things, a
requirement that the calculations of each community college district'
s revenue level for each fiscal year be based on specified criteria,
with revenue adjustments being made for increases or decreases in
full-time equivalent students (FTES) for specified purposes. These
requirements also include a requirement that the statewide requested
increase in budgeted workload FTES be based on the sum of specified
computations, including the positive difference between the
California unemployment rate and a rate of 5%. For purposes of this
computation, existing law prohibits that positive difference from
exceeding 2%.
   This bill would delete that prohibition.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 84750.5 of the Education Code is amended to
read:
   84750.5.  (a) The board of governors, in accordance with the
statewide requirements contained in paragraphs (1) to (11),
inclusive, of subdivision (d), and in consultation with institutional
representatives of the California Community Colleges and statewide
faculty and staff organizations, so as to ensure their participation
in the development and review of policy proposals, shall develop
criteria and standards for the purposes of making the annual budget
request for the California Community Colleges to the Governor and the
Legislature, and for the purpose of allocating the state general
apportionment revenues.
   (b) In developing the criteria and standards, the board of
governors shall utilize and strongly consider the recommendations and
work product of the "System Office Recommendations Based on the
Report of the Work Group on Community College Finance" that was
adopted by the board at its meeting of March 7, 2005. The board shall
complete the development of these criteria and standards,
accompanied by the necessary procedures, processes, and formulas for
utilizing its criteria and standards, by March 1, 2007, and shall
submit on or before that date a report on these items to the
Legislature and the Governor.
   (c) (1) It is the intent of the Legislature in enacting this
section to improve the equity and predictability of general
apportionment and growth funding for community college districts in
order that the districts may more readily plan and implement
instruction and related programs, more readily serve students
according to the policies of the state's master plan for higher
education, and enhance the quality of instruction and related
services for students.
   (2) It is the intent of the Legislature to determine the amounts
to be appropriated for the purposes of this section through the
annual Budget Act. Nothing in this section shall be construed as
limiting the authority either of the Governor to propose, or the
Legislature to approve, appropriations for California Community
Colleges programs or purposes.
   (d) The board of governors shall develop the criteria and
standards within the following statewide minimum requirements:
   (1) The calculations of each community college district's revenue
level for each fiscal year shall be based on the level of general
apportionment revenues (state and local) the district received for
the prior year plus any amount attributed to a deficit from the
adopted standards to be developed pursuant to this section, with
revenue adjustments being made for increases or decreases in full
time equivalent students (FTES), for equalization of funding per
credit FTES, for necessary alignment of funding per FTES between
credit and noncredit programs, for inflation, and for other purposes
authorized by law.
   (2)  Commencing with the 2006-07 fiscal year, the
  The  funding mechanism developed pursuant to this
section shall recognize the need for community college districts to
receive an annual allocation based on the number of colleges and
comprehensive centers in the district. In addition to this basic
allocation, the marginal amount of credit revenue allocated per FTES
shall be funded at a rate not less than four thousand three hundred
sixty-seven dollars ($4,367), as adjusted for the change in the
cost-of-living in subsequent annual budget acts.
   (A) To the extent that the Budget Act of 2006 contains an
appropriation of one hundred fifty-nine million four hundred
thirty-eight thousand dollars ($159,438,000) for community college
equalization, the Legislature finds and declares that community
college equalization for credit FTES has been effectively
accomplished as of March 31, 2007.
   (B) The chancellor shall develop criteria for the allocation of
one-time grants for those districts that would have qualified for
more equalization under prior law than pursuant to this section and
the Budget Act of 2006, and for those districts that would have
qualified for more funding under a proposed rural college access
grant than pursuant to this section and the Budget Act of 2006, as
determined by the chancellor. Appropriations for the one-time grants
shall be provided pursuant to paragraph (24) of subdivision (a) of
Section 43 of Chapter 79 of the Statutes of 2006.
   (3) Noncredit instruction shall be funded at a uniform rate of two
thousand six hundred twenty-six dollars ($2,626) per FTES, as
adjusted for the change in the cost-of-living provided in subsequent
annual budget acts.
   (4) Funding for instruction in career development and college
preparation, as authorized pursuant to Section 84760.5, shall be
provided as follows:
   (A)  Beginning in the 2006-07 fiscal year, career
  Career  development and college preparation FTES
may be funded at a rate of three thousand ninety-two dollars ($3,092)
per FTES for courses in programs that conform to the requirements of
Section 84760.5. This rate shall be adjusted for the change in the
cost-of-living or as otherwise provided in subsequent annual budget
acts.
   (B) Changes in career development and college preparation FTES
shall result in adjustments to revenues as follows:
   (i) Increases in career development and college preparation FTES
shall result in an increase in revenues in the year of the increase
and at the average rate per career development and college
preparation FTES, including any cost-of-living adjustment authorized
by statute or by the annual Budget Act.
   (ii) Decreases in career development and college preparation FTES
shall result in a revenue reduction in the year following the
decrease and at the average rate per career development and college
preparation FTES.
   (5) Except as otherwise provided by statute, current categorical
programs providing direct services to students, including extended
opportunity programs and services, and disabled students programs and
services, shall continue to be funded separately through the annual
Budget Act, and shall not be assumed under the budget formula
otherwise specified by this section.
   (6) For credit and noncredit instruction, changes in FTES shall
result in adjustments in district revenues as follows:
   (A) Increases in FTES shall result in an increase in revenues in
the year of the increase and at the amount per FTES provided for in
paragraph (2) or (3), as appropriate, including any cost-of-living
adjustment authorized by statute or by the annual Budget Act.
   (B) Decreases in FTES shall result in revenue reductions beginning
in the year following the initial year of decrease in FTES, and at
the district's marginal funding per FTES.
   (C) Districts shall be entitled to the restoration of any
reductions in apportionment revenue due to decreases in FTES during
the three years following the initial year of decrease in FTES if
there is a subsequent increase in FTES.
   (7) Revenue adjustments shall be made to reflect cost changes,
using the same inflation adjustment as required for school districts
pursuant to subdivision (b) of Section 42238.1. These revenue
adjustments shall be made to the college and center basic
allocations, credit and noncredit FTES funding rates, and career
development and college preparation FTES funding rates.
   (8) The statewide requested increase in budgeted workload FTES
shall be based, at a minimum, on the sum of the following
computations:
   (A) Determination of an equally weighted average of the rate of
change in the California population of persons between the ages of 19
and 24 and the rate of change in the California population of
persons between the ages of 25 and 65, both as determined by the
Department of Finance's Demographic Research Unit as determined for
the preceding fiscal year.
   (B) To the extent the California unemployment rate exceeds 5
percent for the most recently completed fiscal year, that positive
difference shall be added  in an amount determined by the
Chancellor of the California Community College   s 
 to   the Department of Finance,  to the rate
computed in subparagraph (A). In no event shall that positive
difference exceed 2 percent.   The amount determined by
the Chancellor shall be accompanied by a rationale for that
determination and be submitted to the Department of Finance. 
   (C) The chancellor may also add to the amounts calculated pursuant
to subparagraphs (A) and (B) the number of FTES in the areas of
transfer, vocational education, and basic skills that were unfunded
in the current fiscal year. For this purpose, the following
computation shall be determined for each district, and a statewide
total shall be calculated:
   (i) Establish the base level of FTES earned in the prior fiscal
year for transfer courses consisting of courses meeting the
California State University breadth or Intersegmental General
Education Transfer Curriculum requirements or major course
prerequisites accepted by the University of California or the
California State University.
   (ii) Establish the base level of FTES earned in the prior fiscal
year for vocational education courses consisting of courses defined
by the chancellor's office Student Accountability Model codes A and B
that are consistent with the courses used for measuring success in
this program area under the accountability system established
pursuant to Section 84754.5.
   (iii) Establish the base level of FTES in the prior fiscal year
for basic skills courses, both credit and noncredit.
   (iv) Add the sum of FTES for clauses (i) to (iii), inclusive.
   (v) Multiply the result of the calculation made under clause (iv)
by one plus the district's funded growth rate in the current fiscal
year. This figure shall represent the maintenance of effort level for
the budget year.
   (vi) FTES in transfer, vocational education, and basic skills that
are in excess of the total calculated pursuant to clause (v), shall
be considered in excess of the maintenance of effort level, and shall
be eligible for overcap growth funding if the district exceeds its
overall funded FTES.
   (vii) In no event shall the amount calculated pursuant to clause
(vi) exceed the total unfunded FTES for that fiscal year. To the
extent the computation specified in subdivision (c) requires the
reporting of additional data by community college districts, that
reporting shall be a condition of the receipt of apportionment for
growth pursuant to this section and those funds shall be available to
offset any and all costs of providing the data.
   (9) Except as provided in subparagraph (B) of paragraph (6), for
the 2006-07 fiscal year or for the first fiscal year for which this
section is implemented by the board of governors, whichever is later,
all districts shall receive at least the amount of revenue received
for the prior fiscal year, adjusted for the cost-of-living adjustment
specified in subdivision (b) of Section 42238.1 and adjusted for the
actual increase in FTES not to exceed the district's funded growth
cap. Thereafter, allocations shall be made pursuant to this section,
as implemented by the board of governors pursuant to the annual
Budget Act.
   (10) Except as specifically provided in statute, regulations of
the board of governors for determining and allocating the state
general apportionment to the community college districts shall not
require district governing boards to expend the allocated revenues in
specified categories of operation or according to the workload
measures developed by the board of governors. 
   (e) This section shall become operative on October 1, 2006.