BILL ANALYSIS Ó
AB 2435
Page 1
ASSEMBLY THIRD READING
AB 2435 (Roger Hernández)
As Amended April 26, 2012
Majority vote
EDUCATION 7-0 APPROPRIATIONS 12-5
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|Ayes:|Brownley, Norby, Ammiano, |Ayes:|Fuentes, Blumenfield, |
| |Butler, Carter, Eng, | |Bradford, Charles |
| |Williams | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
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SUMMARY : Establishes rules governing the indirect rate that
local education agencies (LEAs) may charge when implementing
federal or state grant programs. Specifically, this bill :
1)Defines "direct cost" as a cost that provides measurable,
direct benefits to a particular program of an agency,
including, but not limited to, salaries and benefits of
teachers and aides, costs of purchasing textbooks and
instructional supplies, and costs for providing pupils with
counseling, health services, and transportation.
2)Defines "indirect cost" as the agency-wide, general management
cost of the activities for the direction and control of the
agency as a whole, including, but not limited to,
administrative activities necessary for the general operation
of the agency, as specified.
3)Defines "indirect cost rate" as the indirect cost rate
established by California Department of Education (CDE) for
each school district.
4)Requires the CDE or any other state agency that administers a
grant or allocation of federal funds to a school district to
allow an indirect cost rate that is not less than the indirect
cost rate established by CDE for each district, unless federal
AB 2435
Page 2
or state law requires a lower cost rate.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, no additional General Fund/Proposition 98 costs to
implement this measure. The majority of state and federal
grants specify the amount school districts can utilize for
administration. If a federal or state grant specifies the rate
a district can utilize for administration, this bill requires
districts to use that rate.
COMMENTS : When implementing a grant program, LEAs incur
indirect costs, which include the cost of administrative
activities necessary for the general operation of the agency,
such as accounting, budgeting, payroll preparation, personnel
services, purchasing, and centralized data processing. LEAs are
typically allowed to allocate a fixed percentage of the grant
(the indirect cost rate) to these overhead activities. The CDE
periodically assigns an allowed indirect cost rate for each LEA.
For the Los Angeles County Office of Education, the sponsor of
this bill, the CDE-established rate is 9.31%.
This bill requires CDE or any other state agency that
administers a grant or allocation of federal funds to a school
district to allow an indirect cost rate that is not less than
the indirect cost rate established by CDE for each district,
unless federal or state law requires a lower cost rate.
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087
FN: 0003697