BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-12 Regular Session
BILL NO: SB 779
AUTHOR: Lieu
AMENDED: March 23, 2011
FISCAL COMM: Yes HEARING DATE: April 27, 2011
URGENCY: No CONSULTANT:Beth Graybill
SUBJECT : Pupil instruction: Personal finances.
SUMMARY
This bill authorizes a school district, in providing
instruction in economics, to include instruction related to
personal finances and would require the California Department
of Education to consider developing a personal finances
curriculum in the next adoption cycle of the history and
social science curriculum framework and its accompanying
instructional materials.
BACKGROUND
Current law requires the State Board of Education (SBE) to
adopt statewide academic content standards in core curriculum
areas, pursuant to the recommendations of the Commission for
the Establishment of Academic Content and Performance
Standards. The History-Social Science Standards for
California Public Schools were adopted in 1998 and the
curriculum framework for those standards was adopted in
October 2000. (Education Code � 60605)
Current law requires, after January 1, 2003, the SBE to
ensure that the revision of textbooks or curriculum
frameworks in the social sciences, health, and mathematics
curricula integrate certain components, including financial
preparedness.
(EC � 51284)
Although the update of the history-social science framework
was originally scheduled to be completed in 2010, the process
for reviewing frameworks and adopting instructional materials
has been suspended since July 2009, pursuant to AB 2 of the
Fourth Extraordinary Session (Chapter 2, July 2009), which
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among other things, prohibited the SBE from reviewing
frameworks and adopting instructional materials until the
2013-14 school year. AB 2 also extended to the 2012-13
fiscal year the suspension of the requirement to purchase
instructional materials within any specific period of time
following adoption of those materials by the SBE. (EC �
60200.7 and � 60422.1)
SB 70 (Committee on Budget and Fiscal Review, Chapter 7,
March 24, 2011) extended the suspension of the framework and
instructional materials process by an additional two years
until the 2015-16 school year.
Current law requires the adopted course of study for students
in grades 7-12 to include specified content in social studies
and requires students in grades 9 to 12 inclusive, to
complete, as part of the high school graduation course
requirements, three courses in social studies, including a
one-semester course in economics.
(EC � 51220 and � 51225.3)
ANALYSIS
This bill :
1) Authorizes a school district, in providing instruction
in economics, to include instruction related to the
understanding of personal finances, including, but not
limited to, budgeting, savings, credit, and identity
theft.
2) Requires the California Department of Education (CDE) to
consider developing a personal finances curriculum in
the next cycle in which the history and social science
curriculum framework and its accompanying instructional
materials are adopted.
STAFF COMMENTS
1) Need for the bill . Current law provides schools the
flexibility to teach budgeting, savings, and personal
finance, however, the author's office maintains that
most pupils do not receive this information and many
students leave high school ill equipped to manage their
finances responsibly, establish and maintain good
credit, or protect themselves from fraud, deception,
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predatory lending, or identity theft. According to the
U.S. Financial Literacy and Education Commission, "The
recent economic crisis has highlighted how essential it
is that individuals and families have the information,
education, and tools they need to make good financial
decisions in an increasingly complex U.S. and global
financial system."
2) Recent Efforts . The SPI has launched a financial
literacy awareness campaign to provide schools,
teachers, students and parents with access to
supplemental resources that can help students develop
knowledge and understanding of money management. The
goal of this initiative is to provide schools, teachers,
students, and parents with access to supplemental
resources that can help students develop a keen
understanding of responsible money management and
increase their overall financial literacy. The CDE
hosts an online resource library for grades K-12 that
provides more than 30 Internet links to programs that
are appropriate for use in the classroom or at home to
increase financial literacy.
3) Where does financial literacy belong ? Currently, the
state's academic content standards provide that the
instruction of economics address the following economic
concepts:
a) Common economic terms, concepts, and economic
reasoning.
b) Elements of America's market economy in a
global setting.
c) The influence of the federal government on the
American economy.
d) The elements of the U.S. Labor market in a
global setting.
e) The impact of aggregate economic behavior on
the U.S. economy.
f) International trade and how the U.S. economy
affects and is affected by economic forces beyond
the borders of the United States.
Although a model personal finance curriculum could be
helpful to schools and teachers who want to teach
students about personal finances and money, including
the curriculum in the next adoption cycle for the social
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science framework could require modification of the
existing content standards for economics, as the subject
is not covered in the existing domains of those
standards. Conceivably, information relating to
personal finances budgetary savings, credit, and
identity theft could be incorporated into other content
areas such as mathematics or health. Instead of
including a model curriculum in the social studies
frameworks, would it make more sense for CDE to make the
model curriculum available on its website?
Given the permissiveness of the education code, schools
can already incorporate personal finance instruction
into economics or any other course if they so choose.
Do schools need the authority provided by SB 779?
4) Clarifying amendment . Curriculum frameworks are
blueprints for implementing the academic content
standards and serve as a basis for the development of
instructional materials. However, the SBE does not
adopt instructional materials for grades 9-12. Staff
therefore recommends an amendment to delete the
reference to accompanying instructional materials.
5) Related and prior legislation .
SB 223 (Wyland, 2009) required that one-half of the economics
course required for high school graduation focus on
personal finance and financial literacy. This measure
was passed by this Committee on a 9-0 vote and was later
held by the Assembly Appropriations Committee.
AB 1502 (Lieu, 2008) would have required the SBE and the
Curriculum Development and Supplemental Materials
Commission to ensure that information about financial
literacy is included in appropriate subject area
frameworks, encouraged school districts to include
instruction in personal finance, as specified in
economics, and authorized the Superintendent of Public
Instruction to accept private donations for the purposes
of that Act. This measure was passed by the Senate
Education Committee on an 8-0 vote, and was subsequently
vetoed by Governor Schwarzenegger.
AB 150 (Lieu, 2007) would have required the SPI to administer
a California Financial Literacy Initiative (CFLI) as a
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program for improving pupil financial literacy. This
measure was passed by the Senate Education Committee on
a 9-0 vote and later vetoed by Governor Schwarzenegger.
AB 1950 (Lieu, 2006) would have authorized school districts
to provide instruction in economics courses relating to
the understanding of personal finances including
budgeting savings, and credit. This measure was passed
by the Senate Education Committee on a 9-0 vote and was
later vetoed by Governor Schwarzenegger.
AB 2435 (Wiggins, 2004) would have authorized school
districts to include instruction related to the
understanding of personal finances, including budgeting,
savings, and credit. This measure was passed by the
Senate Education Committee on an 8-1 vote and was vetoed
by Governor Schwarzenegger.
In his veto messages for these bills, then Governor
Schwarzenegger opined that while improving the financial
literacy is meritorious, school districts already have
the flexibility to incorporate money management into
their lesson plans and the content standards are
intentionally broad in order to allow coverage of
various events, development and issues.
SUPPORT
None received.
OPPOSITION
None received.