BILL ANALYSIS Ó
AB 166
Page 1
Date of Hearing: March 20, 2013
ASSEMBLY COMMITTEE ON EDUCATION
Joan Buchanan, Chair
AB 166 (Hernandez) - As Amended: March 11, 2013
SUBJECT : Pupil instruction: economics: personal finances
SUMMARY : Adds instruction related to personal finances to the
required course of study in grades 7 through 12. Specifically,
this bill :
1)Requires that instruction in economics provided in grades 7
through 12 include instruction related to personal finances,
including, but not limited to, budgeting and managing credit,
student loans, and debt.
2)Requires the California Department of Education (CDE) to
develop a personal finances curriculum in the next cycle in
which the next history-social science curriculum framework is
adopted.
3)Makes findings and declarations regarding the importance of
financial literacy education.
EXISTING LAW
1)Requires the course of study in grades 7 through 12 to
include, among other subjects, social sciences.
2)Requires the course of study in social sciences to draw upon
the disciplines of anthropology, economics, geography,
history, political science, psychology, and sociology,
designed to fit the maturity of the pupils.
3)Requires the SBE to include financial preparedness in the next
revision of the social science curriculum frameworks.
4)Requires the CDE to conduct work necessary to revise the
curriculum framework and evaluation criteria for instructional
materials in history-social science only after it has
completed work related to the development of curriculum
frameworks for the common core academic contents standards in
mathematics and language arts.
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5)Requires the State Board of Education (SBE) to adopt revised
curriculum frameworks and criteria by which instructional
materials will be evaluated that are aligned to the common
core standards for mathematics by May 30, 2013 and English
language arts by May 30, 2014).
FISCAL EFFECT : State mandated local program.
COMMENTS : According to the author, "The growing negative
effects of financial illiteracy, such as the housing mortgage
crisis and a low national savings rate, have spurred the need
for financial literacy education for California students." The
Washington, DC-based Jump$tart Coalition for Personal Financial
Literacy reports that its 2008 survey of high school seniors
revealed that "The financial literacy of high school students
has fallen to its lowest level ever?" The survey covered issues
ranging from savings and investment to personal debt and credit,
and, on average, high school seniors answered 48.3. California
Jump$tart reports 46 states have personal finance standards in
various forms, but only 13 of those states include personal
finance instruction as part of their K-12 graduation
requirements. Jump$tart did not report whether students in
states with financial literacy standards or required coursework
scored higher than other students on the survey.
While financial literacy instruction is not required in
California, districts may offer it under the permissive
Education Code. The CDE provides an electronic resource library
for grades K-12 with links to 44 programs that are appropriate
for use in the classroom or at home as a resource for students,
teachers, and parents. In addition, the California Council on
Economic Education has created curricula and lesson plans for
grades 6-8 and 9-12 called "Financial Fitness for Life."
Model Curriculum Standards . Existing law establishes the
minimum coursework required to receive a high school diploma:
three courses in English, two courses in mathematics, two
courses in science, three courses in social studies (including a
one-semester course in economics), one course in visual or
performing arts or a foreign language, and two courses in
physical education. Existing law also requires the
Superintendent of Public Instruction (SPI) to coordinate the
development, on a cyclical basis, of model curriculum standards
for the courses required for high school graduation. The
curriculum standards are developed by the Instructional Quality
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Commission (IQC) and adopted by the SBE. The IQC is an
18-member commission consisting of one member of the Assembly,
one member of the Senate, and 16 public members. At least seven
of the public members must have taught, written, or lectured on
the subject areas required for graduation.
Related Legislation . Five related bills are pending:
AB 123 (Bonta) requires school districts to include instruction
on the contribution of Filipino Americans to the farm labor
movement in California.
AB 137 (Buchanan) requires the IQC to receive input from
specified experts on civic learning the next time the
history-social science frameworks are developed and specifies
civic learning content to be taught.
AB 424 (Donnelly) adds the Magna Carta, the Articles of
Confederation, and the California Constitution to the historical
documents that are required to be incorporated into
history-social science curriculum framework and requires
instruction in the social sciences to include the development of
democracy and the history of the development of the United
States Constitution.
AB 700 (Gomez) requires instruction in the social sciences in
grade 8 and in any of grades 9 to 12, inclusive, and the
one-semester course in American government and civics that is
required for high school graduation, to include a voter
education component providing instruction in how to register and
cast votes in local, state, and federal elections, and how to
use the voter information pamphlet and other materials to become
an informed voter.
SB 552 (Calderon) provides that instruction in the area of
social sciences may include instruction on violence awareness,
which may include a component drawn from personal testimony in
the form of oral or video histories of individuals who were
involved with violence awareness efforts.
SB 552 is different from the other three bills in that is
authorizes, rather than requires instruction is a specific area.
However, under the permissive Education Code, school districts
are already authorized to provide instruction on violence
awareness.
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Prior legislation relating to financial literacy instruction has
been unsuccessful. These bills include:
SB 1080 (Lieu, 1012) would have encouraged instruction in
personal finance and required the CDE to develop a personal
finances curriculum. This bill died in the Senate
Appropriations due to the cost to the CDE.
AB 1502 (Lieu, 2008) would have required the SBE to ensure that
financial literacy is included in appropriate subject area
frameworks and encouraged school districts to include
instruction in financial literacy. This bill was vetoed by
Governor Schwarzenegger with the following message:
"While I acknowledge that teaching students the
importance of financial literacy is meritorious,
school districts already have the flexibility to
incorporate money management into their lesson plans.
Moreover, the State Board of Education adopted content
standards are developed by a diverse group of experts
and are intentionally broad in order to allow coverage
of various events, developments, and issues. I
continue to believe that the State should establish
rigorous academic standards and frameworks, but
refrain from being overly prescriptive in specific
school curriculum."
AB 150 (Lieu, 2007) would have required the SPI to
administer a California Financial Literacy Initiative, as
specified. This bill was also vetoed by Governor
Schwarzenegger on the basis that the SPI already has this
authority.
AB 1950 (Lieu, 2006) and AB 2435 (Wiggins, 2004) both would
have authorized districts to provide instruction on
personal finances. Both bills were vetoed by Governor
Schwarzenegger on the basis that districts are already
authorized to provide such instruction under the permissive
Education Code.
This bill raises a fundamental policy question regarding the
role of the Legislature vis-ŕ-vis the role of the IQC and SBE in
establishing curriculum content standards, frameworks, and
instructional requirements. In prior years, the Legislature has
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generally deferred this process to the IQC (formerly the
Curriculum Development and Supplemental Materials Commission) by
statutorily urging the commission to consider including specific
content, rather than requiring it. The commission has the
subject matter expertise and is also in a better position to
balance competing demands for limited instructional time.
Staff recommends amending the bill to (1) delete the requirement
to include instruction in financial preparedness in coursework
in economics and (2) change the requirement that the next
history-social science frameworks include financial preparedness
to a requirement to include "financial literacy, including but
not limited to, budgeting and managing credit, student loans,
and debt."
REGISTERED SUPPORT / OPPOSITION :
Support
California Bankers Association
California Communities United Institute
California Council on Economic Education
California Credit Union League
California Independent Bankers
California Jump$tart Coalition for Personal Financial Literacy
California Society of CPAs
Opposition
None received
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087