BILL ANALYSIS �
SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
Mark Leno, Chair
Bill No: AB 1463
Author: Committee on Budget
As Amended: June 12, 2014
Consultant: Jody Martin, Jennifer Troia, Samantha Lui
Fiscal: Yes
Hearing Date: June 15, 2014
Subject: Budget Act of 2014: Omnibus K-12 Education
Trailer Bill
Summary: Provides for statutory changes necessary to enact
education-related provisions of the Budget Act of 2014.
Background and Proposed Changes: As part of the 2014-15
budget, AB 1463 makes statutory changes necessary to
implement the Budget Act. Specifically, this bill would:
1)Repay Deferrals: Repays $4.7 billion of the state's
outstanding deferral obligations owed to local
educational agencies in 2014-15. The repayment of prior
deferrals will reduce the borrowing costs that many of
these entities have borne in order to manage these
deferrals over several years. In addition, pays-off
remaining $992 million in deferrals for local educational
agencies and community colleges, contingent upon a
determination of the Proposition 98 minimum guarantee
made by the Director of Finance on May 13, 2015. If the
latter amount of deferrals is also paid-off, these
combined repayments would eliminate all prior deferrals;
2)Repay Mandates: Specifies the use of $450 million to pay
down the K-14 education mandates backlog, with the intent
that K-12 monies freed up from this payment could be
dedicated to implementation of the Common Core State
Standards;
3)Suspend the Proposition 98 Statutory Split: Suspends the
statutorily-specified split of the Proposition 98 minimum
guarantee between K-12, community college, and other
state agencies. This section of statute has been
suspended each year since 1992-93;
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4)Reschedule Settle-Up Payment: Reschedules the
appropriation of an outstanding 2006-07 "settle-up"
balance ($212 million in non-Proposition 98 General Fund)
from 2014-15 to 2015-16. As a result, those funds are
freed up for other uses;
5)Appropriate Funds Related to the Quality Education
Investment Act (QEIA): Provides the final payment of
$409.6 million non-Proposition 98 General Fund to fulfill
the settlement of the California Teachers' Association v.
Schwarzenegger lawsuit that established the QEIA. The
funds would be appropriated to the QEIA program ($267
million), the Community Colleges QEIA Career Technical
Education program ($48 million), and the Emergency Repair
Program ($94.6 million);
6)Update Mandates Block Grant: Revises the list of
programs included in the mandates block grant, rather
than reimbursed on a program-specific basis;
7)Adjust Reimbursement Rates: Increases the standard
reimbursement rate (SRR) for child care and development
programs by five percent, to $9,024.75 per unit of
average daily enrollment for a 250-day year, increased by
the cost-of-living adjustment granted by the Legislature
annually. Sets the regional market rate (RMR) to the
85th percentile of the 2009 survey, reduced by 13
percent;
8)Establish Process to Award Preschool Expansion Funds:
Commencing June 15, 2015, require the Superintendent to
consider different criteria and data in awarding
expansion funds, and require the Superintendent to
prioritize applicant agencies that would maximize
progress toward achieving access to full-day, full-year
services for all income eligible four-year-olds with
working parents. Authorize a family child care home
education network to be eligible for expansion funding;
9)Establish an Early Learning Quality Rating and
Improvement System (QRIS) Block Grant: Requires the
superintendent to administer an early learning QRIS block
grant allocated to local consortia to support local early
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learning quality rating and improvement systems that
increase the number of low-income children in
high-quality preschool programs. Sets forth processes
local consortia must fulfill to be eligible. Require the
Superintendent, in consultation with the executive
director of the State Board of Education, to allocate
QRIS block grant funds based on the number of California
State Preschool Program (CSPP) slots within the county or
region;
10)Authorize a CSPP Contracting Agency to Retain a Higher
Reserve Fund Balance: Authorizes a CSPP contracting
agency to retain a reserve fund balance equal to fifteen
percent of the sum of the maximum reimbursable amount of
all preschool contracts, for purposes of professional
development for CSPP instructional staff;
11)Repeal Family Fee for Part-day CSPP: Repeals the fee for
CSPP, which is levied under current law.
12)Provide Augmentation to Child Care Facilities Revolving
Fund for LEAs offering State Preschool Program: Allows
local educational agencies to apply for new funds to
purchase, renovate, or repair preschool facilities;
13)Require Minimum Qualifications of Specified Transitional
Kindergarten (TK) Teachers: Requires that teachers
assigned to a TK class after July 1, 2015, be
credentialed, and by August 1, 2020, have a minimum of 24
units of early childhood education or childhood
development, or a child development permit issued by the
Commission on Teacher Credentialing. Establishes the
intent that TK curriculum be aligned to the California
Preschool Learning Foundations developed by the
department;
14)Set the State Median Income (SMI) for Child Care
Eligibility Purposes: Sets the SMI to 70 percent of the
state median income in use for the 2007-08 fiscal year,
for purposes of income-eligibility to qualify for child
care programs;
15)Clarify Requirements Related to the State Child Care and
Development Fund plan: Specifies April 1 of the year
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that the plan is due to the federal government as the
deadline for the Department of Education to provide the
plan to the Legislature and the Department of Finance.
In addition, requires the department to provide the final
plan that is approved by the federal government and a
description of any changes made since the draft plan;
16)Require Commission on Teacher Credentialing (CTC) Review
of Permits: Requires, by July 1, 2016, the CTC to review,
and update, if applicable, conditions for issuance or
renewal of permits, which authorize: a) service in the
care, development, and instruction of children in child
care and development programs, and b) supervision of a
child care and development program;
17)Repeal County School Service Fund: Repeals existing law
which establishes the county school service fund
contingency account in the General Fund, in order to
provide greater flexibility consistent with the enactment
of the Local Control Funding Formula (LCFF);
18)Extend Encumbrance Period for the California
Collaborative on Educational Excellence: Extends the
encumbrance period for $10 million allocated in the 2013
Budget Act for the Collaborative to the 2014-15 fiscal
year;
19)Make Changes Impacting the CTC: Authorizes the State
Controller to make temporary intra-year cash transfers
from the Test Development and Administration Account to
the Teacher Credentials Fund to provide cash flow relief
to the Teacher Credentials Fund during low-revenue
months. Also, authorizes the CTC to set and charge fees
to recover the costs of providing reviews of new and
existing educator preparation programs and require the
CTC to notify the Legislature and Department of Finance
before implementing or changing the fees;
20)Provide a Child Nutrition Cost-of-Living Adjustment
(COLA): Provides for a COLA to update reimbursement
rates for meals served through the state child nutrition
programs;
21)Make Technical Changes Related to Special Education
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Funding: Specifies the amounts of funding allocated in
the budget acts of 2012 and 2013 that would count toward
the 2010-11 fiscal year MOE requirement for the special
education program. Also, adjusts special education
General Fund apportionments in 2014-15, based on an
updated determination of revenues related to the
dissolution of redevelopment agencies;
22)Rename the State Student Assessment System: Changes the
name of the state's new pupil assessment system from the
Measurement of Academic Performance and Progress (MAPP)
to the California Assessment of Student Performance and
Progress (CAASPP);
23)Clarify Responsibility for Administration of the
Standards-Based Test in Spanish: Clarifies that the
administration of the Standards-Based Test in Spanish to
English-language learners is funded by the state, and the
administration of the test to non-English learners in
dual immersion classrooms is at the discretion and
expense of local educational agencies;
24)Make Changes Related to Retirees Participating in State
Teachers' Retirement Plan (STRS): Extends, until June
30, 2017, an exemption that allows retired members of the
STRS Defined Benefit Program to earn specified
postretirement compensation in any one school year,
without a reduction in retirement allowance;
25)Make Changes Impacting Charter Schools: Authorizes, for
the 2014-15 fiscal year only, charter schools whose
charters were granted by their chartering authority
before July 1, 2014 to claim average daily attendance for
purposes of apportionments from the adult education fund
for schools or classes maintained for adults in
correctional facilities, under specified circumstances.
Also, exempts, for the 2014-15 fiscal year only, charter
schools whose charters were granted by their chartering
authority before July 1, 2014 and that provide
instruction exclusively in partnership with specified
career preparation programs from requirements that a
pupil over 19 years of age be continuously enrolled in
public school and making satisfactory progress toward a
diploma in order to generate charter school
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apportionments;
26)Establish in Statute the Career Pathways Trust Program:
Establishes a statutory framework for the Career Pathways
Trust competitive grant program for K-14, including
requirements of grant recipients and of the
Superintendent of Public Instruction for administration
of the program;
27)Revise Requirements for Local Reserve Funds: Beginning
in 2015-16, requires the governing board of a school
district, when adopting a budget that includes a reserve
above the local minimum recommended reserve adopted by
the State Board of Education, to provides the following
information for public review: the minimum recommended
reserve adopted by the State Board; the district's fund
balance in excess of the recommended reserve; and a
statement substantiating the need for the excess reserve
level. In the event that Assembly Constitutional
Amendment (ACA) 1 is passed by voters, the following
changes would apply: (i) in the immediate fiscal year
following a fiscal year that a transfer is made to the
Proposition 98 reserve, local districts would be
prohibited from having reserves in excess of two to three
times the minimum recommended reserve amount; (ii)
districts with less than 400,000 units of ADA would be
capped at two times, while districts with more than
400,000 would be capped at three times this amount; (iii)
A county superintendent of schools could grant a school
district an exemption from this requirement for up to two
years within a three year period if the district provides
documentation indicating the need for a reserve above
these levels;
28)Make Changes Related to School Facilities: Specifies
that when moneys transferred to the General Fund each
year from the Public School Building Loan Fund and State
School Building Aid Fund exceed the amount required to
reimburse the General Fund for specified purposes, the
excess amount would be appropriated from the General Fund
for purposes of the School Facilities Emergency Repair
Account (rather than the appropriation under existing law
to the Leroy Greene State School Building Lease-Purchase
Law of 1976 and the State School Deferred Maintenance
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Fund). Further, eliminates the State School Deferred
Maintenance Fund;
29)Makes Changes Regarding Independent Study Program:
Streamlines some of the requirements of the current
Independent Study program, such as, not requiring a
teacher signature on every assignment, permitting
year-long Independent Study agreements, and allowing for
electronic parent signatures. Also, Creates a new
course-based Independent Study option with requisite
standards for instructional minutes, course rigor, and
quality;
30)Reappropriate Specified Funds: Reappropriates and makes
available for encumbrance until June 30, 2018, $381
million that was originally appropriated to the
Department of Education for allocation to local
educational agencies, for specified purposes, in the
Budget Act of 2013;
31)Include Other Provisions: Makes additional technical
changes, including but not limited to changes to remove
references to repealed code sections related to mental
health services; provides that, if the Commission on
State Mandates determines that the bill contains costs
mandated by the state, reimbursement for those costs
shall be made pursuant to existing law; and, declares
that it is to take effect immediately as a bill providing
for appropriations related to the budget bill.
Fiscal Effect: Funds appropriated in this bill would be
applied toward the minimum funding requirements for school
and community college districts imposed by Section 8 of
Article XVI of the California Constitution (Proposition
98).
Support: Unknown
Opposed: Unknown
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