BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 859|
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UNFINISHED BUSINESS
Bill No: SB 859
Author: Senate Budget and Fiscal Review Committee
Amended: 6/12/14
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Budget Act of 2014: Local Control Funding Formula
SOURCE : Author
DIGEST : This bill provides the statutory changes necessary to
enact education-related provisions of the Budget Act of 2014.
Assembly Amendments delete the Senate version of the bill, which
expresses legislative intent to enact statutory changes relating
to the Budget Act, and instead add the current language.
ANALYSIS : As part of the 2014-15 Budget, this bill makes the
statutory changes necessary to implement the Budget Act.
Specifically, this bill:
1. Appropriate Funds for Local Control Funding Formula LCFF .
Appropriates $4.8 billion from the General Fund for
allocation through LCFF to local educational agencies (LEAs)
($4.7 billion for school districts and charter schools and
$25.9 million for county offices of education (COEs).
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2. Revise the Calculation of Unduplicated Pupils . Authorizes
schools participating in Provisions 2 or 3 of the National
School Lunch Program (which allow for free meals to be
provided to all enrolled pupils at schools with very high
poverty rates) to establish base-year student eligibility for
free or reduced-price meals no less than once every four
years, provided that they annually update their counts of
eligible students, as specified. Requires the Superintendent
of Public Instruction (SPI) to revise an LEA's three-year
rolling average number of unduplicated students by using
2014-15 student data in place of 2013-14, if doing so
increase the LEA's rolling average. Expresses legislative
intent to review, for each school district and COE, the
enrollment of unduplicated pupils for the 2013-14 and 2014-15
fiscal years, and provides one time funding, if necessary for
those with higher enrollment of unduplicated pupils in
2014-15 compared to 2013-14. Further, refines the definition
of foster youth for purposes of calculating unduplicated
pupils.
3. Revise Provisions Related to Economic Recovery Targets
(ERTs) . Specifies that 2013-14 average daily attendance
(ADA) calculations are final as of the second principal
apportionment (P-2) for purposes of establishing ERTs.
Additionally, clarifies that the full ERT amount shall be
added on to the LCFF when the LCFF is fully implemented, and
that ERTs shall (rather than may) be subject to property tax
offsets.
4. Clarify the Definition of Homeless Students . Clarifies the
district of residence for homeless students and associated
LCFF funding provided to COEs. Specifically, the
determination will be based on the largest (in terms of ADA)
applicable non-basic aid district serving the student's grade
level.
5. Make Other Changes to LCFF Calculations .
A. Requires the base entitlement for the transition to
the LCFF to be adjusted to reflect the exclusion of
one-time redevelopment agency liquid asset recovery
revenue, as specified.
B. Sets the point-in-time (P-2/Annual) for specified
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calculations, including revenue limits, charter grants,
necessary small schools (NSS), and charter school physical
locations.
C. Repeals the unique revenue limit funding adjustment
related to an inter-district attendance agreement between
the Fallbrook Union High School District and the
Capistrano Unified School District, and requires the
amount of state apportionments provided to these districts
for the 2012-13 fiscal year to be included in specified
computations related to the LCFF, consistent with LCFF
existing provisions that ensure no district receives less
funding than it did in 2012-13. These districts will
continue to have a unique inter-district transfer for the
purpose of receiving federal impact aid funds.
1. Make Changes Impacting Charter Schools .
A. Requires charter schools to annually report their
physical location to the State Department of Education no
later than November 30 of each fiscal year, and specifies
when the physical location is considered final for
specified purposes.
B. Adds juvenile court students to the list of students
for which a county program charter can receive a county
rate and clarifies LCFF apportionments for county students
attending a county program charter.
C. Clarifies that all-charter districts can continue to
receive declining enrollment adjustments under the LCFF;
repeal prior language that allowed all-charter districts
to receive declining enrollment adjustments under the
former Charter School Block Grant; and clarifies that for
purposes of LCFF, all-charter districts are treated as
school districts.
D. Specifies that excess in-lieu payments made to charter
schools will be used to offset state aid.
E. Clarifies the "gap" funding calculation for countywide
charter schools with students from basic aid districts by
utilizing prior year basic aid status to compute in-lieu
payments during the transition to full LCFF
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implementation.
F. Authorizes county charter programs to seek in-lieu
payments from the district of residence for students not
funded under the county rate (with the aim of treating
county program charters in the same manner as COEs).
G. Clarifies that the oversight fee paid by a charter
school to the entity that provides oversight will be
calculated on the charter school's annual LCFF allocation.
1. Clarify Supplemental Revenue Augmentation Fund (SRAF)
Transfer . Authorizes the Director of the Department of
Finance to determine the amount of restricted excess local
property tax revenue available for transfer to SRAF.
Clarifies that COEs should report to the State Controller's
Office (SCO), rather than the county auditor-controller, SRAF
funds that offset General Fund costs of the trial courts,
since SCO implements that offset.
2. Conform Instructional Day/Time Penalties . Makes COE and
four-day school week instructional day and minute-related
requirements and penalties the same as those applicable to
school districts under the LCFF. COEs and four-day school
week programs will continue to be authorized, through
2014-15, to reduce the minimum required school year by up to
five days of instruction, or the equivalent number of
instructional minutes without incurring penalties.
3. Clarify Basic Aid Program Adjustments . Clarifies that basic
aid choice, open enrollment, supplemental, and court-ordered
voluntary pupil adjustments are based on LCFF target base
grants, not the NSS funding rates, if the student's district
of residence is funded as a NSS.
4. Revise Local Control Accountability Plan (LCAP) Review
Provisions . Specifies that the SPI shall perform the duties
of a county superintendent of schools with respect to
approval of an LCAP if the county superintendent of schools
has jurisdiction over only a single school district. This
change will be consistent with the SPI's role in reviewing
and approving the budgets for such districts.
5. Make Changes Related to Out-of-State Tuition . Clarifies
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that county superintendents and school districts may continue
authorizing students to attend schools in adjoining states
and out-of-state tuition average-daily-attendance is credited
to the school district of residence.
6. Reimburse LEAs for 2013-14 Out-of-State Tuition Costs .
Reimburses LEAs for out-of-state tuition and transportation
costs incurred in the 2013-14 fiscal year. This change is
intended to provide a one-time hold harmless payment of those
costs for districts that entered into out-of-state tuition
contracts before last year's enactment of LCFF-related
statutes, which otherwise will require the county
superintendent to pay for these expenses.
7. Require LCFF Implementation Report . Requires the State
Board of Education (SBE), working in collaboration with the
Department of Education, to report to the Legislature, no
later than February 1, 2015, regarding the status of LCFF
implementation.
8. Modify LCAP Template Adoption Process . Allows SBE, until
January 31, 2018, to adopt the LCAP template pursuant to the
Bagley-Keene Open Meetings Act process, with specified
restrictions, rather than the Administrative Procedures Act.
9. Repeal COE Funding Restrictions . Repeals restrictions on
COEs funding for special day classes. Authorizes COEs to
spend funds previously deposited as capital outlay reserves
for any purposes specified in its LCAP.
10.Make changes related to NSS . Clarifies that the SPI, not a
county superintendent of schools, calculates NSS funding for
qualifying districts. Expands the definition of a necessary
small high school for certain high schools for three years.
11.Revise Maximum Class Size Penalties Methodology . Revises
the methodology for assessing penalties for exceeding maximum
class size limits based upon the new grade-level funding
rates under LCFF.
12.Require Funding Pass-Through in Certain Districts to Support
the Continuation of Beginning Teacher Induction Services .
For the 2013-14 and 2014-15 fiscal years, requires the
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Alameda County Superintendent of Schools to withhold a
specified amount from the local control funding formula
apportionments of the Newark Unified School District, and
from those withheld funds, to allocate funding to four other
districts that previously received such amounts as funds
passed through by the Newark Unified School District (serving
as a fiscal agent) for purposes of beginning teacher
induction and training services.
13.Include Other Provisions . Makes other technical changes;
provides that, if the Commission on State Mandates determines
that this 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 : Appropriation: Yes Fiscal Com.: Yes
Local: No
PQ:k 6/15/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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