BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 114
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 114 (Budget Committee)
          As Amended  June 28, 2011
          Majority vote.  Budget Bill Appropriation Takes Effect 
          Immediately
           
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          |ASSEMBLY:  |     |(February 22,   |SENATE: |23-16|(June 28,      |
          |           |     |2011)           |        |     |2011)          |
           ----------------------------------------------------------------- 
                    (vote not relevant)           

           SUMMARY  :  Contains necessary statutory and technical changes in 
          the area of education in order to implement changes to the 
          Budget Act of 2011.

           The Senate amendments  delete the Assembly version of this bill, 
          and instead:

          K-12 Provisions: 

          1)Update revenue limit deficit factors for school district and 
            county of education to reflect ongoing base reductions and 
            foregone cost-of-living adjustments for K-12 revenue limit 
            (general purpose) funding in 2011-12.  More specifically, 
            establishes a school district deficit factor of 19.754% and a 
            county office of education factor of 20.041% in 2011-12.  
            Deficit factors track lost revenue limit funding in recent 
            years with the intent of eventual restoration in future years. 
             

          2)Amend and repeals various sections of the Education, 
            Government, and Welfare and Institutions code to repeal the 
            state AB 3632 mandate program, which mandated counties to 
            provide mental health services to students with disabilities.  
            This mandate was suspended due to the veto of funding for the 
            AB 3632 mandate in the 2010-11 budget by Governor 
            Schwarzenegger.  As a result of this elimination, 
            responsibility for educationally related mental health 
            services, as required by federal law for student with 
            disabilities, is permanently shifted to schools.  Pursuant to 
            federal law, local educational agencies are required to update 
            the Individualized Education Plan of each child that will 
            experience a change in services as a result of this shift of 
            responsibility.








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          3)Amend an existing categorical funding formula to provide $127 
            per pupil to new, non-conversion charter schools established 
            after 2008-09.  This formula funding gives non-conversion 
            charters schools access to categorical funds included in the 
            categorical flexibility program that began in 2008-09.  
            Requires school districts to pass through either $127 per 
            pupil or another mutually agreed upon amount in categorical 
            funding to new conversion charter schools.   

          4)Dedicate surplus county office of education property tax 
            balances that are currently restricted, and cannot be expended 
            for any purpose, to other education programs thereby reducing 
            state General Fund costs.

          5)Renumber Education Code Section 60422.3 to Section 60049 to 
            correct a technical error in statute.  

          6)Requires, for the 2011-12 fiscal year (FY) only, local 
            educational agencies (LEAs), for the purposes AB 1200 budget 
            certification, to project the same level of revenue limit 
            funding  it received in the 2010-11 FY and maintain staffing 
            and program levels commensurate with this funding level. For 
            the 2011-12 FY only, eliminates the requirement for an LEA to 
            demonstrate that it can meet its financial obligations for two 
            subsequent FYs.   

           Ballot Proposition 98 and Realignment Language:
           
           7)Deem specified revenue collected in the 2011-12 fiscal year as 
            "non General Fund (GF)" revenue for the purposes of 
            calculating the Proposition 98 funding formula.  Specifies 
            this section is operative for the 2011-12 FY and subsequent 
            FYs as long as one or more ballot measures is approved by the 
            voters prior to November 17, 2012 to do the following:  makes 
            the "non GF" determination  and  provides funding for school 
            districts and community colleges in an amount equal to the 
            amount they would have received had the revenues been deemed 
            "GF" for the purposes of calculating the Proposition 98 
            funding formula.  

          8)If the voters do not approve one or more ballot measures prior 
            to November 17, 2012, (as referenced above), the Director of 
            Finance (DOF), in consultation with the Superintendent of 
            Public Instruction, shall determine the amount of funding 








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            school districts and community colleges would have received 
            under the Proposition 98 funding formula (had revenues been 
            deemed GF).  

             a)   Requires the amount of Proposition 98 funding determined 
               by DOF to be distributed for the 2012-13 FY though the 
               2016-17 FY according to the following: 

               i)     17.8% of total funding to local education agencies 
                 according to the following priorities: 

                  (1)       Reduce K-12 deferral; 

                  (2)       Repay K-12 mandate obligations; and, 

                  (3)       Other one-time purposes specified in statute 
                    enacted after the effective date of this bill. 

               ii)    2.2% of total funding to community colleges 
                 according to the following priorities:

                  (1)       Reduce community college deferrals;

                  (2)        Repay community college mandate obligations; 
                    and,

                  (3)       Other one-time purposes specified in statute 
                    enacted after the effective date of this bill. 

          Child Care and Development Programs: 

          9)Reduce the across-the-board unallocated reduction to all the 
            child care services from 15% to 11%, effective July 1, 2011. 

          10)Reinstate child care services for 11- to 12-year olds which 
            had been scheduled for elimination by July 1, 2011. 

          11)Amend the before and after school programs to provide 
            preferred placement for children who are 11 or 12-years of 
            age, as originally established before the March budget 
            changes. 

          12)Repeal the increase family fee schedule by 10%, which had 
            been scheduled for implementation by July 1, 2011. 









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          13)Establish findings and declarations to clarify that the State 
            Preschool Program and the After School Education and Safety 
            Program fall within the Proposition 98 guarantee and that 
            other child care programs that are funded from this 
            appropriation do not count toward the Proposition 98 minimum 
            guarantee.

          14)Make statutory changes that conform to the provision of state 
            General Funds - instead of Proposition 98 funds previously 
            provided - for most child care programs in 2011-12 in the 
            budget bill.  Proposition 98 funding would be "rebenched" as a 
            result of this funding shift.  The budget bill continues 
            Proposition 98 funding for part-day preschool programs in 
            2011-12.  

          Higher Education: 

          15)Suspend two mandates (Response Procedures and Student 
            Records), both of which are already required by federal law.

          16)Make a technical correction to ensure that the institutions 
            that become ineligible due to their Three-Year Cohort Default 
            Rate exceeding the established threshold for the 2012-13 
            academic year and every academic year thereafter, shall be 
            ineligible for initial and renewal Cal Grant awards at that 
            institution. 

          17)Eliminate duplicative audits required biennially at each of 
            the 23 California State University (CSU) campuses and instead 
            requires a system-wide audit.

          Trigger Reductions: 

          The following changes will be pursuant to Senate Bill 96 or 
          Assembly Bill 121 of the 2011-12 Regular Session, as applicable: 


          18)Eliminate local education agencies authority to conduct an 
            employee layoff process during the time period between five 
            days after the enactment of the Budget Act and August 15 for 
            the 2011-12 FY only.   

           19)Reduce the number of instructional days by up to seven days 
            and reduces the home-to-school transportation program by $238 
            million, if the state receives forecasted revenue projections 








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            less than $2 billion pursuant to the determination made by the 
            Director of Finance.  This requirement becomes operative 
            February 1, 2012, and is only operative for the 2011-12 FY. 

          20)Approve an increase across the board reduction to all child 
            care programs for a total of $23 million in savings.  This 
            reduction would be effective January 1, 2012, if the Director 
            of Finance determines by December 15, 2011, that the 
            Legislative Analyst's November 2011 or the Department of 
            Finance's December 2011 revenue forecast is less than $85.9 
            billion.    

          21)Increase the community college student fee from $36 per unit 
            to $46 per unit, commencing in the winter term of the 2011-12 
            academic year.  This student fee increase would be effective 
            January 1, 2012, if the Director of Finance determines by 
            December 15, 2011, that the Legislative Analyst's November 
            2011 or the Department of Finance's December 2011 revenue 
            forecast is less than $85.9 billion.  

          22)Add an appropriation allowing this bill to take effect 
            immediately.

           AS PASSED BY THE ASSEMBLY  , this bill expresses the intent of the 
          Legislature to enact statutory changes relating to the 2011 
          Budget Act.


           Analysis Prepared by  :    Sara Bachez / BUDGET / (916) 319-2099



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