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AB 401

California Career Technical Education Incentive Grant Program: annual adjustment: renewal grants.

2025-2026 Regular Session Introduced by Leticia Castillo and 2 co-sponsors

AB 401 would index CTE Incentive Grant funding to inflation and shift toward four-year grants, boosting program stability and purchasing power.

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
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Bill Summary · AB 401

AB 401 — California Career Technical Education Incentive Grant Program: annual adjustment & renewal grants

Author: Assemblymember Muratsuchi
Status: In committee; Held under submission (Assembly Appropriations) — last action 05/23/2025
Introduced: 02/04/2025

Purpose / Intent

AB 401 is intended to increase stability and preserve purchasing power of the California Career Technical Education (CTE) Incentive Grant Program by:
- Providing multi‑year automatic renewals for awarded grants (so programs have longer predictable funding), and
- Indexing future annual program funding to an inflation measure so available dollars keep pace with state/local government cost changes.

Key provisions and changes

  • Repeals and replaces Education Code section 53073 and amends section 53070.
  • Multi‑year (four‑year) grants:
    • The Department of Education must designate a portion of awarded grants as four‑year grants according to this schedule:
    • 2026–27: 25% of grants designated four‑year
    • 2027–28: 50%
    • 2028–29 and thereafter: 75%
    • The bill’s digest also references authority to designate up to 90% of grants as multi‑year and up to 10% for new applicants; the statutory text specifies the 25/50/75 schedule above.
    • The department may revoke a four‑year grant if:
    • The recipient declines it in writing;
    • The department finds the program was not implemented substantively as proposed in the original application; or
    • The recipient failed to meet the program’s matching fund requirement.
  • Annual funding adjustment (indexing):
    • For 2025–26 and each fiscal year thereafter, the total amount available to the department (subject to appropriation) will equal the prior fiscal year’s appropriation adjusted by the percentage change in the annual average Implicit Price Deflator for State and Local Government Purchases of Goods and Services (U.S. Dept. of Commerce). The specific comparison periods and May 10 data‑cutoff are set in statute.
  • Existing program features retained or clarified:
    • The program remains competitive and administered by the State Department of Education.
    • Historical appropriations are retained in the statute (e.g., $400M in 2015–16; $300M in 2021–22 through 2024–25), with the new indexing applying from 2025–26 forward.
    • Current matching requirement (historically $2 local match for every $1 from the program) remains enforceable and is a basis for revocation.

Who is affected

  • Primary: K–12 education entities eligible under the CTE Incentive Grant Program — school districts, county offices of education, charter schools, regional occupational centers/programs, and joint powers authorities that receive grants.
  • Secondary: Students benefiting from CTE pathways, local education budgets (due to matching requirements), and the State Department of Education (administration, monitoring, and potential recovery of funds).

Fiscal and procedural notes

  • The bill does not itself appropriate funds; it changes how the annual program total is calculated (indexation) and the mechanism for multi‑year grant designation.
  • Fiscal Committee: Yes (bill passed through Assembly Education with unanimous vote and was re‑referred to Appropriations; held under submission 05/23/2025).
  • Potential fiscal impact: indexing likely increases the program’s nominal budget over time relative to a flat $300M; multi‑year commitments may affect annual appropriation planning and the share available for new applicants.

Status & next steps

  • Introduced 02/04/2025; amended and passed out of Assembly Education (3/26/2025) and re‑referred to Appropriations. As of 05/23/2025, the bill is held under submission in Assembly Appropriations.

Compiled from official sources — confirm details with the bill’s official record.

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