Early Summer Policy Updates

Dear CAPSES Members,

As we approach the Legislature's July recess and the final stages of state budget negotiations, I wanted to share a brief update on several policy and regulatory developments that may affect nonpublic schools, nonpublic agencies, and the students we serve.

Please find below the issues most relevant to our sector that CAPSES is actively monitoring, engaging with, or advocating for.

Federal: moving federal special education programs from the U.S. Department of Education to the Department of Health and Human Services (HHS)

Please find below the position we share with NAPSEC and our CASA partners.

Why Special Education Must Remain within the U.S. Department of Education

NAPSEC is deeply concerned by the Administration's proposal to move federal special education programs from the U.S. Department of Education to the Department of Health and Human Services (HHS).

For more than 50 years, the Individuals with Disabilities Education Act (IDEA) has served as the foundation of educational opportunity for children and youth with disabilities. IDEA is an education law designed to ensure students have access to a free appropriate public education (FAPE), individualized supports, and meaningful opportunities to learn, participate, and succeed.

As the national association representing private special education schools, residential programs, and adult service providers, NAPSEC believes special education policy must remain connected to the education system it was created to support. Join NAPSEC and our partners in urging Congress to protect IDEA and preserve the coordinated federal leadership that students, families, schools, and providers rely on.

Special education is about educational opportunity

Students with disabilities deserve access to rigorous instruction, individualized supports, inclusive opportunities, and successful transitions to adulthood. While many students may also receive healthcare and related services, IDEA exists to advance educational outcomes and ensure that students can fully participate in school and community life.

Maintaining IDEA within the Department of Education reinforces the principle that students with disabilities are learners first and that educational opportunity, achievement, and inclusion should remain at the center of federal policy.

Effective implementation requires coordinated federal leadership

Students, families, educators, providers, schools, and state education agencies all rely on clear and consistent federal guidance to implement IDEA and protect the rights of individuals with disabilities.

Separating special education oversight and related responsibilities across multiple federal agencies risks creating confusion about roles, expectations, and accountability. Such a shift could lead to conflicting guidance from different agencies, slower responses to IDEA and Section 504 questions, reduced coordination among funding, technical assistance, research, and oversight functions, and greater inconsistency in how disability rights and educational supports are implemented across states and local communities.

Private providers, school districts, and state agencies depend on coordinated federal leadership to effectively serve students with disabilities. Fragmenting these responsibilities may create new barriers at a time when clarity, consistency, and collaboration are needed most.

The impact extends beyond K-12 education

Federal special education leadership influences teacher preparation, workforce development, evidence-based practices, transition planning, and outcomes for individuals with disabilities throughout their lives.

Strong educational systems help prepare students for employment, independence, postsecondary opportunities, and meaningful participation in their communities. Preserving the educational foundation of IDEA is essential to ensuring that individuals with disabilities have the support they need to reach their full potential.

NAPSEC's position

NAPSEC urges Congress and federal policymakers to preserve the Department of Education's role in administering and overseeing IDEA.

For more than five decades, IDEA has helped expand educational opportunity, strengthen accountability, and improve outcomes for millions of students with disabilities. The progress we have made toward inclusion, independence, employment, and full community participation should be strengthened—not placed at risk through the fragmentation of federal special education leadership.

Students with disabilities, their families, educators, and providers deserve a coordinated system that promotes educational opportunity, supports innovation and accountability, and continues to advance positive outcomes across the lifespan.

ESY: New Public Comment Cycle Opens

The State Board of Education has opened a new 45-day public comment period regarding proposed changes to Extended School Year (ESY) regulations.

CAPSES continues to oppose the proposed amendment to CCR Section 3043(d) as currently drafted.

While the proposal has evolved since the initial public comment period, we remain concerned that reducing the minimum number of ESY instructional days could negatively impact students whose progress depends on continuity, routine, and sustained instructional engagement.

Public Hearing info:  https://www.cde.ca.gov/re/lr/rr/extendedschoolyearnew.asp

July 29, 2026 at 9:00 a.m. (Virtual)

We encourage providers, educators, families, students, and community partners to participate in the public comment process.

At a minimum, CAPSES continues to urge the State to:

• Maintain the current 20-day minimum requirement for ESY programs; or

• Adopt clear safeguards ensuring that reductions in minimum instructional days:

  • Do not diminish meaningful access to ESY services;

  • Are not driven primarily by fiscal considerations;

  • Recognize regression and recoupment across academic, behavioral, functional, communication, and independent living domains.

ESY is not simply a matter of instructional minutes. For many students, continuity, structure, and consistent engagement are critical educational supports.

You can find a public comment template that aligns with our position here.

State Budget Update

Although the Legislature passed a budget by the constitutional deadline, negotiations continue between Governor Newsom and legislative leadership.

Several issues remain particularly relevant to our sector:

• Final Proposition 98 funding levels and repayment schedules;

• Budget trailer bill language affecting workforce and education programs;

• The proposed 4.31% "Super COLA";

• Paid pregnancy disability leave proposals tied to education funding;

• Workforce development investments intended to address educator shortages.

State Budget Update: Proposition 98 Remains the Key Issue

Although the Legislature passed a budget by the constitutional deadline, negotiations continue between Governor Newsom and legislative leadership to finalize the 2026-27 State Budget.

For CAPSES members, the most significant issue remains the treatment of Proposition 98 funding.

Proposition 98 Withholding

The Governor's May Revision calculated the Proposition 98 guarantee at approximately $125.1 billion for 2025-26 but proposed withholding roughly $3.9 billion of that amount and deferring repayment until a future fiscal year.

The Legislature's budget framework largely accepts the Governor's withholding proposal but includes language intended to provide greater certainty regarding when schools and community colleges would ultimately receive those funds.

In practical terms, both proposals recognize that the funding is owed under the Proposition 98 formula, but they differ on how and when the State should repay it.

While this issue may seem technical, the timing of Proposition 98 funding affects district budgets, financial planning, staffing decisions, and ultimately the resources available for special education services. Many LEAs continue to face fiscal pressures, and uncertainty surrounding future Proposition 98 payments may influence local budget decisions, contracting practices, and reimbursement discussions.

Proposition 98 Reserve

Another significant point of discussion is the State's Proposition 98 Reserve.

The Governor's proposal would leave approximately $10.3 billion in the reserve by the end of 2026-27, including a discretionary deposit of $1.6 billion.

The Legislature instead proposes using that discretionary deposit for other education investments while maintaining a reserve balance of approximately $9.5 billion.

The debate reflects differing views about whether available education funding should be set aside for future economic uncertainty or invested immediately in current educational priorities.

As budget negotiations continue, CAPSES is paying particular attention to:

• The final repayment schedule for withheld Proposition 98 funds;

• Budget trailer bill language that could affect implementation timelines;

• Workforce investments intended to address educator shortages;

• Funding decisions that may influence district budgeting and contracting practices;

• Potential impacts on special education services and provider reimbursement discussions.

We expect the final budget agreement and trailer bill package to provide much greater clarity in the coming weeks.

The fight is no longer over whether the $3.9 billion exists. Both sides acknowledge it exists. The fight is over when schools actually receive it.

California Bills to Watch

AB 65 (Aguiar-Curry)

Topic: Paid Pregnancy Disability Leave

Current Status: Advancing through the Senate; continues moving through policy committees.

AB 65 would provide up to 14 weeks of paid pregnancy disability leave for public school and community college employees. While the proposal currently applies to public employers, CAPSES is monitoring workforce implications across the broader education sector, including recruitment, retention, staffing availability, and labor market competition.

AB 1721 (Muratsuchi)

Topic: Comprehensive School Safety Plans

Current Status: Moving through Senate fiscal review.

AB 1721 would establish a statewide workgroup to review and recommend improvements to Comprehensive School Safety Plan requirements.

Although primarily focused on LEAs, school safety requirements often influence broader expectations across educational settings, including nonpublic schools.

AB 2365 (Sanchez)

Topic: Dismissals and Egregious Misconduct

Current Status: Active; amended following concerns raised by private school stakeholders.

Earlier versions of the bill included language that inappropriately treated private schools as though they were LEAs. Following advocacy from private school organizations, including CAPSO, the bill was amended to address those concerns.

AB 2796

Topic: Criminal History Information and Background Checks

Current Status: Active.

AB 2796 would expand access to criminal history background check tools and modernize the California Volunteer and Employee Criminal History Service (CalVECHS) framework.

The bill may provide private schools with additional screening tools while reducing certain administrative barriers related to employee and volunteer background checks.

CAPSES Assessment: positive and useful for solving our current hiring obstacles.

SB 1083 (Pérez)

Topic: Egregious Misconduct Investigations and Reporting

Current Status: Substantially amended; currently serving as a placeholder vehicle while policy discussions continue.

The bill originally proposed significant changes to investigation, reporting, and due process requirements related to employee misconduct allegations, including provisions affecting private school employers.

Although much of the original language has been removed, the bill remains important because it occupies the same policy space as SB 848 and may become a future vehicle for additional changes.

AB 1224 / AB 2490

Topic: Substitute Teacher Assignment Limits

Current Status:

• AB 1224 was vetoed by Governor Newsom in 2025.

• AB 2490 was originally introduced as a successor effort but was subsequently amended and no longer contains the 60-day substitute provisions.

While the specific proposal is no longer advancing, workforce shortages and substitute flexibility remain active policy discussions.

CAPSES Assessment: The bill is no longer the primary vehicle, but the workforce issue remains unresolved and likely to reemerge.

SB 848 Implementation Remains a Priority

While there are currently no major bills that significantly expand SB 848, implementation continues to be one of the most important compliance issues affecting private schools.

CAPSES is monitoring:

• Child abuse prevention training requirements;

• Professional boundaries and safety policies;

• Volunteer and contractor screening requirements;

• Develo

  pment of the statewide misconduct reporting system scheduled for implementation in 2027;

• Related proposals affecting employee misconduct investigations and reporting.

As implementation guidance evolves, CAPSES will continue identifying opportunities to provide technical assistance and advocate for practical implementation that recognizes the operational realities of NPS providers.

What CAPSES Is Working On

Over the coming weeks, CAPSES will continue:

• Coordinating advocacy and public comments regarding the ESY proposal;

• Reviewing budget trailer bill language affecting special education and workforce issues;

• Monitoring implementation of SB 848 and related safety legislation;

• Engaging with CDE, State SELPA, legislators, and partner organizations on NPS/NPA policy issues;

• Identifying opportunities to ensure NPS and NPA providers remain part of statewide conversations affecting students with disabilities.

As always, we will continue sharing updates as developments unfold and identify opportunities for member engagement when your voices can make a difference.

Thank you for your continued partnership and advocacy.

Sincerely,

Patricia Ortiz K.Executive DirectorCAPSES