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Ed Tech K-12 Voucher: Memorandum

Letter Head: Jack O'Connell, State Superintendent of Public Instruction, Phone number 916-319-0800

Date: September 18, 2006

To: Superintendents or Administrators of Districts, County Offices of Education, State Special Schools, direct-funded charter schools, and Public School Districts with schools that may be eligible to receive benefits from the Settlement Agreement between Microsoft Corporation and California consumers

From: Jack O’Connell, State Superintendent of Public Instruction

This memo is being sent to inform you that the Education Technology K-12 Voucher Program request for application has been released and I encourage all eligible local education agencies to apply for these funds. This funding opportunity resulted from the settlement of a lawsuit between California consumers and Microsoft Corporation. The program will provide funding to eligible schools to acquire needed hardware, software, technical support and professional development that will enhance teaching and promote learning.

Amount Available in Vouchers to Eligible Districts and Schools

Under the terms of the Settlement Agreement, the first Cy Pres distribution amount is set at 66 and 2/3% of the difference between the Face Value amount of the Settlement ($1.1 billion) and the amount of Consumer Vouchers that are ultimately issued to California consumers and businesses. At this time, the actual dollar amount of vouchers that will ultimately be made available to the California schools in the first Cy Pres distribution cannot be determined because the amount depends on the value of approved claims made by California businesses and consumers.

The Settlement Administrator and the Parties to the Settlement are still working with large businesses that have submitted claims through this Settlement. Because some of those businesses had operations outside California, the Settlement Administrator must validate the claims and determine how many claimed licenses were actually in use in the state of California and eligible for Settlement benefits. This is complicated and time consuming and, although the Settlement Administrator and the Parties are working diligently, the process will not be finished until January 2007. Therefore, it is impossible to predict with certainty the amount that will ultimately be made available as vouchers in the first Cy Pres distribution. The Settlement Administrator and the Parties remain hopeful that the total amount of the Cy Pres distribution will exceed $400 million over the next six years. However, due to the ongoing nature of the claims process and the inherent uncertainties of the outcome of that process, the current estimate, provided by the Settlement Administrator and the Parties to the Settlement, of the Cy Pres distribution amount necessarily must be very conservative to insure that there are sufficient funds available from the Settlement to cover the valid claims of California consumers and businesses.

At this time, based upon the consumer and business claims approved to date, and based on a very conservative estimate of the amount in claims that may be approved as the process continues through the remainder of 2006, the Settlement Administrator and the Parties are estimating that the first Cy Pres distribution amount will be at least $250 million dollars. Again, the Parties anticipate that the actual amount of the distribution will ultimately be greater than this initial and necessarily conservative estimate. Schools, however, should not rely upon projections about the total amount of the Cy Pres distributions over the next six years for any planning purposes and should only budget based upon actual Cy Pres distributions as they are periodically announced -- such as the $250 million we are announcing at this time. As soon as the actual amount of consumer and business vouchers has been determined, the Parties and the Settlement Administrator will let the California Department of Education (CDE) know about the revised Cy Pres amount.

For more information on the amount of voucher funding available for eligible schools based on the $250 million dollar estimate, and how the amount will be recalculated when the Settlement Administrator and the Parties to the Settlement provide the CDE with the revised Cy Pres amount, please see the CDE Education Technology K-12 Voucher Program Web page at http://www.cde.ca.gov/ls/et/st/etv.asp.

Funding Eligibility

Public school districts that have a state-approved technology plan are required to apply on behalf of their eligible schools. County offices of education, direct-funded charter schools, and State Special Schools do not have to meet the state-approved technology plan requirement and will apply on their own behalf.

"Eligible schools" as defined in the Settlement Agreement means all public K-12 schools, including direct-funded charter schools, and county offices of education in which at least 40 percent of the attending students are eligible to receive free or reduced price meals through the National School Lunch Program. "Eligible Schools" also includes all public high schools in California that serve students from public elementary, middle and junior high schools at which at least 40 percent of the attending students are eligible to receive free or reduced price meals through the National School Lunch Program.

Data from the 2005-06 Consolidated Application, Page 45, will be used to determine if a school meets the 40 percent National School Lunch Program requirement.

COMPLETING THE RFA

The RFA is very simple and intentionally designed to take only about 15 minutes to complete. The sole narrative requirement is a two-paragraph statement describing how the vouchers will be utilized to support the implementation of a District’s State-approved Technology Plan. In the case of State Special Schools, Direct Funded Charters, and County Offices of Education, the requirement is a two-paragraph statement describing how the vouchers will be utilized to support the implementation of their technology plan or other technology planning document as required and cited in the narrative. For more detailed guidance on how to complete the RFA, please see the CDE Ed Tech K-12 Voucher: Planning Guidance Web page at http://www.cde.ca.gov/ls/et/st/etvapg.asp.

Purpose of the Program and Administration of the Program

The vouchers made available through this Settlement Agreement are to be used to assist districts with the implementation of their State-approved technology plan and to support education technology that fosters effective teaching and promotes student achievement in eligible schools that serve students in grades K-12.

The Education Technology K-12 Voucher Program is intended to be platform neutral. The vouchers distributed from the Cy Pres fund may be used for any platform that the school or district specifies.

Disbursement of the Cy Pres fund will be made in two disbursement cycles. The first distribution shall be made through the online RFA, and must be redeemed by the schools within six years after the Cy Pres benefits are made available. The next distribution, through a second application process at a later date, shall be two-thirds of the value of the issued, but unredeemed, Consumer Vouchers remaining after the redemption period has expired. Vouchers from the second distribution cycle must be redeemed within two years after the Cy Pres benefits are made available. The second distribution will only be available to eligible schools that were not funded in the first distribution.

The California Department of Education (CDE) will be responsible for issuing the RFA, certifying voucher recipients based on criteria contained within the RFA, and monitoring the program through end-of-program certification and site visitations. The Settlement Claims Administrator, selected by the Court, will be responsible for the issuing and redemption of vouchers. All districts that successfully complete the application will be funded.

Districts may choose to target vouchers to support specific school sites included in the application. Vouchers do not have to be distributed to all eligible school sites. However, vouchers may only be utilized at those school sites eligible to receive vouchers.

Please visit the CDE K-12 Voucher Web page at http://www.cde.ca.gov/ls/et/st/etv.asp for additional information and updates regarding this funding opportunity. You may also call the Settlement Claims Administrator’s Call Center at 800-419-5286 if you have more specific questions.
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