In the school year 1966-67, 283 districts in California (24% of all districts) serving 77% of the state's school children offered special classes for 16,307 educationally handicapped minors, 0.38% of the total school population. Upon a listing of both favorable areas and problems, recommendations were made to provide a current apportionment of state funds for all handicapped programs; initiate a grant program for teacher training in special education; evaluate current provisions of the school housing aid to exceptional children; provide state reimbursement for excess expenses (equitable funding of learning disabilities groups and extraordinary transportation costs); make a study of manpower needs of teaching exceptional children, including assessment of the capabilities and programs of colleges and universities; and extend the services of state and county departments of education to provide coordination and development of inservice training and consultation to teachers and programs for the educationally handicapped. Five appendixes give charts and tables on program growth, enrollment, and sources of teachers. (SN)