BILL NUMBER: AB 441 CHAPTERED 08/07/01 CHAPTER 155 FILED WITH SECRETARY OF STATE AUGUST 6,2001 PASSED THE ASSEMBLY JULY 23, 2001 PASSED THE SENATE JULY 22, 2001 AMENDED IN SENATE JULY 20, 2001 AMENDED IN ASSEMBLY MAY 23, 2001 INTRODUCED BY Assembly Member Simitian (Coauthors: Assembly Members Alquist, Ashburn, Bates, Bogh, Briggs, Bill Campbell, John Campbell, Canciamilla, Cedillo, Chan, Cohn, Corbett, Correa, Cox, Daucher, Dickerson, Dutra, Frommer, Goldberg, Keeley, Leach, Lowenthal, Maddox, Nakano, Nation, Robert Pacheco, Rod Pacheco, Papan, Pescetti, Reyes, Runner, Shelley, Strickland, Strom-Martin, Thomson, Vargas, Washington, Wayne, Wiggins, Wyland and Zettel) (Coauthors: Senators Alpert, Battin, Chesbro, Costa, Figueroa, Haynes, Karnette, Machado, Margett, McPherson, O'Connell, Oller, Scott, Sher, Speier, Torlakson, and Vincent) FEBRUARY 20, 2001 An act to add Section 42238.44 to the Education Code, relating to school finance, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. (Approved by Governor August 7, 2001. Filed with Secretary of State August 7, 2001.) I am signing Assembly Bill No. 441, however, I am vetoing the $40 million appropriated in the bill as there are sufficient funds remaining in the Proposition 98 Reversion Account to fund this measure. I am setting sufficient funding aside in that account for subsequent legislation to fulfill my commitment for $40 million of equalization funding. I also object to the intent statement in the bill to fully meet the funding targets by the 2006-2007 fiscal year. Any consideration for future equalization funding will be contingent on sufficient revenues to meet other, higher priorities. Because I have already approved nearly $2.3 billion in discretionary funding increases for school districts beyond statutory requirements in the prior two budgets, and because the state is already in compliance with court requirements for equalized funding, I do not believe that further equalization funding is of a sufficiently high priority to require the level of commitment intended by this statement when there may be more pressing priorities for school reforms that can help ensure increased student achievement. GRAY DAVIS, Governor LEGISLATIVE COUNSEL'S DIGEST AB 441, Simitian. School finance: revenue limits. Existing law requires each county superintendent of schools to make specified calculations to determine a base revenue limit for each school district in the county. This bill would, for the 2001-02 fiscal year, require the Superintendent of Public Instruction to compute an equalization adjustment for each school district so that no district's prior year base revenue limit per unit of average daily attendance is less than the prior year base revenue limit per unit of average daily attendance above which fall not more than 10% of the total statewide units of average daily attendance for the appropriate size and type of district. This bill would appropriate $40,000,000 from the General Fund to the Superintendent of Public Instruction for the purpose of implementing the equalization adjustment. The bill would require the appropriation to be included in the amount appropriated by the state in the 2001-02 fiscal year for the purpose of meeting the state's minimum funding obligation to school districts and community college districts under Section 8 of Article XVI of the California Constitution for that fiscal year. The bill would declare that it is to take effect immediately as an urgency statute. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. It is the intent of the Legislature, in enacting this act, to the extent that funding is available, to equalize revenue limits for school districts, as prescribed by Section 42238.44 of the Education Code, by the 2006-07 fiscal year, by enacting the Fairness in Education Funding Act. SEC. 2. Section 42238.44 is added to the Education Code, to read: 42238.44. (a) This section shall be known and may be cited as, the Fairness in Education Funding Act. (b) (1) For the 2001-02 fiscal year, the Superintendent of Public Instruction shall compute an equalization adjustment for each school district, so that no district's 2000-01 base revenue limit per unit of average daily attendance is less than the 2000-01 base revenue limit per unit of average daily attendance above which fall not more than 10 percent of the total statewide units of average daily attendance for each category of school district set forth in subdivision (c). (2) For purposes of this section, the district base revenue limit and the statewide average base revenue limit shall not include any amounts attributable to Section 45023.4, 46200, or 46201. (c) Subdivision (b) shall apply to the following school districts, which shall be grouped according to size and type as follows: District ADA Elementary .............. less than 101 Elementary .............. more than 100 High School ............. less than 301 High School ............. more than 300 Unified ................. less than 1,501 Unified ................. more than 1,500 (d) The Superintendent of Public Instruction shall compute a revenue limit equalization adjustment for each school district's base revenue limit per unit of average daily attendance as follows: (1) Multiply the amount computed for each school district pursuant to subdivision (b) by the average daily attendance used to calculate the district's revenue limit for the current fiscal year. (2) Divide the amount appropriated for purposes of this section for the then current fiscal year by the statewide sum of the amount computed pursuant to paragraph (1). (3) Multiply the amount computed for the school district pursuant to paragraph (1) of subdivision (b) by the amount computed pursuant to paragraph (2). (e) (1) For the purposes of this section, the 2000-01 statewide 90th percentile base revenue limit determined pursuant to paragraph (1) of subdivision (b), and the fraction computed pursuant to paragraph (2) of subdivision (d) for the 2000-01 second principal apportionment, shall be final, and shall not be recalculated at subsequent apportionments. The fraction computed pursuant to paragraph (2) of subdivision (d) shall not, under any circumstances, exceed 1.00. For purposes of determining the size of a school district pursuant to subdivision (c), county superintendents of schools, in conjunction with the Superintendent of Public Instruction, shall use school district revenue limit average daily attendance for the prior fiscal year as determined pursuant to Section 42238.5 and Article 4 (commencing with Section 42280). (2) For the purposes of calculating the size of a school district pursuant to subdivision (c), the Superintendent of Public Instruction shall include units of average daily attendance of any charter school for which the school district is the chartering agency. (3) For the purposes of computing the target amounts pursuant to subdivision (d), the Superintendent of Public Instruction shall count all charter school average daily attendance toward the average daily attendance of the school district that is the chartering agency. SEC. 3. If the appropriation in the 2001-02 fiscal year for purposes of Section 42238.44 of the Education Code is insufficient to provide funding equal to the amount computed pursuant to Section 42238.44 of the Education Code, the amount appropriated shall be allocated to school districts on a pro rata basis. SEC. 4. (a) The amount of forty million dollars ($40,000,000) is hereby appropriated from the General Fund to the Superintendent of Public Instruction for the purposes of Section 42238.44 of the Education Code, to be allocated to school districts on a pro rata basis. (b) For purposes of making the computations required by Section 8 of Article XVI of the California Constitution, the appropriation made by this section shall be deemed to be "General Fund revenues appropriated to school districts," as defined in subdivision (c) of Section 41202 of the Education Code for the 2001-02 fiscal year and be included within the "total allocations to school districts and community college districts from General Fund proceeds of taxes appropriated pursuant to Article XVIIB," as defined in subdivision (e) of Section 41202 of the Education Code for the 2001-02 fiscal year. SEC. 5. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to make the necessary statutory changes to implement the Budget Act of 2001 at the earliest possible time, it is necessary that this act take effect immediately.