BILL NUMBER: AB 1802	CHAPTERED
	BILL TEXT

	CHAPTER  79
	FILED WITH SECRETARY OF STATE  JULY 19, 2006
	APPROVED BY GOVERNOR  JULY 19, 2006
	PASSED THE SENATE  JUNE 27, 2006
	PASSED THE ASSEMBLY  JUNE 27, 2006
	AMENDED IN SENATE  JUNE 27, 2006

INTRODUCED BY   Committee on Budget (Laird (Chair), Arambula,
Bermudez, Chan, Coto, De La Torre, Evans, Goldberg, Hancock,
Montanez, Mullin, Nava, Parra, Pavley, and Wolk)

                        JANUARY 10, 2006

   An act to amend Sections 2558.46, 37254, 41203.1, 42238,
42238.146, 44244, 47632, 47634.1, 49430.5, 56836.155, 56836.21,
56867, 62000.2, 69616, 69616.1, 69616.2, 69616.3, 69616.4, 69616.5,
69741.5, 69744, 76300, and 89721 of, to amend and renumber the
heading of Article 5.6 (commencing with Section 69616) of Chapter 2
of Part 42 of, and to add Sections 16236, 42238.48, and 69746.5 to,
to add Article 4.5 (commencing with Section 52378) to Chapter 9 of
Part 28 of, to repeal Sections 44242.3, 69747, and 69748 of, to
repeal Article 4 (commencing with Section 54040) of Chapter 1 of Part
29 of, and to repeal and add Article 2 (commencing with Section
54020) of Chapter 1 of Part 29 of, the Education Code, relating to
education, making an appropriation therefor, and declaring the
urgency thereof, to take effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1802, Committee on Budget  Education: programs: finance.
   (1) Existing law requires a revenue limit to be calculated for
each county superintendent of schools, and requires the revenue limit
to be adjusted for various factors and to be reduced, as specified.
Existing law further reduces the revenue limit for the 2005-06 and
2006-07 fiscal years by a deficit factor of 0.898%.
   This bill would delete the reduction of the revenue limit for the
2006-07 fiscal year.
   (2) Existing law designates a source of funds and requires the
State Allocation Board to expend those funds, up to a specified
maximum amount, for the acquisition of portable school and classroom
buildings.
   This bill would authorize the board to allocate any amount of
those funds that is in excess of the amounts needed for the
administration of those provisions to any of several specified state
funds related to school facilities.
   (3) Existing law provides specified funding for eligible pupils,
as defined, who are required to pass the high school exit
examination, to be used for intensive instruction and services for
those pupils. Existing law provides that, for the 2005-06 fiscal
year, an eligible pupil does not include a pupil who receives
services related to passage of that examination pursuant to a
specified statute. Existing law requires the Superintendent of Public
Instruction to rank schools on the basis of the percentage of
eligible pupils and to apportion $600 per eligible pupil to school
districts on behalf of those ranked schools until the funds are
exhausted.
   This bill would, instead, require the Superintendent to determine
and apportion to each school district a per pupil rate of funding for
pupils enrolled in grade 12, as specified. The bill would require
the Superintendent, if the funds are not exhausted after the
apportionment for pupils in grade 12, to determine and apportion to
each school district a per pupil rate of funding for pupils enrolled
in grade 11, as specified. The bill would provide that the per pupil
rate for either of grades 11 or 12 may not exceed $500. The bill
would provide that the amount per eligible pupil be increased
annually by the percentage determined pursuant to a specified
provision. The bill would delete the provision regarding an eligible
pupil not including a pupil who receives specified services.
   (4) Existing law requires, for the 1990-91 fiscal year and each
fiscal year thereafter, that moneys to be applied by the state for
the support of school districts and community college districts be
distributed in accordance with certain calculations governing the
proration of those moneys among the 3 segments of public education.
Existing law makes this provision inapplicable to the fiscal years
between the 1992-93 and 2005-06 fiscal years, inclusive.
   This bill would, in addition, make this provision inapplicable to
the 2006-07 fiscal year.
   (5) Existing law requires the county superintendent of schools to
determine a revenue limit for each school district in the county.
Existing law requires the base revenue limit for a fiscal year to be
determined by adding to the base revenue limit for the prior fiscal
year certain amounts.
   This bill would require a specified equalization adjustment to be
added for the 2006-07 fiscal year.
   (6) Existing law requires a revenue limit to be calculated for
each school district and each county superintendent of schools and
requires the amount of the revenue limit to be adjusted for various
factors.
   This bill would, for the 2006-07 fiscal year, require the
Superintendent to compute an equalization adjustment for each school
district so that the prior year base revenue limit per unit of
average daily attendance of a school district is not 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 school
district.
   The bill would appropriate $200,000,000 from the General Fund to
the Superintendent for the 2006-07 fiscal year for the purposes of
this equalization, to be allocated to school districts on a prorated
basis. The bill would provide that for the purposes of making the
computations required by Section 8 of Article XVI of the California
Constitution, these amounts are General Fund revenues appropriated
for school districts for the 2006-07 fiscal year.
   (7) Existing law requires, for the 2005-06 and 2006-07 fiscal
years, the revenue limit for each school district to be reduced by a
deficit factor of 0.892%. Existing law requires the revenue limit
computation for the 2007 -08 fiscal year to be made as if the revenue
limits for the 2003-04, 2004-05, 2005-06, and 2006-07 fiscal years
had been determined without being reduced.
   This bill would delete the requirement to reduce the revenue limit
for a school district for the 2006-07 fiscal years by a 0.892%
deficit factor, and would require the revenue limit computation for
the 2006-07 fiscal year to be made as if the revenue limits for the
2003-04, 2004-05, and 2005-06 fiscal years had been determined
without being reduced.
   (8) Existing law authorizes the Committee of Credentials to
conduct an initial review, as provided, regarding an allegation of
misconduct of an applicant for, or holder of, a credential. Existing
law requires a formal review to be held no later than 6 months after
the commencement of the initial review and requires the committee to
make its recommendation in writing and to deliver a copy of the
recommendation to the credentialholder or applicant personally or
sent to him or her by mail within 14 days after the formal review.
   This bill would instead require that the mailing of a copy of the
recommendation to the credentialholder or applicant, if applicable,
be done by certified mail, as specified.
   (9) Existing law requires an applicant, as defined, seeking a
credential, who is subject to investigation by the Committee of
Credentials, to receive notice of the investigation and an
opportunity to respond to the allegations in writing. Existing law
requires a summary of the alleged misconduct and any response from
the applicant, as defined, to be presented to the Committee of
Credentials. Existing law requires the Committee of Credentials to
grant or recommend denial of the application based on the information
discovered during the investigation and the response of the
applicant, if any. Existing law authorizes the applicant to appeal
the recommendation of the committee to deny the application.
   This bill would repeal those provisions.
   (10) Existing law authorizes the county superintendent of schools
of each county, with the consent of the State Board of Education, to
establish and maintain, or with one or more counties to establish and
maintain, a regional occupational center or regional occupational
program to provide education and training in career technical
courses.
   This bill would establish the Supplemental School Counseling
Program and require the governing board of a school district that
maintains any of grades 7 to 12, inclusive, as a condition of
receiving funds appropriated for purposes of that program, to adopt a
counseling program at a public meeting that includes, among other
things, a provision for a counselor to meet with each pupil, as
specified, to explain the academic and deportment records of the
pupil, his or her educational options, the coursework and academic
progress needed for satisfactory completion of middle or high school,
and the availability of career guidance activities. The bill would
provide that the educational options explained at the meeting may
include vocational programs, including regional occupational centers
and programs. The bill would require that a school district that
adopts a program pursuant to that authority to assign first priority
for counseling services to pupils who have failed the high school
exit examination, are at risk of failing the examination, or are not
earning credits at a rate that will enable them to graduate from high
school with their class. The bill would require that funds
appropriated in the annual Budget Act for purposes of that program be
allocated to school districts according to specified criteria.
   (11) Existing law increases the reimbursement a school receives
for free and reduced price meals sold or served to pupils in
elementary or middle schools to $0.23, contingent upon the
appropriation of moneys on or before January 1, 2004, for that
purpose. Existing law provides that each elementary and middle school
shall receive a reimbursement of $0.10 for meals sold at full price.

   This bill would, instead, increase the reimbursement for free and
reduced price meals to $0.21 and would delete the provision that
makes the increase contingent upon the appropriation of moneys for
that purpose. The bill would delete the provision regarding
reimbursement for meals sold at full price.
   (12) Existing law authorizes the allocation of economic impact aid
funding to support educationally disadvantaged youth programs and
bilingual education. Existing law provides that those provisions
become inoperative on June 30, 1987.
   This bill would repeal and replace the existing provisions
regarding the calculation and allocation of economic impact aid to
require the Superintendent to determine an economic impact
aid-eligible pupil count and calculate an amount of economic impact
aid for each school district for the 2006-07 fiscal year and each
fiscal year thereafter, as specified. The bill would delete that
inoperative date with regard to those provisions. The bill would, in
addition to the calculation and allocation of economic impact aid,
require the Superintendent to calculate and allocate a supplemental
adjustment for the 2006-07 fiscal year and to add to the economic
impact aid per pupil amount for the 2007-08 fiscal year, as
specified.
   (13) Existing law provides for the calculation and allocation of
additional funds to supplement the economic impact aid for a limited
number of school districts with high concentrations of limited- and
non-English-speaking pupils and pupils in poverty to ensure funding
for appropriate educational services.
   This bill would repeal those provisions.
   (14) Existing law adjusts funding for individuals with exceptional
needs based on an incidence multiplier, as defined, for each special
education local plan area.
   This bill would continue the current special education incidence
factor formula through the 2006-07 fiscal year.
   (15) Existing law requires the State Department of Education to
administer an extraordinary cost pool to protect special education
local plan areas from the extraordinary costs associated with single
placements in nonpublic, nonsectarian schools, as specified.
   This bill would recast that provision and authorize special
education local plan areas to submit claims for the costs of special
education and related services for pupils who reside in licensed
children's institutions.
   (16) Existing law requires the State Department of Education and
the California State University to enter into an interagency
agreement under which the Center for the Study of Correctional
Education, would provide technical assistance to the department
regarding compliance with state and federal laws and regulations
regarding special education at the Department of the Youth Authority.
Existing law requires the department, by December 1, 2006, to submit
a report to the Legislature on the usefulness of the services
received from the center pursuant to the interagency agreement.
Existing law provides that these provisions become inoperative on
January 1, 2007, and repeals them on that date.
   This bill would extend those inoperative and repeal dates to July
1, 2007.
   (17) Existing law establishes the State Nursing Assumption Program
of Loans for Education (SNAPLE), administered by the Student Aid
Commission, under which any person enrolled in an institution of
postsecondary education and participating in that loan assumption
program is eligible to receive a conditional warrant for loan
assumption, to be redeemed upon becoming employed as a full-time
nursing faculty member at a California college or university.
   The existing SNAPLE act establishes, among other things,
eligibility requirements, including the receipt of a graduate degree
from an accredited, participating institution before loan assumption
payments may be made, limits each participant in the program to one
loan assumption agreement, and provides for a progressive assumption
of the amount of the loan over 3 consecutive years of teaching, up to
a total loan assumption of $25,000. The existing SNAPLE act requires
the commission to report annually to the Legislature, and states the
intent of the Legislature that, commencing with the 2006-07 fiscal
year, funding necessary for the administration of the program shall
be included within the annual budget of the commission.
   This bill would amend the SNAPLE act to authorize the award of
loan assumption agreements under the program to undergraduate
students and to authorize the making of loan assumption payments to
applicants who have taught on a part-time basis for the equivalent of
3 full-time academic years. The bill would authorize the extension
of the term of a loan assumption agreement if a natural disaster
prevents a program participant from completing one of the years of
required teaching service.
   (18) Existing law establishes the Student Aid Commission as the
primary state agency for the administration of state-authorized
student financial aid programs available to students attending all
segments of postsecondary education. Existing law establishes the
Public Interest Attorney Loan Repayment Program, under the
administration of the commission, as a student loan repayment program
for licensed attorneys who practice or agree to practice in public
interest areas of the law, as defined, and who meet other designated
criteria. Under the program, the Public Interest Attorney Loan
Repayment Endowment Account, consisting of funds appropriated by the
Legislature for the program and private contributions to the program,
is established in the State Treasury. Existing law authorizes the
Treasurer to invest, reinvest, manage, contract, sell, or exchange
money in the account, as specified.
   This bill would require the commission to submit an annual written
report to the Legislature, including specified data, regarding the
program. The bill would delete the provisions establishing the Public
Interest Attorney Loan Repayment Endowment Account and authorizing
the Treasurer to invest, reinvest, manage, contract, sell, or
exchange money in the account. The bill would make various
nonsubstantive technical and conforming revisions in provisions
relating to the program.
   (19) Existing law requires the governing board of each community
college district to charge each student a fee of $26 per unit per
semester, effective with the fall term of the 2004-05 academic year.

   This bill would reduce that fee to $20 per unit per semester,
effective with the spring term of the 2006-07 academic year.
   (20) Existing law establishes the California State University
under the administration of the Trustees of the California State
University. Existing law requires the chief fiscal officer of the
university to deposit and maintain in trust accounts specified moneys
that the university receives.
   This bill would require the chief fiscal officer of the university
to deposit and maintain in these trust accounts moneys collected,
pursuant to a provision of existing law that authorizes the trustees
to require persons to pay fees, rents, deposits, and charges for
services, facilities, or materials provided by the trustees to these
persons, as a higher education fee or other income from students of
any campus of the university, or from other persons. The bill would
grant the Controller the authority to audit the expenditure of those
fees and income.
   (21) This bill would appropriate $388,283,000 from the General
Fund to the State Department of Education for expenditure during the
2007-08 fiscal year according to a specified schedule. The bill would
provide that for purposes of satisfying the minimum annual funding
obligation for school districts and community college districts
required under the California Constitution, those funds are General
Fund revenues appropriated for school districts.
   (22) This bill would appropriate $200,000,000 to the Board of
Governors of the California Community Colleges for apportionments to
community college districts, for expenditure during the 2007-08
fiscal year, to be expended in accordance with the requirements
specified in a schedule of a local assistance appropriation for
community colleges in a prescribed item of the Budget Act of 2006.
The bill would provide that the amount of this appropriation would be
applied, as specified, for the 2007-08 fiscal year, for the purposes
of the minimum funding requirement for school districts and
community college districts in Section 8 of Article XVI of the
California Constitution.
   (23) This bill would make specified funds appropriated pursuant to
the Budget Act of 2006 available for liquidation through July 31,
2009. The bill would revert the funds unexpended after that date to
the Proposition 98 Reversion Account.
   (24) Existing law, commencing with the 2006-07 fiscal year,
annually appropriates $150,000,000 from the General Fund to the
Controller for allocation to school districts and community college
districts for the purpose of discharging in full the outstanding
balance of the state minimum funding obligation to school districts
and community college districts, as provided.
   This bill, notwithstanding that provision, would provide that
$16,811,000 of the funds appropriated in a specified statute and
$133,189,000 appropriated in this bill are in lieu of the
$150,000,000 that would have otherwise been appropriated for the
2006-07 fiscal year and that specified amounts appropriated in this
bill are in lieu of the $150,000,000 that would have otherwise been
appropriated for the 2007-08 fiscal year.
   (25) This bill would provide that the cost-of-living adjustment
for specified items of the Budget Act of 2006 is 5.92%, and that all
funds appropriated in those items are in lieu of the amounts that
would otherwise be appropriated pursuant to any other law.
   (26) This bill would appropriate $350,000,000 from the General
Fund to the Superintendent for the 2006-07 fiscal year for purposes
of a specified provision to be allocated to school districts on a
prorated basis. The bill would provide that for purposes of
satisfying the minimum annual funding obligation for school districts
required under the California Constitution, those funds are General
Fund revenues appropriated for school districts for the 2006-07
fiscal year.
   (27) This bill would appropriate $2,305,695,000 from the General
Fund for the 2005-06 fiscal year according to a specified schedule.
The bill would provide that for purposes of satisfying the minimum
annual funding obligation for school districts and community college
districts required under the California Constitution, those funds are
General Fund revenues appropriated for school districts and
community college districts for the 2005-06 fiscal year.
   (28) This bill would appropriate $283,189,000 from the General
Fund for transfer to the Controller to pay claims, including
interest, for the reimbursement of costs mandated by the state
submitted by school districts, county offices of education, and
community college districts for the 1995-96 to 2004-05 fiscal years,
inclusive, according to a specified order of priority. The bill would
provide that for purposes of satisfying the minimum annual funding
obligation for school districts and community college districts
required under the California Constitution, those funds are General
Fund revenues appropriated for school districts and community college
districts for specified fiscal years.
   (29) This bill would make other technical, clarifying, and
conforming changes.
  (30) This 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.  Section 2558.46 of the Education Code is amended to
read:
   2558.46.  (a) (1) For the 2003-04 fiscal year, the revenue limit
for each county superintendent of schools determined pursuant to this
article shall be reduced by a 1.195 percent deficit factor.
   (2) For the 2004-05 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced by a 0.323 percent deficit factor.
   (3) For the 2003-04 and 2004-05 fiscal years, the revenue limit
for each county superintendent of schools determined pursuant to this
article shall be further reduced by a 1.826 percent deficit factor.

   (4) For the 2005-06 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be further reduced by a 0.898 percent deficit factor.
   (b) In computing the revenue limit for each county superintendent
of schools for the 2006-07 fiscal year pursuant to this article, the
revenue limit shall be determined as if the revenue limit for that
county superintendent of schools had been determined for the 2003-04,
2004-05, and 2005-06 fiscal years without being reduced by the
deficit factors specified in this section.
  SEC. 2.  Section 16236 is added to the Education Code, to read:
   16236.  Notwithstanding any other provision of law, the board may
allocate any amount of the funds designated for purposes of this
article that is in excess of the amounts needed for the
administration of this article to any of the following:
   (a) The Emergency School Classroom Fund for allocation by the
board for any purpose authorized pursuant to that fund.
   (b) The 1998 State School Facilities Fund for allocation by the
board for any purpose authorized to that fund.
   (c) The 2002 State School Facilities Fund for allocation by the
board for any purpose authorized to that fund.
   (d) The 2004 State School Facilities Fund for allocation by the
board for any purpose authorized to that fund.
   (e) If the voters approve the Kindergarten-University Public
Education Facilities Bond Act of 2006 at the November 7, 2006,
statewide general election, the 2006 State School Facilities Fund for
allocation by the board for any purpose authorized to that fund.
   (f) The State School Deferred Maintenance Fund for allocation by
the board for any purpose authorized pursuant to that fund. The board
may utilize up to 100 percent of the funds transferred by the board
to the State School Deferred Maintenance Fund pursuant to this
section for funding extreme hardship critical projects.
  SEC. 3.  Section 37254 of the Education Code is amended to read:
   37254.  (a) For purposes of this section, "eligible pupil" means a
pupil who is required to pass the California High School Exit
Examination for high school graduation pursuant to Chapter 8
(commencing with Section 60850) of Part 33, and who has failed one or
both parts of that examination.
   (b) (1) From the funds appropriated for purposes of this section
in the annual Budget Act or other statute, the Superintendent shall
determine a per pupil rate of funding by dividing the total number of
eligible pupils in grade 12 reported by school districts in
accordance with paragraph (4) of subdivision (d) by the total amount
of funds appropriated for purposes of this section. The
Superintendent shall then apportion to each school district an amount
equal to the per pupil rate determined pursuant to this paragraph
multiplied by the number of eligible grade 12 pupils reported
pursuant to paragraph (4) of subdivision (d).
   (2) If funds appropriated for purposes of paragraph (1) are not
exhausted after the apportionment for eligible pupils in grade 12 is
made, the Superintendent shall determine a per pupil rate of funding
by dividing the total number of eligible pupils in grade 11 reported
by school districts in accordance with paragraph (4) of subdivision
(d) by the total amount of funds appropriated for purposes of this
section remaining after the apportionment pursuant to paragraph (1)
has been made. The Superintendent shall apportion to each school
district an amount equal to the per pupil rate determined pursuant to
this paragraph multiplied by the number of eligible grade 11 pupils
reported pursuant to paragraph (4) of subdivision (d). The per pupil
amount for grade 12 may not exceed five hundred dollars ($500) in the
2006-07 fiscal year. The maximum per pupil rate of funding for grade
12 shall be increased annually by the percentage determined in
paragraph (2) of subdivision (b) of Section 42238.1
   (c) (1) The funds described in subdivision (b) shall be used to
provide intensive instruction and services designed to help eligible
pupils pass the California High School Exit Examination.
   (2) Intensive instruction and services may be provided during the
regular schoolday provided that they do not supplant the instruction
of the pupil in the core curriculum areas as defined in paragraph (5)
of subdivision (a) of Section 60603, or physical education
instruction.
   (3) Intensive instruction and services may include, but are not
limited to, all of the following:
   (A) Individual or small group instruction.
   (B) The hiring of additional teachers.
   (C) Purchasing, scoring, and reviewing diagnostic assessments.
   (D) Counseling.
   (E) Designing instruction to meet specific needs of eligible
pupils.
   (F) Appropriate teacher training to meet the needs of eligible
pupils.
   (d) As a condition of receiving funds pursuant to subdivision (c),
the school district shall accomplish all of the following:
   (1) Ensure that each eligible pupil receives an appropriate
diagnostic assessment to identify that pupil's areas of need.
   (2) Ensure that each pupil receives intensive instruction and
services based on the results of the diagnostic assessment.
   (3) Demonstrate that funds will be used to supplement and not
supplant existing services.
   (4) Provide to the Superintendent, in a manner and by a date
certain determined by the Superintendent, the number of eligible
pupils at each high school in the school district.
   (5) Submit an annual report to the Superintendent in a manner
determined by the Superintendent that describes the number of pupils
served for each type of service provided, and the number of pupils in
the school district who successfully pass the high school exit
examination by each type of service provided.
  SEC. 4.  Section 41203.1 of the Education Code is amended to read:

   41203.1.  (a) For the 1990-91 fiscal year and each fiscal year
thereafter, allocations calculated pursuant to Section 41203 shall be
distributed in accordance with calculations provided in this
section. Notwithstanding Section 41203, and for the purposes of this
section, school districts, community college districts, and direct
elementary and secondary level instructional services provided by the
State of California shall be regarded as separate segments of public
education, and each of these three segments of public education
shall be entitled to receive respective shares of the amount
calculated pursuant to Section 41203 as though the calculation made
pursuant to subdivision (b) of Section 8 of Article XVI of the
California Constitution were to be applied separately to each segment
and the base year for the purposes of this calculation under
paragraph (1) of subdivision (b) of Section 8 of Article XVI of the
California Constitution were based on the 1989-90 fiscal year.
Calculations made pursuant to this subdivision shall be made so that
each segment of public education is entitled to the greater of the
amounts calculated for that segment pursuant to paragraph (1) or (2)
of subdivision (b) of Section 8 of Article XVI of the California
Constitution.
   (b) If the single calculation made pursuant to Section 41203
yields a guaranteed amount of funding that is less than the sum of
the amounts calculated pursuant to subdivision (a), the amount
calculated pursuant to Section 41203 shall be prorated for the three
segments of public education.
   (c) Notwithstanding any other law, this section does not apply to
the 1992-93 to 2006-07 fiscal years, inclusive.
  SEC. 5.  Section 42238 of the Education Code is amended to read:
   42238.  (a) For the 1984-85 fiscal year and each fiscal year
thereafter, the county superintendent of schools shall determine a
revenue limit for each school district in the county pursuant to this
section.
   (b) The base revenue limit for a fiscal year shall be determined
by adding to the base revenue limit for the prior fiscal year the
following amounts:
   (1) The inflation adjustment specified in Section 42238.1.
   (2) For the 1995-96 fiscal year, the equalization adjustment
specified in Section 42238.4.
   (3) For the 1996-97 fiscal year, the equalization adjustments
specified in Sections 42238.41, 42238.42, and 42238.43.
   (4) For the 1985-86 fiscal year, the amount received per unit of
average daily attendance in the 1984-85 fiscal year pursuant to
Section 42238.7.
   (5) For the 1985-86, 1986-87, and 1987-88 fiscal years, the amount
per unit of average daily attendance received in the prior fiscal
year pursuant to Section 42238.8.
   (6) For the 2004-05 fiscal year, the equalization adjustment
specified in Section 42238.44.
   (7) For the 2006-07 fiscal year, the equalization adjustment
specified in Section 42238.48.
   (c) Except for districts subject to subdivision (d), the base
revenue limit computed pursuant to subdivision (b) shall be
multiplied by the district average daily attendance computed pursuant
to Section 42238.5.
   (d) (1) For districts for which the number of units of average
daily attendance determined pursuant to Section 42238.5 is greater
for the current fiscal year than for the 1982-83 fiscal year, compute
the following amount, in lieu of the amount computed pursuant to
subdivision (c):
   (A) Multiply the base revenue limit computed pursuant to
subdivision (c) by the average daily attendance computed pursuant to
Section 42238.5 for the 1982-83 fiscal year.
   (B) Multiply the lesser of the amount in subdivision (c) or 1.05
times the statewide average base revenue limit per unit of average
daily attendance for districts of similar type for the current fiscal
year by the difference between the average daily attendance computed
pursuant to Section 42238.5 for the current and 1982-83 fiscal
years.
   (C) Add the amounts in subparagraphs (A) and (B).
   (2) This subdivision shall become inoperative on July 1, 1998.
   (e) For districts electing to compute units of average daily
attendance pursuant to paragraph (2) of subdivision (a) of Section
42238.5, the amount computed pursuant to Article 4 (commencing with
Section 42280) shall be added to the amount computed in subdivision
(c) or (d), as appropriate.
   (f) For the 1984-85 fiscal year only, the county superintendent
shall reduce the total revenue limit computed in this section by the
amount of the decreased employer contributions to the Public
Employees' Retirement System resulting from enactment of Chapter 330
of the Statutes of 1982, offset by any increase in those
contributions, as of the 1983-84 fiscal year, resulting from
subsequent changes in employer contribution rates.
   (g) The reduction required by subdivision (f) shall be calculated
as follows:
   (1) Determine the amount of employer contributions that would have
been made in the 1983-84 fiscal year if the applicable Public
Employees' Retirement System employer contribution rate in effect
immediately prior to the enactment of Chapter 330 of the Statutes of
1982 was in effect during the 1983-84 fiscal year.
   (2) Subtract from the amount determined in paragraph (1) the
greater of subparagraph (A) or (B):
   (A) The amount of employer contributions that would have been made
in the 1983-84 fiscal year if the applicable Public Employees'
Retirement System employer contribution rate in effect immediately
after the enactment of Chapter 330 of the Statutes of 1982 was in
effect during the 1983-84 fiscal year.
   (B) The actual amount of employer contributions made to the Public
Employees' Retirement System in the 1983-84 fiscal year.
   (3) For purposes of this subdivision, employer contributions to
the Public Employees' Retirement System for either of the following
shall be excluded from the calculation specified above:
   (A) Positions supported totally by federal funds that were subject
to supplanting restrictions.
   (B) Positions supported, to the extent of employer contributions
not exceeding twenty-five thousand dollars ($25,000) by any single
educational agency, from a revenue source determined on the basis of
equity to be properly excludable from the provisions of this
subdivision by the Superintendent with the approval of the Director
of Finance.
   (4) For accounting purposes, the reduction made by this
subdivision may be reflected as an expenditure from appropriate
sources of revenue as directed by the Superintendent.
   (h) The Superintendent shall apportion to each school district the
amount determined in this section less the sum of:
   (1) The district's property tax revenue received pursuant to
Chapter 3 (commencing with Section 75) and Chapter 6 (commencing with
Section 95) of Part 0.5 of the Revenue and Taxation Code.
   (2) The amount, if any, received pursuant to Part 18.5 (commencing
with Section 38101) of the Revenue and Taxation Code.
   (3) The amount, if any, received pursuant to Chapter 3 (commencing
with Section 16140) of the Government Code.
   (4) Prior years' taxes and taxes on the unsecured roll.
   (5) Fifty percent of the amount received pursuant to Section
41603.
   (6) The amount, if any, received pursuant to the Community
Redevelopment Law (Part 1 (commencing with Section 33000) of Division
24 of the Health and Safety Code), except for any amount received
pursuant to Section 33401 or 33676 of the Health and Safety Code that
is used for land acquisition, facility construction, reconstruction,
or remodeling, or deferred maintenance, except for any amount
received pursuant to Section 33492.15, paragraph (4) of subdivision
(a) of Section 33607.5, or Section 33607.7 of the Health and Safety
Code that is allocated exclusively for educational facilities.
   (7) For a unified school district, other than a unified school
district that has converted all of its schools to charter status
pursuant to Section 47606, the amount of statewide average
general-purpose funding per unit of average daily attendance received
by school districts for each of four grade level ranges, as computed
by the department pursuant to Section 47633, multiplied by the
average daily attendance, in corresponding grade level ranges, of any
pupils who attend charter schools funded pursuant to Chapter 6
(commencing with Section 47630) of Part 26.8 for which the district
is the sponsoring local educational agency, as defined in Section
47632, and who reside in and would otherwise have been eligible to
attend a noncharter school of the district.
   (i) A transfer of seventh and eighth grade pupils between an
elementary school district and a high school district shall not
result in the receiving district receiving a revenue limit
apportionment for those pupils that exceeds 105 percent of the
statewide average revenue limit for the type and size of the
receiving school district.
  SEC. 6.  Section 42238.48 is added to the Education Code, to read:

   42238.48.  (a) (1) For the 2006-07 fiscal year, the Superintendent
shall compute an equalization adjustment for each school district,
so that the 2005-06 base revenue limit per unit average daily
attendance of a school district is not less than the 2005-06 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 (b).
   (2) For purposes of this section, the base revenue limit shall not
include any amounts attributable to Section 45023.4, 46200, or
46201.
   (b) Subdivision (a) 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

   (c) The Superintendent 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 (a) by the average daily attendance used to calculate
the revenue limit for the 2006-07 fiscal year of a school district.

   (2) Divide the amount appropriated for purposes of this section
for the 2006-07 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 (a) by the amount computed pursuant
to paragraph (2).
   (d) (1) For the purposes of this section, the 2005-06 statewide
90th percentile base revenue limit determined pursuant to paragraph
(1) of subdivision (a), and the fraction computed pursuant to
paragraph (2) of subdivision (c) for the 2005-06 second principal
apportionment, shall be final, and shall not be recalculated at
subsequent apportionments. The fraction computed pursuant to
paragraph (2) of subdivision (c) shall not exceed 1.00.  For purposes
of determining the size of a school district pursuant to subdivision
(b), county superintendents of schools, in conjunction with the
Superintendent, shall use school district revenue limit average daily
attendance for the 2005-06 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 (b), the Superintendent shall include units
of average daily attendance of any charter school for which the
school district is the sponsoring local educational agency.
   (3) For the purposes of computing the target amounts pursuant to
subdivision (a), the Superintendent shall count all charter school
average daily attendance toward the average daily attendance of the
school district that is the sponsoring local educational agency.
  SEC. 7.  Section 42238.146 of the Education Code is amended to
read:
   42238.146.  (a) (1) For the 2003-04 fiscal year, the revenue limit
for each school district determined pursuant to this article shall
be reduced by a 1.198 percent deficit factor.
   (2) For the 2004-05 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
0.323 percent deficit factor.
   (3) For the 2003-04 and 2004-05 fiscal years, the revenue limit
for each school district determined pursuant to this article shall be
further reduced by a 1.826 percent deficit factor.
   (4) For the 2005-06 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
0.892 percent deficit factor.
   (b) In computing the revenue limit for each school district for
the 2006-07 fiscal year pursuant to this article, the revenue limit
shall be determined as if the revenue limit for that school district
had been determined for the 2003-04, 2004-05, and 2005-06 fiscal
years without being reduced by the deficit factors specified in this
section.
  SEC. 8.  Section 44242.3 of the Education Code is repealed.
  SEC. 9.  Section 44244 of the Education Code is amended to read:
   44244.  (a) At least 30 days prior to any formal review of the
Committee of Credentials at which the application of an applicant or
credential of a holder is to be considered, the committee shall
notify the applicant or holder of the specific allegations of
misconduct that make the application or credential subject to adverse
action. The notification shall be in ordinary and concise language
and set forth the acts or omissions charged and the statutes or rules
violated. Supplemental allegations of misconduct shall be sent to
the holder or applicant at least 30 days prior to the formal review.
The portions of the investigation of the original or supplemental
allegations that constitute the basis for the allegations shall be
open to inspection and copying by the holder or applicant and his or
her attorney.  The statement of the allegations shall inform the
applicant or holder that the allegations, if true, are sufficient to
cause his or her application or credential to be subject to adverse
action.
   (b) (1) The formal review shall be held no later than six months
after the commencement of the initial review as set forth in
subdivision (c) of Section 44242.5. The formal review shall determine
either that no adverse action shall be taken or that the allegations
are sufficient to cause his or her application or credential to be
subject to adverse action.
   (2) All testimony before the committee shall be verified under
penalty of perjury by oath or affirmation. The chairperson of the
committee may administer the oath or affirmation. The chairperson may
designate staff to administer the oath or affirmation for statements
taken during the investigation of allegations of misconduct.
   (c) Notwithstanding subdivision (b), the chairperson of the
commission may grant the committee an extension of time, not
exceeding six months, when the committee demonstrates that additional
time is necessary to complete its investigation or determination, as
described in subdivision (b).
   (d) The recommendation of the committee shall be in writing and a
copy of the recommendation shall be delivered to the credentialholder
or applicant personally or sent to him or her by certified mail
within 14 days after the formal review, together with specific
information relative to any appeal rights to which the
credentialholder or applicant is entitled.
  SEC. 10.  Section 47632 of the Education Code is amended to read:
   47632.  For purposes of this chapter, the following terms shall be
defined as follows:
   (a) "General-purpose entitlement" means an amount computed by the
formula set forth in Section 47633 beginning in the 1999-2000 fiscal
year, which is based on the statewide average amounts of
general-purpose funding from those state and local sources identified
in Section 47633 received by school districts of similar type and
serving similar pupil populations.
   (b) "Categorical block grant" means an amount computed by the
formula set forth in Section 47634 beginning in the 1999-2000 fiscal
year, which is based on the statewide average amounts of categorical
aid from those sources identified in Section 47634 received by school
districts of similar type and serving similar pupil populations.
   (c) "General-purpose funding" means those funds that consist of
state aid, local property taxes, and other revenues applied toward a
school district's revenue limit, pursuant to Section 42238.
   (d) "Categorical aid" means aid that consists of state or
federally funded programs, or both, which are apportioned for
specific purposes set forth in statute or regulation.
   (e) "Economic impact aid-eligible pupils" means those pupils that
are included in the economic impact aid-eligible pupil count pursuant
to Section 54023. For purposes of applying Section 54023 to charter
schools, "economically disadvantaged pupils" means the pupils
described in paragraph (2) of subdivision (a) of Section 54026.
   (f) "Educationally disadvantaged pupils" means those pupils who
are eligible for subsidized meals pursuant to Section 49552 or are
identified as English learners pursuant to subdivision (a) of Section
306, or both.
   (g) "Operational funding" means all funding except funding for
capital outlay.
   (h) "School district of a similar type" means a school district
that is serving similar grade levels.
   (i) "Similar pupil population" means similar numbers of pupils by
grade level, with a similar proportion of educationally disadvantaged
pupils.
   (j) "Sponsoring local educational agency" means the following:
   (1) If a charter school is granted by a school district, the
sponsoring local educational agency is the school district.
   (2) If a charter is granted by a county office of education after
having been previously denied by a school district, the sponsoring
local educational agency means the school district that initially
denied the charter petition.
   (3) If a charter is granted by the state board after having been
previously denied by a local educational agency, the sponsoring local
educational agency means the local educational agency designated by
the state board pursuant to paragraph (1) of subdivision (k) of
Section 47605 or if a local educational agency is not designated, the
local educational agency that initially denied the charter petition.

   (4) For pupils attending county-sponsored charter schools who are
eligible to attend those schools solely as a result of parental
request pursuant to subdivision (b) of Section 1981, the sponsoring
local educational agency means the pupils' school district of
residence.
   (5) For pupils attending countywide charter schools pursuant to
Section 47605.6 who reside in a basic aid school district, the
sponsoring local educational agency means the school district of
residence of the pupil. For purposes of this paragraph, "basic aid
school district" means a school district that does not receive an
apportionment of state funds pursuant to subdivision (h) of Section
42238.
  SEC. 11.  Section 47634.1 of the Education Code is amended to read:

   47634.1.  (a) Notwithstanding subdivision (a) of Section 47634, a
categorical block grant for charter schools for the 2005-06 fiscal
year shall be calculated as follows:
   (1) The Superintendent shall divide the total amount of funding
appropriated for the purpose of this block grant in the annual Budget
Act or another statute, less the total amount calculated in
paragraph (2), by the statewide total of charter school average daily
attendance, as determined at the second principal apportionment for
the 2005-06 fiscal year.
   (2) The statewide average amount, as computed by the
Superintendent, of funding per identified educationally disadvantaged
pupil received by school districts in the current fiscal year
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part                                                  29. This
amount shall be multiplied by the number of educationally
disadvantaged pupils enrolled in the charter school. The resulting
amount, if greater than zero, may not be less than the minimum amount
of Economic Impact Aid funding to which a school district of similar
size would be entitled pursuant to Section 54022. For purposes of
this subdivision, a pupil who is eligible for subsidized meals
pursuant to Section 49552 and is identified as an English learner
pursuant to subdivision (a) of Section 306 shall count as two pupils.

   (3) For each charter school, the Superintendent shall multiply the
amount calculated in paragraph (1) by the school's average daily
attendance as determined at the second principal apportionment for
the 2005-06 fiscal year.
   (4) The Superintendent shall add the amounts computed in
paragraphs (2) and (3). The resulting amount shall be the charter
school categorical block grant that the Superintendent shall
apportion to each charter school from funds appropriated for this
purpose in the annual Budget Act or another statute. The
Superintendent shall allocate an advance payment of this grant as
early as possible, but no later than October 31, 2005, based on prior
year average daily attendance as determined at the second principal
apportionment or, for a charter school in its first year of operation
that commences instruction on or before September 30, 2005, on
estimates of average daily attendance for the current fiscal year
determined pursuant to Section 47652.
   (b) (1) For the 2006-07 fiscal year, the categorical block grant
allocated by the Superintendent for charter schools shall be four
hundred dollars ($400) per unit of charter school average daily
attendance as determined at the second principal apportionment for
the 2006-07 fiscal year. This amount shall be supplemented by the
amount calculated in paragraph (2).
   (2) The statewide average amount, as computed by the
Superintendent, of funding per economic impact aid-eligible pupil
count received by school districts in the current fiscal year,
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29, shall be multiplied by the number of economic impact
aid-eligible pupils enrolled in the charter school. The resulting
amount, if greater than zero, may not be less than the minimum amount
of Economic Impact Aid funding to which a school district of similar
size would be entitled pursuant to Section 54022.
   (c) (1) For the 2007-08 fiscal year, the categorical block grant
allocated by the Superintendent for charter schools shall be five
hundred dollars ($500) per unit of charter school average daily
attendance as determined at the second principal apportionment for
the 2007-08 fiscal year. For each fiscal year thereafter, this per
unit amount shall be adjusted for the cost-of-living adjustment, as
determined pursuant to Section 42238.1, for that fiscal year. This
amount shall be supplemented in the 2007-08 fiscal year and each
fiscal year thereafter by the amount calculated in paragraph (2).
   (2) The statewide average amount, as computed by the
Superintendent, of funding per economic impact aid-eligible pupil
count received by school districts in the current year, pursuant to
Article 2 (commencing with Section 54020) of Chapter 1 of Part 29,
shall be multiplied by the number of economic impact aid-eligible
pupils enrolled in the charter school. The resulting amount, if
greater than zero, may not be less than the minimum amount of
Economic Impact Aid funding to which a school district of similar
size would be entitled pursuant to Section 54022.
   (d) It is the intent of the Legislature to fully fund the
categorical block grant for charter schools as specified in this
section and to appropriate additional funding that may be needed in
order to compensate for unanticipated increases in average daily
attendance and counts of economic impact aid-eligible pupils,
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29, in charter schools. In any fiscal year in which the
department identifies a deficiency in the categorical block grant,
the department shall identify the available balance for programs that
count towards meeting the requirements of Section 8 of Article XVI
of the California Constitution and have unobligated funds for the
year. On or before July 1, the department shall provide the
Department of Finance with a list of those programs and their
available balances, and the amount of the deficiency, if any, in the
categorical block grant. Within 45 days of the receipt of a
notification of deficiency, the Director of Finance shall verify the
amount of the deficiency in the categorical block grant and direct
the Controller to transfer an amount, equal to the lesser of the
amount available or the amount needed to fully fund the categorical
block grant, from those programs to the categorical block grant. The
Department of Finance shall notify the Joint Legislative Budget
Committee within 30 days of any transfer made pursuant to this
section.
   (e) Commencing October 1, 2007, the Legislative Analyst's Office
shall triennially convene a work group to review, commencing with
appropriations proposed for the 2008-09 fiscal year, the
appropriateness of the funding level provided by the categorical
block grant established in this section.
   (f) Categorical block grant funding may be used for any purpose
determined by the governing body of the charter school.
  SEC. 12.  Section 49430.5 of the Education Code is amended to read:

   49430.5.  (a) The reimbursement a school receives for free and
reduced price meals sold or served to pupils in elementary, middle,
or high schools included within a school district, charter school, or
county office of education shall be twenty-one cents ($0.21).
   (b) To qualify for the reimbursement for free and reduced price
meals provided to pupils in elementary, middle, or high schools, a
school shall follow the Enhanced Food Based Meal Pattern, Nutrient
Standard Meal Planning, or Traditional Meal Pattern developed by the
United States Department of Agriculture or the SHAPE Menu Patterns
developed by the state.
   (c) The reimbursement rates set forth in this section shall be
adjusted annually for increases in cost of living in the same manner
set forth in Section 42238.1.
  SEC. 13.  Article 4.5 (commencing with Section 52378) is added to
Chapter 9 of Part 28 of the Education Code, to read:

      Article 4.5.  Supplemental School Counseling Program

   52378.  The Middle and High School Supplemental Counseling Program
is hereby established for the purpose of providing additional
counseling services to pupils in grades 7 to 12, inclusive. As a
condition of receiving funds, the governing board of each school
district maintaining any of grades 7 to 12, inclusive, shall do all
of the following:
   (a) The program shall be adopted at a public meeting of the
governing board and shall include all of the following:
   (1) A provision for individualized review of the pupil's academic
and deportment records.
   (2) A provision for a counselor to meet with each pupil and if
practicable, the parents or guardian of the pupil, to explain the
academic and deportment records of the pupil, his or her educational
options, the coursework and academic progress needed for satisfactory
completion of middle or high school, passage of the high school exit
examination and the availability of career technical education. The
educational options explained at the meeting shall, if services are
available, include college preparatory program and vocational
programs, including regional occupational centers and programs and
any other alternatives available to pupils within the district.
   (b) In addition to the counseling services described in
subdivision (a), school districts shall identify pupils who are at
risk of not graduating with the rest of their class, are not earning
credits at a rate that will enable them to pass the high school exit
examination, or do not have sufficient training to allow them to
fully engage in their chosen career, and shall do all of the
following:
   (1) Require each school within its jurisdiction that enrolls
pupils in grades 10 and 12 to develop a list of coursework and
experience necessary to assist each pupil in their respective grade
that has not passed one or both parts of the high school exit
examination and to successfully transition to postsecondary education
or employment.
   (2) Require each school within its jurisdiction that enrolls
pupils in grade 7 to develop a list of coursework and experience
necessary to assist each pupil in grade 7 who is deemed to be at the
far below basic level in English language arts or mathematics
pursuant to California Standards Tests administered to pupils in
grade 6 to successfully transition to high school and meet all
graduation requirements, including passing the high school exit
examination.
   (3) A copy of the list of coursework and experience necessary
shall be provided to the pupil and his or her parent or legal
guardian. The school district shall ensure that the list of
coursework and experience is part of the cumulative records of the
pupil.
   (c) (1) In addition to the items identified in subdivision (b),
the list of coursework and experience for a pupil enrolled in grade
12 shall include options for continuing his or her education if he or
she fails to meet graduation requirements. These options shall
include, but not be limited to, all of the following:
   (A) Enrolling in an adult education program.
   (B) Enrolling in a community college.
   (C) Continuing enrollment in the pupil's school district.
   (2) A copy of the list of coursework and experience necessary
shall be provided to the pupil and his or her parent or legal
guardian. The school district shall ensure that the list of
coursework and experience is part of the cumulative records of the
pupil.
   (d) As a condition of receipt of funds pursuant to this article, a
school district shall require each school within its jurisdiction to
offer and schedule an individual conference with each pupil,
identified in paragraphs (1) and (2) of subdivision (b), and his or
her parent or legal guardian, and a school counselor. The individual
conference shall be scheduled, to the extent feasible, according to
the following requirements:
   (1) For a pupil enrolled in grade 7, the conference shall occur
before January of that school year in which the pupil is enrolled in
grade 7.
   (2) For a pupil enrolled in grade 10, the conference shall occur
between the spring of that school year in which the pupil is enrolled
in grade 10 and the fall of the following school year in which the
pupil would be enrolled in grade 11. For the 2006-07 school year, the
conference shall occur on or before December 31, 2006.
   (3) For a pupil enrolled in grade 12, the conference shall occur
after November of that school year in which the pupil is enrolled in
grade 12, but before March of the same school year.
   (e) During the individual conference described in subdivision (d),
the school counselor shall apprise the pupil identified in
paragraphs (1) and (2) of subdivision (b), and his or her parent or
guardian of the following:
   (1) Consequences of not passing the high school exit examination.

   (2) Programs, courses, and career technical education options
available for pupils needed for satisfactory completion of middle or
high school.
   (3) Cumulative records and transcripts of the pupil.
   (4) Performance on standardized and diagnostic assessments of the
pupil.
   (5) Remediation strategies, high school courses, and alternative
education options available to the pupil.
   (6) Information on postsecondary education and training.
   (7) The pupil's score on the English language arts or mathematics
portion of the California Standards Test administered in grade 6, as
applicable.
   52379.  (a) Funds appropriated in the annual Budget Act for the
purposes of this chapter shall be allocated to school districts based
on an equal amount per unit of average daily attendance in grades 7
to 12, inclusive, with the following minimum-grant exceptions:
   (1) Five thousand dollars ($5,000) for each school site that has
100 or fewer pupils enrolled in any of grades 7 to 12, inclusive.
   (2) Ten thousand dollars ($10,000) for each school site that has
between 101 and 200 pupils enrolled in any of grades 7 to 12,
inclusive.
   (3) Thirty thousand dollars ($30,000) or an amount per unit of
average daily attendance, whichever is greater, for each school site
with more than 200 pupils enrolled in any of grades 7 to 12,
inclusive.
   (b) Funds allocated pursuant to this section shall supplement, and
not supplant, expenditures made by a school district for school
counseling programs.
   (c) For purposes of this section, a charter school is not eligible
to receive a minimum grant but instead shall receive an amount per
unit of average daily attendance in grades 7 to 12, inclusive.
   52380.  As a condition of receipt of funds pursuant to this
chapter, a school district shall submit an annual report in a manner
determined by the Superintendent that describes the number of pupils
served, the number of school counselors involved in conferences, the
number and percentage of pupils who participated in conferences and
who successfully pass the high school exit examination, and the
number and percentage of pupils who participated in conferences and
who fail to pass one or both sections of the exit examination, and a
summary of the most prevalent results for pupils based on the
graduation plans developed pursuant to this chapter.
  SEC. 14.  Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29 of the Education Code is repealed.
  SEC. 15.  Article 2 (commencing with Section 54020) is added to
Chapter 1 of Part 29 of the Education Code, to read:

      Article 2.  Economic Impact Aid

   54020.  It is the intent of the Legislature that funds authorized
pursuant to this chapter replace, as of July 1, 1979, funds
previously authorized to support educationally disadvantaged youth
programs and bilingual education. To that end, the purpose of this
article is to provide a method of impact aid allocation to be
utilized by the Superintendent, that will allow efforts initiated
under those programs to continue and expand so long as a need exists
while previously unserved and underserved populations are provided
with adequate aid.
   54021.  For the 2006-07 fiscal year, the Superintendent shall make
the following calculations for each school district:
   (a) Using the methodology specified in Section 54023, determine
the economic impact aid-eligible pupil count for each school district
for the 2005-06 fiscal year as if Section 54023 had been in effect
for that fiscal year.
   (b) Divide the school district economic impact aid calculated
funding in the 2005-06 fiscal year, excluding the minimum grant
specified in Section 54031, as it read during that fiscal year, by
the number calculated pursuant to subdivision (a).
   (c) For the purpose of calculating the economic impact aid
allocations for the 2006-07 fiscal year, the quotient calculated in
subdivision (b) shall be deemed to be the prior year economic impact
aid per pupil amount for the 2006-07 fiscal year.
   (d) For the purpose of establishing a base year economic impact
aid per pupil amount pursuant to this section, if a school district
received an allocation for the economic impact aid program in the
2005-06 fiscal year, but has no economic impact aid eligible pupils
as determined in Section 54023 for that year, the school district
shall be deemed to have a prior-year economic impact aid per pupil
amount for the 2006-07 fiscal year that is equal to the statewide
average economic impact aid per pupil amount for the 2005-06 fiscal
year calculated for the state as a whole as specified in subdivisions
(a) and (b).
   54022.  For the 2006-07 fiscal year and each fiscal year
thereafter, each school district shall receive the amount of economic
impact aid determined by the Superintendent pursuant to subdivision
(b) or (c), whichever is greater, calculated for each school district
according to all of the following:
   (a) Increase the prior fiscal year economic impact aid per pupil
amount by the percentage change specified in paragraph (2) of
subdivision (b) of Section 42238.1 for the current fiscal year.
   (b) Multiply the economic impact aid per pupil amount for the
current fiscal year calculated in subdivision (a) by the economic
impact aid-eligible pupil count for the current fiscal year as
calculated in Section 54023.
   (c) A school district shall, at a minimum, receive funds based on
the number of economic impact aid-eligible pupils according to the
following schedule:
   (1) For the 2006-07 fiscal year, according to the following table:



  Number of economic impact
aid-eligible pupils                Amount
0............................ None
1-20......................... $5,500
21 or more................... $8,300

   (2) For the 2007-08 fiscal year and each fiscal year thereafter,
the minimum amounts for the schedule in paragraph (1) for the prior
fiscal year shall be increased by the percentage change specified in
paragraph (2) of subdivision (b) of Section 42238.1.
   54023.  For the 2006-07 fiscal year and each fiscal year
thereafter, the economic impact aid-eligible pupil count shall be
calculated for each school district as follows:
   (a) Determine the count of economically disadvantaged pupils for
the current fiscal year, as defined in Section 54026.
   (b) Determine the count of English learners for the current fiscal
year, as defined in subdivision (b) of Section 54026.
   (c) Calculate an economic impact aid weighted pupil concentration
factor:
   (1) Add the pupil counts determined in subdivisions (a) and (b).
   (2) Divide the fall CBEDS enrollment for the school district for
the prior school year by two.
   (3) Subtract from the sum calculated in paragraph (1) the quotient
calculated in paragraph (2).
   (4) If the result of the calculation in paragraph (3) is greater
than zero, multiply that difference by 0.5. If the result is less
than zero, it shall be deemed to be zero.
   (d) The economic impact aid-eligible pupil count for each school
district shall equal the sum of the pupil counts determined in
subdivisions (a) and (b), and the weighted pupil concentration factor
determined in subdivision (c).
   54024.  The state board may, pursuant to Article 3 (commencing
with Section 33050) of Chapter 1 of Part 20, waive any statutory
provision or regulation regarding the use of funds apportioned
pursuant to this article, provided that the funds are used in the
same schools, or in schools with similar need levels, and the
district demonstrates a reasonable case that the waiver will improve
pupil services in those schools.
   54025.  (a) A school district shall expend economic impact aid
funds to serve and assist English learners and economically
disadvantaged pupils and may not expend those funds at schoolsites
that do not have English learners or economically disadvantaged
pupils.
   (b) A school shall use funds received pursuant to this article to
support programs and activities designed to assist English learners
achieve proficiency in the English language as rapidly as practicable
and to support programs and activities designed to improve the
academic achievement of English learners and economically
disadvantaged pupils.
   (c) Funds received by school districts pursuant to this article
shall supplement, and not supplant, existing resources at the
schoolsite.
   54026.  For purposes of this article, the following definitions
apply:
   (a) "Economically disadvantaged pupils" means either of the
following, whichever is applicable:
   (1) Pupils described in Section 101 of Title I of the federal No
Child Left Behind Act of 2001 (20 U.S.C. Sec.  6333(c)(1)(A)(B)).
   (2) Notwithstanding paragraph (1), for a small school district,
the product of the number of pupils eligible for participation in the
free meals program for the prior fiscal year, as defined in
subdivision (d), and the free meals adjustment factor. The free meals
adjustment factor is the quotient, rounded to two decimal places,
resulting from dividing the statewide total of economically
disadvantaged pupils as defined in paragraph (1) by the statewide
total of pupils eligible for participation in the free meals program
for the prior fiscal year, as defined in subdivision (d).  For
purposes of this subdivision, the department may substitute the
current year counts of a charter school that is established on or
after July 1, 2006, but not through the conversion of an existing
public school, for prior year counts of pupils eligible for
participation in free meals.
   (b) "English learner" means a pupil described in subdivision (a)
of Section 306 or identified as a pupil of limited English
proficiency, as that term is defined in subdivision (m) of Section
52163.
   (c) "Small school district" means a school district that has an
annual enrollment of less than 600 pupils based on prior school year
CBEDS data and is, for the purposes of this section, designated a
rural school by the Superintendent based on the appropriate school
locale codes, as used by the National Center for Education Statistics
of the United State Department of Education.
   (d) "Free meals" means the aggregate number of pupils meeting the
income eligibility guidelines established by the federal government
for free meals as reported for all schools for which the district is
the authorizing agency.
   54027.  If a school district reorganizes either by unification or
by consolidation with another school district of similar type, the
Superintendent shall calculate an economic impact aid per pupil
amount based on the respective per pupil amounts for each school
district participating in the reorganization, weighted by the number
of economic impact aid-eligible pupils contributed by each school
district. The Superintendent shall use the appropriate data from the
year prior to the year that the reorganization is effective for all
purposes.
   54028.  Notwithstanding any other provision of law, the provisions
of this article are subject to Sections 62002.5 and 62004, and to
the portions of Section 62003 that relate to auditing the use of
funds allocated for purposes of economic impact aid.
  SEC. 16.  Article 4 (commencing with Section 54040) of Chapter 1 of
Part 29 of the Education Code is repealed.
  SEC. 17.  Section 56836.155 of the Education Code is amended to
read:
   56836.155.  (a) On or before November 2, 1998, the department, in
conjunction with the Office of the Legislative Analyst, shall do the
following:
   (1) Calculate an "incidence multiplier" for each special education
local plan area using the definition, methodology, and data provided
in the final report submitted by the American Institutes for
Research pursuant to Section 67 of Chapter 854 of the Statutes of
1997.
   (2) Submit the incidence multiplier for each special education
local plan area and supporting data to the Department of Finance.
   (b) The Department of Finance shall review the incidence
multiplier for each special education local plan area and the
supporting data, and report any errors to the department and the
Office of the Legislative Analyst for correction.
   (c) The Department of Finance shall approve the final incidence
multiplier for each special education local plan area by November 23,
1998.
   (d) For the 1998-99 fiscal year and each fiscal year thereafter to
and including the 2006-07 fiscal year, the Superintendent shall
perform the following calculation to determine each special education
local plan area's adjusted entitlement for the incidence of
disabilities:
   (1) The incidence multiplier for the special education local plan
area shall be multiplied by the statewide target amount per unit of
average daily attendance for special education local plan areas
determined pursuant to Section 56836.11 for the fiscal year in which
the computation is made.
   (2) The amount determined pursuant to paragraph (1) shall be added
to the statewide target amount per unit of average daily attendance
for special education local plan area determined pursuant to Section
56836.11 for the fiscal year in which the computation is made.
   (3) Subtract the amount of funding for the special education local
plan area determined pursuant to paragraph (1) of subdivision (a) or
paragraph (1) of subdivision (b) of Section 56836.08, as appropriate
for the fiscal year in which the computation is made, or the
statewide target amount per unit of average daily attendance for
special education local plan areas determined pursuant to Section
56836.11 for the fiscal year in which the computation is made,
whichever is greater, from the amount determined pursuant to
paragraph (2). For the purposes of this paragraph for the 2002-03,
2003-04, 2004-05, 2005-06, and 2006-07 fiscal years, the amount, if
any, received pursuant to Section 56836.159 shall be excluded from
the funding level per unit of average daily attendance for a special
education local plan area. If the result is less than zero, the
special education local plan area may not receive an adjusted
entitlement for the incidence of disabilities.
   (4) Multiply the amount determined in paragraph (3) by either the
average daily attendance reported for the special education local
plan area for the fiscal year in which the computation is made, as
adjusted pursuant to subdivision (a) of Section 56836.15, or the
average daily attendance reported for the special education local
plan area for the prior fiscal year, as adjusted pursuant to
subdivision (a) of Section 56826.15, whichever is less.
   (5) If there are insufficient funds appropriated in the fiscal
year for which the computation is made for the purposes of this
section, the amount received by each special education local plan
area shall be prorated.
   (e) For the 1997-98 fiscal year, the Superintendent shall perform
the calculation in paragraphs (1) to (3), inclusive, of paragraph (d)
only for the purposes of making the computation in paragraph (1) of
subdivision (d) of Section 56836.08, but the special education local
plan area may not receive an adjusted entitlement for the incidence
of disabilities pursuant to this section for the 1997-98 fiscal year.

  SEC. 18.  Section 56836.21 of the Education Code is amended to
read:

          56836.21.  (a) The department shall administer an
extraordinary cost pool to protect special education local plan areas
from the extraordinary costs associated with single placements as
described in subdivision (d). Funds shall be appropriated for this
purpose in the annual Budget Act. Special education local plan areas
shall be eligible for reimbursement from this pool in accordance with
this section.
   (b) The threshold amount for claims under this section shall be
the lesser of the following:
   (1) One percent of the allocation calculated pursuant to Section
56836.08 for the special education local plan area for the current
fiscal year for any special education local plan area that meets the
criteria in Section 56212.
   (2) The department shall calculate the average cost of a
nonpublic, nonsectarian school placement in the 1997 -98 fiscal year.
This amount shall be multiplied by 2.5, then by one plus the
inflation factor computed pursuant to Section 42238.1, to obtain the
alternative threshold amount for claims in the 1998-99 fiscal year.
In subsequent fiscal years, the alternative threshold amount shall be
the alternative threshold amount for the prior fiscal year
multiplied by one plus the inflation factor computed pursuant to
Section 42238.1.
   (c) Special education local plan areas are eligible to submit
claims for costs exceeding the threshold amount on forms developed by
the department. All claims for a fiscal year shall be submitted by
November 30 following the close of the fiscal year. If the total
amount claimed by special education local plan areas exceeds the
amount appropriated, the claims shall be prorated.
   (d) Special education local plan areas are eligible to submit
claims for the costs of nonpublic, nonsectarian school placements in
excess of those in existence in the 1997-98 fiscal year and of
special education and related services for pupils who reside in
licensed children's institutions.
  SEC. 19.  Section 56867 of the Education Code is amended to read:
   56867.  (a) The State Department of Education is responsible for
monitoring the Division of Juvenile Justice of the Department of
Corrections and Rehabilitation for compliance with state and federal
laws and regulations regarding special education.
   (b) Notwithstanding any other provision of law, the State
Department of Education and the California State University shall
enter into an interagency agreement under which the Center for the
Study of Correctional Education, located on the California State
University, San Bernardino campus, shall provide technical assistance
to the State Department of Education regarding compliance with state
and federal laws and regulations regarding special education at the
Division of Juvenile Justice of the Department of Corrections and
Rehabilitation.
   (c) The State Department of Education shall prepare the
interagency agreement in consultation with the California State
University, San Bernardino, and the superintendent of education for
the Division of Juvenile Justice of the Department of Corrections and
Rehabilitation. The interagency agreement shall require the center
to provide all of the following services to the Special Education
Division of the State Department of Education:
   (1) Assistance in providing reviews and assessments of special
education at each schoolsite in the Division of Juvenile Justice of
the Department of Corrections and Rehabilitation.
   (2) Assistance in drafting reports of findings for each review.
   (3) Assistance in drafting corrective action plans, based on
preliminary findings of noncompliance that include specific suggested
outcomes to achieve compliance, and other instruments conveying
recommendations and suggestions resulting from reviews and
assessments.
   (4) Onsite technical assistance and support to the Division of
Juvenile Justice of the Department of Corrections and Rehabilitation,
as authorized by the Special Education Division of the State
Department of Education.
   (5) Identifying and developing suggested draft protocols and best
practices for providing special education services in correctional
settings.
   (6) Developing suggested draft protocols and a suggested draft
best practices model for providing monitoring and technical
assistance services for special education in youthful correctional
settings.
   (7) Evaluating the training needs and priorities of educational
personnel serving wards with exceptional needs at the Division of
Juvenile Justice of the Department of Corrections and Rehabilitation.

   (8) Reviewing the Division of Juvenile Justice of the Department
of Corrections and Rehabilitation current special education local
plan, policies, procedures, and forms of the Division of Juvenile
Justice of the Department of Corrections and Rehabilitation for
compliance with state and federal special education law and, with the
approval of the State Department of Education, providing suggested
revisions as necessary to provide better compliance and to better
reflect the best practices in a correctional setting.
   (d) Technical assistance provided pursuant to this section shall
reflect existing or subsequently adopted standards for state and
federal compliance. Reviews conducted pursuant to this section shall
include, but not be limited to, assessments of the following special
education services for wards at the Division of Juvenile Justice of
the Department of Corrections and Rehabilitation with exceptional
needs:
   (1) Identification and assessment of wards with exceptional needs.

   (2) Parent notification, consent, and participation.
   (3) Individual education plan development and content, including
behavior intervention and transition plans.
   (4) Assessment of ward progress.
   (5) Provision of services in the least restrictive environment
maximizing inclusion.
   (6) Services to pupils who are not proficient in English.
   (7) Observance of procedural safeguards and compliance with state
and federal law.
   (e) Commencing no later than one year after entering into the
interagency agreement specified in this section and annually
thereafter until termination of the agreement, with the assistance of
the center, the State Department of Education shall provide interim
status reports of the services received from the center pursuant to
this section to the Department of Finance and the Legislature.
   (f) No later than December 1, 2006, the State Department of
Education shall submit a report to the Legislature on the usefulness
of the services received from the center pursuant to the interagency
agreement required by this section.
   (g) The interagency agreement required by this section shall be
funded through an appropriation made in the annual Budget Act with
federal funds made available for state agencies under Part B of the
federal Individuals with Disabilities Education Act (20 U.S.C. Sec.
1400 and following).
   (h) This section shall remain in effect only until July 1, 2007,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2007, deletes or extends that date.
  SEC. 20.  Section 62000.2 of the Education Code is amended to read:

   62000.2.  The following programs shall sunset on June 30, 1987:
   (a) Miller-Unruh Basic Reading Act of 1965.
   (b) School improvement program.
   (c) Bilingual education.
  SEC. 21.  The heading of Article 5.6 (commencing with Section
69616) of Chapter 2 of Part 42 of the Education Code is amended and
renumbered to read:

      Article 5.3.  State Nursing Assumption Program of Loans for
Education (SNAPLE)

  SEC. 22.  Section 69616 of the Education Code is amended to read:
   69616.  (a) The Legislature hereby recognizes the growing need for
new faculty members in the nursing field at California's colleges
and universities. This need will be fueled largely by the large
number of current faculty approaching retirement age who will need to
be replaced and the expected growth in enrollment demand in
California.  Further, to increase the supply of nurses in California,
there must be an expansion of nursing educator opportunities in
public colleges and universities that will produce the necessary
faculty to teach in nursing programs in the state.
   (b) The Legislature finds that the rising costs of higher
education, coupled with a shift in available financial aid from
scholarships and grants to loans, make loan repayment options an
important consideration in a student's decision to pursue a graduate
degree in nursing education or in a field related to nursing.
   (c) It is the intent of the Legislature that the State Nursing
Assumption Program of Loans for Education (SNAPLE) be designed to
encourage persons to complete their graduate educations and serve as
nursing faculty in a registered nursing program at an accredited
California college or university.
   (d) As used in this article, "commission" means the Student Aid
Commission.
  SEC. 23.  Section 69616.1 of the Education Code is amended to read:

   69616.1.  (a) Program participants shall meet all of the following
eligibility criteria prior to selection into the program and shall
continue to meet these criteria, as appropriate, during the payment
periods:
   (1) The participant shall be a United States citizen or eligible
noncitizen.
   (2) The participant shall be a California resident attending an
eligible school or college.
   (3) The participant shall be making satisfactory academic
progress.
   (4) The participant shall have complied with United States
Selective Service requirements.
   (5) The participant shall not owe a refund on any state or federal
educational grant or have delinquent or defaulted student loans.
   (b) Any person enrolled in an institution of postsecondary
education and participating in the loan assumption program set forth
in this article may be eligible to receive a conditional warrant for
loan assumption, to be redeemed pursuant to this act upon becoming
employed as a full-time nursing faculty member at a California
college or university or the equivalent of full-time service as a
nursing faculty member employed part time at two or more California
colleges or universities.
   (c) (1) The commission shall award loan assumption agreements to
undergraduate students with demonstrated academic ability and
financial need, as determined by the commission pursuant to Article
1.5 (commencing with Section 69503), and to graduate students with
demonstrated academic ability.
   (2) The applicant shall have completed a baccalaureate degree
program or be enrolled in an academic program leading to a
baccalaureate level or a graduate level degree.
   (3) The applicant shall be currently enrolled in or admitted to a
program in which he or she will be enrolled on at least a half-time
basis each academic term as defined by an eligible institution. The
applicant shall agree to maintain satisfactory academic progress.
   (4) The applicant shall have been judged by his or her
postsecondary institution to have outstanding ability on the basis of
criteria that may include, but need not be limited to, any of the
following:
   (A) Grade point average.
   (B) Test scores.
   (C) Faculty evaluations.
   (D) Interviews.
   (E) Other recommendations.
   (5) The applicant shall have received, or be approved to receive,
a loan under one or more of the following designated loan programs:
   (A) The Federal Family Education Loan Program (20 U.S.C. Sec. 1071
et seq.).
   (B) The Federal Direct Loan Program.
   (C) Any loan program approved by the commission.
   (6) The applicant shall have agreed to teach nursing on a
full-time basis at one or more accredited California colleges or
universities for at least three years, or on a part-time basis for
the equivalent of three full-time academic years, commencing not more
than 12 months after obtaining an academic degree, unless the
applicant, within 12 months after obtaining the academic degree,
enrolls in an academic degree program leading to a more advanced
degree in nursing or a field related to nursing.
   (7) An applicant who teaches on less than a full-time basis may
participate in the program, but is not eligible for loan repayment
until that person teaches for the equivalent of a full-time academic
year.
   (d) A person participating in the program pursuant to this section
shall not receive more than one loan assumption agreement.
  SEC. 24.  Section 69616.2 of the Education Code is amended to read:

   69616.2.  The commission shall commence loan assumption payments
pursuant to this article upon verification that the applicant has
fulfilled all of the following:
   (a) The applicant has received a baccalaureate degree or a
graduate degree from an accredited, participating institution.
   (b) The applicant has provided the equivalent of full-time nursing
instruction at one or more regionally accredited California colleges
or universities for one academic year or the equivalent.
   (c) The applicant has met the requirements of the loan assumption
agreement and all other conditions of this article.
  SEC. 25.  Section 69616.3 of the Education Code is amended to read:

   69616.3.  The terms of the loan assumptions granted under this
article shall be as follows, subject to the specific terms of each
loan assumption agreement:
   (a) After a program participant has completed one academic year,
or the equivalent of full-time teaching nursing studies, at one or
more regionally accredited, eligible California colleges or
universities, the commission shall assume up to eight thousand three
hundred thirty-three dollars ($8,333) of the outstanding liability of
the participant under one or more of the designated loan programs.
   (b) After the program participant has completed two consecutive
academic years, or the equivalent of full-time teaching, at one or
more regionally accredited California colleges or universities, the
commission shall assume up to an additional eight thousand three
hundred thirty-three dollars ($8,333) of the outstanding liability of
the participant under one or more of the designated loan programs,
for a total loan assumption of up to sixteen thousand six hundred
sixty-six dollars ($16,666).
   (c) After a program participant has completed three consecutive
academic years, or the equivalent of full-time teaching, at one or
more regionally accredited California colleges or universities, the
commission shall assume up to an additional eight thousand three
hundred thirty-four dollars ($8,334) of the outstanding liability of
the participant under one or more of the designated loan programs,
for a total loan assumption of up to twenty-five thousand dollars
($25,000).
   (d) The commission may assume liability for loans received by the
program participant to pay for the costs of obtaining the program
participant's undergraduate and graduate degrees.
   (e) The term of the loan assumption agreement shall be not more
than 10 years from the date on which the agreement was executed by
the program participant and the commission.
  SEC. 26.  Section 69616.4 of the Education Code is amended to read:

   69616.4.  (a) Except as provided in subdivision (b), if a program
participant fails to complete a minimum of three academic years of
teaching on a full-time basis or the equivalent on a part-time basis,
as required by this article under the terms of the agreement
pursuant to paragraph (6) of subdivision (c) of Section 69616.1, the
loan assumption agreement is no longer effective and shall be deemed
terminated, and the commission shall not make any further payments.
The participant shall resume responsibility for any remaining loan
obligations, but shall not be required to repay any loan payments
previously made through this program.
   (b) Notwithstanding subdivision (a), if a program participant
becomes unable to complete one of the three years of teaching service
on a full-time basis, or the equivalent on a part-time basis, due to
a serious illness, pregnancy, or other natural causes, the term of
the loan assumption agreement shall be extended for a period not to
exceed one academic year. The commission shall make no further
payments under the loan assumption agreement until the applicable
teaching requirements specified in Section 69616.3 have been
satisfied.
   (c) If a natural disaster prevents a program participant from
completing one of the required years of teaching service due to the
interruption of instruction at the employing accredited California
college or university, the term of the loan assumption agreement
shall be extended for the period of time equal to the period from the
interruption of instruction at the employing accredited California
college or university to the resumption of instruction. The
commission shall make no further payments under the loan assumption
agreement until the applicable teaching requirements specified in
Section 69616.3 have been satisfied.
  SEC. 27.  Section 69616.5 of the Education Code is amended to read:

   69616.5.  (a) The commission shall accept nominations from
accredited colleges and universities made pursuant to this article.
   (b) The commission shall choose from among those nominations of
undergraduate students deemed financially needy with outstanding
student loans pursuant to Article 1.5 (commencing with Section
69503), and of graduate students with outstanding student loans,
based upon criteria that may include, but are not necessarily limited
to, all of the following:
   (1) Grades at the undergraduate level in a subject field related
to nursing.
   (2) Grades in the undergraduate program.
   (3) Aptitude for graduate work in the field of nursing.
   (4) General aptitude for graduate study.
   (5) Critical human resource needs.
   (c) The commission may develop additional criteria for the
selection of award recipients consistent with the purposes of this
article.
  SEC. 28.  Section 69741.5 of the Education Code is amended to read:

   69741.5.  (a) Participants in this program are eligible for a
maximum of eleven thousand dollars ($11,000) in loan assistance for
four years, as follows:
   (1) For the first year, two thousand dollars ($2,000) in loan
repayment assistance.
   (2) For the second, third, and fourth years, three thousand
dollars ($3,000) in loan repayment assistance for each year.
   (b) Notwithstanding any other provision of law, in any fiscal
year, the commission shall award no more than the number of warrants
that are authorized in the annual Budget Act for that fiscal year for
the assumption of loans pursuant to this article.
  SEC. 29.  Section 69744 of the Education Code is amended to read:
   69744.  The commission may use the funds appropriated for the
program for the purpose of loan repayments and to defray reasonable
administrative costs. The commission shall annually establish the
total amount of funding to be awarded for loan repayments. Allocation
of funds shall be established based upon the best use of funding for
that year, as determined by the commission.
  SEC. 30.  Section 69746.5 is added to the Education Code, to read:

   69746.5.  The commission shall submit an annual written report to
the Legislature regarding this program. The report shall include, but
not necessarily be limited to, all of the following data:
   (a) The total number of loan repayment awards made under the
program in the immediately preceding fiscal year, classified by the
repayment year as described in subdivision (a) of Section 69741.5.
   (b) The total amount of funds expended for the purposes of loan
repayments, and the total amount of funds expended to defray
administrative costs, in the immediately preceding fiscal year.
   (c) The annual and cumulative attrition rates of participants, as
calculated through the end of the immediately preceding fiscal year.

  SEC. 31.  Section 69747 of the Education Code is repealed.
  SEC. 32.  Section 69748 of the Education Code is repealed.
  SEC. 33.  Section 76300 of the Education Code is amended to read:
   76300.  (a) The governing board of each community college district
shall charge each student a fee pursuant to this section.
   (b) (1) The fee prescribed by this section shall be twenty dollars
($20) per unit per semester, effective with the spring term of the
2006-07 academic year.
   (2) The board of governors shall proportionately adjust the amount
of the fee for term lengths based upon a quarter system, and also
shall proportionately adjust the amount of the fee for summer
sessions, intersessions, and other short-term courses. In making
these adjustments, the board of governors may round the per unit fee
and the per term or per session fee to the nearest dollar.
   (c) For the purposes of computing apportionments to community
college districts pursuant to Section 84750, the board of governors
shall subtract, from the total revenue owed to each district, 98
percent of the revenues received by districts from charging a fee
pursuant to this section.
   (d) The board of governors shall reduce apportionments by up to 10
percent to any district that does not collect the fees prescribed by
this section.
   (e) The fee requirement does not apply to any of the following:
   (1) Students enrolled in the noncredit courses designated by
Section 84757.
   (2) California State University or University of California
students enrolled in remedial classes provided by a community college
district on a campus of the University of California or a campus of
the California State University, for whom the district claims an
attendance apportionment pursuant to an agreement between the
district and the California State University or the University of
California.
   (3) Students enrolled in credit contract education courses
pursuant to Section 78021, if the entire cost of the course,
including administrative costs, is paid by the public or private
agency, corporation, or association with which the district is
contracting and if these students are not included in the calculation
of the full-time equivalent students (FTES) of that district.
   (f) The governing board of a community college district may exempt
special part-time students admitted pursuant to Section 76001 from
the fee requirement.
   (g) (1) The fee requirements of this section shall be waived for
any student who, at the time of enrollment, is a recipient of
benefits under the Temporary Assistance to Needy Families program,
the Supplemental Security Income/State Supplementary Program, or a
general assistance program or has demonstrated financial need in
accordance with the methodology set forth in federal law or
regulation for determining the expected family contribution of
students seeking financial aid.
   (2) The governing board of a community college district also shall
waive the fee requirements of this section for any student who
demonstrates eligibility according to income standards established by
regulations of the board of governors.
   (3) Paragraphs (1) and (2) may be applied to a student enrolled in
the 2005-06 academic year if the student is exempted from
nonresident tuition under paragraph (3) of subdivision (a) of Section
76140.
   (h) The fee requirements of this section shall be waived for any
student who, at the time of enrollment, is a dependent, or surviving
spouse who has not remarried, of any member of the California
National Guard who, in the line of duty and while in the active
service of the state, was killed, died of a disability resulting from
an event that occurred while in the active service of the state, or
is permanently disabled as a result of an event that occurred while
in the active service of the state. "Active service of the state,"
for the purposes of this subdivision, refers to a member of the
California National Guard activated pursuant to Section 146 of the
Military and Veterans Code.
   (i) The fee requirements of this section shall be waived for any
student who is the surviving spouse or the child, natural or adopted,
of a deceased person who met all of the requirements of Section
68120.
   (j) The fee requirements of this section shall be waived for any
student in an undergraduate program, including a student who has
previously graduated from another undergraduate or graduate program,
who is the dependent of any individual killed in the September 11,
2001, terrorist attacks on the World Trade Center and the Pentagon or
the crash of United Airlines Flight 93 in southwestern Pennsylvania,
if that dependent meets the financial need requirements set forth in
Section 69432.7 for the Cal Grant A Program and either of the
following applies:
   (1) The dependent was a resident of California on September 11,
2001.
   (2) The individual killed in the attacks was a resident of
California on September 11, 2001.
   (k) A determination of whether a person is a resident of
California on September 11, 2001, for purposes of subdivision (j)
shall be based on the criteria set forth in Chapter 1 (commencing
with Section 68000) of Part 41 for determining nonresident and
resident tuition.
   (l) (1) "Dependent," for purposes of subdivision (j), is a person
who, because of his or her relationship to an individual killed as a
result of injuries sustained during the terrorist attacks of
September 11, 2001, qualifies for compensation under the federal
September 11th Victim Compensation Fund of 2001 (Title IV (commencing
with Section 401) of Public Law 107-42).
   (2) A dependent who is the surviving spouse of an individual
killed in the terrorist attacks of September 11, 2001, is entitled to
the waivers provided in this section until January 1, 2013.
   (3) A dependent who is the surviving child, natural or adopted, of
an individual killed in the terrorist attacks of September 11, 2001,
is entitled to the waivers under subdivision (j) until that person
attains the age of 30 years.
   (4) A dependent of an individual killed in the terrorist attacks
of September 11, 2001, who is determined to be eligible by the
California Victim Compensation and Government Claims Board, is also
entitled to the waivers provided in this section until January 1,
2013.
   (m) (1) It is the intent of the Legislature that sufficient funds
be provided to support the provision of a fee waiver for every
student who demonstrates eligibility pursuant to subdivisions (g) to
(j), inclusive.
   (2) From funds provided in the annual Budget Act, the board of
governors shall allocate to community college districts, pursuant to
this subdivision, an amount equal to 2 percent of the fees waived
pursuant to subdivisions (g) to (j), inclusive. From funds provided
in the annual Budget Act, the
    board of governors shall allocate to community college districts,
pursuant to this subdivision, an amount equal to ninety-one cents
($0.91) per credit unit waived pursuant to subdivisions (g) to (j),
inclusive, for determination of financial need and delivery of
student financial aid services, on the basis of the number of
students for whom fees are waived. Funds allocated to a community
college district for determination of financial need and delivery of
student financial aid services shall supplement, and shall not
supplant, the level of funds allocated for the administration of
student financial aid programs during the 1992 -93 fiscal year.
   (n) The board of governors shall adopt regulations implementing
this section.
  SEC. 34.  Section 89721 of the Education Code is amended to read:
   89721.  Notwithstanding any other provision of law, the chief
fiscal officer of each campus of the California State University
shall deposit into and maintain in local trust accounts or in trust
accounts in accordance with Sections 16305 to 16305.7, inclusive, of
the Government Code, or in the California State University Trust
Fund, moneys received in connection with the following sources or
purposes:
   (a) Gifts, bequests, devises, and donations received under Section
89720.
   (b) Any student loan or scholarship fund program, including but
not limited to, student loan programs of the state, federal
government (including programs referred to in Section 89723), local
government, or private sources.
   (c) Advance payment for anticipated expenditures or encumbrances
in connection with federal grants or contracts.
   (d) Room, board, and similar expenses of students enrolled in the
international program of the California State University.
   (e) Cafeteria replacement funds.
   (f) Miscellaneous receipts in the nature of deposits subject to
return upon approval of a proper application.
   (g) Fees and charges for services, materials, and facilities
authorized by Section 89700 if these fees or charges are required of
those persons who, at their option, use the services or facilities,
or are provided the materials, for which the fees or charges are
made. Fees and charges so received and deposited shall be used solely
to meet the costs of providing these services, materials, and
facilities.
   (h) Fees for instructionally related activities as defined by the
trustees and as authorized by Section 89700 and revenues derived from
the conduct of the instructionally related activities. The trustees
shall have all authority necessary to administer and use the fees and
revenues received and deposited to support such instructionally
related activities.
   (i) Fees for parking, health facilities or health services, and
for extension programs, special sessions, and other self-supporting
instructional programs.
   (j) Revenue received by the trustees from the California State
Lottery Education Fund pursuant to Section 8880.5 of the Government
Code.
   (k) Moneys received by the trustees for research, workshops,
conferences, institutes, and special projects.
   (l) Moneys collected as higher education fees and income from
students of any campus of the California State University and from
other persons pursuant to Section 89700. The Controller shall have
the authority to audit the expenditure of these funds.
  SEC. 35.  (a) For the 2006-07 fiscal year, the Superintendent shall
add to the amount determined pursuant to Section 54022 of the
Education Code for each school district a supplemental adjustment
calculated as follows:
   (1) Calculate the difference between the number six hundred (600)
and the number that is equal to the per pupil economic impact aid
amount for the school district calculated pursuant to subdivision (b)
of Section 54022.
   (2) If the difference pursuant to subdivision (a) is greater than
zero, multiply that difference by the economic impact aid-eligible
pupil count for the school district for the current school year.
   (3) Calculate the available funds factor by dividing the funds
available for supplemental adjustments pursuant to this section, as
specified in subdivision (e), by the product pursuant to subdivision
(b) for all school districts.
   (4) Multiply the amount calculated pursuant to subdivision (b), if
applicable, by the available funds factor calculated in subdivision
(c). The result is the adjustment a school district shall receive for
the 2006-07 fiscal year pursuant to this section.
   (5) Determine the funds available for the supplemental adjustment
according to the following calculation:
   (A) Calculate the total statewide economic impact aid allocation
amount for the 2006-07 fiscal year as the sum of each school
districts allocation determined pursuant to Section 54022 of the
Education Code.
   (B) From the total of funds appropriated for the purposes of this
article in the 2006-07 fiscal year, subtract the amount determined in
paragraph (1). This remainder is the amount of funds available for
the economic impact aid adjustment allocated pursuant to this
section.
   (b) For the 2007-08 fiscal year, the Superintendent shall add to
the economic impact aid per pupil amount calculated pursuant to
subdivision (a) of Section 54022 of the Education Code the quotient
that is equal to the adjustment received by each school district
pursuant to this section in the 2006-07 fiscal year divided by the
economic impact aid-eligible pupil count for the 2006-07 fiscal year.

  SEC. 36.  Notwithstanding subdivision (a) of Section 54022 of the
Education Code, the Superintendent of Public Instruction shall not,
for the 2006-07 fiscal year, increase the prior year economic impact
aid per pupil amount for a school district, as specified in that
subdivision, if the prior year amount is greater than six hundred
dollars ($600).
  SEC. 37.  (a) Three hundred eighty-eight million two hundred
eighty-three thousand dollars ($388,283,000) is hereby appropriated
from the General Fund, for expenditure during the 2007-08 fiscal
year, in accordance with the following schedule:
   (1) Six million two hundred twenty-seven thousand dollars
($6,227,000) to the State Department of Education for apprenticeship
programs to be expended consistent with the requirements specified in
Item 6110-103-0001 of Section 2.00 of the Budget Act of 2006.
   (2) Sixty-three million three hundred ninety-one thousand dollars
($63,391,000) to the State Department of Education for supplemental
instruction to be expended consistent with the requirements specified
in Item 6110-104-0001 of Section 2.00 of the Budget Act of 2006. Of
the amount appropriated by this paragraph, fifty-one million
sixty-one thousand dollars ($51,061,000) shall be expended consistent
with Schedule (1) of Item 6110-104-0001 of Section 2.00 of the
Budget Act of 2006, and twelve million three hundred thirty thousand
dollars ($12,330,000) shall be expended consistent with Schedule (2)
of that item.
   (3) Twenty-six million seven hundred twenty-six thousand dollars
($26,726,000) to the State Department of Education for the Pupil
Retention Block Grant to be expended consistent with the requirements
specified in Item 6110-243-0001 of Section 2.00 of the Budget Act of
2006.
   (4) Thirty-nine million six hundred thirty thousand dollars
($39,630,000) to the State Department of Education for regional
occupational centers and programs to be expended consistent with the
requirements specified in Schedule (1) of Item 6110-105-0001 of
Section 2.00 of the Budget Act of 2006.
   (5) Fifty-two million five hundred eighty-three thousand dollars
($52,583,000) to the State Department of Education for home-to-school
transportation to be expended consistent with the requirements
specified in Schedule (1) of Item 6110-111-0001 of Section 2.00 of
the Budget Act of 2006.
   (6) Four million two hundred ninety-four thousand dollars
($4,294,000) to the State Department of Education for the Gifted and
Talented Pupil Program to be expended consistent with the
requirements specified in Item 6110-124-0001 of Section 2.00 of the
Budget Act of 2006.
   (7) Forty-five million eight hundred ninety-six thousand dollars
($45,896,000) to the State Department of Education for adult
education to be expended consistent with the requirements specified
in Schedule (1) of Item 6110-156-0001 of Section 2.00 of the Budget
Act of 2006.
   (8) Four million seven hundred fifty-one thousand dollars
($4,751,000) to the State Department of Education for community day
schools to be expended consistent with the requirements specified in
of Item 6110-190-0001 of Section 2.00 of the Budget Act of 2006.
   (9) Five million nine hundred forty-seven thousand dollars
($5,947,000) to the State Department of Education for categorical
block grants for charter schools to be expended consistent with the
requirements specified in Item 6110-211-0001 of Section 2.00 the
Budget Act of 2006.
   (10) Thirty-eight million seven hundred twenty thousand dollars
($38,720,000) to the State Department of Education for the School
Safety Block Grant to be expended consistent with the requirements
specified in Schedule (1) of Item 6110-228-0001 of Section 2.00 of
the Budget Act of 2006.
   (11) One hundred million one hundred eighteen thousand dollars
($100,118,000) to the State Department of Education for Targeted
Instructional Improvement Grant Program to be expended consistent
with the requirements specified in Item 6110-246-0001 of Section 2.00
of the Budget Act of 2006.
   (b) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, the
appropriations made by subdivision (a) shall be deemed to be "General
Fund revenues appropriated for school districts," as defined in
subdivision (c) of Section 41202 of the Education Code, for the
2007-08 fiscal year, and included within the "total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated pursuant to Article XIII B," as
defined in subdivision (e) of Section 41202 of the Education Code,
for the 2007-08 fiscal year.
  SEC. 38.  (a) Two hundred million dollars ($200,000,000) is hereby
appropriated to the Board of Governors of the California Community
Colleges for apportionments to community college districts, for
expenditure during the 2007 -08 fiscal year, to be expended in
accordance with the requirements specified in Schedule (1) of Item
6870-101-0001 of Section 2.00 of the Budget Act of 2006.
   (b) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, the
appropriation made by subdivision (a) of this section shall be deemed
to be "General Fund revenues appropriated for community college
districts," as defined in subdivision (d) of Section 41202 of the
Education Code, for the 2007-08 fiscal year, and included within the
"total allocations to school districts and community college
districts from General Fund proceeds of taxes appropriated pursuant
to Article XIII B," as defined in subdivision (e) of Section 41202 of
the Education Code, for the 2007-08 fiscal year.
  SEC. 39.  Notwithstanding any other law, the funds appropriated
pursuant to Items 6110-103-0001, 6110-104-0001, 6110-105-0001,
6110-156-0001, 6110-161-0001, 6110-190-0001, 6110-211-0001, and
6110-243-0001 of Section 2.00 of the Budget Act of 2006 shall be
available for liquidation through July 31, 2009, and after that date,
all remaining unexpended funds in those items shall revert to the
Proposition 98 Reversion Account.
  SEC. 40.  (a) (1) Notwithstanding subdivision (d) of Section 41207
of the Education Code, the sum of sixteen million eight hundred
eleven thousand dollars ($16,811,000) of the funds appropriated in
Section 21 of Chapter 491 of the Statutes of 2005 and one hundred
thirty-three million one hundred eighty-nine thousand dollars
($133,189,000) of the funds appropriated in subdivision (a) of
Section 44 of this act shall be in lieu of the amount of one hundred
fifty million dollars ($150,000,000) that would have otherwise been
appropriated for the 2006-07 fiscal year pursuant to subdivision (d)
of Section 41207 of the Education Code.
   (2) One hundred twenty-five million dollars ($125,000,000) of the
amount described in subparagraph (A) of, and the twenty-five million
dollars ($25,000,000) described in subparagraph (B) of, paragraph (3)
of subdivision (a) of Section 44 of this act shall be in lieu of the
amount of one hundred fifty million dollars ($150,000,000) that
would have otherwise been appropriated for the 2007-08 fiscal year
required pursuant to subdivision (d) of Section 41207.
  SEC. 41.  Notwithstanding Sections 42238.1 and 42238.15 of the
Education Code or any other law, the cost-of-living adjustment for
Items 6110-104-0001, 6110-105-0001, 6110-156-0001, 6110-158-0001,
6110-161-0001, 6110-189-0001, 6110-190-0001, 6110-196-0001,
6110-232-0001, 6110-234-0001, 6110-244-0001, and 6110-246-0001 of
Section 2.00 of the Budget Act of 2006, and those items identified in
subdivision (b) of Section 12.40 of the Budget Act of 2006, shall be
5.92 percent. All funds appropriated in the items identified in this
section are in lieu of the amounts that would otherwise be
appropriated pursuant to any other law.
  SEC. 42.  (a) The amount of three hundred fifty million dollars
($350,000,000) is hereby appropriated from the General Fund to the
Superintendent of Public Instruction for the 2006-07 fiscal year for
the purposes of Section 42238.48 of the Education Code, to be
allocated to school districts on a prorated basis.
   (b) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, the
appropriation made by subdivision (a) shall be deemed to be "General
Fund revenues appropriated for school districts," as defined in
subdivision (c) of Section 41202 of the Education Code, for the
2006-07 fiscal year, and included within the "total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated pursuant to Article XIII B," as
defined in subdivision (e) of Section 41202 of the Education Code,
for the 2006-07 fiscal year.
  SEC. 43.  (a) Two billion three hundred five million six hundred
ninety-five thousand dollars ($2,305,695,000) is hereby appropriated
from the General Funds for the 2005-06 fiscal year in accordance with
the following schedule:
   (1) Six hundred fifty million sixty-two thousand dollars
($650,062,000) to the Controller for allocation as appropriate for
the reimbursement of state-mandated local cost claims submitted by
local education agencies for the 1995 -96 to 2005-06 fiscal years,
inclusive.
   (A) The Controller shall use the funds described in this paragraph
to pay claims submitted by school districts and county offices of
education pursuant to Chapter 4 (commencing with Section 17550) of
Part 7 of Division 4 of Title 2 of the Government Code for the
1995-96 to 2005-06 fiscal years, inclusive. The Controller shall pay
the claims according to the following order of priority:
   (i) First, the oldest claims no longer subject to audit pursuant
to subdivision (a) of Section 17558.5 of the Government Code,
including accrued interest.
   (ii) Second, claims still subject to audit pursuant to subdivision
(a) of Section 17558.5 of the Government Code, including accrued
interest. The Controller may adjust the amounts paid for these claims
on the basis of the final audits. Any repayment resulting from an
audit may be counted towards future claims submitted by the local
educational agency.
   (B) No payments shall be made for any claims for the Standardized
Testing and Reporting (STAR) or National Norm-Referenced Achievement
Test programs, Schoolsite Councils, Brown Act and Open Meetings Act,
School Bus Safety II, Grand Jury Proceedings, or the removal of
chemicals.
   (2) Four hundred million one hundred twenty-five thousand dollars
($400,125,000) to the Superintendent of Public Instruction for
allocation to school districts according to the following provisions:

   (A) The funds appropriated pursuant to this paragraph shall be
allocated to school districts on the basis of an equal amount per
pupil enrolled in the district in the 2006-07 fiscal year, including
pupils enrolled in adult education programs and pupils enrolled in
regional occupational centers and programs based on the fall
California Basic Educational Data System (CBEDS) enrollment data,
except that pupil enrollment in adult education programs and regional
occupational centers and programs shall be determined based on their
calculated average daily attendance (ADA) for base funding
allocations. The ADA for this purpose shall be considered final as of
the second principal apportionment for fiscal year 2006-07. The
governing board of each school district shall allocate the funds on
an equal per-pupil basis to the schools within its jurisdiction for
expenditure pursuant to this section. The Superintendent of Public
Instruction shall make an initial apportionment of up to 75 percent
of the funds on the basis of the enrollment in the 2005-06 fiscal
year and shall make a final apportionment of the remaining funds in a
manner that ensures that the total funds apportioned pursuant to
this section are distributed on the basis of 2006-07 enrollment or
ADA, as applicable.
   (B) For the purposes of this paragraph, "school" shall include
locally funded charter schools that have pupils who are currently
enrolled and that have a current county-district-school (CDS) code,
as maintained by the Superintendent of Public Instruction as of July
1, 2006. The use of the funds allocated to charter schools pursuant
to this section shall further the program specified in the school's
charter and shall not be allocated to parents, pupils, or staff of
the charter school.
   (C) The use of funds allocated pursuant to this paragraph for
schools under the jurisdiction of a school district shall be proposed
by each school's schoolsite council of each school, or, if the
school does not have a schoolsite council pursuant to Section 52852
of the Education Code, by schoolwide advisory groups or school
support groups. Funds shall be allocated to all school sites
including adult education schools and regional occupational centers.
For adult schools, the school shall develop an adult school advisory
committee which shall consist of the school principal or director,
teachers representing a variety of academic disciplines, adult
education students, and community business leaders.
   (D) The funds apportioned pursuant to this paragraph may be
expended for any one-time educational purpose including, but not
limited to, instructional materials, classroom and laboratory
supplies and materials, school and classroom library materials,
educational technology, deferred maintenance, one-time expenditures
designed to close the achievement gap, or professional development.
Before funds allocated pursuant this section may be encumbered or
expended, the governing board of the school district shall approve
the proposed use. If the governing board of a school district does
not approve the use proposed pursuant to this paragraph, no
expenditures of the specified funds may be made and the governing
board of the school district shall inform the schoolsite council,
schoolwide advisory group, or school support group, as applicable, of
the reasons why the proposal was disapproved. If the schoolsite
council, schoolwide advisory group, or school support group, as
applicable, and the governing board of the school district are unable
to agree on the use of the funds by May 1, 2007, the dispute shall
be immediately submitted to the county board of education. The county
board of education shall resolve the dispute within 30 days of
submission. The decision of the county board of education shall be
final.
   (E) The use of funds allocated pursuant to this paragraph for
schools under the jurisdiction of a county office of education shall
be proposed by each school's schoolwide advisory group or school
support group. The proposals shall be approved by the county board of
education prior to expenditure of the funds allocated pursuant to
paragraph (1).
   (F) For purposes of this paragraph, "school district" means a
school district, county office of education, state special school, or
direct-funded charter school, as described in paragraph (1) of
subdivision (a) of Section 47651 of the Education Code.
   (G) The funds apportioned under this paragraph shall be allocated
with a minimum of five thousand dollars ($5,000) for schoolsites of
25 or fewer pupils and ten thousand dollars ($10,000) for schoolsites
of more than 25 pupils.
   (3) One hundred thirty-three million three hundred seventy-five
thousand dollars ($133,375,000) to the Superintendent for allocation
to school districts according to the following provisions:
   (A) The funds appropriated pursuant to this paragraph shall be
apportioned to school districts on the basis of an equal amount per
pupil enrolled in the district in the 2006-07 fiscal year, including
pupils enrolled in adult education programs and pupils enrolled in
regional occupational centers and programs based on the fall
California Basic Educational Data System (CBEDS) enrollment data,
except that pupil enrollment in adult education programs and regional
occupational centers and programs shall be determined based on their
calculated average daily attendance (ADA) for base funding
allocations. The ADA for this purpose shall be considered final as of
the second principal apportionment for the 2006-07 fiscal year. The
Superintendent of Public Instruction shall make an initial
apportionment of up to 75 percent of the funds on the basis of the
enrollment in the 2005-06 fiscal year and shall make a final
apportionment of the remaining funds in a manner that assures that
the total funds apportioned pursuant to this section are distributed
on the basis of 2006-07 enrollment, or ADA, as applicable.
   (B) The funds apportioned pursuant to this paragraph may be
expended for instructional materials, classroom and laboratory
supplies and materials, school and classroom library materials,
educational technology, deferred maintenance, professional
development, home-to-school transportation, one-time expenditures
designed to close the achievement gap, or outstanding one-time fiscal
obligations of school districts.
   (C) It is the intent of the Legislature that to the extent a
school district allocates funds appropriated pursuant to this
paragraph for the benefit of school sites, the district shall expend
funds for the benefit of charter schools, including direct-funded
charter schools, on an equitable basis.
   (D) The funds apportioned under this paragraph shall be allocated
with a minimum of ten thousand dollars ($10,000) per school district.

   (4) One hundred million dollars ($100,000,000) from the General
Fund on a one-time basis for allocation by the Superintendent of
Public Instruction to school districts, charter schools, and county
offices of education on the basis of enrollment in the 2005-06 fiscal
year according to the fall CBEDS enrollment data. That allocation
shall be used solely for any of the following:
   (A) Instructional materials.
   (B) School and classroom library materials.
   (C) One-time educational technology costs, as provided in this
section.
   (5) Eleven million five hundred thirty-three thousand dollars
($11,533,000) on a one-time basis to be available for expenditure by
June 30, 2009, as follows:
   (A) Nine million five hundred thousand dollars ($9,500,000) for
allocation to school districts, charter schools, and county office of
education to provide funds to local educational agencies that have
not previously received funding pursuant to the California School
Information Services. These funds may be combined with the funds
appropriated for this purpose in Item 6110-101-0349 of the annual
Budget Act for the 2006-07 fiscal year. Funds shall be allocated
pursuant to Section 49084 of the Education Code for activities
consistent with an implementation plan developed by the California
School Information Services, to be jointly approved by the Department
of Finance, the Office of the Secretary for Education, and the State
Department of Education, in consultation with the Legislative
Analyst's Office.
   (B) One million five hundred thousand dollars ($1,500,000) is
available to the State Department of Education for transfer of five
hundred thousand dollars ($500,000) per year over three fiscal years
to the California School Information Services to be used to support
staffing and for administrative costs associated with an increased
workload pursuant to subparagraph (A).
   (C) Five hundred thirty-three thousand dollars ($533,000) is
available to the State Department of Education to the California
School Information Services for use to purchase one-time equipment,
hardware, and software consistent with an implementation plan
developed by the California School Information Services, to be
jointly approved by the Department of Finance, the Office of the
Secretary for Education, and the State Department of Education, in
consultation with the Legislative Analyst's Office.
   (6) Ten million dollars ($10,000,000) on a one-time basis for
transfer to Section A of the State School Fund for allocation by the
Superintendent of Public Instruction to school districts, charter
schools, and county offices of education for the following purposes:

   (A) School districts with outstanding long-term fiscal obligations
concerning retired employee nonpension benefits may apply for
funding upon completing a plan for meeting those obligations. As a
requirement of receipt of funding, districts must submit these plans
to the county superintendent of education as part of the budget
review process.
   (B) County superintendents of education may apply for funding for
consideration of plans submitted pursuant to this section during the
course of reviewing the budget of a school district.
   A local educational agency may not receive an amount greater than
fifteen thousand dollars ($15,000) for activities related to this
paragraph.
   (7) Ten million dollars ($10,000,000) on a one-time basis to the
Superintendent of Public Instruction for the purpose of providing
Healthy Start Program grants to school districts or charter schools
that have not previously received a Healthy Start grant. The grant
shall be provided on a competitive basis and shall provide full
funding for both collaborative planning and operational grants in the
2006-07 fiscal year. Collaborative planning grants and operational
grants may be expended over a seven-year period.
                                              (8) Three million
dollars ($3,000,000) to the State Department of Education for
allocation to school districts, charter schools, and county offices
of education to fund grants during the 2006-07 school year for
startup school breakfast and summer food service programs under
Section 49550.3 of the Education Code.
   (9) Fifteen million dollars ($15,000,000) to the Superintendent of
Public Instruction for allocation to school districts and charter
schools on a one-time basis for purposes of parental involvement
activities pursuant to Article 2 (commencing with Section 51120) of
Chapter 1.5 of Part 28 of the Education Code.
   (10) Thirty million dollars ($30,000,000) on a one-time basis to
provide supplemental instructional materials specifically for English
learners in kindergarten and grades 1 to 12, inclusive. The purpose
of these materials will be to accelerate pupils as rapidly as
possible towards grade level proficiency. The funds shall be used to
purchase supplemental materials that are designed to help English
learners become proficient in reading, writing, and speaking English.
These materials may only be used in addition to the
standards-aligned materials adopted by the State Board of Education
pursuant to Section 60605 of the Education Code.
   (A) Local educational agencies shall be eligible for apportionment
funding of up to twenty-five dollars ($25) per pupil, based on the
most recently certified language census number of English learners in
kindergarten and grades 1 to 12, inclusive, to purchase any
materials that the State Department of Education verifies and the
State Board of Education approves are substantially correlated to
identified state standards adopted pursuant to Section 60811 of the
Education Code, as applied in the standards adopted pursuant to
Section 60605 of the Education Code. Funding may be provided only for
the number of pupils that the local educational agency certifies it
will purchase materials for pursuant to subparagraph (D). Local
educational agencies may expend no more than thirty dollars ($30) per
pupil from these funds for these materials. Local educational
agencies shall return to the state any funds allocated under this
subparagraph that are not expended for purchase of materials pursuant
to this provision.
   (B) The State Department of Education shall use the existing
correlation matrices pursuant to Item 6110-189-0001 of Section 2.00
of Chapter 208 of the Statutes of 2004 to determine if the
instructional materials correlate to the English-language arts and
English language development standards adopted by the State Board of
Education.
   (C) Prior to submission of materials to the department for review
to ensure that the materials correlate to identified standards,
publishers shall be required to submit standards maps to the
department and any requesting local education agency so that the
department and the local educational agency can determine the extent
to which each item, if purchased separately, or set of instructional
materials for English learners are correlated to the standards
adopted by the State Board of Education. The standards maps shall be
filled out using the most recent format approved by the State Board
of Education. The contents for the standards map will be the
correlation matrix as described in subparagraph (B).
   (D) As a condition of receipt of funds, local educational agencies
that elect to participate shall do one, or both, of the following:
   (i) No later than March 30, 2007, submit a request for review,
specifying the title, ISBN number, grade levels, type, and publisher
of the materials they intend to purchase, and the number of pupils
for which materials may be purchased.
   (ii) Identify materials from the existing list of materials
approved by the State Board of Education specifying the information
described in clause (i).
   (E) After a local educational agency notifies the State Department
of Education of its request for review of materials, the department
may select and train panels of teachers and educators to verify the
standards maps provided by the publishers and examine the materials
for legal and social compliance. The department will also provide an
appeals process to allow due process review of discrepancies of
findings in the verification process. The verification shall not
constitute a state adoption of instructional materials pursuant to
Section 60200 of the Education Code. The department shall give first
priority in verifying correlation to identified state standards to
those materials that are most commonly cited in the intent of school
districts to purchase provided under subparagraph (D). The department
shall submit its verification results to the State Board of
Education for approval and the State Board of Education shall approve
or disapprove the materials at the next regularly scheduled meeting
after receipt of the verification of the department, in accordance
with public notification requirements.
   (11) Nine million dollars ($9,000,000) to the Superintendent of
Public Instruction for allocation to charter schools for the Charter
School Facility Grant Program pursuant to Section 47614.5 of the
Education Code.
   (12) Five million dollars ($5,000,000) to the State Department of
Mental Health for the purpose of funding the full costs of the
operational grants for a new cohort of grants over a multiyear period
for the School-Based Early Mental Health Intervention and Prevention
Services Matching Grant Program pursuant to Chapter 2 (commencing
with Section 4380) of Part 4 of Division 4 of the Welfare and
Institutions Code.
   (13) Twenty million dollars ($20,000,000) to the Superintendent of
Public Instruction for local assistance costs of a multiyear
research pilot project to identify best practices for improving the
academic achievement and English language development of English
learners pursuant to legislation enacted during the 2005-06 Regular
Session of the Legislature.
   (14) Forty million dollars ($40,000,000) for transfer to Section A
of the State School Fund for allocation to school districts,
regional occupational centers and programs, adult education
providers, charter schools and county offices of education that offer
career technical education programs for the purchase of equipment
and supplies, and minor facility reconfigurations for career
technical education courses. Funds appropriated in this paragraph
shall be allocated in accordance with, and are subject to, all of the
following conditions:
   (A) Funds shall be allocated on the basis of an equal amount per
student enrolled in career technical education courses based on
2005-06 enrollment for grades 7 to 12, inclusive, as determined by
the Superintendent of Public Instruction. In no event shall an
eligible local educational agency receive less than three thousand
two hundred and fifty dollars ($3,250), provided all other conditions
of this paragraph are satisfied.
   (B) This allocation shall be used solely for purchases of
equipment and supplies for career technical education courses and any
necessary minor facility configurations or improvements to remove
old equipment or to utilize the new equipment.
   (C) Prior to the allocation of funds to any local educational
agency, the receiving agency shall do all of the following:
   (i) Provide to the State Department of Education an expenditure
plan for approval by the department that has been developed in
consultation with the career technical education advisory committee
established pursuant to Section 8070 of the Education Code.
   (ii) Agree to notify the career technical education advisory
committee prior to disposing of any existing equipment or purchasing
any new equipment used for career technical education.
   (iii) Provide any other information determined by the
Superintendent of Public Instruction deemed necessary to ensure this
funding is effectively utilized to sustain and expand attendance in
high quality career technical education programs.
   (D) Of the funds appropriated in this paragraph, two million five
hundred thousand dollars ($2,500,000) shall be used for capacity
building incentive grants for grades 7 to 12, inclusive, to enhance
existing, or establish new, health-related career pathway programs in
grades 7 to 12, inclusive. Funds shall be used for standards-based
curriculum development, development of a sequence of courses, and
materials and equipment. The State Department of Education shall
report to the Legislature and the Governor on the use of the funds
described in this subparagraph on or before January 1, 2008.
   (15) Four million dollars ($4,000,000) to the Superintendent of
Public Instruction as local assistance funds for support of the K-12
High-Speed Network.
   (16) Five hundred million dollars ($500,000,000) for transfer to
Section A of the State School Fund for allocation by the
Superintendent of Public Instruction to school districts, charter
schools, and county offices of education on the basis of an equal
amount per unit of average daily attendance, as defined in
subdivision (b) of Section 42235.5 of the Education Code, and
including average daily attendance used to compute funding for small
school districts pursuant to Article 4 (commencing with Section
42280) of Chapter 7 of Part 24 of the Education Code, reported for
the second principal apportionment for the 2005-06 fiscal year
pursuant to Section 41601 of the Education Code.  However, a public
school shall not receive less than two thousand five hundred dollars
($2,500). That allocation shall be used solely for one or both of the
following:
   (A) Art and music supplies and equipment.
   (B) Physical education supplies and equipment.
   (17) Fifty million dollars ($50,000,000) for transfer to the Child
Care Facilities Revolving Fund to address facilities needs for the
expansion of the State Preschool Program, pursuant to legislation
enacted during the 2005 -06 Regular Session of the Legislature.
Funding shall be available for the renovation, repair, or improvement
of an existing building and for the purchase of new relocatable
child care facilities, in accordance with Education Code Section
8278.3.
   (18) Five million five hundred thousand dollars ($5,500,000) to
the Superintendent of Public Instruction for allocation to local
educational agencies for the purpose of funding the purchase of
state-approved individual intervention materials for students who
have failed the California High School Exit Examination.
   (A) Local educational agencies shall be eligible for apportionment
funding of twenty dollars ($20) per pupil based on the number of
pupils in grades 11 through 12, inclusive, who have failed to pass
one or both portions of the California High School Exit Examination.
Funds shall be used to purchase any materials recommended by the
State Department of Education and approved by the State Board of
Education for these purposes.
   (B) Individual intervention materials approved pursuant to this
section shall meet the following criteria:
   (i) Assist students in mastering standards necessary to
successfully pass the California High School Exit Examination.
   (ii) Include a computer-based component that adapts to each
student's specific remediation needs.
   (iii) Include appropriate professional development support for
teachers.
   (C) The State Department of Education shall issue a request for
proposals to vendors to develop, produce, and make available
workbooks meeting the specifications described in subparagraph (B) at
a cost no greater than twenty dollars ($20) per workbook. Based on
this request for proposal process, the department shall recommend a
vendor or vendors to the State Board of Education for approval.
   (19) The sum of one million eight hundred thousand dollars
($1,800,000) to the Superintendent of Public Instruction for
implementation of the Mathematics Teacher Partnership Pilot Program.

   (A) The Superintendent of Public Instruction shall select, on a
competitive basis, a county office of education or consortia of
county offices of education to provide one-time funding for the
establishment of the Mathematics Teacher Pilot Program. The funding
shall be allocated no later than August 1, 2006, or 30 days following
enactment of the Budget Act of 2006, whichever date is later, and
shall be available for expenditure to the successful bidder for the
2006-07 and 2007-08 fiscal years.
   (B) The successful bidder shall use the funds provided to
implement a regional Math Teacher Pilot Project in at least three
counties to accomplish the following objectives:
   (i) Increase the number of qualified secondary-level math teachers
and increase the likelihood that such teachers will remain in the
teaching profession. These activities shall build upon current state
efforts to increase the number of new secondary-level math teachers.

   (ii) Improve and raise the capacity of secondary-level teachers
who teach mathematics.
   (iii) Provide professional development to teachers aimed at
improving their ability to convey rigorous content and motivate
students toward careers in teaching mathematics.
   (iv) Provide professional development for teachers in how to
assist students who are struggling to meet proficiencies required to
pass the mathematics portion of the California High School Exit
Examination.
   (C) (i) The county office of education receiving the funding shall
monitor and report on the results of the pilot programs to identify
models for replication in other service areas throughout the state.
   (ii) The county office of education receiving the funding shall
submit annual progress reports to the Legislature, the Department of
Finance, the Superintendent of Public Instruction, the Office of the
Secretary of Education, the State Board of Education, the Governor,
and the Legislative Analyst's Office. These reports shall include,
but not be limited to, information on outcomes related to the number,
quality and capacity of secondary-level math teachers in pilot
schools; statistics regarding unmet demand for secondary-level math
teachers in pilot schools; types of incentives and support provided
to teachers; passage rates of students on the mathematics portion of
the California High School Exit Examination; and lessons learned
about effective or ineffective activities and strategies.  These
reports shall be submitted on or before August 1, 2007, and August 1,
2008.
   (20) Fifty million dollars ($50,000,000) to the Superintendent of
Public Instruction for teacher recruitment and retention for
allocation to the governing board of a school district that has a
school or schools that are ranked in deciles 1 to 3, inclusive, of
the 2005 base Academic Performance Index, as defined in Section 52052
of the Education Code, for one or more such qualifying schools in
accordance with the following:
   (A) As a condition of receipt of funds, the district governing
board shall adopt a plan for use of the funds within the qualifying
schools. The plan shall be discussed and adopted at a regularly
scheduled governing board meeting.
   (B) Each applicant district shall receive fifty dollars ($50) per
pupil based upon the number of pupils in qualifying schools within
the district.
   (C) The funds shall be used for the purposes of improving the
educational culture and environment at those schools, which may
include, but are not limited to, the following specific purposes:
   (i) Assuring a safe, clean school environment for teaching and
learning.
   (ii) Providing support services for students, and teachers.
   (iii) Activities, including differential compensation, focused on
the recruitment and retention at those schools of teachers who meet
the definition of a highly qualified teacher under the No Child Left
Behind Act of 2001 (20 U.S.C.  Sec. 6301 et seq.).
   (iv) Activities, including differential compensation, focused on
the recruitment and retention at those schools of highly skilled
principals.
   (v) Small group instruction.
   (vi) Providing time for teachers and principals to collaborate
regarding improving academic outcomes for students.
   (D) To the extent that funding is insufficient to fund all
eligible applicants, the amount provided shall be prorated to conform
to available funds.
   (21) Ninety-four million one hundred forty-four thousand dollars
($94,144,000) for transfer by the Controller to Section B of the
State School Fund for the purpose of providing one-time block grants
to community college districts for physical plant and instructional
support, for the 2005-06 fiscal year subject to the following
provisions:
   (A) Forty-seven million seventy-two thousand dollars ($47,072,000)
shall be available for scheduled maintenance and special repairs of
facilities and forty-seven million seventy-two thousand dollars
($47,072,000) shall be available for the replacement of instructional
equipment and library materials.
   (B) Community college districts shall expend the allocations made
pursuant to this paragraph for the purpose of one-time expenditures,
including high priority instructional equipment and library material
replacement; technology infrastructure; scheduled maintenance and
special repairs; hazardous substances abatement, cleanup and repairs;
and architectural barrier removal and seismic retrofit projects
limited to $400,000.
   (C) The Chancellor of the Community Colleges shall allocate the
amount appropriated for the one-time block grants in subparagraph (A)
to community college districts on an equal amount per actual
full-time equivalent student attendance reported for the 2005-06
fiscal year, except that each community college district shall be
allocated an amount not less than one hundred thousand dollars
($100,000), and the equal amount per unit of full-time attendance
shall be computed accordingly.
   (D) These funds shall supplement and not supplant existing
expenditures and may not be counted as the district match for
physical plant projects and instructional material purchases funded
in Item 6870-101-0001 of Section 2.00 of the Budget Act of 2006.
   (22) Seventy-seven million seven hundred thousand dollars
($77,700,000) for transfer by the Controller to Section B of the
State School Fund for the purpose of providing one-time general
purpose block grants to community college districts, for the 2005-06
fiscal year. The Chancellor of the Community Colleges shall allocate
the amount appropriated for the one-time block grants in this
paragraph to community college districts in an equal amount per
actual full-time equivalent student attendance reported for the
2005-06 fiscal year, except that each community college district
shall be allocated an amount not less than one hundred thousand
dollars ($100,000), and the equal amount per unit of full-time
attendance shall be computed accordingly. Community college districts
may expend the allocations made pursuant to this section for the
purpose of any appropriate one-time expenditure. However, these funds
may not be counted as the required local contribution for physical
plant projects or instructional material purchases funded in Item
6870-101-0001 of Section 2.00 of the Budget Act of 2006.
   (23) Forty million dollars ($40,000,000) for transfer by the
Controller to Section B of the State School Fund for the purpose of
providing one-time grants to community college districts, for career
technical education equipment, materials and minor facility
remodeling. The Chancellor of the Community Colleges shall allocate
the amount appropriated for the one-time grants in this paragraph to
community college districts on an equal amount per actual full-time
equivalent student attendance reported for the 2005-06 fiscal year,
except that each community college district shall be allocated an
amount not less than one hundred thousand dollars ($100,000), and the
equal amount per unit of full-time attendance shall be computed
accordingly. Community college districts shall expend the allocations
made pursuant to this section for the purpose of one-time
expenditures for career technical education equipment, materials, and
facility reconfigurations or improvements necessary to remove old or
install new equipment. Any equipment that has been replaced with
funds provided in this subdivision shall be made available to high
schools in the region served by the district to the extent it may
benefit career technical education in the high schools.
   (24) Nineteen million seven hundred ten thousand dollars
($19,710,000) for transfer by the Controller to Section B of the
State School Fund for the purpose of providing one-time grants to
community college districts, for purposes specified in legislation
enacted during the 2005-06 Regular Session.
   (25) Fifteen million dollars ($15,000,000) to the Controller for
allocation to community college districts for the reimbursement of
state-mandated local cost claims submitted by community college
districts for the 1995-96 to 2005-06 fiscal years, inclusive. The
Controller shall use the funds appropriated in this paragraph to pay
for claims submitted by community college districts for the 1995-96
to 2005-06 fiscal years, inclusive. The Controller shall pay claims
according to the following order of priority:
   (A) First, the oldest claims no longer subject to audit pursuant
to subdivision (a) of Section 17558.5 of the Government Code,
including accrued interest.
   (B) Second, claims still subject to audit pursuant to subdivision
(a) of Section 17558.5 of the Government Code, including accrued
interest. The Controller may adjust the amounts paid for these claims
on the basis of the final audits. Any repayment resulting from an
audit may be counted towards future claims submitted by the local
educational agency.
   (26) Five hundred thousand dollars ($500,000) from the General
Fund for transfer by the Controller to Section B of the State School
Fund for the purpose of providing one-time grants to community
college districts, for the following purposes:
   (A) The establishment or expansion of nursing student clinical
placement registries in all regions of the state for the benefit of
nursing students and programs serving community college students and
students from the University of California and the California State
University.
   (B) To establish an on-line community college nursing faculty
registry.
   (C) It is the intent of the Legislature that the one-time projects
funded pursuant to this paragraph will be self-sustaining through
annual user fees from participating colleges and universities.
   (27) One million four hundred forty-six thousand dollars
($1,446,000) from the General Fund for transfer by the Controller to
Section B of the State School Fund for the purpose of providing
one-time grants to community college districts for sites to complete
connection to the California Research and Education Network. To the
extent that there are insufficient moneys to fund all applications,
the funding shall be allocated on a first come first serve basis.
These funds shall only be given to districts with college sites that
do not currently have the ability to connect to the California
Research and Education Network.
   (28) Five hundred thousand dollars ($500,000) for transfer by the
Controller to Section B of the State School Fund for the purpose of
providing one-time funding to the community colleges for research and
statewide leadership activities related to the implementation of a
community college system strategic plan adopted by the Board of
Governors in January 2006. The funds shall be used for reimbursement
o expenditures incurred by community college representatives
assisting in the shared governance implementation of the strategic
plan. At least ninety percent of the appropriated funds shall be
expended for short-term applied research necessary to guide the
implementation of strategic initiatives identified in the plan,
including removal of barriers for student access and success,
innovative programs and outreach, improved assessment and placement,
improved articulation with elementary and secondary schools and
four-year institutions, teaching and learning effectiveness,
innovative practices in workforce education and accountability
research for the community colleges. No more than ten percent of the
appropriated funds shall be available for reimbursement of release
time and transportation expenses of community college representatives
assisting in the shared governance advice and implementation of the
strategic plan.
   (29) Seven hundred thousand dollars ($700,000) for transfer by the
Controller to Section B of the State School Fund for the purpose of
providing one-time funding to the community colleges to develop and
implement an Electronic Transcript Exchange.
   (30) Two million five hundred thousand dollars ($2,500,000) for
transfer by the Controller to Section B of the State School Fund to
fund a pilot grant program designed to recruit and retain existing
full-time nursing faculty.  Funds shall be available for three years,
through the 2008-09 fiscal year. The Board of Governors shall adopt
criteria to allocate these funds to districts on a competitive basis
to maximize their effectiveness. The Chancellor shall submit the
grant criteria to the Department of Finance and the Legislature for
review not less than 30 days prior to releasing a request for
proposals. On or before January 10, 2009, the Chancellor shall submit
to the Legislature and the Department of Finance a report listing
the grant recipients, describing how the grant funds were used, and
assessing the effectiveness of the grant funds in retaining and
recruiting nursing faculty. It is the intent of the Legislature to
use the information contained in the report to help decide whether to
extend or expand the pilot program beyond the 2008-09 fiscal year.
   (31) Five million dollars ($5,000,000) for transfer by the
Controller to Section B of the State School Fund for one-time
expenditure by the community colleges in support of faculty and staff
professional development programs established by Article 5 Chapter 1
of Part 51 of the Education Code, beginning with Section 87150 of
the Education Code. The Chancellor shall allocate funds to each
community college district that complies with the requirements of
Section 87151 of the Education Code on an equal basis per full-time
equivalent student.
   (32) One hundred thousand dollars ($100,000) for transfer by the
Controller to Section B of the State School Fund for allocation to
the Amador County Office of Education for distance education
equipment for purposes of broadcasting community college courses in
Amador County.
                         (b) For the purposes of making the
computations required by Section 8 of Article XVI of the California
Constitution, the appropriation made by subdivision (a) shall be
deemed to be "General Fund revenues appropriated for school
districts," as defined in subdivision (c) of Section 41202 of the
Education Code, and "General Fund revenues appropriated for community
college districts," as defined in subdivision (d) of Section 41202
of the Education Code, for the 2005-06 fiscal year, and included
within the "total allocations to school districts and community
college districts from General Fund proceeds of taxes appropriated
pursuant to Article XIII B," as defined in subdivision (e) of Section
41202 of the Education Code, for the 2005-06 fiscal year.
  SEC. 44.  (a) Two hundred eighty-three million one hundred
eighty-nine thousand dollars ($283,189,000) is hereby appropriated
from the General Fund for transfer to the Controller to pay for prior
year claims, including interest, for reimbursement of state-mandated
costs.
   (1) The Controller shall use the funds appropriated in this
section to pay school districts, county offices of education, and
community college districts for claims submitted by any of those
local educational agencies for the 1995 -96 to 2005-06 fiscal years,
inclusive. The Controller shall pay claims according to the following
order of priority:
   (A) First, the oldest claims no longer subject to audit pursuant
to subdivision (a) of Section 17558.5 of the Government Code,
including accrued interest.
   (B) Second, claims still subject to audit pursuant to subdivision
(a) of Section 17558.5 of the Government Code, including accrued
interest. The Controller may adjust the amounts paid for these claims
on the basis of the final audits. Any repayment resulting from an
audit may be counted towards future claims submitted by the local
educational agency.
   (2) No payments shall be made for any claims for the Standardized
Testing and Reporting (STAR) or National Norm-Referenced Achievement
Test programs, Schoolsite Councils, Brown Act and Open Meetings Act,
School Bus Safety II, Grand Jury Proceedings, or the removal of
chemicals.
   (3) The Controller shall provide reimbursement of claims and
interest in accordance with the following schedule:
   (A) The sum of two hundred fifty-eight million one hundred
eighty-nine thousand dollars ($258,189,000) for reimbursement of
claims filed by school districts and county offices of education.
   (B) The sum of twenty-five million dollars ($25,000,000) for
reimbursement of claims filed by community college districts.
   (b) For purposes of making the computations required by Section 8
of Article XVI of the California Constitution, seventy-six million
three hundred one thousand dollars ($76,301,000) of the appropriation
made by subdivision (a) 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 1995-96 fiscal
year, included within the "total allocations to school districts and
community college districts from General Fund proceeds of taxes
appropriated pursuant to Article XIII B," as defined in subdivision
(e) of Section 41202 of the Education Code, for the 1995-96 fiscal
year.
   (c) For purposes of making the computations required by Section 8
of Article XVI of the California Constitution, one hundred sixty-five
million nine hundred forty-six thousand dollars ($165,946,000) of
the appropriation made by subdivision (a) 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
1996-97 fiscal year, included within the "total allocations to school
districts and community college districts from General Fund proceeds
of taxes appropriated pursuant to Article XIII B," as defined in
subdivision (e) of Section 41202 of the Education Code, for the
1996-97 fiscal year.
   (d) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, fifteen
million nine hundred forty-two thousand dollars ($15,942,000), of the
appropriation made by subdivision (a) shall be deemed to be "General
Fund" revenues appropriated to school districts, as defined in
subdivision (c) of Section 41202 of the Education Code, and
twenty-five million dollars ($25,000,000) of the appropriation made
by subdivision (a) shall be deemed to be "General Fund" revenues
appropriated to community college districts as defined in subdivision
(d) of Section 41202 of the Education Code, for the 2002-03 fiscal
year and included within the "total allocations to school districts
and community college from General Fund proceeds of taxes
appropriated pursuant to Article XIII B," as defined in subdivision
(e) of Section 41202 of the Education Code, for the 2002-03 fiscal
year.
  SEC. 45.  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 2006 at the earliest time possible, it is necessary
that this act take effect immediately.