BILL NUMBER: SB 1078	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 2, 2005

INTRODUCED BY   Senator Simitian

                        FEBRUARY 22, 2005

   An act to amend Sections 47632 and 47635 of the Education Code,
relating to education finance, and declaring the urgency thereof, to
take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1078, as amended, Simitian.  Education finance  : charter
schools  .
    (1)    Existing law defines "sponsoring local
educational agency" for purposes of provisions governing charter
schools.
   This bill would include within that definition, only for the
purpose of transferring amounts in lieu of property taxes 
and  for pupils who reside in  ,  and are otherwise
eligible to attend school in  ,  a basic aid school
district,  as defined,  but who attend a charter school
authorized by a nonbasic aid  school  district or county
office of education, the basic aid  school  district
 , as defined  .
    (2)    Existing law requires a local
educational agency that sponsors a charter school annually to
transfer to each of its charter schools a prescribed amount of
funding in lieu of funding available through property taxes and
exempts from this requirement funding for pupils who reside in, and
are otherwise eligible to attend a school in, a basic aid school
district, but who attend a charter school in a nonbasic aid school
district. Existing law requires the sponsoring basic aid school
district to transfer to the charter school an amount of funds
equivalent to the revenue limit earned through average daily
attendance by the charter school for each pupil's attendance, not to
exceed the average property tax share per unit of average daily
attendance for pupils residing in and attending the basic aid school
district.
   This bill would, commencing with the 2005-06 fiscal year, revise
the manner in which the amount to be transferred by  the
  a  sponsoring  basic aid district
  local educational agency, as defined above,  to
the charter school is determined according to specific formulas. The
bill would declare that the intent of this revision is to increase
the amount of local property tax revenue retained by basic aid 
school  districts, and that any costs associated with the
revision shall be offset by the increase.
    (3)    This bill would declare that it is to
take effect immediately as an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  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) "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.
   (f) "Operational funding" means all funding except funding for
capital outlay.
   (g) "School district of a similar type" means a school district
that is serving similar grade levels.
   (h) "Similar pupil population" means similar numbers of pupils by
grade level, with a similar proportion of educationally disadvantaged
pupils.
   (i) "Sponsoring local educational agency" means the following:
   (1) In the cases where a charter school is granted by a school
district, the sponsoring local educational agency is the school
district, except as provided in paragraph (6).
   (2) In cases where 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, except as provided in
paragraph (6).
   (3) In cases where a charter is granted by the State Board of
Education 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 of Education
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, except as provided
in paragraph (6).
   (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, except as provided in paragraph (6).
   (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, except as provided in paragraph (6).
   (6)  (A)    For the sole purpose of transferring
amounts in lieu of property taxes as provided in Section 47635, for
pupils who reside in and are otherwise eligible to attend school in a
basic aid school district,  as defined in subparagraph (B),
 but who attend a charter school authorized by a nonbasic aid
school district or county office of education, the sponsoring local
educational agency is the basic aid school district.  
   (j) 
    (B)    For purposes of this  section
  subdivision  , "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. 2.  Section 47635 of the Education Code is amended to read:
   47635.
   (a) A sponsoring local educational agency, other than those
defined in paragraph (6) of subdivision (i) of Section 47632, shall
annually transfer to each of its charter schools funding in lieu of
property taxes equal to the lesser of the following two amounts:
   (1) The average amount of property taxes per unit of average daily
attendance, including average daily attendance attributable to
charter schools, received by the local educational agency, multiplied
by the charter school's average daily attendance.
   (2) The statewide average general-purpose funding per unit of
average daily attendance received by school districts, as determined
by the State Department of Education, multiplied by the charter
school's average daily attendance in each of the four corresponding
grade level ranges: kindergarten and grades 1, 2, and 3; grades 4, 5,
and 6; grades 7 and 8; and grades 9 to 12, inclusive.
   (b) For the 2005-06 fiscal year, a sponsoring local educational
agency, as defined in paragraph  (5)   (6) 
of subdivision (i) of Section 47632, shall annually transfer to each
of its charter schools funding in lieu of property taxes equal to
the lesser of the following two amounts:
   (1) The average amount of property taxes per unit of average daily
attendance, including average daily attendance attributable to
charter schools, received by the local educational agency, multiplied
by the charter school's average daily attendance, multiplied by 30
percent.
   (2) The statewide average general-purpose funding per unit of
average daily attendance received by school districts, as determined
by the State Department of Education, multiplied by the charter
school's average daily attendance in each of the four corresponding
grade level ranges: kindergarten and grades 1, 2, and 3; grades 4, 5,
and 6; grades 7 and 8; and grades 9 to 12, inclusive.
   (c) For the 2006-07 fiscal year, a sponsoring local educational
agency, as defined in paragraph  (5)   (6) 
of subdivision (i) of Section 47632, shall annually transfer to each
of its charter schools funding in lieu of property taxes equal to
the lesser of the following two amounts:
   (1) The average amount of property taxes per unit of average daily
attendance, including average daily attendance attributable to
charter schools, received by the local educational agency, multiplied
by the charter school's average daily attendance, multiplied by 50
percent.
   (2) The statewide average general-purpose funding per unit of
average daily attendance received by school districts, as determined
by the State Department of Education, multiplied by the charter
school's average daily attendance in each of the four corresponding
grade level ranges: kindergarten and grades 1, 2, and 3; grades 4, 5,
and 6; grades 7 and 8; and grades 9 to 12, inclusive.
   (d) Commencing with the 2007-08 fiscal year and each fiscal year
thereafter, a sponsoring local educational agency, as defined in
paragraph  (5)   (6)  of subdivision (i) of
Section 47632, shall annually transfer to each of its charter
schools funding in lieu of property taxes equal to the lesser of the
following two amounts:
   (1) The average amount of property taxes per unit of average daily
attendance, including average daily attendance attributable to
charter schools, received by the local educational agency, multiplied
by the charter school's average daily attendance, multiplied by 70
percent.
   (2) The statewide average general purpose funding per unit of
average daily attendance received by school districts, as determined
by the State Department of Education, multiplied by the charter
school's average daily attendance in each of the four corresponding
grade level ranges: kindergarten and grades 1, 2, and 3; grades 4, 5,
and 6; grades 7 and 8; and grades 9 to 12, inclusive.
   (e) The sponsoring local educational agency shall transfer funding
in lieu of property taxes to the charter school in monthly
installments, by no later than the 15th of each month.
   (1) For the months of August to February, inclusive, a charter
school's funding in lieu of property taxes shall be computed based on
the amount of property taxes received by the sponsoring local
educational agency during the preceding fiscal year, as reported to
the Superintendent for purposes of the second principal
apportionment. A sponsoring local educational agency shall transfer
to the charter school the charter school's estimated annual
entitlement to funding in lieu of property taxes as follows:
   (A) Six percent in August.
   (B) Twelve percent in September.
   (C) Eight percent each month in October, November, December,
January, and February.
   (2) For the months of March to June, inclusive, a charter school's
funding in lieu of property taxes shall be computed based on the
amount of property taxes estimated to be received by the sponsoring
local educational agency during the fiscal year, as reported to the
Superintendent for purposes of the first principal apportionment. A
sponsoring local educational agency shall transfer to each of its
charter schools an amount equal to one-sixth of the difference
between the school's estimated annual entitlement to funding in lieu
of property taxes and the amounts provided pursuant to paragraph (1).
An additional one-sixth of this difference shall be included in the
amount transferred in the month of March.
   (3) For the month of July, a charter school's funding in lieu of
property taxes shall be computed based on the amount of property
taxes estimated to be received by the sponsoring local educational
agency during the prior fiscal year, as reported to the
Superintendent for purposes of the second principal apportionment. A
sponsoring local educational agency shall transfer to each of its
charter schools an amount equal to the remaining difference between
the school's estimated annual entitlement to funding in lieu of
property taxes and the amounts provided pursuant to paragraphs (1)
and (2).
   (4) Final adjustments to the amount of funding in lieu of property
taxes allocated to a charter school shall be made in February, in
conjunction with the final reconciliation of annual apportionments to
schools.
   (f) The Legislature finds and declares that the net effect of
subdivisions (b), (c), and (d), is to increase the amount of local
property tax revenue retained by basic aid  school 
districts. Thus, any costs associated with subdivisions (b), (c), and
(d), including any reporting requirements necessary to implement
this section, shall be offset by that amount of increased local
property tax revenue.
  SEC. 3.
   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 effect General Fund savings through the formula for
funding pupils who reside in basic aid school districts, but attend
charter schools authorized by a nonbasic aid school district, at the
earliest possible time, it is necessary that this act take effect
immediately.