California Legislature—2013–14 Regular Session

Assembly BillNo. 2585


Introduced by Assembly Member Daly

February 21, 2014


An act to amend Section 42127 of the Education Code, relating to school finance.

LEGISLATIVE COUNSEL’S DIGEST

AB 2585, as introduced, Daly. School finance: school districts: budgets.

Existing law, on or before July 1 of each year requires a school district to hold a hearing on, and adopt, a budget for the subsequent fiscal year. Existing law requires the governing board of the school district to file the adopted budget with the county superintendent of schools, as specified. Existing law requires the county superintendent of schools to examine the adopted budget, as specified, to make certain determinations related to the adopted budget, and, on or before August 15, to approve, conditionally approve, or disapprove the adopted budget for each school district. If the adopted budget is conditionally approved or disapproved, existing law requires the county superintendent of schools, on or before August 15, to transmit to the governing board of the school district, in writing, his or her recommendations regarding revision of the budget and the reasons for those recommendations.

This bill would require the public hearing to be conducted in accordance with a specified provision related to proposed budgets. The bill, if the adopted budget of a school district is conditionally approved or disapproved as described above, would require the governing board of the school district, on or before September 8, and in conjunction with the county superintendent of schools, to review and respond to the superintendent’s recommendations at a regular meeting of the governing board of the school district. The bill would require the response to include any revisions to the adopted budget and other proposed action to be taken, if any, as a result of the superintendent’s recommendations. By requiring school districts to undertake additional responsibilities related to the adoption of budgets, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 42127 of the Education Code is amended
2to read:

3

42127.  

(a) On or before July 1 of each year, the governing
4board of each school district shall accomplish the following:

5(1) Hold a public hearingbegin insert conducted in accordance with Section
642103end insert
on the budget to be adopted for the subsequent fiscal year.
7The budget to be adopted shall be prepared in accordance with
8Section 42126. The agenda for that hearing shall be posted at least
972 hours before the public hearing and shall include the location
10where the budget will be available for public inspection.

11(A) For the 2011-12 fiscal year, notwithstanding any of the
12standards and criteria adopted by the state board pursuant to Section
1333127, each school district budget shall project the same level of
14revenue per unit of average daily attendance as it received in the
152010-11 fiscal year and shall maintain staffing and program levels
16commensurate with that level.

17(B) For the 2011-12 fiscal year, the school district shall not be
18required to demonstrate that it is able to meet its financial
19obligations for the two subsequent fiscal years.

20(2) Adopt a budget. Not later than five days after that adoption
21or by July 1, whichever occurs first, the governing board of the
P3    1school district shall file that budget with the county superintendent
2of schools. The budget and supporting data shall be maintained
3and made available for public review. If the governing board of
4the school district does not want all or a portion of the property
5tax requirement levied for the purpose of making payments for the
6interest and redemption charges on indebtedness as described in
7paragraph (1) or (2) of subdivision (b) of Section 1 of Article
8XIII A of the California Constitution, the budget shall include a
9statement of the amount or portion for which a levy shall not be
10made. For the 2014-15 fiscal year and each fiscal year thereafter,
11the governing board of the school district shall not adopt a budget
12before the governing board of the school district adopts a local
13control and accountability plan, if an existing local control and
14accountability plan or annual update to a local control and
15accountability plan is not effective for the budget year. The
16governing board of a school district shall not adopt a budget that
17does not include the expenditures necessary to implement the local
18control and accountability plan or the annual update to a local
19control and accountability plan that is effective during the
20subsequent fiscal year.

21(b) The county superintendent of schools may accept changes
22in any statement included in the budget, pursuant to subdivision
23(a), of the amount or portion for which a property tax levy shall
24not be made. The county superintendent of schools or the county
25auditor shall compute the actual amounts to be levied on the
26property tax rolls of the school district for purposes that exceed
27apportionments to the school district pursuant to Chapter 6
28(commencing with Section 95) of Part 0.5 of Division 1 of the
29Revenue and Taxation Code. Each school district shall provide all
30data needed by the county superintendent of schools or the county
31auditor to compute the amounts. On or before August 15, the
32county superintendent of schools shall transmit the amounts
33computed to the county auditor who shall compute the tax rates
34necessary to produce the amounts. On or before September 1, the
35county auditor shall submit the rate computed to the board of
36supervisors for adoption.

37(c) The county superintendent of schools shall do all of the
38following:

39(1) Examine the adopted budget to determine whether it
40complies with the standards and criteria adopted by the state board
P4    1pursuant to Section 33127 for application to final local educational
2agency budgets. The county superintendent of schools shall
3identify, if necessary, technical corrections that are required to be
4made to bring the budget into compliance with those standards
5and criteria.

6(2) Determine whether the adopted budget will allow the school
7district to meet its financial obligations during the fiscal year and
8is consistent with a financial plan that will enable the school district
9to satisfy its multiyear financial commitments. In addition to his
10or her own analysis of the budget of each school district, the county
11superintendent of schools shall review and consider studies, reports,
12evaluations, or audits of the school district that were commissioned
13by the school district, the county superintendent of schools, the
14Superintendent, and state control agencies and that contain
15evidence that the school district is showing fiscal distress under
16the standards and criteria adopted in Section 33127 or that contain
17a finding by an external reviewer that more than 3 of the 15 most
18common predictors of a school district needing intervention, as
19determined by the County Office Fiscal Crisis and Management
20Assistance Team, are present. The county superintendent of schools
21shall either conditionally approve or disapprove a budget that does
22not provide adequate assurance that the school district will meet
23its current and future obligations and resolve any problems
24identified in studies, reports, evaluations, or audits described in
25this paragraph.

26(3) Determine whether the adopted budget includes the
27expenditures necessary to implement the local control and
28accountability plan or annual update to the local control and
29accountability plan approved by the county superintendent of
30schools.

31(d) (1) On or before August 15, the county superintendent of
32schools shall approve, conditionally approve, or disapprove the
33adopted budget for each school district. For the 2014-15 fiscal
34year and each fiscal year thereafter, the county superintendent of
35schools shall disapprove a budget if the county superintendent of
36schools determines that the budget does not include the
37expenditures necessary to implement a local control and
38accountability plan or an annual update to the local control and
39accountability plan approved by the county superintendent of
40schools. If a school district does not submit a budget to the county
P5    1superintendent of schools, the county superintendent of schools
2shall develop, at school district expense, a budget for that school
3district by September 15 and transmit that budget to the governing
4board of the school district. The budget prepared by the county
5superintendent of schools shall be deemed adopted, unless the
6county superintendent of schools approves any modifications made
7by the governing board of the school district. The approved budget
8shall be used as a guide for the school district’s priorities. The
9Superintendent shall review and certify the budget approved by
10the county. If, pursuant to the review conducted pursuant to
11subdivision (c), the county superintendent of schools determines
12that the adopted budget for a school district does not satisfy
13paragraph (1), (2), or (3) of that subdivision, he or she shall
14conditionally approve or disapprove the budget and, not later than
15August 15, transmit to the governing board of the school district,
16in writing, his or her recommendations regarding revision of the
17budget and the reasons for those recommendations, including, but
18not limited to, the amounts of any budget adjustments needed
19before he or she can approve that budget. The county
20superintendent of schools may assign a fiscal adviser to assist the
21school district to develop a budget in compliance with those
22revisions. In addition, the county superintendent of schools may
23appoint a committee to examine and comment on the
24superintendent’s review and recommendations, subject to the
25requirement that the committee report its findings to the county
26superintendent of schools no later than August 20. For the 2011-12
27fiscal year, notwithstanding any of the standards and criteria
28adopted by the state board pursuant to Section 33127, the county
29superintendent of schools, as a condition on approval of a school
30district budget, shall not require a school district to project a lower
31level of revenue per unit of average daily attendance than it
32received in the 2010-11 fiscal year nor require the school district
33to demonstrate that it is able to meet its financial obligations for
34the two subsequent fiscal years.

35(2)  Notwithstanding any other provision of this article, for the
362014-15 fiscal year and each fiscal year thereafter, the budget
37shall not be adopted or approved by the county superintendent of
38schools before a local control and accountability plan or update to
39an existing local control and accountability plan for the budget
40year is approved.

begin insert

P6    1(3) (A) If the adopted budget of a school district is conditionally
2approved or disapproved pursuant to paragraph (1), on or before
3September 8, the governing board of the school district, in
4conjunction with the county superintendent of schools, shall review
5and respond to the recommendations of the county superintendent
6of schools at a regular meeting of the governing board of the school
7district. The response shall include any revisions to the adopted
8budget and other proposed actions to be taken, if any, as a result
9of those recommendations.

end insert
begin insert

10(B) On or before September 8, the governing board of the school
11district shall adopt the revised budget and file it with the county
12superintendent of schools.

end insert
begin delete

13(e) On or before September 8, the governing board of the school
14district shall revise the adopted budget to reflect changes in
15projected income or expenditures subsequent to July 1, and to
16include any response to the recommendations of the county
17superintendent of schools, shall adopt the revised budget, and shall
18file the revised budget with the county superintendent of schools.
19Before revising the budget, the governing board of the school
20district shall hold a public hearing regarding the proposed revisions,
21to be conducted in accordance with Section 42103. In addition, if
22the adopted budget is disapproved pursuant to subdivision (d), the
23governing board of the school district and the county
24superintendent of schools shall review the disapproval and the
25recommendations of the county superintendent of schools regarding
26revision of the budget at the public hearing. The revised budget
27and supporting data shall be maintained and made available for
28public review.

29(1) For the 2011-12 fiscal year, notwithstanding any of the
30standards and criteria adopted by the state board pursuant to Section
3133127, each school district budget shall project the same level of
32revenue per unit of average daily attendance as it received in the
332010-11 fiscal year and shall maintain staffing and program levels
34commensurate with that level.

35(2) For the 2011-12 fiscal year, the school district shall not be
36required to demonstrate that it is able to meet its financial
37obligations for the two subsequent fiscal years.

38(f)

end delete

P7    1begin insert(e)end insert On or before September 22, the county superintendent of
2schools shall provide a list to the Superintendent identifying all
3school districts for which budgets may be disapproved.

begin delete

4(g)

end delete

5begin insert(f)end insert (1) The county superintendent of schools shall examine the
6revised budget to determine whether it (1) complies with the
7standards and criteria adopted by the state board pursuant to Section
833127 for application to final local educational agency budgets,
9(2) allows the school district to meet its financial obligations during
10the fiscal year, (3) satisfies all conditions established by the county
11superintendent of schools in the case of a conditionally approved
12budget, and (4) is consistent with a financial plan that will enable
13the school district to satisfy its multiyear financial commitments,
14and, not later than October 8, shall approve or disapprove the
15revised budget. If the county superintendent of schools disapproves
16the budget, he or she shall call for the formation of a budget review
17committee pursuant to Section 42127.1, unless the governing board
18of the school district and the county superintendent of schools
19agree to waive the requirement that a budget review committee be
20formed and the department approves the waiver after determining
21that a budget review committee is not necessary. Upon the grant
22of a waiver, the county superintendent of schools immediately has
23the authority and responsibility provided in Section 42127.3. Upon
24approving a waiver of the budget review committee, the department
25shall ensure that a balanced budget is adopted for the school district
26by November 30. If no budget is adopted by November 30, the
27Superintendent may adopt a budget for the school district. The
28Superintendent shall report to the Legislature and the Director of
29Finance by December 10 if any school district, including a school
30district that has received a waiver of the budget review committee
31process, does not have an adopted budget by November 30. This
32report shall include the reasons why a budget has not been adopted
33by the deadline, the steps being taken to finalize budget adoption,
34the date the adopted budget is anticipated, and whether the
35Superintendent has or will exercise his or her authority to adopt a
36budget for the school district. For the 2011-12 fiscal year,
37notwithstanding any of the standards and criteria adopted by the
38state board pursuant to Section 33127, the county superintendent
39of schools, as a condition on approval of a school district budget,
40shall not require a school district to project a lower level of revenue
P8    1per unit of average daily attendance than it received in the 2010-11
2fiscal year nor require the school district to demonstrate that it is
3able to meet its financial obligations for the two subsequent fiscal
4years.

5(2) Notwithstanding any other law, for the 2014-15 fiscal year
6and each fiscal year thereafter, if the county superintendent of
7schools disapproves the budget for the sole reason that the county
8superintendent of schools has not approved a local control and
9accountability plan or an annual update to the local control and
10accountability plan filed by the school district pursuant to Section
1152061, the county superintendent of schools shall not call for the
12formation of a budget review committee pursuant to Section
1342127.1.

begin delete

14(h)

end delete

15begin insert(g)end insert Not later than October 8, the county superintendent of
16schools shall submit a report to the Superintendent identifying all
17school districts for which budgets have been disapproved or budget
18review committees waived. The report shall include a copy of the
19written response transmitted to each of those school districts
20pursuant to paragraph (1) of subdivision (d).

begin delete

21(i)

end delete

22begin insert(h)end insert Notwithstanding any other provision of this section, the
23budget review for a school district shall be governed by paragraphs
24(1), (2), and (3), rather than bybegin delete subdivisions (e) and (g),end deletebegin insert paragraph
25(3) of subdivision (d) and subdivision (f),end insert
if the governing board
26of the school district so elects and notifies the county
27superintendent of schools in writing of that decision, not later than
28October 31 of the immediately preceding calendar year. On or
29before July 1, the governing board of a school district for which
30the budget review is governed by this subdivision, rather than by
31begin delete subdivisions (e) and (g),end deletebegin insert paragraph (3) of subdivision (d) and
32subdivision (f),end insert
shall conduct a public hearing regarding its
33proposed budget in accordance with Section 42103.

34(1) If the adopted budget of a school district is disapproved
35pursuant to subdivision (d), on or before September 8, the
36governing board of the school district, in conjunction with the
37county superintendent of schools, shall review the superintendent’s
38recommendations at a regular meeting of the governing board of
39the school district and respond to those recommendations. The
40response shall include any revisions to the adopted budget and
P9    1other proposed actions to be taken, if any, as a result of those
2recommendations.

3(2) On or before September 22, the county superintendent of
4schools shall provide a list to the Superintendent identifying all
5school districts for which a budget may be tentatively disapproved.

6(3) Not later than October 8, after receiving the response
7required under paragraph (1), the county superintendent of schools
8shall review that response and either approve or disapprove the
9budget. Except as provided in paragraph (2) of subdivisionbegin delete (g),end delete
10begin insert (f),end insert if the county superintendent of schools disapproves the budget,
11he or she shall call for the formation of a budget review committee
12pursuant to Section 42127.1, unless the governing board of the
13school district and the county superintendent of schools agree to
14waive the requirement that a budget review committee be formed
15and the department approves the waiver after determining that a
16budget review committee is not necessary. Upon the grant of a
17waiver, the county superintendent has the authority and
18responsibility provided to a budget review committee in Section
1942127.3. Upon approving a waiver of the budget review committee,
20the department shall ensure that a balanced budget is adopted for
21the school district by November 30. The Superintendent shall
22report to the Legislature and the Director of Finance by December
2310 if any school district, including a school district that has received
24a waiver of the budget review committee process, does not have
25an adopted budget by November 30. This report shall include the
26reasons why a budget has not been adopted by the deadline, the
27steps being taken to finalize budget adoption, and the date the
28adopted budget is anticipated. For the 2011-12 fiscal year,
29notwithstanding any of the standards and criteria adopted by the
30state board pursuant to Section 33127, the county superintendent
31of schools, as a condition on approval of a school district budget,
32shall not require a school district to project a lower level of revenue
33per unit of average daily attendance than it received in the 2010-11
34fiscal year nor require the school district to demonstrate that it is
35able to meet its financial obligations for the two subsequent fiscal
36years.

37(4) Not later than 45 days after the Governor signs the annual
38Budget Act, the school district shall make available for public
39review any revisions in revenues and expenditures that it has made
P10   1to its budget to reflect the funding made available by that Budget
2Act.

begin delete

3(j)

end delete

4begin insert(i)end insert Any school district for which the county board of education
5serves as the governing board of the school district is not subject
6to subdivisions (c) tobegin delete (h),end deletebegin insert (g),end insert inclusive, but is governed instead
7by the budget procedures set forth in Section 1622.

8

SEC. 2.  

If the Commission on State Mandates determines that
9this act contains costs mandated by the state, reimbursement to
10local agencies and school districts for those costs shall be made
11pursuant to Part 7 (commencing with Section 17500) of Division
124 of Title 2 of the Government Code.



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