BILL NUMBER: SB 69	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 24, 2013
	AMENDED IN SENATE  MAY 8, 2013
	AMENDED IN SENATE  APRIL 25, 2013

INTRODUCED BY   Senator Liu
   (Principal coauthors: Senators Block, De León, Lara, Leno,
Padilla, and Steinberg)
   (Coauthors: Senators Hancock, Hill, and Monning)

                        JANUARY 10, 2013

   An act to amend  Section   Sections 
47634.1  , 49085, and 52052  of, to amend and renumber the
heading of Article 4 (commencing with Section 2570) of Chapter 12 of
Part 2 of Division 1 of Title 1 of, to amend and repeal Sections
14002.5, 42238, 42238.1, 42238.2, 42238.3, 42238.4, 42238.41,
42238.42, 42238.43, 42238.44, 42238.445, 42238.45, 42238.46,
42238.48, 42238.485, 42238.49, 42238.5, 42238.51, 42238.52, 42238.53,
42238.6, 42238.7, 42238.75, 42238.8, 42238.9, 42238.95, 42238.11,
42238.12, 42238.13, 42238.14, 42238.145, 42238.146, 42238.17,
42238.18, 42239, 42240.1, 42241.3, 42241.7, 42243.7, 47630.5, and
47633 of, to amend, repeal, and add Sections 1622, 14002, 14002.1,
14003, 14501, 33127, 41020, 41202, 42127, 46201.2, 47604.33, 47610,
47631, and 47632 of, to add Sections 2558.7, 2569, 42238.01,
42238.02, 42238.03, 42238.04, 42238.05, 42238.051, 42238.052,
42238.053,  and  42238.06  , and 60902  to,
to add Article 3 (commencing with Section 2574) to Chapter 12 of
Part 2 of Division 1 of Title 1  of  , to add Article 5
(commencing with Section 52060) to Chapter 6.1 of Part 28 of Division
4 of Title 2 of,  and  to repeal Article 3
(commencing with Section 2550) of Chapter 12 of Part 2 of Division 1
of Title 1 of, and to repeal Article 3.5 (commencing with Section
2560) of Chapter 12 of Part 2 of Division 1 of Title 1 of, the
Education Code, relating to school finance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 69, as amended, Liu. School finance: new pupil funding formula.

   (1) Existing law establishes the public school system in this
state, and, among other things, provides for the establishment of
county superintendents of schools, school districts, and charter
schools throughout the state and for their provision of instruction
at the public elementary and secondary schools these local
educational agencies maintain. Existing law establishes a public
school financing system that requires funding for county
superintendents of schools and school districts to be calculated
pursuant to a revenue limit, as specified, and requires funding for
charter schools to be calculated pursuant to a general-purpose
entitlement, except as provided, and requires the revenue limit and
general-purpose entitlement to be composed of, among other things,
state aid and certain local revenues.
   This bill, commencing in the 2014-15 fiscal year, would revise and
recast the provisions related to the public school financing system
by requiring state funding for county superintendents of schools,
school districts, and charter schools that previously received a
general-purpose entitlement, to be calculated pursuant to a local
control funding formula, as specified.
   (2) Existing law requires a county board of education, a governing
board of a school district, and a governing body of a charter school
to annually adopt a budget, as specified.
   This bill would require a county board of education, a governing
board of a school district, and a governing body of a charter school
that receives its funding directly, as specified, to annually adopt
or revise a local control and accountability plan that aligns with
the annual budget and contains certain elements and that, among other
things, was developed in consultation with teachers, principals,
administrators, other school personnel, parents, and pupils. By
requiring county boards of education and school districts to annually
adopt or revise a local control and accountability plan, the bill
would impose a state-mandated local program. 
   (3) Existing law requires the State Department of Education to
ensure that the California School Information Services system meets
the needs of pupils in foster care and includes disaggregated data on
pupils in foster care.  
   This bill would instead require the department to enter into a
memorandum of understanding with the State Department of Social
Services for purposes of sharing specified information related to
pupils under supervision of the juvenile court. The bill would also
require the Superintendent of Public Instruction to submit a report
related to pupils under supervision of the juvenile court, as
specified, to the Legislature and the Governor by February 15 of each
even-numbered year.  
   (4) This bill would, on or before March 1, 2014, require the
Legislative Analyst's Office to submit recommendations to the fiscal
committees of both houses of the Legislature regarding revisions to
the methods of funding pupil transportation, as specified. 

   (3) 
    (5)  This bill would make conforming changes, correct
cross-references, and make other nonsubstantive changes. 
   (4)
    (6)  This bill would become operative only if specified
legislation is enacted in the 2013-14 Regular Session. 
   (5) 
    (7)  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:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The local control funding formula proposal, as specified in
 AB   Assembly Bill  88 of the 2013-14
Regular Session, as amended April 3, 2013, attempts to increase local
flexibility, make funding more equitable and transparent, and devote
greater resources to children who come to school with greater
challenges.
   (b) The Legislature supports the underlying goal expressed in the
local control funding formula proposal of providing additional
resources to support improved educational outcomes for disadvantaged
pupils. However, the Legislature has concerns related to a number of
its provisions, in particular the inadequate level of funding
proposed for statewide pupil base grants. Additional concerns
include, but are not limited to, proposed concentration grants,
incomplete accountability provisions, inadequate data collection,
lack of structure for high school grade span funding, perpetuation of
historically inequitable funding allocations, and the timing for
implementation of a new formula.
   (c) The local control funding formula proposal encompasses scores
of repeals of sections, articles, and chapters of the Education Code,
many of which could have unintended consequences. Such repeals
require more careful consideration than the compressed annual Budget
Act implementation timelines allow.
   (d) It is the intent of the Legislature to consider a new funding
formula through a funding process that affords greater opportunity
for analysis, amendment, and public input on a far reaching proposal
that will have lasting impacts on California schools and the pupils
they serve.
  SEC. 2.  Section 1622 of the Education Code is amended to read:
   1622.  (a) On or before July 1 of each fiscal year, the county
board of education shall adopt an annual budget for the budget year
and shall file that budget with the Superintendent of Public
Instruction, the county board of supervisors, and the county auditor.
The budget, and supporting data, shall be maintained and made
available for public review. The budget shall indicate the date,
time, and location at which the county board of education held the
public hearing required under Section 1620.
   (b) The Superintendent of Public Instruction shall examine the
budget to determine whether it (1) complies with the standards and
criteria adopted by the State Board of Education pursuant to Section
33127 for application to final local educational agency budgets, (2)
allows the county office of education to meet its financial
obligations during the fiscal year, and (3) is consistent with a
financial plan that will enable the county office of education to
satisfy its multiyear financial commitments. In addition, the
Superintendent shall identify any technical corrections to the budget
that must be made. On or before August 15, the Superintendent of
Public Instruction shall approve or disapprove the budget and, in the
event of a disapproval, transmit to the county office of education
in writing his or her recommendations regarding revision of the
budget and the reasons for those recommendations. For the 2011-12
fiscal year, notwithstanding any of the standards and criteria
adopted by the state board pursuant to Section 33127, the
Superintendent, as a condition on approval of a county office of
education budget, shall not require a county office of education to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the county
superintendent to certify in writing whether or not the county office
of education is able to meet its financial obligations for the two
subsequent fiscal years.
   (c) On or before September 8, the county board of education shall
revise the county office of education budget to reflect changes in
projected income or expenditures subsequent to July 1, and to include
any response to the recommendations of the Superintendent of Public
Instruction, shall adopt the revised budget, and shall file the
revised budget with the Superintendent of Public Instruction, the
county board of supervisors, and the county auditor. Prior to
revising the budget, the county board of education shall hold a
public hearing regarding the proposed revisions, which shall be made
available for public inspection not less than three working days
prior to the hearing. The agenda for that hearing shall be posted at
least 72 hours prior to the public hearing and shall include the
location where the budget will be available for public inspection.
The revised budget, and supporting data, shall be maintained and made
available for public review.
   (d) The Superintendent of Public Instruction shall examine the
revised budget to determine whether it complies with the standards
and criteria adopted by the State Board of Education pursuant to
Section 33127 for application to final local educational agency
budgets and, no later than October 8, shall approve or disapprove the
revised budget. If the Superintendent of Public Instruction
disapproves the budget, he or she shall call for the formation of a
budget review committee pursuant to Section 1623. For the 2011-12
fiscal year, notwithstanding any of the standards and criteria
adopted by the state board pursuant to Section 33127, the
Superintendent, as a condition on approval of a county office of
education budget, shall not require a county office of education to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the county
superintendent to certify in writing whether or not the county office
of education is able to meet its financial obligations for the two
subsequent fiscal years.
   (e) Notwithstanding any other provision of this section, the
budget review for a county office of education shall be governed by
paragraphs (1), (2), and (3) of this subdivision, rather than by
subdivisions (c) and (d), if the county board of education so elects,
and notifies the Superintendent of Public Instruction in writing of
that decision, no later than October 31 of the immediately preceding
calendar year.
   (1) In the event of the disapproval of the budget of a county
office of education pursuant to subdivision (b), on or before
September 8, the county superintendent of schools and the county
board of education shall review the recommendations of the
Superintendent of Public Instruction at a regularly scheduled meeting
of the county board of education and respond to those
recommendations. That response shall include the proposed actions to
be taken, if any, as a result of those recommendations.
   (2) No later than October 8, after receiving the response required
under paragraph (1), the Superintendent of Public Instruction shall
review that response and either approve or disapprove the budget of
the county office of education. If the Superintendent of Public
Instruction disapproves the budget, he or she shall call for the
formation of a budget review committee pursuant to Section 1623.
   (3) Not later than 45 days after the Governor signs the annual
Budget Act, the county office of education shall make available for
public review any revisions in revenues and expenditures that it has
made to its budget to reflect the funding made available by that
Budget Act.
   (f) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 3.  Section 1622 is added to the Education Code, to read:
   1622.  (a) On or before July 1 of each fiscal year, the county
board of education shall adopt an annual budget for the budget year
and, for the 2015-16 fiscal year and each fiscal year thereafter,
take action on a local control and accountability plan pursuant to
Sections 52062 and 52064, and shall file the budget and local control
and accountability plan with the Superintendent, the county board of
supervisors, and the county auditor. The budget, the local control
and accountability plan, and supporting  data, 
data  shall be maintained and made available for public review.
The budget shall indicate the date, time, and location at which the
county board of education held the public hearing required under
Section 1620. For the 2015-16 fiscal year and each fiscal year
thereafter, the county board of education shall not adopt a budget
before it adopts a local control and accountability plan or approves
an update to an existing local control and accountability plan. The
county board of education shall not adopt a budget that does not
align with the local control and accountability plan that applies to
the subsequent fiscal year.
   (b) (1)  The Superintendent shall examine the budget to determine
if it (A) complies with the standards and criteria adopted by the
state board pursuant to Section 33127 for application to final local
educational agency budgets, (B) allows the county office of education
to meet its financial obligations during the fiscal year, and (C) is
consistent with a financial plan that will enable the county office
of education to satisfy its multiyear financial commitments. In
addition, the Superintendent shall identify any technical corrections
to the budget that must be made. On or before August 15, the
Superintendent shall approve or disapprove the budget and, in the
event of a disapproval, transmit to the county office of education in
writing his or her recommendations regarding revision of the budget
and the reasons for those recommendations.
   (2) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, the Superintendent, as a condition on approval of a county
office of education budget, shall not require a county office of
education to project a lower level of revenue per unit of average
daily attendance than it received in the 2010-11 fiscal year nor
require the county superintendent to certify in writing whether or
not the county office of education is able to meet its financial
obligations for the two subsequent fiscal years.
   (3) For the 2015-16 fiscal year and each fiscal year thereafter,
the Superintendent shall disapprove a budget if any of the following
occur:
   (A) The county board of education does not file a local control
and accountability plan with the Superintendent pursuant to Sections
52062 and 52064.
   (B) If the Superintendent determines that a local control and
accountability plan filed does not adhere to the template adopted by
the state board pursuant to Section 52066.
   (C) If the Superintendent determines that a local control and
accountability plan filed does not include all of the components
identified in subdivision (a) of Section 52064.
   (D) If the Superintendent determines that the expenditures
included in the budget do not reflect the costs necessary to
implement the local control and accountability plan.
   (c) On or before September 8 of each fiscal year, the county board
of education shall revise the county office of education budget to
reflect changes in projected income or expenditures subsequent to
July 1, and to include any response to the recommendations of the
Superintendent, shall adopt the revised budget, and shall file the
revised budget with the Superintendent, the county board of
supervisors, and the county auditor. Before revising the budget, the
county board of education shall hold a public hearing regarding the
proposed revisions, which shall be made available for public
inspection not less than three working days before the hearing. The
agenda for that hearing shall be posted at least 72 hours before the
public hearing and shall include the location where the budget will
be available for public inspection. The revised  budget,
  budget and supporting  data, 
 data  shall be maintained and made available for public
review.
   (d) The Superintendent shall examine the revised budget to
determine whether it complies with the standards and criteria adopted
by the state board pursuant to Section 33127 for application to
final local educational agency budgets and, no later than October 8
of each fiscal year, shall approve or disapprove the revised budget.
For the 2015-16 fiscal year and each fiscal year thereafter, the
Superintendent shall disapprove a revised budget if the
Superintendent determines that the expenditures included in the
budget do not reflect the costs necessary to implement the local
control and accountability plan adopted by a county board of
education pursuant to Sections 52062 and 52064. If the Superintendent
disapproves the budget, he or she shall call for the formation of a
budget review committee pursuant to Section 1623. For the 2011-12
fiscal year, notwithstanding any of the standards and criteria
adopted by the state board pursuant to Section 33127, the
Superintendent, as a condition on approval of a county office of
education budget, shall not require a county office of education to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the county
superintendent to certify in writing whether or not the county office
of education is able to meet its financial obligations for the two
subsequent fiscal years.
   (e) Notwithstanding any other provision of this section, the
budget review for a county office of education shall be governed by
paragraphs (1), (2), and (3) of this subdivision, rather than by
subdivisions (c) and (d), if the county board of education so elects,
and notifies the Superintendent in writing of that decision, no
later than October 31 of the immediately preceding calendar year.
   (1) In the event of the disapproval of the budget of a county
office of education pursuant to subdivision (b), on or before
September 8, the county superintendent of schools and the county
board of education shall review the recommendations of the
Superintendent at a regularly scheduled meeting of the county board
of education and respond to those recommendations. That response
shall include the proposed actions to be taken, if any, as a result
of those recommendations.
   (2) No later than October 8, after receiving the response required
under paragraph (1), the Superintendent shall review that response
and either approve or disapprove the budget of the county office of
education. For the 2015-16 fiscal year and each fiscal year
thereafter, the Superintendent shall disapprove a budget if a county
board of education does not file a local control and accountability
plan with the Superintendent or if the Superintendent determines that
the expenditures included in the budget adopted by the county board
of education do not reflect the costs necessary to implement the
local control and accountability plan. If the Superintendent
disapproves the budget, he or she shall call for the formation of a
budget review committee pursuant to Section 1623.
   (3) Not later than 45 days after the Governor signs the annual
Budget Act, the county office of education shall make available for
public review any revisions in revenues and expenditures that it has
made to its budget to reflect the funding made available by that
Budget Act.
   (f) This section shall become operative on July 1, 2014.
  SEC. 4.  Section 2558.7 is added to the Education Code, to read:
   2558.7.  This article shall become inoperative on July 1, 2014,
and, as of January 1, 2015, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2015, deletes
or extends the dates on which it becomes inoperative and is
repealed.
  SEC. 5.  Section 2569 is added to the Education Code, to read:
   2569.  This article shall become inoperative on July 1, 2014, and,
as of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 6.  The heading of Article 4 (commencing with Section 2570) of
Chapter 12 of Part 2 of Division 1 of Title 1 of the Education Code
is amended and renumbered to read:

      Article 2.  Allocation of Property Tax Revenues


  SEC. 7.  Article 3 (commencing with Section 2574) is added to
Chapter 12 of Part 2 of Division 1 of Title 1 of the Education Code,
to read:

      Article 3.  County Local Control Funding Formula


   2574.  For the 2014-15 fiscal year and for each fiscal year
thereafter, the Superintendent annually shall calculate the County
Local Control Funding Formula for each county superintendent of
schools as follows:
   (a) Compute a county office of education operations grant equal to
the sum of  each of  the following amounts:
   (1)  _____   Six hundred fifty-five thousand
nine hundred twenty  dollars  ($____)  
($655,920)  .
   (2)  ____   One hundred nine thousand three
hundred twenty dollars  ($____)  
($109,320)  multiplied by the number of school districts for
which the county superintendent of schools has jurisdiction pursuant
to Section 1253.
   (3) (A)  ____   Seventy  dollars
 ($____)   ($70)  multiplied by the number
of units of countywide average daily attendance, up to a maximum of
30,000 units. For purposes of this section, countywide average daily
attendance means the aggregate number of annual units of average
daily attendance within the county attributable to all school
districts for which the county superintendent of schools has
jurisdiction pursuant to Section 1253, charter schools within the
county, and the schools operated by the county superintendent of
schools.
   (B)  ____   Sixty  dollars 
($____)   ($60)  multiplied by the number of units
of countywide average daily attendance for the portion of countywide
average daily attendance, if any, above 30,000 units, up to a maximum
of 60,000 units.
   (C)  ____   Fifty  dollars 
($____)   ($50)  multiplied by the number of units
of countywide average daily attendance for the portion of countywide
average daily attendance, if any, above 60,000  units  , up
to a maximum of 140,000 units.
   (D)  ____   Forty  dollars 
($____)   ($40)  multiplied by the number of units
of countywide average daily attendance for the portion of countywide
average daily attendance, if any, above 140,000 units.
   (4) For the 2015-16 fiscal year and each fiscal year thereafter,
adjust each of the amounts provided in the prior year pursuant to
paragraphs (1), (2), and (3) by the percentage change in the annual
average value of the Implicit Price Deflator for State and Local
Government Purchases of Goods and Services for the United States, as
published by the United States Department of Commerce for the
12-month period ending in the third quarter of the prior fiscal year.
This percentage change shall be determined using the latest data
available as of May 10 of the preceding fiscal year compared with the
annual average value of the same deflator for the 12-month period
ending in the third quarter of the second preceding fiscal year,
using the latest data available as of May 10 of the preceding fiscal
year, as reported by the Department of Finance.
   (b) Divide the enrollment of unduplicated pupils in all schools
operated by a county superintendent of schools by the total
enrollment in those schools.
   (1) For purposes of this section, an "unduplicated pupil" is a
pupil who is classified as an English learner pursuant to Section
52164, as that section read on January 1, 2014; eligible to receive a
free or reduced-price meal pursuant to Section 49552, as that
section read on January 1, 2014; or a foster child pursuant to
Sections 300 and 601 of the Welfare and Institutions Code. A pupil
shall be counted only once for purposes of this section if any of the
following apply:
   (A) The pupil is classified as an English learner and is eligible
for a free or reduced-price meal.
   (B) The pupil is classified as an English learner and is a foster
child.
   (C) The pupil is classified as a foster child and is eligible for
a free or reduced-price meal.
   (D) The pupil is classified as an English learner, is eligible for
a free or reduced-price meal, and is a foster child.
   (2) For purposes of this subdivision, a pupil enrolled in a
juvenile court school operated by a county superintendent of schools
shall not be included in any enrollment counts.
   (3) Commencing with the 2014-15 fiscal year, a county
superintendent of schools annually shall report the enrollment of
unduplicated pupils, pupils classified as English learners, pupils
eligible for free and reduced-price meals, and foster children in
schools operated by the county superintendent of schools to the
Superintendent using the California Longitudinal Pupil Achievement
Data System. The Superintendent shall make the calculations pursuant
to this section using the California Longitudinal Pupil Achievement
Data System.
   (c) Compute an alternative education grant equal to the sum of the
following:
   (1) For the 2014-15 fiscal year, a base grant of  ____
  eleven thousand forty-five  dollars 
($____).   ($11,045).  For the 2015-16 fiscal year
and each fiscal year thereafter, adjust the base grant provided in
the prior year by the percentage change in the annual average value
of the Implicit Price Deflator for State and Local Government
Purchases of Goods and Services for the United States, as published
by the United States Department of Commerce for the 12-month period
ending in the third quarter of the prior fiscal year. This percentage
change shall be determined using the latest data available as of May
10 of the preceding fiscal year compared with the annual average
value of the same deflator for the 12-month period ending in the
third quarter of the second preceding fiscal year, using the latest
data available as of May 10 of the preceding fiscal year, as reported
by the Department of Finance.
   (2) A supplemental grant equal to 35 percent of the base grant
defined in paragraph (1) multiplied by the percentage calculated in
subdivision (b).
   (3) (A) Multiply the sum of paragraphs (1) and (2) by the total
number of units of average daily attendance for pupils attending
schools operated by a county office of education, excluding units of
average daily attendance for pupils attending a juvenile court
school, who are any of the following:
   (i) Probation referred pursuant to Sections 300, 601, 602, and 654
of the Welfare and Institutions Code.
   (ii) On probation or parole and not in attendance in a school.
   (iii) Expelled for any of the reasons specified in subdivision (a)
or (c) of Section 48915.
   (B) Multiply the number of units of average daily attendance for
pupils attending a juvenile court school by the sum of the base grant
calculated in paragraph (1) and a supplemental grant equal to 35
percent of the base grant pursuant to paragraph (1).
   (C) Add the amounts calculated in subparagraphs (A) and (B).
   (d) Add the amount calculated in subdivision (a) to the amount
calculated in subparagraph (C) of paragraph (3) of subdivision (c).
   (e) Add  all of the following   the amount of
  funding a county superintendent of schools received for
the 2013-14 fiscal year from funds allocated pursuant to the Targeted
Instructional Improvement Block Grant program, as set forth in
Article 6 (commencing with Section 41540) of Chapter 3.2 of Part 24
of Division 3 of Title 2, as that article read on January 1, 2014,
 to the amount calculated in subdivision  (d): 
 (d).  
   (1) The amount of funding a county superintendent of schools
received for the 2013-14 fiscal year from funds allocated pursuant to
the Targeted Instructional Improvement Block Grant program, as set
forth in Article 6 (commencing with Section 41540) of Chapter 3.2 of
Part 24 of Division 3 of Title 2, as that article read on January 1,
2014.  
   (2) The amount of funding a county superintendent of schools
received for the 2013-14 fiscal year from funds allocated pursuant to
the Home to School Transportation program, as set forth in Article 2
(commencing with Section 39820) of Chapter 1 of Part 23.5 of
Division 3 of Title 2, and Article 10 (commencing with Section 41850)
of Chapter 5 of Part 24 of Division 3 of Title 2, as those articles
read on January 1, 2014. 
   2575.  Commencing with the 2014-15 budget year and for each fiscal
year thereafter, the Superintendent shall distribute the
appropriations in Section 14002 to each county superintendent of
schools according to the following formula:
   (a) Calculate a prior year amount of funding for each county
superintendent of schools equal to the sum of all of the following:
   (1) Entitlements for revenue limits in the 2013-14 fiscal year
pursuant to Article 3 (commencing with Section 2550) of Chapter 12,
as that article read on January 1, 2014, adjusted only for changes in
average daily attendance claimed by the county superintendent of
schools for pupils identified in clauses (i), (ii)  ,  
 and (iii) of subparagraph (A) of paragraph (3) of subdivision
(c) of Section 2574 and of pupils attending juvenile court schools.
All other average daily attendance claimed by the county
superintendent of schools and any other average daily attendance used
for purposes of calculating revenue limits pursuant to Article 3
(commencing with Section 2550) of Chapter 12, as that article read on
January 1, 2014, shall be considered final for purposes of this
section as of the annual apportionment for the 2013-14 fiscal year,
as calculated for purposes of the certification required on or before
February 20, 2015, pursuant to Section 41332.
   (2) The amount of funding received from appropriations contained
in Section 2.00 of the Budget Act of 2013, as adjusted by Section
12.42, in the following items: 6110-104-0001, 6110-107-0001,
6110-108-0001,  6110-111-0001,  6110-124-0001,
6110-128-0001, 6110-137-0001, 6110-144-0001, 6110-158-0001,
6110-181-0001, 6110-188-0001, 6110-189-0001, 6110-190-0001,
6110-193-0001, 6110-195-0001, 6110-198-0001, 6110-204-0001,
6110-208-0001, 6110-209-0001, 6110-211-0001, 6110-212-0001,
6110-227-0001, 6110-228-0001, 6110-232-0001, 6110-234-0001,
6110-240-0001, 6110-242-0001, 6110-243-0001, 6110-244-0001,
6110-245-0001, 6110-246-0001, 6110-247-0001, 6110-248-0001,
6110-260-0001, 6110-265-0001, 6110-266-0001, 6110-267-0001,
6110-268-0001, and 6360-101-0001, and 2013-14 fiscal year funding for
the Class Size Reduction Program pursuant to Chapter 6.10
(commencing with Section 52120) of Part 28 of Division 4 of Title 2,
                                           as it read on January 1,
2014.
   (3) For the 2015-16 fiscal year and for each fiscal year
thereafter, the amounts calculated pursuant to paragraph (3) of
subdivision (b) in all prior years.
   (b) Calculate an adjustment to the amount in subdivision (a) as
follows:
   (1) Subtract the amount in subdivision (a) from the amount
computed in subdivision (e) of Section 2574. A difference of less
than zero shall be deemed to be zero.
   (2) Divide the difference for the county superintendent of schools
calculated in paragraph (1) by the total of the differences for all
county superintendents of schools calculated pursuant to paragraph
(1).
   (3) (A) Multiply the proportion calculated in paragraph (2) by the
amount of funding appropriated for purposes of this section. The
amount calculated shall not exceed the difference for the county
superintendent of schools calculated in paragraph (1).
   (B) Add the amount calculated in subparagraph (A) to the
allocation to the county superintendent of schools as calculated
pursuant to subdivision (a).
   (c) Subtract from the amount calculated in subparagraph (B) of
paragraph (3) of subdivision (b) the sum of each of the following:
   (1) Local property tax revenues received pursuant to Section 2573
in the then current fiscal year.
   (2) Any amounts that the county superintendent of schools was
required to maintain as restricted and not available for expenditure
in the 1978-79 fiscal year as specified in the second paragraph of
subdivision (c) of Section 6 of Chapter 292 of the Statutes of 1978,
as amended by Chapter 51 of the Statutes of 1979.
   (3) The amount received pursuant to subparagraph (C) of paragraph
(3) of subdivision (a) of Section 33607.5 of the Health and Safety
Code that is considered property taxes pursuant to that section.
   (4) The amount, if any, received pursuant to Sections 34177,
34179.5, 34179.6, and 34188 of the Health and Safety Code.
   (5) (A) The amount, if any, received pursuant to subparagraph (B)
of paragraph (3) of subdivision (e) of Section 36 of Article XIII of
the California Constitution.
   (B) The amount in subparagraph (A) shall only offset the amount
included in paragraph (1) of subdivision (a).
   (d) (1) The Superintendent shall apportion to the county
superintendent of schools either of the following:
   (A) If the calculation in paragraph (1) of subdivision (b) is
positive, the amount calculated in subdivision (c).
   (B) (i) If the calculation in paragraph (1) of subdivision (b) is
equal to zero or is negative, the sum of the amounts in paragraphs
(1) and (2) of subdivision (a), less the sum of the amounts included
in paragraphs (1) to (5), inclusive, of subdivision (c).
   (ii) For the first fiscal year in which the amount calculated in
subdivision (e) of Section 2574 is greater than the sum of the
amounts in paragraphs (1) and (2) of subdivision (a) and for each
fiscal year thereafter, the Superintendent shall apportion to the
county superintendent of schools the amount calculated in subdivision
(e) of Section 2574, less the sum of the amounts included in
paragraphs (1) to (5), inclusive, of subdivision (c).
   (iii) In any fiscal year before clause (ii) is operative, the
county superintendent of schools shall develop, and present at least
twice per fiscal year to the parents of pupils and the county board
of education, information that enhances their understanding of and
familiarity with the local control funding formula and the local
control and accountability plan. When presenting this information,
the county superintendent of schools shall explain, at a minimum and
consistent with Section 48985, how parents can meaningfully
participate and how the county office of education will provide
meaningful opportunities for parental involvement, including, but not
limited to, effective schoolsite councils and English learner
advisory committees.
   (2) If the amount determined pursuant to paragraph (1) is
negative, state aid shall not be apportioned to the county
superintendent of schools pursuant to paragraph (1). An amount of
funds of that county superintendent of schools equal to that negative
amount shall be deemed restricted and not available for expenditure
during the fiscal year in which subdivision (d) applies. In the
following fiscal year, that amount shall be considered local property
tax revenue for purposes of paragraph (1) of subdivision (c).
   (3) Commencing with the 2014-15 fiscal year, the Superintendent
shall apportion to the county superintendent of schools an amount of
state aid of no less than the amount calculated in paragraph (2) of
subdivision (a), including any amount apportioned pursuant to
paragraph (1).
   (e) (1) Funds apportioned pursuant to this section shall be
available for any locally determined educational purpose.
   (2)  (A)    Funds apportioned for purposes of a
supplemental grant pursuant to paragraph (2) and subparagraph (B) of
paragraph (3) of subdivision (c) of Section  2754, 
 2574  shall only be used to serve and assist the pupils
whose circumstances generated those funds and shall supplement, not
supplant, existing state and federal funds expended on unduplicated
pupils pursuant to a local control and accountability plan adopted by
the county board of education. 
   (B) County superintendents of schools that receive supplemental
grants pursuant to this section shall provide services and assistance
to an unduplicated pupil or pupils whose circumstances generated
those funds at any school enrolling one or more unduplicated pupils.
 
   (3) (A) Notwithstanding paragraph (2), a county superintendent of
schools may use funds apportioned pursuant to this article, together
with any other federal, state, or local funds, to improve the entire
educational program of a school in which at least 70 percent of the
enrolled pupils are unduplicated pupils, as defined in paragraph (1)
of subdivision (b) of Section 2574, and that use of funds shall be
referred to as a schoolwide program for purposes of this paragraph.
 
   (B) A school participating in a schoolwide program may use funds
apportioned pursuant to this article to benefit any pupil enrolled in
the participating school.  
   (C) A school participating in a schoolwide program shall only use
funds apportioned pursuant to this article to supplement funds that
are, in the absence of the apportionment of funds pursuant to this
article, available from other sources, including those that support
legally required services for pupils with exceptional needs. 

   (D) A county superintendent of schools shall not make pupil
enrollment decisions for purposes of making schools eligible to
participate in a schoolwide program.  
   (E) A county superintendent of schools that chooses to use funds
apportioned pursuant to this article to operate a schoolwide program
shall describe how the funds will be used in the local control and
accountability plan adopted by the county board of education. 

   (3) 
    (4)  Commencing with the 2014-15 fiscal year, unless
otherwise required by federal law, any requirements associated with
the items listed in paragraph (2) of subdivision (a) shall not apply.

   2576.  (a) If a county superintendent of schools enrolls in a
school operated by the county superintendent of schools a pupil not
funded pursuant to clause (i), (ii), or (iii) of subparagraph (A) of
paragraph (3) of subdivision (c) of Section 2574, any attendance
generated by that pupil shall be credited to the school district of
residence. That school district shall pay to the county
superintendent of schools the entire entitlement generated for each
unit of average daily attendance by that pupil.
   (b) For purposes of this section, the school district of residence
for a homeless child, as defined in Section 1981.2, shall be deemed
to be the school district that last provided educational services to
that child or, if it is not possible to determine that school
district, the largest school district in the county.
   2577.  Notwithstanding any other law, revenue limit funding for
county superintendents of schools for the 2013-14 fiscal year and
prior fiscal years shall continue to be adjusted pursuant to Article
3 (commencing with Section 2550), as that section read on January 1,
2014.
   2578.  Commencing on July 1, 2014, all of the following shall
apply:
   (a) All references to Section 2558 shall instead refer to Section
2575.
   (b) Unless context requires otherwise, all references to the
revenue limit of a county office of education or county
superintendent of schools shall instead refer to the county local
control funding formula.
   2579.  This article shall become operative on July 1, 2014.
  SEC. 8.  Section 14002 of the Education Code is amended to read:
   14002.  (a) The Controller shall during each fiscal year
commencing with the 1980-81 fiscal year, transfer from the General
Fund of the state to that portion of the State School Fund restricted
for elementary and high school purposes, hereinafter called Section
A of the State School Fund such sums, in addition to the sums
accruing from other sources, as shall provide in Section A of the
State School Fund for apportionment during the fiscal year a total
amount per pupil in average daily attendance during the preceding
fiscal year credited to all elementary, high, and unified school
districts and to all county superintendents of schools in the state,
as certified by the Superintendent of Public Instruction, of one
hundred eighty dollars ($180).
   (b) The Controller shall also transfer, as needed during each
fiscal year commencing with the 1980-81 fiscal year, such additional
amounts from the General Fund to Section A of the State School Fund
as are certified from time to time by the Superintendent of Public
Instruction to be necessary to meet actual computed apportionments
from Section A of the State School Fund for the purposes set forth in
Section 41301; provided that the total of such additional amounts
transferred in a fiscal year shall not exceed, except pursuant to
subdivision (c) of this section, one thousand two hundred sixty-eight
dollars ($1,268) for the 1980-81 fiscal year and fiscal years
thereafter, per pupil in average daily attendance during the
preceding fiscal year credited to all elementary, high, and unified
school districts and to all county superintendents of schools in the
state, as certified by the Superintendent of Public Instruction.
   (c) In addition to the amounts authorized to be transferred to
Section A of the State School Fund under subdivisions (a) and (b),
the Controller shall transfer from the General Fund to Section A of
the State School Fund during the fiscal year, upon certification of
the Superintendent of Public Instruction, if necessary to meet actual
computed apportionments for the fiscal year for the purposes set
forth in Sections 41300 and 41301, an amount not to exceed the lesser
of: (1) 1 percent of the total apportionment from Section A of the
State School Fund in the preceding fiscal year for the purposes set
forth in Sections 41300 and 41301, or (2) the net amount, if any, by
which the total amounts authorized to be transferred from the General
Fund to Section A of the State School Fund under subdivisions (a)
and (b) in prior fiscal years have exceeded the total amounts
actually apportioned in prior fiscal years for the purposes set forth
in Sections 41300 and 41301.
   (d) The Controller shall also transfer to Section A of the State
School Fund any additional amounts appropriated thereto by the
Legislature in augmentation of any of the amounts for any of the
purposes set forth in Sections 41300 and 41301 and such additional
amounts shall be allowed and apportioned by the Superintendent of
Public Instruction and warrants therefor drawn by the Controller in
the manner provided in Sections 41050, 46304, and 84503 and in this
article, Article 2 (commencing with Section 14040), Article 3
(commencing with Section 41330) of Chapter 3, and Article 1
(commencing with Section 41600) of Chapter 4 of Part 24.
   (e) The amounts transferred under subdivisions (a) and (b) of this
section shall be cumulatively increased by the following amounts:
   (1) In the 1981-82 fiscal year, by 7 percent.
   (2) In the 1982-83 fiscal year and each fiscal year thereafter, by
6 percent.
   (f) This section shall become operative on July 1, 2002.
   (g) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 9.  Section 14002 is added to the Education Code, to read:
   14002.  (a) Notwithstanding any other law, upon certification of
the Superintendent, the Controller shall transfer from the General
Fund to Section A of the State School Fund during each fiscal year
the amount of moneys required to meet the actual computed
apportionments for the fiscal year for the purposes set forth in
Sections 2575, 42238.02, and 42238.03.
   (b) The Controller shall also transfer to Section A of the State
School Fund any additional amounts appropriated thereto by the
Legislature in augmentation of any of the amounts for any of the
purposes set forth in Sections 2575, 42238.02, and 42238.03 and such
additional amounts shall be allowed and apportioned by the
Superintendent and warrants therefor drawn by the Controller in the
manner provided in Sections 41050 and 46304, and in this article,
Article 2 (commencing with Section 14040), Article 3 (commencing with
Section 41330) of Chapter 3 of Part 24 of Division 3 of Title 2, and
Article 1 (commencing with Section 41600) of Chapter 4 of Part 24 of
Division 3 of Title 2.
   (c) This section shall become operative on July 1, 2014.
  SEC. 10.  Section 14002.1 of the Education Code is amended to read:

   14002.1.  (a) Notwithstanding any other law, for purposes of
determining  (a)   (1)  the amounts to be
certified pursuant to Sections 14002 and 14004,  (b)
  (2)  allocations made pursuant to Section 41301,
 (c)   (3)  the apportionments required to
be made pursuant to Sections 41330, 41332, and 41335,  (d)
  (4)  revenue limits for school districts pursuant
to Section 42238, as adjusted pursuant to Sections 42238.14,
42238.145, and 42238.146, and  (e)   (5) 
revenue limits for county offices of education pursuant to Section
2558, as adjusted pursuant to Sections 2558.4, 2558.45, and 2558.46,
the Superintendent of Public Instruction shall use the property tax
estimates received from county auditors pursuant to Section 75.70 of
the Revenue and Taxation Code.
   (b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 11.  Section 14002.1 is added to the Education Code, to read:
   14002.1.  (a) Notwithstanding any other law, for purposes of
determining the amounts to be certified pursuant to subdivision (a)
of Section 14002, the Superintendent shall use the property tax
estimates received from county auditors pursuant to Section 75.70 of
the Revenue and Taxation Code.
   (b) This section shall become operative on July 1, 2014.
  SEC. 12.  Section 14002.5 of the Education Code is amended to read:

   14002.5.  (a) In making the computation prescribed by subdivision
(b) of Section 14002, the Controller shall cumulatively increase the
seventy-nine cents ($0.79) amount prescribed by that subdivision by 6
percent annually, and shall cumulatively increase the twenty-one
dollar and fifty cents ($21.50) amount prescribed by that subdivision
by 6 percent annually.
   (b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 13.  Section 14003 of the Education Code is amended to read:
   14003.  (a) Commencing with the 2010-11 fiscal year, on March 28
of each fiscal year in which the percentage growth in per capita
General Fund revenues exceeds the percentage growth in California per
capita personal income, the Controller shall transfer from the
General Fund to Sections A and B of the State School Fund, as set
forth in subdivision (c), the amount determined pursuant to paragraph
(1) minus the amount determined pursuant to paragraph (2).
   (1) The product of General Fund revenues from proceeds of taxes
and one-half of the difference between the percentage growth in per
capita General Fund revenues from proceeds of taxes and in California
per capita personal income.
   (2) The amount of the maintenance factor certified pursuant to
Section 41207.2 that is allocated in the current year pursuant to
subdivision (e) of Section 8 of Article XVI of the California
Constitution.
   (b) The amount transferred pursuant to subdivision (a) shall be in
addition to amounts required to be allocated pursuant to subdivision
(b) of Section 8 of Article XVI of the California Constitution.
   (c) (1) Of the amount determined pursuant to subdivision (a), the
Controller shall transfer 92 percent to Section A of the State School
Fund. The Superintendent shall allocate the funds transferred
pursuant to this paragraph in the following priority order:
   (A) An amount not to exceed two hundred million dollars
($200,000,000) for the purposes of revenue limit equalization in a
manner consistent with Section 42238.49 for the first fiscal year in
which funds are transferred pursuant to this paragraph.
   (B) Such amounts as necessary to reduce the revenue limit deficit
factors set forth in Sections 2558.46 and 42238.146 until the deficit
factors are reduced to zero.
   (C) Any remaining amounts transferred pursuant to this paragraph
shall be allocated as an equal increase per unit of average daily
attendance in general purpose apportionments for purposes of Sections
2558, 42238, and 47633.
   (2) Of the amount determined pursuant to subdivision (a), the
Controller shall transfer 8 percent to Section B of the State School
Fund. The Chancellor of the  California  Community Colleges
shall allocate the funds transferred pursuant to this paragraph in
equal amounts for the following purposes:
   (A) For purposes of career and technical education pursuant to
Chapter 352 of the Statutes of 2005.
   (B) As a proportionate increase in general purpose apportionments
for community college districts.
   (d) For purposes of determining the amount required pursuant to
paragraph (2) or (3), as applicable, of subdivision (b) of Section 8
of Article XVI of the California Constitution for the following
fiscal year, all amounts transferred in the prior fiscal year
pursuant to this section shall be deemed allocations to school
districts and community college districts from General Fund proceeds
of taxes appropriated pursuant to Article XIII B for that prior
fiscal year.
   (e) The sum of the amounts transferred pursuant to this section
plus the sum of the amounts of the maintenance factor certified
pursuant to Section 41207.2 that is allocated pursuant to subdivision
(e) of Section 8 of Article XVI of the California Constitution shall
not exceed the total amount of eleven billion two hundred twelve
million nine hundred nine thousand dollars ($11,212,909,000) less any
maintenance factor amount that is allocated for the 2009-10 fiscal
year.
   (f) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 14.  Section 14003 is added to the Education Code, to read:
   14003.  (a) Commencing with the 2010-11 fiscal year, on March 28
of each fiscal year in which the percentage growth in per capita
General Fund revenues exceeds the percentage growth in California per
capita personal income, the Controller shall transfer from the
General Fund to Sections A and B of the State School Fund, as set
forth in subdivision (c), the amount determined pursuant to paragraph
(1) minus the amount determined pursuant to paragraph (2).
   (1) The product of General Fund revenues from proceeds of taxes
and one-half of the difference between the percentage growth in per
capita General Fund revenues from proceeds of taxes and in California
per capita personal income.
   (2) The amount of the maintenance factor certified pursuant to
Section 41207.2 that is allocated in the current year pursuant to
subdivision (e) of Section 8 of Article XVI of the California
Constitution.
   (b) The amount transferred pursuant to subdivision (a) shall be in
addition to amounts required to be allocated pursuant to subdivision
(b) of Section 8 of Article XVI of the California Constitution.
   (c) (1) Of the amount determined pursuant to subdivision (a), the
Controller shall transfer 92 percent to Section A of the State School
Fund. The Superintendent shall allocate the funds transferred
pursuant to this paragraph in the following priority order:
   (A) Such amounts as necessary to implement the local control
funding formula pursuant to Section 42238.02, as implemented by
Section 42238.03, and the county local control funding formula,
pursuant to Section 2575.
   (B) Any remaining amounts transferred pursuant to this paragraph
shall be allocated pursuant to Sections 2575 and 42238.02, as
implemented by Section 42238.03.
   (2) Of the amount determined pursuant to subdivision (a), the
Controller shall transfer 8 percent to Section B of the State School
Fund. The Chancellor of the  California  Community Colleges
shall allocate the funds transferred pursuant to this paragraph in
equal amounts for the following purposes:
   (A) For purposes of career and technical education pursuant to
Chapter 352 of the Statutes of 2005.
   (B) As a proportionate increase in general purpose apportionments
for community college districts.
   (d) For purposes of determining the amount required pursuant to
paragraph (2) or (3), as applicable, of subdivision (b) of Section 8
of Article XVI of the California Constitution for the following
fiscal year, all amounts transferred in the prior fiscal year
pursuant to this section shall be deemed allocations to school
districts and community college districts from General Fund proceeds
of taxes appropriated pursuant to Article XIII B for that prior
fiscal year.
   (e) The sum of the amounts transferred pursuant to this section
plus the sum of the amounts of the maintenance factor certified
pursuant to Section 41207.2 that is allocated pursuant to subdivision
(e) of Section 8 of Article XVI of the California Constitution shall
not exceed the total amount of eleven billion two hundred twelve
million nine hundred nine thousand dollars ($11,212,909,000) less any
maintenance factor amount that is allocated for the 2009-10 fiscal
year.
   (f) This section shall become operative on July 1, 2014.
  SEC. 15.  Section 14501 of the Education Code is amended to read:
   14501.  (a) As used in this chapter, "financial and compliance
audit" shall be consistent with the definition provided in the
"Standards for Audits of Governmental Organizations, Programs,
Activities, and Functions" promulgated by the Comptroller General of
the United States. Financial and compliance audits conducted under
this chapter shall fulfill federal single audit requirements.
   (b) As used in this chapter, "compliance audit" means an audit
that ascertains and verifies whether or not funds provided through
apportionment, contract, or grant, either federal or state, have been
properly disbursed and expended as required by law or regulation or
both and includes the verification of each of the following:
   (1) The reporting requirements for the sufficiency of textbooks or
instructional materials, or both, as defined in Section 60119.
   (2) Teacher misassignments pursuant to Section 44258.9.
   (3) The accuracy of information reported on the School
Accountability Report Card required by Section 33126. The
requirements set forth in paragraphs (1) and (2) and this paragraph
shall be added to the audit guide requirements pursuant to
subdivision (b) of Section 14502.1.
   (c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 16.  Section 14501 is added to the Education Code, to read:
   14501.  (a) As used in this chapter, "financial and compliance
audit" shall be consistent with the definition provided in the
"Standards for Audits of Governmental Organizations, Programs,
Activities, and Functions" promulgated by the Comptroller General of
the United States. Financial and compliance audits conducted under
this chapter shall fulfill federal single audit requirements.
   (b) As used in this chapter, "compliance audit" means an audit
that ascertains and verifies whether or not funds provided through
apportionment, contract, or grant, either federal or state, have been
properly disbursed and expended as required by law or regulation or
both and includes the verification of each of the following:
   (1) Expenditure of these funds in accordance with the local
control and accountability plan adopted by the governing board of the
school district pursuant to Sections 52060 and 52064 or the county
board of education pursuant to Sections 52062 and 52064.
   (2) The reporting requirements for the sufficiency of textbooks or
instructional materials, or both, as defined in Section 60119.
   (3) Teacher misassignments pursuant to Section 44258.9.
   (4) The accuracy of information reported on the School
Accountability Report Card required by Section 33126. The
requirements set forth in paragraphs (1) and (2) and this paragraph
shall be added to the audit guide requirements pursuant to
subdivision (b) of Section 14502.1.
   (c) This section shall become operative on July 1, 2014.
  SEC. 17.  Section 33127 of the Education Code is amended to read:
   33127.  (a) The Superintendent of Public Instruction, the
Controller, and the Director  of the Department  of
Finance shall develop, on or before March 1, 1989, standards and
criteria to be reviewed and adopted by
                   the State Board of Education, and to be used by
local educational agencies in the development of annual budgets and
the management of subsequent expenditures from that budget. During
the development of the standards and criteria, the Superintendent of
Public Instruction shall convene a committee composed of
representatives from school districts, county offices of education,
state agencies, the Legislature, and appropriate labor and
professional organizations. The committee may review and comment on
the proposal standards and criteria prior to their adoption. In
addition, the standards and criteria shall be used to monitor the
fiscal stability of local educational agencies as provided for in
Sections 1240.1, 1240.2, 1621, 1623, 33131, 42127, and 42127.1.
   (b) The Superintendent of Public Instruction, the Controller, and
the Director  of the Department  of Finance shall
update the standards and criteria developed pursuant to subdivision
(a) on or before September 1, 2005. The updated standards and
criteria shall be reviewed and adopted pursuant to the procedure
established by subdivision (a) and are applicable to local
educational agency budgets commencing with the 2006-07 fiscal year
and each fiscal year thereafter.
   (c) After September 1, 2005, to the extent necessary, any
revisions or updates to the standards and criteria shall be developed
by the Superintendent of Public Instruction, the Controller, and the
Director  of the Department  of Finance pursuant
 to  the procedures established by subdivision (a). The
revisions or updates shall specify the fiscal year in which the
revisions or updates are applicable.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 18.  Section 33127 is added to the Education Code, to read:
   33127.  (a) The Superintendent, the Controller, and the Director
 of the Department  of Finance shall develop, on or
before March 1, 1989, standards and criteria to be reviewed and
adopted by the state board, and to be used by local educational
agencies in the development of annual budgets and the management of
subsequent expenditures from that budget. During the development of
the standards and criteria, the Superintendent shall convene a
committee composed of representatives from school districts, county
offices of education, state agencies, the Legislature, and
appropriate labor and professional organizations. The committee may
review and comment on the proposal standards and criteria prior to
their adoption. In addition, the standards and criteria shall be used
to monitor the fiscal stability of local educational agencies as
provided for in Sections 1240.1, 1240.2, 1621, 1623, 33131, 42127,
and 42127.1.
   (b) The Superintendent, the Controller, and the Director 
of the Department  of Finance shall update the standards and
criteria developed pursuant to subdivision (a) on or before
September 1, 2005. The updated standards and criteria shall be
reviewed and adopted pursuant to the procedure established by
subdivision (a) and are applicable to local educational agency
budgets commencing with the 2006-07 fiscal year and each fiscal year
thereafter.
   (c) The Superintendent, the Controller, and the Director 
of the Department  of Finance shall update the standards and
criteria developed pursuant to subdivision (a) on or before January
1, 2015. Standards and criteria related to the requirements of
Article 5 (commencing with Section 52060) of Chapter 6.1 of Part 28
of Title 2 shall be included. The updated standards and criteria
shall be reviewed and adopted pursuant to the procedure established
by subdivision (a) and are applicable to local educational agency
budgets commencing with the 2015-16 fiscal year and each fiscal year
thereafter.
   (d) After January 1, 2015, to the extent necessary, any revisions
or updates to the standards and criteria shall be developed by the
Superintendent, the Controller, and the Director  of the
Department  of Finance pursuant  to  the procedures
established by subdivision (a). The revisions or updates shall
specify the fiscal year in which the revisions or updates are
applicable.
   (e) This section shall become operative on July 1, 2014.
  SEC. 19.  Section 41020 of the Education Code is amended to read:
   41020.  (a) It is the intent of the Legislature to encourage sound
fiscal management practices among local educational agencies for the
most efficient and effective use of public funds for the education
of children in California by strengthening fiscal accountability at
the district, county, and state levels.
   (b) (1) Not later than the first day of May of each fiscal year,
each county superintendent of schools shall provide for an audit of
all funds under his or her jurisdiction and control and the governing
board of each local educational agency shall either provide for an
audit of the books and accounts of the local educational agency,
including an audit of income and expenditures by source of funds, or
make arrangements with the county superintendent of schools having
jurisdiction over the local educational agency to provide for that
auditing.
   (2) A contract to perform the audit of a local educational agency
that has a disapproved budget or has received a negative
certification on any budget or interim financial report during the
current fiscal year or either of the two preceding fiscal years, or
for which the county superintendent of schools has otherwise
determined that a lack of going concern exists, is not valid unless
approved by the responsible county superintendent of schools and the
governing board.
   (3) If the governing board of a local educational agency has not
provided for an audit of the books and accounts of the local
educational agency by April 1, the county superintendent of schools
having jurisdiction over the local educational agency shall provide
for the audit of each local educational agency.
   (4) An audit conducted pursuant to this section shall comply fully
with the Government Auditing Standards issued by the Comptroller
General of the United States.
   (5) For purposes of this section, "local educational agency" does
not include community colleges.
   (c) Each audit conducted in accordance with this section shall
include all funds of the local educational agency, including the
student body and cafeteria funds and accounts and any other funds
under the control or jurisdiction of the local educational agency.
Each audit shall also include an audit of pupil attendance
procedures.
   (d) All audit reports for each fiscal year shall be developed and
reported using a format established by the Controller after
consultation with the Superintendent and the Director of Finance.
   (e) (1) The cost of the audits provided for by the county
superintendent of schools shall be paid from the county school
service fund and the county superintendent of schools shall transfer
the pro rata share of the cost chargeable to each district from
district funds.
   (2) The cost of the audit provided for by a governing board shall
be paid from local educational agency funds. The audit of the funds
under the jurisdiction and control of the county superintendent of
schools shall be paid from the county school service fund.
   (f) (1) The audits shall be made by a certified public accountant
or a public accountant, licensed by the California Board of
Accountancy, and selected by the local educational agency, as
applicable, from a directory of certified public accountants and
public accountants deemed by the Controller as qualified to conduct
audits of local educational agencies, which shall be published by the
Controller not later than December 31 of each year.
   (2) Commencing with the 2003-04 fiscal year and except as provided
in subdivision (d) of Section 41320.1, it is unlawful for a public
accounting firm to provide audit services to a local educational
agency if the lead audit partner, or coordinating audit partner,
having primary responsibility for the audit, or the audit partner
responsible for reviewing the audit, has performed audit services for
that local educational agency in each of the six previous fiscal
years. The Education Audits Appeal Panel may waive this requirement
if the panel finds that no otherwise eligible auditor is available to
perform the audit.
   (3) It is the intent of the Legislature that, notwithstanding
paragraph (2), the rotation within public accounting firms conform to
provisions of the federal Sarbanes-Oxley Act of 2002  (P.L.
  (Public Law  107-204; 15 U.S.C. Sec. 7201 et
seq.), and upon release of the report required by the act of the
Comptroller General of the United States addressing the mandatory
rotation of registered public accounting firms, the Legislature
intends to reconsider the provisions of paragraph (2). In determining
which certified public accountants and public accountants shall be
included in the directory, the Controller shall use the following
criteria:
   (A) The certified public accountants or public accountants shall
be in good standing as certified by the  California  Board
of Accountancy.
   (B) The certified public accountants or public accountants, as a
result of a quality control review conducted by the Controller
pursuant to Section 14504.2, shall not have been found to have
conducted an audit in a manner constituting noncompliance with
subdivision (a) of Section 14503.
   (g) (1) The auditor's report shall include each of the following:
   (A) A statement that the audit was conducted pursuant to standards
and procedures developed in accordance with Chapter 3 (commencing
with Section 14500) of Part 9 of Division 1 of Title 1.
   (B) A summary of audit exceptions and management improvement
recommendations.
   (C) Each audit of a local educational agency shall include an
evaluation by the auditor on whether there is substantial doubt about
the ability of the local educational agency to continue as a going
concern for a reasonable period of time. This evaluation shall be
based on the Statement of Auditing Standards (SAS) No. 59, as issued
by the AICPA regarding disclosure requirements relating to the
ability of the entity to continue as a going concern.
   (2) To the extent possible, a description of correction or plan of
correction shall be incorporated in the audit report, describing the
specific actions that are planned to be taken, or that have been
taken, to correct the problem identified by the auditor. The
descriptions of specific actions to be taken or that have been taken
shall not solely consist of general comments such as "will implement,"
"accepted the recommendation," or "will discuss at a later date."
   (h) Not later than December 15, a report of each local educational
agency audit for the preceding fiscal year shall be filed with the
county superintendent of schools of the county in which the local
educational agency is located, the department, and the Controller.
The Superintendent shall make any adjustments necessary in future
apportionments of all state funds, to correct any audit exceptions
revealed by those audit reports.
   (i) (1) Commencing with the 2002-03 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall be responsible
for reviewing the audit exceptions contained in an audit of a local
educational agency under his or her jurisdiction related to
attendance, inventory of equipment, internal control, and any
miscellaneous items, and determining whether the exceptions have been
either corrected or an acceptable plan of correction has been
developed.
   (2) Commencing with the 2004-05 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall include in the
review of audit exceptions performed pursuant to this subdivision
those audit exceptions related to use of instructional materials
program funds, teacher misassignments pursuant to Section 44258.9,
 and  information reported on the school accountability
report card required pursuant to Section 33126  ,  and shall
determine whether the exceptions are either corrected or an
acceptable plan of correction has been developed.
   (j) Upon submission of the final audit report to the governing
board of each local educational agency and subsequent receipt of the
audit by the county superintendent of schools having jurisdiction
over the local educational agency, the county office of education
shall do all of the following:
   (1) Review audit exceptions related to attendance, inventory of
equipment, internal control, and other miscellaneous exceptions.
Attendance exceptions or issues shall include, but not be limited to,
those related to revenue limits, adult education, and independent
study.
   (2) If a description of the correction or plan of correction has
not been provided as part of the audit required by this section, then
the county superintendent of schools shall notify the local
educational agency and request the governing board of the local
educational agency to provide to the county superintendent of schools
a description of the corrections or plan of correction by March 15.
   (3) Review the description of correction or plan of correction and
determine its adequacy. If the description of the correction or plan
of correction is not adequate, the county superintendent of schools
shall require the local educational agency to resubmit that portion
of its response that is inadequate.
   (k) Each county superintendent of schools shall certify to the
Superintendent and the Controller, not later than May 15, that his or
her staff has reviewed all audits of local educational agencies
under his or her jurisdiction for the prior fiscal year, that all
exceptions that the county superintendent was required to review were
reviewed, and that all of those exceptions, except as otherwise
noted in the certification, have been corrected by the local
educational agency or that an acceptable plan of correction has been
submitted to the county superintendent of schools. In addition, the
county superintendent shall identify, by local educational agency,
any attendance-related audit exception or exceptions involving state
funds, and require the local educational agency to which the audit
exceptions were directed to submit appropriate reporting forms for
processing by the Superintendent.
   (  l  ) In the audit of a local educational agency for a
subsequent year, the auditor shall review the correction or plan or
plans of correction submitted by the local educational agency to
determine if the exceptions have been resolved. If not, the auditor
shall immediately notify the appropriate county office of education
and the department and restate the exception in the audit report.
After receiving that notification, the department shall either
consult with the local educational agency to resolve the exception or
require the county superintendent of schools to follow up with the
local educational agency.
   (m) (1) The Superintendent shall be responsible for ensuring that
local educational agencies have either corrected or developed plans
of correction for any one or more of the following:
   (A) All federal and state compliance audit exceptions identified
in the audit.
   (B) Any exceptions that the county superintendent certifies as of
May 15 have not been corrected.
   (C) Any repeat audit exceptions that are not assigned to a county
superintendent to correct.
   (2) In addition, the Superintendent shall be responsible for
ensuring that county superintendents of schools and each county board
of education that serves as the governing board of a local
educational agency either correct all audit exceptions identified in
the audits of county superintendents of schools and of the local
educational agencies for which the county boards of education serve
as the governing boards or develop acceptable plans of correction for
those exceptions.
   (3) The Superintendent shall report annually to the Controller on
his or her actions to ensure that school districts, county
superintendents of schools, and each county board of education that
serves as the governing board of a school district have either
corrected or developed plans of correction for any of the exceptions
noted pursuant to paragraph (1).
   (n) To facilitate correction of the exceptions identified by the
audits issued pursuant to this section, commencing with 2002-03
audits pursuant to this section, the Controller shall require
auditors to categorize audit exceptions in each audit report in a
manner that will make it clear to both the county superintendent of
schools and the Superintendent which exceptions they are responsible
for ensuring the correction of by a local educational agency. In
addition, the Controller annually shall select a sampling of county
superintendents of schools and perform a followup of the audit
resolution process of those county superintendents of schools and
report the results of that followup to the Superintendent and the
county superintendents of schools that were reviewed.
   (o) County superintendents of schools shall adjust subsequent
local property tax requirements to correct audit exceptions relating
to local educational agency tax rates and tax revenues.
   (p) If a governing board or county superintendent of schools fails
or is unable to make satisfactory arrangements for the audit
pursuant to this section, the Controller shall make arrangements for
the audit and the cost of the audit shall be paid from local
educational agency funds or the county school service fund, as the
case may be.
   (q) Audits of regional occupational centers and programs are
subject to the provisions of this section.
   (r) This section does not authorize examination of, or reports on,
the curriculum used or provided for in any local educational agency.

   (s) Notwithstanding any other provision of law, a nonauditing,
management, or other consulting service to be provided to a local
educational agency by a certified public accounting firm while the
certified public accounting firm is performing an audit of the agency
pursuant to this section must be in accord with Government
Accounting Standards, Amendment No. 3, as published by the United
States General Accounting Office.
   (t) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 20.  Section 41020 is added to the Education Code, to read:
   41020.  (a) It is the intent of the Legislature to encourage sound
fiscal management practices among local educational agencies for the
most efficient and effective use of public funds for the education
of children in California by strengthening fiscal accountability at
the school district, county, and state levels.
   (b) (1) Not later than the first day of May of each fiscal year,
each county superintendent of schools shall provide for an audit of
all funds under his or her jurisdiction and control and the governing
board of each local educational agency shall either provide for an
audit of the books and accounts of the local educational agency,
including an audit of income and expenditures by source of funds, or
make arrangements with the county superintendent of schools having
jurisdiction over the local educational agency to provide for that
auditing.
   (2) A contract to perform the audit of a local educational agency
that has a disapproved budget or has received a negative
certification on any budget or interim financial report during the
current fiscal year or either of the two preceding fiscal years, or
for which the county superintendent of schools has otherwise
determined that a lack of going concern exists, is not valid unless
approved by the responsible county superintendent of schools and the
governing board of the local educational agency.
   (3) If the governing board of a local educational agency has not
provided for an audit of the books and accounts of the local
educational agency by April 1, the county superintendent of schools
having jurisdiction over the local educational agency shall provide
for the audit of each local educational agency.
   (4) An audit conducted pursuant to this section shall comply fully
with the Government Auditing Standards issued by the Comptroller
General of the United States.
   (5) For purposes of this section, "local educational agency" does
not include community colleges.
   (c) Each audit conducted in accordance with this section shall
include all funds of the local educational agency, including the
student body and cafeteria funds and accounts and any other funds
under the control or jurisdiction of the local educational agency.
Each audit shall also include an audit of pupil attendance
procedures. Each audit shall include a determination of whether funds
were expended in accordance with a local control and accountability
plan pursuant to Article 5 (commencing with Section 52060) of Chapter
6.1 of Part 28 of Division 3.
   (d) All audit reports for each fiscal year shall be developed and
reported using a format established by the Controller after
consultation with the Superintendent and the Director of Finance.
   (e) (1) The cost of the audits provided for by the county
superintendent of schools shall be paid from the county school
service fund and the county superintendent of schools shall transfer
the pro rata share of the cost chargeable to each school district
from school district funds.
   (2) The cost of the audit provided for by a governing board of a
local educational agency shall be paid from local educational agency
funds. The audit of the funds under the jurisdiction and control of
the county superintendent of schools shall be paid from the county
school service fund.
   (f) (1) The audits shall be made by a certified public accountant
or a public accountant, licensed by the California Board of
Accountancy, and selected by the local educational agency, as
applicable, from a directory of certified public accountants and
public accountants deemed by the Controller as qualified to conduct
audits of local educational agencies, which shall be published by the
Controller not later than December 31 of each year.
   (2) Commencing with the 2003-04 fiscal year and except as provided
in subdivision (d) of Section 41320.1, it is unlawful for a public
accounting firm to provide audit services to a local educational
agency if the lead audit partner, or coordinating audit partner,
having primary responsibility for the audit, or the audit partner
responsible for reviewing the audit, has performed audit services for
that local educational agency in each of the six previous fiscal
years. The Education Audits Appeal Panel may waive this requirement
if the panel finds that no otherwise eligible auditor is available to
perform the audit.
   (3) It is the intent of the Legislature that, notwithstanding
paragraph (2), the rotation within public accounting firms conform to
provisions of the federal Sarbanes-Oxley Act of 2002 (Public Law
107-204; 15 U.S.C. Sec. 7201 et seq.), and upon release of the report
required by the act of the Comptroller General of the United States
addressing the mandatory rotation of registered public accounting
firms, the Legislature intends to reconsider the provisions of
paragraph (2). In determining which certified public accountants and
public accountants shall be included in the directory, the Controller
shall use the following criteria:
   (A) The certified public accountants or public accountants shall
be in good standing as certified by the  California  Board
of Accountancy.
   (B) The certified public accountants or public accountants, as a
result of a quality control review conducted by the Controller
pursuant to Section 14504.2, shall not have been found to have
conducted an audit in a manner constituting noncompliance with
subdivision (a) of Section 14503.
   (g) (1) The auditor's report shall include each of the following:
   (A) A statement that the audit was conducted pursuant to standards
and procedures developed in accordance with Chapter 3 (commencing
with Section 14500) of Part 9 of Division 1 of Title 1.
   (B) A summary of audit exceptions and management improvement
recommendations.
   (C) Each audit of a local educational agency shall include an
evaluation by the auditor on whether there is substantial doubt about
the ability of the local educational agency to continue as a going
concern for a reasonable period of time. This evaluation shall be
based on the Statement on Auditing Standards (SAS) No. 59, as issued
by the AICPA regarding disclosure requirements relating to the
ability of the entity to continue as a going concern.
   (2) To the extent possible, a description of correction or plan of
correction shall be incorporated in the audit report, describing the
specific actions that are planned to be taken, or that have been
taken, to correct the problem identified by the auditor. The
descriptions of specific actions to be taken or that have been taken
shall not solely consist of general comments such as "will implement,"
"accepted the recommendation," or "will discuss at a later date."
   (h) Not later than December 15, a report of each local educational
agency audit for the preceding fiscal year shall be filed with the
county superintendent of schools of the county in which the local
educational agency is located, the department, and the Controller.
The Superintendent shall make any adjustments necessary in future
apportionments of all state funds, to correct any audit exceptions
revealed by those audit reports.
   (i) (1) Commencing with the 2002-03 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall be responsible
for reviewing the audit exceptions contained in an audit of a local
educational agency under his or her jurisdiction related to
attendance, inventory of equipment, internal control, and any
miscellaneous items, and determining whether the exceptions have been
either corrected or an acceptable plan of correction has been
developed.
   (2) Commencing with the 2004-05 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall include in the
review of audit exceptions performed pursuant to this subdivision
those audit exceptions related to use of instructional materials
                                           program funds, teacher
misassignments pursuant to Section 44258.9,  and 
information reported on the school accountability report card
required pursuant to Section 33126  ,  and shall determine
whether the exceptions are either corrected or an acceptable plan of
correction has been developed.
   (j) Upon submission of the final audit report to the governing
board of each local educational agency and subsequent receipt of the
audit by the county superintendent of schools having jurisdiction
over the local educational agency, the county office of education
shall do all of the following:
   (1) Review audit exceptions related to attendance, inventory of
equipment, internal control, and other miscellaneous exceptions.
Attendance exceptions or issues shall include, but not be limited to,
those related to local control funding formula allocations pursuant
to Section 42238.02, as implemented by Section 42238.03, and
independent study.
   (2) If a description of the correction or plan of correction has
not been provided as part of the audit required by this section, then
the county superintendent of schools shall notify the local
educational agency and request the governing board of the local
educational agency to provide to the county superintendent of schools
a description of the corrections or plan of correction by March 15.
   (3) Review the description of correction or plan of correction and
determine its adequacy. If the description of the correction or plan
of correction is inadequate, the county superintendent of schools
shall require the local educational agency to resubmit that portion
of its response that is inadequate.
   (k) Each county superintendent of schools shall certify to the
Superintendent and the Controller, not later than May 15, that his or
her staff has reviewed all audits of local educational agencies
under his or her jurisdiction for the prior fiscal year, that all
exceptions that the county superintendent was required to review were
reviewed, and that all of those exceptions, except as otherwise
noted in the certification, have been corrected by the local
educational agency or that an acceptable plan of correction has been
submitted to the county superintendent of schools. In addition, the
county superintendent shall identify, by local educational agency,
any attendance-related audit exception or exceptions involving state
funds, and require the local educational agency to which the audit
exceptions were directed to submit appropriate reporting forms for
processing by the Superintendent.
   (  l  ) In the audit of a local educational agency for a
subsequent year, the auditor shall review the correction or plan or
plans of correction submitted by the local educational agency to
determine if the exceptions have been resolved. If not, the auditor
shall immediately notify the appropriate county office of education
and the department and restate the exception in the audit report.
After receiving that notification, the department shall either
consult with the local educational agency to resolve the exception or
require the county superintendent of schools to follow up with the
local educational agency.
   (m) (1) The Superintendent shall be responsible for ensuring that
local educational agencies have either corrected or developed plans
of correction for any one or more of the following:
   (A) All federal and state compliance audit exceptions identified
in the audit.
   (B) Any exceptions that the county superintendent certifies as of
May 15 have not been corrected.
   (C) Any repeat audit exceptions that are not assigned to a county
superintendent to correct.
   (2) In addition, the Superintendent shall be responsible for
ensuring that county superintendents of schools and each county board
of education that serves as the governing board of a local
educational agency either correct all audit exceptions identified in
the audits of county superintendents of schools and of the local
educational agencies for which the county boards of education serve
as the governing boards or develop acceptable plans of correction for
those exceptions.
   (3) The Superintendent shall report annually to the Controller on
his or her actions to ensure that school districts, county
superintendents of schools, and each county board of education that
serves as the governing board of a school district have either
corrected or developed plans of correction for any of the exceptions
noted pursuant to paragraph (1).
   (n) To facilitate correction of the exceptions identified by the
audits issued pursuant to this section, commencing with 2002-03
audits pursuant to this section, the Controller shall require
auditors to categorize audit exceptions in each audit report in a
manner that will make it clear to both the county superintendent of
schools and the Superintendent which exceptions they are responsible
for ensuring the correction of by a local educational agency. In
addition, the Controller annually shall select a sampling of county
superintendents of schools and perform a followup of the audit
resolution process of those county superintendents of schools and
report the results of that followup to the Superintendent and the
county superintendents of schools that were reviewed.
   (o) County superintendents of schools shall adjust subsequent
local property tax requirements to correct audit exceptions relating
to local educational agency tax rates and tax revenues.
   (p) If a governing board of a local educational agency or county
superintendent of schools fails or is unable to make satisfactory
arrangements for the audit pursuant to this section, the Controller
shall make arrangements for the audit and the cost of the audit shall
be paid from local educational agency funds or the county school
service fund, as the case may be.
   (q) Audits of regional occupational centers and programs are
subject to the provisions  on   of  this
section.
   (r) This section does not authorize examination of, or reports on,
the curriculum used or provided for in any local educational agency.

   (s) Notwithstanding any other law, a nonauditing, management, or
other consulting service to be provided to a local educational agency
by a certified public accounting firm while the certified public
accounting firm is performing an audit of the local educational
agency pursuant to this section must be in accord with Government
Accounting Standards, Amendment No. 3, as published by the United
States General Accounting Office.
   (t) This section shall become operative on July 1, 2014.
  SEC. 21.  Section 41202 of the Education Code is amended to read:
   41202.  The words and phrases set forth in subdivision (b) of
Section 8 of Article XVI of the Constitution of the State of
California shall have the following meanings:
   (a) "Moneys to be applied by the State," as used in subdivision
(b) of Section 8 of Article XVI of the California Constitution, means
appropriations from the General Fund that are made for allocation to
school districts, as defined, or community college districts. An
appropriation that is withheld, impounded, or made without provisions
for its allocation to school districts or community college
districts, shall not be considered to be "moneys to be applied by the
State."
   (b) "General Fund revenues which may be appropriated pursuant to
Article XIII B," as used in paragraph (1) of subdivision (b) of
Section 8 of Article XVI, means General Fund revenues that are the
proceeds of taxes as defined by subdivision (c) of Section 8 of
Article XIII B of the California Constitution, including, for the
1986-87 fiscal year only, any revenues that are determined to be in
excess of the appropriations limit established pursuant to Article
XIII B for the fiscal year in which they are received. General Fund
revenues for a fiscal year to which paragraph (1) of subdivision (b)
is being applied shall include, in that computation, only General
Fund revenues for that fiscal year that are the proceeds of taxes, as
defined in subdivision (c) of Section 8 of Article XIII B of the
California Constitution, and shall not include prior fiscal year
revenues. Commencing with the 1995-96 fiscal year, and each fiscal
year thereafter, "General Fund revenues that are the proceeds of
taxes," as defined in subdivision (c) of Section 8 of Article XIII B
of the California Constitution, includes any portion of the proceeds
of taxes received from the state sales tax that are transferred to
the counties pursuant to, and only if, legislation is enacted during
the 1995-96 fiscal year the purpose of which is to realign children's
programs. The amount of the proceeds of taxes shall be computed for
any fiscal year in a manner consistent with the manner in which the
amount of the proceeds of taxes was computed by the Department of
Finance for purposes of the Governor's Budget for the Budget Act of
1986.
   (c) "General Fund revenues appropriated for school districts," as
used in paragraph (1) of subdivision (b) of Section 8 of Article XVI
of the California Constitution, means the sum of appropriations made
that are for allocation to school districts, as defined in Section
41302.5, regardless of whether those appropriations were made from
the General Fund to the Superintendent, to the Controller, or to any
other fund or state agency for the purpose of allocation to school
districts. The full amount of any appropriation shall be included in
the calculation of the percentage required by paragraph (1) of
subdivision (b) of Article XVI, without regard to any unexpended
balance of any appropriation. Any reappropriation of funds
appropriated in any prior year shall not be included in the sum of
appropriations.
   (d) "General Fund revenues appropriated for community college
districts," as used in paragraph (1) of subdivision (b) of Section 8
of Article XVI of the California Constitution, means the sum of
appropriations made that are for allocation to community college
districts, regardless of whether those appropriations were made from
the General Fund to the Controller, to the Chancellor of the
California Community Colleges, or to any other fund or state agency
for the purpose of allocation to community college districts. The
full amount of any appropriation shall be included in the calculation
of the percentage required by paragraph (1) of subdivision (b) of
Article XVI, without regard to any unexpended balance of any
appropriation. Any reappropriation of funds appropriated in any prior
year shall not be included in the sum of appropriations.
   (e) "Total allocations to school districts and community college
districts from General Fund proceeds of taxes appropriated pursuant
to Article XIII B," as used in paragraph (2) or (3) of subdivision
(b) of Section 8 of Article XVI of the California Constitution, means
the sum of appropriations made that are for allocation to school
districts, as defined in Section 41302.5, and community college
districts, regardless of whether those appropriations were made from
the General Fund to the Controller, to the Superintendent, to the
Chancellor of the California Community Colleges, or to any other fund
or state agency for the purpose of allocation to school districts
and community college districts. The full amount of any appropriation
shall be included in the calculation of the percentage required by
paragraph (2) or (3) of subdivision (b) of Section 8 of Article XVI,
without regard to any unexpended balance of any appropriation. Any
reappropriation of funds appropriated in any prior year shall not be
included in the sum of appropriations.
   (f) "General Fund revenues appropriated for school districts and
community college districts, respectively" and "moneys to be applied
by the state for the support of school districts and community
college districts," as used in Section 8 of Article XVI of the
California Constitution, shall include funds appropriated for
part-day California state preschool programs under Article 7
(commencing with Section 8235) of Chapter 2 of Part 6 of Division 1
of Title 1, and the After School Education and Safety Program
established pursuant to Article 22.5 (commencing with Section 8482)
of Chapter 2 of Part 6 of Division 1 of Title 1, and shall not
include any of the following:
   (1) Any appropriation that is not made for allocation to a school
district, as defined in Section 41302.5, or to a community college
district, regardless of whether the appropriation is made for any
purpose that may be considered to be for the benefit to a school
district, as defined in Section 41302.5, or a community college
district. This paragraph shall not be construed to exclude any
funding appropriated for part-day California state preschool programs
under Article 7 (commencing with Section 8235) of Chapter 2 of Part
6 of Division 1 of Title 1 or the After School Education and Safety
Program established pursuant to Article 22.5 (commencing with Section
8482) of Chapter 2 of Part 6 of Division 1 of Title 1.
   (2) Any appropriation made to the Teachers' Retirement Fund or to
the Public Employees' Retirement Fund except those appropriations for
reimbursable state mandates imposed on or before January 1, 1988.
   (3) Any appropriation made to service any public debt approved by
the voters of this state.
   (4) With the exception of the programs identified in paragraph
(1), commencing with the 2011-12 fiscal year, any funds appropriated
for the Child Care and Development Services Act, pursuant to Chapter
2 (commencing with Section 8200) of Part 6 of Division 1 of Title 1.
   (g) "Allocated local proceeds of taxes," as used in paragraph (2)
or (3) of subdivision (b) of Section 8 of Article XVI of the
California Constitution, means, for school districts as defined,
those local revenues, except revenues identified pursuant to
paragraph (5) of subdivision (h) of Section 42238, that are used to
offset state aid for school districts in calculations performed
pursuant to Sections 2558, 42238, and Chapter 7.2 (commencing with
Section 56836) of Part 30.
   (h) "Allocated local proceeds of taxes," as used in paragraph (2)
or (3) of subdivision (b) of Section 8 of Article XVI of the
California Constitution, means, for community college districts,
those local revenues that are used to offset state aid for community
college districts in calculations performed pursuant to Section
84700. In no event shall the revenues or receipts derived from
student fees be considered "allocated local proceeds of taxes."
   (i) For purposes of calculating the 4-percent entitlement pursuant
to subdivision (a) of Section 8.5 of Article XVI of the California
Constitution, "the total amount required pursuant to Section 8(b)"
shall mean the General Fund aid required for schools pursuant to
subdivision (b) of Section 8 of Article XVI of the California
Constitution, and shall not include allocated local proceeds of
taxes.
   (j) This section shall become inoperative on December 15, 2012,
and, as of January 1, 2013, is repealed, only if the Schools and
Local Public Safety Protection Act of 2012 (Attorney General
reference number 12-0009) is not approved by the voters at the
November 6, 2012, statewide general election, or if the provisions of
that act that modify personal income tax rates do not become
operative due to a conflict with another initiative measure that is
approved at the same election and receives a greater number of
affirmative votes.
   (k) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 22.  Section 41202 is added to the Education Code, to read:
   41202.  The words and phrases set forth in subdivision (b) of
Section 8 of Article XVI of the Constitution of the State of
California shall have the following meanings:
   (a) "Moneys to be applied by the State," as used in subdivision
(b) of Section 8 of Article XVI of the California Constitution, means
appropriations from the General Fund that are made for allocation to
school districts, as defined, or community college districts. An
appropriation that is withheld, impounded, or made without provisions
for its allocation to school districts or community college
districts, shall not be considered to be "moneys to be applied by the
State."
   (b) "General Fund revenues which may be appropriated pursuant to
Article XIII B," as used in paragraph (1) of subdivision (b) of
Section 8 of Article XVI, means General Fund revenues that are the
proceeds of taxes as defined by subdivision (c) of Section 8 of
Article XIII B of the California Constitution, including, for the
1986-87 fiscal year only, any revenues that are determined to be in
excess of the appropriations limit established pursuant to Article
XIII B for the fiscal year in which they are received. General Fund
revenues for a fiscal year to which paragraph (1) of subdivision (b)
is being applied shall include, in that computation, only General
Fund revenues for that fiscal year that are the proceeds of taxes, as
defined in subdivision (c) of Section 8 of Article XIII B of the
California Constitution, and shall not include prior fiscal year
revenues. Commencing with the 1995-96 fiscal year, and each fiscal
year thereafter, "General Fund revenues that are the proceeds of
taxes," as defined in subdivision (c) of Section 8 of Article XIII B
of the California Constitution, includes any portion of the proceeds
of taxes received from the state sales tax that are transferred to
the counties pursuant to, and only if, legislation is enacted during
the 1995-96 fiscal year the purpose of which is to realign children's
programs. The amount of the proceeds of taxes shall be computed for
any fiscal year in a manner consistent with the manner in which the
amount of the proceeds of taxes was computed by the Department of
Finance for purposes of the Governor's Budget for the Budget Act of
1986.
   (c) "General Fund revenues appropriated for school districts," as
used in paragraph (1) of subdivision (b) of Section 8 of Article XVI
of the California Constitution, means the sum of appropriations made
that are for allocation to school districts, as defined in Section
41302.5, regardless of whether those appropriations were made from
the General Fund to the Superintendent, to the Controller, or to any
other fund or state agency for the purpose of allocation to school
districts. The full amount of any appropriation shall be included in
the calculation of the percentage required by paragraph (1) of
subdivision (b) of Article XVI, without regard to any unexpended
balance of any appropriation. Any reappropriation of funds
appropriated in any prior year shall not be included in the sum of
appropriations.
   (d) "General Fund revenues appropriated for community college
districts," as used in paragraph (1) of subdivision (b) of Section 8
of Article XVI of the California Constitution, means the sum of
appropriations made that are for allocation to community college
districts, regardless of whether those appropriations were made from
the General Fund to the Controller, to the Chancellor of the
California Community Colleges, or to any other fund or state agency
for the purpose of allocation to community college districts. The
full amount of any appropriation shall be included in the calculation
of the percentage required by paragraph (1) of subdivision (b) of
Article XVI, without regard to any unexpended balance of any
appropriation. Any reappropriation of funds appropriated in any prior
year shall not be included in the sum of appropriations.
   (e) "Total allocations to school districts and community college
districts from General Fund proceeds of taxes appropriated pursuant
to Article XIII B," as used in paragraph (2) or (3) of subdivision
(b) of Section 8 of Article XVI of the California Constitution, means
the sum of appropriations made that are for allocation to school
districts, as defined in Section 41302.5, and community college
districts, regardless of whether those appropriations were made from
the General Fund to the Controller, to the Superintendent, to the
Chancellor of the California Community Colleges, or to any other fund
or state agency for the purpose of allocation to school districts
and community college districts. The full amount of any appropriation
shall be included in the calculation of the percentage required by
paragraph (2) or (3) of subdivision (b) of Section 8 of Article XVI,
without regard to any unexpended balance of any appropriation. Any
reappropriation of funds appropriated in any prior year shall not be
included in the sum of appropriations.
   (f) "General Fund revenues appropriated for school districts and
community college districts, respectively" and "moneys to be applied
by the state for the support of school districts and community
college districts," as used in Section 8 of Article XVI of the
California Constitution, shall include funds appropriated for
part-day California state preschool programs under Article 7
(commencing with Section 8235) of Chapter 2 of Part 6 of Division 1
of Title 1, and the After School Education and Safety Program
established pursuant to Article 22.5 (commencing with Section 8482)
of Chapter 2 of Part 6 of Division 1 of Title 1, and shall not
include any of the following:
   (1) Any appropriation that is not made for allocation to a school
district, as defined in Section 41302.5, or to a community college
district, regardless of whether the appropriation is made for any
purpose that may be considered to be for the benefit to a school
district, as defined in Section 41302.5, or a community college
district. This paragraph shall not be construed to exclude any
funding appropriated for part-day California state preschool programs
under Article 7 (commencing with Section 8235) of Chapter 2 of Part
6 of Division 1 of Title 1 or the After School Education and Safety
Program established pursuant to Article 22.5 (commencing with Section
8482) of Chapter 2 of Part 6 of Division 1 of Title 1.
   (2) Any appropriation made to the Teachers' Retirement Fund or to
the Public Employees' Retirement Fund except those appropriations for
reimbursable state mandates imposed on or before January 1, 1988.
   (3) Any appropriation made to service any public debt approved by
the voters of this state.
   (4) With the exception of the programs identified in paragraph
(1), commencing with the 2011-12 fiscal year, any funds appropriated
for the Child Care and Development Services Act, pursuant to Chapter
2 (commencing with Section 8200) of Part 6 of Division 1 of Title 1.
   (g) "Allocated local proceeds of taxes," as used in paragraph (2)
or (3) of subdivision (b) of Section 8 of Article XVI of the
California Constitution, means, for school districts as defined,
those local revenues, except revenues identified pursuant to
paragraph (5) of subdivision (i) of Section 42238.02, that are used
to offset state aid for school districts in calculations performed
pursuant to Sections 2575, 42238.02, and Chapter 7.2 (commencing with
Section 56836) of Part 30 of Division 4.
   (h) "Allocated local proceeds of taxes," as used in paragraph (2)
or (3) of subdivision (b) of Section 8 of Article XVI of the
California Constitution, means, for community college districts,
those local revenues that are used to offset state aid for community
college districts. In no event shall the revenues or receipts derived
from student fees be considered "allocated local proceeds of taxes."

   (i) For purposes of calculating the 4-percent entitlement pursuant
to subdivision (a) of Section 8.5 of Article XVI of the California
Constitution, "the total amount required pursuant to Section 8(b)"
shall mean the General Fund aid required for schools pursuant to
subdivision (b) of Section 8 of Article XVI of the California
Constitution, and shall not include allocated local proceeds of
taxes.
   (j) This section shall become operative on July 1, 2014.
  SEC. 23.  Section 42127 of the Education Code is amended to read:
   42127.  (a) On or before July 1 of each year, the governing board
of each school district shall accomplish the following:
   (1) Hold a public hearing on the budget to be adopted for the
subsequent fiscal year. The budget to be adopted shall be prepared in
accordance with Section 42126. The agenda for that hearing shall be
posted at least 72 hours before the public hearing and shall include
the location where the budget will be available for public
inspection.
   (A) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each school district budget shall project the same level of
revenue per unit of average daily attendance as it received in the
2010-11 fiscal year and shall maintain staffing and program levels
commensurate with that level.
   (B) For the 2011-12 fiscal year, the school district shall not be
required to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (2) Adopt a budget. Not later than five days after that adoption
or by July 1, whichever occurs first, the governing board of the
school district shall file that budget with the county superintendent
of schools. That budget and supporting data shall be maintained and
made available for public review. If the governing board of the
school district does not want all or a portion of the property tax
requirement levied for the purpose of making payments for the
interest and redemption charges on indebtedness as described in
paragraph (1) or (2) of subdivision (b) of Section 1 of Article XIII
A of the California Constitution, the budget shall include a
statement of the amount or portion for which a levy shall not be
made.
   (b) The county superintendent of schools may accept changes in any
statement included in the budget, pursuant to subdivision (a), of
the amount or portion for which a property tax levy shall not be
made. The county superintendent of schools or the county auditor
shall compute the actual amounts to be levied on the property tax
rolls of the school district for purposes that exceed apportionments
to the school district pursuant to Chapter 6 (commencing with Section
95) of Part 0.5 of Division 1 of the Revenue and Taxation Code. Each
school district shall provide all data needed by the county
superintendent of schools or the county auditor to compute the
amounts. On or before August 15, the county superintendent of schools
shall transmit the amounts computed to the county auditor who shall
compute the tax rates necessary to produce the amounts. On or before
September 1, the county auditor shall submit the rate computed to the
board of supervisors for adoption.
                                                  (c) The county
superintendent of schools shall do all of the following:
   (1) Examine the adopted budget to determine whether it complies
with the standards and criteria adopted by the state board pursuant
to Section 33127 for application to final local educational agency
budgets. The county superintendent of schools shall identify, if
necessary, technical corrections that are required to be made to
bring the budget into compliance with those standards and criteria.
   (2) Determine whether the adopted budget will allow the school
district to meet its financial obligations during the fiscal year and
is consistent with a financial plan that will enable the school
district to satisfy its multiyear financial commitments. In addition
to his or her own analysis of the budget of each school district, the
county superintendent of schools shall review and consider studies,
reports, evaluations, or audits of the school district that were
commissioned by the school district, the county superintendent of
schools, the Superintendent, and state control agencies and that
contain evidence that the school district is showing fiscal distress
under the standards and criteria adopted in Section 33127 or that
contain a finding by an external reviewer that more than 3 of the 15
most common predictors of a school district needing intervention, as
determined by the County Office Fiscal Crisis and Management
Assistance Team, are present. The county superintendent of schools
shall either conditionally approve or disapprove a budget that does
not provide adequate assurance that the school district will meet its
current and future obligations and resolve any problems identified
in studies, reports, evaluations, or audits described in this
paragraph.
   (d) On or before August 15, the county superintendent of schools
shall approve, conditionally approve, or disapprove the adopted
budget for each school district. If a school district does not submit
a budget to the county superintendent of schools, the county
superintendent of schools shall develop, at school district expense,
a budget for that school district by September 15 and transmit that
budget to the governing board of the school district. The budget
prepared by the county superintendent of schools shall be deemed
adopted, unless the county superintendent of schools approves any
modifications made by the governing board of the school district. The
approved budget shall be used as a guide for the school district's
priorities. The Superintendent shall review and certify the budget
approved by the county. If, pursuant to the review conducted pursuant
to subdivision (c), the county superintendent of schools determines
that the adopted budget for a school district does not satisfy
paragraph (1) or (2) of that subdivision, he or she shall
conditionally approve or disapprove the budget and, not later than
August 15, 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, including, but not
limited to, the amounts of any budget adjustments needed before he or
she can approve that budget. The county superintendent of schools
may assign a fiscal adviser to assist the school district to develop
a budget in compliance with those revisions. In addition, the county
superintendent of schools may appoint a committee to examine and
comment on the superintendent's review and recommendations, subject
to the requirement that the committee report its findings to the
county superintendent of schools no later than August 20. For the
2011-12 fiscal year, notwithstanding any of the standards and
criteria adopted by the state board pursuant to Section 33127, the
county superintendent of schools, as a condition on approval of a
school district budget, shall not require a school district to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the school
district to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (e) On or before September 8, the governing board of the school
district shall revise the adopted budget to reflect changes in
projected income or expenditures subsequent to July 1, and to include
any response to the recommendations of the county superintendent of
schools, shall adopt the revised budget, and shall file the revised
budget with the county superintendent of schools. Before revising the
budget, the governing board of the school district shall hold a
public hearing regarding the proposed revisions, to be conducted in
accordance with Section 42103. In addition, if the adopted budget is
disapproved pursuant to subdivision (d), the governing board of the
school district and the county superintendent of schools shall review
the disapproval and the recommendations of the county superintendent
of schools regarding revision of the budget at the public hearing.
The revised budget and supporting data shall be maintained and made
available for public review.
   (1) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each school district budget shall project the same level of
revenue per unit of average daily attendance as it received in the
2010-11 fiscal year and shall maintain staffing and program levels
commensurate with that level.
   (2) For the 2011-12 fiscal year, the school district shall not be
required to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (f) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which budgets may be disapproved.
   (g) The county superintendent of schools shall examine the revised
budget to determine whether it (1) complies with the standards and
criteria adopted by the state board pursuant to Section 33127 for
application to final local educational agency budgets, (2) allows the
school district to meet its financial obligations during the fiscal
year, (3) satisfies all conditions established by the county
superintendent of schools in the case of a conditionally approved
budget, and (4) is consistent with a financial plan that will enable
the school district to satisfy its multiyear financial commitments,
and, not later than October 8, shall approve or disapprove the
revised budget. If the county superintendent of schools disapproves
the budget, he or she shall call for the formation of a budget review
committee pursuant to Section 42127.1, unless the governing board of
the school district and the county superintendent of schools agree
to waive the requirement that a budget review committee be formed and
the department approves the waiver after determining that a budget
review committee is not necessary. Upon the grant of a waiver, the
county superintendent of schools immediately has the authority and
responsibility provided in Section 42127.3. Upon approving a waiver
of the budget review committee, the department shall ensure that a
balanced budget is adopted for the school district by November 30. If
no budget is adopted by November 30, the Superintendent may adopt a
budget for the school district. The Superintendent shall report to
the Legislature and the Director of Finance by December 10 if any
school district, including a school district that has received a
waiver of the budget review committee process, does not have an
adopted budget by November 30. This report shall include the reasons
why a budget has not been adopted by the deadline, the steps being
taken to finalize budget adoption, the date the adopted budget is
anticipated, and whether the Superintendent has or will exercise his
or her authority to adopt a budget for the school district. For the
2011-12 fiscal year, notwithstanding any of the standards and
criteria adopted by the state board pursuant to Section 33127, the
county superintendent of schools, as a condition on approval of a
school district budget, shall not require a school district to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the school
district to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (h) Not later than October 8, the county superintendent of schools
shall submit a report to the Superintendent identifying all school
districts for which budgets have been disapproved or budget review
committees waived. The report shall include a copy of the written
response transmitted to each of those school districts pursuant to
subdivision (d).
   (i) Notwithstanding any other provision of this section, the
budget review for a school district shall be governed by paragraphs
(1), (2), and (3), rather than by subdivisions (e) and (g), if the
governing board of the school district so elects and notifies the
county superintendent of schools in writing of that decision, not
later than October 31 of the immediately preceding calendar year. On
or before July 1, the governing board of a school district for which
the budget review is governed by this subdivision, rather than by
subdivisions (e) and (g), shall conduct a public hearing regarding
its proposed budget in accordance with Section 42103.
   (1) If the adopted budget of a school district is disapproved
pursuant to subdivision (d), on or before September 8, the governing
board of the school district, in conjunction with the county
superintendent of schools, shall review the superintendent's
recommendations at a regular meeting of the governing board of the
school district and respond to those recommendations. The response
shall include any revisions to the adopted budget and other proposed
actions to be taken, if any, as a result of those recommendations.
   (2) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which a budget may be tentatively disapproved.
   (3) Not later than October 8, after receiving the response
required under paragraph (1), the county superintendent of schools
shall review that response and either approve or disapprove the
budget. If the county superintendent of schools disapproves the
budget, he or she shall call for the formation of a budget review
committee pursuant to Section 42127.1, unless the governing board of
the school district and the county superintendent of schools agree to
waive the requirement that a budget review committee be formed and
the department approves the waiver after determining that a budget
review committee is not necessary. Upon the grant of a waiver, the
county superintendent has the authority and responsibility provided
to a budget review committee in Section 42127.3. Upon approving a
waiver of the budget review committee, the department shall ensure
that a balanced budget is adopted for the school district by November
30. The Superintendent shall report to the Legislature and the
Director of Finance by December 10 if any school district, including
a school district that has received a waiver of the budget review
committee process, does not have an adopted budget by November 30.
This report shall include the reasons why a budget has not been
adopted by the deadline, the steps being taken to finalize budget
adoption, and the date the adopted budget is anticipated. For the
2011-12 fiscal year, notwithstanding any of the standards and
criteria adopted by the state board pursuant to Section 33127, the
county superintendent of schools, as a condition on approval of a
school district budget, shall not require a school district to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the school
district to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (4) Not later than 45 days after the Governor signs the annual
Budget Act, the school district shall make available for public
review any revisions in revenues and expenditures that it has made to
its budget to reflect the funding made available by that Budget Act.

   (j) Any school district for which the county board of education
serves as the governing board of the school district is not subject
to subdivisions (c) to (h), inclusive, but is governed instead by the
budget procedures set forth in Section 1622.
   (k) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 24.  Section 42127 is added to the Education Code, to read:
   42127.  (a) On or before July 1 of each year, the governing board
of each school district shall accomplish the following:
   (1) Hold a public hearing on the budget to be adopted for the
subsequent fiscal year. The budget to be adopted shall be prepared in
accordance with Section 42126. The agenda for that hearing shall be
posted at least 72 hours before the public hearing and shall include
the location where the budget will be available for public
inspection.
   (A) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each school district budget shall project the same level of
revenue per unit of average daily attendance as it received in the
2010-11 fiscal year and shall maintain staffing and program levels
commensurate with that level.
   (B) For the 2011-12 fiscal year, the school district shall not be
required to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (2) Adopt a budget and take action on a local control and
accountability plan pursuant to Sections 52060 and 52064. Not later
than five days after that adoption or by July 1, whichever occurs
first, the governing board of the school district shall file that
budget with the county superintendent of schools. The budget, the
local control and accountability plan, and supporting data shall be
maintained and made available for public review. If the governing
board of the school district does not want all or a portion of the
property tax requirement levied for the purpose of making payments
for the interest and redemption charges on indebtedness as described
in paragraph (1) or (2) of subdivision (b) of Section 1 of Article
XIII A of the California Constitution, the budget shall include a
statement of the amount or portion for which a levy shall not be
made. For the 2015-16 fiscal year and each fiscal year thereafter,
the governing board of the school district shall not adopt a budget
before the governing board of the school district adopts a local
control and accountability plan or approves an update to an existing
local control and accountability plan pursuant to Sections 52060 and
52064. The governing board of a school district shall not adopt a
budget that does not align with the local control and accountability
plan that applies to the subsequent fiscal year.
   (b) The county superintendent of schools may accept changes in any
statement included in the budget, pursuant to subdivision (a), of
the amount or portion for which a property tax levy shall not be
made. The county superintendent of schools or the county auditor
shall compute the actual amounts to be levied on the property tax
rolls of the school district for purposes that exceed apportionments
to the school district pursuant to Chapter 6 (commencing with Section
95) of Part 0.5 of Division 1 of the Revenue and Taxation Code. Each
school district shall provide all data needed by the county
superintendent of schools or the county auditor to compute the
amounts. On or before August 15, the county superintendent of schools
shall transmit the amounts computed to the county auditor who shall
compute the tax rates necessary to produce the amounts. On or before
September 1, the county auditor shall submit the rate computed to the
board of supervisors for adoption.
   (c) The county superintendent of schools shall do all of the
following:
   (1) Examine the adopted budget to determine whether it complies
with the standards and criteria adopted by the state board pursuant
to Section 33127 for application to final local educational agency
budgets. The county superintendent of schools shall identify, if
necessary, technical corrections that are required to be made to
bring the budget into compliance with those standards and criteria.
   (2) Determine whether the adopted budget will allow the school
district to meet its financial obligations during the fiscal year and
is consistent with a financial plan that will enable the school
district to satisfy its multiyear financial commitments. In addition
to his or her own analysis of the budget of each school district, the
county superintendent of schools shall review and consider studies,
reports, evaluations, or audits of the school district that were
commissioned by the school district, the county superintendent of
schools, the Superintendent, and state control agencies and that
contain evidence that the school district is showing fiscal distress
under the standards and criteria adopted in Section 33127 or that
contain a finding by an external reviewer that more than 3 of the 15
most common predictors of a school district needing intervention, as
determined by the County Office Fiscal Crisis and Management
Assistance Team, are present. The county superintendent of schools
shall either conditionally approve or disapprove a budget that does
not provide adequate assurance that the school district will meet its
current and future obligations and resolve any problems identified
in studies, reports, evaluations, or audits described in this
paragraph.
   (3) Determine whether the adopted budget will allow the school
district to implement the specific actions and strategies included in
the local control and accountability plan adopted by the governing
board of the school district pursuant to  Section 
 Sections  52060 and 52064.
   (d) On or before August 15, the county superintendent of schools
shall approve, conditionally approve, or disapprove the adopted
budget for each school district. For the 2015-16 fiscal year and each
fiscal year thereafter, the county superintendent of schools shall
disapprove a budget if a school district does not file a local
control and accountability plan with the county superintendent of
schools, if the Superintendent determines that a local control and
accountability plan filed does not adhere to the template adopted by
the state board pursuant to Section 52066 or does not include all of
the components identified in subdivision (a) of Section 52064, or if
the county superintendent of schools determines that the expenditures
included in the budget do not reflect the costs necessary to
implement the local control and accountability plan. If a school
district does not submit a budget to the county superintendent of
schools, the county superintendent of schools shall develop, at
school district expense, a budget for that school district by
September 15 and transmit that budget to the governing board of the
school district. The budget prepared by the county superintendent of
schools shall be deemed adopted, unless the county superintendent of
schools approves any modifications made by the governing board of the
school district. The approved budget shall be used as a guide for
the school district's priorities. The Superintendent shall review and
certify the budget approved by the county. If, pursuant to the
review conducted pursuant to subdivision (c), the county
superintendent of schools determines that the adopted budget for a
school district does not satisfy paragraph (1) or (2) of that
subdivision, he or she shall conditionally approve or disapprove the
budget and, not later than August 15, 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, including, but not limited to, the amounts of any
budget adjustments needed before he or she can approve that budget.
The county superintendent of schools may assign a fiscal adviser to
assist the school district to develop a budget in compliance with
those revisions. In addition, the county superintendent of schools
may appoint a committee to examine and comment on the superintendent'
s review and recommendations, subject to the requirement that the
committee report its findings to the county superintendent of schools
no later than August 20. For the 2011-12 fiscal year,
notwithstanding any of the standards and criteria adopted by the
state board pursuant to Section 33127, the county superintendent of
schools, as a condition on approval of a school district budget,
shall not require a school district to project a lower level of
revenue per unit of average daily attendance than it received in the
2010-11 fiscal year nor require the school district to demonstrate
that it is able to meet its financial obligations for the two
subsequent fiscal years.
   (e) On or before September 8, the governing board of the school
district shall revise the adopted budget to reflect changes in
projected income or expenditures subsequent to July 1, and to include
any response to the recommendations of the county superintendent of
schools, shall adopt the revised budget, and shall file the revised
budget with the county superintendent of schools. Before revising the
budget, the governing board of the school district shall hold a
public hearing regarding the proposed revisions, to be conducted in
accordance with Section 42103. In addition, if the adopted budget is
disapproved pursuant to subdivision (d), the governing board of the
school district and the county superintendent of schools shall review
the disapproval and the recommendations of the county superintendent
of schools regarding revision of the budget at the public hearing.
The revised budget and supporting data shall be maintained and made
available for public review.
   (1) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each school district budget shall project the same level of
revenue per unit of average daily attendance as it received in the
2010-11 fiscal year and shall maintain staffing and program levels
commensurate with that level.
   (2) For the 2011-12 fiscal year, the school district shall not be
required to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (f) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which budgets may be disapproved.
   (g) The county superintendent of schools shall examine the revised
budget to determine whether it (1) complies with the standards and
criteria adopted by the state board pursuant to Section 33127 for
application to final local educational agency budgets, (2) allows the
school district to meet its financial obligations during the fiscal
year, (3) satisfies all conditions established by the county
superintendent of schools in the case of a conditionally approved
budget, and (4) is consistent with a financial plan that will enable
the school district to satisfy its multiyear financial commitments,
and, not later than October 8, shall approve or disapprove the
revised budget. If the county superintendent of schools disapproves
the budget, he or she shall call for the formation of a budget review
committee pursuant to Section 42127.1, unless the governing board of
the school district and the county superintendent of schools agree
to waive the requirement that a budget review committee be formed and
the department approves the waiver after determining that a budget
review committee is not necessary. Upon the grant of a waiver, the
county superintendent of schools immediately has the authority and
responsibility provided in Section 42127.3. Upon approving a waiver
of the budget review committee, the department shall ensure that a
balanced budget is adopted for the school district by November 30. If
no budget is adopted by November 30, the Superintendent may adopt a
budget for the school district. The Superintendent shall report to
the Legislature and the Director of Finance by December 10 if any
school district, including a school district that has received a
waiver of the budget review committee process, does not have an
adopted budget by November 30. This report shall include the reasons
why a budget has not been adopted by the deadline, the steps being
taken to finalize budget adoption, the date the adopted budget is
anticipated, and whether the Superintendent has or will exercise his
or her authority to adopt a budget for the school district. For the
2011-12 fiscal year, notwithstanding any of the standards and
criteria adopted by the state board pursuant to Section 33127, the
county superintendent of schools, as a condition on approval of a
school district budget, shall not require a school district to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the school
district to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (h) Not later than October 8, the county superintendent of schools
shall submit a report to the Superintendent identifying all school
districts for which budgets have been disapproved or budget review
committees waived. The report shall include a copy of the written
response transmitted to each of those school districts pursuant to
subdivision (d).
   (i) Notwithstanding any other provision of this section, the
budget review for a school district shall be governed by paragraphs
(1), (2), and (3), rather than by subdivisions (e) and (g), if the
governing board of the school district so elects and notifies the
county superintendent of schools in writing of that decision, not
later than October 31 of the immediately preceding calendar year. On
or before July 1, the governing board of a school district for which
the budget review is governed by this subdivision, rather than by
subdivisions (e) and (g), shall conduct a public hearing regarding
its proposed budget in accordance with Section 42103.
   (1) If the adopted budget of a school district is disapproved
pursuant to subdivision (d), on or before September 8, the governing
board of the school district, in conjunction with the county
superintendent of schools, shall review the superintendent's
                                          recommendations at a
regular meeting of the governing board of the school district and
respond to those recommendations. The response shall include any
revisions to the adopted budget and other proposed actions to be
taken, if any, as a result of those recommendations.
   (2) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which a budget may be tentatively disapproved.
   (3) Not later than October 8, after receiving the response
required under paragraph (1), the county superintendent of schools
shall review that response and either approve or disapprove the
budget. If the county superintendent of schools disapproves the
budget, he or she shall call for the formation of a budget review
committee pursuant to Section 42127.1, unless the governing board of
the school district and the county superintendent of schools agree to
waive the requirement that a budget review committee be formed and
the department approves the waiver after determining that a budget
review committee is not necessary. Upon the grant of a waiver, the
county superintendent has the authority and responsibility provided
to a budget review committee in Section 42127.3. Upon approving a
waiver of the budget review committee, the department shall ensure
that a balanced budget is adopted for the school district by November
30. The Superintendent shall report to the Legislature and the
Director of Finance by December 10 if any school district, including
a school district that has received a waiver of the budget review
committee process, does not have an adopted budget by November 30.
This report shall include the reasons why a budget has not been
adopted by the deadline, the steps being taken to finalize budget
adoption, and the date the adopted budget is anticipated. For the
2011-12 fiscal year, notwithstanding any of the standards and
criteria adopted by the state board pursuant to Section 33127, the
county superintendent of schools, as a condition on approval of a
school district budget, shall not require a school district to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the school
district to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
   (4) Not later than 45 days after the Governor signs the annual
Budget Act, the school district shall make available for public
review any revisions in revenues and expenditures that it has made to
its budget to reflect the funding made available by that Budget Act.

   (j) Any school district for which the county board of education
serves as the governing board of the school district is not subject
to subdivisions (c) to (h), inclusive, but is governed instead by the
budget procedures set forth in Section 1622.
   (k) This section shall become operative on July 1, 2014.
  SEC. 25.  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 per unit of average
daily attendance received 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.
   (8) For the 2011-12 fiscal year, the equalization adjustment
specified in Section 42238.49.
   (c) (1) (A) For the 2010-11 fiscal year, the Superintendent shall
compute an add-on for each school district by adding the inflation
adjustment specified in Section 42238.1 to the adjustment specified
in Section 42238.485.
   (B) For the 2011-12 fiscal year and each fiscal year thereafter,
the Superintendent shall compute an add-on for each school district
by adding the inflation adjustment specified in Section 42238.1 to
the amount computed pursuant to this paragraph for the prior fiscal
year.
   (2) Commencing with the 2010-11 fiscal year, the Superintendent
shall compute an add-on for each school district by dividing each
school district's fiscal year average daily attendance computed
pursuant to Section 42238.5 by the total adjustments in funding for
each district made for the 2007-08 fiscal year pursuant to Section
42238.22 as it read on January 1, 2009.
   (d) The sum of the base revenue limit computed pursuant to
subdivision (b) and the add-on computed pursuant to subdivision (c)
shall be multiplied by the district average daily attendance computed
pursuant to Section 42238.5.
   (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 before 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 a 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 3.5 (commencing with Section 75) and Chapter 6 (commencing
with Section 95) of Part 0.5 of Division 1 of the Revenue and
Taxation Code.
   (2) The amount, if any, received pursuant to Part 18.5 (commencing
with Section 38101) of Division 2 of the Revenue and Taxation Code.
   (3) The amount, if any, received pursuant to Chapter 3 (commencing
with Section 16140) of Part 1 of Division 4 of Title 2 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) (A) 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 of, paragraph (4) of
subdivision (a) of Section 33607.5 of, or Section 33607.7 of, the
Health and Safety Code that is allocated exclusively for educational
facilities.
   (B) The amount, if any, received pursuant to Sections 34177,
34179.5, 34179.6, and 34188 of the Health and Safety Code.
   (C) The amount, if any, received pursuant to subparagraph (B) of
paragraph (3) of subdivision (e) of Section 36 of Article XIII of the
California Constitution.
   (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 of Division 4 for which
the school 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 school district.
   (i) A transfer of pupils of grades 7 and 8 between an elementary
school district and a high school district shall not result in the
receiving school 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.

   (j) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 26.  Section 42238.01 is added to the Education Code, to read:

   42238.01.  It is the intent of the Legislature to do all of the
following:
   (a) Phase in implementation of the local control funding formula,
as specified in  AB   Assembly Bill  88 of
the 2013-14 Regular Session, as amended April 3, 2013, in a manner
and on a timeline that allows the state to restore local educational
agency funding levels to those that existed before state budget cuts
that were imposed starting in the 2008-09 fiscal year.
   (b) Redirect the dollar amounts that have been proposed for
concentration grants to instead increase both base grants and
supplemental grants, in proportions to be determined.
   (c) Require that the adjustment for grades 9 to 12, inclusive, as
described in paragraph (4) of subdivision (d) of Section 42238.02 be
spent on programs that prepare pupils for college and career. It is
further the intent of the Legislature to consider other incentives
for schools to continue successful career preparation programs,
including the possible maintenance of existing categorical and
competitive grant programs.
   (d) Require that funds allocated based on the current
home-to-school transportation formula be spent on home-to-school
transportation. It is further the intent of the Legislature, as
increased funding allows, to adjust those allocations across school
districts until all school districts are funded equitably, at a
percentage of allowable costs to be determined.
   (e) Consider remedies for other funding allocations that are
distributed according to inequitable, historically based formulas.
   (f) Provide some level of supplemental support for English learner
pupils beyond the five-year limit proposed in paragraph (2) of
subdivision (b) of Section 42238.02. It is further the intent of the
Legislature to ensure greater transparency in the provision of
instruction and services for English learner pupils, such that strong
local- and state-level oversight and accountability are supported.
   (g) This section shall become operative on July 1, 2014.
  SEC. 27.  Section 42238.02 is added to the Education Code, to read:

   42238.02.  (a) The amount computed pursuant to this section shall
be known as the school district and charter school local control
funding formula.
   (b) (1) For purposes of this section  ,  "unduplicated
pupil" means a pupil enrolled in a school district or a charter
school who is either classified as an English learner pursuant to
Section 52164, as that section read on January 1, 2014, eligible to
receive a free or reduced-price meal pursuant to Section 49552, as
that section read on January 1, 2014, or is a foster youth pursuant
to Sections 300 and 601 of the Welfare and Institutions Code. A pupil
shall be counted only once for purposes of this section if any of
the following apply:
   (A) The pupil is classified as an English learner and is eligible
for a free or reduced-price meal.
   (B) The pupil is classified as an English learner and is a foster
youth.
   (C) The pupil is classified as a foster youth and is eligible for
a free or reduced-price meal.
   (D) The pupil is classified as an English learner, is eligible for
a free or reduced-price meal, and is a foster youth.
   (2) Commencing with the 2014-15 fiscal year, a school district or
charter school shall annually report its enrolled unduplicated pupil,
free and reduced-price meal eligibility, foster youth, and English
learner pupil counts to the Superintendent.
   (3) Commencing with the 2014-15 fiscal year, a county office of
education shall review and validate reported English learner, foster
youth, and free or reduced-price meal eligible pupil data for school
districts and charter schools under their jurisdiction to ensure the
data is reported accurately.
   (4) The counts of unduplicated pupils shall be derived by the
Superintendent using the California Longitudinal Pupil Achievement
Data System.
   (5) The Superintendent shall calculate the percentage of
unduplicated pupils for each school district and charter school by
dividing the enrollment of unduplicated pupils in a school district
or charter school by the total enrollment in that school district or
charter school.
   (c) Commencing with the 2014-15 fiscal year and each fiscal year
thereafter, the Superintendent shall annually calculate a local
control funding formula grant for each school district and charter
school in the state pursuant to this section.
   (d) The Superintendent shall compute a grade span adjusted base
grant equal to the total of the following amounts:
   (1) For the 2014-15 fiscal year, a base grant of:
   (A)  ____   Eight thousand three hundred
sixty-eight  dollars  ($____)   ($8,368)
 for average daily attendance in grades 9 to 12, inclusive.
   (B)  ____   Seven thousand two hundred
twenty-one  dollars  ($____)   ($7,221)
 for average daily attendance in grades 7 and 8.
   (C)  ____   Seven thousand thirteen 
dollars  ($____)   ($7,013)  for average
daily attendance in grades 4 to 6, inclusive.
   (D)  ____   Six thousand nine hundred 
dollars  ($____)   ($6,910)  for average
daily attendance in kindergarten and grades 1 to 3, inclusive.
   (2) In each year the grade span adjusted base grants in paragraph
(1) shall be adjusted by the percentage change in the annual average
value of the Implicit Price Deflator for State and Local Government
Purchases of Goods and Services for the United States, as published
by the United States Department of Commerce for the 12-month period
ending in the third quarter of the prior fiscal year. This percentage
change shall be determined using the latest data available as of May
10 of the preceding fiscal year compared with the annual average
value of the same deflator for the 12-month period ending in the
third quarter of the second preceding fiscal year, using the latest
data available as of May 10 of the preceding fiscal year, as reported
by the Department of Finance.
   (3) (A) The Superintendent shall compute an additional adjustment
to the kindergarten and grades 1 to 3, inclusive, base grant as
adjusted for inflation pursuant to paragraph (2) equal to 11.23
percent. The additional grant shall be calculated by multiplying the
kindergarten and grades 1 to 3, inclusive, base grant as adjusted by
paragraph (2) by 11.23 percent.
   (B) Until paragraph (4) of subdivision (b) of Section 42238.03 is
effective, as a condition of the receipt of funds in this paragraph,
a school district shall make progress toward maintaining an annual
average class size of not more than 24 pupils for each classroom per
schoolsite in kindergarten and grades 1 to 3, inclusive, unless a
collectively bargained alternative annual average class size for each
classroom per schoolsite in those grades is agreed to by the school
district, pursuant to the following calculation:
   (i) Determine a school district's annual average class size for
each classroom per schoolsite for kindergarten and grades 1 to 3,
inclusive, in the prior year. For the 2014-15 fiscal year, this
amount shall be the annual average class size for each classroom per
schoolsite for kindergarten and grades 1 to 3, inclusive, in the
2013-14 fiscal year.
   (ii) Determine a school district's percentage of total need
pursuant to paragraph (2) of subdivision (b) of Section 42238.03.
   (iii) Determine the percentage of the need calculated in clause
(ii) that is met by funding provided to the school district pursuant
to paragraph (3) of subdivision (b) of Section 42238.03.
   (iv) Determine the difference between the amount computed pursuant
to clause (i) and an annual average class size of not more than 24
pupils for each classroom per schoolsite.
   (v) Calculate a current year annual average class size adjustment
for each classroom per schoolsite for kindergarten and grades 1 to 3,
inclusive, equal to the adjustment calculated in clause (iv)
multiplied by one minus the percentage determined pursuant to clause
(iii).
   (C) School districts that have an annual average class size for
each classroom per schoolsite for kindergarten and grades 1 to 3,
inclusive, of 24 pupils or less for each classroom per schoolsite in
the 2013-14 fiscal year, shall be exempt from the requirements of
subparagraph (B) so long as the school district continues to maintain
an annual average class size for each classroom per schoolsite for
kindergarten and grades 1 to 3, inclusive, of not more than 24 pupils
in each classroom, unless a collectively bargained alternative ratio
is agreed to by the school district.
   (D) Upon full implementation of the local control funding formula,
as a condition of the receipt of funds in this paragraph, all school
districts shall maintain an annual average class size for each
classroom per schoolsite for kindergarten and grades 1 to 3,
inclusive, of not more than 24 pupils for each classroom per
schoolsite in kindergarten and grades 1 to 3, inclusive, unless a
collectively bargained alternative ratio is agreed to by the school
district.
   (E) The annual average class size requirement for each classroom
per schoolsite for kindergarten and grades 1 to 3, inclusive,
established pursuant to this paragraph shall not be subject to waiver
by the state board pursuant to Section 33050 or by the
Superintendent.
   (4) The Superintendent shall compute an additional adjustment to
the base grant for grades 9 to 12, inclusive, as adjusted for
inflation pursuant to paragraph (2), equal to 2.8 percent. The
additional grant shall be calculated by multiplying the base grant
for grades 9 to 12, inclusive, as adjusted by paragraph (2), by 2.8
percent.
   (e) The Superintendent shall compute a supplemental grant add-on
equal to 35 percent of the base grants as specified in subparagraphs
(A) to (D), inclusive, of paragraph (1) of subdivision (d), as
adjusted by paragraph (2) of subdivision (d), for each school
district or charter school percentage of unduplicated pupils. The
supplemental grant shall be calculated by multiplying the base grants
as specified in subparagraphs (A) to (D), inclusive, of paragraph
(1), as adjusted by paragraph (2) of subdivision (d), by 35 percent
and by the percentage of unduplicated pupils in that school district
or charter school.
   (f) The Superintendent shall compute an add-on to the total sum of
a school district's or charter school's base and supplemental grants
equal to the amount of funding a school district or charter school
received from funds allocated pursuant to the Targeted Instructional
Improvement Block Grant program, as set forth in Article 6
(commencing with Section 41540) of Chapter 3.2, for the 2013-14
fiscal year, as that article read on January 1, 2014. A school
district or charter school shall not receive a total funding amount
from this add-on greater than the total amount of funding received by
the school district or charter school from that program in the
2013-14 fiscal year. 
   (g) The Superintendent shall compute an add-on to the total sum of
a school district's or charter school's base and supplemental grants
equal to the amount of funding a school district or charter school
received from funds allocated pursuant to the Home-to-School
Transportation program, as set forth in former Article 2 (commencing
with Section 39820) of Chapter 1 of Part 23.5 and former Article 10
(commencing with Section 41850) of Chapter 5, for the 2013-14 fiscal
year. A school district or charter school shall not receive a total
funding amount from this add-on greater than the total amount
received by the school district or charter school for that program in
the 2013-14 fiscal year.  
   (h) 
    (g)  The sum of the local control funding formula rates
computed pursuant to subdivisions (c) to (e), inclusive, shall be
multiplied by:
   (1) For school districts, the average daily attendance of the
school district in the corresponding grade level ranges computed
pursuant to Section 42238.05.
   (2) For charter schools, the total current year average daily
attendance in the corresponding grade level ranges. 
   (i) 
    (h)  Notwithstanding any other law, the Superintendent
shall adjust the sum of each school district's or charter school's
amount determined in subdivisions (f)  to (h), inclusive,
  and (g),  pursuant to the calculation specified
in Section 42238.03, less the sum of the following:
   (1) (A) For school districts, the property tax revenue received
pursuant to Chapter 3.5 (commencing with Section 75) and Chapter 6
(commencing with Section 95) of Part 0.5 of Division 1 of the Revenue
and Taxation Code.
   (B) For charter schools, the in-lieu property tax amount provided
to a charter school pursuant to Section 47635.
   (2) The amount, if any, received pursuant to Part 18.5 (commencing
with Section 38101) of Division 2 of the Revenue and Taxation Code.
   (3) The amount, if any, received pursuant to Chapter 3 (commencing
with Section 16140) of Part 1 of Division 4 of Title 2 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), less 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 and that is not an amount
received pursuant to Section 33492.15, or 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) The amount, if any, received pursuant to Sections 34183 and
34188 of the Health and Safety Code.
   (8) (A) Revenue received pursuant to subparagraph (B) of paragraph
(3) of subdivision (e) of Section 36 of Article XIII of the
California Constitution.
   (B) Subparagraph (A) shall only offset entitlements provided for
the purpose of paragraph (1) of subdivision (a) of Section 42238.03
as continued in subsequent years by paragraph (3) of subdivision (a)
of Section 42238.03. 
   (j) 
    (i)  A school district shall annually transfer to each
of its charter schools funding in lieu of property taxes pursuant to
Section 47635. 
   (k) 
    (j)  (1) The funds apportioned pursuant to this section
and Section  42238.03,   42238.03  shall be
available to a school district or charter school for any locally
determined educational purpose.
   (2)  (A)    School districts and charter schools
that receive supplemental grants pursuant to this section shall only
use those funds to serve and assist the pupils whose circumstances
generated those funds and shall supplement, not supplant, existing
state and federal funds expended on unduplicated pupils pursuant to a
school district's or charter school's local control and
accountability plan. 
   (B) School districts and charter schools that receive supplemental
grants pursuant to this section shall provide services and
assistance to an unduplicated pupil or pupils whose circumstances
generated those funds at any school enrolling one or more
unduplicated pupils.  
   (3) (A) Notwithstanding paragraph (2), a school district or
charter school may use funds apportioned pursuant to this article,
together with any other federal, state, or local funds, to improve
the entire educational program of a school in which at least 70
percent of the enrolled pupils are unduplicated pupils, as defined in
subdivision (b), and that use of funds shall be referred to as a
schoolwide program for purposes of this paragraph.  

            (B) A school participating in a schoolwide program may
use funds apportioned pursuant to this article to benefit any pupil
enrolled in the participating school.  
   (C) A school participating in a schoolwide program shall only use
funds apportioned pursuant to this article to supplement funds that
are, in the absence of the apportionment of funds pursuant to this
article, available from other sources, including those that support
legally required services for pupils with exceptional needs. 

   (D) A school district or charter school shall not make pupil
enrollment decisions for purposes of making schools eligible to
participate in a schoolwide program.  
   (E) A school district or charter school that chooses to use funds
apportioned pursuant to this article to operate a schoolwide program
shall describe how the funds will be used in its local control and
accountability plan.  
   (l) 
    (k)  Nothing in this section shall be interpreted to
authorize a school district that receives funding on behalf of a
charter school pursuant to Section 47651 to redirect this funding for
another purpose unless otherwise authorized in law or pursuant to an
agreement between a charter school and its chartering authority.

   (m) 
    (l)  Any calculations in law that are used for purposes
of determining if a local educational agency is an excess tax school
entity or basic aid school district, including, but not limited to,
this section and Sections 42238.03, 41544, 47660, 47632, 47663,
48310, and 48359.5, and Section 95 of the Revenue and Taxation Code,
shall be made exclusive of the revenue received pursuant to
subparagraph (B) of paragraph (3) of subdivision (e) of Section 36 of
Article XIII of the California Constitution. 
   (n) 
    (m)  A school district that does not receive an
apportionment of state funds pursuant to this section as implemented
pursuant to Section 42238.03, excluding funds apportioned due to the
requirements of subdivision (d) of Section 42238.03 shall be
considered a "basic aid school district" or an "excess tax entity."

   (o) 
    (n) This section shall become operative on July 1, 2014.

  SEC. 28.  Section 42238.03 is added to the Education Code, to read:

   42238.03.  Commencing with the 2014-15 fiscal year and each fiscal
year thereafter, the Superintendent shall allocate the
appropriations in Section 14002 to each charter school and school
district according to the following formula:
   (a) Calculate the prior year amount of funding for each school
district and charter school, as follows:
   (1) For the 2014-15 fiscal year, the prior year funding level
shall be the total of all of the following:
   (A) Entitlements for revenue limits in the 2013-14 fiscal year
pursuant to Article 2 (commencing with Section 42238) and Article 2
(commencing with Section 47633) of Chapter 6 of Part 26.8 of Division
4, as those articles read on June 30, 2014.
   (B) Notwithstanding subparagraph (A), entitlements for revenue
limits for fiscal years before June 30, 2014, shall be annually
adjusted, as necessary, for average daily attendance and revenue
offsets, as specified in paragraphs (1) to (7), inclusive, of
subdivision (h) of Section 42238, as that section read on June 30,
2014, and the in-lieu property tax amount provided to a charter
school pursuant to Section 47635, as that section read on June 30,
2014.
   (2) (A) Entitlements from items contained in Section 2.00, as
adjusted pursuant to Section 12.42, of the Budget Act of 2013 for
Items 6110-104-0001, 6110-108-0001,  6110-111-0001, 
6110-124-0001, 6110-128-0001, 6110-137-0001, 6110-144-0001,
6110-158-0001, 6110-181-0001, 6110-188-0001, 6110-189-0001,
6110-190-0001, 6110-193-0001, 6110-195-0001, 6110-198-0001,
6110-204-0001, 6110-208-0001, 6110-209-0001, 6110-211-0001,
6110-212-0001, 6110-227-0001, 6110-228-0001, 6110-232-0001,
6110-240-0001, 6110-242-0001, 6110-243-0001, 6110-244-0001,
6110-245-0001, 6110-246-0001, 6110-247-0001, 6110-248-0001,
6110-260-0001, 6110-265-0001, 6110-267-0001, 6110-268-0001,
6360-101-0001, and 2013-14 fiscal year funding for the Class Size
Reduction Program pursuant to Chapter 6.10 (commencing with Section
52120) of Part 28 of Division 4, as it read on January 1, 2014.
   (B) Entitlements pursuant to Section 47634.1, as that section read
on January 1, 2014, shall be adjusted for growth in average daily
attendance.
   (3) For the 2015-16 fiscal year and each fiscal year thereafter,
the prior year amount shall be the amount each school district or
charter school received in the prior year pursuant to this section.
   (b) Calculate an adjustment to the amount in subdivision (a) as
follows:
   (1) Subtract the amount in subdivision (a) from the amount
computed for each school district or charter school under the local
control funding formula entitlements in subdivision  (i)
  (h)  of Section 42238.02. School districts and
charter schools with a negative difference shall be deemed to have a
zero difference.
   (2) Each school district's and charter school's total need as
calculated pursuant to paragraph (1) shall be divided by the sum of
all school districts' and charter schools' total need to determine
the school district's or charter school's respective proportions of
total need.
   (3) Each school district's and charter school's proportion of
total need shall be multiplied by any available appropriations for
this purpose, and added to the school district's or charter school's
funding amounts as calculated pursuant to subdivision (a).
   (4) If the total amount of funds available for allocation pursuant
to this subdivision are sufficient to fully fund the amounts
computed pursuant to paragraph (1), the local control funding formula
grant computed pursuant to subdivision (c) of Section 42238.02 shall
be adjusted such that any available appropriations for this purpose
in that fiscal year are expended pursuant to the local control
funding formula.
   (c) (1) Upon a determination that a school district or charter
school equals or exceeds the local control funding formula target
computed pursuant to subdivision  (i)   (h)
 of Section 42238.02, as determined by the calculation of a zero
difference pursuant to paragraph (1) of subdivision (b) of this
section, this section shall not apply and the school district or
charter school shall receive an allocation equal to the amount
calculated under Section 42238.02 in that fiscal year and future
fiscal years.
   (2) In any fiscal year before paragraph (1) applies, the district
superintendent of schools or charter school administrator shall
develop, and present at least twice per fiscal year to the parents of
pupils and the governing board of the school district or governing
body of the charter school, information that enhances their
understanding of and familiarity with the local control funding
formula and the local control and accountability plan. When
presenting this information, the district superintendent of schools
or charter school administrator  shall explain  , at a
minimum and consistent with Section 48985, how parents can
meaningfully participate and how the school district or charter
school will provide meaningful opportunities for parental
involvement, including, but not limited to, effective schoolsite
councils and English learning advisory committees.
   (d) Notwithstanding subdivisions (b) and (c), commencing with the
2014-15 fiscal year, a school district or charter school shall
receive state-aid funding pursuant to paragraph (3) of subdivision
(b) of no less than the funding the school district or charter school
received from programs in paragraphs (1) and (2) of subdivision (a).

   (e) (1) For purposes of this section, commencing with the 2014-15
fiscal year and until all school districts and charter schools equal
or exceed their local control funding formula target computed
pursuant to Section 42238.02 as determined by the calculation of a
zero difference pursuant to paragraph (1) of subdivision (b), a newly
operational charter school shall be determined to have a prior year
per average daily attendance funding amount equal to the lesser of:
   (A) The prior year funding amount per average daily attendance for
the school district in which the charter school is physically
located. The Superintendent shall calculate the per average daily
attendance amount for this purpose by dividing the total local
control funding formula entitlement received by that school district
in the prior year by prior year average daily attendance of that
school district. For purposes of this paragraph, a charter school
that is physically located in more than one school district, shall
use the calculated per average daily attendance local control funding
entitlement of the school district with the highest prior year per
average daily attendance funding amount.
   (B) The charter school's local control funding formula rate
computed pursuant to subdivisions (c) to  (h),  
(g),  inclusive, of Section 42238.02.
   (2) For charter schools funded pursuant to paragraph (1), the
charter school shall be eligible to receive growth funding pursuant
to subdivision (b) toward meeting the newly operational charter
school's local control funding formula target.
   (3) Upon a determination that all school districts or charter
schools equal or exceed the local control funding formula target
computed pursuant to Section 42238.02 as determined by the
calculation of a zero difference pursuant to paragraph (1) of
subdivision (b) for all school districts and charter schools, this
subdivision shall not apply and the charter school shall receive an
allocation equal to the amount calculated under Section 42238.02 in
that fiscal year and future fiscal years.
   (f) This section shall become operative on July 1, 2014.
  SEC. 29.  Section 42238.04 is added to the Education Code, to read:

   42238.04.  (a) Notwithstanding any other law, revenue limit
funding for school districts and charter school block grant funding
for charter schools for the 2013-14 fiscal year and prior fiscal
years shall continue to be adjusted pursuant to Article 2 (commencing
with Section 42238), and Article 2 (commencing with Section 47633)
of Chapter 6 of Part 26.8 of Division 4, as those articles read on
June 30, 2014.
   (b) This section shall become operative on July 1, 2014.
  SEC. 30.  Section 42238.05 is added to the Education Code, to read:

   42238.05.  (a) For purposes of Sections 42238.02 and 42238.03, the
fiscal year average daily attendance shall be computed pursuant to
 paragraphs   paragraph  (1) or (2).
   (1) The second principal apportionment regular average daily
attendance for either the current or prior fiscal year, whichever is
greater. However, prior fiscal year average daily attendance shall be
adjusted for any loss or gain of average daily attendance due to a
reorganization or transfer of territory.
   (2) A school district that elects to receive funding pursuant to
Article 4 (commencing with Section 42280) shall compute its units of
average daily attendance for purposes of Section 42238.02 by
subtracting the amount determined in subparagraph (B) from the amount
determined in subparagraph (A).
   (A) The units of average daily attendance computed pursuant to
paragraph (1).
   (B) The units of average daily attendance resulting from pupils
attending schools funded pursuant to Article 4 (commencing with
Section 42280).
   (b) For purposes of this article, regular average daily attendance
shall be the base grant average daily attendance.
   (c) For purposes of this section, the Superintendent shall
distribute total ungraded enrollment and average daily attendance
among kindergarten and each of grades 1 to 12, inclusive, in
proportion to the amounts of graded enrollment and average daily
attendance, respectively, in each of these grades.
   (d) For purposes of this section, the Superintendent shall
distribute average daily attendance generated by the difference
between prior year average daily attendance and current year average
daily attendance, if positive, among kindergarten and each of grades
1 to 12, inclusive, in proportion to the amounts of graded average
daily attendance, respectively, in each of these grades.
   (e) This section shall only apply to average daily attendance
generated by school districts and shall not apply average daily
attendance generated by charter schools.
   (f) A pupil shall not be counted more than once for purposes of
calculating average daily attendance pursuant to this section.
   (g) This section shall become operative on July 1, 2014.
  SEC. 31.  Section 42238.051 is added to the Education Code, to
read:
   42238.051.  (a) For purposes of paragraph (1) of subdivision (a)
of Section 42238.05, a sponsoring school district's average daily
attendance shall be computed as follows:
   (1) Compute the sponsoring school district's regular average daily
attendance in the current year, excluding the attendance of pupils
in charter schools.
   (2) (A) Compute the regular average daily attendance used to
calculate the second principal apportionment of the school district
for the prior year, excluding the attendance of pupils in charter
schools.
   (B) Compute the attendance of pupils who attended one or more
noncharter schools of the school district between July 1, and the
last day of the second period, inclusive, in the prior year, and who
attended a charter school sponsored by the school district between
July 1, and the last day of the second period, inclusive, in the
current year. For purposes of this subparagraph, a pupil enrolled in
a grade at a charter school sponsored by the school district shall
not be counted if the school district does not offer classes for
pupils enrolled in that grade. The amount of the attendance counted
for any pupil for the purpose of this subparagraph may not be greater
than the attendance claimed for that pupil by the charter school in
the current year.
   (C) Compute the attendance of pupils who attended a charter school
sponsored by the school district in the prior year and who attended
one or more noncharter schools of the school district in the current
year. The amount of the attendance counted for any pupil for the
purpose of this subparagraph may not be greater than the attendance
claimed for that pupil by the school district in the current year.
   (D) From the amount determined pursuant to subparagraph (B),
subtract the amount determined pursuant to subparagraph (C). If the
result is less than zero, the amount shall be deemed to be zero.
   (E) The prior year average daily attendance determined pursuant to
subparagraph (A) shall be reduced by the amount determined pursuant
to subparagraph (D).
   (3) To the greater of the amounts computed pursuant to paragraphs
(1) and (2), add the regular average daily attendance in the current
year of all pupils attending charter schools sponsored by the school
district that are not funded through the charter schools local
control funding formula allocation pursuant to Section 42238.02, as
implemented by Section 42238.03.
   (b) For purposes of this section, a "sponsoring school district"
shall mean a "sponsoring local educational agency," as defined in
Section 47632, as that section read on January 1, 2014.
   (c) This section shall become operative on July 1, 2014.
  SEC. 32.  Section 42238.052 is added to the Education Code, to
read:
   42238.052.  (a) Notwithstanding any other law, the prior year
average daily attendance for a school district determined pursuant to
subdivision (a) of Section 42238.051 shall be increased by the prior
year second principal apportionment average daily attendance of a
school district only for a school that meets the following
description:
   (1) The school was a district noncharter school in any year before
the prior year.
   (2) The school was operated as a district-approved charter school
in the prior year.
   (3) The school is again operated as a district noncharter school
in the current year.
   (b) An adjustment to prior year average daily attendance pursuant
to this section may not be made for the attendance of pupils who were
not residents of the school district in the prior year.
   (c) This section shall become operative on July 1, 2014.
  SEC. 33.  Section 42238.053 is added to the Education Code, to
read:
   42238.053.  (a) The fiscal year average daily attendance computed
under Section 42238.05 shall be increased, for each school district
that operates a school that meets the eligibility requirements set
forth in subdivision (b), by the number of days of attendance of
pupils enrolled in eligible schools in the school district who are
currently migratory children, as defined by Section 54441, and who
are residing in state-operated migrant housing projects between the
second principal apportionment and the end of the regular school
year, divided by the number of days school was actually taught in the
regular day schools of the district, excluding Saturdays and
Sundays.
   (b) For a school district to be eligible for purposes of this
section, the following conditions shall apply:
   (1) One or more state-operated migrant housing projects are
located within the attendance area of the school.
   (2) The maximum number of pupils enrolled in the school in the
relevant fiscal year who are currently migratory children, as
calculated under subdivision (a), constitutes not less than one-third
of the total pupil enrollment of the school.
   (c) The Superintendent shall establish rules and regulations for
the implementation of this section.
   (d) This section shall become operative on July 1, 2014.
  SEC. 34.  Section 42238.06 is added to the Education Code, to read:

   42238.06.  (a) Commencing on July 1, 2014, except where context
requires otherwise, all of the following shall apply:
   (1) References to "revenue limit" shall instead refer to the
"local control funding formula."
   (2) References to "the revenue limit calculated pursuant to
Section 42238" shall instead refer to "the local control funding
formula calculated pursuant to Section 42238.02, as implemented by
Section 42238.03."
   (3) References to "Section 42238" shall instead refer to "Section
42238.02, as implemented pursuant to Section 42238.03."
   (4) References to "Section 42238.1" shall instead refer to
"Section 42238.02."
   (5) References to "Section 42238.5" shall instead refer to
"Section 42238.05."
   (6) References to "general-purpose entitlement" shall instead
refer to "local control funding formula grant funding pursuant to
Section 42238.02, as implemented by Section 42238.03."
   (b) This section shall become operative on July 1, 2014.
  SEC. 35.  Section 42238.1 of the Education Code is amended to read:

   42238.1.  (a) For the 1986-87 fiscal year and each fiscal year up
to and including the 1998-99 fiscal year, the Superintendent of
Public Instruction shall compute an inflation adjustment equal to the
product of paragraphs (1) and (2):
   (1) Compute the sum of the following:
   (A) The statewide average base revenue limit per unit of average
daily attendance for the prior fiscal year for districts of similar
type.
   (B) The amount, if any, per unit of average daily attendance
received by the district pursuant to Article 8 (commencing with
Section 46200) of Chapter 2 of Part 26 for the prior fiscal year.
   (2) The percentage change in the annual average value of the
Implicit Price Deflator for State and Local Government Purchases of
Goods and Services for the United States, as published by the United
States Department of Commerce for the 12-month period ending in the
third quarter of the prior fiscal year. This percentage change shall
be determined using the latest data available as of May 1 of the
preceding fiscal year compared with the annual average value of the
same deflator for the 12-month period ending in the third quarter of
the second preceding fiscal year, using the latest data available as
of May 1 of the second preceding fiscal year, as reported by the
Department of Finance.
   (b) For the 1999-2000 fiscal year and each fiscal year thereafter,
the Superintendent of Public Instruction shall compute an inflation
adjustment equal to the product of paragraphs (1) and (2):
   (1) Compute the sum of the following:
   (A) The statewide average base revenue limit per unit of average
daily attendance for the prior fiscal year for districts of similar
type.
   (B) The amount, if any, per unit of average daily attendance
received by the district pursuant to Article 8 (commencing with
Section 46200) of Chapter 2 of Part 26 for the prior fiscal year.
   (2) The percentage change in the annual average value of the
Implicit Price Deflator for State and Local Government Purchases of
Goods and Services for the United States, as published by the United
States Department of Commerce for the 12-month period ending in the
third quarter of the prior fiscal year. This percentage change shall
be determined using the latest data available as of May 10 of the
preceding fiscal year compared with the annual average value of the
same deflator for the 12-month period ending in the third quarter of
the second preceding fiscal year, using the latest data available as
of May 10 of the preceding fiscal year, as  report 
 reported  by the Department of Finance.
   (c) This section shall become operative July 1, 1986.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 36.  Section 42238.2 of the Education Code is amended to read:

   42238.2.  (a) (1) Notwithstanding Section 42238.5 or any other
provision of law, a school district that meets any of the following
conditions shall be entitled to an adjustment to its units of average
daily attendance pursuant to this section:
   (A) The school district experiences a decline in the number of
units of average daily attendance in excess of 8 percent of its total
average daily attendance as a result of the closure of a facility
operated by a branch of the United States Armed Forces in the school
district's boundaries.
   (B) The school district experiences a decline in the number of
units of average daily attendance that is less than 8 percent but at
least 5 percent of its total average daily attendance as a result of
the closure of a facility operated by a branch of the United States
Armed Forces in that school district's boundaries, upon a finding by
both the Superintendent of Public Instruction and the Director of
Finance that both of the following conditions exist:
   (i) The school district demonstrates that at the end of a
three-year period the school district will experience a 10-percent
reduction in the amount of funding that the school district would
otherwise have received from state apportionments, funding received
pursuant to the California State Lottery Act of 1984 (Chapter 12.5
(commencing with Section 8880) of Division 1 of Title 2 of the
Government Code), and funding received pursuant to Title VIII of
Public Law 103-382, as a result of the loss of pupils related to the
closure of a facility operated by a branch of the United States Armed
Forces.
   (ii) The fiscal crisis and management assistance team established
pursuant to Section 42127.8 has reviewed the school district's
finances and has found that the school district has taken significant
steps to reduce expenditure.
   (C) The school district experiences a decline in the number of
units of average daily attendance in excess of 5 percent of its total
average daily attendance and the Director of Finance determines that
the school district is likely, within eight years of that decline,
to maintain a number of units of average daily attendance that is
equivalent to the number of units of average daily attendance
maintained by the school district prior to the decline.
Notwithstanding subdivision (b), loan repayments shall commence no
later than the fourth year after the base year or at a later time, as
determined by the Director of Finance.
   (2) For purposes of this section, the year preceding a decline
shall be the base year.
   (b) In the second year after the base year, the district average
daily attendance pursuant to Section 42238.5 may, if the district
chooses, be increased by 75 percent of the difference between the
base year units of average daily attendance and the units of average
daily attendance in the first year of decline. In the third year
after the base year, the district average daily attendance pursuant
to Section 42238.5 may, if the district chooses, be increased by 50
percent of the difference between the base year units of average
daily attendance and the units of average daily attendance in the
first year of decline. The amount of money represented by these
increases shall be considered a loan to the school district. Loan
repayments shall commence no later than the fourth year after the
base year.
   (c) (1) The Superintendent of Public Instruction, in consultation
with a school district subject to this section, shall determine a
schedule for repayment of the total amount loaned pursuant to this
section which may not exceed 10 years. Payments shall include
interest charged at a rate based on the most current investment rate
of the Pooled Money Investment Account in the General Fund as of the
date of the disbursement of funds to the school district.
   (2) Upon written notification by the Superintendent of Public
Instruction that the school district has not made one or more of the
payments required by the schedule established pursuant to paragraph
(1), the Controller shall withhold from Section A of the State School
Fund the defaulted payment which shall not exceed the amount of any
apportionment entitlement of the district to moneys in Section A of
the State School Fund. In that regard, the Controller shall withhold
the amount of any payment made under this subdivision, including
reimbursement of the Controller's administrative costs as determined
under a schedule approved by the California Debt Advisory Commission,
from subsequent apportionments to the school district from Section A
of the State School Fund.
   (3) Any apportionments made by the Controller pursuant to
paragraph (2) shall be deemed to be an allocation to the school
district for purposes of subdivision (b) of Section 8 of Article XVI
of the California Constitution, and for purposes of Chapter 2
(commencing with Section 41200) of Part 24.
                                                    (d) In no event
shall the adjustment provided by this section cause the apportionment
to a school district to exceed the amount that would otherwise be
calculated for apportionment to the district pursuant to Sections
42238 and 42238.1.
   (e) This section does not apply to a school district that
experiences a decline in enrollment as a result of a school district
reorganization pursuant to Chapter 3 (commencing with Section 35500)
of Part 21 or any other law.
   (f) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 37.  Section 42238.3 of the Education Code is amended to read:

   42238.3.  (a) For each year during the loan repayment period
provided for in Section 42238.2, any district utilizing the
adjustment pursuant to Section 42238.2 may adjust its revenue limit
computed pursuant to Section 42238 to the statewide average revenue
limit per unit of average daily attendance for its size and type of
district in proportion to the percentage of the loan that the school
district has repaid up to and including the year in which the revenue
limit adjustment is made.
   (b) This section does not apply to a school district that
experiences a decline in enrollment as a result of a school district
reorganization pursuant to Chapter 3 (commencing with Section 35500)
of Part 21 or any other law.
   (c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 38.  Section 42238.4 of the Education Code is amended to read:

   42238.4.  (a) For the 1995-96 fiscal year, the county
superintendent of schools shall compute an equalization adjustment
for each school district in the county, so that no district's base
revenue limit per unit of average daily attendance is less than the
prior fiscal year statewide average base revenue limit for the
appropriate size and type of district listed in subdivision (b) plus
the inflation adjustment specified in Section 42238.1 for the current
fiscal year for the appropriate type of district.
   For purposes of this section, the district base revenue limit and
the statewide average base revenue limit shall not include any
amounts attributable to Section 45023.4, 46200, or 46201.
   (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) Add the products of the amount computed for each school
district by the county superintendent pursuant to subdivision (a) and
the average daily attendance used to calculate the district's
revenue limit for the current fiscal year as adjusted for the deficit
factor in Section 42238.145.
   (2) Divide the amount appropriated for purposes of this section
for the current fiscal year by the amount computed pursuant to
paragraph (1).
   (3) Multiply the amount computed for the school district pursuant
to subdivision (a) by the amount computed pursuant to paragraph (2).
   (d) For the purposes of this section, the 1994-95 statewide
average base revenue limits determined for the purposes of
subdivision (a) and the fraction computed pursuant to paragraph (2)
of subdivision (c) by the Superintendent for the 1995-96 second
principal apportionment shall be final, and shall not be calculated
as subsequent apportionments. In no event shall the fraction computed
pursuant to paragraph (2) of subdivision (c) exceed 1.00. For the
purposes of determining the size of a district used in subdivision
(b), the Superintendent shall use a school district's revenue limit
average daily attendance for the 1994-95 fiscal year determined
pursuant to Section 42238.5 and Article 4 (commencing with Section
42280).
   (e) This section shall only be operative if the Director of
Finance certifies that a settlement agreement in California Teachers
Association v. Gould (Sacramento County Superior Court Case CV
373415) is effective. No funds shall be disbursed under this section
for this purpose before August 1, 1996, and any apportionment or
allocation of funds appropriated for purposes of this section shall
be accounted for in the 1995-96 fiscal year.
   (f) Appropriations for the 1995-96 fiscal year as a result of the
implementation of this section shall be deemed "General Fund revenues
appropriated for school districts," as defined in subdivision (c) of
Section 41202, for the 1995-96 fiscal year and "total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated to Article XIII B," as defined in
subdivision (e) of Section 41202, for that fiscal year, for purposes
of Section 8 of Article XVI of the California Constitution.
   (g) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 39.  Section 42238.41 of the Education Code is amended to
read:
   42238.41.  (a) For the 1996-97 fiscal year, the county
superintendent of schools, in conjunction with the Superintendent of
Public Instruction, shall compute an equalization adjustment for each
school district in the county, so that no district's 1995-96 base
revenue limit per unit of average daily attendance is less than the
1995-96 fiscal year statewide average base revenue limit for the
appropriate size and type of district listed in subdivision (b).
   For purposes of this section, the district base revenue limit and
the statewide average base revenue limit shall not include any
amounts attributable to Section 45023.4, 46200, or 46201.
   (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 of Public Instruction shall compute a
revenue limit equalization adjustment for each school district's base
revenue limit per unit of average daily attendance as follows:
   (1) Add the products of the amount computed for each school
district by the county superintendent pursuant to subdivision (a) and
the average daily attendance used to calculate the district's
revenue limit for the current fiscal year as adjusted for the deficit
factor in Section 42238.145.
   (2) Divide the amount appropriated for purposes of this section
for the current fiscal year by the amount computed pursuant to
paragraph (1).
   (3) Multiply the amount computed for the school district pursuant
to subdivision (a) by the amount computed pursuant to paragraph (2).
   (d) For the purposes of this section, the 1995-96 statewide
average base revenue limits determined for the purposes of
subdivision (a) and the fraction computed pursuant to paragraph (2)
of subdivision (c) by the Superintendent of Public Instruction for
the 1995-96 second principal apportionment shall be final, and shall
not be recalculated at subsequent apportionments. In no event shall
the fraction computed pursuant to paragraph (2) of subdivision (c)
exceed 1.00. For the purposes of determining the size of a district
used in subdivision (b), county superintendents of schools, in
conjunction with the Superintendent of Public Instruction, shall use
a school district's revenue limit average daily attendance for the
1995-96 fiscal year as determined pursuant to Section 42238.5 and
Article 4 (commencing with Section 42280).
   (e) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 40.  Section 42238.42 of the Education Code is amended to
read:
   42238.42.  (a) In the event that the amount required to be
appropriated for the purpose of the state's minimum funding
obligation to school districts and community college districts
pursuant to Section 8 of Article XVI of the California Constitution
for the 1996-97 fiscal year, as determined in paragraph (1) of
subdivision (b), exceeds the amount appropriated for that purpose for
the 1996-97 fiscal year, as determined pursuant to paragraph (2) of
subdivision (b), the amount computed pursuant to subdivision (d), is
hereby appropriated from the General Fund to the Superintendent of
Public Instruction for the purposes of equalizing the revenue limits
of school districts pursuant to subdivision (e) and Section 42238.43
and for the purpose of reducing the deficit factor applied to the
revenue limits of county superintendents of schools pursuant to
Section 2558.45 and reducing the deficit factor applied to the
revenue limits of the school districts pursuant to Section 42238.145.

   (b) To determine the amounts available for the purposes of this
section, the Department of Finance shall make the following
computations:
   (1) At the first principal apportionment for the 1997-98 fiscal
year, compute the level of General Fund revenues that meets the state'
s minimum funding obligation to school districts and community
college districts pursuant to Section 8 of Article XVI of the
California Constitution for the 1996-97 fiscal year based upon the
most current determination of data as defined in subdivision (a) of
Section 41206 of the Education Code.
   (2) Subtract from the amount determined in paragraph (1) an amount
equal to the total amount of General Fund revenues that have been
appropriated for the purpose of meeting the state's minimum funding
obligation for the 1996-97 fiscal year to school districts and
community college districts pursuant to Section 8 of Article XVI of
the California Constitution as of February 1, 1998.
   (3) If the amount computed in paragraph (2) is greater than zero,
that amount is the total amount available for the purposes of this
section.
   (c) To determine the portion of the amount computed in subdivision
(a) to set aside for community college districts pursuant to this
section, the Department of Finance shall make the following
computations:
   (1) Add the total General Fund allocations to school districts and
community college districts for the purposes of meeting the state's
minimum funding obligation to school districts and community college
districts pursuant to Section 8 of Article XVI of the California
Constitution for the 1996-97 fiscal year to the total statewide
amount of "allocated local proceeds of taxes," as defined in
subdivisions (g) and (h) of Section 41202, allocated to school
districts and community college districts for the 1996-97 fiscal
year.
   (2) Divide the sum of the General Fund allocations made to
community college districts for the purposes of meeting the state's
minimum funding obligation to community college districts pursuant to
Section 8 of Article XVI of the California Constitution for the
1996-97 fiscal year and the total statewide amount of "allocated
local proceeds of taxes," as defined in subdivision (h) of Section
41202, allocated to community college districts for the 1996-97
fiscal year by the sum computed pursuant to paragraph (1).
   (3) Multiply the amount computed pursuant to subdivision (b) by
the percentage determined in paragraph (2). Community college
districts shall be entitled to receive an amount equal to the amount
computed pursuant to this paragraph and that amount shall be set
aside from the General Fund for appropriation to community college
districts by the Legislature.
   (d) The amount of the appropriation made pursuant to subdivision
(a) of this section shall be computed by subtracting the amount
computed in paragraph (3) of subdivision (c) from the amount computed
pursuant to subdivision (b). The Director of the Department of
Finance shall certify to the Controller the amount of the
appropriation computed pursuant to this subdivision and under no
circumstances shall funds be released by the Controller for purposes
of this section before that certification is received by the
Controller.
   (e) The Superintendent of Public Instruction shall allocate 50
percent of the amount computed pursuant to subdivision (d) to school
districts for the purpose of making equalization adjustments to the
base revenue limit of school districts for the 1996-97 fiscal year,
as follows:
   (1) The Superintendent of Public Instruction shall perform the
computations set forth in Section 42238.43 for the purpose of
equalization adjustments to the base revenue limits of school
districts for the 1996-97 fiscal year to determine the amount to
allocate to each school district pursuant to this paragraph.
   (2) The Superintendent of Public Instruction shall repeat the
process of computing equalization adjustments to the base revenue
limits of school districts for the 1996-97 fiscal year pursuant to
Section 42238.43 until the total amount of funds available for that
purpose pursuant to this subdivision is allocated to school
districts.
   (3) If the total amount of funds available for allocation pursuant
to this subdivision is insufficient to fully fund the amounts
computed pursuant to paragraph (1) or the amount computed pursuant to
any of the iterations made pursuant to paragraph (2), the
allocations computed pursuant to those paragraphs shall be reduced
proportionately.
   (f) The Superintendent of Public Instruction shall allocate 50
percent of the amount computed pursuant to subdivision (d) to county
superintendents of schools for the purpose of reducing the 1996-97
and 1997-98 deficit factors applied to the revenue limits of county
 superintendent   superintendents  of
schools and school districts pursuant to Sections 2558.45 and
42238.145, respectively. The amount of the allocation made to each
school district and county superintendent of schools for the purpose
of reducing their respective deficit factors shall be computed in
proportion to their respective shares of the total statewide amount
of the revenue limits after adjustment for deficit factors for school
districts and county superintendents of schools.
   (g) In no event shall this section be construed to require an
appropriation that would cause the aggregate amount required to be
appropriated from the General Fund for the 1996-97 fiscal year
pursuant to Section 8 of Article XVI of the California Constitution
to be exceeded.
   (h) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 41.  Section 42238.43 of the Education Code is amended to
read:
   42238.43.  (a) (1) For the 1996-97 fiscal year, the county
superintendent of schools, in conjunction with the Superintendent of
Public Instruction, shall compute an equalization adjustment for each
school district in the county, so that no district's base revenue
limit per unit of average daily attendance is less than the 1996-97
fiscal year statewide average base revenue limit for the appropriate
size and type of district listed in subdivision (b).
   (2) For purposes of this section, the district base revenue limit
and the statewide average base revenue limit shall not include any
amounts attributable to Section 45023.4, 46200, or 46201.
   (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 equalization adjustment computed pursuant to this section
shall only be funded from amounts appropriated for that purpose
pursuant to Section 42238.42.
   (d) (1) For the purposes of the computation made pursuant to
paragraph (1) of subdivision (e) of Section 42238.42, the 1996-97
statewide average base revenue limits determined for the purposes of
subdivision (a) and the fraction, if any, computed pursuant to
paragraph (3) of subdivision (e) of Section 42238.42 by the
Superintendent of Public Instruction for the 1996-97 second principal
apportionment shall be final, and shall not be calculated as
subsequent apportionments. In no event shall the fraction computed
pursuant to paragraph (3) of subdivision (e) of Section 42238.42
exceed 1.00. If any iterations are required pursuant to paragraph (2)
of Section 42238.42, the Superintendent of Public Instruction shall
recompute the 1996-97 statewide average base revenue limit to include
any adjustments made by the immediately preceding iteration.
   (2) (A) For the purposes of determining the size of a school
district under subdivision (b), the Superintendent of Public
Instruction shall use a school district's revenue limit average daily
attendance for the 1996-97 fiscal year as determined pursuant to
Section 42238.5 and Article 4 (commencing with Section 42280).
   (B) Notwithstanding subparagraph (A), for the purposes of
determining the size of a school district under subdivision (b) with
respect to any elementary, high, or unified school district that was
funded in the 1996-97 school year as a large elementary, high, or
unified school district, as determined pursuant to subdivision (a) of
Section 42238.5, the school district's actual revenue limit average
daily attendance for the 1996-97 school year may be used. The actual
revenue limit average daily attendance for the 1996-97 school year
shall be used to calculate the 1996-97 revenue limit of a school
district exercising the authority granted under this subparagraph.
The governing board of a school district to which this subparagraph
is applicable may exercise the authority granted under this
subparagraph by enacting a resolution to that effect and transmitting
a copy of that resolution to the Superintendent of Public
Instruction on or before a date designated by the Superintendent of
Public Instruction for that school year. After the Superintendent of
Public Instruction receives the resolution, the superintendent shall
make the necessary adjustments to the school district's revenue limit
calculation.
   (e) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 42.  Section 42238.44 of the Education Code is amended to
read:
   42238.44.  (a) This section shall be known  ,  and may be
cited as, the Fairness in Education Funding Act.
   (b) (1) For the 2004-05 fiscal year, the Superintendent of Public
Instruction shall compute an equalization adjustment for each school
district, so that the 2003-04 base revenue limit per unit of average
daily attendance of a district is not less than the 2003-04 base
revenue limit per unit of average daily attendance above which fall
not more than 10 percent of the total statewide units of average
daily attendance for each category of school district set forth in
subdivision (c).
   (2) For purposes of this section, the district base revenue limit
and the statewide average base revenue limit shall not include any
amounts attributable to Section 45023.4, 46200, or 46201.
   (c) Subdivision (b) shall apply to the following school districts,
which shall be grouped according to size and type as follows:
  District                             ADA
Elementary ..................... less than 101
Elementary ..................... more than 100
High School .................... less than 301
High School .................... more than 300
Unified ........................ less than 1,501
Unified ........................ more than 1,500


   (d) The Superintendent of Public Instruction shall compute a
revenue limit equalization adjustment for each school district's base
revenue limit per unit of average daily attendance as follows:
   (1) Multiply the amount computed for each school district pursuant
to subdivision (b) by the average daily attendance used to calculate
the revenue limit for the 2004-05 fiscal year of a district.
   (2) Divide the amount appropriated for purposes of this section
for the 2004-05 fiscal year by the statewide sum of the amount
computed pursuant to paragraph (1).
   (3) Multiply the amount computed for the school district pursuant
to paragraph (1) of subdivision (b) by the amount computed pursuant
to paragraph (2).
   (e) (1) For the purposes of this section, the 2003-04 statewide
90th percentile base revenue limit determined pursuant to paragraph
(1) of subdivision (b), and the fraction computed pursuant to
paragraph (2) of subdivision (d) for the 2003-04 second principal
apportionment, shall be final, and shall not be recalculated at
subsequent apportionments. The fraction computed pursuant to
paragraph (2) of subdivision (d) shall not, under any circumstances,
exceed 1.00. For purposes of determining the size of a school
district pursuant to subdivision (c), county superintendents of
schools, in conjunction with the Superintendent of Public
Instruction, shall use school district revenue limit average daily
attendance for the 2003-04 fiscal year as determined pursuant to
Section 42238.5 and Article 4 (commencing with Section 42280).
   (2) For the purposes of calculating the size of a school district
pursuant to subdivision (c), the Superintendent of Public Instruction
shall include units of average daily attendance of any charter
school for which the school district is the chartering agency.
   (3) For the purposes of computing the target amounts pursuant to
subdivision (b), the Superintendent of Public Instruction shall count
all charter school average daily attendance toward the average daily
attendance of the school district that is the chartering agency.
   (f) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 43.  Section 42238.445 of the Education Code is amended to
read:
   42238.445.  (a) (1) For the 2002-03 fiscal year, the
Superintendent of Public Instruction shall compute an equalization
adjustment for each school district by determining the amount that
would be necessary to  assure   ensure 
that no district's 2001-02 base revenue limit per unit of average
daily attendance is less than the 2001-02 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 district base revenue limit
and the statewide average 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 of Public Instruction shall determine and
allocate, on a one-time basis, an amount for each school district as
follows:
   (1) Multiply the amount computed for each school district pursuant
to subdivision (a) by the average daily attendance used to calculate
the district's revenue limit for the 2002-03 fiscal year.
   (2) Divide forty-two million dollars ($42,000,000) appropriated
pursuant to Provision 2 of Item 6110-223-0001 of Section 2.00 of the
Budget Act of 2002 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) by the amount computed pursuant to paragraph (2).
   (d) (1) For the purposes of this section, the 2001-02 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 2001-02 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, under any circumstances,
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 of Public
Instruction, shall use school district revenue limit average daily
attendance for the 2001-02 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 of Public Instruction
shall include units of average daily attendance of any charter
school for which the school district is the chartering agency.
   (3) For the purposes of computing the target amounts pursuant to
subdivision (a), the Superintendent of Public Instruction shall count
all charter school average daily attendance toward the average daily
                                                 attendance of the
school district that is the chartering agency.
   (e) Allocations pursuant to this section do not represent
adjustments to school district base revenue limits.
   (f) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 44.  Section 42238.45 of the Education Code is amended to
read:
   42238.45.  (a) (1) For the 2001-02 fiscal year, the Superintendent
of Public Instruction shall compute an adjustment for each school
district, so that no district's 2000-01 base revenue limit per unit
of average daily attendance is less than the 2000-01 base revenue
limit per unit of average daily attendance above which fall not more
than 10 percent of the total statewide units of average daily
attendance for each category of school district set forth in
subdivision (b).
   (2) For purposes of this section, the district base revenue limit
and the statewide average base revenue limit shall not include any
amounts attributable to Section 45023.4, 46200, or 46201.
   (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) For the 2001-02 fiscal year, the Superintendent of Public
Instruction shall determine and allocate on a one-time basis for each
school district amounts as follows:
   (1) Multiply the amount computed for each school district pursuant
to subdivision (a) by the average daily attendance used to calculate
the district's revenue limit for the 2001-02 fiscal year.
   (2) Divide forty million dollars ($40,000,000) appropriated for
purposes of this section for the 2001-02 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 calculating the size of a school
district pursuant to subdivision (b), the Superintendent of Public
Instruction shall include units of average daily attendance of any
charter school for which the school district is the chartering
agency.
   (2) For the purposes of computing the target amounts pursuant to
subdivision (a), the Superintendent of Public Instruction shall count
all charter school average daily attendance toward the average daily
attendance of the school district that is the chartering agency.
   (e) Allocations for purposes of this section do not represent
adjustments to school district base revenue limits.
   (f) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 45.  Section 42238.46 of the Education Code is amended to
read:
   42238.46.  (a) For the 2003-04 fiscal year, the Superintendent of
Public Instruction shall compute an equalization adjustment for each
school district so that no district's 2002-03 adjusted base revenue
limit per unit of average daily attendance is less than the 2002-03
fiscal year adjusted base revenue limit above which fall not more
 that   than  8.25 percent of the total
statewide units of average daily attendance for the appropriate size
and type of district listed in subdivision (b).
   For purposes of this section, the district adjusted base revenue
limit and the statewide average adjusted base revenue limit may not
include any amounts attributable to Section 45023.4, 46200, or 46201.

   (b) Subdivision (a) applies 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 of Public Instruction shall compute a
revenue limit equalization adjustment for each school district's
adjusted base revenue limit per unit of average daily attendance as
follows:
   (1) Add the products of the amount computed for each school
district by the county superintendent pursuant to subdivision (a) and
the average daily attendance used to calculate the district's
revenue limit for the current fiscal year.
   (2) Divide the amount appropriated for purposes of this section
for the current fiscal year by the amount computed pursuant to
paragraph (1).
   (3) Multiply the amount computed for the school district pursuant
to subdivision (a) by the amount computed pursuant to paragraph (2).
   (d) (1) For purposes of this section only, prior to computing the
equalization adjustment pursuant to this section, the Superintendent
of Public Instruction shall calculate an adjusted base revenue limit
for each district by revising the 2002-03 base revenue limit of the
district to eliminate that portion of the one-time adjustment to its
base revenue limit related to excused absences made pursuant to
Section 42238.8.
   (2) For the purposes of this section, the 2002-03 statewide
average adjusted base revenue limits determined for the purposes of
subdivision (a) and the fraction computed pursuant to paragraph (2)
of subdivision (c) by the Superintendent of Public Instruction for
the 2002-03 second principal apportionment shall be final, and shall
not be recalculated at subsequent apportionments. In no event shall
the fraction computed pursuant to paragraph (2) of subdivision (c)
exceed 1.00. For the purposes of determining the size of a district
used in subdivision (b), county superintendents of schools, in
conjunction with the Superintendent of Public Instruction, shall use
a school district's revenue limit average daily attendance for the
2002-03 fiscal year as determined pursuant to Section 42238.5 and
Article 4 (commencing with Section 42280).
   (3) For the purposes of calculating the size of a school district
pursuant to subdivision (b), the Superintendent of Public Instruction
shall include units of average daily attendance of any charter
school for which the school district is the chartering agency.
   (4) For the purposes of computing the target amounts pursuant to
subdivision (a), the Superintendent of Public Instruction shall count
all charter school average daily attendance towards the average
daily attendance of the school district that is the chartering
agency.
   (e) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 46.  Section 42238.48 of the Education Code is amended 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.
   (e) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 47.  Section 42238.485 of the Education Code is amended to
read:
   42238.485.  (a) For the 2010-11 fiscal year, the Superintendent
shall compute an adjustment for each school district by dividing each
school district's 2007-08 fiscal year average daily attendance into
the sum of the following:
   (1) Funding for Meals for Needy Pupils programs received by the
school district for the 2007-08 fiscal year pursuant to Section
42241.2, as it read on January 1, 2009.
   (2) Funding incentives to increase beginning teachers' salaries
received by the school district for the 2007-08 fiscal year pursuant
to Sections 45023.1 and 45023.4, as those sections read on January 1,
2009.
   (b) For purposes of this section, average daily attendance shall
be computed pursuant to Section 42238.5.
   (c) Notwithstanding any other provision of this section, no
funding specified in this section shall be added to the adjustment
computed pursuant to subdivision (a) if that funding is currently
included in a school district's base revenue limit calculated
pursuant to Section 42238.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 48.  Section 42238.49 of the Education Code is amended to
read:
   42238.49.  (a) (1) For the 2011-12 fiscal year, the Superintendent
shall compute an equalization adjustment for each school district,
so that the 2010-11 base revenue limit per unit of average daily
attendance of a school district is not less than the 2010-11 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 2011-12 fiscal year of a school district.
   (2) Divide the amount appropriated from the Supplemental Education
Payment Account for purposes of this section for the 2011-12 fiscal
year by the statewide sum of the amounts 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 2010-11 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 2010-11 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 2010-11 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.
   (e) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 49.  Section 42238.5 of the Education Code is amended to read:

   42238.5.  (a) For purposes of Section 42238, the fiscal year
average daily attendance shall be computed pursuant to paragraph (1)
or (2).
   (1) The second principal apportionment regular average daily
attendance for either the current or prior fiscal year, whichever is
greater. However, prior fiscal year average daily attendance shall be
adjusted for any loss or gain of average daily attendance due to a
reorganization or transfer of territory, or, commencing in the
1993-94 fiscal year, and each fiscal year thereafter, for any change
in average daily attendance for pupils who are concurrently enrolled
in adult programs and classes pursuant to Section 52616.17.
   (2) Any school district that elects to receive funding pursuant to
Article 4 (commencing with Section 42280) shall compute its units of
average daily attendance for purposes of Section 42238 by
subtracting the amount determined in subparagraph (B) from the amount
determined in subparagraph (A).
   (A) The units of average daily attendance computed pursuant to
paragraph (1).
   (B) The units of average daily attendance resulting from pupils
attending schools funded pursuant to Article 4 (commencing with
Section 42280).
   (b) For purposes of this article, regular average daily attendance
shall be the base revenue limit average daily attendance, excluding
summer school average daily attendance.
   (c) For purposes of this section, for the 1998-99 fiscal year
only, the prior year average daily attendance shall be the 1997-98
regular average daily attendance, excluding absences excused pursuant
to subdivision (b) of Section 46010, as that subdivision read on
July 1, 1996.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 50.  Section 42238.51 of the Education Code is amended to
read:
   42238.51.  (a) For purposes of paragraph (1) of subdivision (a) of
Section 42238.5, a sponsoring school district's average daily
attendance shall be computed as follows:
   (1) Compute the sponsoring school district's regular average daily
attendance in the current year, excluding the attendance of pupils
in charter schools.
   (2) (A) Compute the regular average daily attendance used to
calculate the second principal apportionment of the school district
for the prior year, excluding the attendance of pupils in charter
schools.
   (B) Compute the attendance of pupils who attended one or more
noncharter schools of the school district between July 1, and the
last day of the second period, inclusive, in the prior year, and who
attended a charter school sponsored by the school district between
July 1, and the last day of the second period, inclusive, in the
current year. For the purposes of this paragraph, a pupil enrolled in
a grade at a charter school sponsored by the school district shall
not be counted if the school district does not offer classes for
pupils enrolled in that grade. The amount of the attendance counted
for any pupil for the purpose of this subparagraph may not be greater
than the attendance claimed for that pupil by the charter school in
the current year.
   (C) Compute the attendance of pupils who attended a charter school
sponsored by the school district in the prior year and who attended
one or more noncharter schools of the school district in the current
year. The amount of the attendance counted for any pupil for the
purpose of this subparagraph may not be greater than the attendance
claimed for that pupil by the school district in the current year.
   (D) From the amount determined pursuant to subparagraph (B),
subtract the amount determined pursuant to subparagraph (C). If the
result is less than zero, the amount shall be deemed to be zero.
   (E) The prior year average daily attendance determined pursuant to
subparagraph (A) shall be reduced by the amount determined pursuant
to subparagraph (D).
   (3) To the greater of the amounts computed pursuant to paragraphs
(1) and (2), add the regular average daily attendance in the current
year of all pupils attending charter schools sponsored by the
district that are not funded pursuant to Article 2 (commencing with
Section 47633) of Chapter 6 of Part 26.
   (b) For the purposes of this section, a "sponsoring school
district" shall mean a "sponsoring local educational agency," as
defined in Section 47632.
   (c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 51.  Section 42238.52 of the Education Code is amended to
read:
   42238.52.  (a) Notwithstanding any other provision of law, the
prior year average daily attendance for a school district determined
pursuant to subdivision (b) of Section 42238.51 shall be increased by
the prior year second principal apportionment average daily
attendance of district residents only of any school that meets the
following description:
   (1) The school was a district noncharter school in any year prior
to the prior year.
   (2) The school was operated as a district-approved charter school
in the prior year.
   (3) The school is again operated as a district noncharter school
in the current year.
   (b) An adjustment to prior year average daily attendance pursuant
to this section may not be made for the attendance of pupils who were
not residents of the school district in the prior year.
   (c) This section applies to the 2000-01 fiscal year and subsequent
fiscal years.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 52.  Section 42238.53 of the Education Code is amended to
read:
   42238.53.  (a) Sections 42238.51 and 42238.52 do not apply to
resident pupils in charter schools operating under the districtwide
charter of a district that has converted all of its schools to
charter status pursuant to Section 47606 and has elected not to be
funded pursuant to Article 2 (commencing with Section 47633) of
Chapter 6 of Part 26.
   (b) For the purposes of this section, "resident pupils" means
pupils who reside in, and are otherwise eligible to attend, a school
in the specified district.
   (c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 53.  Section 42238.6 of the Education Code is amended to read:

   42238.6.  (a) The fiscal year average daily attendance computed
under Section 42238.5 shall be increased, for each school district
that operates any school that meets the eligibility requirements set
forth in subdivision (b), by the number of child days of attendance
of pupils enrolled in eligible schools in the district who are
currently migratory children, as defined by Section 54441, and who
are residing in state-operated migrant housing projects between the
second principal apportionment and the end of the regular school
year, divided by the number of days school was actually taught in the
regular day schools of the district, excluding Saturdays and
Sundays.
   (b) For a school to be eligible for the purposes of this section,
the following conditions shall apply:
   (1) One or more state-operated migrant housing projects are
located within the attendance area of the school.
   (2) The maximum number of pupils enrolled in the school in the
relevant fiscal year who are currently migratory children, as
calculated under subdivision (a), constitutes not less than one-third
of the total pupil enrollment of the school.
   (c) The Superintendent of Public Instruction shall establish rules
and regulations for the implementation of this section.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 54.  Section 42238.7 of the Education Code is amended to read:

   42238.7.  (a) The governing board of each school district, as a
condition of apportionment, shall report to the Superintendent of
Public Instruction, not later than May 1, 1998, and September 1,
1998, respectively, the portion of the attendance in the schools and
classes maintained by the district that was reported for each of the
1996-97 and 1997-98 school years pursuant to Section 41601 that
consisted of absences excused pursuant to subdivision (b) of Section
46010 and to Section 46015, as those sections read on July 1, 1996.
   (b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 55.  Section 42238.75 of the Education Code is amended to
read:
   42238.75.  Notwithstanding any other provision of law:
   (a) All completed audits, including those on appeal, of school
districts, charter schools, and county offices of education funded by
Item 8860-025-0001 of Section 2.00 of Chapter 50 of the Statutes of
1999, Item 8860-025-0001 of Section 2.00 of Chapter 52 of the
Statutes of 2000, and Item 8860-025-0001 of Section 2.00 of Chapter
106 of the Statutes of 2001, and any findings of those audits, are
withdrawn, and no loss of apportionment arising from the findings of
those audits shall be realized.
   (b) All audits funded by Item 8860-025-0001 of Section 2.00 of
Chapter 50 of the Statutes of 1999, Item 8860-025-0001 of Section
2.00 of Chapter 52 of the Statutes of 2000, and Item 8860-025-0001 of
Section 2.00 of Chapter 106 of the Statutes of 2001, shall be
discontinued.
   (c) The Controller shall notify all school districts, charter
schools, and county offices of education that it is no longer
necessary to retain records supporting pupil attendance and excused
absences used for purposes of calculating average daily attendance
during the 1996-97 fiscal year.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 56.  Section 42238.8 of the Education Code is amended to read:

   42238.8.  (a) Effective July 1, 1998, the Superintendent of Public
Instruction shall make a one-time adjustment to the revenue limit
per unit of average daily attendance of each school district. This
one-time adjustment shall apply for
          the 1998-99 fiscal year, and for each fiscal year
thereafter, but not for any year prior to 1998-99, and shall be
accomplished by revision of the prior fiscal year revenue limit per
unit of average daily attendance, as follows:
   (1) Determine a revised revenue limit per unit of average daily
attendance for the 1996-97 fiscal year as follows:
   (A) For each school district that had its revenue limit funding
for the 1996-97 fiscal year calculated on the basis of its 1996-97
average daily attendance pursuant to paragraph (1) of subdivision (a)
of Section 42238.5, the revised revenue limit per unit of average
daily attendance shall equal the adjusted total base revenue limit
determined pursuant to paragraph (2) divided by the adjusted average
daily attendance determined pursuant to subparagraph (A) of paragraph
(3).
   (B) For each school district that had its revenue limit funding
for the 1996-97 fiscal year calculated on the basis of its 1995-96
average daily attendance pursuant to paragraph (1) of subdivision (a)
of Section 42238.5, the revised revenue limit per unit of average
daily attendance shall equal the adjusted total base revenue limit
determined pursuant to paragraph (2) divided by the adjusted average
daily attendance determined pursuant to subparagraphs (B), (C), and
(D) of paragraph (3).
   (2) Determine the amount of the 1996-97 total base revenue limit
funding received pursuant to Section 42238 for growth and nongrowth
average daily attendance, including, as nongrowth average daily
attendance, attendance in necessary small schools in the year
determined to be the greater pursuant to paragraph (1) of subdivision
(a) of Section 42238.5 for the 1996-97 fiscal year, but excluding
attendance in nonpublic, nonsectarian schools, county office operated
special education, and county community school programs.
   (3) (A) Reduce the average daily attendance figure used to make
the determination set forth in paragraph (2) by the amount of average
daily attendance included in that figure for excused absences
pursuant to subdivision (b) of Section 46010 as that subdivision read
on July 1, 1996.
   (B) Determine the second principal apportionment average daily
attendance for the 1996-97 fiscal year, including attendance in
necessary small schools and attendance for excused absences pursuant
to subdivision (b) of Section 46010 as it read on July 1, 1996, but
excluding attendance, including attendance for excused absences, in
nonpublic, nonsectarian schools, county-operated special education
programs, and county community schools.
   (C) Determine the second principal apportionment average daily
attendance for the 1996-97 fiscal year, including attendance in
necessary small schools, but excluding attendance in nonpublic,
nonsectarian schools, county-operated special education programs, and
county community schools and for excused absences pursuant to
subdivision (b) of Section 46010 as it read on July 1, 1996.
   (D) Calculate the adjusted revenue limit average daily attendance
by multiplying the average daily attendance figure used to make the
determination set forth in paragraph (2) by the quotient of the
amount determined pursuant to subparagraph (C) divided by the amount
determined pursuant to subparagraph (B).
   (4) Recalculate the 1997-98 fiscal year revenue limit per unit of
average daily attendance to reflect the revision in the 1996-97
revenue limit per unit of average daily attendance determined
pursuant to paragraph (1).
   (b) The calculations made pursuant to paragraphs (1) and (4) of
subdivision (a) shall not be used for apportionment purposes for
either of the fiscal years referred to in those paragraphs or for
adjustments for those years.
   (c) If the governing board of any school district demonstrates to
the satisfaction of the Superintendent of Public Instruction that,
because of extraordinary circumstances beyond the control of the
school district, the amount of absences excused in one or more
district programs in  the 1996-97  fiscal year 
1996-97  pursuant to subdivision (b) of Section 46010 as it
read on July 1, 1996, was significantly lower than it would
ordinarily have been in comparison to the amount of actual attendance
in  the 1996-97  fiscal year  1996-97  ,
the Superintendent of Public Instruction shall make a compensating
adjustment, consistent with the provisions of Section 2 of the
Education Code, in the calculation set forth in this section.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 57.  Section 42238.9 of the Education Code is amended to read:

   42238.9.  (a) The amount per unit of average daily attendance
subtracted pursuant to Section 56712 for revenue limits for pupils in
special classes and centers shall be the district's total revenue
limit for the current fiscal year computed pursuant to Section 42238,
including funds received pursuant to Article 4 (commencing with
Section 42280), but excluding the total amount of funds received
pursuant to Sections 46200 to 46206, inclusive, and Section 45023.4,
as that section read on July 1, 1986, divided by the district's
current year average daily attendance pursuant to Section 42238.5.
The amount per unit of average daily attendance that is excluded in
this calculation for each school district shall be increased for the
1998-99 fiscal year by the quotient for that district of the amount
determined pursuant to subparagraph (B) of paragraph (3) of
subdivision (a) of Section 42238.8 divided by the amount determined
pursuant to subparagraph (C) of paragraph (3) of subdivision (a) of
Section 42238.8.
   (b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 58.  Section 42238.95 of the Education Code is amended to
read:
   42238.95.  (a) The amount per unit of average daily attendance for
pupils in special classes and centers that shall be apportioned to
each county office of education shall be equal to the amount
determined for the district of residence pursuant to Section 42238.9,
increased by the quotient equal to the amount determined pursuant to
paragraph (1) divided by the amount determined pursuant to paragraph
(2). This subdivision only applies to average daily attendance
served by employees of the county office of education.
   (1) Determine the second principal apportionment average daily
attendance for special education for the county office of education
for the 1996-97 fiscal year, including attendance for excused
absences, divided by the corresponding average daily attendance
excluding attendance for excused absences pursuant to subdivision (b)
of Section 46010 as it read on July 1, 1996, reported pursuant to
Section 41601 for the 1996-97 fiscal year.
   (2) Determine the second principal apportionment average daily
attendance for the 1996-97 fiscal year, including attendance for
excused absences, for all of the school districts within the county,
excluding average daily attendance for county office special
education and county community school programs and nonpublic
nonsectarian schools, divided by the corresponding average daily
attendance, excluding attendance for excused absences determined
pursuant to subdivision (b) of Section 46010 as it read on July 1,
1996, and reported pursuant to Section 41601 for the 1996-97 fiscal
year.
   (b) A county office of education shall provide the data required
to perform the calculation specified in paragraph (1) of subdivision
(a) to the Superintendent of Public Instruction in order to be
eligible for the adjustment pursuant to subdivision (a).
   (c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 59.  Section 42238.11 of the Education Code is amended to
read:
   42238.11.  Notwithstanding any other provision of law, for the
1994-95 fiscal year the county superintendent of schools shall reduce
the total revenue limit for each school district in the jurisdiction
of the county superintendent of schools by the amount of the
decreased employer contributions to the Public Employees' Retirement
System resulting from the enactment of Chapter 330 of the Statutes of
1982, adjusted for any changes in those contributions resulting from
subsequent changes in employer contribution rates, excluding rate
changes due to the direct transfer of the state-mandated portion of
the employer contributions to the Public Employees' Retirement
System, through the 1994-95 fiscal year. The reduction shall be
calculated for each school district as follows:
   (a) Determine the amount of employer contributions that would have
been made in the 1994-95 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 were in effect during the 1994-95 fiscal year.
   For purposes of this calculation, no school district shall have a
contribution rate higher than 13.020 percent.
   (b) Subtract from the amount determined in subdivision (a) the
actual amount of employer contributions made to the Public Employees'
Retirement System in the 1994-95 fiscal year.
   (c) For the purposes of this section, employer contributions to
the Public Employees' Retirement System for any of the following
positions shall be excluded from the calculation specified above:
   (1) Positions or portions of positions supported by federal funds
that are subject to supplanting restrictions.
   (2) Positions supported by funds received pursuant to Section
42243.6.
   (3) Positions supported, to the extent of employer contributions
not exceeding twenty-five thousand dollars ($25,000) by any single
educational agency, from a non-General Fund revenue source determined
to be properly excludable from this section by the Superintendent of
Public Instruction with the approval of the Director of Finance.
   (d) For accounting purposes, the reduction made by this provision
may be reflected as an expenditure from appropriate sources of
revenue as directed by the Superintendent of Public Instruction.
   (e) The amount of the reduction made by this section shall not be
adjusted by the deficit factor calculated pursuant to Section
42238.145.
   It is the intent of the Legislature to make adjustments to school
district revenue limits for the 1994-95 fiscal year to reflect
savings that these districts will realize in the contributions to the
Public Employees' Retirement System due to a reduced contribution
rate for the 1994-95 fiscal year.
   This section shall become inoperative on July 1, 2014, and, as of
January 1, 2015, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2015, deletes or extends
the dates on which it becomes inoperative and is repealed.
  SEC. 60.  Section 42238.12 of the Education Code is amended to
read:
   42238.12.  (a) For the 1995-96 fiscal year and each fiscal year
thereafter, the county superintendent of schools shall adjust the
total revenue limit for each school district in the jurisdiction of
the county superintendent of schools by the amount of increased or
decreased employer contributions to the Public Employees' Retirement
System resulting from the enactment of Chapter 330 of the Statutes of
1982, adjusted for any changes in those contributions resulting from
subsequent changes in employer contribution rates, excluding rate
changes due to the direct transfer of the state-mandated portion of
the employer contributions to the Public Employees' Retirement
System, through the current fiscal year. The adjustment shall be
calculated for each school district, as follows:
   (1) (A) Determine the amount of employer contributions that would
have been made in the current fiscal year if the applicable Public
Employees' Retirement System employer contribution rate in effect
immediately before the enactment of Chapter 330 of the Statutes of
1982 were in effect during the current fiscal year.
   (B) For purposes of this calculation, no school district shall
have a contribution rate higher than 13.020 percent.
   (2) Determine the actual amount of employer contributions made to
the Public Employees' Retirement System in the current fiscal year.
   (3) If the amount determined in paragraph (1) for a school
district is greater than the amount determined in paragraph (2), the
total revenue limit computed for that school district shall be
decreased by the amount of the difference between those paragraphs;
or, if the amount determined in paragraph (1) for a school district
is less than the amount determined in paragraph (2), the total
revenue limit for that school district shall be increased by the
amount of the difference between those paragraphs.
   (4) For the purpose of this section, employer contributions to the
Public Employees' Retirement System for any of the following
positions shall be excluded from the calculation specified above:
   (A) Positions or portions of positions supported by federal funds
that are subject to supplanting restrictions.
   (B) Positions supported by funds received pursuant to Section
41540 that are established in order to satisfy court-ordered
desegregation requirements.
   (C) Positions supported, to the extent of employers' contributions
not exceeding twenty-five thousand dollars ($25,000) by any single
educational agency, from a non-General Fund revenue source determined
to be properly excludable from this section by the Superintendent
with the approval of the Director of Finance. Commencing in the
2002-03 fiscal year, only positions supported from a non-General Fund
revenue source determined to be properly excludable as identified
for a particular local educational agency or pursuant to a blanket
waiver by the Superintendent and the Director of Finance, before the
2002-03 fiscal year, may be excluded pursuant to this paragraph.
   (5) For accounting purposes, any reduction to school district
revenue limits made by this provision may be reflected as an
expenditure from appropriate sources of revenue as directed by the
Superintendent.
   (6) The amount of the increase or decrease to the revenue limits
of school districts computed pursuant to paragraph (3) for the
1995-96 to 2002-03 fiscal years, inclusive, may not be adjusted by
the deficit factor applied to the revenue limit of each school
district pursuant to Section 42238.145.
   (7) For the 2003-04 fiscal year and any fiscal year thereafter,
the revenue limit reduction specified in Section 42238.146 may not be
applied to the amount of the increase or decrease to the revenue
limits of school districts computed pursuant to paragraph (3).
   (b) The calculations set forth in paragraphs (1) to (3),
inclusive, of subdivision (a) exclude employer contributions for
employees of charter schools funded pursuant to Article 2 (commencing
with Section 47633) of Chapter 6 of Part 26.8.
   (c) Funding appropriated through the Budget Act of 2001 or
legislation amending the Budget Act of 2001 for the purpose of
limiting the reductions to revenue limits calculated pursuant to this
section and to Section 2558 for the 2001-02 fiscal year shall be
allocated on a one-time basis in the following manner:
   (1) Each school district and county office of education subject to
a reduced apportionment pursuant to this section or to Section 2558
shall receive a share of the amount described in paragraph (3) that
is proportionate to the reduction in their apportionment pursuant to
this section or to Section 2558 for the 2001-02 fiscal year as
compared to the statewide total reduction that would occur absent
this paragraph.
   (2) For the 2001-02 fiscal year, instead of the alternative
calculation authorized by paragraph (1),  the  San Francisco
Unified School District shall receive an amount equal to five
dollars and  57   fifty-seven  cents
($5.57) multiplied by its second principal apportionment average
daily attendance for the 2001-02 fiscal year.
   (3) Notwithstanding any other law, total allocations pursuant to
this subdivision may not exceed thirty-five million dollars
($35,000,000).
   (d) Thirty-five million dollars ($35,000,000) is hereby
appropriated from the General Fund for transfer to Section A of the
State School Fund for local assistance for the purpose of limiting
the reductions to revenue limits calculated pursuant to this section
and to Section 2558 for the 2003-04 fiscal year. Funding from this
appropriation shall be allocated in the following manner:
   (1) Each school district and county office of education subject to
a reduced apportionment pursuant to this section or to Section 2558
shall receive a share of the amount appropriated in this subdivision
that is proportionate to the reduction in their apportionment
pursuant to this section or to Section 2558 for the 2003-04 fiscal
year as compared to the statewide total reduction that would occur
absent this paragraph.
   (2) For the 2003-04 fiscal year, instead of the alternative
calculation authorized by paragraph (1), the San Francisco Unified
School District shall receive an amount equal to five dollars and
 57   fifty-seven  cents ($5.57) multiplied
by its second principal apportionment average daily attendance for
the 2003-04 fiscal year.
   (3) Notwithstanding any other law, total allocations pursuant to
this subdivision may not exceed thirty-five million dollars
($35,000,000) for the 2003-04 fiscal year.
   (4) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, the
appropriation made by this section shall be deemed to be "General
Fund revenues appropriated for school districts," as defined in
subdivision (c) of Section 41202, for the 2003-04 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, for the 2003-04 fiscal year.
   (e) For the 2004-05 fiscal year, and each fiscal year thereafter,
apportionment reductions pursuant to this section and to Section 2558
shall be limited as follows:
   (1) Each school district and county office of education subject to
a reduced apportionment pursuant to this section or to Section 2558
shall receive a share of the amount described in paragraph (3) that
is proportionate to the reduction in their apportionment pursuant to
this section or to Section 2558 for the 2004-05 fiscal year as
compared to the statewide total reduction as would occur absent this
paragraph.
   (2) Instead of the alternative calculation authorized by paragraph
(1), the San Francisco Unified School District shall receive funding
equal to the amount of funding per unit of average daily attendance
specified in paragraph (2) of subdivision (c) as increased annually
by cost-of-living adjustments specified in Section 42238.1,
multiplied by its second principal apportionment average daily
attendance for that fiscal year.
   (3) Notwithstanding any other law, total limitations pursuant to
this subdivision may not annually exceed thirty-five million dollars
($35,000,000) as annually increased by the cost-of-living adjustments
specified in Section 42238.1, multiplied by the annual statewide
percentage growth in total average daily attendance, measured at the
second principal apportionment.
   (f) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 61.  Section 42238.13 of the Education Code is amended to
read:
   42238.13.  (a) Notwithstanding any other provision of law, for any
elementary school district that meets all of the criteria specified
in subdivision (b), the base revenue limit for the 1988-89 fiscal
year and each subsequent fiscal year computed pursuant to Section
42238 shall be computed as though the 1987-88 base revenue limit per
unit of average daily attendance was two thousand nine hundred
sixty-five dollars ($2,965). The county superintendent shall compute
the revenue limit on that basis.
   (b) The revenue limit computation described in subdivision (a)
shall apply to any elementary school district that meets all of the
following criteria:
   (1) The minority enrollment in the district in the 1987-88 school
year was greater than 98 percent.
   (2) The AFDC enrollment in the district in the 1987-88 school year
was greater than 32 percent.
   (3) The district ranked in all of the following categories in the
1986-87 California Assessment Program as follows:
   (A) Lowest 3 percent for third grade reading.
   (B) Lowest 2 percent for sixth grade reading.
   (C) Lowest 1 percent for eighth grade reading.
   (D) Lowest 1 percent for sixth grade mathematics.
   (E) Lowest 1 percent for eighth grade mathematics.
   (F) Lowest 1 percent for history/social science.
   (G) Lowest 1 percent for science.
   (4) The district's 1987-88 base revenue limit was 2 percent below
the statewide average for elementary districts and 7 percent below
the county average for elementary districts.
   (5) The district is under a court order as of the effective date
of this act.
   (c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 62.  Section 42238.14 of the Education Code is amended to
read:
   42238.14.  (a) For the purposes of this article, the revenue limit
for the 1993-94 fiscal year for each school district determined
pursuant to this article and adjusted pursuant to Section 42238.16
shall be reduced by  a   an  8.14 percent
deficit factor.
   (b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 63.  Section 42238.145 of the Education Code is amended to
read:
   42238.145.  For the purposes of this article, the revenue limit
for each school district shall be reduced by a deficit factor, as
follows:
   (a) (1) For the 1994-95 fiscal year, the revenue limit for each
school district determined pursuant to this article shall be reduced
by an 11.01 percent deficit factor.
   (2) For the 1995-96 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
10.12 percent deficit factor.
   (3) For the 1996-97 and 1997-98 fiscal years, the revenue limit
for each school district determined pursuant to this article shall be
reduced by a 9.967 percent deficit factor, as adjusted pursuant to
Section 42238.42.
   (4) For the 1999-2000 fiscal year, the revenue limit for each
school district determined pursuant to this article shall be reduced
by a 6.996 percent deficit factor.
   (b) (1) The revenue limit for the 1994-95 fiscal year for each
school district shall be determined as if the revenue limit for each
school district had been determined for the 1993-94 fiscal year
without being reduced by the deficit factor required pursuant to
Section 42238.14.
   (2) When computing the revenue limit for each school district for
the 1995-96 or any subsequent 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 previous fiscal year
without being reduced by the deficit factor specified in this
section.
   This section shall become inoperative on July 1, 2014, and, as of
January 1, 2015, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2015, deletes or extends
the dates on which it becomes inoperative and is repealed.
  SEC. 64.  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.
   (5) For the 2008-09 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
7.844 percent deficit factor.
   (6) For the 2009-10 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by
 a   an  18.355 percent deficit factor.
   (7) For the 2010-11 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
17.963 percent deficit factor.
   (8) For the 2011-12 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
20.404 percent deficit factor.
   (9) For the 2012-13 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
22.272 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
subdivision (a).
   (c) In computing the revenue limit for each school district for
the 2010-11 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 2009-10 fiscal year without being reduced
by the deficit factors specified in subdivision (a).
   (d) In computing the revenue limit for each
                      school district for the 2011-12 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 2010-11 fiscal year without being reduced by the deficit factors
specified in subdivision (a).
   (e) In computing the revenue limit for each school district for
the 2012-13 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 2011-12 fiscal year without being reduced
by the deficit factors specified in subdivision (a).
   (f) In computing the revenue limit for each school district for
the 2013-14 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 2012-13 fiscal year without being reduced
by the deficit factors specified in subdivision (a).
   (g) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 65.  Section 42238.17 of the Education Code is amended to
read:
   42238.17.  Notwithstanding any other provision of law, for any
school district that was reorganized effective July 1, 1992, as a
unified school district and that is congruent to a school district
that was reorganized as an elementary school district effective July
1, 1990, the Superintendent  of Public Instruction 
shall compute apportionments using the following data:
   (a) For the purposes of paragraph (1) of subdivision (d) of
Section 42238 for the 1990-91 and 1991-92 fiscal years, the
superintendent shall use the actual number of units of average daily
attendance for the 1990-91 fiscal year second principal
apportionments.
   (b) For the purposes of paragraph (1) of subdivision (d) of
Section 42238, for the 1992-93 fiscal year and each fiscal year
thereafter, the superintendent shall use the actual number of units
of average daily attendance for the 1992-93 fiscal year second
principal apportionment.
   This section shall become inoperative on July 1, 2014, and, as of
January 1, 2015, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2015, deletes or extends
the dates on which it becomes inoperative and is repealed.
  SEC. 66.  Section 42238.18 of the Education Code is amended to
read:
   42238.18.  (a) Notwithstanding any other provision of law, only
those pupils enrolled in county office of education programs while
detained in a juvenile hall, juvenile home, day center, juvenile
ranch, juvenile camp, or regional youth educational facility
established pursuant to Article 23 (commencing with Section 850),
Article 24 (commencing with Section 880), and Article 24.5
(commencing with Section 894) of Chapter 2 of Part 1 of Division 2 of
the Welfare and Institutions Code shall be counted as juvenile court
school pupils. For purposes of apportionments, those pupils in a
group home housing 25 or more children placed pursuant to Sections
362, 727, and 730 of the Welfare and Institutions Code or in any
group home housing 25 or more children and operating one or more
additional sites under a central administration for children placed
pursuant to Section 362, 727, or 730 of the Welfare and Institutions
Code shall be reported as county group home and institutions pupils
to the Superintendent and shall be counted as juvenile court school
pupils for purposes of apportionments.
   (b) Notwithstanding any other provision of law, any county
superintendent of schools operating juvenile court schools, county
group home and institutions schools, or community schools, or any
combination of these schools shall maintain an account in their
general fund to be known as the juvenile court and community school
account, and shall deposit all funds derived from the operation of
juvenile court, county group home and institutions schools, and
community schools into that account. Expenditures from the juvenile
court and community school account shall be limited to the following:

   (1) Those expenditures defined as direct costs of instructional
programs by the California State School Accounting Manual, except
that facility costs, including the costs of renting, leasing,
purchasing, remodeling, constructing, or improving buildings and the
costs of purchasing or improving land, shall be allowed as an
instructional cost in the juvenile court and community school fund.
Deferred maintenance contributions made pursuant to Section 17584 may
also be allowed as an instructional cost of juvenile court and
county community school programs, provided the contribution does not
exceed the program's proportionate share of total county school
service fund expenditures as defined in Section 17584, and provided
the funds are used for deferred maintenance of juvenile court and
county community school facilities.
   (2) Expenditures that are defined as documented direct support
costs by the California State School Accounting Manual.
   (3) Expenditures that are defined as allocated direct support
costs by the California State School Accounting Manual.
   (4) Other expenditures for support and indirect charges. However,
these charges may not exceed 10 percent of the sum of the
expenditures in paragraphs (1), (2), and (3).
   Expenditures that represent contract payments to other agencies
for the operation of juvenile court and community school programs
shall be included in the juvenile court and community school account
and the contract costs distributed to the cost categories defined in
paragraphs (1), (2), (3), and (4). At the end of any given school
year the net ending balance in the juvenile court and community
school account may be distributed to a reserved account for economic
contingencies or to a reserved account for capital outlay, provided
that the combined total transferred does not exceed 15 percent of the
current year's authorized expenditures as specified above and also
provided that funds placed in the reserved accounts shall only be
expended for juvenile court, county group home and institutions, or
community school programs. The net ending balance, except for those
funds placed in a capital outlay fund, shall not exceed the greater
of 15 percent of the previous year's expenditures or twenty-five
thousand dollars ($25,000). A county may accumulate over a period of
two or more given school years a net ending balance in the capital
outlay reserved account of more than 15 percent of the current fiscal
year's expenditures under provisions of a resolution of the
governing board. Funds in the capital outlay reserve are to be used
for capital outlay only. The Superintendent shall require an annual
certification by county superintendents of schools beginning in the
1989-90 fiscal year that juvenile court, county group home and
institutions, and community school funds have been expended as
provided in this section and shall withhold from the subsequent year'
s apportionment an amount equal to any excess ending balance or
excess transfers, as provided in this subdivision, in the juvenile
court and community school account.
   (c) Notwithstanding any other provision of law, pupils who are
referred by the county probation department under Section 601 or 654
of the Welfare and Institutions Code, shall be enrolled and eligible
for apportionments in county community schools only after an
individualized review and certification of the appropriateness of
enrollment in the county group home and institution's school or
county community school. The individualized review shall include
representatives of the court, the county department of education, the
county probation department, and either the school district of
residence or, in cases in which the pupil resides in a group home or
institution, the school district in which the group home or
institution is located, and, in each case, the school district
representative shall agree to the appropriateness of the proposed
placement and pupils so placed shall have a probation officer
assigned to their case.
   (d) Regardless of the operative date of the amendments to this
section made during the 1997 portion of the 1997-98 Regular Session,
this section, as so amended, shall be implemented as though it had
been operative on July 1, 1996. For the purpose of implementing this
section for the entire 1996-97 fiscal year, the Superintendent and
other public officers shall take all necessary steps to effect the
required adjustments and shall have authority to adjust allowance
computations, apportionments, and disbursements ordered from Section
A of the State School Fund and other public funds.
   (e) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 67.  Section 42239 of the Education Code is amended to read:
   42239.  (a) For each fiscal year the Superintendent  of
Public Instruction  shall compute funding for supplemental
instruction for each school district or charter school by multiplying
the number of pupil hours of supplemental instruction claimed
pursuant to Sections 37252 and 37252.2 by the pupil hour allowance
specified in subdivision (b) or by a pupil hour allowance specified
in the annual Budget Act in lieu of the amount computed in
subdivision (b).
   (b) Hours of supplemental instruction shall be reimbursed at a
rate of three dollars and fifty-three cents ($3.53) per pupil hour,
adjusted in the 2005-06 fiscal year and subsequent fiscal years as
specified in this section, provided that a different reimbursement
rate may be specified for each fiscal year in the annual Budget Act
that appropriates funding for that fiscal year. This amount shall be
increased annually by the percentage increase pursuant to subdivision
(b) of Section 42238.1 granted to school districts or charter
schools for base revenue limit cost-of-living increases.
   (c) (1) If appropriated funding is insufficient to pay all claims
made in any fiscal year pursuant to Sections 37252 and 37252.2, the
superintendent shall use any available funding appropriated for the
purposes of reimbursing school districts pursuant to Section 37252 or
37252.2.
   (2) If appropriated funding is still insufficient to pay all
claims made in any fiscal year pursuant to Section 37252 or 37252.2,
the superintendent shall use any available funding appropriated for
the purposes of reimbursing school districts for supplemental
instruction in the prior fiscal year.
   (3) If appropriated funding is still insufficient to pay all
claims made in any fiscal year pursuant to Section 37252 or 37252.2,
the superintendent shall use any available funding appropriated for
the purposes of reimbursing school districts for supplemental
instruction in the current fiscal year.
   (4) The superintendent shall notify the Director of Finance that
there is an insufficiency of funding appropriated for the purposes of
Sections 37252 and 37252.2 only after the superintendent has
exhausted all available balances of appropriations made for the
current or prior fiscal years for the reimbursement of school
districts for supplemental instruction.
   (d) Notwithstanding any other provision of law, neither the State
Board of Education nor the Superintendent of Public Instruction may
waive any provision of this section.
   (e) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 68.  Section 42240.1 of the Education Code is amended to read:

   42240.1.  (a) Any elementary school district with less than 2,501
units of average daily attendance in grades kindergarten to 6,
inclusive, for the second principal apportionment in the 1978-79
fiscal year, whose 7th and 8th grade pupils were being educated by a
high school district pursuant to Article 5 (commencing with Section
37060) of Chapter 1 of Part 22 during the 1978-79 fiscal year, shall
be entitled to the revenue limit adjustment computed pursuant to
Section 42240 beginning with the 1981-82 fiscal year.
   (b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 69.  Section 42241.3 of the Education Code is amended to read:

   42241.3.  (a) This section applies only to the funding generated
by the average daily attendance of pupils attending a charter school
that has operated as a charter school since prior to July 1, 2005, if
a unified school district has been the sponsoring local educational
agency as defined in subdivision (i) of Section 47632, and if the
unified school district was governed by Section 47660 as that section
read on December 31, 2005.
   (b) For the 2005-06 fiscal year only, the revenue limit funding of
a unified school district, other than a unified school district that
has converted all of its schools to charter status pursuant to
Section 47606 and is operating them as charter schools, shall be
increased or decreased to reflect  half  
one-half  of the difference between the funding provided for the
base revenue limit per unit of average daily attendance of the
unified school district as set forth in Section 42238 and the
general-purpose entitlement per unit of average daily attendance of
the charter school as set forth in Section 47633.
   (c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 70.  Section 42241.7 of the Education Code is amended to read:

   42241.7.  (a) For the 1978-79 fiscal year, and each fiscal year
thereafter, the revenue limit of any elementary, high, or unified
school district authorized pursuant to Sections 42237 and 42238 may
be increased by an amount sufficient to provide additional revenue
equal to the expenditures estimated to be incurred by the district in
the budget year in complying with the following provisions of the
Unemployment Insurance Code: Sections 605 and 803, Article 6
(commencing with Section 821) of Chapter 3 of Part 1 of Division 1,
or Article 3 (commencing with Section 976) of Chapter 4 of Part 1 of
Division 1, less the actual expenditures incurred by the district in
the 1975-76 fiscal year in complying with the following provisions of
the Unemployment Insurance Code: Section 605.2 and Article 6
(commencing with Section 821) of Chapter 3 of Part 1 of Division 1.
   (b) If, at the end of any fiscal year, the actual expenditures of
the district specified in subdivision (a) are less than the revenue
derived from the increase in revenue limit provided in subdivision
(a) for that fiscal year, the difference shall be used in the
following fiscal year exclusively for expenditures required pursuant
to the Unemployment Insurance Code provisions specified in
subdivision (a).
   (c) If, at the end of any fiscal year, the actual expenditures of
the district specified in subdivision (a) exceed the revenue derived
from the increase in revenue limit provided in subdivision (a) for
that fiscal year, the difference may be added to the increase in
revenue limit, authorized pursuant to this section, in the following
fiscal year.
   (d) (1) For the 1994-95 to 2002-03 fiscal years, inclusive, the
adjustment computed pursuant to this section shall not be adjusted by
the deficit factor applied to the revenue limit of each school
district pursuant to Section 42238.145.
   (2) For the 2003-04 fiscal year and each fiscal year thereafter,
the revenue limit reduction specified in Section 42238.146 may not be
applied to the adjustment computed pursuant to this section.
   (e) Expenditures for employees of charter schools funded pursuant
to Article 2 (commencing with Section 47633) of Chapter 6 of Part
26.8 are excluded from the calculations set forth in this section.
   (f) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 71.  Section 42243.7 of the Education Code is amended to read:

   42243.7.  (a) For any school district that commenced operations on
or after June 30, 1978, or for any school district that receives
approval from the department for a new continuation education high
school for the 1979-80 fiscal year, or any fiscal year thereafter,
the Superintendent of Public Instruction shall compute an adjustment
to the district revenue limit pursuant to this section.
   (b) Determine the amount of foundation program that the district
would have been entitled to pursuant to subdivision (a) of Section
41711, as that section read on July 1, 1977, if the district had
operated during the 1977-78 fiscal year, utilizing the number of
units of average daily attendance attending high school in the
district in the fiscal year for which the revenue limit is being
computed.
   (c) Determine the amount of foundation program that the district
would have been entitled to pursuant to paragraph (1) of subdivision
(b) of Section 41711, as that section read on July 1, 1977, if the
district had operated during the 1977-78 fiscal year, utilizing the
same number of units of average daily attendance used in subdivision
(b) of this section.
   (d) Subtract the amount determined pursuant to subdivision (c)
from the amount computed pursuant to subdivision (b).
   (e) The amount computed pursuant to subdivision (d), if greater
than zero, shall be added to the revenue limit computed pursuant to
subdivision (c) of Section 42237 or pursuant to Section 42238. If the
amount in subdivision (d) is less than zero there is no adjustment.
   (f) The Superintendent of Public Instruction shall reduce by the
amount computed pursuant to subdivision (e) the revenue limit
computed pursuant to Section 42238 of any district discontinuing the
operation of a continuation education school approved pursuant to
subdivision (a).
   (g) (1) For the 1994-95 to 2002-03 fiscal years, inclusive, the
adjustment computed pursuant to this section may not be adjusted by
the deficit factor applied to the revenue limit of each school
district pursuant to Section 42238.145.
   (2) For the 2003-04 fiscal year and each fiscal year thereafter,
the revenue limit reduction specified in Section 42238.146 may not be
applied to the adjustment computed pursuant to this section.
   (h) The adjustment computed pursuant to this section for a new
continuation education high school may be applicable for any unified
school district that was not fully operational during the first year
of operation of the continuation education high school. The number of
units of average daily attendance to be used in computing the
adjustment shall be the number of units of average daily attendance
generated by the continuation education high school in the district
for the first year that the district is fully operational in all
grades.
   (i) In the 1998-99 fiscal year and each fiscal year thereafter,
the ranges of average daily attendance resulting from the calculation
set forth in this section pursuant to Section 41711, as that section
read on July 1, 1977, shall be reduced by the statewide average
percentage that absences excused pursuant to subdivision (b) of
Section 46010, as that section read on July 1, 1996, were of total
second principal apportionment regular average daily attendance for
high schools in 1996-97, with the reduced ranges then rounded to the
nearest integer.
   (j) Commencing with the 2005-06 fiscal year and notwithstanding
any provision of law, the amount of the adjustment calculated
pursuant to this section shall not be added to the revenue limit of a
school district, but shall be used in determining the amount of the
pupil retention block grant awarded a school district pursuant to
Article 1 (commencing with Section 41500) of Chapter 3.2.
   (k) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 72.  Section 46201.2 of the Education Code is amended to read:

   46201.2.  (a) Commencing with the 2009-10 school year and
continuing through the 2013-14 school year, a school district, county
office of education, or charter school may reduce the equivalent of
up to five days of instruction or the equivalent number of
instructional minutes without incurring the penalties set forth in
Sections 41420, 46200, 46200.5, 46201, 46201.5, 46202, and 47612.5. A
school district, county office of education, or charter school shall
receive revenue limit funding based on the adjustments prescribed
pursuant to Section 42238.146 whether or not it reduces the number of
schooldays or instructional minutes.
   (b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 73.  Section 46201.2 is added to the Education Code, to read:
   46201.2.  (a) Commencing with the 2009-10 school year and
continuing through the 2013-14 school year, a school district, county
office of education, or charter school may reduce the equivalent of
up to five days of instruction or the equivalent number of
instructional minutes without incurring the penalties set forth in
Sections 41420, 46200, 46200.5, 46201, 46201.5, 46202, and 47612.5,
as those sections read on January 1, 2014. A school district, county
office of education, or charter school shall receive revenue limit
funding based on the adjustments prescribed pursuant to Section
42238.146, as it read on January 1, 2014, whether or not it reduces
the number of schooldays or instructional minutes.
   (b) For the 2014-15 school year, a school district, county office
of education, or charter school may reduce the equivalent of up to
five days of instruction or the equivalent number of instructional
minutes without incurring the penalties set forth in Sections 41420,
46200, 46200.5, 46201, 46201.5, 46202, and 47612.5.
   (c) This section shall become operative on July 1, 2014.
   (d) This section shall become inoperative on July 1, 2015, and, as
of January 1, 2016, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2016, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 74.  Section 47604.33 of the Education Code is amended to
read:
   47604.33.  (a) Each charter school shall annually prepare and
submit the following reports to its chartering authority and the
county superintendent of schools, or only to the county
superintendent of schools if the county board of education is the
chartering authority:
   (1) On or before July 1, a preliminary budget. For a charter
school in its first year of operation, the information submitted
pursuant to subdivision (g) of Section 47605 satisfies this
requirement.
   (2) On or before December 15, an interim financial report. This
report shall reflect changes through October 31.
   (3) On or before March 15, a second interim financial report. This
report shall reflect changes through January 31.
   (4) On or before September 15, a final unaudited report for the
full prior year.
   (b) The chartering authority shall use any financial information
it obtains from the charter school, including, but not limited to,
the reports required by this section, to assess the fiscal condition
of the charter school pursuant to subdivision (d) of Section
47604.32.
   (c) The cost of performing the duties required by this section
shall be funded with supervisorial oversight fees collected pursuant
to Section 47613.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 75.  Section 47604.33 is added to the Education Code, to read:

   47604.33.  (a) Each charter school shall annually prepare and
submit the following reports to its chartering authority and the
county superintendent of schools, or only to the county
superintendent of schools if the county board of education is the
chartering authority:
   (1) On or before July 1, a preliminary budget and a local control
and accountability plan adopted pursuant to Section 52065. For a
charter school in its first year of operation, the information
submitted pursuant to subdivision (g) of Section 47605 satisfies this
requirement.
   (2) On or before December 15, an interim financial report. This
report shall reflect changes through October 31.
   (3) On or before March 15, a second interim financial report. This
report shall reflect changes through January 31.
   (4) On or before September 15, a final unaudited report for the
full prior year.
   (b) The chartering authority shall use any financial information
it obtains from the charter school, including, but not limited to,
the reports required by this section, to assess the fiscal condition
of the charter school pursuant to subdivision (d) of Section
47604.32.
   (c) The cost of performing the duties required by this section
shall be funded with supervisorial oversight fees collected pursuant
to Section 47613.
   (d) This section shall become operative on July 1, 2014.
  SEC. 76.  Section 47610 of the Education Code is amended to read:
   47610.  A charter school shall comply with this part and all of
the provisions set forth in its charter, but is otherwise exempt from
the laws governing school districts, except all of the following:
   (a) As specified in Section 47611.
   (b) As specified in Section 41365.
   (c) All laws establishing minimum age for public school
attendance.
   (d) The California Building Standards Code (Part 2 (commencing
with Section 101) of Title 24 of the California Code of Regulations),
as adopted and enforced by the local building enforcement agency
with                                                   jurisdiction
over the area in which the charter school is located.
   (e) Charter school facilities shall comply with subdivision (d) by
January 1, 2007.
   This section shall become inoperative on July 1, 2014, and, as of
January 1, 2015, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2015, deletes or extends
the dates on which it becomes inoperative and is repealed.
  SEC. 77.  Section 47610 is added to the Education Code, to read:
   47610.  (a) A charter school shall comply with this part and all
of the provisions set forth in its charter, but is otherwise exempt
from the laws governing school districts, except all of the
following:
   (1) As specified in Section 47611.
   (2) As specified in Section 41365.
   (3) As specified in Section 52065.
   (4) All laws establishing minimum age for public school
attendance.
   (5) The California Building Standards Code (Part 2 (commencing
with Section 101) of Title 24 of the California Code of Regulations),
as adopted and enforced by the local building enforcement agency
with jurisdiction over the area in which the charter school is
located.
   (6) Charter school facilities shall comply with paragraph (5) of
subdivision (a) by January 1, 2007.
   (b) This section shall become operative on July 1, 2014.
  SEC. 78.  Section 47630.5 of the Education Code is amended to read:

   47630.5.  (a) This chapter applies to the calculation of
operational funding for charter schools. Except as otherwise provided
in this chapter, this chapter shall apply to all charter schools
without regard to their sponsoring local education agency.
   (b) For the 1999-2000, 2000-01, and 2001-02 fiscal years in the
case of a charter school that was assigned a number by the State
Board of Education prior to June 1, 1999, the use of the charter
school funding method established by this chapter shall be at the
discretion of that charter school. A charter school that elects to
have its funding determined pursuant to the method established by
this chapter shall notify the State Department of Education by June 1
prior to the affected fiscal year. An election to be funded pursuant
to the method established by this chapter is irrevocable.
   (c) Additional legal or fiscal responsibilities on the part of a
county superintendent of schools are not imposed by this chapter,
except as specifically provided in this chapter.
   (d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 79.  Section 47631 of the Education Code is amended to read:
   47631.  (a) Article 2 (commencing with Section 47633) and Article
3 (commencing with Section 47636) may not apply to a charter granted
pursuant to Section 47605.5.
   (b) Notwithstanding subdivision (a), a pupil attending a
county-sponsored charter school who is eligible to attend that school
solely as a result of parental request pursuant to subdivision (b)
of Section 1981 shall be funded pursuant to this chapter.
   (c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 80.  Section 47631 is added to the Education Code, to read:
   47631.  (a) Article 3 (commencing with Section 47636) shall not
apply to a charter granted pursuant to Section 47605.5.
   (b) Notwithstanding subdivision (a), a pupil attending a
county-sponsored charter school who is eligible to attend that school
solely as a result of parental request pursuant to subdivision (b)
of Section 1981 shall be funded pursuant to the local control funding
formula pursuant to Section 42238.02, as implemented by Section
42238.03.
   (c) This section shall become operative on July 1, 2014.
  SEC. 81.  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.
   (k) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 82.  Section 47632 is added to the Education Code, to read:
   47632.  (a) For purposes of this chapter, the following terms
shall be defined as follows:
   (1) "General-purpose entitlement" means an amount computed by the
local control funding formula pursuant to Section 42238.02, as
implemented by Section 42238.03.
   (2) "General-purpose funding" means those funds that consist of
state aid, local property taxes, and other revenues applied toward a
school district's local control funding formula, pursuant to Section
42238.02, as implemented by Section 42238.03.
   (3) "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.
   (4) "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.
   (5) "Operational funding" means all funding except funding for
capital outlay.
   (6) "School district of a similar type" means a school district
that is serving similar grade levels.
   (7) "Similar pupil population" means similar numbers of pupils by
grade level, with a similar proportion of educationally disadvantaged
pupils.
   (8) "Sponsoring local educational agency" means the following:
   (A) If a charter school is granted by a school district, the
sponsoring local educational agency is the school district.
   (B) 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.
   (C) 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.

   (D) 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.
   (E) 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 as described in subdivision  (n)
  (m)  of Section 42238.02.
   (b) This section shall become operative on July 1, 2014.
  SEC. 83.  Section 47633 of the Education Code is amended to read:
   47633.  The Superintendent shall annually compute a
general-purpose entitlement, funded from a combination of state aid
and local funds, for each charter school as follows:
   (a) The Superintendent shall annually compute the statewide
average amount of general-purpose funding per unit of average daily
attendance received by school districts for each of four 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. For purposes of
making these computations, both of the following conditions shall
apply:
   (1) Revenue limit funding attributable to pupils in kindergarten
and grades 1 to 5, inclusive, shall equal the statewide average
revenue limit funding per unit of average daily attendance received
by elementary school districts; revenue limit funding attributable to
pupils in grades 6, 7, and 8, shall equal the statewide average
revenue limit funding per unit of average daily attendance received
by unified school districts; and revenue limit funding attributable
to pupils in grades 9 to 12, inclusive, shall equal the statewide
average revenue limit funding per unit of average daily attendance
received by high school districts.
   (2) Revenue limit funding received by school districts shall
exclude the value of any benefit attributable to the presence of
necessary small schools or necessary small high schools within the
school district.
   (b) The Superintendent shall multiply each of the four amounts
computed in subdivision (a) by the charter school's average daily
attendance in the corresponding grade level ranges. The resulting
figure shall be the amount of the charter school's general-purpose
entitlement, which shall be funded through a combination of state aid
and local funds. From funds appropriated for this purpose pursuant
to Section 14002, the  superintendent  
Superintendent  shall apportion to each charter school this
amount, less local funds allocated to the charter school pursuant to
Section 47635 and any amount received pursuant to subparagraph (B) of
paragraph (3) of subdivision (e) of Section 36 of Article XIII of
the California Constitution.
   (c) General-purpose entitlement funding may be used for any public
school purpose determined by the governing body of the charter
school.
   This section shall become inoperative on July 1, 2014, and, as of
January 1, 2015, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2015, deletes or extends
the dates on which it becomes inoperative and is repealed.
  SEC. 84.  Section 47634.1 of the Education Code, as added by
Section 24 of Chapter 2 of the Fourth Extraordinary Session of the
Statutes of 2009, 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, shall 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, shall 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, shall 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.
   (g) This section shall become operative on July 1, 2013.
   (h) On or after July 1, 2014, this section shall become
inoperative if the categorical programs funded through the
categorical block grant described in this section are instead
included within, or funded by, the local control funding formula
pursuant to Section 42238.02, as implemented by Section 42238.03.
   SEC. 85.    Section 49085 of the   Education
Code   is amended to read: 
   49085.   (a)    The department  shall
ensure that the California School Information Services system meets
the needs of pupils in foster care and includes disaggregated data on
pupils in foster care.   and the State Department of
Social Services shall develop and enter into a memorandum of
understanding that shall, at a minimum, require the State Department
of So   cial Services, at least once per week, to share with
the department both of the following:  
   (1) Disaggregated information on children and youth in foster care
sufficient for the department to identify pupils in foster care.
 
   (2) Disaggregated data on children and youth in foster care that
is helpful to county offices of education and other local educational
agencies responsible for ensuring that pupils in foster care
received appropriate educational supports and services.  
   (b) To the extent allowable under federal law, the department
shall regularly identify pupils in foster care and designate those
pupils in the California Longitudinal Pupil Achievement Data System
or any future data system used by the department to collect
disaggregated pupil outcome data.  
   (c) To the extent allowable under federal law, the Superintendent,
on or before February 15 of each even-numbered year, shall report to
the Legislature and the Governor on the educational outcomes for
pupils in foster care at both the individual schoolsite level and
school district level. The report shall include, but is not limited
to, all of the following:  
   (1) Individual schoolsite level and school district level
educational outcome data for each local educational agency that
enrolls at least 15 pupils in foster care, each county in which at
least 15 pupils in foster care attend school, and for the entire
state.  
   (2) The number of pupils in foster care statewide and by each
local educational agency.  
   (3) The academic achievement of pupils in foster care.  
   (4) The incidence of suspension and expulsion for pupils in foster
care.  
   (5) Truancy rates, attendance rates, and dropout rates for pupils
in foster care.  
   (d) To the extent allowable under federal law, the department, at
least once per week, shall do all of the following:  
   (1) Inform school districts and charter schools of any pupils
enrolled in those school districts or charter schools who are in
foster care.  
   (2) Inform county offices of education of any pupils enrolled in
schools in the county who are in foster care.  
   (3) Provide schools districts, county office of education, and
charter schools disaggregated data helpful to ensuring pupils in
foster care receive appropriate educational supports and services.
 
   (e) For purposes of this section "pupil in foster care" means a
pupil who is under the jurisdiction of the juvenile court pursuant to
Section 300, 601, or 602 of the Welfare and Institutions Code. 

   SEC. 86.    Section 52052 of the   Education
Code   is amended to read: 
   52052.  (a) (1) The Superintendent, with approval of the state
board, shall develop an Academic Performance Index (API), to measure
the performance of schools, especially the academic performance of
pupils.
   (2) A school shall demonstrate comparable improvement in academic
achievement as measured by the API by all numerically significant
pupil subgroups at the school, including:
   (A) Ethnic subgroups.
   (B) Socioeconomically disadvantaged pupils.
   (C) English learners.
   (D) Pupils with disabilities. 
   (E) Pupils in foster care. 
   (3) (A) For purposes of this section,  except as specified in
subparagraph (B), (C), or (D),  a numerically significant pupil
subgroup is one that meets both of the following criteria:
   (i) The subgroup consists of at least  50  
30  pupils each of whom has a valid test score.
   (ii) The subgroup constitutes at least 15 percent of the total
population of pupils at a school who have valid test scores.
   (B) If a subgroup does not constitute 15 percent of the total
population of pupils at a school who have valid test scores, the
subgroup may constitute a numerically significant pupil subgroup if
it has at least 100 valid test scores. 
   (C) For a subgroup of pupils in foster care, a numerically
significant pupil subgroup is a subgroup that consists of at least 15
pupils in foster care. For purposes of this sections "pupil in
foster care" means a pupil who is under the jurisdiction of the
juvenile court pursuant to Section 300, 601, or 602 of the Welfare
and Institutions Code.  
   (C) 
    (D)  For a school with an API score that is based on no
fewer than 11 and no more than 99 pupils with valid test scores,
numerically significant pupil subgroups shall be defined by the
Superintendent, with approval by the state board.
   (4) (A) The API shall consist of a variety of indicators currently
reported to the department, including, but not limited to, the
results of the achievement test administered pursuant to Section
60640, attendance rates for pupils in elementary schools, middle
schools, and secondary schools, and the graduation rates for pupils
in secondary schools.
   (B) The Superintendent, with the approval of the state board, may
also incorporate into the API the rates at which pupils successfully
promote from one grade to the next in middle school and high school,
and successfully matriculate from middle school to high school.
   (C) Graduation rates for pupils in secondary schools shall be
calculated for the API as follows:
   (i) Four-year graduation rates shall be calculated by taking the
number of pupils who graduated on time for the current school year,
which is considered to be three school years after the pupils entered
grade 9 for the first time, and dividing that number by the total
calculated in clause (ii).
   (ii) The number of pupils entering grade 9 for the first time in
the school year three school years before the current school year,
plus the number of pupils who transferred into the class graduating
at                                           the end of the current
school year between the school year that was three school years
before the current school year and the date of graduation, less the
number of pupils who transferred out of the school between the school
year that was three school years before the current school year and
the date of graduation who were members of the class that is
graduating at the end of the current school year.
   (iii) Five-year graduation rates shall be calculated by taking the
number of pupils who graduated on time for the current school year,
which is considered to be four school years after the pupils entered
grade 9 for the first time, and dividing that number by the total
calculated in clause (iv).
   (iv) The number of pupils entering grade 9 for the first time in
the school year four years before the current school year, plus the
number of pupils who transferred into the class graduating at the end
of the current school year between the school year that was four
school years before the current school year and the date of
graduation, less the number of pupils who transferred out of the
school between the school year that was four years before the current
school year and the date of graduation who were members of the class
that is graduating at the end of the current school year.
   (v) Six-year graduation rates shall be calculated by taking the
number of pupils who graduated on time for the current school year,
which is considered to be five school years after the pupils entered
grade 9 for the first time, and dividing that number by the total
calculated in clause (vi).
   (vi) The number of pupils entering grade 9 for the first time in
the school year five years before the current school year, plus the
number of pupils who transferred into the class graduating at the end
of the current school year between the school year that was five
school years before the current school year and the date of
graduation, less the number of pupils who transferred out of the
school between the school year that was five years before the current
school year and the date of graduation who were members of the class
that is graduating at the end of the current school year.
   (D) The inclusion of five- and six-year graduation rates for
pupils in secondary schools shall meet the following requirements:
   (i) Schools shall be granted one-half the credit in their API
scores for graduating pupils in five years that they are granted for
graduating pupils in four years.
   (ii) Schools shall be granted one-quarter the credit in their API
scores for graduating pupils in six years that they are granted for
graduating pupils in four years.
   (iii) Notwithstanding clauses (i) and (ii), schools shall be
granted full credit in their API scores for graduating in five or six
years a pupil with disabilities who graduates in accordance with his
or her individualized education program.
   (E) The pupil data collected for the API that comes from the
achievement test administered pursuant to Section 60640 and the high
school exit examination administered pursuant to Section 60851, when
fully implemented, shall be disaggregated by special education
status, English learners, socioeconomic status, gender, and ethnic
group. Only the test scores of pupils who were counted as part of the
enrollment in the annual data collection of the California Basic
Educational Data System for the current fiscal year and who were
continuously enrolled during that year may be included in the test
result reports in the API score of the school.
   (F) (i) Commencing with the baseline API calculation in 2016, and
for each year thereafter, results of the achievement test and other
tests specified in subdivision (b) shall constitute no more than 60
percent of the value of the index for secondary schools.
   (ii)  In addition to the elements required by this paragraph, the
Superintendent, with approval of the state board, may incorporate
into the index for secondary schools valid, reliable, and stable
measures of pupil preparedness for postsecondary education and
career.
   (G) Results of the achievement test and other tests specified in
subdivision (b) shall constitute at least 60 percent of the value of
the index for primary schools and middle schools.
   (H) It is the intent of the Legislature that the state's system of
public school accountability be more closely aligned with both the
public's expectations for public education and the workforce needs of
the state's economy. It is therefore necessary that the
accountability system evolve beyond its narrow focus on pupil test
scores to encompass other valuable information about school
performance, including, but not limited to, pupil preparedness for
college and career, as well as the high school graduation rates
already required by law.
   (I) The Superintendent shall annually determine the accuracy of
the graduation rate data. Notwithstanding any other law, graduation
rates for pupils in dropout recovery high schools shall not be
included in the API. For purposes of this subparagraph, "dropout
recovery high school" means a high school in which 50 percent or more
of its pupils have been designated as dropouts pursuant to the
exit/withdrawal codes developed by the department or left a school
and were not otherwise enrolled in a school for a period of at least
180 days.
   (J) To complement the API, the Superintendent, with the approval
of the state board, may develop and implement a program of school
quality review that features locally convened panels to visit
schools, observe teachers, interview pupils, and examine pupil work,
if an appropriation for this purpose is made in the annual Budget
Act.
   (K) The Superintendent shall annually provide to local educational
agencies and the public a transparent and understandable explanation
of the individual components of the API and their relative values
within the API.
   (L) An additional element chosen by the Superintendent and the
state board for inclusion in the API pursuant to this paragraph shall
not be incorporated into the API until at least one full school year
after the state board's decision to include the element into the
API.
   (b) Pupil scores from the following tests, when available and when
found to be valid and reliable for this purpose, shall be
incorporated into the API:
   (1) The standards-based achievement tests provided for in Section
60642.5.
   (2) The high school exit examination.
   (c) Based on the API, the Superintendent shall develop, and the
state board shall adopt, expected annual percentage growth targets
for all schools based on their API baseline score from the previous
year. Schools are expected to meet these growth targets through
effective allocation of available resources. For schools below the
statewide API performance target adopted by the state board pursuant
to subdivision (d), the minimum annual percentage growth target shall
be 5 percent of the difference between the actual API score of a
school and the statewide API performance target, or one API point,
whichever is greater. Schools at or above the statewide API
performance target shall have, as their growth target, maintenance of
their API score above the statewide API performance target. However,
the state board may set differential growth targets based on grade
level of instruction and may set higher growth targets for the lowest
performing schools because they have the greatest room for
improvement. To meet its growth target, a school shall demonstrate
that the annual growth in its API is equal to or more than its
schoolwide annual percentage growth target and that all numerically
significant pupil subgroups, as defined in subdivision (a), are
making comparable improvement.
   (d) Upon adoption of state performance standards by the state
board, the Superintendent shall recommend, and the state board shall
adopt, a statewide API performance target that includes consideration
of performance standards and represents the proficiency level
required to meet the state performance target. When the API is fully
developed, schools, at a minimum, shall meet their annual API growth
targets to be eligible for the Governor's Performance Award Program
as set forth in Section 52057. The state board may establish
additional criteria that schools must meet to be eligible for the
Governor's Performance Award Program.
   (e) (1) A school with 11 to 99 pupils with valid test scores shall
receive an API score with an asterisk that indicates less
statistical certainty than API scores based on 100 or more test
scores.
   (2) A school annually shall receive an API score, unless the
Superintendent determines that an API score would be an invalid
measure of the performance of the school for one or more of the
following reasons:
   (A) Irregularities in testing procedures occurred.
   (B) The data used to calculate the API score of the school are not
representative of the pupil population at the school.
   (C) Significant demographic changes in the pupil population render
year-to-year comparisons of pupil performance invalid.
   (D) The department discovers or receives information indicating
that the integrity of the API score has been compromised.
   (E) Insufficient pupil participation in the assessments included
in the API.
   (3) If a school has fewer than 100 pupils with valid test scores,
the calculation of the API or adequate yearly progress pursuant to
the federal No Child Left Behind Act of 2001 (20 U.S.C. Sec. 6301 et
seq.) and federal regulations may be calculated over more than one
annual administration of the tests administered pursuant to Section
60640 and the high school exit examination administered pursuant to
Section 60851, consistent with regulations adopted by the state
board.
   (f) Only schools with 100 or more test scores contributing to the
API may be included in the API rankings.
   (g) The Superintendent, with the approval of the state board,
shall develop an alternative accountability system for schools under
the jurisdiction of a county board of education or a county
superintendent of schools, community day schools, nonpublic,
nonsectarian schools pursuant to Section 56366, and alternative
schools serving high-risk pupils, including continuation high schools
and opportunity schools. Schools in the alternative accountability
system may receive an API score, but shall not be included in the API
rankings.
   SEC. 85.  SEC. 87.   Article 5
(commencing with Section 52060) is added to Chapter 6.1 of Part 28 of
Division 4 of Title 2 of the Education Code, to read:

      Article 5.  Local Control and Accountability Plans


   52060.  (a) The governing board of each school district shall
adopt a local control and accountability plan using a template
adopted by the state board.
   (b) A local control and accountability plan adopted by a governing
board of a school district shall be effective for a period of at
least  one year   three years  but no
longer than five years.  If a governing board of a school
district adopts a plan that would be effective for a period longer
than one year, the governing board must approve an update to the
existing plan at least annually.
   (c) On or before July 1 of each fiscal year, a governing board of
a school district shall take action on a local control and
accountability plan for the subsequent  fiscal year,
  three to five fiscal years, inclusive,  either by
adopting a new local control and accountability plan or by approving
an update to a plan the governing board of the school district has
previously adopted.
   (d) A governing board of a school district shall update the local
control and accountability plan if the governing board of the school
district determines that changes in the composition of the base
Academic Performance Index require the school district to take
specific actions and use strategies that are not already included in
the plan to meet the Academic Performance Index growth target for
each school in the school district. If the governing board of the
school district determines that an update is necessary, the governing
board of the school district shall approve the update by November 1
of the year in which the new base Academic Performance Index is
released.
   (e) A governing board of a school district shall demonstrate that
a local control and accountability plan approved by the governing
board of the school district was developed in consultation with
teachers, principals, administrators, other school personnel,
parents, and  pupils, and is intended to accelerate pupil
progress toward academic proficiency   pupils  .

   (f) A governing board of a school district shall demonstrate that
a local control and accountability plan approved by the governing
board of the school district includes strategies to accelerate pupil
progress toward academic proficiency and supports academic growth of
pupils achieving at or above academic proficiency.  
   (f) 
    (g)  A governing board of a school district shall ensure
that a local control and accountability plan is consistent with all
school plans submitted pursuant to Section 64001 by a school district
for schools within the school district. 
   (g) 
    (h)  Before adopting a local control and accountability
plan or approving an update to an existing plan, a governing board of
a school district shall hold at least one public hearing to solicit
recommendations and opinions of members of the public regarding
specific actions and strategies that should be included in the plan.
The agenda for the public hearing shall be posted at least 72 hours
before the public hearing and shall include the location where the
local control and accountability plan will be available for public
inspection. This public hearing shall be held at the same meeting as
the public hearing required by paragraph (1) of subdivision (a) of
Section 42127. 
   (h) 
    (i)  A governing board of a school district shall notify
members of the public, using the most efficient method possible, of
the opportunity to submit written recommendations and opinions
regarding specific actions and strategies that should be included in
the local control and accountability plan. This subdivision shall not
be interpreted to require a school district to produce printed
notices or to send notices by mail. 
   (i) 
    (j)  A governing board of a school district shall adopt
a local control and accountability plan in a public meeting. This
meeting shall be held after, but not on the same day as, the public
hearing held pursuant to subdivision  (g)   (h)
 . This meeting shall be the same meeting during which the
governing board of the school district considers a budget pursuant to
paragraph (2) of subdivision (a) of Section 42127. 
   (j) 
    (k)  A governing board of a school district may adopt a
revised local control and accountability plan if the governing board
of the school district is required to adopt a revised budget. A
revised local control and accountability plan shall be adopted at the
same meeting that a revised budget is adopted.
   52060.5.  It is the intent of the Legislature to strengthen the
accountability provisions proposed in this article in the following
ways:
   (a) Ensure that supplemental funds generated by low income,
English learner, and foster pupils are used to improve services to
those pupils, and not to supplant existing resources dedicated to
those pupils.
   (b) Provide authority  of   for  state
entities, county entities, or both, to intervene in and support
school districts that do not demonstrate improvements, across
subgroups of pupils, toward achievement of common core academic
content standards and other state standards and goals.
   (c) Rescind flexibility provisions for school districts that do
not demonstrate improvements in outcomes across subgroups of pupils.
   (d) Ensure more robust data collections for purposes of state
accountability systems and state and local oversight.
   (e) Ensure that the majority of funds allocated through any school
funding formula are spent on services and programs with direct
benefits to pupils.
   52061.  (a) Not later than five days after adoption of a local
control and accountability plan or approval of an update to an
existing plan pursuant to Section 52060, the governing board of a
school district shall file the plan with the county superintendent of
schools. The plan shall be filed on the same day that the governing
board of the school district files the budget pursuant to paragraph
(2) of subdivision (a) of Section 42127.
   (b) The county superintendent of schools shall do all of the
following:
   (1) Examine if the plan adheres to the template adopted by the
state board pursuant to Section 52066 and includes all of the
components identified in subdivision (a) of Section 52064.
   (2) Determine if the budget for the subsequent fiscal year adopted
by the governing board of the school district includes expenditures
sufficient to implement the specific actions and strategies included
in the local control and accountability plan adopted by the governing
board of the school district, based on the projections of the costs
included in the plan.
   (3) In making the determinations pursuant to paragraphs (1) and
(2), consider input from teachers, principals, administrators, other
school personnel, parents, and pupils from the school district.
   (4)  The county superintendent of schools shall post
  (A)     Post  all local control
and accountability plans submitted by school districts and charter
schools on the Internet Web site of the county office of education.

   (B) Forward all local control and accountability plans submitted
to the county superintendent of schools by school districts and
charter schools to the Superintendent for posting on the Internet Web
site of the department. 
   52062.  (a) Each county superintendent of schools shall develop,
and each county board of education shall adopt, a local control and
accountability plan using a template adopted by the state board.
   (b) A local control and accountability plan adopted by a county
board of education shall be effective for a period of at least
 one year   three years  but no longer than
five years.  If a county board of education adopts a plan
that would be effective for a period longer than one year, the county
board of education must approve an update to the plan at least
annually. 
   (c) On or before July 1 of each fiscal year, a county board of
education shall take action on a local control and accountability
plan for the subsequent  fiscal year,   three to
five fiscal years, inclusive,  either by adopting a new local
control and accountability plan or by approving an update to a plan
the county board of education has previously adopted.
   (d) A county superintendent of schools shall update and present to
the county board of education for approval the local control and
accountability plan if the county board of education determines that
changes in the composition of the base Academic Performance Index
require the county superintendent of schools to take specific actions
and use strategies that are not already included in the plan to meet
the Academic Performance Index growth target for each school
operated by the county superintendent of schools. If the county board
of education determines that an update is necessary, the county
board of education shall approve the update by November 1 of the year
in which the base Academic Performance Index is released.
   (e) A county superintendent of schools shall demonstrate that a
local control and accountability plan was developed in consultation
with teachers, principals, administrators, other school personnel,
parents, and  pupils, and is intended to accelerate pupil
progress toward academic proficiency   pupils  . A
county superintendent of schools also shall demonstrate that the
superintendents of all school districts in the county were consulted
in the development of the plan. 
   (f) A county superintendent of schools shall demonstrate that a
local control and accountability plan includes strategies to
accelerate pupil progress toward academic proficiency and supports
academic growth of pupils achieving at or above academic proficiency.
 
   (f) 
    (g)  A local control and accountability plan shall be
consistent with all school plans submitted pursuant to Section 64001
by the county superintendent of schools for schools operated by the
county superintendent of schools. 
   (g) 
    (h)  Before adopting a local control and accountability
plan or approving an update to an existing plan, a county board of
education shall hold at least one public hearing to solicit
recommendations and opinions of members of the public regarding
specific actions and strategies that should be included in the plan.
The agenda for that hearing shall be posted at least 72 hours before
the public hearing and shall include the location where the local
control and accountability plan will be available for public
inspection. The public hearing shall be held at the same meeting as
the public hearing required by Section 1620. 
   (h) 
    (i)  A county board of education shall notify members of
the public, using the most efficient method possible, of the
opportunity to submit written recommendations and opinions regarding
specific actions and strategies that should be included in the local
control and accountability plan. This subdivision shall not be
interpreted to require a county board of education to produce printed
notices or to send notices by mail. 
   (i) 
    (j)  A county board of education shall adopt a local
control and accountability plan in a public meeting. This meeting
shall be held after, but not on the same day as, the public hearing
held pursuant to subdivision  (g)   (h)  .
The meeting shall be the same meeting during which a county board of
education considers a budget pursuant to Section 1620. 
   (j) 
    (k)  A county board of education may adopt a revised
local control and accountability plan if the county board of
education is required to adopt a revised budget. A revised local
control and accountability plan shall be adopted at the same meeting
that a revised budget is adopted.
   52063.  (a) No later than five days after adoption of a local
control and accountability plan or approval of an update to an
existing plan pursuant to Section 52062 by a county board of
education, the county superintendent of schools shall file the plan
with the Superintendent, the county board of supervisors, and the
county auditor. The plan shall be filed on the same day that the
county superintendent of schools files the budget pursuant to
subdivision (a) of Section 1622.
   (b) The Superintendent shall do all of the following:
   (1) Examine if the plan adheres to the template adopted by the
state board pursuant to Section 52066 and includes all of the
components identified in subdivision (a) of Section 52064.
   (2) Determine if the budget for the subsequent fiscal year adopted
by the county board of education includes expenditures sufficient to
implement the specific actions and strategies included in the local
control and accountability plan adopted by the county board of
education, based on the projections of the costs included in the
plan.
   (3) In making the determinations pursuant to paragraphs (1) and
(2), consider input from teachers, principals, administrators, other
school personnel, parents, and pupils in the county.
   (c) The Superintendent shall post all local control and
accountability plans submitted to it by county superintendents of
schools on its Internet Web site. The Superintendent shall also post
all local control and accountability plans submitted by school
districts and charter schools to county superintendents of schools on
its Internet Web site.
   52064.  (a) A local control and accountability plan adopted by a
governing board of a school district or a county board of education
shall identify goals and describe the specific actions the school
district or county superintendent of schools will take and strategies
that will be used to achieve all of the following:
   (1) Implement, for all pupils, the content standards adopted by
the state board pursuant to Sections 60605.8, 60605.10, and 60605.11.

   (2) Increase the Academic Performance Index and performance on
statewide assessments pursuant to Article 4 (commencing with Section
60640) of Chapter 5 of Part 33, other national assessments, statewide
assessments, and appropriate local assessments, for each school and
for each numerically significant pupil subgroup pursuant to Section
52052, and reduce gaps in the Academic Performance Index and other
measures of pupil achievement between numerically significant pupil
subgroups, as evidenced by the results of statewide assessments
pursuant to Article 4 (commencing with Section 60640) of Chapter 5 of
Part 33, other national assessments, statewide assessments, and
appropriate local assessments.
   (3) Significantly improve pupil achievement of 
proficiency in  the content standards adopted by the state
board pursuant to Sections 60605, 60605.2, 60605.3, 60605.8, and
60605.85, at all grade levels, as evidenced by the results of
statewide assessments pursuant to Article 4 (commencing with Section
60640) of Chapter 5 of Part 33, other national assessments, statewide
assessments, and appropriate local assessments.
   (4) Increase high school graduation rates as measured by the
California Longitudinal Pupil Achievement Data System and the school
district level data system, if a school district or a county
superintendent of schools enrolls high school pupils, increase
attendance rates, and reduce dropout rates.
   (5) Increase the percentage of pupils who have successfully
completed each of the following:
   (A) Courses that satisfy the requirements for entrance to the
University of California and the California State University.
   (B) Advanced placement courses.
   (C)    Career technical education
programs     Sequences or clusters of courses
that meet the requirements of subdivision (a) of Section 52302 and
align with the state board-approved career technical education
standards and frameworks  .
   (6) Identify and address needs of pupils, and schools
predominantly serving pupils, who meet any of the following
definitions:
   (A) Pupils who have been classified as an English learner pursuant
to Section 52164.  Information regarding services for English
learners shall include elements of the master plan for English
learners                                                   developed
pursuant to Section 41976.3. 
   (B) Pupils who qualify for the free and reduced-price meal program
pursuant to Section 49552.
   (C) Foster children as defined in Sections 300  and 601
  , 601, and 602  of the Welfare and Institutions
Code.
   (D) Pupils enrolled in a juvenile court school operated by a
county superintendent of schools pursuant to subdivision (a) of
Section 48645.2, if applicable.
   (7) Remedy deficiencies in any school in the school district or
any school operated by the county board of education and improve
school conditions in any of the areas included in paragraphs (5),
(6), and (8) of subdivision (b) of Section 33126. This includes
ensuring access for each pupil to the following:
   (A) Sufficient textbooks and instructional materials.
   (B) Safe, clean, and adequate school facilities.
   (C) Qualified teachers.
   (8) Provide meaningful opportunities for parent involvement,
including, at a minimum, supporting effective schoolsite councils or
other structures at each school and advisory panels to the governing
board of the school district or the county board of education or, if
parents so choose, creating other processes or structures, such as
creating the role of an ombudsman for parents, to address complaints
and other issues raised by parents.
   (9)  Improvement in   Improve  
 the school district's college entrance rate, as measured by the
National Student Clearinghouse or other state-approved pupil data
tracking system if a school district or county superintendent of
schools enrolls high school pupils.
   (10)  Improvement in   Improve  the
number of pupils who enter technical school after graduation, as
measured by the National Student Clearinghouse or other
state-approved pupil data tracking system, or who graduate prepared
to enter high-wage, high-skill occupations if a school district or
county superintendent of schools enrolls high school pupils.
   (b) A local control and accountability plan developed by a county
superintendent of schools and approved by a county board of education
shall also include, in addition to the elements included in
subdivision (a), goals related to addressing countywide needs, and
describe specific actions and strategies to do all of the following:
   (1) Conduct effective oversight of school districts pursuant to
Article 2 (commencing with Section 1240) of Chapter 2 of Part 2 of
Division 1 of Title 1 and Chapter 6 (commencing with Section 42100)
of Part 24 of Division 3 of Title 2.
   (2) Provide support to school districts in the county, including
support related to school district operations, educational
technology, and professional development, and guidance to school
districts related to curriculum and instructional practices.
   (3) Coordinate instruction for expelled pupils pursuant to Section
48926.
   (c) A local control and accountability plan shall include an
analysis of both the following:
   (1) Pupil achievement of those pupils enrolled in schools in a
school district or schools operated by a county superintendent of
schools at the time the plan is adopted by the governing board of the
school district or the county board of education.
   (2) If a governing board of a school district or a county board of
education previously has adopted a local control and accountability
plan, progress made in implementing the goals identified in the plan
in effect immediately before the adoption of a new plan by the
governing board of the school district or the county board of
education.
   (d) For purposes of conducting the analysis required by
subdivision (c), a governing board of a school district or a county
superintendent of schools may consider qualitative information,
including reviews conducted by panels of experts during visits to
schools in the school district or schools operated by the county
office of education.
   (e) Data reported in a local control and accountability plan shall
be consistent with information reported on school accountability
report cards for schools in a school district or schools operated by
a county superintendent of schools.
   (f) (1) A local control and accountability plan shall include
projections of the costs of implementing the specific actions and
strategies included in the plan. Expenditures that reflect these cost
projections shall be included in the budget adopted by the governing
board of the school district pursuant to Section 42127.
   (2) A local control and accountability plan shall demonstrate
fiscal solvency, as measured by the standards and criteria adopted by
the state board pursuant to Section 33127 and implementing
regulations.
   (g) A local control and accountability plan adopted by a governing
board of a school district shall document all of the following:
   (1) For those fiscal years in which it is anticipated that the
school district will receive less funding than is calculated under
the local control funding formula pursuant to Section 42238.02, as
implemented by Section 42238.03, a projection of the total funding
required for the specific actions the school district will take and
strategies that will be used to implement paragraph (6) of
subdivision (a), divided by the average daily attendance of the
pupils for whom any of the definitions included in paragraph (6) of
subdivision (a) apply. This amount of funding shall not be less than
the total expenditures from the sources included in paragraphs (1) to
(3), inclusive, of subdivision  (i)   (h) 
of Section 42238.02 during the 2013-14 fiscal year for services for
pupils for whom any of the definitions included in paragraph (6) of
subdivision (a) applied during the 2013-14 fiscal year, divided by
the average daily attendance of these students during the 2013-14
fiscal year.
   (2) For those fiscal years in which it is anticipated that the
school district will receive funding equal to or greater than the
amount calculated under the local control funding formula pursuant to
Section 42238.02, as implemented by Section 42238.03, a projection
of the total funding required for the specific actions the school
district will take and strategies that will be used to implement
paragraph (6) of subdivision (a), divided by the average daily
attendance of the pupils to whom any of the definitions included in
paragraph (6) of subdivision (a) is applicable. This funding shall
not be less than the supplemental grants the governing board of the
school district projects receiving pursuant to subdivision (e) of
Section 42238.02, divided by the average daily attendance of the
pupils to whom any of the definitions included in paragraph (6) of
subdivision (a) is applicable.
   (h) A local control and accountability plan adopted by a county
board of education shall document all of the following:
   (1) For those fiscal years in which it is anticipated that the
county office of education will receive less funding than is
calculated under the county local control funding formula pursuant to
Section 2574, a projection of the total funding required for the
specific actions the county superintendent of schools will take and
strategies that will be used to implement paragraph (6) of
subdivision (a), divided by the average daily attendance of the
pupils to whom any of the definitions included in paragraph (6) of
subdivision (a) is applicable. This amount of funding shall not be
less than the total  expenditures from the sources included
in paragraphs (1) and (2) of subdivision (e) of Section 2574 during
the 2013-14 fiscal year   amount received for the
2013-14 fiscal year from funds allocated pursuant to the Targeted
Instructional Improvement Block Grant program, as set forth in
Article 6 (commencing with Section 41540) of Chapter 3.2 of Part 24
of Division 3 of Title 2, as that article read on January 1, 2014,
 for services for pupils to whom any of the definitions included
in paragraph (6) of subdivision (a) applied during the 2013-14
fiscal year, divided by the average daily attendance of these pupils
during the 2013-14 fiscal year.
   (2) For those fiscal years in which it is anticipated that the
county office of education will receive funding equal to or greater
than the amount calculated under the county local control funding
formula pursuant to Section 2574, a projection of the total funding
required for the specific actions the county superintendent of
schools will take and strategies that will be used to implement
paragraph (6) of subdivision (a), divided by the average daily
attendance of the pupils to whom any of the definitions included in
paragraph (6) of subdivision (a) is applicable. This funding shall
not be less than the supplemental grants the county board of
education projects receiving pursuant to subdivision (c) of Section
2574, divided by the average daily attendance of the pupils to whom
any of the definitions included in paragraph (6) of subdivision (a)
is applicable.
   (i) A local control and accountability plan shall account for the
funds provided to charter schools that elect to receive funding
through the school district or the county office of education
pursuant to Section 47651.
   (j) A local control and accountability plan shall include
measurable  metrics   outcomes  to
demonstrate achievement of the elements identified in paragraphs (1)
to (10), inclusive, of subdivision (a), using as a baseline pupil
achievement at the time the local control and accountability plan is
adopted.
   52065.  (a) The governing body of a charter school that elects to
receive its funding directly, pursuant to Section 47651, shall adopt
a local control and accountability plan using a template adopted by
the state board.
   (b) Notwithstanding Section 52064, a local control and
accountability plan adopted by the governing body of a charter school
shall identify specific steps the charter school will take and
strategies that will be used to accomplish the goals identified in
the charter petition granted pursuant to Sections 47605, 47605.5,
47605.6, 47605.8, and 47606.
   (c) A local control and accountability plan adopted by a governing
body of a charter school shall be effective for a period of at least
 one year   three years  but no longer
than five years.  If the governing body of the charter school
adopts a plan that would be effective for a period longer than one
year, the governing body of the charter school must approve an update
to the existing plan at least annually. 
   (d) On or before July 1 of each fiscal year, a governing body of a
charter school shall take action on a local control and
accountability plan for the subsequent fiscal year, either by
adopting a new local control and accountability plan or by approving
an update to a plan the charter school has previously adopted. The
plan shall be submitted to the charter school's chartering authority
and the county superintendent of schools, or only to the county
superintendent of schools if the county board of education is the
chartering authority, on the same day that the charter school submits
its preliminary budget pursuant to paragraph (1) of subdivision (a)
of Section 47604.33.
   52065.5.  (a) On or before July 1, 2015, the Superintendent shall
develop and the state board shall adopt a system of assistance and
interventions that shall be implemented in either, or both, of the
following circumstances:
   (1) If a county office of education, school district, or charter
school requests information, and technical and programmatic
assistance.
   (2) If a county office of education, school district, or charter
school, over a two-year period, fails to accomplish the pupil
achievement goals specified in its local control and accountability
plan.
   (b) The system of assistance and interventions shall be available
for implementation on or before July 1, 2017, and shall include
meaningful incentives and consequences, including, but not limited
to, loss of local governing and policymaking authority. The system of
assistance and interventions may also include, but is not limited
to, development of a carefully selected and trained statewide or
regional group of experts and practitioners, or both, to assist
county offices of education, school  district,  
districts,  and charter schools in developing the local
capacity to meet the educational needs of all pupils.
   (c) If the system of assistance and interventions requires
statutory changes, the Superintendent, on or before January 1, 2015,
shall submit the proposed statutory changes to the appropriate policy
and fiscal committees of the Legislature for consideration.
   52066.  (a) The state board shall adopt a template for use by
school districts and a separate template for use by county
superintendents of schools that includes the elements identified in
Section 52064.
   (b) The state board shall also adopt a template for use by charter
schools to satisfy the requirements of Section 52065.
   (c) The templates developed by the state board shall allow a
school district, county superintendent of schools, or charter school
to complete a single local control and accountability plan to meet
the requirements of this article and the requirements of the federal
Elementary and Secondary  Education  Act related to local
educational agency plans pursuant to Section 1112 of Subpart 1 of
Part A of Title I of Public Law 107-110. The state board shall also
take steps to minimize duplication of effort at the local level to
the greatest extent possible.
   (d) If possible, the template identified in subdivision (a) for
use by county superintendents of schools shall allow a county
superintendent of schools to develop a single local control and
accountability plan that would also satisfy the requirements of
Section 48926.
   (e) The state board shall approve the templates identified in
subdivisions (a) and (b) by January 30, 2015. Revisions to the
templates shall be approved by the state board by January 1 before
the fiscal year during which a template is to be used by a school
district, county superintendent of schools, or charter school. 
   (f) The state board shall demonstrate that the templates
identified in subdivisions (a) and (b) were developed in consultation
with teachers, principals, administrators, other school personnel,
parents, and pupils.  
   (g) Before adopting a template or approving an update to an
existing template, the state board shall hold at least one public
hearing to solicit recommendations and opinions of members of the
public regarding elements of the template. The agenda for the public
hearing shall be posted at least 72 hours before the public hearing
and shall include the location where the template will be available
for public inspection.  
   (h) The state board shall notify members of the public, using the
most efficient method possible, of the opportunity to submit written
recommendations and opinions regarding the elements of the template.
This subdivision shall not be interpreted to require the state board
to produce printed notices or to send notices by mail.  
   (i) The state board shall adopt a template in a public meeting.
This meeting shall be held after, but not on the same day as, the
public hearing held pursuant to subdivision (g).  
   (f) 
    (j)  The adoption of a template by the state board shall
not create a requirement for a governing board of a school district,
a county board of education, or a governing body of a charter school
to submit a local control and accountability plan to the state
board, unless otherwise required by federal law.  The
Superintendent shall not require a local control and accountability
plan to be submitted by a governing board of a school district or the
governing body of a charter school.  The state board may
adopt a template that would authorize a school district or a charter
school to submit to the state board only the sections of the local
control and accountability plan required by federal law. 
   (g) 
    (k)  The state board may adopt emergency regulations for
purposes of implementing this section.
   52067.  This article shall become operative on July 1, 2014.
   SEC. 88.    Section 60902 is added to the  
Education Code   , to read:  
   60902.  The department shall not add data elements to the
California Longitudinal Pupil Achievement Data System in addition to
those required by this chapter and shall not require local
educational agencies to use the data collected through the California
Longitudinal Pupil Achievement Data System except for either of the
following purposes:
   (a) To implement changes to the Academic Performance Index
pursuant to subparagraph (F) of paragraph (4) of subdivision (a) of
Section 52052.
   (b) To provide a data element or elements necessary to develop the
local control and accountability template pursuant to Section 52066,
as determined by the state board. 
   SEC. 89.    On or before March 1, 2014, the
Legislative Analyst's Office shall submit recommendations to the
fiscal committees of both houses of the Legislature regarding
revisions to the methods of funding pupil transportation that address
historical funding inequities across school districts and improve
incentives for local educational agencies to provide efficient and
effective pupil transportation services. 
   SEC. 86.   SEC. 90.   If the Commission
on State Mandates determines that this act contains costs mandated by
the state, reimbursement to local agencies and school districts for
those costs shall be made pursuant to Part 7 (commencing with Section
17500) of Division 4 of Title 2 of the Government Code.
   SEC. 87.   SEC. 91.   The provisions of
this bill shall become operative only if both of the following occur:

   (a) Senate Bill 344 of the 2013-14 Regular Session of the
Legislature is enacted and it relates to educational accountability
for English learner programs and services.
   (b) Senate Bill  860   660  of the
2013-14 Regular Session of the Legislature is enacted and it relates
to career technical education.