Amended in Senate May 28, 2013

Amended in Senate May 24, 2013

Amended in Senate May 8, 2013

Amended in Senate April 25, 2013

Senate Bill No. 69

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 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, 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, 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.

(5) This bill would make conforming changes, correct cross-references, and make other nonsubstantive changes.

(6) This bill would become operative only if specified legislation is enacted in the 2013-14 Regular Session.

(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
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 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 and supporting 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 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 begin delete 35 end delete begin insert 40 end insert 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 begin delete 35 end delete begin insert 40 end insert 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 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).

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, 6110-124-0001, 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 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.

(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 (1) the amounts to be certified pursuant to Sections
14002 and 14004, (2) allocations made pursuant to Section 41301,
(3) the apportionments required to be made pursuant to Sections
41330, 41332, and 41335, (4) revenue limits for school districts
pursuant to Section 42238, as adjusted pursuant to Sections
42238.14, 42238.145, and 42238.146, and (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 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 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 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 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
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
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 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 (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 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 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 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 begin delete 35 end delete begin insert 40 end insert 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
begin delete 35 end delete begin insert 40 end insert 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 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.

(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) 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.

(i) A school district shall annually transfer to each of its charter
schools funding in lieu of property taxes pursuant to Section 47635.

(j) (1) The funds apportioned pursuant to this section and
Section 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.

(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.

(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.

(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.”

(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, 6110-124-0001,
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 (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 (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 (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 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
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 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 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 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 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, 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
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
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 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 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 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 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 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 (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 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 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 Social 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 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.

(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. 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 three years but no longer than five years.

(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 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.

(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.

(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.

(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.

(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.

(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 (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.

(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 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) (A)  begin delete Postall end delete begin insert Post all end insert 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 three
years but no longer than five years.

(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 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. 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.

(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.

(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.

(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.

(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 (h). The meeting shall be the same meeting during
which a county board of education considers a budget pursuant to
Section 1620.

(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 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) 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, 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) 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) 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 (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 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 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 three years but no longer than five years.

(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 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).

(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 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.

(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. 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. 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 660 of the 2013-14 Regular Session of the
Legislature is enacted and it relates to career technical education.