Amended in Assembly August 27, 2015

Amended in Assembly August 17, 2015

Amended in Senate June 2, 2015

Amended in Senate April 7, 2015

Senate Bill No. 148

Introduced by Senator McGuire

(Coauthor: Assembly Member O’Donnell)

January 29, 2015

An act to amend Sections 35510, 35514, 35515, begin delete and 35735 end delete begin insert 35735, and 35736 end insert of, to add Sections 35735.2, 35735.3, 35735.5, 35735.6, 35735.7, 35735.8, 35735.9, and 35735.10 to, to repeal and add Sections 35735.1 and 35735.4 of, and to repeal Section 35516 of, the Education Code, relating to school districts.

LEGISLATIVE COUNSEL’S DIGEST

SB 148, as amended, McGuire. School districts: reorganization: local control funding formula.

Existing law establishes a system of public elementary and secondary education in this state. Under this system, school districts throughout the state operate and maintain schools at which they provide instruction. Existing law establishes procedures under which new school districts may be formed by dissolving 2 or more existing school districts of the same kind from the entire territory of the original school districts, by forming one or more new school districts of the same kind from all or parts of one or more existing school districts of the same kind, or by unifying or deunifying school districts as specified. Under existing law, new school districts may also be formed through an action to transfer territory, including an action to transfer all or part of an existing school district to another existing school district.

Existing law also establishes a system of funding public elementary and secondary education in this state. This funding system includes, among other elements, a local control funding formula through which funds are apportioned to school districts for educational purposes based on the total number of pupils attending the schools in those districts and the number of those pupils who fall into specified categories, including English learners, pupils eligible for free or reduced-price meals, and foster youth.

This bill would enact numerous provisions specifying computations to determine the funding, pursuant to the local control funding formula, of school districts that are, or proposed to be, affected by the various types of actions that may be undertaken to reorganize districts, as defined.

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

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

SECTION 1.  

Section 35510 of the Education Code is amended
to read:

35510.  

Unless the context otherwise requires, the definitions
set forth in this article govern the construction of this chapter and
Chapter 4 (commencing with Section 35700).

SEC. 2.  

Section 35514 of the Education Code is amended to
read:

35514.  

As used in this chapter and in Chapter 4 (commencing
with Section 35700):

(a) “Affected district” means a district that has been, or is
proposed to be, affected by an action to reorganize pursuant to
Section 35511 or by an action to lapse a district pursuant to Section
35780.1. Affected districts include all of the following district
types:

(1) “Original district” means a district as it existed before an
action to reorganize pursuant to Section 35511 or before an action
to lapse a district pursuant to Section 35780.1. The boundaries of
an “original district” are those of the district as it existed
immediately before the action to reorganize or lapse.

(2) “Former district” means a district that has been wholly
included in another district, or has had all of its territory made part
of two or more other districts, through any action taken pursuant
to Section 35511 or through a begin delete lapsation end delete begin insert lapse end insert pursuant to Section
35780.1. The boundaries of a former district are those of the district
as it existed immediately before an action to reorganize or lapse.

(3) “New district” means a district that is formed from all or
portions of one or more other districts by an action to reorganize
taken pursuant to subdivision (a) of Section 35511. A new district
does not exist before such an action.

(4) “Acquiring district” means a district that has all or portions
of one or more other districts transferred into, or lapsed into, its
boundaries pursuant to subdivision (b) of Section 35511 or Section
35780.1.

(5) “Divided district” means a district that has had a portion of
its territory become part of a new district or transferred into one
or more other districts by an action to reorganize taken pursuant
to Section 35511.

(A) The “reorganized portion of a divided district” means the
portion of the divided district’s territory that becomes part of a
new district or is transferred into one or more other districts.

(B) The “remaining portion of a divided district” means the
portion of the divided district’s territory that does not become part
of a new district or that is not transferred into one or more other
districts.

(6) “Reorganized district” means a district that is a “new
district,” an “acquiring district,” or a “divided district.”

(b) “Districts” means school districts of every kind or class.

SEC. 3.  

Section 35515 of the Education Code is amended to
read:

35515.  

“Component district” means an elementary school
district that is included within a high school district or an
elementary school district that is excluded from an action to unify
a high school district but that continues to feed into the high schools
of the new unified school district pursuant to subdivision (b) of
Section 35542.

SEC. 4.  

Section 35516 of the Education Code is repealed.

SEC. 5.  

Section 35735 of the Education Code is amended to
read:

35735.  

(a) Each proposal for the reorganization of school
districts shall include a computation of the local control funding
formula entitlement determined pursuant to Section 42238.02, as
implemented by Section 42238.03, for the districts. That
computation shall be an integral part of the proposal, and shall not
be considered separately from the proposal. The funding
computations for the reorganized school districts shall be made
consistent with the calculations established in this article, and shall
be based on the current information available for each affected
school district for the second principal apportionment period for
the fiscal year begin delete two years before end delete begin insert immediately preceding end insert the fiscal
year in which the reorganization is to become effective.

(b) The county superintendent of schools shall compute the
local control funding formula entitlement pursuant to this article
for a school district involved in an action to reorganize.

(c) (1) For a former school district that has been wholly included
in more than one new or acquiring district, the county
superintendent of schools with jurisdiction over the reorganized
school district shall compute the local control funding formula
entitlement pursuant to this article. As part of this computation,
and except as otherwise provided in this article, the county
superintendent of schools may determine both of the following:

(2) (A) The prior year funded average daily attendance as of
the second principal apportionment from each affected school
district that will be served by each reorganized school district.

(B) Consistent with paragraph (1), the division of all of the
following types of funding attributed to a former district when all
of the territory of that former district is made part of two or more
new or acquiring districts:

(i) Categorical program funding provided pursuant to
subdivisions (g) and (h) of Section 42238.02, paragraph (2) of
subdivision (a) of Section 42238.03, and subdivision (e) of Section
42238.03.

(ii) Economic recovery target payments computed pursuant to
paragraph (2) of subdivision (d) of Section 42238.025.

(iii) Necessary small school allowances provided for minimum
state aid pursuant to subparagraph (D) of paragraph (1) of
subdivision (e) of Section 42238.03, except that in no case shall
the allowance attributed to a single necessary small elementary or
necessary small high school be divided among more than one new
or acquiring district.

(3) The funding calculated pursuant to this subdivision shall be
incorporated by the Superintendent into the new or acquiring
district’s calculations as if it were a former district that is wholly
included in the new district, provided that the required information
is submitted to the Superintendent within the timeframe established
by the Superintendent. If the county superintendent of schools
does not provide all of the information in paragraphs (1) and (2),
the funding shall not be included in the new or acquiring district’s
calculations.

(d) For all actions to reorganize, except for those actions
approved pursuant to subdivision (b) of Section 35710, or appealed
pursuant to subdivision (c) of Section 35710, Section 35710.5, or
Section 35711, the Superintendent shall compute the local control
funding formula entitlement for a reorganized school district
pursuant to Section 42238.02, as implemented by Section 42238.03.

(e) The Superintendent may make adjustments to the local
control funding formula entitlements computed pursuant to
subdivisions (b) and (c), if those adjustments are necessary to cause
those entitlements to be consistent with this article.

(f) For purposes of this article, a begin delete lapsation end delete begin insert lapse end insert pursuant to
Section 35780.1 shall be considered an action to reorganize
pursuant to subdivision (b) of Section 35511.

(g) Any costs incurred by the county superintendent of schools
in preparing reports pursuant to this section or Sections 35735.1
to 35735.9, inclusive, may be billed to the affected school districts
on a proportionate basis.

SEC. 6.  

Section 35735.1 of the Education Code is repealed.

SEC. 7.  

Section 35735.1 is added to the Education Code, to
read:

35735.1.  

For purposes of paragraph (5) of subdivision (b) of
Section 42238.02, reorganized districts shall have their percentages
of unduplicated pupils calculated as follows:

(a) (1) For a new district in the first fiscal year of operation,
include only the current fiscal year unduplicated pupil and
enrollment counts used to establish the current fiscal year
percentage.

(2) For a new district in the second fiscal year of operation,
include only the current fiscal year and prior fiscal year
unduplicated pupil and enrollment counts to establish the current
fiscal year percentage.

(3) For a new district in the third and subsequent fiscal years of
operation, include the current fiscal year, prior fiscal year, and
second prior fiscal year unduplicated pupil and enrollment counts
to establish the current fiscal year percentage.

(b) For an acquiring district in the first fiscal year of operation
after the reorganization, retain the prior fiscal year and second
prior fiscal year unduplicated pupil and enrollment counts from
the fiscal years before the reorganization. For the current fiscal
year and each subsequent fiscal year after reorganization, include
the unduplicated pupil and enrollment counts for all pupils who
are being served by the acquiring district.

(c) For the remaining portion of a divided district, the percentage
calculation shall include the prior and second prior fiscal year
unduplicated pupil and enrollment counts from the fiscal years
before the reorganization. For the current and each subsequent
fiscal year after reorganization, include only the unduplicated pupil
and enrollment counts for the pupils who are being served by the
remaining portion of the divided district.

SEC. 8.  

Section 35735.2 is added to the Education Code, to
read:

35735.2.  

For purposes of subdivisions (g) and (h) of Section
42238.02, paragraph (2) of subdivision (a) of Section 42238.03,
and subdivision (e) of Section 42238.03, reorganized districts shall
have categorical program funding determined as follows:

(a) (1) A new district shall retain the same amount of categorical
funding received by each former district before the reorganization.
A new district shall not retain any categorical funding received by
divided districts before the reorganization.

(2) If the new district is composed wholly of former districts,
it shall receive a reduction pursuant to paragraph (2) of subdivision
(a) of Section 42238.03 only to the extent that the new district
would have received a reduction in the 2012-13 fiscal year.

(3) If the new district is comprised of former districts and one
or more divided districts, it shall receive a reduction pursuant to
paragraph (2) of subdivision (a) of Section 42238.03 only to the
extent that the former districts received a reduction in the 2012-13
fiscal year.

(b) (1) An acquiring district shall retain the same amount of
categorical funding it received before the reorganization, plus the
amount of categorical funding received by each former district
before the reorganization. An acquiring district shall not retain any
categorical funding received by divided districts before the
reorganization.

(2) If the acquiring district is composed wholly of former
districts, it shall receive a reduction pursuant to paragraph (2) of
subdivision (a) of Section 42238.03 only to the extent that the
acquiring district would have received a reduction in the 2012-13
fiscal year.

(3) If the acquiring district comprises a former district and one
or more divided districts, it shall receive a reduction pursuant to
paragraph (2) of subdivision (a) of Section 42238.03 only to the
extent that the former district received a reduction in the 2012-13
fiscal year.

(c) (1) The remaining portion of a divided district shall retain
the same amount of categorical funding it received before the
reorganization.

(2) If a divided district received a reduction pursuant to
paragraph (2) of subdivision (a) of Section 42238.03, it shall
continue to receive that reduction.

(d) If the reorganization includes a former district that has been
wholly included in more than one new or acquiring districts, the
categorical funding shall be determined pursuant to subdivision
(c) of Section 35735.

SEC. 9.  

Section 35735.3 is added to the Education Code, to
read:

35735.3.  

(a) A new or acquiring district shall receive an
economic recovery target payment pursuant to paragraph (2) of
subdivision (d) of Section 42238.025 that is equal to the sum of
the amounts determined for each former district that was eligible
to receive an economic recovery target payment pursuant to
paragraph (1) of subdivision (d) of Section 42238.025 before the
reorganization.

(b) The remaining portion of a divided district shall retain the
same amount of economic recovery target funding pursuant to
paragraph (2) of subdivision (d) of Section 42238.025 that it was
eligible to receive before the reorganization.

(c) If the reorganization includes a former district that has been
wholly included in more than one new or acquiring district, the
economic recovery target funding shall be determined pursuant to
subdivision (c) of Section 35735.

SEC. 10.  

Section 35735.4 of the Education Code is repealed.

SEC. 11.  

Section 35735.4 is added to the Education Code, to
read:

35735.4.  

For purposes of subdivision (d) of Section 42238.03,
a reorganized district shall be deemed to have a zero difference in
the prior fiscal year if one of the following conditions is met:

(a) For a new district resulting from an action to reorganize
pursuant to paragraph (1), (2), or (3) of subdivision (a) of Section
35511, each former district had a zero difference in the prior fiscal
year.

(b) For a new district resulting from an action to reorganize
pursuant to paragraph (4) subdivision (a) of Section 35511, the
original district had a zero difference in the prior fiscal year.

(c) For an acquiring district affected by an action to reorganize
taken pursuant to subdivision (b) of Section 35511, the acquiring
district has a zero difference in the prior fiscal year.

SEC. 12.  

Section 35735.5 is added to the Education Code, to
read:

35735.5.  

(a) For a new or acquiring district that has
reorganized pursuant to paragraph (1), (2), or (3) of subdivision
(a) of Section 35511 or subdivision (b) of Section 35511, the
funding amount per unit of average daily attendance pursuant to
subparagraph (A) of paragraph (1) of subdivision (a) of Section
42238.03 shall be calculated, as follows:

(1) If the reorganization took place before December 31, 2013,
for each affected district:

(A) Blend the revenue limit pursuant to Section 35735.1, as that
section read on January 1, 2013.

(B) Multiply the average daily attendance for the fiscal year
two years before the fiscal year in which the reorganization is to
become effective by the per unit of average daily attendance
amount computed pursuant to subparagraph (A) of paragraph (1)
of subdivision (a) of Section 42238.03.

(C) Add the products determined in subparagraph (B) and divide
by the sum of units of average daily attendance for the fiscal year
two years before the fiscal year in which the reorganization is to
become effective for all affected districts.

(2) If the reorganization took place after December 31, 2013,
for each affected district:

(A) Multiply the average daily attendance for the fiscal year
immediately preceding the fiscal year in which the reorganization
is to become effective by the per unit of average daily attendance
amount computed pursuant to subparagraph (A) of paragraph (1)
of subdivision (a) of Section 42238.03.

(B) Add the products determined in subparagraph (A) and divide
by the sum of units of average daily attendance for the fiscal year
immediately preceding the fiscal year in which the reorganization
is to become effective for all affected districts.

(3) (A) For purposes of paragraphs (1) and (2), average daily
attendance shall be the funded average daily attendance as of the
second principal apportionment.

(B) If the reorganization includes a divided district, the following
shall apply:

(i) For purposes of paragraph (1), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district.

(ii) For purposes of paragraph (2), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district in the first fiscal year the
reorganization becomes effective. If no average daily attendance
of the divided district is estimated to be served in the first fiscal
year of the reorganization, the divided district’s funding shall not
be included in the blending calculation made pursuant to
subparagraph (A) of paragraph (1) of subdivision (a) of Section
42238.03.

(C) For purposes of paragraph (1) or (2), if the reorganization
includes a former district that has been wholly included in more
than one new or acquiring district, the average daily attendance
shall be the average daily attendance reported pursuant to
subdivision (c) of Section 35735.

(b) For a new district formed as a result of deunification pursuant
to paragraph (4) of subdivision (a) of Section 35511, the funding
amount per unit of average daily attendance pursuant to
subparagraph (A) of paragraph (1) of subdivision (a) of Section
42238.03 shall be equal to the amount calculated for the original
district for the fiscal year before the fiscal year in which the
reorganization is to become effective.

SEC. 13.  

Section 35735.6 is added to the Education Code, to
read:

35735.6.  

(a) For a new or acquiring district that has
reorganized pursuant to paragraph (1), (2), or (3) of subdivision
(a) of Section 35511 or subdivision (b) of Section 35511, the
funding amount per unit of average daily attendance pursuant to
subparagraph (A) of paragraph (1) of subdivision (e) of Section
42238.03, shall be calculated as follows:

(1) If the reorganization took place before December 31, 2013,
for each affected district:

(A) Multiply the average daily attendance for the fiscal year
two years before the fiscal year in which the reorganization is to
become effective by the per unit of average daily attendance
amount computed pursuant to subparagraph (A) of paragraph (1)
of subdivision (e) of Section 42238.03.

(B) Add the products determined in subparagraph (A), and
divide that sum by the sum of units of average daily attendance
for the fiscal year two years immediately preceding the fiscal year
in which the reorganization is to become effective for all affected
districts.

(C) No adjustment shall be made for paragraphs (2) and (3) of
subdivision (a) of Section 35735.1, as that section read on January
1, 2013.

(2) If the reorganization took place after December 31, 2013,
for each affected district:

(A) Multiply the average daily attendance for the fiscal year
immediately preceding the fiscal year in which the reorganization
is to become effective by the per unit of average daily attendance
amount computed pursuant to subparagraph (A) of paragraph (1)
of subdivision (e) of Section 42238.03.

(B) Add the products determined in subparagraph (A), and
divide by the sum of units of average daily attendance for the fiscal
year immediately preceding the fiscal year in which the
reorganization is to become effective for all affected school
districts.

(3) (A) For purposes of paragraphs (1) and (2), average daily
attendance shall be the funded average daily attendance as of the
second principal apportionment.

(B) If the reorganization includes a divided district, the following
shall apply:

(i) For purposes of paragraph (1), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district.

(ii) For purposes of paragraph (2), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district in the fiscal year the first
reorganization becomes effective. If no average daily attendance
of the divided district is estimated to be served in the first fiscal
year of the reorganization, the divided district’s funding shall not
be included in the blending calculation made pursuant to
subparagraph (A) of paragraph (1) of subdivision (e) of Section
42238.03.

(C) For purposes of paragraph (1) or (2), if the reorganization
includes a former district that has been wholly included in more
than one new or acquiring district, the average daily attendance
shall be the average daily attendance reported pursuant to
subdivision (c) of Section 35735.

(b) For a new district formed as a result of deunification pursuant
to paragraph (4) of subdivision (a) of Section 35511, the funding
amount per unit of average daily attendance pursuant to
subparagraph (A) of paragraph (1) of subdivision (e) of Section
42238.03 shall be equal to the amount calculated for the original
district for the fiscal year immediately preceding the fiscal year in
which the reorganization is to become effective.

SEC. 14.  

Section 35735.7 is added to the Education Code, to
read:

35735.7.  

For a new or acquiring district that has reorganized
pursuant to paragraph (1), (2), or (3) of subdivision (a) of Section
35511 or subdivision (b) of Section 35511, the funding amount
per unit of average daily attendance pursuant to paragraph (4) of
subdivision (a) of Section 42238.03 shall be calculated as follows:

(a) If the reorganization took place before December 31, 2013:

(1) For each affected district, divide the amount of funding
received in the immediately preceding fiscal year pursuant to
paragraph (4) of subdivision (a) of Section 42238.03 as of the
second principal apportionment by the units of average daily
attendance for the fiscal year immediately preceding the fiscal year
in which the reorganization is to become effective.

(2) For each affected district, multiply the amount determined
in paragraph (1) by the average daily attendance for the fiscal year
two years before the fiscal year in which the reorganization is to
become effective.

(3) Add the products determined in paragraph (2), and divide
that sum by the sum of the average daily attendance determined
in paragraph (2) for all affected districts.

(b) If the reorganization took place after December 31, 2013:

(1) For each affected district, divide the amount of funding
received in the immediately preceding fiscal year pursuant to
paragraph (4) of subdivision (a) of Section 42238.03 as of the
second principal apportionment by the units of average daily
attendance for the fiscal year prior to the fiscal year in which the
reorganization is to become effective.

(2) For each affected district, multiply the amount determined
in paragraph (1) by the average daily attendance for the fiscal year
immediately preceding the fiscal year in which the reorganization
is to become effective.

(3) Add the products determined in paragraph (2), and divide
that sum by the sum of the average daily attendance determined
in paragraph (2) for all affected districts.

(c) (1) For purposes of subdivisions (a) and (b), average daily
attendance shall be the funded average daily attendance as of the
second principal apportionment.

(2) If the reorganization includes a divided district, the following
shall apply:

(A) For purposes of subdivision (a), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district.

(B) For purposes of subdivision (b), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district in the first fiscal year the
reorganization becomes effective. If no average daily attendance
of the divided district is estimated to be served in the first fiscal
year of the reorganization, the divided district’s funding shall not
be included in the blending calculation pursuant to paragraph (4)
of subdivision (a) of Section 42238.03.

(3) For purposes of subdivisions (a) and (b), if the reorganization
includes a former district that has been wholly included in more
than one new or acquiring district, the average daily attendance
shall be the average daily attendance reported pursuant to
subdivision (c) of Section 35735.

SEC. 15.  

Section 35735.8 is added to the Education Code, to
read:

35735.8.  

(a) For a new or acquiring district that has
reorganized pursuant to paragraph (1), (2), or (3) of subdivision
(a) of Section 35511 or subdivision (b) of Section 35511, the
funding amount per unit of average daily attendance pursuant to
Sections 42289 to 42289.5, inclusive, for purposes of determining
funding pursuant to paragraph (2) of subdivision (i) of Section
42283.02, shall be calculated as follows:

(1) If the reorganization took place before December 31, 2013,
for each affected district:

(A) Multiply the average daily attendance for the fiscal year
two years before the fiscal year in which the reorganization is to
become effective by the amount computed pursuant to subdivision
(b) of Section 42287 for the fiscal year two years before the fiscal
year in which the reorganization is to become effective.

(B) Add the products determined in subparagraph (A), and
divide that sum by the sum of units of average daily attendance
for the fiscal year two years before the fiscal year in which the
reorganization is to become effective for all affected districts.

(C) Increase the amount determined in subparagraph (B) by the
percentage calculated pursuant to paragraph (2) of subdivision (d)
of Section 42238.02 for the fiscal year immediately preceding the
fiscal year in which reorganization is to become effective.

(2) If the reorganization took place after December 31, 2013,
for each affected district:

(A) Multiply the average daily attendance for the fiscal year
immediately preceding the fiscal year in which the reorganization
is to become effective by the amount computed pursuant to
subdivision (b) of Section 42287 for the fiscal year immediately
preceding the fiscal year in which the reorganization is to become
effective.

(B) Add the products determined in subparagraph (A), and
divide that sum by the sum of units of average daily attendance
for the fiscal year immediately preceding the fiscal year in which
the reorganization is to become effective for all affected districts.

(3) (A) For purposes of paragraphs (1) and (2), average daily
attendance shall be the funded average daily attendance as of the
second principal apportionment.

(B) If the reorganization includes a divided district, both of the
following shall apply:

(i) For purposes of paragraph (1), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district.

(ii) For purposes of paragraph (2), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district in the first year the
reorganization becomes effective. If no average daily attendance
of the divided district is estimated to be served in the first year of
the reorganization, the divided district’s funding shall not be
included in the blending calculation pursuant to paragraph (2) of
subdivision (i) of Section 42238.02.

(C) For purposes of paragraph (1) or (2), if the reorganization
includes a former district that has been wholly included in more
than one new or acquiring district, the average daily attendance
shall be the average daily attendance reported pursuant to
subdivision (c) of Section 35735.

(b) For a new district formed as a result of deunification pursuant
to paragraph (4) of subdivision (a) of Section 35511, the funding
amount per unit of average daily attendance shall be equal to the
amount calculated for the original district for the fiscal year
immediately preceding the fiscal year in which the reorganization
is to become effective.

SEC. 16.  

Section 35735.9 is added to the Education Code, to
read:

35735.9.  

(a) For a new district or acquiring district that has
reorganized pursuant to paragraph (1), (2), or (3) of subdivision
(a) of Section 35511 or subdivision (b) of Section 35511, the
funding amount per unit of average daily attendance pursuant to
Sections 42289 to 42289.5, inclusive, for purposes of determining
funding pursuant to subparagraph (D) of paragraph (1) of
subdivision (a) of Section 42283.03, shall be calculated as follows:

(1) If the reorganization took place before December 31, 2013,
for each affected district:

(A) Multiply the average daily attendance for the fiscal year
two years before the fiscal year in which the reorganization is to
become effective by the amount per unit of average daily
attendance that corresponds to the 2012-13 fiscal year funding
amounts pursuant to Sections 42289 to 42289.5, inclusive, and
Section 42238.146, as that section read on June 15, 2015.

(B) Add the products determined in subparagraph (A), and
divide that sum by the sum of units of average daily attendance
for the fiscal year two years before the fiscal year in which the
reorganization is to become effective for all affected districts.

(2) If the reorganization took place after December 31, 2013,
for each affected district:

(A) Multiply the average daily attendance for the fiscal year
immediately preceding the fiscal year in which the reorganization
is to become effective by the amount per unit of average daily
attendance that corresponds to the 2012-13 fiscal year funding
amounts pursuant to Sections 42289 to 42289.5, inclusive, and
Section 42238.146, as that section read on June 15, 2015.

(B) Add the products determined in subparagraph (A), and
divide that sum by the sum of units of average daily attendance
for the fiscal year immediately preceding the fiscal year in which
the reorganization is to become effective for all affected districts.

(3) (A) For purposes of paragraphs (1) and (2), average daily
attendance shall be the funded average daily attendance as of the
second principal apportionment.

(B) If the reorganization includes a divided district, the following
shall apply:

(i) For purposes of paragraph (1), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district.

(ii) For purposes of paragraph (2), the average daily attendance
shall be estimated by the county office of education and reported
to the department based on the units of average daily attendance
to be served by the reorganized district in the first fiscal year the
reorganization becomes effective. If no average daily attendance
of the divided district is estimated to be served in the first fiscal
year of the reorganization, the divided district’s funding shall not
be included in the blending calculation pursuant to subparagraph
(D) of paragraph (1) of subdivision (a) of Section 42238.03.

(C) For purposes of paragraph (1) or (2), if the reorganization
includes a former district that has been wholly included in more
than one new or acquiring district, the average daily attendance
shall be the average daily attendance reported pursuant to
subdivision (c) of Section 35735.

(b) For a new district formed as a result of deunification pursuant
to paragraph (4) of subdivision (a) of Section 35511, the funding
amount per unit of average daily attendance shall be equal to the
amount calculated for the original district for the fiscal year
immediately preceding the fiscal year in which the reorganization
is to become effective.

SEC. 17.  

Section 35735.10 is added to the Education Code, to
read:

35735.10.  

For the purpose of determining funding pursuant to
subparagraph (D) of paragraph (1) of subdivision (e) of Section
42238.03, the following shall apply to districts affected by
reorganization pursuant to Section 35511 or begin delete lapsation end delete begin insert a lapse end insert
pursuant to Section 35780.1:

(a) A new district shall receive the same amount of the 2012-13
fiscal year funding allowance provided for qualifying necessary
small elementary schools and necessary small high schools received
by each former district in the fiscal year immediately preceding
the fiscal year in which the reorganization is to become effective
if the former district has been wholly included in the new district.

(b) An acquiring district shall retain the same amount as the
2012-13 fiscal year funding allowance provided for its qualifying
necessary small elementary schools and necessary small high
schools in the fiscal year immediately preceding the fiscal year in
which the reorganization is to become effective and any such
allowance provided to a former district if the former district has
been wholly included in the acquiring district.

(c) A divided district shall retain the same amount of the
2012-13 fiscal year funding allowance provided for its qualifying
necessary small elementary schools and necessary small high
schools in the fiscal year immediately preceding the fiscal year in
which the reorganization is to become effective.

(d) If the reorganization includes a former district that has been
wholly included in more than one new or acquiring district, the
necessary small school allowance for minimum state aid shall be
determined pursuant to subdivision (c) of Section 35735.

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 35736 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

35736.  

Plans and recommendations may include a proposal
for dividing the property, other than real property, and obligations
of any school district proposed to be divided between two or more
school districts, or proposed to be partially included in one or more
school districts. As used in this section, “property” includes funds,
cash on hand, and moneys due but uncollected on the date
reorganization becomes effective for all purposes, and state
apportionments based on average daily attendance earned in the
year immediately preceding the date reorganization becomes
effective for all purposes. In providing for this division, the plans
and recommendations may consider the assessed valuation of each
portion of the school district, the local control funding formula
allocation pursuant to Section 42238.02, as implemented by Section
42238.03, begin delete per pupil end delete in each school district, the number of children
of school age residing in each portion of the school district, the
value and location of the school property, and such other matters
as may be deemed pertinent and equitable. Any such proposal shall
be an integral part of the proposal and not a separate proposition.