BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 148|
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                                UNFINISHED BUSINESS 


          Bill No:  SB 148
          Author:   McGuire (D), et al.
          Amended:  8/27/15  
          Vote:     21  

           PRIOR VOTES NOT RELEVANT

           SENATE EDUCATION COMMITTEE:  9-0, 9/3/15 (pursuant to Senate  
            Rule 29.10)
           AYES: Liu, Runner, Block, Hancock, Leyva, Mendoza, Monning,  
            Pan, Vidak

           ASSEMBLY FLOOR:  79-0, 9/2/15 (Consent) - See last page for  
            vote

           SUBJECT:   School districts: reorganization: local control  
                     funding formula


          SOURCE:    Superintendent of Public Instruction

          DIGEST:   This bill updates statutory provisions and financial  
          calculations regarding school district reorganization to reflect  
          the state funding transition from revenue limit funding to the  
          local control funding formula (LCFF).  

          Assembly Amendments are substantive and replace the previous  
          contents of this bill regarding the establishment of a career  
          technical education program with provisions dealing with school  
          district reorganizations.  

          ANALYSIS:
          
          Existing law:









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           1) Allows for school district reorganizations, which is the  
             process of forming one or more districts from one or more  
             existing districts and can take many forms.  For example, two  
             or more districts can combine to form a single district, a  
             single district can annex a portion of a neighboring district  
             (in which case the neighboring district also loses  
             territory), or a single district is broken into two or more  
             smaller districts.  

           2) Provides that the amount of funding that the reorganized  
             districts are entitled to be computed by taking into account  
             existing funding formulas and the historical funding levels  
             of the former districts.  

          This bill updates the various statutory provisions governing  
          school district reorganization to reflect the change from  
          revenue limit funding to the LCFF.  Specifically, this bill:  

           1) Defines "affected district" to mean a district that has  
             been, or is proposed to be, affected by an action to  
             reorganize or before an action to lapse a district.

           2) Defines "original district" to mean a district as it existed  
             prior to an action to reorganize or before an action to lapse  
             a district.

           3) Defines "former district" to mean 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 to reorganize or through a lapsation.

           4) Defines "new district" to mean a district that is formed  
             from all or portions of one or more other districts by an  
             action to reorganize.

           5) Defines "acquiring district" to mean a district that has all  
             or portions of one or more other districts transferred into,  
             or lapsed into, its boundaries.

           6) Defines "divided district" to mean 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  








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             reorganize.

           7) Defines the "reorganized portion of a divided district" to  
             mean the portion of the divided district's territory that  
             becomes part of a new district or is transferred into one or  
             more other districts.

           8) Defines the "remaining portion of a divided district" to  
             mean 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.

           9) Defines "reorganized district" to mean a district that is a  
             "new district," an "acquiring district," or a "divided  
             district."

           10)Defines "component district" to mean an elementary school  
             district which is included within a high school district or  
             an elementary school district excluded from an action to  
             unify a high school district but which continues to feed into  
             the high schools of the new unified school district.

           11)Replaces references to "base revenue limit" with references  
             to "local control funding formula (LCFF) entitlement."

           12)Repeals the procedures for the computation of adjustments  
             for employee salaries and benefits for a newly reorganized  
             district based on revenue limit differences between the  
             former districts.

           13)Specifies procedures for making the following calculations  
             for reorganized districts:

             a)   The LCFF entitlement;
             b)   The percentage of unduplicated pupils;
             c)   Categorical program funding;
             d)   Economic recovery target;
             e)   Transition funding (from revenue limits to the LCFF),  
               including the calculation of revenue limit funding rates  
               used to determine base funding during transition; 
             f)   Prior year funding gap; and
             g)   Necessary small school add-on.








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          Comments
          
          Need for the bill.  According to the author's office, "the  
          passage of the Local Control Funding Formula (LCFF) in 2013-14  
          replaced the former school finance system under revenue limits  
          that had been in existence for nearly 40 years.  The statutes  
          associated with the former revenue limit funding system were  
          voluminous and complex, in part because revenue limits were used  
          for a variety of ancillary purposes, not just for funding (e.g.  
          class size penalties).

          "In the adoption of LCFF, an attempt was made to provide a  
          methodology to blend LCFF funding for newly organized school  
          districts.  Unfortunately, that language as written does not  
          address the specific categories of LCFF funding and how they  
          should be calculated for each affected school district.   
          Therefore, the current LCFF statutes relating to district  
          reorganization is not necessarily revenue neutral for either the  
          school districts or the state." 

          Local Control Funding Formula.  Chapter 47, Statutes of 2013 (AB  
          97, Committee on Budget), and subsequent legislation created the  
          LCFF, which consolidated most of the state's categorical  
          programs with general purpose revenue limit funding and would be  
          phased in over the coming years.  One of the main principles  
          behind the LCFF is that English learners and low-income students  
          require more attention and resources in the classroom than  
          students who do not have these same challenges.  By providing  
          more services (and in turn, additional funding) to these student  
          populations, it is widely believed that this will help close the  
          achievement gap and help all students perform better.

          District reorganizations under LCFF.  According to the  
          California Department of Education (CDE), about a dozen  
          districts are currently in the process of reorganization and  
          that in the upcoming 2015-16 school year, there will be a  
          lapsation of the Citrus South Tule Elementary School District  
          into the Porterville Unified School District in Tulare County.   
          The current LCFF statutes relating to district reorganization  
          are not revenue neutral for some school districts or the state.   
          This bill specifies how LCFF funding components will be  








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          calculated for various types of district reorganizations in a  
          manner that is revenue neutral to the state and is equitable for  
          all of the affected school districts.  
          
          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Assembly Appropriations Committee, the CDE  
          indicates no additional administrative costs as a result of this  
          bill.  School district reorganization is a voluntary activity;  
          therefore, any costs associated with this bill will not  
          constitute a state mandate.  The impact to individual school  
          districts is unknown.  The intent of this bill is to ensure  
          funding for reorganizing school districts is calculated in a  
          manner that is revenue neutral to the state and equitable to all  
          affected school districts.


          SUPPORT:   (Verified9/2/15)


          Superintendent of Public Instruction (source)


          OPPOSITION:   (Verified9/2/15)


          None received

           ASSEMBLY FLOOR:  79-0, 9/02/15
           AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,  
            Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  








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            Wilk, Williams, Wood, Atkins
           NO VOTE RECORDED: Jones-Sawyer


          Prepared by: Lenin Del Castillo / ED. / (916) 651-4105
          9/3/15 18:27:07


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