BILL NUMBER: SB 78	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 16, 2015

INTRODUCED BY   Committee on Budget and Fiscal Review

                        JANUARY 9, 2015

    An act relating to the Budget Act of 2015.  
An act to amend Sections 1240, 1622, 1623, 1624, 35160.5, 35736,
35757,   41203.7, 41320.1, 41329.55, 41341, 41344, 41376,
41376.1, 41544, 42127, 42127.1, 42127.2, 42127.3, 42127.8, 42238.01,
42280, 42282, 42283, 42284, 42285, 42286, 42287, 45037, 46602, 46603,
47630, 47630.5, 47635, 47663, 48310, 48359.5, 52315, 52319, 52327,
52329, 52334, 52335, 52335.12, and 63001 of, to amend the heading of
Article 7 (commencing with Section 60117) of Chapter 1 of Part 33 of
Division 4 of Title 2 of, to repeal Sections 1242, 1242.5, 2509,
2550, 2550.1, 2550.2, 2550.4, 2550.5, 2550.6, 2550.7, 2551.3, 2557,
2557.5, 2558.1, 2558.3, 2558.4, 2558.45, 2558.46, 2558.5, 2558.6,
14022.5, 33128.2, 35735.3, 41209, 41334, 41338, 41610,  
42238.4, 42238.41, 42238.42, 42238.43, 42238.44, 42238.445, 42238.45,
42238.46, 42238.48, 42238.485, 42238.49, 42238.7, 42238.8, 42238.9,
42238.95, 42238.11, 42238.12, 42238.13, 42238.14, 42238.145,
42238.146, 42238.17, 42238.23, 42239, 42240, 42240.1, 42241.3,
42241.7, 42243.7, 42244, 42245, 42281, 42303, 42604, 46201.1, 52324,
52324.5, 52335.1, 52335.2, 52335.3, 52335.4, 52335.5, 52335.6, and
60117 of, to repeal Article 3.5 (commencing with Section 2560) of
Chapter 12 of Part 2 of Division 1 of Title 1 of, and to repeal
Article 4.5 (commencing with Section 42290) of Chapter 7 of Part 24
of Division 3 of Title 2 of, the Education Code, relating to
education finance, and making an appropriation therefor, to take
effect immediately, bill related to the budget. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 78, as amended, Committee on Budget and Fiscal Review. 
Budget Act of 2015.   Education finance: local control
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, before July 1, 2013,
established a public school financing system that required funding
for county superintendents of schools and school districts to be
calculated pursuant to a revenue limit, as specified, and required
funding for charter schools to be calculated pursuant to a
general-purpose entitlement, except as provided, and required the
revenue limit and general-purpose entitlement to be composed of,
among other things, state aid and certain local revenues. Existing
law also establishes various categorical education programs under
which funding was provided for specific educational purposes.
Existing law, commencing July 1, 2013, revised and recast the
provisions related to the public 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.  
   This bill would, among other things, repeal provisions requiring
or authorizing many categorical education programs. The bill would
repeal provisions relating to the revenue limit and would replace
references to the former review limit and general-purpose entitlement
calculations with the references to the current local control
funding formula calculation. The bill would, commencing with the
2014-15 fiscal year, revise the authorization for a school
participating in a special assistance alternative authorized under
the federal National School Lunch Program to establish a base year
for purposes of the local control funding formula for determining
pupils eligible for free or reduced-price meals, as specified. The
bill would require specified information to be included in an
alternative household income data collection form for the federal
National School Lunch Program for purposes of the local control
funding formula. The bill would also change the funding calculations
for necessary small schools.  
   (2) Existing law requires a county superintendent of schools to
annually present a report, on or before August 15, to the governing
board of the school district and the Superintendent of Public
Instruction regarding the fiscal solvency of a school district with a
disapproved budget, qualified interim certification, or a negative
interim certification, or that is determined to be in a position of
fiscal uncertainty.  
   This bill would instead require a county superintendent of schools
to present the report on or before September 15.  
   (3) Existing law specifies how funds appropriated pursuant to a
specified budget item of the Budget Act of 2006 for specified county
offices of education for site visits shall be allocated.  
   This bill would delete that provision.  
   (4) Existing law, on or before July 1 of each fiscal year,
requires the county board of education to adopt an annual budget for
the budget year and file the budget with the Superintendent of Public
Instruction, the county board of supervisors, and the county
auditor. Existing law requires the Superintendent to examine the
budget, as specified, and, on or before August 15, approve or
disapprove the budget, as specified. If the Superintendent
disapproves the budget, existing law requires the county
superintendent of schools and the county board of education, on or
before September 8, to review recommendations of the Superintendent
at a regularly scheduled meeting of the county board of education and
respond to those recommendations, as specified. Existing law
requires the Superintendent to examine a revised budget, as
specified, and, on or before October 8, to approve or disapprove the
revised budget. If the Superintendent disapproves the budget,
existing law requires him or her to call for the formation of a
budget review committee, and requires the budget review committee, on
or before October 31, to review the proposed budget, as specified.
If the budget review committee disapproves the budget of the county
office of education, existing law requires the Superintendent to
either approve or disapprove the budget, as specified. If the
Superintendent disapproves the budget, existing law authorizes the
Superintendent or his or her designee to do certain things for the
remainder of the year, including, among others, to develop and adopt,
in consultation with the county superintendent of schools and the
county board of education, on or before November 30, a fiscal plan
and budget for the county office of education, as specified.

   This bill would, among other things, extend those dates by one
month to September 15, October 8, November 8, November 30, and
December 31, respectively.  
   (5) Existing law, on or before July 1 of each fiscal year,
requires a school district to adopt a budget for the subsequent
fiscal year and file the adopted budget with the county
superintendent of schools, as specified. Existing law requires the
county superintendent of schools to examine the adopted budget, as
specified, make certain determinations related to the adopted budget,
and, on or before August 15, approve, conditionally approve, or
disapprove the adopted budget for each school district, as specified.
If the county superintendent of schools conditionally approves or
disapproves the budget, existing law requires the governing board of
the school district, in conjunction with the county superintendent of
schools, on or before September 8, to review and respond to the
recommendations of the county superintendent of schools as specified.
Existing law requires the county superintendent of schools to
examine the revised budget to make certain determinations and, on or
before October 8, to approve or disapprove the revised budget, as
specified. If the county superintendent of schools disapproves the
budget, existing law requires him or her to call for the formation of
a budget review committee, and requires the budget review committee,
on or before October 31, to review the proposed budget, as
specified. If the budget review committee disapproves the budget of
the school district, existing law requires the Superintendent of
Public Instruction to either approve or disapprove the budget, as
specified. If the Superintendent disapproves the budget, existing law
requires the county superintendent of schools to do certain things,
including, among others, on or before November 30, develop and adopt,
in consultation with the governing board of the school district and
the Superintendent, a fiscal plan and budget for the school district,
as specified.  
   This bill would, among other things, extend those dates by one
month to September 15, October 8, November 8, November 30, and
December 31, respectively.  
   (6) This bill would appropriate $5,994,417,000 from the General
Fund to the Superintendent of Public Instruction for purposes of
allocating those funds to school districts and charter schools
pursuant to the local control funding formula for those local
educational agencies.  
   (7) This bill also would make conforming changes, would correct
cross-references, would delete obsolete provisions, and would make
other nonsubstantive changes.  
   (8) Funds appropriated by this bill would be applied toward the
minimum funding requirements for school districts and community
college districts imposed by Section 8 of Article XVI of the
California Constitution.  
   (9) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
 
   This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2015. 
   Vote: majority. Appropriation:  no   yes
 . Fiscal committee:  no   yes  .
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1240 of the  
Education Code   is amended to read: 
   1240.  The county superintendent of schools shall do all of the
following:
   (a) Superintend the schools of his or her county.
   (b) Maintain responsibility for the fiscal oversight of each
school district in his or her county pursuant to the authority
granted by this code.
   (c) (1) Visit and examine each school in his or her county at
reasonable intervals to observe its operation and to learn of its
problems. He or she annually may present a report of the state of the
schools in his or her county, and of his or her office, including,
but not limited to, his or her observations while visiting the
schools, to the board of education and the board of supervisors of
his or her county.
   (2) (A) For fiscal years 2004-05 to 2006-07, inclusive, to the
extent that funds are appropriated for purposes of this paragraph,
the county superintendent, or his or her designee, annually shall
submit a report, at a regularly scheduled November board meeting, to
the governing board of each school district under his or her
jurisdiction, the county board of education of his or her county, and
the board of supervisors of his or her county describing the state
of the schools in the county or of his or her office that are ranked
in deciles 1 to 3, inclusive, of the 2003 base Academic Performance
Index (API), as described in subdivision (b) of Section 17592.70, and
shall include, among other things, his or her observations while
visiting the schools and his or her determinations for each school
regarding the status of all of the circumstances listed in
subparagraph  (J)   (I)  and teacher
misassignments and teacher vacancies. As a condition for receipt of
funds, the county superintendent, or his or her designee, shall use a
standardized template to report the circumstances listed in
subparagraph  (J)   (I)  and teacher
misassignments and teacher vacancies, unless the current annual
report being used by the county superintendent, or his or her
designee, already includes those details for each school.
   (B) Commencing with the 2007-08 fiscal year, the county
superintendent, or his or her designee, annually shall submit a
report, at a regularly scheduled November board meeting, to the
governing board of each school district under his or her
jurisdiction, the county board of education of his or her county, and
the board of supervisors of his or her county describing the state
of the schools in the county or of his or her office that are ranked
in deciles 1 to 3, inclusive, of the 2006 base API, pursuant to 
former Section  52056.   52056, as that
section read on June 30, 2013.  The annual report shall include
the determinations for each school made by the county superintendent,
or his or her designee, regarding the status of all of the
circumstances listed in subparagraph  (J)   (I)
 and teacher misassignments and teacher vacancies, and the
county superintendent, or his or her designee, shall use a
standardized template to report the circumstances listed in
subparagraph  (J)   (I)  and teacher
misassignments and teacher vacancies, unless the current annual
report being used by the county superintendent, or his or her
designee, already includes those details with the same level of
specificity that is otherwise required by this subdivision. For
purposes of this section, schools ranked in deciles 1 to 3,
inclusive, on the 2006 base API shall include schools determined by
the department to meet either of the following:
   (i) The school meets all of the following criteria:
   (I) Does not have a valid base API score for 2006.
   (II) Is operating in fiscal year 2007-08 and was operating in
fiscal year 2006-07 during the Standardized Testing and Reporting
(STAR) Program testing period.
   (III) Has a valid base API score for 2005 that was ranked in
deciles 1 to 3, inclusive, in that year.
   (ii) The school has an estimated base API score for 2006 that
would be in deciles 1 to 3, inclusive.
   (C) The department shall estimate an API score for any school
meeting the criteria of subclauses (I) and (II) of clause (i) of
subparagraph (B) and not meeting the criteria of subclause (III) of
clause (i) of subparagraph (B), using available test scores and
weighting or corrective factors it deems appropriate. The department
shall post the API scores on its Internet Web site on or before May
1.
   (D) For purposes of this section, references to schools ranked in
deciles 1 to 3, inclusive, on the 2006 base API shall exclude schools
operated by county offices of education pursuant to Section 56140,
as determined by the department. 
   (E) In addition to the requirements above, the county
superintendent, or his or her designee, annually shall verify both of
the following:  
   (i) That pupils who have not passed the high school exit
examination by the end of grade 12 are informed that they are
entitled to receive intensive instruction and services for up to two
consecutive academic years after completion of grade 12 or until the
pupil has passed both parts of the high school exit examination,
whichever comes first, pursuant to paragraphs (4) and (5) of
subdivision (d) of Section 37254.  
   (ii) That pupils who have elected to receive intensive instruction
and services, pursuant to paragraphs (4) and (5) of subdivision (d)
of Section 37254, are being served.  
   (F) 
    (E)  (i) Commencing with the 2010-11 fiscal year and
every third year thereafter, the Superintendent shall identify a list
of schools ranked in deciles 1 to 3, inclusive, of the API for which
the county superintendent, or his or her designee, annually shall
submit a report, at a regularly scheduled November board meeting, to
the governing board of each school district under his or her
jurisdiction, the county board of education of his or her county, and
the board of supervisors of his or her county that describes the
state of the schools in the county or of his or her office that are
ranked in deciles 1 to 3, inclusive, of the base API as defined in
clause (ii).
   (ii) For the 2010-11 fiscal year, the list of schools ranked in
deciles 1 to 3, inclusive, of the base API shall be updated using the
criteria set forth in clauses (i) and (ii) of subparagraph (B),
subparagraph (C), and subparagraph (D), as applied to the 2009 base
API and thereafter shall be updated every third year using the
criteria set forth in clauses (i) and (ii) of subparagraph (B),
subparagraph (C), and subparagraph (D), as applied to the base API of
the year preceding the third year consistent with clause (i).
   (iii) The annual report shall include the determinations for each
school made by the county superintendent, or his or her designee,
regarding the status of all of the circumstances listed in
subparagraph  (J)   (I)  and teacher
misassignments and teacher vacancies, and the county superintendent,
or his or her designee, shall use a standardized template to report
the circumstances listed in subparagraph  (J)  
(I)  and teacher misassignments and teacher vacancies, unless
the current annual report being used by the county superintendent, or
his or her designee, already includes those details with the same
level of specificity that is otherwise required by this subdivision.

   (G) 
    (F)  The county superintendent of the Counties of
Alpine, Amador, Del Norte, Mariposa, Plumas, and Sierra, and the City
and County of San Francisco shall contract with another county
office of education or an independent auditor to conduct the required
visits and make all reports required by this paragraph. 
   (H) 
    (G)  On a quarterly basis, the county superintendent, or
his or her designee, shall report the results of the visits and
reviews conducted that quarter to the governing board of the school
district at a regularly scheduled meeting held in accordance with
public notification requirements. The results of the visits and
reviews shall include the determinations of the county
superintendent, or his or her designee, for each school regarding the
status of all of the circumstances listed in subparagraph 
(J)   (I)  and teacher misassignments and teacher
vacancies. If the county superintendent, or his or her designee,
conducts no visits or reviews in a quarter, the quarterly report
shall report that fact. 
   (I) 
    (H)  The visits made pursuant to this paragraph shall be
conducted at least annually and shall meet the following criteria:
   (i) Minimize disruption to the operation of the school.
   (ii) Be performed by individuals who meet the requirements of
Section 45125.1.
   (iii) Consist of not less than 25 percent unannounced visits in
each county. During unannounced visits in each county, the county
superintendent shall not demand access to documents or specific
school personnel. Unannounced visits shall only be used to observe
the condition of school repair and maintenance, and the sufficiency
of instructional materials, as defined by Section 60119. 
   (J) 
    (I)  The priority objective of the visits made pursuant
to this paragraph shall be to determine the status of all of the
following circumstances:
   (i) Sufficient textbooks as defined in Section 60119 and as
specified in subdivision (i).
   (ii) The condition of a facility that poses an emergency or urgent
threat to the health or safety of pupils or  staff 
 staff,  as described in school district policy or
paragraph (1) of subdivision (c) of Section 17592.72.
   (iii) The accuracy of data reported on the school accountability
report card with respect to the availability of sufficient textbooks
and instructional materials, as defined by Section 60119, and the
safety, cleanliness, and adequacy of school facilities, including
good  repair   repair,  as required by
Sections 17014, 17032.5, 17070.75, and 17089. 
   (iv) The extent to which pupils who have not passed the high
school exit examination by the end of grade 12 are informed that they
are entitled to receive intensive instruction and services for up to
two consecutive academic years after completion of grade 12 or until
the pupil has passed both parts of the high school exit examination,
whichever comes first, pursuant to paragraphs (4) and (5) of
subdivision (d) of Section 37254.  
   (v) The extent to which pupils who have elected to receive
intensive instruction and services, pursuant to paragraphs (4) and
(5) of subdivision (d) of Section 37254, are being served. 

   (K) 
    (J)  The county superintendent may make the status
determinations described in subparagraph  (J)  
(I)  during a single visit or multiple visits. In determining
whether to make a single visit or multiple visits for this purpose,
the county superintendent shall take into consideration factors such
as cost-effectiveness, disruption to the schoolsite, deadlines, and
the availability of qualified reviewers. 
   (L) 
    (K)  If the county superintendent determines that the
condition of a facility poses an emergency or urgent threat to the
health or safety of pupils or staff as described in school district
policy or paragraph (1) of subdivision (c) of Section 17592.72, or is
not in good repair, as specified in subdivision (d) of Section 17002
and required by Sections 17014, 17032.5, 17070.75, and 17089, the
county superintendent, among other things, may do any of the
following:
   (i) Return to the school to verify repairs.
   (ii) Prepare a report that specifically identifies and documents
the areas or instances of noncompliance if the school district has
not provided evidence of successful repairs within 30 days of the
visit of the county superintendent or, for major projects, has not
provided evidence that the repairs will be conducted in a timely
manner. The report may be provided to the governing board of the
school district. If the report is provided to the school district, it
shall be presented at a regularly scheduled meeting held in
accordance with public notification requirements. The county
superintendent shall post the report on his or her Internet Web site.
The report shall be removed from the Internet Web site when the
county superintendent verifies the repairs have been completed.
   (d) Distribute all laws, reports, circulars, instructions, and
blanks that he or she may receive for the use of the school officers.

   (e) Annually, on or before  August  
September  15, present a report to the governing board of the
school district and the Superintendent regarding the fiscal solvency
of a school district with a disapproved budget, qualified interim
certification, or a negative interim certification, or that is
determined to be in a position of fiscal uncertainty pursuant to
Section 42127.6.
   (f) Keep in his or her office the reports of the Superintendent.
   (g) Keep a record of his or her official acts, and of all the
proceedings of the county board of education, including a record of
the standing, in each study, of all applicants for certificates who
have been examined, which shall be open to the inspection of an
applicant or his or her authorized agent.
   (h) Enforce the course of study.
   (i) (1) Enforce the use of state textbooks and instructional
materials and of high school textbooks and instructional materials
regularly adopted by the proper authority in accordance with Section
51050.
   (2) For purposes of this subdivision, sufficient textbooks or
instructional materials has the same meaning as in subdivision (c) of
Section 60119.
   (3) (A) Commencing with the 2005-06 school year, if a school is
ranked in any of deciles 1 to 3, inclusive, of the base API, as
specified in paragraph (2) of subdivision (c), and not currently
under review pursuant to a state or federal intervention program, the
county superintendent specifically shall review that school at least
annually as a priority school. A review conducted for purposes of
this paragraph shall be completed by the fourth week of the school
year. For the 2004-05 fiscal year only, the county superintendent
shall make a diligent effort to conduct a visit to each school
pursuant to this paragraph within 120 days of receipt of funds for
this purpose.
   (B) In order to facilitate the review of instructional materials
before the fourth week of the school year, the county superintendent
in a county with 200 or more schools that are ranked in any of
deciles 1 to 3, inclusive, of the base API, as specified in paragraph
(2) of subdivision (c), may utilize a combination of visits and
written surveys of teachers for the purpose of determining
sufficiency of textbooks and instructional materials in accordance
with subparagraph (A) of paragraph (1) of subdivision (a) of Section
60119 and as defined in subdivision (c) of Section 60119. If a county
superintendent elects to conduct written surveys of teachers, the
county superintendent shall visit the schools surveyed within the
same academic year to verify the accuracy of the information reported
on the surveys. If a county superintendent surveys teachers at a
school in which the county superintendent has found sufficient
textbooks and instructional materials for the previous two
consecutive years and determines that the school does not have
sufficient textbooks or instructional materials, the county
superintendent shall within 10 business days provide a copy of the
insufficiency report to the school district as set forth in paragraph
(4).
   (C) For purposes of this paragraph, "written surveys" may include
paper and electronic or online surveys.
   (4) If the county superintendent of schools determines that a
school does not have sufficient textbooks or instructional materials
in accordance with subparagraph (A) of paragraph (1) of subdivision
(a) of Section 60119 and as defined by subdivision (c) of Section
60119, the county superintendent shall do all of the following:
   (A) Prepare a report that specifically identifies and documents
the areas or instances of noncompliance.
   (B) Provide within five business days of the review, a copy of the
report to the school district, as provided in subdivision (c), or,
if applicable, provide a copy of the report to the school district
within 10 business days pursuant to subparagraph (B) of paragraph
(3).
   (C) Provide the school district with the opportunity to remedy the
deficiency. The county superintendent shall ensure remediation of
the deficiency no later than the second month of the school term.
   (D) If the deficiency is not remedied as required pursuant to
subparagraph (C), the county superintendent shall request the
department to purchase the textbooks or instructional materials
necessary to comply with the sufficiency requirement of this
subdivision. If the department purchases textbooks or instructional
materials for the school district, the department shall issue a
public statement at the first regularly scheduled meeting of the
state board occurring immediately after the department receives the
request of the county superintendent and that meets the applicable
public notice requirements, indicating that the district
superintendent and the governing board of the school district failed
to provide pupils with sufficient textbooks or instructional
materials as required by this subdivision. Before purchasing the
textbooks or instructional materials, the department shall consult
with the school district to determine which textbooks or
instructional materials to purchase. The amount of funds necessary
for the purchase of the textbooks and materials is a loan to the
school district receiving the textbooks or instructional materials.
Unless the school district repays the amount owed based upon an
agreed-upon repayment schedule with the Superintendent, the
Superintendent shall notify the Controller and the Controller shall
deduct an amount equal to the total amount used to purchase the
textbooks and materials from the next principal apportionment of the
school district or from another apportionment of state funds.
   (j) Preserve carefully all reports of school officers and
teachers.
   (k) Deliver to his or her successor, at the close of his or her
official term, all records, books, documents, and papers belonging to
the office, taking a receipt for them, which shall be filed with the
department.
   (  l  ) (1) Submit two reports during the fiscal year to
the county board of education in accordance with the following:
   (A) The first report shall cover the financial and budgetary
status of the county office of education for the period ending
October 31. The second report shall cover the period ending January
31. Both reports shall be reviewed by the county board of education
and approved by the county superintendent no later than 45 days after
the close of the period being reported.
   (B) As part of each report, the county superintendent shall
certify in writing whether or not the county office of education is
able to meet its financial obligations for the remainder of the
fiscal year and, based on current forecasts, for two subsequent
fiscal years. The certifications shall be classified as positive,
qualified, or negative, pursuant to standards prescribed by the
Superintendent, for the purposes of determining subsequent state
agency actions pursuant to Section 1240.1. For purposes of this
subdivision, a negative certification shall be assigned to a county
office of education that, based upon current projections, will not
meet its financial obligations for the remainder of the fiscal year
or for the subsequent fiscal year. A qualified certification shall be
assigned to a county office of education that may not meet its
financial obligations for the current fiscal year or two subsequent
fiscal years. A positive certification shall be assigned to a county
office of education that will meet its financial obligations for the
current fiscal year and subsequent two fiscal years. In accordance
with those standards, the Superintendent may reclassify a
certification. If a county office of education receives a negative
certification, the Superintendent, or his or her designee, may
exercise the authority set forth in subdivision (c) of Section 1630.
Copies of each certification, and of the report containing that
certification, shall be sent to the Superintendent at the time the
certification is submitted to the county board of education. Copies
of each qualified or negative certification and the report containing
that certification shall be sent to the Controller at the time the
certification is submitted to the county board of education.
   (i) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each county office of education 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.
   (ii) For the 2011-12 fiscal year, the county superintendent shall
not be required 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.
   (iii) 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.
   (2) All reports and certifications required under this subdivision
shall be in a format or on forms prescribed by the Superintendent,
and shall be based on standards and criteria for fiscal stability
adopted by the state board pursuant to Section 33127. The reports and
supporting data shall be made available by the county superintendent
to an interested party upon request.
   (3) This subdivision does not preclude the submission of
additional budgetary or financial reports by the county
superintendent to the county board of education or to the
Superintendent.
   (4) The county superintendent is not responsible for the fiscal
oversight of the community colleges in the county, however, he or she
may perform financial services on behalf of those community
colleges.
   (m) If requested, act as agent for the purchase of supplies for
the city and high school districts of his or her county.
   (n) For purposes of Section 44421.5, report to the Commission on
Teacher Credentialing the identity of a certificated person who
knowingly and willingly reports false fiscal expenditure data
relative to the conduct of an educational program. This requirement
applies only if, in the course of his or her normal duties, the
county superintendent discovers information that gives him or her
reasonable cause to believe that false fiscal expenditure data
relative to the conduct of an educational program has been reported.
   (o) If any activities authorized pursuant to this section are
found to be a state reimbursable mandate pursuant to Section 6 of
Article XIII B of the California Constitution, funding provided for
school districts and county offices of education pursuant to Sections
2574, 2575, 42238.02, and 42238.03 shall be used to directly offset
any mandated costs.
   SEC. 2.    Section 1242 of the   Education
Code   is repealed.  
   1242.  (a) Commencing with the 2006-07 fiscal year, funds
appropriated pursuant to Item 6110-266-0001 of Section 2.0 of Chapter
47 of the Statutes of 2006 to county offices of education for site
visits conducted pursuant to Section 1240, shall be allocated as
follows:
   (1) Two thousand five hundred dollars ($2,500) for each elementary
school.
   (2) Three thousand five hundred dollars ($3,500) for each middle
or junior high school.
   (3) Five thousand dollars ($5,000) for each high school.
   (b) In addition to the funds described in subdivision (a), county
offices of education shall receive additional funding for sites whose
enrollment in the prior year is 20 percent greater than the average
enrollment of all sites for the prior year as follows:
   (1) Two dollars and fifty cents ($2.50) for each pupil that
exceeds a total elementary school enrollment of 856 pupils.
   (2) Three dollars and fifty cents ($3.50) for each pupil that
exceeds a total middle school or junior high school enrollment of
1,427 pupils.
   (3) Five dollars ($5.00) for each pupil that exceeds a total high
school enrollment of 2,296 pupils.
   (c) County offices of education that are responsible for visiting
more than 150 schoolsites shall receive an additional allocation of
one dollar ($1.00) per pupil for the total prior year enrollment of
all sites visited.
   (d) The minimum amount for allocation pursuant to this section to
county offices of education shall be ten thousand dollars ($10,000).

   SEC. 3.    Section 1242.5 of the   Education
Code   is repealed.  
   1242.5.  On or before March 31, 2007, the department shall review
the actual costs of 2005-06 fiscal year site visits conducted
pursuant to Section 1240. If the department determines that a county
office of education did not expend the funds allocated for this
purpose during the 2005-06 fiscal year, the amount that exceeds the
amount spent shall revert to the extraordinary cost pool created by
Chapter 710 of the Statutes of 2005 and shall be available to cover
the extraordinary costs incurred by county offices of education as a
result of the reviews conducted pursuant to Section 1240. Based on a
determination by the department and the Department of Finance that it
was necessary for a county office of education to incur
extraordinary costs to conduct the site visits, funds in the amount
necessary to cover these costs shall be allocated to the county
office of education by June 30, 2007. 
   SEC. 4.    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 the
budget with the Superintendent, 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. For
the 2014-15 fiscal year and each fiscal year thereafter, the county
board of education shall not adopt a budget before the county board
of education adopts a local control and accountability plan or
approves an update to an existing local control and accountability
plan if an existing local control and accountability plan or update
to a local control and accountability plan is not effective during
the budget year. The county board of education shall not adopt a
budget that does not include the expenditures identified in the local
control and accountability plan and any annual update to the local
control and accountability plan that will be effective for the budget
year. Notwithstanding any other provision of this article, for the
2014-15 fiscal year and each fiscal year thereafter, the budget shall
not be adopted or approved by the Superintendent before a local
control and accountability plan or update to an existing local
control and accountability plan for the budget year is approved.
   (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
  September  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 2014-15 fiscal year and each fiscal year thereafter,
the Superintendent shall disapprove a budget if any of the following
occur:
   (A) The Superintendent has not approved a local control and
accountability plan or an annual update to the local control and
accountability plan filed by a county board of education pursuant to
Section 52070.5 that is effective for the budget year.
   (B) The Superintendent determines that the budget does not include
the expenditures necessary to implement the local control and
accountability plan or an annual update to the local control and
accountability plan that is effective for that budget year.
   (c) In the event of the disapproval of the budget of a county
office of education pursuant to subdivision (b), on or before
 September   October  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 any revisions to
the adopted budget and other proposed actions to be taken, if any, as
a result of those recommendations.
   (d) (1) The Superintendent shall examine the revised budget as
provided in subdivision (c) to determine if 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   on or before November
 8, shall approve or disapprove the revised budget. For the
2014-15 fiscal year and each fiscal year thereafter, the
Superintendent shall disapprove a revised budget if the
Superintendent determines that the revised budget does not include
the expenditures necessary to implement the local control and
accountability plan or an annual update to the local control and
accountability plan approved by the Superintendent pursuant to
Section 52070.5 that is effective for the budget year. If the
Superintendent disapproves the budget, he or she shall call for the
formation of a budget review committee pursuant to Section 1623.
   (2) Notwithstanding any other law, for the 2014-15 fiscal year and
each fiscal year thereafter, if the Superintendent disapproves the
budget for the sole reason that the Superintendent has not approved a
local control and accountability plan or an annual update to the
local control and accountability plan filed by the county board of
education pursuant to Section 52070.5, the Superintendent shall not
call for the formation of a budget review committee pursuant to
Section 1623.
   (e) 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.
   SEC. 5.   Section 1623 of the   Education
Code   is amended to read: 
   1623.  (a) The budget review committee shall be composed of three
persons and shall be selected by the county superintendent of schools
and the county board of education solely from a list of no fewer
than five candidates provided by the  Superintendent of
Public Instruction.   Superintendent.  The
candidates shall be persons who have expertise in the management of a
school district or county office of education, including, but not be
limited to, the fiscal and educational aspects of that management.
   (b) No later than five working days after the receipt of the
candidate list described in subdivision (a), the county
superintendent of schools and the county board of education shall
select the budget review committee. If the county superintendent of
schools and the county board of education fail to select a committee
within the period of time permitted by this subdivision, the
Superintendent  of Public Instruction  instead shall
select and convene the budget review committee no later than 10
working days after the receipt by the county superintendent of
schools and the county board of education of the candidate list.
   (c)  No later than October 31,   On or before
November 30,  the budget review committee shall review the
proposed budget of the county office of education and the underlying
fiscal policies of that county office of education, and shall
transmit to the  Superintendent of Public Instruction,
  Superintendent,  the county superintendent of
schools, and the county board of education either of the following:
   (1) The recommendation that the budget be approved.
   (2) A report disapproving the budget and setting forth
recommendations for revisions to the budget that would enable the
county office of education to meet its financial obligations both in
the budget year and with regard to multiyear financial commitments.
   (d) Upon the request of the budget review committee, the
Superintendent  of Public Instruction  may extend
the deadline set forth in subdivision (c) for a period of not more
than 15 working days.
   (e) The Superintendent  of Public Instruction 
shall develop criteria and procedures governing the performance by
budget review committees of their duties under this section.
   (f) The members of the budget review committee shall be reimbursed
for their services and associated expenses while on official
business, at rates established by the  State Board of
Education.   state board. 
   SEC. 6.    Section 1624 of the   Education
Code   is amended to read: 
   1624.  (a) If the budget review committee established pursuant to
Section 1623 disapproves the budget of the county office of
education, within five working days following the receipt of the
committee's report, the county superintendent of schools and the
county board of education may submit a response to the 
Superintendent of Public Instruction,   Superintendent,
 including any revisions to the adopted budget and any other
proposed action to be taken as a result of the recommendations of the
budget review committee.
   (b) Based upon the recommendations of the budget review committee
provided pursuant to subdivision (c) of Section 1623, and any
response provided pursuant to subdivision (a), the Superintendent
 of Public Instruction  shall either approve or
disapprove the budget of the county office of education. If the
Superintendent  of Public Instruction  disapproves
the budget, the superintendent or his or her designee may do any of
the following for the remainder of the current fiscal year:
   (1) On or before  November 30,   December 31,
 develop and adopt, in consultation with the county
superintendent of schools and the county board of education, a fiscal
plan and budget for the county office of education that will allow
the county office of education to meet its financial obligations both
in the budget year and with regard to the multiyear financial
commitments. The county board of education and the county
superintendent of schools shall govern the operation of the county
office of education for the budget year in accordance with that
fiscal plan and budget. The deadline set forth in this paragraph
shall be modified to reflect any extension granted under subdivision
(d) of Section 1623.
   (2) Cancel purchase orders, prohibit the issuance of nonsalary
warrants, and otherwise stay or rescind any action that is
inconsistent with the fiscal plan and budget adopted pursuant to
paragraph (1). The Superintendent  of Public Instruction
 shall inform the county board of education and the county
superintendent of schools in writing of his or her justification for
any exercise of authority under this paragraph.
   (3) Monitor and review the operation of the county office of
education.
   (4) Determine the need for additional staff and may employ, at
county office of education expense, short-term analytical assistance
or expertise to validate financial information if the county does not
have the expertise or staff.
   (5) Require the county office of education to encumber all
contracts and other obligations, to prepare appropriate cash flow
analyses and monthly or quarterly budget revisions, and to
appropriately record all receivables and payables.
   (6) Determine whether there are any financial problem areas and
may employ, at county office of education expense, a certified public
accounting firm to investigate financial problem areas.
   (7) Withhold compensation of the members of the county board of
education and the county superintendent for failure to provide
requested financial information.
   (c) The county office of education shall pay reasonable fees
charged by the Superintendent of Public Instruction for actual
administrative expenses incurred pursuant to subdivision (b), or
costs associated with improving the county office of education's
financial management practices.
   (d) This section shall not be construed to authorize the
Superintendent  of Public Instruction  to abrogate
any provision of a collective bargaining agreement that was entered
into by a county office of education prior to the date upon which the
Superintendent  of Public Instruction  disapproved
the budget of the county office of education pursuant to subdivision
(b).
   (e) As he or she deems necessary for the purposes set forth in
subdivision (b), the Superintendent  of Public Instruction
 may seek from the county office of education, or otherwise
obtain, additional information regarding the budget or operations of
the county office of education, through a financial or management
review of the county office of education, a cash-flow projection, or
other appropriate means.
   SEC. 7.    Section 2509 of the   Education
Code  is repealed.  
   2509.  (a) Whenever a county board of supervisors adopts the
provisions of Section 1080 or 42649 and thereby transfers certain
duties of the county auditor to the county superintendent of schools
as provided therein, the revenue limit amount computed pursuant to
subdivision (a) of Section 2551 for that county superintendent of
schools shall, commencing with the fiscal year in which the effective
date of the transfer occurs, be increased by an amount equivalent to
the expenditures from the county general fund used to provide those
services of the county auditor in the fiscal year immediately prior
to the date of the transfer of functions to the county superintendent
of schools. The amount of the increase shall be mutually agreed upon
by both the county board of supervisors and the county
superintendent of schools, as required by subdivision (a) of Section
3 of Article XIII B of the California Constitution. The
Superintendent of Public Instruction shall adjust the revenue limit
computed pursuant to subdivision (a) of Section 2551 prior to the
application of the inflation allowance specified in Section 2557.
   (b) Commencing with the fiscal year in which the effective date of
the transfer occurs, the county auditor shall, from the county's
allocation of taxes, add to the allocation of taxes to the county
superintendent of schools, computed pursuant to Chapter 6 (commencing
with Section 95) of Part 0.5 of the Revenue and Taxation Code, an
amount equal to the amount of the increase agreed upon pursuant to
subdivision (a), increased by the percentage growth in the taxable
assessed value from the equalized assessment roll for the county, for
the fiscal year in which the effective date of the transfer occurs,
as compared to the fiscal year prior to the transfer. In each fiscal
year thereafter, the amount to be added to the allocation of taxes to
the county superintendent of schools shall be the amount added
pursuant to this subdivision in the prior fiscal year, increased by
the percentage growth in the taxable assessed value from the
equalized assessment roll for the county for the then current fiscal
year, as compared to the prior fiscal year. 
   SEC. 8.    Section 2550 of the   Education
Code   is repealed.  
   2550.  For each fiscal year, the Superintendent shall make the
following computations to determine the amount to be allocated for
direct services and other purposes provided by county superintendents
of schools:
   (a) For programs operated pursuant to subdivision (a) of Section
14054, the Superintendent shall:
   (1) Determine the allowances that county superintendents received
per unit of average daily attendance in the prior fiscal year. The
Superintendent shall increase each amount by a percentage equal to
the inflation allowance calculated for the current fiscal year
pursuant to Section 2557.
   (2) Multiply each amount determined in paragraph (1) by the actual
number of units of average daily attendance in the prior fiscal year
for programs maintained by each county superintendent. For purposes
of this paragraph, the number of units of average daily attendance
shall include only units generated by elementary districts with less
than 901 units of average daily attendance, high school districts
with less than 301 units of average daily attendance, and unified
school districts with less than 1,501 units of average daily
attendance within each county superintendent's jurisdiction.
   (b) For programs operated pursuant to subdivision (b) of Section
14054, the Superintendent shall:
   (1) (A) For the 1999-2000 fiscal year, determine the rate per unit
of average daily attendance calculated for each county office of
education pursuant to subdivision (b) of Section 2567 and increase
each rate by a percentage equal to the inflation allowance calculated
in Section 2557.
   (B) For the 2000-01 fiscal year, determine the rate per unit of
average daily attendance calculated for each county office of
education pursuant to subdivision (b) of Section 2568 and increase
each rate by a percentage equal to the inflation allowance calculated
in Section 2557.
   (C) For the 2001-02 fiscal year and each fiscal year thereafter,
determine the allowances that county superintendents received per
unit of average daily attendance in the prior fiscal year. The
Superintendent shall increase each amount by a percentage equal to
the inflation allowance calculated for the current fiscal year
pursuant to Section 2557.
   (2) (A) Multiply each amount determined in paragraph (1) by the
units of average daily attendance in the current fiscal year for
programs for kindergarten and grades 1 to 12, inclusive, maintained
by each county superintendent. For the purposes of this paragraph,
average daily attendance shall include only the total units of
average daily attendance credited to all elementary, high school, and
unified school districts within each county superintendent's
jurisdiction and to the county superintendent.
   (B) For purposes of this paragraph, in each of the 2008-09,
2009-10, 2010-11, 2011-12, 2012-13, 2013-14, and 2014-15 fiscal
years, the units of average daily attendance in each of those fiscal
years for programs for kindergarten and grades 1 to 12, inclusive,
maintained by each county superintendent shall include the same
amount of average daily attendance for classes for adults and
regional occupational centers and programs used in the calculation
pursuant to this subdivision for the 2007-08 fiscal year. 
   SEC. 9.    Section 2550.1 of the   Education
Code   is repealed.  
   2550.1.  (a) Commencing with the 2002-03 fiscal year, and each
fiscal year thereafter, for juvenile court school programs operated
by county superintendents of schools pursuant to Article 2.5
(commencing with Section 48645) of Chapter 4 of Part 27 and for
county community school programs operated by county superintendents
of schools pursuant to Chapter 6.5 (commencing with Section 1980) of
Part 2, the Superintendent of Public Instruction shall make the
following computations:
   (1) Apply an inflation adjustment equal to the percentage increase
applied to the statewide average revenue limit for school districts
pursuant to Section 42238.1, multiplied by the revenue limits of the
prior fiscal year for each juvenile court school program and for each
county community school program, including programs with average
daily attendance for pupils enrolled pursuant to subdivision (c) of
Section 1981 that exceeds the average daily attendance claimed in the
1991-92 fiscal year.
   (2) Multiply the revenue limits per unit of average daily
attendance computed in paragraph (1) by the number of units of
average daily attendance for each juvenile court school program and
county community school program operated in that same fiscal year.
   (b) Cost-of-living adjustments to revenue limits per unit average
daily attendance in juvenile court school and county community school
programs operated by county superintendents of schools shall be
computed pursuant to paragraph (1) of subdivision (a) in fiscal years
in which appropriations are provided for that purpose. 
   SEC. 10.    Section 2550.2 of the  
Education Code   is repealed.  
   2550.2.  The Superintendent of Public Instruction shall make the
following computations to determine the revenue limits for juvenile
court school programs operated by county superintendents of schools
pursuant to Article 2.5 (commencing with Section 48645) of Chapter 4
of Part 27:
   (a) For the 1985-86 fiscal year and each fiscal year thereafter,
add to the prior fiscal year revenue limit per unit of average daily
attendance for juvenile court school programs all of the following
amounts:
   (1) An equalization adjustment for revenue limits per unit of
average daily attendance that in the 1988-89 fiscal year were below
the statewide average for that fiscal year, computed as follows:
   (A) Subtract the county's 1988-89 fiscal year revenue limit per
unit of average daily attendance from the statewide average revenue
limit for juvenile court school programs for the 1988-89 fiscal year.

   (B) Notwithstanding subdivision (c), for the 1989-90 fiscal year,
the amount calculated pursuant to subparagraph (A).
   (2) An inflation adjustment equal to the percentage increase
applied to the statewide average revenue limit for school districts
multiplied by the statewide average revenue limit for juvenile court
school programs for the prior fiscal year.
   (b) The Superintendent of Public Instruction shall multiply the
revenue limit per unit of average daily attendance computed in
subdivision (a) by the number of units of average daily attendance
for county juvenile court school programs for the current fiscal
year.
   (c) In no event shall the amount computed pursuant to paragraph
(1) of subdivision (a) exceed the amount computed pursuant to
paragraph (2) of subdivision (a).
   (d) As a condition of receiving an equalization adjustment
pursuant to paragraph (1) of subdivision (a), the county
superintendent of schools shall certify to the Superintendent of
Public Instruction that all the funds received pursuant to this
section are expended solely for purposes of operating juvenile court
school programs pursuant to Article 2.5 (commencing with Section
48645) of Chapter 4 of Part 27 or of serving pupils enrolled in
community schools pursuant to subdivision (c) of Section 1981.
   (e) In any fiscal year in which Section 2550.1 is operative, this
section shall be inoperative. 
   SEC. 11.   Section 2550.4 of the   Education
Code   is repealed.  
   2550.4.  (a) Effective July 1, 1998, the Superintendent of Public
Instruction shall make one-time adjustments to the revenue limits per
unit of average daily attendance of each county office of education
for those programs which, prior to July 1, 1998, were authorized in
Section 46010 as it read on July 1, 1996, to include certain absences
in reports of attendance made pursuant to Section 41601. Those
one-time adjustments 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 limits per unit of average daily attendance calculated for
those programs, as follows:
   (1) Determine revised revenue limits per unit of average daily
attendance for the 1996-97 fiscal year for each of the programs. Each
revised revenue limit per unit of average daily attendance shall
equal funding received for the program for the 1996-97 fiscal year
that is directly attributable to the original revenue limit per unit
of average daily attendance, divided by the attendance, excluding
absences excused pursuant to subdivision (b) of Section 46010 as it
read on July 1, 1996, reported pursuant to Section 41601 for that
program in the 1996-97 fiscal year.
   (2) For the 1996-97 and 1997-98 fiscal years, recalculate the
revenue limits per unit of average daily attendance for each program
to reflect the revision in the revenue limits per unit of average
daily attendance determined pursuant to paragraph (1).
   (3) The calculation made pursuant to paragraph (2) shall not be
used for apportionment purposes for either of those years or for
adjustments for those years.
   (b) If any county superintendent of schools demonstrates to the
satisfaction of the Superintendent of Public Instruction that,
because of extraordinary circumstances beyond the control of the
county office of education, the amount of absences excused in one or
more county office programs in fiscal year 1996-97 pursuant to
subdivision (b) of Section 46010 as it read on July 1, 1996, was
significantly lower than it would ordinarily have been in comparison
to the amount of actual attendance in fiscal year 1996-97, the
Superintendent of Public Instruction shall make a compensating
adjustment, consistent with the provisions of Section 2 of the
Education Code, in the calculation set forth in this section.

   SEC. 12.    Section 2550.5 of the  
Education Code   is repealed.  
   2550.5.  (a) For each fiscal year to which Section 2550.6 applies,
revenue limit increases calculated pursuant to subdivisions (b) to
(f), inclusive, of Section 2550.6 and revenue limit increases made
pursuant to Section 2550.7 shall be funded from the amounts available
for the inflation adjustment calculated pursuant to paragraph (2) of
subdivision (a) of Section 2550.2. Those amounts shall be allocated
as set forth in this section.
   (b) The revenue limit increases calculated pursuant to
subdivisions (b) to (f), inclusive, of Section 2550.6 shall be funded
as follows:
   (1) The revenue limit increases shall be funded from the funds
derived from any amounts available for the inflation adjustment
calculated pursuant to paragraph
     (2) of subdivision (a) of Section 2550.2.
   (2) If no funds from the inflation adjustment are available, or if
the funds available for the inflation adjustment are not sufficient
to fully fund the revenue limit increases, the Superintendent of
Public Instruction shall reduce the revenue limit increases for the
fiscal year in which the funds are insufficient on a pro rata basis.
   (c) In the first fiscal year that the funds that are available for
the inflation adjustment calculated pursuant to paragraph (2) of
subdivision (a) of Section 2550.2 exceed the amount needed to fully
fund the revenue limit increases calculated pursuant to subdivisions
(b) to (f), inclusive, of Section 2550.6, the Superintendent of
Public Instruction shall, from those excess funds, allocate the
amounts necessary to increase the revenue limits of county
superintendents of schools pursuant to Section 2550.7. If those funds
are not sufficient to fully fund the revenue limit increases
described in Section 2550.7, the Superintendent of Public Instruction
shall make allocations for those revenue limit increases on a pro
rata basis. The Superintendent of Public Instruction shall, in each
subsequent fiscal year that those excess funds are available,
continue to allocate funds for the purposes of Section 2550.7 until
the revenue limits are increased to the level contemplated by that
section.
   (d) If after making the allocation described in subdivision (c)
excess funds are available, the Superintendent of Public Instruction
shall, for the purpose of making an inflation adjustment, allocate
those funds in a uniform amount per unit of average daily attendance
for each school receiving a revenue limit increase pursuant to the
relevant subdivision of subdivision (b), (c), (d), (e), or (f) of
Section 2550.6, with the uniform amount per unit of average daily
attendance reduced as necessary and the amount thereby saved
allocated to any school that does not receive a revenue limit
increase pursuant to the relevant subdivision (b), (c), (d), (e), or
(f) of Section 2550.6 to ensure that it has a funding level per unit
of average daily attendance in the then current fiscal year that is
not less than the highest funding level per unit of average daily
attendance in the then current fiscal year for schools that receive a
revenue limit increase pursuant to the relevant subdivision (b),
(c), (d), (e), or (f) of Section 2550.6.
   (e) If in the 2000-01 fiscal year there are not sufficient funds
available to fully fund revenue limits for schools subject to Section
2550.6 at the level calculated pursuant to subdivision (f) of
Section 2550.6, then the Superintendent of Public Instruction shall
continue to equalize revenue limits per unit of average daily
attendance for those schools in a manner consistent with Section
2550.6 in the 2001-02 fiscal year, and in any subsequent fiscal year,
as necessary, and consistent with subdivision (f) of Section 2550.6.

   (f) The equalization of revenue limits per unit of average daily
attendance pursuant to Section 2550.6 shall be complete in the fiscal
year in which the revenue limit per unit of average daily
attendance, as computed pursuant to Section 2550.6, for each school
subject to this section is within the following range:
   (1) Not less than the statewide average revenue limit per unit of
average daily attendance for pupils enrolled in schools for the prior
fiscal year multiplied by the inflation adjustment computed pursuant
to paragraph (2) of subdivision (a) of Section 2550.2 for the
current fiscal year.
   (2) Not more than the product calculated in paragraph (1)
multiplied by 1.15.
   (g) For the purpose of this section, "school" or "schools" means
juvenile court schools operated by a county superintendent of schools
pursuant to Article 2.5 (commencing with Section 48645) of Chapter 4
of Part 27, and county community schools described in subdivision
(c) of Section 1981, that are subject to Section 2550.6.
   (h) In any fiscal year in which Section 2550.1 is operative, this
section shall be inoperative. 
   SEC. 13.    Section 2550.6 of the  
Education Code   is repealed.  
   2550.6.  The revenue limit per unit of average daily attendance
for each juvenile court school operated by a county superintendent of
schools pursuant to Article 2.5 (commencing with Section 48645) of
Chapter 4 of Part 27 and each county community school described in
subdivision (c) of Section 1981 shall be subject to the following
equalization adjustments:
   (a) For the purposes of determining the revenue limit per unit of
average daily attendance, make the following computations:
   For the 1996-97 fiscal year, compute the statewide average revenue
limit per unit of average daily attendance calculated pursuant to
Section 2550.2 for the 1995-96 fiscal year for pupils enrolled in
juvenile court schools pursuant to Article 2.5 (commencing with
Section 48645) of Chapter 4 of Part 27 and for pupils enrolled in
county community schools pursuant to subdivision (c) of Section 1981,
as that section existed on June 30, 1996.
   (b) If the revenue limit per unit of average daily attendance for
the 1995-96 fiscal year determined pursuant to Section 2550.2 for the
county superintendent of schools is less than the amount determined
in subdivision (a), make the following computations:
   (1) From the amount determined in subdivision (a), subtract the
revenue limit per unit of average daily attendance for the 1995-96
fiscal year determined pursuant to Section 2550.2.
   (2) Multiply the amount determined pursuant to paragraph (1) by
0.20.
   (3) Add the amount determined in paragraph (2) to the revenue
limit per unit of average daily attendance determined for the 1995-96
fiscal year.
   (4) Add the amount determined in paragraph (3) to the inflation
adjustment, if any, provided for the 1996-97 fiscal year pursuant to
subdivision (d) of Section 2550.5. The amount of the sum is the
revenue limit per unit of average daily attendance for the 1996-97
fiscal year for juvenile court schools and county community schools
subject to this subdivision.
   (c) The revenue limit per unit of average daily attendance for the
1997-98 fiscal year for each county superintendent of schools
subject to subdivision (b) shall be determined as follows:
   (1) Increase the amount determined in subdivision (a) by the
inflation adjustment for the 1996-97 fiscal year as determined in
paragraph (2) of subdivision (a) of Section 2550.2.
   (2) If the revenue limit per unit of average daily attendance
calculated pursuant to paragraph (4) of subdivision (b) is less than
the amount determined pursuant to paragraph (1), make the following
computation:
   (A) From the amount calculated pursuant to paragraph (1) subtract
the revenue limit per unit of average daily attendance calculated
pursuant to paragraph (4) of subdivision (b).
   (B) Multiply the amount determined in subparagraph (A) by 0.25.
   (C) Add the amount determined in subparagraph (B) to the revenue
limit per unit of average daily attendance calculated pursuant to
paragraph (4) of subdivision (b) as increased by the inflation
adjustment, if any, provided for the 1997-98 fiscal year pursuant to
subdivision (d) of Section 2550.5. The amount of this sum is the
revenue limit per unit of average daily attendance for the 1997-98
fiscal year for juvenile court schools and county community schools
subject to this subdivision.
   (d) The revenue limit per unit of average daily attendance for the
1998-99 fiscal year for each county superintendent of schools
subject to subdivision (c) shall be determined as follows:
   (1) Increase the amount determined in paragraph (1) of subdivision
(c) by the inflation adjustment for the 1997-98 fiscal year as
determined in paragraph (2) of subdivision (a) of Section 2550.2.
   (2) If the revenue limit per unit of average daily attendance
calculated pursuant to subparagraph (C) of paragraph (2) of
subdivision (c) is less than the amount determined pursuant to
paragraph (1), make the following computation:
   (A) From the amount calculated pursuant to paragraph (1) subtract
the revenue limit per unit of average daily attendance calculated
pursuant to subparagraph (C) of paragraph (2) of subdivision (c).
   (B) Multiply the amount determined in subparagraph (A) by 0.33.
   (C) Add the amount determined in subparagraph (B) to the revenue
limit per unit of average daily attendance calculated pursuant to
subparagraph (C) of paragraph (2) of subdivision (c) as increased by
the inflation adjustment, if any, provided for the 1998-99 fiscal
year pursuant to subdivision (d) of Section 2550.5. The amount of
this sum is the revenue limit per unit of average daily attendance
for the 1998-99 fiscal year for juvenile court schools and county
community schools subject to this subdivision.
   (e) The revenue limit per unit of average daily attendance for the
1999-2000 fiscal year for each county superintendent of schools
subject to subdivision (d) shall be the amount determined as follows:

   (1) Increase the amount determined in paragraph (1) of subdivision
(d) by the inflation adjustment for the 1998-99 fiscal year as
determined in paragraph (2) of subdivision (a) of Section 2550.2.
   (2) If the revenue limit per unit of average daily attendance
calculated pursuant to subparagraph (C) of paragraph (2) of
subdivision (d) is less than the amount determined pursuant to
paragraph (1), make the following computation:
   (A) From the amount calculated pursuant to paragraph (1) subtract
the revenue limit per unit of average daily attendance calculated
pursuant to subparagraph (C) of paragraph (2) of subdivision (d).
   (B) Multiply the amount determined in subparagraph (A) by 0.5.
   (C) Add the amount determined in subparagraph (B) to the revenue
limit per unit of average daily attendance calculated pursuant to
subparagraph (C) of paragraph (2) of subdivision (d) as increased by
the inflation adjustment, if any, provided for the 1999-2000 fiscal
year pursuant to subdivision (d) of Section 2550.5. The amount of
this sum is the revenue limit per unit of average daily attendance
for the 1999-2000 fiscal year for juvenile court schools and county
community schools subject to this subdivision.
   (f) The revenue limit per unit of average daily attendance for the
2000-01 fiscal year for each county superintendent of schools
subject to subdivision (e) shall be the amount determined in
subdivision (a) as adjusted for inflation in the 1996-97, 1997-98,
1998-99, 1999-2000, and 2000-01 fiscal years pursuant to paragraph
(2) of subdivision (a) of Section 2550.2.
   (g) In any fiscal year in which Section 2550.1 is operative this
section shall be inoperative. 
   SEC. 14.    Section 2550.7 of the  
Education Code   is repealed.  
   2550.7.  The Superintendent of Public Instruction shall apportion
funds for each unit of average daily attendance in county community
school programs operated by a county superintendent of schools for
pupils enrolled therein pursuant to subdivision (a), (b), (c), or (d)
of Section 1981 if the county superintendent of schools claims an
annual county community school average daily attendance of 20 or
less, at the revenue limit per unit of average daily attendance
provided for in subdivision (b) of Section 1982. 
   SEC. 15.    Section 2551.3 of the  
Education Code   is repealed.  
   2551.3.  (a) For the 1979-80 fiscal year and each fiscal year
thereafter, the Superintendent of Public Instruction shall make the
following computations to determine the state aid to be allocated for
pregnant minors programs operated by county superintendents of
schools:
   (1) The Superintendent of Public Instruction shall determine
expenditures made by the county office for the 1979-80 fiscal year
and shall divide such amount by the average daily attendance in such
program for the 1979-80 fiscal year.
   (2) For the 1980-81 fiscal year, the quotient computed pursuant to
paragraph (1) shall be increased by 9 percent, and shall be
cumulatively increased in each fiscal year thereafter by the average
inflation allowance applied to unified school district revenue
limits, except that there shall be no inflation adjustment after the
1998-99 fiscal year.
   (3) The amount computed pursuant to paragraph (2) shall be
multiplied by the average daily attendance in pregnant minors
programs for the then current fiscal year.
   (b) The product computed pursuant to paragraph (3) of subdivision
(a) shall be added to the sum computed pursuant to subdivision (a) of
Section 2558.
   (c) The funding provided by this section shall be for the purposes
of subdivision (b) of Section 54749.5 and shall not be adjusted for
inflation. 
   SEC. 16.    Section 2557 of the   Education
Code   is repealed.  
   2557.  (a) For each fiscal year, the prior year revenue limits per
average daily attendance, class, or instructional hour, determined
in Section 2550, and the prior year total revenue limits determined
in Section 2551 shall be increased by a percentage equal to the
percentage increase applied to the statewide average revenue limit
for unified school districts for the then current fiscal year, except
for the 1981-82 fiscal year, the increase shall not exceed 7.2
percent, and for the 1983-84 fiscal year, the increase shall be 8
percent. The resulting amounts shall then be multiplied by the
estimated number of classes, units of average daily attendance,
instructional hour, or pupils receiving special education services,
as appropriate for the then current fiscal year.
   (b) Notwithstanding subdivision (a), the inflation allowance for
the 1982-83 fiscal year shall be reduced by one-fourth of the amount
otherwise prescribed by subdivision (a), as specified in subdivision
(m) of Section 42238, except to the extent a greater allowance may be
funded by funds provided by the Budget Act of 1982. The inflation
allowance for each year following the 1982-83 fiscal year shall be
computed as if any reduction made pursuant to this subdivision had
not been made. 
   SEC. 17.    Section 2557.5 of the  
Education Code   is repealed.  
   2557.5.  (a) For the 1987-88 fiscal year, and each fiscal year
thereafter, the revenue limit of any county superintendent of schools
authorized pursuant to Section 2551, as that section read on January
1, 1999, may be increased by an amount sufficient to provide
additional revenue equal to the expenditure estimated to be incurred
by the county superintendent of schools 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 county superintendent of schools in the
1975-76 fiscal year in complying with the following provisions of the
Unemployment Insurance Code: Article 6 (commencing with Section 821)
of Chapter 3 of Part 1 of Division 1 and former Section 605.2.
   (b) The increase in revenue limit provided in subdivision (a)
shall be adjusted annually, including plus or minus adjustments for
under- or over-estimating expenditures used in determining the
increase in revenue limit provided by subdivision (a) in the previous
fiscal year.
   (c) (1) For the 1994-95 to 2002-03 fiscal years, inclusive, the
amount of the increase computed pursuant to this section may not be
adjusted by the deficit factor applied to the revenue limit of each
county superintendent of schools pursuant to Section 2558.45.
   (2) For the 2003-04 fiscal year and each fiscal year thereafter,
the revenue limit reduction specified in Section 2558.46 may not be
applied to the adjustment computed pursuant to this section.
   (d) 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.

   SEC. 18.    Section 2558.1 of the  
Education Code   is repealed.  
   2558.1.  For the 1986-87 fiscal year and each fiscal year
thereafter, the apportionment computed pursuant to subdivision (d) of
Section 2558 shall be increased by the amount reported by the
Teachers' Retirement Board for that county office of education under
Section 23400.3. This additional amount shall be increased annually
by the amount of the inflation allowance computed under Section 2557.

   SEC. 19.    Section 2558.3 of the  
Education Code   is repealed.  
   2558.3.  Unless the Budget Act specifically states otherwise,
whenever the Budget Act requires the county superintendent to reduce
revenue limits to reflect decreased employer contributions to the
Public Employee's Retirement System, in addition to any other
exclusions specified in the Budget Act, the calculation of the
reduction shall exclude any increased contribution imposed pursuant
to Section 20750.98 of the Government Code. 
   SEC. 20.    Section 2558.4 of   the 
 Education Code   is repealed.  
   2558.4.  For the purposes of this article, the revenue limit for
the 1993-94 fiscal year for each county superintendent of schools
determined pursuant to this article and adjusted pursuant to Section
2558.6 shall be reduced by a 9.77 percent deficit factor. 
   SEC. 21.    Section 2558.45 of the  
Education Code   is repealed.  
   2558.45.  For the purposes of this article the revenue limit of
each county superintendent of schools shall be reduced by a deficit
factor, as follows:
   (a) (1) The revenue limit for the 1994-95 fiscal year for each
county superintendent of schools determined pursuant to this article
shall be reduced by a 12.59 percent deficit factor.
   (2) The revenue limit for the 1995-96 fiscal year determined
pursuant to this article for each county superintendent of schools
shall be reduced by an 11.70 percent deficit factor.
   (3) The revenue limit for the 1996-97 and 1997-98 fiscal years
determined pursuant to this article for each county superintendent of
schools shall be reduced by an 11.547 percent deficit factor, as
adjusted pursuant to Section 42238.41.
   (4) The revenue limit for the 1999-2000 fiscal year determined
pursuant to this article for each county superintendent of schools
shall be reduced by a 8.628 percent deficit factor.
   (b) (1) The revenue limit for each county superintendent of
schools for the 1994-95 fiscal year shall be determined as if the
revenue limit for each county superintendent of schools had been
determined for the 1993-94 fiscal year without being reduced by the
deficit factor required pursuant to Section 2558.4.
   (2) When computing the revenue limit for each county
superintendent of schools 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 each county superintendent of schools had
been determined for the previous fiscal year without being reduced
by the deficit factor specified in this section. 
   SEC. 22.    Section 2558.46 of the  
Education Code   is repealed.  
   2558.46.  (a) (1) For the 2003-04 fiscal year, the revenue limit
for each county superintendent of schools determined pursuant to this
article shall be reduced by a 1.195 percent deficit factor.
   (2) For the 2004-05 fiscal year, the revenue limit for each county
superintendent of schools 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 county superintendent of schools determined pursuant to this
article shall be reduced further by a 1.826 percent deficit factor.
   (4) For the 2005-06 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced further by a 0.898 percent deficit factor.
   (5) For the 2008-09 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced by a 7.839 percent deficit factor.
   (6) For the 2009-10 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced by an 18.621 percent deficit factor.
   (7) For the 2010-11 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced by an 18.250 percent deficit factor.
   (8) For the 2011-12 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced by a 20.691 percent deficit factor.
   (9) For the 2012-13 fiscal year, the revenue limit for each county
superintendent of schools determined pursuant to this article shall
be reduced by a 22.549 percent deficit factor.
   (b) In computing the revenue limit for each county superintendent
of schools for the 2006-07 fiscal year pursuant to this article, the
revenue limit shall be determined as if the revenue limit for that
county superintendent of schools 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 county superintendent
of schools for the 2010-11 fiscal year pursuant to this article, the
revenue limit shall be determined as if the revenue limit for that
county superintendent of schools 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 county superintendent
of schools for the 2011-12 fiscal year pursuant to this article, the
revenue limit shall be determined as if the revenue limit for that
county superintendent of schools 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 county superintendent
of schools for the 2012-13 fiscal year pursuant to this article, the
revenue limit shall be determined as if the revenue limit for that
county superintendent of schools had been determined for the 2011-12
fiscal year without being reduced by the deficit factor specified in
subdivision (a).
   (f) In computing the revenue limit for each county superintendent
of schools for the 2013-14 fiscal year pursuant to this article, the
revenue limit shall be determined as if the revenue limit for that
county superintendent of schools had been determined for the 2012-13
fiscal year without being reduced by the deficit factors specified in
subdivision (a). 
   SEC. 23.    Section 2558.5 of the  
Education Code   is repealed.  
   2558.5.  Except as provided in Section 2559, for the 1981-82
fiscal year and each fiscal year thereafter, revenues received
pursuant to Section 2558, and any ending balances from the prior
fiscal year from state or local revenues, may be used by the county
superintendent for any of the programs operated by the county office.

   SEC. 24.    Section 2558.6 of the  
Education Code   is repealed.  
   2558.6.  Notwithstanding any other provision of law, for the
1994-95 fiscal year the county superintendent of schools shall reduce
the total                                               revenue
limit computed pursuant to Section 2558 of the Education Code 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 county superintendent of
schools 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.
   (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 of the Education Code.
   (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
2558.45.
   It is the intent of the Legislature to make adjustments to county
office of education revenue limits for the 1994-95 fiscal year to
reflect savings that these county offices of education will realize
in the contributions to the Public Employees' Retirement System due
to a reduced contribution rate for the 1994-95 fiscal year. 

   SEC. 25.    Article 3.5 (commencing with Section
2560) of Chapter 12 of Part 2 of Division 1 of Title 1 of the 
   Education Code   is repealed. 
   SEC. 26.   Section 14022.5 of the  
Education Code   , as added by Section 2 of Chapter 82 of
the Statutes of 1989, is repealed.  
   14022.5.  (a) For purposes of Section 8.5 of Article XVI of the
California Constitution, the term "enrollment" shall have the
following meaning for school districts, community college districts,
and state agencies providing direct elementary and secondary level
instructional services:
   (1) In school districts:
   (A) The average daily attendance of each school district reported
for the second principal apportionment pursuant to Section 41601.
   (B) The annual average daily attendance for adult education
programs and classes, as determined under subdivision (d) of Section
41601.
   (C) The annual average daily attendance for regional occupational
centers and programs, as determined under subdivision (d) of Section
41601.
   (D) The average daily attendance of apprentices enrolled in any
class and reported pursuant to Section 8150, except that one unit of
average daily attendance, for purposes of this paragraph, shall equal
525 hours of apprenticeship instruction in an apprenticeship program
operated pursuant to Chapter 4 (commencing with Section 3070) of
Division 3 of the Labor Code.
   (E) (i) The annual average daily attendance for children enrolled
in a state preschool program under the Child Care and Development
Services Act (Chapter 2 (commencing with Section 8200) of Part 6),
except that one unit of average daily attendance, for purposes of
this clause, shall equal 700 hours of child care or preschool
services.
   (ii) The annual average daily attendance for children enrolled in
any other program under the Child Care and Development Services Act
(Chapter 2 (commencing with Section 8200) of Part 6), except that one
unit of average daily attendance, for purposes of this clause, shall
equal 250 days of child care services. For the purposes of this
clause, less than four hours per day of child care services shall be
defined as one-half day, from four up to six and one-half hours per
day shall be defined as three-fourths day, and six and one-half hours
or more per day shall be defined as one full day.
   (F) The annual average daily attendance of pupils enrolled in
summer school, computed pursuant to Section 42239, except that one
unit of average daily attendance shall equal 700 hours of summer
school instruction in an approved summer school program.
   (G) The annual average daily attendance for pupils enrolled in an
educational program offered by a county office of education, as
determined pursuant to subdivisions (b) and (c) of Section 41601.
   (2) In community college districts:
   (A) The annual average daily attendance of a community college
district computed pursuant to Chapter 4 (commencing with Section
84500) of Part 50, until Section 84750 becomes operative, and
thereafter the number of full-time equivalent students as computed
pursuant to Section 84750.
   (B) The annual average daily attendance for evening community
college programs designated as adult schools pursuant to Section
78401, as determined pursuant to Section 78405.
   (C) The annual average daily attendance of apprentices enrolled in
any class and reported pursuant to Section 8150, except that one
unit of average daily attendance, for purposes of this paragraph,
shall equal 525 hours of apprenticeship instruction in an
apprenticeship program operated pursuant to Chapter 4 (commencing
with Section 3070) of Division 3 of the Labor Code.
   (3) In state agencies that provide direct elementary and secondary
level instructional services:
   (A) The annual average daily attendance equivalent for pupils
enrolled in the State Schools for the Handicapped pursuant to Part 32
(commencing with Section 59000).
   (B) The annual average daily attendance equivalent for pupils
attending an educational program administered by the Department of
the Youth Authority pursuant to Article 6 (commencing with Section
1120) and Article 10 (commencing with Section 1250) of Part 1 of
Division 2 of Chapter 3 of the Welfare and Institutions Code.
   (C) The annual average daily attendance equivalent for pupils in
the state hospitals operated by the State Department of Developmental
Services pursuant to Chapter 8 (commencing with Section 56850) of
Part 30.
   (b) Any determination or computation of enrollment for purposes of
this section shall be based upon actual data from prior years. For
the next succeeding year, any determination or computation of
enrollment for purposes of this section shall be the estimated
enrollment, adjusted as actual data become available.
   (c) This section shall remain in effect only until July 1, 1990,
and as of that date is repealed, unless Senate Constitutional
Amendment No. 1 is ratified by the voters at the statewide election
to be held on June 5, 1990. 
   SEC. 27.    Section 33128.2 of the  
Education Code   is repealed.  
   33128.2.  (a) Notwithstanding the standards and criteria adopted
pursuant to paragraph (3) of subdivision (a) of Section 33128 or any
other law, for the 2002-03 fiscal year only, a local educational
agency may use for purposes determined by its governing body up to 50
percent of its reserves for economic uncertainties and up to 50
percent of the balances, as of July 1, 2002, of restricted accounts
in its General Fund, excluding restricted reserves committed for
capital outlay, bond funds, sinking funds, and federal funds, in
order to provide local budgeting flexibility as a result of midyear
budget reductions for the 2002-03 fiscal year that are enacted by the
Legislature after January 2003.
   (b) A local educational agency may not, pursuant to paragraph (a),
use the combined budgetary reserves in excess of its total midyear
budget reductions for the 2002-03 fiscal year.
   (c) It is the intent of the Legislature that a local educational
agency use the flexibility provided in subdivision (a) to the extent
midyear budget reductions for the 2002-03 fiscal year occur in the
following programs:
   (1) The Peer Assistance and Review Program.
   (2) Supplemental instruction and remedial programs.
   (3) One-time funding for the Instructional Materials Funding
Realignment Program.
   (d) It is further the intent of the Legislature that a local
educational agency make every effort to maintain a prudent
expenditure plan that ensures its solvency for the 2002-03 fiscal
year and in subsequent fiscal years. 
   SEC. 28.    Section 35160.5 of the  
Education Code   is amended to read: 
   35160.5.  (a) The governing board of each   a
 school district that maintains one or more schools containing
any of grades 7 to 12, inclusive, as a condition for the receipt of
 an  inflation  adjustment  
adjustments  pursuant to Section  42238.1, 
 42238.02, as implemented by Section 42238.03,  shall
establish a school district policy regarding participation in
extracurricular and cocurricular activities by pupils in grades 7 to
12, inclusive. The criteria, which shall be applied to
extracurricular and cocurricular activities, shall ensure that pupil
participation is conditioned upon satisfactory educational progress
in the previous grading period.
   (1) For purposes of this subdivision, "extracurricular activity"
means a program that has all of the following characteristics:
   (A) The program is supervised or financed by the school district.
   (B) Pupils participating in the program represent the school
district.
   (C) Pupils exercise some degree of freedom in either the
selection, planning, or control of the program.
   (D) The program includes both preparation for performance and
performance before an audience or spectators.
   (2) For purposes of this subdivision, an "extracurricular activity"
is not part of the regular school curriculum, is not graded, does
not offer credit, and does not take place during classroom time.
   (3) For purposes of this subdivision, a "cocurricular activity" is
defined as a program that may be associated with the curriculum in a
regular classroom.
   (4) Any teacher graded or required program or activity for a
course that satisfies the entrance requirements for admission to the
California State University or the University of California is not an
extracurricular or cocurricular activity as defined by this section.

   (5) For purposes of this subdivision, "satisfactory educational
progress" shall include, but not necessarily be limited to, both of
the following:
   (A) Maintenance of minimum passing grades, which is defined as at
least a 2.0 grade point average in all enrolled courses on a 4.0
scale.
   (B) Maintenance of minimum progress toward meeting the high school
graduation requirements prescribed by the governing board.
   (6) For purposes of this subdivision, "previous grading period"
does not include a grading period in which the pupil was not in
attendance for all, or a majority of, the grading period due to
absences excused by the school for reasons such as serious illness or
injury, approved travel, or work. In that event, "previous grading
period" is deemed to mean the grading period immediately prior to the
grading period or periods excluded pursuant to this paragraph.
   (7) A program that has, as its primary goal, the improvement of
academic or educational achievements of pupils is not an
extracurricular or cocurricular activity as defined by this section.
   (8) The governing board of each school district may adopt, as part
of its policy established pursuant to this subdivision, provisions
that would allow a pupil who does not achieve satisfactory
educational progress, as defined in paragraph (5), in the previous
grading period to remain eligible to participate in extracurricular
and cocurricular activities during a probationary period. The
probationary period shall not exceed one semester in length, but may
be for a shorter period of time, as determined by the governing board
of the school district. A pupil who does not achieve satisfactory
educational progress, as defined in paragraph (5), during the
probationary period shall not be allowed to participate in
extracurricular and cocurricular activities in the subsequent grading
period.
   (9) Nothing in this subdivision shall preclude the governing board
of a school district from imposing a more stringent academic
standard than that imposed by this subdivision. If the governing
board of a school district imposes a more stringent academic
standard, the governing board shall establish the criteria for
participation in extracurricular and cocurricular activities at a
meeting open to the public pursuant to Section 35145.
   (10) The governing board of each school district annually shall
review the school district policies adopted pursuant to the
requirements of this section.
   (b) (1) On or before July 1, 1994, the governing board of each
school district, as a condition for the receipt of school
apportionments from the state school fund, shall adopt rules and
regulations establishing a policy of open enrollment within the
district for residents of the district. This requirement does not
apply to a school district that has only one school or a school
district with schools that do not serve any of the same grade levels.

   (2) The policy shall include all of the following elements:
   (A) It shall provide that the parent or guardian of each schoolage
child who is a resident in the district may select the schools the
child shall attend, irrespective of the particular locations of his
or her residence within the district, except that school districts
shall retain the authority to maintain appropriate racial and ethnic
balances among their respective schools at the school districts'
discretion or as specified in applicable court-ordered or voluntary
desegregation plans.
   (B) It shall include a selection policy for a school that receives
requests for admission in excess of the capacity of the school that
ensures that selection of pupils to enroll in the school is made
through a random, unbiased process that prohibits an evaluation of
whether a pupil should be enrolled based upon his or her academic or
athletic performance. The governing board of a school district shall
calculate the capacity of the schools in the district for purposes of
this subdivision in a nonarbitrary manner using pupil enrollment and
available space. However, school districts may employ existing
entrance criteria for specialized schools or programs if the criteria
are uniformly applied to all applicants. This subdivision shall not
be construed to prohibit school districts from using academic
performance to determine eligibility for, or placement in, programs
for gifted and talented pupils established pursuant to  former
 Chapter 8 (commencing with Section 52200) of Part 28 of
Division  4.   4, as that chapter read on
January 1, 2014. 
   (C) It shall provide that no pupil who currently resides in the
attendance area of a school shall be displaced by pupils transferring
from outside the attendance area.
   (3) Notwithstanding the requirement of subparagraph (B) of
paragraph (2) that the policy include a selection policy for a school
that receives requests for admission in excess of the capacity of
the school that ensures that the selection is made through a random,
unbiased process, the policy may include either of the following
elements:
   (A) (i) It may provide that special circumstances exist that might
be harmful or dangerous to a particular pupil in the current
attendance area of the pupil, including, but not necessarily limited
to, threats of bodily harm or threats to the emotional stability of
the pupil, that serve as a basis for granting a priority of
attendance outside the current attendance area of the pupil. A
finding of harmful or dangerous special circumstances shall be based
upon either of the following:
   (I) A written statement from a representative of the appropriate
state or local agency, including, but not necessarily limited to, a
law enforcement official or a social worker, or properly licensed or
registered professionals, including, but not necessarily limited to,
psychiatrists, psychologists, or marriage and family therapists.
   (II) A court order, including a temporary restraining order and
injunction, issued by a judge.
   (ii) A finding of harmful or dangerous special circumstances
pursuant to this subparagraph may be used by a school district to
approve transfers within the district to schools that have been
deemed by the school district to be at capacity and otherwise closed
to transfers that are not based on harmful or dangerous special
circumstances.
   (B) It may provide that schools receiving requests for admission
shall give priority for attendance to siblings of pupils already in
attendance in that school and to pupils whose parent or legal
guardian is assigned to that school as his or her primary place of
employment.
   (4) To the extent required and financed by federal law and at the
request of the pupil's parent or guardian, each school district shall
provide transportation assistance to the pupil.
   SEC. 29.    Section 35735.3 of the  
Education Code   is repealed.  
   35735.3.  The transfer of seventh and eighth grade pupils between
an elementary school district and a high school district triggers the
recomputation, pursuant to Section 35735.1, of the base revenue
limit per unit of average daily attendance of the district receiving
the 7th and 8th grade pupils, except that the computations described
in paragraphs (2) and (3) of subdivision (a) of Section 35735.1 shall
not apply to a recomputation performed pursuant to this section.

   SEC. 30.    Section 35736 of the   Education
Code   is amended to read: 
   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  revenue limit
  local control funding formula allocation pursuant to
Section 42238.02, as implemented by Section 42238.03,  per pupil
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.
   SEC. 31.    Section 35757 of the   Education
Code   is amended to read: 
   35757.  The county superintendent of schools shall prepare a
statement of official information and statistics relating to the
proposed reorganization  which   that 
shall include, but is not limited to, the plans and recommendations,
the  revenue limit   local control funding
formula allocation pursuant to Section 42238.02, as implemented by
Section 42238.03,  per pupil, the rate of growth, the expected
enrollment, and the support from the state  which 
 that  can be expected if such area maintains an adequate
school program. Such statistics shall be based upon the school year
last completed before the date of the election.
   SEC. 32.    Section 41203.7 of the  
Education Code   is amended to read: 
   41203.7.  (a) Notwithstanding any other  provision of
 law, a supplemental appropriation shall be made from the
General Fund for the support of school districts, as defined in
Section 41302.5, in each fiscal year for the purposes set forth in
subdivision (c). The amount of that supplemental appropriation shall
be equal to the sum of the amount allocated to school districts
pursuant to this section in the prior fiscal year and 25 percent of
the amount, if any, allocated to school districts in the prior fiscal
year pursuant to Section 8.5 of Article XVI of the California
Constitution. That amount shall be adjusted annually for changes in
enrollment, and for the change in the cost of living pursuant to
paragraph (1) of subdivision (e) of Section 8 of Article XIII B of
the California Constitution.
   (b) The funds appropriated for the purposes of subdivision (a)
shall be allocated to each school district in an equal amount per
unit of enrollment, in accordance with the allocation procedure set
forth in subdivision (c) of Section 8.5 of Article XVI of the
California Constitution.
   (c) The amount allocated to each school district pursuant to this
section shall be used only for the reduction of class size in any
grade level or subject area. That class size reduction shall occur in
 accordance with Chapter 6.8 (commencing with Section 52080)
of Part 28 of the Education Code, or in  any  other
 manner determined by the  school district
 governing  board.   board of the
school district.  Not later than 90 days following each fiscal
year in which a school district receives funding pursuant to this
section, the governing board of  that   the
 school district shall certify in writing to the Superintendent
 of Public Instruction  that all expenditures of
that funding were in compliance with this subdivision.
   SEC. 33.    Section 41209 of the   Education
Code   is repealed.  
   41209.  (a) Except as provided in subdivision (b), and
notwithstanding any other provision of law, in any fiscal year when,
in addition to any allocations required pursuant to Section 42238.42,
an appropriation is made for the purposes of meeting the minimum
funding requirements for public education, as set forth in Section 8
of Article XVI of the California Constitution, because these
requirements were not sufficiently funded in a prior fiscal year, and
the appropriation is apportioned on the basis of equal payments for
each unit of each school district's average daily attendance, it is
the intent of the Legislature that average daily attendance shall
include the average daily attendance for regular education, adult
education, and regional occupational programs and centers, as claimed
in the school year in which the funding deficiency occurred. It is
not the intent of the Legislature to interfere with, or to change,
the application of Section 42238.42.
   (b) Nothing in this section shall be construed to limit the
flexibility of the Legislature or Governor to propose budget
appropriations apportioned on the basis of equal payments for each
unit of each school district's average daily attendance that exclude
funds for adult education programs or regional occupational programs
and centers.
   (c) A district receiving funds distributed as described in
subdivision (a) shall, consistent with Section 52501.5, use any funds
allocated for average daily attendance of adult education programs
or regional occupational centers or programs only for purposes of
adult education programs or regional occupational centers or
programs. 
   SEC. 34.    Section 41320.1 of the  
Education Code   is amended to read: 
   41320.1.  Acceptance by the school district of the apportionments
made pursuant to Section 41320 constitutes the agreement by the
school district to all of the following conditions:
   (a) The Superintendent shall appoint a trustee who has recognized
expertise in management and finance and may employ, on a short-term
basis, staff necessary to assist the trustee, including, but not
limited to, certified public accountants, as follows:
   (1) The expenses incurred by the trustee and necessary staff shall
be borne by the school district.
   (2) The Superintendent shall establish the terms and conditions of
the employment, including the remuneration of the trustee. The
trustee shall serve at the pleasure of, and report directly to, the
Superintendent.
   (3) The trustee, and necessary staff, shall serve until the school
district has adequate fiscal systems and controls in place, the
Superintendent has determined that the school district's future
compliance with                                            the fiscal
plan approved for the school district under Section 41320 is
probable, and the Superintendent decides to terminate the trustee's
appointment, but in no event, for less than three years. The
Superintendent shall notify the county superintendent of schools, the
Legislature, the Department of Finance, and the Controller no less
than 60 days before the time that the Superintendent expects these
conditions to be met.
   (4) Before the school district repays the loan, including
interest, the recipient of the loan shall select an auditor from a
list established by the Superintendent and the Controller to conduct
an audit of its fiscal systems. If the fiscal systems are deemed to
be inadequate, the Superintendent may retain the trustee until the
deficiencies are corrected. The cost of this audit and any additional
cost of the trustee shall be borne by the school district.
   (5) Notwithstanding any other law, all reports submitted to the
trustee are public records.
   (6) To facilitate the appointment of the trustee and the
employment of necessary staff, for purposes of this section, the
Superintendent is exempt from the requirements of Article 6
(commencing with Section 999) of Chapter 6 of Division 4 of the
Military and Veterans Code and Part 2 (commencing with Section 10100)
of Division 2 of the Public Contract Code.
   (7) Notwithstanding any other law, the Superintendent may appoint
an employee of the department to act as trustee for up to the
duration of the trusteeship. The salary and benefits of that employee
shall be established by the Superintendent and paid by the school
district. During the time of appointment, the employee is an employee
of the school district, but shall remain in the same retirement
system under the same plan as if the employee had remained in the
department. Upon the expiration or termination of the appointment,
the employee shall have the right to return to his or her former
position, or to a position at substantially the same level as that
position, with the department. The time served in the appointment
shall be counted for all purposes as if the employee had served that
time in his or her former position with the department.
   (b) (1) The trustee appointed by the Superintendent shall monitor
and review the operation of the school district. During the period of
his or her service, the trustee may stay or rescind an action of the
governing board of the school district that, in the judgment of the
trustee, may affect the financial condition of the school district.
   (2) After the trustee's period of service, and until the loan is
repaid, the county superintendent of schools that has jurisdiction
over the school district may stay or rescind an action of the
governing board of the school district that, in his or her judgment,
may affect the financial condition of the school district. The county
superintendent of schools shall notify the Superintendent, within
five business days, if he or she stays or rescinds an action of the
governing board of the school district. The notice shall include, but
not be limited to, both of the following:
   (A) A description of the governing board of the school district's
intended action and its financial implications.
   (B) The rationale and findings that support the county
superintendent of school's decision to stay or rescind the action of
the governing board of the school district.
   (3) If the Superintendent is notified by the county superintendent
of schools pursuant to paragraph (2), the Superintendent shall
report to the Legislature, on or before December 30 of every year,
whether the school district is complying with the fiscal plan
approved for the school district.
   (4) The Superintendent may establish timelines and prescribe
formats for reports and other materials to be used by the trustee to
monitor and review the operations of the school district. The trustee
shall approve or reject all reports and other materials required
from the school district as a condition of receiving the
apportionment. The Superintendent, upon the recommendation of the
trustee, may reduce an apportionment to the school district in an
amount up to two hundred dollars ($200) per day for each late or
unacceptable report or other material required under this part, and
shall report to the Legislature a failure of the school district to
comply with the requirements of this section. If the Superintendent
determines, at any time, that the fiscal plan approved for the school
district under Section 41320 is unsatisfactory, he or she may modify
the plan as necessary, and the school district shall comply with the
plan as modified.
   (c) At the request of the Superintendent, the Controller shall
transfer to the department, from an apportionment to which the school
district would otherwise have been entitled pursuant to Section
 42238,   42238.02, as implemented by Section
42238.03,  the amount necessary to pay the expenses incurred by
the trustee and associated costs incurred by the county
superintendent of schools.
   (d) For the fiscal year in which the apportionments are disbursed
and every year thereafter, the Controller, or his or her designee,
shall cause an audit to be conducted of the books and accounts of the
school district, in lieu of the audit required by Section 41020. At
the Controller's discretion, the audit may be conducted by the
Controller, his or her designee, or an auditor selected by the school
district and approved by the Controller. The costs of these audits
shall be borne by the school district. These audits shall be required
until the Controller determines, in consultation with the
Superintendent, that the school district is financially solvent, but
in no event earlier than one year following the implementation of the
plan or later than the time the apportionment made is repaid,
including interest. In addition, the Controller shall conduct quality
control reviews pursuant to subdivision (c) of Section 14504.2.
   (e) For purposes of errors and omissions liability insurance
policies, the trustee appointed pursuant to this section is an
employee of the local educational agency to which he or she is
assigned. For purposes of workers' compensation benefits, the trustee
is an employee of the local educational agency to which he or she is
assigned, except that a trustee appointed pursuant to paragraph (7)
of subdivision (a) is an employee of the department for those
purposes.
   (f) Except for an individual appointed by the Superintendent as
trustee pursuant to paragraph (7) of subdivision (a), the
state-appointed trustee is a member of the State Teachers' Retirement
System, if qualified, for the period of service as trustee, unless
the trustee elects in writing not to become a member. A person who is
a member or retirant of the State Teachers' Retirement System at the
time of appointment shall continue to be a member or retirant of the
system for the duration of the appointment. If the trustee chooses
to become a member or is already a member, the trustee shall be
placed on the payroll of the school district for the purpose of
providing appropriate contributions to the system. The Superintendent
may also require that an individual appointed as trustee pursuant to
paragraph (7) of subdivision (a) be placed on the payroll of the
school district for purposes of remuneration, other benefits, and
payroll deductions. For purposes of workers' compensation benefits,
the state-appointed trustee is deemed an employee of the local
educational agency to which he or she is assigned, except that a
trustee who is appointed pursuant to paragraph (7) of subdivision (a)
is an employee of the department for those purposes.
   SEC. 35.    Section 41329.55 of the  
Education Code   is amended to read: 
   41329.55.  (a) Simultaneous with the execution of the lease
financing authorized pursuant to Section 41329.52, the bank shall
provide to the Controller and the school district a notification of
its lease financing. The notice shall include a schedule of rent
payments to become due to the bank from the school district and the
bond trustee. The Controller shall make the apportionment to the bond
trustee of those amounts on the dates shown on the schedule. The
bank may further authorize the apportionments to be used to pay or
reimburse the provider of any credit enhancement of bonds and other
ongoing or periodic ancillary costs of the bond financing issued by
the bank in connection with this article. If the amount of rent
payments vary from the schedule as a result of variable interest
rates on the bonds, early redemptions, or changes in expenses, the
bank shall amend or supplement the schedule accordingly.
   (b) Except where financing is for a community college district,
the Controller shall make the apportionment only from moneys in
Section A of the State School Fund and the Education Protection
Account designated for apportionment to the district and any
apportionment authorized pursuant to this subdivision shall
constitute a lien senior to any other apportionment or payment of
State School Fund and the Education Protection Account moneys to or
for that district not made pursuant to this subdivision.
   (c) If financing is for the Compton Community College District,
the Controller shall make the apportionment only from moneys in
Section B of the State School Fund. Any apportionment authorized
pursuant to this subdivision shall constitute a lien senior to any
other apportionment or payment of Section B State School Fund moneys.

   (d) The amount apportioned for a school district pursuant to this
section is an allocation to the school district for purposes of
subdivision (b) of Section 8 of Article XVI of the California
Constitution. For purposes of computing  revenue limits
  the local control funding formula allocation 
pursuant to Section 42238   42238.02, as
implemented by Section 42238.03,  for any school district, the
 revenue limit   local control funding formula
allocation  for any fiscal year in which funds are apportioned
for the school district pursuant to this section shall include any
amounts apportioned by the Controller pursuant to subdivisions (a),
(b), and (c),  as well as   and  Section
41329.57.
   (e) No party, including the school district or any of its
creditors, shall have any claim to the money apportioned or to be
apportioned to the bond trustee by the Controller pursuant to this
section.
   SEC. 36.    Section 41334 of the   Education
Code   is repealed.  
   41334.  The Superintendent of Public Instruction shall on or
before December 10th of each year apportion:
   (a) To each elementary, high school, and county school service
fund the total of amounts allowed to them under Sections 41850 to
41862, inclusive, and Sections 41930 to 41936, inclusive, and
   (b) To each school district maintaining a high school or high
schools, each county superintendent of schools, the California Youth
Authority and the State Department of Education the total of amounts
allowed to them under Sections 41900 to 41912, inclusive.
   This apportionment shall be called the special purpose
apportionment. 
   SEC. 37.   Section 41338 of the   Education
Code   is repealed.  
   41338.  The Superintendent of Public Instruction shall withhold
from the apportionment to an elementary school district, as a part of
the first principal apportionment and second principal
apportionment, the amount allowed the elementary school district for
the average daily attendance in grades 7 and 8 in a junior high
school by reason of the operation of subdivisions (a) and (b) of
Section 41600. The amount withheld shall be determined by multiplying
the total amount of basic state aid and state equalization aid
computed for the district by the foundation program for units of
average daily attendance in grades 7 and 8 and dividing the product
by the total foundation program of the district.
   The Superintendent of Public Instruction shall add the amount
withheld to the apportionment required to be made to the high school
district maintaining the junior high school. 
   SEC. 38.    Section 41341 of the   Education
Code   is amended to read: 
   41341.  (a) (1) If, during any fiscal year, the amount apportioned
to a school district or to any fund from Section A of the State
School Fund differs either positively or negatively from the amount
to which the  school  district or fund was entitled by an
amount equal to  revenue limit   the local
control  funding  formula allocation pursuant to Section
42238.02, as implemented pursuant to Section 42238.03,  for one
unit of average daily attendance, the  Superintendent of
Public Instruction,   Superintendent,  in
accordance with regulations that he or she is hereby authorized to
adopt, not later than the first succeeding fiscal year from the
fiscal year in which the computational error was made, shall withhold
from, or add to, the apportionment made during that fiscal year, the
amount of the excess or deficiency, as the case may be.
Notwithstanding any other provision of this code to the contrary,
excesses withheld or deficiencies added by the Superintendent
 of Public Instruction under   pursuant 
this subdivision shall be added to or allowed from any portion of the
State School Fund.
   (2) Notwithstanding paragraph (1), excesses may be withheld or
deficiencies added to apportionments on account of audit exceptions
in any fiscal year in which they are certified by the 
Superintendent of Public Instruction.   Superintendent.

   (b) If, during any fiscal year, the amount apportioned to a
community college district or to any fund from Section B of the State
School Fund differs either positively or negatively from the amount
to which the  community college  district or fund was
entitled, by an amount equal to the funding of one full-time
equivalent student, the Chancellor of the California Community
Colleges, in accordance with regulations that he or she is hereby
authorized to adopt, not later than the first succeeding fiscal year
from the fiscal year in which the computational error was made, shall
withhold from, or add to, the apportionment made during that fiscal
year, the amount of the excess or deficiency, as the case may be.
Notwithstanding any other provision of this code to the contrary,
excesses withheld or deficiencies added by the Chancellor of the
California Community Colleges under this subdivision shall be added
to or allowed from any portion of the State School Fund.
   SEC. 39.    Section 41344 of the   Education
Code   is amended to read: 
   41344.  (a) If, as the result of an audit or review, a local
educational agency is required to repay an apportionment significant
audit exception or to pay a penalty arising from an audit exception,
the Superintendent and the Director of Finance, or their designees,
jointly shall establish a plan for repayment of state school funds
that the local educational agency received on the basis of average
daily attendance, or other data, that did not comply with statutory
or regulatory requirements that were conditions of the
apportionments, or for payment of a penalty arising from an audit
exception. A local educational agency shall request a plan within 90
days of receiving the final audit report or review, within 30 days of
withdrawing or receiving a final determination regarding an appeal
pursuant to subdivision (d), or, in the absence of an appeal pursuant
to subdivision (d), within 30 days of withdrawing or receiving a
determination of a summary review pursuant to subdivision (d) of
Section 41344.1. At the time the local educational agency is
notified, the Controller also shall be notified of the plan. The plan
shall be established in accordance with the following:
   (1) The Controller shall withhold the disallowed or penalty amount
at the next principal apportionment or pursuant to paragraph (2),
unless subdivision (d) of this section or subdivision (d) of Section
41344.1 applies, in which case the disallowed or penalty amount shall
be withheld, at the next principal apportionment or pursuant to
paragraph (2) following the determination regarding the appeal or
summary appeal. In calculating a disallowed amount, the Controller
shall determine the total amount of overpayment received by the local
educational agency on the basis of average daily attendance, or
other data, reported by the local educational agency that did not
comply with one or more statutory or regulatory requirements that are
conditions of apportionment.
   (2) If the Superintendent and the Director of Finance concur that
repayment of the full liability or payment of the penalty in the
current fiscal year would constitute a severe financial hardship for
the local educational agency, they may approve a plan of equal annual
payments over a period of up to eight years. The plan shall include
interest on each year's outstanding balance at the rate earned on the
state's Pooled Money Investment Account during that year. The
Superintendent and the Director of Finance jointly shall establish
this plan. The Controller shall withhold amounts pursuant to the
plan.
   (3) If the Superintendent and the Director of Finance do not
jointly establish a plan, the Controller shall withhold the entire
disallowed amount determined pursuant to paragraph (1), or the
penalty amount, at the next principal apportionment.
   (b) (1) For purposes of computing average daily attendance
pursuant to Section  42238.5,   42238.05, 
a local educational agency's prior fiscal year average daily
attendance shall be reduced by an amount equal to any average daily
attendance disallowed in the current year, by an audit or review, as
defined in subdivision (e).
   (2) Commencing with the 1999-2000 fiscal year, this subdivision
may not result in a local educational agency repaying more than the
value of the average daily attendance disallowed in the audit
exception plus interest and other penalties or reductions in
apportionments as provided by existing law.
   (c) Notwithstanding any other law, this section may not be waived
under any authority set forth in this code except as provided in this
section or Section 41344.1.
   (d) Within 60 days of the date on which a local educational agency
receives a final audit report resulting from an audit or review of
all or any part of the operations of the local educational agency, or
within 30 days of receiving a determination of a summary review
pursuant to subdivision (d) of Section 41344.1, a local educational
agency may appeal a finding contained in the final report, pursuant
to Section 41344.1. Within 90 days of the date on which the appeal is
received by the panel, a hearing shall be held at which the local
educational agency may present evidence or arguments if the local
educational agency believes that the final report contains any
finding that was based on errors of fact or interpretation of law, or
if the local educational agency believes in good faith that it was
in substantial compliance with all legal requirements. A repayment
schedule may not commence until the panel reaches a determination
regarding the appeal. If the panel determines that the local
educational agency is correct in its assertion, in whole or in part,
the allowable portion of any apportionment payment that was withheld
shall be paid at the next principal apportionment.
   (e) (1) As used in this section, "audit or review" means an audit
conducted by the Controller's office, an annual audit conducted by a
certified public accountant or a public accounting firm pursuant to
Section 41020, and an audit or review conducted by a governmental
agency that provided the local educational agency with an opportunity
to provide a written response.
   (2) As used in this section, "local educational agency" includes a
charter school.
   SEC. 40.    Section 41376 of the   Education
Code   is amended to read: 
   41376.   The Superintendent of Public Instruction,
  (a)     The Superintendent,  in
computing apportionments and allowances from the State School Fund
for the second principal apportionment, shall determine the following
for the regular day classes of the elementary schools maintained by
each school district: 
   (a) For 
    (1)     (A)     For 
grades 1 to 3, inclusive,  he   the
Superintendent  shall determine the number of classes, the
number of pupils enrolled in each class, the total enrollment in all
such classes, the average number of pupils enrolled per class, and
the total of the numbers of pupils which are in excess of thirty (30)
in each class. 
    For 
    (B)     For  those  school 
districts  which   that  do not have any
classes with an enrollment in excess of 32 and whose average size for
all the classes is 30.0 or less, there shall be no excess declared.
For those  school  districts  which  
that  have one or more classes in excess of an enrollment of 32
or whose average size for all the classes is more than 30, the excess
shall be the total of the number of pupils which are in excess of 30
in each class having an enrollment of more than 30. 
   (b) 
    (2)  For grades 4 to 8, inclusive,  he 
 the Superintendent  shall determine the total number of
pupils enrolled, the number of full-time equivalent classroom
teachers, and the average number of pupils per each full-time
equivalent classroom teacher.  He   The
Superintendent  shall also determine the excess if any, of
pupils enrolled in such grades in the following manner: 
   (1) 
    (A)  Determine the number of pupils by which the average
number of pupils per each full-time equivalent classroom teacher for
the current fiscal year exceeds the greater of the average number of
pupils per each full-time equivalent classroom teacher in all the
appropriate districts of the state, as determined by the
Superintendent  of Public Instruction,  for October
30, 1964, or the average number of pupils per each full-time
equivalent classroom teacher which existed in the  school 
district on either October 30, 1964 or March 30, 1964, as selected by
the governing  board.   board of the school
district.  
   (2) 
    (B)  Multiply the number determined in  (1)
above   subparagraph (A)  by the number of
full-time equivalent classroom teachers of the current fiscal year.

   (3) 
    (C)  Reduce the number determined in  (2) above
  subparagraph (B)  by the remainder  which
  that  results from dividing such number by the
average number of pupils per each full-time equivalent teacher for
October 30, 1964, as determined by the Superintendent  of
Public Instruction in (1) above.   in subparagraph (A).
 
   (c) He 
    (3)     The Superintendent  shall
compute the product obtained by multiplying the excess number of
pupils, if any,  under the provisions of subdivision (a) of
this section   in paragraph (1)  by ninety-seven
 hundredths (0.97), and shall multiply the product so
obtained by the ratio of statewide change in average daily attendance
to district change in average daily attendance. Change in average
daily attendance shall be determined by dividing average daily
attendance in grades 1, 2 and 3 reported for purposes of the first
principal apportionment of the current year by that reported for
purposes of the first principal apportionment of the preceding year.
  hundredths.  
   (d) 
    (4)  If the school district reports that it has
maintained, during the current fiscal year, any classes in which
there were enrolled pupils in excess of  thirty (30)
  30  per class pursuant to  subdivision
(a) of this section,   paragraph (1),  and there is
no excess number of pupils computed pursuant to  subdivision
(b) of this section, he   paragraph (2), the
Superintendent  shall decrease the average daily attendance
reported under the provisions of Section 41601 by the product
determined  under subdivision (c) of this section. 
 pursuant to paragraph (3).  
   (e) 
    (5)  If the school district reports that it has
maintained, during the current fiscal year, no classes in which there
were enrolled pupils in excess of  thirty (30) 
 30  per class determined pursuant to  subdivision
(a) of this section,   paragraph (1),  and there is
an excess number of pupils computed pursuant to  subdivision
(b) of this section, he shall make the following computation:
 paragraph (2), the Superintendent shall compute the
product obtained by multiplying the excess number of pupils computed
pursuant to paragraph (2) by ninety-seven hundredths. The
Superintendent shall decrease the average daily attendance reported
under the provisions of Section 41601 by the resulting product. 

   He shall compute the product obtained by multiplying the excess
number of pupils computed pursuant to subdivision (b) of this section
by ninety-seven hundredths (0.97) and shall multiply the product so
obtained by the ratio of statewide change in average daily attendance
to the district change in average daily attendance. He shall
decrease the average daily attendance reported under the provisions
of Section 41601 by the resulting product.  
   (f) 
    (6)  If the school district reports that it has
maintained, during the current fiscal year, any classes in which
there were enrolled pupils in excess of  thirty (30)
  30  per class determined pursuant to 
subdivision (a) of this section,   paragraph (1), 
and there is an excess number of pupils computed pursuant to 
subdivision (b) of this section, he shall make the following
computation:   paragraph (2), the Superintendent shall
add to the product determined pursuant to paragraph (3), the product
determined pursuant to paragraph (5), and shall decrease the average
daily attendance reported under the provisions of Section 41601 by
this total amount.  
   He shall add to the product determined under subdivision (c) of
this section, the product determined under subdivision (e) of this
section and decrease the average daily attendance reported under the
provisions of Section 41601 by this total amount. 
    (b)    The governing board of each school
district maintaining elementary schools shall report for the fiscal
year 1964-65 and                                           each year
thereafter the information required for the determination to be made
by the Superintendent  of Public Instruction under the
provisions of   pursuant to  this section in
accordance with instructions provided on forms furnished and
prescribed by the  Superintendent of Public Instruction.
  Superintendent.  Such information shall be
reported by the school district together with, and at the same time
as, the reports required to be filed for the second principal
apportionment of the State School Fund. The forms on which the data
and information is reported shall include a certification by  the
superintendent of  each school district  superintendent
 or  its  chief administrative officer that the
data is correct and accurate for the period covered, according to his
 or her  best information and belief.
    (c)    For purposes of this section, a
"full-time equivalent classroom teacher" means an employee of an
elementary, high school, or unified school district, employed in a
position requiring certification qualifications and whose duties
require him to teach pupils in the elementary schools of that
district in regular day classes for the full time for which he is
employed during the regular schoolday. In reporting the total number
of full-time equivalent classroom teachers, there shall be included,
in addition to those employees defined above, the full-time
equivalent of all fractional time for which employees in positions
requiring certification qualifications are required to devote to
teaching pupils in the elementary schools of the district in regular
day classes during the regular schoolday.
    (d)    For purposes of this section, the number
of pupils enrolled in each class means the average of the active
enrollment in that class on the last teaching day of each school
month  which ends prior to April   that ends
before April 15  of each school year. 
   The provisions of this section are not 
    (e)     This section shall not be 
applicable to school districts with less than 101 units of average
daily attendance for the current fiscal year. 
   Although no decreases in average daily attendance shall be made
for the fiscal year 1964-65, reports are required to be filed under
the provisions of this section, and the Superintendent of Public
Instruction shall notify each school district the amount of the
decrease in state allowances which would have been effected had such
decrease in average daily attendance been applied.  

    The 
    (f)     The  Superintendent 
of Public Instruction  shall adopt rules and regulations
 which he   that he or she  may deem
necessary for the effective administration of this section. 
Such   Those  rules and regulations may specify
that no decrease in average daily attendance reported under the
provisions of Section 41601 shall be made for a school district on
account of large classes due to instructional television or team
teaching, which may necessarily involve class sizes at periods during
the day larger than the standard set forth in this section.
   SEC. 41.    Section 41376.1 of the  
Education Code   is amended to read: 
   41376.1.  (a) Commencing with the 2013-14 fiscal year, until the
Superintendent determines that a school district is funded pursuant
to Section 42238.02 in the prior fiscal year, and notwithstanding the
requirement to decrease average daily attendance pursuant to
 subdivisions (d), (e), and (f)   paragraphs
(4), (5), and (6) of subdivision (a)  of Section 41376 and
subdivision (e) of Section 41378, the Superintendent shall compute a
reduction to the school district local control funding formula
entitlement pursuant to Section 42238.02, as implemented by Section
42238.03, for the specified school year by the sum of the following:
   (1) (A) Multiply the sum of the products obtained in subdivision
(e) of Section 41378 and  paragraph (4) of  subdivision
 (d)   (a)  of Section 41376 by the grade
span adjusted base grant specified in subparagraph (A) of paragraph
(1) of subdivision (d) of Section 42238.02, as annually adjusted for
cost of living pursuant to paragraph (2) of subdivision (d) of
Section 42238.02.
   (B) Multiply the product obtained in subparagraph (A) by the sum
of the entitlements computed pursuant to paragraphs (1) to (4),
inclusive, of subdivision (a) of Section 42238.03 and paragraph (3)
of subdivision (b) of Section 42238.03 for all school districts,
divided by the sum of the local control funding formula entitlements
computed pursuant to Section 42238.02 for all school districts.
   (2) (A) Multiply the product obtained pursuant to  paragraph
(5) of  subdivision  (e)  (a)  of
Section 41376 by the  funded  average daily
attendance for grades 4 to 6, inclusive, reported by the school
district pursuant to Section  42238.05  41601
 for the specified school year divided by the  funded
 average daily attendance for grades 4 to 8, inclusive,
reported by the school district pursuant to Section  42238.05
  41601  for the specified school year.
   (B) Multiply the product obtained in subparagraph (A) by the grade
span adjusted base grant specified in subparagraph (B) of paragraph
(1) of subdivision (d) of Section 42238.02, as annually adjusted for
cost of living pursuant to paragraph (2) of subdivision (d) of
Section 42238.02.
   (C) Multiply the product obtained in subparagraph (B) by the sum
of the entitlements computed pursuant to paragraphs (1) to (4),
inclusive, of subdivision (a) of Section 42238.03 and paragraph (3)
of subdivision (b) of Section 42238.03 for all school districts,
divided by the sum of the local control funding formula entitlements
computed pursuant to Section 42238.02 for all school districts.
   (3) (A) Multiply the product obtained pursuant to  paragraph
(5) of  subdivision  (e)   (a)  of
Section 41376 by the  funded  average daily
attendance for grades 7 and 8 reported by the school district
pursuant to Section  42238.05   41601  for
the specified school year divided by the  funded 
average daily attendance for grades 4 to 8, inclusive, reported by
the school district pursuant to Section  42238.05 
 41601  for the specified school year.
   (B) Multiply the product obtained in subparagraph (A) by the grade
span adjusted base grant specified in subparagraph (C) of paragraph
(1) of subdivision (d) of Section 42238.02, as annually adjusted for
cost of living pursuant to paragraph (2) of subdivision (d) of
Section 42238.02.
   (C) Multiply the product obtained in subparagraph (B) by the sum
of the entitlements computed pursuant to paragraphs (1) to (4),
inclusive, of subdivision (a) of Section 42238.03 and paragraph (3)
of subdivision (b) of Section 42238.03 for all school districts,
divided by the sum of the local control funding formula entitlements
computed pursuant to Section 42238.02 for all school districts.
   (b) Commencing with the 2013-14 fiscal year, if the Superintendent
determines that a school district is funded pursuant to Section
42238.02 in the prior fiscal year, and notwithstanding the
requirement to decrease average daily attendance pursuant to 
subdivisions (d), (e), and (f)   paragraphs (4), (5),
and (6) of subdivision (a)  of Section 41376 and subdivision (e)
of Section 41378, the Superintendent shall compute a reduction to
the school district local control funding formula entitlement
pursuant to Section 42238.02 for the specified school year by the sum
of the following:
   (1) Multiply the sum of the products obtained in subdivision (e)
of Section 41378 and  paragraph (4) of  subdivision 
(d)   (a)  of Section 41376 by the grade span
adjusted base grant specified in subparagraph (A) of paragraph (1) of
subdivision (d) of Section 42238.02, as annually adjusted for cost
of living pursuant to paragraph (2) of subdivision (d) of Section
42238.02.
   (2) (A) Multiply the product obtained pursuant to  paragraph
(5) of  subdivision  (e)   (a)  of
Section 41376 by the  funded  average daily
attendance for grades 4 to 6, inclusive, reported by the school
district pursuant to Section  42238.05   41601
 for the specified school year divided by the  funded
 average daily attendance for grades 4 to 8, inclusive,
reported by the school district pursuant to Section  42238.05
  41601  for the specified school year.
   (B) Multiply the product obtained in subparagraph (A) by the grade
span adjusted base grant specified in subparagraph (B) of paragraph
(1) of subdivision (d) of Section 42238.02, as annually adjusted for
cost of living pursuant to paragraph (2) of subdivision (d) of
Section 42238.02.
   (3) (A) Multiply the product obtained pursuant to  paragraph
(5) of  subdivision  (e)   (a)  of
Section 41376 by the  funded  average daily
attendance for grades 7 and 8 reported by the school district
pursuant to Section  42238.05   41601  for
the specified school year divided by the  funded 
average daily attendance for grades 4 to 8, inclusive, reported by
the school district pursuant to Section  42238.05 
 41601  for the specified school year.
   (B) Multiply the product obtained in subparagraph (A) by the grade
span adjusted base grant specified in subparagraph (C) of paragraph
(1) of subdivision (d) of Section 42238.02, as annually adjusted for
cost of living pursuant to paragraph (2) of subdivision (d) of
Section 42238.02.
   SEC. 42.    Section 41544 of the   Education
Code   is amended to read: 
   41544.  (a) For a basic aid school district that was entitled to
reimbursement pursuant to  former  Section 42247.4, as that
section read on January 1, 2001, and that received an apportionment
pursuant to subdivision (h) of  former  Section 42247.4, as
that section read on January 1, 2001, because a court order directs
pupils to transfer to that school district as part of the
court-ordered voluntary pupil transfer program, the Superintendent,
from the 2001-02 fiscal year to the 2012-13 fiscal year, inclusive,
shall calculate an apportionment of state funds for that basic aid
school district that provides 70 percent of the school district
revenue limit calculated pursuant to  former  Section 42238,
as that section read on January 1, 2013, that would have been
apportioned to the school district from which the pupils were
transferred for the average daily attendance of any pupils credited
under that court order who did not attend the basic aid school
district before the 1995-96 fiscal year.
   (b) (1) For a basic aid school district that was entitled to
reimbursement pursuant to  former  Section 42247.4, as that
section read on January 1, 2001, and that received an apportionment
pursuant to subdivision (h) of  former  Section 42247.4, as
that section read on January 1, 2001, because a court order directs
pupils to transfer to that school district as part of the
court-ordered voluntary pupil transfer program, the Superintendent,
commencing with the 2013-14 fiscal year, shall calculate an
apportionment of state funds for that basic aid school district that
provides 70 percent of the school district local control funding
formula base grant calculated pursuant to subdivision (d) of Section
42238.02, as implemented by Section 42238.03, that would have been
apportioned to the school district from which the pupils were
transferred for the average daily attendance of any pupils credited
under that court order who did not attend the basic aid school
district before the 1995-96 fiscal year.
   (2) Notwithstanding paragraph (1), until the Superintendent
determines that the school district from which the pupil or pupils
were transferred is funded pursuant to Section 42238.02 in the prior
fiscal year, the Superintendent shall apportion, for average daily
attendance credited pursuant to paragraph (1),  the lesser of the
amount calculated pursuant to paragraph (1) or  70 percent of
the sum of the entitlements for the school district from which the
pupil or pupils were transferred for the specified fiscal year as
computed pursuant to paragraphs (1) to (4), inclusive, of subdivision
(a), and paragraph (3) of subdivision (b), of Section 42238.03,
divided by the average daily attendance of that school district for
that fiscal year and then multiplied by the ratio of local control
 funding  formula base grant funding computed pursuant to
subdivision (d) of Section 42238.02 to the local control funding
formula amount for that fiscal year computed pursuant to Section
42238.02.
   (3) If the entitlements for the school district from which the
pupil or pupils were transferred computed pursuant to paragraphs (1)
to (4), inclusive, of subdivision (a), and paragraph (3) of
subdivision (b), of Section 42238.03, include funding calculated
pursuant to Article 4 (commencing with Section 42280) of Chapter 7
for a fiscal year, paragraph (2) shall not apply and the
apportionment of state funds for the average daily attendance
credited pursuant to this section for that fiscal year shall be
calculated pursuant to paragraph (1).
   (c) For purposes of subdivision  (b) of this section,
  (b),  "basic aid school district" means a school
district that does not receive from the state, for any fiscal year in
which this section is applied, an apportionment of state funds
pursuant to subdivision (o) of Section 42238.02.
   SEC. 43.    Section 41610 of the   Education
Code   is repealed.  
   41610.  (a) Notwithstanding any other provision of law, commencing
with the 1988-89 fiscal year any school district that has discovered
an error in the attendance accounting computer program that has
caused it to overstate its average daily attendance is not required
to amend its prior years' reports, if the independent audit for the
1987-88 fiscal year or any previous fiscal year did not reveal the
error.
   Commencing with the 1989-90 fiscal year, no school district is
entitled to a declining enrollment adjustment under Section 42238.5,
or any other provision, for a decline in average daily attendance
that is a result of an overstatement of the 1987-88 fiscal year
average daily attendance.
   (b) Notwithstanding any other provision of law, any school
district that has experienced all of the following shall not have its
revenue limit apportionment adjusted for the 1988-89 fiscal year or
any prior fiscal year as a result of any attendance reporting error
occurring in the 1987-88 fiscal year or any prior fiscal year:
   (1) The district has used an attendance accounting computer system
since the 1978-79 school year.
   (2) The attendance accounting system has been audited during the
annual financial audit since the 1979-80 fiscal year and, despite the
annual audits, has been found to contain an error.
   (3) The district has experienced declining enrollment from the
1987-88 fiscal year to the 1988-89 fiscal year.
   (c) Any school district for which subdivision (b) is applicable
shall calculate its declining enrollment adjustment pursuant to
Section 42251 based upon the corrected average daily attendance for
the 1987-88 fiscal year rather than based upon the average daily
attendance originally reported for the 1987-88 fiscal year. 

   SEC. 44.    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 conducted in accordance with Section
42103 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.
   (2) (A) 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. The 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. For the 2014-15 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, if an existing local control and
accountability plan or annual update to a local control and
accountability plan is not effective for the budget year. The
governing board of a school district shall not adopt a budget that
does not include the expenditures necessary to implement the local
control and accountability plan or the annual update to a local
control and accountability plan that is effective for the budget
year.
   (B) Commencing with budgets adopted for the 2015-16 fiscal year,
the governing board of a school district that proposes to adopt a
 budget, or revise a budget pursuant to subdivision (e),
  budget  that includes a combined assigned and
unassigned ending fund balance in excess of the minimum recommended
reserve for economic uncertainties adopted by the state board
pursuant to subdivision (a) of Section 33128, shall, at the public
hearing held pursuant to paragraph (1), provide all of the following
for public review and discussion:
   (i) The minimum recommended reserve for economic uncertainties for
each fiscal year identified in the budget.
   (ii) The combined assigned and unassigned ending fund balances
that are in excess of the minimum recommended reserve for economic
uncertainties for each fiscal year identified in the budget.
   (iii) A statement of reasons that substantiates the need for an
assigned and unassigned ending fund balance that is in excess of the
minimum recommended reserve for economic uncertainties for each
fiscal year that the school district identifies an assigned and
unassigned ending fund balance that is in excess of the minimum
recommended reserve for economic uncertainties, as identified
pursuant to clause (ii).
   (C) The governing board of a school district shall include the
information required pursuant to subparagraph (B) in its budgetary
submission each time it files an adopted or revised budget with the
county superintendent of schools. The information required pursuant
to subparagraph (B) shall be maintained and made available for public
review.
   (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 includes the expenditures
necessary to implement the local control and accountability plan or
annual update to the local control and accountability plan approved
by the county superintendent of schools.
   (4) Determine whether the adopted budget includes a combined
assigned and unassigned ending fund balance that exceeds the minimum
recommended reserve for economic uncertainties. If the adopted budget
includes a combined assigned and unassigned ending fund balance that
exceeds the minimum recommended reserve for economic uncertainties,
the county superintendent of schools shall verify that the school
district complied with the requirements of subparagraphs (B) and (C)
of paragraph (2) of subdivision (a).
   (d) (1) On or before  August   September
 15, the county superintendent of schools shall approve,
conditionally approve, or disapprove the adopted budget for each
school district. For the 2014-15 fiscal year and each fiscal year
thereafter, the county superintendent of schools shall disapprove a
budget if the county superintendent of schools determines that the
budget does not include the expenditures necessary to implement a
local control and accountability plan or an annual update to the
local control and accountability plan approved by the county
superintendent of schools. If the governing board of 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 budget prepared by the county superintendent of
schools shall also comply with the requirements of subparagraph (B)
of paragraph (2) of subdivision (a). 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), (2),
(3), or (4) of that subdivision, he or she shall conditionally
approve or disapprove the budget and, not later than  August
  September  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   September  20.
   (2)  Notwithstanding any other provision of this article, for the
2014-15 fiscal year and each fiscal year thereafter, the budget shall
not be adopted or approved by the county superintendent of schools
before a local control and accountability plan or update to an
existing local control and accountability plan for the budget year is
approved.
   (3) If the adopted budget of a school district is conditionally
approved or disapproved pursuant to paragraph (1), on or before
 September   October  8, the governing
board of the school district, in conjunction with the county
superintendent of schools, shall review and respond to the
recommendations of the county superintendent of schools at a regular
meeting of the governing board of the school district. 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.
   (e) On or before  September   October 
22, the county superintendent of schools shall provide a list to the
Superintendent identifying all school districts for which budgets may
be disapproved.
   (f) (1) The county superintendent of schools shall examine the
revised budget as provided in paragraph (3) of subdivision (d) to
determine whether 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 school
district to meet its financial obligations during the fiscal year,
(C) satisfies all conditions established by the county superintendent
of schools in the case of a conditionally approved budget, (D) is
consistent with a financial plan that will enable the school district
to satisfy its multiyear
       financial commitments, and, not later than  October
  November  8, shall approve or disapprove the
revised budget, and (E) whether the revised budget complies with the
requirements of subparagraph (B) of paragraph (2) of subdivision (a).
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.   December 31.  If no budget is
adopted by  November 30,   December 31, 
the Superintendent may adopt a budget for the school district. The
Superintendent shall report to the Legislature and the Director of
Finance by  December   January  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.   December 31.
 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.
   (2) Notwithstanding any other law, for the 2014-15 fiscal year and
each fiscal year thereafter, if the county superintendent of schools
disapproves the budget for the sole reason that the county
superintendent of schools has not approved a local control and
accountability plan or an annual update to the local control and
accountability plan filed by the governing board of the school
district pursuant to Section 52070, the county superintendent of
schools shall not call for the formation of a budget review committee
pursuant to Section 42127.1.
   (g) Not later than  October   November 
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 paragraph (1) of subdivision (d).
   (h) 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.

   (i) 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.
   SEC. 45.    Section 42127.1 of the  
Education Code   is amended to read: 
   42127.1.  (a) Pursuant to subdivision (g) or (i) of Section 42127,
upon the disapproval of a school district budget by the county
 superintendent,   superintendent of schools,
 the county superintendent  of schools  shall call for
the formation of a budget review committee 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.   December 31.
 The Superintendent shall report to the Legislature and the
Director of Finance by  December  January 
10 if any 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.  
December 31.  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.
   (b) The budget review committee shall be composed of three persons
selected by the governing board of the school district from a list
of candidates provided to the governing board  of the school
district  by the  Superintendent of Public Instruction.
  Superintendent.  The list of candidates shall be
composed of persons who have expertise in the management of a school
district or county office of education. Their experience shall
include, but not be limited to, the fiscal and educational aspects of
local educational agency management.
   (c) Notwithstanding subdivision (b) or any other provision of this
article, with the approval of the Superintendent and the governing
board of the school district, the county superintendent of schools
may select and convene a regional review committee, consisting of
persons having the expertise described in that subdivision. The
regional review committee shall operate in place of the budget review
committee, in accordance with the provisions of this article
governing budget review committees.
   (d) Members of the committee shall be reimbursed by the department
for their services and associated expenses while on official
business at rates established by the  State Board of
Education.   state board. 
   SEC. 46.    Section 42127.2 of the  
Education Code   is amended to read: 
   42127.2.  (a) The governing board of a school district shall, no
later than five working days after the receipt of a candidate list
from the Superintendent  of Public Instruction 
pursuant to Section 42127.1, select a budget review committee, and
the Superintendent  of Public Instruction  shall
convene the committee no later than five working days following that
selection. If the governing board  of the school district 
fails to select a committee within the period of time permitted by
this subdivision, the Superintendent  of Public Instruction
 instead shall select and convene the budget review
committee no later than 10 working days after the district's receipt
of the candidate list.
   (b)  No later than October 31,   On or before
November 30,  the budget review committee shall review the
proposed budget of the district and the underlying fiscal policies of
the  school  district and transmit to the Superintendent of
Public Instruction, the county superintendent of schools, and the
governing board of the school district either of the following:
   (1) The recommendation that the school district budget be
approved.
   (2) A report disapproving the school district budget and setting
forth recommendations for revisions to the school district budget
that would enable the district to meet its financial obligations both
in the current fiscal year and with regard to the district's
multiyear financial commitments.
   (c) The Superintendent  of Public Instruction 
may extend the deadline set forth in subdivision (b) for a period of
not more than 15 working days.
   (d) The Superintendent  of Public Instruction 
shall establish criteria and procedures governing the performance by
budget review committees of their duties  under 
 pursuant to  this section.
   (e) Upon request of the county superintendent of schools, the
Controller's office may conduct an audit or review of the fiscal
condition of the school district in order to assist a budget review
committee or regional review committee for the purposes of this
section.
   SEC. 47.    Section 42127.3 of the  
Education Code   is amended to read: 
   42127.3.  (a) If the budget review committee established pursuant
to Sections 42127.1 and 42127.2 recommends approval of the school
district budget, the county superintendent of schools shall accept
the recommendation of the budget review committee and approve the
budget.
   (b) If the budget review committee established pursuant to
Sections 42127.1 and 42127.2 disapproves the school district budget,
the  school district governing board,  
governing board of the school district,  not later than five
working days after receipt of the report described in paragraph (2)
of subdivision (b) of Section 42127.2, may submit a response to the
Superintendent, including any revisions to the adopted final budget
and any other proposed actions to be taken as a result of the
recommendations of the budget review committee. Based upon the
recommendations of the budget review committee and any response to
those recommendations provided by the governing board of the school
district, the Superintendent shall either approve or disapprove the
budget. If the Superintendent disapproves the budget, he or she shall
notify the governing board of the school district in writing of the
reasons for that disapproval and, until the county superintendent
 of schools certifies the  school  district's first
interim report pursuant to Section 42131, the county superintendent
of schools shall do the following as necessary:
   (1)  Not later than November 30,   On or
before December 31,  develop and adopt, in consultation with the
Superintendent and the governing board of the school district, a
fiscal plan and budget that will govern the district and will allow
the district to meet its financial obligations, both in the current
fiscal year and with regard to the district's multiyear financial
commitments. The Superintendent may extend the date by which the
county superintendent of schools is required to develop and adopt a
fiscal plan and budget. The governing board of the school district
shall govern the operation of the  school  district for the
current fiscal year in accordance with that adopted budget.
   (2) Cancel purchase orders, prohibit the issuance of nonsalary
warrants, and otherwise stay or rescind any action that is
inconsistent with the budget adopted pursuant to paragraph (1). The
county superintendent of schools shall inform the governing board of
the school district in writing of his or her justification for any
exercise of authority under this paragraph.
   (3) Monitor and review the operation of the school district.
   (4) Determine the need for additional staff and may employ,
subject to approval by the Superintendent, short-term analytical
assistance or expertise to validate financial information if the 
school  district staff does not have the expertise or staff.
   (5) Require the school district to encumber all contracts and
other obligations, to prepare appropriate cashflow analyses and
monthly or quarterly budget revisions, and to appropriately record
all receivables and payables.
   (6) Determine whether there are any financial problem areas and
may employ, subject to approval by the Superintendent, a certified
public accounting firm to investigate financial problem areas.
   (7) Withhold compensation of the members of the governing board
 of the school district  and the  district 
superintendent  of the school district  for failure to
provide requested financial information. A forfeiture may be appealed
to the Superintendent pursuant to subdivision (b) of Section
42127.6.
   (c) If, during the selection of the budget review committee or
during the committee's review of the budget, an agreement is reached
between the governing board of the school district and the county
superintendent of schools, and the school district revises its budget
to comply with this agreement, the county superintendent of schools
shall approve the  school  district budget and the budget
review committee selection, or its review of the budget, shall be
canceled.
   (d) The school district shall pay 75 percent and the county office
of education shall pay 25 percent of the actual administrative
expenses incurred pursuant to subdivision (b), or costs associated
with improving the district's financial management practices. The
Superintendent shall develop, and distribute to affected school
districts and county offices of education, advisory guidelines
regarding the appropriate amount of any fees charged pursuant to this
subdivision.
   (e) This section shall not be construed to authorize the county
superintendent of schools to abrogate any provision of a collective
bargaining agreement that was entered into by a school district prior
to the date upon which the county superintendent of schools
disapproved the budget of the school district pursuant to subdivision
(b).
  SEC. 48.    Section 42127.8 of the  
Education Code   is amended to read: 
   42127.8.  (a) The governing board provided for in subdivision (b)
shall establish a unit to be known as the County Office Fiscal Crisis
and Management Assistance Team. The team shall consist of persons
having extensive experience in school district budgeting, accounting,
data processing, telecommunications, risk management, food services,
pupil transportation, purchasing and warehousing, facilities
maintenance and operation, and personnel administration,
organization, and staffing. The Superintendent may appoint one
employee of the department to serve on the unit. The unit shall be
operated under the immediate direction of an appropriate county
office of education selected jointly, in response to an application
process, by the Superintendent and the president of the state board
or his or her designee.
   (b) The unit established under subdivision (a) shall be selected
and governed by a 25-member governing board consisting of one
representative chosen by the California County Superintendents
Educational Services Association from each of the 11 county service
regions designated by the association, 11 superintendents of school
districts chosen by the Association of California School
Administrators from each of the 11 county service regions, one
representative from the department chosen by the Superintendent, the
Chancellor of the California Community Colleges or his or her
designee, and one member of a community college district governing
board chosen by the chancellor. The governing board of the County
Office Fiscal Crisis and Management Assistance Team shall select a
county superintendent of schools to chair the unit.
   (c) (1) The Superintendent may request the unit to provide the
assistance described in subdivision (b) of Section 1624, Section
1630, subdivision (b) of Section 42127.3, subdivision (c) of Section
42127.6,  and  Section 42127.9, and  with the
computation described in  subdivision (a) of Section 42238.2,
and to review the fiscal and administrative condition of any county
office of education, school district, or charter school.
   (2) A county superintendent of schools may request the unit to
review the fiscal or administrative condition of a school district or
charter school under his or her jurisdiction.
   (3) The Board of Governors of the California Community Colleges
may request the unit to provide the assistance described in Section
84041.
   (d) In addition to the functions described in subdivision (c), the
unit shall do all of the following:
   (1) Provide fiscal management assistance, at the request of any
school district, charter school, or county office of education, or,
pursuant to subdivision (g) of Section 84041, at the request of any
community college district. Each school district, charter school, or
county office of education receiving that assistance shall be
required to pay the onsite personnel costs and travel costs incurred
by the unit for that purpose, pursuant to rates determined by the
governing board established under subdivision (b). The governing
board annually shall distribute rate information to each school
district, charter school, and county office of education.
   (2) Facilitate training for members of the governing board of the
school district, district and county superintendents, chief financial
officers within the district, and schoolsite personnel whose primary
responsibility is to address fiscal issues. Training services shall
emphasize efforts to improve fiscal accountability and expand the
fiscal competency of local agencies. The unit shall use state
professional associations, private organizations, and public agencies
to provide guidance, support, and the delivery of any training
services.
   (3) Facilitate fiscal management training through the 11 county
service regions to county office of education staff to ensure that
they develop the technical skills necessary to perform their
fiduciary duties. The governing board established pursuant to
subdivision (b) shall determine the extent of the training that is
necessary to comply with this paragraph.
   (4) Produce a training calendar, to be disseminated semiannually
to each county service region, that publicizes all of the fiscal
training services that are being offered at the local, regional, and
state levels.
   (e) The governing board shall reserve not less than 25 percent,
nor more than 50 percent, of its revenues each year for expenditure
for the costs of contracts and professional services as management
assistance to school districts or county superintendents of schools
in which the board determines that a fiscal emergency exists.
   (f) The governing board established under subdivision (b) may levy
an annual assessment against each county office of education that
elects to participate under this section in an amount not to exceed
twenty cents ($0.20) per unit of total average daily attendance for
all school districts within the county. The revenues collected
pursuant to that assessment shall be applied to the expenses of the
unit.
   (g) The governing board established under subdivision (b) may pay
to the department, from any available funds, a reasonable amount to
reimburse the department for actual administrative expenses incurred
in the review of the budgets and fiscal conditions of school
districts, charter schools, and county superintendents of schools.
   (h) When employed as a fiscal adviser by the department pursuant
to Section 1630, employees of the unit established pursuant to
subdivision (a) shall be considered employees of the department for
purposes of errors and omissions liability insurance.
   (i) (1) The unit shall request and review applications to
establish regional teams of education finance experts throughout the
state.
   (2) To the extent that funding is provided for purposes of this
subdivision in the annual Budget Act or through another
appropriation, regional teams selected by the Superintendent, in
consultation with the unit, shall provide training and technical
expertise to school districts, charter schools, and county offices of
education facing fiscal difficulties.
   (3) The regional teams shall follow the standards and guidelines
of and remain under the general supervision of the governing board
established under subdivision (b).
   (4) It is the intent of the Legislature that, to the extent
possible, the regional teams be distributed geographically throughout
the various regions of the state in order to provide timely,
cost-effective expertise to school districts, charter schools, county
offices of education, and community college districts throughout the
state.
   SEC. 49.    Section 42238.01 of the  
Education Code   is amended to read: 
   42238.01.  For purposes of Section 42238.02, the following
definitions shall apply: 
   (a) "Eligible for free or reduced-price meals" means determined to
meet federal income eligibility criteria or deemed to be
categorically eligible for free or reduced-price meals under the
National School Lunch Program, as described in Part 245 of Title 7 of
the Code of Federal Regulations. A school participating in a special
assistance alternative authorized by Section 11(a)(1) of the Richard
B. Russell National School Lunch Act (Public Law 113-79), including
Provision 2, Provision 3, or the Community Eligibility Option, may
establish a base year for purposes of the local control funding
formula by collecting household income data to determine whether a
student meets free and reduced-price meal income eligibility criteria
at least once every four years, if the school determines free and
reduced-price meal eligibility for each new enrolled or disenrolled
pupil between base year eligibility determination collections. A
school that uses the special assistance alternative shall maintain
information on each student's income eligibility status and annually
submit information on that status in the California Longitudinal
Pupil Achievement Data System pursuant to paragraph (2) of
subdivision (b) of Section 42238.02 or subparagraph (A) of paragraph
(3) of subdivision (b) of Section 2574, as applicable.  

   (a) "Eligible for free or reduced-price meals" means determined to
meet federal income eligibility criteria, either through completing
an application for the federal National School Lunch Program or
through an alternative household income data collection form, or
deemed to be categorically eligible for free or reduced-price meals
under the federal National School Lunch Program, as described in Part
245 of Title 7 of the Code of Federal Regulations. 
   (1) A school participating in a special assistance alternative
authorized by Section 11(a)(1) of the Richard B. Russell National
School Lunch Act (Public Law 113-79), including Provision 2,
Provision 3, or the Community Eligibility Provision, may establish a
base year for purposes of the local control funding formula by
determining the pupils at the school who are eligible for free or
reduced-price meals and using each pupil's eligibility status in that
base year to report eligibility for up to each of the following
three school years. The school may include between base year
eligibility determinations, any newly enrolled pupils who are
determined to be eligible for free or reduced-price meals or any
current pupils found to be newly eligible for free or reduced-price
meals as identified through a local or state direct certification
match or another categorical designation.  
   (2) A school that uses the special assistance alternative shall
maintain information on each pupil's eligibility status and annually
submit information on that status in the California Longitudinal
Pupil Achievement Data System pursuant to paragraph (2) of
subdivision (b) of Section 42238.02 or subparagraph (A) of paragraph
(3) of subdivision (b) of Section 2574, as applicable.  
   (3) For a pupil who transfers to a school using a special
assistance alternative and who is transferring between schools within
the same school district, documentation supporting eligibility for
that pupil for purposes of the local control funding formula may be
transferred from the pupil's old school to the pupil's new school, as
long as the documentation supporting eligibility for that pupil is
less than four years old and is updated at least once every four
years. 
    (4)    To the extent permitted by federal law,
a school may choose to establish a new base year for purposes of the
 federal National School Lunch Program at the same time the
school establishes a new base year for purposes of the local control
funding formula. A school may use  federal  National School
Lunch Program application forms to collect household income data as
permitted under the  federal  National School Lunch Program.
If the use of  federal  National School Lunch Program
application forms is not permitted, a school shall use alternative
 household  income data collection forms.
   (5) An alternative household income data collection form shall be
confidential and shall not be shared by the school other than as
necessary for purposes of determining funding allocations under the
local control funding formula and for assessing the accountability of
that funding. An alternative household income data collection form
shall contain, at a minimum, all of the following information: 
   (A) Information sufficient to identify the pupil or pupils. 

   (B) Information sufficient to determine that the pupil or
household meets federal income eligibility criteria sufficient to
qualify for either a free or reduced-priced meal under the Richard B.
Russell National School Lunch Act (Public Law 113-79).  
   (C) Certification that the information is true and correct by the
pupil's adult household member.  
   (6) Paragraphs (1) and (3) are effective commencing with the
2014-15 fiscal year. 
   (b) "Foster youth" means any of the following:
   (1) A child who is the subject of a petition filed pursuant to
Section 300 of the Welfare and Institutions Code, whether or not the
child has been removed from his or her home by the juvenile court
pursuant to Section 319 or 361 of the Welfare and Institutions Code.
   (2) A child who is the subject of a petition filed pursuant to
Section 602 of the Welfare and Institutions Code, has been removed
from his or her home by the juvenile court pursuant to Section 727 of
the Welfare and Institutions Code, and is in foster care as defined
by subdivision (d) of Section 727.4 of the Welfare and Institutions
Code.
   (3) A nonminor under the transition jurisdiction of the juvenile
court, as described in Section 450 of the Welfare and Institutions
Code, who satisfies all of the following criteria:
   (A) He or she has attained 18 years of age while under an order of
foster care placement by the juvenile court, and is not more than 19
years of age on or after January 1, 2012, not more than 20 years of
age on or after January 1, 2013, and not more than 21 years of age,
on or after January 1, 2014, and as described in Section 10103.5 of
the Welfare and Institutions Code.
   (B) He or she is in foster care under the placement and care
responsibility of the county welfare department, county probation
                                             department, Indian
tribe, consortium of tribes, or tribal organization that entered into
an agreement pursuant to Section 10553.1 of the Welfare and
Institutions Code.
   (C) He or she is participating in a transitional independent
living case plan pursuant to Section 475(8) of the federal Social
Security Act (42 U.S.C. Sec.  675(8)),   675),
 as contained in the federal Fostering Connections to Success
and Increasing Adoptions Act of 2008 (Public Law 110-351), as
described in Section 11403 of the Welfare and Institutions Code.
   (c) "Pupils of limited English proficiency" means pupils who do
not have the clearly developed English language skills of
comprehension, speaking, reading, and writing necessary to receive
instruction only in English at a level substantially equivalent to
pupils of the same age or grade whose primary language is English.
"English learner" shall have the same meaning as  is
 provided for in subdivision (a) of Section 306 and as
"pupils of limited English proficiency."
   SEC. 50.    Section 42238.4 of the  
Education Code   is repealed.  
   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. 

   SEC. 51.    Section 42238.41 of the  
Education Code   is repealed.  
   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). 
   SEC. 52.    Section 42238.42 of the  
Education Code   is repealed.  
   42238.42.  (a) In the event that the amount required to be
appropriated for the purpose of the state's minimum funding
obligation to school districts and community college districts
pursuant to Section 8 of Article XVI of the California Constitution
for the 1996-97 fiscal year, as determined in paragraph (1) of
subdivision (b), exceeds the amount appropriated for that purpose for
the 1996-97 fiscal year, as determined pursuant to paragraph (2) of
subdivision (b), the amount computed pursuant to subdivision (d), is
hereby appropriated from the General Fund to the Superintendent of
Public Instruction for the purposes of equalizing the revenue limits
of school districts pursuant to subdivision (e) and Section 42238.43
and for the purpose of reducing the deficit factor applied to the
revenue limits of county superintendents of schools pursuant to
Section 2558.45 and reducing the deficit factor applied to the
revenue limits of the school districts pursuant to Section 42238.145.

   (b) To determine the amounts available for the purposes of this
section, the Department of Finance shall make the following
computations:
   (1) At the first principal apportionment for the 1997-98 fiscal
year, compute the level of General Fund revenues that meets the state'
s minimum funding obligation to school districts and community
college districts pursuant to Section 8 of Article XVI of the
California Constitution for the 1996-97 fiscal year based upon the
most current determination of data as defined in subdivision (a) of
Section 41206 of the Education Code.
   (2) Subtract from the amount determined in paragraph (1) an amount
equal to the total amount of General Fund revenues that have been
appropriated for the purpose of meeting the state's minimum funding
obligation for the 1996-97 fiscal year to school districts and
community college districts pursuant to Section 8 of Article XVI of
the California Constitution as of February 1, 1998.
   (3) If the amount computed in paragraph (2) is greater than zero,
that amount is the total amount available for the purposes of this
section.
   (c) To determine the portion of the amount computed in subdivision
(a) to set aside for community college districts pursuant to this
section, the Department of Finance shall make the following
computations:
   (1) Add the total General Fund allocations to school districts and
community college districts for the purposes of meeting the state's
minimum funding obligation to school districts and community college
districts pursuant to Section 8 of Article XVI of the California
Constitution for the 1996-97 fiscal year to the total statewide
amount of "allocated local proceeds of taxes," as defined in
subdivisions (g) and (h) of Section 41202, allocated to school
districts and community college districts for the 1996-97 fiscal
year.
   (2) Divide the sum of the General Fund allocations made to
community college districts for the purposes of meeting the state's
minimum funding obligation to community college districts pursuant to
Section 8 of Article XVI of the California Constitution for the
1996-97 fiscal year and the total statewide amount of "allocated
local proceeds of taxes," as defined in subdivision (h) of Section
41202, allocated to community college districts for the 1996-97
fiscal year by the sum computed pursuant to paragraph (1).
   (3) Multiply the amount computed pursuant to subdivision (b) by
the percentage determined in paragraph (2). Community college
districts shall be entitled to receive an amount equal to the amount
computed pursuant to this paragraph and that amount shall be set
aside from the General Fund for appropriation to community college
districts by the Legislature.
   (d) The amount of the appropriation made pursuant to subdivision
(a) of this section shall be computed by subtracting the amount
computed in paragraph (3) of subdivision (c) from the amount computed
pursuant to subdivision (b). The Director of the Department of
Finance shall certify to the Controller the amount of the
appropriation computed pursuant to this subdivision and under no
circumstances shall funds be released by the Controller for purposes
of this section before that certification is received by the
Controller.
   (e) The Superintendent of Public Instruction shall allocate 50
percent of the amount computed pursuant to subdivision (d) to school
districts for the purpose of making equalization adjustments to the
base revenue limit of school districts for the 1996-97 fiscal year,
as follows:
   (1) The Superintendent of Public Instruction shall perform the
computations set forth in Section 42238.43 for the purpose of
equalization adjustments to the base revenue limits of school
districts for the 1996-97 fiscal year to determine the amount to
allocate to each school district pursuant to this paragraph.
   (2) The Superintendent of Public Instruction shall repeat the
process of computing equalization adjustments to the base revenue
limits of school districts for the 1996-97 fiscal year pursuant to
Section 42238.43 until the total amount of funds available for that
purpose pursuant to this subdivision is allocated to school
districts.
   (3) If the total amount of funds available for allocation pursuant
to this subdivision is insufficient to fully fund the amounts
computed pursuant to paragraph (1) or the amount computed pursuant to
any of the iterations made pursuant to paragraph (2), the
allocations computed pursuant to those paragraphs shall be reduced
proportionately.
   (f) The Superintendent of Public Instruction shall allocate 50
percent of the amount computed pursuant to subdivision (d) to county
superintendents of schools for the purpose of reducing the 1996-97
and 1997-98 deficit factors applied to the revenue limits of county
superintendent 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. 
   SEC. 53.    Section 42238.43 of the  
Education Code   is repealed.  
   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. 
  SEC. 54.    Section 42238.44 of the  
Education Code   is repealed.  
   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.

   SEC. 55.    Section 42238.445 of the  
Education Code  is repealed.  
   42238.445.  (a) (1) For the 2002-03 fiscal year, the
Superintendent of Public Instruction shall compute an equalization
adjustment for each school district by determining the amount that
would be necessary to assure 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. 
   SEC. 56.    Section 42238.45 of the  
Education Code   is repealed.  
   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. 
   SEC. 57.    Section 42238.46 of the  
Education Code   is repealed.  
   42238.46.  (a) For the 2003-04 fiscal year, the Superintendent of
Public Instruction shall compute an equalization adjustment for each
school district so that no district's 2002-03 adjusted base revenue
limit per unit of average daily attendance is less than the 2002-03
fiscal year adjusted base revenue limit above which fall not more
that 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. 
   SEC. 58.    Section 42238.48 of the  
Education Code   is repealed.  
   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.

   SEC. 59.    Section 42238.485 of the  
Education Code   is repealed.  
   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. 
   SEC. 60.    Section 42238.49 of the  
Education Code   is repealed.  
   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.

   SEC. 61.    Section 42238.7 of the  
Education Code   is repealed.  
   42238.7.  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.

   SEC. 62.    Section 42238.8 of the  
Education Code   is repealed.  
   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 fiscal year 1996-97 pursuant to subdivision (b)
of Section 46010 as it read on July 1, 1996, was significantly lower
than it would ordinarily have been in comparison to the amount of
actual attendance in fiscal year 1996-97, the Superintendent of
Public Instruction shall make a compensating adjustment, consistent
with the provisions of Section 2 of the Education Code, in the
calculation set forth in this section. 
   SEC. 63.    Section 42238.9 of the 
Education Code   is repealed.  
   42238.9.  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. 
   SEC. 64.    Section 42238.95 of the  
Education Code   is repealed.  
   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). 
   SEC. 65.    Section 42238.11 of the  
Education Code   is repealed.  
   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. 
   SEC. 66.    Section 42238.12 of the  
Education Code   is repealed.  
   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), San Francisco Unified School
District shall receive an amount equal to five dollars and 57 cents
($5.57) multiplied by its second principal apportionment average
daily attendance for the 2001-02 fiscal year.
   (3) Notwithstanding any other law, total allocations pursuant to
this subdivision may not exceed thirty-five million dollars
($35,000,000).
   (d) Thirty-five million dollars ($35,000,000) is hereby
appropriated from the General Fund for transfer to Section A of the
State School Fund for local assistance for the purpose of limiting
the reductions to revenue limits calculated pursuant to this section
and to Section 2558 for the 2003-04 fiscal year. Funding from this
appropriation shall be allocated in the following manner:
   (1) Each school district and county office of education subject to
a reduced apportionment pursuant to this section or to Section 2558
shall receive a share of the amount appropriated in this subdivision
that is proportionate to the reduction in their apportionment
pursuant to this section or to Section 2558 for the 2003-04 fiscal
year as compared to the statewide total reduction that would occur
absent this paragraph.
   (2) For the 2003-04 fiscal year, instead of the alternative
calculation authorized by paragraph (1), the San Francisco Unified
School District shall receive an amount equal to five dollars and 57
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. 
   SEC. 67.    Section 42238.13 of the  
Education Code   is repealed.  
   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. 
   SEC. 68.    Section 42238.14 of the  
Education Code   is repealed.  
   42238.14.  For the purposes of this article, the revenue limit for
the 1993-94 fiscal year for each school district determined pursuant
to this article and adjusted pursuant to Section 42238.16 shall be
reduced by a 8.14 percent deficit factor. 
   SEC. 69.    Section 42238.145 of the  
Education Code   is repealed.  
   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. 
   SEC. 70.    Section 42238.146 of the  
Education Code   is repealed.  
   42238.146.  (a) (1) For the 2003-04 fiscal year, the revenue limit
for each school district determined pursuant to this article shall
be reduced by a 1.198 percent deficit factor.
   (2) For the 2004-05 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
0.323 percent deficit factor.
   (3) For the 2003-04 and 2004-05 fiscal years, the revenue limit
for each school district determined pursuant to this article shall be
further reduced by a 1.826 percent deficit factor.
   (4) For the 2005-06 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
0.892 percent deficit factor.
   (5) For the 2008-09 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
7.844 percent deficit factor.
   (6) For the 2009-10 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
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). 
   SEC. 71.    Section 42238.17 of the  
Education Code   is repealed.  
   42238.17.  Notwithstanding any other provision of law, for any
school district that was reorganized effective July 1, 1992, as a
unified school district and that is congruent to a school district
that was reorganized as an elementary school district effective July
1, 1990, the Superintendent of Public Instruction shall compute
apportionments using the following data:
   (a) For the purposes of paragraph (1) of subdivision (d) of
Section 42238 for the 1990-91 and 1991-92 fiscal years, the
superintendent shall use the actual number of units of average daily
attendance for the 1990-91 fiscal year second principal
apportionments.
   (b) For the purposes of paragraph (1) of subdivision (d) of
Section 42238, for the 1992-93 fiscal year and each fiscal year
thereafter, the superintendent shall use the actual number of units
of average daily attendance for the 1992-93 fiscal year second
principal apportionment. 
   SEC. 72.    Section 42238.23 of the  
Education Code   is repealed.  
   42238.23.  Notwithstanding any other provision of law, persons
providing services to local education agencies through use of a joint
powers authority involving the local education agency who would, in
absence of the joint powers authority, otherwise be considered school
employees and subject to the Public Employees' Retirement System
rate reduction to revenue limits authorized in Section 42238, shall
not be excluded from the calculations of the Public Employees'
Retirement System reduction authorized in that section. 
   SEC. 73.    Section 42239 of the   Education
Code   is repealed.  
   42239.  (a) For each fiscal year the Superintendent of Public
Instruction shall compute funding for supplemental instruction for
each school district or charter school by multiplying the number of
pupil hours of supplemental instruction claimed pursuant to Sections
37252 and 37252.2 by the pupil hour allowance specified in
subdivision (b) or by a pupil hour allowance specified in the annual
Budget Act in lieu of the amount computed in subdivision (b).
   (b) Hours of supplemental instruction shall be reimbursed at a
rate of three dollars and fifty-three cents ($3.53) per pupil hour,
adjusted in the 2005-06 fiscal year and subsequent fiscal years as
specified in this section, provided that a different reimbursement
rate may be specified for each fiscal year in the annual Budget Act
that appropriates funding for that fiscal year. This amount shall be
increased annually by the percentage increase pursuant to subdivision
(b) of Section 42238.1 granted to school districts or charter
schools for base revenue limit cost-of-living increases.
   (c) (1) If appropriated funding is insufficient to pay all claims
made in any fiscal year pursuant to Sections 37252 and 37252.2, the
superintendent shall use any available funding appropriated for the
purposes of reimbursing school districts pursuant to Section 37252 or
37252.2.
   (2) If appropriated funding is still insufficient to pay all
claims made in any fiscal year pursuant to Section 37252 or 37252.2,
the superintendent shall use any available funding appropriated for
the purposes of reimbursing school districts for supplemental
instruction in the prior fiscal year.
   (3) If appropriated funding is still insufficient to pay all
claims made in any fiscal year pursuant to Section 37252 or 37252.2,
the superintendent shall use any available funding appropriated for
the purposes of reimbursing school districts for supplemental
instruction in the current fiscal year.
   (4) The superintendent shall notify the Director of Finance that
there is an insufficiency of funding appropriated for the purposes of
Sections 37252 and 37252.2 only after the superintendent has
exhausted all available balances of appropriations made for the
current or prior fiscal years for the reimbursement of school
districts for supplemental instruction.
   (d) Notwithstanding any other provision of law, neither the State
Board of Education nor the Superintendent of Public Instruction may
waive any provision of this section. 
   SEC. 74.    Section 42240 of the   Education
Code   is repealed.  
   42240.  For the 1988-89 fiscal year, the Superintendent of Public
Instruction shall do the following:
   (a) Using the latest available data as of July 1, 1987, identify
each school district that meets all of the following criteria:
   (1) Has a second principal apportionment average daily attendance
of fewer than 2,501 for the prior fiscal year.
   (2) Has approved home-to-school transportation costs in excess of
3 percent of its general fund total expense of education in the prior
fiscal year.
                                            (b) For each school
district identified pursuant to subdivision (a), or that receives
funding pursuant to Section 42240 or 42240.1 in the prior fiscal
year, the superintendent shall make the following calculations:
   (1) Subtract from the approved home-to-school transportation costs
an amount equal to 3 percent of the general fund total expense of
education exclusive of lottery revenues.
   (2) Compare the amount determined in paragraph (1) to the amount
the district received in the 1987-88 fiscal year pursuant to Sections
42240 and 42240.1.
   (c) If the comparison results in an amount less than the amount
received in the 1987-88 fiscal year, the superintendent shall use
that amount, but in no case shall the superintendent use an amount
less than 95 percent of the amount received in the 1987-88 fiscal
year.
   (d) The superintendent shall calculate the net savings from the
comparison in subdivision (c).
   (e) If the comparison results in an amount greater than the amount
received in the 1987-88 fiscal year, the superintendent shall use
the amount calculated as the sum of the following:
   (1) The amount received in the 1987-88 fiscal year.
   (2) The amount determined by allocating the net savings calculated
in subdivision (d) on a pro rata basis to each district in
proportion to the amount by which comparison results in an amount
greater than the amount received in the 1987-88 fiscal year.
   (f) The superintendent shall divide the amount determined pursuant
to subdivision (c) or (e), whichever is appropriate, by the 1987-88
second principal apportionment average daily attendance.
   (g) The amount determined by subdivision (f) may be added to the
amount determined pursuant to subdivision (b) of Section 42238.
   (h) The amount determined pursuant to subdivision (c) or (e),
whichever is appropriate, may be added to the district's
transportation allowance under Section 41850.
   (i) Each school district eligible for funds may elect to have the
funds allocated pursuant to either subdivision (g) or (h).
   (j) The amounts added to subdivision (b) of Section 42238 pursuant
to subdivision (g) and the amount added to Section 41850 by
subdivision (h) shall be considered to be permanent adjustments to
the base revenue limit or transportation allowance as appropriate.

   SEC. 75.    Section 42240.1 of the  
Education Code   is repealed.  
   42240.1.  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.
   This section shall become operative January 1, 1982. 
   SEC. 76.    Section 42241.3 of the  
Education Code   is repealed.  
   42241.3.  (a) This section applies only to the funding generated
by the average daily attendance of pupils attending a charter school
that has operated as a charter school since prior to July 1, 2005, if
a unified school district has been the sponsoring local educational
agency as defined in subdivision (i) of Section 47632, and if the
unified school district was governed by Section 47660 as that section
read on December 31, 2005.
   (b) For the 2005-06 fiscal year only, the revenue limit funding of
a unified school district, other than a unified school district that
has converted all of its schools to charter status pursuant to
Section 47606 and is operating them as charter schools, shall be
increased or decreased to reflect half 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.

   SEC. 77.    Section 42241.7 of the  
Education Code   is repealed.  
   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.

   SEC. 78.    Section 42243.7 of the  
Education Code   is repealed.  
   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. 
   SEC. 79.    Section 42244 of the   Education
Code   is repealed.  
   42244.  It is the intent of the Legislature that, in the event a
district increases its average daily attendance at a continuation
education school above the average daily attendance level approved
pursuant to subdivision (a) of Section 42243.7, the entire amount of
the revenues generated by the additional average daily attendance
shall be expended on the continuation education school program.

   SEC. 80.    Section 42245 of the   Education
Code   is repealed.  
   42245.  Whenever any computation required by this article results,
because of estimating or other errors, in a total revenue limit in
an amount more or less than actual data would have produced, the
revenue limit for the succeeding fiscal year shall be reduced by an
amount equal to the amount of the error if the total produced was
more, and may be increased by an amount up to the amount of the error
if the total produced was less. 
   SEC. 81.    Section 42280 of the   Education
Code   is amended to read: 
   42280.  (a) For each school district that meets, in the current or
prior fiscal year, the conditions specified in Section 
42281, 42282,  42282  or 42284 the Superintendent
shall compute, for each qualifying school in the school district, an
amount pursuant to this article. 
   (b) The amount of funding for each qualified school district shall
equal the greater of either of the following:  
   (b) For each school district that is a countywide unified school
district that had fewer than 2,501 units of 
    (1)     The sum of necessary small
elementary school allowances determined pursuant to Section 42282 for
the prior year  average daily attendance  in the
1990-91 fiscal year, the Superintendent shall compute an amount
pursuant to this article for those schools that meet the conditions
specified in Sections 42283 and 42285 in the current or prior fiscal
year. This subdivision is only applicable to those schools funded
pursuant to this article in the 1990-91 fiscal year and, in
subsequent years, if the school district has no more than 3,000 units
of average daily attendance.   and the number of
full-time teachers, and necessary small high school allowances
determined pursuant to Section   42284 for the prior year
average daily attendance and the number of certificated employees.
 
   (2) The sum of necessary small elementary school allowances
determined pursuant to Section 42282 for the current year average
daily attendance and the number of full-time teachers, and necessary
small high school allowances determined pursuant to Section 42284 for
the current year average daily attendance and the number of
certificated employees. 
   SEC. 82.    Section 42281 of the   Education
Code   is repealed.  
   42281.  Except as specified in subdivision (d), for each
elementary school district that maintains only one school with a
second principal apportionment average daily attendance of less than
97, the Superintendent shall make one of the following computations,
whichever provides the lesser amount:
   (a) For each small school that has an average daily attendance
during the fiscal year of less than 25, exclusive of pupils attending
the 7th and 8th grades of a junior high school, and for which school
at least one teacher was hired full time, the Superintendent shall
compute for the school district fifty-two thousand nine hundred
twenty-five dollars ($52,925).
   (b) For each small school that has an average daily attendance
during the fiscal year of 25 or more and less than 49, exclusive of
pupils attending the 7th and 8th grades of a junior high school, and
for which school at least two teachers were hired full time for more
than one-half of the days schools were maintained, the Superintendent
shall compute for the school district one hundred five thousand
eight hundred fifty dollars ($105,850).
   (c) For each small school that has an average daily attendance
during the fiscal year of 49 or more but less than 73, exclusive of
pupils attending the 7th and 8th grades of a junior high school, and
for which school three teachers were hired full time for more than
one-half of the days schools were maintained, the Superintendent
shall compute for the school district one hundred fifty-eight
thousand seven hundred seventy-five dollars ($158,775).
   (d) For each small school that has an average daily attendance
during the fiscal year of 73 or more and less than 97, exclusive of
pupils attending the 7th and 8th grades of a junior high school, and
for which school four teachers were hired full time for more than
one-half of the days schools were maintained, the Superintendent
shall compute for the school district two hundred eleven thousand
seven hundred dollars ($211,700). A school district that qualifies
under this subdivision may use this funding calculation until the
local control funding formula allocation pursuant to Section
42238.02, as implemented by Section 42238.03, per unit of average
daily attendance multiplied by the average daily attendance produces
state aid equal to the small school funding formula. 
   SEC. 83.   Section 42282 of the   Education
Code   is amended to read: 
   42282.  For each district with fewer than 2,501 units of second
principal apportionment average daily attendance, on account of each
necessary small school, the Superintendent shall make the following
computations:
   (a) For each necessary small school which has an average daily
attendance during the fiscal year of less than 25, exclusive of
pupils attending the 7th and 8th grades of a junior high school, and
for which school at least one teacher was hired full time, the
Superintendent shall compute for the school district fifty-two
thousand nine hundred twenty-five dollars ($52,925).
   (b) For each necessary small school which has an average daily
attendance during the fiscal year of 25 or more and less than 49,
exclusive of pupils attending the 7th and 8th grades of a junior high
school, and for which school at least two teachers were hired full
time for more than one-half of the days schools were maintained, the
Superintendent shall compute for the school district one hundred five
thousand eight hundred fifty dollars ($105,850).
   (c) For each necessary small school which has an average daily
attendance during the fiscal year of 49 or more, but less than 73,
exclusive of pupils attending the 7th and 8th grades of a junior high
school, and for which school three teachers were hired full time for
more than one-half of the days schools were maintained, the
Superintendent shall compute for the school district one hundred
fifty-eight thousand seven hundred seventy-five dollars ($158,775).
   (d) For each necessary small school which has an average daily
attendance during the fiscal year of 73 or more and less than 97,
exclusive of pupils attending the 7th and 8th grades of a junior high
school, and for which school four teachers were hired full time for
more than one-half of the days schools were maintained, the
Superintendent shall compute for the school district two hundred
eleven thousand seven hundred dollars ($211,700).
   (e) A school district that  qualifies under this section
  continues to satisfy the criteria specified in Section
42283  may use this funding calculation until the local control
funding formula  allocation   of average
daily attendance multiplied by the average daily attendance 
 grade span adjusted base grant calculated pursuant to
subdivision (d) of Section 42238.02  produces state aid equal to
the small school funding formula.
   SEC. 84.    Section 42283 of the   Education
Code   is amended to read: 
   42283.  (a) For purposes of  Sections 42281 and 
 Section  42282, a "necessary small school" is an elementary
school with an average daily attendance of less than  97,
  97 pupils,  excluding pupils attending the
seventh and eighth grades of a junior high school, maintained by a
school district to which any of the following conditions apply:
   (1) If as many as five pupils residing in the school district and
attending kindergarten and grades 1 to 8, inclusive, excluding pupils
attending the seventh and eighth grades of a junior high school, in
the elementary school with an average daily attendance of less than
97  pupils  would be required to travel more than 10 miles
one way from a point on a well-traveled road nearest their home to
the nearest other public elementary school.
   (2) If as many as 15 pupils residing in the school district and
attending kindergarten and grades 1 to 8, inclusive, excluding pupils
attending the seventh and eighth grades of a junior high school, in
the elementary school with an average daily attendance of less than
97  pupils  would be required to travel more than five miles
one way from a point on a well-traveled road nearest their home to
the nearest other public elementary school.
   (3) If topographical or other conditions exist in a school
district which   that  would impose unusual
hardships if the number of miles specified in paragraph (1) or (2)
were required to be traveled, or if during the fiscal year the roads
 which   that  would be traveled have been
impassable for more than an average of two weeks per year for the
preceding five years, the governing board of the school district may,
on or before April 1, request the Superintendent, in writing, for an
exemption from these requirements or for a reduction in the miles
required. The request shall be accompanied by a statement of the
conditions upon which the request is based, giving the information in
a form required by the Superintendent. The Superintendent shall
cause an investigation to be made, and shall either grant the request
to the extent he or she deems necessary, or deny the request.
   (b) For purposes of this section, "other public elementary school"
is a public school, including a charter school, that serves
kindergarten or any of grades 1 to 8, inclusive,  exclusive
of   excluding  grades 7 and 8 of a junior high
school.
   SEC. 85.    Section 42284 of the   Education
Code   is amended to read: 
   42284.  (a) For each school district with fewer than 2,501 units
of average daily attendance, on account of each necessary small high
school, the Superintendent shall make one of the following
computations selected with regard only to the number of certificated
employees employed or average daily attendance, whichever provides
the lesser amount:
                             Minimum
                             number         Amount
Average                       of             to
daily                    certificated        be
attendance                 employees      computed
     1-19 ............     less than 3     $42,980
                                             per
                                           teacher
     1-19 ............          3          191,340
    20-38 ............          4          234,320
    39-57 ............          5          277,300
    58-71 ............          6          320,280
    72-86 ............          7          363,260
   87-100 ............          8          406,240
  101-114 ............          9          449,220
  115-129 ............         10          492,200
  130-143 ............         11          535,180
  144-171 ............         12          578,160
  172-210 ............         13          621,140
  211-248 ............         14          664,120
  249-286 ............         15          707,100


   (b) For purposes of this section, a "certificated employee" means
an equivalent full-time position of an individual holding a
credential authorizing service and providing service in  any of
 grades 9 to 12, inclusive, in any secondary school. Any
fraction of an equivalent full-time position remaining after all
equivalent full-time positions for certificated employees within the
school district have been calculated shall be deemed to be a
full-time position.
   (c) A school district that  qualifies under this section
  continues to satisfy the criteria specified in Section
42285  may use the funding calculation as provided in this
section until the local control funding formula  allocation
  grade span adjusted base grant calculated 
pursuant to  Section 42238.02, as implemented by Section
42238.03, per unit   of   average
daily attendance multiplied by the average daily attendance 
 subdivision (d) of Section 42238.02  produces state aid
equal to the funding provided under this section.
   SEC. 86.    Section 42285 of the   Education
Code   is amended to read: 
   42285.  (a) For purposes of Section 42284, a necessary small high
school is a high school with an average daily attendance of less than
287 pupils that comes within any of the following conditions:
   (1) The projection of its future enrollment on the basis of the
enrollment of the elementary schools in the school district shows
that within eight years the enrollment in high school in grades 9 to
12, inclusive, will exceed 286 pupils.
   (2) Any one of the following combinations of distance and units of
average daily attendance applies:
   (A) The high school had an average daily attendance of less than
96 pupils in grades 9 to 12, inclusive, during the preceding fiscal
year and is more than 15 miles by well-traveled road from the nearest
other public high school and either 90 percent of the pupils would
be required to travel 20 miles or 25 percent of the pupils would be
required to travel 30 miles one way from a point on a well-traveled
road nearest their homes to the nearest other public high school.
   (B) The high school had an average daily attendance of 96 pupils
or more and less than 144 pupils in grades 9 to 12, inclusive, during
the preceding fiscal year and is more than 10 miles by well-traveled
road from the nearest other public high school and either 90 percent
of the pupils would be required to travel 18 miles or 25 percent of
the pupils would be required to travel 25 miles one way from a point
on a well-traveled road nearest their homes to the nearest other
public high school.
                                                     (C) The high
school had an average daily attendance of 144 pupils or more and less
than 192 pupils in grades 9 to 12, inclusive, during the preceding
fiscal year and is more than 71/2 miles by well-traveled road from
the nearest other public high school and either 90 percent of the
pupils would be required to travel 15 miles or 25 percent of the
pupils would be required to travel 20 miles one way from a point on a
well-traveled road nearest their homes to the nearest other public
high school.
   (D) The high school had an average daily attendance of 192 pupils
or more and less than 287 pupils in grades 9 to 12, inclusive, during
the preceding fiscal year and is more than 5 miles by well-traveled
road from the nearest other public high school and either 90 percent
of the pupils would be required to travel 10 miles or 25 percent of
the pupils would be required to travel 15 miles to the nearest other
public high school.
   (3) Topographical or other conditions exist in the school district
which would impose unusual hardships on the pupils if the number of
miles specified in paragraph (2) were required to be traveled. In
these cases, the Superintendent may, when requested, and after
investigation, grant exceptions from the distance requirements.
   (4) The Superintendent has approved the recommendation of a county
committee on school district organization designating one of two or
more schools as necessary isolated schools in a situation where the
schools are operated by two or more school districts and the average
daily attendance of each of the schools is less than 287 pupils in
grades 9 to 12, inclusive.
   (b) For purposes of Section 42284, a necessary small high school
also includes any of the following:
   (1) A high school maintained by a school district for the
exclusive purpose of educating juvenile hall pupils or pupils with
exceptional needs.
   (2) A high school maintained by a county office of education for
the exclusive purpose of educating foster youth if the high school
provided instruction in the 2012-13 fiscal year and the high school
is the only one maintained by the county office of education that
exclusively educates foster youth. Notwithstanding Section 42286,
this paragraph shall become inoperative on July 1, 2017.
   (3) A high school maintained by a unified school district as the
only comprehensive high school if the high school has an average
daily attendance of less than  286   287 
pupils and the school district has 50 or fewer pupils per square mile
of school district territory, as measured by the number of pupils
residing in the school district. Notwithstanding Section 42286, this
paragraph shall become inoperative on July 1, 2017.
   (c) For purposes of Section 42284, a necessary small high school
does not include a continuation school.
   (d) For purposes of this section, "other public high school" is a
public school, including a charter school, that serves any of grades
9 to 12, inclusive.
   SEC. 87.    Section 42286 of the   Education
Code   is amended to read: 
   42286.  (a)  Except as required under subdivision (b), if
  If  a high school is determined to be a necessary
small high school  under   pursuant to 
Section 42285, that status shall not be changed except as a review of
the determinative factors made every two years following the date of
the determination indicates that the determination should be
changed. 
   (b) If a high school is determined to be a necessary small high
school under paragraph (3) of subdivision (b) of Section 42285, that
status shall not be changed except as a review of the determinative
factors made every two years following the date of the determination
indicates that the determination should be changed. 

   (c) 
    (b)  A high school that has not been determined to be a
necessary small high school under Section 42285, may be determined to
be a necessary small high school at the beginning of a fiscal year
if it meets the criteria specified in Section 42285.
   SEC. 88.    Section 42287 of the   Education
Code   is amended to read: 
   42287.  (a) For the 1984-85 fiscal year to the 2012-13 fiscal
year, inclusive, the Superintendent shall increase the funding
amounts specified in Sections  42281, 42282,  
42282  and 42284 by an amount proportionate to the increase
applied to the statewide average revenue limit for unified school
districts for the then current fiscal year.
   (b) Commencing with the 2013-14 fiscal year, the Superintendent
shall increase the funding amounts specified in Sections 
42281, 42282,   42282  and 42284, as previously
increased pursuant to subdivision (a) and Sections 42289 to 42289.5,
inclusive, by the percentage calculated pursuant to paragraph (2) of
subdivision (d) of Section 42238.02, subject to the criteria
specified in paragraph (5) of subdivision (b) of Section 42238.03,
for the then current fiscal year.
   SEC. 89.    Article 4.5 (commencing with Section
42290) of Chapter 7 of Part 24 of Division 3 of Title 2 of the 
 Education Code   is repealed. 
   SEC. 90.    Section 42303 of the   Education
Code   is repealed.  
   42303.  Notwithstanding the provisions of this article, Article
4.5 (commencing with Section 42290), Part 10.7 (commencing with
Section 17910), or any other law, a school district that receives
funding for the replacement of a schoolbus may sell that schoolbus to
another school district in this state if all of the following
conditions are satisfied:
   (a) The purchasing school district is replacing a schoolbus that
is in service at the time of the sale and has not been designated a
temporary schoolbus pursuant to subdivision (a) of Section 42291.5.
   (b) The schoolbus being replaced by the purchasing school district
is older than the schoolbus that is the subject of the sale.
   (c) The schoolbus being replaced is not sold to another school
district.
   (d) The purchasing school district by a resolution from its
governing board, holds the state and the selling school district
harmless for any liability that may result from the schoolbus that is
the subject of the sale.
   (e) The proceeds from the sale of a schoolbus shall be used by the
selling district for home-to-school transportation purposes.
   (f) After the districts agree to the sale, but prior to the sale
being finalized, the schoolbus being sold must be in compliance with
all relevant provisions of the Vehicle Code and Title 13 of the
California Code of Regulations. 
   SEC. 91.    Section 42604 of the  Education
Code   is repea   led.  
   42604.  Notwithstanding any other provisions of law, the
computation of reimbursement for the costs of attendance specified in
contractual agreements through which educational services are
provided by other than the district or county in which a pupil
resides shall be based on the revenue per average daily attendance
received by the school district or county in which the pupil resides
rather than the computed revenue limit or foundation program per
average daily attendance of the district or county of residence.

   SEC. 92.    Section 45037 of the   Education
Code   is amended to read: 
   45037.  (a) Except as provided in Section 45036, for the fiscal
year 2001-02 and for any fiscal year thereafter in which a person
renders service as a teacher in kindergarten or any of grades 1 to
12, inclusive, who does not have a valid certification document, the
school district or county office of education in which the person is
employed shall be assessed a penalty that shall be  in lieu
of any loss of funding that would otherwise result under Chapter 6.10
(commencing with Section 52120) of Part 28. The penalty shall be
 calculated as provided in subdivision (b) and withheld from
state funding otherwise due to the district or county office of
education.
   (1) Notwithstanding Section 46300, the attendance of the
noncertificated person's pupils during the period of service shall be
included in the computation of average daily attendance.
   (2) The noncertificated person's period of service shall not be
excluded from the determination of eligibility for  incentive
funding for a longer instructional day or year, or both, 
 instruction time  pursuant to Article 8 (commencing with
Section 46200) of Chapter 2 of Part 26.
   (b) (1) For each person who rendered service in the employment of
the district or county office of education as a teacher in
kindergarten or any of grades 1 to 12, inclusive, during the fiscal
year, add the total number of schooldays on which the person rendered
any amount of the service.
   (2) For each person who rendered service in the employment of the
district or county office of education as a teacher in kindergarten
or any of grades 1 to 12, inclusive, during the fiscal year, for a
period of service during which the person did not have a valid
certification document, add the number of schooldays on which the
person rendered any amount of the service without a valid
certification document.
   (3) Divide the number determined in paragraph (2) by the number
determined in paragraph (1) and carry the result to four decimal
places.
   (4) Multiply a school district's  revenue limit
entitlement   local control funding formula grant
apportionment  for the fiscal year, calculated pursuant to
Section  42238, or it's funding amount calculated pursuant to
Article 4 (commencing with   Section 
 42280) of Chapter 7 of Part 24, as applicable, or a county
office of education's funding   42238.02, as implemented
by Section 42238.03, or a county office of education's local control
funding formula alternative education grant computed pursuant to
Section 2574, as apportioned pursuant t   o Section 2575,
 for the fiscal year, for the program in which the
noncertificated person rendered service by the number determined in
paragraph (3).
   (c) Beginning in  2002-03,   2002-03, 
if a county office of education releases a warrant in favor of a
person for whom a period of school district service is included in
the calculation set forth in paragraph (2) of subdivision (b), and
the warrant is either compensation for employment as a teacher or for
employment in some other capacity if the county office of education
has direct knowledge or is in possession of information giving rise
to a reasonable inference that the person is rendering service as a
teacher, the county office shall be assessed a penalty. The penalty
assessed to a county office for any fiscal year in which one or more
district teachers did not have a valid certification document shall
be equal to the lesser of three amounts as follows:
   (1) Fifty percent of all penalties assessed for that fiscal year
to all school districts in the county office's jurisdiction pursuant
to subdivision (b).
   (2) One-half percent of the total expenditures for that fiscal
year from unrestricted resources, as defined in the California School
Accounting Manual, in the county office's county school service
fund, when two or fewer districts in the county office's jurisdiction
are subject to penalties pursuant to subdivision (b).
   (3) One percent of the total expenditures for that fiscal year
from unrestricted resources, as defined in the California School
Accounting Manual, in the county office's county school service fund,
when three or more districts in the county office's jurisdiction are
subject to penalties pursuant to subdivision (b).
   (d) Except as provided in Section 41344.1, nothing in this section
may be waived in whole or in part.
   SEC. 93.    Section 46201.1 of the  
Education Code  is repealed.  
   46201.1.  (a) Notwithstanding paragraph (4) of subdivision (b) of
Section 42238, for each school district that received an
apportionment pursuant to subdivision (a) of Section 46201 in the
1985-86 fiscal year, the county superintendent shall, for the 1986-87
fiscal year, add to the district's base revenue limit per unit of
average daily attendance the amount received in the 1985-86 fiscal
year, pursuant to subdivision (a) of Section 46201 divided by the sum
of paragraphs (1) and (2).
   (1) The district's average daily attendance for the 1985-86 fiscal
year computed pursuant to Section 42238.5.
   (2) The units of average daily attendance in the 1985-86 fiscal
year resulting from pupils attending schools funded pursuant to
Article 4 (commencing with Section 42280).
   (b) Notwithstanding paragraph (4) of subdivision (b) of Section
42238, for each school district that received an apportionment
pursuant to subdivision (a) of Section 46201 in the 1984-85 fiscal
year, the county superintendent shall, for calculations or
recalculations of the district's 1985-86 base revenue limit per unit
of average daily attendance, add to the district's base revenue limit
per unit of average daily attendance the amount received in the
1984-85 fiscal year pursuant to subdivision (a) of Section 46201
divided by the sum of paragraphs (1) and (2).
   (1) The district's average daily attendance for the 1984-85 fiscal
year computed pursuant to Section 42238.5.
   (2) The units of average daily attendance in the 1984-85 fiscal
year resulting from pupils attending schools funded pursuant to
Article 4 (commencing with Section 42280).
   (c) Notwithstanding paragraph (3) of subdivision (b) of Section
42238, for each school district that received an apportionment
pursuant to subdivision (a) of Section 46200 in the 1984-85 fiscal
year, the county superintendent shall, for calculations or
recalculations of the district's 1985-86 base revenue limit per unit
of average daily attendance, add to the district's base revenue limit
per unit of average daily attendance the amount received in the
1984-85 fiscal year divided by the sum of paragraphs (1) and (2).
   (1) The district's average daily attendance for the 1984-85 fiscal
year computed pursuant to Section 42238.5.
   (2) The units of average daily attendance for the 1984-85 fiscal
year resulting from pupils attending schools funded pursuant to
Article 4 (commencing with Section 42280).
   (d) Notwithstanding subdivision (b) of Section 46200, for any
school district that received an apportionment pursuant to
subdivision (a) of Section 46200 that offers less than 180 days of
instruction in the 1986-87 fiscal year, the Superintendent of Public
Instruction shall reduce the base revenue limit per unit of average
daily attendance for the 1986-87 fiscal year by an amount
attributable to the increase received pursuant to subdivision (a) of
Section 46200, as adjusted. 
   SEC. 94.    Section 46602 of the   Education
Code   is amended to read: 
   46602.   (a)    If the county board of education
determines that the pupil should be permitted to attend in the 
school  district in which he or she desires to attend, the pupil
shall be admitted to school in the  school  district
without delay and the attendance may be counted by the  school
 district of attendance for  revenue limit and 
state apportionment purposes. 
    Written 
    (b)     Written  notice of the
decision by the county board of education shall be delivered to the
pupil and the parent or guardian, or person having custody of him or
her, and to the governing boards of the  school  districts.
   SEC. 95.    Section 46603 of the   Education
Code   is amended to read: 
   46603.   (a)    For a period not to exceed two
school months, the governing board of a school district may
provisionally admit to the schools of the  school  district
a pupil who resides in another  school  district, pending a
decision of the two  boards,  governing boards
of the school districts,  or by the county board of education
upon appeal, regarding the interdistrict attendance. 
    Regardless 
    (b)     Regardless  of whether the
decision on interdistrict attendance is allowed, the provisional
attendance may be counted by the  school  district of
attendance for  revenue limit and  state
apportionment purposes.
   SEC. 96.   Section 47630 of the   Education
Code   is amended to read: 
   47630.   (a)    It is the intent
of the Legislature that each charter school be provided with
operational funding that is equal to the total funding that would be
available to a similar school district serving a similar pupil
population, except that a charter school may not be funded as a
necessary small school or a necessary small high  school, nor
receive revenue limit funding that exceeds the statewide average for
a school district of a similar type.   school. 

   (b) The Legislature finds and declares that the funding method
established by this chapter provides for simple and, at the option of
the charter school, local or direct allocation of funds to charter
schools in a manner that is consistent with state and federal law.

   SEC. 97.    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) 
    (b)  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.
   SEC. 98.    Section 47635 of the   Education
Code   is amended to read: 
   47635.  (a) A sponsoring local educational agency shall annually
transfer to each of its charter schools funding in lieu of property
taxes equal to the lesser of the following two amounts:
   (1) The average amount of property taxes per unit of average daily
attendance, including average daily attendance attributable to
charter schools, received by the local educational agency, multiplied
by the charter school's average daily attendance.
   (2) The local control funding formula grant funding computed
pursuant to subdivision (d) of Section 42238.02, per unit of average
daily attendance, multiplied by the charter school's average daily
attendance in each of the four corresponding 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.
   (3) Notwithstanding paragraph (2), until the Superintendent
determines that a charter school is funded pursuant to Section
42238.02 in the prior fiscal year, the Superintendent shall apportion
funding per unit of average daily attendance pursuant to this
article. The base grant for purposes of paragraph (2) shall be the
 lesser of the amount calculated pursuant to paragraph (2) or the
 sum of the entitlements for the charter school in the
specified fiscal year as computed pursuant to paragraphs (1) to (4),
inclusive, of subdivision  (a) of Section 42238.03 
 (a),  and paragraph (3) of subdivision  (b)
  (b),  of Section 42238.03, multiplied by the
ratio of local control funding formula base grant funding computed
pursuant to subdivision (d) of Section 42238.02 to the local control
funding formula amount for the fiscal year computed pursuant to
Section 42238.02.
   (4) If the sum of the funding transferred pursuant to this
subdivision and the funding calculated pursuant to subdivision (e) of
Section 42238.03 exceeds the sum of the amounts calculated pursuant
to subdivisions (a) and (b) of Section 42238.03, the excess funding
shall be used to offset funding calculated pursuant to subdivision
(e) of Section 42238.03.
   (b) The sponsoring local educational agency shall transfer funding
in lieu of property taxes to the charter school in monthly
installments, by no later than the 15th of each month.
   (1) For the months of August to February, inclusive, a charter
school's funding in lieu of property taxes shall be computed based on
the amount of property taxes received by the sponsoring local
educational agency during the preceding fiscal year, as reported to
the Superintendent for purposes of the second principal
apportionment. A sponsoring local educational agency shall transfer
to the charter school the charter school's estimated annual
entitlement to funding in lieu of property taxes as follows:
   (A) Six percent in August.
   (B) Twelve percent in September.
   (C) Eight percent each month in October, November, December,
January, and February.
   (2) For the months of March to June, inclusive, a charter school's
funding in lieu of property taxes shall be computed based on the
amount of property taxes estimated to be received by the sponsoring
local educational agency during the fiscal year, as reported to the
Superintendent for purposes of the first principal apportionment. A
sponsoring local educational agency shall transfer to each of its
charter schools an amount equal to one-sixth of the difference
between the school's estimated annual entitlement to funding in lieu
of property taxes and the amounts provided pursuant to paragraph (1).
An additional one-sixth of this difference shall be included in the
amount transferred in the month of March.
   (3) For the month of July, a charter school's funding in lieu of
property taxes shall be computed based on the amount of property
taxes estimated to be received by the sponsoring local educational
agency during the prior fiscal year, as reported to the
Superintendent for purposes of the second principal apportionment. A
sponsoring local educational agency shall transfer to each of its
charter schools an amount equal to the remaining difference between
the school's estimated annual entitlement to funding in lieu of
property taxes and the amounts provided pursuant to paragraphs (1)
and (2).
   (4) Final adjustments to the amount of funding in lieu of property
taxes allocated to a charter school shall be made in February, in
conjunction with the final reconciliation of annual apportionments to
schools.
   (5) Subdivision (a) and paragraphs (1) to (4), inclusive, do not
apply for pupils who reside in, and are otherwise eligible to attend
a school in, a basic aid school district, but who attend a charter
school in a nonbasic aid school district. With regard to these
pupils, the sponsoring basic aid school district shall transfer to
the charter school an amount of funds equivalent to the local control
funding formula grant pursuant to Section 42238.02, as implemented
by Section 42238.03, earned through average daily attendance by the
charter school for each pupil's attendance, not to exceed the average
property tax share per unit of average daily attendance for pupils
residing and attending in the basic aid school district. The transfer
of funds shall be made in not fewer than two installments at the
request of the charter school, the first occurring not later than
February 1 and the second not later than June 1 of each school year.
Payments shall reflect the average daily attendance certified for the
time periods of the first and second principal apportionments,
respectively. The Superintendent may not apportion any funds for the
attendance of pupils described in this subdivision unless the amount
transferred by the basic aid  school  district is less than
the local control funding formula grant pursuant to Section 42238.02,
as implemented by Section 42238.03, earned by the charter school, in
which event the Superintendent shall apportion the difference to the
charter school from state funds.
   (c) Notwithstanding subdivisions (a) and (b), for a pupil
attending a county charter program school authorized pursuant to
Section 47605.6 for whom the county office of education is not
educationally responsible, the county charter program school may seek
in-lieu property tax reimbursement from the pupil's school district
of residence in an amount agreed upon by the county charter program
school and the school district of residence.
   SEC. 99.    Section 47663 of the   Education
Code   is amended to read: 
   47663.  (a) (1) For a pupil of a charter school sponsored by a
basic aid school district who resides in, and is otherwise eligible
to attend, a school district other than a basic aid school district,
the Superintendent shall apportion to the sponsoring school district
an amount equal to 70 percent of the local control funding formula
base grant computed pursuant to subdivision (d) of Section 42238.02,
per unit of average daily attendance that would have been apportioned
to the school district that the pupil resides in, and would
otherwise have been eligible to attend.
   (2) Notwithstanding paragraph (1), until the Superintendent
determines that the school district the pupil resides in, and would
otherwise have been eligible to attend, is funded pursuant to Section
42238.02 in the prior fiscal year, the Superintendent shall
apportion, for average daily attendance pursuant to this article,
 the lesser of the amount calculated pursuant to paragraph (1) or
 70 percent of the sum of the entitlements for the school
district that the pupil resides in, and would otherwise have been
eligible to attend, for the specified fiscal year as computed
pursuant to paragraphs (1) to (4), inclusive, of subdivision 
(a)                                            of Section 42238.03
  (a),  and paragraph (3) of subdivision 
(b)   (b), of Section 42238.03, divided by the
average daily attendance for that fiscal year and then multiplied by
the ratio of local control funding formula base grant funding
computed pursuant to subdivision (d) of Section 42238.02 to the local
control funding formula amount for the fiscal year computed pursuant
to Section 42238.02.
   (3) If the entitlements for the school district the pupil resides
in, and would otherwise have been eligible to attend, as computed
pursuant to paragraphs (1) to (4), inclusive, of subdivision (a), and
paragraph (3) of subdivision (b), of Section 42238.03, include
funding calculated pursuant to Article 4 (commencing with Section
42280) of Chapter 7 of Part 24 of Division 3 for a fiscal year,
paragraph (2) shall not apply and the apportionment of state funds
for the average daily attendance credited pursuant to this section
for that fiscal year shall be calculated pursuant to paragraph (1).
   (b) A school district that loses basic aid status as a result of
transferring property taxes to a charter school or schools pursuant
to Section 47635 for pupils who reside in, and are otherwise eligible
to attend, a school district other than the school district that
sponsors the charter school, shall be eligible to receive a pro rata
share of funding provided by subdivision (a), with the proration
factor calculated as the ratio of the following:
   (1) The amount of property taxes that the school district receives
in excess of its total base grant per unit of average daily
attendance calculated pursuant to Section 42238.02, as implemented by
Section 42238.03, before any transfers made pursuant to Section
47635, except for transfers in lieu of property taxes made for pupils
who reside in, and would otherwise be eligible to attend, a school
of the school district.
   (2) The total amount in lieu of property taxes transferred
pursuant to Section 47635 to the charter school or schools that it
sponsors, except for transfers in lieu of property taxes made for
pupils who reside in, and would otherwise be eligible to attend, a
school of the school district.
   (c) In no event shall the amount provided pursuant to this section
exceed the amount in lieu of property taxes transferred on behalf of
charter school pupils who do not reside in the school district, less
the proportionate amount of base grant state aid provided pursuant
to Section 42238.02, as implemented by Section 42238.03, that is
attributable to the charter school pupils who do not reside in the
school district.
   (d) The Superintendent shall not apportion funds for the
attendance of a pupil in a charter school of a nonbasic aid school
district who resides in, and is otherwise eligible to attend school
in, a basic aid school district unless the pupil is subject to the
exceptions set forth in paragraph (5) of subdivision (b), and
subdivision (c), of Section 47635.
   (e) For purposes of this section, "basic aid school district"
means a school district that does not receive from the state, for any
fiscal year in which the subdivision is applied, an apportionment of
state funds as described in subdivision (o) of Section 42238.02.
   SEC. 100.    Section 48310 of the  
Education Code   is amended to read: 
   48310.  (a) The average daily attendance for pupils admitted by a
school district of choice pursuant to this article shall be credited
to that school district pursuant to Section 46607. The attendance
report for the school district of choice may include an
identification of the school district of residence.
   (b) Notwithstanding any other law, state aid for categorical
education programs for pupils admitted under this article shall be
apportioned to the school district of choice.
   (c) (1) For a school district of choice that is a basic aid school
district, the apportionment of state funds for average daily
attendance credited pursuant to this section shall be 70 percent of
the school district local control funding formula base grant computed
pursuant to subdivision (d) of Section 42238.02, as implemented by
Section 42238.03, that would have been apportioned to the school
district of residence.
   (2) Notwithstanding paragraph (1), until the Superintendent
determines that the school district of residence is funded pursuant
to Section 42238.02 in the prior fiscal year, the Superintendent
shall apportion, for average daily attendance pursuant to this
article,  the lesser of the amount calculated pursuant to
paragraph (1) or  70 percent of the sum of the entitlements for
the school district of residence for the specified fiscal year as
computed pursuant to paragraphs (1) to (4), inclusive, of subdivision
 (a) of Section 42238.03   (a),  and
paragraph (3) of subdivision  (b)   (b), 
of Section 42238.03, divided by the average daily attendance pursuant
to this article for that fiscal year and then multiplied by the
ratio of local control funding formula base grant funding computed
pursuant to subdivision (d) of Section 42238.02 to the local control
funding formula amount for the fiscal year computed pursuant to
Section 42238.02.
   (3) If the entitlements for the school district of residence
computed pursuant to paragraphs (1) to (4), inclusive, of subdivision
(a), and paragraph (3) of subdivision (b), of Section 42238.03,
include funding calculated pursuant to Article 4 (commencing with
Section 42280) of Chapter 7 of Part 24 of Division 3 for a fiscal
year, paragraph (2) shall not apply and the apportionment of state
funds for the average daily attendance credited pursuant to this
section for that fiscal year shall be calculated pursuant to
paragraph (1).
   (4) For purposes of this subdivision, the term "basic aid school
district" means a school district that does not receive from the
state, for a fiscal year in which this subdivision is applied, an
apportionment of state funds as described in subdivision (o) of
Section 42238.02.
   (d) The average daily attendance of pupils admitted by a school
district of choice pursuant to this article shall be credited to that
school district for purposes of any determination under Article 2
(commencing with Section 17010) of Chapter 12 of Part 10 of Division
1 of Title 1 that uses an average daily attendance calculation.
   SEC. 101.    Section 48359.5 of the  
Education Code   is amended to read: 
   48359.5.  (a) For a school district of enrollment that is a basic
aid school district, the apportionment of state funds for average
daily attendance credited pursuant to this article shall be 70
percent of the school district local control funding formula base
grant that would have been apportioned to the school district of
residence pursuant to subdivision (d) of Section 42238.02.
Apportionment of these funds shall begin in the second consecutive
year of enrollment, and continue annually until the pupil graduates
from, or is no longer enrolled in, the school district of enrollment.

   (b) Notwithstanding subdivision (a), until the Superintendent
determines that the school district of residence is funded pursuant
to Section 42238.02 in the prior fiscal year, the Superintendent
shall apportion, for average daily attendance pursuant to this
article,  the lesser of the amount calculated pursuant to
subdivision (a) or  70 percent of the sum of the entitlements
for the school district of residence for the specified fiscal year as
computed pursuant to paragraphs (1) to (4), inclusive, of
subdivision  (a) of Section 42238.03   (a),
 and paragraph (3) of subdivision  (b)  
(b),  of Section 42238.03, divided by the average daily
attendance pursuant to this article for that fiscal year and then
multiplied by the ratio of local control funding formula base grant
funding computed pursuant to subdivision (d) of Section 42238.02 to
the local control funding formula amount for the fiscal year computed
pursuant to Section 42238.02.
   (c) If the entitlements for the school district of residence
computed pursuant to paragraphs (1) to (4), inclusive, of subdivision
(a), and paragraph (3) of subdivision (b), of Section 42238.03,
include funding calculated pursuant to Article 4 (commencing with
Section 42280) of Chapter 7 of Part 24 of Division 3 for a fiscal
year, subdivision (b) shall not apply and the apportionment of state
funds for the average daily attendance credited pursuant to this
section for that fiscal year shall be calculated pursuant to
subdivision (a).
   (d) For purposes of this section, "basic aid school district"
means a school district that does not receive an apportionment of
state funds as described in subdivision (o) of Section 42238.02 for a
fiscal year in which this section may apply.
   SEC. 102.    Section 52315 of the  
Education Code   is amended to read: 
   52315.  (a)  Any   A  visually impaired,
orthopedically impaired, or deaf person who is not enrolled in a
regular high school or community college program may attend a
regional occupational center or regional occupational program
pursuant to the requirements described in Section 52314.5. Additional
special instruction and support services shall be provided to these
persons.
   (b) If the Superintendent determines that there would be a
duplication of effort to these impaired persons if a regional
occupational center or regional occupational program provided
services to them, in that other programs exist that are available to
them, the Superintendent may disapprove of the curriculum to provide
programs to these impaired persons pursuant to Section  52309
and of any state funding made available pursuant to Section 41897
for these purposes.   52309. 
   SEC. 103.    Section 52319 of the  
Education Code   is amended to read: 
   52319.   (a)    Whenever the establishment and
maintenance of a regional occupational center by two or more school
districts has been undertaken pursuant to an agreement entered into
in accordance with the provisions of Article 1 (commencing with
Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government
Code, and the terms of the agreement so authorize, provision may be
made for the issuance of bonds for construction and other capital
expenditure for the regional occupational center. An election shall
be called, held, and conducted in the manner provided in Chapter 3
(commencing with Section 5300) of Part 4 of Division 1 of Title 1 on
the question of the approval of the issuance of such bonds. If, at
the election, the requisite number of voters cast their ballots in
favor of the issuance of bonds, the bonds shall be issued and sold in
the manner provided by law for the issuance and sale of bonds of a
high school district. The issuance and sale of such bonds shall be
deemed to be an act of the governing board of a high school district.

   The 
    (b)    The  total amount of bonds
issued shall not exceed one-half of 1 percent of the taxable property
of the area served by the regional occupational center as shown by
the last equalized assessment roll of the county or counties 
which   the center   serves, and
as modified pursuant to Section 41201.   that the center
serves.  
   Bonds 
    (c)     Bonds  issued and sold
pursuant to this section shall be retired from proceeds of the tax
under the provisions of Section 52317.
   SEC. 104.    Section 52324 of the  
Education Code   is repealed.  
   52324.  Units of average daily attendance in the regional
occupational centers or regional occupational programs of a county
for a fiscal year are the quotient arising from dividing the total
number of days of pupil's attendance in the centers, or programs,
during the fiscal year by 175.
   Attendance in regional occupational centers, or regional
occupational programs, operated under subdivision (a) of Section
52305 shall be considered pupil's attendance under this section, but
attendance in regional occupational centers, or regional occupational
programs, under subdivision (b) of Section 52305 shall not be so
considered.
   As used in this section, "school district" includes each of those
districts which are cooperating in the maintenance of the center or
program, with the approval of the county superintendent of schools,
pursuant to Section 52301; and units of average daily attendance of
pupils residing in the school district shall be credited to the
school district. 
   SEC. 105.    Section 52324.5 of the  
Education Code   is repealed.  
   52324.5.  For the purpose of crediting attendance for
apportionments from Section A of the State School Fund during the
fiscal year, any person who is concurrently enrolled in a nonpublic
high school and in a regional occupational center or program operated
under subdivision (a) of Section 52305 and maintained by a district
or districts shall be classified as a regular student enrolled in a
regular high school program, notwithstanding Section 52610.
   For the purposes of this section, a nonpublic high school is a
school which satisfies the requirements of Section 48222 if such
school is exempt from taxation under Section 214 of the Revenue and
Taxation Code, and if instruction in such school is given through
grade 12. 
   SEC. 106.    Section 52327 of the  
Education Code   is amended to read: 
   52327.   (a)    The governing board of 
any   a school  district maintaining a regional
occupational center may establish a bookstore on  school 
district property for the purpose of offering for sale textbooks,
workbooks, supplementary textbooks and workbooks, school supplies,
stationery supplies, confectionary items, and related auxiliary
school supplies and services. 
   The 
    (b)     The  governing board  of
the school district  may establish a bookstore fund into which
the proceeds derived from the operation of a regional occupational
center bookstore may be transferred. Moneys in a bookstore fund shall
be deposited or invested in one or more of the following ways:

   (a) 
    (1)  Deposits in a bank or banks, or other institution,
whose accounts are federally insured. 
   (b) 
    (2)  Investment certificates or withdrawable shares in
state-chartered savings and loan associations and savings accounts of
federal savings and loan associations, provided the associations are
doing business in this state and have their accounts insured by the
Federal Savings and Loan Insurance Corporation. 
   (c) 
    (3)  Purchase of United States securities pursuant to
subdivision (a) of Section 16430 of the Government Code. 
    The 
    (c)     The  governing board  of
the school district  shall designate an employee or official of
the  school  district to act as trustee for funds derived
from the operation of a regional occupational center bookstore and to
receive those funds in accordance with procedures established by the
board. 
    All 
    (d)     All  necessary expenses,
including salaries, wages and costs of capital improvements may be
deducted from the revenue of a regional occupational center
bookstore. Net proceeds from the operation of a regional occupational
center bookstore shall be used for the general benefit of the
student body as determined by the governing  board. 
 board of the school district.  Income from a regional
occupational center bookstore shall not be included in the 
district revenue limit.   school district funding
allocation.  Funds derived from the operation of a regional
occupational center bookstore shall be subject to audit pursuant to
Section 41020.
   SEC. 107.    Section 52329 of the  
Education Code   is amended to read: 
   52329.   (a)     The governing board of
a school district located in a county, or the county superintendent
of schools maintaining a regional occupational program in a county,
any of the boundaries of which are contiguous to the State of
Arizona, may enter into an agreement with a public or private
educational agency located in  that state   the
State of Arizona  to provide to  students  
pupils  living in the  school  district and enrolled
in a regional occupational program, career technical or technical
training which, due to geographical isolation, is not otherwise
available to these  students.   pupils. 

   The 
    (b)     The  program of training at
the public or private educational agency shall  be approved
by the Superintendent of Public Instruction of California and shall
 conform to the California State Plan for Career Technical
Education. 
   The attendance of pupils receiving career technical or technical
training at a public or private educational agency as authorized by
this section shall be included in the computation of average daily
attendance as prescribed by Sections 52324 and 52325, and shall be
credited to the county school service fund of the county of
residence. In no event, however, shall the county school service fund
be credited with more than one unit of average daily attendance per
calendar year on account of a pupil participating in a program
authorized by this section. 
   SEC. 108.    Section 52334 of the  
Education Code   is amended to read: 
   52334.   (a)    Indirect costs charged to
regional occupational centers and programs may not exceed 
that of  the school district or county office of education,
as appropriate, prior year indirect cost rate as approved by the
 State Department of Education.   department.
 
   The 
    (b)     The  indirect costs charged by
county offices of education and school districts that provide
regional occupational centers and programs services on behalf of the
county office of education or joint powers authority, when added
together, may not exceed the indirect cost rate approved by the
 State Department of Education   department
 for the county office of education or the school district,
whichever is higher. 
   Revenue limit funds apportioned to a county office of education or
school district for regional occupational centers and programs must
be expended on programs and services offered by the regional
occupational centers and programs. 
   SEC. 109.    Section 52335 of the  
Education Code   is amended to read: 
   52335.   Commencing with the 1988-89 fiscal year, funds
for regional occupational centers and programs shall be apportioned
in accordance with this article. 
   For purposes of this article, "ROC/P" means regional occupational
center or program.
   SEC. 110.    Section 52335.1 of the  
Education Code   is repealed.  
   52335.1.  From funds appropriated in the annual Budget Act for
that purpose, the Superintendent of Public Instruction shall
apportion funds for ROC/Ps according to the following priorities:
   (a) Apportionments for necessary small ROC/Ps pursuant to Section
52324.6.
   (b) Apportionments for ROC/P revenue limits pursuant to Section
52335.2. 
   SEC. 111.    Section 52335.12 of the  
Education Code   is amended to read: 
   52335.12.  (a) As a condition of receiving  additional
funding based on average daily attendance,   state or
federal funds,  the regional occupational center or program
shall report annually to the department the academic and workforce
preparation progress of the secondary pupils enrolled in the center
or program. Indicators to measure that progress shall include, but
are not limited to, the  Standardized Testing and Reporting
(STAR) Program,   California Assessment of Student
Performance and Progress, established  pursuant to Article 4
(commencing with Section 60640) of Chapter 5 of Part 33; the high
school exit examination, pursuant to Chapter 9 (commencing with
60850) of Part 33; and other indicators of academic and workforce
preparation success, such as reduced dropout rates, workforce
preparation, increased matriculation into postsecondary educational
institutions, and other measures as determined by the department.
   (b) This section shall become effective only when the longitudinal
data on pupils enrolled in regional occupational centers and
programs can be disaggregated from the California longitudinal pupil
achievement data system  (CALPADs)  database,
established pursuant to Chapter 10 (commencing with Section 60900) of
Part 33. 
   (c) On or before October 1, 2007, the department shall submit to
the Department of Finance a detailed proposal for the implementation
of the outcome reports required in subdivision (a). The proposal
shall identify the specific data elements to be collected and the
costs associated with the data collection and preparation of the
report. The department shall consult with the Department of Finance
and the office of the Legislative Analyst during the development of
this proposal. 
   SEC. 112.    Section 52335.2 of the  
Education Code   is repealed.  
   52335.2.  The Superintendent of Public Instruction shall calculate
a revenue limit for each ROC/P in the following manner:
   (a) Calculate a base revenue limit per unit of average attendance
for the current fiscal year as follows:
   (1) Divide the revenue limit for the prior year computed pursuant
to this section by the annual units of average daily attendance
funded in the prior year pursuant to subdivisions (c) and (d).
   (2) Increase the amount computed in paragraph (1) by the
percentage inflation adjustment specified in the Budget Act for the
current fiscal year multiplied by the statewide average ROC/P revenue
limit per unit of average daily attendance for the prior fiscal
year.
   (b) Calculate a revenue limit per unit of average daily attendance
for program growth by increasing the revenue limit per unit of
average daily attendance for program growth computed pursuant to this
subdivision for the prior fiscal year by the percentage inflation
adjustment specified in the Budget Act for the current fiscal year.
   (c) Multiply the amount computed pursuant to subdivision (a) by
the lesser of the ROC/P's annual units of average daily attendance
for the current fiscal year or the ROC/P's annual units of funded
average daily attendance for the prior fiscal year.
   (d) Subtract the ROC/P's annual units of funded average daily
attendance for the prior fiscal year from the ROC/P's annual units of
average daily attendance for the current fiscal year and multiply
the difference by the amount computed pursuant to subdivision (b). If
the product computed pursuant to this subdivision is negative, it
shall be deemed to be zero.
   (e) Except as provided in Section 52335.3, the Superintendent of
Public Instruction shall apportion to the ROC/P the sum of the
amounts computed pursuant to subdivisions (c) and (d).
   (f) The average daily attendance used for purposes of this section
shall not include the average daily attendance in schools receiving
funding pursuant to Section 52324.6.
   (g) Any state funds made available as a result of local property
tax revenues deducted pursuant to Section 52335.3 shall be allocated
to each ROC/P in an equal amount per unit of funded average daily
attendance and shall not be included in the calculation of the base
revenue limit made pursuant to subdivision (a) for the subsequent
fiscal year.
   (h) Before making the calculations described in subdivisions (c)
and (d) to determine the amount to be apportioned to each ROC/P
pursuant to subdivision (e) for the 1998-99 fiscal year, average
daily attendance for the 1997-98 fiscal year shall be adjusted by a
factor equal to the number one minus the quotient of the number of
units of that ROC/P's 1996-97 average daily attendance for absences
excused pursuant to subdivision (b) of Section 46010, as that
subdivision read on July 1, 1996, divided by that ROC/P's total
1996-97 average daily attendance. 
   SEC. 113.    Section 52335.3 of the  
Education Code   is repealed.  
   52335.3.  The Superintendent of Public Instruction shall deduct
from the amount computed pursuant to subdivision (e) of Section
52335.2 for each ROC/P operated by a county office of education any
local revenue that would otherwise be deemed restricted and not
available for expenditure in the current fiscal year pursuant to
subdivision (e) of Section 2558. Any local revenue so deducted shall
be used by the county office for support of the ROC/P. 
   SEC. 114.    Section 52335.4 of the  
Education Code   is repealed.  
   52335.4.  The Superintendent of Public Instruction shall determine
each ROC/P's share of funded growth average daily attendance by
computing the sum of subdivisions (a), (b), and (c):
   (a) Subtract the ROC/P's annual units of funded average daily
attendance for the prior year from the ROC/P's annual units of funded
average daily attendance for the second prior year. If the amount
computed pursuant to this subdivision is negative, it shall be deemed
to be zero.
   (b) Allocate 25 percent of the allowable growth average daily
attendance funded in the Budget Act to low participation ROC/P's,
pursuant to criteria established by the Superintendent of Public
Instruction.
   (c) (1) Subtract the statewide sum of the growth average daily
attendance computed pursuant to subdivisions (a) and (b) from the
allowable growth in average daily attendance funded in the Budget
Act. If the amount computed is negative, it shall be deemed to be
zero.
   (2) (A) Calculate the ROC/P's pro rata share of the funded growth
average daily attendance calculated pursuant to paragraph (1), based
on the prior year average daily attendance in grades 9 to 12,
                                          inclusive, for the school
districts served by the ROC/P in relation to the total statewide
prior year average daily attendance in grades 9 to 12, inclusive. For
purposes of the calculation required by this paragraph, the
Superintendent of Public Instruction shall use the average daily
attendance reported for the second principal apportionment of the
prior year.
   (B) In calculating the pro rata share of funded growth average
daily attendance, the Superintendent of Public Instruction shall
ensure that each ROC/P is provided at least 10 units of allowed
growth average daily attendance pursuant to subdivisions (b) and (c).

   (d) (1) It is the intent of the Legislature that each ROC/P use
its share of funded growth average daily attendance provided pursuant
to this section to serve pupils in grades 9 to 12, inclusive, unless
the governing board or governing boards of the school district or
districts overseeing the ROC/P determine that the needs of pupils in
grades 9 to 12, inclusive, have been met.
   (2) It is the intent of the Legislature that, if a determination
is made pursuant to paragraph (1) that the needs of pupils in grades
9 to 12, inclusive, have been met, then the governing board or
governing boards of the school district or districts overseeing the
ROC/P may authorize the ROC/P to use its share of funded growth
average daily attendance provided pursuant to this section to serve
adults. 
   SEC. 115.    Section 52335.5 of the  
Education Code   is repealed.  
   52335.5.  In the event that the funds appropriated for purposes of
this article are insufficient to fully fund the apportionments
herein authorized, the Superintendent of Public Instruction shall
reduce the amounts computed pursuant to Section 52335.2 for each
ROC/P based on equal amounts per unit of average daily attendance,
consistent with the following priorities:
   (a) First priority shall be given to fully funding average daily
attendance that is less than or equal to the average daily attendance
funded in the prior fiscal year.
   (b) Second priority shall be given to fully funding each ROC/P's
share of funded growth average daily attendance determined pursuant
to Section 52335.4.
   (c) Third priority shall be given to funding current year annual
average daily attendance that exceeds the sum of the average daily
attendance specified in subdivisions (a) and (b). 
   SEC. 116.    Section 52335.6 of the  
Education Code   is repealed.  
   52335.6.  For purposes of allocating allowable growth average
daily attendance to low participation ROC/Ps, the Superintendent of
Public Instruction shall:
   (a) Calculate for each ROC/P the prior year average daily
attendance in grades 9 to 12, inclusive, for the school districts
served by the ROC/P.
   (b) Divide the funded average daily attendance of the ROC/P for
the prior year by the amount calculated in subdivision (a).
   (c) Divide the statewide funded ROC/P average daily attendance for
the prior year by the prior year statewide average daily attendance
in grades 9 to 12, inclusive.
   (d) For each ROC/P where the amount calculated in subdivision (b)
is less than the amount calculated in subdivision (c), calculate the
ROC/P's pro rata share of allowable growth daily attendance for low
participation ROC/Ps, based on the average daily attendance needed by
the ROC/P to be at the percentage of participation calculated in
subdivision (c) in relation to the total of average daily attendance
needed by low participation ROC/Ps for each ROC/P to be at the
percentage of participation calculated in subdivision (c). 
   SEC. 117.    The heading of Article 7 (commencing
with Section 60117) of Chapter 1 of Part 33 of Division 4 of Title 2
of the  Education Code   is amended to read: 

      Article 7.   Pupil Textbook and   Public
Hearings,  Instructional Materials  Incentive Program



   SE  C. 118.    Section 60117 of the 
 Education Code   is repealed.  
   60117.  This article shall be known and may be cited as the Pupil
Textbook and Instructional Materials Incentive Program Act. 

   SEC. 119.   Section 63001 of the   Education
Code   is amended to read: 
   63001.   Each   A  school district that,
in  any   a  fiscal year, receives
 any   an  apportionment for  any
  a  program specified in Section 63000 shall
 utilize   use  no less than 85 percent of
that apportionment at schoolsites for direct services to pupils.
 To the extent a school district chooses to transfer,
pursuant to Section 41500, up to 15 percent of School and Library
Improvement Block Grant funds, apportioned pursuant to Article 7
(commencing with Section 45170) of Chapter 3.2 of Part 24, a school
district shall utilize no less than 85 percent of the amount
remaining after the transfer for direct services to pupils. 

   SEC. 120.    (a) The sum of five billion nine hundred
ninety-four million four hundred seventeen thousand dollars
($5,994,417,000) is hereby appropriated from the General Fund to the
Superintendent of Public Instruction and shall be allocated pursuant
to the calculation in subdivision (b) of Section 42238.03 of the
Education Code.  
   (b) For purposes of making the computations required by Section 8
of Article XVI of the California Constitution, the appropriations
made by subdivision (a) shall be deemed to be "General Fund revenues
appropriated for school districts," as defined in subdivision (c) of
Section 41202 of the Education Code, for the 2015-16 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 of the Education Code, for the 2015-16 fiscal
year. 
   SEC. 121.    This act is a bill providing for
appropriations related to the Budget Bill within the meaning of
subdivision (e) of Section 12 of Article IV of the California
Constitution, has been identified as related to the budget in the
Budget Bill, and shall take effect immediately.  
  SECTION 1.   It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2015.