BILL NUMBER: ABX4 2	CHAPTERED
	BILL TEXT

	CHAPTER  2
	FILED WITH SECRETARY OF STATE  JULY 28, 2009
	APPROVED BY GOVERNOR  JULY 28, 2009
	PASSED THE SENATE  JULY 24, 2009
	PASSED THE ASSEMBLY  JULY 24, 2009
	AMENDED IN SENATE  JULY 23, 2009

INTRODUCED BY   Assembly Member Evans

                        JULY 2, 2009

   An act to amend Sections 1240.3, 2550, 2558.46, 8279.7, 8357,
8447, 17070.766, 42238.146, 42605, 44259, 45023.1, 45023.4, 46010.2,
47614.5, 52055.770, 52124.3, 60422.1, and 76300 of, to amend and
repeal Section 33128.3 of, to amend, repeal, and add Section 47634.1
of, to add Sections 8481, 42606, 60200.7, 60852.3, and 84043 to, to
add and repeal Sections 17463.7, 46201.2, and 52055.60 of, to repeal
Section 8278 of, to repeal Article 22 (commencing with Section 8460)
of Chapter 2 of Part 6 of Division 1 of Title 1 of, and to repeal and
add Section 17587 of, the Education Code, to amend Sections 7906 and
8880.5 of the Government Code, and to amend Section 42 of Chapter 12
of the Statutes of 2009, relating to education, making an
appropriation therefor, and declaring the urgency thereof, to take
effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2, Evans. Education.
   (1) Existing law requires the county superintendent of schools of
each county, among other specified duties, to make annual visits to
each school in his or her county to observe its operation and to
learn of its problems. Existing law requires that the priority
objective of those visits be the determination of whether each school
has sufficient textbooks, as defined. Existing law states for the
2008-09 and 2009-10 fiscal years the intent of the Legislature that
each pupil be provided with the same state-adopted standards-aligned
textbook or instructional material as is provided to every other
pupil enrolled in the same grade and same course offered by the local
educational agency.
   This bill would extend the definition of "sufficient textbooks" to
the 2012-13 fiscal year and would modify the statement of
legislative intent. The bill would clarify that a local educational
agency is not required to purchase all of the instructional materials
included in an adoption if the materials that are purchased are made
available to all the pupils for whom they are intended in all of the
schools within the local educational agency.
   (2) Existing law requires a revenue limit to be calculated for
each county superintendent of schools, adjusted for various factors,
and reduced, as specified. Existing law reduces the revenue limit for
each county superintendent of schools for the 2008-09 fiscal year by
a deficit factor of 7.839% and for the 2009-10 fiscal year by a
deficit factor of 13.360%.
   This bill would increase the deficit factor for each county
superintendent of schools for the 2009-10 fiscal year to 18.621%.
   (3) Existing law makes child development appropriations, with the
exception of funds appropriated for the After School Learning and
Safe Neighborhoods Partnerships Program and for CalWORKs child care,
available for expenditure for 3 years, except that funds remaining
unencumbered at the end of the first fiscal year are required to
revert to the General Fund. Existing law requires the Superintendent
of Public Instruction to establish criteria and procedures for the
reallocation of unearned contract funds in the 2nd and 3rd years of
availability, in accordance with specified priorities.
   This bill would repeal these provisions.
   (4) Existing law appropriates funds to the County of Los Angeles
to address the retention of qualified child care employees in
state-subsidized child care centers and to licensed child care
programs that serve a majority of children who receive subsidized
child care services, including family day care homes. To qualify for
use in licensed child care programs that serve a majority of children
who receive subsidized child care services, the funds are required
to meet specified requirements, including that they be appropriated
in specified schedules of an item in specified Budget Acts.
   This bill would change this requirement by instead requiring that
the funds be appropriated in the annual Budget Act.
   (5) Existing law requires the cost of state-funded child care
services to be governed by regional market rates. Beginning March 1,
2009, the regional market rate ceilings are required to be
established at the 85th percentile of the 2007 regional market rate
survey for that region, and for the 2008-09 and 2009-10 fiscal years,
the 85th percentile ceilings of the 2007 regional market rate survey
for that region are required to remain in effect.
   This bill would instead set the regional market rate ceiling at
the 85th percentile of the 2005 regional market rate survey for that
region and delete the ceilings set for the 2008-09 and 2009-10 fiscal
years. The bill would restrict to specified circumstances
reimbursements to child care providers that are based upon a daily
rate.
   (6) Existing law requires the Department of Finance, by March 1 of
each year, to provide to the State Department of Education the state
median income amount for a 4-person household in California based on
the best available data. The State Department of Education is
required to adjust its fee schedule for child care providers to
reflect this updated state median income.
   This bill would prohibit changes from being implemented midyear.
   (7) Existing law establishes the School Age Community Child Care
Services Program for the provision of extended day care services.
   This bill would make this program inoperative on September 1,
2009, or on the effective date of this bill, whichever is later, and
would repeal it as of January 1, 2010.
   (8) The Leroy F. Greene School Facilities Act of 1998 requires the
State Allocation Board to require school districts applying for
funds under that act to deposit, into a specified account for ongoing
and major maintenance of school buildings, an amount equal to or
greater than 3% of the total general fund expenditures of the
applicant school district. Existing law, for the 2008-09 to the
2012-13 fiscal years, inclusive, reduces that deposit requirement to
an amount equal to or greater than 1% of the total general fund
expenditures of the applicant school district.
   This bill would exempt a school district that maintains its
facilities in good repair, as defined, from this 1% requirement.
   (9) Existing law requires that the proceeds from the sale of
surplus school real property be used for capital outlay or for
prescribed costs of maintenance of school district property.
   This bill, until January 1, 2012, would authorize a school
district to deposit the proceeds from the sale of surplus school
property, together with any personal property located on that
property, purchased entirely with local funds, into the general fund
of the school district and to use those proceeds for any one-time
general fund purpose. The bill would make the district ineligible for
hardship funding from the State School Deferred Maintenance Fund for
5 years after the date the proceeds are deposited into the district'
s general fund. The bill would require the State Allocation Board to
reduce an apportionment of hardship assistance awarded to that
district, as specified. Before exercising the authority granted by
the bill, the governing board of the school district would be
required to submit documents containing specified certifications to
the State Allocation Board and, at a regularly scheduled meeting of
the governing board, present a plan for expending the proceeds of the
sale.
   (10) Existing law, for the 2003-04 and 2004-05 fiscal years, sets
the minimum state requirement for a local educational agency's
reserve for economic uncertainties at1/2 of the percentage for a
reserve adopted by the State Board of Education as of May 1, 2003,
and restores that requirement, for the 2005-06 fiscal year, to the
percentage adopted by the state board as of May 1, 2003.
   This bill would set that requirement for the 2009-10 fiscal year
at1/3 of the percentage for a reserve adopted by the state board as
of May 1, 2009, and would require a school district to make progress
in the 2010-11 fiscal year to returning to compliance with the
specified standards and criteria adopted by the state board. The bill
would restore the requirement, for the 2011-12 fiscal year, to the
percentage adopted by the state board as of May 1, 2009.
   (11) Existing law requires the county superintendent of schools to
determine a revenue limit for each school district in the county and
requires the amount of the revenue limit to be adjusted for various
factors. Existing law reduces the revenue limit for each school
district for the 2008-09 fiscal year by a deficit factor of 7.844%,
and for the 2009-10 fiscal year by a deficit factor of 13.094%.
   This bill would instead reduce the revenue limit for each school
district for the 2009-10 fiscal year by a deficit factor of 18.355%,
and would set forth a mechanism by which basic aid school districts
would assume categorical funding reductions proportionate to the
revenue limit reductions implemented for nonbasic aid school
districts.
   (12) Existing law establishes various categorical education
programs and appropriates the funding for those programs in the
annual Budget Act. Existing law requires the Superintendent of Public
Instruction, for the 2008-09 to 2012-13 fiscal years, inclusive, to
apportion from the amount provided in the annual Budget Act for
specified categorical education programs an amount based on the same
relative proportion that the local educational agency received in the
2008-09 fiscal year for those programs and authorizes school
districts, for those fiscal years, to use these funds, with specified
exceptions, for any educational purpose, to the extent permitted by
federal law. Existing law, for those fiscal years, deems local
educational agencies that use these categorical education program
funds for any educational purpose to be in compliance with the
program and funding requirements of those categorical education
programs, including requirements related to average daily attendance
accounting.
   This bill would base the amount to be received from certain
categorical education program budget items to be based on the same
relative proportion that the recipient received in the 2007-08 fiscal
year for those programs, instead of the 2008-09 fiscal year. The
bill would require, for the 2008-09 to 2012-13 fiscal years,
inclusive, and for certain calculations that use average daily
attendance, that the average daily attendance for specified programs
be the same amount used in those calculations for the 2007-08 fiscal
year. The bill would declare that changes to these calculations in
the California State Lottery Act, an initiative measure, further the
purposes of that act, and therefore may be made by an act enacted by
a 2/3 vote of both houses of the Legislature.
   The bill would authorize a local educational agency to apply, on
behalf of a school that begins operation in the 2008-09 to 2012-13
fiscal years, inclusive, for state categorical education program
funding included in the annual Budget Act.
   Existing law requires a school district that receives funding on
behalf of a charter school to continue to distribute those funds to
those charter schools based on the amounts distributed in the 2008-09
fiscal year and to adjust those amounts, as specified.
   This bill would clarify that a school district that receives
funding on behalf of a charter school is prohibited from redirecting
that funding for another purpose, except as specified, and would
require the school district to continue to distribute those funds to
those charter schools based on the relative proportion that the
school district distributed in the 2007-08 fiscal year. The bill
would require the Superintendent to apportion from the amount
appropriated for the charter school categorical block grant in
accordance with the per pupil methodology prescribed by a specified
provision of law.
   Existing law, as a condition of receiving the categorical
education program funds that may be used for any educational purpose,
requires school districts and county offices of education, at a
regularly scheduled, open, public hearing, to take testimony from the
public, discuss, and approve or disapprove the proposed use of
funding. Existing law, as a condition of transferring those funds to
their general funds, requires school districts and county offices of
education, at a regularly scheduled, open, public hearing, to take
testimony from the public, discuss, and approve or disapprove each
transfer and the proposed use of funding, and to report to the State
Department of Education, in the existing annual Standardized
Accounting System reporting process, the amounts transferred by using
the appropriate program code for which the funds were expended. The
department is required to collect and provide this information to the
appropriate legislative policy and budget committees and the
Department of Finance by February 28, 2010.
   This bill would delete the meeting requirement that is a condition
of transferring categorical education program funds to the general
fund of a school district or county office of education. The bill
would add to the requirement that is a condition of the receipt of
categorical education program funds that may be used for any
educational purpose, that the governing board make explicit the
purposes for which the funds would be used. The bill would require a
local educational agency to report expenditures by using the
appropriate function codes of the Standardized Accounting System
reporting process to indicate the activities for which these funds
were expended. The bill would require the department to collect and
provide this information to the appropriate legislative policy and
budget committees and the Department of Finance by April 15, 2010,
and annually thereafter, until 2014.
   (13) Existing law sets forth the minimum requirements for the
professional clear multiple or single subject teacher credential.
Among those requirements is the completion of a program of beginning
teacher induction. This requirement is contingent on the availability
of funds in the annual Budget Act to provide statewide access to
eligible beginning teachers.
   This bill would remove the contingency of this requirement on the
availability of funds.
   (14) Existing law prescribes the minimum length of time for the
instructional school year and the minimum number of instructional
minutes per schoolday. Existing law imposes fiscal penalties on
school districts and county offices of education that fail to
maintain those minimum instructional times per school year or
schoolday.
   This bill, commencing with the 2009-10 school year and continuing
through the 2012-13 school year, would authorize a school district,
county office of education, and charter school to reduce the
equivalent of up to 5 days of instruction or the equivalent number of
instructional minutes without incurring the fiscal penalties.
   (15) Existing law establishes the Charter School Facility Grant
Program to provide assistance with facilities rent and lease costs
for pupils in charter schools by reimbursing charter schools for
those expenses.
   This bill, commencing with the 2009-10 fiscal year, would instead
require the Superintendent of Public Instruction to annually allocate
the facilities grants to eligible charter schools no later than
October 1 of each fiscal year but would require that funding
appropriated for this program in the 2009-10 fiscal year be used
first to reimburse eligible charter schools for rent or lease costs
for the 2008-09 fiscal year.
   (16) Existing law requires the categorical block grant for charter
schools for the 2007-08 school year to be $500 per unit of charter
school average daily attendance, as determined at the 2nd principal
apportionment for the 2007-08 fiscal year, to be adjusted for cost of
living each fiscal year thereafter, and to be supplemented, as
specified, for economic impact aid-eligible pupils. Existing law
states the intent of the Legislature to fully fund the categorical
block grant for charter schools and sets forth a mechanism to
appropriate additional funding if needed for unanticipated increases
in average daily attendance and counts of economic impact
aid-eligible pupils.
   This bill would strictly limit funding deficiencies to
unanticipated increases in average daily attendance and counts of
economic impact aid-eligible pupils and would prohibit additional
funding from being provided to restore certain reductions made to
categorical programs pursuant the annual Budget Act.
   (17) The federal No Child Left Behind Act of 2001 requires a local
educational agency to identify an elementary or secondary school
that fails, for 2 consecutive years, to make adequate yearly
progress, as defined by the state, for program improvement. The act
requires a school that continues to fail to make adequate yearly
progress after being identified for program improvement to take
additional corrective action or meet specified restructuring
requirements. The Public Schools Accountability Act of 1999 requires
the State Department of Education to identify local educational
agencies that are in danger of being identified for program
improvement pursuant to the No Child Left Behind Act, and to notify
those local educational agencies, in writing, of that status. The
department also is required to provide those agencies with
research-based criteria to conduct a voluntary self-assessment.
    This bill would prohibit the State Department of Education and
the State Board of Education from prohibiting a school, school
district, county office of education, or charter school that has been
identified for program improvement or corrective action under the
federal No Child Left Behind Act of 2001 from utilizing certain
categorical program flexibility provisions of law and from
identifying the fund with which sanctions or corrective actions are
to be implemented.
   (18) The Quality Education Investment Act of 2006 (QEIA) requires
the Superintendent of Public Instruction to identify and invite
school districts and chartering authorities that have eligible
schools to participate in the QEIA program and receive funds for
agreeing to comply with specified program requirements. The program
requires that for each of the 2008-09 to 2013-14 fiscal years,
inclusive, $450,000,000 per fiscal year, be allocated, with
$48,000,000 for allocation by the Chancellor of the California
Community Colleges to community colleges and $402,000,000 for
allocation by the Superintendent.
   This bill would extend that allocation to the 2014-15 fiscal year
and, commencing with the 2010-11 fiscal year, payments of that
allocation would be required to be made on or after October 8 of each
fiscal year. For each fiscal year, commencing with the 2010-11
fiscal year to the 2014-15 fiscal year, inclusive, the $48,000,000
allocated to the community colleges would be required to be used for
the purpose of providing funding to the community colleges to improve
and expand career technical education in public secondary education
and lower division public higher education, including the hiring of
additional faculty to expand the number of career technical education
programs and course offerings.
   The bill would appropriate, in lieu of the statutorily required
appropriation, $402,000,000 from the General Fund to the
Superintendent of Public Instruction for the 2009-10 fiscal year to
be allocated to schoolsites participating in the QEIA program and
would reduce the amount of its revenue limit funding, or general
purpose entitlement, as applicable, for the 2009-10 fiscal year by
the amount allocated pursuant to this appropriation. A school
district that participated in the program in the 2009-10 fiscal year
would be authorized to apply for specified grants provided to the
state pursuant to specified federal statutes.
   (19) Existing law establishes the Class Size Reduction Program
under which a participating school district or county office of
education reduces class size to 20 pupils per class in kindergarten
and grades 1 to 3, inclusive. Existing law provides that a local
educational agency is eligible to receive program funding only if it
was participating in the program as of December 10, 2008 and only for
the grade level or levels for which it had applied to receive
funding as of that date.
   This bill would provide instead that, for the 2008-09, 2009-10,
2010-11 and 2011-12 fiscal years, that a local educational agency is
eligible to receive program funding for the same number of classes
for which it had applied to receive program funding as of January 1,
2009, and only for the number of classes reported on the 2008-09
operations application.
   (20) Existing law requires the State Board of Education to adopt
basic instructional materials for use in kindergarten and grades 1 to
8, inclusive, and requires the state board to adopt procedures for
the submission of basic instructional materials, including the review
of the curriculum frameworks.
   This bill would prohibit the state board from adopting
instructional materials and procedures for their submission until the
2013-14 fiscal year.
   (21) Existing law establishes the Instructional Materials Funding
Realignment Program that requires the State Department of Education
to apportion funds to school districts and requires the governing
board of a school district to use that funding to ensure that each
pupil is provided with a standards-aligned textbook or basic
instructional materials by the beginning of the first school term
that commences no later than 24-months after those materials were
adopted by the State Board of Education, except as specified.
Existing law exempts, until July 1, 2010, school districts from the
24-month requirement.
   This bill would extend that exemption until July 1, 2013, but
state that this exemption does not does not relieve school districts
of their obligations to provide every pupil with textbooks or
instructional materials as provided under specified law.
   (22) Existing law requires each pupil completing grade 12 to
successfully pass the exit examination as a condition of receiving a
diploma of graduation or a condition of graduation from high school.
Existing law requires that each pupil take the high school exit
examination in grade 10 and allows each pupil to take the examination
during each subsequent administration until each section of the
examination has been passed. Existing law, commencing January 1,
2011, authorizes an eligible pupil with a disability to participate
in alternative means of demonstrating the level of academic
achievement in the content standards required for passage of the high
school exit examination.
   This bill, commencing with the 2009-10 school year, would exempt
an eligible pupil with a disability from the requirement to pass the
high school exit examination as a condition of receiving a diploma of
graduation or a condition of graduation from high school. This
exemption would last until the State Board of Education makes a
determination that alternative means by which eligible pupils with
disabilities may demonstrate that they have achieved the same level
of academic achievement in the portions of, or those content
standards required for passage of the high school exit examination
are not feasible or that the alternative means are implemented.
Pupils with exceptional needs would be required to take the high
school exit examination in grade 10 for purposes of fulfilling the
federal No Child Left Behind Act of 2001.
   (23) Existing law establishes community college districts under
the administration of community college governing boards and
authorizes these districts to provide instruction at community
college campuses throughout the state. Existing law requires the
governing board of each community college district to charge each
student, with specified exceptions, a fee of $20 per unit per
semester, effective with the spring term of the 2006-07 academic
year.
   This bill would increase that fee to $26 per unit per semester,
effective with the fall term of the 2009-10 academic year.
   (24) Under existing law, the board of governors is required to
develop criteria and standards for the purposes of making the annual
budget request for the California Community Colleges to the Governor
and the Legislature, pursuant to specified minimum requirements.
Among those requirements, existing law requires, except as otherwise
provided, that specified categorical programs providing direct
services to students be funded separately through the annual Budget
Act.
   This bill would, for the 2009-10 to 2012-13 fiscal years,
inclusive, authorize a community college district to use funds
apportioned to the district for specified categorical programs for
purposes of a prescribed list of programs. The bill would prescribe
public hearing and reporting requirements as a condition of receiving
these funds. The bill would require the Chancellor of the California
Community Colleges to annually report these expenditures to the
Department of Finance and the Legislature, as specified.
   (25) Existing law, for the 2008-09 and 2009-10 fiscal years,
authorizes the governing board of a school district or county office
of education to use up to 100 percent of the balances, as of June 30,
2008, of restricted accounts in its general fund or cafeteria fund
with certain exclusion, including, among others restricted reserves
committed for capital outlay, and excluding balances in specified
categorical education programs, including, among others the Targeted
Instructional Improvement Grant Program, the Instructional Materials
Program, and the California High School Exit Exam Intensive
Intervention Program. Existing law requires a governing board that
elects to use balances in restricted accounts to report to the
Superintendent regarding the programs and amounts of restricted
balances used and requires the Superintendent to report statewide
information and information for each school district and county
office of education to the Joint Legislative Budget Committee by
October 31, 2009.
   This bill would exclude the use of the ending balance in the
cafeteria fund and the balances in the English Learner Acquisition
and Development Pilot Program and child development programs, but
would authorize the use of balances in the Targeted Instructional
Improvement Grant Program, the Instructional Materials Program, and
the California High School Exit Exam Intensive Intervention Program,
and restricted reserves committed for capital outlay. The bill would
change the deadline of the date by which the Superintendent is
required to report to the Joint Legislative Budget Committee to April
15, 2010.
   (26) Existing law authorizes the governing board of a school
district to establish a district deferred maintenance fund for
specified maintenance purposes. The State Allocation Board is
required to apportion from the State School Deferred Maintenance
Fund, to school district an amount equal to $1 for each $1 of local
funds up to a specified maximum. To be eligible to receive the state
matching funds a school district is required to deposit in its
district deferred maintenance fund a specified amount. Existing law
authorizes the State Allocation Board to reserve funds in the State
School Deferred Maintenance Fund for apportionments to school
districts in instances of extreme hardship, as defined.
   This bill would suspend for the 2008-09 to 2012-13 fiscal years,
inclusive, the requirement that a school district deposit the
required amount in its district deferred maintenance fund and also
suspend the board's authority to reserve funds for apportionments to
school districts in instances of extreme hardship.
                                (27) Existing law requires the county
superintendent of schools to approve, conditionally approve, or
disapprove the adopted budget for each school district and requires
the Superintendent of Public Instruction to review and certify the
budget approved by the county superintendent of schools. Existing law
requires the governing board of a school district to certify twice
each fiscal year whether the district is able to meet its financial
obligations for the remainder of the fiscal year and the subsequent
fiscal year. The certification is required to be filed with the
county superintendent of schools who is required to submit a
qualified or negative certification to the Controller and
Superintendent.
   This bill, for the 2009-10 fiscal year, would prohibit a county
superintendent of schools and the Superintendent of Public
Instruction from assigning a qualified or negative certification to a
local education agency based substantially on a projected loss of
federal funds provided through the federal State Fiscal Stabilization
Fund of the American Recovery and Reinvestment Act of 2009 in the
2011-12 fiscal year. The bill would authorize the Superintendent to
convene a standards and criteria committee to modify the budget and
financial review criteria to incorporate this change for the 2009-10
fiscal year.
   (28)The California Constitution authorizes the Governor to declare
a fiscal emergency and to call the Legislature into special session
for that purpose. The Governor issued a proclamation declaring a
fiscal emergency, and calling a special session for this purpose, on
July 1, 2009.
   This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on July 1, 2009,
pursuant to the California Constitution.
   (29) This bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation: yes.


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

  SECTION 1.  Section 1240.3 of the Education Code is amended to
read:
   1240.3.  (a) For the purposes of Section 1240, for the 2008-09 to
2012-13 fiscal years, inclusive, sufficient textbooks or
instructional materials include standards-aligned textbooks or
instructional materials, or both, that were adopted prior to July 1,
2008, by the state board or local educational agency pursuant to
statute, unless those local educational agencies purchased or
arranged to purchase textbooks or instructional materials adopted by
the state board after that date. It is the intent of the Legislature
that each local educational agency provide each pupil with
standards-aligned textbooks or instructional materials from the same
adoption, consistent with Sections 60119 and 60422. This section does
not require a local educational agency to purchase all of the
instructional materials included in an adoption if the materials that
are purchased are made available to all the pupils for whom they are
intended in all of the schools within the local educational agency.
   (b) Notwithstanding Section 1240 or any other law, for the 2008-09
to 2012-13 fiscal years, inclusive, a county superintendent of
schools, in making visits to schools as specified in Section 1240,
shall determine the status of sufficient textbooks as defined in
subdivision (a).
   (c) This section shall become inoperative on July 1, 2013, and, as
of January 1, 2014, is repealed, unless a later enacted statute that
is enacted before January 1, 2014, deletes or extends the dates on
which it becomes inoperative and is repealed.
  SEC. 2.  Section 2550 of the Education Code is amended to read:
   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 of Public Instruction 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, and 2012-13 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. 3.  Section 2558.46 of the Education Code is amended to read:
   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 a 18.621 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).
  SEC. 4.  Section 8278 of the Education Code is repealed.
  SEC. 5.  Section 8279.7 of the Education Code is amended to read:
   8279.7.  (a) The Legislature recognizes the importance of
providing quality child care services. It is, therefore, the intent
of the Legislature to assist counties in improving the retention of
qualified child care employees who work directly with children who
receive state-subsidized child care services.
   (b) It is further the intent of the Legislature, in amending this
section during the 2009-10 Regular Session, to address the unique
challenges of the County of Los Angeles, in which an estimated 60,000
low-income children receive subsidized child care in nonstate-funded
child care settings and an additional 50,000 eligible children are
waiting for subsidized services.
   (c) (1) Except as provided in paragraph (2), the funds
appropriated for the purposes of this section by paragraph (11) of
Schedule (b) of Item 6110-196-0001 of Section 2.00 of the Budget Act
of 2000 (Ch. 52, Stats. 2000), and that are described in subdivision
(i) of Provision 7 of that item, and any other funds appropriated for
purposes of this section, shall be allocated to local child care and
development planning councils based on the percentage of
state-subsidized, center-based child care funds received in that
county, and shall be used to address the retention of qualified child
care employees in state-subsidized child care centers.
   (2) Of the funds identified in paragraph (1), funds qualified
pursuant to subparagraphs (A) to (C), inclusive, may also be used to
address the retention of qualified persons working in licensed child
care programs that serve a majority of children who receive
subsidized child care services pursuant to this chapter, including,
but not limited to, family day care homes as defined in Section
1596.78 of the Health and Safety Code. To qualify for use pursuant to
this paragraph, the funds shall meet all of the following
requirements:
   (A) The funds are allocated for use in the County of Los Angeles.
   (B) The funds are appropriated in the annual Budget Act.
   (C) The funds are unexpended after addressing the retention of
qualified child care employees in state-subsidized child care centers
and family child care home education networks.
   (d) The department shall develop guidelines for use by local child
care and development planning councils in developing county plans
for the expenditure of funds allocated pursuant to this section.
These guidelines shall be consistent with the department's assessment
of the current needs of the subsidized child care workforce, and
shall be subject to the approval of the Secretary for Education and
the Department of Finance. Any county plan developed pursuant to
these guidelines shall be approved by the department prior to the
allocation of funds to the local child care and development planning
council.
   (e) Funds provided to a county for the purposes of this section
shall be used in accordance with the plan approved pursuant to
subdivision (d). A county with an approved plan may retain up to 1
percent of the county's total allocation made pursuant to this
section for reimbursement of administrative expenses associated with
the planning process.
   (f) The Superintendent of Public Instruction shall provide an
annual report, no later than April 10 of each year, to the
Legislature, the Secretary for Education, the Department of Finance,
and the Governor that includes, but is not limited to, a summary of
the distribution of the funds by county and a description of the use
of the funds.
  SEC. 6.  Section 8357 of the Education Code is amended to read:
   8357.  (a) The cost of child care services provided under this
article shall be governed by regional market rates. Recipients of
child care services provided pursuant to this article shall be
allowed to choose the child care services of licensed child care
providers or child care providers who are, by law, not required to be
licensed, and the cost of that child care shall be reimbursed by
counties or agencies that contract with the State Department of
Education if the cost is within the regional market rate. For
purposes of this section, "regional market rate" means care costing
no more than 1.5 market standard deviations above the mean cost of
care for that region. The regional market rate ceilings shall be
established at the 85th percentile of the 2005 regional market rate
survey for that region.
   (b) Reimbursement to child care providers shall not exceed the fee
charged to private clients for the same service.
   (c) Reimbursement shall not be made for child care services when
care is provided by parents, legal guardians, or members of the
assistance unit.
   (d) A child care provider located on an Indian reservation or
rancheria and exempted from state licensing requirements shall meet
applicable tribal standards.
   (e) For purposes of this section, "reimbursement" means a direct
payment to the provider of child care services, including license
exempt-providers. If care is provided in the home of the recipient,
payment may be made to the parent as the employer, and the parent
shall be informed of his or her concomitant legal and financial
reporting requirements. To allow time for the development of the
administrative systems necessary to issue direct payments to
providers, for a period not to exceed six months from the effective
date of this article, a county or an alternative payment agency
contracting with the State Department of Education may reimburse the
cost of child care services through a direct payment to a recipient
of aid rather than to the child care provider.
   (f) Counties and alternative payment programs shall not be bound
by the rate limits described in subdivision (a) when there are, in
the region, no more than two child care providers of the type needed
by the recipient of child care services provided under this article.
   (g) Notwithstanding any other provision of law, reimbursements to
child care providers based upon a daily rate may only be authorized
under either of the following circumstances:
   (1) A family has an unscheduled but documented need of six hours
or more per occurrence, such as the parent's need to work on a
regularly scheduled day off, that exceeds the certified need for
child care.
   (2) A family has a documented need of six hours or more per day
that exceeds no more than 14 days per month. In no event shall
reimbursements to a provider based on the daily rate over one month's
time exceed the provider's equivalent full-time monthly rate or
applicable monthly ceiling.
   (3) This subdivision shall not limit providers from being
reimbursed for services using a weekly or monthly rate, pursuant to
subdivision (c) of Section 8222.
  SEC. 7.  Section 8447 of the Education Code is amended to read:
   8447.  (a) The Legislature hereby finds and declares that greater
efficiencies may be achieved in the execution of state subsidized
child care and development program contracts with public and private
agencies by the timely approval of contract provisions by the
Department of Finance, the Department of General Services, and the
State Department of Education and by authorizing the State Department
of Education to establish a multiyear application, contract
expenditure, and service review as may be necessary to provide timely
service while preserving audit and oversight functions to protect
the public welfare.
   (b) (1) The Department of Finance and the Department of General
Services shall approve or disapprove annual contract funding terms
and conditions, including both family fee schedules and regional
market rate schedules that are required to be adhered to by contract,
and contract face sheets submitted by the State Department of
Education not more than 30 working days from the date of submission,
unless unresolved conflicts remain between the Department of Finance,
the State Department of Education, and the Department of General
Services. The State Department of Education shall resolve conflicts
within an additional 30 working day time period. Contracts and
funding terms and conditions shall be issued to child care
contractors no later than June 1. Applications for new child care
funding shall be issued not more than 45 working days after the
effective date of authorized new allocations of child care moneys.
   (2) Notwithstanding paragraph (1), the State Department of
Education shall implement the regional market rate schedules based
upon the county aggregates, as determined by the Regional Market
survey conducted in 2005.
   (3) Notwithstanding paragraph (1), for the 2006-07 fiscal year,
the State Department of Education shall update the family fee
schedules by family size, based on the 2005 state median income
survey data for a family of four. The family fee schedule used during
the 2005-06 fiscal year shall remain in effect. However, the
department shall adjust the family fee schedule for families that are
newly eligible to receive or will continue to receive services under
the new income eligibility limits. The family fees shall not exceed
10 percent of the family's monthly income.
   (4) It is the intent of the Legislature to fully fund the third
stage of child care for former CalWORKs recipients.
   (c) With respect to subdivision (b), it is the intent of the
Legislature that the Department of Finance annually review contract
funding terms and conditions for the primary purpose of ensuring
consistency between child care contracts and the child care budget.
This review, shall include evaluating any proposed changes to
contract language or other fiscal documents to which the contractor
is required to adhere, including those changes to terms or conditions
that authorize higher reimbursement rates, that modify related
adjustment factors, that modify administrative or other service
allowances, or that diminish fee revenues otherwise available for
services, to determine if the change is necessary or has the
potential effect of reducing the number of full-time equivalent
children that may be served.
   (d) Alternative payment child care systems, as set forth in
Article 3 (commencing with Section 8220), shall be subject to the
rates established in the Regional Market Rate Survey of California
Child Care Providers for provider payments. The State Department of
Education shall contract to conduct and complete a Regional Market
Rate Survey no more frequently than once every two years, consistent
with federal regulations, with a goal of completion by March 1.
   (e) By March 1 of each year, the Department of Finance shall
provide to the State Department of Education the State Median Income
amount for a four-person household in California based on the best
available data. The State Department of Education shall adjust its
fee schedule for child care providers to reflect this updated state
median income; however, no changes based on revisions to the state
median income amount shall be implemented midyear.
   (f) Notwithstanding the June 1 date specified in subdivision (b),
changes to the regional market rate schedules and fee schedules may
be made at any other time to reflect the availability of accurate
data necessary for their completion, provided these documents receive
the approval of the Department of Finance. The Department of Finance
shall review the changes within 30 working days of submission and
the State Department of Education shall resolve conflicts within an
additional 30 working day period. Contractors shall be given adequate
notice prior to the effective date of the approved schedules. It is
the intent of the Legislature that contracts for services not be
delayed by the timing of the availability of accurate data needed to
update these schedules.
   (g) Notwithstanding any other provision of law, no family
receiving CalWORKs cash aid may be charged a family fee.
  SEC. 8.  Section 8481 is added to the Education Code, to
immediately follow Section 8480, to read:
   8481.  This article shall become inoperative on September 1, 2009,
or on the date that the act adding this section becomes effective,
whichever date is later, and, as of January 1, 2010, is repealed,
unless a later enacted statute, that becomes operative on or before
January 1, 2010, deletes or extends the dates on which it becomes
inoperative and is repealed.
  SEC. 9.  Section 17070.766 of the Education Code is amended to
read:
   17070.766.  Notwithstanding paragraph (2) of subdivision (b) of
Section 17070.75, for the 2008-09, 2009-10, 2010-11, 2011-12, and
2012-13 fiscal years, the board shall require a school district to
deposit into the account established pursuant to paragraph (1) of
subdivision (b) of Section 17070.75 only an amount equal to 1 percent
of the total expenditures by a district from its general fund in the
2008-09, 2009-10, 2010-11, 2011-12, and 2012-13 fiscal years
respectively, but if the school district maintains its facilities in
good repair, as defined in Section 17002, it shall be exempt from
this 1 percent requirement. A school district may elect to deposit
into the account an amount that is greater than the amount required
by the board pursuant to this section.
  SEC. 10.  Section 17463.7 is added to the Education Code, to read:
   17463.7.  (a) Notwithstanding any other law, a school district may
deposit the proceeds from the sale of surplus real property,
together with any personal property located on the property,
purchased entirely with local funds, into the general fund of the
school district and may use the proceeds for any one-time general
fund purpose. If the purchase of the property was made using the
proceeds of a local general obligation bond or revenue derived from
developer fees, the amount of the proceeds of the transaction that
may be deposited into the general fund of the school district may not
exceed the percentage computed by the difference between the
purchase price of the property and the proceeds from the transaction,
divided by the amount of the proceeds of the transaction. For the
purposes of this section, proceeds of the transaction means either of
the following, as appropriate:
   (1) The amount realized from the sale of property after reasonable
expenses related to the sale.
   (2) For a transaction that does not result in a lump-sum payment
of the proceeds of the transaction, the proceeds of the transaction
shall be calculated as the net present value of the future cashflow
generated by the transaction.
   (b) The State Allocation Board shall reduce an apportionment of
hardship assistance awarded to the particular school district
pursuant to Article 8 (commencing with Section 17075.10) by an amount
equal to the amount of the sale of surplus real property used for a
one-time expenditure of the school district pursuant to this section.

   (c) If the school district exercises the authority granted
pursuant to this section, the district is ineligible for hardship
funding from the State School Deferred Maintenance Fund under Section
17587 for five years after the date proceeds are deposited into the
general fund pursuant to this section.
   (d) Before a school district exercises the authority granted
pursuant to this section, the governing board of the school district
shall first submit to the State Allocation Board documents certifying
the following:
   (1) The school district has no major deferred maintenance
requirements not covered by existing capital outlay resources.
   (2) The sale of real property pursuant to this section does not
violate the provisions of a local bond act.
   (3) The real property is not suitable to meet projected school
construction needs for the next 10 years.
   (e) Before the school district exercises the authority granted
pursuant to this section, the governing board of the school district
at a regularly scheduled meeting shall present a plan for expending
one-time resources pursuant to this section. The plan shall identify
the source and use of the funds and describe the reasons why the
expenditure will not result in ongoing fiscal obligations for the
school district.
   (f) The Office of Public School Construction shall submit an
interim and a final report to the State Allocation Board and the
budget, education policy, and fiscal committees of the Legislature
that identifies the school districts that have exercised the
authority granted by this section, the amount of proceeds involved,
and the purpose for which those proceeds were used. The interim
report shall be submitted by January 1, 2011, and the final report by
January 1, 2012.
   (g) This section shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2012, deletes or extends
that date.
  SEC. 11.  Section 17587 of the Education Code is repealed.
  SEC. 12.  Section 17587 is added to the Education Code, to read:
   17587.  (a) Notwithstanding the limitations of Section 17584, the
State Allocation Board may each year reserve an amount not to exceed
10 percent of the funds transferred from any source to the State
School Deferred Maintenance Fund for apportionments to school
districts, in instances of extreme hardship. The apportionment shall
be in addition to the apportionments made pursuant to Section 17584.
Not less than one-half of all funds made available by this section
shall be apportioned to school districts that had an average daily
attendance, excluding summer session attendance, of less than 2,501
during the prior fiscal year.
   An extreme hardship shall exist in a school district if the State
Allocation Board determines the existence of all of the following:
   (1) That the district has deposited in its deferred maintenance
fund an amount equal to at least 0.5 percent of the total general
funds and adult education funds budgeted by the district for the
fiscal year, exclusive of any amounts budgeted for capital outlay or
debt service.
   (2) That the district has a critical project on its five-year plan
which, if not completed in one year, could result in serious damage
to the remainder of the facility or would result in a serious hazard
to the health and safety of the pupils attending the facility.
   (3) That the total funds deposited by the district and the state
pursuant to Section 17584 are insufficient to complete the project.
   (b) If a determination is made that a hardship exists pursuant to
subdivision (a), the State Allocation Board may increase the
apportionment to a school district by the amount it determines
necessary to complete the critical project.
   (c) Notwithstanding subdivision (a), in any fiscal year in which
the State Allocation Board has apportioned all funding from the State
School Deferred Maintenance Fund for which school districts have
qualified under Section 17584, the board may apportion any amount
remaining in that fund for the purposes of this section.
   (d) This section shall become operative on July 1, 2013.
  SEC. 13.  Section 33128.3 of the Education Code is amended to read:

   33128.3.  (a) Notwithstanding the standards and criteria adopted
pursuant to paragraph (3) of subdivision (a) of Section 33128, for
the 2009-10 fiscal year, the minimum state requirement for a reserve
for economic uncertainties is one-third of the percentage for a
reserve adopted by the state board pursuant to Section 33128 as of
May 1, 2009.
   (b) The school district shall make progress, in the 2010-11 fiscal
year, toward returning to compliance with the standards and criteria
adopted pursuant to paragraph (3) of subdivision (a) of Section
33128.
   (c) For the 2011-12 fiscal year, the minimum state requirement for
a reserve for economic uncertainties shall be restored to the
percentage adopted by state board pursuant to Section 33128 as of May
1 2009.
                                                             (d)
This section shall become inoperative on July 1, 2012, and, as of
January 1, 2013, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2013, deletes or extends
the dates on which it becomes inoperative and is repealed.
  SEC. 14.  Section 42238.146 of the Education Code is amended to
read:
   42238.146.  (a) (1) For the 2003-04 fiscal year, the revenue limit
for each school district determined pursuant to this article shall
be reduced by a 1.198 percent deficit factor.
   (2) For the 2004-05 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
0.323 percent deficit factor.
   (3) For the 2003-04 and 2004-05 fiscal years, the revenue limit
for each school district determined pursuant to this article shall be
further reduced by a 1.826 percent deficit factor.
   (4) For the 2005-06 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
0.892 percent deficit factor.
   (5) For the 2008-09 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
7.844 percent deficit factor.
   (6) For the 2009-10 fiscal year, the revenue limit for each school
district determined pursuant to this article shall be reduced by a
18.355 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).
  SEC. 15.  Section 42605 of the Education Code is amended to read:
   42605.  (a) (1) Unless otherwise prohibited under federal law or
otherwise specified in subdivision (e), for the 2008-09 fiscal year
to the 2012-13 fiscal year, inclusive, recipients of funds from the
items listed in paragraph (2) may use funding received, pursuant to
subdivision (b), from any of these items listed in paragraph (2) that
are contained in an annual Budget Act, for any educational purpose:
   (2) 6110-104-0001, 6110-105-0001, 6110-108-0001, 6110-122-0001,
6110-123-0001, 6110-124-0001, 6110-137-0001, 6110-144-0001,
6110-150-0001, 6110-151-0001, 6110-156-0001, 6110-181-0001,
6110-188-0001, 6110-189-0001, 6110-190-0001, 6110-193-0001,
6110-195-0001, 6110-198-0001, 6110-204-0001, 6110-208-0001,
6110-209-0001, 6110-211-0001, 6110-227-0001, 6110-228-0001,
6110-232-0001, 6110-240-0001, 6110-242-0001, 6110-243-0001,
6110-244-0001, 6110-245-0001, 6110-246-0001, 6110-247-0001,
6110-248-0001, 6110-260-0001, 6110-265-0001, 6110-266-0001,
6110-267-0001, 6110-268-0001, and 6360-101-0001.
   (b) (1) For the 2009-10 fiscal year to the 2012-13 fiscal year,
inclusive, the Superintendent or other administering state agency, as
appropriate, shall apportion from the amounts provided in the annual
Budget Act for the items enumerated in paragraph (2) of subdivision
(a), an amount to recipients based on the same relative proportion
that the recipient received in the 2008-09 fiscal year for the
programs funded through the items enumerated in paragraph (2) of
subdivision (a).
   (2) This section and Section 42 of Chapter 12 of the Statutes of
2009 do not authorize a school district that receives funding on
behalf of a charter school pursuant to Sections 47634.1 and 47651 to
redirect this funding for another purpose unless otherwise authorized
in law or pursuant to an agreement between a charter school and its
chartering authority. Notwithstanding paragraph (1), for the 2008-09
fiscal year to the 2012-13 fiscal year, inclusive, a school district
that receives funding on behalf of a charter school pursuant to
Sections 47634.1 and 47651 shall continue to distribute the funds to
those charter schools based on the relative proportion that the
school district distributed in the 2007-08 fiscal year, and shall
adjust those amounts to reflect changes in charter school attendance
in the district. The amounts allocated shall be adjusted for any
greater or lesser amount appropriated for the items enumerated in
paragraph (2) of subdivision (a). For a charter school that began
operation in the 2008-09 fiscal year, if a school district received
funding on behalf of that charter school pursuant to Sections 47634.1
and 47651, the school district shall continue to distribute the
funds to that charter school based on the relative proportion that
the school district distributed in the 2008-09 fiscal year and shall
adjust the amount of those funds to reflect changes in charter school
attendance in the district. The amounts allocated shall be adjusted
for any greater or lesser amount appropriated for the items
enumerated in paragraph (2) of subdivision (a).
   (3) Notwithstanding paragraph (1), for the 2008-09 fiscal year to
the 2012-13 fiscal year, inclusive, the Superintendent shall
apportion from the amounts appropriated by Item 6110-211-0001 of the
annual Budget Act, an amount to a charter school in accordance with
the per pupil methodology prescribed in subdivision (c) of Section
47634.1.
   (4) Notwithstanding paragraph (1), for the 2008-09 fiscal year to
the 2012-13 fiscal year, inclusive, the Superintendent shall
apportion from the amounts provided in the annual Budget Act, an
amount to a school district, charter school, and county office of
education based on the same relative proportion that the local
educational agency received in the 2007-08 fiscal year for the
programs funded through the following items contained in the annual
Budget Act: 6110-104-0001, 6110-105-0001, 6110-156-0001,
6110-190-0001, schedule (3) of 6110-193-0001, 6110-198-0001,
6110-232-0001, and schedule (2) of 6110-240-0001.
   (5) For purposes of paragraph (4) of this subdivision, if a
direct-funded charter school began operation in the 2008-09 fiscal
year, the amount that the charter school was entitled to receive from
the items enumerated in paragraph (4) for the 2008-09 fiscal year,
as certified by the Superintendent in March 2009, is deemed to have
been received in the 2007-08 fiscal year.
   (c) (1) This section does not obligate the state to refund or
repay reductions made pursuant to this section. A decision by a
school district to reduce funding pursuant to this section for a
state-mandated local program shall constitute a waiver of the
subvention of funds that the school district is otherwise entitled to
pursuant to Section 6 of Article XIII B of the California
Constitution on the amount so reduced.
   (2) As a condition of receipt of funds, the governing board of the
school district or board of the county office of education, as
appropriate, at a regularly scheduled open public hearing shall take
testimony from the public, discuss, approve or disapprove the
proposed use of funding, and make explicit for each of the budget
items in paragraph (2) of subdivision (a) the purposes for which the
funds will be used.
   (3) Using the Standardized Account Code Structure reporting
process, a local educational agency shall report expenditures of
funds pursuant to the authority of this section by using the
appropriate function codes to indicate the activities for which these
funds are expended. The department shall collect and provide this
information to the Department of Finance and the appropriate policy
and budget committees of the Legislature by April 15, 2010, and
annually thereafter on April 15 until, and including, April 15, 2014.

   (d) For the 2008-09 fiscal year to the 2012-13 fiscal year,
inclusive, local education agencies that use the flexibility
provision of the section shall be deemed to be in compliance with the
program and funding requirements contained in statutory, regulatory,
and provisional language, associated with the items enumerated in
subdivision (a).
   (e) Notwithstanding subdivision (d), the following requirements
shall continue to apply:
   (1) For Items 6110-105-0001 and 6110-156-0001, the amount
authorized for flexibility shall exclude the funding provided for
instruction of CalWORKs eligible students pursuant to schedules (2)
and (3), and provisions 2 and 4.
   (2) (A) Any instructional materials purchased by a local education
agency shall be the materials adopted by the state board for
kindergarten and grades 1 to 8, inclusive, and for grades 9 to 12,
inclusive, the materials purchased shall be aligned with state
standards as defined by Section 60605, and shall also meet the
reporting and sufficiency requirements contained in Section 60119.
   (B) For purposes of this section, "sufficiency" means that each
pupil has sufficient textbooks and instructional materials in the
four core areas as defined by Section 60119, and that all pupils
within the local education agency who are enrolled in the same course
shall have identical textbooks and instructional materials, as
specified in Section 1240.3.
   (3) For Item 6110-195-0001, the item shall exclude moneys that are
required to fund awards for teachers that have previously met the
requirements necessary to obtain these awards, until the award is
paid in full.
   (4) For Item 6110-266-0001, a county office of education shall
conduct at least one site visit to each of the required schoolsites
pursuant to Section 1240 and shall fulfill all of the duties set
forth in Sections 1240 and 44258.9.
   (5) For Item 6110-198-0001, a school district or county office of
education that operates the child care component of the Cal-SAFE
program shall comply with paragraphs (5) and (6) of subdivision (c)
of Section 54746.
   (f) This section does not invalidate any state law pertaining to
teacher credentialing requirements or the functions that require
credentials.
  SEC. 16.  Section 42606 is added to the Education Code, to read:
   42606.  (a) A local educational agency, including a direct-funded
charter school, may apply for any state categorical program funding
included in the annual Budget Act on behalf of a school that begins
operation in the 2008-09 to the 2012-13 fiscal years, inclusive, but
only to the extent the school or local educational agency is eligible
for funding and meets the provisions of the program that were in
effect as of January 1, 2009, except that charter schools shall not
apply for any of the programs contained in 47634.4.
   (b) A local educational agency that establishes a new school by
redirecting enrollment from its existing schools to the new school
shall not be eligible to receive funding in addition to the amounts
allocated pursuant to Section 42605 for the categorical programs
specified in that section or for the class size reduction program
pursuant to Sections 52122 and 52124.
   (c) The Superintendent shall report the number of new schools and
the programs that these schools are applying for, including an
estimate of the cost for that year. This information shall by
reported by November 11, 2009, and each fiscal year thereafter, to
the appropriate Committees of the Legislature, the Legislative
Analyst's Office, and the Department of Finance.
  SEC. 17.  Section 44259 of the Education Code is amended to read:
   44259.  (a) Except as provided in subparagraphs (A) and (C) of
paragraph (3) of subdivision (b), each program of professional
preparation for multiple or single subject teaching credentials shall
not include more than one year of, or the equivalent of one-fifth of
a five-year program in, professional preparation.
   (b) The minimum requirements for the preliminary multiple or
single subject teaching credential are all of the following:
   (1) A baccalaureate degree or higher degree from a regionally
accredited institution of postsecondary education. Except as provided
in subdivision (c) of Section 44227, the baccalaureate degree shall
not be in professional education. The commission shall encourage
accredited institutions to offer undergraduate minors in education
and special education to students who intend to become teachers.
   (2) Passage of the state basic skills examination that is
developed and administered by the commission pursuant to Section
44252.5.
   (3) Satisfactory completion of a program of professional
preparation that has been accredited by the committee on
accreditation on the basis of standards of program quality and
effectiveness that have been adopted by the commission. In accordance
with the commission's assessment and performance standards, each
program shall include a teaching performance assessment as set forth
in Section 44320.2 which is aligned with the California Standards for
the Teaching Profession. The commission shall ensure that each
candidate recommended for a credential or certificate has
demonstrated satisfactory ability to assist pupils to meet or exceed
state content and performance standards for pupils adopted pursuant
to subdivision (a) of Section 60605. Programs that meet this
requirement for professional preparation shall include any of the
following:
   (A) Integrated programs of subject matter preparation and
professional preparation pursuant to subdivision (a) of Section
44259.1.
   (B) Postbaccalaureate programs of professional preparation,
pursuant to subdivision (b) of Section 44259.1.
   (C) Internship programs of professional preparation, pursuant to
Section 44321, Article 7.5 (commencing with Section 44325), Article
11 (commencing with Section 44380), and Article 3 (commencing with
Section 44450) of Chapter 3.
   (4) Study of alternative methods of developing English language
skills, including the study of reading as described in subparagraphs
(A) and (B), among all pupils, including those for whom English is a
second language, in accordance with the commission's standards of
program quality and effectiveness. The study of reading shall meet
the following requirements:
   (A) Commencing January 1, 1997, satisfactory completion of
comprehensive reading instruction that is research-based and includes
all of the following:
   (i) The study of organized, systematic, explicit skills including
phonemic awareness, direct, systematic, explicit phonics, and
decoding skills.
   (ii) A strong literature, language, and comprehension component
with a balance of oral and written language.
   (iii) Ongoing diagnostic techniques that inform teaching and
assessment.
   (iv) Early intervention techniques.
   (v) Guided practice in a clinical setting.
   (B) For the purposes of this section, "direct, systematic,
explicit phonics" means phonemic awareness, spelling patterns, the
direct instruction of sound/symbol codes and practice in connected
text and the relationship of direct, systematic, explicit phonics to
the components set forth in clauses (i) to (v), inclusive.
   A program for the multiple subjects credential also shall include
the study of integrated methods of teaching language arts.
   (5) Completion of a subject matter program that has been approved
by the commission on the basis of standards of program quality and
effectiveness pursuant to Article 6 (commencing with Section 44310)
or passage of a subject matter examination pursuant to Article 5
(commencing with Section 44280). The commission shall ensure that
subject matter standards and examinations are aligned with the state
content and performance standards for pupils adopted pursuant to
subdivision (a) of Section 60605.
   (6) Demonstration of a knowledge of the principles and provisions
of the Constitution of the United States pursuant to Section 44335.
   (7) Commencing January 1, 2000, demonstration, in accordance with
the commission's standards of program quality and effectiveness, of
basic competency in the use of computers in the classroom as
determined by one of the following:
   (A) Successful completion of a commission-approved program or
course.
   (B) Successful passage of an assessment that is developed,
approved, and administered by the commission.
   (c) The minimum requirements for the professional clear multiple
or single subject teaching credential shall include all of the
following requirements:
   (1) Possession of a valid preliminary teaching credential, as
prescribed in subdivision (b), possession of a valid equivalent
credential or certificate, or completion of equivalent requirements
as determined by the commission.
   (2) Except as provided in paragraph (3), completion of a program
of beginning teacher induction, including one of the following:
   (A) A program of beginning teacher support and assessment approved
by the commission and the Superintendent pursuant to Section
44279.1, a provision of the Marian Bergeson Beginning Teacher Support
and Assessment System.
   (B) An alternative program of beginning teacher induction that is
provided by one or more local educational agencies and has been
approved by the commission and the Superintendent on the basis of
initial review and periodic evaluations of the program in relation to
appropriate standards of credential program quality and
effectiveness that have been adopted by the commission, the
Superintendent, and the state board pursuant to this subdivision. The
standards for alternative programs shall encourage innovation and
experimentation in the continuous preparation and induction of
beginning teachers. Any alternative program of beginning teacher
induction that has met state standards pursuant to this subdivision
may apply for state funding pursuant to Sections 44279.1 and 44279.2.

   (C) An alternative program of beginning teacher induction that is
sponsored by a regionally accredited college or university, in
cooperation with one or more local school districts, that addresses
the individual professional needs of beginning teachers and meets the
commission's standards of induction. The commission shall ensure
that preparation and induction programs that qualify candidates for
professional credentials extend and refine each beginning teacher's
professional skills in relation to the California Standards for the
Teaching Profession and the standards of pupil performance adopted
pursuant to Section 60605.
   (3) (A) If a candidate satisfies the requirements of subdivision
(b), including completion of an accredited internship program of
professional preparation, and if that internship program fulfills
induction standards and is approved as set forth in this subdivision,
the commission shall determine that the candidate has fulfilled the
requirements of paragraph (2).
   (B) If an approved induction program is verified as unavailable to
a beginning teacher, or if the beginning teacher is required under
the federal No Child Left Behind Act of 2001 (20 U.S.C. Sec. 6301 et
seq.) to complete subject matter coursework to be qualified for a
teaching assignment, the commission shall accept completion of an
approved fifth-year program after completion of a baccalaureate
degree at a regionally accredited institution as fulfilling the
requirements of paragraph (2). The commission shall adopt regulations
to implement this subparagraph.
   (4) Experience that includes the application of knowledge and
skills previously acquired in a preliminary credential program, in
accordance with commission standards, that addresses the following:
   (A) Health education, including study of nutrition,
cardiopulmonary resuscitation, and the physiological and sociological
effects of abuse of alcohol, narcotics, and drugs and the use of
tobacco. Training in cardiopulmonary resuscitation shall also meet
the standards established by the American Heart Association or the
American Red Cross.
   (B) Field experience in methods of delivering appropriate
educational services to pupils with exceptional needs in regular
education programs.
   (C) Advanced computer-based technology, including the uses of
technology in educational settings.
   (d) The commission shall develop and implement standards of
program quality and effectiveness that provide for the areas of
application listed in subparagraphs (A) to (C), inclusive, of
paragraph (4) of subdivision (c), starting in professional
preparation and continuing through induction.
   (e) A credential that was issued prior to January 1, 1993, shall
remain in force as long as it is valid under the laws and regulations
that were in effect on the date it was issued. The commission may
not, by regulation, invalidate an otherwise valid credential, unless
it issues to the holder of the credential, in substitution, a new
credential authorized by another provision in this chapter that is no
more restrictive than the credential for which it was substituted
with respect to the kind of service authorized and the grades,
classes, or types of schools in which it authorizes service.
   (f) A credential program that is approved by the commission may
not deny an individual access to that program solely on the grounds
that the individual obtained a teaching credential through completion
of an internship program when that internship program has been
accredited by the commission.
   (g) Notwithstanding this section, persons who were performing
teaching services as of January 1, 1999, pursuant to the language of
this section that was in effect prior to that date, may continue to
perform those services without complying with any requirements that
may be added by the amendments adding this subdivision.
   (h) Subparagraphs (A) and (B) of paragraph (4) of subdivision (b)
do not apply to any person who, as of January 1, 1997, holds a
multiple or single subject teaching credential, or to any person
enrolled in a program of professional preparation for a multiple or
single subject teaching credential as of January 1, 1997, who
subsequently completes that program. It is the intent of the
Legislature that the requirements of subparagraphs (A) and (B) of
paragraph (4) of subdivision (b) be applied only to persons who enter
a program of professional preparation on or after January 1, 1997.
  SEC. 18.  Section 45023.1 of the Education Code is amended to read:

   45023.1.  (a) Commencing with the 2000-01 fiscal year, the
governing board of a school district, the county superintendent of
schools, or the county board of education may increase, for teachers
meeting the requirements prescribed by this section, the salary on
its adopted certificated employee salary schedule as provided in
subdivision (b). For purposes of this section, a teacher for whom the
governing board, county superintendent of schools, or county board
of education may increase salaries shall meet all of the following
criteria:
   (1) Hold a valid California teaching credential, not including an
emergency permit, intern certificate or credential, or waiver.
   (2) Possess a baccalaureate or higher degree.
   (3) Receive a salary paid through the general fund of the district
or county office.
   (b) The governing board, county superintendent of schools, or
county board of education that increases its salaries pursuant to
subdivision (a) shall perform the following computations:
   (1) The governing board, county superintendent of schools, or
county board of education shall designate as the lowest salary on the
salary schedule for a certificated employee meeting the criteria in
subdivision (a) an amount that is at least an annual salary of
thirty-four thousand dollars ($34,000) in the 2000-01 fiscal year.
   (2) The governing board, county superintendent of schools, or
county board of education shall increase to the annual salary amount
in paragraph (1) the salary of any certificated employee meeting the
criteria in subdivision (a) whose salary on the salary schedule for
the 1999-2000 fiscal year was less than the amount computed in
paragraph (1) and, notwithstanding Section 45028, shall incorporate
that increase into the salary schedule commencing with the 2000-01
fiscal year.
   (c) Each school district or county office of education that
increases its beginning teacher annual minimum salary to thirty-four
thousand dollars ($34,000) pursuant to subdivision (b) shall elect,
except as provided in subdivision (j), to receive reimbursement for
the cost of the increase pursuant to only one of the following two
options:
   (1) Option One:
   (A) In fiscal year 2000-01, a school district, county
superintendent of schools, or county office of education that
increases salaries pursuant to paragraph (2) of subdivision (b) and
selects reimbursement Option One shall receive an amount equal to six
dollars ($6) times the district's or county office's second
principal apportionment average daily attendance for the 1999-2000
fiscal year, excluding attendance in adult education programs and
charter schools participating in the charter school block grant
pursuant to Article 2 (commencing with Section 47633) of Chapter 6 of
Part 26.8.
   (B) Divide the amount received from the state pursuant to
subparagraph (A) for the 2000-01 fiscal year by the school district
or county office of education second principal apportionment average
daily attendance for the 1999-2000 fiscal year, excluding attendance
in adult education programs and charter schools participating in the
charter school block grant pursuant to Article 2 (commencing with
Section 47633) of Chapter 6 of Part 26.8.
   (C) For the 2001-02 fiscal year and each fiscal year thereafter,
for each school district that increases its salaries pursuant to
subdivision (a), the Superintendent shall sum the results of
paragraphs (i) and (ii) and add that figure to the total school
district revenue limit computed pursuant to Section 42238:
   (i) Annually increase the funding rate per unit of average daily
attendance specified in subparagraph (B) by the percentage increase
pursuant to subdivision (b) of Section 42238.1 and multiply the
resulting product by the school district's second principal
apportionment average daily attendance for the current fiscal year
excluding attendance in regional occupational centers/programs, adult
education programs, and charter schools participating in the charter
school block grant pursuant to Article 2 (commencing with Section
47633) of Chapter 6 of Part 26.8.
   (ii) Annually increase the funding rate per unit of average daily
attendance specified in subparagraph (B) by the percentage increase
pursuant to subdivision (b) of Section 42238.1 and multiply the
resulting product by the school district's second principal
apportionment average daily attendance for the current fiscal year in
regional occupational centers/programs excluding attendance in
charter schools participating
   in the charter school block grant pursuant to Article 2
(commencing with Section 47633) of Chapter 6 of Part 26.8.
   (D) For the 2001-02 fiscal year and each fiscal year thereafter,
for each county office of education that increases its salaries
subdivision (a), the Superintendent shall add the sum of paragraphs
(i) and (ii) to the county office of education revenue limit computed
pursuant to Section 2550:
   (i) Annually increase the funding rate per unit of average daily
attendance specified in subparagraph (B) by the percentage increase
identified pursuant to Section 2557 and multiply the resulting
product by the county office of education's second principal
apportionment average daily attendance for the current fiscal year
excluding attendance in regional occupational centers/programs, adult
education programs, and charter schools participating in the charter
school block grant pursuant to Article 2 (commencing with Section
47633) of Chapter 6 of Part 26.8.
   (ii) Annually increase the funding rate per unit of average daily
attendance specified in subparagraph (B) by the percentage increase
identified pursuant to Section 2557 and multiply the resulting
product by the county office of education's second principal
apportionment average daily attendance for the current fiscal year in
regional occupational centers/programs excluding attendance in
charter schools participating in the charter school block grant
pursuant to Article 2 (commencing with Section 47633) of Chapter 6 of
Part 26.8.
   (E) The school district, county superintendent of schools, or
county office of education shall utilize these incentive funds not
only to meet the new beginning teacher annual minimum salary of
thirty-four thousand dollars ($34,000), but may also use the funds to
generally enhance teachers' salaries in order to achieve the goals
of retention of qualified, competent, and experienced teachers and
the attainment of a reasonable salary commensurate with a teacher's
experience, education, and responsibilities.
   (2) Option Two: A school district, county superintendent of
schools, or county office of education may submit a request to the
Superintendent, on a form supplied by the Superintendent, for state
funding computed as follows:
   (A) Total the salaries of all certificated employees receiving
increased salaries up to a maximum of thirty-four thousand dollars
($34,000) per person pursuant to subdivision (b) for the 2000-01
fiscal year.
   (B) Total all salaries, based on the salary schedule for the
2000-01 fiscal year before the increase made pursuant to subdivision
(b), of all certificated employees receiving increased salaries
pursuant to subdivision (b).
   (C) Subtract the amount in subparagraph (B) from the amount in
subparagraph (A).
   (D) Multiply the amount in subparagraph (C) by the district's
statutory benefit rates.
   (E) For the 2000-01 fiscal year, a school district, county
superintendent of schools, or county office of education that
increases salaries pursuant to paragraph (2) of subdivision (b) and
selects reimbursement Option Two shall receive the sum of paragraphs
(C) and (D).
   (F) Divide the sum of the amounts received pursuant to paragraphs
(C) and (D) for the 2000-01 fiscal year by the school district and
county office of education average daily attendance for the second
principal apportionment for the 2000-01 fiscal year, excluding
attendance in adult education programs and charter schools
participating in the charter school block grant pursuant to Article 2
(commencing with Section 47633) of Chapter 6 of Part 26.8.
   (G) For the 2001-02 fiscal year and each fiscal year thereafter,
for each school district that increases its salaries pursuant to
subdivision (a), the Superintendent shall sum the results of
paragraphs (i) and (ii) and add that figure to the total school
district revenue limit computed pursuant to Section 42238:
   (i) Annually increase the funding rate per unit of average daily
attendance calculated pursuant to subparagraph (F) by the percentage
increase pursuant to subdivision (b) of Section 42238.1 and multiply
the resulting product by the school district's second principal
apportionment average daily attendance for the current fiscal year
excluding attendance in regional occupational centers/programs, adult
education programs, and charter schools participating in the charter
school block grant pursuant to Article 2 (commencing with Section
47633) of Chapter 6 of Part 26.8.
   (ii) Annually increase the funding rate per unit of average daily
attendance calculated pursuant to subparagraph (F) by the percentage
increase pursuant to subdivision (b) of Section 42238.1 and multiply
the resulting product by the school district's second principal
apportionment average daily attendance for the current fiscal year in
regional occupational centers/programs excluding attendance in
charter schools participating in the charter school block grant
pursuant to Article 2 (commencing with Section 47633) of Chapter 6 of
Part 26.8.
   (H) For the 2001-02 fiscal year and each fiscal year thereafter,
for each county office of education that increases its salaries
subdivision (a), the Superintendent shall add the sum of paragraphs
(i) and (ii) to the county office of education revenue limit computed
pursuant to Section 2550:
   (i) Annually increase the funding rate per unit of average daily
attendance calculated pursuant to subparagraph (F) by the percentage
increase identified pursuant to Section 2557 and multiply the
resulting product by the county office of education's second
principal apportionment average daily attendance for the current
fiscal year excluding attendance in regional occupational
centers/programs, adult education programs, and charter schools
participating in the charter school block grant pursuant to Article 2
(commencing with Section 47633) of Chapter 6 of Part 26.8.
   (ii) Annually increase the funding rate per unit of average daily
attendance calculated pursuant to subparagraph (F) by the percentage
increase identified pursuant to Section 2557 and multiply the
resulting product by the county office of education's second
principal apportionment average daily attendance for the current
fiscal year in regional occupational centers/programs excluding
attendance in charter schools participating in the charter school
block grant pursuant to Article 2 (commencing with Section 47633) of
Chapter 6 of Part 26.8.
   (3) For purposes of the calculation required by clause (ii) of
subparagraph (C) of paragraph (1), clause (ii) of subparagraph (D) of
paragraph (1), clause (ii) of subparagraph (G) of paragraph (2), and
clause (ii) of subparagraph (H) of paragraph (2), in the 2008-09,
2009-10, 2010-11, 2011-12, and 2012-13 fiscal years, a school
district's and county office of education's second principal
apportionment average daily attendance for the current fiscal year
shall be the second principal apportionment average daily attendance
for the 2007-08 fiscal year.
   (d) State funds received pursuant to this section and not used
pursuant to the conditions of this section shall be returned to the
state.
   (e) If the funds requested by the school districts, the county
superintendents of schools, and the county offices of education for
the 2000-01 fiscal year exceed the state appropriation for this
section, the Superintendent shall reduce all requests by the
application of a single, common percentage factor for apportionment
purposes, so as not to exceed the amount appropriated for this
purpose.
   (f) A school district or county office of education shall receive
reimbursement pursuant to subdivision (c) only. However, this section
does not prohibit a school district and its employees from
negotiating salary schedules.
   (g) The adjustments to school district and county office of
education revenue limits prescribed in subparagraphs (C) and (D) of
paragraph (1) of subdivision (c) and subparagraphs (G) and (H) of
paragraph (2) of subdivision (c), respectively, shall continue so
long as the increase in the salary schedule made pursuant to
paragraph (2) of subdivision (b) or subdivision (i) is maintained.
   (h) The Superintendent shall issue appropriate forms to school
districts and county offices of education no later than September 1,
2000. School districts, county superintendents of schools, or county
offices of education shall notify the Superintendent no later than
September 30, 2001, regarding which option they wish to exercise for
the 2000-01 fiscal year. School districts, county superintendents of
schools, or county offices of education shall file their claim form
for state funds with the Superintendent no later than September 30,
2001.
   (i) Adjustments made to school district or county office of
education revenue limits pursuant to subparagraphs (C) and (D) of
paragraph (1) of subdivision (c) and subparagraphs (G) and (H) of
paragraph (2) of subdivision (c), respectively, shall not be
considered part of the base revenue limit for the purpose of
computing equalization adjustments or determining other
wealth-related differences in school funding.
   (j) Notwithstanding subdivision (c), a school district or county
office of education that already has as the annual minimum salary for
beginning teachers who meet the criteria in subdivision (a) in an
amount equal to or greater than thirty-four thousand dollars
($34,000) shall be eligible to receive reimbursement pursuant to
Option One.
  SEC. 19.  Section 45023.4 of the Education Code is amended to read:

   45023.4.  (a) This section shall be known, and may be cited, as
the Jack O'Connell Beginning-Teacher Salary Incentive Program.
Commencing in the 1999-2000 fiscal year the governing board of a
school district, the county superintendent of schools, or the county
board of education may increase, for teachers who meet the
requirements of this subdivision, the salary on its adopted
certificated employee salary schedule as provided in subdivision (b).
A school district that elects to meet the requirements of this
section shall be eligible to receive the incentive amount provided by
subdivision (c). For purposes of this section, a teacher for whom
the governing board, county superintendent of schools, or county
board of education may increase salaries shall meet all of the
following criteria:
   (1) Hold a valid California teaching credential, not including an
emergency permit, intern permit, or waiver.
   (2) Possess a baccalaureate or higher degree.
   (3) Receive a salary paid from the general fund of the district or
county office.
   (b) The governing board, county superintendent of schools, or
county board of education that elects to increase teachers' salaries
as authorized pursuant to subdivision (a) shall perform the following
computations:
   (1) The governing board, county superintendent of schools, or
county board of education shall designate as the lowest salary on the
salary schedule for a certificated employee meeting or exceeding the
criteria in subdivision (a) an amount equal to a minimum annual
salary of thirty-two thousand dollars ($32,000). If this salary
change results in costs to the school district or county office of
education that are equal to or greater than the incentive received
pursuant to subdivision (c), the minimum salary shall be thirty-two
thousand dollars ($32,000). If this salary change results in costs to
the school districts or county offices of education that are less
than the incentive received, the remainder shall be used to increase
the beginning salary by an amount above thirty-two thousand dollars
($32,000) which fully applies the incentive received.
   (2) The governing board, county superintendent of schools, or
county board of education shall increase to the annual salary amount
in paragraph (1) the salary of a certificated employee meeting the
criteria in subdivision (a) whose salary on the salary schedule is
less than the amount computed in paragraph (1) and, notwithstanding
Section 45028, shall incorporate that increase into the salary
schedule.
   (3) The newly adopted salary schedule shall contain only one cell
that meets the amount set forth in paragraph (1), which most often is
the first-year step of a salary schedule column for certificated
personnel who meet the criteria set forth in subdivision (a). All
other salary schedule cells shall exceed the level set forth in
paragraph (1) for personnel that meet the criteria in subdivision
(a).
   (c) In the 1999-2000 fiscal year, the Superintendent shall divide
the amount appropriated for the purposes of this section by the
1998-99 second principal apportionment average daily attendance for
all school districts and county offices of education in the state.
Each school district and county office of education that certifies to
the Superintendent that it is in full compliance with this section
shall receive following that certification an amount equal to the
results of the calculation multiplied by the participating school
district's or county office's 1998-99 second principal apportionment
average daily attendance.
   (d) For the 2000-01 fiscal year and each fiscal year thereafter,
for each school district that meets the requirements of subdivision
(b), the Superintendent shall sum the results of paragraphs (1) and
(2) and add that figure to the total school district revenue limit
computed pursuant to Section 42238.
   (1) Annually increase the statewide average funding rate per unit
of average daily attendance calculated pursuant to subdivision (c) by
the percentage increase computed pursuant to subdivision (b) of
Section 42238.1 and multiply the resulting product by the school
district's second period average daily attendance for the prior
fiscal year excluding attendance in regional occupational centers and
programs, adult education programs, and charter schools
participating in the charter school block grant pursuant to Article 2
(commencing with Section 47633) of Chapter 6 of Part 26.8.
   (2) Annually increase the statewide average funding rate per unit
of average daily attendance calculated pursuant to subdivision (c) by
the percentage increase computed pursuant to subdivision (b) of
Section 42238.1 and multiply the resulting product by the school
district's second period average daily attendance for the prior
fiscal year in regional occupational centers and programs, excluding
attendance in charter schools participating in the charter school
block grant pursuant to Article 2 (commencing with Section 47633) of
Chapter 6 of Part 26.8.
   (3) For purposes of the calculation required by paragraph (2), in
the 2008-09, 2009-10, 2010-11, 2011-12, and 2012-13 fiscal years, the
second period average daily attendance for the prior fiscal year
shall be the second period average daily attendance for the 2007-08
fiscal year.
   (e) For the 2000-01 fiscal year and each fiscal year thereafter,
for each county office of education that meets the requirements of
subdivision (b), the Superintendent shall add the sum of paragraphs
(1) and (2) to the county office of education revenue limit computed
pursuant to Section 2550.
   (1) Annually increase the statewide average funding rate per unit
of average daily attendance calculated pursuant to subdivision (c) by
the percentage increase identified pursuant to Section 2557 and
multiply the resulting product by the county office of education's
second period average daily attendance for the prior fiscal year
excluding attendance in regional occupational centers or programs,
adult education programs, and charter schools participating in the
charter school block grant pursuant to Article 2 (commencing with
Section 47633) of Chapter 6 of Part 26.8.
   (2) Annually increase the statewide average funding rate per unit
of average daily attendance calculated pursuant to subdivision (c) by
the percentage increase identified pursuant to Section 2557 and
multiply the resulting product by the county office of education's
second period average daily attendance for the prior fiscal year in
regional occupational centers or programs excluding attendance in
charter schools participating in the charter school block grant
pursuant to Article 2 (commencing with Section 47633) of Chapter 6 of
Part 26.8.
   (3) For purposes of the calculation required by paragraph (2), in
the 2008-09, 2009-10, 2010-11, 2011-12, and 2012-13 fiscal years, the
second period average daily attendance for the prior fiscal year
shall be the second period average daily attendance for the 2007-08
fiscal year.
   (f) The adjustment to the school district and county office of
education revenue limit prescribed in subdivisions (d) and (e) shall
continue so long as the increase in the salary schedule made pursuant
to paragraph (2) of subdivision (b) is maintained.
   (g) The adjustment made to school district or county office of
education revenue limits pursuant to subdivisions (d) and (e) shall
not be considered part of the base revenue limit for purposes of
computing equalization adjustments or determining other differences
in school funding that are based on the amount of funding received by
a school district or county office of education.
   (h) This section does not prohibit a school district and its
employees from negotiating salary schedules.
  SEC. 20.  Section 46010.2 of the Education Code is amended to read:

   46010.2.  (a) For the purpose of determining "changes in
enrollment" pursuant to subdivision (b) of Section 8 of Article XVI
of the California Constitution, as required by subdivision (d) of
Section 41204, the total days of attendance by pupils in schools and
classes maintained by a school district shall, in the 1997-98 fiscal
year, be separately determined both as if subdivision (b) of Section
46010, as it read in the 1997-98 fiscal year, did and did not apply.
The days of attendance figure resulting from the application of
subdivision (b) of Section 46010 shall be used in calculating average
daily attendance for comparison with average daily attendance in the
1996-97 fiscal year. The days of attendance figure determined
without applying subdivision (b) of Section 46010 shall be used in
calculating average daily attendance for comparison with average
daily attendance in the 1998-99 fiscal year.
   (b) For the purpose of determining "changes in enrollment" for the
2008-09 fiscal year pursuant to subdivision (b) of Section 8 of
Article XVI of the California Constitution, as required by
subdivision (d) of Section 41204, the total days of attendance by
pupils in schools and classes maintained by a school district, in the
2007-08 fiscal year, shall be separately determined both as if the
California School Age Families Education Program (Cal-SAFE), as set
forth in Article 7.1 (commencing with Section 54740) of Chapter 9 of
Part 29, as it read on January 1, 2008, did and did not apply. The
days of attendance figure resulting from the application of the
Cal-SAFE program shall be used in calculating average daily
attendance for comparison with average daily attendance in the
2006-07 fiscal year. The days of attendance figure determined without
applying the Cal-SAFE program shall be used in calculating average
daily attendance for comparison with average daily attendance in the
2008-09 fiscal year.
  SEC. 21.  Section 46201.2 is added to the Education Code, to read:
   46201.2.  (a) Commencing with the 2009-10 school year and
continuing through the 2012-13 school year, a school district, county
office of education, or charter school may reduce the equivalent of
up to five days of instruction or the equivalent number of
instructional minutes without incurring the penalties set forth in
Sections 41420, 46200, 46200.5, 46201, 46201.5, 46202, and 47612.5. A
school district, county office of education, or charter school shall
receive revenue limit funding based on the adjustments prescribed
pursuant to Section 42238.146 whether or not it reduces the number of
schooldays or instructional minutes.
   (b) This section shall become inoperative on July 1, 2013, and, as
of January 1, 2014, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2014, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 22.  Section 47614.5 of the Education Code is amended to read:

   47614.5.  (a) The Charter School Facility Grant Program is hereby
established and shall be administered by the department. The grant
program is intended to provide assistance with facilities rent and
lease costs for pupils in charter schools.
   (b) Subject to the annual Budget Act, eligible schools shall
receive an amount of up to, but not more than, seven hundred fifty
dollars ($750) per unit of average daily attendance, as certified at
the second principal apportionment, to provide an amount of up to,
but not more than, 75 percent of the annual facilities rent and lease
costs for the charter school. In any fiscal year, if the funds
appropriated for the purposes of this section by the annual Budget
Act are insufficient to fund the approved amounts fully, the
Superintendent shall apportion the available funds on a pro rata
basis.
   (c) For purposes of this section, the department shall do all of
the following:
   (1) Inform charter schools of the grant program.
   (2) Upon application by a charter school, determine eligibility,
based on the geographic location of the charter schoolsite, pupil
eligibility for free or reduced price meals, and a preference in
admissions, as appropriate. Eligibility for funding shall not be
limited to the grade level or levels served by the school whose
attendance area is used to determine eligibility. Charter schoolsites
are eligible for funding pursuant to this section if the charter
schoolsite meets either of the following conditions:
   (A) The charter schoolsite is physically located in the attendance
area of a public elementary school in which 70 percent or more of
the pupil enrollment is eligible for free or reduced priced meals and
the schoolsite gives a preference in admissions to pupils who are
currently enrolled in that public elementary school and to pupils who
reside in the elementary school attendance area where the charter
schoolsite is located.
   (B) Seventy percent or more of the pupil enrollment at the charter
schoolsite is eligible for free or reduced price meals.
   (3) Inform charter schools of their grant eligibility.
   (4) Allocate funding to charter schools for eligible expenditures
in a timely manner.
   (5) No later than June 30, 2005, report to the Legislature on the
number of charter schools that have participated in the grant program
pursuant to the expanded eligibility prescribed in paragraph (2). In
addition, the report shall provide recommendations and suggestions
on improving the grant program.
   (d) Funds appropriated for purposes of this section shall not be
apportioned for any of the following:
   (1) Units of average daily attendance generated through
nonclassroom-based instruction as defined by paragraph (2) of
subdivision (d) of Section 47612.5 or that does not comply with
conditions or limitations set forth in regulations adopted by the
state board pursuant to this section.
   (2) Charter schools occupying existing school district or county
office of education facilities.
   (3) Charter schools receiving reasonably equivalent facilities
from their chartering authority pursuant to Section 47614.
   (e) Funds appropriated for purposes of this section shall be used
for costs associated with facilities rents and leases, consistent
with the definitions used in the California School Accounting Manual.
These funds also may be used for costs, including, but not limited
to, costs associated with remodeling buildings, deferred maintenance,
initially installing or extending service systems and other built-in
equipment, and improving sites.
   (f) If an existing charter school located in an elementary
attendance area in which less than 50 percent of pupil enrollment is
eligible for free or reduced price meals relocates to an attendance
area identified in paragraph (2) of subdivision (c), admissions
preference shall be given to pupils who reside in the elementary
school attendance area into which the charter school is relocating.
   (g) The Superintendent annually shall report to the state board
regarding the use of funds that have been made available during the
fiscal year to each charter school pursuant to the grant program.
   (h) It is the intent of the Legislature that not less than
eighteen million dollars ($18,000,000) annually be appropriated for
purposes of the grant program on the same basis as other elementary
and secondary education categorical programs.
   (i) Commencing with the 2009-10 fiscal year, the Superintendent
shall annually allocate the facilities grants to eligible charter
schools no later than October 1 of each fiscal year. However, the
department shall first use the funding appropriated for this program
in the 2009-10 fiscal year to reimburse eligible charter schools for
rent or lease costs for the 2008-09 fiscal year, consistent with this
section as it read on June 30, 2009.
  SEC. 23.  Section 47634.1 of the Education Code is amended to read:

   47634.1.  (a) Notwithstanding subdivision (a) of Section 47634, a
categorical block grant for charter schools for the 2005-06 fiscal
year shall be calculated as follows:
   (1) The Superintendent shall divide the total amount of funding
appropriated for the purpose of this block grant in the annual Budget
Act or another statute, less the total amount calculated in
paragraph (2), by the statewide total of charter school average daily
attendance, as determined at the second principal apportionment for
the 2005-06 fiscal year.
   (2) The statewide average amount, as computed by the
Superintendent, of funding per identified educationally disadvantaged
pupil received by school districts in the current fiscal year
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29. This amount shall be multiplied by the number of
educationally disadvantaged pupils enrolled in the charter school.
The resulting amount, if greater than zero, may not be less than the
minimum amount of Economic Impact Aid funding to which a school
district of similar size would be entitled pursuant to Section 54022.
For purposes of this subdivision, a pupil who is eligible for
subsidized meals pursuant to Section 49552 and is identified as an
English learner pursuant to subdivision (a) of Section 306 shall
count as two pupils.
   (3) For each charter school, the Superintendent shall multiply the
amount calculated in paragraph (1) by the school's average daily
attendance as determined at the second principal apportionment for
the 2005-06 fiscal year.
                         (4) The Superintendent shall add the amounts
computed in paragraphs (2) and (3). The resulting amount shall be
the charter school categorical block grant that the Superintendent
shall apportion to each charter school from funds appropriated for
this purpose in the annual Budget Act or another statute. The
Superintendent shall allocate an advance payment of this grant as
early as possible, but no later than October 31, 2005, based on prior
year average daily attendance as determined at the second principal
apportionment or, for a charter school in its first year of operation
that commences instruction on or before September 30, 2005, on
estimates of average daily attendance for the current fiscal year
determined pursuant to Section 47652.
   (b) (1) For the 2006-07 fiscal year, the categorical block grant
allocated by the Superintendent for charter schools shall be four
hundred dollars ($400) per unit of charter school average daily
attendance as determined at the second principal apportionment for
the 2006-07 fiscal year. This amount shall be supplemented by the
amount calculated in paragraph (2).
   (2) The statewide average amount, as computed by the
Superintendent, of funding per economic impact aid-eligible pupil
count received by school districts in the current fiscal year,
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29, shall be multiplied by the number of economic impact
aid-eligible pupils enrolled in the charter school. The resulting
amount, if greater than zero, may not be less than the minimum amount
of Economic Impact Aid funding to which a school district of similar
size would be entitled pursuant to Section 54022.
   (c) (1) For the 2007-08 fiscal year, the categorical block grant
allocated by the Superintendent for charter schools shall be five
hundred dollars ($500) per unit of charter school average daily
attendance as determined at the second principal apportionment for
the 2007-08 fiscal year. For each fiscal year thereafter, this per
unit amount shall be adjusted for the cost-of-living adjustment, as
determined pursuant to Section 42238.1, for that fiscal year. This
amount shall be supplemented in the 2007-08 fiscal year and each
fiscal year thereafter by the amount calculated in paragraph (2).
   (2) The statewide average amount, as computed by the
Superintendent, of funding per economic impact aid-eligible pupil
count received by school districts in the current year, pursuant to
Article 2 (commencing with Section 54020) of Chapter 1 of Part 29,
shall be multiplied by the number of economic impact aid-eligible
pupils enrolled in the charter school. The resulting amount, if
greater than zero, may not be less than the minimum amount of
Economic Impact Aid funding to which a school district of similar
size would be entitled pursuant to Section 54022.
   (d) It is the intent of the Legislature to fully fund the
categorical block grant for charter schools as specified in this
section and to appropriate additional funding that may be needed in
order to compensate for unanticipated increases in average daily
attendance and counts of economic impact aid-eligible pupils,
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29, in charter schools. In any fiscal year in which the
department identifies a deficiency in the categorical block grant,
the department shall identify the available balance for programs that
count towards meeting the requirements of Section 8 of Article XVI
of the California Constitution and have unobligated funds for the
year.
   (e) For the purposes of this section, a funding deficiency shall
be strictly limited to unanticipated increases in average daily
attendance and counts of economic impact aid-eligible pupils. In no
event shall additional funding be provided to restore reductions made
to categorical programs pursuant to Control Section 12.42 of an
annual Budget Act.
   (f) On or before July 1, the department shall provide the
Department of Finance with a list of those programs and their
available balances, and the amount of the deficiency, if any, in the
categorical block grant. Within 45 days of the receipt of a
notification of deficiency, the Director of Finance shall verify the
amount of the deficiency in the categorical block grant and direct
the Controller to transfer an amount, equal to the lesser of the
amount available or the amount needed to fully fund the categorical
block grant, from those programs to the categorical block grant. The
Department of Finance shall notify the Joint Legislative Budget
Committee within 30 days of any transfer made pursuant to this
section.
   (g) Commencing October 1, 2007, the Legislative Analyst's Office
shall triennially convene a work group to review, commencing with
appropriations proposed for the 2008-09 fiscal year, the
appropriateness of the funding level provided by the categorical
block grant established in this section.
   (h) Categorical block grant funding may be used for any purpose
determined by the governing body of the charter school.
   (i) This section shall become inoperative on July 1, 2013, and, as
of January 1, 2014, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2014, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 24.  Section 47634.1 is added to the Education Code, to read:
   47634.1.  (a) Notwithstanding subdivision (a) of Section 47634, a
categorical block grant for charter schools for the 2005-06 fiscal
year shall be calculated as follows:
   (1) The Superintendent shall divide the total amount of funding
appropriated for the purpose of this block grant in the annual Budget
Act or another statute, less the total amount calculated in
paragraph (2), by the statewide total of charter school average daily
attendance, as determined at the second principal apportionment for
the 2005-06 fiscal year.
   (2) The statewide average amount, as computed by the
Superintendent, of funding per identified educationally disadvantaged
pupil received by school districts in the current fiscal year
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29. This amount shall be multiplied by the number of
educationally disadvantaged pupils enrolled in the charter school.
The resulting amount, if greater than zero, shall not be less than
the minimum amount of Economic Impact Aid funding to which a school
district of similar size would be entitled pursuant to Section 54022.
For purposes of this subdivision, a pupil who is eligible for
subsidized meals pursuant to Section 49552 and is identified as an
English learner pursuant to subdivision (a) of Section 306 shall
count as two pupils.
   (3) For each charter school, the Superintendent shall multiply the
amount calculated in paragraph (1) by the school's average daily
attendance as determined at the second principal apportionment for
the 2005-06 fiscal year.
   (4) The Superintendent shall add the amounts computed in
paragraphs (2) and (3). The resulting amount shall be the charter
school categorical block grant that the Superintendent shall
apportion to each charter school from funds appropriated for this
purpose in the annual Budget Act or another statute. The
Superintendent shall allocate an advance payment of this grant as
early as possible, but no later than October 31, 2005, based on prior
year average daily attendance as determined at the second principal
apportionment or, for a charter school in its first year of operation
that commences instruction on or before September 30, 2005, on
estimates of average daily attendance for the current fiscal year
determined pursuant to Section 47652.
   (b) (1) For the 2006-07 fiscal year, the categorical block grant
allocated by the Superintendent for charter schools shall be four
hundred dollars ($400) per unit of charter school average daily
attendance as determined at the second principal apportionment for
the 2006-07 fiscal year. This amount shall be supplemented by the
amount calculated in paragraph (2).
   (2) The statewide average amount, as computed by the
Superintendent, of funding per economic impact aid-eligible pupil
count received by school districts in the current fiscal year,
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29, shall be multiplied by the number of economic impact
aid-eligible pupils enrolled in the charter school. The resulting
amount, if greater than zero, shall not be less than the minimum
amount of Economic Impact Aid funding to which a school district of
similar size would be entitled pursuant to Section 54022.
   (c) (1) For the 2007-08 fiscal year, the categorical block grant
allocated by the Superintendent for charter schools shall be five
hundred dollars ($500) per unit of charter school average daily
attendance as determined at the second principal apportionment for
the 2007-08 fiscal year. For each fiscal year thereafter, this per
unit amount shall be adjusted for the cost-of-living adjustment, as
determined pursuant to Section 42238.1, for that fiscal year. This
amount shall be supplemented in the 2007-08 fiscal year and each
fiscal year thereafter by the amount calculated in paragraph (2).
   (2) The statewide average amount, as computed by the
Superintendent, of funding per economic impact aid-eligible pupil
count received by school districts in the current year, pursuant to
Article 2 (commencing with Section 54020) of Chapter 1 of Part 29,
shall be multiplied by the number of economic impact aid-eligible
pupils enrolled in the charter school. The resulting amount, if
greater than zero, shall not be less than the minimum amount of
Economic Impact Aid funding to which a school district of similar
size would be entitled pursuant to Section 54022.
   (d) It is the intent of the Legislature to fully fund the
categorical block grant for charter schools as specified in this
section and to appropriate additional funding that may be needed in
order to compensate for unanticipated increases in average daily
attendance and counts of economic impact aid-eligible pupils,
pursuant to Article 2 (commencing with Section 54020) of Chapter 1 of
Part 29, in charter schools. In any fiscal year in which the
department identifies a deficiency in the categorical block grant,
the department shall identify the available balance for programs that
count towards meeting the requirements of Section 8 of Article XVI
of the California Constitution and have unobligated funds for the
year. On or before July 1, the department shall provide the
Department of Finance with a list of those programs and their
available balances, and the amount of the deficiency, if any, in the
categorical block grant. Within 45 days of the receipt of a
notification of deficiency, the Director of Finance shall verify the
amount of the deficiency in the categorical block grant and direct
the Controller to transfer an amount, equal to the lesser of the
amount available or the amount needed to fully fund the categorical
block grant, from those programs to the categorical block grant. The
Department of Finance shall notify the Joint Legislative Budget
Committee within 30 days of any transfer made pursuant to this
section.
   (e) Commencing October 1, 2007, the Legislative Analyst's Office
shall triennially convene a work group to review, commencing with
appropriations proposed for the 2008-09 fiscal year, the
appropriateness of the funding level provided by the categorical
block grant established in this section.
   (f) Categorical block grant funding may be used for any purpose
determined by the governing body of the charter school.
   (g) This section shall become operative on July 1, 2013.
  SEC. 25.  Section 52055.60 is added to the Education Code, to read:

   52055.60.  (a) Notwithstanding any other law, for the 2008-09 to
the 2012-13 fiscal years, inclusive, the department and the state
board shall not prohibit a school, school district, county office of
education, or charter school identified for program improvement
pursuant to the federal No Child Left Behind Act of 2001, or a school
district or county office of education that has received a federal
corrective action sanction by the state board pursuant to subdivision
(b) of Section 52055.57, from utilizing the flexibility provisions
established in Section 42605. The department and the state board
shall not identify the funds with which sanctions or corrective
actions are to be implemented.
   (b) This section does not prohibit a school, county office of
education, or charter school that has been identified for program
improvement pursuant to the federal No Child Left Behind Act of 2001,
or a school district or county office of education sanctioned
pursuant to subdivision (c) of Section 52055.57, from implementing
sanctions imposed pursuant to paragraph (6) of subdivision (c) of
Section 52055.57.
   (c) This section shall become inoperative on July 1, 2013, and, as
of January 1, 2014, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2014, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 26.  Section 52055.770 of the Education Code is amended to
read:
   52055.770.  (a) School districts and chartering authorities shall
receive funding at the following rate, on behalf of funded schools:
   (1) For kindergarten and grades 1 to 3, inclusive, five hundred
dollars ($500) per enrolled pupil in funded schools.
   (2) For grades 4 to 8, inclusive, nine hundred dollars ($900) per
enrolled pupil in funded schools.
   (3) For grades 9 to 12, inclusive, one thousand dollars ($1,000)
per enrolled pupil in funded schools.
   (b) For purposes of subdivision (a), enrollment of a pupil in a
funded school in the prior fiscal year shall be based on data from
the CBEDS. For the 2007-08 fiscal year, the funded rates shall be
reduced to reflect the percentage difference in the total amounts
appropriated for purposes of this section in that year compared to
the amounts appropriated for purposes of this section in the 2008-09
fiscal year.
   (c) The following amounts are hereby appropriated from the General
Fund for the purposes set forth in subdivision (f):
   (1) For the 2007-08 fiscal year, three hundred million dollars
($300,000,000), to be allocated as follows:
   (A) Thirty-two million dollars ($32,000,000) for transfer by the
Controller to Section B of the State School Fund for allocation by
the Chancellor of the California Community Colleges to community
colleges for the purpose of providing funding to the community
colleges to improve and expand career technical education in public
secondary education and lower division public higher education
pursuant to Section 88532, including the hiring of additional faculty
to expand the number of career technical education programs and
course offerings.
   (B) Two hundred sixty-eight million dollars ($268,000,000) for
transfer by the Controller to Section A of the State School Fund for
allocation by the Superintendent pursuant to this article.
   (2) For each of the 2008-09, and 2010-11 to 2014-15 fiscal years,
inclusive, four hundred fifty million dollars ($450,000,000) per
fiscal year, to be allocated as follows:
   (A) Forty-eight million dollars ($48,000,000) for transfer by the
Controller to Section B of the State School Fund for allocation by
the Chancellor of the California Community Colleges to community
colleges as required under subdivision (e).
   (B) Four hundred two million dollars ($402,000,000) for transfer
by the Controller to Section A of the State School Fund for
allocation by the Superintendent pursuant to this article.
   (C) Commencing with the 2010-11 fiscal year, payments made
pursuant to subparagraphs (A) and (B) shall be made only on or after
October 8 of each fiscal year.
   (d) For the 2013-14 fiscal year the amounts appropriated under
subdivision (c) shall be adjusted to reflect the total fiscal
settlement agreed to by the parties in California Teachers
Association, et al. v. Arnold Schwarzenegger (Case Number 05CS01165
of the Superior Court for the County of Sacramento) and the sum of
all fiscal years of funding provided to fund this article shall not
exceed the total funds agreed to by those parties. This annual
appropriation shall continue to be made until the Director of Finance
reports to the Legislature, along with all proposed adjustments to
the Governor's Budget pursuant to Section 13308 of the Government
Code, that the sum of appropriations made and allocated pursuant to
subdivision (c) equals the total outstanding balance of the minimum
state educational funding obligation to school districts and
community college districts required by Section 8 of Article XVI of
the California Constitution and Chapter 213 of the Statutes of 2004
for the 2004-05 and 2005-06 fiscal years, as determined in
subdivision (a) or (b) of Section 41207.1.
   (e) The sum transferred under subparagraph (A) of paragraph (2) of
subdivision (c) for the 2008-09 fiscal year shall be allocated by
the Chancellor of the California Community Colleges as follows:
   (1) Thirty-eight million dollars ($38,000,000) to the community
colleges for the purpose of providing funding to the community
colleges to improve and expand career technical education in public
secondary education and lower division public higher education
pursuant to Section 88532, including the hiring of additional faculty
to expand the number of career technical education programs and
course offerings.
   (2) Ten million dollars ($10,000,000) to the community colleges
for the purpose of providing one-time block grants to community
college districts to be used for one-time items of expenditure,
including, but not limited to, the following purposes:
   (A) Physical plant, scheduled maintenance, deferred maintenance,
and special repairs.
   (B) Instructional materials and support.
   (C) Instructional equipment, including equipment related to
career-technical education, with priority for nursing program
equipment.
   (D) Library materials.
   (E) Technology infrastructure.
   (F) Hazardous substances abatement, cleanup, and repair.
   (G) Architectural barrier removal.
   (H) State-mandated local programs.
   (3) The Chancellor of the California Community Colleges shall
allocate the amount allocated pursuant to paragraph (2) to community
college districts on an equal amount per actual full-time-equivalent
student (FTES) reported for the prior fiscal year, except that each
community college district shall be allocated an amount not less than
fifty thousand dollars ($50,000), and the equal amount per unit of
FTES shall be computed accordingly.
   (4) Funds allocated under paragraph (2) shall supplement and not
supplant existing expenditures and may not be counted as the district
contribution for physical plant projects and instructional material
purchases funded in Item 6870-101-0001 of Section 2.00 of the annual
Budget Act.
   (f) For each fiscal year, commencing with the 2010-11 fiscal year,
to the 2014-15 fiscal year, inclusive, the sum transferred pursuant
to subparagraph (A) of paragraph (2) of subdivision (c) shall be
allocated by the Chancellor of the California Community Colleges as
follows: Forty eight million dollars ($48,000,000) to the community
colleges for the purpose of providing funding to the community
colleges to improve and expand career technical education in public
secondary education and lower division public higher education
pursuant to Section 88532, including the hiring of additional faculty
to expand the number of career technical education programs and
course offerings.
   (g) The appropriations made under subdivision (c) are for the
purpose of discharging in full the minimum state educational funding
obligation to school districts and community college districts
pursuant to Section 8 of Article XVI of the California Constitution
and Chapter 213 of the Statutes of 2004 for the 2004-05 fiscal year,
and the outstanding maintenance factor for the 2005-06 fiscal year
resulting from this additional payment of the Chapter 213 amount for
the 2004-05 fiscal year.
   (h) For the purposes of making the computations required by
Section 8 of Article XVI of the California Constitution, including
computation of the state's minimum funding obligation to school
districts and community college districts in subsequent fiscal years,
the first one billion six hundred twenty million nine hundred
twenty-eight thousand dollars ($1,620,928,000) in appropriations made
pursuant to subdivision (c) shall be deemed to be "General Fund
revenues appropriated for school districts," as defined in
subdivision (c) of Section 41202 and "General Fund Revenues
appropriated for community college districts," as defined in
subdivision (d) of Section 41202, for the 2004-05 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 that fiscal year. The remaining
appropriations made pursuant to subdivision (c) shall be deemed to be
"General Fund revenues appropriated for school districts," as
defined in subdivision (c) of Section 41202 and "General Fund
revenues appropriated for community college districts," as defined in
subdivision (d) of Section 41202, for the 2005-06 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 that fiscal year.
   (i) From funds appropriated under subdivision (c), the
Superintendent shall provide both of the following:
   (1) Not more than two million dollars ($2,000,000) annually to
county superintendents of schools to carry out the requirements of
this article, allocated in a manner similar to that created to carry
out the new duties of those superintendents under the settlement
agreement in the case of Williams v. California (Super. Ct. San
Francisco, No. CGC-00-312236).
   (2) Five million dollars ($5,000,000) in the 2007-08 fiscal year
to support regional assistance under Section 52055.730. It is the
intent of the Legislature that the Superintendent and the secretary,
along with county offices of education, seek foundational and other
financial support to sustain and expand these services. Funds
provided under this paragraph that are not expended in the 2007-08
fiscal year shall be reappropriated for use in subsequent fiscal
years for the same purpose.
   (j) Notwithstanding any other provision of law, funds appropriated
under subdivision (c) but not allocated to schools with kindergarten
or grades 1 to 12, inclusive, in a fiscal year, due to program
termination in any year or otherwise, shall be available for
reappropriation only in furtherance of the purposes of this article.
First priority for those amounts shall be to provide cost-of-living
increases and enrollment growth adjustments to funded schools.
   (k) The sum of three hundred fifty thousand dollars ($350,000) is
hereby appropriated from the General Fund to the State Department of
Education to fund 3.0 positions to implement this article. Funding
provided under this subdivision is not part of funds provided
pursuant to subdivision (c).
  SEC. 27.  Section 52124.3 of the Education Code is amended to read:

   52124.3.  (a) For the 2008-09, 2009-10, 2010-11, and 2011-12
fiscal years only, the amounts deducted pursuant to subdivision (d)
of Section 52124 shall be as follows:
   (1) Five percent of the amount to which the school district would
otherwise be eligible for each class for which the annual average
enrollment determined pursuant to Section 52124.5 is greater than or
equal to 20.5 but less than 21.5.
   (2) Ten percent of the amount to which the school district would
otherwise be eligible for each class for which the annual average
enrollment determined pursuant to Section 52124.5 is greater than or
equal to 21.5 but less than 22.5.
   (3) Fifteen percent of the amount to which the school district
would otherwise be eligible for each class for which the annual
average enrollment determined pursuant to Section 52124.5 is greater
than or equal to 22.5 but less than 23.0.
   (4) Twenty percent of the amount to which the school district
would otherwise be eligible for each class for which the annual
average enrollment determined pursuant to Section 52124.5 is greater
than or equal to 23.0 but less than 25.0.
   (5) Thirty percent of the amount to which the school district
would otherwise be eligible for each class for which the annual
average enrollment determined pursuant to Section 52124.5 is greater
than or equal to 25.0.
   (b) For the 2008-09, 2009-10, 2010-11, and 2011-12 fiscal years, a
local educational agency is eligible to receive funding pursuant to
this chapter only for the same number of classes for which it had
applied to receive program funding as of January 31, 2009. A local
educational agency that meets these criteria is eligible for reduced
funding under this section only for the number of classes reported on
its 2008-09 operations application and is not eligible for funds
under this chapter for classes in addition to that number.
  SEC. 28.  Section 60200.7 is added to the Education Code, to read:
   60200.7.  Notwithstanding Sections 60200 and 60200.1, the state
board shall not adopt instructional materials or follow the
procedures adopted pursuant to Sections 60200 and 60200.1 until the
2013-14 school year.
  SEC. 29.  Section 60422.1 of the Education Code is amended to read:

   60422.1.  (a) Notwithstanding subdivision (i) of Section 60200,
Section 60422, or any other provision of law, for the 2008-09 to the
2012-13 fiscal years, inclusive, the governing board of a school
district is not required to provide pupils with instructional
materials by a specified period of time following adoption of those
materials by the state board.
   (b) Notwithstanding subdivision (a), this section does not relieve
school districts of their obligations to provide every pupil with
textbooks or instructional materials, as provided in Section 1240.3.
   (c) This section does not relieve school districts of the
obligation to hold a public hearing or hearings pursuant to
subparagraphs (A) and (B) of paragraph (1) of subdivision (a) of
Section 60119.
   (d) This section shall become inoperative on July 1, 2013, and, as
of January 1, 2014, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2014, deletes or
extends the dates on which it becomes inoperative and is repealed.
                                                SEC. 30.  Section
60852.3 is added to the Education Code, to read:
   60852.3.  (a) Notwithstanding any other provision of law,
commencing with the 2009-10 school year, an eligible pupil with a
disability is not required to pass the high school exit examination
established pursuant to Section 60850 as a condition of receiving a
diploma of graduation or as a condition of graduation from high
school.
   (b) This exemption shall last until the state board, pursuant to
Section 60852.1, makes a determination that the alternative means by
which an eligible pupil with disabilities may demonstrate the same
level of academic achievement in the portions of, or those content
standards required for passage of, the high school exit examination
are not feasible or that the alternative means are implemented.
   (c) For the purposes of this section, an eligible pupil with a
disability is a pupil with an individualized education program
adopted pursuant to the federal Individuals with Disabilities
Education Act (20 U.S.C. Sec. 1400 et seq.) or a plan adopted
pursuant to Section 504 of the federal Rehabilitation Act of 1972 (29
U.S.C. Sec. 794(a)) that indicates the pupil is scheduled to receive
a high school diploma, and that the pupil has satisfied or will
satisfy all other state and local requirements for the receipt of a
high school diploma, on or after July 1, 2009.
   (d) A local educational agency, as defined in Section 56026.3,
shall not adopt an individualized education program pursuant to the
federal Individuals with Disabilities Education Act or a plan
pursuant to Section 504 of the federal Rehabilitation Act of 1972 for
a pupil for the sole purpose of exempting the pupil from the
requirement to pass the high school exit examination as a condition
or receiving a high school diploma, unless that adoption is
consistent with federal law.
   (e) Pursuant to subdivision (b) of Section 60851, pupils with
exceptional needs shall take the high school exit examination in
grade 10 for purposes of fulfilling the requirements of the federal
No Child Left Behind Act of 2001 (20 U.S.C. Sec. 7114).
  SEC. 31.  Section 76300 of the Education Code is amended to read:
   76300.  (a) The governing board of each community college district
shall charge each student a fee pursuant to this section.
   (b) (1) The fee prescribed by this section shall be twenty-six
dollars ($26) per unit per semester, effective with the fall term of
the 2009-10 academic year.
   (2) The board of governors shall proportionately adjust the amount
of the fee for term lengths based upon a quarter system, and also
shall proportionately adjust the amount of the fee for summer
sessions, intersessions, and other short-term courses. In making
these adjustments, the board of governors may round the per unit fee
and the per term or per session fee to the nearest dollar.
   (c) For the purposes of computing apportionments to community
college districts pursuant to Section 84750, the board of governors
shall subtract, from the total revenue owed to each district, 98
percent of the revenues received by districts from charging a fee
pursuant to this section.
   (d) The board of governors shall reduce apportionments by up to 10
percent to any district that does not collect the fees prescribed by
this section.
   (e) The fee requirement does not apply to any of the following:
   (1) Students enrolled in the noncredit courses designated by
Section 84757.
   (2) California State University or University of California
students enrolled in remedial classes provided by a community college
district on a campus of the University of California or a campus of
the California State University, for whom the district claims an
attendance apportionment pursuant to an agreement between the
district and the California State University or the University of
California.
   (3) Students enrolled in credit contract education courses
pursuant to Section 78021, if the entire cost of the course,
including administrative costs, is paid by the public or private
agency, corporation, or association with which the district is
contracting and if these students are not included in the calculation
of the full-time equivalent students (FTES) of that district.
   (f) The governing board of a community college district may exempt
special part-time students admitted pursuant to Section 76001 from
the fee requirement.
   (g) (1) The fee requirements of this section shall be waived for
any student who, at the time of enrollment, is a recipient of
benefits under the Temporary Assistance to Needy Families program,
the Supplemental Security Income/State Supplementary Program, or a
general assistance program or has demonstrated financial need in
accordance with the methodology set forth in federal law or
regulation for determining the expected family contribution of
students seeking financial aid.
   (2) The governing board of a community college district also shall
waive the fee requirements of this section for any student who
demonstrates eligibility according to income standards established by
regulations of the board of governors.
   (3) Paragraphs (1) and (2) may be applied to a student enrolled in
the 2005-06 academic year if the student is exempted from
nonresident tuition under paragraph (3) of subdivision (a) of Section
76140.
   (h) The fee requirements of this section shall be waived for any
student who, at the time of enrollment, is a dependent, or surviving
spouse who has not remarried, of any member of the California
National Guard who, in the line of duty and while in the active
service of the state, was killed, died of a disability resulting from
an event that occurred while in the active service of the state, or
is permanently disabled as a result of an event that occurred while
in the active service of the state. "Active service of the state,"
for the purposes of this subdivision, refers to a member of the
California National Guard activated pursuant to Section 146 of the
Military and Veterans Code.
   (i) The fee requirements of this section shall be waived for any
student who is the surviving spouse or the child, natural or adopted,
of a deceased person who met all of the requirements of Section
68120.
   (j) The fee requirements of this section shall be waived for any
student in an undergraduate program, including a student who has
previously graduated from another undergraduate or graduate program,
who is the dependent of any individual killed in the September 11,
2001, terrorist attacks on the World Trade Center and the Pentagon or
the crash of United Airlines Flight 93 in southwestern Pennsylvania,
if that dependent meets the financial need requirements set forth in
Section 69432.7 for the Cal Grant A Program and either of the
following applies:
   (1) The dependent was a resident of California on September 11,
2001.
   (2) The individual killed in the attacks was a resident of
California on September 11, 2001.
   (k) A determination of whether a person is a resident of
California on September 11, 2001, for purposes of subdivision (j)
shall be based on the criteria set forth in Chapter 1 (commencing
with Section 68000) of Part 41 for determining nonresident and
resident tuition.
   (l) (1) "Dependent," for purposes of subdivision (j), is a person
who, because of his or her relationship to an individual killed as a
result of injuries sustained during the terrorist attacks of
September 11, 2001, qualifies for compensation under the federal
September 11th Victim Compensation Fund of 2001 (Title IV (commencing
with Section 401) of Public Law 107-42).
   (2) A dependent who is the surviving spouse of an individual
killed in the terrorist attacks of September 11, 2001, is entitled to
the waivers provided in this section until January 1, 2013.
   (3) A dependent who is the surviving child, natural or adopted, of
an individual killed in the terrorist attacks of September 11, 2001,
is entitled to the waivers under subdivision (j) until that person
attains the age of 30 years.
   (4) A dependent of an individual killed in the terrorist attacks
of September 11, 2001, who is determined to be eligible by the
California Victim Compensation and Government Claims Board, is also
entitled to the waivers provided in this section until January 1,
2013.
   (m) (1) It is the intent of the Legislature that sufficient funds
be provided to support the provision of a fee waiver for every
student who demonstrates eligibility pursuant to subdivisions (g) to
(j), inclusive.
   (2) From funds provided in the annual Budget Act, the board of
governors shall allocate to community college districts, pursuant to
this subdivision, an amount equal to 2 percent of the fees waived
pursuant to subdivisions (g) to (j), inclusive. From funds provided
in the annual Budget Act, the board of governors shall allocate to
community college districts, pursuant to this subdivision, an amount
equal to ninety-one cents ($0.91) per credit unit waived pursuant to
subdivisions (g) to (j), inclusive. It is the intent of the
Legislature that funds provided pursuant to this subdivision be used
to support the determination of financial need and delivery of
student financial aid services, on the basis of the number of
students for whom fees are waived. It also is the intent of the
Legislature that the funds provided pursuant to this subdivision
directly offset mandated costs claimed by community college districts
pursuant to Commission on State Mandates consolidated Test Claims
99-TC-13 (Enrollment Fee Collection) and 00-TC-15 (Enrollment Fee
Waivers). Funds allocated to a community college district for
determination of financial need and delivery of student financial aid
services shall supplement, and shall not supplant, the level of
funds allocated for the administration of student financial aid
programs during the 1992-93 fiscal year.
   (n) The board of governors shall adopt regulations implementing
this section.
  SEC. 32.  Section 84043 is added to the Education Code, to read:
   84043.  (a) (1) Notwithstanding any other provision of law, and
unless otherwise prohibited under federal law, for the 2009-10 to
2012-13 fiscal years, inclusive, community college districts may use
funding received, pursuant to subdivision (b), from any of the
programs listed in paragraph (2) that are contained in Item
6870-101-0001 of Section 2.00 of the annual Budget Act, for the
purposes of any of the programs contained in Schedule (2) and
Schedules (4) to (23), inclusive, of Item 6870-101-0001 of Section
2.00 of the Budget Act of 2009.
   (2) (A) Apprenticeship.
   (B) Matriculation.
   (C) Academic Senate for the Community Colleges.
   (D) Equal Employment Opportunity.
   (E) Part-time Faculty Health Insurance.
   (F) Part-time Faculty Compensation.
   (G) Part-time Faculty Office Hours.
   (H) Economic Development.
   (I) Transfer Education and Articulation.
   (J) Physical Plant and Instructional Support.
   (K) Career Technical Education.
   (L) Campus Childcare Tax Bailout.
   (b) For the 2009-10 to 2012-13 fiscal years, inclusive, the
chancellor shall apportion from the amounts provided in the annual
Budget Act for the programs enumerated in paragraph (2) of
subdivision (a), an amount to a community college district, based on
the same relative proportion that the district received in the
2008-09 fiscal year for the programs enumerated in paragraph (2) of
subdivision (a). The amounts allocated shall be adjusted for any
greater or lesser amount appropriated for the items enumerated in
paragraph (2) of subdivision (a).
   (c) (1) This section does not obligate the state to refund or
repay reductions made pursuant to this section. A decision by a
district to reduce funding pursuant to this section for a
state-mandated local program shall constitute a waiver of the
subvention of funds that the district is otherwise entitled to
pursuant to Section 6 of Article XIII B of the California
Constitution on the amount so reduced.
   (2) If a community college district elects to use funding received
pursuant to subdivision (b) in the manner authorized pursuant to
subdivision (a), the governing board of the district shall, at a
regularly scheduled open public hearing, take testimony from the
public, discuss, and shall approve or disapprove the proposed use of
funding.
   (3) (A) If a community college district elects to use funding
received pursuant to subdivision (b) in the manner authorized
pursuant to subdivision (a), the district shall continue to report
the expenditures pursuant to this section by using the appropriate
codes to indicate the activities for which these funds were expended
using the existing standard reporting process as determined by the
chancellor.
   (B) The chancellor shall collect the information in subparagraph
(A) and shall provide that information to the Department of Finance
and to the appropriate policy and budget committees of the
Legislature on or before April 15, 2010, and annually thereafter by
April 15 of each year, through 2014.
   (d) For the 2009-10 to 2012-13 fiscal years, inclusive, community
college districts that elect to use funding in the manner authorized
pursuant to subdivision (a) shall be deemed to be in compliance with
the program and funding requirements contained in statutory,
regulatory, and provisional language, associated with the programs
enumerated in subdivision (a).
  SEC. 33.  Section 7906 of the Government Code is amended to read:
   7906.  For school districts:
   (a) "ADA" means a school district's second principal apportionment
units of average daily attendance as determined pursuant to Section
42238.5 of the Education Code, including average daily attendance in
summer school, regional occupational centers and programs, and
apprenticeship programs, and excluding average daily attendance in
adult education programs. All other units of average daily attendance
including, but not limited to, special day classes for special
education pupils, shall be included.
   (1) For purposes of this subdivision, the average daily attendance
of summer school programs shall be determined pursuant to
subparagraph (F) of paragraph (1) of subdivision (a) of Section
14022.5 of the Education Code.
   (2) For purposes of this subdivision, the average daily attendance
of apprenticeship programs shall be determined pursuant to
subparagraph (D) of paragraph (1) of subdivision (a) of Section
14022.5 of the Education Code.
   (3) For the 2008-09, 2009-10, 2010-11, 2011-12, and 2012-13 fiscal
years, the average daily attendance of public school districts,
including county superintendents of schools, serving kindergarten and
grades 1 to 12, inclusive, or any part thereof, shall include the
same amount of average daily attendance for classes for supplemental
instruction and regional occupational centers programs that was used
for the purposes of this section for the 2007-08 fiscal year.
   (b) "Foundation program level" means:
   (1) For the 1978-79 fiscal year, one thousand two hundred
forty-one dollars ($1,241) for elementary districts, one thousand
three hundred twenty-two dollars ($1,322) for unified districts, and
one thousand four hundred twenty-seven dollars ($1,427) for high
school districts.
   (2) For the 1979-80 fiscal year through the 1986-87 fiscal year,
inclusive, the levels specified in paragraph (1) increased by the
lesser of the change in cost of living or California per capita
personal income for the preceding calendar year.
   (3) For the 1986-87 fiscal year, the levels specified in paragraph
(2) increased by one hundred eighty dollars ($180) for elementary
districts, one hundred ninety-one dollars ($191) for unified
districts, and two hundred seven dollars ($207) for high school
districts.
   (4) For the 1987-88 fiscal year, the levels specified in paragraph
(3) increased by the lesser of the change in cost of living or
California per capita personal income for the preceding calendar
year.
   (5) For the 1988-89 fiscal year and each fiscal year thereafter,
the foundation program level shall be the appropriations limit of the
school district for the current fiscal year, plus amounts paid for
any nonreimbursed court or federal mandates imposed on or after
November 6, 1979, less the sum of the following:
   (A) Interest earned on the proceeds of taxes during the current
fiscal year.
   (B) The 50 percent of miscellaneous funds received during the
current fiscal year which are from the proceeds of taxes.
   (C) Locally voted taxes received during the current fiscal year,
such as parcel taxes or square foot taxes, unless for voter-approved
bonded debt.
   (D) Any other local proceeds of taxes received during the current
fiscal year, other than local taxes which count towards the revenue
limit, such as excess bond revenues transferred to a district's
general fund pursuant to Section 15234 of the Education Code.
   (c) "Proceeds of taxes" shall be deemed to include subventions
received from the state only if those subventions are for one of the
following two purposes:
   (1) Basic aid subventions of one hundred twenty dollars ($120) per
ADA.
   (2) Additional apportionments which, when added to the district's
local revenues as defined in Section 42238 of the Education Code, do
not exceed the foundation program level for that district. In no case
shall subventions received from the state for reimbursement of state
mandates in accordance with the provisions of Section 6 of Article
XIII B of the California Constitution or of Section 17561 or for
reimbursement of court or federal mandates imposed on or after
November 6, 1979, be considered "proceeds of taxes" for the purposes
of this section.
   (d) Proceeds of taxes for a fiscal year shall not include any
proceeds of taxes within the district's beginning balance or reserve,
unless those funds were not appropriated in a prior fiscal year.
Funds that were appropriated to a reserve or other fund referenced in
Section 5 of Article XIII B of the California Constitution shall be
deemed to be appropriated for the purpose of this paragraph.
   (e) The remainder of the state apportionments, including special
purpose apportionments and categorical aid subventions shall not be
considered proceeds of taxes for a school district.
   (f) Each school district shall report to the Superintendent of
Public Instruction and to the Director of Finance at least annually
its appropriation limit, its appropriations subject to limitation,
the amount of its state aid apportionments and subventions included
within the proceeds of taxes of the school district, and amounts
excluded from its appropriations limit, at a time and in a manner
prescribed by the Superintendent of Public Instruction and approved
by the Director of Finance.
   (g) For the 1988-89 fiscal year and each fiscal year thereafter,
nothing in paragraph (2) of subdivision (c) shall be so construed as
to require that the amount determined pursuant to subdivision (b) be
multiplied by the amount determined pursuant to subdivision (a) for
purposes of determining the amount of state aid included in school
district "proceeds of taxes" for purposes of this section.
  SEC. 34.  Section 8880.5 of the Government Code is amended to read:

   8880.5.  Allocations for education:
   The California State Lottery Education Fund is created within the
State Treasury, and is continuously appropriated for carrying out the
purposes of this chapter. The Controller shall draw warrants on this
fund and distribute them quarterly in the following manner, provided
that the payments specified in subdivisions (a) to (g), inclusive,
shall be equal per capita amounts.
   (a) (1) Payments shall be made directly to public school
districts, including county superintendents of schools, serving
kindergarten and grades 1 to 12, inclusive, or any part thereof, on
the basis of an equal amount for each unit of average daily
attendance, as defined by law and adjusted pursuant to subdivision
().
   (2) For purposes of this paragraph, in each of the 2008-09,
2009-10, 2010-11, 2011-12, and 2012-13 fiscal years, the number of
units of average daily attendance in each of those fiscal years for
programs for public school districts, including county
superintendents of schools, serving kindergarten and grades 1 to 12,
inclusive, shall include the same amount of average daily attendance
for classes for adults and regional occupational centers and programs
used in the calculation made pursuant to this subdivision for the
2007-08 fiscal year.
   (b) Payments shall also be made directly to public school
districts serving community colleges, on the basis of an equal amount
for each unit of average daily attendance, as defined by law.
   (c) Payments shall also be made directly to the Board of Trustees
of the California State University on the basis of an amount for each
unit of equivalent full-time enrollment. Funds received by the
trustees shall be deposited in and expended from the California State
University Lottery Education Fund, which is hereby created or, at
the discretion of the trustees, deposited in local trust accounts in
accordance with subdivision (j) of Section 89721 of the Education
Code.
   (d) Payments shall also be made directly to the Regents of the
University of California on the basis of an amount for each unit of
equivalent full-time enrollment.
   (e) Payments shall also be made directly to the Board of Directors
of the Hastings College of the Law on the basis of an amount for
each unit of equivalent full-time enrollment.
   (f) Payments shall also be made directly to the Department of the
Youth Authority for educational programs serving kindergarten and
grades 1 to 12, inclusive, or any part thereof, on the basis of an
equal amount for each unit of average daily attendance, as defined by
law.
   (g) Payments shall also be made directly to the two California
Schools for the Deaf, the California School for the Blind, and the
three Diagnostic Schools for Neurologically Handicapped Children, on
the basis of an amount for each unit of equivalent full-time
enrollment.
   (h) Payments shall also be made directly to the State Department
of Developmental Services and the State Department of Mental Health
for clients with developmental or mental disabilities who are
enrolled in state hospital education programs, including
developmental centers, on the basis of an equal amount for each unit
of average daily attendance, as defined by law.
   (i) No Budget Act or other statutory provision shall direct that
payments for public education made pursuant to this chapter be used
for purposes and programs (including workload adjustments and
maintenance of the level of service) authorized by Chapters 498, 565,
and 1302 of the Statutes of 1983, Chapter 97 or 258 of the Statutes
of 1984, or Chapter 1 of the Statutes of the 1983-84 Second
Extraordinary Session.
   (j) School districts and other agencies receiving funds
distributed pursuant to this chapter may at their option utilize
funds allocated by this chapter to provide additional funds for those
purposes and programs prescribed by subdivision (i) for the purpose
of enrichment or expansion.
   (k) As a condition of receiving any moneys pursuant to subdivision
(a) or (b), each district and county superintendent of schools shall
establish a separate account for the receipt and expenditure of
those moneys, which account shall be clearly identified as a lottery
education account.
   () Commencing with the 1998-99 fiscal year, and each year
thereafter, for the purposes of subdivision (a), average daily
attendance shall be increased by the statewide average rate of
excused absences for the 1996-97 fiscal year as determined pursuant
to the provisions of Chapter 855 of the Statutes of 1997. The
statewide average excused absence rate, and the corresponding
adjustment factor required for the operation of this subdivision,
shall be certified to the State Controller by the Superintendent of
Public Instruction.
   (m) It is the intent of this chapter that all funds allocated from
the California State Lottery Education Fund shall be used
exclusively for the education of pupils and students and no funds
shall be spent for acquisition of real property, construction of
facilities, financing of research, or any other noninstructional
purpose.
  SEC. 35.  Section 42 of Chapter 12 of the Statutes of 2009, Third
Extraordinary Session, is amended to read:
  Sec. 42.  (a) For the 2008-09 and 2009-10 fiscal years, in order to
provide local budgeting flexibility as a result of budget reductions
made by the Legislature for the 2008-09 and 2009-10 fiscal years,
the governing board of a school district or county office of
education may use for any educational purpose up to 100 percent of
the balances, as of June 30, 2008, of restricted accounts in its
general fund, adult education fund, deferred maintenance fund, and
pupil transportation equipment fund, excluding restricted reserves
committed for bond funds, sinking funds, and federal funds, and
excluding balances in the following programs:
   (1) Economic Impact Aid (Article 2 (commencing with Section 54020)
of Chapter 1 of Part 29 of Division 4 of Title 2 of the Education
Code).
   (2) Special education.
   (3) Quality Education Investment Act of 2006 (Article 3.7
(commencing with Section 52055.700) of Chapter 6.1 of Part 28 of
Division 4 of Title 2 of the Education Code).
   (4) Home-to-school transportation.
   (5) The English Language Learner Acquisition and Development Pilot
Program (Chapter 5 (commencing with Section 420) of Part 1 of
Division 1 of Title 1 of the Education Code) as funded pursuant to
paragraph (13) of subdivision (a) of Section 43 of Chapter 79 of the
Statutes of 2006.
   (6) Child development.
   (7) Child nutrition programs.
   (b) For purposes of this section, balances of restricted accounts
do not include the amounts deferred from the 2006-07 fiscal year to
the 2007-08 fiscal year or the amounts deferred from the 2007-08
fiscal year to the 2008-09 fiscal year.
   (c) A governing board shall not use the ending balance in any
restricted account if that use would violate a federal maintenance of
effort requirement.
   (d) This section does not obligate the state to refund or repay
funds used pursuant to this section. If a school district uses an
ending balance in a restricted account that consists, in whole or in
part, of funds reimbursed to the district as a subvention of funds
for a state-mandated local program, the school district shall not
submit a claim to the state for a subsequent reimbursement of the
funds that were reimbursed pursuant to Section 6 of Article XIII B of
the California Constitution and used pursuant to the authority
granted to a school district pursuant to this section.
                        (e) A governing board that elects to use
balances in restricted accounts pursuant to this section shall report
to the Superintendent, in a manner determined by the Superintendent,
regarding the programs and amounts of restricted balances used
pursuant to subdivision (a). The Superintendent shall report
statewide information and information for each school district and
county office of education to the Joint Legislative Budget Committee
by April 15, 2010.
  SEC. 36.  Notwithstanding any other law, for the 2008-09 to 2012-13
fiscal years, inclusive, school districts shall not be required to
deposit in their deferred maintenance fund, established pursuant to
Section 17582 of the Education Code, the amount specified in
subdivision (b) of Section 17584 of the Education Code.
  SEC. 37.  It is the intent of the Legislature that basic aid school
districts assume categorical funding reductions proportionate to the
revenue limit reductions implemented for nonbasic aid districts in
this act. The Superintendent of Public Instruction shall reduce the
amount of categorical funding allocated to basic aid school districts
in the 2009-10 fiscal year, as follows:
   (a) For the 2009-10 fiscal year, the State Department of Education
shall notify each basic aid school district, by September 1, 2010,
or two months after the Budget Act of 2010 is enacted, whichever is
later, of the amount of funds to be reduced from its categorical
funding allocations, as follows:
   (1) Multiply each district's 2009-10 fiscal year total revenue
limit subject to the deficit factor specified in paragraph (5) of
subdivision (a) of Section 42238.146 of the Education Code,
calculated as of the 2009-10 fiscal year certified second principal
apportionment, by 5.81 percent.
   (2) The department shall recover from categorical funds identified
in subdivision (b) and apportioned in the 2010-11 fiscal year to
districts that were basic aid school districts in the 2009-10 fiscal
year, the lesser of the amount calculated in paragraph (1) or the
amount by which the sum of the amounts described in subdivision (h)
of Section 42238 of the Education Code exceeds the district's revenue
limit. This result will be further limited by the following:
   (A) The amount of categorical funds to be reduced shall be limited
to the extent that the provisions of Section 41975 of the Education
Code cannot be met through other state aid.
   (B) If the amount determined in paragraph (1) exceeds the amount
of categorical funding owed or paid in the 2010-11 fiscal year to the
basic aid school district for programs identified in subdivision
(b), the department shall recover the lesser amount.
   (b) The department shall recover the amount of funds calculated in
subdivision (a) and may offset funds for any categorical program to
be received in the 2010-11 fiscal year, with the exception of special
education, funds received under the After School Education and
Safety Program, the Quality Education Investment Act of 2006, and
child care and development.
   (c) By June 30, 2011, the department shall report to the
Controller and the Director of Finance the amounts that were
recovered from each categorical education program and the
corresponding item of appropriation in the Budget Act of 2009 that is
to be reduced. The amounts so reduced shall revert to the General
Fund. The reductions pursuant to this subdivision shall be reductions
in the amount appropriated for purposes of Section 8 of Article XVI
of the California Constitution for the 2009-10 fiscal year.
   (d) For purposes of this section, "basic aid school district"
means a school district that does not receive from the state, for the
2009-10 fiscal year, an apportionment of state funds pursuant to
subdivision (h) of Section 42238 of the Education Code.
  SEC. 38.  For the 2009-10 fiscal year and for purposes of Sections
42127 and 42131 of the Education Code, a county superintendent of
schools and the Superintendent of Public Instruction shall not assign
a qualified or negative certification to a local educational agency
based substantially on a projected loss of federal funds provided
through the federal State Fiscal Stabilization Fund of the American
Recovery and Reinvestment Act of 2009 in the 2011-12 fiscal year. To
ensure consistent statewide implementation of this section and to
provide guidance to reviewing agencies regarding the application of
this section, the Superintendent of Public Instruction shall convene
a standards and criteria committee established pursuant to Section
33127 of the Education Code to modify the budget and financial review
criteria to incorporate this change for the 2009-10 fiscal year.
  SEC. 39.  (a) (1) The sum of four hundred two million dollars
($402,000,000) is hereby appropriated from the General Fund to the
Superintendent of Public Instruction for the 2009-10 fiscal year to
be allocated to schoolsites selected to participate in the Quality
Education Investment Act program pursuant to Section 52055.730 of the
Education Code. Local educational agencies shall receive funding, on
behalf of funded schools, at the rates established pursuant to
subdivisions (a) and (i) of Section 52055.770 of the Education Code.
Local educational agencies and school sites receiving this funding
shall comply with all of the requirements of the Quality Education
Investment Act program specified in Article 3.7 (commencing with
Section 52055.700) of Chapter 6.1 of Division 4 of Title 2 of Part 28
of the Education Code.
   (2) Notwithstanding Section 52055.770 of the Education Code, for
purposes of making the computations required by Section 8 of Article
XVI of the California Constitution, the appropriation made by this
subdivision shall be included in 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
Section 41202 of the Education Code for the 2009-10 fiscal year.
   (3) Notwithstanding any other provision of law, the appropriation
made in this subdivision shall be in lieu of the appropriation
required by subparagraph (B) of paragraph (2) of subdivision (c) of
Section 52055.770 of the Education Code for the 2009-10 fiscal year.
   (b) For each school district and chartering authority receiving an
allocation pursuant to subdivision (a), the Superintendent of Public
Instruction shall reduce its revenue limit determined pursuant to
Section 42238 of the Education Code or its general purpose
entitlement determined pursuant to Section 47633 of the Education
Code, as applicable, for the 2009-10 fiscal year by the amount of the
allocation received pursuant to subdivision (a).
   (c) Notwithstanding any other provision of law, local educational
agencies that participated in the Quality Education Investment Act
Program in the 2009-10 fiscal year may, on behalf of eligible
schoolsites, apply to the State Department of Education for grants
provided to the state pursuant to subdivisions (a) and (g) of Section
1003 of Title I of the Elementary and Secondary Education Act (20
U.S.C. Sec. 6303 et seq.) and for moneys reserved by the state
pursuant to subdivision (g) of Section 1003 of Title I of the
Elementary and Secondary Education Act. The State Department of
Education shall award grants to schoolsites during the 2009-10 fiscal
year from funds provided pursuant to subdivision (a) or subdivision
(g), as appropriate, of Section 1003 of Title I of the Elementary and
Secondary Education Act, which apply for these funds pursuant to
this subdivision and meet all of the eligibility requirements for the
receipt of these funds.
  SEC. 40.  The Legislature finds and declares that Section 34 of
this act furthers the purposes of the California State Lottery Act of
1984.
  SEC. 41.  This act addresses the fiscal emergency declared by the
Governor by proclamation on July 1, 2009, pursuant to subdivision (f)
of Section 10 of Article IV of the California Constitution.
  SEC. 42.  This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
   In order to make the necessary statutory changes to implement the
Budget Act of 2009 as soon as practicable, it is necessary that this
act take effect immediately.