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Education Code

TITLE 2. ELEMENTARY AND SECONDARY EDUCATION

DIVISION 3. LOCAL ADMINISTRATION

PART 24. SCHOOL FINANCE

Chapter 2. Determination of Minimum Level of Education Funding

Section 41207.3

41207.3. Minimum funding obligation; amount deemed certified. (a) If the Superintendent and the Director of Finance jointly determine that, for the 2008-09 fiscal year, the state has applied moneys for the support of school districts and community college districts in an amount that exceeds the minimum amount required for that fiscal year pursuant to Section 8 of Article XVI of the California Constitution, the excess, up to one billion one hundred million five hundred ninety thousand dollars ($1,100,590,000), shall be deemed, as of June 30 of that fiscal year, a payment in satisfaction of the outstanding balance of the minimum funding obligation under that section for the 2002–03 and 2003–04 fiscal years in accordance with the following:

(1) The first four hundred eighty-three million sixteen thousand dollars ($483,016,000) in payment of the outstanding balance of the minimum funding obligation for the 2002–03 fiscal year.

(2) The next six hundred seventeen million five hundred seventy-four thousand dollars ($617,574,000) in payment of the outstanding balance of the minimum funding obligation for the 2003–04 fiscal year.

(b) For purposes of this section, the outstanding balance of the minimum funding obligation to school districts and community college districts pursuant to Section 8 of Article XVI of the California Constitution for a fiscal year is the amount, if any, by which the amount required to be applied by the state for the support of school districts and community college districts pursuant to Section 8 of Article XVI of the California Constitution, including any maintenance factor that should have been allocated in that fiscal year pursuant to subdivision (e) of Section 8 of Article XVI, exceeds the amount applied by the state for the support of school districts and community college districts for that fiscal year.

(c) The amounts allocated pursuant to this section shall be deemed, for purposes of Section 8 of Article XVI of the California Constitution, to be appropriations made and allocated in the fiscal year in which the deficiencies resulting in the outstanding balance were incurred. When the amount determined to be owed for each such fiscal year is fully allocated pursuant to this subdivision, the data used in the computations made under this section with regard to the total amount owed by the state for the support of school districts and community college districts pursuant to Section 8 of Article XVI of the California Constitution for that fiscal year, including as much of the maintenance factor for that fiscal year determined pursuant to subdivision (d) of Section 8 of Article XVI as has been allocated as required by subdivision (e) of Section 8 of Article XVI by virtue of the allocations made under this section, shall be deemed certified for purposes of Section 41206.

(d) The amount described in subdivision (a) shall be deemed a payment in full satisfaction of the amounts owed pursuant to Section 41207.

History.—Added by Stats. 2009, Ch. 12 of the Third Extraordinary Session (SB 4), in effect February 20, 2009.

41207.3. Minimum funding obligation; amount deemed certified. (a) Notwithstanding Section 41206, the minimum state educational funding obligation for school districts and community college districts pursuant to subdivision (b) of Section 8 of Article XVI of the California Constitution is determined to be the following:

(1) Fifty-three billion three hundred forty-five million four hundred twenty thousand dollars ($53,345,420,000) for the 2005–06 fiscal year, with an outstanding balance of one billion one hundred ten million five hundred sixteen thousand dollars ($1,110,516,000). The outstanding balance is appropriated and allocated pursuant to Article 3.7 (commencing with Section 52055.700) of Chapter 6.1 of Part 28.

(2) Fifty-five billion two hundred fifty-one million two hundred sixty-six thousand dollars ($55,251,266,000) for the 2006–07 fiscal year, with an outstanding balance of two hundred eleven million five hundred thirty-three thousand dollars ($211,533,000). Commencing with the 2014–15 fiscal year, the Legislature shall appropriate the outstanding balance and specify in the annual Budget Act or other statute making such appropriations that the funds shall be used for any one-time purpose so long as those appropriations are made for allocation to school districts or community college districts.

(3) Fifty-six billion five hundred seventy-seven million four hundred ninety-one thousand dollars ($56,577,491,000) for the 2007–08 fiscal year, with no outstanding balance.

(b) (1) The amount determined pursuant to paragraph (1) of subdivision (a) of this section shall be deemed certified for purposes of Section 41206 when the conditions set forth in subdivision (c) of Section 41207.1 are met.

(2) The amount determined pursuant to paragraph (2) of subdivision (a) of this section shall be deemed certified for purposes of Section 41206 upon appropriation of the full amount of the outstanding balance determined for that year.

(3) The amount determined pursuant to paragraph (3) of subdivision (a) of this section is deemed to be certified for purposes of Section 41206 upon enactment of this section.

History.—Added by Stats. 2009, Ch. 3 of the Fourth Extraordinary Session (AB 3), in effect July 28, 2009.

Note.—Section 1 of Stats 2009, Ch. 3 of the Fourth Extraordinary Session (AB 3) provided that the Legislature finds and declares all of the following:

(a) The fiscal crisis of 2008–09 has caused extraordinary volatility in state General Fund revenues and local property tax receipts. The volatility has led to numerous revisions to the Budget Act of 2008 and related education funding statutes and to numerous revisions in the estimated funding required by Section 8 of Article XVI of the California Constitution for the 2008–09 fiscal year. School districts and community college districts need to know with certainty the total amount of funding to which they are entitled for the 2008–09 fiscal year and the state's plan for providing all of that funding.

(b) Existing law requires the creation of a maintenance factor when certain conditions are met. The fiscal circumstances of 2008–09 have resulted in the creation of a substantial maintenance factor which calls for prudent fiscal planning. The state must know with certainty the amount of that maintenance factor to plan for its future allocation and to determine the level of state support required for school districts and community college districts in coming years.

(c) The American Recovery and Reinvestment Act of 2009 has provided significant federal funding to assist with the state's educational funding needs for two years. However, continued receipt of that funding is predicated on reconciling the state's minimum educational funding guarantee calculations with the federal maintenance of effort calculations and ensuring that state funding does not fall below that maintenance of effort level.

(d) The Budget Act of 2009 must be revised to accommodate the continued weakness of the state and national economies, and to ensure that the acceptance of federal stimulus funds does not have a deleterious effect on the minimum funding level set by Section 8 of Article XVI of the California Constitution for the 2009–10 fiscal year and future fiscal years.

(e) The provisions of this act are intended to be interrelated provisions that address the fiscal crisis of 2008–09 by accomplishing all of the following when implemented:

(1) Set the final calculation of the minimum funding guarantee level for the 2008–09 fiscal year based on the best available calculations of General Fund revenues and local property tax receipts as of the close of the 2008–09 fiscal year.

(2) Ensure that any subsequent changes to technical data do not cause changes in the state funding obligations for school districts and community college districts for the 2008–09 fiscal year.

(3) Plan for and ensure full repayment of the maintenance factor created through the 2008–09 fiscal year.

(4) Revert to the General Fund certain unallocated appropriations made to school districts and community college districts for the 2008–09 fiscal year.

(5) Compensate school districts and community college districts for the reversions described in paragraph (4) in their funding for the 2009–10 fiscal year and reduce revenue limits accordingly for school districts, county offices of education, and community college districts.