AB1062 - Local control funding formula: concentration grants: charter schools: waiver.

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1062 Introduced by Assembly Member Hoover February 20, 2025 An act to amend Section 42238.02 of the Education Code, relating to school finance. LEGISLATIVE COUNSEL'S DIGEST AB 1062, as introduced, Hoover. Local control funding formula: concentration grants: charter schools: waiver. Existing law establishes a public school financing system that requires state funding for county superintendents of schools, school districts, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law requires funding pursuant to the local control funding formula to include, in addition to a base grant, supplemental and concentration grant add-ons that are based on the percentage of unduplicated pupils, defined as those pupils who are English learners, foster youth, or eligible for free or reduced-price meals, served by the county superintendent of schools, school district, or charter school, as specified. Existing law, commencing with the 2021–22 fiscal year, requires the concentration grant add-on to be equal to 65% of the base grant for each school district’s or charter school’s percentage of unduplicated pupils in excess of 55% of the school district’s or charter school’s total enrollment. Existing law prohibits a charter school’s percentage of unduplicated pupils from exceeding the percentage of unduplicated pupils of the school district in which the charter school is physically located, or the highest percentage of unduplicated pupils of the school districts in which the charter school has a school facility, as applicable. This bill would authorize a charter school subject to the above-described prohibitions to apply to the Superintendent of Public Instruction for a waiver from the applicable limitation and to instead have its concentration grant calculated based on the charter school’s percentage of unduplicated pupils in excess of 55 percent of the charter school’s total enrollment. The bill would require the Superintendent to develop guidelines and procedures for these purposes and to grant the waiver if specified conditions are met, as specified. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 42238.02 of the Education Code is amended to read: 42238.02. (a) The amount computed pursuant to this section shall be known as the school district and charter school local control funding formula. (b) (1) For purposes of this section “unduplicated pupil” means a pupil enrolled in a school district or a charter school who is either classified as an English learner, eligible for a free or reduced-price meal, or is a foster youth. A pupil shall be counted only once for purposes of this section if any of the following apply: (A) The pupil is classified as an English learner and is eligible for a free or reduced-price meal. (B) The pupil is classified as an English learner and is a foster youth. (C) The pupil is eligible for a free or reduced-price meal and is classified as a foster youth. (D) The pupil is classified as an English learner, is eligible for a free or reduced-price meal, and is a foster youth. (2) Under procedures and timeframes established by the Superintendent, commencing with the 2013–14 fiscal year, a school district or charter school shall annually submit its enrolled free and reduced-price meal eligibility, foster youth, and English learner pupil-level records for enrolled pupils to the Superintendent using the California Longitudinal Pupil Achievement Data System. (3) (A) Commencing with the 2013–14 fiscal year, a county office of education shall review and validate certified aggregate English learner, foster youth, and free or reduced-price meal eligible pupil data for school districts and charter schools under its jurisdiction to ensure the data is reported accurately. The Superintendent shall provide each county office of education with appropriate access to school district and charter school data reports in the California Longitudinal Pupil Achievement Data System for purposes of ensuring data reporting accuracy. (B) The Controller shall include the instructions necessary to enforce paragraph (2) in the audit guide required by Section 14502.1. The instructions shall include, but are not necessarily limited to, procedures for determining if the English learner, foster youth, and free or reduced-price meal eligible pupil counts are consistent with the school district’s or charter school’s English learner, foster youth, and free or reduced-price meal eligible pupil records. (4) The Superintendent shall make the calculations pursuant to this section using the data submitted by local educational agencies, including charter schools, through the California Longitudinal Pupil Achievement Data System. Under timeframes and procedures established by the Superintendent, school districts and charter schools may review and revise their submitted data on English learner, foster youth, and free or reduced-price meal eligible pupil counts to ensure the accuracy of data reflected in the California Longitudinal Pupil Achievement Data System. (5) The Superintendent shall annually compute the percentage of unduplicated pupils for each school district and charter school by dividing the enrollment of unduplicated pupils in a school district or charter school by the total enrollment in that school district or charter school pursuant to all of the following: (A) For the 2013–14 fiscal year, divide the sum of unduplicated pupils for the 2013–14 fiscal year by the sum of the total pupil enrollment for the 2013–14 fiscal year. (B) For the 2014–15 fiscal year, divide the sum of unduplicated pupils for the 2013–14 and 2014–15 fiscal years by the sum of the total pupil enrollment for the 2013–14 and 2014–15 fiscal years. (C) For the 2015–16 fiscal year and each fiscal year thereafter, divide the sum of unduplicated pupils for the current fiscal year and the two prior fiscal years by the sum of the total pupil enrollment for the current fiscal year and the two prior fiscal years. (D) (i) For purposes of the quotients determined pursuant to subparagraphs (B) and (C), the Superintendent shall use a school district’s or charter school’s enrollment of unduplicated pupils and total pupil enrollment in the 2014–15 fiscal year instead of the enrollment of unduplicated pupils and total pupil enrollment in the 2013–14 fiscal year if doing so would yield an overall greater percentage of unduplicated pupils. (ii) It is the intent of the Legislature to review each school district and charter school’s enrollment of unduplicated pupils for the 2013–14 and 2014–15 fiscal years and provide one-time funding, if necessary, for a school district or charter school with higher enrollment of unduplicated pupils in the 2014–15 fiscal year as compared to the 2013–14 fiscal year. (E) (i) Notwithstanding any other law, for purposes of subparagraph (C), the unduplicated pupils and total pupil enrollment in prior fiscal years shall be the following: (I) For a transferred charter school, the counts shall be equal to the counts reported for the original charter school. (II) For an acquiring charter school, the counts shall be equal to the counts reported for the original charter school. This subclause shall become inoperative on July 1, 2026, unless its operation is extended by the Legislature. (III) For the restructured portions of a divided charter school, the counts shall be zero. (IV) For the remaining portion of a divided charter school, the counts shall be equal to the counts reported for the original charter school. (ii) The definitions in Section 47654 apply for purposes of this subparagraph. (6) Notwithstanding subdivision (a) of Section 14002, the data used to determine the percentage of unduplicated pupils shall be final once that data is no longer used in the current fiscal year calculation of the percentage of unduplicated pupils. This paragraph does not apply to a change that is the result of an audit exception, as described in paragraph (2) of subdivision (a) of Section 41341. (c) Commencing with the 2013–14 fiscal year and each fiscal year thereafter, the Superintendent shall annually calculate a local control funding formula grant for each school district and charter school in the state pursuant to this section. (d) The Superintendent shall compute a grade span adjusted base grant equal to the total of the following amounts: (1) For the 2013–14 fiscal year, a base grant of: (A) Six thousand eight hundred forty-five dollars ($6,845) for average daily attendance in kindergarten and grades 1 to 3, inclusive. (B) Six thousand nine hundred forty-seven dollars ($6,947) for average daily attendance in grades 4 to 6, inclusive. (C) Seven thousand one hundred fifty-four dollars ($7,154) for average daily attendance in grades 7 and 8. (D) Eight thousand two hundred eighty-nine dollars ($8,289) for average daily attendance in grades 9 to 12, inclusive. (2) In each year the grade span adjusted base grants in paragraph (1) shall be adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance. (3) (A) The Superintendent shall compute an additional adjustment to the kindergarten and grades 1 to 3, inclusive, base grant as adjusted pursuant to paragraphs (2) and (5) equal to 10.4 percent. The additional grant shall be calculated by multiplying the kindergarten and grades 1 to 3, inclusive, base grant, as adjusted by paragraphs (2) and (5), by 10.4 percent. (B) Until paragraph (4) of subdivision (b) of Section 42238.03 is effective, as a condition of the receipt of funds in this paragraph, a school district shall make progress toward maintaining an average class enrollment of not more than 24 pupils for each schoolsite in kindergarten and grades 1 to 3, inclusive, unless a collectively bargained alternative annual average class enrollment for each schoolsite in those grades is agreed to by the school district, pursuant to the following calculation: (i) Determine a school district’s average class enrollment for each schoolsite for kindergarten and grades 1 to 3, inclusive, in the prior year. For the 2013–14 fiscal year, this amount shall be the average class enrollment for each schoolsite for kindergarten and grades 1 to 3, inclusive, in the 2012–13 fiscal year. (ii) Determine a school district’s proportion of total need pursuant to paragraph (2) of subdivision (b) of Section 42238.03. (iii) Determine the percentage of the need calculated in clause (ii) that is met by funding provided to the school district pursuant to paragraph (3) of subdivision (b) of Section 42238.03. (iv) Determine the difference between the amount computed pursuant to clause (i) and an average class enrollment of not more than 24 pupils. (v) Calculate a current year average class enrollment adjustment for each schoolsite for kindergarten and grades 1 to 3, inclusive, equal to the adjustment calculated in clause (iv) multiplied by the percentage determined pursuant to clause (iii). (C) School districts that have an average class enrollment for each schoolsite for kindergarten and grades 1 to 3, inclusive, of 24 pupils or less for each schoolsite in the 2012–13 fiscal year, shall be exempt from the requirements of subparagraph (B) so long as the school district continues to maintain an average class enrollment for each schoolsite for kindergarten and grades 1 to 3, inclusive, of not more than 24 pupils, unless a collectively bargained alternative ratio is agreed to by the school district. (D) (i) Upon full implementation of the local control funding formula, as a condition of the receipt of funds in this paragraph, all school districts shall maintain an average class enrollment for each schoolsite for kindergarten and grades 1 to 3, inclusive, of not more than 24 pupils for each schoolsite in kindergarten and grades 1 to 3, inclusive, unless a collectively bargained alternative ratio is agreed to by the school district. (ii) Notwithstanding clause (i), for purposes of meeting the requirements of paragraph (1) of subdivision (g) of Section 48000, a school district shall maintain an average transitional kindergarten class enrollment of not more than 24 pupils for each schoolsite. (E) The average class enrollment requirement for each schoolsite for kindergarten and grades 1 to 3, inclusive, established pursuant to this paragraph shall not be subject to waiver by the state board pursuant to Section 33050 or by the Superintendent. (F) The Controller shall include the instructions necessary to enforce this paragraph in the audit guide required by Section 14502.1. The instructions shall include, but are not necessarily limited to, procedures for determining if the average class enrollment for each schoolsite for kindergarten and grades 1 to 3, inclusive, exceeds 24 pupils, or an alternative average class enrollment for each schoolsite pursuant to a collectively bargained alternative ratio. The procedures for determining average class enrollment for each schoolsite shall include criteria for employing sampling. (4) The Superintendent shall compute an additional adjustment to the base grant for grades 9 to 12, inclusive, as adjusted pursuant to paragraphs (2) and (5), equal to 2.6 percent. The additional grant shall be calculated by multiplying the base grant for grades 9 to 12, inclusive, as adjusted by paragraphs (2) and (5) by 2.6 percent. (5) For the 2022–23 fiscal year, the Superintendent shall increase the base grants for kindergarten and grades 1 to 12, inclusive, by 6.7 percent. This adjustment shall be calculated by multiplying the grade span-adjusted base grants calculated pursuant to paragraph (2) for the 2021–22 fiscal year by 6.7 percent. The adjustment shall be included in grade span-adjusted base grants amounts for purposes of the adjustment pursuant to paragraph (2) commencing with the 2023–24 fiscal year. (e) The Superintendent shall compute a supplemental grant add-on equal to 20 percent of the base grants as specified in subparagraphs (A) to (D), inclusive, of paragraph (1) of subdivision (d), as adjusted by paragraphs (2) to (5), inclusive, of subdivision (d), for each school district’s or charter school’s percentage of unduplicated [Text truncated for display. Full text available on Congress.gov.]