AB1204 - Local control funding formula: school districts and charter schools: pupils experiencing homelessness: supplemental and concentration grants: regional adjustment factors: grade-span adequacy adjustments.

Amended IN Assembly May 05, 2025 Amended IN Assembly March 28, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1204 Introduced by Assembly Member Alvarez February 21, 2025 An act to amend Sections 42238.01 and 42238.02 of, and to add Sections 42238.028 and 42238.029 to, 42238.028, 42238.029, and 42238.0292 to, and to add and repeal Section 42238.0291 of, the Education Code, relating to education finance, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 1204, as amended, Alvarez. Local control funding formula: school districts and charter schools: pupils experiencing homelessness: supplemental and concentration grants: regional adjustment factors: grade-span adequacy adjustments. (1) Existing law establishes a public school financing system that requires state funding for 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 a base grant that in each fiscal year is adjusted for inflation 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 specified. If the inflation adjustment for the base grant for a school district or charter school is calculated to be less than 4%, this bill would require the inflation adjustment for the base grant for a school district or charter school to instead be 4%. The bill would require the State Department of Education, on or before January 1, 2030, to establish and publish on its internet website regional cost adjustment factors in order address regional cost differences in housing and labor, and, commencing with the 2030–31 fiscal year, would require the adjustment to the base grant, whether calculated by the inflation adjustment or 4%, as applicable, to be further adjusted by multiplying that calculation by the applicable regional cost adjustment factor. (2) Existing law requires the local control funding formula to include, in addition to the base grant, supplemental and concentration grant add-ons that are based on the percentage of pupils who are unduplicated pupils, as defined to include English learners, pupils eligible for free or reduced-price meals, and foster youth, as specified. Existing law requires school districts and charter schools to annually report their enrollment of unduplicated pupils to the Superintendent of Public Instruction, as specified, and requires county superintendents of schools to review and validate that pupil data, as provided. Existing law requires pupils who are classified in more than one of these groups to be counted only once for these purposes. The bill would add pupils experiencing homelessness, as defined, to the categories of pupils who are unduplicated pupils for purposes of determining eligibility for supplemental and concentration grants. The bill would require foster youth and pupils experiencing homelessness who are both a foster youth and a pupil experiencing homelessness, or who are either a foster youth or pupil experiencing homelessness, or both, and also either eligible for free or reduced-price meals or an English learner, to instead be counted either only twice or 3 times, as specified. The bill would place reporting requirements on school districts and charter schools to implement these provisions. By imposing additional duties on county superintendents of schools, school districts, and charter schools related to reporting unduplicated pupils, the bill would impose a state-mandated local program. (3) Existing law requires the supplemental grant add-on to be equal to 20% of the base grants, as adjusted, for each school district’s or charter school’s percentage of unduplicated pupils, as specified, and requires the concentration grant add-on to be equal to 65% of the base grants, as adjusted, 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, as specified. Existing law requires the State Board of Education to adopt regulations that govern the expenditure of funds apportioned on the basis of the number and concentration of unduplicated pupils, as provided. This bill, commencing with the 2030–31 fiscal year, would require the supplemental grant add-on to instead be equal to 35% of the base grants, as adjusted, for each school district’s or charter school’s percentage of unduplicated pupils, as specified, and would require the concentration grant add-on to instead be equal to 65% of the base grants, as adjusted, for each school district’s or charter school’s percentage of unduplicated pupils in excess of 45% of the school district’s or charter school’s total enrollment, as specified. (4) This The bill would establish transition adjustments for the 2025–26 fiscal year to the 2029–30 fiscal years, inclusive, to be calculated by the Superintendent of Public Instruction for each school district and charter school based on increased funding that would have been generated by the changes to supplemental and concentration grant eligibility and percentages described above, as provided. The bill would continuously appropriate the moneys necessary to implement those adjustments and would require the Superintendent to add those transition amounts to the school district’s and charter school’s local control funding formula amounts. The bill, notwithstanding any other law, would require any increase in apportionment to a school district or charter school due to the bill’s changes to the local control funding formula to be demonstrated to be used to support additional services for the targeted pupil group. To the extent the bill would impose additional duties on school districts and charter schools, the bill would impose a state-mandated local program. The bill, commencing with the 2025–26 fiscal year, would prohibit each school district and charter school from receiving less state aid under the local control funding formula for the then current fiscal year than they received in the 2024–25 fiscal year under the local control funding formula, as calculated on a per average daily attendance basis. (4) Existing law requires the Legislative Analyst’s Office, on or before January 1, 2026, to submit a report to the Legislature on the effects of changing the pupil count methodology of the local control funding formula from average daily attendance to pupil enrollment, as provided. This bill would require the Legislative Analyst’s Office, on or before January 1, 2027, to submit a report to the Legislature that studies the impact of the changes to the local control funding formula made by the bill within and between geographic regions of the state. (5) This bill would require the department, on or before January 1, 2028, to develop recommendations for adequacy adjustments to the grade span adjusted base grants in order to address the unique costs for each grade span and to account for the revisions to supplemental and concentration grants described above, and to report those recommendations to the appropriate policy and fiscal committees of the Legislature, as provided. The bill would state the intent of the Legislature to fully transition the local control funding formula commencing with the 2030–31 fiscal year consistent with those recommendations. (6) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. (7) Funds appropriated by this bill would be applied toward the minimum funding requirements for school districts and community college districts imposed by Section 8 of Article XVI of the California Constitution. Digest Key Vote: MAJORITY Appropriation: YES Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 42238.01 of the Education Code is amended to read: 42238.01. For purposes of Section 42238.02, the following definitions shall apply: (a) (1) “Eligible for free or reduced-price meals” means determined to meet federal income eligibility criteria, either through completing an application for the federal National School Lunch Program or through an alternative household income data collection form, or deemed to be categorically eligible for free or reduced-price meals under the federal National School Lunch Program, as described in Part 245 of Title 7 of the Code of Federal Regulations. (2) (A) A school participating in a special assistance alternative authorized by Section 11(a)(1) of the federal Richard B. Russell National School Lunch Act (Public Law 113-79), including Provision 2, Provision 3, or the Community Eligibility Provision, may establish a base year for purposes of the local control funding formula by doing either of the following: (i) Determining the pupils at the school who are eligible for free or reduced-price meals and using each pupil’s eligibility status in that base year to report eligibility for up to each of the following three school years. (ii) Carrying forward eligibility for pupils eligible for free or reduced-price meals from the school year in which the school applied to use a federal universal school meal provision, and using each pupil’s eligibility status from the application year to report eligibility for up to each of the following three school years. (B) The school may include between base year eligibility determinations, any current or newly enrolled pupils who are determined to be eligible for free or reduced-price meals. (3) A school that uses the special assistance alternative shall maintain information on each pupil’s eligibility status and annually submit information on that status in the California Longitudinal Pupil Achievement Data System pursuant to paragraph (2) of subdivision (b) of Section 42238.02 or subparagraph (A) of paragraph (3) of subdivision (b) of Section 2574, as applicable. (4) For a pupil who transfers to a school using a special assistance alternative and who is transferring between schools within the same school district, documentation supporting eligibility for that pupil for purposes of the local control funding formula may be transferred from the pupil’s old school to the pupil’s new school, as long as the documentation supporting eligibility for that pupil is less than four years old and is updated at least once every four years. (5) To the extent permitted by federal law, a school may choose to establish a new base year for purposes of the federal National School Lunch Program at the same time the school establishes a new base year for purposes of the local control funding formula. A school may use federal National School Lunch Program application forms to collect household income data as permitted under the federal National School Lunch Program. If the use of federal National School Lunch Program application forms is not permitted, a school shall use alternative household income data collection forms. (6) An alternative household income data collection form shall be confidential and shall not be shared by the school other than as necessary for purposes of determining funding allocations under the local control funding formula and for assessing the accountability of that funding. An alternative household income data collection form shall contain, at a minimum, all of the following information: (A) Information sufficient to identify the pupil or pupils. (B) Information sufficient to determine that the pupil or household meets federal income eligibility criteria sufficient to qualify for either a free or reduced-priced meal under the federal Richard B. Russell National School Lunch Act (Public Law 113-79). (C) Certification that the information is true and correct by the pupil’s adult household member. (7) Paragraphs (2) and (4) are effective commencing with the 2014–15 fiscal year. (b) “Foster youth” means any of the following: (1) A child who is the subject of a petition filed pursuant to Section 300 of the Welfare and Institutions Code, whether or not the child has been removed from the child’s home by the juvenile court pursuant to Section 319 or 361 of the Welfare and Institutions Code. (2) A child who is the subject of a petition filed pursuant to Section 602 of the Welfare and Institutions Code, has been removed from the child’s home by the juvenile court pursuant to Section 727 of the Welfare and Institutions Code, and is in foster care as defined by subdivision (d) of Section 727.4 of the Welfare and Institutions Code. (3) A nonminor under the transition jurisdiction of the juvenile court, as described in Section 450 of the Welfare and Institutions Code, who satisfies all of the following criteria: (A) The nonminor has attained 18 years of age while under an order of foster care placement by the juvenile court, and is not more than 19 years of age on or after January 1, 2012, not more than 20 years of age on or after January 1, 2013, and not more than 21 years of age, on or after January 1, 2014, and as described in Section 10103.5 of the Welfare and Institutions Code. (B) The nonminor is in foster care under the placement and care responsibility of the county welfare department, county probation department, Indian tribe, consortium of tribes, or tribal organization that entered into an agreement pursuant to Section 10553.1 of the Welfare and Institutions Code. (C) The nonminor is participating in a transitional independent living case plan pursuant to Section 475(8) of the federal Social Security Act (42 U.S.C. Sec. 675), as contained in the federal Fostering Connections to Success and Increasing Adoptions Act of 2008 (Public Law 110-351), as described in Section 11403 of the Welfare and Institutions Code. (4) A dependent child of the court of an Indian tribe, consortium of tribes, or tribal organization who is the subject of a petition filed in the tribal court pursuant to the tribal court’s jurisdiction in accordance with the tribe’s law. (5) A child who is the subject of a voluntary placement agreement, as defined in subdivision (p) of Section 11400 of the Welfare and Institutions Code. (c) “Pupil experiencing homelessness” means a pupil who meets the definition of “homeless children and youths” in subsection (2) of Section 725 of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11434a(2)). (d) “Pupils of limited English proficiency” means pupils who do not have the clearly developed English language skills of comprehension, speaking, reading, and writing necessary to receive instruction only i [Text truncated for display. Full text available on Congress.gov.]