AB2440 - Arts and Music in Schools—Funding Guarantee and Accountability Act: allowable uses: pooled funding: certifications.

Amended IN Senate August 28, 2026 Amended IN Senate August 21, 2026 Amended IN Senate August 13, 2026 Amended IN Senate June 08, 2026 Amended IN Assembly April 27, 2026 Amended IN Assembly March 19, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 2440 Introduced by Assembly Member Muratsuchi (Principal coauthor: Assembly Member Ward) February 20, 2026 An act to amend Sections 8820, 8821, and 8822 of the Education Code, relating to pupil instruction. LEGISLATIVE COUNSEL'S DIGEST AB 2440, as amended, Muratsuchi. Arts and Music in Schools—Funding Guarantee and Accountability Act: allowable uses: pooled funding: certifications. Existing law, the Arts and Music in Schools—Funding Guarantee and Accountability Act, an initiative measure approved by the voters as Proposition 28 at the November 8, 2022, statewide general election, provides a minimum source of annual funding to K–12 public schools, including public charter schools, to supplement arts education programs for pupils attending those schools, as specified. Existing law The act defines “arts education program” for these purposes to include, but not be limited to, instruction and training, supplies, materials, and arts educational partnership programs, for instruction in specified topics. Existing law The act requires the continuous appropriation for these purposes, without regard to fiscal years, from the General Fund to the State Department of Education, of an amount equal to 1% of the total state and local revenues received by local educational agencies in the preceding fiscal year that are included in the calculation of the minimum funding guarantee established by the California Constitution, as provided. Existing law The act requires funds appropriated pursuant to Proposition 28 to be allocated by the department to each local educational agency, and requires local educational agencies to allocate those funds to each schoolsite, pursuant to specified calculations. Existing law The act requires the principal or program director of each schoolsite or preschool to develop an expenditure plan for allocated funds. This bill would change the definition of “arts education program” to additionally include curriculum, instructional materials, and professional development, and would require all arts education programs to be consistent with the California Arts Standards for Public Schools, the California Arts Education Framework, or the California Preschool/Transitional Kindergarten Learning Foundations, as applicable. The bill would authorize local educational agencies to pool allocated funds and require, as a condition of this pooling, local educational agencies to ensure, among other things, (1) that expenditures for each schoolsite are in proportion to the allocation for each schoolsite and (2) compliance with the expenditure plan adopted by the principal or program director. Existing law The act requires, as a condition of receiving Proposition 28 funds, a local educational agency to, among other things, annually certify that the funds will be used to supplement arts education programs and not supplant existing funding for those programs, and that funds expended in the prior fiscal year were used to supplement arts education programs. This bill would require this certification to include specified calculations that compare existing funds available for arts education programs, as provided, with current year expenditures for arts education programs. The bill would require, in determining the existing funds available for arts education programs, a local educational agency to (1) subtract from the prior year total expenditures for arts programs expenditures from Proposition 28 funds and from resources that are no longer available in the current year, as provided, and (2) subsequently add newly available resources that are spent on arts education programs, excluding current year Proposition 28 funds. The bill would deem a local educational agency for which current year expenditures for arts education programs equal or exceed the calculations of existing funds available for arts education programs to be in compliance with the requirement to supplement arts education programs. Existing law The act also requires, as a condition of receiving Proposition 28 funds, a local educational agency to submit an annual governing board or body-approved report in a manner determined by the Superintendent of Public Instruction detailing program expenditures and to certify (1) that all funds will be used to provide arts education programs, and that funds expended in the prior fiscal year were, in fact, used for those purposes and (2), for local educational agencies with an enrollment of 500 or more pupils, that at least 80% of Proposition 28 funds will be used to employ certificated or classified employees to provide arts education program instruction, as provided, and authorizes the department, for good cause shown, to provide a waiver to these requirements. This bill would instead require the annual governing board or body-approved report to be submitted and posted on or before September 30 in a manner determined by the department. The bill would require each schoolsite or preschool to post on its internet website the above-described expenditure plan and information on granted waivers and would authorize a local educational agency to instead require this information to be posted on the local educational agency’s internet website. The bill would, commencing with the 2027–28 fiscal year, require a local educational agency to certify that all aspects provisions of Proposition 28 have been implemented properly in accordance with the requirements of Proposition 28 at each of its schoolsites. To the extent these provisions impose new duties on schoolsites or local educational agencies, the bill would impose a state-mandated local program. The bill would require the department to post approved waivers on its internet website. Existing law, on or before May 1 of each fiscal year, requires (1) the governing board of each school district to either provide for an audit of all funds under the control of that school district or make arrangements with the county superintendent of schools having jurisdiction over the school district to provide for that auditing, (2) the governing body of each charter school to either provide for an audit of all funds under the control of the charter school or make arrangements with the chartering authority to provide for that auditing, and (3) each county superintendent of schools to either provide for an audit of all funds under their jurisdiction and control or make arrangements with the Controller to provide for that auditing. The act requires annual audits of a local educational agency to include, for purposes of Proposition 28, (1) all funds received and distributed by the local educational agency pursuant to specified Proposition 28 provisions and (2) a determination of whether the funds were expended pursuant to the (A) certifications submitted by the local educational agency and (B) requirements of certain Proposition 28 provisions. This bill would delete the requirement that an annual audit of a local educational agency include a determination of whether Proposition 28 funds were expended pursuant to the requirements of certain Proposition 28 provisions. Proposition 28 authorizes the Legislature to amend its provisions by a 2 / 3 vote of each house if the amendment furthers its purposes. This bill would declare that the above-described provisions further the purposes of Proposition 28. 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. Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 8820 of the Education Code is amended to read: 8820. (a) The Arts and Music in Schools—Funding Guarantee and Accountability Act is hereby established for the purpose of providing a minimum source of annual funding for K–12 public schools, including public charter schools, to supplement arts education programs for pupils attending those schools. (b) (1) Commencing with the 2023–24 fiscal year, and for each fiscal year thereafter, there shall be continuously appropriated without regard to fiscal years from the General Fund to the department for purposes of this chapter, an amount that is equal to 1 percent of the total state and local revenues received by local educational agencies in the preceding fiscal year that are included in the calculation of the minimum funding guarantee established by Sections 8 and 8.5 of Article XVI of the California Constitution, excluding the appropriation made pursuant to this chapter. (2) The Director of Finance shall calculate and publish the amount required to be appropriated by this chapter as part of the annual May Revision of the Governor’s Budget. The amount required to be appropriated by this chapter for each subsequent fiscal year shall be considered final as of the annual May Revision of the Governor’s Budget for the subsequent fiscal year. The Director of Finance shall publish the required appropriation amount by January 10 each fiscal year as part of the director’s duties pursuant to subdivision (d) of Section 41206.01. (3) Notwithstanding any other law, for purposes of making the computations required by subdivision (b) of Section 8 of Article XVI of the California Constitution: (A) For the 2023–24 fiscal year, the appropriations made pursuant to this subdivision shall be deemed supplementary payments in excess of the minimum amount required for the 2023–24 fiscal year pursuant to Section 8 of Article XVI of the California Constitution and shall not be considered towards fulfilling the requirements of Section 8 of Article XVI of the California Constitution for the 2023–24 fiscal year. (B) For subsequent fiscal years, the appropriations made pursuant to this subdivision shall be considered moneys that were allocated to school districts from General Fund proceeds of taxes appropriated pursuant to Article XIII B of the California Constitution. (C) Commencing with the 2024–25 fiscal year, and each fiscal year thereafter, “the percentage of General Fund revenues appropriated for school districts and community college districts, respectively, in fiscal year 1986–87,” for purposes of paragraph (1) of subdivision (b) of Section 8 of Article XVI of the California Constitution, shall be deemed to be the percentage of General Fund revenues that would have been appropriated for those entities if the share of the General Fund of the supplementary payments calculated pursuant to this subdivision in the prior fiscal year had been included in the percentage of General Fund revenues appropriated for school districts and community college districts, respectively, in fiscal year 1986–87. (c) Funds appropriated pursuant to this chapter shall be allocated by the department to each local educational agency as the sum of the amount calculated pursuant to paragraph (1) and the amount calculated pursuant to paragraph (2) for each schoolsite in that local educational agency, as follows: (1) An amount equal to the product of 70 percent of the funding appropriated in subdivision (b) multiplied by the school’s enrollment in the prior fiscal year, divided by the total statewide enrollment in the prior fiscal year of local educational agencies. (2) An amount equal to the product of 30 percent of the funds appropriated in subdivision (b) multiplied by the school’s enrollment of economically disadvantaged pupils in the prior fiscal year, divided by the total statewide enrollment of economically disadvantaged pupils in the prior fiscal year of local educational agencies. For schools serving preschool pupils, the enrollment of economically disadvantaged preschool pupils shall be deemed to equal the enrollment of preschool pupils in the prior fiscal year multiplied by the same percentage of pupils that are economically disadvantaged at the elementary schoolsite with the highest percentage of economically disadvantaged pupils in the prior year within the preschool’s local educational agency. If there is no elementary school within the preschool’s local educational agency, the enrollment of economically disadvantaged preschool pupils shall be deemed to equal the enrollment of preschool pupils in the prior fiscal year multiplied by the same percentage of pupils that are economically disadvantaged at the elementary schoolsite with the highest percentage of economically disadvantaged pupils in the prior year within the preschool’s county. (d) Local educational agencies shall allocate to each schoolsite an amount equal to the sum of the amount calculated pursuant to paragraph (1) of subdivision (c) and the amount calculated pursuant to paragraph (2) of subdivision (c). (e) Local educational agencies may pool funds allocated pursuant to this chapter. Local educational agencies shall, as a condition of pooling funds, comply with all of the following requirements: (1) Ensure compliance with all applicable requirements of this chapter. (2) Ensure that expenditures for each schoolsite are in proportion to the allocation for each schoolsite as determined pursuant to subdivision (d). (3) Ensure compliance with an expenditure plan adopted pursuant to subdivision (f). (f) (1) For each schoolsite or preschool, the principal or program director shall develop an expenditure plan for the funds allocated pursuant to subdivision (d). (2) (A) Except as provided in subparagraph (B), each schoolsite or preschool shall post on its internet website the expenditure plan developed pursuant to paragraph (1) and, if applicable, information on waivers granted pursuant to subdivision (i). (B) A local educational agency may require its schoolsites and preschools to post the information required by subparagraph (A) on the local educational agency’s internet website instead of on the schoolsite or preschool’s internet website. (g) (1) Funds allocated pursuant to subdivision (d) shall be available for use for up to three fiscal years after which time the unexpended funds shall be reverted to the department, which shall reallocate those funds to all local educational agencies in the following fiscal year pursuant to subdivision (c). (2) Local educational agencies are required to report to the department the amount of unexpended funds by October 1 following the conclusion of the expenditure period pursuant to paragraph (1). If a charter school ceases to operate, a final expenditure report sha [Text truncated for display. Full text available on Congress.gov.]