§ 41206.04. — 41206.04. (Amended by Stats. 2025, Ch. 744, Sec. 2.)
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(a)
(1)
The Legislature finds and declares all of the following:
(A)
The calculation of the state’s minimum funding obligation pursuant to subdivision (b) of Section 8 of Article XVI of the California Constitution must be based upon actual tax revenue data when it is available.
(B)
Due to winter storms in early 2023, the United States Internal Revenue Service extended the tax filing deadlines for the 2022 tax year to November 16, 2023, for over 99 percent of California taxpayers. The Franchise Tax Board conformed to this action and extended the state income and corporate tax filing deadlines to November 16, 2023. Because of these extensions, the Legislature did not have
actual 2022 tax revenue data at the time the Budget Act of 2023 (Chs. 12, 38, and 189, Stats. 2023) was enacted upon which to determine the accurate state minimum funding obligation for the 2022–23 fiscal year.
(C)
Due to the lack of actual tax revenue data, the minimum funding obligation for the 2022–23 fiscal year funded in the Budget Act of 2023 was in total six billion one hundred ninety-two million nine hundred twenty-nine thousand dollars ($6,192,929,000) over the minimum funding obligation computed with actual tax revenue data.
(2)
It is the intent of the Legislature to do all of the following:
(A)
Provide a methodology in this section to account for the costs identified in subparagraph (C) of paragraph (1).
(B)
Reflect the minimum funding
obligation to school districts and community colleges pursuant to Section 8 of Article XVI of the California Constitution in the 2023–24 fiscal year.
(C)
Provide a methodology to keep future fiscal years open for the purpose of computing the minimum funding obligation in any fiscal year in which a significant proportion of actual tax revenue data is not available before May 1 due to extraordinary personal and corporate tax filing extensions, without reducing school funding already allocated in an impacted fiscal year.
(b)
(1)
For purposes of Section 41206.03, five billion four hundred twenty-two million one hundred forty-three thousand dollars
($5,422,143,000) allocated in the 2022–23 fiscal year to support school district and charter school local control funding formula apportionments pursuant to Sections 42238.02 and 42238.03 and the associated warrants issued pursuant to Section 14041 shall be considered excess moneys credited to the 2022–23 fiscal year only for the purposes of determining the state’s minimum funding obligation to school districts and community college districts in the 2022–23 and 2023–24 fiscal years pursuant to Section 8 of Article XVI of the California Constitution.
(2)
For purposes of Section 41206.03, seven hundred seventy million seven hundred eighty-six thousand dollars ($770,786,000) allocated in the 2022–23 fiscal year to support community college student centered funding formula apportionments pursuant to Section 84750.4 and the associated warrants issued pursuant to Section 84320 shall be considered excess
moneys credited to the 2022–23 fiscal year only for the purposes of determining the state’s minimum funding obligation to school districts and community college districts in the 2022–23 and 2023–24 fiscal years pursuant to Section 8 of Article XVI of the California Constitution.
(c)
(1)
(A)
(i)
In the 2027–28 fiscal year, and annually for
11 fiscal years thereafter through the 2038–39 fiscal year, four hundred thirty-seven million seven hundred sixty-nine thousand dollars ($437,769,000) of the amount described in paragraph (1) of subdivision (b) shall be recognized for budgetary and financial reporting purposes, pursuant to Section 12460 of the Government Code, as an allocation from the General Fund to the Superintendent for local control funding formula entitlements attributable to the 2022–23 fiscal year pursuant to Sections
42238.02 and 42238.03, and the associated warrants issued pursuant to Section 14041, in the 2022–23 fiscal year.
(ii)
In the 2039–40 fiscal year, one hundred sixty-eight million nine hundred fifteen thousand dollars ($168,915,000) of the amount described in paragraph (1) of subdivision (b) shall be recognized for budgetary and financial reporting purposes, pursuant to Section 12460 of the Government Code, as an allocation from the General Fund to the Superintendent for local control funding formula entitlements attributable to the 2022–23 fiscal year pursuant to Sections 42238.02 and 42238.03, and the associated warrants issued pursuant to Section 14041, in the 2022–23 fiscal year.
(B)
(i)
In the 2027–28 fiscal year, and annually for 11 fiscal years thereafter through the 2038–39 fiscal year, sixty-two million two hundred thirty-one thousand dollars ($62,231,000) of the amount described in paragraph (2) of subdivision (b) shall be recognized for budgetary and financial reporting purposes, pursuant to Section 12460 of the Government Code, as an allocation from the General Fund to the Board of Governors of the California Community Colleges to support student centered funding formula entitlements attributable to the 2022–23 fiscal year pursuant to Section 84750.4, and the associated warrants issued pursuant to Section 84320, in the 2022–23 fiscal year.
(ii)
In the 2039–40 fiscal year, twenty-four million fourteen thousand dollars ($24,014,000) of the amount described in paragraph (2) of subdivision (b) shall be
recognized for budgetary and financial reporting purposes, pursuant to Section 12460 of the Government Code, as an allocation from the General Fund to the Board of Governors of the California Community Colleges to support student centered funding formula entitlements attributable to the 2022–23 fiscal year pursuant to Section 84750.4, and the associated warrants issued pursuant to Section 84320, in the 2022–23 fiscal year.
(2)
Paragraph (1) requires only that the specified portions of the allocations made in the 2022–23 fiscal year be recognized for budgetary and financial reporting purposes in the specified fiscal years, and nothing in paragraph (1) shall be interpreted to make new appropriations of those amounts described in paragraph (1) in the specified fiscal years.
(3)
The recognition of the amounts described in paragraph (1) for budgetary and
financial reporting purposes shall not be credited as General Fund revenues appropriated to school districts and community colleges to meet the state’s minimum funding obligation to school districts and community college districts pursuant to Section 8 of Article XVI of the California Constitution in the fiscal year in which the recognition occurs and shall not be included in the total allocations to school districts and community college districts from General Fund proceeds of taxes pursuant to Article XIII
B of the California Constitution in the fiscal year in which the recognition occurs.
(d)
(1)
Commencing with the 2024–25 fiscal year and each fiscal year thereafter, this subdivision applies to any fiscal year in which California personal and corporate income tax filing deadlines are extended to conform with filing extensions announced by the United States Internal Revenue Service, which result
in the delay of personal and corporate tax revenue collection until after May 1 in counties that in total contributed more than 50 percent of the state’s total personal and corporate tax revenue in the fiscal year immediately preceding the fiscal year impacted by the tax filing extension.
(2)
For any impacted fiscal year for which this subdivision applies pursuant to paragraph (1), the Director of Finance shall, for purposes of Sections 41206.01 and 41206.03, consider the applicable fiscal year to be open until actual tax revenue data is available but no later than January 10 of the subsequent fiscal year. Upon actual tax revenue data being available or the January 10 deadline having passed, whichever occurs first, the Director of Finance shall subtract the total appropriations made to meet the state’s estimated minimum funding obligation for the support of school districts and community college districts pursuant to subdivision (b) of Section
8 of Article XVI of the California Constitution in the impacted fiscal year from the minimum funding obligation for the support of school districts and community college districts pursuant to subdivision (b) of Section 8 of Article XVI of the California Constitution calculated with actual tax revenue data for the impacted fiscal year.
(3)
If the difference calculated pursuant to paragraph (2) is negative, meaning the total appropriations made to meet the estimated minimum funding obligation for the support of school districts and community college districts in the impacted fiscal year exceeded the minimum funding obligation to school districts and community college districts calculated with actual tax revenue data for the impacted fiscal year, all of the following apply:
(A)
The difference shall not be considered General Fund revenues appropriated to school districts and community
colleges to meet the state’s minimum funding obligation pursuant to Section 8 of Article XVI of the California Constitution in the impacted fiscal year in which the allocations were made.
(B)
The difference shall not be included in the total allocations to school districts and community college districts from General Fund proceeds of taxes pursuant to Article XIII
B of the California Constitution made in the impacted fiscal year in which the allocation is made for purposes of calculating the state’s minimum funding obligation pursuant to Section 8 of Article XVI of the California Constitution in the subsequent fiscal year.
(C)
The difference shall not be considered excess moneys credited to the fiscal year certified pursuant to subdivision (b) of Section 41206.03.
(4)
Of the amount calculated
pursuant to paragraph (2), the Department of Finance shall determine the respective amounts that are not to be considered General Fund appropriations to school districts and community colleges to meet the state’s minimum funding obligation pursuant to Section 8 of Article XVI of the California Constitution and that shall be attributable to (A) local control funding formula entitlements pursuant to Sections 42238.02 and 42238.03 and the associated warrants issued pursuant to Section 14041 for the impacted fiscal year and (B) student centered funding formula entitlements pursuant to Section 84750.4 and the associated warrants issued pursuant to Section 84320 for the impacted fiscal year.
(5)
(A)
If the amount calculated pursuant to paragraph (2) is negative, in the third fiscal year following the impacted fiscal year, and annually for nine fiscal years immediately thereafter, 10 equal shares of the amounts calculated by the
Department of Finance pursuant to paragraph (4) shall be recognized for budgetary and financial reporting purposes, pursuant to Section 12460 of the Government Code, as an allocation from the General Fund to both of the following:
(i)
The Superintendent, to support local control funding formula entitlements pursuant to Sections 42238.02 and 42238.03, and the associated warrants issued pursuant to Section 14041, for the applicable fiscal year, in an amount equal to 89.07 percent of the total calculated pursuant to paragraph (2).
(ii)
The Board of Governors of the California Community Colleges, to support student centered funding formula entitlements pursuant to Section 84750.4, and the associated warrants issued pursuant to Section 84320, for the applicable fiscal year, in an amount equal to 10.93 percent of the total calculated pursuant to paragraph (2).
(B)
Subparagraph (A) requires only that the specified portions of the allocations made in the impacted fiscal year be recognized for budgetary and financial reporting purposes in the specified fiscal years, and nothing in subparagraph (A) shall be interpreted to make new appropriations of the amounts described in subparagraph (A) in the specified fiscal years.
(6)
The recognition of the amounts described in paragraph (5) for budgetary and financial reporting purposes shall not be considered General Fund revenues appropriated to school districts and community colleges to meet the state’s minimum funding obligation to school districts and community college districts pursuant to Section 8 of Article XVI of the California Constitution in the fiscal year in which the recognition occurs and shall not be included in the total allocations to school districts and community college districts
from General Fund proceeds of taxes pursuant to Article XIII
B of the California Constitution in the fiscal year in which the recognition occurs.
California § 41206.04. (41206.04. (Amended by Stats. 2025, Ch. 744, Sec. 2.)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.