Bill Text: CA SB1047 | 2013-2014 | Regular Session | Introduced
Bill Title: Education finance: budgets: long-term obligations.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-04-24 - Set, final hearing. Hearing canceled at the request of author. Returned to Secretary of Senate pursuant to Joint Rule 62(a). [SB1047 Detail]
Download: California-2013-SB1047-Introduced.html
BILL NUMBER: SB 1047 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Walters
FEBRUARY 18, 2014
An act to amend Sections 1622 and 42127 of the Education Code,
relating to education finance.
LEGISLATIVE COUNSEL'S DIGEST
SB 1047, as introduced, Walters. Education finance: budgets:
long-term obligations.
Existing law, on or before July 1 of each fiscal year, requires
the county board of education to adopt an annual budget for the
budget year and file the budget with the Superintendent of Public
Instruction, the county board of supervisors, and the county auditor.
Existing law requires the Superintendent to examine the budget, as
specified, and, on or before August 15, approve or disapprove the
budget.
This bill would authorize the Superintendent to disapprove the
adopted budget of a county board of education if it does not disclose
the long-term actuarial obligations of the county office of
education, including, but not limited to, the debts and retiree
obligations of the county office of education.
Existing law, on or before July 1 of each fiscal year, requires
the governing board of a school district to, among other things,
adopt a budget and file that budget with the county superintendent of
schools within 5 days of the adoption or by July 1, whichever occurs
first. Existing law requires the county superintendent of schools to
examine the budget, as specified, and, on or before August 15,
approve, conditionally approve, or disapprove the adopted budget.
This bill would authorize the county superintendent of schools to
disapprove the adopted budget of a school district if it does not
disclose the long-term actuarial obligations of the school district,
including, but not limited to, the debts and retiree obligations of
the school district.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1622 of the Education Code is amended to read:
1622. (a) On or before July 1 of each fiscal year, the county
board of education shall adopt an annual budget for the budget year
and shall file the budget with the Superintendent, the county board
of supervisors, and the county auditor. The budget, and supporting
data, shall be maintained and made available for public review. The
budget shall indicate the date, time, and location at which the
county board of education held the public hearing required under
Section 1620. For the 2014-15 fiscal year and each fiscal year
thereafter, the county board of education shall not adopt a budget
before the county board of education adopts a local control and
accountability plan or approves an update to an existing local
control and accountability plan if an existing local control and
accountability plan or update to a local control and accountability
plan is not effective during the budget year. The county board of
education shall not adopt a budget that does not include the
expenditures identified in the local control and accountability plan
and any annual update to the local control and accountability plan
that will be effective in the subsequent fiscal year. Notwithstanding
any other provision of this article, for the 2014-15 fiscal year and
each fiscal year thereafter, the budget shall not be adopted or
approved by the Superintendent before a local control and
accountability plan or update to an existing local control and
accountability plan for the budget year is approved.
(b) (1) The Superintendent shall examine the budget to determine
if it (A) complies with the standards and criteria adopted by the
state board pursuant to Section 33127 for application to final local
educational agency budgets, (B) allows the county office of education
to meet its financial obligations during the fiscal year, and (C) is
consistent with a financial plan that will enable the county office
of education to satisfy its multiyear financial commitments. In
addition, the Superintendent shall identify any technical corrections
to the budget that must be made. On or before August 15, the
Superintendent shall approve or disapprove the budget and, in the
event of a disapproval, transmit to the county office of education in
writing his or her recommendations regarding revision of the budget
and the reasons for those recommendations.
(2) The Superintendent may disapprove the adopted budget of a
county board of education if it does not disclose the long-term
actuarial obligations of the county office of education, including,
but not limited to, the debts and retiree obligations of the county
office of education.
(2)
(3) For the 2011-12 fiscal year, notwithstanding any of
the standards and criteria adopted by the state board pursuant to
Section 33127, the Superintendent, as a condition on approval of a
county office of education budget, shall not require a county office
of education to project a lower level of revenue per unit of average
daily attendance than it received in the 2010-11 fiscal year nor
require the county superintendent to certify in writing whether or
not the county office of education is able to meet its financial
obligations for the two subsequent fiscal years.
(3)
(4) For the 2014-15 fiscal year and each fiscal year
thereafter, the Superintendent shall disapprove a budget if any of
the following occur:
(A) The Superintendent has not approved a local control and
accountability plan or an annual update to the local control and
accountability plan filed by a county superintendent of schools
pursuant to Section 52067.
(B) The Superintendent determines that the budget does not include
the expenditures necessary to implement the local control and
accountability plan or an annual update to the local control and
accountability plan that is effective for that budget year.
(c) On or before September 8, the county board of education shall
revise the county office of education budget to reflect changes in
projected income or expenditures subsequent to July 1, and to include
any response to the recommendations of the Superintendent, shall
adopt the revised budget, and shall file the revised budget with the
Superintendent, the county board of supervisors, and the county
auditor. Before revising the budget, the county board of education
shall hold a public hearing regarding the proposed revisions, which
shall be made available for public inspection not less than three
working days before the hearing. The agenda for that hearing shall be
posted at least 72 hours before the public hearing and shall include
the location where the budget will be available for public
inspection. The revised budget, and supporting data, shall be
maintained and made available for public review.
(d) (1) The Superintendent shall examine the revised budget to
determine if it complies with the standards and criteria adopted by
the state board pursuant to Section 33127 for application to final
local educational agency budgets and, no later than October 8, shall
approve or disapprove the revised budget. For the 2014-15 fiscal year
and each fiscal year thereafter, the Superintendent shall disapprove
a revised budget if the Superintendent determines that the revised
budget does not include the expenditures necessary to implement the
local control and accountability or an annual update to the local
control and accountability plan approved by the Superintendent
pursuant to Section 52067. If the Superintendent disapproves the
budget, he or she shall call for the formation of a budget review
committee pursuant to Section 1623. For the 2011-12 fiscal year,
notwithstanding any of the standards and criteria adopted by the
state board pursuant to Section 33127, the Superintendent, as a
condition on approval of a county office of education budget, shall
not require a county office of education to project a lower level of
revenue per unit of average daily attendance than it received in the
2010-11 fiscal year nor require the county superintendent to certify
in writing whether or not the county office of education is able to
meet its financial obligations for the two subsequent fiscal years.
(2) Notwithstanding any other law, for the 2014-15 fiscal year and
each fiscal year thereafter, if the Superintendent disapproves the
budget for the sole reason that the Superintendent has not approved a
local control and accountability plan or an annual update to the
local control and accountability plan filed by the county
superintendent of schools pursuant to Section 52067, the
Superintendent shall not call for the formation of a budget review
committee pursuant to Section 1623.
(e) Notwithstanding any other provision of this section, the
budget review for a county office of education shall be governed by
paragraphs (1), (2), and (3) of this subdivision, rather than by
subdivisions (c) and (d), if the county board of education so elects,
and notifies the Superintendent in writing of that decision, no
later than October 31 of the immediately preceding calendar year.
(1) In the event of the disapproval of the budget of a county
office of education pursuant to subdivision (b), on or before
September 8, the county superintendent of schools and the county
board of education shall review the recommendations of the
Superintendent at a regularly scheduled meeting of the county board
of education and respond to those recommendations. That response
shall include the proposed actions to be taken, if any, as a result
of those recommendations.
(2) No later than On or before
October 8, after receiving the response required under paragraph (1),
the Superintendent shall review that response and either approve or
disapprove the budget of the county office of education. For the
2014-15 fiscal year and each fiscal year thereafter, the
Superintendent shall disapprove a budget if the Superintendent
determines that the budget adopted by the county board of education
does not include the expenditures necessary to implement the local
control and accountability plan or an annual update to the local
control and accountability plan approved by the Superintendent
pursuant to Section 52067. Except as provided in paragraph (2) of
subdivision (d), if the Superintendent disapproves the budget, he or
she shall call for the formation of a budget review committee
pursuant to Section 1623.
(3) Not later than 45 days after the Governor signs the annual
Budget Act, the county office of education shall make available for
public review any revisions in revenues and expenditures that it has
made to its budget to reflect the funding made available by that
Budget Act.
SEC. 2. Section 42127 of the Education Code is amended to read:
42127. (a) On or before July 1 of each year, the governing board
of each school district shall accomplish the following:
(1) Hold a public hearing on the budget to be adopted for the
subsequent fiscal year. The budget to be adopted shall be prepared in
accordance with Section 42126. The agenda for that hearing shall be
posted at least 72 hours before the public hearing and shall include
the location where the budget will be available for public
inspection.
(A) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each school district budget shall project the same level of
revenue per unit of average daily attendance as it received in the
2010-11 fiscal year and shall maintain staffing and program levels
commensurate with that level.
(B) For the 2011-12 fiscal year, the school district shall not be
required to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
(2) Adopt a budget. Not later than five days after that adoption
or by July 1, whichever occurs first, the governing board of the
school district shall file that budget with the county superintendent
of schools. The budget and supporting data shall be maintained and
made available for public review. If the governing board of the
school district does not want all or a portion of the property tax
requirement levied for the purpose of making payments for the
interest and redemption charges on indebtedness as described in
paragraph (1) or (2) of subdivision (b) of Section 1 of Article XIII
A of the California Constitution, the budget shall include a
statement of the amount or portion for which a levy shall not be
made. For the 2014-15 fiscal year and each fiscal year thereafter,
the governing board of the school district shall not adopt a budget
before the governing board of the school district adopts a local
control and accountability plan, if an existing local control and
accountability plan or annual update to a local control and
accountability plan is not effective for the budget year. The
governing board of a school district shall not adopt a budget that
does not include the expenditures necessary to implement the local
control and accountability plan or the annual update to a local
control and accountability plan that is effective during the
subsequent fiscal year.
(b) The county superintendent of schools may accept changes in any
statement included in the budget, pursuant to subdivision (a), of
the amount or portion for which a property tax levy shall not be
made. The county superintendent of schools or the county auditor
shall compute the actual amounts to be levied on the property tax
rolls of the school district for purposes that exceed apportionments
to the school district pursuant to Chapter 6 (commencing with Section
95) of Part 0.5 of Division 1 of the Revenue and Taxation Code. Each
school district shall provide all data needed by the county
superintendent of schools or the county auditor to compute the
amounts. On or before August 15, the county superintendent of schools
shall transmit the amounts computed to the county auditor who shall
compute the tax rates necessary to produce the amounts. On or before
September 1, the county auditor shall submit the rate computed to the
board of supervisors for adoption.
(c) The county superintendent of schools shall do all of the
following:
(1) Examine the adopted budget to determine whether it complies
with the standards and criteria adopted by the state board pursuant
to Section 33127 for application to final local educational agency
budgets. The county superintendent of schools shall identify, if
necessary, technical corrections that are required to be made to
bring the budget into compliance with those standards and criteria.
(2) Determine whether the adopted budget will allow the school
district to meet its financial obligations during the fiscal year and
is consistent with a financial plan that will enable the school
district to satisfy its multiyear financial commitments. In addition
to his or her own analysis of the budget of each school district, the
county superintendent of schools shall review and consider studies,
reports, evaluations, or audits of the school district that were
commissioned by the school district, the county superintendent of
schools, the Superintendent, and state control agencies and that
contain evidence that the school district is showing fiscal distress
under the standards and criteria adopted in Section 33127 or that
contain a finding by an external reviewer that more than 3 of the 15
most common predictors of a school district needing intervention, as
determined by the County Office Fiscal Crisis and Management
Assistance Team, are present. The county superintendent of schools
shall either conditionally approve or disapprove a budget that does
not provide adequate assurance that the school district will meet its
current and future obligations and resolve any problems identified
in studies, reports, evaluations, or audits described in this
paragraph.
(3) Determine whether the adopted budget includes the expenditures
necessary to implement the local control and accountability plan or
annual update to the local control and accountability plan approved
by the county superintendent of schools.
(d) (1) On or before August 15, the county superintendent of
schools shall approve, conditionally approve, or disapprove the
adopted budget for each school district. For the 2014-15 fiscal year
and each fiscal year thereafter, the county superintendent of schools
shall disapprove a budget if the county superintendent of schools
determines that the budget does not include the expenditures
necessary to implement a local control and accountability plan or an
annual update to the local control and accountability plan approved
by the county superintendent of schools. If a school district does
not submit a budget to the county superintendent of schools, the
county superintendent of schools shall develop, at school district
expense, a budget for that school district by September 15 and
transmit that budget to the governing board of the school district.
The budget prepared by the county superintendent of schools shall be
deemed adopted, unless the county superintendent of schools approves
any modifications made by the governing board of the school district.
The approved budget shall be used as a guide for the school district'
s priorities. The Superintendent shall review and certify the budget
approved by the county. If, pursuant to the review conducted pursuant
to subdivision (c), the county superintendent of schools determines
that the adopted budget for a school district does not satisfy
paragraph (1), (2), or (3) of that subdivision, he or she shall
conditionally approve or disapprove the budget and, not later than
August 15, transmit to the governing board of the school district, in
writing, his or her recommendations regarding revision of the budget
and the reasons for those recommendations, including, but not
limited to, the amounts of any budget adjustments needed before he or
she can approve that budget. The county superintendent of schools
may assign a fiscal adviser to assist the school district to develop
a budget in compliance with those revisions. In addition, the county
superintendent of schools may appoint a committee to examine and
comment on the superintendent's review and recommendations, subject
to the requirement that the committee report its findings to the
county superintendent of schools no later than August 20. For the
2011-12 fiscal year, notwithstanding any of the standards and
criteria adopted by the state board pursuant to Section 33127, the
county superintendent of schools, as a condition on approval of a
school district budget, shall not require a school district to
project a lower level of revenue per unit of average daily attendance
than it received in the 2010-11 fiscal year nor require the school
district to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
(2) Notwithstanding any other provision of this article, for the
2014-15 fiscal year and each fiscal year thereafter, the budget shall
not be adopted or approved by the county superintendent of schools
before a local control and accountability plan or update to an
existing local control and accountability plan for the budget year is
approved.
(3) The county superintendent of schools may disapprove the
adopted budget of a school district if it does not disclose the
long-term actuarial obligations of the school district, including,
but not limited to, the debt and retiree obligations of the school
district.
(e) On or before September 8, the governing board of the school
district shall revise the adopted budget to reflect changes in
projected income or expenditures subsequent to July 1, and to include
any response to the recommendations of the county superintendent of
schools, shall adopt the revised budget, and shall file the revised
budget with the county superintendent of schools. Before revising the
budget, the governing board of the school district shall hold a
public hearing regarding the proposed revisions, to be conducted in
accordance with Section 42103. In addition, if the adopted budget is
disapproved pursuant to subdivision (d), the governing board of the
school district and the county superintendent of schools shall review
the disapproval and the recommendations of the county superintendent
of schools regarding revision of the budget at the public hearing.
The revised budget and supporting data shall be maintained and made
available for public review.
(1) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each school district budget shall project the same level of
revenue per unit of average daily attendance as it received in the
2010-11 fiscal year and shall maintain staffing and program levels
commensurate with that level.
(2) For the 2011-12 fiscal year, the school district shall not be
required to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.
(f) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which budgets may be disapproved.
(g) (1) The county superintendent of schools shall examine the
revised budget to determine whether it (1) complies with the
standards and criteria adopted by the state board pursuant to Section
33127 for application to final local educational agency budgets, (2)
allows the school district to meet its financial obligations during
the fiscal year, (3) satisfies all conditions established by the
county superintendent of schools in the case of a conditionally
approved budget, and (4) is consistent with a financial plan that
will enable the school district to satisfy its multiyear financial
commitments, and, not later than October 8, shall approve or
disapprove the revised budget. If the county superintendent of
schools disapproves the budget, he or she shall call for the
formation of a budget review committee pursuant to Section 42127.1,
unless the governing board of the school district and the county
superintendent of schools agree to waive the requirement that a
budget review committee be formed and the department approves the
waiver after determining that a budget review committee is not
necessary. Upon the grant of a waiver, the county superintendent of
schools immediately has the authority and responsibility provided in
Section 42127.3. Upon approving a waiver of the budget review
committee, the department shall ensure that a balanced budget is
adopted for the school district by November 30. If no budget is
adopted by November 30, the Superintendent may adopt a budget for the
school district. The Superintendent shall report to the Legislature
and the Director of Finance by December 10 if any school district,
including a school district that has received a waiver of the budget
review committee process, does not have an adopted budget by November
30. This report shall include the reasons why a budget has not been
adopted by the deadline, the steps being taken to finalize budget
adoption, the date the adopted budget is anticipated, and whether the
Superintendent has or will exercise his or her authority to adopt a
budget for the school district. For the 2011-12 fiscal year,
notwithstanding any of the standards and criteria adopted by the
state board pursuant to Section 33127, the county superintendent of
schools, as a condition on approval of a school district budget,
shall not require a school district to project a lower level of
revenue per unit of average daily attendance than it received in the
2010-11 fiscal year nor require the school district to demonstrate
that it is able to meet its financial obligations for the two
subsequent fiscal years.
(2) Notwithstanding any other law, for the 2014-15 fiscal year and
each fiscal year thereafter, if the county superintendent of schools
disapproves the budget for the sole reason that the county
superintendent of schools has not approved a local control and
accountability plan or an annual update to the local control and
accountability plan filed by the school district pursuant to Section
52061, the county superintendent of schools shall not call for the
formation of a budget review committee pursuant to Section 42127.1.
(h) Not later than On or before
October 8, the county superintendent of schools shall submit a
report to the Superintendent identifying all school districts for
which budgets have been disapproved or budget review committees
waived. The report shall include a copy of the written response
transmitted to each of those school districts pursuant to paragraph
(1) of subdivision (d).
(i) Notwithstanding any other provision of this section, the
budget review for a school district shall be governed by paragraphs
(1), (2), and (3), rather than by subdivisions (e) and (g), if the
governing board of the school district so elects and notifies the
county superintendent of schools in writing of that decision, not
later than October 31 of the immediately preceding calendar year. On
or before July 1, the governing board of a school district for which
the budget review is governed by this subdivision, rather than by
subdivisions (e) and (g), shall conduct a public hearing regarding
its proposed budget in accordance with Section 42103.
(1) If the adopted budget of a school district is disapproved
pursuant to subdivision (d), on or before September 8, the governing
board of the school district, in conjunction with the county
superintendent of schools, shall review the superintendent's
recommendations at a regular meeting of the governing board of the
school district and respond to those recommendations. The response
shall include any revisions to the adopted budget and other proposed
actions to be taken, if any, as a result of those recommendations.
(2) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which a budget may be tentatively disapproved.
(3) Not later than October 8, after receiving the response
required under paragraph (1), the county superintendent of schools
shall review that response and either approve or disapprove the
budget. Except as provided in paragraph (2) of subdivision (g), if
the county superintendent of schools disapproves the budget, he or
she shall call for the formation of a budget review committee
pursuant to Section 42127.1, unless the governing board of the school
district and the county superintendent of schools agree to waive the
requirement that a budget review committee be formed and the
department approves the waiver after determining that a budget review
committee is not necessary. Upon the grant of a waiver, the county
superintendent has the authority and responsibility provided to a
budget review committee in Section 42127.3. Upon approving a waiver
of the budget review committee, the department shall ensure that a
balanced budget is adopted for the school district by November 30.
The Superintendent shall report to the Legislature and the Director
of Finance by December 10 if any school district, including a school
district that has received a waiver of the budget review committee
process, does not have an adopted budget by November 30. This report
shall include the reasons why a budget has not been adopted by the
deadline, the steps being taken to finalize budget adoption, and the
date the adopted budget is anticipated. For the 2011-12 fiscal year,
notwithstanding any of the standards and criteria adopted by the
state board pursuant to Section 33127, the county superintendent of
schools, as a condition on approval of a school district budget,
shall not require a school district to project a lower level of
revenue per unit of average daily attendance than it received in the
2010-11 fiscal year nor require the school district to demonstrate
that it is able to meet its financial obligations for the two
subsequent fiscal years.
(4) Not later than 45 days after the Governor signs the annual
Budget Act, the school district shall make available for public
review any revisions in revenues and expenditures that it has made to
its budget to reflect the funding made available by that Budget Act.
(j) Any school district for which the county board of education
serves as the governing board of the school district is not subject
to subdivisions (c) to (h), inclusive, but is governed instead by the
budget procedures set forth in Section 1622.
