(a) (1) The sum of one hundred million dollars ($100,000,000) is hereby appropriated in the 2018-19 fiscal year from the General Fund to the Controller for allocation to school districts and community college districts for the purpose of reducing the 2009-10 fiscal year outstanding balance of the minimum funding obligation to school districts and community college districts pursuant to § 8 of Article XVI of the California Constitution.

(2) The amount appropriated pursuant to paragraph (1) shall be allocated to school districts and community college districts, as described in subdivision (a) of Section 41203.1, in accordance with the following:

(A) Eighty-nine million seventy thousand dollars ($89,070,000) for transfer by the Controller to Section A of the State School Fund for allocation by the Superintendent pursuant to this section.

(B) Ten million nine hundred thirty thousand dollars ($10,930,000) for transfer by the Controller to Section B of the State School Fund for allocation by the Chancellor of the California Community Colleges to community college districts for deferred maintenance, instructional materials, and other activities, as specified in Provision 22 of Item 6870-101-0001 of Section 2.0 of the Budget Act of 2018.

(3) The amount allocated to school districts pursuant to subparagraph (A) of paragraph (2) shall be distributed on the basis of an equal amount per unit of average daily attendance, as those average daily attendance numbers are reported at the time of the second principal apportionment of the 2017-18 fiscal year.

(4) The amount allocated to community college districts pursuant to subparagraph (B) of paragraph (2) shall be distributed on the basis of an equal amount per enrolled full-time equivalent student, as those numbers of students are reported at the time of the second principal apportionment for the 2017-18 fiscal year.

(5) For purposes of this section, a school district includes a county office of education and a charter school.

(b) (1) If a school district is required to repay claims disallowed under the School-Based Medi-Cal Administrative Activities or Local Educational Agency Medi-Cal Billing Option programs for the 2009-10 to 2015-16 fiscal years, inclusive, the Controller shall, upon notification from the Department of Finance, withhold up to the specified amounts owed by the applicable school districts from the allocations made to those school districts pursuant to subparagraph (A) of paragraph (2) of subdivision (a).

(2) The Controller shall transfer the amounts withheld pursuant to paragraph (1) to the General Fund as reimbursement of the payments made by the state in the 2017-18 and the 2018-19 fiscal years to the federal Centers for Medicare and Medicaid Services on behalf of those school districts.

(c) Funding received by school districts pursuant to subparagraph (A) of paragraph (2) of subdivision (a), less any amount withheld pursuant to subdivision (b), shall first be deemed to be paid in satisfaction of any outstanding claims pursuant to Section 6 of Article XIII ? B of the California Constitution for reimbursement of state-mandated local program costs for any fiscal year. Notwithstanding § 12419.5 of the Government Code and any amounts that are deemed, pursuant to this subdivision, to be paid in satisfaction of outstanding claims for reimbursement of state-mandated local program costs, the Controller may audit any claim as allowed by law and may recover any amount owed by school districts pursuant to an audit only by reducing amounts owed for any other mandate claims. Under no circumstances shall a school district be required to remit funding back to the state to pay for disallowed costs identified by a Controller audit of claimed reimbursable state-mandated local program costs. The Controller shall not recover any amount owed by a school district pursuant to an audit of claimed reimbursable state-mandated local program costs by reducing any amount owed to a school district or community college district for any purpose other than amounts owed for any other mandate claims. The Controller shall apply amounts received by each school district against any balances of unpaid claims for reimbursement of state-mandated local program costs and interest in chronological order beginning with the earliest claim. The Controller shall report to each school district the amounts of any claims and interest that are offset from funds provided pursuant to this section and shall report a summary of the amounts offset for each mandate for each fiscal year to the Department of Finance and the fiscal committees of each house of the Legislature.

(d) (1) The governing board of a school district may expend the one-time funds received pursuant to subparagraph (A) of paragraph (2) of subdivision (a) for any purpose, as determined by the governing board.

(2) It is the intent of the Legislature that school districts prioritize the use of these one-time funds for professional development, induction for beginning teachers with a focus on relevant mentoring, instructional materials, technology infrastructure, employee benefits, and any other investments necessary to support implementation of the common core academic content standards in English language arts and mathematics, the implementation of English language development standards, and the implementation of the Next Generation Science standards.

(e) For purposes of § 8 of Article XVI of the California Constitution, the amounts appropriated pursuant to subdivision (a) shall be applied to the outstanding balance of the minimum funding obligation to school districts and community college districts, pursuant to § 8 of Article XVI of the California Constitution, for the 2009-10 fiscal year, and shall be deemed to be appropriations made and allocated in that fiscal year in which the deficiencies resulting in the outstanding balance were incurred.

(Amended by Stats. 2019, Ch. 497, Sec. 48. (AB 991) Effective January 1, 2020.)