ARTICLE 7. Disposition of Records, Funds, Property, and Obligations When Reorganized [35560. - 35566.]

Cal. Education Code - EDC 7.

in effect

Cal. Education Code - EDC § 35560. Section 35560.

When a school district is reorganized, both of the following shall apply: (a) When the allocation of funds, property, and obligations is not fixed by terms, conditions, or recommendations as provided by law, the funds, property, and obligations of a former district, except for bonded indebtedness, shall be allocated as follows: (1) The real property and personal property and fixtures normally situated thereat shall be the property of the district in which the real property is located. (2) All other property, funds, and obligations, except bonded indebtedness, shall be divided pro rata among the districts in which the territory of the former district is included. The basis for the division and allocation shall be the assessed valuation of the part of the former district which is included within each of the districts. (b) Any qualified special taxes may continue to be imposed pursuant to Section 50079.2 of the Government Code.

Cal. Education Code - EDC § 35561. Section 35561.

Any funds derived from the sale of the school bonds issued by the original district shall be used for the acquisition, construction, or improvement of school property only in the territory that comprised the original district or to discharge bonded indebtedness of the original district, except that, if the bonded indebtedness is assumed by the new or acquiring district, the funds may be used in any area of the new district for the purposes for which the bonds were originally voted.

Cal. Education Code - EDC § 35562. Section 35562.

If all the territory of a school district becomes part of two or more school districts of any type, and the inclusion in the two or more new or acquiring districts of the several portions of territory comprising the whole of the former district is effective for all purposes on the same date, the records of the former district shall be disposed of as follows: (a) All records of the former district that are required by law to be kept on file shall be deposited with the governing board of the school district which, after the reorganization has become effective for all purposes, has located within its boundaries the former office of the superintendent of the original district. (b) Records of employees shall be transferred to the school district thereafter employing the personnel or thereafter maintaining the last place of employment. (c) Records of pupils shall be transferred to the school district that, after the date on which the reorganization becomes effective for all purposes, maintains the school in which a pupil was last enrolled.

Cal. Education Code - EDC § 35563. Section 35563.

(a) If all of the territory of a school district becomes part of two or more school districts of any type, and the inclusion in the two or more new school districts of the several portions of territory comprising the former district is effective for all purposes on the same date, the county superintendent of schools having jurisdiction over the former district shall assume responsibility for all of the following: (1) Completing all records and reports of the former district. (2) Paying all outstanding obligations, except obligations resulting from contracts that are to be assumed by a new or acquiring district. (3) Preparing for proper filing all records of the former district required to be kept permanently by the provisions of any applicable code. (4) Distributing records as provided in Section 35562. (5) Employing an auditor as required in Section 41020. (6) Discharging other functions that he or she deems necessary to the dissolution of the school district. (b) In discharging these duties, the county superintendent of schools may request the services of employees of the original district or the new or acquiring district, and the new or acquiring districts shall release those employees to the county superintendent of schools for the purpose of accomplishing the requirements of this section. The salaries of those employees and all other necessary expenses of completing the requirements of this section shall be charged against the accumulated funds of the former district before the final distribution of those funds to the new or acquiring districts.

Cal. Education Code - EDC § 35564. Section 35564.

If the reorganization of a school district under this chapter results in the relocation of district boundaries so that a portion of the pupils will not be residents of the district thereafter maintaining a school previously attended by the pupils, and if there is in the school an organized student body, the property, funds, and obligations of the student body shall be divided as determined by the county committee, except that the share shall not exceed an amount equal to the ratio which the number of pupils leaving the school bears to the total number of pupils enrolled. The ownership of the property, funds, and obligations, which is the proportionate share of each segment of the student body, shall be transferred to the student body of the school or schools in which the pupils are enrolled after the reorganization. Funds from devises, bequests, or gifts made to the organized student body of a school shall remain the property of the organized student body of that school and shall not be divided.

Cal. Education Code - EDC § 35565. Section 35565.

If a dispute arises between the governing boards of the districts concerning the division of funds, property, or obligations, a board of arbitrators shall be appointed which shall resolve the dispute. The board shall consist of one person selected by each district from which territory is withdrawn pursuant to a reorganization action under this chapter, one person selected by each district of which territory has become a part pursuant to that reorganization action, and either one or two persons, such that the board of arbitrators contains an odd number of persons, appointed by the county superintendent of schools of the county in which the districts are located. The districts involved may mutually agree that a person appointed as arbitrator by the county superintendent of schools may act as sole arbitrator of the matters to be submitted to arbitration. The necessary expenses and compensation of the arbitrators shall be divided equally between the districts, and the payment of the portion of the expenses is a legal charge against the funds of the school districts. The arbitrator or arbitrators shall make a written finding on the matter submitted to arbitration. The written finding and determination of a majority of the board of arbitrators is final and binding upon the school districts submitting the question to the board of arbitration.

Cal. Education Code - EDC § 35566. Section 35566.

Notwithstanding any other provision of this article, exchanges of property tax revenues between school districts as a result of an action to reorganize shall be determined pursuant to subdivision (i) of Section 99 of the Revenue and Taxation Code if one or more affected districts receive only basic aid apportionments required by Section 6 of Article IX of the California Constitution.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026