Cal. Education Code § 35735.2

For purposes of subdivisions (g) and (h) of Section 42238.02, paragraph (2) of subdivision (a) of Section 42238.03, and subdivision (e) of Section 42238.03, reorganized districts shall have categorical program funding determined as follows: (a) (1) A new district shall retain the same amount of categorical funding received by each former district before the reorganization. A new district shall not retain any categorical funding received by divided districts before the reorganization. (2) If the new district is composed wholly of former districts, it shall receive a reduction pursuant to paragraph (2) of subdivision (a) of Section 42238.03 only to the extent that the new district would have received a reduction in the 2012–13 fiscal year. (3) If the new district is comprised of former districts and one or more divided districts, it shall receive a reduction pursuant to paragraph (2) of subdivision (a) of Section 42238.03 only to the extent that the former districts received a reduction in the 2012–13 fiscal year. (b) (1) An acquiring district shall retain the same amount of categorical funding it received before the reorganization, plus the amount of categorical funding received by each former district before the reorganization. An acquiring district shall not retain any categorical funding received by divided districts before the reorganization. (2) If the acquiring district is composed wholly of former districts, it shall receive a reduction pursuant to paragraph (2) of subdivision (a) of Section 42238.03 only to the extent that the acquiring district would have received a reduction in the 2012–13 fiscal year. (3) If the acquiring district comprises a former district and one or more divided districts, it shall receive a reduction pursuant to paragraph (2) of subdivision (a) of Section 42238.03 only to the extent that the former district received a reduction in the 2012–13 fiscal year. (c) (1) The remaining portion of a divided district shall retain the same amount of categorical funding it received before the reorganization. (2) If a divided district received a reduction pursuant to paragraph (2) of subdivision (a) of Section 42238.03, it shall continue to receive that reduction. (d) If the reorganization includes a former district that has been wholly included in more than one new or acquiring districts, the categorical funding shall be determined pursuant to subdivision (c) of Section 35735.