§ 15740 State Apportionment Interest Calculation

This law tells the state controller to keep track of money a school district owes for building aid, and to add interest on that money until it is paid.

Key Takeaways

•The controller must keep a record of every school‑building aid payment the state is owed.
•Interest starts counting from the warrant date until July 1 of the next fiscal year, then compounds each year.
•The interest rate is set by the state board, and the calculation treats any missed yearly repayment as if it were paid on July 1.

Example

A school district receives $100,000 for a new school building, but the county treasurer doesn’t pay it until August 1 of the next fiscal year.

The controller records the $100,000, adds interest from the date the payment was supposed to be made until July 1 of the next fiscal year, then keeps adding interest each year until the district finally pays the whole amount.

How to Calculate

Interest for first period = P × r × (days ÷ 365). After July 1, interest compounds annually: A = P × (1 + r)ⁿ, where n = number of years after July 1.

Find the original amount owed (P).
Find the interest rate the board set (r, expressed as a decimal).
Count the days from the warrant issue date to July 1 of the next fiscal year and divide by 365.
Multiply P × r × (days ÷ 365) to get the interest for that first period.
Add that interest to the original amount to get a new principal.
For each full year after July 1, multiply the current principal by (1 + r) to compound the interest.
Continue until the debt is paid or interest stops accruing.

District owes $100,000. The board’s interest rate is 5% (0.05). The warrant was issued on March 1, and the next fiscal year’s July 1 is 122 days later.

Result: First‑period interest = 100,000 × 0.05 × (122 ÷ 365) ≈ $1,671.23. New principal = $101,671.23. If the debt isn’t paid by the next July 1, interest compounds for one year: $101,671.23 × (1 + 0.05) = $106,754.79. So after one year of compounding, the district owes about $106,755.

The Controller shall determine and maintain a record of the amount due the state in connection with each apportionment made to each grade level of a district under this chapter. He or she shall compute interest on the original amount of the apportionment at the rate fixed by the board, from the date of issuance of the Controller’s warrant covering the payment to the county treasurer of any portion of the apportionment until the first day of July of the fiscal year next succeeding that in which the warrant was issued. Thereafter, interest shall accrue to and be compounded as a part of the principal amount due the state pursuant to the apportionment through the 30th day of the following June of each year, until the principal and interest have been paid, or until the interest ceases to accrue, as provided in this chapter. Interest on unpaid school building aid apportionments shall be computed as if the annual repayment were credited on the first day of July of the fiscal year in which the repayment is withheld. (Repealed and added by Stats. 1996, Ch. 277, Sec. 2. Effective January 1, 1997. Operative January 1, 1998.)

This law tells the state controller to keep track of money a school district owes for building aid, and to add interest on that money until it is paid.

Key Takeaways

•The controller must keep a record of every school‑building aid payment the state is owed.
•Interest starts counting from the warrant date until July 1 of the next fiscal year, then compounds each year.
•The interest rate is set by the state board, and the calculation treats any missed yearly repayment as if it were paid on July 1.

Example

A school district receives $100,000 for a new school building, but the county treasurer doesn’t pay it until August 1 of the next fiscal year.

How to Calculate

Interest for first period = P × r × (days ÷ 365). After July 1, interest compounds annually: A = P × (1 + r)ⁿ, where n = number of years after July 1.

Find the original amount owed (P).
Find the interest rate the board set (r, expressed as a decimal).
Count the days from the warrant issue date to July 1 of the next fiscal year and divide by 365.
Multiply P × r × (days ÷ 365) to get the interest for that first period.
Add that interest to the original amount to get a new principal.
For each full year after July 1, multiply the current principal by (1 + r) to compound the interest.
Continue until the debt is paid or interest stops accruing.

District owes $100,000. The board’s interest rate is 5% (0.05). The warrant was issued on March 1, and the next fiscal year’s July 1 is 122 days later.

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 15740 State Apportionment Interest Calculation

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References