The purpose of this manual is to provide information regarding school finance reform in the state of California to the legislature, governor, education department, teachers, and other interest groups. Chapter 1 briefly describes disparities in expenditures for education among California school districts, first using a sample of school districts and then describing the state as a whole. Chapter 2 gives a basic explanation of California's education finance plan, which is designed to reduce these disparities. Also discussed are the major features of California's plan enacted in Senate Bill 90 and Senate Bill 1641. This chapter also shows how California's finance plan works, including how to determine the amount of state aid a district will receive for general purposes, how a district's expenditures are regulated, and how areawide aid provisions operate. Five appendices discuss the following: definitions of school attendance, increases in the foundation amount per pupil, state aid for teachers' retirement, adjustments to the revenue limit, and the adult foundation program. (Author/LD)