California Code, Revenue and Taxation Code - RTC § 2307

(a) The local agency shall determine the actual cost of providing the transferred program or service during the last full fiscal year in which such function or service was provided.

(b) The local agency shall determine the amount of the costs determined pursuant to subdivision (a) which are attributable to expenses for general administration and capital outlay and which cannot be transferred to the agency assuming the responsibility for providing the program or service; provided that such amount shall not exceed 10 percent of the amount determined pursuant to subdivision (a).

(c) The local agency shall subtract the amount determined pursuant to subdivision (b) from the amount determined pursuant to subdivision (a).

(d) The local agency shall determine the property tax rate which would have been required to produce the amount determined pursuant to subdivision (c) during the last full fiscal year in which the transferred program or service was provided and shall reduce its maximum property tax rate thereby.