Amended  IN  Senate  August 22, 2017
Amended  IN  Assembly  March 27, 2017
Amended  IN  Assembly  March 09, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 235

Introduced by Assembly Member O’Donnell

January 30, 2017

An act to amend Section 42127.01 of the Education Code, relating to school finance.


LEGISLATIVE COUNSEL'S DIGEST


AB 235, as amended, O’Donnell. School finance: school district annual budgets: reserve balances.
Existing law, unless the school district is granted an exemption, limits the amount of the combined assigned or unassigned ending fund balance contained in a school district’s annual budget in any fiscal year immediately after a fiscal year in which a transfer is made into the Public School System Stabilization Account, and establishes a formula for calculating the maximum amount allowable for school districts with less than 400,000 units of average daily attendance, and a formula for school districts with more than 400,000 units of average daily attendance, as specified.
This bill would instead make that limitation applicable in a fiscal year immediately after a fiscal year in which the amount of moneys in the Public School System Stabilization Account are equal to or exceed 3% of the combined total of General Fund revenues appropriated for school districts and allocated local proceeds of taxes, as specified, for that fiscal year. The bill would instead make the formula for school districts with less than 400,000 units of average daily attendance applicable to school districts with 400,000 units of average daily attendance or less. The bill would exclude from the requirements of those provisions basic aid school districts, as defined, and small school districts, as defined. districts with fewer than 2,501 units of average daily attendance. The bill would also make a technical change by deleting an obsolete provision. To the extent the bill would impose additional duties on school districts, the bill would impose a state-mandated local program.
The bill would define “combined assigned or unassigned ending General Fund general fund balance” for purposes of this provision. The bill would require the Superintendent of Public Instruction to notify school districts and county offices of education whenever the conditions specified above are met. The bill would also require the Superintendent to notify school districts and county offices of education when those conditions no longer exist.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 42127.01 of the Education Code is amended to read:

42127.01.
 (a) In a fiscal year immediately after a fiscal year in which the amount of moneys in the Public School System Stabilization Account are equal to or exceed 3 percent of the combined total of General Fund revenues appropriated for school districts pursuant to subdivision (c) of Section 41202 and allocated local proceeds of taxes pursuant to subdivision (g) of Section 41202 for that fiscal year, a school district budget that is adopted or revised pursuant to Section 42127 shall not contain a combined assigned or unassigned ending General Fund general fund balance that is in excess of the following:
(1) For school districts with 400,000 or fewer units of average daily attendance, the sum of the school district’s applicable minimum recommended reserve for economic uncertainties adopted by the state board pursuant to subdivision (a) of Section 33128, multiplied by two.
(2) For school districts with more than 400,000 units of average daily attendance, the sum of the school district’s applicable minimum recommended reserve for economic uncertainties adopted by the state board pursuant to subdivision (a) of Section 33128, multiplied by three.
(b) A county superintendent of schools may grant a school district under its jurisdiction an exemption from the requirements of subdivision (a) for up to two consecutive fiscal years within a three-year period if the school district provides documentation indicating that extraordinary fiscal circumstances, including, but not limited to, multiyear infrastructure or technology projects, substantiate the need for a combined assigned or unassigned ending General Fund general fund balance that is in excess of the minimum recommended reserve for economic uncertainties. As a condition of receiving an exemption, a school district shall do all of the following:
(1) Provide a statement that substantiates the need for an assigned and unassigned ending General Fund general fund balance that is in excess of the minimum recommended reserve for economic uncertainties.
(2) Identify the funding amounts in the budget adopted by the school district that are associated with the extraordinary fiscal circumstances.
(3) Provide documentation that no other fiscal resources are available to fund the extraordinary fiscal circumstances.
(c) This section shall not apply to a basic aid school district, as defined in subdivision (o) of Section 42238.02, or to a small school district, as defined in subdivision (c) of Section 44046. district with fewer than 2,501 units of average daily attendance.
(d) For purposes of this section, “combined assigned or unassigned ending General Fund general fund balance” refers to assigned and unassigned moneys in the general fund accounts of school districts, including assigned and unassigned moneys in the Special Fund for Other Than Capital Outlay.
(e) The Superintendent shall notify school districts and county offices of education whenever the conditions specified in subdivision (a) are met, and shall notify school districts and county offices of education when those conditions no longer exist.

SEC. 2.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.