BILL NUMBER: AB 531	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 21, 2015

INTRODUCED BY   Assembly Member O'Donnell

                        FEBRUARY 23, 2015

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 531, as amended, O'Donnell. School finance: budget
calculations.
   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 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  specify that the limitation on the combined
assigned or unassigned ending fund balance does not apply to moneys
in a committed reserve, as defined. 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 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 these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated 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 a transfer is made into the Public School System Stabilization
Account, a school district budget that is adopted or revised
pursuant to Section 42127 shall not contain a combined assigned or
unassigned ending 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) The limitation in subdivision (a) shall not apply to moneys in
a committed reserve. For purposes of this section, "committed
reserve" means moneys set aside for a designated future purpose by a
majority vote of the governing board of the school district. Nothing
in this section shall be interpreted to mean that the governing board
of a school district may not, in a subsequent year, redirect moneys
in a committed reserve to an alternative purpose.  
   (b) 
    (c)  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 fund balance that is in excess of the minimum
recommended reserve for economic uncertainties. As a condition of
receiving an exception, a school district shall do all of the
following:
   (1) Provide a statement that substantiates the need for an
assigned and unassigned ending 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.
  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.