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 committedbegin delete reserve,end deletebegin insert fund balance,end insert 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 42127.01 of the Education Code is
2amended to read:
(a) In a fiscal year immediately after a fiscal year
4in which a transfer is made into the Public School System
5Stabilization Account, a school district budget that is adopted or
6revised pursuant to Section 42127 shall not contain a combined
7assigned or unassigned ending fund balance that is in excess of
8the following:
9(1) For school districts with 400,000 or fewer units of average
10daily attendance, the sum of the school district’s applicable
11minimum recommended reserve for economic uncertainties adopted
12by the state board pursuant to subdivision (a) of Section 33128,
13multiplied by two.
14(2) For school districts with more than 400,000 units of average
15daily attendance, the sum of the school district’s
applicable
16minimum recommended reserve for economic uncertainties adopted
17by the state board pursuant to subdivision (a) of Section 33128,
18multiplied by three.
19(b) The limitation in subdivision (a) shall not apply to moneys
20in a committedbegin delete reserve. For purposes of this section, “committed
21reserve” means moneys set aside for a designated future purpose
22by a majority vote of the governing board of the school district.end delete
23begin insert fund balance, as defined in the California School Accounting
24Manual.end insert Nothing in this section shall be interpreted to mean that
25the governing board of a school district may not, in a subsequent
P3 1year, redirect moneys in a committedbegin delete reserveend deletebegin insert
fund balanceend insert to an
2alternative purpose.
3(c) A county superintendent of schools may grant a school
4district under its jurisdiction an exemption from the requirements
5of subdivision (a) for up to two consecutive fiscal years within a
6three-year period if the school district provides documentation
7indicating that extraordinary fiscal circumstances, including, but
8not limited to, multiyear infrastructure or technology projects,
9substantiate the need for a combined assigned or unassigned ending
10fund balance that is in excess of the minimum recommended
11reserve for economic uncertainties. As a condition of receiving an
12exception, a school district shall do all of the following:
13(1) Provide a statement that substantiates the need for an
14assigned and unassigned ending fund balance that is in excess of
15the minimum recommended reserve for economic uncertainties.
16(2) Identify the funding amounts in the budget adopted by the
17school district that are associated with the extraordinary fiscal
18circumstances.
19(3) Provide documentation that no other fiscal resources are
20available to fund the extraordinary fiscal circumstances.
If the Commission on State Mandates determines that
22this act contains costs mandated by the state, reimbursement to
23local agencies and school districts for those costs shall be made
24pursuant to Part 7 (commencing with Section 17500) of Division
254 of Title 2 of the Government Code.
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