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SB-751 School finance: school districts: annual budgets: reserve balance.(2017-2018)

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Date Published: 10/12/2017 02:00 PM
SB751:v95#DOCUMENT

Senate Bill No. 751
CHAPTER 674

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

[ Approved by Governor  October 11, 2017. Filed with Secretary of State  October 11, 2017. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 751, Hill. School finance: school districts: annual budgets: reserve balance.
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. Existing law establishes formulas for calculating the maximum amount allowable for school districts with less than 400,000 units of average daily attendance and 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 is equal to or exceeds 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 provide that the school district’s budget shall not contain a combined assigned or unassigned ending general fund balance, as defined, in excess of 10% of those funds. The bill would exclude from the requirements of those provisions basic aid school districts, as defined, and small school districts, as defined. To the extent the bill would impose additional duties on school districts, the bill would impose a state-mandated local program.
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 is equal to or exceeds 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 balance that is in excess of 10 percent of those funds.
(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 balance that is in excess of the amount described in subdivision (a). 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 a combined assigned and unassigned ending general fund balance that is in excess of the amount described in subdivision (a).
(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 or to a small school district.
(d) For purposes of this section, the following definitions shall apply:
(1) “Basic aid school district” has the same meaning as in Section 42238.02.
(2) “Combined assigned or unassigned ending 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.
(3) “Small school district” means a school district with fewer than 2,501 units of average daily attendance.
(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.