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Legislative Update: Reserve cap bill introduced 

On Tuesday, Assembly Education Chair Patrick O’Donnell (D-Long Beach) introduced AB 235, a bill that would make statutory changes to the existing reserve cap law. CSBA does not currently have an official position on the bill. CSBA will sponsor a separate bill in 2017 that follows the framework of SB 799.

AB 235 would keep the current
level of the reserve cap in place (twice the required minimum reserve level for districts of 400,000 ADA or fewer) and does not alter the definition of funds to which the reserve cap applies nor does it amend the trigger that would cause the reserve cap to become active. The bill proposes to exempt basic aid districts from the reserve cap and also exempt small districts – however, “small districts” are defined pursuant to Education Code 44046, as unified school districts of ADA less than 1,501, and ADA of less than 901 and 301 for elementary and high school districts, respectively.

It is anticipated that additional bills pertaining to the reserve cap will also be introduced in 2017. Please continue to follow CSBA communications for updates on reserve cap legislation.