Senate BillIntroducedEducation
SB 1262: Education finance: community colleges: general fund balance.
What SB 1262 does, verified May 18, 2026
This bill would prohibit California community college districts from holding an annual unrestricted general fund balance exceeding 50% of their unrestricted general fund expenditures, unless they meet specified conditions. Community college districts would not be allowed to transfer unrestricted general funds to other funds if the receiving fund has a balance of 33% or more of the district's expenditures for the fiscal year. If a district violates these prohibitions, it would be required to distribute the excess funds to nonsupervisory and nonmanagement employees. The bill would consider the costs imposed on local agencies and school districts, and reimbursement would be made if the costs are deemed mandated by the state.
Bill journey
1IntroducedCurrent
2In CommitteePending
3First Chamber FloorPending
4Second ChamberPending
5GovernorPending
6ChapteredPending
Last action: May 14 hearing: Held in committee and under submission. (2026-05-14)Alert me
Author and sponsors
Full contact details, staff, and committees with Connect, $16/moUnlockRecent actions9 total · showing 5
| May. 14, 2026 | May 14 hearing: Held in committee and under submission. |
| May. 08, 2026 | Set for hearing May 14. |
| Apr. 20, 2026 | April 20 hearing: Placed on APPR. suspense file. |
| Apr. 10, 2026 | Set for hearing April 20. |
| Apr. 08, 2026 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 3791.) (April 8). Re-referred to Com. on APPR. |
Latest bill textIntroduced version, February 19, 2026 · 726 words
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Senate Bill
No. 1262
| Introduced by Senator Archuleta |
February 19, 2026 |
An act to add Section 84041.5 to the Education Code, relating to education finance.
LEGISLATIVE COUNSEL'S DIGEST
SB 1262, as introduced, Archuleta. Education finance: community colleges: general fund balance.
Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, as one of the segments of public postsecondary education in this state. Existing law establishes community college districts throughout the state, and authorizes these districts to provide instruction at the community college campuses they operate and maintain.
This bill would prohibit, commencing with the 2027–28 fiscal year, a community college district’s annual unrestricted general fund balance, as specified, for a fiscal year from exceeding 50% of its unrestricted general fund expenditures for that year, unless the community college district meets specified conditions. The bill would prohibit a community college district from transferring unrestricted general funds to another fund if the receiving fund has an existing balance of 33% or more of the community college district’s unrestricted general fund expenditures for that fiscal year or if the transfer would cause the receiving fund to have a balance of 33% or more of the community college district’s unrestricted general fund expenditures for that fiscal year. For a community college district that violates the above-described prohibitions, the bill would require the community college district to distribute the amount of the annual unrestricted general fund balance that exceeds 50% to nonsupervisory and nonmanagement employees of the community college district, as provided. To the extent that the bill would impose new duties on community college 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 the statutory provisions noted above.
The people of the State of California do enact as follows:
SECTION 1.
Section 84041.5 is added to the Education Code, to read:84041.5.
(a) Commencing with the 2027–28 fiscal year, a community college district’s annual unrestricted general fund balance for a fiscal year, as reported on its annual report filed in compliance with regulations adopted pursuant to Section 84040, shall not exceed 50 percent of its unrestricted general fund expenditures for that year, unless the community college district does all of the following:(1) Participates in the Part-Time Community College Faculty Health Insurance Program, as described in Article 9 (commencing with Section 87860) of Chapter 3 of Part 51.
(2) Participates in the Community College Part-Time Faculty Office Hours Program, as described in Article 10 (commencing with Section 87880) of Chapter 3 of Part 51.
(3) Has at least 75 percent of hours of credit instruction taught by full-time instructors, as described in subdivision (a) of Section 87482.6.
(b) A community college district shall not transfer unrestricted general funds to another fund for the purpose of complying with subdivision (a) if either of the following applies:
(1) The receiving fund has an existing balance of 33 percent or more of the community college district’s unrestricted general fund expenditures for that fiscal year.
(2) The transfer of the unrestricted general funds would cause the receiving fund to have a balance of 33 percent or more of the community college district’s unrestricted general fund expenditures for that fiscal year.
(c) For a community college district that violates subdivision (a) or (b), the amount of the annual unrestricted general fund balance that exceeds 50 percent shall be proportionally distributed to the nonsupervisory and nonmanagement employees of the community college district based solely on the number of hours worked by those employees in the preceding fiscal year, as determined by a collective bargaining agreement between those employees and the governing board of the community college district.
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.Text of SB 1262 as introduced, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions