(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.

(Amended by Stats. 2017, Ch. 674, Sec. 1. (SB 751) Effective January 1, 2018.)