AR HB1575

Establishes a 20% limit on net legal fund balances that public school districts may maintain, calculated as a percentage of current year net legal balance revenues

Requires school districts exceeding the 20% threshold to reduce their net legal balance to comply within a 5-year period

Permits districts to reduce excess balances by transferring funds to building funds for construction, renovation, and repair projects, or by spending on prekindergarten, remediation, career and technical education, or other authorized programs

Directs the Department of Education to monitor compliance yearly and withhold subsequent state funding from districts that fail to meet annual reduction targets equal to the amount not reduced

Allows school districts to request waivers from the Commissioner of Education for unusual and limited circumstances, including increases in one-time funds, if accompanied by a board resolution