CA SB1388

Prohibits community college districts from maintaining an unrestricted general fund balance exceeding 16.7% of unrestricted general fund expenditures beginning in the 2025–26 fiscal year, unless the district participates in the Part-Time Community College Faculty Health Insurance Program, the Part-Time Faculty Office Hours Program, and ensures at least 75% of credit instruction hours are taught by full-time instructors.

Prohibits community college districts from transferring unrestricted general funds to other funds if the receiving fund already has a balance of 33% or more of the district's unrestricted general fund expenditures, or if the transfer would cause the receiving fund to reach 33% or more.

Requires community college districts that violate the fund balance restrictions to distribute excess amounts (above 16.7%) proportionally to nonsupervisory and nonmanagement employees based on hours worked in the preceding fiscal year, as determined by collective bargaining agreements.

Establishes that if the Commission on State Mandates determines the bill imposes state-mandated costs, reimbursement shall be made pursuant to existing statutory procedures under Government Code Part 7.