CA SB1262

Caps community college district annual unrestricted general fund balances at 50% of unrestricted general fund expenditures, effective with the 2027–28 fiscal year

Districts can exceed the 50% cap only if they participate in the Part-Time Faculty Health Insurance Program, participate in the Part-Time Faculty Office Hours Program, and have at least 75% of credit instruction hours taught by full-time instructors

Prohibits districts from transferring unrestricted general funds to other funds if the receiving fund already has or would reach 33% or more of the district's unrestricted general fund expenditures

Requires districts violating these limits to distribute excess funds proportionally to nonsupervisory and nonmanagement employees based on hours worked in the preceding fiscal year

Introduced by Senator Archuleta on February 19, 2026