Education finance: Classified School Employee Summer Assistance Program.

Valencia, together with principal coauthor Senator Cervantes, advances a measure that expands the Classified School Employee Summer Assistance Program to include joint powers authorities formed solely of school districts and county offices of education as eligible local educational agencies, aligning JPAs with districts and COEs for participation if funds are available. The proposal also contemplates alternative operative sequencing with related reforms, such that if those measures are enacted and take effect in a prescribed order, AB 378’s own amendments may be superseded.

At the core, the bill preserves the program’s existing structure—an employee-initiated, one-for-one state match up to a dollar for each dollar withheld, with a cap on eligible regular pay and a voluntary withholding rate—while broadening the pool of eligible participants. An LEA may elect to participate and must notify classified employees by January 1 in years with appropriations; employees must elect by March 1 to participate, specifying the amount to withhold (up to 10 percent of monthly pay) and whether payouts occur in one or two summer payments. Eligibility requires at least one year of employment with the LEA, and coverage depends on the regular assignment being 11 months or fewer out of a 12-month period, with certain exclusions for hours outside the regular assignment. The program also retains pandemic-era exclusions for determining months of service in the 2020–21 through 2022–23 school years.

Funding rules, administration, and payout mechanics remain intact, with the state match delivered only to the extent appropriations allow and all withheld funds placed in a separate account by the LEA for summer distribution. The department notifies LEAs of estimated match funds in May; LEAs notify employees by June of the anticipated match, after which an employee may withdraw or adjust withholding within a defined window. If funds are insufficient to provide a full $1 match per $1 withheld, the department prorates the match. The match is not treated as retirement compensation for PERS or CalSTRS. Payment requests to the department are due by July 31, and apportionment to LEAs occurs within 30 days, with prorating if total requests exceed appropriations. The bill also allows use of unexpended prior-year balances to support the match and specifies encumbrance rules extending available funding across the year of appropriation and the following year.

Key definitional and operational changes accompany the expansion. The LEA definition explicitly includes JPAs formed under the Joint Exercise of Powers Act, thereby broadening eligible entities. The bill defines “Month” as 20 days or four weeks of five days each, including legal holidays, influencing calculations for eligibility windows. A cross-reference in the bill links Section 1.5’s amendments to Section 45500 with proposed changes from related measures, creating a two-path operative framework: if those other bills enact and AB 378 is enacted last, the other amendments govern; if not, AB 378’s text operates. Section 2 further clarifies that operative effect depends on these conditions and sequencing.

From a policy and implementation perspective, the expansion to JPAs increases the eligible participant base and requires additional administrative capacity from the Department of Education and participating JPAs to manage elections, withholding, separate-account administration, and timely payment processing. The framework remains contingent on annual budget appropriations, with potential prorations in lean years and the possibility of using prior-year balances to supplement matching funds. The changes interact with established definitions and budgeting controls, requiring coordinated forms, reporting, and payroll integration, particularly for JPAs that may encompass multiple member districts or COEs.