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AB 51

Revises provisions relating to public records. (BDR 19-430)

2025 Regular Session

AB 51 would zero out interest on IUSD emergency loans starting 2026 and allow annual interest waivers for General Fund cashflow loans if IUSD meets solvency, audits, and recovery c

(Pursuant to Joint Standing Rule No. 14.3.1, no further action allowed.)
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Bill Summary · AB 51

AB 51 (McKinnor) — Education finance: Inglewood Unified School District — Interest waivers and 0% rate

Status and procedural history
- Introduced: December 2, 2024 (Author: McKinnor)
- Most recent status: In committee — Held under submission (May 23, 2025).
- Key committee activity: Amended in Assembly Education and referred to Assembly Appropriations; placed on suspense and held under submission.

Purpose
- To reduce or eliminate interest costs on state-provided emergency and cashflow loans made to the Inglewood Unified School District (IUSD) to support fiscal recovery and facilitate the district’s exit from state receivership.

Key provisions
1. Zero-percent interest on outstanding emergency apportionment
- Commencing January 1, 2026, AB 51 requires that the interest rate on the outstanding emergency apportionment made to IUSD be set at 0%.

  1. Interest-waiver process for General Fund cashflow loans
    • Background: Existing law authorizes IUSD, via the State Department of Education, to request General Fund cashflow loans up to $55,000,000 for emergency operational purposes. Current law charges interest equal to the annual return of the Pooled Money Investment Account (PMIA) plus 2%.
    • Waiver eligibility after 10 years: Once IUSD has repaid at least 10 years of a General Fund cashflow loan (under the 2013 statutory authority), the district may seek, and the Department of Finance (DOF) must grant, a waiver of interest for the next fiscal year if specified conditions are met.
    • Required conditions (must all be satisfied):
      • IUSD notifies the Los Angeles County Superintendent of Schools (LACOE) and the County Office Fiscal Crisis and Management Assistance Team (FCMAT) at the time of its second interim financial report, and sends copies to specified legislative committees and DOF.
      • LACOE, in consultation with FCMAT, determines the district is making substantial progress toward fiscal solvency and that an interest waiver would aid exit from receivership, based on:
      • Achieving qualified or positive certification on the second interim report;
      • Completing comprehensive operational reviews comparing the district to similar districts with recommendations for sustainability; and
      • Undergoing annual independent audits and submitting a fiscal recovery plan addressing material weaknesses or internal control deficiencies.
    • Renewals: For each subsequent fiscal year, IUSD may again seek, and DOF must grant, a waiver if the same conditions are met.

Other provisions
- Declares the bill a special statute applicable to IUSD under Article IV, Section 16 of the California Constitution.
- If the Commission on State Mandates finds the bill imposes state-mandated costs on local agencies, reimbursement shall follow existing statutory procedures.

Who is affected
- Primary: Inglewood Unified School District (direct financial benefit).
- Implementation/oversight: Department of Finance, Los Angeles County Superintendent of Schools, County Office FCMAT, Department of Education.
- Fiscal implications: Potential reduction in state interest revenue and lower debt service burden for IUSD; possible state mandated local program duties for LACOE/FCMAT with reimbursement provisions.

Potential impact
- Lowers or eliminates interest costs for IUSD on specific state loans, potentially accelerating fiscal recovery and facilitating exit from receivership.
- Creates recurring conditional waivers that require ongoing oversight, audits, and operational reviews.
- Could reduce General Fund receipts (interest) relative to current law; actual fiscal effect would depend on amounts outstanding and frequency/duration of waivers.

Compiled from official sources — confirm details with the bill’s official record.

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