CA Gov't Code Section 17518.5

(a)

“Reasonable reimbursement methodology” means a formula for reimbursing local agencies and school districts for costs mandated by the state, as defined in Section 17514.

(b)

A reasonable reimbursement methodology shall be based on cost information from a representative sample of eligible claimants, information provided by associations of local agencies and school districts, or other projections of local costs.

(c)

A reasonable reimbursement methodology shall consider the variation in costs among local agencies and school districts to implement the mandate in a cost-efficient manner.

(d)

Whenever possible, a reasonable reimbursement methodology shall be based on general allocation formulas, uniform cost allowances, and other approximations of local costs mandated by the state, rather than detailed documentation of actual local costs. In cases when local agencies and school districts are projected to incur costs to implement a mandate over a period of more than one fiscal year, the determination of a reasonable reimbursement methodology may consider local costs and state reimbursements over a period of greater than one fiscal year, but not exceeding 10 years.

(e)

(1)A reasonable reimbursement methodology that is based on, in whole or in part, costs that have been included in claims submitted to the Controller for reimbursement shall only use costs that have been audited by the Controller.

(2)

Upon receiving a reasonable reimbursement methodology proposal that is based on, in whole or in part, costs that have been included in claims submitted to the Controller for reimbursement, the Commission on State Mandates shall notify the Controller within 30 days of receiving the proposed reasonable reimbursement methodology.

(3)

The Controller shall select and audit a representative sample of the claimed costs used in the proposed reasonable reimbursement methodology within 360 days of being notified by the Commission on State Mandates.

(4)

The allowable costs reported by the Controller as a result of the audits shall be the costs used for the proposed reasonable reimbursement methodology.

(f)

A reasonable reimbursement methodology may be developed by any of the following:

(1)

The Department of Finance.

(2)

The Controller.

(3)

An affected state agency.

(4)

A claimant.

(5)

An interested party.

(g)

The Controller, in coordination with the Commission on State Mandates and Department of Finance, shall by October 1, 2018, prepare a report to the Legislature, in accordance with Section 9795, regarding implementation of the new reasonable reimbursement process.

(h)

The appropriate policy committees in each house of the Legislature shall hold hearings on the report referenced in subdivision (g).

(i)

This section shall remain in effect only until July 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before July 1, 2019, deletes or extends that date.