§8715 Limitations on Obligation of Funds

Summary

Limits how much the Board can obligate each fiscal year from assessments collected under section 8705. The Board cannot obligate more than the sum of three things: 73% of the year’s estimated assessments; 73% of the actual assessments from the most recent audited fiscal year (the one with an audit report under section 8704(f)(2)(B)), minus the estimate used for that audited year; and any prior-year amounts that were allowed to be obligated but were not used. For the 9th and 10th fiscal years that begin on or after October 5, 2018, the estimate used above is 62% of the audited year’s actual collections. Any assessments collected above the allowed amount must go into an escrow account for the covered period (from October 5, 2018, to the last day of the 11th fiscal year that begins on or after that date). The Board cannot use, spend, or borrow those escrowed funds or their interest during the covered period. After the covered period, the Board may withdraw and obligate up to one-fifth of the escrow balance each fiscal year.