Bill Text: CA ACA4 | 2009-2010 | Regular Session | Chaptered
Bill Title: State finance.
Spectrum: Slight Partisan Bill (Democrat 6-2)
Status: (Passed) 2010-10-13 - Chaptered by Secretary of State - Res. Chapter 174, Statutes of 2010. [ACA4 Detail]
Download: California-2009-ACA4-Chaptered.html
BILL NUMBER: ACA 4 CHAPTERED
BILL TEXT
CHAPTER 174
FILED WITH SECRETARY OF STATE OCTOBER 13, 2010
APPROVED BY GOVERNOR OCTOBER 13, 2010
PASSED THE SENATE OCTOBER 8, 2010
PASSED THE ASSEMBLY OCTOBER 7, 2010
AMENDED IN ASSEMBLY OCTOBER 7, 2010
AMENDED IN ASSEMBLY MAY 10, 2010
AMENDED IN ASSEMBLY APRIL 12, 2010
AMENDED IN ASSEMBLY MARCH 17, 2010
INTRODUCED BY Assembly Members Gatto and Niello
(Coauthor: Senator Ashburn)
DECEMBER 3, 2008
A resolution to propose to the people of the State of California
an amendment to the Constitution of the State, by amending Section 12
of Article IV thereof, and by amending Section 20 of, and adding
Section 21 to, Article XVI thereof, relating to state finance.
LEGISLATIVE COUNSEL'S DIGEST
ACA 4, Gatto. State finance.
Existing provisions of the California Constitution require the
Governor to submit to the Legislature, within the first 10 days of
each calendar year, a proposed budget for the ensuing fiscal year
containing itemized statements for recommended state expenditures and
estimated state revenues. In addition, the Constitution prohibits
the Legislature from passing, and the Governor from signing, a Budget
Bill that would appropriate from the General Fund a total amount
that, when combined with all appropriations from the General Fund for
that fiscal year made as of the date of the Budget Bill's passage,
and the amount of any General Fund moneys transferred to a reserve
account, exceeds estimated General Fund revenues for that fiscal
year. The estimate of General Fund revenues is required to be set
forth in the Budget Bill.
This measure would require the Governor, in his or her proposed
budget, to identify estimated total state resources available to meet
recommended state expenditures and, further, to identify the amount
of those resources that are anticipated to be one-time resources. The
measure would prohibit passage of a Budget Bill that appropriates an
amount that, when combined with prior appropriations and transfers
to the reserve account, exceeds the estimate of General Fund
revenues, transfers, and balances available from the prior fiscal
year. The measure would require the estimate of General Fund
revenues, transfers, and balances to be set forth in the Budget Bill.
Existing provisions of the California Constitution establish the
Budget Stabilization Account in the General Fund and currently
require the Controller, no later than September 30 of each year, to
transfer from the General Fund to the account a sum equal to 3% of
the estimated amount of General Fund revenues for the current fiscal
year. This transfer of moneys is not required, unless otherwise
directed by the Legislature by statute, in any fiscal year to the
extent that the resulting balance in the account would exceed 5% of
the General Fund revenues estimate set forth in the Budget Bill for
that fiscal year, as enacted, or $8,000,000,000, whichever is
greater. This transfer of moneys also may be suspended or reduced for
a fiscal year as specified by an Executive order issued by the
Governor no later than June 1 of the preceding fiscal year. Of the
moneys transferred to the account in each fiscal year, 50%, up to an
aggregate amount of $5,000,000,000 for all fiscal years, is deposited
in the Deficit Recovery Bond Retirement Sinking Fund Subaccount and
continuously appropriated to the Treasurer for the purpose of
retiring state deficit recovery bonds. All other moneys transferred
to the account in a fiscal year are not deposited in the sinking fund
subaccount and may, by statute, be transferred back to the General
Fund.
This measure would rename this account the Budget Stabilization
Fund. This measure would also provide that the transfer of moneys
from the General Fund to the Budget Stabilization Fund is not
required in any fiscal year to the extent that the resulting balance
in the fund would exceed 10% of the General Fund revenues estimate
set forth in the Budget Bill for that fiscal year, as enacted, and
would delete the alternative $8,000,000,000 limit on the fund. This
measure would provide that, apart from a transfer made for the
purpose of responding to an emergency declared by the Governor, as
defined, or a loan to meet General Fund cash requirements which would
be repaid within a fiscal year, the total amount that may be
transferred from the Budget Stabilization Fund to the General Fund
for any fiscal year shall not exceed the lesser of the shortfall
amount for the current fiscal year, as defined, or 50% of the balance
of the Budget Stabilization Fund, depending upon specified criteria.
In addition, this measure would create in the General Fund the
Supplemental Budget Stabilization Account and would direct the
Controller to transfer, on October 1 of each year beginning in 2013,
from the Budget Stabilization Fund to the Supplemental Budget
Stabilization Account a sum equal to 1.5% of the estimated amount of
General Fund revenues for the current fiscal year, except that this
transfer would not be made in a fiscal year for which the Governor
issues an Executive order to suspend or reduce the transfer of moneys
from the General Fund to the Budget Stabilization Fund. The measure
would permit appropriations to be made from the Supplemental Budget
Stabilization Account only for capital outlay purposes or to retire
bonded indebtedness of the state.
This measure would require the Director of Finance, on or before
May 29 of each year beginning in 2014, to report to the Legislature
and the Governor (1) an estimate of the amount of General Fund
revenues, transfers, and balances available from the prior fiscal
year for the current fiscal year, (2) the revenue forecast amount, as
defined, for the current fiscal year, and (3) an estimate of
specified General Fund obligations for the public schools. The
measure would provide that if, pursuant to a formula based on those
figures, there are unanticipated revenues in the current fiscal year,
beginning in the 2013-14 fiscal year, those revenues may be used
only for specified purposes, and in a specified order of priority.
Resolved by the Assembly, the Senate concurring, That the
Legislature of the State of California at its 2009-10 Regular Session
commencing on the first day of December 2008, two-thirds of the
membership of each house concurring, hereby proposes to the people of
the State of California that the Constitution of the State be
amended as follows:
First-- That Section 12 of Article IV thereof is amended to read:
SEC. 12. (a) Within the first 10 days of each calendar year,
the Governor shall submit to the Legislature, with an explanatory
message, a budget for the ensuing fiscal year containing itemized
statements for recommended state expenditures and estimated total
state resources available to meet those expenditures. If recommended
expenditures exceed estimated resources, the Governor shall recommend
the sources from which the additional resources should be provided.
The itemized statement of estimated total state resources available
to meet recommended expenditures submitted pursuant to this
subdivision shall identify the amount, if any, of those resources
that are anticipated to be one-time resources.
(b) The Governor and the Governor-elect may require a state
agency, officer, or employee to furnish whatever information is
deemed necessary to prepare the budget.
(c) (1) The budget shall be accompanied by a budget bill itemizing
recommended expenditures.
(2) The budget bill shall be introduced immediately in each house
by the persons chairing the committees that consider the budget.
(3) The Legislature shall pass the budget bill by midnight on June
15 of each year.
(4) Until the budget bill has been enacted, the Legislature shall
not send to the Governor for consideration any bill appropriating
funds for expenditure during the fiscal year for which the budget
bill is to be enacted, except emergency bills recommended by the
Governor or appropriations for the salaries and expenses of the
Legislature.
(d) No bill except the budget bill may contain more than one item
of appropriation, and that for one certain, expressed purpose.
Appropriations from the General Fund of the State, except
appropriations for the public schools, are void unless passed in each
house by rollcall vote entered in the journal, two-thirds of the
membership concurring.
(e) The Legislature may control the submission, approval, and
enforcement of budgets and the filing of claims for all state
agencies.
(f) For the 2004-05 fiscal year, or any subsequent fiscal year,
the Legislature may not send to the Governor for consideration, nor
may the Governor sign into law, a budget bill that would appropriate
from the General Fund, for that fiscal year, a total amount that,
when combined with all appropriations from the General Fund for that
fiscal year made as of the date of the budget bill's passage, and the
amount of any General Fund moneys transferred to the Budget
Stabilization Fund for that fiscal year pursuant to Section 20 of
Article XVI, exceeds General Fund revenues, transfers, and balances
available from the prior fiscal year for that fiscal year estimated
as of the date of the budget bill's passage. That estimate of General
Fund revenues, transfers, and balances shall be set forth in the
budget bill passed by the Legislature.
Second-- That Section 12 of Article IV thereof, as amended by
Proposition 25 at the November 2, 2010, statewide general election,
is amended to read:
SEC. 12. (a) Within the first 10 days of each calendar year,
the Governor shall submit to the Legislature, with an explanatory
message, a budget for the ensuing fiscal year containing itemized
statements for recommended state expenditures and estimated total
state resources available to meet those expenditures. If recommended
expenditures exceed estimated resources, the Governor shall recommend
the sources from which the additional resources should be provided.
The itemized statement of estimated total state resources available
to meet recommended expenditures submitted pursuant to this
subdivision shall identify the amount, if any, of those resources
that are anticipated to be one-time resources.
(b) The Governor and the Governor-elect may require a state
agency, officer, or employee to furnish whatever information is
deemed necessary to prepare the budget.
(c) (1) The budget shall be accompanied by a budget bill itemizing
recommended expenditures.
(2) The budget bill shall be introduced immediately in each house
by the persons chairing the committees that consider the budget.
(3) The Legislature shall pass the budget bill by midnight on June
15 of each year.
(4) Until the budget bill has been enacted, the Legislature shall
not send to the Governor for consideration any bill appropriating
funds for expenditure during the fiscal year for which the budget
bill is to be enacted, except emergency bills recommended by the
Governor or appropriations for the salaries and expenses of the
Legislature.
(d) No bill except the budget bill may contain more than one item
of appropriation, and that for one certain, expressed purpose.
Appropriations from the General Fund of the State, except
appropriations for the public schools and appropriations in the
budget bill and in other bills providing for appropriations related
to the budget bill, are void unless passed in each house by rollcall
vote entered in the journal, two-thirds of the membership concurring.
(e) (1) Notwithstanding any other provision of law or of this
Constitution, the budget bill and other bills providing for
appropriations related to the budget bill may be passed in each house
by rollcall vote entered in the journal, a majority of the
membership concurring, to take effect immediately upon being signed
by the Governor or upon a date specified in the legislation. Nothing
in this subdivision shall affect the vote requirement for
appropriations for the public schools contained in subdivision (d) of
this section and in subdivision (b) of Section 8 of this article.
(2) For purposes of this section, "other bills providing for
appropriations related to the budget bill" shall consist only of
bills identified as related to the budget in the budget bill passed
by the Legislature.
(f) The Legislature may control the submission, approval, and
enforcement of budgets and the filing of claims for all state
agencies.
(g) For the 2004-05 fiscal year, or any subsequent fiscal year,
the Legislature may not send to the Governor for consideration, nor
may the Governor sign into law, a budget bill that would appropriate
from the General Fund, for that fiscal year, a total amount that,
when combined with all appropriations from the General Fund for that
fiscal year made as of the date of the budget bill's passage, and the
amount of any General Fund moneys transferred to the Budget
Stabilization Fund for that fiscal year pursuant to Section 20 of
Article XVI, exceeds General Fund revenues, transfers, and balances
available from the prior fiscal year for that fiscal year estimated
as of the date of the budget bill's passage. That estimate of General
Fund revenues, transfers, and balances shall be set forth in the
budget bill passed by the Legislature.
(h) Notwithstanding any other provision of law or of this
Constitution, including subdivision (c) of this section, Section 4 of
this article, and Sections 4 and 8 of Article III, in any year in
which the budget bill is not passed by the Legislature by midnight on
June 15, there shall be no appropriation from the current budget or
future budget to pay any salary or reimbursement for travel or living
expenses for Members of the Legislature during any regular or
special session for the period from midnight on June 15 until the day
that the budget bill is presented to the Governor. No salary or
reimbursement for travel or living expenses forfeited pursuant to
this subdivision shall be paid retroactively.
Third-- That Section 20 of Article XVI thereof is amended to read:
SEC. 20. (a) The Budget Stabilization Fund and the
Supplemental Budget Stabilization Account are hereby created in the
General Fund.
(b) In each fiscal year as specified in paragraphs (1) to (3),
inclusive, the Controller shall transfer from the General Fund to the
Budget Stabilization Fund the following amounts:
(1) No later than September 30, 2006, a sum equal to 1 percent of
the estimated amount of General Fund revenues for the 2006-07 fiscal
year.
(2) No later than September 30, 2007, a sum equal to 2 percent of
the estimated amount of General Fund revenues for the 2007-08 fiscal
year.
(3) No later than September 30, 2008, and annually thereafter
through 2012, a sum equal to 3 percent of the estimated amount of
General Fund revenues for the current fiscal year.
(4) On September 23, 2013, and on September 23 annually
thereafter, a sum equal to 3 percent of the estimated amount of
General Fund revenues for the current fiscal year.
(c) The transfer of moneys shall not be required by subdivision
(b) in any fiscal year to the extent that the resulting balance in
the Budget Stabilization Fund would exceed 10 percent of the General
Fund revenues estimate set forth in the budget bill for that fiscal
year, as enacted. The Legislature may, by statute, direct the
Controller, for one or more fiscal years, to transfer into the Budget
Stabilization Fund amounts in excess of the levels prescribed by
this subdivision.
(d) Subject to any restriction imposed by this section, funds
transferred to the Budget Stabilization Fund or the Supplemental
Budget Stabilization Account shall be deemed to be General Fund
revenues for all purposes of this Constitution.
(e) The transfer of moneys from the General Fund to the Budget
Stabilization Fund may be suspended or reduced for a fiscal year as
specified by an executive order issued by the Governor no later than
the date of the transfer set forth in subdivision (b). For a fiscal
year commencing on or after July 1, 2013, this subdivision shall be
operative only if a transfer of moneys from the Budget Stabilization
Fund to the General Fund is authorized pursuant to paragraph (1) of
subdivision (g).
(f) (1) Of the moneys transferred to the Budget Stabilization Fund
in each fiscal year, 50 percent, up to the aggregate amount of five
billion dollars ($5,000,000,000) for all fiscal years, shall be
deposited in the Deficit Recovery Bond Retirement Sinking Fund
Subaccount, which is hereby created in the Budget Stabilization Fund
for the purpose of retiring deficit recovery bonds authorized and
issued as described in Section 1.3, in addition to any other payments
provided for by law for the purpose of retiring those bonds. The
moneys in the sinking fund subaccount are continuously appropriated
to the Treasurer to be expended for that purpose in the amounts, at
the times, and in the manner deemed appropriate by the Treasurer. Any
funds remaining in the sinking fund subaccount after all of the
deficit recovery bonds are retired shall be transferred to the Budget
Stabilization Fund, and may be transferred to the General Fund
pursuant to paragraph (2).
(2) All other funds transferred to the Budget Stabilization Fund
in a fiscal year shall not be deposited in the sinking fund
subaccount and may be transferred to the General Fund by statute
pursuant to subdivision (g) or (h).
(g) (1) Subject to paragraph (2), the total amount that may be
transferred from the Budget Stabilization Fund to the General Fund
pursuant to this subdivision for any fiscal year shall not exceed the
lesser of the following:
(A) The shortfall amount for the current fiscal year.
(B) Fifty percent of the balance of the Budget Stabilization Fund.
(2) If a transfer was made pursuant to this subdivision in both
the prior fiscal year and the fiscal year immediately preceding that
year, the total amount that may be transferred from the Budget
Stabilization Fund to the General Fund pursuant to this subdivision
for the current fiscal year shall not exceed the shortfall amount for
the current fiscal year.
(3) For purposes of this subdivision, the "shortfall amount for
the current fiscal year" is the amount derived by subtracting the
General Fund revenues, transfers, and balances available from the
prior fiscal year for that fiscal year from the expenditure forecast
amount for the current fiscal year.
(4) For purposes of this subdivision, "General Fund revenues,
transfers, and balances available from the prior fiscal year for that
fiscal year" does not include revenues transferred from the General
Fund to the Budget Stabilization Fund pursuant to subdivision (b) for
that fiscal year.
(5) For purposes of this subdivision, Section 21, and Section 12
of Article IV, "balances available from the prior fiscal year for
that fiscal year" means the funds in the Special Fund for Economic
Uncertainties, or a successor fund, as of June 30 of the prior fiscal
year. "The prior fiscal year" means the immediately preceding fiscal
year.
(6) For purposes of this subdivision and Section 21, the
"expenditure forecast amount" for the current fiscal year is the
total General Fund expenditures for the prior fiscal year adjusted
for the change in population of the State, as defined in Section 8 of
Article XIII B, and the change in the cost of living for the State,
as measured by the California Consumer Price Index, between the prior
fiscal year and the current fiscal year.
(7) For purposes of this subdivision, "total General Fund
expenditures for the prior fiscal year" does not include the
expenditure of funds transferred pursuant to subdivision (h), or the
expenditure of unanticipated revenues pursuant to paragraph (3) or
(4) of subdivision (c) of Section 21.
(h) Any funds necessary for the purpose of responding to an
emergency declared by the Governor may be transferred from the Budget
Stabilization Fund to the General Fund by statute. For purposes of
this subdivision, "emergency" has the same meaning as set forth in
paragraph (2) of subdivision (c) of Section 3 of Article XIII B.
(i) In addition to any transfer authorized by this section, funds
in the Budget Stabilization Fund or the Supplemental Budget
Stabilization Account may be loaned to meet General Fund cash
requirements on the condition that the funds are repaid within the
same fiscal year in which the loan is made.
(j) (1) Except as provided in paragraph (3), on October 1, 2013,
and on October 1 annually thereafter, the Controller shall transfer
from the Budget Stabilization Fund to the Supplemental Budget
Stabilization Account a sum equal to 1.5 percent of the estimated
amount of General Fund revenues for the current fiscal year.
(2) Funds in the Supplemental Budget Stabilization Account may be
appropriated only for the purposes set forth in subparagraphs (B) and
(C) of paragraph (4) of subdivision (c) of Section 21.
(3) Paragraph (1) shall not be operative in a fiscal year for
which the Governor issues an executive order pursuant to subdivision
(e) to suspend or reduce the transfer of moneys from the General Fund
to the Budget Stabilization Fund.
Fourth-- That Section 21 is added to Article XVI thereof, to read:
SEC. 21. (a) On or before May 29, 2014, and on or before May
29 of each year thereafter, the Director of Finance shall do all of
the following, reporting the result in each case to the Legislature
and the Governor:
(1) Separately estimate General Fund revenues, transfers, and
balances available from the prior fiscal year for the current fiscal
year.
(2) Determine the revenue forecast amount for the current fiscal
year in the manner set forth in subdivision (d).
(3) Estimate the amount, as of that date, of any General Fund
obligations arising under Section 8 for the current fiscal year,
including any maintenance factor allocation for the current fiscal
year required pursuant to subdivision (e) of Section 8, that are
attributable to unanticipated revenues in the current fiscal year.
(b) (1) Except as provided in paragraph (2), "unanticipated
revenues" for a fiscal year, for purposes of this section, shall be
the lesser of the following:
(A) Estimated General Fund revenues for the current fiscal year
reported pursuant to paragraph (1) of subdivision (a) minus the
revenue forecast amount for the current fiscal year.
(B) Estimated General Fund revenues, transfers, and balances
available from the prior fiscal year for the current fiscal year
reported pursuant to paragraph (1) of subdivision (a) minus the
expenditure forecast amount for the current fiscal year determined
pursuant to paragraph (6) of subdivision (g) of Section 20.
(2) If the amount determined pursuant to paragraph (1) is less
than zero, the amount of unanticipated revenues shall be zero.
(c) Unanticipated revenues, as determined pursuant to this
section, may be used only as follows:
(1) Unanticipated revenues shall be appropriated to satisfy any
General Fund obligations arising under Section 8 for the current
fiscal year, as estimated pursuant to paragraph (3) of subdivision
(a).
(2) Any unanticipated revenues that remain after deducting, in
accordance with paragraph (1), the amount of the estimate required by
paragraph (3) of subdivision (a) shall be transferred by the
Controller no later than June 27 of the current fiscal year to the
Budget Stabilization Fund, not exceeding the amount needed to
increase the balance in the fund to an amount equal to 10 percent of
the General Fund revenues estimate set forth in the budget bill for
that fiscal year, as enacted. Notwithstanding any other provision of
this Constitution:
(A) If the Director of Finance determines at any time that the
total amount of General Fund obligations arising under Section 8 for
a fiscal year, including any maintenance factor allocation for that
fiscal year required pursuant to subdivision (e) of Section 8,
exceeds the total amount of those General Fund obligations as
calculated for that fiscal year for purposes of the estimate required
by paragraph (3) of subdivision (a), he or she shall so report to
the Legislature, the Governor, and the Controller. The Controller
shall thereupon transfer funds in the amount of that difference from
the Budget Stabilization Fund to the General Fund, and the funds so
transferred shall be appropriated only for purposes of funding the
additional amount of General Fund obligations under Section 8
determined pursuant to this paragraph.
(B) If the Director of Finance determines at any time that the
total amount of General Fund obligations arising under Section 8 for
a fiscal year, including any maintenance factor allocation for that
fiscal year required pursuant to subdivision (e) of Section 8, is
less than the total amount of those General Fund obligations as
calculated for that fiscal year for purposes of the estimate required
by paragraph (3) of subdivision (a), he or she shall so report to
the Legislature, the Governor, and the Controller. The Controller
shall thereupon transfer funds in the amount of that difference from
the General Fund to the Budget Stabilization Fund, not exceeding the
amount needed to increase the balance in the latter fund to an amount
equal to 10 percent of the estimate of General Fund revenues as set
forth in the enacted budget bill for that fiscal year.
(3) Any unanticipated revenues remaining after any appropriations
and transfers described in paragraphs (1) and (2) shall be
appropriated to retire outstanding budgetary obligations. For
purposes of this paragraph, "budgetary obligations" means any of the
following:
(A) Unfunded General Fund obligations pursuant to Section 8 for
one or more prior fiscal years.
(B) Any repayment obligations created by the suspension of
subparagraph (A) of paragraph (1) of subdivision (a) of Section 25.5
of Article XIII.
(C) Any repayment obligations created by the suspension of
subdivision (a) of Section 1 of Article XIX B.
(D) Bonded indebtedness authorized pursuant to Section 1.3.
(4) Any unanticipated revenues remaining after any appropriations
and transfers described in paragraphs (1), (2), and (3) are made to
retire all outstanding budgetary obligations shall be used for one or
more of the following purposes:
(A) Transfer by statute to the Budget Stabilization Fund.
(B) Appropriation for one-time infrastructure or other capital
outlay purposes.
(C) Appropriation to retire, redeem, or defease outstanding
general obligation or other bonded indebtedness of the State.
(D) Return to taxpayers within the current or immediately
following fiscal year by a one-time revision of tax rates, or by
rebates.
(E) Appropriation for unfunded liabilities for vested nonpension
benefits for state annuitants.
(d) For the 2013-14 fiscal year, and for each fiscal year
thereafter, the revenue forecast amount shall be determined as
follows:
(1) The General Fund revenues for the current fiscal year shall be
forecast by extrapolating from the trend line derived by a linear
regression of General Fund revenues as a function of fiscal year for
the period of the 20 preceding fiscal years. For purposes of this
paragraph, General Fund revenues shall exclude both of the following:
(A) The General Fund revenue effect of a change in state taxes
that affects General Fund revenues for less than the entire period of
the 20 preceding fiscal years.
(B) Any proceeds of bonds authorized by subdivision (a) of Section
1.3.
(2) The amount forecast pursuant to paragraph (1) shall be
increased or decreased, as applicable, to reflect the net current
fiscal year General Fund revenue effect of a change in state taxes
for which General Fund revenue effects were excluded pursuant to
subparagraph (A) of paragraph (1).
Fifth-- That if Proposition 25 is not approved by the voters at
the November 2, 2010, statewide general election, the amendments to
Section 12 of Article IV of the California Constitution proposed by
the first section of this measure, and not the amendments to Section
12 of Article IV proposed by the second section of this measure,
shall be submitted to the electors by the Secretary of State. If
Proposition 25 is approved by the voters at the November 2, 2010,
statewide general election, the amendments to Section 12 of Article
IV of the California Constitution proposed by the second section of
this measure, and not the amendments to Section 12 of Article IV
proposed by the first section of this measure, shall be submitted to
the electors by the Secretary of State.
