Bill Text: CA SB844 | 2009-2010 | Regular Session | Amended
Bill Title: State finance: budget process.
Spectrum: Unknown
Status: (Introduced - Dead) 2010-04-22 - Hearing postponed by committee. [SB844 Detail]
Download: California-2009-SB844-Amended.html
BILL NUMBER: SB 844 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 8, 2010
AMENDED IN SENATE MARCH 18, 2010
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 11, 2010
An act to add Sections 9143.5, 9145, 10247.5, 13335.3, and 13335.5
to , and to add Chapter 1.5 (commencing with Section 16330)
to Part 2 of Division 4 of Title 2 of, the Government
Code, relating to state finance.
LEGISLATIVE COUNSEL'S DIGEST
SB 844, as amended, Committee on Budget and Fiscal Review. State
finance: budget process.
Under existing law, duties and responsibilities are imposed upon
the Governor and the Director of Finance relating to the preparation
and submission of the annual state budget to the Legislature,
including, among other things, providing a complete plan of all
proposed expenditures and estimated revenues for the ensuing fiscal
year. Existing provisions of the California Constitution prohibit the
Legislature from sending to the Governor for consideration, and
prohibit the Governor from signing, a Budget Bill that would
appropriate from the General Fund a total amount that, when combined
with specific appropriations and transfers, exceeds the General Fund
revenues for that fiscal year estimated as of the date of the Budget
Bill's passage.
This bill would make statutory changes to implement and conform to
constitutional changes proposed by SCA ____
19 and would become operative only if SCA ____
19 is approved by the voters.
SCA ____ would require the Legislature to establish a schedule of
review of all state programs in which each state program would be
reviewed once per every 10 years. This bill would establish the
process for review of the performance of all state programs at least
once every 10 years.
SCA ____ would make void a statute, and would prohibit submission
to the electors of a constitutional amendment or revision proposed by
the Legislature, that would result in either a net increase in
qualified state costs or a net decrease in state revenue in excess of
$25,000,000 annually, unless the statute or measure also contains
provisions, as defined in statute, to offset the increase in costs or
loss in revenue. This bill would require the Legislative Analyst to
make specified determinations regarding a bill or measure that would
result in an annual net increase in qualified state costs, as
defined, or a net decrease in state revenue, in excess of
$25,000,000. The bill would provide that a statute or measure is in
compliance with the provisions of SCA ____ if the Legislative Analyst
determines that the increase in qualified state costs or decrease in
state revenues that would be imposed by the bill enacting the
statute or measure does not exceed the amount by which state revenues
exceed state expenditure obligations, as specified.
SCA ____ would require the state budget submitted to the
Legislature by the Governor each year to contain performance
measurement standards for state agencies and programs. This bill
would establish performance-based budgeting for every state agency in
the executive branch for which an appropriation has been made. The
state agency would be required to prepare a complete and detailed
budget setting forth all proposed expenditures and estimated revenues
for the ensuing fiscal year. The bill would require the Governor's
Budget to be based on this method beginning with the 2014-15 fiscal
year.
SCA ____ would permit nonrecurring revenue to be expended only to
pay for one-time expenditures. This bill would require that
nonrecurring revenue, as defined, be used only for one-time
expenditures, as defined, in the Budget Bill for the ensuing year,
and would specify the process for estimating, evaluating, and
determining the existence of nonrecurring revenue.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 9143.5 is added to the Government Code, to
read:
9143.5. (a) Within one year of the operative date of the act that
added this section, the Legislature shall establish a process,
including the use of a new or existing joint committee, for reviewing
the performance of all state programs at least once every 10 years.
The process shall include a schedule with deadlines for the review of
programs. It shall provide for the review of programs the
expenditures for which total one-third or more of all expenditures by
July 1, 2015, and for the review of programs the expenditures for
which total two-thirds of all expenditures by January 1, 2018. For
purposes of this section, "expenditures" includes , in addition
to state program costs, statutory exemptions, deductions,
credits, or exclusions from taxes or fees that would otherwise apply.
(b) Six months prior to the deadline for review of each program,
the joint committee shall refer the initial program review to the
appropriate policy committees of each house of the Legislature. For
programs with common objectives, the reviews may be combined. Within
90 days of the deadline, the policy committees shall make
recommendations regarding the program to the joint committee. The
joint committee's review may be based on the recommendations of the
policy committees, as well as recommendations that may be made by the
Milton Marks "Little Hoover" Commission on California State
Government Organization and Economy, the Legislative Analyst, the
Bureau of State Audits, or the public. In preparing proposed
legislation for a program being reviewed, the joint committee shall
propose one or more of the following:
(1) Modifications to the program that will reduce costs.
(2) Modifications to the program that will improve outcomes.
(3) Termination of the program.
(c) Proposed legislation of the joint committee shall be submitted
to the committee on rules of each house for referral to the
appropriate policy committee for public hearing and further action.
(d) The joint committee shall post on its Internet Web site its
recommendations and the results of the Legislature's action.
SEC. 2. Section 9145 is added to the Government Code, to read:
9145. (a) Before a bill, or a measure that proposes to amend or
revise the California Constitution, that has been referred to the
fiscal committee of either house is read for a third time in either
house of the Legislature, the fiscal committee of the respective
house of the Legislature shall determine whether the bill or measure
is subject to review by the Legislative Analyst pursuant to this
section. If the committee refers the bill or measure to the
Legislative Analyst for review, the Legislative Analyst shall
determine whether the bill or measure would result in a net increase
in qualified state costs or a net decrease in state revenue. The
Legislative Analyst shall submit the analysis of the bill or measure
to the fiscal committees of each house of the Legislature and shall
place the analysis on his or her Internet Web site if he or she
determines that the bill or measure would result in either a net
increase in qualified state costs or a net decrease in state revenue
in excess of twenty-five million dollars ($25,000,000) annually, as
adjusted for inflation pursuant to the California Consumer Price
Index.
(b) (1) If a bill or measure, as determined by
the Legislative Analyst , determines a bill
or measure would result in either a net increase in qualified
state costs or a net decrease in state revenue in excess of
twenty-five million dollars ($25,000,000) annually, as adjusted for
inflation pursuant to the California Consumer Price Index, the
Legislative Analyst shall determine whether the bill or measure, if
enacted, would comply with the requirements of subdivision (e) of
Section 8 of Article IV, or Section 3.5 of Article XVIII, as
applicable, of the California Constitution.
(2) A statute or measure shall be deemed to comply with the
requirements of subdivision (e) of Section 8 of Article IV, or
Section 3.5 of Article XVIII, as applicable, of the California
Constitution if the Legislative Analyst determines that the net
increase in qualified state costs or net decrease in state revenues
that would be imposed by the bill enacting the statute or measure
proposing to amend or revise the California Constitution does not
exceed the amount by which state revenues exceed state expenditure
obligations for the prior fiscal year, the current fiscal year, or
any of the three succeeding fiscal years, whichever is least.
(c) If the Legislative Analyst makes a determination pursuant to
subdivision (b) that a bill, if enacted, or measure would not comply
with the requirements of subdivision (e) of Section 8 of Article IV,
or Section 3.5 of Article XVIII, as applicable, of the California
Constitution, and the Legislature, by two-thirds vote of the
membership of each house, makes a finding, based on its financial
analysis, that the bill or measure would result in a net increase in
qualified state costs or a net decrease in state revenue in an amount
equal to, or less than, twenty-five million dollars ($25,000,000)
annually, as adjusted for inflation pursuant to the California
Consumer Price Index, the bill, if enacted, or measure shall be
deemed to be in compliance with subdivision (e) of Section 8 of
Article IV, or Section 3.5 of Article XVIII, as applicable, of the
California Constitution.
(d) For purposes of this section, the determination by the
Legislative Analyst as to whether a bill or measure would result in a
net increase in qualified state costs or a net decrease in state
revenue may include consideration of the impact of program changes
attributable to cost savings or changes in revenues of other state or
local programs that are reasonably expected to occur as a result of
the implementation of the bill or measure. The Legislative Analyst
shall establish the time period for its analysis under this section.
(e) For purposes of this section and Section 10247.5, and
subdivision (e) of Section 8 and paragraph (2) of subdivision (a) of
Section 12 of Article IV, and Section 3.5 of Article XVIII, of the
California Constitution, the following terms have the following
meanings:
(1) "Qualified state costs" means costs to the state, whether paid
from General Fund or special fund sources. "Qualified state costs"
does not include the following:
(A) Costs incurred for the payment of principal and interest on a
general obligation bond.
(B) The restoration of funding to an agency or program that was
reduced in a prior fiscal year or years in order to balance the
budget or address a forecasted deficit if any of the following apply:
(i) The bill or measure restores reductions in appropriations made
pursuant to a declaration of fiscal emergency under subdivision (f)
of Section 10 of Article IV of the California Constitution.
(ii) The bill or measure restores reductions in appropriations
made prior to the operative date of the act adding this section if
the Legislature makes a finding that the reductions in the program's
or agency's funding were necessary in order to balance the budget or
to address a mid-year deficit and that expanding the program or
agency is limited to restoring the program's or agency's funding to
the level that existed prior to the reductions.
(iii) The bill or measure restores reductions in appropriations
made on or after the operative date of the act that added this
section if the Legislature makes a finding that at the time the
reductions were made, the reductions in the program's or agency's
funding were necessary to balance the budget or to address a
forecasted deficit, and that at the time the funding is restored, the
expansion of the program or agency is limited to restoring the
program or agency's funding to the level that existed prior to the
reductions made pursuant to paragraph (4) of subdivision (f) of
Section 10 of Article IV of the California Constitution:
(C) Increases in a program's or agency's funding contained in the
Budget Bill or in a budget implementation bill which are limited to
the fiscal year for which the bill was enacted.
(D) Growth in a program's or agency's funding attributable to
increases in the cost of living or work load, including an increase
contained in a memorandum of understanding approved by the
Legislature.
(E) Growth in a program's or agency's funding required by federal
law or a California law that is in effect on the operative date of
the act that added this section.
(F) A bill or measure containing a requirement described in
paragraph (5) of subdivision (b) of Section 6 of Article XIII B of
the California Constitution.
(2) "A net increase in qualified state costs" means ongoing
expenditures for a program or agency and does not include a one-time
expenditure made by a program or agency.
(3) "Additional revenue" means revenue to the state that results
from specific changes made by federal or state law and that the state
agency responsible for collecting the revenue has quantified and
determined to be a sustained increase.
SEC. 3. Section 10247.5 is added to the Government Code, to read:
10247.5. Before a bill or measure is read for a third time in
either house of the Legislature, the digest of the Legislative
Counsel on the bill or measure shall reflect the determination made
by the Legislative Analyst pursuant to Section 9145 whenever the
Legislative Analyst determines that the bill or measure would result
in a net increase in qualified state costs or a net decrease in state
revenue in excess of twenty-five million dollars ($25,000,000)
annually, as adjusted for inflation pursuant to the California
Consumer Price Index.
SEC. 4. Section 13335.3 is added to the Government Code, to read:
13335.3. (a) The purpose of performance-based budgeting is to
inform policy, fiscal, and oversight decisions by the Governor and
Members of the Legislature; to focus managers, supervisors, and rank
and file workers on achieving desired goals; and to communicate to
the public the value of public programs, progress toward desired
results, and the choices available to improve the expenditure of
public funds.
(b) Every state agency for which an appropriation has been made
shall submit to the department a complete and detailed budget at the
time and in the form prescribed by the department, setting forth all
proposed expenditures and estimated revenues for the ensuing fiscal
year.
(c) The budget submitted to the department and proposed by the
Governor shall use performance-based budgeting methods that make
clear to policymakers and the public the value and results of
existing operations and any proposed changes.
(d) A performance-based budget shall identify and update all of
the following:
(1) The mission and goals of the agency.
(2) The activities and programs focused on achieving those goals.
(3) Performance metrics that reflect desired outcomes for existing
and proposed activities and a targeted performance level for the
following year.
(4) Prior-year performance data and an explanation of any
deviation from previous-year targets.
(5) Proposed changes in statute, including the creation of
incentives or elimination of disincentives that could improve
outcomes or hold down costs.
(e) The Governor shall provide on his or her Internet Web site a
summary of each state agency's mission, goals, prior-year
performance, and future-year objectives.
SEC. 5. Section 13335.5 is added to the Government Code, to read:
13335.5. (a) Not later than the 2014-15 fiscal year, and each
fiscal year thereafter, the budget submitted by the Governor to the
Legislature required by Section 12 of Article IV of the California
Constitution shall use performance-based budgeting methods.
(b) The amount of each appropriation made in the Budget Act for
the 2014-15 fiscal year, and each fiscal year thereafter, for
expenditure by any state agency shall be determined after considering
performance-related data. The Budget Act introduced by the Governor
also shall include performance standards, which may be amended by the
Legislature. These standards shall apply to each state agency and
allow the public and policymakers to understand the effectiveness and
efficiency of each program.
(c) The Legislative Analyst's Office
Analyst shall review the adequacy of performance metrics and
progress toward targeted outcomes in its review of
the Governor's budget proposal.
(d) A task force consisting of the director, the Controller, and
the chairpersons and vice chairpersons of the Senate Committee on
Budget and Fiscal Review and the Assembly Committee on Budget shall
do all of the following:
(1) Review and comment on guidelines and procedures drafted by the
department for use by state agencies in developing performance-based
budgets pursuant to Sections 13320 and 13335.3. The guidelines shall
describe how state employees will be involved in establishing and
implementing performance standards.
(2) Review and comment on a training program developed by the
department for appropriate executive branch personnel to ensure the
successful implementation of performance-based budgeting and
management by state agencies.
(3) Review and comment on a plan prepared by the department for
systematically phasing in the requirements of Sections 13320 and
13335.3. The plan shall ensure that by the 2012-13 fiscal year
performance-based budgeting methods are used in preparing, reviewing,
and enacting one-third or more of the total General Fund
expenditures proposed in the Governor's Budget for that fiscal year.
(e) For purposes of this article, "state agency" means any agency,
department, or other entity of the executive branch of the state
required to submit a budget pursuant to Article 2 (commencing with
Section 13320).
SEC. 6. Sections 1 to 5, inclusive, of this act
shall become operative only if SCA 19 is approved by the voters, and
they shall become operative upon the operative date of that measure.
SEC. 6. Chapter 1.5 (commencing with Section
16330) is added to Part 2 of Division 4 of Title 2 of the Government
Code, to read:
CHAPTER 1.5. NONRECURRING REVENUE
16330. For purposes of this chapter and Section 12 of Article IV
of the California Constitution, the following definitions apply:
(a) "Nonrecurring revenue" means General Fund proceeds of taxes
received in a fiscal year from any source that exceed both the amount
that the state received from that source in the immediately
preceding fiscal year and the amount the state expects to receive
from that source in each subsequent fiscal year.
(b) (1) "One-time expenditure" means any of the following:
(A) A transfer by statute to the Budget Stabilization Fund.
(B) An appropriation for one-time infrastructure or other capital
outlay purposes.
(C) An appropriation to retire, redeem, or defease outstanding
general obligation or other bonded indebtedness of the state.
(D) The return to taxpayers within the current or immediately
following fiscal year by a one-time revision of tax rates, or by
rebates.
(E) An appropriation for unfunded liabilities for vested
nonpension benefits for state annuitants.
(F) Appropriations necessary to meet the outstanding balance of
the maintenance factor owed by the state for one or more prior fiscal
years pursuant to subdivision (d) of Section 8 of Article XVI of the
California Constitution.
(2) "One-time expenditure" does not include either of the
following:
(A) An appropriation necessary to meet the state's obligation
under Section 8 of Article XVI of the California Constitution,
including any maintenance factor allocation for the current fiscal
year required pursuant to subdivisions (d) and (e) of that section.
(B) An appropriation necessary to balance the state budget for the
fiscal year in which the nonrecurring revenue is received, the
absence of which would produce a deficit for that fiscal year.
16331. Based on an analysis of the General Fund proceeds of taxes
received through April 30 of each year, the Franchise Tax Board and
State Board of Equalization shall identify each source of General
Fund proceeds of taxes that is higher than the tax proceeds received
from that source in the preceding fiscal year. The Franchise Tax
Board and the State Board of Equalization shall provide this
information to the Legislature, the Governor, the Controller, and the
public by May 15 of each year.
16332. By May 31 of each year, the Legislative Analyst and the
Director of Finance shall jointly do all of the following:
(a) Estimate the amount of nonrecurring revenue deposited in the
General Fund as of that date for the current fiscal year and provide
this estimate to the Legislature, the Governor, the Controller, and
the public. In determining this estimate, the Legislative Analyst and
the Director of Finance shall consider, at a minimum, the Governor's
estimate of nonrecurring revenue for the current fiscal year;
historical growth in General Fund proceeds of taxes, including data
provided by the Franchise Tax Board and the State Board of
Equalization pursuant to Section 16331; economic conditions and
projections; stock market trends, including data regarding capital
gains and the exercise of stock options; and an evaluation of the
revenue forecast for the prior fiscal year and the extent to which
that forecast was accurate.
(b) Determine whether the amount of nonrecurring revenue received
during the prior fiscal year was less than the amount of nonrecurring
revenue for that fiscal year that was appropriated pursuant to
subdivision (a) of Section 16333, and provide a certification of that
determination to the Legislature, the Governor, the Controller, and
the public.
16333. (a) By June 25 of each year, based on the estimate
provided pursuant to subdivision (a) of Section 16332, the
Legislature shall estimate the amount of nonrecurring revenue
received for the current fiscal year. Except as provided in
subdivision (b), nonrecurring revenue shall be used for one-time
expenditures only and shall be appropriated in the Budget Bill for
the ensuing fiscal year.
(b) If the amount appropriated pursuant to subdivision (a) in a
prior fiscal year exceeded the amount of nonrecurring revenue
received during that fiscal year, the excess amount may be deducted
from the amount of nonrecurring revenue available for appropriation
in ensuing fiscal years pursuant to subdivision (a).
SEC. 7. This act shall become operative only if
SCA ____ is approved by the voters, and it shall become operative
upon the operative date of that measure.
