BILL NUMBER: ACA 11 CHAPTERED
BILL TEXT
RESOLUTION CHAPTER 185
FILED WITH SECRETARY OF STATE SEPTEMBER 18, 2002
ADOPTED IN SENATE SEPTEMBER 1, 2002
ADOPTED IN ASSEMBLY AUGUST 31, 2002
AMENDED IN ASSEMBLY AUGUST 31, 2002
AMENDED IN ASSEMBLY MAY 2, 2002
AMENDED IN ASSEMBLY APRIL 16, 2002
INTRODUCED BY Assembly Members Richman and Canciamilla
JUNE 5, 2001
Assembly Constitutional Amendment No. 11--A resolution to propose
to the people of the State of California an amendment to the
Constitution of the State, by adding Article XVI A thereto, relating
to infrastructure finance.
LEGISLATIVE COUNSEL'S DIGEST
ACA 11, Richman. Infrastructure: finance.
Existing law, commencing on January 10, 2002, requires the
Governor to submit to the Legislature a proposed 5-year
infrastructure plan. The plan is required to be submitted annually,
in conjunction with the Governor's Budget, and to cover a 5-fiscal
year period, beginning with the fiscal year that is the same as that
covered by the Governor's Budget with which the plan is submitted.
This measure would establish the California Twenty-First Century
Infrastructure Investment Fund in the State Treasury. Beginning in
the 2006-07 fiscal year, the measure would cause a specified
percentage of revenues to be transferred from the General Fund to the
infrastructure fund 4 times during the fiscal year. The measure
would increase the percentage of revenues to be transferred each
year, subject to the rate of increase of total General Fund revenues
compared to the prior fiscal year as estimated by the Department of
Finance. The measure would require the Department of Finance to
prepare an annual plan to expend these funds, unless the Governor
directs another state agency to carry out this responsibility.
This measure would require that the funds in the infrastructure
fund be allocated by the Legislature for capital outlay purposes, of
which 50% would be for acquisition, construction, rehabilitation,
modernization, or renovation of state-owned infrastructure and 50%
would be for acquisition, construction, rehabilitation,
modernization, or renovation of local government infrastructure,
excluding school districts and community college districts.
WHEREAS, An investment in California's infrastructure is an
investment in California's future because the quality of life in
California depends on the quality of our children's education and on
the condition of the state's transportation network, water system,
parks, natural resources, and other infrastructure; and
WHEREAS, California's infrastructure is critically under-funded;
and
WHEREAS, California has often used bonds to pay for infrastructure
investments, but bonds alone cannot address the magnitude of
California's infrastructure investment deficit; and
WHEREAS, According to the Legislative Analyst's 1998 report,
Overhauling the State's Infrastructure Planning and Financing
Process, the state needs to take two main steps to provide a more
stable funding source for our infrastructure needs: dedicate a given
level of General Fund resources for infrastructure, and reserve a
proportion of the General Fund for current year capital outlay; and
WHEREAS, In the 1960s, when California created the nation's finest
education and transportation systems, the state routinely committed
7 to 10 times more of the General Fund to capital outlay than today;
and
WHEREAS, Establishing a California Twenty-First Century
Infrastructure Investment Fund and slowly increasing the amount of
the General Fund committed to capital outlay is an appropriate method
of assuring continual capital outlay to address infrastructure
needs; and
WHEREAS, By limiting the annual growth of the infrastructure fund
to a small percentage of annual General Fund growth, Article XVI A
will protect education, child care, and other necessary services
during periods of economic recession; and
WHEREAS, The purpose of subdivision (b) of Section 2 of Article
XVI A is to ensure that funding for infrastructure projects is not at
the expense of funding of other vital programs and to protect
existing vital programs in the event of an economic recession; now,
therefore, be it
Resolved by the Assembly, the Senate concurring, That the
Legislature of the State of California at its 2001-02 Regular Session
commencing on the fourth day of December 2000, 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 by adding Article XVI A thereto, to read:
ARTICLE XVI A
INFRASTRUCTURE INVESTMENT FUND
SECTION 1. The California Twenty-First Century Infrastructure
Investment Fund is hereby established in the State Treasury for the
purpose of funding capital outlay expenses. The Department of
Finance shall prepare an annual plan to expend these funds, unless
the Governor directs another state agency to prepare the plan.
SEC. 2. As used in this article:
(a) "Department of Finance" means the Department of Finance or a
successor agency.
(b) "General Fund revenues" excludes transfers from other funds
into the General Fund and transfers from the General Fund into other
funds.
(c) "Infrastructure fund" means the California Twenty-First
Century Infrastructure Investment Fund.
(d) "Made for purposes of the current fiscal year Budget Act as
determined by the Department of Finance" means General Fund revenues
contained in the Final Budget Summary published by the Department of
Finance for the current fiscal year.
SEC. 3. (a) Commencing in the 2006-07 fiscal year, and in
every fiscal year thereafter, the Controller shall make the following
transfers from the General Fund to the infrastructure fund:
(1) During the 2006-07 fiscal year, a sum equal to 1 percent of
the total amount of General Fund revenues as estimated by the
Department of Finance for purposes of the Budget Act for that fiscal
year.
(2) During the 2007-08 fiscal year, a sum equal to 1.3 percent of
the total amount of General Fund revenues as estimated by the
Department of Finance for purposes of the Budget Act for that fiscal
year.
(3) During the 2008-09 fiscal year, a sum equal to 1.6 percent of
the total amount of General Fund revenues as estimated by the
Department of Finance for purposes of the Budget Act for that fiscal
year.
(4) During the 2009-10 fiscal year, a sum equal to 1.9 percent of
the total amount of General Fund revenues as estimated by the
Department of Finance for purposes of the Budget Act for that fiscal
year.
(5) During the 2010-11 fiscal year, a sum equal to 2.2 percent of
the total amount of General Fund revenues as estimated by the
Department of Finance for purposes of the Budget Act for that fiscal
year.
(6) During the 2011-12 fiscal year, a sum equal to 2.5 percent of
the total amount of General Fund revenues as estimated by the
Department of Finance for purposes of the Budget Act for that fiscal
year.
(7) During the 2012-13 fiscal year, a sum equal to 2.8 percent of
the total amount of General Fund revenues as estimated by the
Department of Finance for purposes of the Budget Act for that fiscal
year.
(8) During the 2013-14 fiscal year, and every fiscal year
thereafter, a sum equal to 3 percent of the total amount of General
Fund revenues as estimated by the Department of Finance for purposes
of the Budget Act for the applicable fiscal year.
(b) Notwithstanding subdivision (a), if the total General Fund
revenues for a fiscal year are estimated by the Department of Finance
to not increase by at least 4 percent, after adjusting for
inflation, compared to the revenues for the prior fiscal year, the
increase in the percentage amount to be transferred in the budget
year, as otherwise specified in paragraphs (2) to (8), inclusive, of
subdivision (a) shall be delayed by one fiscal year.
(c) Notwithstanding subdivision (a), if the total General Fund
revenues for a fiscal year are estimated by the Department of Finance
to increase by at least 8 percent, after adjusting for inflation,
compared to the revenues for the prior fiscal year, the increase in
the percentage amount to be transferred in the budget year, as
otherwise specified in paragraphs (2) to (8), inclusive, of
subdivision (a) shall be accelerated by one fiscal year from the
schedule in subdivision (a).
(d) Notwithstanding paragraph (1) of subdivision (a), the initial
annual transfer to the infrastructure fund shall not occur until
General Fund revenues for a fiscal year are estimated by the
Department of Finance to increase by at least 4 percent, after
adjusting for inflation, compared to the revenues for the prior
fiscal year.
(e) Notwithstanding subdivision (a), in a fiscal year in which
both of the conditions specified in subparagraphs (A) and (B) of
paragraph (1) apply, the transfer pursuant to this section shall be
reduced by an amount determined pursuant to paragraph (2):
(1) (A) The percentage growth in the amount required to be applied
for the support of school districts and community college districts
pursuant to Section 8 of Article XVI is greater than the percentage
growth in General Fund revenues.
(B) The transfer specified pursuant to this section is not
otherwise reduced pursuant to subdivision (b) or (f) or pursuant to
subdivision (b) or (c) of Section 4.
(2) (A) Determine the amount required to be applied for the
support of school districts and community college districts pursuant
to Section 8 of Article XVI for the current fiscal year based on the
estimate contained in the Governor's May Revision proposal for that
fiscal year.
(B) Determine an amount equal to the amount required to be applied
for the support of school districts and community college districts
pursuant to Section 8 of Article XVI for the prior fiscal year
multiplied by the percentage growth in General Fund revenues from the
prior to the current fiscal year based on the estimate contained in
the Governor's May Revision proposal for the current fiscal year.
(C) Subtract the amount determined pursuant to subparagraph (B)
from the amount determined pursuant to subparagraph (A) and multiply
that difference by 0.5.
(f) Notwithstanding subdivision (a), the percentage of General
Fund revenues transferred to the infrastructure fund in any fiscal
year may not exceed the difference between 7.5 percent of estimated
General Fund revenues for that fiscal year less the percentage of
General Fund revenues for the prior fiscal year that were used to
make debt payments in the prior fiscal year on general obligation
bonds of the State and lease-revenue bonds issued by the State Public
Works Board.
(g) The annual amount transferred to the infrastructure fund, as
required pursuant to subdivision (a), shall be reduced by an amount
equal to the sales tax revenue in each fiscal year that is redirected
to the Traffic Congestion Relief and Safe School Bus Trust Fund
pursuant to Proposition 51 if that measure was approved by the voters
in November 2002.
SEC. 4. (a) The annual transfer from the General Fund to the
infrastructure fund, as provided for by this article, shall be made
over four time periods in the fiscal year as follows:
(1) The first transfer shall be made on August 1, or 30 days after
enactment of the budget, whichever is later, and shall be in the
amount of 25 percent of the total transfer for the fiscal year based
on revenue assumptions made for purposes of the Budget Act, as
determined by the Department of Finance.
(2) The second transfer shall be made on November 1, and shall be
in the same amount as the first transfer.
(3) The third transfer shall be made on February 1, and the amount
shall be the difference between 75 percent of the total required
transfer for the current fiscal year, based on the adjusted revenue
estimate for the current fiscal year according to the Governor's
Budget proposal for the following fiscal year, and the total amount
of the first and second transfers.
(4) The fourth transfer shall be made on May 31, and the amount
shall be based on the difference between the total required transfer
for the current fiscal year based on the adjusted revenue estimate
for the current fiscal year according to the Governor's May Revision
proposal for the following fiscal year and the total amount
previously transferred.
(b) (1) If the updated revenue estimate for the current fiscal
year, as contained in the Governor's Budget proposal for the next
fiscal year, is more than 5 percent below the revenue assumptions
made for purposes of the current fiscal year Budget Act as determined
by the Department of Finance, the February 1 transfer shall be
suspended until no sooner than May 31.
(2) If the updated revenue estimate for the current fiscal year,
as contained in the Governor's May Revision proposal for the next
fiscal year, is more than 5 percent below the revenue assumptions
made for purposes of the current fiscal year Budget Act as determined
by the Department of Finance, the February l transfer and the May 31
transfer shall be suspended for that fiscal year. If the February 1
transfer had already been made because revenue estimates at that
time did not show a 5 percent or greater decline, that amount shall
be credited toward the transfer for the next fiscal year.
(3) If the revenue estimate for the current fiscal year, as
contained in the Governor's May Revision proposal for the next fiscal
year, is between 2 percent and 5 percent below the revenue
assumptions made for purposes of the current fiscal year Budget Act,
as determined by the Department of Finance, the total transfer for
that fiscal year shall be only 75 percent of what it would otherwise
be if revenues had not declined from the original estimate.
(4) If the revenue estimate for the current fiscal year, as
contained in the Governor's May Revision proposal for the next fiscal
year, is between zero and 2 percent below the revenue assumptions
made for purposes of the current fiscal year Budget Act as determined
by the Department of Finance, the total transfer amount for that
fiscal year shall be 100 percent of that required under Section 3,
and the fourth transfer on May 31 shall include the balance needed to
fulfill the transfer requirement.
(c) If there is a year-to-year revenue decline on the basis that
revenues in a fiscal year, as estimated either for purposes of the
Budget Act at the beginning of the fiscal year, the following January
in the Governor's Budget, or the following May in the Governor's May
Revision, are estimated to be either less than the actual revenues
in the prior fiscal year or more than 4 percent below actual revenues
in the prior fiscal year after adjusting for inflation, both of the
following shall occur:
(1) The transfer shall be suspended for that year. If the
year-to-year decline in revenues is based on January or May revenue
estimates, any transfers already made in August, November, and
February of that fiscal year shall be credited toward transfer
requirements for the following fiscal year. However, if the transfer
is suspended in any fiscal year, the transfer in the following
fiscal year shall be only one-half of the amount otherwise required
based on the percentages specified in Section 3. That transfer
requirement shall include amounts credited from transfers made in the
prior fiscal year pursuant to this paragraph prior to any suspension
occurring.
(2) Any unencumbered funds in the infrastructure fund that are
allocated only to the State, and are subject to appropriation, may be
loaned interest-free to the General Fund, either in the fiscal year
that the transfer is suspended or in the following fiscal year,
provided that these loans do not result in the delay of any
previously funded projects.
SEC. 5. The funds transferred to the infrastructure fund in
each fiscal year shall be allocated by the Legislature in the
following fiscal year for capital outlay purposes, as follows:
(a) Fifty percent for acquisition, construction, rehabilitation,
modernization, or renovation of infrastructure that is owned, or is
to be acquired by, the State.
(b) Fifty percent for acquisition, construction, rehabilitation,
modernization, or renovation of infrastructure, including, but not
limited to, streets, roads, highways, transportation, water, parks,
and open space, that is owned, or is to be acquired by, local
governments, including cities, counties, a city and county, and
special districts, but not school districts or community college
districts. The Legislature shall provide by law a method for the
annual allocation of these funds to local governments for their use
on projects that meet the requirements of this section.
SEC. 6. Neither transfers to, nor allocations from, the
infrastructure fund shall in any manner affect the calculations
otherwise made pursuant to Section 8 or Section 8.5 of Article XVI.
SEC. 7. For purposes of this article, appropriations from the
infrastructure fund pursuant to this article constitute
appropriations for qualified capital outlay projects for purposes of
Section 9 of Article XIII B.