BILL NUMBER: AB 1389	CHAPTERED
	BILL TEXT

	CHAPTER  751
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2008
	APPROVED BY GOVERNOR  SEPTEMBER 30, 2008
	PASSED THE SENATE  SEPTEMBER 16, 2008
	PASSED THE ASSEMBLY  SEPTEMBER 16, 2008
	AMENDED IN SENATE  SEPTEMBER 15, 2008
	AMENDED IN SENATE  AUGUST 21, 2008
	AMENDED IN SENATE  JULY 1, 2008
	AMENDED IN ASSEMBLY  JANUARY 7, 2008

INTRODUCED BY   Committee on Budget

                        FEBRUARY 23, 2007

   An act to amend Section 23320 of the Business and Professions
Code, to amend Sections 22664, 22954, 22954.1, 22955, 22955.5, 24412,
24415, 24416, 24417, and 24600 of, to add Sections 8277.65, 8277.66,
and 24415.5 to, to repeal Section 24411 of, and to repeal and add
Section 22954.5 of, the Education Code, to amend Section 13001 of the
Fish and Game Code, to add Section 4101.4 to the Food and
Agricultural Code, to amend Sections 8544.5, 11032, 11033, 11270,
11271, 11272, 11274, 11276, 11277, 13300, 13302, 13332.02, 13332.03,
15849.6, 16142, 16142.1, 16144, 22877, 22883, 30061, 63035, and
76104.6 of, to add Sections 11270.1, 13311, 13312, 15814.28, and
19816.22 to, to add Chapter 7 (commencing with Section 15849.20) to
Part 10b of Division 3 of Title 2 of, and to repeal Section 13997.4
of, the Government Code, to amend Sections 33675 and 33680 of, and to
add Sections 17928, 33684, 33685, 33686, 33687, 33688, and 33689 to,
the Health and Safety Code, to amend Section 1060 of the Insurance
Code, to amend Sections 62.5, 62.9, and 139.48 of the Labor Code, to
add Section 69.9 to the Military and Veterans Code, to amend Section
25416 of the Public Resources Code, to amend Section 281 of the
Public Utilities Code, to amend Sections 18535, 18536, 19280, and
30131.4 of, and to add Sections 19011.5 and 19290.1 to, the Revenue
and Taxation Code, to amend Section 5891 of the Welfare and
Institutions Code, and to amend Section 6 of Chapter 213 of the
Statutes of 2000, relating to state government, making an
appropriation therefor, and declaring the urgency thereof, to take
effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1389, Committee on Budget. State government.
   (1) The State Teachers' Retirement Law prescribes the rights and
benefits of members of the State Teachers' Retirement System. Under
the law, a continuous appropriation equal to 2.5% of creditable
compensation, as specified, is made annually from the General Fund
for transfer to the Supplemental Benefit Maintenance Account in the
Teachers' Retirement Fund to fund supplemental purchase power
protection payments to retired members, disabled members, and
beneficiaries of the Defined Benefit Program of the State Teachers'
Retirement System. The law provides that the transfer for the 2008-09
fiscal year be made on November 1.
   This bill would reduce the continuous appropriation from the
General Fund, described above, by specified amounts. The bill would
require that the transfers to the Supplemental Benefit Maintenance
Account be made on November 1 and April 1 of each fiscal year, with
each transfer to equal 1/2 the amount appropriated. The bill, until
2013, would also make a series of appropriations from the General
Fund for the purpose of paying interest on the judgment in a
specified case related to the account. The bill would state the
intent of the Legislature that certain information be included in the
annual Budget Act.
   (2) Existing law requires the Teachers' Retirement Board,
beginning in 2006 and every 4 years thereafter, to report to the
Legislature and the Department of Finance regarding the ability of
the retirement system to pay the supplemental purchase power
protection payments, described above, in each fiscal year until 2036,
and appropriates funds, as determined by the actuary and certified
by the Director of Finance, as necessary to enable the Teachers'
Retirement System to make those payments, as specified, until June
30, 2036. Existing law limits the aggregate amount of funds to be
appropriated by these provisions pursuant to a specified method.
   This bill would revise and recast these provisions. The bill would
delete the provisions regarding the appropriation, described above,
and would delete the termination date, described above. The bill
would require the board to adopt an actuarial projection regarding
the ability of the system to continue providing, over a term to be
established by the board, the purchasing power protection provided
from the funds of the Supplemental Benefit Maintenance Account. The
bill would require the board, as a result of determinations made in
connection with the actuarial projection, to identify the maximum
level of benefits it expects to be sustainable, as specified.
   (3) Existing law requires that, for the 1998-99 fiscal year, the
contributions to be made to the Supplemental Benefit Maintenance
Account be reduced by the total value of the state's interest in the
school lands from the sale of the Elk Hills Naval Petroleum Reserve.
   This bill would repeal those provisions.
   (4) Existing law defines creditable compensation for the purposes
of making contributions from the General Fund to the Supplemental
Benefit Maintenance Account and the Teachers' Retirement Fund.
Existing law specifies, with regard to making contributions from the
General Fund to the Teachers' Retirement Fund, that the amount is to
be calculated annually on October 1.
   This bill would require that the Teachers' Retirement Board
calculate, on or after October 1 and on or before October 25 each
year, the total amount of creditable compensation upon which members'
contributions are based for the fiscal year that ended on the
immediately preceding June 30. The bill would require the board to
immediately submit a report that includes this calculation to the
Director of Finance, the Chairperson of the Joint Legislative Budget
Committee, and the Legislative Analyst. The bill would provide a
process for reporting a revision in the amount of that calculation
and adjusting subsequent appropriations to reflect that amount. The
bill would also make conforming changes.
   (5) Existing law prohibits the purchase power protection payments
from the Supplemental Benefit Maintenance Account from exceeding the
amount necessary to restore purchasing power up to 80% of the
purchasing power of the initial monthly allowance, as specified.
Existing law provides that these benefits are vested only to the
extent that funds are appropriated to the Supplemental Benefit
Maintenance Account, as specified. Existing law permits annual
cost-of-living adjustments for retired members, disabled members, and
beneficiaries, in excess of a specified adjustment, to be included
in a General Fund appropriation in the annual Budget Act, and
provides a method for its calculation and distribution. Existing law
provides that these provisions shall be operative only in a fiscal
year during which distributions from the Supplemental Benefit
Maintenance Account are not made. Existing law establishes a
permissive process for funding purchasing power payments, or
adjusting their amount, if the Supplemental Benefit Maintenance
Account does not have sufficient funds to provide payments of up to
80% of the initial monthly allowance. Existing law creates an
auxiliary Supplemental Benefit Maintenance Account to be distributed
when the funds in the Supplemental Benefit Maintenance Account are
insufficient to support 80% of the initial monthly allowance to
retired members, disabled members, and beneficiaries.
   This bill would increase the amount of the supplemental purchase
power protection payments from the Supplemental Benefit Maintenance
Account to up to 85% of the purchasing power of the initial monthly
allowance, as specified, and would make corresponding changes in the
related provisions described above. The bill would authorize the
board to adjust the purchasing power protection payments between no
more than 85% and no less than 80%, based on actuarial projections,
as specified. The bill would require the board to propose uses for
excess moneys, if any, in the account. The bill would authorize the
board to adopt regulations in this regard, which would be filed with
the Secretary of State but would not be subject to the Administrative
Procedure Act. The bill would delete the optional process for
General Fund cost-of-living adjustments for retired members, disabled
members, and beneficiaries, operative only in a fiscal year during
which distributions from the Supplemental Benefit Maintenance Account
are not made. The bill would make conforming changes.
   (6) Existing law sets forth the powers and duties of the Director
of Finance generally in supervising matters concerning the financial
and business policies of the state.
   This bill would authorize the director to defer payment of General
Fund moneys appropriated to the University of California in the
annual Budget Act until May or June of the same fiscal year, subject
to specified criteria. This bill also would, commencing with the
2008-09 fiscal year, authorize the director to reduce General Fund
items of appropriation for state operations or suspend the effective
date of cost-of-living adjustments or rate increases upon making
certain determinations, according to specified criteria and subject
to specified exceptions. The bill would specify that these provisions
would only become operative if a specified amendment to the
California Constitution is submitted to, and approved by, the voters
at a statewide election.
   (7) Existing law establishes the Department of Finance within
state government. Under existing law, the department is required to
devise an accounting system for each state agency that provides for
the accrual of revenues at the end of the fiscal year if the
underlying transaction has occurred as of the last day of the fiscal
year, and the due date for the tax is within 2 months of the end of
the period.
   This bill would revise this accrual provision to replace the tax
condition with one requiring instead that the revenue amount is
measurable and will be collected during the current period or in time
to pay current year-end liabilities.
   (8) Existing law requires the Secretary of the Resources Agency to
direct the Controller to pay annually to each eligible county, city,
or city and county, $5 per acre for prime agricultural land, and $1
per acre for all other land, other than prime agricultural land,
which is devoted to open space uses of statewide significance, or for
a county that has adopted farmland security zones, $8 for land that
is within, or within 3 miles of the boundaries of the sphere of
influence of, each incorporated city.
   This bill would require the Controller, commencing with the
2008-09 fiscal year, and each fiscal year thereafter, to reduce these
payments by 10%.
   (9) Existing law sets forth the procedures pursuant to which local
agencies receive specified types of open space subventions of state
funds. The Controller is required to make the payment to the local
agencies on or before June 30 of each year.
   This bill would also specify that the payment would not be made
earlier than April 20 of each year.
   (10) Existing law requires the establishment in each county
treasury of a Supplemental Law Enforcement Services Fund, and
requires that moneys from this fund be allocated to counties and
cities located within a county for various law enforcement services,
according to specified criteria.
   This bill would additionally require the Controller to allocate
funds appropriated in the annual Budget Act for this purpose
according to these criteria, in 4 equal installments, to be paid in
September, December, March, and June of each fiscal year.
   (11) Existing law creates in the State Treasury, the California
High-Cost Fund-A Administrative Committee Fund, the California
High-Cost Fund-B Administrative Committee Fund, the Universal
Lifeline Telephone Service Trust Administrative Committee Fund, the
Deaf and Disabled Telecommunications Program Administrative Committee
Fund, the Payphone Service Providers Committee Fund, and the
California Teleconnect Fund Administrative Committee Fund. Under
existing law, revenue in these funds is held in trust for the benefit
of ratepayers and to compensate telephone corporations for the costs
of providing universal service and may be expended solely for
specified purposes.
   This bill would authorize the Controller to use these funds for
loans to the General Fund, as specified.
   (12) Existing law creates in the State Treasury the Fish and Game
Preservation Fund, and makes the revenue in the fund available for
expenditure, upon appropriation by the Legislature, for particular
purposes. Existing law also creates in the General Fund the State
Energy Conservation Assistance Account and continuously appropriates
its revenue to the State Energy Resources Conservation and
Development Commission for expenditure.
   This bill would authorize the Controller to use this fund and
account for loans to the General Fund, as specified.
   (13) Existing law, the DNA Fingerprint, Unresolved Crime and
Innocence Act, an initiative measure, creates in the State Treasury
the state's DNA Identification Fund, and makes its revenue, upon
appropriation by the Legislature, available to the Attorney General
solely to support DNA testing and to offset the impacts of increased
testing. Existing law, the California Children and Families First Act
of 1998, an initiative measure, creates in the State Treasury the
Children and Families Trust Fund for the exclusive purpose of funding
the act's provisions. The Mental Health Services Act, an initiative
measure, creates in the State Treasury the Mental Health Services
Fund for the purpose of funding specified older adults, intervention,
and children's services programs. These acts provide for their
amendment by the Legislature if the amendments further the act and
are consistent with its purposes.
   This bill would authorize the Controller to use these funds for
loans to the General Fund, as specified, and would require that the
loans be repaid with interest at 110% of the Pooled Money Investment
Account rate. The bill would declare that its provisions further
these initiative acts and are consistent with their purposes.
   (14) Existing law requires the Department of Finance to certify
annually to the Controller the amount it determines to be the fair
share of costs for which each state agency that is supported by funds
other than the General Fund shall reimburse the General Fund for
administrative services rendered by other designated state entities
and agencies that are supported by the General Fund, and requires the
Controller to transfer the amount of these costs from those funds to
the General Fund.
   This bill would create the Central Service Cost Recovery Fund,
provide for the deposit into that fund of amounts equal to the fair
share of administrative costs due and payable from state agencies,
and direct that moneys in the Central Service Cost Recovery Fund be
appropriated for the administration of the state government, as
determined by the Director of Finance. This bill, except under
certain circumstances, would prohibit moneys in the Central Service
Cost Recovery Fund, that are not currently required to fund any
appropriation, from being used, loaned, borrowed, assessed,
allocated, or transferred unless approved by the Director of Finance.
This bill would also designate the state entities that provide
administrative services for which reimbursement is to be paid under
these provisions.
   (15) Existing law authorizes the Controller to make monthly
transfers from the General Fund to the State Audit Fund, a
continuously appropriated fund, for estimated audit costs that are
not directly billed to affected state agencies.
   This bill would authorize the Controller to also make transfers
for that purpose from the Central Service Cost Recovery Fund.
   (16) The Community Redevelopment Law authorizes the establishment
of redevelopment agencies in communities to address the effects of
blight, as defined, in blighted areas in those communities known as
project areas. Section 16 of Article XVI of the California
Constitution authorizes a redevelopment agency to receive funding
through tax increments attributable to increases in assessed property
tax valuation of property in a project area due to the
redevelopment. Not less than 20% of tax increments generated from a
project area are required to be used by a redevelopment agency to
increase and improve the community's supply of low- and
moderate-income housing. Redevelopment agencies also are required in
specified years to remit to the county auditor an amount of revenue,
determined in accordance with specified calculations made by the
Director of Finance and based on a specified report of the
Controller, for deposit in the Educational Revenue Augmentation Fund
in each county for allocation to school entities. For each
redevelopment project for which the redevelopment plan provides for
the division of taxes the redevelopment agency is required to file
with the county auditor or officer, as specified, a statement of
indebtedness.
   This bill would require redevelopment agencies, the county
auditor, the Controller, the State Department of Education, and the
Board of Governors of the California Community Colleges to submit
specified reports or make specified calculations by specified dates
regarding the revenue payments deposited by redevelopment agencies in
the Educational Revenue Augmentation Fund in each county for
allocation to school entities. By adding to the duties of county
auditors, this bill would impose a state-mandated local program.
Redevelopment agencies that have an outstanding payment obligation to
a local educational agency would be (A) prohibited from adding new
project areas or expanding existing project areas; (B) prohibited
from issuing new bonds, notes, interim certificates, debentures, or
other obligations, as specified; (C) prohibited from encumbering any
funds or expending any money derived from any source, with specified
exceptions; (D) subject to interest charges, as specified; and (E)
required to deposit a portion of the outstanding payment obligation,
plus any interest, in the Educational Revenue Augmentation Fund.
Funds deposited in the county Educational Revenue Augmentation Fund
as an outstanding payment would be prohibited from being distributed
to a community college district. A county would be authorized to
charge a redevelopment agency for any expenses incurred by the county
in performing these services. A redevelopment agency would be
authorized on its statement of indebtedness to credit the payment to
the local educational agency against any existing passthrough payment
indebtedness.
   (17) Existing property tax law requires the county auditor, for
each fiscal year, to allocate property tax revenue to local
jurisdictions in accordance with specified formulas and procedures,
and generally requires that each jurisdiction be allocated an amount
equal to the total of the amount of revenue allocated to that
jurisdiction in the prior fiscal year, subject to certain
modifications, and that jurisdiction's portion of the annual tax
increment, as defined. Existing property tax law also reduces the
amounts of ad valorem property tax revenue that would otherwise be
annually allocated to the county, cities, and special districts
pursuant to these general allocation requirements by requiring, for
purposes of determining property tax revenue allocations in each
county for the 1992-93 and 1993-94 fiscal years, that the amounts of
property tax revenue deemed allocated in the prior fiscal year to the
county, cities, and special districts be reduced in accordance with
certain formulas. It requires that the revenues not allocated to the
county, cities, and special districts as a result of these reductions
be transferred to the Educational Revenue Augmentation Fund (ERAF)
in that county for allocation to school districts, community college
districts, and the county office of education.
   Existing law also requires a redevelopment agency, during the
2005-06 fiscal year, to remit to the county auditor an amount of
revenue, determined in accordance with specified calculations made by
the Director of Finance and based on a specified report of the
Controller, for deposit in the ERAF in each county for allocation to
school entities.
   This bill would require a redevelopment agency to make a
remittance to county ERAFs for the 2008-09 fiscal year. A
redevelopment agency would be authorized to defer the payment of a
portion of this remittance if that agency finds that it is unable,
for either of certain reasons, to pay the full allocation, and if the
agency adopts a specified resolution. A legislative body would be
authorized to remit, in lieu of making that payment prior to May 10,
2009, a designated amount to the county auditor for deposit in the
county ERAF. For the 2008-09 fiscal year, no funds deposited in the
county ERAF would be distributed to a community college district. If
an agency does not remit the full designated amount or fails to
arrange for full payment, as specified, to the county ERAF, then the
agency would be prohibited from adding new project areas or expanding
existing project areas; from issuing new bonds, notes, interim
certificates, debentures, or other obligations, as specified; and
from encumbering any funds or expending any moneys derived from any
source except as specified. By imposing new duties upon local tax
officials in the annual allocation of these revenues, this bill would
impose a state-mandated local program.
   (18) The Child Care and Development Services Act establishes the
Child Care and Development Facilities Loan Guaranty Fund and the
Child Care and Development Facilities Direct Loan Fund in the State
Treasury. The act requires the Department of Housing and Community
Development to use moneys deposited into those funds to make loan
guarantees and subordinated loans to sole proprietorships,
partnerships, proprietary and nonprofit corporations, and local
public agencies for the purchase, development, construction,
expansion, or improvement of licensed child care and development
facilities, and for the purpose of administering the guarantees and
loans.
   This bill would abolish the Child Care and Development Facilities
Loan Guaranty Fund, the Child Care and Development Facilities Direct
Loan Fund, and the Child Care Loan Guaranty Fund Account in the Small
Business Expansion Fund. All moneys remaining in those funds and
that account would revert to the General Fund.
   This bill also would require the Department of Housing and
Community Development to deposit all subsequent loan repayments to
the Treasurer to the credit of the General Fund.
   (19) Existing law, the California Small Business Financial
Development Corporation Law, creates the Small Business Expansion
Fund, which is continuously appropriated, and that fund provides
moneys to be used to pay for defaulted loan guarantees and
administrative costs for small business financial development
corporations.
   This bill would authorize up to $139,000 to be transferred from
the General Fund to the Small Business Expansion Fund upon the order
of the Director of Finance if funds are needed to pay a loan
guarantee made from the Small Business Expansion Fund for the
purchase, development, construction, expansion, or improvement of
licensed child care and development facilities, as specified. Because
the Small Business Expansion Fund is a continuously appropriated
fund, this bill would make an appropriation.
   (20) The Bergeson-Peace Infrastructure and Economic Development
Bank Act requires the California Infrastructure and Economic
Development Bank to annually submit to the Governor and the Joint
Legislative Budget Committee a report of its activities. The report
is required to include, among other things, a listing of applications
accepted and a report of revenues and expenditures for the preceding
fiscal year.
   This bill would require the report to include information with
respect to applications for a specified program and additional
information with respect to revenues and expenditures for the
preceding fiscal year.
   (21) Existing law designates the Business, Transportation and
Housing Agency as the primary state agency responsible for
facilitating economic development in the state, and requires the
agency to work with other governmental and international public and
private entities in meeting this responsibility.
   This bill would repeal those provisions.
   (22) Existing law creates the State Public Works Board, and
authorizes the board to issue bonds and other forms of debt, pursuant
to the State Building Construction Act of 1955, to obtain funds to
pay the cost of public buildings. Existing law services the debt
issued by the board through revenues, rentals, and receipts from
those public buildings.
   This bill would authorize the board to issue debt to pay for the
development and implementation of the Financial Information System
for California, a single integrated financial management system that
encompasses the management of resources and dollars in the areas of
budgeting, accounting, procurement, cash management, financial
management, financial reporting, cost accounting, asset management,
project accounting, grant management, and human resources management.
This bill would provide that debt service is conditioned upon annual
appropriation by the Legislature. This bill would make an
appropriation by creating continuously appropriated funds and
subaccounts to pay for the system's development, implementation,
operation, and maintenance.
   (23) Existing law establishes a workers' compensation system,
administered by the Administrative Director of the Division of
Workers' Compensation, to compensate an injured employee for injuries
sustained in the course of his or her employment.
   Existing law requires that the Director of Industrial Relations
levy and collect assessments from employers in an amount determined
by the director to be sufficient to fund specified workers'
compensation programs implemented in the state.
   This bill would require that specified revenues received from
additional surcharges levied upon employers in the state be deposited
into the Occupational Safety and Health Fund, created by this bill,
as a special account in the State Treasury, and would authorize the
expenditure of moneys in the fund by the department, upon
appropriation by the Legislature, for purposes of funding the
activities of those departments related to the implementation and
enforcement of occupational health and safety laws in the state.
   (24) Existing law requires the administrative director, until
January 1, 2009, to establish the Return-to-Work Program to promote
the early and sustained return to work of the employee following a
work-related injury or illness.
   This bill would extend to January 1, 2010, the repeal date of
those provisions.
   (25) Existing law requires the department to enter into an
agreement with the Franchise Tax Board that authorizes the collection
by the board of delinquent assessments and penalties that are levied
against employers for violation of specified labor laws.
   This bill would also authorize the collection by the board of
delinquent assessments and penalties that are levied against
employers for violation of specified occupational safety and health
laws.
   (26) Under existing law, unpaid fines and other penalties for
criminal offenses imposed by a court upon a person or entity in an
amount less than $100 may be referred to the Franchise Tax Board for
collection after being delinquent for 90 days.
   This bill would include bail in those unpaid debts that may be
referred to the Franchise Tax Board for collection after being
delinquent for 90 days.
   (27) The existing Corporation Tax Law requires taxpayers whose tax
liability exceeds specified amounts to remit payment to the
Franchise Tax Board by electronic funds transfers if any of 3
specified conditions exists.
   This bill would require personal income taxpayers with estimated
tax or extension payments in excess of $20,000, or total tax
liability in excess of $80,000, to remit payments to the Franchise
Tax Board by electronic funds transfers, subject to specified
requirements.
   (28) Existing income tax laws authorize the Franchise Tax Board to
provide for the filing of a group return for electing nonresident
partners and electing nonresident directors of a corporation, and to
adjust the income of those taxpayers to properly reflect income, as
provided. Existing law provides that the tax rate or rates applicable
to each partner's distributive share or each director's compensation
for services is the highest marginal rate or rates provided by the
Personal Income Tax Law.
                                                               The
Personal Income Tax Law also imposes an additional tax at the rate of
1% on that portion of a taxpayer's taxable income in excess of
$1,000,000.
   This bill would also impose this additional tax of 1% on taxable
income in excess of $1,000,000 of any electing nonresident partner of
nonresident director of a corporation included on the group return.
   (29) The Alcoholic Beverage Control Act provides for the issuance
of licenses for which various annual fees are charged depending upon
the type of license issued. That law authorizes an annual adjustment
of the fees in an amount not to exceed an inflation factor based on
the Consumer Price Index.
   This bill would increase these annual fees by 11.78% beginning
January 1, 2009, in lieu of any annual fee adjustments that could
have been imposed for the previous 4 years. This bill would also
permit the Department of Alcoholic Beverage Control to annually
adjust the fees charged commencing with the 2010 calendar year by an
amount not to exceed an inflation factor based on the Consumer Price
Index.
   (30) Existing law appropriates $5,000,000 to the Governor's Office
on Service and Volunteerism, on an annual basis, for the purpose of
funding grants to local and state operated Americorps and
Conservation Corps programs.
   This bill would instead specify that this appropriation is to
CaliforniaVolunteers, suspend the appropriation from July 1, 2008, to
June 30, 2010, inclusive, and provide for an appropriation of
$2,500,000 to June 30, 2010, inclusive.
   (31) Until January 1, 2012, or earlier, as specified, the Rural
Health Care Equity Program, as administered by the Department of
Personnel Administration, provides subsidies and reimbursements for
certain health care premiums and health care costs incurred by state
employees and annuitants in rural areas in which there is no
board-approved health maintenance organization plan available for
enrollment.
   This bill would eliminate annuitants from those who are eligible
to receive those benefits through the Rural Health Care Equity
Program.
   (32) Existing law requires the Department of Personnel
Administration to administer and enforce laws pertaining to state
personnel.
   This bill would authorize the Department of Personnel
Administration to assess special funds, bond funds, and
nongovernmental cost funds in sufficient amounts to support the cost
of the Human Resources Modernization Project, as specified.
   (33) Existing law authorizes state officers and employees to
travel out of state on state business and provides for payment of
expenses for this travel upon approval of the Governor and the
Director of Finance, subject to certain exceptions, as specified.
   This bill would delete the requirement for approval of the
Director of Finance in connection with travel and travel expenses
under these provisions. The bill also would make technical,
nonsubstantive changes to these provisions.
   (34) Existing law provides for the creation, maintenance, and
authority of the Sixth District Agricultural Association, which is
known as the California Science Center and which is a tax-exempt
organization and instrumentality of the state. The center is
authorized to enter into a site lease and lease-purchase agreement
with the California Science Center Foundation, a nonprofit
corporation, for the purpose of constructing and funding the Phase II
Project of the center, as specified.
   This bill would declare the Legislature's finding that the
operation of the center may require individual skills not generally
available in state civil service to support specialized functions,
and would authorize the center to enter into a personal services
contract or contracts with the California Science Center Foundation
without a competitive bidding process, as specified.
   (35) Under existing law, the Department of Veterans Affairs
provides benefits to California veterans and their families, and is
responsible for, among other things, veterans' welfare and homes.
   This bill would require the Department of Veterans Affairs, on or
before January 10, 2009, and each January 10 thereafter, to provide a
fiscal estimate package to the fiscal committees of the Legislature
that contains specified information regarding the costs of
administering state veterans homes. This bill would also require the
department to provide an updated fiscal estimate package on or before
May 15 of each year.
   (36) Existing law requires the Insurance Commissioner to transmit
specified information to the Governor, the Legislature, and to the
committees of the Senate and Assembly having jurisdiction over
insurance in the annual report submitted to those entities, as
specified.
   This bill would itemize facts relating to the operations of the
Conservation and Liquidation Office, and other facts relating to the
operations of individual estates, that must be included in the annual
report.
   (37) The State Building Construction Act of 1955 requires the
Department of General Services, in consultation with other state
entities, to develop a multiyear plan to exploit cost-effective
energy efficiency measures in state facilities. The act requires the
department to update the plan biennially, coordinate implementation
efforts, and make recommendations to the Governor and the Legislature
to achieve energy goals for state facilities.
   This bill would require the department to make these
recommendations no later than March 1, 2009, and biennially
thereafter. The bill would additionally require the department to
report on projects under its jurisdiction, as specified.
   (38) The State Housing Law requires the Department of Housing and
Community Development to propose, among other things, the adoption of
building standards generally to the California Building Standards
Commission for adoption in the California Building Code.
   This bill would require the department to review relevant green
building guidelines when preparing proposed building standards for
submittal to the commission, and consider proposing as mandatory
building standards those green building features determined by the
department to be cost effective and feasible to promote greener
construction. It would also require the department to summarize
specified information in this regard in an annual report to the
Legislature.
   (39) Existing law generally sets forth the requirements pursuant
to which the Commission on State Mandates hears and decides upon
claims by local agencies or school districts for reimbursement of
costs mandated by the state, determines the amount of state funds to
be subvened for reimbursement, issues statewide cost estimates, and
adopts parameters and guidelines for payment of claims by the
Controller. The commission may not find costs mandated by the state
if it finds that the statute or executive order in question imposes
duties that are necessary to implement, reasonably within the scope
of, or expressly included in, a ballot measure approved by the voters
in a statewide or local election, regardless of whether the statute
or executive order was enacted or adopted before or after the date
upon which the ballot measure was approved by the voters.
   This bill would require the commission, upon final resolution of
any pending litigation challenging the constitutionality of the
prohibition described above, to reconsider a specified test claim
statement of decision and, if necessary, take specified actions in
this regard. The bill would also require the Controller to make
conforming revisions to the claiming instructions.
   (40) The bill would state the intent of the Legislature that
specified budget augmentations for transfer to the Teachers'
Retirement Fund be appropriated in the Budget Act of 2009.
   (41) The bill would state the intent of the Legislature that
certain of the bill's provisions constitute a comprehensive package
of modifications to appropriations for, and benefits of, the State
Teachers' Retirement System, that this package provides members of
the system with comparable new advantages, as specified, and that
these provisions not be interpreted as separable.
   (42) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason, but that if the commission determines
that the bill contains costs mandated by the state, reimbursement for
those costs shall be made pursuant to these statutory provisions.
   (43) This bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 23320 of the Business and Professions Code is
amended to read:
   23320.  (a) The following are the types of licenses and the annual
fees to be charged therefor:
+-------------------+----------+----------+----------+
|                   |    Fee   |    Fee   |    Fee   |
|Name & License     | Effective| Effective| Effective|
|Type Number:       | 01/01/02 | 01/01/03 | 01/01/04 |
+-------------------+----------+----------+----------+
|(1) Beer           |          |          |          |
|manufacturer:      |          |          |          |
|(a) Beer           |          |          |          |
|manufacturers      |          |          |          |
|that produce 60,000|   $127.00|   $134.00|   $140.00|
|barrels or less a  |          |          |          |
|year               |          |          |          |
|(Type 23)..........| $1,043.00| $1,098.00| $1,153.00|
|(b) All other beer |          |          |          |
|manufacturers      |          |          |          |
|(Type 1)...........|          |          |          |
|(c) Branch Office  |    $69.00|    $71.00|    $73.00|
|--Small Beer       |          |          |          |
|Manufacturers      |    $69.00|    $71.00|    $73.00|
|(Type 23D).........|          |          |          |
|--Beer             |          |          |          |
|Manufacturers      |          |          |          |
|(Type 1D)..........|          |          |          |
+-------------------+----------+----------+----------+
|(2) Winegrower or  |          |          |          |
|wine               |          |          |          |
|blender (to be     |          |          |          |
|computed only on   |          |          |          |
|the                |          |          |          |
|gallonage produced |          |          |          |
|or blended) (Type  |          |          |          |
|2 &                |          |          |          |
|Type 22)           |          |          |          |
|--5,000 gallons or |          |          |          |
|less...............|          |          |          |
|--Over 5,000       |          |          |          |
|gallons            |          |          |          |
|to 20,000 gallons  |    $34.00|    $44.00|    $54.00|
|per                |          |          |          |
|year...............|          |          |          |
|--Over 20,000 to   |    $65.00|    $80.00|    $99.00|
|100,000            |          |          |          |
|gallons per year...|   $130.00|   $155.00|   $180.00|
|--Over 100,000 to  |          |          |          |
|200,000 gallons per|          |          |          |
|year...............|   $180.00|   $205.00|   $237.00|
|--Over 200,000     |          |          |          |
|gallons            |          |          |          |
|to 1,000,000       |   $250.00|   $300.00|   $351.00|
|gallons            |          |          |          |
|per year...........|          |          |          |
|--For each         |          |          |          |
|1,000,000          |   $170.00|   $200.00|   $229.00|
|gallons or fraction|          |          |          |
|thereof over       |    $69.00|    $71.00|    $73.00|
|1,000,000          |          |          |          |
|gallons an         |          |          |          |
|additional         |          |          |          |
|Winegrower (Branch |          |          |          |
|Office) - (Type    |          |          |          |
|2D)................|          |          |          |
+-------------------+----------+----------+----------+
|(3) Brandy         |          |          |          |
|manufacturer       |   $212.00|   $223.00|   $234.00|
|(Type 3)...........|          |          |          |
|Brandy manufacturer|          |          |          |
|(Branch Office)    |   $204.00|   $210.00|   $215.00|
|(Type 3D)..........|          |          |          |
+-------------------+----------+----------+----------+
|(4) Distilled      |          |          |          |
|spirits            |          |          |          |
|manufacturer (Type |   $348.00|   $366.00|   $384.00|
|4).................|          |          |          |
+-------------------+----------+----------+----------+
|(5) Distilled      |          |          |          |
|spirits            |          |          |          |
|manufacturer's     |          |          |          |
|agent              |   $348.00|   $366.00|   $384.00|
|(Type 5)...........|          |          |          |
+-------------------+----------+----------+----------+
|(5a) California    |          |          |          |
|winegrower's       |   $348.00|   $366.00|   $384.00|
|agent (Type 27)....|          |          |          |
+-------------------+----------+----------+----------+
|(6) Still (Type 6).|    $33.00|    $46.00|    $58.00|
+-------------------+----------+----------+----------+
|(7) Rectifier      |   $348.00|   $366.00|   $384.00|
|(Type 7)...........|          |          |          |
+-------------------+----------+----------+----------+
|(7a) Distilled     |          |          |          |
|spirits            |          |          |          |
|rectifier's        |          |          |          |
|general license    |   $348.00|   $366.00|   $384.00|
|(Type 24)..........|          |          |          |
+-------------------+----------+----------+----------+
|(8) Wine rectifier |          |          |          |
|(Type 8)...........|   $348.00|   $366.00|   $384.00|
+-------------------+----------+----------+----------+
|(9) Beer & wine    |          |          |          |
|importer           |    $25.00|    $42.00|    $58.00|
|(Type 9)...........|          |          |          |
+-------------------+----------+----------+----------+
|(10) Beer & wine   |          |          |          |
|importer's         |          |          |          |
|general license    |   $147.00|   $202.00|   $256.00|
|(Type 10)          |          |          |          |
+-------------------+----------+----------+----------+
|(11) Brandy        |          |          |          |
|importer           |    $25.00|    $42.00|    $58.00|
|(Type 11)..........|          |          |          |
+-------------------+----------+----------+----------+
|(12) Distilled     |          |          |          |
|spirits            |    $25.00|    $42.00|    $58.00|
|importer (Type 12).|          |          |          |
+-------------------+----------+----------+----------+
|(13) Distilled     |          |          |          |
|spirits            |          |          |          |
|importer's general |          |          |          |
|license            |   $348.00|   $366.00|   $384.00|
|(Type 13)..........|          |          |          |
+-------------------+----------+----------+----------+
|(14) Public        |          |          |          |
|warehouse          |    $33.00|    $46.00|    $58.00|
|(Type 14)..........|          |          |          |
+-------------------+----------+----------+----------+
|(15) Customs broker|          |          |          |
|(Type 15)..........|    $33.00|    $46.00|    $58.00|
+-------------------+----------+----------+----------+
|(16) Wine broker   |    $7l.00|    $75.00|    $78.00|
|(Type 16)..........|          |          |          |
+-------------------+----------+----------+----------+
|(17) Beer & wine   |          |          |          |
|wholesaler         |   $147.00|   $202.00|   $256.00|
|(Type 17)..........|          |          |          |
+-------------------+----------+----------+----------+
|(18) Distilled     |          |          |          |
|spirits            |          |          |          |
|wholesaler (Type   |   $348.00|   $366.00|   $384.00|
|18)................|          |          |          |
+-------------------+----------+----------+----------+
|(18a) California   |          |          |          |
|brandy             |          |          |          |
|wholesaler (Type   |   $348.00|   $366.00|   $384.00|
|25)................|          |          |          |
+-------------------+----------+----------+----------+
|(19) Industrial    |          |          |          |
|alcohol            |    $71.00|    $75.00|    $78.00|
|dealer (Type 19)...|          |          |          |
+-------------------+----------+----------+----------+
|(20) Retail        |          |          |          |
|package off-sale   |          |          |          |
|beer & wine (Type  |   $105.00|   $157.00|   $209.00|
|20)................|          |          |          |
+-------------------+----------+----------+----------+
|(21) Retail        |          |          |          |
|package off-sale   |          |          |          |
|general license    |          |          |          |
|(Type 21)          |          |          |          |
|and controlled     |          |          |          |
|access             |   $431.00|   $448.00|   $464.00|
|cabinet permit     |          |          |          |
|(Type 66)..........|          |          |          |
+-------------------+----------+----------+----------+
|(22) On-sale beer  |          |          |          |
|(Type              |          |          |          |
|40 & Type 61); On- |          |          |          |
|sale               |          |          |          |
|beer & wine (Type  |          |          |          |
|42);               |          |          |          |
|Special on-sale    |          |          |          |
|beer &             |          |          |          |
|wine (Theater)     |          |          |          |
|(Type 69);         |          |          |          |
|and Special on-sale|   $204.00|   $210.00|   $215.00|
|beer & wine        |          |          |          |
|(Symphony)         |          |          |          |
|(Type 65)..........|          |          |          |
+-------------------+----------+----------+----------+
|(23) On-sale beer  |          |          |          |
|& wine             |          |          |          |
|eating place (Type |   $236.00|   $263.00|   $290.00|
|41)................|          |          |          |
+-------------------+----------+----------+----------+
|(24) On-sale beer  |          |          |          |
|& wine             |          |          |          |
|license for trains |          |          |          |
|(per               |    $48.00|    $68.00|    $87.00|
|train) (Type 43)...|          |          |          |
+-------------------+----------+----------+----------+
|(25) On-sale beer  |          |          |          |
|license for        |          |          |          |
|fishing party      |          |          |          |
|boats (per         |    $59.00|    $73.00|    $87.00|
|boat) (Type 44)....|          |          |          |
+-------------------+----------+----------+----------+
|(26) On-sale beer  |          |          |          |
|& wine             |          |          |          |
|license for boats  |          |          |          |
|(per               |    $75.00|    $81.00|    $87.00|
|boat) (Type 45)....|          |          |          |
+-------------------+----------+----------+----------+
|(27) On-sale beer  |          |          |          |
|& wine             |          |          |          |
|license for        |          |          |          |
|airplanes (per     |          |          |          |
|scheduled flight)  |    $48.00|    $68.00|    $87.00|
|(Type 46)..........|          |          |          |
+-------------------+----------+----------+----------+
|(28) On-sale       |          |          |          |
|general license    |          |          |          |
|(Types 47, 48, 57, |          |          |          |
|70, 75,            |          |          |          |
|78, 78D (for 78D   |          |          |          |
|see                |          |          |          |
|Section 23396.2))  |          |          |          |
|and                |          |          |          |
|club caterer's     |          |          |          |
|permit             |          |          |          |
|(Type 58):         |          |          |          |
|--In cities of     |          |          |          |
|40,000             |          |          |          |
|population or      |          |          |          |
|over...............|   $698.00|   $715.00|   $731.00|
|--In cities of     |          |          |          |
|less than          |          |          |          |
|40,000 but more    |          |          |          |
|than 20,000        |   $503.00|   $520.00|   $536.00|
|population.........|          |          |          |
|--In all other     |   $443.00|   $460.00|   $476.00|
|localities.........|          |          |          |
|Duplicate on-sale  |          |          |          |
|general            |          |          |          |
|license (Types     |          |          |          |
|47D, 48D,          |          |          |          |
|57D) and portable  |   $499.00|   $513.00|   $526.00|
|bar                |          |          |          |
|license (Type 68): |          |          |          |
|--In cities of     |   $295.00|   $303.00|   $311.00|
|40,000             |          |          |          |
|population or over.|   $233.00|   $239.00|   $245.00|
|--In cities of     |          |          |          |
|less than          |          |          |          |
|40,000 but more    |          |          |          |
|than               |          |          |          |
|20,000 population..|          |          |          |
|--In all other     |          |          |          |
|localities.........|          |          |          |
+-------------------+----------+----------+----------+
|(29) On-sale       |          |          |          |
|general license    |          |          |          |
|for seasonal       |          |          |          |
|business           |          |          |          |
|(Type 49):         |          |          |          |
|--In cities of     |          |          |          |
|40,000             |          |          |          |
|population or over |          |          |          |
|(per               |          |          |          |
|quarter)...........|          |          |          |
|--In cities of     |          |          |          |
|less than          |          |          |          |
|40,000 but more    |          |          |          |
|than               |   $176.00|   $181.00|   $186.00|
|20,000 population  |          |          |          |
|(per               |          |          |          |
|quarter)...........|          |          |          |
|--In all other     |   $126.00|   $129.00|   $132.00|
|localities         |          |          |          |
|(per quarter)......|   $109.00|   $112.00|   $115.00|
|Duplicate on-sale  |          |          |          |
|general            |          |          |          |
|license for        |          |          |          |
|seasonal           |          |          |          |
|business (Type     |          |          |          |
|49D):              |   $126.00|   $129.00|   $132.00|
|--In cities of     |          |          |          |
|40,000             |          |          |          |
|population or over |          |          |          |
|(per               |    $74.00|    $76.00|    $78.00|
|quarter)...........|          |          |          |
|--In cities of     |    $59.00|    $61.00|    $62.00|
|less       than    |          |          |          |
|40,000 but more    |          |          |          |
|than               |          |          |          |
|20,000 population  |          |          |          |
|(per               |          |          |          |
|quarter)...........|          |          |          |
|--In all other     |          |          |          |
|localities         |          |          |          |
|(per quarter)......|          |          |          |
+-------------------+----------+----------+----------+
|(30) (a) On-sale   |          |          |          |
|general            |          |          |          |
|license for bona   |          |          |          |
|fide               |          |          |          |
|clubs, (b) Club    |          |          |          |
|license            |          |          |          |
|(issued under      |          |          |          |
|Article 4 of       |          |          |          |
|this chapter), or  |          |          |          |
|(c) Veterans' club |          |          |          |
|license            |          |          |          |
|(issued under      |          |          |          |
|Article 5          |          |          |          |
|(commencing with   |          |          |          |
|Section 23450) of  |          |          |          |
|this               |          |          |          |
|chapter) (Types    |          |          |          |
|50, 51,            |   $400.00|   $411.00|   $422.00|
|52, & 64):         |          |          |          |
|--In cities of     |          |          |          |
|40,000             |   $301.00|   $309.00|   $317.00|
|population or over.|          |          |          |
|--In cities of     |   $267.00|   $274.00|   $281.00|
|less than          |          |          |          |
|40,000 but more    |          |          |          |
|than               |          |          |          |
|20,000 population..|          |          |          |
|--In all other     |          |          |          |
|localities.........|          |          |          |
+-------------------+----------+----------+----------+
|(31) On-sale       |          |          |          |
|general license    |          |          |          |
|for trains and     |          |          |          |
|sleeping           |   $156.00|   $160.00|   $164.00|
|cars (Type 53).....|          |          |          |
|--Duplicate on-sale|          |          |          |
|general license for|          |          |          |
|trains and         |          |          |          |
|sleeping car       |    $46.00|    $52.00|    $58.00|
|companies          |          |          |          |
|(Type 53D).........|          |          |          |
+-------------------+----------+----------+----------+
|(32) On-sale       |          |          |          |
|general license    |          |          |          |
|for boats (Type    |   $402.00|   $413.00|   $424.00|
|54)................|          |          |          |
+-------------------+----------+----------+----------+
|(33) On-sale       |          |          |          |
|general license    |          |          |          |
|for airplanes      |   $402.00|   $413.00|   $424.00|
|(Type 55)..........|          |          |          |
|--Duplicate on-sale|          |          |          |
|general license    |          |          |          |
|for air            |    $32.00|    $45.00|    $58.00|
|common carriers    |          |          |          |
|(Type 55D).........|          |          |          |
+-------------------+----------+----------+----------+
|(34) On-sale       |          |          |          |
|general license    |          |          |          |
|for vessels of     |          |          |          |
|more than          |          |          |          |
|1,000 tons burden  |          |          |          |
|(Type              |          |          |          |
|56) and for        |   $156.00|   $160.00|   $164.00|
|Maritime           |          |          |          |
|Museum (Type 76)...|          |          |          |
|--Duplicate on-sale|          |          |          |
|general license for|          |          |          |
|vessels of more    |          |          |          |
|than               |          |          |          |
|1,000 tons burden  |    $46.00|    $52.00|    $58.00|
|(Type 56D) and for |          |          |          |
|Maritime Museum    |          |          |          |
|(Type 76D).........|          |          |          |
+-------------------+----------+----------+----------+
|(35) On-sale       |          |          |          |
|general bona       |          |          |          |
|fide public eating |          |          |          |
|place              |          |          |          |
|intermittent       |          |          |          |
|dockside           |          |          |          |
|license for        |          |          |          |
|vessels of         |          |          |          |
|more than 7,000    |   $435.00|   $447.00|   $459.00|
|tons               |          |          |          |
|displacement (Type |          |          |          |
|62)................|          |          |          |
+-------------------+----------+----------+----------+
|(36) On-sale       |          |          |          |
|special beer &     |          |          |          |
|wine license for   |          |          |          |
|hospitals,         |          |          |          |
|convalescent       |          |          |          |
|homes, and         |    $68.00|    $70.00|    $72.00|
|rest homes (Type   |          |          |          |
|63)................|          |          |          |
+-------------------+----------+----------+----------+
|(37) On-sale beer  |          |          |          |
|& wine             |          |          |          |
|seasonal (Type 59) |          |          |          |
|and                |          |          |          |
|on-sale beer       |          |          |          |
|seasonal           |          |          |          |
|(Type 60)          |   $161.00|   $171.00|   $180.00|
|--Operating period |          |          |          |
|3-9 months.........|   $108.00|   $115.00|   $122.00|
|--Operating period |          |          |          |
|3-6 months.........|          |          |          |
+-------------------+----------+----------+----------+


   (b) Beginning January 1, 2009, each fee specified in subdivision
(a) shall be increased by 11.78 percent, in lieu of any annual fee
adjustment that could have been imposed for the previous four years.
The increase to each fee shall be rounded to the nearest whole
dollar.
   (c) Beginning January 1, 2010, and each January 1 thereafter, the
department may adjust each of the fees specified in this section by
increasing each fee by an amount not to exceed the percentage that
the Consumer Price Index (United States Bureau of Labor Statistics,
West Region, All Urban Consumers, All Items, Base Period 1982-84 =
100) for the preceding April 2008, and each April annually
thereafter, has increased under the same index over the month of
April 2007, which shall be the base period. No fee shall be decreased
pursuant to this adjustment below the fee currently in effect on
each December 31. In the event that this index is discontinued, the
department shall consult with the Department of Finance to convert
the increase calculations to an index then available. When approved
by the Department of Finance, the new index shall replace the
discontinued index.
   (d) The department shall calculate the percentage increase as
specified in subdivision (c) and shall apply this increase to each
fee. The increase to each fee shall be rounded to the nearest whole
dollar. The adjusted fee list shall be published by the department
and transmitted to the Legislature for approval as part of the
department's budget submission for the fiscal year in which the
adjusted fees would be implemented. This adjustment of fees and
publication of the adjusted fee list is not subject to the
requirements of Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code.
  SEC. 2.  Section 8277.65 is added to the Education Code,
immediately following Section 8277.6, to read:
   8277.65.  The Child Care and Development Facilities Loan Guaranty
Fund, the Child Care and Development Facilities Direct Loan Fund, and
the Child Care Loan Guaranty Fund Account in the Small Business
Expansion Fund are abolished. All moneys remaining in the Child Care
and Development Facilities Loan Guaranty Fund, the Child Care and
Development Facilities Direct Loan Fund, and the Child Care Loan
Guaranty Fund Account in the Small Business Expansion Fund shall
revert to the General Fund. The Department of Housing and Community
Development shall deposit all subsequent loan repayments to the
Treasurer to the credit of the General Fund. The abolishment of the
Child Care and Development Facilities Loan Guaranty Fund, the Child
Care and Development Facilities Direct Loan Fund, and the Child Care
Loan Guaranty Fund Account in the Small Business Expansion Fund does
not terminate any of the following rights, obligations, or
authorities, or any provision necessary to carry out those rights,
obligations, or authorities:
   (a) The repayment of loans due and payable to the department or
the relevant financial company.
   (b) The obligation of the state to pay claims arising from the
default of outstanding loans that have been guaranteed.
   (c) Payment to lenders for default of any outstanding guaranteed
loans secured by those moneys.
   (d) The resolution of any cost recovery action.
  SEC. 3.  Section 8277.66 is added to the Education Code,
immediately following Section 8277.65, to read:
   8277.66.  Notwithstanding any other provision of law, up to one
hundred thirty-nine thousand dollars ($139,000) may be transferred
from the General Fund to the Small Business Expansion Fund upon the
order of the Director of Finance if funds are needed to pay a loan
guarantee made from the Small Business Expansion Fund pursuant to
Sections 8277.5 and 8277.6. This authority shall expire on the date
upon which all loan guarantees outstanding as of July 1, 2008, are
retired, or January 1, 2020, whichever occurs first.
  SEC. 4.  Section 22664 of the Education Code is amended to read:
   22664.  The nonmember spouse who is awarded a separate account
shall have the right to a service retirement allowance and, if
applicable, a retirement benefit under this part.
   (a) The nonmember spouse shall be eligible to retire for service
under this part if the following conditions are satisfied:
   (1) The member had at least five years of credited service during
the period of marriage, at least one year of which had been performed
subsequent to the most recent refund to the member of accumulated
retirement contributions. The credited service may include service
credited to the account of the member as of the date of the
dissolution or legal separation, previously refunded service,
out-of-state service, and permissive service credit that the member
is eligible to purchase at the time of the dissolution or legal
separation.
                                              (2) The nonmember
spouse has at least 21/2 years of credited service in his or her
separate account.
   (3) The nonmember spouse has attained 55 years of age or more.
   (b) A service retirement allowance of a nonmember spouse under
this part shall become effective upon a date designated by the
nonmember spouse, provided:
   (1) The requirements of subdivision (a) are satisfied.
   (2) The nonmember spouse has filed an application for service
retirement on a properly executed form provided by the system, that
is executed no earlier than six months before the effective date of
the retirement allowance.
   (3) The effective date is no earlier than the first day of the
month that the application is received at the system's headquarters
office as described in Section 22375, and the effective date is after
the date the judgment or court order pursuant to Section 22652 was
entered.
   (c) (1) Upon service retirement at normal retirement age under
this part, the nonmember spouse shall receive a retirement allowance
that shall consist of an annual allowance payable in monthly
installments equal to 2 percent of final compensation for each year
of credited service.
   (2) If the nonmember spouse's retirement is effective at less than
normal retirement age and between early retirement age under this
part and normal retirement age, the retirement allowance shall be
reduced by one-half of 1 percent for each full month, or fraction of
a month, that will elapse until the nonmember spouse would have
reached normal retirement age.
   (3) If the nonmember spouse's service retirement is effective at
an age greater than normal retirement age and is effective on or
after January 1, 1999, the percentage of final compensation for each
year of credited service shall be determined pursuant to the
following table:
Age at Retirement         Percentage
60  1/4 ................. 2.033
60  1/2 ................. 2.067
60  3/4 ................. 2.10
61 ...................... 2.133
61  1/4 ................. 2.167
61  1/2 ................. 2.20
61  3/4 ................. 2.233
62  ..................... 2.267
62  1/4 ................. 2.30
62  1/2 ................. 2.333
62  3/4 ................. 2.367
63  and over ............ 2.40


   (4) In computing the retirement allowance of the nonmember spouse,
the age of the nonmember spouse on the last day of the month that
the retirement allowance begins to accrue shall be used.
   (5) Final compensation, for purposes of calculating the service
retirement allowance of the nonmember spouse under this subdivision,
shall be calculated according to the definition of final compensation
in Section 22134, 22134.5, 22135, or 22136, whichever is applicable,
and shall be based on the member's compensation earnable up to the
date the parties separated, as established in the judgment or court
order pursuant to Section 22652. The nonmember spouse shall not be
entitled to use any other calculation of final compensation.
   (d) Upon service retirement under this part, the nonmember spouse
shall receive a retirement benefit based on an amount equal to the
balance of credits in the nonmember spouse's Defined Benefit
Supplement account on the date the retirement benefit becomes
payable.
   (1) A retirement benefit shall be a lump-sum payment, or an
annuity payable in monthly installments, or a combination of both a
lump-sum payment and an annuity, as elected by the nonmember spouse
on the application for a retirement benefit. A retirement benefit
paid as an annuity under this chapter shall be subject to Sections
22660, 25011, and 25011.1.
   (2) Upon distribution of the entire retirement benefit in a
lump-sum payment, no other benefit shall be payable to the nonmember
spouse or the nonmember spouse's beneficiary under the Defined
Benefit Supplement Program.
   (e) If the member is or was receiving a disability allowance under
this part with an effective date before or on the date the parties
separated as established in the judgment or court order pursuant to
Section 22652, or at any time applies for and receives a disability
allowance with an effective date that is before or coincides with the
date the parties separated as established in the judgment or court
order pursuant to Section 22652, the nonmember spouse shall not be
eligible to retire until after the disability allowance of the member
terminates. If the member who is or was receiving a disability
allowance returns to employment to perform creditable service subject
to coverage under the Defined Benefit Program or has his or her
allowance terminated under Section 24015, the nonmember spouse may
not be paid a retirement allowance until at least six months after
termination of the disability allowance and the return of the member
to employment to perform creditable service subject to coverage under
the Defined Benefit Program, or the termination of the disability
allowance and the employment or self-employment of the member in any
capacity, notwithstanding Section 22132. If at the end of the
six-month period, the member has not had a recurrence of the original
disability or has not had his or her earnings fall below the amounts
described in Section 24015, the nonmember spouse may be paid a
retirement allowance if all other eligibility requirements are met.
   (1) The retirement allowance of the nonmember spouse under this
subdivision shall be calculated as follows: the disability allowance
the member was receiving, exclusive of the portion for dependent
children, shall be divided between the share of the member and the
share of the nonmember spouse. The share of the nonmember spouse
shall be the amount obtained by multiplying the disability allowance,
exclusive of the portion for dependent children, by the years of
service credited to the separate account of the nonmember spouse,
including service projected to the date of separation, and dividing
by the projected service of the member. The nonmember spouse's
retirement allowance shall be the lesser of the share of the
nonmember spouse under this subdivision or the retirement allowance
under subdivision (c).
   (2) The share of the member shall be the total disability
allowance reduced by the share of the nonmember spouse. The share of
the member shall be considered the disability allowance of the member
for purposes of Section 24213.
   (f) The nonmember spouse who receives a retirement allowance is
not a retired member under this part. However, the allowance of the
nonmember spouse shall be increased by application of the improvement
factor and shall be eligible for the application of supplemental
increases and other benefit maintenance provisions under this part,
including, but not limited to, Sections 24412 and 24415 based on the
same criteria used for the application of these benefit maintenance
increases to the service retirement allowances of members.
  SEC. 5.  Section 22954 of the Education Code is amended to read:
   22954.  (a) Notwithstanding Section 13340 of the Government Code,
a continuous appropriation is hereby annually made from the General
Fund to the Controller, pursuant to this section, for transfer to the
Supplemental Benefit Maintenance Account in the Teachers' Retirement
Fund.
   (b) Except as reduced pursuant to subdivision (c), the total
amount of the appropriation for each year shall be equal to 2.5
percent of the total of the creditable compensation of the fiscal
year ending in the immediately preceding calendar year upon which
members' contributions are based for purposes of funding the
supplemental payments authorized by Section 24415, as reported
annually to the Director of Finance, the Chairperson of the Joint
Legislative Budget Committee, and the Legislative Analyst pursuant to
Section 22955.5.
   (c) Beginning with the 2008-09 fiscal year, the appropriation in
subdivision (b) shall be reduced in accordance with the following
schedule:
2008-09.................$66,386,000
2009-10.................$70,000,000
2010-11.................$71,000,000
2011-12 and each fiscal year
thereafter..............$72,000,000


   (d) Transfers made to the Supplemental Benefit Maintenance
Account, pursuant to subdivision (a) shall be made on November 1 and
April 1 of each fiscal year.
   (e) The board may deduct from the annual appropriation made
pursuant to this section an amount necessary for the administrative
expenses of Section 24415.
   (f) It is the intent of the Legislature in enacting this section
to establish the supplemental payments pursuant to Section 24415 as
vested benefits pursuant to a contractually enforceable promise to
make annual contributions from the General Fund to the Supplemental
Benefit Maintenance Account in the Teachers' Retirement Fund in order
to provide a continuous annual source of revenue for the purposes of
making the supplemental payments under Section 24415.
  SEC. 6.  Section 22954.1 of the Education Code is amended to read:
   22954.1.  (a) Consistent with a process it establishes pursuant to
subdivision (e), the board shall periodically adopt an actuarial
projection regarding the ability of the system to continue providing,
over a term to be established by the board, the purchasing power
protection that is, at the time of the projection, being provided
from the funds of the Supplemental Benefit Maintenance Account.
   (b) If the board, in adopting the actuarial projection described
in subdivision (a), determines that the annual transfers to the
Supplemental Benefit Maintenance Account described in Section 22954,
combined with all other anticipated sources of income to the account,
are likely to be more than sufficient over the term established by
the board to continue providing the purchasing power protection being
provided at the time of the projection, it shall identify the
maximum level of purchasing power protection benefits that it expects
to be sustainable over that term from these contributions and other
sources of income.
   (c) If the board, in adopting the actuarial projection described
in subdivision (a), determines that the annual transfers to the
Supplemental Benefit Maintenance Account described in Section 22954,
combined with all other anticipated sources of income to the account,
are likely to be less than sufficient over the term established by
the board to continue providing the purchasing power protection being
provided at the time of the projection, it shall identify the
maximum level of purchasing power protection benefits that it expects
to be sustainable over that term from these contributions and other
sources of income.
   (d) It is the intent of the Legislature that the board shall adopt
the projections and determinations described in subdivisions (a),
(b), and (c) pursuant to its powers and responsibilities under
Section 17 of Article XVI of the California Constitution, including,
but not limited to, the board's fiduciary responsibility to the
system's participants and their beneficiaries and the board's sole
and exclusive power to provide for actuarial services of the system.
Therefore, in its adoption of the projections and determinations
required in subdivisions (a), (b), and (c), the board may utilize any
actuarial assumptions, methods, and standards that it deems
appropriate to determine the level of purchasing power protection
benefits that it expects can be sustained over the term established
by the board by funds of the Supplemental Benefit Maintenance
Account.
   (e) The board shall determine the frequency and timing of its
adoption of the actuarial projection described in subdivision (a) in
regulations that it adopts pursuant to subdivision (e) of Section
24415.5.
   (f) The board shall promptly provide to the Director of Finance,
the Chairperson of the Joint Legislative Budget Committee, the
chairpersons of the Senate Committee on Public Employment and
Retirement and the Assembly Committee on Public Employees, Retirement
and Social Security, and the Legislative Analyst a summary of its
actuarial projections and other determinations, as adopted pursuant
to subdivisions (a), (b), and (c). The report shall include a
description of any adjustments of benefits made pursuant to Section
24415.5.
  SEC. 7.  Section 22954.5 of the Education Code is repealed.
  SEC. 8.  Section 22954.5 is added to the Education Code, to read:
   22954.5.  (a) In addition to the amounts appropriated for transfer
to the Supplemental Benefit Maintenance Account in Section 22954,
there is hereby appropriated from the General Fund to the Controller
for transfer to the Supplemental Benefit Maintenance Account in the
Teachers' Retirement Fund the following amounts in each of the
specified fiscal years, as follows:
2009-10..................$56,979,949
2010-11..................$56,979,949
2011-12..................$56,979,949
2012-13..................$56,979,949


   (b) It is the intent of the Legislature that the annual Budget Act
for each of the fiscal years described in subdivision (a) display
the amounts listed above in Item 1920-011-0001 as an informational
item, along with other estimated amounts required to be transferred
from the General Fund to the Teachers' Retirement Fund pursuant to
Sections 22954 and 22955. In the reports, calculations, and schedules
that the system submits pursuant to Section 22955.5 for the purpose
of informing the Department of Finance, the Legislature, and the
Controller of the state's appropriations pursuant to Sections 22954
and 22955 in each of the fiscal years listed in subdivision (a), the
system shall also include the amounts appropriated for transfer to
the Supplemental Benefit Maintenance Account in subdivision (a). Upon
appropriation, the amounts listed in subdivision (a) may be
transferred on or after July 1 in each of the fiscal years indicated.

   (c) The appropriation in subdivision (a) fulfills the intent of
the Legislature described in Chapter 59 of the Statutes of 2008 to
pay interest on the judgment in the case of Teachers' Retirement
Board v. Genest and Chiang, Sacramento County Superior Court Case No.
03CS01503.
  SEC. 9.  Section 22955 of the Education Code is amended to read:
   22955.  (a) Notwithstanding Section 13340 of the Government Code,
commencing July 1, 2003, a continuous appropriation is hereby
annually made from the General Fund to the Controller, pursuant to
this section, for transfer to the Teachers' Retirement Fund. The
total amount of the appropriation for each year shall be equal to
2.017 percent of the total of the creditable compensation of the
fiscal year ending in the immediately preceding calendar year upon
which members' contributions are based, as reported annually to the
Director of Finance, the Chairperson of the Joint Legislative Budget
Committee, and the Legislative Analyst pursuant to Section 22955.5,
and shall be divided into four equal quarterly payments.
   (b) Notwithstanding Section 13340 of the Government Code,
commencing October 1, 2003, a continuous appropriation, in addition
to the appropriation made by subdivision (a), is hereby annually made
from the General Fund to the Controller for transfer to the Teachers'
Retirement Fund. The total amount of the appropriation for each year
shall be equal to 0.524 percent of the total of the creditable
compensation of the fiscal year ending in the immediately preceding
calendar year upon which members' contributions are based, as
reported annually to the Director of Finance, the Chairperson of the
Joint Legislative Budget Committee, and the Legislative Analyst
pursuant to Section 22955.5, and shall be divided into four equal
quarterly payments. The percentage shall be adjusted to reflect the
contribution required to fund the normal cost deficit or the unfunded
obligation as determined by the board based upon a recommendation
from its actuary. If a rate increase is required, the adjustment may
be for no more than 0.25 percent per year and in no case may the
transfer made pursuant to this subdivision exceed 1.505 percent of
the total of the creditable compensation of the fiscal year ending in
the immediately preceding calendar year upon which members'
contributions are based. At any time when there is neither an
unfunded obligation nor a normal cost deficit, the percentage shall
be reduced to zero. The funds transferred pursuant to this
subdivision shall first be applied to eliminating on or before June
30, 2027, the unfunded actuarial liability of the fund identified in
the actuarial valuation as of June 30, 1997.
   (c) For the purposes of this section, the term "normal cost
deficit" means the difference between the normal cost rate as
determined in the actuarial valuation required by Section 22311 and
the total of the member contribution rate required under Section
22901 and the employer contribution rate required under Section
22950, and shall exclude (1) the portion for unused sick leave
service credit granted pursuant to Section 22717, and (2) the cost of
benefit increases that occur after July 1, 1990. The contribution
rates prescribed in Section 22901 and Section 22950 on July 1, 1990,
shall be utilized to make the calculations. The normal cost deficit
shall then be multiplied by the total of the creditable compensation
upon which member contributions under this part are based to
determine the dollar amount of the normal cost deficit for the year.
   (d) Pursuant to Section 22001 and case law, members are entitled
to a financially sound retirement system. It is the intent of the
Legislature that this section shall provide the retirement fund
stable and full funding over the long term.
   (e) This section continues in effect but in a somewhat different
form, fully performs, and does not in any way unreasonably impair,
the contractual obligations determined by the court in California
Teachers' Association v. Cory, 155 Cal.App.3d 494.
   (f) Subdivision (b) shall not be construed to be applicable to any
unfunded liability resulting from any benefit increase or change in
contribution rate under this part that occurs after July 1, 1990.
   (g) The provisions of this section shall be construed and
implemented to be in conformity with the judicial intent expressed by
the court in California Teachers' Association v. Cory, 155
Cal.App.3d 494.
   (h) This section shall become operative on July 1, 2003, if the
revenue limit cost-of-living adjustment computed by the
Superintendent of Public Instruction for the 2001-02 fiscal year is
equal to or greater than 3.5 percent. Otherwise this section shall
become operative on July 1, 2004.
  SEC. 10.  Section 22955.5 of the Education Code is amended to read:

   22955.5.  (a) For purposes of Sections 22954 and 22955,
"creditable compensation" shall include only creditable compensation
for which member contributions are credited under the Defined Benefit
Program.
   (b) On or after October 1 and on or before October 25 of each
year, beginning in 2008, the board shall calculate the total amount
of creditable compensation for the fiscal year that ended on the
immediately preceding June 30. For the purpose of informing the
Department of Finance and the Legislature of the amount of the state'
s appropriations pursuant to Sections 22954 and 22955 in the next
fiscal year, the system shall immediately submit a report that
includes this calculation to the Director of Finance, the Chairperson
of the Joint Legislative Budget Committee, and the Legislative
Analyst.
   (c) After submission of the report described in subdivision (b),
on or before the April 15 after submission of the report described in
subdivision (b), the system shall notify the Director of Finance,
the Chairperson of the Joint Legislative Budget Committee, and the
Legislative Analyst of any revisions in its calculation of the total
amount of creditable compensation for the fiscal year that ended on
the immediately preceding June 30.
   (d) The last revised calculation submitted pursuant to subdivision
(c) on or before April 15 of each year or, if no such revised
calculation is submitted, the calculation in the report submitted
pursuant to subdivision (b) shall be the calculation of creditable
compensation upon which the state's appropriations pursuant to
Sections 22954 and 22955 will be based in the next fiscal year. On or
after April 15 and on or before May 1 of each year, the system shall
submit to the Controller a copy of this calculation, along with a
requested schedule of transfers to be made pursuant to the
appropriations in Sections 22954 and 22955 in the next fiscal year
beginning on the next July 1. The system shall also provide a copy of
this schedule to the Director of Finance and the Legislative
Analyst.
  SEC. 11.  Section 24411 of the Education Code is repealed.
  SEC. 12.  Section 24412 of the Education Code is amended to read:
   24412.  (a) The annual revenues deposited to the Teachers'
Retirement Fund pursuant to Section 6217.5 of the Public Resources
Code are continuously appropriated without regard to fiscal year for
the purposes of this section and shall be distributed annually in
quarterly supplemental payments commencing on September 1 of each
year to retired members, disabled members, and beneficiaries under
the Defined Benefit Program. The amount available for distribution in
any year shall be the income for that year from the sale or use of
school lands and lieu lands, as estimated by the State Lands
Commission prior to the beginning of the fiscal year, adjusted by the
difference between the estimated and actual income for the preceding
fiscal year. The board shall deduct from the revenues an amount
necessary for administrative expenses to implement this section.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances under
the Defined Benefit Program, after applying the annual improvement
factor as defined in Section 22140, if any, are below 80 percent of
the original purchasing power. The purchasing power calculation for
each individual allowance shall be based on the change in the All
Urban California Consumer Price Index between June of the calendar
year of retirement and June of the fiscal year preceding the fiscal
year of the distribution. The allocation shall provide a pro rata
share of the amount needed to restore the allowance payable, after
application of the current year annual improvement factor to 80
percent of the original purchasing power.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) In any year that the net revenues from school lands and lieu
lands is greater than that needed to adjust the allowances of all
retired members, disabled members, and beneficiaries, as defined in
subdivision (a) of Section 22107, under the Defined Benefit Program
to 80 percent of the original purchasing power, the net revenues in
excess of that needed for distribution shall be used by the board to
reduce the unfunded actuarial obligation of the fund, if any.
   (e) The board shall inform each recipient of supplemental payments
under this section that the increases are not cumulative and are not
part of the base allowance.
  SEC. 13.  Section 24415 of the Education Code is amended to read:
   24415.  (a) The proceeds of the Supplemental Benefit Maintenance
Account shall be distributed annually in quarterly supplemental
payments commencing on September 1, 1990, to retired members,
disabled members, and beneficiaries, as defined in subdivision (a) of
Section 22107. The amount available for distribution in any fiscal
year shall not exceed the amount necessary to restore purchasing
power up to 85 percent of the purchasing power of the initial monthly
allowance after the application of all allowance increases
authorized by this part, including those specified in Section 24412,
and excluding those provided pursuant to Sections 24410.5, 24410.6,
and 24410.7.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances, after
sequentially applying the annual improvement factor as defined in
Sections 22140 and 22141, and the annual supplemental payment as
specified in Section 24412, have the lowest purchasing power
percentage. The purchasing power calculation for each individual
shall be based on the change in the All Urban California Consumer
Price Index between June of the calendar year of retirement and June
of the fiscal year preceding the fiscal year of distribution. In any
year in which the purchasing power of the allowances of all retired
members, disabled members, and beneficiaries, as defined in
subdivision (a) of Section 22107, equals not less than 85 percent and
additional funds remain from the allocation authorized by this
section, those funds shall remain in the Supplemental Benefit
Maintenance Account for allocation in future years.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) The increases provided by subdivision (b) are not cumulative,
not part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account. The board shall inform each recipient of the
contents of this subdivision.
   (e) The adjustments authorized by this section are vested only up
to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and the adjustments made by the board
pursuant to Section 24415.5. The adjustments authorized by this
section shall not be included in the base allowance for purposes of
calculating the annual improvement defined by Sections 22140 and
22141.
   (f) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Section 24410.5
for members and beneficiaries receiving benefits pursuant to
subdivision (b), the purchasing power calculation shall be based on
85 percent of the change in the All Urban California Consumer Price
Index between January 2000 and June of the fiscal year preceding the
fiscal year of distribution, after the application of increases
authorized by Section 24412 that are made to the allowances provided
pursuant to Section 24410.5.
   (g) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Sections 24410.6
and 24410.7 for members and beneficiaries receiving benefits pursuant
to subdivision (b), the purchasing power calculation shall be based
on 85 percent of the change in the All Urban California Consumer
                                          Price Index between January
2001 and June of the fiscal year preceding the fiscal year of
distribution, after the application of increases authorized by
Section 24412 that are made to the allowances provided pursuant to
Sections 24410.6 and 24410.7.
  SEC. 14.  Section 24415.5 is added to the Education Code, to read:
   24415.5.  (a)  Notwithstanding any other provision of this
chapter, the board shall adjust the purchasing power protection
benefits payable pursuant to Sections 24415, 24416, and 24417 in
accordance with subdivisions (b) and (c) of this section.
   (b) If the board, in adopting the actuarial projection described
in subdivision (a) of Section 22954.1, determines that the annual
transfers to the Supplemental Benefit Maintenance Account described
in Section 22954, combined with all other anticipated sources of
income to the account, are likely to be less than sufficient over the
term established by the board to continue providing the purchasing
power protection being provided at the time of the projection, it
shall identify the maximum level of purchasing power protection
benefits that it expects to be sustainable over that term, as
specified in subdivision (c) of Section 22954.1. The board, upon
making the determination specified in subdivision (c) of Section
22954.1, shall reduce the purchasing power protection benefits
payable pursuant to Sections 24415, 24416, and 24417 to the maximum
sustainable level identified under this subdivision, except that
these benefits shall not be adjusted below the 80 percent purchasing
power protection level unless the board has made the determination of
insufficient funds described in subdivision (a) of Section 24416.
   (c) If the board, in adopting the actuarial projection described
in subdivision (a) of Section 22954.1, determines that the annual
transfers to the Supplemental Benefit Maintenance Account described
in Section 22954, combined with all other anticipated sources of
income to the account, are likely to be more than sufficient over the
term established by the board to continue providing the purchasing
power protection being provided at the time of the projection, it
shall identify the maximum level of purchasing power protection
benefits that it expects to be sustainable over that term, as
specified in subdivision (b) of Section 22954.1. The board, upon
making the determination specified in subdivision (b) of Section
22954.1, shall increase the purchasing power protection benefits
payable pursuant to Sections 24415, 24416, and 24417 to the maximum
sustainable level identified under this subdivision, except that
these benefits shall not be adjusted above the 85 percent purchasing
power protection level.
   (d) If the board identifies, pursuant to subdivision (b) of
Section 22954.1, that the maximum level of purchasing power
protection benefits it expects to be sustainable over the term
established by the board is greater than the 85 percent level, it
shall develop one or more proposals for options for the use of the
anticipated Supplemental Benefit Maintenance Account moneys in excess
of those believed to be necessary to sustain purchasing power
protection benefits at the 85 percent level over the term established
by the board. The options that the board proposes for use of these
moneys shall be for the exclusive benefit of members and
beneficiaries, and at least one of these proposed options shall be an
increase in benefits for any surviving members who retired prior to
January 1, 1999, and any surviving beneficiaries of members who
retired prior to January 1, 1999. The board shall either include a
summary of these proposed options in the report described in
subdivision (f) of Section 22954.1 or, within 60 days after
submission of that report, submit a separate letter to the recipients
of the report described in subdivision (f) of Section 22954.1 that
contains a summary of these proposed options. The board shall also
submit a summary of these proposed options to the Governor.
   (e) The board shall adopt and, after such adoption, may amend and
repeal regulations concerning its powers described in this section,
and it shall file these regulations, and amended and repealed
regulations, with the Secretary of State. The adoption, amendment, or
repeal of a regulation authorized by this section is hereby exempted
from the rulemaking provisions of the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code).
  SEC. 15.  Section 24416 of the Education Code is amended to read:
   24416.  (a) If the board determines by June 30 of the then current
fiscal year that the Supplemental Benefit Maintenance Account will
not have sufficient funds to provide purchasing power protection
benefits, as established in this chapter, of at least 80 percent for
the subsequent fiscal year, the board, for that year, may do either,
or a combination of the following:
   (1) Increase the employer contribution rate commencing in the next
fiscal year by an amount that would provide sufficient funds for no
more than the estimated difference between the funds in the
Supplemental Benefit Maintenance Account and the amount needed to pay
the benefit level specified by the board, provided the benefit level
is no more than 85 percent. Notwithstanding any other provision of
this part, the increase in the employer contribution rate shall only
become operative if the increase is approved or authorized in the
Budget Act.
   (2) Reduce the supplemental benefit payment for the subsequent
fiscal year to the amount that can be funded by the available funds
in the Supplemental Benefit Maintenance Account.
   (b) If the board finds that there is no unfunded obligation, as
determined by the board's professional consulting actuary and
affirmed by the Director of Finance, then in addition to the
authority pursuant to subdivision (a), the board may transfer to an
auxiliary Supplemental Benefit Maintenance Account, from any funds
that are in excess of the amount needed to fund fully the benefits
for which the Teachers' Retirement Fund is liable, an amount that
would provide sufficient funds for no more than the estimated
difference between the funds in the Supplemental Benefit Maintenance
Account and the amount needed to pay the benefit level specified by
the board, provided the benefit level is no more than 85 percent.
   (c) If the board increases the employer contribution rate pursuant
to paragraph (1) of subdivision (a), the increase between the
current fiscal year contribution rate and the contribution rate in
the next fiscal year, shall not exceed one-quarter of 1 percent of
the creditable compensation upon which contributions are based.
  SEC. 16.  Section 24417 of the Education Code is amended to read:
   24417.  (a) The proceeds of an auxiliary Supplemental Benefit
Maintenance Account shall be distributed annually in quarterly
supplemental payments, commencing when funds in the Supplemental
Benefit Maintenance Account are insufficient to support 85 percent,
to retired members, disabled members, and beneficiaries, as defined
in subdivision (a) of Section 22107. The amount available for
distribution in any fiscal year shall not exceed the amount necessary
to restore purchasing power up to 85 percent of the purchasing power
of the initial monthly allowance after the application of all
allowance increases authorized by this part, including those
specified in Sections 24412 and 24415, and excluding those provided
pursuant to Sections 24410.5, 24410.6, and 24410.7.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances, after
sequentially applying the annual improvement factor as defined in
Sections 22140 and 22141, and the annual supplemental payment as
specified in Sections 24412 and 24415, have the lowest purchasing
power percentage. The purchasing power calculation for each
individual shall be based on the change in the All Urban California
Consumer Price Index between June of the calendar year of the benefit
effective date and June of the fiscal year preceding the fiscal year
of distribution.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) The increases provided by subdivision (b) are not cumulative,
nor part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account and the auxiliary Supplemental Benefit
Maintenance Account. The board shall inform each recipient of the
contents of this subdivision.
   (e) The distributions authorized by this section are vested only
up to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and the adjustments made by the board
pursuant to Section 24415.5. The distributions authorized by this
section shall not be included in the base allowance for purposes of
calculating the annual improvement defined by Sections 22140 and
22141.
   (f) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Section 24410.5
for members and beneficiaries receiving benefits pursuant to
subdivision (b), the purchasing power calculation shall be based on
85 percent of the change in the All Urban California Consumer Price
Index between January 2000 and June of the fiscal year preceding the
fiscal year of distribution, after the application of increases
authorized by Section 24412 that are made to the allowances provided
pursuant to Section 24410.5.
   (g) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Sections 24410.6
and 24410.7 for members and beneficiaries receiving benefits pursuant
to subdivision (b), the purchasing power calculation shall be based
on 85 percent of the change in the All Urban California Consumer
Price Index between January 2001 and June of the fiscal year
preceding the fiscal year of distribution, after the application of
increases authorized by Section 24412 that are made to the allowances
provided pursuant to Sections 24410.6 and 24410.7.
  SEC. 17.  Section 24600 of the Education Code is amended to read:
   24600.  (a) A retirement allowance under this part begins to
accrue on the effective date of the member's retirement and ceases on
the earlier of the day of the member's death or the day on which the
retirement allowance is terminated for a reason other than the
member's death.
   (b) A retirement allowance payable to an option beneficiary under
this part begins to accrue on the day following the day of the
retired member's death and ceases on the day of the option
beneficiary's death.
   (c) A disability allowance under this part begins to accrue on the
effective date of the member's disability allowance and ceases on
the earlier of the day of the member's death or the day on which the
disability allowance is terminated for a reason other than the member'
s death.
   (d) A family allowance under this part begins to accrue on the day
following the day of the member's death and ceases on the day of the
event that terminates eligibility for the allowance.
   (e) A survivor benefit allowance payable to a surviving spouse
under this part pursuant to Chapter 23 (commencing with Section
23850) begins to accrue on the day the member would have attained 60
years of age or on the day following the day of the member's death,
as elected by the surviving spouse, and ceases on the day of the
surviving spouse's death.
   (f) A child's portion of an allowance under this part begins to
accrue on the effective date of that allowance and ceases on the
earlier of either the termination of the child's eligibility or the
termination of the allowance.
   (g) Supplemental payments issued under this part pursuant to
Sections 24412 and 24415 to retired members, disabled members, and
beneficiaries shall begin to accrue pursuant to Sections 24412 and
24415 and shall cease to accrue as of the termination dates specified
in subdivisions (a) to (f), inclusive, of this section.
   (h) Notwithstanding any other provision of this part or other law,
distributions payable under the plan with respect to the Defined
Benefit Program and the Defined Benefit Supplement Program shall be
made in accordance with applicable provisions of the Internal Revenue
Code of 1986 and related regulations. The required beginning date of
benefit payments that represent the entire interest of the member in
the plan with respect to the Defined Benefit Program and the Defined
Benefit Supplement Program shall be either:
   (1) In the case of a refund of contributions, as described in
Chapter 18 (commencing with Section 23100) of this part and
distribution of an amount equal to the balance of credits in a member'
s Defined Benefit Supplement account, as described in Chapter 38
(commencing with Section 25000) of this part, not later than April 1
of the calendar year following the later of (A) the calendar year in
which the member attains the age at which the Internal Revenue Code
of 1986 requires a distribution of benefits or (B) the calendar year
in which the member terminates employment within the meaning of
subdivision (i).
   (2) In the case of a retirement allowance, as defined in Section
22166, not later than April 1 of the calendar year following the
later of (A) the calendar year in which the member attains the age at
which the Internal Revenue Code of 1986 requires a distribution of
benefits or (B) the calendar year in which the member terminates
employment within the meaning of subdivision (i), to continue over
the life of the member or the lives of the member and the member's
option beneficiary, or over the life expectancy of the member or the
life expectancy of the member and the member's option beneficiary.
   (i) For purposes of subdivision (h), the phrase "terminates
employment" means the later of:
   (1) The date the member ceases to perform creditable service
subject to coverage under this plan.
   (2) The date the member ceases employment in a position subject to
coverage under another public retirement system in this state if the
compensation earnable while a member of the other system may be
considered in the determination of final compensation pursuant to
Section 22134, 22135, or 22136.
  SEC. 18.  Section 13001 of the Fish and Game Code is amended to
read:
   13001.  (a) Unless otherwise provided, all money collected under
the provisions of this code and of any other law relating to the
protection and preservation of birds, mammals, fish, reptiles, or
amphibia shall be paid into the State Treasury to the credit of the
Fish and Game Preservation Fund.
   (b) Notwithstanding any other provision of law, the Controller may
use the Fish and Game Preservation Fund for loans to the General
Fund as provided in Sections 16310 and 16381 of the Government Code.
  SEC. 19.  Section 4101.4 is added to the Food and Agricultural
Code, to read:
   4101.4.  (a) The Legislature finds and declares that the operation
of the California Science Center may require individual skills not
generally available in state civil service to support specialized
functions, such as exhibit maintenance, and educational and guest
services programs, including animal care and horticulture.
   (b) Notwithstanding any other provision of law, the California
Science Center may enter into a personal services contract or
contracts with the California Science Center Foundation without a
competitive bidding process. These contracts shall be subject to
approval by the State and Consumer Services Agency and the Department
of General Services and be subject to all state audit requirements.
  SEC. 20.  Section 8544.5 of the Government Code is amended to read:

   8544.5.  (a) There is hereby established in the State Treasury the
State Audit Fund. Notwithstanding Section 13340, the State Audit
Fund is continuously appropriated for the expenses of the State
Auditor. There shall be appropriated annually in the Budget Act to
the State Audit Fund, from the General Fund and the Central Service
Cost Recovery Fund, the amount necessary to reimburse the State Audit
Fund for the cost of audits to be performed that are not directly
reimbursed under subdivision (c). "Cost of audits" means all direct
and indirect costs of conducting the audits and any other expenses
incurred by the State Auditor in fulfilling his or her statutory
responsibilities.
   (b) With regard to the funds appropriated pursuant to subdivision
(a), upon certification by the State Auditor of estimated costs on a
monthly basis, the Controller shall transfer the amount thus
certified from the General Fund or the Central Service Cost Recovery
Fund, as applicable, to the State Audit Fund. The Controller shall
thereafter issue warrants drawn against the State Audit Fund upon
receipt of claims certified by the State Auditor.
   (c) To ensure appropriate reimbursement from federal and special
funds for the costs of the duties performed pursuant to Section
8546.3, the State Auditor may directly bill state agencies for the
costs incurred, subject to the approval of the Director of Finance.
   (d) To ensure adequate oversight of the operations of the bureau,
the Milton Marks "Little Hoover" Commission on California State
Government Organization and Economy shall annually obtain the
services of an independent public accountant to audit the State Audit
Fund and the operation of the bureau to assure compliance with state
law, including Section 8546. The results of this audit shall be
submitted to the commission and shall be a public record.
   (e) To ensure that audits of the Milton Marks "Little Hoover"
Commission on California State Government Organization and Economy
are conducted in conformity with government auditing standards, any
audit of the commission that is required or permitted by law shall be
conducted by the independent public accountant selected pursuant to
subdivision (d).
  SEC. 21.  Section 11032 of the Government Code is amended to read:
   11032.  Any state officer or employee of any state agency may
confer with other persons, associations, or organizations outside of
the state whenever it may be of assistance in the conduct of state
business. Actual and necessary expenses for travel outside of the
state as authorized by this section shall be allowed when approved by
the Governor. This section shall not apply to employees of any
legislative committee or to the Legislative Counsel or his or her
employees.
  SEC. 22.  Section 11033 of the Government Code is amended to read:
   11033.  No state officer or employee shall absent himself or
herself from the state on business of the state without the prior
approval of the Governor, except when the absence is for less than
five consecutive working days' duration and involves only travel into
states bordering upon this state. This section shall not apply to
elective state officers, employees of any legislative committee, or
to the Legislative Counsel or his or her employees.
  SEC. 23.  Section 11270 of the Government Code is amended to read:
   11270.  As used in this article, "administrative costs" means the
amounts expended by the Legislature, the Legislative Counsel Bureau,
the office of the Governor, the office of the State Chief Information
Officer, the Office of Planning and Research, the Department of
Justice, the office of the Controller, the office of the Treasurer,
the State Personnel Board, the Department of Finance, the Office of
Administrative Law, the Department of Personnel Administration, the
Secretary of the State and Consumer Services Agency, the Secretary of
the California Health and Human Services Agency, the Bureau of State
Audits, and the California State Library, and a proration of any
other cost to or expense of the state for services or facilities
provided for the Legislature and the above agencies, for supervision
or administration of the state government or for services to other
state agencies.
  SEC. 24.  Section 11270.1 is added to the Government Code, to read:

   11270.1.  (a) The Central Service Cost Recovery Fund is hereby
created in the State Treasury. The Central Service Cost Recovery Fund
shall consist of those amounts transferred in accordance with
Section 11274, and any interest earnings. Money in the Central
Service Cost Recovery Fund shall be appropriated for the
administration of the state government, as determined or redetermined
by the Director of Finance in accordance with this article and
Sections 13332.02 and 13332.03.
   (b) Unless otherwise authorized by law, moneys in the Central
Service Cost Recovery Fund, to the extent not currently required to
fund any appropriation, shall not be used, loaned, borrowed,
assessed, allocated, or transferred unless approved by the Director
of Finance, except for cashflow borrowing by the General Fund
pursuant to Section 16310. The Controller shall transfer the
unexpended balance of those moneys in the Central Service Cost
Recovery Fund to the General Fund as determined or redetermined by
the Director of Finance.
  SEC. 25.  Section 11271 of the Government Code is amended to read:
   11271.  The Department of Finance shall determine, and may at any
time redetermine, which funds, other than the General Fund and the
Central Service Cost Recovery Fund, and which functions or activities
of the Department of Water Resources supported by the General Fund,
shall be charged a share of administrative costs as to the function
supported by that fund and the amount that shall be charged against
that fund as its fair share of administrative costs. The costs shall
be a charge against any fund or special account in the General Fund,
other than the Central Service Cost Recovery Fund, so designated by
the Department of Finance.
   For purposes of this section, a special account or fund in the
General Fund shall not be considered the General Fund.
  SEC. 26.  Section 11272 of the Government Code is amended to read:
   11272.  (a) In determining or redetermining the fair share, the
Department of Finance may consider the factors of cost distribution
and cost estimation as it deems necessary, except that, as to the
proceeds of those taxes, the use of which is restricted by Article
XIX of the California Constitution, the Department of Finance shall
assess only those administrative costs ascertained as being
necessarily incurred in connection with highway purposes as set forth
in the article. As to funds collected pursuant to Section 221 of the
Food and Agricultural Code, the Department of Finance shall assess
only those administrative costs incurred in connection with the
enforcement of the law under which the funds were derived.
   (b) In determining the share of costs to be borne by the
California Exposition and State Fair, the Department of Finance shall
take into account any reduction in the services provided to the
California Exposition and State Fair as a consequence of the
assumption of the various functions that the California Exposition
and State Fair is authorized to assume by the act that amended this
section during the 1997-98 Regular Legislative Session, and shall
reduce the fair share of the California Exposition and State Fair
accordingly. From its operating funds, the California Exposition and
State Fair shall reimburse the Central Service Cost Recovery Fund or
the General Fund, in accordance with subdivision (b) of Section
11274, for its share of costs determined pursuant to this
subdivision.
  SEC. 27.  Section 11274 of the Government Code is amended to read:
   11274.  (a) The Department of Finance shall certify annually to
the Controller the amount determined to be the fair share of
administrative costs due and payable from each state agency and shall
certify forthwith to the Controller any amount redetermined to be
the fair share of administrative costs due and payable from any state
agency. The Controller shall forthwith transmit to each state agency
from which administrative costs have been determined or redetermined
to be due, a statement in writing setting forth the amount of the
administrative costs due from the state agency, and stating that,
unless a written request to defer payment thereof is filed by the
state agency with the Controller within 30 days after the mailing of
the statement by the Controller to the state agency, the Controller
will transfer the amount of the administrative costs from the special
fund or funds chargeable therewith to the Central Service Cost
Recovery Fund or the General Fund, in accordance with subdivision
(b). The Controller shall specify on the statement the special fund
appropriations to be charged at the time transfers are made covering
the administrative costs.
   (b) The Controller shall transfer one-fourth of the amount
determined or redetermined, in accordance with subdivision (a), on
August 15, November 15, February 15, and May 15 of each fiscal year,
unless revised by the Department of Finance. The transfers made
pursuant to this section and Section 13332.03 shall first be made to
the Central Service Cost Recovery Fund until the total amount
transferred equals the sum of the total amount determined or
redetermined in accordance with subdivision (a) and the total amount
to be recovered from the federal government pursuant to Section
13332.02 as determined by the Department of Finance. All subsequent
transfers for that fiscal year shall then be made to the General
Fund.
  SEC. 28.  Section 11276 of the Government Code is amended to read:
   11276.  The Department of Finance may certify at any time during
the year to the Controller any amount as it determines, based upon
experience of the preceding year, to be a reasonable advance for
administrative costs to be made from the appropriation of each state
agency supported from a fund, designated in accordance with Section
11271. The Controller shall forthwith transmit to each of these state
agencies a statement in writing setting forth the amount of the
advance and stating that unless a written request to defer payment
thereof because of lack of availability of funds is filed by the
state agency with the Department of Finance within 30 days after the
mailing of the statement by the Controller to the state agency, the
Controller will transfer the amount of the advance from the special
fund or funds concerned to the Central Service Cost Recovery Fund or
the General Fund in accordance with subdivision (b) of Section 11274.
The Controller shall specify on the statement the special fund
appropriation to be charged.
                                SEC. 29.  Section 11277 of the
Government Code is amended to read:
   11277.  If, upon receipt of the statement provided in Section
11276, the state agency does not have funds available by law for the
payment of the advance, the state agency shall, prior to the
expiration of the 30-day period referred to in that statement, file
with the Controller, in duplicate, a written request to defer payment
of the advance. Upon receipt of such a request, the Controller shall
forthwith transmit one copy of that request to the Department of
Finance and shall defer action to effect the transfer of funds
covering the advance referred to in the request until the transfer
has been approved by the Director of Finance. Any advance made under
this article shall be applied against the state agency's fair share
of administrative costs determined or redetermined as provided in
Section 11274 and Section 11275. If the amount advanced exceeds the
state agency's fair share of administrative costs, the Controller
shall transfer from the Central Service Cost Recovery Fund or the
General Fund, as applicable, to the special fund appropriation the
excess amount advanced as directed by the Department of Finance.
  SEC. 30.  Section 13300 of the Government Code is amended to read:
   13300.  (a) The department shall devise, install, supervise, and,
at its discretion, revise and modify, a modern and complete
accounting system and policies for each agency of the state permitted
or charged by law with the handling of public money or its
equivalent, to the end that all revenues, expenditures, receipts,
disbursements, resources, obligations, and property of the state be
properly, accurately, and systematically accounted for and that there
shall be obtained accurate and comparable records, reports, and
statements of all the financial affairs of the state.
   (b) This system shall permit a comparison of budgeted
expenditures, actual expenditures, encumbrances and payables, and
estimated revenue to actual revenue that is compatible with a budget
coding system developed by the department. In addition, the system
shall provide for a federal revenue accounting system with
cross-references of federal fund sources to state activities.
   (c) This system shall include a cost accounting system that
accounts for expenditures by line item, governmental unit, and fund
source. The system shall also be capable of performing program cost
accounting as required. The system and the accounts maintained by all
state departments and agencies shall be coordinated with the central
accounts maintained by the Controller, and shall provide the
Controller with all information necessary to the maintenance by the
Controller of a comprehensive system of central accounts for the
entire state government.
   (d) Beginning with the 2008-09 fiscal year, the Department of
Finance, the Controller, the Treasurer, and the Department of General
Services shall partner to design, develop, and implement the
Financial Information System for California Project to meet the
requirements of subdivisions (a), (b), and (c), and the FISCal
Project documents, as established in the FISCal Special Project
Report dated October 30, 2006, as revised on December 14, 2006, as
amended by the FISCal Special Project Report dated November 9, 2007,
as revised on December 19, 2007, and as amended, augmented, or
changed by any subsequent approved Special Project Report.
  SEC. 31.  Section 13302 of the Government Code is amended to read:
   13302.  The accounting system devised as provided in Section 13300
shall provide, with respect to the General Fund and other
governmental funds, for:
   (a) The accrual of expenditures as of the end of each fiscal year
on the basis of payables incurred, excluding accrued interest on
general obligation bonded indebtedness.
   (b) (1) The accrual of revenues at the end of the fiscal year if
the underlying transaction has occurred as of the last day of the
fiscal year, the amount is measurable, and the actual collection will
occur either during the current period or after the end of the
current period but in time to pay current year-end liabilities.
   (2) Cash in agency trust accounts within the centralized State
Treasury system that is in transit to the State Treasury, accrued
interest receivable, and accounts receivable shall be accrued as of
the end of each fiscal year.
   (c) For the purposes of financial reporting:
   (1) A payable exists when goods or services have been delivered
and the state is required to pay for those goods or services, and an
encumbrance exists when a valid obligation against an appropriation
has been created.
   (2) All funds appropriated shall be identified as either expended,
payable, encumbered (exclusive of payables), or unencumbered, as
further defined by the California Fiscal Advisory Board, and the
total of these shall equal the total appropriation.
  SEC. 32.  Section 13311 is added to the Government Code, to read:
   13311.  (a) Notwithstanding any other provision of law, in order
to achieve effective management of state cash resources, the Director
of Finance may defer payment of General Fund moneys, in a cumulative
amount not to exceed five hundred million dollars ($500,000,000)
annually, appropriated to the University of California in the annual
Budget Act.
   (b) The payment of the amount deferred shall be in May or June, as
established by the Director of Finance, of the same fiscal year that
the original payment would have been made.
  SEC. 33.  Section 13312 is added to the Government Code, to read:
   13312.  (a) (1) Commencing with the 2008-09 fiscal year, and
notwithstanding any other provision of law, if after the annual
Budget Act is enacted, the Director of Finance determines that
General Fund total available resources for the fiscal year will
decline substantially below the estimate of General Fund total
resources available upon which the Budget Act was based, or that
General Fund expenditures will increase substantially above that
estimate of General Fund total resources available, the director may
make reductions pursuant to subdivision (b).
   (2) For purposes of this subdivision, "total resources available"
includes prior year balance and revenues and transfers for the fiscal
year.
   (b) Upon making a determination as described in subdivision (a),
the Director of Finance, in consultation with agency secretaries and
other cabinet members, may reduce General Fund items of
appropriation, subject to both of the following:
   (1) The Director of Finance shall not reduce, pursuant to this
section, the amounts appropriated for any of the following:
   (A) The Legislature.
   (B) Constitutional officers.
   (C) Transfers pursuant to the Article XIX B of the California
Constitution.
   (D) Debt service, including, but not limited to, tobacco
settlement revenue shortfalls, payment of interest on General Fund
loans, and interest payments to the federal government.
   (E) Health and dental benefits for annuitants.
   (F) Equity claims before the California Victim Compensation and
Government Claims Board.
   (G) Augmentations for contingencies or emergencies.
   (H) Local assistance appropriations.
   (2) A General Fund state operations or capital outlay item of
appropriation, and a program or category designated in any line of
any schedule set forth by that appropriation, may not be reduced by
more than 7 percent.
   (c) Notwithstanding any provision of law to the contrary, any
cost-of-living adjustment or rate increase funded in an annual Budget
Act shall be subject to the following conditions:
   (1) If the Director of Finance determines that suspension by up to
120 days of the effective date of a cost-of-living adjustment or
rate increase funded in an annual Budget Act is necessary to mitigate
conditions that would authorize the issuance of a proclamation
declaring a fiscal emergency pursuant to subdivision (f) of Section
10 of Article IV of the California Constitution, that cost-of-living
adjustment or rate increase shall not take effect during that time.
   (2) (A) If the Governor issues a proclamation declaring a fiscal
emergency pursuant to subdivision (f) of Section 10 of Article IV of
the California Constitution, then no cost-of-living adjustment or
rate increase funded in the annual Budget Act for that fiscal year
shall take effect until the Legislature passes and sends to the
Governor a bill or bills to address the fiscal emergency.
   (B) Commencing with the 2009-10 fiscal year, the annual Budget Act
shall include a section specifying the cost-of-living adjustments or
rate increases included in the Budget Act or authorized by other
statutes which may be suspended pursuant to this paragraph.
   (d) The Director of Finance shall report to the Chair of the Joint
Legislative Budget Committee and the chairs of the committees of
each house of the Legislature that consider appropriations not less
than 30 days prior to making reductions pursuant to this section. The
report shall list the specific reductions, by department, agency,
and program, and state the programmatic effects and impacts of each
reduction.
   (e) Cost-of-living adjustments for purposes of this section shall
not include any apportionments made to fund a cost-of-living
adjustment to augment appropriations made pursuant to Section 2558 of
the Education Code, for county office of education revenue limits,
or Section 42238 of the Education Code, for school district revenue
limits.
   (f) Nothing within this section shall be construed to confer any
authority upon the Director of Finance to modify or eliminate any
provision of existing law.
  SEC. 34.  Section 13332.02 of the Government Code is amended to
read:
   13332.02.  All funds recovered from the federal government to
offset statewide indirect costs shall be transferred to the Central
Service Cost Recovery Fund or to the unappropriated surplus of the
General Fund in a manner prescribed by the Department of Finance,
unless expenditure of the funds is authorized by the Department of
Finance. No authorization may become effective sooner than 30 days
after notification in writing of the necessity therefor to the
chairperson of the committee in each house that considers
appropriations and the Chairperson of the Joint Legislative Budget
Committee, or not sooner than whatever lesser time the Chairperson of
the Joint Legislative Budget Committee, or his or her designee, may
in each instance determine. If in the judgment of the Director of
Finance, a state agency has not transferred the funds on a timely
basis, the director may certify to the Controller the amount that the
agency should have transferred to the Central Service Cost Recovery
Fund or the General Fund, and the Controller shall transfer the funds
to the Central Service Cost Recovery Fund or the General Fund.
  SEC. 35.  Section 13332.03 of the Government Code is amended to
read:
   13332.03.  Whenever an appropriation has not been made to provide
for recovery of general administrative costs pursuant to Article 2
(commencing with Section 11270) of Chapter 3 of Part 1, a sufficient
sum for that purpose shall be transferred from each affected fund by
the Controller to the Central Service Cost Recovery Fund or the
unappropriated surplus of the General Fund in accordance with
subdivision (b) of Section 11274. The Controller shall make transfers
pursuant to this section only upon order of the Director of Finance.

  SEC. 36.  Section 13997.4 of the Government Code is repealed.
  SEC. 37.  Section 15814.28 is added to the Government Code, to
read:
   15814.28.  The department shall, no later than March 1, 2009, and
biennially thereafter, make the recommendations required in Section
15814.22, and report on all of the following for projects under its
jurisdiction:
   (a) The progress made toward implementing energy efficiency
measures in state facilities.
   (b) The most common energy efficiency measures being implemented.
   (c) The obstacles preventing further implementation of energy
efficiency measures.
   (d) How current efforts and ideas can be incorporated into the
Governor's five-year infrastructure plan described in Section 13102.
  SEC. 38.  Chapter 7 (commencing with Section 15849.20) is added to
Part 10b of Division 3 of Title 2 of the Government Code, to read:
      CHAPTER 7.  THE FINANCIAL INFORMATION SYSTEM FOR CALIFORNIA


   15849.20.  For purposes of this chapter and the issuance of debt
pursuant to this part, the following terms shall have the following
meanings:
   (a) "Acquire" has the same meaning as in Section 15802 and, in
addition, includes acquisition by development.
   (b) "Approved FISCal Project documents" means the FISCal Special
Project Report dated October 30, 2006, as revised on December 14,
2006, as amended by the FISCal Special Project Report dated November
9, 2007, revised on December 19, 2007, and as amended, augmented, or
changed by any subsequent approved Special Project Report or
legislative action.
   (c) "Cost or costs of the FISCal system" means the cost of a
public building, including, but not limited to, the acquisition,
design, development, installation, and deployment of the system, and
the acquisition, development, installation, implementation, and
deployment of enterprise resource planning software, other ancillary
software, hardware, licenses, upgrades, independent verification and
validation, and related training and facilities to acquire, develop,
install, implement, and deploy the system. Cost or costs of the
system also includes staff and contractor costs and expenses related
to the FISCal system. Cost or costs of the FISCal system does not
include the cost of the ongoing operation and maintenance of the
FISCal system or debt service for the FISCal system.
   (d) "Debt service for the FISCal system" means principal of;
premium, if any; and interest on, bonds or certificates issued to
finance and refinance the costs of the FISCal system and payments
pursuant to agreements providing security or liquidity for those
bonds or certificates.
   (e) "FISCal" means the Financial Information System for
California.
   (f) "Interim financing" means any financing issued or obtained in
accordance with this chapter and this part to finance the costs of
the FISCal system on an interim basis, including any loan from the
General Fund, any loan from the Pooled Money Investment Account, and
negotiable notes, including commercial paper notes or other forms of
negotiable short-term indebtedness and negotiable bond anticipation
notes.
   (g) "Notes" means negotiable notes, including commercial paper
notes or other forms of negotiable short-term indebtedness or
negotiable bond anticipation notes and any renewals thereof.
   (h) (1) Except as specified in paragraph (2), "office" means the
FISCal Project Office in the Department of Finance.
   (2) Upon the establishment of an Office of the Financial
Information System for California, "office" shall mean the Office of
the Financial Information System for California, and shall no longer
be construed to mean the FISCal Project Office in the Department of
Finance.
   (i) "Public building" has the same meaning as set forth in
subdivision (c) of Section 15802 and includes the FISCal system.
   (j) "State departments and agencies" means all state offices,
officers, departments, divisions, bureaus, boards, commissions,
organizations, or agencies, claims against which are paid by warrants
drawn by the Controller, and whose financial activities are reported
in the annual financial statement of the state or are included in
the annual Governor's Budget, including, but not limited to, the
California State University and the University of California.
   (k) "System" or "FISCal system" means a single integrated
financial management system for the state that encompasses the
management of resources and dollars in the areas of budgeting,
accounting, procurement, cash management, financial management,
financial reporting, cost accounting, asset management, project
accounting, grant management, and human resources management, as
included in the approved FISCal Project documents.
   15849.22.  (a) (1) To serve the best interests of the state by
optimizing the financial business management of the state, the
Department of Finance, the Controller, the Treasurer, and the
Department of General Services shall collaboratively develop,
implement, utilize, maintain, and operate the FISCal system. The
development of the FISCal system should ensure best business
practices, embrace opportunities to reengineer the state's business
processes to leverage the inherent efficiencies in enterprise
resource planning tools, and encompass the management of resources
and funds in the areas of budgeting, accounting, procurement, cash
management, financial management, financial reporting, cost
accounting, asset management, project accounting, grant management,
and human resources management.
   (2) (A) Except as specified in subparagraph (B), the FISCal
Project Office in the Department of Finance shall implement the
requirements of paragraph (1).
   (B) Upon the establishment of an Office of the Financial
Information System for California, the Office of the Financial
Information System for California shall implement the requirements of
paragraph (1), and the FISCal Project Office in the Department of
Finance shall no longer implement those requirements.
   (b) (1) All state departments and agencies shall use the FISCal
system. The FISCal system shall replace any existing central or
departmental systems duplicative of the functionality of the FISCal
system.
   (2) The FISCal system shall first be developed and used in
partnership with a select number of departments, including the
officers and departments identified in subdivision (a). Once the
FISCal system has developed end-to-end processes that will meet the
financial management needs of all state departments and agencies and
have proven to be effective, operationally efficient, and secure, the
FISCal system shall be implemented, in phases, at all remaining
state departments and agencies.
   (c) The Legislature intends that the FISCal system meet the
following objectives:
   (1) Replace the state's aging legacy financial management systems
while the workforce with knowledge of those systems is still present
and able to facilitate the transition to a standardized, modernized,
and supportable system that is independent of institutional memory.
   (2) Increase transparency to provide a better basis for
decisionmaking and the sharing of knowledge with the public, the
state's business partners, and the Legislature.
   (3) Provide timely, accurate, complete, and integrated financial
data.
   (4) Streamline government operations by giving managers,
end-users, and stakeholders easy access to timely and accurate
information.
   (5) Eliminate redundant systems and processes by integrating all
financial information into a single system.
   (6) Increase fiscal accountability and control at all levels of
state government.
   (7) Automate and standardize reporting mechanisms.
   (8) Support project, grant, and activity-based reporting at
multiple levels.
   (9) Provide timely and comprehensive information to improve cash
management.
   (10) Permit state departments and agencies to shift their efforts
from processing and reconciliation of financial information to
analysis.
   (11) Provide the ability to timely and efficiently perform
management and analysis of system data.
   (12) Support the state's succession planning for much of the
financial management workforce through system modernization.
   (d) (1) The Legislature recognizes that the FISCal system will be
developed in the departments listed in paragraph (1) of subdivision
(a) and in a series of waves described more fully in the Approved
FISCal Project documents. Wave One shall consist of the Department of
Social Services, the Board of Equalization, the Department of
Justice, and the Department of Parks and Recreation. "Phase One" of
the FISCal system shall consist of the Wave One departments listed in
this paragraph and the departments and officers listed in paragraph
(1) of subdivision (a). "Phase Two" of the FISCal system shall
consist of all the subsequent waves described in the Approved FISCal
Project documents.
   (2) Implementation of the FISCal system shall be limited to Phase
One and to the activities described in paragraph (3) until both of
the following conditions are met:
   (A) The report described in subdivision (e) has been submitted to
the Legislature.
   (B) The Legislature provides express authorization to proceed with
Phase Two implementation in the annual Budget Act or other statute.
   (3) Until legislative approval for Phase Two implementation is
provided pursuant to paragraph (2), preparation activities for Phase
Two implementation shall be limited to existing Phase One project
resources and shall not disrupt the mission and operations of Phase
Two departments.
   (e) By March 1 of the year following the year in which Phase One
is implemented the office shall submit a report to the Legislature
that includes, but is not limited to, the following matters:
   (1) Information about the results of the business process
reengineering and software configuration in the Department of
Finance, the Department of General Services, the Controller, and the
Treasurer.
   (2) The results of user acceptance testing and system
implementation in the Department of Social Services, the Board of
Equalization, the Department of Justice, and the Department of Parks
and Recreation.
   (3) Lessons learned during Phase One implementation and their
impact on subsequent FISCal system activities.
   (4) Documentation of any systems or manual processes supplanted by
Phase One of FISCal system implementation.
   (f) (1) Throughout the development of the FISCal system, the
Bureau of State Audits shall independently monitor the FISCal system
as deemed appropriate by the State Auditor. The bureau's independent
monitoring of the FISCal system shall include, but not be limited to,
the following duties:
   (A) Monitoring the contract for independent project oversight
(IPO) and independent verification and validation (IV&V) services
relating to the FISCal system.
   (B) Assessing whether concerns about the FISCal project raised by
the IPO and IV&V are being addressed by the office and the steering
committee of the office.
   (C) Assessing whether the FISCal system is progressing timely and
within its budget.
   (2) The bureau shall report, at a minimum, annually prior to
January 10, on the FISCal system activities that the bureau deems
appropriate to monitor pursuant to this subdivision in a manner
consistent with Chapter 6.5 (commencing with Section 8543) of
Division 1.
   (3) Nothing in this subdivision shall supersede or compromise the
Chief Information Officer's oversight authority and responsibilities
with respect to the FISCal system.
   15849.24.  The board may issue bonds, notes, or certificates to
finance and to refinance the costs of the FISCal system pursuant to
this chapter and this part. All of the provisions of this part apply
to this chapter except Chapter 3 (commencing with Section 15815),
Section 15845 and any requirements of this part regarding the Public
Buildings Construction Fund, Section 15848, Section 15849.2, and any
other exceptions otherwise set forth in this chapter. Proceeds from
the bonds, notes, or certificates may be used to repay any interim
financing for the costs of the FISCal system. Proceeds from the
bonds, notes, or certificates may be used to pay for the cost of the
FISCal system, for all additional costs authorized by Section
15849.6, and for the cost of providing security or liquidity for the
bonds, notes, or certificates issued pursuant to this chapter and
this part. Proceeds from the bonds, notes, or certificates shall not
be used for the ongoing operation and maintenance of the FISCal
system.
   15849.26.  (a) The board may issue bonds, notes, or certificates
in accordance with this chapter and this part to finance up to the
amount of two hundred seventy-seven million dollars ($277,000,000) of
the cost of the FISCal system.
   (b) Notwithstanding subdivision (a), if subsequently authorized by
the Legislature, the board may issue bonds, notes, or certificates
to finance the cost of the FISCal system in excess of the limitation
described in subdivision (a). However, in no event shall the total
amount of the cost of the FISCal system financed exceed one billion
three hundred sixty-two million dollars ($1,362,000,000).
   (c) The monetary limitations set forth in subdivisions (a) and (b)
shall not limit the amount of any bonds, notes, or certificates
issued by the board to refinance the cost of the FISCal system.
   (d) It is the intent of the Legislature that, to the extent
possible, the cost of the FISCal system be paid for by appropriations
made by the Legislature from the General Fund and from special fund
moneys and by federal funding rather than by the issuance of bonds,
notes, or certificates authorized by this chapter.
   (e) Nothing in this chapter shall be construed as a mechanism to
fund a year-end state budget deficit as that term is used in Section
1.3 of Article XVI of the California Constitution. None of the
proceeds of the bonds, notes, or certificates issued pursuant to this
chapter and this part may be used to fund a year-end state budget
deficit as defined in Section 1.3 of Article XVI of the California
Constitution.
   15849.28.  (a) Notwithstanding Section 15849.1 and any other
provision of law permitting withdrawal of funds from the General Fund
to pay for the cost of the FISCal system, the Department of Finance
may authorize loans from the General Fund that may, as determined by
the Director of Finance, be made without interest. The board may also
request a loan from the Pooled Money Investment Account to pay for
the cost of the FISCal system.
   (b) The Controller shall deposit the loan proceeds in the FISCal
Internal Services Fund, created pursuant to Section 15849.35, and
those moneys shall be expended for the costs of the FISCal system or
to repay other loans obtained for the cost of the FISCal system or
for both purposes. The loan amounts shall not exceed the amount of
any unsold bonds, notes, or certificates that the board has, by
resolution, authorized to be sold for the purposes of this chapter.
   15849.30.  The board and the office may execute and deliver any
lease, contract, agreement, or other document to permit the issuance
or securitization of bonds, notes, or certificates to finance or
refinance the cost of the FISCal system. Any such lease, contract,
and agreement, as well as any bond, note, and certificate, and any
disclosure                                              document
marketing those bonds, notes, or certificates shall contain language
to the effect that the obligation to pay debt service for the FISCal
system is subject to, and conditioned upon, the Legislature annually
appropriating funds and that the Legislature is not required to
appropriate any funds for that purpose.
   15849.34.  (a) After January 1, 2009, the office shall establish
rates and a payment schedule for state departments and agencies to
use the FISCal system, and may enter into any necessary agreements
with those state departments and agencies for the payment for FISCal
system usage and services.
   (b) Rates for use of the FISCal system shall include the costs of
the FISCal system, the ongoing maintenance and operation of the
FISCal system, and debt service for the FISCal system. Debt service
for the FISCal system shall be considered an operation cost for
accounting purposes. The rates shall be based on an interim cost
allocation plan until statistically valid usage data is available to
establish a transaction-based cost allocation plan.
   (c) The office shall submit the proposed rates, the methodology
used to develop the rates, and the payment schedule to the Department
of Finance during the regular budget development processes for
review and approval. Any changes in rates or methodology shall be
submitted by the office concurrently with budget requests it submits
to the Department of Finance.
   15849.35.  (a) The FISCal Internal Services Fund and the FISCal
Support Fund are hereby created in the State Treasury.
   (b) All funds received pursuant to Section 15849.34 shall be
deposited in the FISCal Support Fund. Upon appropriation by the
Legislature, funds in the FISCal Support Fund shall be transferred by
the Controller into the FISCal Internal Services Fund.
   (c) The Controller shall create within the FISCal Internal
Services Fund an Operations and Maintenance Subaccount. Funds in this
subaccount shall be available for operations and maintenance of the
FISCal system including, but not limited to, administrative expenses
of the board, the office, or for other purposes authorized by this
chapter or in any related indenture or agreement for FISCal services.

   (d) The Controller shall create within the FISCal Internal
Services Fund a Development Subaccount. Funds in this subaccount
shall be available for costs of the FISCal system.
   (e) (1) Notwithstanding Section 13340, the funds in the FISCal
Internal Services Fund and the Development Subaccount and the
Operations and Maintenance Subaccount in that fund are hereby
continuously appropriated to the office, without regard to fiscal
year for the development, operations, and maintenance of the FISCal
System.
   (2) Notwithstanding any other provision of law, funds shall be
available for payment of the debt service for the FISCal system only
upon annual appropriation by the Legislature.
   (f) Moneys in the FISCal Support Fund are available for cashflow
borrowing by the General Fund pursuant to Section 16310.
   15849.36.  (a) The Controller shall create the FISCal System
Development Fund in the State Treasury.
   (b) The Controller shall create within the FISCal System
Development Fund separate accounts for the proceeds of each series of
bonds, notes, or certificates authorized pursuant to this chapter
and this part. The money deposited in each separate account may be
expended for the costs of the FISCal system and for additional costs
authorized by Section 15849.24.
   (c) Moneys in the FISCal System Development Fund shall be
transferred by the Controller to the Development Subaccount in the
FISCal Internal Services Fund for the 2008-09 fiscal year for the
costs of the FISCal system. Transfers shall be made by the Controller
in subsequent fiscal years from the FISCal System Development Fund
to the Development Subaccount in the FISCal Internal Services Fund
upon annual appropriation by the Legislature.
   15849.38.  (a) The Controller shall create the FISCal Debt Service
Fund within the State Treasury. Moneys in this fund shall be
available only upon annual appropriation by the Legislature for the
payment of debt service for the FISCal system that is scheduled to be
paid in the fiscal year during which the appropriation is made and
for the redemption or retirement of bonds, notes, or certificates
issued pursuant to this chapter and this part.
   (b) Moneys for the payment of debt service for the FISCal System
shall be transferred by the Controller from the Operations and
Maintenance Subaccount of the FISCal Internal Services Fund to the
FISCal Debt Service Fund only upon annual appropriation by the
Legislature.
  SEC. 39.  Section 15849.6 of the Government Code is amended to
read:
   15849.6.  Notwithstanding any provision of this part to the
contrary, the board may issue bonds, notes, or other obligations to
finance the acquisition or construction of a public building,
facility, or equipment as authorized by the Legislature, in the total
amount authorized by the Legislature, and any additional amount
authorized by the board to pay the cost of financing. This additional
amount may include interest during acquisition or interest prior to,
during, and for a period of six months after construction of the
public building, facility, or equipment, interest payable on any
interim loan for the public building, facility, or equipment from the
General Fund or from the Pooled Money Investment Account, a
reasonably required reserve fund, and the costs of issuance of any
interim financing and permanent financing after completion of the
construction or acquisition of the public building, facility, or
equipment.
   This section shall be applicable to, but not limited to, bonds,
notes, or obligations of the board that were authorized by
appropriations of the Legislature made prior to the effective date of
this section.
  SEC. 40.  Section 16142 of the Government Code is amended to read:
   16142.  (a) The Secretary of the Resources Agency shall direct the
Controller to pay annually out of the funds appropriated by Section
16140, to each eligible county, city, or city and county, the
following amounts for each acre of land within its regulatory
jurisdiction that is assessed pursuant to Section 423, 423.3, 423.4,
or 423.5, or 426 if it was previously assessed under Section 423.4,
of the Revenue and Taxation Code:
   (1) Five dollars ($5) for prime agricultural land, as defined in
Section 51201.
   (2) One dollar ($1) for all land, other than prime agricultural
land, which is devoted to open-space uses of statewide significance,
as defined in Section 16143.
   (b) The amount per acre in paragraph (1) of subdivision (a) may be
increased by the Secretary of the Resources Agency to a figure which
would offset any savings due to a more restrictive determination by
the secretary as to what land is devoted to open-space use of
statewide significance.
   (c) The amount per acre in subdivision (a) shall only be paid for
10 years from the date that the land was first assessed pursuant to
Section 426 of the Revenue and Taxation Code, if it was previously
assessed under Section 423.4 of that code.
   (d) Notwithstanding any other provision of law, for the 2008-09
fiscal year and each fiscal year thereafter, the Controller shall
reduce, by 10 percent, any payment made pursuant to this subdivision.

  SEC. 41.  Section 16142.1 of the Government Code is amended to
read:
   16142.1.  (a) In lieu of the payments made pursuant to Section
16142, in a county that has adopted farmland security zones pursuant
to Section 51296, the Secretary of the Resources Agency shall direct
the Controller to pay annually out of the funds appropriated by
Section 16140, to each eligible county, city, or city and county, the
following amount for each acre of land within its regulatory
jurisdiction that is assessed pursuant to Section 423.4 or 426 of the
Revenue and Taxation Code, if it was previously assessed under
Section 423.4 of that code:
   Eight dollars ($8) for land that is within, or within three miles
of the boundaries of the sphere of influence of, each incorporated
city.
   (b) The amount per acre in subdivision (a) shall only be paid for
10 years from the date that the land was first assessed pursuant to
Section 426 of the Revenue and Taxation Code, if it was previously
assessed under Section 423.4 of that code. The appropriation
authorized by this subdivision shall not exceed one hundred thousand
dollars ($100,000) per year until 2005.
   (c) Notwithstanding any other provision of law, for the 2008-09
fiscal year and each fiscal year thereafter, the Controller shall
reduce, by 10 percent, any payments made pursuant to this
subdivision.
  SEC. 42.  Section 16144 of the Government Code is amended to read:
   16144.  On or before October 31 each year, the governing body of
each county, city, or city and county shall report to the Secretary
of the Resources Agency the number of acres of land under its
regulatory jurisdiction which qualify for state payments pursuant to
the various categories enumerated in Section 16142, together with
supporting documentation as the secretary by regulation may require.
The secretary, after reviewing the report and determining the
eligibility of the local government to receive payment and the actual
amount to which it is entitled, shall certify that amount to the
Controller for payment, and the Controller shall make the payment on
or before June 30, but no earlier than April 20, of each year.
   The secretary may make supplemental reports to the Controller as
he or she deems necessary throughout the year to give effect to new
or additional information received from local governing bodies,
correct errors, and dispose of contested or conditional situations.
Upon receiving the reports, the Controller shall pay any amount
certified therein, and may withhold and deduct any certified
overpayment from the amount that would otherwise be paid to the local
government in the next succeeding year, including any cancellation
fees that have not been collected and transmitted pursuant to Section
51283.
  SEC. 43.  Section 19816.22 is added to the Government Code, to
read:
   19816.22.  (a) It is the intent of the Legislature in providing
funds for the Human Resources Modernization Project, within the
Department of Personnel Administration's budget, to provide every
state agency with the tools necessary to recruit and retain its
personnel. The Human Resources Modernization Project integrates the
competencies, skills, and abilities of each employee across all human
resource programs. State agencies will use the services developed by
the Human Resources Modernization Project to recruit, assess,
select, and develop their personnel, as well as to plan for the
future, with performance management and succession applications.
   (b) Authority is hereby granted, to the extent otherwise permitted
by law, to the Department of Personnel Administration to assess
special funds, bond funds, and nongovernmental cost funds in
sufficient amounts to support the cost of the Human Resources
Modernization Project described in subdivision (a). The Director of
Finance shall determine the amount of the total assessment for each
fund periodically. Upon order of the Director of the Department of
Finance, the moneys authorized pursuant to this act shall be
transferred by the Controller, as needed, from each fund for a total
amount not to exceed the amounts authorized in the annual Budget Act.

  SEC. 44.  Section 22877 of the Government Code is amended to read:
   22877.  (a) As used in this section, the following definitions
shall apply:
   (1) "Coinsurance" means the provision of a health benefit plan
design that requires the health benefit plan and state employee or
annuitant to share the cost of hospital or medical expenses at a
specified ratio.
   (2) "Deductible" means the annual amount of out-of-pocket medical
expenses that a state employee or annuitant must pay before the
health benefit plan begins paying for expenses.
   (3) "Program" means the Rural Health Care Equity Program.
   (4) "Rural area" means an area in which there is no board-approved
health maintenance organization plan available for enrollment by
state employees or annuitants residing in the area.
   (b) (1) The Rural Health Care Equity Program is hereby established
for the purpose of funding the subsidization and reimbursement of
premium costs, deductibles, coinsurance, and other out-of-pocket
health care expenses paid by employees living in rural areas that
would otherwise be covered if the state employee was enrolled in a
board-approved health maintenance organization plan. The program
shall be administered by the Department of Personnel Administration
or by a third-party administrator approved by the Department of
Personnel Administration in a manner consistent with all applicable
state and federal laws. The board shall determine the rural area for
each subsequent fiscal year, at the same time that premiums for
health maintenance organization plans are approved.
   (2) Separate accounts shall be maintained within the program for
all of the following:
   (A) Employees, as defined in subdivision (c) of Section 3513.
   (B) Excluded employees, as defined in subdivision (b) of Section
3527.
   (c) Moneys in the program shall be allocated to the respective
accounts as follows:
   (1) The contribution provided by the state with respect to each
employee, as defined in subdivision (c) of Section 3513, who lives in
a rural area and is otherwise eligible, shall be an amount
determined through the collective bargaining process.
   (2) The contribution provided by the state with respect to each
excluded employee, as defined in subdivision (b) of Section 3527, who
lives in a rural area and is otherwise eligible, shall be an amount
equal to, but not to exceed, the amount contributed pursuant to
paragraph (1).
   (3) If an employee enters or leaves service with the state during
a fiscal year, contributions for the employee shall be made on a pro
rata basis. A similar computation shall be used for anyone entering
or leaving the bargaining unit, including a person who enters the
bargaining unit by promotion during a fiscal year.
   (d) Each fund of the State Treasury, other than the General Fund,
shall reimburse the General Fund for any sums allocated pursuant to
subdivision (c) for employees whose compensation is paid from that
fund. That reimbursement shall be accomplished using the following
methodology:
   (1) On or before December 1 of each year, the Department of
Personnel Administration shall provide a list of active state
employees who participated in the program during the previous fiscal
year to each employing department.
   (2) On or before January 15 of each year, each department that
employed an active state employee identified by the Department of
Personnel Administration as a participant in the program shall
provide the Department of Personnel Administration with a list of the
funds used to pay each employee's salary, along with the proportion
of each employee's salary attributable to each fund.
   (3) Using the information provided by the employing departments,
the Department of Personnel Administration shall compile a list of
program payments attributable to each fund. On or before February 15
of each year, the Department of Personnel Administration shall
transmit this list to the Department of Finance.
   (4) The Department of Finance shall certify to the Controller the
amount to be transferred from the unencumbered balance of each fund
to the General Fund.
   (5) The Controller shall transfer to the General Fund from the
unencumbered balance of each impacted fund the amount specified by
the Department of Finance.
   (6) To ensure the equitable allocation of costs, the Director of
the Department of Personnel Administration or the Director of Finance
may require an audit of departmental reports.
   (e) Notwithstanding any other provision of law and subject to the
availability of funds, moneys within the program shall be disbursed
for the benefit of eligible employees. The disbursements shall
subsidize the preferred provider plan premiums for the employee by an
amount equal to the difference between the weighted average of
board-approved health maintenance organization premiums and the
lowest board-approved preferred provider plan premium available under
this part, and reimburse the employee for a portion or all of his or
her incurred deductible, coinsurance, and other out-of-pocket
health-related expenses that would otherwise be covered if the
employee and his or her family members were enrolled in a
board-approved health maintenance organization plan. These subsidies
and reimbursements shall be provided as determined by the Department
of Personnel Administration, which may include, but is not limited
to, a supplemental insurance plan, a medical reimbursement account,
or a medical spending account plan.
   (f) Subject to subdivision (h), moneys remaining in an account of
the program at the end of any fiscal year shall remain in the account
for use in subsequent fiscal years, until the account is terminated.
Moneys remaining in a program account upon termination, after
payment of all expenses and claims incurred prior to the date of
termination, shall be deposited in the General Fund.
   (g) The Legislature finds and declares that the program is
established for the exclusive benefit of employees, annuitants, and
family members.
   (h) This section shall be operative only to the extent that
funding is provided in the annual Budget Act or another statute.
   (i) This section shall cease to be operative on January 1, 2012,
or on an earlier date if the board makes a formal determination that
health maintenance organization plans are no longer the most
cost-effective health benefit plans offered by the board.
  SEC. 45.  Section 22883 of the Government Code is amended to read:
   22883.  (a) Each fund in the State Treasury, other than the
General Fund and the Central Service Cost Recovery Fund, shall be
charged a fair share of the employer contribution for annuitants in
accordance with Article 2 (commencing with Section 11270) of Chapter
3 of Part 1 of Division 3.
   (b) From each fund in the State Treasury, other than the General
Fund and the Central Service Cost Recovery Fund, there is hereby
appropriated monthly the employer contribution required under
Sections 22870, 22871, and 22885 for all employees whose compensation
is paid from that fund.
  SEC. 46.  Section 30061 of the Government Code is amended to read:
   30061.  (a) There shall be established in each county treasury a
Supplemental Law Enforcement Services Fund (SLESF), to receive all
amounts allocated to a county for purposes of implementing this
chapter.
   (b) In any fiscal year for which a county receives moneys to be
expended for the implementation of this chapter, the county auditor
shall allocate the moneys in the county's SLESF, including any
interest or other return earned on the investment of those moneys,
within 30 days of the deposit of those moneys into the fund, and
shall allocate those moneys in accordance with the requirements set
forth in this subdivision. However, the auditor shall not transfer
those moneys to a recipient agency until the Supplemental Law
Enforcement Oversight Committee certifies receipt of an approved
expenditure plan from the governing board of that agency. The moneys
shall be allocated as follows:
   (1) Five and fifteen-hundredths percent to the county sheriff for
county jail construction and operation. In the case of Madera, Napa,
and Santa Clara Counties, this allocation shall be made to the county
director or chief of corrections.
   (2) Five and fifteen-hundredths percent to the district attorney
for criminal prosecution.
   (3) Thirty-nine and seven-tenths percent to the county and the
cities within the county, and, in the case of San Mateo, Kern,
Siskiyou, and Contra Costa Counties, also to the Broadmoor Police
Protection District, the Bear Valley Community Services District, the
Stallion Springs Community Services District, the Lake Shastina
Community Services District, and the Kensington Police Protection and
Community Services District, in accordance with the relative
population of the cities within the county and the unincorporated
area of the county, and the Broadmoor Police Protection District in
the County of San Mateo, the Bear Valley Community Services District
and the Stallion Springs Community Services District in Kern County,
the Lake Shastina Community Services District in Siskiyou County, and
the Kensington Police Protection and Community Services District in
Contra Costa County, as specified in the most recent January estimate
by the population research unit of the Department of Finance, and as
adjusted to provide a grant of at least one hundred thousand dollars
($100,000) to each law enforcement jurisdiction. For a newly
incorporated city whose population estimate is not published by the
Department of Finance, but that was incorporated prior to July 1 of
the fiscal year in which an allocation from the SLESF is to be made,
the city manager, or an appointee of the legislative body, if a city
manager is not available, and the county administrative or executive
officer shall prepare a joint notification to the Department of
Finance and the county auditor with a population estimate reduction
of the unincorporated area of the county equal to the population of
the newly incorporated city by July 15, or within 15 days after the
Budget Act is enacted, of the fiscal year in which an allocation from
the SLESF is to be made. No person residing within the Broadmoor
Police Protection District, the Bear Valley Community Services
District, the Stallion Springs Community Services District, the Lake
Shastina Community Services District, or the Kensington Police
Protection and Community Services District shall also be counted as
residing within the unincorporated area of the County of San Mateo,
Kern, Siskiyou, or Contra Costa, or within any city located within
those counties. The county auditor shall allocate a grant of at least
one hundred thousand dollars ($100,000) to each law enforcement
jurisdiction. Moneys allocated to the county pursuant to this
subdivision shall be retained in the county SLESF, and moneys
allocated to a city pursuant to this subdivision shall be deposited
in an SLESF established in the city treasury.
   (4) Fifty percent to the county or city and county to implement a
comprehensive multiagency juvenile justice plan as provided in this
paragraph and to the Board of Corrections for administrative
purposes. Funding for the Board of Corrections, as determined by the
Department of Finance, shall not exceed two hundred seventy-five
thousand dollars ($275,000). For the 2003-04 fiscal year, of the two
hundred seventy-five thousand dollars ($275,000), up to one hundred
seventy-six thousand dollars ($176,000) may be used for juvenile
facility inspections. The juvenile justice plan shall be developed by
the local juvenile justice coordinating council in each county and
city and county with the membership described in Section 749.22 of
the Welfare and Institutions Code. If a plan has been previously
approved by the Board of Corrections, the plan shall be reviewed and
modified annually by the council. The plan or modified plan shall be
approved by the county board of supervisors, and in the case of a
city and county, the plan shall also be approved by the mayor. The
plan or modified plan shall be submitted to the Board of Corrections
by May 1, 2002, and annually thereafter.
   (A) Juvenile justice plans shall include, but not be limited to,
all of the following components:
   (i) An assessment of existing law enforcement, probation,
education, mental health, health, social services, drug and alcohol,
and youth services resources that specifically target at-risk
juveniles, juvenile offenders, and their families.
   (ii) An identification and prioritization of the neighborhoods,
schools, and other areas in the community that face a significant
public safety risk from juvenile crime, such as gang activity,
daylight burglary, late-night robbery, vandalism, truancy, controlled
substances sales, firearm-related violence, and juvenile substance
abuse and alcohol use.
   (iii) A local juvenile justice action strategy that provides for a
continuum of responses to juvenile crime and delinquency and
demonstrates a collaborative and integrated approach for implementing
a system of swift, certain, and graduated responses for at-risk
youth and juvenile offenders.
   (iv) Programs identified in clause (iii) that are proposed to be
funded pursuant to this subparagraph, including the projected amount
of funding for each program.
   (B) Programs proposed to be funded shall satisfy all of the
following requirements:
   (i) Be based on programs and approaches that have been
demonstrated to be effective in reducing delinquency and addressing
juvenile crime for any elements of response to juvenile crime and
delinquency, including prevention, intervention, suppression, and
incapacitation.
   (ii) Collaborate and integrate services of all the resources set
forth in clause (i) of subparagraph (A), to the extent appropriate.
   (iii) Employ information sharing systems to ensure that county
actions are fully coordinated, and designed to provide data for
measuring the success of juvenile justice programs and strategies.
   (iv) Adopt goals related to the outcome measures that shall be
used to determine the effectiveness of the local juvenile justice
action strategy.
   (C) The plan shall also identify the specific objectives of the
programs proposed for funding and specified outcome measures to
determine the effectiveness of the programs and contain an accounting
for all program participants, including those who do not complete
the programs. Outcome measures of the programs proposed to be funded
shall include, but not be limited to, all of the following:
   (i) The rate of juvenile arrests per 100,000 population.
   (ii) The rate of successful completion of probation.
   (iii) The rate of successful completion of restitution and
court-ordered community service responsibilities.
   (iv) Arrest, incarceration, and probation violation rates of
program participants.
   (v) Quantification of the annual per capita costs of the program.
   (D) The Board of Corrections shall review plans or modified plans
submitted pursuant to this paragraph within 30 days upon receipt of
submitted or resubmitted plans or modified plans. The board shall
approve only those plans or modified plans that fulfill the
requirements of this paragraph, and shall advise a submitting county
or city and county immediately upon the approval of its
                             plan or modified plan. The board shall
offer, and provide, if requested, technical assistance to any county
or city and county that submits a plan or modified plan not in
compliance with the requirements of this paragraph. The SLESF shall
only allocate funding pursuant to this paragraph upon notification
from the board that a plan or modified plan has been approved.
   (E) To assess the effectiveness of programs funded pursuant to
this paragraph using the program outcome criteria specified in
subparagraph (C), the following periodic reports shall be submitted:
   (i) Each county or city and county shall report, beginning October
15, 2002, and annually each October 15 thereafter, to the county
board of supervisors and the Board of Corrections, in a format
specified by the Board of Corrections, on the programs funded
pursuant to this chapter and program outcomes as specified in
subparagraph (C).
   (ii) The Board of Corrections shall compile the local reports and,
by March 15, 2003, and annually thereafter, make a report to the
Governor and the Legislature on program expenditures within each
county and city and county from the appropriation for the purposes of
this paragraph, on the outcomes as specified in subparagraph (C) of
the programs funded pursuant to this paragraph and the statewide
effectiveness of the comprehensive multiagency juvenile justice
plans.
   (c) Subject to subdivision (d), for each fiscal year in which the
county, each city, the Broadmoor Police Protection District, the Bear
Valley Community Services District, the Stallion Springs Community
Services District, the Lake Shastina Community Services District, and
the Kensington Police Protection and Community Services District
receive moneys pursuant to paragraph (3) of subdivision (b), the
county, each city, and each district specified in this subdivision
shall appropriate those moneys in accordance with the following
procedures:
   (1) In the case of the county, the county board of supervisors
shall appropriate existing and anticipated moneys exclusively to
provide frontline law enforcement services, other than those services
specified in paragraphs (1) and (2) of subdivision (b), in the
unincorporated areas of the county, in response to written requests
submitted to the board by the county sheriff and the district
attorney. Any request submitted pursuant to this paragraph shall
specify the frontline law enforcement needs of the requesting entity,
and those personnel, equipment, and programs that are necessary to
meet those needs. The board shall, at a public hearing held at a time
determined by the board in each year that the Legislature
appropriates funds for purposes of this chapter, or within 30 days
after a request by a recipient agency for a hearing if the funds have
been received by the county from the state prior to that request,
consider and determine each submitted request within 60 days of
receipt, pursuant to the decision of a majority of a quorum present.
The board shall consider these written requests separate and apart
from the process applicable to proposed allocations of the county
general fund.
   (2) In the case of a city, the city council shall appropriate
existing and anticipated moneys exclusively to fund frontline
municipal police services, in accordance with written requests
submitted by the chief of police of that city or the chief
administrator of the law enforcement agency that provides police
services for that city. These written requests shall be acted upon by
the city council in the same manner as specified in paragraph (1)
for county appropriations.
   (3) In the case of the Broadmoor Police Protection District within
the County of San Mateo, the Bear Valley Community Services District
or the Stallion Springs Community Services District within Kern
County, the Lake Shastina Community Services District within Siskiyou
County, or the Kensington Police Protection and Community Services
District within Contra Costa County, the legislative body of that
special district shall appropriate existing and anticipated moneys
exclusively to fund frontline municipal police services, in
accordance with written requests submitted by the chief administrator
of the law enforcement agency that provides police services for that
special district. These written requests shall be acted upon by the
legislative body in the same manner specified in paragraph (1) for
county appropriations.
   (d) For each fiscal year in which the county, a city, or the
Broadmoor Police Protection District within the County of San Mateo,
the Bear Valley Community Services District or the Stallion Springs
Community Services District within Kern County, the Lake Shastina
Community Services District within Siskiyou County, or the Kensington
Police Protection and Community Services District within Contra
Costa County receives any moneys pursuant to this chapter, in no
event shall the governing body of any of those recipient agencies
subsequently alter any previous, valid appropriation by that body,
for that same fiscal year, of moneys allocated to the county or city
pursuant to paragraph (3) of subdivision (b).
   (e) The Controller shall allocate funds, upon their appropriation
by the Legislature in the annual Budget Act, to local jurisdictions
for public safety in accordance with this section as calculated by
the Director of Finance. The Controller shall allocate these funds in
four equal installments, to be paid in September, December, March,
and June of each fiscal year.
   (f) Funds received pursuant to subdivision (b) shall be expended
or encumbered in accordance with this chapter no later than June 30
of the following fiscal year. A local agency that has not met this
requirement shall remit unspent SLESF moneys to the Controller for
deposit into the General Fund.
   (g) If a county, a city, a city and county, or a qualifying
special district does not comply with the requirements of this
chapter to receive an SLESF allocation, the Controller shall revert
those funds to the General Fund.
  SEC. 47.  Section 63035 of the Government Code is amended to read:
   63035.  The bank shall, not later than November 1 of each year,
submit to the Governor and the Joint Legislative Budget Committee a
report of its activities pursuant to this division for the preceding
fiscal year. The report shall include all of the following:
   (a) (1) A listing of applications accepted, including a
description of the expected employment impact of each project.
   (2) A separate summary of applications for the Infrastructure
State Revolving Fund Program, including a summary of the number of
preliminary applications that did not receive funding and the reason
the applicant did not qualify.
   (b) A specification of bonds sold and interest rates thereon.
   (c) The amount of other public and private funds leveraged by the
assistance provided.
   (d) A report of revenues and expenditures for the preceding fiscal
year, including all of the bank's costs. The information provided
pursuant to this subdivision shall include, but need not be limited
to, both of the following:
   (1) The amount and source of total bank revenues. Revenues shall
be shown by main categories of revenues, including interest earnings,
fees collected, and bond proceeds, for each bank program.
   (2) The amount and type of total bank expenditures. Expenditures
shall be shown by major categories of expenditures, including loans
provided, debt service payments, and program support costs, for each
bank program.
   (e) A projection of the bank's needs and requirements for the
coming year.
   (f) Recommendations for changes in state and federal law necessary
to meet the objectives of this division.
  SEC. 48.  Section 76104.6 of the Government Code is amended to
read:
   76104.6.  (a) (1) Except as otherwise provided in this section,
for the purpose of implementing the DNA Fingerprint, Unsolved Crime
and Innocence Protection Act, there shall be levied an additional
penalty of one dollar for every ten dollars ($10), or part of ten
dollars ($10), in each county upon every fine, penalty, or forfeiture
imposed and collected by the courts for all criminal offenses,
including all offenses involving a violation of the Vehicle Code or
any local ordinance adopted pursuant to the Vehicle Code.
   (2) The penalty imposed by this section shall be collected
together with and in the same manner as the amounts established by
Section 1464 of the Penal Code. These moneys shall be taken from
fines and forfeitures deposited with the county treasurer prior to
any division pursuant to Section 1463 of the Penal Code. The board of
supervisors shall establish in the county treasury a DNA
Identification Fund into which shall be deposited the collected
moneys pursuant to this section. The moneys of the fund shall be
allocated pursuant to subdivision (b).
   (3) This additional penalty does not apply to the following:
   (A) Any restitution fine.
   (B) Any penalty authorized by Section 1464 of the Penal Code or
this chapter.
   (C) Any parking offense subject to Article 3 (commencing with
Section 40200) of Chapter 1 of Division 17 of the Vehicle Code.
   (D) The state surcharge authorized by Section 1465.7 of the Penal
Code.
   (b) (1) The fund moneys described in subdivision (a), together
with any interest earned thereon, shall be held by the county
treasurer separate from any funds subject to transfer or division
pursuant to Section 1463 of the Penal Code. Deposits to the fund may
continue through and including the 20th year after the initial
calendar year in which the surcharge is collected, or longer if and
as necessary to make payments upon any lease or leaseback arrangement
utilized to finance any of the projects specified herein.
   (2) On the last day of each calendar quarter of the year specified
in this subdivision, the county treasurer shall transfer fund moneys
in the county's DNA Identification Fund to the state Controller for
credit to the state's DNA Identification Fund, which is hereby
established in the State Treasury, as follows:
   (A) In the first two calendar years following the effective date
of this section, 70 percent of the amounts collected, including
interest earned thereon;
   (B) In the third calendar year following the effective date of
this section, 50 percent of the amounts collected, including interest
earned thereon;
   (C) In the fourth calendar year following the effective date of
this section and in each calendar year thereafter, 25 percent of the
amounts collected, including interest earned thereon.
   (3) Funds remaining in the county's DNA Identification Fund shall
be used only to reimburse local sheriff or other law enforcement
agencies to collect DNA specimens, samples, and print impressions
pursuant to this chapter; for expenditures and administrative costs
made or incurred to comply with the requirements of paragraph (5) of
subdivision (b) of Section 298 of the Penal Code including the
procurement of equipment and software integral to confirming that a
person qualifies for entry into the Department of Justice DNA
Database and Data Bank Program; and to local sheriff, police,
district attorney, and regional state crime laboratories for
expenditures and administrative costs made or incurred in connection
with the processing, analysis, tracking, and storage of DNA crime
scene samples from cases in which DNA evidence would be useful in
identifying or prosecuting suspects, including the procurement of
equipment and software for the processing, analysis, tracking, and
storage of DNA crime scene samples from unsolved cases.
   (4) The state's DNA Identification Fund shall be administered by
the Department of Justice. Funds in the state's DNA Identification
Fund, upon appropriation by the Legislature, shall be used by the
Attorney General only to support DNA testing in the state and to
offset the impacts of increased testing and shall be allocated as
follows:
   (A) Of the amount transferred pursuant to subparagraph (A) of
paragraph (2) of subdivision (b), 90 percent to the Department of
Justice DNA Laboratory, first, to comply with the requirements of
Section 298.3 of the Penal Code and, second, for expenditures and
administrative costs made or incurred in connection with the
processing, analysis, tracking, and storage of DNA specimens and
samples including the procurement of equipment and software for the
processing, analysis, tracking, and storage of DNA samples and
specimens obtained pursuant to the DNA and Forensic Identification
Database and Databank Act, as amended, and 10 percent to the
Department of Justice Information Bureau Criminal History Unit for
expenditures and administrative costs that have been approved by the
Chief of the Department of Justice Bureau of Forensic Services made
or incurred to update equipment and software to facilitate compliance
with the requirements of subdivision (e) of Section 299.5 of the
Penal Code.
   (B) Of the amount transferred pursuant to subparagraph (B) of
paragraph (2) of subdivision (b), funds shall be allocated by the
Department of Justice DNA Laboratory, first, to comply with the
requirements of Section 298.3 of the Penal Code and, second, for
expenditures and administrative costs made or incurred in connection
with the processing, analysis, tracking, and storage of DNA specimens
and samples including the procurement of equipment and software for
the processing, analysis, tracking, and storage of DNA samples and
specimens obtained pursuant to the DNA and Forensic Identification
Database and Databank Act, as amended.
   (C) Of the amount transferred pursuant to subparagraph (C) of
paragraph (2) of subdivision (b), funds shall be allocated by the
Department of Justice to the DNA Laboratory to comply with the
requirements of Section 298.3 of the Penal Code and for expenditures
and administrative costs made or incurred in connection with the
processing, analysis, tracking, and storage of DNA specimens and
samples including the procurement of equipment and software for the
processing, analysis, tracking, and storage of DNA samples and
specimens obtained pursuant to the DNA and Forensic Identification
Database and Databank Act, as amended.
   (c) On or before April 1 in the year following adoption of this
section, and annually thereafter, the board of supervisors of each
county shall submit a report to the Legislature and the Department of
Justice. The report shall include the total amount of fines
collected and allocated pursuant to this section, and the amounts
expended by the county for each program authorized pursuant to
paragraph (3) of subdivision (b) of this section. The Department of
Justice shall make the reports publicly available on the department's
Web site.
   (d) All requirements imposed on the Department of Justice pursuant
to the DNA Fingerprint, Unsolved Crime and Innocence Protection Act
are contingent upon the availability of funding and are limited by
revenue, on a fiscal year basis, received by the Department of
Justice pursuant to this section and any additional appropriation
approved by the Legislature for purposes related to implementing this
measure.
   (e) Upon approval of the DNA Fingerprint, Unsolved Crime and
Innocence Protection Act, the Legislature shall loan the Department
of Justice General Fund in the amount of $7,000,000 for purposes of
implementing that act. This loan shall be repaid with interest
calculated at the rate earned by the Pooled Money Investment Account
at the time the loan is made. Principal and interest on the loan
shall be repaid in full no later than four years from the date the
loan was made and shall be repaid from revenue generated pursuant to
this section.
   (f) Notwithstanding any other provision of law, the Controller may
use the state's DNA Identification Fund, created pursuant to
paragraph (2) of subdivision (b), for loans to the General Fund as
provided in Sections 16310 and 16381. Any such loan shall be repaid
from the General Fund with interest computed at 110 percent of the
Pooled Money Investment Account rate, with the interest commencing to
accrue on the date the loan is made from the fund. This subdivision
does not authorize any transfer that will interfere with the carrying
out of the object for which the state's DNA Identification Fund was
created.
  SEC. 49.  Section 17928 is added to the Health and Safety Code, to
read:
   17928.  (a) (1) The Department of Housing and Community
Development shall, for building standards submitted to the California
Building Standards Commission for adoption in the 2010 California
Building Code or later, do all the following:
   (A) Review relevant green building guidelines as deemed necessary
by the department when preparing proposed building standards for
submittal.
   (B) Consider proposing as mandatory building standards those green
building features determined by the department to be cost effective
and feasible to promote greener construction.
   (2) Nothing in this subdivision shall be construed to supplant or
otherwise change the existing process for approval and adoption of
building standards through the California Building Standards
Commission.
   (b) (1) The department shall also summarize in a report to the
Legislature no later than September 1 of each year, both of the
following:
   (A) Green building features proposed as building standards during
the prior fiscal year.
   (B) Green building guidelines reviewed pursuant to subdivision (a)
during the prior fiscal year.
   (2) For those items required by this subdivision already included
in other reports provided to the Legislature or generally available,
the department may fulfill this requirement by citing where that
information can be found.
  SEC. 50.  Section 33675 of the Health and Safety Code is amended to
read:
   33675.  (a) The portion of taxes required to be allocated pursuant
to subdivision (b) of Section 33670 shall be allocated and paid to
the agency by the county auditor or officer responsible for the
payment of taxes into the funds of the respective taxing entities
pursuant to the procedure contained in this section.
   (b) Not later than October 1 of each year, for each redevelopment
project for which the redevelopment plan provides for the division of
taxes pursuant to Section 33670, the agency shall file, with the
county auditor or officer described in subdivision (a), a statement
of indebtedness and a reconciliation statement certified by the chief
financial officer of the agency.
   (c) (1) For each redevelopment project for which a statement of
indebtedness is required to be filed, the statement of indebtedness
shall contain all of the following:
   (A) For each loan, advance, or indebtedness incurred or entered
into, all of the following information:
   (i) The date the loan, advance, or indebtedness was incurred or
entered into.
   (ii) The principal amount, term, purpose, interest rate, and total
interest of each loan, advance, or indebtedness.
   (iii) The principal amount and interest due in the fiscal year in
which the statement of indebtedness is filed for each loan, advance,
or indebtedness.
   (iv) The total amount of principal and interest remaining to be
paid for each loan, advance, or indebtedness.
   (B) The sum of the amounts determined under clause (iii) of
subparagraph (A).
   (C) The sum of the amounts determined under clause (iv) of
subparagraph (A).
   (D) The available revenues as of the end of the previous year, as
determined pursuant to paragraph (10) of subdivision (d).
   (2) The agency may estimate the amount of principal or interest,
the interest rate, or term of any loan, advance, or indebtedness if
the nature of the loan, advance, or indebtedness is such that the
amount of principal or interest, the interest rate or term cannot be
precisely determined. The agency may list on a statement of
indebtedness any loan, advance, or indebtedness incurred or entered
into on or before the date the statement is filed.
   (d) For each redevelopment project for which a reconciliation
statement is required to be filed, the reconciliation statement shall
contain all of the following:
   (1) A list of all loans, advances, and indebtedness listed on the
previous year's statement of indebtedness.
   (2) (A) A list of all loans, advances, and indebtedness, not
listed on the previous year's statement of indebtedness, but incurred
or entered into in the previous year and paid in whole or in part
from revenue received by the agency pursuant to Section 33670. This
listing may aggregate loans, advances, and indebtedness incurred or
entered into in the previous year for a particular purpose (such as
relocation expenses, administrative expenses, consultant expenses, or
property management expenses) into a single item in the listing.
   (B) For purposes of this section, any payment made pursuant to
Section 33684 shall be considered as payment against existing
passthrough payment indebtedness as listed on the agency's statement
of indebtedness. If the most recent statement of indebtedness
documents failed to include all or a part of the agency's obligation
to the passthrough payments, those obligations shall be added to the
next statement of indebtedness to be filed and shall include both
current payments plus all future passthrough obligations.
   (3) For each loan, advance, or indebtedness described in paragraph
(1) or (2), all of the following information:
   (A) The total amount of principal and interest remaining to be
paid as of the later of the beginning of the previous year or the
date the loan, advance, or indebtedness was incurred or entered into.

   (B) Any increases or additions to the loan, advance, or
indebtedness occurring during the previous year.
   (C) The amount paid on the loan, advance, or indebtedness in the
previous year from revenue received by the agency pursuant to Section
33670.
   (D) The amount paid on the loan, advance, or indebtedness in the
previous year from revenue other than revenue received by the agency
pursuant to Section 33670.
   (E) The total amount of principal and interest remaining to be
paid as of the end of the previous fiscal year.
   (4) The available revenues of the agency as of the beginning of
the previous fiscal year.
   (5) The amount of revenue received by the agency in the previous
fiscal year pursuant to Section 33670.
   (6) The amount of available revenue received by the agency in the
previous fiscal year other than pursuant to Section 33670.
   (7) The sum of the amounts specified in subparagraph (D) of
paragraph (3), to the extent that the amounts are not included as
available revenues pursuant to paragraph (6).
   (8) The sum of the amounts specified in paragraphs (4), (5), (6),
and (7).
   (9) The sum of the amounts specified in subparagraphs (C) and (D)
of paragraph (3).
   (10) The amount determined by subtracting the amount determined
under paragraph (9) from the amount determined under paragraph (8).
The amount determined pursuant to this paragraph shall be the
available revenues as of the end of the previous fiscal year.
   (e) For the purposes of this section, available revenues shall
include all cash or cash equivalents held by the agency that were
received by the agency pursuant to Section 33670 and all cash or cash
equivalents held by the agency that are irrevocably pledged or
restricted to payment of a loan, advance, or indebtedness that the
agency has listed on a statement of indebtedness. In no event shall
available revenues include funds in the agency's Low and Moderate
Income Housing Fund established pursuant to Section 33334.3. For the
purposes of determining available revenues as of the end of the
1992-93 fiscal year, an agency shall conduct an examination or audit
of its books and records for the 1990-91, 1991-92, and 1992-93 fiscal
years to determine the available revenues as of the end of the
1992-93 fiscal year.
   (f) For the purposes of this section, the amount an agency will
deposit in its Low and Moderate Income Housing Fund established
pursuant to Section 33334.3 shall constitute an indebtedness of the
agency. For the purposes of this section, no loan, advance, or
indebtedness that an agency intends to pay from its Low and Moderate
Income Housing Fund established pursuant to Section 33334.3 shall be
listed on a statement of indebtedness or reconciliation statement as
a loan, advance, or indebtedness of the agency. For the purposes of
this section, any statutorily authorized deficit in or borrowing from
an agency's Low and Moderate Income Housing Fund established
pursuant to Section 33334.3 shall constitute an indebtedness of the
agency.
   (g) The county auditor or officer shall, at the same time or times
as the payment of taxes into the funds of the respective taxing
entities of the county, allocate and pay the portion of taxes
provided by subdivision (b) of Section 33670 to each agency. The
amount allocated and paid shall not exceed the amount determined
pursuant to subparagraph (C) of paragraph (1) of subdivision (c)
minus the amount determined pursuant to subparagraph (D) of paragraph
(1) of subdivision (c).
   (h) (1) The statement of indebtedness constitutes prima facie
evidence of the loans, advances, or indebtedness of the agency.
   (2) (A) If the county auditor or other officer disputes the amount
of loans, advances, or indebtedness as shown on the statement of
indebtedness, the county auditor or other officer shall, within 30
days after receipt of the statement, give written notice to the
agency thereof.
   (B) The agency shall, within 30 days after receipt of notice
pursuant to subparagraph (A), submit any further information it deems
appropriate to substantiate the amount of any loans, advances, or
indebtedness which has been disputed. If the county auditor or other
officer still disputes the amount of loans, advances, or
indebtedness, final written notice of that dispute shall be given to
the agency, and the amount disputed may be withheld from allocation
and payment to the agency as otherwise required by subdivision (g).
In that event, the auditor or other officer shall bring an action in
the superior court in declaratory relief to determine the matter not
later than 90 days after the date of the final notice.
   (3) In any court action brought pursuant to this section, the
issue shall involve only the amount of loans, advances, or
indebtedness, and not the validity of any contract or debt instrument
or any expenditures pursuant thereto. Payments to a trustee under a
bond resolution or indenture of any kind or payments to a public
agency in connection with payments by that public agency pursuant to
a lease or bond issue shall not be disputed in any action under this
section. The matter shall be set for trial at the earliest possible
date and shall take
precedence over all other cases except older matters of the same
character. Unless an action is brought within the time provided for
herein, the auditor or other officer shall allocate and pay the
amount shown on the statement of indebtedness as provided in
subdivision (g).
   (i) Nothing in this section shall be construed to permit a
challenge to or attack on matters precluded from challenge or attack
by reason of Sections 33500 and 33501. However, nothing in this
section shall be construed to deny a remedy against the agency
otherwise provided by law.
   (j) The Controller shall prescribe a uniform form of statement of
indebtedness and reconciliation statement. These forms shall be
consistent with this section. In preparing these forms, the
Controller shall obtain the input of county auditors, redevelopment
agencies, and organizations of county auditors and redevelopment
agencies.
   (k) For the purposes of this section, a fiscal year shall be a
year that begins on July 1 and ends the following June 30.
  SEC. 51.  Section 33680 of the Health and Safety Code is amended to
read:
   33680.  (a) The Legislature finds and declares that the
effectuation of the primary purposes of the Community Redevelopment
Law, including job creation, attracting new private commercial
investments, the physical and social improvement of residential
neighborhoods, and the provision and maintenance of low- and
moderate-income housing, is dependent upon the existence of an
adequate and financially solvent school system which is capable of
providing for the safety and education of students who live within
both redevelopment project areas and housing assisted by
redevelopment agencies. The attraction of new businesses to
redevelopment project areas depends upon the existence of an
adequately trained work force, which can only be accomplished if
education at the primary and secondary schools is adequate and
general education and job training at community colleges is
available. The ability of communities to build residential
development and attract residents in redevelopment project areas
depends upon the existence of adequately maintained and operating
schools serving the redevelopment project area. The development and
maintenance of low- and moderate-income housing both within
redevelopment project areas and throughout the community can only be
successful if adequate schools exist to serve the residents of this
housing.
   (b) Redevelopment agencies have financially assisted schools which
benefit and serve the project area by paying part or all of land and
the construction of school facilities and other improvements
pursuant to the authority in Section 33445. Redevelopment agencies
have financially assisted schools to alleviate the financial burden
or detriment caused by the establishment of redevelopment project
areas pursuant to the authority in Sections 33401 and 33445.5. Funds
also have been allocated to schools and community colleges pursuant
to the authority in Section 33676.
   (c) The Legislature further finds and declares that, because of
the reduced funds available to the state to assist schools and
community colleges which benefit and serve redevelopment project
areas during the 1992-93, 1993-94, and 1994-95 fiscal years, it is
necessary for redevelopment agencies to make additional payments to
assist the programs and operations of these schools and colleges in
order to ensure that the objectives stated in this section can be
met. The Legislature further finds and declares that the payments to
schools and community college districts pursuant to Section 33681 are
of benefit to redevelopment project areas.
   (d) The Legislature further finds and declares all of the
following:
   (1) Because of the reduced funds available to the state to assist
schools that benefit and serve redevelopment project areas during the
2008-09 fiscal year, it is necessary for redevelopment agencies to
make additional payments to assist the programs and operations of
these schools to ensure that the objectives stated in this section
can be met.
   (2) The payments to schools pursuant to Section 33685 are of
benefit to redevelopment project areas.
  SEC. 52.  Section 33684 is added to the Health and Safety Code, to
read:
   33684.  (a) (1) This section shall apply to each redevelopment
project area that, pursuant to a redevelopment plan that contains the
provisions required by Section 33670, meets any of the following:
   (A) Was adopted on or after January 1, 1994, including later
amendments to these redevelopment plans.
   (B) Was adopted prior to January 1, 1994, but amended after
January 1, 1994, to include new territory. For plans amended after
January 1, 1994, only the tax increments from territory added by the
amendment shall be subject to this section.
   (2) This section shall apply to passthrough payments, as required
by Sections 33607.5 and 33607.7, for the 2003-04 to 2008-09,
inclusive, fiscal years. For purposes of this section, a passthrough
payment shall be considered the responsibility of an agency in the
fiscal year the agency receives the tax increment revenue for which
the passthrough payment is required.
   (3) For purposes of this section, "local educational agency" is a
school district, a community college district, or a county office of
education.
   (b) On or before October 1, 2008, each agency shall submit a
report to the county auditor and to each affected taxing entity that
describes each project area, including its location, purpose, date
established, date or dates amended, and statutory and contractual
passthrough requirements. The report shall specify, by year, for each
project area all of the following:
   (1) Gross tax increment received between July 1, 2003, and June
30, 2008, that is subject to a passthrough payment pursuant to
Sections 33607.5 and 33607.7, and accumulated gross tax increments
through June 30, 2003.
   (2) Total passthrough payments to each taxing entity that the
agency deferred pursuant to a subordination agreement approved by the
taxing agency under subdivision (e) of Section 33607.5 and the dates
these deferred payments will be made.
   (3) Total passthrough payments to each taxing entity that the
agency was responsible to make between July 1, 2003, and June 30,
2008, pursuant to Sections 33607.5 and 33607.7, excluding payments
identified in paragraph (2).
   (4) Total passthrough payments that the agency disbursed to each
taxing entity between July 1, 2003, and June 30, 2008, pursuant to
Sections 33607.5 and 33607.7.
   (5) Total sums reported in paragraph (4) for each local
educational agency that are considered to be property taxes under the
provisions of paragraph (4) of subdivision (a) of Sections 33607.5
and 33607.7.
   (6) Total outstanding payment obligations to each taxing entity as
of June 30, 2008. This amount shall be calculated by subtracting the
amounts reported in paragraph (4) from paragraph (3) and reporting
any positive sum.
   (7) Total outstanding overpayments to each taxing entity as of
June 30, 2008. This amount shall be calculated by subtracting the
amounts reported in paragraph (3) from paragraph (4) and reporting
any positive sum.
   (8) The dates on which the agency made payments identified in
paragraph (6) or intends to make the payments identified in paragraph
(6).
   (2) A revised estimate of the agency's total outstanding
passthrough payment obligation to each taxing agency pursuant to
paragraph (6) of subdivision (b) and paragraph (6) of subdivision (c)
and the dates on which the agency intends to make these payments.
   (c) On or before October 1, 2009, each agency shall submit a
report to the county auditor and to each affected taxing entity that
describes each project area, including its location, purpose, date
established, date or dates amended, and statutory and contractual
passthrough requirements. The report shall specify, by year, for each
project area all of the following:
   (1) Gross tax increment received between July 1, 2008, and June
30, 2009, that is subject to a passthrough payment pursuant to
Sections 33607.5 and 33607.7.
   (2) Total passthrough payments to each taxing entity that the
agency deferred pursuant to a subordination agreement approved by the
taxing entity under subdivision (e) of Section 33607.5 and the dates
these deferred payments will be made.
   (3) Total passthrough payments to each taxing entity that the
agency was responsible to make between July 1, 2008, and June 30,
2009, pursuant to Sections 33607.5 and 33607.7, excluding payments
identified in paragraph (2).
   (4) Total passthrough payments that the agency disbursed to each
taxing entity between July 1, 2008, and June 30, 2009, pursuant to
Sections 33607.5 and 33607.7.
   (5) Total sums reported in paragraph (4) for each local
educational agency that are considered to be property taxes under the
provisions of paragraph (4) of subdivision (a) of Sections 33607.5
and 33607.7.
   (6) Total outstanding payment obligations to each taxing entity as
of June 30, 2009. This amount shall be calculated by subtracting the
amounts reported in paragraph (4) from paragraph (3) and reporting
any positive sum.
   (7) Total outstanding overpayments to each taxing entity as of
June 30, 2009. This amount shall be calculated by subtracting the
amounts reported in paragraph (3) from paragraph (4) and reporting
any positive sum.
   (8) The dates on which the agency made payments identified in
paragraph (6) or intends to make the payments identified in paragraph
(6).
   (d) If an agency reports pursuant to paragraph (6) of subdivision
(b) or paragraph (6) of subdivision (c ) that it has an outstanding
passthrough payment obligation to any taxing entity, the agency shall
submit annual updates to the county auditor on October 1 of each
year until such time as the county auditor notifies the agency in
writing that the agency's outstanding payment obligations have been
fully satisfied. The report shall contain both of the following:
   (1) A list of payments to each taxing agency and to the
Educational Revenue Augmentation Fund pursuant to subdivision (j)
that the agency disbursed after the agency's last update filed
pursuant to this subdivision or, if no update has been filed, after
the agency's submission of the reports required pursuant to
subdivisions (b) and (c ). The list of payments shall include only
those payments that address obligations identified pursuant to
paragraph (6) of subdivision (b) and paragraph (6) of subdivision (c
). The update shall specify the date on which each payment was
disbursed.
   (2) A revised estimate of the agency's total outstanding
passthrough payment obligation to each taxing agency pursuant to
paragraph (6) of subdivision (b) and paragraph (6) of subdivision (c
) and the dates on which the agency intends to make these payments.
   (e) The county auditor shall review each agency's reports
submitted pursuant to subdivisions (b) and (c) and any other relevant
information to determine whether the county auditor concurs with the
information included in the reports.
   (1) If the county auditor concurs with the information included in
a report, the county auditor shall issue a finding of concurrence
within 45 days.
   (2) If the county auditor does not concur with the information
included in a report or considers the report to be incomplete, the
county auditor shall return the report to the agency within 45 days
with information identifying the elements of the report with which
the county auditor does not concur or considers to be incomplete. The
county auditor shall provide the agency at least 15 days to respond
to concerns raised by the county auditor regarding the information
contained in the report. An agency may revise a report that has not
received a finding of concurrence and resubmit it to the county
auditor.
   (3) If an agency and county auditor do not agree regarding the
passthrough requirements of Sections 33607.5 and 33607.7, an agency
may submit a report pursuant to subdivisions (b) and (c) and a
statement of dispute identifying the issue needing resolution.
   (4) An agency may amend a report for which the county auditor has
issued a finding of concurrence and resubmit the report pursuant to
paragraphs (1), (2), and (3) if any of the following apply:
   (A) The county auditor and agency agree that an issue identified
in the agency's statement of dispute has been resolved and the agency
proposes to modify the sections of the report to conform with the
resolution of the statement of dispute.
   (B) The county auditor and agency agree that the amount of gross
tax increment or the amount of a passthrough payment to a taxing
entity included in the report is not accurate.
   (5) The Controller may revoke a finding of concurrence and direct
the agency to resubmit a report to the county auditor pursuant to
paragraphs (1), (2), and (3) if the Controller finds significant
errors in a report.
   (f) On or before December 15, 2008, and annually thereafter
through 2014, the county auditor shall submit a report to the
Controller that includes all of the following:
   (1) The name of each redevelopment project area in the county for
which an agency must submit a report pursuant to subdivision (b) or
(c) and information as to whether the county auditor has issued a
finding of concurrence regarding the report.
   (2) A list of the agencies for which the county auditor has issued
a finding of concurrence for all project areas identified in
paragraph (1).
   (3) A list of agencies for which the county auditor has not issued
a finding of concurrence for all project areas identified in
paragraph (1).
   (4) Using information applicable to agencies listed in paragraph
(2), the county auditor shall report all of the following:
   (A) The total sums reported by each redevelopment agency related
to each taxing entity pursuant to paragraphs (1) to (7), inclusive,
of subdivision (b) and, on or after December 15, 2009, pursuant to
paragraphs (1) to (7), inclusive, of subdivision (c).
   (B) The names of agencies that have outstanding passthrough
payment obligations to a local educational agency that exceed the
amount of outstanding passthrough payments to the local educational
agency.
   (C) Summary information regarding agencies' stated plans to pay
the outstanding amounts identified in paragraph (6) of subdivision
(b) and paragraph (6) of subdivision (c) and the actual amounts that
have been deposited into the county Educational Revenue Augmentation
Fund pursuant to subdivision (j).
   (D) All unresolved statements of dispute filed by agencies
pursuant to paragraph (3) of subdivision (e) and the county auditor's
analyses supporting the county auditor's conclusions regarding the
issues under dispute.
   (g) (1) On or before February 1, 2009, and annually thereafter
through 2015, the Controller shall submit a report to the Legislative
Analyst's Office and the Department of Finance and provide a copy to
the Board of Governors of the California Community Colleges. The
report shall provide information as follows:
   (A) Identify agencies for which the county auditor has issued a
finding of concurrence for all reports required under subdivisions
(b) and (c).
   (B) Identify agencies for which the county auditor has not issued
a finding of concurrence for all reports required pursuant to
subdivision (b) and all reports required pursuant to subdivision (c)
or for which a finding of concurrence has been withdrawn by the
Controller.
   (C) Summarize the information reported in paragraph (4) of
subdivision (f). This summary shall identify, by local educational
agency and by year, the total amount of passthrough payments that
each local educational agency received, was entitled to receive,
subordinated, or that has not yet been paid, and the portion of these
amounts that are considered to be property taxes for purposes of
Sections 2558, 42238, and 84751 of the Education Code. The report
shall identify, by agency, the amounts that have been deposited to
the county Educational Revenue Augmentation Fund pursuant to
subdivision (j).
   (D) Summarize the statements of dispute. The Controller shall
specify the status of these disputes, including whether the
Controller or other state entity has provided instructions as to how
these disputes should be resolved.
   (E) Identify agencies that have outstanding passthrough payment
liabilities to a local educational agency that exceed the amount of
outstanding passthrough overpayments to the local educational agency.

   (2) On or before February 1, 2009, and annually thereafter through
2015, the Controller shall submit a report to the State Department
of Education and the Board of Governors of the California Community
Colleges. The report shall identify, by local educational agency and
by year of receipt, the total amount of passthrough payments that the
local educational agency received from redevelopment agencies listed
in subparagraph (A) of paragraph (1).
   (h) (1) On or before April 1, 2009, and annually thereafter until
April 1, 2015, the State Department of Education shall do all of the
following:
   (A) Calculate for each school district for the 2003-04 to 2007-08,
inclusive, fiscal years the difference between 43.3 percent of the
amount reported pursuant to paragraph (2) of subdivision (g) and the
amount subtracted from each school district's apportionment pursuant
to paragraph (6) of subdivision (h) of Section 42238 of the Education
Code.
   (B) Calculate for each county superintendent of schools for the
2003-04 to 2007-08, inclusive, fiscal years the difference between 19
percent of the amount reported pursuant to paragraph (2) of
subdivision (g) and the amount received pursuant to Sections 33607.5
and 33607.7 and subtracted from each county superintendent of schools
apportionment pursuant to subdivision (c) of Section 2558 of the
Education Code.
   (C) Notify each school district and county superintendent of
schools for which any amount calculated in subparagraph (A) or (B) is
nonzero as to the reported change and its resulting impact on
apportionments. After April 1, 2009, however, the department shall
not notify a school district or county superintendent of schools if
the amount calculated in subparagraph (A) or (B) is the same amount
as the department calculated in the preceding year.
   (2) On or before April 1, 2010, and annually thereafter until
April 1, 2015, the State Department of Education shall do all of the
following:
   (A) Calculate for each school district for the 2008-09 fiscal year
the difference between 43.3 percent of the amount reported pursuant
to paragraph (2) of subdivision (g) and the amount subtracted from
each school district's apportionment pursuant to paragraph (6) of
subdivision (h) of Section 42238 of the Education Code.
   (B) Calculate for each county superintendent of schools for the
2008-09 fiscal year the difference between 19 percent of the amount
reported pursuant to paragraph (2) of subdivision (g) and the amount
received pursuant to Sections 33607.5 and 33607.7 and subtracted from
each county superintendent of schools apportionment pursuant to
subdivision (c) of Section 2558 of the Education Code.
   (C) Notify each school district and county superintendent of
schools for which any amount calculated in subparagraph (A) or (B) is
nonzero as to the reported change and its resulting impact on
revenue limit apportionments. After April 1, 2010, however, the
department shall not notify a school district or county
superintendent of schools if the amount calculated in subparagraph
(A) or (B) is the same amount as the department calculated in the
preceding year.
   (3) For the purposes of Article 3 (commencing with Section 41330)
of Chapter 3 of Part 24 of Division 3 of the Education Code, the
amounts reported to each school district and county superintendent of
schools in the notification required pursuant to subparagraph (C) of
paragraph (1) and subparagraph (C) of paragraph (2) shall be deemed
to be apportionment significant audit exceptions and the date of
receipt of that notification shall be deemed to be the date of
receipt of the final audit report that includes those audit
exceptions.
   (4) On or before March 1, 2009, and annually thereafter until
March 1, 2015, the Board of Governors of the California Community
Colleges shall do all of the following:
   (A) Calculate for each community college district for the 2003-04
to 2007-08, inclusive, fiscal years the difference between 47.5
percent of the amount reported pursuant to paragraph (2) of
subdivision (g) and the amount subtracted from each district's total
revenue owed pursuant to subdivision (d) of Section 84751 of the
Education Code.
   (B) Notify each community college district for which any amount
calculated in subparagraph (A) is nonzero as to the reported change
and its resulting impact on apportionments. After March 1, 2009,
however, the board shall not notify a school district or county
superintendent of schools if the amount calculated in subparagraph
(A) is the same amount as the board calculated in the preceding year.

   (5) On or before March 1, 2010, and annually thereafter until
March 1, 2015, the Board of Governors of the California Community
Colleges shall do all of the following:
   (A) Calculate for each community college district for the 2003-04
to 2007-08, inclusive, fiscal years the difference between 47.5
percent of the amount reported pursuant to paragraph (2) of
subdivision (g) and the amount subtracted from each district's total
revenue owed pursuant to subdivision (d) of Section 84751 of the
Education Code.
   (B) Notify each community college district for which any amount
calculated in subparagraph (A) is nonzero as to the reported change
and its resulting impact on revenue apportionments. After March 1,
2010, however, the board shall not notify a community college
district if the amount calculated in subparagraph (A) is the same
amount as the board calculated in the preceding year.
   (6) A community college district may submit documentation to the
Board of Governors of the California Community Colleges showing that
all or part of the amount reported to the district pursuant to
subparagraph (B) of paragraph (4) and subparagraph (B) of paragraph
(5) was previously reported to the California Community Colleges for
the purpose of the revenue level calculations made pursuant to
Section 84751 of the Education Code. Upon acceptance of the
documentation, the board of governors shall adjust the amounts
calculated in paragraphs (4) and (5) accordingly.
   (7) The Board of Governors of the California Community Colleges
shall make corrections in any amounts allocated in any fiscal year to
each community college district for which any amount calculated in
paragraphs (4) and (5) is nonzero so as to account for the changes
reported pursuant to paragraph (4) of subdivision (b) and paragraph
(4) of subdivision (c). The board may make the corrections over a
period of time, not to exceed five years.
   (i) (1) After February 1, 2009, for an agency listed on the most
recent Controller's report pursuant to subparagraph (B) or (E) of
paragraph (1) of subdivision (g), all of the following shall apply:
   (A) The agency shall be prohibited from adding new project areas
or expanding existing project areas. For purposes of this paragraph,
"project area" has the same meaning as in Sections 33320.1 to
33320.3, inclusive, and Section 33492.3.
   (B) The agency shall be prohibited from issuing new bonds, notes,
interim certificates, debentures, or other obligations, whether
funded, refunded, assumed, or otherwise, pursuant to Article 5
(commencing with Section 33640).
   (C) The agency shall be prohibited from encumbering any funds or
expending any moneys derived from any source, except that the agency
may encumber funds and expend funds to pay, if any, all of the
following:
   (i) Bonds, notes, interim certificates, debentures, or other
obligations issued by an agency before the imposition of the
prohibition in subparagraph (B) whether funded, refunded, assumed, or
otherwise, pursuant to Article 5 (commencing with Section 33460) of
this chapter.
   (ii) Loans or moneys advanced to the agency, including, but not
limited to, loans from federal, state, local agencies, or a private
entity.
   (iii) Contractual obligations that, if breached, could subject the
agency to damages or other liabilities or remedies.
   (iv) Obligations incurred pursuant to Section 33445.
   (v) Indebtedness incurred pursuant to Section 33334.2 or 33334.6.
   (vi) Obligations incurred pursuant to Section 33401.
   (vii) An amount, to be expended for the monthly operation and
administration of the agency, that may not exceed 75 percent of the
average monthly amount spent for those purposes in the fiscal year
preceding the fiscal year in which the agency was first listed on the
Controller's report pursuant to subparagraph (B) or (E) of paragraph
(1) of subdivision (g).
   (2) After February 1, 2009, an agency identified in subparagraph
(B) or (E) of paragraph (1) of subdivision (g) shall incur interest
charges on any passthrough payment that is made to a local
educational agency more than 60 days after the close of the fiscal
year in which the passthrough payment was required. Interest shall be
charged at a rate equal to 150 percent of the current Pooled Money
Investment Account earnings annual yield rate and shall be charged
for the period beginning 60 days after the close of the fiscal year
in which the passthrough payment was due through the date that the
payment is made.
   (3) The Controller, with the concurrence of the Director of
Finance, may waive the provisions of paragraphs (1) and (2) for a
period of up to 12 months if the Controller determines all of the
following:
   (A) The county auditor has identified the agency in its most
recent report issued pursuant to paragraph (2) of subdivision (f) as
an agency for which the auditor has issued a finding of concurrence
for all reports required pursuant to subdivisions (b) and (c).
   (B) The agency has filed a statement of dispute on an issue or
issues that, in the opinion of the Controller, are likely to be
resolved in a manner consistent with the agency's position.
   (C) The agency has made passthrough payments to local educational
agencies and the county Educational Revenue Augmentation Fund, or has
had funds previously withheld by the auditor, in amounts that would
satisfy the agency's passthrough payment requirements to local
educational agencies if the issue or issues addressed in the
statement of dispute were resolved in a manner consistent with the
agency's position.
     (D) The agency would sustain a fiscal hardship if it made
passthrough payments to local educational agencies and the county
Educational Revenue Augmentation Fund in the amounts estimated by the
county auditor.
   (j) Notwithstanding any other provision of law, if an agency
report submitted pursuant to subdivision (b) or (c) indicates
outstanding payment obligations to a local educational agency, the
agency shall make these outstanding payments as follows:
   (1) Of the outstanding payments owed to school districts,
including any interest payments pursuant to paragraph (2) of
subdivision (i), 43.3 percent shall be deposited in the county
Educational Revenue Augmentation Fund and the remainder shall be
allocated to the school district or districts.
   (2) Of the outstanding payments owed to community college
districts, including any interest payments pursuant to paragraph (2)
of subdivision (i), 47.5 percent shall be deposited in the county
Educational Revenue Augmentation Fund and the remainder shall be
allocated to the community college district or districts.
   (3) Of the outstanding payments owed to county offices of
education, including any interest payments pursuant to paragraph (2)
of subdivision (i), 19 percent shall be deposited in the county
Educational Revenue Augmentation Fund and the remainder shall be
allocated to the county office of education.
   (k) (1) This section shall not be construed to increase any
allocations of excess, additional, or remaining funds that would
otherwise have been allocated to cities, counties, cities and
counties, or special districts pursuant to clause (i) of subparagraph
(B) of paragraph (4) of subdivision (d) of Section 97.2 of, clause
(i) of subparagraph (B) of paragraph (4) of subdivision (d) of
Section 97.3 of, or Article 4 (commencing with Section 98) of Chapter
6 of Part 0.5 of Division 1 of, the Revenue and Taxation Code had
this section not been enacted.
   (2) Notwithstanding any other provision of law, no funds deposited
in the county Educational Revenue Augmentation Fund pursuant to
subdivision (j) shall be distributed to a community college district.

   (l) A county may require an agency to reimburse the county for any
expenses incurred by the county in performing the services required
by this section.
  SEC. 53.  Section 33685 is added to the Health and Safety Code, to
read:
   33685.  (a) (1) For the 2008-09 fiscal year a redevelopment agency
shall remit, as determined by the Director of Finance, prior to May
10, an amount equal to the amount determined for that agency pursuant
to subparagraph (K) of paragraph (2) to the county auditor for
deposit in the county Educational Revenue Augmentation Fund, created
pursuant to Article 3 (commencing with Section 97) of Chapter 6 of
Part 0.5 of Division 1 of the Revenue and Taxation Code.
Notwithstanding any other provision of law, in the 2008-09 fiscal
year, no funds deposited in the county Educational Revenue
Augmentation Fund pursuant to this section shall be distributed to a
community college district.
   (2) On or before November 15, 2008, the Director of Finance shall
do all of the following:
   (A) (i) Determine the value of five percent of the statewide total
property tax revenue apportioned to agencies pursuant to Section
33670.
   (ii) If the value determined pursuant to clause (i) exceeds
three-hundred fifty million dollars ($350,000,000), the value
determined in clause (i) shall be allocated to each agency as
provided in paragraphs (B) to (J), inclusive.
   (iii) If the value determined pursuant to clause (i) does not
exceed three-hundred fifty million dollars ($350,000,000),
three-hundred fifty million dollars ($350,000,000) shall be allocated
to each agency as provided in subparagraphs (B) to (J), inclusive.
   (B) Determine the net tax increment apportioned to each agency
pursuant to Section 33670, excluding any amounts apportioned to
affected taxing entities pursuant to Section 33401, 33607.5, or
33676.
   (C) Determine the net tax increment apportioned to all agencies
pursuant to Section 33670, excluding any amounts allocated to
affected taxing entities pursuant to Section 33401, 33607.5, or
33676.
   (D) Determine a percentage factor by dividing the amount
determined pursuant to subparagraph (A) by two and then by the amount
determined pursuant to subparagraph (C).
   (E) Determine an amount for each agency by multiplying the amount
determined pursuant to subparagraph (B) by the percentage factor
determined pursuant to subparagraph (D).
   (F) Determine the total amount of property tax revenue apportioned
to each agency pursuant to Section 33670, including any amounts
allocated to affected taxing entities pursuant to Section 33401,
33607.5, or 33676.
   (G) Determine the total amount of property tax revenue apportioned
to all agencies pursuant to Section 33670, including any amounts
allocated to affected taxing entities pursuant to Section 33401,
33607.5, or 33676.
   (H) Determine a percentage factor by dividing the amount
determined pursuant to subparagraph (A) by two and then by the amount
determined pursuant to subparagraph (G).
   (I) Determine an amount for each agency by multiplying the amount
determined pursuant to subparagraph (F) by the percentage factor
determined pursuant to subparagraph (H).
   (J) Add the amount determined pursuant to subparagraph (E) to the
amount determined pursuant to subparagraph (I).
   (K) Notify each agency, each legislative body, and each county
auditor of each agency's amount. The county auditor shall deposit
these amounts in the county Educational Revenue Augmentation Fund
pursuant to paragraph (1).
   (3) The obligation of any agency to make the payments required
pursuant to this subdivision shall be subordinate to the lien of any
pledge of collateral securing, directly or indirectly, the payment of
the principal, or interest on any bonds of the agency including,
without limitation, bonds secured by a pledge of taxes allocated to
the agency pursuant to Section 33670. Agencies shall factor in the
fiscal obligations created by this subdivision when issuing bonded
indebtedness.
   (b) (1) Notwithstanding any other provision of law, to make the
full allocation required by this section, an agency may borrow up to
50 percent of the amount required to be allocated to the Low and
Moderate Income Housing Fund, pursuant to Sections 33334.2, 33334.3,
and 33334.6, unless, in a given fiscal year, executed contracts exist
that would be impaired if the agency reduced the amount allocated to
the Low and Moderate Income Housing Fund pursuant to the authority
of this subdivision.
   (2) As a condition of borrowing pursuant to this subdivision, an
agency shall make a finding that there are insufficient other moneys
to meet the requirements of subdivision (a). Funds borrowed pursuant
to this subdivision shall be repaid in full within 10 years following
the date on which moneys are remitted to the county auditor for
deposit in the county Educational Revenue Augmentation Fund pursuant
to subdivision (a).
   (c) To make the allocation required by this section, an agency may
use any funds that are legally available and not legally obligated
for other uses, including, but not limited to, reserve funds,
proceeds of land sales, proceeds of bonds or other indebtedness,
lease revenues, interest, and other earned income. No moneys held in
a low- and moderate-income fund as of July 1 of the applicable fiscal
year may be used for this purpose.
   (d) The legislative body shall by March 1 of each year report to
the county auditor as to how the agency intends to fund the
allocation required by this section, or that the legislative body
intends to remit the amount in lieu of the agency pursuant to Section
33687.
   (e) The allocation obligations imposed by this section, including
amounts owed, if any, created under this section, are hereby declared
to be an indebtedness of the redevelopment project to which they
relate, payable from taxes allocated to the agency pursuant to
Section 33670, and shall constitute an indebtedness of the agency
with respect to the redevelopment project until paid in full.
   (f) It is the intent of the Legislature, in enacting this section,
that these allocations directly or indirectly assist in the
financing or refinancing, in whole or in part, of the community's
redevelopment project pursuant to Section 16 of Article XVI of the
California Constitution.
   (g) In making the annual determinations required by subdivision
(a), the Director of Finance shall use those amounts reported in
"Table 7, Assessed Valuation, Tax Increment Distribution and
Statement of Indebtedness" for all agencies and for each agency in
the most recent published edition of the Controller's Community
Redevelopment Agencies Annual Report made pursuant to Section 12463.3
of the Government Code.
   (h) If revised reports have been accepted by the Controller on or
before September 1 of the applicable fiscal year, the Director of
Finance shall use appropriate data that has been certified by the
Controller for the purpose of making the determinations required by
subdivision (a).
   (i) Nothing in this section shall be construed as extending the
time limits on the ability of agencies to do any of the following:
   (1) Establish loans, advances, or indebtedness.
   (2) Receive tax increment revenues.
   (3) Exercise eminent domain powers.
  SEC. 54.  Section 33686 is added to the Health and Safety Code, to
read:
   33686.  (a) (1) For purposes of this section, "existing
indebtedness" means one or more of the following obligations incurred
by a redevelopment agency prior to the effective date of this
section, the payment of which is to be made in whole or in part,
directly or indirectly, out of taxes allocated to the agency pursuant
to Section 33670, and that is required by law or provision of the
existing indebtedness to be made during the fiscal year of the
relevant allocation required by Section 33685:
   (A) Bonds, notes, interim certificates, debentures, or other
obligations issued by the agency whether funded, refunded, assumed,
or otherwise pursuant to Article 5 (commencing with Section 33640).
   (B) Loans or moneys advanced to the agency, including, but not
limited to, loans from federal, state, or local agencies, or a
private entity.
   (C) A contractual obligation that, if breached, could subject the
agency to damages or other liabilities or remedies.
   (D) An obligation incurred pursuant to Section 33445.
   (E) Indebtedness incurred pursuant to Section 33334.2.
   (F) An amount, to be expended for the operation and administration
of the agency, that may not exceed 90 percent of the amount spent
for those purposes in the 2005-06 fiscal year.
   (G) Obligations imposed by law with respect to activities that
occurred prior to the effective date of the act that adds this
section.
   (2) Existing indebtedness incurred prior to the effective date of
this section may be refinanced, refunded, or restructured after that
date, and shall remain existing indebtedness for the purposes of this
section if the annual debt service during that fiscal year does not
increase over the prior fiscal year and the refinancing does not
reduce the ability of the agency to make the payment required by
subdivision (a) of Section 33685.
   (3) For purposes of this section, indebtedness shall be deemed to
be incurred prior to the effective date of this section if the agency
has entered into a binding contract subject to normal marketing
conditions or to deliver the indebtedness, or if the redevelopment
agency has received bids for the sale of the indebtedness prior to
that date and the indebtedness is issued for value and evidence
thereof is delivered to the initial purchaser no later than 30 days
after the date of the contract or sale.
   (b) For the 2008-09 fiscal year, an agency that has adopted a
resolution pursuant to subdivision (c) may allocate, pursuant to
subdivision (a) of Section 33685, to the auditor less than the amount
required by subdivision (a) of Section 33685 if the agency finds
that any of the following has occurred:
   (1) That the difference between the amount allocated to the agency
and the amount required by subdivision (a) of Section 33685 is
necessary to make payments on existing indebtedness that are due or
required to be committed, set aside, or reserved by the agency during
the 2008-09 fiscal year and that are used by the agency for that
purpose, and the agency has no other funds that can be used to pay
this existing indebtedness and no other feasible method to reduce or
avoid this indebtedness.
   (2) The agency has no other funds to make the allocation required
by subdivision (a) of Section 33685.
   (c) (1) Any agency that intends to allocate, pursuant to
subdivision (b), to the auditor less than the amount required by
subdivision (a) of Section 33685 shall adopt, prior to December 31,
2008, after a noticed public hearing, a resolution that lists all of
the following:
   (A) Each existing indebtedness incurred prior to the effective
date of this section.
   (B) Each indebtedness on which a payment is required to be made
during the applicable fiscal year.
   (C) The amount of each payment, the time when it is required to be
paid, and the total of the payments required to be made during the
applicable fiscal year. For indebtedness that bears interest at a
variable rate, or for short-term indebtedness that is maturing during
the fiscal year and that is expected to be refinanced, the amount of
payments during the fiscal year shall be estimated by the agency.
   (2) The information contained in the resolution required by this
subdivision shall be reviewed for accuracy by the chief fiscal
officer of the agency.
   (3) The legislative body shall additionally adopt the resolution
required by this section.
   (d) (1) Any agency that determines, pursuant to subdivision (b),
that it will be unable in the 2008-09 fiscal year to allocate the
full amount required by subdivision (a) of Section 33685 may enter
into, subject to paragraph (3), an agreement with the legislative
body by February 15, 2009, to fund the payment of the difference
between the full amount required to be paid pursuant to subdivision
(a) of Section 33685 and the amount available for allocation by the
agency.
   (2) The obligations imposed by paragraph (1) are hereby declared
to be indebtedness incurred by the agency to finance a portion of a
redevelopment project within the meaning of Section 16 of Article XVI
of the California Constitution. This indebtedness shall be payable
from tax revenues apportioned to the agency pursuant to Section
33670, and any other funds received by the agency. The obligations
imposed by paragraph (1) shall remain an indebtedness of the agency
to the legislative body until paid in full, or until the agency and
the legislative body otherwise agree.
   (3) The agreement described in paragraph (1) shall be subject to
those terms and conditions specified in a written agreement between
the legislative body and the agency.
   (e) If the agency fails to provide to the county auditor the full
payment required under Section 33685, or fails to arrange for full
payment to be provided on the agency's behalf pursuant to subdivision
(d) or by Section 33687 or 33688, all of the following shall apply:
   (1) The agency shall be prohibited from adding new project areas
or expanding existing project areas. For purposes of this paragraph,
"project area" has the same meaning as in Sections 33320.1 to
33320.3, inclusive, and Section 33492.3.
   (2) The agency shall be prohibited from issuing new bonds, notes,
interim certificates, debentures, or other obligations, whether
funded, refunded, assumed, or otherwise, pursuant to Article 5
(commencing with Section 33640) of this chapter.
   (3) The agency shall be prohibited from encumbering any funds or
expending any moneys derived from any source, except that the agency
may encumber funds and expend funds to pay, if any, all of the
following:
   (A) Bonds, notes, interim certificates, debentures, or other
obligations issued by an agency before the imposition of the
prohibition in paragraph (2), whether funded, refunded, assumed, or
otherwise, pursuant to Article 5 (commencing with Section 33460) of
this chapter.
   (B) Loans or moneys advanced to the agency, including, but not
limited to, loans from federal, state, local agencies, or a private
entity.
   (C) Contractual obligations that, if breached, could subject the
agency to damages or other liabilities or remedies.
   (D) Obligations incurred pursuant to Section 33445.
   (E) Indebtedness incurred pursuant to Section 33334.2 or 33334.6.
   (F) Obligations incurred pursuant to Section 33401.
   (G) An amount, to be expended for the monthly operation and
administration of the agency, that may not exceed 75 percent of the
average monthly amount spent for those purposes in the fiscal year
preceding the fiscal year in which the agency failed to make the
payment required by subdivision (a) of Section 33685.
   (f) The prohibitions identified in subdivision (e) shall be lifted
once the county auditor certifies to the Director of Finance that
the payment required by Section 33685 has been made by the agency, or
that payment has been made on the agency's behalf pursuant to this
section or to Section 33687 or 33688.
  SEC. 55.  Section 33687 is added to the Health and Safety Code, to
read:
   33687.  (a) In lieu of the remittance required by Section 33685,
for the 2008-09 fiscal year, a legislative body may remit, prior to
May 10, 2009, an amount equal to the amount determined for the agency
pursuant to subparagraph (J) of paragraph (2) of subdivision (a) of
Section 33685 to the county auditor for deposit in the county
Educational Revenue Augmentation Fund, created pursuant to Article 3
(commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1
of the Revenue and Taxation Code. Notwithstanding any other provision
of law, in the 2008-09 fiscal year, no funds deposited in the county
Educational Revenue Augmentation Fund pursuant to this section shall
be distributed to a community college district.
   (b) The legislative body may make the remittance authorized by
this section from any funds that are legally available for this
purpose. No moneys held in an agency's Low and Moderate Income
Housing Fund, pursuant to Sections 33334.2, 33334.3, and 33334.6,
shall be used for this purpose.
   (c) If the legislative body, pursuant to subdivision (d) of
Section 33685, reported to the county auditor that it intended to
remit the amount in lieu of the agency and the legislative body fails
to transmit the full amount as authorized by this section by May 10,
2009, the county auditor, no later than May 15, 2009, shall transfer
an amount necessary to meet the obligation from the legislative body'
s allocations pursuant to Chapter 6 (commencing with Section 95) of
Part 0.5 of Division 1 of the Revenue and Taxation Code. If the
amount of the legislative body's allocations are not sufficient to
meet this obligation, the county auditor shall transfer an additional
amount necessary to meet this obligation from the property tax
increment revenue apportioned to the agency pursuant to Section
33670, provided that no moneys allocated to the agency's Low and
Moderate Income Housing Fund shall be used for this purpose.
  SEC. 56.  Section 33688 is added to the Health and Safety Code, to
read:
   33688.  (a) For purposes of this section, an "authorized issuer"
is limited to a joint powers entity created pursuant to Article 1
(commencing with Section 6500) of Chapter 5 of Division 7 of Title 1
of the Government Code that consists of no less than 100 local
agencies issuing bonds pursuant to the Marks-Roos Local Bond Pooling
Act of 1984 (Article 4 (commencing with Section 6584) of Chapter 5 of
Division 7 of Title 1 of the Government Code).
   (b) An authorized issuer may issue bonds, notes, or other evidence
of indebtedness to provide net proceeds to make one or more loans to
one or more agencies to be used by the agency to timely make the
payment required by Section 33684.
   (c) With the prior approval of the legislative body by adoption of
a resolution by a majority of that body that recites that a first
lien on the property tax revenues allocated to the legislative body
will be created in accordance with subdivision (h), an agency may
enter into an agreement with an authorized issuer issuing bonds
pursuant to subdivision (b) to repay a loan used to make the payment
required by Section 33685. For the purpose of calculating the amount
that has been divided and allocated to the agency to determine
whether the limitation adopted pursuant to Section 33333.2 or 33333.4
or pursuant to an agreement or court order that has been reached,
any funds used to repay a loan entered into pursuant to this section
shall be deducted from the amount of property tax revenue deemed to
have been received by the agency.
   (d) A loan made pursuant to this section shall be repayable by the
agency from any available funds of the agency not otherwise
obligated for other uses and shall be repayable by the agency on a
basis subordinate to all existing and future obligations of the
agency.
   (e) Upon making a loan to an agency pursuant to this section, the
trustee for the bonds issued to provide the funds to make the loan
shall timely pay, on behalf of the agency, to the county auditor of
the county in which the agency is located the net proceeds (after
payment of costs of issuance, credit enhancement costs, and reserves,
if any) of the loan in payment in full or in part, as directed by
the agency, of the amount required to be paid by the agency pursuant
to Section 33685 and shall provide the county auditor with the
repayment schedule for the loan, together with the name of the
trustee.
   (f) In the event the agency shall fail to repay timely, at any
time and from time to time, the loan in accordance with the schedule
provided to the county auditor, the trustee for the bonds shall
promptly notify the county auditor of the amount of the payment on
the loan that is past due.
   (g) The county auditor shall reallocate from the legislative body
and shall pay, on behalf of the agency, the past due amount from the
first available proceeds of the property tax allocation that would
otherwise be transferred to the legislative body pursuant to Chapter
6 (commencing with Section 95) of Part 0.5 of Division 1 of the
Revenue and Taxation Code. This transfer shall be deemed a
reallocation of the property tax revenue from the legislative body to
the agency for the purpose of payment of the loan, and not as a
payment by the legislative body on the loan.
   (h) To secure repayment of a loan to an agency made pursuant to
this section, the trustee for the bonds issued to provide the funds
to make the loan shall have a lien on the property tax revenues
allocated to the legislative body pursuant to Chapter 6 (commencing
with Section 95) of Part 0.5 of Division 1 of the Revenue and
Taxation Code. This lien shall arise by operation of this section
automatically upon the making of the loan without the need for any
action on the part of any person. This lien shall be valid, binding,
perfected, and enforceable against the legislative body, its
successors, creditors, purchasers, and all others asserting rights in
those property tax revenues, irrespective of whether those persons
have notice of the lien, irrespective of the fact that the property
tax revenues subject to the lien may be commingled with other
property, and without the need for physical delivery, recordation,
public notice, or any other act. This lien shall be a first priority
lien on these property tax revenues. This lien shall not apply to any
portion of the property taxes allocated to the agency pursuant to
Section 33670.
  SEC. 57.  Section 33689 is added to the Health and Safety Code, to
read:
   33689.  For the purpose of calculating the amount that has been
divided and allocated to the agency to determine whether the
limitation adopted pursuant to Section 33333.2 or 33333.4 or pursuant
to agreement or court order that has been reached, any payments made
pursuant to subdivision (a) of Section 33685 with property tax
revenues shall be deducted from the amount of property tax dollars
deemed to have been received by the agency.
  SEC. 58.  Section 1060 of the Insurance Code is amended to read:
   1060.  The commissioner shall transmit all of the following to the
Governor, the Legislature, and to the committees of the Senate and
Assembly having jurisdiction over insurance in the annual report
submitted pursuant to Section 12922:
   (a) The names of the persons proceeded against under this article.

   (b) Whether such persons have resumed business or have been
liquidated or have been mutualized.
   (c) Such other facts on the operations of the Conservation &
Liquidation Office as will acquaint the Governor, the policyholders,
creditors, shareholders and the public with his or her proceedings
under this article, including, but not limited to:
   (1) An itemization of the number of staff, total salaries of
staff, a description of the compensation methodology, and an
organizational flowchart.
   (2) Annual operating goals and results.
   (3) A summary of all Conservation and Liquidation Office costs,
including an itemization of internal and external costs, and a
description of the methodology used to allocate those costs among
insurer estates.
   (4) A list of all current insolvencies not closed within ten years
of a court ordered liquidation, and a narrative explaining why each
insolvency remains open.
   (5) An accounting of total claims by estate.
   (6) A list of current year and cumulative distributions by class
of creditor for each estate.
   (7) For each proceeding, the net value of the estate at the time
of conservation or liquidation and the net value at the end of the
preceding calendar year.
   (d) Other facts on the operations of the individual estates as
will acquaint the Governor, Legislature, policyholders, creditors,
shareholders, and the public with his or her proceedings under this
article, including, but not limited to:
   (1) The annual operating goals and results.
   (2) The status of the conservation and liquidation process.
   (3) Financial statements, including current and cumulative
distributions, comparing current calendar year to prior year.
  SEC. 59.  Section 62.5 of the Labor Code is amended to read:
   62.5.  (a) (1) The Workers' Compensation Administration Revolving
Fund is hereby created as a special account in the State Treasury.
Money in the fund may be expended by the department, upon
appropriation by the Legislature, for all of the following purposes,
and may                                               not be used or
borrowed for any other purpose:
   (A) For the administration of the workers' compensation program
set forth in this division and Division 4 (commencing with Section
3200), other than the activities financed pursuant to Section 3702.5.

   (B) For the Return-to-Work Program set forth in Section 139.48.
   (C) For the enforcement of the insurance coverage program
established and maintained by the Labor Commissioner pursuant to
Section 90.3.
   (2) The fund shall consist of surcharges made pursuant to
subdivision (e).
   (b) (1) The Uninsured Employers Benefits Trust Fund is hereby
created as a special trust fund account in the State Treasury, of
which the director is trustee, and its sources of funds are as
provided in subdivision (e). Notwithstanding Section 13340 of the
Government Code, the fund is continuously appropriated for the
payment of nonadministrative expenses of the workers' compensation
program for workers injured while employed by uninsured employers in
accordance with Article 2 (commencing with Section 3710) of Chapter 4
of Part 1 of Division 4, and shall not be used for any other
purpose. All moneys collected shall be retained in the trust fund
until paid as benefits to workers injured while employed by uninsured
employers. Nonadministrative expenses include audits and reports of
services prepared pursuant to subdivision (b) of Section 3716.1. The
surcharge amount for this fund shall be stated separately.
   (2) Notwithstanding any other provision of law, all references to
the Uninsured Employers Fund shall mean the Uninsured Employers
Benefits Trust Fund.
   (3) Notwithstanding paragraph (1), in the event that budgetary
restrictions or impasse prevent the timely payment of administrative
expenses from the Workers' Compensation Administration Revolving
Fund, those expenses shall be advanced from the Uninsured Employers
Benefits Trust Fund. Expense advances made pursuant to this paragraph
shall be reimbursed in full to the Uninsured Employers Benefits
Trust Fund upon enactment of the annual Budget Act.
   (4) Any moneys from penalties collected pursuant to Section 3722
as a result of the insurance coverage program established under
Section 90.3 shall be deposited in the State Treasury to the credit
of the Workers' Compensation Administration Revolving Fund created
under Section 62.5, to cover expenses incurred by the director under
the insurance coverage program. The amount of any penalties in excess
of payment of administrative expenses incurred by the director for
the insurance coverage program established under Section 90.3 shall
be deposited in the State Treasury to the credit of the Uninsured
Employers Benefits Trust Fund for nonadministrative expenses, as
prescribed in paragraph (1), and notwithstanding paragraph (1), shall
only be available upon appropriation by the Legislature.
   (c) (1) The Subsequent Injuries Benefits Trust Fund is hereby
created as a special trust fund account in the State Treasury, of
which the director is trustee, and its sources of funds are as
provided in subdivision (e). Notwithstanding Section 13340 of the
Government Code, the fund is continuously appropriated for the
nonadministrative expenses of the workers' compensation program for
workers who have suffered serious injury and who are suffering from
previous and serious permanent disabilities or physical impairments,
in accordance with Article 5 (commencing with Section 4751) of
Chapter 2 of Part 2 of Division 4, and Section 4 of Article XIV of
the California Constitution, and shall not be used for any other
purpose. All moneys collected shall be retained in the trust fund
until paid as benefits to workers who have suffered serious injury
and who are suffering from previous and serious permanent
disabilities or physical impairments. Nonadministrative expenses
include audits and reports of services pursuant to subdivision (c) of
Section 4755. The surcharge amount for this fund shall be stated
separately.
   (2) Notwithstanding any other provision of law, all references to
the Subsequent Injuries Fund shall mean the Subsequent Injuries
Benefits Trust Fund.
   (3) Notwithstanding paragraph (1), in the event that budgetary
restrictions or impasse prevent the timely payment of administrative
expenses from the Workers' Compensation Administration Revolving
Fund, those expenses shall be advanced from the Subsequent Injuries
Benefits Trust Fund. Expense advances made pursuant to this paragraph
shall be reimbursed in full to the Subsequent Injuries Benefits
Trust Fund upon enactment of the annual Budget Act.
   (d) The Occupational Safety and Health Fund is hereby created as a
special account in the State Treasury. Moneys in the account may be
expended by the department, upon appropriation by the Legislature,
for support of the Division of Occupational Safety and Health, the
Occupational Safety and Health Standards Board, and the Occupational
Safety and Health Appeals Board, and the activities these entities
perform as set forth in this division, and Division 5 (commencing
with Section 6300).
   (e) (1) Separate surcharges shall be levied by the director upon
all employers, as defined in Section 3300, for purposes of deposit in
the Workers' Compensation Administration Revolving Fund, the
Uninsured Employers Benefits Trust Fund, the Subsequent Injuries
Benefits Trust Fund, and the Occupational Safety and Health Fund. The
total amount of the surcharges shall be allocated between
self-insured employers and insured employers in proportion to payroll
respectively paid in the most recent year for which payroll
information is available. The director shall adopt reasonable
regulations governing the manner of collection of the surcharges. The
regulations shall require the surcharges to be paid by self-insurers
to be expressed as a percentage of indemnity paid during the most
recent year for which information is available, and the surcharges to
be paid by insured employers to be expressed as a percentage of
premium. In no event shall the surcharges paid by insured employers
be considered a premium for computation of a gross premium tax or
agents' commission. In no event shall the total amount of the
surcharges paid by insured and self-insured employers exceed the
amounts reasonably necessary to carry out the purposes of this
section.
   (2) The regulations adopted pursuant to paragraph (1) shall be
exempt from the rulemaking provisions of the Administrative Procedure
Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code).
  SEC. 60.  Section 62.9 of the Labor Code is amended to read:
   62.9.  (a) (1) The director shall levy and collect assessments
from employers in accordance with this section. The total amount of
the assessment collected shall be the amount determined by the
director to be necessary to produce the revenue sufficient to fund
the programs specified by Section 62.7, except that the amount
assessed in any year for those purposes shall not exceed 50 percent
of the amounts appropriated from the General Fund for the support of
the occupational safety and health program for the 1993-94 fiscal
year, adjusted for inflation. The director also shall include in the
total assessment amount the department's costs for administering the
assessment, including the collections process and the cost of
reimbursing the Franchise Tax Board for its cost of collection
activities pursuant to subdivision (c).
   (2) The insured employers and private sector self-insured
employers that, pursuant to subdivision (b), are subject to
assessment shall be assessed, respectively, on the basis of their
annual payroll subject to premium charges or their annual payroll
that would be subject to premium charges if the employer were
insured, as follows:
   (A) An employer with a payroll of less than two hundred fifty
thousand dollars ($250,000) shall be assessed one hundred dollars
($100).
   (B) An employer with a payroll of two hundred fifty thousand
dollars ($250,000) or more, but not more than five hundred thousand
dollars ($500,000), shall be assessed two hundred dollars ($200).
   (C) An employer with a payroll of more than five hundred thousand
dollars ($500,000), but not more than seven hundred fifty thousand
dollars ($750,000), shall be assessed four hundred dollars ($400).
   (D) An employer with a payroll of more than seven hundred fifty
thousand dollars ($750,000), but not more than one million dollars
($1,000,000), shall be assessed six hundred dollars ($600).
   (E) An employer with a payroll of more than one million dollars
($1,000,000), but not more than one million five hundred thousand
dollars ($1,500,000), shall be assessed eight hundred dollars ($800).

   (F) An employer with a payroll of more than one million five
hundred thousand dollars ($1,500,000), but not more than two million
dollars ($2,000,000), shall be assessed one thousand dollars
($1,000).
   (G) An employer with a payroll of more than two million dollars
($2,000,000), but not more than two million five hundred thousand
dollars ($2,500,000), shall be assessed one thousand five hundred
dollars ($1,500).
   (H) An employer with a payroll of more than two million five
hundred thousand dollars ($2,500,000), but not more than three
million five hundred thousand dollars ($3,500,000), shall be assessed
two thousand dollars ($2,000).
   (I) An employer with a payroll of more than three million five
hundred thousand dollars ($3,500,000), but not more than four million
five hundred thousand dollars ($4,500,000), shall be assessed two
thousand five hundred dollars ($2,500).
   (J) An employer with a payroll of more than four million five
hundred thousand dollars ($4,500,000), but not more than five million
five hundred thousand dollars ($5,500,000), shall be assessed three
thousand dollars ($3,000).
   (K) An employer with a payroll of more than five million five
hundred thousand dollars ($5,500,000), but not more than seven
million dollars ($7,000,000), shall be assessed three thousand five
hundred dollars ($3,500).
   (L) An employer with a payroll of more than seven million dollars
($7,000,000), but not more than twenty million dollars ($20,000,000),
shall be assessed six thousand seven hundred dollars ($6,700).
   (M) An employer with a payroll of more than twenty million dollars
($20,000,000) shall be assessed ten thousand dollars ($10,000).
   (b) (1) In the manner as specified by this section, the director
shall identify those insured employers having a workers' compensation
experience modification rating of 1.25 or more, and private sector
self-insured employers having an equivalent experience modification
rating of 1.25 or more as determined pursuant to subdivision (e).
   (2) The assessment required by this section shall be levied
annually, on a calendar year basis, on those insured employers and
private sector self-insured employers, as identified pursuant to
paragraph (1), having the highest workers' compensation experience
modification ratings or equivalent experience modification ratings,
that the director determines to be required numerically to produce
the total amount of the assessment to be collected pursuant to
subdivision (a).
   (c) The director shall collect the assessment from insured
employers as follows:
   (1) Upon the request of the director, the Department of Insurance
shall direct the licensed rating organization designated as the
department's statistical agent to provide to the director, for
purposes of subdivision (b), a list of all insured employers having a
workers' compensation experience rating modification of 1.25 or
more, according to the organization's records at the time the list is
requested, for policies commencing the year preceding the year in
which the assessment is to be collected.
   (2) The director shall determine the annual payroll of each
insured employer subject to assessment from the payroll that was
reported to the licensed rating organization identified in paragraph
(1) for the most recent period for which one full year of payroll
information is available for all insured employers.
   (3) On or before September 1 of each year, the director shall
determine each of the current insured employers subject to
assessment, and the amount of the total assessment for which each
insured employer is liable. The director immediately shall notify
each insured employer, in a format chosen by the insurer, of the
insured's obligation to submit payment of the assessment to the
director within 30 days after the date the billing was mailed, and
warn the insured of the penalties for failure to make timely and full
payment as provided by this subdivision.
   (4) The director shall identify any insured employers that, within
30 days after the mailing of the billing notice, fail to pay, or
object to, their assessments. The director shall mail to each of
these employers a notice of delinquency and a notice of the intention
to assess penalties, advising that, if the assessment is not paid in
full within 15 days after the mailing of the notices, the director
will levy against the employer a penalty equal to 25 percent of the
employer's assessment, and will refer the assessment and penalty to
the Franchise Tax Board or another agency for collection. The notices
required by this paragraph shall be sent by United States
first-class mail.
   (5) If an assessment is not paid by an insured employer within 15
days after the mailing of the notices required by paragraph (4), the
director shall refer the delinquent assessment and the penalty to the
Franchise Tax Board, or another agency, as deemed appropriate by the
director, for collection pursuant to Section 19290.1 of the Revenue
and Taxation Code.
   (d) The director shall collect the assessment directly from
private sector self-insured employers. The failure of any private
sector self-insured employer to pay the assessment as billed
constitutes grounds for the suspension or termination of the employer'
s certificate to self-insure.
   (e) The director shall adopt regulations implementing this section
that include provision for a method of determining experience
modification ratings for private sector self-insured employers that
is generally equivalent to the modification ratings that apply to
insured employers and is weighted by both severity and frequency.
   (f) The director shall determine whether the amount collected
pursuant to any assessment exceeds expenditures, as described in
subdivision (a), for the current year and shall credit the amount of
any excess to any deficiency in the prior year's assessment or, if
there is no deficiency, against the assessment for the subsequent
year.
  SEC. 61.  Section 139.48 of the Labor Code is amended to read:
   139.48.  (a) (1) The administrative director shall establish the
Return-to-Work Program in order to promote the early and sustained
return to work of the employee following a work-related injury or
illness.
   (2) This section shall be implemented to the extent funds are
available.
   (b) Upon submission by eligible employers of documentation in
accordance with regulations adopted pursuant to subdivision (h), the
administrative director shall pay the workplace modification expense
reimbursement allowed under this section.
   (c) The administrative director shall reimburse an eligible
employer for expenses incurred to make workplace modifications to
accommodate the employee's return to modified or alternative work, as
follows:
   (1) The maximum reimbursement to an eligible employer for expenses
to accommodate each temporarily disabled injured worker is one
thousand two hundred fifty dollars ($1,250).
   (2) The maximum reimbursement to an eligible employer for expenses
to accommodate each permanently disabled worker who is a qualified
injured worker is two thousand five hundred dollars ($2,500). If the
employer received reimbursement under paragraph (1), the amount of
the reimbursement under paragraph (1) and this paragraph shall not
exceed two thousand five hundred dollars ($2,500).
   (3) The modification expenses shall be incurred in order to allow
a temporarily disabled worker to perform modified or alternative work
within physician-imposed temporary work restrictions, or to allow a
permanently disabled worker who is an injured worker to return to
sustained modified or alternative employment with the employer within
physician-imposed permanent work restrictions.
   (4) Allowable expenses may include physical modifications to the
worksite, equipment, devices, furniture, tools, or other necessary
costs for accommodation of the employee's restrictions.
   (d) This section shall not create a preference in employment for
injured employees over noninjured employees. It shall be unlawful for
an employer to discriminatorily terminate, lay off, demote, or
otherwise displace an employee in order to return an industrially
injured employee to employment for the purpose of obtaining the
reimbursement set forth in subdivision (c).
   (e) For purposes of this section, the following definitions apply:

   (1) "Eligible employer" means any employer, except the state or an
employer eligible to secure the payment of compensation pursuant to
subdivision (c) of Section 3700, who employs 50 or fewer full-time
employees on the date of injury.
   (2) "Employee" means a worker who has suffered a work-related
injury or illness on or after July 1, 2004.
   (f) The administrative director shall adopt regulations to carry
out this section. Regulations allocating budget funds that are
insufficient to implement the workplace modification expense
reimbursement provided for in this section shall include a
prioritization schema.
   (g) The Workers' Compensation Return-to-Work Fund is hereby
created as a special fund in the State Treasury. The fund shall
consist of all penalties collected pursuant to Section 5814.6 and
transfers made by the administrative director from the Workers'
Compensation Administration Revolving Fund established pursuant to
Section 62.5. The fund shall be administered by the administrative
director. Moneys in the fund may be expended by the administrative
director, upon appropriation by the Legislature, only for purposes of
implementing this section.
   (h) This section shall be operative on July 1, 2004.
   (i) This section shall remain in effect only until January 1,
2010, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2010, deletes or extends
that date.
  SEC. 62.  Section 69.9 is added to the Military and Veterans Code,
to read:
   69.9.  (a) On or before January 10, 2009, and on or before January
10 of each year thereafter, the department shall provide the fiscal
committees of both houses of the Legislature with a fiscal estimate
package containing the anticipated budget year costs of carrying out
the current year's level of service as authorized by the Legislature
for the state veterans homes.
   (b) (1) The fiscal estimate package shall include, but not be
limited to, the following information, which shall be provided for
each veterans home:
   (A) An annual resident census by level of care.
   (B) An annual position summary by level of care and nonlevel of
care.
   (C) Operating and equipment expenses, including, but not limited
to, the following:
   (i) Cost adjustments specific to the adjustment in the number of
residents by level of care.
   (ii) Any staff adjustments, whether level of care or nonlevel of
care.
   (D) A fiscal display of any moneys budgeted by the department as
revenues or recoveries to the General Fund.
   (2) Each fiscal estimate package shall include, in addition to the
information provided pursuant to paragraph (1), a description of the
assumptions and methodologies used for calculating the resident
level of care factors, all staffing costs, and operating and
equipment expenses. Fiscal bridge charts shall be included that
display the year-to-year changes in funding levels by funding source.

   (3) The department may provide any additional information as
deemed appropriate to provide a comprehensive fiscal perspective to
the Legislature for the analysis and deliberations for purposes of
appropriation.
   (c) On or before May 15, 2009, and on or before May 15 of each
year thereafter, the department shall provide the fiscal committees
of both houses of the Legislature with an updated fiscal estimate
package that shall include, but is not limited to, an updated fiscal
display of any moneys budgeted by the department as revenues or
recoveries to the General Fund and updated fiscal bridge charts that
display the year-to-year changes in funding levels by funding source.

  SEC. 63.  Section 25416 of the Public Resources Code is amended to
read:
   25416.  (a) The State Energy Conservation Assistance Account is
hereby created in the General Fund. Notwithstanding Section 13340 of
the Government Code, the account is continuously appropriated to the
commission without regard to fiscal year.
   (b) The money in the account shall consist of all money authorized
or required to be deposited in the account by the Legislature and
all money received by the commission pursuant to Sections 25414 and
25415.
   (c) The money in the account shall be disbursed by the Controller
for the purposes of this chapter as authorized by the commission.
   (d) The commission may contract and provide grants for services to
be performed for eligible institutions. Services may include, but
are not limited to, feasibility analysis, project design, field
assistance, and operation and training. The amount expended for those
services may not exceed 10 percent of the balance of the account as
determined by the commission on July 1 of each year.
   (e) The commission may make grants for innovative projects and
programs. The amount expended for grants may not exceed 5 percent of
the annual appropriation from the account.
   (f) The commission may charge a fee for the services provided
under subdivision (d).
   (g) Notwithstanding any other provision of law, the Controller may
use the State Energy Conservation Assistance Account for loans to
the General Fund as provided in Sections 16310 and 16381 of the
Government Code.
  SEC. 64.  Section 281 of the Public Utilities Code is amended to
read:
   281.  Any revenues that are deposited in funds created pursuant to
this chapter shall not be used by the state for any purpose other
than as specified in this chapter. Notwithstanding any other
provision of law, the Controller may use the funds created pursuant
to this chapter for loans to the General Fund as provided in Sections
16310 and 16381 of the Government Code.
  SEC. 65.  Section 18535 of the Revenue and Taxation Code is amended
to read:
   18535.  (a) In lieu of electing nonresident partners filing a
return pursuant to Section 18501, the Franchise Tax Board may,
pursuant to requirements and conditions set forth in forms and
instructions, provide for the filing of a group return for one or
more electing nonresident partners by a partnership doing business
in, or deriving income from, sources in California. The tax rate or
rates applicable to each electing partner's distributive share shall
consist of the highest marginal rate or rates provided by Part 10
(commencing with Section 17001) plus, in the case of any electing
nonresident partner included on the group return who would be subject
to Section 17043 when filing individually, an additional tax rate of
1 percent. Except as provided in subdivision (b), no deductions
shall be allowed except those necessary to determine each partner's
distributive share, and no credits shall be allowed except those
directly attributable to the partnership. As required by the
Franchise Tax Board, the partnership as agent for the electing
partners shall make the payments of tax, additions to tax, interest,
and penalties otherwise required to be paid by the electing partners.

   (b) Deductions provided by Chapter 5 (commencing with Section
17501) of Part 10, attributable to earned income of a partner derived
from a partnership filing a group return on behalf of electing
nonresident partners under subdivision (a), shall be allowed if the
partner certifies, in the form and manner as the Franchise Tax Board
may prescribe, that he or she has no earned income from any other
source.
   (c) This section shall also be applicable to a nonresident
shareholder of a corporation which is treated as an "S" corporation
under Chapter 4.5 (commencing with Section 23800) of Part 11. In that
case, the provisions of subdivisions (a) and (b) are modified to
refer to"shareholder or shareholders" in lieu of "partners" and to "S"
corporation in lieu of "partnership."
   (d) This section shall also be applicable to a nonresident
individual with a membership or economic interest in a limited
liability company, registered limited liability partnership, or
foreign limited liability partnership, which is classified as a
partnership for California tax purposes. In that case, the provisions
of subdivisions (a) and (b) are modified to refer to "holders of a
membership or economic interest" in lieu of "partners" and to
"limited liability companies" in lieu of "partnerships," and
"partnerships" shall include registered limited liability
partnerships and foreign limited liability partnerships.
   (e) The Franchise Tax Board may adjust the income of an electing
nonresident taxpayer included in a group return filed under this
section to properly reflect income under Part 10 (commencing with
Section 17001), including Chapter 11 thereof (commencing with Section
17951), this part (commencing with Section 18401), and Part 11
(commencing with Section 23001), including Chapter 17 thereof
(commencing with Section 25101).
  SEC. 66.  Section 18536 of the Revenue and Taxation Code is amended
to read:
   18536.  (a) In lieu of electing nonresident directors filing a
return pursuant to Section 18501, the Franchise Tax Board may,
pursuant to requirements and conditions set forth in applicable forms
and instructions, provide for the filing of a group return by a
corporation for one or more electing nonresident individuals who
receive wages, salaries, fees, or other compensation from that
corporation for director services, including attendance of board of
directors' meetings that take place in this state. The tax rate or
rates applicable to each director's compensation for services
performed in this state shall consist of highest marginal rate or
rates provided for by Part 10 (commencing with Section 17001) of
Division 2 plus, in the case of any electing nonresident director
included on the group return who would be subject to Section 17043
when filing individually, an additional tax rate of 1 percent and no
deductions or credits shall be allowed.
                    As required by the Franchise Tax Board, the
corporation, as the agent for the electing nonresident directors,
shall make the payments of tax, additions to tax, interest, and
penalties otherwise required to be paid by, or imposed on, the
electing directors.
   (b) The Franchise Tax Board may adjust the income of an electing
nonresident taxpayer included in a group return filed under this
section to properly reflect the income under Part 10 (commencing with
Section 17001) of Division 2.
  SEC. 67.  Section 19011.5 is added to the Revenue and Taxation
Code, to read:
   19011.5.  (a) All payments required by an individual under this
part, regardless of the taxable year to which the payments apply,
made on or after January 1, 2009, shall be electronically remitted to
the Franchise Tax Board in the form and manner prescribed by the
Franchise Tax Board, once any of the following conditions are met by
an individual:
   (1) Any installment payment of estimated tax made pursuant to this
part in excess of twenty thousand dollars ($20,000), or any payment
made pursuant to Section 18567 with regard to an extension of time to
file that exceeds twenty thousand dollars ($20,000), for any taxable
year beginning on or after January 1, 2009.
   (2) The total tax liability exceeds eighty thousand dollars
($80,000) in any taxable year beginning on or after January 1, 2009.
For purposes of this section, total tax liability shall be the total
tax liability as shown on the original return, after any adjustment
made pursuant to Section 19051.
   (b) A taxpayer required to electronically remit payment to the
Franchise Tax Board pursuant to this section may elect to discontinue
making payments electronically where the threshold requirements set
forth in paragraphs (1) and (2) of subdivision (a) were not met for
the preceding taxable year. The election shall be made in a form and
manner prescribed by the Franchise Tax Board.
   (c) Any taxpayer required to electronically remit payment pursuant
to this section who makes payment by other means shall pay a penalty
of 1 percent of the amount paid, unless it is shown that the failure
to make payment as required was for reasonable cause and was not the
result of willful neglect.
   (d) Any taxpayer required to electronically remit payments
pursuant to this section may request a waiver of those requirements
from the Franchise Tax Board. The Franchise Tax Board may grant a
waiver only if it determines that the particular amounts paid in
excess of the threshold amounts established in this section were not
representative of the taxpayer's tax liability. If the Franchise Tax
Board grants a waiver to a taxpayer, the waiver shall be in writing,
and subsequent electronic remittances shall be required only on those
terms set forth in the written waiver.
   (e) For purposes of this section, Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code shall not apply to any standard, criterion, procedure,
determination, rule, notice, or guideline established or issued by
the Franchise Tax Board pursuant to subdivision (a).
   (f) For purposes of this section, both of the following shall
apply:
   (1) "Electronically remit" means to send payment through use of
any of the electronic payment applications provided by the Franchise
Tax Board, including, but not limited to, a pay by phone option, when
made available by the Franchise Tax Board.
   (2) "Pay by phone" means a method that allows a taxpayer to
authorize a transfer of funds from a financial institution using
telephonic technology.
  SEC. 68.  Section 19280 of the Revenue and Taxation Code is amended
to read:
   19280.  (a) (1) Fines, state or local penalties, bail,
forfeitures, restitution fines, restitution orders, or any other
amounts imposed by a superior court of the State of California upon a
person or any other entity that are due and payable in an amount
totaling no less than one hundred dollars ($100), in the aggregate,
for criminal offenses, including all offenses involving a violation
of the Vehicle Code, may, no sooner than 90 days after payment of
that amount becomes delinquent, be referred by the superior court,
the county, or the state to the Franchise Tax Board for collection
under guidelines prescribed by the Franchise Tax Board.
   (2) For purposes of this subdivision:
   (A) The amounts referred by the superior court, the county, or
state under this section may include any amounts that a government
entity may add to the court-imposed obligation as a result of the
underlying offense, trial, or conviction. For purposes of this
article, those amounts shall be deemed to be imposed by the court.
   (B) Restitution orders may be referred to the Franchise Tax Board
only by a government entity, as agreed upon by the Franchise Tax
Board, provided that all of the following apply:
   (i) The government entity has the authority to collect on behalf
of the state or the victim.
   (ii) The government entity shall be responsible for distributing
the restitution order collections, as appropriate.
   (iii) The government entity shall ensure, in making the referrals
and distributions, that it coordinates with any other related
collection activities that may occur by superior courts, counties, or
other state agencies.
   (iv) The government entity shall ensure compliance with laws
relating to the reimbursement of the State Restitution Fund.
   (C) The Franchise Tax Board shall establish criteria for referral,
which shall include setting forth a minimum dollar amount subject to
referral and collection.
   (b) The Franchise Tax Board, in conjunction with the Judicial
Council, shall seek whatever additional resources are needed to
accept referrals from all 58 counties or superior courts.
   (c) Upon written notice to the debtor from the Franchise Tax
Board, any amount referred to the Franchise Tax Board under
subdivision (a) and any interest thereon, including any interest on
the amount referred under subdivision (a) that accrued prior to the
date of referral, shall be treated as final and due and payable to
the State of California, and shall be collected from the debtor by
the Franchise Tax Board in any manner authorized under the law for
collection of a delinquent personal income tax liability, including,
but not limited to, issuance of an order and levy under Article 4
(commencing with Section 706.070) of Chapter 5 of Division 2 of Title
9 of Part 2 of the Code of Civil Procedure in the manner provided
for earnings withholding orders for taxes.
   (d) (1) Part 10 (commencing with Section 17001), this part, Part
10.7 (commencing with Section 21001), and Part 11 (commencing with
Section 23001) shall apply to amounts referred under this article in
the same manner and with the same force and effect and to the full
extent as if the language of those laws had been incorporated in full
into this article, except to the extent that any provision is either
inconsistent with this article or is not relevant to this article.
   (2) Any information, information sources, or enforcement remedies
and capabilities available to the court or the state referring to the
amount due described in subdivision (a), shall be available to the
Franchise Tax Board to be used in conjunction with, or independent
of, the information, information sources, or remedies and
capabilities available to the Franchise Tax Board for purposes of
administering Part 10 (commencing with Section 17001), this part,
Part 10.7 (commencing with Section 21001), or Part 11 (commencing
with Section 23001).
   (e) The activities required to implement and administer this part
shall not interfere with the primary mission of the Franchise Tax
Board to administer Part 10 (commencing with Section 17001) and Part
11 (commencing with Section 23001).
   (f) For amounts referred for collection under subdivision (a),
interest shall accrue at the greater of the rate applicable to the
amount due being collected or the rate provided under Section 19521.
When notice of the amount due includes interest and is mailed to the
debtor and the amount is paid within 15 days after the date of
notice, interest shall not be imposed for the period after the date
of notice.
   (g) In no event shall a collection under this article be construed
as a payment of income taxes imposed under Part 10 (commencing with
Section 17001) or Part 11 (commencing with Section 23001).
  SEC. 69.  Section 19290.1 is added to the Revenue and Taxation
Code, to read:
   19290.1.  (a) Except as otherwise provided by this section,
Section 19290 shall apply to assessments and penalties that are
referred to the Franchise Tax Board for collection pursuant to
Section 62.9 of the Labor Code. These assessments and penalties shall
be deemed for this purpose to be delinquent debts. The collection
agreement described in Section 19290 may be amended to include these
assessments and penalties, or a separate agreement may be entered
into under that section to collect the assessments and penalties. All
payments collected by the Franchise Tax Board pursuant to this
section shall be deposited in the Cal-OSHA Targeted Inspection and
Consultation Fund.
   (b) In the event that an employer, against whom assessments and
penalties as described in subdivision (a) have been levied, notifies
the Franchise Tax Board that there is a disagreement as to the amount
that is due and subject to collection, the Franchise Tax Board may
refer the employer to the Department of Industrial Relations, return
the account to the department, or rescind any collection action that
may have been taken by the board.
   (c) The Franchise Tax Board shall provide the Department of
Industrial Relations with activity reports, no less frequently than
on a quarterly basis, identifying the total amount referred for
collection pursuant to Section 62.9 of the Labor Code, the amount
collected from each employer, and the board's actual costs of
collection. Upon appropriation by the Legislature, the board shall be
reimbursed from the Cal-OSHA Targeted Inspection and Consultation
Fund for its actual costs of collection.
   (d) Notwithstanding any other provision of law, no interest shall
be charged on any assessment or penalty as described in subdivision
(a).
  SEC. 72.  Section 30131.4 of the Revenue and Taxation Code is
amended to read:
   30131.4.  (a) All moneys raised pursuant to taxes imposed by
Section 30131.2 shall be appropriated and expended only for the
purposes expressed in the California Children and Families Act, and
shall be used only to supplement existing levels of service and not
to fund existing levels of service. No moneys in the California
Children and Families Trust Fund shall be used to supplant state or
local General Fund money for any purpose.
   (b) Notwithstanding any other provision of law and the designation
of the California Children and Families Trust Fund as a trust fund,
the Controller may use the money raised pursuant to Section 30131.2
for the California Children and Families Trust Fund and all accounts
created pursuant to subdivision (d) of Section 130105 of the Health
and Safety Code for loans to the General Fund as provided in Sections
16310 and 16381 of the Government Code. Any such loan shall be
repaid from the General Fund with interest computed at 110 percent of
the Pooled Money Investment Account rate, with the interest
commencing to accrue on the date the loan is made from the fund or
account. This subdivision does not authorize any transfer that will
interfere with the carrying out of the object for which this fund or
those accounts were created.
  SEC. 73.  Section 5891 of the Welfare and Institutions Code is
amended to read:
   5891.  (a) The funding established pursuant to this act shall be
utilized to expand mental health services. These funds shall not be
used to supplant existing state or county funds utilized to provide
mental health services. The state shall continue to provide financial
support for mental health programs with not less than the same
entitlements, amounts of allocations from the General Fund and
formula distributions of dedicated funds as provided in the last
fiscal year which ended prior to the effective date of this act. The
state shall not make any change to the structure of financing mental
health services, which increases a county's share of costs or
financial risk for mental health services unless the state includes
adequate funding to fully compensate for such increased costs or
financial risk. These funds shall only be used to pay for the
programs authorized in Section 5892. These funds may not be used to
pay for any other program. These funds may not be loaned to the state
General Fund or any other fund of the state, or a county general
fund or any other county fund for any purpose other than those
authorized by Section 5892.
   (b) Notwithstanding subdivision (a), the Controller may use the
funds created pursuant to this part for loans to the General Fund as
provided in Sections 16310 and 16381 of the Government Code. Any such
loan shall be repaid from the General Fund with interest computed at
110 percent of the Pooled Money Investment Account rate, with
interest commencing to accrue on the date the loan is made from the
fund. This subdivision does not authorize any transfer that would
interfere with the carrying out of the object for which these funds
were created.
  SEC. 74.  Section 6 of Chapter 213 of the Statutes of 2000, as
amended by Section 52 of Chapter 228 of the Statutes of 2003, is
amended to read:
   Sec. 6.  The following sums are hereby appropriated from the
General Fund to be allocated according to the following schedule:
   (a) (1) Five million dollars ($5,000,000) to CaliforniaVolunteers,
on an annual basis, for the purpose of funding grants to local and
state operated Americorps and Conservation Corps programs, up to 5
percent of which may be used for state level administration costs.
   (2) This subdivision shall be inoperative from July 1, 2008, to
June 30, 2010, inclusive.
   (b) (1) Two million five hundred thousand dollars ($2,500,000) to
CaliforniaVolunteers, on an annual basis, for the purpose of funding
grants to local and state operated Americorps and Conservation Corps
programs, up to 5 percent of which may be used for state level
administration costs.
   (2) This subdivision shall be inoperative after June 30, 2010.
   (c) One million dollars ($1,000,000) to the Superintendent of
Public Instruction for the purpose of developing or revising, as
needed, a model curriculum on the life and work of Cesar Chavez and
distributing that curriculum to each school.
  SEC. 75.  Notwithstanding any other provision of law, the
Commission on State Mandates, upon final resolution of any pending
litigation challenging the constitutionality of subdivision (f) of
Section 17556 of the Government Code, shall reconsider its test claim
statement of decision in CSM-4509 on the Sexually Violent Predator
Program to determine whether Chapters 762 and 763 of the Statutes of
1995 and Chapter 4 of the Statutes of 1996 constitute a reimbursable
mandate under Section 6 of Article XIII B of the California
Constitution in light of ballot measures approved by the state's
voters, federal and state statutes enacted, and federal and state
court decisions rendered since these statutes were enacted. The
commission shall, if necessary, issue a statewide cost estimate and
revise its parameters and guidelines in CSM-4509 to be consistent
with this reconsideration and shall, if practicable, include a
reasonable reimbursement methodology as defined in Section 17518.5 of
the Government Code. If the parameters and guidelines are revised,
the Controller shall revise the appropriate claiming instructions to
be consistent with the revised parameters and guidelines. Any changes
by the commission to the original statement of decision in CSM-4509
shall be deemed effective on July 1, 2009.
  SEC. 76.  Section 33 of this act, adding Section 13312 to the
Government Code, shall only become operative if either a Senate
Constitutional Amendment or an Assembly Constitutional Amendment of
the 2007-08 Regular Session that amends Section 12 of Article IV and
Section 20 of Article XVI of, and adds Section 21 to Article XVI of,
the California Constitution, is submitted to, and approved by, the
voters at a statewide election.
  SEC. 77.  The Legislature hereby finds and declares that the
amendments made by this act to Section 76104.6 of the Government Code
furthers the DNA Fingerprint, Unresolved Crime and Innocence
Protection Act enacted by the approval of Proposition 69 at the
November 3, 2004, general election, and is consistent with its
purposes.
  SEC. 78.  The Legislature hereby finds and declares that the
amendments made by Section 72 of this act to Section 30131.4 of the
Revenue and Taxation Code furthers the California Children and
Families First Act of 1998 enacted by the approval of Proposition 10
at the November 3, 1998, general election, and is consistent with its
purposes.
  SEC. 79.  The Legislature hereby finds and declares that the
amendments made by Section 73 of this act to Section 5891 of the
Welfare and Institutions Code furthers the Mental Health Services Act
enacted by the approval of Proposition 63 at the November 2, 2004,
general election, and is consistent with its purposes.
  SEC. 80.  In addition to the appropriations described in Sections
22954, 22954.5, and 22955 of the Education Code, it is the intent of
the Legislature to appropriate in the Budget Act of 2009 a total of
up to three million dollars ($3,000,000) to augment state
appropriations that were transferred to the Teachers' Retirement Fund
pursuant to Sections 22954 and 22955 in prior fiscal years. It is
the intent of the Legislature that an appropriation in the 2009-10
fiscal year will provide contributions to the system related to
creditable compensation in the 2005-06 and 2006-07 fiscal years that
was reported by the system to the Department of Finance prior to
passage of this act, but which was not reported by the system to the
Department of Finance in a timely fashion after the end of those
fiscal years, and that, accordingly, will not have resulted in a
transfer from the General Fund to the Teachers' Retirement Fund prior
to July 1, 2009.
  SEC. 81.  It is the intent of the Legislature that Sections 4 to
17, inclusive, and Section 80 of this act constitute a comprehensive
package of modifications to appropriations for, and benefits of, the
State Teachers' Retirement System. It is the intent of the
Legislature that this comprehensive package of modifications provides
members of the State Teachers' Retirement System with comparable new
advantages for members of the system in accordance with the standard
articulated in Allen v. Long Beach (1955) 45 Cal. 2d 128.
Accordingly, the Legislature finds and declares that Sections 5, 6,
9, 10, 13, 14, 15, 16, and 80 of this act would not have been enacted
except for their inclusion as part of this comprehensive package,
and, therefore, it is the intent of the Legislature that these
sections of the act not be interpreted as separable from one another.

  SEC. 82.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because a
local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act, within the meaning of Section
17556 of the Government Code.
  SEC. 83.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.
  SEC. 84.  This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
   In order to make necessary statutory changes to implement the
Budget Act of 2008 at the earliest possible time, it is necessary
that this bill go into effect immediately.