BILL ANALYSIS                                                                                                                                                                                                    


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                              CONFERENCE COMPLETED

          Bill No:  AB 1781
          Author:   Assembly Budget Committee
          Amended:  Conference Report No. 1
          Vote:     27 - Urgency


          CONFERENCE COMMITTEE VOTE  :  4-2, 7/14/08
          AYES:  Ducheny, Machado, Laird, Leno
          NOES:  Dutton, Laird

           SUBJECT  :    2008 State Budget

           SOURCE  :     Author

           DIGEST  :     Conference Amendments  delete the prior version  
          of the bill expressing the intent of the Legislature to  
          enact changes relating to the Budget Act of 2008 and,  
          instead, provide for the specifics of the Budget Act of  
          2008-09.  This conference report, combined with changes  
          proposed in AB 88, will comprise the Budget Act of 2008.

          The Conference Report enacts the 2000 State budget 

          NOTE:  Refer to the Senate Budget and Fiscal Review  
          Committee analysis for details of the budget.

           ANALYSIS  :    This bill provides for a balanced budget as  
          required by the State Constitution.  The budget, also  
          modified by changes proposed in AB 88, is based on $105.3  


                                                               AB 1781

          billion in available General fund resources, and contains  
          $103.4 billion in expenditures.  The final General Fund  
          Reserve is approximately $1 billion.  In terms of all funds  
          (General Fund, special funds, and select bond funds) the  
          proposed budget is approximately $140 billion.

           Budget Process Overview

           With the submission of the Governor's Budget, which is  
          required by January 10 of each year, the chair of the  
          Senate Budget and Fiscal Review and Assembly Budget  
          Committees each introduce a Budget Bill which contains  
          appropriations to finance the program levels proposed in  
          the Governor's budget.  Throughout the spring, and with the  
          assistance of committee consultants and the Legislative  
          Analyst, who prepares a detailed analysis of the Governor's  
          budget, the fiscal committees of each house of the  
          Legislature hold hearings to determine if changes should be  
          made in the Governor's budget.  At these hearings,  
          representatives from the state department whose budget is  
          being heard, the Department of Finance (DOF), the  
          Legislative Analyst, and the public may be called upon to  
          provide official testimony.

          Changes desired by the Administration concerning events  
          occurring after the Governor's budget are submitted and  
          included in "Finance Letters" addressed to and considered  
          by the Senate Budget and Fiscal Review Committee and the  
          Assembly Budget Committee.

          In mid-May, the DOF updates its estimates of current year  
          and budget year revenues, expenditures (including any final  
          Administration expenditure proposals) and surplus.  This  
          provides the Legislature with the most current estimate of  
          resources that will be available for expenditure.

          At the completion of the hearings, the Senate and the  
          Assembly passes its Budget Bill.  A Conference Committee of  
          six legislators is chosen to receive differences in the two  
          bills and to incorporate a "Conference Committee Version"  
          into one of the bills.  The bill is then sent to the floor  
          of both the Senate and the Assembly and, if passed by  
          two-thirds, is enrolled and sent to the Governor.  If it is  
          not passed, a new Conference Committee is formed and the  



                                                               AB 1781

          conference process is repeated.  Sometimes it has become  
          necessary for the Senate Pro Tem, Assembly Speaker, Senate  
          Minority Leader, Assembly Minority Leader, and the Governor  
          to meet to resolve major issues.  The Legislature is  
          required under the State Constitution to pass the Budget by  
          June 15th of each year.

          Upon receipt of the Budget Bill, the Governor meets with  
          his advisors to make reductions or eliminate particular  
          items of expenditure (known as the item-veto).  The  
          Governor then signs the Budget Bill and it becomes the  
          Budget Act.  Under the State Constitution, the Governor  
          must sign the Budget by June 30th of each year.  The  
          Legislature may then consider overriding any vetoes the  
          Governor has made and may do so by a two-thirds vote of  
          each house.  
           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

          DLW:cm  8/28/08   Senate Floor Analyses 


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