BILL NUMBER: SCA 13 CHAPTERED
BILL TEXT
CHAPTER 144
FILED WITH SECRETARY OF STATE SEPTEMBER 17, 2008
PASSED THE SENATE SEPTEMBER 16, 2008
PASSED THE ASSEMBLY SEPTEMBER 16, 2008
AMENDED IN SENATE SEPTEMBER 15, 2008
AMENDED IN SENATE AUGUST 29, 2008
AMENDED IN SENATE MAY 8, 2008
AMENDED IN SENATE JULY 25, 2007
INTRODUCED BY Senator Ashburn
MAY 31, 2007
A resolution to propose to the people of the State of California
an amendment to the Constitution of the State, by amending Section 12
of Article IV thereof, and by amending Section 20 of, and adding
Section 21 to, Article XVI thereof, relating to state finance.
LEGISLATIVE COUNSEL'S DIGEST
SCA 13, Ashburn. State finance.
Existing provisions of the California Constitution require the
Governor to submit to the Legislature, within the first 10 days of
each calendar year, a proposed budget for the ensuing fiscal year
containing itemized statements for recommended state expenditures and
estimated state revenues. In addition, the Constitution prohibits
the Legislature from passing, and the Governor from signing, a Budget
Bill that would appropriate from the General Fund a total amount
that, when combined with all appropriations from the General Fund for
that fiscal year made as of the date of the Budget Bill's passage,
and the amount of any General Fund moneys transferred to a reserve
account, exceeds estimated General Fund revenues for that fiscal
year. The estimate of General Fund revenues is required to be set
forth in the Budget Bill.
This measure would require the Governor in his or her proposed
budget to identify estimated total state resources available to meet
recommended state expenditures and to further identify the amount of
those resources that are anticipated to be one-time resources. The
measure would prohibit passage of a Budget Bill that appropriates an
amount that, when combined with prior appropriations and transfers to
the reserve account, exceeds the estimate of General Fund revenues,
transfers, and balances available from the prior fiscal year. The
measure would require the estimate of General Fund revenues,
transfers, and balances to be set forth in the Budget Bill.
Existing provisions of the California Constitution establish the
Budget Stabilization Account in the General Fund and currently
require the Controller, no later than September 30 of each year, to
transfer from the General Fund to the account a sum equal to 3% of
the estimated amount of General Fund revenues for the current fiscal
year. This transfer of moneys is not required, unless otherwise
directed by the Legislature by statute, in any fiscal year to the
extent that the resulting balance in the account would exceed 5% of
the General Fund revenues estimate set forth in the Budget Bill for
that fiscal year, as enacted, or $8,000,000,000, whichever is
greater. This transfer of moneys also may be suspended or reduced for
a fiscal year as specified by an executive order issued by the
Governor no later than June 1 of the preceding fiscal year. Of the
moneys transferred to the account in each fiscal year, 50%, up to an
aggregate amount of $5,000,000,000 for all fiscal years, is deposited
in the Deficit Recovery Bond Retirement Sinking Fund Subaccount and
continuously appropriated to the Treasurer for the purpose of
retiring deficit recovery bonds. All other moneys transferred to the
account in a fiscal year are not deposited in the sinking fund
subaccount and may, by statute, be transferred back to the General
Fund.
This measure would rename this account the Budget Stabilization
Fund. This measure would also provide that the transfer of moneys
from the General Fund to the Budget Stabilization Fund is not
required in any fiscal year to the extent that the resulting balance
in the fund would exceed 12.5% of the General Fund revenues estimate
set forth in the Budget Bill for that fiscal year, as enacted, and
would delete the alternative $8,000,000,000 limit on the fund. This
measure would provide that, beginning with the 2010-11 fiscal year,
the transfer of moneys from the General Fund to the fund may be
suspended or reduced by executive order only for a fiscal year in
which the estimated General Fund revenues, transfers, and balances
available from the prior fiscal year are less than the total General
Fund expenditures for the immediately preceding fiscal year as
adjusted for changes in population and the cost of living, as
defined. In addition, this measure would provide that funds not
deposited in the sinking fund subaccount may be transferred from the
Budget Stabilization Fund back to the General Fund by a statute
containing no unrelated provisions, and that funds in the Budget
Stabilization Fund may be loaned to the General Fund to address a
General Fund cashflow deficit.
This measure would require the Director of Finance, on or before
May 29 of each year, to report to the Legislature and the Governor an
estimate of the amount of General Fund revenues, transfers, and
balances available from the prior fiscal year for the current fiscal
year and the impact of tax legislation adopted during the current
fiscal year subsequent to the enactment of the Budget Bill. The
measure would provide that if, pursuant to a formula based on those
estimates, there are unanticipated revenues in the current fiscal
year, those revenues may be used only for specified purposes, and in
a specified order of priority.
Resolved by the Senate, the Assembly Concurring, That the
Legislature of the State of California at its 2007-08 Regular Session
commencing on the fourth day of December 2006, two-thirds of the
membership of each house concurring, hereby proposes to the people of
the State of California that the Constitution of the State be
amended as follows:
First-- That Section 12 of Article IV thereof is amended to read:
SEC. 12. (a) Within the first 10 days of each calendar year,
the Governor shall submit to the Legislature, with an explanatory
message, a budget for the ensuing fiscal year containing itemized
statements for recommended state expenditures and estimated total
state resources available to meet those expenditures. If recommended
expenditures exceed estimated resources, the Governor shall recommend
the sources from which the additional resources should be provided.
The itemized statement of estimated total state resources available
to meet recommended expenditures submitted pursuant to this
subdivision shall identify the amount, if any, of those resources
anticipated to be one-time resources.
(b) The Governor and the Governor-elect may require a state
agency, officer, or employee to furnish whatever information is
deemed necessary to prepare the budget.
(c) (1) The budget shall be accompanied by a budget bill itemizing
recommended expenditures.
(2) The budget bill shall be introduced immediately in each house
by the persons chairing the committees that consider the budget.
(3) The Legislature shall pass the budget bill by midnight on June
15 of each year.
(4) Until the budget bill has been enacted, the Legislature shall
not send to the Governor for consideration any bill appropriating
funds for expenditure during the fiscal year for which the budget
bill is to be enacted, except emergency bills recommended by the
Governor or appropriations for the salaries and expenses of the
Legislature.
(d) No bill except the budget bill may contain more than one item
of appropriation, and that for one certain, expressed purpose.
Appropriations from the General Fund of the State, except
appropriations for the public schools, are void unless passed in each
house by rollcall vote entered in the journal, two-thirds of the
membership concurring.
(e) The Legislature may control the submission, approval, and
enforcement of budgets and the filing of claims for all state
agencies.
(f) For the 2004-05 fiscal year, or any subsequent fiscal year,
the Legislature may not send to the Governor for consideration, nor
may the Governor sign into law, a budget bill that would appropriate
from the General Fund, for that fiscal year, a total amount that,
when combined with all appropriations from the General Fund for that
fiscal year made as of the date of the budget bill's passage, and the
amount of any General Fund moneys transferred to the Budget
Stabilization Fund for that fiscal year pursuant to Section 20 of
Article XVI, exceeds General Fund revenues, transfers, and balances
available from the prior fiscal year for that fiscal year estimated
as of the date of the budget bill's passage. That estimate of General
Fund revenues, transfers, and balances shall be set forth in the
budget bill passed by the Legislature.
Second-- That Section 20 of Article XVI thereof is amended to
read:
SEC. 20. (a) The Budget Stabilization Fund is hereby created
in the General Fund.
(b) In each fiscal year as specified in paragraphs (1) to (3),
inclusive, the Controller shall transfer from the General Fund to the
Budget Stabilization Fund the following amounts:
(1) No later than September 30, 2006, a sum equal to 1 percent of
the estimated amount of General Fund revenues for the 2006-07 fiscal
year.
(2) No later than September 30, 2007, a sum equal to 2 percent of
the estimated amount of General Fund revenues for the 2007-08 fiscal
year.
(3) No later than September 30, 2008, and annually thereafter, a
sum equal to 3 percent of the estimated amount of General Fund
revenues for the current fiscal year.
(c) The transfer of moneys shall not be required by subdivision
(b) in any fiscal year to the extent that the resulting balance in
the Budget Stabilization Fund would exceed 12.5 percent of the
General Fund revenues estimate set forth in the budget bill for that
fiscal year, as enacted. The Legislature may, by statute, direct the
Controller, for one or more fiscal years, to transfer into the Budget
Stabilization Fund amounts in excess of the levels prescribed by
this subdivision.
(d) Subject to any restriction imposed by this section, funds
transferred to the Budget Stabilization Fund shall be deemed to be
General Fund revenues for all purposes of this Constitution.
(e) The transfer of moneys from the General Fund to the Budget
Stabilization Fund may be suspended or reduced for a fiscal year as
specified by an executive order issued by the Governor no later than
June 1 of the preceding fiscal year. For a fiscal year commencing on
or after July 1, 2010, this subdivision shall be operative only if
the estimated General Fund revenues, transfers, and balances
available from the prior fiscal year for that fiscal year are less
than the total General Fund expenditures for the immediately
preceding fiscal year adjusted for the change in population and the
change in the cost of living for the State, as those terms are
defined in Section 8 of Article XIII B, between the immediately
preceding fiscal year and the fiscal year in which the transfer is
made. For purposes of this subdivision, "General Fund revenues,
transfers, and balances available from the prior fiscal year for that
fiscal year" does not include revenues transferred from the General
Fund to the Budget Stabilization Fund pursuant to subdivision (b) for
that fiscal year, and "total General Fund expenditures for the
immediately preceding fiscal year" does not include the expenditure
of unanticipated revenues pursuant to Section 21.
(f) (1) Of the moneys transferred to the Budget Stabilization Fund
in each fiscal year, 50 percent, up to the aggregate amount of five
billion dollars ($5,000,000,000) for all fiscal years, shall be
deposited in the Deficit Recovery Bond Retirement Sinking Fund
Subaccount, which is hereby created in the Budget Stabilization Fund
for the purpose of retiring deficit recovery bonds authorized and
issued as described in Section 1.3, in addition to any other payments
provided for by law for the purpose of retiring those bonds. The
moneys in the sinking fund subaccount are continuously appropriated
to the Treasurer to be expended for that purpose in the amounts, at
the times, and in the manner deemed appropriate by the Treasurer. Any
funds remaining in the sinking fund subaccount after all of the
deficit recovery bonds are retired shall be transferred to the Budget
Stabilization Fund, and may be transferred to the General Fund
pursuant to paragraph (2).
(2) All other funds transferred to the Budget Stabilization Fund
in a fiscal year shall not be deposited in the sinking fund
subaccount and may be transferred to the General Fund by a statute
that contains no unrelated provisions.
(g) In addition to any transfer authorized by this section, funds
in the Budget Stabilization Fund may be loaned to the General Fund to
address a General Fund cashflow deficit.
Third-- That Section 21 is added to Article XVI thereof, to read:
SEC. 21. (a) On or before May 29 of each year, the Director of
Finance shall do both of the following:
(1) Estimate General Fund revenues, transfers, and balances
available from the prior fiscal year for the current fiscal year and
report that estimate to the Legislature and the Governor.
(2) Estimate the current fiscal year General Fund revenue impact
of tax legislation enacted subsequent to the enactment of the budget
bill for the current fiscal year and not included in the estimate
required by subdivision (f) of Section 12 of Article IV, and report
that estimate to the Legislature and the Governor.
(b) For purposes of this section, "unanticipated revenues" for a
fiscal year shall be calculated as follows:
(1) The Director of Finance shall increase or decrease the
estimate of General Fund revenues, transfers, and balances available
from the prior fiscal year set forth in the budget bill for the
current fiscal year pursuant to subdivision (f) of Section 12 of
Article IV to reflect the current fiscal year General Fund revenue
impact of tax legislation reported pursuant to paragraph (2) of
subdivision (a).
(2) "Unanticipated revenues" shall be that amount of General Fund
revenues equal to the amount, if any, by which the estimate of
General Fund revenues, transfers, and balances available from the
prior fiscal year reported pursuant to paragraph (1) of subdivision
(a) exceeds 105 percent of the amount derived pursuant to paragraph
(1) of this subdivision.
(c) After the date of the reports described in subdivision (a),
unanticipated revenues may be used only as follows:
(1) Unanticipated revenues shall be appropriated to satisfy any
additional General Fund obligation, arising under Section 8 as a
result of the unanticipated revenues, including any maintenance
factor allocation for the current fiscal year required pursuant to
subdivision (e) of Section 8, that exceeds an amount equal to 5
percent of the estimate of General Fund revenues, transfers, and
balances available from the prior fiscal year for the current fiscal
year set forth in the enacted budget bill pursuant to subdivision (f)
of Section 12 of Article IV.
(2) Any unanticipated revenues remaining after any appropriations
described in paragraph (1) shall be transferred by statute to the
Budget Stabilization Fund, up to the amount needed to increase the
balance in the fund to an amount equal to 12.5 percent of the
estimate of General Fund revenues and transfers as set forth in the
enacted budget bill for that fiscal year.
(3) Any unanticipated revenues remaining after any appropriations
and transfers described in paragraphs (1) and (2) shall be
appropriated to retire outstanding budgetary obligations. For
purposes of this paragraph, "budgetary obligations" means any of the
following:
(A) Unfunded prior fiscal year General Fund obligations pursuant
to Section 8.
(B) Any repayment obligations created by the suspension of
subparagraph (A) of paragraph (1) of subdivision (a) of Section 25.5
of Article XIII.
(C) Any repayment obligations created by the suspension of
subdivision (a) of Section 1 of Article XIX B.
(D) Bonded indebtedness authorized pursuant to Section 1.3.
(4) Any unanticipated revenues remaining after any appropriations
and transfers described in paragraphs (1), (2), and (3) are made to
retire all outstanding budgetary obligations shall be used as
follows:
(A) Transfer by statute to the Budget Stabilization Fund.
(B) Appropriation for one-time infrastructure or other capital
outlay purposes.
(C) Appropriation to retire, redeem, or defease outstanding
general obligation or other bonded indebtedness of the State.
(D) Return to taxpayers within the current or immediately
following fiscal year by a one-time revision of tax rates or fee
schedules.
(E) Appropriation for unfunded liabilities for vested nonpension
benefits for state annuitants.