SB 77 Senate Bill

BILL NUMBER: SB 77
VETOED DATE: 08/24/2007

Arnold SchwarzeneggerAugust 24, 2007
Governor

State of California
Governor's Office

I object to the following appropriations contained in Senate Bill 77.

Item 0250-001-0001 For support of Judicial Branch. I revise this
item by deleting Provision 5.

I am deleting Provision 5, which would state the Legislature s intent
that the Administrative Office of the Courts (AOC) prioritize
existing resources to provide a $5 increase to the hourly rates paid
to attorneys in the Court Appointed Counsel Program (Program). A
study of the Program s attorney rates is currently underway and is
due to be completed by the end of August 2007. To the extent that
the study justifies rate increases, the AOC has the ability to
provide increases commensurate with the needs as determined by the
study.

Item 0250-101-0932 For local assistance, Judicial Branch. I reduce
this item from $3,056,153,000 to $3,035,796,000 by reducing:

(1)45.10-Support for Operation of the Trial Courts from
$2,632,142,000 to $2,611,785,000;

and by revising Provision 4.

I am reducing this item by $20,357,000, which includes a reduction of
$17,377,000 for funding to support the implementation of the Omnibus
Conservatorship and Guardianship Reform Act of 2006 (Act) and a
reduction of $2,980,000 for one month of savings related to the 50
new trial court judgeships established in 2006-07. It is my
intention for the Judicial Branch to delay implementation of the Act
until the 200809 fiscal year. Due to the timing of appointments and
hiring, one month of the funding for new judgeships will not be
necessary in 200708. These reductions are necessary in order to
further build a prudent reserve in light of the various uncertainties
in revenues and spending that we face this year.

I am revising Provision 4, which would require the Judicial Council
to allocate not less than $5,250,000 for court interpreter pay
increases and other recruiting and retention incentives. Requiring
the Judicial Council to allocate funds for court interpreter
recruiting and retention incentives would alter the collective
bargaining process by shifting the focus from the actual need for pay
increases and other recruiting and retention measures, as negotiated
through the normal process, to the minimum level of funding
allocated.

Provision 4 is revised as follows:

The funds appropriated in Schedule (4) shall be for payments for
services of contractual court interpreters, and certified and
registered court interpreters employed by the courts, and the
following court interpreter coordinators: 1.0 each in counties of the
1st through the 15th classes, 0.5 each in counties of the 16th
through the 31st classes, and 0.25 each in counties of the 32nd
through the 58th classes. For the purposes of this provision, court
interpreter coordinators may be full- or part-time court employees,
or those contracted by the court to perform these services.

The Judicial Council shall set statewide or regional rates and
policies for payment of court interpreters, not to exceed the rate
paid to certified interpreters in the federal court system.
The Legislature finds and declares that there exists a shortage in
the availability of certified and registered interpreters in the
state courts that reduces the state s ability to provide meaningful
access to justice for all court users, including parties, witnesses,
and victims. Therefore, every effort must be made to recruit and
retain qualified interpreters to work in the state courts.

Of the amount appropriated in Schedule (4), not less than five
million dollars ($5,000,000), not including funds provided pursuant
to Section 77202 of the Government Code, shall be provided to the
trial courts for the purpose of adjusting or creating pay ranges for
court interpreter employees that, at the top of the range, do not
exceed the top step of the full performance range for staff
interpreters in the Federal Courts as of the effective date of this
provision. The establishment of pay ranges and their application to
specific employee classifications shall be subject to meet and confer
in good faith as provided in Chapter 7.5 (commencing with
Section 71800) of Title 8 of the Government Code. The Judicial
Council shall adjust statewide or regional rates for contract court
interpreters in a manner that is equivalent to the average rate of
increase provided to court interpreter employees. The Judicial
Council shall notify the courts in each region of the availability of
these funds for the purposes set forth in this provision, and shall
allocate the funds upon notification that ranges and salary
adjustments have been established and implemented as provided herein.
In no event shall the daily rate set by the Judicial Council for
contract interpreters exceed the equivalent median wage of court
interpreters employed by the courts in each region.

Of the amount appropriated in Schedule (4), the Judicial Council
shall allocate not less than two hundred fifty thousand dollars
($250,000) to develop and make available to trial courts, interpreter
training and recruitment programs including, but not limited to: 1)
training programs designed for working interpreters who are subject
to new certification exams in Russian, Western Armenian, Mandarin,
Cambodian and Punjabi; 2) certification exam preparation courses for
all languages subject to state certification exams; and 3)
development of mentoring and internship programs in the trial courts
for exam candidates attending educational institutions that train
legal interpreters, subject to meet and confer in good faith as
provided in Chapter 7.5 (commencing with Section 71800) of Title 8 of
the Government Code. The Judicial Council shall adopt appropriate
rules and procedures for the administration of these funds. The
Judicial Council shall report to the Legislature and Director of
Finance annually regarding expenditures from this schedule, which
shall also include a report of expenditures for; equivalent work days
of, non-certified and non-registered contract interpreters that
provide interpretation services in the state trial courts; and number
of interpreter vacancies filled.

Item 0250-111-0001 For local assistance, Judicial Branch. I reduce
this item from $1,813,729,000 to $1,793,372,000.

I am reducing this item by $20,357,000 to conform with the action
taken in Item 02501010932.

Item 0530-001-9732 For support of Secretary of Health and Human
Services Agency. I reduce this item from $182,976,000 to
$177,841,000 by reducing:

(1)30-Office of Systems Integration from $182,976,000 to
$177,841,000.

This reduction conforms to the action taken in Item 5180-151-0001.

Item 0540-492 Reappropriation, Secretary for Resources. I revise
this item by deleting Schedule 1.

Notwithstanding any other provision of law, the period to liquidate
encumbrances of the following citations is extended to June 30, 2008:
0001-General Fund
(1) Item 0540-101-0001, Budget Act of 1999 (Ch. 50, Stats. 1999), as
reappropriated by Item 0540-492, Budget Act of 2002 (Ch. 379,
Stats. 2002), Item 0540-490, Budget Acts of 2003 (Ch. 157,
Stats. 2003), 2005 (Chs. 38 and 39, Stats. 2005), and 2006 (Chs.
47 and 48, Stats. 2006), and Item 0540491, Budget Act of 2004
(Ch. 208, Stats. 2004)
(2) Item 0540-101-0001, Budget Act of 2000 (Ch. 52, Stats. 2000), as
reappropriated by Item 0540-490, Budget Acts of 2003 (Ch. 157,
Stats. 2003), 2005 (Chs. 38 and 39, Stats. 2005), and 2006 (Chs. 47
and 48, Stats. 2006) and Item 0540-491, Budget Act of 2004 (Ch. 208,
Stats. 2004)
(3) Item 0540-101-0001, Budget Act of 2001 (Ch. 106, Stats. 2001), as
reappropriated by Item 0540-491, Budget Act of 2004 (Ch. 208,
Stats. 2004), and Item 0540-490, Budget Acts of 2005 (Chs. 38 and 39,
Stats. 2005) and 2006 (Chs. 47 and 48, Stats. 2006)

I am eliminating the expenditure availability for two projects funded
from the Coastal Resources Grant program. Funds for these projects
have been available since 1999 and no funds have been expended on
either project as required by the grant agreements. Several
obstacles remain, making progress on these projects unlikely in the
near future. Consequently, it would not be prudent to continue
earmarking General Fund for these projects. This action will result
in $577,500 of General Fund savings.

Item 0552-001-0001 For support of the Office of the Inspector
General. I reduce this item from $19,265,000 to $18,306,000 by
reducing:

(1)10-Office of Inspector General from $19,265,000 to $18,306,000,

and by deleting Provision 1.

I am deleting the $959,000 augmentation for the Office of the
Inspector General (OIG) to implement their review of all candidates
for superintendent in Division of Juvenile Justice facilities.
Superintendent review was mandated by Chapter 709, Statutes of 2006
(AB 971). While I believe these activities are important, I am
directing the OIG to delay implementation of this measure in order to
further build a prudent reserve in light of the various
uncertainties in revenues and spending that we face this year.

Provision 1 would require the OIG to complete a study of custody
resources within the California Department of Corrections and
Rehabilitation s (CDCR) budget related to the transfer of various
medical guarding and transportation positions within the CDCR. I am
concerned about the large number of programs being created and
expanded within the OIG. The Budget includes additional resources
for audits and investigations, auditing the budget of the California
Prison Receivership, monitoring compliance with court orders in the
Armstrong case, and chairing the California Rehabilitation Oversight
Board created by Chapter 7, Statutes of 2007 (AB 900). Because of
the increased workload requirements within their programmatic
expansions and responsibilities, the OIG will not be able to complete
this study. However, I am directing the CDCR s reactivated Program
Support Unit, whose historical responsibilities have included
studying and making recommendations on custody staffing levels within
the CDCR, to conduct this study.

Item 0690-002-0001 For Support of Office of Emergency Services. I
delete Provision 4.

I am deleting Provision 4, which specifies that the duties and
responsibilities of the State AntiGang Coordinator will be subject to
additional definition in legislation. However, I will continue to
work with the Legislature to further define the role of the
Coordinator to assist state and local agencies in combating gang
violence.

Item 0690-102-0214 For local assistance, Office of Emergency
Services. I delete Provision 1.

I am deleting Provision 1, which specifies that funds for grants to
cities and communitybased organizations are for gang prevention,
intervention, reentry, education, job training and skills
development, and family and community services. In addition, the
language in Provision 1 specifies that none of the funds can be used
for law enforcement suppression activities or frontline police
services.

While prevention and intervention are necessary components of a
comprehensive antigang strategy, so is suppression. Therefore, I am
vetoing Provision 1 and directing the State AntiGang Coordinator to
draft and provide cities with grant instructions specifying that
suppression activities are an allowable use of the funds, along with
the other activities listed in Provision 1.

Item 0820-001-0001 For support of Department of Justice. I revise
this item from $404,237,000 to $403,237,000, by reducing:

(8)45-Public Rights from $92,478,000 to $89,312,000;

(15)Amount payable from Hazardous Waste Control Account (Item
0820-001-0014) from $1,973,000 to -$987,000;

(26)Amount payable from the Toxic Substances Control Account
(Item 08200010557) $2,361,000 to -$1,181,000;

and by deleting Provision 12.

I am deleting the $1,000,000 legislative augmentation that would have
provided funding for the Department of Justice (DOJ) to
independently pursue climate change litigation as the plaintiff on
behalf of the state. In the area of law related to climate change,
the Air Resources Board (ARB) is the state agency with the
responsibility to oversee litigation in that arena and has the funds
to request the DOJ to pursue such litigation.

I am deleting Provision 12 to conform to this action.

I am reducing the Environmental Law Section's appropriations from the
Hazardous Waste Control Account and the Toxic Substances Control
Account by a total of $2,166,000 to reflect half-year funding for the
program, and I urge the Legislature to pass legislation that
redirects these funds to the California Environmental Protection
Agency's (Cal/EPA) and the Department of Toxic Substances Control's
(DTSC) green chemistry initiative and returns the litigation
oversight role in hazardous waste cases to Cal/EPA and DTSC. DTSC is
increasingly turning to our local government partners and district
attorneys to enforce California s hazardous waste laws. In addition,
Cal/EPA and DTSC are developing a green chemistry initiative that
will change the paradigm of toxic and chemical use and enforcement in
California. The combination of these activities will improve our
environment and human health through greater enforcement of current
hazardous waste laws and usher in a new future to the approach of
chemical use in California. In addition, when developing the 2008-09
Budget, we will review the litigation needs in this area and budget
the necessary funds for legal services within DTSC's budget.

I am sustaining the $541,000 legislative augmentation for the first
year of a multi-year project to update the DOJ Automated Firearms
Systems database. However, I am concerned that there has been no
review done to ensure the information technology solution addresses
the program needs. In addition, I am concerned that competing
demands for the Dealers' Record of Sale Special Account funds could
necessitate an increase in fees on the sale of firearms. Therefore,
in addition to having an approved feasibility study report prior to
expending any funds, I am also requesting the DOJ to provide the
Department of Finance and the Legislature with a long-term analysis
of the fund, including any known pressures on that fund, to ensure
that there are sufficient resources to cover the program costs
without necessitating a fee increase.

Item 0820-001-0014 For support of Department of Justice. I reduce
this item from $1,973,000 to $987,000.

I am revising this item to conform to the action I have taken in Item
0820-001-0001.

Item 0820-001-0557 For support of Department of Justice. I reduce
this item from $2,361,000 to $1,181,000.

I am revising this item to conform to the action I have taken in Item
0820-001-0001.

Item 0855-101-0367 For local assistance, California Gambling Control
Commission. I reduce this item from $30,283,000 to $283,000 and
delete Provision 1.

I am deleting the $30,000,000 for grants to local government agencies
to mitigate the impacts on the local governments by tribal casinos.
As evidenced in a recent Bureau of State Audits report, there is
great concern regarding whether these funds are being used solely for
their intended purpose, which is to mitigate the impacts of having
tribal casinos in their communities. I will support legislation that
includes an appropriation for mitigation funds if the process is
reformed.

I am deleting Provision 1 to conform to this action.

With this reduction, there still remains $283,000 for payment to Del
Norte County which reflects local mitigation grant funding not
received by Del Norte County from the Indian Gaming Special
Distribution Fund in fiscal years 2003-04, 2004-05, and 2005-06.

Item 0860-001-0001 For support of State Board of Equalization. I
reduce this item from $218,835,000 to $218,435,000 by reducing:

(2)300000-Operating Expense and Equipment from $96,269,000 to
$95,869,000,

and by deleting Provision 3.

I am deleting this legislative augmentation of $400,000 for a county
assessor pilot program designed to promote taxpayer awareness of the
requirement to pay use tax on non-exempt purchases if sales tax has
not been paid. This reduction is necessary to limit program
expansions and provide for a prudent General Fund reserve in light of
the various uncertainties in revenues and spending that we face this
year.

Item 0890-001-0001 For support of Secretary of State. I reduce this
item from $48,157,500 to $47,822,000 by reducing:

(2)20-Elections from $46,933,500 to $46,598,000.

I am deleting the $335,500 legislative augmentation for 4.0 positions
which would provide staffing to expand voter outreach and education
efforts to support the three elections scheduled for 2008. During a
time of limited General Fund resources, the counties, political
parties, and civic organizations must step up and encourage and
promote increased voter participation.

Item 3110-101-0001 For local assistance, Special Resources Program.
I delete this item and Provision 1.

I am deleting the $200,000 legislative augmentation for the Tahoe
Regional Planning Agency for regulation enforcement and transit
system development. It is premature to provide additional funding
until the bi-state commission completes its report. With these
reductions, $3,800,000 still remains to provide California's share of
funding for the Tahoe Regional Planning Agency.

I am deleting Provision 1 to conform to this action.

Item 3340-101-6051 For local assistance, California Conservation
Corps. I delete this item.

I am deleting the $12,000,000 legislative augmentation that would
provide $1,000,000 to each of the 12 certified Local Conservation
Corps. Notwithstanding the merit of the Local Corps programs, the
California Conservation Corps is still in the process of developing
grant guidelines for Proposition 84 bond funds. Furthermore, a
recent audit of Proposition 12 and 40 bond funds identified a need
for the Corps to improve its oversight of bond expenditures. The
audit recommended that the Corps develop a corrective action plan
prior to receiving additional bond funds. Therefore, it is necessary
to delete this funding to ensure that bond proceeds are spent
efficiently, effectively, and in a manner consistent with my
Executive Order S-02-07 regarding bond accountability. I support
funding for the Local Corps grant program when the grant guidelines
and a corrective action plan that identifies appropriate oversight
measures are in place.

Item 3360-001-0465 For Support, State Energy Resources Conservation
and Development Commission. I revise this item by reducing:

(1)30-Development from $128,807,000 to $127,841,000, and

(6)Reimbursements from -$6,711,000 to -$5,745,000.

I am eliminating a fund shift of $966,000 from the Energy Resources
Programs Account to reimbursements for the support of two contracts.
Funding for these contracts was included in the budget of the Energy
Commission (Commission) when I introduced the Governor s Budget last
January. However, the Legislature removed the funds from the
Commission s budget, placed them in the budget of the Air Resources
Board, and indicated that the Commission may seek the funds by
contracting with the Air Resources Board. This would have the effect
of requiring both the Commission and the Air Board to engage in
unnecessary work that would delay these important projects, and as
such is unacceptable.

Item 3600-001-0001 For support of Department of Fish and Game. I
reduce this item from $84,503,000 to $82,998,000 by reducing:

(3)30-Management of Department Lands and Facilities from $54,180,000
to $53,342,000;

(4)40-Enforcement from $61,705,000 to $60,200,000; and

(22)Amount payable from the Coastal Wetlands Account (Item
3600-001-3104) from $974,000 to -$136,000.

I am reducing the $3,000,000 legislative augmentation for Fish and
Game Warden recruitment and retention by $1,505,000. Last year, for
the first time in several years, I increased salaries by 25 percent
during the three years of the bargaining agreement. I am sustaining
$1,495,000 to provide overtime funding for wardens and lieutenants,
which continues my commitment to address compensation issues.
However, this partial veto is necessary in order to further build a
prudent reserve in light of the various uncertainties in revenues and
spending that we face this year.

I am also revising this item to conform to the actions I have taken
in Item 36000013104.

Item 3600-001-3104 For support of Department of Fish and Game. I
reduce this item from $974,000 to $136,000.

I am deleting the $838,000 legislative augmentation for the
maintenance and management of Department of Fish and Game coastal
wetlands properties. Last year, I sustained a $5,000,000 transfer
from the General Fund to the Coastal Wetlands Account to create an
endowment to provide ongoing, sustainable funding for coastal
wetlands management activities. This augmentation, if sustained for
2007-08 and continued in future years, would spend down the endowment
in approximately six years, and place additional cost pressure on
the General Fund at that time. With this reduction,
$1,400,000 million and 18.1 positions remain for coastal wetlands
management.

Item 3720-001-0001 For support of California Coastal Commission. I
reduce this item from $11,881,000 to $11,501,000 by reducing:

(1)10 Coastal Management Program from $15,909,000 to $15,529,000.

I am deleting the $380,000 legislative augmentation for coastal
enforcement. The California Coastal Commission has the authority to
adjust its fees, and I am willing to consider augmentations that
address the Commission's workload needs once fees have been adjusted
to cover associated costs. Currently, however, the proposed
augmentation would result in additional General Fund costs. This
reduction is necessary in order to further build a prudent reserve in
light of the various uncertainties in revenues and spending that we
face this year. With this reduction $15,529,000 still remains to
support the Commission s coastal management program.

Item 3780-001-0001 For support of Native American Heritage
Commission. I reduce this item from $970,000 to $770,000 by
reducing:

(1)10 Native American Heritage Commission from $975,000 to $775,000.

I am deleting the $200,000 legislative augmentation for 2.0 positions
to implement legislative mandates. This reduction is necessary in
order to further build a prudent reserve in light of the various
uncertainties in revenues and spending that we face this year. With
this reduction $775,000 remains to support the Native American
Heritage Commission.

Item 3790-301-6051 For capital outlay, Department of Parks and
Recreation. I reduce this item from $60,878,000 to $45,878,000 by
reducing:

(3.7)90.RS.412-Statewide: State Park System Opportunity and Inholding
Acquisitions Acquisition from $30,000,000 to $15,000,000.

I am vetoing $15,000,000 of the $25,000,000 augmentation to allow the
Department sufficient resources for opportunity purchases and
inholding acquisitions. The Department expended $324,000,000 between
2000 and 2006 to acquire nearly 100,000 acres to expand the state
park system. Given this recent significant investment, the
Department should proceed cautiously to limit future operating costs.

Item 3790-492 Reappropriation, Department of Parks and Recreation. I
revise this item by deleting Schedule 1.

"Notwithstanding any other provision of law, the period to liquidate
encumbrances in the following citation is extended as cited below:
6029--California Clean Water, Clean Air, Safe Neighborhood Parks, and
Coastal Protection Fund
(1) Subdivision (b) of Section 2 of Chapter 1126 of the Statutes of
2002. The liquidation period for the grant of $3,000,000 to the City
of Oroville is extended to December 31, 2009."

I am eliminating the expenditure availability for this project funded
from the Proposition 40 Historical and Cultural Resources
Preservation Opportunity Grant Program. Funds for this project have
been available for five years and have not yet been spent.

Item 3860-001-0001 For support of Department of Water Resources. I
revise this item by reducing:

(1)10-Continuing Formulation of the California Water Plan from
$120,292,000 to $116,047,000, and

(29)Amount payable from the Safe Drinking Water, Water Quality and
Supply, Flood Control, River and Coastal Protection Fund of 2006
(Item 3860-001-6051) from $12,165,000 to $7,920,000.

I am revising this item to conform to the action taken in Item
3860-001-6051.

Item 3860-001-6051 For support of Department of Water Resources. I
reduce this item from $12,165,000 to $7,920,000.

I am deleting the legislative augmentation of $4,245,000 for
watershed basin planning activities. Although I support this
program, I believe that these activities should be funded through
Proposition 84 funds available for the development of regional and
local land use plans. Statewide water planning activity funds should
be reserved for activities such as planning future water storage,
adaptations of the state s water systems to climate change, and other
activities that address the state s future water supply needs.

Item 3860-101-6051 For local assistance, Department of Water
Resources. I reduce this item from $229,340,000 to $219,340,000.

I am deleting the legislative augmentation of $10,000,000 for the
Flood Protection Corridor Program. My proposal includes $24,000,000
Proposition 84 funds for projects to implement Flood Protection
Corridor Program. This funding is sufficient to meet the needs of
the program for the budget year, and I will propose additional funds
to implement Flood Protection Corridor projects in future budgets.

Item 3860-101-6052 For local assistance, Department of Water
Resources. I reduce this item from $197,450,000 to $167,450,000.

I am deleting the legislative augmentation of $30,000,000 for the
Floodway Corridor Program. This augmentation is unnecessary because
criteria have not been developed for this new program created by
Proposition 1E. Thus, it is not feasible for grants to be solicited
and awarded during the fiscal year. The Department of Water
Resources will develop criteria for this program during the fiscal
year, and funds to implement Floodway Corridor Program projects will
be included in future budgets.

Item 3900-001-0465 For support of State Air Resources Board. I
delete this item.

I am eliminating this item by reducing $966,000 in funding from the
Energy Resources Programs Account. This funding was intended to
support two contracts that were proposed in the budget of the Energy
Commission when I introduced the Governor's Budget last January.
However, the Legislature removed the funds from the Commission's
budget, placed them in the budget of the Air Resources Board, and
indicated that the Commission may seek the funds by contracting with
the Air Resources Board. This would have the effect of requiring
both the Commission and the Air Board to engage in unnecessary work
that would delay these important projects, and as such is
unacceptable.

Item 3900-001-6053 For support of State Air Resources Board.

I am sustaining the legislative augmentation of an additional
$96,500,000 provided for school bus replacement and retrofits to
reduce the air pollution emissions of older, highpolluting school
buses. However, I note a concern with respect to the ability of the
State Air Resources Board to allocate almost $200 million in
lower-emission school bus funding within the next two years. It is
important that we do not sacrifice accountability in the interests of
expediency. Therefore, while acknowledging the challenge that the
State Air Resources Board faces in distributing these funds, I am
directing the State Air Resources Board to allocate these funds
expeditiously while ensuring consistency with the accountability
safeguards identified in my Executive Order S0207 for the bonds that
were approved by the voters in the November 2006 general election.

Item 3900-001-6054 For support of State Air Resources Board.

I am sustaining the legislative augmentation of an additional
$139,000,000 provided for trade corridor emissions reductions to be
expended in the budget year for this new program authorized by the
voters in Proposition 1B in the November 2006 general election.
Proposition 1B provides $1 billion to fund projects intended to
improve air quality along four of California s major transportation
corridors: from the Los Angeles ports to the Inland Empire, State
Route 99 in the Central Valley, the San Francisco Bay Area, and the
San Diego border region. The State Air Resources Board will be
developing program guidelines and will solicit project proposals.
The projects to be funded are intended to achieve air quality
improvements above and beyond anything required by current law or
regulation.

The travelers on our busy trade corridors and the individuals who
reside along their routes are demanding relief now not many years
from now. However, I am concerned about taxing the ability of the
State Air Resources Board to develop program guidelines and allocate
$250,000,000 in the 2007-08 fiscal year. We must ensure effective
expenditure of this bond funding. It is important that we do not
sacrifice accountability in the interests of expediency. Therefore,
while acknowledging the challenge that the State Air Resources Board
faces in distributing these funds, I am directing the State Air
Resources Board to ensure that this funding be allocated consistent
with the accountability safeguards identified in my Executive Order
S02-07 for all bond funds approved by the voters in the November 2006
general election.

I am requesting the State Air Resources Board to develop program administrative
guidelines that make sense, reduce bureaucratic red tape, simplify and expedite project
application and award procedures, and ensure projects are completed in record time. The
people who voted for Proposition 1B are demanding this action. I know that my colleagues
in the Legislature agree with these goals, and that the staff of the State Air Resources
Board is up to this challenge.

In addition, because the language adopted by the Legislature relies heavily on local and
regional entities to carry out this program, I am calling on those entities to work closely
with the State Air Resources Board and ensure they are prepared to submit applications
to receive and allocate funding as soon as possible in this fiscal year.

Item 4260-001-0001�For support of Department of Health Care Services. I reduce
this item from $136,412,000 to $136,218,000 by reducing:
(1) 20-Health Care Services from $385,348,000 to $382,971,000;
(6) Amount payable from the Childhood Lead Poisoning Prevention Fund (Item 4260-
001-0080) from -$198,000 to -$142,000;
(8) Amount payable from the Federal Trust Fund (Item 4260-001-0890) from -
$224,133,000 to -$224,036,000;
and by deleting:
(10) Amount payable from the California Discount Prescription Drug Program Fund
(Item 4260-001-8040) (-$2,030,000);
and Provision 4.

I am deleting the $56,000 legislative augmentation to restore 1.0 special funded position
that was redirected from the Department of Health Services (DHS) to the new Department
of Health Care Services. This will ensure the split of the DHS into two departments remains
budget-neutral, consistent with the intent of Chapter 241, Statutes of 2006 (SB 162). This
action is consistent with the deletion of $744,000 and 11.0 positions in the Department
of Public Health.

I am also reducing $56,000 in Item 4260-001-0080 to conform to this action.
Provision 4 prohibits the Department of Health Care Services from expending any funds
to relocate the Fresno Medi-Cal Field Office. I am deleting Provision 4 because it interferes
with the Executive Branch�s ability to effectively administer programs. Maintaining the
Department�s ability to consolidate operations is an important component of increasing
operational efficiencies.

I am deleting $195,000 ($98,000 General Fund and $97,000 Federal Trust Fund) and
2.0 positions for the implementation of Chapter 328, Statutes of 2006 (SB 437), which
included a pilot program for self-certification of income at enrollment for Medi-Cal and
development of feasibility study reports to begin implementing changes to several automated
eligibility systems. While I remain committed to implementation of these reforms,
this reduction is needed to build a prudent reserve in light of the various uncertainties in
revenues and spending that we face this year. I am directing the Department of Health
Care Services to delay implementation for one year.

In order to further build a prudent reserve, I am deleting $2,030,000 intended to
specifically fund implementation costs for the California Discount Prescription Drug
Program. I am directing the Department of Health Care Services to identify resources to
move forward with implementation.

I am also deleting Item 4260-001-8040 to conform to this action.

I am deleting $96,000 General Fund intended to fund implementation costs for the
California Rx Prescription Drug Website Program and am directing the Department of
Health Care Services to delay implementation of the program for one year.
Item 4260-001-0080�For support of Department of Health Care Services. I reduce
this item from $198,000 to $142,000.

I am reducing this item to conform to the action I have taken in Item 4260-001-0001.

Item 4260-001-0890�For support of Department of Health Care Services. I reduce
this item from $224,133,000 to $224,036,000.

I am reducing this item by $97,000 to conform to the action I have taken in Item 4260-
001-0001, related to the delayed implementation of Chapter 328, Statutes of 2006 (SB
437).

Item 4260-001-8040�For support of Department of Health Care Services. I delete this
item.

I am deleting this item to conform to the action I have taken in Item 4260-001-0001
regarding the California Discount Prescription Drug Program.

Item 4260-006-0001�For transfer by the Controller to the California Discount Prescription
Drug Program Fund. I delete this item and Provision 1.

I am deleting the $6,330,000 in this item to conform to the actions I have taken in Items
4260-001-0001, 4260-001-8040, and 4260-119-8040 regarding the California Discount
Prescription Drug Program.

I am also deleting Provision 1 to conform to this action.

Item 4260-101-0001�For local assistance, Department of Health Care Services. I reduce
this item from $14,313,728,000 to $13,903,340,000 by reducing:
(1) 20.10.010-Eligibility (County Administration) from $2,660,676,000 to
$2,633,842,000;
(3) 20.10.030-Benefits (Medical Care and Services) from $32,222,681,000 to
$31,447,632,000; and
(8) Amount payable from the Federal Trust Fund (Item 4260-101-0890) from -
$20,595,964,000 to -$20,204,469,000.

I am deleting the legislative augmentation of $4,260,000 ($2,130,000 General Fund
and $2,130,000 Federal Trust Fund) for workstation replacement to conform to the action
taken in Item 5180-141-0001.

I am deleting $106,286,000 ($53,143,000 General Fund and $53,143,000 Federal Trust
Fund) of the funding for rates for managed health care plans in the Medi-Cal Program.
This reduction is necessary to provide for a prudent General Fund reserve in light of the
various uncertainties in revenues and spending that we face this year. With this reduction,
$108,000,000 ($54,000,000 General Fund) still remains to fund rate increases for plans
to ensure adequate access to care for low-income Californians.

I am reducing the Medi-Cal Program by $644,893,000 ($331,893,000 General Fund
and $313,000,000 Federal Trust Fund). This reduction is necessary to provide for a prudent
General Fund reserve in light of the various uncertainties in revenues and spending that
we face this year. This reduction is based on historical data showing that on average over
the last three fiscal years, Medi-Cal expenditures have been more than $400 million
General Fund lower than the estimate.

I am deleting $26,792,000 ($13,396,000 General Fund and $13,396,000 Federal Trust
Fund) to delay the implementation of Chapter 328, Statutes of 2006 (SB 437), which included
a pilot program for self-certification of income at enrollment for Medi-Cal and
development of feasibility study reports to begin implementing changes to several automated
eligibility systems. This action will delay implementation of SB 437 for one year.
This reduction is necessary to provide for a prudent General Fund reserve in light of the
various uncertainties in revenues and spending that we face this year.

I am reducing the $19,652,000 ($9,826,000 General Fund and $9,826,000 Federal Trust
Fund) in funding for the county grants portion of the Children�s Outreach Initiative. This
appropriation reduction is necessary to provide for a prudent General Fund reserve in light
of the various uncertainties in revenues and spending that we face this year. With this reduction,
$147,020,000 ($64,680,000 General Fund) still remains to fund other components
of the Children�s Outreach Initiative that streamline enrollment processes, improve retention,
and support county-based enrollment efforts for children. The Department of Health
Care Services will pay for any valid county claims for the Children�s Outreach Initiative
for the 2006-07 fiscal year from remaining funds within this item.
Item 4260-101-0890�For local assistance, Department of Health Care Services.

I reduce this item from $20,595,964,000 to $20,204,469,000.

I am reducing this item by $391,495,000 to conform to the action I have taken in Item
4260-101-0001.

Item 4260-111-0001�For local assistance, Department of Health Care Services. I reduce
this item from $172,616,000 to $162,616,000 by reducing:
(3) 20.35-Primary and Rural Health from $53,289,000 to $43,289,000,
and by deleting Provision 3.

I am reducing $10,000,000 General Fund from Expanded Access to Primary Care
(EAPC) in order to help build a prudent reserve in light of the various uncertainties in
revenues and spending that we face this year. I will seek a subsequent bill this session to
fund this program with Proposition 99 funding and maintain a constant level of funding
in the program.
Provision 3 directs the Department of Health Care Services to work with various constituency
groups to resolve issues with the timely discharge of patients enrolled in the
California Children�s Services Program. This requirement would result in an expenditure
increase without regard to the availability of revenues. Consequently, I am vetoing this
language.
Given the Legislature�s interest in this area and the importance of this program, I am
instructing the director of the Department of Health Care Services to continue the activities
of this legislative request to the extent such activities can be achieved using existing resources
and without impairing the Department of Health Care Services ability to perform
its essential functions.

Item 4260-113-0001�For local assistance, Department of Health Care Services. I reduce
this item from $190,394,000 to $185,171,000 by reducing:
(1) 20.10.010-Eligibility (County Administration) from $20,783,000 to $5,860,000,
and
(4) Amount payable from the Federal Trust Fund (Item 4260-113-0890) from -
$330,184,000 to -$320,484,000.

I am reducing the $14,923,000 ($5,223,000 General Fund and $9,700,000 Federal Trust
Fund) in funding for the county grants portion of the Children�s Outreach Initiative to
conform to the action I have taken in Item 4260-101-0001. The Department of Health
Care Services will pay for any valid county claims for the Children�s Outreach Initiative
for the 2006-07 fiscal year from remaining funds within this item.

Item 4260-113-0890�For local assistance, Department of Health Care Services. I reduce
this item from $330,184,000 to $320,484,000.

I am reducing this item by $9,700,000 to conform to the action I have taken in Item
4260-113-0001.

Item 4260-119-8040�For local assistance, Department of Health Care Services. I
delete this item.

I am deleting the $4,300,000 intended specifically to fund local assistance implementation
costs for the California Discount Prescription Drug Program. This action is necessary
to further build a prudent reserve in light of the various uncertainties in revenues and
spending that we face this year.

Item 4265-001-0001�For support of Department of Public Health. I reduce this item
from $96,897,000 to $95,460,000 by reducing:
(2) 20-Public and Environmental Health from $504,804,000 to $502,502,000;
(3) 30-Licensing and Certification from $151,366,000 to $150,935,000;
(6) Reimbursements from $-36,726,000 to $-36,605,000;
(14) Amount payable from the Radiation Control Fund (Item 4265-001-0075) from -
$22,620,000 to -$22,402,000;
(16) Amount payable from the Childhood Lead Poisoning Prevention Fund (Item 4265-
001-0080) from -$9,471,000 to -$9,368,000;
(18) Amount payable from the Clinical Laboratory Improvement Fund (Item 4265-001-
0098) from -$5,571,000 to -$5,517,000;
(24) Amount payable from the Genetic Disease Testing Fund (Item 4265-001-0203)
from -$113,633,000 to -$113,577,000;
(31) Amount payable from the Safe Drinking Water Account (Item 4265-001-0306)
from -$11,383,000 to -$11,204,000;
(37) Amount payable from the Federal Trust Fund (Item 4265-001-0890) from -
$212,090,000 to -$211,956,000;
(41) Amount payable from the Licensing and Certification Trust Fund (Item 4265-001-
3098) from -$84,033,000 to -$83,602,000;
and by deleting Provision 6.

I am reducing the $744,000 legislative augmentation to restore 11.0 special funded
positions that were redirected from the Department of Health Services (DHS) to administrative
and managerial positions in the new Department of Health Care Services and Department
of Public Health. This will ensure the split of the DHS into two departments remains
budget-neutral, consistent with the intent of Chapter 241, Statutes of 2006 (SB
162). This action is consistent with the deletion of $56,000 and 1.0 position in the Department
of Health Care Services.

I am also reducing $218,000 in Item 4265-001-0075, $103,000 in Item 4265-001-0080,
$54,000 in Item 4265-001-0098, $56,000 in Item 4265-001-0203, $179,000 in Item 4265-
001-0306, and $134,000 in Item 4265-001-0890 to conform to this action.

I am also reducing $1,314,000 and 9.0 positions to reflect a delay in implementation
of the Healthcare Associated Infections Program under Chapter 526, Statutes of 2006 (SB
739) for one year. This action is necessary to help build a prudent reserve in light of the
various uncertainties in revenues and spending that we face this year.

I am also reducing $431,000 and 3.0 positions in Item 4265-001-3098 to conform to
this action.

I am reducing $123,000 General Fund and 2.0 positions for the implementation of
Chapter 328, Statutes of 2006 (SB 437), which required development of feasibility study
reports to implement changes to several automated eligibility systems. I am taking this
action to delay implementation for one year in order to further build a prudent reserve in
light of the various uncertainties in revenues and spending that we face this year.

I am also deleting Provision 6 which would require the Department of Public Health
to provide an action plan to the Legislature by November 1, 2007, and addresses temporary
management appointment issues identified by the Bureau of State Audits. This requirement
would result in an expenditure increase without regard to the availability of revenues.
Consequently, I am vetoing this language. Nevertheless, in recognition of the Legislature�s
desire to obtain this information, I am instructing the director of the Department of Public
Health to comply with this legislative request to the extent compliance can be achieved
using existing resources and without impairing the department�s ability to perform its essential
functions.

Item 4265-001-0075�For support of Department of Public Health. I reduce this item
from $22,620,000 to $22,402,000.