BILL NUMBER: SCA 30 CHAPTERED 09/22/08 CHAPTER 167 FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2008 PASSED THE SENATE SEPTEMBER 19, 2008 PASSED THE ASSEMBLY SEPTEMBER 19, 2008 INTRODUCED BY Senator Ashburn SEPTEMBER 19, 2008 A resolution directing the Secretary of State to make amendments in Senate Constitutional Amendment No. 13 (Resolution Chapter 144 of the Statutes of 2008). LEGISLATIVE COUNSEL'S DIGEST SCA 30, Ashburn. State finance. Senate Constitutional Amendment No. 13 of the 2007-08 Regular Session would, if adopted by the people, amend Section 20 of Article XVI of the California Constitution relative to state finance. That measure would rename the Budget Stabilization Account the Budget Stabilization Fund and would provide that all moneys in the fund not designated for deposit into the Deficit Recovery Bond Retirement Sinking Fund Subaccount may be transferred to the General Fund by a statute that contains no unrelated provisions or may be loaned to the General Fund to address a General Fund cashflow deficit. This measure would instead provide that, apart from a transfer made for the purpose of responding to an emergency declared by the Governor, as defined, or loaned and repaid within a fiscal year to meet General Fund cash requirements, the total amount that may be transferred from the Budget Stabilization Fund to the General Fund for any fiscal year shall not exceed the amount derived by subtracting the General Fund revenues, transfers, and balances available from the prior fiscal year for that fiscal year from the total General Fund expenditures for the immediately preceding fiscal year as adjusted for changes in population and the cost of living, as defined. This measure would direct the Secretary of State to make those amendments in SCA 13. 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 directs the Secretary of State to make amendments in Senate Constitutional Amendment No. 13 of the 2007-08 Regular Session (Resolution Chapter 144 of the Statutes of 2008) by removing Section 20 of Article XVI of the Constitution, as proposed in that measure, and replacing that section with the following Section 20: 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) On September 30, 2008, and on September 30 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 the date of the transfer as set forth in subdivision (b). For a fiscal year commencing on or after July 1, 2010, this subdivision shall be operative only if a transfer of moneys from the Budget Stabilization Fund to the General Fund is authorized pursuant to subparagraph (A) of paragraph (2) of subdivision (f). (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 statute as specified in this paragraph. (A) Apart from a transfer pursuant to subparagraph (B), the total amount that may be transferred to the General Fund pursuant to this paragraph for any fiscal year shall not exceed the amount derived by subtracting the General Fund revenues, transfers, and balances available from the prior fiscal year for that fiscal year from 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 subparagraph, "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. (B) Any funds necessary for the purpose of responding to an emergency declared by the Governor may be transferred by statute. For purposes of this subparagraph, "emergency" has the same meaning as set forth in paragraph (2) of subdivision (c) of Section 3 of Article XIII B. (g) In addition to any transfer authorized by this section, funds in the Budget Stabilization Fund may be loaned and repaid within a fiscal year to meet General Fund cash requirements.