BILL NUMBER: ABX3 17	ENROLLED
	BILL TEXT

	PASSED THE SENATE  FEBRUARY 19, 2009
	PASSED THE ASSEMBLY  FEBRUARY 19, 2009
	AMENDED IN SENATE  FEBRUARY 18, 2009
	AMENDED IN ASSEMBLY  JANUARY 7, 2009

INTRODUCED BY   Assembly Member Evans

                        JANUARY 5, 2009

   An act to amend Sections 130105 and 130150 of the Health and
Safety Code, to amend Section 30131.4 of, and to add Section 30131.45
to, the Revenue and Taxation Code, relating to children, and
declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 17, Evans. Budget Act of 2008. California Children and Families
Act: use of funds: services for children.
   The California Children and Families Act of 1998, an initiative
measure approved by the voters as Proposition 10 at the November 3,
1998, statewide general election, requires that the California
Children and Families Program, established by the act, be funded by
certain taxes imposed on the sale and distribution of cigarettes and
tobacco products, that revenues be deposited into the California
Children and Families Trust Fund, and that the fund be used for the
implementation of comprehensive early childhood development and
smoking prevention programs. Existing law provides that prescribed
percentages of moneys allocated and appropriated from the trust fund
shall be deposited in various accounts, including the Mass Media
Communications Account and the Unallocated Account, for expenditure
by the California Children and Families Commission, also known as
First 5 California, and county commission, for various subjects
relating to, and furthering the goals and purposes of, the act.
   Existing law prohibits amendment of this initiative measure by the
Legislature unless the amendment is approved by the voters, or the
amendment is accomplished by a vote of 2/3 of the membership of both
houses of the Legislature and the amendment furthers the act and is
consistent with its purposes.
   Existing law establishes various public programs to provide health
care coverage and social services to children.
   This bill, subject to voter approval at the next statewide
election, would revise certain provisions of the California Children
and Families Act of 1998, to require designated unencumbered and
unexpended funds in the California Children and Families Trust Fund
to be redirected to support state health and human services programs,
as described, for children up to 5 years of age. The bill, subject
to voter approval, would eliminate the Mass Media Communications
Account in the trust fund, and would reallocate the percentage
payable to that account to the Unallocated Account. It would specify
that moneys in the unallocated account would be used to ensure every
county commission has a base level of funding of at least $400,000,
and would enact other changes pertaining to county commissions. The
bill, subject to voter approval, would require, prior to the
distribution of moneys from the fund, that $268,000,000 be
transferred annually, in specified fiscal years, to the Proposition
10 Health and Human Services Fund, which would be created by the
bill. The bill would require these funds to be expended, upon
appropriation by the Legislature, to support state health and human
services programs, as described.
   The California Constitution authorizes the Governor to declare a
fiscal emergency and to call the Legislature into special session for
that purpose. The Governor issued a proclamation declaring a fiscal
emergency, and calling a special session for this purpose, on
December 19, 2008.
   This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on December 19, 2008,
pursuant to the California Constitution.
   This bill would declare that it is to take effect immediately as
an urgency statute.


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

  SECTION 1.  Section 130105 of the Health and Safety Code is amended
to read:
   130105.  The California Children and Families Trust Fund is hereby
created in the State Treasury.
   (a) The California Children and Families Trust Fund shall consist
of moneys collected pursuant to the taxes imposed by Section 30131.2
of the Revenue and Taxation Code.
   (b) All costs to implement this act shall be paid from moneys
deposited in the California Children and Families Trust Fund.
   (c) The State Board of Equalization shall determine within one
year of the passage of this act the effect that additional taxes
imposed on cigarettes and tobacco products by this act has on the
consumption of cigarettes and tobacco products in this state. To the
extent that a decrease in consumption is determined by the State
Board of Equalization to be the direct result of additional taxes
imposed by this act, the State Board of Equalization shall determine
the fiscal effect the decrease in consumption has on the funding of
any Proposition 99 (the Tobacco Tax and Health Protection Act of
1988) state health-related education or research programs in effect
as of November 1, 1998, and the Breast Cancer Fund programs that are
funded by excise taxes on cigarettes and tobacco products. Funds
shall be transferred from the California Children and Families Trust
Fund to those affected programs as necessary to offset the revenue
decrease directly resulting from the imposition of additional taxes
by this act. These reimbursements shall occur, and at any times, as
determined necessary to further the intent of this subdivision.
   (d) The California Children and Families Trust Fund shall be used
to provide direct health care services, human services, including
services for at-risk families who are involved with the child welfare
system administered by the county welfare department, and direct
early education services, including preschool and child care. Moneys
shall be allocated and appropriated from the California Children and
Families Trust Fund, except as authorized in subparagraph (H) of
paragraph (1), and Section 30131.45 of the Revenue and Taxation Code,
as follows:
   (1) Twenty percent shall be allocated and appropriated to separate
accounts of the state commission for expenditure according to the
following formula:
   (A) Five percent shall be deposited in an Education Account for
expenditures to ensure that children are ready to enter school and
for programs relating to education, including, but not limited to,
the development of educational materials, professional and parental
education and training, and technical support for county commissions
in the areas described in subparagraph (A) of paragraph (1) of
subdivision (b) of Section 130125.
   (B) Three percent shall be deposited in a Child Care Account for
expenditures to ensure that children are ready to enter school and
for programs relating to child care, including, but not limited to,
the education and training of child care providers, the development
of educational materials and guidelines for child care workers, and
other areas described in subparagraph (B) of paragraph (1) of
subdivision (b) of Section 130125.
   (C) Three percent shall be deposited in a Research and Development
Account for expenditures to ensure that children are ready to enter
school and for the research and development of best practices and
standards for all programs and services relating to early childhood
development established pursuant to this act, and for the assessment
and quality evaluation of those programs and services.
   (D) One percent shall be deposited in an Administration Account
for expenditures for the administrative functions of the state
commission. Any funds not needed for the administrative functions of
the state commission may be transferred to the Unallocated Account
described in subparagraph (E), upon approval by the state commission.

   (E) Eight percent shall be deposited in an Unallocated Account for
expenditure by the state commission for any of the purposes of this
act described in Section 130100 provided that none of these moneys
shall be expended for the administrative functions of the state
commission. The Unallocated Account shall be used to ensure that
every county commission has a base level of funding of at least four
hundred thousand dollars ($400,000).
   (F) In the event that, for whatever reason, the expenditure of any
moneys allocated and appropriated for the purposes specified in
subparagraphs (A) to (E), inclusive, is enjoined by a final judgment
of a court of competent jurisdiction, then those moneys shall be
available for expenditure by the state commission for mass media
communication emphasizing the need to eliminate smoking and other
tobacco use by pregnant women, the need to eliminate smoking and
other tobacco use by persons under 18 years of age, and the need to
eliminate exposure to secondhand smoke.
   (G) Any moneys allocated and appropriated to any of the accounts
described in subparagraphs (A) to (E), inclusive, that are not
encumbered or expended within any applicable period prescribed by law
shall (together with the accrued interest on the amount) revert to
and remain in the same account for the next fiscal period.
   (H) Notwithstanding subparagraph (G), balances of up to three
hundred forty million dollars ($340,000,000), but not less than two
hundred seventy-five million dollars ($275,000,000) in the accounts
described in subparagraphs (A) to (E), inclusive, that are not
encumbered or expended by July 1, 2009, shall be redirected to
support state health and human services programs for children up to
five years of age. The state commission shall ensure that these
reserves are available for this purpose. For purposes of this
subparagraph, "state health and human services programs" includes,
but is not limited to, early intervention and prevention services for
infants and toddlers with developmental disabilities, child welfare
services, adoption assistance, foster care, kinship guardianship
assistance payments (Kin-GAP), and direct health care services.
   (2) Eighty percent shall be allocated and appropriated to county
commissions in accordance with Section 130140.
   (A) The moneys allocated and appropriated to county commissions
shall be deposited in each local Children and Families Trust Fund
administered by each county commission, and shall be expended only
for the purposes authorized by this act and in accordance with the
county strategic plan approved by each county commission.
Notwithstanding any other provision of law and the designation of the
local Children and Families Trust Fund as a trust fund, the local
controller may use the money in the fund for loans to the local
general fund. Any such loan shall be repaid from the general fund
with interest computed at 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 subparagraph does not authorize any
transfer that will interfere with the carrying out of the object for
which this fund or those accounts were created.
   (B) Any moneys allocated and appropriated to any of the county
commissions that are not encumbered or expended within any applicable
period prescribed by law shall (together with the accrued interest
on the amount) revert to and remain in the same local Children and
Families Trust Fund for the next fiscal period under the same
conditions as set forth in subparagraph (A).
   (e) All grants, gifts, or bequests of money made to or for the
benefit of the state commission from public or private sources to be
used for early childhood development programs shall be deposited in
the California Children and Families Trust Fund and expended for the
specific purpose for which the grant, gift, or bequest was made. The
amount of any such grant, gift, or bequest shall not be considered in
computing the amount allocated and appropriated to the state
commission pursuant to paragraph (1) of subdivision (d).
   (f) All grants, gifts, or bequests of money made to or for the
benefit of any county commission from public or private sources to be
used for early childhood development programs shall be deposited in
the local Children and Families Trust Fund and expended for the
specific purpose for which the grant, gift, or bequest was made. The
amount of any such grant, gift, or bequest shall not be considered in
computing the amount allocated and appropriated to the county
commissions pursuant to paragraph (2) of subdivision (d).
  SEC. 2.  Section 130150 of the Health and Safety Code is amended to
read:
   130150.  (a) (1) On or before October 15 of each year, each county
commission shall conduct an audit of, and issue a written report on
the implementation and performance of, its functions during the
preceding fiscal year, including, at a minimum, the manner in which
funds were expended, the progress toward, and the achievement of,
program goals and objectives, and information on programs funded and
populations served for all funded programs.
   On or before November 1 of each year, each county commission shall
submit its audit and report to the state commission for inclusion in
the state commission's consolidated report required in subdivision
(b). Each commission shall submit its report in a format prescribed
by the state commission if the state commission approves that format
in a public meeting prior to the fiscal year during which it is to be
used by the county commissions. The state commission shall develop
the format in consultation with the county commissions.
   (2) The audits and reports of each county commission shall be
transmitted to its respective board of supervisors, the county
auditor, and to the state commission. The county auditor shall serve
on the local county commission in an ex-officio capacity.
   (b) The state commission shall, on or before January 31 of each
year, do both of the following:
   (1) Conduct an audit and prepare a written report on the
implementation and performance of the state commission functions
during the preceding fiscal year, including, at a minimum, the manner
in which funds were expended and the progress toward, and the
achievement of, program goals and objectives.
   (2) Prepare a written report that consolidates, summarizes,
analyzes, and comments on the annual audits and reports submitted by
all of the county commissions and the Controller for the preceding
fiscal year. The written report shall include a listing, by category,
of the aggregate expenditures on program areas funded by the state
and county commissions pursuant to the purposes of this act,
according to a format prescribed by the state commission. This report
by the state commission shall be transmitted to the Governor, the
Legislature, and each county commission.
   (3) In the event a county commission does not submit the
information prescribed in subdivision (a), the state commission may
withhold funds that would otherwise have been allocated to the county
commission from the California Children and Families Trust Fund
pursuant to Section 130140 until the county commission submits the
data as required by subdivision (a).
   (c) The state commission shall make copies of each of its annual
audits and reports available to members of the general public on
request and at no cost. The state commission shall furnish each
county commission with copies of those documents in a number
sufficient for local distribution by the county commission to members
of the general public on request and at no cost.
   (d) Each county commission shall make copies of its annual audits
and reports available to members of the general public on request and
at no cost.
  SEC. 3.  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, except as authorized in
subparagraph (H) of paragraph (1) of subdivision (d) of Section
130105 of the Health and Safety Code and Section 30131.45. 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 and Section 30131.45 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. 4.  Section 30131.45 is added to the Revenue and Taxation
Code, to read:
   30131.45.  Prior to the distribution of moneys from the California
Children and Families Trust Fund as provided under Section 130105 of
the Health and Safety Code, for state fiscal years 2009-10, 2010-11,
2011-12, 2012-13, and 2013-14, two hundred sixty-eight million
dollars ($268,000,000) shall be transferred annually to the
Proposition 10 Health and Human Services Fund, which is hereby
created in the State Treasury, to support state health and human
services programs for children up to five years of age. These funds
shall be expended, upon appropriation by the Legislature, as part of
the annual budget process or in another statute. For purposes of this
section, "state health and human services programs" include, but is
not limited to, early intervention and prevention services for
infants and toddlers with developmental disabilities, child welfare
services, adoption assistance, foster care, kinship guardianship
assistance payments (Kin-GAP), and direct health care services.
  SEC. 5.  As an amendment of an initiative statute, Sections 1 to 4,
inclusive, of this act shall become effective only upon approval by
the voters at a statewide election.
   SEC. 6.  This act addresses the fiscal emergency declared by the
Governor by proclamation on December 19, 2008, pursuant to
subdivision (f) of Section 10 of Article IV of the California
Constitution.
  SEC. 7.  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 for amendments to Proposition 10 to be placed on the
ballot for approval by the voters on the earliest possible date, it
is necessary for this act to take effect immediately.