BILL NUMBER:  ABX4 1 
VETOED	DATE: 07/28/2009






Arnold Schwarzenegger                       July 28, 2009
Governor



                   State of California
                    Governor’s Office


I object to the following appropriations contained in
Assembly Bill 1, Fourth Extraordinary Session.

Item 3340-101-0001-For local assistance, California
Conservation Corps.  I delete this item.

In order to create a reasonable reserve, I am making
additional reductions so we have resources to 
address emergencies or additional revenue shortfalls.  
In addition, the Legislature did not make changes to
improve the cost-effectiveness of the Beverage 
Container Recycling Program and address the 
shortfall in the Fund in a manner that supports 
recycling objectives.  I look forward to working with the 
Legislature to enact comprehensive reform to the 
Beverage Container Recycling Program.

Item 3360-001-3117-For support of Energy 
Resources Conservation and Development 
Commission.  I delete Provision 2.

I am deleting Provision 2, which would prohibit the 
Energy Commission from making any expenditure 
from this appropriation for hydrogen refueling stations.  
The goal of the Alternative and Renewable Fuel and 
Vehicle Technology program is to develop and deploy 
innovative technologies that transform California’s fuel 
and vehicle types to help attain the state’s climate 
change policies.  This provision would limit the 
program’s technology options, and would discourage 
continued development of hydrogen fuels and related 
vehicles and technology.

Item 3790-001-0001-For support of Department of 
Parks and Recreation.  I reduce this item from 
$133,988,000 to $127,788,000 by reducing:

(1) For support of the Department of Parks and 
Recreation from $428,717,000 to $422,517,000.

In order to create a reasonable reserve, I am making 
additional reductions so we have resources to 
address emergencies or additional revenue shortfalls. 
I know this reduction will likely lead to closure of 
additional parks but we are facing unprecedented 
budget challenges and we have limited choices.  I am 
directing the Department to do everything it can to 
work with local governments, the federal government, 
community based organizations, and other interested 
parties who can partner with the state to help mitigate 
any state park closures.

Item 4170-001-0001-For support of California 
Department of Aging.  I reduce this item from 
$4,227,000 to $4,121,000 by
reducing:

(4) 40-Special Projects from $8,680,000 to 
$8,574,000.

I am reducing this item by $106,000 and 0.5 
personnel years for the following programs:

· $79,000 for the Linkages Program, and
· $27,000 for Community Based Services Programs.

This action conforms to my action in Control Section 
17.50.

Item 4260-101-0890-For local assistance, 
Department of Health Care Services. I am reducing 
this item from $26,592,825,000 to $26,532,256,000 to 
conform to the action I have taken in Control Section 
18.00.

Item 4265-111-0231-For local assistance, 
Department of Public Health.  I reduce this item from 
$54,154,000 to $47,354,000. 

I am deleting the $6,800,000 one-time augmentation 
of Proposition 99 funds for the Tobacco Control 
Program for anti-tobacco media campaigns and 
competitive grants to local entities. While I proposed 
this augmentation, tobacco tax revenues have since 
declined to levels insufficient to support these efforts.

Item 5180-151-0001-For local assistance, 
Department of Social Services.  I reduce this item 
from $763,375,000 to $702,494,000 by reducing:

(1) 25.30-Children and Adult Services and Licensing 
from $2,159,705,000 to $2,098,824,000.

I am reducing this item by $60,881,000 to increase the 
reserve for economic uncertainties and to reduce the 
state's structural deficit, consistent with my May 
Revision proposal to achieve an unallocated 
reduction in the Child Welfare Services Program.  I am 
reducing a total of $79,956,000 for this purpose: 
$60,881,000 from this Item and $19,075,000 from 
subdivision (f) of Control Section 18.50.

Item 5225-001-0001-For support of the Department 
of Corrections and Rehabilitation.  I revise this item by 
deleting Provisions 7 and 9.

I am deleting Provision 7, which would require the 
California Department of Corrections and 
Rehabilitation (CDCR) to report 2008-09 and 2009-10 
overtime expenditures for custody staff.  This 
reporting requirement would result in additional 
workload without regard to the availability of 
resources.  Consequently, I am vetoing this language.  
Nevertheless, in recognition of the Legislature’s desire 
to obtain this information, I am instructing the CDCR to 
comply with the legislative request for this report to the 
extent that compliance can be achieved using existing 
resources and without impairing the CDCR’s ability to 
perform its essential functions.

I am deleting Provision 9, which would restrict certain 
expenditures within the CDCR’s budget for specified 
purposes, require the CDCR to report on the 
expenditure of these funds, allow for the redirection of 
funds as specified, and provide that any funds not 
spent revert to the General Fund.  While my 
Administration is committed to ensuring that funds are 
spent for the purposes for which they are 
appropriated, this language is too restrictive for CDCR 
in 2009-10 as they implement major population 
reforms and other reductions, including a significant 
unallocated reduction.  

Item 5225-002-0001-For support of the Department 
of Corrections and Rehabilitation.  Irevise this item by 
deleting Provision 6. 

I am deleting Provision 6, which would restrict certain 
expenditures within the California Department of 
Corrections and Rehabilitation's (CDCR) budget for 
specified purposes, require the CDCR to report on the 
expenditure of these funds, allow for the redirection of 
funds as specified, and provide that any funds not 
spent revert to the General Fund.  While my 
Administration is committed to ensuring that funds are 
spent for the purposes for which they are 
appropriated, this language is too restrictive for CDCR in 
2009-10 as they implement major population 
reforms and other reductions, including significant 
unallocated reductions.  

Item 5225-301-0660-For capital outlay, Department 
of Corrections and Rehabilitation.  Irevise this item by 
deleting Provision 5.  

I am deleting Provision 5, which prohibits the 
Department from making any further encumbrances 
or expenditures of funding appropriated for the San 
Quentin State Prison:Condemned Inmate Complex 
until three specified conditions are met.  This project is 
needed to remedy significant operational deficiencies 
associated with the existing condemned inmate 
housing and address issues cited in the Plata and 
Coleman lawsuits regarding sufficient health care 
access and accessibility for aging and disabled 
inmates.  This project is ready to begin construction.  
Having to delay the construction start to comply with 
these conditions will cause unnecessary increased 
costs.  In addition, this appropriation provides no 
increased expenditure authority for those costs.  This 
increases the likelihood that the Public Works Board 
would be required to augment earlier appropriations 
as provided for by law.  I therefore veto this provision 
so as to control the expenditures of the state.

Item 6110-001-0001-For support of the Department 
of Education.  I reduce this item from $38,210,000 to 
$37,505,000 by reducing:  

(2) 20-Instructional Support from $158,747,000 to
$158,042,000,

and by deleting Provision 7.

I am reducing this item by $705,000 to capture the 
maximum amount of savings from the instructional 
materials flexibility provided in the Education trailer bill 
to school districts, which suspends the adoption of 
instructional materials by the State Board of Education 
(Board) and the subsequent purchasing requirements 
for school districts until 2013-14.  As a result, it is 
unnecessary for the Curriculum Development and 
Supplemental Materials Commission to continue to 
advise the Board on content frameworks and 
instructional materials adoptions for the next five 
years or until an agreed-upon process is 
reestablished. This reduction removes funding for 
unnecessary Commission per diem and travel as well 
as funding for Department staff.

Item 6110-008-0001-For support of Department of 
Education, as allocated by the Department of 
Education to the State Special Schools for student 
transportation allowances.  I delete this item.

This item would provide $3,894,000 Proposition 98 
General Fund for student transportation at the State 
Special Schools.  However, the Legislature 
subsequently provided special education federal 
funds (Provision 11 of Item 6110-161-0890) for the 
same purpose with the understanding that this 
Proposition 98 appropriation is no longer necessary.  
Therefore, on a technical basis, I delete this item to 
remove duplicative funding for student transportation 
at the State Special Schools.

I am also deleting Provisions 1 and 2 to conform to this
action.

Item 6600-001-0001-For support of Hastings 
College of the Law.  I am reducing this item from 
$9,270,000 to $8,270,000. 

I am reducing this item by an additional $1,000,000 to 
achieve General Fund savings.  Combined with the 
10-percent reduction approved by the Legislature, this 
unallocated reduction will reduce Hastings’ state 
support to be more in line with the General Fund 
reductions made to the University of California and 
the California State University since the 
2008-09 Budget was first enacted.  Because Hastings 
has increased its student fees by almost 38percent 
since 2007-08, including a 13-percent increase for 
2009-10, funding for the instructional program still 
increases by 5 percent in 2009-10 which should be 
sufficient in this fiscal climate.

Item 7980-001-0001-For support of California 
Student Aid Commission.  I reduce this item from 
$12,623,000 to $6,323,000 by reducing:  

(1) 15-Financial Aid Grants Program from 
$13,049,000 to $6,749,000

I am vetoing $6,300,000 from the California Student 
Aid Commission, of which $4,300,000 is set aside to 
be restored contingent upon enactment of legislation 
that authorizes the decentralization of the Cal Grant 
Program and other financial aid programs as 
warranted.  The $2,000,000 difference represents 
savings that would be achieved though efficiencies 
resulting from the decentralization and other over-
budgeting that currently exists.

Under my January proposal, a proposal that was 
broadly supported by the higher education segments, 
the Student Aid Commission’s intermediary role in 
approving awards will be largely eliminated. The 
proposal would establish colleges and universities as
the single point of contact for most students’ financial 
aid needs.  This change would significantly reduce 
the Student Aid Commission’s General Fund 
operating costs on an ongoing basis and save money 
at the postsecondary segments by reducing double-
handling of awards between the colleges and the 
Commission.  This action illustrates my commitment to 
put the students first and to improve the efficiency of 
state government.  I look forward to working with the 
Legislature on legislation that will better serve our 
students and the higher education segments.

Item 9100-101-0001-For local assistance, Tax 
Relief. I reduce this item from $472,370,000 to 
$444,579,000 by reducing: 

(5)  60-Subventions for Open Space from 
$27,792,000 to $1,000.

I am reducing this item by $27,791,000 to suspend 
funding for this program, which backfills a portion of 
property taxes foregone when local governments 
voluntarily enter into contracts with property owners 
who agree to use their land for agricultural or open 
space purposes in exchange for a lower property tax 
assessment.  This is necessary to provide a prudent 
reserve in the General Fund.   

Item 9620-001-0001-For payment of interest on 
General Fund loans, upon order of the Director of 
Finance, for any General Fund loan.  I delete 
Provision 4.

I have reviewed the Legislature's action on my 
proposal for deficiency funding in the event that the 
Controller must implement a payment delay plan to 
manage emergency cash needs.  My proposal would 
have appropriated any amount necessary to pay the 
interest expenses, late payment penalties, and other 
costs incurred by the Controller in implementing such 
a plan, and it would have accelerated the review and 
approval process that currently exists for funding such 
deficiencies.  

Provision 4 serves as an appropriation for specific 
costs incurred by the Controller.  The use of this 
appropriation is contingent uponthe occurrence of 
various actions and events.  The legislative action on 
this appropriation would, in effect, exempt the 
Controller from obtaining approval from Finance 
before incurring a deficiency.  It might also have the 
unintended effect of relieving the Controller of the 
personal responsibility requirements contained in 
Control Section 32.00.  In light of this, I have 
determined that the provisions of Item 9840-001-0001 
are adequate for the review and approval of Controller 
costs related to a payment delay plan and I hereby 
veto Provision 4. 

Item 9800-001-0001-For Augmentation for 
Employee Compensation.  I reduce this item from 
$40,742,000 to $15,742,000.

I am reducing funding by $25,000,000 for employee 
compensation and am instructing my administration to 
absorb this reduction to build a prudent reserve. To 
effect this reduction, I am directing the Director of 
Finance to reduce the amount that would have been 
allocated to each department for increases in 
employee compensation costs, including health care.  
This reduced amount available for allocation to 
departments will not affect pay or benefits for 
employees in any way.  Employees will receive full 
pay, and the funding for pay and benefits not 
available from Item 9800 will be funded by a 
redirection within existing resources by individual 
departments.  All previously negotiated employee 
compensation increases, and all employee 
compensation increases for medical, mental, and 
dental health positions arising from the Coleman, 
Plata, and Perez court cases will be unaffected by my 
action to reduce this appropriation.

Item 9800-001-0494-For Augmentation for 
Employee Compensation.  I reduce this item from 
$51,589,000 to $31,589,000.

I am reducing funding by $20,000,000 for employee 
compensation and am instructing my administration to 
absorb this reduction to build a prudent reserve.  To 
effect this reduction, I am directing the Director of 
Finance to reduce the amount that would have been 
allocated to each department for increases in 
employee compensation costs, including health care.  
This reduced amount available for allocation to 
departments will not affect pay or benefits for 
employees in any way.  Employees will receive full 
pay, and the funding for pay and benefits not 
available from Item 9800 will be funded by a 
redirection within existing resources by individual 
departments. All previously negotiated employee 
compensation increases, and all employee 
compensation increases for medical, mental, and 
dental health positions arising from the Coleman, 
Plata, and Perez court cases will be unaffected by my 
action to reduce this appropriation.

Item 9800-001-0988-For Augmentation for 
Employee Compensation.  I reduce this item from 
$25,410,000 to $15,410,000.

I am reducing funding by $10,000,000 for employee 
compensation and am instructing my administration to 
absorb this reduction to build a prudent reserve. To 
effect this reduction, I am directing the Director of 
Finance to reduce the amount that would have been 
allocated to each department for increases in 
employee compensation costs, including health care.  
This reduced amount available for allocation to 
departments will not affect pay or benefits for 
employees in any way.  Employees will receive full 
pay, and the funding for pay and benefits not 
available from Item 9800 will be funded by a 
redirection within existing resources by individual 
departments. All previously negotiated employee 
compensation increases, and all employee 
compensation increases for medical, mental, and 
dental health positions arising from the Coleman, 
Plata, and Perez court cases will be unaffected by my 
action to reduce this appropriation.

Item 9840-001-0001-Augmentation for 
Contingencies or Emergencies. I reduce this item from 
$44,100,000 to $20,100,000.

In order to create a reasonable reserve, I am making 
additional reductions so we have resources to 
address additional revenue shortfalls.  Therefore, I am 
reducing this item by $24,000,000 to fund higher 
competing priorities.  I have determined that this 
reduced level of funding, which is consistent with the 
amount of unanticipated expenses funded by this 
Item in the previous fiscal year, is adequate for the 
purposes of this Item.

SEC. 17.50-I am reducing the item of General Fund 
appropriation in this section by $6,160,000 as 
opposed to approving the item as presented without 
reduction.  Thus, I am increasing the General Fund 
reduction from $9,483,000 to $15,643,000.

The effect of my action reflects a reduction of 
$6,160,000 to Special Projects (Program 40) to 
increase the reserve for economic uncertainties and 
to reduce the state's structural deficit.  This reduction 
is consistent with my May Revision proposal to 
eliminate the Linkages Program and Community 
Based Services Programs.  Specifically, I am reducing 
$3,879,000 from the Linkages Program and 
$2,281,000 from Community Based Services 
Programs.  Funding of these non-mandated programs 
cannot be continued due to the state's severe budget 
constraints.

"Sec. 17.50. The amount appropriated in Item 4170-
101-0001 of Section 2.00 is hereby reduced by 
$9,483,000 $15,643,000."

SEC. 18.00-I am reducing the item of General Fund 
appropriation in subdivision (a) of the section by 
$60,569,000 as opposed to approving the item as 
presented without reduction.  I am also reducing the 
item of General Fund appropriation in subdivision (e) 
of this section by $25,000,000 as opposed to 
approving the item as presented without reduction.  
Thus, I am revising subdivision (e) of this Section by 
increasing the General Fund reduction from 
$4,303,000 to $29,303,000, and County 
Administration by $60,569,000.

The effect of my action reflects a reduction of 
$25,000,000 (from $39,909,000 to $14,909,000) to 
Primary and Rural Health (Program 20.35) to increase 
the reserve and to reduce the state’s structural deficit.  
This reduction is consistent with my May Revision 
proposal to eliminate General Fund grants for 
Community Clinic Programs.  Many, if not all of these 
clinics, will continue to receive funding through 
remaining state programs, federal programs, local 
programs, and private funds.  Increased federal 
stimulus funds are available to many of these clinics 
and will help to minimize the overall impact of this 
reduction.

I am also reducing County Administration by 
$60,569,000 (from $2,893,363,000 to 
$2,832,794,000) to increase the reserve and to 
reduce the state’s structural deficit.

"SEC. 18.00. (a) The amount appropriated in Item 
4260-101-0001 of Section 2.00 is hereby reduced by 
$2,789,402,000 $2,849,971,000.
(b) Schedule (7) of Item 4260-101-0001 of Section 
2.00 is hereby deleted.
(c) Provision 13 is added to Item 4260-101-0001 of 
Section 2.00, to read:
13. It is the intent of the Legislature to actively pursue 
the receipt of federal funds within the Medicaid (Medi-
Cal) Program which are past due from the federal 
government, including, but not limited to: (a) disability 
insurance benefits that resulted in state expenditures 
instead of federal Medicare expenditures, (b) the 
retroactive payment of Part B premiums due to 
systemic errors by the federal Social Security 
Administration, (c) needed adjustments to formulas 
that penalize California, such as the Medicare Part D 
"clawback," and (d) receipt of federal funds due to 
California under various existing Medi-Cal waiver
programs.
(d) Schedule (4) of Item 4260-101-0001 of Section 
2.00 is hereby revised to be −$284,246,000.
(e) The amount appropriated in Item 4260-111-0001 
of Section 2.00 is hereby reduced by $4,303,000 
$29,303,000.
(f) Provision 3 is added to Item 4260-111-0001 of 
Section 2.00, to read:
3. The State Department of Health Care Services 
shall convene a diverse workgroup as applicable that, 
at a minimum, represents families enrolled in the 
California Children’s Services (CCS) Program, 
counties, specialty care providers, children’s 
hospitals, and medical suppliers to discuss the 
administrative structure of the CCS Program, including 
eligibility determination processes, the use and 
content of needs assessment tools in case 
management, and the processes used for treatment 
authorizations. The purpose of this workgroup will be 
to identify methods for streamlining, administrative 
cost-efficiencies, and better utilization of both state 
and county staff, as applicable, in meeting the needs 
of children and families accessing the CCS Program. 
The department may provide the policy and fiscal 
committees of each house of the Legislature with 
periodic updates of outcomes as appropriate.
(g) Schedule (3) of Item 4260-111-0001 of Section 
2.00 is hereby revised to be −$58,188,000.
(h) The amount appropriated in Item 4260-113-0001 
of Section 2.00 is hereby reduced by $47,265,000."

SEC. 18.10-I am reducing the item of General Fund 
appropriation in subdivision (c) of this section by 
$80,473,000 as opposed to approving the item as 
presented without reduction.  Thus, I am increasing 
the General Fund reduction from $62,967,000 to 
$143,440,000.

The effect of my action reflects the deletion of various 
legislative restorations for public health local 
assistance programs to increase the reserve and to 
reduce the state's structural deficit, consistent with my 
May Revision proposals.  When making these difficult 
reductions to important program services, I have 
sought to protect the continued delivery of drug 
therapies to low-income individuals living with HIV and 
thus retained funding for the AIDS Drug Assistance 
Program.

Specifically, I am eliminating:

· $52,133,000 General Fund for various programs 
	administered by the Office of AIDS:  Education and 
	Prevention, Therapeutic Monitoring, Counseling 
	and Testing, Early Intervention, Home and 
	Community Based Care, and Housing, 
· $16,337,000 General Fund for the Domestic 
	Violence Program,
· $9,000,000 General Fund for the Adolescent 
	Family Life Program, and
· $3,003,000 General Fund for the Black Infant 
	Health Program.

I am deleting subdivision (d) of this section to conform 
to this action.

"SEC. 18.10.  (a) The amount appropriated in Item 
4265-001-0001 of Section 2.00 is hereby reduced 
by $6,981,000.
(b) Schedule (6) of Item 4265-001-0001 of Section 
2.00 is hereby revised to be -$38,739,000.
(c) The amount appropriated in Item 4265-111-0001 
of Section 2.00 is hereby reduced by 
$62,967,000$143,440,000.
(d) Provision 2 is added to Item 4265-111-0001 of 
Section 2.00, to read:
2. It is the intent of the Legislature that the funds 
appropriated in this item be used to maintain core 
active surveillance activities to meet federal reporting 
requirements and to continue HIV/AIDS prevention 
and education efforts for which federal funds are not 
available.
(e) Provision 3 is added to Item 4265-111-0001 of 
Section 2.00, to read:
3.  The appropriation in this item for the Alzheimer's 
Research Centers shall be used for direct services, 
including, but not limited to, diagnostic screening, 
case management, disease management, support for 
caregivers, and related services necessary for 
positive client outcomes."

SEC. 18.20-I am reducing the item of General Fund 
appropriation in subdivision (a) of this section by 
$47,050,000 as opposed to approving the item as 
presented without reduction. I am also reducing the 
item of General Fund appropriation in subdivision (c) 
of this section by $2,950,000 as opposed to 
approving the item as presented without reduction. 
Thus, I am increasing the General Fund reduction in 
Item 4280-101-0001 from $125,581,000 to 
$172,631,000, and in Item 4280-102-0001 from 
$3,046,000 to $5,996,000.

The effect of my action reflects a reduction of 
$50,000,000 (from $275,251,000 to $225,251,000 in 
total General Fund program funding) to increase the 
reserve and to reduce the state’s structural deficit.  
While this is a very difficult reduction, the Healthy 
Families program is not an entitlement and is a 
program that can be reduced during this difficult 
economic period.  I hereby direct the Health and 
Human Services Agency to continue to work with the 
California Children and Families Commission, with 
local commissions, foundations, and other interested 
parties to provide additional resources to supplement 
General Fund appropriations and provide health care 
coverage for as many children as possible.

"Section 18.20.  (a) The amount appropriated in Item 
4280-101-0001 of Section 2.00 is hereby reduced by 
$125,581,000 $172,631,000.
(b) Provision 2 is added to 4280-101-0001 of section 
2.00, to read:
2. It is the intent of the Legislature, during these 
unprecedented fiscal times, to maintain the integrity of 
the Healthy Families Program to continue to provide 
health, dental, and vision coverage to low-income 
children.  However, assistance from philanthropic 
organizations and other sources will be necessary in 
order for California to obtain its full allotment of federal 
funds to support this program.  In the event funds are 
not available, it is the intent of the Legislature for the 
Managed Risk Medical Insurance Board to utilize its 
existing authority to establish a waiting list of children 
for enrollment in the program.
(c) The amount appropriated in Item 4280-102-0001 
of Section 2.0 is hereby reduced by $3,046,000 
$5,996,000."

SEC. 18.30-I am reducing the item of General Fund 
appropriation in subdivision (a) of this section by 
$50,000,000 as opposed to approving the item as 
presented without reduction.  Thus, I am increasing 
the reduction in subdivision (a) from $214,828,000 to 
$264,828,000.

I am reducing Regional Center Purchase of Services 
by $50,000,000 for services to children up to age five, 
as these services are due to program growth and thus 
eligible for funding from the California Children and 
Families Commission. I am directing the Secretary for 
the Health and Human Services Agency, the 
Department of Developmental Services, and the 
Department of Finance to immediately request funds 
from the Commission for this purpose.  I do not intend 
to pursue separate legislation changing eligibility or 
services for these children for purposes of achieving 
these savings.  I urge the Commission to provide 
supplemental funding for the growth in these services.

"SEC. 18.30.  (a) The amount appropriated in Item 
4300-101-0001 of Section 2.00 is hereby reduced by 
$214,828,000  $264,828,000.
(b) Schedule (4) of Item 4300-101-0001 of Section 
2.00 is hereby revised to be -$1,663,363,000."

SEC. 18.40-I am reducing the item of General Fund 
appropriation in subdivision (e) of this section by 
$4,082,000 as opposed to approving the item as 
presented without reduction.  Thus, I am increasing 
the General Fund reduction from $3,547,000 to 
$7,629,000.  I am vetoing $4,082,000 to increase the 
reserve and to reduce the state's structural deficit, 
consistent with my May Revision proposal to eliminate 
this program.

The effect of my action reflects a partial veto of 
the legislative restoration for the Caregiver Resource 
Centers.

"SEC. 18.40.  (a) The amount appropriated in Item 
4440-001-0001 of Section 2.00 is hereby reduced by 
$8,447,000.
(b) The amount appropriated in Item 4440-103-0001 
of Section 2.00 is hereby reduced by $113,380,000.
(c) The amount appropriated in Item 4440-104-0001 
of Section 2.00 is hereby reduced by $52,000,000.
(d) (1) Provision 1 of Item 4440-104-0001 of Section 
2.00 is hereby deleted.
(2) Provision 3 is added to Item 4440-104-0001 of 
Section 2.00, to read:
3. These funds are for costs incurred in the 2006-07, 
2007-08, 2008-09, and 2009-10 fiscal years. The 
first priority of funds appropriated in this item shall be 
used to offset the mandate reimbursement claims for 
the 2006-07 fiscal year. Remaining funds may be 
used to offset the mandate reimbursement claims for 
the 2007-08, 2008-09, and 2009-10 fiscal years.
(e) The amount appropriated in Item 4440-111-0001 
of Section 2.00 is hereby reduced by $3,547,000 
$7,629,000."

SEC. 18.50-I am reducing the item of General Fund 
appropriation in subdivision (d) of this section by 
$37,555,000 as opposed to approving the item as 
presented without reduction. Additionally, I reduce the 
item of General Fund appropriation in subdivision (f) 
of this section by $19,075,000 as opposed to 
approving the item as presented without reduction. 
Thus, I am increasing the General Fund reduction 
from $1,167,507,000 to $1,224,137,000.

The effect of my action reflects a reduction of 
$37,555,000 to In-Home Supportive Services (IHSS, 
Program 25.15) to reflect the following reductions:

· $28,900,000 due to the determination that it is 
	necessary to waive exemptions included in 
	paragraph (2) of subdivision (e) of Section 29 of X4 
	AB 4 to maintain federal financial participation.  
	Due to this determination, more IHSS recipients will 
	be impacted by the reduction in services authorized 
	in X4 AB 4.
· $8,655,000 from reducing funding for IHSS Public 
	Authority administration.  This leaves $10,000,000 
	General Fund available for the Public Authorities to 
	provide assistance to recipients in finding IHSS 
	providers, investigate qualifications of potential 
	IHSS providers, and offer training to IHSS 
	providers.

These reductions total $37,555,000, which I am 
reducing from subdivision (d) of this Control Section.  I 
am making these reductions so we have a prudent 
reserve and resources to address emergencies or 
additional revenue shortfalls.

My action also reflects a reduction of $19,075,000 to 
Title IV-E Waiver (Program 26) to increase the reserve 
for economic uncertainties and to reduce the state's 
structural deficit, consistent with my May Revision 
proposal to achieve an unallocated reduction in the 
Child Welfare Services Program.  I am reducing a total 
of $79,956,000 for this purpose: $19,075,000 from 
subdivision (f) of this Control Section and 
$60,881,000 from Item5180-151-0001.

"Sec. 18.50. (a) The amount appropriated in Item 
5180-001-0001 of Section 2.00 is hereby reduced by 
$7,337,000.
(b) Provision 9 of Item 5180-001-0001 of Section 2.00 
is hereby deleted.
(c) The amount appropriated in Item 5180-101-0001 
of Section 2.00 is hereby reduced by $500,501,000.
(d) The amount appropriated in Item 5180-111-0001 
of Section 2.00 is hereby reduced by $643,248,000 
$680,803,000.
(e) Schedule (5) of Item 5180-111-0001 of Section 
2.00 is hereby deleted.
(f) The amount appropriated in Item 5180-153-0001 of 
Section 2.00 is hereby reduced by $16,421,000 
$35,496,000."



With the above deletions, revisions, and reductions, I 
hereby approve Assembly Bill 1, Fourth Extraordinary 
Session.




                                     ARNOLD SCHWARZENEGGER