BILL NUMBER: AB 191	CHAPTERED
	BILL TEXT

	CHAPTER  29
	FILED WITH SECRETARY OF STATE  JUNE 22, 2010
	APPROVED BY GOVERNOR  JUNE 22, 2010
	PASSED THE SENATE  JUNE 21, 2010
	PASSED THE ASSEMBLY  JUNE 17, 2010
	AMENDED IN SENATE  JUNE 14, 2010

INTRODUCED BY   Committee on Budget (Evans (Chair), Arambula, Beall,
Blumenfield, Brownley, Caballero, Carter, De La Torre, Feuer, Hill,
Huffman, Monning, Ruskin, and Swanson)

                        FEBRUARY 2, 2009

   An act to amend Section 16326 of the Government Code, and to amend
Section 2103.1 of the Streets and Highways Code, relating to state
cash resources, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 191, Committee on Budget. State cash resources.
   (1) Existing law, until September 1, 2011, enacts a cash
management plan to authorize the Controller, Treasurer, and Director
of Finance to defer General Fund payments for the months of July and
October of 2010 and March 2011 for up to 60, 90, and 60 days,
respectively, for certain entities, including county offices of
education, public schools, and charter schools, subject to certain
conditions. Existing law limits the total outstanding amount of
deferrals for these entities to $2,500,000,000 at any given time.
Existing law, under certain conditions, authorizes these entities to
request a hardship waiver for the March 2011 deferral, and requires
payments deferred in March 2011 for public schools in which
kindergarten or grades 1 to 12, inclusive, are taught to be paid no
later than April 29, 2011.
   This bill would instead require all March 2011 deferred payments
to county offices of education, school districts, and charter schools
to be made no later than April 29, 2011. The bill would make other
related changes.
   (2) Existing law provides for the deferral of specified fuel tax
apportionments from the Highway Users Tax Account to cities and
counties, including a deferral of no more than $50,000,000 each month
on a pro rata basis for July, August, September, October, November,
and December 2010 and January, February, and March 2011. The balance
of unpaid apportionments for these months is required to be paid on
or within 2 business days of April 28, 2011. However, a county with a
population of less than 50,000 or a city within that county is
exempt from these deferrals.
   This bill would additionally authorize any city to request an
exemption from all or a portion of these deferrals if the deferrals
would create a hardship in making specified bond debt payments. The
bill would require a city requesting an exemption to submit specified
documentation to the Director of Finance, who would have the sole
discretion to approve or deny the exemption.
   (3) Existing law requires that warrants for the principal
apportionments from the State School Fund for school districts for
the month of June instead be drawn in July of the same calendar year
pursuant to a specified certification.
   This bill, notwithstanding that provision, for the 2009-10 fiscal
year only, would require that an amount up to $800,000,000, to be
calculated as specified, of warrants for the principal apportionments
for the month of June 2010 be drawn in June 2010.
   (4) 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 16326 of the Government Code is amended to
read:
   16326.  (a) Notwithstanding any other law, except as otherwise
specified in Sections 16325 and 16325.5, cash deferrals specified in
Sections 16325 and 16325.5, and Section 2103.1 of the Streets and
Highways Code, as amended by the act amending this section in the
2009-10 Regular Session, shall be limited, as follows:
   (1) Payments to school districts, county offices of education, and
charter schools shall be deferred as specified in Section 16325.5
with the total amount of the deferrals under this action limited to
two billion five hundred million dollars ($2,500,000,000) for each
deferral, and a maximum of three deferrals during the fiscal year.
The total outstanding amount of these deferrals, as described in
Section 16325.5, shall not exceed two billion five hundred million
dollars ($2,500,000,000) at any given time. The Controller,
Treasurer, and the Director of Finance shall determine and jointly
provide a written declaration to the Legislature and to the State
Department of Education, and the State Department of Education shall
inform school districts, county offices of education, and charter
schools of the amounts and timing of payment deferrals for the
2010-11 fiscal year. This declaration shall be provided no later than
March 31, 2010. It is the intent of the Legislature that the advance
principal apportionment payment due in July be deferred first as a
part of the July 2010 deferral as specified in Section 16325.5.
   (A) Subject to the approval of the Director of Finance, in order
for a county office of education to receive scheduled apportionments
from the Controller if payments are deferred, as specified in Section
16325.5, the Superintendent of Public Instruction shall certify that
the deferral of warrants will result in the county office of
education being unable to meet its expenditure obligations for the
time period during which warrants are deferred, and shall notify the
Director of Finance of this fact on or before June 1, 2010. Subject
to the approval of the Director of Finance, a county office of
education that did not receive apportionments for July 2010 and
October 2010, as specified in Section 16325.5, may seek a hardship
waiver to receive scheduled apportionments from the Controller if
payments are deferred in March 2011. To apply for a hardship waiver,
the Superintendent of Public Instruction shall certify that the
deferral of March 2011 warrants will result in the county office of
education being unable to meet its expenditure obligations for the
time period during which warrants are deferred, and shall notify the
Director of Finance of this fact on or before January 5, 2011. The
criteria, as applicable, set forth in statute and regulations to
qualify a school district for an emergency apportionment shall be
used to make the certifications specified in this subparagraph.
   (B) Subject to the approval of the Director of Finance, in order
for a charter school to receive scheduled apportionments from the
Controller if payments are deferred, as specified in Section 16325.5,
the chartering authority, in consultation with the county
superintendent of schools, shall certify that the deferral of
warrants will result in the charter school being unable to meet its
expenditure obligations for the time period during which warrants are
deferred, and shall notify the Superintendent of Public Instruction
and the Director of Finance of this fact on or before June 1, 2010.
Subject to the approval of the Director of Finance, a charter school
that did not receive apportionments for July 2010 and October 2010,
as specified in Section 16325.5, may seek a hardship waiver to
receive scheduled apportionments from the Controller if payments are
deferred in March 2011. To apply for a hardship waiver, the
chartering authority, in consultation with the county superintendent
of schools, shall certify that the deferral of March 2011 warrants
will result in the charter school being unable to meet its
expenditure obligations for the time period during which warrants are
deferred, and shall notify the Superintendent of Public Instruction
and the Director of Finance on or before January 5, 2011. The
criteria, as applicable, set forth in statute and regulations to
qualify a school district for an emergency apportionment shall be
used to make the certifications specified in this subparagraph.
   (C) Subject to the approval of the Director of Finance, in order
for a school district to receive scheduled apportionments from the
Controller if payments are deferred, as specified in Section 16325.5,
the county superintendent of schools shall certify to the
Superintendent of Public Instruction and to the Director of Finance
on or before June 1, 2010, that the deferral of warrants will result
in the school district being unable to meet its expenditure
obligations for the time period during which warrants are deferred.
Subject to the approval of the Director of Finance, a school district
that did not receive apportionments for July 2010 and October 2010,
as specified in Section 16325.5, may seek a hardship waiver to
receive scheduled apportionments from the Controller if payments are
deferred in March 2011. To apply for a hardship waiver, the county
superintendent of schools shall certify to the Superintendent of
Public Instruction and to the Director of Finance on or before
January 5, 2011, that the deferral of March 2011 warrants will result
in the school district being unable to meet its expenditure
obligations for the time period during which warrants are deferred.
The criteria, as applicable, set forth in statute and regulations to
qualify a school district for an emergency apportionment shall be
used to make the certifications specified in this subparagraph.
   (D) Notwithstanding Section 16325.5, payment of the March 2011
deferral to county offices of education, school districts, and
charter schools shall be made no later than April 29, 2011.
   (2) Of the amount appropriated from the General Fund to the
University of California for the 2010-11 fiscal year, payments made
by the state to the University of California shall not exceed
one-twelfth of the annual appropriation for each month from July 2010
through April 2011. Any remaining appropriation balance may be paid
to the University of California thereafter with no limitations.
   (3) Notwithstanding Sections 84320, 84321, and 84321.5 of the
Education Code and any other law that governs the regulations adopted
by the Chancellor of the California Community Colleges to disburse
funds, two hundred million dollars ($200,000,000) and one hundred
million dollars ($100,000,000) from the payment of apportionments to
districts pursuant to Sections 84320, 84321, and 84321.5 of the
Education Code for July 2010 and March 2011, respectively, shall be
deferred to October 2010 and May 2011, respectively. Notwithstanding
this paragraph and subject to the approval of the Director of
Finance, the Controller shall issue warrants pursuant to Sections
84320, 84321, and 84321.5 of the Education Code that include the full
amount of the apportionment payments for the months of July 2010 or
March 2011, or both, for a community college for which the Chancellor
of the California Community Colleges determines, in consultation
with the Director of Finance, on or before June 1, 2010, that the
deferral of warrants pursuant to this paragraph will present an
imminent threat to the fiscal integrity and security of the community
college.
   (4) Of the amount appropriated from the General Fund to the
California State University for the 2010-11 fiscal year, payments
made by the state to the California State University shall not exceed
one-twelfth of the annual appropriation for each month from July
2010 through April 2011. Any remaining appropriation balance may be
paid to the California State University thereafter with no
limitations.
   (5) The 2010-11 cash management plan described in Sections 16325
and 16325.5 may include deferrals in state payments for specific
programs that are disbursed to cities, counties, and other public
entities not addressed elsewhere in this section. Deferral of
payments by the state to cities, counties, and other public entities
not addressed elsewhere in this section shall be as follows:
   (A) Payments shall be deferred as specified in Section 16325.5 per
the specific program.
   (B) Payments shall be limited to one billion dollars
($1,000,000,000) for all programs that affect cities, counties, and
other public entities not addressed elsewhere in this section at any
given point in time.
   (C) A maximum of three deferrals per specific program may be made
during the fiscal year.
   (D) The state shall not defer any payments to a county with a
population less than 50,000, or a city within a county with a
population less than 50,000.
   (E) Payments to local governments may be deferred for social
services programs, transportation programs, and Mental Health
Services Act (Proposition 63 of 2004) programs.
   (6) In addition to implementing the payment schedule described in
paragraph (4), the Director of Finance may at any time during the
2010-11 fiscal year defer payment of General Fund moneys, in a
cumulative amount not to exceed two hundred fifty million dollars
($250,000,000), appropriated to the California State University.
Payment of the amount deferred shall be made in the final week of
April 2011.
   (b) Limits on payment deferrals specified in subparagraphs (A) and
(C) of paragraph (5) of subdivision (a) shall not apply to payments
authorized in paragraph (3) of subdivision (a) of Section 2103.1 of
the Streets and Highways Code to cities and counties. Limits on
payment deferrals specified in subparagraphs (A) and (C) of paragraph
(5) of subdivision (a) shall not apply to payments to the Mental
Health Services Act (Proposition 63) programs.
   (c) Upon the Controller's receipt of a letter from the executive
officer of the Administrative Office of the Courts, or any other
executive officer representing cities or counties, the state may
defer payments to the entity or entities that the executive officer
represents as specified in the letter even if the specified amounts
exceed the deferrals authorized in this section or elsewhere in law.
   (d) This section shall become inoperative on September 1, 2011,
and, as of January 1, 2012, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2012, deletes
or extends the dates on which it becomes inoperative and is
repealed.
  SEC. 2.  Section 2103.1 of the Streets and Highways Code is amended
to read:
   2103.1.  (a) Notwithstanding any other law, the apportionment of
revenues deposited to the credit of the Highway Users Tax Account in
the Transportation Tax Fund that are otherwise required to be made,
pursuant to this chapter, to cities, counties, and cities and
counties for the following months shall be deferred and shall be made
as follows:
   (1) For the months of July and August of 2009, the apportionments
shall be paid with the payment of August revenues in September 2009.
This deferral shall not apply to a county with a population of less
than 40,000.
   (2) For the months of November and December of 2009, and January,
February, and March of 2010, the apportionments shall be paid on or
within two business days of April 28, 2010. This deferral shall not
apply to a county with a population of less than 40,000.
   (3) (A) For the months of July, August, September, October,
November, and December 2010, and January, February, and March 2011,
no more than fifty million dollars ($50,000,000) for each month shall
be deferred on a pro rata basis, as determined by the Controller,
from all allocations to cities, counties, and cities and counties
from the Highway Users Tax Account. The balance of unpaid
apportionments for these months shall be paid on or within two
business days of April 28, 2011. The state shall not defer any
payments to a county with a population less than 50,000, or a city
within a county with a population less than 50,000.
   (B) A city may request an exemption from all or a portion of the
deferral in subparagraph (A) if the deferral will create a hardship
in making required bond debt payments. The request must be received
not less than 30 days prior to the date of the monthly payment that
is the subject of the city's request and that otherwise is subject to
deferral. The Director of Finance shall determine if the exemption
is necessary, and the exemption shall be approved or denied at his or
her sole discretion.
   (C) A city requesting an exemption pursuant to subparagraph (B)
shall provide all of the following documentation:
   (i) Month-by-month expected payments from the Highway Users Tax
Account.
   (ii) The timing and amount of the required bond payments.
   (iii) Evidence that the deferral of payments from the Highway
Users Tax Account will result in the inability of the city to meet
bond payments specified in clause (ii).
   (b) For the purpose of meeting the cash obligations associated
with ongoing budgeted costs, a city, county, or city and county may
borrow from its account that is designated for the receipt of state
funds allocated for local streets and roads or the county road fund,
including that resulting from the receipt of funds pursuant to the
Highway Safety, Traffic Reduction, Air Quality, and Port Security
Bond Act of 2006 (Chapter 12.49 (commencing with Section 8879.20) of
Division 1 of Title 2 of the Government Code) and apply the proceeds
of the borrowing to local street and road maintenance and operations,
during the period of the deferrals of apportionment payments
pursuant to subdivision (a). Any borrowing from funds that is
disbursed by the Controller's office on or after March 1, 2010, shall
be repaid with interest, computed at the current average rate of
interest earned by the local agency with respect to amounts on
deposit in the account from which the borrowing occurs, as determined
by the local agency, within the fiscal year in which the borrowing
initially occurs. Interest that is repaid on amounts borrowed
pursuant to this subdivision shall be applied by the local agency for
the purposes set forth in the Highway Safety, Traffic Reduction, Air
Quality, and Port Security Bond Act of 2006. The use of this cash
shall not be considered as an expenditure of bond act funds if the
cash is replaced when the payments in subdivision (a) are made.
   (c) Notwithstanding any other provision of law, for the purpose of
meeting the cash obligations associated with ongoing street and road
costs, a city, county, or city and county may make use of any cash
balance available to a special fund of the city, county, or city and
county during the period of deferral of apportionment payments
pursuant to subdivision (a).
   (d) This section shall not affect any requirement that an
expenditure is required to be accrued and reflected from the
appropriate funding source for which the money was received and that
an expenditure is required to meet all the requirements of its
funding source.
  SEC. 3.  Notwithstanding subdivision (a) of Section 14041.5 of the
Education Code, for the 2009-10 fiscal year only, an amount up to
eight hundred million dollars ($800,000,000) of warrants for the
principal apportionments for the month of June 2010 shall be drawn in
June 2010. The amount of the warrants drawn in June pursuant to this
section shall not exceed the amount of the principal apportionments
for the month of June less the amount of one billion one hundred one
million six hundred fifty-five thousand dollars ($1,101,655,000)
that, pursuant to subdivision (e) of Section 14041.5 of the Education
Code, is deemed "General Fund revenues appropriated for school
districts," as defined in subdivision (c) of Section 41202 of the
Education Code, and included within the "total allocations to school
districts and community college districts from General Fund proceeds
of taxes appropriated pursuant to Article XIII B," as defined in
subdivision (e) of Section 41202 of the Education Code, for the
2010-11 fiscal year.
  SEC. 4.  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 to provide hardship relief to certain public entities
from the deferred payment of state funds to those agencies, it is
necessary that this act take effect immediately.