BILL NUMBER: AB 1018	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Hill

                        FEBRUARY 27, 2009

   An act to amend Sections 13308 and 13337 of, and to add Section
13308.1 to, the Government Code, relating to state finance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1018, as introduced, Hill. State finance.
   Existing law requires the Governor to submit to the Legislature,
on or before January 10 of each year, a proposed budget for the
ensuing fiscal year that shall contain estimates of anticipated state
revenues and itemized statements of all proposed expenditures of the
state for that fiscal year. Existing law further requires the
Director of Finance to submit to the Legislature, on or before May 14
of each year, revised estimates of General Fund revenues for the
current fiscal year and the ensuing fiscal year.
   This bill would require the Governor's proposed budget to also
include estimates of revenues and expenditures for the 3 subsequent
fiscal years. In addition, the bill would require the Director of
Finance to submit to the Legislature revised estimates of revenues
and expenditures for the current fiscal year and for the 3 subsequent
fiscal years on or before May 14, July 15, and September 15 of each
year. For each of those revised estimates, the bill would require the
Controller and the Treasurer to review the revised estimates and to
submit an assessment of those estimates to the fiscal committees of
each house of the Legislature and to the Director of Finance on or
before specified dates.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 13308 of the Government Code is amended to
read:
   13308.  (a) The Director of Finance shall provide to the
Legislature, on or before February 1 of each year, all proposed
statutory changes, as prepared by the Legislative Counsel, that are
necessary to implement the Governor's Budget, as described in
subdivision (a) of Section 13337.
   (b) The Director of Finance shall provide to the Legislature, on
or before April 1 of each year, all proposed adjustments to the
Governor's Budget except as specified by subdivisions (c) and (d).
   (c) The Director of Finance shall provide to the Legislature, on
or before May 1 of each year, all proposed adjustments to the
Governor's Budget in appropriations for capital outlay.
   (d) The Director of Finance shall provide to the Legislature, on
or before May 14 of each year, all of the following:
   (1)  An estimate   Estimates  of General
Fund revenues for the current fiscal year  and 
 ,  for the ensuing fiscal year  , and for the three
subsequent fiscal years  .  The Controller and the Treasurer
shall review   the estimates of General Fund revenues for
the ensuing fiscal year and for the three subsequent fiscal years and
shall jointly submit the following information to the fiscal
committees of each house of the Legislature and to the Director of
Finance on or before May 31 of each year: 
   (A) A description of the economic context for the estimates of
General Fund revenues, including trends in financial markets and
effects on borrowing.  
   (B) An assessment of the estimates of General Fund revenues and,
if significantly different, alternative estimates.  
   (C) An assessment of the Director of Finance's revised expenditure
proposal, focusing primarily on the following:  
   (i) The impact of changes or anticipated changes to state
statutory law, state constitutional law, federal law, and case law.
 
   (ii) The impact of anticipated enrollment and caseload changes,
federal mandates, court orders, and related cost factors affecting
the estimates. 
   (2) Any proposals to reduce expenditures to reflect updated
revenue estimates.
   (3) All proposed adjustments to the Governor's Budget that are
necessary to reflect updated estimates of state funding required
pursuant to Section 8 of Article XVI of the California Constitution,
or to reflect caseload enrollment or population changes.
   (e) The Director of Finance may authorize suspension for the
current fiscal year of any provision of this section not sooner than
30 days after notification in writing of the necessity therefor to
the chairperson of the committee in each house that considers the
State Budget and the Chairperson of the Joint Legislative Budget
Committee.
  SEC. 2.  Section 13308.1 is added to the Government Code, to read:
   13308.1.  (a) The Director of Finance shall provide to the
Legislature on July 15 and on September 15 of each year estimates of
General Fund revenues and expenditures for the current fiscal year
and the three subsequent fiscal years.
   (1) Each estimate of General Fund revenues required by this
subdivision shall describe the assumptions and economic factors
affecting the estimate, including all of the following:
   (A) Actual data and trend information pertaining to average
personal income, wages and salaries, taxable sales, the Consumer
Price Index, the unemployment rate, housing permits, and population
growth.
   (B) National economic data, including housing starts, the annual
percentage change in real Gross Domestic Product, and the per-barrel
price of imported crude petroleum.
   (C) Details behind revenue assumptions for personal income tax,
sales and use tax, and corporate tax. Those details shall quantify
the impact of economic factors such as stock market performance, real
estate trends, capital gains, taxable sales and profits, vehicle
sales, and the impact of recent and anticipated changes to federal
tax law.
   (2) Each estimate of General Fund expenditures required by this
subdivision shall describe the bases for the estimate, including any
recent or anticipated changes to state statutory law, state
constitutional law, federal law, and case law, in order to provide a
reasonable baseline projection of expenditure patterns for the period
of the estimate. The estimate shall also include year-by-year
presentations and explanations for all of the following:
   (A) Prior-year General Fund balances.
   (B) Total annual revenues, transfers, and expenditures.
   (C) Yearend General Fund balances.
   (D) Encumbrances.
   (E) Reserve amounts.
   (F) The Budget Stabilization Account.
   (G) The Special Fund for Economic Uncertainties.
   (H) Caseload changes, including In-Home Supportive Services
caseloads.
   (I) Population changes, including the inmate population.
   (J) New or anticipated federal program requirements.
   (K) New or anticipated court orders.
   (L) The Debt Service Ratio.
   (M) Other factors affecting program costs.
   (N) Underlying Proposition 98 forecast factors, including K-12
average daily attendance, per capita personal income, per capita
General Fund, community college full-time equivalent students, and
the K-14 cost of living adjustment.
   (O) Projected General Fund spending identified by major programs,
including K-14 Proposition 98 (separated first by General Fund and
local property taxes and second by Proposition 98 Quality Education
Investment and settle-up), the California State University, the
University of California, the Student Aid Commission, Medi-Cal,
CalWORKs, Supplemental Security Income/State Supplementary Payments,
In-Home Supportive Services, the State Department of Developmental
Services, the State Department of Mental Health, the Department of
Corrections and Rehabilitation, the judiciary, Proposition 42, debt
service on infrastructure bonds, and other major social programs.
   (b) The Controller and the Treasurer shall review the estimates
generated pursuant to subdivision (a) and shall jointly submit the
following information to the fiscal committees of each house of the
Legislature and to the Director of Finance on or before August 1 of
each year, with respect to the July 15 estimates, and on or before
October 1, with respect to the September 15 estimates:
   (1) A description of the economic context for the estimates of
General Fund revenues, including trends in financial markets and
effects on borrowing.
   (2) An assessment of the estimates of General Fund revenues and,
if significantly different, alternative estimates.
   (3) An assessment of the Director of Finance's estimates of
General Fund expenditures, focusing primarily on the following:
   (A) The impact of changes or anticipated changes to state
statutory law, state constitutional law, federal law, and case law.
   (B) The impact of anticipated enrollment and caseload changes,
federal mandates, court orders, and related cost factors affecting
the estimates.
  SEC. 3.  Section 13337 of the Government Code is amended to read:
   13337.  (a) The budget required by the  State 
 California  Constitution to be submitted by the Governor at
each regular session of the Legislature shall be submitted within
the first 10 days thereof and shall contain a complete plan and
itemized statement of all proposed expenditures of the state provided
by existing law or recommended by him or her, and all of its
institutions, departments, boards, bureaus, commissions, officers,
employees, and other agencies, and of all estimated revenues, for the
ensuing fiscal year, together with a comparison, as to each item of
revenues and expenditures, with the actual revenues and expenditures
for the last completed fiscal year, the estimated revenues, and
expenditures for the existing fiscal year and the budgeted revenue
and expenditures for the next fiscal year.  The bud  
get shall also contain estimates of revenues and expenditures for the
three subsequent fiscal years. The Controller and the Treasurer
shall review the estimates of revenues for the next fiscal year and
the three subsequent fiscal years and shall jointly submit the
following information to the fiscal committees of each house of the
Legislature and to the Director of Finance on or before February 1 of
each year:  
   (1) A description of the economic context for the estimates of
revenues, including trends in financial markets and effects on
borrowing.  
   (2) An assessment of the estimates of revenues and, if
significantly different, alternative estimates.  
   (3) An assessment of the Director of Finance's revised expenditure
proposal, focusing primarily on the following: 
   (A) The impact of changes or anticipated changes to state
statutory law, state constitutional law, federal law, and case law.
 
   (B) The impact of anticipated enrollment and caseload changes,
federal mandates, court orders, and related cost factors affecting
the estimates. 
   (b) The budget shall, in accordance with Chapter 2 (commencing
with Section 41200) of Part 24 of  Division 3 of Title 2 of 
the Education Code, include a section that specifies the percentages
and amounts of General Fund revenues that must be set aside and
applied for the support of school districts, as defined in Section
41302.5, and community college districts, as required by subdivision
(b) of Section 8 of Article XVI of the California Constitution.
   (c) The Governor, or the Department of Finance acting on his or
her behalf, shall make appropriate changes in the budget request to
reflect any modification in the organization or functions of state
government proposed under Article 7.5 (commencing with Section 12080)
of Chapter 1 prior to the passage of the budget.
   (d) The Governor's Budget shall be prepared in accordance with
guidelines and instructions adopted by the Department of Finance.
   (e) In order to provide meaningful comparisons, the Governor's
Budget shall be prepared in such a manner that the information
presented provides for  such   those 
comparisons between the fiscal years.
   (f) The Department of Finance shall submit to the committee in
each house which considers appropriations and to the Joint
Legislative Budget Committee copies of budget material submitted to
it by agencies pursuant to the provisions of Article 2 (commencing
with Section 13320).
   (g) The Governor's Budget shall also include a coding structure
which indicates for each budget entity the categorization of
expenditures and revenues.
   (h) Prior to the submission of the Governor's Budget to the
Legislature, the Department of Finance may conduct public hearings
regarding any portion of any budget.
   (i) The Governor, or the Department of Finance acting on his or
her behalf, shall, at the same time the Governor's Budget is
submitted to the Legislature, submit to the Legislature copies of the
material for the purposes of subdivision (j).
   (j) The Department of Finance shall develop a fiscal information
system which will provide timely and uniform fiscal data needed to
formulate and monitor the budget, including, but not limited to,
 on-line   online  inquiry capacity and the
ability to simulate budget expenditures and forecast revenues. This
system may include, among other things, data on encumbrances and
expenditures by line item, governmental unit, and fund source. The
system shall also include expenditures and encumbrances by program,
as required. This system shall also include a coding structure which
indicates the categorization of expenditures and revenues. This
system and the data shall be available to both the legislative and
executive branches. The system may contain separate programs
accessible by only one branch, designed to provide for distinct
application of the data, but the basic system data shall be available
on an equal basis to both the legislative and executive branches of
government.