BILL NUMBER: AB 2591 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 10, 2010
AMENDED IN ASSEMBLY APRIL 8, 2010
AMENDED IN ASSEMBLY MARCH 17, 2010
INTRODUCED BY Assembly Members Feuer and John A. Perez
FEBRUARY 19, 2010
An act to amend Section 13337 of, and to add Sections
9143.5, 9145, 10247.5, 13335.3, and 13335.5 to , the
Government Code, relating to state finance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2591, as amended, Feuer. State finance: budget process.
Under existing law, duties and responsibilities are imposed upon
the Governor and the Director of Finance relating to the preparation
and submission of the annual state budget to the Legislature,
including, among other things, providing a complete plan of all
proposed expenditures and estimated revenues for the ensuing fiscal
year. Existing provisions of the California Constitution prohibit the
Legislature from sending to the Governor for consideration, and
prohibit the Governor from signing, a Budget Bill that would
appropriate from the General Fund a total amount that, when combined
with specific appropriations and transfers, exceeds the General Fund
revenues for that fiscal year estimated as of the date of the Budget
Bill's passage.
This bill would make statutory changes to the state budget
process to implement and conform to constitutional changes
proposed by ACA 4 and would become operative only if ACA 4 is
approved by the voters.
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 9143.5 is added to the Government Code, to
read:
9143.5. (a) Within one year of the operative date of the act that
added this section, the Legislature shall establish a process,
including the use of a new or existing joint committee, for reviewing
the performance of all state programs at least once every 10 years.
The process shall include a schedule with deadlines for the review of
programs. It shall provide for the review of programs the
expenditures for which total one-third or more of all expenditures by
July 1, 2015, and for the review of programs the expenditures for
which total two-thirds of all expenditures by January 1, 2018. For
purposes of this section, "expenditures" includes, in addition to
state program costs, statutory exemptions, deductions, credits, or
exclusions from taxes or fees that would otherwise apply.
(b) Six months prior to the deadline for review of each program,
the joint committee shall refer the initial program review to the
appropriate policy committees of each house of the Legislature. For
programs with common objectives, the reviews may be combined. Within
90 days of the deadline, the policy committees shall make
recommendations regarding the program to the joint committee. The
joint committee's review may be based on the recommendations of the
policy committees, as well as recommendations that may be made by the
Milton Marks "Little Hoover" Commission on California State
Government Organization and Economy, the Legislative Analyst, the
Bureau of State Audits, or the public. In preparing proposed
legislation for a program being reviewed, the joint committee shall
propose one or more of the following:
(1) Modifications to the program that will reduce costs.
(2) Modifications to the program that will improve outcomes.
(3) Termination of the program.
(c) Proposed legislation of the joint committee shall be submitted
to the committee on rules of each house for referral to the
appropriate policy committee for public hearing and further action.
(d) The joint committee shall post on its Internet Web site its
recommendations and the results of the Legislature's action.
SEC. 2. Section 9145 is added to the Government Code, to read:
9145. (a) Before a bill, or a measure that proposes to amend or
revise the California Constitution, that has been referred to the
fiscal committee of either house is read for a third time in either
house of the Legislature, the fiscal committee of the respective
house of the Legislature shall determine whether the bill or measure
is subject to review by the Legislative Analyst pursuant to this
section. If the committee refers the bill or measure to the
Legislative Analyst for review, the Legislative Analyst shall
determine whether the bill or measure would result in a net increase
in qualified state costs or a net decrease in state revenue. The
Legislative Analyst shall submit the analysis of the bill or measure
to the fiscal committees of each house of the Legislature and shall
place the analysis on his or her Internet Web site if he or she
determines that the bill or measure would result in either a net
increase in qualified state costs or a net decrease in state revenue
in excess of twenty-five million dollars ($25,000,000) annually, as
adjusted for inflation pursuant to the California Consumer Price
Index.
(b) (1) If the Legislative Analyst determines a bill or measure
would result in either a net increase in qualified state costs or a
net decrease in state revenue in excess of twenty-five million
dollars ($25,000,000) annually, as adjusted for inflation pursuant to
the California Consumer Price Index, the Legislative Analyst shall
determine whether the bill or measure, if enacted, would comply with
the requirements of subdivision (e) of Section 8 of Article IV, or
Section 3.5 of Article XVIII, as applicable, of the California
Constitution.
(2) A statute or measure shall be deemed to comply with the
requirements of subdivision (e) of Section 8 of Article IV, or
Section 3.5 of Article XVIII, as applicable, of the California
Constitution if the Legislative Analyst determines that the net
increase in qualified state costs or net decrease in state revenues
that would be imposed by the bill enacting the statute or measure
proposing to amend or revise the California Constitution does not
exceed the amount by which state revenues exceed state expenditure
obligations for the prior fiscal year, the current fiscal year, or
any of the three succeeding fiscal years, whichever is least.
(c) If the Legislative Analyst makes a determination pursuant to
subdivision (b) that a bill, if enacted, or measure would not comply
with the requirements of subdivision (e) of Section 8 of Article IV,
or Section 3.5 of Article XVIII, as applicable, of the California
Constitution, and the Legislature, by two-thirds vote of the
membership of each house, makes a finding, based on its financial
analysis, that the bill or measure would result in a net increase in
qualified state costs or a net decrease in state revenue in an amount
equal to, or less than, twenty-five million dollars ($25,000,000)
annually, as adjusted for inflation pursuant to the California
Consumer Price Index, the bill, if enacted, or measure shall be
deemed to be in compliance with subdivision (e) of Section 8 of
Article IV, or Section 3.5 of Article XVIII, as applicable, of the
California Constitution.
(d) For purposes of this section, the determination by the
Legislative Analyst as to whether a bill or measure would result in a
net increase in qualified state costs or a net decrease in state
revenue may include consideration of the impact of program changes
attributable to cost savings or changes in revenues of other state or
local programs that are reasonably expected to occur as a result of
the implementation of the bill or measure. The Legislative Analyst
shall establish the time period for its analysis under this section.
(e) For purposes of this section and Section 10247.5, and
subdivision (e) of Section 8 and paragraph (2) of subdivision (a) of
Section 12 of Article IV, and Section 3.5 of Article XVIII, of the
California Constitution, the following terms have the following
meanings:
(1) "Qualified state costs" means costs to the state, whether paid
from General Fund or special fund sources. "Qualified state costs"
does not include the following:
(A) Costs incurred for the payment of principal and interest on a
general obligation bond.
(B) The restoration of funding to an agency or program that was
reduced in a prior fiscal year or years in order to balance the
budget or address a forecasted deficit if any of the following
apply applies :
(i) The bill or measure restores reductions in appropriations made
pursuant to a declaration of fiscal emergency under subdivision (f)
of Section 10 of Article IV of the California Constitution.
(ii) The bill or measure restores reductions in appropriations
made prior to the operative date of the act adding this section if
the Legislature makes a finding that the reductions in the program's
or agency's funding were necessary in order to balance the Budget or
to address a mid-year deficit and that expanding the program or
agency is limited to restoring the program's or agency's funding to
the level that existed prior to the reductions.
(iii) The bill or measure restores reductions in appropriations
made on or after the operative date of the act that added this
section if the Legislature makes a finding that at the time the
reductions were made, the reductions in the program's or agency's
funding were necessary to balance the Budget or to address a
forecasted deficit, and that at the time the funding is restored, the
expansion of the program or agency is limited to restoring the
program program's or agency's funding
to the level that existed prior to the reductions made pursuant to
paragraph (4) of subdivision (f) of Section 10 of Article IV of the
California Constitution:
(C) Increases in a program's or agency's funding contained in the
Budget Bill or in a budget implementation bill which are limited to
the fiscal year for which the bill was enacted.
(D) Growth in a program's or agency's funding attributable to
increases in the cost of living or workload, including an increase
contained in a memorandum of understanding approved by the
Legislature.
(E) Growth in a program's or agency's funding required by federal
law or a California law that is in effect on the operative date of
the act that added this section.
(F) A bill or measure containing a requirement described in
paragraph (5) of subdivision (b) of Section 6 of Article XIII B of
the California Constitution.
(2) "A net increase in qualified state costs" means ongoing
expenditures for a program or agency and does not include a one-time
expenditure made by a program or agency.
(3) "Additional revenue" means revenue to the state that results
from specific changes made by federal or state law and that the state
agency responsible for collecting the revenue has quantified and
determined to be a sustained increase.
SEC. 3. Section 10247.5 is added to the Government Code, to read:
10247.5. Before a bill or measure is read for a third time in
either house of the Legislature, the digest of the Legislative
Counsel on the bill or measure shall reflect the determination made
by the Legislative Analyst pursuant to Section 9145 whenever the
Legislative Analyst determines that the bill or measure would result
in a net increase in qualified state costs or a net decrease in state
revenue in excess of twenty-five million dollars ($25,000,000)
annually, as adjusted for inflation pursuant to the California
Consumer Price Index.
SEC. 4. Section 13335.3 is added to the Government Code, to read:
13335.3. (a) The purpose of performance-based budgeting is to
inform policy, fiscal, and oversight decisions by the Governor and
Members of the Legislature; to focus managers, supervisors, and rank
and file workers on achieving desired goals; and to communicate to
the public the value of public programs, progress toward desired
results, and the choices available to improve the expenditure of
public funds.
(b) Every state agency for which an appropriation has been made
shall submit to the department a complete and detailed budget at the
time and in the form prescribed by the department, setting forth all
proposed expenditures and estimated revenues for the ensuing fiscal
year.
(c) The Budget submitted to the department and proposed by the
Governor shall use performance-based budgeting methods that make
clear to policymakers and the public the value and results of
existing operations and any proposed changes.
(d) A performance-based budget shall identify and update all of
the following:
(1) The mission and goals of the agency.
(2) The activities and programs focused on achieving those goals.
(3) Performance metrics that reflect desired outcomes for existing
and proposed activities and a targeted performance level for the
following year.
(4) Prior-year performance data and an explanation of any
deviation from previous-year targets.
(5) Proposed changes in statute, including the creation of
incentives or elimination of disincentives that could improve
outcomes or hold down costs.
(e) The Governor shall provide on his or her
an Internet Web site a summary of each state agency's
mission, goals, prior-year performance, and future-year objectives.
SEC. 5. Section 13335.5 is added to the Government Code, to read:
13335.5. (a) Not later than the 2014-15 fiscal year, and each
fiscal year thereafter, the Budget submitted by the Governor to the
Legislature required by Section 12 of Article IV of the California
Constitution shall use performance-based budgeting methods.
(b) The amount of each appropriation made in the Budget Act for
the 2014-15 fiscal year, and each fiscal year thereafter, for
expenditure by any state agency shall be determined after considering
performance-related data. The Budget Act introduced by the Governor
also shall include performance standards, which may be amended by the
Legislature. These standards shall apply to each state agency and
allow the public and policymakers to understand the effectiveness and
efficiency of each program.
(c) The Legislative Analyst shall review the adequacy of
performance metrics and progress toward targeted outcomes in the
Governor's budget proposal.
(d) A task force consisting of the director, the Controller, and
the chairpersons and vice chairpersons of the Senate Committee on
Budget and Fiscal Review and the Assembly Committee on Budget shall
do all of the following:
(1) Review and comment on guidelines and procedures drafted by the
department for use by state agencies in developing performance-based
budgets pursuant to Sections 13320 and 13335.3. The guidelines shall
describe how state employees will be involved in establishing and
implementing performance standards.
(2) Review and comment on a training program developed by the
department for appropriate executive branch personnel to ensure the
successful implementation of performance-based budgeting and
management by state agencies.
(3) Review and comment on a plan prepared by the department for
systematically phasing in the requirements of Sections 13320 and
13335.3. The plan shall ensure that by the 2012-13 fiscal year
performance-based budgeting methods are used in preparing, reviewing,
and enacting one-third or more of the total General Fund
expenditures proposed in the Governor's Budget for that fiscal year.
(e) For purposes of this article, "state agency" means any agency,
department, or other entity of the executive branch of the state
required to submit a budget pursuant to Article 2 (commencing with
Section 13320).
SEC. 6. Section 13337 of the Government
Code is amended to read:
13337. (a) (1) 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.
(2) The budget also shall contain a projection of anticipated
state expenditures and anticipated state revenues for the three
fiscal years following the fiscal year succeeding the budget year,
and budget-related plans and proposals for those three fiscal years.
For the succeeding fiscal year the Governor's budget shall identify
the fiscal condition of the General Fund based on proposals contained
in the proposed budget for the budget year. The budget submitted
shall include the following:
(A) An estimate of the long-term impact of expenditure and revenue
proposals will have on the economy of California.
(B) The five-year capital infrastructure plan as required in
Section 13100.
(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 of the Education Code , 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 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.
(k) After submitting a budget for the budget year and the
succeeding fiscal year, the Governor shall submit to the Legislature
updated projections of state revenue and state expenditures for each
of those fiscal years according to the following schedule:
(1) January 10 of each year, as part of the Governor's budget
introduction.
(2) May 15 of each year.
(B) Immediately following the report of recommendations by the
joint committee pursuant to paragraph (3) of subdivision (c) of
Section 12 of Article IV of the California Constitution.
(C) October 15 of each year.
SEC. 6. Sections 1 to 5
SEC. 7. Sections 1 to 6 , inclusive, of this
act shall become operative only if ACA 4 is approved by the voters,
and they shall become operative upon the operative date of that
measure.