BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 80
                                                                  Page  1


          SENATE THIRD READING
          SB 80 (Budget and Fiscal Review Committee)
          As Amended  June 25, 2009
          2/3 vote.  Urgency 

           SENATE VOTE  :Vote not relevant  
           
           SUMMARY  :  Revises requirements for redevelopment agencies to  
          transfer $350 million of their tax increment funds to county  
          Educational Revenue Augmentation Funds (ERAFs) for the 2008-09  
          fiscal year.  Specifically,  this bill  :

          1)Revises the one-time shift of $350 million from redevelopment  
            agencies to ERAF that was enacted as part of the 2008-09  
            Budget Package.  The revisions in order to comply with a  
            recent Sacramento Superior Court decision (California  
            Redevelopment Association v. Genest).  That decision  
            invalidated the 2008-09 shift on the basis that the funds were  
            to be transferred to the county ERAFs for countywide education  
            funding without any specific linkage to the redevelopment  
            projects or areas.  This measure targets the shifted funds to  
            school districts that fully or partially overlap redevelopment  
            project areas from which the funds are shifted.  Allocations  
            to the districts will be in proportion to their average daily  
            attendance.  As provided in the 2008-09 legislation, the  
            amount shifted from each redevelopment agency will be in  
            proportion to its share of statewide tax increment revenues. 

          2)Includes provisions requiring the appropriate allocation of  
            the ERAF funds to 2008-09 and for adjustment of the  
            Proposition 98 Test 1 state funding requirement, if necessary,  
            to recognize the additional ERAF property tax revenues that  
            schools will receive.  

          3)Urgency clause:  Declares this bill take effect immediately as  
            an urgency statute.

           FISCAL EFFECT  :  Provides General Fund savings of up to $350  
          million in 2008-09.  These savings were included in the 2008-09  
          Budget and are assumed in the May Revision.  The savings occur  
          as an offset to the state's education funding requirement under  
          Proposition 98.










                                                                  SB 80
                                                                  Page  2


           Analysis Prepared by  :   Daniel Rabovsky / BUDGET / (916)  
          319-2099.


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