BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                AB 1021
                                                                Page  1


        ASSEMBLY THIRD READING
        AB 1021 (Gordon)
        As Amended  May 19, 2011
        Majority vote 

         ELECTIONS           5-2         APPROPRIATIONS      12-5        
         
         ----------------------------------------------------------------- 
        |Ayes:|Fong, Bonilla, Hall,      |Ayes:|Fuentes, Blumenfield,     |
        |     |Mendoza, Swanson          |     |Bradford, Charles         |
        |     |                          |     |Calderon, Campos, Davis,  |
        |     |                          |     |Gatto, Hall, Hill, Lara,  |
        |     |                          |     |Mitchell, Solorio         |
        |     |                          |     |                          |
        |-----+--------------------------+-----+--------------------------|
        |Nays:|Logue, Valadao            |Nays:|Harkey, Donnelly,         |
        |     |                          |     |Nielsen, Smyth, Wagner    |
         ----------------------------------------------------------------- 

         SUMMARY  :  Requires additional fiscal information be included in the 
        circulating title and summary prepared by the Attorney General (AG) 
        and the summary statements prepared by the Legislative Analyst for a 
        proposed initiative measure.  Specifically,  this bill  :  

        1)Requires - if determined by the Joint Legislative Budget Committee 
          (JLBC) and Department of Finance (DOF) in their joint analysis of 
          a proposed initiative that has been submitted for a circulating 
          title and summary, that the measure would:  a) establish a new or 
          expanded program;   b) cost more than $1 million per year, 
          excluding costs attributable to the issuance, sale, or repayment 
          of general obligation bonds; and, c) not provide new revenues or 
          eliminate all or part of existing programs sufficient to pay the 
          cost of the new or expanded program or service - that a paragraph, 
          as specified, be provided to the AG that may be included in the 
          title and summary.

        2)Requires - if determined by the Legislative Analyst (LA) that a 
          measure which has qualified for the ballot would:  a) establish a 
          new or expanded program; b) cost more than $1 million per year, 
          excluding costs attributable to the issuance, sale, or repayment 
          of general obligation bonds; and,   c) not provide new revenues or 
          eliminate all or part of existing programs sufficient to pay the 
          cost of the new or expanded program or service - that a paragraph 
          be added to the summary statements.








                                                                AB 1021
                                                                Page  2



        3)Provides that the paragraphs submitted by the JLBC and DOF and the 
          LA state that it has been determined "? this measure does not 
          include sufficient funds to pay the cost of the new program or 
          expanded program or service provided therein.  Therefore, should 
          the measure pass, its cost would have to be paid from one or more 
          of the following:  

             1)     Reductions to existing state programs.

             2)     Revenue increases.

             3)     State reserves, if available."

        1)Makes other conforming changes.

         FISCAL EFFECT  :  According to the Assembly Appropriations Committee, 
        negligible fiscal impact.  For every additional page required in the 
        state ballot pamphlet, the cost is $66,000.  However, the Secretary 
        of State's (SOS) office formats the Voter Information Guide in 
        16-page increments, thus there is often blank space available for 
        additional information.  Moreover, additional pages would likely not 
        be necessary solely to include the additional language specified in 
        this bill.

         EXISTING LAW  :

        1)Requires the AG to include in the circulating title and summary, 
          in boldface print, either the fiscal estimate of the amount of any 
          increase or decrease in revenues or costs to the state or local 
          government prepared by the DOF and the JLBC, or an opinion as to 
          whether or not a substantial net change in state or local finances 
          would result if the proposed initiative is adopted.

        2)Requires the LA to prepare an impartial analysis of each proposed 
          measure describing the measure and including a fiscal analysis of 
          the measure showing the amount of any increase or decrease in 
          revenue or cost to state or local government.  Provides that if a 
          proposed measure is estimated to result in increased cost to the 
          state, the estimate of those costs be set out in boldface print in 
          the ballot pamphlet. 

        3)Requires the ballot pamphlet to contain a section, prepared by the 
          LA, located near the front of the pamphlet, that provides a 








                                                                AB 1021
                                                                Page  3


          concise summary of the general meaning and effect of "yes" and 
          "no" votes on each state measure.

         COMMENTS  :  According to the author, "AB 1021 would require greater 
        transparency in the fiscal analysis of initiatives by adding 
        advisories to the fiscal impact statement for petitions and the 
        ballot pamphlet if the measure does not provide adequate funding or 
        corresponding reductions to fund implementation.  The democratic 
        process requires transparency and an honest evaluation of the cost 
        of government.  Accordingly, this bill aims to give voters a better 
        understanding of the fiscal impact of initiatives proposed for or 
        placed on a ballot."

        Since the implementation of the initiative process, there have been 
        a number of approved measures which have required a certain portion 
        of General Fund (GF) spending be dedicated to a specific purpose.  
        These measures restrict the Legislature's ability to alter the 
        relative shares of GF spending provided to program areas in any 
        given year.  For instance, Proposition 98 of 1988, provided for a 
        minimum level of total spending (GF and local property taxes 
        combined) on K-14 education in any given year.  Proposition 98 
        accounts for over 40% of annual state GF spending.  Proposition 49 
        of 2002, requires that the state spend a certain amount on 
        after-school programs, which exceeded $540 million in fiscal year 
        2009-10.

        Current law already requires that the fiscal impact of a proposed 
        measure be analyzed and included in both the circulating title and 
        summary and in the analysis printed in the state ballot pamphlet.  
        This bill requires additional information to be included and for 
        measures that would exceed $1 million in cost for the creation of a 
        new program, to specify that the fiscal impacts of the proposed 
        measure would have an impact on current programs, if passed.  Given 
        that fiscal impacts are already being discussed in the analysis of 
        proposed measures, it is unclear whether the additional information 
        required by this bill would be redundant.  However, given the 
        impacts that approved initiatives have had on the state's GF, it may 
        be beneficial to clarify to the electorate, prior to voting, that 
        the costs of proposed measures will have an impact on the 
        continuation of current programs.


         Analysis Prepared by  :    Maria Garcia / E. & R. / (916) 319-2094FN: 
        0000711








                                                                AB 1021
                                                                Page  4