BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1021| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1021 Author: Gordon (D) Amended: 8/31/11 in Senate Vote: 21 SENATE ELECTIONS & CONSTIT. AMEND. COMM. : 3-2, 06/21/11 AYES: Correa, De León, Lieu NOES: La Malfa, Gaines SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 55-24, 05/27/11 - See last page for vote SUBJECT : Ballot measures: fiscal analysis SOURCE : Author DIGEST : This bill 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. Senate Floor Amendments of 8/31/11 prevent a chaptering out problem with AB 732 (Buchanan). ANALYSIS : Existing law directs the Attorney General, in preparing a circulating title and summary for a proposed ballot initiative, to include an estimate of the amount of increase or decrease of revenues or costs to the state. CONTINUED AB 1021 Page 2 Existing law requires the Department of Finance (DOF) and the Joint Legislative Budget Committee (JLBC) to jointly make and deliver such an estimate to the AG so that he or she may include it in the circulating title and summary. Existing law directs the Legislative Analyst to prepare an unbiased fiscal analysis of a measure that is included in the ballot pamphlet stating whether the measure would result in increased or decreased costs to the state and an estimate of those costs or savings. This bill requires additional fiscal information be included in the circulating title and summary prepared by the AG and the summary statements prepared by the Legislative Analyst for a proposed initiative measure. Specifically, this bill requires the JLBC and the DOF to provide a paragraph to the AG, if it is determined in their joint analysis of an initiative measure submitted for a circulating title and summary that the measure does all of the following: 1.Establishes a new or expanded program; 2.Costs more than one million dollars in any year, excluding costs attributable to the issuance, sale, or repayment of general obligation bonds; and 3.Does 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. This bill provides that the paragraph submitted by the JLBC and DOF may be included in the title and summary prepared by the AG, and shall be stated as follows: The Joint Legislative Budget Committee and Department of Finance have determined that this measure does not include sufficient funds to pay the cost of the new or expanded program or service provided therein. Therefore, should the measure pass, its costs would have to be paid from one or more of the following: Reductions to existing state programs. Revenue increases. AB 1021 Page 3 State reserves, if available. This bill requires a paragraph be added to the summary statements prepared by the Legislative Analyst, contained in the ballot pamphlet, for a measure that has qualified for the ballot, if it is determined in the Legislative Analyst's analysis that the measure does all of the following: 1.Establishes a new or expanded program; 2.Costs more than one million dollars in any year, excluding costs attributable to the issuance, sale, or repayment of general obligation bonds; and 3.Does 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. This bill provides that the paragraph added to the summary statements by the Legislative Analyst read as follows: This bill does not include sufficient funds to pay the cost of the new or expanded program or service provided therein. Therefore, should the measure pass, its costs would have to be paid from one or more of the following: Reductions to existing state programs. Revenue increases. State reserves, if available. This bill requires the Legislative Analyst to utilize a uniform method in each analysis to describe the estimated increase or decrease in revenue or cost of a measure so that the average voter may draw comparisons among the fiscal impacts of measures. This bill requires the condensed statement of the fiscal impact summary for the measure prepared by the AG to appear on the ballot followed immediately by the uniform estimate of increase or decrease in revenue or cost of the measure. This bill makes other conforming changes. AB 1021 Page 4 Related Legislation AB 732 (Buchanan) requires the statewide ballot pamphlet to include a simple and easy to understand graph, chart, or report card, prepared by the Legislative Analyst, for each state bond measure submitted to the voters, to illustrate the cost of that measure to the state and local governments. It is presently on the Senate Third Reading file. SCA 4 (DeSaulnier) requires all state initiative measures that would result in a net increase in state or local government costs to identify a funding source before being submitted to the voters. SCA 4 is currently on the Senate Third Reading File. Prior Legislation SCA 14 (Ducheny), of 2009, was identical to SCA 4. SCA 14 died on the Senate Third Reading File. ACA 3 (Blakeslee), of 2009, would have required an initiative measure that would authorize the issuance of state general obligation bonds of $1 billion or more to identify a funding source. ACA 3 died on the Assembly Third Reading File. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/31/11) California School Boards Association California State Association of Counties OPPOSITION : (Verified 8/31/11) Department of Finance ARGUMENTS IN SUPPORT : 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 AB 1021 Page 5 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 percent 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. ARGUMENTS IN OPPOSITION : The Department of Finance is "opposed to this bill because it could result in additional General Fund costs. Further, this bill may not be necessary because the fiscal analysis for a proposed initiative measure is already included in both the circulating title and summary and in the analysis printed in the state ballot pamphlet." ASSEMBLY FLOOR : 55-24, 05/27/11 AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Galgiani, Gatto, Gordon, Hall, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, Mendoza, Mitchell, Monning, Nestande, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Skinner, Solorio, Swanson, Torres, Wieckowski, Williams, Yamada, John A. Pérez NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly, Beth Gaines, Garrick, Grove, Hagman, Halderman, Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell, AB 1021 Page 6 Nielsen, Norby, Silva, Smyth, Valadao, Wagner NO VOTE RECORDED: Gorell DLW:nl 8/31/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****