BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 80
Author: Senate Budget and Fiscal Review Committee
Amended: 3/14/11
Vote: 27 - Urgency
PRIOR SENATE VOTES NOT RELEVANT
ASSEMBLY FLOOR: Not available
SUBJECT : Budget Act of 2011: General Government
provisions
SOURCE : Author
DIGEST : This bill implements the General Government
portion of the 2011 State Budget. This bill makes changes
to the law concerning the Accountancy Fund, Small Business
Loan Guarantee Program, Government Claims notification, the
Oil Spill Response Trust Fund, tribal gaming, Williamson
Act Open Space Subvention, budgetary loans, the CalPERS
Health Benefit Program, federal extended unemployment
benefits, and the Consolidated Work Program Fund. It also
adopts uncodified language to authorize the Director of the
Department of Finance to reduce appropriations in 2010-11
to reflect a reduction in building rental rates charged to
the Department of General Services.
Assembly Amendments delete the prior version of the bill
and insert the current provisions concerning general
government.
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ANALYSIS : This is the General Government Budget Trailer
Bill. It contains provisions necessary to implement the
2011-12 budget, including these key changes:
1. Accountancy Fund . Deletes the statutory provision that
requires the California Board of Accountancy to set
renewal fee levels so that the reserve balance in the
Board's contingent fund is equal to approximately nine
months of annual authorized expenditures. Outstanding
loans to the General Fund can be repaid as necessary for
Board operations, so a lesser reserve can be maintained
without a need to increase fees.
2. Small Business Loan Guarantee Program . Requires that
upon notification that the State has received an award
from the federal government to support the Small
Business Loan Guarantee Program, $20 million in General
Fund dollars that support that program be reverted to
the General Fund, and that the program prioritizes the
use of federal funds over State funds as allowable. A
federal grant totaling $84.4 million is anticipated
under the federal Small Business Jobs Act of 2010 (15
U.S.C. Sec. 631 et seq.). The $20 million General Fund
to be reverted was provided to the program by AB 1632,
which was a budget trailer bill to the 2010 Budget Act.
That legislation was enacted prior to notification from
the federal government that an $84.4 million grant that
is available for the same purpose. The program provides
loan guarantees to assist small business obtain loans
from private lenders.
3. Government Claims - Legislative Notification . Requires
that the Victims Compensation and Government Claims
Board notify the Legislature prior to approval of any
prior-year claim in excess of $500,000 that is requested
to be paid from a current-year appropriation.
4. Oil Spill Response Trust Fund . Adds a provision that
specifies a loan to the General Fund that reduces the
balance of the Oil Spill Response Trust Fund below a
statutory threshold, does not obligate the administrator
to resume collection of the oil spill response fee.
Outstanding loans to the General Fund can be repaid as
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necessary to repay the Oil Spill Response Trust Fund, so
a lesser reserve can be maintained without a need to
resume fees.
5. Special Distribution Fund - Reporting Extension .
Includes language providing an extension of the time
counties have to submit a statutorily mandated report in
order to ensure that those counties remain eligible to
receive funding authorized from the Indian Gaming
Special Distribution Funds (SDF) for 2010-11. The
extension would provide counties until the end of the
current fiscal year to submit their reports.
6. Williamson Act Open Space Subventions . Deletes the
statutory appropriation of $10 million from the General
Fund for Williamson Act open space subventions to
counties in 2010-11. Repeals the alternative Williamson
Act program which was added by AB 2530, and modified by
SB 863, both Statutes of 2010. Under the alternative
program, counties can enter into shorter contracts, nine
years instead of 10, or 19 years instead of 20, as
applicable. With the shorter contracts, the property
tax loss to the county is reduced.
7. Budgetary Loans - Conditions and Reporting . Adds
more-recent budgetary loans to the language in statute
that defines conditions and reporting for budgetary
loans made in 2001-02, 2002-03, and 2003-04. The loans
primarily involve special fund transfers to the General
Fund. Among the conditions are a requirement that the
loans be repaid if the originating fund is in need of
repayment, and the requirement that the loans be repaid
if no longer needed for the receiving fund. Broadens
the existing reporting language to include all
outstanding budgetary loans, and not just those from
2001-02, 2002-03, and 2003-04, and clarifies that the
August 1 and February1 reports on outstanding loans be
based on updated information.
8. CalPERS Health Benefit Program Savings . Beginning in
2012-13, requires the California Public Employees'
Retirement System (CalPERS) to negotiate with health
benefit plans to add a core health care plan option to
the existing portfolio of health plans and/or implement
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other measures to achieve ongoing savings in the Health
Benefit Program beginning in 2012-13. This statutory
change is necessary to implement Control Section 4.21 in
the 2011 Budget Act which requires CalPERS to achieve
savings totaling $80 million GF and $35.7 million other
funds in the 2011-12 Health Benefits Program and,
beginning in 2012-13, achieve an equivalent amount of
ongoing savings in the Health Benefits Program based on
the core health care option and/or other cost saving
measures.
9. Tribal Gaming Revenue Shift . Directs $101 million
annually in 2011-12 through 2015-16 to the General Fund
from a specified portion of tribal-gaming revenues.
Similar shifts have been approved in the annual budgets
since 2008-09. Existing law directs these tribal-gaming
revenues to transportation special funds as an
alternative repayment method for loans from
transportation special funds to the General Fund in
2001-02 and 2002-03. The existing statute associated
with this revenue includes provisions that the stream of
revenue could be securitized for early repayment of the
transportation-fund loans; however, litigation and other
factors delayed such securitization and it is no longer
being pursued.
10. Three-Year Look Back Trigger for Federal Extended
Unemployment Benefits . Adopts in state statute the
federal option of a three-year look-back related to
determination of state eligibility for FedEd extended
unemployment benefits (FedEd), a federally-funded
emergency benefits program for states experiencing high
unemployment such as California. In providing the
three-year look-back option to states, the federal
government acknowledged that while many states'
unemployment rates are no longer increasing, their
unemployment rates are also not decreasing markedly.
Prior to December 2010, the look-back compared current
unemployment rates to rates in the previous two years.
However, in December 2010, Congress adopted legislation
that, through the end of 2011, allows states to make
determinations of whether there is a FedEd "on" or "off"
indicator by comparing current unemployment rates to the
rates for the corresponding period in the three
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preceding years. This modification will enable many
states experiencing sustained levels of high
unemployment, including California, to remain on FedEd
longer thereby providing an additional cushion for
unemployment insurance (UI) claimants. Unless the
three-year look-back modification is authorized, it is
estimated that California will trigger "off" FedEd in
spring 2011. The impact of such an action on UI
claimants would be significant; the Employment
Development Department estimates that between 263,000
and 500,000 claimants would potentially be impacted with
a loss of their FedEd benefits. This figure does not
include the claimants currently collecting regular
California UI benefits who could be potentially eligible
to file a FedEd extension if California's trigger
remained "on" through the end of 2011. A rough estimate
of the benefit to unemployed Californians of adopting
the three-year look-back totals between $1.0 billion to
$2.6 billion. The range is large because UI claimants
could be anywhere within the benefit tiers and therefore
does not clearly equate to 20 additional weeks of
benefits.
11. Reestablishes Consolidated Work Program Fund in Statute .
The Consolidated Work Program Fund was inadvertently
eliminated in 2006 with the enactment of Chapter 630,
Statutes of 2006. The Consolidated Work Program Fund is
necessary to administer the federal Workforce Investment
Act funds the state annually receives.
12. 2010-11 Department of General Services' (DGS) Building
Rental Rate Reductions . Adopts uncodified language to
authorize the Director of the Department of Finance to
reduce appropriations in 2010-11 to reflect a reduction
in building rental rates (from $1.80/square foot to
$1.40/square foot) charged to departments by DGS. The
2011-12 building rental rate reduction (from
$1.40/square foot to $1.12/square foot) savings will be
captured via Control Section 3.91 contained in the 2011
Budget Act. The estimated savings in 2010-11 are $26.7
million (all funds); the estimated savings in 2011-12
are $31.7 million (all funds).
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
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Local: No
DLW:nl 3/15/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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