BILL NUMBER: SB 82 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 14, 2011
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 10, 2011
An act relating to the Budget Act of 2011.
An act to amend Sections 16325, 16325.5, 16326, and
70371.5 of, and to add Sections 16328 and 16329 to, the Government
Code, to repeal Section 2103.1 of the Streets and Highways Code, and
to amend Section 14167.35 of the Welfare and Institutions Code,
relating to state cash resources, and making an appropriation
therefor, and declaring the urgency thereof, to take effect
immediately, bill related to the budget.
LEGISLATIVE COUNSEL'S DIGEST
SB 82, as amended, Committee on Budget and Fiscal Review.
Budget Act of 2011. State cash resources.
(1) Existing law, until September 1, 2011, provides for a cash
management plan for the 2010-11 fiscal year to authorize the
Controller, Treasurer, and Director of Finance to defer General Fund
payments for up to 60 or 90 days, as specified, beginning July 2010,
for specific entities, including county offices of education, public
schools, and charter schools, subject to certain conditions.
This bill would modify these provisions and apply the cash
management plan to the 2011-12 fiscal year. This bill would also
establish specified procedures for deferrals, and repayment of those
deferrals, from county offices of education, public schools, and
charter schools. The bill would make conforming changes and make
these provisions inoperative on September 1, 2012.
(2) Existing law establishes the Immediate and Critical Needs
Account of the State Court Facilities Construction Fund and the
Hospital Quality Assurance Revenue Fund for the planning, financing,
and construction of court facilities and the support and enhancement
of hospital quality, respectively.
The bill would, notwithstanding existing law, authorize the
Controller to use funds in the Immediate and Critical Needs Account
and the Hospital Quality Assurance Revenue Fund for cash flow loans
to the General Fund, as provided in specified provisions of law.
(3) Existing law provides for the deferral of specified
apportionments on a pro rata basis from the Highway Users Tax Account
in the Transportation Tax Fund to cities, counties, and cities and
counties from July 2010 to March 2011, inclusive, and limits the
amount of those deferrals. Existing law permits cities, counties, and
cities and counties to borrow certain designated funds from their
accounts and requires that any borrowing be repaid with interest that
would be applied to a specified purpose.
The bill would repeal these provisions of law.
(4) The California Constitution authorizes the Governor to declare
a fiscal emergency and to call the Legislature into special session
for that purpose. Governor Schwarzenegger issued a proclamation
declaring a fiscal emergency, and calling a special session for this
purpose, on December 6, 2010. Governor Brown issued a proclamation on
January 20, 2011, declaring and reaffirming that a fiscal emergency
exists and stating that his proclamation supersedes the earlier
proclamation for purposes of that constitutional provision.
This bill would state that it addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation issued on
January 20, 2011, pursuant to the California Constitution.
(5) This bill would appropriate the sum of ($1,000) from the
General Fund for administrative costs associated with this act.
(6) This bill would declare that it is to take effect immediately
as an urgency statute and a bill providing for appropriations related
to the Budget Bill.
This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2011.
Vote: majority 2/3 . Appropriation:
no yes . Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 16325 of the
Government Code is amended to read:
16325. (a) An effective cash management plan is needed for the
2010-11 and 2011-12 fiscal year
years to address General Fund cash shortages that otherwise may
occur during the fiscal year. The goals of the cash management plan
described in this section are to accomplish the following:
(1) Increase the state's ability to address cash shortages in a
quick and responsible manner.
(2) Address rating agencies' and bond markets' concerns regarding
the state's ability to react effectively to cashflow pressures while
providing a higher level of certainty to bondholders.
(3) Preserve external borrowing capacity and affordability for the
state's infrastructure programs.
(4) Provide a higher level of predictability to affected programs
and entities where deferrals or delays are required.
(b) Nothing in this section or in Sections 16325.5 and 16326 shall
be construed to affect in any way the timing or amount of payments
of state payroll or to affect in any way any judicial proceeding
related to the timing or amount of state employee compensation.
Nothing in this section, Section 16325.5, or Section 16326 shall be
construed to authorize the delay of debt service payments, rental
payments that support lease-revenue bonds, reimbursements to local
governments for certain reductions in ad valorem property taxes, as
required by Section 25.5 of Article XIII of the California
Constitution, or required payments for borrowings secured by these
repayment obligations, payments required under a Funds Transfer
Cooperative Agreement that are pledged to pay debt service on state
payment acceleration notes that were issued to finance toll bridge
seismic retrofit and replacement projects, payments appropriated in
any year to pay a court judgment pursuant to the settlement agreement
in Paterno v. State (2003) 113 Cal.App.4th 998, or payments to small
vendors as defined in the California Prompt Payment Act (Chapter 4.5
(commencing with Section 927) of Part 3 of Division 3.6 of Title 1).
Nothing in this section, Section 16325.5, or Section 16326 shall be
construed to affect the applicability of interest, late payment
penalty, and similar payment requirements under the California Prompt
Payment Act or Section 926.19 when payments to
persons or entities specified in those laws are delayed.
(c) Deferrals authorized in the cash management plan described in
this section and in Sections 16325.5 and 16326 are in addition to any
payment delays, payment deferrals, or payment schedules specified in
other laws. Deferrals authorized in the cash management plan
described in this section and in Sections 16325.5 and 16326 do not
replace, remove, or alter any previously implemented payment delays
or payment deferrals.
(d) Activities by the Controller, Treasurer, and Director of
Finance to implement and carry out the cash management plan described
in this section and Sections 16325.5 and 16326 are hereby exempted
from the provisions of the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3).
(e) This section shall become inoperative on September 1,
2011 2012 , and, as of January 1, 2012
2013 , is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2012
2013 , deletes or extends the dates on which it
becomes inoperative and is repealed.
SEC. 2. Section 16325.5 of the
Government Code is amended to read:
16325.5. (a) Notwithstanding any other law, and to the extent not
prohibited by federal law or the California Constitution, in order
to effectively manage state cash resources, the 2010-11 and
2011-12 General Fund payments projected to be made for the
programs or departments listed in subdivision (b) shall be deferred
, effective beginning in the months of July
2010 , October 2010 , and March
2011 , in full whole or
in part for no more than 60, 90, and 60 days, respectively,
unless otherwise specified in Section 16326 , and Section
2103.1 of the Streets and Highways Code , except for
the 2011-12 General Fund payments referenced in paragraph (1) of
subdivision (b), which shall be deferred as des cribed in
paragraph (2) of subdivision (a) of Section 16326 . Nothing in
this section shall be construed to authorize the deferral of state
payroll, debt service, or rental payments that support lease-revenue
bonds.
(b) The departments and programs subject to subdivision (a) are as
follows:
(1) Kindergarten to grade 12, inclusive , apportionments
.
(2) Supplementary Security Income/State Supplementary Payments
made by the State Department of Social Services to the federal
government .
(3) Local government social services and transportation
payments.
(4) Trial court operations (nonpayroll).
(c) Prior to implementing each of the payment deferrals identified
in subdivision (b) and other provisions of the act adding this
section, the Controller, Treasurer, and Director of Finance shall
jointly review and compare the actual General Fund receipts and
disbursements with the receipts and disbursements contained in the
most current published cashflow projections. If the Controller,
Treasurer, and Director of Finance determine sufficient cash is
available to make all scheduled payments , in
whole or in part, through the 60- or 90-day period or other
period specified in law, including the payments otherwise subject to
deferral identified in subdivision (b), and maintain a prudent cash
reserve, the Controller shall make the deferred payment , in
whole or in part, as originally scheduled or within the time
provided for by law. In making the determination that cash is
sufficient to make the payments, the Controller, Treasurer, and
Director of Finance shall also consider costs for state government,
the scope of any identified cash shortage, timing, achievability,
legislative direction, and the impact and hardship imposed on
potentially affected programs, entities, and related public services.
The Department of Finance shall notify the Joint Legislative Budget
Committee of this action within 10 days of making this determination.
(d) In the event payments are deferred pursuant to subdivision (a)
or other provisions of the act adding this section, beginning July 1
, 2010 of the appropriate fiscal year
, the Controller, Treasurer, and Director of Finance shall review on
a monthly basis, or as necessary, the actual General Fund cash
receipts and disbursements in comparison to the receipt and
disbursement projections associated with the Governor's most current
cashflow statements. If the Controller, Treasurer, and Director of
Finance determine sufficient cash is available to make payments
otherwise deferred for the 60- or 90-day period or other period
specified in law, including the payments otherwise subject to
deferral identified in subdivision (b) or other provisions of the act
adding this section, and maintain a prudent cash reserve, the
Controller shall make the deferred payments, in whole or in part, as
soon as feasible unless otherwise provided in Section 16326
, or Section 2103.1 of the Streets and Highways Code . In
making the determination that cash is sufficient to make the
payments, in whole or in part, the Controller, Treasurer, and
Director of Finance shall also consider costs for state government,
the scope of any identified cash shortage, timing, achievability,
legislative direction, and the impact and hardship imposed on
potentially affected programs, entities, and related public services.
The Department of Finance shall notify the Joint Legislative Budget
Committee within 10 days of this determination and identify the date
upon which the payments were made or will be made .
(e) Upon concurrence of the Controller, Treasurer, and Director of
Finance, deferrals authorized pursuant to subdivision (a) or other
provisions of the act adding this section may be moved forward to the
prior month or delayed to the subsequent month. This
subdivision shall not apply to those payments to kindergarten to
grade 12 specified in paragraph (1) of subdivision (b) for the
2011-12 fiscal year. Any changes may be authorized no sooner
than 30 days after notification in writing by the Department of
Finance to the Joint Legislative Budget Committee, or not sooner than
whatever lesser time the Chairperson of the Joint Legislative Budget
Committee, or his or her designee, may determine. In the event
cash is available to make the payments earlier than identified in the
notification, as determined by the Controller, Treasurer, and
Director of Finance, the Department of Finance shall notify the Joint
Legislative Budget Committee within 10 days of making this
determinat ion.
(f) This section shall become inoperative on September 1,
2011 2012 , and, as of January 1, 2012
2013 , is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2012
2013 , deletes or extends the dates on which it
becomes inoperative and is repealed.
SEC. 3. Section 16326 of the Government
Code is amended to read:
16326. (a) Notwithstanding any other law, except as otherwise
specified in Sections 16325 and 16325.5, cash deferrals specified in
Sections 16325 and 16325.5, and Section 2103.1 of the
Streets and Highways Code, as amended by the act amending
this section in the 2009-10 Regular Session ,
shall be limited, as follows:
(1) Payments For the 2010-11 fiscal year,
payments to school districts, county offices of education, and
charter schools shall be deferred as specified in Section 16325.5
with the total amount of the deferrals under this action limited to
two billion five hundred million dollars ($2,500,000,000) for each
deferral, and a maximum of three deferrals during the fiscal year.
The total outstanding amount of these deferrals, as described in
Section 16325.5, shall not exceed two billion five hundred million
dollars ($2,500,000,000) at any given time. The Controller,
Treasurer, and the Director of Finance shall determine and jointly
provide a written declaration to the Legislature and to the State
Department of Education, and the State Department of Education shall
inform school districts, county offices of education, and charter
schools of the amounts and timing of payment deferrals for the
2010-11 fiscal year. This declaration shall be provided no later than
March 31, 2010. It is the intent of the Legislature that the advance
principal apportionment payment due in July be deferred first as a
part of the July 2010 deferral as specified in Section 16325.5.
(A) Subject to the approval of the Director of Finance, in order
for a county office of education to receive scheduled apportionments
from the Controller if payments are deferred, as specified in Section
16325.5, the Superintendent of Public Instruction shall certify that
the deferral of warrants will result in the county office of
education being unable to meet its expenditure obligations for the
time period during which warrants are deferred, and shall notify the
Director of Finance of this fact on or before June 1, 2010. Subject
to the approval of the Director of Finance, a county office of
education that did not receive apportionments for July 2010 and
October 2010, as specified in Section 16325.5, may seek a hardship
waiver to receive scheduled apportionments from the Controller if
payments are deferred in March 2011. To apply for a hardship waiver,
the Superintendent of Public Instruction shall certify that the
deferral of March 2011 warrants will result in the county office of
education being unable to meet its expenditure obligations for the
time period during which warrants are deferred, and shall notify the
Director of Finance of this fact on or before January 5, 2011. The
criteria, as applicable, set forth in statute and regulations to
qualify a school district for an emergency apportionment shall be
used to make the certifications specified in this subparagraph.
(B) Subject to the approval of the Director of Finance, in order
for a charter school to receive scheduled apportionments from the
Controller if payments are deferred, as specified in Section 16325.5,
the chartering authority, in consultation with the county
superintendent of schools, shall certify that the deferral of
warrants will result in the charter school being unable to meet its
expenditure obligations for the time period during which warrants are
deferred, and shall notify the Superintendent of Public Instruction
and the Director of Finance of this fact on or before June 1, 2010.
Subject to the approval of the Director of Finance, a charter school
that did not receive apportionments for July 2010 and October 2010,
as specified in Section 16325.5, may seek a hardship waiver to
receive scheduled apportionments from the Controller if payments are
deferred in March 2011. To apply for a hardship waiver, the
chartering authority, in consultation with the county superintendent
of schools, shall certify that the deferral of March 2011 warrants
will result in the charter school being unable to meet its
expenditure obligations for the time period during which warrants are
deferred, and shall notify the Superintendent of Public Instruction
and the Director of Finance on or before January 5, 2011. The
criteria, as applicable, set forth in statute and regulations to
qualify a school district for an emergency apportionment shall be
used to make the certifications specified in this subparagraph.
(C) Subject to the approval of the Director of Finance, in order
for a school district to receive scheduled apportionments from the
Controller if payments are deferred, as specified in Section 16325.5,
the county superintendent of schools shall certify to the
Superintendent of Public Instruction and to the Director of Finance
on or before June 1, 2010, that the deferral of warrants will result
in the school district being unable to meet its expenditure
obligations for the time period during which warrants are deferred.
Subject to the approval of the Director of Finance, a school district
that did not receive apportionments for July 2010 and October 2010,
as specified in Section 16325.5, may seek a hardship waiver to
receive scheduled apportionments from the Controller if payments are
deferred in March 2011. To apply for a hardship waiver, the county
superintendent of schools shall certify to the Superintendent of
Public Instruction and to the Director of Finance on or before
January 5, 2011, that the deferral of March 2011 warrants will result
in the school district being unable to meet its expenditure
obligations for the time period during which warrants are deferred.
The criteria, as applicable, set forth in statute and regulations to
qualify a school district for an emergency apportionment shall be
used to make the certifications specified in this subparagraph.
(D) Notwithstanding Section 16325.5, payment of the March 2011
deferral to county offices of education, school districts, and
charter schools shall be made no later than April 29, 2011.
(E) A county office of education may apply for a waiver for early
payment of the deferrals specified in Section 14041.65 of the
Education Code. To receive a waiver, the Superintendent of Public
Instruction shall certify to the Director of Finance before June 1,
2011, that the county office of education would be unable to meet its
expenditure obligations in July or August 2011. Subject to the
approval and determination of the Department of Finance, a county
office of education may receive a payment of 2010-11 funds in July
2011 up to the amount needed to cover its demonstrated expenditure
obligations. The criteria, as applicable, set forth in statute and
regulation to qualify a school district for an emergency
apportionment shall be used to make the certifications specified in
this subparagraph. Required payments of temporary revenue
anticipation notes or other short-term debt issued for cash flow
purposes in 2010-11 shall be considered expenditure obligations.
(F) A charter school may apply for a waiver for early payment of
the deferrals specified in Section 14041.65 of the Education Code. To
receive a waiver, the chartering authority, in consultation with the
county superintendent of schools, shall certify to the
Superintendent of Public Instruction and the Director of Finance
before June 1, 2011, that the charter school would be unable to meet
its expenditure obligations in July or August 2011. Subject to the
approval and determination of the Department of Finance, a charter
school may receive a payment of 2010-11 funds in July 2011 up to the
amount needed to cover its demonstrated expenditure obligations. The
criteria, as applicable, set forth in statute and regulation to
qualify a school district for an emergency apportionment shall be
used to make the certifications specified in this subparagraph.
Required payments of temporary revenue anticipation notes or other
short-term debt issued for cash flow purposes in 2010-11 shall be
considered expenditure obligations.
(G) A school district may apply for a waiver for early payment of
the deferrals specified in Section 14041.65 of the Education Code. To
receive a waiver, the county superintendent of schools shall certify
to the Superintendent of Public Instruction and the Director of
Finance before June 1, 2011, that the school district would be unable
to meet its expenditure obligations in July or August 2011. Subject
to the approval and determination of the Department of Finance, a
school district may receive a payment of 2010-11 funds in July 2011
up to the amount needed to cover its demonstrated expenditure
obligations. The criteria, as applicable, set forth in statute and
regulation to qualify a school district for an emergency
apportionment shall be used to make the certifications specified in
this subparagraph. Required payments of temporary revenue
anticipation notes or other short-term debt issued for cash flow
purposes in 2010-11 shall be considered expenditure obligations.
(2) For the 2011-12 fiscal year, deferrals described in paragraph
(1) of subdivision (b) of Section 16325.5, and repayment of those
deferrals, shall be scheduled as follows: One billion four hundred
million dollars ($1,400,000,000) shall be deferred in both July and
August of 2011. Two billion four hundred million dollars
($2,400,000,000) shall be deferred in October 2011. Seven hundred
million ($700,000,000) of the July 2011 deferral shall be paid in
September 2011, and four billion five hundred million dollars
($4,500,000,000) shall be paid in January 2012 for the remaining
July, August, and October 2011 deferrals. One billion four hundred
million dollars ($1,400,000,000) shall be deferred in March 2012 and
paid entirely in April 2012. The State Department of Education shall
inform school districts, county offices of education, and charter
schools of the amounts and timing of payment deferrals for the
2011-12 fiscal year. This declaration shall be provided no later than
April 15, 2011. It is the intent of the Legislature that the advance
principal apportionment payment due in July be deferred as a part of
the July 2011 deferral and that the advance principal apportionment
payment due in August be deferred as a part of the August 2011
deferral.
(A) Subject to the approval of the Director of Finance, in order
for a county office of education to receive scheduled payments from
the Controller if payments are deferred, the Superintendent of Public
Instruction shall certify that the deferral of warrants will result
in the county office of education being unable to meet its
expenditure obligations for the time period during which warrants are
deferred, and shall notify the Director of Finance of this fact on
or before June 1, 2011. Subject to the approval of the Director of
Finance, a county office of education that did not receive payments
for July 2011, August 2011, and October 2011 may seek a hardship
waiver to receive scheduled payments from the Controller if payments
are deferred in March 2012. To apply for a hardship waiver, the
Superintendent of Public Instruction shall certify that the deferral
of March 2012 warrants will result in the county office of education
being unable to meet its expenditure obligations for the time period
during which warrants are deferred, and shall notify the Director of
Finance of this fact on or before January 5, 2012. The criteria, as
applicable, set forth in statute and regulations to qualify a school
district for an emergency apportionment shall be used to make the
certifications specified in this subparagraph.
(B) Subject to the approval of the Director of Finance, in order
for a charter school to receive scheduled payments from the
Controller if payments are deferred, the chartering authority, in
consultation with the county superintendent of schools, shall certify
that the deferral of warrants will result in the charter school
being unable to meet its expenditure obligations for the time period
during which warrants are deferred, and shall notify the
Superintendent of Public Instruction and the Director of Finance of
this fact on or before June 1, 2011. Subject to the approval of the
Director of Finance, a charter school that did not receive payments
for July 2011, August 2011, and October 2011 may seek a hardship
waiver to receive scheduled payments from the Controller if payments
are deferred in March 2012. To apply for a hardship waiver, the
chartering authority, in consultation with the county superintendent
of schools, shall certify that the deferral of March 2012 warrants
will result in the charter school being unable to meet its
expenditure obligations for the time period during which warrants are
deferred, and shall notify the Superintendent of Public Instruction
and the Director of Finance on or before January 5, 2012. The
criteria, as applicable, set forth in statute and regulations to
qualify a school district for an emergency apportionment shall be
used to make the certifications specified in this subparagraph.
(C) Subject to the approval of the Director of Finance, in order
for a school district to receive scheduled payments from the
Controller if payments are deferred, the county superintendent of
schools shall certify to the Superintendent of Public Instruction and
the Director of Finance on or before June 1, 2011, that the deferral
of warrants will result in the school district being unable to meet
its expenditure obligations for the time period during which warrants
are deferred. Subject to the approval of the Director of Finance, a
school district that did not receive payments for July 2011, August
2011, and October 2011 may seek a hardship waiver to receive
scheduled payments from the Controller if payments are deferred in
March 2012. To apply for a hardship waiver, the county superintendent
of schools shall certify to the Superintendent of Public Instruction
and to the Director of Finance on or before January 5, 2012, that
the deferral of March 2012 warrants will result in the school
district being unable to meet its expenditure obligations for the
time period during which warrants are deferred. The criteria, as
applicable, set forth in statute and regulations to qualify a school
district for an emergency apportionment shall be used to make the
certifications specified in this subparagraph.
(D) Notwithstanding Section 16325.5, payments of the March 2012
deferral to the county offices of education, school districts, and
charter schools, shall be made no later than April 29, 2012.
(2)
(3) Of the amount appropriated from the General Fund to
the University of California for the 2010-11 and 2011-12
fiscal year years , payments made by
the state to the University of California shall not exceed
one-twelfth of the annual appropriation for each month from July
2010 through April 2011 . Any
remaining appropriation balance may be paid to the University of
California thereafter with no limitations.
(3)
(4) Notwithstanding Sections 84320, 84321, and 84321.5
of the Education Code and any other law that governs the regulations
adopted by the Chancellor of the California Community Colleges to
disburse funds, two hundred million dollars ($200,000,000) and one
hundred million dollars ($100,000,000) from the payment of
apportionments to districts pursuant to Sections 84320, 84321, and
84321.5 of the Education Code for July 2010 and
March 2011 , respectively, shall be deferred to
October 2010 and May 2011 ,
respectively. Notwithstanding this paragraph and subject to the
approval of the Director of Finance, the Controller shall issue
warrants pursuant to Sections 84320, 84321, and 84321.5 of the
Education Code that include the full amount of the apportionment
payments for the months of July 2010 or March
2011 , or both, for a community college for which
the Chancellor of the California Community Colleges determines, in
consultation with the Director of Finance, on or before June 1
, 2010 of the preceding fiscal year ,
that the deferral of warrants pursuant to this paragraph will present
an imminent threat to
the fiscal integrity and security of the community college.
(4)
(5) Of the amount appropriated from the General Fund to
the California State University for the 2010-11 and 2011-12
fiscal year years , payments made
by the state to the California State University shall not exceed
one-twelfth of the annual appropriation for each month from July
2010 through April 2011 . Any
remaining appropriation balance may be paid to the California State
University thereafter with no limitations.
(5)
(6) The 2010-11 and the 2011-12 cash
management plan plans described in
Sections 16325 and 16325.5 may include deferrals in state payments
for specific programs that are disbursed to cities, counties, and
other public entities not addressed elsewhere in this section.
Deferral of payments by the state to cities, counties, and other
public entities not addressed elsewhere in this section shall be as
follows:
(A) Payments shall be deferred as specified in Section 16325.5 per
the specific program.
(B) Payments shall be limited to one billion dollars
($1,000,000,000) for all programs that affect cities, counties, and
other public entities not addressed elsewhere in this section at any
given point in time.
(C) A maximum of three deferrals per specific program may be made
during the fiscal year.
(D) The state shall not defer any payments to a county with a
population less than 50,000, or a city within a county with a
population less than 50,000.
(E) Payments to local governments may be deferred for social
services programs , transportation programs, and
Mental Health Services Act (Proposition 63 of 2004) programs.
(6)
(7) In addition to implementing the payment schedule
described in paragraph (4) (5) , the
Director of Finance may at any time during the 2010-11 and the
2011-12 fiscal year years defer
payment of General Fund moneys, in a cumulative amount not to exceed
two hundred fifty million dollars ($250,000,000) annually
, appropriated to the California State University. Payment of the
amount deferred shall be made in the final week of April 2011
.
(b) Limits on payment deferrals specified in subparagraphs (A) and
(C) of paragraph (5) (6) of
subdivision (a) shall not apply to payments authorized in
paragraph (3) of subdivision (a) of Section 2103.1 of the Streets and
Highways Code to cities and counties. Limits on payment deferrals
specified in subparagraphs (A) and (C) of paragraph (5) of
subdivision (a) shall not apply to payments to the Mental
Health Services Act (Proposition 63) programs.
(c) Upon the Controller's receipt of a letter from the executive
officer of the Administrative Office of the Courts, or any other
executive officer representing cities or counties, the state may
defer payments to the entity or entities that the executive officer
represents as specified in the letter even if the specified amounts
exceed the deferrals authorized in this section or elsewhere in law.
(d) This section shall become inoperative on September 1,
2011 2012 , and, as of January 1, 2012
2013 , is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2012
2013 , deletes or extends the dates on which it
becomes inoperative and is repealed.
SEC. 4. Section 16328 is added to the
Government Code , to read:
16328. Subdivision (g) of Section 36 of Article XIII of the
California Constitution created the Education Protection Account in
the State Treasury. Notwithstanding any law, the Controller may use
the funds in the Education Protection Accounts for cash flow loans to
the General Fund as provided in Sections 16310 and 16381.
SEC. 5. Section 16329 is added to the
Government Code , to read:
16329. Subdivision (d) of Section 36 of Article XIII of the
California Constitution created the Local Revenue Fund 2011 in the
State Treasury. Notwithstanding any law, the Controller may use the
funds in the Local Revenue Fund 2011 for cash flow loans to the
General Fund as provided in Sections 16310 and 16381.
SEC. 6. Section 70371.5 of the
Government Code is amended to read:
70371.5. (a) There is hereby established the Immediate and
Critical Needs Account of the State Court Facilities Construction
Fund, the proceeds of which shall only be used for any of the
following:
(1) The planning, design, construction, rehabilitation,
renovation, replacement, or acquisition of court facilities.
(2) Repayment for moneys appropriated for lease of court
facilities pursuant to the issuance of lease-revenue bonds.
(3) Payment for lease or rental of court facilities or payment of
service contracts, including those made for facilities in which one
or more private sector participants undertake some of the risks
associated with the financing, design, construction, or operation of
the facility.
(b) Any funds expended from the Immediate and Critical Needs
Account are not subject to Section 77202.
(c) Notwithstanding Section 13340, until July 1, 2012, the
Immediate and Critical Needs Account is hereby continuously
appropriated, without regard to fiscal year, only for the purposes of
acquiring real property and completing preliminary plans.
(d) It is the intent of the Legislature that the money in the
Immediate and Critical Needs Account shall be used in part to pay the
debt service of lease revenue bonds, notes, bond anticipation notes,
or other appropriate financial instruments used to pay for the costs
referred to in subdivision (a) in the amount of up to five billion
dollars ($5,000,000,000). The total bonded indebtedness shall not
exceed that amount for which fine and fee revenues may fully satisfy
the debt service.
(e) The Judicial Council shall collect and make available upon
request information regarding the moneys deposited in the Immediate
and Critical Needs Account resulting from new and increased fees,
assessments, and penalties authorized by the act that added this
section.
(f) (1) The Judicial Council shall make recommendations to the
State Public Works Board before it undertakes projects based on its
determination that the need for a project is most immediate and
critical using the then most recent version of the Prioritization
Methodology for Trial Court Capital-Outlay Projects originally
adopted on August 26, 2006, subject to the availability of funds in
the Immediate and Critical Needs Account. Any such recommendation
shall be accompanied by a certification that there are sufficient
funds in the Immediate and Critical Needs Account. The State Public
Works Board shall establish the scope and cost for each individual
project.
(2) The Legislature finds that there may not be enough resources
to pay for the cost of the projects identified as immediate and
critical needs by the Judicial Council pursuant to its Prioritization
Methodology for Trial Court Capital-Outlay Projects originally
adopted on August 26, 2006, even after considering any bonded
indebtedness that may be issued relying at least in part on those
resources. Therefore, in choosing which projects shall be recommended
to the State Public Works Board to be funded from the Immediate and
Critical Needs Account, the Judicial Council shall consider and
apply, as appropriate, the following factors, among others:
(A) Any economic opportunity that exists for a project.
(B) The effect on available resources of using alternative methods
of project delivery as provided by Section 70391.5.
(3) Nothing in paragraph (2) shall authorize the Judicial Council
to exceed the resources provided by the Immediate and Critical Needs
Account, together with other available resources, in undertaking
projects identified as immediate and critical needs.
(4) As used in paragraph (2), "economic opportunity" includes, but
is not limited to, free or reduced costs of land for new
construction, viable financing partnerships with, or fund
contributions by, other government entities or private parties that
result in lower project delivery costs, cost savings resulting from
adaptive reuse of existing facilities, operational efficiencies from
consolidation of court calendars and operations, operational savings
from sharing of facilities by more than one court, and building
operational cost savings from consolidation of facilities.
(5) The Judicial Council shall not consider and apply an economic
opportunity unless it is reasonably assured that the economic
opportunity is viable and will be realized. If a project is selected
for funding based on an economic opportunity that is withdrawn after
the project is approved, the Judicial Council may cancel the project.
(g) Notwithstanding any law, the Controller may use the funds in
the Immediate and Critical Needs Account of the State Court
Facilities Construction Fund for cashflow loans to the General Fund
as provided in Sections 16310 and 16381.
SEC. 7. Section 2103.1 of the Streets
and Highways Code is repealed.
2103.1. (a) Notwithstanding any other law, the apportionment of
revenues deposited to the credit of the Highway Users Tax Account in
the Transportation Tax Fund that are otherwise required to be made,
pursuant to this chapter, to cities, counties, and cities and
counties for the following months shall be deferred and shall be made
as follows:
(1) For the months of July and August of 2009, the apportionments
shall be paid with the payment of August revenues in September 2009.
This deferral shall not apply to a county with a population of less
than 40,000.
(2) For the months of November and December of 2009, and January,
February, and March of 2010, the apportionments shall be paid on or
within two business days of April 28, 2010. This deferral shall not
apply to a county with a population of less than 40,000.
(3) (A) For the months of July, August, September, October,
November, and December 2010, and January, February, and March 2011,
no more than fifty million dollars ($50,000,000) for each month shall
be deferred on a pro rata basis, as determined by the Controller,
from all allocations to cities, counties, and cities and counties
from the Highway Users Tax Account. The balance of unpaid
apportionments for these months shall be paid on or within two
business days of April 28, 2011. The state shall not defer any
payments to a county with a population less than 50,000, or a city
within a county with a population less than 50,000.
(B) A city may request an exemption from all or a portion of the
deferral in subparagraph (A) if the deferral will create a hardship
in making required bond debt payments. The request must be received
not less than 30 days prior to the date of the monthly payment that
is the subject of the city's request and that otherwise is subject to
deferral. The Director of Finance shall determine if the exemption
is necessary, and the exemption shall be approved or denied at his or
her sole discretion.
(C) A city requesting an exemption pursuant to subparagraph (B)
shall provide all of the following documentation:
(i) Month-by-month expected payments from the Highway Users Tax
Account.
(ii) The timing and amount of the required bond payments.
(iii) Evidence that the deferral of payments from the Highway
Users Tax Account will result in the inability of the city to meet
bond payments specified in clause (ii).
(b) For the purpose of meeting the cash obligations associated
with ongoing budgeted costs, a city, county, or city and county may
borrow from its account that is designated for the receipt of state
funds allocated for local streets and roads or the county road fund,
including that resulting from the receipt of funds pursuant to the
Highway Safety, Traffic Reduction, Air Quality, and Port Security
Bond Act of 2006 (Chapter 12.49 (commencing with Section 8879.20) of
Division 1 of Title 2 of the Government Code) and apply the proceeds
of the borrowing to local street and road maintenance and operations,
during the period of the deferrals of apportionment payments
pursuant to subdivision (a). Any borrowing from funds that is
disbursed by the Controller's office on or after March 1, 2010, shall
be repaid with interest, computed at the current average rate of
interest earned by the local agency with respect to amounts on
deposit in the account from which the borrowing occurs, as determined
by the local agency, within the fiscal year in which the borrowing
initially occurs. Interest that is repaid on amounts borrowed
pursuant to this subdivision shall be applied by the local agency for
the purposes set forth in the Highway Safety, Traffic Reduction, Air
Quality, and Port Security Bond Act of 2006. The use of this cash
shall not be considered as an expenditure of bond act funds if the
cash is replaced when the payments in subdivision (a) are made.
(c) Notwithstanding any other provision of law, for the purpose of
meeting the cash obligations associated with ongoing street and road
costs, a city, county, or city and county may make use of any cash
balance available to a special fund of the city, county, or city and
county during the period of deferral of apportionment payments
pursuant to subdivision (a).
(d) This section shall not affect any requirement that an
expenditure is required to be accrued and reflected from the
appropriate funding source for which the money was received and that
an expenditure is required to meet all the requirements of its
funding source.
SEC. 8. Section 14167.35 of the Welfare
and Institutions Code is amended to read:
14167.35. (a) The Hospital Quality Assurance Revenue Fund is
hereby created in the State Treasury.
(b) (1) All fees required to be paid to the state pursuant to this
article shall be paid in the form of remittances payable to the
department.
(2) The department shall directly transmit the fee payments to the
Treasurer to be deposited in the Hospital Quality Assurance Revenue
Fund. Notwithstanding Section 16305.7 of the Government Code, any
interest and dividends earned on deposits in the fund shall be
retained in the fund for purposes specified in subdivision (c).
(c) All funds in the Hospital Quality Assurance Revenue Fund,
together with any interest and dividends earned on money in the fund,
shall, upon appropriation by the Legislature, be used exclusively to
enhance federal financial participation for hospital services under
the Medi-Cal program, to provide additional reimbursement to, and to
support quality improvement efforts of, hospitals, and to minimize
uncompensated care provided by hospitals to uninsured patients, in
the following order of priority:
(1) To pay for the department's staffing and administrative costs
directly attributable to implementing Article 5.21 (commencing with
Section 14167.1) and this article, including any administrative fees
that the director determines shall be paid to mental health plans
pursuant to subdivision (d) of Section 14167.11 and repayment of the
loan made to the department from the Private Hospital Supplemental
Fund pursuant to the act that added this section.
(2) To pay for the health care coverage for children in the amount
of eighty million dollars ($80,000,000) for each subject fiscal
quarter for which payments are made under Article 5.21 (commencing
with Section 14167.1).
(3) To make increased capitation payments to managed health care
plans pursuant to Article 5.21 (commencing with Section 14167.1).
(4) To pay funds from the Hospital Quality Assurance Revenue Fund
pursuant to Section 14167.5 that would have been used for grant
payments and that are retained by the state, and to make increased
payments to hospitals, including grants, pursuant to Article 5.21
(commencing with Section 14167.1), both of which shall be of equal
priority.
(5) To make increased payments to mental health plans pursuant to
Article 5.21 (commencing with Section 14167.1).
(d) Any amounts of the quality assurance fee collected in excess
of the funds required to implement subdivision (c), including any
funds recovered under subdivision (d) of Section 14167.14 or
subdivision (e) of Section 14167.36, shall be refunded to general
acute care hospitals, pro rata with the amount of quality assurance
fee paid by the hospital, subject to the limitations of federal law.
If federal rules prohibit the refund described in this subdivision,
the excess funds shall be deposited in the Distressed Hospital Fund
to be used for the purposes described in Section 14166.23, and shall
be supplemental to and not supplant existing funds.
(e) Any methodology or other provision specified in Article 5.21
(commencing with Section 14167.1) and this article may be modified by
the department, in consultation with the hospital community, to the
extent necessary to meet the requirements of federal law or
regulations to obtain federal approval or to enhance the probability
that federal approval can be obtained, provided the modifications do
not violate the spirit and intent of Article 5.21 (commencing with
Section 14167.1) or this article and are not inconsistent with the
conditions of implementation set forth in Section 14167.36.
(f) The department, in consultation with the hospital community,
shall make adjustments, as necessary, to the amounts calculated
pursuant to Section 14167.32 in order to ensure compliance with the
federal requirements set forth in Section 433.68 of Title 42 of the
Code of Federal Regulations or elsewhere in federal law.
(g) The department shall request approval from the federal Centers
for Medicare and Medicaid Services for the implementation of this
article. In making this request, the department shall seek specific
approval from the federal Centers for Medicare and Medicaid Services
to exempt providers identified in this article as exempt from the
fees specified, including the submission, as may be necessary, of a
request for waiver of the broad based requirement, waiver of the
uniform fee requirement, or both, pursuant to paragraphs (1) and (2)
of subdivision (e) of Section 433.68 of Title 42 of the Code of
Federal Regulations.
(h) (1) For purposes of this section, a modification pursuant to
this section shall be implemented only if the modification, change,
or adjustment does not do either of the following:
(A) Reduces or increases the supplemental payments or grants made
under Article 5.21 (commencing with Section 14167.1) in the aggregate
for the 2008-09, 2009-10, and 2010-11 federal fiscal years to a
hospital by more than 2 percent of the amount that would be
determined under this article without any change or adjustment.
(B) Reduces or increases the amount of the fee payable by a
hospital in total under this article for the 2008-09, 2009-10, and
2010-11 federal fiscal years by more than 2 percent of the amount
that would be determined under this article without any change or
adjustment.
(2) The department shall provide the Joint Legislative Budget
Committee and the fiscal and appropriate policy committees of the
Legislature a status update of the implementation of Article 5.21
(commencing with Section 14167.1) and this article on January 1,
2010, and quarterly thereafter. Information on any adjustments or
modifications to the provisions of this article or Article 5.21
(commencing with Section 14167.1) that may be required for federal
approval shall be provided coincident with the consultation required
under subdivisions (f) and (g).
(i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement this article or Article 5.21 (commencing
with Section 14167.1) by means of provider bulletins, all plan
letters, or other similar instruction, without taking regulatory
action. The department shall also provide notification to the Joint
Legislative Budget Committee and to the appropriate policy and fiscal
committees of the Legislature within five working days when the
above-described action is taken in order to inform the Legislature
that the action is being implemented.
(j) Notwithstanding any law, the Controller may use the funds in
the Hospital Quality Assurance Revenue Fund for cash flow loans to
the General Fund as provided in Sections 16310 and 16381 of the
Government Code.
SEC. 9. The sum of one thousand dollars ($1,000) is
hereby appropriated to the Controller from the General Fund for
administrative costs associated with this act.
SEC. 10. This act addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation on January
20, 2011, pursuant to subdivision (f) of Section 10 of Article IV of
the California Constitution.
SEC. 11. This act is a bill providing for
appropriations related to the Budget Bill within the meaning of
subdivision (e) of Section 12 of Article IV of the California
Constitution, has been identified as related to the budget in the
Budget Bill, and shall take effect immediately.
SEC. 12. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to protect the credit and fiscal health of the state, it
is necessary that this act take effect immediately.
SECTION 1. It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2011.