BILL ANALYSIS Ó
SB 82
Page 1
SENATE THIRD READING
SB 82 (Budget and Fiscal Review Committee)
As Amended March 14, 2011
2/3 vote. Urgency
SENATE VOTE :Vote not relevant
SUMMARY : Makes various changes to state laws in the area of
cash management and cash deferrals in order to ensure adequate
cash availability during 2011-12. Specifically, this bill :
1)Authorizes deferrals in General Fund (GF) payments starting in
July 2011, October 2011, and March 2012, except as specified
below. The deferrals can be made for each of these dates no
more than 60 days, 90 days, and 60 days, respectively. These
deferrals may be triggered off or repaid early in whole or in
part if the State Treasurer, State Controller, and Director of
Finance determine sufficient cash reserves are available. The
deferrals can be moved forward to the prior month or delayed
to the subsequent month; however, the Joint Legislative Budget
Committee must be notified before changes can be made. In
addition to the deferral criteria outlined above, certain GF
payments are subject to additional payment-specific criteria
listed below:
a) Permits up to three deferrals of payments to the federal
government for Supplementary Security Income/State
Supplementary Payments (SSI/SSP) benefits; and,
b) Permits deferral of social services and other payments
to cities, counties, and local governments not to exceed $1
billion. Deferrals of Mental Health Services Act payments
are not counted towards the $1 billion. This may include
deferral of California Work Opportunity and Responsibility
to Kids (CalWORKs) assistance payments and other social
services costs. The Administration has stated that it does
not anticipate resulting delays to beneficiaries' receipt
of assistance payments. Payments to counties or cities with
a population less than 50,000 shall not be deferred.
2)Authorizes the following specific deferral plan for K-12
education payments:
a) Both the July 2011, and August 2011 payments of $1.4
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billion shall be deferred;
b) The October 2011 payment of $2.4 billion shall be
deferred;
c) In September 2011, $700 million of the July deferral
shall be paid;
d) In January 2012, $4.5 billion from the remaining July,
August, and October deferrals shall be paid; and,
e) In March 2012, $1.4 billion shall be deferred and paid
in April 2012.
3)Includes a hardship waiver process for Local Educational
Agencies (LEAs) who might not be able to meet financial
obligations if payments are deferred. In order to be eligible
for a hardship waiver, LEAs would need to qualify for an
emergency apportionment. Expenditure obligations required for
payments of tax and revenue anticipation notes (TRANs) or
other short-term debt issued for cashflow purposes in 2010-11
are also to be considered for qualification of hardship.
4)Modifies higher-education payments to smooth payment over the
fiscal year, specifically:
a) For the University of California (UC), authorizes the
state to pay only one-twelfth (1/12) of the UC's annual
appropriation each month between July 2011 and April 2012.
After April 2012, there are no limitations on payments
within the UC's appropriations limit.
b) For the California State University (CSU), authorizes
the state to pay only one-twelfth (1/12) of the CSU's
annual appropriation each month between July 2011 and April
2012. After April 2011, there are no limitations on
payments within the CSU's appropriations limit.
5)Includes specific changes to other deferrals and adjustments,
specifically:
a) For transportation, due to the approval of Proposition
22 on the November 2010 ballot, repeals the section that
authorizes the deferral of apportionments to local
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governments for the Highway Users Tax Account (HUTA)
revenues. Deferrals of the local share of gasoline excise
tax revenue are now prohibited by the Constitution;
b) For the CSU, in addition to the payment smoothing
authorizes deferral of a $250 million payment to the CSU
with repayment mandated in April 2012; and,
c) For California Community Colleges, authorizes the
deferral of a $200 million payment from July 2011 to
October 2011, and the deferral of a $100 million payment
from March 2012 to May 2012. Includes a hardship clause to
exempt those community college districts that cannot raise
funds to cover their necessary expenses during those time
periods.
6)Authorizes borrowing from additional special funds for
cashflow needs. This bill adds four new special funds to
those eligible for cashflow borrowing. Most special funds are
already eligible for cashflow borrowing, except where
prohibited by the Constitution. The new funds are the
Education Protection Account, the Local Revenue Fund 2011, the
Immediate and Critical Needs Account of the State Court
Facilities Construction Fund, and the Hospital Quality
Assurance Revenue Fund.
7)Adds an urgency clause allowing this bill to take effect
immediately upon enactment.
Analysis Prepared by : Mark Ibele / BUDGET / (916) 319-2099
FN: 0000062