BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 95
                                                                  Page  1


          SENATE THIRD READING
          SB 95 (Budget and Fiscal Review Committee)
          As Amended  January 30, 2012
          Majority vote.  Budget Bill Appropriation Takes Effect 
          Immediately

           SENATE VOTE  :Vote not relevant  
           
           BUDGET              18-6                                        
           
           -------------------------------- 
          |Ayes:|Blumenfield, Alejo,       |
          |     |Allen, Bonilla, Brownley, |
          |     |Buchanan, Butler, Cedillo |
          |     |Chesbro, Dickinson,       |
          |     |Feuer, Gordon, Huffman,   |
          |     |Jeffries, Mitchell,       |
          |     |Monning, Nestande,        |
          |     |Swanson                   |
          |     |                          |
          |-----+--------------------------|
          |Nays:|Harkey, Jones, Logue,     |
          |     |Mansoor, Morrell, Wagner  |
          |     |                          |
           -------------------------------- 

           SUMMARY  :  The bill would increase the availability of various 
          funds that could be used as borrowable resources for the state's 
          General Fund for cash flow purposes.  The state currently has a 
          cash management plan in place and exempts certain activities to 
          implement this cash management plan from the administrative 
          procedures act.  This legislation is necessary to carry-out the 
          requirements of the 2011-12 Budget Act.  Specifically,  this 
          bill  :

          1)Authorizes the Director of Finance to designate up to 15% of 
            the cash balances in the Highway Users Tax Account, 
            Transportation Investment Fund, Motor Vehicle Fuel Account, 
            Transportation Revolving Account and the State Highway Account 
            to be available for contingency interim financing for critical 
            state highway and local road projects that would otherwise be 
            financed by General Obligation bonds.

          2)Sanctions the Controller to receive and duly account for 








                                                                  SB 95
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            moneys received by the Condemnation Deposits Fund, maintained 
            by the Treasurer's Office, to use such funds for cash flow 
            loans to the General Fund.

          3)Allows the Controller to use funds in the Transportation 
            Investment Fund for cash flow loans to the General Fund as 
            long as such loans would not interfere with the purpose for 
            which the fund was created.  Interest would be computed based 
            on the earnings rate of the fund.

          4)Permits the Controller to use funds in the Motor Vehicle Fuel 
            Account of the Transportation Tax Fund for cash flow loans to 
            the General Fund as long as such loans would not interfere 
            with the purpose for which the fund and account were created.  
            Interest would be computed based on the earnings rate of the 
            fund.

          5)Authorizes the Controller to use funds in the Transportation 
            Revolving Account of the State Transportation Fund for cash 
            flow loans to the General Fund as long as such loans would not 
            interfere with the purpose for which the fund and account were 
            created.  Interest would be computed based on the earnings 
            rate of the fund.

          6)Sanctions the Controller to use funds in the State Highway 
            Account of the State Transportation Fund for cash flow loans 
            to the General Fund as long as such loans would not interfere 
            with the purpose for which the fund and account were created.  
            Interest would be computed based on the earnings rate of the 
            fund.

          7)Allows the Controller to use funds in the Highway Users Tax 
            Account of the Transportation Tax Fund for cash flow loans to 
            the General Fund as long as such loans would not interfere 
            with the purpose for which the fund and account were created.  
            Interest would be computed based on the earnings rate of the 
            fund.

          8)Permits an exemption from the current prohibition against 
            encumbering moneys without specific statutory authorization, 
            with respect to moneys appropriated from the Highway Users Tax 
            Account, and moneys apportioned or transferred from that 
            account.  Moneys from these funds would thus be able to be 
            encumbered in the event of a delayed budget.








                                                                  SB 95
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          9)Provides an appropriation to the Department of Finance for 
            administrative costs and as a Budget Bill will take effect 
            immediately pursuant to the California Constitution, Article 
            IV, Section 12(e).

           EXISTING LAW  :  Currently, deposits in the funds named above must 
          be retained in those funds until dispersed for the purposes for 
          which the fund was established.  Certain funds for roads and 
          highways are continuously appropriated, but existing law 
          generally provides that moneys in continuously appropriated 
          funds may not be encumbered unless the Legislature through 
          statute specifies that the moneys in the funds are appropriated 
          for encumbrances. 

           FISCAL EFFECT  :   The bill will have no budgetary impact but 
          facilitate and ease cash flow requirements within the budget 
          year by increasing the amount of borrowable resources from 
          internal funds.  An estimated $865 million will become available 
          for General Fund borrowing for cash flow purposes during 
          2011-12.

           COMMENTS  :  The bill includes various provisions that further 
          transportation goals and facilitate the completion of projects.  
          The retention of cash balances in these funds will ensure that 
          interim financing is available and the loosening of encumbrance 
          limitations for continuously appropriated funds will help 
          projects be completed in a timely fashion.


           Analysis Prepared by  :    Mark Ibele / BUDGET/ (916) 319-2099


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