Amended in Assembly April 30, 2015

California Legislature—2015–16 Regular Session

Assembly Constitutional Amendment No. 5

Introduced by Assembly Member Grove

March 11, 2015

Assembly Constitutional Amendment No. 5—A resolution to propose to the people of the State of California an amendment to the Constitution of the State, begin delete relating to the Legislature. end delete begin insert by amending Sections 3, 10, 11, and 12 of Article IV thereof, by amending Section 36 of Article XIII thereof, by amending Sections 1, 2, 3, 6, 8, and 10.5 of, and adding Section 14 to, Article XIII   B thereof, by amending Sections 8, 8.5, 20, 21, and 22 of Article XVI thereof, by amending Section 2 of Article XIX   B thereof, and by amending Section 4 of Article XXXV thereof, relating to the state budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

ACA 5, as amended, Grove. Legislature: 2-year budget.

The California Constitution provides that the Legislature meets in a biennial regular session, commencing with the first Monday in December in each even-numbered year, when each house is required to immediately organize, and concluding at midnight on November 30 of the next even-numbered year. The California Constitution requires the Governor to submit to the Legislature a budget for the ensuing fiscal year within the first 10 days of each calendar year and requires the Legislature to pass the Budget Bill by midnight on June 15 of each year. The California Constitution authorizes the Legislature or either house, by resolution, to provide for the selection of begin delete committees. end delete begin insert committees necessary for the conduct of its business. end insert

begin delete

This measure would provide that it is the intent of the Legislature to propose to the people of the State of California amendments to the Constitution that, commencing in 2019, would require the Legislature to consider or act only upon the Budget Bill and related bills, and up to 5 bills introduced by the standing committees of the Legislature in the regular session in each odd-numbered year, would require the Governor to submit to the Legislature a budget for the ensuing 2 fiscal years within the first 10 days of the first calendar year of the biennium of the legislative session, and would require the Legislature to adopt, by June 15 of the first calendar year of the biennium of the legislative session, a Budget Bill that provides a budget for the next 2-year fiscal period commencing on July 1.

end delete begin insert

This measure would authorize the Legislature, in the first year of the regular session, to consider or act upon only the Budget Bill and related bills, and up to 5 bills introduced by each of the standing committees of the Legislature, as specified. The measure would require the Governor to submit to the Legislature a budget for the ensuing 2 fiscal years within the first 10 days of the first calendar year of the biennium of the legislative session, and would require the Legislature to adopt by June 15 of the first calendar year of the biennium of the legislative session a Budget Bill that provides a budget for the next 2-year fiscal period commencing on July 1. The measure, in the second year of the regular session, would authorize the Legislature to consider or act upon only legislation other than the Budget Bill and related bills. The Legislature, by a 2⁄3 vote of each house, would be authorized, however, to amend an enacted Budget Bill and related bills in both calendar years of the biennium.

end insert begin insert

This measure would establish and specify the membership requirements for the Joint Legislative Budget Committee and would authorize the Joint Legislative Budget Committee to approve proposals submitted by the Governor to amend an enacted Budget Bill. A proposed amendment approved by the committee would take immediate effect as a statute. The measure would also make numerous changes to conform to the adoption of a budget for a 2-year fiscal period.

end insert begin insert

The measure provides that these changes would become operative on December 3, 2018, and that the constitutional provisions amended by the measure would continue in effect as they read prior to voter approval of the measure until December 3, 2018

end insert

Vote: ²⁄₃. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

Resolved by the Assembly, the Senate concurring, That the
Legislature of the State of California at its 2015-16 Regular
Session commencing on the first day of December 2014, two-thirds
of the membership of each house concurring, hereby proposes to
the people of the State of begin delete California, end delete begin insert California end insert that the
Constitution of the State be amended as follows:

begin insert

begin insert First-- end insert   

end insert

begin insert That Section 3 of Article IV thereof is amended to read: end insert

SEC. 3.  

(a) The Legislature shall convene in regular session
at noon on the first Monday in December of each even-numbered
year and each house shall immediately organize. Each begin insert regular end insert
session of the Legislature shall adjourn sine die by operation of
the Constitution at midnight on November 30 of the following
even-numbered year.

begin insert

(b) (1) In each odd-numbered year of the regular session, the
Legislature shall consider or act upon only the budget bill, other
bills providing for appropriations related to the budget bill, and
bills introduced pursuant to clause (ii) of subparagraph (B) of
paragraph (2).

end insert begin insert

(2) In each odd-numbered year of the regular session, the
Legislature shall conduct hearings only for either of the following
purposes:

end insert begin insert

(A) To consider, develop, and adopt the budget for the next
two-year fiscal period.

end insert begin insert

(B) (i) Oversight of state department operations and state
programs.

end insert begin insert

(ii) A standing committee of the Legislature may introduce up
to five bills authored by a majority of the standing committee to
improve state department operations or state program deficiencies
discussed during an oversight hearing conducted pursuant to
clause (i).

end insert begin insert

(c) In each even-numbered year of the regular session, the
Legislature shall consider or act upon only legislation other than
the budget bill or other bills providing for appropriations related
to the budget bill.

end insert begin insert

(d) Notwithstanding subdivisions (b) and (c), the Legislature
may amend an enacted budget bill or other bill providing for
appropriations related to an enacted budget bill in either an odd-
or even-numbered year of the regular session in which the budget
bill or other bill providing for appropriations related to the budget
bill was enacted.

end insert begin delete

(b)

end delete

begin insert (e) end insert  On extraordinary occasions the Governor by proclamation
may cause the Legislature to assemble in special session. When
so assembled begin delete it has power to end delete begin insert , the Legislature shall end insert legislate only
on subjects specified in the proclamation but may provide for
expenses and other matters incidental to the session.

begin insert

begin insert Second-- end insert   

end insert

begin insert That Section 10 of Article IV thereof is amended to
read: end insert

SEC. 10.  

(a) Each bill passed by the Legislature shall be
presented to the Governor. It becomes a statute if it is signed by
the Governor. The Governor may veto it by returning it with any
objections to the house of origin, which shall enter the objections
in the journal and proceed to reconsider it. If each house then
passes the bill by rollcall vote entered in the journal, two-thirds of
the membership concurring, it becomes a statute.

(b) (1) Any bill, other than a bill which would establish or
change boundaries of any begin delete legislative, congressional, or other end delete
election district, passed by the Legislature on or before the date
the Legislature adjourns for a joint recess to reconvene in the
second calendar year of the biennium of the legislative session,
and in the possession of the Governor after that date, that is not
returned within 30 days after that date becomes a statute.

(2) Any bill passed by the Legislature before September 1 of
the second calendar year of the biennium of the legislative session
and in the possession of the Governor on or after September 1 that
is not returned on or before September 30 of that year becomes a
statute.

(3) Any other bill presented to the Governor that is not returned
within 12 days becomes a statute.

(4) If the Legislature by adjournment of a special session
prevents the return of a bill with the veto message, the bill becomes
a statute unless the Governor vetoes the bill within 12 days after
it is presented by depositing it and the veto message in the office
of the Secretary of State.

(5) If the 12th day of the period within which the Governor is
required to perform an act pursuant to paragraph (3) or (4) begin delete of this
subdivision end delete is a Saturday, Sunday, or holiday, the period is
extended to the next day that is not a Saturday, Sunday, or holiday.

(c) Any bill introduced during the first year of the biennium of
the legislative session that has not been passed by the house of
origin by January 31 of the second calendar year of the biennium
may no longer be acted on by the house. No bill may be passed
by either house on or after September 1 of an even-numbered year
except statutes calling elections, statutes providing for tax levies
or appropriations for the usual current expenses of the State, and
urgency statutes, and bills passed after being vetoed by the
Governor.

(d) The Legislature may not present any bill to the Governor
after November 15 of the second calendar year of the biennium of
the legislative session.

(e) The Governor may reduce or eliminate one or more items
of appropriation while approving other portions of a bill. The
Governor shall append to the bill a statement of the items reduced
or eliminated with the reasons for the action. The Governor shall
transmit to the house originating the bill a copy of the statement
and reasons. Items reduced or eliminated shall be separately
reconsidered and may be passed over the Governor’s veto in the
same manner as bills.

(f) (1) If, following the enactment of the budget bill for the
begin delete 2004-05 end delete begin insert 2018-19 end insert fiscal year or any subsequent begin delete fiscal year, end delete
begin insert two-year fiscal period, end insert the Governor determines that, for that fiscal
begin delete year, end delete begin insert year or two-year fiscal period, as applicable, end insert General Fund
revenues will decline substantially below the estimate of General
Fund revenues upon which the budget bill for that fiscal begin delete year, end delete begin insert year
or two-year fiscal period, end insert as enacted, was based, or General Fund
expenditures will increase substantially above that estimate of
General Fund revenues, or both, the Governor may issue a
proclamation declaring a fiscal emergency and shall thereupon
cause the Legislature to assemble in special session for this
purpose. The proclamation shall identify the nature of the fiscal
emergency and shall be submitted by the Governor to the
Legislature, accompanied by proposed legislation to address the
fiscal emergency.

(2) If the Legislature fails to pass and send to the Governor a
bill or bills to address the fiscal emergency by the 45th day
following the issuance of the proclamation, the Legislature may
not act on any other bill, nor may the Legislature adjourn for a
joint recess, until begin delete that end delete begin insert a end insert bill or begin delete those end delete bills begin insert to address the fiscal
emergency end insert have been passed and sent to the Governor.

(3) A bill addressing the fiscal emergency declared pursuant to
this section shall contain a statement to that effect.

begin insert

begin insert Third-- end insert   

end insert

begin insert That Section 11 of Article IV thereof is amended to
read: end insert

SEC. 11.  

begin insert (a) end insert begin insert   end insert The Legislature or either house may by resolution
provide for the selection of committees necessary for the conduct
of its business, including committees to ascertain facts and make
recommendations to the Legislature on a subject within the scope
of legislative control.

begin insert

(b) (1) The Joint Legislative Budget Committee is established
to ascertain facts and make recommendations to the Legislature
and to the houses thereof concerning the state budget, the revenues
and expenditures of the State, and the organization and functions
of the State and its departments, subdivisions, and agencies.

end insert begin insert

(2) Each political party represented in each house shall, to the
greatest extent possible, be proportionately represented in the
Joint Legislative Budget Committee. The membership of the Joint
Legislative Budget Committee shall be as follows:

end insert begin insert

(A) Eight Members of the Assembly appointed by the Speaker
of the Assembly.

end insert begin insert

(B) Eight Members of the Senate appointed by the Senate
Committee on Rules.

end insert begin insert

(3) In addition to the duties described in paragraph (1), the
Joint Legislative Budget Committee may, by a resolution adopted
by a majority of the committee members, approve, pursuant to
subdivision (i) of Section 12, a proposal by the Governor to amend
an enacted budget bill.

end insert

begin insert

begin insert Fourth-- end insert   

end insert

begin insert That Section 12 of Article IV thereof is amended to
read: end insert

SEC. 12.  

(a) Within the first 10 days of each begin delete calendar end delete
begin insert odd-numbered end insert year, the Governor shall submit to the Legislature,
with an explanatory message, a budget for the begin delete ensuing fiscal year end delete
begin insert next two-year fiscal period commencing on July 1, end insert containing
itemized statements for recommended state expenditures and
estimated state revenues. If recommended expenditures exceed
estimated revenues, the Governor shall recommend the sources
from which the additional revenues should be provided.

(b) The Governor and the Governor-elect may require a state
agency, officer or employee to furnish whatever information is
deemed necessary to prepare the budget.

(c) (1) The budget shall be accompanied by a budget bill
itemizing recommended expenditures.

(2) The budget bill shall be introduced immediately in each
house by the persons chairing the committees that consider the
budget.

(3) The Legislature shall pass the budget bill by midnight on
June 15 of each begin insert odd-numbered end insert year.

(4) Until the budget bill has been enacted, the Legislature shall
not send to the Governor for consideration any bill appropriating
funds for expenditure during the fiscal begin delete year end delete begin insert period end insert for which the
budget bill is to be enacted, except emergency bills recommended
by the Governor or appropriations for the salaries and expenses
of the Legislature.

(d) No bill except the budget bill may contain more than one
item of appropriation, and that for one certain, expressed purpose.
Appropriations from the General Fund of the State, except
appropriations for the public schools and appropriations in the
budget bill and in other bills providing for appropriations related
to the budget bill, are void unless passed in each house by rollcall
vote entered in the journal, two-thirds of the membership
concurring.

(e) (1) Notwithstanding any other provision of law or of this
Constitution, the budget bill and other bills providing for
appropriations related to the budget bill may be passed in each
house by rollcall vote entered in the journal, a majority of the
membership concurring, to take effect immediately upon being
signed by the Governor or upon a date specified in the legislation.
begin delete Nothing end delete begin insert Once enacted, a budget bill or other bill providing for
appropriations related to an enacted budget bill may be amended
by the Legislature pursuant to subdivision (d) of Section 3 only by
a bill passed in each house by a rollcall vote entered in the journal,
two-thirds of the membership concurring end insert begin insert . end insert

begin insert (2) end insert begin insert   end insert begin insert Nothing end insert in this subdivision shall affect the vote requirement
for appropriations for the public schools contained in subdivision
(d) of this section and in subdivision (b) of Section 8 begin delete of this article end delete .

begin delete

(2)

end delete

begin insert (3) end insert  For purposes of this section begin insert and Section 3 end insert , “other bills
providing for appropriations related to the budget bill” shall consist
only of bills begin insert passed in the first calendar year of the biennium of
the legislative session that are end insert identified as related to the budget
in the budget bill passed by the Legislature.

(f) The Legislature may control the submission, approval, and
enforcement of budgets and the filing of claims for all state
agencies.

(g)  begin delete For the 2004-05 fiscal year, or any subsequent fiscal year,
the end delete begin insert The end insert Legislature begin delete may end delete begin insert shall end insert not send to the Governor for
consideration, begin delete nor may end delete begin insert and end insert the Governor begin insert shall not end insert sign into law,
a budget bill that would appropriate from the General Fund, for
begin delete that fiscal year, end delete begin insert that two-year fiscal period, end insert a total amount that,
when combined with all appropriations from the General Fund for
begin delete that fiscal year end delete begin insert that two-year fiscal period end insert made as of the date of
the budget bill’s passage, and the amount of any General Fund
moneys transferred to the Budget Stabilization Account for begin delete that
fiscal year end delete begin insert that two-year fiscal period end insert pursuant to Section 20 of
Article XVI, exceeds General Fund revenues for begin delete that fiscal year end delete
begin insert that two-year fiscal period end insert estimated as of the date of the budget
bill’s passage. That estimate of General Fund revenues shall be
set forth in the budget bill passed by the Legislature.

(h) Notwithstanding any other provision of law or of this
Constitution, including subdivision (c) of this section, Section 4
of this article, and Sections 4 and 8 of Article III, in any
begin insert odd-numbered end insert year in which the budget bill is not passed by the
Legislature by midnight on June 15, there shall be no appropriation
from the current budget or future budget to pay any salary or
reimbursement for travel or living expenses for Members of the
Legislature during any regular or special session for the period
from midnight on June 15 until the day that the budget bill is
presented to the Governor. No salary or reimbursement for travel
or living expenses forfeited pursuant to this subdivision shall be
paid retroactively.

begin insert

(i) The Governor may submit proposals to amend a budget bill
that has been enacted. A proposal to amend an enacted budget
bill shall be submitted to both houses simultaneously, whereupon
it shall be immediately referred to the Joint Legislative Budget
Committee. The Joint Legislative Budget Committee may approve
a proposal by the Governor to amend an enacted budget bill by
an affirmative vote of not less than five of the Assembly Members
and five of the Senators constituting the committee.
Notwithstanding subdivision (b) of Section 8, a proposal to amend
an enacted budget bill that is approved by the committee shall take
effect as a statute and shall go into effect immediately upon being
approved.

end insert

begin insert

begin insert Fifth-- end insert   

end insert

begin insert That Section 36 of Article XIII thereof is amended to
read: end insert

SEC. 36.  

(a) For purposes of this section:

(1) “Public Safety Services” includes the following:

(A) Employing and training public safety officials, including
law enforcement personnel, attorneys assigned to criminal
proceedings, and court security staff.

(B) Managing local jails and providing housing, treatment, and
services for, and supervision of, juvenile and adult offenders.

(C) Preventing child abuse, neglect, or exploitation; providing
services to children and youth who are abused, neglected, or
exploited, or who are at risk of abuse, neglect, or exploitation, and
the families of those children; providing adoption services; and
providing adult protective services.

(D) Providing mental health services to children and adults to
reduce failure in school, harm to self or others, homelessness, and
preventable incarceration or institutionalization.

(E) Preventing, treating, and providing recovery services for
substance abuse.

(2) “2011 Realignment Legislation” means legislation enacted
on or before September 30, 2012, to implement the state budget
plan, that is entitled 2011 Realignment and provides for the
assignment of Public Safety Services responsibilities to local
agencies, including related reporting responsibilities. The
legislation shall provide local agencies with maximum flexibility
and control over the design, administration, and delivery of Public
Safety Services consistent with federal law and funding
requirements, as determined by the Legislature. However, 2011
Realignment Legislation shall include no new programs assigned
to local agencies after January 1, 2012, except for the early periodic
screening, diagnosis, and treatment (EPSDT) program and mental
health managed care.

(b) (1) Except as provided in subdivision (d), commencing in
the 2011-12 fiscal year and continuing thereafter, the following
amounts shall be deposited into the Local Revenue Fund 2011, as
established by Section 30025 of the Government Code, as follows:

(A) All revenues, less refunds, derived from the taxes described
in Sections 6051.15 and 6201.15 of the Revenue and Taxation
Code, as those sections read on July 1, 2011.

(B) All revenues, less refunds, derived from the vehicle license
fees described in Section 11005 of the Revenue and Taxation Code,
as that section read on July 1, 2011.

(2) On and after July 1, 2011, the revenues deposited pursuant
to paragraph (1) shall not be considered General Fund revenues
or proceeds of taxes for purposes of Section 8 of Article XVI of
the California Constitution.

(c) (1) Funds deposited in the Local Revenue Fund 2011 are
continuously appropriated exclusively to fund the provision of
Public Safety Services by local agencies. Pending full
implementation of the 2011 Realignment Legislation, funds may
also be used to reimburse the State for program costs incurred in
providing Public Safety Services on behalf of local agencies. The
methodology for allocating funds shall be as specified in the 2011
Realignment Legislation.

(2) The county treasurer, city and county treasurer, or other
appropriate official shall create a County Local Revenue Fund
2011 within the treasury of each county or city and county. The
money in each County Local Revenue Fund 2011 shall be
exclusively used to fund the provision of Public Safety Services
by local agencies as specified by the 2011 Realignment Legislation.

(3) Notwithstanding Section 6 of Article XIII B, or any other
constitutional provision, a mandate of a new program or higher
level of service on a local agency imposed by the 2011
Realignment Legislation, or by any regulation adopted or any
executive order or administrative directive issued to implement
that legislation, shall not constitute a mandate requiring the State
to provide a subvention of funds within the meaning of that section.
Any requirement that a local agency comply with Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title
5 of the Government Code, with respect to performing its Public
Safety Services responsibilities, or any other matter, shall not be
a reimbursable mandate under Section 6 of Article XIII B.

(4) (A) Legislation enacted after September 30, 2012, that has
an overall effect of increasing the costs already borne by a local
agency for programs or levels of service mandated by the 2011
Realignment Legislation shall apply to local agencies only to the
extent that the State provides annual funding for the cost increase.
Local agencies shall not be obligated to provide programs or levels
of service required by legislation, described in this subparagraph,
above the level for which funding has been provided.

(B) Regulations, executive orders, or administrative directives,
implemented after October 9, 2011, that are not necessary to
implement the 2011 Realignment Legislation, and that have an
overall effect of increasing the costs already borne by a local
agency for programs or levels of service mandated by the 2011
Realignment Legislation, shall apply to local agencies only to the
extent that the State provides annual funding for the cost increase.
Local agencies shall not be obligated to provide programs or levels
of service pursuant to new regulations, executive orders, or
administrative directives, described in this subparagraph, above
the level for which funding has been provided.

(C) Any new program or higher level of service provided by
local agencies, as described in subparagraphs (A) and (B), above
the level for which funding has been provided, shall not require a
subvention of funds by the State nor otherwise be subject to Section
6 of Article XIII B. This paragraph shall not apply to legislation
currently exempt from subvention under paragraph (2) of
subdivision (a) of Section 6 of Article XIII B as that paragraph
read on January 2, 2011.

(D) The State shall not submit to the federal government any
plans or waivers, or amendments to those plans or waivers, that
have an overall effect of increasing the cost borne by a local agency
for programs or levels of service mandated by the 2011
Realignment Legislation, except to the extent that the plans,
waivers, or amendments are required by federal law, or the State
provides annual funding for the cost increase.

(E) The State shall not be required to provide a subvention of
funds pursuant to this paragraph for a mandate that is imposed by
the State at the request of a local agency or to comply with federal
law. State funds required by this paragraph shall be from a source
other than those described in subdivisions (b) and (d), ad valorem
property taxes, or the Social Services Subaccount of the Sales Tax
Account of the Local Revenue Fund.

(5) (A) For programs described in subparagraphs (C) to (E),
inclusive, of paragraph (1) of subdivision (a) and included in the
2011 Realignment Legislation, if there are subsequent changes in
federal statutes or regulations that alter the conditions under which
federal matching funds as described in the 2011 Realignment
Legislation are obtained, and have the overall effect of increasing
the costs incurred by a local agency, the State shall annually
provide at least 50 percent of the nonfederal share of those costs
as determined by the State.

(B) When the State is a party to any complaint brought in a
federal judicial or administrative proceeding that involves one or
more of the programs described in subparagraphs (C) to (E),
inclusive, of paragraph (1) of subdivision (a) and included in the
2011 Realignment Legislation, and there is a settlement or judicial
or administrative order that imposes a cost in the form of a
monetary penalty or has the overall effect of increasing the costs
already borne by a local agency for programs or levels of service
mandated by the 2011 Realignment Legislation, the State shall
annually provide at least 50 percent of the nonfederal share of
those costs as determined by the State. Payment by the State is not
required if the State determines that the settlement or order relates
to one or more local agencies failing to perform a ministerial duty,
failing to perform a legal obligation in good faith, or acting in a
negligent or reckless manner.

(C) The state funds provided in this paragraph shall be from
funding sources other than those described in subdivisions (b) and
(d), ad valorem property taxes, or the Social Services Subaccount
of the Sales Tax Account of the Local Revenue Fund.

(6) If the State or a local agency fails to perform a duty or
obligation under this section or under the 2011 Realignment
Legislation, an appropriate party may seek judicial relief. These
proceedings shall have priority over all other civil matters.

(7) The funds deposited into a County Local Revenue Fund
2011 shall be spent in a manner designed to maintain the State’s
eligibility for federal matching funds, and to ensure compliance
by the State with applicable federal standards governing the State’s
provision of Public Safety Services.

(8) The funds deposited into a County Local Revenue Fund
2011 shall not be used by local agencies to supplant other funding
for Public Safety Services.

(d) If the taxes described in subdivision (b) are reduced or cease
to be operative, the State shall begin delete annually end delete begin insert biennially end insert provide moneys
to the Local Revenue Fund 2011 in an amount equal to or greater
than the aggregate amount that otherwise would have been
provided by the taxes described in subdivision (b). The method
for determining that amount shall be described in the 2011
Realignment Legislation, and the State shall be obligated to provide
that amount for so long as the local agencies are required to
perform the Public Safety Services responsibilities assigned by
the 2011 Realignment Legislation. If the State fails to begin delete annually end delete
begin insert biennially end insert appropriate that amount, the Controller shall transfer
that amount from the General Fund in pro rata monthly shares to
the Local Revenue Fund 2011. Thereafter, the Controller shall
disburse these amounts to local agencies in the manner directed
by the 2011 Realignment Legislation. The state obligations under
this subdivision shall have a lower priority claim to General Fund
money than the first priority for money to be set apart under Section
8 of Article XVI and the second priority to pay voter-approved
debts and liabilities described in Section 1 of Article XVI.

(e) (1) To ensure that public education is not harmed in the
process of providing critical protection to local Public Safety
Services, the Education Protection Account is hereby created in
the General Fund to receive and disburse the revenues derived
from the incremental increases in taxes imposed by this section,
as specified in subdivision (f).

(2) (A) Before June 30, 2013, and before June 30 of each year
from 2014 to 2018, inclusive, the Director of Finance shall estimate
the total amount of additional revenues, less refunds, that will be
derived from the incremental increases in tax rates made in
subdivision (f) that will be available for transfer into the Education
Protection Account during the next fiscal year. The Director of
Finance shall make the same estimate by January 10, 2013, for
additional revenues, less refunds, that will be received by the end
of the 2012-13 fiscal year.

(B) During the last 10 days of the quarter of each of the first
three quarters of each fiscal year from 2013-14 to 2018-19,
inclusive, the Controller shall transfer into the Education Protection
Account one-fourth of the total amount estimated pursuant to
subparagraph (A) for that fiscal year, except as this amount may
be adjusted pursuant to subparagraph (D).

(C) In each of the fiscal years from 2012-13 to 2020-21,
inclusive, the Director of Finance shall calculate an adjustment to
the Education Protection Account, as specified by subparagraph
(D), by adding together the following amounts, as applicable:

(i) In the last quarter of each fiscal year from 2012-13 to
2018-19, inclusive, the Director of Finance shall recalculate the
estimate made for the fiscal year pursuant to subparagraph (A),
and shall subtract from this updated estimate the amounts
previously transferred to the Education begin delete Protecion end delete begin insert Protection end insert
Account for that fiscal year.

(ii) In June 2015 and in every June from 2016 to 2021, inclusive,
the Director of Finance shall make a final determination of the
amount of additional revenues, less refunds, derived from the
incremental increases in tax rates made in subdivision (f) for the
fiscal year ending two years prior. The amount of the updated
estimate calculated in clause (i) for the fiscal year ending two years
prior shall be subtracted from the amount of this final
determination.

(D) If the sum determined pursuant to subparagraph (C) is
positive, the Controller shall transfer an amount equal to that sum
into the Education Protection Account within 10 days preceding
the end of the fiscal year. If that amount is negative, the Controller
shall suspend or reduce subsequent quarterly transfers, if any, to
the Education Protection Account until the total reduction equals
the negative amount herein described. For purposes of any
calculation made pursuant to clause (i) of subparagraph (C), the
amount of a quarterly transfer shall not be modified to reflect any
suspension or reduction made pursuant to this subparagraph.

(3) All moneys in the Education Protection Account are hereby
continuously appropriated for the support of school districts, county
offices of education, charter schools, and community college
districts as set forth in this paragraph.

(A) Eleven percent of the moneys appropriated pursuant to this
paragraph shall be allocated quarterly by the Board of Governors
of the California Community Colleges to community college
districts to provide general purpose funding to community college
districts in proportion to the amounts determined pursuant to
Section 84750.5 of the Education Code, as that code section read
upon voter approval of this section. The allocations calculated
pursuant to this subparagraph shall be offset by the amounts
specified in subdivisions (a), (c), and (d) of Section 84751 of the
Education Code, as that section read upon voter approval of this
section, that are in excess of the amounts calculated pursuant to
Section 84750.5 of the Education Code, as that section read upon
voter approval of this section, provided that no community college
district shall receive less than one hundred dollars ($100) per full
time equivalent student.

(B) Eighty-nine percent of the moneys appropriated pursuant
to this paragraph shall be allocated quarterly by the Superintendent
of Public Instruction to provide general purpose funding to school
districts, county offices of education, and state general-purpose
funding to charter schools in proportion to the revenue limits
calculated pursuant to Sections 2558 and 42238 of the Education
Code and the amounts calculated pursuant to Section 47633 of the
Education Code for county offices of education, school districts,
and charter schools, respectively, as those sections read upon voter
approval of this section. The amounts so calculated shall be offset
by the amounts specified in subdivision (c) of Section 2558 of,
paragraphs (1) through (7) of subdivision (h) of Section 42238 of,
and Section 47635 of, the Education Code for county offices of
education, school districts, and charter schools, respectively, as
those sections read upon voter approval of this section, that are in
excess of the amounts calculated pursuant to Sections 2558, 42238,
and 47633 of the Education Code for county offices of education,
school districts, and charter schools, respectively, as those sections
read upon voter approval of this section, provided that no school
district, county office of education, or charter school shall receive
less than two hundred dollars ($200) per unit of average daily
attendance.

(4) This subdivision is self-executing and requires no legislative
action to take effect. Distribution of the moneys in the Education
Protection Account by the Board of Governors of the California
Community Colleges and the Superintendent of Public Instruction
shall not be delayed or otherwise affected by failure of the
Legislature and Governor to enact begin delete an annual end delete begin insert a end insert budget bill pursuant
to Section 12 of Article IV, by invocation of paragraph (h) of
Section 8 of Article XVI, or by any other action or failure to act
by the Legislature or Governor.

(5) Notwithstanding any other provision of law, the moneys
deposited in the Education Protection Account shall not be used
to pay any costs incurred by the Legislature, the Governor, or any
agency of state government.

(6) A community college district, county office of education,
school district, or charter school shall have sole authority to
determine how the moneys received from the Education Protection
Account are spent in the school or schools within its jurisdiction,
provided, however, that the appropriate governing board or body
shall make these spending determinations in open session of a
public meeting of the governing board or body and shall not use
any of the funds from the Education Protection Account for salaries
or benefits of administrators or any other administrative costs.
Each community college district, county office of education, school
district, and charter school shall annually publish on its Internet
Web site an accounting of how much money was received from
the Education Protection Account and how that money was spent.

(7) The annual independent financial and compliance audit
required of community college districts, county offices of
education, school districts, and charter schools shall, in addition
to all other requirements of law, ascertain and verify whether the
funds provided from the Education Protection Account have been
properly disbursed and expended as required by this section.
Expenses incurred by those entities to comply with the additional
audit requirement of this section may be paid with funding from
the Education Protection Account, and shall not be considered
administrative costs for purposes of this section.

(8) Revenues, less refunds, derived pursuant to subdivision (f)
for deposit in the Education Protection Account pursuant to this
section shall be deemed “General Fund revenues,” “General Fund
proceeds of taxes,” and “moneys to be applied by the State for the
support of school districts and community college districts” for
purposes of Section 8 of Article XVI.

(f) (1) (A) In addition to the taxes imposed by Part 1
(commencing with Section 6001) of Division 2 of the Revenue
and Taxation Code, for the privilege of selling tangible personal
property at retail, a tax is hereby imposed upon all retailers at the
rate of 1/4 percent of the gross receipts of any retailer from the
sale of all tangible personal property sold at retail in this State on
and after January 1, 2013, and before January 1, 2017.

(B) In addition to the taxes imposed by Part 1 (commencing
with Section 6001) of Division 2 of the Revenue and Taxation
Code, an excise tax is hereby imposed on the storage, use, or other
consumption in this State of tangible personal property purchased
from any retailer on and after January 1, 2013, and before January
1, 2017, for storage, use, or other consumption in this state at the
rate of 1/4 percent of the sales price of the property.

(C) The Sales and Use Tax Law, including any amendments
enacted on or after the effective date of this section, shall apply to
the taxes imposed pursuant to this paragraph.

(D) This paragraph shall become inoperative on January 1, 2017.

(2) For any taxable year beginning on or after January 1, 2012,
and before January 1, 2019, with respect to the tax imposed
pursuant to Section 17041 of the Revenue and Taxation Code, the
income tax bracket and the rate of 9.3 percent set forth in paragraph
(1) of subdivision (a) of Section 17041 of the Revenue and
Taxation Code shall be modified by each of the following:

(A) (i) For that portion of taxable income that is over two
hundred fifty thousand dollars ($250,000) but not over three
hundred thousand dollars ($300,000), the tax rate is 10.3 percent
of the excess over two hundred fifty thousand dollars ($250,000).

(ii) For that portion of taxable income that is over three hundred
thousand dollars ($300,000) but not over five hundred thousand
dollars ($500,000), the tax rate is 11.3 percent of the excess over
three hundred thousand dollars ($300,000).

(iii) For that portion of taxable income that is over five hundred
thousand dollars ($500,000), the tax rate is 12.3 percent of the
excess over five hundred thousand dollars ($500,000).

(B) The income tax brackets specified in clauses (i), (ii), and
(iii) of subparagraph (A) shall be recomputed, as otherwise
provided in subdivision (h) of Section 17041 of the Revenue and
Taxation Code, only for taxable years beginning on and after
January 1, 2013.

(C) (i) For purposes of subdivision (g) of Section 19136 of the
Revenue and Taxation Code, this paragraph shall be considered
to be chaptered on the date it becomes effective.

(ii) For purposes of Part 10 (commencing with Section 17001)
of, and Part 10.2 (commencing with Section 18401) of, Division
2 of the Revenue and Taxation Code, the modified tax brackets
and tax rates established and imposed by this paragraph shall be
deemed to be established and imposed under Section 17041 of the
Revenue and Taxation Code.

(D) This paragraph shall become inoperative on December 1,
2019.

(3) For any taxable year beginning on or after January 1, 2012,
and before January 1, 2019, with respect to the tax imposed
pursuant to Section 17041 of the Revenue and Taxation Code, the
income tax bracket and the rate of 9.3 percent set forth in paragraph
(1) of subdivision (c) of Section 17041 of the Revenue and
Taxation Code shall be modified by each of the following:

(A) (i) For that portion of taxable income that is over three
hundred forty thousand dollars ($340,000) but not over four
hundred eight thousand dollars ($408,000), the tax rate is 10.3
percent of the excess over three hundred forty thousand dollars
($340,000).

(ii) For that portion of taxable income that is over four hundred
eight thousand dollars ($408,000) but not over six hundred eighty
thousand dollars ($680,000), the tax rate is 11.3 percent of the
excess over four hundred eight thousand dollars ($408,000).

(iii) For that portion of taxable income that is over six hundred
eighty thousand dollars ($680,000), the tax rate is 12.3 percent of
the excess over six hundred eighty thousand dollars ($680,000).

(B) The income tax brackets specified in clauses (i), (ii), and
(iii) of subparagraph (A) shall be recomputed, as otherwise
provided in subdivision (h) of Section 17041 of the Revenue and
Taxation Code, only for taxable years beginning on and after
January 1, 2013.

(C) (i) For purposes of subdivision (g) of Section 19136 of the
Revenue and Taxation Code, this paragraph shall be considered
to be chaptered on the date it becomes effective.

(ii) For purposes of Part 10 (commencing with Section 17001)
of, and Part 10.2 (commencing with Section 18401) of, Division
2 of the Revenue and Taxation Code, the modified tax brackets
and tax rates established and imposed by this paragraph shall be
deemed to be established and imposed under Section 17041 of the
Revenue and Taxation Code.

(D) This paragraph shall become inoperative on December 1,
2019.

(g) (1) The Controller, pursuant to his or her statutory authority,
may perform audits of expenditures from the Local Revenue Fund
2011 and any County Local Revenue Fund 2011, and shall audit
the Education Protection Account to ensure that those funds are
used and accounted for in a manner consistent with this section.

(2) The Attorney General or local district attorney shall
expeditiously investigate, and may seek civil or criminal penalties
for, any misuse of moneys from the County Local Revenue Fund
2011 or the Education Protection Account.

begin insert

begin insert Sixth-- end insert   

end insert

begin insert That Section 1 of Article XIII B thereof is amended to
read: end insert

SEC. 1.  

begin insert (a) end insert begin insert   end insert The total begin delete annual end delete appropriations subject to
limitation of the State begin delete and of each local government end delete begin insert for each
two-year fiscal period end insert shall not exceed the appropriations limit of
the begin delete entity of government for the prior year end delete begin insert State for the prior
two-year fiscal period end insert adjusted for the change in the cost of living
and the change in population, except as otherwise provided in this
article. begin insert For purposes of the 2019-21 fiscal period, “prior two-year
fiscal period,” as used in this subdivision, means the 2017-18 and
2018-19 fiscal years. end insert

begin insert

(b) The total annual appropriations subject to limitation of each
local government for each fiscal year shall not exceed the
appropriations limit of the local government for the prior fiscal
year adjusted for the change in the cost of living and the change
in population, except as otherwise provided in this article.

end insert

begin insert

begin insert Seventh-- end insert   

end insert

begin insert That Section 2 of Article XIII B thereof is amended
to read: end insert

SEC. 2.  

(a) (1) Fifty percent of all revenues received by the
State in a begin delete fiscal year and in the fiscal year immediately following
it end delete begin insert two-year fiscal period end insert in excess of the amount begin delete which end delete begin insert that end insert may
be appropriated by the State in compliance with this article during
that begin delete fiscal year and the fiscal year immediately following it end delete
begin insert two-year fiscal period end insert shall be transferred and allocated, from a
fund established for that purpose, pursuant to Section 8.5 of Article
XVI.

(2) Fifty percent of all revenues received by the State in a begin delete fiscal
year and in the fiscal year immediately following it end delete begin insert two-year fiscal
period end insert in excess of the amount begin delete which end delete begin insert that end insert may be appropriated
by the State in compliance with this article during that begin delete fiscal year
and the fiscal year immediately following it end delete begin insert two-year fiscal period end insert
shall be returned by a revision of tax rates or fee schedules within
the next begin delete two subsequent fiscal years. end delete begin insert two-year fiscal period. end insert

(b) All revenues received by an entity of government, other than
the State, in a fiscal year and in the begin insert subsequent end insert fiscal year
begin delete immediately following it end delete in excess of the amount begin delete which end delete begin insert that end insert may
be appropriated by the entity in compliance with this article during
that fiscal year and the begin insert subsequent end insert fiscal year begin delete immediately
following it end delete shall be returned by a revision of tax rates or fee
schedules within the next two subsequent fiscal years.

begin insert

begin insert Eighth-- end insert   

end insert

begin insert That Section 3 of Article XIII B thereof is amended
to read: end insert

SEC. 3.  

The appropriations limit begin insert for any two-year fiscal period,
in the case of the State, or end insert for any fiscal begin delete year end delete begin insert year, in the case of
an entity of government other than the State, end insert pursuant to begin delete Sec. end delete
begin insert Section end insert 1 shall be adjusted as follows:

(a)  begin delete In the event that end delete begin insert If end insert the financial responsibility of providing
services is transferred, in whole or in part, whether by annexation,
incorporation or otherwise, from one entity of government to
another, begin delete then end delete begin insert then, end insert for the begin delete year end delete begin insert fiscal year, or two-year fiscal period
in the case of the State, end insert in which such transfer becomes effective
the appropriations limit of the transferee entity shall be increased
by such reasonable amount as the said entities shall mutually agree
begin insert to end insert and the appropriations limit of the transferor entity shall be
decreased by the same amount.

(b)  begin delete In the event that end delete begin insert If end insert the financial responsibility of providing
services is transferred, in whole or in part, from an entity of
government to a private entity, or the financial source for the
provision of services is transferred, in whole or in part, from other
revenues of an entity of government, to regulatory licenses, user
charges or user fees, then begin insert , end insert for the begin delete year end delete begin insert fiscal year, or two-year
fiscal period in the case of the State, end insert of begin delete such end delete begin insert that end insert transfer begin insert , end insert the
appropriations limit of such entity of government shall be decreased
accordingly.

(c) (1)  begin delete In the event end delete begin insert If end insert an emergency is declared by the legislative
body of an entity of government, the appropriations limit of the
affected entity of government may be exceeded provided that the
appropriations limits in the following begin delete three years end delete begin insert two fiscal periods,
in the case of the State, or three fiscal years, in the case of the
local government, end insert are reduced accordingly to prevent an aggregate
increase in appropriations resulting from the emergency.

(2)  begin delete In the event end delete begin insert If end insert an emergency is declared by the Governor,
appropriations approved by a two-thirds vote of the legislative
body of an affected entity of government to an emergency account
for expenditures relating to that emergency shall not constitute
appropriations subject to limitation. As used in this paragraph,
“emergency” means the existence, as declared by the Governor,
of conditions of disaster or of extreme peril to the safety of persons
and property within the State, or parts thereof, caused by such
conditions as attack or probable or imminent attack by an enemy
of the United States, fire, flood, drought, storm, civil disorder,
earthquake, or volcanic eruption.

begin insert

begin insert Ninth-- end insert   

end insert

begin insert That Section 6 of Article XIII B thereof is amended to
read: end insert

SEC. 6.  

(a) Whenever the Legislature or any state agency
mandates a new program or higher level of service on any local
government, the State shall provide a subvention of funds to
reimburse that local government for the costs of the program or
increased level of service, except that the Legislature may, but
need not, provide a subvention of funds for the following mandates:

(1) Legislative mandates requested by the local agency affected.

(2) Legislation defining a new crime or changing an existing
definition of a crime.

(3) Legislative mandates enacted begin delete prior to end delete begin insert before end insert January 1,
1975, or executive orders or regulations initially implementing
legislation enacted begin delete prior to end delete begin insert before end insert January 1, 1975.

(4) Legislative mandates contained in statutes within the scope
of paragraph (7) of subdivision (b) of Section 3 of Article I.

(b) (1) Except as provided in paragraph (2), for the 2005-06
fiscal year and every subsequent fiscal begin delete year, end delete begin insert year end insert begin insert through the
2018-19 fiscal year, and for the 2019-21 fiscal period and every
subsequent two-year fiscal period, end insert for a mandate for which the
costs of a local government claimant have been determined in a
preceding fiscal year begin insert or two-year fiscal period, as applicable end insert to
be payable by the State pursuant to law, the Legislature shall either
appropriate, in the begin delete annual end delete Budget Act, the full payable amount
that has not been previously paid, or suspend the operation of the
mandate for the begin delete fiscal year end delete begin insert two-year fiscal period end insert for which the
begin delete annual end delete Budget Act begin delete is applicable end delete begin insert applies end insert in a manner prescribed
by law.

(2) Payable claims for costs incurred begin delete prior to end delete begin insert before end insert the 2004-05
fiscal year that have not been paid begin delete prior to end delete begin insert before end insert the 2005-06
fiscal year may be paid over a term of years, as prescribed by law.

(3) Ad valorem property tax revenues shall not be used to
reimburse a local government for the costs of a new program or
higher level of service.

(4) This subdivision applies to a mandate only as it affects a
city, county, city and county, or special district.

(5) This subdivision shall not apply to a requirement to provide
or recognize any procedural or substantive protection, right, benefit,
or employment status of any local government employee or retiree,
or of any local government employee organization, that arises
from, affects, or directly relates to future, current, or past local
government employment and that constitutes a mandate subject
to this section.

(c) A mandated new program or higher level of service includes
a transfer by the Legislature from the State to cities, counties, cities
and counties, or special districts of complete or partial financial
responsibility for a required program for which the State previously
had complete or partial financial responsibility.

begin insert

begin insert Tenth-- end insert   

end insert

begin insert That Section 8 of Article XIII B thereof is amended to
read: end insert

SEC. 8.  

As used in this article and except as otherwise
expressly provided herein:

(a) “Appropriations subject to limitation” of the State means
any authorization to expend during a begin delete fiscal year end delete begin insert two-year fiscal
period end insert the proceeds of taxes levied by or for the State, exclusive
of state subventions for the use and operation of local government
begin delete (other end delete begin insert other end insert than subventions made pursuant to Section begin delete 6) end delete begin insert 6, end insert and
further exclusive of refunds of taxes, benefit payments from
retirement, unemployment insurance, and disability insurance
funds.

(b) “Appropriations subject to limitation” of an entity of local
government means any authorization to expend during a fiscal
year the proceeds of taxes levied by or for that entity and the
proceeds of state subventions to that entity begin delete (other end delete begin insert other end insert than
subventions made pursuant to Section begin delete 6) end delete begin insert 6, end insert exclusive of refunds
of taxes.

(c) “Proceeds of taxes” begin delete shall include, end delete begin insert includes, end insert but begin delete not be end delete begin insert is not end insert
restricted to, all tax revenues and the proceeds to an entity of
begin delete government, end delete begin insert government end insert from (1) regulatory licenses, user charges,
and user fees to the extent that those proceeds exceed the costs
reasonably borne by that entity in providing the regulation, product,
or service, and (2) the investment of tax revenues. With respect to
any local government, “proceeds of taxes” begin delete shall include end delete begin insert includes end insert
subventions received from the State, other than pursuant to Section
6, and, with respect to the State, begin delete proceeds of taxes shall exclude
such end delete begin insert “proceeds of taxes” excludes these end insert subventions.

(d) “Local government” means any city, county, city and county,
school district, special district, authority, or other political
subdivision of or within the State.

(e) (1) “Change in the cost of living” for the State, a school
district, or a community college district means the percentage
change in California per capita personal income from the preceding
begin delete year. end delete begin insert two-year fiscal period, in the case of the State, or the
preceding fiscal year, in the case of a school district or community
college district. end insert

(2) “Change in the cost of living” for an entity of local
government, other than a school district or a community college
district, shall be either (A) the percentage change in California per
capita personal income from the preceding year, or (B) the
percentage change in the local assessment roll from the preceding
year for the jurisdiction due to the addition of local nonresidential
new construction. Each entity of local government shall select its
change in the cost of living pursuant to this paragraph annually by
a recorded vote of the entity’s governing body.

(f)  begin insert (1) end insert begin insert   end insert “Change in population” of any entity of government,
other than the State, a school district, or a community college
district, shall be determined by a method prescribed by the
Legislature.

begin delete

“Change

end delete

begin insert (2) end insert begin insert   end insert begin insert “Change end insert in population” of a school district or a community
college district begin delete shall be end delete begin insert means end insert the percentage change in the average
daily attendance of the school district or begin insert the number of full-time
equivalent students of the end insert community college district from the
preceding fiscal year, as determined by a method prescribed by
the Legislature.

begin delete

“Change

end delete

begin insert (3) end insert begin insert   end insert begin insert “Change end insert in population” of the State shall be determined by
adding (1) the percentage change in the State’s population
multiplied by the percentage of the State’s budget in the begin delete prior fiscal
year end delete begin insert preceding two-year fiscal period end insert that is expended for other
than educational purposes for kindergarten and grades one to 12,
inclusive, and the community colleges, and (2) the percentage
change in the total statewide average daily attendance in
kindergarten and grades one to 12, inclusive, and the begin insert number of
full-time equivalent students of the end insert community colleges, multiplied
by the percentage of the State’s budget in the begin delete prior fiscal year end delete
begin insert preceding two-year fiscal period end insert that is expended for educational
purposes for kindergarten and grades one to 12, inclusive, and the
community colleges.

begin delete

Any

end delete

begin insert (4) end insert begin insert   end insert begin insert Any end insert determination of population pursuant to this subdivision,
other than that measured by average daily begin delete attendance, end delete begin insert attendance
or the number of full-time equivalent students, end insert shall be revised, as
necessary, to reflect the periodic census conducted by the United
States Department of Commerce, or successor department.

(g) “Debt service” means appropriations required to pay the
cost of interest and redemption charges, including the funding of
any reserve or sinking fund required in connection therewith, on
indebtedness existing or legally authorized as of January 1, 1979,
or on bonded indebtedness thereafter approved according to law
by a vote of the electors of the issuing entity voting in an election
for that purpose.

(h) The “appropriations limit” of each entity of government for
each fiscal year begin insert or two-year fiscal period, as applicable, end insert is that
amount begin delete which end delete begin insert that end insert total annual appropriations subject to limitation
may not exceed under Sections 1 and 3. However, the
“appropriations limit” of each entity of government for begin insert the 1978-79 end insert
fiscal year begin delete 1978-79 end delete is the total of the appropriations subject to
limitation of the entity for that fiscal year. For begin insert the 1978-79 end insert fiscal
begin delete year 1978-79, end delete begin insert year, end insert state subventions to local governments,
exclusive of federal grants, are deemed to have been derived from
the proceeds of state taxes.

(i) Except as otherwise provided in Section 5, “appropriations
subject to limitation” do not include local agency loan funds or
indebtedness funds, investment (or authorizations to invest) funds
of the State, or of an entity of local government in accounts at
banks or savings and loan associations or in liquid securities.

begin insert

(j) For purposes of the 2019-21 fiscal period, “preceding
two-year fiscal period,” as used in this section, means the 2017-18
and 2018-19 fiscal years.

end insert

begin insert

begin insert Eleventh-- end insert   

end insert

begin insert That Section 10.5 of Article XIII B thereof is
amended to read: end insert

SEC. 10.5.  

begin insert (a) end insert begin insert   end insert For fiscal years beginning on or after July 1,
1990, the appropriations limit of each entity of government shall
be the appropriations limit for the 1986-87 fiscal begin delete year end delete begin insert year, end insert
adjusted for the changes made from that fiscal year pursuant to
this article, as amended by the measure adding this section, adjusted
for the changes required by Section 3.

begin insert

(b) In the case of the State, for the two-year fiscal period
commencing on July 1, 2019, the appropriations limit shall be the
aggregate of the appropriations limits for the 2017-18 and
2018-19 fiscal years, adjusted for the changes made pursuant to
this article and adjusted for the changes required by Section 3.

end insert

begin insert

begin insert Twelfth-- end insert   

end insert

begin insert That Section 14 is added to Article XIII B thereof,
to read: end insert

begin insert

begin insert SEC. 14. end insert   

State subventions provided during a two-year fiscal
period commencing on or after July 1, 2019, to an entity of local
government shall be applied to an appropriate fiscal year as
specified by statute, for purposes of determining appropriations
subject to limitation for that entity.

end insert

begin insert

begin insert Thirteenth-- end insert   

end insert

begin insert That Section 8 of Article XVI thereof is amended
to read: end insert

SEC. 8.  

(a) From all state revenues there shall first be set apart
the moneys to be applied by the State for support of the public
school system and public institutions of higher education.

(b)  begin delete Commencing with the 1990-91 fiscal year, end delete begin insert For the 2019-21
fiscal period and each subsequent two-year fiscal period, end insert the
moneys to be applied by the State for the support of school districts
and community college districts shall be not less than the greater
of the following amounts:

(1) The amount begin delete which, end delete begin insert that, end insert as a percentage of General Fund
revenues begin delete which end delete begin insert that end insert may be appropriated pursuant to Article XIII B,
equals the percentage of General Fund revenues appropriated for
school districts and community college districts, respectively, in
begin delete fiscal year 1986-87. end delete begin insert the 1986-87 fiscal year. end insert

(2) The amount required to ensure that the total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated pursuant to Article XIII B and
allocated local proceeds of taxes shall not be less than the total
amount from these sources in the prior begin delete fiscal year, end delete begin insert two-year fiscal
period, end insert excluding any revenues allocated pursuant to subdivision
(a) of Section 8.5, adjusted for changes in enrollment and adjusted
for the change in the cost of living pursuant to paragraph (1) of
subdivision (e) of Section 8 of Article XIII B. This paragraph shall
be operative only in a begin delete fiscal year end delete begin insert two-year fiscal period end insert in which
the percentage growth in California per capita personal income is
less than or equal to the percentage growth in per capita General
Fund revenues plus begin delete one half end delete begin delete of one end delete begin insert one-half of 1 end insert percent. begin insert For
purposes of the 2019-21 fiscal period, “prior two-year fiscal
period,” as used in this paragraph and paragraph (3), means the
2017-18 and 2018-19 fiscal years. end insert

(3) (A) The amount required to ensure that the total allocations
to school districts and community college districts from General
Fund proceeds of taxes appropriated pursuant to Article XIII B
and allocated local proceeds of taxes shall equal the total amount
from these sources in the prior begin delete fiscal year, end delete begin insert two-year fiscal period, end insert
excluding any revenues allocated pursuant to subdivision (a) of
Section 8.5, adjusted for changes in enrollment and adjusted for
the change in per capita General Fund revenues.

(B) In addition, an amount equal to one-half of begin delete one end delete begin insert 1 end insert percent
times the prior begin delete year end delete begin insert two-year fiscal period end insert total allocations to
school districts and community begin delete colleges end delete begin insert college districts end insert from
General Fund proceeds of taxes appropriated pursuant to Article
XIII B and allocated local proceeds of taxes, excluding any
revenues allocated pursuant to subdivision (a) of Section 8.5,
adjusted for changes in enrollment.

(C) This paragraph begin delete (3) end delete shall be operative only in a begin delete fiscal year end delete
begin insert two-year fiscal period end insert in which the percentage growth in California
per capita personal income in a begin delete fiscal year end delete begin insert two-year fiscal period end insert
is greater than the percentage growth in per capita General Fund
revenues plus begin delete one half of one end delete begin insert one-half of 1 end insert percent.

(c) In any begin delete fiscal year, end delete begin insert two-year fiscal period, end insert if the amount
computed pursuant to paragraph (1) of subdivision (b) exceeds the
amount computed pursuant to paragraph (2) of subdivision (b) by
a difference that exceeds begin delete one and one-half end delete begin insert 1 end insert begin insert 1⁄2 end insert percent of General
Fund revenues, the amount in excess of begin delete one and one-half end delete begin insert 1 end insert begin insert 1⁄2 end insert
percent of General Fund revenues shall not be considered
allocations to school districts and community begin delete colleges end delete begin insert college
districts end insert for purposes of computing the amount of state aid pursuant
to paragraph (2) or begin delete 3 end delete begin insert (3) end insert of subdivision (b) in the subsequent begin delete fiscal
year. end delete begin insert two-year fiscal period. end insert

(d) In any begin delete fiscal year end delete begin insert two-year fiscal period end insert in which school
districts and community college districts are allocated funding
pursuant to paragraph (3) of subdivision (b) or pursuant to
subdivision begin delete (h), end delete begin insert (g), end insert they shall be entitled to a maintenance factor,
equal to the difference between (1) the amount of General Fund
moneys begin delete which end delete begin insert that end insert would have been appropriated pursuant to
paragraph (2) of subdivision (b) if that paragraph had been
operative or the amount of General Fund moneys begin delete which end delete begin insert that end insert would
have been appropriated pursuant to subdivision (b) had subdivision
(b) not been suspended, and (2) the amount of General Fund
moneys actually appropriated to school districts and community
college districts in that begin delete fiscal year. end delete begin insert two-year fiscal period. end insert

(e) The maintenance factor for school districts and community
college districts determined pursuant to subdivision (d) shall be
adjusted begin delete annually end delete begin insert each two-year fiscal period end insert for changes in
enrollment, and adjusted for the change in the cost of living
pursuant to paragraph (1) of subdivision (e) of Section 8 of Article
XIII B, until it has been allocated in full. The maintenance factor
shall be allocated in a manner determined by the Legislature in
each begin delete fiscal year end delete begin insert two-year fiscal period end insert in which the percentage
growth in per capita General Fund revenues exceeds the percentage
growth in California per capita personal income. The maintenance
factor shall be reduced each begin delete year end delete begin insert two-year fiscal period end insert by the
amount allocated by the Legislature in that begin delete fiscal year. end delete begin insert two-year
fiscal period. end insert The minimum maintenance factor amount to be
allocated in a begin delete fiscal year end delete begin insert two-year fiscal period end insert shall be equal to
the product of General Fund revenues from proceeds of taxes and
one-half of the difference between the percentage growth in per
capita General Fund revenues from proceeds of taxes and in
California per capita personal income, not to exceed the total dollar
amount of the maintenance factor. begin insert The adjustments and repayment
shall also include the maintenance factors, if any, determined
pursuant to subdivision (d) before end insert begin insert December 3, 2018. end insert

(f) For purposes of this section, “changes in enrollment” shall
be measured by the percentage change in average daily attendance.
However, in any begin delete fiscal year, end delete begin insert two-year fiscal period, end insert there shall be
no adjustment for decreases in enrollment between the prior begin delete fiscal
year end delete begin insert two-year fiscal period end insert and the current begin delete fiscal year end delete begin insert two-year
fiscal period end insert unless there have been decreases in enrollment
between the second prior begin delete fiscal year end delete begin insert two-year fiscal period end insert and
the prior begin delete fiscal year and between the third prior fiscal year and the
second prior fiscal year. end delete begin insert two-year fiscal period. For purposes of
this subdivision, “prior two-year fiscal period,” as applied before
July 1, 2019, is deemed to refer to the average of the enrollments
for two fiscal years, as appropriate. end insert

begin delete

(h)

end delete

begin insert (g) end insert  Subparagraph (B) of paragraph (3) of subdivision (b) may
be suspended for one begin delete year end delete begin insert two-year fiscal period end insert only when made
part of or included within any bill enacted pursuant to Section 12
of Article IV. All other provisions of subdivision (b) may be
suspended for one begin delete year end delete begin insert two-year fiscal period end insert by the enactment
of an urgency statute pursuant to Section 8 of Article IV, provided
that the urgency statute may not be made part of or included within
any bill enacted pursuant to Section 12 of Article IV.

begin insert

begin insert Fourteenth-- end insert   

end insert

begin insert That Section 8.5 of Article XVI thereof is amended
to read: end insert

SEC. 8.5.  

(a) In addition to the amount required to be applied
for the support of school districts and community college districts
pursuant to Section 8, begin delete the Controller shall during each fiscal year end delete
begin insert during each two-year fiscal period the Controller shall end insert transfer
and allocate all revenues available pursuant to paragraph begin delete 1 end delete begin insert (1) end insert of
subdivision (a) of Section 2 of Article XIII B to that portion of the
State School Fund restricted for elementary and high school
purposes, and to that portion of the State School Fund restricted
for community college purposes, respectively, in proportion to the
enrollment in school districts and community college districts
respectively.

(1) With respect to funds allocated to that portion of the State
School Fund restricted for elementary and high school purposes,
no transfer or allocation of funds pursuant to this section shall be
required at any time that the Director of Finance and the
Superintendent of Public Instruction mutually determine that
current annual expenditures per student equal or exceed the average
annual expenditure per student of the 10 states with the highest
annual expenditures per student for elementary and high schools,
and that average class size equals or is less than the average class
size of the 10 states with the lowest class size for elementary and
high schools.

(2) With respect to funds allocated to that portion of the State
School Fund restricted for community college purposes, no transfer
or allocation of funds pursuant to this section shall be required at
any time that the Director of Finance and the Chancellor of the
California Community Colleges mutually determine that current
annual expenditures per student for community colleges in this
State equal or exceed the average annual expenditure per student
of the 10 states with the highest annual expenditures per student
for community colleges.

(b) Notwithstanding begin delete the provisions of end delete Article XIII B, funds
allocated pursuant to this section begin delete shall end delete begin insert do end insert not constitute
appropriations subject to limitation.

(c) From any funds transferred to the State School Fund pursuant
to subdivision (a), the Controller begin delete shall each year end delete begin insert shall, each
two-year fiscal period, end insert allocate to each school district and
community college district an equal amount per enrollment in
school districts from the amount in that portion of the State School
Fund restricted for elementary and high school purposes and an
equal amount per enrollment in community college districts from
that portion of the State School Fund restricted for community
college purposes.

(d) All revenues allocated pursuant to subdivision (a) shall be
expended solely for the purposes of instructional improvement
and accountability as required by law.

(e) Any school district maintaining an elementary or secondary
school shall develop and cause to be prepared an annual audit
accounting for such funds and shall adopt a School Accountability
Report Card for each school.

begin insert

begin insert Fifteenth-- end insert   

end insert

begin insert That Section 20 of Article XVI thereof is amended
to read: end insert

SEC. 20.  

(a) (1) The Budget Stabilization Account is hereby
created in the General Fund.

(2) For the begin delete 2015-16 fiscal year and each fiscal year end delete begin insert 2019-21
fiscal period and each two-year fiscal period end insert thereafter, based on
the Budget Act for the begin delete fiscal year, end delete begin insert two-year fiscal period, end insert the
Controller shall transfer from the General Fund to the Budget
Stabilization Account, no later than October begin delete 1, end delete begin insert 1 of the second
year of the two-year fiscal period, end insert a sum equal to 1.5 percent of
the estimated amount of General Fund revenues for that begin delete fiscal year. end delete
begin insert two-year fiscal period. end insert

(b) (1) For the begin delete 2015-16 fiscal year and each fiscal year end delete begin insert 2019-21
fiscal period and each two-year fiscal period end insert thereafter, based on
the Budget Act for the begin delete fiscal year, end delete begin insert two-year fiscal period, end insert the
Department of Finance shall provide to the Legislature all of the
following information:

(A) An estimate of the amount of General Fund proceeds of
taxes that may be appropriated pursuant to Article XIII B for that
begin delete fiscal year. end delete begin insert two-year fiscal period. end insert

(B) (i) An estimate of that portion of the General Fund proceeds
of taxes identified in subparagraph (A) that is derived from personal
income taxes paid on net capital gains.

(ii) The portion of the estimate in clause (i) that exceeds 8
percent of the estimate made under subparagraph (A).

(C) That portion of the state’s funding obligation under Section
8 that results from including the amount calculated under clause
(ii) of subparagraph (B), if any, as General Fund proceeds of taxes.

(D) The amount of any appropriations described in clause (ii)
of subparagraph (B) of paragraph (1) of, or subparagraph (C) of
paragraph (2) of, subdivision (c), that are made from the revenues
described in clause (ii) of subparagraph (B) of this paragraph.

(E) The amount resulting from subtracting the combined values
calculated under subparagraphs (C) and (D) from the value
calculated under clause (ii) of subparagraph (B). If less than zero,
the amount shall be considered zero for this purpose.

(F) The lesser of the amount calculated under subparagraph (E)
or the amount of transfer resulting in the balance in the Budget
Stabilization Account reaching the limit specified in subdivision
(e).

(2) In the begin delete 2016-17 fiscal year, with respect to the 2015-16 fiscal
year only, and in the 2017-18 fiscal year and each fiscal year
thereafter, separately with respect to each of the two next preceding
fiscal years, end delete begin insert 2019-21 fiscal period and each two-year fiscal period
thereafter, separately with respect to each of the two next preceding
two-year fiscal periods, end insert the Department of Finance shall calculate
all of the following, using the same methodology used for the
relevant begin delete fiscal year, end delete begin insert two-year end insert begin insert fiscal period end insert and provide those
calculations to the Legislature:

(A) An updated estimate of the amount of General Fund
proceeds of taxes that may be appropriated pursuant to Article
XIII B.

(B) (i) An updated estimate of that portion of the General Fund
proceeds of taxes identified in subparagraph (A) that is derived
from personal income taxes paid on net capital gains.

(ii) That portion of the updated estimate in clause (i) that exceeds
8 percent of the updated estimate made under subparagraph (A).

(C) The updated calculation of that portion of the state’s funding
obligation under Section 8 that results from including the updated
amount calculated under clause (ii) of subparagraph (B), if any,
as General Fund proceeds of taxes.

(D) The amount of any appropriations described in clause (ii)
of subparagraph (B) of paragraph (1) of, or subparagraph (C) of
paragraph (2) of, subdivision (c), that are made from the revenues
described in clause (ii) of subparagraph (B) of paragraph (1).

(E) The amount resulting from subtracting the combined values
calculated under subparagraphs (C) and (D) from the value
calculated under clause (ii) of subparagraph (B). If less than zero,
the amount shall be considered zero for this purpose.

(F) The amount previously transferred for the begin delete fiscal year end delete
begin insert two-year fiscal period end insert by the Controller from the General Fund to
the Budget Stabilization Account pursuant to subdivisions (c) and
(d).

(G) The lesser of (i) the amount, not less than zero, resulting
from subtracting, from the amount calculated under subparagraph
(E), the value of any suspension or reduction of transfer pursuant
to paragraph (1) of subdivision (a) of Section 22 previously
approved by the Legislature for the relevant begin delete fiscal year, end delete begin insert two-year
fiscal period, end insert and the amount previously transferred for that begin delete fiscal
year end delete begin insert two-year fiscal period end insert by the Controller as described in
subparagraph (F), or (ii) the amount of transfer resulting in the
balance in the Budget Stabilization Account reaching the limit as
specified in subdivision (e).

(c) (1) (A) By October 1 of the begin delete 2015-16 fiscal year and each
fiscal year end delete begin insert second year of the 2019-21 fiscal period and each
two-year fiscal period end insert thereafter to the begin delete 2029-30 fiscal year, end delete
begin insert 2029-31 fiscal period, end insert inclusive, based on the estimates set forth
in the begin delete annual end delete Budget Act pursuant to paragraphs (2) and (3) of
subdivision (h), and the sum identified in paragraph (2) of
subdivision (a), the Controller shall transfer amounts from the
General Fund and the Budget Stabilization Account, pursuant to
a schedule provided by the Director of Finance, as provided in
subparagraph (B).

(B) Notwithstanding any other provision of this section, in the
begin delete fiscal year end delete begin insert two-year fiscal period end insert to which the Budget Act
identified in subparagraph (A) applies:

(i) Fifty percent of both the amount identified in paragraph (2)
of subdivision (a), and the amount resulting from subtracting the
value calculated under subparagraph (C) of paragraph (1) of
subdivision (b) from the value calculated under clause (ii) of
subparagraph (B) of paragraph (1) of subdivision (b), shall be
transferred from the General Fund to the Budget Stabilization
Account.

(ii) The remaining 50 percent shall be appropriated by the
Legislature for one or more of the following obligations and
purposes:

(I) Unfunded prior fiscal year General Fund obligations pursuant
to Section 8 that existed on July 1, 2014.

(II) Budgetary loans to the General Fund, from funds outside
the General Fund, that had outstanding balances on January 1,
2014.

(III) Payable claims for mandated costs incurred begin delete prior to end delete begin insert before end insert
the 2004-05 fiscal year that have not yet been paid, and that
pursuant to paragraph (2) of subdivision (b) of Section 6 of Article
XIII B are permitted to be paid over a term of years, as prescribed
by law.

(IV) Unfunded liabilities for state-level pension plans and
prefunding other postemployment benefits, in excess of current
base amounts as established for the begin delete fiscal year end delete begin insert two-year fiscal
period end insert in which the funds would otherwise be transferred to the
Budget Stabilization Account. For the purpose of this subclause,
current base amounts are those required to be paid pursuant to law,
an approved memorandum of understanding, benefit schedules
established by the employer or entity authorized to establish those
contributions for employees excluded or exempted from collective
bargaining, or any combination of these. To qualify under this
subclause, the appropriation shall supplement and not supplant
funding that would otherwise be made available to pay for the
obligations described in this subclause for the begin delete fiscal year end delete begin insert two-year
fiscal period end insert or the subsequent begin delete fiscal year. end delete begin insert two-year fiscal period. end insert

(2) (A) By October 1 of the begin delete 2030-31 fiscal year and each fiscal
year end delete begin insert second year of the 2031-33 fiscal period and each two-year
fiscal period end insert thereafter, based on the estimates set forth in the
begin delete annual end delete Budget Act pursuant to paragraphs (2) and (3) of
subdivision (h), the Controller shall transfer amounts from the
General Fund to the Budget Stabilization Account, pursuant to a
schedule provided by the Director of Finance, as provided in
subparagraph (B).

(B) In the begin delete fiscal year end delete begin insert two-year fiscal period end insert to which the Budget
Act identified in subparagraph (A) applies, both the amount
identified in paragraph (2) of subdivision (a), and the amount
resulting from subtracting the value calculated under subparagraph
(C) of paragraph (1) of subdivision (b) from the value calculated
under clause (ii) of subparagraph (B) of paragraph (1) of
subdivision (b), shall be transferred from the General Fund to the
Budget Stabilization Account.

(C) Notwithstanding any other provision of this section, the
Legislature may appropriate up to 50 percent of both the amount
identified in paragraph (2) of subdivision (a), and of the amount
resulting from subtracting the value calculated under subparagraph
(C) of paragraph (1) of subdivision (b) from the value calculated
under clause (ii) of subparagraph (B) of paragraph (1) of
subdivision (b), for one or more of the obligations and purposes
described in clause (ii) of subparagraph (B) of paragraph (1).

(3) The transfers described in this subdivision are subject to
suspension or reduction pursuant to paragraph (1) of subdivision
(a) of Section 22.

(d) By October 1 of the begin delete 2016-17 fiscal year and each fiscal year end delete
begin insert second year of the 2019-21 fiscal period and each two-year fiscal
period end insert thereafter, based on the estimates set forth in the begin delete annual end delete
begin insert biennial end insert Budget Act pursuant to paragraphs (4) and (5) of
subdivision (h), the Controller shall transfer amounts between the
General Fund and the Budget Stabilization Account pursuant to a
schedule provided by the Director of Finance, as follows:

(1) If the amount in subparagraph (G) of paragraph (2) of
subdivision (b) is greater than zero, transfer that amount from the
General Fund to the Budget Stabilization Account, subject to any
suspension or reduction of this transfer pursuant to paragraph (1)
of subdivision (a) of Section 22.

(2) If the amount described in subparagraph (F) of paragraph
(2) of subdivision (b) is greater than the amount calculated under
subparagraph (E) of paragraph (2) of subdivision (b), transfer that
excess amount from the Budget Stabilization Account back to the
General Fund.

(e) Notwithstanding any other provision of this section, the
amount of a transfer to the Budget Stabilization Account pursuant
to paragraph (2) of subdivision (a) and subdivisions (c) and (d) for
any begin delete fiscal year end delete begin insert two-year fiscal period end insert shall not exceed an amount
that would result in a balance in the account that, when the transfer
is made, exceeds 10 percent of the amount of General Fund
proceeds of taxes for the begin delete fiscal year end delete begin insert two-year fiscal period end insert
estimated pursuant to subdivision (b). For any begin delete fiscal year, end delete begin insert two-year
fiscal period, end insert General Fund proceeds of taxes that, but for this
paragraph, would have been transferred to the Budget Stabilization
Account may be expended only for infrastructure, as defined by
Section 13101 of the Government Code, as that section read on
January 1, 2014, including deferred maintenance begin delete thereon. end delete begin insert on
infrastructure. end insert

(f) The funds described in subdivision (b) as General Fund
proceeds of taxes are General Fund proceeds of taxes for purposes
of Section 8 for the begin delete fiscal year end delete begin insert two-year fiscal period end insert to which
those proceeds are attributed, but are not deemed to be additional
General Fund proceeds of taxes on the basis that the funds are
thereafter transferred from the Budget Stabilization Account to
the General Fund.

(g) The Controller may begin delete utilize end delete begin insert use end insert funds in the Budget
Stabilization Account, that he or she determines to currently be
unnecessary for begin delete the end delete purposes of this section, to help manage
General Fund daily cashflow needs. Any use pursuant to this
subdivision shall not interfere with the purposes of the Budget
Stabilization Account.

(h) The begin delete annual end delete Budget Act shall include the estimates described
in all of the following:

(1) Paragraph (2) of subdivision (a).

(2) Clause (ii) of subparagraph (B) of paragraph (1) of
subdivision (b).

(3) Subparagraph (F) of paragraph (1) of subdivision (b).

(4) Clause (ii) of subparagraph (B) of paragraph (2) of
subdivision (b).

(5) Subparagraph (G) of paragraph (2) of subdivision (b).

begin insert

begin insert Sixteenth-- end insert   

end insert

begin insert That Section 21 of Article XVI thereof is amended
to read: end insert

SEC. 21.  

(a) The Public School System Stabilization Account
is hereby created in the General Fund.

(b) On or before October 1 of begin delete each fiscal year, end delete begin insert the second year
of each two-year fiscal period, end insert commencing with the begin delete 2015-16
fiscal year, end delete begin insert 2019-21 fiscal period, end insert based on the amounts identified
in the begin delete annual end delete Budget Act pursuant to subdivision (b) of Section
20, the Controller shall transfer, pursuant to a schedule provided
by the Director of Finance, amounts from the General Fund to the
Public School System Stabilization Account as follows:

(1) (A) For the begin delete 2015-16 fiscal year, and for each fiscal year end delete
begin insert 2019-21 fiscal period, and for each two-year fiscal period end insert
thereafter, any positive amount identified in subparagraph (C) of
paragraph (1) of subdivision (b) of Section 20 shall be transferred
from the General Fund to the Public School System Stabilization
Account in the amount calculated under subparagraph (B), subject
to any reduction or suspension of this transfer pursuant to any other
provision of this section or paragraph (3) of subdivision (a) of
Section 22.

(B) The Director of Finance shall calculate the amount by which
the positive amount identified in subparagraph (C) of paragraph
(1) of subdivision (b) of Section 20, in combination with all other
moneys required to be applied by the State for the support of school
districts and community college districts for that begin delete fiscal year end delete
begin insert two-year fiscal period end insert pursuant to Section 8, exceeds the sum of
the total allocations to school districts and community college
districts from General Fund proceeds of taxes appropriated pursuant
to Article XIII B and allocated local proceeds of taxes in the prior
begin delete fiscal year, end delete begin insert two-year fiscal period, end insert plus any allocations from the
Public School System Stabilization Account in the prior begin delete fiscal
year, end delete begin insert two-year fiscal period, end insert less any transfers to the Public School
System Stabilization Account pursuant to this section in the prior
begin delete fiscal year end delete begin insert two-year fiscal period, end insert and any revenues allocated
pursuant to subdivision (a) of Section 8.5, adjusted for the
percentage change in average daily attendance and adjusted for
the higher of the change in the cost of living pursuant to paragraph
(1) of subdivision (e) of Section 8 of Article XIII B or the cost of
living adjustment applied to school district and community college
district general purpose apportionments.

(2) (A) Commencing with the begin delete 2016-17 fiscal year, and for each
fiscal year end delete begin insert 2019-21 fiscal period, and for each two-year fiscal
period end insert thereafter, to the extent the amount calculated under this
paragraph exceeds the amounts previously transferred by the
Controller from the General Fund to the Public School System
Stabilization Account for a begin delete preceding fiscal year, end delete begin insert prior two-year
fiscal period, end insert any positive amount calculated pursuant to
subparagraph (C) of paragraph (2) of subdivision (b) of Section
20 for that begin delete fiscal year end delete begin insert two-year fiscal period end insert shall be transferred
from the General Fund to the Public School System Stabilization
Account in the amount calculated under subparagraph (B), subject
to any reduction or suspension of this transfer pursuant to any other
provision of this section or paragraph (3) of subdivision (a) of
Section 22.

(B) The Director of Finance shall calculate the amount by which
the positive amount identified in subparagraph (C) of paragraph
(2) of subdivision (b) of Section 20, in combination with all other
moneys required to be applied by the State for the support of school
districts and community college districts for that begin delete fiscal year end delete
begin insert two-year fiscal period end insert pursuant to Section 8, exceeds the sum of
the total allocations to school districts and community college
districts from General Fund proceeds of taxes appropriated pursuant
to Article XIII B and allocated local proceeds of taxes in the prior
begin delete fiscal year, end delete begin insert two-year fiscal period, end insert plus any allocations from the
Public School System Stabilization Account in the prior begin delete fiscal
year, end delete begin insert two-year fiscal period, end insert less any transfers to the Public School
System Stabilization Account pursuant to this section in the prior
begin delete fiscal year end delete begin insert two-year fiscal period, end insert and any revenues allocated
pursuant to subdivision (a) of Section 8.5, adjusted for the
percentage change in average daily attendance and adjusted for
the higher of the change in the cost of living pursuant to the
paragraph (1) of subdivision (e) of Section 8 of Article XIII B or
the cost of living adjustment applied to school district and
community college district general purpose apportionments.

(c) Commencing with the begin delete 2016-17 fiscal year, and for each
fiscal year end delete begin insert 2019-21 fiscal period, and for each two-year fiscal
period end insert thereafter, if the amount calculated pursuant to subparagraph
(C) of paragraph (2) of subdivision (b) of Section 20 for a begin delete fiscal
year end delete begin insert two-year fiscal period end insert is less than the amounts previously
transferred by the Controller from the General Fund to the Public
School System Stabilization Account for that begin delete fiscal year, end delete begin insert two-year
fiscal period, end insert the amount of this difference shall be appropriated
and allocated by the State from the Public School System
Stabilization Account for the support of school districts and
community college districts.

(d) Notwithstanding any other provision of this section, the
amount transferred to the Public School System Stabilization
Account pursuant to subdivision (b) for a begin delete fiscal year end delete begin insert two-year
fiscal period end insert shall not exceed the amount by which the amount of
state support calculated pursuant to paragraph (1) of subdivision
(b) of Section 8 exceeds the amount of state support calculated
pursuant to paragraph (2) of subdivision (b) of Section 8 for that
begin delete fiscal year. end delete begin insert two-year fiscal period. end insert If the amount of state support
calculated pursuant to paragraph (1) of subdivision (b) of Section
8 does not exceed the amount of state support calculated pursuant
to paragraph (2) of subdivision (b) of Section 8 for a begin delete fiscal year, end delete
begin insert two-year fiscal period, end insert no amount shall be transferred to the Public
School System Stabilization Account pursuant to subdivision (b)
for that begin delete fiscal year. end delete begin insert two-year fiscal period. end insert

(e) Notwithstanding any other provision of this section, no
amount shall be transferred to the Public School System
Stabilization Account pursuant to subdivision (b) for a begin delete fiscal year end delete
begin insert two-year fiscal period end insert for which a maintenance factor is determined
pursuant to subdivision (d) of Section 8.

(f) Notwithstanding any other provision of this section, no
amount shall be transferred to the Public School System
Stabilization Account pursuant to subdivision (b) until the
maintenance factor determined pursuant to subdivisions (d) and
(e) of Section 8 for fiscal years begin delete prior to end delete begin insert before end insert the 2014-15 fiscal
year has been fully allocated. Transfers may be made beginning
in the begin delete fiscal year end delete begin insert two-year fiscal period end insert following the begin delete fiscal year end delete
begin insert two-year fiscal period end insert in which it is determined, based on the
Budget Act for that begin delete fiscal year, end delete begin insert two-year fiscal period, end insert that this
condition will be met. If a transfer is made for a begin delete fiscal year end delete
begin insert two-year fiscal period end insert for which it is later determined that this
condition has not been met, the amount of the transfer shall be
appropriated and allocated from the Public School System
Stabilization Account for the support of school districts and
community college districts. No transfer shall be made for a begin delete year end delete
begin insert two-year fiscal period end insert for which it was determined, based on the
Budget Act for that begin delete fiscal year, end delete begin insert two-year fiscal period, end insert that this
condition would not be met but was subsequently determined to
have been met in that begin delete year or a prior fiscal year. end delete begin insert two-year fiscal
period or a prior two-year fiscal period. end insert

(g) Notwithstanding any other provision of this section, no
amount shall be transferred to the Public School System
Stabilization Account for any begin delete fiscal year end delete begin insert two-year fiscal period end insert
for which any of the provisions of subdivision (b) of Section 8 are
suspended pursuant to subdivision begin delete (h) end delete begin insert (g) end insert of Section 8.

(h) Notwithstanding any other provision of this section, for any
begin delete fiscal year, end delete begin insert two-year fiscal period end insert the amount of a transfer to the
Public School System Stabilization Account pursuant to
subdivision (b) shall not exceed an amount that would result in a
balance in the account that is in excess of 10 percent of the total
allocations to school districts and community college districts from
General Fund proceeds of taxes appropriated pursuant to Article
XIII B and allocated local proceeds of taxes for that begin delete fiscal year end delete
begin insert two-year fiscal period end insert pursuant to Section 8. For any begin delete fiscal year, end delete
begin insert two-year fiscal period, end insert General Fund proceeds of taxes that, but
for this subdivision, would have been transferred to the Public
School System Stabilization Account shall be applied by the State
for the support of school districts and community colleges.

(i) In any begin delete fiscal year end delete begin insert two-year fiscal period end insert in which the amount
required to be applied by the State for the support of school districts
and community college districts for that begin delete fiscal year end delete begin insert two-year fiscal
period end insert pursuant to Section 8 is less than the total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated pursuant to Article XIII B and
allocated local proceeds of taxes in the prior begin delete fiscal year, end delete begin insert two-year
fiscal period end insert plus any allocations from the Public School System
Stabilization Account in the prior begin delete fiscal year, end delete begin insert two-year fiscal
period, end insert less any transfers to the Public School System Stabilization
Account in the prior begin delete fiscal year end delete begin insert two-year fiscal period end insert and any
revenues allocated pursuant to subdivision (a) of Section 8.5,
adjusted for the percentage change in average daily attendance
and adjusted for the higher of the change in the cost of living
pursuant to paragraph (1) of subdivision (e) of Section 8 of Article
XIII B or the cost of living adjustment applied to school district
and community college district general purpose apportionments,
the amount of the deficiency shall be appropriated and allocated
by the State from the Public School System Stabilization Account
for the support of school districts and community college districts.

(j) Funds transferred to the Public School System Stabilization
Account shall be deemed, for purposes of Section 8, to be moneys
applied by the State for the support of school districts and
community college districts in the begin delete fiscal year end delete begin insert two-year fiscal period end insert
for which the transfer is made, and not in the begin delete fiscal year end delete begin insert two-year
fiscal period end insert in which moneys are appropriated from the account.

(k)  begin delete Nothing in this end delete begin insert This end insert section shall begin insert not end insert be construed to reduce
the amount of the moneys required to be applied by the State for
the support of school districts and community college districts
pursuant to Sections 8 and 8.5.

(l) The Controller may begin delete utilize end delete begin insert use end insert funds in the Public School
System Stabilization begin delete Account, end delete begin insert Account end insert that he or she determines
to currently be unnecessary for the purposes of this section, to help
manage General Fund daily cashflow needs. Any use of funds by
the Controller pursuant to this subdivision shall not interfere with
the purposes of the Public School System Stabilization Account.

begin insert

(m) For purposes of the 2019-21 fiscal period, “prior two-year
fiscal period,” as used in this section, means the 2017-18 and
2018-19 fiscal years.

end insert

begin insert

begin insert Seventeenth-- end insert   

end insert

begin insert That Section 22 of Article XVI thereof is
amended to read: end insert

SEC. 22.  

(a) Upon the Governor’s proclamation declaring a
budget emergency and identifying the conditions constituting the
emergency, the Legislature may pass a bill that does any of the
following:

(1) Suspends or reduces by a specified dollar amount for one
begin delete fiscal year end delete begin insert two-year fiscal period end insert the transfer of moneys from the
General Fund to the Budget Stabilization Account required by
Section 20.

(2) (A) Returns funds that have been transferred to the Budget
Stabilization Account pursuant to Section 20 to the General Fund
for appropriation to address the budget emergency.

(B) Not more than 50 percent of the balance in the Budget
Stabilization Account may be returned to the General Fund for
appropriation pursuant to subparagraph (A) in any begin delete fiscal year, end delete
begin insert two-year fiscal period, end insert unless funds in the Budget Stabilization
Account have been returned to the General Fund for appropriation
in the immediately preceding begin delete fiscal year. end delete begin insert two-year fiscal period.
For purposes of the 2019-21 fiscal period, “immediately preceding
two-year fiscal period,” as used in this subparagraph, means the
2017-18 and 2018-19 fiscal years. end insert

(3) Suspends or reduces by a specified dollar amount for one
begin delete fiscal year end delete begin insert two-year fiscal period end insert the transfer of moneys from the
General Fund to the Public School System Stabilization Account
required by Section 21.

(4) Appropriates funds transferred to the Public School System
Stabilization Account pursuant to Section 21 and allocates those
funds for the support of school districts and community college
districts.

(b) For purposes of this section, “budget emergency” means
any of the following:

(1) An emergency declared by the Governor, within the meaning
of paragraph (2) of subdivision (c) of Section 3 of Article XIII B.

(2) (A) A determination by the Governor that estimated
resources are inadequate to fund General Fund expenditures for
the current or ensuing begin delete fiscal year, end delete begin insert two-year fiscal period, end insert after
setting aside funds for the reserve for liquidation of encumbrances,
at a level equal to the highest amount of total General Fund
expenditures estimated at the time of enactment of any of the three
most recent Budget Acts, adjusted for both of the following:

(i) The annual percentage change in the cost of living for the
State, as measured by the California Consumer Price Index.

(ii) The annual percentage growth in the civilian population of
the State pursuant to subdivision (b) of Section 7901 of the
Government Code.

(B) The maximum amount that may be withdrawn for a budget
emergency determined under this paragraph shall not exceed either
an amount that would result in a total General Fund expenditure
level for a begin delete fiscal year end delete begin insert two-year fiscal period end insert that is greater than
the highest amount of total General Fund expenditures estimated
at the time of enactment of any of the three most recent Budget
Acts, as calculated pursuant to subparagraph (A), or any limit
imposed by subparagraph (B) of paragraph (2) of subdivision (a).

begin insert

begin insert Eighteenth-- end insert   

end insert

begin insert That Section 2 of Article XIX B thereof is amended
to read: end insert

SEC. 2.  

(a) For the begin delete 2003-04 fiscal year and each fiscal year end delete
begin insert 2019-21 fiscal period and each two-year fiscal period end insert thereafter,
all revenues that are collected during the begin delete fiscal year end delete begin insert two-year fiscal
period end insert from taxes under the Sales and Use Tax Law (Part 1
(commencing with Section 6001) of Division 2 of the Revenue
and Taxation Code), or any successor to that law, upon the sale,
storage, use, or other consumption in this State of motor vehicle
fuel, as defined for purposes of the Motor Vehicle Fuel License
Tax Law (Part 2 (commencing with Section 7301) of Division 2
of the Revenue and Taxation Code), shall be deposited into the
Transportation Investment Fund or its successor, which is hereby
created in the State Treasury and which is hereby declared to be
a trust fund. The Legislature may not change the status of the
Transportation Investment Fund as a trust fund.

begin delete

(b) (1) For the 2003-04 to 2007-08 fiscal years, inclusive,
moneys in the Transportation Investment Fund shall be allocated,
upon appropriation by the Legislature, in accordance with Section
7104 of the Revenue and Taxation Code as that section read on
March 6, 2002.

end delete begin delete

(2)

end delete

begin insert (b) end insert  For the begin delete 2008-09 fiscal year and each fiscal year end delete begin insert 2019-21
fiscal period and each two-year fiscal period end insert thereafter, moneys
in the Transportation Investment Fund shall be allocated solely
for the following purposes:

begin delete

(A)

end delete

begin insert (1) end insert  Public transit and mass transportation. Moneys appropriated
for public transit and mass transportation shall be allocated as
follows: (i) Twenty-five percent pursuant to subdivision (b) of
Section 99312 of the Public Utilities Code, as that section read on
July 30, 2009; (ii) Twenty-five percent pursuant to subdivision (c)
of Section 99312 of the Public Utilities Code, as that section read
on July 30, 2009; and (iii) Fifty percent for the purposes of
subdivisions (a) and (b) of Section 99315 of the Public Utilities
Code, as that section read on July 30, 2009.

begin delete

(B)

end delete

begin insert (2) end insert  Transportation capital improvement projects, subject to the
laws governing the State Transportation Improvement Program,
or any successor to that program.

begin delete

(C)

end delete

begin insert (3) end insert  Street and highway maintenance, rehabilitation,
reconstruction, or storm damage repair conducted by cities,
including a city and county.

begin delete

(D)

end delete

begin insert (4) end insert  Street and highway maintenance, rehabilitation,
reconstruction, or storm damage repair conducted by counties,
including a city and county.

(c) For the begin delete 2008-09 fiscal year and each fiscal year end delete begin insert 2019-21
fiscal period and each two-year fiscal period end insert thereafter, moneys
in the Transportation Investment Fund are hereby continuously
appropriated to the Controller without regard to begin delete fiscal years, end delete
begin insert two-year fiscal periods, end insert which shall be allocated as follows:

begin delete

(A)

end delete

begin insert (1) end insert  Twenty percent of the moneys for the purposes set forth in
begin delete subparagraph (A) of end delete paragraph begin delete (2) end delete begin insert (1) end insert of subdivision (b).

begin delete

(B)

end delete

begin insert (2) end insert  Forty percent of the moneys for the purposes set forth in
begin delete subparagraph (B) of end delete paragraph (2) of subdivision (b).

begin delete

(C)

end delete

begin insert (3) end insert  Twenty percent of the moneys for the purposes set forth in
begin delete subparagraph (C) of end delete paragraph begin delete (2) end delete begin insert (3) end insert of subdivision (b).

begin delete

(D)

end delete

begin insert (4) end insert  Twenty percent of the moneys for the purposes set forth in
begin delete subparagraph (D) of end delete paragraph begin delete (2) end delete begin insert (4) end insert of subdivision (b).

(d) The Legislature may not enact a statute that modifies the
percentage shares set forth in subdivision (c) until all of the
following have occurred:

(1) The California Transportation Commission has held no less
than four public hearings in different parts of the State to receive
public input about the need for public transit, mass transportation,
transportation capital improvement projects, and street and highway
maintenance;

(2) The California Transportation Commission has published a
report describing the input received at the public hearings and how
the modification to the statutory allocation is consistent with the
orderly achievement of local, regional and statewide goals for
public transit, mass transportation, transportation capital
improvements, and street and highway maintenance in a manner
that is consistent with local general plans, regional transportation
plans, and the California Transportation Plan;

(3) Ninety days have passed since the publication of the report
by the California Transportation Commission.

(4) The statute enacted by the Legislature pursuant to this
subdivision must be by a bill passed in each house of the
Legislature by rollcall vote entered in the journal, two-thirds of
the membership concurring, begin delete provided that end delete begin insert if end insert the bill does not
contain any other unrelated provision and begin delete that end delete begin insert if end insert the revenues
described in subdivision (a) are expended solely for the purposes
set forth in begin delete paragraph (2) of end delete subdivision (b).

(e) (1) An amount equivalent to the total amount of revenues
that were not transferred from the General Fund of the State to the
Transportation Investment Fund, as of July 1, 2007, because of a
suspension of transfer of revenues pursuant to this section as it
read on January 1, 2006, but excluding the amount to be paid to
the Transportation Deferred Investment Fund pursuant to Section
63048.65 of the Government Code, shall be transferred from the
General Fund to the Transportation Investment Fund no later than
June 30, 2016. Until this total amount has been transferred, the
amount of transfer payments to be made in each fiscal year shall
not be less than one-tenth of the total amount required to be
transferred by June 30, 2016. The transferred revenues shall be
allocated solely for the purposes set forth in this section as if they
had been received in the absence of a suspension of transfer of
revenues.

(2) The Legislature may provide by statute for the issuance of
bonds by the state or local agencies, as applicable, that are secured
by the minimum transfer payments required by paragraph (1).
Proceeds from the sale of those bonds shall be allocated solely for
the purposes set forth in this section as if they were revenues
subject to allocation pursuant to paragraph (2) of subdivision (b).

(f) This section constitutes the sole method of allocating,
distributing, and using the revenues described in subdivision (a).
The purposes described in begin delete paragraph (2) of end delete subdivision (b) are the
sole purposes for which the revenues described in subdivision (a)
may be used. The Legislature begin delete may end delete begin insert shall end insert not enact a statute or take
any other action which, permanently or temporarily, does any of
the following:

(1) Transfers, diverts, or appropriates the revenues described
in subdivision (a) for any other purposes than those described in
begin delete paragraph (2) of end delete subdivision (b);

(2) Authorizes the expenditures of the revenues described in
subdivision (a) for any other purposes than those described in
begin delete paragraph (2) of end delete subdivision (b) or;

(3) Borrows or loans the revenues described in subdivision (a),
regardless of whether these revenues remain in the Transportation
Investment Fund or are transferred to another fund or account such
as the Public Transportation Account, a trust fund in the State
Transportation Fund.

(g) For purposes of this article, “mass transportation,” “public
transit” and “mass transit” have the same meanings as “public
transportation.” “Public transportation” means:

(1) (A) Surface transportation service provided to the general
public, complementary paratransit service provided to persons
with disabilities as required by 42 U.S.C. 12143, or similar
transportation provided to people with disabilities or the elderly;
(B) operated by bus, rail, ferry, or other conveyance on a fixed
route, demand response, or otherwise regularly available basis;
(C) generally for which a fare is charged; and (D) provided by any
transit district, included transit district, municipal operator, included
municipal operator, eligible municipal operator, or transit
development board, as those terms were defined in Article 1
begin insert (commencing with Section 99200) end insert of Chapter 4 of Part 11 of
Division 10 of the Public Utilities Code on January 1, 2009, a joint
powers authority formed to provide mass transportation services,
an agency described in subdivision (f) of Section 15975 of the
Government Code, as that section read on January 1, 2009, any
recipient of funds under Sections 99260, 99260.7, 99275, or
subdivision (c) of Section 99400 of the Public Utilities Code, as
those sections read on January 1, 2009, or a consolidated agency
as defined in Section 132353.1 of the Public Utilities Code, as that
section read on January 1, 2009.

(2) Surface transportation service provided by the Department
of Transportation pursuant to subdivision (a) of Section 99315 of
the Public Utilities Code, as that section read on July 30, 2009.

(3) Public transit capital improvement projects, including those
identified in subdivision (b) of Section 99315 of the Public Utilities
Code, as that section read on July 30, 2009.

(h) If the Legislature reduces or repeals the taxes described in
subdivision (a) and adopts an alternative source of revenue to
replace the moneys derived from those taxes, the replacement
revenue shall be deposited into the Transportation Investment
Fund, dedicated to the purposes listed in begin delete paragraph (2) of end delete
subdivision (b), and allocated pursuant to subdivision (c). All other
provisions of this article shall apply to any revenues adopted by
the Legislature to replace the moneys derived from the taxes
described in subdivision (a).

begin insert

begin insert Nineteenth-- end insert   

end insert

begin insert That Section 4 of Article XXXV thereof is
amended to read: end insert

SEC. 4.  

Funds authorized for, or made available to, the institute
shall be continuously appropriated without regard to begin delete fiscal year, end delete
begin insert two-year fiscal period, end insert be available and used only for the purposes
provided in this article, and shall not be subject to appropriation
or transfer by the Legislature or the Governor for any other
purpose.

begin insert

begin insert Twentieth-- end insert   

end insert begin insert

That the amendments set forth in this measure
shall become operative on December 3, 2018. The sections of the
Constitution amended by this measure shall continue in effect as
they read before voter approval of this measure until December
3, 2018.

end insert

begin insert

begin insert Twenty-First-- end insert   

end insert begin insert

The provisions of this measure are severable.
If any provision of this measure or its application is held invalid,
that invalidity shall not affect other provisions or applications that
can be given effect without the invalid provision or application.

end insert

begin delete

First--  

That it is the intent of the Legislature to propose to the
people of the State of California amendments to the California
Constitution that, commencing in 2019, would provide for all of
the following:

(a) The Governor would submit a budget proposal for the next
two-year fiscal period during the first 10 days of the first calendar
year of the biennium of a legislative session.

(b) In the regular session in each odd-numbered year, the
Legislature would do both of the following:

(1) Only consider or act upon the budget bill, other bills
providing for appropriations related to the budget bill, and bills
introduced by a standing committee.

(2) Only conduct hearings for either of the following purposes:

(A) To consider, develop, and adopt the budget for the next
two-year fiscal period.

(B) (i) Oversight of state department operations and state
programs.

(ii) A standing committee of the Legislature would be able to
introduce up to five bills authored by a majority of the standing
committee if the bill would improve state department operations
or state programs deficiencies discussed during an oversight
hearing.

(c) In the regular session of each even-numbered year, the
Legislature would only consider or act upon legislation other than
the budget bill or other bills providing for appropriations related
to the budget bill.

(d) (1) After the budget for the next two-year fiscal period has
been enacted, the Governor would be able to submit budget updates
to the Joint Legislative Budget Committee for its approval.

(2) (A) The Joint Legislative Budget Committee would be able
to approve any budget updates proposed by the Governor to the
enacted budget by a resolution adopted by a majority of the
committee members. A budget update so approved would take
immediate effect as a statute.

(B) The Legislature would be able to pass a bill, approved by
two-thirds of the membership, that makes a change to the enacted
budget without the Governor proposing the change or changes.

(e) (1) The Joint Legislative Budget Committee would be
established to ascertain facts and make recommendations to the
Legislature and to the houses thereof concerning the State Budget,
the revenues and expenditures of the state, and the organization
and functions of the state and its departments, subdivisions, and
agencies.

(2) Each political party represented in each house would, to the
greatest extent possible, be proportionately represented in the Joint
Legislative Budget Committee and the membership of the
committee would be as follows:

(A) Eight members of the Assembly appointed by the Speaker
of the Assembly.

(B) Eight members of the Senate appointed by the Senate
Committee on Rules.

Second--  

That it is the intent of the Legislature that the
amendments to the California Constitution proposed to the people
of the State of California by this measure would not affect any of
the following:

(a) The Legislature’s requirements and deadlines related to
passing a Budget Bill, including, but not limited to, passing a
Budget Bill by June 15.

(b) The Governor’s authority to issue a proclamation declaring
a fiscal emergency and the provisions related thereto.

(c) The requirements to set apart the moneys to be applied for
support of the public school system and public institutions of higher
education, as required by Sections 8 and 8.5 of Article XVI of the
California Constitution.

(d) The requirement to deposit moneys into the Budget
Stabilization Account or the Public School System Stabilization
Account, as required by Sections 20 and 21 of Article XVI of the
California Constitution.

(e) The Legislature’s authority to introduce and adopt urgency
legislation.

(f) The Governor’s authority to call a special session, as
described in subdivision (b) of Section 3 of Article IV of the
California Constitution.

end delete