BILL ANALYSIS Ó
AB 2458
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2458 (Obernolte) - As Amended April 7, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill:
1)Repeals provisions limiting a trial court's carryover reserves
to one percent of the trial court's prior-year budget.
2)Repeals provisions requiring the Judicial Council to set aside
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two percent of the total funds appropriated for trial court
operations to be used for specific trial court allocations,
including unforeseen emergencies, unanticipated expenses for
existing programs, and unavoidable funding shortfalls.
FISCAL EFFECT:
The trial courts and the Judicial Council should realize minor
administrative cost savings from eliminating the reserve
restrictions. There should be no additional trial court costs,
though allowing unrestricted reserves will likely shift some
portion of court spending to future fiscal years.
(In 2013, both the Assembly and Senate Budget Committees voted
to raise the one percent reserve limit to 12 percent, though
this action was ultimately removed during Budget Conference
Committee.)
COMMENTS:
1)Background. The Lockyer-Eisenberg Trial Court Funding Act of
1997, among other things, shifted the responsibility of
funding trial court operations from the counties to the State.
Under the Act, the Judicial Council was authorized to allow
trial courts to carry unexpended funds over from one fiscal
year to the next. The Act did not limit the amount of
reserves that each court could maintain, nor did the Act
proscribe how those reserves could be used. According to the
Judicial Council, trial courts used their reserves funds to
avoid cash-flow problems, address budget reductions, cover
unanticipated cost increases, and plan for future projects.
At the end of the 2011-12 fiscal year, trial courts had
amassed $531 million in reserves statewide.
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Legislation adopted as part of the 2012-13 budget stipulated
that, beginning in 2014-15, each trial court may only retain
reserves of up to one percent of its prior-year operating
budget. The 2012-13 budget also established a statewide court
reserves requiring the Judicial Council to set aside two
percent of the total funds appropriated for trial court
operations in a given year (approximately $27.8 million in
2012-13 and $37.2 million in 2014-15). Trial courts can
petition the Judicial Council for an allocation from this
statewide court reserves to address unforeseen emergencies,
unanticipated expenses for existing programs, or unavoidable
funding shortfalls.
In 2013-14, the Legislature modified the reserves policy to
exempt certain amounts, such as funds set aside to establish
and maintain a children's waiting room, from being calculated
as part of the one percent reserve limit. Additionally, the
2013-14 budget utilized $385 million of existing trial court
reserves to offset General Fund reductions to the courts.
2)Purpose. According to the author, repealing the current court
reserve policies, "[w]ill give trial courts the ability to
better manage ongoing budget shortfalls and invest in
technology that will improve efficiency. These technology
advancements make court operations more cost-effective and
improve customer service. Additionally, eliminating the cap
provides trial courts an incentive to operate more efficiently
because court savings could be used for future purposes."
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081
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