BILL ANALYSIS Ó SENATE COMMITTEE ON GOVERNANCE AND FINANCE Senator Robert M. Hertzberg, Chair 2015 - 2016 Regular ------------------------------------------------------------------ |Bill No: |SB 1315 |Hearing |4/6/16 | | | |Date: | | |----------+---------------------------------+-----------+---------| |Author: |Bates |Tax Levy: |No | |----------+---------------------------------+-----------+---------| |Version: |3/28/16 |Fiscal: |No | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant|Weinberger | |: | | ----------------------------------------------------------------- Counties: budgets Allows a county that fulfills specified requirements to adopt a final budget without first voting on a recommended budget. Background The County Budget Act spells out the procedures that county officials must follow when adopting an annual budget. The Act requires counties to use a two-step process in which a board of supervisors must annually approve a recommended budget on or before June 30. The recommended budget provides interim authority for county government spending during the period of time after the fiscal year begins on July 1 and before the board of supervisors adopts a final budget, which must happen on or before October 2. The recommended budget must be submitted to the board by either the county administrative officer or county auditor, as designated by the board, on or before June 30 of each year. After receiving the recommended budget, the board must consider it and make any revisions, reductions, or additions. On or before June 30 of each year the board must vote to approve the recommended budget, including the revisions it deems necessary for the purpose of having authority to spend until the budget is adopted. With specified exceptions, a board may make revisions to the recommended budget until a final budget is adopted. SB 1315 (Bates) 3/28/16 Page 2 of ? On or before September 8 of each year, state law requires the board to make the recommended budget available to the public and publish a notice in a newspaper stating that: The recommended budget documents are available to members of the public. On the date stated in the notice, not fewer than 10 days after the recommended budget documents are available, and at a specified time and place, the board will conduct a public hearing on the recommended budget. Any member of the public may appear at the hearing and be heard regarding any item in the recommended budget or for the inclusion of additional items. All proposals for revisions must be submitted in writing to the clerk of the board of supervisors before the close of the public hearing. State law specifies the manner in which a board of supervisors must conduct a hearing on the recommended budget and requires that after the hearing's conclusion, the board must, by resolution, adopt the budget as finally determined not later than October 2 of each year. Orange County officials assert that it is not necessary to require a county board of supervisors to vote on a recommended budget if the county chooses to adopt a final budget before the July 1 start of the fiscal year. They want the Legislature to allow a county board of supervisors that adopts a final budget on or before June 30 to publish a recommended budget without having to take an official action to approve it. Proposed Law Senate Bill 1315 allows a county, in lieu of approving a recommended budget pursuant to state law, to instead direct the publication of a recommended budget for the purposes of conducting a budget hearing without authorizing spending pursuant to the recommended budget until the budget is adopted. To use the budget adoption procedures authorized by SB 1315, a SB 1315 (Bates) 3/28/16 Page 3 of ? county board of supervisors must: Make the recommended budget available to the public on or before May 30. Publish a notice on or before May 30 stating that the recommended budget is available to members of the public and specifying the time and place at which the board will conduct a public hearing on the recommended budget. Conduct a public hearing on the budget on or before June 20. Adopt the budget by resolution after the conclusion of the hearing and not later than June 30. SB 1315 requires that, on or before May 30 of any year in which a board of supervisors uses the budget adoption procedures enacted by the bill, the board must set forth a budget adoption schedule that complies with specified statutory requirements. State Revenue Impact No estimate. Comments 1. Purpose of the bill . In most counties, the recommended budget that a board of supervisors must vote to approve annually by June 30 governs county spending until a final budget is adopted later in the fiscal year. However, if a county adopts a budget before the fiscal year begins, the initial recommended budget never has any practical effect beyond serving as a baseline for the board's deliberations on, and approval of, a final budget. In counties that don't rely on a recommended budget for spending authority, it doesn't make sense to require a separate board of supervisors vote on the recommended budget. SB 1315 creates an alternative budget approval process that allows a county board of supervisors to publish a recommended budget, in lieu of voting on it, if the board adopts a final budget by June 30. SB 1315 does not require any county to alter its current budget process, but simply provides an alternative process that counties can choose. SB 1315 (Bates) 3/28/16 Page 4 of ? 2. Unintended consequences . Although SB 1315 is intended to require a county that uses its alternative procedures to follow existing laws governing the adoption of a final budget. However, its language could be misinterpreted to allow a county to adopt a final budget simply by adopting a resolution, without following most of the requirements that are imposed by current law. To avoid unintended consequences, the Committee may wish to consider amending SB 1315 to specify that, under the alternative process authorized by the bill: A hearing on a recommended budget must be held at least ten days after the recommended budget is made available to the public, and A final budget must be adopted pursuant to all of the statutory requirements that current law imposes on the adoption of a final budget. Support and Opposition (3/31/16) Support : Orange County; Urban Counties of California. Opposition : Unknown. -- END --