BILL NUMBER: AB 2564 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 20, 2010
AMENDED IN ASSEMBLY MARCH 25, 2010
INTRODUCED BY Assembly Member Swanson
FEBRUARY 19, 2010
An act to amend Section 13337 of the Government Code,
relating to the state budget. An act to amend Section
13305 of the Government Code, relating to state finance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2564, as amended, Swanson. State budget: tax expenditures.
Existing law requires the Department of Finance to provide an
annual report to the Legislature on tax expenditures, as specified,
no later than September 15 of each year.
This bill would require the Department of Finance to provide the
report described above on February 1 of each year and to provide the
report directly to a Member of the Legislature upon request.
Under existing law, various duties and responsibilities are
imposed upon the Governor and the Department of Finance in connection
with the preparation and submission of the annual State Budget to
the Legislature at each regular session thereof.
This bill would require the budget to include a section that has
specified information relating to tax expenditures, as defined,
including, among other things, a comprehensive list of tax
expenditures exceeding $5,000,000 in annual cost and an estimate or
range of estimates for the state and local revenue loss that results
from tax expenditures.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 13305 of the
Government Code is amended to read:
13305. (a) The department shall provide an annual report to the
Legislature on tax expenditures by no later than September
15 February 1 of each year. The report shall
include each of the following:
(1) A comprehensive list of tax expenditures exceeding five
million dollars ($5,000,000) in annual cost.
(2) The statutory authority for each credit, deduction, exclusion,
exemption, or any other tax benefit as provided by state law.
(3) A description of the legislative intent for each tax
expenditure, if the act adding or amending the expenditure contains
legislative findings and declarations of that intent, or that
legislative intent is otherwise expressed or specified by that act.
(4) The sunset date of each credit, deduction, exclusion,
exemption, or any other tax benefit as provided by state law, if
applicable.
(5) A brief description of the beneficiaries of the credit,
deduction, exclusion, exemption, or other tax benefit as provided by
state law.
(6) An estimate or range of estimates for the state and local
revenue loss for the current fiscal year and the two subsequent
fiscal years. For sales and use tax expenditures, this would include
partial year exemptions and all other tax expenditures when the State
Board of Equalization has obtained that information.
(7) For personal income tax expenditures, the number of taxpayers
affected and returns filed, as applicable, for the most recent tax
year for which full year data is available.
(8) For corporation tax and sales and use tax expenditures, the
number of returns filed or business entities affected, as applicable,
for the most recent tax year for which full year data is available.
(9) A listing of any comparable federal tax benefit, if any.
(10) A description of any tax expenditure evaluation or
compilation of information completed by any state agency since the
last report made under this section.
(b) For purposes of this section, "tax expenditure" means a
credit, deduction, exclusion, exemption, or any other tax benefit as
provided for by the state.
(c) This section shall become operative on January 1, 2007.
(c) In addition to the provision of the report required by
subdivision (a), the report shall be provided directly to a Member of
the Legislature upon request.
SECTION 1. Section 13337 of the Government Code
is amended to read:
13337. (a) The budget required by the State Constitution to be
submitted by the Governor at each regular session of the Legislature
shall be submitted within the first 10 days thereof and shall contain
a complete plan and itemized statement of all proposed expenditures
of the state provided by existing law or recommended by him or her,
and all of its institutions, departments, boards, bureaus,
commissions, officers, employees, and other agencies, and of all
estimated revenues, for the ensuing fiscal year, together with a
comparison, as to each item of revenues and expenditures, with the
actual revenues and expenditures for the last completed fiscal year,
the estimated revenues, and expenditures for the existing fiscal year
and the budgeted revenue and expenditures for the next fiscal year.
(b) (1) The budget shall, in accordance with Chapter 2 (commencing
with Section 41200) of Part 24 of the Education Code, include a
section that specifies the percentages and amounts of General Fund
revenues that must be set aside and applied for the support of school
districts, as defined in Section 41302.5, and community college
districts, as required by subdivision (b) of Section 8 of Article XVI
of the California Constitution.
(2) (A) The budget shall include a section that specifies all of
the following:
(i) A comprehensive list of tax expenditures exceeding five
million dollars ($5,000,000) in annual cost.
(ii) An estimate or range of estimates for the state and local
revenue loss for the current fiscal year and the two subsequent
fiscal years. For sales and use tax expenditures, this would include
partial year exemptions and all other tax expenditures when the State
Board of Equalization has obtained that information.
(iii) For personal income tax expenditures, the number of
taxpayers affected and returns filed, as applicable, for the most
recent tax year for which full year data is available.
(iv) For corporation tax and sales and use tax expenditures, the
number of returns filed or business entities affected, as applicable,
for the most recent tax year for which full year data is available.
(B) For purposes of this paragraph, "tax expenditure" shall have
the same meaning as in Section 13305.
(c) The Governor, or the Department of Finance acting on his or
her behalf, shall make appropriate changes in the budget request to
reflect any modification in the organization or functions of state
government proposed under Article 7.5 (commencing with Section 12080)
of Chapter 1 prior to the passage of the budget.
(d) The Governor's Budget shall be prepared in accordance with
guidelines and instructions adopted by the Department of Finance.
(e) In order to provide meaningful comparisons, the Governor's
Budget shall be prepared in such a manner that the information
presented provides for such comparisons between the fiscal years.
(f) The Department of Finance shall submit to the committee in
each house which considers appropriations and to the Joint
Legislative Budget Committee copies of budget material submitted to
it by agencies pursuant to the provisions of Article 2 (commencing
with Section 13320).
(g) The Governor's Budget shall also include a coding structure
which indicates for each budget entity the categorization of
expenditures and revenues.
(h) Prior to the submission of the Governor's Budget to the
Legislature, the Department of Finance may conduct public hearings
regarding any portion of any budget.
(i) The Governor, or the Department of Finance acting on his or
her behalf, shall, at the same time the Governor's Budget is
submitted to the Legislature, submit to the Legislature copies of the
material for the purposes of subdivision (j).
(j) The Department of Finance shall develop a fiscal information
system which will provide timely and uniform fiscal data needed to
formulate and monitor the budget, including, but not limited to,
online inquiry capacity and the ability to simulate budget
expenditures and forecast revenues. This system may include, among
other things, data on encumbrances and expenditures by line item,
governmental unit, and fund source. The system shall also include
expenditures and encumbrances by program, as required. This system
shall also include a coding structure which indicates the
categorization of expenditures and revenues. This system and the data
shall be available to both the legislative and executive branches.
The system may contain separate programs accessible by only one
branch, designed to provide for distinct application of the data, but
the basic system data shall be available on an equal basis to both
the legislative and executive branches of government.