BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 7X
Author: Ducheny (D)
Amended: 12/18/08
Vote: 21
SENATE FLOOR : Not relevant
ASSEMBLY FLOOR : Not available
SUBJECT : Budget Act of 2008: state and local government
SOURCE : Author
DIGEST : This bill states that it addresses the fiscal
emergency declared by the Governor by proclamation issued
on December 1, 2008, pursuant to the California
Constitution.
Assembly Amendments add provisions that make various
technical changes to existing law necessary to achieve
savings for the 2008-09 budget, as well as ongoing savings.
ANALYSIS :
This bill:
1.Eliminates the existing continuous appropriation to the
State Controller to make open-space (Williamson Act)
subvention payments to counties and several cities.
These payments are made on the basis of acreage under
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open-space contracts and offset, to varying degrees, the
property tax revenue losses to the participating counties
and cities due to reduced assessed value of the
open-space lands. The 2008-09 Budget agreement reduced
these subventions by 10%, and the Budget Act appropriated
$34.7 million from the General Fund (GF) to make these
payments. AB/SB 3 X1 eliminates the Budget Act
appropriation for 2008-09, and this provision eliminates
the back-up continuous appropriation in order to achieve
a savings of $34.7 million annually, starting in 2008-09.
To the extent (if any) that local governments decide to
cancel contracts as a result of the elimination of the
subvention, the state would realize additional GF
savings, starting in about four years as assessed value
on the non-renewed lands gradually is restored to its
full Proposition 13 value and increased property tax
revenues to K-14 Education reduce the state's GF
education funding obligation (assuming that either Test 2
or Test 3 is in effect under Proposition 98 at that
time).
2.Eliminates funding provided to county sheriffs of
specified small and rural counties.
3.Redirects Vehicle License Fee (VLF) revenue currently
allocated to offset Department of Motor Vehicles (DMV)
administrative costs ($360 million). Instead, this bill
requires this amount to be deposited in the Local Agency
Public Safety Account, which is created in the
Transportation Tax Fund. This provision designates the
use of the new account for support of the Citizens'
Option for Public Safety (COPS), Juvenile Justice, and
juvenile probation local government programs. Also
provides for the Legislature to appropriate an equivalent
amount to the DMV from the Motor Vehicle Account in order
to keep the department whole.
4.Includes a $12 increase in the annual vehicle
registration fee for vehicles and specified trailers
beginning April 1, 2009.
5.Specifies that any constitutional amendments approved by
the Legislature in the 2009-2010 First Extraordinary
Session shall be submitted to the voters at the November
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2, 2010 statewide general election.
6.Adds additional special funds to those available for GF
cash-flow borrowing. These provisions would expand the
pool of funds available for cash-flow borrowing by
approximately $2.0 billion. This will make the GF better
able to pay its bills in low cash months without the need
for additional external borrowing. Cash-flow borrowing
is distinct from budgetary borrowing, because it is used
only for short-term cash fluctuations, and does not
itself narrow the budget shortfall.
7.Specifies that enactment of this bill is contingent upon
the enactment of either AB 2 X1 and SB 9 X1, which would
increase state revenues.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
DLW:cm 12/18/08 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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