BILL ANALYSIS
SB 7 X1
Page 1
( Without Reference to File )
SENATE THIRD READING
SB 7 X1 (Ducheny)
As Amended December 18, 2008
Majority vote
SENATE VOTE :Vote not relevant
SUMMARY : Makes various technical and statutory changes
necessary to achieve savings for the 2008-09 Budget as well as
ongoing savings. Specifically, 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 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
SB 7 X1
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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 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.
Analysis Prepared by : Adam Dondro / BUDGET / (916) 319-2099
FN: 0000060