BILL ANALYSIS �
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THIRD READING
Bill No: AB 65
Author: Gatto (D)
Amended: 8/31/11 in Senate
Vote: 21
SENATE ELECTIONS & CONST. AMEND. COMMITTEE : 4-1, 7/5/11
AYES: Correa, La Malfa, De Le�n, Lieu
NOES: Gaines
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : Not relevant
SUBJECT : Elections: statewide ballot pamphlet
SOURCE : Author
DIGEST : This bill, except as specified, requires, if a
fiscal analysis prepared by the Legislative Analyst
determines that a measure would provide an increase in
revenues to fund new or existing programs, that specified
language be added at the end of the "yes" and "no" summary
statement in the ballot pamphlet advising that the revenue
generated by the measure will be forever dedicated to the
purposes specified in the measure unless the measure is
changed by a future measure approved by the voters. This
bill also contains a finding and declaration of the
Legislature that the bill permits or requires additional
information to be included in the ballot pamphlet in
accordance with the provision of the Political Reform Act
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of 1974 described above that authorizes the Legislature to
add information to the ballot pamphlet.
Senate Floor Amendments of 8/31/11 change wording of the
required notice to appear in the ballot pamphlet for
initiatives and deletes the requirement that the notices
appear on initiative petitions.
ANALYSIS : The Political Reform Act of 1974 requires the
Legislative Analyst to prepare an impartial analysis of
each initiative measure to appear on the ballot, and
provides that the Legislative Analyst is solely responsible
for determining the content of the analysis. The Act
requires the Legislative Analyst to prepare an unbiased
fiscal analysis of a measure that is included in the ballot
pamphlet stating whether the measure would increase or
decrease any revenue or cost to state or local government.
Existing law also requires the Legislative Analyst to
prepare for inclusion in the ballot pamphlet a summary
statement regarding the general meaning and effect of "yes"
and "no" votes on each state measure.
The Political Reform Act of 1974, an initiative statute,
generally provides that the Legislature may amend the act
to further the act's purposes upon a two-thirds vote of
each house and compliance with specified procedural
requirements. The Act also provides that, notwithstanding
this requirement, the Legislature may without restriction
amend specified provisions of the act to add to the ballot
pamphlet information regarding candidates or other
information.
This bill provides that if an initiative measure qualifies
for the ballot and the analysis prepared by the Legislative
Analyst determines that the initiative measure would
provide for an increase in revenues to fund new or existing
programs, the Legislative Analyst shall add a paragraph at
the end of the summary statement, stating as follows:
"The following disclaimer is provided pursuant to
Assembly Bill No. 65 of the 2011-12 Regular Session, as
enacted:
Unless changed by a future measure approved by the
voters, the taxpayer dollars generated by this initiative
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will be forever dedicated to the purposes listed in this
initiative, and cannot be spent by the state for any
other purpose."
The above provisions would not apply if the measure
provides that the increase in revenues is to be deposited
without restriction into the General Fund commencing at a
future date after its enactment, or if the initiative
measure allows the Legislature to reallocate the increase
in revenues.
Background
Current Procedure for Determining Initiative Fiscal Impact .
While the DOF and the JLBC are required to prepare the
joint estimate of the fiscal impact on state and local
government that's included in all initiative titles and
summaries submitted to the AG's office, the actual process
differs. When the DOF and JLBC receive notice from the AG
requesting a fiscal analysis, the Legislative Analyst's
Office (LAO) usually always takes the lead and begins the
process of investigative research, including how programs
would be affected and how possible passage and
implementation would impact the state as a whole. Once the
LAO has completed this investigative analysis, the DOF is
then contacted for review and concurrence. After the DOF
has signed off on the LAO's work, the estimate is then
returned to the AG for inclusion in the title and summary.
Initiative Spending . According to the LAO, in recent
years, there have been a number of approved propositions
which have guaranteed that a certain portion of General
Fund spending be dedicated to a specific purpose. These
measures restrict the Legislature's ability to alter the
relative shares of General Fund spending provided to
program areas in any given year. For instance, Proposition
98 of 1988 provided for a minimum level of total spending
(General Fund and local property taxes combined) on K-14
education in any given year. The required General Fund
contribution is roughly 40 percent of the state's budget.
Proposition 49 of 2002 required that the state spend a
certain amount (currently $550 million) on after-school
programs.
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Other States . According to the National Conference of
State Legislatures (NCSL), as of 2006, the following eleven
states have restrictions on the use of the initiative with
regard to appropriations and funding mechanisms.
Alaska - No dedication of revenues or making or repealing
appropriations.
Arizona - If an initiative requires a reduction in
government revenue or a reallocation from currently
funded programs, the initiative text must identify the
program(s) whose funding must be cut or eliminated to
implement the initiative. If the identified revenue
source provided fails in any fiscal year to fund the
entire mandated expenditure for that fiscal year, the
legislature may reduce the expenditure of state revenues
for that purpose in that fiscal year to the amount of
funding supplied by the identified revenue source.
Florida - Measures that propose a tax or fee not in place
in November, 1994 require a two-thirds vote to pass.
Maine - Expenditures in an amount in excess of available
and unappropriated state funds remain inoperative until
45 days after the regular legislative session, unless the
measure provides for raising new revenues adequate for
its operation.
Massachusetts - May not be used to make a specific
appropriation from the treasury. However, if such a law,
approved by the people, is not repealed, the legislature
must raise by taxation or otherwise and appropriate such
money as may be necessary to carry such law into effect.
Mississippi - Sponsor must identify in the text of the
initiative the amount and source of revenue required to
implement the initiative. Initiatives requiring a
reduction in government revenue or a reallocation from
currently funded programs must identify the program(s)
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whose funding must be reduced or eliminated to implement
the initiative.
Missouri - May not appropriate money other than new
revenues created and provided for by the initiative.
Montana - May not appropriate money.
Nebraska - No measure may interfere with the
Legislature's ability to direct taxation of necessary
revenues for the state and its governmental subdivisions.
Nevada - No appropriations or other expenditures of money
unless such statute or amendment also imposes a
sufficient tax or otherwise constitutionally provides for
raising the necessary revenue.
North Dakota - No appropriations for the support and
maintenance of state departments and institutions.
Wyoming - No dedication of revenues or making or
repealing appropriations.
The NCSL further comments that initiative measures which
mandate the expenditures of large amounts of public revenue
without including a new dedicated revenue source (such as
taxes or fees) can make it difficult for the legislature to
continue to fund existing state services and programs. In
addition, initiatives that increase or create new taxes to
fund new or existing programs negatively affect the
legislature's ability to impose reasonable taxes to fund
necessary programs for citizens.
Comments
According to the author, this bill seeks to help create
this better informed citizenry by giving voters more
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information when considering initiatives on the ballot.
With more groups opting to bypass the legislative process
and use initiatives to shape public policy, it becomes more
important to provide the decision makers, voters, with the
most information possible. All too often, voters are
unaware of the intersection between the initiative process
and the budget process. There is a lack of understanding
that revenue streams created via the initiative process are
essentially put into silos, untouchable by the Legislature
during the budget process. Unless these initiatives say
otherwise, the monies go into special funds that cannot be
used for anything but programs specified in the initiative.
This especially comes to light during tough budget times
such as now when the public wonders why the Legislature
simply cannot shift certain monies from special funds into
the state's general fund to help fund. This simple
disclosure would help make clear to voters the possible
outcomes and exactly what is, or is not, possible with
revenue streams created by an initiative. It is in the
best interest of voters to know, up-front, about the
conditions of their approval for such initiatives. Not
only would it help them make more informed decisions at the
ballot box, but it would also give them a better
understanding of the constraints of the budget process,
helping explain why certain funds cannot easily be shifted
to help deal with budget deficits.
Related Legislation
AB 1021 (Gordon) requires additional information be
included in petitions and the ballot pamphlet for
initiatives that result in costs over $1 million but do not
provide for additional funding. (On Senate Third Reading
File)
SCA 4 (DeSaulnier) prohibits an initiative measure that
will result in a net increase in state or local government
costs other than costs attributable to the issuance, sale,
or repayment of bonds, from being submitted to the electors
or having an effect unless and until the Legislative
Analyst and the Director of DOF jointly determine that the
initiative measure provides for additional revenues in an
amount that meets or exceeds the net increase in costs.
(On Senate Third Reading File)
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
DLW:mw 9/1/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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