California Assembly Bill AB1018 Latest Draft

 BILL NUMBER: AB 1018INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Hill FEBRUARY 27, 2009 An act to amend Sections 13308 and 13337 of, and to add Section 13308.1 to, the Government Code, relating to state finance. LEGISLATIVE COUNSEL'S DIGEST AB 1018, as introduced, Hill. State finance. Existing law requires the Governor to submit to the Legislature, on or before January 10 of each year, a proposed budget for the ensuing fiscal year that shall contain estimates of anticipated state revenues and itemized statements of all proposed expenditures of the state for that fiscal year. Existing law further requires the Director of Finance to submit to the Legislature, on or before May 14 of each year, revised estimates of General Fund revenues for the current fiscal year and the ensuing fiscal year. This bill would require the Governor's proposed budget to also include estimates of revenues and expenditures for the 3 subsequent fiscal years. In addition, the bill would require the Director of Finance to submit to the Legislature revised estimates of revenues and expenditures for the current fiscal year and for the 3 subsequent fiscal years on or before May 14, July 15, and September 15 of each year. For each of those revised estimates, the bill would require the Controller and the Treasurer to review the revised estimates and to submit an assessment of those estimates to the fiscal committees of each house of the Legislature and to the Director of Finance on or before specified dates. 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 13308 of the Government Code is amended to read: 13308. (a) The Director of Finance shall provide to the Legislature, on or before February 1 of each year, all proposed statutory changes, as prepared by the Legislative Counsel, that are necessary to implement the Governor's Budget, as described in subdivision (a) of Section 13337. (b) The Director of Finance shall provide to the Legislature, on or before April 1 of each year, all proposed adjustments to the Governor's Budget except as specified by subdivisions (c) and (d). (c) The Director of Finance shall provide to the Legislature, on or before May 1 of each year, all proposed adjustments to the Governor's Budget in appropriations for capital outlay. (d) The Director of Finance shall provide to the Legislature, on or before May 14 of each year, all of the following: (1)  An estimate   Estimates  of General Fund revenues for the current fiscal year  and   ,  for the ensuing fiscal year  , and for the three subsequent fiscal years  .  The Controller and the Treasurer shall review   the estimates of General Fund revenues for the ensuing fiscal year and for the three subsequent fiscal years and shall jointly submit the following information to the fiscal committees of each house of the Legislature and to the Director of Finance on or before May 31 of each year:  (A) A description of the economic context for the estimates of General Fund revenues, including trends in financial markets and effects on borrowing.   (B) An assessment of the estimates of General Fund revenues and, if significantly different, alternative estimates.   (C) An assessment of the Director of Finance's revised expenditure proposal, focusing primarily on the following:   (i) The impact of changes or anticipated changes to state statutory law, state constitutional law, federal law, and case law.   (ii) The impact of anticipated enrollment and caseload changes, federal mandates, court orders, and related cost factors affecting the estimates.  (2) Any proposals to reduce expenditures to reflect updated revenue estimates. (3) All proposed adjustments to the Governor's Budget that are necessary to reflect updated estimates of state funding required pursuant to Section 8 of Article XVI of the California Constitution, or to reflect caseload enrollment or population changes. (e) The Director of Finance may authorize suspension for the current fiscal year of any provision of this section not sooner than 30 days after notification in writing of the necessity therefor to the chairperson of the committee in each house that considers the State Budget and the Chairperson of the Joint Legislative Budget Committee. SEC. 2. Section 13308.1 is added to the Government Code, to read: 13308.1. (a) The Director of Finance shall provide to the Legislature on July 15 and on September 15 of each year estimates of General Fund revenues and expenditures for the current fiscal year and the three subsequent fiscal years. (1) Each estimate of General Fund revenues required by this subdivision shall describe the assumptions and economic factors affecting the estimate, including all of the following: (A) Actual data and trend information pertaining to average personal income, wages and salaries, taxable sales, the Consumer Price Index, the unemployment rate, housing permits, and population growth. (B) National economic data, including housing starts, the annual percentage change in real Gross Domestic Product, and the per-barrel price of imported crude petroleum. (C) Details behind revenue assumptions for personal income tax, sales and use tax, and corporate tax. Those details shall quantify the impact of economic factors such as stock market performance, real estate trends, capital gains, taxable sales and profits, vehicle sales, and the impact of recent and anticipated changes to federal tax law. (2) Each estimate of General Fund expenditures required by this subdivision shall describe the bases for the estimate, including any recent or anticipated changes to state statutory law, state constitutional law, federal law, and case law, in order to provide a reasonable baseline projection of expenditure patterns for the period of the estimate. The estimate shall also include year-by-year presentations and explanations for all of the following: (A) Prior-year General Fund balances. (B) Total annual revenues, transfers, and expenditures. (C) Yearend General Fund balances. (D) Encumbrances. (E) Reserve amounts. (F) The Budget Stabilization Account. (G) The Special Fund for Economic Uncertainties. (H) Caseload changes, including In-Home Supportive Services caseloads. (I) Population changes, including the inmate population. (J) New or anticipated federal program requirements. (K) New or anticipated court orders. (L) The Debt Service Ratio. (M) Other factors affecting program costs. (N) Underlying Proposition 98 forecast factors, including K-12 average daily attendance, per capita personal income, per capita General Fund, community college full-time equivalent students, and the K-14 cost of living adjustment. (O) Projected General Fund spending identified by major programs, including K-14 Proposition 98 (separated first by General Fund and local property taxes and second by Proposition 98 Quality Education Investment and settle-up), the California State University, the University of California, the Student Aid Commission, Medi-Cal, CalWORKs, Supplemental Security Income/State Supplementary Payments, In-Home Supportive Services, the State Department of Developmental Services, the State Department of Mental Health, the Department of Corrections and Rehabilitation, the judiciary, Proposition 42, debt service on infrastructure bonds, and other major social programs. (b) The Controller and the Treasurer shall review the estimates generated pursuant to subdivision (a) and shall jointly submit the following information to the fiscal committees of each house of the Legislature and to the Director of Finance on or before August 1 of each year, with respect to the July 15 estimates, and on or before October 1, with respect to the September 15 estimates: (1) A description of the economic context for the estimates of General Fund revenues, including trends in financial markets and effects on borrowing. (2) An assessment of the estimates of General Fund revenues and, if significantly different, alternative estimates. (3) An assessment of the Director of Finance's estimates of General Fund expenditures, focusing primarily on the following: (A) The impact of changes or anticipated changes to state statutory law, state constitutional law, federal law, and case law. (B) The impact of anticipated enrollment and caseload changes, federal mandates, court orders, and related cost factors affecting the estimates. SEC. 3. Section 13337 of the Government Code is amended to read: 13337. (a) The budget required by the  State   California  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.  The bud   get shall also contain estimates of revenues and expenditures for the three subsequent fiscal years. The Controller and the Treasurer shall review the estimates of revenues for the next fiscal year and the three subsequent fiscal years and shall jointly submit the following information to the fiscal committees of each house of the Legislature and to the Director of Finance on or before February 1 of each year:   (1) A description of the economic context for the estimates of revenues, including trends in financial markets and effects on borrowing.   (2) An assessment of the estimates of revenues and, if significantly different, alternative estimates.   (3) An assessment of the Director of Finance's revised expenditure proposal, focusing primarily on the following:  (A) The impact of changes or anticipated changes to state statutory law, state constitutional law, federal law, and case law.   (B) The impact of anticipated enrollment and caseload changes, federal mandates, court orders, and related cost factors affecting the estimates.  (b) The budget shall, in accordance with Chapter 2 (commencing with Section 41200) of Part 24 of  Division 3 of Title 2 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. (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   those  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,  on-line   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.