Text of Proposed Laws - California

1 Text of Proposed laws Proposition 2 shall be transferred to the account, and may be transferred to the General Fund pursuant to paragraph (2). This amendment Proposed by Assembly Constitutional (2) All other funds transferred to the account in a fiscal year shall Amendment 1 of the 2013 2014 Second Extraordinary Session not be deposited in the sinking fund subaccount and may, by statute, (Resolution Chapter 1, 2013 2014 Second Extraordinary Session) be transferred to the General Fund. expressly amends the California Constitution by adding sections Third That Section 20 is added to Article XVI thereof, to read: thereto and repealing and adding a section thereof; therefore, SEC. 20. (a) (1) The Budget Stabilization Account is hereby existing provisions Proposed to be deleted are printed in strike out created in the General Fund.

2 2 type and new provisions Proposed to be added are printed in italic (2) For the 2015 16 fiscal year and each fiscal year thereafter, based type to indicate that they are new. on the Budget Act for the fiscal year, the Controller shall transfer from the General Fund to the Budget Stabilization Account, no later than Proposed Amendments to Articles IV and XVI October 1, a sum equal to percent of the estimated amount of General Fund revenues for that fiscal year. First That Section is added to Article IV thereof, to read: (b) (1) For the 2015 16 fiscal year and each fiscal year thereafter, SEC. Within 10 days following the submission of a budget based on the Budget Act for the fiscal year, the Department of Finance pursuant to subdivision (a) of Section 12, following the Proposed shall provide to the Legislature all of the following information: adjustments to the Governor's Budget required by subdivision (e) (A) An estimate of the amount of General Fund proceeds of taxes that of Section 13308 of the Government Code or a successor statute, and may be appropriated pursuant to Article XIII B for that fiscal year.

3 Following the enactment of the budget bill, or as soon as feasible (B) (i) An estimate of that portion of the General Fund proceeds of thereafter, the Director of Finance shall submit to the Legislature both taxes identified in subparagraph (A) that is derived from personal of the following: income taxes paid on net capital gains. (a) Estimates of General Fund revenues for the ensuing fiscal year (ii) The portion of the estimate in clause (i) that exceeds 8 percent of and for the three fiscal years thereafter. the estimate made under subparagraph (A). (b) Estimates of General Fund expenditures for the ensuing fiscal (C) That portion of the state's funding obligation under Section 8. year and for the three fiscal years thereafter. that results from including the amount calculated under clause (ii) of Second That Section 20 of Article XVI thereof is repealed.

4 Subparagraph (B), if any, as General Fund proceeds of taxes. SEC. 20. (a) The Budget Stabilization Account is hereby (D) The amount of any appropriations described in clause (ii) of created in the General Fund. subparagraph (B) of paragraph (1) of, or subparagraph (C) of paragraph (b) In each fiscal year as specified in paragraphs (1) to (3), (2) of, subdivision (c), that are made from the revenues described in inclusive, the Controller shall transfer from the General Fund to the clause (ii) of subparagraph (B) of this paragraph. Budget Stabilization Account the following amounts: (E) The amount resulting from subtracting the combined values (1) No later than September 30, 2006, a sum equal to 1 percent calculated under subparagraphs (C) and (D) from the value calculated of the estimated amount of General Fund revenues for the 2006 07 under clause (ii) of subparagraph (B).

5 If less than zero, the amount shall fiscal year. be considered zero for this purpose. (2) No later than September 30, 2007, a sum equal to 2 percent (F) The lesser of the amount calculated under subparagraph (E) or of the estimated amount of General Fund revenues for the 2007 08 the amount of transfer resulting in the balance in the Budget Stabilization fiscal year. Account reaching the limit specified in subdivision (e). (3) No later than September 30, 2008, and annually thereafter, a (2) In the 2016 17 fiscal year, with respect to the 2015 16 fiscal sum equal to 3 percent of the estimated amount of General Fund year only, and in the 2017 18 fiscal year and each fiscal year thereafter, revenues for the current fiscal year. separately with respect to each of the two next preceding fiscal years, the (c) The transfer of moneys shall not be required by subdivision Department of Finance shall calculate all of the following, using the (b) in any fiscal year to the extent that the resulting balance in the same methodology used for the relevant fiscal year, and provide those account would exceed 5 percent of the General Fund revenues calculations to the Legislature: estimate set forth in the budget bill for that fiscal year, as enacted, or (A) An updated estimate of the amount of General Fund proceeds of eight billion dollars ($8,000,000,000), whichever is greater.

6 The taxes that may be appropriated pursuant to Article XIII B. Legislature may, by statute, direct the Controller, for one or more (B) (i) An updated estimate of that portion of the General Fund fiscal years, to transfer into the account amounts in excess of the proceeds of taxes identified in subparagraph (A) that is derived from levels prescribed by this subdivision. personal income taxes paid on net capital gains. (d) Subject to any restriction imposed by this section, funds (ii) That portion of the updated estimate in clause (i) that exceeds 8. transferred to the Budget Stabilization Account shall be deemed to percent of the updated estimate made under subparagraph (A). be General Fund revenues for all purposes of this Constitution. (C) The updated calculation of that portion of the state's funding (e) The transfer of moneys from the General Fund to the Budget obligation under Section 8 that results from including the updated Stabilization Account may be suspended or reduced for a fiscal year amount calculated under clause (ii) of subparagraph (B), if any, as as specified by an executive order issued by the Governor no later General Fund proceeds of taxes.

7 Than June 1 of the preceding fiscal year. (D) The amount of any appropriations described in clause (ii) of (f) (1) Of the moneys transferred to the account in each fiscal subparagraph (B) of paragraph (1) of, or subparagraph (C) of paragraph year, 50 percent, up to the aggregate amount of five billion dollars (2) of, subdivision (c), that are made from the revenues described in ($5,000,000,000) for all fiscal years, shall be deposited in the Deficit clause (ii) of subparagraph (B) of paragraph (1). Recovery Bond Retirement Sinking Fund Subaccount, which is (E) The amount resulting from subtracting the combined values hereby created in the account for the purpose of retiring deficit calculated under subparagraphs (C) and (D) from the value calculated recovery bonds authorized and issued as described in Section , in under clause (ii) of subparagraph (B).

8 If less than zero, the amount shall addition to any other payments provided for by law for the purpose be considered zero for this purpose. of retiring those bonds. The moneys in the sinking fund subaccount (F) The amount previously transferred for the fiscal year by the are continuously appropriated to the Treasurer to be expended for Controller from the General Fund to the Budget Stabilization Account that purpose in the amounts, at the times, and in the manner deemed pursuant to subdivisions (c) and (d). appropriate by the Treasurer. Any funds remaining in the sinking (G) The lesser of (i) the amount, not less than zero, resulting from fund subaccount after all of the deficit recovery bonds are retired subtracting, from the amount calculated under subparagraph (E), the 64 | Text of Proposed laws Text of Proposed laws Proposition 2 Continued value of any suspension or reduction of transfer pursuant to paragraph (d) By October 1 of the 2016 17 fiscal year and each fiscal year (1) of subdivision (a) of Section 22 previously approved by the Legislature thereafter, based on the estimates set forth in the annual Budget Act for the relevant fiscal year, and the amount previously transferred for pursuant to paragraphs (4) and (5) of subdivision (h)

9 , the Controller that fiscal year by the Controller as described in subparagraph (F), or shall transfer amounts between the General Fund and the Budget (ii) the amount of transfer resulting in the balance in the Budget Stabilization Account pursuant to a schedule provided by the Director of Stabilization Account reaching the limit as specified in subdivision (e). Finance, as follows: (c) (1) (A) By October 1 of the 2015 16 fiscal year and each fiscal (1) If the amount in subparagraph (G) of paragraph (2) of subdivision year thereafter to the 2029 30 fiscal year, inclusive, based on the (b) is greater than zero, transfer that amount from the General Fund to estimates set forth in the annual Budget Act pursuant to paragraphs (2) the Budget Stabilization Account, subject to any suspension or reduction 2.

10 And (3) of subdivision (h), and the sum identified in paragraph (2) of of this transfer pursuant to paragraph (1) of subdivision (a) of Section subdivision (a), the Controller shall transfer amounts from the General 22. Fund and the Budget Stabilization Account, pursuant to a schedule (2) If the amount described in subparagraph (F) of paragraph (2) of provided by the Director of Finance, as provided in subparagraph (B). subdivision (b) is greater than the amount calculated under subparagraph (B) Notwithstanding any other provision of this section, in the fiscal (E) of paragraph (2) of subdivision (b), transfer that excess amount from year to which the Budget Act identified in subparagraph (A) applies: the Budget Stabilization Account back to the General Fund.