AB 1830: Budget Deficit Savings Account: Safety Net Reserve Fund.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2018-06-27
Existing provisions of the California Constitution, approved by the electors on November, 4, 2014, establish the Budget Stabilization Account in the General Fund and require the Controller, on or before October 1 of the 201516 fiscal year and each fiscal year thereafter, to transfer from the General Fund to the Budget Stabilization Account amounts that include a sum equal to 1.5% of the estimated amount of General Fund revenues for that fiscal year. These existing provisions prohibit for each fiscal year transfers to the account that would cause the balance in the account to exceed 10% of the amount of General Fund proceeds of taxes for the fiscal year, as estimated by the Department of Finance. These existing provisions authorize, for any fiscal year, General Fund proceeds of taxes that, but for the above prohibition, would have been transferred to the account, to be expended only for infrastructure, as prescribed.
This bill would require deposits to the Budget Stabilization Account for the 201819 fiscal year, above the amounts required by existing provisions of the California Constitution, as defined and appropriated in the 2018 Budget Act, to be transferred from the General Fund to the Budget Deficit Savings Account, which the bill would establish in the State Treasury. The bill would require the Controller to transfer certain moneys from the Budget Deficit Savings Account to the Budget Stabilization Account, based on an updated projection as calculated by the department, upon order of that department no earlier than May 31, 2019. The bill would require the Controller, upon order of the department, to transfer 50% of the remaining amounts deposited in the Budget Deficit Savings Account that are not transferred to the Budget Stabilization Account to the Safety Net Reserve Fund, which the bill would establish in the State Treasury. The bill would include within the Safety Net Reserve Fund a Medi-Cal Subaccount and a CalWORKs Subaccount. The bill would require the Controller, upon the enactment of the 2018 Budget Act, upon order of the department, to transfer $200,000,000 from the General Fund to the CalWORKs Subaccount. The bill would appropriate $8,000 from the General Fund to the department for work necessary to develop rules associated with the Budget Deficit Savings Account and the Safety Net Reserve Fund.
This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.
Existing provisions of the California Constitution, approved by the electors on November, 4, 2014, establish the Budget Stabilization Account in the General Fund and require the Controller, on or before October 1 of the 201516 fiscal year and each fiscal year thereafter, to transfer from the General Fund to the Budget Stabilization Account amounts that include a sum equal to 1.5% of the estimated amount of General Fund revenues for that fiscal year. These existing provisions prohibit for each fiscal year transfers to the account that would cause the balance in the account to exceed 10% of the amount of General Fund proceeds of taxes for the fiscal year, as estimated by the Department of Finance. These existing provisions authorize, for any fiscal year, General Fund proceeds of taxes that, but for the above prohibition, would have been transferred to the account, to be expended only for infrastructure, as prescribed.
This bill would require deposits to the Budget Stabilization Account for the 201819 fiscal year, above the amounts required by existing provisions of the California Constitution, as defined and appropriated in the 2018 Budget Act, to be transferred from the General Fund to the Budget Deficit Savings Account, which the bill would establish in the State Treasury. The bill would require the Controller to transfer certain moneys from the Budget Deficit Savings Account to the Budget Stabilization Account, based on an updated projection as calculated by the department, upon order of that department no earlier than May 31, 2019. The bill would require the Controller, upon order of the department, to transfer 50% of the remaining amounts deposited in the Budget Deficit Savings Account that are not transferred to the Budget Stabilization Account to the Safety Net Reserve Fund, which the bill would establish in the State Treasury. The bill would include within the Safety Net Reserve Fund a Medi-Cal Subaccount and a CalWORKs Subaccount. The bill would require the Controller, upon the enactment of the 2018 Budget Act, upon order of the department, to transfer $200,000,000 from the General Fund to the CalWORKs Subaccount. The bill would appropriate $8,000 from the General Fund to the department for work necessary to develop rules associated with the Budget Deficit Savings Account and the Safety Net Reserve Fund.
This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.
Existing provisions of the California Constitution, approved by the electors on November, 4, 2014, establish the Budget Stabilization Account in the General Fund and require the Controller, on or before October 1 of the 201516 fiscal year and each fiscal year thereafter, to transfer from the General Fund to the Budget Stabilization Account amounts that include a sum equal to 1.5% of the estimated amount of General Fund revenues for that fiscal year. These existing provisions prohibit for each fiscal year transfers to the account that would cause the balance in the account to exceed 10% of the amount of General Fund proceeds of taxes for the fiscal year, as estimated by the Department of Finance. These existing provisions authorize, for any fiscal year, General Fund proceeds of taxes that, but for the above prohibition, would have been transferred to the account, to be expended only for infrastructure, as prescribed.
This bill would require deposits to the Budget Stabilization Account for the 201819 fiscal year, above the amounts required by existing provisions of the California Constitution, as defined and appropriated in the 2018 Budget Act, to be transferred from the General Fund to the Budget Deficit Savings Account, which the bill would establish in the State Treasury. The bill would require the Controller to transfer certain moneys from the Budget Deficit Savings Account to the Budget Stabilization Account, based on an updated projection as calculated by the department, upon order of that department no earlier than May 31, 2019. The bill would require the Controller, upon order of the department, to transfer 50% of the remaining amounts deposited in the Budget Deficit Savings Account that are not transferred to the Budget Stabilization Account to the Safety Net Reserve Fund, which the bill would establish in the State Treasury. The bill would include within the Safety Net Reserve Fund a Medi-Cal Subaccount and a CalWORKs Subaccount. The bill would require the Controller, upon the enactment of the 2018 Budget Act, upon order of the department, to transfer $200,000,000 from the General Fund to the CalWORKs Subaccount. The bill would appropriate $8,000 from the General Fund to the department for work necessary to develop rules associated with the Budget Deficit Savings Account and the Safety Net Reserve Fund.
This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.
This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2018.This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2018.
The Legislature finds and declares all of the following:
(a)California revenue losses associated with the last three recessions totaled roughly $40 billion in the recession of the early 1990s, $80 billion in the dot-com bust of the 2000s, and $115 billion in the Great Recession.
(b)In 2014, the people of the great State of California overwhelmingly supported Proposition 2, a measure to repay debt and protect the state from the negative effects of economic downturns by depositing surplus revenue into the Budget Stabilization Account.
(c)Several economists, including the Legislative Analyst and the Department of Finance, have indicated that another downturn in Californias economy is inevitable.
(d)Establishing the Budget Deficit Savings Account will allow the state yet another mechanism to prepare in advance of a recession, thus further mitigating the impacts of state revenue losses.
SEC. 2.Article 7.6.5 (commencing with Section 16418.8) is added to Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code, to read:7.6.5.Budget Deficit Savings Account16418.8.(a)The Budget Deficit Savings Account is hereby established in the State Treasury.
(b)Deposits to the Budget Stabilization Account for the 201819 fiscal year, above the amounts required by Section 20 of Article XVI of the California Constitution, as defined and appropriated in the 2018 Budget Act, shall be transferred from the General Fund to the Budget Deficit Savings Account. Based on the updated projection as calculated by the Department of Finance during the 201920 May Revision, upon order of the Director of the Department of Finance, no earlier than May 31, 2019, the Controller shall transfer the updated amount from the Budget Deficit Savings Account to the Budget Stabilization Account.
(c)Upon order of the Director of the Department of Finance, the Controller shall transfer 50 percent of the remaining amounts deposited in the Budget Deficit Savings Account that are not transferred to the Budget Stabilization Account pursuant to subdivision (b) to the Safety Net Reserve Fund, created by Section 11011 of the Welfare and Institutions Code. The remaining 50 percent of the balance shall remain in the Budget Deficit Savings Account.
(d)Notwithstanding any other law, the Controller may use the funds in the Budget Deficit Savings Account for cash flow loans to the General Fund as provided in Sections 16310 and 16381.
SEC. 3.Section 11011 is added to the Welfare and Institutions Code, to read:11011.(a)(1)The Safety Net Reserve Fund is hereby established in the State Treasury. The Medi-Cal Subaccount and the CalWORKs Subaccount are hereby created within the Safety Net Reserve Fund.
(2)Notwithstanding any other law, the Controller may use the funds in the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts for cash flow loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code.
(b)(1)The Department of Finance, in consultation with the State Department of Social Services, the State Department of Health Care Services, and the Legislative Analysts Office, shall establish both of the following:
(A)A methodology to calculate savings attributable to caseload and cost per case for the purpose of funding the subaccounts.
(B)A process for the distribution of funds.
(2)On or before May 1, 2019, and during the annual budget process, the Department of Finance, in consultation with the Legislative Analysts Office, shall present to the Legislature information related to the methodology and the distribution process, as described in paragraph (1).
(3)It is the intent of the Legislature to codify in future legislation the final methodology and distribution process.
(c)Upon the enactment of the 2018 Budget Act, upon order of the Director of the Department of Finance, the Controller shall transfer two hundred million dollars ($200,000,000) from the General Fund to the CalWORKs Subaccount. Upon appropriation by the Legislature, the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts shall be utilized for the purposes of maintaining existing program benefits and services for the Medi-Cal and CalWORKs programs during economic downturns when caseload and cost per case related to these programs increase and state revenues decline.
SEC. 4.The sum of eight thousand dollars ($8,000) is hereby appropriated from the General Fund to the Department of Finance for work necessary to develop rules associated with the Budget Deficit Savings Account and the Safety Net Reserve Fund pursuant to Section 16418.8 of the Government Code and Section 11011 of the Welfare and Institutions Code.
SEC. 5.This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.
The Legislature finds and declares all of the following:
(a)California revenue losses associated with the last three recessions totaled roughly $40 billion in the recession of the early 1990s, $80 billion in the dot-com bust of the 2000s, and $115 billion in the Great Recession.
(b)In 2014, the people of the great State of California overwhelmingly supported Proposition 2, a measure to repay debt and protect the state from the negative effects of economic downturns by depositing surplus revenue into the Budget Stabilization Account.
(c)Several economists, including the Legislative Analyst and the Department of Finance, have indicated that another downturn in Californias economy is inevitable.
(d)Establishing the Budget Deficit Savings Account will allow the state yet another mechanism to prepare in advance of a recession, thus further mitigating the impacts of state revenue losses.
SEC. 2.Article 7.6.5 (commencing with Section 16418.8) is added to Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code, to read:7.6.5.Budget Deficit Savings Account16418.8.(a)The Budget Deficit Savings Account is hereby established in the State Treasury.
(b)Deposits to the Budget Stabilization Account for the 201819 fiscal year, above the amounts required by Section 20 of Article XVI of the California Constitution, as defined and appropriated in the 2018 Budget Act, shall be transferred from the General Fund to the Budget Deficit Savings Account. Based on the updated projection as calculated by the Department of Finance during the 201920 May Revision, upon order of the Director of the Department of Finance, no earlier than May 31, 2019, the Controller shall transfer the updated amount from the Budget Deficit Savings Account to the Budget Stabilization Account.
(c)Upon order of the Director of the Department of Finance, the Controller shall transfer 50 percent of the remaining amounts deposited in the Budget Deficit Savings Account that are not transferred to the Budget Stabilization Account pursuant to subdivision (b) to the Safety Net Reserve Fund, created by Section 11011 of the Welfare and Institutions Code. The remaining 50 percent of the balance shall remain in the Budget Deficit Savings Account.
(d)Notwithstanding any other law, the Controller may use the funds in the Budget Deficit Savings Account for cash flow loans to the General Fund as provided in Sections 16310 and 16381.
SEC. 3.Section 11011 is added to the Welfare and Institutions Code, to read:11011.(a)(1)The Safety Net Reserve Fund is hereby established in the State Treasury. The Medi-Cal Subaccount and the CalWORKs Subaccount are hereby created within the Safety Net Reserve Fund.
(2)Notwithstanding any other law, the Controller may use the funds in the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts for cash flow loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code.
(b)(1)The Department of Finance, in consultation with the State Department of Social Services, the State Department of Health Care Services, and the Legislative Analysts Office, shall establish both of the following:
(A)A methodology to calculate savings attributable to caseload and cost per case for the purpose of funding the subaccounts.
(B)A process for the distribution of funds.
(2)On or before May 1, 2019, and during the annual budget process, the Department of Finance, in consultation with the Legislative Analysts Office, shall present to the Legislature information related to the methodology and the distribution process, as described in paragraph (1).
(3)It is the intent of the Legislature to codify in future legislation the final methodology and distribution process.
(c)Upon the enactment of the 2018 Budget Act, upon order of the Director of the Department of Finance, the Controller shall transfer two hundred million dollars ($200,000,000) from the General Fund to the CalWORKs Subaccount. Upon appropriation by the Legislature, the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts shall be utilized for the purposes of maintaining existing program benefits and services for the Medi-Cal and CalWORKs programs during economic downturns when caseload and cost per case related to these programs increase and state revenues decline.
SEC. 4.The sum of eight thousand dollars ($8,000) is hereby appropriated from the General Fund to the Department of Finance for work necessary to develop rules associated with the Budget Deficit Savings Account and the Safety Net Reserve Fund pursuant to Section 16418.8 of the Government Code and Section 11011 of the Welfare and Institutions Code.
SEC. 5.This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.
The Legislature finds and declares all of the following:
(a)California revenue losses associated with the last three recessions totaled roughly $40 billion in the recession of the early 1990s, $80 billion in the dot-com bust of the 2000s, and $115 billion in the Great Recession.
(b)In 2014, the people of the great State of California overwhelmingly supported Proposition 2, a measure to repay debt and protect the state from the negative effects of economic downturns by depositing surplus revenue into the Budget Stabilization Account.
(c)Several economists, including the Legislative Analyst and the Department of Finance, have indicated that another downturn in Californias economy is inevitable.
(d)Establishing the Budget Deficit Savings Account will allow the state yet another mechanism to prepare in advance of a recession, thus further mitigating the impacts of state revenue losses.
SEC. 2.Article 7.6.5 (commencing with Section 16418.8) is added to Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code, to read:7.6.5.Budget Deficit Savings Account16418.8.(a)The Budget Deficit Savings Account is hereby established in the State Treasury.
(b)Deposits to the Budget Stabilization Account for the 201819 fiscal year, above the amounts required by Section 20 of Article XVI of the California Constitution, as defined and appropriated in the 2018 Budget Act, shall be transferred from the General Fund to the Budget Deficit Savings Account. Based on the updated projection as calculated by the Department of Finance during the 201920 May Revision, upon order of the Director of the Department of Finance, no earlier than May 31, 2019, the Controller shall transfer the updated amount from the Budget Deficit Savings Account to the Budget Stabilization Account.
(c)Upon order of the Director of the Department of Finance, the Controller shall transfer 50 percent of the remaining amounts deposited in the Budget Deficit Savings Account that are not transferred to the Budget Stabilization Account pursuant to subdivision (b) to the Safety Net Reserve Fund, created by Section 11011 of the Welfare and Institutions Code. The remaining 50 percent of the balance shall remain in the Budget Deficit Savings Account.
(d)Notwithstanding any other law, the Controller may use the funds in the Budget Deficit Savings Account for cash flow loans to the General Fund as provided in Sections 16310 and 16381.
SEC. 3.Section 11011 is added to the Welfare and Institutions Code, to read:11011.(a)(1)The Safety Net Reserve Fund is hereby established in the State Treasury. The Medi-Cal Subaccount and the CalWORKs Subaccount are hereby created within the Safety Net Reserve Fund.
(2)Notwithstanding any other law, the Controller may use the funds in the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts for cash flow loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code.
(b)(1)The Department of Finance, in consultation with the State Department of Social Services, the State Department of Health Care Services, and the Legislative Analysts Office, shall establish both of the following:
(A)A methodology to calculate savings attributable to caseload and cost per case for the purpose of funding the subaccounts.
(B)A process for the distribution of funds.
(2)On or before May 1, 2019, and during the annual budget process, the Department of Finance, in consultation with the Legislative Analysts Office, shall present to the Legislature information related to the methodology and the distribution process, as described in paragraph (1).
(3)It is the intent of the Legislature to codify in future legislation the final methodology and distribution process.
(c)Upon the enactment of the 2018 Budget Act, upon order of the Director of the Department of Finance, the Controller shall transfer two hundred million dollars ($200,000,000) from the General Fund to the CalWORKs Subaccount. Upon appropriation by the Legislature, the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts shall be utilized for the purposes of maintaining existing program benefits and services for the Medi-Cal and CalWORKs programs during economic downturns when caseload and cost per case related to these programs increase and state revenues decline.
SEC. 4.The sum of eight thousand dollars ($8,000) is hereby appropriated from the General Fund to the Department of Finance for work necessary to develop rules associated with the Budget Deficit Savings Account and the Safety Net Reserve Fund pursuant to Section 16418.8 of the Government Code and Section 11011 of the Welfare and Institutions Code.
SEC. 5.This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.
SECTION 1.It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2018.It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2018.
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Date
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Status
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|---|---|
| Jun 27, 2018 | Chaptered by Secretary of State - Chapter 42, Statutes of 2018. |
| Jun 27, 2018 | Approved by the Governor. |
| Jun 18, 2018 | Enrolled and presented to the Governor at 3:45 p.m. |
| Jun 14, 2018 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Jun 14, 2018 | Read third time. Passed. Ordered to the Assembly. |
| Jun 14, 2018 | Read third time. Passed. Ordered to the Assembly. (Ayes 28. Noes 9. Page 4679.). |
| Jun 13, 2018 | From committee: Do pass. (Ayes 12. Noes 4.) (June 13). |
| Jun 11, 2018 | Joint Rule 62(a) suspended. |
| Jun 11, 2018 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on B. & F.R. |
| May 24, 2018 | Referred to Com. on B. & F.R. |
| May 10, 2018 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 10, 2018 | Read third time. Passed. Ordered to the Senate. |
| May 8, 2018 | Read second time. Ordered to third reading. |
| May 7, 2018 | Assembly Rule 96 suspended. |
| Jan 29, 2018 | Referred to Com. on BUDGET. |
| Jan 11, 2018 | From printer. May be heard in committee February 10. |
| Jan 10, 2018 | Read first time. To print. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| Jun 14, 2018 | AB 1830 BUDGET Concurrence in Senate Amendments By TING | Assembly Floor |
Passed |
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| Jun 14, 2018 | Assembly 3rd Reading AB1830 BUDGET (Ting) By Mitchell | Senate Floor |
Passed |
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| Jun 13, 2018 | Do pass | Senate Standing Committee on Budget and Fiscal Review |
Passed |
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| May 10, 2018 | AB 1830 BUDGET Assembly Third Reading By TING | Assembly Floor |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
(Without Reference to File)
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1830
Author:(Committee on Budget)
As Amended Ver:June 11, 2018
Majority vote. Budget Bill Appropriation Takes Effect Immediately
ASSEMBLY: |
| (May 10, 2018) | SENATE: | 28-9 | (June 14, 2018) |
(vote not relevant)
Original Committee Reference: BUDGET
SUMMARY: Creates two new reserve funds, the Budget Deficit Savings Account and the Safety Net Reserve as part of the 2018 budget package. Specifically, this bill:
- Creates the Budget Deficit Savings Account:
- Deposits, for the 2018-19 fiscal year, the discretionary amount needed to fill the Budget Stabilization Account ;
- Transfers, based upon the projections the projections in the 2018-19 May Revision, the amount necessary to fill the Budget Stabilization Account after May 31, 2018;
- Specifies that half of any remaining balance shall be transferred to the Safety Net Reserve CalWORKs Subaccount; and
- Includes legislative findings related stating the need for the State to set-aside additional reserves for future economic downturns.
- Creates the Safety Net Reserve:
- Creates two subaccounts, the CalWORKs Subaccount, and Medi-Cal Subaccount;
- Requires, by May 1, 2019, the Department of Finance, in consultation with the Department of Health Care Services, the Department of Social Services and the Legislative Analyst's Office to:
- Develop a methodology for determining savings from caseload declines and costs per case in CalWORKs and Medi-Cal; and
- Create rules for withdrawing funds from these two new subaccounts
- States legislative intent that future savings attributed to the methodology would be deposited in the appropriate subaccount;
- Deposits $200 million into the CalWORKs Subaccount in 2018-19.
- Clarifies that funds in both reserves are available for cash management purposes.
- Appropriates $8,000 for the Department of Finance to develop the methodology for the Safety Net Reserve.
FISCAL EFFECT: This bill will result in $1.747 billion being deposited into the Budget Deficit Savings Account and $200 million being deposited in the Safety Net Reserve CalWORKs Subaccount. This bill will cost $8,000 General Fund to implement.
COMMENTS: This 2018 budget trailer bill creates two new reserve accounts. These reserve accounts have different objectives:
The Budget Deficit Savings Account was first proposed in AB 1740 (Daly) of the current legislative session, but was incorporated into the budget process so it could take effect during the 2018-19 fiscal year. The intent of this reserve is to provide a mechanism to deposit additional reserves once the Budget Stabilization Account reaches its maximum level of 10% of General Fund revenues.
The Safety Net Reserve is intended to capture savings achieved by reductions to CalWORKs and Medi-Cal programs due to lower caseloads and costs from less utilization from a strong economy. These savings can then be available to pay for increased program costs associated if the economy weakens and demand for these programs increase. This bill creates a process to develop the mechanism for calculating savings and distributing the proceeds from this reserve.
The 2018 budget package includes a $1.747 billion discretionary deposit into the Budget Stabilization Account. This amount would fully fund the Rainy Day Fund, based upon the revenue projections assumed in the budget package. This deposit will be made after May 31, 2019.
This bill would use the Budget Deficit Savings Account as a holding account for this discretionary deposit. If revenues in the 2018-19 fiscal year exceed that amount assumed in the budget, then it would be likely that not all of the $1.747 billion would be needed to maximize the Rainy Day Fund. Pursuant to this bill, any funds that remained after the transfer to the Budget Stabilization Account would be split between the Budget Deficit Savings Account and the Safety Net Reserve CalWORKs Subaccount. If State revenue collections are more in line with the Legislative Analyst's Office forecast for 2018-19, this could mean several hundred million dollars of funding will remain in both reserves at the end of the fiscal year.
Analysis Prepared by: Christian Griffith / BUDGET / (916) 319-2099 FN: 0003504
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 1830
:
SENATE BUDGET & FISCAL REVIEW COMMITTEE: 12-4, 6/13/18
AYES: Mitchell, Beall, Glazer, McGuire, Monning, Pan, Portantino, Roth, Skinner, Stern, Wieckowski, Wilk
NOES: Nielsen, Anderson, Moorlach, Stone
NO VOTE RECORDED: Jackson
ASSEMBLY FLOOR: Not relevant
DIGEST:
This bill makes changes necessary to implement the Budget Act of 2018 related to budgetary reserves.
ANALYSIS: This bill makes the following changes:
- Budget Deficit Savings Account
- Establishes the Budget Deficit Savings account in the State Treasury and transfers deposits in the Budget Stabilization Account (BSA) for the 2018-19 fiscal year (approximately $2.6 billion), above the constitutionally required amount, from the General Fund to the Budget Deficit Savings Account.
- Specifies, based on the Department of Finance’s (DOF) 2019-20 May Revision estimates and no earlier than May 31, 2019, that, upon order of the director of DOF, the Controller shall transfer the updated amount from the Budget Deficit Savings Account to the BSA.
- Specifies that, upon the order of the director of DOF, the Controller shall transfer 50 percent of the remaining amounts deposited into the Budget Deficit Savings Account to the Safety Net Reserve Fund. The remaining balance remains in the Budget Deficit Savings Account.
- Provides that the Controller may use the funds in the Budget Deficit Savings Account for cash flow loans to the General Fund.
- The Safety Net Reserve Fund
- Establishes the Safety Net Reserve Fund in the State Treasury, creates Medi-Cal and CalWORKs subaccounts within the Safety Net Reserve Fund and, pursuant to enactment of the 2018 Budget Act, transfers $200 million from the General Fund to the CalWORKs subaccount.
- Specifies that, upon appropriation by the Legislature, the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts shall be utilized for purposes of maintaining existing program benefits and services for Medi-Cal and CalWORKs programs during economic downturns when caseload and cost-per-case related to these programs increase and state revenues decline.
- Specifies that DOF, in consultation with Department of Social Services, the Department of Health Care Services, and the Legislative Analyst’s Office (LAO), shall establish (1) a methodology to calculate savings attributable to caseload and cost per case for the purpose of funding the subaccounts, and (2) a process for the distribution of funds.
- Requires that, on or before May 1, 2019, and during the budget process, DOF, in consultation with the LAO, present to the Legislature information related to this methodology and distribution process, as specified.
- States the Legislature’s intent to codify in future legislation the final methodology and distribution process.
- Provides that the Controller may use funds in the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts for cash flow loans to the General Fund.
- Appropriates $8,000 from the General Fund to DOF for work necessary to develop rules associated with the Budget Deficit Savings Account and the Safety Net Reserve Fund.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
According to the Senate Budget and Fiscal Review Committee, this bill transfers approximately $2.8 billion to two new state budgetary reserves created by this bill and appropriates $8,000 to DOF for work necessary to develop rules associated with these reserves.
None received
OPPOSITION: (Verified 6/12/18)
None received
6/13/18 14:59:44
**** END ****
SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
Senator Holly Mitchell, Chair
2017 - 2018 Regular
Bill No: AB 1830 Hearing Date: June 13, 2018
Author: | |||
Version: | June 11, 2018 Amended | ||
Urgency: | Yes | Fiscal: | Yes |
Consultant: | Joe Stephenshaw | ||
Subject: Budget Deficit Savings Account: Safety Net Reserve Fund
Summary:
AB 1830 makes changes necessary to implement the Budget Act of 2018 related to budgetary reserves.
Proposed Law:
Specifically, this bill makes the following changes:
- Budget Deficit Savings Account
- Establishes the Budget Deficit Savings account in the State Treasury and transfers deposits in the Budget Stabilization Account (BSA) for the 2018-19 fiscal year (approximately $2.6 billion), above the constitutionally required amount, from the General Fund to the Budget Deficit Savings Account.
- Based on the Department of Finance’s (DOF) 2019-20 May Revision estimates and no earlier than May 31, 2019, specifies that, upon order of the director of DOF, the Controller shall transfer the updated amount from the Budget Deficit Savings Account to the BSA.
- Specifies that, upon the order of the director of DOF, the Controller shall transfer 50 percent of the remaining amounts deposited into the Budget Deficit Savings Account to the Safety Net Reserve Fund. The remaining balance remains in the Budget Deficit Savings Account.
- Provides that the Controller may use the funds in the Budget Deficit Savings Account for cash flow loans to the General Fund.
- The Safety Net Reserve Fund
- Establishes the Safety Net Reserve Fund in the State Treasury, creates Medi-Cal and CalWORKs subaccounts within the Safety Net Reserve Fund and, pursuant to enactment of the 2018 Budget Act, transfers $200 million from the General Fund to the CalWORKs subaccount.
- Specifies that, upon appropriation by the Legislature, the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts shall be utilized for purposes of maintaining existing program benefits and services for Medi-Cal and CalWORKs programs during economic downturns when caseload and cost-per-case related to these programs increase and state revenues decline.
- Specifies that DOF, in consultation with Department of Social Services, the Department of Health Care Services, and the Legislative Analyst’s Office (LAO), shall establish 1) a methodology to calculate savings attributable to caseload and cost per case for the purpose of funding the subaccounts, and 2) a process for the distribution of funds.
- Requires that, on or before May 1, 2019, and during the budget process, DOF, in consultation with the LAO, present to the Legislature information related to this methodology and distribution process, as specified.
- States the Legislature’s intent to codify in future legislation the final methodology and distribution process.
- Provides that the Controller may use funds in the Safety Net Reserve Fund and the Medi-Cal and CalWORKs subaccounts for cash flow loans to the General Fund.
- Appropriates $8,000 from the General Fund to DOF for work necessary to develop rules associated with the Budget Deficit Savings Account and the Safety Net Reserve Fund.
Fiscal Effect:
Transfers approximately $2.8 billion to two new state budgetary reserves created by this bill and appropriates $8,000 to DOF for work necessary to develop rules associated with these reserves.
Support:
None on file.
Opposed:
None on file.
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 1830
Author:(Committee on Budget)
As Introduced Ver:January 10, 2018
Majority vote
SUMMARY: This bill expresses the intent of the Legislature to enact statutory changes relating to the Budget Act of 2018.
Analysis Prepared by: Christian Griffith / BUDGET / (916) 319-2099 FN: 0002844
Discussed in Hearing
24MIN
Assembly Floor
5MIN
Senate Floor
3MIN
Senate Standing Committee on Budget and Fiscal Review
Bill Author
Bill Co-Author(s):