This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2019.

 THIRD READING  

Bill No: AB 89

Author: Ting (D)

Amended: 6/22/20 in Senate

Vote: 21

PRIOR VOTES NOT RELEVANT

SENATE BUDGET & FISCAL REVIEW COMMITTEE: 13-5, 6/24/20

AYES: Mitchell, Beall, Caballero, Durazo, Hurtado, Leyva, McGuire, Monning, Pan, Roth, Skinner, Stern, Wieckowski

NOES: Nielsen, Dahle, Melendez, Moorlach, Morrell

SUBJECT: Budget Act of 2020

SOURCE: Author

DIGEST:

This bill is Budget Bill Junior associated with the Budget Act of 2020. This bill makes technical and substantive changes to the Budget Act.

ANALYSIS: On June 15, 2020, the Legislature passed SB 74 (Mitchell), which represented the Legislature’s budget agreement. This bill makes amendments based off of SB 74, which represent the budget agreement between the Legislature and the Administration. This agreement differs from the Legislature’s budget agreement, as reflected in SB 74, in the following ways:

• It does not rely on additional Rainy Day Funds, Safety Net Reserve Funds, or the Public Employee Retirement System deferral if additional federal funds did not materialize. Instead, this agreement relies upon updated baseline forecast adjustments to revenues and expenditures and an increased Proposition 98 deferral.
• It changes from the Legislature’s “trigger down” approach (including funding in the budget that is reduced only if additional federal funds were not received by September 1, 2020), to a “trigger up” approach (only providing funding or augmenting programs if additional federal funds are received by October 15, 2020, as specified). Under this approach, the following comprise the components of the trigger:
• $2.9 billion will reverse state employee payroll reductions.
• $970 million will be restored to the University of California (UC) and California State University (CSU) ($770 million was subject to trigger cuts in Legislature’s version).
• $150 million will restore courts reductions ($100 million was subject to trigger in Legislature’s version).
• $250 million will restore low-income and moderate income housing reductions.
• $250 million will augment the $750 million county realignment backfill, for a total of $1 billion to backfill county realignment.
• $88 million will restore the reductions to Golden State Teacher Grant.
• $45 million will restore cut to local child support program.
• Under this budget agreement, total General Fund expenditures for the 2020-21 fiscal year are $133.9 billion. In addition, reserves would be $11.4 billion, including 1) $2.6 billion in the Regular Reserve, 2) $450 million in the Safety Net Reserve, and 3) $8.3 billion in the Rainy Day Fund.

Specifically, this bill makes the following changes to the 2020 Budget Act:

Education

1. Provides an increase of $2.3 million in ongoing General Fund for the Department of Social Services to reflect the transition of child care programs from the Department of Education.
2. Provides $100,000 in one-time General Fund to the Department of Education for the development of a template for the Learning Continuity and Attendance Plan.
3. Provides $336,000 General Fund and 3.0 positions to the Department Education for additional workload related to changes in the 2020-21 Budget Act.
4. Eliminates $600,000 in one time Proposition 98 General Fund for the development of a distance learning curriculum, funding for this purpose is provided through the budget trailer bill.
5. Eliminates the reduction to the After School Education and Safety Program of $100 million proposed in the Governor's May Revision.
6. Reflects the reduction of $50 million in General Fund for General Child Care, these funds are backfilled with Proposition 64 funds. Provides an additional $47 million in federal Child Care and Development Block Grant funds for alternative payment provider slots, with first priority for children of essential workers and at-risk children who received care through funds provided pursuant to SB 89, (Committee on Budget and Fiscal Review, Chapter 2, Statutes of 2020). Provides $9.3 million in one-time federal funds for a data system for early education.
7. Amends requirements for the Oakland Unified School District to receive funding pursuant to AB 1840 (Committee on Budget), Chapter 426, Statutes of 2018.

Higher Education

1. Reduces support for the UC campuses by $428.39 million, and reduces support for UC Office of the President, UC Path, and UC Division of Agriculture and Natural Resources by $43.21 million total. This bill specifies that if the funding restoration for this item reflected in Control Section 8.28 does not occur, it is the intent of the Legislature that these reductions do not have a disproportionate impact on low-income students, students from underrepresented minority groups and other disadvantaged students, as specified.
2. Authorizes the Department of Finance to provide up to $5 million one-time General Fund to implement a one-time demonstration grant for animal shelters through the UC Davis Koret Shelter Medicine if philanthropic resources are not sufficient.
3. Provides $6 million in Federal Funds to help mitigate learning loss in mathematics, science and English and Language arts through the California Subject Matter Projects.
4. Reduces support for UC Hastings by $1.94 million General Fund.
5. Reduces support for the CSU by $495.09 million General Fund, and specifies that should the funding restoration for this item reflected in Control Section 8.28 not occur, it is the intent of the Legislature that these reductions do not have a disproportionate impact on low-income students, students from underrepresented minority groups and other disadvantaged students, as specified.
6. Defers $1.45 billion in Proposition 98 General Fund for California Community Colleges (CCC) from 2020-21 to the 2021-22 fiscal year.
7. Reduces ongoing funding for Calbright College by $5 million Proposition 98 General Fund for a total of $15 million ongoing. This bill also repurposes $40 million Proposition 98 General one-time to towards 2020-21 apportionments to reduce the CCC deferral.
8. Provides $53.98 million Federal Funds to establish a block grant for CCC to use on activities that support student learning and mitigate learning loss related to COVID-19, as specified. This bill requires a report on the use of funds by March 1, 2021.
9. Provides $250,000 one-time for the California Student Aid Commission to convene a student loan workgroup to research strategies to ensure that student loan have access to financially beneficial loan programs and repayment plans.
10. Reappropriates $7.5 million General Fund from 2019-20 appropriation for the Dreamer Service Incentive Grant for the purpose of providing emergency student financial aid.
11. Reduces support for the program by $88.4 million, leaving $1.35 million for outreach and administration. Control section 8.28 specifies that if federal funding is available, then this reduction will be restored.
12. Reduces funding for the California Student Aid Commission Child Savings Account Program by $15 million, this leaves approximately $10 million in support for the program.

Health

1. Reduces net General Fund expenditures by $381.7 million in the Medi-Cal program due to revised caseload estimates and other cost adjustments.
2. Restores funding for requested positions and repairs at the Department of State Hospitals including electronic health records system implementation, roof repairs at three state hospitals, and staffing for treatment teams and protective services.

Human Services

1. Incompetent to Stand Trial Capacity. Includes $16.4 million General Fund for 71.7 positions to temporarily increase bed capacity at Porterville Developmental Center Secure Treatment Program and Enhanced Behavioral Support Homes with delayed egress and secure perimeter.
2. Strikes provisional language that would have allowed the balance of unspent funds for a minimum wage provider supplement to be used to implement a provider supplement to providers in areas with a local minimum wage ordinance.
3. Restores $2 million General Fund ongoing for the Best Buddies program.
4. Includes a reduction of $46 million General Fund to temporarily reduce state operations and contracts, and to revert Local Child Support Agency funding methodologies to 2018 levels. Note that if sufficient federal funding is provided by October 15, 2020, then this funding will be restored.
5. Includes $2.4 billion for the Single Allocation within the CalWORKs program.
6. Includes $32 million to fund costs associated with continuing extended foster care benefits for non-minor dependents affected by COVID-19 who cannot meet participation requirements and turn 21 while in extended foster care on or after April 17, 2020, through June 30, 2021.
7. Provides $750 million to counties to backfill for lost realignment revenues, prioritizing support for health and human services, entitlement programs, and programs that serve vulnerable populations. Note that an additional $250 million will be provided to counties if sufficient federal funding is received by October 15, 2020.

Resources/Energy

1. Appropriates funding to California Geologic Management Division (CalGEM), at the Department of Conservation, for 25 position as follows:
   1. Assessment of financial liability of oil companies and orphaned wells (SB 551) — 10 positions.
   2. Strengthening of financial assurance requirements for oil companies (AB 1057) — Four positions.
   3. Improvement of transparency of gas leaks (AB 463) — two positions.
   4. Public outreach/data transparency — two positions.
   5. Regulatory compliance and oversight — five positions.
   6. Enforcement — two positions.
2. Reappropriates funding for various projects.
3. Extends the encumbrance period for various local park projects.
4. Provides technical cleanup language.
5. Authorizes the Department of Finance to make a $50 million loan to Golden State Energy to enable the entity, a non-profit public benefit corporation to begin the work of purchasing, owning, controlling, operating, or managing electrical and gas services for its ratepayers. This loan would be made available only if Pacific Gas and Electric fails to successfully exit bankruptcy, and only if certain other conditions were met. Requires Golden State Energy and the Department of Finance to report on the activities of Golden State Energy if the loan is made.

General Government

1. Includes $11.1 million General Fund in 2020-21 and $11.5 million General Fund in 2021-22 and 2022-23, for a total of three-year limited term resources for the California Cybersecurity Integration Center. This proposal is funded in various departments, including the Office of Emergency Services, California Highway Patrol, California Military Department, and the Department of Technology. Includes provisional language reinforcing privacy protections and reporting requirements that include details of cyber-attacks, and whether any of the investigations led to criminal prosecutions.
2. Includes $5 million and associated reporting language for an operational observer to monitor the efforts of Pacific Gas & Electric to prepare for the 2020 wildfire season, implement measures to mitigate the risk of wildfire ignitions from utility infrastructure, and reduce the use, scope, and duration of public safety power shut offs.
3. Includes $2.6 million ($503,000 General Fund) to support the transition the Alfred E. Alquist Seismic Safety Commission under the purview of the Office of Emergency Services, and ongoing costs.
4. Includes $1.3 million for a two year-limited term for the Office of Student Assistance and Relief within the Bureau of Private Postsecondary Education.
5. Specifies that, contingent upon the passage of the California Consumer Financial Law program, the Department of Finance may use the Joint Legislative Budget Committee process to augment the funds necessary for carrying out the aforementioned program.
6. Includes $25 million for the Infrastructure and Economic Development Bank to expand underserved small business lending in the state by establishing funds to support California Community Development Financial Institutions and mission-based lender liquidity and thus increase their capacity to lend to California's underserved communities.
7. Implements control section 3.90, which reduces employee compensation by $1.45 billion General Fund and $1.40 billion from other funds. This reduction is to be achieved through a combination of memoranda of understand or addenda, furloughs, or other reductions for nonrepresented employees. The bill also specifies that increases in salaries and wages that were to become effective during the 2020-21, but were are not agreed to as a part of the collective bargaining process identified in C.S. 3.90 shall be suspended.
8. Reverts $45 million in unencumbered funds for mixed income housing and $203 million in unencumbered funds for the Infill Infrastructure Grant Program of 2019, and provides that these programs would be funded if additional federal funding becomes available.
9. Provides $13 million to the Office of Planning and Research to expand the California Volunteers program support the development of the state service framework, focused specifically on building the response and recovery elements of service for COVID-19 response and recovery, and allow for the continuance of the expanded AmeriCorps member slots from 2019-20.
10. Provides $300 million to local governments and continuums of care to continue efforts to combat homelessness.
11. Provides $50 million in General Fund resources for acquisition of properties for Project Room Key and for capitalizing operating subsidies for acquired properties.
12. Provides $1.4 million to the Franchise Tax Board to administer the Earned Income Tax Credit Program.
13. Revises Control Section 8.28 to allow the Department of Finance to augment specific items upon the receipt of additional federal funds.
14. Adds Control Section 11.90 to provide flexibility and approval authority for augmentations for expenditure of $9.5 billion in funds allocated from the Coronavirus Relief Fund in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Specifically allocates, (a) $550 million to the Department of Housing and Community Development to support housing for individuals and families who are experiencing homelessness or at risk of homelessness due to the COVID-19 pandemic, (b) $500 million directly to cities, to be used toward homelessness, public health, public safety, and other services to combat the COVID-19 pandemic, and (c) $1.3 billion to counties, to be used toward homelessness, public health, public safety, and other services to combat the COVID-19 pandemic.
15. Adds Control Section 11.95 related to the allocation of federal funds, as specified, to support testing and contact tracing in response to the COVID-19 public health emergency.

Public Safety

1. Provides $13.29 million General Fund to support the Mental Health Psychiatry Registry.
2. Reduces the Integrated Substance Use Disorder Program by $30 million General Fund one-time due to COVID-19 impacts.
3. Provides $135 million General Fund and Lease Revenue Bond for various capital outlay projects.
4. Provides $3.3 million General Fund to implement AB 1296 (Gonzalez, Chapter 626, Statutes of 2019). The resources will be used for Department of Justice-led teams to prosecute violations of labor, tax, insurance, and licensing laws by businesses and individuals in the underground economy.
5. Includes set-aside amounts of $9.6 million General Fund in 2020-21, $24.7 million General Fund in 2021-22, $22.9 million General Fund in 2022-23, and $12.1 million General Fund in 2023-24 for DJJ realignment. Conversations will continue during the summer with the Administration around DJJ Realignment.
6. Includes a set-aside amount of $65 million General Fund starting in 2021-22 and annually thereafter to implement statutory changes that repeal the authority to collect several criminal administrative fees currently being collected from persons impacted by the carceral system.
7. Includes a trigger amount of $150 million General Fund for the Judicial Branch that will be augmented contingent upon sufficient funding from the federal government.
8. Protects the following programs from any reduction: Dependency Counsel; Court Interpreters; California Collaborative and Drug Court Projects; Court Appointed Special Advocate Program; Model Self-Help Program; Equal Access Fund; Family Law Information Centers; and Civil Case Coordination.
9. Includes $1.2 million General Fund and four positions for the Commission on Judicial Performance to improve investigative processes and acquire a new case management system to accept electronic complaints.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

According to the Senate Budget and Fiscal Review Committee, as a Budget Bill, this bill makes numerous significant adjustments to General Fund, Special Fund, and Federal Fund expenditure authority for the 2020-21 fiscal year.

SUPPORT: (Verified 6/23/20)

None received

OPPOSITION: (Verified 6/23/20)

None received

Prepared by: Joe Stephenshaw / B. & F.R. / 916-651-4103

6/25/20 0:58:20

**** END ****

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 89

Author:(Ting)

As Amended Ver:June 22, 2020

Majority vote. Budget Bill Appropriation Takes Effect Immediately

SUMMARY:

Amends SB 74 (Mitchell), the 2020 Budget Bill, to incorporate changes to the budget that reflect a final agreement between the Legislature and the Governor for the 2020 budget.

The Senate Amendments:

Delete the current version of the bill and instead:

1. Includes a federal budget trigger mechanism that would appropriate $14 billion for state programs, or a proportionate amount, if the State received additional staff federal relief by October 15, 2020.
   1. These appropriations are:
      1. $150 million for additional court funding;
      2. $45 million to the Housing and Community Development for moderate-income housing;
      3. $203 million to offset reverted 2019 housing funding;
      4. $46.4 million in funding for Department of Child Support Services;
      5. $5.7 billion for school, this amount would reduce deferrals that would otherwise occur without federal funds;
      6. $791.1 million for Community Colleges, this amount would reduce deferrals that would otherwise occur without federal funds;
      7. $471.6 million for the University of California;
      8. $1.9 million for Hastings College of Law;
      9. $498.1 million for the California State University;
      10. $88.4 million for the Golden State Teacher Grant program at the Student Aid Commission;
      11. $2.8 billion to offset reductions to employee compensation; and
      12. $250 million for county public safety realignment sales tax revenue backfill.
   2. Contains language that stipulates that if federal funding of greater than $2 billion, but less than $14 billion is received by October 15, the amount above $2 billion will be proportionally allocated to the above appropriations.
   3. Removes budget bill provisional language for expenditure suspensions which will instead be included in trailer bill statutory provisions.
   4. This bill makes offsetting reductions to the amounts appropriated in SB 74 (Mitchell) in the various departmental budget line items.
2. Adopts budget control language to stipulate state employee compensation reductions reached through collective bargaining, furloughs, and other reductions for non-represented employees.
   1. Achieves $1.44 billion in General Fund total savings and $1.4 million in savings from other funds;
   2. If a bargaining unit achieves the savings from collective bargaining, the state cannot also impose furloughs; and
   3. Restricts employee compensation augmentations that were not specified in the budget act.
3. Reappropriates funding for projects and funding in Natural Resources Agency, Water Resources, State Parks, the University of California, Department of Corrections and Rehabilitation, and the Department of Education child care funding.
4. Increases the Small Business Expansion Fund by $25 million to a total of $50 million.
5. Shifts Alfred E. Alquist Seismic Safety Commission to the Office of Emergency Services.
6. Provides $3.3 million to fund the TRUE task force within the Department of Justice to implement the provisions of Chapter 626, Statutes of 2019 (AB 1296).
7. Includes provisional language related to Public Safety Power Shutoffs at the Office of Emergency Services, including reporting on expenditures.
8. Allocates $13 million for the expansion of the California Volunteers program and database with provisional language regarding volunteer privacy.
9. Provides $11.1 million funding for the California Cybersecurity Integration Center within the Office of Emergency Services, the Department of Technology, the California Highway Patrol, and the Military Department and includes provisional reporting language.
10. Includes provisional language regarding the use of $35 million for election activities included in SB 74.
11. Increases the appropriation for the Bureau for Private Postsecondary Education at the Department of Consumer Affairs by $1.3 million to $19.4 million.
12. Reverts $453 million of General Fund and $250 million of Self-Help Housing fund funding appropriated to the Department of Housing and Community Development in 2019.
13. Reduces Oil, Gas, and Geothermal Administrative Fund appropriation for the Department of Conservation by $6.5 million. This reduction corresponds to the reduction in positions, from 128 to 25, for the California Geologic Management Division to strengthen oversight and enforcement of oil and gas operations in order to limit the state's financial liability.
14. Eliminates a reversion of unspent CalFire funding in the 2018 and 2019 budgets and State Water Resources Control Board funding in 2019.
15. Eliminates an appropriation of $73,000 Safe Neighborhood Parks, Clean Water, Clean Air, and Coastal Protection Bond funding for the Coachella Valley Mountains Conservancy, which will be instead be include in the Resources trailer bill.
16. Removes $200,000 for the California Air Resources Board to conduct Cap and Trade rulemaking.
17. Removes provisional language associated with the Department of Aging's budget item.
18. Reduces funding for Health Care Services by $397.2 million General Fund to reflect offsetting federal funding.
19. Reflects an additional $2.2 billion in federal funding for Health Care Services.
20. Increases General Fund for Medi-Cal Healthy Families benefits by $15.5 million.
21. Provides $38.6 million federal funds for Medi-Cal Benefits
22. Increases the Developmental Services program funding by $18.2 million General Fund and removes provisional language related to a minimum wage provider supplement.
23. Provides an addition $34.1 million for the State Department of State Hospitals.
24. Changes provisional language in the Mental Health Services Oversight and Accountability Commission related to suicide prevention efforts and contracting.
25. Increases funding for the Department of Social Services administration by $2.278 million to reflect the transition of child care program administration activities from the Department of Education.
26. Increases CalWORKs program funding by $1 billion to reflect anticipated additional caseload growth.
27. Provides $32 million to continue the extension of foster care benefits to a non-minor dependent who met the requirements for the Extended Foster Care program and has lost employment or had a disruption in an education program due to COVID-19.
28. Reflects an additional $72.5 million of federal funding for In Home Supportive Services.
29. Increases funding or Social Services automation projects by $1.1 million.
30. Increases Department of Corrections and Rehabilitation funding by $18.7 million General Fund to reflect the restoration of May Revision proposals for the department and removes provisional language that requires population reporting.
31. Includes $13.3 million for psychiatric registry services at the Department of Corrections and Rehabilitation, with specified reporting language to the Joint Legislative Budget Committee on the use of the funding.
32. Adjusts the reduction to the Integrated Substance Use Disorder Treatment Program that was made in SB 74 to $30 million.
33. Adds $137 million to fund capital projects at the Department of Corrections and Rehabilitation that were proposed in the May Revision, but not included in SB 74.
34. Adjusts funding for the Adult Reentry Grants to $37 million.
35. Provides $436,000 additional funding the Department of Education administration for the department to develop a learning continuity template and adjust school deferrals.
36. Eliminates $600,000 for the Department of Education to develop a distance learning curriculum.
37. Provides $100 million for After School Education and Safety.
38. Provides $436,000 additional funding the Department of Education administration for the department to develop a learning continuity plan template and administer distance learning and deferral apportionments.
39. Eliminates $600,000 for the Department of education to develop a distance learning curriculum, and instead provides $700,000 for the development of distance learning guidance.
40. Restores $100 million for After School Education and Safety.
41. Reduces the Department of Education funding by $102.7million to reflect the removal of COLA included in SB 74. Deletes $50 million General Fund for additional General Child Care slots, which will now be funded with Prop 64 funds.
42. Increases the Department of Education funding by $45.4 million to reflect additional federal funds received in the budget. Adds provision for early childhood data system.
43. Allocates $5 million General Fund to the University of California Davis Koret Shelter Medicine Program if philanthropic resources in an amount that is sufficient to implement the one-time demonstration project have not been raised by April 1, 2021.
44. Provides $6 million for the UC Subject Matter Projects for distance learning professional development.
45. Contains provisional language to express legislative intent that Hastings College of the Law and the California State University and University of California systems use reserves to offset any year-over-year reduction to funding.
46. Provides $250,000 to establish a California Student Loan and Debt Service Review workgroup at the California Student Aid Commission.
47. Increase the Franchise Tax Board's funding for the Earned Income Tax Credit by $1.4 million.
48. Provides $50 million for the Department of Finance for purpose of making a loan for the purposes of establishing the Golden State Energy in the event that Pacific Gas and Electric fails to exit bankruptcy, with legislative notification provisional language.
49. Modifies the reporting language for the Barstow veteran's home to include the consideration of an option to close the home.
50. Appropriates $750,000 million to counties to backfill public safety realignment revenues.
51. Adopts provisional language for the administration to appropriate certain federal funding related to certain COVID-19 activities with Joint Legislative Budget Notification.

COMMENTS:

The Legislature adopted a budget in SB 74 (Mitchell) on June 15, 2020 that represented a compromise between the Senate and the Assembly. This bill would amend SB 74 to reflect changes agreed to with the Governor.

According to the Author:

This budget bill is necessary to implement the 2020 budget plan agreed to by the Assembly with the Administration and the Senate.

Arguments in Support:

None on file.

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

Overall with these changes, the 2020 budget includes a projected $139.7 billion in General Fund revenues and $133.9 billion in General Fund Expenditures. After adjusting for encumbrances, the Special Fund for Economic Uncertainties, which is the State's main reserve account, is estimated to be $2.6 billion and $450 million remains in the Safety Net Reserve. Combined with the $8.3 billion Budget Stabilization Account balance, over $10 billion in total reserves remain.

VOTES:

ASSEMBLY FLOOR: 54-13-13

YES: Aguiar-Curry, Bauer-Kahan, Bloom, Boerner Horvath, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chu, Cooper, Daly, Eggman, Frazier, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Limón, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NO: Bigelow, Brough, Dahle, Flora, Fong, Gallagher, Kiley, Mathis, Melendez, Obernolte, Patterson, Voepel, Waldron

ABS, ABST OR NV: Arambula, Berman, Chen, Chiu, Choi, Cooley, Cunningham, Diep, Eduardo Garcia, Lackey, Levine, Low, Mayes

UPDATED:

VERSION: June 22, 2020

CONSULTANT: Christian Griffith / BUDGET / (916) 319-2099 FN: 0003147

SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW

Senator Holly Mitchell, Chair

2019 - 2020 Regular

Bill No: AB 89 Hearing Date: June 24, 2020

Subject: Budget Act of 2020

Summary:

This is Budget Bill Junior associated with the Budget Act of 2020. This bill makes technical and substantive changes to the Budget Act.

Background:

On June 15, 2020, the Legislature passed SB 74 (Mitchell), which represented the Legislature’s budget agreement. This bill makes amendments based off of SB 74, which represent the budget agreement between the Legislature and the Administration. This agreement differs from the Legislature’s budget agreement, as reflected in SB 74, in the following ways:

• It does not rely on additional Rainy Day Funds, Safety Net Reserve Funds, or the Public Employee Retirement System deferral if additional federal funds did not materialize. Instead, this agreement relies upon updated baseline forecast adjustments to revenues and expenditures and an increased Proposition 98 deferral.
• It changes from the Legislature’s “trigger down” approach (including funding in the budget that is reduced only if additional federal funds were not received by September 1, 2020), to a “trigger up” approach (only providing funding or augmenting programs if additional federal funds are received by October 15, 2020, as specified). Under this approach, the following comprise the components of the trigger:
• $2.9 billion will reverse state employee payroll reductions.
• $970 million will be restored to the UC and CSU ($770 million was subject to trigger cuts in Legislature’s version).
• $150 million will restore courts reductions ($100 million was subject to trigger in Legislature’s version).
• $250 million will restore low-income and moderate income housing reductions.
• $250 million will augment the $750 million county realignment backfill, for a total of $1 billion to backfill county realignment.
• $88 million will restore the reductions to Golden State Teacher Grant.
• $45 million will restore cut to local child support program.

Under this budget agreement, total General Fund expenditures for the 2020-21 fiscal year are $133.9 billion. In addition, reserves would be $11.4 billion, including 1) $2.6 billion in the Regular Reserve, 2) $450 million in the Safety Net Reserve, and 3) $8.3 billion in the Rainy Day Fund.

Proposed Law:

Makes the following changes to the 2020 Budget Act:

Education

1. Provides an increase of $2.3 million in ongoing General Fund for the Department of Social Services to reflect the transition of child care programs from the Department of Education.
2. Provides $100,000 in one -time General Fund to the Department of Education for the development of a template for the Learning Continuity and Attendance Plan.
3. Provides $336,000 General Fund and 3.0 positions to the Department Education for additional workload related to changes in the 2020-21 Budget Act.
4. Eliminates $600,000 in one time Proposition 98 General Fund for the development of a distance learning curriculum, funding for this purpose is provided through the budget trailer bill.
5. Eliminates the reduction to the After School Education and Safety Program of $100 million proposed in the Governor's May Revision.
6. Reflects the reduction of $50 million in General Fund for General Child Care, these funds are backfilled with Proposition 64 funds. Provides an additional $47 million in federal Child Care and Development Block Grant funds for alternative payment provider slots, with first priority for children of essential workers and at-risk children who received care through funds provided pursuant to SB 89, (Committee on Budget and Fiscal Review), Chapter 2, Statutes of 2020. Provides $9.3 million in one-time federal funds for a data system for early education.
7. Amends requirements for the Oakland Unified School District to receive funding pursuant to AB 1840 (Committee on Budget), Chapter 426, Statutes of 2018.

Higher Education

1. Reduces support for the University of California (UC) campuses by $428.39 million, and reduces support for UC Office of the President, UC Path, and UC Division of Agriculture and Natural Resources by $43.21 million total. The bill specifies that if the funding restoration for this item reflected in Control Section 8.28 does not occur, it is the intent of the Legislature that these reductions do not have a disproportionate impact on low-income students, students from underrepresented minority groups and other disadvantaged students, as specified.
2. Authorizes the Department of Finance to provide up to $5 million one-time General Fund to implement a one-time demonstration grant for animal shelters through the UC Davis Koret Shelter Medicine if philanthropic resources are not sufficient.
3. Provides $6 million in Federal Funds to help mitigate learning loss in mathematics, science and English and Language arts through the California Subject Matter Projects.
4. Reduces support for UC Hastings by $1.94 million General Fund.
5. Reduces support for the California State University by $495.09 million General Fund, and specifies that should the funding restoration for this item reflected in Control Section 8.28 not occur, it is the intent of the Legislature that these reductions do not have a disproportionate impact on low-income students, students from underrepresented minority groups and other disadvantaged students, as specified.
6. Defers $1.45 billion in Proposition 98 General Fund for California Community Colleges (CCC) from 2020-21 to the 2021-22 fiscal year.
7. Reduces ongoing funding for Calbright College by $5 million Proposition 98 General Fund for a total of $15 million ongoing. The bill also repurposes $40 million Proposition 98 General one-time to towards 2020-21 apportionments to reduce the CCC deferral.
8. Provides $53.98 million Federal Funds to establish a block grant for CCC to use on activities that support student learning and mitigate learning loss related to COVID-19, as specified. The bill requires a report on the use of funds by March 1, 2021.
9. Provides $250,000 one-time for the California Student Aid Commission to convene a student loan workgroup to research strategies to ensure that student loan have access to financially beneficial loan programs and repayment plans.
10. Reappopriates $7.5 million General Fund from 2019-20 appropriation for the Dreamer Service Incentive Grant for the purpose of providing emergency student financial aid.
11. Reduces support for the program by $88.4 million, leaving $1.35 million for outreach and administration. Control section 8.28 specifies that if federal funding is available, then this reduction will be restored.
12. Reduces funding for the California Student Aid Commission Child Savings Account Program by $15 million, this leaves approximately $10 million in support for the program.

Health

1. Reduces net General Fund expenditures by $381.7 million in the Medi-Cal program due to revised caseload estimates and other cost adjustments.
2. Restores funding for requested positions and repairs at the Department of State Hospitals including electronic health records system implementation, roof repairs at three state hospitals, and staffing for treatment teams and protective services.

Human Services

1. Incompetent to Stand Trial Capacity. Includes $16.4 million General Fund for 71.7 positions to temporarily increase bed capacity at Porterville Developmental Center Secure Treatment Program and Enhanced Behavioral Support Homes with delayed egress and secure perimeter.
2. Strikes provisional language that would have allowed the balance of unspent funds for a minimum wage provider supplement to be used to implement a provider supplement to providers in areas with a local minimum wage ordinance.
3. Restores $2 million General Fund ongoing for the Best Buddies program.
4. Includes a reduction of $46 million General Fund to temporarily reduce state operations and contracts, and to revert Local Child Support Agency funding methodologies to 2018 levels. Note that if sufficient federal funding is provided by October 15, 2020, then this funding will be restored.
5. Includes $2.4 billion for the Single Allocation within the CalWORKs program.
6. Includes $32 million to fund costs associated with continuing extended foster care benefits for non-minor dependents affected by COVID-19 who cannot meet participation requirements and turn 21 while in extended foster care on or after April 17, 2020, through June 30, 2021.
7. Provides $750 million to counties to backfill for lost realignment revenues, prioritizing support for health and human services, entitlement programs, and programs that serve vulnerable populations. Note that an additional $250 million will be provided to counties if sufficient federal funding is received by October 15, 2020.

Resources/Energy

1. Appropriates funding to California Geologic Management Division (CalGEM), at the Department of Conservation, for 25 position as follows:
   1. Assessment of financial liability of oil companies and orphaned wells (SB 551) — 10 positions.
   2. Strengthening of financial assurance requirements for oil companies (AB 1057) — Four positions.
   3. Improvement of transparency of gas leaks (AB 463) — two positions.
   4. Public outreach/data transparency — two positions.
   5. Regulatory compliance and oversight — five positions.
   6. Enforcement — two positions.
2. Reappropriates funding for various projects.
3. Extends the encumbrance period for various local park projects.
4. Provides technical cleanup language.
5. Authorizes the Department of Finance to make a $50 million loan to Golden State Energy to enable the entity, a non-profit public benefit corporation to begin the work of purchasing, owning, controlling, operating, or managing electrical and gas services for its ratepayers. This loan would be made available only if Pacific Gas and Electric fails to successfully exit bankruptcy, and only if certain other conditions were met. Requires Golden State Energy and the Department of Finance to report on the activities of Golden State Energy if the loan is made.

.

General Government

1. Includes $11.1 million General Fund in 2020-21 and $11.5 million General Fund in 2021-22 and 2022-23, for a total of three-year limited term resources for the California Cybersecurity Integration Center. This proposal is funded in various departments, including the Office of Emergency Services, California Highway Patrol, California Military Department, and the Department of Technology. Includes provisional language reinforcing privacy protections and reporting requirements that include details of cyber-attacks, and whether any of the investigations led to criminal prosecutions.
2. Includes $5 million and associated reporting language for an operational observer to monitor the efforts of Pacific Gas & Electric to prepare for the 2020 wildfire season, implement measures to mitigate the risk of wildfire ignitions from utility infrastructure, and reduce the use, scope, and duration of public safety power shut offs.
3. Includes $2.6 million ($503,000 General Fund) to support the transition the Alfred E. Alquist Seismic Safety Commission under the purview of the Office of Emergency Services, and ongoing costs.
4. Includes $1.3 million for a two year-limited term for the Office of Student Assistance and Relief within the Bureau of Private Postsecondary Education.
5. Specifies that, contingent upon the passage of the California Consumer Financial Law program, the Department of Finance may use the Joint Legislative Budget Committee process to augment the funds necessary for carrying out the aforementioned program.
6. Includes $25 million for the Infrastructure and Economic Development Bank to expand underserved small business lending in the state by establishing funds to support California Community Development Financial Institutions and mission-based lender liquidity and thus increase their capacity to lend to California's underserved communities.
7. Implements control section 3.90, which reduces employee compensation by $1.45 billion General Fund and $1.40 billion from other funds. This reduction is to be achieved through a combination of memoranda of understand or addenda, furloughs, or other reductions for nonrepresented employees. The bill also specifies that increases in salaries and wages that were to become effective during the 2020-21, but were are not agreed to as a part of the collective bargaining process identified in C.S. 3.90 shall be suspended.
8. Reverts $45 million in unencumbered funds for mixed income housing and $203 million in unencumbered funds for the Infill Infrastructure Grant Program of 2019, and provides that these programs would be funded if additional federal funding becomes available.
9. Provides $13 million to the Office of Planning and Research to expand the California Volunteers program support the development of the state service framework, focused specifically on building the response and recovery elements of service for COVID-19 response and recovery, and allow for the continuance of the expanded AmeriCorps member slots from 2019-20.
10. Provides $300 million to local governments and continuums of care to continue efforts to combat homelessness.
11. Provides $50 million in General Fund resources for acquisition of properties for Project Room Key and for capitalizing operating subsidies for acquired properties.

Public Safety

1. Provides $13.29 million General Fund to support the Mental Health Psychiatry Registry.
2. Reduces the Integrated Substance Use Disorder Program by $30 million General Fund one-time due to COVID-19 impacts.
3. Provides $135 million General Fund and Lease Revenue Bond for various capital outlay projects.
4. Provides $3.3 million General Fund to implement AB 1296 (Gonzalez), Chapter 626, Statutes of 2019. The resources will be used for Department of Justice-led teams to prosecute violations of labor, tax, insurance, and licensing laws by businesses and individuals in the underground economy.
5. Includes set-aside amounts of $9.6 million General Fund in 2020-21, $24.7 million General Fund in 2021-22, $22.9 million General Fund in 2022-23, and $12.1 million General Fund in 2023-24 for DJJ realignment. Conversations will continue during the summer with the Administration around DJJ Realignment.
6. Includes a set-aside amount of $65 million General Fund starting in 2021-22 and annually thereafter to implement statutory changes that repeal the authority to collect several criminal administrative fees currently being collected from persons impacted by the carceral system.
7. Includes a trigger amount of $150 million General Fund for the Judicial Branch that will be augmented contingent upon sufficient funding from the federal government.
8. Protects the following programs from any reduction: Dependency Counsel; Court Interpreters; California Collaborative and Drug Court Projects; Court Appointed Special Advocate Program; Model Self-Help Program; Equal Access Fund; Family Law Information Centers; and Civil Case Coordination.
9. Includes $1.2 million General Fund and four positions for the Commission on Judicial Performance to improve investigative processes and acquire a new case management system to accept electronic complaints.
10. Revises Control Section 8.28 to allow the Department of Finance to augment specific items upon the receipt of additional federal funds.
11. Adds Control Section 11.90 to provide flexibility and approval authority for augmentations for expenditure of $9.5 billion in funds allocated from the Coronavirus Relief Fund in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Specifically allocates, 1) $550 million to the Department of Housing and Community Development to support housing for individuals and families who are experiencing homelessness or at risk of homelessness due to the COVID-19 pandemic, 2) $500 million directly to cities, to be used toward homelessness, public health, public safety, and other services to combat the COVID-19 pandemic, and 3) $1.3 billion to counties, to be used toward homelessness, public health, public safety, and other services to combat the COVID-19 pandemic.
12. Adds Control Section 11.95 related to the allocation of federal funds, as specified, to support testing and contact tracing in response to the COVID-19 public health emergency.

Fiscal Effect:

As a Budget Bill, this bill makes numerous significant adjustments to General Fund, Special Fund, and Federal Fund expenditure authority for the 2020-21 fiscal year.

-- END --

(Without Reference to File)

ASSEMBLY THIRD READING

ATR Bill Id:AB 89

Author:(Ting)

As Introduced Ver:December 3, 2018

Majority vote

SUMMARY:

Amends the 2019-20 budget to provide emergency appropriations related to COVID 19 Pandemic and the Camp Fire.

Major Provisions

1. Appropriates up to $500 million for purposes related to the March 4, 2020 Proclamation of Emergency related to the COVID 19 virus.
   1. Requires the Director of Finance to notify the Joint Legislative Budget Committee (JLBC) of the purpose of the planned expenditure at least 72 hours prior to expending funds. The Chair of the JLBC may waive this period through written notification.
   2. Allows the Department of Finance to increase the amount of appropriation, up to $1 billion total, after 96 hours of notifying the JLBC. The Chair of the JLBC may waive this period through written notification.
2. Appropriates $84.1 million to CalRecycle for debris removal costs related to the 2018 Camp Fire.
3. Expresses legislative intent that the administration will work with stakeholders, including the legislature, to develop strategies to assist small businesses, individuals, and non-profits experiencing economic hardship due to COVID 19.

COMMENTS:

This bill amends the budget bill of 2019-20 to provide funding for disaster response for the COVID 19 pandemic. The focus of this funding is to provide resources needed for the immediate response and mitigation of this public health crisis.

The bill includes language to begin the conversation about the long recover period the State will likely experience after the crisis has abated. In particular, the bill notes that small business, non-profits, and individuals will experience economic hardship as a result of COVID 19. The final 2020 budget will need to account for helping these important parts of the fabric of California’s society rebuild.

The bill also include $84.1 million of Camp Fire debris removal costs that have already been incurred this fiscal year as a result of the massive 2018 fire.

According to the Author:

This bill provides funding for a declared emergency due to a worldwide pandemic.

Arguments in Support:

The State is likely to have significant unforeseen costs due to the estimated impact of COVID 19 on California. This bill provides the Governor the ability to quickly respond to an evolving crisis.

Arguments in Opposition:

FISCAL COMMENTS:

This measure costs at least $584.1 million General Fund, but could grow to as much as $1.084 billion if the Department of Finance requests additional funding, as allowed in the bill. Some of these costs may be reimbursed in future years by the federal government.

Since the State anticipates that the scope and severity of COVID 19 will peak in future weeks, it is hard to estimate at this time to what extent State funds will be needed for urgent health and safety expenditures.

VOTES:

ASSEMBLY FLOOR: 54-13-13

YES: Aguiar-Curry, Bauer-Kahan, Bloom, Boerner Horvath, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chu, Cooper, Daly, Eggman, Frazier, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Limón, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NO: Bigelow, Brough, Dahle, Flora, Fong, Gallagher, Kiley, Mathis, Melendez, Obernolte, Patterson, Voepel, Waldron

ABS, ABST OR NV: Arambula, Berman, Chen, Chiu, Choi, Cooley, Cunningham, Diep, Eduardo Garcia, Lackey, Levine, Low, Mayes

UPDATED:

VERSION: December 3, 2018

CONSULTANT: Christian Griffith / BUDGET / (916) 319-2099 FN: 0002738

ASSEMBLY THIRD READING

ATR Bill Id:AB 89

Author:(Ting)

As Introduced Ver:December 3, 2018

Majority vote. Budget Bill Appropriation Takes Effect Immediately

SUMMARY:

This bill expresses the intent of the Legislature to enact statutory changes relating to the Budget Act of 2019.

Major Provisions

COMMENTS:

According to the Author:

Arguments in Support:

Arguments in Opposition:

FISCAL COMMENTS:

VOTES:

UPDATED:

VERSION: December 3, 2018

CONSULTANT: Christian Griffith / BUDGET / (916) 319-2099 FN: 0000132