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Legislature Sends Remaining Budget Trailer Bills to Gov. Jerry Brown

June 27, 2012

Today, both the Senate and the Assembly completed work on the remaining FY 2012-13 Budget Trailer bills, which will complete the budget package awaiting Gov. Jerry Brown’s review.


On June 15, the Legislature sent the main budget bill, AB 1464, and six trailer bills to the Governor in order to avoid forfeiting salary under Proposition 25 (2010). For more, please read the June 15 CA Cities Advocate article “Unfinished Product: Legislature Passes Budget Bill, Additional Trailer Bills to be Considered Later.”

Regrettably, the list of trailer bills included AB 1484, a 73-page redevelopment trailer bill that surfaced in print on Tuesday morning. The League testified against those provisions that were harmful to city interests on Tuesday night and succeeded in getting the progress of the measure delayed. On Wednesday morning, the League presented legislators with a set of amendments that would address the most harmful provisions of the legislation. However, after pressure from the Governor’s office, legislators ultimately agreed to pass the bill “as is” after submitting an intent letter to the Journal and making various statements to support their votes. The League wishes to thank those legislators who voted “No” on the measure out of dissatisfaction with the final product.

The following list represents the remaining trailer bills that were sent to the Governor today.

AB 1484 (Committee on Budget) – Redevelopment

Contains a comprehensive set of amendments to last’s years AB x1 26, the redevelopment dissolution bill.  While some of the provisions may be viewed as helpful to local agencies, the League was forced to oppose the measure due to numerous provisions aimed at granting excessive powers to the Department of Finance, a lack of sufficient due process, and state authority to divert local sales and property tax to offset amounts under dispute.

AB 1494 (Committee on Budget) – Healthy Families/Medi-Cal

Modifies the eligibility for the California Children’s Services Program and transitions Healthy Families enrollees to Medi-Cal. Also modifies the rate methodology for lab services, upon approval of the federal government.

AB 1497 (Committee on Budget) – 2012-13 Budget Bill Amendments

Amends provisions of AB 1464, the FY 2012-13 Budget Act, in accordance with recent negotiations between the Governor and Democratic leadership. Of importance to cities, the $20 million in non-competitive grants for city police departments are now included in the list of trigger cuts. If the Governor’s tax initiative is approved in November, the grants will take effect. The grant formula and eligibility criteria are to be determined by the Board of State and Community Corrections in collaboration with the Department of Finance.

AB 1499 (Committee on Budget) – Ballot Order for Statewide Measures

Changes the order in which initiatives appear on the ballot. Specifically, the bill requires that bond measures and constitutional amendments, including those placed by the legislature, appear first. This will ensure that the Governor’s November tax initiative will receive top billing on the ballot if the legislature moves the Water Bond to 2014.

SB 1006 (Committee on Budget and Fiscal Review) – General Government

Makes multiple changes to statute. Those of most interest to cities are:

  • Repeals the Filipino Employee Survey Mandate, which has been suspended every year since 1990.
  • Increases the amount of the state-only DNA penalty assessment to $4 for every $10 (from $3 for every $10). These funds support the Department of Justice Forensic laboratories.
  • Increases oversight responsibilities for CalEMA as they pertain to Proposition 1B Transit and Waterborne programs. 
  • Expands the Capital Investment Incentive Program to include “qualified research and development facility.” Also transfers duties related to the program from the Business, Transportation and Housing Agency to the Governor’s Office of Business and Economic Development. 
  • Provides that all state-mandated local programs that are suspended in FY 2012-13 will also be suspended in the FY 2013-14 and FY 2014-15. Also prohibits payments for past state-mandated local programs in FY 2012-13, FY 2013-14, and FY 2014-15. 
  • Eliminates the sunset date included in AB 1465, passed on June 15, for the transfer of the portion of new HUTA being held for off-highway vehicle purposes to the General Fund.

SB 1008 (Committee on Budget and Fiscal Review) – Medicare and Medi-Cal

Authorizes a Dual Demonstration project for coordinating health care services for persons eligible for both Medicare and Medi-Cal.

SB 1009 (Committee on Budget and Fiscal Review) – Health and Human Services

Makes comprehensive changes to community-based mental health services at both the state and local levels to implement the 2011 Mental Health Realignment. 

SB 1013 (Committee on Budget and Fiscal Review) – Child Welfare Services Realignment

Makes programmatic changes to child welfare services and adoption programs related to the realignment adopted as part of the FY 2011-12 budget.

SB 1014 (Committee on Budget and Fiscal Review) – Alcohol and Drug Programs

Transfers all functions of the Department of Alcohol and Drug Programs into departments within the Health and Human Services Agencies. Also makes changes to state and county roles to provide consistency with the 2011 Public Safety Realignment. 

SB 1015 (Committee on Budget and Fiscal Review) – Tax Enforcement

Provides additional General Fund revenues of $16 million in FY 2011-12 and $41 million in FY 2012-13 through changes to tax collection procedures and enforcement of tax laws. Specifically, expands the ability of Franchise Tax Board to impose earnings withholdings; imposes a penalty on certain erroneous refund claims; and expands the use of automated data exchanges (Financial Institution Records Match) to identify accounts of delinquent tax debtors held at financial institutions doing business in California.

SB 1016 (Committee on Budget and Fiscal Review) – Education Finance

Makes various changes to statutes relating to K-12 and higher education, including financial aid. Eliminates statute requiring the Proposition 98 guarantee to be held harmless from the effect of the 2010 gas tax swap and the dissolution of redevelopment. Also contains “trigger cut” language that will become effective Jan. 1, 2013 unless the Governor’s tax proposal is approved by voters in November.

SB 1018 (Committee on Budget and Fiscal Review) – Resources and Environmental Protection

Makes various changes in the resources and environmental protection subject areas. Of interest to cities are the following provisions:

  • Establishes a new Greenhouse Gas Reduction Fund that will contain all funds collected by a cap-and-trade auction or sale of allowances (from an auction) which will be available for appropriation by the Legislature. It will require that all moneys in the new fund be separately identified in the annual Budget Act. The bill requires the Department of Finance to submit to the Legislature by Jan. 10, 2013 a proposal for a spending plan for the funds, unless a bill is passed by the Legislature before Aug. 31, 2012 that provides a process for a long-term spending strategy.
  • Makes four substantial changes to Regional Water Quality Control Boards (RWQCB):
    • Reduces the number of RWQCB members from nine to seven.
    • Removes the associational seats and instead says that the Governor shall approve all seven members of the board as follows:
      • Six members of the board shall be appointed “on the basis of his or her demonstrated interest or proven ability in the field of water quality, including water pollution control, water resource management, water use, or water protection. The Governor shall consider appointments in the public and non-public sectors. In regard to appointments from the non-public sectors, the Governor shall consider including members from key economic sectors in a given region, such as agriculture, industry, commercial activities, forestry, and fisheries.” One member shall be appointed as a public member who is not required to meet the terms described above.
      • Members shall be appointed on the basis of his or her ability to substantially attend all meetings and shall be representative of the region.
    • Modifies the current income restrictions to say that a person shall not be disqualified from being a member of a RWQCB because that person receives, or has received during the previous two years, a significant portion of his or her income directly or indirectly from a person subject to waste discharge requirements, or an applicant for waste discharge requirements, that are issued by the state board or RWQCB other than the board of which the person is a member.
    • Adds new “conflict of interest” language for RWQCB members substantially similar to that of other state boards and commissions.
  • Provides additional funding to state parks in an effort to avoid park closures.  

SB 1020 (Committee on Budget and Fiscal Review) – Public Safety Realignment Account Superstructure

Enacts a permanent financing structure for the 2011 Realignment, including account structures, funding allocations among accounts and counties, allocations of available growth funding, and protections against additional mandates, and other issues. New provisions reflect those of the Governor’s tax measure, The Schools and Public Safety Protection Act of 2012, which offers constitutional protection for the current share of state sales tax (1.0625 percent) dedicated to Realignment, as well as Vehicle License Fee (VLF) revenues dedicated to the newly created “Enhancing Law Enforcement Activities Subaccount.” This bill also clarifies that without the passage of the Governor’s tax measure, these provisions and allocations are subject to change.

Of note to cities:

  • Renames the “Supplemental Law Enforcement Services Account” that contains local law enforcement subventions including booking fees and COPS program grants, as the “Enhancing Law Enforcement Activities Subaccount.” VLF revenues continue to be deposited in this account for the same purposes, totaling $489.9 million. If VLF revenues are not enough to reach this level, additional funds from sales tax revenues will be deposited in the Local Revenue Fund 2011 for this purpose.
  • Creates growth account for the Enhancing Law Enforcement Activities Subaccount (for VLF revenues captured that exceed the $489.9 million) and provides that on Aug. 25 of each year, 27.08 percent of the Enhancing Law Enforcement Activities Growth Special Account shall be allocated to COPS programs.

SB 1021 (Committee on Budget and Fiscal Review) - Public Safety Omnibus Trailer Bill

Contains the necessary changes to enact the FY 2012-13 Budget Act including:

  • Enacts statutory changes for the “Blueprint” Future of California State Corrections plan (as created in April 2012), which includes accountability measures and mandated audits to be submitted by the California Department of Corrections and Rehabilitation (CDCR).
  • Cleans up existing language for the creation of the Board of State and Community Corrections (BSCC) and assigns new duties including:
    • Moves the Office of Gang and Youth Violence Policy duties from CalEMA to the BSCC.
    • Tasks the BSCC with data collection to measure impacts of the 2011 Realignment in local communities.
  • Permits transfer of jail inmates between county facilities in neighboring jurisdictions and permits counties to incarcerate parole violators while awaiting their hearing.
  • Enacts Department of Juvenile Justice (DJJ) programmatic changes as set forth in the May Revise which includes:
    • Reduces age of DJJ jurisdiction from 25 to 23 years old.
    • Terminates juvenile parole as of Jan. 1, 2013.
    • Requires that counties pay $24,000 per year for any offender committed to DJJ after July 1. Forgives the previous trigger cut requirements where counties would have been required to pay $125,000 per year to the CDCR.
  • Makes various changes to court fees and funding for the Trial Court Improvement Fund and the Judicial Administration Efficiency and trial court security funding.
  • Revises internal CDCR employee practices for compensation and staffing levels.
  • Expands Female Offender Alternative Custody programs for non-violent, non-serious offenders who are pregnant or primary care givers.
  • Enacts various changes to medical health care services and Medi-Cal enrollment for state inmates.

SB 1022 (Committee on Budget and Fiscal Review) – Jail Facilities Financing

Makes various changes to the financing authority of state and local agencies to build and repurpose prison and jail facilities. Includes the mandated closure of the California Rehabilitation Center (Norco, CA) upon completion of necessary infill projects at other existing inmate facilities.

SB 1023 (Committee on Budget and Fiscal Review) – Public Safety Realignment Clean-Up

Makes numerous changes to policies enacted under the 2011 Public Safety Realignment package. This includes:

  • Booking Fees: Makes statutory changes consistent with 2011 Public Safety Realignment, including setting the amount available for booking fees at $35 million per year beginning in FY 2012-13 from the Enhancing Law Enforcement Activities Subaccount within the Law Enforcement Services Account. Removes limitations on the number of times a county may increase the fee and public notification requirements should the counties not be appropriated the full $35 million in booking fee subventions.
  • COPS Funding: Specifies that a 21.86 percent per program of the funds deposited in the Enhancing Law Enforcement Activities Subaccount would be allocated to the COPS and JJCPA (provides funding for juvenile probation services) programs. This would provide $107.1 million per year for each of these programs.
  • Requires local law enforcement to provide local summary criminal history information to public defenders or district attorneys in post-release community supervision or mandatory supervision revocation hearings.
  • Adds a dozen new felony offenses to those that qualify for state prison time rather than jail sentences, including assault against a peace officer and evading a peace officer, sexual acts with a minor under 14 years of age, weapons production, and sale of a controlled substance to a minor.
  • Permits counties subject to jail population caps to release inmates 30 days prior to their scheduled release, expanding from the currently permitted five day period prior to their scheduled release.
  • Clarifies parole and parole procedures, including revocation for mandatory supervision, post-release community supervision, and probation.
  • States sentencing for multiple offenses that carries both state prison and county jail time will result in a state prison sentence.

SB 1033 (Committee on Budget and Fiscal Review) – Local Agency Investment Fund

Creates the Local Agency Investment Fund, and allows local governments, school districts and special districts to voluntarily deposit money into the Fund as an investment. The funds could then be used for state cash flow purposes. Investing agencies would be required to deposit a minimum of $200 million. 

SB 1036 (Committee on Budget and Fiscal Review) – In-Home Supportive Services

Integrates In-Home Supportive Services into managed care as part of the Long Term Services and Supports integration included in the Dual Demonstration project authorized in AB 1468.

SB 1038 (Committee on Budget and Fiscal Review) – State Government Organization

Makes multiple changes to the structure of state government, including:

  • Moves the State Mediation and Conciliation Services from the Department of Industrial Relations to the Public Employment Relations Board.
  • Transfers the Commission on Uniform State Laws to the Legislative Counsel Bureau.
  • Eliminates the Fair Employment and Housing Commission and instead forms a council within the Department of Fair Employment and Housing to conduct public hearings and regulatory actions.
  • Eliminates the Division of Labor Statistics and Research and transfers the duties, including public works (prevailing wage) enforcement within to the Division of Occupational Health and Safety and the Division of Labor Standards Enforcement in the Department of Industrial Relations.
  • Makes changes to the Division of Apprenticeship Standards. Requires any public works project awarding agency to submit the report regarding apprenticeship employment to the Department of Industrial Relations rather to the Division. 
  • Extends the time limit for a contractor to request a review of debarment or civil penalty resulting from committing a serious violation of labor laws from 30 days to 60 days.
  • Reduces the membership of the California Unemployment Insurance Appeals Board from seven members to five members and requires that all members be attorneys at law.

SB 1041 (Committee on Budget and Fiscal Review) – Human Services

Makes various statutory changes to social services programs including provisions related to CalWORKs and In-Home Support Services.

AB 1502 (Committee on Budget) – UC/CSU Trigger Cuts

Contains appropriations for the University of California and California State University.  In order to receive the money, two conditions must be met: 1) the Governor’s November tax initiative must pass and 2) the UC and CSU systems do not increase student tuition in 2012-13.

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