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California State Capitol. (Photo: Kevin Sanders for California Globe).

Unique Provisions of California’s Budget Bill – Part VIII

The California state budget is the largest in the nation

By Chris Micheli, October 29, 2022 3:00 pm

The California state budget is the largest in the nation, and it also represents the largest bill in page length and number of provisions. While its provisions are too many to cover, there are a number of them that are unique and readers should be aware of them. This article is the eighth, and final, in a series.

So, what are some of these unique provisions of California’s Budget Bill?

Gubernatorial Vetoes

This section addresses what happens when the Governor uses his line-item veto authority to reduce or eliminate items of appropriation. The following is an example of language contained in the state budget bill:

SEC. 33.00.

If any item of appropriation in this act is vetoed, eliminated, or reduced by the Governor under Section 10 of Article IV of the California Constitution, while approving portions of this act, such veto, elimination, or reduction shall not affect the other portions of this act, and these other portions of this act, so approved, shall have the same effect in law as if any vetoed or eliminated items of appropriation had not been present in this act, and as if any reduced item of appropriation had not been reduced.

Severability Clause

This section is a standard severability clause in order to ensure that, even if a court strikes down one or more portions of the California Budget Bill, the remaining portions are in full effect. The following is an example of language contained in the state budget bill:

SEC. 34.00.

If any portion of this act is held unconstitutional, that decision shall not affect the validity of any other portion of this act. The Legislature hereby declares that it would have passed this act, and each portion thereof, irrespective of the fact that any other portion be declared unconstitutional.

Collecting Reimbursements

This section (Section 35.35) is intended to ensure that departments are required to make every reasonable effort to promptly collect reimbursements or amounts payable from other funds or departments, or collect the amounts in advance. This section of the California Budget Bill is intended to ensure cash needs in appropriation are met. It allows payments between departments to be made by transferring funds, and authorizes short-term cash loans. The following is an example of language found in the state budget bill:

(b) Notwithstanding any other law, if a department impacted by the implementation of FI$Cal demonstrates to the Department of Finance that it is unable to collect reimbursements or amounts payable from other funds or departments as specified in subdivision (a) and a temporary cash shortage arises for the department, the Director of Finance may authorize a short-term cash loan from the General Fund or from other funds administered or used by the requesting department. The cash loan shall be subject to the terms and conditions for repayment as may be prescribed by the Department of Finance. Interest charges may be waived pursuant to subdivision (e) of Section 16314 of the Government Code. Within 10 days after approval, the Director of Finance shall notify the Joint Legislative Budget Committee of loans approved pursuant to this subdivision.

General Fund Revenues

This section defines and sets forth the General Fund and its revenues. Specifically, “General Fund revenues” means the total resources available to the General Fund for a fiscal year before any transfer to or withdrawal from the Budget Stabilization Account. In addition, this section. This section of the California Budget Bill also contains a number of important estimates. The following is an example of language found in a recent state budget bill:

(b) For purposes of subdivision (g) of Section 12 of Article IV of the California Constitution, the estimate of General Fund revenues for the 2022–23 fiscal year pursuant to this act, as passed by the Legislature, is $246,703,000,000.

(c) For purposes of paragraph (2) of subdivision (a) of Section 20 of Article XVI of the California Constitution, “General Fund revenues” shall be defined as revenues and transfers before any transfer to or withdrawal from the Budget Stabilization Account.

(d) Pursuant to subdivision (h) of Section 20 of Article XVI of the California Constitution, the following estimates are provided:

(1) For purposes of paragraph (2) of subdivision (a) of Section 20 of Article XVI of the California Constitution, the sum equal to 1.5 percent of General Fund revenues for the 2022–23 fiscal year is $3,239,000,000.

(2) For purposes of clause (ii) of subparagraph (B) of paragraph (1) of subdivision (b) of Section 20 of Article XVI of the California Constitution, capital gain revenues that exceed 8 percent of General Fund proceeds of taxes for the 2022–23 fiscal year is $5,854,000,000.

(3) For purposes of subparagraph (F) of paragraph (1) of subdivision (b) of Section 20 of Article XVI of the California Constitution, the amount of transfer to the Budget Stabilization Account in the 2022–23 fiscal year is $2,958,000,000.

(4) For purposes of clause (ii) of subparagraph (B) of paragraph (2) of subdivision (b) of Section 20 of Article XVI of the California Constitution, the updated estimate of capital gain revenues that exceeds 8 percent of General Fund proceeds of taxes for the 2021–22 fiscal year is $10,499,000,000.

(5) For purposes of subparagraph (G) of paragraph (2) of subdivision (b) of Section 20 of Article XVI of the California Constitution, the first true up of the transfer to the Budget Stabilization Account for the 2021–22 fiscal year is $2,240,000,000.

(6) For purposes of clause (ii) of subparagraph (B) of paragraph (2) of subdivision (b) of Section 20 of Article XVI of the California Constitution, the updated capital gain revenues that exceed 8 percent of General Fund proceeds of taxes for the 2020–21 fiscal year is $8,683,000,000.

(7) For purposes of subparagraph (G) of paragraph (2) of subdivision (b) of Section 20 of Article XVI of the California Constitution, the second true up of the transfer to the Budget Stabilization Account for the 2020–21 fiscal year is $2,304,000,000.

Funds to the Budget Deficit Savings Account

This section provides for the amount for the fiscal year that will be transferred to the Budget Deficit and Infrastructure Savings Account. The following is an example of language found in a recent state budget bill:

SEC. 35.70.

Notwithstanding any other law, through June 30, 2023, 50 percent of any 2021–22 fiscal year and 2022–23 fiscal year General Fund revenues above the 2022 Budget Act revenue forecast not required to fund baseline and caseload requirements of programs authorized in the 2022 budget package, emergency expenditures authorized by law, and constitutional obligations, including, but not limited to, obligations pursuant to Proposition 98 and Proposition 2, shall be transferred to the Budget Deficit and Infrastructure Savings Account.

Budget Bill and Other Bills Related to the Budget

In these sections, it provides that the California Budget Bill is the one identified in the state Constitution, along with a listing of the “other bills providing for appropriations related to the Budget Bill.” This is required for purposes of complying with Proposition 25, which was adopted by the voters to allow a majority vote for the state budget bill and related appropriations bills. The following is recent language contained in the state budget bill:

SEC. 38.00.

This act is a Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution and shall take effect immediately.

SEC. 39.00.

The Legislature hereby finds and declares that the following bills are other bills providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution: AB 178, AB 180, AB 181, AB 182, AB 183, AB 184, AB 185, AB 186, AB 187, AB 188, AB 189, AB 190, AB 191, AB 192, AB 193, AB 194, AB 195, AB 196, AB 197, AB 198, AB 199, AB 200, AB 201, AB 202, SB 178, SB 180, SB 181, SB 182, SB 183, SB 184, SB 185, SB 186, SB 187, SB 188, SB 189, SB 190, SB 191, SB 192, SB 193, SB 194, SB 195, SB 196, SB 197, SB 198, SB 199, SB 200, SB 201, and SB 202.

Budget Title Index

There is also contained in the California Budget Bill an “Index by Budget Title” that is found in Section 99 of the state budget bill. This section provides an index to all of the appropriations and related provisions of the state budget bill by organization, in alphabetical order, with the code number of the affected organization.

The organization code is the first four numbers of any item number in this act. “For ease of reference, the appropriation items in this act are organized in numerical order, and all of the appropriation items for any one organization are adjacent to one another.”

Control Sections Index

There is also contained in the California Budget Bill an “Index for Control Sections” that is found in Section 99.50 of the state budget bill. This section provides an index to the general sections of the state budget act. And, these sections “serve to define terms and identify restrictions concerning the appropriations contained in this [state budget] act.”

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