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AB-1640 Local government finance: budget reserves.(2019-2020)

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Date Published: 02/22/2019 09:00 PM
AB1640:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1640


Introduced by Assembly Member Boerner Horvath
(Principal coauthor: Assembly Member Gloria)

February 22, 2019


An act to add Section 50058 to the Government Code, relating to local government budget reserves.


LEGISLATIVE COUNSEL'S DIGEST


AB 1640, as introduced, Boerner Horvath. Local government finance: budget reserves.
Existing law requires the officer of each local agency, who has charge of the financial records of the local agency, to furnish to the Controller a report of all the financial transactions of the local agency during the next preceding fiscal year within a specified amount of time of the close of each fiscal year. Existing law requires the report to include, among other things, the aggregate amount of taxes levied, as specified, and the total expenditures made by administrative departments during the preceding fiscal year.
This bill would require a local government by September 1, 2020, and annually thereafter, to submit a written report to the State Controller’s office on how it plans to spend any of its budget reserves, as defined, on specified priorities over a 5-year fiscal period, including, among others, mental and behavioral health services and affordable housing. The bill would provide this reporting requirement only applies to a local government if the local government’s budget reserve in the immediately preceding fiscal year was in excess of 30 percent of the total expenditures of the local government in that fiscal year. By placing new reporting requirements on local governments, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares as follows:
(a) Some cities and counties hold high levels of budget reserves, often in excess of 50 percent, while human services, homelessness, the housing crisis, and other important health and safety concerns remain unaddressed and unfunded.
(b) It is important to hold cities and counties accountable for failing to address critical needs of the people in their communities.

SEC. 2.

 Section 50058 is added to the Government Code, to read:

50058.
 (a) On or before September 1, 2020, and annually on that date thereafter, each local government shall submit a written report to the State Controller’s office on how it plans to spend any of its budget reserves, subject to subdivision (b), during the next five fiscal years on the following priorities:
(1) Mental and behavioral healthcare and services.
(2) Affordable housing.
(3) Homelessness.
(4) Foster youth programs.
(5) LGBTQ+ centers.
(6) Veterans services.
(7) Special needs youth and adult services.
(8) In-home supportive services.
(b) This section shall only apply to a local government if the local government’s budget reserve in the immediately preceding fiscal year was in excess of 30 percent of the total expenditures of the local government in that fiscal year.
(c) For purposes of this section:
(1) “Budget reserves” means an amount that is the difference between the total revenue of the local government in a fiscal year, including all revenue generated by taxes, assessments, and fees, and the total expenditures of that local government in that fiscal year.
(2) “Local government” means a city, including a charter city, or a county.

SEC. 3.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.