In 2005, the voters approved referendum C, which authorized the state to retain state revenues up to the excess state revenues cap to be spent on specified uses (excess state revenues). The general fund exempt account (account) was created within the general fund and it includes an amount equal to the excess state revenues. There is a statutorily required allocation of the money in the account for uses that are consistent with the uses approved by the voters in referendum C. The actual amount of the excess state revenues, however, is not known until after the last day of the fiscal year.
The act addresses the discrepancy between the amounts appropriated or transferred from the account and the actual amount of the excess state revenues. If the appropriations and transfers from the account are less than the actual excess state revenues, then some of the revenue in the general fund is also designated as excess state revenues. Appropriations from the general fund for medical and long-term care services for medicaid eligible individuals and the state share of districts' total program funding, or their successor line items, are designated as how the state uses this revenue. If the appropriations and transfers from the account are more than the actual excess state revenues, then a portion of the account, and a corresponding percentage of all appropriations and transfers from it, are designated as not being excess state revenues.
(Note: This summary applies to this bill as enacted.)