SEC. 4. Section 36 of Article XIII of the California Constitution is amended to read:

SEC. 36. (a) For purposes of this section:

(1) "Public Safety Services" includes the following:
(A) Employing and training public safety officials, including law enforcement personnel,
attorneys assigned to criminal proceedings, and court security staff.
(B) Managing local jails and providing housing, treatment, and services for, and supervision of,
juvenile and adult offenders.
(C) Preventing child abuse, neglect, or exploitation; providing services to children and youth
who are abused, neglected, or exploited, or who are at risk of abuse, neglect, or exploitation, and
the families of those children; providing adoption services; and providing adult protective
services.
(D) Providing mental health services to children and adults to reduce failure in school, harm to
self or others, homelessness, and preventable incarceration or institutionalization.
(E) Preventing, treating, and providing recovery services for substance abuse.

(2) "2011 Realignment Legislation" means legislation enacted on or before September 30, 2012,
to implement the state budget plan, that is entitled 2011 Realignment and provides for the
assignment of Public Safety Services responsibilities to local agencies, including related
reporting responsibilities. The legislation shall provide local agencies with maximum flexibility
and control over the design, administration, and delivery of Public Safety Services consistent
with federal law and funding requirements, as determined by the Legislature. However, 2011
Realignment Legislation shall include no new programs assigned to local agencies after January
1, 2012, except for the early periodic screening, diagnosis, and treatment (EPSDT) program and
mental health managed care.
(b) (1) Except as provided in subdivision (d), commencing in the 2011-12 fiscal year and
continuing thereafter, the following amounts shall be deposited into the Local Revenue Fund
2011, as established by Section 30025 of the Government Code, as follows:
(A) All revenues, less refunds, derived from the taxes described in Sections 6051.15 and 6201.15
of the Revenue and Taxation Code, as those sections read on July 1, 2011.
(B) All revenues, less refunds, derived from the vehicle license fees described in Section 11005
of the Revenue and Taxation Code, as that section read on July 1, 2011.
(2) On and after July 1, 2011, the revenues deposited pursuant to paragraph (1) shall not be
considered General Fund revenues or proceeds of taxes for purposes of Section 8 of Article XVI
of the California Constitution.
(c) (1) Funds deposited in the Local Revenue Fund 2011 are continuously appropriated
exclusively to fund the provision of Public Safety Services by local agencies. Pending full
implementation of the 2011 Realignment Legislation, funds may also be used to reimburse the
State for program costs incurred in providing Public Safety Services on behalf of local agencies.
The methodology for allocating funds shall be as specified in the 2011 Realignment Legislation.
(2) The county treasurer, city and county treasurer, or other appropriate official shall create a
County Local Revenue Fund 2011 within the treasury of each county or city and county. The
money in each County Local Revenue Fund 2011 shall be exclusively used to fund the provision
of Public Safety Services by local agencies as specified by the 2011 Realignment Legislation.

(3) Notwithstanding Section 6 of Article XIII B, or any other constitutional provision, a mandate
of a new program or higher level of service on a local agency imposed by the 2011 Realignment
Legislation, or by any regulation adopted or any executive order or administrative directive
issued to implement that legislation, shall not constitute a mandate requiring the State to provide
a subvention of funds within the meaning of that section. Any requirement that a local agency
comply with Chapter 9 ( commencing with Section 54950) of Part 1 of Division 2 of Title 5 of
the Government Code, with respect to performing its Public Safety Services responsibilities, or
any other matter, shall not be a reimbursable mandate under Section 6 of Article XIII B.

(4) (A) Legislation enacted after September 30, 2012, that has an overall effect of increasing the
costs already borne by a local agency for programs or levels of service mandated by the 2011
Realignment Legislation shall apply to local agencies only to the extent that the State provides
annual funding for the cost increase. Local agencies shall not be obligated to provide programs
or levels of service required by legislation, described in this subparagraph, above the level for
which funding has been provided.
(B) Regulations, executive orders, or administrative directives, implemented after October 9,
2011, that are not necessary to implement the 2011 Realignment Legislation, and that have an
overall effect of increasing the costs already borne by a local agency for programs or levels of
service mandated by the 2011 Realignment Legislation, shall apply to local agencies only to the
extent that the State provides annual funding for the cost increase. Local agencies shall not be
obligated to provide programs or levels of service pursuant to new regulations, executive orders,
or administrative directives, described in this subparagraph, above the level for which funding
has been provided.
(C) Any new program or higher level of service provided by local agencies, as described in
subparagraphs (A) and (B), above the level for which funding has been provided, shall not
require a subvention of funds by the State nor otherwise be subject to Section 6 of Article XIII B.
This paragraph shall not apply to legislation currently exempt from subvention under paragraph
(2) of subdivision ( a) of Section 6 of Article XIII B as that paragraph read on January 2, 2011.
(D) The State shall not submit to the federal government any plans or waivers, or amendments to
those plans or waivers, that have an overall effect of increasing the cost borne by a local agency
for programs or levels of service mandated by the 2011 Realignment Legislation, except to the
extent that the plans, waivers, or amendments are required by federal law, or the State provides
annual funding for the cost increase.
(E) The State shall not be required to provide a subvention of funds pursuant to this paragraph
for a mandate that is imposed by the State at the request of a local agency or to comply with
federal law. State funds required by this paragraph shall be from a source other than those
described in subdivisions (b) and ( d), ad valorem property taxes, or the Social Services
Subaccount of the Sales Tax Account of the Local Revenue Fund.
(5) (A) For programs described in subparagraphs (C) to (E), inclusive, of paragraph (1) of
subdivision (a) and included in the 2011 Realignment Legislation, if there are subsequent
changes in federal statutes or regulations that alter the conditions under which federal matching
funds as described in the 2011 Realignment Legislation are obtained, and have the overall effect
of increasing the costs incurred by a local agency, the State shall annually provide at least 50
percent of the nonfederal share of those costs as determined by the State.
(B) When the State is a party to any complaint brought in a federal judicial or administrative
proceeding that involves one or more of the programs described in subparagraphs (C) to (E),
inclusive, of paragraph (1) of subdivision (a) and included in the 2011 Realignment Legislation,
and there is a settlement or judicial or administrative order that imposes a cost in the form of a
monetary penalty or has the overall effect of increasing the costs already borne by a local agency
for programs or levels of service mandated by the 2011 Realignment Legislation, the State shall
annually provide at least 50 percent of the nonfederal share of those costs as determined by the
State. Payment by the State is not required if the State determines that the settlement or order
relates to one or more local agencies failing to perform a ministerial duty, failing to perform a
legal obligation in good faith, or acting in a negligent or reckless manner.
( C) The state funds provided in this paragraph shall be from funding sources other than those
described in subdivisions (b) and ( d), ad valorem property taxes, or the Social Services
Subaccount of the Sales Tax Account of the Local Revenue Fund.

(6) If the State or a local agency fails to perform a duty or obligation under this section or under
the 2011 Realignment Legislation, an appropriate party may seek judicial relief. These
proceedings shall have priority over all other civil matters.

(7) The funds deposited into a County Local Revenue Fund 2011 shall be spent in a manner
designed to maintain the State's eligibility for federal matching funds, and to ensure compliance
by the State with applicable federal standards governing the State's provision of Public Safety
Services.

(8) The funds deposited into a County Local Revenue Fund 2011 shall not be used by local
agencies to supplant other funding for Public Safety Services.
(d) If the taxes described in subdivision (b) are reduced or cease to be operative, the State shall
annually provide moneys to the Local Revenue Fund 2011 in an amount equal to or greater than
the aggregate amount that otherwise would have been provided by the taxes described in
subdivision (b). The method for determining that amount shall be described in the 2011
Realignment Legislation, and the State shall be obligated to provide that amount for so long as
the local agencies are required to perform the Public Safety Services responsibilities assigned by
the 2011 Realignment Legislation. If the State fails to annually appropriate that amount, the
Controller shall transfer that amount from the General Fund in pro rata monthly shares to the
Local Revenue Fund 2011. Thereafter, the Controller shall disburse these amounts to local
agencies in the manner directed by the 2011 Realignment Legislation. The state obligations
under this subdivision shall have a lower priority claim to General Fund money than the first
priority for money to be set apart under Section 8 of Article XVI and the second priority to pay
voter-approved debts and liabilities described in Section 1 of Article XVI.
(e) (1) To ensure that public education is not harmed in the process of providing critical
protection to local Public Safety Services, the Education Protection Account is hereby created in
the General Fund to receive and disburse the revenues derived from the incremental increases in
taxes imposed by this section, as specified in subdivision (f).
(2) (A) Before June 30, 2013, and before June 30 of each year thereafter, the Director of Finance shall estimate the total amount of additional revenues, less refunds, that will be derived from the incremental increases in tax rates made in subdivision (f) that will be available for transfer into the Education Protection Account during the next fiscal year. The Director of Finance shall make the same estimate by January 10, 2013, for additional revenues, less refunds, that will be received by the end of the 2012-13 fiscal year.
(B) During the last 10 days of the quarter of each of the first three quarters of each fiscal year
beginning in 2013-14, the Controller shall transfer into the Education Protection Account one-fourth of the total amount estimated pursuant to subparagraph (A) for that fiscal year, except as this amount may be adjusted pursuant to subparagraph (D).
(C) In each fiscal years from beginning in 2012-13. the Director of Finance shall calculate an adjustment to the Education Protection Account, as specified by subparagraph (D), by adding together the following amounts, as applicable:
(i) In the last quarter of each fiscal year beginning in 2012-13, the Director of Finance shall recalculate the estimate made for the fiscal year pursuant to subparagraph (A), and shall subtract from this updated estimate the amounts previously transferred to the Education Protection Account for that fiscal year.
(ii) In June 2015 and in every June thereafter, the Director of Finance shall make a final determination of the amount of additional revenues, less refunds, derived from the incremental increases in tax rates made in subdivision (f) for the fiscal year ending two years prior. The amount of the updated estimate calculated in clause (i) for the fiscal year ending two years prior shall be subtracted from the amount of this final determination.
(D) If the sum determined pursuant to subparagraph (C) is positive, the Controller shall transfer
an amount equal to that sum into the Education Protection Account within 10 days preceding the
end of the fiscal year. If that amount is negative, the Controller shall suspend or reduce
subsequent quarterly transfers, if any, to the Education Protection Account until the total
reduction equals the negative amount herein described. For purposes of any calculation made
pursuant to clause (i) of subparagraph (C), the amount of a quarterly transfer shall not be
modified to reflect any suspension or reduction made pursuant to this subparagraph.
(E) Before June 30, 2018, and before June 30 of each year from 2019 to 2030, inclusive, the
Director of Finance shall estimate the amount of the additional revenues, less refunds, to be
derived in the following fiscal year from the incremental increases in tax rates made in
subdivision (f), that, when combined with all other available General Fund revenues, will be
required to meet:
(i) The minimum funding guarantee of Section 8 of Article XVI for that following fiscal year;
and
(ii) The workload budget for that following fiscal year, excluding any program expenditures
already accounted for through clause (i). For purposes of this section, "workload budget" has the
meaning set forth in Section 13308.05 of the Government Code, as that section read and was
interpreted by the Department of Finance on January 1, 2016, provided, however, that "currently
authorized services" shall mean only those services that would have been considered "currently
authorized services" under Section 13308.05 of the Government Code as of January 1, 2016.
(F) In order to enhance the ability of all California school children and their families to receive
regular, quality health care and thereby minimize school absenteeism due to health-related
problems, whenever the Director of Finance estimates that the amount available for transfer into
the Education Protection Account during the following fiscal year exceeds the amount of
revenues required from that account pursuant to subparagraph (E) for that following fiscal year,
the director shall identify the remaining amount. Fifty percent of that remainder, up to a
maximum of two billion dollars in any single fiscal year, shall be allocated by the Controller
from the Education Protection Account to the California Department of Health Care Services on
a quarterly basis to increase funding for the existing health care programs and services described
in Chapter 7 (commencing with Section 14000) to Chapter 8.9 (commencing with Section
14700), inclusive, of Part 3 of Division 9 of the Welfare and Institutions Code. The funding shall
be used only for critical, emergency, acute, and preventive health care services to children and
their families, provided by health care professionals and health facilities that are licensed
pursuant to Section 1250 of the Health and Safety Code, and to health plans or others that
manage the provision of health care for Medi-Cal beneficiaries that are contracting with the
California Department of Health Care Services to provide health benefits pursuant to this section.
(G) The allocation provided for in subparagraph (F) may be suspended by statute during a fiscal
year in which a budget emergency has been declared, provided, however, that the allocation shall
not be reduced beyond the proportional reduction in overall General Fund expenditures for that
year. For purposes of this section, "budget emergency" has the same meaning as in paragraph (2)
of subdivision (b) of Section 22 of Article XVI.
(H) The funding provided pursuant to subparagraph (F) shall not be used to supplant existing
state General Funds for the nonfederal share of payments for those programs and, consistent with
federal law, shall be used to obtain federal matching Medicaid funds.
(3) All moneys in the Education Protection Account are hereby continuously appropriated for the
support of school districts, county offices of education, charter schools, and community college
districts as set forth in this paragraph, and for health care as set forth in subparagraph (F) of
paragraph (2).
(A) Eleven percent of the moneys appropriated for education pursuant to this paragraph shall be
allocated quarterly by the Board of Governors of the California Community Colleges to
community college districts to provide general purpose funding to community college districts in
proportion to the amounts determined pursuant to Section 84750.5 of the Education Code, as that code section read on November 6, 2012. The allocations calculated pursuant to this subparagraph shall be offset by the amounts specified in subdivisions (a), (c), and (d) of Section 84751 of the Education Code, as that section read on November 6, 2012, that are in excess of the amounts calculated pursuant to Section 84750.5 of the Education Code, as that section read on November 6, 2012, provided that no community college district shall receive less than one hundred dollars ($100) per full time equivalent student.
(B) Eighty-nine percent of the moneys appropriated for education pursuant to this paragraph
shall be allocated quarterly by the Superintendent of Public Instruction to provide general
purpose funding to school districts, county offices of education, and state general-purpose
funding to charter schools in proportion to the revenue limits calculated pursuant to Sections
2558 and 42238 of the Education Code and the amounts calculated pursuant to Section 47633 of
the Education Code for county offices of education, school districts, and charter schools,
respectively, as those sections read on November 6, 2012. The amounts so calculated shall be
offset by the amounts specified in subdivision (c) of Section 2558 of, paragraphs (1) through (7)
of subdivision (h) of Section 42238 of, and Section 47635 of, the Education Code for county
offices of education, school districts, and charter schools, respectively, as those sections read on
November 6, 2012, that are in excess of the amounts calculated pursuant to Sections 2558,
42238, and 47633 of the Education Code for county offices of education, school districts, and
charter schools, respectively, as those sections read on November 6, 2012, provided that no
school district, county office of education, or charter school shall receive less than two hundred
dollars ($200) per unit of average daily attendance.
(4) This subdivision is self-executing and requires no legislative action to take effect.
Distribution of the moneys in the Education Protection Account by the Board of Governors of
the California Community Colleges and Superintendent of Public Instruction shall not be delayed
or otherwise affected by failure of the Legislature and Governor to enact an annual budget bill
pursuant to Section 12 of Article IV, by invocation of subdivision (h) of Section 8 of Article
XVI, or by any other action or failure to act by the Legislature or Governor.
(5) Notwithstanding any other provision of law, the moneys deposited in the Education
Protection Account for education shall not be used to pay any costs incurred by the Legislature,
the Governor, or any agency of state government.
( 6) A community college district, county office of education, school district, or charter school
shall have sole authority to determine how the moneys received from the Education Protection
Account are spent in the school or schools within its jurisdiction, provided, however, that the
appropriate governing board or body shall make these spending determinations in open session
of a public meeting of the governing board or body and shall not use any of the funds from the
Education Protection Account for salaries or benefits of administrators or any other
administrative costs. Each community college district, county office of education, school district,
and charter school shall annually publish on its Internet Web site an accounting of how much
money was received from the Education Protection Account and how that money was spent.
(7) The annual independent financial and compliance audit required of community college
districts, county offices of education, school districts, and charter schools shall, in addition to all
other requirements of law, ascertain and verify whether the funds provided from the Education
Protection Account have been properly disbursed and expended as required by this section.
Expenses incurred by those entities to comply with the additional audit requirement of this
section may be paid with funding from the Education Protection Account and shall not be
considered administrative costs for purposes of this section.
(8) Revenues, less refunds, derived pursuant to subdivision (t) for deposit in the Education
Protection Account pursuant to this section shall be deemed "General Fund revenues," "General
Fund proceeds of taxes," and "moneys to be applied by the State for the support of school
districts and community college districts" for purposes of Section 8 of Article XVI.
(t) (1) (A) In addition to the taxes imposed by Part 1 (commencing with Section 6001) of
Division 2 of the Revenue and Taxation Code, for the privilege of selling tangible personal
property at retail, a tax is hereby imposed upon all retailers at the rate of 1/4 percent of the gross
receipts of any retailer from the sale of all tangible personal property sold at retail in this State on
and after January 1, 2013, and before January 1, 2017.
(B) In addition to the taxes imposed by Part 1 (commencing with Section 6001) of Division 2 of
the Revenue and Taxation Code, an excise tax is hereby imposed on the storage, use, or other
consumption in this State of tangible personal property purchased from any retailer on and after
January 1, 2013, and before January 1, 2017, for storage, use, or other consumption in this state
at the rate of 1/4 percent of the sales price of the property.
(C) The Sales and Use Tax Law, including any amendments enacted on or after the effective date
of this section, shall apply to the taxes imposed pursuant to this paragraph.
(D) This paragraph shall become inoperative on January 1, 2017.
(2) For any taxable year beginning on or after January 1, 2012, with respect to the tax imposed pursuant to Section 17041 of the Revenue and Taxation Code, the income tax bracket and the rate of9.3 percent set forth in paragraph (1) of subdivision (a) of Section 17041 of the Revenue and Taxation Code shall be modified by each of the following:
(A) (i) For that portion of taxable income that is over two hundred fifty thousand dollars
($250,000) but not over three hundred thousand dollars ($300,000), the tax rate is 10.3 percent of the excess over two hundred fifty thousand dollars ($250,000).
(ii) For that portion of taxable income that is over three hundred thousand dollars ($300,000) but
not over five hundred thousand dollars ($500,000), the tax rate is 11.3 percent of the excess over
three hundred thousand dollars ($300,000).
(iii) For that portion of taxable income that is over five hundred thousand dollars ($500,000), the
tax rate is 12.3 percent of the excess over five hundred thousand dollars ($500,000).
(B) The income tax brackets specified in clauses (i), (ii), and (iii) of subparagraph (A) shall be
recomputed, as otherwise provided in subdivision (h) of Section 17041 of the Revenue and
Taxation Code, only for taxable years beginning on and after January 1, 2013.
(C) (i) For purposes of subdivision (g) of Section 19136 of the Revenue and Taxation Code, this
paragraph shall be considered to be chaptered on November 6, 2012.
(ii) For purposes of Part 10 (commencing with Section 17001) of, and Part 10.2 (commencing
with Section 18401) of, Division 2 of the Revenue and Taxation Code, the modified tax brackets
and tax rates established and imposed by this paragraph shall be deemed to be established and
imposed under Section 17041 of the Revenue and Taxation Code.
(3) For any taxable year beginning on or after January 1, 2012, with respect to the tax imposed pursuant to Section 17041 of the Revenue and Taxation Code, the income tax bracket and the rate of 9 .3 percent set forth in paragraph (1) of subdivision ( c) of Section 17041 of the Revenue and Taxation Code shall be modified by each of the following:
(A) (i) For that portion of taxable income that is over three hundred forty thousand dollars
($340,000) but not over four hundred eight thousand dollars ($408,000), the tax rate is 10.3
percent of the excess over three hundred forty thousand dollars ($340,000).
(ii) For that portion of taxable income that is over four hundred eight thousand dollars
($408,000) but not over six hundred eighty thousand dollars ($680,000), the tax rate is 11.3
percent of the excess over four hundred eight thousand dollars ($408,000).
(iii) For that portion of taxable income that is over six hundred eighty thousand dollars
($680,000), the tax rate is 12.3 percent of the excess over six hundred eighty thousand dollars
($680,000).
(B) The income tax brackets specified in clauses (i), (ii), and (iii) of subparagraph (A) shall be
recomputed, as otherwise provided in subdivision (h) of Section 17041 of the Revenue and
Taxation Code, only for taxable years beginning on and after January 1, 2013.
( C) (i) For purposes of subdivision (g) of Section 1913 6 of the Revenue and Taxation Code, this
paragraph shall be considered to be chaptered on November 6, 2012.
(ii) For purposes of Part 10 (commencing with Section 17001) of, and Part 10.2 (commencing
with Section 18401) of, Division 2 of the Revenue and Taxation Code, the modified tax brackets
and tax rates established and imposed by this paragraph shall be deemed to be established and
imposed under Section 17041 of the Revenue and Taxation Code.

(g) (1) The Controller, pursuant to his or her statutory authority, may perform audits of
expenditures from the Local Revenue Fund 2011 and any County Local Revenue Fund 2011, and
shall audit the Education Protection Account to ensure that those funds are used and accounted
for in a manner consistent with this section.
(2) The Attorney General or local district attorney shall expeditiously investigate, and may seek
civil or criminal penalties for, any misuse of moneys from the County Local Revenue Fund 2011
or the Education Protection Account.

SEC. 5. Conflicting Measures.

In the event that this measure and another measure that affects the tax rates for personal income
shall appear on the same statewide ballot, the provisions of the other measure or measures shall
be deemed to be in conflict with this measure. In the event that this measure receives a greater
number of affirmative votes than a measure deemed to be in conflict with it, the provisions of
this measure shall prevail in their entirety, and the other measure or measures shall be null and
void.

SEC. 6. Severability.

If the provisions of this act, or part thereof, are for any reason held to be invalid or
unconstitutional, the remaining provisions shall not be affected but shall remain in full force and
effect and to this end the provisions of this act are severable.

SEC. 7. Proponent Standing.
Notwithstanding any other provision of law, if the State, government agency, or any of its
officials fail to defend the constitutionality of this act, following its approval by the voters, any
other government employer, the proponent, or in his or her absence, any citizen of this State shall
have the authority to intervene in any court action challenging the constitutionality of this act for
the purpose of defending its constitutionality, whether such action is in trial court, on appeal, or
on discretionary review by the Supreme Court of California or the Supreme Court of the United
States. The fees and costs of defending the action shall be a charge on funds appropriated to the
Attorney General, which shall be satisfied promptly.