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9A Page 21 and loan guarantees to assist truck retrofi#s praposed by ARB. Funds would be available to owners and opera#ors of an-road heavy-duty diesel-fueled motor vehicles for costs associated with early campliance with ARB air regulations. Props. 84 and 1 E.The budget makes severaf minor adjustments related to specific projects funded by Props. 84 and 1 E. Governor's Lotterv and Budqe#Reform Proposals Lottery Securitization.The revised budget includes a loftery securitization proposa!that is expected ta generate$5 billion in debt relief for FY 2009-10 and likely more in the following year. Proceeds will be used for budgetary borrowing, bonded indebtedness, and paymenis to the Budget Stabikization �und (SSF). it alsa includes provisions to protect educat+an from any decrease in funds. Budget Reform." Reform measures are based on recommendations from the Legislative Analyst's Office and include: . Changing the name of the 8udget Stabilization Accaunt to Budget Stabilizatian Fund and increasing the size of the BSF from 5 percent to 12.5 percent of General Fund Revenues; • New restrictions on transfers out of the BSF; • Capturing and depositing into the BSF any"Aprif Surprise" (revenues over 5 percent of projecfions)not needed #o fulfill Prop. 98 (education)requirements; • A11ows the Governor and Director of the Depar#ment of Finance to make mid-year reductions of General Fund expenditures if 1)General Fund total available resources for the fiscai year wili dec{ine substantiaf►y below the estimate of total General Fund resources assumed in the Budget Act; ar, 2)General Fund expendi#ures will increase substantially above the estimate of Generai Fund resources avaiiabfe; • Aflows the Governor and Direc#or of the Department of Finance to suspend C�st of Living Adjustments(COLA)for up to 120 days, or until the Legislature sends to the Governor legislation to address a fiscal emergency if one is declared. 'This proposa!requires voter approval, and a specia/election in 2009 is expecfed. State Revenues FinaE and complete details on the revenue portion of the budget are not avaifable at the time of #his writing. Howaver, it is expected that the foElowing pravisions will be included: • No income tax increases for upper income levels or dependent credit reductions. . No increases in corporate tax rates.However, penalties for corporations wha are consistently delinquent on taxes will double from 'i 0 percent to 20 percent. . An estima#ed$2.3 billion from accelerating tax payments for corpora#ions and individuals who make quarterly tax payments. . The Govemor's accrual accounting change, far about�1.9 biifion in revenue. • Expansion of the Net Operating Loss suspension proposal by also limiting various incentive credits for two years,for increased revenues of about$900 million. • Closes the yacht tax loophole by reinstating fhe 12 month use tax presumption for yachts and aircrafts purchased out of state and brought into California. During FY 2008-09, this is estimated to generate$17 milfion for the state and$11.8 milfion for local governments. • Authorization for loans and transfers of$855 million from various special funds to the General �und. FY 2008-Q9 Budget Bills Passed by the Legislature The League prepared a chart outlining the FY 2008-Q9 budget bilis passed Eay the Legislature. Note:The Carrections Trailer Bill (AB 841}and#he bond for the Correc#ions receiver(AB 1189) were not taken up, and therefore not passed.Two additional measures failed in the 5enate—a bi!!to create a Film Commission to award grants to movie stud'sos and a bill related to the Sentinel pawer plant. 5