(a)
There is in the State Treasury the Behavioral Health Services (BHS) Fund. The estimated revenue from the additional tax imposed under Section 17043 for the applicable fiscal year, as determined under subparagraph (B) of paragraph (3) of subdivision (c), shall be deposited to the BHS Fund on a monthly basis, subject to an annual adjustment as described in this section.
(b)
(1)
Each fiscal year, the Controller shall deposit on a monthly basis in the BHS Fund an amount equal to the applicable percentage of net personal income tax receipts as defined in paragraph (4).
(2)
The
applicable percentage referred to in paragraph (1) shall be 1.76 percent.
(3)
Monthly deposits to the BHS Fund pursuant to this subdivision are subject to suspension pursuant to subdivision (f).
(4)
For purposes of this subdivision, “net personal income tax receipts” refers to amounts received by the Franchise Tax Board and the Employment Development Department under the Personal Income Tax Law, as reported by the Franchise Tax Board to the Department of Finance pursuant to law, regulation, procedure, and practice (commonly referred to as the “102 Report”) in effect on the effective date of the act establishing this section.
(c)
No later than March 1, 2006, and each March 1 thereafter, the Department of Finance, in
consultation with the Franchise Tax Board, shall determine the annual adjustment amount for the following fiscal year.
(1)
The “annual adjustment amount” for a fiscal year shall be an amount equal to the amount determined by subtracting the “revenue adjustment amount” for the applicable revenue adjustment fiscal year, as determined by the Franchise Tax Board under paragraph (3), from the “tax liability adjustment amount” for applicable tax liability adjustment tax year, as determined by the Franchise Tax Board under paragraph (2).
(2)
(A)
(i)
The “tax liability adjustment amount” for a tax year is equal to the amount determined by subtracting the estimated tax liability increase from the additional tax imposed under Section 17043 for
the applicable year under subparagraph (B) from the amount of the actual tax liability increase from the additional tax imposed under Section 17043 for the applicable tax year, based on the returns filed for that tax year.
(ii)
For purposes of the determinations required under this paragraph, actual tax liability increase from the additional tax means the increase in tax liability resulting from the tax of 1 percent imposed under Section 17043 as reflected on the original returns filed by October 15 of the year after the close of the applicable tax year.
(iii)
The applicable tax year referred to in this paragraph means the 12-calendar month taxable year beginning on January 1 of the year that is two years before the beginning of the fiscal year for which an annual adjustment
amount is calculated.
(B)
The “estimated tax liability increase from the additional tax” for each tax year shall be determined by applying an annual growth rate of 7 percent to the “estimated tax liability increase from additional tax” of the immediately preceding tax year.
(3)
(A)
The “revenue adjustment amount” is equal to the amount determined by subtracting the “estimated revenue from the additional tax” for the applicable fiscal year, as determined under subparagraph (B), from the actual amount transferred for the applicable fiscal year.
(B)
(i)
The “estimated revenue from the additional tax” for each applicable fiscal year shall be determined by applying an annual growth rate
of 7 percent to the “estimated revenue from the additional tax” of the immediately preceding applicable fiscal year.
(ii)
The applicable fiscal year referred to in this paragraph means the fiscal year that is two years before the fiscal year for which an annual adjustment amount is calculated.
(d)
The Department of Finance shall notify the Legislature and the Controller of the results of the determinations required under subdivision (c) no later than 10 business days after the determinations are final.
(e)
If the annual adjustment amount for a fiscal year is a positive number, the Controller shall transfer that amount from the General Fund to the BHS Fund on July 1 of that fiscal year.
(f)
If the annual adjustment amount for a fiscal year is a negative number, the Controller shall suspend monthly transfers to the BHS Fund for that fiscal year, as otherwise required by paragraph (1) of subdivision (b), until the total amount of suspended deposits for that fiscal year equals the amount of the negative annual adjustment amount for that fiscal year.
(g)
To the extent that there are moneys remaining in the Mental
Health Services Fund on the date this section becomes operative, those moneys shall be transferred to the Behavioral Health Services Fund. Amounts owed or encumbered at the time of transfer shall be used in the manner required by the MHSA. Any funds not owed or encumbered by the MHSA may be used in the same manner as any other moneys in the BHS Fund.
(h)
This section shall become operative on January 1, 2025, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.
