Lawmakers voted 75-0 in the Assembly and 36-0 in the Senate to replace a rainy day fund measure already scheduled to go before voters this fall. The proposed constitutional amendment required a two-thirds vote in both houses and easily surpassed that threshold.
It does not require action by Gov. Jerry Brown, who negotiated the deal with legislative leaders of both parties.
Democratic and Republican lawmakers praised the compromise during debate in both houses.
"This is a genuine bipartisan proposal that will build on the progress we made in terms of stabilizing and strengthening California's finances," said Assemblyman John Perez, D-Los Angeles, who negotiated the deal before stepping down as speaker this week. "It represents a commitment to break the bad habits of the past."
The version that passed during a special legislative session Thursday, known as Assembly Constitutional Amendment 1, will create a reserve funded primarily from excess capital gains revenue during boom years as well as an annual contribution equal to 1.5 percent of the state's general fund. The set yearly contribution was a provision pushed by Republican lawmakers.
"I think it demonstrates to the people of California that when you have a robust bipartisan discussion, you can make things better because we all bring something to the table..." said Senate Minority Leader Bob Huff, R-Diamond Bar. "To that end, we wanted to make sure that it's truly a rainy day fund, and not an everyday fund."
If voters approve ACA1 in November, half the money in the fund will be dedicated to paying down California's long-term debts and liabilities for the next 15 years. The Legislative Analyst's Office has estimated those liabilities at $340 billion, mostly for public employee pension obligations and retiree health care costs.
The state's existing rainy day fund dates back a decade. It was first approved by voters in 2004 but was quickly drained and not refilled. The Legislature last contributed to it in 2007.
Former Republican Gov. Arnold Schwarzenegger negotiated a revised rainy day fund that was preferred by GOP lawmakers during a 2010 budget crisis, but it was delayed in going before voters two years ago. That version required a 3 percent annual contribution from the state's general fund.
The one now going before voters reduces the annual contribution to 1.5 percent but also requires it to be supplemented with capital gains tax revenue that soars when the economy and stock market take off. The rainy day fund can grow to a maximum of 10 percent of the state's general fund, which is expected to be nearly $108 billion in the next fiscal year.
Brown also wanted more flexibility in withdrawing from the fund. He said the earlier version negotiated under Schwarzenegger was too difficult to tap in case of emergencies, disasters or recessions.
Lawmakers from both parties said there were enough safeguards in place to ensure that the Legislature could not draw from the fund at will. In addition, transfers to the fund could be suspended and additional withdrawals could be made during a recession, but only within certain limits.
"While you may not believe it to be perfect, it is significantly stronger than existing law," Assembly Republican leader Connie Conway told members of her party before the vote.
The compromise also creates a reserve for education spending, which would not be implemented until school funding is fully restored to pre-recession levels.
Associated Press writer Judy Lin contributed to this report.