BILL ANALYSIS Bill No: AB 2408 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Roderick D. Wright, Chair 2009-2010 Regular Session Staff Analysis AB 2408 Author: Smyth As Amended: June 15, 2010 Hearing Date: June 22, 2010 Consultant: Chris Lindstrom SUBJECT State Chief Information Officer DESCRIPTION AB 2408 codifies the Governor's Reorganization Plan No. 1 (GRP 1) of 2009 which consolidated state information technology functions under the Office of the State Chief Information Officer and changes the name of the Office to the "California Technology Agency." Specifically, this measure: 1. Renames the Office of the State Chief Information Officer (OCIO) to the California Technology Agency (CTA) and the position of the State Chief Information Officer (SCIO) to the Secretary of California Technology and imposes additional duties on both regarding state information technology governance and implementation. 2. Transfers all aspects of the Division of Telecommunications from the Department of General Services (DGS) to the CTA and creates the positions of chief information officer and information security officer in various state agencies. 3. Transfers the Department of Technology Services from the State and Consumer Services Agency to the CTA. 4. Eliminates the Office of Information Security and Privacy Protection and instead creates the Office of AB 2408 (Smyth) continued Page 2 Information Security within the CTA and the Office of Privacy Protection in the State and Consumer Services Agency. 5. Renames the Department of Technology Services Revolving Fund to the Technology Services Revolving Fund and authorizes that Fund to receive revenues for services rendered by the CTA. Also, authorizes the CTA to collect payments from public agencies for services requested by the CTA and revises the conditions used to determine whether a balance remains in the Fund at the end of the year. (This Fund used to contain only revenues from one department but under the reorganization will contain multiple funds which must be separated for calculations.) 6. Deletes an obsolete requirement on the Office of Information Security to investigate and assist in the prosecution of crimes. (These activities are carried out by the Department of Justice.) 7. Changes the annual financial audit due date from more than 120 days following the close of the fiscal year, to no more than 120 days following the submittal of the annual financial statements. 8. Deletes the January 1, 2013 sunset on the provisions establishing the OCIO. 9. Makes other technical, clarifying and conforming changes. EXISTING LAW Existing law, the Governor's Reorganization Plan No. 1 of 2009 (GRP No. 1), transferred all the duties, functions, employees, property, and related funding of the Division of Telecommunications in the Department of General Services (DGS) to the Office of the State Chief Information Officer (OCIO). The plan also renamed and transferred the Department of Technology Services in the State and Consumer Services Agency (CSA) to the Office of the Department of Technology Services within the OCIO, renamed the Department of Technology Services Revolving Fund the Technology Services Revolving Fund, and made conforming changes. The plan also abolished the Office of Information Security and AB 2408 (Smyth) continued Page 3 Privacy Protection, and instead created the Office of Information Security within the OCIO, and the Office of Privacy Protection within the CSA, with a division of the duties, personnel, property, and funding of the Office of Information Security and Privacy Protection between the two offices. The plan also transferred duties relating to the state's procurement of information technology from the Department of Finance, the DGS, and the Department of Information Technology to the OCIO. Existing law, Government Code Section 12080 et seq, grants the Governor authority to propose administrative reorganization plans. The statute requires the Governor to submit any reorganization plan to the Milton Marks Commission on California State Government Organization and Economy (Little Hoover Commission) at least 30 days prior to submitting the plan to the Legislature. The Commission's role is to evaluate the plan and to make recommendations to the Governor and Legislature within 30 days of the date the plan is submitted to the Legislature. Pursuant to Government Code Section 12080.2, the Rules Committee of the Senate and the Speaker of the Assembly refer the Governor's Reorganization Plan to the appropriate standing committee(s) of their respective houses for study and a report. Existing law provides a 60-day time frame (60 calendar days of continuous legislative session) for the study and report by the standing committee. If the Legislature does not take action by adopting a resolution disapproving the plan, the reorganization plan becomes effective. BACKGROUND History: The Department of Information Technology (DOIT) was created by SB 1 (Alquist) of 1995 (Chapter 508) for the purpose of planning and overseeing the state's uses of information technology (IT). It was created as an independent state department that reported directly to the Governor rather than a cabinet level agency. The DOIT was responsible for ensuring that appropriate plans, policies, and procedures are in place to assure successful implementation of IT projects. DOIT struggled to meet its statutory mandates and the statutory provisions pertaining to DOIT became inoperative on July 1, 2002, when the Legislature refused to extend the sunset. AB 2408 (Smyth) continued Page 4 GRP 2 of 2005, established the Department of Technology Services (DTS) within the State and Consumer Services Agency, as a reorganized entity comprised of the former Stephen P. Teale Data Center, the California Health and Human Services Agency Data Center, and the Telecommunications Division of the Department of General Services. DTS was charged with responsibility for the planning, acquisition, and administration of state technology and telecommunications systems. In 2006, the Legislature enacted and the Governor signed SB 834 (Figueroa) which established the OCIO. SB 834 made the State CIO a member of the Governor's cabinet, with the position appointed by the Governor and subject to Senate confirmation. SB 834 also codified the responsibilities of the State CIO, making the State CIO the nominal leader for the Executive Branch's IT program. The 2007-2008 Budget and related legislation (SB 90 - Committee on Budget, Chapter 183 of 2007) substantially expanded on SB 834 and provided an appropriation to establish the OCIO. In May of 2009, the Governor's Reorganization Plan No.1 (GRP 1) was allowed to move forward by the Legislature, formally creating the OCIO as an Agency to consolidate statewide information technology functions under, and to consolidate software contracts, office automation tools, data centers, servers, and storage. The OCIO also has authority over IT procurement policy and enterprise IT management. Since the implementation of GRP 1, the Legislature has continued to expand the role and responsibilities of the OCIO. In July of 2009, as part of the special session budget package, the Legislature required the OCIO to review and make recommendations to the Joint Legislative Budget Committee regarding large IT projects (including the California Case Management System) at the Judicial Council. Purpose of AB 2408: The intent of this measure is to codify GRP No. 1 of 2009 - the GRP was allowed to go into effect in May 2009 based on 60 days having passed and no action on the part of the Legislature to disapprove it. According to the author's office, by creating a central IT organization, the state will leverage California's IT AB 2408 (Smyth) continued Page 5 program for greater coordination and efficiency while reducing costs and saving the state approximately $1.5 billion over the next 5 years. Staff Comments - Suggested Amendment : "Sunsets" are Important! The possibility exists that this new governmental entity - The California Technology Agency - may turn out to be a failure like the Department of Information Technology (DOIT). Thus, the committee may wish to reinstate the January 1, 2013 sunset provision to enable the Legislature to review and evaluate the worth of this new entity. PRIOR/RELATED LEGISLATION AB 1266 (Huber) of 2009-10 Session. Would codify the GRP 1 of 2009. (Held in Assembly Appropriations Committee) AB 618 (Blumenfield) 2009-10 Session. Requires the OCIO to submit a strategic plan by January 1, 2011, and every three years thereafter, that includes information on the key performance measures identified by the OCIO for the Governor's GRP NO.1 of 2009. (Held in Assembly Appropriations Committee) AB 617 (Blumenfield ) 2009-10 Session. Requires the OCIO to establish and enforce a state information technology (IT) strategic plan to protect the environment and reduce energy use. (Held in Assembly Appropriations Committee) SB 834 (Figueroa) Chapter 533, Statutes of 2006. Made the statutory changes necessary to reflect GRP 2 of 2005 which established the Department of Technology Services in state government under the Director of Technology Services within the Consumer Services Agency. SB 954 (Figueroa) Chapter 556, Statutes of 2005. Provided that DGS must conform to the Information Technology Procurement Guidelines for Best Practices when purchasing new information technology. AB 1559 (Diaz) Chapter 45, Statutes of 2002. Repealed sunset provisions governing the Department of Justice's AB 2408 (Smyth) continued Page 6 Hawkins Data Center, the Health and Human Services Agency Data Center, and the Stephen P. Teale Data Center. Also, allowed the Department of Information Technology (DOIT) to die by not extending its sunset date. AB 1624 (Zettel) 2001-02 Session. Would have renamed DOIT the Information Technology Agency and elevated the director of DOIT to Secretary of the new agency. Also, would have extended the sunset date to July 1, 2007 and would have made other substantive changes. (Died in Assembly policy committee) AB 2936 (Information Technology Committee) 1999-2000 Session. Would have eliminated the sunset date for the DOIT, the Hawkins Data Center, the Health and Human Services Data Center, and the Teale Data Center. (Died on Senate Appropriations Committee Suspense File) AB 1686 (Information Technology Committee) Chapter 873 of 1999. Extended sunset dates on the state's information data centers and the DOIT by 2 years (from July 1, 2000 to July 1, 2002). SB 1 (Alquist) Chapter 508, Statutes of 1995. Eliminated the Office of Information Technology and created the Department of Information Technology (DOIT) with expanded duties and authority. SUPPORT: Office of the State Chief Information Officer OPPOSE: None on file as of June 18, 2010. FISCAL COMMITTEE: Senate Appropriations Committee