BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                  AB 2408|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  AB 2408
          Author:   Smyth (R)
          Amended:  8/5/10 in Senate
          Vote:     21

           
           SENATE GOVERNMENTAL ORG. COMMITTEE  :  8-0, 6/22/10
          AYES:  Wright, Harman, Calderon, Florez, Negrete McLeod,  
            Padilla, Price, Yee
          NO VOTE RECORDED:  Denham, Oropeza, Wyland

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8 

          ASSEMBLY FLOOR  :  73-0, 5/17/10 - See last page for vote


           SUBJECT  :    State government information technology

           SOURCE  :     Author


           DIGEST  :    This bill codifies the Governors 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."

           Senate Floor Amendments  of 8/5/10 make technical changes to  
          correct a drafting error.

           ANALYSIS  :    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  
                                                           CONTINUED





                                                               AB 2408
                                                                Page  
          2

          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 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  
          Privacy Protection, and instead created the Office of  
          Information Security within the OCIO, and the Office of  
          Privacy Protection within the Consumer Services Agency,  
          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.

          This bill:

          1.Renames OCIO to the California Technology Agency (CTA)  

                                                           CONTINUED





                                                               AB 2408
                                                                Page  
          3

            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 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 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.

                                                           CONTINUED





                                                               AB 2408
                                                                Page  
          4


           Background
           
          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.

          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,  

                                                           CONTINUED





                                                               AB 2408
                                                                Page  
          5

          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.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  8/5/10)

          Office of the State Chief Information Officer

           OPPOSITION  :    (Verified  8/5/10)

          Secretary of State

           ARGUMENTS IN SUPPORT  :    The intent of this bill 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  
          program for greater coordination and efficiency while  
          reducing costs and saving the state approximately $1.5  
          billion over the next five years.

           ARGUMENTS IN OPPOSITION  :    According to the Secretary of  
          State, under GRP 1, constitutional officers are provided  
          certain exemptions from the policies of the OCIO thereby  
          allowing them to retain their constitutional autonomy.  The  
          Secretary of State contends that this bill gives the OCIO  
          greater authority than it currently exercises under GRP 1  
          over the information technology policies and practices of  
          the independently elected constitutional officers.  The  
          Secretary of State contends that this bill will hinder the  
          ability to make their own business decisions which  
          otherwise will likely cost millions of dollars if required  
          to adhere to the telecommunications infrastructure policies  

                                                           CONTINUED





                                                               AB 2408
                                                                Page  
          6

          dictated by the OCIO.  The Secretary of State points out  
          that through its business practices, they have been able to  
          reduce their telecommunications costs through a series of  
          policies which would have to be abandoned if this bill  
          takes effect.
           
           
          ASSEMBLY FLOOR  :  
          AYES:  Adams, Ammiano, Anderson, Arambula, Beall, Bill  
            Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,  
            Bradford, Brownley, Buchanan, Charles Calderon, Carter,  
            Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,  
            DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,  
            Fuentes, Fuller, Gaines, Galgiani, Garrick, Gilmore,  
            Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,  
            Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie  
            Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,  
            Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,  
            Salas, Saldana, Skinner, Smyth, Solorio, Audra  
            Strickland, Swanson, Torlakson, Torres, Torrico, Tran,  
            Villines, John A. Perez
          NO VOTE RECORDED:  Bass, Caballero, Furutani, Norby, Silva,  
            Yamada, Vacancy


          TSM:nl  8/5/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****















                                                           CONTINUED