BILL ANALYSIS Ó
AB 202
Page 1
GOVERNOR'S VETO
AB 202 (Brownley)
As Amended August 15, 2011
2/3 vote
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|ASSEMBLY: |78-0 |(May 19, 2011) |SENATE: |24-14|(September 1, |
| | | | | |2011) |
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|ASSEMBLY: |77-0 |(September 6, | | | |
| | |2011) | | | |
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Original Committee Reference: ED.
SUMMARY : Implements changes related to streamlining the
state's process for the determination and reimbursement of
educational mandates, and requires additional or clarified
information to be provided to the Legislature on the
reimbursement of educational mandates. Specifically, this bill :
1)Augments existing reporting requirements on the State
Controller's Office (SCO), Commission on State Mandates (COSM)
and Legislative Analyst's Office (LAO), as specified, with
respect to reimbursable state mandates relating to local
educational agencies (LEA).
2)Authorizes a LEA test claimant to designate another LEA for
the purposes of drafting the Parameters and Guidelines,
developing the Estimate of Statewide Costs, or negotiating a
Reasonable Reimbursement Methodology (RRM).
3)Makes changes to the process and timeline whereby a LEA test
claimant and the Department of Finance (DOF) are authorized to
develop a RRM, including providing for mediation or
arbitration when the process is at an impasse.
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The Senate amendments delete a provision that provided for a
five year sunset on any new legislation that created a state
mandated local cost on a LEA, and eliminate a technical conflict
with other pending legislation.
EXISTING LAW :
1)Requires the state, under the California Constitution, to
reimburse local governments, including school districts,
whenever the Legislature or a state agency mandates a new
program or higher level of service, with specified exceptions.
2)Establishes a procedure for local government agencies to file
test claims and claims for reimbursement of these costs with
the COSM and the SCO; also, requires the COSM to hear and
decide upon each claim for reimbursement, to determine
activities to be reimbursed, and to adopt methodologies for
reimbursement.
3)Authorizes a test claimant and DOF to develop a RRM for the
reimbursement of mandated costs, to develop a draft RRM, and
to submit the draft RRM to the COSM for approval.
4)Requires the LAO to submit a report to the Legislature on the
mandates reported by the COSM, and requires that report to
make recommendations as to whether the mandate should be
repealed, funded, suspended, or modified.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : According to the Senate Appropriations Committee,
the required arbitration will generate likely minor, possibly
significant ongoing General Fund (GF) costs, streamlining LEA
mandates may create potential future GF costs with some
offsetting GF savings, and the notifications and reports will
create minor to significant ongoing GF funded workload.
COMMENTS : The California Constitution requires that local
governments be reimbursed for new programs or higher levels of
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service that the state imposes or mandates on them. Following
the enactment of a perceived mandate, school districts and
county offices of education (as well as other local government
entities) have one year to file a "test claim" with COSM,
asserting that the new requirements impose a new program or
higher level of service, and are therefore reimbursable. The
COSM is a quasi-judicial body that decides test claims alleging
that the Legislature or a state agency imposed a reimbursable
state-mandated local program. If the COSM identifies a
state-mandated program as eligible for reimbursement, it then
defines what activities will be reimbursed and adopts statewide
cost estimates.
Most eligible mandates are reimbursed on the basis of actual
costs. Claimants document each cost associated with the
activities identified, and submit that documentation to the SCO
along with their claims. This process is burdensome and prone
to clerical error; it also results in large administrative costs
on the claimant, large audit costs on the SCO, and a high
probability of claim reductions as a result of SCO audits.
Statutory changes enacted in the last four Legislative sessions
have put alternative reimbursement processes in place in an
attempt to move the reimbursement of some mandates away from an
actual cost basis and toward a formulaic reimbursement approach;
the RRM process is one of those alternative processes. Under
the RRM process, a test claimant may join with DOF to develop
and propose a RRM and statewide estimate of costs for
reimbursement of a mandated program. By statute, the RRM is
required to be based, where possible, on a general allocation
formula, uniform cost allowance, or some other approximation of
the local costs mandated; in other words the RRM process is
meant to provide for a method for calculating reimbursable costs
that is a simpler alternative to the detailed documentation
required for the reimbursement of actual costs. However,
current law establishes a process that suffers from delays, and
provides little incentive for negotiations, compromise or
resolution; as a result, no educational mandate claim has
successfully negotiated the RRM process to date.
In October 2009, after conducting a follow-up of its 2003 audit
on state mandates, the California State Auditor issued an audit
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report concerning state mandate determination and payment
processes; two findings and recommendations of the State Auditor
form the basis for the proposals in this bill: 1) increase
information available to the Legislature on mandates; and, 2)
alternative processes, such as the RRM, reduce workload and
costs. The author's stated intent is to implement changes in
the mandate reimbursement process in order to 1) streamline the
process and reduce the workload of the COSM, other state
agencies and local educational agencies; and, 2) ensure that
increased information on educational mandates is provided to the
Legislature. This bill reduces processing time and
administrative costs for all claims, and increases the
probability that a RRM will be established.
GOVERNOR'S VETO MESSAGE :
"This bill creates a new avenue for deciding the costs of state
mandates which may prove to be more complicated and costly than
the existing process."
Analysis Prepared by : Gerald Shelton / ED. / (916) 319-2087
FN: 0002960