BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 1498|
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                                 THIRD READING


          Bill No:  AB 1498
          Author:   Buchanan (D)
          Amended:  6/28/12 in Senate
          Vote:     21

           
          PRIOR VOTES NOT RELEVANT


          SUBJECT  :    State technology

           SOURCE  :     Author


           DIGEST  :    This bill proposes to modify the Governors 
          Reorganization Plan No. 2 of 2012 (GRP 2) so that the 
          Director of Technology reports directly to the Governor on 
          issues relating to information technology.  This bill 
          declares the intent of the Legislature that a plan for 
          transitioning information technology procurement authority 
          from the Department of General Services (DGS) to the 
          Department of Technology (DOT) be developed by the 
          administration.  Specifically, this bill (1) provides that 
          if GRP 2 becomes effective on July 3, 2012, the Director of 
          Technology shall report directly to the Governor on issues 
          relating to information technology when the plan becomes 
          operative on July 1, 2013; (2) declares legislative intent 
          that a plan must be developed by the Governor's Office, as 
          specified, for transitioning information technology 
          procurement authority from DGS to DOT; (3) declares 
          legislative intent that any planning process for 
          transferring the procurement authority to DOT include 
          consideration of stakeholder input from relevant groups, 
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          including but not limited to, the Milton Marks "Little 
          Hoover Commission," the Legislature, the Department of 
          Finance, DGS and DOT, and (4) stipulates that items #2 and 
          #3 above shall become operative only if GRP 2 becomes 
          effective.  

           ANALYSIS  :    Existing law, GRP 1 (2009), transferred all 
          the duties, functions, employees, property, and related 
          funding of the Division of Telecommunications in 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 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 provides that there is in state government the 
          California Technology Agency, which duties include 
          establishing and enforcing state information technology 
          strategic plans, policies, standards, and enterprise 
          architecture.  The agency is governed by the Secretary of 
          California Technology.

          The California Constitution authorizes the Legislature to 
          delegate to the Governor the authority to assign and 
          reorganize functions among executive branch officers, 
          agencies and their employees.  The Governor's authority to 
          reorganize does not extend to other constitutional offices 
          (California Constitution, Article V, Section 6).  Existing 
          law specifies the process for reorganization and places 
          limits on that authority.

          Additionally, existing law specifies the purposes of the 

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          Governor's reorganization authority, in the form of a GRP 
          is to enable the Governor to promote improved strategies 
          for executing the law; managing state government; reducing 
          expenditures; increasing efficiency; improving coordination 
          among agencies and functions; reducing the number of 
          agencies; and eliminating duplication and overlap among 
          agencies.  

           Background

          GRP Process  .  As stipulated in Government Code Section 
          12080 et seq., the Governor is required 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 Little Hoover 
          Commission's role in the reorganization process is only 
          advisory - it reviews and submits a report to the Governor 
          and the Legislature within 30 days of the Plan being 
          submitted to the Legislature.  Existing law also provides 
          that any GRP becomes law after 60 days unless either House 
          of the Legislature adopts a resolution rejecting the 
          proposal. 

           GRP 2  .  GRP 2 (introduced May 3, 2012) would create three 
          new agencies by relocating departments in three existing 
          agencies with the goal of grouping like functions more 
          closely together, reducing the number of agencies from 12 
          to 10 overall.  It also would make a series of other moves 
          including establishing the Government Operations Agency, 
          which would house the Office of Administrative Law, the 
          Public Employees' Retirement System, the State Teachers' 
          Retirement System, the State Personnel Board, the 
          California Victim Compensation and Government Claims Board, 
          the Department of General Services, the Department of Human 
          Resources, and the Franchise Tax Board.

          Additionally, the Government Operations Agency would house 
          the Department of Technology, which would include the 
          Office of Information Security and the Office of Technology 
          Services.  The current Secretary of California Technology 
          would be transitioned into the Director of Technology.  

           On May 22, 2012, the Little Hoover Commission released its 

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          report of 
          GRP 2 and recommended that the Plan be allowed to go into 
          effect.  The deadline for a Legislative resolution 
          affirmatively disapproving GRP 2 is July 2, 2012.  If the 
          Legislature takes no action, GRP 2 becomes effective on 
          July 3, 2012, and operative on July 1, 2013.

           Joint Hearing of GRP 2  .  On May 23, 2012, the Senate 
          Governmental Organization Committee and the Senate 
          Governance and Finance Committee held a joint informational 
          hearing to review the plan in its entirety.  

          With respect to the Governor's proposed placement of the 
          state's information technology services within the new 
          Government Operations Agency, the Little Hoover Commission 
          expressed support and stated "the proposed Government 
          Operations Agency is a logical place for the state's 
          information technology services to reside."  The Little 
          Hoover Commission also noted that although the 
          administration has made it clear that the new director of 
          the Department of Technology would remain the state Chief 
          Information Officer (CIO), the Commission was recommending 
          that the Legislature address this issue by establishing a 
          direct line of reporting to the Governor on matters related 
          to the Director's role as CIO. 

           Purpose of this bill  .  This bill incorporates the Little 
          Hoover Commission's recommendation relative to the need for 
          establishing a direct line of reporting to the Governor by 
          the Director of the Department of Information Technology 
          (DOIT).  

           History  .  DOIT was created by SB 1 (Alquist, Chapter 508, 
          Statues of 1995) 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.  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.


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          GRP 2 (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 DGS.  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 2007-08 Budget and related legislation (SB 90, Senate 
          Budget Committee, Chapter 183, Statutes of 2007) 
          substantially expanded on 
          SB 834 and provided an appropriation to establish the OCIO. 

           
          In May 2009, 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. 

          AB 2408 (Smyth, Chapter 404, Statutes of 2010) was the 
          vehicle that codified GRP 1 (2009) which consolidated state 
          IT functions under the Office of the State Chief 
          Information Officer and changed the name of the Office to 
          the California Technology Agency.

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


          DLW:d1  7/2/12   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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