BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1498| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1498 Author: Buchanan (D) Amended: 6/28/12 in Senate Vote: 21 SENATE GOVERNMENTAL ORGANIZATION COMM. : 11-0, 7/02/12 AYES: Wright, Berryhill, Calderon, Cannella, Corbett, De León, Evans, Hernandez, Walters, Wyland, Yee NO VOTE RECORDED: Anderson, Padilla SENATE BUDGET & FISCAL REVIEW COMMITTEE : 10-1, 6/25/12 AYES: Leno, Alquist, DeSaulnier, Hancock, Liu, Lowenthal, Negrete McLeod, Simitian, Wolk, Wright NOES: Anderson NO VOTE RECORDED: Emmerson, Evans, Fuller, Gaines, La Malfa ASSEMBLY FLOOR : 47-23, 3/22/12 - See last page for vote 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 CONTINUED AB 1498 Page 2 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, 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 AB 1498 Page 3 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 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' AB 1498 Page 4 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 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). AB 1498 Page 5 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. 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 AB 1498 Page 6 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. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No ASSEMBLY FLOOR : 47-23, 3/22/12 AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, Galgiani, Gatto, Gordon, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Lara, Ma, Mitchell, Monning, Pan, Perea, V. Manuel Pérez, Solorio, Swanson, Torres, Wieckowski, Williams, Yamada, John A. Pérez NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly, Beth Gaines, Garrick, Grove, Hagman, Halderman, Jeffries, Jones, Knight, Mansoor, Miller, Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Wagner NO VOTE RECORDED: Fletcher, Gorell, Hall, Harkey, Logue, Bonnie Lowenthal, Mendoza, Portantino, Skinner, Valadao DLW:d2 7/3/12 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END **** AB 1498 Page 7