BILL NUMBER: SB 14	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 19, 2011
	AMENDED IN SENATE  MARCH 17, 2011

INTRODUCED BY   Senators Wolk, DeSaulnier, and Huff
   (Principal  coauthor:   Senator 
 Alquist   coauthors:   Senators 
 Alquist   and Rubio  )
   (Principal coauthors: Assembly Members Bonilla, Buchanan,
Fletcher, Gordon, and Olsen)
   (Coauthor: Senator Harman)
   (Coauthors: Assembly Members Block, Harkey,  Huffman, 
and Wagner)

                        DECEMBER 6, 2010

   An act to add Sections 9147.8, 13335.3, and 13335.5 to the
Government Code, relating to the State Budget.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 14, as amended, Wolk. State Budget.
   (1) The California Constitution requires the Governor to submit
annually to the Legislature a budget itemizing state expenditures and
estimating state revenues and requires the Legislature to pass the
Budget Bill by midnight on June 15.
   This bill would require that the budget submitted by the Governor
to the Legislature for the 2014-15 fiscal year and each fiscal year
thereafter be developed pursuant to performance-based budgeting, as
defined, for each state agency.
   (2) Under existing law, a state agency for which an appropriation
is made is generally required to submit to the Department of Finance
for approval a complete and detailed budget setting forth all
proposed expenditures and estimated revenues for the ensuing fiscal
year.
   The bill would require the budget of a state agency, as defined,
submitted to the department to utilize performance-based budgeting
for all programs, as defined to include those performed not only by
state agencies, but by local agencies, contractors, or others that
have a material relationship with the state, or its authorities and
activities. For those programs not administered by the state, but
which confer a benefit that would not otherwise occur but for the
action of state government, state departments would be required to
develop a process for consulting with responsible local agencies,
contractors or other responsible entities, and stakeholders to
develop information related to performance standards and program
performance.  The bill would require the department to include
specified performance-based budgeting information in the Governor's
budget proposal and to post that information on the department's
Internet Web site.  The bill would authorize  the Joint
Sunset Review Committee   a committee designated by the
Legislature  , utilizing the recommendations of specified
entities, to propose  legislative  changes to those
programs.
    The bill also would establish a task force comprised of the
Director of Finance, the Controller, and the chairpersons and vice
chairpersons of the Senate Committee on Budget and Fiscal Review and
Assembly Committee on Budget to review and comment on
performance-based budgeting guidelines and procedures, to be used by
state agencies in developing performance-based budgets, to review and
comment on a training program for state agency personnel involved in
the performance-based budgeting process developed by the Department
of Finance, and to review and comment on a plan developed by the
department for phasing in performance-based budgeting, which plan
would be required to ensure that such budgeting would be in use by
the 2012-13 fiscal years, giving priority to those programs that were
a part of the 2011-12 realignment project. 
   Implementation of the bill's provisions would be contingent on an
appropriation of funding for its purposes in the annual Budget Act.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  It is the intent of the Legislature in enacting this
measure during the 2011-12 Regular Session to provide a system of
analysis that supports a results-oriented framework for the delivery
of public services. That framework should prioritize understanding
the results of programs and funding that are subject to a transfer of
authority and responsibility from state government to county
governments.
  SEC. 2.  Section 9147.8 is added to the Government Code, to read:
   9147.8.  (a)  Within one year of   Not later
than one year after  the effective date of the act that added
this section, the  Joint Sunset Review Committee shall
  Legislature shall designate a committee of the
Legislature, which may be a new joint committee created for this
purpose or an existing joint committee, to  adopt a process,
schedule, and deadline for reviewing the performance of all programs
at least once every 10 years  , and the designated committee
shall undertake that review  . The schedule shall provide for
reviewing programs with expenditures that total one-third or more of
total expenditures by July 1, 2015, and that total two-thirds of
total expenditures by January 1, 2018. For purposes of this section,
"expenditures" include  all   appropriations
from all variet   ies of  funds as reflected in the
Budget Bill submitted by the Governor, and statutory exemptions,
deductions, credits, or exclusions from taxes or fees that would
otherwise apply. For purposes of this act, "expenditures" also shall
include the revenue and expenditures of state departments that are
not reflected in the Budget Bill. The process established by the 
designated  committee to review the performance of public
programs shall reflect the principles of performance-based budgeting
and shall include the participation of the Senate Committee on Budget
and Fiscal Review and the Assembly Committee on Budget.
   (b)  Six   Not later than six  months
prior to the deadline for review of each program, the  joint
 committee  designated pursuant to subdivision (a) 
shall refer the information on an initial program review to the
appropriate policy committees of each house of the Legislature. For
programs with common objectives, the reviews may be combined.
 Within  Not later than  90 days prior to
the deadline, the policy committees shall make recommendations
regarding a program to the  joint   designated
 committee. The  joint committee's  review 
by the designated committee  may be based on the
recommendations of the policy committees, as well as recommendations
that may be made by the Milton Marks "Little Hoover" Commission on
California State Government Organization and Economy, the Legislative
Analyst, the Bureau of State Audits, or the public. As part of its
recommendations to the  joint committee  
Legislature  , the Bureau of State Audits shall identify those
programs that pose the greatest financial risks to the state. If
following the review of one or more programs the  joint
  designated  committee determines that statutory
changes are necessary, the  joint   designated
 committee may propose legislation that includes, but is not
limited to, one or more of the following:
   (1) Modifications to the program that will reduce costs.
   (2) Modifications to the program that will improve outcomes.
   (3) Reorganization of the program by consolidating it with
programs that have similar objectives.
   (4) Termination of the program, provided that if a program is
recommended for termination, an analysis shall include the potential
benefits if performance is improved, the relationship between the
program and desired public outcomes, and the impact of eliminating
that program. The analysis of impacts of elimination shall include
ramifications on related outcomes, the potential to increase the
burden and fiscal impact on other public programs, and the potential
impact on future budgets.
   (c) Proposed legislation shall be submitted to the Committee on
Rules of each house of the Legislature for referral to the
appropriate policy committee for public hearing and further action.
   (d) The  joint   designated  committee
shall post on an Internet Web site its recommendations and the
results of the Legislature's action.
   (e) "Performance-based budgeting" has the same meaning as set
forth in subdivision (d) of Section 13335.3.
   (f) For the purposes of this section, "program" includes statutory
or constitutional provisions that authorize services, regulate
activities, evaluate services and programs, provide preferences in
the tax system, or otherwise confer a benefit that would not
otherwise occur were it not for the action of the state government,
including the procedures used to administer those programs, whether
performed by state agencies, local agencies, contractors, or others
that have a material relationship with the state or its authorities
and activities, or that have a fiscal effect on the state.
  SEC. 3.  Section 13335.3 is added to the Government Code, to read:
   13335.3.  (a) The purpose of performance-based budgeting is to
inform policy, fiscal, and oversight decisions by the Governor and
Members of the Legislature; to focus managers, supervisors, and
rank-and-file workers on achieving desired goals; and to communicate
to the public the value of public programs, progress toward desired
results, and the choices available to improve the expenditure of
public funds.
   (b) Every state agency for which an appropriation has been made
shall submit to the department for approval a complete and detailed
budget at the time and in the form prescribed by the department,
setting forth all proposed expenditures and estimated revenues for
the ensuing fiscal year.
   (c) The budget submitted to the department and proposed by the
Governor shall use performance-based budgeting methods that make it
clear to policymakers and the public the value and results of
existing operations and proposed changes.
   (d) As used in this article, "performance-based budgeting" means a
system of budgeting that uses information on performance to inform
resource allocation decisions, thereby establishing clear
accountability.
   (e) A performance-based budget shall identify and update all of
the following:
   (1) The mission and goals of the agency.
   (2) The activities and programs focused on achieving those goals.
   (3) Performance metrics that reflect desired outcomes for existing
and proposed activities and a targeted performance level for the
following year.
   (4) Prior-year performance data and an explanation of deviation
from previous-year targets.
   (5) Proposed changes in statute, including the creation of
incentives or elimination of disincentives that could improve
outcomes or hold down costs.
   (6) A description of the impacts and consequences to the current
recipients or beneficiaries of a program proposed for modification or
elimination.
   (f) The Governor's Internet Web site shall provide a summary of
each state agency's mission, goals, prior-year performance, and
future-year objectives.
  SEC. 4.  Section 13335.5 is added to the Government Code, to read:
   13335.5.  (a) Not later than the 2014-15 fiscal year, and each
fiscal year thereafter, the budget submitted by the Governor to the
Legislature, as required by Section 12 of Article IV of the
California Constitution, shall be developed by utilizing
performance-based budgeting methods.
   (b) The amount of each appropriation made in the Budget Act for
the 2014-15 fiscal year, and each fiscal year thereafter, for
expenditure by any state agency shall be determined after considering
performance-related data.  The Budget Bill  
When the Budget Bill is  submitted by the Governor also
  , he or she  shall include performance standards
 , which may be amended by the Legislature in the same manner
as amendments to appropriations in the Budget Bill. These standards
  for that budget in a separate document. These
standards  shall be applied to each state agency, and should
allow the public and policymakers to understand the effectiveness and
efficiency of each program. For those programs that are not
administered by the state, but which confer a benefit that would not
otherwise occur were it not for the action of the state government,
departments shall develop a process for consulting with the
responsible local agencies, contractors or other responsible
entities, and stakeholders to develop information related to
performance standards and program performance.
   (c)  The department shall include performance-based budgeting
information in the Governor's   budget proposal, in both
printed and electronic formats if prepared, and post the information
on its Internet Web site where it routinely posts budget information.
That information shall include, but not be limited to, information
on all of the following:  
   (1) The mission and goals of each agency provided spending
authority in the budget proposal.  
   (2) The activities and programs focused on achieving those goals.
 
   (3) Performance metrics that reflect desired outcomes for existing
and proposed activities and a targeted performance level for the
following year.  
   (4) Prior-year performance data and an explanation of deviation
from previous-year targets.  
   (5) A description of the impacts and consequences to the current
recipients or beneficiaries of a program proposed for modification or
elimination. 
    (d)    The Legislative Analyst's Office shall
review the adequacy of performance metrics and progress toward
targeted outcomes in preparing its review of the Governor's Budget
proposal. 
   (d) 
    (e)  A task force consisting of the director, the
Controller, and the chairpersons and vice chairpersons of the Senate
Committee on Budget and Fiscal Review and the Assembly Committee on
Budget shall do all of the following:
   (1) Review and comment on guidelines and procedures drafted by the
department to be used by state agencies in developing
performance-based budgets pursuant to Sections 13320 and 13335.3. The
guidelines shall describe how state employees will be involved in
establishing and implementing performance standards.
   (2) Review and comment on a training program developed by the
department for appropriate executive branch personnel to ensure the
successful implementation of performance-based budgeting and
management by state agencies.
   (3) Review and comment on a plan prepared by the department for
systematically phasing in the requirements of Sections 13320 and
13335.3. The plan should ensure that, by the 2012-13 fiscal year,
performance-based budgeting methods are used in preparing, reviewing,
and enacting one-third or more of the total General Fund
expenditures as proposed in the Governor's Budget for that fiscal
year. Priority shall be given to those programs that were part of the
2011-12 realignment project as enacted. 
   (e) 
    (f)  For purposes of this article, "state agency" means
any agency, department, or other entity of the executive branch of
the state that is required to submit a budget pursuant to Article 2
(commencing with Section 13320).
   SEC. 5.    Implementation of this act is contingent
on an appropriation of funding for its purposes in the annual Budget
Act.