BILL ANALYSIS                                                                                                                                                                                                    Ó


          |SENATE RULES COMMITTEE            |                        AB 392|
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          Bill No:  AB 392
          Author:   Jones-Sawyer (D)
          Amended:  6/5/13 in Senate
          Vote:     21

           SENATE GOVERNANCE & FINANCE COMMITTEE  :  6-0, 6/12/13
          AYES:  Wolk, Knight, Beall, DeSaulnier, Emmerson, Liu
          NO VOTE RECORDED:  Hernandez

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  75-0, 5/9/13 (Consent) - See last page for vote

           SUBJECT  :    State mandates:  prorated claims

           SOURCE  :     State Controller John Chiang

           DIGEST  :    This bill allows the State Controller to use the most  
          cost effective allocation method for payment when the state  
          budget appropriates $1,000 or less for state-mandated program  

           ANALYSIS  :    Existing law requires the Legislature to either,  
          appropriate funds in the budget bill to pay all outstanding  
          claims for a mandate, or suspend or repeal the mandate  
          (Proposition 1A, 2004).  This requirement does not apply to  
          school and employee relations mandates.  When the state budget  
          appropriates an amount that is insufficient to pay all mandate  
          reimbursement claims approved by the State Controller's Office  
          (SCO), state law requires the SCO to prorate claims in a  


                                                                     AB 392

          specified manner.

          This bill requires the State Controller to determine the most  
          cost-effective allocation method for reimbursing approved claims  
          for the costs of state-mandated local programs when the state  
          budget allocates one thousand dollars or less for a program.

          This bill repeals a requirement that the State Controller must  
          report to the Director of Finance and the Chairperson of  
          specified legislative committees whenever the State Controller  
          finds it necessary to prorate claims.

          When the state budget appropriates an amount that is  
          insufficient to pay all claims for a state mandate, the SCO must  
          prorate the payments it makes to claimants.  When the budget  
          appropriates $1,000 or less to pay claims for a mandate, the  
          administrative costs of prorating hundreds of claims can far  
          exceed the total value of the reimbursements.  The SCO cites one  
          state mandated local program for which it was forced to prorate  
          $1,000 of appropriated state funds among 520 eligible claimants.  
           At an estimated average cost of $22 per claim, this process  
          cost the SCO more than $11,000 to process payments that ranged  
          from $1 to $10 for each of the 520 claimants.  This is not an  
          isolated example.  SCO staff notes that the Budget Act of 2009  
          appropriated $1,000 to reimburse mandate claims for each of 39  
          school district programs.  The SCO issued 1,861 warrants for  
          claims related to those 39 programs, of which 1,626 were for  
          less than $5.

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

           SUPPORT  :   (Verified  6/25/13)

          State Controller John Chiang (source)

           ASSEMBLY FLOOR  :  75-0, 5/9/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,  
            Cooley, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,  
            Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,  


                                                                     AB 392

            Grove, Hagman, Hall, Harkey, Roger Hernández, Jones,  
            Jones-Sawyer, Levine, Linder, Lowenthal, Maienschein, Mansoor,  
            Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,  
            Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel  
            Pérez, Quirk, Quirk-Silva, Rendon, Salas, 
          Skinner, Stone, Ting, Torres, Wagner, Weber, Wieckowski, Wilk,  
            Williams, Yamada, John A. Pérez
          NO VOTE RECORDED:  Donnelly, Holden, Logue, Waldron, Vacancy

          AB:ej  6/25/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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