BILL ANALYSIS
AB 1266
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Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1266 (Huber) - As Amended: April 2, 2009
Policy Committee: Business and
Professions Vote: 10 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill codifies the Governors Reorganization Plan (GRP)
Number 1. Specifically, this bill:
1)Transfers all duties, functions, employees, property and
related funding of the Division of Telecommunications from the
Department of General Services (DGS) to the Office of the
Chief Information Officer (OCIO).
2)Renames the Department of Technology Services (DTS) to the
Office of Technology Services and transfers it from the State
Consumer Services Agency (SCSA) to the CIO, along with the
applicable revolving fund.
3)Eliminates the Office of Information Security and Privacy
Protection, and instead creates the Office of Information
Security within the OCIO, and the Office of Privacy Protection
within the SCSA.
4)Transfers all necessary employees to the OCIO and maintains
the status, position, and rights of those employees.
5)Transfers certain responsibilities relating to creating the
state's IT procurement policies from the Department of
Finance, DGS, and the Department of Information Technology to
the OCIO.
FISCAL EFFECT
1)The administration submitted a budget change proposal (BCP)
with the governor's 2009-10 budget for $6.41 million in GF for
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31 new positions. Because the OCIO's duties and
responsibilities have not grown since 2007, the Legislature
has interpreted this BCP as a request for new positions needed
for the transition required by the GRP 1. The Budget Committee
has not acted on this BCP and has been told that the
administration intends to present a revised proposal during
the May Revise process.
2)The administration asserts that consolidating the state's IT
projects under the OCIO will result in significant savings and
cost avoidance for the state, specifically $82 million ($45
million GF) in 2009-10. However, as discussed below, the
Legislative Analyst's Office (LAO) is skeptical that the state
will save as much as the administration suggests.
COMMENTS
1)Intent . The intent of this legislation is to codify the GRP.
According to the author's office, by creating a central IT
organization, the state will leverage California's IT program
for greater coordination and efficiency while reducing costs
and saving the state approximately $1.5 billion over the next
five years.
2)Governor's Reorganization Plan Number 1 . On March 10, 2009,
the governor submitted to the Legislature his proposed IT
reorganization plan to consolidate various statewide IT
organizations and functions under the OCIO. The GRP would
greatly expand the duties and responsibilities of the OCIO.
In total, they would absorb approximately 1,200 state
employees and $500 million in funding from other departments.
During the budget process, the administration asserted that
California IT lacks the broad and cohesive organizing logic
necessary to best optimize limited state resources. To
address this shortcoming, the governor proposes a "federated"
governance model, in which the OCIO would have expanded
authority over various IT services and functions while leaving
some "local control" at the agency, department, and program
levels.
This issue has been discussed in detail during an
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informational hearing before the Assembly Budget Subcommittee
#5. During that hearing, it was determined that the policy
should be handled through the legislative bill process. This
is the vehicle for that policy discussion.
3)Legislative Analyst's Office (LAO) Analysis of GRP #1 . In a
March 9, 2009 letter to Little Hoover Commission, the LAO
acknowledged there are benefits to the consolidation of the
state's IT projects, but also expressed the following
concerns:
Cost Avoidance Unknown. The administration estimates cost
avoidance of approximately $185 million for 2009-10 and $1.5
billion for the first five years if this GRP is implemented.
They agree there will be some cost avoidance, in the short
term, once IT functions and resources are streamlined and
statewide IT policies are standardized. Without further
details on the administration's estimates of cost avoidance,
however, the LAO cannot comment on their accuracy. In general,
they are skeptical about the administration's claim of $1.5
billion in cost avoidance associated with implementing this
GRP alone.
Limiting Choice. Currently, state agencies and departments can
purchase IT goods and services through DGS or through outside
vendors. Similarly, they may use DTS for data services or find
a vendor to provide these services. Under the new
reorganization, the OCIO would standardize the types and kinds
of software, hardware, and technologies the state is able to
obtain as well as the data services the state provides. Though
exceptions may be granted, in general, all state entities
would have to adhere to these new policies and standards in
purchasing IT goods and services, thus limiting their choices.
Reduction in Vendors. The OCIO's choice of certain systems and
technologies over others could limit the pool of contractors
that are able to do business with the state. Reducing the
number of vendors could decrease competition for certain
contracts, potentially driving up costs for IT goods and
services.
Building a Bureaucracy. Should the GRP be implemented, the
OCIO would grow to an office of over 1,200 staff. A large
office has the potential to become significantly more
bureaucratic, creating policies and procedures with unintended
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adverse consequences. Moreover, a larger bureaucracy may not
be as flexible in addressing changing situations. Despite
these potential drawbacks, the LAO believes ensuring more
standardized IT policies and procurements outweighs these
concerns.
4)Related Legislation . AB 617 (Blumenfeld) requires OCIO to
establish and enforce a state information technology (IT)
strategic plan to protect the environment and reduce energy
use. That bill is currently pending before this committee.
AB 618 (Blumenfeld) requires the CIO to submit a strategic
plan by January 15, 2010 that includes information on the key
performance measures identified by the CIO for the Governor's
Reorganization Plan (GRP) Number 1. That bill is currently
pending before this committee.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081