BILL NUMBER: SB 777	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 26, 2009

INTRODUCED BY    Senator   Wolk 
 Senators   Wolk   and Huff 
   (Principal coauthor: Assembly Member Niello)
   (Coauthor: Senator Ashburn)
   (Coauthor: Assembly Member Buchanan)

                        FEBRUARY 27, 2009

   An act to amend Section 13320 of, and to add Section 13335.5 to,
the Government Code, relating to the state budget.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 777, 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  2011-12   2014-15
 fiscal year and each fiscal year thereafter be developed
pursuant to performance-based budgeting methods, as defined, for each
state agency  and court  .
   (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 the state agency submitted to
the department  and the Joint Legislative Budget Committee 
to utilize a performance-based budgeting method, as defined. The
bill also would establish a task force comprised of the Director of
Finance, the Controller,  a minority party member of the Joint
Legislative Budget Committee,  and the Chairperson of the Joint
Legislative Budget Committee to develop performance-based budgeting
guidelines and procedures and  to develop a training and
education program   a process for phasing in
requirements of performance-based budgeting   and to develop
a training and education program  for state agency personnel
involved in the budget process.
   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.  Section 13320 of the Government Code is amended to
read:
   13320.  (a) Every state agency and court 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.
   (b) The budget submitted to the department for approval shall
utilize performance-based budgeting methods.
   (c) A performance-based budget shall identify or update all of the
following:
   (1) The mission of the agency or judicial branch.
   (2) The goals established to accomplish the mission.
   (3) The activities developed to achieve state goals.
   (4) A performance goal and an outcome-oriented performance measure
for each  activity   program  for which an
appropriation is made or requested. 
   (5) An identification of other federal, state, or local programs
that relate to the program for which an appropriation is made or
requested.  
   (5) 
    (6)  Legislatively approved output and performance
standards to measure progress toward program objectives. Each
performance measure must identify the associated activity
contributing to it. 
   (6) 
    (7)  Prior-year performance data on approved performance
measures and an explanation of deviation from expected performance.

   (7) 
    (8)  Proposed performance incentives and disincentives.
   (d) As used in this article, "performance-based budgeting method"
means establishing clear accountability by achieving measurable
performance results from the expenditure of state resources. 
   (e) The purpose of the performance-based budgeting method is to
provide information to policymakers to assist them in making
decisions relating to appropriations by the Legislature and the
management of programs by the executive branch. 
  SEC. 2.  Section 13335.5 is added to the Government Code, to read:
   13335.5.  (a)  For the 2011-12   Not later
than the 2014-15  fiscal year, and each fiscal year thereafter,
the budget that the Governor submits 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  2011-12   2014-15  fiscal year, and
each fiscal year thereafter, for expenditure by any state agency
shall be determined  by each budgetary unit  
for each program  utilizing performance-based budgeting methods.
The Budget Act introduced by the Governor also shall include
performance standards, which shall be proposed by the Governor and
may be amended by the Legislature in the same manner as amendments to
appropriations in the Budget Bill. These standards shall be applied
to each state agency, including a method for evaluating whether those
standards are met in order to ascertain the effectiveness and
efficiency of the state agency. 
   (c) An annual report prepared by the Legislative Analyst's Office,
documenting the measurements of each state agency under its
respective performance-based budgeting standards, shall be submitted
to the Joint Legislative Budget Committee and the Department of
Finance for use in making proposed adjustments to the budget for the
succeeding fiscal year.  
   (c) 
    (d)  A task force consisting of the Director of Finance,
the Controller,  and  the Chairperson of the Joint
Legislative Budget Committee  , and a member of the joint
committee   who represents the minority party, chosen by the
chairperson of the joint committee,  shall do  both
  all  of the following:
   (1) Develop guidelines and procedures to be used by state agencies
in developing performance-based budgets for the  2011-12
fiscal year and following fiscal years, including procedures for
implementing activity-based costing or other managerial cost
accounting systems in each state agency.  
implementation of the requirements identified in Section 13320. 

   (2) Develop a training and education program for appropriate
budget personnel to facilitate the development of performance-based
budgeting methods by state agencies  for the 2011-12 fiscal
year and following fiscal years.   .  
   (3) Establish a process for phasing in the requirements of Section
13320. Beginning with the 2012-13 fiscal year and in each fiscal
year thereafter, the task force shall select departments that have
demonstrated the capacity to produce a budget based on performance
measures. By the 2012-13 fiscal year, the task force shall have
selected at least a sufficient number of state agencies and their
respective component departments for performance-based budgeting
implementation to account for approximately one-third of total
General Fund expenditures as proposed in the Governor's Budget for
that fiscal year. 
   (e) For purposes of this article,  the following terms
have the following meanings:  
   (1) "Budgetary unit" means the smallest significant operational
unit within a state agency that has programmatic responsibilities,
including local assistance programs, and authority distinct from
other units at the same level in the entity's organizational
structure, and that does not have subdivisions or other units under
it that have policy or administrative authority with respect to
programmatic responsibilities. 
    (2)     "State
  "   state  agency" means any agency,
department, or other entity of the state, including a court, that is
required to submit a budget pursuant to Article 2 (commencing with
Section 13320).