BILL ANALYSIS �
AB 392
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 392 (Jones-Sawyer)
As Amended June 5, 2013
Majority vote
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|ASSEMBLY: |75-0 |(May 9, 2013) |SENATE: |33-0 |(July 1, 2013) |
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Original Committee Reference: L. GOV.
SUMMARY : Makes changes to the allocation method and reporting
requirement for prorated state mandate claims. Specifically,
this bill :
1)Requires the State Controller to determine the most
cost-effective allocation method if $1,000 or less is
appropriated for a state mandated program.
2)Removes reporting requirements for the State Controller to
report prorated claims to the Department of Finance, the
Chairperson of the Joint Legislative Budget Committee, and the
Chairperson of the Budget Committee in each house of the
Legislature.
3)Deletes a cross-reference to the reporting requirement removed
by this bill.
The Senate amendments make conforming changes.
EXISTING LAW :
1)Requires the state, under the California Constitution, to
provide a subvention of funds whenever it mandates that a
local government undertake a new program or higher level of
service.
2)Allows local governments to apply to the Commission on State
Mandates for reimbursement of state-mandated local costs.
3)Requires the Legislature, if the claimant is a local
government, to either appropriate funds in the annual Budget
Act for the full payable amount that has not been previously
paid, or to suspend the mandate.
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4)Requires that the reimbursement amount to local agencies and
school districts for costs mandated by the state be
appropriated to the State Controller for disbursement.
5)Requires the Controller, if the amount allocated by the Budget
Act is not sufficient to pay all claims approved by the
Controller, to prorate claims in proportion to the dollar
amount of approved claims timely filed and on hand at the time
of proration.
6)Requires the Controller to submit the following reports:
a) Requires the Controller to report prorated claims to the
Department of Finance, the Chairperson of the Joint
Legislative Budget Committee, and the Chairperson of the
respective Budget Committee in each house of the
Legislature.
b) Requires the Controller to report to the Joint
Legislative Budget Committee and fiscal committees by
October 31 of each fiscal year a summary of the total
amount of claims paid per fiscal year and the amount of
mandate deficiencies or surpluses.
c) Requires the Controller to report to the Joint
Legislative Budget Committee and fiscal committees, and the
Director of Finance by April 30 of each fiscal year a
summary of the total amount of unpaid claims and any
mandate deficiencies or surpluses by fiscal year submitted
before April 1.
7)Allows the Director of Finance upon receipt of the report to
authorize the augmentation of the amount available for
expenditure to reimburse costs mandated by the state.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : In 1979, Proposition 4 amended the California
Constitution by adding Article XIII B, Section 6, which requires
the state to reimburse local governments for the cost of new
programs or higher levels of service mandated by the Legislature
or any state agency. In 1984, the Legislature created the
Commission on State Mandates, a quasi-judicial agency,
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as the entity that decides test claims alleging that the
Legislature or a state agency imposed
a reimbursable state-mandated local program. Once the
Commission hears a test claim and determines that the
governmental action constituted a reimbursable state mandate, it
then determines the amount to be subvened for the program.
Following the mandate determination, local agencies and school
districts may file reimbursement claims with the State
Controller to be reimbursed for the state-mandated programs.
The Controller pays and audits these claims, and can reduce
reimbursement claims that are determined to be excessive or
unreasonable. While Article XIII B of the California
Constitution requires the state to provide a subvention of funds
whenever it mandates a local government undertake a new program
or higher level of service, it does not require the Legislature
to appropriate the necessary funds in the annual Budget Act.
If this appropriation is not sufficient to reimburse all of the
claims approved by the Controller, current law requires the
Controller to prorate claims in proportion to the dollar amount
of approved claims filed timely and on hand at the time of
proration. This bill requires the Controller to determine the
most cost-effective allocation method if $1,000 or less is
appropriated for a state mandated program. Under the provisions
of this bill, if $1,000 or less is appropriated for a state
mandated program, the Controller would no longer be required to
proportionally reimburse claims between multiple eligible
claimants with approved claims.
The Legislature may wish to ask the sponsor what criteria will
be used in determining which eligible claimants will take
priority for reimbursement of the limited appropriation
available at that time. This bill is sponsored by State
Controller John Chiang.
This bill also deletes reporting requirements that require the
Controller to report prorated claims to the Department of
Finance, the Chair of the Joint Legislative Budget Committee,
and the Chair of the Budget Committees in the Assembly and
Senate. Supporters of the bill argue that these reporting
requirements are duplicative and existing law already requires
the Controller to produce an annual report by October 31 which
contains the same information about prorated claims. Current
law requires the Controller to summarize, by state mandate, the
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total amount of claims paid per fiscal year and the amount of
mandate deficiencies or surpluses in a report submitted to the
Joint Legislative Budget Committee and fiscal committees.
This bill also deletes a cross reference to the report that is
being deleted by this bill, specifically Government Code 17613.
Existing law allows the Director of Finance upon receipt of the
report, deleted by this bill, to authorize the augmentation of
the amount available for expenditure to reimburse costs mandated
by the state.
According to the author, "When an appropriation is substantially
less than the total costs claimed, specifically when the
appropriation is $1,000 or less, the current payment process is
inefficient and time-consuming, and results in payments to local
entities that amount to less than the cost of processing the
payment." The sponsor points to the Budget Act of 2009 in which
$1,000 was appropriated for the Mandate Reimbursement Process
program for school districts. The Controller's office cites 795
eligible claims totaling $16.4 million that were approved.
After offsetting claims for accounts receivable owed to the
state, the Controller's Office issued 761 warrants ranging from
$1 to $6. The sponsor argues that these small payments still
require extensive staff time and resources expended by both his
office and school districts.
While the provision of current law amended by this bill includes
references to local agencies, according to the Controller's
office, in practice the distribution of funds when there is an
appropriation of $1,000 or less for a state mandated program has
only been made to school districts and community colleges. In
November 2004, voters approved Proposition 1A, which requires
the Legislature to appropriate funds in the annual budget to
either pay outstanding mandate claims, suspend the mandate, or
repeal the mandate. Proposition 1A applies to local governments
only and does not include school districts or community
colleges.
Support arguments: Supporters argue that this bill allows the
Controller to use an allocation method that promotes efficiency
and cost savings.
Opposition arguments: None on file.
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Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958
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