BILL ANALYSIS �
AB 2138
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Date of Hearing: March 26, 2014
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
AB 2138 (Gatto) - As Introduced: February 20, 2014
SUBJECT : Innovation awards
SUMMARY : Creates a pilot program for three state agencies
chosen by the Governor to award cash prizes totaling $75,000 to
participants in innovation contests established by each
designated agency. Specifically, this bill :
1)Requires the Governor to designate three state agencies to
participate in a pilot program to award cash prizes to
participants in innovation contests established by each
designated agency pursuant to this bill.
2)Appropriates $75,000 from the General Fund to the Governor for
allocation to each of the three designated agencies to award a
$25,000 prize in the innovation contests.
3)Requires the innovation contests to be held in 2015.
4)Directs each designated agency to determine the specific
subject of the innovation contests and specifies that the
subject may include proposals that detail a procedure, plan,
design, or idea that contributes to the efficiency, economy,
or other improvement in the operations of the state agency.
5)Requires each designated agency to administer its innovation
contest, including publicizing the contest and determining the
standards for participation and award. Authorizes each
designated agency to adopt rules and regulations to carry out
the contests.
6)Directs each designated agency to award a $25,000 prize to the
winner of each innovation contest on or before January 1,
2016.
EXISTING LAW establishes the State Merit Award Program,
administered by the California Department of Human Resources
(CalHR), to provide cash awards to active and retired state
employees who propose ideas that are implemented and result in
savings to the state, an improvement in state operations, or
AB 2138
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improvements in the safety of a state program.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee. It contains a $75,000 General Fund appropriation.
COMMENTS : According to the author, this bill stems from a
suggestion in Lieutenant Governor Gavin Newsom's book,
Citizenville, which states that "incentive prizes are a perfect
bipartisan solution: They solve problems, help people, and save
money, thereby fulfilling goals that span the whole political
spectrum." The author asserts this bill will incentivize
everyday citizens to bring untapped expertise and imagination to
the streamlining or innovation of a process, procedure, or issue
within state government and gives participating state agencies
the authority to experiment with this entrepreneurial process to
solve problems.
The use of prizes by philanthropies and private businesses to
encourage innovation and achieve social benefits is on the rise.
A July 2009 study of prizes worth more than $100,000 by
McKinsey & Company, a global management consulting firm,
suggests that the aggregate value of such large awards has more
than tripled over the past decade, to $375 million. In
addition, the study notes that the role of prizes is changing as
nearly 80% of those announced since 1991 have been designed to
provide incentives for specific innovations rather than to
reward excellence in general.
The Merit Award Program managed by CalHR authorizes the
department to grant monetary awards to only current and retired
state employees who propose procedures or ideas that are
implemented and result in reducing state expenditures or
improving state operations or safety. CalHR reports that awards
to employees for adopted suggestions are paid from the
individual departments out of the projected first year savings
resulting from implementation of the respective suggestions and
do not come directly from the General Fund.
According to CalHR, on average, 566 ideas are submitted each
year and 21 ideas lead to monetary awards. The majority of
awarded ideas involve improved procedures and the average award
amount is $100. CalHR notes that awards exceeding $5,000 are
required to be approved by concurrent resolution of the
Legislature.
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This bill instructs the Governor to select three state agencies
to participate in a pilot project to award three $25,000 cash
prizes to winners of innovation contests sponsored by the chosen
agencies. The contests would have to be held in 2015 but each
participating agency would have the flexibility to decide the
subject matter and determine guidelines for participation and
the awarding of the $25,000 prize.
CLARIFYING AMENDMENT : To further his intent, the author will be
accepting an amendment in committee to clarify that the
innovation contests shall be open to all residents of
California, age 18 and over, who are not employees of the State
of California.
PRIOR LEGISLATION : ACR 61 (Beth Gaines), Resolution Chapter
138, Statutes of 2013, authorizes the payment of state merit
awards in excess of $5,000 approved by CalHR to specified state
employees whose proposals resulted in eliminating or reducing
state expenditures or improving state operations.
REGISTERED SUPPORT / OPPOSITION :
Support
Lieutenant Governor Gavin Newsom
Opposition
None on file.
Analysis Prepared by : Cassie Royce / A. & A.R. / (916)
319-3600