BILL ANALYSIS �
AB 2138
Page 1
ASSEMBLY THIRD READING
AB 2138 (Gatto)
As Amended April 29, 2014
2/3 vote
ADMINISTRATIVE REVIEW 11-0
APPROPRIATIONS 16-0
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|Ayes:|Frazier, Achadjian, |Ayes:|Gatto, Bigelow, |
| |Allen, Buchanan, Ian | |Bocanegra, Bradford, Ian |
| |Calderon, Cooley, Medina, | |Calderon, Campos, |
| |Olsen, Quirk-Silva, | |Donnelly, Eggman, Gomez, |
| |Salas, Hagman | |Holden, Linder, Pan, |
| | | |Quirk, Ridley-Thomas, |
| | | |Wagner, Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Creates a pilot program for three state agencies
chosen by the Governor to award cash prizes totaling up to
$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 (GF) to the
Governor for allocation to each of the three designated
agencies to award a prize of up to $25,000 in the innovation
contests.
3)Requires the innovation contests to be held in 2015 and to be
open to all California residents who are not employees of the
state.
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.
AB 2138
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5)Requires each designated agency to administer its innovation
contest, including publicizing the contest and determining the
standards for participation and award.
6)Directs each designated agency to award a prize of up to
$25,000 to the winner of each innovation contest on or before
January 1, 2016.
7)Requires unawarded prize money to revert to the GF.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)This bill appropriates $75,000 from the GF to the Governor to
be awarded by three state agencies as cash prizes to
innovation contest winners.
2)Unknown, minor administrative costs to three unknown state
agencies to design and conduct the innovation contests.
3)Minor and absorbable costs to the Governor's Office to
designate three state agencies to hold the innovation
contests.
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
AB 2138
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provide incentives for specific innovations rather than to
reward excellence in general.
This bill instructs the Governor to select three state agencies
to participate in a pilot project to award three cash prizes of
up to $25,000 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 cash prize.
The Department of Finance (DOF) argues in opposition that this
bill creates significant and unfunded workload for the three
designated departments. DOF notes that, while this bill
provides funds for the prize money, there are no provisions for
the hours of work and personnel resources required to establish
and administer the pilot contest. DOF also notes that the pilot
is open to potentially millions of California residents and the
number of contest submittals that would need to be reviewed is
likely significant. As a result, DOF contends that the
designated departments would require additional funding to
comply with this bill. Lastly, DOF adds that there are no
administrative oversight requirements to vet the methodology and
standards established by the agencies and no requirement that
the winning entries be placed into effect and proven effective
before the $25,000 is awarded.
Analysis Prepared by : Cassie Royce / A. & A.R. / (916)
319-3600
FN: 0003338