BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2138 (Gatto) - Innovation awards.
Amended: April 29, 2014 Policy Vote: GO 7-1
Urgency: No Mandate: No
Hearing Date: June 23, 2014
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2138 would appropriate $75,000 from the General
Fund to the Governor for allocation to three designated state
agencies for cash prizes of up to $25,000 in a specified
innovation contest established by each agency.
Fiscal Impact:
One-time General Fund appropriation of $75,000 in 2014-15
to the Governor's office for innovation contest prizes.
Unawarded prize money will revert to the General Fund in
2015-16.
Unknown administrative costs, likely in the range of
$100,000 to $150,000 in the 2015 calendar year, to each of
the three state agencies designated by the Governor to
design and administer innovation contests. (General or
Special Funds)
Minor costs to the Governor's office to select
participating state agencies and allocate prize money.
Background: Under existing law, the Merit Award Program,
administered by the California Department of Human Resources
(CalHR), provides 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
improvements in the safety of a state program. 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.
According to CalHR, 566 state employee suggestions are submitted
each year, and an average of 21 ideas are adopted and result in
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monetary awards. The majority of awarded ideas involve improved
procedures and the average award amount is $100. CalHR notes
that awards exceeding $5,000 must be approved by the Legislature
in a concurrent resolution.
Proposed Law: AB 2138 would create a pilot program for three
state agencies chosen by the Governor to award cash prizes of up
to $25,000 in an innovation contest, established by each
designated agency. Specifically, this bill would:
Appropriate $75,000 from the General Fund to the
Governor for allocation to three agencies designated by the
Governor for an award of up to a $25,000 in an innovation
contest established by each agency.
Require the innovation contests to be held in 2015 and
open to all California residents who are not state
employees.
Require each designated agency to determine the subject
of its innovation contest, which 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.
Require each designated agency to administer its
innovation contest, including publicizing the contest and
determining the standards for participation and awarding of
the prize.
Require each designated agency to award a prize of up to
$25,000 by January 1, 2016 to the participant the agency
determines has submitted the entry that best addresses the
subject of the contest and has the highest likelihood of
being adopted.
Require unawarded prize money to revert to the General
Fund if the designated agency determines that no
participant addressed the subject of the contest, or if a
prize of less than $25,000 is awarded.
Staff Comments: This bill is intended to establish a
demonstration program to allow private citizens to participate
in state government by submitting innovative ideas for improving
specified processes, procedures, and other issues.
The bill requires participating agencies to develop the
parameters of the innovation contest, publicize the contest, and
determine the standards for participation and awarding of prize
money. Costs to each agency would be determined by the scope
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and parameters of the contest established by that agency. Staff
assumes that each agency would require the equivalent of up to 1
PY of staff time to develop the contest, establish parameters
for applications, conduct public outreach, review submittals,
and make final determinations. Additional costs may be incurred
for expenses related to publicizing the contest. Staff
estimates total costs for each participating agency could be in
the range of $100,000 to $150,000 in the 2015 calendar year.
For reference, CalHR's Merit Award Program is staffed by two
full-time employees who handle an average of 566 submittals each
year. While the contests established by this bill would be open
to millions of Californians, it is unknown how many citizens
will participate and submit ideas.
Staff notes that the bill does not require state agencies to
implement suggestions collected in the contest, but to the
extent innovative ideas are submitted and adopted, there could
be future cost savings if efficiencies in a particular process
or procedure are achieved.