Amended in Assembly April 24, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2456

Introduced by Assembly Member Melendez

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(Coauthors: Assembly Members Conway, Hagman, Harkey, Olsen, Wagner, and Wilk)

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February 21, 2014

An act to add Section 13335.1 to the Government Code, relating to the state budget.

LEGISLATIVE COUNSEL’S DIGEST

AB 2456, as amended, Melendez. Health care.

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. 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.

Under the federal Patient Protection and Affordable Care Act (PPACA), each state is required to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange (Exchange) within state government, specifies the powers and duties of the board governing the Exchange, and requires the board to facilitate the purchase of qualified health plans through the Exchange by qualified individuals and small employers by January 1, 2014.

The bill would require the Exchange to submit to the department and the Legislative Analyst’s Office a complete and detailed budget utilizing performance-based budgeting, as defined, that sets forth all proposed expenditures and estimated revenues for the ensuing fiscal year. The bill would require the Exchange to, if necessary, develop a process for consulting with contractors or other responsible entities and stakeholders to develop information related to performance standards and program performance. The bill would require the department to include specified performance-based budgeting information for the Exchange in the Governor’s Budget and to post that information on the department’s Internet Web site. The bill would also require the Legislative Analyst’s Office to review the adequacy of performance metrics and progress toward targeted outcomes in preparing its review of the Governor’s begin delete Budget end delete begin insert Budget, end insert as it relates to the Exchange.

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.  

The Legislature finds and declares all of the
following:

(a) State government must focus on the outcomes of public
policy decisions and public programs to ensure opportunities are
available for all Californians to achieve a high quality of life.

(b) The Legislature must ensure that policymakers, public
program administrators, and rank-and-file state workers have access
to relevant and timely information so that they can make informed
decisions in the design and delivery of public programs.

(c) The focus of that information must be on the goals of those
public programs and the performance of the public agencies in
administering those programs.

(d) Goal and performance information should be widely
available, relevant, and timely for informing budget, policy, and
oversight decisions.

(e) In order to identify performance measurements relevant to
budget, policy, and oversight decisionmaking, public agencies
must consult with the public, rank-and-file state workers,
supervisors, and other officials responsible for the delivery of
public programs.

(f) Performance measurements, including information on
outcomes and other metrics relevant to improving those outcomes,
should be designed to ensure that limited public resources are well
spent.

(g) Establishing goal, performance, and outcome information
for public programs should be part of a systematic review of the
effectiveness and efficiency of those programs.

(h) Goal, performance, and outcome information should be
made widely available to the public.

(i) Goal, performance, and outcome information should be used
in the annual budget and policymaking process to inform fiscal
and policy decisions and by the Legislature to enhance oversight
of public programs and to ensure results-based accountability.

(j) As a component of legislative oversight, goal, performance,
and outcome information should be used to identify programs that
require fundamental reforms to improve outcomes and programs
subject to elimination because they are ineffective.

SEC. 2.  

Section 13335.1 is added to the Government Code, to
read:

13335.1.  

(a) As used in this article, the following definitions
shall apply:

(1) “Exchange” means the California Health Benefit Exchange
established pursuant to Title 22 (commencing with Section 100500)
of the Government Code.

(2) “Performance-based budgeting” means a system of budgeting
that uses information on performance to inform resource allocation
decisions, thereby establishing clear accountability.

(b) The purpose of performance-based budgeting is to inform
policy, fiscal, and oversight decisions by the Governor and
Members of the Legislature; to focus managers, supervisors, and
rank-and-file workers on achieving desired goals; and to
communicate to the public the value of public programs, progress
toward desired results, and the choices available to improve the
expenditure of public funds.

(c) The Exchange shall submit to the department and the
Legislative Analyst’s Office a complete and detailed budget at the
time and in the form prescribed by the department that sets forth
all proposed expenditures and estimated revenues for the ensuing
fiscal year.

(d) The budget submitted pursuant to subdivision (c) shall use
performance-based budgeting to make clear to policymakers and
the public the value and results of existing operations and proposed
changes.

(e) The budget submitted pursuant to subdivision (c) using
performance-based budgeting shall identify and update all of the
following:

(1) The mission and goals of the Exchange.

(2) The activities and programs focused on achieving those
goals.

(3) Performance metrics that reflect desired outcomes for
existing and proposed activities and a targeted performance level
for the following year.

(4) Prior year performance data and an explanation of deviation
from previous year targets.

(5) Proposed changes in statute, including the creation of
incentives or elimination of disincentives that could improve
outcomes or hold down costs.

(6) A description of the impacts and consequences to parties
affected by an activity or program proposed for modification or
elimination.

(7) A five-year projection of estimated assessment levels on
health plans to pay for Exchange expenditures.

(f) Performance-based budgeting shall be used by the Exchange
and shall allow the public and policymakers to understand the
effectiveness and efficiency of the Exchange. The Exchange shall,
if necessary, develop a process for consulting with contractors or
other responsible entities, and stakeholders to develop information
related to performance standards and program performance.

(g) The department shall include performance-based budgeting
information for the Exchange in the Governor’s Budget in both
printed and electronic formats if prepared, and post the information
on its Internet Web site where the department routinely posts
budget information. That information shall include, but not be
limited to, information on all of the following:

(1) The mission and goals of the Exchange’s provided spending
authority in the Governor’s Budget.

(2) The activities and programs focused on achieving those
goals.

(3) Performance metrics that reflect desired outcomes for
existing and proposed activities and a targeted performance level
for the following year.

(4) Prior year performance data and an explanation of deviation
from begin insert the end insert previous begin delete year end delete begin insert year’s end insert targets.

(5) A description of the impacts and consequences to parties
affected by an activity or program proposed for modification or
elimination.

(h) The Legislative Analyst’s Office shall review the adequacy
of performance metrics and progress toward targeted outcomes in
preparing its review of the Governor’s begin delete Budget end delete begin insert Budget, end insert as it relates
to the Exchange.