BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 2684
                                                                    Page  1

          Date of Hearing:   May 24, 2000

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                              Carole Migden, Chairwoman

                     AB 2684 (Bock) - As Amended: May 17, 2000 

          Policy Committee:                              Revenue and  
          Taxation     Vote:                             8-1

          Urgency:     No                   State Mandated Local  
          Program:NoReimbursable:           

           SUMMARY  :

          This bill creates a mechanism for allocation of savings realized  
          in the implementation of state-mandated local programs.   
          Specifically, this bill:
           
          1)Authorizes local agencies and school districts to submit  
            findings to the State Controller identifying savings realized  
            by the agency or district in the implementation of  
            state-mandated programs.

          2)Requires the Controller to allocate up to one-third of  those  
            savings to the local agency or school district and the balance  
            to the General Fund.

          3)Directs the Controller to develop administrative procedures  
            for a Savings Allocation Program (SAP), to become operative on  
            January 1, 2003.
           
           FISCAL EFFECT  :

          The State Controller would incur first year costs in the range  
          of $350,000 in 2000-01 to develop the program and ongoing costs  
          in the range of $200,000 to administer the program.

           COMMENTS  :

           1)Background  .  Article XIII B of the State Constitution and  
            state law require the state to reimburse local governments for  
            the cost of new programs or increased level of services  
            mandated by legislation.  Local government claims for  
            reimbursement are processed through the quasi-judicial  








                                                                    AB 2684
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            Commission on State Mandates, which consists of the State  
            Controller, the State Treasurer, the Director of Finance, the  
            Director of the Office of Planning and Research, a public  
            member with public finance experience (appointed by the  
            Governor) and two local government members (appointed by the  
            Governor). 

           2)State Controller Concerns  .  The Controller notes that  
            appropriations for mandate claims are based upon estimates  
            that are later reconciled to actual costs.  Given the way the  
            reimbursement process is structured under law, and the state's  
            constitutional obligation to reimburse only actual costs, it  
            is not clear where the "savings" envisioned by this bill would  
            materialize.

           Analysis Prepared by  :    Stephen Shea / APPR. / (916) 319-2081