BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Richard K. Rainey, Chairman
BILL NO: AB 2684 HEARING: 8/9/00
AUTHOR: Bock FISCAL: Yes
VERSION: 8/7/00 CONSULTANT: Swenson
SAVINGS ALLOCATION PROGRAM
Background and Existing Law
The California Constitution requires the state government
to reimburse local governments for the costs of new or
increased state-mandated local programs. Local officials
file reimbursement claims with the Commission on State
Mandates and, if the Commission approves the claims, the
legislature appropriates the necessary funds.
State law requires counties to provide supportive services
so that handicapped children can benefit from special
education (AB 3632, W. Brown, 1984). In 1999-2000, the
state reimbursed counties $38.6 million for these
state-mandated costs. The 1976 Child Abduction and Recovery
program mandates district attorney's to actively assist in
the resolution of child custody problems including
visitation disputes, the enforcement of custody decrees,
and any other order of the court in a child custody
proceeding. In 1999-2000, the state paid $9.9 million to
reimburse their costs.
Local officials often have ideas that would save money, but
the state government does not have an incentive program to
encourage them to implement these good ideas. Recognizing
the cost-saving potential in many state-mandated local
programs, it may be possible to provide incentives for
local agencies to improve efficiency by rewarding them for
cost-saving innovations.
Proposed Law
Assembly Bill 2684 establishes a Savings Allocation Program
for three state mandated local programs: Services to
Handicapped Students, Child Abduction and Recovery, and
Seriously Emotionally Disturbed Children, Out of State
Placement. AB 2684 requires the State Controller to
develop administrative procedures for the program following
AB 2684 -- 8/7/00-- Page 2
the provisions of the Administrative Procedure Act. These
provisions must include eligibility standards, criteria for
awards, application procedures, and deadlines.
AB 2684 permits a county, city, city and county, special
district, or school district to submit findings to the
Controller identifying savings generated from implementing
any one of the three state mandated programs specified. If
the Controller finds that the agency has reduced costs as a
result of efficiencies, the bill requires the Controller to
pay the agency an appropriate amount, up to 1/3 of the
savings. The remainder goes to the State General Fund
after reimbursing the Controller's administrative costs.
The Program only applies to General Fund savings of actual
cost mandates, and requires the Commission on State
Mandates to review any appeals of the Controller's
decisions.
AB 2684 requires that reimbursements begin no later than
2003, and that the Controller report to the Legislature on
the program no later than January 1, 2006. The program
sunsets January 1, 2007.
Comments
1. Speak softly, carry a big carrot . Reducing costs and
improving productivity results in increased efficiency and
improved local programs. By recognizing and rewarding
local agencies' cost-saving activities, AB 2684 provides an
incentive that encourages local agencies to come up with
creative and innovative cost saving ideas.
2. Two out of three . At the request of the Committee, the
author amended AB 2684 to apply to only three state
mandated local programs. Two of those programs, Services
to Handicapped Students and Child Abduction and Recovery,
are good candidates because they have been in place for a
number of years, have the greatest statewide costs, and
thus, the greatest potential for savings. The third
program, Seriously Emotionally Disturbed Children, Out of
State Placement, was found to be a mandate by the
Commission on April 27, 2000. No formal statewide cost
estimate has yet been adopted although it is informally
estimated around $20 million. Since there is no firm
baseline cost and no reimbursement claims have been filed,
AB 2684 -- 8/7/00-- Page 3
it will be difficult to ascertain cost savings within the
timeline of this bill. The Committee may wish to consider
amending the bill to delete this third candidate program,
instead focusing on the other two, well chosen programs.
3. Since last time . The Committee heard AB 2684 at its
July 5 hearing, but put the bill over due to administrative
concerns expressed by the State Controller as well as
general confusion regarding the program's details. The
author has amended the bill to address the Committee's
concerns.
4. Technical amendments . The Committee should adopt
technical amendments to correct the name of one of the
candidate programs.
Assembly Actions
Assembly Local Government: 8-1
Assembly Appropriations: 21-0
Assembly Floor: 79-0
Support and Opposition (8/7/)
Support : California Municipal Business Tax Association,
California State Association of Counties, League of
California Cities.
Opposition : State Controller Kathleen Connell.