BILL NUMBER: SB 14 INTRODUCED
BILL TEXT
INTRODUCED BY Senators Wolk, DeSaulnier, and Huff
(Principal coauthor: Senator Alquist)
(Principal coauthors: Assembly Members Buchanan and Fletcher)
DECEMBER 6, 2010
An act to add Sections 9143.5, 13335.3, and 13335.5 to the
Government Code, relating to the State Budget.
LEGISLATIVE COUNSEL'S DIGEST
SB 14, as introduced, Wolk. State Budget.
(1) 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.
This bill would require that the budget submitted by the Governor
to the Legislature for the 2014-15 fiscal year and each fiscal year
thereafter be developed pursuant to performance-based budgeting, as
defined, for each state agency.
(2) 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.
The bill would require the budget of a state agency, as defined,
submitted to the department to utilize performance-based budgeting,
for all programs, as defined. The bill would authorize a joint
committee, utilizing the recommendations of specified entities, to
propose changes to those programs. The bill also would establish a
task force comprised of the Director of Finance, the Controller, and
the chairpersons and vice chairpersons of the Senate Committee on
Budget and Fiscal Review and Assembly Committee on Budget to develop
performance-based budgeting guidelines and procedures, including a
process for phasing in requirements of performance-based budgeting,
and to review and comment on a training and education program for
state agency personnel involved in the budget process developed by
the Department of Finance.
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. Section 9143.5 is added to the Government Code, to
read:
9143.5. (a) Within one year of the effective date of the act that
added this section, the Legislature shall establish a process,
including the creation of a new or use of an existing joint
committee, and shall include a schedule and a deadline for reviewing
the performance of all programs at least once every 10 years in a
bill implementing the Budget Act. The process established by the
Legislature shall include the participation of the budget committee
of each house of the Legislature. The schedule shall provide for
reviewing programs with expenditures that total one-third or more of
total expenditures by July 1, 2015, and that total two-thirds of
total expenditures by January 1, 2018. For purposes of this section,
"expenditures" include statutory exemptions, deductions, credits, or
exclusions from taxes or fees that would otherwise apply.
(b) Six months prior to the deadline for review of each program,
the joint committee shall refer the initial program review to the
appropriate policy committees of each house of the Legislature. For
programs with common objectives, the reviews may be combined. Within
90 days prior to the deadline, the policy committees shall make
recommendations regarding a program to the joint committee. The joint
committee's review may be based on the recommendations of the policy
committees, as well as recommendations that may be made by the
Milton Marks "Little Hoover" Commission on California State
Government Organization and Economy, the Legislative Analyst, the
Bureau of State Audits, or the public. As part of its recommendations
to the joint committee, the Bureau of State Audits shall identify
those programs that pose the greatest financial risks to the state.
If following the review of one or more programs the joint committee
determines that statutory changes are necessary, the joint committee
may propose legislation that includes, but is not limited to, one or
more of the following:
(1) Modifications to the program that will reduce costs.
(2) Modifications to the program that will improve outcomes.
(3) Reorganization of the program by consolidating it with
programs that have similar objectives.
(4) Termination of the program.
(c) Proposed legislation shall be submitted to the Committee on
Rules of each house of the Legislature for referral to the
appropriate policy committee for public hearing and further action.
(d) The joint committee shall post on an Internet Web site its
recommendations and the results of the Legislature's action.
(e) "Performance-based budgeting" has the same meaning as set
forth in subdivision (d) of Section 13335.3.
(f) For the purposes of this section, "program" includes statutory
or constitutional provisions that authorize services, regulate
activities, provide preferences in the tax system, or otherwise
confer a benefit that would not otherwise occur were it not for the
action of the state government, including the procedures used to
administer those programs, and that have a fiscal effect on the
state.
SEC. 2. Section 13335.3 is added to the Government Code, to read:
13335.3. (a) 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.
(b) Every state agency for which an appropriation has been made
shall submit to the department for approval a complete and detailed
budget at the time and in the form prescribed by the department,
setting forth all proposed expenditures and estimated revenues for
the ensuing fiscal year.
(c) The budget submitted to the department and proposed by the
Governor shall use performance-based budgeting methods that make it
clear to policymakers and the public the value and results of
existing operations and proposed changes.
(d) As used in this article, "performance-based budgeting" means
establishing clear accountability by achieving measurable performance
results from the expenditure of state resources.
(e) A performance-based budget shall identify and update all of
the following:
(1) The mission and goals of the agency.
(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.
(f) The Governor's Internet Web site shall provide a summary of
each state agency's mission, goals, prior-year performance, and
future-year objectives.
SEC. 3. Section 13335.5 is added to the Government Code, to read:
13335.5. (a) Not later than the 2014-15 fiscal year, and each
fiscal year thereafter, the budget submitted by the Governor to the
Legislature, as required by Section 12 of Article IV of the
California Constitution, shall be developed by utilizing
performance-based budgeting methods.
(b) The amount of each appropriation made in the Budget Act for
the 2014-15 fiscal year, and each fiscal year thereafter, for
expenditure by any state agency shall be determined after considering
performance-related data. The Budget Bill submitted by the Governor
also shall include performance standards, which may be amended by the
Legislature in the same manner as amendments to appropriations in
the Budget Bill. These standards shall be applied to each state
agency, and should allow the public and policymakers to understand
the effectiveness and efficiency of each program.
(c) 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 Budget proposal.
(d) A task force consisting of the director, the Controller, and
the chairpersons and vice chairpersons of the Senate Committee on
Budget and Fiscal Review and the Assembly Committee on Budget shall
do all of the following:
(1) Review and comment on guidelines and procedures drafted by the
department to be used by state agencies in developing
performance-based budgets pursuant to Sections 13320 and 13335.3. The
guidelines shall describe how state employees will be involved in
establishing and implementing performance standards.
(2) Review and comment on a training program developed by the
department for appropriate executive branch personnel to ensure the
successful implementation of performance-based budgeting and
management by state agencies.
(3) Review and comment on a plan prepared by the department for
systematically phasing in the requirements of Sections 13320 and
13335.3. The plan should ensure that, by the 2012-13 fiscal year,
performance-based budgeting methods are used in preparing, reviewing,
and enacting one-third or more of the total General Fund
expenditures as proposed in the Governor's Budget for that fiscal
year.
(e) For purposes of this article, "state agency" means any agency,
department, or other entity of the executive branch of the state
that is required to submit a budget pursuant to Article 2 (commencing
with Section 13320).