Legislative Analyst's Office, July 7, 1996

SUPPLEMENTAL REPORT
OF THE 1996 BUDGET ACT
1996-97 FISCAL YEAR

CONTAINING STATEMENTS OF INTENT
OR REQUESTS FOR STUDIES
ADOPTED BY THE LEGISLATURE

General Government

Item 8100-101-0001--Office of Criminal Justice Planning
Item 8380-001-0001--Department of Personnel Administration
Item 8570-001-0001--Department of Food and Agriculture
Item 8570-002-0001--Department of Food and Agriculture
Item 8660-001-0462--Public Utilities Commission
Item 8860-001-0001--Department of Finance
Item 8940-001-0001--Military Department
Item 8965-001-0001--Veteran's Homes of California

General Government

Item 8100-101-0001--Office of Criminal Justice Planning

1. Vertical Prosecution of Statutory Rape Program. The Office of Criminal Justice Planning shall submit to the Joint Legislative Budget Committee and the fiscal committees of the Legislature by January 1 of 1997 and 1998, a report evaluating the Statutory Rape Vertical Prosecution Pilot Program. The report shall include data on the number of statutory rape cases referred, filed, and number of convictions achieved under this program and the cost associated with each step of the prosecution process. The report shall also include data on plaintiffs, such as age and whether the plaintiff is receiving aid as a consequence of her pregnancy. In addition, the report shall include data on the defendants, such as prior criminal history and whether the statutory rape prosecution results in a second or third "strike."

Item 8380-001-0001--Department of Personnel Administration

1. Legislative Review of Memorandum of Understanding. It is legislative intent to refer all memorandum of understanding to the appropriate policy and budget committees in each house. It is further legislative intent to give these committees a total of 30 days to review the policy and fiscal implications of each memorandum of understanding.

Item 8570-001-0001--Department of Food and Agriculture

1. Domestic Parcels Inspection Pilot Program. The Department of Food and Agriculture shall provide the Chair of the Joint Legislative Budget Committee, the chairperson of the budget committee in each house, and the chairperson of the appropriate policy committees in each house, a report by March 1, 1998 evaluating the effec tiveness of the two-year domestic parcels inspections pilot program. The report shall contain sufficient information to allow the Legislature to assess whether the program should be continued on a permanent basis.

2. Cost of Environmental Mitigation. It is the intent of the Legislature that the department report at budget hearings annually on costs of environmental mitigation incurred in the course of accomplishing its statutory mission.

The report should include costs of mitigation as a percentage of total project costs and should identify all fund sources allocated to mitigation costs. Mitigation costs should include items or actions required by federal, state, or local law or regulation. This includes, but is not limited to, studies, surveys, analyses, acquisition of land to provide replacement habitat, costs to complete environmental impact reports or assessments, preparation of plans, site preparation and acquisition of habitat inventory such as elderberry bushes or other vegetation required by the mitigation project. The report should include costs associated with alteration of a project to avoid mitigation. The report should include mitigation cost reimbursements to other departments or governmental agencies.

Item 8570-002-0001--Department of Food and Agriculture

1. Mediterranean Fruit Fly Program Sterile Release Program. The Department of Food and Agriculture (DFA) shall provide the Legislature a report on or before March 1, 1997on the Mediterranean Fruit Fly (Medfly) sterile release program. The report shall, at a minimum, identify (a) the number of Medflies found in the DFA traps throughout the state, (b) any infestations that required aerial spraying and the location and cost of these aerial sprayings, (c) scientific progress in developing more effective, less costly methods of Medfly control, and (d) the department's plan to incorporate these new methods into its Medfly program.

Item 8660-001-0462--Public Utilities Commission

1. Standards for Electric Distribution. On or before December2, 1996, the commission shall prepare and adopt specific, measurable, and enforceable standards for electric distribution system maintenance and operations to ensure system reliability and to minimize or prevent service interruptions due to storms, earthquakes, fires and other disasters. The standards shall specify tree trimming and brush clearing requirements, consistent with existing laws, which ensure that the electric distribution system is protected from damage. The standards shall require the commission to investigate and take appropriate action against utilities which fail to meet the standards. The commission shall report to the chairs of the appropriate policy and fiscal committees in each house and the Chair of the Joint Legislative Budget Committee (JLBC) on the adoption of these standards on or before January 1, 1997.

2. Standards for Electric Distribution Under Electric Service Deregulation. On or before June 30, 1997, the commission shall develop and adopt standards which will ensure the continued safety, maintenance, and reliability of the electric distribution system under orders issued by the commission to restructure and deregulate electric services. These standards shall ensure that the system for the delivery of electricity to utility customers is not compromised, reduced, or otherwise diminished due to increased competition in the marketplace for electric services. The commission shall report to the chairs of the appropriate policy and fiscal committee in each house and the Chair of the JLBC on the adoption of these standards on or before July 1, 1997.

3. Ex Parte Communications. As part of its current ex parte communication rule, the commission shall adopt a procedure which allows parties who have requested an ex parte meeting with a commissioner, but who have been denied such meeting, to file a notice in the public record of the commission providing notice of the denial. The commission shall report to the Legislature on the number and content of notices filed pursuant to this section or before February 1, 1997.

4. Market Power Study.

a. On or before March 31, 1997, the commission shall report to the JLBC and the policy and fiscal committees on the status of a market power study relative to the electric generation market which has the following elements:

The study shall provide a comprehensive analysis of generation and related market power impacts under different scenarios of investor-owned utility asset divestiture. Those scenarios shall examine different levels of divestiture under proposed industry structures with consideration of the existence of new, independent providers of generation.

As part of this analysis, the study shall include, but shall not be limited to, an examination of the following;
(i) both horizontal and vertical market power issues and other aspects of a competitive market structure, (ii) the impact of those subdivisions within the state, (iii) differences in the utility's market share and related costs based on season ality, and (iv) the dynamics of the demand curve for electricity statewide and major political subdivisions with quantification of the market share under the different periods and consideration of production costs and delivery constraints.

b. In performing the market power study, the commission shall meet the following requirements:

The study shall be conducted by the commission with the assistance of expert consultants who have experience conducting such studies and who do not have any conflicts of interest with the electric utility industry.

Once a study plan and methodological approach is proposed by the commission, its consultants and staff, the commission shall make the study available to all interested parties and permit those parties to submit comments on the study's scope and methodology. The commission shall take those comments into consideration in revising or proceeding with the study plan and methodology.

Given the expedited timetable for electric industry restructuring adopted by the commission and the relevance of this study to that restructuring effort, extraordinary circumstances exist justifying expedited contracting for consultant or advisory services and permitting the requirements of Public Utilities Code Section 632 and related Government Code and Public Contract Code sections to be waived. The commission, however, shall explain its search and selection process for consultants when the study plan is made available for comment by the parties.

c. Upon completion of the study, the commission shall undertake the following:

The commission, after reviewing the study, shall adopt mitigation measures and/or propose to other agencies mitigation measures to ensure that the marketplace will be sufficiently competitive and will achieve the envisioned benefits of a new competitive generation market for all classes of consumers.

After completion of the study, but before the commission adopts findings on the sufficiency of the mitigation measures, the commission shall present the study to the chairs of the fiscal and policy committees and the Chair of the JLBC. The presentation shall include an analysis of how the commission plans to ensure that there is sufficient competition and that no harmful market power concentrations will exist to impede the implementation of direct access and/or the development of alternate energy sources in this state.

The commission shall adopt and make applicable to this state's investor-owned utilities mitigation measures, supported by findings of sufficiency, based on the market power study. The commission shall make a presentation to the chairs of the fiscal and policy committees and the Chair of the JLBC, on the status of adoption of mitigation measures on market power issues on or before June 1, 1997.

Item 8860-001-0001--Department of Finance

1. Department of Finance--Performance Budget Pilot Project. The Department of Finance (DOF) shall organize, administer, and monitor the completion of the performance budgeting pilot project established pursuant to Ch 641/93. During the 1997-98 and/or 1998-99 fiscal years, the four pilot departments shall submit their budgets to the Legislature in a traditional format and in an alternative performance format which links the amount appropriated for programs and elements to specific performance. The performance measures for each program and element shall be tracked to ascertain whether or not or to what degree the specified performances are maintained. The DOF, in cooperation with the pilot departments, shall submit a report on or before January 10, 1999 documenting the extent to which specific savings or efficiencies have been achieved from performance budgeting and whether performance budgeting shall be continued in the pilot departments on a permanent basis and expanded to other departments. The performance budgeting pilot project shall conclude by
June 30, 1999.

2. Report on Loaned Positions.

a. On or before April 1, 1997, the DOF shall submit to the Legislature a report identifying the number of positions loaned from any state agency pursuant to Section 12010.5 of the Government Code, the loaning state agency, the receiving state agency, the position classification and job title, and the term of and reason for the position loan.

b. On or before April 1, 1997, the DOF shall submit to the Legislature a report identifying the number of positions loaned or on temporary assignment from a state agency pursuant to Section 19050.8 of the Government Code, the loaning classification and job title, and the term of and reason for the position loan.

Item 8940-001-0001--Military Department

1. Cost of Environmental Mitigation. It is the intent of the Legislature that the department report at budget hearings annually on costs of environmental mitigation incurred in the course of accomplishing its statutory mission.

The report should include costs of mitigation as a percentage of total project costs and should identify all fund sources allocated to mitigation costs. Mitigation costs should include items or actions required by federal, state, or local law or regulation. This includes, but is not limited to, studies, surveys, analyses, acquisition of land to provide replacement habitat, costs to complete environmental impact reports or assessments, preparation of plans, site preparation and acquisition of habitat inventory such as elderberry bushes or other vegetation required by the mitigation project. The report should include costs associated with alteration of a project to avoid mitigation. The report should include mitigation cost reimbursements to other departments or governmental agencies.

Item 8965-001-0001--Veteran's Homes of California

1. Veterans Home Information System. It is the intent of the Legislature that any shortfall in federal trust funds or reimbursement funding for the support of the Barstow veterans' home which occurs during the period in which the Interim Veterans Home Information System (IVHIS) is in use at the home be offset solely by the redirection of existing resources or the reduction of expenditures of the Department of Veterans Affairs (DVA), and not through any applications for deficiency funding pursuant to Sections 27 or 28 of the Budget Act.

It is also the intent of the Legislature that any increases in operational costs or capital outlay costs for the Barstow or the Yountville veterans' homes during the period in which the IVHIS is in use, and which are the result of the DVA's inability to implement a permanent Veterans Home Information System in time for the opening of the Barstow home, shall also be offset solely by the redirection of existing resources or the reduction of other expenditures of the DVA, and not through any applications for deficiency funding pursuant to Sections 27 or 28 of the Budget Act.

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