Senate Committee Hearing Notes - December 19, 2011
December 19, 2011
Legislative oversight hearings allow the Senate and Assembly to review the effectiveness of government agencies, departments and programs, and help ensure that taxpayer dollars are being spent wisely. They also highlight the importance and expertise of legislative committees and staff dedicated to specific issue areas.
The Senate Majority Caucus has compiled the following summaries of oversight hearings conducted in early December 2011. This issue update is the first in a new series of updates focusing on oversight that hope to underscore the valuable role Legislative oversight plays in good government and best practices.
Senate Transportation and Housing Committee:
Senate Select Committee on Small Business & Underground Economy:
Senate Public Safety Committee:
Senate Budget and Fiscal Review Subcommittee #5 on Corrections, Public Safety, and the Judiciary:
Joint Oversight Hearing of the Senate and Assembly Health Committees:
Senate Select Committee on Energy Efficiency:
Senate Transportation and Housing Committee:
Senate Committee on Energy, Utilities and Communications:
Senate Transportation and Housing Committee:
Since December 2007, the Senate Transportation and Housing Committee, the Select Committee on High-Speed Rail and the Senate Budget Committee’s Subcommittee on Transportation and Resources have held at least twelve oversight hearings on California’s proposed High-Speed Rail (HSR) project.
The most recent joint hearing focused on the High-Speed Rail Authority’s (HSRA) Draft 2012 Business Plan – its third revision to the plan since voters approved bond funding for the project. Previous plans in 2008 and 2010 had been criticized because they were promotional in nature, did not provide a coherent HSR deployment strategy, did not use a reliable ridership forecast to determine revenue, relied extensively on public funding from state, local and federal governments, were dismissive of developing strategies to shift the project’s various risks from the state to a private co-development partner, and were opaque as to how the HSRA reached the plan’s conclusion.
In their analysis, the Transportation and Housing Committee staff concludes that the Draft 2012 Business Plan is an improvement over previously published plans, noting that the HSRA has a well-defined development strategy. The staff analysis also identified the Authority’s funding assumptions used to measure the project’s funding, cost and deliverability as clearly articulated. There remains, however, issues related to ridership, the role of the private sector, the reasonableness of funding scenarios and the state’s exposure to risk.
In the hearing, State Senator Joe Simitian (D-Palo Alto) stressed his interest in ensuring that the HSRA adheres to the framework voters approved in the original bond act.
The Senate Select Committee on Small Business and the Underground Economy held an oversight hearing earlier this month focused on: the economic impacts imposed by the underground economy, how to reduce unfair business competition, and the impact on worker compensation rates.
The Committee heard testimony that businesses operating in the underground economy impose undue burdens on California. Specifically, they maintain an unfair competitive advantage by not complying with parts or all the laws on licensing, workers’ compensation requirements, employee pay, income tax reporting, and other labor and tax programs. The industries where most underground economic activity occurs include construction, garment, courier services, janitorial services, and auto dismantling.
According to Randy Silva, Investigations Chief for the State Board of Equalization, California loses approximately $6.5 billion in revenue from sales and use taxes, income taxes, licensing fees and other tax and fee programs because of the underground economy.
Committee members agreed that more information should be provided to businesses on how to become compliant with regulations, and agencies need to increase information sharing to adequately identify those businesses not in compliance with state law. The Employment Development Department (EDD) provides an information sheet on the underground economy operations.
Additionally, Frank Neuhauser, Executive Director for the Center for the Study of Social Insurance at UC Berkeley, spoke to the Committee on the impact on employers and the anticipated effects of health reform. His presentation can be found here.
The Senate Committee on Public Safety convened a hearing regarding the public impacts of the abuse of prescription painkillers. The abuse of these drugs is considered a major problem in California, particularly among young people. During the hearing, perspectives on this issue were presented from the medical community, law enforcement and those involved in substance abuse treatment. The abuse of time-release painkillers is also a contributor to a growing number of birth defects, as women are often prescribed such painkillers during pregnancy.
Panelists at the hearing noted that nearly three out of four prescription drug overdoses are caused by prescription painkillers – also called opioid pain relievers. Additionally, concerns were raised over the fact that most prescription painkillers are prescribed by primary care and internal medicine doctors and dentists, not specialists. In fact, roughly 20% of prescribers are prescribing 80% of all prescription painkillers. These medications are often given by the patient to others, such as family members or friends, which creates more public safety problems.
Senate Budget and Fiscal Review Subcommittee #5 on Corrections, Public Safety, and the Judiciary held an oversight hearing on prison rehabilitation programs. The hearing was a follow up to a hearing in May with an objective to discuss how the Governor’s realignment plan affects rehabilitation efforts at the California Department of Corrections and Rehabilitation (CDCR). The department provided little new information on specific plans to improve rehabilitative programs for inmates, and the chair of the subcommittee, Senator Loni Hancock, noted her concern and indicated that this will clearly be an issue of discussion in the traditional budget process in the spring.
CDCR staff presented the committee with a power point presentation on their current programs and how the department has improved tracking of inmates through programs. However, committee members noted that there is still no objective means for gauging the effectiveness of the programs. In total, CDCR provides vocational programs for 4,900 inmates and educational programs for 32,500 inmates.
Members of the public, some of them teachers at state prisons, noted improvements, yet discussed several concerns they have with the rehabilitation programs offered in prison. For instance, teachers noted that their ability to move inmates among programs has been improved, but that work still needs to be done to improve the initial placement of inmates into programs.
Subcommittee members were of the opinion that CDCR should be further along in their planning for improvement of inmate rehabilitative programs post-realignment. They noted that the subcommittee will continue to track this issue during the spring budget process.
In 2010, President Obama signed the Patient Protection and Affordable Care Act (ACA). Under the Act, states were authorized to establish a healthcare exchange which would certify health plans for participation. California established the first healthcare exchange in the nation through the passage of SB 900 (Alquist) and AB 1602 (J. Perez).
In November 2010, California received a federal waiver to allow mandatory enrollment of over 60,000 low income seniors and persons with disabilities into Medi-Cal managed care plans. SB 208 (Steinberg) contained many of the provisions to implement the waiver.
This legislative oversight hearing covered the lessons learned and the problems with implementation of the waiver. Jane Ogle, from the Department of Health Care Services (DHC), Deputy Director of Health Care Delivery Systems testified that enrollment numbers were lower than expected, although she admitted that the contact number was not widely known. Among the problems identified is the fact that the package to enroll is lengthy and has been daunting for many people. To lessen this concern, the enrollment package will be streamlined.
Advocates raised concerns that their clients were not able to talk to the Department of Manage Health Care (DMHC) Patient Advocate when they had problems with enrollment or exemption issues. Members of the committee indicated that work clearly needs to be done to address the continuity and coordination of health care issues. Howard Kahn, CEO of L.A. Care Health Plan expressed his opinion that the solution is to increase the choice of plans, and this will translate into continuity of care. It was widely agreed that continued oversight of implementation of the transition will be crucial in the coming year.
The Senate Select Committee on Energy Efficiency, chaired by Senator Kevin de León, met on December 7th to examine California’s investment shortfall in energy efficiency. The hearing highlighted the tremendous opportunity to create huge gains in energy savings, greenhouse gas emission reductions, and job creation for California’s hard-hit construction industry by increasing energy efficiency investments.
The hearing was composed of three panels which included investor owned utilities, the Los Angeles Department of Water and Power, the California Public Utilities Commission (CPUC), capital market representatives and members of the energy efficiency industry. Issues explored during the hearing included the amount of commercial space in need of retrofits throughout the State, an overview of proposed changes to energy efficiency programs post public-goods-charge, and how to expedite widespread adoption of commercial retrofits.
The hearing provided valuable information likely to produce legislation in 2012 that will help achieve the chair’s goal of increasing the pace and scope of commercial retrofit activity.
The Senate Transportation and Housing Committee held its second of three hearings exploring regional governance in the Bay Area. The objective of the hearings has been to evaluate the Bay Area’s current regional structure and to identify options to enhance regional decision-making. This is especially important with the enactment of SB 375 (Steinberg) in 2008, which put a premium on coordinated regional land use and transportation planning in order to reduce greenhouse gas emissions.
The hearing focused on the question of what role, if any, regional institutions should play in a regional economic development strategy. In addition, continuing the discussion from their first hearing, the committee heard San Francisco’s position on the issue of regional representation on the governing board of the Metropolitan Transportation Commission (MTC).
AB 57 (Beall), currently pending in the committee, increases the membership of the Metropolitan Transportation Commission from 19 to 21 members by adding the mayors of the City of San José and the City of Oakland. The committee did not hear AB 57 in 2011 so that it could host this more in-depth discussion of regional issues.
The purpose of this hearing was to assess the Los Angeles Department of Water and Power’s (LADWP) progress in meeting its renewable energy and energy efficiency goals. Los Angeles City officials recently announced the goal of meeting a 20 percent renewable energy target.
The members of the Senate Committee on Energy, Utilities and Communications asked presenters about the plans and costs of continuing to comply with the city's goal as well as California’s own new renewable energy mandate of 33% by the year 2020. The Committee also reviewed LADWP's strategies and administration of $8.5 million in American Recovery and Reinvestment Act (ARRA) funds for energy efficiency projects to ensure that projects were completed and funds allocated before the March 31, 2012 federal deadline.