Effective today, the structure of the Executive Branch of California’s state government is officially changed. The new structure is important to those who provide services to, or otherwise do business with, the state. It is also important to the state’s 300,000-plus employees, many of whom will find themselves in a new agency reporting structure and all of whom will be expected to serve the public more efficiently.

Governor Brown has said that he believes that his “reforms” to the Executive Branch structure and the division of responsibility among agencies will make state government more efficient and improve agency performance.

Governor Brown’s first structural change came last year, when he worked with the Legislature to merge many of the state’s human resources functions into a new department, the California Department of Human Resources, commonly referred to as CalHR. CalHR took over responsibilities previously divided between the State Personnel Board and the Department of Personnel Administration. This “GRP1” change went into effect on July 1, 2012. (Click here for details.) To view the full plan for GRP1, click here.

However, Governor Brown’s boldest move in reforming state government operations is the one taking effect today, GRP2. To read a summary of GRP2, click here. To view the full plan, click here.

The Little Hoover Commission played a critical role in enabling today’s changes by removing politics from the process. Established in 1962 to review state activities and recommend ways to improve the efficiency and effectiveness of state government operations, the independent, bipartisan Commission enjoys the trust of all three branches of state government. With respect to GRP2, the Commission held three days of public hearings,bringing in stakeholders as varied as unions and technology companies, and reviewed written testimony as well as comments submitted by members of the public. On May 22, 2012, approximately 11 months after endorsing the creation of CalHR, it issued a report recommending that the Legislature allow GRP2 to go forward.

Like Governor Brown, the Commission found that departments and programs with similar missions were scattered throughout state government among different agencies with differing reporting structures and leadership. To avoid duplication of effort and provide focus to government policy, planning and operations, the Commission concluded that the state would benefit by consolidating these departments and programs into a single, cabinet-level agency. To read the Commission’s full report, click here.

The Legislature could have stopped the Governor’s reform plans in any number of ways, but agreed early on that only a legislative vote to reject the plan as approved by the Commission would stop the reforms from taking effect. As there has not been a legislative vote rejecting the governor’s plan, it became operative today, July 1, 2013. (Click here for more information.)

A Whole New Ball Game

Under GRP2, five state agencies that are currently being run by cabinet-level secretaries appointed by the Governor and approved by the Senate will be consolidated into three new state agencies: the Government Operations Agency; the Business, Consumer Services and Housing Agency; and the Transportation Agency. (See chart below.) The Governor appointed the new agency secretaries earlier this week. (Click here for more information.) Each is a veteran of public service in state government with the knowledge and experience to ensure a smooth transition.

GRP2 also reduces the number of cabinet-level state agencies from 12 to 10 by eliminating or consolidating the operations of dozens of departments, programs and offices. The 10 cabinet-level agencies are:

  • Business, Consumer Services and Housing (new)
  • California Health and Human Services
  • Corrections and Rehabilitation
  • Environmental Protection
  • Food and Agriculture
  • Government Operations (new)
  • Labor and Workforce Development
  • Natural Resources
  • Transportation (new)
  • Veterans Affairs

Government Operations Agency

The new Government Operations Agency is responsible for administering state operations, such as procurement, information technology and human resources. It is expected to accomplish this by bringing both the Department of General Services and the previous cabinet-level California Technology Agency under one umbrella. The new agency oversees the following nine entities:

  • Department of General Services
  • Department of Human Resources (CalHR)
  • Department of Technology (This new department retains statewide authority to centralize and unify the state’s information technology projects.)
  • Office of Administrative Law
  • Franchise Tax Board
  • California Public Employees’ Retirement System
  • California State Teachers’ Retirement System
  • State Personnel Board
  • Victim Compensation and Government Claims Board

Business, Consumer Services and Housing Agency

The new Business, Consumer Services and Housing Agency is responsible for licensing and oversight of industries, business activities and professionals. One of the objectives in forming the new überagency—in addition to facilitating shared administrative functions and expertise—is to make state government more accessible by having a central location for the public to find information about entities regulating the businesses and professionals with whom they come into direct contact. The new agency is comprised of the:

  • Department of Consumer Affairs
  • Department of Housing and Community Development
  • Department of Fair Employment and Housing
  • Department of Alcoholic Beverage Control
  • Alcoholic Beverage Control Appeals Board
  • California Horse Racing Board
  • Alfred E. Alquist Seismic Safety Commission
  • Department of Business Oversight (This new department will consolidate the state’s oversight of the financial services industry)

Transportation Agency

Responsible for all of the state’s transportation entities, the new Transportation Agency includes the following departments:

  • Department of Transportation (CalTrans)
  • Department of Motor Vehicles (DMV)
  • Office of Traffic Safety
  • High-Speed Rail Authority
  • The California Highway Patrol (CHP)
  • California Transportation Commission (CTC)
  • Board of Pilot Commissioners

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