(a) The department, in consultation with the Department of Finance, shall reassess the formal rate methodology and relevant policies and procedures for state data center services.

(b) Upon appropriation by the Legislature, moneys to support the administrative costs or revenue losses sustained by the department during the rate reassessment shall be allocated to the department from the General Fund.

Terms Used In California Government Code 11540.5

  • Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • State: means the State of California, unless applied to the different parts of the United States. See California Government Code 18
  • Subdivision: means a subdivision of the section in which the term occurs unless some other section is expressly mentioned. See California Government Code 10

(c) The department shall conduct the rate reassessment commencing July 1, 2022, and shall complete the rate reassessment no later than June 30, 2025.

(d) Upon completion of the rate reassessment, any remaining funds transferred from the General Fund for the purposes of administrative costs or revenue losses sustained by the department shall be transferred to the Technology Services Revolving Fund created by Section 11544 no later than June 30, 2025.

(e) To complete the rate reassessment, the department, in consultation with the Department of Finance, shall do all of the following:

(1) Develop a rate structure that would allow a state entity or other customer of a state data center to compare services offered by state data centers with comparable services offered by major private vendors, including, but not limited to, features, levels of service, rates, and service options for all offered services.

(2) Determine and designate which state data center services are either cost inefficient or mandatory.

(3) Evaluate the potential elimination of both cost-inefficient state data center services and nonmandatory state data center services.

(4) (A) Recommend revision of policies, procedures, and strategies for the provision of state data center services, including, but not limited to, all of the following:

(i) Creating centralized contracts for shared information technology services to replace state data center services, including, but not limited to, contracts pursuant to subdivision (b) of Section 11546.45.

(ii) Requiring state entities to use specific state data center services needed to maintain a certain level of service for critical programs.

(iii) Instating term agreements for state data center services to improve revenue and expenditure forecasting.

(B) The recommendations shall consider how to revise the policies, procedures, and strategies, including, but not limited to, those in subparagraph (A), to provide state data center services in a cost-effective, efficient, and strategic manner.

(f) Commencing April 1, 2023, and every twelve months thereafter until August 1, 2025, the department shall submit a written report to relevant budget subcommittees of both houses and to the Joint Legislative Budget Committee on progress toward the state data center rate reassessment requirements in subdivision (e); its consideration of changes to current policies, procedures, and strategies pursuant to paragraph (4) of subdivision (e); and on all of the following outcome metrics:

(1) The total number of services offered by state data centers.

(2) The total number of services identified for elimination from state data centers.

(3) An explanation and timeline for the elimination of services identified in paragraph (2).

(4) The amount and percentage change in rates, if any, for state data center services.

(5) An explanation for the change in rates, if any, calculated pursuant to paragraph (4).

(6) The estimated difference in rates by service between state data centers and major private vendors based on the total cost of ownership, which include, but are not limited to, migration costs, managed service support, comparable features, levels of service, and service options.

(7) An explanation for the difference in service rates calculated pursuant to paragraph (6).

(8) The forecasted change in state data center service subscriptions over the current fiscal year and next two fiscal years.

(9) The forecasted change in state data center revenues and expenditures over the current fiscal year and next two fiscal years based on the change in subscriptions forecasted in paragraph (8).

(g) For purposes of this section, the following definitions have the following meanings:

(1) “Cost-inefficient services” means services for which state data center service rates are higher than major private vendor service rates once the state data center service rates are reduced to cover only direct costs.

(2) “Department,” unless otherwise stated, refers to the Department of Technology.

(3) “Major private vendors” shall be designated pursuant to specific criteria.

(4) “Mandatory services” means state data center services that must be used by all state entities to achieve greater cost efficiency, improved security, or other comparable reasons identified by the department.

(5) “State data center” means a Tier III or equivalent data center, as designated by the department.

(Added by Stats. 2022, Ch. 48, Sec. 25. (SB 189) Effective June 30, 2022.)

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