H.B. 75

1

INVENTORY AND REVIEW OF COMMERCIAL
2 ACTIVITIES
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Craig A. Frank
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 Committee Note:
10 The Government Competition and Privatization Subcommittee recommended this bill.
11 General Description:
12 This bill enacts the Government Competition and Privatization Review Act, including
13 creating the Government Competition and Privatization Council.
14 Highlighted Provisions:
15 This bill:
16 . defines terms;
17 . creates the Government Competition and Privatization Council;
18 . establishes the duties of the council, including creating an inventory of activities of
19 government entities;
20 . requires the governor to review certain commercial activities; and
21 . creates conforming processes.
22 Monies Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 This bill takes effect on July 1, 2008.
26 This bill has a coordination clause that merges the provisions in this bill into the
27 Government Competition and Privatization Act, if this bill and H.B. 76 both pass.

28 Utah Code Sections Affected:
29 AMENDS:
30 63-55a-1, as last amended by Laws of Utah 2003, Chapter 193
31 63-55a-3, as last amended by Laws of Utah 2003, Chapter 193
32 ENACTS:
33 63-55d-101, Utah Code Annotated 1953
34 63-55d-102, Utah Code Annotated 1953
35 63-55d-103, Utah Code Annotated 1953
36 63-55d-201, Utah Code Annotated 1953
37 63-55d-202, Utah Code Annotated 1953
38 63-55d-301, Utah Code Annotated 1953
39 63-55d-302, Utah Code Annotated 1953
40 63-55d-303, Utah Code Annotated 1953
41 63-55d-304, Utah Code Annotated 1953
42
43 Be it enacted by the Legislature of the state of Utah:
44 Section 1. Section 63-55a-1 is amended to read:
45 63-55a-1. Definitions.
46 (1) (a) "Agency" means [a department, division, office, bureau, board, commission, or
47 other administrative unit of the state] a government entity as defined in Section 63-55d-102 .
48 [(b) "Agency" includes departments, divisions, offices, bureaus, boards, commissions,
49 and other administrative units of the state's counties and municipalities.]
50 (2) "Agency head" means the chief administrative officer of an agency.
51 [(3) "Privatization" means action by a state agency to contract with the private sector or
52 with another state agency to perform functions or services currently being performed by it]
53 (3) "Privatize" is as defined in Section 63-55d-102 .
54 Section 2. Section 63-55a-3 is amended to read:
55 63-55a-3. Privatization Policy Board -- Duties.
56 (1) Except as otherwise provided in Subsection (5), the board shall:
57 (a) review whether or not certain services performed by existing state agencies could
58 be privatized to provide the same types and quality of services that would result in cost

59 savings;
60 (b) review particular requests for privatization of services and issues concerning
61 agency competition with the private sector and determine whether privatization would be
62 feasible and would result in cost savings and ways to eliminate any unfair competition;
63 (c) recommend privatization to the agency head when the proposed privatization is
64 demonstrated to provide a more cost efficient and effective manner of providing existing
65 governmental services;
66 (d) comply with the provisions of Title 63, Chapter 46a, the Utah Administrative
67 Rulemaking Act, in making rules establishing privatization standards, procedures, and
68 requirements;
69 (e) maintain communication with and access information from, other entities
70 promoting privatization;
71 (f) prepare an annual report that contains:
72 (i) information about the board's activities; and
73 (ii) recommendations on privatizing government services; and
74 (g) submit the annual report to the Legislature and the governor.
75 (2) In addition to filing copies of its recommendations for privatization with the
76 relevant agency head, the board shall file copies of its recommendations for privatization with:
77 (a) the governor's office; and
78 (b) the Office of Legislative Fiscal Analyst for submission to the relevant Legislative
79 Appropriation Subcommittee.
80 (3) (a) The board may appoint advisory groups to conduct studies, research, analyses,
81 and make reports and recommendations with respect to subjects or matters within the
82 jurisdiction of the board.
83 (b) At least one member of the board shall serve on each advisory group.
84 (4) This chapter does not preclude any agency from privatizing any service or function
85 independently of the board if, as part of the contract that privatizes the function, the contractor
86 assumes all liability to perform the privatizated function.
87 (5) The board may not exercise its authority under Subsection (1) over an agency
88 [referred to in Subsection 63-55a-1 (b)] that is a local entity, as defined in Section 63-55d-102 ,
89 unless requested by the agency.

90 Section 3. Section 63-55d-101 is enacted to read:
91 CHAPTER 55d. GOVERNMENT COMPETITION AND
92 PRIVATIZATION REVIEW ACT
93 Part 1. General Provisions
94 63-55d-101. Title.
95 This chapter is known as the "Government Competition and Privatization Review Act."
96 Section 4. Section 63-55d-102 is enacted to read:
97 63-55d-102. Definitions.
98 As used in this chapter:
99 (1) (a) "Activity" means to:
100 (i) perform a service; or
101 (ii) provide a good.
102 (b) "Activity" includes to:
103 (i) manufacture a good or service;
104 (ii) process a good or service;
105 (iii) sell a good or service;
106 (iv) offer for sale a good or service;
107 (v) rent a good or service;
108 (vi) lease a good or service;
109 (vii) deliver a good or service;
110 (viii) distribute a good or service; or
111 (ix) advertise a good or service.
112 (2) "Board" means the Privatization Policy Board created by Section 63-55a-2 .
113 (3) "Commercial activity" means to engage in an activity that can be obtained in whole
114 or in part from a private enterprise.
115 (4) "Competitive program" means a program developed by the council in accordance
116 with Section 63-55d-202 .
117 (5) "Council" means the Government Competition and Privatization Council created in
118 Section 63-55d-201 .
119 (6) "Government entity" means:
120 (a) a state entity; or

121 (b) a local entity.
122 (7) (a) "Government entity employee" means a person:
123 (i) employed by a government entity to engage in an activity; or
124 (ii) engaged to perform work for or to provide an activity to a government entity.
125 (b) "Government entity employee" includes:
126 (i) a salaried employee; and
127 (ii) a wage employee.
128 (8) "Local entity" means:
129 (a) a political subdivision of the state, including a:
130 (i) county;
131 (ii) city;
132 (iii) town;
133 (iv) local school district;
134 (v) local district; or
135 (vi) special service district;
136 (b) an agency of an entity described in this Subsection (8), including a department,
137 office, division, authority, commission, or board; and
138 (c) an entity created by an interlocal cooperative agreement under Title 11, Chapter 13,
139 Interlocal Cooperation Act, between two or more entities described in this Subsection (8).
140 (9) "Private enterprise" means a person that for profit:
141 (a) manufactures a good or service;
142 (b) processes a good or service;
143 (c) sells a good or service;
144 (d) offers for sale a good or service;
145 (e) rents a good or service;
146 (f) leases a good or service;
147 (g) delivers a good or service;
148 (h) distributes a good or service; or
149 (i) advertises a good or service.
150 (10) "Privatize" means that an activity engaged in by a government entity is transferred
151 so that a private enterprise engages in the activity including a transfer by:

152 (a) contract;
153 (b) transfer of property; or
154 (c) another arrangement.
155 (11) "Public or private performance analysis" means an analysis meeting the
156 requirements of Section 63-55d-303 .
157 (12) (a) Except as provided in Subsection (12)(b), "state entity" means:
158 (i) the state;
159 (ii) an institution of higher education, as defined in Section 53B-3-102 ;
160 (iii) an agency of an entity described in this Subsection (12), including a department,
161 office, division, authority, commission, or board; and
162 (iv) an entity created by an interlocal cooperative agreement under Title 11, Chapter
163 13, Interlocal Cooperation Act, between two or more entities described in this Subsection (12)
164 or a local entity.
165 (b) "State entity" does not include the Legislature or an entity or agency of the
166 Legislature.
167 Section 5. Section 63-55d-103 is enacted to read:
168 63-55d-103. Exemptions.
169 This chapter does not apply to a transportation related project initiated pursuant to Title
170 72, Transportation Code.
171 Section 6. Section 63-55d-201 is enacted to read:
172 Part 2. Government Competition and Privatization Council
173 63-55d-201. Government Competition and Privatization Council created.
174 (1) There is created the Government Competition and Privatization Council consisting
175 of 15 members appointed as follows:
176 (a) the governor shall appoint:
177 (i) four government entity employees in the executive branch of a government entity;
178 and
179 (ii) three members to represent a private enterprise;
180 (b) the speaker of the House of Representatives shall appoint:
181 (i) two members of the House of Representatives; and
182 (ii) two members to represent a private enterprise; and

183 (c) the president of the Senate shall appoint:
184 (i) two members of the Senate; and
185 (ii) two members to represent a private enterprise.
186 (2) (a) Except as required by Subsection (2)(b), a council member shall serve until the
187 sooner of:
188 (i) the expiration of a four-year term; or
189 (ii) the day on which the council member no longer holds the position required to be
190 appointed under Subsection (1).
191 (b) A member of the council who is not a legislative member may not serve more than
192 two consecutive terms. The remainder of a term to which a council member is appointed to fill
193 a vacancy does not constitute a term in determining the council member's eligibility for
194 reappointment.
195 (c) The governor shall, at the time of appointment or reappointment, adjust the length
196 of terms to ensure that the terms of the council members are staggered so that approximately
197 half of the council is appointed every two years.
198 (d) A council member shall serve until a successor is appointed.
199 (e) When a vacancy occurs in the membership of the council for any reason, the
200 appointing authority shall appoint a replacement to the unexpired term in a manner consistent
201 with Subsection (1).
202 (3) By no later than July 31 of each year the council shall select one of its members to
203 serve as chair of the council for a one-year term.
204 (4) The council shall meet as scheduled by the chair, except that the chair shall
205 schedule a meeting at least quarterly.
206 (5) (a) Eight members of the council constitute a quorum of the council.
207 (b) An action of the council requires that:
208 (i) a quorum be present; and
209 (ii) a majority of the council members that are present vote for the action.
210 (6) (a) (i) A council member who is not a government employee may not receive
211 compensation or benefits for the council member's service, but may receive per diem and
212 expenses incurred in the performance of the council member's official duties at the rates
213 established by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .

214 (ii) A council member who is not a government employee may decline to receive per
215 diem and expenses for the council member's service.
216 (b) (i) A state government officer or employee council member who does not receive
217 salary, per diem, or expenses from the council member's agency for the council member's
218 service may receive per diem and expenses incurred in the performance of the council
219 member's official duties from the council at the rates established by the Division of Finance
220 under Sections 63A-3-106 and 63A-3-107 .
221 (ii) A state government officer or employee council member may decline to receive per
222 diem and expenses for the council member's service.
223 (c) (i) A local government council member who does not receive salary, per diem, or
224 expenses from the entity that the council member represents for the council member's service
225 may receive per diem and expenses incurred in the performance of the council member's
226 official duties at the rates established by the Division of Finance under Sections 63A-3-106 and
227 63A-3-107 .
228 (ii) A local government council member may decline to receive per diem and expenses
229 for the member's service.
230 (d) A legislator on the council shall receive compensation and expenses as provided by
231 statute and legislative rule.
232 (7) The Department of Administrative Services shall staff the council.
233 Section 7. Section 63-55d-202 is enacted to read:
234 63-55d-202. Council duties.
235 (1) The council is an advisory committee that advises the board regarding methods of
236 providing a portion or all of a commercial activity by a private enterprise.
237 (2) The council shall:
238 (a) comply with Part 3, Competitive Activities Inventory and Review, to create the
239 required inventory;
240 (b) develop an institutional framework for a statewide competitive program to
241 encourage innovation and competition within government entities;
242 (c) establish a system to encourage the use of feasibility studies and innovation to
243 determine where competition could reduce government costs without harming the public;
244 (d) advocate, develop, and accelerate implementation of a competitive program for a

245 government entity to ensure competition for a commercial activity;
246 (e) assist the board in determining the privatization potential of a commercial activity,
247 including performing an analysis of cost and benefit of privatization;
248 (f) review the procurement process under Title 63, Chapter 56, Utah Procurement
249 Code, and make recommendations for:
250 (i) improving the use and efficiency of the process;
251 (ii) releasing information to the public during all stages of the process; and
252 (iii) ensuring accountability on the part of government entity officials or employees
253 involved in the process;
254 (g) develop proposals for:
255 (i) preserving the traditional role of a private enterprise; and
256 (ii) encouraging the expansion of existing, and the creation of new, private enterprises;
257 and
258 (h) review the practices of a nonprofit organization that may constitute inappropriate
259 competition with a private enterprise.
260 (3) (a) The council may apply for, accept, and expend a gift, grant, or donation from a
261 public or private source to enable the council to better carry out its objectives.
262 (b) A person who provides a gift, grant, or donation to the council is not eligible for a
263 contract award that results from action of a council recommendation.
264 (4) The council may not impose an unreasonable burden or cost in connection with a
265 request of a government entity.
266 (5) The council shall annually by November 1 report its findings and recommendations
267 to the board.
268 Section 8. Section 63-55d-301 is enacted to read:
269 Part 3. Commercial Activities Inventory and Review
270 63-55d-301. Council to create inventory.
271 (1) By no later than June 30, 2009, the council shall create an inventory of activities of
272 a government entity in this state to classify whether the activity is:
273 (a) a commercial activity;
274 (b) an inherently governmental activity; or
275 (c) neither a commercial activity or inherently governmental activity.

276 (2) The council shall update the inventory created under this section at least every two
277 years.
278 (3) The council shall:
279 (a) provide a copy to the board of the inventory and an update to the inventory; and
280 (b) make the inventory available to the public through electronic means.
281 Section 9. Section 63-55d-302 is enacted to read:
282 63-55d-302. Governor to require review of commercial activities.
283 (1) Beginning with fiscal year 2009-10, the governor shall at least once every two fiscal
284 years:
285 (a) select at least three commercial activities that are being performed by a state entity
286 employee at a state entity for examination; and
287 (b) (i) require the Governor's Office of Planning and Budget to conduct the
288 examination; or
289 (ii) contract in accordance with Chapter 56, Utah Procurement Code with a private
290 enterprise to conduct the examination.
291 (2) The governor may require that an executive branch state entity that is engaged in a
292 commercial activity contract with a private enterprise for the commercial activity in accordance
293 with Chapter 56, Utah Procurement Code, if the governor determines that contracting for the
294 commercial activity:
295 (a) may result in a reduced cost or otherwise provide a measurable benefit to the state;
296 and
297 (b) assure that the commercial activity is accomplished in the most cost efficient and
298 effective manner.
299 Section 10. Section 63-55d-303 is enacted to read:
300 63-55d-303. Unsolicited proposals.
301 (1) After receiving a notice required by Subsection (2), the governor may direct an
302 executive branch state entity to perform a public or private performance analysis covering a
303 commercial activity for which the Privatization Policy Board or council receives a proposal
304 that:
305 (a) meets the qualifications for the commercial activity;
306 (b) is unsolicited;

307 (c) is from a private enterprise; and
308 (d) is consistent with Part 2, Government Competition and Privatization Council.
309 (2) The Privatization Policy Board or council shall notify the governor and Legislature
310 within 30 days of the day on which the Privatization Policy Board or council determines that it
311 has received a proposal meeting the requirements of Subsection (1).
312 (3) To conduct a public or private performance analysis an executive branch state
313 agency shall use the procurement methods of Chapter 56, Utah Procurement Code, to solicit
314 proposals and bids from one or more private enterprises to make cost comparison decisions.
315 (4) The council shall explore methods to encourage a government entity to compete for
316 a contract.
317 Section 11. Section 63-55d-304 is enacted to read:
318 63-55d-304. Duties of the Governor's Office of Planning and Budget.
319 (1) The Governor's Office of Planning and Budget shall:
320 (a) determine the amount of an appropriation that is no longer needed by an executive
321 branch state entity because all or a portion of the executive branch state entity's function is
322 privatized; and
323 (b) adjust the governor's budget recommendations to reflect the amount determined
324 under Subsection (1)(a).
325 (2) The Governor's Office of Planning and Budget shall ensure that the governor meets
326 a reporting requirement under this chapter.
327 (3) This section does not prevent the governor from recommending in a budget
328 recommendation the restoration of a portion of the appropriation to an executive branch state
329 entity reduced under this section.
330 Section 12. Effective date.
331 This bill takes effect on July 1, 2008.
332 Section 13. Coordinating H.B. 75 with H.B. 76 -- Merging substantive
333 amendments.
334 If this H.B. 75 and H.B. 76, Government Competition and Privatization Act, both pass,
335 it is the intent of the Legislature that:
336 (1) except as provided in this coordination clause, Chapter 55d, enacted by this bill
337 does not take effect; and

338 (2) the Office of Legislative Research and General Counsel, in preparing the Utah
339 Code database for publication, make the following changes:
340 (a) insert the following definitions in Section 63-55d-102 in this bill in alphabetical
341 order into Section 63-55d-102 enacted in H.B. 76:
342 (i) "competitive program";
343 (ii) "government entity employee"; and
344 (iii) "public or private performance analysis";
345 (b) insert Section 63-55d-103 enacted in this bill into the Government Competition and
346 Privatization Act enacted in H.B. 76, except replace a reference to "This chapter" with "Part 6,
347 Competitive Activities Inventory and Review,";
348 (c) modify Section 63-55d-201 enacted in H.B. 76 to read as follows:
349 " 63-55d-201. State Government Competition and Privatization Commission
350 created.
351 (1) (a) There is created in the department the Government Competition and
352 Privatization Commission consisting of:
353 (i) seven voting members appointed by the governor as provided in Subsection (1)(b);
354 and (ii) four nonvoting members appointed as provided in Subsection (1)(b).
355 (b) The governor shall appoint as members of the state commission:
356 (i) four individuals:
357 (A) each of whom is an owner or officer of a private enterprise that has a location in
358 the state;
359 (B) one of whom is chosen from at least two names recommended by the speaker of
360 the House of Representatives; and
361 (C) one of whom is chosen from at least two names recommended by the president of
362 the Senate;
363 (ii) one chief administrative officer of a state entity;
364 (iii) one representative of employees of a state entity; and
365 (iv) one representative who is chosen from at least four names:
366 (A) at least two names being recommended from the State Board of Education; and
367 (B) at least two names being recommended from the Board of Regents.
368 (c) (i) The president of the Senate shall appoint two senators as nonvoting members, no

369 more than one of whom may be from the same political party.
370 (ii) The speaker of the House of Representatives shall appoint two representatives as
371 nonvoting members, no more than one of whom may be from the same political party.
372 (d) A person described in Subsection (1)(b) as recommending names to the governor
373 shall submit the recommended names to the governor no later than 30 days from the day on
374 which the person receives notice from the governor that the governor is in need of the
375 recommendations.
376 (2) (a) Except as required by Subsection (2)(b), a state commission member shall serve
377 until the sooner of:
378 (i) the expiration of a four-year term; or
379 (ii) the day on which the state commission member no longer holds the position
380 required under Subsection (1) to be appointed.
381 (b) The governor shall, at the time of appointment or reappointment, adjust the length
382 of terms of voting members to ensure that the terms of the state commission voting members