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H.B. 94
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8 LONG TITLE
9 General Description:
10 This bill recodifies and amends the Privatization Policy Board Act, changes the
11 membership on the board, and renames the board.
12 Highlighted Provisions:
13 This bill:
14 . recodifies the Privatization Policy Board Act;
15 . changes the name of the board to the Free Market Protection and Privatization
16 Board;
17 . changes the membership and terms of members of the board;
18 . provides that the State Auditor's Office shall staff the board and permits the board to
19 contract with a private entity for additional staff;
20 . revises the duties and powers of the board; and
21 . makes technical changes.
22 Money Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 None
26 Utah Code Sections Affected:
27 AMENDS:
28 10-1-119, as enacted by Laws of Utah 2008, Chapter 23
29 17-50-107, as enacted by Laws of Utah 2008, Chapter 23
30 26-18-3.3, as enacted by Laws of Utah 2011, Chapter 162
31 ENACTS:
32 63I-4a-201, Utah Code Annotated 1953
33 63I-4a-204, Utah Code Annotated 1953
34 63I-4a-301, Utah Code Annotated 1953
35 63I-4a-401, Utah Code Annotated 1953
36 RENUMBERS AND AMENDS:
37 63I-4a-101, (Renumbered from 63I-4-101, as enacted by Laws of Utah 2008, Chapter
38 147)
39 63I-4a-102, (Renumbered from 63I-4-102, as last amended by Laws of Utah 2012,
40 Chapter 212)
41 63I-4a-202, (Renumbered from 63I-4-201, as last amended by Laws of Utah 2010,
42 Chapter 286)
43 63I-4a-203, (Renumbered from 63I-4-202, as renumbered and amended by Laws of
44 Utah 2008, Chapter 147)
45 63I-4a-205, (Renumbered from 63I-4-203, as enacted by Laws of Utah 2008, Chapter
46 147)
47 63I-4a-302, (Renumbered from 63I-4-301, as enacted by Laws of Utah 2008, Chapter
48 147)
49 63I-4a-303, (Renumbered from 63I-4-302, as enacted by Laws of Utah 2008, Chapter
50 147)
51 63I-4a-304, (Renumbered from 63I-4-303, as enacted by Laws of Utah 2008, Chapter
52 147)
53 63I-4a-402, (Renumbered from 63I-4-304, as enacted by Laws of Utah 2008, Chapter
54 147)
55 Uncodified Material Affected:
56 ENACTS UNCODIFIED MATERIAL
57
58 Be it enacted by the Legislature of the state of Utah:
59 Section 1. Section 10-1-119 is amended to read:
60 10-1-119. Inventory of competitive activities.
61 (1) As used in this section:
62 (a) "Applicable city" means:
63 (i) on and after July 1, 2009, a city of the first class; and
64 (ii) on and after July 1, 2010, a city of the first or second class.
65 (b) "Competitive activity" means an activity engaged in by a city or an entity created by
66 the city by which the city or an entity created by the city provides a good or service that is
67 substantially similar to a good or service that is provided by a person:
68 (i) who is not an entity of the federal government, state government, or a political
69 subdivision of the state; and
70 (ii) within the boundary of the county in which the city is located.
71 (c) (i) Subject to Subsection (1)(c)(ii), "entity created by the city" includes:
72 (A) an entity created by an interlocal agreement under Title 11, Chapter 13, Interlocal
73 Cooperation Act, in which the city participates; and
74 (B) a special service district created under Title 17D, Chapter 1, Special Service
75 District Act.
76 (ii) "Entity created by the city" does not include a local district created by a city under
77 Title 17B, Limited Purpose Local Government Entities - Local Districts.
78 (2) (a) The governing body of an applicable city shall create an inventory of activities
79 of the city or an entity created by the city to:
80 (i) classify whether an activity is a competitive activity; and
81 (ii) identify efforts that have been made to privatize aspects of the activity.
82 (b) An applicable city shall comply with this section by no later than:
83 (i) June 30, 2010, if the applicable city is a city of the first class; and
84 (ii) June 30, 2011, if the applicable city is a city of the second class.
85 (3) The governing body of an applicable city shall update the inventory created under
86 this section at least every two years.
87 (4) An applicable city shall:
88 (a) provide a copy of the inventory and an update to the inventory to the Free Market
89 Protection and Privatization [
90 Protection and Privatization [
91 (b) make the inventory available to the public through electronic means.
92 Section 2. Section 17-50-107 is amended to read:
93 17-50-107. Inventory of competitive activities.
94 (1) As used in this section:
95 (a) "Applicable county" means:
96 (i) on and after July 1, 2009, a county of the first class; and
97 (ii) on and after July 1, 2010, a county of the first or second class.
98 (b) "Competitive activity" means an activity engaged in by a county or an entity created
99 by the county by which the county or an entity created by the county provides a good or service
100 that is substantially similar to a good or service that is provided by a person:
101 (i) who is not an entity of the federal government, state government, or a political
102 subdivision of the state; and
103 (ii) within the boundary of the county.
104 (c) (i) Subject to Subsection (1)(c)(ii), "entity created by the county" includes:
105 (A) an entity created by an interlocal agreement under Title 11, Chapter 13, Interlocal
106 Cooperation Act, in which the county participates; and
107 (B) a special service district created under Title 17D, Chapter 1, Special Service
108 District Act.
109 (ii) "Entity created by the county" does not include a local district created by a county
110 under Title 17B, Limited Purpose Local Government Entities - Local Districts.
111 (2) (a) The governing body of an applicable county shall create an inventory of
112 activities of the county or an entity created by the county to:
113 (i) classify whether an activity is a competitive activity; and
114 (ii) identify efforts that have been made to privatize aspects of the activity.
115 (b) An applicable county shall comply with this section by no later than:
116 (i) June 30, 2010, if the applicable county is a county of the first class; and
117 (ii) June 30, 2011, if the applicable county is a county of the second class.
118 (3) The governing body of an applicable county shall update the inventory created
119 under this section at least every two years.
120 (4) An applicable county shall:
121 (a) provide a copy of the inventory and an update to the inventory to the Free Market
122 Protection and Privatization [
123 Protection and Privatization [
124 (b) make the inventory available to the public through electronic means.
125 Section 3. Section 26-18-3.3 is amended to read:
126 26-18-3.3. Study of privatization of eligibility determination.
127 (1) The department shall work with the Department of Workforce Services, the
128 Department of Human Services, and the Free Market Protection and Privatization [
129 Board created in Section [
130 system for the state Medicaid program in accordance with this section.
131 (2) (a) The study shall include the state's eligibility determination system for the
132 following programs:
133 (i) the state Medicaid program;
134 (ii) the Utah Children's Health Insurance Program created under Chapter 40, Utah
135 Children's Health Insurance Act;
136 (iii) the Primary Care Network;
137 (iv) the Utah Premium Partnership; and
138 (v) other eligibility systems administered by the Department of Workforce Services.
139 (b) The study shall include:
140 (i) the workflow and operations of the eligibility determination systems for the
141 programs described in Subsection (2)(a); and
142 (ii) efficiencies that may be obtained through:
143 (A) consolidation of the eligibility determination systems;
144 (B) privatization of the eligibility determination systems; and
145 (C) other technology or organizational solutions for the eligibility determination
146 systems.
147 (3) The department, the Department of Workforce Services, and the Free Market
148 Protection and Privatization [
149 Legislature's Health and Human Services Interim Committee and to the Social Services
150 Appropriations Subcommittee regarding the findings of the study and any recommendations
151 and options regarding the advantages and disadvantages to the state in privatizing the eligibility
152 determination system.
153 Section 4. Section 63I-4a-101 , which is renumbered from Section 63I-4-101 is
154 renumbered and amended to read:
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158 [
159 (1) This chapter is known as the "Free Market Protection and Privatization [
160 Board Act."
161 (2) This part is known as "General Provisions."
162 Section 5. Section 63I-4a-102 , which is renumbered from Section 63I-4-102 is
163 renumbered and amended to read:
164 [
165 (1) (a) "Activity" means to provide a good or service.
166 (b) "Activity" includes to:
167 (i) manufacture a good or service;
168 (ii) process a good or service;
169 (iii) sell a good or service;
170 (iv) offer for sale a good or service;
171 (v) rent a good or service;
172 (vi) lease a good or service;
173 (vii) deliver a good or service;
174 (viii) distribute a good or service; or
175 (ix) advertise a good or service.
176 (2) (a) Except as provided in Subsection (2)(b), "agency" means:
177 (i) the state; or
178 (ii) an entity of the state including a department, office, division, authority,
179 commission, or board.
180 (b) "Agency" does not include:
181 (i) the Legislature;
182 (ii) an entity or agency of the Legislature;
183 (iii) the state auditor;
184 (iv) the state treasurer;
185 (v) the Office of the Attorney General;
186 (vi) the Dairy Commission created in Title 4, Chapter 22, Dairy Promotion Act;
187 (vii) the Utah Science Center Authority created in Title 63H, Chapter 3, Utah Science
188 Center Authority;
189 (viii) the Heber Valley Railroad Authority created in Title 63H, Chapter 4, Heber
190 Valley Historic Railroad Authority;
191 (ix) the Utah State Railroad Museum Authority created in Title 63H, Chapter 5, Utah
192 State Railroad Museum Authority;
193 (x) the Utah Housing Corporation created in Title 35A, Chapter 8, Part 7, Utah
194 Housing Corporation Act;
195 (xi) the Utah State Fair Corporation created in Title 63H, Chapter 6, Utah State Fair
196 Corporation Act;
197 (xii) the Workers' Compensation Fund created in Title 31A, Chapter 33, Workers'
198 Compensation Fund;
199 (xiii) the Utah State Retirement Office created in Title 49, Chapter 11, Utah State
200 Retirement Systems Administration;
201 (xiv) a charter school chartered by the State Charter School Board or a board of
202 trustees of a higher education institution under Title 53A, Chapter 1a, Part 5, The Utah Charter
203 Schools Act;
204 (xv) the Utah Schools for the Deaf and the Blind created in Title 53A, Chapter 25b,
205 Utah Schools for the Deaf and the Blind;
206 (xvi) an institution of higher education as defined in Section 53B-3-102 ;
207 (xvii) the School and Institutional Trust Lands Administration created in Title 53C,
208 Chapter 1, Part 2, School and Institutional Trust Lands Administration;
209 (xviii) the Utah Communications Agency Network created in Title 63C, Chapter 7,
210 Utah Communications Agency Network Act; or
211 (xix) the Utah Capital Investment Corporation created in Title 63M, Chapter 1, Part 12,
212 Utah Venture Capital Enhancement Act.
213 (3) "Agency head" means the chief administrative officer of an agency.
214 (4) "Board" means the Free Market Protection and Privatization [
215 in Section [
216 (5) "Commercial activity" means to engage in an activity that can be obtained in whole
217 or in part from a private enterprise.
218 (6) "Local entity" means:
219 (a) a political subdivision of the state, including a:
220 (i) county;
221 (ii) city;
222 (iii) town;
223 (iv) local school district;
224 (v) local district; or
225 (vi) special service district;
226 (b) an agency of an entity described in this Subsection (6), including a department,
227 office, division, authority, commission, or board; [
228 (c) an entity created by an interlocal cooperative agreement under Title 11, Chapter 13,
229 Interlocal Cooperation Act, between two or more entities described in this Subsection (6).
230 (7) "Private enterprise" means a person that engages in an activity for profit[
231 [
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234 [
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240 (8) "Privatize" means that an activity engaged in by an agency is transferred so that a
241 private enterprise engages in the activity, including a transfer by:
242 (a) contract;
243 (b) transfer of property; or
244 (c) another arrangement.
245 Section 6. Section 63I-4a-201 is enacted to read:
246
247 63I-4a-201. Title.
248 This part is known as "Free Market Protection and Privatization Board."
249 Section 7. Section 63I-4a-202 , which is renumbered from Section 63I-4-201 is
250 renumbered and amended to read:
251 [
252 Created -- Membership -- Operations -- Expenses.
253 [
254 [
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267 (1) There is created the Free Market Protection and Privatization Board, comprised of
268 the following 11 members:
269 (a) two members, who are not legislators, appointed by the president of the Senate;
270 (b) two members, who are not legislators, appointed by the speaker of the House;
271 (c) the following members appointed by the governor:
272 (i) one member representing small business;
273 (ii) one member representing sellers of retail goods;
274 (iii) one member representing providers of services;
275 (iv) one member representing nonprofit organizations; and
276 (v) one member representing business generally; and
277 (d) the following members appointed by the state auditor:
278 (i) one member representing small business; and
279 (ii) one member representing financial service providers.
280 (2) The state auditor is a nonvoting member of the board.
281 [
282 member[
283
284 (b) Notwithstanding the requirements of Subsection [
285 by the first members of the board appointed by the governor under Subsection (1)(c) shall[
286
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288 two years.
289 [
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291 [
292 appointed and qualified.
293 (b) When a vacancy occurs in the membership for any reason, a replacement shall be
294 appointed for the unexpired term.
295 (c) [
296 (d) The vote of a majority of board members voting when a quorum is present is
297 necessary for the board to act.
298 [
299 board.
300 (b) A chair shall serve as chair for a term of one-year, and may be selected as chair for
301 more than one term.
302 [
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304 (6) The State Auditor's Office shall staff the board. The board may contract for
305 additional staff from the private sector under Section 63I-4a-204 .
306 [
307 (a) at least quarterly; and
308 (b) as necessary to conduct its business, as called by the chair.
309 [
310 but may receive per diem and travel expenses in accordance with:
311 (a) Section 63A-3-106 ;
312 (b) Section 63A-3-107 ; and
313 (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
314 63A-3-107 .
315 Section 8. Section 63I-4a-203 , which is renumbered from Section 63I-4-202 is
316 renumbered and amended to read:
317 [
318 Duties.
319 (1) The board shall:
320 (a) [
321 agency could be privatized to provide the same types and quality of a good or service that
322 would result in cost savings;
323 (b) review privatization of [
324 (i) an agency; or
325 (ii) a private enterprise;
326 (c) review issues concerning agency competition with one or more private enterprises
327 to determine:
328 (i) whether privatization:
329 (A) would be feasible;
330 (B) would result in cost savings; and
331 (C) would result in equal or better quality of a good or service; and
332 (ii) ways to eliminate any unfair competition with a private enterprise;
333 (d) recommend privatization to an agency if a proposed privatization is demonstrated
334 to provide a more cost efficient and effective manner of providing a good or service[
335 into account:
336 (i) the scope of providing the good or service;
337 (ii) whether cost savings will be realized;
338 (iii) whether quality will be improved;
339 (iv) the impact on risk management;
340 (v) the impact on timeliness;
341 (vi) the ability to accommodate fluctuating demand;
342 (vii) the ability to access outside expertise;
343 (viii) the impact on oversight;
344 (ix) the ability to develop sound policy and implement best practices; and
345 (x) legal and practical impediments to privatization;
346 (e) comply with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, in making
347 rules establishing privatization standards, procedures, and requirements;
348 (f) in fulfilling the duties described in this Subsection (1), consult with, maintain
349 communication with, and access information from[
350 (i) other entities promoting privatization; and
351 (ii) managers and employees in the public sector;
352 (g) comply with Part 3, Commercial Activities Inventory and Review; and
353 (h) (i) prepare an annual report for each calendar year that contains:
354 (A) information about the board's activities;
355 (B) recommendations on privatizing [
356 agency; and
357 (C) the status of the inventory created under Part 3, Commercial Activities Inventory
358 and Review;
359 (ii) submit the annual report to the Legislature and the governor by no later than
360 January 15 immediately following the calendar year for which the report is made; and
361 (iii) provide [
362 Committee each interim.
363 (2) The board may, using the criteria described in Subsection (1), consider whether to
364 recommend privatization of an activity provided by an agency, a local entity, or a state
365 institution of higher education:
366 (a) on the board's own initiative;
367 (b) upon request by an agency, a local entity, or a state institution of higher education;
368 (c) in response to a complaint that an agency, a local entity, or a state institution of
369 higher education is engaging in unfair competition with a private enterprise; or
370 (d) in light of a proposal made by any person, regardless of whether the proposal was
371 solicited.
372 [
373 agency head, the board shall file a copy of its recommendations for privatization with:
374 (a) the governor's office; and
375 (b) the Office of Legislative Fiscal Analyst for submission to the relevant legislative
376 appropriation subcommittee.
377 [
378 analyses, and make reports and recommendations with respect to a matter within the
379 jurisdiction of the board.
380 (b) At least one member of the board shall serve on each advisory group.
381 [
382 from privatizing the provision of a good or service independent of the board.
383 (b) If an agency privatizes the provision of a good or service, the agency shall include
384 as part of the contract that privatizes the provision of the good or service that any contractor
385 assumes all liability to provide the good or service.
386 [
387 [
388 [
389 [
390 Section 9. Section 63I-4a-204 is enacted to read:
391 63I-4a-204. Staff support -- Assistance to an agency, local entity, or state
392 institution of higher education.
393 The board may, within funds appropriated by the Legislature for this purpose, issue a
394 request for proposals to contract with a private sector person or entity to:
395 (1) provide staff support to the board;
396 (2) assist the board in conducting its duties, including completing the inventory
397 described in Part 3, Commercial Activities Inventory and Review; and
398 (3) at the board's direction, assist an agency, a local entity, or a state institution of
399 higher education to:
400 (a) develop a business case for potential privatization of an activity, using the criteria
401 described in Subsection 63I-4a-203 (1);
402 (b) draft, issue, or evaluate a request for proposals to privatize an activity; or
403 (c) award a contract to privatize an activity.
404 Section 10. Section 63I-4a-205 , which is renumbered from Section 63I-4-203 is
405 renumbered and amended to read:
406 [
407 The board by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
408 Rulemaking Act, shall establish an accounting method that:
409 (1) is similar to generally accepted accounting principles used by a private enterprise;
410 (2) allows an agency to identify the total actual cost of engaging in a commercial
411 activity in a manner similar to how a private enterprise identifies the total actual cost to the
412 private enterprise, including the following:
413 (a) a labor expense, [
414 (i) compensation and benefits;
415 (ii) a cost of training;
416 (iii) a cost of paying overtime;
417 (iv) a cost of supervising labor; or
418 (v) another personnel expense;
419 (b) an operating cost, [
420 (i) vehicle maintenance and repair;
421 (ii) a marketing, advertising, or other sales expense;
422 (iii) an office expense;
423 (iv) a cost of an accounting operation, [
424 (v) an insurance expense;
425 (vi) a real estate or equipment cost;
426 (vii) a debt service cost; or
427 (viii) a proportionate amount of other overhead or of a capital expense, such as vehicle
428 depreciation and depreciation of other fixed assets;
429 (c) a contract management cost; and
430 (d) another cost particular to a person supplying the good or service; and
431 (3) provides a process to estimate the taxes an agency would pay related to engaging in
432 a commercial activity if the agency were required to pay federal, state, and local taxes to the
433 same extent as a private enterprise engaging in the commercial activity.
434 Section 11. Section 63I-4a-301 is enacted to read:
435
436 63I-4a-301. Title.
437 This part is known as "Commercial Activities Inventory and Review."
438 Section 12. Section 63I-4a-302 , which is renumbered from Section 63I-4-301 is
439 renumbered and amended to read:
440 [
441 [
442 compile and make available to the public, by electronic means, an updated inventory of
443 activities of the agencies in [
444 [
445 [
446 [
447
448 [
449
450 Section 13. Section 63I-4a-303 , which is renumbered from Section 63I-4-302 is
451 renumbered and amended to read:
452 [
453 [
454
455 (1) select [
456 an agency for examination; and
457 (2) require the Governor's Office of Planning and Budget to conduct the examination
458 and make the determinations and recommendations described in Subsections 63I-4a-203 (1)(a),
459 (c), and (d).
460 Section 14. Section 63I-4a-304 , which is renumbered from Section 63I-4-303 is
461 renumbered and amended to read:
462 [
463 Budget.
464 (1) The Governor's Office of Planning and Budget shall:
465 (a) determine the amount of an appropriation that is no longer needed by an executive
466 branch agency because all or a portion of the agency's provision of a good or service is
467 privatized; and
468 (b) adjust the governor's budget recommendations to reflect the amount determined
469 under Subsection (1)(a).
470 (2) The Governor's Office of Planning and Budget shall report its findings to the
471 Legislature.
472 (3) This section does not prevent the governor from recommending in a budget
473 recommendation the restoration of a portion of the appropriation to an agency that is reduced
474 under this section.
475 Section 15. Section 63I-4a-401 is enacted to read:
476
477 63I-4a-401. Title.
478 This part is known as "Miscellaneous Provisions."
479 Section 16. Section 63I-4a-402 , which is renumbered from Section 63I-4-304 is
480 renumbered and amended to read:
481 [
482 (1) This chapter or the inclusion of an activity on an inventory made under this chapter
483 may not be construed as a waiver of any right, claim, or defense of immunity that an agency
484 may have under Title 63G, Chapter 7, Governmental Immunity Act of Utah, or other law.
485 (2) The inclusion in an inventory of an activity as a commercial activity for purposes of
486 this chapter may not be construed to find that the activity does not constitute an exercise of a
487 governmental function.
488 Section 17. Transition clause.
489 (1) All appointments made to the Privatization Policy Board before the effective date
490 of this bill are terminated on the effective date of this bill.
491 (2) This Section 17 of this bill is repealed on December 31, 2013.
Legislative Review Note
as of 1-8-13 3:03 PM