First Substitute H.B. 357

Representative Ronda Rudd Menlove proposes the following substitute bill:


             1     
BUDGETARY AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Ronda Rudd Menlove

             5     
Senate Sponsor: Curtis S. Bramble

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions relating to budgeting requirements.
             10      Highlighted Provisions:
             11          This bill:
             12          .    amends provisions regarding the powers, functions, and duties of the Office of
             13      Legislative Fiscal Analyst regarding the appropriations process;
             14          .    requires the Governor's Office of Management and Budget to provide to the Office
             15      of Legislative Fiscal Analyst certain information, data, analysis, or requests used by
             16      the governor in preparing the governor's budget recommendations;
             17          .    repeals provisions regarding certain inclusions and recommendations in the
             18      governor's budget;
             19          .    repeals provisions requiring the Legislature to consider in the appropriations
             20      process:
             21              .    wage increases for certain entities; and
             22              .    amounts sufficient to fund the Utah Comprehensive Health Insurance Pool;
             23          .    repeals provisions regarding procedures for recommending, requesting, and
             24      conducting a single in-depth budget review and makes in-depth budget reviews part
             25      of the regular budget process;


             26          .    requires certain inclusions in the revenue volatility report submitted by the Office of
             27      Legislative Fiscal Analyst and the Governor's Office of Management and Budget;
             28      and
             29          .    makes technical corrections.
             30      Money Appropriated in this Bill:
             31          None
             32      Other Special Clauses:
             33          None
             34      Utah Code Sections Affected:
             35      AMENDS:
             36           36-12-13 , as last amended by Laws of Utah 2013, Chapter 190
             37           51-5-7 , as last amended by Laws of Utah 2013, Chapter 400
             38           63J-1-201 , as last amended by Laws of Utah 2013, Chapters 158, 167, and 413
             39           63J-1-205 , as last amended by Laws of Utah 2013, Chapters 310 and 346
             40      REPEALS:
             41           63J-1-201.7 , as last amended by Laws of Utah 2012, Chapters 242 and 341
             42           63J-1-701 , as last amended by Laws of Utah 2013, Chapter 310
             43           63J-1-702 , as last amended by Laws of Utah 2013, Chapter 310
             44           63J-1-703 , as renumbered and amended by Laws of Utah 2009, Chapter 183
             45     
             46      Be it enacted by the Legislature of the state of Utah:
             47          Section 1. Section 36-12-13 is amended to read:
             48           36-12-13. Office of Legislative Fiscal Analyst established -- Powers, functions,
             49      and duties -- Qualifications.
             50          (1) There is established an Office of Legislative Fiscal Analyst as a permanent staff
             51      office for the Legislature.
             52          (2) The powers, functions, and duties of the Office of Legislative Fiscal Analyst under
             53      the supervision of the fiscal analyst are:
             54          (a) to analyze in detail the [executive] state budget before the convening of each
             55      legislative session and make recommendations to the Legislature on each item or program
             56      appearing in the [executive] budget[;], including:


             57          (i) funding for and performance of programs, acquisitions, and services currently
             58      undertaken by state government to determine whether each department, agency, institution, or
             59      program should:
             60          (A) continue at its current level of expenditure;
             61          (B) continue at a different level of expenditure; or
             62          (C) be terminated; and
             63          (ii) increases or decreases to spending authority and other resource allocations for the
             64      current and future fiscal years;
             65          (b) to prepare cost estimates on all proposed bills that anticipate state government
             66      expenditures;
             67          (c) to prepare cost estimates on all proposed bills that anticipate expenditures by
             68      county, municipal, local district, or special service district governments;
             69          (d) to prepare cost estimates on all proposed bills that anticipate direct expenditures by
             70      any Utah resident or business, and the cost to the overall impacted Utah resident or business
             71      population;
             72          (e) to prepare a review and analysis of revenue estimates for existing and proposed
             73      revenue acts;
             74          (f) to report instances in which the administration may be failing to carry out the
             75      expressed intent of the Legislature;
             76          [(g) to direct attention to each new proposed service contained in the governor's
             77      budget;]
             78          [(h) to direct attention to each budget item previously denied by the Legislature;]
             79          [(i)] (g) to propose and analyze statutory changes for more effective operational
             80      economies or more effective administration;
             81          [(j)] (h) to prepare, after each session of the Legislature, a summary showing the effect
             82      of the final legislative program on the financial condition of the state;
             83          [(k)] (i) to conduct organizational and management improvement studies;
             84          [(l)] (j) to prepare and deliver upon request of any interim committee or the Legislative
             85      Management Committee, reports on the finances of the state and on anticipated or proposed
             86      requests for appropriations;
             87          [(m)] (k) to recommend areas for research studies by the executive department or the


             88      interim committees;
             89          [(n) to assist in prescribing the format for the presentation of the governor's budget to
             90      facilitate program and in-depth review of state expenditures in accordance with Sections
             91      63J-1-701 and 63J-1-702 ;]
             92          [(o) to recommend to the appropriations subcommittees the agencies or programs for
             93      which an in-depth budget review should be requested, and to recommend to the Legislative
             94      Management Committee the priority in which the request should be made;]
             95          [(p)] (l) to appoint and develop a professional staff within budget limitations;
             96          [(q)] (m) to prepare and submit the annual budget request for the office;
             97          [(r)] (n) to develop a taxpayer receipt:
             98          (i) available to taxpayers through a website; and
             99          (ii) that allows a taxpayer to view on the website an estimate of how the taxpayer's tax
             100      dollars are expended for government purposes; and
             101          [(s)] (o) to publish or provide other information on taxation and government
             102      expenditures that may be accessed by the public.
             103          [(3) (a) In accordance with Subsection (3)(b) and subject to Subsection (3)(c), the
             104      Office of Legislative Fiscal Analyst shall submit an annual report to the Executive
             105      Appropriations Committee of the Legislature, at the committee's November meeting, on funds
             106      expended by the state during the preceding state fiscal year to provide financial assistance or
             107      services to low-income individuals and families.]
             108          [(b) The report described in Subsection (3)(a) shall:]
             109          [(i) separate the funds expended into categories by program, service, or population
             110      served;]
             111          [(ii) indicate whether the expended funds described in Subsection (3)(a) are state or
             112      federal funds; and]
             113          [(iii) include a total of all state funds and federal funds expended by the state in the
             114      preceding fiscal year to provide financial assistance or services to low-income individuals and
             115      families.]
             116          [(c) If the Executive Appropriations Committee of the Legislature does not meet in
             117      November, the Office of Legislative Fiscal Analyst shall submit the report described in
             118      Subsection (3)(a) at the committee's next meeting.]


             119          [(4)] (3) The legislative fiscal analyst shall have a master's degree in public
             120      administration, political science, economics, accounting, or the equivalent in academic or
             121      practical experience.
             122          [(5)] (4) In carrying out the duties provided for in this section, the legislative fiscal
             123      analyst may obtain access to all records, documents, and reports necessary to the scope of the
             124      legislative fiscal analyst's duties according to the procedures contained in Title 36, Chapter 14,
             125      Legislative Subpoena Powers.
             126          Section 2. Section 51-5-7 is amended to read:
             127           51-5-7. Revenues and other resources of governmental funds subject to legislative
             128      review and appropriation.
             129          [(1) (a) Except as provided in Subsection (1)(b), the] The revenues and other resources
             130      of the governmental funds are subject to legislative review and appropriation for each fiscal
             131      period.
             132          [(b) Expendable Special Revenue Funds are subject to legislative review for each fiscal
             133      period.]
             134          [(2) Notwithstanding the source of the revenues and the restrictions imposed upon the
             135      expenditure of the revenues, the planned expenditures for the governmental funds, except
             136      Expendable Special Revenue Funds, shall be incorporated into the governor's budget and
             137      submitted to the Legislature according to Section 63J-1-201 .]
             138          [(3) Expenses required in the administrative activities of the Expendable Special
             139      Revenue Funds, the Enterprise Funds, the Internal Service Funds, and the Trust and Agency
             140      Funds are subject to legislative review each year.]
             141          [(a) Pro forma financial statements, including balance sheets, revenue and expenditure
             142      statements, statements of changes in financial position, and other statements that may be
             143      required for these funds shall be included in the governor's budget as information items and
             144      submitted to the Legislature according to Section 63J-1-201 .]
             145          [(b) If the operating results of any of these funds demonstrate that an appropriation is
             146      needed from any other fund or subfund, that appropriation shall be included in the governor's
             147      budget as a budget request.]
             148          Section 3. Section 63J-1-201 is amended to read:
             149           63J-1-201. Governor's proposed budget to Legislature -- Contents -- Preparation


             150      -- Appropriations based on current tax laws and not to exceed estimated revenues.
             151          (1) The governor shall deliver, not later than 30 days before the date the Legislature
             152      convenes in the annual general session, a confidential draft copy of the governor's proposed
             153      budget recommendations to the Office of the Legislative Fiscal Analyst according to the
             154      requirements of this section.
             155          (2) (a) When submitting a proposed budget, the governor shall, within the first three
             156      days of the annual general session of the Legislature, submit to the presiding officer of each
             157      house of the Legislature:
             158          (i) a proposed budget for the ensuing fiscal year;
             159          (ii) a schedule for all of the proposed changes to appropriations in the proposed budget,
             160      with each change clearly itemized and classified; and
             161          (iii) as applicable, a document showing proposed changes in estimated revenues that
             162      are based on changes in state tax laws or rates.
             163          (b) The proposed budget shall include:
             164          (i) a projection of the total estimated revenues, including estimated receipts of federal
             165      funds, and appropriations for the next fiscal year;
             166          (ii) the source of changes to all direct, indirect, and in-kind matching funds for all
             167      federal grants or assistance programs included in the budget;
             168          (iii) a plan of proposed changes to appropriations and estimated revenues for the next
             169      fiscal year that is based upon the current fiscal year state tax laws and rates and considers
             170      projected changes in federal grants or assistance programs included in the budget;
             171          (iv) an itemized estimate of the proposed changes to appropriations for:
             172          (A) the Legislative Department as certified to the governor by the president of the
             173      Senate and the speaker of the House;
             174          (B) the Executive Department;
             175          (C) the Judicial Department as certified to the governor by the state court
             176      administrator;
             177          (D) changes to salaries payable by the state under the Utah Constitution or under law
             178      for lease agreements planned for the next fiscal year; and
             179          (E) all other changes to ongoing or one-time appropriations, including dedicated
             180      credits, restricted funds, nonlapsing balances, grants, and federal funds;


             181          (v) for each line item, the average annual dollar amount of staff funding associated
             182      with all positions that were vacant during the last fiscal year;
             183          (vi) deficits or anticipated deficits;
             184          (vii) the recommendations for each state agency for new full-time employees for the
             185      next fiscal year, which shall also be provided to the State Building Board as required by
             186      Subsection 63A-5-103 (2);
             187          (viii) any explanation that the governor may desire to make as to the important features
             188      of the budget and any suggestion as to methods for the reduction of expenditures or increase of
             189      the state's revenue; and
             190          (ix) information detailing certain fee increases as required by Section 63J-1-504 .
             191          (3) For the purpose of preparing and reporting the proposed budget:
             192          (a) The governor shall require the proper state officials, including all public and higher
             193      education officials, all heads of executive and administrative departments and state institutions,
             194      bureaus, boards, commissions, and agencies expending or supervising the expenditure of the
             195      state money, and all institutions applying for state money and appropriations, to provide
             196      itemized estimates of changes in revenues and appropriations.
             197          (b) The governor may require the persons and entities subject to Subsection (3)(a) to
             198      provide other information under these guidelines and at times as the governor may direct,
             199      which may include a requirement for program productivity and performance measures, where
             200      appropriate, with emphasis on outcome indicators.
             201          (c) The governor may require representatives of public and higher education, state
             202      departments and institutions, and other institutions or individuals applying for state
             203      appropriations to attend budget meetings.
             204          [(4) In submitting the budgets for the Departments of Health and Human Services and
             205      the Office of the Attorney General, the governor shall consider a separate recommendation in
             206      the governor's budget for changes in funds to be contracted to:]
             207          [(a) local mental health authorities under Section 62A-15-110 ;]
             208          [(b) local substance abuse authorities under Section 62A-15-110 ;]
             209          [(c) area agencies under Section 62A-3-104.2 ;]
             210          [(d) programs administered directly by and for operation of the Divisions of Substance
             211      Abuse and Mental Health and Aging and Adult Services;]


             212          [(e) local health departments under Title 26A, Chapter 1, Local Health Departments;
             213      and]
             214          [(f) counties for the operation of Children's Justice Centers under Section 67-5b-102 .]
             215          [(5) (a) In making budget recommendations, the governor shall consider an amount
             216      sufficient to grant the following entities the same percentage increase for wages and benefits
             217      that the governor includes in the governor's budget for persons employed by the state:]
             218          [(i) local health departments, local mental health authorities, local substance abuse
             219      authorities, and area agencies;]
             220          [(ii) local conservation districts and Utah Association of Conservation District
             221      employees, as related to the budget for the Department of Agriculture; and]
             222          [(iii) employees of corporations that provide direct services under contract with:]
             223          [(A) the Utah State Office of Rehabilitation and the Division of Services for People
             224      with Disabilities;]
             225          [(B) the Division of Child and Family Services; and]
             226          [(C) the Division of Juvenile Justice Services within the Department of Human
             227      Services.]
             228          [(b) If the governor does not include in the governor's budget an amount sufficient to
             229      grant an increase for any entity described in Subsection (5)(a), the governor shall include a
             230      message to the Legislature regarding the governor's reason for not including that amount.]
             231          [(6) The governor shall include in the governor's budget the state's portion of the
             232      budget for the Utah Communications Agency Network established in Title 63C, Chapter 7,
             233      Utah Communications Agency Network Act.]
             234          [(7) (a) The governor shall include a separate recommendation in the governor's budget
             235      for funds to maintain the operation and administration of the Utah Comprehensive Health
             236      Insurance Pool. In making the recommendation, the governor may consider:]
             237          [(i) actuarial analysis of growth or decline in enrollment projected over a period of at
             238      least three years;]
             239          [(ii) actuarial analysis of the medical and pharmacy claims costs projected over a
             240      period of at least three years;]
             241          [(iii) the annual Medical Care Consumer Price Index;]
             242          [(iv) the annual base budget for the pool established by the Business, Economic


             243      Development, and Labor Appropriations Subcommittee for each fiscal year;]
             244          [(v) the growth or decline in insurance premium taxes and fees collected by the State
             245      Tax Commission and the Insurance Department; and]
             246          [(vi) the availability of surplus General Fund revenue under Section 63J-1-312 and
             247      Subsection 59-14-204 (5).]
             248          [(b) In considering the factors in Subsections (7)(a)(i), (ii), and (iii), the governor may
             249      consider the actuarial data and projections prepared for the board of the Utah Comprehensive
             250      Health Insurance Pool as it develops the governor's financial statements and projections for
             251      each fiscal year.]
             252          (4) (a) The Governor's Office of Management and Budget shall provide to the Office of
             253      Legislative Fiscal Analyst, as soon as practicable, but no later than November 15 of each year,
             254      data, analysis, or requests used in preparing the governor's budget recommendations,
             255      notwithstanding the restrictions imposed on such recommendations by available revenue.
             256          (b) The information under Subsection (4)(a) shall include:
             257          (i) actual revenues and expenditures for the fiscal year ending the previous June 30;
             258          (ii) estimated or authorized revenues and expenditures for the current fiscal year;
             259          (iii) requested revenues and expenditures for the next fiscal year;
             260          (iv) detailed explanations of any differences between the amounts appropriated by the
             261      Legislature in the current fiscal year and the amounts reported under Subsections (4)(b)(ii) and
             262      (iii);
             263          (v) a statement of agency and program objectives, effectiveness measures, and program
             264      size indicators; and
             265          (vi) other budgetary information required by the Legislature in statute.
             266          (c) The budget information under Subsection (4)(a) shall cover:
             267          (i) all items of appropriation, funds, and accounts included in appropriations acts for
             268      the current and previous fiscal years; and
             269          (ii) any new appropriation, fund, or account items requested for the next fiscal year.
             270          (d) The information provided under Subsection (4)(a) may be provided as a shared
             271      record under Section 63G-2-206 as considered necessary by the Governor's Office of
             272      Management and Budget.
             273          [(8)] (5) (a) In submitting the budget for the Department of Public Safety, the governor


             274      shall include a separate recommendation in the governor's budget for maintaining a sufficient
             275      number of alcohol-related law enforcement officers to maintain the enforcement ratio equal to
             276      or below the number specified in Subsection 32B-1-201 (2).
             277          (b) If the governor does not include in the governor's budget an amount sufficient to
             278      maintain the number of alcohol-related law enforcement officers described in Subsection [(8)]
             279      (5)(a), the governor shall include a message to the Legislature regarding the governor's reason
             280      for not including that amount.
             281          [(9)] (6) (a) The governor may revise all estimates, except those relating to the
             282      Legislative Department, the Judicial Department, and those providing for the payment of
             283      principal and interest to the state debt and for the salaries and expenditures specified by the
             284      Utah Constitution or under the laws of the state.
             285          (b) The estimate for the Judicial Department, as certified by the state court
             286      administrator, shall also be included in the budget without revision, but the governor may make
             287      separate recommendations on the estimate.
             288          [(10)] (7) The total appropriations requested for expenditures authorized by the budget
             289      may not exceed the estimated revenues from taxes, fees, and all other sources for the next
             290      ensuing fiscal year.
             291          [(11)] (8) If any item of the budget as enacted is held invalid upon any ground, the
             292      invalidity does not affect the budget itself or any other item in it.
             293          Section 4. Section 63J-1-205 is amended to read:
             294           63J-1-205. Revenue volatility report.
             295          (1) Beginning in 2011 and continuing every three years after 2011, the Legislative
             296      Fiscal Analyst and the Governor's Office of Management and Budget shall[, by December 20,]
             297      submit a joint revenue volatility report to the Executive Appropriations Committee prior to the
             298      committee's December meeting.
             299          (2) The Legislative Fiscal Analyst and the Governor's Office of Management and
             300      Budget shall ensure that the report:
             301          (a) discusses the tax base and the tax revenue volatility of the revenue streams that
             302      provide the source of funding for the state budget;
             303          (b) considers federal funding included in the state budget and any projected changes in
             304      the amount or value of federal funding;


             305          (c) identifies the balances in the General Fund Budget Reserve Account and the
             306      Education Fund Budget Reserve Account;
             307          (d) analyzes the adequacy of the balances in the General Fund Budget Reserve Account
             308      and the Education Fund Budget Reserve Account in relation to the volatility of the revenue
             309      streams and the risk of a reduction in the amount or value of federal funding; [and]
             310          (e) recommends changes to the deposit amounts or transfer limits established in
             311      Sections 63J-1-312 and 63J-1-313 , if the Legislative Fiscal Analyst and Governor's Office of
             312      Management and Budget consider it appropriate to recommend changes[.]; and
             313          (f) presents options for a deposit mechanism linked to one or more tax sources on the
             314      basis of each tax source's observed volatility, including:
             315          (i) an analysis of how the options would have performed historically within the state;
             316          (ii) an analysis of how the options will perform based on the most recent revenue
             317      forecast; and
             318          (iii) recommendations for deposit mechanisms considered likely to meet the budget
             319      reserve account targets established in Sections 63J-1-312 and 63J-1-313 .
             320          Section 5. Repealer.
             321          This bill repeals:
             322          Section 63J-1-201.7 , Legislative budget considerations -- Wage increases for
             323      certain entities -- Comprehensive health insurance pool.
             324          Section 63J-1-701 , Request for in-depth budget review of agency or program --
             325      Form of budget submitted.
             326          Section 63J-1-702 , Purpose of review -- Information submitted.
             327          Section 63J-1-703 , Selection of activities for review -- Coordination with audits.


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