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First Substitute S.J.R. 5

Senator Wayne L. Niederhauser proposes the following substitute bill:


             1     
JOINT RULES RESOLUTION ON FISCAL NOTE PROCESS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Wayne L. Niederhauser

             5     
House Sponsor: John Dougall

             6     
             7      LONG TITLE
             8      General Description:
             9          This resolution enacts a legislative rule to provide a process for attaching a performance
             10      note on legislation that creates a new program or agency and to provide a review
             11      process based on the performance note.
             12      Highlighted Provisions:
             13          This resolution:
             14          .    provides definitions;
             15          .    provides for the placement of a performance note on legislation that creates a new
             16      program or agency;
             17          .    provides that deadlines for fiscal notes and performance notes be calculated by
             18      business days rather than legislative days;
             19          .    outlines duties of the Office of the Legislative Fiscal Analyst relating to determining
             20      whether or not a performance note is required;
             21          .    outlines duties of government entities to prepare a performance note;
             22          .    lists information that must be contained in the performance note;
             23          .    outlines the duties of the Legislative Fiscal Analyst and the legislative sponsor in
             24      relation to the content of a performance note;
             25          .    outlines duties of the Office of the Legislative Auditor General relating to


             26      requesting performance notes from certain government entities that failed to submit notes
             27      during the legislative process and to provide information to government agencies;
             28          .    requires the Office of the Legislative Auditor General to evaluate the performance
             29      of the new program or agency in reference to the performance note after the new
             30      program or agency is established;
             31          .    provides procedures for the Legislative Audit Subcommittee to request an
             32      additional in-depth review of a new agency or program;
             33          .    provides procedures for requiring the Executive Appropriations Committee to
             34      review those programs that fail to meet performance measures; and
             35          .    provides that the Executive Appropriations Committee may recommend that a
             36      program that fails to meet performance measures be repealed, defunded, have its
             37      appropriations reduced, or some other action.
             38      Special Clauses:
             39          None
             40      Legislative Rules Affected:
             41      AMENDS:
             42          JR4-2-403
             43      ENACTS:
             44          JR4-2-404
             45          JR4-2-405
             46     
             47      Be it resolved by the Legislature of the state of Utah:
             48          Section 1. JR4-2-403 is amended to read:
             49           JR4-2-403. Fiscal Notes.
             50          (1) (a) (i) When the Legislative Fiscal Analyst receives the electronic copy of the
             51      approved legislation from the Office of Legislative Research and General Counsel, that office
             52      shall, within three [legislative] business days:
             53          (A) review and analyze the legislation to determine its fiscal impact; and
             54          (B) provide a fiscal note to the sponsor of the legislation.
             55          (ii) The three day deadline for the preparation of the fiscal note may be extended if the
             56      Legislative Fiscal Analyst requests it, states the reasons for the delay, and informs the sponsor


             57      of the legislation of the delay.
             58          (b) If the Legislative Fiscal Analyst determines that the legislation has no fiscal impact,
             59      the Legislative Fiscal Analyst may release the fiscal note immediately after the sponsor has
             60      received a copy of the fiscal note.
             61          (c) The sponsor may:
             62          (i) approve the release of the fiscal note;
             63          (ii) direct that the fiscal note be held; or
             64          (iii) if the sponsor disagrees with the fiscal note, contact the Legislative Fiscal Analyst
             65      to discuss that disagreement and provide evidence, data, or other information to support a
             66      revised fiscal note.
             67          (d) If the sponsor does not contact the Legislative Fiscal Analyst with instructions
             68      about the fiscal note within one 24 hour legislative day, the Legislative Fiscal Analyst shall
             69      release the fiscal note.
             70          (e) The Legislative Fiscal Analyst shall make the final determination on the fiscal note.
             71          (f) The fiscal note shall be printed with the legislation.
             72          (2) If an amendment or a substitute to legislation appears to substantively change the
             73      fiscal impact of the legislation, the Legislative Fiscal Analyst shall prepare an amended fiscal
             74      note for the legislation.
             75          (3) The fiscal note is not an official part of the legislation.
             76          Section 2. JR4-2-404 is enacted to read:
             77          JR4-2-404. Performance Review Notes -- Review of Performance Measures.
             78          (1) As used in this section:
             79          (a) (i) "New agency" means:
             80          (A) a state governmental entity that did not previously exist;
             81          (B) a governmental entity that requires a new appropriation for new funding;
             82          (C) a governmental entity that is modified by legislation to add significant services or
             83      benefits that were not previously offered by the governmental entity; or
             84          (D) a governmental entity that is modified by legislation to substantially expand the
             85      scope of individuals or entities that are entitled to receive the services or benefits offered by the
             86      governmental entity.
             87          (ii) "New agency" does not mean a governmental entity that has been renamed or


             88      moved to another organizational position within that branch of government unless the
             89      government entity meets the criteria in Subsection (1)(a)(i)(C) or (D).
             90          (b) (i) "New program" means a program:
             91          (A) created by statute that did not previously exist;
             92          (B) that requires a new appropriation or an increased appropriation for the purpose of
             93      adding significant services or benefits that were not previously offered;
             94          (C) that is modified by legislation to add significant services or benefits that were not
             95      previously offered by the program; or
             96          (D) that is modified by legislation to substantially expand the scope of individuals or
             97      entities that are entitled to receive the services or benefits offered by the program.
             98          (ii) "New program" does not mean a program that has been renamed or moved to
             99      another organizational position within that branch of government unless the government entity
             100      meets the criteria in Subsection (1)(b)(i)(C) or (D).
             101          (2) (a) When the Legislative Fiscal Analyst receives the electronic copy of approved
             102      legislation from the Office of Legislative Research and General Counsel, the Legislative Fiscal
             103      Analyst shall, within three business days, review and analyze the legislation to determine if it
             104      creates a new program or a new agency.
             105          (b) If the Legislative Fiscal Analyst determines that the legislation creates a new
             106      agency or a new program, the Legislative Fiscal Analyst shall:
             107          (i) notify the sponsor of the legislation that the legislation qualifies for a performance
             108      note;
             109          (ii) notify the governmental entity that will supervise the new agency or the
             110      governmental entity that will administer the new program that the governmental entity must
             111      submit a performance note that meets the requirement of Joint Rule 4-2-404 (4) to the
             112      Legislative Fiscal Analyst within three business days; and
             113          (iii) prepare a statement to be attached to the legislation containing the information
             114      required by Subsection (2)(c).
             115          (c) The statement shall:
             116          (i) disclose that a performance note is required, disclose the name of the governmental
             117      entity required to provide the performance note, and disclose the date on which the
             118      performance note is to be provided by the governmental entity; or


             119          (ii) disclose that a performance note is not required because the legislation does not
             120      create a new program or new agency.
             121          (d) (i) The Legislative Fiscal Analyst may extend the deadline for the governmental
             122      entity's submission of the performance note if:
             123          (A) the governmental entity requests that the deadline be extended to a date certain in
             124      writing before the performance note is due; and
             125          (B) the sponsor of the legislation agrees to extend the deadline.
             126          (ii) If the deadline is extended, the Legislative Fiscal Analyst shall indicate the
             127      extended deadline on the legislation.
             128          (e) (i) When a governmental entity provides a performance note to the Legislative
             129      Fiscal Analyst, the sponsor of the legislation shall either approve the release of the performance
             130      note or reject the performance note.
             131          (ii) If the sponsor approves the performance note provided by the governmental entity,
             132      the Legislative Fiscal Analyst shall attach the performance note to the legislation.
             133          (iii) If the sponsor rejects the performance note provided by the governmental entity,
             134      the Legislative Fiscal Analyst shall attach the following to the legislation:
             135          (A) the performance note provided by the governmental entity, with a notation that the
             136      sponsor rejected the submission; and
             137          (B) if the sponsor provides an alternative performance note to the Legislative Fiscal
             138      Analyst within three business days, the alternative performance note, with a notation that the
             139      sponsor provided the alternative note due to the sponsor's rejection of the governmental entity's
             140      submission.
             141          (f) If the governmental entity does not provide a performance note by the submission
             142      deadline, the Legislative Fiscal Analyst shall attach a performance note to the legislation that
             143      indicates only that the governmental entity did not submit performance measures by the
             144      submission deadline.
             145          (3) If the sponsor of the legislation disputes the Legislative Fiscal Analyst's
             146      determination as to whether a performance note is required, the sponsor shall contact the
             147      Legislative Fiscal Analyst to discuss that disagreement and provide evidence, data, or other
             148      information to support a different determination.
             149          (4) A performance note shall contain the following information:


             150          (a) the name of the governmental entity submitting the performance note, as applicable;
             151          (b) the names and titles of the individuals who prepared the performance note; and
             152          (c) a statement of performance measures that:
             153          (i) explains the purpose and duties of the new program or agency;
             154          (ii) lists the services that will be provided by the new program or agency;
             155          (iii) lists the goals and proposed impacts that the new program or agency intends to
             156      achieve within one, two, and three years;
             157          (iv) lists the resources and steps required to achieve the goals and proposed impacts;
             158          (v) lists the benchmarks that the new program or agency will monitor to measure
             159      progress toward the goals and outcome;
             160          (vi) lists the performance measures that will be used to evaluate progress toward the
             161      goals and proposed impacts; and
             162          (vii) states how information on progress and performance measures will be gathered in
             163      a reliable, objective fashion.
             164          (5) After legislation that creates a new program or a new agency has gone into effect,
             165      the Legislative Auditor General shall, subject to the procedures and requirements of Section
             166      36-12-15 :
             167          (a) provide an outline of best practices to the governmental entity that administers the
             168      new program or to the new agency;
             169          (b) include in the outline information to assist that governmental entity or new agency
             170      with the creation of:
             171          (i) policies that promote best practices;
             172          (ii) performance measures; and
             173          (iii) data collection procedures; and
             174          (c) for a new program or a new agency that was created by legislation where the
             175      governmental entity failed to provide a performance note:
             176          (i) provide a notice to the governmental entity that administers the new program or to
             177      the new agency that the governmental entity or agency is required to submit a performance note
             178      to the Legislative Auditor General within 30 calendar days of the date of the notice;
             179          (ii) retain the performance note that is received from the governmental entity or new
             180      agency and forward a copy of the note to:


             181          (A) the primary sponsor of the legislation;
             182          (B) the opposite house sponsor of the legislation;
             183          (C) the President of the Senate and Speaker of the House; and
             184          (D) the Senate minority leader and House minority leader; and
             185          (iii) if the governmental entity or new agency fails to provide a performance review
             186      note within the required deadline, provide notice to those listed in Subsection (5)(c)(ii) that a
             187      performance note was requested from, but was not received from, the governmental entity that
             188      administers the new program or the new agency.
             189          (6) The Legislative Auditor General may use the performance note in its review of new
             190      programs and agencies under Section 36-12-15 .
             191          Section 3. JR4-2-405 is enacted to read:
             192          JR4-2-405. Review of Programs -- Failure to Meet Performance Measures --
             193      Revocation of Program or Appropriation.
             194          (1) Subject to the procedures and requirements of Section 36-12-15 , the Legislative
             195      Auditor General shall:
             196          (a) review each new agency or new program that has been determined to be a new
             197      agency or new program that is subject to the requirements of Joint Rule 4-2-404 ;
             198          (b) if the legislation's performance note contained a performance note submitted by the
             199      governmental entity and an alternative performance note submitted by the sponsor of the
             200      legislation, review the new agency or new program under each of the performance note
             201      standards;
             202          (c) make a determination as to whether each goal, proposed impact, and performance
             203      measure has been met or not met, and whether the new agency or new program has
             204      substantially met its goals and proposed impacts, and has provided adequate performance
             205      measures; and;
             206          (d) if authorized and prioritized by the Legislative Audit Subcommittee, perform a
             207      second, more in-depth review of a new agency or new program and revise or change the
             208      determination based upon the results of the in-depth review.
             209          (2) (a) At least annually, the Legislative Auditor General shall provide the Executive
             210      Appropriations Committee with a report listing the new agencies and new programs reviewed,
             211      and for each new agency or program, a description of the review conducted and the


             212      determination made.
             213          (b) If a governmental entity refuses to supply a required performance note or if the
             214      Legislative Auditor General makes a determination that a new agency or new program has not
             215      substantially met its goals, proposed impacts, or has not provided adequate performance
             216      measures, the Legislative Auditor General shall provide notice of the refusal or determination
             217      to:
             218          (i) the new agency or the governmental entity that administers the new program;
             219          (ii) the sponsor and opposite house sponsor of the legislation that was subject to the
             220      performance note requirements under Joint Rule 4-2-404 ; and
             221          (iii) the chairs of the Executive Appropriations Committee.
             222          (3) Upon receipt of a report or notice issued under Subsection (2), the chairs of the
             223      Executive Appropriations Committee shall place the report or notice on the agenda for review
             224      and consideration at the next Executive Appropriations Committee meeting.
             225          (4) When considering a report or notice submitted under Subsection (2), the Executive
             226      Appropriations Committee may elect to:
             227          (a) direct the Office of Legislative Research and General Counsel to prepare legislation
             228      that would repeal or modify a new agency or new program and:
             229          (i) adopt the legislation as a committee bill; or
             230          (ii) decline to adopt the legislation as a committee bill;
             231          (b) recommend that the Legislature reduce or eliminate appropriations for a new
             232      agency or new program;
             233          (c) take no action; or
             234          (d) take another action that a majority of the committee approves.


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