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SPONSOR: |
Snyder |
DATE TYPED: |
|
HB |
|
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SHORT TITLE: |
Identify Certain State Government Functions |
SB |
741 |
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ANALYST: |
Padilla |
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APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
FY03 |
FY04 |
FY03 |
FY04 |
|
|
|
|
|
Substantial – See Narrative |
Recurring |
General
Fund |
(Parenthesis
( ) Indicate Expenditure Decreases)
Relates
to HB 338 (Contract Management Act)
LFC Files
Responses
Received From
Human
Services Department
Attorney
General’s Office
Energy,
Minerals and Natural Resources Department
State
Highway and Transportation Department
General
Services Department
Department
of Finance and Administration
SUMMARY
Synopsis
of Bill
Senate Bill 741 does the following:
1. It
establishes a process for identifying current state government functions that
are “not inherently governmental.”
2. It
requires state government agencies to report annually on their activities that
are “not inherently governmental” pursuant to definitions and guidance in the
bill. Agencies must develop annual lists
that will be submitted to DFA and made available to the public and to the
legislature.
3. It
provides a means for private entities that offer services and others to
challenge omissions from the lists.
4. It
requires agency heads to review the lists of not inherently governmental
functions. If an activity is selected
for contracting out, the bill requires the agency head to use a competitive
process to select the supplier pursuant to the Procurement Code.
The bill establishes that the following
activities are “inherently governmental” functions:
1)
bind the state by contract, policy, regulation, etc.,
2)
determine, protect and advance
3) significantly affect the life, liberty or property of private persons,
4) appoint or direct officers or employees of the states, or to
5) “ultimately”
control state property or state funds.
The bill establishes that the following
activities are not normally inherently governmental:
1) Building security
2) Mail operations
3) Operations of
cafeterias
4) Housekeeping
5) Facilities
operations and maintenance
6) Warehouse
operations
7) Motor vehicle fleet
maintenance
8) Other routine
electrical or mechanical services.
Significant
Issues
This bill would institute an ongoing process of
identifying what executive agency functions would be made available for
potential contracting out, based on the bill’s definitions of what is or is not
an inherently governmental function.
The bill appears to be modeled on the “Federal Activities Inventory Reform Act of 1998” which is now being implemented by the Office of Management and Budget through OMB Circular No. A-76. Unlike the federal act, however, Senate Bill 741 provides no process for cost comparisons or any requirements that “not inherently governmental functions” be contracted out.
A better, or additional, public policy question than the one addressed by this bill might be to consider which entity--whether governmental or private--can offer the best service at the best price.
The following issues were identified by a number
of agencies:
Definitions: A number of the terms used in the bill are
ambiguous. The term “executive agency”
is not defined. The “definitions”
section of the bill does not define “not inherently governmental.” It appears that a number of sensitive state
government functions, especially those of policy advisors and attorneys, would
fall, perhaps unintentionally, in the not inherently governmental
category. Section 2 refers to the giving
of “advice, opinions” as not inherently governmental. A number of agencies commented that this
definition is problematic. HSD, for
example, points out that some agency staff exists in large part to gather
information and to provide advice, opinions or recommendations to upper
management.
Duplication of
Existing Law and Practice:
Several agencies commented that existing law allows for the outsourcing
of services that are the subject of Section 13-1-187, and which are already
subject to the competitive sealed bid process outlined in Section
13-1-103. Some functions described in SB
741 would fit the definition of “professional services” under Section
GSD points out that
the “not inherently governmental” definition in the bill would cover many of
the services it currently performs, some of which currently compete with
private companies for the opportunity to provide business services to other
state agencies.
Motor Vehicle Fleet
Management Operations:
The
Possible Conflict with
Procurement Code:
Section 3 (D) of the bill requires an agency head to use a competitive
process to select a supplier for a service that has been deemed not inherently
governmental. However, several
provisions of the Procurement Code do not require competitive procurement
processes, such as small purchases or the list of exemptions in Section
FISCAL IMPLICATIONS
This bill does not contain an
appropriation. A number of agencies that
responded believe they may require additional resources to carry out the tasks
required by the bill. DFA will be
required to bear the recurring cost of publishing notices.
ADMINISTRATIVE IMPLICATIONS
Most of the agencies that submitted analysis of
this bill believe they will need additional resources to carry out the tasks
identified by the bill.
RELATIONSHIP
This bill could relate to HB 338, the Contract
Management Act. Section 3 of HB 338
states:
A. Prior to making the decision to contract, an agency shall evaluate the need for the contract using an evaluation methodology that is similar to the federal office of management and budget's evaluation for the performance of commercial activities. The agency shall include an objective evaluation of state resources. . ..
The federal OMB’s evaluation for the performance
of commercial activities is based on the Federal Activities Inventory Reform
Act mentioned previously.
OTHER SUBSTANTIVE ISSUES
POSSIBLE QUESTIONS
1. Once
agencies identify functions that are not inherently governmental according to
this bill, what should happen?
LP/njw