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					                                 South Carolina General Assembly
                                     117th Session, 2007-2008

H. 4623

STATUS INFORMATION

General Bill
Sponsors: Reps. Hutson, Crawford, Erickson, Loftis, W.D. Smith, Barfield, Clemmons, Dantzler,
Davenport, Govan, Jennings, Limehouse, Miller, Perry, M.A. Pitts, J.R. Smith, Umphlett, Witherspoon,
Young, Stavrinakis and Knight
Document Path: l:\council\bills\gjk\20482sd08.doc

Introduced in the House on January 31, 2008
Currently residing in the House Committee on Ways and Means

Summary: Joint Zero-Based Budget and Agency Evaluation Committee


HISTORY OF LEGISLATIVE ACTIONS

    Date     Body    Action Description with journal page number
 1/31/2008   House   Introduced and read first time HJ-17
 1/31/2008   House   Referred to Committee on Ways and Means HJ-17
  2/5/2008   House   Member(s) request name added as sponsor: Stavrinakis
 2/13/2008   House   Member(s) request name added as sponsor: Knight


VERSIONS OF THIS BILL

1/31/2008
 1
 2
 3
 4
 5
 6
 7
 8
 9                            A BILL
10
11   TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
12   1976, BY ADDING SECTION 2-15-140 SO AS TO ESTABLISH
13   A    JOINT   ZERO-BASE   BUDGET      AND    AGENCY
14   EVALUATION COMMITTEE TO SELECT STATE AGENCIES
15   AND DEPARTMENTS FOR A ZERO-BASE BUDGET
16   REVIEW AND EVALUATION, AND TO CREATE A
17   DIVISION WITHIN THE LEGISLATIVE AUDIT COUNCIL TO
18   CONDUCT EVALUATIONS OF PROGRAMS OF STATE
19   AGENCIES AND DEPARTMENTS SELECTED BY THE
20   JOINT COMMITTEE TO DETERMINE IF THESE PROGRAMS
21   HAVE OUTLIVED THEIR USEFULNESS OR SHOULD BE
22   CHANGED TO ADDRESS THE PRIORITIES AND NEEDS OF
23   THE CITIZENS THEY AFFECT, PROVIDE FOR A
24   PROCEDURE FOR THE INITIATION OF A REVIEW, AND
25   PROVIDE FOR ITS FINDINGS AFTER A REVIEW HAS BEEN
26   COMPLETED, AND TO REQUIRE THE GOVERNOR IN THE
27   PREPARATION OF THE ANNUAL RECOMMENDED STATE
28   BUDGET TO APPLY ZERO-BASE BUDGETING PRINCIPLES
29   AND TO REQUIRE THE HOUSE WAYS AND MEANS
30   COMMITTEE AND THE SENATE FINANCE COMMITTEE IN
31   THE CONSIDERATION OF THE ANNUAL GENERAL
32   APPROPRIATIONS BILL AND BILLS OR JOINT
33   RESOLUTIONS         MAKING           SUPPLEMENTAL
34   APPROPRIATIONS TO APPLY ZERO-BASE BUDGETING
35   PRINCIPLES.
36
37   Be it enacted by the General Assembly of the State of South
38   Carolina:
39
40   SECTION 1. Chapter 15, Title 2 of the 1976 Code is amended by
41   adding:
42

     [4623]                        1
 1      “Section 2-15-140. (A) As used in this section:
 2         (1) ‘Agency’ means a state agency, board, committee,
 3   commission, institution, or other subdivision of state government.
 4         (2) ‘Committee’ means the committee established pursuant
 5   to subsection (B) of this section.
 6         (3) ‘Council’ means the Legislative Audit Council.
 7         (4) ‘Evaluation’ means the audit and review conducted by
 8   the Legislative Audit Council pursuant to Section 2-15-140(C).
 9         (5) ‘Zero-base budget’ means an agency budget prepared
10   applying the principles established pursuant to subsection (D) of
11   this section.
12         (6) ‘Zero-Base Budget Review’ means the review of an
13   agency’s zero-base budget request using the methodology
14   established pursuant to subsection (D) of this section.
15      (B)(1) There is established the Joint Zero-Base Budget and
16   Agency Evaluation Selection Committee consisting of ten
17   members of the General Assembly as follows:
18           (a) three members of the House Ways and Means
19   Committee, appointed by that committee’s chairman;
20           (b) three members of the Senate Finance Committee,
21   appointed by that committee’s chairman;
22           (c) two members of the House of Representatives who do
23   not serve on the Ways and Means Committee, appointed by the
24   Speaker of the House; and
25           (d) two members of the Senate who do not serve on the
26   Finance Committee, appointed by the President Pro Tempore of
27   the Senate.
28      Members serve ex officio and shall serve for terms coterminous
29   with their legislative terms. Vacancies must be filled in the
30   manner of original appointments. The committee shall elect a
31   chairman, who shall serve for the duration of a general assembly.
32   The chairmanship for each general assembly must alternate
33   between a house member and a senator.
34         (2) The committee annually shall select state agencies for
35   evaluation and zero-base budgeting during times the committee
36   establishes. An agency budget submitted while an agency is
37   undergoing evaluation must be prepared in the form of a zero-base
38   budget and reviewed accordingly by the Governor, the Office of
39   State Budget, the House Ways and Means Committee, and the
40   Senate Finance Committee.
41         (3) In selecting state agencies for evaluation and zero-base
42   budgeting pursuant to item (2) above, it is the intent of the General


     [4623]                            2
 1   Assembly that an agency will be the subject of this process at least
 2   once every ten years.
 3      (C)(1) There is created within the Legislative Audit Council a
 4   government review division whose purpose is to conduct
 5   evaluations of programs of state agencies and departments to
 6   determine whether these programs have outlived their usefulness
 7   or should be changed to address the priorities and needs of the
 8   state’s citizens and the General Assembly.
 9        (2) In conducting these evaluations, the review division shall
10   consider the mission of the agency, as defined by the General
11   Assembly, and how the programs fulfill that mission. The review
12   division may consider, but is not limited to, evaluation of the
13   following matters:
14           (a) the economic, fiscal, and other impacts that would
15   occur in the absence of the administering of the programs or
16   functions of the agency under review;
17           (b) the overall cost, including manpower, of the agency
18   under review;
19           (c) the efficiency of the administration of the programs or
20   functions of the agency under review, including the management
21   process and structure;
22           (d) the extent to which the programs under review have
23   encouraged the participation of the public and have provided
24   service to the state’s citizens;
25           (e) the extent to which the programs duplicate the
26   services, functions, and programs administered by any other state,
27   federal agency, or other entity;
28           (f) the extent to which the programs under review have
29   complied with all applicable state, federal, local statutes, and
30   regulations; and
31           (g) an identification of the objectives intended for the
32   programs, including a review of the agency’s annual accountability
33   report, and the problems or needs that the programs were intended
34   to address, the extent to which the objectives have been achieved,
35   and any activities of the programs in addition to those granted by
36   statute and the authority for these activities.
37        (3) After making its review and evaluation, the division shall
38   hold a public hearing receiving testimony from the public, the
39   executive administration, other personnel of the program of the
40   agency under review, and any other interested parties. The
41   division shall consider the fiscal and economic impact of the
42   program and any other relevant issues. In the hearing, the agency
43   providing the program has the burden of demonstrating a public

     [4623]                           3
 1   need for the program’s continued existence. Pursuant to any other
 2   research or inquiries it deems appropriate, the division shall report
 3   its findings and conclusions to the presiding officers of the Senate
 4   and the House. The presiding officers shall refer the report to the
 5   standing committees most concerned with the program of the
 6   agency.
 7         (4) Separate legislation enacted by the General Assembly
 8   shall establish the programs of agencies to be reviewed and the
 9   termination date for those programs. Once the General Assembly
10   has established a termination date for a program of an agency, the
11   General Assembly may, at any time, by joint resolution, delete,
12   substitute, add, or otherwise alter the termination schedule of the
13   programs of the agencies.
14         (6) The existence of a program of an agency that is
15   scheduled for termination under the provisions of this section may
16   be reauthorized by the General Assembly for periods not to exceed
17   five years, excluding the year of termination. A council review of
18   an agency scheduled for termination is not required, but may be
19   directed by the committee.
20         (7) The review and evaluation prepared by the council must
21   be forwarded to the Governor, the Ways and Means Committee,
22   and the Senate Finance Committee.
23      (D)(1) A zero-base budget is an agency budget developed using
24   a process of preparing an operating plan or budget that starts with
25   no authorized or appropriated funds. In a zero-base budget, each
26   activity to be funded must be justified as the budget is prepared.
27         (2) In compliance with current literature on zero-base
28   budgeting, the Office of State Budget of the State Budget and
29   Control Board shall develop a format and criteria for an agency
30   selected by the committee to use in preparing its zero-base budget
31   for submission.”
32
33   SECTION 3. Notwithstanding the provisions of Section
34   2-15-140(B) of the 1976 Code as added by this act, and for
35   calendar year 2009 only, the Joint Zero-Base Budget and Agency
36   Evaluation Selection Committee shall:
37     (1) before August 2009, select four agencies for zero-base
38   budget submission. These agencies are not subject to the
39   evaluation otherwise required pursuant to Section 2-15-140(C) of
40   the 1976 Code as added by this act, but they must make their
41   zero-base budget submission to the Office of State Budget before
42   November 2009. The Governor is not required to apply zero-base


     [4623]                            4
 1   budget principles in his recommended 2009-2010 fiscal year
 2   budget for these agencies;
 3      (2) before August 2009, select additional agencies subject to
 4   both the evaluation and zero-base budget requirement of Section
 5   2-15-140 of the 1976 Code as added by this act, and the agencies
 6   selected shall make their zero-base budget submission before
 7   November 2010.
 8
 9   SECTION 4. This act takes effect upon approval by the Governor.
10                            ----XX----
11




     [4623]                         5

				
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