HANDBOOK ON ARIZONA’S SUNSET & SUNRISE REVIEW Fifty-Third Legislature 2017 – 2018 TABLE OF CONTENTS Introduction ....................................................................................................................................1 Role of Participants Joint Legislative Audit Committee ......................................................................................2 Office of the Auditor General (OAG) ..................................................................................5 Committees of Reference (CORs) .......................................................................................6 Agency Subject to Review ...................................................................................................7 Legislative Committee Staff ................................................................................................7 Committees of Reference (Fifty-Third Legislature) Senate ..................................................................................................................................8 House of Representatives ..................................................................................................10 Sunset Review Process Description ........................................................................................................................12 Conducting a Sunset Review OAG Conducts Performance Audit ...................................................................................13 OAG Sunset Review Timetable .........................................................................................17 COR Conducts Performance Review.................................................................................18 COR Sunset Review Timetable .........................................................................................21 Sunrise Review Process Description .........................................................................................................................22 Conducting a Sunrise Review Conducting a Sunrise Review ............................................................................................24 Sunrise Process Timetable .................................................................................................26 53rd Legislature Introduction INTRODUCTION The Handbook on Arizona’s Sunset and Sunrise Review is a guide for parties involved in the sunset and sunrise review of state agencies, boards, commissions, institutions and programs (state agencies). Because statute prescribes both the sunset and sunrise processes, it is recommended that statute be consulted in conjunction with the use of this handbook. Arizona’s Sunset Review process requires the Legislature to periodically review the purpose and functions of state agencies to determine whether continuation, revision, consolidation or termination is warranted. Reviews are conducted by the Office of the Auditor General (OAG) or a Committee of Reference (COR). A public hearing is held by the COR to discuss the review and receive testimony from agency officials and the public. Arizona’s Sunrise Review process provides a mechanism to request the regulation of health and non-health professions or an expansion in scope of practice for health professions. The Sunrise Review process begins with an applicant group presenting to the Speaker of the House of Representatives (Speaker) and the President of the Senate (President) with a report defining the need for regulation or scope of practice expansion. The Speaker and President assign the report to a COR for review and recommendation. The handbook is divided into six sections. The first section provides a brief description of the entities that play an important role in the process. The second section identifies each House and Senate COR and the legislative members assigned to each COR. The third section provides an overview of the Sunset Review process. The fourth section details the process for conducting a Sunset Review. The fifth and sixth section provide an overview and step-by-step guide of how to conduct a Sunrise Review. This 2017-2018 edition replaces the 2015-2016 edition. _________________________________________________________________ Page 1 53rd Legislature Role of Participants ROLE OF PARTICIPANTS JOINT LEGISLATIVE AUDIT COMMITTEE (Title 41, Chapter 7, Article 10.1, Arizona Revised Statutes) MEMBERSHIP JLAC consists of five members of the Senate appointed by the President, and five members of the House appointed by the Speaker. Statute requires the appointment of one Appropriations Committee member from each chamber and stipulates no more than three appointees from each chamber may be members of the same political party. The President and Speaker serve as ex-officio members. JLAC Chairmanship alternates each year between the House and Senate. JLAC is required to meet quarterly or on the call of the chairman (A.R.S. § 41-1279). JLAC members for the Fifty-Third Legislature: Senate Members House Members Senator Bob Worsley (Chair 2017) Senator Sean Bowie Senator Judy Burges Senator Lupe Contreras Senator John Kavanagh President Steve Yarbrough, Ex-officio Representative Anthony Kern (Chair 2018) Representative John Allen Representative Russell Bowers Representative Rebecca Rios Representative Athena Salman Speaker J.D. Mesnard, Ex-officio * JLAC membership is subject to change. Contact the Senate and House Legislative Research Departments. JLAC POWERS & DUTIES JLAC oversees the audit functions of the Legislature and state agencies, including: sunset, performance, special and financial audits and special research requests. JLAC appoints the Auditor General, has legislative subpoena power and is authorized to require state agencies to comply with findings and directions of audits (A.R.S. § 41-1279). JLAC, on recommendation from the President and Speaker, assign all agencies to the respective COR according to subject matter for review and directs the OAG or the COR to conduct the Sunset Review (A.R.S. § 41-2952). OAG PERFORMANCE AND SPECIAL AUDIT FOLLOW-UP PROCEDURES In July 1997, JLAC adopted a process to follow-up on audit recommendations, which was subsequently expanded in 1999. The follow-up process is as follows: _________________________________________________________________ Page 2 Role of Participants 53rd Legislature 1) In the written response to each audit recommendation in a OAG performance or special audit report, the auditee will make one of the following statements: a) The finding of the OAG is agreed to and the audit recommendations will be implemented; b) The finding of the OAG is agreed to and a different method of dealing with the finding will be implemented; c) The finding of the OAG is not agreed to but the recommendations will be implemented; or d) The finding of the OAG is not agreed to and the recommendations will not be implemented. 2) Following the release of each audit report, JLAC will ensure that each audit receives a public hearing by a legislative committee. JLAC may refer the audit to a COR if the audit is performed under the sunset law. However, JLAC may request other pertinent committees to hold a hearing on any audit, or hold the hearing itself. 3) JLAC shall request other committees holding a hearing on an audit to specifically address and report back to JLAC, the nature of all report recommendations with which the agency does not agree and will not implement. 4) Six months after the audit report is issued, the auditee must provide to the OAG a written explanation of the status of all audit recommendations. The OAG requires the auditee to provide data and information necessary to document its efforts at implementing the recommendations. The OAG will then issue a follow-up report to the JLAC Chairs indicating the status of the agency’s efforts in implementing the audit recommendations. Specifically, the follow-up report will identify how many recommendations the agency has implemented, how many recommendations it is in the process of implementing and how many recommendations have not been implemented. If the auditee has implemented all recommendations as of six months, the OAG shall report this fact to the JLAC Chairs and no further follow-up will be conducted. a) If the auditee has not fully implemented all recommendations at six months, but appears to be making progress, then this process continues at 18-months. The followup process may be extended beyond that period, if necessary, to ensure the auditee is making sufficient progress toward implementing the recommendations. b) At two years, JLAC may require the auditee to appear before it to review the status of any remaining recommendations and to determine whether continued reporting is warranted. c) The OAG has the authority to verify all information provided by the auditees and issue reports to JLAC and other relevant legislative committees. 5) The JLAC chairman may at any time following the release of an audit report convene a panel _________________________________________________________________ Page 3 Role of Participants 53rd Legislature of JLAC members to meet with the OAG and the auditee to discuss recommendations with which the agency disagrees and will not implement. The panel will hear from both parties and will recommend to the full committee that: a) There is no need for further action, or b) Sufficient differences exist between the OAG and the auditee to warrant the attention of the full JLAC. 6) JLAC will determine the need for further review and may, as an option, convene a final meeting of the two parties. 7) If after final review JLAC feels it is warranted, it will draft a memorandum summarizing the differences between the OAG and the auditee and will make a memorandum available, together with any recommendations, to all members of the Legislature. _________________________________________________________________ Page 4 53rd Legislature Role of Participants OFFICE OF THE AUDITOR GENERAL (Title 41, Chapter 7, Article 10.1, Arizona Revised Statutes) REQUIREMENTS & TERM The Auditor General is appointed by JLAC and approved by a concurrent resolution of the Legislature. The term of office is five years; however, the Auditor General is eligible for reappointment. The Auditor General must be a Certified Public Accountant licensed to practice in Arizona and is subject to the standards and ethics of the accounting profession as regulated by the Arizona Board of Accountancy (A.R.S. § 41-1279.01). OAG POWERS & DUTIES The OAG is responsible for providing independent financial, performance, compliance and special audits and special research requests in support of legislative oversight and public accountability regarding funds administered by the state and certain local governments. The OAG is authorized by statute to access agency correspondence, files and other records, bank accounts, criminal history record information, money and other property of any state agency. Prior to conducting a performance or special audit, the OAG attempts to contact Legislators and legislative committee staff to receive input and suggestions regarding areas of concern. The OAG staff also contacts Legislators and staff following the publication of a performance or special audit to respond to any questions concerning audit findings. The OAG performs the following duties relating to the Sunset Review process: 1) Prepares and submits to JLAC a list of all agencies scheduled for sunset termination at least 20 months prior to agency termination; 2) Recommends to JLAC sunset reviews to be conducted by the OAG or a COR; 3) Conducts all performance audits assigned to the OAG by JLAC; 4) Provides e-mail notifications, with a link to the completed performance audit to JLAC members, COR members and JLAC legislative staff; and 5) Testifies before the COR regarding the performance audit findings (A.R.S. § 41-1279.03). _________________________________________________________________ Page 5 53rd Legislature Role of Participants COMMITTEES OF REFERENCE (A.R.S. § 41-2954) MEMBERSHIP A COR is a subcommittee that is intended to act as a proxy for a standing committee. Statute requires that each standing committee of both legislative houses appoint a five-member COR and stipulates that no more than three members may belong to the same political party. Although JLAC has the statutory authority to appoint COR chairs, tradition has given this task to standing committee chairs. A COR is usually appointed in the early part of a Legislature with the first member named serving as the COR chair. Current COR membership is listed on pages 8-11 of this handbook. Remember, it is important to check the Interim Committee Inquiry option available via the A.L.I.S. Launcher to ensure committee membership has not changed. COR POWERS & DUTIES JLAC may assign responsibility for conducting the agency's sunset review to a COR. A sunset review conducted by a COR is essentially a self audit whereby the agency responds to statutorily prescribed questions and any questions developed by the COR. Legislative staff of the COR coordinate the sunset reviews assigned to the CORs. When conducting a sunset hearing, the House and Senate COR meet jointly as a single COR; separate motions for the House side and the Senate side are not in order. A quorum for sunset and sunrise purposes consists of a majority of all COR members. Agencies subject to sunset review are generally assigned to a COR whose standing committee would most likely be responsible for hearing any legislation affecting that agency. A COR has legislative subpoena power and is responsible for: 1) Conducting a sunset review of each agency assigned to it by JLAC; 2) Holding at least one public hearing upon receipt of the OAG performance audit or completion of the COR sunset review to receive testimony from the public and from the officials of the agency involved; 3) Evaluating and recommending agency continuance, revision, consolidation or termination based on statutory sunset factors; 4) Evaluating and recommending regulation or increased scope of practice based on statutory sunrise factors; 5) Submitting a final sunset or sunrise review report by December 1 to the President, Speaker of the House of Representatives, Governor, OAG, JLAC and the agency that was the subject of the review; and 6) Preparing legislation to implement its recommendations. JLAC is statutorily required to oversee the preparation of such legislation, but traditionally the COR chair and staff have overseen this responsibility. The agency, however, is responsible for finding a sponsor for the legislation. _________________________________________________________________ Page 6 53rd Legislature Role of Participants AGENCY SUBJECT TO REVIEW An agency subject to sunset review performs the following functions in the sunset and sunrise review process: 1) The agency works with the OAG to provide any necessary information for a sunset audit. If the sunset review is conducted by a COR, the agency must provide all necessary information and respond to the sunset questions as requested by the COR. 2) Agency officials testify at public hearings, present agency responses to the required agency factors, and provide justification for agency continuance, modification or creation and any additional information requested by COR members. 3) Agency officials should work with legislative committee staff and the COR chairman to coordinate the drafting and introduction of legislation to continue, modify or create the agency pursuant to COR recommendations. LEGISLATIVE COMMITTEE STAFF Sunset and sunrise staffing responsibilities shift with legislative terms. Senate legislative committee staff is responsible for staffing sunset hearings during even-numbered legislatures, and legislative committee staff from the House is responsible during odd-numbered legislatures. Regardless of who has primary responsibility, it is always a good idea to keep one’s staff counterpart(s) and the OAG apprised of information and progress. Legislative committee staff responsibilities vary slightly depending on whether the OAG or COR conducts the sunset review. 1) Coordinate with their Senate/House counterpart and the OAG (if the OAG conducted the audit); 2) Communicate with the agency being audited or reviewed; 3) Facilitate contact between the COR chair and the agency subject to sunset review; 4) Compile background information; 5) Prepare information for COR members and other interested legislators; 6) Schedule the sunset and sunrise hearing(s); 7) Check with the OAG on their availability to present prior to scheduling the sunset hearing (if the OAG conducted the audit); 8) Write the final sunset and/or sunrise report; and 9) Facilitate the drafting of any legislative recommendations of the COR. _________________________________________________________________ Page 7 53rd Legislature COR Membership Arizona Senate Committees of Reference (Fifty-Third Legislature) Appropriations Commerce & Public Safety Education Debbie Lesko(Chair) Olivia Cajero Bedford Katie Hobbs John Kavanagh Warren Petersen Steve Smith (Chair) David Farnsworth Robert Meza Catherine Miranda Warren Petersen Sylvia Allen (Chair) David Bradley Catherine Miranda Steve Montenegro Steve Smith Finance Government Health & Human Services David Farnsworth (Chair) Sean Bowie Karen Fann Steve Farley Warren Petersen John Kavanagh (Chair) Sonny Borrelli Lupe Contreras Gail Griffin Robert Meza Nancy Barto (Chair) David Bradley Katie Hobbs Debbie Lesko Steve Montenegro Judiciary Natural Resources, Energy & Water Transportation & Technology Gail Griffin (Chair) Sylvia Allen Judy Burges Andrea Dalessandro Lisa Otondo Bob Worsley (Chair) Kate Brophy McGee Karen Fann Juan Mendez Lisa Otondo Judy Burges (Chair) Lupe Contreras Frank Pratt Martin Quezada Bob Worsley _________________________________________________________________ Page 8 53rd Legislature COR Membership Arizona House of Representatives Committees of Reference (Fifty-Third Legislature) Appropriations Banking & Insurance Commerce Don Shooter (Chair) Lela Alston Regina Cobb Charlene Fernandez Jill Norgaard David Livingston (Chair) Kelli Butler Phil Lovas Paul Mosley Athena Salman Jeff Weninger (Chair) Cesar Chavez Todd Clodfelter Diego Espinoza Jill Norgaard Education Energy, Environment & Natural Resources Federalism, Property Rights & Public Policy Paul Boyer (Chair) Lela Alston Reginald Bolding Jill Norgaard Michelle Udall Brenda Barton (Chair) David Cook Eric Descheenie Kirsten Engel Michelle Udall Mark Finchem (Chair) Isela Blanc Noel Campbell Tony Navarrete David Stringer Government Health Judiciary & Public Safety Doug Coleman (Chair) Ken Clark Drew John Athena Salman Michelle Ugenti-Rita Heather Carter (Chair) Regina Cobb Jay Lawrence Tony Naverrete Pamela Powers Hannley Anthony Kern (Chair) Kirsten Engel Mark Finchem Sally Ann Gonzales Maria Syms Land, Agriculture & Rural Affairs Local & International Affairs Military, Veterans & Regulatory Affairs Darin Mitchell (Chair) David Cook Rosanna Gabaldón Becky Nutt Jesus Rubalcava Tony Rivero (Chair) Isela Blanc Todd Clodfelter Rosanna Gabaldón Drew John Mark Finchem (Chair) Richard Andrade Noel Campbell Diego Espinoza Anthony Kern _________________________________________________________________ Page 9 53rd Legislature COR Membership Arizona House of Representatives Committees of Reference (Fifty-Third Legislature) Transportation & Infrastructure Ways & Means Drew John (Chair) Richard Andrade David Cook Paul Mosley Jesus Rubalcava Michelle Ugenti-Rita (Chair) Reginald Bolding Mark Cardenas Vince Leach Kevin Payne _________________________________________________________________ Page 10 Sunset Review Process 53rd Legislature SUNSET REVIEW PROCESS (Title 41, Chapter 27, Arizona Revised Statutes) DESCRIPTION The sunset process dates to the 1970s and was one of the first government accountability tools. Although individual sunset processes differ from state to state, a key feature is the inclusion of an automatic termination (repeal) clause in the authorizing legislation for state agencies and programs. Agencies are reviewed by the Legislature prior to their termination at which time the Legislature may choose to reauthorize the agency. Established by Laws 1978, Chapter 210, Arizona’s sunset laws provide a systematic process to evaluate an agency to determine if the merits of the agency justify its continuation, continuation with modification or termination. Agencies subject to sunset review automatically terminate (sunset) if legislation to continue the agency is not approved by the Legislature and Governor. The entire sunset review process takes place, at a minimum, over a 20-month period. JLAC initiates the sunset review process by reviewing the list of agencies scheduled for termination and assigning the agencies to a COR. All agencies scheduled for sunset are assigned to a House and Senate COR. JLAC determines whether the OAG or COR will conduct the sunset review (called a performance audit if conducted by the OAG). This determination is based upon several factors including: 1) OAG resources; 2) the size and budget of the agency; 3) when the agency was last reviewed by the OAG; and 4) the number and seriousness of concerns and issues identified by Legislators or the OAG regarding the agency. The COR is required to hold at least one public hearing to discuss the sunset review and receive testimony from agency officials and the public (A.R.S. § 41-2954). The COR may hold subsequent hearings as necessary. Upon completion of COR deliberations, which include a review of the 13 statutory sunset factors and the 4 agency factors, the COR must submit a final sunset review report by December 1, containing its recommendation for continuation, revision, consolidation or termination of the agency. Statute prohibits continuation of an agency for a period in excess of 10 years. Legislative committee staff typically facilitates, and Legislative Council typically drafts, any recommended legislation. Historically, the COR chair has introduced the legislation necessary to continue, consolidate or revise an agency during the following legislative session; however, the agency subject to sunset review has the responsibility of requesting the chair, or any other member of the Legislature, to sponsor the necessary legislation. Legislative committee staff should communicate this responsibility to the agency. If the COR recommends that the agency terminate, legislation is not necessary. _________________________________________________________________ Page 11 OAG Conducts Sunset Review 53rd Legislature CONDUCTING A SUNSET REVIEW A sunset review comprises either a performance audit conducted by the OAG or a COR review, which is essentially a self-audit conducted by the agency and facilitated by the legislative committee staff assigned to the COR. The essential difference between an OAG performance audit and a COR review is the depth and scope. An OAG performance audit is usually conducted over a period of several months with the OAG staff going on-site at the agency to assess the agency's performance by doing such things as reviewing files and records and conducting interviews. COR reviews are typically self-audits as the agency is asked to respond to the sunset factors and legislative committee staff conducts minimal background and legal research. The steps for conducting a sunset review when the OAG conducts a performance audit are very similar to the steps for conducting a sunset review when the COR conducts a review. Following is a brief discussion of legislative committee staff responsibilities under both scenarios. 1. WHAT TO DO IF OAG CONDUCTS THE AUDIT: Step 1 - Assignment of Sunset Reviews (at least 20 months prior to the sunset hearing)  The OAG submits a list of agencies scheduled for termination to JLAC. This list includes all agencies statutorily scheduled for sunset and a recommendation of which agencies should receive a performance audit by the OAG and which agencies should be reviewed by the COR.  JLAC establishes the sunset review schedule based on a review of the sunset schedule submitted by the OAG, JLAC approves the audit schedule. JLAC may delay an agency’s sunset if it believes the OAG will not be able to complete the audit and subsequent review according to schedule. If JLAC delays termination, JLAC is responsible for introducing legislation to extend the agency’s termination date so that the agency will not sunset pending review.  JLAC determines who shall perform the sunset review based on the sunset schedule submitted by the OAG, JLAC determines whether the OAG will conduct an audit or the COR will conduct a review. The larger and more complex agencies are generally assigned to the OAG for an agency-wide performance audit.  JLAC assigns agencies subject to review to a COR. Statute requires all agencies scheduled to sunset to be assigned to a COR for the purposes of reviewing the sunset review, holding a public hearing and making recommendations concerning the continuation of the agency. Legislative committee staff is provided a list of COR assignments by JLAC staff. _________________________________________________________________ Page 12 OAG Conducts Sunset Review 53rd Legislature Step 2 - Performance Audit  The OAG conducts the performance audit. Legislative committee staff and all JLAC and COR members receive an email notification with a link to the completed performance audits. Step 3 - Pre-Sunset Hearing (3 to 4 months prior to sunset hearing)  Contact the COR chairman and staff counterpart. Legislative committee staff should inform the COR chair of their respective body regarding the upcoming sunset hearing and discuss any potential issues/concerns.  COR chair contacts the agency. Legislative committee staff facilitates the communication between the COR chair and agency by preparing a notification letter on behalf of the COR chair informing the agency of its coming hearing. Additionally, the letter should include a request of the agency’s response to the 4 statutorily prescribed agency factors (A.R.S. § 412954(F)) and the 13th question of the sunset factors (A.R.S. § 421-2954(D)). The 13th Question was added by Laws 2011, Chapter 176, and is not addressed in the OAG audit. These 5 questions are in addition to the 12 sunset factors that are addressed in the OAG performance audit (A.R.S. § 41-2954(D)). The following are the 4 required agency factors (A.R.S. § 41-2954(F)) and the 13th sunset factor (A.R.S. § 41-2954(D)): 1) An identification of the problem or needs that the agency is intended to address. 2) A statement, to the extent practical, in qualitative and quantitative terms, of the objectives of such agency and its anticipated accomplishments. 3) An identification of any other agencies having similar, conflicting or duplicative objectives, and an explanation of the manner in which the agency avoids duplication or conflict with other such agencies. 4) An assessment of the consequences of eliminating the agency or of consolidating it with another agency. 5) The extent to which the agency potentially creates unexpected negative consequences that might require additional review by the committee of reference, including increasing the price of goods, affecting the availability of services, limiting the abilities of individuals and businesses to operate efficiently and increasing the cost of government.  Review performance audit. Legislative committee staff should review the performance audit, which includes the 12 sunset factors. Legislative committee staff should also be sure the agency fully responded to the additional questions outlined above.  Schedule a public hearing and prepare agenda and materials for members. The COR is required to hold at least one public hearing. When scheduling the public meeting, legislative committee staff should consult with agency staff and the OAG to ensure their attendance and ability to present at the hearing. _________________________________________________________________ Page 13 OAG Conducts Sunset Review 53rd Legislature  A sunset hearing agenda should include a presentation on the performance audit by the OAG, a presentation by the agency, and an opportunity for testimony from agency officials and the public. The agenda may also include adoption of the COR recommendations if additional COR meetings are not necessary.  Materials distributed by legislative committee staff to the COR may include a summary of the performance audit and agency response, the written required agency factors, budget data, other relevant information, and any draft recommendations. Step 4 - Sunset Hearing  Statute requires the COR to hold a public hearing to determine the following: 1) the need of the agency to regulate or direct a particular activity; 2) the extent to which the statutory requirements of the agency are necessary and being met; 3) to receive testimony from the public as to the relationship of the agency with the public; and 4) to receive testimony from the executive director or other head of the agency as to reasons for the continuation of the agency (A.R.S. § 41-2954(C)).  Sunset factors outlined in statute require the COR to consider, at a minimum, the 13 sunset factors when determining the need for continuation or termination of an agency. When the OAG conducts the audit, the first 12 sunset factors are addressed in writing in the OAG report and the 13th question is addressed in the letter addressed to the agency on behalf of the COR chair (A.R.S. § 41-2954(D)). Step 5 – Final Sunset Report  Legislative committee staff prepares a final report pursuant to statutory guidelines containing the following information: 1) A recommendation that the agency be continued, revised, consolidated or terminated. 2) A written statement prepared by the agency that contains the 4 required agency factors (A.R.S. § 41-2954(E),(F)).  To view an example of a final report of a sunset review conducted by the OAG visit: http://azmemory.azlibrary.gov/cdm/ref/collection/statepubs/id/22063  Distribute final sunset review report by December 1, legislative committee staff should distribute the final sunset report, addressed to JLAC. In efforts to reduce paper, use the guide on page 15 for distribution.  Legislative committee staff works with Legislative Council to draft any recommended legislation. Legislation is not necessary if the COR recommends agency termination. _________________________________________________________________ Page 14 53rd Legislature OAG Conducts Sunset Review Distribute to: Governor* President of the Senate* Speaker of the House of Representatives* COR members* Department/Agency subject to review or Applicant group* Office of the Auditor General* Arizona State Library, Archives & Public Records House Chief Clerk Senate Resource Center Senate Research Staff Paper Copy Electronic Copy X X X Email: gmartinez@az.gov; kfisher@az.gov soliver@azleg.gov dnichols@azleg.gov shite@azleg.gov X X Confirm Email X dreinhard@azauditor.gov X X reports@azlibrary.gov X X X X X jdrake@azleg.gov nweldon@azleg.gov dcortez@azleg.gov Applicable Research Staff & jargon@azleg.gov Applicable Policy Advisor Applicable Policy Advisor & dramirez@azleg.gov Applicable Research Staff & kproctor@azleg.gov Applicable Policy Advisor Applicable Policy Advisor Senate Majority Staff Senate Minority Staff X X House Research Staff X House Majority Staff House Minority Staff *Statutorily required X X _________________________________________________________________ Page 15 53rd Legislature Sunset Review Process Timetable SUNSET REVIEW PROCESS TIMETABLE (OAG Conducts the Performance Audit) Deadline Activity (Occurs at least 20 months prior to termination of the agency) Typically, September/October OAG submits list of agencies subject to sunset review to JLAC. JLAC determines that OAG will conduct sunset review and assigns agency to a COR to hold hearing after sunset review/performance audit report is issued. (Occurs year the review is due) May/June Legislative committee staff is notified of JLAC assignments. June/July COR chair initiates communication with agency. Legislative committee staff prepares letter. Agency is required to respond to 4 additional statutorily required agency factors (A.R.S. § 41-2954(F)). August/September Agency submits responses to four statutorily required factors. OAG issues performance audit reports as they are completed throughout the year. Legislative committee staff and all JLAC and COR members receive an email notification with a link to the completed performance audit Legislative committee staff schedules sunset review hearing(s). October 1st September/October December 1st January July Legislative committee staff schedules sunset review hearing(s). Legislative committee staff prepares final sunset review report and distributes. Introduction of legislation to implement COR recommendations, if necessary. Termination of agency unless legislatively continued. _________________________________________________________________ Page 16 COR Conducts Sunset Review 53rd Legislature WHAT TO DO IF COR CONDUCTS THE REVIEW: Step 1 - Assignment of Reviews (at least 20 months prior to the sunset hearing)  This step is identical regardless of whether the COR or OAG conducts the review. See page 11 for further details. Step 2 - Initiate Agency Contact (3 to 4 months prior to COR holding sunset hearing)  Contact the COR chairman and staff counterpart. Legislative committee staff should inform the COR chair of their respective body of the upcoming sunset review.  COR chair contacts the agency. Legislative committee staff facilitates the communication between the COR chair and agency by preparing a notification letter on behalf of the COR chair informing the agency of its sunset review and upcoming hearing.  The COR chair should request that the agency submit a required report containing the agency’s response to the 13 sunset factors (A.R.S. § 41-2954(D)) as well as a written statement addressing the 4 required agency factors (A.R.S. § 41-2954(F)).  The COR chair may request other relevant information, such as copies of the agency’s annual report or minutes from meetings, or ask other relevant questions. The sunset review, when conducted by a COR, consists of the written response of the agency and other relevant information procured by the legislative committee staff.  The chair’s correspondence should direct the agency to report on all the factors by a date certain, allowing enough time for legislative committee staff to review and distribute to COR members the materials received from the agency.  The following are the 13 sunset factors (A.R.S. § 41-2954(D)): 1) The objective and purpose in establishing (continuing) the agency and the extent to which the objective and purpose are met by private enterprises in other states; 2) The extent to which the agency has met its statutory objective and purpose and the efficiency with which it has operated; 3) The extent to which the agency serves the entire state rather than specific interests; 4) The extent to which rules adopted by the agency are consistent with the legislative mandate; 5) The extent to which the agency has encouraged input from the public before adopting its rules and the extent to which it has informed the public as to its actions and their expected impact on the public; 6) The extent to which the agency has been able to investigate and resolve complaints within its jurisdiction; _________________________________________________________________ Page 17 COR Conducts Sunset Review 53rd Legislature 7) The extent to which the Attorney General or any other applicable agency of state government has the authority to prosecute actions under the enabling legislation 8) The extent to which the agency has addressed deficiencies in its enabling statutes that prevent the agency from fulfilling its statutory mandate 9) The extent to which changes are necessary in the laws of the agency to adequately comply with the factors listed in this subsection 10) The extent to which the termination of the agency would significantly affect the public health, safety or welfare 11) The extent to which the level of regulation exercised by the agency compares to other states and is appropriate and whether less or more stringent levels of regulation would be appropriate 12) The extent to which the agency has used private contractors in the performance of its duties as compared to other states and how more effective use of private contractors could be accomplished. 13) The extent to which the agency potentially creates unexpected negative consequences that might require additional review by the committee of reference, including increasing the price of goods, affecting the availability of services, limiting the abilities of individuals and businesses to operate efficiently and increasing the cost of government.  The following are the 4 prescribed agency factors: 1) An identification of the problem or needs that the agency is intended to address 2) A statement, to the extent practical, in qualitative or quantitative terms, of the objectives of the agency 3) Identification of any conflicting or overlapping duties with other agencies 4) An analysis of the consequences of eliminating the agency (A.R.S. § 41-2954(F)). Step 3 - Pre-Sunset Meeting/Review Materials  Legislative committee staff should review the agency’s report to ensure that the agency fully responded to the required sunset and agency factors.  The COR is required to hold at least one public hearing. The agenda should include a presentation from agency officials on the sunset factors and required agency factors, and provide an opportunity for public input. The agenda may also include adoption of the COR recommendations if subsequent COR meetings are not necessary.  Materials distributed by legislative committee staff may include a summary of the agency response, budget data and draft recommendations. _________________________________________________________________ Page 18 COR Conducts Sunset Review 53rd Legislature Step 4 - Sunset Hearing Held by COR  This step is identical regardless of whether the COR or OAG conducts the review/audit. However, the OAG is not invited to the hearing for reviews the OAG did not conduct. See 13 for further detail. Step 5 - Follow-up  This step is identical regardless of whether the COR or OAG conducts the audit. See pages 14 through 16 for further detail.  To view an example of a final report of a sunset review conducted by the COR visit: http://azmemory.azlibrary.gov/cdm/ref/collection/statepubs/id/22048 _________________________________________________________________ Page 19 53rd Legislature Sunset Review Process Timetable SUNSET REVIEW PROCESS TIMETABLE (COR Conducts the Performance Audit) Deadline Activity (Occurs at least 20 months prior to termination of the agency.) Typically September/October OAG submits list of agencies subject to sunset review to JLAC. JLAC determines a COR will conduct review and assigns agency to a COR. (Occurs year of review.) May/June June/July August/September/October December 1 January July Legislative committee staff is notified of JLAC assignments. COR chair initiates communication with agency. Legislative committee staff prepares letter. Agency is requested to respond to the 13 sunset factors and 4 agency factors. Agency submits responses to sunset and agency factors. Legislative committee staff schedules sunset review hearing(s). Legislative committee staffs prepares agency responses for review by COR. Legislative committee staff prepares final sunset review report and distributes. Introduction of legislation to implement COR recommendations, if necessary. Termination of agency, unless legislatively continued. _________________________________________________________________ Page 20 Sunrise Review Process 53rd Legislature SUNRISE REVIEW PROCESS (A.R.S. §§ 32-3101 through 32-3106 and 32-4401 through 32-4403) DESCRIPTION Established by Laws 1985, Chapter 352, and expanded by Laws 2008, Chapter 132, Arizona’s sunrise review process provides a mechanism for both health professions and nonhealth professions to request regulation and, for health professions, expansion in scope of practice. A health profession is defined as a profession regulated pursuant to A.R.S. Title 32, Chapters 7, 8, 11, 13, 14, 15, 15.1, 16, 17, 18, 19, 19.1, 21, 25, 28, 29, 33, 34, 35, 39, 41, and Title 36, Chapter 6, Article 7, and Chapter 17. A.R.S. § 32-3103 states that regulation shall not be imposed on any unregulated health profession except for the exclusive purpose of protecting the public interest. A health profession shall be regulated by this state only if: 1) The unregulated practice can clearly harm or endanger the public, health safety or welfare and the potential for harm is easily recognizable and not remote or dependent on tenuous agreement; 2) The public needs and can reasonable be expected to benefit from an assurance of initial and continuing professional ability; and 3) The public cannot be effectively protected by other means in a more cost beneficial manner. A.R.S. § 32-4401 states that a profession or occupation shall not be regulated except for the exclusive purpose of protecting the public interest. A profession or occupation shall be regulated by this state only if all the following apply: 1) an unregulated practice can clearly harm or endanger the public health, safety or welfare; 2) the actual or anticipated public benefit of the regulation clearly exceeds the costs imposed on consumers, businesses and individuals; 3) the public needs and can reasonably be expected to benefit from an assurance of initial and continuing professional ability; and 4) the public cannot be effectively protected by private certification or other alternatives. To initiate the sunrise application process an applicant must submit a written report to the President and the Speaker by September 1 explaining the factors prescribed in A.R.S. § 32-3105 or 32-3106 for health professionals and A.R.S. § 32-4403 for nonhealth professionals. The President and the Speaker are required to assign the written report to the appropriate COR for review. The COR may hold meetings as necessary to consider the report and receive testimony from the public, the applicant group and, if applicable, the regulatory board or entity of the applicant group. Although statute does not require that the COR hold meetings to deliberate on the sunrise application, the COR is required to study the sunrise report and deliver a report of its recommendations regarding the sunrise application to the Governor, President, Speaker and, if appropriate, the regulatory board or entity of the applicant group by December 1, of the same year the _________________________________________________________________ Page 21 Sunrise Review Process 53rd Legislature application is submitted. Legislative committee staff and Legislative Council draft any recommended legislation. Although not required, the COR chair may introduce any legislation recommended to regulate a currently unregulated profession or request that the scope of practice of a currently regulated profession be expanded during the following legislative session; however, the sunrise applicant has the responsibility of requesting the chair, or any other member of the legislature, to sponsor the legislation. Legislative committee staff should communicate this responsibility to the applicant. _________________________________________________________________ Page 22 Conducting a Sunrise Review 53rd Legislature CONDUCTING A SUNRISE REVIEW Step 1 - Application Submitted  An applicant seeking regulation or increase in scope of practice (sunrise) must submit a written report on or before September 1 to the President of the Senate and the Speaker of the House of Representatives. The report must define the problem, explain the need for regulation and discuss the costs, benefits and negative impact of regulation. The report lists the affected associations, organizations and other practitioner groups; summarizes efforts taken to address the problem; describes alternatives to regulation; and discusses the maintenance of professional standards. Health professionals should refer to A.R.S. § 32-3104 and nonhealth professionals should refer to A.R.S. § 32-4402.  The application should be delivered to the President and the Speaker: 1700 West Washington Phoenix, Arizona 85007  Note: It is strongly recommended that the applicant provide an electronic copy of the application to the Senate and House legislative committee staff assigned to JLAC.  An applicant group seeking new regulation is required to explain, within their written report submitted to the President of the Senate and the Speaker of the House of Representatives by September 1, the factors outlined in A.R.S. § 32-3105 for health professionals and A.R.S. § 324403 for nonhealth professionals and occupations.  A health applicant group seeking an increased scope of practice is required to explain, within their written report submitted to the President and the Speaker by September 1, the factors outlined in A.R.S. § 32-3106. If a health professional group proposes to increase the scope of practice of its profession, copies of the written report must be submitted to the regulatory board of the health profession for review and comment. If applicable, the regulatory board shall make recommendations based on the submitted report to the extent requested by the COR. Step 2 - Assignment of Review  The President and the Speaker receive the applicant’s report and assign it to a COR. Step 3 - Pre-Sunrise Meeting   Legislative committee staff must determine if the sunrise report is for new regulation or an increase in scope of practice, review the applicant’s written report for completeness and distribute copies of the report to COR members. Legislative committee staff should inform the COR chair of the application for new regulation or expanded scope of practice. _________________________________________________________________ Page 23 Conducting a Sunrise Review 53rd Legislature  A public hearing is not required by law and is held at the discretion of the COR chair. If the COR chair decides to hold a public hearing, the agenda should include the presentation of the written report by the applicant and an opportunity for testimony from other officials and the public. The agenda may also include adoption of final recommendations if additional COR meetings are not necessary.  COR may make recommendations regarding the request for new regulation or the increased scope of practice. Statute stipulates that an unregulated health or nonhealth profession shall not be regulated unless the regulation is for the express purpose of protecting the public interest. All legislation proposed in order to regulate a health or nonhealth profession for the first time must be reviewed according to statutory criteria. Step 4 – Final Sunrise Report  While a meeting is not required on a sunrise, the COR is required to submit a report of its findings by December 1. Legislative committee staff should distribute the final sunset report, addressed to the President of the Senate and the Speaker of the House of Representatives. For a complete list of those who must receive a copy of the final sunrise report see the table on page 16.  Legislative committee staff works with Legislative Council to draft any recommended legislation.  To view an example of a final report of a sunrise review visit: http://azmemory.azlibrary.gov/cdm/ref/collection/statepubs/id/22049 _________________________________________________________________ Page 24 53rd Legislature Sunrise Process Timetable SUNRISE PROCESS TIMETABLE Deadline September 1 Not specified Not specified December January Activity Applicant group submits a written report to President and the Speaker detailing the reasons for regulation or increase in scope of practice. It is strongly recommended that the applicant group provide a copy of the application to the OAG and the Senate and House legislative committee staff assigned to JLAC. The President and the assign agencies to a COR for review. Legislative committee staff schedules sunrise review hearing(s). Statute does not require that a hearing be held. Final sunrise report is due December 1. Introduction of legislation to implement COR recommendations, if necessary. _________________________________________________________________ Page 25