Bill Text: OH HB6 | 2013-2014 | 130th General Assembly | Engrossed

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Bill Title: To create an agreed-upon procedure audit for certain eligible political subdivisions and to eliminate the Auditor of State's exemption from filing a rule summary and fiscal analysis with proposed rules.

Spectrum: Strong Partisan Bill (Republican 29-3)

Status: (Engrossed - Dead) 2013-05-16 - To State Government Oversight & Reform [HB6 Detail]

Download: Ohio-2013-HB6-Engrossed.html

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As Passed by the House

130th General Assembly Regular Session 2013-2014

Am. H. B. No. 6

Representatives Thompson, Green 

Cosponsors: Representatives Hill, Smith, Sprague, Huffman, Stinziano, Grossman, Ruhl, Boose, Hall, Blair, Hackett, Roegner, Amstutz, Anielski, Beck, Burkley, Cera, Damschroder, Derickson, Henne, McClain, Pelanda, Retherford, Rogers, Scherer, Schuring, Sears, Terhar, Young Speaker Batchelder 

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A BILL

To amend sections 111.15, 117.11, 117.12, 117.16,

1

117.20, and 127.18 and to enact section 117.114 of

2

the Revised Code to create an agreed-upon

3

procedure audit for certain eligible political

4

subdivisions and to eliminate the Auditor of

5

State's exemption from filing a rule summary and

6

fiscal analysis with proposed rules.

7

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 111.15, 117.11, 117.12, 117.16,	8
117.20, and 127.18 be amended and section 117.114 of the Revised	9
Code be enacted to read as follows:	10

Sec. 111.15.  (A) As used in this section:

11

(1) "Rule" includes any rule, regulation, bylaw, or standard	12
having a general and uniform operation adopted by an agency under	13
the authority of the laws governing the agency; any appendix to a	14
rule; and any internal management rule. "Rule" does not include	15
any guideline adopted pursuant to section 3301.0714 of the Revised	16
Code, any order respecting the duties of employees, any finding,	17
any determination of a question of law or fact in a matter	18
presented to an agency, or any rule promulgated pursuant to	19
Chapter 119., section 4141.14, division (C)(1) or (2) of section	20
5117.02, or section 5703.14 of the Revised Code. "Rule" includes	21
any amendment or rescission of a rule.	22

(2) "Agency" means any governmental entity of the state and	23
includes, but is not limited to, any board, department, division,	24
commission, bureau, society, council, institution, state college	25
or university, community college district, technical college	26
district, or state community college. "Agency" does not include	27
the general assembly, the controlling board, the adjutant	28
general's department, or any court.	29

(3) "Internal management rule" means any rule, regulation,	30
bylaw, or standard governing the day-to-day staff procedures and	31
operations within an agency.	32

(4) "Substantive revision" has the same meaning as in	33
division (J) of section 119.01 of the Revised Code.	34

(B)(1) Any rule, other than a rule of an emergency nature,	35
adopted by any agency pursuant to this section shall be effective	36
on the tenth day after the day on which the rule in final form and	37
in compliance with division (B)(3) of this section is filed as	38
follows:	39

(a) The rule shall be filed in electronic form with both the	40
secretary of state and the director of the legislative service	41
commission;	42

(b) The rule shall be filed in electronic form with the joint	43
committee on agency rule review. Division (B)(1)(b) of this	44
section does not apply to any rule to which division (D) of this	45
section does not apply.	46

An agency that adopts or amends a rule that is subject to	47
division (D) of this section shall assign a review date to the	48
rule that is not later than five years after its effective date.	49
If no review date is assigned to a rule, or if a review date	50
assigned to a rule exceeds the five-year maximum, the review date	51
for the rule is five years after its effective date. A rule with a	52
review date is subject to review under section 119.032 of the	53
Revised Code. This paragraph does not apply to a rule of a state	54
college or university, community college district, technical	55
college district, or state community college.	56

If all filings are not completed on the same day, the rule	57
shall be effective on the tenth day after the day on which the	58
latest filing is completed. If an agency in adopting a rule	59
designates an effective date that is later than the effective date	60
provided for by division (B)(1) of this section, the rule if filed	61
as required by such division shall become effective on the later	62
date designated by the agency.	63

Any rule that is required to be filed under division (B)(1)	64
of this section is also subject to division (D) of this section if	65
not exempted by division (D)(1), (2), (3), (4), (5), (6), (7), or	66
(8) of this section.	67

If a rule incorporates a text or other material by reference,	68
the agency shall comply with sections 121.71 to 121.76 of the	69
Revised Code.	70

(2) A rule of an emergency nature necessary for the immediate	71
preservation of the public peace, health, or safety shall state	72
the reasons for the necessity. The emergency rule, in final form	73
and in compliance with division (B)(3) of this section, shall be	74
filed in electronic form with the secretary of state, the director	75
of the legislative service commission, and the joint committee on	76
agency rule review. The emergency rule is effective immediately	77
upon completion of the latest filing, except that if the agency in	78
adopting the emergency rule designates an effective date, or date	79
and time of day, that is later than the effective date and time	80
provided for by division (B)(2) of this section, the emergency	81
rule if filed as required by such division shall become effective	82
at the later date, or later date and time of day, designated by	83
the agency.	84

An emergency rule becomes invalid at the end of the ninetieth	85
day it is in effect. Prior to that date, the agency may file the	86
emergency rule as a nonemergency rule in compliance with division	87
(B)(1) of this section. The agency may not refile the emergency	88
rule in compliance with division (B)(2) of this section so that,	89
upon the emergency rule becoming invalid under such division, the	90
emergency rule will continue in effect without interruption for	91
another ninety-day period.	92

(3) An agency shall file a rule under division (B)(1) or (2)	93
of this section in compliance with the following standards and	94
procedures:	95

(a) The rule shall be numbered in accordance with the	96
numbering system devised by the director for the Ohio	97
administrative code.	98

(b) The rule shall be prepared and submitted in compliance	99
with the rules of the legislative service commission.	100

(c) The rule shall clearly state the date on which it is to	101
be effective and the date on which it will expire, if known.	102

(d) Each rule that amends or rescinds another rule shall	103
clearly refer to the rule that is amended or rescinded. Each	104
amendment shall fully restate the rule as amended.	105

If the director of the legislative service commission or the	106
director's designee gives an agency notice pursuant to section	107
103.05 of the Revised Code that a rule filed by the agency is not	108
in compliance with the rules of the legislative service	109
commission, the agency shall within thirty days after receipt of	110
the notice conform the rule to the rules of the commission as	111
directed in the notice.	112

(C) All rules filed pursuant to divisions (B)(1)(a) and (2)	113
of this section shall be recorded by the secretary of state and	114
the director under the title of the agency adopting the rule and	115
shall be numbered according to the numbering system devised by the	116
director. The secretary of state and the director shall preserve	117
the rules in an accessible manner. Each such rule shall be a	118
public record open to public inspection and may be transmitted to	119
any law publishing company that wishes to reproduce it.	120

(D) At least sixty-five days before a board, commission,	121
department, division, or bureau of the government of the state	122
files a rule under division (B)(1) of this section, it shall file	123
the full text of the proposed rule in electronic form with the	124
joint committee on agency rule review, and the proposed rule is	125
subject to legislative review and invalidation under division (I)	126
of section 119.03 of the Revised Code. If a state board,	127
commission, department, division, or bureau makes a substantive	128
revision in a proposed rule after it is filed with the joint	129
committee, the state board, commission, department, division, or	130
bureau shall promptly file the full text of the proposed rule in	131
its revised form in electronic form with the joint committee. The	132
latest version of a proposed rule as filed with the joint	133
committee supersedes each earlier version of the text of the same	134
proposed rule. Except as provided in division (F) of this section,	135
aA state board, commission, department, division, or bureau shall	136
also file the rule summary and fiscal analysis prepared under	137
section 127.18 of the Revised Code in electronic form along with a	138
proposed rule, and along with a proposed rule in revised form,	139
that is filed under this division. If a proposed rule has an	140
adverse impact on businesses, the state board, commission,	141
department, division, or bureau also shall file the business	142
impact analysis, any recommendations received from the common	143
sense initiative office, and the associated memorandum of	144
response, if any, in electronic form along with the proposed rule,	145
or the proposed rule in revised form, that is filed under this	146
division.	147

As used in this division, "commission" includes the public	148
utilities commission when adopting rules under a federal or state	149
statute.	150

This division does not apply to any of the following:

151

(1) A proposed rule of an emergency nature;

152

(2) A rule proposed under section 1121.05, 1121.06, 1155.18,	153
1163.22, 1349.33, 1707.201, 1733.412, 4123.29, 4123.34, 4123.341,	154
4123.342, 4123.40, 4123.411, 4123.44, or 4123.442 of the Revised	155
Code;	156

(3) A rule proposed by an agency other than a board,	157
commission, department, division, or bureau of the government of	158
the state;	159

(4) A proposed internal management rule of a board,	160
commission, department, division, or bureau of the government of	161
the state;	162

(5) Any proposed rule that must be adopted verbatim by an	163
agency pursuant to federal law or rule, to become effective within	164
sixty days of adoption, in order to continue the operation of a	165
federally reimbursed program in this state, so long as the	166
proposed rule contains both of the following:	167

(a) A statement that it is proposed for the purpose of	168
complying with a federal law or rule;	169

(b) A citation to the federal law or rule that requires	170
verbatim compliance.	171

(6) An initial rule proposed by the director of health to	172
impose safety standards and quality-of-care standards with respect	173
to a health service specified in section 3702.11 of the Revised	174
Code, or an initial rule proposed by the director to impose	175
quality standards on a facility listed in division (A)(4) of	176
section 3702.30 of the Revised Code, if section 3702.12 of the	177
Revised Code requires that the rule be adopted under this section;	178

(7) A rule of the state lottery commission pertaining to	179
instant game rules.	180

If a rule is exempt from legislative review under division	181
(D)(5) of this section, and if the federal law or rule pursuant to	182
which the rule was adopted expires, is repealed or rescinded, or	183
otherwise terminates, the rule is thereafter subject to	184
legislative review under division (D) of this section.	185

(E) Whenever a state board, commission, department, division,	186
or bureau files a proposed rule or a proposed rule in revised form	187
under division (D) of this section, it shall also file the full	188
text of the same proposed rule or proposed rule in revised form in	189
electronic form with the secretary of state and the director of	190
the legislative service commission. Except as provided in division	191
(F) of this section, aA state board, commission, department,	192
division, or bureau shall file the rule summary and fiscal	193
analysis prepared under section 127.18 of the Revised Code in	194
electronic form along with a proposed rule or proposed rule in	195
revised form that is filed with the secretary of state or the	196
director of the legislative service commission.	197

(F) Except as otherwise provided in this division, the	198
auditor of state or the auditor of state's designee is not	199
required to file a rule summary and fiscal analysis along with a	200
proposed rule, or proposed rule in revised form, that the auditor	201
of state proposes under section 117.12, 117.19, 117.38, or 117.43	202
of the Revised Code and files under division (D) or (E) of this	203
section.	204

Sec. 117.11.  (A) Except as otherwise provided in this	205
division and in sections 117.112 and, 117.113, and 117.114 of the	206
Revised Code, the auditor of state shall audit each public office	207
at least once every two fiscal years. The auditor of state shall	208
audit a public office each fiscal year if that public office is	209
required to be audited on an annual basis pursuant to "The Single	210
Audit Act of 1984," 98 Stat. 2327, 31 U.S.C.A. 7501 et seq., as	211
amended. In the annual or biennial audit, inquiry shall be made	212
into the methods, accuracy, and legality of the accounts,	213
financial reports, records, files, and reports of the office,	214
whether the laws, rules, ordinances, and orders pertaining to the	215
office have been observed, and whether the requirements and rules	216
of the auditor of state have been complied with. Except as	217
otherwise provided in this division or where auditing standards or	218
procedures dictate otherwise, each audit shall cover at least one	219
fiscal year. If a public office is audited only once every two	220
fiscal years, the audit shall cover both fiscal years.	221

(B) In addition to the annual or biennial audit provided for	222
in division (A) of this section or in section 117.114 of the	223
Revised Code, the auditor of state may conduct an audit of a	224
public office at any time when so requested by the public office	225
or upon the auditor of state's own initiative if the auditor of	226
state has reasonable cause to believe that an additional audit is	227
in the public interest.	228

(C)(1) The auditor of state shall identify any public office	229
in which the auditor of state will be unable to conduct an audit	230
at least once every two fiscal years as required by division (A)	231
of this section and shall provide immediate written notice to the	232
clerk of the legislative authority or governing board of the	233
public office so identified. Within six months of the receipt of	234
such notice, the legislative authority or governing board may	235
engage an independent certified public accountant to conduct an	236
audit pursuant to section 117.12 of the Revised Code.	237

(2) When the chief fiscal officer of a public office notifies	238
the auditor of state that an audit is required at a time prior to	239
the next regularly scheduled audit by the auditor of state, the	240
auditor of state shall either cause an earlier audit to be made by	241
the auditor of state or authorize the legislative authority or	242
governing board of the public office to engage an independent	243
certified public accountant to conduct the required audit. The	244
scope of the audit shall be as authorized by the auditor of state.	245

(3) The auditor of state shall approve the scope of an audit	246
under division (C)(1) or (2) of this section as set forth in the	247
contract for the proposed audit before the contract is executed on	248
behalf of the public office that is to be audited. The independent	249
accountant conducting an audit under division (C)(1) or (2) of	250
this section shall be paid by the public office.	251

(4) The contract for attest services with an independent	252
accountant employed pursuant to this section or section 115.56 of	253
the Revised Code may include binding arbitration provisions,	254
provisions of Chapter 2711. of the Revised Code, or any other	255
alternative dispute resolution procedures to be followed in the	256
event a dispute remains between the state or public office and the	257
independent accountant concerning the terms of or services under	258
the contract, or a breach of the contract, after the	259
administrative provisions of the contract have been exhausted.	260

(D) If a uniform accounting network is established under	261
section 117.101 of the Revised Code, the auditor of state or a	262
certified public accountant employed pursuant to this section or	263
section 115.56 or 117.112 of the Revised Code shall, to the extent	264
practicable, utilize services offered by the network in order to	265
conduct efficient and economical audits of public offices.	266

(E) The auditor of state shall, in accordance with division	267
(A)(3) of section 9.65 of the Revised Code and this section, may	268
audit an annuity program for volunteer fire fighters established	269
by a political subdivision under section 9.65 of the Revised Code.	270
As used in this section, "volunteer fire fighters" and "political	271
subdivision" have the same meanings as in division (C) of section	272
9.65 of the Revised Code.	273

Sec. 117.114.  (A) As used in this section:

274

(1) "Qualifying subdivision" means an agricultural society,	275
county board of health, cemetery, conservancy district, family and	276
children first council, fire district, ambulance district, fire	277
and ambulance district, library, park or recreation district,	278
regional planning commission, solid waste district, township,	279
village, water district, sewer district, or water and sewer	280
district, or a political subdivision determined by the auditor of	281
state on a case-by-case basis to be a qualifying subdivision.	282

(2) "Eligible subdivision" means a qualifying subdivision	283
that meets the criteria specified in this section and the criteria	284
established by rule of the auditor of state.	285

(B) The auditor of state shall establish by rule an	286
agreed-upon procedure by which eligible subdivisions may be	287
audited. The rules shall set forth the standards, procedures,	288
guidelines, and reporting requirements for an agreed-upon	289
procedure audit. At a minimum, the rules shall require that, to be	290
eligible for an agreed-upon procedure audit, a political	291
subdivision must be a qualifying subdivision that meets all of the	292
following criteria:	293

(1) The qualifying subdivision's annual budgeted expenditures	294
do not exceed five million dollars for any fiscal year for which	295
the agreed-upon procedure audit will be performed;	296

(2) The qualifying subdivision follows the auditor of state's	297
regulatory, cash or modified cash accounting basis;	298

(3) The fiscal officer or bookkeeper of the qualifying	299
subdivision did not leave office at any time during the audit	300
period in question;	301

(4) The qualifying subdivision had an audit performed under	302
division (A) of section 117.11 or division (A) of section 117.12	303
of the Revised Code within the prior two audit periods;	304

(5) In its most recent audit report, the qualifying	305
subdivision did not experience any of the following:	306

(a) A qualified, adverse, or disclaimer opinion;

307

(b) A declaration under section 117.41 of the Revised Code	308
that the qualifying subdivision was unauditable;	309

(c) A finding for recovery that indicated fraud or theft in	310
office; or	311

(d) A finding related to material control weaknesses.

312

(6) The qualifying subdivision is not:

313

(a) Under investigation by the auditor of state's special	314
investigations unit or is not otherwise at high risk of fraud as	315
determined by the auditor of state;	316

(b) In a fiscal emergency; or

317

(c) Required to be audited on an annual basis under "The	318
Single Audit Act of 1984," 98 Stat. 2327, 31 U.S.C. 7501 et seq.,	319
as amended, or under other laws, grants, bylaws, or debt	320
covenants.	321

(7) The qualifying subdivision does not have outstanding	322
audit fees in arrears; and	323

(8) Any other criteria the auditor of state determines the	324
qualifying subdivision must meet to be eligible for an agreed-upon	325
procedure audit.	326

(C) An eligible subdivision may, but is not required to,	327
engage in an agreed-upon procedure audit. If the eligible	328
subdivision does not engage in an agreed-upon procedure audit	329
under this section and the rules adopted thereunder, the eligible	330
subdivision instead shall undergo an audit under division (A) of	331
section 117.11 or division (A) of section 117.12 of the Revised	332
Code.	333

(D) An agreed-upon procedure audit shall be performed by the	334
auditor of state or by an independent certified public accountant	335
under the standards established by the American institute of	336
certified public accountants' attestation. Eligible subdivisions	337
may have an agreed-upon procedure audit in two consecutive audit	338
periods followed by one audit performed under division (A) of	339
section 117.11 or division (A) of section 117.12 of the Revised	340
Code.	341

(E) The auditor of state, on a case-by-case basis, may	342
determine that a qualifying subdivision that fails to meet any of	343
the criteria established by rule under division (B) of this	344
section is otherwise eligible for an agreed-upon procedure audit	345
and may, in writing, grant a waiver of a particular criterion.	346

(F) An eligible subdivision that engages in an agreed-upon	347
procedure audit shall continue to file an annual financial report	348
as required under section 117.38 of the Revised Code.	349

Sec. 117.12. (A) Any certified public accountant engaged to	350
perform an audit pursuant to division (C) of section 117.11 of the	351
Revised Code shall conduct the audit pursuant to the standards,	352
procedures, and guidelines of the auditor of state for such	353
audits. The auditor of state shall establish these standards,	354
procedures, and guidelines by rule. The audit shall cover the	355
period beginning with the termination date of the most recent	356
audit conducted under this section or under section 117.11 or	357
117.114 of the Revised Code, and ending on the date specified by	358
the auditor of state. The accountant shall inquire into the	359
methods, accuracy, and legality of the accounts, records, files,	360
and reports of the public office and shall note whether, in the	361
accountant's opinion, the laws, rules, ordinances, and orders	362
pertaining to the public office have been complied with. The	363

(B) Any certified public accountant engaged to perform an	364
agreed-upon procedure audit pursuant to section 117.114 of the	365
Revised Code shall conduct the audit pursuant to the standards,	366
procedures, guidelines, and reporting requirements adopted by rule	367
of the auditor of state pursuant to that section.	368

(C) The certified public accountant shall have no authority	369
to make formal findings of illegality, malfeasance, or gross	370
neglect under this divisionsection or section 117.23 of the	371
Revised Code.	372

Sec. 117.16. (A) The auditor of state shall do all of the	373
following:	374

(1) Develop a force account project assessment form that each	375
public office that undertakes force account projects shall use to	376
estimate or report the cost of a force account project. The form	377
shall include costs for employee salaries and benefits, any other	378
labor costs, materials, freight, fuel, hauling, overhead expense,	379
workers' compensation premiums, and all other items of cost and	380
expense, including a reasonable allowance for the use of all tools	381
and equipment used on or in connection with such work and for the	382
depreciation on the tools and equipment.	383

(2) Make the form available to public offices by any	384
cost-effective, convenient method accessible to the auditor of	385
state and the public offices;	386

(3) When conducting an audit under this chapter of a public	387
office that undertakes force account projects, examine the forms	388
and records of a sampling of the force account projects the public	389
office completed since an audit was last conducted, to determine	390
compliance with its force account limits.	391

(B) If the auditor of state receives a complaint from any	392
person that a public office has violated the force account limits	393
established for that office, the auditor of state may conduct an	394
audit in addition to the audit provided in section 117.11 or	395
117.114 of the Revised Code if the auditor of state has reasonable	396
cause to believe that an additional audit is in the public	397
interest.	398

(C)(1) If the auditor of state finds that a county, township,	399
or municipal corporation violated the force account limits	400
established for that political subdivision, the auditor of state,	401
in addition to any other action authorized by this chapter, shall	402
notify the political subdivision that, for a period of one year	403
from the date of the notification, the force account limits for	404
the subdivision are reduced as follows:	405

(a) For a county, the limits shall be ten thousand dollars	406
per mile for construction or reconstruction of a road and forty	407
thousand dollars for construction, reconstruction, maintenance, or	408
repair of a bridge or culvert;	409

(b) For a township, the limit shall be fifteen thousand	410
dollars for maintenance and repair of a road or five thousand per	411
mile for construction or reconstruction of a township road;	412

(c) For a municipal corporation, the limit shall be ten	413
thousand dollars for the construction, reconstruction, widening,	414
resurfacing, or repair of a street or other public way.	415

(2) If the auditor of state finds that a county, township, or	416
municipal corporation violated the force account limits	417
established for that political subdivision a second or subsequent	418
time, the auditor of state, in addition to any other action	419
authorized by this chapter, shall notify the political subdivision	420
that, for a period of two years from the date of the notification,	421
the force account limits for the subdivision are reduced in	422
accordance with division (C)(1)(a), (b), or (c) of this section.	423

(3) If the auditor of state finds that a county, township, or	424
municipal corporation violated the force account limits	425
established for that political subdivision a third or subsequent	426
time, the auditor of state shall certify to the tax commissioner	427
an amount the auditor of state determines to be twenty per cent of	428
the total cost of the force account project that is the basis of	429
the violation. Upon receipt of this certification, the tax	430
commissioner shall withhold the certified amount from any funds	431
under the tax commissioner's control that are due or payable to	432
that political subdivision. The tax commissioner shall promptly	433
deposit this withheld amount to the credit of the local	434
transportation improvement program fund created by section 164.14	435
of the Revised Code.	436

If the tax commissioner determines that no funds are due and	437
payable to the violating political subdivision or that	438
insufficient amounts of such funds are available to cover the	439
entire certified amount, the tax commissioner shall withhold and	440
deposit to the credit of the local transportation improvement	441
program fund any amount available and certify the remaining amount	442
to be withheld to the county auditor of the county in which the	443
political subdivision is located. The county auditor shall	444
withhold from that political subdivision any amount, up to that	445
certified by the tax commissioner, that is available from any	446
funds under the county auditor's control, that is due or payable	447
to that political subdivision, and that can be lawfully withheld.	448
The county auditor shall promptly pay that withheld amount to the	449
tax commissioner for deposit into the local transportation	450
improvement program fund.	451

The payments required under division (C)(3) of this section	452
are in addition to the force account limit reductions described in	453
division (C)(2) of this section and also are in addition to any	454
other action authorized by this chapter.	455

(D) If the auditor of state finds that a county, township, or	456
municipal corporation violated its force account limits when	457
participating in a joint force account project, the auditor of	458
state shall impose the reduction in force account limits under	459
division (C) of this section on all entities participating in the	460
joint project.	461

(E) As used in this section, "force account limits" means any	462
of the following, as applicable:	463

(1) For a county, the amounts established in section 5543.19	464
of the Revised Code;	465

(2) For a township, the amounts established in section	466
5575.01 of the Revised Code;	467

(3) For a municipal corporation, the amount established in	468
section 723.52 of the Revised Code;	469

(4) For the department of transportation, the amount	470
established in section 5517.02 of the Revised Code.	471

Sec. 117.20.  (A) In adopting rules pursuant to Chapter 117.	472
of the Revised Code, the auditor of state or the auditor of	473
state's designee shall do both of the following:	474

(1) Before adopting any such rule, except a rule of an	475
emergency nature, do each of the following:	476

(a) At least thirty-five days before any public hearing on	477
the proposed rule-making action, mail or send by electronic mail	478
notice of the hearing to each public office and to each statewide	479
organization that the auditor of state or designee determines will	480
be affected or that represents persons who will be affected by	481
the proposed rule-making action;	482

(b) Mail or send by electronic mail a copy of the proposed	483
rule to any person or organization that requests a copy within	484
five days after receipt of the request;	485

(c) Consult with appropriate state and local government	486
agencies, or with persons representative of their interests,	487
including statewide organizations of local government officials,	488
and consult with accounting professionals and other interested	489
persons;	490

(d) Conduct, on the date and at the time and place designated	491
in the notice, a public hearing at which any person affected by	492
the proposed rule, including statewide organizations of local	493
government officials, may appear and be heard in person, by	494
attorney, or both, and may present the person's or organization's	495
position or contentions orally or in writing.	496

(2) Except as otherwise provided in division (A)(2) of this	497
section, complyComply with divisions (B) to (E) of section 111.15	498
of the Revised Code. The auditor of state is not required to file	499
a rule summary and fiscal analysis along with any copy of a	500
proposed rule, or proposed rule in revised form, that is filed	501
with the joint committee on agency rule review, the secretary of	502
state, or the director of the legislative service commission under	503
division (D) or (E) of section 111.15 of the Revised Code.	504

(B) The auditor of state shall diligently discharge the	505
duties imposed by divisions (A)(1)(a), (b), and (c) of this	506
section, but failure to mail or send by electronic mail any notice	507
or copy of a proposed rule, or to consult with any person or	508
organization, shall not invalidate any rule.	509

(C) Notwithstanding any contrary provision of the Revised	510
Code, the auditor of state may prepare and disseminate, to public	511
offices and other interested persons and organizations, advisory	512
bulletins, directives, and instructions relating to accounting and	513
financial reporting systems, budgeting procedures, fiscal	514
controls, and the constructions by the auditor of state of	515
constitutional and statutory provisions, court decisions, and	516
opinions of the attorney general. The bulletins, directives, and	517
instructions shall be of an advisory nature only.	518

(D) As used in this section, "rule" includes the adoption,	519
amendment, or rescission of a rule.	520

Sec. 127.18.  (A) As used in this section:

521

(1) "Rule-making agency" has the same meaning as in division	522
(I) of section 119.01 of the Revised Code.	523

(2) "Rule" includes the adoption, amendment, or rescission of	524
a rule.	525

(3) "Proposed rule" means the original version of a proposed	526
rule, and each revised version of the same proposed rule, that is	527
filed with the joint committee on agency rule review under	528
division (D) of section 111.15 or division (H) of section 119.03	529
of the Revised Code.	530

(B) A rule-making agency shall prepare, in the form	531
prescribed by the joint committee on agency rule review under	532
division (E) of this section, a complete and accurate rule summary	533
and fiscal analysis of each proposed rule that it files under	534
division (D) of section 111.15 or division (H) of section 119.03	535
of the Revised Code. The rule summary and fiscal analysis shall	536
include all of the following information:	537

(1) The name, address, and telephone number of the	538
rule-making agency, and the name and telephone number of an	539
individual or office within the agency designated by that agency	540
to be responsible for coordinating and making available	541
information in the possession of the agency regarding the proposed	542
rule;	543

(2) The Ohio Administrative Code rule number of the proposed	544
rule;	545

(3) A brief summary of, and the legal basis for, the proposed	546
rule, including citations identifying the statute that prescribes	547
the procedure in accordance with which the rule-making agency is	548
required to adopt the proposed rule, the statute that authorizes	549
the agency to adopt the proposed rule, and the statute that the	550
agency intends to amplify or implement by adopting the proposed	551
rule;	552

(4) An estimate, in dollars, of the amount by which the	553
proposed rule would increase or decrease revenues or expenditures	554
during the current biennium;	555

(5) A citation identifying the appropriation that authorizes	556
each expenditure that would be necessitated by the proposed rule;	557

(6) A summary of the estimated cost of compliance with the	558
rule to all directly affected persons;	559

(7) The reasons why the rule is being proposed;

560

(8) If the rule has a fiscal effect on school districts,	561
counties, townships, or municipal corporations, an estimate in	562
dollars of the cost of compliance with the rule, or, if dollar	563
amounts cannot be determined, a written explanation of why it was	564
not possible to ascertain dollar amounts;	565

(9) If the rule has a fiscal effect on school districts,	566
counties, townships, or municipal corporations and is the result	567
of a federal requirement, a clear explanation that the proposed	568
state rule does not exceed the scope and intent of the	569
requirement, or, if the state rule does exceed the minimum	570
necessary federal requirement, a justification of the excess cost,	571
and an estimate of the costs, including those costs for local	572
governments, exceeding the federal requirement;	573

(10) If the rule has a fiscal effect on school districts,	574
counties, townships, or municipal corporations, a comprehensive	575
cost estimate that includes the procedure and method of	576
calculating the costs of compliance and identifies major cost	577
categories including personnel costs, new equipment or other	578
capital costs, operating costs, and indirect central service costs	579
related to the rule. The fiscal analysis shall also include a	580
written explanation of the agency's and the affected local	581
government's ability to pay for the new requirements and a	582
statement of any impact the rule will have on economic	583
development.	584

(11) If the rule incorporates a text or other material by	585
reference, and the agency claims the incorporation by reference is	586
exempt from compliance with sections 121.71 to 121.74 of the	587
Revised Code because the text or other material is generally	588
available to persons who reasonably can be expected to be affected	589
by the rule, an explanation of how the text or other material is	590
generally available to those persons;	591

(12) If the rule incorporates a text or other material by	592
reference, and it was infeasible for the agency to file the text	593
or other material electronically, an explanation of why filing the	594
text or other material electronically was infeasible;	595

(13) If the rule is being rescinded and incorporates a text	596
or other material by reference, and it was infeasible for the	597
agency to file the text or other material, an explanation of why	598
filing the text or other material was infeasible;	599

(14) Any other information the joint committee on agency rule	600
review considers necessary to make the proposed rule or the fiscal	601
effect of the proposed rule fully understandable.	602

(C) The rule-making agency shall file the rule summary and	603
fiscal analysis in electronic form along with the proposed rule	604
that it files under divisions (D) and (E) of section 111.15 or	605
divisions (B) and (H) of section 119.03 of the Revised Code. The	606
joint committee on agency rule review shall not accept any	607
proposed rule for filing unless a copy of the rule summary and	608
fiscal analysis of the proposed rule, completely and accurately	609
prepared, is filed along with the proposed rule.	610

(D) The joint committee on agency rule review shall review	611
the fiscal effect of each proposed rule that is filed under	612
division (D) of section 111.15 or division (H) of section 119.03	613
of the Revised Code.	614

(E) The joint committee on agency rule review shall prescribe	615
the form in which each rule-making agency shall prepare its rule	616
summary and fiscal analysis of a proposed rule.	617

(F) This section does not require the auditor of state or the	618
auditor of state's designee to prepare or attach a rule summary	619
and fiscal analysis to any copy of a rule proposed under section	620
117.12, 117.19, 117.38, or 117.43 of the Revised Code.	621

Section 2.  That existing sections 111.15, 117.11, 117.12,	622
117.16, 117.20, and 127.18 of the Revised Code are hereby	623
repealed.	624