Bill Text: MI HB5114 | 2021-2022 | 101st Legislature | Introduced
Bill Title: State financing and management: budget; office of budget; create a department. Amends title & secs. 113, 121, 122, 123, 131, 141, 261e, 281a, 299, 304, 321, 391, 422, 451 & 451a of 1984 PA 431 (MCL 18.1113 et seq.).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-06-24 - Bill Electronically Reproduced 06/23/2021 [HB5114 Detail]
Download: Michigan-2021-HB5114-Introduced.html
HOUSE BILL NO. 5114
A bill to amend 1984 PA 431, entitled
"The management and budget act,"
by amending the title and sections 113, 121, 122, 123, 131, 141, 261e, 281a, 299, 304, 321, 391, 422, 451, and 451a (MCL 18.1113, 18.1121, 18.1122, 18.1123, 18.1131, 18.1141, 18.1261e, 18.1281a, 18.1299, 18.1304, 18.1321, 18.1391, 18.1422, 18.1451, and 18.1451a), the title as amended by 1994 PA 301, sections 113, 123, and 299 as amended by 2018 PA 389, sections 131 and 451 as amended and sections 281a and 451a as added by 1999 PA 8, section 261e as added by 2020 PA 181, and section 391 as amended by 1988 PA 504.
the people of the state of michigan enact:
An act to prescribe the powers and duties of the department of technology and management and budget; the department of budget; to create and operate certain departments; to clarify the duties of each department; to define the authority and functions of its director and its organizational entities; to authorize the each department to issue directives; to provide for the capital outlay program; to provide for the leasing, planning, constructing, maintaining, altering, renovating, demolishing, conveying of lands and facilities; to provide for centralized administrative services such as purchasing, payroll, record retention, data processing, and publishing and for access to certain services; to provide for a system of internal accounting and administrative control for certain principal departments; to provide for an internal auditor in certain principal departments; to provide for certain powers and duties of certain state officers and agencies; to codify, revise, consolidate, classify, and add to the powers, duties, and laws relative to budgeting, accounting, and the regulating of appropriations; to provide for the implementation of certain constitutional provisions; to create funds and accounts; to make appropriations; to prescribe remedies and penalties; to rescind certain executive reorganization orders; to prescribe penalties; and to repeal certain acts and parts of acts.
Sec. 113. (1) "Capital outlay" means a project or facility financed either in whole or in part with state funds, including lease purchase agreements, to demolish, construct, renovate, or equip a building or facility for which total project costs exceed $1,000,000.00. These projects may be on state owned property, property owned by an institution of higher education, property owned by community colleges, or property under the control of the state building authority.
(2) "Community college" means a community college or a junior college.
(3) "Department" means the department of technology , and management. , and budget.
(4) "Department of budget" means the department of budget created in section 321.
(5) (4) "Directives" means intergovernmental, interagency, or interdepartment administrative or procedural guidelines or instructions which do not affect the rights of, or procedures and practices available to, the public.
(6) (5) "Director" means the director of the department of technology , and management. , and budget.
(7) (6) "Energy conservation measure" means improvement of a building structurally or the installation of equipment or materials in a building for the purpose of reducing energy consumption or cost, increasing energy efficiency, or allowing the use of a renewable resource for fuel.
Sec. 121. The department of technology and management and budget is hereby created.
Sec. 122. The head of the department of technology and management and budget is the director of the department of technology and management. and budget.
Sec. 123. (1) The director of the department of technology , and management , and budget shall be appointed by the governor by and with the advice and consent of the senate. The director shall serve at the pleasure of the governor.
(2) The governor shall designate an individual within the department, including, but not limited to, the director of the department, to serve as the chief information officer for this state. The director may serve concurrently as the state chief information officer.
Sec. 131. (1) The director may issue, alter, or rescind administrative and procedural directives as determined to be necessary for the effective administration of this act. The directives are exempt from the definition of a rule pursuant to section 7 of the administrative procedures act of 1969, 1969 PA 306, MCL 24.207. The directives shall be placed in the appropriate manual and distributed to each principal department, autonomous entity within state government, the senate and house appropriations committees, and the fiscal agencies. The directives shall take effect upon written approval of the director unless a later date is specified. Before a directive may become effective, the department shall give the affected principal departments reasonable time, as determined by the department, of management and budget, to respond.
(2) The department may promulgate rules as necessary to implement this act. The rules shall be promulgated pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 141. The department shall do all of the following:
(a) Survey and examine the administrative organization and operations of state agencies to secure greater administrative and program efficiency and economy, to minimize the duplication of activities among state agencies and between state agencies and businesses, and to effect a better organization and consolidation of functions among state agencies. The findings of the surveys shall be incorporated and separately identified in the executive budget that is transmitted to the legislature. Through the executive budget process, the director may require state agencies to assist the department in making its surveys.
(b) Provide for expert and uniform conduct in state operations applicable to all state agencies.
(c) Provide centralized management of auxiliary services when advantageous to state government, after consultation with any affected state agency.
(d) Establish a comprehensive system of internal controls in the management of the state's financial affairs and record the transactions both in accordance with generally accepted accounting principles and as required by law.
(e) Plan, prepare, and execute a comprehensive state budget pursuant to the state constitution of 1963.
Sec. 261e. Not later than October 1, 2021, the department of technology, management, and budget shall do all of the following for each information technology project exceeding $250,000.00:
(a) Establish and document a process for accounting for and monitoring of project cost that aligns with industry best practices and includes all of the following:
(i) Identification and monitoring of cost overruns.
(ii) Change orders and accounting for projects that exceed 1 fiscal year.
(b) Communicate process and defined roles to involved parties.
(c) Ensure information technology project spending within the information technology fund is accurately tracked and accounted for, including costs for contractors, state employees, hardware, software, and maintenance.
(d) Require each state agency to provide and report any additional technology project spending outside of the information technology fund is accurately tracked and accounted for, including costs for contractors, state employees, hardware, software, and maintenance.
(e) Require each state agency to report on system-related contracts or projects with specific appropriations to ensure funds are only spent on the development and maintenance of that system.
Sec. 281a. (1) The department of management and budget and each principal executive department and agency shall provide to the senate and house of representatives standing committees on appropriations and the senate and house fiscal agencies a monthly report on all personal service contracts in an amount greater than $10,000.00 awarded without competitive bidding, pricing, or rate setting. The report shall include all of the following:
(a) The total dollar amount of the contract.
(b) The effective beginning and ending dates of the contract.
(c) The name of the vendor.
(d) The type of service to be provided.
(2) For new personal service contracts of $100,000.00 or more, the department of management and budget shall provide a monthly report to the senate and house of representatives standing committees on appropriations and the senate and house fiscal agencies including all of the following:
(a) The total dollar amount of the contract.
(b) The effective beginning and ending dates of the contract.
(c) The name of the vendor.
(d) The type of service to be provided.
(3) Each principal executive department and agency shall provide a monthly summary listing to the senate and house of representatives standing committees on appropriations and the senate and house fiscal agencies of information that identifies any authorizations for personal service contracts that are provided to the department of civil service rights pursuant to delegated authority granted to each principal executive department and agency related to personal services contracts.
(4) The civil service rights department shall also include a report of all mixed contracts that the civil service commission did not review for approval under the authority of civil service rule 4-6.3, standard (e).rule 5.
Sec. 299. (1) The office of the state budget director department of budget shall do all of the following:
(a) Establish, maintain, and coordinate the state higher education database commonly known as the higher education institutional data inventory or "HEIDI".
(b) Collect data concerning public universities and public university programs in this state, including data required by law, and include it in the database.
(c) Establish procedures to ensure the validity and reliability of the data and the collection process.
(d) Develop model data collection policies, including, but not limited to, policies that ensure the privacy of individual student data. Privacy policies shall ensure that student social security numbers are not released to the public for any purpose.
(e) Provide data in a useful manner to allow state policymakers and public university officials to make informed policy decisions.
(f) Assist public universities in complying with audits under this section or federal law.
(g) Perform other functions assigned by the state budget director or required by law.
(2) There is created within the office of the state department of budget director in the department the higher education institutional data inventory advisory committee. The committee shall provide advice to the state budget director regarding the management of the state higher education database, including, but not limited to:
(a) Determining what data is necessary to collect and maintain.
(b) Defining the roles of all stakeholders in the data collection system.
(c) Recommending timelines for the implementation and ongoing collection of data.
(d) Establishing and maintaining data definitions, data transmission protocols, and system specifications and procedures for the efficient and accurate transmission and collection of data.
(e) Establishing and maintaining a process for ensuring the accuracy of the data.
(f) Establishing and maintaining policies related to data collection, including, but not limited to, privacy policies related to individual student data.
(g) Ensuring the data is made available to state policymakers and citizens of this state in the most useful format possible.
(h) Addressing other matters as determined by the state budget director or as required by law.
(3) The higher education institutional data inventory advisory committee created in subsection (2) shall consist of the following members:
(a) One representative from the house fiscal agency, appointed by the director of the house fiscal agency.
(b) One representative from the senate fiscal agency, appointed by the director of the senate fiscal agency.
(c) One representative from the office of the state department of budget director, appointed by the state budget director.
(d) Three representatives of the presidents council of state universities, appointed by the presidents council. The presidents council shall appoint 1 representative each from a master's university, a doctoral university, and a research university.
(4) The auditor general shall review higher education institutional data inventory enrollment data submitted by all public universities and shall perform audits of selected data submitted by public universities at least once every 4 years. The review and audits shall be based upon the definitions, requirements, and uniform reporting categories established by the state budget director in consultation with the higher education institutional data inventory advisory committee. The auditor general shall submit a report of findings to the house and senate appropriations committees and the state budget director by July 1 of each year in which an audit is performed.
Sec. 304. (1) "State budget" means a financial program to deliver state government services.
(2) "State budget director" means the director of the department of budget.
(3) (2) "State operating fund" means a state fund entity established by law to provide direct financial support for services delivered to the public pursuant to the state budget.
(4) (3) "State spending paid to units of local government" means the sum of total state spending from state sources paid to a unit of local government. State spending paid to a unit of local government does not include a payment made pursuant to a contract or agreement entered into or made for the provision of a service for the state or to state property, and loans made by the state to a unit of local government.
Sec. 321. (1) The office of state department of budget director is hereby created. The head of the department of budget is the state budget director. The state budget director shall be appointed by the governor, be exempt from the classified state civil service, and shall serve at the pleasure of the governor. The state budget director may concurrently serve as the director of the department.
(2) The department of budget shall plan, prepare, and execute a comprehensive state budget pursuant to the state constitution of 1963.
Sec. 391. (1) When it appears to the governor, based upon written information received by the governor from the state budget director and the department of treasury, that actual revenues for a fiscal period will fall below the revenue estimates on which appropriations for that period were based, the estimates being as determined by the legislature in accordance with section 31 of article IV of the state constitution of 1963, the governor shall order the director to review all appropriations made by the legislature, except those made for the legislative and judicial branches of government or from funds constitutionally dedicated to specific purposes.
(2) Based upon needs, the state budget director shall recommend to the governor a reduction of expenditures authorized by the appropriations, either direct or open-ended, for that fiscal year. The governor shall review the recommendations of the director and shall prepare an order containing reductions in expenditures authorized so that actual revenues for the fiscal period will be sufficient to equal the expenditures. The governor shall give not less than 5 days' written notice to the members of the appropriations committees specifying a time and place for a joint meeting of the governor and the appropriations committees, at which the governor shall present to the appropriations committees the governor's recommendations and copies of the governor's proposed order.
(3) Not later than 10 days after the submission of the order to the appropriations committees, each appropriation committee by vote of a majority of its members elected and serving shall approve or disapprove the order. Expenditures authorized by appropriations shall not be reduced unless approved by both appropriations committees. Upon approval by both appropriations committees, the director shall implement the order.
(4) If either appropriation committee disapproves the order, the order is without force and effect. Not later than 30 days after a proposed order is disapproved, the governor may give reasonable written notice of the time and place of a further joint meeting of the appropriations committees, at which time the governor shall submit another order reducing expenditures authorized by appropriations. Within 10 days after the receipt of that order by the appropriations committees, each appropriations committee, by a majority of its members elected and serving, shall approve or disapprove the order. Upon approval by both appropriations committees, the state budget director shall implement the order.
(5) After the approval by both appropriations committees pursuant to subsection (3) or (4), a copy of the order of the governor and resolutions of both appropriations committees approving it shall be filed with the secretary of state and the order shall become effective.
Sec. 422. The chief executive officer of a principal department may make advances to participants in state programs which require the expenditure of money before reimbursement by the state or receipt of federal money. An advance shall not be made unless the advance is approved by the state budget director. of the department of management and budget. The state budget director after consultation with the state treasurer shall issue directives implementing this section which shall provide for repayment, dollar limitations, and renewal authority.
Sec. 451. (1) At the close of the fiscal year, the unencumbered balance of each appropriation shall lapse to the state fund from which it was appropriated. A document which is not ascertainable before the cutoff date set by the state budget director may be charged against a current year's appropriation if the chief accounting officer determines that the state agency was not willful in its failure to ascertain or record the document and if the amount of the payment would not have exceeded the unencumbered balance of the applicable appropriation in the prior fiscal year.
(2) An encumbrance entered into within 15 days before the end of the fiscal year and outstanding at the close of the fiscal year is not a charge against that fiscal year but is charged to the next succeeding fiscal year.
Sec. 451a. (1) Except as provided in section 248, a work project appropriation continues to be available until completion of the work or 48 months after the last day of the fiscal year in which the appropriation was originally made, whichever comes first, then the remaining balance lapses to the state fund from which it was appropriated. For work projects established before the effective date of the amendatory act that added this section, March 22, 1999, the 48-month time period described in this subsection begins on the last day of the fiscal year in the year the amendatory act that added this section takes effect. September 30, 1999. To be designated as a work project, a work project shall meet all of the following criteria:
(a) The work project shall be for a specific purpose.
(b) The work project shall contain a specific plan to accomplish its objective.
(c) The work project shall have an estimated completion cost.
(d) The work project shall have an estimated completion date.
(2) The state budget director has the authority to issue directives to lapse existing work project accounts at any time. The state budget director shall notify each member of the senate and house appropriations committees and the fiscal agencies of work projects that the state budget director has ordered to lapse. These directives may be disapproved by either the senate or house appropriations committee within 30 days after the date of notification and, if disapproved within that time, shall not be effective.
(3) Not later than 45 days after the conclusion of the fiscal year, the state budget director shall notify the senate and house appropriations committees and the fiscal agencies of appropriations proposed to be designated as work projects in accordance with the definition contained in this act. These designations may be disapproved by either appropriations committee within 30 days after the date of notification and, if disapproved within that time, shall not be effective. The notification shall include an estimate of the dollar amount of the funds to be designated as work projects and a description of all work projects designated in an appropriations act.
(4) Not later than 120 days after the conclusion of the fiscal year, the state budget director shall prepare and deliver to the senate and house appropriations committees and the fiscal agencies a report that summarizes current work project accounts. This report shall contain a listing of all work project accounts, the balance in each account, the amount of funds that lapsed from any previously designated work projects, and the funds that received these lapses.
Enacting section 1. This amendatory act takes effect October 1, 2021.
