An “internal service fund agency” is defined as “an agency that provides goods or services to other agencies of state government or to other governmental units on a capital maintenance and cost reimbursement basis, and which recovers costs through interagency billings.” (Section 63J-1-410)
H.B. 402, sponsored by Rep. S. Clark, authorizes the Department of Administrative Services (DAS) to operate all of its divisions as internal service fund (ISF) agencies. Under current law (Section 63A-1-114), only two of the department’s divisions function entirely as internal service funds. Two other divisions operate portions of their programs as internal service funds. H.B. 402 provides that “the department may operate a division described in Section 63A-1-109 as an internal service fund agency.”
Under the direction of Kimberly K. Hood, Executive Director, DAS has developed a four-year implementation plan.
- Year 1 (FY 2010) Pass enabling legislation in the General Session 2010 to explore the appropriateness of expanding the ISF model to other divisions within DAS
- Year 2 (FY 2011): Study and identify products and services in divisions where it may be appropriate to expand the rate approval process; submit new rates for processing and approval
- Year 3 (FY 2012) Implement new rates approved by the Governor’s Office and the Legislature; continue study to identify products and services where it may be appropriate to expand the rate approval process; process new rates
- Year 4 (FY 2013): Expand the rate approval process to other divisions and include products and services deemed appropriate (if needed)
Each year includes steps that require annual evaluations, extensive research and data collection, outreach to affected agencies and other customers, as well as input from them on rate setting, level of service, and utilization. The mantra is “go slow, be careful, rely on the data.”
H.B. 402 includes an amendment to the Utah Administrative Rulemaking Act, in Section 63G-3-402, that provides:
(m) if the Department of Administrative Services operates the division as an internal service fund agency in accordance with Section 63A-1-109.5 , [the division shall] submit to the Rate Committee established in Section 63A-1-114: (i) the proposed rate and fee schedule as required by Section 63A-1-114; and (ii) other information or analysis requested by the Rate Committee….
H.B. 402 is scheduled to be heard in the House Government Operations Committee on February 24, 2010, at 8 AM. More information about H.B. 402 is available from the Legislature’s web site at http://le.utah.gov/~2010/htmdoc/hbillhtm/HB0402.htm.