As Introduced

130th General Assembly Regular Session 2013-2014

S. B. No. 67

Senator Peterson 

Cosponsors: Senators Obhof, Seitz, Hughes, Beagle, Hite 

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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, audit	268
an annuity program for volunteer fire fighters established by a	269
political subdivision under section 9.65 of the Revised Code. As	270
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.	281

(2) "Eligible subdivision" means a qualifying subdivision	282
that meets the criteria specified in this section and the criteria	283
established by rule of the auditor of state.	284

(B) The auditor of state shall establish by rule an	285
agreed-upon procedure by which eligible subdivisions may be	286
audited. The rules shall set forth the standards, procedures,	287
guidelines, and reporting requirements for an agreed-upon	288
procedure audit. At a minimum, the rules shall require that, to be	289
eligible for an agreed-upon procedure audit, a political	290
subdivision must be a qualifying subdivision that meets all of the	291
following criteria:	292

(1) The qualifying subdivision's annual budgeted expenditures	293
do not exceed five million dollars for any fiscal year for which	294
the agreed-upon procedure audit will be performed;	295

(2) The qualifying subdivision follows the auditor of state's	296
regulatory cash or modified cash accounting basis;	297

(3) The fiscal officer or bookkeeper of the qualifying	298
subdivision did not leave office at any time during the audit	299
period in question;	300

(4) The qualifying subdivision had an audit performed under	301
division (A) of section 117.11 or division (A) of section 117.12	302
of the Revised Code within the prior two audit periods;	303

(5) In its most recent audit report, the qualifying	304
subdivision did not experience any of the following:	305

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

306

(b) A declaration under section 117.41 of the Revised Code	307
that the qualifying subdivision was unauditable;	308

(c) A finding for adjustment;

309

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

(e) A finding related to material control weaknesses; or

312

(f) A determination that the qualifying subdivision showed a	313
failure to demonstrate a good-faith effort to comply with	314
budgetary laws.	315

(6) The qualifying subdivision is not:

316

(a) Under investigation by the auditor of state's special	317
investigations unit or is not otherwise at high risk of fraud as	318
determined by the auditor of state;	319

(b) In a fiscal emergency;

320

(c) Required to be audited on an annual basis under "The	321
Single Audit Act of 1984," 98 Stat. 2327, 31 U.S.C. 7501 et seq.,	322
as amended, or under other laws, grants, bylaws, or debt	323
covenants;	324

(d) A component unit of a generally accepted accounting	325
principles entity; or	326

(e) Required to use generally accepted accounting principles	327
in preparing its annual financial report under section 117.38 of	328
the Revised Code.	329

(7) The qualifying subdivision does not have outstanding	330
audit fees in arrears; and	331

(8) Any other criteria the auditor of state determines the	332
qualifying subdivision must meet to be eligible for an agreed-upon	333
procedure audit.	334

(C) An eligible subdivision may, but is not required to,	335
engage in an agreed-upon procedure audit. If the eligible	336
subdivision does not engage in an agreed-upon procedure audit	337
under this section and the rules adopted thereunder, the eligible	338
subdivision instead shall undergo an audit under division (A) of	339
section 117.11 or division (A) of section 117.12 of the Revised	340
Code.	341

(D) An agreed-upon procedure audit shall be performed by the	342
auditor of state or by an independent certified public accountant	343
under the American institute of certified public accountants'	344
attestation standards section 201 and generally accepted	345
government auditing standards. Eligible subdivisions may have an	346
agreed-upon procedure audit in two consecutive audit periods	347
followed by one audit performed under division (A) of section	348
117.11 or division (A) of section 117.12 of the Revised Code. But	349
if the first agreed-upon procedure audit report includes	350
exceptions that would make the eligible subdivision ineligible	351
under this section for an agreed-upon procedure audit, the	352
eligible subdivision is ineligible for the agreed-upon procedure	353
audit in the second audit period and shall be audited under	354
division (A) of section 117.11 or division (A) of section 117.12	355
of the Revised Code in the second audit period.	356

(E) The auditor of state, on a case-by-case basis, may	357
determine that a qualifying subdivision that fails to meet any one	358
of the criteria established by rule under division (B) of this	359
section is otherwise eligible for an agreed-upon procedure audit	360
and may, in writing, grant a waiver of a particular criterion.	361

(F) An eligible subdivision that engages in an agreed-upon	362
procedure audit shall continue to file an annual financial report	363
as required under section 117.38 of the Revised Code.	364

Sec. 117.12. (A) Any certified public accountant engaged to	365
perform an audit pursuant to division (C) of section 117.11 of the	366
Revised Code shall conduct the audit pursuant to the standards,	367
procedures, and guidelines of the auditor of state for such	368
audits. The auditor of state shall establish these standards,	369
procedures, and guidelines by rule. The audit shall cover the	370
period beginning with the termination date of the most recent	371
audit conducted under this section or under section 117.11 or	372
117.114 of the Revised Code, and ending on the date specified by	373
the auditor of state. The accountant shall inquire into the	374
methods, accuracy, and legality of the accounts, records, files,	375
and reports of the public office and shall note whether, in the	376
accountant's opinion, the laws, rules, ordinances, and orders	377
pertaining to the public office have been complied with. The	378

(B) Any certified public accountant engaged to perform an	379
agreed-upon procedure audit pursuant to section 117.114 of the	380
Revised Code shall conduct the audit pursuant to the standards,	381
procedures, guidelines, and reporting requirements adopted by rule	382
of the auditor of state pursuant to that section.	383

(C) The certified public accountant shall have no authority	384
to make formal findings of illegality, malfeasance, or gross	385
neglect under this divisionsection or section 117.23 of the	386
Revised Code.	387

Sec. 117.16. (A) The auditor of state shall do all of the	388
following:	389

(1) Develop a force account project assessment form that each	390
public office that undertakes force account projects shall use to	391
estimate or report the cost of a force account project. The form	392
shall include costs for employee salaries and benefits, any other	393
labor costs, materials, freight, fuel, hauling, overhead expense,	394
workers' compensation premiums, and all other items of cost and	395
expense, including a reasonable allowance for the use of all tools	396
and equipment used on or in connection with such work and for the	397
depreciation on the tools and equipment.	398

(2) Make the form available to public offices by any	399
cost-effective, convenient method accessible to the auditor of	400
state and the public offices;	401

(3) When conducting an audit under this chapter of a public	402
office that undertakes force account projects, examine the forms	403
and records of a sampling of the force account projects the public	404
office completed since an audit was last conducted, to determine	405
compliance with its force account limits.	406

(B) If the auditor of state receives a complaint from any	407
person that a public office has violated the force account limits	408
established for that office, the auditor of state may conduct an	409
audit in addition to the audit provided in section 117.11 or	410
117.114 of the Revised Code if the auditor of state has reasonable	411
cause to believe that an additional audit is in the public	412
interest.	413

(C)(1) If the auditor of state finds that a county, township,	414
or municipal corporation violated the force account limits	415
established for that political subdivision, the auditor of state,	416
in addition to any other action authorized by this chapter, shall	417
notify the political subdivision that, for a period of one year	418
from the date of the notification, the force account limits for	419
the subdivision are reduced as follows:	420

(a) For a county, the limits shall be ten thousand dollars	421
per mile for construction or reconstruction of a road and forty	422
thousand dollars for construction, reconstruction, maintenance, or	423
repair of a bridge or culvert;	424

(b) For a township, the limit shall be fifteen thousand	425
dollars for maintenance and repair of a road or five thousand per	426
mile for construction or reconstruction of a township road;	427

(c) For a municipal corporation, the limit shall be ten	428
thousand dollars for the construction, reconstruction, widening,	429
resurfacing, or repair of a street or other public way.	430

(2) If the auditor of state finds that a county, township, or	431
municipal corporation violated the force account limits	432
established for that political subdivision a second or subsequent	433
time, the auditor of state, in addition to any other action	434
authorized by this chapter, shall notify the political subdivision	435
that, for a period of two years from the date of the notification,	436
the force account limits for the subdivision are reduced in	437
accordance with division (C)(1)(a), (b), or (c) of this section.	438

(3) If the auditor of state finds that a county, township, or	439
municipal corporation violated the force account limits	440
established for that political subdivision a third or subsequent	441
time, the auditor of state shall certify to the tax commissioner	442
an amount the auditor of state determines to be twenty per cent of	443
the total cost of the force account project that is the basis of	444
the violation. Upon receipt of this certification, the tax	445
commissioner shall withhold the certified amount from any funds	446
under the tax commissioner's control that are due or payable to	447
that political subdivision. The tax commissioner shall promptly	448
deposit this withheld amount to the credit of the local	449
transportation improvement program fund created by section 164.14	450
of the Revised Code.	451

If the tax commissioner determines that no funds are due and	452
payable to the violating political subdivision or that	453
insufficient amounts of such funds are available to cover the	454
entire certified amount, the tax commissioner shall withhold and	455
deposit to the credit of the local transportation improvement	456
program fund any amount available and certify the remaining amount	457
to be withheld to the county auditor of the county in which the	458
political subdivision is located. The county auditor shall	459
withhold from that political subdivision any amount, up to that	460
certified by the tax commissioner, that is available from any	461
funds under the county auditor's control, that is due or payable	462
to that political subdivision, and that can be lawfully withheld.	463
The county auditor shall promptly pay that withheld amount to the	464
tax commissioner for deposit into the local transportation	465
improvement program fund.	466

The payments required under division (C)(3) of this section	467
are in addition to the force account limit reductions described in	468
division (C)(2) of this section and also are in addition to any	469
other action authorized by this chapter.	470

(D) If the auditor of state finds that a county, township, or	471
municipal corporation violated its force account limits when	472
participating in a joint force account project, the auditor of	473
state shall impose the reduction in force account limits under	474
division (C) of this section on all entities participating in the	475
joint project.	476

(E) As used in this section, "force account limits" means any	477
of the following, as applicable:	478

(1) For a county, the amounts established in section 5543.19	479
of the Revised Code;	480

(2) For a township, the amounts established in section	481
5575.01 of the Revised Code;	482

(3) For a municipal corporation, the amount established in	483
section 723.52 of the Revised Code;	484

(4) For the department of transportation, the amount	485
established in section 5517.02 of the Revised Code.	486

Sec. 117.20.  (A) In adopting rules pursuant to Chapter 117.	487
of the Revised Code, the auditor of state or the auditor of	488
state's designee shall do both of the following:	489

(1) Before adopting any such rule, except a rule of an	490
emergency nature, do each of the following:	491

(a) At least thirty-five days before any public hearing on	492
the proposed rule-making action, mail or send by electronic mail	493
notice of the hearing to each public office and to each statewide	494
organization that the auditor of state or designee determines will	495
be affected or that represents persons who will be affected by	496
the proposed rule-making action;	497

(b) Mail or send by electronic mail a copy of the proposed	498
rule to any person or organization that requests a copy within	499
five days after receipt of the request;	500

(c) Consult with appropriate state and local government	501
agencies, or with persons representative of their interests,	502
including statewide organizations of local government officials,	503
and consult with accounting professionals and other interested	504
persons;	505

(d) Conduct, on the date and at the time and place designated	506
in the notice, a public hearing at which any person affected by	507
the proposed rule, including statewide organizations of local	508
government officials, may appear and be heard in person, by	509
attorney, or both, and may present the person's or organization's	510
position or contentions orally or in writing.	511

(2) Except as otherwise provided in division (A)(2) of this	512
section, complyComply with divisions (B) to (E) of section 111.15	513
of the Revised Code. The auditor of state is not required to file	514
a rule summary and fiscal analysis along with any copy of a	515
proposed rule, or proposed rule in revised form, that is filed	516
with the joint committee on agency rule review, the secretary of	517
state, or the director of the legislative service commission under	518
division (D) or (E) of section 111.15 of the Revised Code.	519

(B) The auditor of state shall diligently discharge the	520
duties imposed by divisions (A)(1)(a), (b), and (c) of this	521
section, but failure to mail or send by electronic mail any notice	522
or copy of a proposed rule, or to consult with any person or	523
organization, shall not invalidate any rule.	524

(C) Notwithstanding any contrary provision of the Revised	525
Code, the auditor of state may prepare and disseminate, to public	526
offices and other interested persons and organizations, advisory	527
bulletins, directives, and instructions relating to accounting and	528
financial reporting systems, budgeting procedures, fiscal	529
controls, and the constructions by the auditor of state of	530
constitutional and statutory provisions, court decisions, and	531
opinions of the attorney general. The bulletins, directives, and	532
instructions shall be of an advisory nature only.	533

(D) As used in this section, "rule" includes the adoption,	534
amendment, or rescission of a rule.	535

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

536

(1) "Rule-making agency" has the same meaning as in division	537
(I) of section 119.01 of the Revised Code.	538

(2) "Rule" includes the adoption, amendment, or rescission of	539
a rule.	540

(3) "Proposed rule" means the original version of a proposed	541
rule, and each revised version of the same proposed rule, that is	542
filed with the joint committee on agency rule review under	543
division (D) of section 111.15 or division (H) of section 119.03	544
of the Revised Code.	545

(B) A rule-making agency shall prepare, in the form	546
prescribed by the joint committee on agency rule review under	547
division (E) of this section, a complete and accurate rule summary	548
and fiscal analysis of each proposed rule that it files under	549
division (D) of section 111.15 or division (H) of section 119.03	550
of the Revised Code. The rule summary and fiscal analysis shall	551
include all of the following information:	552

(1) The name, address, and telephone number of the	553
rule-making agency, and the name and telephone number of an	554
individual or office within the agency designated by that agency	555
to be responsible for coordinating and making available	556
information in the possession of the agency regarding the proposed	557
rule;	558

(2) The Ohio Administrative Code rule number of the proposed	559
rule;	560

(3) A brief summary of, and the legal basis for, the proposed	561
rule, including citations identifying the statute that prescribes	562
the procedure in accordance with which the rule-making agency is	563
required to adopt the proposed rule, the statute that authorizes	564
the agency to adopt the proposed rule, and the statute that the	565
agency intends to amplify or implement by adopting the proposed	566
rule;	567

(4) An estimate, in dollars, of the amount by which the	568
proposed rule would increase or decrease revenues or expenditures	569
during the current biennium;	570

(5) A citation identifying the appropriation that authorizes	571
each expenditure that would be necessitated by the proposed rule;	572

(6) A summary of the estimated cost of compliance with the	573
rule to all directly affected persons;	574

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

575

(8) If the rule has a fiscal effect on school districts,	576
counties, townships, or municipal corporations, an estimate in	577
dollars of the cost of compliance with the rule, or, if dollar	578
amounts cannot be determined, a written explanation of why it was	579
not possible to ascertain dollar amounts;	580

(9) If the rule has a fiscal effect on school districts,	581
counties, townships, or municipal corporations and is the result	582
of a federal requirement, a clear explanation that the proposed	583
state rule does not exceed the scope and intent of the	584
requirement, or, if the state rule does exceed the minimum	585
necessary federal requirement, a justification of the excess cost,	586
and an estimate of the costs, including those costs for local	587
governments, exceeding the federal requirement;	588

(10) If the rule has a fiscal effect on school districts,	589
counties, townships, or municipal corporations, a comprehensive	590
cost estimate that includes the procedure and method of	591
calculating the costs of compliance and identifies major cost	592
categories including personnel costs, new equipment or other	593
capital costs, operating costs, and indirect central service costs	594
related to the rule. The fiscal analysis shall also include a	595
written explanation of the agency's and the affected local	596
government's ability to pay for the new requirements and a	597
statement of any impact the rule will have on economic	598
development.	599

(11) If the rule incorporates a text or other material by	600
reference, and the agency claims the incorporation by reference is	601
exempt from compliance with sections 121.71 to 121.74 of the	602
Revised Code because the text or other material is generally	603
available to persons who reasonably can be expected to be affected	604
by the rule, an explanation of how the text or other material is	605
generally available to those persons;	606

(12) If the rule incorporates a text or other material by	607
reference, and it was infeasible for the agency to file the text	608
or other material electronically, an explanation of why filing the	609
text or other material electronically was infeasible;	610

(13) If the rule is being rescinded and incorporates a text	611
or other material by reference, and it was infeasible for the	612
agency to file the text or other material, an explanation of why	613
filing the text or other material was infeasible;	614

(14) Any other information the joint committee on agency rule	615
review considers necessary to make the proposed rule or the fiscal	616
effect of the proposed rule fully understandable.	617

(C) The rule-making agency shall file the rule summary and	618
fiscal analysis in electronic form along with the proposed rule	619
that it files under divisions (D) and (E) of section 111.15 or	620
divisions (B) and (H) of section 119.03 of the Revised Code. The	621
joint committee on agency rule review shall not accept any	622
proposed rule for filing unless a copy of the rule summary and	623
fiscal analysis of the proposed rule, completely and accurately	624
prepared, is filed along with the proposed rule.	625

(D) The joint committee on agency rule review shall review	626
the fiscal effect of each proposed rule that is filed under	627
division (D) of section 111.15 or division (H) of section 119.03	628
of the Revised Code.	629

(E) The joint committee on agency rule review shall prescribe	630
the form in which each rule-making agency shall prepare its rule	631
summary and fiscal analysis of a proposed rule.	632

(F) This section does not require the auditor of state or the	633
auditor of state's designee to prepare or attach a rule summary	634
and fiscal analysis to any copy of a rule proposed under section	635
117.12, 117.19, 117.38, or 117.43 of the Revised Code.	636

Section 2.  That existing sections 111.15, 117.11, 117.12,	637
117.16, 117.20, and 127.18 of the Revised Code are hereby	638
repealed.	639