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1 STATE OF OKLAHOMA
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2 1st Session of the 60th Legislature (2025)
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3 SENATE BILL 810 By: Bergstrom
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4
4
5
5
6 AS INTRODUCED
6
7 An Act relating to state finance; creating the Zero-
7 Based Budgeting Implementation Act; providing short
8 title; requiring the Legislative Office of Fiscal
8 Transparency to develop categories of agencies;
9 requiring a staggered plan of a certain amount of
9 years; requiring collaboration among various
10 entities; requiring certain steps to be completed in
10 each agency analysis; requiring certain inquiries;
11 requiring development of certain forms; providing for
11 codification; and providing an effective date.
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12
13
13
14 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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15 SECTION 1. NEW LAW A new section of law to be codified
15
16 in the Oklahoma Statutes as Section 8016 of Title 62, unless there
16
17 is created a duplication in numbering, reads as follows:
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18 This act shall be known and may be cited as the "Zero-Based
18
19 Budgeting Implementation Act".
19
20 SECTION 2. NEW LAW A new section of law to be codified
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21 in the Oklahoma Statutes as Section 8017 of Title 62, unless there
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22 is created a duplication in numbering, reads as follows:
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23 A. No later than December 1, 2025, the Legislative Office of
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24 Fiscal Transparency (LOFT) shall develop a list of every Oklahoma
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Req. No. 1413 Page 1
1 State Agency. As used in this Act, "Agency" and "State Agency"
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2 shall have the same meaning as the term pursuant to Section 415.12
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3 of Title 74 of the Oklahoma Statues to include every Agency, Board,
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4 Commission, Trust, and entity of government of the State of Oklahoma
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5 that receives any appropriated funds, or is designated as a non-
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6 appropriated entity yet operates as a State Agency, Board,
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7 Commission, Trust, or other entity of State Government.
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8 B. No later than December 1, 2025, LOFT shall use the full list
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9 of Agencies developed under Subsection A of this section to develop
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10 a tiered categorization structure for all agencies to implement a
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11 staggered plan for agency review using zero-based budgeting.
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12 C. The tiered categorization shall consist of a minimum of
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13 three tiers in which to classify each agency. LOFT shall separate
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14 the agencies into tiered categories with the higher tiers for
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15 agencies with larger budgets, more employees, a greater statutory
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16 footprint, more licenses, and more administrative rules.
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17 The Tiered categorization for each state agency shall be created
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18 by taking into consideration the following:
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19 1. The size of the current annual budget of the agency from all
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20 revenue sources including state appropriations, federal funds,
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21 grants, gifts, etc;
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22 2. The number of employees currently authorized as well as
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23 currently filled positions by the agency;
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24 3. The number of statutes covering the state agency operations;
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Req. No. 1413 Page 2
1 4. The number of administrative rules promulgated by the state
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2 agency;
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3 5. The number of licensees overseen by the state agency; and
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4 6. Any other relevant information as identified by LOFT.
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5 D. LOFT shall develop a staggered plan based on the tiered
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6 categorization structure created subsection C of this section.
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7 1. Higher tiered agencies shall be up for review no fewer than
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8 every 4 and no more than every 6 years. Lower tiered agencies shall
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9 be up for review no fewer than every 2 or no more than every 4 years
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10 on a standard system.
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11 2. The staggered plan shall be created so that all agencies
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12 will rotate being up for review over a maximum six year period from
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13 first implementation.
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14 3. The staggered plan shall take into consideration the
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15 currently scheduled sunset of any agency so that the agency is
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16 reviewed using zero-based budgeting the year before it is up for
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17 sunset extension.
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18 4. The staggered plan shall include a cross section of agencies
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19 from each tier so that each year will have as similar of a
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20 distribution as possible of the items listed under paragraph B so
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21 that no one year has an exceedingly higher cumulative amount of
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22 budget, statutes, rules, employees, or other items to be reviewed
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23 when all agencies up for review that year than any other year on the
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24 staggered plan.
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1 5. The staggered plan will be based on the fiscal year. Each
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2 July 1st LOFT will begin evaluating each agency up for review that
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3 year in order to complete the review and issue a report by December
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4 1st of that year for Legislative consideration during the next
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5 session.
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6 SECTION 3. NEW LAW A new section of law to be codified
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7 in the Oklahoma Statutes as Section 8018 of Title 62, unless there
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8 is created a duplication in numbering, reads as follows:
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9 A. Beginning July 1, 2026, LOFT shall use the staggered plan
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10 created in Section 2 of this Act to begin zero-based budgeting
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11 reviews of the agencies identified to be included in the staggered
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12 plan during the 2027 fiscal year and shall provide the Legislature
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13 with zero-based budgeting recommendations by December 1st each year.
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14 B. The LOFT zero-based budgeting review and analysis shall be a
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15 collaborative process between LOFT, an agency, the Governor's
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16 office, the Legislature, and agency program staff. LOFT analysts
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17 will meet with the agency staff as needed to review and obtain any
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18 relevant information to perform a thorough analysis.
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19 C. The zero-based budgeting analysis process consists of four
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20 main steps:
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21 1. Identify and Evaluate Key Activities
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22 LOFT analysts will initiate the process by gathering information
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23 from the agency and compiling their research on the programs and the
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24 key activities of the agency. In collaboration with the agency,
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Req. No. 1413 Page 4
1 LOFT analysts will work to ensure an adequate understanding of the
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2 program and its activities. Agencies shall discuss the program's key
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3 activities and explain why the program and its activities are
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4 critical and necessary. Agencies shall provide information on the
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5 programs intended outcomes, statutory authority, customers, budget,
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6 and consider alternative methods for delivering program services.
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7 2. Information to be considered when evaluating the key
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8 activities and related information include but are not limited to:
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9 a. Key Activities:
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10 (1) Who is the primary constituency for the activity?
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11 (2) Is the activity concentrated in one particular
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12 part of the state, or is it implemented
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13 consistently statewide?
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14 (3) Is there any historical context for the activity
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15 that is important for decision makers to know?
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16 (4) What is the policy objective for the activity and
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17 program?
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18 (5) What are some alternative ways of delivering the
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19 services of the program?
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20 (6) What are the trade-offs of the alternative
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21 methods?
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22 (7) How do the key activities relate to the
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23 appropriated purpose of the program?
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24 b. Statutory Authority:
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Req. No. 1413 Page 5
1 (1) Is the agency statutorily required to perform the
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2 activity?
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3 (2) Is the statutory authority specific to that
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4 activity or is the activity being performed
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5 within the broader general powers and authority
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6 of the Agency?
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7 (3) What are the legal consequences to not performing
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8 the activity? Include any state, federal, or
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9 rule/regulation authority or requirements.
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10 c. Personnel:
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11 (1) Are personnel wholly or partially dedicated to
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12 this activity?
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13 (2) If partially, what percentage of the time is the
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14 employee working on this activity?
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15 d. Expenditures:
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16 (1) What is the current budget/cost to carry out the
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17 activity?
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18 (2) What are the major cost centers for the activity?
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19 (3) What are the overhead costs to operating the
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20 program?
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21 e. Administrative rules:
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22 (1) What percentage of new administration rules have
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23 been enacted over the last 5 years by this
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24 agency?
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Req. No. 1413 Page 6
1 (2) Amendatory rules?
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2 (3) Repealed rules?
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3 f. Licensing:
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4 (1) What is the burden on licensing of individuals
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5 under this state agency?
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6 (2) Is the licensing only for government employees or
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7 private sector employees?
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8 D. Develop and Evaluate the Performance Measures
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9 1. After the key activities have been identified under
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10 subsection A of the Section, LOFT shall identify the appropriate
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11 performance measures for the program and its activities. As part of
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12 the zero-based budgeting analysis process LOFT shall conduct a
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13 thorough review of the measures and work with the Governor's office
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14 and the Legislature on recommendations in a coordinated manner. The
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15 coordinated review is intended to develop a common understanding of
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16 the program's purpose and ensure that the measures reported satisfy
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17 the expectations of core functions of government in Oklahoma.
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18 Agencies will review the recommendations and offer alternative
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19 metrics if appropriate. At the end of the process, the zero-based
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20 budgeting report should reflect the best possible measures for the
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21 programs and activities of an agency and provide state and agency
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22 leadership the information needed to assess program performance and
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23 improve operations in a report provided to the Governor and the
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Req. No. 1413 Page 7
1 Legislature no later than December 1st each year. The zero-based
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2 budgeting process should include:
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3 a. review of existing and historical performance measures
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4 for the program,
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5 b. development and evaluation of performance measures for
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6 the program,
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7 c. internal review by LOFT of zero-based budget
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8 performance measures,
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9 d. discussion of performance measures with the agency,
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10 and
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11 e. review of agency budget performance measures by The
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12 Oklahoma Senate, The Oklahoma House of
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13 Representatives, the Director of the Office of
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14 Management and Enterprise Services, and LOFT with the
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15 agency.
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16 2. Performance measures are an integral part of a zero-based
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17 budgeting analysis and should describe the workload, efficiency, and
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18 effectiveness of the activity or program.
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19 Performance Measures will include at least four years of actual
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20 data and the agency should be able to explain trends over time in
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21 outcomes as well as how those outcomes reflect a program's overall
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22 effectiveness. Where historical data is available, analysts will
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23 review performance trends and consider factors contributing to
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24 program performance. When the zero-based budgeting process results
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Req. No. 1413 Page 8
1 in a new performance measure that the agency does not currently
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2 track, analysts will work with the agency to develop a plan for
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3 tracking the performance measure in all future fiscal years.
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4 3. While the zero-based budgeting process focuses on
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5 performance at the program level, the agency and state performance
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6 metrics to which the program contributes should also be considered.
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7 When selecting candidate measures, relevant state indicators and
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8 federal benchmarks should be identified and included with the other
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9 ZBB performance measures.
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10 Performance measures should be selected based on overall value
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11 for providing meaningful information to management and decision
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12 makers. Quality performance measures are clear (understandable to
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13 general audience), valid (data can be measured), and relevant to the
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14 core purpose of the program or agency. LOFT shall use the questions
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15 for analysis/consideration, including but not limited to:
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16 a. Based on the performance measures identified, how are
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17 the program and its activities performing?
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18 b. What factors may be causing a program to be less
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19 effective than desired and what would need to change
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20 to increase effectiveness? This could include law
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21 changes, funding changes, etc.
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22 c. Is the data provided for the performance measure
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23 reliable and accurate? Is the agency able to document
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24 the sources used for the data?
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Req. No. 1413 Page 9
1 d. What are the limitations of the data available for the
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2 measures, if any?
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3 E. Analyze the Program Budget and Expenditures
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4 1. The financial analysis of a program will examine historical
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5 expenditures by object class for a program. The goal of the
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6 analysis is to show the cost effectiveness or return on investment
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7 of the program when compared to the outcomes established in the
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8 performance metric analysis. Agencies shall explain in detail the
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9 expenditures that comprise each object class and identify the major
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10 cost centers for each program. LOFT shall use the following
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11 questions for analysis/consideration, including but not limited to:
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12 a. Personal Services:
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13 (1) What percentage of program expenditures is
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14 dedicated to personnel?
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15 (2) Are personnel expenditures primarily for full-
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16 time staff or for temporary/part-time staff?
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17 (3) Could more functions of the program be performed
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18 by part-time rather than full-time staff? Why?
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19 (4) Does the agency use contractors to fulfill
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20 activities that could be done with staff or the
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21 converse?
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22 (5) How have budget reductions over the last few
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23 years affected personnel as compared to basic
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Req. No. 1413 Page 10
1 operations such as travel, equipment, contractual
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2 services, etc. in the program?
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3 b. Regular Operating Expenses/Motor Vehicle Expenses and
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4 Repairs:
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5 (1) Is the agency spending an increasing and/or
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6 substantial amount on motor vehicle expenses and
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7 repairs?
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8 (2) If so, be able to show the size and age of fleet,
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9 average operating cost per vehicle, anticipated
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10 mileage for the upcoming year, etc. Would
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11 vehicle expenses be reduced by replacing part of
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12 the fleet rather than continuing to repair older
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13 vehicles?
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14 c. Publications and Printing:
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15 (1) Are there publications that could be reduced or
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16 eliminated by making them available
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17 electronically to consumers?
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18 (2) Could forms be consolidated to reduce the number
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19 or types of forms that the agency prints?
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20 d. Supplies and Materials:
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21 (1) Are there unusual items that this program
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22 requires or are there cyclical buying cycles for
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23 supplies?
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Req. No. 1413 Page 11
1 (2) How has supply expenditures changed over the last
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2 two years?
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3 e. Repairs and Maintenance:
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4 (1) Are there major repairs funded through this
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5 object class that could be funded through bonds
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6 rather than cash?
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7 (2) Does the agency perform repairs and maintenance
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8 in house or are these functions contracted out?
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9 (3) Could savings be achieved by outsourcing (or
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10 insourcing) these items?
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11 f. Equipment:
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12 (1) Is this a large cost center for the program? What
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13 is the age of inventory?
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14 (2) Is an inordinate amount spent to repair older
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15 equipment?
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16 (3) Would it be more cost effective to repair
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17 existing equipment or purchase new?
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18 g. Energy: Has the agency found ways to reduce utility
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19 costs to offset increases in rates?
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20 h. Travel:
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21 (1) Have travel expenditures varied significantly
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22 between years?
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23 (2) How do travel expenditures correspond with motor
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24 vehicle expenses? Are employees who travel
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Req. No. 1413 Page 12
1 primarily relying on their vehicles or state
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2 vehicles?
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3 i. Real Estate Rentals:
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4 (1) You should have a thorough inventory of real
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5 estate space including the square footage, price
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6 per square foot, geographic locations, and
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7 details of the rental agreement.
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8 (2) Are there penalties to relocating certain offices
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9 or consolidating office space with other
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10 divisions or departments?
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11 j. Telecommunications:
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12 (1) Does the agency have a staff member who reviews
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13 billings from the agency's telecommunications
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14 provider each month?
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15 (2) Has the agency thoroughly evaluated the inventory
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16 for which it is billed to determine if there are
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17 terminals/phone lines that are unused that should
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18 be disconnected?
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19 (3) Has the agency worked with the contracted
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20 telecommunication providers to find ways to lower
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21 its overall billings?
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22 (4) Are there other telecommunication or computer
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23 charges that are critical to the delivery of
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24 program services?
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Req. No. 1413 Page 13
1 k. Contractual Services:
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2 (1) What services are contracted?
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3 (2) Are any of these services that could be provided
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4 using existing staff?
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5 (3) Are there services currently performed by full-
5
6 time staff that could be provided more
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7 efficiently through a contract?
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8 (4) Are funds for contracts spent in a timely manner
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9 or are there contracts that act as a "parking lot"
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10 for funds between years and may take multiple
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11 fiscal years to spend down?
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12 (5) Are contractors working on specific time-limited
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13 projects or ongoing routine work?
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14 (6) As with real estate, the agency may be asked to
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15 provide a list of all contracts associated with
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16 the program, their cost, and any specifics
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17 associated with the contract (options for
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18 renewing, penalties for early termination, etc.)
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19 l. Unique Object Classes:
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20 (1) Why was a unique object class created?
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21 (2) What account codes are charged for expenditures
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22 related to the unique object class?
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23 (3) How are the funds in the unique object class
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24 used?
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Req. No. 1413 Page 14
1 2. Summarize the Analysis: For each summary of zero-based
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2 summary analysis, positive results and areas that need improvement
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3 shall be highlighted. Questions, including but not limited to the
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4 following should be addressed in discussions with the LOFT Analysts
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5 and Agency personnel:
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6 a. Do the program's goals align with the Agency mission
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7 statement, statutory authority, directives of the
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8 Cabinet member overseeing your agency, Governor's
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9 strategic plan.
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10 b. Is the program currently performing any activities
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11 that are not statutorily authorized? What would be the
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12 impact of halting those activities? Conversely, are
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13 there activities the program is not performing that it
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14 is statutorily required to do?
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15 c. What have the staffing trends been for the program for
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16 the last 6 years?
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17 d. Does the performance measure data the agency currently
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18 collects provide an accurate depiction of the
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19 efficiency and outcomes of the program and its
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20 activities?
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21 e. How have changes in funding affected the cost to
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22 provide services?
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Req. No. 1413 Page 15
1 f. What are the revenue and expense trends for the
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2 program over the last few years? Has it affected
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3 program services?
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4 g. Can a program or activity be implemented more
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5 efficiently? Are there alternative ways or less costly
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6 ways the program could be implemented to deliver the
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7 same services?
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8 h. Does this program or activity have to be provided by
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9 state government? Could the non- profit or private
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10 sector or another level of government provide the
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11 service?
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12 i. Is this program or any of its services duplicative or
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13 similar to other programs or services the state or
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14 another entity outside of state government already
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15 offers?
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16 j. Given the cost vs. outcomes, is it a program the state
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17 should continue to fund?
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18 k. Would any laws need to change to end an activity or
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19 alter it to make it more efficient?
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20 l. If a program is successful, what best practices could
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21 they offer for other programs or agencies?
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22 m. What trends and outcomes are you seeing in performance
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23 measures?
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Req. No. 1413 Page 16
1 F. LOFT shall develop necessary forms for Agencies to provide
1
2 requested information. A sample form would include requests for the
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3 following information:
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4 Agency Name__________
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5 Program Name__________
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6 KEY ACTIVITIES:
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7 Provide a brief overview of the agency's purpose_____________
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8 Provide a brief overview of the program's purpose____________
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9 Provide a list of the program's top three ultimate and long-term
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10 goals:
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11 Goal 1:___________________
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12 Goal 2:___________________
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13 Goal 3:___________________
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14 Please, list the program's key activities, and complete the table
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15 below:
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16 Key Activity 1:_________________________
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17 Key Activity 2:_________________________
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18 Key Activity 3:_________________________
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19 Key Activity 4:_________________________
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20 Key Activity 5:_________________________
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21 SECTION 4. This act shall become effective November 1, 2025.
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23 60-1-1413 AS 1/19/2025 5:43:53 AM
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Req. No. 1413 Page 17Every fact on this page links to its source, starting with the official bill record.