Senate committee recommends two‑year continuation for Governor’s Regulatory Review Council after audit flags process gaps

The Senate Government Committee of Reference recommended the continuation of the Governor’s Regulatory Review Council (GURC) for two years on a 4‑3 vote after hearing an Auditor General performance audit that identified administrative shortcomings in the council’s rule‑review processes.

The audit presentation, delivered by contractor Sjoberg Avishing Consulting and summarized by Nicole Dyer, said GURC lacked a formal system to track receipt, completion and timeliness of rule‑review and five‑year review requests, had failed to send required 90‑day notices for two sampled reports, and produced executive‑session recordings missing statutorily required details. Dyer said those gaps “increase the risk that the council could miss a rule review, or that reviews may not [be] completed within the 120‑day timeframe.”

Why it matters: GURC is the state body charged with ensuring administrative rules are authorized by statute and not inconsistent with legislative intent; failures in its oversight can allow outdated or unauthorized rules to remain in effect or be adopted without sufficient review.

Dyer told the committee that between January 2021 and December 2023 the council received an estimated 175 proposed rule‑making packages, reviewed and approved 192 five‑year review reports, and that for 25 of those five‑year reviews (13%) the council’s work exceeded a 120‑day benchmark, with durations ranging from 124 to 488 days. She said the council agreed with the audit’s six recommendations and had already implemented or planned corrective steps.

Jessica Klein, ADA general counsel and chair of GURC, responded that the council “takes transparency very seriously” and that staff had implemented written policies, tracking metrics and monthly oversight in August 2024 to address the issues raised. Klein said GURC conducted a root‑cause analysis after auditors identified missed notices and that staff now track resubmissions and interactions with agencies; she also said the council updated its executive‑session script in April 2024 to improve open‑meeting compliance.

The hearing turned contentious when the committee chair pressed Klein on the council’s handling of a high‑profile Department of Water Resources rulemaking related to assured water supply, which the chair characterized as effectively creating a 25% groundwater charge. The chair asked whether GURC independently researched statutory authority beyond the materials agencies submit and whether the council had improperly approved a controversial rule during a study session. Klein said she reviewed staff packets, a memo from the Attorney General’s Office and additional materials and that an AAG’s memo was provided prior to the council’s vote; she also acknowledged a staffer had misspoken at an earlier hearing and offered to provide documentation and examples of prior practice.

The chair said the record indicated the council had failed its statutory duty under ARS 41‑10‑52 and ARS 41‑10‑30 to ensure rules are not beyond an agency’s authority or inconsistent with legislative intent, and called for further documentation and examples from GURC about votes taken in study sessions and the council’s historical practices.

Motion and outcome: Vice Chair moved that the committee recommend continuing GURC for two years with modifications to be determined in the authorizing legislation. After discussion and recorded statements, the committee recommended continuation on a 4‑3 vote. The committee chair said he would ask that the bill be held in committee rules until GURC provides examples and documentation requested during questioning.

What’s next: The recommendation must be reflected in continuation legislation; the Auditor General’s office said it will conduct a six‑month follow‑up to verify implementation of the audit recommendations.

Quotes from the hearing: “The council lacked a formal process to track the receipt, completion, and timeliness of these reviews,” Nicole Dyer said. The committee chair told Klein, “You didn’t comply with the law, Miss Klein.” Klein replied, “We take transparency very seriously,” and offered to provide records and examples to clarify the council’s practices.

Details and context: The audit noted the council is a division of the Arizona Department of Administration, has seven members, two staff attorneys and a paralegal, and that the Auditor General last reviewed the council in 2006. The council agreed to implement all six audit recommendations, including formal written procedures and improved tracking to ensure compliance with statutory timelines.

The committee concluded its hearing with the recommendation; no date for final floor action was recorded in the hearing transcript.