Assignment Of State-owned Vehicles

Legislative Audit Committee. The bill clarifies the criteria and requirements in connection with the assignment of a state-owned motor vehicle (vehicle) to a state agency or to an officer or employee of a state agency.

Assignment of vehicles to a state agency. Current law permits the division of central services in the department of personnel (division) to permanently assign a vehicle to a state agency. The bill clarifies that the assignment of a vehicle to a state agency is authorized only when the state agency's use of the vehicle is likely to meet the minimum required mileage for the vehicle's intended work function or if the state agency can justify the need for permanent assignment of the vehicle because of its unique use. The bill also clarifies the conditions under which the division must revoke the assignment of the vehicle to a state agency.

Assignment of vehicles to an officer or employee of a state agency. Current law also permits a state agency to assign a vehicle to an officer or employee of the state agency under certain circumstances. The bill specifies that for purposes of the assignment of a vehicle to an officer or employee of a state agency, 'state agency' does not include the judicial and legislative branches of state government, any state institution of higher education, or the Auraria higher education center, and that 'state agency' does include the state board of stock inspection commissioners.

Pursuant to current law, a state agency may assign a vehicle to an officer or employee when the executive director of the state agency determines that it would promote a legitimate nonpartisan state interest, promote the efficient operation of the state motor vehicle fleet, and is cost-effective to the state agency. The bill eliminates the current criteria and specifies that a state agency may assign a vehicle to an officer or employee of the state agency for business and commuting only if:

• Assignment of the vehicle is necessary to conduct official and legitimate state business;
• The vehicle meets the federal internal revenue service (IRS) definition of qualified nonpersonal use, or assignment of the vehicle is the most cost-efficient means of transportation to the state agency; and
• Assignment of the vehicle complies with any additional criteria established in rules adopted by the department of personnel.

The bill requires the executive director of a state agency or their designee to authorize the assignment of a vehicle in writing and submit the authorization and any supporting documentation to the director of the division for review.

The bill requires the director of the division or the state controller, as applicable, to review any assignment of a vehicle to an officer or employee of the state agency. The director of the division or the state controller is required to verify that the state agency's assignment of a vehicle complies with state and federal law. If the review establishes that the assignment of a vehicle does not comply with state and federal law, the division is required to revoke the assignment of the vehicle.

Currently, any state officer or employee who has an assigned vehicle is required to reimburse the state for the use of the vehicle at a rate computed by the division. The bill eliminates the reimbursement provision and specifies that when an officer or employee is assigned a vehicle because it is the most cost-efficient means of transportation to the state agency, the officer or employee is required to pay income tax on the value of the fringe benefit of the vehicle. The bill requires the state controller to calculate and report as income the value of the vehicle's fringe benefit in accordance with IRS regulations.

The division is required to establish a program and adopt rules providing for annual verification by the director of the division or the state controller that the assignment of each state-owned motor vehicle to an officer or employee of a state agency still complies with the requirements of state and federal law. The review is required for all assigned vehicles, regardless of when they were assigned. If the verification process establishes that the assignment of a vehicle does not comply with state and federal law, the division is required to revoke the assignment of the vehicle.

On or before September 1, 2019, the department of personnel is required to report to the legislative audit committee regarding the implementation and enforcement of the bill. The department may make recommendations regarding further modifications to the criteria and requirements for the assignment of vehicles to officers and employees of state agencies for business and commuting purposes.

(Note: This summary applies to this bill as introduced.)