A. The joint legislative audit committee shall designate the chairman of each committee of reference and shall assign agencies to the respective committees of reference according to subject matter for performance review.

B. The auditor general shall provide to the committee a list of agencies scheduled for termination in the next sunset termination schedule, plus an estimate of the audit hours necessary to conduct a sunset review of each agency, not less than twenty months prior to the termination date for such agencies. Not less than nineteen months prior to such termination date, the committee shall meet to review the information submitted by the auditor general, shall select which agencies are subject to sunset review by the auditor general and which agencies are subject to sunset review by the committees of reference and shall determine the priority of review by the auditor general or the committees of reference. If the auditor general or the committees of reference are unable to complete the sunset review of a selected agency, the committee shall oversee the preparation of proposed legislation to place such agency in the following sunset termination schedule and is responsible for the introduction of such legislation. Those agencies not selected for sunset review by the committee shall terminate pursuant to article 2 of this chapter unless otherwise continued by the legislature.

C. The committee shall initiate the sunset review not less than seventeen months prior to the termination date for each agency which is selected pursuant to subsection B of this section and scheduled for termination pursuant to article 2 of this chapter. The draft sunset review report shall be completed not less than eleven months prior to the date established by article 2 of this chapter for termination. Before such report is submitted, the state agency affected shall be given an opportunity to review the draft report and submit written comments or rebuttal which shall be included in the preliminary sunset review report. The agency shall have not more than forty calendar days to review the draft report for comment or rebuttal. The preliminary sunset review report shall be submitted to the governor, to each member of the committee, to the committee of reference and to the affected agency by October 1 of the year prior to the scheduled termination date of the agency.

D. The committee may direct the auditor general or the committees of reference to conduct a performance audit, as defined in chapter 7, article 10.1 of this title, or a special performance audit of any agency as defined in section 41-2952.

E. If an agency is continued, the joint legislative audit committee may direct the auditor general or the committees of reference to conduct a follow-up review of the agency to determine how the agency has performed its statutory functions or corrected deficiencies of prior sunset review, or both.