A. On or before March 1 of each year, beginning in 2001, the director shall submit a detailed report of employee misconduct verified as valid to the governor, the speaker of the house of representatives and the president of the senate. The report shall include:

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1. All categories of instances involving the misconduct of employees of the department during the preceding calendar year.

2. The disposition during the preceding calendar year of any instances of misconduct, without regard to the year of misconduct.

3. The primary activity the employee was engaged in when the misconduct occurred.

4. The nature of the misconduct,

5. The number of incidents received by category and the disposition of those incidents, including the number of employees reprimanded, terminated or prosecuted.

B. Incidents that are subject to reporting include only written complaints and complaints received by telephone through management channels.

C. In collecting data for the report, the director or the director’s designee shall maintain records of taxpayer complaints of misconduct verified as valid by department employees on an individual basis. The individual employee records shall be used to prepare the report but shall not be listed in the report. The department shall use the individual records in evaluating the performance of the individual employee.

D. The director shall create and adopt a uniform procedure by which the department shall evaluate complaints of employee misconduct for the purposes of verifying the complaint as valid.

E. For purposes of this section "verified as valid" means any report of employee misconduct that has been reviewed pursuant to subsection D and determined by the department to be in violation of any one of the following:

1. The laws of the United States or this state.

2. Policies adopted by the state of Arizona.

3. Policies adopted by the department.