MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session June 19, 1995 The Committee on Ways and Means was called to order at 8:07 a.m., on Monday, June 19, 1995, Chairman Arberry presiding, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Jan Evans, Vice Chairman Ms. Sandra Tiffany, Vice Chairman Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Vonne Chowning Mr. Jack D. Close Mr. Joseph E. Dini, Jr. Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. Bob Price Mr. Larry L. Spitler COMMITTEE MEMBERS ABSENT: None STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst Mr. Gary Ghiggeri, Deputy Fiscal Analyst ASSEMBLY BILL 473 Creates account to provide assistance to tenants of mobile home parks who are temporarily unable to pay rent because of illness or emergency. Ms. Renee Diamond, Administrator, Division of Manufactured Housing, explained A.B. 473 was not requested by her division. She testified this bill was introduced by Assemblywoman Buckley to provide emergency assistance funding to mobile home tenants. She noted the emergency could not extend beyond two months. Ms. Diamond explained the division anticipated it would be able to administer the emergency fund as part of the lot rent subsidy program at no additional cost other than for computer software. In addition, however, the division was authorized to designate a nonprofit housing organization to qualify applicants for assistance. Mr. Marvel questioned whether the full $100,000 was required. Ms. Diamond stated the full $100,000 was needed to make the program substantive. Ms. Diamond noted she had spoken to Assemblyman Buckley regarding the six- month residency requirement. She pointed out other portions of the statutes related to the lot rent subsidy program referred to a 12-month residency requirement. She suggested A.B. 473 be revised to make the residency requirement consistent with the 12-month requirement. She also suggested revising the bill to limit receipt of assistance to any two months during any 12- month period rather than to any two months during a calendar year. Mr. Fettic asked if assistance would be available to mobile home tenants living anywhere in the state. Ms. Diamond answered affirmatively. Mr. Fettic inquired what type of illness would warrant receipt of emergency assistance. Ms. Diamond replied assistance could be made available in cases of serious or life threatening illnesses which caused tenants to be out of work for a substantial period of time. Mr. Hettrick expressed opposition to providing emergency funding to a special group and not making it available to all classes of citizens. Mrs. Chowning noted people living in mobile home parks were in a different situation than other homeowners since they did not own the land on which their home was located. She also questioned why the bill did not require the adoption of regulations by which to administer the emergency fund. She added it did not appear the nature of the emergency fund was clearly set out in the bill. Ms. Diamond stated regulations would have to be adopted to administer the fund and eligibility criteria would have to be developed. She pointed out other social services agencies had similar emergency programs from which this one could be modeled. She said she envisioned applicants being qualified on the basis of income as was the case in the lot rent subsidy program. Mr. Fettic disclosed he is a mobile home park resident. He agreed with Mr. Hettrick emergency funding should not be provided for a single interest group. Assemblywoman Barbara Buckley, District 8, testified mobile home owners could have a lien placed on their home or have their home taken from them for nonpayment of space rent. A.B. 473 would create a $100,000 fund to provide rent assistance to mobile home owners in such an emergency situation. She explained the fund would be administered by the Manufactured Housing Division. She noted other emergency funding for this purpose was limited. Mrs. Buckley stated $100,000 was a relatively small amount, but it could make the difference between someone losing their home or staying in their home. She testified the uniqueness of mobile home ownership warranted establishment of this emergency assistance fund. Mr. Marvel asked if there was any provision for paying back money distributed from the fund. Mrs. Buckley stated there is no payback provision in the bill. She noted it had been the experience of the administrators of similar funds that the administrative expense associated with paybacks added to the fiscal impact. She noted recipients would be limited to one grant every 12 months. Mr. Marvel inquired how many cases had occurred where mobile home owners had actually been evicted. Mrs. Buckley stated her recollection was 500 liens had been placed on mobile homes in a single year. The number of evictions was greater. Mrs. Chowning noted mobile home owners could file homesteads on their mobile homes to keep liens from being filed for medical payments. Mrs. Buckley explained obligations to mobile home park owners took precedence over the homestead on a mobile home. The park owner could cause the sale of the mobile home to recover amounts owed. ASSEMBLY BILL 502 Makes various changes relating to discriminatory practices. Assemblywoman Barbara Buckley, District 8, testified A.B. 502 attempted to make Nevada state law comply with federal disability law. The bill provides that a person may not refuse to rent an apartment to an individual with disabilities or refuse to make reasonable modifications to an apartment to accommodate the disabled person. It would require that covered multi-family dwellings be constructed in such a manner as to ensure minimal accessibility standards for the disabled and would clarify the definition of familial status in accordance with federal law. Mrs. Buckley noted the Nevada Equal Rights Commission was formerly authorized to conduct investigations of complaints of housing discrimination. However, because the Equal Rights Commission failed to have changes made in the Nevada Revised Statutes to ensure minimum compliance with federal law, the agency was decertified and defunded. The federal government would pay Nevada $1,300 for each investigation if the statutes were in compliance with federal law. Mrs. Buckley reported many southern Nevada employers were supportive of this legislation because they preferred to deal with the state rather than the federal department of Housing and Urban Development (HUD). Mrs. Buckley noted the Director of the Department of Education, Training and Rehabilitation had submitted a revised fiscal note indicating there was no fiscal impact associated with A.B. 502. She explained Nevada would not have the ability to actually process cases until the statutes have been found to be substantially equivalent by HUD. That application will not be submitted for approximately one year, after which time it will have to be reviewed by HUD. The Director anticipated by that time the Nevada Equal Rights Commission would be able to reduce its backlog of employment discrimination cases to a point where it could consider implementation of the housing discrimination program. Mr. Hettrick expressed concern about provisions of the bill regarding requirements for building modifications, restoration of buildings to their original condition, and punitive damages for violations. Mrs. Buckley explained the bill only brought state law into compliance with federal law which was already in effect. Nothing was added to this bill which was not already a federal requirement, and contractors have been aware of the federal regulations since it became effective in 1991. The purpose of the bill was to adopt federal regulations in order to make Nevada substantially equivalent to the federal government for purposes of investigating cases of housing discrimination. Chairman Arberry noted the Nevada Equal Rights Commission intended to subcontract for investigation of housing discrimination charges. He questioned how subcontracts could be made without causing a fiscal impact. Mrs. Buckley stated the funding would come from the $1,300 per case paid by the federal government. The average cost of investigating a case was approximately $800. Therefore, the state could realize some revenue. Mrs. Chowning asked if this legislation applied to single-family dwellings as well as multi-family dwellings. Mrs. Buckley stated single-family dwellings were not addressed within the confines of this bill. She explained existing law in NRS Chapter 118 addressed single-family rental units. Mr. John Albrecht, Deputy Attorney General, Human Resources Division, stated he was representing the Director of the Department of Employment, Training and Rehabilitation. Chairman Arberry inquired how subcontractors would be paid for housing discrimination investigations. Mr. Albrecht stated it was anticipated the $1,300 from the federal government would be passed through to the agency performing the investigations. Chairman Arberry said it was his understanding the federal government only paid for cases when they were closed. He questioned how investigations of cases which were not closed would be paid for. Mrs. Buckley stated she had some preliminary discussions with representatives of HUD. She noted HUD was somewhat reticent to reinstate the Nevada Equal Rights Commission; however, it indicated a willingness to contract with the Nevada Equal Rights Commission to pay for anticipated closures. She envisioned HUD fronting some of the money to the Nevada Equal Rights Commission. Mrs. Evans asked what other agency might be conducting the investigations. Mrs. Buckley suggested an organization which works with the disabled or the Housing Division could be appropriate agencies to conduct the investigations. Mrs. Evans asked how that determination would be made. Mrs. Buckley stated the Governor would make the decision. She said it was her understanding the investigations would not occur within the coming biennium because the HUD review of the application could take a year. She pointed out the provisions of the bill regarding enforcement would not become effective until after state law was declared substantially equivalent to federal law by HUD. Chairman Arberry indicated the committee agreed with the intent of A.B. 502, but due to the past performance of the Nevada Equal Rights Commission, it was skeptical about whether this program would be successful. Mrs. Buckley said she understood the position of the committee. She noted she had also been frustrated with the Nevada Equal Rights Commission, which was the reason for allowing the Governor to designate another agency to conduct the investigations. Chairman Arberry called for public testimony. Ms. Donny Loux, representing the Independent Living Council and the Nevada Developmental Disabilities Council, expressed the support of those organizations for A.B. 502. ASSEMBLY BILL 524 Makes various changes to provisions governing family foster care for children. Assemblyman John Carpenter, District 33, explained A.B. 524 had been labeled the "Foster Parents' Bill of Rights." He noted he was appearing before this committee to remove the fiscal note from the bill. Mr. Carpenter stated the original bill proposed that reimbursements to foster care providers would be consistent with the United States Department of Agriculture guidelines. He noted the USDA recommendations were approximately double the amount received by foster parents in Nevada. An amendment had been drafted to remove this provision. Mr. Marvel asked for an explanation of Section 11 of the bill allowing respite from foster care responsibilities for foster care providers and contact with the Division of Child and Family Services on a 24-hour basis 7 days a week. Assemblywoman Jan Monaghan, District 1, explained respite care was already provided for foster families. The 24-hour, 7 day a week contact with the division was requested by foster families as a resource to answer questions or provide assistance with problems. Mr. Marvel questioned whether additional staff would be required if A.B. 524 was passed. Ms. Monaghan answered additional staff would not be needed. Division supervisors would be available to provide the services. Mr. John Sarb, Administrator, Division of Child and Family Services, confirmed Ms. Monaghan's statement. He noted the practices outlined in the bill were already part of the division's policy and program. He stated there was no fiscal impact associated with A.B. 524. Mr. Marvel asked if there was any fiscal impact associated with training for foster care families. Mr. Sarb answered the division was already budgeted for training for foster parents and for respite care. He noted no additional staff would be required. ASSEMBLY BILL 573 Creates account for support of child care services. Assemblywoman Vivian Freeman, District 24, testified A.B. 573 was requested by the child care community. A.B. 573 would authorize creation of an account for child care funding for low income working parents. She noted the fastest growing population groups in Nevada are children and low income working parents. A significant reason for people applying for Welfare is to obtain health care and child care. Mrs. Freeman expressed the opinion the funding requested ($1 million over the course of the coming biennium) was not a substantial amount for services as crucial as child care. Mrs. Chowning stated she had served on the interim study committee on child care. She noted at one time the trust fund was contemplated to be $13 million, and that amount had now been reduced significantly. Mrs. Freeman stated the $13 million would have funded child care for every child in the state as well as latch key and Headstart programs. She noted there were state agencies which could manage the money and distribute it as needed. Ms. Marilyn Ives, representing the Alliance for Child Care, encouraged passage of A.B. 573. She stated every dollar invested in quality child care and preschool education results in a savings of $7 in the cost of special education, Welfare, and worker productivity. She noted many parents were unable to afford quality child care. Ms. Ives said over 3,000 Nevada children were provided subsidies (primarily federally funded) which allowed their parents to work or attend a training program in 1993. An additional 6,000 Nevada children were waiting to receive services. Over 60 percent of those children have parents who need that child care subsidy in order to work. Mrs. Evans asked how many low income families were receiving child support. Ms. Ives replied of the clients her organization was currently serving, approximately 50 percent received child support. She estimated the majority of those clients did not receive the full amount of child support to which they were entitled. Mr. Jerry Allen, Department of Human Resources, explained he served as coordinator of the Child Care Development and federal Title IV A At-Risk Programs. He noted the two programs collectively resulted in approximately $5 million in federal funding coming to the state of Nevada for child care and early childhood development programs, and to monitor licensing activities. He noted the 1991 interim study on child care determined between $10 million and $13 million was needed for child care. He pointed out the state had grown rapidly since that time. The current waiting list of children in need of child care services is nearing 7,000. Mrs. Evans asked how much of the $5 million federal funding actually was directed to low income parents. Mr. Allen answered most of that funding was directed to parents. He stated approximately 75 percent of the $3.5 million Child Care Development block grant was directed toward child care services, less administrative costs up to a maximum of 15 percent of that 75 percent. The remaining 25 percent was directed to early childhood development programs, before and after school programs, and licensing and monitoring activities. The Title IV A At-Risk Program represents federal funding of approximately $1.5 million. All of that funding, less administrative costs, goes directly to child care services. Mrs. Evans asked Mr. Allen to provide to the committee a breakout of the costs of direct client services and administration for the federal funds. Mr. Allen agreed to provide the information. Mrs. Bobbi Gang, representing the Nevada Women's Lobby, urged support for A.B. 573. She noted child care was desperately needed. Many children were living in unsafe situations due to inadequate child care. She reiterated adequate, safe child care was expensive and unaffordable for many families. She expressed concern that a number of families were required to seek Welfare assistance to obtain child care. She requested the bill be amended to place funds into an existing account within the Department of Human Resources rather than to create a new account (see Exhibit C). Ms. Jan Gilbert, representing the League of Women Voters of Nevada, noted she was a member of the Welfare Reform Task Force, where she heard repeatedly that a major obstacle to getting off Welfare was the high cost of child care. She urged support for A.B. 573. Mr. Fettic asked if the bill was directed only to single-parent households. Mrs. Freeman stated the child was required to be living with at least one parent or guardian. Two-parent families would not be precluded from receiving assistance. Ms. Myla Florence, Administrator, Welfare Division, expressed the division's support for A.B. 573. She reiterated affordable child care was one of the main reasons people accessed Welfare. Child care was a necessary component of any meaningful Welfare reform program. She noted the child care assistance program proposed in this bill would not duplicate the services provided by the Welfare Division's child care assistance program (ACE). Mr. Marvel inquired whether this bill was discussed with the Budget Division during formulation of the Welfare Division budget. Ms. Florence stated the issue of child care was discussed as part of the budget process. She noted the Governor recommended doubling the amount for child care funding in the ACE program for individuals transitioning off Welfare. She said the program proposed by A.B. 573 would enable fewer people to access Welfare for assistance. Mr. Marvel asked how much the Governor added to child care funding. Ms. Florence stated the amounts recommended in the Executive Budget were $1.7 million in Fiscal Year 1996 and $2.7 million in Fiscal Year 1997. She noted those amounts were decreased slightly (by approximately $100,000 per year) based on an averaging of child care costs. Mr. Marvel asked how large the waiting list would be after the additional funding became available. Ms. Florence replied the additional funding would provide services for approximately 800 people over the course of the 1995-97 biennium. Mr. Hettrick inquired about the rationale for providing child care assistance to children in foster care. Mrs. Freeman noted compensation to foster parents was insufficient to meet their costs. Mr. John Sarb, Administrator, Division of Child and Family Services, noted foster families utilized child care on occasion. He cited the case of a temporary illness of a foster parent requiring that the foster children be placed in child care at a cost greater than the foster care payment. He stated he was pleased to see this provision included in the bill because there was effective use of the funds which could be made by foster parents. He expressed support for the proposed amendment not to deposit the funds to the Bureau of Child Care Services. Mr. Marvel asked Mr. Sarb to provide a statement in writing to the committee that if Section 13 is deleted from the bill, the fiscal impact will be eliminated. Mr. Sarb agreed to do so. Mrs. Brower asked the difference between eligibility criteria for the ACE Program and the program being proposed by A.B. 573. Ms. Florence stated the Welfare Division administered the ACE Program comprised of federal Title IV funding for transitional child care assistance up to one year for individuals who go off Welfare by virtue of employment, making their income too high to continue receiving Aid to Families With Dependent Children. Assistance is based on a sliding scale, depending on income. The eligibility criteria (i.e., income limits) proposed in A.B. 573 would be higher than those of the ACE Program. The proposed program would be aimed at helping low income people who were not on Welfare or transitioning off Welfare. Ms. May Shelton, Director, Washoe County Social Services, expressed support for A.B. 573. She noted this program could serve to prevent the movement of children into the criminal system. She encouraged passage of the bill. She expressed disappointment with elimination of the proposal to increase compensation for foster care providers from the bill, but noted compensation rates had been increased in the division budget. She expressed the hope the Legislature would develop a plan for increasing foster care rates in the future. Mrs. Freeman noted the interim study committee on child care had learned over half the abused and neglected children in Washoe County lacked adequate supervision. Adequate child care was important for the wellbeing of children in Nevada. She expressed the hope the Legislature could do something for children this session. Mrs. Chowning questioned whether foster parents could lose their license for refusing to accept placement of a foster child in their home. Mr. Sarb said to his knowledge no foster parents have had their licenses revoked for failure to accept a child. He noted it was common for foster parents to refuse a placement and the demand for foster parents was so great another child would soon be placed in that home. He reiterated A.B. 524 was intended to place into statute existing policies and practices of the division. He noted foster parents could refuse placements under the terms of the contract with the division for their services. In fact, it was their duty to refuse inappropriate placements. Ms. Elizabeth Livingston, Nevada Women's Lobby, expressed support for A.B. 573. ASSEMBLY BILL 612 Creates program to train unschooled young persons in building trades. Mr. George Govlick, Deputy Administrator, Department of Employment, Training and Rehabilitation, explained the Director was unable to attend this hearing. He expressed the department's support for A.B. 612. He stated the bill represented an opportunity for young people to become associated with the construction trades. The department proposed developing a prototype program to evaluate approaches and linkages required to make this training program work effectively. He noted the department was fully cognizant of the requirement to report back to the Legislature regarding the results of the program and was willing to do so. Mr. Jack Jeffrey, representing the Southern Nevada Building and Construction Trades Council, testified he was neither for nor against this bill. He pointed out similar programs which were attempted in the past had been unsuccessful. He explained there was a gap between training programs and the workplace. He suggested amending the bill to include registered apprenticeship programs in this program. He stated pre-apprenticeship programs provided background and training necessary for entrance into an apprentice program. The problem with pre- apprenticeship programs was they were used as a source of "cheap labor" by many employers. He suggested if the bill was passed, the grants be directed to apprenticeship programs registered with the Labor Commissioner. Chairman Arberry noted the bill should be amended to limit apprenticeship training to individuals who have graduated from high school or have a G.E.D. Mrs. Chowning noted it was high school dropouts with limited career opportunities who could benefit from this program. Mr. Frank Grunstead, Business Manager, International Brotherhood of Electrical Workers, expressed concern this bill could represent an incentive for dropping out of high school. He also questioned who would be administering the program and if that person would be familiar with the various trades and crafts. He noted the training program was limited to two years. He asked if program participants would be qualified to work at the end of two years. Mrs. Chowning asked if it was true someone without a high school diploma or G.E.D. could not be employed through registered apprenticeship programs. Mr. Grunstead stated that was correct. He said applicants for apprenticeships who did not have a high school diploma were encouraged to complete high school equivalency courses. He added completion of one year of algebra was a requirement of apprenticeship programs. He expressed concern this bill could downgrade those requirements. Mrs. Chowning asked if the bill could be strengthened by adding language requiring a high school equivalency certificate by the time of completion of the training program. Mr. Grunstead suggested a G.E.D. should be required within the first year of the program. ASSEMBLY BILL 613 Requires authorized insurer that issues policy of casualty or property insurance to file annual report of its underwriting standards with Commissioner of Insurance. Assemblyman Morse Arberry, Jr., District 7, testified in support of A.B. 613. He explained this bill addressed the problem of insurance "red lining." The intent of the bill was to require insurance companies to justify to the Insurance Commissioner their decisions not to underwrite insurance in particular areas of the state to ensure insurance companies were providing insurance to all areas of the state and were not charging higher premiums in certain areas based on zip codes or telephone numbers. Mr. Marvel asked if zip codes were being used to make premium determinations. Chairman Arberry said it was his understanding zip codes were being used for that purpose. Mr. Hettrick inquired whether there was a fiscal impact associated with this legislation. Chairman Arberry stated the bill was referred to this committee in error. Mr. Dini said he thought this issue had been dealt with previously. Chairman Arberry said he understood it was not currently being dealt with, but if it was, this legislation would be unnecessary. Mr. Tim Ghan, Actuary, Division of Insurance, testified the division was not currently looking at the red lining issue. He noted the division was in support of A.B. 613 and had been involved with the NAIC, which has been looking at this matter. He stated the conclusion of a national survey was that red lining was occurring in areas which were economically impoverished and areas where geography imposed difficulty on the writing of insurance. He added the division was involved in a consumer information working group which recently conducted focus groups to look at the diffusion and efficiency of consumer information. Mr. Ghan explained consumers appeared to have a vague knowledge of insurance and underwriting guidelines. Consumers felt if they were provided this information, it would assist them in making insurance purchases. He noted Texas and Missouri currently required filings of underwriting guidelines in order to allow them to review incidences of red lining. Some states required publishing of underwriting guidelines. Mr. Ghan stated the division believes if it could review this information, it would ensure availability and affordability in areas where there is currently a problem obtaining affordable insurance. Mr. Ghan noted a Management Assistant position was requested to handle the workload which would be created if A.B. 613 passed. Mr. Ghan said underwriting guidelines were shared among insurers, but there appeared to be some reluctance on the part of the industry to make that information public. The division would like to be able to review this information to determine if red lining conditions exist in certain areas and try to resolve them. Mr. Hettrick asked if there was a fiscal impact associated with the Management Assistant position. Mr. Ghan stated he believed there was a fiscal impact. Mr. Hettrick noted the bill applied only to incorporated cities. He also noted most incorporated cities in Nevada probably have only one zip code. He suggested the issue of red lining should be reviewed statewide. Mr. Ghan expressed agreement with Mr. Hettrick. He noted survey data was collected in Las Vegas, Reno, and Elko. Mrs. Chowning asked if red lining applied to auto insurance and why the issue had not been addressed until now. She expressed the opinion treating individual zip code areas differently constituted discrimination. Mr. Ghan noted while there were problems with classification of areas according to zip code, it has been one of the best ways to determine risk in certain areas. The issue to be addressed is whether red lining was making insurance unaffordable in some areas. Mrs. Chowning noted people recognized the cost of insurance would be greater in high risk areas, but it was not fair to charge higher premiums simply on the basis of zip code. Mr. Price asked if each insurance company had established underwriting guidelines which could be provided to the Insurance Commissioner if A.B. 613 was passed. Mr. Ghan responded affirmatively. SENATE BILL 224 Makes various changes regarding preparation of state budget and review of federal mandates and encroachments. Senator Dean Rhoads, Northern Nevada Senatorial District, testified S.B. 224 had been amended in the Senate. He asked Assemblywoman Jan Evans, District 30, to present this bill. Mrs. Evans reported S.B. 224 was a product of the interim study committee which has been working on changes to the budget process, specifically the possibility of creating a legislative budget office to replace the current Fiscal Analysis Division. She noted other legislation was pending which related to revisions in the budget process. S.B. 224 specifically outlines the provisions for establishing a legislative budget office. It was amended in the Senate to more clearly delineate the responsibilities of the Legislative Counsel Bureau. Mrs. Evans explained the legislative budget office would create its own budget document from which the Legislature could develop the biennial budget. She noted in other states using this system, budget documents were produced by both the Executive Branch and the Legislative Branch. In those cases, the legislative money committees work from the Legislative Branch document. Mrs. Chowning questioned why the voting record of each member of the Nevada Congressional Delegation was required to be reported to the Legislature. She suggested the voting record of each legislator should be reported to cities and counties. Senator Rhoads responded the intent of the provision was to express Nevada's concerns about unfunded federal mandates to each member of Congress. He stated he had no problem with amending the bill to require the Legislature to report voting records to city and county governments. Senator Rhoads explained Section 6 of the bill would provide for one Analyst position to monitor the effect on state government of pending legislation, programs, regulations, and method of enforcing programs at the federal level. Mr. Dini said he objected to this becoming a legislative "witch hunt" of the Congressional Delegation. Senator Rhoads stated that was not the intent of the language. Ms. Tiffany asked if the outside audit of federal mandates could accomplish some of the research required by Section 6. Mr. Stevens said his understanding was an additional Research Analyst position would be required to perform the monitoring and reporting functions set forth in Section 6. Senator Rhoads noted other states were taking this approach of creating a position to examine federal mandates. Ms. Tiffany questioned whether the position would act as a liaison between the Legislature and the federal government. Senator Rhoads responded it was not intended the position would be required to travel to Washington, D.C. Mrs. Evans noted the monitoring of information could be done via the Federal Register and other federal directories. Chairman Arberry inquired whether it would be more effective to develop a special committee to assume the responsibilities contained in Section 5 rather than assign those responsibilities to the Interim Finance Committee. Senator Rhoads stated the Interim Finance Committee recommended assigning those responsibilities to a subcommittee. The Senate amended the bill to require the entire Interim Finance Committee to perform the duties set forth in Section 5. Mr. Spitler asked how the cost of a legislative budget office was justified. Senator Rhoads suggested the legislative session could be shortened by 20 to 30 days if the legislative budget office was implemented because much of the budget process could be completed prior to the session. He suggested state agencies would be more forthcoming about expressing budgetary needs to the legislative budget office, and the budget process would be more accessible to the public. Mr. Spitler questioned whether development of a legislative budget document would preclude the Legislature from looking at the Governor's budget. Senator Rhoads replied both budgets would be used. Mr. Spitler questioned how time would be saved using two budget documents. Mr. Stevens noted S.B. 224 contemplated providing electronic assess by the Fiscal Analysis Division to the Budget Division's budget information to allow for comparison of the two budget documents. Mr. Spitler inquired how S.B. 224 related to other pending measures to streamline the budget process. Mrs. Evans responded this bill would require greater involvement in the budget process by the Legislature prior to the beginning of the session. She noted other states which had a legislative budget office had small money committees, which helped to streamline their operations. Mr. Spitler asked Mrs. Evans if she agreed passage of S.B. 224 would shorten legislative sessions. Mrs. Evans replied the session could be shortened if the Legislature could complete all of the preliminary work required prior to the session. She pointed out a disadvantage of this system would be that public testimony would be severely curtailed during the session. Mr. Spitler noted he favored encouraging public testimony. Mr. Spitler inquired whether the interim study committee had considered other methods of streamlining the budget process. Senator Rhoads noted a prior study considered allowing committees other than the money committees to develop portions of the budget related to their area of focus (e.g., having the Transportation Committee develop the Department of Transportation budget). In fact, that alternative was attempted in the Senate with little success. Mr. Stevens reported that approach had required extensive staff support. Mr. Spitler stated he would have to see a reasonable payback from S.B. 224 before he could justify the cost. Ms. Giunchigliani expressed concern that budget policy decisions would be made by the Interim Finance Committee rather than by the full legislative body. Mrs. Evans pointed out the budget document created by the legislative budget office would be a proposal requiring final action by the entire Legislature. Mr. Dini questioned whether S.B. 224 would circumvent the Economic Forum regarding revenue projections. Mr. Stevens explained S.B. 224 required the legislative budget proposal to include anticipated revenues and expenditures to balance the budget. The Legislature would not develop its own revenue projections but would be required to use those developed by the Economic Forum. Mr. Dini suggested if S.B 224 was adopted, it should require that members of the money committees not serve on any other committees. Mr. Marvel agreed members of the money committees should serve solely on those committees. Mrs. Evans noted that was the case in other states which had adopted this form of budget development. Mr. Price asked how many state legislatures had their own budget offices. Mr. Stevens estimated approximately half of the states were currently using this system. Senator Rhoads noted this was a growing trend, however. Mr. Price stated he was in favor of a legislative budget office. He agreed the Legislature may obtain more budget information directly from agencies if this method was adopted. There being no further business, the meeting was adjourned at 11:15 a.m. RESPECTFULLY SUBMITTED: Dale Gray, Committee Secretary Assembly Committee on Ways and Means June 19, 1995 Page