Legislature(1993 - 1994)
03/12/1993 01:00 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 58 ADMINISTRATION OF BUDGET RESERVE FUND Number 043 REP. KAY BROWN commented that she had been working with Rep. James and members of the Senate in crafting the draft committee substitute for HB 58, dated March 10, 1993. Number 050 GAYLE HORETSKI, COMMITTEE COUNSEL for the HOUSE JUDICIARY COMMITTEE, noted that the committee substitute now in front of the committee members was identical to the Senate version of the bill. Number 096 REP. BROWN stated that in the past, prospective application of HB 58 had been addressed; however, she the large amounts of money that had recently come in to the state government had prompted interest in making HB 58 retroactive. REP. BROWN noted that some of the issues that had been discussed during the Judiciary Committee's last hearing on HB 58 had also been dealt with in the Senate State Affairs Committee. She said the Senate State Affairs committee substitute was identical to the House Judiciary Committee's substitute. She said that she had tried to clarify provisions in subsection (a) by specifically delineating which monies were not to be considered for the purposes of determining what was "available." REP. BROWN mentioned that some of the changes incorporated in the committee substitute were made in response to specific issues which committee members had raised, such as including penalties and interest, or at the request of the administration. Number 147 JIM BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, noted that the constitutional amendment took effect on July 2, 1991, but it applied to all monies received after July 1, 1990. Number 161 CHAIRMAN PORTER asked Mr. Baldwin, if the committee wanted to make the bill retroactive to the point of applicability of the constitutional amendment, should July 1, 1990, be the date used in the bill? MR. BALDWIN indicated that the Chairman was correct. Number 166 CHAIRMAN PORTER commented that the committee members had before them CSHB 58(JUD), which was identical to the current Senate version of the bill. He asked Mr. Baldwin if he wished to comment on the committee substitute. Number 173 MR. BALDWIN said the Department of Law had some reservations about the language on page 2, lines 7 through 18. He said his department was currently working on an amendment which would address their concerns. He stated that the amendment was not yet ready, but he hoped to have it ready in time for the House Finance Committee to consider it. He added that the current language was workable, but he was concerned that it might be over-inclusive and not meet the intent of the framers of the constitutional amendment. In particular, he said that he was concerned about the bill's effect on Mental Health Trust money. Number 241 REP. JAMES asked if the committee could incorporate language specifically stating that Mental Health Trust monies were not included. Number 249 MR. BALDWIN stated that the problem lay in deciding the philosophy that the legislature wanted to reflect in the bill's language. He said the philosophy he wanted to project was that only amounts fully within the discretion of the legislature should be counted for the purposes of availability to the budget reserve fund. He said if the legislature added in amounts over which it did not have complete discretion, the constitutional amendment would probably not function as the legislature intended. MR. BALDWIN commented that it was unclear whether or not the legislature had complete discretion over the Mental Health Trust monies. He added that a judgment call had to be made by one committee or the other as to whether or not the Mental Health Trust monies would be counted. Number 288 CHAIRMAN PORTER said that rather than attempt to settle the Mental Health Trust issue at the table, the committee should proceed with the language currently in the draft committee substitute. MR. BALDWIN indicated that he was comfortable with the committee moving the bill on to the House Finance Committee with the language as currently drafted. CHAIRMAN PORTER commented that the current committee substitute tightened up the definition of "informal procedure." Number 304 REP. JAMES made a motion to adopt the Judiciary committee substitute for HB 58, dated March 10, 1993 (/E version). There being no objection, it was so ordered. Number 319 CHAIRMAN PORTER noted that the intent of HB 58 was to send a message regarding the intent of the legislature when it adopted the language that later became the constitutional amendment creating the budget reserve account. He said that, in his interpretation, the intent of the amendment was to include any settlement monies, whether the result of a formal process, an informal process, or a court proceeding. He noted that if the committee did not make HB 58 retroactive to the effective date of the constitutional amendment, the legislature would lose credibility in trying to establish its intent. Number 330 CHAIRMAN PORTER recommended that the committee adopt an amendment to the committee substitute making the effective date of HB 58 July 1, 1990, instead of 1993. Number 352 REP. JAMES moved to amend the committee substitute by deleting the dates on lines 26 and 27 and inserting the word "immediately." Number 366 REP. GREEN asked if the proposed retroactivity changes would result in any legal problems. Number 370 CHAIRMAN PORTER replied that there was a possibility of legal problems no matter what actions the committee took. However, he said it was his hope that what the committee was doing would minimize the likelihood of legal difficulties. Number 376 REP. JAMES commented that if there was opposition to making HB 58 retroactive, it would be because there were funds currently held in the settlement account which were presumably available for expenditure. She said there was concern that if all of those monies in the settlement account were placed in the budget reserve fund, capital and operating budgets might suffer. REP. JAMES stated that her response to that concern was that the legislature had no other choice. She noted that if the legislature were going to delineate the intent behind establishment of the budget reserve fund they could not pick and choose. She said that as far as she was concerned, no budget problem would result from the adoption of HB 58 because there was a procedure via which money could be taken from the budget reserve account to cover revenue shortfalls. REP. JAMES commented that for expenditures other than budget shortfalls, 3/4 of the legislature could vote to take funds from the budget reserve account. She cited the possibility of a class-action lawsuit by members of the public, claiming that the legislature was not spending the money the way that the voters had intended when voting to approve the constitutional budget reserve fund. She said that in her opinion, putting money into the budget reserve account and then appropriating it back out if needed, was the legislature's best defense against a lawsuit on this matter. Number 435 REP. GREEN expressed his concern over what had occurred between July 1, 1990, and the present day in terms of what money went where. Number 442 REP. JAMES called Rep. Green's attention to a memorandum from the Department of Revenue outlining what money had gone where since July 1, 1990. Number 458 REP. GREEN said that his interpretation of Rep. James' comments was that any funds which the state had received since July 1, 1990, except for 6 percent to the Mental Health Trust, had been allocated to some account other than the budget reserve fund. Number 463 CHAIRMAN PORTER noted that HB 58 would require that the administration debit the Mental Health Trust account for the 6 percent amount of remaining funds that came in. Number 473 REP. GREEN asked if, other than to the Mental Health Trust account, there had been any allocations of funds. Number 475 REP. JAMES replied that there had not. She said that all of the funds were in an administrative settlement account, pending resolution of the matter. Number 480 CHAIRMAN PORTER commented that none of the money had been spent. Number 481 REP. PHILLIPS asked if interest were included in the committee substitute for HB 58. Number 485 CHAIRMAN PORTER commented that interest was included, but had been moved to a different location in the bill. Number 491 REP. GREEN made a motion to pass CSHB 58(JUD) out of committee with individual recommendations. However, the committee members determined that they had yet to vote on proposed amendments to the bill. Rep. James had moved two amendments earlier. One would delete "June 30, 1993" on page 2, line 26, and replace it with "July 1, 1990." The other amendment would delete "July 1, 1993" on page 2, line 27, and replace it with "immediately." There being no objection to the adoption of the amendments, they were adopted. Number 510 REP. GREEN made a motion to pass CSHB 58(JUD) out of committee with individual recommendations. There being no objection, it was so ordered. CHAIRMAN PORTER announced that the next item of business before the committee was HB 152.
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