HOUSE BILL NO. 374                                                           
                                                                               
       "An Act relating to reimbursable service agreements and                 
       other  agreements  between   state  agencies  for   the                 
       purchase of services."                                                  
                                                                               
  Mr. Welker explained that HB 374  was introduced as a result                 
  of   an   audit   regarding   fund  transfers   within   the                 
  Commissioner's  Office,  Department  of  Health  and  Social                 
  Services.  Reimbursable Service Agreements (RSA's) were used                 
  to  transfer additional  funding  from  agencies within  the                 
  Department to  the Commissioner's Office  budget to increase                 
  funding to a  level not approved  by the Legislature or  the                 
  Governor.                                                                    
                                                                               
  Mr. Welker stated  that an  agency that  provides a  service                 
  will bill the agency acquiring the serve based on the actual                 
  cost of the service or by a  cost allocation method that has                 
  been approved by Office of Budget and Management.                            
                                                                               
  Representative  Grussendorf asked  the penalty  of violating                 
  the legislation.  Mr. Welker noted that there is not penalty                 
  in law.                                                                      
                                                                               
  Representative Brown MOVED to  delete "with another agency".                 
                                                                               
                                4                                              
                                                                               
                                                                               
  There being NO OBJECTION, it was so ordered.                                 
                                                                               
  Members  were provided with  AMENDMENT 2 from  the Office of                 
  Budget and Management (Attachment 1).                                        
                                                                               
  NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF                 
  MANAGEMENT  AND  BUDGET, OFFICE  OF  THE  GOVERNOR explained                 
  Amendment 2.  She noted that the sentence that began on page                 
  1, line 8.   She  observed that the  sentence is  redundant.                 
  She added that  "has, by law, the  authority to do  so", was                 
  also deleted.   She emphasized that  an agency may have  the                 
  expertise  to  provide  a  service  but  have  the  specific                 
  authority.                                                                   
                                                                               
  Mr.  Welker  stressed  that it  is  not  the  intent of  the                 
  Legislative Budget and Audit Committee that agencies ability                 
  to use legitimate RSA's be impaired.                                         
                                                                               
  (Tape Change, HFC 94-23, Side 1)                                             
                                                                               
  Representative  Parnell MOVED to  insert on page  1, line 7,                 
  "including the use  of a  reimbursable service agreement  or                 
  other  agreement", after "appropriations";  and delete:  "An                 
  agency may  not, through the  use of a  reimbursable service                 
  agreement   of   other  agrement   transfer   money  between                 
  appropriations."     Delete  after  "However",   and  insert                 
  Amendment 2 after  "However".  There being NO  OBJECTION, it                 
  was so ordered.                                                              
                                                                               
  Representative Parnell MOVED to delete all language starting                 
  on  line  10,  page  1;  and  insert  new  language,   after                 
  "However,", provided by the Office of Budget and Management,                 
  in  Amendment  1.   There  being  NO  OBJECTION,  it was  so                 
  ordered.                                                                     
                                                                               
  Representative  Martin MOVED to report CSHB 374 (FIN) out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  CSHB 374  (FIN) was  reported out  of Committee  with a  "do                 
  pass" recommendation and  with two zero fiscal  notes by the                 
  Office of the Governor and Department of Administration.