SENATE SPECIAL COMMITTEE ON BUDGET

June 26, 2002 Hearing Room E

9:30 AM Tapes 13 – 16

MEMBERS PRESENT: Sen. Lenn Hannon, Chair

Sen. Peter Courtney

Sen. Avel Gordly

Sen. John Minnis

Sen. David Nelson

VISITING MEMBERS: Sen. Kate Brown

STAFF PRESENT: Richard Yates, Legislative Revenue Office (LRO)

Paul Warner, LRO

Rick Olsen, Legislative Fiscal Office (LFO)

Ken Rocco, LFO

Larry Niswender, LFO

Steve Bender, LFO

Lizbeth Martin-Mahar, LRO

Patricia Nielsen, Administrative Support

MEASURE/ISSUES HEARD: HB 4051 A – Public hearing and work session

HB 4052 B – Public hearing and work session

HB 4059 A – Public hearing and work session

HB 4055 A – Public hearing and work session

HB 5091 B – Public hearing and work session

Introduction of Committee bills (LC 63) – Work session

HB 4054 B – Public hearing and work session

HB 4056 A – Public hearing and work session

These minutes are in compliance with Senate and House Rules. Only text enclosed in quotation marks reports a speaker’s exact words. For complete contents, please refer to the tapes.

TAPE/#	Speaker		Comments
TAPE 13, A
005		Chair Hannon	Calls the meeting to order at 10:21 a.m. Advises he will hold public hearings on several bills, and then conduct work sessions as amendments are completed.
010		Chair Hannon	Opens public hearing on HB 4051A.
HB 4051A – PUBLIC HEARING
015		Richard Yates	LRO. Presents overview of HB 4051A, which is the House cigarette tax increase. Refers to staff measure summary and revenue impact statement (EXHIBITS A, B).
055		Chair Hannon	Asks about earliest election for referral to voters.
060		Yates	Responds and explains time frame for scheduling election.
065		Chair Hannon	Inquires whether there could be an amendment adopted for a special election in January 2003.
070		Yates	Advises it is planned with another bill.
075		Sen. Nelson	Asks about proposed cessation program.
078		Yates	Explains.
080		Sen. Minnis	Asks about program increase.
085		Yates	Explains the counties are held harmless.
088		Paul Warner	LRO. Explains that the bonding section is in HB 4056, now being worked on by legislative counsel.
095		Mark Nelson	R. J. Reynolds Tobacco. Testifies in opposition to cigarette tax. Recommends using existing revenue for bond proposals. Submits proposed -A13 and -A15 amendments dated 6-15-02 (EXHIBITS C, D). Discusses options.
145		Sen. Nelson	Notes that indication from LRO is that it was not possible to use existing revenues.
150		M. Nelson	Discusses bond funding.
185		Richard Kosesan	Defers to Mr. Nelson’s testimony.
190		Scott Gallant	Oregon Medical Association (OMA). Testifies in favor of bill and of tax on tobacco. Asserts that the issue includes revenue sources and public health issue, because smoking significantly impacts costs to health care, especially Oregon Health Plan (OHP). Testifies in opposition to -A15 amendments. Recommends adopting a proposal to be voted on in November 2002.
230		Bruce Bishop	Oregon Association of Hospitals and Health Systems. Testifies in support of tax increase and referral to voters. Recommends using funds to restore programs in OHP.
240		Yates	Notes that HB 4051A has a sunset of 1-1-08 but the draft does not have sunset.
245		Sen. Nelson	Asks about a November election.
250		Chair Hannon	Advises the bill is structured to be voted on without referral. If referred, a different bill sets up an election.
260		Gallant	Defers analysis until he reviews time frame.
270		Sen. Minnis	Asks about structure of bill and referral for special election in September.
275		Gallant	Expresses concern by OMA that voting in a special election means the public is not as engaged as in a general election.
295		Mark Bigger	Sen. Gary George’s office. Discusses amendment regarding smoking cessation programs. Expresses concern over DHS sponsorship of events of some local groups with smoking cessation program dollars. Submits written testimony (EXHIBIT E).
360		Sen. Nelson	Asks whether amendment limiting funding to statewide programs would effectively stop misuse of funds.
370		Yates	Responds.
375		Sen. Minnis	Asks for input from smoking cessation program representatives.
390		Nancy Bennett	American Cancer Society. Advocates use of tobacco tax funds for prevention programs, and tying tax to specific programs, such as OHP or youth smoking prevention programs.
430		John Valley	American Cancer Society. Discusses allocation to Basic Rights Oregon. Advises the Governor’s Tobacco Reduction Advisory Committee monitors progress of tobacco prevention education program.
TAPE 14, A
030		Sen. Minnis	Asks if the American Cancer Society is a beneficiary of the moneys.
032		Valley	Answers no.
035		Sen. Minnis	Inquires whether the program is audited.
038		Valley	Responds and describes audits done previously.
045		Bennett	Notes that Oregon has a leading program in the USA.
053		Sen. Minnis	Agrees the money should be used appropriately.
060		J. L. Wilson	National Federation of Independent Business (NFIB). Testifies in opposition because it is a barrier to profitability for small business.
070		Sen. Gordly	Comments on use of tobacco cessation dollars by Basic Rights Oregon and asks that they be invited to present testimony.
080		Chair Hannon	Closes public hearing on HB 4051A. Opens public hearing on HB 4052B.
HB 4052B – PUBLIC HEARING
105		Warner	LRO. Presents overview of bill, which implements HJR 80 and creates the Education Stability Fund. Continues discussion of details.
120		Chair Hannon	Asks what amount is in HJR 80.
125		Warner	Responds the House version is $180 million, and the Senate version is $220 million.
130		Chair Hannon	Clarifies this plan would set that figure at $150 million.
132		Warner	Affirms.
140		Sen. Courtney	Asks about date in September.
147		Warner	Responds it is September 17.
151		Chair Hannon	Asks for testimony on HB 4052B.
160		Kate Richardson	State Treasurer’s office. Testifies in favor.
170		Chair Hannon	Seeing no further request for testimony, closes public hearing on HB 4052B. Opens public hearing on HB 4059A.
HB 4059A – PUBLIC HEARING
175		Warner	Presents overview of HB 4059A, which relates to election procedures.
205		Chair Hannon	Asks for testimony. Seeing none, closes public hearing on HB 4059A. Opens public hearing on HB 4055A.
HB 4055A – PUBLIC HEARING
228		Rick Olsen	LFO. Presents overview of bill, which contains omnibus program changes. Advises that amendments are in process and describes amendments.
250		Sen. Courtney	Asks whether the bill eliminates the management salary cost of living adjustment.
255		Olsen	Responds that is not included in the amendments to this bill.
260		Lisa Trussell	Associated Oregon Industries (AOI). Expresses concern about taking money from the Supplemental Employment Department Administrative Fund (SEDAF) and transferring it to the General Fund.
275		Ozzie Rose	Confederation of Oregon School Administrators. Has no objection to the proposed action in the bill, though opposes cuts in general.
300		Chair Hannon	Seeing no further testimony, closes public hearing on HB 4055A. Opens public hearing on HB 5091B.
HB 5091B – PUBLIC HEARING
TAPE 13, B
005		Ken Rocco	LFO. Presents overview of HB 5091B, omnibus disappropriations bill. Submits written overview of HB 5091B (EXHIBITS F, G).
015		Chair Hannon	Invites testimony. Seeing none, asks Mr. Rocco to review changes between House and Senate versions.
020		Rocco	Discusses.
045		Gordon Fultz	Association of Oregon Counties (AOC). Expresses concern over reduction to the Juvenile Crime Prevention grants to counties.
050		Rocco	Explains reduction.
055		Larry Niswender	LFO. Discusses reduction.
063		Fultz	Responds and expresses concerns.
070		Paul Snider	AOC. Explains impact on SB 1145 programs. Submits written materials (EXHIBIT H).
090		Don Schellenberg	Oregon Farm Bureau Federation. Testifies in opposition to reduction for Department of Agriculture budget and elimination of international marketers for agricultural products.
105		Chuck Craig	Oregon Department of Agriculture. Testifies in opposition to cut to federal grant money.
110		Sen. Courtney	Asks if the agency prefers across-the-board cuts.
115		Craig	Explains the agency wants flexibility to cut elsewhere because this is a program funded by federal grant money and represents a solution to the current economic problems.
130		Rocco	Explains difference between earlier cut and this reduction.
140		Chair Hannon	Offers the Department flexibility to cut where it chooses.
155		Matt Blevins	Oregon Environmental Council. Concern over timing of release of funds for the Pesticide Use Reporting System (PURS). Requests $160,000 to last until the September Emergency Board meeting.
170		Rocco	Explains the House plan did make the $160,000 appropriation.
180		Grattan Kerans	Oregon University System (OUS).
185		Chair Hannon	Asks about impact of salary reduction package in an attempt to avoid tuition increases.
190		Sen. Courtney	Refers to Senate proposal (EXHIBIT G).
205		Rocco	Explains $25 million of $100 million would not be allocated to agencies, but other cuts would be reduced.
215		Steve Bender	LFO. Explains allocation of $75 million for statewide salary compensation instead of $100 million. This would have reduced OUS’s allocation by $5.5 million. The proposed plan restores $2.3 million, so reduction is only $3.2 million.
230		Kerans	Responds the pro rata cut is acceptable to OUS.
235		Sen. Courtney	Asks about undergraduate tuition.
240		Kerans	Advises he will urge the State Board of Higher Education to absorb cuts in other ways than undergraduate resident tuition increases.
260		Sen. Courtney	Discusses tuition increases with various reduction packages.
290		Bender	Describes possible 2% increase above 3% currently scheduled. Discusses other increases in response to House budget reductions.
310		Sen. Courtney	Comments on hardship to students due to tuition increases.
312		Kerans	Comments how the cuts will be addressed. Advises this does not protect other classes of students from tuition increases.
340		Sen. Courtney	Discusses further.
350		Sen. Gordly	Asks for LFO to clarify SB 1145 impacts.
355		Niswender	Explains impact on community corrections removes half the available inflation above Corrections Department level.
370		Sen. Courtney	Asks about 2001 session impacts on SB 1145 program.
375		Niswender	Explains it was approximately $195 million in community corrections grants.
380		Sen. Courtney	Asks about legislature’s commitment to counties under SB 1145.
385		Sen. Minnis	Explains the structure leaves dollar amount flexible.
405		Niswender	Clarifies details of plan, formula and funding; which is still above the state’s responsibility level, including inflation.
TAPE 14, B
005		Sen. Courtney	Asks about changes during 2002 special sessions.
008		Niswender	Explains details of appropriation.
010		Sen. Courtney	Asks about laying off troopers from State Police.
020		Niswender	Discusses specific cuts, including layoffs which will trickle down to field staff. Advises the Department has asked for flexibility to spread reduction among several categories of its general fund budget.
050		Sen. Minnis	Clarifies the positions are management positions, not patrol troopers.
070		Sen. Minnis	Asks about specific FTE authority.
073		Niswender	Explains 3.5 FTE specifically are targeted.
075		Chair Hannon	Asks if the Committee can direct Department to make reductions in specific areas.
080		Niswender	Responds the appropriation is at a Division level for line items.
085		Chair Hannon	Inquires whether positions are patrolmen.
090		Niswender	Advises there are bumping rights.
095		Sen. Minnis	Explains seniority rights.
100		Niswender	Continues clarification.
110		Bill Linden	Oregon Judges Association. Testifies in opposition to elimination of salary increases for judges. Submits written testimony (EXHIBIT I).
130		Chair Hannon	Discusses.
150		Sen. Minnis	Clarifies whether the provision delays or repeals the increase.
155		Rocco	Clarifies further the bill provides for eliminating the increase, and the next legislative assembly will decide whether to reinstate it.
175		Mary Botkin	American Federation of State, County and Municipal Employees (AFSCME). Agrees that the committee should not give OSP authority for across-the-board cuts at its discretion.
220		Chair Hannon	Assures the legislature will be monitoring reductions.
240		Chair Hannon	Closes public hearing on HB 5091B. Opens work session for introduction of committee bills.
INTRODUCTION OF COMMITTEE BILLS (LC 63) – WORK SESSION
245		Rocco	Presents overview of LC 63 (EXHIBIT J), which allows legislative approval of an annexation in Hood River and Wasco Counties for the Columbia Gorge Community College district.
255		Chair Hannon	Moves LC 63 be introduced as a committee bill. Without objection, the motion is approved.
265		Chair Hannon	Recesses the committee at noon, to reconvene at 1:30 p.m.
270		Chair Hannon	Re-convenes meeting at 2:07 p.m. Opens public hearing on HB 4054B.
HB 4054B – PUBLIC HEARING
275		Lizbeth Martin-Mahar	LRO. Presents overview of HB 4054B, which phases in effectiveness of Measure 88, the federal income tax deduction. Presents -B13 amendments dated 6-26-02 (EXHIBIT K). Refers to staff measure summary, revenue impact statement, and graph of revenue change (EXHIBITS L, M, N).
330		Joe Schweinhart	AOI. Testifies in opposition because the voters have spoken and this represents an economic stimulus.
350		J. L. Wilson	Returns and testifies in opposition. Suggests this is one of only a few tools available to reverse reduction of tax base.
360		Chair Hannon	Asks if his association would support the disconnect instead.
365		Schweinhart	Responds both are needed and it is not a trade-off.
370		Chair Hannon	Discusses securitization of the reserve fund in SAIF.
372		Wilson	Disagrees because the private sector is paying and has led the way in experiencing the recession.
390		Schweinhart	Responds further the economy is still sluggish and needs to grow.
TAPE 15, A
005		Ralph Groener	AFSCME. Differs from AOI and NFIB and testifies in support. Discusses possible measures to stimulate the economy and fund K-12 and service programs. Disagrees with giving personal income taxes to citizens to stimulate economy.
085		Chair Hannon	Closes public hearing on HB 4054B.
087		Sen. Gordly	Submits letter for the record from Basic Rights Oregon (EXHIBIT O).
095		Chair Hannon	Recess the committee at 2:22 p.m. Reconvenes the meeting at 2:30 p.m. Opens Work session 4054B.
HB 4054B – WORK SESSION
100		Warner	LFO. Reviews bill and proposed -B13 amendments dated 6-26-02 (EXHIBIT K).
115		Sen. Minnis	MOTION: Moves to ADOPT HB 4054B-13 amendments dated 6/26/02.
120		Chair Hannon	Over the objections of Sen. Gordly and Sen. Courtney, the motion CARRIES.
125		Chair Hannon	Closes work session on HB 4054B. Opens public hearing and work session on HB 4056A.
HB 4056A – PUBLIC HEARING
135		Yates	LRO. Presents overview of bill and proposed -A4 amendments dated 6-26-02 (EXHIBIT P) which replace A-engrossed bill and provide for bonds backed by cigarette tax revenues.
155		Chair Hannon	Confirms subject of bill and details.
160		Sen. Courtney	Asks if this is a separate piece of legislation from the cigarette tax.
165		Yates	Confirms and explains these moneys go into the State School Fund consistent with the relating clause.
175		Sen. Courtney	Asks Sen. Minnis if this requires 16 votes, where revenue source bill requires 18 votes.
180		Sen. Minnis	Confirms.
185		Sen. Courtney	Asks whether the cigarette tax bill needs language to make sure the two match.
190		Sen. Minnis	Suggests adding language to cigarette tax bill making it contingent on passage of this bill.
195		Sen. Courtney	Asks to make sure the cigarette tax can be used to pay for the bond.
200		Sen. Minnis	Requests input from Treasurer’s office.
205		Yates	Clarifies the revenue pledged is from all cigarette taxes under current chapter.
210		Sen. Minnis	Clarifies not tied only to the revenue from a tax increase.
215		Sen. Courtney	Confirms whether the entire tax will support this bonding authority.
225		Yates	Responds yes.
227		Kate Richardson	Treasurer’s office. Returns to suggest change in language of -A4 amendments to say not less than six years instead of five years. Adds clarification regarding existing and additional cigarette tax, that the bill is pledging current and any subsequent tax to back the bonds.
250		Gallant	Returns to testify and raise concerns over obligating all tobacco tax funds as collateral for future deficits, because it would be a major policy change for use of tobacco tax funds.
270		Yates	Disagrees and explains.
290		Harrison Conley	Legislative Counsel Office. Points out language asking the Treasurer to look at revenue forecasts for this biennium only. Explains bonds once issued remain a contract but the only “deficit” to be considered is the 2001-03 biennium.
310		Yates	Points out another reference to limitation for issuing bonds during the current biennium only.
315		Gallant	Suggests this is still a policy change, and it is borrowing from estimated revenues.
325		Sen. Minnis	Responds.
335		Chair Hannon	Closes public hearing on HB 4056A. Opens work session on HB 4056A.
HB 4056A – WORK SESSION
340		Sen. Minnis	MOTION: Moves to ADOPT HB 4056A-A4 amendments dated 6-26-02, with the amendment on page 5 line 12 after the word “than” eliminating the word “five” and inserting the work “six” as suggested by the State Treasurer’s office.
360		Chair Hannon	Without objection the motion CARRIES. EXCUSED: 1 - Sen. Nelson.
370		Chair Hannon	Closes work session on HB 4056A. Recesses the committee at 2:55 p.m.
373		Chair Hannon	Reconvenes committee at 3:00 p.m. Opens work session HB 4051A.
HB 4051A – WORK SESSION
380		Yates	Presents overview of HB 4051A-A20 and -A21 amendments dated 6-26-01 (EXHIBITS Q, R). Discusses details of amendments.
TAPE 16, A
005		Yates	Continues discussing HB 4051A-A20 amendments.
040		Sen. Courtney	Clarifies the bill will generate $80 million for the current biennium, and $220 million during the 2003-05 biennium.
045		Yates	Responds.
050		Chair Hannon	MOTION: Moves to ADOPT HB 4051A-A21 amendments dated 6/26/02. Without objection the motion CARRIES. EXCUSED: 1 - Sen. Nelson
060		Sen. Courtney	Raises question of version of amendments adopted.
065		Chair Hannon	Reconvenes work session.
066		Sen. Courtney	MOTION: Moves to RECONSIDER MOTION by which HB 4051A-21 amendments were adopted.
070		Chair Hannon	Without objection, the motion CARRIES. EXCUSED: 1 - Sen. Nelson
075		Yates	Discusses.
085		Chair Hannon	Discusses reconsideration OF HB 4051 with -A21.
095		Sen. Minnis	MOTION: Moves to RESCIND ADOPTION of HB 4051A-21 amendments.
100		Chair Hannon	Without objection, the motion CARRIES. EXCUSED: 1 - Sen. Nelson.
105		Yates	Discusses HB 4051-A21 amendments, and clarifies differences. Points out reference on page 5, line 10, section 8, subsection 2, which does not exist in -A20 amendments. Explains Sen. Nelson’s amendment restricting use of funds for programs paid for by local governments.
115		Sen. Courtney	MOTION: Moves to ADOPT HB 4051A-21 amendments dated 6/26/02.
120		Sen. Gordly	Asks why there is different language in the two amendments.
125		Yates	Reviews issue raised by Sen. George’s staff today. Reads budget note given to Health Division during the 2001 session.
145		Chair Hannon	Without objection the motion CARRIES. EXCUSED: 1 - Sen. Nelson
150		Chair Hannon	Closes work session on HB 4051A. Recess at 3:15 p.m.
155		Chair Hannon	Reconvenes the committee at 3:25 p.m. Opens work session on HB 4055A.
HB 4055A – WORK SESSION
160		Olsen	LFO. Introduces HB 4055A-A7 amendments dated 6-26-02 (EXHIBIT S).
170		Chair Hannon	MOTION: Moves to ADOPT HB 4055A-7 amendments dated 6/26/02. Without objection the motion CARRIES. EXCUSED: 1 - Sen. Nelson
175		Chair Hannon	Closes work session on HB 4055A. Recesses the meeting at 3:28 p.m.
190		Chair Hannon	Reconvenes meeting at 4:00 p.m. Reopens work session on HB 4052B.
HB 4052B – WORK SESSION
195		Warner	Presents overview of HB 4052B, which contains implementing language for HJR 80. Reviews HB 4052B -B3 amendment dated 6-26-02 (EXHIBIT T).
210		Sen. Minnis	Explains.
230		Sen. Minnis	MOTION: Moves to ADOPT HB 4052B-B3 amendments dated 6/26/02. Without objection the motion is CARRIES. EXCUSED: 1 - Sen. Nelson
235		Chair Hannon	Closes work session on HB 4052B. Recesses the committee at 4:04 p.m.
240		Chair Hannon	Reconvenes meeting at 4:33 p.m. Recesses the committee until 7:30 p.m.
243		Chair Hannon	Reconvenes meeting at 7:30 p.m. Opens work session on HB 4059A.

HB 4059A – WORK SESSION
245	Adrienne Sexton	LFO. Presents overview of HB 4059A, which sets a special election in September 2002. Presents -A3 amendments dated 6-26-02 (EXHIBIT U). Discusses details of amendments.
265	Chair Hannon	MOTION: Moves to ADOPT HB 4059A-A3 amendments dated 6-26-02. Without objection the motion CARRIES.
275	Chair Hannon	MOTION: Moves HB 4059A to the floor with a DO PASS AS AMENDED recommendation.
		VOTE: 5-0
285	Chair Hannon	Hearing no objection, declares the motion CARRIED. SEN. HANNON will lead discussion on the floor.
290	Chair Hannon	Closes work session on HB 4059A. Reopens work session on HB 4051A.
HB 4051A – WORK SESSION
301	Chair Hannon	Notes that Sen. Nelson’s amendments were adopted earlier and asks him to answer questions.
315	Sen. Nelson	Explains intent of the amendments would be to direct moneys to statewide tobacco cessation programs rather than special interest groups for political purposes.
335	Sen. Gordly	Asks about purpose of amendment.
337	Sen. Nelson	Remarks there was some concern that this money was being used at the local level, not in a coordinated statewide effort.
345	Sen. Gordly	Asks whether by doing this, any federal funds are jeopardized.
350	Warner	Responds none.
355	Yates	Clarifies Mental Health had no objection to the bill and amendments; and assumes they considered federal fund implications.
360	Sen. Nelson	MOTION: Moves HB 4051A to the floor with a DO PASS AS AMENDED recommendation.
365		VOTE: 5-0
	Chair Hannon	Hearing no objection, declares the motion CARRIED. SEN. NELSON will lead discussion on the floor.
370	Chair Hannon	Closes work session on HB 4051A. Reopens work session on HB 4052B.
HB 4052B – WORK SESSION
375	Warner	Reviews bill, which is the implementing bill for HJR 80.
380	Chair Hannon	Recesses committee at 7:45 p.m.
390	Chair Hannon	Reconvenes committee at 9:00 p.m.
TAPE 15, B
010	Chair Hannon	MOTION: Moves HB 4052B to the floor with a DO PASS AS AMENDED recommendation.
015		VOTE: 4-0 EXCUSED: 1 - Sen. Nelson
	Chair Hannon	Hearing no objection, declares the motion CARRIED. SEN. COURTNEY will lead discussion on the floor.
020	Chair Hannon	Closes work session on HB 4052B. Reopens work session on HB 4054B.
HB 4054B – WORK SESSION
030	Sen. Minnis	MOTION: Moves to TABLE HB 4054B.
035		VOTE: 4-0 EXCUSED: 1 - Sen. Nelson
	Chair Hannon	Hearing no objection, declares the motion CARRIED.
040	Chair Hannon	Closes work session on HB 4054B. Reopens work session on HB 4056A.
HB 4056A – WORK SESSION
045	Warner	Reviews HB 4056A, which authorizes the Treasurer to issue bonds backed by future tobacco revenue.
050	Sen. Minnis	MOTION: Moves HB 4056A to the floor with a DO PASS AS AMENDED recommendation.
055		VOTE: 5-0
	Chair Hannon	Hearing no objection, declares the motion CARRIED. SEN. MINNIS will lead discussion on the floor.
060	Chair Hannon	Closes work session on HB 4056A. Reopens work session on HB 4055A.
HB 4055A – WORK SESSION
065	Chair Hannon	Advises need to adopt a conceptual amendment to remove $19 million of unemployment SEDAF funds from the bill.
070	Olsen	Recommends deleting sections 4 and 10 from the -A7 amendments dated 6-26-02.
075	Chair Hannon	MOTION: Sen. Hannon moves to amend the -A7 amendments to 4055A by deleting section 4 on page 2, beginning on line 22 and ending on line 24; and deleting section 10 on page 4, beginning on line 14 and ending on line 19. VOTE: 5-0 Hearing no objection, declares the motion CARRIED.
080	Chair Hannon	MOTION: Moves HB 4055A to the floor with a DO PASS AS AMENDED recommendation.
085		VOTE: 5-0
	Chair Hannon	Hearing no objection, declares the motion CARRIED. SEN. HANNON will lead discussion on the floor.
090	Chair Hannon	Closes work session on HB 4055A. Opens work session on HB 5091B.
HB 5091B – WORK SESSION
100	Rocco	Reviews updated list of selective program reductions (EXHIBIT V). Describes updates reflected in the HB 5091B-B7 amendments dated 6-26-02 (EXHIBIT W).
		Discussion of whether conceptual amendment is needed to reflect removal of SEDAF funds from the reduction list.
160	Sen. Courtney	Asks whether the budget is balanced with this bill.
165	Chair Hannon	Responds it is not balanced after removal of $19 million SEDAF reduction.
180	Sen. Minnis	Assumes $20 million ending balance.
195	Rocco	Clarifies it was originally $26 million, but after removing the $19 million there is a $7 million ending balance.
205	Chair Hannon	Submits proposed budget note for HB 5091B (EXHIBIT X). Refers to budget note in SB 5527 (2001) regarding copays, which was found to conflict with federal regulations. Recalls Grattan Kerans, OUS, to answer questions regarding possible tuition increases.
235	Kerans	Submits written testimony describing impact of budget cuts on higher education tuition (EXHIBIT Y).
280	Sen. Minnis	Questions Kerans about prior cuts.
305	Kerans	Responds and explains.
330	Chair Hannon	Moves to approve the proposed budget note on HB 5091B. VOTE: Hearing no objections, the budget note is APPROVED.
335	Sen. Minnis	MOTION: Moves to ADOPT HB 5091B-B7 amendments dated 6/26/02.
340	Chair Hannon	Hearing no objection, declares the motion CARRIED.
350	Sen. Minnis	MOTION: Moves HB 5091B to the floor with a DO PASS AS AMENDED recommendation.
355		VOTE: 5-0
	Chair Hannon	Hearing no objection, declares the motion CARRIED. SEN. HANNON will lead discussion on the floor.
360	Chair Hannon	Recesses committee until 9:30 p.m.
		NOTE: The committee did not reconvene and was adjourned by the adjournment of the Senate at the end of the session day.

Submitted By, Reviewed By,

Patricia Nielsen, Marjorie Taylor,

Committee Assistant Administrator

EXHIBIT SUMMARY

A – HB 4051A, measure summary, staff, 1 pp

B – HB 4051A, revenue impact statement, staff, 1 pp

C – HB 4051A, -A13 amendments dated 6-15-02, M. Nelson, 1 p

D – HB 4051A, -A15 amendments dated 6-15-02, M. Nelson, 1 p

E – HB 4051A, written testimony, M. Bigger/Sen. George, 8 pp

F – HB 5091B, proposed selective program reductions, staff, 4 pp

G – HB 5091B, Senate proposal, staff, 1 p

H – HB 5091B, written testimony, P. Snider, 5 pp

I – HB 5091B, written testimony, B. Linden, 2 pp

J – LC 63, staff, 1 p

K – HB 4054B, -B13 amendments dated 6-26-02, staff, 9 pp

L – HB 4054-B13, staff measure summary, staff, 1 pp

M – HB 4054-B13, revenue impact statement, staff, 1 p

N – HB 4054-B13, revenue change graph, staff, 1 p

O – HB 4051A, written testimony, R. Thorpe, 1 p

P – HB 4056A, -A4 amendments dated 6-26-02, staff, 10 pp

Q – HB 4051A, -A20 amendments dated 6-26-02, staff, 6 pp

R – HB 4051A, -A21 amendments dated 6-26-02, staff, 6 pp

S – HB 4055A, -A7 amendments dated 6-26-02, staff, 7 pp

T – HB 4052B, -B3 amendments dated 6-26-02, staff, 1 p

U – HB 4059A, -A3 amendments dated 6-26-02, staff, 6 pp

V – HB 5091B, proposed selective program reductions (updated), staff, 4 pp

W – HB 5091B, -B7 amendments dated 6-26-02, staff, 28 pp

X – HB 5091B, proposed budget note, Sen. Hannon, 1 p

Y – HB 5091B, written testimony, G. Kerans, 1 p