Shannon Dow, Majority Assistant Research Analyst, House of Representatives, explained the
proposed amendment, which addresses the definition of violent crimes, and includes an emergency
clause (Attachment 4).
(Tape 1, Side B)
H.B. 2082 - state funds; appropriation - HELD
Representative Bob Burns, sponsor of H.B. 2082, urged support for this bill in its present form. He
explained that this legislation will move nonappropriated funds that do not have oversight as
required by the Legislature into appropriated status.
Lorenzo Martinez, Analyst, Joint Legislative Budget Committee (JLBC), explained that the total
amount of funds involved in this move from nonappropriated status to appropriated status is $326
million. He added that this legislation will make the affected entities participate in the budget
process.
Mr. Smith asked if changes can be made to an agency's request for funds, to which Mr. Martinez
answered affirmatively. He said that depending on projections, the budget recommendation can be
changed.
Mr. Smith questioned what the procedure would be for an agency to ensure that its budget request
is not changed. Mr. Martinez replied that the agency could talk to individual legislators and lobby
for the requested amount.
Mr. Smith asked Mr. Martinez if the reason for this change is due to problems with the handling of
money. Mr. Martinez said that he is not aware of any such problems; this legislation merely
increases legislative oversight of state funds and operating costs that the Legislature does not have
formal review over.
Mrs. Lynch asked if the monies that will be subject to legislative appropriation are from the general
fund or from tax dollars. Mr. Martinez replied that they are not monies from the general fund; they could be monies from fines, fees, contributions, etc. They are monies collected from citizens of the
state but not under the general definition of taxes.
Mrs. Gerard asked for confirmation that this legislation only affects administrative accounts and not
rates. Mr. Martinez concurred.
Mrs. Gerard surmised that an agency could spend every penny in an account in a fiscal year and not
be accountable to anyone but its supervisor. Mr. Martinez replied that it has been found that the
agencies typically to not spend all of their funds, and most have a fairly predictible pattern of
expenditures; however, bringing them into the budget process will increase legislative oversight.
Mrs. Gerard expressed her feeling that this legislation is increasing micro managing.
Mrs. Johnson questioned what is done with excess funds over the amount requested. Mr. Martinez
responded that excess monies stay in the agency's fund and do not revert to the general fund.
Mrs. Lynch asked Mr. Martinez to address why cities and towns are concerned with this bill. Mr.
Martinez said that one concern is that the Legislature would be able to divert money from these
funds, which it cannot, and another concern is with the removal of flexibility. He said that he is not
aware of any other concerns.
Rick Romley, Maricopa County Attorney, expressed opposition to H.B. 2082. He said that he has
had no problems with the administration of monies in the Criminal Justice Enhancement Fund. He
agreed that those monies should have oversight, but submitted that they already do because the
Attorney General can be asked to conduct an audit of how those monies are spent, and the formula
for where they should be spent is debated every year in the Legislature. He repeated that oversight
is critical, but said that the best people to determine how to spend criminal justice money are the
people in criminal justice. He asserted that the current system is working well and there has been
no record of impropriety.
Dennis Garrett, Police Chief, Phoenix Police Department, spoke in opposition to H.B. 2082 and the
loss of flexibility of where monies should be spent in police training. He submitted that this bill is
going in the wrong direction and the Legislature should not try to fix something that is not broken.
Jack Cross, Administrator, Public Safety Personnel Retirement System; Elected Officials Retirement
System; Corrections Officers Retirement Plan, expressed opposition to H.B. 2082 on the basis that
the retirement systems he represents have a responsibility to the members who contribute to them,
whereas the Legislature would not have the same fiduciary responsibility for these funds. He noted
that in the eleven years he has been the administrator of these funds, costs have risen slower than
inflation, and said that he knows of no other record like that. He added that because of superior investment performance and by managing the money themselves, these organizations have been able
to save between $3 million and $3.5 million per year. This has resulted in a decline in the average
employer contribution rate to 6.36% for next year. Mr. Cross submitted, however, that requiring
these organizations to go through the budget process will increase costs.
Mr. Smith pointed out that H.B. 2082 does not have any effect on investment of funds; it only
addresses administrative costs. He questioned how this could adversely impact the functioning of
the retirement systems Mr. Cross represents. Mr. Cross replied that this bill would require them to
buy new equipment to manage the funds or obtain outside advisors.
Mr. Smith announced that because it is obvious that everyone opposed to H.B. 2082 is from law
enforcement agencies, he will hold the bill in an attempt to determine which agencies, if any, should
be included among those needing oversight. He added that if nothing can be worked out, the bill will
not be heard again.
H.B. 2083 - state funds; consolidation and elimination - DO PASS
Lorenzo Martinez, Analyst, Joint Legislative Budget Committee (JLBC), explained the intent of
H.B. 2083, which contains technical and conforming changes by consolidating 22 funds and
eliminating 37 funds which are inactive, duplicative, or for which statutory authority has already
been repealed.
Ben C. Hill, Jr., Interim Executive Director, Arizona Historical Society, Tucson, spoke against a
small part of the bill. He explained that the Arizona Historical Society runs four main museums and
two branches with an annual budget of $6 million, of which 72 percent is appropriated and 28
percent is money raised by the Society. Mr. Hill said that he is concerned with the proposed change
to statute on lines 39 through 43 on page 13 and line 4 on page 14. Existing statute states that the
treasurer of the Board of Directors of the Arizona Historical Society shall have custody of the
nonappropriated monies while the new wording states that all monies, both appropriated and
nonappropriated, will be held by the State Treasurer.
Mrs. Gerard questioned the source of nonappropriated funds. Mr. Hill replied these funds would
come from donations, contributions and monies raised by the Society.
Mr. Hill commented that last year, the Society had a breakdown in its accounting system. The fault
was not with either the hardware or the software, but with human error and errors in management.
He said that the people responsible for this very serious breakdown are now gone and there is a new
financial team in place, as well as an upgraded computer system, and all of the data that had to be
input will be current by the end of the month. Mr. Hill argued that this bill will compound the
difficulty of proceeding with the Society's financial operations, as well as put the monies the Society raises itself under state control. This takes the control of those monies out of the hands of the
Society's elected board of directors and the administrative staff, creates an obstacle in performing
day-to-day operations and hinders its flexibility. He urged the Committee not to defeat the bill, but
to strike the proposed changes which severely limit the Society's operational ability.
Mr. Smith asked Mr. Hill whether the financial problems the Society experienced last year would
have been prevented if this bill had been in effect. Mr. Hill said that they would not; the problems
were with management; and with the same players, this bill would not have made a difference.
(TAPE 2, SIDE A)
Mrs. Lynch asked Mr. Hill if he thinks contributors, knowing that their contributions have legislative
oversight, would contribute less than they currently do. Mr. Hill replied that the almost immediate
reaction from everyone has been that this bill will affect donations.
Mr. Smith asked Mr. Martinez if the Arizona Historical Society's financial difficulties would have
been avoided if their money had been under the supervision of the Legislature. Mr. Martinez
answered affirmatively, adding that those problems would have been avoided if the Society had been
using the state accounting system. He advised that only appropriated funds will be within the
system; nonappropriated funds will still be under the control of the Society's Board of Directors.
Ms. Aguirre asked if the state treasurer can deny a warrant. Mr. Martinez replied that if no funds
are available, then the warrant cannot be honored; however, the treasurer cannot make a
determination of whether an expense is appropriate.
Mrs. Lynch expressed puzzlement as to why these funds have to go to the state treasurer. Mr.
Martinez explained that the reason is to ensure that financial data is accurate and reliable.
Mrs. Gonzales asked if the state computer system is fallible. Mr. Martinez responded that, to date,
there have been no problems.
Mr. Smith asked Mr. Hill to meet with Kathi Knox to work out an amendment to address the
concerns of the Arizona Historical Society before the bill goes to the floor.
H.B. 2507 - centralization; fingerprinting requirements - DO PASS
Kathi Knox, Majority Research Analyst, House of Representatives, explained the intent of the bill,
as contained in the bill summary (Attachment 7).
Mrs. Lynch asked why it is necessary to fingerprint recipients of federal child care food program
monies.
Marti Lavis, Legislative Liaison, Arizona Department of Health Services (DHS), explained that the
food and nutrition program is served in homes with children.
Mrs. Gerard further explained that this program is run by the Department of Education. It is a
separate child care category which serves lunch and snacks to children. She added that while this
bill is not perfect, it is a beginning to consolidating services and paperwork and is a really good bill.
She said, too, that even with the appropriation this bill will save money in the long run and create
a more efficient system.
Maria Hoffman, Executive Director, Arizona Council of Centers for Children, expressed her
gratitude to the people who worked on this bill. She agreed that this is not a perfect bill, but said it
is a start. She added that next year, she would like to have Department of Education certification,
and fingerprinting of foster parents included.
Paul Hallams, Captain, Tucson Police Department, mentioned the large numbers of fingerprints processed every day and the backlogs that occur. He said the turnaround time for processing is
currently between four and six weeks; however, the FBI is working on new technology to improve
this time to 24 hours in 1999.
Ms. Knox explained that the proposed amendement (Attachment 8), corrects an oversight.
H.B. 2417 - DPS; fingerprint fee - DO PASS
Shannon Dow, Majority Assistant Research Analyst, explained the intent of the bill, as contained
in the bill summary (Attachment 10).
H.B. 2077 - compulsive gambling commission - DO PASS
Shannon Dow, Majority Assistant Research Analyst, explained the intent of the bill, as contained
in the bill summary (Attachment 12).
Representative Mark Anderson, sponsor of H.B. 2077, stressed the need to pass this legislation to
help people who have gambling addictions. He noted that the commission will be funded with
unclaimed prize monies from the state lottery and matching contributions from other sources, and
opined that once this program gets started, the appropriation can probably be reduced.
Ms. Aguirre asked what would happen if there is no unclaimed prize money. Mr. Anderson assured
Ms. Aguirre that projections are that this will be a significant amount of money.
Frank Chon, Director of Administration, Arizona Lottery, stated that the Arizona Lottery supports
the purpose and intent of this bill, but has a problem with the funding source because the unclaimed
prize money is an important part of the sales and strategy of the fund, among which is the guarantee
of the $1 million jackpot. He advised, however, that when someone wins the $1 million jackpot, the
Lottery is about $400,000 short. Mr. Chon said that the Lottery also uses the unclaimed prize money
to fund some of the games, such as Scratcher, Bingo and Cash for Life. He pointed out that
$200,000 may not seem like a lot of money, but this amount generates about $6 million in lottery
sales. He said that he is very concerned that this bill is sending a signal to other people looking for
money sources that unclaimed prize money is fair game, when, in fact, it is not. He urged the
Committee to consider the concerns he has voiced.
Mr. Smith stated his opinion that if gambling is causing the problem of addiction, then gambling
should pay for the relief of that problem.
Mrs. Johnson questioned whether any of the monies in the unclaimed prize fund are used for
advertising. Mr. Chon said, no, they are only used for prizes to players and 30 percent to CASA
(Court Appointed Special Advocate).
Mr. Cheuvront asked Mr. Chon if he is saying that with less money the Lottery will have less sales.
Mr. Chon replied affirmatively.
Mr. Cheuvront proposed that this could be a way for people opposed to gambling to affect the
Lottery. Mr. Chon again replied affirmatively.
Don Hulen, Executive Director, Arizona Council on Compulsive Gambling, advised that a federal
commission on compulsive gambling is conducting a study on this issue. He said that by comparing
Arizona's demographics to other states' it can be assumed that 1.5 percent of Arizona's adult
population is addicted to gambling. That equates to about 45,000 people, or 1/8th of the state's
population being negatively impacted by this disorder. He said that since Indian gaming started, the
casinos have begun addressing this problem. Mr. Hulen said that he is in support of H.B. 2077.
Mrs. Lynch questioned if there are secondary problems like domestic violence and poverty
associated with gambling addiction, and asked Mr. Hulen if there are plans to expand the compulsive
gambling commission to include these issues. Mr. Hulen answered that these will be included as
funds become available.
H.B. 2146 - medical records; release - DO PASS AMENDED
Rebecca Baker, Majority Intern, explained the intent of H.B. 2146, as contained in the bill summary
(Attachment 14).
Mrs. Gerard, sponsor of H.B. 2146, explained that this is a clean-up bill to previous legislation
dealing with medical records confidentiality and a person's ability to gain access to their own
medical records. This bill will make that legislation more workable.
Mr. Carruthers explained that the proposed amendment (Attachment 15) amends the definition of
a health care provider.
H. B. 2403 - commission fund; distribution - DO PASS
Shannon Dow, Majority Assistant Research Analyst, explained the intent of H.B. 2403, as contained
in the bill summary (Attachment 17).
Rex M. Holgerson, Executive Director, Arizona Criminal Justice Commission, urged support for H.B. 2403. He submitted that the increased allocation of money to the Peace Officers Training Fund
Mr. Smith read the following names in support of H.B. 2403:
The meeting adjourned at 11:25 a.m.
_______________________________
Carolyn Richter, Committee Secretary
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