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[Dome]Interim Calendar and Briefing

October 16, 1996

Contents:
Calendar of Scheduled Meetings
Agenda Information Regarding Scheduled Meetings
BRIEFINGS - Information Regarding Recent Meetings

Calendar of Scheduled Meetings

Monday, October 21, 1996
DHS Restructuring Task Force -
10:00 a.m., Room 116
Tuesday, November 12, 1996
Administrative Rules Review Committee -
10:00 a.m., Room 22
Wednesday, November 13, 1996
Administrative Rules Review Committee -
9:00 a.m., Room 22
Monday, November 18, 1996
Solid Waste Reduction and Recycling Study Committee - (TENTATIVE) -
10:00 a.m., Room 22
Tuesday, November 19, 1996
Hedge to Arrive Contracts Study Committee - (TENTATIVE) -
10:00 a.m., Room 334, Vocational Technical Building, Iowa Central Community College, Fort Dodge, IA
Wednesday, November 20, 1996
Local Infrastructure Needs Study Committee - (TENTATIVE) -
Time and Location to be Announced
Thursday, November 21, 1996
Interpretive Services Study Committee -
10:00 a.m., Room 118
Friday, November 22, 1996
Iowa Administrative Procedures Study Committee - (TENTATIVE) -
10:00 a.m., Room 22

Agenda Information Regarding Scheduled Meetings

DHS Restructuring Task Force

Temporary Co-chairperson: Senator Johnie Hammond
Temporary Co-chairperson: Representative Hubert Houser

Administrative Rules Review Committee

Co-chairperson: Senator Berl E. Priebe
Co-chairperson: Representative Janet Metcalf

Solid Waste Reduction and Recycling Study Committee (Tentative)

Temporary Co-chairperson: Senator Patrick J. Deluhery
Temporary Co-chairperson: Representative Clyde Bradley

Hedge to Arrive Contracts Study Committee (Tentative)

Temporary Co-chairperson: Senator John P. Kibbie
Temporary Co-chairperson: Representative Russell Teig

Solid Waste Reduction and Recycling Study Committee (Tentative)

Temporary Co-chairperson: Senator Larry Murphy
Temporary Co-chairperson: Representative Barry Brauns

Interpretive Services Study Committee

Temporary Co-chairperson: Senator Elaine Szymoniak
Temporary Co-chairperson: Representative Joseph Kremer

Iowa Administrative Procedures Study Committee (Tentative)

Temporary Co-chairperson: Senator Tom Vilsack
Temporary Co-chairperson: Representative Janet Metcalf

BRIEFINGS - Information Regarding Recent Meetings

GOVERNOR'S COMMITTEE ON GOVERNMENT SPENDING REFORM

September 26, 1996

Background.
The first iteration of this committee operated in the summer and fall of 1991 and made a number of recommendations to the Governor concerning state and local government budget and operating practices. The Governor requested Mr. David Fisher, the original chair to again serve and many of the original members were reappointed.
Issues.
During the Chairperson's report, Mr. David Fisher listed a number of issues which were identified. He added that these will be reported to Governor Branstad as potential study topics for the future. The issues are as follows:

Mr. Bill Vernon added two additional issues: Multi-Year Vehicle Licenses and Collective Bargaining.

Infrastructure Subcommittee Report.
Mr. Ed Hansell, Co-chairperson of the Infrastructure Subcommittee, presented the discussion of the members at its first two meetings. At this point, he stated that the Subcommittee plans to recommend policy options for expenditure of moneys deposited in the Rebuild Iowa Infrastructure Fund (RIIF), revision of definitions, creation of new definitions, development of a facilities audit, and maintaining a focus upon state assets, not local infrastructure.
Budgeting Practices Workgroup.
Mr. Bill Vernon, Co-chairperson of the Workgroup, declared that options being considered by the Workgroup involve the Governor including as part of the budget a four-year financial projection of anticipated General Fund revenues, expenditures, and annual operating surplus or deficit; the University of Iowa Institute for Economic Research providing five-year economic and revenue projections; the General Assembly publishing a list at the end of session of spending commitments that create an "automatic" increase during the subsequent year with the projected dollar amounts; and the possible move by the state to biennial budgeting beginning with the smaller agencies without histories of supplemental appropriations.

GOVERNOR'S COMMITTEE ON GOVERNMENT SPENDING REFORM: BUDGETING PRACTICES WORKGROUP

October 8, 1996

Overview.
The Budgeting Practices Workgroup developed its final recommendations to submit to the Governor's Committee on Government Spending Reform.
Recommendations.
The recommendations include the following:
  1. In addition to the budget year, the Governor should submit as part of the Governor's budget a four-year financial projection of anticipated General Fund revenues, expenditures, and annual operating surplus or deficit including the University of Iowa Institute for Economic Research's projections for the next five years of revenues and economic data.
  2. Three days prior to and at the actual end of the legislative session, the General Assembly should publish an itemized list of all spending commitments, including dollar amounts, that create an "automatic" increase during the subsequent year. The Governor's budget request would also be required to give a similar assessment.
  3. The General Assembly should publish a statement of the estimated financial condition for the year following the budget year which includes the spending commitments listed above.
  4. In order to test the concept of biennial budgeting in Iowa, the state should move toward biennial budgeting in an incremental manner as follows: by starting with FY 1997-1998 for the budgets of the smaller agencies with no history of supplemental funding and relatively stable funding, and which are most advanced in budgeting for results. Success would be monitored with the eventual goal of all agencies on a biennial budgeting basis by FY 2001-2002.
    • Capital budgeting should be moved to a biennial basis.
    • An overall spending target should be established for the second year of the biennium.
  5. The role of a new information technology services agency in the budgeting process should be enhanced by providing a checklist approach for agency-specific requests to assure that enterprise-wide standards are being followed and that opportunities for joint development with other agencies have been explored; and by providing a prioritization and sometimes advocacy responsibility for large multi-agency projects or projects with multi-agency impact.
  6. In regard to the large multi-agency projects or projects with multi-agency impact the following should be considered:
    • Review and prioritization should be done by a review team consisting of key cabinet level directors and the budget director.
    • The General Assembly should consider establishing a joint subcommittee on appropriations dedicated specifically to multi-agency projects.
    • Establishment of a dedicated funding source for multi-agency projects should be considered.

GOVERNOR'S COMMITTEE ON SPENDING REFORM: INFRASTRUCTURE SUBCOMMITTEE

October 9, 1996

Background.
The Infrastructure Subcommittee of the Governor's Committee on Spending Reform held its third meeting. The charge of the Subcommittee is as follows:
Issues.
The Subcommittee on Infrastructure met to review and finalize its report the Governor's Committee on Government Spending Reform. The draft report reviewed by the Subcommittee was prepared by William Dikis, a member of the Subcommittee.
Review Topics.
The Subcommittee reviewed the proposed amendments to the Rebuild Iowa Infrastructure Fund legislation (1996 Iowa Act, chapter 1218, secs. 25 and 26) and the definitions of vertical and horizontal infrastructure, repair and replacement, maintenance, deferred maintenance, renovations, emergency repair and replacement, and new construction, and related terminology.
The Subcommittee also discussed the structure and authority of the public entity needed to monitor and regulate the required infrastructure projects, the process for selecting and prioritizing projects, the collection of asset inventory data, and the reporting of maintenance and repair information.
Recommendations.
The following list of recommendations are those considered by the Subcommittee at this last meeting. The proposed recommendations may be modified in the final report. The proposed recommmendations of the Subcommittee are as follows:
  1. Establish a comprehensive, centralized, vertical infrastructure asset inventory data base of all state vertical infrastructure.
  2. Establish a capital asset management program including the use of facility audits.
  3. Establish a priority system for the infrastructure projects to be funded from the Rebuild Iowa Infrastructure Fund (RIIF). The State Board of Regents shall establish a priority system for its institutions.
  4. Provide for a system of historic preservation.
  5. Require state agency operating budgets to cover routine and preventive maintenance at a minimum level of 1.5 percent of replacement value of a facility and a minimum of 3.5 percent of replacement value for repair and replacement of finishes, systems, equipment, and property over the design life of the facility.
  6. When new construction is proposed, require a statement of projection and committment of operations costs, including maintenance, repair, and replacement funding.
  7. Establish a Rebuild Iowa Infrastructure Board of seven members, appointed by the Governor for staggered terms of office with confirmation of the Senate.
  8. Attach the RIIF Board to the Department of General Services for staff support.
  9. Authorize the RIIF Board to allocate available funds to state infrastructure projects. The General Assembly and the Governor may veto specific projects, but other prjects shall not be added by the General Assembly or the Governor.
  10. Preference shall be given by the Board to funding projects in the order of emergency repair, deferred maintenance, and historic preservation.
  11. Direct the Board to prepare and maintain a comprehensive 5 year strategic facilities plan for maintenance, repair and replacement, and renovation of state vertical infrastructure in cooperation with all affected state agencies, and update the plan annually.

ADMINISTRATIVE RULES REVIEW COMMITTEE

October 8-9, 1996

DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP
Animal welfare provisions, ARC 6729A, notice. For the second time the department proposes rules relating to the licensing of commercial animal breeders. The proposal would require that each breeder contract with a Iowa licensed veterinarian to provide "adequate" veterinary care. The notice also provided for a five year prohibition against licensure once a license is revoked for cruelty or neglect.
Action. Committee members were very supportive of the goals in this proposal but questioned whether the department's licensure authority extends to mandating the use of a veterinarian on an ongoing basis. Members also noted the phrase "adequate veterinary care" is unacceptably vague and needs further definition. Additional review will occur when the proposal is adopted in final form.
CREDIT UNION DIVISION
Low income credit unions, ARC 6714A, adopted. Controversial when initially proposed, these final rules were presented to the committee without opposition. The rules, based on Iowa and federal law, facilitate the creation of credit unions serving predominantly low income persons. To qualify, fifty percent of the members must earn no more than 80 percent of the average wage, or have a family income no greater that 80 percent of the median household income. The most significant issue surrounding this proposal was the use of "secondary capital" accounts from non-natural persons. In essence, these deposits are a form of charitable contribution. Most credit unions raise capital from member deposits, but since low-income credit unions are unlikely to raise funds in this way the secondary accounts can provide a needed source of capital. These accounts were authorized in the federal law but not in the Iowa legislation.
Action. After discussion the committee members concluded that authorizing these accounts is within the authority of the division and the rules were accepted without action.
ECONOMIC DEVELOPMENT DEPARTMENT
Iowa jobs training program, ARC 6572A, held over from August. This filed emergency provision was controversial when initially reviewed in August; the department has now come forward with clarifications and corrections that appear to resolve any controversy. The department began by reiterating its commitment to work with local community colleges to implement this program. The rules themselves presented two issues. The first issue was whether the department itself would provide training under the Act. It was clearly stated that the department would not itself provide any training services; instead, training would be provided either by the local community college or by a consortium of local businesses. The second issue involved whether this program would fund "supplier network training". Supplier training is basically a quality control concept where parent corporations educate and train their local suppliers to ensure those locally supplied products or parts meet the parent corporations' specifications. The department has stated that it might fund such a project, but not if it displaces Iowa workers.
Action. No committee action was taken.
ENVIRONMENTAL PROTECTION COMMISSION
Waste tire storage, 567 IAC Chapter 117, selective review. At the request of the Fiscal Committee of the Legislative Council, the Administrative Rules Review Committee examined existing provisions relating to waste tire storage sites. Under these provisions, no person can store more than 500 tires without having a permit from the division; this permit carries an $850 annual fee and each applicant must prove financial responsibility of 85 cents per tire for the maximum number authorized in the permit. At issue was the application of this fee to an underground mine storing over 3,000,000 tires. Using the statutorily required bond of 85 cents per tire, the bond for storage of these tires amounts to roughly $300,000 annually. The mine operators contend the fee is excessive in this case where the tires are completely out of sight, largely safe from fire, and do not serve as a nesting place for vermin; they further noted that the risk of harm seems reduced so the fee should be reduced as well. Currently Iowa Code section 455D.11A specifically sets the financial assurance rate by statute, leaving the division no discretion to tailor the amount of the fee to the degree of risk.
Action. Representatives from the Environmental Protection Commission agreed that tires stored in the mine pose a significantly lesser threat than do tires stored above ground, and also agreed that a reduced {but not eliminated} fee would be appropriate. The committee then voted to refer this issue to the General Assembly with the recommendation that a specific fee structure and regulatory scheme be established for storage facilities posing little or no threat to the public health, safety, or welfare.
HUMAN SERVICES DEPARTMENT
Funding for local "boot" camps, ARC 6703A, adopted. As part of a larger filing relating to foster care, the department included a provision relating to the funding of "highly structured" juvenile program beds (boot camps). Senate File 2442, section 10, allocates "not more than $1,077,995" to fund 50 beds. This language, along with the rules language developed by the department to implement this provision, raised the question whether all of that money is in fact available to the program. Department representatives assured committee members that 50 beds will be funded under the program and all of the appropriated funds will be available for that purpose.
Action. No committee action was taken.
INSURANCE DIVISION
Mutual holding companies, 6728A, notice. The committee reviewed the procedures to be used by mutual insurance companies who wish to convert into a holding company. This process, unique in the nation, was authorized by the Legislature and provides mutual companies with a mechanism for raising capital by selling equity in the assets of the company. Testimony revealed that one Iowa company, AmerUS, is anxious to complete the process this year. To do so requires that the rules be implemented on an "emergency" basis.
Action. While numerous, albeit minor, issues remain to be resolved, it appears that all interested parties are willing to allow the current proposal to be adopted and implemented, with the understanding that the outstanding issues will be discussed and resolved in a future rulemaking. Committee members voiced support for this filing, noting however that with the adoption of the filing the Insurance Division would be under no compulsion to adopt any further changes to the rules.
INSURANCE DIVISION
Maternity benefits and care, ARC 6744A, notice. House File 2369 in part provides that the decision to discharge a mother or newborn from the hospital is to be made by the attending physician in consultation with the mother. This decision must be in accordance with rules adopted by the Commissioner of Insurance. The rules must be based on the guidelines for perinatal care established by the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists. The commissioner has proposed rules which adopt the 1992 edition of those standards. That edition specifies a hospital stay of 48 hours for a normal delivery to a minimum 96 hours for a cesarean birth, excluding the day of delivery. The physician and the mother can agree to a lesser amount of time.
Action. This has sparked a debate whether H.F. 2369 itself mandates a 48 hour\96 hour hospital stay, regardless of what the guidelines state. The current issue of the guidelines contain such a provision, but future guidelines will probably eliminate that specific hour requirement. The committee took no action on this filing, but additional review will occur when the rules are adopted in final form.
RACING AND GAMING COMMISSION
Administration of phenylbutazone to race horses. The commission has adopted a rule correcting an error in the statutory language relating to the administration of drugs to race horses; that error sets the phenylbutazone (bute) standard at 2.2 micrograms per millimeter of blood. A millimeter is a standard of length, not volume; it cannot be used to set a standard for bute, which is a liquid. The rule changes the standard to milliliter, which is the correct term for a liquid measure. After several meetings, the committee decided to impose a session delay on this change and refer the matter to the Legislature for further action, even though the members noted that the department is correcting a typographical error.
Action. Committee members felt they must clearly establish the principle that the plain language of a statute cannot be changed by an administrative rule. To do so, the members reasoned, would put the validity of an administrative rule on an equal footing with a statute. Thus it was felt that only legislative action can correct this statutory inconsistency. For that reason the committee voted to formally bring this matter to the attention of both chambers and encourage a legislative, not administrative solution to the question.
DEPARTMENT OF TRANSPORTATION
Hours of operation for automobile dealers, 761 IAC 425.3, selective review. In response to a citizen complaint, the committee reopened an issue considered earlier this year. For decades the department has established licensing standards for automobile dealers, including regulations relating to the course and method of the dealers' business. Among these regulations, rule 761 IAC 425.3 specified the hours of business for dealers. Earlier, at the committee's insistence, the requirement dropped from 40 hours per week down to 32 hours.
Action. On this reopened review, the committee decided that it is inappropriate to specify any hours of operation. It was the consensus that rules should protect the public health, safety and welfare and this particular provision serves none of those goals. For that reason the committee referred this rule to the Legislature with the recommendation that it be overturned by statute.

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