February 6, 2004 Senate e-Briefly

Senators kicked off the second half of the 83rd Legislative Session, Mon., Feb. 2, by selecting a new majority leader and adopting a variety of resolutions to change standing committees and prepare for the work of the session.

Sen. Dean E. Johnson (DFL-Willmar) is the Senate's new majority leader. Johnson welcomed members back to St. Paul and said, "Thank you for the honor and privilege of being Majority Leader." The Senate is the "upper body" for quality ideas and debate Johnson said and added that members thoughts and ideas for the session will be appreciated.

Members also adopted resolutions creating two new committees. The Committee on Elections, chaired by Sen. Charles W. "Chuck" Wiger (DFL-North St. Paul), becomes a full committee after having been a subcommittee of the Rules and Administration Committee. In addition, an Early Childhood Policy and Budget Division, chaired by Sen. John C. Hottinger (DFL-Mankato), was also created. Members also adopted changes to the committee memberships of several other panels.

A brief debate arose over the changing of committee jurisdictions that follows the new committee structure. Sen. Dick Day (R-Owatonna) and Sen. David Knutson (R-Burnsville) both objected to the re-referral of their respective bills to new committees. As a result, the bills--S.F. 576, establishing a "racino" and S.F. 992, requiring uniform penalties for tobacco sales violations-remain in the Tax Committee and Commerce Committee respectively.

Finally, members adopted routine opening day resolutions relating to postage, interns and the appointment of a committee to escort the governor to the State of the State address Thurs., Feb. 5. President James Metzen (DFL-South St. Paul) named Sen. David Gaither (R-Plymouth), Sen. Linda Higgins (DFL-Mpls.), Sen. Keith Langseth (DFL-Glyndon), Sen. Ann Rest (DFL-New Hope) and Sen. David Senjem (R-Rochester) as members of the escort committee.

Legislators gathered to hear a more positive message from Gov. Tim Pawlenty as he delivered his second State of the State address, Thurs., Feb. 5. While the state relieved itself of a $4.5 billion projected shortfall during the 2003 legislative session, he said, "we still have some deficit to fix now and in the future."

However, most of the governor's remarks focused on four main policy areas: education, jobs, health care and the Minnesota quality of life. Pawlenty said the state needs to be more competitive on taxes, health insurance costs and business regulation. Minnesota, he said, will never be a bargain basement state, but it can be quicker, more clever, more creative and more strategic than its domestic and international competitors. The governor said some limit on state spending, roughly tracked to inflation and population growth, needs to be considered.

In the area of education, Pawlenty challenged Legislators to tackle reform of the education finance system. The governor also reviewed other education proposals, stressed the importance of parental involvement and applauded the "aggressive and innovative approach" taken by Minneapolis Interim Superintendent David Jennings. Pawlenty drew attention to a Citizens League task force aimed at examining the optimal structure of higher education for Minnesota's system.

To grow jobs in Minnesota, the governor said, requires tax reform, investment in the growing field of biosciences and support for the traditional Minnesota industries of mining, timber and livestock. Pawlenty also advanced the idea of providing low-interest modernization loans to farmers. In addition, he said, Minnesota must reduce the expenses associated with health care. The governor noted that the state was the first in nation to provide a web portal for its citizens to access safe, less expensive prescription medicine from Canada. He also said policy makers should look forward to the recommendations of a health care task force led by former U.S. Sen. Dave Durenberger.

If people are going to move to Minnesota, the governor said, we must convince them of the high quality of life we enjoy. Pawlenty focused on continuing the state's commitment to its natural resources, improving traffic flow and ending chronic homelessness. He also targeted public safety, calling on Legislators to get "Minnesota Tough on criminals" by improving the state's civil commitment and electronic monitoring procedures for sex offenders, by lowering the legal limit on drunk driving and by putting a constitutional amendment permitting the death penalty before Minnesota voters. The governor also proposed historic changes in gambling. Pawlenty said that while he opposes the expansion of gambling in Minnesota, the compacts negotiated with Indian tribes do not reflect current circumstances. "My preference is to keep gaming within its current contours, but we need to explore a better deal for Minnesotans," Pawlenty said.

Committee update

Sen. Linda Scheid (DFL-Brooklyn Park) called a brief meeting of the Commerce Committee Wed., Feb. 4, to go over organizational matters with the members. Scheid, who previously chaired the Jobs, Housing and Community Development Committee, is the new chair of Commerce. The former chair, Sen. Ellen Anderson (DFL-St. Paul), is now the chair of the Jobs, Energy and Community Development Committee.

Scheid explained that the committee jurisdictions have also changed somewhat and that bills relating to tobacco issues would no longer originate in the Commerce Committee, but in the Health and Family Security Committee instead. Utility issues, including telecommunications, will now be under the jurisdiction of the Jobs, Energy and Community Development Committee, she said. In addition, Scheid said that Sen. Dan Sparks (DFL-Austin) will chair a Subcommittee on Consumer Protection, Banking and Insurance and that Sen. Sandra Pappas (DFL-St. Paul) will chair a Subcommittee on Liquor.

Members of the Crime Prevention and Public Safety Committee, chaired by Sen. Leo Foley (DFL-Coon Rapids), began their work for 2004 by receiving a report from the Sentencing Guidelines Commission on drug offender sentencing. The report was required by legislation passed during the 2003 special session.

Barbara Tombs, executive director of the sentencing commission, reviewed the report for committee members. Among the findings, she noted, was a roughly 20 percent increase in felony convictions from 2001 to 2002. Over the same period, felony drug convictions increased 32 percent and felony non-drug convictions rose only 17 percent. Tombs said the growth in drug offenses was the largest annual increase since sentencing guidelines were adopted. She also reviewed data about the gender and racial distribution of drug offenders, noting that some changes in the distribution are attributable to the greater popularity of methamphetamines among white drug users and the growth in methamphetamine production. Tombs also discussed sentencing practices in other states and departures from the guidelines during sentencing.

The full report is available from the Minnesota Sentencing Guidelines Commission website.

Members of the Crime Prevention and Public Safety Committee assembled Wed., Feb. 4, to hear from the Dept. of Corrections on practices in referring sex offenders for civil commitment. Most of the time was devoted to answering questions submitted in advance by panel members, led by Sen. Leo Foley (DFL-Coon Rapids).

Deputy Commissioner Harley Nelson said 2,772 inmates were reviewed for risk level assignment and possible civil commitment from 1997 to 2003. He said 198 cases were forwarded by the Department of Corrections (DOC) to county attorneys during the same period. County attorneys, Nelson said, decided to proceed with civil commitment hearings for 114 of the 198 cases forwarded. He also reviewed the actuarial screening tool used by the department to assess the likelihood that individuals with similar characteristics may commit additional sex offenses after their release.

Steve Huot, formerly of the Dept. of Corrections and now with the Dept. of Human Services, reviewed the process used by the DOC to determine if inmates should be forwarded to county attorneys for civil commitment proceedings. Huot said there is no checklist of things determining if civil commitment is the way to go. Each case is different and has differently weighted factors, he said, including what the inmate's post-release plans are, what the inmate's behavior has been like, how the inmate is responding to treatment and if the inmate is making progress dealing with sexual impulses.

"I'm not going to take a chance on having another [Alfonso] Rodriguez," said Commissioner Joan Fabian. After the December 2003 arrest of Rodriguez in connection with the disappearance of Dru Sjodin near Grand Forks, N.D., Fabian set in place interim procedures to refer all level-three sex offenders to county attorneys. She said the department had received feedback that some inmates being referred were not being committed, so the department began comparing cases to previous cases that had resulted in commitment. Fabian said having an attorney in the department, assigned to civil commitment referrals, would assist the department in determining if the case will meet the legal standard for commitment. Without such in-house counsel, she said, the department's policy will be to continue referring all level-three offenders. Sen. Dave Kleis (R-St. Cloud) said the policy is the one that makes the most sense. Level-three offenders have been identified as having a high risk of recidivism, he said, and citizens cannot understand why these people are being released into the community. However, Sen. Wesley Skoglund (DFL-Mpls.) said the state should be careful to have a process that does not infringe on the constitutional rights of offenders.

Report cards for schools were the starting point for the work of the Education Committee during its first meeting, Tues., Feb. 3. Chaired by Sen. Steve Kelley (DFL-Hopkins), members heard an overview of the five-star school rating system from the Department of Education and critiques of the program from interest groups. The report cards are available from the department's website.

Commissioner Cheri Pierson Yecke and Kathy Wagner, Dept. of Education, reviewed the contents of school report cards and the system used to evaluate schools. The report cards provide a summary of information on schools about academic achievement, academic opportunities, safety, parent satisfaction, finances, staff characteristics and student enrollment and mobility. Yecke said one of the reasons for developing the report cards was to provide positive accountability information. Since all schools must report adequate yearly progress (AYP) information under the federal No Child Left Behind Act, and the focus of attention will be on schools not making AYP, there is a dearth of positive information about schools, Yecke said. With the report card, the focus is not only on underperforming schools, but also on schools achieving positively for their students, she said.

Jennifer Armstrong, a parent of students in St. Paul schools and president of the St. Paul Network of Education Action Teams, raised several concerns with the report cards. She said the star rating system encourages parents not to look deeper at relevant data. Realtors are also using the ratings to sell houses, Armstrong said, creating a sort of social engineering and promoting the concept of children as commodities. She said the data used in the report cards is available elsewhere and that parents can surely benefit from examining the data. Armstrong said that the data needs to be used differently and in a way that is not punitive to schools for things they cannot control, such as the mobility of their students or the financial situation of families.

"The stars don't give the full story," said Jan Alswager of Education Minnesota. Only a deeper examination of the data is a fair evaluation, she said, and parents can do that on their own. The rating system, however, preempts the evaluation, Alswager said. "What is the purpose of ranking?" she asked. Alswager said the teacher's union recommends that factual data continue to be reported, that summary information be represented graphically, that the report cards include brief narratives, that two categories-celebrations of accomplished improvement and priorities for future improvement-be added and that actual class sizes be reported. However, Education Minnesota suggests eliminating the star system, Alswager said.

Sen. David Hann (R-Eden Prairie) said that while raw data is available to parents, policymakers have a hard time communicating the information to parents with impact. The rating system, he said, communicates the data efficiently, quickly and in an easily accessible way. "The report card gets us to focus on what we are doing and what we should do," Hann said.

Alternative methods for teacher licensure were the focus of the Thurs., Feb. 5, meeting of the Education Committee, chaired by Sen. Steve Kelley (DFL-Hopkins). The issue was before the panel, Kelley said, because of the licensure requirements placed on schools by the federal No Child Left Behind Act.

Mary Ann Nelson, assistant commissioner of the Dept. of Education, said Minnesota has a high quality teacher workforce. The No Child Left Behind Act (NCLB), she said, was really meant to raise teacher quality in states lacking Minnesota's high standards. Meeting the requirement to be highly qualified in the subject area they teach will be easy for over 95 percent of the state's teachers, Nelson said. The only problem Minnesota faces, she said, is its waiver or variance system, whereby teachers not normally qualified to teach in a subject area can get temporary approval from the Board of Teaching to provide instruction in the area.

In order to allow teachers working under variances to meet the NCLB standard, Nelson said, the department developed the Highly Objective Uniform State Standard of Evaluation (HOUSSE) process. Teachers are required to provide evidence in any of seven categories-including student achievement on standardized tests, awards and recognition for leadership, teaching experience in the content area, a passing score on the Praxis II content test, advanced credentials, college-level course work in the subject area or professional activities-in using the HOUSSE process to meet the NCLB standard. Nelson said the department and the Board of Teaching are considering an expanded HOUSSE process leading to regular licensure in subject areas. However, Executive Director George Mauer said the Board of Teaching has not made a decision on moving forward with the HOUSSE process.

Kelley questioned the authority of the department in creating the HOUSSE process. He said the Legislature never authorized the commissioner to establish the program and that the department may have gone around the normal rule-making process as well.

The new Elections Committee, chaired by Sen. Charles "Chuck" Wiger (DFL-North St. Paul), met for the first time Thurs., Feb. 5, to consider three bills.

S.F. 7, sponsored by Sen. John Marty (DFL-Roseville), makes several changes in laws dealing with absentee voting. Marty said the measure is designed to make absentee voting easier. He said the bill had gained the committee's approval last year, but did not pass on the floor. He offered an amendment, which the committee adopted, to streamline the language. He said the bill as amended authorizes any eligible voter to vote by absentee ballot if the voter will be unable to vote at the polling place. The bill eliminates the specific reasons a voter must give, under current law, for being unable to vote at the polling place. In addition, the measure authorizes a voter to request that an absentee ballot be sent using a commercial shipper at the voter's expense. The bill also authorizes voting by facsimile ballot by a person outside the U.S. or a person who becomes a patient in a health care facility within seven days of the election. Marty said the bill also codifies actions taken after the death of Sen. Paul Wellstone regarding the delivery of supplemental ballots to absent voters who request a supplemental ballot.

Sen. Warren Limmer (R-Maple Grove) said he was opposed to the provision allowing absentee voters to vote by facsimile. He cited the potential for voter fraud in not having more safeguards. Marty countered that the safeguards are the same as in the current absentee voter provisions, but offered to delete the section of the bill relating to facsimile. The amendment was adopted.

Members approved two additional bills, both sponsored by Marty. S.F. 148 increases disclosure of contributions and expenditures for local political campaigns. The bill requires reporting contributions and expenditures of $100 per year. The measure also lowers the threshold for reporting individual contributions to $100 per year. S.F. 1613 authorizes alternative forms of voting in city elections. The measure allows a city to adopt cumulative voting and requires electronic voting systems to support cumulative voting and ranked-order voting.

The Environment and Natural Resources Committee, chaired by Sen. John Marty (DFL-Roseville), met Wed., Feb. 4, to take action on several gubernatorial appointments.

The committee approved the appointment of former Sen. Gene Merriam as commissioner of the Dept. of Natural Resources. The panel also approved the appointments of Keith Langmo, Marcus Marsh and Chester Wilander to the Minnesota Pollution Control Agency Board.

Members also hear a presentation on the Legislative Commission on Minnesota Resources Citizens Advisory Committee's report on wildlife management acquisition.

One bill was heard by the committee and advanced to the Finance Committee. The measure, S.F. 555, sponsored by Sen. Tom Saxhaug (DFL-Grand Rapids), allows two-way operation of snowmobiles on either side of a highway right-of-way when authorized by the commissioner of transportation. Under the bill, the commissioner must determine that two-way operation will not endanger users of the trunk highway or riders of the snowmobiles using the trail.

The Finance Committee met Thurs., Feb. 5, to hear from Commissioner Peggy Ingison, Dept. of Finance, about the state's budget outlook. Chair Richard Cohen (DFL-St. Paul) also invited economists Paul Anton and Dan Laufenberg to address the committee on the national economic outlook.

Ingison said the budget forecast from November 2003 indicated the state would have a shortfall of $185 million for FY 2004-05. She said that while revenues are down from earlier estimates, FY 04-05 spending is lower for E-12 education and human services. In addition, Ingison said, FY 03 ended with a positive year-end balance that was added to the budget reserve. The reserve is up from $522 million to $631 million, Ingison said.

Ingison said state income tax revenues are down $490 million, $103 million of which is the cost of federal tax compliance. Sales tax revenues were also down, she said, but corporate, motor vehicle and other tax categories were up slightly. The net effect is that revenues are down $407 million. On the other hand, Ingison said state spending is down about $143 million from previous estimates. She said the department, and Legislators, will have more information after the February forecast.

Ingison also sounded a cautionary note for FY 06-07. She said current forecasts indicated a $440 million shortfall in FY 06 and a positive balance of $46 million in FY 07.

Ingison presented information comparing Minnesota's budget situation to other states and said that Minnesota balanced its budget in much the same way other states have balanced their budgets-through the use of one-time budget actions, cuts in state spending and reserve fund transfers. She said that the recent positive economic news does not mean that the states' fiscal crisis is over.

American Express Chief U.S. Economist Dan Laufenberg said the U.S. economy expanded at a slow motion pace for much of the last two years, but that the 4 percent growth rate of the fourth quarter of 2003 is probably the rate of growth for the balance of this year. He said business spending is going to pick up in 2004 because businesses have both the means and incentive to expand. He also said that he expects that the economy will continue to enjoy the benefits of low inflation and that job numbers will begin to improve.

Paul Anton, president and chief economist of Anton, Lubov & Associates, Inc., also spoke to the panel. He said that the economy is doing well because of increases in productivity rather than job growth. He also outlined some vulnerabilities in the economy and long-term risks. He said the federal deficit may exert upward pressure on interest rates and downward pressure on the dollar which combined could lead to greater inflation.

The Environment, Agriculture and Economic Development Budget Division devoted the Thurs., Feb. 5, hearing to discussion of the Minnesota Zoo and the zoo's bonding request. The panel, chaired by Sen. Dallas Sams (DFL-Staples), took no formal action on the bonding proposal and will consider the measure for the division's bonding recommendations.

Lee Ehmke, director, said the Minnesota Zoo has over a million visitors each year and that the zoo generates about $60 million in direct and indirect benefits to the state's economy. He presented an overview of the zoo's operations and the work the facility does in the area of wildlife conservation. He said, though, that the existing physical plant is in need of repair and refurbishment.

The bonding proposal, contained in S.F. 1655, authored by Sen. David Knutson (R-Burnsville), requests $48 million in bond proceeds to be used to fund two new exhibits.

Ehmke said the two new exhibits, Gateway to the North and a Biodiversity Center, are part of a master plan that provides a long term physical and business vision for the Zoo. Overall, the plan includes two additional zoo experiences-Prairie's Edge and Africa Trail. The Biodiversity Center will provide a new "front door" for the zoo and will include habitats for primates, birds, fish and invertebrates, Ehmke said. The Biodiversity Center will also be headquarters for the zoo's educational programs, he said. The Gateway to the North will provide an opportunity for visitors to experience wildlife and habitat from the far east of Russia and the connection to North America.

Knutson said the bill is necessary because the zoo is a state institution that the Legislature has a responsibility to maintain. Knutson emphasized the importance of the zoo experience to children and families as an important educational tool.

Mary Hamann Roland, mayor of Apple Valley, and Dakota County Commissioner Will Branning also spoke in support of the measure. Roland also stressed that the zoo is a statewide asset for all Minnesotans.

The Wed., Feb. 4, meeting of the Health, Human Services and Corrections Budget Division was devoted to discussion of the State Public Defenders Budget, growth projections within the Dept. of Corrections and the Dept. of Corrections bonding proposal.

The division, chaired by Sen. Linda Berglin (DFL-Mpls.), heard first from Kevin Kajer, chief administrator, Public Defense Board. Kajer said the general fund appropriation for FY 2005 is $7.6 million less than the general fund appropriation for FY 2004. He said the Legislature devised a schedule of co-payments for public defenders services to help make up the difference between the appropriations for the two fiscal years, but the collection of co-payments has not made up the shortfall. As a result, Kajer said, the Board of Public Defense is requesting a supplemental budget request of $11.838 million. The supplemental appropriation is to fund the scheduled FY 2005 budget reduction, fund the 40,000 hours that part-time public defenders put in over and above the agency complement for FY 2003 and to fund staff positions vacant in FY 2004.

The board petitioned the Supreme Court for caseload relief in three areas, Kajer said. He said the petition requested relief by establishing a presumption that continuances be granted upon request for out of custody clients, limiting public defender appointments in child protection cases to one public defender and requiring pre-petition screening or alternative response in all child protection cases prior to the court filing. However, the Supreme Court denied the petition, Kajer said.

In addition, last fall, Hennepin County challenged the constitutionality of the public defender co-payment and that case is now before the Supreme Court, Kajer said.

Kajer said the public defenders' workload has increased significantly in recent years and that the trend is for still heavier case loads. He said the board does not take a position on issues before the Legislature such as the .08 blood alcohol limit, but that the financial and workload consequences must be taken into account.

The division then turned their attention to the population increase within the Dept. of Corrections. Dan Storkamp, Dept. of Corrections, said the adult male prison population is expected to increase between 200 and 400 offenders annually, with larger increases in the next few years. Storkamp said the projections are done annually, in consultation with the Sentencing Guidelines Commission, and includes only adult prison beds. He said the projections are based on current laws, policies and practices. In July 2003, the total prison population was 7,579 and the current projections place the total population at 9,940 by July 2011, Storkamp said. He said the increases are a result of court volume increases, felony DWI offenders and increases in drug/meth cases.

He said in FY 2004-05, the department plans on double bunks in St. Cloud and Stillwater and to rent beds. In FY 2006-07, Benson said the department plans to expand the challenge incarceration program, expand Stillwater and rent beds.

Benson also took a few moments to explain educational and treatment programming the department conductions within the correctional facilities. He said programs such as education and chemical dependency treatment are the best and cheapest security in corrections facilities.

Benson outlined the department's 2004 bonding initiatives. The department is requesting $74.9 million for expansion at the Faribault facility, $11 million for asset preservation, $19.2 million for creation of a 150 bed segregation unit at Stillwater and $350,000 for expansion of the challenge incarceration program by 24 beds.

Members of the K-12 Education Budget Division, chaired by Sen. LeRoy Stumpf (DFL-Thief River Falls), began 2004 by exploring the budget of the Dept. of Education. Deputy Commissioner Chas Anderson and Administrative Services Director Tammy McGlone provided an overview, Thurs., Feb. 5, of historical trends in department spending and the department's FY 2004 budget.

A large portion of discussion centered on federal spending on education in Minnesota. Anderson said the state received $175 million in federal FY 03 and $232 million in federal FY 04. Of those amounts, she said, $102 million and $118 million, respectively, are directed to school districts. Anderson said it is too early to determine what new money and what new costs can be attributed to the No Child Left Behind Act. "There is consensus out there that this is not a fully funded mandate," she said. Anderson also sought to dispel the notion that the state is holding onto a large amount of federal money and refusing to spend it. Federal law permits the department a 27-month window in which to spend the funds, she said, and budget officers at all levels have learned the federal appropriations process is not a steady, consistent operation. Common practice, Anderson said, is to spend old money first, so that the 27-month threshold is not crossed, before spending new appropriations.

A proposed fee schedule for political activity was the focus of the Tues., Feb. 3, meeting of the State Government Budget Division, chaired by Sen. Jane Ranum (DFL-Mpls.). The proposal was required by legislation passed during 2003. The proposed fees are intended to cover the operating costs of the Campaign Finance and Public Disclosure Board, which enforces the state's campaign finance laws, registers lobbyists, administers the campaign subsidy program and evaluates economic interest statements of public officials.

Will Fluegel, board chair, reviewed the process the board used in evaluating fee schedules. The board consulted with the entities it regulates-lobbyists, political committees and funds, principal campaign committees and party units-and determined the percentage of board operating costs attributable to each category, he said. Fluegel said a survey of other states showed that 12 states, including Minnesota, charge no registration fees for the entities. The unanimous recommendation of the board is not to impose any fees, he said.

The fee schedule proposed, however, is intended to simplify administration and address issues of equity, according to the report. The schedule imposes a $75 annual fee on lobbyists, a sliding scale of annual fees for political committees and funds and political party units, based on contributions and disbursements. Principal campaign committees, under the proposal, pay a one-time registration fee, an additional fee upon filing an affidavit of candidacy and a third fee by July 1 of each election year.

Members of the panel discussed the recommendation and the fee schedule. Sen. Jim Vickerman (DFL-Tracy) said he was concerned the fees for principal campaign committees were too high. With fees totaling over $1,800 for candidates for state Senate, he said, "Are we going to price people out of running for office?"

The full report is available from the Campaign Finance and Public Disclosure Board online.

The State Government Budget Division, chaired by Sen. Jane Ranum (DFL-Mpls.), devoted the Wed., Feb. 4, meeting to hearing reports from representatives of the Dept. of Administration. The reports, requested by the Legislature, concerned mobile telecommunication device expenditure reductions and state vehicle expenditure reductions.

Commissioner Brian Lamb provided a brief overview of the department's organization and outlined the department's accomplishments for 2003. According to materials provided by the department, the agency seeks to provide services that result in government being faster, better and more cost-effective. Highlights of the department's success over the course of the last year include an electronic automation system to manage the state's insurance needs, on-line demographic information on more than 400 population characteristics, on-line professional licensing procedures, automation of surplus property auctions, the creation of the Minnesota State Government Internal Auditing Roundtable to serve as a professional resource and to improve state agency operations, and the development of a shared carrier call center infrastructure. In addition, the agency has also pursued cost-effectiveness through a warrant printing and mailing solution that reduces mailing costs, a new electronic data storage system that reduces maintenance and equipment costs, the aggregating of information technology purchases to save funds and by meeting or exceeding energy efficiency standards.

The mobile telecommunication device expenditure reduction plan was required by the Legislature last year. As a result, the department has fulfilled the requirement through three primary activities: the development of a revised statewide telecommunication device use and expenditure policy, improvement of telecommunication device purchasing analysis and tools, and updating cabinet-level state agencies' telecommunication device inventories.

The vehicle expenditure reduction plan was also required by the Legislature. The department is working to fulfill the requirement by implementing a three-year, phased plan. At a minimum, the plan will ensure that an agency are making more informed business decisions relating to vehicles and anticipates that the plan can reduce state agency light-duty fleet expenditures by a total of 5 percent by the end of FY 2006.

Members of the Health and Family Security Committee began their work for 2004, Tues., Feb. 3, with a lengthy review of changes in federal Medicare law. The panel, chaired by Sen. Becky Lourey (DFL-Kerrick), heard from a variety of sources, including the Department of Human Services (DHS), the Greater Minnesota Health Care Coalition, the American Association of Retired Persons, health plans and experts on health policy.

Assistant Commissioner Brian Osberg, DHS, provided committee members with an overview of the major changes in Medicare, including the new prescription drug benefit. Representatives of members of the Minnesota Council of Health Plans discussed other aspects of Medicare and changes that are still to take effect. Members of the Greater Minnesota Health Care Coalition identified the problems they see in the Medicare changes and explained their continuing opposition to the law.

Professor Stephen Parente, Carlson School of Management, explained the health savings account (HSA) concept to the panel. The plan affects everyone, not just those enrolled in Medicare, he said. Consumer-driven health plans, such as HSAs, have seen significant growth in popularity since 2001, Parente said. At one major Minnesota employer, he noted, about one fifth of employees have selected a consumer-driven option. A sample plan requires a consumer to buy catastrophic coverage with a minimum deductible of $2,000 and the individual or employer can make pretax contributions to a health savings account of up to $5,000 per year, Parente said. While the deductible is higher than in traditional health plans, he said, the initial premium cost is much lower, which often results in far lower total costs to a consumer. Also, any money left in the HSA at the end of the year can be rolled forward, he said. The main problem with the current health care system is that consumers do not face the real cost of health care, Parente said. "We see only a $5 or $10 deductible, or a $100 copay, not the full cost of services," he said. Consumer-driver health plans solve the problem, he said, by exposing consumers to the true cost of their medical care.

The Judiciary Committee held its first hearing Tues., Feb. 3, to consider two bills dealing with the expungement of eviction records. The panel, chaired by Sen. Don Betzold (DFL-Fridley), heard testimony on the two measures and then voted to lay both bills on the table.

The first measure, S.F. 959, authored by Sen. Dallas Sams (DFL-Staples), changes the law dealing with the discretionary expungement of eviction records. Under the bill, the court could order expungement of an eviction case court file only upon the motion of a defendant and decisions by the court and only if the court makes an explicit written finding that the landlord's case is without basis in fact or law. In addition, the measure specifies that a case being stricken, dismissed or settled, or an agreement between the parties to allow expungement, does not determine that the case was without basis in fact or law.

Jack Horner, representing the Minnesota Multi Housing Association, said the bill tightens the requirements for expungement of records. He said there is a growing inability on the part of landlords to find a complete history of prospective tenants because records have been expunged.

The second bill, S.F. 883, sponsored by Sen. Linda Berglin (DFL-Mpls.), provides that a court may order expungement if the court finds that there is a change in circumstances for the tenant that indicate that the eviction case is not a reasonable predictor of future behavior. In addition, the bill also spells out circumstances for mandatory expungement of eviction case court files. The measure specifies that records be expunged if the court finds that the tenant prevailed in the action, or the landlord's case is sufficiently without basis in fact or law. Berglin said the bill provides for more expungements. She said, "Most of the time, when people experience evictions it is not because they are criminals, but because they have fallen on hard economic times. This is one way to help alleviate homelessness, because individuals won't have harmful information on their records."

Committee members tried to reconcile the two bills, but were unable to do so. Sen. Julianne Ortman (R-Chanhassen) said, "It seems that the current laws dealing with landlords and tenants are very carefully balanced and I think it might be best to leave them that way." After further discussion, Sen. John Marty (DFL-Roseville), moved to lay both measures on the table. The motion was adopted.

Members of the Rules and Administration Committee approved a reorganization of the Senate during their first meeting in 2004. Led by Sen. Dean E. Johnson (DFL-Willmar), members approved resolutions creating a new committee and renaming other committees, naming majority and minority leaders and establishing a committee meeting schedule.

The committee also approved resolutions allocating postage to members and providing for the reimbursement of intern expenses. Johnson also reviewed the process by which bills will be re-referred during the day's session. Bills are being moved to accommodate the new committee structure and jurisdictions, he explained. Looking forward, Johnson said committees and floor sessions will begin the process of confirming the governor's appointees Monday, Feb. 9.

The State and Local Government Operations Committee met for the first time with new Committee Chair Linda Higgins (DFL-Mpls.), Wed., Feb. 4, to hear an overview of the Dept. of Administration presented by Commissioner Brian Lamb.

Lamb said the department has concentrated on fine-tuning its mission by delivering government services faster, better and more cost effectively. He said the agency absorbed a 15 percent budget reduction, but that he is continually impressed by the accomplishments of departmental staff. Lamb said the department is focusing on collaborative efforts with other agencies and on e-government opportunities.

Lamb also gave a brief rundown on the department's bonding priorities. He said the main priorities are work on the exterior of the transportation building, statewide CAPRA, agency relocation, asset preservation, Ford Building demolition and Capitol Complex parking. He said parking in the Capitol Complex area is the Achilles heel of short and long term planning for the Capitol Complex.

Lamb also reviewed two studies requested by the Legislature relating to vehicle fleet expense reduction and telecommunication expense reduction.

Kent Allen, director of the Materials Management Division, gave a brief presentation on reverse auction procurement. He said a reverse auction is like e-bay in reverse in that bidders lower their price until time expires. Under the procedure, the lowest responsible bidder wins. He said reverse auctions are available for the purchase of goods as well as professional/technical contracts for computer services and engineering design.

The committee also began the confirmation process for Lamb. Higgins said that a vote could not be taken until next week on Lamb's appointment as commissioner because of a parliamentary requirement.

Two proposals providing incentives for Minnesotans to plan for long-term care needs were before members of the Tax Committee during their first meeting, Wed., Feb. 4. The panel, chaired by Sen. Lawrence Pogemiller (DFL-Mpls.), re-referred both bills to the Finance Committee for consideration by the Health, Human Services and Corrections Budget Division.

Sen. Brian LeClair (R-Woodbury), sponsor of both bills, reviewed the problems with current long-term care financing. The two primary sources of payment for long-term care, he said, are consumers' own pocketbooks and the state treasury. We need to get a third party-private insurers-more involved in covering the costs of long-term care, LeClair said. The first measure, S.F. 15, brings private insurance into the mix by increasing a tax credit for long-term care insurance premiums to a maximum of $500 per individual or $1,000 per joint tax return with two policyholders. Under current law, the credit is capped at $100 or $200, respectively. A revenue analysis of the bill shows the change costs about $11.5 million in FY 05; the cost is projected to increase at about five percent annually. Several Senators raised concerns about reducing state revenues. However, Sen. Julianne Ortman (R-Chanhassen) said the state could achieve long-term savings because people with long-term care insurance do not need the state to pay for expensive care.

S.F. 1602, LeClair said, represents a much less expensive way to provide an incentive for Minnesotans to purchase long-term care insurance. The measure brings state tax law into conformity with tax provisions of federal Medicare legislation enacted in 2003. While the federal law focused primarily on prescription drugs, LeClair said, a much less heralded feature of the law is an opportunity for all Americans to open health savings accounts (HSAs). Consumers can pay for both medical expenses and long-term care insurance costs from funds in their HSA, LeClair said. The three main reasons to conform with federal law, he said, are for administrative simplicity, to transform the health care marketplace by exerting downward pressure on costs and to provide consumers an incentive to plan for their long-term care needs.

Representatives of several health-related interest groups, including the Agents Coalition for Health Care Reform, Communicating for Agriculture and the Self-Employed and the Minnesota Association of Health Underwriters, spoke in support of S.F. 1602. Beth Hartwig, health policy director for the Minnesota Business Partnership, said employers and employees face a growing inability to pay for the demands placed on the current health care system. HSAs offer portability and flexibility to insured persons and engage consumers in making health care decisions, she said. Twyla Brase of the Citizens Council on Health Care noted that a large number of uninsured persons are those making more than $75,000 per year. For those people, she said, it may not make sense to pay for a high-premium, low-deductible traditional insurance plan, because they do not use many health care services. Ultimately, Brase said, it is better to provide access to affordable catastrophic coverage than to have no access at all.

Robert Bodine said the Minnesota Senior Federation does not oppose the HSA concept, but believes the accounts should be available to all Minnesotans. As currently constructed, people over age 65 cannot contribute to HSAs, he said. Healthy people will select the high-deductible HSA option, he said, while consumers with a lot of expenses will choose to remain in a low-deductible plan. LeClair said he agrees that policymakers should move toward a totally unencumbered product, one that allows people over 65 to contribute to their accounts. However, he said, hoping to move in that direction should not preclude the state from taking the first step. LeClair said the federal government had considered an unencumbered version of HSAs, but could not implement it because of federal budget constraints.

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February 6, 2004 Issue of Senate e-Briefly

Highlights

Committee update