Floor Transcripts

LB 310 (1993)

General File

May 3, 1993


SENATOR CROSBY:  LB 239 advances.  I will lift the call.  Mr. Clerk.  LB 310 is next on the list.  Mr. Clerk.


CLERK:  LB 310, a bill introduced by Senator Warner.  (Read title.) The bill was introduced on January 12, referred to Natural Resources, advanced to General File.  I have committee amendments pending by the Natural Resources Committee.


SENATOR CROSBY:  There are committee amendments?  Senator Beutler.


SENATOR BEUTLER:  Senator Crosby, members of the Legislature, the committee amendments strike the original sections of the bill and become the bill.  By and large though, they retain the provisions of the bill but make a couple of additions the bill itself was designed to do two or three different things, the most important of which was to exempt from the Nebraska Budget Act utilities whether they were utilities such as NPPD or rurals, including rurals, basically excluding all of our publicly held utilities from the Budget Act.  That was in the bill and that is also picked Lip in the committee amendments.  So that is the first thing 'that is done.  Secondly, the bill also allows the utilities to select their own auditor and to pay that auditor directly and the committee amendment parallels the bill in providing that provision also.  Then in addition to that the committee amendment did these things.  When it exempted the public utilities from the Budget Act we also said, look, there are some minimum things you should do though even though you're not going to follow the Budget Act, including notice, preparing a proposed budget, getting that proposed budget on file seven days ahead of the hearing, giving seven days notice of a hearing and having a hearing on the proposed budget.  Those minimum requirements were picked up and copied more or less out of the Nebraska Budget Act and made applicable to the utilities.  So at least there was a minimal structure there with regard to how they would process their budgets.  Then in addition to that we asked for some uniformity in terms of budget forms.  I think there will be an amendment further clarifying that provision and, finally, it was incorporated into the committee amendment.  The concept that generally accepted government accounting principles would be used which are the principles that are




currently being applied to the utilities by the auditor or to all government political subdivisions by the auditor of public accounts.  So I think that those are the principal provisions of the committee amendments and would invite your questions.


SENATOR CROSBY:  Thank you, Senator Beutler.  Discussion on the committee amendments.  Senator Hillman.  Senator Elmer.


SENATOR ELMER:  Thank you, Madam Chairman, members.  The requirement of the ...  for the public power districts and the...  all across our state including our distribution systems like Norris Public Power, Twin Valley Public Power, McCook Public Power District or Southwest to participate and be a part of the Uniform Budgeting Act that applied to all the government subdivisions really isn't very practical, inasmuch as they do not raise revenue through taxation, all of the revenues from sale of power distribution and selling power at retail or generating power.  And their goal and their stated mission is to provide electrical power to the citizens of Nebraska for the cheapest possible price which they have done very well, and at the same time be accountable to the public through having their records open to public inspection.  So one portion of the budgeting bill that's in place for all the state agencies or all the state government or local subdivisions that levy taxes.  III comparison these more or less enterprises that have no tax base but generate the revenues for sale of electricity are two different types of things.  And the public power districts require more flexibility in expenditures of budgets than normally would be the case inasmuch as they have a great deal of infrastructure out there in power distribution systems that from time to time suffer natural disasters such as ice storms or tornadoes, or things of that nature that require a large expenditure of money that was unanticipated.  If they would remain under the Budget Act, that would mean that they would have to publish a hearing dare for amending their budget and spend several weeks in paper work and process before they could get the money to go ahead and fix their lines which really isn't very practical.  And I think that this is a simple way to take care of the things that we need to do to make the budgeting and the budgeting acts applicable but flexible enough for the public power districts to use and we do have some question about how these budgets are going to be prepared for public inspection and several of us are working on those and will be prepared to visit about the budgets and budget forms, I believe, on Select File.  So at this time I'd like to ask the adoption of the committee




amendments and advancement of LB 310.  Thank you.




SPEAKER BAACK:  Thank you, Senator Elmer.  Senator Warner, on the committee amendments.


SENATOR WARNER:  Mr. President, members of the Legislature, I was going to briefly say the bill as introduced was to clarify a number of procedures that had been raised by an Attorney General's Opinion as to how appropriately to address this whole area of committee amendments are consistent with the way the bill is introduced and I would urge their adoption.  And I don't know what else people are talking about for other amendments, but I'll look forward to seeing what that is if and when they show up.


SPEAKER BAACK:  Thank you, Senator Warner.  Senator Preister, on the committee amendments.


SENATOR PREISTER:  Thank you, Honorable President, friends all.  I rise also to support the committee amendments, slightly different reason than some.  I have had concern about removing utilities from under the Budget Act and I think the committee amendments address some of those.  I sat on that committee and I wish thank all the committee members for their indulgence of my concern.  I was going to submit.  an amendment today, but I'm going to be working with some of the utilities and doing some compromise on that so that we can come up with an amendment that's agreeable to the utilities as well as to address my concerns with good accountability to the public.  Perhaps many people don't know and I wish to share that our state budget, as many of us do know, is $1,492,000,000, rounded off, and Senator Moore might think that is heresy, rounding off that much money.  That was for fiscal year '92-93.  The combined fiscal budget for '92-93 for all of the utilities combined, the electric utilities and irrigation districts is $1,485,000,000 which is virtually the same amount as the state budget.  I just think we need good accountability, we need to look carefully at that kind of procedure that shows the accounting practices and how this money is spent.  So at this point I appreciate the committee's work in putting together the committee amendments.  I will support them and on Select File I hope to bring back an amendment that is addressing some additional concerns, mine as well as the utilities in language that we have all worked out to our mutual




agreement.  Thank you very much.


SPEAKER BAACK:  Thank you, Senator Preister.  Senator Pirsch.


SENATOR PIRSCH:  Thank you, Mr. Speaker and members of the Legislature.  I have a question for Senator Beutler if he would yield, please.


SPEAKER BAACK:  Senator Beutler, would you respond, please.


SENATOR PIRSCH:  Senator Beutler, as chairman of the committee, Natural Resources Committee, that this was heard in front of, I noted that the state auditor was not there to oppose this proposal.  Is that correct?


SENATOR BEUTLER:  As I recall they were not at the public hearing although subsequent to the public hearing we called the State Auditor's Office in and grilled them on several subjects including the standards that they apply and their attitude towards things.


SENATOR PIRSCH:  Ummm, hummm.  But this bill, the state auditor audits now public-power records.  Is that correct?


SENATOR BEUTLER:  Well there is some question as to whether they had the power to audit them, but, yes.


SENATOR PIRSCH:  Although it says in statute ...




SENATOR PIRSCH:  ...  that the state auditor shall ...


SENATOR BEUTLER:  The state auditor has not been auditing them doesn't want to audit them.


SENATOR PIRSCH:  And does not want to audio them.




SENATOR PIRSCH:  Well that's interesting.




SENATOR PIRSCH:  Yes, it's amazing.  Well I guess my ...




SENATOR BEUTLER:  Even the biggest appetites can have a full plate, Senator Pirsch.


SENATOR PIRSCH:  Well I just wanted to make sure that that was indeed the case and also to ask you are these procedures that the committee amendments change which will still require the certified public accountant, whoever that is, which will not be the state auditor, to do the similar things that we in the Legislature are under the auditing process of?  Could you follow that question?


SENATOR BEUTLER:  Well I think so.  They will do financial audits, however, they will not do performance audits.


SENATOR PIRSCH:  The certified ...




SENATOR PIRSCH:  But that's true in the Legislature also.




SENATOR PIRSCH:  And that is true with the public power districts.


SENATOR BEUTLER:  Yes, if I understand what you're saying.


SENATOR PIRSCH:  They do not do ...  they do not do performance audits for either the power board, never did...




SENATOR PIRSCH:  ...and they will not do it for the Legislature and never have.






SENATOR BEUTLER:  I believe that's true.


SENATOR PIRSCH:  The kind of audit reports, will they be the same as the Legislature will have as far as what they look at and how they ...  and what form they put it in?




SENATOR BEUTLER:  If I understand you%, question, the report that will be made will be in accordance with government auditing standards and tose are the same standards that the auditor of public accounts is currently applying to all political subdivisions and would apply to the utilities if they were auditing them so, yes, the same standards will be applied.


SENATOR PIRSCH:  And are those same standards applied to the Legislature's audit?


SENATOR BEUTLER:  To the auditor of the Legislature itself?




SENATOR BEUTLER:  I believe so.


SENATOR PIRSCH:  Okay.  Well I just wanted to point out, I guess, that indeed this is not opposed by the state auditor and that they are the same general auditing procedures that we passed in the bill regarding the Legislature.


SENATOR BEUTLER:  Yes, and if ...  maybe what you're getting at a little bit.  is whether ...


SPEAKER BAACK:  One minute.


SENATOR BEUTLER:  ...  this has-to do with substance or has to do with personalities.  From my perspective it has to do with substance only and with trying to make a sensible set of procedures to be applicable to the utilities since the Budget Act in its wording and in its structure doesn't really anticipate a utility kind of operation in terms of the budget requirements.  So, hopefully this is just more sensible and has nothing to do with ...




SENATOR BEUTLER:  ...  Breslow or the auditor's office.


SENATOR PIRSCH:  And I agree, I do support the committee amendment and I do think it probably is a sensible way to do that kind of across the state auditing.


SPEAKER BAACK:  Thank you, Senator Pirsch.  Senator Vrtiska.




SENATOR VRTISKA:  I'd like to ask Senator Beutler a question if I might, please, Mr. Speaker.


SPEAKER BAACK:  Senator Beutler, would you respond, please.




SENATOR VRTISKA:  In listening to your discussion just now, I guess the thought came to me, this particular audit is done by the power districts advertising for auditors to prepare their audit, is that correct?


SENATOR.  BEUTLER:  Senator, they would choose their own auditor.  I don't believe they are required to advertise.


SENATOR VRTISKA:  There wouldn't have to be a bid.  just a case of...


SENATOR BEUTLER:  No, they are not required.


SENATOR VRTISKA:  ...them deciding who they wanted to do the audit and then let them proceed.




SENATOR VRTISKA:  And I support the amendment,...


SENATOR BEUTLER:  They have to be...have to be a certified public accountant; would have to...


SENATOR VRTISKA:  But they have to be...


SENATOR BEUTLER:  ...  follow accounting principles.


SENATOR VRTISKA:  They have to be a certified ...  that's the point I was getting at, they have to be certified as knowledgeable in the area of auditing, and do the procedures set out by statute ...




SENATOR VRTISKA:  ...  as far as audits are concerned?








SPEAKER BAACK:  Thank you, Senator Vrtiska.  Any other discussion of the committee amendments?  Seeing none, Senator Beutler, would you like to close?  He waives closing.  We will now vote on the committee amendments to LB 310.  All those in favor vote aye, opposed vote no.  We are voting on the committee amendments to LB 310.  Have you all voted?  Record, Mr. Clerk.


CLERK:  25 ayes, 0 nays, Mr. President, on adoption of committee amendments.


SPEAKER BAACK; The committee amendments are adopted.  Senator Warner, would you like to open on the bill?


SENATOR WARNER:  Mr. President, members of the Legislature, I move LB 310 be advanced while there are 25 people present that are voting, but I think we have ...  the committee amendment is the .,ill, and it's been discussed at some depth, so I'll suspect there is no need for additional discussion.


SPEAKER BAACK:  Thank you, Senator Warner.  Any discussion on the advancement of LB 310?  Seeing none, do you wish to close, Senator Warner?  Waives closing.  We will now vote on the advancement of LB 310.  All those in favor vote aye, opposed vote no.  We are voting on the advancement of LB 310, have you all voted?.  Record, Mr. Clerk.


CLERK:  27 ayes, 0 nays, Mr, President, on the advancement of the bill.


SPEAKER BAACK:  LB 310 advances.  Go to LB 516.