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House | June 14, 2016 | Chamber | House Reform

Full MP3 Audio File

BLANK_AUDIO] We're good. >> Okay. members we obviously have a quorum to get started, and we'd like to get the committee meeting underway. Welcome to the house regulatory form committee. Wanna introduce some special people we have herewith us today, our sergeant at arms, Reggie Seals Marvin Lee, Rex Foster and Randy Wall and we also have a good collection of pages with us. O'Connor Brown, Lexi Cop, Dalsie McMilan Dylan Winstead, and Westin Whitmire. If that last name sounds familiar, it should be because that is Representative Chris Whitmire's son. Glad to have you all here. Hope you have a profitable week. Also i want a special thank you to our staff here. This was not a necessarily short or briefly noticed meeting but there's a lot of other things going on and a lot of amendments being done for our Regulatory Reform Bill proper. So we're keeping our staff busy. Really appreciate Karen Chochrane Brown stepping in and doing our summary and the staff work here with us. Along with Jeff Hudson, Chris Saunders. And a special welcome, and I'll ask this young lady to stand. Amy Darden, if you would stand and let me introduce you to the committee. Amy is new to our staff and she'll be assisting with the regular form committee going forward. Amy, welcome. We just have one bill before us this morning. That is HB 976, Enhanced Oversight of Service Contracts/PED. And bill sponsors are here, we have Representative Horne, Representative Harley and Representative Dollar and also senator Randomen, so sponsors you have the floor. >> Thank you Mr Chairman we'll actually try to make this very quick and appreciate Senator Randomen being here. All of my colleagues To your own PED and of course Chairman Horne is one of our Co-chairs. You don't need to read this but actually you may wanna read this. Some point in time PED data report on enhanced over stative service contracts to ensure cost effective performance and And really this is a follow on of a prior study and some prior legislation that Senator Randomen had looked through the system last time and basically the summary of the findings of this, I think I can give you this in about a minute or two The summary of the findings were that the study found about 511 Million Dollars actually more than that, 41% of the estimated value of her value services contracts that did not involve full utilization of competitive biding. So, you're getting all these contracts out there, they're not being Competitively bid. And we're talking hundreds upon hundreds of millions of dollars. State agencies were not documenting the results of the sourcing. Evaluation, the solicitations for services were not consistently including necessary attributes or how they were measured. What they're doing And contract management administration needs improvement. That's been an issue in state government for several decades. Going back to the 80's as far as i know. The recommendations were very straightforward. State agencies wishing to contract for high value services should Should submit, [LAUGH] Services should submit. Business case to PNC that is purchase and contract, with DOA, and the officer state budget management for review and approval. PNC should procure and implement a contract management system, and this bill It all does exactly that. Section one is creates the template for the business justification case just for contracts. You have documentation required for approval of provider changes. When those are required this is very verinated. Certain exceptions in In there, sort of definitions and then on over into section three talks about putting together the contract management system so, this Bill is very straight forward. we've got plenty of members here who can answer any questions if you have any Questions, very straight forward and we appreciate your support. >> Questions from the committee Representative Black Well. >> Mr. Chairman, I apologize how a few minutes later I don't know if Representative Dollar may be commenting on this at the out set, if he did I apologize for bringing it up again. In terms of the services that might be subject to this.

Will this have any impact on the prison maintenance services that have been at issues over the last several years from time to time. >> Representative Bell. >> We certainly those types of contracts Would be among the mini the multitude of types of contracts that would have to flow through this system. So that you have the appropriate oversight and accountability. And people are making the business case for what they are doing. >> Follow up. >> Okay and And on page three of the bill where in section 2A 1, where it says provide for an examination of each service provided by each state agency. This is going to be, I take it, every services provided by any state agency state I've settled for example the mental hospitals and services might be considered for privatization, child care is provided by the state of any service anywhere in state government Will be required to undergo this process. >> Senator Randleman. >> Mr. Chair, we have Mr. Heffener/g here from PED and he can be sport on with any questions that Representative Blackwell has. >> Mr. Heffener. >> My name is Chuck Iphrim I'm with with Program Evaluation Division. [BLANK_AUDIO] The issue there is that there was concern that there were some commercial services visa ve inheritable governmental services that could potentially Potentially be performed by the private sector more cost effectively and we really didn't have a complete inventory of those services that potentially could be eligible to be outsourced and the thinking was if we could Come up with a comprehensive list of commercial services and consider them systemically on the merits of whether they should be performed in house or through a contractor that it would provide us with the Best information and our best ability to cost effectively perform those services. >> Followup? >> Followup Mr. Heffner, I'm not sure I understood your reference to commercial services. Section two of the bill seems to say that we were providing for an Examination of each service where the governmental commercial whatever provided by each state agency. So there is absolutely no service being performed currently by state government that's not gonna go through this process the way I'm reading that. >> Mr. Heffren. >> In the report we classify services into two categories as the feds do. The feds classify everyone of their services as either inherently governmental or commercial, and they have prespecified criteria on what they consider to be inherently governmental. For example when you have authority over a person's health safety and welfare. Okay you can make decisions to take away somebody's money or livelihood, the feds would say that's an inherently governmental activity It should not be considered for being performed by the private sector. We don't say that that's the appropriate criteria. But when OSBM would consider all activities. There are surely some activities that shouldn't be considered for outsourcing, and they would make that call first. And those are what we call inherently governmental, and then other activities that we do think are eligible or should be considered for outsourcing. We classify those as commercial and then the consideration and then become strictly, how can I get the best value for the dollar spent. And so that is a filter for some of the services, they wouldn't even be subject to consideration if they're determined at the forehand to be inherently governmental. >> Follow up.

>> Please. So rather than the legislation defining what services are gonna fall into these categories. OSBM will set up it's own criteria and it will determine unilaterally what it wants to look at and what it want, and the legislation don't have anything to say about that. Mr. Heffren/g. >> The recommendation is for OSBM to create this- complete this evaluation I think it's December of this year. December of 2016. And to report to you all, their conclusions. So, that's how it's set up in legislation. Is there essentially, the intend is this, they don't and they can't without your consent.>> [BLANK_AUDIO] Other questions from the committee? >> If I may just follow up on that- >> Representative Dollar. >> Thank you Mr, Chairman. What we're really trying to shoot for here is a rational way of looking at what services are contracted, what services are not contracted, or could be potentially contracted. We're trying to improve contracting on the whole by setting up that you're gonna have to have a business case justification for the services that your contracting. We're gonna do this in a far better fashion than what it's been done in the past. Any recommendations that come out of As part of the study portion of this bill would come back to the general assembly. In other words, they would not be able to act unilateral on the wrong. Those decisions are decisions that would have to be made over time by The General Assembly itself. >> Senator Randleman. >> [BLANK_AUDIO] Representative Blackwell. This may go to more to the point of pause you're asking. This study came forward because in program evaluation we can actually submit request on items that we would like to have reviewed. So this request originated to see if the State of North Carolina in privatization, if we are actually saving taxpayer dollars. So when the program evaluation staff started looking at this, it was very hard to evaluate if the state was or wasn't Because there's a lack of data. I think in some instances they couldn't even locate the contracts. So we're just trying to make sure in the contract process that we know that taxpayers are getting the best value for our dollar. That is the whole intent of the study and the legislation. >> Other questions from the committee? Representative Bishop and Representative Mayer. >> Thank you Mr. Chairman, I haven't been exposed to this before and one thing just as I was mosing the language in section one and two places, maybe further down the field than this is already but just took notice of the fact that this business case justification template is forth to document the business case for changing the provider of one or more agency services. And then in subsection b, notwithstanding any other provision of law state agencies shall not change the provider of an agency service until it's done all of the following. I understand the importance of getting state agencies to go through a deliberatively thought process rather than just sort of act arbitrarily or on instinct. But I'm also concerned about the fact you walk a fine line between that and bureaucratizing business judgement in a way that sort of results in inertia. Freezes in place perhaps the way we've always done it. Because someone's gotta go through a process, the documentation process maybe that's fine but then obtain a court written approval from the state purchasing officer, or they've gotta make sure their procurement staff have demonstrated competency. There are compliant reviews to be taken care of, beyond that they consult with the joint legislative commission on the government operation to develop the change. Just seems to me that if someone is busy carrying out responsibility for state government they look at the list of things they've gotta go through to get this contract changed to someone else,

and they just go shrug their shoulders and just leave it as it is. And perhaps leave inefficiencies in place and so forth. I guess I'll direct a question then to Representative Dollar, is there something about this that can assure us that we aren't doing that. freezing perhaps inefficiency into place and discouraging state employees from looking at all times at opportunity to improve efficiency and improve delivery of service by considering changes of vendors. >> Representative Dollar? >> Well, basically you have a 50, general fund is 22, 23 billion dollars, the total is $50 dollars. You have a $50 dollar enterprise and you really do have to have little or no structure with respect to contracts. I can tell you from Involvement in and outside the state government for the last 30 plus years. Contracting and state government has been abysmal, it's been fraught with problems fraught too often with politics, driving certain contractual decisions. They found the study that PED found, found 41%, they were Just looking at the highest value contracts, 41% $511 million worth of contracts that didn't fully utilize competitive bidding. So and trying to document that was a nightmare as well so in many cases you didn't really have documentation or data structure that you could look at and say okay, there's a rational reason why you wanna single source this year. In other cases it seemed to be this is just what we want to do. So what the Attempt here is and if any of my colleagues wanna comment on this, is to bring a rational business basis to how we're pursuing contracts, and to get it in some kind of structure because of the literally billions of dollars that we're talking about. And we're not assured right now in many of these contracts that we are actually getting value, or that we have metrics or measures to be able to determine should we be doing this as a in house state function, should we be contracting this service out. >> Follow Up? Mr. Chairman. >> Representative Harley would like to answer as well. Representative Harley does not wanna answer this he wants to speak to something else. Follow up? >> May I follow up? Thank you. Perhaps you could speak directly to this issue than Representative Dollar. Again the thing that caught my attention is the idea of changing the provider. And again I see the section three talking about a contract management system. In fact what it made me think of is chairman Wadell's bill about disclosing contracts on state agency websites. I've forgotten exactly what the result of that was. But the reporting and letting more light be shone on contracts that exist. I get the concept of imposing a requirement for business justification. What I think troubles me is the notion that the business justification requirement is imposed only for changing the provider. I mean, you could, it seems to me perhaps say instead any time an agency enters into a contract, renews a contract. I don't know how you do it if they're gonna not do one of those things. In other words you want them to consider those possibilities. It seems to me whether privatization would be a better route to go in the case of particular services. I don't know quite how to trigger that. But the problem I think I think I'm seeing is that required only in the instance of changing a provider, which again seems to me to then promote inertia and incumbency rather than having a neutral notion that whenever there's a new contract, or a renewed contract with someone. And I agree, the problem that you cited Representative Dollar that contracts are being done without competitive bidding, I mean that's an obvious thing that implies relationship or that kinda thing can creep in inappropriate influence. Will there be a better way to trigger it than to say when changing the provider one or more agency services that's the only time we're gonna have this in position. >> Representative Dollar. >> Let staff respond to that. >> Thank you the charker/g from PED. The intention was that whenever the process to consider changing Changing a provider was initiated a business case would be performed. So in other words scenarios performed in house by state workers

were provider. We wanna consider outsourcing it, that's the change in provider that would trigger the business case. Another scenario. We issue a contract to a private entity for the contract period of three years plus two years of extensions. At the end of the five years we are going to go through the process of considering choosing another provider. So that would trigger again the process to complete a business case because the world might have changed over those five years, the conditions might have changed, the level of competitiveness might have changed, the business process used to perform the service Might have changed information technology might have changed so we thought that all those issues identified in the business case should be reconsidered or at least there should be some demonstration that you did think about again. As the condition of initiating a request for proposal and pursuing the procurement process as statutory l required. >> Mr. Chairman. [INAUDIBLE] comment. >> Let me just say we've got questions from Representative Meyers, Stam and Whitmire. It quite possible some information in those questions so if you don't mind, I I'd like to go on to their questions so we can come back to you at the end of this one [INAUDIBLE] Representative Mayer. >> Thank you Mr. Chairman I have a question to the bill sponsors about section three and the expectation that the report from OSPN that have be returned to us by December first. Given that PEV wasn't able to get all the information that they needed Because of the lack of clear contracts and why do we believe that OSPM will be able to really come back with an adequate report in that short of a period o time. Can you talk about the timeline there? >> Representative Dollar. >> Well I mean it's a, they have purchasing contract section This is the issue that's been discussed for years. The study has been going on for sometime over the past couple of years and a prior related study to this. And prior related legislation so we believe it will be sufficient time to to pull that together and of course as most studies I've seen the agencies don't always meet their deadlines, they come back, they say we need more time, if they need more time we'll be coming in to the general assembly and I'm sure we'll grant them additional Time if they need additional time. >> Representative Stan. >> A minor point. Page 2 line 1, with an exception for budget bills which are by their very nature temporary olies have real questions about notwithstanding any other provision of law. You can either tell me what that what those are or drop it and I would suggest dropping, notwithstanding any other provisions of law. If the sponsors don't mind or if there's some other law that would affect it, list it. >> Representative Burr >> I would prefer the staff for a comment on that? >> [INAUDIBLE] I really can't speak. Ben Stanley drafted the bill for us and I relied on his legal expertise and the appropriate language on that. So I'm not qualified to speak to that [COUGH] >> We'll get you an answer for that That before it hits the floor or before we have to vote down on the floor. >> Representative Whitmire. >> Thank you Mr. Chair I'll direct the question to Representative Dollar and anyone who may have something to contribute. And again this relates to Representative Bishop's question. There's a couple of things in our current budget right now that some of us have delved into that go back to bureaucratic muscle memory to default to providers. Whether it's non profits or whatever that over the years have become the default organisation to provide certain services. So while I appreciate the intent of this bill with the enhanced the oversight, could you please enlighten me if I've missed it, of anything in here that might help mitigate and when I say muscle memory you know when we get into That's how we do it, that's the organisation we got to for this and that it may be 20 years that a particular organisation has been a provider, and they may show up as a small amount of money.

But it's the tip of the iceberg of where there is millions and millions of dollars have gone into things that may be totally counter to the mode of operation in certain years that we may actually wanna support. Is there something here or in another measure that we're working on, that might address that concern? And I apologize for that been open end, I'd be glad your clarify is needed. >> Representative Dollar. >>Well, I thinking if some of my colleagues, if they differ from what I'm saying or I don't know how to explain it well. I know the scenario you're obviously discussing. I don't exactly if those funds are grant funds, or they're contracts or what heavy, but generally speaking I would think you would wanna favor this legislation. Because this means you don't just sort of keep doing the same old thing you've always been doing. You've gotta take a look at it when those terms are up, you've gotta have a business case for it, if there are changes you've got to actually look at what those, you gotta have actual documentation for approval for providers to make changes. So [BLANK_AUDIO] If you're worried about things being sort of the same old, same old, year after year after year, decade after decade, this bill helps you in that regard. >> Thank you. >> Any other committee members who'd like to ask a question who have not asked one this round? Okay, Representative Bishop we're back to you again and then Representative Blackwell. >> Thank you Mr. Chairman. Further toward the point I was asking about before, I attempted to draft and would suggest an amendment to where the word change appears in section one. So in page 1 line 12, instead of changing the provider, I would say selecting the provider and on the next page, page 2 line 2, shall not change the provider say shall not select the provider I'd like to send it forth Mr Chairman. [BLANK AUDIO] >> And initial consultation with staff representative Bishop it looks like it's gonna lead to changes in the bills that might not be that one portion. [BLANK AUDIO] we're gonna go on to represent a Blackwell's question mark while staff looks at the proposed amendment, representative Blackwell. >> The thing Mr.chairman I don't mean to drag this out I just confuse by how this process is gonna work, reference was made to a study being done and I think I heard someone say nothing would happen without approvals from the general assembly. In terms of changing this things, I can't find that in here and I'm wondering where I'm missing it on page one it sounds like the sector department administration shall develop a plan I don't see I mean this business case justification template. I don't see any provision for approval which may not be required but I don't see it there. Then in subsection B at the top of page 2 it says a state agency won't change the provider until it's done all the following, the only reference that I can see that sort of related to the general assembly is that there is a provision in paragraph 3 for consulting with the joint legislation commission on government operations, but I don't see a requirement approval from the general assembly or otherwise and I don't see any reference to a study then if you go over to page 3 in section 2a OSBM is to develop and implement a plan and on patline/g 11 it says shall report it to the joint legislative commission on government operations I don't see a requirement for an approval I don't seem to reference to a study. I'm just wondering if I misunderstood reference to what's being studied and what approvals may be required. It appears to me the way it's worded, is that the process can take place Place completely within the administration subject to their reporting requirements and this consulting requirement and is wondering if I'm misreading that missing something.

>> Representative Dollar>> Thank you well let me try and ten see if staff, let me give a shot at it and I'll see [INAUDIBLE]. Section one is dealing with how we look at contract currently, okay? The setting of the oversight for certain service contracts there in section one and those following section in terms of how we're managing those contracts. The part section two is where we're talking about a plan to really get state government to evaluate to services that are being provided and as you note there on page three line 10 it says no later than December 1, 2016 office of state budget statement shall report a plan to the joint legislative commission on government operations to go off and to physical research division of the general assembly. And plan develop for pursuit to the section shall do all the following. So there's obviously there's no implementation language there based on what OSMB is being directed to study and to evaluate. But with respect and then of course in section three you've got a contract management system and again section one is laying out the reforms really for enhancing the oversight of service contracts which again the PV study in pretty painful detail Demonstrated that oversight is really in no way sufficient and in no way is truly rational and Mr.Hafer maybe you wanna. >> Let's just check care for The intent is to get the general assembly involved and aware of the process as it was going along, so they would have the opportunity to they would be aware and have the opportunity to interject throughout this entire process. What it does is provide you all an opportunity to be part of the process Process on implementing this change and to be able to weigh in in the development of it versus not having any way to become aware of what's going on until it's really too late to cost-effectively suggest changes. With respect to Mr. Hefner the way I read this on page 3 on line seven and eight. It says OSBM shall develop and implement a plan. This is one of those situations in which it would be incumbent upon the General Assembly to try to undo something that has already been implemented. And we'd had from December 1st of 2016 until sometime in May for somebody presumably to introduce a bill in the legislature To disapprove something. I understand what you say the intent is, my concern is that the language of the bill does not mirror what you are saying the intent is. [SOUND] [BLANK_AUDIO] >> Bill sponsors wish to address the question? >> Well we could refer to staff I think, he has an answer on that. >> Mr. Hefner. >> I mean the thinking was the executive branch is responsible for implementing policy and procedure as outlined and by the general assembly and so they are responsible for implementing it but the idea was they have to develop a plan first before they implement. And then they have to submit that plan to you all for your review And so yes they will be responsible for implementing it but this gives you the opportunity to change the plan [BLANK_AUDIO] >> Any

other questions from the committee? Representative Stevens. >> So I guess the question the bill sponsors will we be better to say the office of state management shall develop and present a plan, because if not I agree with representative Blackwill. They're gonna go ahead and do this plan before you ever really get to see it. [BLANK_AUDIO] >> Representative Dollar. >> Mr. Chairman let me make a suggestion cuz I think one of the chairs concerned Concerns is time with respect to representative Bishop's amendment. I believe representative Bishop's amendment would change two words and two locations if I recall correctly right? Right. And I believe that what representative Stevens is suggesting is removing the The term implement or really removing the term and implement. So what I would suggest is if it's the pleasure of the committee to move the bill forward we can move the bill forward and we can incorporate those Changes into an amendment on the floor and we'll run that amendment on the floor and make that change. >> Mr. Chairman. [SOUND] >> Representative Bishop. >> I can't agree to that. The problem that I have with this is I think what's wrapped up in this bill is a very fundamental question about the way in which we are or are not gonna be privatising Service contracts and I think it's an extremely important issue which is so my point which is what I call it just sitting here extemporaneously. The language, it looked like it locked in incumbency, thought it might be able to be fixed staffs pointed out that word change versus select has to be done and a number of other places. And I don't think the thing ought to be moved with that issue unresolved and the other issue that Representative Blackwell has brought up is equally fundamental. If there is a plan to develop and implement a plan to determine whether services should be privatised well, my view is that The executive branch ought to be perhaps developing a plan and then making a recommendation to the general assembly but it ought not to be presented as a fait accompli it seems to me. And I think all of that is unclear even if you strike the phrase to implement. So I think they are just fundamental changes. I think they ought to be fixed before the thing advances as this committee. I would have to vote against it. In its present condition. >> Let me share if I might. I can tell you from my 30 plus years of experience in and outside of state government, we have an abysmal contracting process . You got You don't have a business case being made. You have billions of dollars being contracted for and spent. You've got unfortunately in certain situations they've been alluded to here, sometimes more politics involved in contracting than what should be involved in contracting. You have decisions being made with respect to changes in contracts for which there's a contract and now we're gonna shift the contract. There's an existing contract and now we're gonna add all this sort of stuff and And no real oversight for that. I can tell you the reason why the four of us are on this Bill in the House in the Senate is that we have looked over fairly extensively the detailed research and report that was made. By PED. let's say actually other research has been beyond this report and the scenario is in dire need of this type of reform. Reform. And so we're either gonna reform this system or we're just gonna let hundreds of millions of dollars be contracted out and have no rational basis in many cases for that. >> Representative Stephens. >> Thank you and Representative Dollar I I listen to you and I think we completely agree with you but what you think this bill does and what we read it to do are sort of two different things. And we wanna help you put the strength in here that will in fact

make sure we're doing the oversight before the bureaucracy just continues to go on the way it's going on. So I think What you're hearing is that we agree with everything you're saying, but what's in the bill is not necessarily what is gonna make that happen. So if you'd like some of Representative Bishop's assistance, then that might be the way to go. Representative Bishop, Representative Blackwell more of your attorney element out here. I'm not volunteering [BLANK_AUDIO] [BLANK_AUDIO] >> Any other questions from committee members? representative Stam. >> I was sort of I guess is a middle ground and that is I'm willing to go forward with it, I just think we ought to go ahead and do the amendments that we can figure out. If we have to do some more on the floor we will. But why not go ahead and do those in the next few minutes. So I've discovered that, I believe we should delete that notwithstanding language then I'll ask staff to prepare that. >> Is the gentleman making a motion? >> Yes I make a motion to delete the notwithstanding language and staff is preparing that. >> In reference to representative Bishop's amendment? >> No. I was Making a suggestion about his that instead of doing it on the floor go ahead, and do it here and do other amendments that the committee agrees to here and then if we spot some other technical defect we can deal with it on the floor. But I know some of the people on the floor don't like a lot of amendments on the floor unnecessarily because they, confuse ourselves [LAUGH] [BLANK_AUDIO] All right, Steph, working diligently have got an amendment ready according to Representative Bishops. Questions So I'm gonna have staff review the amendment. Members of the committee if you will pay attention to the recitation of the changes they are fairly detailed and extensive, but simple, like the bill. [LAUGH] Staff, Karen Cochran Brown. >> Thank you Mr. Chair, I will read the amendments, the intent as Representative Bishop indicated is to make changes in section one in all of the places that referred to change, changing, changes and substitute selection. Accordingly the amendment reads the Representative Bishop moves to amend the bill on page one line 12 by deleting the word changing, and substituting the word selecting. And on page 1 line 19, by deleting the word change and substituting the word selection. And on page 1 line 35, by deleting the word changing, and substituting the word selecting. And on page two line by deleting the word changes and substituting the word selection. And on page two line two I'm deleting the word change and substituting the word select. On page two line five by deleting the word change and substituting the word selection. And on page two line In eight by deleting the word change, and substituting the word selection. Page two line 26, by deleting the word change and substituting the word selection. And on two line 30, by deleting the word change, and substituting the word selection. [BLANK_AUDIO] [CROSSTALK] Think you've heard the amendment from Senator Bishop. >> I'd just like to comment that that is really remarkable that that was done in such a short period of time. That looks good to me. Thanks. >> We have a remarkable staff. Those sponsors, any comment on the prose memo? >> We're fine >> Get the memo before the committee. All in favor say Aye, >> [CROSSTALK] >> all oppose Nei. The Ayes have it Amendment is passed, and we have another amendment from Representative Stevens. [BLANK_AUDIO] Staff, care to read the amendment >> Thank you Mr. Chairman. What this will do is on page three line eight, it will delete the word implement and substitute the word submit. So, develop an And submit a plan to determine whether services and on page 3 line 20, by deleting the word implementation and substituting the word submission. So, you say agencies shall fully cooperate with LSBN developments submission of the plan. >> Any comments by the name and sponsor? Representative Stephens?

>> No >> Any comments by the both sponsors? We're good with that. >> Okay, the amendment before the committee you've heard it read. All in favor say aye >> aye. >> All opposed nay. ayes appears to have it, the ayes have it. The amendment is adopted and I believe we have one more amendment from Representative Stan. >> Jeff Hudson. >> Thank you Mr. Chairman. The amendment would amend page 2 lines one and two by rewriting those lines to read on subsection b, documentation approval of provider change is required. A state agency shall not change provider of an agency service until it. The effect of this is to remove the not withstanding clause that Representative Stephen wanted to remove. We'll also need to make additional technical changes to make this Consistent with the amendment from Representative Bishop because the word change has now been changed to selection. We'll do those when we incorporate it into a PCS. >> Representative Stan. >> To give comfort on this, in statutory construction the last statute controls anyway. So just because this is because other things and the fact that it doesn't really matter. And it just takes out confusion when you do not withstand it cuz when you got six not with-standings all over the statute that contradict each other. >> Representative Speciale could you reread what that changes Mr. Edson. >> I can tell you what the changes and then I can re-read the amendment if you would like but the effect of the amendment is on page two, lines one and two, essentially removes the words notwithstanding any other provision of law. So the senate's after the hyphen on line one would begin, a state agency Shall not. [BLANK_AUDIO] Representative Jordan. >> I want to ask Representative Stan a question if I could. >> I yield. >> Could you further clarify what you were saying, because this is the last change in this statute then we control. If there's anything else in law that would That would prevent this, this statute overrules it? >> There are various rules of statutory construction, one of which is that if there is a conflict the latter statute controls. Now there's another one that if a more specific statute would control over a more general statute. So there are lot's of those in there. But there's no reason to throw in this notwithstanding language because then you get into conflicts between different statutes. All of which say, disregard other things. >> Representative Queen I just have - >> We are on the bill- >> We are currently debating the Stam amendment. >> Okay, I will speak on the bill when we get done with this. >> Okay. Circle back around to. Any further comments by the sponsors on the amendment? >> We're good with the amendment. >> Okay the amendments before the committee. The Stam amendment all in favor say aye. >> Aye >> All opposed nay. Ayes appear to have it. The ayes have it the amendment is accepted. Representative Queen. >> My comments are sort of general. My experience with privatization comes from private housing couple of prisons in my district up in the mountains 15 years ago or whenever it was. And it didn't work out very well. It was a business case. It was cheaper, they fed them less, kept them in tighter quarters, had fewer guards Etc. They made a business case, but it didn't work out very well. All I'm asking is, hopefully as we proceed down this road, that the business case is not always the only thing that government evaluates itself on. These are all across government are those services that we spoke of. I'm hoping this opens the door just to rate everything you can do cheaper cuz it's not necessarily better. Can anyone give me a little comfort in how this is gonna proceed so that that's not the outcome? Representative Dollar. >> When you see Senator Randleman's name on a bill and Representative. Hurley and dollar. We're not ones who are rushing to the door to privatize everything So I think you can have the great deal of comfort in that. >> Representative Blackwell. >> Thank you Mr. Chairman. I may ask the staff to prepare another amendment. I don't know whether we're gonna get it done here if they can, regardless

of that whether or not we are on the floor I can do it there, but I'll just tell the committee, what I have proposed in concept is here on page three in section two which says the plan developer pursued in the section will do all the following. I think we should ask them to also include in the plan the criteria they're going to use to make the distinction between those state services that are not going to be considered for privatization, and the ones that are. In other words it goes back to the reference it was made earlier to what is an internally governmental function. And I don't think there's anything in here that addresses that Then I think they would at least tell us how they're gonna make that choice between what can be privatized and what can't be. >> So also- >> When we get it ready fine, but we don't I'll offer it on the floor. >> We will. Okay, it's almost ready, but if you have another question, Representative Jones wanted to speak. >> Thank you Mr. Chairman I just want to make a comment if I could, backing up to this Business Case Justification that was mentioned. And just to say that a proper Business Case Justification does take more than the cost. I think any self respecting business looks at the value of the service. And you can think of a processing business, perhaps that could try to sell a food, that was a lot cheaper, but tasted terrible and nobody would buy. Or a health care service where we're gonna provide that service cheaper, but But it doesn't cure the patient, or you can take that to any kind of business., any kind of service., any kind of product. So, just to say that I think we can take some assurance and saying that a proper business case justification is not just looking at, we're gonna do it the cheapest way, but If they were providing the best value for the bank or whatever, but the best value. >>Thank you. Senator Animon/g >>Thank you Mr. Chair, and you know we had one example given and our also given example.Each of us live in our own communities, so we all have projects Projects that are going on in our own communities, and we kinda have that constituents in our communities. Say were had a little sink hole, and one of the small towns that I represent, think the hole has been there for two years. The town does not have the money to fix the sink hole. So, Representative Stephen and I worked on getting that little thing sink hole fixed I think an outside contractor had presented the bill at $145,000. So I asked the DO to do an in house analysis on how much the project would cost. That cost came in $50,000 less. And I think they actually did the job less than 95,000 85,000. But anyway we're looking to save tax payer dollars. So paying more in lot of what you're saying, paying more may not necessarily bring the results the way you want. So that's why you do need a Business Case that so we know the tax payers we're getting best value for the dollar Not our dollar, The tax payer's dollar, and that's what this is all about. >> Thank you Senator Dinniman. [BLANK_AUDIO] >> Representative Blackwell we're gonna go with your amendment. >> I think we're working on it more now, cuz in it to the bill sponsors on the floor hopefully. >> The chair is very grateful [LAUGH] [SOUND] >> I like making a good impression on you. >> The Chair is open to a motion. To roll the amendments into a PCS, unfavorable to the original, favorable to the PCS. Representative Stevens. >> I make that Bishop continue to look at this bill. >> Thank you. Any other comments by community members. All in favor say I. >> I. >> All oppose nei. It's good to have it. I just wanna say I wanna thank everyone for your patience and staff, a wonderful job, thank you. [BLANK_AUDIO] >> We thank the committee. [BLANK_AUDIO]