i

STAFF REPORT ON

SELECTED TRANSPORTATION AND COMMERCE AGENCIES

PREPARED FOR THE

GOVERNMENT ACCOUNTABILITY AND EFFICIENCY REVIEW SUBCOMMITTEE

OF THE

JOINT COMMITTEE ON STATE AGENCIES AND GOVERNMENTAL AFFAIRS

August 30, 2006

Exhibit F

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TABLE OF CONTENTS

PAGE Report Objectives.................................................................................................................................... 1 Disclaimers ............................................................................................................................................. 1 Highlights and Analysis of Agency Reports: Arkansas Department of Aeronautics ................................................................................................ 2-9 Arkansas Aviation and Aerospace Commission .......................................................................... 10-11 Commodity Boards .......................................................................................................................... 12-20

Arkansas Beef Council Arkansas Catfish Promotion Board Arkansas Corn and Grain Sorghum Board

Arkansas Earthquake Authority ..................................................................................................... 21-23 Abstracters' Board of Examiners .………………………………………………………………………… 24

1

REPORT OBJECTIVES

This report has been prepared by the Research Services Division of the Bureau of Legislative Research to provide limited staff analysis on the applicable review criteria provided by Act 2218 of 2005. In particular, the objectives of our review were to:

Determine whether agency objectives and services are consistent with authorizing legislation.

Assess the utilization and results of agency services based upon statistical information and other available information.

Determine whether the agency operates in an efficient manner.

To identify any considerations relevant to potential consolidation, transfer of programs or possible duplications of services for consideration by the Subcommittee.

Identify any significant areas of concern relating to applicable administrative and regulatory review criteria.

Assess the impact of the loss of federal funds or federal intervention if the agency was abolished.

DISCLAIMERS Our review was not intended to be a performance audit under applicable governmental auditing standards. Additionally, the review was not intended to determine compliance with applicable federal legislation. We have attempted to identify the sources of information presented in the report. Due to limited staff resources and the limited scope of our review, data has not been independently verified.

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ARKANSAS DEPARTMENT OF AERONAUTICS

MAJOR SERVICES

o Inspection and licensing of airports and related air transportation facilities. o Administer State Airport Aid Program (and promote economic development) o Coordinate planning for air transportation between federal, state, and local governments.

KEY STATISTICAL DATA (YE 6-30-2005)

INDICATOR DATA SOURCE

Number of Airport Safety Inspections by FAA Certified Staff 91

Agency GEAR report (FAA contract)

Airport Improvement Grant Expenditures $3,436,106 Agency GEAR report Number of Windsocks Provided to Airports or Hospital / Emergency Heliports 126 Agency GEAR report Number of Wire Markers Provided to Airports or Hospital / Emergency Heliports 42 Agency GEAR report Attendees for Flight Instructor Refresher Clinic 175 Agency GEAR report Attendees for Inspection Authorization Clinic 125 Agency GEAR report

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FY06 BUDGET SUMMARY

FY06 BUDGETED POSITIONS

FY06 BUDGETED EXPENSES

Staff (including matching) 4 $288,610 Operations 178,529 Grants to Cities and Counties 6,500,000 Total 4 $6,967,139

DEPARTMENT OF AERONAUTICS FUND (SDA) FISCAL SUMMARY

FY05 FY04 FY03 Cash in Treasury - July 1 $9,294,215 $11,448,746 $9,494,192 Cash in Treasury - June 30

$11,380,428 $9,294,215 $11,448,746

State Grants Awarded * $4,649,139 $5,418,740 $5,375,528 Grants Expenditures $3,436,106 $7,161,318 $5,000,000 Grant Obligations $4,753,437 $3,649,674 $5,669,190 Excess of Cash in Treasury over Year-End Grant Obligations

In Excess of $6 M

In Excess of $5.5 M

In Excess of $5.7 M

Total Costs of Projects Receiving State Grants

$22,494,148.86

$33,408,711.26

$32,594,180.66

4

OTHER KEY UPDATES

The Department is currently receiving Federal assistance (CFDA 20.106) from the Federal

Aviation Administration to develop a statewide airport improvement plan. Federal funds are expected to cover 95% of the project costs. The Department has entered into a contract in the amount of $749,412 with LPA Group, Inc. of Little Rock to complete the plan. The contract calls for the report to be completed by October 1, 2006.

Federal Airport Improvement 2006 State of Arkansas apportionment is $3,484,487.

The June 30, 2006 balance of the Department of Aeronautics Fund was $13,416,270.36. The Department indicated that grant obligations to specific projects at that date were $5,627,393.64 ($4,888,239.67 state grants and $747,153.97 state match for FAA Airport Improvement Grants to local governments).

FY2005-07 biennial appropriation includes $12,000,000 for a federal block grant apparently not approved at the federal level.

SUMMARY OF RESEARCH

A comparable state aviation agency with similar state aviation planning and grant administration was noted in all eight states reviewed. However, only one state of the eight states reviewed had established a separate agency for these purposes (Oklahoma). In six of the eight states reviewed, aviation was a division of the state transportation department (Missouri, Tennessee, Mississippi, Louisiana, Texas, and Iowa). Aviation was a part of the Commerce Department in the state of South Carolina.

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KEY ISSUES

o Continuation as a separate agency or consolidating with another department in Arkansas such as Highway and Transportation or Economic Development.

o Plans to utilize un-obligated Department of Aeronautics Fund balance in excess of $7.5 million at June 30, 2006 not currently committed to specific projects. The Department of Aeronautics may need to request additional appropriation authority to utilize available funds if the General Assembly wishes a more expansive airport grant program for the next biennium. (Note: Special revenues for the operations of the Department are from the sale of aviation fuels and other aviation products for use in aircraft weighing less than 12,500 lbs. per Arkansas Code 27-115-110.)

o The discussion of a statewide system or procedure to track grants to local government in the staff Summary report on page 22 is applicable to this agency, as well as several other state agencies awarding grants to local governments.

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DEPARTMENT OF AERONAUTICS - RESEARCH OF OTHER STATES

STATE

ORGANIZATION

STAFF ADMINISTER

AIRPORT GRANT

PROGRAMS Oklahoma Now a separate agency - previously

part of Department of Transportation 11 YES

Texas Aviation Division within the Department of Transportation

67 -- 37 in Airport Development and 30 in Flight Services

YES $68 million total (including $18 million state)

Louisiana Office of Aeronautics - Intermodal Transportation Section of the Department of Transportation

12 YES

Mississippi

Aeronautics Division - Department of Transportation

4 YES

Tennessee http://www.tdot.state.tn.us/

aeronautics/staff.htm#

Aeronautics Division - Department of Transportation

36 * YES

Missouri http://www.modot.mo.gov/

othertransportation/index.htm

Aviation Section - Multimodal Operations Division - Department of Transportation

8 YES

Iowa http://www.iawings.com/

legislative/av_funding.htm

Office of Aviation- Iowa Department of Transportation

7 YES

South Carolina http://www.scaeronautics.com/

staff.asp

Division of Aeronautics - Department of Commerce

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*Includes 15 staff in Flight Services, 8 Engineering staff, 5 Planning, 8 Administration/Finance/Grants Management

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REVIEW NOTES

REVIEW CRITERIA COMMENTS

Agency efficiency Staff resources are modest compared to other states. However, it was noted that the agency is dependent upon the AASIS Service Bureau as are a number of smaller agencies in Arkansas. See also the comments on tracking of awards to local government in the Staff Summary report, page 20.

Agency objectives, extent to which they have been achieved, any additional functions and related authority.

The Department appears to be meeting its objectives of promoting aviation safety, of planning for airport needs in Arkansas and in administering State Airport Improvement grant funds.

Assessment of the regulatory function N/A Assessment of need and utilization of agency services

Agency services are needed and are being utilized.

Potential duplication and possible consolidation Agency services are not duplicated. However, a separate aviation agency was noted in only one of eight states researched for comparison purposes.

Assessment of public benefit versus benefit to entities regulated

N/A

Effectiveness of dealing with complaints No significant issues noted. Extent of public participation in rulemaking

N/A EEOC and historically underutilized businesses No significant issues noted. Whether changes are needed in state statutes

No significant issues noted.

Employee conflict of interest rules No significant issues noted. Record keeping practices related to public requests for information

No significant issues noted.

Effect of federal intervention or loss of federal funds if agency is abolished

The Department directly administers planning assistance funds from the Federal Aviation Administration (CFDA 20.106). State Airport Improvement grant funds are significant in leveraging and meeting matching requirements for federal airport development grants administered directly to local governments in Arkansas.

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SUMMARY OF FY05 STATE AIRPORT GRANT AWARDS

STATE FUNDING PERCENTAGE

STATE FUNDS AWARD AMOUNT

OTHER FUNDING SOURCES

TOTAL PROJECT COSTS

100% $10,500.00 $0.00 $10,500.00 10% AIP $238,328.35 $2,144,955.15 $2,383,283.50 5% AIP $729,084.44 $13,852,604.36 $14,581,688.80

50% $1,093,987.92 $1,093,987.92 $2,187,975.84 75% $1,309,819.92 $436,606.64 $1,746,426.56 80% $1,267,419.33 $316,854.83 $1,584,274.16

TOTALS $4,649,139.96 $17,845,008.90 $22,494,148.86

Source of Information: Arkansas Department of Aeronautics

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Arkansas Department of Aeronautics Commission Members

Marion B. Burton Gary Wayne Jackson Gene Jines Kenneth W. Johnson Darryl S Riddell Don C. Ruggles Lindley V. Smith

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ARKANSAS AVIATION AND AEROSPACE COMMISSION

Sections 33 and 34 are Special Language Sections of operating appropriation act for the Department of

Economic Development for the 2005-07 biennium.

Section 34 of Act 2086of 2005 abolished the Aviation and Aerospace Commission.

Pursuant to Section 33 of Act 2086 of 2005, a remaining fund balance in the Industry and Aerospace Development Fund was transferred on July 12, 2005 to the Executive Discretionary Division of the 85th Session Projects Account of the General Improvements Fund (Fund KBL). The funds are to be used by the Department of Economic Development for grants to cities and counties for public works projects, private sector-related job training, access to industrial parks, aerospace development and port / waterway economic development projects.

The Department of Economic Development provided the information listed below on projects funded from the Economic Infrastructure Fund between July 1, 2005 and July 31, 2006:

EIF AWARDS BETWEEN 7/1/05 AND 7/31/06 Grantee Date Amount CompanyName ProjectType POCAHONTAS 08/02/2005 $70,000.00 SIDCO Training LITTLE ROCK 02/22/2006 $51,000.00 NOVUS INTERNATIONAL Rail SEARCY 10/18/2005 $80,000.00 ITT KONI AMERICA Building NORTH LITTLE ROCK 02/07/2006 $60,000.00 INVITING COMPANY Water POPE COUNTY 03/03/2006 $50,000.00 INDUSTRIAL POWER Electric Utility LITTLE ROCK 04/10/2006 $175,000.00 SUPER MARINE AIR SERVICE CO. Street/Road PULASKI 05/25/2006 $175,000.00 ALLIANCE AUTOMOTIVE PARTS Multi-Activity MAUMELLE 04/20/2006 $100,000.00 CLAUDIA'S CANINE CRUSINE Multi-Activity

CONWAY COUNTY 06/14/2006 $450,000.00 TXD Site Improvements

CROSS COUNTY 05/30/2006 $60,845.00 TECHNOLOGY CENTER FOR THE DELTA Street/Road $1,271,845.00

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Arkansas Aviation & Aerospace Commission Members

Dr. Ron E. Austin Dariel Baker Eric L. Brown Linda DeMint Mac Dodson, President, ADFA Kenneth J. Hiegel Henry Anderson Lile J W McLendon Don C. Ruggles Deborah H. Schwartz Jerry T. Sims Curtis Turner Larry Woodrow Walther, Interim Director AEDC Richard Weiss

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COMMODITY BOARDS

ARKANSAS BEEF COUNCIL

ARKANSAS CATFISH PROMOTION BOARD ARKANSAS CORN AND GRAIN SORGHUM PROMOTION BOARD

MAJOR SERVICES

o Research projects o Promotion and development projects

KEY FEATURES OF OPERATIONS IN ARKANSAS

o Funded by special revenues collected by the Miscellaneous Tax Section of the Department of

Finance and Administration and deposited into the State Treasury (subject to a 3% charge). Assessments collected on cattle sales are pursuant to a national beef check-off program. Fifty percent of amounts collected are remitted to the national Cattlemen's Beef Promotion and Research Board.

o An annual audit by the Division of Legislative Audit for the Arkansas Beef Council and financial review by Division of Legislative Audit for the Arkansas Catfish Promotion Board and the Arkansas Corn and Grain Sorghum Promotion Board.

o Administrative Services provided by the Arkansas Farm Bureau Federation. Staff time provided by the Arkansas Farm Bureau Federation for the Catfish Promotion Board and Corn and Grain Sorghum Promotion Boards provided at no cost to the promotion boards. Administrative fees for the Beef Council are $50,000.

o Act 1978 of 2005 established the Department of Agriculture. The powers and duties of the Department of Agriculture include the coordination of agricultural marketing efforts of existing or new programs, the collection of marketing information and providing assistance to other agencies consistent with the purposes of the act. The act also indicates that the establishment of the Department of Agriculture does not affect the powers, duties or operations of the six commodity boards and councils listed in the act.

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FY06 BUDGET SUMMARY - ARKANSAS BEEF COUNCIL

FY06 BUDGETED

POSITIONS

FY06 BUDGETED

EXPENSES Administration and Support 0 (see note 1) $63,000 Research and Promotion 1,037,000 Total $1,100,000

FY06 BUDGET SUMMARY - CATFISH PROMOTION BOARD

FY06 BUDGETED

POSITIONS

FY06 BUDGETED

EXPENSES Administration and Support 0 (see note 2) $5,000 Research, Promotion, Consumer Information 250,000 Total $255,000

FY06 BUDGET SUMMARY - CORN AND GRAIN SORGHUM PROMOTION BOARD

FY06 BUDGETED

POSITIONS

FY06 BUDGETED

EXPENSES Administration and Support 0 (see note 2) $10,000 Research and Development 617,200 Total $627,200 Note 1: Administrative support including a full-time promotion coordinator, office support FTE and expenses provided through a negotiated fee of $50,000 with the Arkansas Farm Bureau Federation. Note 2: Staff support provided by the Arkansas Farm Bureau Federation at no cost to the promotion board.

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OTHER KEY UPDATES

o Federal 2005 Energy Policy Act establishes a Renewal Fuels Standard. The Renewal Fuel

Standard for the use of ethanol nationally to be 7.5 billion gallons by 2012. (Primary sources for alternative fuels include corn for ethanol production and soybeans for biodiesel). According to the June 2006 NCSL article, there was one ethanol production facility in Arkansas at January 1, 2006.

SUMMARY OF RESEARCH

Eight States were reviewed including Missouri, Tennessee, Mississippi, Louisiana, Texas, Oklahoma (border states), Iowa and South Carolina.

Generally, the use of Commodity Board funds was being determined by each respective Board and the funds were not being combined with funds of the state's Agriculture Department in joint marketing efforts.

Most of the eight states reviewed were not treating the commodity boards in their states as a budget entity in the legislative budget process; i.e. the individual commodity boards in those states were not receiving a legislative appropriation to spend their funds in an appropriation bill.

Limited support, fiscal, or administrative services by the state's agriculture department was frequently found. Examples included assistance in revenue collection, fiscal reporting or meetings assistance. Typically, the commodity boards in such states paid a fee to the Department of Agriculture for such services.

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KEY ISSUES

o As noted in the Summary of Research, other states reviewed for purposes of this report were generally not treating Commodity Boards as appropriated state agencies. So long as revenues associated with Commodity Board operations are deposited in the State Treasury, an appropriation will be needed for disbursement of those funds. The services of the Department of Finance and Administration, the State Treasurer, the Division of Legislative Audit, and other state government agencies appear to be useful services for collection of revenues, safekeeping of funds, budget and accounting and audit. Based on a comparison of other states and the establishment of a Department of Agriculture in the 2005 Session, the Subcommittee may wish to consider whether any changes should be considered regarding: (1) the status of the Commodity Boards as state agencies; (2) supporting administrative services by the Farm Bureau; and (3) the relation of the Commodity Boards to the Department of Agriculture.

o Interest earned on the funds of Commodity Boards is not being credited to the various state treasury funds used for these operations. This is consistent with other state treasury funds that do not have specific legislation allowing such funds to receive interest earnings. Generally, the interest earned on state funds in the state treasury not having special legislation is distributed to the General Improvement Fund and the Budget Stabilization Trust Fund. The Subcommittee may wish to consider whether the present procedures relating to interest earnings relating to Commodity funds should continue or be modified by legislation allowing interest earnings to be credited to the treasury funds associated with Commodity Board operations.

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REVIEW NOTES * REVIEW CRITERIA COMMENTS

Agency efficiency Administrative costs provided by the Arkansas Farm Bureau Federation appear very reasonable. The Commodity Boards / Councils are subject to the 3% Treasurer's charge for services of agencies such as DFA, Legislative Audit, State Treasurer, etc.

Agency objectives, extent to which they have been achieved, any additional functions and related authority.

The reports submitted by the Commodity Boards/ Council indicate that operations and uses of funds appear consistent with the authorizing legislation.

Assessment of the regulatory function N/A Assessment of need and utilization of agency services Operations of the entities under review are from

industry assessments. Similar entities were noted in states reviewed and two of the entities have legislation at the national level.

Potential duplication and possible consolidation No duplication noted. Research indicates that commodity promotion boards were not consolidated in the states reviewed. Fiscal support and/or other supporting services were noted by the Department of Agriculture in some states.

Assessment of public benefit versus benefit to entities regulated

N/A

Effectiveness of dealing with complaints No significant matters noted. Extent of public participation in rulemaking

N/A EEOC and historically underutilized businesses No significant matters noted. Whether changes are needed in state statutes

The Subcommittee may wish to consider whether existing legislation adequately expresses the intended degree of coordination and cooperation between the Department of Agriculture and the commodity boards and the role of the Farm Bureau for administrative support services. Additionally, the Subcommittee may wish to review current procedures relating to interest earning associated with funds credited for the operation of the Commodity Boards.

Employee conflict of interest rules Appropriations of the Commodity Boards do not directly provide for employees. Administrative services are currently provided by employees of the Arkansas Farm Bureau as described in the section of services of the Boards.

Record keeping practices related to public requests for information

No significant matters noted.

Effect of federal intervention or loss of federal funds if agency is abolished

Two of the entities have legislation at the national level.

*All comments apply to the Arkansas Beef Council, Arkansas Catfish Promotion Board, and the Arkansas Corn and Grain Sorghum Promotion Board, unless otherwise noted.

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FEATURES OF COMMODITY BOARD OPERATIONS IN SELECTED

OTHER STATES

STATE

LEGISLATIVE BUDGET PROCESS/

APPROPRIATION BILL

FISCAL OPERATIONS

ROLE OF DEPARMENT OF AGRICULTURE

ARKANSAS Yes Revenue collection by DFA - deposits to State Treasury - disbursements from State Treasury - audits or financial reviews by Division of Legislative Audit

Administrative services by the Farm Bureau Federation. Legislation specifically indicates that commodity board powers, duties, and operations are not affected by the Department of Agriculture (Act 1978 of 2005).

MISSOURI No Collections are made by the Department of Revenue and deposited into the State Treasury.

The Department of Agriculture provides some fiscal reporting and other administrative functions for seven commodity boards for a fee.

TENNESSEE No Funds collected by Boards and deposited into bank account.

No direct administrative responsibilities by the Tennessee Department of Agriculture.

MISSISSIPPI No Mississippi Department of Agriculture performs collection responsibilities for a fee (1% or less) for some commodity promotion boards

LOUISIANA No Funds for Beef Council collected by Beef Council and not deposited in state treasury. The agency is audited by Legislative Audit.

TEXAS No Texas Department of Agriculture has some level of monitoring responsibilities including budget review, monitoring financial information, and authority to conduct audits.

OKLAHOMA No Deposited into State Treasury for Wheat and Peanut Commissions only--[collections handled by national organizations for other commodities??} Suggested contact - Dept of Agriculture - Steve Thompson: 405 522-6105

Some auditing by Department of Agriculture

IOWA No Soybean Promotion Fund audited by Legislative Auditors.

Secretary of Agriculture or designee a member of commodity boards.

SOUTH CAROLINA YES (1) Revenues are collected by the Department of Agriculture. Funds are deposited into the State Treasury. Funds are audited.

The Department of Agriculture plays a role in fiscal collections and disbursements of many of the Commodity Boards. The Boards determine how funds are spent.

(1) There is a separate Commodity Board appropriation within the appropriation for the Department of Agriculture. The appropriation is not Board specific. We were informed that there is a budget mechanism in place to revise the budget authority in the interim if additional funds became available.

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SELECTED ARKANAS BEEF INDUSTRY STATISTICS

Description Data Source Livestock Inventory - Cattle and Calves - All (January 1,

2006)

1,750,000

US Department of Agriculture - National Agriculture

Statistics Service Number of Arkansas Farms

with Beef Operations 30,000

(80% with less than 50 head)

Cooperative Extension Service

SELECTED CATFISH STATISTICS

Source: North Carolina Department of Agriculture and Consumer Services

Catfish Number of Operations January 1, 2005

Surface Acres Cash Receipts 2004

Alabama 230 25,100 $101,198,000 Arkansas 153 31,500 $66,618,000

Mississippi 410 101,000 $274,971,000

SELECTED 2005 AGRICULTURE CROP STATISTICS

Source: US Department of Agriculture - National Agriculture Statistics Service

COMMODITY HARVESTED ACRES

YIELD PRODUCTION VALUE OF PRODUCTION

Rice (All) 1,635,000 6,650 cwt 108,792,000 cwt $810,500,000 Soybeans 3,000,000 34 bushels 102,000,000 b. $591,600,000

Cotton (Upland) 1,040,000 1,011 lbs. 2,190,000 bales $494,064,000 Corn for Grain 230,000 131 bushels 30,130,000 b. $63,273,000

Wheat (All) 160,000 52 bushels 8,320,000 b. $27,456,000 Sorghum for Grain 62,000 80 bushels 4,960,000 b. $ 9,027,000

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CORN AND GRAIN SORGHUM BOARD

RESEARCH AND PROMOTION ALLOCATION APPROVED FEBRUARY 10, 2006

RESEARCH (UNIVERSITY OF ARKANSAS)

Weed Control Programs in Arkansas Corn $31,514 Economic Analysis of Corn and Grain Sorghum Production Practices 5,739 Ultra-Short Season Corn Hybrid Evaluation 24,500 Helping Arkansas Rice Farmers Exploit Market Opportunities by Improved Uses of Soybean, Wheat, and Corn in Rice Rotations

16,136

Optimizing Soil Fertility Requirements for Corn 23,430 Improving Economic Efficiency of Corn Production in Arkansas by Evaluating New Soil Testing Methods for Predicting Nitrogen Fertilizer Requirements

35,020 Management Practices to Increase Grain Sorghum Productivity 18,800 Development of Effective Weed Control and Crop Safety 20,374 Developing Guidelines for Fungicide Use in Field Corn to Control Southern Rust and Other Leaf Diseases

22,218

Evaluating the Profitability of Corn and Grain Sorghum Insect Management with Seed Treatment and Standard At-Planting Insecticides

18,509 Corn and Grain Sorghum Research Verification Program 37,052 TOTAL $253,292

PROMOTION ALLOCATIONS

Arkansas Foundation for Agriculture $10,000 U.S. Grains Council 6,000 National Grain Sorghum Producers 5,000 TOTAL $21,000 Source of Information: Arkansas Corn and Grain Sorghum Board website

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Arkansas Beef Council Arkansas Catfish Promotion Board Robert Dixon, Chairman John Jeffrey Baxter James Rhein, Vice Chairman Harry Fratesi Leland Jackson, Secretary/Treasurer Carl Jeffers Leo Sutterfield Steven Lee Kueter G. L. “Tommy” Lalaman Joey Lowery Dennis Ritchie Leyden Pugh Buddy Smith William Z. Troutt Jerald Lee Williamson Arkansas Corn and Grain Sorghum Board Keith Woolverton, Chairman Stewart Weaver, Vice Chairman Tommy Young, Secretary/Treasurer David Gammill Doug Threlkeld Keith Feather Mike Richardson

21

ARKANSAS EARTHQUAKE AUTHORITY (A non-profit legal entity - not a state agency)

MAJOR SERVICES

o Operate Market Assistance Program to help with obtaining earthquake insurance in the normal

insurance market. o Provide earthquake coverage in the event that coverage is not available in normal insurance

market or only available at a cost substantially in excess of coverage that could be provided directly through the Earthquake Authority. (Note: requires concurrence of House and Senate Insurance and Commerce committees) The Earthquake Authority may assess insurance companies to obtain operating capital if market conditions meet the requirements allowing the direct issuance of earthquake insurance by the Authority.

KEY STATISTICAL DATA (YE 6-30-2005)

INDICATOR DATA SOURCE Number of companies writing residential earthquake insurance in the voluntary market 61 Agency report Number of companies writing commercial earthquake insurance in the voluntary market 107 Agency report Comparative MAP rates to average of top 2 insurance writers: Territory A: (1) Frame Brick Territory B: (2) Frame Brick Territory C: Frame Brick Territory D: Frame Brick

MAP / Top Writers

1.50 / 1.07 2.60 / 1.99

1.20 / NA 1.65 / NA

.90 / .33

1.20 / .72

1.70 / NA 2.90 / NA

Agency report

(1) Territory A - Counties of Clay, Crittenden, Cross, Greene, Lee, Poinsett, St. Francis (2) Territory B - Counties of Arkansas, Chicot, Desha, Independence, Jackson, Lawrence, Lincoln, Lonoke, Monroe, Phillips, Prairie, Randolph, Sharp, White, Woodruff (3) Territory C - Remainder of state (4) Territory D - Counties of Craighead and Mississippi

22

OTHER KEY UPDATES

o None noted for report presentation.

SUMMARY OF RESEARCH

Generally, a similar contingency mechanism was not found in the other states reviewed for comparison purposes.

KEY ISSUES

o None suggested by staff.

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Arkansas Earthquake Authority Board Members

Richard Sims Darwin Copeman Mike Anderson Lorrie Brouse Randy Cozart Roger Birdsong Kim Shumate Charles T. Snyder

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ARKANSAS ABSTRACTERS' BOARD OF EXAMINERS

The Arkansas Abstracters' Board of Examiners was referred to the Joint Performance Review Committee in February 2006 by the Legislative Joint Auditing Committee for consideration of the necessity in the Board relative to Arkansas Code Annotated 25-1-106(b)(1). The next scheduled meeting of the Joint Performance Review Committee is August 31, 2006.