MINUTES OF THE

ASSEMBLY COMMITTEE ON WAYS AND MEANS

Sixty-seventh Session

May 26, 1993

The Assembly Committee on Ways and Means was called to order by Chairman Morse Arberry, Jr., at 8:06 a.m., on Wednesday, May 26, 1993, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry, Jr., Chairman

Mr. Larry L. Spitler, Vice Chairman

Mrs. Vonne Chowning

Mr. Joseph E. Dini, Jr.

Mrs. Jan Evans

Ms. Christina R. Giunchigliani

Mr. Dean A. Heller

Mr. David E. Humke

Mr. John W. Marvel

Mr. Richard Perkins

Mr. Robert E. Price

Ms. Sandra Tiffany

Mrs. Myrna T. Williams

COMMITTEE MEMBERS ABSENT:

None

STAFF MEMBERS PRESENT:

Mark Stevens, Fiscal Analyst

Gary Ghiggeri, Deputy Fiscal Analyst

Jeanne Botts, Program Analyst

ASSEMBLY BILL 406- Makes appropriation to State Board of Examiners to restore balance of certain accounts and provides for purchase of retirement credit for certain state employees upon voluntary separation from state service to effect reorganizational savings.

Ms. Judy Matteucci, Budget Director, testified AB 406 was submitted by the Administration to restore fund balances in the emergency fund, the stale claims account and the reserve for statutory contingency fund. She noted Section 2 of AB 406 proposed funding for the purchase of retirement credit for employees voluntarily leaving state service as part of the Governor's reorganization plan. Both the Senate Finance Committee and this committee were acting to restore positions targeted for reorganizational savings to the budget or transfer proposed reorganizational savings to vacancy savings. Therefore, Section 2 was no longer necessary. She proposed deleting Section 2 in its entirety.

Ms. Matteucci explained the bill originally proposed an appropriation of $802,158 to restore the fund balances in the three funds. The revised total appropriation was now $1,505,637. She noted when the Executive Budget was submitted, the Budget Division estimated the amount necessary to restore the fund balances to statutorily authorized limits. As the Legislature progressed, the balances continued to be spent down.

Ms. Matteucci stated the emergency fund was established pursuant to NRS 353.263 to allow the Board of Examiners to expend up to $50,000 in the event of invasion, disaster, insurrection, riot, breach of the peace, substantial threat to life or property, epidemic or the imminent danger thereof. She distributed copies of the emergency fund financial statement for May 31, 1991 through April 30, 1993 (Exhibit C). She noted only two agencies had called upon the emergency fund. The Department of Military expended $54,920.63 to prepare for possible civil disturbances in Las Vegas as the result of the Rodney King verdict. The other expenditure was for an equipment failure at Northern Nevada Mental Retardation Services, which the Legislature determined to be an emergency. A General Fund appropriation of $29,883 was requested to restore the fund balance to $400,000.

Ms. Matteucci explained the stale claims account was established to pay claims presented by agencies after the funds from which to pay those claims had reverted to the General Fund. She noted payment of stale claims could not exceed the amounts reverted by the agency for the fiscal year during which the obligations were incurred.

Ms. Matteucci distributed copies of the stale claims financial statement for May 31, 1991 through April 30, 1993 (Exhibit D). She pointed out some substantial changes which had been made from the budget originally submitted. Stale claim expenditures for the Secretary of State had increased from $443 to $13,000 to cover a payroll stale claim settlement. The $229,941.19 expenditure for higher education was for equipment which was purchased but not paid for prior to reversion of the funds. The Mental Health Institute claims had increased from $1,100 to $144,000 to cover a payroll stale claim resulting from a Supreme Court decision. The Southern Nevada Children's Home had a claim for $146,000, up from $133,000, again, for a payroll error. The largest expenditure was for prisons--$442,000, up from $249,000. The increase was due to the normal processing of stale claims and a retroactive salary payment which resulted from a Personnel Commission decision. A General Fund appropriation of $770,133 was requested to restore the $900,000 stale claims balance.

Ms. Matteucci stated the reserve for statutory contingency fund was administered by the Board of Examiners. The account was established to pay specific claims for which it was difficult to budget, such as expenditures which occurred on a contingent basis. She distributed copies of the statutory contingency fund financial statement for May 31, 1991 through April 30, 1993 (Exhibit E). She explained significant changes from the Executive Budget. Terminal sick leave increased from $12,500 to $21,000. Escapes and crimes was up from $176,000 to $225,000. Post conviction expenses were up from $217,000 to $404,000. Publication costs were up from $32,000 to $63,000. A General Fund appropriation of $705,621 was requested to restore the $1 million statutory contingency fund balance.

ASSEMBLY BILL 409- Makes various changes relating to state financial administration.

Ms. Matteucci explained AB 409 should be reviewed in conjunction with AB 560. AB 409 proposed changing the threshold for Interim Finance Committee review of work programs. Currently, any amount over $2,000 which, either cumulatively or individually, exceeded 10 percent of the category level set by the Legislature or $25,000 required Interim Finance Committee review. As a result, many very small work program changes had to wait for approval until the Interim Finance Committee met or 45 days, whichever was sooner. AB 409 represented an effort to streamline work programs and reserve for Interim Finance Committee review those items which had greater monetary significance. AB 409 proposed setting the threshold for Interim Finance Committee review at a work program change of $100,000 or more.

Ms. Matteucci noted if this proposal had been in effect at the time of the May 18, 1993, Interim Finance Committee meeting, approximately 60 percent of the work programs reviewed at that meeting would not have required Interim Finance Committee review. It would not affect transfers from one budget account to another.

Mr. Marvel asked how much of the current work program review would be eliminated. Ms. Matteucci estimated 50 to 60 percent would be eliminated. The large work programs would still require Interim Finance Committee approval.

Chairman Arberry asked why the amount was increased to $100,000. Ms. Matteucci replied AB 409 attempted to establish a figure which represented a reasonably significant monetary amount and eliminate the small amounts.

Mrs. Evans noted the threshold for governmental grants would be increased from $50,000 to $100,000. Ms. Matteucci responded affirmatively. Mrs. Evans said she believed it was time to increase the threshold; however, she would be more comfortable with an amount lower than $100,000 until the proposal was tested.

Mr. Marvel inquired whether an analysis had been made of varying threshold figures such as $50,000 or $75,000. Ms. Matteucci responded she had not done an analysis but she would do so and provide the figures to the committee. She pointed out the $100,000 threshold would remove only half of the work program items currently requiring review.

Chairman Arberry asked when the current $25,000 threshold was established. Ms. Matteucci said the $25,000 threshold was set in 1979.

Ms. Matteucci noted AB 409 proposed that the Interim Finance Committee no longer have approval of position changes. Mr. Marvel said, in the event AB 409 was approved, he would still like to be provided with information regarding position changes. Ms. Matteucci said the information could be provided.

Ms. Giunchigliani asked how the information would be provided to the Interim Finance Committee. Ms. Matteucci replied informational reports could be provided in whatever manner the Interim Finance Committee preferred. She pointed out the required Interim Finance Committee review unnecessarily delayed approval of position reclassifications.

Ms. Matteucci added NRS 353.225 allowed the Governor and the Chief of the Budget Division to reserve monies in case of fiscal emergencies. This statute was used this year in order to effect budget cuts which did not require legislative approval. Similar statutes in other states had been declared to be unconstitutional in that the executive branch assumed legislative authority. She said the Executive Branch needed clarification in order to maintain the flexibility to react to fiscal crises. AB 409 proposed that the Legislature establish guidelines for the Executive Branch to follow in fiscal emergencies. The proposal was modeled after legislation passed in Michigan. The guidelines would include the extent to which the appropriations must be reduced without specific approval of the Legislature, the priorities to be followed and the provisions for legislative oversight of the reductions.

Ms. Matteucci noted Speaker Dini had introduced similar legislation but the Administration preferred AB 406 because it provided more legislative guidance. She said both bills were attempting to ensure the reserving authority given in NRS 353 was not declared unconstitutional by the Supreme Court in some future action.

Mr. Price asked if passage of AB 409 would give the Governor legislative power. Ms. Matteucci said it would not.

Mr. Price inquired whether this legislation would have made the Governor's attempt to withhold the legislative pay raise for state employees in the last session legal. Ms. Matteucci responded the bill would allow such a reduction if the Legislature put it in its guidelines and if there had been or were to be some kind of a legislative salary increase. She pointed out salary increases usually were presented in a separate bill and appropriate language would have to be included in that bill as well.

Mr. Price noted the only option available to the Governor was to hold a special legislative session so the Legislature could participate in the decision making. Ms. Matteucci said if the Legislature did not want to have the Governor reserve any funds in case of a financial emergency and did want to be called back in for a special session, then the Legislature would not want to give the Executive Branch any guidelines and would want to expressly say so. She pointed out during the last interim, the Legislature had indicated it did not want to be called back into special session.

Chairman Arberry asked when the guidelines would have to be provided. Ms. Matteucci stated the guidelines would have to be developed before the Legislature adjourned. The guidelines could be as specific or as general as the Legislature wanted.

Mr. Humke noted as a practical matter, this bill would be approved in this session and then might not be utilized for several years and the Legislature would approve it session after session, eventually to be used. Ms. Matteucci responded affirmatively. She suggested the guidelines be included in the General Appropriations Act, which was handled every two years and could accommodate changing conditions.

Mr. Humke asked if the Nevada Supreme Court had issued a ruling regarding NRS 353.225. Ms. Matteucci said a recent Supreme Court decision addressed what was happening in some other states but did not rule on the matter. The court cautioned not to undo any particular legislative act. The court's guidance was not very complete.

Mr. Humke asked if the court had been unclear as to whether or not legislatively approved pay increases for employees could be rolled back. Ms. Matteucci responded the court had been clear that the Executive Branch could not roll back pay increases legislatively approved in the salary bill. The court decision also addressed what was happening in other states relative to executive branch reductions. She noted 35 states or more were experiencing similar fiscal problems and there were some constitutional challenges to the laws in some of those states. The court said the Administration could not undo a specific legislative appropriation but declined to comment on the issue of legislative guidelines to the Executive Branch.

Mr. Humke said if this bill passed, the Legislature would probably not craft language allowing the Executive Branch to roll back such major appropriations as general pay increases, but the Legislature would give approval for less significant changes. A special legislative session would be required to roll back pay increases.

Ms. Matteucci replied those were the type of guidelines the Executive Branch anticipated receiving from the Legislature. She suggested the Legislature might also want to provide express legislative intent regarding priorities and when it wished to be called back into session.

Ms. Matteucci noted in that respect AB 409 was more complete than the legislation proposed by Mr. Dini (AB 560). If AB 560 had been in effect during the recent fiscal crisis, budget cuts could not have been made without a special session because the cuts exceeded the 10 percent limitation.

Mr. Humke noted historically there had been significant opposition to special sessions. He suggested Nevada look at some of the other western states which have frequent special sessions.

Mr. Price asked how the cost of a special session compared to the cost of the Supreme Court case regarding the Governor's attempt to withhold the pay increase. Ms. Matteucci said she would ask the Attorney General to provide the committee with a cost schedule. She estimated the costs were less than the cost of a special session. Mr. Dini pointed out the cost of a special session was less than a fully-staffed regular session.

Ms. Matteucci noted the cost of a special session was tied to the duration of the session. She suggested a special session to cut the budget could last for some time while the legislators reached consensus.

Chairman Arberry called for public testimony.

Ms. Margi Grein of the Nevada State Contractors Board indicated the Contractors Board was concerned with the proposed repeal of NRS 353.224 regarding legislative approval of position changes. Ms. Matteucci indicated the State Contractors Board would not be affected by the repeal of NRS 353.224.

ASSEMBLY BILL 560- Provides standards for setting aside of reserves to meet financial emergencies.

Assemblyman Joe Dini, District 38, stated over the past two years the Governor had been faced with many difficult decisions as a result of the state's dwindling resources. In most cases, budget cuts had been effected by placing in the reserve account a portion of the funds appropriated for the operation of agencies and departments. In some cases, the set asides amounted to over 20 percent of an agency's total budget.

Mr. Dini said there was a growing awareness of the need for legislative involvement in fiscal decisions. The budget was the Legislature's primary means of regulating the activities of the executive agencies and ensuring that legislative priorities were addressed.

Mr. Dini testified AB 560 would greatly enhance the Legislature's ability to exercise legislative oversight by limiting the amount which the chief budget officer could set aside as a reserve to not more than 10 percent of the total amount appropriated to an agency. The Governor or the chief budget officer would also be required to report to the Legislature or the Interim Finance Committee when any reserves were set aside, even if they were less than 10 percent of an agency's budget. The Legislature or the Interim Finance Committee would then have to approve those actions.

Mr. Dini explained AB 560 was intended to preserve the ability of the Legislature to exercise control over the budget during periods of fiscal distress, recognizing when circumstances forced the Governor to deviate significantly from the budget, that responsibility should be shared with the Legislature.

Ms. Matteucci reiterated the proposals contained in AB 560 could be included within the legislative guidelines proposed by AB 409. She pointed out if the full Legislature did not set guidelines, then the Interim Finance Committee would run the risk of acting as the Legislature.

Mr. Dini asked the Budget Director if the 10 percent limit was too low. Ms. Matteucci responded 10 percent would have been too low during the current fiscal crisis. She said the Legislature had to determine at what point it wanted to be called in for a special session.

Mr. Dini said AB 560 proposed involving the Legislature, via special session, if cuts over 10 percent were required.

OFFICE OF EQUAL RIGHTS - PAGE 1103

EQUAL EMPLOYMENT OPPORTUNITY - PAGE 1107

Mr. Fernando Romero, Executive Director, Office of Equal Rights, asked the committee to support legislation to make Nevada's equal housing laws equal to federal laws in order to ensure grant funding from the Department of Housing and Urban Development (HUD). He noted he had recently learned cuts to the Equal Rights budget would be greater than anticipated.

Chairman Arberry asked how the Senate Finance Committee had responded to the proposed legislation. Mr. Romero said the response of the Senate Finance Committee had been negative. He said Senator Raggio was apparently opposed to the Office of Equal Rights having subpoena power.

Chairman Arberry asked if a bill had been drafted. Mr. Romero said his office had submitted an information package to the Legislative Counsel Bureau but no bill was drafted because the Senate Finance Committee wanted to review the package. He said Senator Raggio had indicated he would not support the bill draft request.

Mr. Carlos Romo, Assistant Director, Office of Equal Rights, stated SB 110 was submitted to the Senate Government Affairs Committee and received a favorable response in that committee.

Chairman Arberry indicated the major concern of this committee was what to do with this agency. He asked whether the agency could perform its function if the committee approved the budget with the cuts recommended by the Governor or if the agency required additional staffing. Mr. Romero responded the Budget Division and Data Processing staff were working with the agency to develop a computer system to improve operations. If an adequate data processing system had been in place, the agency would not have experienced such a large backlog.

Chairman Arberry asked how soon a data processing system could be on-line. Mr. David Miller of the Department of Data Processing responded he had visited the agency and subsequently contacted the federal Equal Employment Opportunity Commission (EEOC) to discuss the system the EEOC was currently using. He indicated the federal government provided state offices with an NCR computer system and printer. The system in place in the Office of Equal Rights was currently not being utilized effectively and staff had not received appropriate training. He recommended exploring the optimal capabilities of the federal system. For the most part, current users were not experiencing many problems with the system and some states used it as their primary system. He noted the federal government would train staff and install the system if the state would pay travel expenses. Data Processing staff would also assist the Office of Equal Rights.

Mr. Miller pointed out the agency was still using IBM Displaywriters for word processing. He said this was outdated equipment and had been replaced in most other state agencies. It was only a matter of time until the equipment failed and should be replaced.

Chairman Arberry asked Mr. Miller to provide his recommendations in writing. Mr. Miller agreed to draft his report and deliver it to the committee in approximately a week. He said he was waiting to talk to the staff of the Ohio equal rights office.

Chairman Arberry asked Mr. Miller to also provide a copy of his report to the Budget Division. Mr. Miller said he intended to do so.

Chairman Arberry questioned how long it would take the agency to begin operating effectively once the system was on-line. Mr. Miller said he could not answer the question until he had further discussions with the federal government regarding training and installation schedules. He estimated the training and installation would take place during the summer. He pointed out many of the system capabilities were currently on-line but staff was not trained to use them.

Chairman Arberry noted there was no funding in the Executive Budget for additional computer equipment. He asked Mr. Miller for an estimate of the cost of additional equipment. Mr. Miller indicated a cost estimate would be included in his report. He said additional equipment would be required but it was a more cost-effective solution than purchasing a new local area network and rewriting the system. At a minimum, the agency should be brought fully operational on the EEOC system currently in place.

Chairman Arberry asked Mr. Romero what the office would be able to accomplish once the computer system was on-line. Mr. Romero said the new system would allow the agency to close cases more readily. The more cases were closed, the more revenue the agency generated. He said it would take up to 18 months to bring the backlog to a satisfactory level. Currently cases were up to four years old. An acceptable backlog would be 9 to 12 months.

Mr. Marvel inquired whether the federal government or the state would fund the cost of the computer system. Mr. Miller replied the current system had been provided by the federal government and upgrades were free of charge. The costs involved in upgrading the system would be travel and per diem costs for federal government representatives and the costs of the Department of Data Processing staff to perform a requirements analysis to determine the capability of the current system and additional requirements.

Mr. Marvel asked if there was money in the budget presently to cover this activity. Mr. Miller said there was not.

Chairman Arberry asked if state funds would be required to upgrade the system. Mr. Miller said state funds would be required.

Mrs. Chowning asked what the $388,000 recommended in the Executive Budget for personnel expenses would cover and how the agency intended to reduce its backlog. Mr. Romero said the computer system would help reduce the backlog.

Mrs. Chowning noted the $388,000 would fund 10 positions. The agency indicated it needed an additional 5 positions to accomplish its work. She questioned whether enough funding could be provided to accomplish the job. Mr. Romero said, in light of pending budget cuts, he could not consider hiring additional staff, but the current staff could handle the situation with the upgraded computer system. He reiterated if the statutes were revised, additional revenue would be available.

Mr. Marvel noted the audit subcommittee was concerned about an audit report which indicated $406,000 could not be accounted for. He asked if there were any records in the Equal Rights Office which could explain how the $406,000 was spent. Mr. Fernando Romero indicated he had talked to the Controller's Office and to the independent auditor. He had been asked to sign documents which he had nothing to do with that dealt specifically with what his predecessor had done. He had refused to sign. He said he had requested an audit of the agency but the auditor did not want to do it.

Mr. Marvel asked who Mr. Romero had spoken to. Mr. Romero said he had talked to Deloitte and Touche, to Gary Crews, Legislative Auditor and to Steve West.

Mr. Marvel asked what their response had been. Mr. Romero replied they did not want to perform an audit.

Mr. Marvel questioned whether the auditors had actually asked Mr. Romero to sign the documents. Mr. Romero responded affirmatively.

Mr. Marvel said the auditors had not so advised him. He said he would verify this information in the audit subcommittee meeting scheduled for that afternoon.

Mr. Marvel asked Mr. Romero if he would be available to attend the audit subcommittee meeting. Mr. Romero indicated he would not be available. He noted he had not signed the documents on the advice of attorneys.

Mr. Marvel noted the audit report indicated the agency's internal control structure was lacking. He inquired whether the agency was in the process of implementing internal controls. Mr. Romero said he was implementing internal controls.

Chairman Arberry requested Mr. Romero to report the status of agency operations to the Interim Finance Committee within the next three to four months. Mr. Romero agreed.

Mrs. Evans inquired whether the Nevada Equal Rights Commission was required by federal law. Mr. Romero said the office was not federally mandated.

Mrs. Evans asked how complaints would be handled in the absence of a state office. Mr. Romero said the EEOC district offices in Los Angeles and San Francisco would handle the complaints.

Mrs. Evans questioned how the agency could operate effectively if the Nevada statutes were not congruent with federal laws. Mr. Romero said the agency's proposal to update the statutes had been submitted to the Legislative Counsel Bureau.

Ms. Jeanne Botts, Program Analyst, said the bill draft request had been submitted to the Senate Finance Committee, which had chosen not to introduce it as a bill.

Mrs. Evans noted the statutes would continue to be out of compliance with federal law. Mr. Romero said his agency continued to investigate housing cases pursuant to state laws but did not receive federal funding for those cases.

Mrs. Evans said it appeared Nevada law was out of compliance in a number of substantive areas. She asked, again, how the agency could continue to function. Mr. Romero said the agency enforced the state laws which were currently in effect.

Mr. Keith Marcher, Deputy Attorney General, explained fair housing complaints were processed according to state law only. The proposal to revise the statutes to comply with federal law was to enable the Equal Rights Commission to enter into contracts with HUD to receive federal funding for investigating housing discrimination complaints. The Senate Finance Committee had been reluctant to revise the current statutes. The Equal Rights Commission was still responsible for enforcing the state law, however.

Mrs. Evans asked if the federal reimbursement was contingent on bringing the state laws into federal compliance. Mr. Marcher answered affirmatively.

Mrs. Evans asked how much revenue was projected from federal reimbursement for fair housing investigations if the statutes were revised. Mr. Marcher said the revenue would be approximately $100,000 annually.

Mrs. Evans inquired if investigations were currently being conducted at no charge. Mr. Marcher said yes.

Ms. Giunchigliani said it should not be construed that the committee did not support equal rights. She asked why the agency had been created. She noted all states did not have equal rights offices. Mr. Marcher replied only one or two states did not have a discrimination agency. Mr. Romero added some states also had local offices.

Ms. Giunchigliani stated there appeared to be a duplication of services. Her research indicated discrimination cases were being taken directly to the courts and nothing was being handled at the state level. Mr. Marcher said if that was true, there would be no caseload in the Equal Rights Office. Claimants had the option to take their case to court only after it had been in the administrative process for six months. However, court proceedings entailed expenses such as attorney's fees. Most people tried to settle their cases within the state system.

Ms. Giunchigliani said some of the settlements she was aware of had been inappropriate. She questioned why a claimant would file a complaint with the state knowing it would languish in the Equal Rights Office. Mr. Marcher explained a claimant had to go through the administrative process by filing a complaint with either the state or federal agency prior to going to court. Otherwise, the court system would be deluged with discrimination cases. The EEOC and the Equal Rights Commission attempted to settle cases fairly outside the court system.

Ms. Giunchigliani asked if the federal agency could operate without the state agency. Mr. Marcher said it could. Ms. Giunchigliani inquired why both agencies were needed. Mr. Romo responded if the Nevada Equal Rights Commission was unable to process cases at the state level, then the federal government would have jurisdiction. The state agencies were developed to allow the states to handle the cases. He added the federal agency took even longer than the state agency to process cases. Mr. Romero noted the federal agency could not handle the excessive amount of existing cases. The backlog of cases would be even greater if they were transferred to the federal office.

Ms. Giunchigliani asked if the employment statutes were in compliance with federal laws. Mr. Romero said there was no problem with the employment statutes. Mr. Marcher said the statutes were at least sufficient to allow the state to contract with the federal government for reimbursement.

Ms. Giunchigliani questioned whether the state had a standing policy of auditing agencies when new directors were appointed. Ms. Matteucci replied there was no standing policy. She noted some administrators requested audits when they took office; however, the legislative auditors followed a schedule of audits and could not accommodate special requests. She said audits would be a good idea but she did not have the staff in her office to do the work. If the Legislature approved consolidating audit positions, perhaps general agency audits could be performed. Ms. Giunchigliani said audits would be a good policy.

Mr. Price noted the agency had received some radio talk show coverage recently. He asked if that was a regular occurrence. Mr. Romero said it did not occur as often as the agency would like. He noted he and Mr. Romo both accepted invitations to address public groups as often as possible.

Mr. Spitler asked for an explanation of the federal reimbursement schedule. Mr. Romero explained the federal work share agreement did not provide for reimbursement for cases opened prior to 1989 although cases back to 1986 remained open. The next annual agreement would discontinue reimbursement for cases opened in 1989 and 1990. Thus, those cases would have to be closed under the current agreement to ensure federal reimbursement.

Mr. Spitler asked how much the federal reimbursement was. Mr. Romero responded the reimbursement was $450 per case.

Mr. Spitler inquired about the priority of cases. Mr. Romero said the priority was to close cases which were older than 750 days. He stated the reimbursement situation would improve in fiscal year 1993-94 because nearly every case closed would be eligible for reimbursement.

Mr. Spitler asked how many cases were not eligible for federal reimbursement during the past fiscal year. Mr. Romero replied the federal reimbursements were reduced $22,000 because the agency did not meet the contractual requirements. He said the agency would meet and exceed the current year's contract requirements.

Chairman Arberry asked Mr. Romero to provide to the committee a list of agency goals and objectives, including the number of cases projected for closure over the next two years and a copy of the operating plan developed according to the recent audit report. He asked Mr. Romero to report back to the Interim Finance Committee regarding the status of the agency. He suggested if the agency's performance did not improve over the coming biennium the next Legislature was likely to abolish the agency.

BUDGET CLOSINGS

STATE EMPLOYEES WORKER'S COMPENSATION - PAGE 197

Mr. Stevens noted additional information on this account had been requested from the Budget Division. Ms. Matteucci indicated the Risk Management Division felt a decrease in the cap would be offset by an increase in the rate. The Budget Division recommended closing the budget as recommended by the Governor.

MR. PERKINS MOVED TO CLOSE THE STATE EMPLOYEES WORKER'S COMPENSATION BUDGET AS RECOMMENDED BY THE GOVERNOR.

MRS. WILLIAMS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY. MR. DINI, MRS. CHOWNING AND MR. HELLER WERE ABSENT.

BUDGET CLOSED.

BUILDINGS AND GROUNDS - PAGE 294

Mr. Stevens said fiscal staff had worked with Budget Division staff to adjust building rent revenue. Fiscal staff recommended adding $67,683 of rent revenue in the first year of the biennium and $78,492 in the second year.

Mr. Stevens suggested the committee might want to consider a number of adjustments to expenditures as well. He explained reorganization savings was being transferred to vacancy savings in all of the budgets. He recommended deleting the special projects expense category and identifying the expenditure as Las Vegas relocation expenses. He said expenditures of $50,000 were added in each year to pay back General Fund dollars which were used to remodel the State Industrial Insurance System building in Las Vegas.

Mr. Stevens added on the basis of the closure of the Department of Motor Vehicles and Public Safety, Capitol Police expenses would be included in the Buildings and Grounds budget. The reserve category would be adjusted accordingly.

Mr. Stevens noted enhancements in the Buildings and Grounds budget for building renovation were also recommended in the Capital Improvements Program. Fiscal staff recommended deleting the item from the Buildings and Grounds budget.

Finally, fiscal staff recommended deleting the special projects enhancement item and identifying the expenditure as reorganization and relocation expenses.

MR. MARVEL MOVED TO AMEND THE BUILDINGS AND GROUNDS BUDGET TO INCORPORATE THE RECOMMENDATIONS OF THE FISCAL STAFF AND CLOSE THE BUDGET AS AMENDED.

MR. HUMKE SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY. MR. DINI, MRS. CHOWNING AND MR. HELLER WERE ABSENT.

BUDGET CLOSED.

SHEEP CERTIFICATION - PAGE 501

Mr. Stevens noted the Budget Division had prepared a revised budget. Fiscal staff had no recommendations on this account.

Mr. Marvel asked if the Senate Finance Committee had amended the budget to pay audit assessments over a period of several years. Ms. Matteucci said her recollection was the Senate Finance Committee had increased the time for payment of the audit portion of the indirect cost allocation from four years to eight years. She requested that if this action was taken by both houses, a confirming letter from the Senate and Assembly be sent to the Budget Division.

MR. MARVEL MOVED TO AMEND THE SHEEP CERTIFICATION TO CONCUR WITH THE RECOMMENDATIONS OF THE SENATE FINANCE COMMITTEE AND CLOSE THE BUDGET AS AMENDED.

MS. TIFFANY SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY. MR. DINI, MRS. CHOWNING AND MR. HELLER WERE ABSENT.

BUDGET CLOSED.

FIRE MARSHAL - PAGE 1409

Mr. Stevens pointed out there were reorganization savings in this account. In other budget accounts the committee had transferred reorganization savings to vacancy savings.

MR. MARVEL MOVED TO AMEND THE FIRE MARSHAL BUDGET TO TRANSFER REORGANIZATION SAVINGS TO VACANCY SAVINGS AND CLOSE THE BUDGET AS AMENDED.

MR. SPITLER SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY. MR. DINI, MRS. CHOWNING AND MR. HELLER WERE ABSENT.

BUDGET CLOSED.

CAPITOL POLICE - PAGE 1413

Mr. Stevens noted the budget included payment for compensatory time in the second year of the biennium. Normally paid compensatory time was not budgeted. He added there was some group insurance savings (approximately $8,000) in the second year of the biennium resulting from the hiring of new employees in January 1995.

MR. MARVEL MOVED TO CLOSE THE CAPITOL POLICE BUDGET AS RECOMMENDED BY THE GOVERNOR.

MRS. WILLIAMS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY. MR. DINI, MRS. CHOWNING AND MR. HELLER WERE ABSENT.

BUDGET CLOSED.

HAZARDOUS MATERIALS TRAINING CENTER - PAGE 1440

Mr. Stevens suggested holding this budget. He noted legislation related to this budget had been referred to subcommittee. He noted funds generated by the Beatty facility were not coming in as projected as a result of California reducing its fee for disposing of hazardous materials. Current fee revenue projections were $320,000 versus original projections of $459,000, including approximately $70,000 in one-time monies which were held in reserve because revenues exceeded budgeted amounts in fiscal year 1991-92. If revenues were dropped to $250,000 per year, only $2,000 would remain in the reserve account in the second year.

MILITARY - PAGE 1445

Mr. Stevens pointed out utility costs were included in the Executive Budget for new military facilities to be constructed in the coming biennium. Fiscal staff recommended eliminating utility costs for those buildings and issuing a letter of intent to the agency to approach the Interim Finance Committee if and when utility expenditures were required. This action would reduce utility costs $10,000 in the first year of the biennium and $73,000 in the second year for a General Fund savings of $2,500 and $18,000, respectively.

Mr. Perkins asked the status of the educational assistance program. Mr. Stevens responded the tuition waiver was included in the National Guard Benefits account. The Executive Budget recommended elimination of the educational assistance program. That issue was not related to this particular budget.

MR. MARVEL MOVED TO AMEND THE MILITARY BUDGET TO REDUCE UTILITY EXPENSES AND CLOSE THE BUDGET AS AMENDED AND ISSUE A LETTER OF INTENT.

MR. SPITLER SECONDED THE MOTION.

Mr. Price reminded the committee the Department of Motor Vehicles subcommittee recommended moving the Nevada National Guard to special service agencies with the Public Employees Retirement System and the State Industrial Insurance System. He noted there was a question about the constitutionality of the Governor commanding the National Guard.

Chairman Arberry suggested closing the budget and dealing with the subcommittee recommendation as a separate issue. Mr. Price agreed.

THE MOTION CARRIED UNANIMOUSLY. MR. DINI, MRS. CHOWNING AND MR. HELLER WERE ABSENT.

BUDGET CLOSED.

Mr. Price noted traditionally the chief officer, whether president or governor, was considered the commander-in-chief of the armed services and the subcommittee believed that organizational structure should be retained.

MR. PRICE MOVED TO ADOPT THE RECOMMENDATION OF THE SUBCOMMITTEE TO CLASSIFY THE NEVADA NATIONAL GUARD AS A SPECIAL PURPOSE AGENCY.

MR. MARVEL SECONDED THE MOTION.

Ms. Matteucci said the Administration could not support the subcommittee's recommendation. The Governor's reorganization proposal contained a provision which would protect the constitutionality of the commander-in-chief to the military. She noted the Adjutant General had been satisfied with the provision. She said there was no justification for including such a small agency with the other special purpose agencies. She recommended strongly against adopting the subcommittee's recommendation.

THE MOTION CARRIED. MRS. EVANS AND MRS. WILLIAMS WERE OPPOSED. MR. DINI, MRS. CHOWNING AND MR. HELLER WERE ABSENT.

There being no further business, the meeting was adjourned at 10:55 a.m.

RESPECTFULLY SUBMITTED:

_________________________

C. Dale Gray

Committee Secretary

Assembly Committee on Ways and Means

May 26, 1993

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