MINUTES OF THE

      ASSEMBLY COMMITTEE ON WAYS AND MEANS

 

      Sixty-seventh Session

      June 10, 1993

 

 

The Assembly Committee on Ways and Means was called to order by Chairman Morse Arberry, Jr., at 8:00 a.m., on Thursday, June 10, 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

     

 

ASSEMBLY BILL 723-     Revises provisions regarding group insurance for public employees.

 

Assemblyman Bernie Anderson, District 31, testified that AB 723 was comprised of three principal components.  First, it would allow all public employees to belong to the state health insurance system at the same rate as state employees.  It would also allow all retired public employees to voluntarily belong to the state system at the same rate as retired state employees.  Finally, it provided for the same stipend for all retired public employees as currently provided for retired state employees.

 

Mr. Anderson explained he introduced this legislation in order to open discussion regarding equity for public employees.  He noted no issue affected individuals as significantly as health care.  The problem of ensuring adequate health care insurance for all actively employed and retired individuals could not be solved until a dialogue was begun.

 

Mrs. Evans asked Mr. Anderson to explain the fiscal note.  Mr. Anderson said estimated costs were approximately $2.3 million each year.

 

Ms. Judy Matteucci, Budget Director, noted, for clarification, the cost estimates were $2.3 million for fiscal year 1993-94, $2.6 million for fiscal year 1994-95 and $3 million plus for each year thereafter.

 

Ms. Gaylyn Spriggs stated she had requested the bill draft during the past interim because county employees were invited to join the health insurance system with the understanding there would be no change in premium rates for 18 months.  Less than six months later, the rates were increased significantly.

 

Ms. Spriggs noted the purpose of creating large insurance pools was to lower costs.  She said she did not understand why some groups within the pool paid higher rates than other groups.  All groups within the pool should pay the same rate.

 

Ms. Spriggs said Mineral County rates were increased due to a poor rating.  However, when she researched the matter, she was told the actuarial information for Mineral County was not available.  She questioned how the determination of a poor rating was made.

 

Ms. Spriggs reiterated her belief that everyone in the state insurance fund should pay the same rate.  She said she did not believe there would be a fiscal impact from passing this legislation.

 

Ms. Giunchigliani asked if the county employees represented only one component of the insurance pool.  Ms. Spriggs said there were many different groups in the state insurance pool.  In this instance only the smaller counties were affected.

 

Ms. Giunchigliani inquired whether the bill would allow for retired county employees to participate voluntarily to the state insurance system.  Ms. Spriggs responded affirmatively.

 

Ms. Giunchigliani asked why there would be a General Fund impact.  Ms. Spriggs said it was her understanding retired employees would have to pay their own premiums.  Therefore, she did not understand where the fiscal note came from.

 

Mr. Jerry Connor, representing the Nevada Association of School Administrators, said this was a matter of equity.  The Legislature established the state-funded program to provide medical coverage for state workers.  The Legislature also provided for other small government units, which would find it difficult to provide reasonable medical insurance coverage, to participate in the program.

 

Mr. Connor noted AB 140 of the sixty-sixth legislative session had been approved which allowed the Committee on Benefits to rate groups separately.  The results were catastrophic.  Instead of spreading cost increases over the entire pool at a rate of approximately $4 per month, the single groups were rated separately and were assessed increases of over $200 per month.  He said that defeated the purpose of group insurance.  He asked the committee to be empathic when reviewing this issue.

 

Mr. Connor suggested the fiscal note was probably tied to premium payments for retirees.  If equity was the issue, there would be no fiscal note.

 

Mr. Allin Chandler, Clark County Association of School Administrators, testified as a result of passage of AB 140 of the sixty-sixth legislative session, a consultant reviewed the claims experiences of the non-state groups based on limited information. 

Mr. Chandler said the non-state agencies were told the shortfall which resulted from the additional cost of medical insurance was approximately $765,000.  He calculated the shortfall could have been resolved by increasing premiums for all participants by $3.71.  Instead, separate ratings were created.  As a result, family rates for non-state agencies with more than 100 employees increased from $323.75 per month to $656.12 per month.  Also, the family rate for retirees increased from $316.74 per month to $524.50 per month.

 

Mr. Chandler noted the Committee on Benefits had met with the non-state agency participants to hear their concerns.  As a result of the meeting, the Committee on Benefits agreed to subsidize the non-state agency participants from reserves set aside for unreported claims.  The family rates were adjusted for that year only to $427.01 per month and $420.46 per month for retirees.

 

Mr. Chandler said it was apparent the data being used to evaluate claims experience for the non-state agency participants was flawed.  In July 1992 the Committee on Benefits chose not to renew the contract with the existing consultant and hired a new consulting firm to provide actuarial services.

 

Mr. Chandler distributed to the committee copies of data from an analysis of the state self-funded plan (Exhibit C).  He pointed out the non-state agencies represented approximately 11 percent of the total participants in the plan but the total increase in claims for that group was less than 2 percent.

 

Mr. Chandler stated rates increased significantly again in 1993 for all participants but the Committee on Benefits was not in a position to offer any additional stipends to subsidize premium payments.

 

Mr. Chandler said current rates were comparable for each group of participants and there was no need to create separate rates.  AB 723 would eliminate the separate rates.

 

Mr. Bart Mangino, incoming President, Clark County Association of School Administrators, said he reinforced the testimony of Mr. Connor and Mr. Chandler.  He requested the committee's support of AB 723.

 

Chairman Arberry noted combining rates for all participant groups would mean some groups would have to pay more in order for the non-state agency participants to pay lower premiums.  He asked how that would be equitable.

 

Mr. Chandler responded the claims experience for the Clark County Association of School Administrators had been better than all other groups during the first nine months of 1992.  Had that experience been included in the total group experience, rates for all participants would have decreased.  He said if all participants were evaluated as one group, the insurance program would become more stable for all participants.

 

Chairman Arberry said there was also the risk that the small groups' claims experience would be worse than the larger group and combining them would cause rates to increase for all participants.

 

Mr. Tom Grady of the Nevada League of Cities expressed support for AB 723.

 

Ms. Lyndsey Jydstrup of the Nevada State Education Association introduced Ms. Annie Barclay of the Education Support Employees Association.

 

Ms. Jydstrup noted a third component of AB 723 was that the state would provide the same stipend to all retired public employees as it did to retired state employees.  She reiterated this was an issue of equity.  It was only fair that all public servants who did not work for the state had the same opportunity for affordable, quality health care as state employees.  She said she recognized that the cost of AB 723 was high and all three goals might not be accomplished immediately.  However, she urged the committee to begin the process and enact AB 723.

 

Ms. Annie Barclay urged support of AB 723.  She said there was a tremendous need to allow other public employees access to the state health plan.  She explained employees of small groups were having to subsidize health insurance premiums for retirees.  She urged the committee to allow retired public employees access to the state system, which would allow them to purchase affordable health care.

 

Mr. Wil Keating, Public Employees Retirement System, said the Retirement Board had not taken a position on AB 723.  However, the Board recognized the serious problem facing current and future retirees.  He said he also recognized the problems facing managers of health insurance programs.  He expressed the hope some middle ground could be agreed on.

 

Chairman Arberry asked Mr. Keating to review the situation and report back to the committee.  Mr. Keating agreed to do so.

 

Ms. Rita Hambleton, AARP, testified in support of AB 723, particularly the provision to allow public employee retirees access to health insurance.  She encouraged the committee to support the bill.

 

Mr. Martin Bibb, Retired Public Employees of Nevada, expressed support for AB 723.  He noted many retired public employees had no continuation of health benefits at the time of their retirement.  This measure was extremely important for those retirees, many of whom had indicated they were willing to join the state plan.

 

Mr. Bob Gagnier, State of Nevada Employees Association, testified in opposition of AB 723.  He noted SB 278, pending in the Assembly Government Affairs Committee, ensured that other public employee retirees who opted to join the state plan would be rated separately from state retirees.  He said that measure was equitable to avoid adverse selection which would result from people entering the plan who would damage the claims rating.

 

Mr. Gagnier informed the committee state law required local governments to offer health insurance to retirees.  Retirees who did not now have insurance coverage chose not to take the insurance offered by their local government employer.

 

Mr. Gagnier said the 1991 Legislature allowed the Committee on Benefits to rate local government groups separately because those groups were impacting the plan.  The statute did not state those groups would always pay higher premiums.  If the local government groups improved their claims experience, their rates would decrease.  He pointed out the local government employees had already cost the state $2 million, which was the amount lost by subsidizing the local government group.  He said AB 723 would be a General Fund appropriation to subsidize local governments and state employees were resentful, especially since the state was not increasing subsidies to state employees.

 

Mr. Gagnier noted local government employees could collectively bargain with their employers to negotiate health benefits and amounts paid by the employer.  State employees were denied that opportunity.  He suggested local governments, not the Legislature, should take care of local government employees and it was a mistake to have allowed local government employees to participate in the state health plan.

 

Mr. David Thomas, State Risk Manager, stated, for clarification, that Mineral County asked to join the state plan in September of 1991.  The state did not ask Mineral County to join the state plan.  Mineral County joined the state plan, effective November 1, 1991.  At that time, Mineral County was provided an explanation of the benefit and rate structures and informed the rates would be in effect through December 31, 1991.  At the end of November 1991, the rates were changed by the Committee on Benefits to put in effect the Committee's ability to establish separate rating pools for the non-state agencies.  The rates changed in January 1992.  Due to the significant concern expressed by the non-state agencies, the Committee subsidized the family rates from plan reserves for one year.  Mineral County, Mineral County School District and Mt. Grant General Hospital subsequently withdrew from the state plan.

 

Mr. Thomas said with respect to the fiscal note, the cost impact (over $1 million per year) would result from the provision that the rates for active employees of participating non-state agencies be the same for state employees.  The costs associated with the Department of Personnel contributing the full amount provided by law toward the premium for non-state agency retirees who elected to join the state plan were estimated to be in excess of $1.3 million per year.

 

Mr. Thomas also referred to SB 278, which would allow non-state retirees to join the state plan but would establish a separate pool for those retirees for rating purposes.

 

Mr. Perkins asked if risk ratings for non-state agencies were done collectively or individually.  Mr. Thomas responded the Committee on Benefits had established four separate rating pools.  The first pool was all state active employees.  The second pool was all retirees, regardless of where they retired from.  The non-state active employees were grouped in two pools, one for agencies with 100 or more employees and one for agencies with less than 100 employees.

 

Mr. Perkins said having separate risk pools in a group health insurance plan flew in the face of the concept of group insurance and shared risk.

 

Mr. Perkins noted when the City of Henderson had participated in the state plan, approximately 80 percent of the affected employees were public safety employees who tended to be low-risk employees.  He said he was troubled by having different layers of ratings in one group health plan.  He suggested if the local government groups were impacting the system to such a significant degree, perhaps they should not be allowed to participate.

 

Ms. Judy Matteucci, Budget Director, said until 1991 the Committee on Benefits was mandated to accept any group which applied, within certain limitations, without the opportunity to separately rate them.  The purpose of separately pooling the various groups was to protect the funding sources.  The policy question before the Legislature was whether or not to subsidize local government with General Fund dollars.  Until 1991 the position of the Legislature was that the state should subsidize small entities and the subsidy was becoming fairly significant.

 

Ms. Matteucci noted spreading the risk was how the benefit from a group plan was derived, regardless of the makeup of the participants.  She disagreed with earlier comments that the benefits of the group plan would be negated by allowing separate rating pools.  She said the Administration supported allowing local governments to continue to participate in the state plan but noted the Legislature had to remain cognizant of the various funding levels which were supporting the people participating in the plan.  The separate pooling attempted to group like participants in order to take advantage of risk sharing.

 

Mr. Perkins pointed out there was a possibility of the small groups subsidizing the state if their claims experience improved.  Ms. Matteucci agreed.

 

Mr. Perkins said it was his understanding the City of Henderson had been invited by the Committee on Benefits to join the state plan because of its excellent claims rating.  Ms. Matteucci said she did not recall the Committee on Benefits ever soliciting non-state agencies.  She noted, however, the Administration was in support of expanding the insurance pool and supported SB 278, which would allow retirees to opt into the state program as part of a separate rating pool.

 

ASSEMBLY BILL 727-     Revises provisions governing purchase of municipal securities by Nevada.

 

Mr. Bob Seale, State Treasurer, introduced Mr. Brian Krolicki, Chief Deputy Treasurer, and Mr. Henry Channon, Managing Director, Smith-Barney.

 

Mr. Seale explained AB 727 proposed expansion of the Municipal Bond Bank.  He stated the Municipal Bond Bank had made it possible for local entities to borrow at a lower interest rate, thereby saving literally millions of dollars.  AB 727 would allow additional entities, such as school districts and water districts, to participate in the Municipal Bond Bank.  He added the activities of the Municipal Bond Bank had earned significant revenue for the state ($6.7 million over the last biennium).

 

Mr. Channon explained the state was authorized to buy bonds from local governments through the Municipal Bond Bank.  The state would derive revenue to purchase local government bonds by selling bonds to the public.  The state was able to sell bonds for a lower interest rate because of its AA credit rating and could pass that benefit along to the local governments.  The program was restricted to only those projects dealing with natural resources to avoid impacting the state's debt limit.  In the mid-1980s, the Legislature had attempted to expand the Municipal Bond Bank by constitutionally exempting all Municipal Bond Bank projects from the debt limit.  That measure failed.  When Mr. Seale was elected Treasurer, he sought an alternative mechanism for expanding the benefit of the Municipal Bond Bank to school districts, small cities and other local entities which had difficulty borrowing money.

 

Mr. Channon said AB 727 incorporated the proposed alternative.  He noted this legislation would not authorize any entity to issue debt.  Nor would it require any local government to participate in this program; the program would remain completely voluntary.  He noted this legislation would not affect the state's debt limit or credit rating.  Any bonds issued pursuant to this expanded use of the Municipal Bond Bank would not become general obligations of the state.  They would be payable only from revenues from local securities.  The security for the ultimate bond holder would be the monies which the local entity would pay on its bonds.  In addition there would be an intercept mechanism in place which would provide that if the local government did not make its payments to the Municipal Bond Bank, the state would be authorized to intercept money that would be going back to that local government.  It was the intent that the intercept mechanism would never have to be used but it would provide an additional layer of security to protect the credit rating.  Before the intercept mechanism could be used, the State Treasurer would have to receive approval from the Board of Finance.  Bond issues would have to be approved by the Board of Examiners.

 

Mr. Channon explained AB 727 required some minor technical changes to clarify the language.  Bond counsel had reviewed the draft and suggested amending the bill to ensure any revenues eligible to be intercepted were legally available and were not pledged to some other bond issue or earmarked for special purposes.  In addition, clarification was necessary to require that bond issues under the enhanced program would have to go through a judicial confirmation process to ensure they would not impact the state's debt limit.

 

Senator Hal Smith, Clark Senate District 1, testified he had been involved in investment banking throughout Nevada for 15 years, during which time the concept of the Municipal Bond Bank was developed.  He stated the program had been an extremely valuable tool for local governments.  AB 727 would expand the ability of local governments to take advantage of the state's favorable bond rating without impacting the state financially.  He said he fully supported the concept and asked for the committee's support as well.

 

Chairman Arberry asked Mr. Channon to provide the proposed amendments in writing to the committee.  Mr. Channon agreed to do so.

 

Chairman Arberry called for public testimony.

 

Mr. Bob Hadfield, Executive Director, Nevada Association of Counties, said his agency had been involved with the Treasurer for over a year developing this concept.  He urged the committee's support for the amended legislation.

 

Mr. Marvin Leavitt, City of Las Vegas, stated AB 727 appeared to offer a beneficial marketing alternative to local governments.  He expressed support of the bill.

 

Mr. Tom Grady, Nevada League of Cities, testified in support of AB 727.

 

Ms. Matteucci said while she was not opposed to AB 727, she had some concerns regarding the intercept mechanism.  She noted if a school district did not make a payment, the Treasurer could intercept Distributive School Account payments to the district which might be previously allocated to salaries or contractual obligations.  She suggested that language be clarified and acknowledged the proposed amendment might be adequate to do so.

 

Ms. Matteucci added appropriation withholds could be considered state debt because state tax revenue was being used to pay a state debt.  She also suggested clarifying that payments be made from any available money by adding the words "in the Municipal Bond Bank" since the Treasurer had money available for his use throughout the state treasury.

 

Mr. Channon said he believed Ms. Matteucci's concerns were addressed in the proposed amendments.  He reiterated the intent of the legislation was that the intercept mechanism would never have to be used.

 

Ms. Matteucci said the bill needed to include some guarantee to that effect.

 

Chairman Arberry asked Mr. Channon to meet with Ms. Matteucci to review the proposed amendments and return to the committee with a proposed compromise.

 

Mr. Seale said a compromise would be developed expeditiously.  He noted Dr. Eugene Paslov, State Superintendent of Public Instruction, was unable to attend this meeting but he also was in support of AB 727.

 

ASSEMBLY BILL 682-     Makes changes concerning aid to dependent children.

 

Assemblywoman Chris Giunchigliani, District 9, said she was recommending AB 682 as a form of Welfare reform in lieu of what the Welfare Division had proposed.

 

Ms. Giunchigliani explained AB 682 would change the standard of need.  She noted the bill was crafted to include incentives but also time limitations to cut benefits of recipients who did not proceed forward.  It would also allow the Welfare Division to approach the Interim Finance Committee if there were problems with funding.

 

Ms. Giunchigliani noted a major concern of Welfare recipients was that if they became employed, they would lose medical benefits.  AB 682 would allow former Welfare recipients who become gainfully employed to remain eligible for medical assistance by making insurance co-payments.  Welfare would also pay child care costs for recipients who became gainfully employed.

 

Ms. Giunchigliani stated AB 682 would also require that parenting programs be established to teach parenting skills.  Welfare payments would be reduced 5 percent for recipients who did not complete the parenting training.  AB 682 would establish a system of mobile immunization units which could be expanded to included other health care services.  Parents who could document that their children had received proper immunizations would be eligible for an additional 5 percent allotment of food stamps.

 

Ms. Giunchigliani testified that studies had shown at-risk children would benefit from kindergarten.  AB 682 would provide an opportunity for school districts to provide kindergarten for at-risk children.

 

Ms. Giunchigliani added the bill would expand the JOBS program by helping people obtain a GED, providing vocational skills assessments, training for job interviews and teaching life skills.  She explained the proposed program was modeled after a program in Cleveland which provided job training, legal advice, child care, health clinics and other services to assist people out of poverty.  The Cleveland program had helped 6,000 people since 1986.

 

Ms. Giunchigliani said the state needed to break the cycle of not properly funding Welfare programs and begin giving a hand up rather than a handout.  She stated AB 682 represented an investment in making Welfare recipients taxpaying citizens and ensuring that their children would become taxpaying citizens.  She urged consideration of AB 682.

 

Chairman Arberry called for public testimony.

 

Mr. Jon Sasser, Nevada Legal Services, said AB 682 served as a reminder that the Legislature could have different priorities.  He said if the priority was to combat the rapid growth of poverty in Nevada, this type of legislation would be given serious consideration.  He reiterated passage of AB 682 would be an investment in Nevada's younger generation who would, in the future, support our social security system and keep our economy running.

 

Mr. Sasser said unfortunately the Governor had clearly indicated that Nevada's priority was to keep taxpayers paying the second lowest tax rate of any state in the United States.  The deep cuts made to the Medicaid, JOBS program and ADC budgets in 1992 were not restored in the Executive Budget.

 

Mr. Sasser noted the committee had already chosen not to fund a scaled back "fill-the-gap" program.  He said he had no doubt other worthy legislation with reasonable price tags and good long-term investment possibilities, such as presumptive eligibility for women needing prenatal care, supplementation for the WIC program and benefits for two-parent households, would face the same fate.

 

Mr. Sasser expressed the fear that 50 percent of future budget cuts would come out of the Welfare Division budget, leading to further reduction in ADC benefits, Medicaid benefits and perhaps elimination of the state supplement to the blind and disabled.  He noted the Welfare Division also faced a capped budget for the coming biennium and feared caseloads would grow beyond projections with the division having no opportunity to seek relief from the Interim Finance Committee.

 

Mr. Sasser noted the federal government might reduce incentive payments to the Welfare Division in the amount of $2.5 million over the coming biennium.  He added if state revenues were below projections, the Welfare Division would pay a disproportionate share of any resulting budget cuts.  He pointed out every General Fund dollar lost meant a lost federal matching dollar.  He thanked Ms. Giunchigliani for introducing this legislation.

 

Ms. Jan Gilbert, representing the League of Women Voters of Nevada and the ADC Coalition, stated this was one of the finest pieces of legislation the League of Women Voters had seen because it incorporated all the positive aspects of Welfare reform.  She applauded Ms. Giunchigliani for her foresight and progressive concepts to improve the lives of poor women and children.

 

Ms. Gilbert testified the Welfare subcommittee had requested a plan for implementing Welfare reform.  She said AB 682 represented the plan.  She said it was the responsibility of the state to help poor people attain a level where they could begin to help themselves.  She urged the committee to consider the bill, in whole or in part.  She pointed out removing budget caps or increasing standard of need to 60 percent would be an important step.

 

Ms. Myla Florence, Administrator, Welfare Division, introduced Mike Willden, Deputy Administrator.  Ms. Florence indicated she was appearing in response to a request for a fiscal note on AB 682.

 

Ms. Florence said there were some good concepts contained in AB 682.  She noted the committee had assigned the Welfare Division the responsibility of meeting during the interim to develop a reform proposal to present to the 1995 Legislature.  Some of the elements of this legislation might ultimately come out of those deliberations.

 

Ms. Florence urged the committee's favorable consideration of Section 2 of AB 682.  She said with all of the uncertainty of federal mandates and possible national reform measures, she would like to see the issue of a capped budget debated.  She asked the committee to also keep in mind that if federal participation was to be obtained, the state had to develop a cost neutral plan.  The state could not derive all of the benefits without having some sanctions.

 

Ms. Florence said while the fiscal note looked alarming, it was a minimal estimate.  The division did not have sufficient time to fully calculate the various components of the bill which might be impacted by increased caseloads.

 

Mr. Humke suggested it might be preferable to have a fully-funded state Welfare system.  He asked if that would mean simply doubling the cost of the present system or if the program could be totally reconstructed.  Ms. Florence responded the cost would more than double because some federal matches were greater than 50 percent.  She pointed out the Clinton administration was proposing to reduce all federal matches to 50 percent, however.

 

Mr. Humke questioned whether developing a fully-funded state program would eliminate the need to comply with federal mandates.  Ms. Florence replied if Nevada opted out of the federal program, it could design its own program, such as Arizona had done.

 

Mr. Humke commented a redesigned program did not necessarily have to cost twice as much as the state was now paying.  Ms. Florence said she believed the current state program was, for the most part, a baseline program.  There were not a lot of options or generous Welfare payments.

 

Mr. Humke pointed out the program was baseline according to federal requirements.  Without the federal mandates, Nevada could design a program any way it wished.  Ms. Florence said Mr. Humke was correct.

 

Mrs. Evans stated the issue of caps had taken on quite a different meaning than it had in the past.  She pointed out cuts in the federal Medicaid and Medicare budgets were likely to impact the Nevada Welfare budget.  If the Welfare budget was capped, it would be frozen until the 1995 Legislature.  Removing the caps would not mean additional money would automatically be awarded to the Welfare Division through the Interim Finance Committee but the division would at least have an opportunity to come before the Interim Finance Committee to explain its case and for the Interim Finance Committee to evaluate the matter and make a determination about what action was appropriate under the circumstances.  With the caps in place, however, the Interim Finance Committee was precluded from even looking at the problem.  She said that was a "head-in-the-sand" approach to doing business and was poor public policy.  The Legislature had perpetuated this poor public policy in the past and the circumstances this session indicated the dangers of continuing to do so.  She expressed the hope the committee would seriously discuss and debate this issue because it could mean some dire consequences for the Welfare Division's programs.

 

Mrs. Williams asked how well the Arizona Welfare program was working.  She noted a physician from Phoenix had informed her that mental health and mental retardation systems were all but nonexistent in Arizona.  Ms. Florence replied Arizona now had federal participation in its health program as a result of a waiver.  She said she was unfamiliar with Arizona's mental health system.

 

Ms. Florence pointed out the federal government was also proposing to impose caps on Medicare and Medicaid.  Under that scenario, the division would be even more constrained if Section 2 did not pass.  She commended Ms. Giunchigliani for courage in introducing AB 682 and urged the committee's consideration of at least Section 2.

 

Ms. Giunchigliani questioned whether the employment and training component of AB 682 could be handled by expanding the current JOBS program.  Mr. Willden responded affirmatively.

 

Ms. Giunchigliani asked if the prenatal mobile units could be included in the Health Division budget.  Mr. Willden responded it was possible to do something along those lines.

 

Ms. Giunchigliani said she understood the Welfare Division could not be able to work on the "fill-the-gap" program until 1995, when work on the NOMADS computer program would be completed.  Mr. Willden said Ms. Giunchigliani's understanding was correct.

 

ASSEMBLY BILL 728-     Requires issuance of bonds for restoration of Virginia & Truckee Railroad from Virginia City to Carson City.

 

Assemblyman Joe Dini, District 38, informed the committee there was a program currently underway to restore the Virginia & Truckee Railroad from Virginia City to Carson City.  He noted AB 696 would create a tri-county railroad commission in the three counties involved in the project.  The commission would be the entity which would hold title to the property and build the railroad.  It was anticipated the railroad would become a major tourist attraction.  It was expected 4,000 to 5,000 visitors would use the railroad annually.

 

Mr. Dini stated the legislation proposed a bond issuance of $5 million to generate revenue to pay startup costs for the project.  He said he recognized there were some problems with bonding capacity but pointed out $900,000 in bonds had been issued to fund the Henderson Railroad and there was a precedent for the issuance of bonds.  He introduced Mayor Marv Texeira of Carson City.

 

Mayor Texeira explained the railroad would run 17 miles, from the Deer Run area of Carson City to downtown Virginia City.  The cost of the project would be $7 million to $8 million.  The first $1.5 million had been allocated and was being funded with Intermodel Service Transportation Act enhancement money.

 

Mayor Texeira stated railroad use was conservatively estimated at 250,000 rides per year.  He said the issuance of up to $5.1 million in bonds would be a positive investment for the state.  He explained the railroad would generate room tax revenue, sales tax revenue and gaming tax revenue.  In addition, the railroad would pledge up to $2 per ride in perpetuity to be refunded to the state.

 

Mayor Texeira estimated it would take a year or two to get the railroad operating.  Once ridership started, however, revenue to the state would be approximately $500,000 plus the tax revenue.  In addition, the project would create approximately 400 new jobs.

 

Mrs. Chowning asked how much tickets would cost.  Mayor Texeira said initial ticket prices would be $15 to $20.  Mrs. Chowning asked how that price compared to the cost of riding similar trains in other states.  Mayor Texeira responded the cost of riding the Durango to Overton train in Colorado was $35.

 

Mr. Ron Allen, Virginia & Truckee Railroad Historical Society, noted part of the group which would be administering funding for this project was a non-profit corporation.  In addition, part of the function of the commission would be securing funding and/or donations to build the railroad.  He said with the state financing and other projected revenue, this could be a successful project within a very short time frame.

 

Mr. Marvel asked how much rolling stock the railroad would have.  Mayor Texeira replied there were two locomotives.  He estimated another $500,000 to $750,000 would be invested by the current owner, Mr. Bob Gray, for new railroad cars and equipment upgrades.  He estimated ultimately there would be approximately ten cars for each train.

 

Mr. Marvel questioned whether new track would have to be provided.  Mr. Allen said there currently was no track.  The original track was removed in 1940.  He noted some adjustments would have to be made to the route because structures had been built on portions of the original right-of-way.

 

Assemblyman Dean Heller, District 40, expressed support for AB 728.  He said he concurred with some of the remarks of earlier witnesses.  He stated AB 728 primarily represented revenue enhancement to kick start this program.  He noted the 3-mile line currently running between Virginia City and Gold Hill was a solid tourist attraction for northern Nevada.  He urged the committee's support for this legislation.

 

Mr. Dini noted there had been great support for this project from the general public.

 

Mr. Chet Hillyard, Chairman, Lyon County Board of Commissioners, testified in support of AB 728 and asked for the committee's favorable consideration of the bill.  He pointed out this project would produce employment, increase tourism and benefit not only the state but also Lyon County.

 

Mr. Larry Prater, Vice President, Storey County Commission, echoed the statements of the previous witnesses.

 

ASSEMBLY BILL 118-     Requires department of data processing to conduct study to improve management of information concerning hazardous materials.

 

Ms. Karen Kavanau, Director, Department of Data Processing, stated the purpose of AB 118 was to require the Department of Data Processing to analyze ways to improve data gathering, collection and communication of information regarding hazardous materials as they pertained to emergency response.  The bill was the result of the ACR 79 legislative subcommittee study.  Its intent was for the Department of Data Processing to work closely with local governments and the public to simplify the existing system.  It was not a move to create another system but to ensure uniform reporting to a central data repository and enhance public access to the information.

 

Mr. Perkins asked if there was a fiscal note.  Ms. Kavanau said the study would cost nothing because it could be encompassed within the department's new strategic planning process.

 

ASSEMBLY BILL 717-     Makes appropriation to state librarian for preservation of statewide library resource programs.

 

Ms. Martha Gould, Director, Washoe County Library, said she was appearing on behalf of the Nevada Library Association, the Nevada Association of Counties and the University of Nevada, Reno Library.  She referred to this bill as the "network bill".  She explained it would appropriate money to the State Library to maintain programs which had been in place for 20 years.

 

Ms. Gould noted there were four components to the bill.  The appropriation would offset interlibrary loan postage and handling costs.  The bill also proposed a one-time capital cost for computer network equipment at 26 rural libraries.  The third component was to restore to the State Library the contract costs and telecommunications costs of the statewide data base.  Finally, it would fund document delivery costs for small libraries without periodical subscriptions.

 

Ms. Gould acknowledged the state's fiscal crisis.  Nevertheless, she expressed the hope funding could be located for the State Library.  She noted this funding would be pass through money since it went directly to public school and university libraries in the state.

 

Ms. Gould then read to the committee a letter from the President of the Nevada Library Association supporting AB 717 (see Exhibit D).

 

Mrs. Evans asked what the current funding source for these programs was.  Ms. Gould said in the past, these programs were included in the State Library's budget.  They were established by the Legislature in 1973.

 

Mrs. Evans questioned why a special appropriation was needed at this time.  Ms. Gould responded this appropriation represented funding which was cut from the State Library's budget.  She added the county libraries could not fund the statewide system without assistance from the State Library.

 

Ms. Jan Bachman, Deputy Director, Carson City Library, read a statement in support of AB 717 prepared by Ms. Carolyn Rawles-Heiser of Douglas County Library, who could not be present (see Exhibit E).

 

ASSEMBLY BILL 729-     Revises provision concerning fees charged for information obtained from central repository for Nevada records of criminal history.

 

Mr. Dennis Debaco, Criminal History Records Repository, Nevada Highway Patrol, commented the issue of fees had been discussed for several years.  While a small increase in revenue was projected from passage of AB 729, the Department of Motor Vehicles and Public Safety did not support the bill.  He explained NRS 424.031 empowered the Welfare Division to charge reasonable fees to pay for investigations.  Since there was a mechanism in place to pay for Welfare investigations, there was no reason why repository fingerprint fees should be exempted.  He said the repository provided a service to all state agencies and the costs associated with its operation needed to be paid for through user fees or supplemental General Fund appropriations.  The Department of Motor Vehicles and Public Safety believed the user fee scheme was the most appropriate mechanism.

 

Mr. Debaco stated this matter had been presented to the user community in the past.  The users felt since statewide criminal justice agencies were the primary contributors of data to the repository, it was unreasonable to charge the agencies fees to make inquiries against the data which they had submitted.  He pointed out law enforcement agencies, courts and district attorneys were statutorily required to participate in the program at great cost.

 

Mr. Debaco added the department was concerned about the potential mushroom effect the bill might have in the future.  If the Welfare Division was exempted from fees, it could reasonably be expected other state agencies would ask for exemptions as well, which would weaken the repository financially.

 

Ms. Candy Dickerson of the Reno Police Department testified in opposition to AB 729.  She explained Reno Police Department spent approximately $100,000 annually to put information into the system and it would be unfair to charge for access to that information.

 

Ms. Giunchigliani stated this bill was to create equity for people who were required to be fingerprinted for employment purposes.  She pointed out only school teachers were currently paying for fingerprints and thereby subsidizing other groups.  All those who required fingerprints should pay for criminal histories.

 

Ms. Debbie Williams, Washoe County Sheriff's Office, expressed opposition to AB 729.  She said Washoe County spent approximately $82,000 annually to enter and validate information into the system.  Charging for criminal history checks would, in fact, mean paying for information which the county had already paid for.

 

Mr. Humke asked if employees who needed work cards and fingerprints had to pay while agencies did not have to pay.  Ms. Giunchigliani responded some employees were required to obtain a work card, sheriff's card or have a fingerprint check done.  The only group which was being required to pay for those services was school teachers.

 

Mr. Humke questioned whether gaming employees had to pay for those services.  Ms. Giunchigliani said gaming employees might have to pay.

 

Mr. Debaco stated approximately 170 employer user groups used the information system for civil purposes.  The only current exemption to fees was that for the criminal justice user community.

 

Ms. Giunchigliani pointed out criminal justice employees were required to be fingerprinted for employment purposes.  Mr. Debaco said Ms. Giunchigliani was correct.  Ms. Giunchigliani said the issue was that it was inequitable for that group to be exempt from paying fees for fingerprints required for employment purposes.  Mr. Debaco said it was not equitable to exempt the Department of Human Resources.

 

Mr. Ghiggeri stated the Department of Human Resources had been exempted due to funding problems.  Ms. Matteucci explained during the past interim, when fingerprinting fees were increased, the Division of Child and Family Services did not have sufficient funds to pay the additional costs.  At that time the Director of the Department of Motor Vehicles agreed to waive the fees.  The Executive Budget did not include the higher fees for foster parents.  Therefore, if AB 729 was not passed, the Division of Child and Family Services would be faced with the same problem.

 

Mr. Debaco said the Director of the Department of Motor Vehicles had indicated to him the waiver of fees was a temporary measure as a courtesy to the foster care program.  The Department of Motor Vehicles had agreed to the waiver only through the end of the fiscal year when the Division of Child and Family Services could establish a line item to pay for those costs.  He added if AB 729 passed as written, Nevada would be one of six states which currently charged criminal justice agencies to perform background employment checks on their applicants.

 

Mr. Perkins asked how many employment checks criminal justice agencies processed through the system annually and what the cost would be if they were charged.  Mr. Debaco answered approximately 2,100 fingerprint card requests were processed annually for law enforcement applicants.  The fee would be $15 per inquiry.  In contrast, the Department of Education processed approximately 3,500 school teacher applicants.  Approximately 34,000 to 35,000 civil fingerprint cards were processed annually.

 

 

ASSEMBLY BILL 730-     Revises provisions governing account for verification of insurance.

 

Mr. Ray Sparks, Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV), testified AB 730 had resulted from the DMV subcommittee budget recommendations.  It provided that reserves in the insurance verification in excess of $150,000 be transferred to the Highway Fund.  He explained the insurance verification account was funded by revenues received by DMV for the reinstatement of suspended vehicle registrations.

 

Mr. Spitler questioned whether other pending legislation (AB 507) would impact the verification procedure.  Mr. Sparks said the two measurers were not related.  He pointed out, however, a bill pending in the Senate Transportation Committee proposing to reduce reinstatement fees could impact AB 730.

 

ASSEMBLY BILL 316-     Makes appropriations to state board of examiners for settlement of claim on behalf of certain state employees.

 

Mr. Stevens explained the Senate had amended AB 316 at the Budget Division's request.  Money was added for university employees who were not included in the first reprint of the bill.  In addition, payment of attorneys' fees ($15,000) was added to the second reprint.  Fiscal staff recommended that the committee concur with the Senate amendments.

 

Mr. Humke asked if payment of the attorneys' fees was pursuant to the federal court order.  Ms. Matteucci said that was correct.  She said the item was inadvertently left out of the original draft of the bill.

 

      MR. MARVEL MOVED TO CONCUR WITH THE SENATE.

 

      MS. GIUNCHIGLIANI SECONDED THE MOTION.

 

      THE MOTION CARRIED UNANIMOUSLY.  MR. DINI WAS ABSENT.

 

There being no further business, the meeting was adjourned at 11:00 a.m.

 

 

                                                RESPECTFULLY SUBMITTED:

 

 

                                                _________________________

                                                C. Dale Gray

                                                Committee Secretary

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Assembly Committee on Ways and Means

June 10, 1993

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