MINUTES OF THE
ASSEMBLY COMMITTEE ON WAYS AND MEANS
Sixty-seventh Session
June 14, 1993
The Assembly Committee on Ways and Means was called to order by Chairman Morse Arberry, Jr., at 8:02 a.m., on Monday, June 14, 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 737- Mandates adoption of regulations requiring certain state officers and employees to reimburse state for use of state vehicle to commute from residence to place of employment.
Mr. Gary Crews, Legislative Auditor, introduced Mr. Rocky Cooper, Deputy Legislative Auditor.
Mr. Cooper explained a report of an audit of the State Motor Pool Division addressed the issue of home storage of state-owned vehicles and associated commuting costs. The audit revealed many state employees had been authorized to take state-owned vehicles home without providing documentation to justify the benefit to the state of home storage. As of February 1992, 318 state vehicles (excluding Highway Patrol vehicles) were authorized for home storage. Auditors estimated those vehicles were used to commute 1.1 million miles annually at a cost of $300,000. Mr. Cooper suggested cost savings might be realized by improving policies regarding home storage of state vehicles.
Mr. Cooper noted home storage policies did not specifically address long-distance commutes, seasonal home storage, cost effective protection, frequency of call-backs and commuting reimbursement. The State Administrative Manual required the Director of the Department of Administration to approve home storage of state vehicles. The audit revealed employees requesting home storage for emergency call-backs were not required to provide details on the frequency of call-backs which were necessary to determine the number of vehicles needed to respond to emergency call-backs within a geographic location.
Mr. Cooper reported the auditors examined payroll records for 20 Department of Parole and Probation employees authorized for home storage of state vehicles to determine the frequency of emergency call-backs. Sixteen of the 20 employees did not have an emergency call-back in 14 weeks. Two of the four employees with emergency call-backs responded only one time.
Mr. Cooper said representatives of the Reno Parole and Probation office told auditors many officers took vehicles home as a means of securing the vehicles to protect them from theft or vandalism. While state vehicles should have adequate protection, that protection should be at the lowest cost to the state. He noted one Parole and Probation officer stationed in Reno and living in Truckee (30 miles away) had received home storage approval when secure storage was available at the Reno Motor Pool located approximately 1.5 miles from the Reno Parole and Probation office. The Audit Division estimated it cost approximately $1,000 per year to provide security for a vehicle with a round-trip commute of 15 miles. In addition to commuting costs and increased exposure to traffic accidents while commuting, a vehicle stored at home was unavailable to other employees.
Mr. Cooper pointed out home storage without justification was a method for providing additional compensation to employees outside the control of the personnel system. The audit identified one state employee with a duty station in Sparks and a vehicle storage location in Minden, for an estimated annual benefit to this individual of $5,700.
Mr. Cooper said the audit also revealed that seasonal home storage could reduce costs while maintaining adequate protection to the public. As of February 1992, 68 Nevada Department of Transportation (NDOT) vehicles were approved for year-round home storage. Twenty-six of 34 (76%) NDOT emergency call-backs reviewed occurred between November and February. NDOT employees who received undocumented approval for home storage indicated most call-backs were weather related. He advised Montana allowed home storage for transportation employees only during winter months.
Mr. Cooper said taxpayers had a right to be critical of state employees taking state vehicles home based on the results of the audit.
Mr. Cooper indicated the audit report made three recommendations regarding home storage of state-owned vehicles. First, state policies for home storage of state vehicles should be reevaluated. Second, home storage should be approved only for employees who could document the benefit to the state of home storage. Finally, pass legislation establishing a reimbursement policy for employee use of state vehicles for commuting (AB 737).
Mr. Crews testified AB 737 would require the Administrator of the State Motor Pool to establish regulations providing for the reimbursement by state employees and officers for use of state-owned vehicles to commute to and from work. The proposed rate of reimbursement was $.28 per mile and the legislation would exempt reimbursement for authorized use of police, fire and emergency medical service vehicles.
Mr. Crews reiterated the audit had identified approximately 1.1 million miles of personal use of state vehicles for commuting for a cost to the state of approximately $600,000 over the biennium. He suggested passage of AB 737 would reduce the number of abuses occurring within the current system. The bill would still provide for personal use of state vehicles, provided employees reimbursed the state for that use.
Mr. Marvel commented the audit subcommittee had felt it was timely to introduce this legislation. He asked how the reimbursement rate of $.28 per mile had been determined. Mr. Crews responded that $.28 per mile equaled the amount which the federal government allowed as an income tax deduction. Mr. Marvel pointed out reimbursement to state employees for use of their personal vehicle for state business was less than $.28 per mile. Mr. Crews said the current reimbursement rate was $.24 per mile but legislation was pending which would increase that rate to $.27, which formerly was the federal rate. Mr. Marvel suggested the rate be revised to eliminate the disparity.
Mr. Price commented there could be legitimate reasons for state employees using state vehicles for personal business. He asked if there was some flexibility in the policy which would allow for such use. Mr. Crews responded the statutes provided state vehicles were not to be used for personal business; however, interpretation of the law had to be somewhat liberal and allow flexibility in cases which could be reasonably explained. The proposed legislation would not diminish that flexibility.
Mr. Dennis Colling, Administrator, State Motor Pool, proposed amending AB 737 to revise the administration of the reimbursement charge (see Exhibit C).
Mr. Marvel asked if the Board of Examiners concurred with the amendment. Ms. Judy Matteucci, Budget Director, responded affirmatively.
Mr. Marvel asked Mr. Colling if the $.28 per mile charge should be revised. Mr. Colling suggested reimbursement to state employees could be changed to reflect the Internal Revenue Service rate.
Ms. Giunchigliani inquired whether this legislation would conflict with actions taken by the DMV subcommittee to limit employee use of state vehicles. Mr. Ghiggeri responded a letter of intent would be issued from the DMV subcommittee addressing employee use of state vehicles for administrative purposes. AB 737 addressed all employees who commuted in state vehicles.
Vice Chairman Spitler called for public testimony.
Mr. Bob Gagnier, Executive Director, State of Nevada Employees Association, expressed opposition to the bill in its present form. He proposed amending the legislation to clarify that no employee could be forced to take a state vehicle home and then be charged the mileage rate. He pointed out many employees were directed by their supervisors to take state vehicles home.
Mr. Gagnier noted AB 737 called for charging for use of unmarked police vehicles but Parole and Probation Department vehicles were prohibited from being marked. His position was this was unfair.
Mr. Gagnier suggested maintenance supervisors within the Department of Transportation be exempted from the mileage charge because of frequent call-backs.
Finally, Mr. Gagnier stated the amount charged to employees for use of state vehicles and the amount paid to employees for use of personal vehicles on state business should be equitable.
Mr. Humke inquired whether all of the vehicles limited to use for official business were attached to agencies with peace officer powers. Mr. Gagnier responded most of the agencies had peace officer powers. He noted the vehicles were assigned to departments for use by employees who might or might not have police power.
Mr. Ron Hill, Deputy Director, Nevada Department of Transportation, testified the department was concerned with this bill because NDOT maintenance supervisors were mandated to take state trucks home so they would be able to respond directly to emergencies. In some cases those maintenance supervisors did not want to take the trucks home. He said it would be unfair to make those employees provide justification to the Budget Division for using those vehicles.
Mr. Hill said NDOT carefully scrutinized employees who took state vehicles home and how those vehicles were used. He suggested NDOT maintenance supervisors be exempted from this legislation.
Mr. Hill added in rare instances resident engineers were required to drive state vehicles home. He suggested that the legislation provide some way of exempting resident engineers in those instances.
Vice Chairman Spitler asked Mr. Hill if he was proposing an expansion to Mr. Gagnier's proposed amendment. Mr. Hill said he was seeking exemption from the law for these special instances.
Vice Chairman Spitler asked Mr. Hill to provide a proposed amendment to the committee. Mr. Hill agreed.
Mr. Marvel suggested the legislation allow employee use of state vehicles for the convenience of the state. He said the Department of Administration currently had adequate flexibility in authorizing use of state vehicles. Mr. Hill said that was the responsibility of the Department of Administration but he noted authorization depended on how well use could be justified. He agreed such a provision would be appropriate.
Mr. Perkins inquired how many employees NDOT proposed exempting from the bill. Mr. Hill said he believed the number was 68. Mr. Perkins expressed concern that NDOT was one of the agencies identified in the audit report as having a high number of take-home vehicles. Mr. Hill pointed out NDOT was responsible for the entire state, with employees working out of 58 offices and maintenance stations. Mr. Perkins noted the audit report addressed approximately 200 employees who were authorized to use take-home vehicles. He said that was the number the bill intended to scale back. Mr. Hill said he would provide a list of employees with take-home vehicles.
Mrs. Williams asked if the proposed amendment would exempt those employees who were mandated to take vehicles home from mileage charges. Vice Chairman Spitler said he was also concerned with mandating employees to take vehicles home and then charging them for doing so.
Mr. John Drew, Department of Motor Vehicles and Public Safety, proposed amending AB 737 to exempt undercover officers using unmarked cars (see Exhibit D). He stated officer safety was the prime concern of administrators and that was why home storage of vehicles was authorized. Home storage was a means of concealing the true purpose of the undercover vehicles and thereby protecting the officers. Home storage also served to protect the vehicles and state property (radios, surveillance equipment, weapons, etc.) from vandalism and theft. He pointed out none of the DMV facilities currently included parking areas which could adequately protect the vehicles and the agency was not budgeted to provide secure parking areas. Additionally, investigators had a high rate of travel, both in-state and out-of-state and often traveled for extended periods of time during which the department would become liable for protecting personal vehicles left behind at DMV facilities while investigators were traveling.
Mr. Drew noted other similar agencies all allowed for home storage for protection of officers and vehicles. He stressed the DMV had always had policies in place prohibiting personal use of state vehicles and those policies were enforced when abuses occurred.
Ms. Tiffany commented the intent of this legislation was to curtail personal use of state vehicles. She said the focus of AB 737 was being lost in the testimony regarding why agencies should be exempted. She suggested the agencies tighten up their internal controls regarding personal use of state vehicles.
Mr. Drew agreed with Ms. Tiffany. He reiterated the DMV had stringent internal controls in place.
Ms. Tiffany said there was no doubt there were exceptions but the intent of the bill was to address the abuses and allow the state to be reimbursed.
Vice Chairman Spitler asked Mr. Perkins and Ms. Tiffany to review the proposed amendments and determine whether to incorporate the revisions into AB 737. Mr. Perkins and Ms. Tiffany agreed.
Mr. Perkins asked if DMV policies mandated that take-home vehicles be garaged. Mr. Drew replied that was not a requirement but investigators were responsible for the security and maintenance of the vehicles while they were in home storage. Mr. Perkins questioned why the vehicles would be more secure in an investigator's front yard than in a DMV facility. Mr. Drew replied most residential areas were safer than an office building without evening security.
Mr. Perkins inquired if the agency ran a 24-hour operation. Mr. Frank Adams, Deputy Chief, Nevada Division of Investigation, said the agency did not operate 24 hours per day.
Mr. Perkins asked how many non-undercover officers had take-home vehicles and if they were all available for emergency call-outs rather than having designated officers for call-outs. Mr. Drew said the only time officers were designated for call-outs was on weekends. He said 7 officers assigned to the general investigative unit had take-home vehicles so they could respond to homicide cases. All other officers were subject to call-outs.
Mr. Adams noted no vehicles were assigned to civilian employees. All vehicles were assigned to commissioned officers.
Mr. Price expressed concern for officers' safety and ensuring their identity was not detected by criminals. He asked how undercover officers could protect their identity when they parked their vehicles at the agency office. Mr. Adams replied chances were undercover vehicles would be identified but the agency wanted to minimize that possibility as much as possible.
Chief Richard Wyett, Department of Parole and Probation, said the department currently employed 250 police officers who drove 113 vehicles. In most cases, those were home storage vehicles. He testified Mr. Cooper's earlier statement regarding an officer using a state vehicle to commute to Truckee was inaccurate. He noted the department had a hard and fast rule prohibiting any officer from using a state-owned vehicle for personal use and that rule was enforced.
Chief Wyett stated the audit was conducted in the Reno office rather than the Carson City office. In addition, he was unaware of the audit until it was completed.
Chief Wyett said he was opposed to AB 737 for many reasons. He noted the department had no vehicle storage facilities.
Vice Chairman Spitler invited Chief Wyett to work with Mr. Perkins and Ms. Tiffany to incorporate his suggested amendments into the bill. Chief Wyett said he welcomed the opportunity to do so.
Mr. Norton Pickett, Administrator, Division of Mine Inspection, said he had concerns similar to those of earlier witnesses. He noted mine inspectors were on call 24 hours per day 7 days per week and they were required to travel extensively in performing their duties. He added the division was diligent in enforcing policies against personal use of state vehicles. He asked that the division be allowed to continue submitting justification for use of state vehicles to the Department of Administration.
Vice Chairman Spitler asked Mr. Pickett to submit any pertinent information to Mr. Perkins or Ms. Tiffany expeditiously.
Mr. Crews stated the audit information regarding a Parole and Probation employee commuting to Truckee had been verified.
Vice Chairman Spitler questioned whether Parole and Probation had accepted the audit finding. Mr. Crews responded there had been general discussion between the auditors and the agency. He pointed out there were legitimate reasons for exceptions to the legislation which could be addressed through administrative procedures.
ASSEMBLY BILL 748- Makes appropriation to Public Service Commission of Nevada to lead participation in pilot program for Alliance for Uniform HazMat Transportation Procedures.
Vice Chairman Spitler noted while he worked with the Public Service Commission professionally, AB 748 did not deal with communications; therefore, he would participate in this hearing.
Vice Chairman Spitler stated AB 748 had previously been heard in the Transportation Committee. He explained the legislation was originally drafted as an Assembly Concurrent Resolution at the request of Commissioner Rose McKinney-James. After the original draft, it was determined a fiscal note would be required, so the Transportation Committee amended the resolution and rereferred it to Ways and Means with a strong recommendation for support.
Mr. Michael Pitlock, Nevada Public Service Commission, offered Commissioner McKinney-James' apologies for being unable to attend the hearing. He explained the proposed pilot program was an outgrowth of the Hazardous Materials Transportation Uniform Safety Act, which provided for a working group of state and local officials from Nevada, California, Ohio and West Virginia to develop uniform regulations to be presented to the Secretary of Transportation. The pilot program would provide the field test for the proposed regulations. He said AB 748 set forth the benefits which Nevada would derive from participation in the pilot program, one of the most important of which was that Nevada would have a significant level of input into the final regulations and could ensure those regulations would be workable for Nevada.
Mr. Pitlock added it was essential to the health and safety of Nevada citizens for the Highway Patrol and Public Service Commission to participate in the pilot program.
Mr. Pitlock pointed out several minor amendments to the bill were required. He explained the Highway Fund appropriation would not be deposited to the Public Service Commission account but to the Highway Patrol account. Any unexpended funds would revert to the Highway Fund rather than to the General Fund. Finally, the Public Service Commission requested that either the Chairman of the Public Service Commission or his designee could make periodic status reports to the Legislative Commission.
Chairman Arberry asked Mr. Pitlock to provide the proposed amendments to the committee in writing. Mr. Pitlock agreed to do so.
Mr. Ron Hill, Deputy Director, Nevada Department of Transportation, said the department supported AB 748 and considered the pilot program an appropriate use of highway trust funds.
SENATE BILL 139 - Establishes program to mitigate environmentally detrimental effects of certain uses of land in Lake Tahoe Basin.
Mr. Fred Welden, Chief Deputy Research Director, Legislative Counsel Bureau, appeared on behalf of Senator Ray Shaffer, Clark County District 2. Mr. Welden explained he had served as staff representative on the Interim Oversight Committee on TRPA chaired by Senator Shaffer.
Mr. Welden stated SB 139 represented one of the most significant recommendations of the interim study.
Mr. David Ziegler, Director, Tahoe Regional Planning Agency (TRPA), expressed strong support for SB 139. He explained since 1987, the TRPA had been collecting land coverage mitigation fees on Nevada projects. There was currently over $800,000 in that account which must be used to retire land coverage; however, TRPA needed to enter into an agreement with another entity in order to expend the funds in order to adhere to public policy. The Nevada Division of State Lands was the appropriate entity. He noted the TRPA had entered into a similar arrangement with the California-Tahoe Conservancy on the California side of Lake Tahoe.
Chairman Arberry asked if there was any associated General Fund expense. Mr. Ziegler said there was no intent to impact the General Fund. In fact, the Senate had been emphatic that there be no General Fund expenditures. The bill was amended to clarify that intent.
Ms. Pam Wilcox, Administrator, Division of State Lands, described SB 139 as a win/win program. It would enable the division to assist Nevada property owners with mitigation excess coverage and to acquire properties from land owners in the Tahoe Basin who were unable to construct homes. There would be no cost to the state since the program would be funded entirely with mitigation fees collected by the TRPA. She said the division intended to continue this program as an extension of the Tahoe bond program to acquire sensitive lands and retire them from development, which had been operating since 1986. Approval of SB 139 would enable the division to hire a part-time land agent.
Ms. Wilcox said she envisioned no problems with the program. Historically, the Tahoe acquisition program had been successful and popular.
Ms. Wilcox requested an additional amendment to the bill to delete the word "all" from page 2, line 9. She explained the amendment would allow the division to retire land coverage required by the TRPA while maintaining the ability to acquire additional coverage at its discretion.
APPROVAL OF MINUTES
Chairman Arberry asked for a motion to approve the minutes of the committee hearings of February 8, 1993, February 9, 1993, February 10, 1993, February 15, 1993, February 16, 1993, February 17, 1993, February 18, 1993, February 19, 1993, March 1, 1993, March 2, 1993, March 4, 1993, March 5, 1993, March 8, 1993, March 9, 1993, March 15, 1993, March 16, 1993, March 18, 1993, and March 19, 1993.
MR. SPITLER MOVED TO APPROVE THE AFORESAID MINUTES OF THE COMMITTEE.
MRS. WILLIAMS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSINGS
K-12 EDUCATION SUBCOMMITTEE REPORT
Assemblyman Joe Dini, District 8, reported the recommendations of the K-12 subcommittee pertaining to the Distributive School Account, the Trust Fund for Class-size Reduction and the School Improvement Account.
Mr. Dini said the subcommittee had heard considerable testimony from teachers, school administrators, school trustees and Department of Education and Budget Division staff regarding the Governor's recommended budgets for the three accounts. He said, although funding was short for the coming biennium, the subcommittee recognized the importance of adequately funding public schools.
Mr. Dini went on to report the unanimous recommendations of the subcommittee.
Dini explained the Governor recommended reducing the Public Employees' Retirement System contribution for school district employees from 18.47 percent to 18.22 percent based upon an actuarial valuation. The subcommittee recommended that if the contribution rate was decreased, salaries should be increased by an amount equal to one-half the amount of the reduction in the contribution rate (the employee's share). The adjustment would amount to a .125 percent increase in salaries for a total cost of $939,200 in fiscal year 1993-94 and $993,305 in fiscal year 1994-95.
The Budget Division calculated rollups at 2 percent in fiscal year 1993-94 but allowed only 1.94 percent in fiscal year 1994-95 due to an error in which no increase was allowed in the second year of the biennium for new employees hired in fiscal year 1993-94. The subcommittee recommended budgeting rollup costs at a full 2 percent in each year of the biennium for a cost of $12,755 in fiscal year 1993-94 and $527,656 in fiscal year 1994-95.
Mr. Dini stated the subcommittee had heard testimony in opposition to the Governor's recommendation to consolidate 22 elementary school counselors hired in fiscal year 1991-92 into the Distributive School Account. Some school districts indicated they would no longer be able to afford the counselors if categorical funding separate from the basic support per pupil was not provided. The subcommittee recommended the 22 positions be transferred to the School Improvement budget account and funded at $1 million per year for savings in the Distributive School Account of $942,102 in fiscal year 1993-94 and $964,364 in fiscal year 1994-95.
Mr. Dini reported the Governor recommended a 2.5 percent statewide increase for heat in fiscal year 1993-94 but increases were only provided in selected counties for electricity (5 percent in three southern counties in fiscal year 1993-94) and water/sewer/garbage (10 percent per year in Washoe County only). The subcommittee recommended budgeting funding for utility rate increases uniformly across the state and distributing it among school districts according to the Nevada Plan formula. The total cost of the change would be $235,947 in fiscal year 1993-94 and $308,030 in fiscal year 1994-95.
The subcommittee recommended budgeting payments for group health insurance benefits for school district employees in the same manner as payments for state employees' health insurance. The average group health insurance payment per employee in fiscal year 1992-93 was $2,417, 3 percent greater than the amount budgeted for fiscal year 1993-94. If health insurance payments were budgeted to remain at the current level in fiscal year 1993-94 and a 6 percent increase was provided in fiscal year 1994-95, as state employees' health insurance payments were budgeted, an additional $1,432,515 would be needed in fiscal year 1993-94 and an additional $1,619,121 would be needed in fiscal year 1994-95.
The subcommittee recommended budgeting instructional supplies in the same manner as textbooks and library books. While increases in inflation and growth in enrollment were recommended by the Governor for textbooks and library books, instructional supplies were only budgeted to increase for enrollment growth. A 3 percent increase for inflation for instructional supplies would cost $351,848 in fiscal year 1993-94 and $754,862 in fiscal year 1994-95.
Mr. Dini said if the above recommendations were adopted, the total cost for basic support would increase $2,030,163 in fiscal year 1993-94 and $3,238,610 in fiscal year 1994-95. The net change in basic support per pupil would be $8.99 in fiscal year 1993-94 and $13.59 in fiscal year 1994-95.
The following additional recommendations would not affect basic support per pupil.
In order to improve the State Board of Education's ability to assist local school districts facing overcrowded units, high numbers of handicapped students or unique situations, the subcommittee recommended allocating an additional 10 special education discretionary units. This would bring the total number of units to be allocated at the Board's discretion to 35 for a cost of $262,080 in each year of the biennium.
Mr. Dini noted $.25 of the property tax was considered as a local revenue within the Nevada Plan. New estimates of the state's assessed valuation provided by the Department of Taxation showed an increase over amounts recommended by the Governor. The subcommittee recommended revising revenue estimates, for a savings of $973,831 in fiscal year 1993-94 and $1,036,679 in fiscal year 1994-95.
The net effect of the above changes would be an increase in the state's share of funding for education of $1,318,412 in fiscal year 1993-94 and $2,464,011 in fiscal year 1994-95. Those increases could be covered by adjusting revenue projections (General Fund appropriations and slot tax) $1,318,410 in fiscal year 1993-94 and $2,464,010 in fiscal year 1994-95.
The subcommittee made the following additional recommendations, which would not affect the costs of the state's educational program. Revenue and expenditures associated with the Medicaid reimbursement program should be tracked in a separate revenue account. Mr. Dini noted currently only Clark County School District planned to revise its accounting system. School districts should be required to report total compensation for teachers, including fringe benefits and extra pay. The Department of Education should be required to reconcile reports required pursuant to NRS 387 to the state's accounting system. Estimates of net proceeds of mines should be due on June 1 and school districts' budgets delayed until June 15 to enable the Department of Education to utilize the most up-to-date estimates in calculating each school district's basic support.
Mr. Dini noted, with the exception of the changes in revenue estimates listed above, the subcommittee used revenue estimates recommended by the Governor. He indicated the committee would have to determine whether to use revenue estimates provided by the Budget Division or those developed by the Fiscal Division.
Mr. Dini indicated the subcommittee heard testimony that rollup costs for the class-size reduction teachers were actually higher than the 2 percent increase recommended by the Governor since the teachers were newly hired and would be gaining an additional step (4 to 5 percent) on the salary schedule each year. The subcommittee recommended increasing rollups. In addition, fringe benefit rates should be budgeted at a higher rate than in the Distributive School Account since each of those teachers was eligible for retirement benefits and the full rate for Medicare contributions. Total costs would be $1,640,000 in fiscal year 1993-94 and $1,270,000 in fiscal year 1994-95. Higher rollup costs (3.5 percent per year) and higher fringe benefit rates would increase program costs over the amounts recommended by the Governor. New estate tax estimates from the Budget Division indicate, however, that at least $1.5 million more will be available to balance forward to fiscal year 1993-94 than projected in the Executive Budget. Also, based on a 45-month analysis of estate tax receipts, revenue from this source was projected at a higher level than originally recommended by the Governor.
Finally, while the subcommittee recognized that the class-size reduction teachers would eventually be consolidated into the Distributive School Account, it did not recommend that action at this time because appropriate safeguards, reporting methods and penalties to ensure compliance with required pupil-teacher ratios still had to be developed.
MR. MARVEL MOVED THAT THE DISTRIBUTIVE SCHOOL ACCOUNT, THE TRUST FUND FOR CLASS-SIZE REDUCTION AND THE SCHOOL IMPROVEMENT ACCOUNT BE CLOSED PURSUANT TO THE RECOMMENDATIONS OF THE K-12 SUBCOMMITTEE.
MRS. EVANS SECONDED THE MOTION.
Ms. Giunchigliani noted, for the record, that she was a public special education teacher on an unpaid leave of absence. She would not benefit by committee action on these budgets, therefore, she would be participating in discussion and voting.
Ms. Giunchigliani inquired whether 10 special education units would be added each year or only in the first year. Ms. Jeanne Botts, Program Analyst, responded 10 discretionary units would be added in the first year and would remain in the budget through the second year.
Ms. Giunchigliani asked what the change in per pupil funding would be. Ms. Botts said per pupil funding would increase to $33.21 in the first year of the biennium and $33.25 in the second year.
Ms. Giunchigliani asked what percentage of enrollment growth was projected. Ms. Botts said fiscal staff did not change the Governor's growth projections. Ms. Giunchigliani questioned whether new incoming students were incorporated in those projections. Ms. Botts said they were.
Ms. Giunchigliani inquired where in the budget the $18 million to repay school districts was located. Ms. Botts responded in the current year basic support per pupil was $3,312. SB 329 reduced basic support to $3,231, which amounted to the $18 million difference. The Governor recommended increasing basic support back to $3,312 in the coming biennium to restore the $18 million. Ms. Giunchigliani pointed out the districts still had an $18 million shortfall in the current year and asked how that amount would be restored. Ms. Botts said the subcommittee had made no recommendation to make up that shortfall. Ms. Giunchigliani stated the districts were losing the $18 million plus per pupil growth over the two years. She pointed out education was also receiving a smaller percentage of General Fund appropriations than it had in the past. She said while she appreciated the efforts of the subcommittee, she could not support its recommendations.
THE MOTION PASSED. MS. GIUNCHIGLIANI WAS OPPOSED.
BUDGETS CLOSED.
LEGISLATIVE COUNSEL BUREAU - PAGE 111
Mr. Stevens noted the Legislative Counsel Bureau budget had been reviewed by a subcommittee. He reported the original budget had been revised in order to comply with a Legislative Commission subcommittee recommendation to retain a flat budget for the coming biennium.
Mr. Stevens explained adjustments in the budget would restore funding for video teleconferencing and the revenue projection model costs. The Executive Budget did not include funding to continue the teleconferencing efforts or the revenue forecasting model initiated during the past interim period.
Mr. Stevens said the revised budget also requested a new position in the Legal Division, due to the workload of administrative regulations, and restoration of intermittent employee salary money for secretaries to work on interim projects in the Research Division on a contract basis. The Legal Division position would be funded partially from the General Fund and partially by a charge back to the agencies which initiated the regulations.
Mr. Stevens advised other subcommittee recommendations included funding for American Legislative Exchange Council dues and registration fees, travel and training costs, and maintenance and equipment.
Mr. Stevens reported the budget needed to be increased approximately $21,000 in the second year of the biennium to cover the recommended increase in group insurance contained within the Executive Budget.
Chairman Arberry explained this was the most conservative budget the subcommittee could develop for the Legislative Counsel Bureau to allow it to function. He noted the items which had been added back to the budget were viewed as necessities, especially the teleconferencing system.
Mrs. Evans commended the subcommittee members for their work. She said their budget requests appeared to be exceedingly modest. She expressed concern about inadequate funding for training for Legal Division staff. She also suggested an additional secretary be added to the interim clerical staff to assist the Chief Clerk of the Assembly and the Secretary of the Senate in light of their ever increasing workload.
Mr. Marvel noted it had not been many years since the one current position had been approved.
Mr. Humke asked if the new position in the Legal Division would be an attorney. Mr. Stevens said it would be an attorney position.
Mr. Humke requested clarification about the charge to agencies to fund the position. He asked if only non-General Fund agencies would be charged. Mr. Stevens responded affirmatively.
Mr. Humke asked how the amount of $6.00 per hour had been determined. Mr. Stevens said the amount was calculated by the Legal Division. Chairman Arberry noted it was also the subcommittee's recommendation.
Mrs. Evans inquired what the cost of adding a secretarial position would be. Mr. Stevens estimated the cost at $20,000. Mrs. Evans reiterated her concern about adequate staff for the Chief Clerk of the Assembly and the Secretary of the Senate during the interim. She pointed out the Legislature had responded to needs for growth in the other branches of government and it was time to take care of its own house.
Mr. Dini said he believed funding for the additional secretary could wait until the next biennium. Chairman Arberry said although he would like to be able to add the position to the budget, he concurred with Mr. Dini.
MR. MARVEL MOVED TO CLOSE THE LEGISLATIVE COUNSEL BUREAU BUDGET PURSUANT TO THE RECOMMENDATIONS OF THE SUBCOMMITTEE.
MR. HELLER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
* * * * *
MRS. EVANS MOVED TO AMEND THE LEGISLATIVE COUNSEL BUREAU BUDGET TO ADD A SECRETARIAL POSITION.
MR. PRICE SECONDED THE MOTION.
THE MOTION FAILED. MR. DINI, MR. HELLER, MR. HUMKE, MR. MARVEL, MR. PERKINS, MR. PRICE, MR. SPITLER, MS. TIFFANY, MRS. WILLIAMS AND CHAIRMAN ARBERRY WERE OPPOSED.
INSURANCE FRAUD - PAGE 347
Mr. Stevens noted this budget contained an enhancement item (approximately $252,000 in the first year and approximately $246,000 in the second year) to fund a worker's compensation fraud unit which would probably be located in the Attorney General's Office. He suggested the committee might want to remove the enhancement from this budget and add it to whatever budget would be appropriate, depending on the passage of SB 316 regarding the State Industrial Insurance Commission.
MR. MARVEL MOVED TO REMOVE THE FRAUD UNIT ENHANCEMENT ITEM FROM THE INSURANCE FRAUD BUDGET AND CLOSE THE BUDGET AS AMENDED.
MR. DINI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
SELF-INSURED - WORKER'S COMPENSATION - PAGE 355
Mr. Stevens noted the committee had discussed the Governor's recommendation to place the value of the professional position in reorganizational savings. The committee had indicated a desire to reinstitute the position. If that action was taken, reorganizational savings of $42,254 in the first year of the biennium and $56,678 in the second year would have to be shifted to personnel expenses.
Ms. Botts explained the Governor recommended eliminating the professional position in this budget and leaving a clerical and a technical position. The function of this unit was to audit and certify self-insured employers for worker's compensation. She noted the number of self-insured employers had grown significantly over the past biennium. The professional position was filled by a certified public accountant.
Ms. Matteucci said the reason the position was eliminated from the budget was the Governor's original reorganization proposal was to combine the Department of Industrial Relations with Insurance. If that consolidation was not going to occur, the position should be reinstated.
MR. MARVEL MOVED TO RESTORE THE PROFESSIONAL POSITION TO THE SELF-INSURED - WORKER'S COMPENSATION BUDGET.
MR. HUMKE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
MR. MARVEL MOVED TO CLOSE THE SELF-INSURED - WORKER'S COMPENSATION BUDGET AS AMENDED.
MR. DINI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
CONSUMER AFFAIRS - PAGE 428
Mr. Stevens stated this budget was related to the Consumer Affairs - Telemarketing budget. He noted the Governor had recommended the Director of Commerce be moved to this account, but the committee reinstituted that position half-time in the Director of Business and Industry account and half-time in the Housing Division account. He recommended eliminating the position in this account.
Mr. Stevens pointed out reorganizational savings was being eliminated in other budget accounts and moved to vacancy savings. That would have to be done in this account as well.
Mr. Stevens said a purchasing assessment included in this account would have to be eliminated in accordance with the closure of the Purchasing budget.
Mr. Stevens explained the other revenue category was funded by transfers from deceptive trade fees and from the Telemarketing budget. The agency transfer category was comprised of transfers from the Manufactured Housing budget, the Housing Division budget and the Telemarketing budget. He said fiscal staff recommended transferring all money in excess of $250,000 from the Telemarketing budget to the General Fund. He suggested the Telemarketing money be included in other revenue and eliminated from agency transfers, which would increase total General Fund revenue by $8,261 in the first year of the biennium and $9,561 in the second year. The agency transfer amount would be reduced by $18,401 in the first year and $17,101 in the second year.
MRS. EVANS MOVED TO AMEND THE CONSUMER AFFAIRS BUDGET TO ADOPT FISCAL STAFF RECOMMENDATIONS AND CLOSE THE BUDGET AS AMENDED.
MR. MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
CONSUMER AFFAIRS - RESTITUTION - PAGE 432
Mr. Stevens indicated fiscal staff had no recommendations on this budget.
MR. DINI MOVED TO CLOSE THE CONSUMER AFFAIRS - RESTITUTION BUDGET AS RECOMMENDED BY THE GOVERNOR.
MR. PERKINS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
CONSUMER AFFAIRS - TELEMARKETING - PAGE 433
Mr. Stevens noted both this committee and the Senate Finance Committee had formed subcommittees to review this account and there had been much discussion with both Consumer Affairs and the Attorney General. The subcommittee based its recommendations on revenue estimates provided by Consumer Affairs.
Mr. Stevens reported the subcommittee recommendations. Seven positions would be retained within the Telemarketing budget. The remaining positions would be phased out by October 1, 1993. All except one of the compliance investigator/auditor positions would be transferred to the Attorney General's Office. The Attorney General's Office would be enhanced by an additional seven positions to be phased in by October 1, 1993, and associated equipment, operating and data processing costs. In addition, $45,000 was added in each year for litigation costs.
Mr. Stevens added SB 375 contained a component for consumer education ($60,000), which would be included in the Attorney General's budget.
Other expenses in the Telemarketing budget included the transfer to the Consumer Affairs budget discussed earlier, the General Fund cost allocation and a transfer to the Department of Business and Industry Administrative account. Total revenue and expenses for both the Telemarketing account and the Attorney General account plus $250,000 for reserve would leave a General Fund reversion for the biennium of $780,669.
Mr. Stevens added that this proposal included the Governor's recommendation that monies in excess of $250,000 would revert to the General Fund and the $250,000 reserve could be drawn down if there was a shortfall in revenues. He noted the subcommittee recommendation added two new positions overall.
Mrs. Williams commented she was struggling with the idea of moving the fraud unit from Consumer Affairs to the Attorney General's Office. She said she sincerely believed this should be a function of Consumer Affairs.
Mrs. Evans said some of the subcommittee members also wrestled with that issue but after discussion with the Senate, this seemed to be the best solution. There was some concern that more emphasis needed to be placed on prosecution of fraud. She pointed out the Consumer Affairs Division would still be actively involved in telemarketing but the Attorney General would play a larger role in enforcement.
Mrs. Williams stated this was a high-profile function and the establishment of the Consumer Affairs Division had a positive impact in southern Nevada. She also expressed concern about establishing specific separate fraud units within the office of the Attorney General. She suggested an empire was being created which could get out of control. She said she did not understand why it was necessary to establish a separate unit for every type of fraud.
Chairman Arberry said the subcommittee had been formed to address similar concerns on the part of the other committee members. He noted most states were functioning with programs like that recommended by the subcommittee. However, if it appeared the unit was getting out of control and power was being abused, it would be the responsibility of this committee to strip some of the power away.
Mrs. Williams said, as a practical matter, her constituents would not call the Attorney General regarding telemarketing problems. They would continue to call the Consumer Affairs Division. Therefore, there would still be an impact on Consumer Affairs. Chairman Arberry said hopefully constituents would continue to call Consumer Affairs and not direct all calls to the Attorney General.
Mr. Spitler said he shared Mrs. Williams' concerns but he would respect the opinion of the subcommittee. He added this was something the committee would have to monitor closely.
Mrs. Williams requested periodic reports from the Attorney General's Office to determine how many complaints were being processed in order to justify staffing levels and computer usage. Chairman Arberry said the committee could ask the Attorney General to report to the Interim Finance Committee twice a year.
Mr. Marvel recommended having the Attorney General report on fraud units at every Interim Finance Committee meeting.
Chairman Arberry asked if the committee would be satisfied with quarterly reports. The committee concurred. Chairman Arberry indicated a letter of intent would be sent to the Attorney General.
Mr. Humke stated it had been a difficult choice between satisfying the Attorney General's need for specialization of prosecution and maintaining the Consumer Affairs function. He said there was no question the Consumer Affairs Division had done as much as possible, short of additional help in prosecution.
Mr. Humke indicated while he supported the subcommittee recommendation, there was a problem on the horizon in that budgeting for a General Fund reversion was not keeping faith with the telemarketing industry. He suggested if too much money was reverted to the General Fund, industry representatives would possibly institute suit against the state and would likely prevail. He stated fees paid by the industry were actually a tax and the committee needed to monitor those revenues carefully. The industry had also argued that the revenue should be used to regulate telemarketing.
Mrs. Evans suggested the Consumer Affairs Division also make quarterly reports to the Interim Finance Committee.
MR. MARVEL MOVED TO CLOSE THE CONSUMER AFFAIRS - TELEMARKETING BUDGET PURSUANT TO THE RECOMMENDATIONS OF THE SUBCOMMITTEE AND ISSUE LETTERS OF INTENT TO THE ATTORNEY GENERAL AND THE CONSUMER AFFAIRS DIVISION.
MR. PERKINS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
YOUTH COMMUNITY SERVICES - PAGE 945
Mr. Stevens indicated this budget had been closed in subcommittee but required a technical adjustment. He requested the budget be reopened.
Mr. Stevens noted some federal funding had been included in the Care of the Handicapped budget but there were no state funds to match those dollars. As a result, a smaller portion of the federal funding was placed in a reserve category and approximately $425,000 per year was sent to the school districts. He explained a corresponding change was not made in this budget.
MR. SPITLER MOVED TO REOPEN THE YOUTH COMMUNITY SERVICES BUDGET.
MR. DINI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. MR. HUMKE WAS ABSENT.
BUDGET REOPENED.
* * * * *
MR. SPITLER MOVED TO AMEND THE YOUTH COMMUNITY SERVICES BUDGET PURSUANT TO THE RECOMMENDATIONS OF FISCAL STAFF.
MR. DINI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. MR. HUMKE WAS ABSENT.
BUDGET CLOSED.
HOSPITAL TAX ACCOUNT
Mr. Stevens said this account was not included in the Executive Budget and the accompanying legislation (SB 494) had not yet been passed out of committee. If the committee believed this legislation would be approved, however, it should act to establish this budget to account for hospital tax revenue and distribution to the various expense line items.
MRS. EVANS MOVED TO ESTABLISH A HOSPITAL TAX ACCOUNT IN THE BUDGET.
MRS. WILLIAMS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
SUBCOMMITTEE ASSIGNMENTS
Chairman Arberry appointed himself, Mr. Dini and Mr. Marvel to sit on subcommittees to review AB 409 and AB 560.
ASSEMBLY BILL 488- Provides for expedited release from prison of terminally ill or physically incapacitated prisoners.
Mr. Stevens stated the Prison budget had been passed on the basis of AB 488 being approved. AB 488 was currently on the Chief Clerk's desk, however. He asked the committee to make a determination whether some action would be taken on the bill. If the bill was not processed, approximately $800,000 to $900,000 would have to be added to the Prison Medical budget for the biennium.
Mr. Spitler said he understood the Prison budget had been closed with the understanding that the additional funding might be required. Mr. Ghiggeri explained this was a mechanical problem which needed to be resolved. If the Appropriations Act was drafted without AB 488 being approved, the Prison budget would be short. Mr. Stevens added the Budget Director needed accurate closing sheets to input data to the draft of the Appropriations Act.
Mr. Marvel asked if it would be appropriate to bring the bill back to committee and amend it. Chairman Arberry said he would prefer amending the bill on the Assembly floor because time was getting short.
Mr. Price commented that in the future it would be prudent not to tie the Executive Budget to legislation which might or might not be passed.
EMPLOYMENT SECURITY DEPARTMENT - PAGE 1074
Mr. Stevens said the budget closing sheets which had been distributed to the committee contained an error in the transfer to the Department of Taxation for payment of tax audit teams. The closing sheets reflected the amounts included in the Governor's revised plan (Option #1). The committee actually approved Option #3, which dramatically changed the amount transferred to the Department of Taxation.
Mr. Stevens said he had prepared revised closing sheets if any of the committee members wanted to review them.
NATIONAL GUARD BENEFITS - PAGE 1727
Mr. Stevens asked for clarification on how much money the committee had decided to add to the National Guard Benefits account. He noted in order to retain benefits at the current level, $53,700 would be needed in each year of the biennium. His recollection was that the committee had approved $45,000 in each year. Chairman Arberry said the committee would stand by its original decision.
Chairman Arberry requested a committee introduction of a bill to sunset the Nevada Equal Rights Commission in July 1995.
MRS. CHOWNING MOVED FOR COMMITTEE INTRODUCTION.
MR. MARVEL SECONDED THE MOTION.
THE MOTION CARRIED. MR. PRICE WAS OPPOSED.
There being no further business, the meeting was adjourned at 10:52 a.m.
RESPECTFULLY SUBMITTED:
_________________________
C. Dale Gray
Committee Secretary
??
Assembly Committee on Ways and Means
June 14, 1993
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