MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
February 3, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 7:46 a.m., on Wednesday, February 3, 1993, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Bob Coffin
Senator Diana M. Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
STAFF MEMBERS PRESENT:
Daniel G. Miles, Fiscal Analyst
Robert Guernsey, Principal Deputy Fiscal Analyst
Joan McConnell, Committee Secretary
OTHERS PRESENT:
Donald Jayne, General Manager, State Industrial Insurance System (SIIS)
Mathew C. Dorangricchia, Assistant General Manager, State Industrial Insurance System (SIIS)
Stephen Shaw, Administrator, Rehabilitation Division, Department of Human Resources
John R. Orr, Deputy Administrator, Rehabilitation Division, Department of Human Resources
Becky S. Abba, Budget Analyst, State Industrial Insurance System
John W. Hines, Jr., Assistant Administrator, Jean Hanna Clark Rehabilitation Center
Ellen Townsend, Principal Budget Analyst, Budget Division
Judy Matteucci, Director, Department of Administration
Carol Jackson, Director, Department of Industrial Relations (DIR)
Jim Jeppson, Acting Administrator, Industrial Insurance Regulation Division, Department of Industrial Relations
Ron Swirczek, Administrator, Administrative Services, Department of Industrial Relations
Donna Lewis, Administrator, Division for Enforcement of Industrial Safety and Health, Department of Industrial Relations
Holly Jensen, Administrator, Division of Preventative Safety, Department of Industrial Relations, Las Vegas
Norton Pickett, Administrator, Division of Mine Inspection
John Slansky, Chief, Department of Parole and Probation
Janet Johnson, Principal Budget Analyst, Budget Division, Department of Administration
Bryn Armstrong, Chairman, State Board of Parole Commissioners
Senator Raggio requested committee introduction of Bill Draft Request (BDR) S-306.
BILL DRAFT REQUEST S-306: Requires submission of proposal to issue general obligation bonds to provide grants to local governments and department of transportation for projects for controlling erosion and restoring natural watercourses in Lake Tahoe Basin.
SENATOR COFFIN MOVED TO INTRODUCE BDR S-306.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Raggio resumed the hearing from yesterday on Executive Budget page 1652.
State Industrial Insurance System - Page 1652
Donald Jayne, General Manager, State Industrial Insurance System, (SIIS), stated Mr. Dorangricchia was successful in meeting yesterday with some of the individuals, and discussing some of the concerns regarding the reorganization numbers, and deferred to him for an update.
Mathew C. Dorangricchia, Assistant General Manager, State Industrial Insurance System (SIIS), remarked he had met with Mr. Orr, and very briefly with Mr. Shaw, at the Bureau of Vocational Rehab [Rehabilitation] yesterday afternoon, and they are in agreement on some of the numbers. There are about 3,460 people, who are active cases, currently receiving rehabilitation from SIIS. The flow for Fiscal Year 1992 was about 4,000 new cases entered into rehab. This number is the basic entry flow to expect.
Stephen Shaw, Administrator, Rehabilitation Division, Department of Human Resources, stated he was not present yesterday, and since Mr. Orr was present, he suggested he talk about the numbers, and he would comment when Mr. Orr is finished.
John R. Orr, Deputy Administrator, Rehabilitation Division, Department of Human Resources, remarked:
Yesterday, in the hearing, Mr. Dorangricchia mentioned there were 7,700 injured workers in the rehabilitation program. That did not jive with the proposal that we had built, which was built upon approximately 3,600. After we met yesterday, the numbers are firmed up with what Mr. Dorangricchia just said, approximately 3,451 current, active claimants in SIIS workers' comp rehabilitation, and we had built our proposal on 3,600.
Senator Raggio mentioned, "Now we're talking about, obviously, vocational rehabilitation." Mr. Orr agreed. Senator Raggio continued, "Was the 7,700 just a misstatement, or what was that?"
Mr. Jayne replied, "No, sir. Seventy-seven hundred people received some type of rehabilitation services during Fiscal Year '92. Some came in, some came out. It was the entire flow."
Senator Raggio asked, "Are we in agreement that there were probably 7,700 persons over that period?" Mr. Jayne agreed. "But, there are, at any one time, something like 3,450 active claimants?"
Mr. Jayne replied:
Correct, as of January 1993...Essentially, you can expect a flow of approximately 4,000 new individuals to come through, based on the laws today. Those 4,000 that come through would become added or subtracted as additional rehab cases are closed, that they are handling at this point in time.
Senator Raggio wanted to know whether or not the contemplated reorganization, and the subsequent staffing, would be adequate to deal with the caseload as defined and return the injured worker to the work place.
Mr. Shaw said he would like to address the entire issue of the Rehabilitation Division assuming vocational rehabilitation for the injured worker:
Number one, as it currently exists right now, we have two rehabilitation systems. We have the injured worker system, and we have vocational rehabilitation operated by my division....For seven decades we've been in existence, providing vocational rehabilitation. In 1973, or thereabouts, the workmen's comp [compensation] program created their own rehabilitation department.
We are rehabilitation in the rural areas. There is no SIIS rehabilitation delivery system in the rural areas. I believe Mr. Orr commented yesterday that we recently entered into a cooperative agreement, whereby we provide the rehabilitation, and we are reimbursed for that.
Let me tell you how that came about. We were finding that the State Industrial Insurance System was contracting cases out to private rehabilitation workers. They would, in return, refer them to my division in the rural areas. We were doing the work. Who do you think got paid for that? Private rehabilitation was getting paid for that. We approached SIIS, pursuant to some requirements of S.B. 7 of the last session [Senate Bill 7 of the Sixty-sixth Session], and this isn't right.
SENATE BILL 7
OF THE SIXTY-SIXTH SESSION: Makes various changes relating to industrial insurance and other rights of employees.
Let us do it. Cut out the middle man. Save employer premiums....There's just an overlapping, duplicated system....Another issue that came out of S.B. 7 [of the Sixty-sixth Session] that we're dealing with right now is buy outs. S.B. 7 [of the Sixty-sixth Session] allowed SIIS to buy out injured workers. Who's door do you think they come to once they're bought out? We're dealing with more and more injured workers that have been bought out. I'm saying, if we're going to deal with them, let us deal with them up front....When they buy them out, the liability to the employer and...premium ends, but the liability to the taxpayer is still there, and that's where I get my money....
We have an agreement with the federal government that if somebody is obtaining Social Security, and we put them back to work, they maintain that employment for a period of 9 months, they make a sustained gainful activity, we're reimbursed 100 percent of costs, plus administrative costs. SIIS cannot do that. It's not legal. Private rehabilitation cannot do that. I'm the only division, by law, in this state that can do that.
Senator Raggio asked, "On that last point, the program you referred to is the Social Security Disability Program?" Mr. Shaw agreed.
Senator Raggio continued:
I don't know the experience of other members of the legislature, but I know that in my own situation, I've had at least four or five individuals, who have called for assistance, because of the extraordinary delay in qualifying for that program....I need to ask you, because if that's indicative of what's going to occur in these rehabilitation programs, I have some personal concerns. It seems to me these folks desperately need rehabilitation in a timely fashion, and I haven't found that to be the case.
Mr. Shaw stated:
You're absolutely correct. And, I operate the bureau of disability that adjudicates those claims, that says whether yes they get them, or no they don't. That's 100 percent federally funded, federally regulated, federally mandated, audited every other case. We have absolutely no choice in what we do. Every other case is audited.
Senator Raggio asked, "Why does it take months and months for people to get into that situation, where they are adjudicated as eligible?"
Mr. Shaw replied, "It's a federal budget issue. We are budgeted for x-amount of cases. If we get 2,000 more than that, we are not budgeted for that." The people apply at the federal office in Reno or Las Vegas, then the state is responsible to make the hard decision.
Senator Raggio inquired as to how many people are presently waiting to be adjudicated as eligible in the federal program, and if they are eligible for some other rehabilitation while they are waiting.
Mr. Dorangricchia replied he was not aware, or familiar, with the Social Security program under discussion, but if an individual is qualified for Workers' Compensation, they are getting Workers' Compensation rehabilitation.
Senator Raggio stated he wants to get a response, whether it is from Rehabilitation Division, or from the federal government.
Mr. Shaw replied, "I'll tell you right now. The Governor's office tells me that's the one program they get the most complaints of any in the state."
Senator Raggio asked, "...You do have the capacity, capability to handle this type of caseload under the proposed reorganization, and with the staffing that is contemplated?"
Mr. Shaw answered:
Yes. We have the capability. The capacity is an issue of resources. If we get the resources that we propose...We built the budget on 3,587 cases, and that's approximately correct. I believe, yes, we can do the job.
Senator Coffin commented he wanted to make sure the revamping of SIIS and related agencies is incorporated in this budget, and in the agencies' thinking.
I can see an increased work load, maybe a blip, maybe a year to go, or two, of increased, intensive effort to get some of these people back to work, pain-free or not. At least I hope that's what should be done. And, I'm curious, is that going to happen? Do you know?
Mr. Shaw replied, "Senator Coffin, we've been studying this issue for about 3 months, and I wouldn't be here before you...it's in my budget, we proposed it, and we can do it, and we will do it, if that is the legislature's desire."
Senator Coffin asked if there is a possibility the caseload may jump from 3,600 to 4,000 or 4,500 for a period of time in the new SIIS plan.
Mr. Shaw stated it was entirely possible the caseload could increase.
Mr. Jayne stated, "Certainly, the quality of the work performed by Mr. Shaw and Mr. Orr is not really a subject of debate to us. I hear good things about the work they do...." He said the rehabili-tation benefit is the single fastest growing area and needs to be addressed and controlled. If the control is developed, and the access reduced, the caseload involved comes down to a manageable level wherever it ends up. S.B. 7 [of the Sixty-sixth Session] mandated no more than 35 cases per counselor, which would necessitate 100 counselors to handle the caseload, based on approximately 3,700 cases.
Senator Rawson stated he would like to tie down some of the performance indicators. He wanted to reconcile the number of patients receiving rehabilitation assistance and the number of appointments for injured patients.
Mr. Jayne stated the number of patients at Jean Hanna Clark Rehabilitation Center do not relate directly to the total number of injured patients.
Becky S. Abba, Budget Analyst, State Industrial Insurance System, remarked:
I would like to clarify yesterday's confusion...in the reporting of the work performance standards for the Jean Hanna Clark Rehabilitation Center. We had submitted figures that were based on a daily average. What you are looking at is a calculated monthly average. It's a daily average calculated after the month. The confusion began last session, when we submitted a monthly average. And, the preference to the Jean Hanna Clark Rehabilitation Center is to view these on a daily average. Because of the way it was submitted last year, it was just calculated up on a monthly average. So, we were looking at different figures, but they are the right figures. It's just a monthly average versus a daily average.
Senator Rawson stated, "If we look at '92 actual, you're saying that within a month there are 40,000 patients receiving care."
Ms. Abba agreed.
John W. Hines, Jr., Assistant Administrator, Jean Hanna Clark Rehabilitation Center commented the center sees an average of 150 patients per day. Each patient has, on the average, three appointments, which translates into 450 appointments.
Senator Glomb asked, "If the plan is that you're going to be taking over the rehab component, are you also going to be involved in the rehab center? Why would SIIS continue as a rehab center, if you're going to be doing rehab?"
Mr. Shaw replied:
It is my understanding that Jean Hanna Clark [Rehabilitation] Center is used for physical restoration, not vocational rehabilitation. The budget we built was not based on dealing with Jean Hanna Clark [Rehabilitation] Center. Again, that's physical restoration, physical therapy, occupational therapy, medical intervention. A certain amount of them that go through this program, once they are stabile and rateable, they are then referred to vocational rehabilitation.
What I'm talking about is vocational rehabilitation only. What Mr. Jayne questioned was a rehabilitation maintenance payment. We don't intend on getting into the insurance business...In answer to your question, no, our proposal does not contemplate assuming the Jean Hanna Clark [Rehabilitation] Center.
Senator Raggio asked, "...Would there be a patient at Jean Hanna Clark [Rehabilitation] Center undergoing physical rehabilitation, who might, during that stay, be appropriate to start voc [vocational] rehab as well?"
Mr. Shaw stated, "...Right now, it's a physician-driven system. When the physician rates somebody as stable and rateable, they are then, if appropriate, referred to vocational rehabilitation...."
Mr. Orr wanted to comment on an issue Senator Coffin raised, dealing with the capacity issue.
If we were creating a discrete system, discrete from the existing rehabilitation delivery system, no, we would not, you would have to front-end load the capacity in order to handle that first-year surge in business. The reality is we are not suggesting a discrete system. We are suggesting building upon the existing rehabilitation division, which is 226 people that are primarily dedicated to returning people with disabilities to the work force.
So, yes, in that first year we can handle the surge of business....Answering the question, does the Governor's proposed budget create the capacity to handle what we now know to be the work load, and the answer to that is yes.
Senator Raggio referred to Attachment B of the Value of Reorganizational Savings (Exhibit C).
Ellen Townsend, Principal Budget Analyst, Budget Division, stated, with reference to Exhibit C, there were two types of operating costs attributable to the assumption by vocational rehabilitation. Column A is the actual operating expenses, which have been built into vocational rehabilitation's budget, representing the direct cost of the 79 positions to be eliminated at SIIS and added to vocational rehabilitation, $794,995 the first year, and $686,999 the second year. Column B represents the net difference between the 129 positions previously in the SIIS budget, less the 79 positions created in the vocational rehabilitation budget, the net difference being 50 positions. She added, "There are 50 positions that, prior to putting this together, did not have any operating costs tied to those 50 positions."
Senator Raggio asked, "Does that money remain in the SIIS budget?"
Ms. Townsend replied, "No, that money does not remain in the SIIS budget."
Senator Raggio inquired, "Based on the transfer of 79 positions, out of an existing 129 positions, with a net reduction of 50 positions to SIIS, there is a reorganization savings of $544,795 the first year, and $686,999 the second year?"
Ms. Townsend acknowledged Senator Raggio was correct.
Senator Raggio encouraged additional discussion on IC-85 State Industrial Insurance System (Exhibit D).
Ms. Abba read from written testimony, the assumptions on which SIIS based their budget request, State Industrial Insurance System, 1994-1995 Biennial Budget (Exhibit E), which refers to Exhibit D.
Senator Raggio said he had a technical question on how the budget office of the Department of Administration had displayed the SIIS budget in the new form. "You're saying you requested no enhancement under the definition as we know it: yet the budget on page 1654, under Enhancement, is indicating an Agency Request of $3.2 million."
Judy Matteucci, Director, Department of Administration, stated SIIS chose not to use 91-92 because they felt it was understated and wanted to use 92-93 as their base. She added:
...You have to use 91-92 adjusted for any of the new programs, which we have attempted to do, i.e. the 48 positions approved by interim finance are indeed in there. If there were any additional operating expenses relative to those positions that we could specifically identify, that is in the adjusted base. Everything over that, we put down in enhancements.
Senator Raggio addressed Ms. Abba, "So, that's just the difference in what you're terming as the adjusted base here."
Ms. Abba stated:
That's exactly right. The issues that we did address in our request were to maintain the program costs with the existing staff, to continue the needed upgrades to the automated system, and of course the Americans with Disabilities Act [ADA] costs that we anticipate.
In the maintenance portion, they're looking at...the Governor has recommended $5,309 for operating expenditures, and they increased the $7,306 for utilities. As far as I can analyze, to the Governor's recommendation, a part of that $5,309 increase in the maintenance budget would be what they had anticipated our increase...their maintenance increase for us for some operating expenditures.
...Our request really falls in the enhancement area, even though we don't consider it an enhancement. We consider it a continuing maintenance. What we requested are some increases in the different categories, starting with...operating, because that's where the largest is.
In our operating budget, again, as we are addressing the issue of the continuing needed upgrades of the automated system, we did ask for an increase in our contractual services of $1 million for computer programming costs. These would be contracted programmers. We didn't feel that we needed the positions full-time. We needed some contracting program to come in and upgrade some of the systems that we have, and then they would be let loose after that is completed.
Additionally, in the operating line items to include with the $1 million....
It shows up in Enhancements....About $100,000 is the anticipated increases in the current contracts that we have right now. Our actuarials, our contract with our financial auditors, some legal contracts, we anticipate legal contracts increasing, due to the course of the fraud.
Senator Raggio asked:
What impact is there upon your program, or your operating capability, if that amount has not been recommended, and I assume the reorganization doesn't have anything to do with that....Does the Governor's recommendation allow sufficient for your contracts that you're mentioning?"
Ms. Abba replied:
The Governor's recommendation took our contract expense back to FY 92 actuals, and, yes, it would affect us. Number one, we wouldn't be able to continue the upgrading of our programs that we feel are vital to the agency, and the success of the agency. Number two, we do have some current contracts, as an example, with our actuarial services and our outside auditing services. In those contracts it is stated an increase, and that's what the request is based on.
Senator Raggio asked what the actuarial services are used for.
Ms. Abba responded, "That's our private actuarial firm that we use."
Mr. Jayne remarked, "That's the Tillinghast firm we talked of yesterday."
Senator Raggio inquired, "What's the budget office position on those items? Did you not feel they were necessary?"
Ms. Townsend replied, "With the information that was provided, all existing contracts that are in place right now have been adjusted and are in the base budget. If it was anticipated increases based on whatever, those are not included in the base."
Senator Raggio stated, "You're saying the base budget, and your contemplation accommodates those existing contracts?"
Ms. Townsend replied, "Yes."
Senator Raggio referred to Executive Budget page 1652, and stated, "Staff is pointing out the actual [Operating Expense] is $4.9 [million] in FY 92, and under the recommendation, it's lower in each year of the biennium."
Ms. Matteucci said, "Remember how many positions we took out of this budget, so there are adjustments there."
Senator Raggio asked, "Does the budget accommodate the contracts
you feel are necessary to your operation?"
Mr. Jayne stated the baseline of 1992 does not reflect the necessary dollars to operate.
Senator Raggio asked Mr. Jayne to submit, in written form, what is necessary to accommodate services he deems essential, which are not in the recommendation.
Senator Rawson asked if money was finally allowed for the Americans with Disabilities Act (ADA).
Ms. Matteucci referred to Executive Budget page 1654, stating there was a work program approved by the Interim Finance Committee to pay for part of the ADA. The amount requested in 93-94 was erron-eously, entirely deleted. Ms. Matteucci suggested $55,000 should be added to the Governor's recommendation, or the legislature approve to adjust for the ADA and cover the total cost, as they show it, not the total of $170,000.
Senator Rawson wondered how the Jean Hanna Clark Rehabilitation Center could be out of compliance with the ADA since the center was built for people with disabilities.
Mr. Jayne replied:
It's frustrating for all of us. I'll give an example, not to be amusing. Yes, the building was set up to handle disabled individuals, and if you apply the strict adherence to the ADA requirements, we've got ramps within the building that are designed to help injured and disabled workers get up and down. The grade of those ramps in inappropriate, because they are too long of a run. You've got to build a platform half way up.
Now, we believe that's one we may not have to do, but the size of the handrail is too big. We could get into some real detail here, but we're looking for reasonable compliance, rather than the absolute compliance.
Senator Glomb asked, "Is that $55,000 for each year?"
Ms. Matteucci answered, "No, it's $55,000 for the first year. It's a total of $89,925."
Senator Glomb asked whether or not that amount would be enough to bring them in compliance since they originally asked for $170,000.
Ms. Abba replied:
No, we don't suspect that will be. If you reduce what we got in December [through the Interim Finance Committee (IFC)]...we would be requesting $135,000. At the December IFC we brought forward $34,900 [which was approved]. What we requested in our budget, what we feel our needs are, to bring all three of the buildings, the Las Vegas, and the two Carson City buildings in compliance would be $135,000, which would be the difference if you take the $170,000 we originally requested and reduce it by the $35,000.
Ms. Matteucci told Senator Glomb she could provide a copy of the detail provided to her and added the difference was for remodeling, not related to ADA.
Ms. Abba said there is some confusion and SIIS will work with the budget office. The total request for building improvement was $270,000, $170,000 of it was for ADA, and the other $100,000 is for building improvements.
Senator Glomb stated, "Just getting the $89,000, you're saying you will not be able to comply with the ADA requirements."
Ms. Abba replied, "Basically, we would not be able to bring everything up to the ADA compliance." She stated the Governor recommended $10,000 for building improvements, which are definitely needed in the Carson City offices.
Ms. Abba added their budget was built on a 4 percent increase over the FY 93 work program year, which is reflected throughout the whole budget. She did state some concern with In-State Travel, as far as the Governor's recommendation. She commented, "They reduced our In-State Travel back to FY 92 actuals."
Senator Raggio asked, "How much was allowed?"
Ms. Abba replied:
What was allowed was [$83,184 and $76,028]. What the adjustment there is that those $99,469 [$99,499] taken out, reduced from our request, because of the positions. But, the concern we have is that they took the $99,000 from their base actual of the $182,000. We were requesting $257,000. With removing those positions. If they remove 129 positions at this rate, we simply won't have enough money to do the rest....
Senator Raggio commented, "The issue is that $83,000 and $76,000 respectively, even with the reduction in force...is not adequate to accommodate the required in-state travel." Ms. Abba agreed. Senator Raggio continued, "Will you visit with the budget office on that? That could be a very important issue."
Ms. Matteucci stated:
I think the problem here all relates to what year you're going to use as the base. And what SIIS did in their budget request is use 92-93. If you'll look at the work program 92-93 that was $257,000. That's the amount that she's now stated as needing in In-State Travel. As you recall, that was based on a significant caseload increase, which they've also testified that they're not experiencing for a number of reasons.
I think the issue that's going to be before this particular committee, is whether you want to use, in SIIS' case, 92-93 as the base, and make those adjustments, or 91-92 and then make the adjustments based on a flattened caseload.
Senator Raggio declared:
The issue may be that it isn't that simplistic in this particular budget, to make that kind of an adjustment. It may be that the remaining amount, or the recommended amount, simply isn't adequate under that formula to deal with the remaining positions. I think you ought to have some discourse on that.
Senator Raggio mentioned the Peat Marwick study in 1991 highlighted the fact there were duplicate medical payments being made in a significant amount ($4.8 million recovered in medical provider duplicate payments). He asked, "What are you doing on that?"
Mr. Jayne said improvement has been made in duplicate payment recovery. Their internal systems provide a duplicate check within themselves. Their Price Waterhouse system is being programmed today, and will be coming on-line in July of 1993 It will do an even finer job of catching the duplicate payments.
Senator Raggio asked Ms. Matteucci if the Governor is going to announce a new plan to change this budget.
Ms. Matteucci replied:
This budget, as you see it, with the one adjustment we've brought to your attention, does incorporate the Governor's plan....He wants to appoint the top eight positions directly, and then is waiting to see exactly how many of the next layer of positions are moved into the exempt-merit status, so that we have more flexibility with retention, and that sort of thing....
Senator O'Donnell asked, "On the detail of the State Claimant's Attorney [Nevada Attorney for Injured Workers], I didn't see that anywhere in the figures that I was given. Do you have that budget?"
Ms. Matteucci answered, "It's in another budget. It's in the Department of Business and Industry, and I think you'll hear it separately."
Senator Glomb said, "...Until we see what policy decisions are finalized, in terms of the whole SIIS program, it's very hard to address specific issues in the budget."
Ms. Matteucci remarked:
Mr. Chairman, there is an adjustment that Ellen [Townsend] just pointed out to me. We still have riding in the salary category, $6,700 for board and commissions salaries for this year, and that should be removed. That $6,720 each year. That's in the Base budget under Personnel. It is a line item in there. That should be removed under the Governor's proposal.
Senator Jacobsen said the audit subcommittee reviewed the budget, and 14 recommendations were made, mostly agreed upon. Only a few items were not in agreement.
Senator Raggio called a 5-minute recess. After reconvening, he opened discussion on Executive Budget page 373.
Industrial Relations - Page 373
Carol Jackson, Director, Department of Industrial Relations (DIR), stated the Department of Industrial Relations is being combined with the Department of Insurance, to form part of the Department of Business and Industry. She submitted Base Budget Highlights 1993-95 Biennium (Exhibit F) and read portions of it.
Senator Raggio asked what specific plan the Governor has with respect to the department.
Ms. Matteucci replied:
On that chart, under Business Regulation, there's a bureau called Insurance. The proposals are that the Insurance Division, and the old Department of Industrial Regulation be combined into that particular bureau. We have not tried to combine the budgets. That has met with some great deal of confusion in the past, so we've just....
Senator Raggio asked, "Where are we going to find this function that's in this budget, Industrial Relations? Where is that going to be on this chart?" Senator Raggio was referring to the chart, Department of Business and Industry, Operational Organization (Exhibit G) and another handout entitled Department of Business & Industry - Management Restructuring (Exhibit H).
Ms. Matteucci replied, "Insurance."
Ms. Jackson continued to review Exhibit G and Exhibit H. She drew attention to page 2 of Exhibit F, the second paragraph, where it states Budget Account 4680 consists of the Director, the Legal Section, a temporary Medical Audit Unit, the Division of Industrial Insurance Regulation and Administrative Services, approximately 46 employees.
Senator Raggio stated there are now 130 self-insured companies for which DIR will have audit authority. Ms. Jackson agreed. Senator Raggio asked if there had been an increase in the past year. "What was your comparison?"
Ms. Jackson replied, "My comparison was as of July 1, 1991. There were 86 self-insured employers. There are 130 as of February 1, 1993."
Senator Raggio asked:
If there has been that much increase, and your number of positions and budget is based on the base that was in effect at that time, how are you going to perform your audit function? Are you able to do that with the present staff and budget that is recommended?
Ms. Jackson said DIR will be combining with the Insurance Division, so "extra staff should be picked up in that area, also."
Senator Raggio requested a presentation from Ms. Matteucci as to how the amalgamated division is going to function, regarding audits. Ms. Matteucci agreed to supply the presentation, outlining how the division will work.
Senator Raggio asked Ms. Jackson, "What are the parameters of those compliance audits? To determine what, whether they are fully in compliance with Industrial Insurance Regulations, payment of claims, or..."
Ms. Jackson deferred to Mr. Jim Jeppson.
Jim Jeppson, Acting Administrator, Industrial Insurance Regulation Division, Department of Industrial Relations, stated:
The scope of our audits addresses the compliance of the insurer, with the various statutes and regulations dealing with the delivery of benefits to the injured worker, and the payment of bills to medical providers. So, we're looking at areas such as was the proper disability compensation paid, was it paid timely, were the permanent disability ratings performed timely and accurately? Were the medical bills paid timely and accurately? And, did the insurer respond to requests of the providers and the injured workers on a timely basis?
Senator Raggio asked, "Do you have any opinion as to the level of compliance that you've found generally in this audits?"
Mr. Jeppson replied, "We identified some problem areas, where there were reoccurring problems. Some areas there was very good compliance. I have a copy of the audit report here." (Exhibit I. Original is on file in the Research Library.)
Senator Raggio asked, "Do you have a timetable, or cycle, for auditing these companies every 2 years, every 3 years? What's your timetable?"
Mr. Jeppson responded:
We do have a timetable, and that schedule is part of our audit manual. It is revised periodically. We are required by statute to audit each insurer at least once every 3 years. We also schedule follow-up audits to review specific problem areas of insurers within 6 to 12 months following a major compliance audit.
Senator Raggio inquired, "What actions do you take against companies that you find out of compliance?"
Mr. Jeppson responded:
The actions we are authorized to take is to issue citations and assess fines against insurers for violations that are discovered. The SIIS audit was completed and signed on December 21, 1992. We have two other phases of this audit that we are in the process of finalizing.
In the scope of this audit, we discovered that we did not have enough information in areas of rehabilitation services, permanent partial disability...the payment of medical bills. We are supplementing this audit with the findings of some follow-up audits. When this is complete, we will review all of the violations of the assessment of appropriate citations and fines, but they have not been assessed at this time, on this particular audit.
Senator Raggio asked, "Does this division have authority to approve the level of medical payments? Do you have any jurisdiction over that?"
Ms. Jackson replied, "Yes, we do. We are required by [Nevada Revised Statutes] NRS 616.412 to revise the medical fee schedule, at least once a year. And, it has to be completed by October 1 of every year. It includes all insurers."
Senator Raggio asked, "Have the medical fee payments been increased?"
Ms. Jackson answered:
With part of this particular statute, it allows the agency to recommend and increase in specific areas, up to the medical component of the Consumer Price Index. Last year the medical component was 6.2. We did do minimal increases. The only area that was increased to the 6.2 was the area of pathology. We tried to keep it, as far as the increases, as fiscally low as possible. We did hire an actuarial firm of Milliman and Robinson, out of San Francisco. They actually did the study and the comparisons, and gave us the conversion factors, and so forth, on converting the medical fee schedule.
Senator Raggio stated, "That in itself has an impact on the cost to the self-insurer. What in dollars does that represent? Do you have any idea of the increase?"
Ms. Jackson replied:
We have been conducting a study for the last 3 months...we adopted it on October 1, but the effective date was October 15. We contacted specific self-insurers in the State Industrial Insurance System and requested they submit data to us so we could see what the effect of the new fee schedule would be.
We have received information from W.R. Gibbons, Incorporated, and we've also received two accounts from CDS of Nevada, Caesar's Palace, and the other one slips my mind at the time. It does not appear that with those two accounts, that it was that much of an increase with CDS. With W.R. Gibbons, Incorporated, we did find areas that they were paying the bills wrong, and so some of the increases that you may hear about are because they're not paying the bills the way they are.
Part of our temporary medical audit unit does provide training for insurers on how to pay the bills correctly, and so we're constantly reviewing bills, and asking people to send them in, so we can take a look at them and see if you are paying the bill correct, or if there is some specific increase in any one area.
It was mandated by the 1991 legislature to switch from the California Relative Value System on the medical fee schedule to the Current Procedural Terminology, or CPT. Because of that switch, we knew there would be increases in the fee schedule, and we tried to keep them as minimal as possible. We've checked with other states. Califor-nia tried for 5 years to adopt the CPT. They still have not been able to do that.
Oregon adopted the CPT schedule, and we check with them, they've been using it for 5 years. It's a constant revision of the fee schedule, due to the fact that you're always finding areas that need adjustments. In checking with Oregon, we asked them to send us a copy of the frequently-used codes, compared them with Nevada's frequently-used codes. We found that our fee schedule was approximately 12.5 percent less than what Oregon's fee schedule was, and that was a non-statistical sample. It's a new fee schedule. It's a new format, new codes, and there is going to be some type of increase.
With managed care, we do not see the need to do a fee schedule, and I've submitted documentation to Senator Townsend this morning indicating that also.
Senator Callister asked, "How current are you on your audits of self-insured employers?"
Mr. Jeppson responded:
In Fiscal Year 1992, we completed 37 compliance audits. For Fiscal Year 93, we have completed four audits, but during the 7-month period to date that included the SIIS audit, which was a major undertaking. We also have four follow-up audits completed, and 36 audits in progress. So, we should meet our target of 48 audits by the end of the fiscal year.
Senator Coffin requested a copy of the list of businesses who are self-insured at the present time. "And the dates they went self-insured. Would that also indicate the occupation, or at least the standard industrial classification of those employers?"
Senator Raggio also requested a copy of the list of self-insureds be provided and made a part of these minutes (Exhibit J).
Mr. Jeppson provided the list (Exhibit J). He commented the list does not currently identify the standard industrial classification.
Ms. Jackson stated Mr. Jeppson used to work for the Insurance Division and deferred Senator Coffin's question to him.
Senator Callister asked Ms. Jackson, "I think you mentioned that you were proposing to Senator Townsend that, in light of managed care proposals, you won't need a fee schedule anymore. Is that correct?" Ms. Jackson agreed. "How many of your personnel, or what kind of manpower is involved in the preparation of that fee schedule, at present?"
Ms. Jackson replied the preparation of the fee schedule is a massive undertaking. First, an actuarial firm must be hired, which costs approximately $20,000 a year. There also has to be an independent consultant, legal counsel, and additional staff to help put together the medical fee schedule. After given the conversion factors, it is necessary to go through each code by code to do the conversion, making sure all the numbers are accurate.
Also, some of the health-care organizations must be surveyed in order to get data from them. Getting information starts usually in November; putting it out to bid, getting an actuarial firm, getting the bids back takes from January until about the end of October, almost the date of adoption, until everything is complete.
Medical audits are also done. Numerous complaints are received from providers. In May of 1992, SIIS was approximately 140,000 bills behind on payments. Each billing has to be reviewed for payment.
Senator Raggio asked, "Will the divisions we are talking about, under the Director's Office, still remain when it is amalgamated with the Insurance Division. Are those separate units still going to exist?" Ms. Jackson replied they would.
Enforcement for Industrial Safety - Page 378
Ms. Jackson referred to and read page 4 and page 5 of Exhibit F.
Senator Glomb asked if the interim study of Occupational Safety and Health was done by DIR. Ms. Jackson said it was. Senator Glomb asked if Ms. Jackson had the results of the study.
Ron Swirczek, Administrator, Administrative Services, Department of Industrial Relations, inquired, "Senator, were you talking about the occupational studies for the evaluation positions, whether they should be increased or decreased?"
Senator Glomb replied, "No. In terms of the preventative programs in the interim study of occupational safety. I was wondering how we compared with other states."
Donna Lewis, Administrator, Division for Enforcement of Industrial Safety and Health, Department of Industrial Relations, responded:
I believe you're referring to ACR [Assembly Concurrent Resolution] 76 [of the Sixty-sixth Session].
A.C.R. 76
OF THE SIXTY-SIXTH SESSION: Directs Department of Industrial Relations to conduct interim study of occupational safety and health standards.
We have turned in one document, which compares standards and addresses special standards that are adopted by other states compared to us. The bill ACR 76 [of the Sixty-sixth Session] directed that five states would be looked at. We wound up looking at seven, because criteria related into size and other factors. We then compared ourselves to two other states that were not similar size, but were similarly service-oriented, as Nevada is.
It was felt that document was inadequate. We've now prepared a second document that goes specifically into all of what we call special emphasis programs, which are programs that address problems that are identified either related to National Workers' Comp [Compensation] information, or to Nevada specific [specifically]. There are programs that are adopted at three levels. They are done by the state, but the state has state-designed programs that address Nevada problems.
Then there are region-adopted programs, which means each area of the country, for instance we are in region 9, which is Hawaii/Arizona, similar states here. Then they are adopted at the national level. We adopt those that relate to Nevada on the national level, then we also look at the regional adopted, and take those that relate to us. And, then we do Nevada-designed programs.
Senator Glomb asked, "How are we doing compared to other states?"
Ms. Lewis replied, "Actually, there was a special [federal] study just done, and we were identified as fifth best program in the nation, out of 23."
Senator Glomb asked, "Is the final report in for ACR 76 [of the Sixty-sixth Session]?"
Ms. Jackson replied:
We were requested to redo the study. I was not working for the division at the time when this study was requested. We went before the committee. They were not happy with the report. We have redone it. I am going to be meeting with Mr. Anderson within the next couple of days to have him take a look at it, to see if it's sufficient to meet what he actually wanted done by the agency.
Senator Glomb wondered when the study will be available to the legislature.
Ms. Jackson replied, "As soon as Mr. Anderson looks at it, and says yes, this is what I want, we will make it available to everyone."
Senator Raggio asked, "Will you be able to meet the projections you have under the performance indicators with the budget as it is presented to us? There's a growth indicated there."
Ms. Jackson answered:
We will have some difficulty meeting that because we did request additional physicians in that particular area. We won't be able to meet the number of projected, because we did show increases in the projected area, but we will do the best that we can do with the amount of staff we have.
Senator Raggio stated, "When you say you won't be able to meet it, how deficient do you anticipate you'll be?"
Ms. Jackson replied, "I would say that we would be closer to the projected levels for 1993."
Senator Raggio asked, "Does this agency, or this division, also merge into the Insurance Division? Do you get any additional assistance from them in this regard?"
Ms. Jackson replied, "No, we don't."
Senator Raggio said, "Well, how do we..."
Ms. Matteucci interrupted and said:
Mr. Chairman, maybe I can clarify it. I think the agency did not have a chance to adjust their performance measures, as a result of our not recommending the six new positions. So, what I would suggest is that they submit to you revised performance indicators based on the number of people staying flat in this particular budget account.
Senator Raggio stated, "So, what you're saying is they won't be able to meet the projections they have, and they should modify..."
Ms. Matteucci interjected:
No, what I'm saying is when they submitted their budget, and all of the budgets relative to SIIS, frankly, were done very late in the budget process. They didn't get a chance to adjust based on our recommendations. So, if you'd like to do that, I think they can give you more accurate ones now that they've seen our recommendations. They just didn't realize that.
Ms. Lewis said:
Chairman Raggio, there is one other facet of our projections that it's important that we keep in mind. It is to the size of the jobs currently going on. New programs that come on that slow us down. We have just recently entered several programs, process safety for chemical plants, where we would commit four to five staff members for 3 months, just to do the plant. We have in Las Vegas six major jobs. One of them was [for] five prime contractors, which means where you would ordinarily do a construction job in anywhere from 1 day to 3 days, we're on those for weeks on end with a full crew, which would be up to four to five staff members.
Also we're trying to do more in-depth work. For instance, let me use the example of the Frontier Hotel. We were in there for a month and a half on inspection, because of complaints coming in while we were doing the inspection. Then you must remember that it takes us 4 hours for every hour that we're on site. It takes us 4 hours in paper work. Just a few years ago it was 4 days to get out a citation after the finish of an inspection that is now 40. Part of that is due to a shortage of clerical help, because our professional staff grew without the clerical [support].
Senator Raggio asked, "Are you going to be able to respond, in your opinion, to the complaints that you receive?"
Ms. Lewis replied, "Yes. We should tell you that Nevada ranks number one in the nation...in inspections. We feel we do an excellent job as far as reaching the work sites that we should be reaching."
Senator Callister commented, "You referred to the construction site in Las Vegas that you were typically doing in 1 or 2 days, and now you're taking longer. Is that because of the construction of the two new large casinos...hotel facilities."
Ms. Lewis stated:
We rank six jobs there right now as large jobs. The Luxor, then we break the MGM into two projects, the hotel and the park. We're doing the Stupak Tower [at the Vegas World Hotel & Casino], which is right now not having much...We have Treasure Island coming on-line. We have announced for next year some sort of a project where the Dunes currently is. There is the Water Park, that is going in.
Those are all significant jobs and we hit them every 90 days because of the difference in the complexion in the work going on at each site. The MGM alone, when you combine the two, can have up to 6,000 workers on it any given day.
Senator Callister said he was aware of a couple of fatalities, at one of the new sites [The Luxor].
Ms. Lewis said because of the unfortunate fatalities at The Luxor, opposed to have one safety staff one day a week the contractors now have a full-time safety staff of more than one, with a director in town.
Senator Coffin asked:
Are you budgeting for this kind of tactic to be used against employers in the future, whereby an employer is held hostage by continually finding complaints, discovering new things and reporting them to the state? And then the state serving, perhaps unwittingly, as a party to the dispute?
Ms. Lewis replied:
The Frontier was a very special investigation. The district manager and the administrator when each complaint comes in, and it's one reason when we get the complaint there is a slight delay, we can rule it as harassment and set it aside. We can set it aside because it was recently looked at...We have a responsibility to evaluate every complaint, because each one could be valid.
Senator Coffin commented:
It probably is a valid union tactic to do that. That's just smart politics on their part. I'm not going to fault them for that. On the other hand, we have to be careful that we don't get swept into the deal and become part of what is really a contract dispute.
Ms. Lewis stated, "We have very strict rules about involving ourselves in labor disputes, and the union certainly understands that."
Senator Coffin pondered the fact so much time was spent chasing the complaints down at the Frontier, while there were life-threatening conditions in existence at the Luxor site.
Ms. Lewis informed:
Different staff does the Frontier than does the construction. Of the eight people that are basically SHR, Safety and Health Representatives, five do nothing but construction now. Three are doing general industry.
Preventative Safety - Page 382
Ms. Jackson stated Preventative Safety is a new department created as a result of Senate Bill (S.B.) 7 of the Sixty-sixth Session.
SENATE BILL 7
OF THE SIXTY-SIXTH SESSION: Makes various changes relating to industrial insurance and other rights of employees.
Ms. Jackson commented Preventative Safety currently has 14 full-time employees. The agency requested approximately $683,000. The Governor recommended $641,000. Ms. Jackson referred to page 7 of Exhibit F.
Senator Raggio asked, "What are you doing with respect to the proposed educational program?"
Ms. Jackson responded by distributing a copy of the proposed pamphlet, Workplace Safety: Your Rights and Responsibilities (Exhibit K).
Senator Raggio inquired, "This budget, as I understand it, does not contemplate the continuation of that program, or does it?"
Ms. Jackson replied the budget does contemplate the continuation of the program. She added:
I do understand also from Senator Townsend that they are looking at putting in another $500,000 in the next coming biennium...In the reorganizational plan there is no information saying they are not going to continue the Preventative Safety program.
Ms. Matteucci commented:
The contract is at $350,000. It's in the work program, and that's what makes the 92-93 work program and operating expenses look so large, on your Base budget on page 382...That includes, that line, the 92-93 work program, $350,000 for that contract. There's no continuation of the contract.
Senator Raggio said, "Okay, the contract is gone, but you're still going to have an educational program utilizing the material developed...After the contract expires, how will you continue to disseminate..."
Ms. Jackson responded, "Through the city business-licensing department...throughout the state."
Holly Jensen, Administrator, Division of Preventative Safety, Department of Industrial Relations, Las Vegas, mentioned the pamphlet (Exhibit K) is not copyrighted, can be reproduced, and copies will be available at DIR offices in Reno, Carson City and Las Vegas, as well as Elko.
Senator Raggio felt the dissemination of the pamphlet should be directly to the worker, rather than available in DIR offices.
Ms. Jensen stated:
At the present time we are preparing to organize for the distribution, and if we go with the inter-cooperative agreement with Employment Security [Department] we need to identify those employers that have employees. We will have the pamphlets in the employer's hands so he can be in compliance with this new statute, once the regulation becomes effective. Thereafter he can contact our office, and we will give him an adequate supply of pamphlets if he needs additional pamphlets in the upcoming years.
Senator Coffin stated he is concerned a delay has been requested in the dissemination of the information. It is important to get the information in the hands of the workers as soon as possible to help prevent injuries.
Ms. Jackson stated:
That call just came in late last night. The call did not come in to me...I do intend on taking care of the problem. We feel the educational information should go out immediately...The contract has been delayed long enough in my mind, and I feel we should be moving forward with the whole program.
Senator Glomb asked, "How are you going to deal with ongoing printing costs...Weren't there supposed to be billboards and safety films?"
Ms. Jackson replied, "That's all part of the contract."
Senator Glomb stated, "After June your budget won't have any money to have the radio spots, billboard space, printing costs..."
Ms. Jackson acknowledged, "That's correct."
Senator Raggio asked about the training and surveys and referred to the Performance Indicators, "Actual '92 you had 4,333 [number of consultation safety and health surveys conducted]..."
Ms. Jackson interjected, "That's a typographical error. It's 433."
Senator Raggio asked Ms. Jackson to comment on the functions and the capability of dealing with the projections.
Ms. Jackson remarked:
The department was put into effect in July of 1991. The administrator was hired in August of 1991. By the time the funding was received...to have office space, and the personnel...it was approximately October or November of 1991, so that's why you see on the Performance Indicators that they have been able to conduct the surveys in the actual 433, although it was projected to be higher, because the staff wasn't totally together at that time. The number of formal trainings were projected higher, and the actual was 471.
Senator Raggio asked if Ms. Jackson wanted to change or modify the projections.
Ms. Jackson replied adjustments will need to be made for Fiscal Years 1994 and 1995.
Senator Raggio asked if Ms. Jensen would like to make the adjustments now or later. Ms. Jensen chose to submit her figures for adjustment at a later time.
Mine Inspection - Page 386
Senator Raggio asked if this budget also goes into Insurance.
Ms. Jackson replied:
Yes, it does. This particular budget, I've highlighted the base highlight of page 8 of the handout [Exhibit F]. The monies for this particular division are from assessments levied against Workers' Compensation insurers and grants from the Labor, Mine, Safety and Health grants. There are approximately nine full-time positions in this division.
The total expenditure requested by the agency was approximately $506,000 and the Governor recommended approximately $507,000. There are no reorganization savings indicated in this particular budget.
Ms. Matteucci distributed Exhibit L and explained:
Essentially what's happened here is that the division did not report a continuation of a federal grant, which they now indicate they will get. This is the adjustments that you'll have to make to your budget, if you would like to authorize them to receive and expend that grant.
Senator Raggio asked, "How much is the grant?"
Norton Pickett, Administrator, Division of Mine Inspection, replied:
Our current grant that we just received, the $74,000...and that's been quite stabile for the last several years. We did have an amendment in addition to the grant last year in the amount of $10,000. We have historically received about $74,000 a year.
Senator Raggio referred to Exhibit L. "According to this handout, you're looking at something like $110,000 a year?"
Ms. Townsend responded:
No. What has been done to compensate for the grant at the time we put the budget together, the fact they were not going to receive the grant, was to accommodate for some of the operating expenses normally paid for through the grant. I've circled that number and broken it down. It's about $16,000. That has been added to the Base, representing a portion of the grant.
Senator Raggio asked if the grant would come in at the same level.
Ms. Townsend replied, "The grant will come in at the same level, $74,000 each year."
Mr. Pickett commented:
That may or may not be true, Senator Raggio. The grant is based on various factors, predetermined by the number of mine workers, and the number of mines operating within the State of Nevada. The formula used on the federal level is the total grants monies is distributed accordingly. As I said, historically we have received $74,000 over the past several years. There is no guarantee, however, that we will receive that next year.
In way of explanation for what just took place, I was notified in early April of last year that the grant that we had received for the past 15 years was being withdrawn. Through some negotiations we were able to have that grant reinstated, but that grant was not reinstated until just last month.
Senator Rawson stated:
It looks like there's a fairly high number of inspections and citations. If you couple that with the fact that mine employees are attending training sessions. I mean a couple thousand. We have very few worker complaints that are investigated, and I'm presuming that are made. Is there a general sense then that the mine workers are happy or pleased, or feel that their work environment is safe enough?
Mr. Pickett stated his division does not have a lot of complaints, indicating "something is working well." He added the number of inspections are predicated by the fact they are mandated to inspect every operating mine not less than once a year. Right now there are over 400 mines.
Senator Rawson asked if there are any other safety agencies making visits at the same time the Division of Mine Inspection is making visits and wondered if there is a way to consolidate with other agencies.
Mr. Pickett replied, "No, sir. On the state level my division is totally responsible for the mine sites."
Senator Rawson commented on abandoned mines and asked if they come under the jurisdiction of the Division of Mine Inspection.
Mr. Pickett informed abandoned mines now come under the jurisdiction of the Department of Minerals. The program had been given to them two legislative sessions ago.
Senator Raggio requested committee introduction of Bill Draft Request (BDR) S-452:
BILL DRAFT REQUEST S-452: Makes appropriation to Clark County for support of acupuncture treatment for drug abuse.
SENATOR RAWSON MOVED TO INTRODUCE BDR S-452.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Parole and Probation - Page 1480
John Slansky, Chief, Department of Parole and Probation, read from written testimony (Exhibit M) and handed out a Biennial Report from the Department of Parole and Probation (Exhibit N. Original is on file in the Research Library.)
Senator Raggio asked if Mr. Slansky was going to be able to meet his projections with proposed staffing.
Mr. Slansky said he believes he will, and added:
We took a long look at our Performance Indicators in the preparation of the budget, and we noted that while growth still continued in the department the growth has been at a much lower rate. The growth rate we're looking at now is 4 percent, and in past years it's been considerably higher. We have been reducing our projections for the past two legislative sessions...Our collections are a little bit lower than anticipated, but we're putting more effort into that.
Senator Raggio commented, "We've heard only a minimal discussion about the proposal, the Facilities Capacity Act, and the release of inmates when the prisons reach a level of capacity. What effect, if any, will that have on your program?"
Mr. Slansky stated he has not seen the Facilities Capacity Act but to his knowledge it would have no effect on the Department of Parole and Probation.
Senator O'Donnell referred to closing the honor camps in the rural areas. "Is that going to impact your budget in any way?"
Mr. Slansky replied, "No, sir, not to my understanding. The closing of the honor camps, I understand, is a part of the Facilities Capacity Act...These will be early releases based on time credit awards, but that's just speculation."
Janet Johnson, Principal Budget Analyst, Budget Division, Department of Administration, remarked the closing of the facilities is based on logistics. "Those people will be re-housed throughout the...existing institutions and prisons. The closure of the camps themselves does not automatically release those inmates."
Senator O'Donnell asked, "Are we at capacity now?"
Ms. Johnson replied, "I don't believe we are at capacity now. We're pretty close to it."
Senator O'Donnell commented, "Well, I bet you're pretty close to it."
Ms. Johnson responded, "Then the Emergency Capacities Act will have to kick in...It will not affect the Parole and Probation Budget."
Senator Rawson remarked:
We've been looking at another early-release program that's based around an institution drug rehab program, and so people would have an incentive to get out. But it's important there be some parole follow-through on those. I wonder if you're familiar with any programs like that. And we may want to talk with you further about what the impact would be.
Mr. Slansky commented:
I'm familiar with what we in the Department of Parole and Probation call the 305 program, after Assembly Bill [A.B.] 305 of the Sixty-sixth Session, which provided that some alcohol offenders would be released to the Department of Parole and Probation for supervision on the streets. That program has been active since January of last year. Some 193 inmates have been released on that [successful] program.
ASSEMBLY BILL 305
OF THE SIXTY-SIXTH SESSION: Provides for treatment of certain persons convicted of driving under influence of alcohol or controlled substance.
Mr. Slansky distributed a printout listing everybody in the "305 Program" (Exhibit O).
Senator Callister asked if Mr. Slansky had seen any documented evidence confirming, or not confirming, whether early release has any relationship to recidivism.
Mr. Slansky replied, "In very near time frames, I don't think it has a significant amount of difference."
Senator Raggio asked, "What happened on the plan for the intense supervision program, alternative forms of punishment. That was one of the highlights I thought we funded?"
Mr. Slansky replied:
That has continued, Mr. Chairman. And certainly part of it is here. All of the people who are in the DUI [Driving Under the Influence] or 305 program are under intensive supervision." Mr. Slansky referred to other legislation passed, other amendments to NRS, which allowed for further use of residential confinement as an alternative to incarceration.
Mr. Slansky referred to Assembly Bill 473 of the Sixty-sixth Session and Assembly Bill 474 of the Sixty-sixth Session.
ASSEMBLY BILL 473
OF THE SIXTY-SIXTH SESSION: Allows placement of probationers in residential confinement in certain circumstances.
ASSEMBLY BILL 474
OF THE SIXTY-SIXTH SESSION: Allows placement of parolees in residential confinement in certain circumstances.
Mr. Slansky recommended continuing the programs as they are working very well.
Senator Raggio asked the Public Safety Subcommittee to delve into this budget with Mr. Slansky.
Parole Board - Page 1487
Bryn Armstrong, Chairman, State Board of Parole Commissioners, distributed and read from his written testimony (Exhibit P).
Senator Raggio asked, "Your In-State Travel is based apparently on the closure of those camps?" Mr. Armstrong agreed. Senator Raggio continued, "If that were not to be approved..."
Mr. Armstrong interjected, "We would have to come back to you with different figures." He added the state's faltering fiscal record had some important impacts on their operations in the current biennium. "We took a hit of about $84,000 in the budget initially, which we met by closing the office which the legislature had authorized in Ely." Mr. Armstrong continued reading from Exhibit P.
Senator O'Donnell stated, "In 1991 you have 511 mandatory parole release actions, 271 were placed on parole?" Mr. Armstrong agreed.
Senator O'Donnell continued, "Did they require action from the parole probation?"
Mr. Armstrong replied, "Yes, sir, they go into intensive supervision...All releases under the mandatory Parole Release Act must go into intensive supervision."
Senator O'Donnell asked, "Would you agree with the former testimony that in the mandatory release act, if we close the honor camps and we have to put more individuals on the mandatory Parole Release Act that they won't need any more supervision?"
Mr. Armstrong commented he has never seen the act.
Senator O'Donnell asked how he could release 271 parolees on the mandatory Parole Release Act in 1991 if he had never seen it.
Mr. Armstrong stated, "This is a 1987 statute, Senator, and it provides that when we release them that they must go into intensive supervision."
Senator Raggio commented:
None of us have seen the Facilities Capacity Act. It is the chair's understanding that is a proposal the Governor has to automatically give the director from the prison system the authority to release when a 98 percent level of capacity is reached.
Senator Callister stated:
These are not individuals who, in any event, would be released under a parole option, as I understand the proposal. These are folks who are simply expiring their terms. They weren't people scheduled to go out on some shortened parole release...If they are within their expiration date, that's what guides it.
That's why it doesn't impact their budgets, and it doesn't really interact too much with the parole board either...People who would have qualified for parole would be out on parole, so they wouldn't be released under the mandatory release act. You are going to have either short-termers or long-termers who didn't qualify for parole, who are going to be subject to this 60- or 90-day early release.
Mr. Armstrong anticipates at least 4,980 hearings in Fiscal Year 1994, and 5,040 in Fiscal Year 1995.
Senator Jacobsen asked, "Is there something you lack in our system to deal with it more efficiently?"
Mr. Armstrong stated:
After the hearings are held, we have to bring the recommendations from the people who actually consulted on the interviews back to the board and have a vote on the files. That's a manpower proposition. We don't have enough people to have a full board sit at all hearings and make a decision at that point, and then tell the parole applicant immediately after a decision is made what that decision is. If there is a flaw, that's where it lies in my opinion.
The other flaw is the fact we are totally dependent upon the Department of Prisons to get us an assessment of the current status of that inmate, as far as what he's done in prison, and so forth. If we had our own staff we could do it, I think, better.
Senator Raggio asked the subcommittee on Public Safety to delve further into this affair.
Mr. Armstrong indicated he would be happy to meet with the subcommittee at their convenience.
There being no further business before the committee, Senator Raggio adjourned the meeting at 10:54 a.m.
RESPECTFULLY SUBMITTED:
Joan McConnell,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
February 3, 1993
Page 1