MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
March 29, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:02 a.m., on Monday, March 29, 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
Larry L. Peri, Program Analyst
Joan McConnell, Committee Secretary
OTHERS PRESENT:
Cheryl Lau, Secretary of State
Thom Reilly, Deputy Administrator, Division of Child and Family Services, Department of Human Resources
John Sarb, Administrator, Division of Child and Family Services, Department of Human Resources
Judy Matteucci, Director, Department of Administration
Janine Hansen, Lobbyist, State President, Nevada Eagle Forum
Michael R. Alastuey, Lobbyist
F. Gregory Betts, Lobbyist
Jerry Zadny, Ph.D., Administrator, Mental Hygiene and Mental Retardation Division, Department of Human Resources
Chris S. Graham, Program Manager II, Mental Hygiene and Mental Retardation Division, Department of Human Resources
Joni A. Kaiser, Lobbyist
Susan Meuschke, Nevada Network Against Domestic Violence
John Neill, Department of Prisons
Gary Crews, Legislative Auditor
Senator Raggio requested committee introduction of bill draft requests (BDRs).
BILL DRAFT REQUEST 43-1265: Establishes fee for dealer's report of sale and for special permit that enables buyer of motor vehicle to operate motor vehicle for 10 days.
SENATOR JACOBSEN MOVED TO INTRODUCE BDR 43-1265.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
BILL DRAFT REQUEST 32-1881: Increases compensation to state for collecting certain sales taxes.
SENATOR JACOBSEN MOVED TO INTRODUCE BDR 32-1881.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
BILL DRAFT REQUEST S-1882: Extends date of reversion of certain money appropriated last session to department of taxation.
SENATOR COFFIN MOVED TO INTRODUCE BDR S-1882.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
BILL DRAFT REQUEST 37-1717: Authorizes commissioner of veteran affairs to charge fee for guardianship program.
SENATOR COFFIN MOVED TO INTRODUCE BDR 37-1717.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
BILL DRAFT REQUEST 16-1726: Establishes emergency procedure for reducing number of offenders in facilities and institutions of department of prisons.
SENATOR COFFIN MOVED TO INTRODUCE BDR 16-1726.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
BILL DRAFT REQUEST 34-700: Establishes state program for funding local programs for intersession instruction of certain pupils.
SENATOR RAWSON MOVED TO INTRODUCE BDR 34-700.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Raggio opened the hearing on Senate Bill (S.B.) 275:
SENATE BILL 275: Makes appropriation to secretary of state to conduct study of election laws of this state.
Cheryl Lau, Secretary of State, stated the bill is the appropria-tion of $25,000 to study the entire election laws. She mentioned S.B. 250 and Assembly Bill (A.B.) 175 only take care of certain parts of the election laws.
SENATE BILL 250: Makes various changes to provisions governing elections.
ASSEMBLY BILL 175: Prohibits persons from directly or indirectly threatening or intimidating state employees.
Ms. Lau asked, "Because of the fiscal constraints we are on, I would ask that we defer S.B. 275 until we find out what happens with S.B. 250 and A.B. 175."
Senator Raggio rescheduled S.B. 275 for a later date and closed the hearing on S.B. 275.
Senator Raggio opened the hearing on S.B. 79.
SENATE BILL 79: Eliminates requirement that adoptive parents of child with special needs have limited financial resources to receive financial assistance.
Senator Diana M. Glomb read from written testimony (Exhibit C), testifying in support of S.B. 79.
Thom Reilly, Deputy Administrator, Division of Child and Family Services, Department of Human Resources, distributed The Adoption Subsidy Program Fact Sheet (Exhibit D) and testified in support of S.B. 79. A fiscal note (Exhibit E) on S.B. 79 was also distributed.
Senator Raggio asked for an estimate of how many children will qualify for the program requiring foster care.
Mr. Reilly stated the agency will place approximately 134 children
each year. He estimated, if the agency can create one subsidy program, they could place approximately 30 additional children next year, and approximately 33 additional children the following year.
It is anticipated the families of 15 of the children would only ask for a medical subsidy. Another 15 would ask for a medical subsidy plus a financial subsidy, and the monthly average would be $300. The fiscal note in FY 94 would be approximately $54,360. In FY 95 it would be approximately $59,796.
Senator Raggio asked, "What budget would that have to be in?"
Mr. Reilly replied, "There's a separate sub account entitled subsidized adoptions in budget account 3229."
Senator Raggio asked if there would be an equivalent reduction in the foster care budget.
Mr. Reilly stated eventually the cost could be seen in the subsidy care budget. It would not occur right away. A savings will not be realized for a couple of years.
Senator O'Donnell asked, "How long down the line will we see these savings?"
John Sarb, Administrator, Division of Child and Family Services, Department of Human Resources, replied, "I think we'll see some part of this impact as early as 1994-95. I have real concern about reducing the anticipated savings, maybe as much as $250,000."
Senator Raggio said:
When this bill was referred out of judiciary, and on the senate floor, the representation was made that there would be no additional cost. We referred it here on the advice of staff so that we could adjust the budget accounts to reflect that. Theoretically, on what was presented, it would be less costly to place the children with special needs in an adoptive home, and ultimately the cost would be more than $500 difference than if they were retained in a foster care environment.
We're not looking for savings at this time, but I think we're going to have to adjust the budget so it is at least revenue neutral. That may pose a problem to adding another $100,000 at this time. This apparently was not in the budget.
Senator Glomb stated she was not aware the savings were supposedly shown in one budget account and the cost in another budget account.
Senator Raggio suggested transferring into the portion of the budget account the respective amounts of $54,360 and $59,796 and reducing the other category by that amount. "At least it is revenue neutral."
Judy Matteucci, Director, Department of Administration, commented, "I think that's a very practical solution." Mr. Sarb and Senator Glomb agreed.
Senator Rawson wondered if a subsidy was the answer, or if the children should be eligible for Medicaid or other care, so there is no medical expense passed on.
Mr. Reilly mentioned all the children adopted out are eligible for Medicaid.
Senator Jacobsen also wondered about the practicality of having a subsidy.
Senator Raggio asked how long the subsidy lasts for the adoptive parents. He added, "What would be the continuing obligation of the state in these matters?"
Mr. Reilly replied, "Fifty percent of the adoption subsidies are 10 years and under. In most of those cases we will continue supporting the children until they are 18."
Senator Raggio asked what kind of follow-up process there is for adoptive parents. "I'd hate to think some child with some special need would be adopted primarily for the financial subsidy and not receive the kind of care and attention he/she should have."
Mr. Reilly said, "We do a lot of scrutiny of these families. Once a child is placed we do at least monthly visits for 6 months. Then we do a yearly review of the case."
Senator Jacobsen asked what the percentage is of adoptions that fail.
Mr. Reilly did not have the national statistics. There is an increase and thought it would be alarming to find out how many of the special-needs children are failing and coming back into the system.
Janine Hansen, Lobbyist, State President, Nevada Eagle Forum, testified in support of S.B. 79. She submitted a copy of an article from the Las Vegas Review Journal (Exhibit F) and some brochures (Exhibits G, H, I and J). She stated the organization CAP (Children Awaiting Parents) has a national listing of children who are difficult to adopt and are looking for families.
Senator O'Donnell asked Mr. Sarb if any advertising is done to find adoptive parents and if a budget for advertising is necessary.
Mr. Sarb replied there is not paid advertising but public service announcements, both in Reno and Las Vegas, are made through television stations. Staff also goes out to church groups to speak on behalf of the children for adoption. Foster parents often adopt the child they have been caring for. Mr. Sarb said, "I suppose you could do a full-blown paid advertising campaign, but I'm not sure we have tapped all of the pro bono resources that are possible in the media."
Senator Raggio closed the hearing on S.B. 79, stating a motion would be taken later. He opened the hearing on S.B. 84.
SENATE BILL 84: Makes order for payment of money belonging to school district void if not presented for payment within certain time after issuance.
Michael R. Alastuey, Lobbyist, stated there presently is not a statute that operates to void warrants issued by school districts. S.B. 84 proposes to make warrants expire and be voided at one year. Currently the Clark County School District has pending an auditor's recommendation that a list of such outstanding warrants be compiled indefinitely and perhaps be eventually subject to escheat. He provided an amendment (Exhibit K) to S.B. 84.
F. Gregory Betts, Lobbyist, testified in support of S.B. 84, speaking for the rural school districts of Nevada as well as the Nevada Association of School Boards.
Senator Raggio closed the hearing on S.B. 84 and opened the hearing on S.B. 274.
SENATE BILL 274: Transfers responsibility for administration of account for aid for victims of domestic violence.
Jerry Zadny, Ph.D., Administrator, Mental Hygiene and Mental Retardation Division, Department of Human Resources, suggested the responsibility for the grants follow the transferred position of managing the grant for the aid to victims of domestic violence over to DCFS (Division of Child and Family Services). He brought attention to line 11, page 2 of S.B. 274, suggesting a change be made in the population figure of 25,000 to 14,000. It would have an effect on the amount of money the counties receive. The 14,000 population figure is recommended by the victims network. He stated, "We would like to propose that amendment at this point and support it." It would bring the counties of Churchill, Lyon and Nye within the grant capability. Humboldt County would benefit as well in the future.
Chris S. Graham, Program Manager II, Mental Hygiene and Mental Retardation Division, Department of Human Resources, stated all the counties in the state are covered. Some of the programs that provide services cover multiple counties. The funding would go to several counties within the state.
Senator Jacobsen requested a list of what comes from each county such as marriage licenses, etcetera.
Joni A. Kaiser, Lobbyist, read from written testimony (Exhibit L). Ms. Kaiser requested a change be made in section 2, lines 14 through 16 in S.B. 274, to have a publicly appointed body look at the grants and proposals so it is not one administrator making the decisions. Discussion ensued.
Susan Meuschke, Nevada Network Against Domestic Violence, read from written testimony (Exhibit M). She had two concerns, both listed on page 1 of Exhibit M. Discussion ensued.
Senator Raggio closed the hearing on S.B. 274 and opened the hearing on S.B. 276.
SENATE BILL 276: Authorized transfer of money from offenders' store fund to prisoners' personal property fund.
John Neill, Department of Prisons, stated S.B. 276 provides a mechanism to allow transfer of funds from the inmates' store profits to the prisoners' personal property fund and to cover various types of losses. Examples of losses of the banking funds can be employee fraud, inmate fraud, invalid deposits and misposting of entries, which are the most current common causes. Since 1985 there have been losses of $189,698. One particular loss was due to employee fraud of $152,648. The rest of the losses to the fund seem to be under the national average.
Senator Glomb asked, "What reassurance do we have that there are controls in place so this sort of thing doesn't happen again?"
Mr. Neill said there had been a fraud problem with the previous chief of inmate services. They have hired a new one. The staff has developed many internal procedures to reconcile accounts. An internal auditor was requested in the budget.
Senator Glomb asked if Mr. Neill agrees with the auditor's recommendations on a recent audit report and if the agency is in compliance with those recommendations.
Mr. Neill answered in the affirmative and added the audit was one requested by the agency.
Senator Rawson asked, with reference to the loss, if there had been any recovery through bonding.
Mr. Neill stated there had been no recovery through bonding. There is a $50,000 deductible in the state bonds. The employee was found guilty through trial, and the agency was able to recover $25,000 from the court. There is a current request in to the risk management and bond council to pay off on the remainder of the bond. The determination should be coming through in April. The attorney general's office is also seeking to recover the balance of the funds from the guilty party.
Senator Raggio asked for a full report of the effort that has been made to recover from the bond.
Senator O'Donnell said he has a problem with transferring funds
without any investigatory work. He added, "If there is a shortfall in the prisoners' personal property fund, how can the shortfall occur?"
Mr. Neill stated all shortfalls are investigated and criminal action is pursued against inmates or employees involved in fraud. Sometimes there are dishonored checks.
Senator Raggio asked Mr. Crews if he has any recommendations to make with respect to the request for change in the existing statute.
Gary Crews, Legislative Auditor, stated he has some concerns with S.B. 276 in its present format. He added:
We do believe it gives a lot a flexibility, and we have always advocated that controls are more important than trying to reimburse something after the fact. However, I think you don't have the proper controls imbedded in this bill [S.B. 276]. You may want to consider bringing the IFC [Interim Finance Committee] into the approval process before the transfer is made. That would instill some additional controls that assure transfers are not made on a regular basis, and there is some substance to the transfers.
Mr. Neill stated he has no objection to the suggestion made by Mr. Crews.
Senator Raggio asked Mr. Crews if he has had an opportunity to evaluate the procedures which are now in place or which have been accepted by the prison authorities in dealing with this problem.
Mr. Crews stated he was not in a position to see if the current procedures are actually taking place. After the audit report was presented to the audit subcommittee there were monthly bank reconciliations being submitted to his office, but they have not been received for some time. On the ones they did receive there appeared to be some unreconciled differences on the bank reconciliations. He added, "In answer to your question, we are not completely satisfied at this point in time."
Senator Raggio suggested Mr. Neill visit with the legislative audit
bureau, before the committee processes this bill (S.B. 276), to see if he can respond to their concerns.
No action was taken on S.B. 276. Senator Raggio closed the hearing on S.B. 276.
Senator Raggio reopened the hearing on S.B. 79, and suggested a letter be written by staff to advise the ways and means committee that the budget is being adjusted internally to provide the additional amount for the subsidized adoption program and reducing the foster care budget by a similar amount, and not reducing the foster care budget beyond that.
Senator O'Donnell agreed to Senator Raggio's suggestion and added:
Even though we may do a revenue neutral transition from one account to the other account, there will be an additional intrinsic savings [$250,000] by doing just that.
SENATOR GLOMB MOVED TO DO PASS S.B. 79, AND THERE WILL BE AN APPROPRIATE LETTER EXPLAINING ACTION AS TO THE BUDGET. STAFF WILL MAKE TENTATIVE ADJUSTMENTS NECESSARY IF BUDGETS ARE APPROVED.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Raggio reopened the hearing on S.B. 84. Mr. Alastuey presented the amendment to S.B. 84 proposed earlier.
SENATOR O'DONNELL MOVED TO AMEND AND DO PASS S.B. 84.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Raggio reopened the hearing on S.B. 274.
SENATOR GLOMB MOVED TO AMEND AND DO PASS S.B. 274, BY REMOVING THE BRACKETS IN SECTION 2, LINES 14 AND 17, AND AMENDING LINE 11 ON PAGE 2 WITH THE FIGURE OF 14,000 IN LIEU OF 25,000.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
The committee received Amendment No. 167 to S.B. 18..
SENATE BILL 18: Extends time for repayment and reversion of money previously appropriated to supreme court of Nevada.
Daniel G. Miles, Fiscal Analyst, was asked by Senator Raggio to explain the amendment.
S.B. 18 was an appropriation of $15,000 to the courts for their temporary relocation in Las Vegas. A similar appropriation was made in the 1991 session, so the amendment just extends the reversion date of the initial appropriation rather than having a second appropriation out there at the same time. The amendment amends Chapter 693 of the 1991 session to extend the date from 1993 to 1995, and makes S.B. 18 effective upon passage and approval. They would immediately have the extended reversion date, and the money would be available from the passage of this bill until June 30, 1995.
Amendment No. 192 to S.B. 306 was received by the committee.
SENATE BILL 306: Makes appropriation to state public works board for certain capital improvement projects.
Senator Raggio stated, "We will proceed on the basis of Amendment No. 192 which is consistent with this committee's action taken on March 25, 1993."
There being no further business before the committee, Senator Raggio adjourned the meeting at 9:42 a.m.
RESPECTFULLY SUBMITTED:
Joan McConnell,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
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Senate Committee on Finance
March 29, 1993
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