MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
May 7, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:10 a.m., on Friday, May 7, 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 Lawrence E. Jacobsen
Senator Bob Coffin
Senator Diana M. Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
COMMITTEE MEMBERS ABSENT:
Senator Raymond D. Rawson, Vice Chairman
STAFF MEMBERS PRESENT:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Jeanne Botts, Program Analyst
Dee Crawford, Committee Secretary
OTHERS PRESENT:
Barbara Mello, Concerned Citizen
John Sarb, Administrator, Division of Child and Family Services, Department of Human Resources
Christine Cordero, Student
Neal Bullis, Consultant, Independent Living Program
Judy Matteucci, Director, Department of Administration
Fernando Romero, Executive Director, Nevada Equal Rights Commission
Keith Marcher, Deputy Attorney General, Office of the Attorney General
Carlos Romo, Ph.D., Assistant Director, Nevada Equal Rights Commission
Jerry Halloway, Chairman, Nevada Equal Rights Commission
Senator Raggio opened the hearing on Senate Bill (S.B.) 299.
SENATE BILL 299: Makes appropriation to School of Medicine of University of Nevada System.
Senator Glomb testified from written testimony, Exhibit C, in support of S.B. 299. She stated this bill appropriates the necessary funding to enable the University and Community College System of Nevada School of Medicine to continue treating emancipated foster children. The center anticipates it will treat from 50 to 60 emancipated foster children annually, she testified. The requested funding is $20,000 for the 2-year period from July l, l993 to June 30, l995. Any unused funds would be returned to the General Fund, she advised. Senator Glomb introduced Barbara Mello, former chairman of the State Welfare Board.
Barbara Mello, Concerned Citizen, testified from written testimony, Exhibit D, in support of the measure.
Senator Coffin joined the meeting at 8:l5 a.m.
Senator Raggio asked Ms. Mello to explain the process regarding how the funding for medical care will be used.
Ms. Mello replied the recipients make use of the appropriation by receiving services through the family practice clinics at the universities in both Las Vegas and Reno. Funding will cover the cost of an office visit, prescriptions, medical testing and/or X-rays, she explained.
Senator Raggio solicited clarification the recipients are classified as individuals who have left the state-supported foster care program and are now emancipated.
Ms. Mello responded in the affirmative. Under this program, she explained, coverage exists up to l2 months for primary care. In most cases, it does not pay for hospitalization or surgery, but does provide coverage "from sore throats to family planning." She clarified that abortions are not funded.
Senator Jacobsen asked what was the average age group of the recipients.
Ms. Mello replied anywhere from l5 to 2l years of age.
John Sarb, Administrator, Division of Child and Family Services, Department of Human Resources, came forward to testify in support of the measure. He declared approximately ll4 young people in the foster care system will reach age l8 this year. These individuals have no parental resources to turn to once they reach the age of majority, he asserted. He urged passage of the bill in order to provide basic medical care for those individuals.
During the last biennium, the agency has provided limited care through its Independent Living Grant. He pointed out there are approximately 60 children currently fitting that category, with ll4 moving into that classification in the coming year. Mr. Sarb introduced Christine Cordero, currently in the custody of the Division of Child and Family Services, to the committee.
Ms. Cordero came forward to testify she has no resources available to obtain medical coverage. She explained her parents live out of state and are not financially able to assist her. Ms. Cordero stated she plans to apply for scholarships and grants in order to attend the University of Nevada, Reno. She testified in support of the measure.
Neal Bullis, Consultant, Independent Living Program, testified in support of the measure. He also pointed out when Ms. Cordero enrolls in college, she will be able to change to a college-based health program.
Senator Jacobsen asked if the State of Nevada incurs any liability with this program.
Mr. Bullis responded, "No, I don't believe so...."
Senator Raggio closed the hearing on S.B. 299 and opened the hearing on Senate Bill (S.B.) 360.
SENATE BILL 360: Authorizes temporary advance from state general fund for authorized expenses of Nevada equal rights commission.
Judy Matteucci, Director, Department of Administration, explained to the committee this bill will allow the state to lend a General Fund appropriation to the Nevada Equal Rights Commission (NERC) in anticipation of receipt of federal funds. She explained the NERC is currently experiencing a cashflow problem. She maintained approximately $ll3,000 is owed to the NERC from the federal government. She concluded:
This would just allow us to estimate how much was going to be received and then lend them no more than 25 percent of what that anticipated receipt was going to be and ease the cashflow problems in their budget.
Senator Callister joined the meeting at 8:30 a.m.
Senator Raggio asked if the language in the bill was identical to the authority granted in similar instances.
Ms. Matteucci stated it was her belief it was the same.
Senator Raggio asked for assurance the outstanding federal funds will be received by the agency.
Ms. Matteucci replied:
Prior to us making this recommendation to the controller for the loan, we would verify the funds would be due and payable from the federal agency. We would not make this a loan, or even propose to make the loan, if the federal government said the money was not forthcoming. I think that is different from the situation whereby they lost their grant because information was not forwarded to the federal government in time. So this is really just a cashflow-type purpose, but we verify that in our office.
Senator Raggio reiterated, "So you can give the committee that assurance?"
Ms. Matteucci responded in the affirmative.
Fernando Romero, Executive Director, Nevada Equal Rights Commission, came forward to testify in favor of passage of the measure. He expressed the following concerns:
Approximately 2 months ago, I received a call from the controller's office...Ken West. He said to me not to make any further expenses in regard to budget 2583, which is the federal portion of the budget for NERC [Nevada Equal Rights Commission]. In fact, he said, we are not even going to meet your payroll this Friday, by the way, the call was on a Wednesday. I said, well, that is your prerogative. I will ask you to please inform my staff that you are going to do this, or not going to pay them. He said, maybe we will meet this payroll, but we certainly will not meet the next payroll. I reiterated it is obviously his prerogative but, however, it would be he that had to notify the staff. But my concern was that all the expenses incurred by us are legitimate expenses and are done in the name of the Nevada Equal Rights Commission, a viable agency of the State of Nevada. It is not under my control, as executive director, to force the [federal] Equal Employment Opportunity Commission to have a check in our coffers by a determined date. We have tried. In fact, right after that call, I got on the phone and called...Washington...attempting to expedite that check. It was expedited, but it still took approximately 2 weeks to be received. I realize there has been a problem in the past of vouchering for monies due the NERC; however, it is also my experience that they do take a considerable length of time. As an example, we vouchered for this next payment back February...l3, and we have yet to receive payment for that voucher....
Senator Raggio wondered if that funding was the source that covered the federal positions in the NERC. Senator Raggio asked Ms. Matteucci, "Is that the normal experience of this agency with the federal government, or is there something amiss that needs to be addressed? Does it take from February to May to get these federal funds?"
Ms. Matteucci responded:
...As you know Fernando [Romero] is new and they've been having some transitional problems. I think there is a combination of problems. I think the federal agency is slow in vouchering the money, but that also we have been slow in asking for the draw-downs. Fernando, I know, is working to remedy that on his end, but there is a problem and that's why we asked for the bill to solve that cashflow problem.
Senator Raggio expressed his concern that authorizing advances without guaranteed assurance the funding will be forthcoming is not favorable to the committee. Senator Raggio closed the hearing on S.B. 360.
Equal Rights Commission - Page 1103
Equal Employment Opportunity - Page ll07
Mr. Romero distributed Exhibit E, memo dated May 7, 1993, (Exhibit E - Original on File in the Research Library) to the committee and testified while referencing that document.
He testified that as of March 3l, l993, the NERC had l,840 active cases. He explained to the committee that his office is not computerized, therefore, statistics are not always up to date. Mr. Romero's desire is to secure an automated computerized system to allow for more expediency in case processing. Mr. Romero contended the number of cases has been steadily rising and opined it will continue to rise.
Senator Raggio briefed the committee explaining applications for federal grant funds were not made in a timely fashion by the agency. He explained the associated problems occurred when notice was received from the Department of Housing and Urban Development (HUD) pointing out the deficiencies in the existing Nevada housing law.
Mr. Romero deferred testimony to Keith Marcher, Deputy Attorney General, Office of the Attorney General, to explain the legal analysis of the State of Nevada Fair Housing Law in determination of substantial equivalency to the federal law.
Turning to Exhibit E, Mr. Marcher referenced page 9 and testified the review evaluates whether the law provides substantive rights and remedies that are equivalent to those created by the federal Fair Housing Act. He cited several areas in which Nevada's law differs significantly with the federal act, as outlined on the exhibit material.
Mr. Marcher explained when the original memo was received from HUD that delineated Nevada's deficiencies, "it wasn't aware of all our statutes, it was only provided with Chapter ll8 [of Nevada Revised Statutes]. So there are some areas where we are in substantial compliance that they were not aware of when they did the memo...."
Mr. Marcher pointed out to the committee that at such time a case goes to an administrative hearing at HUD, the federal agency has the ability to fine a respondent up to $l0,000 for the first discriminatory violation. He explained, "They would like to have NERC have that ability, also...."
Senator Raggio asked if there was a requirement that punitive damages be added to the equivalency standards.
Mr. Marcher responded in the affirmative and added, "And the ability to fine people, which they don't have now." He cited one problem area is providing copies of the investigative report to the parties thereby making any settlement agreements public. That conflicts with the confidentiality statute of the NERC, as outlined in Nevada Revised Statutes 233.190, he stated.
Mr. Romero interjected to explain that because NERC does not currently have a contract with HUD, they are not eligible to apply for HUD funding. He went on to explain the fines that NERC could impose is $l0,000 for the first offense, $25,000 for the second offense and $50,000 for the third offense. "All that money would remain with NERC, so obviously the financial picture for the State of Nevada and the NERC would look fairly bright were we to adopt the equivalency laws," he urged.
Senator Coffin expressed concern the agency has the responsibility to hear all complaints, yet has no authority to fine or admonish offenders.
Mr. Marcher explained the agency does have subpoena power for hearings but does not have subpoena power for investigations. "So, after a complaint is filed, they have to ask the respondent for the information. If they don't give it to them, they can't subpoena it...," he emphasized.
Senator Coffin suggested a bill draft request be initiated to address the issue.
Senator Raggio pointed out such a bill draft request would be more appropriately initiated by the Senate Committee on Government Affairs.
Mr. Romero pointed out a bill recently failed in the Senate Committee on Government Affairs which would have allowed for subpoena power for investigation purposes.
Mr. Marcher contended:
There is currently nothing in the law that provides for punitive damages and that's another point with NERC in going to public hearings. These people won't use NERC as a process to see their case through to the end and go to a public hearing because the remedy provisions in the statutes, as they exist, are completely deficient compared to the new civil rights act where you get punitive damages....
Mr. Romero referenced the exhibit material and stated pages 39 through 56 contained copies of correspondence from HUD to former executive director of NERC, Delia Martinez, regarding repeated requests for submittal of proper forms in order that reimbursement for payment could be authorized.
Senator Raggio asked if the letters were responded to by Ms. Martinez.
Mr. Romero stated he could not locate any correspondence from NERC in response to HUD inquiry. "According to the regional director for HUD, the funding was not forthcoming as their requests had not been responded to," he proclaimed.
Senator Raggio asked Ms. Matteucci if the agency ever received the funding.
Ms. Matteucci responded:
No, we just got this packet [exhibit] this morning, too....There were a number of conditions, apparently, that were laid down by the federal government in order for us to get the money. I think what Fernando is trying to say is that those conditions were not met, that's why the money did not come through.
Senator Raggio asked if it was possible to reapply for the funding.
Mr. Romero responded he made inquiries to HUD whether the agency may voucher for the funds at this time and was advised the funding had been returned to the federal treasury.
Carlos Romo, Ph.D., Assistant Director, Nevada Equal Rights Commission, provided the following historical information:
...As I understand it, at the l99l legislature when the regulations, or the equivalency, was needed it was difficult to know from HUD what those specific guidelines were going to be. It's been outlined now, what the...substantial equivalency requirements are going to be. It is my understanding from the former executive director that we could try to submit a bill to get that equivalency; however HUD did not know what those specific guidelines were....There was only one state...the State of Texas that had submitted bills equivalent to what we're talking to today. It was thought that once HUD accepted the Texas statutes, that all the other states could come into compliance. Going back to the l99l legislature, we did submit, and we did do what we could at that time....We did change the statutes, not only for the housing laws...but also for the EEOC [Equal Employment Opportunity Commission] laws in which we changed all the physical handicapped to be called disability and we also allowed for the NERC to process charges....We did not have any direction or guidelines that we could submit anything that we're talking about today, simply because HUD had not given us guidelines. So, it's my understanding that none of this could have come about unless we had substantial equivalency.
Senator Raggio pointed out the failure to file the vouchers had nothing to do with the equivalency requirement.
Dr. Romo replied:
...I did not have that fiscal responsibility. All of that came out of Las Vegas, I'm in Reno....I'm not really sure if it was a matter of vouchering. Even if it had been vouchered, if we had been able to collect it because of not being substantially equivalent, I'm not sure.
Mr. Romero disagreed and stated the NERC would have been able to collect and explained:
We would have been able, because at that time the substantial equivalency was not an issue. From what I have been able to gather, with this correspondence...is that we did not voucher for the money.
Senator Raggio asked if the budget, as presented, included the anticipated funding from HUD.
Ms. Matteucci responded the budget does not include the anticipated funding.
Mr. Romero added:
The NERC, with the budget as it stands now, is not going to be able to function as it should, or even close as it should. We do need an injection of laws...of modifications. As an example, to allow us to charge for the training we do conduct. Particularly and primarily, for private enterprise, that we could charge...approximately $20 to $40 per participant....The other private consultants are charging from $250 to $900....That we be allowed a computerized system that would allow us to be more productive and be able to maintain proper documentation records. The computerized system, as far as the cost is concerned, is...$44,000.
Senator Raggio asked if current agency staff would be able to use the computer system.
Mr. Romero responded, "Everybody would use it."
Senator Raggio asked if Mr. Romero submitted a request to the budget office for the computerized system.
Mr. Romero responded he has not.
Ms. Matteucci said, "We'd have to take a look at it. You're hearing it at about the same time we are."
Mr. Romero introduced the chairman of the NERC, Mr. Jerry Halloway.
Jerry Halloway, Chairman, Nevada Equal Rights Commission, testified as the discriminatory complaints continue to rise, the budget for the NERC has not increased to meet those needs.
Senator O'Donnell asked what was the amount of funding lost from the HUD.
Mr. Romero responded, "According to HUD, we lost $l00,000."
Senator O'Donnell confirmed the agency has $l00,000 less to administer the program than it did previously.
Mr. Romero concurred and added, "Minus whatever cuts there were. In fact, a couple of weeks ago, I got a call from the budget office saying that I had to eliminate one of the clerical positions
because the money is not there."
Senator O'Donnell asked if the work load was at the same level.
Mr. Romero reiterated the work load has increased dramatically and opined it will continue that upward trend.
Senator O'Donnell asked what would be the possibility of obtaining HUD money in the future.
Mr. Romero said, "It would be excellent, by their words, and the timetable would be as soon as we pass it [equivalency law], as soon as they get it, probably 2 months."
Senator Raggio explained a bill would have to be processed which would change all the housing laws to include the issues referred to by Mr. Marcher. Only at that time would application be permitted for the HUD funding.
Senator O'Donnell asked if the funding would be forthcoming within 60 days of application submittal.
Mr. Romero said, "The contract would be approved within approximately 2 months of your body accepting it. As far as the money itself is concerned, as soon as we voucher for it, we would get it."
Ms. Matteucci offered the following clarification:
Fernando was not instructed to lay off a person. We called him and suggested he transfer a person on that federal account that is having funding problems, into his General Fund account, so as not to exacerbate that cashflow problem potentially within his [federally-funded] budget.
Mr. Romero countered, "Perhaps we're dealing with semantics. The fact is that I would have a vacant position."
Jeanne Botts, Program Analyst, Fiscal Division, interjected to state:
It's my understanding you have to close cases and complete them before you can voucher for the money from either EEOC or HUD....
Mr. Romero disagreed and explained, "Technically, yes, in the long run. But the way it works is we get 50 percent of the budget immediately and then we voucher for the rest."
Mr. Halloway addressed the issue of housing with respect to the HUD grant:
If someone comes in and complains about housing discrimination, we are bound by our own state laws to process that complaint. The issue that is before you...is whether or not we want to be in substantial compliance with the federal regulations so that we can receive additional dollars for processing of those complaints. That is an issue that this body needs to deal with. In terms of the laws we have on the books and whether or not this body sees themselves as a body that would substantially change those laws, either during this session or the next session, to substantially come into compliance with HUD. Without coming into compliance with the HUD regulations, we will still continue to process those complaints, but we will do that in the absence of any federal funds that are available to the State of Nevada. That's the concern we have as a commission that those funds are available to the State of Nevada, and to the extent that they are available to us, we ought to be applying for them, but we are under some restrictions to do that based upon being out of compliance with the HUD regulations.
Mr. Romero stated when he discovered the bill to add the subpoena power had been defeated, he contacted the EEOC and was verbally approved to use their subpoena powers during an investigation by the NERC.
Senator Callister requested the attorney general provide to the committee documentation that the agency already has investigatory subpoena power through the EEOC.
Mr. Romero requested the committee to prepare a bill draft to change the equivalency laws.
Again, Senator Raggio explained to Mr. Romero that type of bill draft would not be initiated by the Senate Committee on Finance. Moreover, it would be initiated by the Senate Committee on Government Affairs.
Senator Coffin suggested Mr. Romero's management assistant travel to Carson City in order to obtain budget guidance on some of the issues the agency is experiencing. He opined, "The problems extend through the predecessor's regime and you are still having difficulty grasping, as I would, if I were appointed to your position, how this thing works."
Mr. Romero replied:
...I'm not having difficulty grasping anything. The problem has been in grasping is that there is no documentation in the office that has allowed me to be able to track anything. In fact, I have requested since I started, from the budget office, from the controller's office, from the treasurer's office, from anybody to come in and conduct an audit of the NERC; and nobody has taken me up on it because there are a number of things missing and you cannot link things together....
Ms. Botts brought up the issue of the aging inventory of cases. She asked Mr. Romero to provide the committee with information based on the number of positions recommended by the Governor, "what would you expect that backlog of cases to look like over the next biennium. If you got one more person, by what amount could that backlog be reduced, or two more people, etc., to provide some guidance."
Senator Raggio declared the budget would be held until the requested information is received.
Supreme Court - Page 75
Exhibit F, Response from Administrative Office of the Courts, (Exhibit F - Original on File in the Research Library) was distributed to the committee.
Ms. Botts directed the committee's attention to page 56 of the exhibit. Originally the courts asked for a General Fund appropriation of $6l,000 and administrative assessment of $l32,000, she narrated. The two sources, totalling $l94,000, are to conduct a study of Nevada's courts in the second year of the biennium. In hearings regarding this budget, the legislature has indicated to the courts they prefer the study be conducted one year earlier. Therefore, the results would be available prior to the start of the l995 session in the event there are recommendations for legislation. What the court is now proposing, she asserted, is to do the study a year earlier, that a General Fund appropriation of $60,000 be made, in the first year of the biennium, as a loan which would be repaid in the second year of the biennium. Chief Justice Rose has contacted the courts in Clark and Washoe counties soliciting donations to assist in paying for the study, she testified.
Senator Raggio asked if that same action was agreed upon by the Assembly Committee on Ways and Means.
Ms. Botts responded in the affirmative. Continuing, she added, in the event the counties may not be able to raise the full amount for the study, there are administrative assessment funds built into the second year to cover the cost of the study in case such a shortfall occurs.
Senator Raggio clarified this was predicated upon an agreement between Chief Justice Rose and Washoe and Clark counties to provide a total of $90,000, "so that's not going to come as a surprise to those courts?"
Ms. Botts responded, "I would hope not." She reiterated in the event the funding is not forthcoming, the administrative assessment fees will be available for that purpose.
Senator Glomb opined the projections by the courts were lower than originally anticipated and there may not be sufficient funding from the assessments to fund the basic budget, much less the study.
Ms. Botts responded:
The major problem with the assessments are in the current year, they are running lower than projected. The court is still hoping they will be all right in the coming 2 years. One of the problems they discovered is some of the judges are not assessing those amounts. I think they're going to try to work through their educational and training program to get the judges to assess those amounts, collect them and process them properly.
She reported the Assembly Committee on Ways and Means did not reduce the court's revenue estimates. She pointed out the revenue estimates are very close to what the budget office has estimated. She reported the Assembly Committee on Ways and Means requested the courts to provide an update on the assessments to the Interim Finance Committee within a 6-month period.
Ms. Botts distributed Exhibit G, Assembly Ways and Means Closing Action, to the committee and testified while referencing that document. Drawing the committee's attention to the FY 95 column, titled Earlier Start of Court System Study, a negative figure of $l34,000 indicates in the Governor's Executive Budget the study was recommended in the second year at $l94,000. She said, "So we're reducing it [the cost of the study] by $l34,000 to $60,000, so they still have $60,000 of expenditure authority in the second year, should the locals not be able to provide enough funding."
Senator Glomb queried whether there are letters of agreement on file from Clark and Washoe counties documenting the agreement.
Ms. Botts responded she did not know. Continuing, Ms. Botts explained in l989 there was an attempt to make all attorney general salaries equal across state government. She pointed out substantial increases were provided to deputy attorney general positions in the attorney general's office, but not to the Supreme Court. She opined:
They still aren't going to be equal to the deputy attorney general under what they are proposing. But there will be some individuals who are currently paid as Staff Attorney III...that would get a l0 percent increase in those staff attorney III pay levels. Then, because they are now also eligible to become Staff Attorney IV, they would get another increase. So we're talking about a 20 percent increase for some individuals. But it's still less, by about $3,800...than a deputy attorney general.
Due to time constraints, Senator Raggio adjourned the meeting at l0:00 a.m.
RESPECTFULLY SUBMITTED:
Dee Crawford,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
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Senate Committee on Finance
May 7, 1993
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