MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
June 29, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:20 a.m., on Tuesday, June 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:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Dee Crawford, Committee Secretary
OTHERS PRESENT:
Mike Griffin, Deputy Commissioner, Department of Insurance
Garth Dull, Director, Department of Transportation
Bob Gagnier, Executive Director, State of Nevada Employees Association
Jeanne Greene, Supervisor, Field Services Division, Department of Personnel
Martha Gould, Director, Washoe County Library
Ashley Hall, Representing Las Vegas-Clark County Library District
Robert Daugherty, Ph.D., Dean, School of Medicine, University and Community College System of Nevada
Terry Rankin, Commissioner, Department of Insurance
Senator Raggio acknowledged Exhibit C, letter from Terry Rankin, Commissioner, Department of Insurance, stating an inequity exists in the salaries designated for the positions of insurance fraud investigator. Exhibit C points out the investigators for the insurance fraud unit, who are employees of the attorney general, receive $8,000 less in pay than similar investigators within the Office of the Attorney General. As a result, a high turnover rate has been experienced in the department.
Bill Draft Request (BDR) S-2179: Establishes maximum allowed salaries for employees in unclassified service of state and for certain other employees in classified service of state.
Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, distributed to the committee Exhibit D, BDR S-2179, Unclassified Pay Bill, (Exhibit D - Original on File in the Research Library). He noted this measure provides for the maximum allowable salaries for the unclassified positions of the state, and explained the bill was developed in two parts. Section one continues the maximum salary levels established by the l99l legislature through October l, l993, when reorganization takes effect. Included in section one are the positions added to the budget, effective July l, l993, by the money committees. These include positions for the telemarketing and workers' compensation fraud units in the Office of the Attorney General as well as other positions added, or salaries changed, by joint action of the money committees.
Continuing, Mr. Miles said section two establishes the maximum salary levels for unclassified employees effective October l, l993. These salary levels are nearly all set at the existing salary levels with no increase. Most positions for which a different salary has been included in the bill are those recommended by the Governor. These changes include the establishment of a consistent salary level for all major department executives of $80,950 under the reorganization plan. Other department executive positions were established at $68,000 each (Departments of Museums, Library and Arts, Information Services and Personnel). The two levels of salary for department executives accommodates the differences in scope of responsibility and size of the various agencies. Also recommended in the Governor's Executive Budget were two equity adjustments in the secretary of state's office to align those positions with those of other constitutional officers. The only changes to the Governor's proposed salaries were for the executive secretary of the Nevada Athletic Commission, insurance fraud investigators and the new science and technology advisor. The salary of the superintendent of public instruction was adjusted to the new major department level salary since the State Department of Education, under reorganization, would remain as an independent department.
Senator Coffin agreed adjustments should be made to the salaries of the insurance fraud investigators to the equivalent level of those holding similar responsibilities.
Mike Griffin, Deputy Commissioner, Department of Insurance, pointed out the assessment to increase the insurance fraud investigators would not impact the General Fund.
Senator Raggio asked if the issue of inequity in pay for the same duties and functions was causing a personnel problem within the division.
Mr. Griffin responded in the affirmative and explained there has been a high turnover rate due to the inequity issue.
Senator Jacobsen opined approval of the request would cause other agencies to request salary increases.
Garth Dull, Director, Department of Transportation, explained a salary compaction problem will occur in his agency when the state occupational study has been completed. He pointed out the deputy director will be earning the same salary as his subordinate.
Senator O'Donnell asked if adjustments could be made in the deputy director position to provide a more equitable salary distinction.
Mr. Miles reminded the committee it has received specific information from two or three other departments citing compaction problems. "This has always been a situation that has occurred over the years....sometimes the legislature has tried to remove the compaction and sometimes they are unable to," he remarked.
Senator O'Donnell asked if the Department of Transportation salaries were paid from the highway fund account.
Mr. Dull responded in the affirmative.
Mr. Miles pointed out the same salary compaction problem exists throughout the Department of Taxation, Department of Motor Vehicles and Public Safety, Department of Transportation and the Department of Insurance.
Senator Glomb suggested staff review the number of impacted unclassified positions.
Senator Raggio declared:
The problem is we would be creating more havoc than solving problems if we start looking at compaction problems at this point in time, according to staff. We have limited time to process the bill, it has to be printed. I suppose we could direct these departments to report during the interim on any of these compaction problems and we'll deal with them in the next session....
Senator Callister opined the insurance fraud investigator positions were an exception to the norm in that the compaction problem affected positions within the same classification at a difference of $8,000.
Senator Raggio asked if there was a consensus by the committee to adjust the four insurance fraud investigator positions, and supervisor, in the Department of Insurance.
Senators Coffin, Glomb and Callister supported the adjustment necessary to bring the positions to parity.
Senator O'Donnell suggested to increase the deputy director of the Department of Transportation salary by 2 percent in an effort to resolve that compaction issue.
Senator Raggio pointed out, "Then you have to do it for some of the other departments...."
Senator Glomb felt strongly that inequitable salary issues exist within many state agencies and urged "it needs to be addressed once and for all."
Senator Raggio concluded:
...I think Senator Glomb is right. If the study, which we have made a priority from this committee on the whole personnel system, does go forward, this is one of the issues that could be addressed, that is the compaction problems that result from occupational studies.
Senator Callister opined the insurance fraud investigator positions were outside the compaction problem and could be addressed separately.
Senator Jacobsen declared:
...In years past, we always had a subcommittee that...went through these salaries....As of yesterday, we get this thing dumped on us and no matter what we do, we're going to be the bad guys and the [Department of] Administration is going to look great.
Senator Raggio said, "We're following exactly what the [Department of] Administration has recommended."
Senator Jacobsen countered, "I know and I think that's where our failure is."
Senator Raggio said:
We're following the precept that the administration requested these increases, particularly for the new department, and that there is no cost-of-living increase across the state. That's consistent.
Senator Rawson joined the hearing at 8:45 a.m.
Senator Raggio recessed the hearing at 8:46 a.m. and reconvened the hearing at 9:l0 a.m.
Senator Raggio polled the committee regarding the equity adjustment in the unclassified pay bill for the Department of Insurance only. Senators Callister, Coffin, Rawson and Raggio were in support of increasing the salaries of the insurance fraud investigator positions, and supervisor, in the Department of Insurance.
SENATOR CALLISTER MOVED TO INTRODUCE AND AMEND BDR S-2179, UNCLASSIFIED PAY BILL, WITH A RECOMMENDATION FOR DO PASS.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR JACOBSEN VOTED NO. SENATOR GLOMB WAS ABSENT FOR THE VOTE.)
* * * * *
Jeanne Greene, Supervisor, Field Services Division, Department of Personnel, was solicited to testify regarding the termination notices sent to prison honor camp employees. She informed the committee she made contact with Roy Trenoweth, state forester, and he indicated the layoff notices had not been rescinded. He cited the reason the appropriations act was not in balance and "they wanted to make sure the funding was there," she recited. Ms. Greene offered the information that Mr. Trenoweth has transmitted that fact to the affected employees.
Senator Raggio opened discussion on Assembly Bill 723.
ASSEMBLY BILL (A.B.) 723: Revises provisions regarding group insurance for public employees.
Mr. Gagnier testified A.B. 723, in its original form, was accompanied by a sizeable fiscal note which provided that the Committee on Benefits would study the non-state enrollees in the group health insurance plan for a l2-months duration. He said at the end of the l2-month period, if the group studied was "no more than 5 percent costlier than state employees, then from that point forward, everybody will pay the same and there will not be a separate rating unit."
SENATOR RAWSON MOVED TO RE-REFER A.B. 723 TO THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Raggio closed the hearing on A.B. 723 and opened the hearing on Senate Bill 93.
SENATE BILL (S.B.) 93: Makes various changes and requires certain studies relating to health care.
SENATOR RAWSON MOVED TO RE-REFER S.B. 93 BACK TO THE GENERAL FILE WITHOUT RECOMMENDATION.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Raggio closed the hearing on S.B. 93 and opened the hearing on Senate Bill 300.
SENATE BILL (S.B.) 300:Directs state librarian to establish pilot project to provide grants to certain public libraries for purchase of books and library materials.
Martha Gould, Director, Washoe County Library, testified in support of the measure. The bill establishes a formula for support by the state for public libraries, she explained.
Senator Raggio asked what amount of money did the supporters envision would be helpful to this cause.
Ms. Gould answered between $75,000 and $l00,000.
Ashley Hall, Representing Las Vegas-Clark County Library District, clarified, "The association indicated the process was the important thing, and they indicated the minimum amount they would accept would be $l0,000."
Ms. Gould proclaimed, "It's not worth the paperwork for that amount of money....However, I would go with whatever the...association suggested; unfortunately communication fell down because that was not communicated to me."
Senator Raggio closed the hearing on S.B. 300, opened the hearing on Senate Bill 559, and turned over the gavel to Senator Rawson.
SENATE BILL (S.B.) 559:Makes changes relating to legislative committee on health care and provides for establishment of coordinated care program for recipients of Medicaid.
Senator Rawson distributed Exhibit E, memorandum dated June 28, 1993, regarding Medicaid managed care, to the committee. He explained the Medicaid budget did not include any savings attributed to a comprehensive managed care program. The Department of Human Resources, in testimony before the committee, indicated they would pursue a comprehensive managed care program during the l993-l995 biennium. According to their testimony, any savings to be accrued from a managed care program would need to be applied to underfunded shortfalls in Medicaid's prior year medical categories.
It was pointed out the capping language in the Appropriations Act has been relaxed due to the potential reduction in federal matching participation. A contingency fund has not been set aside if this federal action occurs. Any savings which theoretically could be achieved through managed care, if implemented during the biennium, should be retained in the Medicaid budget to offset the potential costs of reduced federal financial participation. In summary, Senator Rawson pointed out the committee action in closing the Medicaid budget did not include a recommendation pertaining to Medicaid managed care.
Senator Rawson reviewed Amendment No. l240 to S.B. 559 with the committee.
SENATOR O'DONNELL MOVED TO AMEND AND DO PASS S.B. 559.
SENATOR JACOBSEN SECONDED THE MOTION.
Although Senator Callister supported S.B. 559, he requested to delay voting on the issue until later in the day to allow sufficient time to discuss the measure with various concerned parties.
SENATOR O'DONNELL WITHDREW THE MOTION.
SENATOR JACOBSEN WITHDREW THE SECOND.
* * * * *
Senator Rawson recessed the meeting at 9:45 a.m. Senator Raggio reconvened the meeting at 5:00 p.m.
ASSEMBLY BILL (A.B.) 747: Increases certain fees imposed by and makes appropriation to real estate division of department of commerce.
SENATOR RAWSON MOVED TO DO PASS A.B. 747.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL ABSTAINED FROM THE VOTE. SENATOR CALLISTER WAS ABSENT FOR THE VOTE.)
* * * * *
Robert Daugherty, Ph.D., Dean, School of Medicine, University and Community College System of Nevada, testified on the following proposal:
...We are in the process of applying for a grant to the Robert Wood Johnson Foundation for [a] $2.5 million award to the school. This grant is called the Generalis Physician Initiative. There are l8 medical schools picked to submit an application to increase the number of family physicians graduating from medical school....Twelve of the l8 medical schools will be picked, and we think we have a pretty good chance. It would be helpful to us if we had a letter of intent to approach the Interim Finance Committee for $200,000 as matching funds if this grant is awarded to the school. The money from the state would be used to reimburse the physicians in the state...who take students into their offices....
Mr. Miles explained:
If we were inclined to do this there are a couple of requirements. One is that whoever would be getting the Interim Finance Committee [IFC] allocation has an appropriation, there has to be an appropriation to that particular agency. I think in this case, there is. Secondarily, any request to IFC for this kind of money has to be first approved by the [State] Board of Examiners....I guess you could express your intent they could return to IFC....
SENATOR RAWSON MADE THE MOTION THAT SUBJECT TO A GRANT AWARD TO THE MEDICAL SCHOOL FOR THE GENERALIS PHYSICIAN INITIATIVE, WITH CONCURRENCE BY THE ASSEMBLY COMMITTEE ON WAYS AND MEANS, AND RECOMMENDATION BY THE STATE BOARD OF EXAMINERS, A LETTER OF INTENT WILL BE PROVIDED TO THE MEDICAL SCHOOL TO APPEAR BEFORE THE INTERIM FINANCE COMMITTEE TO REQUEST $200,000 FOR MATCHING FUNDS.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
ASSEMBLY BILL (A.B.) 569: Makes various changes relating to regulation of insurance.
Terry Rankin, Commissioner, Department of Insurance, provided an overview of the changes to the bill as indicated in the first reprint of A.B. 569.
Senator Coffin questioned why section ll, page 9, addressing businesses being accessible to the public, was placed in the bill.
Ms. Rankin explained:
The problem we were trying to get to, particularly in the Medicare supplement area, is we need to be able to examine their records and clearly have them retain the records in a place where our examiners can go.
Senator Coffin pointed out:
.....When you have a home-use permit to operate a...business out of the home, the public is usually not allowed to come to that place of business....
Ms. Rankin contended the intent was to clarify the records retention issue. She said, "If we need to correct that problem because of a business license problem, then that is something we can look at." She suggested the regulations be changed to "define a place of business accessible to the public."
SENATOR COFFIN MOVED TO DO PASS A.B. 569.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Raggio closed the hearing on A.B. 569 and opened the hearing on Senate Bill 493.
SENATE BILL (S.B.) 493:Increases fee for purchase of tire to support program to use recycled tires in highway construction.
SENATOR RAWSON MOVED TO DO PASS S.B. 493.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS COFFIN AND O'DONNELL VOTED NO.)
* * * * *
There being no further business to come before the committee, Senator Raggio adjourned the hearing at 5:30 p.m.
RESPECTFULLY SUBMITTED:
Dee Crawford,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
June 29, 1993
Page 1