The meeting of the Joint Hearing of the Assembly Ways and Means and Senate Finance Subcommittee on General Government was called to order at
8:15 a.m., on Tuesday, March 23, 1999. Chairwoman Vonne Chowning presided in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

SENATE SUBCOMMITTEE MEMBERS PRESENT:

SENATE SUBCOMMITTEE MEMBERS ABSENT:

Senator Joseph Neal

ASSEMBLY SUBCOMMITTEE MEMBERS PRESENT:

Mrs. Vonne Chowning, Chairwoman

Mr. Bob Beers

Mrs. Marcia de Braga

Ms. Chris Giunchigliani

Mr. David Goldwater

ASSEMBLY SUBCOMMITTEE MEMBERS ABSENT:

None

STAFF MEMBERS PRESENT:

Chairwoman Chowning began by remarking Senator O’Donnell would be absent from the meeting until 9:30 a.m. Until that time she would chair the meeting. Consequently the Senate Finance subcommittee convened as a subcommittee of the Assembly Ways and Means and Senate Finance Joint Subcommittee on General Government.

Chairwoman Chowning opened the hearing to discussion on the budget accounts within the Department of Business and Industry.

Roger Bremner, Administrator for DIR, introduced Mary Keating, Administrative Services Officer for DIR. He explained his presentation would focus on the four separate budget accounts, which comprised the division’s budget.

Mr. Bremner explained the mission of DIR was to ensure the health and safety of workers within the state of Nevada and to assist employers in identifying and eliminating workplace hazards. The division provided inspection and safety training for all working mines in the state. Should a worker become injured on the job in the state of Nevada, Mr. Bremner submitted DIR ensured the worker received all of the benefits to which they were legally entitled.

Mr. Bremner then noted the subcommittee had partially covered Budget Account 4680 in a previous hearing.

Chairwoman Chowning first requested Mr. Bremner explain performance indicator number one, which measured the division’s effectiveness in reducing accidents in Nevada’s workforce. She observed the figures illustrated the positive outcomes of the division’s efforts.

Mary Keating answered the division had provided statistics from 1996 to 2001. She maintained the "lost-time claims to average workforce" figures would continue to decline with the advent of the Three-Way Worker’s Compensation Insurance (3-Way) program. Moreover, she explained performance indicator number one encompassed all of the changes that had been requested for the upcoming biennium. She felt the figures not only depicted the decline in the number of on-the-job injuries, but also the degree to which the employers’ financial burden had been alleviated.

Chairwoman Chowning then remarked the "lost-time claims to average workforce average" was 3.38 percent in 1992 whereas the percentage for 1997 was 1.73. She felt the comparison of those figures spoke to the division’s success in reducing on-the-job accidents.

Ms. Keating concurred and mentioned the comparison of the 1992 and 1997 "lost-time claims to average workforce" statistics depicted a 50 percent reduction. When those figures were multiplied by the 1992 price the division had paid for worker’s compensation claim costs, she concluded that employers had saved over $700 million dollars.

The Chair commented the division’s accomplishments should receive more attention from the press because she believed $700 million dollars in savings to employers was extremely noteworthy. Furthermore, she thought the division’s projected percentage for 2001 of 1.54, which was a .25 percent reduction from 1997, would also realize a significant amount of savings.

Ms. Keating then reminded the Chair that in order to calculate the division’s overall savings from those projections the number of claims should be multiplied by 1992 real prices. Because costs in 1992 were much more inflated than at present, she agreed the amount of savings realized in that area would be significant. However, she pointed out the savings would not exist in the form of in-pocket savings, rather they would appear as a decrease in the expenses employers paid out. Finally, Ms. Keating stressed that DIR could not assume credit for the realization of savings which was accomplished through collaboration of all workers compensation programs.

Chairwoman Chowning remarked that if employers did not have to spend that money then the cost of doing business was less. She recognized the other components and partners to the division’s success.

Mr. Beers asked if part of the savings would support the estimated $1 billion unfunded liability noted in the State Industrial Insurance System’s last audit. He wondered if the savings would be used to reduce insurance premiums.

Ms. Keating explained those dollars were not at all related to the premium tax.

The Chair requested Mr. Bremner to update subcommittee members on the status of the new 3-Way insurance program and the development of both a "proof of coverage (POC)" and a claims indexing system.

Mr. Bremner explained DIR was in the process of preparing three separate programs for implementation as part of the division’s transition into a 3-Way insurance program. First, a POC system was scheduled for operation by July 01, 1999. Mr. Bremner elaborated the POC system was being developed in conjunction with National Council on Compensation Insurance (NCCI). The POC system would allow the division to match insurers with employers and to determine which employers had yet to purchase coverage for their employees. Mr. Bremner held the division needed to follow the flow of paperwork so that claims handling could be managed with a minimal amount of displacement.

Second, Mr. Bremner reported a claims indexing system was already in place, however, he continued to explain the current system was inadequate given the influx of new private insurance carriers. Therefore, the development of a new claims indexing system served as a means with which the division could prevent fraudulent claims from being submitted. Once in place, individuals who were authorized to review claims could then determine if an injured worker had multiple claims in the system at the same time.

Next, Mr. Bremner mentioned the division had scheduled NCCI to serve as the data collection agency for the claims indexing system as well. But because the system was pared down to the point where it was no longer economically feasible for NCCI to provide that service, the division had decided to retain data collection as an internal responsibility. As a result, Mr. Bremner noted the division had submitted decision unit E-128, which requested monies for the operation of the claims indexing system. He believed the division could conduct the claims indexing system in conjunction with the Department of Information Technology (DoIT) at the cost of $30,000 to $40,000. He averred that the cost was a substantial reduction from the original cost that had been estimated for an information indexing system.

The Chair asked when the claims indexing system would be operational. Mr. Bremner replied part of the system would be ready by
July 01, 1999, but he expected the entire system to be operational by September 01, 1999. Meanwhile, he stated the division would have to continue using the old claims indexing system, despite its inadequacies, in order to meet statutory requirements.

The Chair next inquired if POC regulations had been developed. Mr. Bremner replied POC regulations had been drafted for the new POC system, however regulations for the new claims indexing system would be temporary regulations specific to the continuation of the old system until the new system was completely online.

Chairwoman Chowning questioned if the temporary regulations would be ready by July 01, 1999. Mr. Bremner replied affirmatively.

Senator Jacobsen asked if DoIT had been able to meet the division’s demands on schedule. Mr. Bremner answered DoIT had been extremely cooperative on the project and had assigned a full-time position to oversee its development. In addition, he reminded subcommittee members that the Interim Finance Committee (IFC) had authorized the division to hire a full-time position that would be supervised by DoIT.

The Chair requested Perry Comeaux, Director of Department Administration, to speak to the issue of the State Industrial Insurance system’s unfunded liability. She articulated the Budget Office had been requested to calculate the amount of the insurance premium tax that would be deposited under 3-Way. She asked Mr. Comeaux what problems the Budget Office had encountered while making that calculation and wondered if legislation was needed to rectify any problems related to the unfunded liability.

Mr. Comeaux answered the Budget Office was still in the process of calculating the insurance premium tax. He thought the difficulty existed because the Department of Taxation and DIR both participated in making the final decision concerning the assessment. Currently, Mr. Comeaux disclosed the Department of Taxation was reviewing the issue and he was unsure if legislation would be required. Initially, Mr. Comeaux admitted he did not feel ancillary legislation would be needed, however he admitted that recent differences of opinion between the Department of Taxation’s attorney might require it. Mr. Comeaux thought the Budget Office would be able to provide a definite answer in regard to the need for legislation the following day.

Chairwoman Chowning stated the subcommittee would postpone the issue until the necessary legislation was drafted. She then referred to the organizational chart, which had been distributed to staff, and asked Mr. Bremner to explain DIR’s proposed organizational structure changes.

Ms. Keating stated an organizational chart reflecting the future internal structure of the Industrial Insurance Regulation Section (IIRS) of DIR had been distributed to fiscal staff. Effective July 01, 1999, the new structure eliminated positions number 6 and number 11. Aside from those positions, Ms. Keating maintained the remaining positions were absolutely critical to the effective operation of the 3-Way insurance program. Furthermore, she related the section had been organized into specific functionalities and was staffed at levels she believed were sufficient to complete the work required.

The Chair questioned whether or not the positions requested were absolutely necessary. Ms. Keating replied the agency’s reorganization was final and the chart expressed the agency’s basic needs. Chairwoman Chowning then asked where the positions being eliminated were located. Ms. Keating replied one of the positions had been located in the Carson City office of the Manager of Research and Analysis. The division had hoped to transfer part of the IIRS section in Carson City to Reno, where a majority of the section’s constituent population resided, in order to manage constituent inquiries and information requests.

Ms. Keating informed subcommittee members the second position existed in Information Customer Service, located in Carson City.

Chairwoman Chowning then queried if employees in the Las Vegas and Reno offices could manage that individual’s duties. Ms. Keating stated the Las Vegas and Reno offices were the major employment centers for IIRS and she felt they could easily assume the responsibilities, which would have been performed by position requested for Carson City.

Subcommittee members did not present any additional questions concerning the budget account and so the Chair accordingly opened discussion on the department’s next budget account.

Mr. Bremner commenced with a description of the new positions recommended in The Executive Budget. First, he cited the M-200 decision unit that requested funding for one safety supervisor, four Safety Specialist III positions, four Industrial Hygienist III positions, and one Program Assistant II position. Mr. Bremner explained six of those positions had been allocated for FY 2000 and four more positions were requested for FY 2001. With the associated operating costs and special equipment, Mr. Bremner thought the ten positions were critical to meeting the growth of Nevada’s safety and health needs. Mr. Bremner noted much of the growth was attributed to the growth in construction projects in the state.

Chairwoman Chowning requested Mr. Bremner to provide subcommittee members with additional performance indicators so that the outcome measures could be evaluated. She also wondered how the department had determined the need for the new positions. Additionally, were there additional boilers or construction sites that warranted the expansion of the agency’s operations? Along the same line, the Chair asked how M-201 had been assessed in terms of the frequency of inspections required for each construction project.

Ms. Keating responded that in order to determine the level of the agency’s staffing needs they had evaluated activity in the marketplace. For instance, 122 construction projects in excess of $10 million each had been recently initiated in Las Vegas. In northern Nevada, 55 projects in excess of $5 million had been undertaken. Furthermore, Ms. Keating disclosed there were numerous other projects under those monetary amounts, which had also begun.

Then Ms. Keating explained the goal of the agency was to target manufacturing, construction, and hotel/ casino industries in addition to other minor industries within the state. She estimated the Safety Specialist positions would complete 90 inspections per year, while the Industrial Hygienist would be able to perform 60 inspections per year. The two specialties performed distinct functions, yet they both required a substantive amount of Occupational Safety and Health Administration (OSHA) training. Thus, the department had designed the M-200 staffing requests to match the workload statistics in the marketplace.

Next, Ms. Keating addressed M-201, for the mechanical unit that inspected the boiler elevator pressure vessels, escalators, and dumbwaiters. She explained certain items were inspected annually while others were inspected quarterly. Because it was a high-risk area that affected the safety of the general public, Ms. Keating stressed the importance of thorough and continual elevator inspections. The agency required a greater amount of time to complete elevator inspections because of the growth of properties in Nevada. Thus Ms. Keating concluded the staffing requests in The Executive Budget were necessary to conduct all of those activities.

Ms. Keating expected 745 boiler and elevator inspections would be completed by each new position. She admitted the division was slightly behind in their elevator inspection schedule, but they expected to be caught up in the near future.

Ms. Giunchigliani wondered if boiler and elevators were inspected in schools. As Ms. Keating did not have that information present with her at the time, she said she would submit it to staff at a later date. Ms. Giunchigliani then asked if a licensed individual installed the elevators. Mr. Bremner replied affirmatively.

Next, Chairwoman Chowning asked Ms. Keating to calculate the percentages for performance indicator number 5. Ms. Keating replied she would work with staff to complete those statistics. Ms. Keating mentioned the division administered a Bureau of Labor Statistics grant for Nevada and she had been working with staff to provide outcome measures which tracked factors such as the number of injuries per 1,000 workers. Those performance indicators would be available for budget presentations in the following biennium.

The Chair next observed some of the performance measures indicated the divisions achievements had been greater than expected. However, the number of health and safety inspections that had been performed was less than what the agency had projected. Furthermore she thought the division fell short of meeting its projections in other areas as well. She wondered why the division’s projections for the upcoming biennium were set at the same levels.

Ms. Keating replied the number of appeals and claims that were filed drove the OSHA Review Board projections. Even though the division’s performance in this area did not meet the expected level, she remained positive about the division’s future success.

In regard to the other unrealized performance indicators, Ms. Keating explained the division’s lack of performance could be attributed to alterations made to its training programs and to staff turnover. In spite of it its failures, she believed the division would be able to realize those projections in the future.

Chairwoman Chowning expressed confusion concerning the actual figures and division projections cited in the performance indicator for the number of discrimination cases that had been filed. She wanted to know how many of the 30 cases filed in 1998 had been resolved.

Again, Ms. Keating thought that particular performance indicator was a positive indicator. She explained it was driven by the number of parties who had filed complaints. She then reported all of the cases filed had already been resolved or were in the process of being resolved.

Senator Jacobsen wondered if the division had experienced difficulty with the transition from oil to gas boilers. Mr. Bremner deferred the response to Danny Evans, Chief Administrative Officer for OSHA enforcement. Senator Jacobsen added he was concerned that the older school facilities, which had already been converted from wood and coal burning to oil, and which were currently being converted to gas, might pose safety problems in the older buildings.

Mr. Evans explained the division did not expect any difficulty while converting boilers from oil to gas operation. Regardless of the type of boiler, he said the inspectors still had to conduct the same type of internal inspections to ensure that the boiler was up to code. Inspectors also evaluated the thickness of the boiler shell in order to protect the shell from erosion caused by fuel type changes.

Senator Jacobsen realized the newer boiler installations were equipped to handle either type of fuel depending upon supply. He thought rural areas might not exhibit such flexibility and thus were not as safe as the newer installations.

Mr. Evans disclosed that where boilers had been installed in classrooms, some school officials had subsequently decided to install refrigeration units in the same room. He contended the co-existence of the two units in the same area was not compatible. Accordingly the division was in the process of identifying those situations and creating solutions to the problem in collaboration with local school districts. Mr. Evans mentioned a situation at Western Nevada Community College where OSHES had to retrofit a boiler to make it compatible with the building’s cooling system.

Ms. Giunchigliani asked if OSHES was provided with rehabilitation or modernization plans so they could be reviewed prior to construction or remodel projects.

Mr. Evans admitted part of the problem had been caused by the fact that the agency did not have access to any modernization plans. He testified an OSHES permit was required after the boiler’s initial installation and the plans were reviewed at that time. However, after the boiler’s installation and certification, the division had no authority or supervision over the installation of cooling systems near to the boiler because a notification of change requirement was not in place. Mr. Evans then stated the agency had been able to catch a few plans that included the installation of both refrigeration units and boilers, however it was not a common occurrence.

Ms. Giunchigliani asked if legislation or a letter of intent in budget closings requiring school districts to notify the agency of those types of changes should be drafted.

Mr. Evans responded OSHES had discussed the issue with school districts but had not yet arrived at a conclusion. Ms. Giunchigliani postulated school districts were resistant because the certification process would slow the progress of the project in question. Mr. Evans answered school districts were concerned with the associated costs of separating the boiler and refrigeration units or retrofitting the boiler.

Ms. Giunchigliani was surprised the issue had not been addressed in the statewide study of the budgets for various school construction projects. The costs associated with boiler maintenance had not been included in the study’s calculation of over $1 billion in deferred maintenance costs for Nevada’s schools. She suggested that Mr. Bremner call attention to the issue at an Assembly Ways and Means Committee Meeting on March 29, 1999, where Assembly Bill 597, which dealt with school construction, would be discussed. Additionally, she mentioned Assembly Bill 598, which also dealt with school construction, would be addressed in the Committee on Government Affairs.

Senator Jacobsen asked if the state fire marshal had ever reported to OSHES concerning discrepancies in heating systems. Mr. Bremner disclosed OSHES received reports from many groups, including the state fire marshal and the news media. Senator Jacobsen worried children might be endangered if boilers were not properly inspected. He asked if there had been any boiler meltdowns recently.

Mr. Bremner responded a boiler meltdown had occurred at the MGM Hotel and Casino in Las Vegas, but he could not remember the cause. There was also a boiler meltdown at a granary in Fallon. Mr. Bremner attributed the meltdown to improper usage. He disclosed the boiler operator did not speak English and could not read the operating instructions.

Chairwoman Chowning relayed her support for legislation that directed the Clark Commission to require employers to provide operating instructions in Spanish as well as English. If a non-English speaking person was hired, instructions ought to be provided in the employee’s native language.

Ms. Giunchigliani informed the Chair that the Clark Commission legislation had been narrowed to specifically address only the manufacturing of explosives. She wondered if employers were fined for failing to provide readable instructions and proper training to employees.

In reply, Mr. Bremner stated employers were often issued citations for failing to properly train employees. Ms. Giunchigliani wondered if that included penalizing employers who failed to provide instruction in the employee’s native language. Mr. Bremner could not provide an answer.

Ms. Giunchigliani opined employees were unfairly blamed for such accidents, when in fact employers were the responsible party who had failed to provide training or to explain the circumstances in a way that the employee could understand. She hoped statutes were comprehensive enough and that the agency was utilizing every means available to prevent such accidents from occurring.

The Chair agreed with Ms. Giunchigliani, stating statutes should be examined regarding their usefulness in such situations. She thought the costs to the employer would not be on-going costs because after an interpreter explained the information in the employee’s native tongue, they would no longer be needed. She stressed the issue should be scrutinized closely.

Next, Mr. Beers requested a brief narrative in regard to OSHES conversion from FoxPro to Oracle on the mechanical licensing system. Ms. Keating responded OSHES was working with DoIT to receive a bid for the conversion project. DIR was converting to the Oracle system in order to harmonize the department’s mechanical licensing system with the POC and the claims indexing systems. She commented that since the federal government had converted to the Oracle system, DIRs conversion would be compatible.

Chairwoman Chowning returned to the M-200 decision unit and directed Mr. Bremner to provide a written response to the subcommittee’s questions. She desired to understand what base figures had been used to justify the position requests so that they could be incorporated into the performance indicators.

Next, the Chair addressed decision units E-710 and E-720. In regard to E-710, she asked Ms. Keating to explain OSHES replacement policy for equipment and software upgrades. She also directed the division to prepare a cost breakdown for the equipment and wondered why 12 new personal computers needed to be purchased in E-720.

Ms. Keating explained E-710 requested funds for the replacement of equipment used by various field officers. The division’s replacement policy ranged from 2 years to 4 years depending on the item. Replacement schedules were available and could be provided to staff. She pointed out that the Clean Air Act required OSHES to convert its vehicle fleet in Las Vegas to compressed natural gas (CNG). Thus, as new vehicles were purchased the conversion cost to the division was$5,000 to $6,000 per vehicle.

In regard to the division’s software replacement policy, Ms. Keating stated the division planned to upgrade its software in the second year of the biennium. Currently, OSHES used software that had been on the shelf for 3 or 4 years. Ms. Keating stated the division’s goal was to upgrade the computer system so that it was Windows 98 and Microsoft Word compatible.

Next, Ms. Keating focused on E-720, which requested computer equipment for the mechanical section of the division. She explained the mechanical section was the one area which the federal grant would not support. Most of the agency’s computer equipment had been funded through federal grants and residual funding. Ms. Keating explained the individuals within the mechanical unit either did not have computer equipment or if they did, the computer was incompatible with the rest of the divisions computer system. Therefore, E-720 attempted to bring all of the division’s computers up to speed. Aside from computer equipment, Ms. Keating related E-720 also requested funding for noise and air quality monitors.

The Chair clarified the agency planned to purchase six new vehicles and five of those vehicles would utilize CNG. Ms. Keating responded affirmatively. She explained 50 percent of the Las Vegas fleet was required to convert to CNG technology. Thus as vehicles were replaced, the agency was compelled to adhere to the new clean air standards.

Chairwoman Chowning noted several businesses in Las Vegas utilized the liquid petroleum gas instead of CNG, as it was less expensive. Liquid petroleum gas cost only $2,000 per vehicle for the conversion, whereas CNG cost $5,000 to $6,000 per vehicle.

Ms. Keating responded the purchasing section developed the purchasing package and assessed the cost of alternatives for the new vehicles. Although she was unsure about the cost savings for the liquid petroleum fuel, she promised to investigate the possibility of using the fuel alternative should it meet Clean Air standards.

Chairwoman Chowning mentioned the Assembly Committee on Transportation had discussed a bill concerning liquid petroleum fuel. Information had been presented that had indicated liquid petroleum fuel was a cleaner burning fuel than CNG. She wondered how clean each of those fuel alternatives was because she had received conflicting information. The Chair then suggested that the division inspect their vehicles to determine if the clean air mandate from the Department of Energy was factual. Ms. Keating did not feel that the division could accurately determine which fuel was cleaner burning.

Next, Mr. Beers referred to the 66 software upgrades and asked if they were upgraded Office Productivity Suites. Ms. Keating answered affirmatively. Mr. Beers then asked the division to provide a report indicating the division planned to purchase software and equipment that was mutually compatible. Ms. Keating responded OSHES was working with DoIT to ensure that software and equipment purchases would be compatible.

Mr. Bremner directed the subcommittee to decision unit M-200, which recommended the addition of one Safety Specialist III and one Program Assistant II position, both in FY 2000. He contended the two positions were necessary in order to meet Nevada’s growth in training needs. Next, Mr. Bremner cited decision unit M-201, which reflected the additional rental costs for the new Las Vegas office.

Moving to the enhancement units, Mr. Bremner called attention to decision unit E-125, which requested funds to cover medical and dental exams as required by OSHA. Also, decision unit E-127 recommended increasing funding for the multimedia informational safety program, which produced material, likened to the brochure Mr. Bremner had presented to subcommittee members (Exhibit C1-C3 on file at the LCB Research Library).

The Chair complimented Mr. Bremner on the design of the division’s safety information pamphlets. She then asked if SCATS targeted all businesses. Ms. Keating responded the agency targeted only small businesses, however the safety brochures were distributed to any interested party.

The Chair questioned who printed the brochures. Ms. Keating answered SCATS used the State Printing Office, but when there were projects the state printer could not handle, the division used a private printer.

Chairwoman Chowning acknowledged the latest media safety program and stated it was an effective tool in promoting workplace safety. She wondered if SCATS had a benchmark with which to measure the success of the safety program. She also asked how many printed brochures, television, and radio spots the division expected to produce in the next biennium and wondered if SCATS worked with the broadcasters association to ensure proper expenditure of the division’s funds.

Ms. Keating replied the multimedia campaign went out to bid every biennium. Currently, the Kruse and Parker Advertising Agency had that bid until the end of June. She explained if the division’s funding were approved, the project would be re-bid.

Next, Ms. Keating said she assumed the advertising agency worked with as many groups as possible to achieve complete market saturation. She related the additional $75,000 funding request was needed to keep pace with inflation, but she did not anticipate the program’s saturation to increase much further due to the increasing price of business. Furthermore she envisioned the continuation of the division’s marketing strategy, as it seemed to be successful.

Ms. Keating noted the division had engaged in discussion with the small business centers at the University of Nevada, Las Vegas (UNLV) and the University of Nevada, Reno (UNR) and she related the division hoped to provide more accurate performance measures for the marketing campaign.

Chairman Chowning expressed her pleasure upon hearing the division had employed the small business centers at UNLV and UNR to expand their marketing campaign. In regard to the division’s performance indicators, the Chair restated the subcommittee’s desire for more descriptive outcome measures. She then cited performance indicator number 4, where the number of serious hazards corrected was 100 percent. She asked if the figure was accurate.

Ms. Keating repeated the division would work with staff to provide better performance indicators. She then explained performance indicator number 4 described the rate at which the division identified a serious hazard and the employer consequently was able to correct it. If the hazard was not corrected, she explained the division reported the employer to the division’s Occupational Safety and Health Enforcement (OSHES). Ms. Keating averred all means were exhausted to correct the problem immediately.

The Chair next cited performance indicator number 6, which described the number of employees who had received formal safety and health training, and observed only 40 percent of the division’s goal had been reached. Accordingly, she wondered why the projected figures for the up-coming biennium were increased from 7,200 to 9,000. Additionally, she asked if the employee training programs provided training in an alternate language for those employees who did not speak English.

Ms. Keating admitted she believed the division’s projected figures for performance indicator number 6 were too high and should be altered. Thus she pledged to provide more accurate training figures to staff. Nevertheless, she thought the division’s performance rate in training would increase because the Las Vegas office had added dual training rooms, which allowed the division to conduct multiple training sessions simultaneously. She noted the additional position requested in the decision unit had been designated solely for training purposes.

Chairman Chowning restated her question concerning training in languages other than English. As Ms. Keating could not provide an answer, she deferred response to Dalton Hooks, Chief Administrative Officer (CAO) for SCATS.

Mr. Hooks disclosed SCATS training was primarily directed towards employers, foremen, or management teams, although in some instances employees were also trained. SCATS conducted awareness training concerning what action was required of employers in terms of statutes and standards. Generally, he said those classes were only instructed in English.

Chairwoman Chowning observed 2,900 employees had been trained in 1998 by SCATS and asked if Mr. Hooks had testified that none of those employees required instruction in a language other than English. Also, she wondered if it was necessary to produce training videos for non-English speakers.

Mr. Hooks answered all training media tools were purchased in both English and Spanish. He also added that he had formerly been employed as a SCATS trainer before becoming CAO and to his knowledge most of the trainees were either bi-lingual or English speaking.

Somewhat comforted, the Chair thought the division needed to evaluate the possible need for alternative language instruction in SCATS training.

Next, Ms. Giunchigliani was impressed with the SCATS brochure. However she wondered if the SCATS could contact minority groups, like the Asian Chamber of Commerce, to translate safety brochures in order to meet the needs of the non-English speaking working population in Nevada. Such a partnership could expand SCATS marketing operation exponentially, as those groups would be able to disseminate information amongst their respective memberships. She also suggested that SCATS investigate utilizing foreign language publications like the Asian Times and El Mundo.

Mr. Hooks testified SCATS was a "train the trainer program" that focused on small businesses. SCATS worked with many local agencies and was constantly looking for new partnerships to expand the division’s reach.

Mr. Beers commented the subcommittee frequently heard testimony from regulators who needed state funds to strengthen their programs. He then referred to E-125, which requested funding for dental examinations for 20 positions and questioned its justification.

Ms. Keating explained that in order to comply with the Occupational Safety and Health Act, inspectors were required to have medical and dental exams for their safety.

The Chair asked Ms. Keating to elaborate upon the need for dental examinations. Ms. Keating replied dental exams were required for field officers in the Safety Specialist and Industrial Hygienist training positions. She added Budget Account 4682, Budget Account 4685, and Budget Account 4686 all contained a request for funding for medical and dental exams.

As Chairwoman Chowning closed discussion on the SCATS account, Senator O’Donnell indicated that he would chair the remainder of the hearing.

Mr. Bremner began the discussion on the Mine Safety and Training budget account by citing the M-200 decision unit, which recommended the addition of one Industrial Hygienist with the associated operating expenses to meet the increasing demand of industrial hygiene technical assistance. In decision unit M-201, he related one Program Assistant II was recommended with the associated operating expenses to assist the industrial hygiene program within the Mine Safety and Training section. Furthermore, decision unit M-202 recommended funding for the Las Vegas office, which included an offset to the allocation of funds that had resulted from an increase in the federal grant.

Next, Mr. Bremner referred to E-275 which recommended funding for both out-of-state and in-state travel. The decision unit also recommended funding for contractual laboratory services, training room rentals, instructional supplies, and for national boiler elevator general codes.

In decision unit E-710, Mr. Bremner explained funding for the purchase of specialized training and rescue equipment, thickness testing equipment, four Mega-earth testing machines, computer software upgrades, computers, printers, and three replacement trucks was recommended.

Finally, Mr. Bremner referred to decision unit E-720, which recommended the purchase of two bookcases, a conference table, two self-contained breathing apparatus, one thickness tester for boiler inspection and specialized equipment for mine inspectors through the mine safety and health administration grant.

Chairman O’Donnell expressed his concern was primarily due to the lack of outcome based indicators in the Mining Safety and Training account. He desired more descriptive figures that the subcommittee could use to truly evaluate the program’s effectiveness.

Ms. Keating restated the department would work with staff to provide those figures.

Chairman O’Donnell queried if the division had accepted the recommendations of the last audit performed by the Legislative Counsel Bureau (LCB). Ms. Keating responded the division had accepted the audit’s recommendations. Chairman O’Donnell then asked if the division had disagreed with any of the recommendations. In reply, Ms. Keating stated where the division did not concur with audit recommendations, a written response was provided to Gary Crews, Legislative Auditor.

Ms. Giunchigliani asked why the division requested additional positions when, in her viewpoint, mining activity was declining. Mr. Bremner explained mining activity in Nevada had changed. Most of the mining was done underground, providing a different atmosphere and a different kind of safety problem. As far as monitoring safety and health factors, Mr. Bremner thought underground mining posed a new challenge due to size and alternate environmental conditions. He repeated an enormous increase in underground mining activity had occurred and the division had requested additional positions to meet that expanded need.

Ms. Giunchigliani thought it might be helpful to have additional testimony on the prevalence of underground mining activity because she did not think the actual level of activity merited the budget request.

Edward Tomany, CAO for Mine Safety and Training introduced himself and testified in response to Ms. Giunchigliani’s query. He stated the inspections for underground mining were more time consuming than above ground mine inspections. In addition, the U.S. Department of Labor, Mine Safety and Health Administration, had proposed a new diesel particulate matter regulation, which restricted the underground operation of diesel equipment. Mr. Tomany reported only one industrial hygienist served the entire state at the time to perform all of those functions.

Ms. Giunchigliani asked if performance indicators illustrating the increase in underground mining activity existed so that employee needs could be accurately determined. If underground mining continued to increase in scale, Ms. Giunchigliani thought performance indicators would assist the division in the next budgetary process because they would enable the specific needs of the division to be tracked as well as provide justification for staffing requests.

Mr. Tomany related the industrial hygienist workload figures could be totaled to provide a clear understanding of the division’s need for the positions. He also felt that the performance indicators could be segregated by mining type.

Chairing the hearing once again, Chairwoman Chowning cited performance indicator number 3, which found the division had conducted 59 underground investigations in 1998 and she questioned why the division did not expect to conduct any underground investigations in the next biennium.

In reply, Ms. Keating explained that at the time the division had supplied the subcommittee with actual figures for 1998, they did not feel comfortable in making projections about the number of investigations that they would conduct during the next two years. At the time of the budget’s inception, the division had only been tracking underground trends for one year and did not have sufficient information to create a performance indicator related to underground mining activities. Thus, Ms. Keating planned on working with staff to provide all of those figures. Furthermore, she planned on categorizing the activities of the Industrial Hygiene program, which had increased exponentially due to the growth in underground mining.

Ms. Giunchigliani asked Ms. Keating to take up the issue of the federal funds used for vehicle purchases. She wondered how often vehicles were replaced.

Ms. Keating answered the division had 12 employees, 10 of which were field inspectors. One employee was an industrial hygienist. Because Nevada’s mines were located in rural areas throughout the state, the division’s vehicles experienced increased mileage more quickly than most. Ms. Keating related that after a certain mileage the division replaced those vehicles.

Ms. Giunchigliani asked at what mileage the division replaced its vehicles. Ms. Keating responded the division replaced vehicles when mileage exceeded 100,000 miles, whereas the state norm for vehicle replacement was 80,000 miles. Ms. Giunchigliani then asked for a copy of the division’s vehicle replacement policy and suggested federal funds might be used for purchasing purposes.

Ms. Keating said she would provide that information to staff.

Next, Chairwoman Chowning requested Ms. Keating to produce statistics that described how E-720 was funded and if the safety equipment could be purchased through federal grant applications.

Ms. Keating repeated she would provide information to staff. Additionally she explained federal grants were designated for training purposes only, the use of federal funds in the inspection area was not a possibility.

Regardless, Chairwoman Chowning needed assurance state funds were not providing monetary support if the federal government had the ability to do so.

Next, Senator Jacobsen asked for an explanation of how a mine inspection was conducted. Mr. Tomany answered because federal statutes required proper ventilation of mining facilities, proof of adequate ventilation had to be provided every six months to the Mine Safety and Health Administration. He then detailed the division inspected mines for evidence of diesel particulate, silicone content, and any other chemicals that might be present such as mercury or arsenic.

Senator Jacobsen asked if the division tested the ore or mined product for its chemical content. Mr. Tomany responded negatively.

Next, Chairwoman Chowning informed subcommittee members that she had been given the opportunity to tour an underground mine in Elko earlier in the year. She found it fascinating to see the day-to-day operation of an underground mine and emphasized the importance of conducting the mine safety inspections in regard to employee safety.

Chairwoman Chowning closed discussion on the mine safety budget account.

NancyAnn Leeder, Nevada Attorney for Injured Workers began her presentation by introducing Dennis Stoddard, Legal Research Assistant II for NAIW. She then distributed a packet of charts (Exhibit D on file at the LCB Research Library), describing the agency’s various performance statistics. Ms. Leeder indicated along with DIRs assistance, she had designed the pamphlet in such a way that it provided the most comprehensive information available.

Ms. Leeder also distributed two folded pamphlets, which had been prepared by NAIW (Exhibit E). She explained those pamphlets were reprinted every two years or as the laws were changed.

Chairwoman Chowning quickly interrupted to commend Ms. Leeder for translating the brochures into Spanish despite additional costs to the agency.

Ms. Leeder said translating the brochures into Spanish would come at an additional cost to the agency. She indicated NAIW employed a Spanish speaking individual, but that person could not be used to complete the translation.

Chairwoman Chowning asked if NAIW had worked with the community college system to design the brochures. She thought that would afford students the opportunity to learn in a hands-on fashion.

Ms. Leeder noted the Spanish and English pamphlets entitled "An Employee’s Guide to Nevada’s Workers’ Compensation Insurance" had been produced by DIR.

Next, Ms. Leeder referred to Exhibit D and stated the division had provided outcome measures in both line graph and bar graph form.

Ms. Leeder explained the mission of NAIW, as defined by statute, was to prepare and present cases for court after the appeals officer or the Administrator appointed her office to a case. NAIW represented only injured workers who were seeking benefits in the workers compensation system. Therefore, she said the primary factor driving NAIWs workload was the number of appointed cases the division received from appeals officers. Cases directed by the Administrator mostly involved compliance issues. She indicated initially the DIR Administrator held hearings with the grand-fathered employers, however, currently DIR appointed NAIW to cover cases in compliance areas and occasionally to district court.

Chairwoman Chowning called the Subcommittee’s attention to performance indicator number 1, which illustrated the agency’s caseload increased to 838 cases in 1990, whereas in 1998 the caseload had increased to 1,607 cases upon appointment. She wondered how NAIW formulated the FY 2000 and 2001 caseload projections.

In reply, Ms. Leeder replied that the increase was based upon a quantitative time series analysis. NAIW also examined potential changes in the area being transitioned into the private sector (3-Way Insurance). Accordingly, Ms. Leeder divulged she had projected a 15 percent increase in caseload. She estimated the transition to 3-Way insurance would increase caseloads substantially because the interpretation of the law would be substantially changed and there would be new individuals involved in litigious issues concerning denied claims. New adjusters would be making insurer decisions and new attorneys would be arguing for new interpretations of the law.

Chairwoman Chowning noted that over the biennium, NAIW had projected a 38 percent increase not a 15 percent increase. Ms. Leeder clarified she had projected a 15 percent increase in the first year of the biennium and a 20 percent increase in the second year.

Ms. Leeder explained the budget had been constructed in a way that allowed for each of the maintenance and enhancement units to build upon base budget requests. Thus, the items requested needed to be considered as a whole to properly equip NAIW to handle the caseload on its roster in addition to the cases NAIW anticipated receiving.

Ms. Leeder reported there had been a substantial decrease in the number of appeals officer appointments (see Exhibit D) at the end of FY 1998. Surprisingly, however there was a substantial rise in the appointments made by appeals officers in the following month. Ms. Leeder ascribed the dramatic difference in officer appointments to the fact that the appeals officer’s appointment system had changed and appeals officers did not schedule any hearings in the period between the end of FY 1998 and the beginning of FY 1999.

Ms. Leeder called the subcommittee’s attention to the chart on page 29 of Exhibit D and reported that no advice calls were answered by the agency for a substantial period of time because of NAIWs staffing difficulties.

Similarly, Ms. Leeder explicated the noncompliance statistics on page 32 of Exhibit D were also low due to the staffing deficits. NAIW issued advice through email, the World Wide Web, and consumer events at malls and shopping centers. NAIW also provided pamphlets to all of the medical providers in the state and answered questions from any party even though they only provided representation to workers. Ms. Leeder then said non-compliance comprised the entire universe of all major cases which requested benefits for claimants.

Ms. Leeder related the office attempted to contact claimants to determine if they had received their awarded benefits within the statutorily defined time frame. Three attempts were made to contact the claimant and if the claimant did not return the call, the office assumed the claimant had obtained the benefit. In instances where the claimant had not been able to obtain the benefit, NAIW contacted opposing counsel, employers, insurers or the providers of the benefit to negotiate a resolution. In most cases, settlements were achieved in that manner, but where an agreement could not be reached NAIW filed a complaint with DIR. Ms. Leeder then repeated that staffing shortages had prevented the office from providing that service to employees in Las Vegas.

Ms. Leeder mentioned there was no overlap between the statistics provided in the packet and the performance indicators in The Executive Budget because they measured different factors.

Chairman Chowning agreed with Ms. Leeder’s testimony, which stated the division had not been able to realize the goals it had set for itself during the last biennium. She asked what factors had inhibited the division from completing its objectives and what elements in The Executive Budget attempted to ameliorate the division’s performance.

First, Ms. Leeder responded three staff members had been on catastrophic leave concurrently making it difficult for the division to complete its workload. Second, Ms. Leeder disclosed the Las Vegas office had simultaneously lost two secretaries and had difficulty finding replacements. She thought the staffing shortage in the Las Vegas office was a function of the number of jobs available and the compensation offered. She noted even the Office of the Attorney General had experienced problems in hiring legal secretaries. As a result, the Department of Personnel was in the process of completing an occupational survey.

Ms. Giunchigliani concurred that staffing shortages in the legal secretary sector had long been a problem for state agencies. She asked when the study would be completed and if the budget would reflect the recommendations of the study.

Ms. Leeder replied The Executive Budget did not reflect a potential salary increase resulting from the study. However, she stated the study would be complete by the end of 1999. Thus far, questionnaires had been distributed, but they had yet to be completed and returned to the Department of Personnel.

Ms Giunchigliani thought there might be a budget impact resulting from the study. She requested Ms. Leeder to confirm the study’s completion date because if the state failed to rectify the staffing shortages in the division, claimants would not be served adequately.

Chairwoman Chowning directed Ms. Leeder to detail the division’s budget recommendations in The Executive Budget.

Ms. Leeder explained the positions requested for NAIW had been based upon the caseload projections made for the department’s transition to a 3-Way insurance system. The recommendations had also been formulated upon the historic cyclical nature of the types of cases the office generally received. Historically, she felt there was substantial variation between caseloads per year and she predicted there would be a delay in caseload changes due to changes in the laws governing worker’s compensation.

Ms. Leeder noted that although the division had initially requested five additional positions, The Executive Budget funded only one additional position. She said the four-position difference was indicated in the unfunded decision unit. Next, Ms. Leeder stated the division had decided to request one Accounting Technician position instead of requesting two Management Analyst positions. She explained the office needed a financial position to comply with the recommendations of the Legislative audit.

Chairwoman Chowning asked Ms. Leeder to discuss the details related to the implementation of the audit’s recommendation. She wondered how the office had performed once certain recommendations had been implemented.

In reply, Ms. Leeder disclosed the audit had directed the office to document NAIW policies and practices. As a result, classes were arranged for staff in order to teach the method with which the policies needed to be written. Additionally, Ms. Leeder noted the audit had suggested including a financial position in the NAIW office in order to ensure the office’s administrative activities were completed in accordance with office policies.

Ms. Leeder also detailed the audit’s recommendation to streamline the office’s statistical program, written in FoxPro. She said the office had funds available due to a carryover in 1998. The carryover was derived from the crash of NAIWs computer system, which consequently forced the office to request funding from the Interim Finance Committee (IFC) for a new computer system. However the funding approved by IFC could only be allocated in three phases due to the large amount of money involved. Ms. Leeder contended the phase-in approach had created some difficulty in purchasing compatible equipment which was needed for the statistical program.

Furthermore, Ms. Leeder claimed the office’s difficulties with FoxPro stemmed from the incomplete programming of the system, which prevented the production of the desired results. In fact, she divulged the program still could not produce accurate results like those presented in Exhibit D; figures appeared to change and in some cases were left out. She stated a representative from DoIT thought a substantial revision of FoxPro was needed. Therefore since the enhancement of the FoxPro database had been recommended in the audit, Ms. Leeder stressed the office would complete that objective by using the funds, which had been carried over.

Chairwoman Chowning thought the audit had made 11 recommendations. She asked how many of those the office had been able to implement. Ms. Leeder answered NAIW had not finished preparing its response, but it would be complete by April 12, 1999. Regardless, she said all recommendations were in the process of being completed; three to four recommendations had already been completed.

Chairwoman Chowning next referred to the M-200 request for additional funds for in-state travel. Ms. Leeder replied NAIW needed additional funds for in-state travel because she thought two of the staff members should be spending more time in Las Vegas to maintain the operation of NAIWs computer. NAIWs Las Vegas office had experienced significant difficulty in getting the FoxPro program to work correctly. Without the funding increase, the office would have to expend an inordinate amount of resources on DoIT personnel. Thus, Ms. Leeder emphasized the M-200 request was a more cost-efficient method of maintaining the computer system’s operational capacity.

Chairwoman Chowning then called attention to E-720, which requested $18,500 for CD-ROM updates. She asked if the office could obtain that information more cheaply on the Internet rather than on CD-ROM.

Ms. Leeder thought obtaining the legal information from the Internet would be more expensive than by ordering the CD-ROM updates. She conceded NAIW could use an Internet Library to obtain the information. Nevertheless, the CD-ROM’s were more efficient in regards to information retrieval and were more usable in terms of moving data from the database to a word processing program.

Dennis Stoddard, Legal Researcher for NAIW, added a distinction should be made between online services and the Internet. Both Lexus and Westlaw provided online services via the Internet through a variety of contracts. The Internet itself did not provide the type of legal research the office required to support its activities.

Chairwoman Chowning was uncertain that was the case. She thought the Office of the Attorney General was able to utilize the Internet for research purposes.

Mr. Stoddard replied the Office of the Attorney General had an Internet contract with Lexus through their Internet service provider. That differed from the type of research actually done on the Internet because it was a contractual service provided through Internet access.

Chairwoman Chowning asked why the office was not able to purchase that service as well. She directed Mr. Stoddard to supply information comparing the two alternate services so subcommittee members could make an informed decision.

Returning to the positions requested in The Executive Budget, Ms. Leeder mentioned the office had requested one Legal Secretary position for Las Vegas and two Legal Researcher positions, one located in Las Vegas and one located in Carson City. She also noted the Hearing’s Reserve Account included a legal secretary, an attorney, and a legal researcher. As no questions concerning the account had been asked when its budget was presented, Ms. Leeder said she could respond to any questions subcommittee members might have at the time.

Chairwoman Chowning commented the Hearing’s Reserve Account also included an additional Research Assistant and Legal Secretary for NAIW.

Ms. Leeder thought those staffing requests would alleviate much of NAIWs staffing needs. Realizing staffing requests were subject to the decisions of policy makers, she felt NAIW could always use the IFC to request additional positions as needed, but Ms. Leeder presumed NAIW would requite those additional positions by the second year of the biennium.

Chairwoman Chowning was unsure if NAIW would receive all three positions by 2001. Ms. Leeder indicated that she would return to IFC with staffing requests only if justified.

Ms. Giunchigliani was confused as to why the positions would not be funded at that time.

Because he felt NAIW’s caseload growth estimates were speculative, Mr. Comeaux responded a provision had been included in the reserve account so that if NAIW demonstrated a need for the additional staff during the biennium, they could make the request to IFC. The Department of Administration’s Hearing Division had not been able to estimate caseload growth likened to that predicted by NAIW. Thus, because of the uncertainty concerning expected caseload growth, the option of using IFC for staffing requests was made available through the reserve account.

Ms. Giunchigliani cited the 38 percent increase noted in the office’s performance indicators and asked how it had been calculated. Ms. Leeder said performance indicators were tied primarily to the 3-Way transition and to the number of cases assigned to the office.

Ms. Giunchigliani wanted to ensure that injured workers were not left waiting for cases to be settled and wondered who would make the ultimate decision during the interim concerning whether or not caseload had increased sufficiently to warrant an IFC request.

Mr. Comeaux stated caseload growth changes should be taken up by NAIW when the positions were absolutely needed. After NAIW addressed caseload growth with the Department of Administration, Mr. Comeaux said the request for positions would be forwarded to the IFC.

Ms. Leeder explained the purpose for the Hearings Reserve Account was similar to the manner in which the General Fund supported other agencies. Since the Worker’s Compensation and Safety Fund was the primary source of monetary support for NAIW, no General Fund monies were used. She explained that should a disaster occur and the office was unable to manage its caseload, NAIW could use the funds in the Hearings Reserve Account to alleviate distress.

Ms. Leeder emphasized the decision units in The Executive Budget were intertwined. For that reason, she argued E-720, which requested funds for the UPS Power Chutes were critical to the efficient operation of NAIW. The uninterrupted power source’s would be placed on the server in each office and would allow NAIW to save information that was stored on any computer connected to the server.

Chairwoman Chowning asked if NAIW could itemize the various costs associated with the items being replaced, upgraded, or newly purchased in order to justify the proposed expenditures.

Ms. Leeder mentioned the existence of several bills, which might impact the agency’s caseload. For instance, Senate Bill 55 had included an appeals panel that might create an increase in the number of cases being sent to NAIW. Also, if S.B. 16 had been passed, Ms. Leeder thought that it might also increase NAIWs budgetary needs.

Ms. Leeder also addressed A.B. 334, which changed the definition of casual laborer. She thought the legislation would increase NAIWs caseload because it would allow more individuals to enter the process of obtaining benefits.

Ms. Leeder indicated she had no knowledge of the progress of the bill concerning the appointment of cases by the Hearings Officer. She noted the issue had been taken up in the past few legislative sessions. During the last meeting of the Legislative Committee on Worker’s Compensation, Ms. Leeder reminded subcommittee members she had estimated the proposal would double the size of NAIW. Since that time, though she had changed her position and felt the estimate could be safely reduced.

Ms. Leeder concluded her presentation of the budget account for NAIW and Chairwoman Chowning moved the discussion to the Labor Relations budget account.

Gail Maxwell, Labor Commissioner, and Dan Tom, Director of the Department of Business and Industry, introduced themselves to the subcommittee. Bill Maier, Administrative Services Officer for the Department of Business and Industry, also introduced himself and began to summarize Budget Account 3900.

Chairwoman Chowning directed Mr. Maier to first address the backlog in wage claims and to explain why the agency projected an increase in the backlog. Ms. Maxwell replied the backlog situation had not changed. The agency had 1,827 active unresolved cases and the backlog was expected to increase with time.

Ms. Giunchigliani asked why the backlog was increasing. Ms. Maxwell commented the numbers provided to subcommittee members denoted backlog measures for the Las Vegas office only. She felt the backlog in wage claims was increasing because the number of investigators was insufficient to handle the growth in claims. On average, each investigator received roughly 50 new claims each day, but they were only able to deal with 25 claims during that time. The following day, the same pattern occurred except that the investigator also had to manage the unsettled claims received the previous day. Thus, the workload was increasing beyond the capacity of the current number of investigators.

Ms. Giunchigliani asked if the wage claims stemmed from the construction industry or from other industries. Ms. Maxwell responded the division received approximately 250 construction related wage claims. Those claims were usually received in large groups. To deal with the large influx of construction wage claims, Ms. Maxwell stated she had shifted an investigative position from the northern part of the state to the Las Vegas office. This allowed a full-time investigator to work with Public Works Projects and the office’s auditor to settle construction wage claims. Ms. Maxwell noted the agency had three full-time private employer investigators in the Las Vegas office.

Ms. Maxwell contended the problem existed solely because of the understaffing of the Las Vegas office. She mentioned the office had evaluated modifying its service protocol or the extent of the services which the office provided in order to reduce claims.

Ms. Giunchigliani pondered the idea of utilizing labor organizations to screen wage claims. In reply, Ms. Maxwell disclosed labor organization representatives were already present on the job-sites for all public works projects. As a result, the office received a significant amount of work.

Ms. Giunchigliani asked if the private sector projects had facilitated a larger share of the backlog problem. Ms. Maxwell replied affirmatively as a majority of the backlogged wage claims came from private industry.

Ms. Giunchigliani inquired if a staff increase was needed in the Labor Relations budget to manage the backlog or to manage the increase in wage claims projected for the future. Ms. Maxwell answered the agency’s budget requests for the upcoming biennium did not attempt to deal with the backlog at all.

Ms. Giunchigliani asked Ms. Maxwell how long she had held her current position. Ms. Maxwell responded she had been acting Labor Commissioner since November 10, 1998.

Ms. Giunchigliani questioned if the office assessed any fines when they found a wage claim to be inappropriate. She thought that if fines were levied the office might capture some of the costs involved with evaluating the claim.

Ms. Maxwell said the office did not capture the fines assessed to employers. The penalties imposed on the employer went directly back to the employee.

Ms. Giunchigliani asked if additional penalties were assessed. Ms. Maxwell replied any additional fines were also funneled back to the employee. Next, Ms. Giunchigliani explored the possibility of increasing the penalties assessed and splitting the result between the office and the employee. Thus, employers who continued to abuse their employees paid a greater fine and the office could use the resultant monies to create a special fund for additional investigations.

In reply, Ms. Maxwell explained administrative fines and costs were assessed to the employer following a hearing process. Those fees were then returned to the General Fund.

Ms. Giunchigliani asked if those funds were adequate. Ms. Maxell replied the monies resulting from those fees amounted to an insignificant amount each year.

Ms. Giunchigliani wondered if the division had submitted any legislation to alter their administrative fining capability. Mr. Tom replied he had not had the opportunity to examine the issue in totality. However, he thought Ms. Giunchigliani’s suggestions might prove feasible in terms of dealing with the wage claims. He thought legislation should first address the fact that small claims were handled using the same methodology, as were larger claims. Mr. Tom related the Office of the Labor Commissioner was regarded as a convenience or a cheap conduit for large claims when in fact other avenues were available to recoup large amounts of funds. Therefore he believed legislation should be created to minimize that occurrence as well. Furthermore, Mr. Tom argued legislation addressing that issue might also stem the increasing trend of backlogged wage claims.

Ms. Giunchigliani thought additional recommendations for the Office of the Labor Commissioner could be evaluated throughout the upcoming biennium. Legislative or regulatory recourse could be taken to alleviate the stress placed upon the office. She also thought the office should attempt to isolate the sources of the increase in wage claims by sector or industry. She asked Ms. Maxwell to speak to the progress of the agency’s computer programs.

Ms. Maxwell related the wage claim program was about 98 percent complete and a Phase III to the original contract had been developed to save the office 30 to 50 man-hours per week. Ms. Maxwell hoped the program would limit the duplication of work and allow the employees to access wage claims histories directly from their personal computer.

Ms. Giunchigliani asked if the wage claim program was compatible with the federal computer system. Ms. Maxwell clarified the wage claim system was not related to the federal computer system. The federal system had been upgraded and it did not affect the operation of the Labor Commissioner’s system.

Next, Ms. Maxwell relayed the Private Employment Agency program was operational and had almost completed its test phase. She then said the prevailing wage program would be ready by June 30, 1999 so that the new system could be used. Thus far, the prevailing wage program was 30 percent complete.

Ms. Giunchigliani asked if the Labor Commissioner expected to meet that timeline. Ms. Maxwell replied affirmatively. She indicated Phase III was extremely important to the agency because it managed the financial activities of the Office of the Labor Commissioner.

Chairwoman Chowning commended Ms. Maxwell for her extraordinary effort as Labor Commissioner. She referred to the office’s goal to resolve all wage claims within 90 days after the office had received them. She wondered if the 90 day time figure was a reasonable goal.

Ms. Maxwell conceded that with the current wage claim backlog, the 90-day figure did not seem reasonable. Nevertheless, she understood the hardships faced by those waiting for their paychecks. Therefore, she desired to see the office working towards the goal of completing wage claims more quickly that the 90-day goal.

Ms. Maxwell mentioned the wage claim problems were not caused by blatant mistreatment of the employee, but by employer ignorance. Also, repeat offenders were usually taken to hearings where the misunderstanding was subsequently resolved.

Chairwoman Chowning asked if the four positions, which had been approved by the 1995 Legislature, had been assigned solely to allay the backlog in claims. Ms. Maxwell related the four positions had originally been assigned to Public Works projects, not to wage claims. She revealed that one clerk in the Office of the Labor Commissioner handled 3,640 open contracts and was required to file 28,000 certified payroll reports per month. That clerk also managed the office’s filing and mail systems.

In addition to the sole clerk in the Las Vegas office, Ms. Maxwell indicated that recently a new auditor had been placed in the office alongside two investigators, one of which dealt with private employer wage claims while the other dealt only with Public Works projects wage claims. Before that time, Ms. Maxwell said private employer wage claims had not been managed at all.

Chairwoman Chowning asked Ms. Maxwell to detail the budget requests that had not been recommended by the Office of the Governor. First, Ms. Maxwell indicated the office had requested funding for 12 new positions, while The Executive Budget had only recommended funding for four positions. Second, Ms. Maxwell stated she had placed a clerical supervisor in the office and had upgraded one investigator position so that the individual could perform audits. Third, Ms. Maxwell indicated she had investigated the purchase of a scanning system for the certified payroll reports to increase efficiency. Thus, she concluded the office needed additional support in areas other than staffing.

Chairwoman Chowning then asked Ms. Maxwell to provide her estimation of the office’s actual workload in writing. Moving to decision unit E-720, she asked to whom the cellular phones, which were requested in the budget, would be assigned and for what purpose they would be used. She felt the $1,800 cost seemed excessive and desired know what the cost represented.

Bill Maier responded the $1,800 cost figure represented air-time. Originally, he stated the office had requested $2,100. The costs were associated with two cellular phones that the auditor/investigators would use while working in remote areas.

Chairwoman Chowning asked if the cost had been based on past usage rates. Ms. Maxwell admitted the office had never had the use of cell phones. Furthermore, she indicated the office staff did not travel to remote areas frequently. Still she thought the commissioner might need the cell phone to communicate with the main office while in attendance at certain meetings.

Chairwoman Chowning asked Ms. Maxwell to provide staff with an estimate of what she felt the cost per hour breakdown for the cellular phones would be.

Next, George Jones, Regional Director for the Bureau of Apprenticeship Training, U.S. Department of Labor introduced himself and stated his position oversaw apprenticeship activities for California, Arizona, Nevada, and Hawaii. In support of the Office of the Labor Commissioner, Mr. Jones summarized the history of apprenticeship for the Subcommittee. Since 1937, through The National Apprenticeship Act, better known as the Fitzgerald Act, the Bureau of Apprenticeship and Training trained consultants to work with employers throughout the country. Their job was to assist in the development of a training program that produced highly skilled people to maintain the competitiveness of the United States in the world market. The bureau was mandated by law to provide the training service to any employer throughout the state, except in states that chose to have the responsibility of providing apprenticeship training located within the state.

Mr. Jones explained Nevada was one of those states, which had chosen to have a State Apprenticeship Council and had been authorized by the Secretary of Labor to administer the apprenticeship functions within the state. Currently, the state did not have a full-time individual assigned to that function. Mr. Jones related the Labor Commissioner had assigned an individual who had been previously involved in mainly clerical responsibilities to administer the functions of the Apprenticeship Council. Considering the federal bureau had employed three technical positions to administer the same duties in other states, he felt the individual who held the state position needed more thorough training.

Mr. Jones noted the state’s apprenticeship program operated with over 106 employers and over 5,000 apprentices registered in the state of Nevada. Mr. Jones stressed the apprenticeship program was critical to the evolution of a skilled workforce and to the competitiveness of Nevada’s industries. Also, the apprenticeship program applied the type of hands-on training, which could actually assist in the reduction of workplace injuries. .

Unfortunately, Mr. Jones stated, the Office of the Labor Commissioner did not have the resources to complete those functions and comply with the authority granted by the Secretary of Labor. Therefore, he heavily emphasized the need for additional positions to be added to the Labor Commissioner budget account in order to fulfill the necessary functions of the state’s apprenticeship program.

Ms. Giunchigliani interrupted to ask how Mr. Jones would propose increasing the number of females and minorities who participated in the program. Mr. Jones responded Title 29 of the Code of Federal Regulations (CFR) 30 which was the Equal Employment Opportunity (EEO) regulation for apprenticeships, required any certified and registered apprenticeship program to establish an affirmative action plan. The plan should recruit and train women and minorities within the system. He felt the problem emanated from the recruitment component of the title.

Ms. Giunchigliani clarified Mr. Jones had presented support for additional positions to be located within the Office of the labor Commissioner. Mr. Jones then indicated that in order to operate the apprenticeship program successfully, the office would need three additional positions. Aside from the significant interest in the Las Vegas area, rural areas too, had been contacting the bureau and requesting apprenticeship training. Mr. Jones insisted that for the basic economic survival of those rural communities, apprenticeship programs were desperately needed. He concluded the bureau encouraged the support of additional staff and the provision of travel monies, which would be required for the supervision of rural apprenticeship programs.

Jim Leonard, member of the State Apprenticeship Council, testified that the council had consistently appeared before the money committees and requested additional staff support for the apprenticeship programs. Despite budget constraints, he contended an increase in staff support for the program was critical and he felt the program deserved the subcommittee’s attention. He was unsure if Ms. Maxwell had included the apprenticeship staff positions in the office’s unfunded decision unit for staffing requests. If not, then he maintained the unfunded decision unit should request support for 15 additional staff positions, not 12. In any case, Mr. Leonard held the program required at least two positions, one located in northern Nevada and one located in southern Nevada.

Mr. Leonard also reported that the apprenticeship program had grown by over 300 percent since he had joined the council 14 years ago. Also, since that time, he had observed the Labor Commissioner’s staff had steadily declined by at least 50 percent and he was not encouraged by those figures.

Furthermore, Mr. Leonard emphasized the apprenticeship programs had done an excellent job training workers and had affiliations with the community college system in Nevada. He felt the program had advanced exceptionally well. He thought the Labor Commissioner should be made aware of any alternate recourse to fund the office, should one be available.

Senator O’Donnell asked if those suggestions had been voiced to the Office of the Governor. Mr. Leonard was unsure and deferred response to Ms. Maxwell. Ms. Maxwell replied the original budget request submitted by the office had included an individual assigned to the apprenticeship program.

Senator O’Donnell clarified the office had requested an apprenticeship training staff position, but the Governor’s office had failed to approve it. She mentioned if the office did not have an apprenticeship training representative, the office would lose Chapter 610 funding and the federal entity or the Bureau of Apprenticeship Training (BAT) would reassume the state’s apprenticeship training authority.

Mr. Jones added the difference between a BAT state and a State Apprenticeship Training (SAT) state involved the location of supervisory authority over apprenticeship training programs. Of the four BAT staff members who had previously operated the program in the state of Nevada, Mr. Jones stated only one federal representative was left in Reno. However, Mr. Jones pledged the bureau would continue to do its utmost to assist in the training of the apprenticeship program staff for the state.

Next, Dan Gouker, Director of the Electrical Apprenticeship Program for Southern Nevada, reported he administered the second largest apprenticeship program in the state. In June of 1999, he stated his program would be training 450 electrical apprentices. He opined several of the items already discussed in the hearing concerning OSHA compliance and safety could be addressed with proper apprenticeship training.

Mr. Gouker insisted funding for the apprenticeship program position should be recalculated into the Labor Commissioner’s budget account because it was imperative to the survival of the SAT program. He explained when an apprenticeship was reviewed by the State Apprenticeship Council for approval, the program had to comply with 23 separate items in
NRS 610. Those items included an affirmative action plan, safety and training, on-the-job training requirements, and classroom curriculum requirements. Once the program was approved the Department of Education reviewed the program for content. Thus, he stated the process was not a simple one.

Mr. Gouker thought the main difficulty with the SAT program was that it lacked accountability. There was no way to ensure the program carried out its chartered responsibilities properly. For example, Mr. Gouker stated if a compliance audit was completed on the following day, his apprenticeship program was at 42 percent minority participation. He noted that while the national average for female apprenticeship participation was about 6 percent, female participation in his two apprenticeship programs ranged between 13 percent and 18 percent. Although his program would probably meet federal requirements, he thought many other apprenticeship programs in the state would fail.

Mr. Gouker then reiterated employers were not educating their employee’s as required by state regulations, whereas apprenticeship training programs required a minimum of 40 hours of safety training. If an employee did not sufficiently understand safety requirements, OSHA claims increased. Consequently, he maintained that if the legislature chose to fund additional apprenticeship training positions, many of the state’s budgetary problems caused by on-the-job injuries and claims could be alleviated. He felt it was imperative that the apprenticeship training positions were placed back into the budget account for the Office of the Labor Commissioner.

Chairman O’Donnell asked why the apprenticeship training program shifted from a BAT program to an SAT program. In reply, Mr. Gouker thought the transition occurred as a result of national budget cuts. Also, as a result of state budgetary constraints the apprenticeship training budget was cut and the training position was dropped. The federal entity then concentrated their efforts mostly on states, which did not have a State Apprenticeship Council. He reported 27 states had State Apprenticeship Councils and the remaining BAT personnel were concentrated in the remaining states.

Chairman O’Donnell inquired if the BAT would reassume its responsibilities in Nevada if the state lost its State Apprenticeship Council. Mr. Gouker replied negatively as the council had been statutorily established. So until such time that legislative action was taken to de-certify the council, the federal entity would not take over those responsibilities. If that occurred, Mr. Gouker thought the job wouldn’t be done at all.

As there were no other questions concerning the Labor Commissioner’s budget account, Chairman O’Donnell moved to the next budget account.

Before the discussion on the budget account could begin, Mr. Goldwater disclosed the fact that his father was Chairman of the Employee Management Relations Board (EMRB).

Next, Shari Thomas Commissioner for EMRB introduced Karen McKay, Vice Chair of the EMRB and provided a brief overview of the history of EMRB.

Ms. Thomas noted the EMRB was established in NRS 288 in 1969 to promote smooth and cohesive collective bargaining processes. At the time, EMRB served 70 local government employers with 190 bargaining units and 51,000 employees. She explained the board provided an adjudication process, which was easier to access and much less time consuming to local governments than the court system. In addition, she explained the board had instituted mediation programs as well as additional training sponsored in conjunction with the federal Mediation and Conciliation Service. She indicated the program had been able to reduce hearings by at least 15 percent each year in the last two years. Finally, Ms. Thomas stated the board had worked with Caselaw and had provided the service with copies of over 500 of the board’s past decisions. Caselaw was compiling the data onto a CD-ROM and would provide three copies to the board free of charge.

Ms. Thomas thanked subcommittee members for the budgetary support that had been provided in the previous legislative session. She reported the two computers, which had been approved, had allowed the board to produce important legal documents without incurring the need for additional staff.

Ms. Giunchigliani asked what influenced the projected increase in the board’s case backlog. Ms. Thomas replied growth in the state subsequently leading to an increase in open contracts influenced the board’s backlog. She said the board had certified an additional six bargaining units in the last year, one of which was the University Medical Center’s physician staff. Also, the city of Mesquite had both city employees and firefighters recognized. In addition, Ms. Thomas reported a small rural water district had come before the board for clarification on certain issues. EMRB was attracting more and more bargaining units.

Mr. Beers asked for a description of the computer software upgrades that had been requested but then scaled back. Ms. Thomas answered initially the board had requested funds for software upgrades less than what was assigned to EMRB in The Executive Budget. However after DoIT had submitted its projections, EMRB had decided to upgrade the software request. She indicated the EMRB wanted to develop a case management system similar to that which had been developed for the Hearings and Appeal Division. She said DoIT had proposed to scale down the process for EMRB, but that the board would have to switch from WordPerfect to Microsoft Word. Thus, the board had requested the purchase of Microsoft Word software and funds to hire DoIT to install the software.

In addition to EMRBs budget testimony, Ms. McKay testified on the reduction of $4,797 for a parity adjustment for the board’s secretary in The Executive Budget. She stated the item had been removed from EMRBs budget in previous sessions and the position had not had an adjustment in over 10 years. As a board member, she was concerned that a state employee had an unadjusted salary. Ms. McKay thought the adjustment was to have been included in the unclassified pay bill after it had been removed from EMRBs budget for the biennium. Unfortunately, she found the item had not been included in the pay bill.

As members of the EMRB felt strongly about the matter, Ms. McKay related the board had written the Governor apprising him of the situation. She then requested subcommittee members to demonstrate their support for the issue during the current legislative session.

Chairman O’Donnell asked Ms. McKay to provide staff with a written statement concerning the item.

Closing discussion on the EMRB budget account, Chairman O’Donnell addressed the budget account for the Athletic Commission.

Sandy Johnson, representative for the Athletic Commission for the State of Nevada provided a handout to subcommittee members (Exhibit F). She pointed out the last page of the handout detailed the attendance for boxing, wrestling, karate, and closed circuit matches. Those numbers had been based upon the last calendar year.

Ms. Johnson reported the attendance had dropped significantly in 1998 and somewhat in 1997. She felt this was due to the proliferation of gaming throughout the United States; both small and large events had been lost to other states that had lower cost gaming facilities. Television venues such as Pay-per-View had also adversely impacted the Athletic Commission’s activities in the past year. Ms. Johnson indicated a promoter could conduct an event at a lower cost at a smaller gaming facility out of state because of lower on-site fees and profits received from television promoters.

Also, Ms. Johnson indicated the drop in the heavyweight matches scheduled for the state had occurred following the incarceration of Mike Tyson. Thus, Ms. Johnson reported the Athletic Commission had experienced a significant drop in revenue.

Next, Ms. Johnson said the commission had requested increases in budgetary support to reimburse employees for overtime incurred. She explained most events occurred on weekends, holidays, and evenings. Normally, the Executive Director was at each event, however a staff member was required to be present at a weigh-in. Accordingly, staff worked overtime when events coincided or when events occurred on holidays.

Ms. Johnson noted the commission had also requested funding for out-of-state and in-state travel up to previously funded levels. Due to the fact that the commissioner traveled frequently and was a member of the Association of Boxing Commissions, the commission’s budget needed to provide more support for travel expenses.

Next, Ms. Johnson identified the commission’s request for the replacement of two desktop computers and a typewriter. She explained the two computers would replace older models.

Chairman O’Donnell asked how the state planned to prevent situations like the one that had recently occurred in New York City, during the Evander Holyfield versus Lenox Lewis fight. He wondered if the commission exercised certain precautions that would prevent a fixed match from occurring.

Ms. Johnson was proud to state the Nevada Athletic Commission worked diligently with state and sporting sanctioning bodies in regard to importing outside sporting officials. She said a sanctioning body provided the Executive Director with a list of recommended names along with a record of the number of fights and decisions each sporting official had supervised in the state. The record included details such as whether or not the official’s decision had been in the majority, the score, and the number of rounds the fight lasted. Furthermore, the commission worked to ensure the officials assigned were native Nevadans. In some cases though she admitted outside officials had to be hired.

Chairman O’Donnell asked if the commission could assure the subcommittee outside officials had been scrutinized closely to avoid matches like the Holyfield versus Lewis fight.

Ms. Johnson assured the Chairman the promoter did not choose the fight officials. Fight promoters provided a list of recommended officials, but the commission ultimately made the decision.

Mr. Beers noted the World Wrestling Federation (WWF) was building a hotel in Las Vegas and wondered if its activities would fall under the purview of the commission.

Ms. Johnson replied the WWF was building a hotel in Las Vegas. She stated wrestling was a popular sport that Nevada had been able to market for a somewhat significant profit. She estimated the commission could make at least $50,000 per event from television profits alone. However, she noted the sport’s trend in popularity might not be long lasting.

Chairman O’Donnell asked if the commission treated wrestling as entertainment or as a sport. He felt boxing and wrestling needed to be separated into two distinct groups. He did not think wrestling was as prestigious a sport as was boxing.

Ms. Johnson commented Nevada was one of the few states that retained jurisdiction over wrestling events. However she also noted the commission considered wrestling a form of entertainment and not a professional event.

Mr. Goldwater mentioned he was sponsoring Assembly Bill 467, which allowed the Athletic Commission to collect court costs from the licensee or contestant.

Chairman O’Donnell appreciated the predicament the commission had been placed in recently. Furthermore he thought the applicant should pay for the investigative process.

Senator Jacobsen asked Ms. Johnson if the commission received correspondence concerning controversial events. Ms. Johnson replied affirmatively. She called attention to the fact that the commission had received over 400 telephone calls and 200 Emails concerning the Holyfield versus Lewis fight. When a fight occurred in Nevada she said that the magnitude of correspondence was even greater.

Chairman O’Donnell commented most Americans still saw Nevada as the boxing capital of the world and when an event ended controversially, it reflected poorly on the state. Therefore he felt it was incumbent upon the legislators to ensure boxing maintained the integrity the sport deserved.

For that reason, Ms. Johnson emphasized the commission had been working closely with the association to standardize the laws regulating boxing.

As no other questions pertaining to the budget account for the Athletic Commission were issued, the meeting was adjourned at 10:30 a.m.

RESPECTFULLY SUBMITTED:

Janine Marie Toth,

Committee Secretary

APPROVED BY:

Vonne Chowning, Chairwoman

DATE:

William O’Donnell, Chairman

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