The Committee on Ways and Means was called to order at 7:50 a.m., on Monday, May 17, 1999. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

Mr. Robert Price

COMMITTEE MEMBERS ABSENT:

Mrs. Jan Evans, Vice Chair (Excused)

STAFF MEMBERS PRESENT:

Chairman Arberry announced the bills would be taken out of order at the request of Senator Washington, and the first order of business would be A.B. 679.

John Drew, Acting Director, Department of Motor Vehicles/Public Safety (DMV/PS) advised the committee that the bill dealt with the reorganization of the Motor Vehicle Branch of DMV/PS. By way of background, Mr. Drew explained that, in essence, the reorganization began approximately 4 years ago as part of Project Genesis. The development of the reorganization would tie in with the technology that was being developed by Deloitte Consulting. The technology and new organizational look would become the future of DMV/PS for the State of Nevada. Mr. Drew stated all of that was being done to improve customer service and the delivery of motor vehicle services to all persons the department dealt with. With respect to the bill itself, he advised there were two amendments, minor in nature, requested by DMV/PS:

• Section 2, number 1: "***section for the enforcement of***," should read, "***division for the enforcement of***." Mr. Drew explained the change was requested because that sentence made reference to the Compliance Enforcement Division under the proposed reorganization.

• Section 6, number 1 (a) (1): "A division of enforcement," should read, "A division of compliance enforcement."

For the most part, Mr. Drew stated, the remainder of the bill would do nothing more than change the language of the Registration and/or Drivers License Divisions to read: "Motor Vehicles Branch," or "Motor Vehicles Branch of the department."

Mr. Drew announced present at the hearing was Scott Scherer, General Counsel, Office of the Governor, and Jon Lemelin, Project Manager, Deloitte Consulting. One of the issues Mr. Drew felt was important for the committee to understand was that since Project Genesis had been ongoing for the last 4 years, the technology was, in fact, tied to the reorganization. Mr. Drew noted there would be a very strong impact if DMV/PS and the legislature failed to continue the plan that was originated 4 years ago for the project. He then invited Mr. Scherer and Mr. Lemelin to address the committee.

Mr. Scherer stated he wished to reiterate the Governor’s support for the reorganization. As pointed out by Mr. Drew, the plan began 4 years ago, and the Governor’s Office felt it was on the "right track." A lengthening of lines for DMV/PS services had again been occurring in both northern and southern Nevada. Mr. Scherer advised both Senate Finance and Assembly Ways and Means Committees had closed the DMV/PS budget without the requested 51 additional positions, and he felt it was critically important that DMV/PS complete the reorganization so that positions could be consolidated, along with services. According to Mr. Scherer, the Governor’s Office was not advocating a layoff of personnel, but was attempting to make the entire process run more efficiently, in order to address the waiting line issue without the requested 51 additional positions.

Chairman Arberry requested clarification regarding the 51 positions, asking if that had been a recommendation from the Governor or requested by DMV/PS. Mr. Scherer replied that, as he understood, those 51 positions were included in The Executive Budget. Mr. Drew agreed, stating they were included in the Governor’s budget.

Mr. Marvel noted when the subcommittee reviewed the budget the existing vacant positions were discussed, and he inquired if any of those vacancies would be absorbed by the reorganization. Mr. Drew stated there were a couple of positions that would be eliminated if the reorganization were approved, however, those positions were held vacant intentionally, so that no employees would be terminated. Mr. Marvel asked if the vacancies occurred because of the hiring freeze. Mr. Drew remarked a number of the 83 vacancies were because of the hiring freeze, but as he had previously testified, there were at least 17 vacancies that were clearly the fault of the department, and should have been filled. The department should have realized there was a coding error and proceeded, but it failed to do that.

Other than those positions being requested as part of the reorganization, Mr. Marvel inquired how many positions Mr. Drew felt the department really needed. Mr. Drew replied the 51 requested positions were no longer an issue because of the way the budgets had closed, and it was important for DMV/PS to be able to reorganize those remaining positions, so it could proceed with the consolidation of similar functions throughout the department. Mr. Drew emphasized the committee should remember that the way the technology was currently being written, and had been written in the past, was with the new reorganization in mind. That was part of the reason for the Interim Finance Committee (IFC) Oversight Committee, so that for the last 2 years, as development of the technology proceeded, the IFC subcommittee knew of and approved the direction in which the technology was headed. Even though the subcommittee closed without approval of the reorganization, Mr. Marvel stated he was on record as stating he would have no problem revisiting the issue.

John Lemelin addressed the committee, advising that Deloitte Consulting was the technology vendor associated with Project Genesis. Further, he indicated he would explain the background of the project from Deloitte’s perspective. The project began approximately 2 years ago, when Deloitte received a Request for Proposal (RFP) from the State of Nevada to assist with a project called Genesis. Mr. Lemelin remarked that in the RFP, the project was described somewhat as a "3-legged stool." There was an operational improvement part of the project, and an organizational redesign, both of which were state responsibilities already underway. The third portion of the project addressed by the RFP was the search for a technology vendor. That company would join with the other 2 legs of the "stool" to help design and implement an automated system to support continuous improvement and improved customer service for DMV/PS.

Continuing his presentation, Mr. Lemelin said Deloitte reviewed the RFP, and felt it was exactly the way it believed projects, especially technology projects, should be run, thereby choosing to respond to the RFP. Deloitte believed very strongly that when technology got ahead of either operations or organization, major trouble resulted. Mr. Lemelin stated he was happy to report to the committee that the technology component of the project was going very well, was on schedule, and was on budget. Deloitte planned to "go live" with approximately one-third of the system in 2 weeks, and was scheduled to "go live" with the remainder of the system in about 10 weeks. Mr. Lemelin noted that his company had completed all the user requirements, had done the complete system design and specifications, had coded the entire application, and was now testing. Because the project was on time and on budget did not mean Deloitte had not experienced problems. Mr. Lemelin explained there had been many little "bumps" in the road, however, one of the things that made the project successful was the project team. The team had addressed problems as they arose, worked very long hours and very hard together, both contractor and state, to resolve those problems.

According to Mr. Lemelin, he was not personally involved in the operational or organizational portion of the project, but understood those parts were also going well. He indicated he knew that the one-stop initiative, which was a major part of the operational improvements, had been implemented. Mr. Lemelin advised he was personally involved with DMV/PS staff in the communication plan, which took the new organization out to the field. They talked with employees in each of the major offices, not only about the vision of the organization, and the commitment the state had to improve service, but also answering many questions from field staff about their careers, about what the reorganization meant to them, et cetera. After the DMV/PS staff presentation, Mr. Lemelin stated he presented an overview of the system, as Deloitte was designing and developing it, showing how the technology would also support the organizational and operational components.

Mr. Lemelin commented that he understood the committee was in the process of reviewing the reorganization, and from his perspective, he wanted to share his and Deloitte’s views. Mr. Lemelin acknowledged he clearly did not know and understand all of the issues or concerns regarding the reorganization, but from his perspective, he reiterated that the way Deloitte envisioned the project was as a "3-legged stool." He commented that technology projects often ran into trouble, as the committee was well aware. Deloitte had been able to stay on schedule by paying attention to the employees and paying attention to how the end users were going to actually use the system, and ensuring that was integrated into the design. Clearly, the committee had the authority to act on the recommendations of staff, and to approve or disapprove, the reorganization.

Mr. Lemelin advised if the committee decided not to go forward with the reorganization, there would be an impact from that decision on the state. As a technology vendor and a provider of technology to support the operational and organizational components of Genesis, he indicated there would also be an impact on the technology. The committee should also understand there would be an impact on the employees. Mr. Lemelin stated from the system standpoint, the committee should not ignore the decision or potential impact, and should look at how the system had been designed, the screens, the functions, the reports, et cetera. In conclusion, Mr. Lemelin commented he did not know what impacts there might be to the system based on the committee’s decision. He asked if the committee would consider pausing or delaying its decision, and investigate those potential impacts on the system and the employees who would be the users of the system.

Chairman Arberry asked Mr. Lemelin if his company could guarantee that once the system was up and running, it would perform as the company said it could regarding shortening the waiting lines for DMV/PS services. Mr. Drew stated Deloitte Consulting was a worldwide company, and would stand by its product. If the company said its product would do a task, it had to deliver that. From the department’s side, Mr. Drew indicated that clearly the challenge was "marrying" the new organization with the technology and making the project work. Mr. Drew commented there were no guarantees, but as close as he could come, he felt the department could make that happen.

Chairman Arberry knew there were no guarantees, but the problems with other systems such as NOMADS caused the issue to be very sensitive. If Project Genesis did not work, the committee wanted some assurance there would be some type of guarantee or there would be something along the line of penalties. Chairman Arberry indicated he did not feel it was fair to the committee to use the excuse that because the reorganization was not put in place, the program and the entire project could not operate because that one segment of the "3-legged stool" was not online.

Mr. Lemelin conveyed he was unsure how such agreements were ultimately drafted, but when Deloitte Consulting started such a project, the first step was user requirements. The company reviewed all the requirements indicated by the state that it had to contractually fill. From that legal document, which defined the scope of the project, the company produced design specifications, and ultimately coded and implemented the system. Mr. Lemelin stated the firm was contractually obligated to meet the requirements as stated by the document, which it would do. The firm would meet the requirements as defined by the requirement document, as potentially modified by subsequent deliverables called the design document, and the specifications document. He explained the specifications document, for the record, included every screen, every report, every printout that the system would do, every logical step the system performed, and was about a 3,000 page document.

Mr. Lemelin stated he did not know what the ultimate implications to the field would be. His concern was if the organizational redesign changed any of the requirements as stated in the original document approved by the state, those would be requirements he was not aware of, and would not necessarily be covered or addressed by the system.

Mr. Marvel inquired if Mr. Scherer had an opportunity to peruse the specifications document and, if so, how comfortable was he with it. Mr. Scherer advised he had not reviewed the entire document, but did know there were specific deliverables required, specific time limits and penalties for not meeting those. Since Chairman Arberry referred to NOMADS, Mr. Scherer stated one of the major problems with that system was the switch "mid-stream" had let the vendor "off the hook" for the specific deliverables and time limits. He felt it was important that if the state wanted to hold the vendor to delivering the product it said it could, that the state proceed with the project as it was mapped out in the RFP.

Mr. Marvel then asked if, to date, there had been any delays. Mr. Drew advised there had been delays in terms of the deliverables, but as he had previously testified, the department felt some of those delays were because the feeling was that it was more important to be accurate and correct than it was to be on time. Mr. Drew remarked that the project, overall, was on schedule, but in terms of some of the actual deliverables, those had been late in arriving. Mr. Drew emphasized that overall, the project was in fact on time, and as Mr. Lemelin indicated, the project was only 2 weeks away from a portion of the "go live."

As a follow-up on comments made by Mr. Lemelin and Mr. Scherer, Mr. Drew felt it was very important for the committee to understand that the RFP that went out, and which Deloitte responded to, indicated reorganization would be implemented. Deloitte built the system with that reorganization in mind. As Mr. Scherer said, where NOMADS ran into trouble was when the state changed specifications mid-stream. If the committee did not follow through and reorganize, the state was doing the same thing again, changing in mid-stream, which Mr. Lemelin felt would cause an impact or cost to the state. From Deloitte’s perspective, because the firm was contractually bound, it had to be willing to sign off and indicate the system would do what it was supposed to do. If the state changed the contract, the company would not sign off until it had done all the testing, and rewriting that was needed, which would cost the state additional money.

Ms. Giunchigliani asked for a list of the deliverables, the dates, and what had actually been received; she also asked for a copy of the section in the contract regarding the language of the reorganization. Mr. Drew indicated he would provide that information. Ms. Giunchigliani disclosed at a previous subcommittee hearing, DMV/PS advised that the reorganization would not effect whether or not Genesis moved forward, and she was now hearing a different story. Secondly, Ms. Giunchigliani stated there had been various changes to the original reorganizational chart, and requested a copy of all the charts to date so the committee could compare the original request to the current request.

Mr. Drew advised he would provide those documents, but commented that if the issue was whether or not he testified that the project could survive without reorganization, he acknowledged that question was asked, and he replied in the affirmative, that the project could survive. The reason for the response was that by statute, DMV/PS had to continue issuing drivers licenses, registrations, and issuing renewals of both. Mr. Drew noted since the department had to continue with its duties, with or without the reorganization, with or without the technology, DMV/PS still had an obligation to serve the citizens of Nevada as best it could, and would continue to do that. The question was the level of service at which the citizens would receive those services.

Mr. Drew commented the other aspect was that there had been changes to the organization and he would provide all the changes that had gone through in terms of an organizational chart. The project was a new venture for the state, and Mr. Drew indicated just because an RFP was issued, or just because the idea had formed 5 years ago, did not mean that idea had to be perfect the first time. The reorganization had undergone some changes, it would undergo some additional changes, and even if the reorganization proceeded, as it was implemented by the department, there would be additional changes. Mr. Drew remarked it was a living, breathing system, as it had to be to meet the needs of what DMV/PS was trying to accomplish.

Daryl Capurro, representing Nevada Motor Transport Association, stated the association did not have a position one way or the other with respect to the reorganization. The association was, however, somewhat concerned with respect to what the impact would be on both DMV/PS and the users who had to report and pay taxes to the department. Mr. Capurro advised there was nothing specifically in A.B. 679 that dealt with the Motor Carrier Branch. The association reported to the Motor Carrier Branch under the International Registration Plan (IRP), and the International Fuel Tax Agreement (IFTA), in which al states were required to participate. That element was critical as far as the association was concerned, explained Mr. Capurro, because Motor Carrier operated under a public/private partnership with Lockheed-Martin and the system it had developed in the overall collection effort and coordination with other states.

Mr. Capurro said he understood a new fuel tracking program had been approved by the legislature, which was extremely critical to the distribution of diesel fuel taxes, even more so because of the passage of A.B. 584. That bill moved the gasoline tax to the terminal rack and moved the collection effort from the Department of Taxation to DMV/PS, which consolidated all Highway Fund collections in a Highway Fund agency, where it really belonged. According to Mr. Capurro, critical to that was in addition to the $100 million now collected by the bureau, the legislature would be adding another $300 million collection to DMV/PS, specifically the Motor Carrier branch. He explained the fuel-tracking program through Lockheed/Martin was critical in the distribution of taxes collected at the terminal rack to local entities.

Mr. Capurro remarked that his point was he would have liked to see the Motor Carrier branch elevated to division status. As an alternative, he felt at least there should be total continuity of the effort with respect to administration, collection, enforcement, and audit, all the functions that were critical to that collection effort. He asked the committee to understand that the association had certain responsibilities under IRP and IFTA regarding audit functions, which were extremely important. Other than that, Mr. Capurro explained it was important to the association that its members had access to one-stop shopping, and did not have to address different branches or divisions when paying taxes or fees. Mr. Capurro stated he would like to see exactly how DMV/PS planned to deal with the issue of Motor Carrier, the positions, and how it intended to address the issue of collection of the gasoline tax, which would start in January 2002.

Mr. Marvel inquired if A.B. 679 would address some of the associations’ concerns. Mr. Capurro stated the bill really did not address the issue. Mr. Marvel stated it contained the framework that might make the process somewhat more accommodating. Mr. Capurro advised the real framework were the flowcharts, which were really not part of the bill itself. The flowcharts had changed over the past 2 years as the IFC committee reviewed the process. He indicated he did not know exactly how DMV/PS planned on the collection, and in its defense, it had no guarantee that the movement of the collection of the gasoline tax was going to be accomplished until the legislature actually dealt with that issue. Mr. Marvel noted the legislature had held off for 2 years, and he felt it was a good move. A.B. 584 would enhance the state’s revenues by having all the fuels collected in one place, and would allow DMV/PS time to properly implement the bill.

Mr. Capurro agreed, and stated not only would it enhance the revenues, but would enhance the overall effort of the department to ensure it was collecting everything it should be collecting. It would also reduce the possibility of fuel tax evasion. Mr. Capurro reiterated he would like to see, for the record, exactly how DMV/PS would deal with the Motor Carrier Branch.

Mr. Drew remarked he met briefly with Mr. Capurro in relation to his concerns prior to the hearing. Under the reorganization plan Motor Carrier basically would become part of the Compliance Enforcement Division. For the record, Mr. Drew stated the department understood the concerns of the motor carrier industry, and would be more than happy to work with Mr. Capurro to ensure that the motor carrier aspect of the program worked as effectively as possible in order to collect the revenue. Mr. Drew reiterated the department had no problem working with the industry in that respect.

R. J. Colovich advised he was co-owner of Petersen’s Auto Auction in Reno, a dealer-to-dealer operation that held weekly auctions. Mr. Colovich indicated he was also the past president of the Independent Auto Dealer’s Association in northern Nevada. He advised he was present to speak on behalf of A.B. 679. By way of background, Mr. Colovich conveyed he started holding discussions approximately 5 years ago with DMV/PS in an attempt to initiate a better working relationship between the industry and the department. He felt strides had been made and the department had listened to industry’s input and ideas for a smoother operation. Mr. Colovich advised his involvement dealt with the flow of titles through DMV/PS. He noted he had offered input for Project Genesis. His feeling was that it would be a detriment to the industry and to the state itself if the legislature stopped the progress of the project. All the technology for use by the employees of DMV/PS would be useless if training and reorganization was not offered to align the employees with that technology. That would mean the project would not move forward, and could even take a step backwards. Mr. Colovich stated there was an influx of individuals and automobiles coming into the state. The industry had to move into the 21^st Century and needed the ability to process the titles electronically.

Mr. Colovich indicated there had been an adversarial position between the public, the dealers, and the department in past years, and that was not moving in the direction of making the system more user friendly. He felt if the department was not allowed to reorganize to combine its departments and offer training to its staff, along with the dealers, the state would be taking a step backwards.

Mr. Perkins surmised A.B. 679 might be a bill that was necessary to accommodate further action on Project Genesis. For the benefit of the entire committee and those that were not able to attend the subcommittee that dealt with Genesis, when reorganization was discussed at subcommittee, it was commented that Genesis could be accommodated without the reorganization. Mr. Perkins advised he was somewhat concerned to hear that it would only be in an emergency way, and he did not think those caveats were properly explained in subcommittee. There were no huge issues raised at the time. While he knew it was a work-in-progress, and organizational charts could be modified, the project had been worked on for years, and still the organizational charts were modified during the current session. When the legislature was working under the constraints of a 120-day session. Major changes in projects or Executive Branch agencies needed to be available for the legislature at the beginning of the session, rather than submitting changes when the session was half over. Mr. Perkins acknowledged DMV/PS staff had attempted to make appointments to see him and other legislators, and there had not been time to meet with them as much as he would have liked; that situation was not the fault of the legislators or the department. Mr. Perkins reiterated the legislature only had 120-days to deal with such things.

According to Mr. Perkins, the legislature first started talking about the reorganization in 1995, again in 1997, and needed a clear plan at the beginning. It was of great concern to him that the project might be changing direction, and noted there was a subcommittee process that dealt with such issues in the budgets. Mr. Perkins felt that was a good process, and it should not be undermined. It should also be noted that the legislators very rarely received huge poll numbers through the message center regarding agency bills, but rather on larger policy bills that received media attention. Mr. Perkins advised that, however, there was quite a response to A.B. 679, and it was mostly negative. Mr. Perkins commented that told him there had not been successful efforts within the organization to ensure that the employees were knowledgeable. As pointed out by Ms. Giunchigliani in subcommittee, if the project did not have the support of the employees at all levels, that whole program could "go down" just because of that fact. The department needed to have the "buy-in" and support; he stressed it did cause him concern when there was only 2 weeks left in the legislative session and the committee was dealing with the reorganization at that point rather than at the beginning. Mr. Perkins stated he did not feel the legislature could work that way during the current session, or at future sessions.

There being no further testimony forthcoming on A.B. 679, Chairman Arberry declared the hearing closed. He announced the next item for committee consideration would be S.B. 288.

Senator Maurice Washington informed the committee that S.B. 288 was the "third leg of the stool" dealing with foster care provisions in the state. There were other bills that addressed foster care, and S.B. 288 was the third piece of the puzzle. Senator Washington stated the bill would deal with the bifurcation in the two largest counties in the state. As the committee was aware, there were some disparities in the bifurcation between the counties and the state agency, the Division of Child and Family Services (DCFS). Because of the enactment of the Adoption and Safe Families Act in 1997, Senator Washington remarked the state had to deal with accelerating the process of locating permanent placements for those children as quickly as possible. He indicated the act basically put the state under a timeline of 12 months to deal with permanent placement, whether to terminate parental rights or, based on reasonable cause, to reunite children with their biological parents.

Senator Washington noted before that action could be taken, there were steps that were needed. The bill would provide joint custody between the state and the county for those children, and provided for a continuity of care and case management between the county and state. It would also provide for a continuance of placement for the children once they were placed in a foster care provider home, that they would be able to stay there without being moved several times within a given period of time, sometimes within a few months. Senator Washington remarked the bill would also provide for the closure of the gap in the disparity between the payment of foster care providers by the state and counties, and would assist the state and county in working within the stipulations of the Adoption and Safe Families Act. It would also provide for a pilot program to be initiated with the enactment of the bill, and a report provided to the legislative body in November 2000.

Senator Washington advised Juvenile Master Doherty was present, along with DCFS staff, in order to explain the importance of S.B. 288 and how it would work with the bifurcation. He indicated if the program were successful in Washoe County, legislation would be drafted next session to deal with the bifurcation in Clark County.

Mr. Marvel commented he would be in favor of any action which would assist adopted children, and inquired if the bill would help to expedite placement of children in adoptive homes. Senator Washington replied in the affirmative, noting the state was currently under the constraints of the Adoption and Safe Families Act, which primarily instructed the state to work with the Justice Department to ensure those children were given permanent placement within 12 months. Mr. Marvel claimed that was one of the complaints he had received, and revealed the case of a solid, substantial family in Winnemucca who attempted to adopt a child and had a difficult time with that procedure. That family was very unhappy with the system. Senator Washington stated he had heard many complaints concerning the system.

Ms. Giunchigliani revealed she was looking at the revised version of the bill, which seemed to apply to all counties versus the original version which had a cap of 100,000 population or more. Senator Washington agreed, stating that initially the bill was going to apply to Washoe County, however, he believed it had been opened up to the two largest counties, and in the smaller counties, DCFS handled the placement of children in foster care. Ms. Giunchigliani noted the original bill included language in section 4, number 1 which read, "Each county whose population is 100,000 or more***," and that language did not appear in the current version of the bill. She wondered if that had been omitted in error; Senator Washington stated the legislation would not apply to the smaller counties, and would be a pilot program initiated in Washoe County, and based upon the success of that program, Clark County would also initiate the program.

Ms. Giunchigliani then asked what the pilot program would do. Senator Washington replied it would do several things:

• Provide for continuance of care in foster care placement for children;
• Provide joint custody between the state and the county;
• Close the disparity gap between state and county foster care payments;
• Put the state in compliance with the Adoption and Safe Families Act; and,
• Provide continuance of care for case management.

He indicated those were the main provisions of the bill; Ms. Giunchigliani remarked it would be a pilot project that would then be reported back to the next legislative session, to which Senator Washington agreed.

According to Ms. Giunchigliani, there was an interim committee study that had been recommended to review the entire childcare area, and asked how the bill would impact that study. Senator Washington reported the impact would be very significant, because if the pilot program were successful in Washoe County, the state would attempt to eliminate the bifurcation within the two largest counties. It would also work in conjunction with the counties to ensure that those children were placed in permanent placements and not moved from one foster home to another. Ms. Giunchigliani advised she reviewed the fiscal note, and it was originally stated that the fiscal impact could not be formulated due to revision of the bill. She wondered if the fiscal note had been revised. Senator Washington revealed the bill did not contain a fiscal note initially, but it was his understanding that currently DCFS and the county were asking for an additional staff person to work the pilot program. Ms. Giunchigliani commented it might be something along the lines of a case manager or social worker, and there would probably be a revised fiscal note.

Appearing next before the committee was Frances Doherty, Juvenile Court Master for the Second Judicial District Court, who was representing the court’s favorable view of the bill. She stated specifically that the federal law placed Nevada in the difficult position of coming into compliance with a law that said children needed to be in permanent placement within a very short period of time, which the bifurcated system simply could not accommodate. Master Doherty explained the reason the pilot project was formed was because the county realized very early that it would be out of compliance with the Adoption and Safe Families Act. The court, in its position of approving placement and casework in individual cases, was also going to be in the awkward position of knowing that the state system could not accommodate the 12-month permanency placement planning. If the court found that situation existed, it would be denying federal funding for each and every one of the cases that the court found out of compliance.

Master Doherty considered the pilot project the best effort by the state and county to bring Nevada into compliance with federal law, and advised it could be initiated in both Washoe and Clark counties, while the state addressed the bifurcated system. Master Doherty felt that system was an atrocious method of handling children in child abuse placement. Further, she noted, Washoe and Clark were the only two counties in the entire nation that had a bifurcated child protective services system, and the reason it was no longer in use elsewhere was because it was absolutely harmful to the children in the system. Those children were transitioned out of their home, and whether or not they experienced abuse, the trauma of being placed outside the home was significant. Master Doherty explained within 3 to 6 months, after being in the care of the county, they were again transitioned into a new foster home, a new school, a new social worker, a new case worker, and a new physician. In other words, such children were pulled out of their homes, and at between 3 and 6 months, they were once again pulled out of their temporary home.

Further, Master Doherty indicated, research had shown those children developed disassociate attachment disorders, because they were "yanked" from place to place without any consideration of their wellbeing, simply because it suited the county and state to work that way. Master Doherty emphasized the system was dysfunctional, and the state and county entered the lives of dysfunctional families and enhanced those problems rather than solved them. While she did not feel there were any mean-spirited or ill-willed entities in any one of the agencies, it was simply that the system the state was functioning under was absolutely harmful to the children.

Master Doherty remarked the courts could not continue to make reasonable effort findings, and allow those federal funds to be allocated to the state when it knew there was nothing being done. The pilot project would give the court the ability to at least say the state was addressing the problem in the two counties where it needed to be addressed, which would compliment the interim study committee to hopefully end the bifurcated system in 2 years. The pilot program would allow the state do something now, when the crisis existed, which could not be ignored for the next 2 years while everyone waited for the results of the interim study committee.

According to Master Doherty, there was a fiscal note attached to the bill which would absolutely enhance its success, and she hoped the committee would pass the bill with that note attached. With or without the fiscal note, Master Doherty stressed the bill needed to pass, in order to allow the system to function in a halfway decent manner on behalf of the children that it served, and to continue to guarantee the state’s right to receive federal funding.

Mr. Dini noted that Washoe and Clark were the only counties mentioned, but he felt the situation was actually worse in the rural counties that operated under state supervision. He felt that was where the breakdown occurred, because there were many different judicial districts, each with its own likes and dislikes, which did not afford the children the necessary protection. Mr. Dini stated when a child was placed in 8 foster homes in 8 years, something was wrong with the system, and nothing was being done about that problem. He expounded if such a pilot project was going to be initiated in Washoe and Clark Counties, there should also be information provided to DCSF and to the legislature, advising what could be done to improve the status of foster children on a statewide basis. He reiterated he felt the situation was worse statewide than it was in Washoe or Clark Counties.

Master Doherty agreed with Mr. Dini, and advised she had the highest hope for the pilot project in successfully addressing the issue in Washoe County. Further, she noted it was very important to those involved with the bill that they be responsible for their conduct and programs by reporting back to the legislature at the end of the project. Also to ensure that not only the good parts of the pilot project were shared, but the mistakes made in the attempt to improve the system were shared so they were not repeated.

Senator Washington articulated he would wholeheartedly agree with Mr. Dini that the situation needed to be reviewed on a statewide basis, and it was an atrocity that the system continued to "yank" foster children from one home and place them in another in a different area of the state. The situation should have been reviewed a long time ago, but like everything else, some things were just swept under the carpet. He commended Mr. Dini for his bill, and felt with all the proposed legislation, the situation might be addressed and hopefully "right the wrong" that the state had allowed to perpetuate.

Mr. Dini stated he hoped the pilot project would review the bureaucracy that had built up in the state, which he felt was 90 percent of the problem. When one person, such as a division manager, could stop the forward progress of cases in several counties, there was something wrong with the system. The state needed to avoid that type of concentration of power, and there needed to be an appeals process for parents to begin the process. Mr. Dini stated there needed to be more than one Deputy Attorney General statewide; he noted for the 15 rural counties, there was only one deputy assigned to handle adoption cases, which was absolutely ludicrous. Mr. Dini asked how one person could handle that many cases, and felt if the state and counties worked together, some improvement could be seen at the next session of the legislature.

Mr. Beers stated he wanted to underscore the importance of the issue, and felt it was one of the most important systems that needed to be "fixed." He wished the state and counties "good luck" on the pilot project.

May Shelton, Director, Washoe County Social Services advised the committee she wanted to provide information regarding how the project would work. A group from DCFS and Washoe County had been working together for several months to develop the concept, and were "fleshing" it out so that when the bill passed, Washoe County would be ready to implement the project. Ms. Shelton stated it would be a Joint Permanency Planning Pilot Project, and the unit would include three experienced, qualified workers from the DCFS workforce. Washoe County would contribute two workers, a paraprofessional and a supervisor, and would also provide the space. That unit would take cases on a random basis; currently, the county transferred approximately 160 cases per year to the state, and either one out of ever three, or one out of every two cases would be referred to the pilot project. Ms. Shelton explained each worker would carry no more than 18 cases to work towards permanency at any given time. The cases that would not be handled by the unit would be those cases that went straight to adoption, or the older children who would be moving toward independent living and would be transferred to DCFS for training.

Ms. Shelton advised what the bill would do, as explained by Senator Washington, would be to enable Washoe County and the state to take joint custody of cases. The Attorney General’s Office was not sure that two agencies could have custody of a case simultaneously. Also, the bill would enable DCFS to pay half of the cost of placement; Ms. Shelton indicated currently Washoe County paid $40 per day for emergency foster care, and with the pilot project, DCFS would pay $20 and Washoe County would pay $20.

As the committee was aware, Ms. Shelton stated the legislature set the rate for foster care reimbursement. The general reimbursement rate was less than $15, so when a child moved from county to state custody the foster care rate dropped, and it was difficult for the county’s foster parents to maintain care of those children on $13 to $15 a day.

Regarding Mr. Dini’s comments about the rural areas, Ms. Shelton explained that by statute, bifurcation existed only in Washoe and Clark Counties. DCFS handled all child protection and child welfare cases in the rural area. She thought the review board established by Mr. Dini’s bill, A.B. 158, along with appointment of guardian ad litem by the court would expedite the permanent placement of children. It would go a long way toward improving the quality of services.

In regard to the fiscal note, Ms. Shelton disclosed that DCFS did not ask for any positions when the bill was heard by the Senate Finance Committee, however, she did ask that two new positions be funded out of the three that DCFS was going to contribute. It was her understanding that Senate Finance approved one position for the project, and if Ways and Means saw fit to provide two positions, Ms. Shelton stated the county would be very happy to take the two positions. Further, she stated, DCFS was as committed to the project as the county and, in fact, she was asking the Board of County Commissioners for one position, and duties would be reassigned so that two additional workers could be assigned to the project.

What Ms. Shelton hoped would happen was that children would move into permanent placements faster, and at the "back end" where the county and DCFS were paying for foster care, that it would be saved to invest in the "front end." She explained with the Adoption and Safe Families Act, the county and state would be required to make every effort to reunite children with their families, and to move them into permanent placement.

Chairman Arberry asked if there was anyone else who wished to present testimony on the bill, and hearing none, declared the hearing on S.B. 288 closed.

Rick Combs, Program Analyst, Legislative Counsel Bureau (LCB) stated there were technical adjustments made to the budget, as follows:

• Expenditures in decision units M-200, E-125 and E-900 were funded with the incorrect revenue source and those technical adjustments were made to ensure the office had the sufficient amount of revenue authority for each appropriate revenue source.

• Expenditures for telephones in E-710 and E-720 were eliminated based on the fact that the office indicated it had received new telephones in the Carson City Office during FY 1999.

• A half-time Deputy Attorney General position had been eliminated, consistent with the manner in which the committee closed the budget for the Ethics Commission. That was based on the proposal that the commission would provide its own legal staff rather than using the services of the Office of the Attorney General.

Mr. Combs explained the cost allocation was revised based on the changes that were made after the Governor’s recommended budget was completed. Information had been submitted to the consultant who computed the cost allocation numbers, and those adjustments were then presented to staff. Mr. Combs stated he had made all of the necessary adjustments, which basically consisted of adjustments to the various revenue sources based on what the cost allocation plan produced.

Mr. Combs explained that major budget issues for the committee to consider included decision unit M-200, which recommended three full-time and two part-time Deputy Attorney General positions, two Legal Researcher positions, a Computer Network Specialist, an Information Systems Specialist, a Legal Secretary, two Management Assistants, and a half-time Administrative Aid. Those positions would be assigned to the Board of Social Workers, Committee on Domestic Violence, DMV/PS, Nevada Department of Transportation, Welfare Division-Child Support Enforcement, and Health Care Financing and Policy. Mr. Combs stated of the support positions in the decision unit, the Human Resources Division of the Attorney General’s Office would receive a Legal Secretary, a Legal Researcher, and a Management Assistant II. Further, he noted that although the office had not provided adequate performance measurement indicator data on which to base a recommendation regarding the need for a particular position for a particular agency, the number of new attorneys recommended in that decision unit did not appear unreasonable.

The committee should also note that 5 of the 9.5 non-computer-related positions that were recommended in decision unit M-200 were for the Human Resources Division, including two of the Deputy Attorney Generals that were recommended in the decision unit. Mr. Combs indicated the computer positions that were recommended in M-200 would be assigned to the Carson City Office to manage the Remote Local Area Networks (LANs). The Information Specialist II positions would be assigned to the Carson City and Reno offices to maintain local data bases, and develop a data base for legal briefs.

Regarding the ratio of computer positions to the number of computer devices, Mr. Combs advised the ratio LCB arrived at was approximately 100 devices per computer position, which compared to about 257 to 1 for the Welfare Division and approximately 300 to 1 for the Department of Information Technology (DoIT). Mr. Combs stated the method used by the Attorney General’s Office for calculating the ratio was that various computer positions were assigned to the office’s LANs and Wide Area Networks (WANs), and there were certain positions that only handled personal computer support. Based on the Attorney General’s Office calculation, the ratio was 165 to 1 as compared to LCB’s 100 to 1. Mr. Combs thought the 100 to 1 ratio was correct, but even using the 165 to 1 ratio, it was considerably better than the ratio for other state agencies. For that reason, commented Mr. Combs, LCB staff recommended the committee consider elimination of the two computer positions recommended in decision unit M-200.

Decision unit E-125 recommended increasing a current Grants and Projects Analyst from a three-quarter-time position to a full-time position, and also recommended an additional full-time Grants and Projects Analyst position. According to Mr. Combs, those positions would administer federal grants, and would be funded entirely from federal grant funds. One of the technical adjustments made by Mr. Combs would ensure grant funds were the revenue source used to fund those positions.

Continuing, Mr. Combs advised decision units E-710 and E-720 recommended various replacement equipment; the most notable items were new copiers, new computer servers, hard drives, network hubs, and 104 personal computers. Mr. Combs indicated he asked the Attorney General’s Office to provide a list of its current computer devices, and the office did have over 100 computers that would be more than 4 years old by the time the replacement could be completed. Further, he noted that office only received eight new computers from the 1997 session, and it would appear that the number was reasonable, even though it was high. It did appear that the office was on a 4-year rotational cycle.

Regarding decision unit E-805, Mr. Combs explained that unit would remove the Senior Computer Forensic Technician and the Computer Forensic Technician approved by the 1997 Legislature, from unclassified service and place them in the classified service. It also recommended funding for upgrades for five of the other computer positions.

Mr. Combs went on to explain decision unit E-900 would transfer an Investigator to the Private Investigator’s Licensing Board account. The Attorney General’s Office indicated that position currently worked 100 percent on activities for the board. Based on changes in the method the board would use to pay the office for its legal services, that transfer would seem reasonable. Mr. Combs noted that decision unit E-901 recommended an additional transfer of a Deputy Attorney General and a Legal Researcher to the Office of Consumer Protection.

Mr. Combs reported the Senate had included the Attorney General’s Office request for computer forensic lab equipment and training in S.B. 485, and Mr. Combs explained that was being referred to as the "high tech crime bill." The Attorney General’s Office would use reimbursement funds received from the tobacco settlement to fund the equipment and training that was requested. According to Mr. Combs, the supplemental equipment was not included in a decision unit, and was a request received by LCB, indicating the Attorney General had failed to submit the equipment and training to the Budget Division for consideration, and therefore, submitted the request after the fact.

Ms. Giunchigliani commented that she would request the portion of the budget dealing with the half-time Deputy Attorney General position for the Ethics Commission be held, based on the closings of the Ethics Commission budget. That closing included the Assembly Elections, Procedures, and Ethics Committee recommendation that a full-time Deputy Attorney General be assigned to assist the Ethics Commission. Ms. Giunchigliani thought the Senate closed by removing the half-time deputy, preferring outside counsel.

Mr. Combs agreed, stating that was the way the Senate had closed the budget, and he had made the technical adjustment based on the manner in which both the Senate and Assembly closed the Ethics Commission’s budget, and it would be inconsistent if the half-time position was not removed. Because the Elections, Procedures, and Ethics Committee recommended a full-time Deputy Attorney General position be assigned to the Ethics Commission, Ms. Giunchigliani advised she did not want to close the budget without consideration of that issue. She further explained that during public testimony, the Ethics Commission was concerned that it did not have staff that was adequately dedicated, and the Elections, Procedures and Ethics Committee felt instead of independent counsel, the commission should be assigned a full-time Deputy Attorney General dedicated specifically to it.

Chairman Arberry asked Mr. Combs if that was the only difference between the Assembly and Senate closure of the budget. Mr. Combs replied the recommendation he previously made regarding the two computer positions that were recommended in decision unit M-200, were eliminated from the budget in the Senate closing.

Mr. Dini noted another difference might be included in A.B. 158, because testimony indicated there was an additional attorney requested for Child Support, a position that could be transferred. The Senate Judiciary Committee heard testimony that another attorney was needed just for adoption; he also noted there had not been a hearing in the Senate Finance Committee to date on A.B. 158, so that issue had not been resolved.

Mr. Combs remarked the basis for A.B. 158 moving from the Assembly Ways and Means Committee was the fact that testimony was received from the Chief of the Human Resources Division of the Attorney General’s Office that the division could use the Child Support Deputy. That position had been included in The Executive Budget in decision unit M-200 to complete the requirements included in the bill. He stated he had gone through the budget and analyzed the duties of the Human Resources Division as recommended in the Governor’s budget. As previously indicated, Mr. Combs advised that 5 of the 9.5 positions recommended in decision unit M-200 that were non-computer positions were for the Human Resources Division. For the committee’s consideration, Mr. Combs explained the way the cost allocation plan worked for the Attorney General’s Office, was to provide the flexibility the office needed to move deputies around from various agencies they were assigned to, as the need arose. The cost allocation plan revenue would be adjusted in future biennia to make up for which agency was paying for the position.

Mr. Dini stated he felt the issue was whether or not the division could handle the job, because currently there was only one Deputy Attorney General handling adoptions in the 15 rural counties, which he felt was too much work for one attorney. Consequently, he seemed to never get the job done, causing a delay in adoptions.

Chairman Arberry announced the committee would hold Budget Account 1030, Attorney General Admin Fund, for further review.

Mr. Combs reported the account was the special account used by the Attorney General to pay for unexpected costs of litigation that arose from law suits not anticipated at the time budgets were created. The Governor had recommended a status quo budget for the account, which did not include any decision units; staff would recommend closure as recommended by the Governor.

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According to Mr. Combs, the Insurance Fraud Budget Account was also a status quo budget, as recommended by the Governor. He would point out that the reserve in the account, based on The Executive Budget, was dwindling and was projected to be only $6,317 at the end of FY 2001. Normally, advised Mr. Combs, it would be preferable that a much larger reserve be left in the account at the end of the biennium. The Attorney General’s Office had taken steps via legislation, which would increase the assessment on the insurance industry to help support the account, and he stated he was unsure what the status of that legislation was at the current time. Mr. Combs noted the budget would not enter a negative balance by the end of the biennium, so staff would recommend closing the budget as the Governor recommended.

Ms. Giunchigliani asked if S.B. 124 was the legislation alluded to by Mr. Combs. He advised it was S.B. 224. Was that an ombudsman bill, inquired Ms. Giunchigliani, or would it solely increase the fees. Mr. Combs replied it would basically increase the assessment and also effect how that assessment was proportioned between the Attorney General’s Fraud Control Unit and the Division of Insurance.

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Mr. Combs stated Budget Account 1037, was the Medicaid Fraud Control Unit budget, and he would review the technical adjustments for the committee. Mr. Combs reported those adjustments were primarily related to the new positions that were recommended in decision unit E-125. Adjustments were made based on the average expenditures of the employees currently housed in the account, and were also adjusted for the recommended October 1 start date for the new positions. Continuing, Mr. Combs advised decision unit E-802 was added to help pay for the costs of a Grants and Projects Analyst that was recommended in Budget Account 1030. The office indicated that a portion of the amounts necessary to pay for those positions would come from Medicaid funds as well as recovery dollars.

Decision unit E-125 recommended funding for two new positions for the Medicaid Fraud Control Unit, and funding for Internet access for 11 of the unit’s employees. Mr. Combs indicated The Executive Budget recommended funding 75 percent of the cost of the positions with Federal Title XIX funds and 25 percent with recovery dollars. The positions were requested on the basis that there was pending federal legislation, which would allow the unit to investigate and prosecute some Medicare cases, as well as Medicaid cases. Mr. Combs acknowledged that the federal legislation had not passed to date, and there was really not a strong prognosis that it would. Based on that fact, staff would recommend the committee consider disapproval of the new positions, allowing the Attorney General to approach IFC if the federal legislation was enacted, to bring in its funding source, as well as the request for the two additional positions.

Mr. Combs divulged if the committee decided to close the budget including approval of the two new positions, he would recommend a letter of intent directing the Attorney General not to fill the positions until the federal legislation had been enacted. Also, the committee should note that the Senate had closed the budget with elimination of the two positions, but did direct that a letter of intent be drafted to advise the Attorney General’s Office it could approach IFC and request those positions if the federal legislation was enacted.

The other issue Mr. Combs felt the committee should be aware of was the recommendation in The Executive Budget to authorize the Medicaid Fraud Control Unit to use its General Fund appropriation in both years of the biennium. The unit was also authorized to obtain a temporary advance from the General Fund if needed. Those recommendations were based on the fact that, historically, the account received 75 percent of its funds from Title XIX, and 25 percent as a required state match. Mr. Combs stated last biennium, 15 percent of the match was funded through recoveries and 10 percent through the General Fund. Based on the account’s performance in terms of collecting recoveries, and that it collected enough during the past 4 years to totally reimburse the General Fund, The Executive Budget recommended reducing the amount of General Fund contribution to approximately 3 percent. In return, stated Mr. Combs, the division would be allowed to apply for an advance from the General Fund if the recovery money was not realized in sufficient time to meet its expenditures.

Mr. Combs inquired if that motion would include allowing the division to approach IFC if the positions could be justified; Chairman Arberry advised that option was included in the motion.

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According to Mr. Combs, decision unit M-200 recommended funding for rental costs and copy charges for an additional copy machine. E-710 and E-720 were replacement computers, as well as other office equipment and furniture, including laptop computers, a glass partition, and security buzzer for the Reno office. Mr. Combs explained the secretary in that office was in a remote position, and the buzzer would be her security device. Staff would recommend closing the budget as recommended by the Governor with technical adjustments for computer hardware and software costs.

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Mr. Combs stated the technical adjustments in the account included the reduction of memory and hard drive upgrades in decision unit E-250, based on the fact that IFC approved a work program allowing the agency to purchase new computers during FY 1999. That action eliminated the need for hard drive upgrades during the upcoming biennium. Further, the cost for case management software was eliminated based on information received from the office that it would not be using the software during the biennium.

Decision unit E-250 recommended funding for computer hardware and software upgrades, as well as temporary clerical services, additional publications, and increased litigation and consumer education costs related to utility restructuring. Mr. Combs advised the temporary clerical services would be used for large cases that involved persons from across the country; it would allow the office to bring a person in to help input those names into a large case data base. He noted the office did expect an increase in litigation resulting from the deceptive trade practices that would result from the restructuring bill involving the electricity and telephone industries. The office also wanted to implement a consumer education program in regards to that restructuring.

Mr. Combs advised decision units E-710 and E-710 consisted of replacement computer and office equipment. Decision unit E-805 would increase the salary for one of the engineers in the account by creating a new Senior Engineer position, as that person had supervisory responsibility over the other engineer in the account. Continuing, Mr. Combs explained decision unit E-901 was the transfer decision unit mentioned in Budget Account 1030, the Attorney General Admin Fund, which would transfer a Deputy Attorney General and a Legal Researcher from that account.

Mr. Marvel inquired if the Public Utilities Commission was going to provide any consumer education along with the deregulation. Mr. Combs stated he could not answer that question, and he was not aware if there was any education included in the commission’s budget. Mr. Marvel stated he did not want to duplicate efforts "down the road." Mr. Combs suggested the Attorney General’s Office might be able to answer that question.

Anne Cathcart, Sr. Attorney General, advised the committee she was not aware of any specific plans regarding education, but indicated she would speak with the chief of Consumer Protection, and would, at the very least, give the committee the assurance that there would not be duplication of effort. Generally speaking, the Attorney General’s Office did make an effort to educate the public about changes that would effect them. Once again, she noted she would check that out and report back to the committee.

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Mr. Combs explained the only increases recommended in the account were for inflation and fringe benefit adjustments. Staff recommended closure as recommended by the Governor.

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Mr. Combs advised decision unit E-125 recommended allowing the Tort Claims Manager to attend the annual Public Risk and Insurance Management Seminar. The office indicated that seminar would provide the manager with an opportunity to determine the actions being taken by other states to improve their loss experience. Decision units E-710 and E-720 recommended replacement of a personal computer and two filing cabinets. Mr. Combs stated staff would recommend closing the budget as recommended by the Governor.

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According to Mr. Combs the decision units included funding to provide an additional training course, an increase in the registration fee for the National Association of Extradition Officials Annual Conference, and Internet access for the office. Also recommended were replacement of two personal computers and a printer over the biennium. Mr. Combs explained the decision for the committee would be whether or not to authorize the Attorney General’s Office to use the appropriation for the account in both years of the biennium, as recommended in The Executive Budget. The Governor recommended increasing the recovery revenue that was used to support the account, based on the Attorney General’s projections of that revenue. Mr. Combs reiterated that based upon the recovery revenue, the Attorney General’s Office felt it would be appropriate to allow it to use the General Fund appropriation in both years of the biennium.

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Mr. Combs explained decision unit, M-200, recommended funding for a new half-time Administrative Aid position, which would provide secretarial support to existing employees in the account. The decision unit also recommended eliminating the expenditures for participating in the Attorney General’s cost allocation plan. That was based on the transfer of an Investigator position from the Administration Account to the Licensing Board. Mr. Combs noted the board had been paying for the services of that investigator through the cost allocation plan, and the recommendation would have it paying for Attorney General services by the hour, in the same manner as most other professional licensing boards.

According to Mr. Combs, decision unit E-125 recommended funding for additional publications not purchased every year and, therefore, not included in the base. Decision unit E-175 would allow out-of-state travel for staff to attend two conferences that it had received authority to attend in the past, but were not able to attend during FY 1998. E-710 was the replacement of two personal computers in FY 2000 and one personal computer in FY 2001. Decision unit E-900 was the transfer of that Investigator from the Administration Account. Staff recommended closing the account as recommended by the Governor with technical adjustments for the new position’s October 1 start date, and the computer cost reductions.

Chairman Arberry inquired about the two conferences in FY 1998 that staff had been unable to attend, asking if that money transferred into the account, or would it be additional funding. Mr. Combs explained when staff did not attend, the costs were not included in the base budget because the expenditures were not incurred during FY 1998. When the board did not use the money, it went into the reserve for the account, and the board was asking for authority to expend those funds.

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Mr. Combs pointed out to the committee that significant changes had been made in the council’s account. During previous hearings on the account, it was indicated that the Attorney General’s Office, as well as the Executive Director for the Council were concerned about the manner in which the account had been funded in The Executive Budget. He explained the Attorney General’s Office was delayed in appointing an Executive Director and members of the council during FY 1998, and only had approximately 6 weeks of actual expenditures on which to base the budget request when it was required to be submitted. Because the council had now been in operation for 11 months, Mr. Combs reported he worked with the Executive Director to adjust the expenditures in decision units M-200 and E-275, based on the actual expenditures year-to-date in FY 1999.

Decision unit M-200 contained continued funding to support the personnel, travel, and operating expenses of the Executive Director, advised Mr. Combs, and decision unit E-275 was the funding for the training courses conducted by the council. Most of those courses were continuing legal education courses that were provided for prosecuting attorneys on a statewide basis. The Executive Director had indicated the council did plan to charge persons for attending the courses, and planned to charge enough to cover the actual expenditures of the courses. Mr. Combs stated he had adjusted the decision unit to reflect expenditures based roughly on $2,500 per course for nine courses each year, which was based on the Executive Director’s estimate of what would be provided. Mr. Combs noted he had also provided for the collection of that amount of revenue from those courses.

According to Mr. Combs, the decision before the committee was that decision unit M-200 included all the normal operating costs for the Executive Director, and in The Executive Budget, the unit was funded through gifts, grants, and donations revenue, which was the revenue the office had indicated was not secure. The Budget Office indicated it thought funding could be obtained through assistance from the various district attorneys throughout the state. Basically, the recommendation that was received from the Governor after the Economic Forum was to provide General Fund support in the amount of roughly $134,000 in each year of the biennium. Based on the technical adjustments that Mr. Combs had made, as well as the fact that there was $80,000 that would be balanced forward from FY 1999, he felt that amount could be reduced to $16,946 in the first year of the biennium, and $96,940 in the second year. The choice was basically whether to leave the funding as gifts, grants, and donation revenue, or whether to provide General Fund support for the council.

Mr. Marvel asked Mr. McCormick to come forward and explain how the program was working. He advised Mr. McCormick was the former District Attorney of Humboldt County and was now the Executive Director of the council. Mr. Marvel indicated he hoped that ultimately the training provided to district attorneys by the council would cut down on the number of appeals from prison inmates. Michael McCormick, Executive Director, Council for Prosecuting Attorneys, announced the council had sponsored about seven courses over the past year, and some of the attendees had commented that the course was the best continuing legal education course they had ever attended. Mr. McCormick stated the courses were aimed at things that were used by prosecutors and also law enforcement officers. Continuing, he indicated there was a recent class in Fallon entitled "Winning the DUI Crash Case," and one of the evaluations received from a participant indicated it was the best class he had attended in 5 years.

Mrs. de Braga asked if the cost of the courses would be prohibitive to those who wanted to take advantage of them. Mr. McCormick answered no, and explained the cost to participants was basically to cover the actual cost of presenting the training, such as meeting room space, and was absolutely not prohibitive.

Mr. Stevens stated the committee had one of two choices from the perspective of staff. One would be to include the dollars from grants, gifts, and donations as originally recommended by the Governor, or follow the revised Governor’s recommendation, which would put General Fund dollars into the budget. He remarked there were some carry-forward dollars that would be included in the first year of the biennium, and the General Fund appropriation would be lower, per the figures provided by Mr. Combs. Mr. Marvel asked if the Senate had closed the budget. Mr. Stevens replied in the affirmative, stating the Senate closed by adding the General Fund dollars in the reduced amount.

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The IFC, at its December meeting, approved the increase of the Ombudsman position from a .51 full-time employee to a .75 full-time employee, and Mr. Combs stated he had made that technical adjustment. That increase would be funded through assessments against persons who were convicted of a battery that constituted domestic violence.

Mr. Combs indicated the committee might wish to consider a possible letter of intent. He explained that the Attorney General’s Office currently administered another budget account for domestic violence that was not included in The Executive Budget, which was mentioned during past hearings for the Attorney General’s budgets. Mr. Combs announced approximately $4 million in grant funding had been received in the account thus far since the account was approved. Based on the amount of money coming into the account, Mr. Combs felt it was reasonable to include it as part of The Executive Budget for the legislature’s consideration. He indicated it was a "pass-through account" and funds were then used by the Attorney General to disburse mainly to law enforcement agencies for training on domestic violence matters. Mr. Combs recommended the letter of intent be issued directing the Attorney General’s Office and the Executive Budget Office to include those grant funds in The Executive Budget for the 2001-2003 biennium.

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Mark Stevens, Fiscal Analyst, LCB presented the closing report for Vice Chair Evans, Chairman of the Subcommittee on Human Resources/K-12 for the Division of Health Care Financing and Policy to the Assembly Committee on Ways and Means, as follows:

Mr Marvel asked how many children were currently involved in the Check-Up program. Electing to respond was Steve Abba, Sr. Program Analyst, LCB, who advised the current enrollment was approximately 5,600 children. Mr. Marvel then inquired about the monthly increase. Mr. Abba stated the numbers fluctuated, however, it was approximately 300 to 400 additional children per month. Mr. Marvel asked if Mr. Abba felt comfortable that the caseload would be that high. Mr. Abba stressed it was difficult to determine how high the caseload would go because it was a new program on an up-swing. He stated the projections were liberal, and indicated by FY 2001, the program would be up and over 10,000 children, and that was why the subcommittee looked at moving monies from FY 2000 to FY 2001, and added the additional money to cover at least another 1,000 children. Mr. Abba advised if the enrollments continued at the current rate, that funding should be sufficient for the program up to the beginning of the next legislative session. Also, the division would be allowed to move monies between fiscal years to accommodate caseloads, as well as move monies from the Medicaid budget to the Check-Up Program, if necessary. Mr. Marvel inquired if there would be periodic reports to IFC regarding the caseload. Mr. Abba stated that could be done.

Mr. Stevens continued his presentation as follows:

Mr. Goldwater stated there was an issue which the subcommittee dealt with, that he felt the full committee also needed to deal with, and that was the Medicaid waiver for the disabled. The subcommittee was presented with three options, one contained a substantial amount of money for an Independent Choices Waiver (ICW), one was less money for the same waiver, and the third was the expanded disability waiver. Those options were presented and there was reluctant acceptance by those in the disabled community for the expanded disability waiver.

Mr. Goldwater commented that after the subcommittee met, persons from the disabled community contacted him and advised that was not the choice they really wanted, but did not want to disagree and have the subcommittee think they did not want further services. Mr. Goldwater announced the disabled community wanted the ICW, and even though that would not serve as many persons as the expanded disability waiver, it did provide a higher quality of life and more services to fewer persons. The representatives from the disabled community thought, and he was also compelled to think, the ICW would do more good. He was unsure of the exact amount of funding requested, but did not think there was a huge difference. If possible, Mr. Goldwater asked the committee to consider amending the budget closing to fund the ICW for 25 persons, rather than the 60 people on the expanded disability waiver.

Chairman Arberry inquired how much more that waiver would cost. Mr. Stevens replied, if memory served, the subcommittee added approximately $1 million to expand the current waiver over the biennium. The ICW could be funded in any amount selected by the committee, but Mr. Stevens advised the figures that had been utilized most often was approximately $2.4 to $2.5 million, with most of the allocation made during the second year of the biennium. Further, noted Mr. Stevens, there were a number of issues related to that, and based on the information coming from the advocates regarding the waiver, there would be an immediate waiting list for services. He remarked there was a cost projection ranging from the $2.4 to $2.5 million figure over the biennium, to $30 million over the biennium under the worst case scenario of all persons being served at a maximum level of services. Mr. Stevens stated there was great potential for increasing General Fund dollars in the future; there were also some legal issues involved in any decision the committee might make. He noted Brenda Erdoes, Legislative Counsel, was present and could advise the committee concerning the legal issues. She had explained that situation to the subcommittee, and if the committee were to consider the ICW, Mr. Stevens felt it would be wise to understand the legal ramifications.

Mr. Abba felt some misinformation had been provided. He explained the expansion for the physically disabled waiver would include an expansion in services that would be provided as well. He remarked that division staff had testified before the subcommittee that the expansion of those services would allow for the treatment of severely disabled individuals, also testifying that the expansion of services would allow the division to provide the same type of services as those provided through the ICW. Mr. Abba indicated the division had also informed him that there were 13 cases reviewed by the division that were discussed as being eligible for the ICW, and it looked at those cases to see how they would relate back to an expansion of the physically disabled waiver. Some of the circumstances of those 13 individuals had changed from the time the ICW was first developed to the present time. Mr. Abba related 3 persons were not in a nursing facility now, 2 of the 13 had passed away, and 1 of the 13 was in the Aging Services Division’s Community Home-Based Initiatives Program (CHIP). Of the seven remaining clients, advised Mr. Abba, three were in a semi-comatose or vegetative state, and four of the seven were good candidates for the physically disabled waiver program, and could be immediately assisted through that waiver program with the expanded services.

According to Mr. Abba, the division also reviewed nine additional clients who would qualify for the ICW, and were not part of the original group of individuals identified as possibly eligible. Of those nine clients, one had already been discharged to independent living, two were currently on the physically disabled waiver, six would be eligible for the physically disabled waiver and could be moved out of institutional care with the expanded services that would be provided through the amended waiver. Mr. Abba indicated that the physically disabled waiver could begin immediately; there needed to be an amendment to the waiver, however, the division was prepared to pursue that and get the program up and functioning once the Health Care Financing Administration (HCFA) approved the amendment. Mr. Abba declared the subcommittee had been apprised that not only could the legislature deal with the existing waiting list, but also through the expansion of services, the same type of services could be offered as those being offered through the ICW.

Mr. Goldwater stated that seemed to make sense, and that was why the subcommittee took the action regarding the expanded waiver. However, the part of it that did not make sense, and he did not portend to tell the handicapped community what was better for them, was that those persons felt the ICW was the best choice. Mr. Goldwater asked how the state could provide the same services as the ICW when the actual money expended per case was quite a bit less and the cap on each case was also significantly less than the ICW. Mr. Abba explained that the money built into the budget was entirely program-related, and the two staff positions were also program-related to provide the additional case management services. With the ICW, there were a lot of additional funding costs required for administration, such as three new positions versus two, data processing money because it would be a new program which would require a new data base, and new codes for medical services, et cetera. In the beginning, at least, Mr. Abba noted there would be significantly more administrative costs.

Mr. Marvel pointed out the state started independent living in 1985, and asked if anyone had ever conducted a cost benefit study regarding the difference in cost for home bound persons versus those who were institutionalized. Responding was Janice Wright, Administrator, Division of Health Care, Financing and Policy (HCF&P), who stated that was one of the requirements of HCFA for the division; it must consistently, on a quarterly basis, demonstrate to HCFA that there was a cost savings, both in state and federal monies. The division compared the cost of institutionalization versus the cost of the waiver services, and monitored those costs in order to facilitate a quarterly report for HCFA. Ms. Wright related that savings had to be generated to the satisfaction of the Federal Government, and she felt it was working quite well.

Ms. Wright mentioned the physically disabled waiver had been up and running for over 10 years, and the division was serving 125 clients at the present time. She noted there were 162 persons on the waiting list, and some of the dissatisfaction was because of the people on that waiting list; it was a question of funding. Was independent living cheaper than institutional care, asked Mr. Marvel. Ms. Wright replied there were some costs generated in an economy of scale environment that could be cheaper, however, for some individuals that was not necessarily the case. For example, as previously stated by Mr. Abba, several of the individuals reviewed for the ICW were currently in a semi-comatose or complete vegetative state. In that type of environment, Ms. Wright indicated, there would not necessarily be a cost savings if those persons were in a home environment, because additional services, and additional equipment had to be supplied. Further, she stated, 24-hour care could not be provided as easily and as cost-effectively as it could in an institutional setting. For persons without the cognitive skills to be able to direct their own care, there were some costs that could increase in a home environment.

More typically, continued Ms. Wright, the clients the division attempted to serve were those who had a certain degree of quality of life that allowed them to direct their own care. There could then be an economy of scale, as long as the division monitored those clients on a regular basis and provided the information both to the federal and state governments. Ms. Giunchigliani asked about the economy of scale, stating she found it offensive that HCFA would even allow the issue of efficiency versus the quality of life of those individuals to be the measurement scale, and was that Ms. Wright’s testimony. Ms. Wright stated that was not her testimony; the concern was that it was very difficult to make a decision at any point in time, because it was a person’s life that was involved, and when that life was reviewed, there were some decisions that had to be made. The decision had been made regarding the waiver to serve more clients, rather than serving every client. She stressed those were decisions that were extremely hard to make, and no one wanted to be in that position.

Ms. Giunchigliani asked what were the expanded services that were allegedly being granted to those individuals. Ms. Wright replied the expanded services that were part of the waiver right now were case management, homemaker services, and a personal emergency response system. She noted personal care attendant services were already provided as a state plan service, and in the expansion that was envisioned with that waiver, there would be additional revenue available to provide the same services that were proposed in the ICW. There was a list of services prepared by the Department of Employment, Training and Rehabilitation (DETR), and those same services could be added to the existing waiver to provide exactly the same quality of care. Ms. Giunchigliani asked what the benefit would be. Ms. Wright stated the benefit would be due to the fact the infrastructure was already in place, thereby creating a savings. If the division was currently serving 125 people, and it was going to serve 60 more, the infrastructure could easily be built up. Ms. Giunchigliani then asked if there was a cap. Ms. Wright replied the capped amounts were only revenue dollars, there was not a cap on what could be spent on each individual client.

Ms. Giunchigliani stated if the division hit $20,000, or whatever the "magic" number might be, then would services be terminated; she requested clarification of the budgetary cap. Ms. Wright advised what the division was allowed to do under the waiver was select by patient and by aggregate, those were options that were provided by the Federal Government. The best way to administer such a waiver was to go ahead on an aggregate basis, indicating that all of the costs for all of the clients that were being served were not exceeding the amount that it would cost to house those persons in an institutionalized setting. Therefore, stated Ms. Wright, what happened was there were occasional changes in a patient’s case, for instance, a diabetic patient who was hospitalized would incur additional expense. However, the division would not want to terminate the waiver services to that client, recognizing the situation was temporary, and on an aggregate it would still spend less dollars by having that person in a home environment. She reiterated that while that client might temporarily be in a hospital, it was a short-lived situation and the person would eventually be released. The aggregate was the best method to use for the individual client.

Ms. Giunchigliani stated other than looking at the numbers, why would the disabled community prefer the ICW, which would serve less clients, but provide better services. Ms. Wright advised the original physically disabled waiver that Medicaid administered was limited in services, and that was why the disabled community would prefer the ICW. By the additional funding that was being made available, Ms. Wright explained that Medicaid could offer the same services and the ICW, and could offer them in a more cost-effective manner, only because the division already had the infrastructure built up. She advised the division was currently serving 125 persons in the waiver, and expanding the waiver would allow the division to bring on 60 additional clients. Ms. Giunchigliani stated if that was the case, why did the division need the legislature’s permission to add the additional services to the current waiver. Ms. Wright replied the division did not have the money to add the services.

Ms. Giunchigliani commented she was curious where the least restrictive environment would fall in the waiver options. Ms. Wright stated the least restrictive environment was generally a home setting if there was family involvement, and if there was no family involvement, then the best choice appeared to be assisted living. She explained that assisted living in a variety of complexes, several of which were available, would allow the division to send its therapist, personal care attendants, and homemakers to that location, where they could serve a variety of clients. Ms. Giunchigliani indicated the ICW issue was to take individuals who would not normally qualify under the old waiver out of an institution and begin to move them into the home and/or community setting. Those individuals who were within that disabled community believed that was the more appropriate approach for the legislature to consider rather than just considering where cost savings might come in.

Mrs. de Braga asked, under the definition of assisted living, if group homes where several disabled persons lived together were included. Ms. Wright replied that those homes did fall under assisted living, and the division currently had those types of living arrangements for the division’s physically disabled clients; there were some living in Housing and Urban Development (HUD) housing, and there were a variety of different options available. Ms. Wright conveyed the best choice for clients was to remain in the home environment, but if there was no family support that was extremely difficult, and that was the reason the division had other options available for housing.

Ms. Erdoes informed the committee that the case Mr. Abba referenced was the Olmstead case, and she would explain how that would effect the State of Nevada. She stated Olmstead was a case from Georgia that was argued before the U.S. Supreme Court on April 21, 1999, and a decision in that case was not anticipated until sometime in June 1999. That was unfortunate, because she felt the Legal Division could provide much better direction if it had a "crystal ball" and knew what the U.S. Supreme Court was going to do. Ms. Erdoes stated the case was based on the Americans with Disabilities Act (ADA) requirement that specified, "No qualified individual with a disability shall, by reason of such disability, be excluded from participation in, or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity."

According to Ms. Erdoes, the U.S. Attorney General’s regulations interpreting that requirement said, "A public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of the qualified individuals with disabilities." Ms. Erdoes explained the actual holding in Olmstead basically stated, "We hold that whereas here a disabled individual’s treating professionals find that a community based placement is appropriate for that individual, the ADA imposes a duty to provide treatment in a community setting, the most integrated setting appropriate to that patient’s needs." According to Ms. Erdoes, the major change, if the U.S. Supreme Court upheld the Olmstead case, would be that the defense used by most states in the past to those types of ADA violation cases, that there were inadequate state funds provided, would no longer suffice. Ms. Erdoes noted under Olmstead, the court indicated that inadequate state appropriations did not excuse non-compliance with federal law. Some of the factors reviewed by the court were how the state funded the program, and if there was an immediate waiting list. Ms. Erdoes indicated she understood from Mr. Abba that most of the Medicaid waiver programs were capped, and there were waiting lists, which she indicated was worrisome.

To give the committee an idea, Ms. Erdoes commented that in the Olmstead case, the court was reviewing a case where the Federal Government had provided match money for 2,100 placements and the state only funded 700. Ms. Erdoes was unsure of the significance of that one-third ratio, and unfortunately, when the state had to comply with a law that was based on case law, there were no absolutes, as there were in statute. Ms. Erdoes indicated she could not tell the committee that absolutely, if there were a waiting list, the state would have a problem. She could tell the committee that if the Olmstead case was upheld by the U.S. Supreme Court, the defenses that states had used in the past to ADA cases, would likely not be available in the future. Ms. Erdoes stressed the importance of looking at the funding of the waiver programs. Again, she advised she could not tell the committee that Olmstead would or would not be upheld. However, it was not just one case out of the ordinary, but rather was actually the extension of a long line of cases that had been moving in that direction for quite some time.

Ms. Giunchigliani stated a waiver was a waiver, and the court was not distinguishing what type of waiver the state filed, it was just whether or not the state was properly providing the services. Ms. Erdoes replied in the affirmative, as long as it was waivers that served disabled persons, because the case was based on the ADA. The court did not seem to be specific as to any one waiver, the point was how the waivers were funded. Ms. Giunchigliani said taking that one step further, if the state was not providing full funding for special education services in the State of Nevada, could the state be liable as well. Ms. Erdoes advised she could not predict that with any certainty, but there could certainly be an ADA case made in that instance.

Mr. Dini stated perhaps the committee should compare the two waivers, the ICW and the existing waiver with expanded services including the additional 60 clients, as approved by the subcommittee. Ms. Wright reiterated the division could provide the same services as those offered in the ICW. The design would be to serve additional clients, and the division had made an assessment of those persons on the existing waiting list, and found that the services most needed would be some type of environmental access adjustments. Ms. Wright explained if a client was able to live at home except for the fact that the home did not have a wheelchair ramp, the division could make that adjustment. Another service would be meals, which were very important to disabled clients, and so became an important service for the division. Specialized medical equipment would be another service the division would add, anything clients might need in the home environment or in assisted living.

Ms. Wright indicated there were a variety of other services the division would be required to add over and above what Medicaid currently provided. For instance, a current State Plan service was transportation, and there might need to be enhanced transportation for some of the clients if they were in a home environment or assisted living. At the current time, Mr. Wright indicated there was no restriction from HCFA whether the division provided the services, or whether they were done through DETR. Many clients were in a Medicaid program called Rehabilitation Case Management Services, which was designed to be an intensive rehabilitation teaching or training program. She explained the individual who had suffered some type of traumatic brain injury or some other type of severe injury, could have intensive training for a short period of time. When the client learned those skills, it was imperative that the division moved that client as quickly as possible into an independent living environment, rather than placement in an institution so the client would not lose the ability to maintain those skills.

According to Ms. Wright, the current case managers that worked with those clients could move them directly into the physically disabled waiver so they did not lose any ability of skills. The case manager would determine at that time, which specific kind of services that client needed. She stated the division could offer the whole menu of services, and then pick the ones that were designed per the client’s needs.

Mr. Dini asked if the budget closing for the existing waiver, including the 60 additional cases, would provide the necessary help, along with those services. Ms. Wright replied in the affirmative, noting it would be an addition of approximately $928,000 in General Fund dollars over the biennium. When that amount was added to the current services, it would allow the division to enhance the services based on the client’s needs, and also serve the additional 60 persons. Mr. Abba stated the enhanced services would also provide for respite care.

Ms. Giunchigliani stated at the beginning of session there were budget presentations, and the waiver issue came up based on legislation passed last session. That waiver had not been initiated, mainly because not enough revenue was put into the waiver, and asked if the ICW was the waiver approved last session. Mr. Abba stated that was correct. He explained that because there was much confusion regarding what the waiver included, the legislation required that prior to implementing the waiver, the agencies involved come before IFC to discuss exactly which clients would be served, the type of services offered, and the overall costs. Based upon the business plan that was submitted to the Joint Subcommittee on General Government, as well as the Joint Subcommittee on Human Resources/K-12, the costs for the waiver were more than what had been included in the appropriation for S.B. 433 from last session. Mr. Abba noted that was part of the problem, and the waiver was still not completed; within the agencies there were still a number of problems that had to be worked out.

Ms. Giunchigliani said if the budget closure would simply take a modification of what was available by expanding services for a community that had not been served well in the past, why did it take so long to write that waiver. Mr. Abba advised he could not address the issue of the writing of the new waiver; he could address the issue of an amended waiver, which took less time, because it was already HCFA approved. Ms. Giunchigliani asked why the current waiver could not be amended and called the "Independent Choices Waiver." Mr. Abba stated there was a new set of criteria that had to meet the issue of cost neutrality. Ms. Giunchigliani stated that was where she was getting confused, because if it took that much more for something that was so simply identified as adding a few more services on the current waiver, then something was missing. She remarked the committee wanted to do what was best for the disabled community, but it was just trying to determine what the best program was for that community, and also one they would prefer. She felt that needed to be taken into consideration. Ms. Giunchigliani stated she was frustrated by not having a clear picture of what would be best for the committee to do legislatively.

Mr. Hettrick commented he had made the initial motion at the subcommittee on the basis of testimony from persons attending the hearing, and there was a great deal of input received after the hearing. Listening to the testimony again, it appeared to Mr. Hettrick that 60 persons served with expanded services that would match those available under the ICW, rather than only 25 persons being served, was still the right thing to do. He agreed that the information was hard to fathom when it appeared the services would be the same, more people could be served, yet it cost less, but based on the testimony heard by the committee, he thought it was the right thing to do. Mr. Hettrick indicated he would vote to approve the report of the subcommittee.

Mrs. Chowning reminded the committee that however it closed, the DETR budget had to be consistent, and she believed what was being recommended by the subcommittee was the way the DETR budget had closed. She then asked how many persons were still not going to be served, and would more be served if the committee chose the ICW. Mr. Stevens advised he thought the waiting list contained 162 applicants under the current waiver list, and 60 people would be served from that list with the additional funds recommended by the subcommittee, leaving approximately 100 clients on the waiting list. He indicated the number of individuals that were estimated to be served under the ICW was 25, and that was the difference in the number of persons served.

Mr. Parks inquired if it would be possible to close the budget with the exception of the Medicaid waiver for the physically disabled, and give the committee time to further review the options. He felt members were confused about the issue. Mr. Arberry replied that while he thought Mr. Parks’ suggestion had merit, unfortunately there simply was not sufficient time left in the session to accommodate that suggestion.

Mr. Goldwater stated he was still confused, because on one hand Ms. Erdoes testified that the Olmstead case would open the state up to more liability if it did not expand services, yet the committee was going to provide the same services under the expanded disability waiver. He stated it was confusing, and ask Ms. Wright to correspond with committee members, indicating that the state was expanding services and the program would be monitored. He indicated if the committee voted to approve expanding the existing waiver, that correspondence would give him a great deal more comfort.

Ms. Giunchigliani stated the waiver issue aside, the committee was dealing with Medicaid dollars, and she wanted to know if there was anything in the closing the committee needed to know about regarding the dental school and diversion of Medicaid dollars. Mr. Abba indicated the way the budget closed did not include a provision for funding of the dental school; the budget that was before the committee provided services that were the normal Medicaid services, with the exception of the expanded physically disabled waiver. He advised the normal service was based on current services plus caseload projections, and additional funding had to be added because of the projection for caseload increases. The budget included no special money for a dental school; there was money included for dental services based on current level of services and current caseload. Ms. Giunchigliani asked if that was in the Nevada Check-Up budget. Mr. Abba replied the level of dental services was built into the budget under the categories, "current year,’ "first prior year," and "second prior year medical." All medical services were paid out of those three categories. Ms. Giunchigliani asked about the funding for the new person who would work at the Chancellor’s Office; Mr. Abba advised there was no money built in the budget for such a position.

Mr. Stevens remarked the Higher Education Subcommittee did vote to include staff’s recommendation that if the dental school went forward, it would have a separate budget account. The subcommittee talked about placing it in the University of Nevada, Las Vegas (UNLV) budget, however, Mr. Stevens stated it was recommended to separately identify those resources in a separate budget account. He advised there was a vote taken in the subcommittee, however, nothing had surfaced on the Assembly side regarding the positions that were proposed to be added in the Chancellor’s Office. That had been discussed in budget closings on the Senate side and that budget was held based on receipt of additional information prior to taking action.

Ms. Giunchigliani stated there was too much misinformation, and the committee had not really held a hearing per se on anything along those lines, and she personally would not vote to close certain budgets that might tie the committee’s hands, or create a domino effect. She indicated she had recently spoken to Vice Chair Evans, who voiced her concern. Ms. Giunchigliani advised she was not suggesting the state not serve the dental needs of children, and she would commend Senator Rawson on his work in that area. However, Vice Chair Evans’ concern was that the committee would start down that road, and become committed to a facility, et cetera, without having studied the issue of seeing what and where the need was, and also what factors drove that need. Every time the committee had gone forward on something like the dental school, there had been a study completed prior to taking action, such as Mr. Perkins’ Henderson college issue. Ms. Giunchigliani remarked she had informed Vice Chair Evans that she would bring up the issue so the committee knew what direction it was moving in.

Mr. Stevens noted, as stated previously by Mr. Abba, in the Medicaid budget all that was built in were dollars that would be expended for dental services, irregardless of how they were expended. He thought Senator Rawson felt the dollars that were built into the budget could then be used to support a dental program, or services provided by the dental program. Mr. Stevens advised whether that happened or not, the same amount of dollars would need to be built into the Medicaid budget to provide dental services. Ms. Giunchigliani thanked Mr. Stevens for the clarification, and stated she did not feel she could support the budget closing based on the disabled issue, as she was not clear regarding what would be best and, in fact, leaned toward the ICW.

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Chairman Arberry asked members to consider committee introduction of the following Bill Draft Request (BDR):

• BDR 16-1749 authorize use of proceeds from offenders’ store fund to pay certain costs related to operation of restitution centers. (A.B. 687)

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Birgit Baker, Program Analyst, LCB, stated the account was established to provide resources relating to unanticipated caseload increases for the Nevada Attorney for Injured Workers, and the Hearings Division of the Department of Administration between legislative sessions. To access the funding in the Hearings reserve account, the two agencies had to submit work programs with appropriate workload justification to the Budget Division, who in turn forwarded them to the IFC for approval. Ms. Baker stated the only change in the budget was the Joint Subcommittee on General Government recommended replacement of $115,000, which was reverted during the current biennium for the Hearings Division to address computer programming needs associated with the development of an automated tracking and scheduling system. She indicated the agency testified that it was important, given the implementation of the 3-Way Insurance, when it would have many more people to notify.

According to Ms. Baker, S.B. 55, as amended, and currently pending in the Assembly Commerce and Labor Committee, would require additional administrative oversight of the workers’ compensation hearings and appeals processes. The original bill contained a fiscal note of approximately $3.9 million for the upcoming biennium, and as amended, the fiscal note was still approximately $2 million. Ms. Baker indicated the bill had not been moved from the committee, and fiscal staff would request permission to place the funding into the Hearings Reserve Account if that bill was passed. Ms. Baker reiterated the agency would have to present a plan and come to the IFC, so it would not be an automatic add to the Hearings Reserve budget.

Ms. Baker explained employers insurance was a rather large budget, however, the agency was exempt from the State Budget Act, which meant it could make any changes to its budget without the approval of the Budget Division or the IFC. Douglas Dirks, Chief Executive Officer, advised LCB that the budget submitted by the agency represented the best estimate of the resources needed by the agency to operate during the upcoming biennium, with or without the passage of S.B. 37, which was the Governor’s bill to privatize the agency.

According to Ms. Baker, the only adjustment recommended by staff was that the assessment for the Workers’ Compensation and Safety Fund, which supported all of the regulatory programs, be increased to match what the committee had approved for those budgets. Also, because the basis for that assessment would be claims, Ms. Baker explained the agency would be paying a bit more than originally anticipated.

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Ms. Baker informed the committee that because the budget was administered by the Employers Insurance Company of Nevada (EICN), it was also exempt from the State Budget Act. Again, she explained, Mr. Dirks indicated the budget submitted was the best estimate of the resources the agency would need. There were no changes recommended in the budget, and Ms. Baker stated it would be as requested by the agency.

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Chairman Arberry announced the committee would commence with review of the following bills:

According to Chairman Arberry, the legislation was processed each session for cultural activities.

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Mr. Stevens reminded the committee it had taken action on the bill, and had rescinded that action because of needed amendments. He advised A.B. 342 contained the one-shot appropriation related to license plates, and the redesign of license plates. The bill would provide dollars to produce the license plates, not only the manufacturing of the "blue" license plates, but also the redesign of existing plates. Mr. Stevens stated S.B. 267 had passed, which allowed DMV/PS to determine the cost of manufacturing a license plate and collect appropriate fees. In essence, explained Mr. Stevens, if A.B. 342 was approved, it would provide the money for those plates, and if the department also charged a fee for the costs of the plate, it would receive what amounted to a double payment.

According to Mr. Stevens, Fiscal Division staff had conferred with DMV/PS and was recommending that the bill be changed as follows:

• Section 1, line 3: change the sum of $4,928,923 to $3,373,076;
• Section 1, (1) line 4: change the word "refurbishing" to "manufacture," because DMV/PS would be manufacturing the new "blue" plates, and change the amount of $430,976 to $148,867;
• Section 1 (2), line 6: change the amount of $4,394,701 to $3,610,140;
• Section 1 (3), line 8: change the amount of $103,246 to $14,069;

Mr. Stevens also advised that staff proposed to add language that would change the language that was previously passed in S.B. 267. Instead of allowing the cost of manufacturing the plate and the fee charged to the individual to be deposited in the Registration Division’s budget account, it would be deposited into a revolving account for issuance of special license plates. Based on legislation that had already passed, $25 for each license plate would go into the revolving account. There was a provision in the law that any amount above $50,000 in that account at the end of the fiscal year reverted to the Highway Fund. Mr. Stevens stated ultimately, it would provide the one-time money for the cost of the plate; the fee charged by the department would be deposited to the revolving account and ultimately be reverted to the Highway Fund. Mr. Stevens advised such action would not impact prison industry funds.

Mrs. Chowning asked Mr. English to come forward and state to the committee whether or not the bill would allow the division to do the job with the special plates, and the manufacturing of the new "blue" plates, which were replicas of the old "blue" plates. Pete English, Chief, Registration Division, assured the committee that he had met with staff to review the amendments, and felt as amended, the bill would allow the division to do what it needed to do in the production of the plates.

Mr. Dini stated he did not understand the money part, and asked when the money was collected from the customer, did that go back to the Highway Fund eventually. Mr. Stevens stated the way the bill was written, DMV/PS would receive the appropriation, with the dollars going into the Registration Division. That could ultimately be reverted at the end of the year, or could be augmented for some other purpose, if it did not meet the IFC threshold. Mr. Stevens did not think the bill was designed to enhance the Registration Division’s budget, but rather was designed to revert to the Highway Fund, and the amendments would ensure that the reversion would occur.

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Mr. Stevens stated LCB staff was in receipt of information from Steve Clark, Deputy Executive Director, Commission for Veterans Affairs, that the committee should absorb before it made a decision regarding the bill. S.B. 263 would remove the Office of Veterans Affairs from the Office of the Military, making it a "stand-alone" agency. Mr. Stevens advised he was also in receipt of information from the Budget Division concerning the move; he wanted the committee to be in possession of the information before it made a decision.

Chairman Arberry stated the committee would review the information and revisit the bill at a later date.

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Ms. Giunchigliani stated S.B. 163 passed, which also required that registered group homes become licensed and, therefore, she would recommend deleting that section from A.B. 373, as it was no longer necessary. She noted that based on testimony received, subsection 3, line 2 would be amended to add a geriatric care case manager, and to add the recommendation that by regulation guardianships might also be reviewed. The Health and Human Services Committee had not wanted to allow for payment, but Ms. Giunchigliani remarked she still believed if a facility was properly licensed in the health care area, it should be able to charge for that service. The bill would not open up the field to anyone and everyone that wanted to hold itself as a referral agency. Further, the fiscal note would be reduced down considerably to approximately $45,000 in the first year of the biennium, and $90,000 in the second year. Ms. Giunchigliani noted the key piece was that apparently there were businesses that held themselves as licensed referral agencies, however, were not licensed by any agency other than holding a business license. The bill would not prevent anyone from participating in the business, but the intent was that such persons have a health background.

Mr. Stevens stated there was a revised fiscal note from DETR based on the first reprint of the bill, however, he was unsure how the proposed amendments would change that note, if at all. The agency indicated, based on the first reprint, that there would be about a $40,000 cost offset by licensure fees in the first year of the biennium, and about a $59,000 cost in the second year, again offset by licensure fees.

Chairman Arberry stated he wanted the committee to review the proposed amendments and review the bill at a later date.

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There being no further business to come before the committee, Chairman Arberry adjourned the hearing at 10:50 a.m.

RESPECTFULLY SUBMITTED:

Carol Thomsen,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

DATE: