The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Wednesday, February 3, 1999, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

Senator Bob Coffin

Senator Bernice Mathews

STAFF MEMBERS PRESENT:

Judy Jacobs, Committee Secretary

OTHERS PRESENT:

Lorraine T. Hunt, Lieutenant Governor, Office of the Lieutenant Governor

Don Hataway, Deputy Director, Budget Division, Department of Administration

Andrea Reitan, Deputy Chief of Staff, Office of the Lieutenant Governor

Dean Heller, Secretary of State, Office of the Secretary of State

Scott Scherer, General Counsel, Governor’s Office

Janine Hansen, Lobbyist, State President, Nevada Eagle Forum

Mary Boetsch, Chairman, Commission on Ethics

Ron W. Sparks II, Director, Western Interstate Commission for Higher Education

Bob Atkinson, Principal Budget Analyst, Budget Division, Department of Administration

Senator Raggio reported he had requested that calendars be placed in all committee rooms showing the deadlines for bills, although he noted most bills that will be referred to the Senate Committee on Finance will fall under the exempt provision. There being no requests for bill drafts, he commenced with the hearing on the budget for the legislative auditor. He announced the Senate audit subcommittee consists of Senators Jacobsen, O’Donnell and Coffin. He noted any person who appears before any committee is an invited guest and should be treated with courtesy.

Wm. Gary Crews, CPA, Legislative Auditor, Audit Division, Legislative Counsel Bureau, provided each committee member with a binder consisting of Audit Report Summaries (Exhibit C. Original is on file in the Research Library.). He said the audits included in the book have been issued over the past 15 months. He reminded the committee he had sent out a biennial report in December that included the mission statement to improve state government and hold agencies accountable for their operations.

Mr. Crews explained the Audit Division prepares a 2-year plan that is submitted to the Legislative Commission, and agencies outlined on the plan are audited. He recalled that 12 years ago the Legislative Commission became concerned about whether audit recommendations were being successfully implemented and suggested that legislative subcommittees be formed to follow up on the recommendations during legislative sessions through the budget process. Mr. Crews stated the Audit Division finds the process has worked very well. He told committee members that over the past 2 years $17 million has been realized in cost savings because agencies implemented the recommendations. He averred agency savings can be realized when audit recommendations are implemented. He asserted the $17 million savings would not have been possible to realize without the support and backing of the legislative money committees.

Referring to the Audit Report Summaries, Mr. Crews asserted the audit of the management and collections of the state’s accounts receivable on page 29 shows the agencies lack critical information to effectively manage or collect accounts receivable. As a consequence, he said, the state may never be able to collect some $50 million in accounts receivable due to poor practices. He noted the report makes recommendations on how to enhance collections.

Mr. Crews drew attention to the audit of the Department of Information Technology (DoIT) starting on page 49 of the Audit Report Summaries. He said the Audit Division identified a complete lack of management controls in the agency. As part of the audit, the division studied eight programs, including the Nevada Operations Multi Automated Data Systems (NOMADS). Even excluding NOMADS, he said, DoIT was over budget by an average of 64 percent.

Senator Raggio recalled DoIT reported at the last Legislative Commission meeting that Nevada ranks very well with 60-some percent of the department being on budget compared to other states that tend to be consistently over budget. He requested comment. Mr. Crews acknowledged he was unaware of the national statistics, but opined DoIT should be able to tighten its budget considerably in order to improve operations. He stated the Audit Division accumulated data on program costs for DoIT because DoIT did not have basic cost information. He suggested it would be nearly impossible to control costs if the costs are unknown.

Turning to the results of the audit summary of inmate medical services on page 78, Mr. Crews said Nevada spends more on medical service as a percentage of its total prison budget than any other state in the country. He pointed out the Department of Prisons (DOP) has a complete lack of cost controls, and it has extremely high mental health staffing ratios. He concluded there is a potential for saving millions of dollars in the medical services, and said the report makes recommendations to strengthen that area in order to bring costs down.

Mr. Crews touched on the problems depicted on page 100 that have been obvious for several months relating to the group health insurance program. He reported the matter has been before the Interim Finance Committee (IFC) numerous times, generally involving a high dollar value, all symptoms of problems described in the Audit Report Summaries. He noted recommendations are included in the report regarding the need to change the organizational structure and to revise the composition of the Committee on Benefits. He added that serious problems dealing with the contracting processes of the Committee on Benefits are addressed in the report and should be completely revamped.

Senator Raggio called attention to the method of appointing members of the Committee on Benefits discussed on page 102. Saying the problem will probably be an issue during the legislative session, he agreed with the findings that the current method of appointing members to the committee according to the statutes does not provide a strong system of accountability and creates a potential for conflicting responsibilities and authority. Mr. Crews responded a bill draft has been requested and will probably be sent to the Legislature’s two government affairs committees to resolve the matter.

Mr. Crews opined it is important to hold agencies accountable for operations and there is substantial room for improved cost savings.

Stephen M. Wood, CPA, Chief Deputy Legislative Auditor, Audit Division, Legislative Counsel Bureau, concurred with the comments made by Mr. Crews and offered to provide any help necessary to the subcommittee. Senator Raggio remarked the Audit Division has performed with a high degree of professionalism and objectivity over the years.

Senator Jacobsen agreed the findings of the Audit Division have been excellent, but said the implementation of the audit recommendations has "left something to be desired." He recalled times when it was necessary to utilize the services of the legal staff to impress upon agency heads the importance of the findings. He inquired whether Mr. Crews felt the statutes should be strengthened in that regard. Mr. Crews agreed problems have arisen, but he indicated the response to recommendations has improved. He explained there is a process in place whereby agencies return to the audit subcommittee after several months to report on the status of implementation of recommendations.

Mr. Crews noted the division relies upon the word of the agencies or reports from the Department of Administration. He opined there has been a fair degree of compliance with recommendations, yet there is room for improvement. He agreed enforcement is a problem from the standpoint of separation of powers but said the authority lies primarily with the legislative money committees.

Senator Jacobsen declared there should be immediate attempts to resolve problems when they are found, rather than await the legislative sessions. Senator Raggio agreed, but added it is difficult because the Legislature cannot interfere in executive functions. He pointed out the best the Legislature can do is to participate in dialogue with the agencies.

Lieutenant Governor – Budget Page ELECTED–21 (Volume 1)

Budget Account 101-1020

Lorraine T. Hunt, Lieutenant Governor, Office of the Lieutenant Governor, stated a conservative approach was taken in drafting the budget in light of the current state financial situation. She indicated the approach will allow the office to proactively and aggressively address the primary areas of responsibility, economic development and tourism. She reported the existing work program is maintained in the budget with only slight variations added for inflation.

Don Hataway, Deputy Director, Budget Division, Department of Administration, cited the many things that are common to all the constitutional officers. He declared the new salaries approved by the 1997 Legislature are the primary driving force behind the new base budgets. He pointed out the new salaries do not become effective until the incumbent stands for reelection; thus the attorney general and secretary of state will not be eligible for higher salaries until they are reelected to office. He explained those new to office, including the Lieutenant Governor, will be able to take advantage of the new salary schedule.

Mr. Hataway said all maintenance modules M-100 and M-300 in the budgets include expenditures where eligible. M-300, he explained, includes fringe benefit adjustments primarily for group medical services. He stated the Administrative Services Division, Department of Administration, provides personnel, finance, and administrative services not only to the department, but also to smaller budgets in the state, including the executive branch offices. He said there will be some maintenance and enhancement administrative allocations in M-800 and E-800 representing support for the respective divisions.

According to Mr. Hataway, the primary changes in the budget for the Office of Lieutenant Governor are in module E-125, including an additional staff person for the Carson City office to allow for full-time offices at both the north and south ends of the state. The budget also provides funding for proper computer workstations, file servers, software, and printers, since there was virtually no computerization in the agency. He said the new Lieutenant Governor turned to DoIT representatives for an assessment of needs for her office, which are found in Exhibit D, a price list of recommended items.

Senator Raggio noted the budget will provide for six positions. He asked how many of those will be stationed in the Las Vegas office. Lieutenant Governor Hunt answered there will be three in each office.

Senator Neal wanted to know why the office will need local area networking (LAN) and wide area networking (WAN). Andrea Reitan, Deputy Chief of Staff, Office of the Lieutenant Governor, replied LAN and WAN will allow the office to communicate not only between the north and south offices, but also on an international level with economic development and tourism. It will provide e-mail and worldwide Internet connections.

Senator Coffin agreed it is important to enable people to reach the office and to include the office on the state web page. Ms. Reitan responded the office is in the process of developing a web page with assistance from the Office of the Secretary of State.

Senator Jacobsen observed there had been a lack of continuity between the Governor’s Office and the Office of the Lieutenant Governor in the past. He inquired whether the Lieutenant Governor felt there were any other activities or responsibilities she should assume. He suggested both the Governor and Lieutenant Governor should provide a calendar of activities to the members of the Legislature. Lieutenant Governor Hunt admitted the office is in the process of organizing and said she and her staff were surprised that the systems were not already in place for the office. She said her office receives many calls due to her service as chairwoman of the Commission on Economic Development and the Commission on Tourism. She also keeps in touch daily with the Governor’s Office and frequently communicates with other constitutional officers and state agencies.

Deferring to the elected officers present, Senator Raggio invited Secretary of State Dean Heller to come forward.

Secretary of State - Budget Page ELECTED-74 (Volume 1)

Budget Account 101-1050

Dean Heller, Secretary of State, Office of the Secretary of State, distributed a packet of charts (Exhibit E) which he asked members to review at their convenience. He stated his chief deputy maintains an office in southern Nevada, which Mr. Heller insisted has been of great benefit to the office and to the people in the state.

Mr. Heller drew attention to a large chart depicting the growth in the Office of the Secretary of State. He offered thanks to legislators for providing help during the period when his office struggled with growth. He pointed out the growth from Fiscal Year (FY) 1997 to FY 1998 and noted that for every dollar spent on the secretary of state’s office, approximately $6 in revenue is brought in. He voiced the opinion the revenue coming into the office will double by the end of his second term.

Mr. Heller stated the filings have increased by approximately 20 percent during the last calendar year, as displayed on his second chart, even though there were 2 low months when the stock market was down.

Describing the duties of his office, Mr. Heller said a great deal of information is disseminated to the public regarding elections, securities, corporations and notaries. He reported his office has the largest agency web page in the state in order to provide some of that information. In the past 3 months the web page has averaged 500,000 hits per month, and of those approximately 1,100 access more than one page, which he surmised reduces the number of phone calls.

Mr. Heller said the passage of legislation for e-commerce, allowing electronic signatures, will allow electronic filings for corporations, amendments, and status reports. He asserted e-commerce will make it extremely easy to file in Nevada. He noted Nevada is in the top 10 of incorporating states, and of the top 10, Nevada is experiencing the fastest growth.

Mr. Heller acknowledged his performance indicators may not give an accurate picture. Senator Raggio interjected the information displayed on the charts would be helpful as performance indicators. Mr. Heller suggested the turnaround time in the office gives an indication of the improvement in the office even though it does not specifically measure activities. He said that 4 years ago, when he took over, the turnaround time ranged from 4 to 6 weeks; but now the time is 2 to 3 days. He attributed much of the reason for the turnaround to having the necessary technology.

Mr. Heller said the weakness of the office is demonstrated by the low percentage of phone calls being answered. He reported that when he took office 4 years ago there were approximately 1,200 phone calls per day, and of those just 400 to 500 were answered. Now, he said, to alleviate the number of calls, the office has set up the web page that gives status information. Also, he reported, the office installed a 900 number which can be used for a charge of $3.50, and though some people object to the fee, many are glad to receive the information for the fee.

Mr. Heller said the office installed a fax-back, document-on-demand system that allows a user to call the office, key in the document number, and receive a fax copy of the document. He called that program "very, very successful," saying the office faxes 32,000 pages a month on the system that formerly had to be addressed through telephone calls and mailing.

According to Mr. Heller, the office now receives 2,000 phone calls a day, and an average of 800 calls are answered each day. He said he made a proposal to the Governor to have all phone calls outsourced to a third party. He pointed out most calls, probably 90 percent, come from those who want to buy a service from the state, and the inability to answer all the calls results in a loss of revenue. He estimated a cost of approximately $400,000 per year to employ an outside service that would handle 75 percent of the calls, leaving only about 25 percent that would need to be transferred to the office. He said the proposal was rejected by the Governor and is not included in the recommendations for his office. Mr. Hataway interjected the original recommendation was included in module E-125.

In response to a question by Senator Raggio, Mr. Heller anticipated the cost to employ an outside service would be returned by several times. He explained that most questions could be answered by the service and any others would be transferred to customer service in the Office of the Secretary of State. He complained operators presently employed by the office only have time to spend up to 2 minutes with each customer.

Mr. Heller reported the securities division performs compliance audits once every 2 years for firms located in Nevada, which he opined is adequate. He suggested the revenue and expenditure ratio should be included in the performance indicators. He reiterated the office produces $6 in revenue for every $1 of cost, and the ratio appears to be improving. He warned poor service or a raise in rates will reduce that ratio. He acknowledged a bad economy, a fluctuating stock market, or harmful legislation would have a negative impact on the ratio. He cautioned there is a bill in the Assembly, Assembly Bill 18, causing a great deal of concern because it implies one would have to be an attorney to file a corporation with the Office of the Secretary of State.

While acknowledging the bill is not specific regarding who may file, Mr. Heller pointed out approximately 60 percent of the resident agents in the state are not attorneys. If resident agents were required to be attorneys, he said, a large portion of the business might go to other states. He reported several corporations have discussed moving to Wyoming or other states due to the prospect of such legislation.

Mr. Heller suggested measures of performance for the elections division might include the number of times the office was sued during the last election cycle. He stated the office was sued eight times during the last election, which he attributed to a lack of clarity in the election laws. He said he proposed rewriting Title 24 of the Nevada Revised Statutes (NRS), the election laws. He pointed out Title 24 has repeatedly been amended for the past 125 years, which he suggested has caused great confusion and misunderstanding and the laws should be rewritten. He said interpretation falls upon the secretary of state, and when people disagree with the election officer, whether at the county or state level, the problem generally winds up in court. He expressed regret funding to rewrite Title 24 was removed from the budget.

Mr. Heller said that because there are no statutes governing city elections, his office has proposed a bill covering the matter and has requested that it be expedited. He explained that at present a city must review state elections and county elections and from those devise the best method of running elections.

Mr. Heller argued in favor of statewide voter registration. He noted there are two registrars and 15 clerks in 17 counties, all with different databases, making it necessary to access all 17 sources for information. He added there is no way to check if there is multiple registration, and it is possible to register in all 17 counties. He asserted a statewide registration database, located in the Office of the Secretary of State, would provide a cross-reference to ensure against voter fraud and reduce cost of elections.

Senator Raggio asked how much it would cost to install a statewide registration database. Mr. Heller estimated it would cost approximately $1.5 million. He said California and Utah recently adopted statewide registration and voters can be cross-referenced between the two states. He anticipates the voter registration rolls will be reduced by 10 to 15 percent, as happened in California and Utah, if statewide registration is adopted because of multiple registrations.

Senator Coffin opined statewide registration will not be cost-effective because some candidates will buy the lists of registered voters in several counties to cross-check registrations. He wondered whether the enforcement for interstate registration will fall upon the state or the federal government, or whether there may be some financial impact. He asked whether federal funds are available for establishing and using a statewide registration database.

Senator Coffin noted candidates must file an unspent-campaign-expenditure form. He asked whether the form should be returned to the Office of the Secretary of State or to the Commission on Ethics. Mr. Heller responded the disposition-of-unspent-campaign-funds form goes to the secretary of state. Senator Coffin complained the campaign forms fail to include questions regarding some matters that apply to campaigns. Mr. Heller rejoined it is difficult to anticipate every possible expenditure for campaigns. He pointed out candidates can attach an amendment to the list describing expenditures that are not specifically covered.

Mr. Heller commented statewide candidates are frustrated by the necessity of having to go to every county for a database of voters. He said the information is nearly impossible to combine because there is no common system. He reiterated combining voter registrations will reduce the cost of elections and save candidates considerable frustration. He suggested if voter rolls are reduced by 10 to 15 percent, a savings will be realized from doing away with that portion of the requirement to disseminate information prior to elections. He noted candidates have complained the voter registration lists are very inaccurate.

Senator Raggio invited Mr. Heller to submit revised performance indicators as well as more detail on what would be involved to establish statewide registration, including how costs would be incurred and what impact it would have on counties.

Drawing attention to the summary on budget page ELECTED-78, Mr. Heller noted the Governor’s recommendation reduced the budget for Victims’ Assistance to $13,000 from the $22,393 requested. He surmised there may have been some confusion when the agency transferred one half-time position to a different line item but said the position should have stayed in that line item.

In response to a question from Senator Raggio, Mr. Hataway reported he had only learned a day earlier that a staff person was associated with the program. He argued the staff complement of 107.04 positions should include the half-time position under the Personnel line item. He explained the budget office believes the $13,000 is adequate to serve the program. Mr. Heller rejoined the statutes require the position. He promised to review the budget.

Mr. Heller reported he has been appointed as chairman of the securities committee of the National Association of Secretaries of State. He stated he looks forward to the position, having worked in the securities industry, and he feels it will be a tremendous opportunity and responsibility. He said it will require travel to Washington, D.C., and to North American Securities Administrative Dealers (NASAD) meetings, but the budget for his out-of-state travel will limit his participation. He wanted to know whether the Legislature would prefer that he resign the position rather than increase the budget. Senator Raggio suggested he provide staff with details of any augmented request for out-of-state travel, including the purposes.

Mr. Heller recalled that a business process reengineering (BPR) study took place in 1996. He said the first phase of the BPR changed processes in the office that resulted in a reduction in the turnaround time from 26 days to 2 days. The next phase, he said, applies to technology, and he acknowledged it will necessitate some training. Senator Raggio suggested Mr. Heller provide details for the staff to review.

Mr. Hataway interjected the Office of the Secretary of State submitted a series of reclassification requests to the Department of Personnel. Mr. Hataway said as soon as the information is received and the fiscal impact reviewed, an amendment to the budget will be submitted to the Legislature. Senator Raggio indicated awareness of the situation.

Office of the Governor – Budget Page ELECTED-1 (Volume 1)

Budget Account 101-1000

Mr. Hataway stated that in addition to the areas emphasized for the Lieutenant Governor’s budget, the only issue for the Governor’s budget is found in decision unit E-125. He said the request will transfer unclassified positions to nonclassified positions. He explained a bill draft request (BDR) has been submitted to amend the current unclassified pay bill, and according to the Office of the Attorney General that is all that is required to make the change since there are no other statutory requirements.

Mr. Hataway said the Governor believes the change will provide him the flexibility needed to recruit staff, and the office will require fewer personnel if he can employ qualified people who will be paid according to their worth. The Governor suggested it may be possible to "turn back" some funds if he is provided that flexibility.

Mr. Hataway emphasized there are a number of nonclassified positions throughout the state, the two largest blocks being in the legislative branch and the judicial branch. As an example, he said, the Mansion Maintenance budget has three nonclassified employees of long standing, the cook, the housekeeper, and the administrative aide. He added there are nonclassified employees in the State Printing Division who are unionized. The Professional and Occupational Licensing Boards also include nonclassified employees.

Senator Raggio pointed out the budget indicates there are still 24 budget positions. Saying the Governor has filled 20 positions, Mr. Hataway explained not only is that not an increase, but there may even be fewer positions. He said the proposal is laid out in module E-125 as a negative in the amount of funding in salary fringe benefits and unclassified line items and as a positive figure in the Personnel-Non-Classified line item.

Senator Raggio inquired how soon the Governor will be able to provide a list of proposed revisions to enable a better understanding of the matter of flexibility. He acknowledged there probably will be no major problem as long as no new positions are requested, but he reiterated the committee would like some idea of what is contemplated. Mr. Hataway responded more definitive information should be ready by the time the BDR is prepared and presented. He repeated there is no request for a raise in the dollar amount, and it may be possible to "turn back" some funding. Senator Raggio voiced understanding regarding the request to revamp the Governor’s budget, but reiterated some type of blueprint would be helpful.

Senator Neal asked whether the Legislature has pursued a policy of retaining some type of control over salaries in all branches of government within the state. Senator Raggio responded that could be surmised from comments made. Mr. Hataway interjected that the Legislature controls the overall salaries in budgets such as that for the Mansion Maintenance, but it also allows the Governor some flexibility over those positions.

Senator Coffin noted the U.S. Congress uses the same system, but with internal limits on salaries. He commented the proposal outlined by Mr. Hataway does not appear to hold any internal limits, which the senator feels should be included. He added he would like to know what effect the proposal will have on the Public Employees’ Retirement System (PERS), since it would be possible for an employee to transfer from another agency, receive a much higher salary in the Governor’s office for a few years, and then be eligible for a much higher retirement.

Scott Scherer, General Counsel, Governor’s Office, responded the BDR will make a simple change to NRS 284.013 which already exempts various employees from the classification system, either classified or unclassified. He explained it is not significantly different from what is already allowed and it includes employees of the Legislative Counsel Bureau (LCB) and employees of the Supreme Court. He added it includes most professional licensing boards.

In the interest of time, Senator Raggio proposed deferring the matter until the bill comes before the committee.

Mansion Maintenance – Budget Page ELECTED-5

Budget Account 101-1001

Mr. Hataway announced the only change is found in the maintenance module M-200 to provide utility costs for the expansion of the mansion. He noted the mansion is being expanded by 7,200 square feet through private donations, and the proposal uses the same square-foot costs plus adjustments for inflation.

Senator Raggio suggested the committee would like to tour the mansion when it is complete and in order. Mr. Hataway responded the mansion is scheduled for completion in mid-March.

Senator Raggio asked whether the budget contains all increased amounts attributable to enlarged facilities. Mr. Hataway replied it should, since the budget utilizes the same square-foot basis for expenses as the existing 8,400 square feet.

Senator Jacobsen interjected Harvey’s Lake Tahoe Casino refurbished the gazebo at the Governor’s Mansion at no cost to the state. Senator Raggio noted Mr. Hataway indicated the expansion and remodeling, commenced under the last administration, was totally financed by private donations. He recalled advising former Governor Miller the project was necessary, and if private donations were inadequate, the Legislature would assist. He stated it was a compliment to Governor Miller that the project was achieved through contributions from people around the state.

Commission for Women – Budget Page ELECTED-14 (Volume 1)

Budget Account 101-1029

Mr. Hataway noted the budget reflects actual costs incurred in FY 1998 and is recommended to continue in FY 2000 and FY 2001. He remarked the committee has not met since FY 1998, primarily due to the fact the terms of four commissioners expired on June 30, 1998, and the Miller administration left the new appointments to the new administration. He said Governor Guinn has been made aware of that, and he intends to support continuation of the commission and will make the appointments. As soon as the appointments are made, the Governor will request the commission meet and develop a work plan to be submitted to the Legislature. Mr. Hataway opined it will not be necessary to defer the budget because remaining commissioners have explained they raise funds from the private sector each time they identify a project. He said the budget simply covers the cost of meetings.

Senator Raggio recalled the Legislature set a policy that no state funding would be allocated to the commission since it carries a potential for lobbying. Mr. Hataway concurred, adding the budget allows for continuation of gifts and donations, a typical method of financing. He said the commission has published documents in the past, and as the commission raises funds those are included as a work program in the budget.

Janine Hansen, Lobbyist, State President, Nevada Eagle Forum, spoke against tax funding for the Commission for Women and asked that the commission be abolished. She reminded the senators that Nevada Eagle Forum has opposed the commission since its inception because, she claimed, the commission has focused on very divisive issues. She referred to comments made by members of the Women’s Lobby, which she opposes, in support of the Commission for Women.

Mrs. Hansen quoted statements from the minutes of the Progressive Leadership Alliance of Nevada that she described as an umbrella organization which brings together liberal organizations in the state. She said the Commission for Women works very closely with the Nevada Women’s Lobby, the Nevada Women’s Lobby is part of the Progressive Leadership Alliance of Nevada, and the membership of the three organizations is composed of many of the same people. She reported the alliance sponsored a workshop on "the religious radical right" and keeps a dossier listing 12 organizations that they consider "far right" organizations, including Citizens for Responsible Government, the Nevada Association of Independent Businesses, Nevada Concerned Citizens, and Nevada Eagle Forum, among others. She provided a packet of letters and papers prepared by the Progressive Leadership Alliance of Nevada (Exhibit F. Original is on file in the Research Library.).

Although she took note of their right to lobby, Mrs. Hansen expressed the opinion no tax money should be provided for the Commission on Women due to its close ties to the Nevada Women’s Lobby and other feminist groups. She asserted those groups should lobby using their own funds, just as Nevada Eagle Forum uses its own funds for lobbying.

Senator Raggio interjected he already stated no tax funds will be used for that purpose. Mrs. Hansen said that while she understands, she has learned from contacts throughout the country that the commission in most other states has been used consistently for over 20 years to promote the very issues she opposes. She pointed out the Commission on Women continues to promote the issues she opposes in spite of any restriction on using state funds for lobbying. She agreed they have every right to do so, but only without any tax funds or any official commission from the state.

Mrs. Hansen read from page 31 of her packet listing some of those legislators the alliance considers advocates of "far right" beliefs. She voiced concern the Commission for Women does not represent a broad spectrum of opinion, and thus should not be supported by taxes or recognized officially.

Ethics Commission – Budget Page ELECTED-16

Budget Account 101-1343

Mary Boetsch, Chairman, Commission on Ethics, distributed three charts (Exhibit G) depicting the disposition of opinion requests for FY 1998 and FY 1999 and opinion requests during FY 1999 in response to Senate Bill (S.B.) 215 of the Sixty-ninth Session.

Ms. Boetsch noted the charts do not depict the amount of time the commission has spent on cases. She stated meetings take longer than in previous years, and she expressed hope legislation will pass this session that will shorten meeting times by doing away with "just and sufficient cause" hearings as they presently exist from third-party requests. She asserted the process is duplicative, and there should be an initial determination whether the ethics commission has jurisdiction, after which it should go to a hearing on the merits.

Ms. Boetsch noted the first day of most meeting sessions is spent on "just and sufficient cause" hearings. If those were eliminated or made cursory, she said, the meetings would be shortened considerably.

According to Ms. Boetsch, the budget does not contain two items the commission feels are very important in order to streamline procedures. She said the initial budget request included changing the status of the staff. She explained the commission is assigned one half-time deputy attorney general and a paralegal who is assigned to him, and the executive secretary position. She said the commission would like to make changes that more closely resemble other boards and commissions by creating an executive director position with a half-time clerical position.

Ms. Boetsch reported the Assembly Committee on Ways and Means requested a written outline of the request for an executive director position and half-time clerical position. She said those positions will replace the present positions, with the executive director taking over some of the duties of the executive secretary plus many of the unofficial duties presently handled by the deputy attorney general. She indicated the qualifications are subject to some disagreement, with some plans to create that position for an attorney, which she said is not the proposal made by the ethics commission.

Ms. Boetsch suggested the person should have some public relations skills, some familiarity with the statutes involved, some "people skills," and some clerical skills. She envisioned the person will assemble the case packets, coordinate witnesses and hearing times with attorneys representing opinion requestors or the subjects, ensure evidence is available, coordinate investigative staffs, travel around the state to educate staff in counties, and act as liaison for the press and for public inquiries. She stated she and the commission believe they should not act as their own spokespersons, nor should the deputy attorney general.

Ms. Boetsch noted the executive director will be unclassified. She acknowledged the request will amount to an additional half-time position, and thus it will have an impact on the budget.

Senator Raggio made the assumption there will be a number of bills relating to the Commission on Ethics. Ms. Boetsch agreed some will have impact on the budget. She noted there is one proposal to increase the number of commissioners, with an obvious impact on the budget. Mr. Hataway reported the Governor is not prepared to support any changes in the budget at the present time, but as he completes his BDR on the ethics commission, and if it results in the need for additional staff, the Governor will make some recommendations. Senator Raggio proposed scheduling a later hearing to accommodate the commission and the Governor.

Continuing, Ms. Boetsch related the commission requested additional funding for a court reporter and for investigative expenses. She alleged additional duties were incurred as a result of S.B. 215 of the Sixty-ninth Session. She said the commission was mistaken in its opinion there would be fewer requests as a result of the measure, but there were more requests, albeit simpler.

Ms. Boetsch confirmed Senator Raggio’s estimate that over 20 requests were received, and she said another request is pending that came in just recently. She indicated 4 were rejected because they were not filed by a candidate as required by law and 17 were accepted. She added several filed by the same two candidates were withdrawn at the last minute.

Ms. Boetsch said the funds allocated under the bill for two investigators were not used, but investigative funds were used for regular opinion requests, and the commission seeks an increase in those funds. She indicated an increase in court reporter services is also requested in anticipation of the trend that meetings will require more time as the number of "just and sufficient cause" hearings grows. She related that when she started on the commission 5 years ago the commission met for just 1 or 2 days in Las Vegas, but now meetings in Reno routinely go on for 2 days and those in Las Vegas take 3 or 4 days. She added the number of meetings has also grown, and she anticipates all six commissioners will attend all meetings, requiring additional funding for travel and per diem, as well as increases for the court reporter.

Ms. Boetsch called the court reporters a godsend because of the increased litigation involving decisions made by the ethics commission. Use of a certified reporter with a transcript has sped up the litigation process, she declared.

Ms. Boetsch indicated the budget does not include a line item for assessments for microfilming because it was not used during the previous budget period. She stated it is necessary and should be restored in order to microfilm records. Senator Raggio suggested the item be added to the list of revisions.

Mr. Hataway noted one procedural change is recommended on the basis of the inability of the commission to accurately estimate the magnitude, timing or number of cases to be received by the commission. He recalled that at the end of FY 1998 it was necessary to go before the IFC to cover expenses, so the Budget Division proposes the Commission on Ethics be allowed to use its appropriation in both years of the biennium. He suggested that may smooth the transition between fiscal years. Senator Raggio directed staff to take note.

Ms. Boetsch reiterated the report being prepared for the Assembly also will be sent to the Senate. Senator Raggio closed the hearing on the ethics commission and opened the hearing on the Western Interstate Commission for Higher Education (WICHE).

WICHE Loan & Stipend – Budget Page WICHE-1 (Volume 1)

Budget Account 614-2681

Ron W. Sparks II, Director, Western Interstate Commission for Higher Education, testified funds are being requested to support in-state students in the physical therapy program, funds not presently included in the budget. He said the request for budget account 614-2681 for the loan and stipend fund includes the base and no enhancements.

Mr. Sparks pointed out the original request for the base was reduced in order to allow funding for four physical therapy slots under the Health Care Access Program (HCAP). He reminded the senators the program requires students to practice in underserved communities in Nevada in exchange for education loans and grants from the state. He said even though physical therapy education is offered within the state, the HCAP changed the method of doing business with WICHE. He proposed giving funding to in-state physical therapy students in exchange for service in underserved communities.

Mr. Sparks said WICHE currently pays about $8,000 in funding for each physical therapy student who attends school out of state, and the commission recommends giving $5,000 to each in-state student in order to entice the students to work in underserved communities. He asserted economic development opportunities will be enhanced within the state if physical therapy students are signed on to the program. He pointed out not only are rural communities underserved, but some pockets of the larger cities are also underserved. He acknowledged the proposal from WICHE is a change in philosophy, but he opined the philosophy was changed when HCAP was created. He noted the program provides a workforce in the state.

Senator Raggio asked whether all other programs will request the same agreement if the program is approved for physical therapy students. He noted WICHE was designed under a compact with other states to fund students who could not receive the education within the state. He pointed out there already is a viable physical therapy program offered within the state, including a masters of science program at the University of Nevada, Las Vegas. He wondered whether the same requests might be forthcoming from students of dentistry or law or other fields if the proposal is approved for physical therapy students.

Mr. Sparks responded the committee made the decision to go forward with the request as a pilot program. He opined no change is necessary in the statutes regarding the HCAP program since it does not specify whether it applies to students attending school in or out of state.

Senator Raggio interjected he does not question the authority, but rather he questions the philosophy. He reiterated he does not believe the proposal can be approved for physical therapy without allowing similar programs for other disciplines. Mr. Sparks replied the HCAP was designed to encourage graduates to aid underserved communities, and by doing so it helps the Health Care Access Program throughout the state.

Senator Raggio asked why physical therapy was specifically chosen. Mr. Sparks replied there are areas that are underserved by physical therapists. He explained the way the program is designed, a practitioner will be able to go into an underserved community 1 or 2 days each week, thus providing continued care in the communities, yet the schedule will not impact the practitioner’s ability to make a living. He pointed out those communities are not presently served because it is not cost-effective for the practitioner. Noting HCAP represents a change in philosophy in WICHE, Mr. Sparks pointed out business must change in order to be viable. He stated the commission is attempting to evolve and to serve those communities through a very limited state commitment.

Senator Raggio asked how effective WICHE has been in recruiting former students who committed to return to underserved areas. Mr. Sparks replied the HCAP program is brand new and no program is in operation as yet. Senator Raggio reported there has been much consternation because students made commitments and never followed through, and the state was unable to collect money back from those students. Mr. Sparks argued WICHE is successful in making collections.

As examples, Mr. Sparks reported there are two dentists serving the tribal community in Yerington, veterinarians are coming back to underserved areas, an optometrist worked off a loan by serving throughout the state, and progress is being made in other areas. He acknowledged an audit found WICHE was not doing a good job enticing students back to the state, so the Legislature gave WICHE the responsibility to develop a program to address the problem. He averred the need was met through HCAP, and that need will not go away whether the program applies to in-state or out-of-state students. He reminded the committee the medical school uses outside programs in order to attract people to underserved communities, and the practice is not uncommon except to WICHE.

Mr. Sparks pointed out WICHE in Nevada now has one of the best records in the number of students who return to practice in the state. He suggested HCAP will have the same success in providing health care access and will bring about economic development in those areas.

Senator Neal noted there are 12 law students, and asked what year of study they are in. Mr. Sparks said there are no freshmen now. He explained that the law slots were phased out not only because the state had a law school, but also because the funds were shifted into the health field where the demand seemed greater.

Senator Raggio reiterated the original purpose of WICHE was to provide funding because Nevada did not offer the programs. Mr. Sparks repeated the audit found many areas of the state were not being served. Senator Raggio noted that was one of the purposes of the student loan fund, and the results did not live up to expectations. Mr. Sparks responded WICHE now has enough leeway to enforce the commitment, and it has done so in the past.

Bob Atkinson, Principal Budget Analyst, Budget Division, Department of Administration, interjected the division is recommending the WICHE budget be allowed to receive an advance against authorized revenues to pay necessary fees early in the fall in order to hold down the balance that needs to be carried forward. He explained the budget is built with a balance-forward, and because the repayments of stipends and loans are received throughout the year they are not in by October, yet fees must be paid by October.

Mr. Sparks said WICHE is working with the medical school on the new community scholars program that is a federal-state-community match program. He reported it includes two positions for nurse practitioner and two positions for physician assistant. He explained it is necessary to use the in-state program in order to receive the $17,000 WICHE federal funds compared to $72,000 for the program. He noted the nurse practitioners are in-state, and they are very supportive of the program to move people into the underserved communities.

WICHE Administration – Budget Page WICHE-5 (Volume 1)

Budget Account 101-2995

Mr. Sparks reported the commission concurs with the Governor’s recommendations. He indicated the only exception is a request to increase in-state and out-of-state travel to the 1999 levels. He explained the funds were not expended in FY 1997 because the HCAP program was not yet in place, but now HCAP needs to contact the various communities to obtain commitments to the students.

Senator Raggio requested that he review the genesis of the Health Care Access Program. Mr. Sparks responded it is a state program including physical therapy, pharmacy, physician assistant, and dentistry students. By Nevada law, the students have a 2-year obligation to serve.

Senator Raggio concluded the proposal for physical therapists appears to be a modification because the participants will be able to spend only 2 days a week and not have to serve 2 years in an underserved area. He asked whether that is consistent with legislative policy. Mr. Sparks replied it is because the participants have 5 years in which to complete the 2-year obligation. He said, "All we’ve done is reduce down the number of years." Concluding his remarks, he pointed out that in the professional student exchange program it is 1 year for 1 year, but now the commitment is for 2 years if the person goes to an underserved community.

Senator Raggio requested that committee members be prepared within the next couple of days to make recommendations for those budgets that will require formal hearings.

Senator Jacobsen suggested the committee arrange to view the offices of the constitutional officers. He noted some offices have requested additional personnel, and he expressed concern whether there is adequate space to increase staff in some of the offices. Senator Raggio responded that may be undertaken when the committee has a lighter schedule.

There being no further business to come before the committee, Senator Raggio adjourned the meeting at 9:55 a.m.

RESPECTFULLY SUBMITTED:

Judy Jacobs,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE: