The joint meeting of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman William J. Raggio, at 10:40 a.m., on Monday, May 3, 1999, in Room 1214 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.

SENATE 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

ASSEMBLY MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Ms. Jan Evans, Vice Chairman

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne S. Chowning

Mrs. Marcia de Braga

Mr. Joseph E. Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

Mr. Bob Price

STAFF MEMBERS PRESENT:

Patricia Hampton, Committee Secretary

OTHERS PRESENT:

Senator Raggio noted this is the first meeting to resolve budget differences. He said it is significant the meeting is occurring at this point in the legislative process. He commented it speaks well for the process of utilizing the joint subcommittees. He stated the process has been very beneficial and there are almost no budget differences, at this point, between the two committees. The senator complimented all members of both committees who he said have worked hard and have put in a lot of time and effort on some difficult measures, especially, he noted, since revenues are more limited than usual.

Senator Raggio asked staff to indicate the minor differences in budget account 2892, Museums, Library & Arts Administration.

Museums, Library & Arts Administration – Budget Page MLA-1 (Volume 1)

Budget Account 101-2892.

Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, said the Senate Committee on Finance closed this budget by eliminating the contract assistance services recommended by the Governor for computer services and including a position for computer services instead. He said that in addition, funding for equipment and information services costs is included. He stated the Senate Committee on Finance did recommend the agency’s revised requests for in-state travel and training related to the computer position. He said part of the in-state travel request is also related to the computer position.

Senator Raggio pointed out the concern was to make sure, particularly in computer training, that funding be approved for what was considered to be necessary by the department.

Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated the Assembly Committee on Ways and Means did not concur with the department’s revised request for in-state travel and training and the amount was reduced to a total of $5,000. He said the Ways and Means Committee noted the revised increase requested by the agency was a 135 percent increase over what was expended previously and that at least in the library accounts there is an opportunity for the agency to charge grants directly and not use General Fund dollars in this account if the activity is related to library-type matters. He stated the training category was also reduced from the revised request of $2,000 to $1,300.

Senator Raggio proposed that unless there is an objection the Senate concur with the Assembly.

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Archives and Records – Budget Page MLA-46 (Volume 1)

Budget Account 101-1052

Mr. Miles said the Senate Committee on Finance has closed the Archives and Records budget as it was recommended by the Governor.

Mr. Stevens stated the Assembly Committee on Ways and Means deleted decision unit E-730, which was the project to move the gas and water main behind the library and archives building. He explained the committee felt the Capital Improvements Project (CIP) subcommittee should review the request and perhaps have the State Public Works Board inspect the project. He said the Ways and Means Committee felt the public works board should be in charge of that project instead of the agency.

Senator Raggio asked whether that action would place the project on the CIP list and require bonding. Mr. Stevens answered the project would go on the CIP list and whatever funding source desired could be chosen. Senator Raggio pointed out everything on the CIP list is being bonded and if items continue to be added the cost rises significantly.

DMV, Justice Assistance Act – Budget Page DMV-105 (Volume 3)

Budget Account 101-4708

Mr. Miles indicted the Senate Committee on Finance closed the DMV, Justice Assistance Act budget account, in concurrence with the second revision from the Budget Division. He said the initial revision recommended the state match for this federally funded aftercare program be removed from the budget. But the budget office later revised the budget with revision 91, which asked that $43,212 of General Fund money be restored to the account in FY 2000 to ensure a timely startup of the grant program

Mr. Stevens explained the Governor’s initial recommendation for the aftercare program assumed a 25 percent match would be required. He said it was recommended that half the match come from the state and half from the grantee, approximately $120,000 each. He stated budget revision 29 indicated only a 10 percent match would be required and the state should not contribute to the match; the grantee would provide the entire match of approximately $82,000. He explained the second revision, 91, indicated the state should participate in the match during FY 2000 in the amount of approximately $40,000. Mr. Stevens said that in the second year of the biennium, FY 2001, the grantee would be responsible for 100 percent of the match.

Mr. Stevens said the Assembly Committee on Ways and Means looked at the initial Governor’s recommendation, that of the grantee being responsible for $120,000 of the match, and the second revision indicating the grantee would be responsible for $82,000 of the match, and did not feel state funds were necessary to operate the aftercare program.

Senator Raggio asked for information on the need for the second revision and the need for some state matching funds. John P. Comeaux, Director, Department of Administration, testified the first revision to the recommended budget was based on discovering a different source of federal funding for the program, which required a lower amount of matching funds. He said it was originally recommended that since the grantee was going to be asked to provide a 25 percent match under the first plan and this was now being reduced to 10 percent, the grantee should provide all of the match. However, later information indicated there was concern it might be difficult to get a grantee to agree to provide all of the match with no state participation.

Senator Raggio asked what types of grantees are involved. Mr. Comeaux replied this is a drug-treatment aftercare program and is envisioned to be a residential-type program that could last from 6 to 9 months. He said it is anticipated 130 to 150 parolees will go through the program. He explained the program has been designed to track the parolees when they finish the program, after which a judgement can be made as to whether the program is effective.

Mr. Comeaux said the second recommendation to include "some state match" was made to avoid the possibility that the program would not get started for lack of $43,000. Senator Raggio asked whether in the second revised recommendation the grantee would have to provide the full match in the second year of the program once the program was started. Mr. Comeaux answered yes.

Ms. Giunchigliani asked whether this is different from the therapeutic community bill presented last legislative session.

Mr. Comeaux responded this program is aftercare and can follow up on the therapeutic community treatment that is provided while the inmates are still in prison. Ms. Giunchigliani asked whether these would be "the 317 people we put out." Mr. Comeaux answered, "They could be." Ms. Giunchigliani asked, "Do we know what population will be served?" She also asked whether the 130 individuals would be people diverted to the program or whether instead the intent would be to identify the individuals before they were sentenced. Mr. Comeaux explained participation in this program would be a condition of parole.

Senator Raggio stated this seems to be an important program and he would hate to see it fail because the state did not provide the initial funding needed. Mr. Marvel recalled the original budget included the same savings. Mr. Stevens explained the original budget indicated the grantee and the state would each provide approximately $121,000 in match.

Senator Raggio suggested the budget office perform an assessment to determine whether the potential grantees would be in a position to cover all of the match requirement. He stated his belief that everyone wants to see the program implemented.

Mr. Miles commented that this weekend the Fiscal Analysis Division plans to input all of the statewide changes required to the BASN (Budget Analysis System of Nevada), including the statewide cost allocation and the attorney general’s cost allocation, DoIT’s cost allocation, the state employees workers’ compensation rate change, and the state unemployment compensation rate change. Also included on the list is the personnel assessment rate. Mr. Miles reported the budget that has closed in both the Senate Committee on Finance and the Assembly Committee on Ways and Means, with the addition of what is expected to be included for the attorney general’s cost allocation and the new DoIT cost allocation, would only slightly vary the necessary personnel assessment rate within the overall budget.

Mr. Miles said the Governor’s original recommended budget included a personnel assessment rate of .0094 in each year of the biennium. He said it is now calculated the rates should be .0098 in FY 2000 and .0092 in FY 2001; however, the Department of Personnel has a budgeted reserve in excess of $1 million and it is recommended the rates included in the Governor’s original budget not be changed.

Senator Raggio stated that unless there is a different recommendation from staff, the recommendation could be accepted.

Retired Employee Group Insurance – Budget Page SPEC PURPOSE-18 (Volume 3)

Budget Page 101-1368

Mr. Miles pointed out the only other outstanding rate that impacts the budget closings which are planned for this weekend is the Retired Employees Group Insurance assessment. Noting the Senate Committee on Finance had discussed this issue today, he said the Governor’s budget currently includes an assessment rate against payroll of .0101 in FY 2000 and .0115 in FY 2001 to pay for state retired employees’ group insurance.

Mr. Miles explained that in the current fiscal year a shortfall has occurred in that account and currently the group insurance fund is not being paid for retirees’ premiums. He said the Joint Subcommittee on General Government received a letter from the administration last week recommending that for the current fiscal year the group insurance fund allow its incurred but not reported (IBNR) items to be reduced because of the underpayment coming from the Retired Employee Group Insurance account. Mr. Miles stated the actuary has recalculated and reforecast the Retired Employee Group Insurance assessment and now suggests the proper rates would be .0112 in FY 2000 and .0132 in FY 2001. He said that is a difference from the Governor’s original budget of approximately $971,000 in the first year and $1.5 million in the second year. He pointed out approximately 60 percent of this is estimated to be General Fund dollars. He said the issue is, before the entire budget is recalculated, does the Legislature want to adjust the rates or allow the IBNR in the group insurance fund to be reduced?

Senator Raggio inquired whether action needs to be taken on the adjusted rate at this time. Mr. Miles answered action needs to be taken before Friday. Senator Raggio stated that action will be deferred at the request of the Assembly.

There being no further business, the meeting was adjourned at 10:59 a.m.

RESPECTFULLY SUBMITTED:

Patricia Hampton,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE:

Assemblyman Morse Arberry Jr., Chairman

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