The Senate Committee on Human Resources and Facilities was called to order by Chairman Raymond D. Rawson, at 1:45 p.m., on Monday, February 22, 1999, in Room 2135 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 Raymond D. Rawson, Chairman

Senator Randolph J. Townsend

Senator Mark Amodei

Senator Michael Schneider

Senator Valerie Wiener

COMMITTEE MEMBERS ABSENT:

Senator Maurice Washington (Excused)

Senator Bernice Mathews (Excused)

GUEST LEGISLATORS PRESENT:

Senator Joseph (Joe) M. Neal Jr., Clark County Senatorial District No. 4

STAFF MEMBERS PRESENT:

Patricia Di Domenico, Committee Secretary

OTHERS PRESENT:

Judy Stokey, Lobbyist, Government Affairs Consultant, Nevada Power Company

Chairman Rawson requested Pepper Sturm, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, address the proposed amendment to Senate Bill (S.B.) 49 (Exhibit C).

Mr. Sturm stated the amendment would clarify the Commission on Educational Technology’s ability to appoint an advisory committee. He said it also would delete a requirement for the commission to review the Iowa Communications Network when the master plan is drafted.

SENATOR AMODEI MOVED TO AMEND S.B. 49.

SENATOR SCHNEIDER SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR WASHINGTON AND SENATOR

MATHEWS WERE ABSENT FOR THE VOTE.)

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Chairman Rawson opened the hearing on Senate Bill (S.B.) 72.

SENATE BILL 72: Clarifies authority of welfare division of department of human resources to establish system for producing digital images of fingerprints of applicants for and recipients of public assistance. (BDR 38-93)

Myla Florence, Administrator, Welfare Division, Department of Human Resources, read from prepared text (Exhibit D) explaining the history and use of the finger imaging process. She stated the bill is "permissive" in nature and clarifies the Welfare Division’s authority to establish an electronic system for producing and storing digital fingerprint images of applicants and recipients of public assistance to prevent fraud. Ms. Florence stressed the cost of implementing a finger imaging system in Nevada far exceeds the scope of any detected problem with duplicate assistance. She pointed out the known duplicate-assistance cases investigated in fiscal year 1998 were 0.02 percent (five cases) of the Temporary Assistance to Needy Families (TANF) population. Ms. Florence explained $19,032 would have been saved if the finger imaging system had been in place.

Chairman Rawson asked what circumstances would have caused the five cases to be investigated. Ms. Florence replied the cases would be discovered in cross matching border states and the social security system. Chairman Rawson questioned whether other states have benefited from this system. Ms. Florence responded large urban areas such as New York City and Los Angeles County have experienced greatest success. Chairman Rawson queried the absence of a fiscal note. Ms. Florence replied a fiscal note has not been formally requested. Ms. Florence indicated there would not be a cost benefit based on our small number of duplicate-assistance cases. Chairman Rawson asked if the bill was passed would welfare implement such a system. Ms. Florence answered there are other projects currently in progress; but in the future, an evaluation of the cost-effectiveness of the system would be beneficial. She stated the permissive language of the bill clarifies the division’s authority to move forward at a future time.

Tom Miller, Business Development Manager, Sagem Morpho, Inc., gave a presentation on "Public Assistance Finger Imaging" (Exhibit E), expounding on the objectives of public-assistance finger imaging. He listed the states that have passed public-assistance finger imaging; states that have or may soon be introducing welfare-fraud finger-imaging legislation; and states that had passed such legislation. Mr. Miller explained the benefits of an interstate finger-matching system. Chairman Rawson asked who was involved in the interstate coalition. Mr. Miller replied chairman of the nonprofit coalition is Arizona’s U. S. Representative Jim Weiers and the cochairman is Ohio U.S. Representative T. J. Thomas. Chairman Rawson asked if federal or Medicaid money could be used to provide the system. Mr. Miller responded in the affirmative. He said the United States Department of Agriculture (USDA) provides a 50-percent match for technical funding for systems that are less than $5 million. Mr. Miller defined the proponents’ arguments in favor of the finger imaging system and presented the opponent’s issues argued during the legislative process. He pointed out the system’s greatest benefit is not catching duplicate assistance cases but in the deterrent effect. Mr. Miller stressed finger imaging is a voluntary act, and is nondiscriminatory because the finger imaging does not disclose the gender or race of the person. He said the information is only shared with the state’s public-assistance system.

Chairman Rawson asked if the system could be leased. Mr. Miller replied in the affirmative. Mr. Miller explained states using Sagem Morpho, Inc. as their vendor of choice use a service bureau contract or lease. Chairman Rawson questioned if the initial cost could be avoided. Mr. Miller responded Arizona’s total system would have cost under $5 million in 5 years; however, by using the service bureau approach they paid $945,000 per year for the system. He explained the United States Department of Agriculture (USDA) matched 50 percent, hence their total cost was under $2.5 million over a 5-year period.

Chairman Rawson asked what device records the fingerprint. Mr. Miller replied the device is a small single-finger scanning device and is recorded on a computer screen in front of the client and caseworker. Senator Rawson questioned the difficulty this system would present to persons with disabilities. Mr. Miller responded negatively. He said the system is voluntary and accommodations are made for a person with a missing finger by using an alternate finger or thumb.

Gary Peck, Lobbyist, American Civil Liberties Union of Nevada (ACLU), vehemently opposed S.B. 72. He pointed out this is a threat to privacy. Mr. Peck stated there is always the possibility banked information may be used and abused in inappropriate ways. He urged the committee to be skeptical of the "rosy" picture that was painted by previous testimony. Mr. Peck emphasized there is no compelling reason to further stigmatize people on public assistance. He suggested the committee examine the fiscal impact of passing this bill. Chairman Rawson asked if the ACLU has opposed finger imaging in other states. Mr. Peck answered in the affirmative. Mr. Peck explained the finger-imaging programs were abandoned in the San Francisco area because they did not work. Chairman Rawson stressed the committee’s responsibility is to hear all sides of an issue and make a decision.

Senator Wiener called attention to the verbiage "… must allow a digital image …" on page 1, line 11 and 12 of S.B. 72. She questioned whether this is voluntary language. Chairman Rawson referenced line 13 and 14, "… except as otherwise provided by the welfare division." He explained the Welfare Division can develop rules and regulations governing the procedure; therefore the risk of it being involuntary is present.

Jan Gilbert, Lobbyist, Northern Nevada Coordinator, Progressive Leadership Alliance of Nevada (PLAN), stated PLAN opposes S.B. 72. She claimed this bill does have a fiscal note. Chairman Rawson emphasized that technically it is unnecessary to attach a fiscal note to the bill. Ms. Gilbert noted an analysis of the Lone Star Image System completed by the Center for the Study of Human Resources, University of Texas, and compared the findings with Nevada. She stated Texas is already aggressively accounted for by nonelectronic means as is Nevada, therefore, little value was achieved from the system. Ms. Gilbert said in Texas and Nevada the welfare stigma is high and the benefits are low, therefore welfare fraud is not attractive to people. She explained there was a drop in the caseload but it could not be attributed to the finger imaging that was in the experimental stage. Ms. Gilbert pointed out similarly the welfare caseload in Nevada has dropped substantially since 1996 but identifying one cause is difficult. She said the amount of fraud detected by finger imaging was so small that in the Lone Star Image System’s analysis it was stated "imaging is much like using a nuclear bomb to take out an ant hill."

Jon L. Sasser, Lobbyist, Washoe Legal Services, testifying on behalf of the Washoe Legal Services and three other civil legal services stated their opposition to S.B. 72. Reading from prepared testimony (Exhibit F), Mr. Sasser pointed out the only value of the mandatory digital imaging is to detect persons using a false identity, but this is a minute problem for Nevada. He said applicants for assistance are required to have social security numbers. Mr. Sasser noted the investigations and recovery unit in the Welfare Division investigates false identities. He stressed there is no evidence that false identification is a significant problem in our welfare system and it would only demonize recipients. Mr. Sasser claimed the passage of this bill would indicate to the public that there was a major problem with the use of false identification to get welfare. Mr. Sasser emphasized our tax dollars should be used for higher priorities.

Chairman Rawson commented one quarter of Nevada’s workforce is required to get a sheriff’s card. He questioned Nevada’s position in the 5-year rule. Mr. Sasser replied the 5-year rule took effect January 1, 1997. Chairman Rawson remarked that this would be an issue in 2002.

Lisa Appelrouth Guzman, Lobbyist, Director, Nevada Empowered Women’s Project, voiced strong opposition to S.B. 72. She emphasized the welfare experience is humiliating and degrading. Ms. Gusman stressed fingerprinting people who are applying for assistance would place a criminal stigma on the poor. She emphasized the welfare-fraud rate is minute, and therefore does not justify the expense fingerprinting would incur.

Roberta A. Gang, Lobbyist, Nevada Women’s Lobby (NWL), and National Association of Social Workers, Nevada Chapter, stated the association opposes S.B. 72. She said based on the testimony given there would not be any appreciable cost savings to the state. Ms. Gang said the Welfare Division should be concerned with the elements of the TANF program that was put in place last session. She remarked during the last session’s discussion of welfare reform there was talk of "giving a hand up, not a hand out" to persons needing assistance.

Chairman Rawson closed the hearing on S.B. 72 and opened the hearing on Senate Bill (S.B.) 89.

SENATE BILL 89: Creates fund to assist indigent persons with utility bills to be funded by certain money from abandoned property trust fund. (BDR 38- 977)

Senator Joseph (Joe) M. Neal Jr., Clark County Senatorial District No. 4, referred to a handout (Exhibit G) prepared by Paul Mouritsen, Principal Research Analyst, Research Division, and Legislative Counsel Bureau. He said the letter is in response to his request for information concerning the Arizona program to assist indigent people with their utility bills. Senator Neal explained the state of Arizona has adopted a utility-assistance fund to help people whose income is less than 125 percent of poverty. He noted assistance is also given to individuals 60 years or older, and the handicapped. Senator Neal noted pages 2 and 3 of Exhibit G is a section of Arizona’s law governing the rules and regulations of the fund. Senator Neal stated he is agreeable to an amendment proposed by the Welfare Division to identify the utility as heating and cooling. He asked for committee support of this necessary bill. Chairman Rawson questioned the limitation of the utilities in the amendment. Senator Neal replied the electric and gas companies who have these funds are essential. Chairman Rawson asked if sewer and garbage would be considered a utility. Senator Neal responded they could be considered if there was extra money in the fund. Senator Schneider questioned how the fund was accessed. Senator Neal replied the utility companies would be the initial contact because they would know who was having difficulty paying their bill.

Charles L. Horsey III, Acting Director, Department of Business and Industry, stated he was representing the director’s office for the Department of Business and Industry and the Division of Unclaimed Property. He commented in the last 3 years approximately $500,000 per year has been collected from utilities. Mr. Horsey explained all the money that may be available for this purpose, the other welfare money, and the $7 million reverted to the state’s General Fund is a lien in perpetuity. Mr. Horsey said the state’s obligation to repay people or their heirs never expires. Senator Wiener asked if the money accrued interest. Mr. Horsey replied the money goes to the state treasurer’s office and does accrue interest. Senator Wiener questioned who has rights to the interest. Mr. Horsey said he did not know but would provide Senator Wiener with an answer. Chairman Rawson commented the Legislature’s position is the money would revert to the General Fund if these people can not be found. He said it would be a small expenditure if the money needed to be paid later. Mr. Horsey agreed.

C. Edwin (Ed) Fend, Lobbyist, American Association of Retired People (AARP), Western Regional Office, testified AARP supports S.B. 89. He emphasized the recipients of this benefit would be the working poor or the elderly who have worked all their lives and are experiencing difficulty paying their utility bills. Mr. Fend told the committee Idaho has a program called "Circuit Breaker." He said people register for this program when they have their taxes prepared through the tax-aid program. Mr. Fend indicated a serious problem might occur with utility deregulation because people will be left out of the system. He stressed the companies that will be providing the services must make provisions for those needing assistance.

Senator Wiener questioned how to prioritize the recipients of the money available. Chairman Rawson replied it might be first-come-first-serve. Senator Wiener said the criteria must also be considered. Mr. Fend responded criteria is a serious problem. He stated if the money is properly invested and earning interest it could go on ad infinitum. Mr. Fend stressed deregulation may provide a lower residential utility rate which would allow the money to go further. Chairman Rawson pointed out the poverty level was set low because of this concern.

Ernest K. Nielsen, Lobbyist, Washoe County Senior Law Project, stated support of S.B. 89. He stated currently there are public benefit programs associated with our regulated electric industry. Mr. Nielsen noted Nevada Administrative Code (NAC) 704.342 establishes a program to pay utility bills for customers who have a financial hardship. According to Mr. Nielsen, there is no provision to continue such programs with the advent of deregulation. He said other states have made such provisions. Mr. Nielsen stated that at the end of the 1998 fiscal year $426,182 was provided from utilities. He said based on the bill’s 10-percent requirement it translates to $42,000 a year. Mr. Nielsen urged raising the requirement to 100 percent because this is the only mechanism providing a continuation of the public benefits that now exist under NAC 704.342. He suggested using 10 percent or a ceiling amount which ever is greater to be appropriated to the fund each year or a graduated amount over 5 years to reach 100 percent of the dollars coming from utilities. Mr. Nielsen referenced NRS 120A.180 identifying utilities. He said after deregulation there will be alternate sellers of electrical service, and recommended they be included in the pool of dollars transferred to the fund.

Mr. Nielsen paused in his testimony at the request of Chairman Rawson.

Chairman Rawson introduced Bill Draft Request (BDR)11-1392.

SENATOR SCHNEIDER MOVED TO INTRODUCE BDR 11-1392.

SENATOR AMODEI SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR WASHINGTON AND SENATOR

MATHEWS WERE ABSENT FOR THE VOTE.)

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Chairman Rawson said he would authorize a letter asking Senator Townsend, who is holding hearings on the deregulation, to consider the public programs that are being lost through the deregulation process.

Mr. Nielsen urged the bill not be restricted to heating and cooling but include other utility resources. Senator Wiener questioned the amount utility companies contribute to the fund. Mr. Nielsen responded Nevada Power Company and Sierra Pacific Power Company voluntarily contribute on a 2 to 4 rate basis. He explained the money comes from the stockholders and ratepayers to pay for those services.

Ms. Florence provided written testimony and a proposed amendment (Exhibit H) to S.B. 89. She stated S.B. 89 requires 10 percent of the unclaimed utility money currently deposited in the abandoned property trust fund be set aside in a fund to assist indigent persons with utility bills. The bill names the Welfare Division as the administrator of the fund. Ms. Florence said the Welfare Division administers the Low Income Home Energy Assistance (LIHEA) program, which provides federal funds to assist households at or below 150 percent of poverty with the costs of heating and cooling. Ms. Florence explained the program currently provides 8,500 low-income households with an annual benefit of $215. She noted 77 percent of individuals served are age 60 or more; 28 percent of the households had a child under age 6; 76 percent of the households had a disabled member.

Ms. Florence said the additional resources generated by S.B. 89 would increase the number of households served by the LIHEA program. Ms. Florence pointed out the expenditure of these non-federal funds generates an incentive award to the LIHEA program from the U.S. Department of Health and Human Services. She said this leveraging incentive has ranged from 16 to 19 percent. Ms. Florence stressed S.B. 89 would benefit the existing LIHEA program. She recommended the program be administered under the same rules as the LIHEA program and, therefore, additional administrative costs would not be incurred by the state.

Susan Miller, Lobbyist, Senior Governmental Services Representative, Sierra Pacific Power Company, voiced support of S.B. 89.

Belia C. Davis, Customer Assistance Administrator, Sierra Pacific Power Company, read from prepared text (Exhibit I). She testified Sierra Pacific Power Company supports and helps administer the Special Assistance Fund for Energy (SAFE) which helps low-income consumers pay their utility bills. Ms. Davis explained the SAFE program is funded by donations and matched by Sierra Pacific shareholders up to $125,000 annually. She called attention to households using other utility sources such as propane, oil, and wood, which is not helped by the SAFE program. Ms. Davis stressed the potential resource that S.B. 89 would provide would increase the number of households that could be helped. Chairman Rawson queried the percentage of people who have difficulty paying their utility bills. Ms. Davis replied the national level is 18 percent.

Judy Stokey, Lobbyist, Government Affairs Consultant, Nevada Power Company, voiced the company’s support of S.B. 89. She testified Nevada Power Company has a program called "Project Lift", which is administered through the Salvation Army. Ms. Stokey said customer donations are matched by the shareholders up to $50,000 per year to help individuals with their utility bills.

Charles A. Silvestri, Lobbyist, Director, Consumer and Community Relations, Southwest Gas Company, testified there are 440,000 customers of Southwest Gas Company in Nevada of whom 14 percent need assistance. He said Southwest Gas Company administers a voluntary program contributed to by employees, customers and shareholders. According to Mr. Silvestri, 545 Southwest Gas customers received $182 each last year. He claimed Southwest Gas Company returned $60,710 to the unclaimed property fund, and $160,000 within the last 4 years. Mr. Silvestri voiced support of S.B. 89.

Margaret A. McMillan, Lobbyist, Director Governmental Affairs, Sprint, stated Sprint contributes to the unclaimed property fund and therefore S.B. 89 should apply to them. She said presently customers can deduct federal charges from their bill but those qualifying for the program have not applied. Ms. McMillan expressed support of S.B. 89.

Ms. Gilbert, representing the League of Women Voters, thanked Senator Neal for this legislation and stated support of S.B. 89.

Mr. Sasser, representing Washoe Legal Services, voiced support of S.B. 89.

Ms. Appelrouth Guzman, representing Nevada Empowered Women’s Project, averred support of S.B. 89.

Chairman Rawson closed the hearing on S.B. 89 and invited testimony on Senate Bill (S.B.) 117.

Senator Valerie Wiener, Clark County Senatorial District No. 3, stated the introduction of this bill was inspired by her experience on the Nevada Commission on Aging. She indicated she became aware of the expertise and experience possessed by members of the commission when several members left the board. Senator Wiener said according to the current law, upon completion of their appointed terms their service to the commission ends. She pointed out S.B. 117 would allow former commission members and members of the general public, who have experience with or knowledge of matters relating to older persons, to participate as subcommittee or advisory members. Senator Wiener noted they would not be voting members and only receive travel and per diem compensation for their services. She said allocation of additional funds to the commission on aging would not be necessary. Senator Wiener urged the committee to support S.B. 117.

Bill Langley, Community Resource Development Unit Manager, Aging Services Division, Department of Human Resources, voiced the Department of Human Resources’ support of S.B. 117. He read from a prepared text (Exhibit J), expounding the advantages and benefits S.B. 117 would provide.

Chairman Rawson adjourned the meeting at 3:18 p.m.

RESPECTFULLY SUBMITTED:

Patricia Di Domenico,

Committee Secretary

APPROVED BY:

Senator Raymond D. Rawson, Chairman

DATE: