MINUTES OF THE meeting
of the
Assembly committee on ways and means and
senate committee on finance
joint subcommittee on general government
Seventy-First Session
April 17, 2001
The Ways and Means and Senate Finance Joint Subcommittee on General Government was called to order at 8:15 a.m. on Tuesday, April 17, 2001. Chairwoman Vonne Chowning. presided in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
ASSEMBLY WAYS AND MEANS MEMBERS PRESENT:
Mrs. Vonne Chowning, Chairwoman
Mr. Bob Beers
Ms. Chris Giunchigliani
Mr. Lynn Hettrick
Ms. Sheila Leslie
SENATE MEMBERS PRESENT:
Senator Lawrence E. Jacobsen
Senator Joseph M. Neal, Jr.
Senator William R. O’Donnell
COMMITTEE MEMBERS ABSENT:
Mr. David Parks, Excused
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Mindy Braun, Education Program Analyst
Jim Rodriguez, Program Analyst
Linda Smith, Committee Secretary
Lila Clark, Committee Secretary
Chairwoman Chowning referred to budget closings originally heard, but not closed, in the Joint Subcommittee on General Government held April 10, 2001, and asked Senator O’Donnell, who chaired the meeting, to proceed with the budget closings.
BUDGET CLOSINGS
DEPARTMENT OF BUSINESS & INDUSTRY
Senator O’Donnell stated each budget had been reviewed, comments had been received, minor decisions had been made, and stated the subcommittee might close the following budgets of the Department of Business and Industry with a blanket motion:
INSURANCE REGULATION, BUDGET PAGE B&I-33
Close with staff recommendations and technical adjustments.
INSURANCE EXAMINERS FUND, BUDGET PAGE B&I‑41
Close with staff recommendations and technical adjustments.
INSURANCE EDUCATION AND RESEARCH, BUDGET PAGE B&I‑49
Close with staff recommendations and technical adjustments.
SELF-INSURED WORKER’S COMPENSATION, BUDGET PAGE B&I-64
Close with staff recommendations and technical adjustments.
MANUFACTURED HOUSING, BUDGET PAGE B&I-75
Close with staff recommendations and technical adjustments. Include staff recommendations to delete decision unit E-710; exclude funding for the division’s annual software license fee. Funding would be moved to reserve until division’s revenue stream became more clear and stable.
MOBILE HOME LOT RENT SUBSIDY, BUDGET PAGE B&I‑80
Close with Governor’s recommendations.
HOUSING DIVISION, BUDGET PAGE B&I-92
Close with staff recommendations and technical adjustments.
MOBILE HOME PARKS, BUDGET PAGE B&I-84
Close with staff recommendations and technical adjustments.
FINANCIAL INSTITUTIONS, BUDGET PAGE B&I-107
Close with staff recommendations and technical adjustments.
FINANCIAL INSTITUTIONS, INVESTIGATIONS, BUDGET PAGE B&I-112
Close with staff recommendations and technical adjustments.
CONSUMER AFFAIRS, BUDGET PAGE B&I-119
Close with Governor’s recommendations.
NEVADA ATTORNEY FOR INJURED WORKERS, BUDGET PAGE B&I-150
Close with staff recommendations and technical adjustments.
LABOR COMMISSIONER, BUDGET PAGE B&I-179
Close with Governor’s recommendations. Include a Letter of Intent to the Department of Administration directing the department to study the unclassified salaries for the Department of Business and Industry and determine whether there was sufficient uniformity among the salaries for the administrators and other unclassified positions in the Department of Business and Industry. Provide the results of the study and a description of any recommendations developed for ensuring uniformity to the 2003 legislature.
Senator O’Donnell said the positions requested for salary increases would be dealt with in the unclassified bill.
The closing motion would be to recommend closing the budgets with the recommendations presented by Senator O’Donnell.
Chairwoman Chowning referred to Budget Account 3813, Insurance Education and Research, and wondered if the Compliance Investigator II, decision unit E‑78, was a priority. Since the position was not rated by the agency as a high priority and the legislature was trying to save General Fund dollars, Chairwoman Chowning recommended not funding the position.
Jim Rodriguez, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), said the position was one of four positions the division had requested and was needed to help with the investigations backlog and compliance with the Federal Modernization Act.
Senator O’Donnell said the Senate Transportation Committee had recently heard testimony regarding insurance practices. There had been an incident in Las Vegas where an individual had misrepresented and sold a poor quality product and the division was not aware of the incident due to the backlog of investigations. Senator O’Donnell asked if it was better to serve the public by saving $94,000 over the biennium or by hiring an additional investigator.
Chairwoman Chowning said an insurance fraud division was being requested which, if approved, would go a long way to address the problem. Chairwoman Chowning said the subcommittee could hold on closing Budget Account 3813 with her recommendation, or close separately. Senator O’Donnell recalled when a number of positions had been deleted from the Department of Motor Vehicles’ (DMV) budget. Over the last two years the constituency had suffered. Senator O’Donnell thought the DMV had been brought to its knees and was not certain the Compliance Investigator position should be deleted.
Ms. Giunchigliani wondered if any enhancements should be approved since there was such a budget shortfall and thought agencies had been asked to prioritize positions and the subcommittee would then make recommendations. Ms. Giunchigliani was concerned that if the subcommittee could not reach agreement, the Assembly would close with one motion and the Senate another. Ms. Giunchigliani felt the agency needed the administrative aid position (E-275), because currently administrative-level positions were distributing the mail and she also thought a case had been made for the Management Analyst II position. A.B. 134 would decide what happened with E-276, depending upon the status of the bill. Ms. Giunchigliani thought decision unit E-280 was going to be withdrawn, leaving the Compliance Investigator II and the Insurance Examiner II to be decided upon.
Chairwoman Chowning reminded the committee that the Compliance Investigator position would have responsibility for investigating insurers who applied for a license to sell insurance. The position would also investigate complaints regarding the conduct of resident and non-resident licensees to protect against fraud and abuse. Chairwoman Chowning agreed that fraud and investigation were extremely important, however, an entire fraud division was being requested that would address fraud. Senator O’Donnell suggested Budget Account 3813 be held until the end of the meeting and asked that a representative of the division come forward to justify the position.
MR. HETTRICK MOVED TO CLOSE ALL OF THE BUSINESS AND INDUSTRY BUDGET ACCOUNTS ADDRESSED BY SENATOR O’DONNELL WITH THE EXCEPTION OF BUDGET ACCOUNT 3813, WHICH WAS TO BE REHEARD PRIOR TO THE END OF THE MEETING.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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REAL ESTATE ADMINISTRATION, BUDGET PAGE B&I-13
Mindy Braun, Education Program Analyst, Fiscal Analysis Division, LCB, referred to Budget Account 3823, Real Estate Administration, and stated a technical adjustment was needed which required General Fund revenue. The Executive Budget included $206,655 balanced forward in each year of the biennium, which was in error. There should be no balance forward for the account. The adjustment deleted the balance forward and increased the General Fund appropriation. The total additional General Fund needed was $90,158 in FY2002 and $107,665 in FY2003. The Governor recommended transfer of $20,000 into the account from Budget Account 3820 for administrative support. Review of the administrative support budget detail indicated the transfer should have been $29,949 each year of the biennium. Based upon staff and agency review of all revenue generated by fees, the following adjustments were recommended:
Ms. Braun continued and stated the Governor recommended $4,222 in each year of the biennium for training. Based upon review of the funding, it was recommended that the amount be reduced by $524 in FY2002 and by $2,024 in FY2003. The cost savings included the reduction of funding for computer training to $1,250 in each year of the biennium; deletion of funding of $1,500 for attendance at the Judicial College in the second year of the biennium; and deletion of one-time cost. Decision unit E-710 recommended $6,012 in FY2002 to replace three computers and provide six software upgrades and $1,606 in FY2003 to replace one computer. Based upon review of the funding, it was recommended that amount be reduced by $1,467 in FY2002 and $91 in FY2003. The cost savings included revised costs for computers and the deletion of Word Perfect software upgrades. Decision unit E-720 recommended $3,451 dollars in FY2002 to purchase one laptop and one software package and an additional $2,000 for eight conference room chairs. Based upon review of the funding, it was recommended the amount be reduced by $2,136 in FY2003. Cost savings included revised cost for one laptop computer; the deletion of Word Perfect software and reduced cost for eight chairs.
Chairwoman Chowning stated the application fee increase was recommended by the Governor and wondered how much the fees for time-shares would be increased. Ms. Braun stated that this recommendation did not represent an increase in fees but was an increase in the revenue generated by the fees. The agency had reviewed their initial projections and projected the revenue to be higher than originally anticipated.
Ms. Giunchigliani asked if Ms. Braun was comfortable that the $314,000 and $514,000 in the authorized amounts would fund the budget, and Ms. Braun indicated she had worked with the agency and was confident the amounts would be sufficient.
Chairwoman Chowning referred to A.B. 502, a one-time appropriation of $321,000 for the development of the automated licensing system, and asked the status of the bill. Ms. Braun understood that A.B. 502 had been withdrawn, and the agency would be conducting further planning. Currently, the Department of Information Technology (DoIT) estimated that the amount included in the bill would have been insufficient to fund the new system. The agency would be working with DoIT and the Attorney General’s Office to find funding for the new system. Ms. Giunchigliani said a decision needed to be made on decision units E-710 and E-720 and wanted to make certain the staff adjustments for the computers, Word Perfect, and the chairs were included in the closings.
Joan Buchanan, Administrator, Real Estate Division, confirmed that the automated system had to be withdrawn, however, $35,000 was included in the budget for program charges for planning and research for the automated system. Chairwoman Chowning asked how much the current estimate was to complete the data processing system and Ms. Buchanan stated the estimates were between $550,000 and $900,000.
Senator O’Donnell said there was a $321,000 one-time appropriation that was withdrawn and asked if the agency needed the new system. Ms. Buchanan responded that the division looked forward to implementing technology into the Real Estate Division. Ms. Buchanan stated the agency could not go forward with a system that was not properly planned. Senator O’Donnell suggested the funds be placed into the Contingency Fund, and the division could return to the IFC and request funding for the new system when accurate numbers were known. Senator O’Donnell said he hated to wait another two years without implementing new technology in the Real Estate Division.
Chairwoman Chowning asked about the estimates of $550,000 and $900,000, and Ms. Buchanan said DoIT had provided the estimates. Chairwoman Chowning wanted to bring A.B. 502 to the attention of the subcommittee so everyone would know the increased amount of funding that would be needed. Ms. Giunchigliani remarked that she was not comfortable with discussing a bill that had been withdrawn and then letting the agency return in the future to the IFC for the funds.
MS. GIUNCHIGLIANI MADE A MOTION TO CLOSE BUDGET ACCOUNT 3823 WITH STAFF RECOMMENDATIONS AND ADJUSTMENTS.
Chairman Chowning asked the Budget Division to come forward and explain the $206,655 balance forward in each year of the biennium that would have to be made up with General Fund dollars. Kathalie Koche, Management Analyst III, Budget Division, Department of Administration, testified the error was an oversight on her part. Two biennia ago, the Real Estate Division had had a balance forward budgeted and the amount had been carried forward. Ms. Koche indicated there should not have been a balance forward and she had not caught the error this budget cycle. Ms. Koche was working with Ms. Braun to correct the error and reevaluate the projected revenues. Chairwoman Chowning stated, with the adjustments the $206,655 was reduced to $90,158 and $107,665 resulting in some savings. Chairwoman Chowning then asked Ms. Giunchigliani to restate her earlier motion.
MS GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 3823, REAL ESTATE DIVISION, WITH STAFF RECOMMENDATIONS AND ADJUSTMENTS.
MR. BEERS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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REAL ESTATE COMMON INTEREST COMMUNITIES, BUDGET PAGE B&I-19
Ms. Braun stated Budget Account 3820, Common Interest Communities, was funded entirely by a $3 per-unit fee collected annually from each homeowner’s association, along with the interest collected on the funds. Two adjustments were recommended:
Ms. Giunchigliani asked about the large reserve included in the budget and thought the subcommittee might want to consider reducing the fees. Ms. Giunchigliani asked what the unit fee would be reduced to and if it was mandated in statute. Ms. Buchanan responded statutes mandated a fee of no more than $3, and indicated the total figures for FY2001 would be available by July 1, 2001, and thought there would be 400 more homeowner’s associations (HOA) than projected, which would result in increased funding. Ms. Giunchigliani asked if the budget could be closed recommending a reduction in the fee and have staff adjust accordingly. Ms. Buchanan said there was a possibility other legislation would be enacted that would use the additional funds.
In response to a question posed by Chairwoman Chowning, David Walker, Deputy Administrator, Real Estate Division, stated currently there were 1,541 HOAs registered and included in the data bank. Chairwoman Chowning asked how much had been collected from the 1,541 HOAs, and how much was anticipated from the additional 400. Ms. Buchanan stated the division was currently collecting $40,000 per month and anticipated an additional $10,000 per month.
MR. HETTRICK MOVED TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS WITH THE UNDERSTANDING THAT THE REAL ESTATE DIVISION WOULD ADJUST THE FEE TO MAINTAIN THE CURRENT RESERVE LEVEL.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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Senator O’Donnell recognized Ms. Molasky-Arman in the audience and asked her to come forward. Senator O’Donnell said the subcommittee was concerned with the $94,000 recommended for a Compliance Investigator II position and asked if the position was really needed. Alice Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry, stated the position had been placed third on the division’s priority list for several reasons. First, as a result of the Gramm-Leach-Bliley Financial Services Modernization Act, the division was required to change the method of licensing resident and non‑resident agents. As a result of the act, the division was required to perform reciprocity with other states; if a licensee was in good standing in another state, Nevada must license that person. The division would not have the opportunity to conduct preliminary investigations of those applicants. Ms. Molasky-Arman firmly believed that investigations of licensees would have to be intensified after the fact. It was also incumbent upon the division to perform scrupulous investigations of the resident licensees under the act. Currently, an average of 900 cases of violations of law occurred each year by licensees. There were currently four investigators, two in the south and two in the north – a backbreaking caseload. All too often cases were closed without action because the investigators could not get to them. There had been an enormous increase in licensees. Approximately 30,000 agents and brokers were currently licensed in Nevada. There was a great desire to be licensed and to conduct business in Nevada, and the division would like to make certain only qualified, competent, and honest individuals remained licensed in Nevada. The division’s investigators performed a great service to the citizens of the state. Last year the division began tracking the remediation to consumers as a result of the work of the investigators and attorneys and the amount was $2.6 million in calendar year 2000. Ms. Molasky-Arman believed the Compliance Investigator position would assist the division in carrying out the protections needed for the public.
Ms. Molasky‑Arman said Ms. Giunchigliani had asked if the division would be receiving any funding as a result of A.B. 134 that could support the position, and the way the budget was constructed, the answer would be no. Currently, the division received $65,000 each year from fraud assessments. The provision of A.B. 134 would provide 15 percent of the fraud assessment to the commissioner and that 15 percent was approximately $155,000. In the budget, the $65,000 currently received was subtracted from the $155,000, and the difference of approximately $90,000 was used to offset General Fund because the division did not have an opportunity to put a program together in the event A.B. 134 passed. Ms. Giunchigliani asked if it would be possible to increase the percentage of fraud assessment that went to the Insurance Commission and reduce the percentage that went to the Attorney General’s Office. Ms. Molasky-Arman stated the increase would help the commission, but the Attorney General would certainly be hampered. Ms. Molasky-Arman thought the Attorney General’s budget and staffing was based on receiving 85 percent of the assessments.
Ms. Giunchigliani asked if the commission had the ability to locate and fine the 900 licensees who were in violation of existing laws, and Ms. Molasky-Arman responded in the affirmative. Ms. Molasky-Arman stated the fines would go into the General Fund. In response to a question posed by Ms. Giunchigliani, Ms. Molasky-Arman indicated the current fines were high enough and were intended to be a deterrent. Ms. Giunchigliani asked if the fines were sufficient to merit the $65,000 required for the new position and, if the position was approved, could the commission report back to the subcommittee whether or not the fines were truly adequate, and Ms. Molasky‑Arman indicated the agency could supply the requested information. The commission had calculated the fines, assessments, and penalties imposed the last five years and $11 million had been collected and deposited into the General Fund during that period.
Senator O’Donnell recommended the position, if funded, be filled with someone with bilingual skills and asked the Senate members of the subcommittee to make a recommendation.
SENATOR JACOBSEN MADE A MOTION TO INCLUDE THE COMPLIANCE INVESTIGATOR II POSITION IN BUDGET ACCOUNT 3813.
SENATOR NEAL SECONDED THE MOTION.
THE SENATE MOTION PASSED UNANIMOUSLY.
BUDGET CLOSED ON THE SENATE SIDE ONLY.
Senator O’Donnell advised Ms. Molasky-Arman that only the Senate side had closed the budget -- the Assembly had not agreed with the motion.
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DAIRY COMMISSION, BUDGET PAGE B&I-69
Ms. Braun stated the agency was self-funded with revenues generated from licensure fees and assessments on regulated dairy products. A technical adjustment was required to delete decision unit E-806, which, per the Department of Administration, should have been “zeroed-out.” The salary increase and step adjustment for the executive director was correctly included in M-301. The following adjustments were presented for the subcommittee to consider:
MS. GIUNCHIGLIANI MADE A MOTION TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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ATHLETIC COMMISSION, BUDGET PAGE B&I-175
Ms. Braun stated the operation of the Nevada Athletic Commission was funded through the state General Fund. During the budget hearing for the commission on March 22, 2001, the subcommittee heard testimony from Marc Ratner, Executive Director, Nevada Athletic Commission, and Luther Mack, Commissioner, regarding the need for a pickup service for agency bank deposits. Testimony during the hearing indicated the practice was very time‑consuming and there was a safety concern with staff traveling to the bank with cash deposits. The subcommittee, in response to the testimony, had requested that staff work with the agency to determine the feasibility of funding a bank deposit pickup service. The agency would need ten pickups per month at a cost of $15.00 per pickup; the total additional General Fund revenue that would be needed for the request was $1,800 in each year of the biennium.
SENATOR O’DONNELL MADE A MOTION TO PASS THE BUDGET WITH STAFF RECOMMENDATIONS AND ADJUSTMENTS.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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GOVERNOR’S COMMITTEE TO HIRE HANDICAPPED, BUDGET PAGE B&I-123
Mr. Rodriguez said the function of the committee was to be an advocacy and advisory council to groups and agencies that dealt with individuals with disabilities and handicaps. No enhancements or maintenance units were requested. M-300 was a net-zero cost that transferred $500 from travel to operating to take advantage of the state’s capabilities for teleconferencing. Staff recommended closing the budget at Governor Recommend.
SENATOR O’DONNELL MADE A MOTION TO CLOSE THE BUDGET AT GOVERNOR RECOMMEND.
SENATOR JACOBSEN SECONDED THE MOTION.
Ms. Giunchigliani indicated disappointment that the Department of Business and Industry had diverted a great deal of the resources away from the business community. Ms. Giunchigliani stated the committee’s budget was not the issue, but the lack of support for the deaf community and other individuals with disabilities. In the past, the commission had provided a great deal of assistance to businesses. Ms. Giunchigliani hoped the next legislative session would look at what the commission was intended to do when it was created by former Governor O’Callaghan.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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Mark Stevens, Fiscal Analyst, Fiscal Analysis Division, LCB, stated Steve Abba had responsibility for the Energy Accounts, and because Mr. Abba was in another hearing, Mr. Stevens would address the budgets.
ENERGY CONSERVATION, BUDGET PAGE B&I 183
The recommendation was to close this budget at the Governor’s recommendation. There was a potential for additional federal dollars, but that would not be known until after the legislature adjourned. During the interim, there was a possibility the account would be augmented. Chairwoman Chowning noted Nevada’s annual grant allocation would increase by approximately $313,000 if Congress approved the additional federal funds.
SENATOR O’DONNELL MADE A MOTION TO APPROVE THE BUDGET AT GOVERNOR RECOMMEND.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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PETROLEUM OVERCHARGE REBATE, BUDGET PAGE 45-39
Mr. Stevens said staff recommended closing the budget with the Governor’s recommendation. The account was not as active as it had been in the past. At the end of FY2003, the reserve level should be approximately $292,000. Chairwoman Chowning noted that in the future it might not be possible to sustain the operations of the office.
SENATOR O’DONNELL MADE A MOTION TO PASS THE BUDGET AT GOVERNOR RECOMMEND.
SECONDED BY MS. GIUNCHIGLIANI.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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COMMUNITY BASED SERVICES, BUDGET PAGE HR ADMIN-40
Mr. Rodriguez said this budget and the Developmental Disabilities budget as originally presented to the subcommittee would transfer the budgets into the Department of Human Resources (DHR). The request had been withdrawn and the first technical adjustment was the deletion of decision unit E-277 which would have been required if the transfer to DHR had occurred. An adjustment was also made to reflect revised personal computer (PC) prices provided by the Purchasing Division. Mr. Rodriguez said there were a few closing issues for the subcommittee to consider.
· E-275 was a cost allocation for the account to support the transfer of the rehabilitation chief to this budget account from the Department of Employment, Training and Rehabilitation’s administrative account. In the past, the rehabilitation chief’s position had been cost-allocated across all division budgets. However, because the position was so specific, federal standards would not allow cost-allocations to all budgets. Therefore, the position was to be moved into Community Based Services. The position would also be cost-shared with Developmental Disabilities.
· E-276 proposed to reallocate the funding mix for the agency’s deaf coordinator. After reviewing the responsibilities and duties of the position, the department had determined the position could be justified as being totally supported by the telephone surcharges. The position was currently funded 60 percent General Fund and 40 percent telephone surcharges. The General Fund available after the reallocation of funding for the deaf coordinator would be $32,816 in FY2002 and $67,117 in FY2003 and could be used to partially restore client services dollars used in decision unit E-275 to fund the rehabilitation chief position. Chairwoman Chowning asked if these were General Fund dollars saved, and Mr. Rodriguez said this enhancement would serve to restore most of the funding taken away to support the rehabilitation chief.
· E-450 provided a 3 percent increase for the Personal Care Attendants (PCA). The department had testified in an earlier hearing that the 3 percent would bring the current reimbursement rate to $15.49 per hour from $15.04 per hour. However, the department was concerned that the 3 percent raise was not enough incentive to deal with the current problems of retaining PCAs. Medicaid had recently increased the reimbursement rate to $17 per hour. The department thought perhaps the current rate should be increased to at least match the Medicaid rate. In order to meet that request, on top of the 3 percent requested in the decision unit, it would require $134,380 from the General Fund in FY2002 and $137,810 in FY2003 to raise the state PCA reimbursement to $17 per hour.
Chairwoman Chowning reminded the subcommittee that $50 million had to be cut from the budgets. The increase for the PCA reimbursement would be above and beyond the 3 percent recommended in the Governor’s budget for salary increases. Chairwoman Chowning asked what the subcommittee wanted to do. Ms. Leslie realized the budget situation was precarious, but argued in favor of the PCA salary increase. The cost was low in comparison to the benefits, and Ms. Leslie thought the state should pay at least the Medicaid rate. Ms. Giunchigliani reiterated that a 3 percent increase was not enough to make a difference. The agency had testified that 3 percent would not help retain PCAs. Perhaps the issue should be set aside until additional funds became available. Ms. Giunchigliani did not support funding the 3 percent. Chairwoman Chowning reminded the subcommittee that the 3 percent salary increase was built into the budget and the proposal was above and beyond the 3 percent. Ms. Leslie also clarified that the amount being discussed was in addition to the 3 percent recommended in the budget and Ms. Giunchigliani apologized and said she meant the additional amount. Senator O’Donnell agreed with Ms. Leslie. Chairwoman Chowning thought there was a need to increase the salaries, however, cuts had to be made and she reluctantly said no to the additional increase.
In response to a question posed by Senator O’Donnell, Myla C. Florence, Director, Department of Employment, Training and Rehabilitation (DETR), stated there was a need for tighter coordination between programs funded through the Department of Human Resources (DHR) and the DETR. When the DETR had proposed the 3 percent increase they understood it would bring the PCA rate to the Medicaid rate. Subsequent to that recommendation, which was made many months ago, Medicaid had increased the PCA rates. Although many conversations had occurred at the staff level, the state programs were never in sync with Medicaid. Senator O’Donnell asked if the 3 percent was basically a raise, and Ms. Florence stated the Office of Community Based Services did not pay personal care attendants directly—the services were contracted. A portion of the $17 covered administrative costs and the other portion covered salaries. The amount was meant to be competitive with other providers contracted by Medicaid. Ms. Leslie thought the $134,380 would bring the state up to the Medicaid rate and was close to a 9 percent increase and asked if Medicaid would pay half of the amount. Ms. Florence said Medicaid was funded half from federal funds and half from General Fund – the DETR program was funded totally with General Funds. Ms. Leslie thought the additional increase would make a huge difference, much more than just the 3 percent. Mr. Beers understood that substandard service could be provided to more people or the number of people being served could be scaled back with better service provided. Ms. Florence stated the unit cost would dictate the number of people served. The real issue was that the work was very difficult and was similar to nursing assistants in long‑term care facilities. There was a high degree of turnover. Whether the turnover was driven only by salary was undetermined. Because of the difficulty of the work and the emotional attachment, there were people who would turn to another line of work and earn the same salary. Ms. Florence said it takes a special type of person to really commit to the very difficult work of personal care services on a long-term basis. Senator O’Donnell interjected that even though the reimbursement rate was $15.49 per hour, the caregiver probably received only $8 or $9 per hour. Mr. Rodriguez continued and stated E-910 and E‑912 brought in the salary and associated operating costs of the rehabilitation chief.
MS. GIUNCHIGLIANI MOVED TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS.
Chairwoman Chowning stated staff recommendations did not include the increase in decision unit E-450.
THERE WAS NO SECOND.
SENATOR O’DONNELL MOVED TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS INCLUDING THE $134,380 IN FY2002 AND $137,810 IN FY2003.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION PASSED ON THE SENATE SIDE (3 AYES, 0 NAYS) AND FAILED ON THE ASSEMBLY SIDE (3 AYES, 2 NAYS, 1 ABSENT)
BUDGET CLOSED ON SENATE SIDE ONLY.
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Mr. Beers asked if a two-thirds vote was required. Mr. Stevens said in a joint committee, a separate majority had to be reached on both the Senate and Assembly and four votes would have been needed for the Assembly Subcommittee to close the budget.
Chairwoman Chowning asked for a motion on the Assembly side.
MS. GIUNCHIGLIANI MOVED TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS.
MR. HETTRICK SECONDED THE MOTION.
THE ASSEMBLY MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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Chairwoman Chowning noted the Assembly had voted to close differently than the Senate.
DEVELOPMENTAL DISABILITIES, BUDGET PAGE HR ADMIN-48
Mr. Rodriguez said this budget also dealt with the issue of the rehabilitation chief being transferred to Community Based Services. Staff had made technical adjustments in E-710 to reduce the PC costs. E-275 was the cost share for the Developmental Disabilities budget account in support of the rehabilitation chief position transferred from the Rehabilitation Administration budget to Community Based Services. There was an $18,785 transfer in FY2002 and $19,110 in FY2003. The reduction that occurred in the General Fund for the position would have to be made up with the reallocation of funding from the deaf coordinator position in the previous account.
SENATOR O’DONNELL MOVED TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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DIRECTOR’S OFFICE, BUDGET PAGE DETR-1
Staff made technical adjustments to the cost allocation for equipment under $500 and the revised PC cost adjustments.
Decision unit E-930 recommended deleting this budget account and moving it into the DETR’s Administrative Services Account, Budget Account 3272. The accounts would be merged in total and the Governor did not recommend any cost savings associated with the merge. The department had indicated there would be no overlap in responsibility or function. Mr. Rodriguez clarified staff had made reductions to PC prices in the DETR Administrative Accounts.
SENATOR O’DONNELL MADE A MOTION TO CLOSE THE BUDGET ACCOUNT WITH STAFF RECOMMENDATIONS.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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ADMINISTRATIVE SERVICES, BUDGET PAGE DETR-6
Staff made the standard PC reduction in decision unit E-710. Decision unit E‑916 recommended transferring an Employment Services Officer (ESO) II position to this budget from the DETR’s Employment Security budget. The position would act as liaison between the Governor and the department in all Workforce Investment Act (WIA) activities.
SENATOR O’DONNELL MADE A MOTION TO CLOSE THE BUDGET ACCOUNT WITH STAFF RECOMMENDATIONS.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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INFORMATION DEVELOPMENT AND PROCESSING, BUDGET PAGE DETR-11
Mr. Rodriguez stated a computer network technician was recommended to be transferred to this account from the One-Stop Career Center budget. The position would continue to support the center, but would also fulfill other data processing needs of the department. Chairman Chowning stated staff had also included the standard technical adjustment for the revised PC prices.
MS. GIUNCHIGLIANI MADE A MOTION TO CLOSE THE BUDGET ACCOUNT WITH STAFF RECOMMENDATIONS.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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EMPLOYMENT SECURITY, BUDGET PAGE DETR-24
Staff made three technical adjustments:
In response to a question posed by Senator O’Donnell, Mr. Rodriguez stated no General Fund dollars were included in the budget account
SENATOR O’DONNELL MOVED TO CLOSE THE BUDGET ACCOUNT WITH STAFF RECOMMENDATIONS INCLUDING THE CLOSING ISSUES.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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CAREER ENHANCEMENT PROGRAM, BUDGET PAGE DETR-38
Mr. Rodriguez said the Career Enhancement Program (CEP) was funded through a .05 percent assessment tax on Nevada employers’ taxable wages paid to Nevada employees. The funds were used to provide training services to the unemployed. The standard technical adjustment for revised PC prices was included in E-710. In M-200, the department had requested increased funding authority in the budget account based upon a projected 10 percent growth in the labor force over the biennium, slightly less than 5 percent per year. The 10 percent growth figure used by the department appeared to be on the high side, but was still reasonable. Chairwoman Chowning noted the current rate of growth was 3.6 percent per year, and yet the estimate was 5 percent. If the 10 percent increase was not approved, would there be a savings to Nevada’s employers? Mr. Rodriguez stated the 3.6 percent was the department’s projection for population growth. Chairman Chowning stated the 10 percent still seemed high. Senator O’Donnell asked Chairman Chowning to have a representative from the agency address the issue.
Birgit Baker, Administrator, Employment Security Division, stated M-200 was the estimate for the increase in client service expenses projected for the program. The program served the unemployed. The sooner the unemployed returned to the work force the sooner benefits would be terminated. The 10 percent increase was based on the projected growth of employers, as well as the labor force. If there was any increase in the unemployment rate within the next couple of years, this was the account that would serve those people.
MS. GIUNCHIGLIANI MADE A MOTION TO CLOSE THE BUDGET ACCOUNT WITH STAFF RECOMMENDATION.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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EMPLOYMENT SECURITY – SPECIAL FUND, BUDGET PAGE DETR-44
Mr. Rodriguez said the technical adjustments were in the area of PC pricing and there was a reduction in the budget request for memory upgrades to the PCs. There were several closing issues:
Chairwoman Chowning wondered where additional funding, if required, would come from if the budget was approved as recommended. Mr. Rodriguez said the department had projected $1 million from the Reed Act and might receive $3 million, which could be used for the project.
Ms. Baker said the department had experienced difficulty obtaining a special use permit for the land specifically identified for the project. The project had been submitted to the Capital Improvement Projects (CIP) Subcommittee. At that time, the department indicated it was working with the Bureau of Land Management (BLM) and State Lands to find another BLM location. Ms. Baker explained the costs should be the same on the land and the department did not expect to have a significant increase in the project. However, if there was a major increase in the amount of funding required, the department would not proceed with the project without approval of the Interim Finance Committee.
MS. GIUNCHIGLIANI MOVED TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS AND THE TECHNICAL ADJUSTMENTS WITH THE UNDERSTANDING THAT CIP AND PUBLIC WORKS STILL NEEDED TO MAKE A DETERMINATION ON THE BUILDING SITE.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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REHABILITATION ADMINISTRATION, BUDGET PAGE DETR-53
Mr. Rodriguez said this account was the department’s administrative budget for the rehabilitation side of the operations. The standard technical adjustment was made to PC costs. E-275 recommended $6,045 in each year of the biennium for additional out-of-state travel expenses. In the previous biennium, as the Workforce Investment Act (WIA) was being implemented, the department was not able to fully utilize the travel associated with the responsibilities associated with the WIA. The additional funding made up that difference. E-910 and E‑912 recommended the transfer of the rehabilitation chief to Community Based Services.
MR. HETTRICK MOVED TO CLOSE THE BUDGET AT GOVERNOR RECOMMEND WITH TECHNICAL ADJUSTMENTS.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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WELFARE TO WORK, BUDGET PAGE DETR-34
Steve Abba, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, LCB, stated the Welfare to Work (WtW) budget was administered by the Welfare Division. The Legislative Committee for the Fundamental Review of the Base Budgets of State Agencies recommended the budget be moved to the Department of Employment, Training and Rehabilitation (DETR). Mr. Abba referred to a letter attached to the closing documents from Mike Willden that provided justification for the move, and it appeared to be a legitimate recommendation. The program was jointly administered by the Welfare Division and the DETR, and with the passage of the WIA and the One-Stop Career Center, it made sense to have the DETR administer the program. No funding was recommended for FY2003 because it was thought the federal funding for the program would disappear in February 2002. Congress had recently authorized an extension to states to expend WtW grant funds, however, Congress did not allocate additional funding. States could expend funds through the federal fiscal year 2004. Mr. Abba had asked the division to look at expenditure patterns for FY2001 to determine if there would be any carry forward money. The division estimated approximately $644,000 of unspent federal and state money would be available in carry forward from FY2001 to FY2002. The closing sheets reflected the carry forward. The carry forward was brought into FY2002 and was disbursed through the subgrant category, which would be used by the local Workforce Investment Boards. The division had indicated the additional funding in FY2002 reflected in the closing sheets, as well as what was recommended in the original budget, would probably not be spent and suggested any unspent money be carried forward into FY2003. There was probably sufficient money in the account to be used over the current biennium. The DETR would have to do some work programs to move forward any unspent FY2002 money. Due to the extension date allowed by Congress, there might be some carry forward money into FY2004. All federal dollars were budgeted and were maximized through state match.
MS. GIUNCHIGLIANI MOVED TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks and Mr. Beers were not present for the vote.)
BUDGET CLOSED.
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DISABILITY ADJUDICATION, BUDGET PAGE DETR-58
Mr. Rodriguez explained this budget account had responsibility for processing all the applications for disability benefits under the Social Security Disability Income and Supplemental Security Income disability programs. The division also conducted hearings for disability beneficiaries recommended for benefits. The account was 100 percent federally funded. No technical adjustments were recommended. M-200 recommended an increase of $767,240 in total funding over the biennium based on an estimated growth of 21.3 percent per year in the number of adjudication cases. M-516 was in response to the department’s new process of claims adjudication. In order to participate in the process outlined by the Social Security Administration (SSA), the department had indicated 26 adjudication positions would have to be upgraded, and a new adjudicator specialist position was required to handle professional relations activities associated with the new process. The cost of the proposal was $403,012 in SSA funding over the biennium to complete Phase I of the new SSA processing model. E-720 recommended the bureau accept $33,512 in FY2002 and $50,000 in FY2003 in federal funding to participate in the SSA pilot program to implement an electronic paperless case filing process. The funding would provide the program start-up costs and subsequent funding in FY2003 would support the annual program maintenance costs.
MR. HETTRICK MADE A MOTION TO CLOSE THE BUDGET AT GOVERNOR RECOMMEND.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
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VOCATIONAL REHABILITATION, BUDGET PAGE DETR-64
One technical adjustment was included to reflect revised PC prices provided by the Purchasing Division. In M-200 the department asked to accept additional federal funds, which required state matching funds at 21.3 percent per year over the biennium. In addition to the projected caseload increase, part of the funding would be used to support the hiring of two public service interns to be used to help with department functions in determining rehabilitation services and also to help the department promote recruiting for future rehabilitation counselors.
Chairwoman Chowning asked someone from the department to come forward and explain the difference in the growth projected in the budget and the number included in the performance indicators. Ms. Florence said the initiative to hire public service interns would hopefully give the department a track to be able to hire rehabilitation coordinators. Because there were eight or nine vacancies over the biennium, client services that could be offered with the reduction in staff were obviously compromised and impacted the performance indicators. The agency was hopeful, if fully staffed, the performance indicators would also improve.
Mr. Rodriguez referred to E-275, which recommended $4,569 in FY2002 and $3,988 in FY2003 for additional out-of-state travel to allow the bureau chief and a rehabilitation manager to attend various WIA related conferences. Staff recommended deleting $2,895 in FY2002 and $2,314 in FY2003 because the funding for the travel for the bureau chief was already accounted for in the Rehabilitation Administration account. E-276 was associated with the recommendation to merge the bureau’s Vocational Assessment Centers (VAC) back into the Vocational Rehabilitation account. E-900 and E-902 transferred the VAC account in whole with 17 positions back into the Vocational Rehabilitation account. Mr. Rodriguez stated the department was selected by the Legislative Committee for the Fundamental Review of the Base Budgets of State Agencies during the interim to undergo a review of its budgets. The review recommended that the division consider the possibility of merging both its Blind Services and the Vocational Rehabilitation functions. Staff recommended follow-through with the committee’s recommendation and an analysis on the possibility of merging the two accounts. Chairwoman Chowning asked if the subcommittee agreed to issue a Letter of Intent to have the department study the feasibility of merging Vocational Rehabilitation and the Bureau of Blind Services and the Visually Impaired. Mr. Hettrick said he had served on the Fundamental Review Committee and the department had indicated they wanted to do further analysis. Mr. Hettrick supported a Letter of Intent.
MR. HETTRICK MADE A MOTION TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS, INCLUDING A LETTER OF INTENT.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
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VOCATIONAL ASSESSMENT CENTERS, BUDGET PAGE DETR-73
In the previous biennium, the Vocational Assessment Centers was given permission to segregate and separate from the Vocational Rehabilitation budget account based on the assumption they would be able to generate sufficient operating revenues to remain separate. However, additional operating revenues did not materialize. E-900 and E-902 recommended moving VAC back into Vocational Rehabilitation. The technical adjustment was also made to reflect revised PC prices.
Chairwoman Chowning asked how the transfer would impact the budget. Mr. Rodriguez said the decision unit merely moved the function back into the Vocational Rehabilitation budget account and would have a slight affect on dollars available for client services. The only cost savings were the five positions being deleted from the VAC as a result of the merge.
SENATOR O’DONNELL MADE A MOTION TO CLOSE THE BUDGET AT GOVERNOR RECOMMEND WITH THE TECHNICAL ADJUSTMENT.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
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CLIENT ASSISTANCE PROGRAM, BUDGET PAGE DETR-79
Mr. Rodriguez stated the program was 100 percent federally funded and employed two positions. The Client Assistant Program (CAP) provided information and advice to individuals statewide regarding benefits and services under the Americans with Disabilities Act and all available benefits and services under the Rehabilitation Act. The department requested equipment and PC replacements. Staff did not recommend any other adjustments to the budget.
MR. HETTRICK MADE A MOTION TO CLOSE THE BUDGET AT GOVERNOR RECOMMEND WITH TECHNICAL ADJUSTMENTS.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
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SERVICES TO THE BLIND AND VISUALLY IMPAIRED, BUDGET PAGE DETR-83
The Bureau of Services to the Blind and Visually Impaired (BSBVI) account shared its funding with the Vocational Rehabilitation accounts. Vocational Rehabilitation received 80 percent and the BSBVI received 20 percent of the funding. Both served the same client base. Technical adjustments were recommended for PC prices and M-200 reflected the 6.11 percent increase in the bureau’s available federal Section 110 funding over the biennium and corresponded to the decision unit included in Budget Account 3265. E-325 was the department’s request for $190,269 in funding over the biennium for a Rehabilitation Coordinator II position. The position would be housed within the Clark County School District to serve visually impaired school-age children to prepare them to move into the job market. E-710 recommended a reduction in client service dollars of $2,300 in FY2002 and $64,400 in FY2003 to fund the purchase of the bureau’s replacement PCs.
Chairwoman Chowning referred to E-325 and complimented the department, the Governor, and the Clark County School District for working together to make the recommendation. Chairwoman Chowning thought the new position would serve as a marvelous goal for the state to help visually impaired students be able to become employed, but was concerned the funding would not be sufficient. The 246 visually impaired students currently enrolled in Clark County School District would be well served.
MR. HETTRICK MOVED TO CLOSE THE BUDGET WITH STAFF RECOMMENDATIONS.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
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EQUAL RIGHTS COMMISSION, BUDGET PAGE DETR-95
Mr. Rodriguez stated the account requested no maintenance or enhancements, other than E-710, the standard decision unit to purchase equipment under $500. There were no other recommendations for this account. Staff recommended approval as recommended by the Governor.
SENATOR O’DONNELL MOVED TO CLOSE THE BUDGET AT GOVERNOR RECOMMEND.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Parks was not present for the vote.)
BUDGET CLOSED.
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Chairwoman Chowning adjourned the meeting at 10:38 a.m.
RESPECTFULLY SUBMITTED:
Linda J. Smith
Committee Secretary
APPROVED BY:
Assemblywoman Vonne Chowning, Chairwoman
DATE: