MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-First Session
May 2, 2001
The Committee on Ways and Meanswas called to order at 7:35 a.m. on Wednesday, May 2, 2001. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairwoman
Mr. Bob Beers
Mrs. Barbara Cegavske
Mrs. Vonne Chowning
Mrs. Marcia de Braga
Mr. Joseph Dini, Jr.
Mr. David Goldwater
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Mr. David Parks
Mr. Richard D. Perkins
Ms. Sandra Tiffany
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Carla Watson, Program Analyst
Mark Krmpotic, Program Analyst
Mike Chapman, Program Analyst
Jim Rodriguez, Program Analyst
Lila Clark, Committee Secretary
Andrea Carothers, Committee Secretary
Assembly Bill 297: Makes various changes regarding public schools and educational personnel. (BDR 34-297)
Mr. Bernie Anderson, Assembly District 31, introduced himself and said he came before the committee to present the provisions of A.B. 297, the Quality Teaching Act. He said that lately the discussion about teachers and teaching in Nevada had been focused on the teacher shortage and the debate about the need to increase the salaries of teachers. Mr. Anderson said the crisis was very real. Nevada faced a teacher shortage, greater in southern Nevada than anywhere else, but the level of compensation was in reality only part of the discussion. Research had shown that the single most important factor that impacted student achievement was the quality of the teacher in the classroom with that student. Increasing salaries alone would not address all the needs of professionals in the classrooms. A comprehensive system of support must be implemented in order to ensure quality teaching.
Mr. Anderson said that A.B. 297 spoke to the support for teachers in three areas: professional development, enhanced compensation, and evaluation of teaching performance. He further stated that Sections 1 – 3 of the bill would add three days to the school year for professional development and provide an enhancement to the Distributive School Account (DSA) to help pay for quality professional development at the district level that would be on-site and ongoing. That would be in addition to the professional development that was provided by the regional professional development centers that were funded through the bill in Sections 8 and 9. The professional development centers would be charged with ensuring that teachers were teaching to the new, higher academic standards. While that charge was very worthwhile, it did not begin to meet other professional development needs such as training for technology.
The cost to add three days to the school year would be approximately $45 million and the enhancement to the DSA would represent a cost to the state of approximately $6.4 million.
Section 4 dealt with enhanced compensation for teachers. That section, rather than mandating to local school districts what their program for enhanced compensation should look like, put the responsibility for developing such a program in the hands of the districts and the employee groups who represented the employees in the district. Under Nevada Revised Statutes (NRS) 288, salaries were a mandatory subject of bargaining and the bill would require that the program that was ultimately adopted be bargained under NRS 288 so that the provisions would become part of the collective bargaining agreement.
Mr. Anderson said that he was aware of such programs that had been bargained and provided a level of enhanced compensation that rewarded teachers based on their skills and knowledge. One example of that was in Coventry, Rhode Island, where under a negotiated agreement, teachers who had received National Board Certification and were themselves receiving enhanced compensation for that, formed teams of mentors and observers. Other teachers in the district who chose to do so could go through an evaluation and assessment system and if they successfully completed that assessment they received enhanced compensation.
Section 10 of the bill would provide an appropriation to help pay for the cost of enhanced compensation. The money would be appropriated out to the districts solely for the purpose of funding programs of enhanced compensation.
Mr. Anderson reported that Sections 5 through 7 of A.B. 297 dealt with the evaluation of teachers. In the Seventieth Session of the Legislature both the Assembly and the Senate approved A.B. 332. It dealt with the ongoing problem of “drive by” evaluations of teachers by administrators. In testimony on A.B. 332, many teachers came forward and told about the experience, or lack of experience, in being evaluated by their principals.
Mr. Anderson said that teachers came forward and asked to be evaluated. The legislature agreed that it was not too much to ask of an administrator to actually observe the performance of teachers for one hour before writing an evaluation.
Mr. Anderson advised the committee that Governor Guinn vetoed the bill. Since the bill was introduced in the Assembly Education Committee, he had worked with the Clark County School District, the Washoe County School District, the Nevada Association of School Boards, administrators’ groups, and the Nevada Concerned Citizens to amend the sections of the bill to address any remaining concerns. Mr. Anderson said Governor Guinn had been apprised of the new language in the bill. The bill was amended with the concurrence of all the above-mentioned groups and he believed the amendment would address the concerns that Governor Guinn had with the bill in the last session.
Mr. Anderson said he believed that A.B. 297 was an important piece of legislation for education in Nevada. It represented what should be funded and what Nevada should be working toward to ensure a quality education for all Nevada students. However, the realities of the current budget structure and the lack of funding led Mr. Anderson to ask the committee to amend out the portions of the bill that requested appropriations or represented an unfunded mandate to the school districts. Because of that, Mr. Anderson submitted Exhibit C that was a proposed amendment to delete Sections 1 through 4 and Sections 8 through 10 of the bill. He said that he believed that the portions of the bill that dealt with evaluations were important and should be sent along to the Senate for consideration.
Ms. Debbie Cahill, representing the Nevada State Education Association (NSEA), introduced herself and thanked Mr. Anderson for sponsoring the legislation for the NSEA. At the beginning of the legislative session, she had high hopes. The bill represented one of the four pillars of the Quality School Plan, addressing the importance of quality teaching. The evaluation component was something that was still very important to the NSEA. She believed that the amendments that were in the reprint representing Sections 5, 6, and 7 were still very important to teachers even though the money would be removed from the bill with the amendments proposed by Mr. Anderson in Exhibit C. Ms. Cahill said the NSEA appreciated the work that had been done to arrive at the consensus amendment and believed the language would survive the scrutiny of Governor Guinn and address the concerns he had in A.B. 332 of the Seventieth Session of the Legislature. She urged the committee’s support for the proposed amendments that had been submitted.
Mrs. Chowning applauded Mr. Anderson for bringing the bill to the committee. She reiterated that for a first-time teacher or a probationary teacher the person doing the evaluation must have 45 continuous minutes for the evaluation and two evaluations for a total, at least, of 60 minutes. For teachers who had passed their probationary period, two evaluations consisting of at least 30 continuous minutes would be required. That would give more flexibility but would be very reasonable.
Ms. Cahill said the original language in A.B. 332 had a one-hour block of time. The school districts had registered some concerns about being able to accommodate the requirement in a single block of time. Ms. Cahill said for a probationary teacher the 45 minute continuous observation would have to be done three times during the year until the teacher was no longer on probation. For a post-probationary teacher there would be at least a 30-minute block of time that would be continuous and the remaining time could be made up in various amounts of time. She said that there was preserved in the bill a section that the administrator must indicate the amount of time on the evaluation sheet and she believed that would accommodate the districts’ concerns about how the administrator would verify the process. Ms. Cahill said she believed all the parties were comfortable with the language and that it was an improvement.
Mr. Anderson testified that many of the secondary schools were moving to large blocks of time rather than the traditional 50-minute class period. That provided an opportunity for an administrator to easily observe a teacher in the classroom for 45 minutes. It became even more important because there was a variety of teaching times of up to 120 minutes per period. The difference between the elementary and the secondary programs was very important and the instrument used for evaluation meant that every third year even a post‑probationary teacher had a major evaluation that included a longer period of observation and discussions prior to and following actual classroom visitation. The element of 45-minute evaluations was only a small part of the value to time periods in looking at a teacher’s performance. It was not what a teacher said or how he looked on paper but what really took place in the classroom. That was the crucial part of education that did not show up in a textbook. That was the relationship and interaction that came between the teacher and the student and that was the most important element because that was the real reward of teaching.
There being no further testimony on A.B. 297, Chairman Arberry closed the hearing on A.B. 297 and opened the hearing on A.B. 232.
Assembly Bill 232: Establishes judicial retirement system for certain justices of the supreme court and district court judges. (BDR 1-208)
Mr. Lynn Hettrick, Assembly District 39, introduced himself and said the committee might remember that the issue in A.B. 232 had been discussed in the Seventieth Session of the Legislature. Mr. Hettrick said it had been one of two issues he worked on with Jan Evans and A.B. 232 represented the fruition of attempting to work on the issue last session and running out of time. Because of that, an interim study was done and A.B. 232 was the recommendation of the interim committee. Mr. Hettrick described the bill as quite large but essentially it established within the Public Employees’ Retirement System (PERS) a judges’ pension plan and essentially combined the provisions of the PERS into the judges’ pension plan. Mr. Hettrick referred to Exhibit D that explained the proposal. The first page of Exhibit D explained how the benefits would be paid, the fact that some judges would have the option to transfer into the system, and why the state needed to input $13.9 million to make the system work.
Mr. Hettrick asked the committee to refer to the second page of Exhibit D, which was a 40-year cash flow projection. He described it as the ”guts” of the proposal. Currently, the judges’ pensions were funded directly from the General Fund as cash flow. That did not make a great deal of sense. When Nevada was a small state that was not growing rapidly, it did not matter too much because the payments were small. As Nevada was growing, the number of judges was growing, and everyone, including judges, was living longer, the liability was growing and becoming a huge burden to the people of the state of Nevada. Mr. Hettrick pointed out on Exhibit D that the state of Nevada would pay $269,800,300 of General Fund cash over 40 years to fund judges’ pensions if the pension plan was not set up and made an actuarially sound and funded program. Over the same 40 years, the state would spend $165 million if the program was set up correctly. That was a savings of $104 million in cash over the 40 years. At the end of 40 years the fund, after saving $104 million in cash, would, in addition, have $150 million in the bank that could be used to help fund pensions into the future. That was a quarter of a billion dollar savings over 40 years. Mr. Hettrick said he could not think of a single thing that the legislature could do in the session that was more important to the taxpayers of Nevada than to fund the program and get it started correctly. In the year 2001 there would be a $15,644,000 deposit. That was the money that would have to be spent from the General Fund to fund the judges’ pensions plus the $14 million that was in Section 85 of the bill to fund the unfunded liability that was already accrued to judges that were in the system. The $14 million was putting money in the bank for what was already owed and did not appear on the balance sheet. If the $14 million was put in with the money the state currently owed in terms of cash flow, there would be a $15 million deposit in the first year. In 2003, there would be a $7,963,800 deposit and that assumed that in that year judges who were currently in the Judges’ Pension Plan would want to switch across and go into the actuarially sound and funded program and they would bring their money with them. It was essentially nothing more than a paper transfer within the PERS and appeared in Exhibit D as the net of the PERS transfer of $160,032,313. Mr. Hettrick said there was no doubt about the possible savings if A.B. 232 was passed. Based on the current earnings of the PERS system the plan would save one quarter of a billion dollars of taxpayer money over the next 40 years. Mr. Hettrick stated that if the plan was not funded and anything else was funded he thought the legislature would be doing the citizens of the state of Nevada a grave disservice because A.B. 232 was the only bill he knew of that actually would save the taxpayers money. He said there were bills that would potentially save some expense but this bill would absolutely save every citizen in the state money.
Mrs. Cegavske thanked Mr. Hettrick for his work on A.B. 232. She asked what legislature started funding the Judges’ Pension Plan from General Funds.
Mr. Hettrick said that the Judges’ Pension Plan had never been funded. As long as there had been judges they had been funded through the General Fund and no pension system had been established.
Mrs. Cegavske asked how much money the state had not put into a pension plan and how much had been lost by not contributing in the past.
Mr. Hettrick answered that the state owed $13 million now to the judges presently in the system and he thought the number was approximately the same for judges who had already retired. The state had unfunded liability for them that was being paid currently out of cash flow and General Fund money. To do the plan correctly, the state should invest $26 million. However, the interim committee did not propose to do that. He said that by the year 2008 the plan would go cash flow positive because of the savings and from then on the state would save a significant amount of money every year.
Mrs. Cegavske said that she was trying to make the point that the pension plan had not been funded from the beginning and would require a continuous amount of cost in the future if the plan was not funded now. She said she appreciated receiving Exhibit D as that had helped explain the need for the plan.
Mr. Hettrick interjected that Judge Porter had just informed him that the state started paying judges’ pensions out of the General Fund in 1937.
Vice Chairwoman Giunchigliani asked if the bill would affect any sitting judge. She asked for confirmation that the cost impact would be for the future.
Mr. Hettrick said there was no impact on the sitting judges. It did not require any contribution on the part of the judges and the sitting judges would not have any change in benefits. The judges would gain some of what they wanted by going into the PERS such as spouse benefits. The judges indicated in the interim hearings that they would have preferred a shorter vesting period. The committee went back and forth on that issue and ultimately decided to keep the same vesting period as currently existed and that was 22 years. The state employees had a vesting period of 30 years. Mr. Hettrick said that he thought if all parties left the table slightly dissatisfied the committee probably did a reasonable job. He said the bill proposed a fair compromise.
Vice Chairwoman Giunchigliani reiterated that the key was to get an actuarially sound fund in the long run.
Mr. George Pyne, Executive Officer of the Public Employees’ Retirement System, introduced himself. Mr. Pyne said he could not agree more with Mr. Hettrick with respect to the fact that the most important thing the bill did was to provide some sound financial footing for funding judges’ pensions in the future. He said he had reviewed the bill and could not find in the bill that the new system would begin January 1, 2003, and he thought that was important as that would be when benefits would be funded and be paid out of the plan. In addition to the $14 million up-front seed money, the bill would also need to provide that on an ongoing basis the normal cost of the plan, 25.6 percent of judges’ compensation, would need to be paid into the plan. That would be similar to the 18.75 percent of a state employee’s pay that went into the PERS plan. He said he could not find that mechanism in the bill.
Mr. Hettrick clarified that that was the intent of the committee.
Vice Chairwoman Giunchigliani asked that it be noted for the record that the effective date would be January 2003 and that the language for the mechanism for the ongoing contribution should be added to the bill.
Mr. Hettrick commented that he had no problem with that as it was obviously the intent. He wondered if it was not felt that because the fund had been established within the PERS, the contribution rate was not assumed because they became a part of the PERS funding. Mr. Hettrick went on to say that he had received input from Mr. Mark Stevens that it must be included in the bill.
Judge Gene Porter, Chief Judge of the Eighth Judicial District Court in Clark County, introduced himself. He introduced Senior District Judge Norman C. Robison. Also present in the audience was Chief Justice of the Nevada Supreme Court, Mr. William Maupin.
Judge Porter complimented Mr. Hettrick and the members of the interim subcommittee. He said it was difficult subject matter and the subcommittee had heard testimony from various competing interests and produced a bill that he thought did a pretty good job for the citizens of the state. The goal that Mr. Hettrick was trying to accomplish was one that the judges supported and he had the judges’ support for most of the provisions of the bill.
Judge Porter offered to historically explain to the committee the reason why the issue was before them. The Judicial Pension Plan, of which he was a member, was first created in 1937. There were currently two separate pension plans. There were 63 judges in the state of Nevada. Approximately one-half of them were members of the PERS retirement system and the other one-half of the judges were in a system called the Judicial Retirement System. He said he became a judge after coming from the private sector and left the private practice of law and as a result, he became a member of the Judicial Retirement System. For those members of the bench that had previous public service either as a district attorney, public defender, deputy attorney general, or some other form of public service, they simply transferred their current PERS service and continued in that service when they became a judge. As a result, one-half of the 63 judges were in the PERS and the other one-half were in the Judicial Retirement System. There were several distinctions between the plans but the main distinction was that those in the Judicial Plan did not pay into a fund so as a result, upon retirement, they became a “hit” upon the General Fund and the legislature made an appropriation for those judges to protect their retirement as they retired. The PERS judges had a fund. Judge Porter said that Mr. Hettrick and the interim subcommittee tried to create a fund for people such as Judge Porter that would grow. Judge Porter said he certainly hoped that Mr. Hettrick was correct when he said judges were living longer and he hoped that someday he would be able to draw a pension from the fund. Judge Porter said A.B. 232 was a bill that would affect him directly. Judge Porter said that he believed the bill was a good one and would leave it to the wisdom of the committee as to whether the money to fund it was there. The system needed to be addressed and it would have to be done sooner or later. In 1937 the current system made sense as there were not many judges. Judge Porter said that everyone was familiar with the growth in the state and judges saw it in the courtroom every day. That was the reason the judges were there.
Judge Porter said that he had several questions about the bill as a whole although some of them were minor. Judge Porter said that Section 19 of the bill, subsection 3(b), stated that the board could “examine and copy personnel and financial records of a justice of the supreme court or district judge.” He questioned what records could be copied.
Judge Porter’s second concern was with Section 23 of the bill. The interim study subcommittee recommended that the current PERS judges be allowed to transfer into the new system. The judges read Section 23 to limit itself to PERS employees that had no prior judicial service. It appeared to Judge Porter that those people coming from the public sector such as from the district attorneys’ offices would not be eligible. He used as an example, Clark County District Attorney Stu Bell who had many options open to him, one of which was to become a judge and he had discussed that option. That section would fit him so that he could bring his PERS credit as District Attorney of Clark County and continue to accrue credit. Judge Porter said he did not read the language to allow PERS judges to have the option to opt back into the system. That was a specific recommendation of the interim study.
Vice Chairwoman Giunchigliani said the committee would note that there was a question on when judges would be allowed to opt in. She said that possibly a date needed to be added to the bill.
Judge Porter said that the interim study wanted to allow PERS judges to enter the system and he was unable to read Section 23 as allowing that.
Mr. Hettrick said it was probably a timing issue. He said it needed to be done once a year and that problem likely came from that, otherwise, there was a problem created so there needed to be established a window when they could elect to join the system. Mr. Hettrick agreed with Judge Porter that the intent was to allow judges coming from the public sector to opt into the system.
Mr. Pyne offered that he agreed with the comments made by Judge Porter and Mr. Hettrick. He thought that it was covered in Section 22, subsection 2 (a) beginning on line 34.
Judge Porter interjected that Section 22 dealt with new judges first taking the bench after the election in November. Subsection 2 dealt with current judges who were then reelected after November. He said that he read subsection 2 (a) as some type of grandfather clause.
Mr. Pyne said the intent was that the judges have that election.
Vice Chairwoman Giunchigliani indicated that it would be once a year so that judges would not go back and forth from the system.
Judge Porter reiterated that it had been a subcommittee recommendation and he wholeheartedly supported it.
Judge Porter said that his third concern dealt with Section 30 of the bill. Section 30 dealt with the Senior Judge Program. He informed the committee that Judge Robison was one of the senior judges. Judge Porter said the Senior Judge Program really helped the other judges stay ahead of the curve as far as adding new judges on a constant basis. Judge Porter stated that Judge Robison just had the privilege of spending three months in Ely living out of his fifth-wheel. Judge Robison was filling in for Judge Hoyt who had retired. The senior judges would rotate in and pick up Judge Hoyt’s calendar for three months. Senior judges were paid out of administrative assessments but currently those judges in the Judicial Plan who had retired and had been appointed by the Supreme Court to sit on conflict cases continued to accrue retirement benefits. He said Judge Robison, who was in the PERS system, would not continue to accrue benefits. Judge Porter said that with the way he read Section 30 none of the senior judges would be allowed to continue to come back and serve, as appointed by the Supreme Court, and accrue benefits. Judge Porter said he raised that issue because he knew that A.B. 555 was a PERS bill that allowed PERS employees to continue under a labor shortage scenario. There was language in that bill that allowed the Supreme Court to determine whether or not there was a labor shortage. The Senior Judge Program was very beneficial for the citizens of the state because they were inexpensive, experienced, and they could handle some of the conflict issues that other sitting judges could not. Judge Porter said he would encourage the committee to follow along the lines of A.B. 555.
Vice Chairwoman Giunchigliani said that Mr. Stevens pointed out that the language in A.B. 232 was designed to parallel the language in A.B. 555 and the committee would have to make sure there was no conflict between the two bills.
Judge Porter said that if that was the intent, he would be pleased.
Judge Norman C. Robison, Senior District Court Judge, introduced himself. He said that the way he read the bill, all judges that retired after the effective date of the bill probably would not go back into the system. The bill said the Chief Justice could declare an emergency just once for 30 days and that was all. He said he just finished three months in Ely. If his PERS retirement had been suspended he could not have taken the assignment. He said “it would not fit here and it would be a nightmare as far as handling it administratively.” Another good example, according to Judge Robison, occurred the day before the hearing. He received a call from Reno asking him to serve for a four-day jury trial. Judge Recanzone was also a retired Senior Judge and fortunately was able to take the assignment because of a conflict he had. Judge Robison said he could not see how the bill was going to work as currently written. He said that if the bill was not changed there would not be anyone participating in it.
Mr. Mark Stevens of the Legislative Counsel Bureau explained that the subcommittee wanted to mirror the language that was going to be forthcoming from the PERS on reemployment issues in A.B. 74 of the Seventieth Session of the Legislature. The intent of the subcommittee also was to match the PERS language as much as possible. The bill was written to match existing PERS statutes and during the session to amend the bill and add language that was going to be forthcoming from the PERS board concerning reemployment contained in A.B. 555. The bill drafters had to follow the intent of the subcommittee, which was to match up language in the PERS bill as much as possible. At that time, they did not have the recommendations from the PERS board on reemployment but they knew it would be an issue and the intent was to amend the bill and add the language once it became available.
Mr. Hettrick said that early in the legislative session, he and Mr. Pyne appeared at a function where Mr. Pyne was speaking about the fact that the PERS had developed the language allowing people to go back into the system. Mr. Hettrick said he listened to the presentation with a great deal of interest because he knew it was going to be incorporated into A.B. 232. Mr. Hettrick said he agreed with the language as it was written and believed it allowed for people to go back into the system with some reasonable rules. He said that was the intent all along but they did not know what the language would be at the time. They went along with the PERS because the system was being set up in the PERS and they used the existing language at the time.
Judge Porter asked “Is that a yes?” Vice Chairwoman Giunchigliani answered “Yes, it will be fixed.”
Judge Robison said that S.B. 181 was a bill that basically adopted two of the options in Option 2 and also the accrual of benefits that were adopted by the interim committee. It also provided for the senior judges in the PERS to get the same increases that the judges were currently getting in the Judicial Plan. Understanding that A.B. 232 would not become effective until 2003, he suggested that the language in S.B. 181 might be used as a stop gap measure to handle the situation.
Vice Chairwoman Giunchigliani said the committee would take a look at the transitory language in S.B. 181.
Judge Robison added that it would provide a two-year window that would give the judges that were currently in the Judicial Plan Option 2, which did not cost anything and it would actually make things more equal.
Judge Porter said he had two other small areas of concern. Section 54 of the bill contained the first reference in the bill to the words “accredited contributing service.” He did not know what that meant. His last concern was on Section 61, subsection 3, that seemed to indicate benefits could be changed retroactively. He used himself as an example and said that if he was in the system ten years from now, the committee members might not be there. He said he needed to know if the plan would be a fluctuating mechanism. There needed to be some finality.
Mr. Hettrick said that should be verified but he noted that the bill said “but no change may impair any vested allowance or benefit.” He said the intent was clearly just to allow for accounting changes if needed without impairing a vested allowance or benefit. Mr. Hettrick said it was probably nothing but it should be verified and he appreciated that Judge Porter pointed it out.
Vice Chairwoman Giunchigliani commented that it was a complicated piece of legislation and she was pleased that everyone was in agreement that an actuarially valid plan needed to be established. She said how to fund the plan would be the dilemma of the committee.
Judge Porter reiterated his compliments to Mr. Hettrick. He said he had served on interim studies many times and the issues were not very glamorous and did not get a lot of attention. Mr. Hettrick put hard work into the issue and he, the members of the subcommittee, and Mark Stevens were to be complimented.
Mr. Hettrick added that staff and Mr. Pyne did a tremendous amount of work on the plan. They came back time and time again with numbers for the subcommittee to evaluate how the plan would work and what the effect would be. It was a complicated subject that was not easy to understand.
Mr. William Maupin, Chief Justice of the Nevada Supreme Court, introduced himself. He added his congratulations and appreciation for the hard work that was done on the interim subcommittee. Knowing the work it had taken to draft simple rules for the operation of the court system had been a Herculean task, especially to draft the bill within the time frame allotted. Chief Justice Maupin had one concern on the bill and that was that he believed there was some ambiguity in the original draft of the bill as to when the service credit would start accruing. It was suggested in one of the drafts that service credit would actually start accruing from the date of the election rather than the date the judge took office. Some of the language regarding date of election was simply a reference point to when the person became eligible. If there was an ambiguity in the language regarding service credit he thought it was a drafting issue that should be addressed.
Mr. Stevens said he believed the intent was that if a judge in the PERS transferred over to the new Judicial Retirement System, they transferred the service credit they had earned in the PERS with them. The enhanced service credit of 4.166 percent per year would be earned from the date of the transfer into the Judicial Retirement System. The enhanced service credit would not be retroactive to the PERS service. Only when a judge moved into the Judicial Retirement System would the service credit begin at the enhanced rate.
Chief Justice Maupin said that regardless of how the bill was drafted in that regard, the judges would start accruing service credit under the new plan from the date they took office.
Chief Justice Maupin said he had one other point that he wanted to make in support of the bill and the concept. It would right an inequity with regard to several PERS judges now sitting. One of the examples was Judge Lee Gates from the Eighth Judicial District Court who took office in 1991. He had prior PERS service and he was faced with the decision to elect either the Judges’ Plan or the PERS. At the time that he took office the vesting period under the Judicial Plan was ten years. The Sixty-Seventh Session of the Legislature amended the vesting period under the Judicial Plan from ten to five years. Chief Justice Maupin said that he was sure that today if Judge Gates had the option to make that election he would have gone into the Judicial Plan instead of the PERS. He was not alone; there were a number of judges in that position and A.B. 232 would allow existing PERS judges to make the election into the new plan and would right the inequity.
There being no additional testimony on A.B. 232, Vice Chairwoman Giunchigliani closed the hearing on A.B. 232.
Chairman Arberry opened the hearing on A.B. 303.
Assembly Bill 303: Makes appropriations for support of Southern and Northern Nevada Writing Projects and for support of nonprofit service agencies in Clark County that offer homeless prevention assistance. (BDR S-1022)
Assemblywoman Chowning, Assembly District 28, introduced herself and said that A.B. 303 was two bills in one. Because of the deadlines and trying to make the most efficient use of the legislative process, she put two issues in one bill. Both issues would require appropriations. Mrs. Chowning said that the committee was very aware of the tough budgetary times being experienced but she still proudly brought the requests to the committee and provided Exhibit E.
The first portion was an appropriation requesting $200,000 for the southern Nevada Writing Project and the northern Nevada Writing Project. Mrs. Chowning said she was one of two legislators that sat on the Academic Standards Council and as such she had worked very hard along with other colleagues, business interests, parents, representatives, etc., in developing the standards for education. She had worked on the English Language Arts Writing Team for the standards. A very important component of education was training for teachers. It was always extremely important but it was even more critical now because of the raising of the bar in the standards. The Nevada Writing Project was put in place by S.B. 89 of the Sixty-Fifth Session of the Legislature. It had been in effect ever since but the funding had never been increased. It was funded at $100,000 and it had never risen over that amount. The legislature in the Seventieth Session appropriated extra funds out of the Assembly Committee on Ways and Means and she looked forward to the committee supporting the program again.
Mrs. Chowning said that years ago one of her daughters, Christianne Chowning, was one of the recipients of some of the training offered by the Nevada Writing Project. Her interest in writing was sparked in 7th grade and was developed further because of the training. She went on to become an editor of the high school newspaper and Mrs. Chowning believed that some day she would become a screenwriter. She loved writing and Mrs. Chowning believed writing was an important part of a student’s success.
Mrs. Chowning said the second part of A.B. 303 would appropriate $200,000 for the Clark County Department of Finance for the Human Resources Management Division for homeless prevention. It was extremely difficult to make ends meet and the good work of the Clark County Human Resources Division was a miraculous godsend that kept people from becoming homeless. They assisted by helping people pay their rent, make deposits, or pay utility bills so they were able to stay in their residences.
Ms. Joan Taylor, Writing Assessment Consultant for the Nevada Department of Education, introduced herself. She was a university instructor and also director of the Nevada State Network Writing Project. Nevada was fortunate enough to have 3 of 167 sites that were national writing project sites that were directed by classroom teachers and co-directed by university professors. Last session, the legislature appropriated $200,000 and they had been able to leverage the money with federal money. They received $175,000 in federal funds. She went on to say they had two sites, one in northern Nevada and one in southern Nevada, that worked very closely together.
Ms. Rosemary Holmes-Gull, Director of the southern Nevada Writing Project, introduced herself. She said she was pleased to appear before the committee to share some of the successes the project had had with the additional funds that had been granted through the Seventieth Session of the Legislature. They had managed to double the activities they offered in terms of professional development for teachers in southern Nevada. They had also tripled the number of contact hours that the teacher-consultants had been able to offer to teachers in the district. Ms. Homes-Gull said she was very pleased with the increase they were able to show. She said the most important thing the project had been able to accomplish was standards-based professional development for teachers. They had the workshops that were offered to teachers primarily for teaching writing in the elementary classroom, and how to teach writing traits so students could improve their writing. They were also focusing on students for whom English was not the first language and had developed a workshop specifically for teachers to develop strategies for those students. Another workshop the project had developed was for assessing and scoring writing so that teachers could really look carefully at the students’ writing and assess it in order to help those students improve and show them how to improve their writing. Ms. Holmes-Gull said the project was very pleased with the quality of the standards-based workshops that were being provided to the teachers in southern Nevada. She said they wanted to continue to support teachers in schools needing improvement. They were particularly concerned about the support those teachers needed in terms of professional development and the support of a network. Ms. Holmes-Gull said she hoped they could build teacher leadership and help them in special needs areas. She said the project tried to look at the needs in southern Nevada and address those. She believed that they had made significant progress since the time they had received additional money from the legislature.
Ms. Marilyn McKinney, Professor of Literacy Education at the University of Nevada, Las Vegas (UNLV), introduced herself and said she was co-director of the southern Nevada Writing Project. She spoke of the importance of the funding for continued collaboration between the University System and school districts. The funding had allowed them to connect research and practice in the classrooms of Nevada. She felt they had been able to make a difference in the teaching of writing that affected Nevada students, made a difference in the implementation of the Nevada state standards, and focused to a high extent on quality teaching. A recent example of the collaboration occurred the weekend before when the southern Nevada Writing Project was selected by the National Writing Project to host the urban sites conference. There were teachers from across the nation on the UNLV campus sharing, discussing, and problem-solving issues related to the teaching of writing in urban schools. That collaboration between the university and the schools had allowed the project to spotlight Las Vegas teachers and schools to the teachers in the nation. She thanked the committee for past funding and urged support of the bill for continued funding.
Ms. Kay E. Henjum, Director of the northern Nevada Writing Project, introduced herself. She said she was also a teacher at Jessie Beck Elementary School in Reno, Nevada. She introduced her son Dana, who was a second grader. They had both been involved with the writing project in many ways. Dana, as the child of a writing project participant, had been involved in writing project summer camps. Ms. Henjum said that Dana would share a project he had done in a Family Writing Night. One of the things the writing project offered to schools was a chance for parents to go with their children to an evening session to write a book together. Ms. Henjum said she and Dana had attended a session offered at Jessie Beck and they wrote a story together that Dana shared with the committee.
Dana Henjum read the book entitled “On the Houseboat” written by Kay and Dana Henjum.
Ms. Henjum pointed out that there were many programs for teachers and that was the main emphasis of the northern Nevada Writing Project and the National Writing Project also. She said the work they did with students was very exciting for them. They offered 15 different writing camps for students in northern Nevada last summer and 13 were planned for the summer of 2001. They had offered 9 family writing nights at various schools and part of what was exciting about the programs was that they had received responses from high school teachers saying students had reported they became writers because of the experiences they had going through a writing camp. She said that Dana’s teacher was a writing project consultant and the principal at Jessie Beck School was a writing project consultant.
Ms. Henjum shared the writing guides the northern Nevada Writing Project teachers had put together. They had an elementary writing guide as well as a secondary writing guide. They had asked teachers to share some results of the vast activities from writing practice done in their classrooms. The guides had been bound, tied to the state standards, and they were being shared with teachers across the state. People were very excited about the guides; they were not additional curriculum, they were “cookbooks” of activities that teachers could do with their students.
Ms. Taylor added that one of the important things the writing projects did was build leadership. When the regional professional development programs began, the Northeastern Regional Professional Development Program and the Northwestern Program built the backbone of their leadership on writing project consultants. It built leadership, increased writing skills, and federal money was leveraged. Ms. Taylor believed that $200,000 was a small amount of money but it was crucial to the work that was being done. She asked that the committee make an appropriation to continue the work.
Ms. Taylor introduced Michelle Lassaline, a student from Seeliger Elementary School in Carson City, Nevada. Her teacher was a writing project teacher and she read to the committee a short poem entitled “I Write.”
Mr. Gustavo Ramos, Deputy Executive Director of the Housing Authority, spoke regarding the funding for the homeless prevention assistance. He said he was also Chairman of the Southern Nevada Homeless Coalition, which was a 79‑member agency comprised of some public and some private organizations. The Coalition provided services to the homeless and at-risk of becoming homeless population in southern Nevada. The Housing Authority had approximately 4,400 families that were assisted with public housing assistance and many on the waiting list waiting to be assisted. Mr. Ramos said he had worked in the field of public housing for 25 years and many times during those years he had witnessed circumstances where families or individuals found themselves on the threshold of homelessness but with the assistance such as the bill proposed the homeless situation had been averted.
Mr. Ramos said he had also seen incidents where victims of unforeseen circumstances were pushed into the threshold of homelessness due to the lack of minor assistance. He said it was minor when one thought of the monetary value of the assistance but certainly not minor because of the tremendous benefit that came with helping someone avert the homeless condition. It was, in most cases, much more costly to extricate families from homeless situations than it was to assist them in avoiding it. The ever increasing population of Clark County, the increased demand for housing that was pushing housing costs up, and the historical increase in utility rates all had an adverse effect on everyone but much more so on the low-income families of the community.
Mr. Ramos said the funding requested in the bill would provide short-term subsidies to defray rent and utility arrearages for individuals and families that had received eviction notices or utility termination notices. It would also help provide security deposits or first month’s rent to permit homeless families to move into permanent, affordable housing. It was a responsible way to use the funds and the $200,000 would be distributed responsibly by experienced nonprofit agencies. The distribution of the funds came with responsibilities for the recipients of the assistance. The following conditions would have to be met before assistance would be provided: inability of the family to make the required payments due to a sudden reduction in income or unexpected yet necessary increase in expenditures, or the assistance was necessary to avoid the eviction or termination of services and there was a reasonable expectation that the family would be able to resume payments within a reasonable period of time. The family or individual would be tracked to ensure that they did not receive rental or utility assistance more than once in a 13-month period.
Mr. Ramos envisioned the funds used in conjunction with county and city emergency shelter grant funds, which would provide the flexibility to help the very low-income households in this time of increasing rents and high utility costs. On behalf of the 450 to 500 low-income households that could be assisted with the funds, Mr. Ramos asked the committee to pass A.B. 303.
Mrs. Chowning thanked the committee and urged them to look seriously and thoughtfully at A.B. 303, which was a chance to help teachers and students become bright stars, and also to help families so they could maintain their place in their community rather than becoming homeless.
Ms. Shawna Parker, a member of the Southern Nevada Homeless Coalition, explained to the committee how she envisioned the $200,000 appropriation for homeless prevention working and how the coalition worked. In southern Nevada the emergency shelter system had been vastly improved over the last ten years. There were many families and individuals that fell into homelessness that did not need to be there. She said she was impressed to see the statistics from emergency shelters showing that up to 15 percent of residents in emergency shelters after 30 days returned back into permanent housing that they could afford. That indicated that it was just a temporary financial difficulty that landed them in an emergency shelter.
There were other prevention activities going on and they worked. The Economic Opportunity Board was one of the recipients of emergency shelter grant funds and county funds to provide homeless prevention activities. They had experienced a 93 percent stability rate of the families after three months of assistance. That meant that if a family had gotten one month of assistance, three months later they were contacted and they were still in the same house or apartment and stable again because of the one-time assistance of up to $600 they needed in order to remain stable and stay out of the shelters.
Ms. Parker said that Catholic Charities also provided a prevention activity and they followed up 12 months after assistance and 70 percent of their families were still in the same apartment unit 12 months later and stable. The other 30 percent might have been evicted, might have moved into other more permanent affordable housing, or moved into a nicer, more expensive place. Ms. Parker said the point was that prevention worked and as Mr. Ramos pointed out, it was more cost-effective to prevent a family or individual from homelessness than it was to put them into affordable housing from the emergency shelters. She urged the passage of A.B. 303 for the homeless prevention activities.
There being no further testimony on A.B. 303, Chairman Arberry closed the hearing on A.B. 303 and opened the hearing on A.B. 311.
Assembly Bill 311: Revises provisions governing educational personnel. (BDR 34-1084)
Assemblywoman Chris Giunchigliani, Assembly District 9, introduced herself. She said she had introduced A.B. 311 to try to deal with teacher shortages. The bill was a realistic approach to funding and might work to attract and keep teachers. She said she had talked to fellow teachers and some of their ideas were included in the bill.
Ms. Giunchigliani said that Section 1 of the bill dealt with the fact that the districts did not recognize a teacher’s experience. If someone was hired from another state with teaching experience, research showed that approximately five years’ experience was what was accepted. Recognizing that as a cost impact, it still was a deterrent to attracting teachers because they would be “stuck” on a fifth place salary schedule, which was not very high, and they might have 15 or 20 years of teaching experience. She said she did not know of any other profession that did not reward nor recognize experience.
Ms. Giunchigliani went on to say that Section 2 was an expansion of what the committee had done last session. For schools that were deemed in need of improvement the purchase of a one-fifth year of service credit was proposed. It was not much of an incentive so A.B. 311 changed the proposal to a one-fourth year of service credit. She pointed out that there had been only 6 schools qualify in the current year, it was declining, and there had never been more than 15 schools statewide that had been deemed in need of improvement. She said that it was time to review the fact that money had been wasted on a small number of schools assuming that everyone was incompetent or the students were not performing. The students, faculty, support personnel, and administrators were doing a very good job. Section 2 also included an incentive to recognize teachers who chose to stay at a campus that was an at-risk campus. On many of the at-risk campuses there was a new employee population rather than the more experienced teachers. Those schools tended to have a greater need for more experienced teachers. She recommended that an additional one-half-year service credit be granted for teachers that stayed on those campuses.
Ms. Giunchigliani described Section 3 of the bill as an attempt to look at the fact that since 1969, when the first collective bargaining act was put into place, 15 days of sick leave were allocated and that had never been changed. She said that sometimes teachers needed a day off when they were not actually physically ill but might be mentally run-down. That section added two mental health days to their leave.
Ms. Giunchigliani went on to describe Section 5 as the “meat” of the legislation. That section would establish a loan fund for teachers to attend the University System to pursue courses of study and training for the education of teachers. She believed it was time to establish such a fund because of the teacher shortage. Ms. Giunchigliani said the section was modeled after what was done for the nursing and doctor shortages in rural counties. She advised the committee that the funding would come from the tobacco settlement money and she believed that was an appropriate use for the money. She also said she would be happy to explore using the estate tax if the committee was more interested in that. Ms. Giunchigliani said Nevada should be educating its own teachers and promoting a recruitment program from high school to college to enter into the teaching profession. Part of that program would include forgiveness of the loan. If a teacher taught for five years any place in the state, the loan would be commensurately reduced until it was gone. If a teacher taught in an at-risk, needy population school it would be eliminated within a three-year period. Ms. Giunchigliani said she modeled the language after the old National Direct Student Loan Program, of which she was a beneficiary. It did not pay her entire college expenses but it was a good incentive and since she taught for a certain number of years in an at-risk population the federal loan was reduced.
Ms. Giunchigliani said that she had conducted a survey of the counties to determine where there were shortages. Examples of the shortages were: Carson City for special education and counselors; Churchill County for special education, occupational education, psychologists, speech therapists; and Clark County for math, physical science, bilingual education, and special education. In Esmeralda County it was difficult to replace teachers in any area because of their isolation. Ms. Giunchigliani said that Section 14 would establish a fund that would allow for the reimbursement of costs incurred by teachers to obtain endorsements in certain fields of specialization. That would affect currently employed teachers.
Ms. Giunchigliani presented Exhibit F that was her suggested amendments to A.B. 311. She offered the amendments because of the fiscal impact on the districts and because she did not want to propose unfunded mandates. She wished the legislature could do a better job of building into the roll-up costs what actual costs were. Ms. Giunchigliani said she would agree to delete Sections 1 and 3. They dealt with giving full credit for experience and adding an extra two days of sick leave. She suggested amending Section 14, line 26, deleting “state general fund” and inserting “estate tax” in its place. She said there had been a small windfall in the estate tax money in the current year and if those funds were used for the bill there would be no General Fund impact.
Mrs. Chowning complimented Ms. Giunchigliani for bringing the bill to the committee. She said she was a former high school and middle school teacher in Nevada and California. She said California was doing an absolutely superb job in granting incentives to teachers to stay in the teaching profession in both at‑risk schools and others by providing similar incentives to what was provided in A.B. 311. She said it was extremely important to keep the teachers in both at-risk and other schools. Mrs. Chowning said that in the interim she had gone to a conference sponsored by the Milken Foundation, which was also trying to award grants and encourage states to provide funding to encourage teachers to stay in the teaching profession and not have to go into administration. Unfortunately, about the only way that teachers could get a raise was to go into administration and that took the good teachers out of the classroom. She thanked the teachers that continued to stay in the classroom and said we owed much to them. Mrs. Chowning felt that the bill would accomplish many of the goals of the Milken Foundation and others who encouraged teachers to stay in the classroom.
Ms. Giunchigliani said she appreciated Mrs. Chowning’s kind words. She said the bill came from talking with colleagues. She noted for the record that she was a special education middle school teacher. She said the bill was an attempt at a long-term incentive and solution rather than just dealing with the issue of salary. Recruitment and salary would still be issues, according to Ms. Giunchigliani. A $1,000 bonus for teachers would not fix the problem. The bill was designed to attract and retain teachers separately from the issue of salary increases. She believed salary increases should be dealt with by the legislature probably by a tax increase.
Ms. Debbie Cahill, representing the Nevada State Education Association, said the NSEA supported A.B. 311 and in particular, Section 2, that dealt with the purchase of service credit for retirement. She had attempted to amend the bill that came from the Senate to include at-risk schools in the last session and that amendment did not get on that bill. She believed that was an area that needed to be addressed and for that reason she supported the bill.
Ms. Giunchigliani submitted Exhibit G that was correspondence she had received.
Ms. Martha Tittle, representing the Clark County School District, said the district supported the concepts of recruitment and retention that were in A.B. 311 and appreciated Ms. Giunchigliani’s efforts to address attracting and retaining teachers. She said they appreciated Ms. Giunchigliani’s efforts to address the fiscal concerns that she had. The only area of the bill she still questioned was the cost associated with the idea of increased PERS for teachers in at-risk schools. It would be a cost for the district and Clark County had approximately 49 schools that had 65 percent of the pupils at-risk. Changing that from what was presently done with the schools identified as “in need of improvement” to schools with “pupils at-risk” would increase the number of teachers that qualified. She asked for the committee’s consideration of that part of the bill.
There being no further testimony on A.B. 311, Chairman Arberry closed the hearing on A.B. 311 and opened the hearing on A.B. 313.
Assembly Bill 313: Creates conclusive presumption that hepatitis is occupational disease for certain employees. (BDR 53-843)
Mr. John Oceguera, Assembly District 16, explained that there were four highlights to the bill. It provided for a preventive treatment for hepatitis administered as a precaution to full-time, salaried firefighters and emergency medical attendants employed in the state of Nevada. In addition, the bill provided that if an employee contracted hepatitis A, B, or C and any disease associated with hepatitis, the disease would be conclusively presumed to have arisen out of and in the course of his employment if the employee had been continually employed for five years or more as a full-time, salaried firefighter or emergency medical attendant in the state. The employee must be awarded full medical coverage and an indemnity wage replacement benefit as provided for under the Industrial Insurance Act. The bill also required the employees to submit to a blood test to screen for hepatitis upon employment, upon the commencement of coverage, and thereafter on an annual basis during employment. The required blood test would be paid for by the employer. A.B. 313 provided that a firefighter or emergency medical attendant who was determined to be partially disabled from disease and not capable of performing his job may elect to receive benefits for a permanent, total disability.
Chairman Arberry asked if there was anyone present who could discuss the fiscal note on the bill.
Mr. Rusty McAllister, representing the Professional Firefighters of Nevada, introduced himself. Mr. McAllister reported that he had received a copy of the updated fiscal note the afternoon before the hearing and he had had only a minimal chance to review it. He said the costs had been increased on the fiscal note after the addition of an amendment by the Committee on Commerce and Labor that added volunteer firefighters to those covered by the bill. Mr. McAllister said that the medical screening test costs initially were estimated at $4,500 for salaried firefighters. Once the volunteers were added it raised the cost. Also, the initial $4,500 estimate was for a hepatitis C test only whereas the bill called for a complete hepatitis panel. Using the numbers that were estimated of 700 people being tested for a cost of $94,500, that came out to $135 per person for a hepatitis panel. In discussions with Mr. Fred Hillerby, the representative for Associated Pathologists Laboratories, the price for each test was set at $55. The price estimated on the fiscal note was more than double what had been provided by the largest testing firm in the state. Mr. McAllister said he was unsure how the fiscal note had been estimated.
Mr. McAllister went on to discuss the costs for the hepatitis C claims. He said that the state’s Risk Management Division had made a couple of suggestions for amendments. The first suggestion was that volunteer firemen have a rebuttable presumption in lieu of a conclusive presumption. He said it would be the will of the legislature to decide whether or not that was what they wanted to do with the bill. Mr. McAllister said that he did not represent the volunteer firefighters so he was unable to speak for them about whether that was an acceptable amendment to them. The second suggestion pertained to Section 5 on presumptive assumption. It would apply to current employees with five years or more of service who tested positive for hepatitis at the baseline screening in October 2001. In the bill there was a one-month period that allowed for testing. Anyone tested during that period that had hepatitis C would be conclusively presumed to have contracted the disease on the job prior to the testing. That was included in the bill because it was known that there were some firefighters now with hepatitis C. They did not know where they were exposed. As short a time as ten years ago there were no safety precautions provided for firefighters. There were no gloves, masks, glasses, goggles, and no reporting system. When the Ryan White Law for contagious disease was passed approximately ten years ago for contagious disease exposures, hepatitis was not included in the reportable diseases because there was not enough information about it at that time. It was very possible that the firefighters who had hepatitis now got it on the job but there was no way to track back to the exact exposure. The provision was meant to cover those people who were exposed on the job who did get the disease; hopefully they could receive treatment. Mr. McAllister said again that he had not had time to discuss the costs with Risk Management and he was unsure what type of testing was included or how the costs had been determined.
Mr. McAllister said that the fiscal note was extremely high and he hoped it could be pared down after discussions with Risk Management and the bill moved forward.
Mr. Goldwater pointed out that the costs of the bill were an insurance premium payment. It was a payment for what the state should have been covering in the first place and it was unfortunate the bill was needed. He said that, generally speaking, he saw this cost differently than an appropriation. Mr. Goldwater said that it was common to reserve for certain types of disease and he was unsure whether the funding mechanisms had been looked at and whether it was necessary to make a state appropriation or take funding from reserves.
Mr. Dini wondered if the fiscal impact to the local governments had been calculated. He said he had received letters from the counties that he represented in opposition to the bill because of the local impact. He said he had received correspondence from Lyon County, the city of Yerington, and Carson City, saying there was a fiscal impact they had not anticipated.
Mr. Oceguera said that most of the entities Mr. Dini had mentioned utilized volunteer firefighters and the entities were getting the service provided free of charge. He said he did not think that the benefits provided in the bill were much to ask of a local government.
Mr. Dini said he was 100 percent in support of leaving the volunteers in the bill because he had served 13 years as a volunteer fireman, drove the ambulance, and knew what the exposures were. He had not seen the Volunteer Association come forward in support of the bill or offering input and he wondered what their position was. He reiterated that the local governments all expressed opposition to the bill and he hoped that the problems could be worked out with amendments.
Mr. Oceguera said he believed there might be some misinformation circulating. He said he had probably received the same letters that Mr. Dini received and they included a resolution. He distributed Exhibit H to the committee that was a legal opinion from the Legislative Counsel Bureau concerning the bill. He said he believed some of the letter writers might have been uninformed.
Mr. Perkins said his concern regarding the fiscal note for both the state and local governments was that it was primarily for the testing procedure. If a government did not institute a testing procedure, he believed they would find themselves spending more money on litigation trying to determine whether the illness occurred on the job. The bill provided a protection for local and state government as well as for the employee. If a firefighter contracted hepatitis on the job, the entity would be liable for it in a workers’ compensation case anyway. Mr. Perkins said he was missing the logic behind opposing a bill such as this when the bill protected the local government, state government, and the employee.
Ms. Giunchigliani said that when the amendments were drafted, that was exactly what had been done. It was a protection to the local governments and she appreciated that Exhibit H confirmed that there was no violation of the Due Process Clause of the Fourteenth Amendment. She suggested that a representative from the Risk Management Division explain the fiscal note.
Ms. Susan Dunt, Risk Manager for the state of Nevada, introduced Jim Fry, a workers’ compensation analyst with the division. Ms. Dunt said the $135 per hepatitis screen was based on the current contract cost that the division had for occupational health contracts throughout the state. She said the division contracted on behalf of state agencies for a variety of occupational health services including the Police/Fire heart lung physical exams and other federally regulated medical screenings that were provided to employees. That was the current rate that was provided by the current contractors for a full hepatitis screen. Ms. Dunt said she was willing to “shop” to see if a lower rate was available.
Ms. Giunchigliani asked Ms. Dunt who the state contracted with for the screenings.
Ms. Dunt answered that in northern Nevada and the rural areas the state contracted with Nevada Occupational Health Centers and in southern Nevada they were contracted through Dr. Keith Boman, who did the heart and lung physicals, and had also agreed to provide the services for the hepatitis screening.
Ms. Giunchigliani asked what the cost would be for the hepatitis screening.
Ms. Dunt said the cost would be $135 for the complete panel.
Ms. Giunchigliani said that she remembered from testimony given in a Commerce Committee meeting that the cost would be $55 for the complete panel. She urged Ms. Dunt to go back and renegotiate the cost if that information was correct.
Ms. Dunt said the division could shop for lower costs, however, part of the additional fees were related to the administration of the tests. She went on to say that if the cost could be reduced to $55 per test the cost in 2002 would be reduced to approximately $38,500.
Mr. Goldwater asked for the name of the actuary used by the Risk Management Division.
Ms. Dunt answered that the actuary was provided by the broker, Willis of Seattle.
Mr. Goldwater said that from a financial and actuarial standpoint, because the state covered firefighters and could have some exposure to occupational diseases, it would have to reserve for those costs. There could be legal fees or costs for the actual illness. He guessed that screening and conclusive presumption would affect those reserves but in the short term should not create such a large fiscal note that it would inhibit the bill. Mr. Goldwater asked if there was any way to talk to the actuary about the reserves and the fact that the screenings would actually provide the information to calculate more accurate projections of the future needs.
Ms. Dunt said that she could request a formal actuarial analysis of the exposure associated with the bill. The difficulty was that oftentimes the actuarial information was based on past loss history and at the current point in time there was only one accepted hepatitis C claim. She said the difficulty for the actuarial projection went along with the concept of the conclusive presumption. Ms. Dunt said she would want to reserve for the exposure.
Mr. Goldwater reiterated that the actuarial projections would be more accurate if the screenings were done. The state’s burden would be increased with a conclusive presumption and screening but it would know within a standard deviation of 1 to 2 percent what the claims would be in the future. He believed that was an intelligent course to follow.
Ms. Dunt stated that an actuarial study could be requested or reserves could be used to pay for the screening provided it was approved by the Interim Finance Committee.
Mr. Wayne Carlson, Executive Director of the Public Agency Compensation Trust, introduced himself and said the trust was an association of self-insured public employers covering rural Nevada entities. He said he testified previously on the fiscal impact and that it was a moving target because there were inclusions and exclusions of persons. Mr. Carlson said that before he discussed the fiscal impact, he wanted to contrast the public policy approaches that had been taken on hepatitis issues. A.B. 279 attempted to look at the occupational relationship of the exposure and tried to clarify and define who should be covered for an occupational related exposure. The result of that bill, as amended, balanced the public policy interests in that there was a test within 72 hours of an exposure that would make the determination as to whether or not the disease arose from the occupation or from a non-occupational source. Within 12 months another test would be taken and that would confirm the findings of the first test. If the first test was negative and the second test was positive then under the provisions of the bill the disease would be determined to have arisen out of that occupational exposure. There could be an intervening cause but it was not as likely when someone did not have the disease at the initial exposure and then it developed. It was not likely that it had developed from an intervening cause although that was possible. That was the balance of public policy that A.B. 279 was attempting to achieve. It had no conclusive presumption provision and it avoided most of the non-occupational exposures.
Mr. Carlson said the trust, which was made up of local government officials, passed a resolution and the members had sent their own resolutions to the legislature regarding their concerns over the conclusive presumption and the shift of the non-occupational disease to the occupational setting. The basis for that discussion was the health insurance industry covered non-occupational disease and workers’ compensation covered occupational disease. The conclusive presumption merged those two things together. In effect, the conclusive presumption shifted the health insurers’ obligations over to the workers’ compensation provider. Mr. Carlson said the trust had not been collecting a premium for that exposure; the health insurers had. He said the trust did not have the right, nor did he think the legislature had the ability, to force a health insurer to transfer the money it had collected for the disease over the last 30 years or so to the workers’ compensation providers.
A.B. 313 changed the system to a conclusive presumption and the conclusive nature of that said it did not matter whether it arose out of occupational or non‑occupational sources. From the national information and studies that he had seen the non-occupational sources were far more frequent because of hepatitis C than the occupational ones. Mr. Carlson felt that a burden was being shifted to them for diseases for which workers’ compensation was not designed.
Mr. Carlson said the trust covered mostly volunteers with 66 paid firefighters and approximately 830 volunteers. He said the incident rate was approximately 2 percent and that would mean that the trust would have 18 cases or a dollar figure of $4.5 million of exposure today. Under the bill as it was written there could be volunteers with five years or more of service that were there in the past. They could come forward and claim benefits under the bill and that was an unknown number. Mr. Carlson said a similar thing happened to the trust on the heart lung exposure when the courts interpreted that the conclusive presumption applied even to former employees who met the criteria sometime during their employment. They could be retired or left employment after five years and gone off to other occupations and then come back and file a heart claim. He said the trust had a couple of those claims pending. Mr. Carlson stated that it was difficult to know how many claims there would be and how to fund. Mr. Carlson reported that the trust used an actuary and he could not predict what number to use to determine what amount of premium should be collected. He said the trust was collecting for the occupational related risks that were known to exist. Those were occupational exposures that were clearly determined by the courts or by the claims process to have arisen out of work. A.B. 279 attempted to add clarity to the coverage for the employee and the employer by saying that a test would be performed immediately after the exposure so there would not be arguments about where the disease came from. Mr. Carlson maintained that that would be a good public policy approach because it did not merge the health insurance system into the workers’ compensation system.
Mr. Carlson said that the trust had significant problems with the financial impact even at that level and how soon the $4.5 million would have to be funded was unknown. It was not known if the incidence rate in Nevada would be similar to the 2 percent national rate or higher. If the $4.5 million exposure came in ten years, the trust would need to add one-tenth of that amount in each year. As new volunteer employees became eligible, he would have to add for them. The trust’s total program costs collected for the claims account was approximately $5. Mr. Carlson said he had just received actuarial reports and the rates would now have to be increased approximately 16 percent based on medical inflation and other factors. With a conclusive presumption, an additional 10 percent cost would have to be added. Mr. Carlson said the trust could support A.B. 279 because it stayed within the occupational system. They did not support A.B. 313 because it went beyond that to the non-occupational side.
Mr. Goldwater told Mr. Carlson they had disagreed on the issue for a long time and since Mr. Carlson’s basis for disagreement was a financial one, he asked if Mr. Carlson felt that because there was ambiguity regarding when and where hepatitis was contracted that the employer had any responsibility to provide workers’ compensation benefits and health coverage if it could not be determined where and when the disease was contracted. Mr. Goldwater said that firefighters had testified that they could not necessarily say which body that was rescued from a car accident gave them hepatitis or when it was contracted because of the gestation period of the virus.
Mr. Carlson answered Mr. Goldwater by saying that it was not his judgment to make. Mr. Goldwater asked for Mr. Carlson’s opinion on the subject. Mr. Carlson said that his opinion was that we had an occupational system and a health system that had been two separate systems for many years. The bill would merge the systems and that was a significant public policy debate.
Mr. Goldwater agreed it was a significant public policy debate and from Mr. Carlson’s perspective the legislature was trying to shift the burden to the health insurance side and from the health insurance perspective it was being shifted to the workers’ compensation side. He described it as “six of one and half-dozen of another.” There was a burden on both systems and different benefits offered by both. It depended upon your perspective. Mr. Goldwater opined that the moral obligation, the statutory obligation, and the legal obligation that we had to police, firefighters, and all municipal employees was that employees would be cared for if they became ill in the line of duty. Because of the unique nature of hepatitis and some other infectious diseases, it was necessary to say by law that a conclusive presumption existed. Mr. Goldwater believed there was no moral way to avoid the liability if we wanted people to serve as firefighters or policemen. If employees were led to believe that they were on their own or their union health fund was on its own and the state would fight it every step of the way, it was not the moral thing to do. He pointed out that funds had been reserved and the exposure existed. He said there should be screening performed, a conclusive presumption made, use the current reserves to screen and then start collecting and reserving accordingly. In his opinion that was the correct public policy.
Mr. Carlson said he disagreed with Mr. Goldwater on the appropriate public policy choice and he believed Ms. Leslie’s bill, A.B. 279, addressed the occupational side with some clarity. A.B. 313 did not differentiate where the disease came from or if it arose from a lifestyle or other causes that were predominantly the cause of hepatitis C. He said the predominant cause of the disease was non-occupational and the bill made a public policy decision that would place the liability into the occupational setting. He reiterated that he disagreed and said the health care setting was designed for non-occupational diseases. It was a benefit that an employee could choose to purchase and pay for. The workers’ compensation setting was a legal environment that tied to the employment relationship. As long as it tied to the employment relationship, there needed to be an employment connection to the disease that arose during the course of employment. Mr. Carlson said he was not arguing that if there was an employment connection there would be workers’ compensation coverage. He said A.B. 279 attempted to eliminate the confusion as to whether the disease was covered as an occupational disease when there was a documented exposure during the occupational incident. That was the distinction between the bills.
Mr. Goldwater said he had witnessed through workers’ compensation that it was not as clear as Mr. Carlson stated. His experience with workers’ compensation attorneys and self-insured municipal companies was that they fought firefighters when they made a claim for coverage. He said that convinced him that a conclusive presumption was needed. There was a conclusive presumption for heart and lung claims and still those claims were contested.
Mr. Carlson said the legislature would need to provide the tax resources for the payment of the claims because there would be additional unknown costs to the local governments he represented. The members of his trust were assessable and if they did not have enough funds to pay the assessments he was obligated by law to remove them from the trust. He said the private market was not interested in writing workers’ compensation coverage for public entities.
There being no further testimony on A.B. 313, Chairman Arberry closed the hearing on A.B. 313 and opened the hearing on A. B. 398.
Assembly Bill 398: Directs department of human resources to include demonstration project in state plan for Medicaid that will provide access to discounted prescription drug benefits for certain low-income persons. (BDR 38-280)
Assemblywoman Kathy McClain, Assembly District 15, introduced herself. She said A. B. 398 was a very simple bill that guaranteed thousands of questions and opposition. She reminded the committee that there was a health care crisis in the nation that was threatening the lives and well-being of millions of Americans and thousands of Nevadans. The ever rising, excessive prices for prescription drugs were denying citizens access to medically necessary health care and thereby threatening their health and well-being. National statistics showed that one in four Americans did not have any insurance covering prescription drugs. Additionally, about one-third of the working poor lacked any health care insurance. Uninsured Americans paid on average twice as much as the federal government paid for the same drugs on the federal supply schedule.
Ms. McClain said she had heard from many sources about all the states across the country debating the crisis that recognized the need to provide relief for their citizens without waiting for Congress to take action. Lack of affordable access to medically necessary drugs resulted in the denial of health care, the likelihood of serious illness or death, and the inability to lead a life of good health for many Nevadans. In the Seventieth Session of the Legislature, legislation was passed that created the Senior Rx Plan and recently in the Committee on Health and Human Services another bill was passed to create the Senior Option Program to give low-income seniors a well-deserved choice in obtaining low cost prescription drugs. The choice would enable many seniors to greatly enhance their quality of life and physical well-being while easing the burden on their fixed incomes in a time of rising prices in many other areas. While relief might be in sight for some seniors, many working families and not-so-poor seniors in Nevada had inadequate prescription drug coverage. That was the reason for A.B. 398. That proposal was designed to provide discounted prices for prescription drugs to all Nevada residents whose annual income was below 200 percent of the federal poverty level and that did not have insurance. Ms. McClain emphasized that the program was not a subsidy provided by the state, rather it was an approach to allow low-income individuals to purchase their prescription drugs at a discounted price.
The Kaiser Family Foundation estimated that the annual income for approximately 33 percent of Nevada residents was below the 200 percent of federal poverty level. That was approximately 600,000 Nevadans that were considered poor or near poor. The Kaiser Commission on Medicaid estimated that between 28 and 29 percent of the poor and near poor were uninsured in Nevada. That was over 200,000 Nevadans with low incomes and no health insurance. A.B. 398 would extend Medicaid prices to all uninsured residents of Nevada whose annual incomes were under 200 percent of the federal poverty level and did not qualify for any other state programs. Under A.B. 398 the Department of Human Resources would apply for a demonstration waiver from the Health Care Financing Administration (HCFA) to extend the Medicaid payment and rebate structure for prescription drugs to all uninsured persons within specified income levels. The program would allow residents with qualifying incomes to be issued a membership card that would enable them to purchase their prescription drugs at the same price the state of Nevada paid a pharmacy for prescriptions covered by Medicaid.
Medicaid programs saved millions of dollars for states because they required pharmaceutical companies to pay a rebate to the states on their drug products in order to participate in Medicaid programs. A.B. 398 was patterned after the Vermont Plan that went into effect in January 2001. The consumer, under the plan, would pay the usual and customary price for a drug less the manufacturer’s rebate that was collected by the state and passed on to the retail pharmacy. That could result in 15 to 40 percent savings over the retail price customers were currently burdened with. The actual savings would depend on the Medicaid formula used by the state and the rebates negotiated with the drug manufacturers.
Ms. McClain said the program was simple. A qualified beneficiary would present their prescription card with the prescription to a pharmacist, the pharmacist would check their eligibility, fill the prescription, and charge the customer the same price he would charge the state for a Medicaid prescription. The pharmacy would then be reimbursed from the state’s rebate account to cover the discounted price that he had passed on. A member in the program would benefit from the discounted prices but would not be considered a Medicaid recipient for any other purposes for other services or charges allowable under Medicaid. The program simply passed on a discount to eligible residents to ease the high cost of prescription drugs. It would not create a financial hardship for the pharmacies, it would not significantly impact the manufacturer’s profits, and it would not spend taxpayers’ money. It would provide some relief to the citizens of Nevada who currently had no prescription drug coverage.
Ms. McClain said she had reviewed the fiscal note for the bill and she had concerns. She did not feel that the fiscal note was realistic for several reasons. The biggest price tag appeared to be the dispensing fee. In her opinion that was not needed although it had been mentioned in the bill. It was not needed because the pharmacies would be getting the full price of the prescription. They would get the discounted price paid by the customer plus the manufacturer’s rebate that would be passed back to them through the state. In essence, they were getting the entire price of the prescription so the dispensing fee would not be necessary. The number of prescriptions to be filled was estimated at one per person per month and she believed that was unrealistic and had further inflated the estimates of the dispensing fee that was not needed in the first place. A critical component of the program was the point-of-sale computer management system. The pharmacy would need to be able to verify eligibility and be able to be reimbursed from the state at the time the sale was made or at least within a timely manner. It would utilize the system that was needed for all Medicaid payments and that was currently being funded by the federal government at 90 percent of the cost. That was a system that needed to be installed almost immediately. Ms. McClain said she believed Nevada was the only state that had not yet installed the system.
Ms. McClain went on to discuss the eligibility requirements for the program. She questioned the number of full-time equivalent (FTE) positions needed for the program. She said qualifying for eligibility should require a very simple affidavit that stated that the applicant did not have insurance, required the applicant’s valid driver’s license number, and a pay stub to indicate the applicant was under the 200 percent of poverty level. The application process should be simple because it was not a program that would entice anyone to take advantage of it. If a person already had health insurance, that would provide better coverage than the plan would allow for. She did not see that any type of abuse would be taken of the program. She said the point-of-sale fee might be reasonable depending upon how the computer system was set up. The state would need to recoup its cost of operating the program, however, since it was a program that was matched by federal money, she questioned whether the cost could be recouped. Ms. McClain said the fiscal note included funding for a trip to Maine and she could see no legitimate reason to fund a trip to Maine for program development. She pointed out that Maine’s program would not begin until July 2001. Ms. McClain opined that existing staff should absorb administration costs as there was no need to renegotiate prices with drug companies. Those prices had already been negotiated for Medicaid in general. She believed the point-of-sale program could easily be programmed to distinguish the proposed program from regular Medicaid reimbursements.
Ms. McClain urged the committee to review the fiscal note and fund the program within the agency’s normal budget.
Mrs. Chowning said she had heard about the Vermont Plan and the Maine Plan at national health conferences. They had been pointed to as sources of pride and solutions for the health care crisis in the nation. She said that on one hand, there were commercials on television describing the marvelous prescription drugs and on the other hand, when people tried to get the prescription medications in many cases their insurance companies would not fill the prescriptions. That practice set people up for hope and insurance companies dashed the hopes. Mrs. Chowning said the bill did not address prescriptions for those people who had insurance although the costs for prescriptions had increased. The people who were below the 200 percent poverty level were not the same people that were insured for prescribed medication. She thanked Ms. McClain for bringing the bill before the committee and asked why the program had worked so well in Vermont and was projected to work well in Maine. She asked if Vermont and Maine had large amounts of funding.
Ms. McClain said that Maine actually started with a different focus but had switched to the Vermont Plan. She said that the ability to obtain a demonstration waiver through the HCFA had been available since the early 1990s; Vermont just happened to take advantage of it and had been granted the waiver through the HCFA. Ms. McClain said that Vermont was different from Nevada because they already had a prescription program in place for certain people and it had been extended to cover other people. She said Maine would be interesting to watch because they would be starting from “scratch” as Nevada would be if the program was adopted.
Ms. McClain gave some examples from Vermont of the savings possible. She said the examples represented the top six drugs by dollar amount. The estimated retail price of Lorazepam was $19.95; the price paid by the Pharmacy Discount Program beneficiary would be $13.84, for a 31 percent savings. The estimated retail price of Albuterol was $19.00; the price paid by the Pharmacy Discount Program beneficiary would be $9.67. She said the discounts were possible but depended upon good faith negotiations on both sides.
Ms. Leslie said that a waiver would be necessary to start the program and that would take some time to obtain. She asked Ms. McClain to estimate how long it would take for the waiver to be approved and said that that would reduce the fiscal note because the program would begin later. She also asked if the department already had a budget request in for the point-of-sale program.
Ms. McClain said the department did have a budget request in for the point-of-sale program and she believed the waiver would take approximately 90 days to receive. She said that she understood from Mr. Duarte that the point-of-sale system might be installed by summer 2002.
Vice Chairwoman Giunchigliani asked Mr. Duarte to discuss the fiscal note the department had prepared on the bill.
Mr. Charles Duarte, Medicaid Administrator of the Division of Health Care Financing and Policy, introduced himself. He said he had submitted Exhibit I that indicated the division was in the process of revising the fiscal note to reflect Ms. McClain’s concerns with respect to the dispensing fee. In reviewing the bill and the reprint, it appeared that the dispensing fee would not come at an additional cost to the state so it had been eliminated. With respect to the frequency of utilization, the department believed that there would be frequent utilization by individuals who chose to use the program as it was a self-selection type of program. Individuals that needed it would choose it so he believed utilization would be as high as 12 times per year. Mr. Duarte said that the funding for the point-of-sale information system was not included in the fiscal note and would not be included in the revised fiscal note. However, operations for the point-of-sale system would be included because there was a charge for each transaction that would have to be paid to the fiscal agent who administered the point-of-sale system and that was based on volume. That was included in the fiscal note and it was matched at 50 percent. Mr. Duarte said the department had made its best estimates on staffing based on what was necessary to run the program after consultation with staff from Maine, Vermont, and the Health Care Financing Administration central office in Baltimore, Maryland. Those states had increased staff in their programs and one of the states had added 22 individuals for this program specifically. Most of the added staff was for eligibility determination and they too, had very simplified eligibility systems.
Nevada’s estimated staffing patterns were based on an estimate of the population as well as a very simple eligibility system that did not include an asset verification test and very rudimentary income verification procedures. The revised fiscal note taking those things into consideration was in the process of being completed. Mr. Duarte said the operational start date of the program had been moved to the start date for the point-of-sale system that he believed would become operational in May 2002. Moving the staffing forward and making the adjustments he had mentioned, Mr. Duarte said there were still incremental costs that needed to be allowed for systems development. The Nomads System needed to be modified in order to be compliant with federal regulations and track the program. There were ongoing systems operating costs and staffing costs. The trip to Vermont had been eliminated from the fiscal note. Mr. Duarte said that over the next biennium it would cost Nevada approximately $1,134,547, of which $567,274 in General Funds would be needed.
Ms. Tiffany asked Mr. Duarte how long it would take to get the demonstration waiver from the federal government.
Mr. Duarte answered that the minimum would be 90 days; with questions and answers it could take upwards of five or six months. He said the department’s time line called for development starting in June 2001 using the existing staff, submission of the waiver application by October 2001, and until May 2002 to get federal approval.
Ms. Leslie asked if the bill was not passed could the department apply for a waiver on its own and how likely would it be that the waiver would be approved.
Mr. Duarte said it was unlikely the department would apply for the waiver because of the costs although technically it was possible.
Vice Chairwoman Giunchigliani stated that the proposed program would not conflict with the Senior Rx Program because it was for individuals that did not qualify for that program.
Mr. Jon Sasser, who testified on behalf of the Washoe County Senior Law Project, spoke in support of A.B. 398. He said that for years he had attended national health conferences around the country and been envious of colleagues from Vermont who always seemed to be proposing the leading edge programs around the United States for dealing with the uninsured. For example, in 1988 when the CHAP Program first came into existence, Nevada covered children up to age 6 at 100 percent of poverty and Vermont went to age 18 at 200 percent of poverty. Vermont was always the envy of others in the country. He said he was delighted to see Ms. McClain come forward with the state-of-the-art proposal that was based on Vermont’s program. Mr. Sasser said that everyone on the committee understood the need for the program. The concept was simple. The state received a discount for the Medicaid Program and that discount would be passed along to other citizens. There may be some technical problems with the plan but he believed those should be able to be worked out. He said there may or may not be some technical problems with the language because of the secrecy of the subsidy Nevada received and how it was dealt with. He said he and Mr. Duarte had had discussion regarding that and Mr. Duarte indicated it could be done.
Mr. Sasser stated that he was very encouraged by the revisions that were being made as reported by Mr. Duarte. Taking out the $4.76 transaction charge that was the main portion of the fiscal note helped and he believed that there was a way to remove the $.60 transaction charge remaining in the fiscal note. He reiterated that the goal of the program was to pass along the discount received by the state. It was not to use state dollars to provide an additional discount. There should be some way to recoup that extra $.60 from the consumer if that made the difference in terms of funding for the bill. Mr. Sasser said his understanding was that would make approximately $300,000 difference in the fiscal note.
Mr. Sasser said the program could be implemented in May 2002 for about $600,000 in state monies and would be a worthwhile investment that the state should not let go. He believed it made sense to get the program going even if the start date had to be postponed to save costs. Mr. Sasser urged the committee’s support of the bill.
Ms. Bobbie Gang, representing the Nevada Women’s Lobby, introduced herself. She said that health care and pharmaceutical costs for low-income families were a major issue for the Nevada Women’s Lobby. The bill addressed a basic need of existence for many families in Nevada that were uninsured, working, and did not qualify for other public assistance programs. Those people could not afford health insurance coverage on their own and many of those families did not have health insurance through their employer. The cost of health care was a major concern for the lobby and the cost of pharmaceuticals was escalating.
Ms. Gang said that in addition to helping low-income families, she asked the committee to consider the costs to the economy. When people were sick they missed days at work. If they went to work when they were ill they would not be as effective and that had an impact on the economy, the employer, and productivity. She believed the bill provided a workable solution and she thanked the committee for its consideration.
Mr. Tom Wood testified on behalf of the Pharmaceutical Research and Manufacturers of America (PhRMA). He commended Ms. McClain for her tireless efforts trying to find solutions for bringing necessary pharmaceuticals to those who could least afford them. He said the best solution was a national program through insurance coverage for low-income and Medicare eligible seniors. Mr. Wood said PhRMA rose in opposition to A.B. 398 because it was a bill that was before its time in Nevada. The state was not set up to implement A.B. 398. There were three major impediments to implementation including a legal challenge on the original Vermont waiver that the bill was modeled after, a de facto requirement of the Medicaid electronic claims pay system that was not available, and the large fiscal cost to the state to maintain the effort. The bill would require a Medicaid waiver from the HCFA as Vermont’s did. HCFA, under the former administration, granted the waiver to Vermont but a lawsuit was filed by PhRMA against the HCFA for what it contended was an illegal Medicaid expansion. The lawsuit was currently in the federal court of appeals and had not been decided. PhRMA believed that if the waiver was requested and granted it could not operate successfully without an electronic point-of-sale system giving pharmacists instant access to pre-rebate Medicaid drug prices. Mr. Wood said that it was his understanding that an eligible individual would pay 100 percent of the Medicaid price for the prescription. The pharmacist would bill the state Medicaid system, which would have to pay the pharmacist the state subsidy and a dispensing fee within seven days. The dispensing pharmacist would keep the subsidy so the retail pharmacist got the benefit of the subsidy, not the patient. The cost to manage the system would be extraordinary. The fiscal note clearly outlined the necessity of bringing on the electronic claims system to implement the program and that was not included in the fiscal note. The hiring of the full-time equivalents with other costs came to $1.5 million, or since the revision of the fiscal note, approximately $500,000. Mr. Wood said that the eligible recipient would still have to pay 100 percent of the Medicaid prescription price on average. For example, on a $100 prescription, the cost would be $100. If the subsidy was $18, that $18 would go to the pharmacist. The eligible individual would have to pay the full cost of the prescription and he believed that was still an impediment to purchasing the necessary pharmaceutical.
Mr. Wood summarized his testimony by saying that the state would have to pay a great deal of money to implement the bill. Should it survive the legal challenges and wait to be implemented on the point-of-sale system, the eligible individual would still have to pay 100 percent of the charge and pharmacists in the state would keep the subsidy. He concluded by saying he commended Ms. McClain’s efforts to create access to pharmaceuticals for Nevadans that could least afford them but the infrastructure to implement A.B. 398 was not present to accomplish it. He provided Exhibit J to the committee.
Ms. Leslie said she did not understand what price the eligible individual would pay for the prescription. She believed that if they paid 100 percent of the Medicaid prescription price they would still be paying a lower price than what they would get by paying the non-Medicaid price. She believed that clearly the client was benefiting.
Mr. Wood confirmed that the client would receive the reduced Medicaid price for the prescription.
Ms. Leslie said that she was in favor of requiring the department to pursue the waiver because she did not believe the department would attempt to secure the waiver if the legislature did not require them to do so. She asked Mr. Wood if he would still have an objection to the program if the department was able to keep the price of the point-of-sale program at a reasonable level.
Mr. Wood said that in addition to the impediments to the bill he had previously mentioned, PhRMA was also opposed philosophically to the bill. He characterized the program as “de facto price control.”
Ms. Leslie said that the policy objective was to see Medicaid expanded so that people could afford prescription drugs.
Mr. Gaspar Lagga, representing GlaxoSmithKline, introduced himself. He offered another point of consideration for committee members. If the program moved forward and a waiver was not extended by the HCFA, he wondered if the state was prepared to implement the program or deal with the unmet expectation by the seniors. He referred to the example previously given and said that on a $100 prescription, the patient would still pay $80 out-of-pocket. If the average individual was taking three prescriptions at $240, he said that from his perspective someone that was under 200 percent of the federal poverty level would still be unable to afford that cost. He asked the committee to consider that if they moved forward with the program and the waiver was not granted, they would establish unintentional consequences of an unmet expectation by seniors.
Mr. Sam McMullen, representing the Retail Association of Nevada, introduced himself. He said the association supported the bill. Mr. McMullen said the association had had a great experience working with Ms. McClain in resolving a number of issues they had. He said that the issues had been resolved. Mr. McMullen said there was one aspect that he wanted to emphasize and that was that for at least four years the association had been working to implement an on-line adjudication system. That was an integral part of this program as well as for sales and the filling of prescriptions, but more importantly, the authorization of prescriptions at the pharmacy. He believed that on-line adjudication would save the state money in terms of filling prescriptions that were not authorized. He said his understanding was that the state of Nevada’s cost for building an on-line system and implementing it would be 10 percent of the total cost or $1.3 million. The federal government had a program that would pay 90 percent of that. That would not cover all the costs the committee would have to consider.
There being no further testimony on A.B. 398, Chairman Arberry closed the hearing on A.B. 398 and opened the hearing on A.B. 469.
Assembly Bill 469: Makes various changes relating to safe use of watercraft. (BDR 43-46)
Assemblyman Bob Beers, District 4, introduced himself and explained the bill. He said that A.B. 469 was substantially identical to A.B. 199 of the Seventieth Session of the Legislature. Mr. Beers said that A.B. 469 was supported by the Nevada Department of Wildlife (NDOW) and would mandate boating education in a program very similar to the hunting education program. Mr. Beers referred to Exhibit K that described the fiscal impact of the bill. He said that the NDOW received federal monies that were restricted to enforcement, education, titling, and registration of boats. Over the past five years that money had increased 106 percent so that in FY2001 it was expected to be approximately $600,000. The state was required to match the federal funds with state dollars received from motorboat fuel taxes, which was easily done. Those revenues had increased 26 percent over the past five years to a FY2001 amount of approximately $1.5 million. The proceeds were restricted to boating enforcement and education. The reserve in Budget Account 4456 was healthy and growing and the impact of A.B. 469 would still leave an ending balance in the budget account of $1.5 million at the end of the biennium.
Mr. Tom Atkinson, Chief Game Warden for the Nevada Division of Wildlife, introduced himself. He said the NDOW would administer the provisions of the bill. He supported the bill in concept although it was not included in The Executive Budget. He believed the time was right for the program and it was a constituent-driven bill based on demands and the increased need to address safety issues on the state’s waters. The funds in the accounts had been paid by boaters and should be used for boaters for the boating safety program. That could be accomplished without additional fees and he hoped that with the increasing revenues over the next biennium there would be no need to seek additional fees to continue to administer the program.
Mr. Beers advised the committee that the education was available to boaters at no charge. There were courses that could be taken for a nominal charge and courses that could be taken for no charge. In addition to not impacting the state’s General Fund it would also not impact the citizens’ wallets except for the amount of money they could save in their boating insurance since the boating accident record would improve.
There being no further testimony on A.B. 469, Chairman Arberry closed the hearing on A.B. 469 and opened the hearing on A.B. 572.
Assembly Bill 572: Establishes single fraud control unit for insurance within office of attorney general. (BDR 18-487)
Mr. Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General, introduced himself. He described Exhibit L as an outline of the A.B. 572 Fraud Unit consolidation. The bill would administratively combine the Workers’ Compensation Fraud Unit and the Insurance Fraud Unit. There would be no mingling of the funding sources for the two units that were currently separately funded. One was funded through an insurance premium assessment and the other through the Workers’ Compensation assessment. Mr. Higgins said that he hoped within two years they could determine the best way to combine the funding sources. That would take changes in the Insurance Commissioner’s programs as well as with the AG’s program. The consolidation would accommodate the changes in the insurance industry. Up to seven years before, the Workers’ Compensation Fraud Insurance was completely separate from regular insurance and the two never met. There was available the state system or the self-insured system and individual insurance companies did not write workers’ compensation coverage. With changes in the last few years insurance companies were now writing both types of insurance and Mr. Higgins believed that at some point the companies would notice they were paying for two separate fraud units and the functions overlapped. Combining the two units could save money through economies of scale and in two years possibly something could be done with the funding sources. Mr. Higgins said that potentially they would be looking to provide other fraud units into a combined larger fraud unit. Mr. Higgins reiterated that each section of the combined fraud unit would continue to be paid for separately and accurate time reports would be kept on the amount of time spent on each.
There being no further testimony on A.B. 572, Chairman Arberry closed the hearing on A.B. 572. The next order of business was budget closings.
BUDGET CLOSINGS
GOVERNOR’S OFFICE OF CONSUMER HEALTH ASSISTANCE – BUDGET PAGE ELECTED-13
Mr. Stevens, Fiscal Analyst with the Legislative Counsel Bureau (LCB), introduced Bob Atkinson, Legislative Counsel Bureau Program Analyst. He said there were two adjustments made in the budget. The first adjustment was the balance forward of some unused money that had been transferred in from the Department of Industrial Relations (DIR). The enabling legislation that set up the funding source did not provide for any money to revert to the DIR fund so the unspent funds were carried forward at the end of FY2000. He was suggesting now that the funds be carried forward into this budget and reduce the amount of transfer.
Mr. Atkinson said there were two issues on unclassified salaries. The budget was initially built changing some of the unclassified salaries and in doing that the agency neglected to include the amount in the additional 9 percent and 4 percent raises.
Mr. Atkinson said there were two budget closing issues and possibly a third. The first issue had to do with unclassified salaries in decision unit E-806. Initially the office was set up with a director and three ombudsmen positions. Once the hiring began, a lead ombudsman position was created that was paid $64,810, which had been authorized. The other two ombudsmen positions were then established at $60,000 annually. The budget as submitted would raise the rate of the lead ombudsman to $70,000 and leave the other ombudsmen positions at $60,000. Mr. Atkinson asked the committee for a decision on whether the salary should be raised from $64,810 that was in the original legislation to $70,000.
Mr. Goldwater commented that he did not support the raise from $64,810 to $70,000 contained in decision unit E-806.
Mr. Atkinson clarified that the adjustment as set up in the budget actually reduced the total amount paid out. It was currently authorized at three positions at the $64,810 rate. The agency suggested that one position be paid $70,000 and two positions $60,000.
Mr. Stevens interjected that the committee could make this decision now or wait. For the closing, the committee needed to determine whether it wanted to adjust decision unit E-806. The unclassified salary decisions would not be made for a couple of weeks but the committee needed to decide how much to include in the budget to accommodate those salary increases. Even if the committee made the decision to set the salaries at a particular rate, those salaries would be looked at again when the committee looked at unclassified salaries in total. He described the decision as an interim decision.
Chairman Arberry asked Mr. Stevens what would happen if the committee decided not to include that raise in the unclassified pay bill. He wondered if Budget Account 101-1003 would have to be reopened to make it conform.
Mr. Stevens said the budget would not be reopened. The money would just be left in the salary category.
MR. HETTRICK MOVED TO APPROVE THE CONSOLIDATION IN SALARIES AS INCLUDED IN THE BUDGET.
MR. MARVEL SECONDED THE MOTION.
Mrs. Chowning asked when it was decided to go from one ombudsman to three ombudsmen. She said she did not remember being a part of that agreement and she did not understand the need for three ombudsmen.
Mr. Atkinson clarified that the director was referred to as the ombudsman. As the original legislation was set up it created a director and three ombudsmen. Those three ombudsmen were the ombudsmen that were being referred to in the current discussion. The ombudsmen positions were the positions that worked on the medical issues as opposed to the director’s position.
Mrs. Chowning asked how many positions there were currently and how many new positions there were in decision unit E-806.
Mr. Atkinson said there were no new positions in E-806 and there were nine positions in the budget. There was a director, three ombudsmen, and five classified positions.
Mrs. de Braga asked if the director’s position was the vacant position.
Mr. Atkinson said there was an acting director in the position who was the person operating as the deputy director or the supervising ombudsman.
Mrs. de Braga asked if there was a period of evaluation for the position.
Mr. Atkinson said the position was appointed by the Governor and this would establish a maximum salary.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Ms. Giunchigliani were not present for the vote.)
Mr. Atkinson continued his presentation by explaining the next item for consideration was the consolidation of the Office of Hospital Patients with the operations of the Consumer Health Assistance Office. That recommendation came out of The Governor’s Steering Committee to Conduct a Fundamental Review of State Government Final Report to the Governor for 2000. It was recommended in the budget and A.B. 559 was introduced to enable it. That bill did not leave committee but the Budget Division had indicated they still wished to pursue the consolidation of the two accounts.
Mr. Stevens said the bill that would have combined the two offices died in the Committee on Government Affairs. The Governor had recommended that those two offices be consolidated. The committee needed to determine if the offices were combined or not. If they were to be combined there would need to be another vehicle identified to allow the statutory authority to combine the offices. The committee’s decision on the consolidation would modify the closings that would be put together.
Mrs. Chowning said that the bill had died in the Committee on Government Affairs and she did not see the hurry to consolidate the budgets. The Office of Hospital Patients was serving the public well in helping them reduce their hospital bills. She suggested that office should be left separate and the matter could be addressed next session.
Mr. Stevens said the budget could be combined or not combined depending upon the decision of the committee.
MRS. CHOWNING MOVED NOT TO CONSOLIDATE THE BUDGETS OF THE OFFICE OF HOSPITAL PATIENTS WITH THE OFFICE FOR CONSUMER HEALTH ASSISTANCE.
MR. GOLDWATER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
********
Chairman Arberry reminded the committee that all budgets from the subcommittees had to be closed by Friday, May 11, 2001.
Mr. Stevens explained that Budget Accounts 502-4501 and 505-4502, the Colorado River Commission, were budgets that were held previously in closing and he asked Chairman Arberry to take those accounts as the next order of business.
COLORADO RIVER COMMISSION – BUDGET PAGES CRC-13 AND CRC-16
Mr. Jim Rodriguez, Program Analyst with the Legislative Counsel Bureau, said the budgets had been held for clarification on some issues. Budget Account 4501 was the Power Delivery Project and Budget Account 4503 was the Power Marketing Fund. They were both enterprise funds that sold and bought energy for their customers in Nevada. The distinction between the two was that the Power Delivery Project serviced the Southern Nevada Water Authority. The power plant had been built to power the new water system. The Power Marketing Fund served its current customers and supplied hydro-power and supplemental engine power to various electricity consumers in the southern Nevada region.
Mr. George Kahn, Executive Director of the Colorado River Commission, introduced himself. Mr. Kahn explained that the Colorado River Commission used the funds to buy electricity from the federal power projects and then sold the power to customers in southern Nevada. There were 11 customers for hydro-power including Overton Power District, Valley Electric Association, Lincoln County Power District, Nevada Power, Boulder City, and six industrial customers in Henderson. The commission also had a responsibility to provide all the non-hydro-power to the southern Nevada Water Authority for the new water treatment and transmission facilities they had constructed. When the commission went out and bought non-hydro-power, essentially electric power from the market, it was bought to meet the peak loads during the summer for all the pumps that needed to operate. The power was purchased in advance to take advantage of good prices. They made sure they had firm contracts in place to ensure reliable delivery and that the price would be affordable. When the power was scheduled in the summer for the pumps, not all the pumps ran all the time. That was a feature of the physical layout and the requirements. That resulted in excess energy being available that could not be stored. The excess energy was sold to wholesalers who could sell the excess energy and the revenue derived from the sales went to reduce the cost to deliver the product to all customers. No additional retail customers were served but the excess energy that was purchased and not needed in preparation of the peak load capacity was sold. Those revenues were used to help reduce the cost to their customers.
MR. MARVEL MOVED TO CLOSE THE BUDGETS AS RECOMMENDED BY THE GOVERNOR.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
********
COMMISSION ON POSTSECONDARY EDUCATION – BUDGET PAGE K12ED-43
Mr. Stevens recommended the budget be closed as recommended by the Governor. Mr. Stevens said that S.B. 237 would remove the Commission on Postsecondary Education from the Department of Education where it was currently housed. The commission would become an independent agency as it had been in the past. If that took place there would be some budget adjustments that would need to take place because they were included in the Department of Education’s cost allocation. Mr. Stevens said he recommended the budget be closed as recommended by the Governor with the authority to make adjustments if S.B. 237 was ultimately approved by the legislature.
MR. GOLDWATER MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR WITH THE AUTHORITY TO MAKE ADJUSTMENTS IF S.B. 237 IS ENACTED INTO LAW.
MRS. CHOWNING SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
********
RESTITUTION CENTER – SOUTH – BUDGET PAGE PRISONS-94
Mr. Stevens said there were questions on this account because the Restitution Center was scheduled to close and there were questions related to the closure.
Ms. Carla Watson, Program Analyst for the Legislative Counsel Bureau, said the facility had closed effective January 2001, and the few individuals left were transferred to the Indian Springs Camp and were being transported back and forth to their respective jobs. One of the questions on the account was that the Department of Prisons had projected 60 inmates in the month of July and that facility had since closed. Since that time the department had provided a new biennium plan with the 60 inmates redistributed.
MR. MARVEL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
********
PUBLIC SAFETY, TRAFFIC SAFETY – BUDGET PAGE PS-136
Mr. Mark Krmpotic, Program Analyst for the Legislative Counsel Bureau, said the Traffic Safety account passed through grant funds received by the Office of Traffic Safety. Funding was provided to support the operations of the Office of Traffic Safety, local government agencies, local law enforcement jurisdictions, and private nonprofit entities for traffic safety problems in their jurisdictions. It was recommended in The Executive Budget to continue the program at base levels with a nominal purchasing assessment in decision unit M-100.
With respect to adjustments, grant funds for the traffic records and data systems improvement grant were adjusted in FY2002-03 to reflect continuation of the grant. Also, staff would anticipate the removal of the purchasing assessment based on final submittal by the Budget Office since purchases and contracts were not made directly from that budget account.
Mr. Krmpotic said one of the questions staff had with the agency previously was that the federal 402 grant required a minimum of 40 percent of the funds be passed through to local agencies. Based on review of the budget it did not appear that that was occurring. The agency had since provided staff with information showing that requirement had been met on a federal fiscal year basis.
MR. MARVEL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.
MR. PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
********
GAMING CONTROL BOARD – BUDGET PAGE GAMING-1
Mr. Michael Chapman, Program Analyst with the Legislative Counsel Bureau, introduced himself. He said staff had two technical adjustments regarding state-owned building rent for the office space at the Grant Sawyer Building in Las Vegas.
Regarding the base budget, The Executive Budget recommended continuation of the credential pay plan that had been authorized in recent sessions beginning in 1995 in the amount of $177,500 per year. Staff recommended that the $177,500 per year be removed from the base budget and included in the unclassified pay bill as had been historically done.
Decision unit E-806 was the supplemental unclassified salary adjustment. It represented $2.1 million in additional salary adjustments over and above what was included in The Executive Budget. There were three components to the decision unit including: the increase in salaries, the supplemental credential pay plan funding of $222,500 per year in addition to the current $177,500 previously authorized. If the committee chose to approve the supplemental funding for the credential pay plan, staff recommended that the committee put it in the unclassified pay bill and include language that was similar to the language that had been included for the current pay plan.
Mr. Marvel asked if that was the way the committee had always handled the account in the past.
Mr. Stevens answered that in the past it had been extracted from the budget and included in the unclassified pay bill so there was language specifically delineating how the money could be used and setting a maximum limit on the amount.
Mr. Marvel recommended that the funds be removed from the budget and included in the unclassified pay bill.
Mr. Stevens said that if it was the pleasure of the committee, staff would extract that funding from the budget so it would be a reduction in the account and it would be placed to the side until the unclassified pay bill was brought before committee. It would be added as an appropriation within the unclassified pay bill. The net savings would be zero.
MR. MARVEL MOVED THE FUNDING BE EXTRACTED FROM THE BUDGET AND ADDED TO THE UNCLASSIFIED PAY BILL.
MR. PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, Ms. Giunchigliani, and Mr. Goldwater were not present for the vote.)
Mr. Chapman asked for clarification from the committee on whether the motion was for the whole decision unit or for only one piece of it.
Chairman Arberry confirmed that the motion applied to the entire decision unit.
Mr. Stevens clarified that as he understood the motion, it took care of both the $177,500 and the $222,500. That was the issue regarding the credential pay plan, which was the only part approved at that point in time.
Mr. Chapman continued with the decision unit by discussing Exhibit M. It was the State Gaming Control Board Proposed Unclassified Salary Increases, FY2001 – FY2003. Exhibit M showed the total funding for the decision unit and showed the salary and benefits costs.
Mr. Chapman went on with his presentation to describe Exhibit N. It reflected by position the adjustments recommended in The Executive Budget for various positions.
Mr. Chapman described Exhibit O, the third component of the decision unit, as a summary of position reclassifications with salary adjustments for 20 positions within the Gaming Control Board.
Mr. Chapman asked the committee to consider the following:
Mr. Chapman pointed out that the funding for the decision unit would come from the Investigation Fund. It was a separate account where the Gaming Control Board collected fees, licenses, and applications and paid the investigation costs incurred by the board. He said the committee might recall that during budget hearings those fees were increased rather substantially effective January 1, 2001, in part to cover funding for this decision unit.
Mr. Stevens said the decision point on that particular issue was that the fees had been raised substantially so that some over-and-above salary increases could be provided to almost all of the Gaming Control Board unclassified staff to be funded from the investigative fees. The specific salaries, if approved, would be determined in a couple of weeks when the unclassified salary bill was considered. The decision point was whether to approve that concept in general and the investigative fee funding for the salary increases.
MR. MARVEL MOVED TO APPROVE THE FUNDING OF SALARY ADJUSTMENTS FROM THE INVESTIGATIVE FUND.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, Ms. Giunchigliani, and Mr. Goldwater were not present for the vote.)
Mr. Chapman said that the Governor recommended funding to expand the board’s space in the Grant Sawyer Building. The Gaming Control Board would end up occupying the entire second floor. The Secretary of State currently occupied a small portion of the floor and would move into space currently occupied by Environmental Protection who would be moving to non-state-owned building space.
Mr. Chapman explained that module E-720 recommended a new file server, some software for remote access by the field personnel and licensees, and Internet screening software.
Mr. Chapman said the final item for consideration in the budget was the recommendation to transfer existing costs incurred by the Gaming Control Commission to a separate budget account.
MR. MARVEL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.
MR. PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Ms. Giunchigliani were not present for the vote.)
BUDGET CLOSED.
********
GAMING COMMISSION – BUDGET PAGE GAMING-7
Mr. Stevens said there was a recommendation in The Executive Budget to approve a separate budget account for the Gaming Commission. There were also some additional staff costs that had not been present in the past and there was a policy choice of whether the existing system should be continued. That was to have the Gaming Commission’s expenditures and budgets contained within the Gaming Control Board’s budget or whether it should be separated into another budget and provide the commission additional resources.
Mr. Marvel said that it was his understanding that some of the commissioners did not have travel money and were paying for travel from their own funds. He believed that the committee should consider giving them their own budget.
Mr. Stevens pointed out that in the Seventieth Session of the Legislature there was money specifically added to the Gaming Control Board budget for Gaming Commission travel. While it might have been a practice in the past at some point in time, it was not the practice in the current biennium. The Gaming Commission members did have travel monies available to them in both years of the current biennium.
Mr. Marvel commented that separating the budgets would make certain the funds were available and able to be utilized. He said that the Chairman of the Gaming Commission had told the committee that he was out-of-pocket approximately $12,000.
Mr. Stevens said that a significant amount of travel dollars for the Gaming Commission had been built into the budget in the Seventieth Session of the Legislature.
Ms. Tiffany reported that she was in the meeting when Chairman Sandoval discussed his out-of-pocket travel expenses. She thought it would be a good idea to send a letter to the commission notifying them that there was a travel budget available for their use. That way there would be no question about the issue.
Mr. Stevens stated that if the committee approved what was included in The Executive Budget they would have their own separate budget accounts and they could travel out of that budget account. Now there was only the Gaming Control Board account and the Gaming Commission’s costs were included within the Gaming Control Board’s budget account. The Executive Budget recommended that the Gaming Commission have its own budget account. The costs in the Gaming Control Board budgets would be transferred over to the Gaming Commission budget. Also, additional salary support was being recommended in the Gaming Commission account. Mr. Stevens said the amount of money to be transferred from the Gaming Control Board account to the Gaming Commission account was equal and there would be additional costs involved for the additional position.
Mr. Marvel said it was his understanding that the Senate Finance Committee was contemplating two separate budgets.
Chairman Arberry held Budget Account 101-4067.
SECRETARY OF STATE – BUDGET PAGE ELECTED-81
Ms. Watson said there were two technical adjustments for this account. In module M-100 the General Fund was reduced by $3,656 in each year of the biennium and the Special Fund was reduced by $1,676 each year due to applying current insurance rates. The second adjustment was that staff eliminated module E-806 at the request of the agency. That module recommended unclassifying an existing Administrative Services Officer III position. The elimination of that module reduced the General Fund by $3,195 in FY2002 and $5,991 in FY2003.
Ms. Watson said that decision unit M-200 included funding of $362,940 from the Special Services Fund for the biennium for contract maintenance for new recording software. The committee was concerned when the account was first presented about the cost of the maintenance contract and since then staff had received some revised numbers from the agency reducing it to $140,000 in FY2002 and $170,000 in FY2003. That would be an overall reduction of $52,940 for the biennium. Ms. Watson said it was her understanding that the agency was currently negotiating the maintenance contract and it could be reduced even further. As a side note, Ms. Watson said that was the one outstanding issue on the Senate side when the budget closed and that had not yet been resolved. Additionally, in M-200 the agency was requesting funding for 18 classified positions. Of the 18 positions, 9 would be funded from the General Fund at a cost of $300,220 in FY2002 and $525,498 in FY2003. The remaining 9 positions would be funded by the Special Services Fund at $467,504 in FY2002 and $549,383 in FY2003.
Ms. Watson explained that she had eliminated module E-806 at the request of the agency.
Ms. Watson said that modules E-225, E-901, and E-910 included recommendations to transfer three Information Systems Specialist III positions and one Computer Network Technician II from the Department of Information Technology to the Secretary of State’s office. That would result in a General Fund savings of $209,859 and a savings in the Special Services Fund of $95,745. The transfer was a pilot project and the positions were currently working at the Secretary of State’s office.
Ms. Watson said that the agency had requested to unclassify a Management Assistant IV position. That was an unfunded request that had not been included in The Executive Budget. The cost would be approximately $7,622 for the biennium. The agency also requested unclassified salary increases for the Chief Deputy, Deputy of Securities, Deputy of Commercial Recordings, and Deputy of Elections.
Ms. Watson informed the committee that there was a potential alternative funding source available. Fines imposed for violation of the Securities Act were deposited in Budget Account 1053 and the ending balance was carried forward at the beginning of each fiscal year. That account supplemented the operating cost for the Securities Division and provided funding of $10,000 per year to the Nevada Council on Economic Education to sponsor the Web-based stock market game. Currently the account had a balance of approximately $198,000. The committee could consider transferring $48,643 for each year of the biennium to cover the operating costs in Budget Account 1050, which was the operating account for the Secretary of State.
MS. GIUNCHIGLIANI MOVED THAT BECAUSE THERE WERE QUITE A FEW POSITIONS RECOMMENDED IN THE EXECUTIVE BUDGET, THEY SHOULD BE REDUCED TO ONE-HALF. SHE RECOMMENDED APPROVING THE CHIEF SECURITIES POSITION, NO. 167, WHICH WOULD CONTINUE FORWARD WITH A RECLASSIFICATION BY STATE PERSONNEL. ADDITIONALLY, MS. GIUNCHIGLIANI MOVED TO APPROVE POSITION NO. 159, COMPLIANCE-AUDIT INVESTIGATOR III; POSITION NO. 161, COMPLIANCE ENFORCEMENT INVESTIGATOR; AND POSITION NO’S. 148, 151, 152, 153, 154, 157, AND 164, WHICH ARE PROGRAM ASSISTANT II POSITIONS FUNDED BY THE SPECIAL SERVICES FUND. MS. GIUNCHIGLIANI ALSO MOVED TO APPROVE THE TRANSFER OF FUNDS FROM BUDGET ACCOUNT 1053 TO 1050 TO COVER OPERATING COSTS OF THE SECURITIES ENFORCEMENT DIVISION IN CATEGORY 15 AND REVISED FUNDING FOR THE SOFTWARE MAINTENANCE CONTRACT AS INDICATED BY CARLA WATSON.
Mr. Parks asked Ms. Giunchigliani to repeat the numbers for the positions.
MS. GIUNCHIGLIANI REPEATED THE NUMBERS 167, 159, 161, 148, 151, 152, 153, 154, 157, AND 164 AND THAT ALLOWED THEM THE ABILITY TO MOVE INTO EACH OF THOSE DIVISIONS AND EXPAND. THAT WOULD GIVE THEM THE FLOATERS TO BE ABLE TO CROSS TRAIN, WHICH THEY DID CURRENTLY. THREE POSITIONS WOULD BE FUNDED WITH GENERAL FUNDS AND THE REMAINDER WOULD BE FUNDED FROM THE SPECIAL SERVICES FUND.
MS. LESLIE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, Mrs. de Braga, and Mr. Goldwater were not present for the vote).
BUDGET CLOSED.
********
GAMING CONTROL BOARD INVESTIGATION FUND – BUDGET PAGE
GAMING 9
Mr. Chapman said that staff was not recommending any technical adjustments on Budget Account 4063.
Mr. Chapman said it had been discussed regarding the Gaming Control Board account to transfer $2.1 million to the Gaming Control Board to fund the salary adjustments in decision unit E-806. Decision unit M-200 recommended $1.07 million per year in additional authority based on estimated investigation caseload growth.
MR. MARVEL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, Mrs. de Braga, and Mr. Goldwater were not present for the vote.)
BUDGET CLOSED.
********
PUBLIC UTILITIES COMMISSION – BUDGET PAGE PUC-1
Mr. Chapman described the technical adjustments. The first was to decrease the base budget by $500 per year to reflect reduced longevity payments resulting from recent personnel changes. Module E-710 was decreased $16,420 to reflect revised pricing for replacement computers, printers, and video conferencing equipment.
Mr. Chapman said module M-200 recommended the elimination of six positions resulting from the PUC’s plan to reorganize its staff. That would reduce the staff from 86 to 80 positions. Mr. Chapman recommended the title changes resulting from the reorganization be reflected in the unclassified pay bill.
Mr. Chapman went on to say that at the time of the budget hearings the PUC indicated it could get by with the reduction in the number of positions. Since then A.B. 369 was approved by the legislature and signed by the Governor. That bill repealed the provisions of the Nevada Revised Statutes that provided for the opening of competitive electric markets and re-regulated the electric utility industry. As a result of the passage of A.B. 369 the agency and the Budget Office had submitted an amendment requesting reinstatement of two financial analyst positions that were recommended for elimination. Based upon the information supplied by the PUC and the Budget Office it appeared to be reasonable to reinstate the two positions and thus, eliminate only four positions in the decision unit.
Mr. Chapman stated that decision units E-300 and E-301 dealt with additional software including forecasting software. Decision unit E-301 recommended additional publications for forecasting. The passage of A.B. 369 repealed Nevada Revised Statutes (NRS) 704.988 that required the PUC to conduct forecasting of loads and activities so they amended those two decision units to remove the software in decision unit E-300 and the forecasting publications in E-301.
Mr. Chapman said that decision unit E-710 recommended replacement of computer hardware, office equipment, videoconferencing equipment, and a four-wheel drive vehicle. The Division of Information Technology (DoIT) and Mr. Chapman had reviewed the computer and electronic equipment replacement schedule. As part of the reinstatement of the two positions in module M-200 the agency requested to replace two more computers that were fairly old and the technology had aged. That decision unit also recommended replacing the commission’s videoconferencing equipment. Staff received recent pricing update information that reduced the price by $6,000.
Decision unit E-720 recommended three new computers, five laptop computers, two file servers, and another new printer. The two file servers were replacement file servers so they should have been reflected in E-710.
Mr. Marvel asked if the mill levy assessment would be changed.
Mr. Chapman answered that the mill assessment had not changed. It was reduced in May 2000 from 3.5 mills to 2.5 mills. The agency had flexibility pursuant to the statutes to adjust the mill rate based upon the legislatively approved work program amounts.
Mr. Marvel asked how much reserve was in the budget.
Mr. Chapman answered that it was approximately $3.3 million. With the mill assessment at 2.5 for the biennium it would reduce the reserve down to $1.1 million at the end of 2003. If utility revenues increased they might have to adjust the mill levy before the beginning of fiscal year 2002.
Mr. Marvel asked what the agency believed they needed as a reserve.
Mr. Chapman said the agency had estimated between $1.7 and $1.8 million.
MR. MARVEL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.
Mr. Chapman reported that A.B. 369 would reinstate deferred energy accounting that required annual deferred energy filings before the commission. It would reinstate general rate case filings once a year and basically put into place a traditional regulatory scheme.
MR. MARVEL CLARIFIED THAT HIS MOTION WAS TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF WITH THE REINSTATEMENT OF TWO POSITIONS REQUIRED BY A.B. 369.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, Mrs. de Braga, and Mr. Goldwater were not present for the vote.)
BUDGET CLOSED.
********
MILITARY – BUDGET PAGE MILITARY-1
Mr. Jim Rodriguez said two technical adjustments had been made to Budget Account 3650. Within the agency’s base budget, staff adjusted the funding allocation to correctly align the funding mix between the General Fund and federal funds. When The Executive Budget was submitted, alignment of the funding was off and staff made the adjustments resulting in a $13,063 reduction in FY2002 and $20,525 reduction in FY2003 in the General Fund.
The second technical adjustment was made to module M-100. The Executive Budget had overlooked an inflation adjustment to the agency’s electric and gas utilities cost. The net effect of the adjustment was an increase overall of $102,028 in FY2002 and $220,203 in FY2003.
Mr. Rodriguez said there was one closing issue for the committee’s consideration on module M-200. That module requested funding to continue an Environmental Scientist position that was approved by the Interim Finance Committee. That position was provided in order to let the agency deal with regulatory requirements set by Clark County’s District Board of Health and their Air Pollution District.
Mr. Marvel asked how the Military Department got involved with the environmental issues.
Mr. Rodriguez answered that the Military Department had construction projects ongoing in their guard units and also had vehicles and environmental impact studies for any projects they presented in Clark County.
Ms. Giunchigliani said some divisions were supervised by federal military employees and some were supervised by state employees. She asked how many state employees were under direct supervision by federal employees.
Mr. Rodriguez answered that the supervision changes were part of the reorganization effort by the agency. Previously there were state employees who were heading the units. Under the reorganization, some of the federal employees would be made supervisors. Mr. Rodriguez offered to obtain more information for Ms. Giunchigliani. Ms. Giunchigliani said her understanding was that there were some state employees who feared for their jobs because they were no longer supervised by a state employee. She wanted to be certain no state employees were jeopardized because the federal employees had control over incoming federal dollars.
Mr. Rodriguez said he had heard rumors but he believed there were many issues to be dealt with regarding the reclassifications and reorganization. He said some state employees took exception to relinquishing their responsibilities to federal employees. He was unsure of whether they were demoted and he did not believe there were any financial hardships placed on state employees.
Ms. Giunchigliani suggested that the caucus double-check to see what the impact was on state employees. Mr. Rodriguez offered to provide information on the changes to the committee.
Mr. Stevens said that he believed the committee should make the technical adjustments; they were the shift in federal/state funding mix and the inflation adjustment for utilities.
MS. GIUNCHIGLIANI MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, Mrs. de Braga, and Mr. Goldwater were not present for the vote.)
BUDGET CLOSED.
********
NATIONAL GUARD BENEFITS – BUDGET PAGE MILITARY-008
Mr. Rodriguez said that Budget Account 3653 funded recruitment and retention of active members by providing guardsmen with a funding source for educational tuition reimbursement. The Adjutant General was authorized to refund 100 percent of tuition costs. He had the discretion to reimburse from zero to 100 percent of tuition costs. The disbursements were a function of the number of qualifying participants and total funding. The Executive Budget recommended keeping the funding at the same level as the last biennium and Mr. Rodriguez recommended closing the budget as recommended by the Governor.
MR. HETTRICK MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
MR. MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, Mrs. de Braga, and Mr. Goldwater were not present for the vote.)
BUDGET CLOSED.
Mr. Marvel asked how many people were receiving reimbursement for tuition. Mr. Rodriguez did not have that information with him but said he would submit it to the committee. He said the Guard was reevaluating who would be eligible to receive the reimbursements. He said that currently it was given to everyone including graduates.
********
Assembly Bill 15: Requires establishment of program to provide supportive assistance to certain persons who obtain legal guardianship of certain children. (BDR 38-368)
Mr. Stevens described A.B. 15 as the kinship care bill that was heard in committee on April 24, 2001. He said that Ms. Giunchigliani and Senator Mathews testified on the bill. There was a fiscal impact on the bill that would be funded through Temporary Assistance to Needy Families (TANF) funds and those funds were built into the budget closings in the TANF budget.
Mr. Steve Abba, Principal Deputy Fiscal Analyst with the Legislative Counsel Bureau, stated that the TANF funds in the first year of the biennium were approximately $800,000 and $2.2 million in the second year.
MS. LESLIE MOVED TO DO PASS A.B. 15.
MR. BEERS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Mr. Goldwater were not present for the vote.)
********
Assembly Bill 199: Revises provisions governing certain accounts, licenses and stamps administered by division of wildlife of state department of conservation and natural resources. (BDR 45-529)
Mr. Stevens said A.B. 199 was the Trout Stamp Bill for the Division of Wildlife to fund its renovation of hatcheries.
MR. MARVEL MOVED TO DO PASS A.B. 199.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Mr. Goldwater were not present for the vote.)
********
Assembly Bill 237: Makes supplemental appropriation to District Judges’ Salaries and Judicial Pensions Fund for shortfall in money budgeted for retirement benefits and pensions for District Judges and widows. (BDR S- 1256)
Mr. Stevens stated that A.B. 237 was a supplemental appropriation included in The Executive Budget of $125,918 to the District Judges Pension Account. Staff had worked with the Administrative Office of the Courts to recalculate the numbers to see if any funds could be added or deleted and the amount could be reduced by $16,000.
MS. TIFFANY MOVED TO AMEND AND DO PASS A.B. 237.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Mr. Goldwater were absent for the vote.)
********
Assembly Bill 291: Imposes additional fee for processing application for game tag for support of programs to control predators and protect wildlife habitat. (BDR 45-160)
Mr. Stevens said A.B. 291 was a fee increase to be charged for processing each application for a game tag to support predator control programs and protect wildlife habitat.
MR. HETTRICK MOVED TO DO PASS A.B. 291.
MR. MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Mr. Goldwater were not present for the vote.)
********
Assembly Bill 569: Exempts certain professional and occupational boards from provisions concerning state financial administration. (BDR 31-341)
Mr. Stevens described A.B. 569 as a policy issue that the committee needed to consider and decide. The professional and occupational boards were not included in The Executive Budget for the biennium when in the past they had been. The bill would eliminate the professional and occupational boards from NRS 353, which was the State Budget Act. Those accounts would no longer be included in The Executive Budget each session.
Chairman Arberry asked if an occupational board could be brought before the committee if an individual legislator wanted that.
Mr. Hettrick said that the legislature still controlled the laws and policies and the legislature could ask for whatever it needed. The only difference was that the legislature would not be reviewing the budgets of the boards. He pointed out that the boards made their own deposits and funded themselves. He thought the bill was reasonable and made sense.
Ms. Paula Berkley, representing the Chiropractic Physicians Board of Nevada, said that S.B. 420 would require that all the boards give a summary of their budgets twice a year to the Legislative Counsel Bureau and the legislature would have access to those documents. She said it was illogical to prepare a budget and submit it to the Budget Division because the boards were required to create a budget that looked like the budget of a state agency when they were not state agencies.
MR. HETTRICK MOVED TO DO PASS A.B. 569.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
Mr. Stevens added that the Budget Division recommended the elimination of one budget analyst position in its office based on the passage of A.B. 569.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Mr. Goldwater were not present for the vote.)
********
Assembly Bill 662: Revises provisions relating to authorization for expenditure of money in Heil trust fund for wild horses. (BDR 45-1516)
Mr. Stevens said A.B. 662 would allow monies to be expended out of the Heil Trust Fund for wild horses based on the recommendations included in The Executive Budget. There was a minimal level required and this would change the statute to allow them to spend down from that amount in the current biennium.
MS. TIFFANY MOVED TO DO PASS A.B. 662.
MRS. CEGAVSKE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Mr. Goldwater were not present for the vote.)
********
S.B. 248: Makes supplemental appropriation to Department of Museums, Library and Arts for unanticipated additional utility costs, personnel costs and purchasing assessments. (BDR S-1255)
Mr. Stevens said S.B. 248 made a supplemental appropriation to the Department of Museums, Library and Arts for a number of budget accounts that had shortfalls in the current biennium, mainly for utility shortfalls, and totaled $35,791. It was amended in the Senate upward from $15,220, which was the amount listed in The Executive Budget.
MR. HETTRICK MOVED TO DO PASS S.B. 248.
MRS. CHOWNING SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Perkins, Mr. Dini, and Mr. Goldwater were absent for the vote.)
********
There being no further business before the committee, Chairman Arberry adjourned the meeting at 3:03 p.m.
RESPECTFULLY SUBMITTED:
Lila Clark
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: