+MINUTES OF THE

SENATE Committee on Finance

 

Seventy-First Session

May 7, 2001

 

 

The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:02 a.m., on Monday, May 7, 2001, in Room 2134 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Attendance Roster.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

COMMITTEE MEMBERS PRESENT:

 

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal Jr.

Senator Bob Coffin

Senator Bernice Mathews

 

GUEST LEGISLATORS PRESENT:

 

Senator Maurice E. Washington, Washoe County Senatorial District No. 2

Assemblywoman Barbara K. Cegavske, Clark County Assembly District No. 5

Senator Mike McGinness, Central Nevada Senatorial District

 

STAFF MEMBERS PRESENT:

 

Gary L. Ghiggeri, Senate Fiscal Analyst

Bob Guernsey, Principal Deputy Fiscal Analyst

Larry L. Peri, Senior Program Analyst

Rick Combs, Program Analyst

Jennifer Ruedy, Committee Secretary

 

OTHERS PRESENT:

 

Michael Torvinen, Administrative Services Officer IV, Division of Mental Health and Developmental Services, Department of Human Resources

Joel Pinkerton, Budget Analyst, Budget Division, Department of Administration

Sam Folio, Executive Director, Lake Tahoe Shakespeare Festival

Susan E. Scholley, Senior Research Analyst, Research Division, Legislative Counsel Bureau

Susan Boskoff, Executive Director, Nevada Arts Council, Department of Museums, Library and Arts

Judith Winzeler, Executive Director, Nevada Humanities Committee

Keith Rheault, Ph.D., Deputy Superintendent for Instructional, Research, and Evaluative Services, Department of Education

Jack McLaughlin, Superintendent of Public Instruction, Department of Education

Martin Bibb, Lobbyist, Retired Public Employees of Nevada

Robert S. Hadfield, Lobbyist, Nevada Association of Counties

Bobbie Gang, Lobbyist, American Association of University Women, and Nevada Women’s Lobby

Sylvia Halgrimson, Lobbyist, American Association of Retired Persons (AARP)

Caroline Ford, Assistant Dean, University of Nevada School of Medicine and Director, Nevada State Office of Rural Health

Robin Keith, Lobbyist, Nevada Rural Hospital Project Foundation

Steve L. Tognoli, District Chief, Mason Valley Fire Protection District

Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy, Department of Human Resources

K. Neena Laxalt, Lobbyist, Nevada Propane Dealers’ Association

Russell Law, P.E., Chief Operations Analysis Engineer, Nevada Department of Transportation

Danny L. Thompson, Lobbyist, Nevada State AFL-CIO (American Federation of Labor and Congress of Industrial Organizations)

Deborah K. Cahill, Lobbyist, Nevada State Education Association (NSEA)

Ray Bacon, Executive Director, Nevada Manufacturers Association

James T. Richardson, Lobbyist, Nevada Faculty Alliance

Frankie Sue Del Papa, Attorney General

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

 

Senator Raggio indicated the committee would process bills not on the agenda prior to addressing the bills on the agenda.

 

SENATE BILL 247:  Makes supplemental appropriation to Department of Human Resources for unanticipated shortfalls and expenses at Nevada Mental Health Institute and in Division of Child and Family Services. (BDR S-1257)

 

Gary L. Ghiggeri, Senate Fiscal Analyst, indicated Senate Bill (S.B.) 247 was heard by committee on March 7, 2001.

 

Bob Guernsey, Principal Deputy Fiscal Analyst, provided two handouts to the committee.  The first handout was a memorandum from Mike Torvinen (Exhibit C). The second handout was a packet of information regarding S.B. 247 compiled by Mr. Guernsey (Exhibit D).  He stated the Division of Child and Family Services and the Nevada Mental Health Institute have experienced difficulty compiling final numbers.  He said Michael Torvinen, Administrative Services Officer IV, Division of Mental Health and Developmental Services, Department of Human Resources, is present to introduce proposed amendments to the bill.

 

Mr. Torvinen stated this bill was requested to reconcile some shortfalls in medication and utility expenditures at the Nevada Mental Health Institute.  The original amount requested in the bill was $435,590, but recent estimates indicate the required amount has changed, he added.  He directed attention to page 4 of Exhibit C, which is a spreadsheet indicating a projected deficit for fiscal year (FY) 2001 of $427,471. 

 

Senator Raggio inquired whether that figure replaced the previous request of $435,590.

 

Mr. Torvinen responded $427,471 is the overall estimated deficit including the estimated shortfalls on revenues and surpluses in some of the other categories.  He said the division estimates a shortfall of approximately $566,000 in medications and utilities without taking into consideration the net effect of surpluses in some of the other categories.

 

Senator Raggio asked Mr. Torvinen to clarify the amount the division requires.

 

Mr. Torvinen responded $435,590 would suffice the division for the current FY with minimal, if any reversion to General Fund. 

 

Senator Raggio requested the recommendation from staff.

 

Mr. Guernsey stated he would recommend appropriating the amount originally requested, $435,950.  He further commented Mr. Torvinen should address the Southern Nevada Adult Mental Health Services (SNAMHS) Life Safety issue, which will cost approximately $350,000.  He indicated the issue could be addressed in this bill or through an alternative means that Mr. Torvinen would present.

 

Senator Raggio recalled hearing testimony regarding the SNAMHS Life Safety issue, and he questioned whether it had been addressed to any extent at this point.  Mr. Guernsey said it is not accounted for at the present time.

 

Senator Raggio asked Mr. Torvinen for his suggestions regarding the matter.

 

Mr. Torvinen commented the State Public Works Board estimated the cost to complete the life-safety retrofit is $350,000.  He said the Division of Mental Health and Developmental Services asked the board repeatedly whether that figure is final, and the response has always been “yes.”  He stated the division has sufficient funds in their FY 2001 budget to address the issue, but the division lacks the authority to carry those funds past June 30, 2001.  He noted the first suggestion is to include $350,000 for this purpose in S.B. 247.  He added the FY 2001 reversion would be more than $1 million in southern Nevada Adult Mental Health Services alone.  He articulated the Budget Office has indicated they do not support adding the $350,000 to S.B. 247 at this time.

 

Senator Raggio stated this is something that should be completed expeditiously because it is a Life Safety issue.

 

Joel Pinkerton, Budget Analyst, Budget Division, Department of Administration, stated this problem has existed for some time, and the Division of Mental Health and Developmental Services had indicated the problem would be addressed this fiscal year within its existing budget.  He proposed the division should attempt to address this issue within its existing budget and if necessary, the division could return to the Interim Finance Committee (IFC).

 

Senator Raggio stated the problem is the division is stating they cannot complete the work within FY 2001.  Mr. Pinkerton responded, “I am sorry, 2002 or 2003.”

 

Senator Raggio pointed out it is not included in the budget proposal for the next biennium.  Mr. Pinkerton replied it is not included in the budget proposal because the Budget Division would like the Division of Mental Health and Developmental Services “to try to carve that money out of their existing budget.”

 

Senator Raggio inquired where the division might be able to “carve it from.” 

 

Mr. Pinkerton responded the Division of Mental Health and Developmental Services is estimating a $1.6 million reversion for FY 2001, so he is confident that it is a $30 million budget.  He stated, “This represents about 1 percent of their total budget.”

 

Senator Raggio questioned whether Mr. Pinkerton thought Life Safety issues should be deferred. 

Mr. Pinkerton responded without hesitation, “Absolutely not.”  He restated his belief the issue could be addressed within the current budget.

 

Senator Raggio asked whether there was any reason not to grant the Division of Mental Health and Developmental Services the authority to proceed at this time instead of waiting.

 

Mr. Pinkerton responded the division has had authority to proceed for some time.  He stated it is a State Public Works Board issue, and the Budget Division had hoped it would be resolved this fiscal year. 

 

Senator Coffin inquired whether the Life Safety issue involved only one-story buildings. 

 

Mr. Torvinen responded the hospital is a three-story building.  He pointed out the problems began with the discovery of a smoke-damper problem.  He explained numerous other Life Safety issues were discovered upon opening up the ceiling to resolve the smoke-damper problem.

 

Senator Coffin inquired why the reversion was so large.  He questioned what specific areas of funding have not been spent.

 

Mr. Torvinen stated personnel services represented the bulk of the unexpended funds because numerous vacancies have persisted.  He directed attention to page 12 of Exhibit C for a line item review of the operating statement for SNAMHS.  He noted SNAMHS has a residential treatment contract with Mojave Mental Health that was budgeted for 16 beds, yet they never attained a license for more than 10 beds.  Consequently, money will be reverted from the savings from that contract, he added.  He noted funding in the areas of housing and medications will also be reverted.

 

Senator Coffin inquired whether SNAMHS had a waiting list for their services.  Mr. Torvinen responded there were no waiting lists for residential services at SNAMHS.

 

Senator Raggio requested discussion of the amendments Mr. Torvinen addressed in a memorandum dated April 25, 2001, which is included in Exhibit C.

 

Mr. Guernsey responded the Division of Mental Health and Developmental Services is requesting authority to sole source with the contractor who initiated the necessary repairs on the smoke-damper problem.  He commented the contractor found additional problems upon attempting to perform the initial repairs, which resulted in the Life Safety issues. 

 

Senator Raggio questioned the benefit of a sole source for this matter.

 

Mr. Torvinen responded that the contractor originally retained to resolve the smoke‑damper problem is familiar with the Life Safety problems.  He explained Health Care Financial Administration (HCFA) has given SNAMHS a licensure extension until March 31, 2002.  He directed attention to the last two pages of Exhibit C for project timeline projections reflecting the March 31, 2002 deadline.  He said the projections are based on estimates provided by the State Public Works Board.  He commented the first projection reflects a design phase of 90 days, which would be necessary if a new contractor is hired.  He said the 90-day design phase, combined with the deadline of March 31, 2002, would have required the project starting during January 2001.  He noted the second projection allows for a reduction of 30 days in contract negotiation and 30 days in the design phase because it provides for use of the contractor who performed the initial work.  He said the second projection indicates the project could be completed by the deadline if it had started on April 16, 2001.

 

Senator Raggio inquired whether the second projection was based on the sole source option.  He further asked whether the work of the initial contractor had been satisfactory.

 

Mr. Torvinen responded the second projection was based on the sole source option, and he said he believes the work has been satisfactory up to this point.

 

Senator Raggio asked Mr. Guernsey whether subsection 1 requires adjustment.  Mr. Guernsey said he had just confirmed with Larry L. Peri, Senior Program Analyst, and it appears the original amount in the bill is satisfactory.  He suggested the committee might want to get verification from the Division of Child and Family Services. 

 

Mr. Peri stated the amount of $2.7 million is sufficient.  He indicated representatives from the Division of Child and Family Services are present to verify that if necessary.

 

Senator Raggio questioned whether there were adjustments in addition to the $350,000, the reversion, and the sole source.  He asked whether there were any necessary adjustments for Nevada Mental Health Institute for medications and utilities.

 

Mr. Guernsey stated the three problems with the Nevada Mental Health Institute are medications, utilities, and revenue collection.  He said all three of those items could be resolved utilizing savings in other categories of the budget.

 

Senator Raggio suggested an amendment to the bill to add $350,000 designated for the Life Safety retrofit at Southern Nevada Adult Mental Health Services (SNAMHS).  He further recommended the authority to enter into a sole source contract for the retrofit.

 

SENATOR O’DONNELL MOVED TO AMEND S.B. 247 AS RECOMMENDED BY CHAIRMAN RAGGIO.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Senator Raggio indicated he would accept a motion to do pass the bill with the amendment.

 

SENATOR MATHEWS MOVED TO DO PASS AS AMENDED S.B. 247.

 

SENATOR JACOBSEN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Senator Raggio inquired whether Mr. Pinkerton had any objections to the action taken on S.B. 247.  Mr. Pinkerton did not indicate any objection.

 

SENATE BILL 505:  Makes various changes relating to transfer of responsibility for dairy inspection program to state dairy commission of department of business and industry. (BDR 51-401)

 

Mr. Ghiggeri indicated the committee heard this bill on April 25, 2001.  He said it is a policy decision whether the committee would like to allow the State Dairy Commission to assume the dairy inspection program previously administered by the Health Division.  He said the State Dairy Commission would require an adjustment to their budget to provide 3 additional positions:  1 Rating and Survey Officer and 2 Dairy and Milk Inspectors for southern and northern Nevada.  He said the fiscal note might require additional adjustments, but those could be addressed at IFC because the inspection program would not begin until after July 1, 2001.  He added the State Dairy Commission is not funded through the General Fund.

 

Senator Raggio inquired whether the adjustments were all funded by assessments.  Mr. Ghiggeri responded affirmatively.

 

Senator Raggio inquired whether the bill required any amendments.  Mr. Ghiggeri indicated no amendments were needed, only further adjustment to the fiscal note.  Mr. Ghiggeri stated staff could work with the commission on adjusting the fiscal note and present it to IFC following the close of the legislative session.

 

Senator Raggio suggested he would accept a motion to process the bill with the understanding staff will continue to work on the fiscal note for presentation to the IFC.

 

SENATOR O’DONNELL MOVED TO DO PASS S.B. 505.

 

SENATOR JACOBSEN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

SENATE BILL 170:  Creates endowment fund for arts and humanities and revises powers and duties of state arts council. (BDR 18-133)

 

Sam Folio, Executive Director, Lake Tahoe Shakespeare Festival, stated his organization receives funding from the public sector in addition to grants from the Nevada Arts Council and E. L. Wiegand Foundation.  He noted his organization provided a $2 million facility to the Nevada State Parks this summer with no cost to the Legislature.

 

Mr. Folio stated previously many visitors to Lake Tahoe happened to attend the Lake Tahoe Shakespeare Festival whereas now the primary reason many people visit Lake Tahoe is to attend the festival.  He anticipates 30,000 people will attend the festival this year.  He noted 53 percent of the 27,000 people who attended the festival last year were from outside Nevada.  He noted the out-of-state visitors were from 40 different states.  He said northern Nevada is becoming an Arts destination, and S.B. 170 would assist in supporting the Arts in northern Nevada.

Mr. Folio directed attention to subsection 2 of Section 2 of S.B. 170, which states the Nevada Arts Council “may accept gifts, grants and donations from any source for deposit in the fund.”  He stated he believes this language is very important.  He commented he does not want the requested $5 million appropriation included in Section 6 of the bill to prevent passage of the bill.  He explained the creation of an endowment fund for arts and humanities is very important even without this funding, which appears to be problematic this session because of budgetary constraints.

 

Senator Raggio questioned whether Mr. Folio recommended maintaining Sections 2, 3, and 4 of S.B. 170.  Mr. Folio agreed and deferred further comment to Senator Rawson.

 

Senator Rawson explained this bill was intended to alleviate the large number of individual appropriation requests from the Arts and Humanities Community each session.  He noted it is difficult for the state to respond to the requests from the hundreds of groups in this developing field.  He said numerous other states have established similar endowment funds, which have been very successful in organizing and funding diverse groups.  He noted the bill was proposed to include a $5 million trust fund to be used by the state in cases of emergency, but otherwise intended to stimulate the Arts. 

 

Senator Rawson provided an amendment (Exhibit E) to S.B. 170, which includes the $5 million appropriation.  He indicated the appropriation should probably be deleted in order to pass the bill this session.

 

Senator Raggio clarified Senator Rawson is proposing to amend the bill as provided in Exhibit E but to also delete Section 6, which provides for the $5 million appropriation.

 

Senator Rawson agreed.  He said it is very important to at least establish the framework for the endowment fund, and indicated he would be willing to make a personal donation to help establish the fund.

 

Mr. Ghiggeri requested the committee defer action on this bill until Wednesday, May 9, 2001, to allow staff to review the amendment and confer with the Department of Museums, Library and Arts.

 

Senator Raggio agreed to defer action until Wednesday.

 

Senator Rawson agreed.  He also reiterated the importance of passing the bill regardless of the appropriation.

 

Susan Boskoff, Executive Director, Nevada Arts Council, Department of Museums, Library and Arts, thanked Senator Rawson for introducing S.B. 170.  She stated 14 other states currently have cultural trusts specifically designed to address the needs of the citizenry and their cultural interests.  She urged support of this bill, even without the appropriation, to begin development of a new mechanism to provide financial support of community cultural activities.

 

Judith Winzeler, Executive Director, Nevada Humanities Committee, provided a written statement (Exhibit F) in support of S.B. 170.

 

Senator Raggio stated action on the bill would be deferred until Wednesday to allow staff the opportunity to review the amendment.  He closed the hearing on S.B. 170 and opened the hearing on S.B. 208.

 

SENATE BILL 208:  Makes various changes to provisions concerning public dental health. (BDR 40-738)

 

Senator Rawson stated this is another important bill that he has worked on a great deal, but it includes appropriations that he believes are unlikely to be funded in light of the budgetary limitations.  He said this bill addresses public dental health concerns in Nevada.  He said the State Dental Health Officer was lost following the 1981 budget crisis, and the position still has not been replaced.  He noted Nevada is one of only two states without a State Dental Health Officer who would serve as an interface to the available federal programs, monitor national trends, and handle state information.  He commented there is a national association of state and territorial dental health officers that are very active in following trends and pursuing funding for the states.  He added Nevada contributes very little to the national association because there is no one to develop statewide statistics.  He said, “In that public health community, we are looked at as kind of a backward or frontier area.”

 

Senator Rawson articulated that Nevada has significant dental-health concerns.  He commented Nevada was singled out in the Surgeon General’s Report on numerous occasions as being the very worst in the country in addressing specific health concerns.  He added that Health Care America has also rated Nevada very poorly.  He said he believes the criticism of Nevada stems from the fact that one-third of the state’s population has no access to health care.  He stated Nevada maintains a very high standard of dental care for those who can afford access to care.

 

Senator Rawson acknowledged there are numerous bills this session that address dental care, and many of them have created a great deal of turmoil.  He said this bill would have a “stabilizing influence” and help to organize dentistry in the state.  He added, “It would tend to kind of stabilize the kinds of runs you see on things like reciprocity.”

 

Senator Raggio stated he had seen a full-page advertisement in the paper that same day regarding a bill on reciprocity in the dental health care industry in Nevada.  Senator Rawson responded that the advertisement is concerning S.B. 133.

 

Senator Rawson stated the Health Division has been involved in various prevention programs related to dental health.  He said the State Dental Health Officer would advise the Health Division on those programs, assess the needs of the population, make recommendations based on their assessment, and supervise the activities of the State Dental Hygienist.  The bill creates a State Dental Hygienist that would work in schools, community centers, hospitals, and nursing homes, he added.  He clarified this would help develop the public health aspects of dentistry and dental hygiene. 

 

Senator Rawson explained that the appropriation provides for 1 State Dental Health Officer, 1 clerical position and 1 State Dental Hygienist.  He noted the bill establishes the curriculum design to create a public health dental hygiene degree.  He said the appropriation is approximately $284,000 annually plus the cost of the curriculum study, which would make the total appropriation $818,000.  He said careful review of the bill has eliminated all but the essential elements, and the bill has a broad spectrum of support in its present form.  He suggested the appropriation be removed to process the bill if it is absolutely necessary, so the authorities could be created.  Hopefully funding could be provided when it becomes available, he added.

 

Senator Raggio stated the bill would need to be amended to eliminate the appropriation.  Senator Rawson acknowledged the language would need to be amended and agreed to do so.

 

Senator Raggio closed the hearing on S.B. 208 and opened the hearing on S.B.313.

 

SENATE BILL 313:  Makes appropriation to Bill of Rights Institute to provide training for teachers in this state who teach courses in United States Constitution and Bill of Rights. (BDR S-1235)

 

Senator Maurice E. Washington stated S.B. 313 includes a $40,000 appropriation.

 

Senator Raggio requested further information regarding the Bill of Rights Institute. 

 

Senator Washington stated Victoria Hughes organizes the Bill of Rights Institute.  He noted Ms. Hughes provided testimony to the Legislative Education Committee during the summer of 2000, which the committee members found very appropriate.  He said several states have successfully adopted her program to teach the founding documents to teachers who then teach the students.  He said he believes it is important for students to understand and appreciate the importance of the founding documents to the nation as a whole.

 

Senator Neal inquired whether the bill is necessary.  He expressed his desire for this type of education for the Legislative body in lieu of the students.

 

Senator Washington stated he would prefer to begin with the students.

 

Senator Jacobsen inquired whether teachers currently receive this type of education.  Senator Washington responded many teachers have indicated they would appreciate further training regarding the founding documents.

 

Senator Jacobsen commented he believes this education is very important for all students.

 

Senator Coffin questioned how often students need these lessons to be repeated in order to retain a good working knowledge of the founding documents.  He questioned the need for this program when similar education already exists in the schools.

 

Senator Washington responded that repetition is fundamental for the retention of material.  He said he believes students who have a better understanding of the founding documents will have a greater appreciation for this country.

 

Senator Raggio closed the hearing on S.B. 313 and opened the hearing on S.B. 360.

 

SENATE BILL 360:  Makes various appropriations. (BDR S-1227)

 

Senator Rawson stated this bill includes several appropriations, so it may need to be indefinitely postponed because of the budgetary limitations.  He explained the first appropriation is to establish “curriculum necessary for students to earn a bachelor’s degree in human services relating primarily to substance abuse counseling.”  He explained problem gambling and other substance abuse issues prompted this bill because the treatment is similar for all of these addiction issues.  He stated that S.B. 335, which was heard by the committee on May 4, 2001 addresses problem gambling and has a potential funding source.  He suggested the committee might include the first appropriation of S.B. 360 in S.B. 335 if S.B. 335 is processed. 

 

SENATE BILL 335:  Enacts provisions pertaining to problem gambling. (BDR 41‑1105)

 

Senator Rawson articulated the second appropriation, in the amount of $10,000 provided by S.B. 360, is for the construction of a marker on Mount Charleston to commemorate the crash of “the silent heroes of the Cold War.”

 

Senator Rawson stated the third appropriation, in the amount of $290,000 provided by S.B. 360, is for specialized equipment to allow the processing of evidence and the storing of it digitally.  He commented the appropriation is to be distributed among the crime laboratories of the Washoe County Police Department and the Clark County Metropolitan Police Department, the Investigation Division of the Department of Motor Vehicles and Public Safety, and the Criminal Justice Department of the University and Community College System of Nevada.  He noted the appropriation would include a training program that would integrate all four of the recipients.  He said he did not anticipate funding being available for this appropriation this session.

 

Senator Rawson indicated the fourth appropriation of $35,000 included in S.B. 360 provides for establishment of a program to promote literacy for elementary pupils after school within Clark County School District.  He explained this appropriation would fund a van, which is a traveling theater that would visit each of the elementary schools in the school district.

 

Senator Raggio questioned whether the van could be provided for by the Governor’s proposal on literacy.  Senator Rawson acknowledged that is a possibility.

 

Senator Rawson stated all the issues addressed by S.B. 360 are important and similar to many other issues that will not receive funding this session.  He reiterated that the first appropriation might be included in S.B. 335.

 

Senator Raggio inquired whether the state had a historical marker program that could possibly fund the marker on Mount Charleston.  Senator Rawson stated there is a historical marker program that could possibly put the marker on Mount Charleston, but he thought the program already had a backlog for new markers.  Senator Rawson said the Mount Charleston marker could be added to the waiting list.

 

Senator Raggio closed the hearing on S.B. 360 and opened the hearing on S.B. 346.

 

SENATE BILL 346:  Creates position of coordinator of requests for grants in department of education. (BDR 34-1218)

 

Assemblywoman Barbara K. Cegavske testified in support of S.B. 346.  She said she believes the coordinator of grant requests should be a full-time position.  She explained that two special education grants could provide an additional $500,000 to the Department of Education, and the coordinator could eventually pay for his or her own salary through grant awards.  She said there are numerous grant sources that a full-time coordinator could potentially access, which would be a tremendous asset to the state of Nevada.  She commented that Nevada has probably lost a great deal of potential income in the past by not actively pursuing grants to offset educational needs in many areas of education, including special education.

 

Senator Raggio inquired whether the position provided for in the bill is full-time or part-time.  Mrs. Cegavske responded she believes the position is full-time.

 

Senator Raggio asked Keith Rheault, Ph.D., Deputy Superintendent for Instructional, Research, and Evaluative Services, Department of Education, to address this issue.

 

Dr. Rheault provided a fiscal note (Exhibit G) prepared for 1 Education Consultant Grant Coordinator at the grade 39-4 level.  He indicated the position should require a master’s degree and substantial writing experience, so he opted to recommend a higher-grade level for the position.  He pointed out the position would require $89,692 in FY 2002 and $98,972 in FY 2003, with minimal travel and operating expenses for the position.  He noted the position would begin October 1, 2001, which would allow 3 months of salary savings for FY 2002. 

 

Senator Raggio inquired whether Dr. Rheault had provided the fiscal note to staff prior to today’s meeting.  Dr. Rheault responded he had faxed it to Susan E. Scholley, Committee Policy Analyst, over the weekend.  Ms. Scholley indicated she had received the fiscal note.

 

Mrs. Cegavske reiterated her support for the bill.  She said she believes the salary could be decreased from the figures provided by Dr. Rheault with the intention of offering a bonus contingent on the amount of grant funds secured.  She commented bonuses are a common form of compensation for these types of positions. 

 

Senator Raggio asked Mrs. Cegavske to provide specific information regarding the inclusion of a bonus.  She agreed to comply with his request.

 

Senator Neal said, “A two point increase in gross gaming tax would bring in approximately $190 million.”

 

Senator Jacobsen questioned the need for 1 position specifically designated to coordinate grant requests.

 

Mrs. Cegavske responded grant proposal writing has become very specialized necessitating an individual with experience and sufficient time to dedicate to the process.  She acknowledged the state of Nevada has never had an individual specifically designated for this task as have many other states.  She added Clark County School District has been successful in securing grants, but those have been only for that district.  She said she would like to see a broader area of the state benefit from grant funds.  She added many states staff an entire office for the sole purpose of writing grants for their education system.  Nevada has been slow to respond to this common practice, she remarked.

 

Senator Raggio questioned whether a similar position had ever been requested in Nevada.  Mrs. Cegavske responded she did not believe so.  Mr. Pinkerton stated he was not sure.  Dr. Rheault stated a grant position was requested in the budget in 1997 but not in the budget presented in 1999 or 2001.

 

Mrs. Cegavske commented the Department of Education has applied for 7 grants, and there are approximately 150 grants available from the federal government.

 

Senator Raggio stated testimony heard on May 4, 2001 indicated these are competitive discretionary grants, and each state is limited in the number they can receive.  Mrs. Cegavske noted in discussion with the federal government regarding grants, the federal government indicated Nevada was on the top of several lists for grants because of its population growth.  Mrs. Cegavske added Nevada never applied for those grants.

 

Jack McLaughlin, Superintendent of Public Instruction, Department of Education, stated S.B. 346 is an essential part of a strategy for the department to acquire additional funding.  He said there is an informational need within the department regarding the identification of grant sources, determining eligibility, and writing the proposals.  He voiced his belief that a partnership with the Legislature needs to be formed for continued efforts, which would also involve the Interim Finance Committee (IFC).  For example, many grants require matching funds, which would need to be addressed by the Legislature, he added.  He said a large part of securing a grant involves the politics of pursuing the grant by any means necessary.

 

Senator Raggio stated funding the position is uncertain this session, but Mr. McLaughlin should continue to pursue this and form the necessary partnership with the Legislature.

 

Mr. McLaughlin noted he is working to ensure a collaborative effort in the area of grants.  Senator Raggio encouraged Mr. McLaughlin to include Mrs. Cegavske in his efforts.

 

Senator Raggio closed the hearing on S.B. 346 and opened the hearing on S.B. 402.

 

SENATE BILL 402:  Creates advisory task force on long-term care. (BDR 17-972)

 

Senator Rawson pointed out the Medicaid budget directs more than $600 million toward long-term care.  He continued there are 107,000 public employees including all federal, military, and local government employees and 40,000 state employees.  He said national statistics indicate one-fourth of those employees will ultimately access long-term care.  He added statistics show many of those people will outstrip their financial resources within one year paying for long-term care and subsequently rely on Medicaid for their long-term care.  He noted the state is facing a liability of billions of dollars within the next decade for long-term care.

 

Senator Rawson explained S.B. 402 creates an advisory task force to examine long-term care issues.  He noted the task force would share similar powers and duties with the Interim Committee on Health Care.  He said the primary difference between the two is the task force would have non-legislative members, but the Chairman of the Interim Committee on Health Care could include non-legislative members on task forces created by the interim committee.  Therefore, he said he believes the Interim Committee on Health Care could address the issues of long‑term care within its own budget.  He commented long-term care is an important issue he would like to see addressed.  He offered to propose an amendment to include long-term care issues in the Interim Committee on Health Care rather than risk losing the entire bill because of the budgetary constraints this session.

 

Senator Raggio responded the amendment appears to be a reasonable suggestion.

 

Martin Bibb, Lobbyist, Retired Public Employees of Nevada, testified in support of S.B. 402 and all efforts to keep the issue of long-term care before the legislators.  He commented his organization supports the provision in the bill requesting a waiver from the federal government to eliminate the requirement that elderly persons impoverish themselves as a condition of receiving assistance for long-term care.  He pointed out the state of California offered a self-funded program for long‑term care insurance 6 years ago, and there are now 145,000 people in the plan.  He noted the California plan would be the sixth largest long-term care insurer in the nation if it were compared to private plans.  He said he believes the overwhelming response in California is evidence of the importance of this issue.  He urged the committee to continue addressing this issue during the interim in any way possible.

 

Robert S. Hadfield, Lobbyist, Nevada Association of Counties (NACO), stated NACO is a partner with the state of Nevada in providing long-term care services to residents in the NACO communities.  He said long-term care is a growing problem particularly in smaller counties with declining tax bases.  He explained the smaller counties, with less ability to pay for long-term care, also have nearly three times the number of patients per capita than the urban areas.  He said he believes the following four counties will not be capable of making their Medicaid match payment this year:  White Pine, Pershing, Lincoln and Mineral County.  He said the Legislature has appropriated funds every two years into an account to enable those counties to make their Medicaid match payments.

 

Mr. Hadfield mentioned his mother-in-law is an excellent example of the need to address long-term care now before it balloons into an even larger issue.  He stated she pays $4,000 each month for her assisted living arrangements, and she will not be eligible for assistance until she exhausts $400,000 of personal savings.  He noted she is just one of many people who will eventually be impoverished before becoming the responsibility of the county in which she lives.  He stated his support to continue addressing the issue through the Interim Committee on Health Care and offered the assistance of NACO.

 

Bobbie Gang, Lobbyist, Nevada Women’s Lobby, stated women tend to be the caregivers of elderly relatives when they require long-term care.  She said there are a myriad of issues that need to be addressed in regard to long-term care, and many of those issues were discussed during the past interim.  She commented her organization would prefer to have a separate committee or task force specifically designated to study long-term care.  She added that she hopes there will be a specialized focus if budgetary constraints necessitate the study be included in the Interim Committee on Health Care.

 

Senator Rawson stated the Interim Committee on Health Care will be very busy during the 2001 to 2002 interim, so he would prefer a separate task force, budget permitting.

 

Senator Mike McGinness mentioned he was Chairman of the Interim Committee on Health Care during the 1999 to 2000 interim.  He agreed with Senator Rawson that a separate committee or task force would be ideal but the ultimate goal is to continue discussion in some form. 

Sylvia Halgrimson, Lobbyist, American Association of Retired Persons (AARP), testified in support of continuing the important work of the past interim committee on long-term care.

 

Senator Jacobsen questioned whether there were any efforts at the federal level concerning long-term care.  Senator McGinness responded the issue is too large for the federal government to address alone, but he believes there is concern at the federal level.

 

Senator Raggio closed the hearing on S.B. 402 and opened the hearing on S.B. 403.

 

SENATE BILL 403:  Enacts Frontier and Rural Health Care Improvement Act of 2001.  (BDR S-942)

 

Senator Rawson stated rural health care is a significant problem for 15 of the state’s counties.  He noted traumas continue to occur and babies continue to be born in the rural areas, thereby creating a need for primary care in all of the rural areas.  He said the University of Nevada School of Medicine is experiencing difficulty maintaining some of the medical school’s residency programs this year because of a shortage of funds.  He noted the appropriations included in this bill are approximately $3 million to address serious rural health care infrastructure problems.  He commented the problems are serious, and the bill should be processed toward the end of the session in the hope some funding will be identified.

 

Caroline Ford, Assistant Dean, University of Nevada School of Medicine and Director, Nevada State Office of Rural Health, provided a written copy of her testimony to the committee (Exhibit H).  She explained S.B. 403 is a product of the interim study initiated by Assembly Concurrent Resolution (A.C.R.) 36 of the Seventieth Session.

 

ASSEMBLY CONCURRENT RESOLUTION 36 OF THE SEVENTIETH SESSION:  Directs Legislative Commission to conduct interim study of availability of health care in rural areas of this state. (BDR R-1695)

 

Ms. Ford said she believes it is important to structure this bill to provide “empowering language” within the Nevada Revised Statutes (NRS) that would address four major categories of rural health care:  education and training, special population needs, health services delivery, and financing.  She noted the ability to reference NRS in the future when developing programs, proposing enhancements or augmenting existing programs will be essential.  She proceeded to discuss the proposals included in the bill.

 

Ms. Ford stated the first proposal is to establish an Emergency Medical Services Training Academy that would be operated through the Northeastern Nevada Area Health Education Center in partnership with Great Basin Community College in Elko, Nevada.  She said the coursework would be distributed via compressed video to at least eight different training sites.  She pointed out Emergency Medical Services is a volunteer activity in rural Nevada, and the volunteers are not paid as their counterparts in urban areas.  She commented the tour bus crash that occurred outside of Tonopah in September 2000, is an excellent example of the crucial need for this training.  She noted the coursework needs to be tailored to the schedules and skills needs of the volunteers as most of them have full-time jobs in their remote communities.

Ms. Ford stated the appropriation request for the Emergency Medical Services (EMS) Training Academy provides for 2 EMS training positions and associated operational training costs.  She explained the EMS Training Academy is attempting to coordinate efforts with the existing training programs to complement rather than duplicate programs.

 

Ms. Ford articulated the second proposal included in the bill is to fund the purchase of automatic external defibrillators, which provide an electrical shock to the patient to normal cardiac rhythm after an event of sudden cardiac arrest.  She noted the bill proposes to have the EMS Training Academy distribute the automatic external defibrillators and offer equipment training and cardiopulmonary resuscitation (CPR) training at the time of distribution.  She stated a personal friend of hers, who was a state senator in Arizona, died two weeks ago in his legislative office after going into cardiac arrest.  She noted CPR was immediately administered to him, but automatic external defibrillators were not available.  She commented she believes the use of an automatic external defibrillator (AED) might have saved his life.

 

Senator Raggio inquired about the cost of AEDs. 

 

Ms. Ford responded that costs range from very basic lower-end models to higher‑end models with software attached to provide data feedback to the user.  She indicated the cost for a base model AED would be approximately $4,000 with the state-purchasing discount for volume.  She noted a top of the line AED would cost approximately $12,000, but the $4,000 model is good quality and would meet the needs of the EMS Training Academy.

 

Ms. Ford indicated the third proposal included in the bill is to establish a physician assistant training program.  She articulated the University of Nevada School of Medicine has operated a satellite program with the University of Washington MEDEX Northwest.  She explained three students each year begin the MEDEX Northwest program where they receive coursework training before returning to Nevada for clinical training.  She explained the students were originally required to be from rural and medically underserved areas, but the program has been expanded to include students from urban areas as is necessary to provide three students each year.  She noted originally the students who participated in this program were obligated to serve 2 years in a medically underserved area.

 

Ms. Ford said the proposal in the bill is to make the program “a true satellite, which means it would begin as an accredited program the day it opens, as it would run under the accreditation of the MEDEX Northwest program.”  She noted a provision in the program would be that 50 percent of the training positions would be obligated to provide clinical services to medically underserved communities for a 2‑year period.  She said she believes there are very few programs nationwide with a mandate to provide this type of service to medically underserved communities, but the need in those communities justifies the requirement. 

 

Ms. Ford discussed the four key points to the proposed program.  She said the program participants would be obligated to provide two years of uncompensated clinical services and accept Medicaid and Medicare Part B on assignment.  She pointed out the second key point is the participants would only train in primary care.  The third point she mentioned is recruitment of participants and that the curriculum would encourage workforce diversity.  She explained the program focuses on participants from Washington, Alaska, Idaho, and Montana who also are pursuing physician assistant training as a second career choice.  The participants are typically older and from very remote areas.  She noted the oldest student currently entering the program is 56-years old, and the average age of the students is 33.  She added the fourth point is the development of a Geriatric Certification interdisciplinary training track.

 

Senator Raggio asked whether the physician’s assistant program is currently in place and operating through the University of Washington.  Ms. Ford responded affirmatively.  Ms. Ford clarified three students from Nevada participate in the program each year through a cooperative agreement, which does not require any exchange of money.

 

The fourth proposal included in the bill is for the establishment of a rural mental health telemedicine network within the state of Nevada rural mental health centers, Ms. Ford continued.  She explained the bio-terrorism funds have enabled the connection of the state of Nevada rural mental health centers, and the bill proposes to link the centers to the University of Nevada School of Medicine in order to provide access to a psychiatrist.  She explained this proposal does not require a large fiscal note because it utilizes equipment already in place.

 

Ms. Ford stated the fifth proposal in the bill is to enhance the delivery of perinatal health care services by supporting the addition of 2 obstetrical nurse practitioners linked to a developed network of rural and urban physicians and facilities.  She clarified the 2 new positions are an enhancement not included in The Executive Budget.  She mentioned the 2 positions would provide obstetrical care to rural communities currently without access to any form of obstetrical care.

 

Ms. Ford addressed the sixth proposal, which allows for the expansion of the Nevada Health Service Corps loan repayment program.  She pointed out that at the time she requested this program during the 1999 Legislative Session, she had promised the committee she would seek leveraging the program with other sources of funding.  She directed attention to the last page of her handout (Exhibit H) that details the amount of funding received from other sources.  The requested enhancement would expand the program to include emergency services personnel, dentists, dental hygienists, and nurses, she added.  She explained the program is currently offered only to primary care physicians, nurse practitioners, physician assistants, and certified nurse midwives.

 

Senator Raggio asked her to clarify what Nevada Health Service Corps currently provides.  Ms. Ford responded it is a loan repayment program that receives federal matching funds and is partnered with Western Interstate Commission for Higher Education (WICHE) in Nevada.  Ms. Ford explained the program would not change the service provided; it will only expand the variety of health professions that qualify for the program.

 

Ms. Ford stated the seventh proposal in the bill is to augment the Capital Loan Pool.  She stressed the importance of making capital available to bring facilities up to Life and Safety codes, support renovations and new constructions.  She pointed out that developers in rural Nevada do not build medical and dental clinics to lease out space as is done in urban areas.  She explained medical and dental practitioners in rural Nevada typically are responsible for providing the appropriate facilities.  She noted the federal program, Hill Burton, has distributed $8.6 billion since 1969 with less than 1 percent being provided to rural communities.  That program has been eliminated, Ms. Ford remarked.

 

Senator Raggio asked whether another federal program has replaced the Hill Burton funding.  Ms. Ford responded no other federal program has been provided that would allow significant capital to enter the rural communities.  Ms. Ford explained it is particularly difficult for private practitioners in rural areas to secure capital for renovations and expansions of physical facilities. 

 

Senator Raggio closed the hearing on S.B. 403 and opened the hearing on A.B. 612.

 

ASSEMBLY BILL 612:  Creates revolving loan account in state general fund to provide assistance to certain rural health programs. (BDR 31-1421)

 

Ms. Ford stated the Governor had requested A.B. 612, which would provide $1 million to establish a revolving loan account through the Department of Human Resources.  She indicated passage of A.B. 612 would eliminate the seventh proposal from S.B. 403, which would reduce the total appropriations requested in S.B. 403 by $500,000.  She noted she testified at the committee hearing of A.B. 612 to request the Nevada State Office of Rural Health be involved in administration of the program.

 

Senator Raggio questioned whether A.B. 612 had been processed yet.  Ms. Ford responded the Assembly Committee on Ways and Means heard the bill but had not processed it at this point.

 

Ms. Ford requested elimination of the $750,000 fiscal note in the eighth section of A.B. 612 because she said she believes the rate review Medicaid has initiated should result in some positive changes.  She added she would like to have language enrolled in the NRS that addresses financing for rural and frontier populations to allow incremental adjustments for practitioners in the future.  She noted she believes the elimination of the $750,000 portion of the appropriation makes this bill conservative during this period of limited General Funds.

 

Robin Keith, Lobbyist, Nevada Rural Hospital Project Foundation, stated she supports S.B. 403 and A.B. 612 because both bills address the significant need for capital within the rural communities for health care.  She commented Nevada Rural Hospital Project Foundation has an existing revolving capital loan pool that was partially funded by the Robert Wood Johnson Foundation.  She added the Nevada Rural Hospital Project Foundation has the $740,000, which is due to the Robert Wood Johnson Foundation for repayment of debt in October 2001, but the foundation would prefer to keep the funds in Nevada for future use.  She explained either S.B. 403 or A.B. 612 would allow the $740,000 to remain in Nevada and continue as a revolving loan source.

 

Steve L. Tognoli, District Chief, Mason Valley Fire Protection District, stated volunteers are his organization’s most valuable resource.  He said volunteers typically expend personal funds to obtain the necessary training to maintain their skills, and S.B. 403 would help volunteers receive training with little personal cost.  He said volunteers perform a valuable service to their communities at no cost to those communities.  He pointed out the attrition rate of volunteers has fallen from 10 years of service to 5 years or less just during his tenure with the Mason Valley Fire Protection District, and he said recruitment and retention is impacted by the training and equipment provided to the volunteers.  He noted it is important to provide training in billing and collection to recoup some of the costs of services from Medicaid, Medicare, and private insurance.

 

Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy, Department of Human Resources, provided a written copy of his testimony (Exhibit I).  He stated the proposed amendment eliminates many concerns of the division; however, the division remains concerned about the proposed methodology of establishing a cost method for private physicians, nurse practitioners, and other health care providers in rural communities.  He said he believes the proposed methodology would probably establish a barrier to the entry of health care providers in rural communities, rather than an incentive.  He explained it is very difficult for small businesses to establish a cost basis without performing costly audits.  He pointed out one other issue of concern to the Division of Health Care Financing and Policy is having items that should be in Medicaid regulation in statute instead.  He added the division has been meeting with Robin Keith on the issue of rural hospital needs and funding for those facilities.  He said the division looks forward to closing the Medicaid budget in order to ascertain the amount of money that will be available for discretionary rate increases.

 

Senator Raggio requested further clarification of Mr. Duarte’s concerns regarding the methodology establishing a cost method for private physicians, nurse practitioners, and other health care providers in rural communities.

 

Mr. Duarte suggested that alternative ways of reimbursing providers in rural communities should be explored because the current proposal would be cumbersome and costly to administer.

 

Senator Raggio closed the hearing on S.B. 403 and opened the hearing on S.B. 478.

 

SENATE BILL 478:  Exempts clean-burning fuel from tax on special fuels. (BDR 32‑137)

 

Senator O’Donnell stated the sponsors of the bill have agreed to amend S.B. 478 by eliminating Section 4 and modifying Section 2 to delete the technical reference to Section 4.  He explained the amendment would delete the tax exemption.

 

K. Neena Laxalt, Lobbyist, Nevada Propane Dealers’ Association, explained S.B. 478 is intended to provide a definition of clean-burning fuels in Section 3, which is different than the current definition of alternative fuels in the NRS.  She explained that Section 4 of S.B. 478 provides a tax exemption for the clean‑burning fuels defined in Section 3.  She noted the fiscal impact to the State Highway Fund was approximately $300,000 to $400,000.  She said the sponsors of the bill have decided to remove the fiscal impact because there are other bills currently pending that would allow further study of the issue, one of which is S.B. 534.

 

SENATE BILL 534:  Makes various changes relating to control of air pollution. (BDR 40-794)

 

Ms. Laxalt suggested she and the other supporters of S.B. 478 would like to eliminate Section 4 from the bill and address that issue in S.B. 534.  She explained the remainder of S.B. 478 is important to provide a new definition of clean-burning fuels in the NRS.  

 

Russell Law, P.E., Chief Operations Analysis Engineer, Nevada Department of Transportation (NDOT), stated NDOT is opposed to S.B. 478 as currently written.  He indicated NDOT supports the amendment proposed by Ms. Laxalt because it removes the revenue loss.  He said Nevada should study three different issues related to clean-burning fuels:  taxation policy, pollution caused by fuels, and energy policy.

 

Senator Raggio questioned whether Mr. Law had any further suggestions regarding how to accomplish the recommended studies.  Mr. Law pointed out interim studies at the Legislature thoroughly address issues.

 

Senator Raggio inquired whether any interim studies were proposed to address similar issues for the 2001 to 2002 interim.  The members of the committee indicated they were not aware of any proposed interim studies to address those particular issues.

 

Ms. Laxalt stated two bills are currently pending in the Legislature which would provide opportunities for further study of the suggested issues.  She said the first bill proposes to have the Department of Environmental Protection evaluate different programs to provide appropriate incentives.  She noted Senator O’Donnell requested the second bill, which would create the Legislative Committee on Transportation.  She pointed out these issues could be studied further by the proposed Legislative Committee on Transportation if it is approved.

 

Senator Raggio closed the hearing on S.B. 478.  He indicated the committee would open the hearing on S.B. 417, which had been continued from the meeting Friday, May 4, 2001.

 

SENATE BILL 417:  Makes appropriation to state distributive school account to ensure that amount of money expended per pupil meets or exceeds national average. (BDR S-968)

 

Danny L. Thompson, Lobbyist, Nevada State AFL-CIO (American Federation of Labor and Congress of Industrial Organizations), stated his organization is very concerned with the shortage of education funding in Nevada.  He commented southern Nevada has 500 vacant teaching positions for the next school year.  He pointed out Nevada is below the national average for per pupil spending.  He acknowledged an increase in per pupil spending would require a tax increase of some kind.  He urged the committee to address the issue this session and not delay action two more years.  He volunteered his assistance in any future discussions aimed toward improving education funding in Nevada.  He articulated his organization’s support of S.B. 417. 

 

Deborah K. Cahill, Lobbyist, Nevada State Education Association (NSEA), reiterated the comments offered by her colleague, Al Bellister, Lobbyist, NSEA, at the committee meeting Friday, May 4, 2001, which indicated NSEA’s willingness to suggest other tax proposals to provide the necessary funding.  Ms. Cahill voiced her organization’s support of S.B. 417 and their willingness to assist in any related efforts.

 

Bobbie Gang, Lobbyist, American Association of University Women, and Nevada Women’s Lobby, expressed support for S.B. 417 on behalf of both the organizations she represents.  She noted the Nevada Women’s Lobby advocates increasing any tax in order to support the education system.  She stressed the importance of addressing the issue this session rather than delaying action two more years.

 

Senator Coffin mentioned he requested information from Al Bellister at the committee meeting Friday, May 4, 2001, and asked when the information would be provided.  He explained he requested a matrix of numbers that would allow further analysis of potential new taxes.

 

Ms. Cahill responded Mr. Bellister is en route from Reno with the requested information; therefore, the committee should receive the information today.  She explained the information requested by Senator Coffin is a study by Wharton Economic Forecasting Associates (WEFA) that analyzed the impact of varying levels of taxation. 

 

Ray Bacon, Executive Director, Nevada Manufacturers Association, provided a handout (Exhibit J), which is a written response to the committee’s questions at the meeting Friday, May 4, 2001.  Mr. Bacon proposed changing S.B. 417 from a specific dollar amount to a goal, which would achieve the average per pupil funding level of the 11 western states.  He stated funding options that do not involve tax increases are included in the handout, but the intended goal would not be achieved until the second year of the biennium utilizing the alternative funding methods.  He noted the cost of the suggested alternative funding methods is considerably less than the $306 million each year of the biennium proposed in S.B. 417.  He said the figures provided in the handout are from “Quality Counts,” which are typically 2 years old while the federal figures are 3 years old.  Therefore, he noted it might be preferable to use the “Quality Counts” figures.

 

Senator Raggio asked Mr. Bacon to briefly explain the plan he is proposing in Exhibit J.

 

Mr. Bacon stated Nevada is ranked seventh in the western region for per pupil spending which is $56.27 below the western regional average for per pupil spending based on the 1999 figures.  He noted both California and Arizona have recently made changes to their per pupil funding.  He explained the first suggestion is to implement electronic funds transfer (EFT) for the Department of Taxation, which would improve the return on taxes collected. 

 

The second suggestion Mr. Bacon addressed is to cap the collection allowance for sales and use tax collections at $10,000 per reporting period in lieu of the current one and one-quarter percent.  The widespread use of computers renders the current percentage approach outdated, he added.

 

Mr. Bacon suggested a third option would be to increase corporate filing fees in Nevada, which has some of the lowest filing fees in the nation.  He pointed out it would be preferable to increase the annual filing fee to more than the initial filing fee.

 

Mr. Bacon explained the fourth option provides for a tax amnesty program to be implemented as was done approximately 8 years ago.  He noted the tax laws are confusing in Nevada, and the tax amnesty program helped clarify the laws while generating additional revenue.  He commented the state received an additional $3 million to $4 million from people who did not understand the “use tax” law and those who self-reported without fines and penalty.  He said he believes the state’s population has expanded considerably since the last tax amnesty program while the tax laws remain confusing; therefore, repeating the program should generate substantial revenue.

 

Mr. Bacon mentioned the fifth possibility is to begin collecting “use tax” on each rental of equipment and products from rental companies in lieu of the one-time sales tax currently paid upon purchase of equipment and products.  He said he believes an opinion from the Office of the Attorney General is pending as to whether rental equipment should be subject to use tax or sales tax.  He said this would be redefinition of an existing tax, not a tax increase.  He commented this redefinition would provide significant income to the state.

 

Senator Raggio referenced a memorandum (Exhibit K) provided by Ted A. Zuend, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, that addresses the State Controller’s recommendation to eliminate the retailer sales tax allowance.  He commented that Mr. Bacon suggested “capping” the retailer sales tax allowance, but the memorandum evaluates the fiscal impact of completely eliminating the allowance. 

 

Mr. Ghiggeri explained the elimination of the current one and one-quarter percent retailer sales tax allowance would provide an estimated additional revenue of $8.6 million in FY 2002 and $9.1 million in FY 2003 to the State General Fund.  He added local government would receive approximately $12.3 million in FY 2002 and $13 million in FY 2003.  He noted an additional indirect benefit to the state would be $9.4 million in FY 2002 and $10 million in FY 2003 that would be received by the distributive school account.

 

James T. Richardson, Lobbyist, Nevada Faculty Alliance, provided copies of Senate Bill 1007 passed during the 2000 Legislative Session in Arizona (Exhibit L).  He explained that 53 percent of Arizona citizens voted in favor of increasing their sales tax by six-tenths of a percent to fund education from kindergarten through the fourth year of college, “K-16.”  He pointed out the tax initiative was launched by the Governor of Arizona, Jane Hull, in 1998.  He said all Chambers of Commerce, all educational organizations and their administrations, and all mayors of the major cities in Arizona, endorsed the initiative by the time it was presented for a vote of the public. 

 

Mr. Richardson discussed the content of the tax initiative passed in Arizona.  He said considerable funding was provided for construction of kindergarten through high school, “K-12” facilities.  He noted funding was also provided for technology development at the higher education level, additional teacher compensation for “K‑12,” and workforce development at community colleges.  He commented a significant element of the law passed in Arizona was the requirement that funding for education increase by at least 2 percent each year for inflation.

 

Senator Raggio inquired whether the Arizona law included “K-12” and higher education, or just “K-16” programs. 

 

Mr. Richardson responded, “They call it a K-16 measure.”  He explained that 15 percent of the funding derived from this measure, which generates about $450 million a year, is specified to increase technology training at the higher education level.  He noted a new technologically enhanced biochemistry building is being built with this funding at an Arizona university this year.  He said workforce development at the community colleges is a separate provision.  He pointed out the bulk of the funding is directed toward “K-12.” 

 

Senator Raggio commented the measure increased Arizona’s sales tax to 5.6 percent, which is considerably lower than Nevada’s sales tax.

 

Mr. Richardson responded he is not recommending an increase in the sales tax, but the substance of their plan is an interesting model for review.  He added Arizona is not as reliant on sales tax because the state has an income tax, which Nevada does not.

 

Senator Raggio mentioned according to the figures Mr. Bacon had provided the committee, Arizona ranked tenth of the eleven states in the western region for per pupil spending.  He commented the tax initiative is likely in response to the poor comparative ranking.

 

Mr. Richardson acknowledged Arizona rated poorly in numerous measures related to education, but he provided the measure as an example of action taken in another state.

 

Senator Raggio closed the hearing on S.B. 417.  He indicated the committee would address Senate Committee on Finance Closing List Number 12 (Exhibit M).  He invited Joel Pinkerton, Budget Analyst, Budget Division, Department of Administration, and Don Hataway, Deputy Director, Budget Division, Department of Administration, to join the program analyst at the table for the budget closings.

 

ELECTED OFFICIALS

 

Attorney General Admin Fund – Page ELECTED-26 (Volume 1)

Budget Account 101-1030

 

Rick Combs, Program Analyst, stated this is the main account of the Office of the Attorney General.  He addressed the technical adjustments recommended for the budget.  He noted the first adjustment is to eliminate the revenues and expenditures related to a grant from the federal government to assist with housing inmates who are illegal immigrants that previously passed through the Office of the Attorney General to the Nevada Department of Prisons (NDOP).  He explained the grant is now awarded directly to NDOP.  He said the second adjustment is to increase the transfer from the Attorney General’s Victims of Domestic Violence account to ensure the appropriate costs are met for the two positions funded from this transfer.  He articulated the third adjustment is to increase the expenditures for state-owned building rent by $7,892 in each year of the biennium.

 

M-100 Inflation & Per Unit Adjustment – ELECTED-28

 

Mr. Combs stated the expenditures for state-owned building rent have been reduced by $21,423 in FY 2002 and $121,267 in FY 2003 based on rent expenditures that have been allocated to other Attorney General accounts.  He explained the large decrease in the second year of the biennium is attributed to the potential approval of the capital improvement project (CIP) to remodel the old Carson City Courthouse.  He said all of the funding for that rent was included in this budget, but a number of the people who would be housed in that space are in other budget accounts of the Office of the Attorney General, which has been adjusted out of this budget account.

 

M-303 Occupational Studies – ELECTED-30

 

Mr. Combs indicated the revenues and expenditures recommended for the reclassification of numerous positions according to the Department of Personnel’s occupational study have been adjusted to match the findings of the study and to correct data-entry errors.

 

Mr. Combs stated the computer hardware and software expenditures in all the budget accounts, addressed at this meeting, have been adjusted based on updated pricing information received from the Purchasing Division.

 

Senator Raggio inquired whether the Assembly Committee on Ways and Means had closed this budget yet.  Mr. Combs responded they had not.

 

Mr. Combs directed attention to the budget closing issues, beginning with the cost allocation plan.  He pointed out The Executive Budget recommends the receipt of boards and commission charges in the amount of $645,294 in FY 2002 and $685,317 in FY 2003.  He explained licensing and occupational boards pay a per hour rate rather than go through the cost allocation plan process, and the cost allocation plan process merely produces an amount that is expected to be received from that source.  He noted the agency was budgeted to receive $554,857 in boards and commission revenue in FY 2000, but the agency actually collected $396,504.  He stated the final version of the cost allocation plan, which the Fiscal Analysis Division received on April 23, 2001, projected the boards and commission revenue would be $468,866 in FY 2002 and $804,978 in FY 2003, which represents more than a 100 percent increase over the actual amount received in FY 2000.  The Office of the Attorney General has indicated they do not believe the amount recommended for FY 2003 is achievable, he added.

 

Senator Raggio commented that would be a huge increase.  Mr. Combs agreed.  Mr. Combs stated the Attorney General indicated to the staff that her office could generate about $500,000 in FY 2003, but not the amount projected.

 

Senator Raggio asked Frankie Sue Del Papa, Attorney General, whether she believes $500,000 in FY 2003 is more realistic.  Ms. Del Papa nodded in agreement.

 

M-200 Demographics/Caseload Changes – ELECTED-28

 

Mr. Combs stated the Attorney General requested funding for the Tobacco Enforcement Unit, which was accomplished through work programs in FY 2000 and FY 2001.  He explained a United States Supreme Court ruling in 2000 determined the Food and Drug Administration (FDA), which previously funded the program, does not have the authority to adopt and enforce regulations limiting the sale of tobacco to minors.  He noted the decision unit requests funding for a half‑time Deputy Attorney General position, two full-time Investigator positions, two half-time Legal Secretary positions, and six quarter-time Temporary Aide positions.  He said the Office of the Attorney General requested funding from the Task Force for the Fund for a Healthy Nevada, but the application was denied at the task force’s meeting held in September 2000.

 

Mr. Combs stated The Executive Budget recommends supporting the program through a grant from the Bureau of Alcohol and Drug Abuse (BADA) in the amount of $70,000 in each year of the biennium in addition to an allocation from the Fund for a Healthy Nevada in the amount of $238,501 in FY 2002 and $251,825 in FY 2003.  He stated the General Fund appropriation provided in decision unit M‑200 has been eliminated.  He pointed out representatives of the Office of the Attorney General have indicated the Synar Amendment requires states to maintain the youth tobacco buy rate at 20 percent or lower to avoid losing $3.8 million in federal funding to BADA. 

 

Mr. Combs noted the final federal omnibus appropriation bill for Federal FY 2001 prohibited the withholding of a state’s substance abuse block grant funds if that state was not in compliance with the provisions of the Synar Amendment.  He added representatives of the Office of the Attorney General have pointed out that federal legislation requires those states not in compliance with the Synar Amendment to devote significant state funding toward lowering the youth buy rate in order to continue to receive their entire substance abuse block grant.  He said the recommendation to fund the tobacco-control program with funds from the National Tobacco Settlement via the Fund for a Healthy Nevada appears reasonable based on the information provided by the Office of the Attorney General.

 

Senator Raggio questioned whether the BADA grant, in the amount of $70,000 for each year of the biennium, in addition to an allocation from the Fund for a Healthy Nevada in the amount of $238,501 in FY 2002 and $251,825 in FY 2003, is all necessary and appropriate.  Mr. Combs stated those amounts are reduced from the previous funding amount received from the FDA, thus the amounts appear comparatively reasonable.

 

Senator Raggio clarified FDA funding is definitely eliminated.  Mr. Combs responded affirmatively.

 

Senator Rawson expressed concern that the Fund for a Healthy Nevada will be fully distributed within the next few sessions.  He acknowledged the Office of the Attorney General is responsible for Nevada receiving the funds from the National Tobacco Settlement, and he would like to see some of the funds put into a trust fund.

 

Senator Raggio inquired about the reasons the Task Force for the Fund for a Healthy Nevada rejected the application by the Office of the Attorney General.  Mr. Combs replied the minutes from the September 2000 meeting of the task force in which the application was rejected are unclear as to the reasoning.

 

Senator Raggio stated the Tobacco Enforcement Unit appears to be “a specific appropriate type of use that the funds should be used for.”  Mr. Combs responded his recommendation is this is a reasonable use of the funds.

 

Senator Raggio commented the Tobacco Enforcement Unit attempts to ensure youth cannot purchase tobacco by punishing stores that sell tobacco to youth.  Mr. Combs agreed.

 

Senator Rawson stated it is a good program and should be continued.  He said taxing tobacco is also a deterrent because every 10-cent tax probably results in 5 percent fewer people smoking.  He said he believes it is one taxing policy that is good.  He suggested other sources of funding should be explored for the continuation of the Tobacco Enforcement Unit.

 

Senator Raggio commented the committee must decide whether the Tobacco Enforcement Unit is appropriate to receive funding from the Fund for a Healthy Nevada prior to closing this budget.

 

Mr. Combs explained NRS 439.630 provides the Task Force for the Fund for a Healthy Nevada authority to allocate the funds, so additional language should be included in the authorization or appropriation act to ensure funding for the program is provided each fiscal year.  The other option is to allow the Task Force for the Fund for a Healthy Nevada to continue to make the funding decision, he added.

Senator Raggio commented he believes it should be specified should the budget be closed with additional funding.

 

Senator Rawson suggested “a sunset change,” which might be changed in 2 years.  He commented the Task Force for the Fund for a Healthy Nevada might as well be disbanded if the program is authorized to receive funding from this source indefinitely.  Senator Rawson acknowledged it is essential to provide authorization for this biennium, but he prefers to identify another funding source prior to the next Legislative Session.

 

Senator Raggio stated this would be an authorization for one biennium, not indefinitely.  Mr. Combs agreed.

 

Don Hataway, Deputy Director, Budget Division, Department of Administration, said precedent has been established by two different one-time allocations from the Task Force for the Fund for a Healthy Nevada.  He noted the first allocation, $1 million, was to the University of Nevada for special programs, and the second allocation, $5 million, was for an assisted living program in Las Vegas.  He said he believes the Legislature is “a higher decision level” than the task force.  He commented the program should be continued and this appears to be a logical funding source.  He reassured Senator Rawson that alternative funding sources would be reviewed prior to the next Legislative Session, so the committee can review the funding options during the next session.

 

Senator O’Donnell expressed concern regarding the Office of the Attorney General having enforcement responsibilities in addition to prosecution powers.  He questioned whether it would be better policy for the enforcement responsibility to be handled by another agency.

 

Mr. Hataway responded upon initiation of the Synar Amendment, local law enforcement agencies were requested to enforce the measure.  He pointed out local law enforcement agencies did not enforce the measure; therefore, the responsibility defaulted to the Office of the Attorney General.  He noted the second issue is potentially losing significant BADA funding by not actively enforcing the measure. 

 

Senator O’Donnell suggested the Nevada Highway Patrol, Division of Parole and Probation, or Capitol Police might be able to enforce the measure in lieu of the Office of the Attorney General.

 

Frankie Sue Del Papa, Attorney General, responded her office has received congressional recognition for its outstanding efforts to enforce the measure.  She commended John Albrecht, of her office, for taking a strong personal interest and leading the effort.  She explained the program has involved cooperative efforts with the Nevada Retailers Association, and the program has been very successful.  She stated the youth buy rate has begun to “creep back up” because lack of FDA funding curtailed enforcement efforts earlier this year.  She pointed out BADA funding is significant and in jeopardy if the youth buy rate continues to increase.  She commented immediate action is necessary, and it does not make sense to transfer the program at this stage.  However, she agreed to comply with the wishes of the committee.

 

Ms. Del Papa stated the Office of the Attorney General twice applied to the Task Force for the Fund for a Healthy Nevada.  She commented one of her own personal primary reasons for entering the tobacco litigation was to curb the rise in youth smokers, and she said she believes this is an appropriate use of the funds.  She added this program benefits other state entities as well.

 

Senator O’Donnell questioned whether the Office of the Attorney General has “arrest power?”  He requested clarification whether the matter is criminal or civil.

 

Ms. Del Papa responded that primarily the retailers are issued citations.  She said the program is multifaceted and includes education, citation, and awards.

 

Senator O’Donnell questioned whether the citation is for a misdemeanor or a gross misdemeanor. 

 

Ms. Del Papa responded, “It is a type of 1-2-3 program that we have worked out with them.”  She commented it is ultimately a misdemeanor.

 

Senator Raggio suggested the motion to close the budget should include language stating that funding is authorized only for this biennium.

 

M-201 Demographics Caseload Changes – ELECTED-29

 

Mr. Combs articulated this decision unit provides for continued funding of 1 full‑time Deputy Attorney General position that was approved by IFC to advise the Division of Financial Institutions.  He explained this position was approved to enforce the provision of Assembly Bill (A.B.) 64 of the Seventieth Session.  He commented this position appears reasonable.

 

ASSEMBLY BILL 64 OF THE SEVENTIETH SESSION:  Revises provisions relating to mortgage companies and loans secured by liens on real property. (BDR 54‑1204)

 

E-275 Working Environment & Wage – ELECTED-30

 

Mr. Combs articulated this decision unit provides for 2 full-time attorney positions and 1 full-time Legal Secretary position.  He pointed out 1 attorney position is for a Deputy Attorney General to provide legal services to the Division of Child and Family Services in Clark County.  He said this attorney position is funded through The Executive Budget entirely through cost allocation revenue from the Welfare Division.  He explained the contribution to the plan by the Welfare Division would be increased to pay for the position.  He said if the position were approved to serve the Division of Child and Family Services, it would most appropriately be funded one-half from the State General Fund and one-half from cost allocation revenue.  This would require adding to the General Fund revenue to support the costs of the position, he noted.

 

Mr. Combs pointed out A.B. 343, which is currently in the Assembly Committee on Ways and Means, will provide for the Integration of the State and Local Child Welfare System and is the result of an Interim Study during the 1999-2001 interim.

 

ASSEMBLY BILL 343:  Provides for integration of state and local child welfare services. (BDR 11-325)

 

Mr. Combs explained the Governor has recommended transferring child welfare services in Washoe County and Clark County from the Division of Child and Family Services to those counties pursuant to recommendations by the Interim Study.  He said current budgetary limitations may delay the transfer, but it appears it will eventually occur.  He commented the state will need to pay the counties to hire attorneys to handle additional caseloads and responsibilities after the transfer is potentially approved, which should result in a decreased need for associated attorney positions at the Office of the Attorney General.  For this reason, he stated the staff does not recommend approving this position at this time.

 

Senator Raggio commented there has been some discussion the transfer may be delayed.  Mr. Combs responded it may be delayed, but said he believes any potential delay would not be longer than the next biennium.  Mr. Combs reiterated the decision to fund the new Deputy Attorney General position is at the discretion of the committee.

 

Mr. Combs stated the second Deputy Attorney General position requested in this decision unit is to provide assistance to the Division of Environmental Protection and the Housing Division.  He noted the Office of the Attorney General indicated bankruptcies in the mining industry have resulted in an increased need for legal assistance to the Division of Environmental Protection, as the division is responsible for ensuring the bankrupt mining companies perform reclamation activities.  The office further indicated the expansion of multifamily housing units and specialized housing for seniors and other specific groups has increased the legal service need of the Housing Division, he added.  He commented the Housing Division indicated they anticipate an increase in foreclosures and bankruptcies as a result of the slowing economy.  He articulated staff recommends the approval of the 1 new Deputy Attorney General for assistance to the Division of Environmental Protection and the Housing Division.

 

Mr. Combs stated the decision unit also provides for 1 full-time Legal Secretary to assist the Office’s Transportation and Public Safety Division in Las Vegas, which provides legal services for NDOT, the Department of Motor Vehicles and Public Safety (DMV & PS), and the Transportation Services Authority (TSA).  He explained the office indicated the complexity of the litigation and the high dollar amounts involved in condemnation and construction claims cases regarding NDOT necessitate additional assistance.  Mr. Combs indicated the recommendation appears reasonable.

 

Ms. Del Papa requested the committee provide 1 full-time Deputy Attorney General to assist the Welfare Division’s Child Support Enforcement Program and the Division of Child and Family Services upon the transfer.  She said the transfer may be delayed, but her office will provide legal assistance at least throughout the next biennium. 

 

Senator Raggio questioned whether the Office of the Attorney General would have the responsibility of providing legal services only to the Division of Child and Family Services in Clark County during the next biennium.

 

Ms. Del Papa stated Nancy Angres, Chief Deputy Attorney General, Office of the Attorney General, would be better prepared to answer that question, but pointed out Ms. Angres was not at the meeting.

 

Senator Raggio asked who is currently providing the legal services.  Ms. Del Papa responded her office is providing legal services at present.

 

Senator Raggio questioned why the Office of the Attorney General needs an additional full-time Deputy Attorney General for this area since they are already doing the work.  Ms. Del Papa responded:

The additional workload with reference to the Division of Child and Family Services.  It was misnamed in terms of child support, but that whole area and part of it I think has to do with the continuing work that is done.  There are a lot of changes that came about because of the Welfare Reform Act.  There has been a lot of changes throughout all of this, but there are additional workloads.

 

Senator Raggio responded it was not clear whether the position could be supported through cost allocation. 

 

Mr. Combs responded the proper way to fund the position is probably one-half General Fund and one-half cost allocation.  He said if the position were approved the way it is now in the budget, as a child support deputy, it would eventually work out in the cost allocation plan.  But, he added, for this biennium, the Welfare Division would end up paying for a position that is working in the Division of Child and Family Services matters.

 

Senator Raggio suggested the committee follow the staff recommendations at this point and revisit the issue at a later date if necessary.  He noted the staff recommendations include funding 1 full-time Deputy Attorney General position to assist the Division of Environmental Protection and the Housing Division and 1 full‑time Legal Secretary position to assist the office primarily with NDOT matters.  He added staff recommends not funding the 1 full-time Deputy Attorney General assisting with child support matters.

 

E-710 Replacement Equipment – ELECTED-31

 

Mr. Combs stated this decision unit includes the upgrade of four rented copy machines, replacement chairs, and secretarial units.  He noted $10,000 is included in each year of the biennium for software upgrades for the Attorney General’s computer forensic laboratory.  Additionally, he said $112,952 in FY 2002 and $184,268 in FY 2003 is provided for replacement computer hardware, which reflects a reduction because of the updated prices.  He commented the recommendation appears reasonable.

 

E-720 New Equipment – ELECTED-31

 

Mr. Combs pointed out the primary ongoing expense in this decision unit is $10,716 in each year for the rental of two new copiers for the Las Vegas office.  He stated the expense appears reasonable.

 

Senator O’Donnell questioned the need for two new paper shredders in this decision unit.  Mr. Combs responded typically legal offices destroy some documents to protect the attorney-client privilege.

 

Ms. Del Papa commented the Office of Attorney General handles a great deal of confidential material such as gaming records, which necessitates shredding to deter reporters or any other interested party from accessing that material.  She indicated all materials that are not confidential are recycled.

 

Mr. Combs stated page 10 of Senate Committee on Finance Closing List Number 12 (Exhibit M) is a memorandum of adjustments to the budget from Frankie Sue Del Papa, Attorney General.  He stated the memorandum includes five additional agency requests.  He pointed out the first agency request concerns the receipt of boards and commission charges, which was addressed earlier in the review of this budget.  He commented staff is not making any recommendations regarding the other four requests, but he believes a letter of intent is warranted based on concerns regarding the cost allocation plan.

 

Mr. Combs explained in addition to the problem with the boards and commission charges, there is also an issue regarding the Tort Claim Fund, budget account 715‑1348.  He pointed out the cost allocation plan indicated that the costs paid from the Attorney General’s Tort Claim Fund should be increased to $636,064 in FY 2002 and $1,201,895 in FY 2003.  He said the current charge to the Tort Claim Fund account is $16,968 in The Executive Budget.  He commented he has been unable to determine why the account would have been increased so much.  He explained, “The Office of the Attorney General has indicated when tort claims come up, the hourly rate is billed on the timesheets to the agency that the tort claim is related to, rather than the fund itself.”  He said it is unclear why this would occur under that practice.  He noted the Budget Division has recommended increasing, not to the amount recommended in the cost allocation plan, but by $100,000 additional for each year.  He said the Budget Division’s recommendation appears reasonable based on the fact that all the tort assessments for vehicles and employees throughout the budget would have to be revised and increased to the level generated in the cost allocation plan.  He added: 

 

You should note that eventually the way the cost allocation plan works, if you don’t pay into it what the cost allocation plan said the year before, eventually it will catch up to you and you will have to pay it.  So this could result in a significant increase in the assessments next session.

 

Don Hataway commented if the Budget Division is able to confirm these hourly charges are correct, in lieu of making a massive change to the employee tort and vehicle liability claims this year, the Budget Division would transition that into the budget process two years from now.  He acknowledged there would have to be sizeable increases in those rates to generate those dollars.  He stated this was discovered too late in the session to make the necessary changes because it would require adjustments to every account with “people or vehicles” in it at this point.

 

Ms. Del Papa stated an increasing number of entities are attempting to send bills to the Tort Claims Fund.  She said her office has worked with the Budget Division on this issue and also was in the midst of doing a major Attorney General opinion on the matter.  She noted her office has litigated on this matter too.  She commented that for purposes of the Tort Claim Fund some county court employees have been designated state employees.  She stated there are inequities with people attempting to access the Tort Claim Fund that do not pay into it, and her office has been working with the Budget Division to resolve this matter.

 

Senator Raggio inquired how Mr. Combs recommends handling this matter. 

 

Mr. Combs responded he would agree with the Budget Division’s recommendation to increase the Tort Claims Fund by only $100,000 in each year of the biennium.  He further recommended a Letter of Intent indicating the Department of Administration and the Office of the Attorney General work with DMG Maximus, who prepares the plan, to determine the specific reasons for the significant increase.  He noted inaccuracies in time accounting or something inherently wrong with the plan itself could have resulted in the significant increase, but that determination needs to be made.  He suggested the Office of the Attorney General could then report back to the IFC.

Ms. Del Papa directed the committee’s attention to the fifth request on her memorandum located on page 10 of Exhibit M.  She explained her office needs to have the Computer Network Specialist I position increased from half-time to full‑time, and she is willing to provide the necessary funding for the increase from other non-General Fund revenue accounts that would be utilizing the position.  She said the increase must be authorized by the committee regardless of the funding source.

 

Senator Raggio inquired how the increase could be approved without providing additional General Fund support.

 

Mr. Combs responded half of the cost of the position could be provided by other non-General Fund revenue accounts if half of the position’s time is spent on those accounts.

 

Senator Raggio asked Ms. Del Papa whether she could substantiate half of the position’s time would be spent on non-General Fund revenue accounts.  Ms. Del Papa responded affirmatively.

 

Senator Raggio indicated he would accept a motion to close the budget with the adjustments including:  the increase of the half-time Computer Network Specialist I position to full-time, the Letter of Intent regarding the cost allocation plan, the denial of the request for 1 full-time Deputy Attorney General assisting with child support matters, the inclusion of language that the funding for the Tobacco Enforcement Unit is authorized only for this biennium, and approval of all other adjustments as recommended by staff.

 

SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1030 AS DESCRIBED BY SENATOR RAGGIO.

 

SENATOR O’DONNELL SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Attorney General Insurance Fraud – Page ELECTED-35 (Volume 1)

Budget Account 101-3806

 

Mr. Combs discussed the technical adjustments to this budget account.  He explained the expenditures for state-owned and non-state owned building rent have been adjusted.  He pointed out this account had some serious revenue concerns at the beginning of the biennium, so a fee increase was requested to support the expenditures recommended in The Executive Budget.  He noted A.B. 134, which provides the fee increase, has passed both houses.  Therefore the negative expenditure line item in the base budget could be eliminated, he remarked. 

 

ASSEMBLY BILL 134:  Makes various changes concerning assessment imposed by commissioner of insurance upon insurers to pay for program to investigate certain violations and fraudulent acts. (BDR 57-331)

 

E-275 Working Environment & Wage – ELECTED-37

 

Mr. Combs said the fee increase is in this decision unit.  He explained the fee is currently $500, but A.B. 134 increases that fee to as much as $2,000 based on the sliding scale of the amount of premiums charged each year by insurers.  He pointed out the bill is estimated to generate an additional $198,105 in each year of the biennium.  He said the bill also eliminates the transfer of funds from the Attorney General account to the Division of Insurance and instead splits the revenue 85 percent to the Attorney General and 15 percent to the Division of Insurance.

 

E-710 Replacement Equipment – ELECTED-38

 

Mr. Combs stated this decision unit provides for 2 printers in FY 2002 and 12 personal computers in FY 2003.  He noted staff adjusted the number of computers to 11 because the number of staff funded from this budget includes 9 full-time and 2 part-time employees, which would require 11 computers.

 

E-720 New Equipment – ELECTED-38

 

Mr. Combs indicated this decision unit provides for 1 scanner, 1 laptop computer, and 2 surge protectors in FY 2002, which he believes appears reasonable.

 

Senator Raggio indicated he would accept a motion to close the budget as recommended by staff.

 

SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101‑3806 AS RECOMMENDED BY STAFF.

 

SENATOR JACOBSEN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

AG Medicaid Fraud – Page ELECTED-40 (Volume 1)

Budget Account 101-1037

 

Mr. Combs stated the expenditures for non state-owned building rent have been reduced based on information provided by the Office of the Attorney General regarding the fraud unit’s current leased space in Carson City.  He said the expenditures for state-owned building rent have been increased for the Medicaid Fraud Unit, which currently occupies 839 square feet in the Grant Sawyer State Office Building.  He stated the computer hardware prices have also been adjusted in decision units E-710 and E-720 based on updated pricing information.

 

E-710 Replacement Equipment – ELECTED-43

 

Mr. Combs pointed out this decision unit provides for the replacement of 1 personal computer, 1 printer, and 4 laptop computers in FY 2002 and 9 personal computers in FY 2003.  He said the recommendation appears reasonable based on the replacement policy.

 

E-720 New Equipment – ELECTED-43

 

Mr. Combs articulated this decision unit, as recommended in The Executive Budget, provides for 1 unlimited power supply device and 2 surge protectors, but the agency has indicated all 3 items should be power protection devices.  He adjusted the budget to reflect 3 power protection devices.

Mr. Combs stated additional request made by the Office of the Attorney General are provided in a memorandum on page 15 of (Exhibit M).  He said the requests are pursuant to federal law changes, which expands the jurisdiction of the Medicaid Fraud Unit.  He said the first request is for 2 new Investigator positions, which were requested last session in anticipation of the enactment of the federal law.  In lieu of approving the positions at that time, the agency was asked to request the positions through a work program if the federal law was approved during the interim, he explained.  He noted now that the federal law has been enacted, the agency has opted to request the positions through the regular legislative session rather than through a work program.  He commented staff projects personnel and operating costs for the 2 new positions would total $99,806 in FY 2002 and $133,744 in FY 2003.  He said based on the fact that both the Assembly Committee on Ways and Means and the Senate Committee on Finance directed the agency to re-request the positions upon enactment of the federal law, staff believes the 2 positions appear reasonable.

 

The other agency request, he noted, is for authority to increase a Deputy Attorney General position to a Senior Attorney General position.  As outlined in Exhibit M, the agency indicates that the position is the only attorney in the Medicaid Fraud Control Unit that is stationed in the Las Vegas office and is therefore required to take on additional responsibilities and to litigate more complex cases due to the location of this position.

 

SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1037 AS RECOMMENDED BY STAFF WITH THE ADDITIONAL AGENCY REQUESTS.

 

SENATOR O’DONNELL SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Attorney General-Workers’ Comp Fraud – Page ELECTED-45 (Volume 1)

Budget Account 101-1033

 

Mr. Combs stated there are no technical adjustments to this account except the computer hardware and software cost adjustments as adjusted in M-200, E-710 and E-720.

 

M-200 Demographics/Caseload Changes – ELECTED-46

 

Mr. Combs articulated this decision unit provides for 1 new Supervising Legal Secretary.  He said the unit currently has 3 legislatively approved legal secretary positions and other secretary positions in the Reno office often provide services for this account on an as-needed basis.  He explained the Supervising Legal Secretary would supervise all the legal secretaries providing service for this account, as well as other secretaries in the Reno office.  He said there was some concern regarding the manner in which the funding for the position is established and whether or not the assessments against Workers’ Compensation insurers should be used to fund a position that is supervising other positions not directly funded in the account.  He stated the Attorney General has indicated although this position would supervise the work of certain secretaries outside of this account, the assistance provided to employees in other accounts will be offset by the work those employees are often asked to perform for this account.  He commented, based on the Attorney General’s indication the assessment revenues will not fund more than this account’s share of the legal secretary expenses, the request appears reasonable.

 

E-710 Replacement Equipment – ELECTED-48

 

Mr. Combs articulated this decision unit recommends the replacement of 6 printers, 1 scanner, 2 laptop computers, 1 file server, and 2 uninterruptible power supply devices in FY 2002, and 8 printers and 1 scanner in FY 2003.  He said the recommendations appear reasonable.

 

E-720 New Equipment – ELECTED-48

 

Mr. Combs stated this decision unit recommends the purchase of 1 new laptop computer, which appears reasonable.

 

Mr. Combs indicated staff recommends additional funding for rent, motor pool expenditures, training and equipment, which was inadvertently omitted from The Executive Budget.  He noted the only additional request staff does not recommend funding is litigation expenses in the amount of $15,984 in each year of the biennium.  He pointed out the base budget currently includes $11,038 in each year of the biennium for litigation expenses and that amount exceeds the amount expended in each of the past three fiscal years.

 

Senator Raggio requested further clarification of the additional request for training expenditures. 

 

Mr. Combs responded the training expenditure is $3,216 in each year of the biennium.  He explained the training expenditure amount in FY 2000 was low because the agency had to transfer funds from this category to the in-state travel category to compensate for an increase in motor pool rates.  He noted the agency has asked to increase the training category back near the level that was legislatively approved last session, which appears reasonable.

 

Ms. Del Papa commented that Kevin Higgins of her office was unable to attend the meeting, so she would like to explain the reason for the additional request in the litigation budget.  She said the litigation reserves have been reduced significantly.

 

Senator Raggio responded, “But it hasn’t reached that amount in the past 3 fiscal years, so it seems to be appropriate.”

 

SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1033 AS RECOMMENDED BY STAFF.

 

SENATOR JACOBSEN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Attorney General Tort Claim Fund – Page ELECTED-60 (Volume 1)

Budget Account 715-1348

 

Mr. Combs stated the only two technical adjustments were for state-owned building rent in decision unit M-100, and computer pricing in decision unit E-710.

 

M-200 Demographics/Caseload Changes – ELECTED-28

 

Mr. Combs stated this decision unit provides funding for an excess liability insurance policy.  He explained The Executive Budget recommended $151,619 in FY 2002 and $201,619 in FY 2003 to purchase this policy, which would protect the state from a liability loss in excess of $1 million for a single claim or event with a $10 million limit on the policy.  He noted, at the hearings before the money committees, representatives of the Office of the Attorney General indicated the costs would be higher than anticipated in The Executive Budget.  He said those representatives now anticipate the cost for the policy would be approximately $200,000 in FY 2002 and approximately $250,000 in FY 2003.  He pointed out the policy was purchased through the Risk Management Division in FY 2001 for a total cost of $155,000.  He stated the Tort Claims Administrator has indicated the broker from whom the state purchases these policies pointed out there are no better prices obtainable for a policy of this nature.  He noted the reserve in the Tort Claims Fund would decrease to approximately $1.9 million in the second year of the biennium if this budget were approved as recommended with the additional cost allocation expenditures recommended.  He commented this would be an extra insurance policy to ensure those reserves, as well as the Reserve for Statutory Contingency Fund, are not utilized.  He said it is a policy decision for the committee whether or not to concur with the Tort Claim Administrator’s belief that this policy is necessary.

 

Senator Raggio commented it appears necessary.

 

Senator Coffin asked the identity of the broker and what bidding process was utilized to provide a schedule of proposals to the agencies. 

 

Mr. Combs responded Mr. Hataway might have better information to respond to those questions.  He said he believes the Risk Management Division went through the request for proposal process in FY 2001 to choose a broker to locate the types of policies that do not affect tort claims.  He commented he does not recollect the name of the broker selected.

 

Senator Coffin inquired whether there was a bidding process.

 

Mr. Hataway responded affirmatively and offered to get the name of the chosen broker for Senator Coffin.

 

E-710 Replacement Equipment – ELECTED-62

 

Mr. Combs stated this decision unit includes the replacement of 1 personal computer, which appears reasonable.

 

SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 715-1348 AS RECOMMENDED BY STAFF WITH THE ACCEPTANCE OF THE TORT CLAIM ADMINISTRATOR’S RECOMMENDATION ON THE INSURANCE POLICY.

 

SENATOR O’DONNELL SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

 

AG, Victims of Domestic Violence – Page ELECTED-72 (Volume 1)

Budget Account 101-1042

 

Mr. Combs pointed out this account was combined with an account previously not included in The Executive Budget.  He said funding for this account includes grant fund from Services, Training, Officers and Prosecution (STOP) grant for domestic violence at the federal level.  He explained the Attorney General receives requests for grants and they pass through the federal funds to the requesting agencies.

 

Mr. Combs addressed the technical adjustments to the account.  He said the titles for category 09 and category 10 have been changed.  He noted category 09 has been entitled “Committee Expenses,” and category 10 has been entitled “Ombudsman Expenses.”  He commented the Ombudsman Expenses are for the ombudsman that was approved by the 1997 Legislature, which is an unclassified position responsible for training programs for law enforcement and courts on domestic violence issues.  He said the Committee Expenses are for the committee on domestic violence and they are responsible for the evaluation, certification, and monitoring of programs for the treatment of persons who commit domestic violence. 

 

M-100 Inflation & Per Unit Adjustment – ELECTED-73

 

Mr. Combs articulated certain employee-related expenditures in the base budget and this decision unit were transferred from the Committee Expenses category to the Ombudsman Expenses category based on the change to the titles of the categories.

 

Mr. Combs stated the transfer to the Attorney General’s Administration account has been increased to fund the Grants and Projects Analyst Supervisor position.  He commented the revenues to fund the expenditures recommended in decision unit M-100 have been re-allocated between STOP grant revenues and a reduction in the reserve for the account.  He pointed out expenditures in the Committee Expenses category should be funded through assessment revenue or a reduction to Reserve rather than STOP grant funding.

 

E-225 Reward More Efficient Operation – ELECTED-74

 

Mr. Combs discussed the two budget closing issues.  He said the first issue is whether or not to approve $10,000 in each year of the biennium for additional training for law enforcement officers, attorneys, and members of the judiciary regarding domestic violence.  He noted pursuant to NRS 228.460 the Ombudsman and the Committee on Domestic Violence are authorized to use the revenues generated from the assessments imposed by courts against persons who are convicted of a battery that constitutes domestic violence to train law enforcement officers, members of the judiciary, and attorneys regarding domestic violence.  He said the agency has indicated they would like to establish this type of training program during the 2001 to 2003 biennium, which appears reasonable to staff.

 

Mr. Combs stated the Ombudsman also requested $2,703 in FY 2003 to contract secretarial services during peak production periods of the office.

 

SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1042 AS RECOMMENDED BY STAFF.

 

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Senator Raggio commended the staff for all their hard work.

 

The meeting was adjourned at 11:16 a.m.

 

RESPECTFULLY SUBMITTED:

 

 

 

Jennifer Ruedy

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Senator William J. Raggio, Chairman

 

 

DATE: