MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Subcommittee
Seventy-Second Session
March 18, 2003
Chairwoman Peggy Pierce called the Subcommittee to order at 10:33 a.m. on Tuesday morning, March 18, 2003. The hearing was reconvened by the Chairwoman to continue the Subcommittee meeting on Wednesday at 7:30 a.m., March 19, 2003, and on Thursday at 10:13 a.m., March 20, 2003. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Ms. Peggy Pierce, Chairwoman
Mr. Pete Goicoechea
Mr. Joe Hardy
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
JoAnn Aldrich, Committee Secretary
OTHERS PRESENT:
Jeanne Greene, Director, Nevada Department of Personnel
Kim Foster, Administrative Services Officer, Nevada Department of Personnel
Linda Covelli, Nevada State Employees Association, Las Vegas, Nevada
Gary H. Wolff, Teamsters Local No. 14, Reno, Nevada
Phil Hauck, Supervisory Personnel Analyst, Nevada Department of Personnel
Assembly Bill 217: Makes various changes regarding State Personnel System. (BDR 23-495)
Chairwoman Pierce opened the discussion on A.B. 217. She directed the Subcommittee’s attention to Section 24 that addressed a payroll irregularity. The event, which happened when the state payroll system changed from the old Legacy computer program to the new IFS Advantage computer program, had apparently caused an overpayment to employees of $9.2 million.
Jeanne Greene, Director of the Nevada Department of Personnel, introduced her colleague, Kim Foster, Administrative Services Officer, Department of Personnel. She asked if the Subcommittee would like Ms. Foster to go over the documentation previously provided (Exhibit C). Chairwoman Pierce said yes.
Ms. Foster testified that the overlapping week’s pay was part of a deliberate effort to streamline the state payroll process and make it easier to understand. Legislative studies had examined the “anticipated week” problem for several years and all recommended that it should be eliminated. Many experts made recommendations and suggested other options. She said that none of those were acceptable because they would have affected employee pay or state budgets. A final decision was made to eliminate the anticipated week when they implemented a new payroll system: the IFS Advantage program.
Ms. Foster said that the report provided to the Committee (Exhibit C) outlined the transition process from the old Legacy Program to the new IFS Advantage program.
Ms. Foster explained how the old Legacy Program calculated employee pay and the “anticipated week” concept. Ms. Foster asked the Subcommittee to turn to the graph on page 10 of Exhibit C. The graph named the first two weeks, during which employees filled out their two-week time sheet and reported time actually worked, as the Legacy “Report Period.” The following two weeks, called the Legacy “Pay Period” overlapped the “Report Period” by one week. At the beginning of the “Pay Period,” the Legacy Program would calculate the first week using actual, reported hours, and the second week, the “anticipated week,” using hours that they expected the employee to work.
Ms. Foster said that the main problem with this arrangement was that, if an employee went on “leave without pay” during the anticipated week, the employee could be overpaid. There were procedures in place to stop that from happening, but it was very labor-intensive. The second problem with the Legacy Program was that if employees had earned “premium time” during the anticipated week, they would not be paid for it. The goal in implementing a new payroll system was to eliminate the anticipated week and start paying employees for hours actually reported.
Assemblyman Goicoechea said that he read in the report that employees had been paid twice for days 6, 7, 8, 9, 10, 11, and 12. He asked if that was correct. Ms. Foster said that was correct, and she would discuss that phase next.
Ms. Foster stated that the conversion from the Legacy Program to the new IFS Advantage Program caused the two systems to overlap a week and eliminated the anticipated week problem. During the transition, state employees received their paychecks as usual. They did not receive double pay for that week, although the week between March 6, 1999 and March 12, 1999 overlapped both programs. The anticipated week was highlighted in purple in the graph on page 10 of Exhibit C. The approximate value of the overlap was 40 hours for most state employees.
Assemblyman Hardy asked, “When we made that switchover from the Legacy to the IFS, if we did not have the one week overlap, we would have had a three week break between paychecks instead of two weeks, is that correct?” Ms. Foster replied, “If we didn’t have a week of paid overlap, employees would not have been paid for a week’s period of time, to get rid of that anticipated week.” Mr. Hardy said that the state paid employees for an extra week in order to accommodate communications between the two software programs. Ms. Foster agreed.
Mr. Hardy said that the problem now was how to recover the extra week’s pay from 9,000 people affected by the overpayment, and which still affected the state budget by about $6.2 million, as explained on page 1 of Exhibit C.
Ms. Foster noted that when they set out to streamline the payroll system, the goal was to have zero effect on employees and on the state budget. Mr. Hardy argued, to the contrary, that the transition had affected the state budget because they were looking for $6 million today. Ms. Foster answered that the second week’s payment was recorded to a receivable account, not to an expenditure account. Assemblyman Hardy said he was lost, and Ms. Foster agreed it was complicated.
Assemblyman Goicoechea said to Ms. Foster that she confused the Subcommittee by saying that employees had been paid for the 40-hour week, because, technically, they were not double-paid for the overlapping week. He asked if the correct interpretation was to view it as a paper trail because no double-payment had been made to employees in dollars.
Ms. Foster agreed: It was strictly a paper trail and no double-payment of dollars had been made. Employees had been paid ahead for the anticipated week when they started employment with the state, and that was when the expenditure was incurred. The overlapping of payrolls was only on paper.
Mr. Goicoechea reiterated,
…so technically what you’ve done now is pushed that first week when they were first hired way back when they first started, now you’ve taken that week and pushed it completely ahead, so that in the end, they will only get paid for one week instead of two weeks, like an employee that was hired in 1999 or later.
Ms. Foster said that was correct because the state would reduce employees’ last two weeks pay by the value of the week they owed to the state.
Mr. Goicoechea said that there could be an inequity to some employees if the actual dollar amount owed was not recorded on their paychecks. Since most employees earned pay increases during their various terms of employment, most employees would lose money if the state had listed the amount owed as a week of time, and not as an actual dollar amount. Mr. Goicoechea approved of the line item on employee pay stubs that listed the debt in dollars.
Ms. Greene added that employees could choose to use annual leave to pay off the obligation on their paycheck now, but it was not mandatory. Assemblyman Goicoechea added that A.B. 217 would allow employees to pay off any other indebtedness to the state using annual leave, if they wished. Both Ms. Greene and Ms. Foster agreed.
Chairwoman Pierce said that her understanding was that it was an on-paper‑only situation: the state had not paid out $6 million. The Chairwoman said she could now explain the situation to the rest of the Committee, and that no changes would be necessary to Section 24. Chairwoman Pierce said she would like to finish Section 24 before proceeding with the other sections and asked if anyone would object to leaving Section 24 as stated in A.B. 217. There were no objections from Mr. Goicoechea or from Mr. Hardy.
Linda Covelli, State of Nevada Employees Association, Union Local 4041, stated that her organization was not opposed to Section 24, subsection 8, which would allow employees to satisfy an overpayment of salary by using accrued annual leave. The concern they had was that this could be used as a vehicle to mandate that employees repay the anticipated pay week. Since that had been clarified, she had no objections to the provision as it stood.
Gary Wolff, Teamsters Local No. 14, said he also felt that as long as Section 24, subsection 8, was clear, he was comfortable with the bill.
Chairwoman Pierce concluded that the consensus of the Subcommittee was to recommend to the Committee that they leave Section 24 as is.
Chairwoman Pierce next directed the Subcommittee’s attention to Section 36, which addressed writing off employee debts under $50.
Assemblyman Goicoechea said that although $50 was not a lot of money, but he felt that there should be a collection process in place, even if it was through payroll deductions. He wondered why there was a need to write off employee debts of less than $50.
Ms. Greene said that the intent was to write off only debts of former employees. They would continue to pursue debts owed by current employees. Sometimes they were not given a forwarding address, and in those cases, it was cheaper to write off the debt than to pursue collection. Ms. Greene noted that during the four years covered by the fiscal note there were 25 overpayments of $50 or less, totaling $594. She did not count this as a significant amount of money.
Assemblyman Goicoechea said that their intent was to write off bad debts, not debts owed by active employees. Ms. Greene agreed.
Assemblyman Hardy, suggested that the Subcommittee could strike the words “current or” on page 22, line 26, to have it read, “overpayment of salary to a former state employee of not more than $50 as a bad debt.” He asked if that language would reflect the Subcommittee’s intent.
Ms. Greene agreed, and said the reason they had the word “current” in the sentence was that there were a few occasions where employees were overpaid $0.30 and that her employees had paid it out of pocket rather than process the paperwork. She said that if the amount were over $5.00 they would definitely pursue payment from employees by way of payroll deductions.
Assemblyman Hardy asked if they could continue this procedure if the words “current or” were stricken. He said he would defer to the Subcommittee on this.
Assemblyman Goicoechea said that he understood the accounting practices, but he would still prefer to have current employees not included in the bill.
Chairwoman Pierce advised members and the public that the Subcommittee meeting would be continued tomorrow, Wednesday, March 19, 2003, immediately after adjournment of the meeting of the Assembly Committee on Government Affairs, because all three Subcommittee members had to attend a meeting on the Floor of the Assembly, which started in 5 minutes.
Chairwoman Pierce recessed the Subcommittee at 10:55 a.m. on March 18, 2003.
Chairwoman Pierce reconvened the Subcommittee meeting at 10:12 a.m. on March 19, 2003. She directed Subcommittee members to take up where they left off and to reconsider the issue of whether to leave in the words “current or” in Section 36, line 25, A.B. 217.
Assemblyman Hardy stated that the testimony he heard yesterday made sense, and he would defer to their suggested language. He recognized that they were using personal funds to avoid collecting debts of 30 cents, which would cost the state. He thought it was appropriate to leave in the language they suggested, which would curtail this necessity.
Chairwoman Pierce stated that she would report to the full Committee that the Subcommittee recommended they should accept the proposed language for Section 36 as amended. There were no objections.
Chairwoman Pierce directed the Subcommittee to look at Section 32 that addressed drug testing. On the handout “Proposed Amendment to A.B. 217” (Exhibit D), three possible changes were proposed to Section 32:
Chairwoman Pierce said they would start by considering the proposed change from “72 hours” to “14 days.” She said she thought this was a good idea, after hearing Assemblyman Hardy’s explanation of the time it took to get to a physician.
Assemblyman Goicoechea asked Assemblyman Hardy how long the drugs stayed in a person’s system, and if 14 days might be too long to test employees effectively. Mr. Hardy, a practicing physician, said that the issue was not to catch the person with drugs in the system, but to allow the person to approach a physician and have clearance for a drug to cross-react with the illicit drug. He said that even 72 hours was not soon enough to discover evidence of an illicit drug in a person’s system. Mr. Hardy, a doctor, said that a physician would take down the history of what drugs the person had taken for what conditions. The physician could then ask to document by test. However, he said that, 99.9 percent of the time, identifying drug users was accomplished by learning the history, which would not change in 3 days or in 14 days.
Assemblyman Hardy suggested that the Subcommittee recommend adopting the 14-days change and language that would mirror Section 30, lines 44 and 45, and be consistent with other sections of the same statute.
Chairwoman Pierce said she would not want those two things together in a motion because she preferred the choice off just taking out “other drug” and leaving “controlled substance.” She asked for a motion to adopt the 14-days change.
Ms. Greene stated that she thought that 14 days was excessive and would hinder an agency from appointing an individual to a position for an additional two weeks. She introduced Phil Hauck from the Department of Personnel, who was the laboratory coordinator for employee drug testing, and who would walk the Subcommittee through the procedure.
As Phil Hauck, Supervisory Personnel Analyst, Department of Personnel started to testify, Chairwoman Pierce reminded everyone that Legislators had a meeting on the Floor of the Assembly in five minutes. Mr. Hauck said he would make a brief statement. Mr. Hauck said that in the procedures there was a requirement for a medical review officer to contact an employee who tested positive for a controlled substance. The medical review officer would determine whether or not that individual was taking a controlled substance prescribed by a physician or had taken an over-the-counter medication which could result in a false positive test. Because of the medical review process and direct discussion with the employee who tested positive, the 72-hour response period was only rarely applied. In discussing the procedure with other agencies, they could not see where the 72-hour response period had been an issue in the past.
Assemblyman Hardy asked if Mr. Hauck was referring to a physician signing off an employee, or a lab tech/qualified Ph.D. signing off a drug test, and whether they were signed off the test or the person.
Mr. Hauck said that the medical review officer would contact an individual to determine if the person had taken a prescribed drug under a doctor’s orders. The medical review officer would not report a positive test if the individual had a prescription. They would report the test as negative.
Assemblyman Hardy asked Mr. Hauck to verify that the medical officer was a medical doctor working as a pathologist who would be signing off the test under his or her license, based on history, and because of a phone call, not because of another test. Mr. Hauck said that was correct, and pointed out that it was a requirement of the Department of Health and Human Services, and that the procedure was accepted by American Medical Laboratories, a certified lab in Las Vegas. Mr. Hardy said he had no problems with that procedure.
Chairwoman Pierce recessed the Subcommittee at 10:24 a.m. on March 19, 2003, and directed that the meeting would reconvene at 7:30 a.m., March 20, 2003.
Chairwoman Pierce reconvened the Subcommittee at 7:20 a.m. on March 20, 2003.
The Chairwoman recalled that the previous day, the Subcommittee had agreed that 72 hours was sufficient for an applicant to respond to a positive test for controlled substances. There were no objections.
The Chairwoman moved the discussion to Section 32, lines 34-35, and outlined the various choices.
Assemblyman Hardy said that, for the record, he had written up his thoughts to bring some perspective to issues surrounding controlled substances (Exhibit E). He said the history of medicine and of the drug culture was such that there was always a new chemical, most of which were discovered in the natural world, such as Taxol. Because the chemicals must be individually added to the controlled substance list by a law or regulatory action, Mr. Hardy said it would be a good idea to use language inclusive of potential chemicals not yet specifically designated. He recommended using language that would apply standards to the hiring process that were similar to those used on continuing employees.
Mr. Hardy added that the chemical that had created more death, disease, and sorrow than any of those included on the list of controlled substances was ethanol, commonly known as alcohol.
Chairwoman Pierce passed around a list of controlled substances tested for in Nevada. She was concerned that future tests would look for prescription drugs as a way to screen out applicants with preexisting conditions. Chairwoman Pierce wanted to preclude that from happening.
Assemblyman Goicoechea said that he would defer to Mr. Hardy’s greater knowledge, but he did not want to see testing get too creative and too expensive because it would create loopholes. He would prefer retaining the original language.
Assemblyman Hardy asked what the creators of the amendments were thinking when they proposed adding “or other drug.” Chairwoman Pierce said that those folks were now willing to drop their recommendation and leave it out.
Ms. Greene explained that the Department of Personnel did not add that language. She said that Eileen O’Grady, Committee Counsel, added it to make the wording consistent with other language in the statute. Chairwoman Pierce said that the Committee then had the option of taking out that language on lines 34 and 35, and of taking it out on line 29. Ms. Greene said her Department did not have a problem with those changes.
Assemblyman Hardy said Mr. Hauck would like to make a comment. Mr. Hauck said that he added controlled substances in that section because they were talking about testing applicants. The state only tested applicants for the “Big Five” drugs, which were amphetamines, nitrates, PCP, cocaine, and marijuana. He said that list could be expanded, but it would also increase costs.
Assemblyman Goicoechea asked about the effectiveness of testing for those substances and whether applicants were testing for alcohol. Mr. Hauck said that the laboratory recommendation was to screen for those five substances, and that the tests were effective. He said that recently there had been an increase in applicants testing positive for “Ecstasy” but that alcohol was not a controlled substance, so applicants were not tested for it. Active employees however, could be tested for alcohol.
Chairwoman Pierce suggested that “other drugs” should be stricken from both lines in Section 32. Assemblyman Hardy said he could see her point, but that he had a different perspective.
ASSEMBLYMAN GOICOECHEA MADE A MOTION TO DELETE “OR ANY OTHER DRUG” FROM LINES 34, 35 AND 29.
ASSEMBLYWOMAN PIERCE SECONDED THE MOTION.
THE MOTION CARRIED AND MR. HARDY VOTED NO.
Chairwoman Pierce said that the last items for consideration were questions on whether to add into the statutes a requirement to have Legislative Counsel Bureau (LCB) prepare various reports and submit them to the Committee in two years. The reports were: a report on Section 1, hours of operation, a report on the progress of the repayment plan, and a report on how many bad debts had been written off. She said there was a second option to ask LCB to remember those requests and to informally report to the Committee within two years.
Assemblyman Goicoechea said he would not like to have any of those reports in the NRS, and he would prefer to request the reports informally from the LCB.
Assemblyman Hardy thanked the state officials who provided information on these items, especially the payroll “anticipated week” changes, which were resolved with their help. Mr. Hardy agreed with Mr. Goicoechea that all three reports should be requested informally.
Subcommittee members appeared unanimous in their agreement, so Chairwoman Pierce stated that she would recommend that the Committee should direct the LCB to provide three reports within two years on the subjects of the bad debts, the hours of operation in Section 1, and the voluntary signoff of overlap reimbursement. There were no objections.
Chairwoman Pierce said that members of the Subcommittee were in agreement, and she would recommend that the Government Affairs Committee amend and do pass A.B. 217. Chairwoman Pierce said that the Subcommittee also urged that the word “repayment” should not be used in the amendment language. She suggested that “overlap reimbursement,” or a similar phrase, would be preferable and would be less inflammatory.
Chairwoman Pierce adjourned the Subcommittee Meeting on A.B. 217 at 7:51 a.m., March 20, 2003.
RESPECTFULLY SUBMITTED:
__________________________
JoAnn Aldrich
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: