MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

 

Seventy-Second Session

April 7, 2003

 

 

The Committee on Ways and Meanswas called to order at 8:21 a.m., on Monday, April 7, 2003.  Vice Chairwoman Giunchigliani presided in Room 3137 of the Legislative Building, Carson City, Nevada, and via simultaneous videoconference, in Room 4406 of the Grant Sawyer Office Building, Las Vegas, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Guest List.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

 

COMMITTEE MEMBERS PRESENT:

 

Ms. Chris Giunchigliani, Vice Chairwoman

Mr. Walter Andonov

Mr. Bob Beers

Mrs. Vonne Chowning

Mrs. Dawn Gibbons

Mr. David Goldwater

Mr. Josh Griffin

Mr. Lynn Hettrick

Ms. Sheila Leslie

Mr. John Marvel

Ms. Kathy McClain

Mr. David Parks

Mr. Richard Perkins

 

COMMITTEE MEMBERS ABSENT:

 

Mr. Morse Arberry Jr., Chairman

 

GUEST LEGISLATORS PRESENT:

 

Assemblywoman Ellen Koivisto, District No. 14

Assemblywoman Genie Ohrenschall, District No. 12

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Assembly Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Bob Atkinson, Program Analyst

Julie Brand, Program Analyst

Tracy Raxter, Program Analyst

Carol Thomsen, Committee Secretary

Susan Cherpeski, Committee Secretary

 

 

Vice Chairwoman Giunchigliani called the committee to order and opened the hearing on A.B. 286

Assembly Bill 286:  Revises provisions governing health insurance for retired officers and employees of local governments. (BDR 23-1124)

 

Assemblywoman Ellen Koivisto, District No. 14, explained that A.B. 286 was the result of the many phone calls, letters, and e-mails received by legislators regarding the problems facing non-state retirees enrolled in the Public Employees’ Benefits Program (PEBP).  Mrs. Koivisto stated that for persons who were not active employees or retirees from state service, or were not non-state retirees, the situation was confusing because the PEBP was not related to the Public Employees’ Retirement System (PERS).  She indicated that the PERS was a separate entity through which all retired public employees received their retirement benefits.  Mrs. Koivisto explained that the PEBP was the health insurance system for active state and public employees, retired state employees, and also for public employees retired from other entities. 

 

A number of years ago, stated Mrs. Koivisto, a change was made in the system, which required non-state retirees to be rated separately for the purpose of establishing the premiums those retirees would be required to pay.  She explained that currently a non-state retiree and spouse paid $1,435 per month for health insurance coverage, which was over $17,200 a year, and in Mrs. Koivisto’s opinion, was obscene.  She believed that people who had devoted their entire working lives to public service should not be treated in that manner. 

 

Mrs. Koivisto remarked that A.B. 286 would create a mechanism for non-state retirees to again be included for health insurance coverage in the health plan available through the system from which they retired.  If that were not possible, the entity from which a person retired would be required to pay the PEBP to subsidize the premium rate currently being charged non-state retirees.  Mrs. Koivisto stated the fiscal note on the bill was approximately $5 million, but she noted that over the past several legislative sessions, several million dollars had been allocated to “prop up” the PEBP and keep it solvent.  A.B. 286 was simply one idea to help “fix” a program that was really “broken.” 

 

Vice Chairwoman Giunchigliani referenced Section 1(5) of A.B. 286, which addressed the commingled claims experience, and asked whether that meant the PEBP would no longer aggregate separate groups, whether it was active, retired, non-state retired, or retired state employees, and would allow the “pooling” concept to be utilized for all parties.  Mrs. Koivisto stated that was correct.  Vice Chairwoman Giunchigliani referenced the language in Section 1(4)(b) that stated, “Shall pay the same portion . . .” and asked what that rate would be after commingling all the entities under A.B. 286.  Mrs. Koivisto stated she did not know what the rate would be. 

 

Leslie Johnstone, Accounting Officer, PEBP, advised that she could not provide the answer to Vice Chairwoman Giunchigliani’s question regarding the exact rate amount as the PEBP had not determined what the subsidy portion would be.  She commented that with the plan changes that the PEBP Board had approved, a revised estimate had been provided regarding the fiscal note attached to A.B. 286.  Ms. Johnstone stated the fiscal note would be approximately $4.5 million. 

 

Vice Chairwoman Giunchigliani asked whether that would be $4.5 million in each year of the biennium, and Ms. Johnstone stated that was correct.  Vice Chairwoman Giunchigliani noted that the $4.5 million fiscal note applied to A.B. 286, and asked whether the numbers had been reconfigured for the other bills that addressed the non-state retiree issue.  Ms. Johnstone reported that the fiscal note would be the same for all bills that dealt with commingling. 

 

Vice Chairwoman Giunchigliani noted that subsidization was occurring within the plan regardless of the rates, in that the health maintenance organizations (HMOs) actually subsidized the preferred provider organization (PPO) plans.  Vice Chairwoman Giunchigliani asked Ms. Johnstone to provide a breakout by active employee, by HMO, and by PPO, to ascertain what the actual dollar figure would be per month for contribution purposes if commingling were initiated.  Ms. Johnstone stated that the information was available and would be provided to Legislative Counsel Bureau (LCB) staff. 

 

Assemblyman Marvel asked how funding would be provided in the future, and whether it would cause an increase in premiums for all participants.  Ms. Johnstone explained that from the state’s perspective, since the PEBP could not predict how the increase in costs would be split between the state and the participant, the cost had yet to be determined.  Mr. Marvel asked whether those figures were available, and Ms. Johnstone stated she had the figures regarding what the total cost impact would be for state participants, however, reiterated that the PEBP could not predict how that cost would be paid.  Ms. Johnstone pointed out that the $4.5 million fiscal note was the total cost increase to the state active and retiree participants.  Mr. Marvel asked whether that would include the state contribution.  Ms. Johnstone stated the $4.5 million fiscal note assumed that the full impact would be paid by the state subsidy.  Mr. Marvel asked about future premium costs to keep the program funded.  Ms. Johnstone indicated that if it was determined that the state subsidy would not bear the full burden of the commingling, it would then impact the premiums for participants.  Mr. Marvel again asked whether that amount had been determined, and Ms. Johnstone replied that the determination had not yet been made.

 

Vice Chairwoman Giunchigliani asked, as of July 1, 2003, whether A.B. 286 would cause any public entity that was a member of PERS, but did not currently contribute for its retirees that had chosen to participate in the state plan, to pay the same premium offset as the state paid for its retirees.  Ms. Johnstone replied in the affirmative.  Vice Chairwoman Giunchigliani asked how many local governmental entities did not cover retiree health care, and how many additional individuals might become participants in the plan.  Vice Chairwoman Giunchigliani believed that the larger the pool, the better it would be for all participants, which would be an issue for consideration by the proposed interim study committee.  Ms. Johnstone replied that she did not have the total number of retirees, however, the number of non-state retirees who currently participated in the PEBP was 1,496. 

 

Vice Chairwoman Giunchigliani suggested that there were many non-state retirees for whom no contribution was made by their local government for health care coverage.  Ms. Johnstone stated that was correct, and explained that the only public entities, other than the state, who contributed for their retirees were: Carson City; Washoe County School District; Eureka County; and Mineral County School District.  Vice Chairwoman Giunchigliani asked whether those entities were paying the same rate as the state, or was it a different configuration such as the entity paying the retiree, who then paid the premium.  Ms. Johnstone was unsure how the offset was handled by other local entities, however, the amounts currently paid by local entities for their retirees were: (1) Carson City, $90; (2) Washoe County School District, $135; (3) Eureka County, $120; and (4) Mineral County School District, one of the poorest counties in the state, paid $652.  Vice Chairwoman Giunchigliani noted that the subsidy paid by the Mineral County School District was closer to the actual monthly cost.  Ms. Johnstone replied that was correct, with those retirees only paying an additional premium cost of $60.  Vice Chairwoman Giunchigliani opined that the other local entity subsidies were more of a “token,” to which Ms. Johnstone agreed.

 

Vice Chairwoman Giunchigliani asked whether local entities had projected the costs for commingling.  Ms. Johnstone stated that at the time she began working on the concept of commingling, the entities were “scrambling” to try and determine the numbers.  She explained that local governmental entities were all very different in the way their employee systems operated.  For example, stated Ms. Johnstone, in the collective bargaining process the City of Henderson had bargained for a higher salary in order to avoid payment on the “back end” for health benefit subsidies, which had become part of the collective bargaining agreement.  According to Ms. Johnstone, those issues would have to be addressed.  Vice Chairwoman Giunchigliani remarked that would be another purpose of the interim study committee, because each group had negotiated agreements that would have to be reviewed. 

 

Vice Chairwoman Giunchigliani asked about the effective date of July 1, 2003, for the provisions of A.B. 286 and what the PEBP anticipated the impact would be.  Ms. Johnstone replied that the PEBP had established the plan design for the fiscal year beginning July 1, 2003, and had issued tentative rates.  If action was taken very quickly regarding commingling, Ms. Johnstone believed it would be possible to review and modify the rates to reflect the commingling, but that would require action very quickly so that the recomputed rates could be included in the packets, and to allow compliance with the 30-day notice requirement.  Ms. Johnstone believed that a more practical date of implementation would be July 1, 2004. 

 

Vice Chairwoman Giunchigliani asked whether the PEBP had a listing of each employee according to local governmental entity, and whether there were a targeted number of potential participants.  Ms. Johnstone stated the PEBP had not reviewed the numbers from that perspective and would have to survey each entity; she was unsure how that actual number would be determined.  Vice Chairwoman Giunchigliani opined that there would be a significant impact on the plan if there were suddenly 10,000 or 20,000 additional participants. 

 

Vice Chairwoman Giunchigliani asked why the effective date for the plan had been moved from January to July, other than the Board making that decision.  Ms. Johnstone replied that the change to July helped the rating process correspond to the subsidy rate period.  Vice Chairwoman Giunchigliani asked, because of action which might be taken during the current session, whether it would make sense to extend the date to January for the current year, in order to ascertain how many individuals would actually join, and then restructure the rate for the following July.  Ms. Johnstone reported that the plan’s finances were so precarious at the present time that extending the rates at the current level would not be financially feasible.  Vice Chairwoman Giunchigliani asked if such action would be feasible if the plan received an additional 30,000 to 40,000 participants.  Ms. Johnstone stated that would not be known until January. 

 

In anticipation of A.B. 286, and based on conversation with legislators, Vice Chairwoman Giunchigliani asked whether the PEBP had contacted local governmental entities to at least tally how many employees each had, how many were within one year of retirement, or what those entities would be willing to pay for health care coverage for their retirees.  Ms. Johnstone replied that the PEBP had not conducted such inquiries. 

 

According to Vice Chairwoman Giunchigliani, the Legislature did not simply want to “bail out” the self-funded plan any longer, and something had to be done to make the plan workable; she did not have a comfort level that the rates were correctly reflecting the actual activity. 

 

Vice Chairwoman Giunchigliani announced that the Committee would commence with public testimony regarding A.B. 286. 

 

Marty Bibb, representing the Retired Public Employees of Nevada (RPEN), advised the Committee that the RPEN supported A.B. 286 for several reasons, and one reason was because, “the larger the pool, the better the rate,” which was clearly an axiom that would come into play.  Additionally, stated Mr. Bibb, the RPEN believed that requiring local governmental entities to subsidize their retirees in the same manner as the state would be sensible, since those retirees would enjoy the advantage of being in the state program.  The RPEN also believed it was only fair that local governments not isolate retirees from active participants in their plans, because simply isolating retirees and not including them with active participants would make premium rates for retirees virtually unaffordable. 

 

Specific to the questions relative to the subsidy, Mr. Bibb indicated that the amount varied greatly among the many local entities that either did or did not subsidize their retirees, and the PEBP was in the process of developing and expanding the information regarding which local entities subsidized; the RPEN believed that information would be even more thorough in the future.  Some governmental entities that provided a subsidy did so in a variety of ways, as had been pointed out in earlier testimony.  Mr. Bibb noted that Mineral County subsidized all but the first $60 of the self-funded rate for non-state retirees in the state program, and yet it was the RPEN’s understanding that the subsidy had been created by an administrative agreement rather than a negotiated agreement with the retirees of the school district.  Mr. Bibb indicated that the RPEN looked forward to receiving additional information, and as pointed out by the Vice Chair, it was clearly a dilemma.  Mr. Bibb reiterated that the RPEN supported A.B. 286.

 

James Richardson, representing the Nevada Faculty Alliance, stated that he also wanted to go on record in support of A.B. 286.  He remarked that it was a concept that should have been implemented long ago, which would have alleviated the present problem.  Mr. Richardson noted that the Legislature had received many e-mails, letters, and phone calls about the problem regarding the high premium rate for non-state retiree participants in the state’s self-funded plan.  The bill would solve that problem in the future, explained Mr. Richardson, because it simply would require public entities whose retirees had joined the state plan to subsidize them at the same level that the state subsidized its retirees.  He noted that the state subsidy involved a very complicated scheme that depended on years of service, and it basically seemed fair that non-state entities encouraging their retirees to join the state health plan would help subsidize their premiums in the same manner as the state subsidized its retirees.  Mr. Richardson suggested that if such a provision were already in place, the Legislature would not have seen such an outpouring of correspondence, because the subsidization would have alleviated the cost for non-state retirees to the same extent as it did for state employees. 

 

Mr. Richardson stated that the Alliance also supported the provision of the bill that would force non-state entities to allow their retirees to reapply for health coverage with that entity, which could be a preferred avenue if the local entity offered an adequate health plan.  However, remarked Mr. Richardson, if those retirees chose to join the state health plan, a subsidy should be required from the local entities.

 

According to Mr. Richardson, the problem would be the effect of commingling, which was included in A.B. 286.  As had previously been pointed out, there would be a $4.5 million negative impact on the state health plan to commingle non-state entities, and one of the questions would be regarding the source of that funding.  Obviously, stated Mr. Richardson, one source for the money would be the state’s General Fund.  Mr. Richardson opined that it might be possible to actually develop some method of assessing local governments that had not been contributing for their retirees in order to help cover that cost.  He stated he was present to plead with the Committee that if the bill passed, that it include some mechanism to add sufficient money to the plan to cover the costs, otherwise, it would simply drive up the rates for state employees and retirees.  Mr. Richardson stated those members would take the “hit,” and he noted that the plan had suffered some rather severe cuts in recent times in an effort to begin rebuilding reserves and in order to deal with the available funding.

 

Mr. Richardson pointed out The Executive Budget contained increases in the contributions to the plan, but even factoring in those increases, there would be significant rate increases along with cuts in the plan if commingling occurred.  He begged the Committee not to pass A.B. 286 without the accompanying $4.5 million from some source, or the plan would continue to deteriorate. 

 

Vice Chairwoman Giunchigliani noted there were other bills along with A.B. 286 that anticipated elimination of the segregation of the participants and a return to the “pooling” concept.  At least one issue was “bailing out” the over 1,400 current non-state retirees who participated in the plan in an amount of more than $9 million over the biennium.  According to Vice Chairwoman Giunchigliani, another issue was that the anticipated number of participants who might join the plan was unknown and the “opt in” or “opt out” requirements had not been addressed.  She acknowledged that she did not have a comfort level regarding what the monthly premium would actually cover because of the various levels of the subsidy, such as single employees with no children subsidizing employees with as many as 15 children, versus non-state retirees and state retirees.  Vice Chairwoman Giunchigliani noted that the figures “were all over the road map” and she did not know how the subsidy could be computed at the present time.  She asked Mr. Richardson whether he had any numbers available regarding how many participants might join the plan under the changes proposed by A.B. 286. 

 

Mr. Richardson stated the effective date included in the bill was July 1, 2003, however, in previous testimony the PEBP had asked that the effective date not be set as July 1, 2003, because the plan and rates had already been set for that period.  Vice Chairwoman Giunchigliani pointed out that the rates were supposed to be tentative, which was why the legislative change to a 30-day notification had been approved, however, the PEBP Board went ahead and adopted the rates after that approval.  Mr. Richardson remarked that even the 30-day notification period was fast approaching, and as Ms. Johnstone had previously testified, if one of the commingling bills were passed immediately, the PEBP Board could hold an emergency meeting and adjust those rates.  If the bill passed without the funding, the PEBP would have to raise the rates for all state active employees, retirees, and surviving spouses, which Mr. Richardson believed would present a serious problem. 

 

Mr. Richardson noted that under the new rate structure, there had been some relief granted to non-state retirees of approximately 10 to 15 percent.  He believed that the problem was not the rates, because rates were high for everyone in today’s health care market, but rather the problem was the lack of subsidization for some non-state retirees.  When previous bills regarding commingling had been heard, teachers from Carson City had testified regarding their situation, and the problem appeared to be that the Carson City School District did not provide any subsidy for its retirees.

 

Vice Chairwoman Giunchigliani pointed out that the state subsidized its retirees based on years of service, however, she was unsure if other entities used that formula, which might be an issue for review.  She believed that “years of service” as a public employee should be “years of service,” regardless of where that service had been located. 

 

Mr. Richardson stated in the long term, commingling would be the way to proceed to enlarge the pool, but he also remarked that he did not believe there would be many non-state entities joining the plan prior to July 1, 2003.  Mr. Richardson stated that many entities would await the results of the interim study committee, and depending on what was recommended and passed by the Legislature after that study was complete, there might be a dramatic increase in participants if a decision was made to build a larger pool.  Per Mr. Richardson, that would also take time because some groups were covered by collective bargaining agreements that would have to expire and be renegotiated to take into account the new law or other mechanisms. 

 

According to Mr. Richardson, it appeared logical to consider moving the effective date of the bill to July 1, 2004, even though that would not offer immediate relief for a portion of the non-state retirees who participated in the plan, however, it would allow time to review the issues.  If the Legislature passed A.B. 286 with an effective date of July 1, 2003, many of the current non-state retirees who participated in the plan would be very grateful, but if it were passed with an effective date of July 1, 2004, the PEBP would be afforded the time to work out the problems in detail.

 

Vice Chairwoman Giunchigliani asked whether the July 1, 2003, date would be for the non-segregation with the state funding the fiscal note, or would that also be when local governments would be mandated to start subsidizing their participants.  Mr. Richardson stated the date would affect the entire bill, with both aspects of the bill becoming effective July 1, 2003.  Vice Chairwoman Giunchigliani pointed out that the earlier effective date would address the immediate problem, however, the later date would allow time for review of the situation. 

 

Danny Coyle, representing retirees of the American Federation of State, County and Municipal Employees (AFSCME), stated that the AFSCME also supported A.B. 286, but shared the same concerns as Mr. Richardson regarding the adverse effect the commingling would have on retired state employees.  Mr. Coyle advised that he had discussed the issue with representatives from local governmental entities that provided viable insurance programs, and it did not appear there would be much enthusiasm on the part of those entities to join the state’s self-funded plan; however, the entities that did not maintain sufficient health plans might want to join the state plan. 

 

Mr. Coyle opined that changing the effective date of the plan back to January on an interim basis would be helpful, and would afford the necessary time for the system to conduct a survey regarding the number of participants who would consider joining the plan with commingling.  He noted the number might offset the $4.5 million fiscal note.  Currently, stated Mr. Coyle, the AFSCME believed A.B. 286 was a tremendous bill as far as mandating local governments to subsidize their employees.  Mr. Coyle advised that he had no numbers regarding how many participants would join the system, and perhaps an additional six months would provide sufficient time to gather those figures. 

 

Rose Lee Portillo thanked the Committee for the opportunity to present testimony.  She stated that it was now known that a great inequity had occurred in the Public Employees’ Retirement System (PERS).  According to Ms. Portillo, public employees and retirees throughout the country looked to their state insurance plans to provide group policies that provided the same premiums for their participants.  She indicated that if other states provided a subsidy to participants, it was the same for all participants.  However, pointed out Ms. Portillo, that was not true in Nevada because the program was not initially designed for all public employees and retirees, but only for “state” employees and retirees.  Ms. Portillo testified that later on, when other public employees had asked why they were not part of the program, they were brought into the plan but were called “non-state participants.”  Those non-state participants were not rated as part of the group, unbeknownst to them.

 

Ms. Portillo testified that as an example, a non-Medicare state retiree participant with 20 years of service paid $5.59 a month for the self-funded plan, and a non-Medicare non-state retiree paid $711 per month for the same plan.  When that figure was doubled for a non-state retiree and spouse, the premium was $1,435 per month.  Ms. Portillo explained that meant that the premium cost was either more than, or within dollars of, their entire PERS retirement benefit.  After years of public service non-state retirees were required to make a decision whether to drop their medical insurance in order to pay other bills. 

 

Ms. Portillo noted that members of the Committee had no control over the decisions made throughout the years, but did have the opportunity to correct the injustice.  The Committee’s decision would affect real people who had dedicated their lives to public service in Nevada.  Ms. Portillo testified that without the help of the Legislature, the number of participants in the state’s medical insurance would probably drop because participants could not afford the premiums, and in most cases participants would be unable to secure insurance elsewhere.  Ms. Portillo noted that would make the paperwork easier for those who handled the insurance for the state, but it would be at the expense of real Nevadans who would become sad statistics. 

 

Ms. Portillo asked the Committee to please help correct that injustice.  She indicated that non-state retirees were asking that the plan call all participants “public participants,” and that it provide the same group insurance and premiums for those who were already a part of the public program, or those who wished to become a part of it.  Ms. Portillo stated she was asking for the Committee’s support of A.B. 286 with an effective date of July 1, 2003. 

 

Judy Cameron, retired high school principal in Clark County, advised that several issues discussed earlier by the Committee had “hit home” with her.  She explained that she had sent many e-mails and letters to legislators regarding the issue, and the foremost question in her mind was, “Where had the PEBP been?”  Ms. Cameron pointed out that the Legislature did not have the numbers it needed, nor could non-state retirees access the necessary numbers.  According to Ms. Cameron, there was not a “group” state insurance policy, and there would not be one until there was a single premium for all participants.  Ms. Cameron opined that there were insurance companies and people willing to develop a plan that everyone could be proud of, and a plan that would provide coverage for the entire group, which would save the state a tremendous amount of money.  Ms. Cameron suggested that concept should be pursued through an interim study committee, because there was no question but that a plan could be provided.  Non-state retirees as well as state participants were currently paying rates that were not a true premium.  She believed some action should be taken regarding the PEBP in order to address the problem.

 

Scott MacKenzie, Executive Director, State of Nevada Employees Association/American Federation of State, County and Municipal Employees  (SNEA/AFSCME) Local 4041, voiced support for A.B. 286 under the current system, or the way the system stood at the present time.  Testimony presented over the past few weeks indicated that many non-state retirees would not have joined the fund if they had understood what was happening in the fund.  Mr. MacKenzie agreed that non-state retirees should have the opportunity to go back to the medical plan available through the entity from which they retired, if that was what they chose to do. 

 

Mr. MacKenzie reported that the SNEA also supported the idea of a subsidy by cities and counties, however, was aware of the extreme difficulty of such an undertaking and did not see how that would occur.  Conceptually, stated Mr. MacKenzie, the SNEA believed that local entities should subsidize their retirees, however, previous comments regarding the collective bargaining benefits received by employees of some entities was a reality that would be very difficult to overcome.  Those employees who participated in collective bargaining chose not to address the “back end” of retirement.  Mr. MacKenzie stated the SNEA was also very concerned about commingling, and opined that in the short run, the subsidies would prove helpful, however, in the long run it would probably end up costing state workers more money because the existence of that subsidy could not be guaranteed. 

 

Finally, stated Mr. MacKenzie, health insurance in Nevada had to be viewed as more of a long-term goal in concept, as opposed to “putting out the fires,” and he noted that the bill under consideration, A.B. 286, would only “put out the fires.”  Mr. MacKenzie did not believe the state could establish a health care system under that type of duress, and he also believed that the interim study proposed by A.C.R. 10 should take place.  Mr. MacKenzie remarked that everyone should come to terms with the reality that health insurance had changed dramatically over the past decade, and he pointed out that years ago 20,000 participants in a fund was considered good and would result in a better “deal.”  According to Mr. MacKenzie, today the PEBP could not secure an HMO in the north with that number of participants, and everyone should recognize that the market was leveraging the plan rather than the plan using its market leverage.  Mr. MacKenzie commented that a review of the free market aspect of health insurance indicated there were over 140,000 employees, yet the plan divided those employees into separate funds, and the current problem was the consequence of that action. 

 

Mr. MacKenzie noted that there were various collective bargaining agreements among local entities, but he had talked to persons involved in those agreements and those health insurance funds were also experiencing problems.  He believed that a new health insurance vision could be established, which would allow the necessary funds for commingling to be realized through attrition.  Mr. MacKenzie asked the Committee to take a long-term view of health insurance, and voiced sympathy for the problems faced by non-state retirees.  He totally agreed that relief was needed, however, on July 1, 2003, there would be many active state workers protesting the changes that had occurred in the self-funded plan based on decisions made by the PEBP Board in the last few weeks.  Mr. MacKenzie informed the Committee that he had already received phone calls regarding those changes.  According to Mr. MacKenzie, the Legislature could engage in “putting out fires,” or it could put together a long‑term plan that actually created a comprehensive program and corrected the current problems in the self-funded plan. 

 

Vice Chairwoman Giunchigliani voiced appreciation to Assemblywoman Koivisto for bringing A.B. 286 forward because it gave the Committee an opportunity to focus on the long-term issue, even though the dates were somewhat staggered.  If the Committee were willing to approve General Fund dollars to offset the initial cost of commingling, a better plan for the long-term needs could then be devised.  Vice Chairwoman Giunchigliani noted that even local governments who offered health insurance plans recognized that within the next five to six years, in many instances those entities would find themselves in the same predicament as that of the state because the plans would begin to include more retirees than actives.  She believed that local governments needed some assistance and planning for the future as well. 

 

Gary Wolff, representing the Teamsters Local 14, Nevada Highway Patrol Association, and various state employees, wanted to compliment the authors of A.B. 286 because it had brought a very serious matter to the attention of the Committee.  However, the organizations he represented shared the same concerns as those voiced in earlier testimony regarding the funding mechanisms that would have to be put into place to make the bill work.  The other concern, stated Mr. Wolff, was that in 1999 the Nevada Highway Patrol Association had asked that the Legislature either correct the self-funded plan, or allow the Association to create a separate health plan.  Mr. Wolff explained that the Association was still part of the self-funded plan, and it still had not been “fixed.”  The Legislature had spent millions and millions of dollars pumping up the plan, and now it was faced with a health care policy worse than ever before.  Mr. Wolff referenced the $1,000 deductible, and the fact that single participants would be required to pay an out-of-pocket premium. 

 

Mr. Wolff found it difficult to determine why non-state retirees would want to join the state plan because it was “terrible” and did not satisfy the needs of the participants.  He stated there were many Nevada Highway Patrol officers, and other employees, that could not afford to put dependents on the health care plan because it was so expensive.  Again, Mr. Wolff thanked those who brought A.B. 286 forward in order to start the process moving toward a better plan in the future.  Mr. Wolff also concurred with the concept of an interim study in order to determine the funding aspect and emphasized that state employees could not suffer additional future impacts.

 

Nita Stonestreet, a native Nevadan from Winnemucca, advised the Committee that she had retired as a teacher from the Clark County School District in August of 2001, after 30 years of service at inner-city high schools.  Ms. Stonestreet revealed that she was considered a non-state retiree, which was a label that had not been explained to her at the time she enrolled in the state plan. 

 

Ms. Stonestreet informed the Committee that she was not Medicare-eligible because she was hired prior to 1986, was divorced, and did not have a second income.  She stated that when she budgeted for retirement, the premium for health insurance through the Teachers’ Health Trust and the state of Nevada’s self-funded plan was approximately the same at about $350 per month.  Ms. Stonestreet explained that she had researched the insurance issue thoroughly before deciding to enroll in the state’s self-funded plan.  In October of 2001 the Teachers’ Health Trust was $4 million in debt, thus, Ms. Stonestreet chose the state plan, thinking that the larger pool would be safer.  Little did she know that $50 million would be infused into the state insurance system over the past four years, and that the system would continue to “bleed.” 

 

According to Ms. Stonestreet, the first PEBP meeting she attended was in August of 2002 and she was shocked to learn that her premiums would probably increase to $515 per month beginning in January of 2003.  She asked the Committee to imagine her shock when she opened the envelope and discovered that her premium would be $711 beginning January 1, 2003, an increase of 110 percent. 

 

Ms. Stonestreet indicated that the plan recently approved by the PEBP would once again provide very little relief to non-state retirees.  In addition, participants in the self-funded plan were required to pay the deductible twice, which was unfair to all participants.  Ms. Stonestreet revealed that the PEBP Web site homepage stated that legislation had to be passed and signed by the Governor prior to April 3, 2003, for rate changes to occur in the upcoming plan year.  Ms. Stonestreet advised that she had been actively seeking answers to her questions concerning the cost of non-state retiree insurance since August of 2002.

 

Per Ms. Stonestreet, one of her retirement dreams was to move back to northern Nevada, however, that would be impossible at the present time because she was a participant in an HMO plan in southern Nevada.  Ms. Stonestreet advised the Committee that she would ask not to be called a “non-state retiree,” but rather a “participant” in the health plan with the state of Nevada.  The second and most important issue, according to Ms. Stonestreet, was that all participants be commingled, which would be accomplished through passage of A.B. 286.

 

Vice Chairwoman Giunchigliani noted that currently the HMO option was only available in the southern part of the state, and northern participants were not offered that opportunity.

 

Terry Hickman, President, Nevada State Education Association (NSEA), stated he was a high school counselor and future retiree.  Recently, said Mr. Hickman, the Assembly had passed a joint resolution regarding the penalty for public service within the Social Security system, and it was well known how unfair that penalty was because the Assembly passed that resolution unanimously.  According to Mr. Hickman, perhaps the cruelest penalty for public service was retirement.  Retired teachers and support professionals recently received a 100 percent premium increase, and the choice to lower the premium rate was a $5,000 deductible.  Mr. Hickman stated if those participants had selected the same insurance benefits that they formerly enjoyed, the premium rates would have increased significantly. 

 

Mr. Hickman pointed out that retirement was an issue that everyone would face, and it was a significant challenge to the state of Nevada because correcting the problems within the insurance plan would take the effort of all parties involved in the state plan.  Every association and employee group needed to look for the long-term answer, and Mr. Hickman stated that the NSEA was in total support of A.B. 286.  However, the NSEA realized that the real answer was “out there somewhere,” and a group effort was needed to discover an answer that would solve the long-term issues of health care.

 

Mr. Hickman complimented those who supported the bill and believed it would be a giant step forward in the review of the factors and issues facing retirees.  He stated that when looking into the faces of retirees he hoped everyone realized they would someday reach that point.  The retirees of today should not be forced to ask whether they should pay their health care premium or their house payment, which was the choice that some retirees would soon be forced to make, which amounted to cruel and unusual punishment.  Mr. Hickman emphasized that public service should not mean that a retiree’s dreams would have to be placed on hold because that retiree was forced to go back to work, or that the retiree would live in daily fear because health insurance coverage had been dropped, which would mean second-rate care and the possibility of being financially ruined because of an illness or accident.  According to Mr. Hickman, participants required a long-term answer and looked to the Legislature to discover the solution that would make a difference for today’s Nevadans, and for all the tomorrows that retirees would face together.

 

Vice Chairwoman Giunchigliani stated it was her understanding that recent legislation had passed which would not impede review of a statewide group and could offer an opportunity to the rural counties that were considering a consortium.  Mr. Hickman stated that was also his understanding. 

 

Matti Smith informed the Committee that she had retired in 1996 from the Clark County School District, and at that time she was considered a non-state retiree.  She explained that she had contributed to the Public Employees’ Retirement System (PERS) for 30 years, and had contributed to the Public Employees’ Benefits Program (PEBP) since 1985.  Ms. Smith stated she had been quite comfortable and happy with the state plan.  She stated that she had confidence and believed in government, and had always believed that she would be taken care of because she was a hard worker.  According to Ms. Smith, retirees were given a choice between state coverage and the plan offered by the school district.  After significant research, Ms. Smith decided to remain with the state because she had been enrolled in that plan and trusted the state; she also believed that the state would provide for its health plan participants.

 

Ms. Smith voiced support for A.B. 286 and hoped that the Committee would also support the bill, or similar legislation, even though there were problems that needed to be addressed.  Ms. Smith explained that she was the parent of a 14‑year-old son, and her insurance premiums were approximately $1,200 per month, which was more than her house payment.  She asked that the Committee take the bill into consideration and treat the non-state retirees with respect and equity, as it was hoped that all participants would be treated.

 

Michael Gillins, representing the Nevada Conference of Police and Sheriffs and the Las Vegas Police Protective Association, prefaced his comments by saying that both organizations certainly supported the fact that changes were needed regarding health care services provided at the state level, and with the plan itself. 

 

By way of background, Mr. Gillins explained that his organization had been involved for the past two years on revisions of the health care system, because that system had been in a similar situation as that of the state, and had been  $4.6 million in the “red.”  The situation simply continued to worsen as time went by, and Mr. Gillins explained that his organization had undertaken a process of revamping the system and had entered into a trust.  He believed that was probably unique in Nevada because it was an employee management trust where there was equal representation in the trust from both management and employees.  Mr. Gillins reported that within the past two years, through proper guidance from experts in the field of health care, the trust had been able to turn the plan around from a $4.6 million deficit to a positive balance of $2 million, and the plan was currently building reserves. 

 

Mr. Gillins believed that, with proper management, resources existed that would allow the state to “take control of the bull and wrestle it to the ground,” if those resources were properly utilized.  Mr. Gillins stated it was also important to keep in mind that it would not be fiscally prudent to saddle local governments with subsidies of any kind in an attempt to make whole a plan that was experiencing problems.  He believed that subsidies tended to create bigger problems “down the road,” with people tending to ask for more and more as time went on, rather than attempting to remedy the problems that existed in the programs. 

 

According to Mr. Gillins, his organization’s existing trust did not receive subsidies, however, had taken steps to create its own subsidy by allowing employees to contribute to their own retirement subsidy in order to defer the escalating cost of health care.  He believed that such programs could be established at the state level and would probably be better suited in resolving the issues facing the state, perhaps not immediately, but over the long term.

 

Vice Chairwoman Giunchigliani thanked Mr. Gillins for his testimony and hoped that he would participate in the interim study.

 

Ronald Dreher, President, Peace Officers Research Association of Nevada, stated that 20 years ago he had entered into the association business because of the health care dilemma in the City of Reno.  The City of Reno had placed its employees and management together in order to construct a program for 1,200 participants, and to date the program was still affordable for employees.  Mr. Dreher stated that the Association would not oppose the bill or its concept, however, would oppose the commingling of local government funds with state funds in an effort to subsidize the plan.  In that regard, stated Mr. Dreher, the Association would recommend, encourage, and support a study that would hopefully include all involved parties so the Association could provide input regarding how to resolve the problem once and for all. 

 

Vice Chairwoman Giunchigliani declared the hearing on A.B. 286 closed, and opened the hearing on A.B. 445.

 

Assembly Bill 445:  Makes various changes related to Medicaid. (BDR 38-482)

 

John Liveratti, Social Welfare Program Chief, Compliance Unit, Division of Health Care Financing and Policy (HCF&P), Department of Human Resources (DHR), introduced Gary Stagliano, Deputy Administrator, Welfare Division, DHR.  He explained that the HCF&P and the Welfare Division of the DHR had requested and would support A.B. 445 to amend Nevada Revised Statutes (NRS) 422, and to rescind NRS 422.2725 in its entirety. 

 

The DHR referred to NRS 422.2725 as the “nest egg” provision, and Mr. Liveratti explained that the intent of the provision was to allow individuals with income above the Medicaid standard to protect that income and become eligible for Medicaid.  The provision required the purchase of an approved long‑term-care insurance policy and the use of that insurance for a period of 36 months before Medicaid eligibility could be approved.  Mr. Liveratti indicated the provision was passed via S.B. 370 of the Seventieth Session to protect an annual household income limit of less than $200,000 above the Medicaid standard, which was 300 percent of the federal benefit rate.  Mr. Liveratti remarked that Medicaid regulations would support a provision protecting assets, but not income, and when the proposed state plan amendment was submitted to the former Health Care Financing Administration, now known as the Center for Medicare and Medicaid Services, the state was informed that its Medicaid state plan amendment, which protected the incomes delineated in NRS 422.2725, would not be approved. 

 

As a result, explained Mr. Liveratti, the “nest egg” provision had caused a great deal of confusion with the public; insurance salesmen were selling long-term- care insurance to individuals, citing the law as the reason why it would be a good investment.  Per Mr. Liveratti, two issues should be considered if that section of the NRS was not rescinded:  (1) NRS 422.2725 had not been acted upon as passed because the Center for Medicare and Medicaid Services would not approve the state plan requirements; and (2) Insurance salesmen were failing to indicate that their product was never approved by the Director of the DHR, as required by the law, even though the product they sold was viable and approved by the State Insurance Division. 

 

Mr. Liveratti opined that the state and the HCF&P Division should expect nothing but negative press and public relations if that particular NRS was allowed to remain on the books.  That would be painfully true when the first person who had purchased and used the long-term-care insurance for the required three-year period applied and expected to be approved for Medicaid because of NRS 422.2725, but was subsequently denied Medicaid eligibility due to excess income. 

 

Mr. Stagliano informed the Committee that the remaining portions of the bill dealt with the section of NRS 422 that pertained to the Medicaid estate recovery program currently operated by the Welfare Division.  The program was federally mandated and allowed the Division to recover correctly paid Medicaid benefits from the estate of a deceased Medicaid recipient.  Mr. Stagliano explained that when the Division of HCF&P was created in 1999, Medicaid estate recovery remained behind with the Welfare Division.  He noted that at one point the Welfare Division and Medicaid were commingled, however, were separated in 1999.  

 

The program had inadvertently been left behind with the Welfare Division, and Mr. Stagliano explained that the program would be better operated at the Department level in order to provide the Director of the DHR with the discretion to decide what agency should administer the program.  Currently, remarked Mr. Stagliano, when there were Medicaid estate recovery actions, the money collected was deposited directly into an account established for that purpose within the Division of HCF&P, which would offset needs and benefits for other persons in the future.  According to Mr. Stagliano, since the Welfare Administrator had no authority for distribution of the money collected, it was requested that the authority for the operation of the program be established at the departmental level, which would allow for the greatest amount of flexibility should any reorganization of the Department occur in the future.

Mr. Stagliano indicated that A.B. 445 also proposed an amendment to the definition of “undivided estate” by removing community property transferred to a spouse and adding annuities and declaration of homestead.  Although the transfer of community property was in state law, Mr. Stagliano noted that the Center for Medicare and Medicaid Services would not approve that as part of the Nevada Medicaid estate plan.  Nevada annuities and declaration of homestead were covered in current state law under NRS 422.054 under the term, “other arrangement.”  However, due to the number of questions received, the Department wished to clarify annuities and declaration of homestead in the statute to conform to the Medicaid state plan. 

 

Mr. Stagliano testified that A.B. 445 also included new language in Chapter 115, homesteads.  The bill added language that exempted the Medicaid estate recovery program from the operation of the Nevada homestead provisions.  Mr. Stagliano explained that there had been several instances in the recent past where the state of Nevada had not been able to maintain a lien against the real property interests of deceased recipients.  In two cases, the surviving spouse filed bankruptcy after the death of the recipient and claimed the homestead exemption in the bankruptcy.  Mr. Stagliano reported that in both cases the state was unable to maintain a lien against the property and had the state’s claim against the undivided estate discharged in the bankruptcy of the surviving spouse. 

 

In another case, stated Mr. Stagliano, the surviving children of a deceased recipient asserted a claim of homestead, and a negotiated settlement for a lien for less than the full value of the state’s claim was reached.  In all three cases, the recipients were able to receive the free medical care provided by Medicaid and leave substantial property to their heirs without the state being able to recover Medicaid benefits as required by state and federal law. 

 

As a housekeeping measure, Mr. Stagliano indicated that the Welfare Division would ask for one additional change in A.B. 445 and that would be to strike Section 7.  When the bill draft was returned Section 7 referenced NRS 422.291, which spoke to the transfer of property and included some prohibitions in Medicaid eligibility.  Mr. Stagliano remarked that the state recovery bill dealt with the collection of monies after the death of a recipient, and after benefits had already been received by the deceased recipient.  He believed Section 7 would create some confusion if allowed to remain in the bill as it dealt with the “before” benefits versus A.B. 445, which dealt with “after” benefits.

 

Vice Chairwoman Giunchigliani stated that for the purpose of clarification Section 7 would be deleted, and the main intent of the bill would be to repeal the language that did not comply with federal policy.  The bill also recommended that the Director of the DHR would administer the provisions of NRS 422.  Mr. Stagliano concurred that it would be a DHR proposal rather than a Welfare or Medicaid proposal.  Vice Chairwoman Giunchigliani asked whether the language in Section 4 was necessary. 

 

Mr. Stagliano asked whether Vice Chairwoman Giunchigliani was referring to the verbiage in that section which read, “The State Welfare Administrator shall . . . .”  Vice Chairwoman Giunchigliani replied in the affirmative, and asked whether the Administrator would still coordinate, cooperate, and keep a complete and accurate record of proceedings; she noted that the same verbiage was used in Sections 3 and 4.  Mr. Stagliano stated that was correct. 

 

Vice Chairwoman Giunchigliani inquired whether there was further testimony to come before the Committee and hearing none, declared the hearing on A.B. 445 closed.  The Vice Chair opened the hearing on A.B. 310

 

Assembly Bill 310:  Increases number of days of paid leave that must be given to certain public officers and employees serving under military orders. (BDR 23-1195)

 

Assemblywoman Genie Ohrenschall, District No. 12, testified that as the sponsor of A.B. 310, along with 28 other Assemblymen, she would urge the Committee’s immediate action on the very timely and important bill.  Ms. Ohrenschall stated that the bill was very simple to explain.  Currently, the state of Nevada provided 15 days of paid leave for any public employee who served as a military reservist or in the National Guard.  Ms. Ohrenschall remarked that A.B. 310 would increase the paid leave to 45 days. 

 

According to Ms. Ohrenschall, in peacetime, public employees who served in the reserves or National Guard had an annual requirement to serve two weeks of training and one weekend per month throughout the year.  With the increased complexity of the technology of war, and America’s dependence upon voluntary military service, Ms. Ohrenschall reported that training needs were increasing and three weeks of leave was no longer sufficient.  She noted that many of Nevada’s counties already provided 30 days of paid leave and supported A.B. 310 wholeheartedly. 

 

Ms. Ohrenschall explained that the bill had been drafted prior to the beginning of the war in Iraq, but the war made clear the need for longer periods of military leave.  A.B. 310 would provide some much needed assistance for the families of Nevada’s public employees who were making the ultimate sacrifice of sending a loved one into military service and, in some cases, into combat.  According to Ms. Ohrenschall, at the hearing for the bill by the Assembly Committee on Government Affairs, it was suggested that the effective date be amended to “upon passage and approval.”  Ms. Ohrenschall urged the Committee to include that amendment, and would also ask that the Committee direct the Legal Division of the Legislative Counsel Bureau (LCB) to review the need for possible changes to the existing language in NRS 281.145 to determine whether federal law necessitated some changes to the phrase, “. . . upon his request, to serve under orders . . . ,” found in Section 1 of the bill. 

 

Ms. Ohrenschall testified that in 1994, the federal government enacted the Uniformed Services Employment and Reemployment Rights Act (USERRA) to provide a minimum level of protection for military reservists and National Guardsmen.  Although A.B. 310 would go above and beyond the rights afforded under the USERRA, Ms. Ohrenschall stated there might be some minor changes that would be appropriate in order to conform to the federal law. 

 

That basically concluded Ms. Ohrenschall’s presentation, however, she believed that the fiscal note should be mentioned.  She pointed out that fiscal notes were generally written to take into account the worst possible scenario that could occur, thus, the fiscal note attached to A.B. 310 was written to take into account the fact that any person who joined the reserve forces might be affected by the increase in military leave to 45 days.  Reality dictated that it actually would affect only those workers who were assigned alternative schedules and worked weekends and who, when absent for the purpose of serving their National Guard or reserve duty, missed the possibility of receiving vacation pay because their vacation time was utilized to fulfill their National Guard or reserve duty.  Ms. Ohrenschall emphasized that those were the people who had the greatest need, and of those there were probably 190 employees who could be affected by the bill and of those, 77 worked in correctional facilities where alternative schedules were utilized.  Review of the fiscal note from a reasonable point of view regarding the people who were actually likely to be covered by the bill, Ms. Ohrenschall opined that the fiscal note would be much less than originally predicted. 

 

Ms. Ohrenschall introduced Scott MacKenzie, who would present testimony to the Committee.  Before recognizing Mr. McKenzie, Vice Chairwoman Giunchigliani asked for clarification regarding the aforementioned USERRA.  Ms. Ohrenschall replied that the federal law was passed in 1994 and provided federal minimum limits to protect reservists.  Vice Chairwoman Giunchigliani inquired whether the USERRA prescribed a certain number of days, or did it simply offer protection that an employee could not be terminated if called to duty.  Ms. Ohrenschall stated that as far as she was aware the Act specified number of days, and the only issue that should be checked would be to ascertain whether the verbiage of the bill conformed to the verbiage of the USERRA. 

 

Vice Chairwoman Giunchigliani inquired whether the 45-day period referenced in A.B. 310 was also a stipulation of the federal law.  Ms. Ohrenschall explained that the 45 days was established after a review of the situation regarding reservists in Nevada and the increasing need for military training.  Vice Chairwoman Giunchigliani noted that perhaps Mr. MacKenzie could elaborate on the increased number of days from 15 to 45.

 

Scott MacKenzie, Executive Director, State of Nevada Employees Association/American Federation of State, County and Municipal Employees Local 4041 (SNEA/AFSCME), explained that when an employee belonged to a reserve component of the Armed Services, he/she would use approximately 36 days automatically, for example, 14 days for annual training and 1 weekend per month for 11 months, or 22 days.  The current state employee received 15 days of military leave, and if the employee did not have weekends off, which Mr. MacKenzie stated was the key to the bill, he/she had to use annual leave.  If the state allowed the employee to have 45 days, that would provide additional days in case the reservist was deployed to battle.  Mr. MacKenzie indicated that the focus of the bill was to provide relief for those employees who worked alternative schedules, and were actually scheduled to work weekends when asked to spend one weekend per month in reserve training. 

 

Per Mr. MacKenzie, when the bill was considered in the Assembly Committee on Government Affairs, Assemblyman Bob McCleary, District No. 11, commented that he had been a member of the reserves for six years, and had amassed zero vacation days during that time period because all his vacation time was used for his reserve training.  He also made the comment that training was not vacation time, and Mr. MacKenzie asked the Committee to imagine going five years without a vacation and then being deployed into battle where sleep and rest were stretched to the limit.  He believed that was asking for a big sacrifice from the reservists, and A.B. 310 would cover all the training scenarios for people who worked alternative schedules. 

 

According to Mr. MacKenzie, the fiscal note on the bill involved all reservists, but the bill itself was designed simply to assist people who worked weekends and did not have sufficient time allowed by the state to cover reserve training.  Consequently, explained Mr. MacKenzie, those employees were required to use their annual leave in order to be able to fulfill their military obligations.  Mr. MacKenzie pointed out that the SNEA had been informed that there were also situations where employees had been fired, and there had been a struggle between the military and the state of Nevada over the situation. 

 

Mr. MacKenzie introduced Steven Ervin, the SNEA member who had brought the resolution forward.  Mr. Ervin was a Senior Master Sergeant with 33 years in the Air Force Reserves and was employed as a correctional officer at the High Desert State Prison.  Mr. MacKenzie informed the Committee that the fiscal note attached to A.B. 310 referenced 190 employees, and of the 56 employees currently called to active duty, 30 were correctional officers.  It was his understanding that the number of correctional officers included in the pool of 190 people referenced in the bill was 77, which would not even impact 50 percent of the total because correctional officers were the employees with the alternative schedules.  Mr. MacKenzie explained that the fiscal note was far removed from reality and he did not have the exact figures, however, wanted to put things in context for the Committee.  He reiterated that the point of the bill was to allow reservists who worked under alternative schedules to utilize the time, rather than the average person who worked a regular shift. 

 

Assemblywoman Chowning asked for clarification, and noted that A.B. 310 was not for the reservists who could use their weekends, but rather for those who had to utilize annual leave to attend weekend training and would therefore have no vacation time.  Mr. MacKenzie emphasized that he could not guarantee that employees who worked regular schedules would not use any of the time for reserve training, because they very well could.  However, theoretically the only employees who would utilize the 45 days would be those who worked weekends and had to use their annual leave for reserve training.  Per Mr. MacKenzie, the 45 days would assist in determining their schedule, and would leave 9 days to prepare for deployment if they were called into active service. 

 

Steven Ervin informed the Committee that he was a Senior Master Sergeant with the 50^th Aerial Port Squadron, based at March Air Reserve Base, California, and was also a Senior Correctional Officer for the Nevada Department of Corrections (NDOC) at High Desert State Prison.  Mr. Ervin explained that he had over 33 years military service, 12 active duty and 21.5 years in the reserve program, and had been in the military since 1969.  According to Mr. Ervin, over the years he had seen the military as well as the reserve programs change for the better, but also with more demands on reserve and National Guard programs.  With the technology and advances of today a person had to almost be full-time military in order to keep abreast of the technology, which were mostly requirements for the reserve program.  Mr. Ervin stated that reservists were required to train, and train hard, once a month, each and every month, during weekend drills on some aspect of their squad’s particular specialty. 

 

According to Mr. Ervin, when reservists participated in the two-week active duty training they worked side-by-side with their active duty counterparts to determine whether the monthly training had paid off, and also to discover the weak areas, and place more emphasis on addressing those areas to once again be in full compliance.  He believed it was truly a “win-win” situation for all involved.  Mr. Ervin announced that the knowledge gained from the two-week active duty tour was brought back to the home station and shared with appropriate units to ensure that everyone had the same understanding of procedures.  As far as training was concerned, Mr. Ervin reiterated that the requirements were constantly increasing and becoming more and more demanding.

 

Mr. Ervin informed the Committee that state employees received 15 days per year to satisfy their military obligations, which was adequate at one time, but as previously mentioned, it was not adequate at the present time.  Not every state agency operated on a 24-hour basis such as the NDOC, the Division of Parole and Probation, and the Highway Patrol within the Department of Public Safety, to name a few agencies that worked 24-hour shifts with partial weekends on call.  According to Mr. Ervin, the best case scenario would be an employee who earned 15 days vacation a year with weekends off, who would utilize 10 days per year to attend the 2-week training, leaving 5 days for other training.  Mandatory schools were anywhere from 5 to 15 days, which would bring the total to minus 5 days.  Mr. Ervin stated that there were also specialty schools that were from 5 to 15 days in length, and were also necessary in order to maintain certain requirements.  The employee would be minus 10 to minus 20 days after such specialty training, and Mr. Ervin noted that did not cover additional schooling for advancement or promotions.  He testified that two additional examples were the non-commissioned officer (NCO) academy as well as the senior NCO academy, which were both six weeks resident programs.

 

Continuing his presentation, Mr. Ervin noted that some of the hidden advantages as far as the state was concerned were employees that were well groomed, very well disciplined, knew how to follow orders and instructions as well as give them, and had attended some of the best professional development courses available, let alone professional leadership courses.  Mr. Ervin advised the Committee that reservists were constantly bombarded with chemical warfare training, weapons training for several types of weapons, and first aid training with safety training paramount.  Mr. Ervin emphasized that everything done by reservists had safety in mind, and followed Occupational Safety and Health Administration (OSHA) standards.  Immunizations, for example, flu shots, tuberculosis tests, and more, provided a savings to the state, just to name a few.  Mr. Ervin commented that the 190 employees in the military were required to maintain higher immunization standards than those required by the state, which was a substantial savings to the state, plus the fact that the military required reservists to be physically fit. 

 

Mr. Ervin opined that the proposed 45 days would be adequate for the average military member, and with the present state of world affairs, reservists never knew from day to day when they might be activated, but it was their job to be ready.  In the past, after exhausting the 15 days, reservists were required to use personal leave, which reduced family time, and Mr. Ervin noted that some employees worked overtime to compensate for the time missed because of their military requirement.  He also noted that at times, reservists were allowed to switch days with coworkers to make up for the time off.  Mr. Ervin stated that not all reservists would utilize the entire 45 days, but it would assist the managers who presently dealt with reservists who needed weekends off for training.  He opined that it could also be used as a recruiting tool for State Personnel in hiring newly separated, active duty members.

 

In closing, Mr. Ervin remarked that it was an honor for him to testify before the Committee and share A.B. 310; he reiterated that it would be a “win-win” situation for the state, as well as reserve and National Guard programs.  Mr. Ervin noted that those programs consisted of volunteers that were constantly giving, not only to their country, but also to the state of Nevada.

 

Vice Chairwoman Giunchigliani thanked Mr. Ervin for his testimony and voiced appreciation for his service as well. 

 

Ms. Ohrenschall informed the Committee that there was a booklet published by the federal government regarding the federal statute, and copies would be provided to members of the Committee.  Vice Chairwoman Giunchigliani stated that the Committee would make note that the fiscal note would affect 75 people rather than the 190 as originally indicated. 

 

Vice Chairwoman Giunchigliani inquired whether there was further testimony to come before the Committee regarding A.B. 310. 

 

Gary Wolff, representing the Nevada Highway Patrol Association and Teamsters Local 14, indicated that he wanted to go on record in support of A.B. 310. 

 

Michael Gillins, representing the Las Vegas Police Protective Association and the Nevada Conference of Police and Sheriffs (COPS), stated that he would concur with previous statements, and explained that local government had begun utilizing an increase in military leave time because, in law enforcement, individuals working shift work were not always off on weekends and were required to use vacation time to attend military activities.  Mr. Gillins stated that would leave those employees with no decompression time with their families in order to unwind and to decompress from the daily stresses of their job.  Mr. Gillins stated that both the Association and the COPS would rise in support of A.B. 310, and urged the Committee to support the bill.

 

Vice Chairwoman Giunchigliani asked how many days off local entities allowed their employees for military leave.  Mr. Gillins replied that 30 days was the time frame allowed by local entities; that number had been implemented approximately two years ago to determine whether that would be sufficient.  Vice Chairwoman Giunchigliani asked whether that was part of the employees’ negotiated agreement with local entities.  Mr. Gillins stated that was correct.  Vice Chairwoman Giunchigliani said that unfortunately, state employees did not have negotiated agreements. 

 

Major General Giles Vanderhoof, The Adjutant General, State of Nevada, commended the Army and Air National Guard of Nevada, and thanked Assemblywoman Ohrenschall for authoring A.B. 310, and for her support of the military.  General Vanderhoof stated he had a tremendous obligation to the soldiers and airmen in Nevada to see that they had appropriate benefits to cover the many duties required of them by the military.  At the same time, General Vanderhoof indicated that he had an obligation to the state, and felt compelled to point out that there were many types of active duty for which the military sought volunteers.  Other than the presidential recalls within the past year, every other form of active duty had been handled with volunteers, which was typical of Nevadans, particularly in the National Guard.  General Vanderhoof advised that there were always more people stepping forward than the actual requirement.  While he could appreciate the problems faced by shift workers, he pointed out that there was the potential that the provisions of the bill could apply to all 190 employees.  According to General Vanderhoof, in an active duty situation a person would earn double pay because that person would be paid by both the state and the military, which was one reason why so many state employees had enlisted in the National Guard. 

 

General Vanderhoof noted that the comment made by Senior Master Sergeant Ervin was correct, the Nevada National Guard was not the “15 days of active duty per year, 2 days per month National Guard” any longer, and there were additional requirements.  General Vanderhoof emphasized that the state was in a unique situation at the present time, and he indicated he would like to offer a suggestion for the Committee’s consideration.  General Vanderhoof stated he would support A.B. 310, but suggested that the Committee consider enacting the provisions only throughout the next biennium, with reconsideration regarding the situation during that time to determine whether it would be necessary to continue the provisions.  He pointed out that if the country was not involved in a situation such as Bosnia, Afghanistan, Iraq, or Kosovo, the Legislature might want to revisit the provisions.  General Vanderhoof believed that should be considered, as the provisions might not be needed indefinitely.  According to General Vanderhoof, shift work did not appear to pose as much of a problem for employees enlisted in the Air National Guard because missions were flown every day of the week, and if a reservist were unable to attend on the drill weekend, that person could attend drill during the week. 

 

In conclusion, General Vanderhoof voiced thanks to all concerned for the bill and believed the military needed the support and assistance at the present time, however, he would recommend that the Legislature revisit the provisions again during the 2005 Session, assuming that the Committee was willing to pass the bill.  He believed testimony at that time would determine whether the provisions should be continued.

 

Vice Chairwoman Giunchigliani informed General Vanderhoof that the Committee would take his suggestion under consideration. 

 

Ronald Dreher, President, Peace Officers Research Association of Nevada, stated the Association would rise in support of A.B. 310, and urged the Committee to also support the bill. 

 

Vice Chairwoman Giunchigliani thanked Mr. Dreher for his testimony and asked if there was further testimony regarding A.B. 310 and hearing none, closed the hearing.  The Vice Chair opened the hearing on A.B. 454.

 

Assembly Bill 454:  Directs Legislative Auditor to conduct performance audit of Public Employees’ Benefits Program. (BDR S-1315)

 

Vice Chairwoman Giunchigliani advised that the bill had been requested as a Committee introduction from Ways and Means because it was believed that due to the continuing issues regarding the Public Employees’ Benefits Program (PEBP) Board during the current session, it appeared to make good sense to have a performance audit proceed along with the proposed interim study. 

 

Paul Townsend, Legislative Auditor, Audit Division, Legislative Counsel Bureau (LCB), pointed out that the Legislative Counsel Bureau (LCB) was prepared to conduct the audit; a similar audit of the group health insurance program had been conducted in 1998, and although there had been organizational and management changes he believed the process and functions would essentially be the same.  Mr. Townsend stated that the PEBP utilized contractors for actuarial use and third party administrators, which would be reviewed.  He noted that many questions centered on the cost and how the plan compared to other plans.  Mr. Townsend stated he would be happy to answer questions.

 

Vice Chairwoman Giunchigliani asked about the effective date, and noted that because the audit would parallel the interim study, she wondered whether November 2004 would be a viable date for receipt of the report so the Governor could anticipate the findings for the budget and the Legislature would also have access to the information for early review.  Mr. Townsend replied that the estimate for the audit was approximately nine months, and he believed the results would be available for review by the Legislative Commission’s Audit Subcommittee in approximately May or June of 2004.  Vice Chairwoman Giunchigliani asked Mr. Townsend to provide a date that he felt would be reasonable for recommendation to the Legislative Commission’s Audit Subcommittee, and for information to be provided to the Governor and the Legislature.  Mr. Townsend believed that November 2004 would be a reasonable date. 

 

Vice Chairwoman Giunchigliani asked Mr. Townsend to review the provisions contained in A.C.R. 10 to see whether he could make recommendations regarding language to ensure that the interim study would address all issues from an audit perspective.  Mr. Townsend indicated that he would review the legislation, and advised that much of what was done in the audit procedure was to provide assurances regarding the data that would be provided to the interim committee so it would have a good historical perspective and level of comfort with the numbers provided.

 

Vice Chairwoman Giunchigliani inquired whether there was further testimony regarding A.B. 454. 

 

Scott MacKenzie, Executive Director, SNEA/AFSCME Local 4041, informed the Committee that SNEA would rise in support of A.B. 454.  Mr. MacKenzie explained that SNEA received phone calls on a daily basis regarding the health insurance plan and the PEBP Board, and he believed it was very, very important that the integrity of the PEBP Board be upheld by conducting such an audit.  Mr. MacKenzie also believed that the state should assess the status of health insurance before a decision could be made regarding how the plan should proceed. 

 

Vice Chairwoman Giunchigliani suggested that perhaps language should be added that pertained to the bidding process, and whether the bids that were let actually resulted in the best plan for the dollars. 

 

Leslie Johnstone, Accounting Officer, PEBP, stated it was very clear across the board that the PEBP staff and Board would support any input and assistance that it could provide.  The PEBP had been working diligently over the past 21 months, first to identify the issues, and then to put together a plan which would address those issues.  Ms. Johnstone stated that an Executive Branch audit had been completed during the past year, and the PEBP had found it very helpful as well.  According to Ms. Johnstone, the PEBP was also fully supportive of the proposed interim study and, in fact, would be suggesting some ways to expand the study to address the issues that had arisen during the last two rating cycles. 

 

To the degree that there would be overlap between the proposed internal audit and the interim study, Ms. Johnstone noted that she would like to sensitize everyone to the limited staff resources at the PEBP in order to work through both areas.  She stated that the PEBP would like to focus on the interim study because it would be more expansive, of broader scope, and longer term in nature.  Ms. Johnstone indicated that if the internal audit moved forward, it might be possible to at least work through scheduling so that there would be sensitivity to staff availability to assist on each effort.

 

Vice Chairwoman Giunchigliani asked whether there was further testimony forthcoming on A.B. 454.

James Richardson, representing the Nevada Faculty Alliance, voiced support for efforts to study the problems incurred by the PEBP Board over the years, and to reach a full understanding of the issues.  He stated he was somewhat concerned because the Board and staff had a tremendous responsibility and he was not clear how and why an audit would be conducted if, in fact, A.C.R. 10 would create an interim study that everyone had spoken so positively about.  Mr. Richardson believed that language could be added to A.C.R. 10 to ensure that the questions alluded to in A.B. 454 were addressed.  He opined that it appeared to be somewhat of an “overkill” to attempt both an audit and an interim study, given the staff problems of the PEBP Board.  Mr. Richardson stated he would pose that as a question, however, wanted to make it clear that the Alliance was certainly in favor of the interim study, and of a further study of all alternatives looking toward the future, in order to determine how to construct a better health plan for public employees in Nevada.

 

Marty Bibb, representing the Retired Public Employees of Nevada (RPEN), stated that RPEN was neutral on the bill, but was certainly not neutral on the issue.  Mr. Bibb stated that the RPEN had looked at the PEBP’s provisions for financial stability reviews and reviews on medical and prescription claims utilization, reserves, and contributions and premiums.  Between A.C.R. 10 and A.B. 454, which Vice Chairwoman Giunchigliani was quite supportive of and which would be heard in the Committee for Elections, Procedures, and Ethics in the near future, Mr. Bibb indicated that it appeared the issue would be to broaden the scope and to find out as much additional information as might be peripheral to the Public Employees’ Benefits Program (PEBP), whatever the vehicle might be. 

 

Assemblyman Goldwater asked whether LCB staff ever questioned the data received from the PEBP Board or the Executive Director.  Mark Stevens, Assembly Fiscal Analyst, Legislative Counsel Bureau (LCB), advised that the LCB received information from the PEBP in advance of each meeting, and on a monthly basis, and had asked any number of questions concerning that data.  He stated that the LCB had not conducted an audit of that particular information but reviewed and asked questions concerning claims experience and utilization.  Mr. Goldwater asked whether there was a reason necessarily to question the data received from the PEBP at the present time.  He noted that the difference between an audit and an interim study would be whether the accuracy of the information the Legislature was receiving was unsure, then he believed an audit would be worthwhile. 

 

Vice Chairwoman Giunchigliani stated it was twofold.  She indicated that there were questions and she had not been able to conduct an analysis personally regarding what drove the rates; she noted that there were also subsidization issues that had never been addressed.  The interim study would be aimed more toward issues such as whether there should be a statewide pool, which employees should be included, what other negotiated agreements would need to be addressed, should the plan be more privatized where all aspects were put out to bid, and multitudinous concepts as well as rates. 

 

Vice Chairwoman Giunchigliani noted that the study would also address the possibility of adopting the federal program that included the “cafeteria plan,” and a variety of issues along those lines.  Vice Chairwoman Giunchigliani stated she saw the audit as complementing the interim study, which was why she had asked Mr. Townsend to review the language of A.C.R. 10 to ensure that the correct numbers were provided should other groups be invited to formulate a statewide pool. 

Vice Chairwoman Giunchigliani inquired whether there was further testimony to come before the Committee and hearing none, declared the hearing on A.B. 454 closed.  The Vice Chair opened the hearing on A.B. 461.   

 

Assembly Bill 461:  Provides that certain money may be distributed to Peace Officers’ Standards and Training Commission and used for certain purposes. (BDR 14-504)

 

Richard Clark, Executive Director, Commission on Peace Officers’ Standards and Training (POST), testified that POST played a vital role in the quality of public safety that was enjoyed throughout Nevada, both in the level of professional service, and the safety of its citizens and visitors.  Whether someone was an unquestioning supporter or a cautious skeptic of law enforcement, Mr. Clark stated that all could agree that having a strong, viable regulatory agency that built and maintained professional standards and quality training for peace officers in Nevada was not a luxury, but rather was an undisputed necessity.  Mr. Clark informed the Committee that POST was a non-General Fund agency and dependent on court assessments; currently, POST was suffering a period of administrative shortfall.

 

Mr. Clark reported that in 1997 SCR 21 of the Sixty-ninth Session directed that a study be completed regarding POST separation from the then Department of Motor Vehicles and Public Safety.  One of the recommendations documented in the final report of the Committee created by SCR 21 of the Sixty-ninth Session was that POST should remain funded under administrative assessments at an acceptable, stable percentage with the ability to build a reserve that would accumulate from year to year.  Per Mr. Clark, A.B. 461 requested that the POST Commission build a reserve up to 30 percent funding above the legislatively authorized budget, and those funds would guarantee POST’s ability to complete its mission in times of administrative shortfall, as had been experienced in the past and the present.  Mr. Clark explained that it would take time to build up the reserve, so it would be a long-term “fix” to the shortfall situation, and he urged the Committee to support A.B. 461.

 

Vice Chairwoman Giunchigliani stated that it appeared POST was looking for a carry-forward to build reserves.  She noted the bill referenced 30 percent of the legislatively approved budget, and asked whether that was the amount POST anticipated retaining with the remainder reverting to the General Fund.  Mr. Clark replied in the affirmative.  Vice Chairwoman Giunchigliani asked whether Mr. Clark could provide approximate figures of what that 30 percent amount would be over the biennium.  Mr. Clark explained that the average budget for POST was between $1 million to $1.5 million, and 30 percent would be approximately $300,000 to $450,000, based on those figures.  He reiterated that it would take some time to accumulate that money. 

 

Gene Hill, Sheriff, Humboldt County, and Chairman of the POST Commission, pointed out that reserving the 30 percent would provide POST with the opportunity to hopefully increase its training level to first line supervisors, and mid-level and executive management.  Sheriff Hill noted that the country was in a great deal of turmoil at the current time because of the fear of terrorism and, if the reserve were already in place, POST could conduct anti-terrorism training for law enforcement throughout the state.  That would increase the state’s viability as far as being diverse and able to handle the different calls that law enforcement would be dealing with. 

 

Sheriff Hill indicated that he could also relate to Humboldt County, which had entered a period of economic downturn, but when the economy of Humboldt County was sufficient, money was placed into a reserve fund, which was currently supplementing the county’s budget.  Sheriff Hill stated that he viewed the proposal in A.B. 461 similar to the type of business which would put money away for a rainy day so when a shortfall occurred, POST would not have to come and “beg” for additional money from the Legislature.  Sheriff Hill hoped that the Committee would support the bill.

 

Ron Pierini, Sheriff, Douglas County, advised the Committee that he also served on the POST Commission and would echo the comments made by Sheriff Hill.  He urged the Committee to support A.B. 461, and explained that court assessments had decreased for various reasons, which made it very difficult to provide training during shortfall times.  Sheriff Pierini stated that POST would appreciate having reserve funds to carry it over and provide stability. 

 

Vice Chairwoman Giunchigliani asked that Mr. Clark provide a list of the training currently provided by POST, and what training might be added with the reserve funding. 

 

Testifying next before the Committee was Lawrence E. Jacobsen, former state Senator, who explained that the POST Academy had always been one of his favorite subjects since it was housed at the state’s Stewart facility, and he advised the Committee that he fully supported POST.  Mr. Jacobsen believed that one of the concepts often overlooked was the fact that the POST Academy trained the majority of the officers for police protection throughout the state, and the beautiful part of that was whenever there was an emergency, officers could be called in from around the state to work together since they had received the same training.  Mr. Jacobsen believed that was an advantage for the state because in the current age, backup was often necessary.

 

Jackie Crawford, Director, Nevada Department of Corrections (NDOC), advised that she also served as a POST Commissioner and would support A.B. 461.  There were currently over 2,500 employees in the NDOC, which relied very heavily on the POST Commission, and Ms. Crawford believed that the training was valuable simply for the liability issues.  She urged the Committee’s support of A.B. 461, and would echo the previous comments.

 

Robert Roshak, representing the Las Vegas Metropolitan Police Department and the Nevada Sheriff’s and Chief’s Association/South, advised the Committee that both entities totally supported the bill, and he also urged the Committee’s support.  Mr. Roshak testified that POST provided assistance in mandates handed down by the Legislature or the federal government in regard to additional training, and the Las Vegas Metropolitan Police Department utilized POST, which was of great assistance; he asked the Committee for its support in passage of A.B. 461. 

 

Ronald Dreher, representing the Peace Officers Research Association of Nevada (PORAN), asked for the Committee’s support of A.B. 461 because without training there would be significant liability, however, with training the liability decreased.  Mr. Dreher referenced the current situation in the country regarding budget deficits and opined that training saved money.  He stated that the PORAN would ask that the Committee overwhelmingly support A.B. 461 to establish a reserve to keep Nevada’s POST standards at the same high level; he advised that the PORAN did not want to see the standards diminish whatsoever.

 

Michael Gillins, representing the Las Vegas Police Protective Association and the Nevada Conference of Police and Sheriffs (COPS), echoed previous comments and also asked for the Committee’s support of A.B. 461.  The Association and the COPS believed it was very important to keep POST fully funded and operational so that Nevada had the highest caliber training available for its officers.

 

Vice Chairwoman Giunchigliani asked whether there was another training program in southern Nevada.  Mr. Gillins confirmed that the Las Vegas Metropolitan Police Department provided its own training program, and there was also an academy that operated for North Las Vegas, the City of Las Vegas, and Henderson; it was a POST accredited and POST certified academy.  Vice Chairwoman Giunchigliani noted that there was training available, and the question was whether POST at the state level would expand that training. 

 

Scott MacKenzie, Executive Director, SNEA/AFSCME Local 4041, stated that the SNEA would rise in support of A.B. 461.  He noted that training and POST training had been one of the most vocal issues among the SNEA membership, and the SNEA would, therefore, urge the Committee to support A.B. 461.  

 

Karen Coyne, City of Las Vegas, stated she would also rise in support of A.B. 461.  Within the city of Las Vegas, there were over 200 sworn peace officers, and POST was a very vital part of that training.

 

Vice Chairwoman Giunchigliani asked Mr. Clark to provide the Committee with a list of the training offered by POST, and a list of the training that was provided by other entities.  The dollar amount that POST would eventually raise would be between $300,000 to $450,000 in reserves that would normally revert to the General Fund, and Vice Chairwoman Giunchigliani explained that the Committee would have to review that factor.  Mr. Clark indicated that he would provide the information. 

 

With no further testimony to come before the Committee regarding A.B. 461, Vice Chairwoman Giunchigliani declared the hearing closed, and opened the hearing on A.B. 467. 

 

Assembly Bill 467:  Authorizes State Forester Firewarden to carry forward money to purchase, repair and maintain certain equipment and vehicles. (BDR 42-1257)

 

Steve Robinson, State Forester-Firewarden, Nevada Division of Forestry (NDF), Department of Conservation and Natural Resources, introduced Pete Anderson, Deputy State Forester, and Carol English, Administrative Services Officer III, Department of Conservation and Natural Resources, to the Committee.  Mr. Robinson explained that the current condition of the Division’s fleet, such as fire trucks, crew buses and others, was unacceptable and bordering on unsafe.  Certainly, stated Mr. Robinson, at the least the Division was suffering a loss in firefighting ability and downtime for inmate crews that could be busy earning revenue. 

 

According to Mr. Robinson, it was a common sight to see a Nevada Division of Forestry (NDF) crew vehicle with its hood up on the side of the highway, broken down with staff attempting a repair.  Additionally, during fire season the Division’s vehicles were breaking down on fires, at times creating a safety hazard.  Mr. Robinson commented that the average age of the Division’s equipment and vehicle fleet was 26 years, and parts were no longer available for approximately one-fourth of the vehicles in the inventory.  While the Division’s employees had manufactured some parts, Mr. Robinson noted that many vehicles were simply beyond repair.

 

According to Mr. Robinson, during the wildfire season of the past year, two crew buses failed safety inspections on a U.S. Forest Service fire in California and had to be transported back to Nevada on trailers.  Mr. Robinson stated that more recently, a crew bus was pulled over by the Nevada Highway Patrol north of Elko because there was so much exhaust smoke emanating from the vehicle that the Highway Patrolman believed the vehicle was on fire when, in fact, the vehicle was simply burning oil.

 

Mr. Robinson testified that actions taken by the Division had been prompted by instructions from the Committee during the 2001 Session, when the Division was instructed to conduct a vehicle survey and prepare a plan for replacement.  Mr. Robinson stated the Division had produced that survey and plan, but because of the economic condition of the state, vehicle replacement had not been funded within The Executive Budget.  He emphasized that the Division maintained vehicle and equipment billing rates to federal agencies that included factors for maintenance and repair. 

 

Mr. Robinson informed the Committee that the Division actively pursued used or excess state and federal vehicles and equipment whenever possible, and had been quite successful in that endeavor.  He noted that reconstruction and rehabilitation was costly and time-consuming, and the Division simply could not keep pace with the rapidly growing need and was falling behind.

 

The intent of A.B. 467, explained Mr. Robinson, was to give the Division the authority to retain a portion of the collections it received, which would be used to improve the poor condition of its equipment and vehicles in Budget Accounts 4195, 4196, and 4198.  The bill would also provide an incentive to the Division’s employees to pursue additional pay projects within the NDF’s inmate camp program that generated revenue, knowing that some of those funds could be used to improve the condition of their equipment and vehicles.  Mr. Robinson commented that within The Executive Budget, the Division was slotted to receive $1.9 million in each year of the biennium in revenues, and the Division’s request would be to keep a portion of the funds beyond that revenue, should that target be met.

 

Under fire suppression, Mr. Robinson explained that the bill would allow a carry forward to the fire cost reimbursements that had been transferred to the base budgets for fire suppression efforts.  A.B. 467 would allow the carry forward of excess conservation camp revenue earned over budget levels.  Mr. Robinson testified that the inmate crews worked on projects around the state, which generated that revenue, and collections were deposited in the conservation camp budget, BA 4198.  Even though the revenue was included in the resources that supported the budget, stated Mr. Robinson, the request would allow the Division to carry forward those receipts over budgeted levels only after the Division had reported to the State Budget Director, Legislative Counsel Bureau (LCB) staff, and the Legislature, through the Interim Finance Committee (IFC).

 

Vice Chairwoman Giunchigliani indicated that the Division was not currently able to carry forward funding, and the bill would allow a carry forward for a two-year period in order to build up the fund for additional purchases.  Mr. Robinson replied that was correct, although the Division would be required to approach the IFC and the Legislature each year.  Vice Chairwoman Giunchigliani noted that there was no “sunset” provision attached to A.B. 467 and it appeared to be incremental; Mr. Robinson replied in the affirmative.

 

Testifying next before the Committee was former state Senator Lawrence Jacobsen, who advised the Committee that he fully supported the legislation, and believed that everyone was aware that excess and surplus equipment had been gathered by the Division over the years.  Mr. Jacobsen indicated there were a number of Division yards throughout the state with a considerable amount of equipment at each site.  He stated he spent a great deal of time visiting the conservation camps around the state, and he opined that the equipment would not do any good if it simply sat in the yards.  According to Mr. Jacobsen, many volunteer fire departments had access to the NDF equipment when their equipment suffered a breakdown, and he viewed the situation as a maintenance issue.

 

Vice Chairwoman Giunchigliani asked whether there was anything further to come before the Committee regarding A.B. 467, and in the absence of further testimony, declared the hearing closed. 

 

Vice Chairwoman Giunchigliani announced that the Committee would commence with budget closings.  Mark Stevens, Assembly Fiscal Analyst, Legislative Counsel Bureau (LCB), explained that there were General Fund accounts in the budget closings before the Committee, and he pointed out that LCB staff would provide the funding summaries so that the Committee could consider the amount of funding recommended by the Governor in The Executive Budget for the upcoming biennium, compared to the current biennium.

 

BUDGET CLOSINGS

 

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OFFICE OF THE GOVERNOR (101-1000) – BUDGET PAGE ELECTED-1

 

Mr. Stevens explained that the total adjustments for BA 1000 in The Executive Budget included the negative amounts of $95 in the first year of the biennium and $658 in the second year of the biennium, which had been included by staff.  Adjusted items included:

 

• Property insurance
• Hardware and software prices based on the latest information from State Purchasing
• Adjustments to the assessment paid to the Administrative Services Division for accounting services to the Governor’s Office

 

The first closing issue dealt with the Office of Science, Innovation and Technology, and Mr. Stevens explained that The Executive Budget did not include funding for that Office, however, the Committee had heard testimony that there was money remaining from the bill that was passed by the 1999 Legislature.  The remaining total was $92,335, and there was no reversion for the appropriation.  Mr. Stevens pointed out that the $92,335 would continue to be balanced forward unless the Committee chose to request a bill that would place a reversion date on that particular funding and allow it to revert at the close of the current fiscal year. 

 

ASSEMBLYMAN MARVEL MOVED TO REQUEST A BILL THAT WOULD PLACE A REVERSION DATE ON THE BALANCE OF THE APPROPRIATION FOR THE OFFICE OF SCIENCE, INNOVATION AND TECHNOLOGY.

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

Assemblyman Hettrick inquired whether there was a necessity for a separate bill, or could the issue of reversion be addressed within the Appropriations Act.  Mr. Stevens advised that the reversion could be addressed either via a bill or via the General Appropriations Act.  Vice Chairwoman Giunchigliani believed that adding the reversion to the Appropriations Act would be the better solution.  She asked Mr. Marvel if he would amend his motion.

 

ASSEMBLYMAN MARVEL AMENDED HIS PREVIOUS MOTION TO REQUEST THAT THE REVERSION OF THE BALANCE OF THE APPROPRIATION FOR THE OFFICE OF SCIENCE, INNOVATION AND TECHNOLOGY BE INCLUDED IN THE APPROPRIATIONS ACT.

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

 

Mr. Stevens indicated that the remaining budget items were somewhat routine, however, he pointed out that two positions related to homeland security were currently funded through September 2003, and the Budget Division indicated that if federal funding became available, the Division would approach the Interim Finance Committee (IFC) to continue those positions past the September date.  

 

ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BUDGET ACCOUNT 1000 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

 

BUDGET CLOSED.

 

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MANSION MAINTENANCE (101-1001) – BUDGET PAGE ELECTED-4

 

Mr. Stevens explained that there were no major closing issues within BA 1001, Mansion Maintenance.  The technical adjustments included adjustments to property insurance and the assessment for the Administrative Services Division, which provided accounting services.  Mr. Stevens pointed out that staff would recommend that the Committee fund decision unit E-275, which would provide additional travel funds for the First Lady.

 

ASSEMBLYMAN HETTRICK MOVED TO CLOSE BUDGET ACCOUNT 1001 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

BUDGET CLOSED.

 

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WASHINGTON OFFICE (101-1011) – BUDGET PAGE ELECTED-7

 

Mr. Stevens advised the Committee that The Executive Budget recommended funding at the same level as the current biennium.  The only closing issue was that there was an additional $8,000 over and above what was provided in the current biennium in the Nevada Department of Transportation (NDOT) budget for the Washington Office.  Mr. Stevens stated that was not reflected in the Washington Office budget account, however, information had been received that the increase to the budget would be $7,779 over the amount included in The Executive Budget.  According to Mr. Stevens, staff was unsure whether the Budget Division would recommend the increase to the budget of the Washington Office, and the question was whether the Committee would like to increase that contract amount.

 

Assemblyman Goldwater advised the Committee that he had no problem with the concept of a person working for the state of Nevada on its behalf in Washington, D.C., coordinating between the Congressional offices and the Senator’s offices, working on transportation issues, nuclear war issues, and all the other important work that elected officials and their staff should handle.  Mr. Goldwater stated that it was generally recognized that it was a needed function, and the question was who would do that job, and did Nevada need additional persons in Washington, D.C.  Evidently, a professional lobbyist had been hired, in addition to the staff of the Washington Office, funded exclusively by Highway Fund dollars, which apparently was acceptable.  Mr. Goldwater asked whether General Fund dollars and room tax revenue could be saved if the Washington Office was funded through the Highway Fund, and “everyone else was fired.”

 

Mr. Stevens noted that the question appeared to be whether the Washington Office could be completely funded with Highway Fund dollars, and in Mr. Stevens’s opinion, that would not be prudent because those persons did not work exclusively on highway issues.  There was a constitutional prohibition against using Highway Fund dollars for non-highway related activities.  Mr. Stevens stated that did not mean that the Committee could not change the mix of funding, however, the office could not be funded 100 percent with Highway Fund dollars unless the office would not be used for anything other than exclusively for highway related projects.

 

Mr. Goldwater stated it would be his desire to have the Washington Office perform those functions, without the other contract lobbyists, and he wondered whether he could make that motion in BA 1011, or should it be within another budget account.  According to Mr. Goldwater, he had voted against the budget for the Washington Office during every session since he had been elected because he believed it was duplicative.

 

Vice Chairwoman Giunchigliani inquired whether there was further discussion from the Committee regarding the possibility of eliminating the Washington Office and continuing with other lobbying efforts.  She noted that a presentation had recently been made at the Interim Finance Committee (IFC) requesting continuing lobbyist funding. 

 

Assemblyman Griffin asked where the budget was duplicative, and asked whether there had been an analysis regarding the work being done by the Washington Office and other lobbyists.  He noted that on the surface, it appeared that there could be some duplication, but he was unsure where that duplication occurred and what should be eliminated. 

 

Vice Chairwoman Giunchigliani stated that the Committee had never received an analysis of the duties of the Washington Office, which had caused some of the frustration.  Vice Chairwoman Giunchigliani believed that the NDOT representatives worked very well with Nevada’s elected Senate and Congressional delegation.  The frustration was that the NDOT had a contract person and the delegates had their staff, which had raised concerns over the years that the Washington Office was used more as a “eat, meet, and greet” office, which did not appear to be an appropriate use of staff’s time. 

 

Mr. Griffin asked about the grand total that would be spent in terms of lobbyists and other offices.  Mr. Stevens stated that the cost for the Washington Office was approximately $260,000 per year, and there was an additional amount for the NDOT to contract with a separate lobbyist in Washington, D.C., strictly for highway related issues.  Vice Chairwoman Giunchigliani believed the Committee should get a clear picture regarding what was actually being done and by whom, and the dollar amount being expended.  Mr. Stevens indicated that the breakdown was not available for the Washington Office.

 

In addition, stated Mr. Goldwater, the City of Las Vegas had a Washington lobbyist, Clark County had a Washington lobbyist, the City of North Las Vegas had a Washington lobbyist, and the Regional Transportation Commission in Clark County had a Washington lobbyist.  Somewhere along the line, Mr. Goldwater believed that the lobbying effort was being greatly overdone, and he believed that after all aspects were taken into account, perhaps the dollars should be utilized for other needs, such as transportation.  Mr. Goldwater remarked that if a person walked down the street in Washington, D.C., every single person who had a lobbyist badge would promise to bring in transportation dollars or whatever dollars they had been hired to secure.  Mr. Goldwater wondered whether Nevada was being somewhat gullible, and perhaps the state should be a leader and more prudent with its advocacy dollars.  He believed it was an insult to Nevada’s Congressional delegation as well.

 

Speaker Perkins stated his concern was that the NDOT, the Lieutenant Governor’s Office, and tourism, were all taking credit for the same numbers.  He opined that until he had some level of confidence, and could view a breakout and performance indicators for the allocation to ascertain whether there was a return on the investment, he would be reluctant to spend those tax dollars in an extremely tight budget year.  Speaker Perkins indicated that it almost appeared to be a waiting game until the state had no other option but to fund the Washington Office; he reiterated that it would be very difficult for him to support the Washington Office until some indicators of what the state was receiving for its investment were provided. 

 

Vice Chairwoman Giunchigliani stated she would be happy to entertain a motion to eliminate the Washington Office, if that was the recommendation from the Committee.  

 

ASSEMBLYMAN GOLDWATER MOVED TO ELIMINATE BUDGET ACCOUNT 1011, WASHINGTON OFFICE.

 

ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.

Assemblyman Griffin advised that he would vote against that motion, and would like to see the data before deciding what steps should be taken.  He believed the Committee should review what he considered a very important issue.  Vice Chairwoman Giunchigliani stated that the data had not been forthcoming for the past 12 years, and she doubted it would be received during the current session.

 

THE MOTION CARRIED WITH ASSEMBLYMEN HETTRICK, MARVEL, AND GRIFFIN VOTING NO.  (Chairman Arberry was not present for the vote.)

 

BUDGET CLOSED.

 

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HIGH LEVEL NUCLEAR WASTE (101-1005) – BUDGET PAGE ELECTED-9

 

Mr. Stevens explained that BA 1005, High Level Nuclear Waste, was funded from General Fund appropriations of approximately $1 million per year, along with $400,000 from the Highway Fund relative to transportation issues, and approximately $2.5 million in federal funds.  Mr. Stevens stated other funds totaled approximately $200,000, and the only closing issues were minor adjustments in property and contents insurance, outside rental space dollars that had not been utilized in the past and had been cut back, and a duplication in category 26 and category 4 regarding communication expenses.  The total adjustments would be $4,570 in each year of the biennium

 

ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BUDGET ACCOUNT 1005 AS RECOMMENDED BY STAFF.

 

ASSEMBLYMAN ANDONOV SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

 

BUDGET CLOSED.

 

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ELECTED OFFICIALS

CONSUMER HEALTH ASSISTANCE (101-1003) – BUDGET PAGE ELECTED-13

 

Mr. Stevens noted that the closing issue relative to BA 1003, the Office of Consumer Health Assistance, was the payback amount included in decision unit E-502.  In essence, explained Mr. Stevens, the budget was funded via the General Fund and the Workers’ Compensation and Safety Fund.  The Workers’ Compensation and Safety Fund had paid more of the operating expenses of the budget than could be justified and, therefore, The Executive Budget included a recommendation to reimburse the Workers’ Compensation and Safety Fund over a ten-year period.  Mr. Stevens noted that staff had reviewed the workload mix in the Office for Consumer Health Assistance, and believed that the amount of money that should be returned to the Workers’ Compensation and Safety Fund should be reduced from $211,709 to $122,028.

 

According to Mr. Stevens, the payback recommended in The Executive Budget would be over a ten-year period, and there were three options available for Committee consideration:

 

a)     Decrease the annual payback amount from $21,171 to $12,203 per year  and maintain the recommended ten-year payback.

b)     Decrease the payback period from ten to six years and maintain the

annual payback amount of $21,171.

c)     Payback the total $122,028 amount due to the Workers’ Compensation and Safety Fund in FY2003-04.

 

Mr. Stevens advised that those were the three options recommended by staff for the Committee’s consideration.

 

Vice Chairwoman Giunchigliani noted that if the Committee selected item c), the amount would be paid back from BA 1003.  Mr. Stevens indicated the cost would be $122,028 in FY2004 with no further costs incurred. 

 

Continuing with budget closing issues, Mr. Stevens stated that decision unit E‑600 contained an Ombudsman position that was recommended for elimination.  He noted that the position had processed 15 percent of the total consumer assistance cases in calendar year 2002, so elimination might have an impact on the ability of the Office to process the workload.  Mr. Stevens pointed out that the performance indicators reflected a 5 percent increase over the biennium, so the question before the Committee was whether that position should be eliminated. 

 

Per Mr. Stevens, other closing issues included technical corrections in minor amounts to insurance, building rent, Department of Information Technology (DoIT) charges, Purchasing Division assessments, and statewide cost allocation assessments.  One other adjustment had been made in the mix of Workers’ Compensation and Safety Fund versus General Fund funding in each year of the biennium in the amount of $5,168. 

 

Vice Chairwoman Giunchigliani noted that the main issue for budget closure would be the payback to the Workers’ Compensation and Safety Fund.  

 

ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BUDGET ACCOUNT 1003 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS, AND INCLUDING OPTION b), DECREASE THE PAYBACK PERIOD FROM TEN YEARS TO SIX YEARS, MAINTAIN THE ANNUAL PAYBACK AMOUNT AT $21,171, AND RETAIN THE OMBUDSMAN POSITION IN DECISION UNIT E-600.     

 

ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

 

BUDGET CLOSED.

 

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ELECTED OFFICIALS

ENERGY CONSERVATION (101-4868) – BUDGET PAGE ELECTED-17

 

Mr. Stevens noted that BA 4868, Energy Conservation, was a very small account and there were no closing issues.  He noted that there was a recommendation for continuing the transfer of $20,000 to the Division for Aging Services for rural transportation services, and a few technical adjustments in the account. 

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BUDGET ACCOUNT 4868 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

 

BUDGET CLOSED.

 

********

 

ELECTED OFFICIALS

LIEUTENANT GOVERNOR (101-1020) – BUDGET PAGE ELECTED-20

 

In the budget for the Lieutenant Governor, BA 1020, Mr. Stevens reported that the only closing issue was an increase in funding for both in- and out-of-state travel in decision unit E-500.  The increase was $10,762 in FY2003-04 and $9,762 in FY2004-05 in out-of-state travel, and additional in-state travel funding of $6,613 in FY2003-04 and $2,000 in FY2004-05.  Mr. Stevens indicated that for out-of-state travel, that would represent an increase of approximately 105 percent from the funding level provided in the current biennium.  The Lieutenant Governor had indicated that travel funds had been curtailed during the current biennium because of the budget situation, which was the reason the current allocation for travel had not been utilized.  Mr. Stevens stated that he wanted to ensure that the Committee was aware of the situation.  He explained that he had been questioned regarding the possible use of tourism dollars in BA 1020, since the Lieutenant Governor was the Chairman of the Tourism Commission, and some travel might be created by tourism-related activities.  Mr. Stevens advised the Committee that it might want to consider that possibility.

 

Per Mr. Stevens other minor adjustments to the budget included:

 

·        E-600: Staff recommended the approval of the budget reductions contained in that decision unit

·        E-175:  Staff recommended approval of $1,000 for the host account

·        E-710:  Staff had adjusted the cost of replacement equipment based on updated pricing from the State Purchasing Division

 

Speaker Perkins noted that the Legislative Commission would review a proposal to cut back and restrict legislative travel in the very near future, and he was not sure that increasing travel in a difficult budget year would be the best idea.  He reported that it would be very difficult for him to support an increase in travel funding; perhaps when the condition of the budget had improved, such increases could be considered.  Speaker Perkins believed that all entities should “tighten their belts.” 

Assemblywoman Gibbons concurred with the comments made by Speaker Perkins and believed that out-of-state travel should be cut wherever possible, regardless of the entity requesting an increase.

 

Vice Chairwoman Giunchigliani advised the Committee that she would entertain a motion to close the budget as recommended by staff with the elimination of decision unit E-500.

 

SPEAKER PERKINS MOVED TO CLOSE BUDGET ACCOUNT 1020 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS, AND INCLUDING ELIMINATION OF DECISION UNIT E-500.

 

ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

 

Assemblyman Beers opined that it would make sense to continue to pursue the inclusion of tourism dollars in BA 1020 to further reduce its draw on the General Fund.  Mr. Stevens reported that tourism dollars had not been utilized in the budget account in the past, however, had been discussed as a possibility, which could be decided by the Committee.  Obviously, all of the Lieutenant Governor’s travel was not tourism-related, but perhaps a portion of that travel could be defined as tourism-related.  Mr. Beers noted that a large part of the office was tourism-related, and perhaps the Committee should ask that staff review the maintenance items in the base budget, in terms of the overall office, rather than simply the increases. 

 

Vice Chairwoman Giunchigliani informed the Committee that staff would research the issue to determine whether tourism dollars could be used to offset the General Fund.  She noted that the Committee had approved closure of the budget without the additional travel costs, and would anticipate whether tourism dollars might be included.   

 

BUDGET CLOSED.

 

********

 

ELECTED OFFICIALS

ETHICS COMMISSION (101-1343) – BUDGET PAGE ELECTED-66

 

Mr. Stevens advised that there were two closing issues for consideration by the Committee in BA 1343, Ethics Commission, under decision unit E-275:

 

1.      The Governor recommended funding for additional out-of-state and in‑state travel, operating costs, court reporting services, and a panic alarm system for the office, for a total of approximately $25,000 in each year of the biennium. 

2.      The agency requested $15,000 per year in paralegal services; $10,000 per year for investigative costs, which were funded at zero in The Executive Budget; and replacement computer equipment for a cost of approximately $5,000 over the biennium.

 

The total cost included in decision unit E-275 was $26,880 in FY2004 and $28,235 in FY2005, and Mr. Stevens noted that the Budget Division did not support the Ethics Commission’s request for the additional funding.  The Budget Division had indicated that the Commission could return to the Interim Finance Committee (IFC) if additional funding for investigation costs or other items were needed. 

 

According to Mr. Stevens, one option for consideration by the Committee would be to provide some funding in those areas and allow the Ethics Commission to approach the IFC if additional funding was needed.  The Committee could also concur with the recommendation included in The Executive Budget, or fund the amounts requested by the Ethics Commission. 

 

In addition, stated Mr. Stevens, the Ethics Commission had requested the establishment of a host fund of $500 in each year of the biennium to provide water and beverages to Commission members during the Commission’s lengthy hearings.  The Commission was requesting that existing funds be used from its operating category, so the request would not involve any additional funding.  Ms. Stevens remarked that the Commission had submitted its request to the Budget Division, but he was unaware of the outcome of that request. 

 

Speaker Perkins voiced concern regarding a lack of money available in the budget for investigations because it was his understanding that the Commission utilized the Nevada Division of Investigations to conduct investigations.  Certainly, if it were a member of the Legislature or the Executive Branch that happened to be under investigation, it would cause some conflict problems.  For example, stated Speaker Perkins, it would be awkward if a member of the Legislature was under investigation and the Commission approached the IFC for the funding, and the request was refused. 

 

Speaker Perkins stated that he had asked during previous budget hearings about the usage of the Ethics Commission, and it appeared that at least 65 percent of the Ethics Commission’s work was for local governments and 35 percent was for state government.  He wondered whether staff could review the possibility of a cost allocation formula for local governments that could be reviewed every biennium, with those entities sharing in the cost of investigations, since local government appeared to be generating most of the complaints. 

 

Vice Chairwoman Giunchigliani suggested that the Committee delay action on the closure of BA 1343 pending the development of a cost allocation offset plan, to which the Committee concurred. 

 

Speaker Perkins remarked that information received from the Ethics Commission depicted a breakdown of cities, counties, and populations, and he recognized that some of the small, rural counties would not generate many, if any, complaints, and certainly would not have the budgetary wherewithal to help support the budget for the Commission.  He believed there should be some threshold of population defined in the cost allocation, which would place the larger burden on the larger local governments.

 

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ELECTED OFFICIALS

CONTROLLER (101-1130) – BUDGET PAGE ELECTED-74

 

Mr. Stevens indicated that the closing issues relative to BA 1130 included decision unit E-275, in which The Executive Budget recommended that two temporary positions approved by the 2001 Legislature for the rollout of the Integrated Financial System (IFS) be made permanent.  An Accountant III position was recommended in testing changes and enhancements, as well as implementing additional functionality to the IFS.  Mr. Stevens reported that a Management Analyst I position was recommended to provide ongoing system training for the staff of state agencies.  He wanted to point out that a total of six permanent positions had been previously approved in the Controller’s Office for the IFS project, five by the 1999 Legislature and one by the IFC at its April 2000 meeting.

 

The second issue, explained Mr. Stevens, involved additional staff training in decision unit E-276, which requested an additional $11,290 in the first year of the biennium, and $15,787 in the second year of the biennium, for professional accountant staff training and information technology staff training for the agency.  Mr. Stevens emphasized that staff had simply wanted to point out the issues in decision units E-275 and E-276. 

 

The remaining closing issues included:

 

• E-902:  Recommended the transfer of a Program Officer I from DoIT to the Controller’s Office involving the IFS help desk
• E-910: Recommended the approval of ongoing software licenses and maintenance costs of the IFS to the Controller’s Office
• E-710: The request for replacement and new equipment had been modified based on pricing by State Purchasing 
• E-720: Recommended approval of office equipment for five staff that would relocate to the Controller’s Office

 

Vice Chairwoman Giunchigliani inquired whether the state paid for continuing education hours for other licensed staff.  Mr. Stevens explained that the state did provide training, which at times involved continuing legal education (CLE), but the state did not necessarily attempt to fill all the CLE requirements, nor pay the license fees.  Vice Chairwoman Giunchigliani stated that it appeared in decision unit D-276 that the state would pay for the licenses.  Mr. Stevens believed the funding would be for training rather than the licenses for the Certified Public Accountants (CPAs). 

 

Vice Chairwoman Giunchigliani asked Mr. Stevens to expand on the two temporary positions contained in decision unit E-275.  Mr. Stevens explained that the Controller had requested those positions, and there were a number of positions that had been deemed temporary as the Integrated Financial System (IFS) was being implemented.  The Controller had indicated during the 2001 Session that while the positions were temporary, there might be a need for some of the positions to become permanent in the future, based on what was learned when the system was initiated.  Mr. Stevens noted that the Controller’s Office had identified two positions that it believed should become permanent, one for testing changes and enhancements and implementation of additional functionality as the system progressed, and the second to provide ongoing training to the staff of various state agencies.

 

Speaker Perkins believed that training money was very important because staff at any level of state government could not be expected to properly handle their jobs without the appropriate training.  Speaker Perkins stated that he had not been convinced at previous budget hearings that both positions were necessary, particularly in a tight budget year.  Perhaps one position would suffice for the upcoming biennium, and the situation could be analyzed on an ongoing basis. 

 

Vice Chairwoman Giunchigliani indicated the Committee should consider approval of decision unit E-276, and other staff recommendations for technical changes, but not maintain the two positions as recommended in decision unit E‑275.  Vice Chairwoman Giunchigliani stated it was her recollection, from the original budget hearing, that the positions were based on anticipation of what might occur rather than actual documentation, which was her only concern. 

 

SPEAKER PERKINS MOVED TO CLOSE BUDGET ACCOUNT 1130 AS RECOMMENDED BY STAFF INCLUDING TECHNICAL ADJUSTMENTS, AND APPROVAL OF DECISION UNIT E-276.  THE TWO TEMPORARY POSITIONS REQUESTED TO BECOME PERMANENT IN DECISION UNIT E-275 WOULD NOT BE APPROVED.

 

ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

 

BUDGET CLOSED.

 

********

 

JUDICIAL BRANCH

DISTRICT JUDGES SALARY (101-1490) – BUDGET PAGE COURTS-29

 

Mr. Stevens informed the Committee that staff would recommend closing BA 1490 as recommended by the Governor, and the only item of note was that the actuarially determined rate for the new Judicial Retirement System (JRS) was 0.1 percent higher than the rate that had been built into the budget.  Normally, explained Mr. Stevens, the retirement contribution rate was not adjusted unless there was a one-half of 1 percent change. 

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BUDGET ACCOUNT 1490 AS RECOMMENDED BY THE GOVERNOR.

 

ASSEMBLYMAN GRIFFIN SECONDED THE MOTION.

 

THE MOTION CARRIED WITH ASSEMBLYMAN BEERS VOTING NO.  (Chairman Arberry was not present for the vote.)

 

BUDGET CLOSED.

 

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JUDICIAL BRANCH

JUDICIAL SELECTION (101-1498) – BUDGET PAGE COURTS-38

 

Mr. Stevens noted that the Commission on Judicial Selection, BA 1498, was a very small account, and there was only one closing item in decision unit E-500 that staff wanted to bring to the Committee’s attention, which requested funding of $2,023 in each year of the biennium to host an annual workshop for review of annual Judicial Selection bylaws. 

 

Mr. Stevens explained that $1,862 was authorized in each year of the current biennium for the purpose of conducting the workshop, however, $1,722 of that funding had been spent in the base year for other items that did not meet the originally intended purpose.  The current budget proposed to restore the cost for the workshop without a corresponding reduction in the other areas previously expended.  Per Mr. Stevens, the workshop money had been spent in other areas, and the current budget proposed to restore the costs for the workshops, along with continuation of the additional costs.  Mr. Stevens emphasized that he wanted to ensure that Committee members were aware of that request, and were conscious that if the budget were approved as recommended by the Governor, the Commission’s budget would be increased. 

 

Mr. Stevens advised that the following options were presented for the Committee’s review:

 

1. Approve the budget as requested with no adjustments.
2. Reduce funding in the base budget by $1,722 for items purchased in the base year from funding approved for hosting a workshop on Judicial Selection bylaws.
3. Eliminate funding in decision unit E-500 in the amount of $2,023 for the requested workshop that had been funded in the past, but had not taken place.

 

Assemblywoman Chowning stated option three would eliminate the funding for the workshop that had been funded in the past, but had not taken place, and asked why the Committee could not continue to fund the workshop in the amount of $1,862 versus the $2,023 currently requested. 

 

Mr. Stevens clarified that the Committee could approve either amount.  The amount requested in The Executive Budget for the workshop was $2,023; the amount that was authorized for the current biennium was $1,862.  Mrs. Chowning noted that the Commission had spent $1,722 for items other than the workshop.  She asked what had actually been spent for the workshop.  Mr. Stevens advised that no funding had been expended for the purpose of a workshop. 

 

Vice Chairwoman Giunchigliani indicated that the Committee could remove the $1,722 that had been spent improperly from the budget and approve the remaining funding in that account for the workshop.  Mr. Stevens reiterated that the options available to the Committee were as previously indicated, either option one, two, or three. 

 

Assemblywoman Leslie believed that the Committee should consider option two because there were two separate issues, and she did not believe the Commission should be rewarded for spending money on items that were not approved.  Ms. Leslie stated that if the Committee believed that future workshops would be held, perhaps funding should be approved.  Vice Chairwoman Giunchigliani indicated it was her concern that the Commission would improperly utilize the workshop money once again.  Ms. Leslie suggested that the Committee request a Letter of Intent to explain the Committee’s reason for reducing the base budget by $1,722, and advising that funding should not be expended in areas that did not meet the intended purpose.  

 

Mr. Stevens remarked that the Committee had not heard previous testimony concerning BA 1498 because recommendations regarding the budget were the responsibility of Legislative Counsel Bureau (LCB) staff to present to the Committee. 

ASSEMBLYWOMAN LESLIE MOVED TO CLOSE BUDGET ACCOUNT 1498 WITH A REDUCTION IN THE BASE BUDGET OF $1,722 FOR ITEMS PURCHASED IN THE BASE YEAR FROM FUNDING APPROVED FOR HOSTING A WORKSHOP ON JUDICIAL SELECTION BYLAWS.  A LETTER OF INTENT WOULD BE ISSUED ADVISING THE COMMISSION THAT FUTURE FUNDING COULD NOT BE SPENT ON ITEMS THAT DID NOT MEET THE INTENDED PURPOSE.     

 

ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry was not present for the vote.)

 

BUDGET CLOSED.

 

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HEALTH DIVISION

CANCER CONTROL REGISTRY (101-3153) – BUDGET PAGE HEALTH-12

 

Mr. Stevens reported that the estimated federal grant revenue for BA 3153 had been updated based on the most recent grant award notification, and staff had made adjustments on computer pricing.

 

ASSEMBLYWOMAN McCLAIN MOVED TO CLOSE BUDGET ACCOUNT 3153 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry and Speaker Perkins were not present for the vote.)

 

BUDGET CLOSED.

 

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HEALTH DIVISION

RADIOLOGICAL HEALTH (101-3101) – BUDGET PAGE HEALTH-23

 

According to Mr. Stevens, the Executive Branch Audit Committee had recommended that the licensing fees be sufficient to cover the cost of administering the program.  There was a General Fund appropriation included in BA 3101 and, in essence, the recommendation would be to eliminate the General Fund appropriation over time and increase fees in order to support the operation of the budget. 

 

Mr. Stevens noted that the Health Division had accepted the recommendations that were included in the audit, and one option for Committee consideration would be to approve the General Fund appropriation in BA 3101, which was $264,177 for FY2003-04, and eliminate the General Fund appropriation in the second year of the biennium.  That action would give the Division time to implement the recommendations beyond the July 1, 2003, date.  Mr. Stevens indicated that staff would also recommend that a $100 appropriation be provided in the second year of the biennium to allow the Division access to the Interim Finance Committee (IFC) Contingency Fund, should that become necessary. 

 

If staff recommendations were approved, Mr. Stevens advised that the Committee might want to consider a Letter of Intent, which would direct the Health Division to comply with the fee and staffing recommendations of the audit; however, would allow the Division to approach the IFC for an allocation if the Division determined that the fee increase would have a substantial adverse impact on the regulated businesses. 

 

ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BUDGET ACCOUNT 3101 AS RECOMMENDED BY STAFF, WITH ADJUSTED GENERAL FUND APPROPRIATION IN THE FIRST YEAR OF THE BIENNIUM AND ELIMINATION OF THE GENERAL FUND APPROPRIATION IN THE SECOND YEAR OF THE BIENNIUM WITH THE EXCEPTION OF $100, AND INCLUDING TECHNICAL ADJUSTMENTS.

 

ASSEMBLYMAN MARVEL SECONDED THE MOTION.

 

Assemblyman Beers noted that BA 3101 would increase 53 percent in the amount of General Fund dollars it was consuming from one biennium to another, which would cause him to consider opposing the motion.  Mr. Stevens pointed out that it would be less of an impact because the second year of the biennium would be reduced to $100, in order to allow access to the Contingency Fund.

 

Assemblyman Hettrick stated he understood the intent to direct the Division to implement the recommendations and to provide a year for the Division to become self-funded.  However, he wondered whether it would take a full year for that to occur, and perhaps the General Fund appropriation could also be reduced for a portion of the first year of the biennium, while allowing the Division to approach the IFC. 

 

Vice Chairwoman Giunchigliani asked Mr. Atkinson to address whether that course of action would be a possibility.

 

Bob Atkinson, Program Analyst, Legislative Counsel Bureau (LCB), stated that with the amount of time it would take for the Division to adopt the regulations, a reduction in General Fund allocation might not be practical, since the Division did not intend to approach the Board of Health until approximately August or September of 2003.  He emphasized that the intent of the recommendation was to allow the Division sufficient time to plan for implementation of the audit recommendations.

 

Vice Chairwoman Giunchigliani stated that perhaps the best idea would be to continue the General Fund appropriation during the first year of the biennium and allow the Division to become fully fee-funded during the second year. 

 

Assemblywoman McClain asked for clarification regarding the amount of the fee increase.  Vice Chairwoman Giunchigliani noted that hearings had been held on fee increases.  Mr. Atkinson stated that the current fee schedule was:

 

·        There were 1,400 radiation-producing machines in Nevada with fees ranging from $30 to $140 per year, and that fee had been established in 1995.

·        There were 415 mammography machines and operators who paid a fee from $50 to $500 each, and that fee had been established in 1994.

·        There were 280 radioactive material users in Nevada and, because there was a wide variety, the fee, established in 1995, ranged from $50 to $1,000.

 

Mr. Atkinson pointed out that none of the fees had been increased or changed in approximately eight years.  He explained that the current budget was funded approximately one-half by fees and one-half by General Fund appropriation.

 

Assemblyman Beers noted that the overall scope of the account would increase by approximately 50 to 60 percent, so that increase would have to be addressed, as well as the loss of one-half of the General Fund appropriation; he believed that the percentage increase would be one and one-half to two times greater. 

 

Mr. Atkinson explained that the radioactive material fees represented $267,000 in actual collections in FY2002, and the General Fund appropriation that would be removed from the current budget was $253,000, so the amounts were comparable.  According to Mr. Atkinson, there were other activities in the account that were not based on the radioactive fee. 

 

Vice Chairwoman Giunchigliani believed the information provided by Mr. Atkinson addressed the concerns voiced by Mr. Beers, and she reminded the Committee that the motion before it was to close the budget as recommended by staff, with the General Fund appropriation adjusted in FY2003-04, and reduced to $100 in FY2004-05 when funding would be based on fee revenue, along with the aforementioned Letter of Intent; she called for a vote on the motion.

 

THE MOTION CARRIED.  (Chairman Arberry and Speaker Perkins were not present for the vote.)

 

BUDGET CLOSED.

 

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HEALTH DIVISION

RADIOACTIVE AND HAZARDOUS WASTE (251-3152) –

BUDGET PAGE HEALTH 28

 

Mr. Stevens explained that BA 3152 collected fees for the disposal of low-level radioactive waste and hazardous waste materials at the Beatty facility.  Currently, the account operation was based on interest generated by the Perpetual Care Fund, which would have an ending balance of approximately $11.5 million in FY2002-03. 

 

Mr. Stevens noted that there were no major closing issues in the budget account; staff had adjusted the expenditure authority to approximately $100,000 per year to provide operating supplies, telephone expenses, and other expenses for the maintenance of the site. 

 

ASSEMBLYWOMAN LESLIE MOVED TO CLOSE BUDGET ACCOUNT 3152 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS. 

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry, Speaker Perkins, and Assemblywoman Gibbons were not present for the vote.)

 

BUDGET CLOSED.

 

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HEALTH DIVISION

SAFE DRINKING WATER ACT (746-3211) – BUDGET PAGE HEALTH-31

 

According to Mr. Stevens, A.B. 473 had been introduced to transfer BA 3211 in its entirety to the Division of Environmental Protection.  He noted that there were some minor computer pricing changes recommended by staff. 

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BUDGET ACCOUNT 3211 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYMAN ANDONOV SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Chairman Arberry and Speaker Perkins were not present for the vote.)

 

BUDGET CLOSED.

 

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HEALTH DIVISION

HEALTH ALCOHOL TAX PROGRAM (101-3255) – BUDGET PAGE HEALTH-91   

 

Mr. Stevens explained that staff recommended adjusting the account to provide for a 1 percent increase in each year of the biennium over anticipated collections for FY2002-03.

 

ASSEMBLYMAN GOLDWATER MOVED TO CLOSE BUDGET ACCOUNT 3255 AS ADJUSTED AND RECOMMENDED BY STAFF.

 

ASSEMBLYMAN MARVEL SECONDED THE MOTION.

 

THE MOTION CARRIED. (Chairman Arberry and Speaker Perkins were not present for the vote.)

 

BUDGET CLOSED.

 

********

Mr. Stevens provided an overview of future meetings of the Committee.  With no further business to come before the Committee, Vice Chairwoman Giunchigliani adjourned the hearing at 11:15 a.m.

 

RESPECTFULLY SUBMITTED:

 

 

                                                           

Carol Thomsen

Committee Secretary

 

 

APPROVED BY:

 

 

                                                                                         

Assemblywoman Chris Giunchigliani,

Vice Chairwoman

 

 

DATE: