MINUTES OF THE
SENATE Committee on Finance
Seventy-second Session
February 7, 2003
The Senate Committee on Financewas called to order by Chairman William J. Raggio, at 7:30 a.m. on Friday, February 7, 2003, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Dean A. Rhoads
Senator Barbara K. Cegavske
Senator Sandra J. Tiffany
Senator Bob Coffin
Senator Bernice Mathews
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Jeffery A. Ferguson, Program Analyst
Michael Archer, Committee Secretary
OTHERS PRESENT:
Brian Sandoval, Attorney General, Office of the Attorney General
Marietta Lopez, Chief Financial Officer, Office of the Attorney General
John P. Comeaux, Director, Department of Administration
OFFICE OF THE ATTORNEY GENERAL – OVERVIEW
Brian Sandoval, Attorney General, Office of the Attorney General:
I will read my prepared statement (Exhibit C), pages 1 through 4.
Senator Raggio:
It is difficult to project the cost of some items over a biennium, but you cannot build a budget without doing that.
Mr. Sandoval:
We are working on that.
I will now review each budget account item in the Presentation by the Nevada Attorney General’s Office to the Senate Committee on Finance Fiscal Years 2003-2005 Budget Proposal (Exhibit D. Original is on file in the Research Library.).
Attorney General Admin Fund – Budget Page ELECTED-24 (Volume 1)
Budget Account 101-1030
Senator Raggio:
All of the budgets for the Office of the Attorney General appear to contain errors and omissions related to expenditures of the base year revenue. Have you had some discussion with our staff on this?
Marietta Lopez, Chief Financial Officer, Office of the Attorney General:
Yes, I have. There have been problems because the prior chief financial officer has not been available.
Senator Raggio:
How do you explain the differences in revenues and assessments on the cost allocation?
Jeffrey A. Ferguson, Fiscal Analyst Division, Legislative Council Bureau:
A consultant is currently working on the cost-allocation plan.
Senator Raggio:
Will there be a revised plan of some kind?
Ms. Lopez:
Yes. The consultant expects to have a draft available within the week.
Mr. Sandoval:
I will address the budget account (B/A) under tab B/A 1030 Administration in the presentation booklet.
Senator Raggio:
Whose space will you be taking when you expand the Las Vegas office?
Mr. Sandoval:
We will move into the space currently occupied by the Hearings Division. They will be moving to another building.
Senator Raggio:
Why do you need the additional space if you are not adding any positions?
Mr. Sandoval:
The addition will permit us to relocate staff members currently working in file rooms, copy rooms, and converted conference rooms, into more appropriate spaces. We are also shifting positions to southern Nevada and do not currently have space for them. It is also a condition of the contract that we must either take the entire space or none of it.
Senator Raggio:
Will it cost us more to put the affected agencies in other spaces?
John P. Comeaux, Director, Department of Administration:
What the attorney general said about the space being contingent on an all-or-nothing basis is a surprise to me. I will look into that.
The Hearings Division is moving out of that space because it is inadequate for them. We have many General Fund agencies currently in leased space that can move into the building. We are recommending that the Nevada Attorney for Injured Workers office move into the space as well.
Senator Raggio:
You might want to reconsider that proposal. If they do not need the entire space, nor have to move everybody, it might provide some savings.
What you have allocated to pay for this is almost 2/3 General Fund cost. See if some of that can be paid by non-General Fund means, such as fees on boards and commissions.
Is the reclassification of the two positions also included in the Governor’s recommended budget?
Mr. Sandoval:
It is not included in the budget.
Refer to tab B/A 1031 Special Fund.
Special Fund – Budget Page ELECTED-29 (Volume 1)
Budget Account 101-1031.
I will read a memorandum of the pending court cases in the February 6, 2003, regarding Nevada Cases Against the Yucca Mountain Repository (Exhibit E).
Senator Raggio:
Does this memorandum contain a complete list of the cases that pertain to Yucca Mountain?
Mr. Sandoval:
Yes. There are currently six court cases.
Senator Raggio:
How much money are we committing to the total litigation?
Mr. Sandoval:
There is $1.9 million in the Nevada Protection Fund. Those funds will carry us through this year. The $2 million recommended in the Governor’s budget will not be needed until 2004.
Senator Raggio:
What kind of contracts do we have? What is the cost envisioned over the next biennium?
Mr. Sandoval:
The contracts for the various Yucca Mountain legal teams are on an hourly basis. There will not be any further requests for additional funding through fiscal year (FY) 2005. The $2 million requested in the Executive Budget, plus the $1.9 million in the Nevada Protection Fund, will be adequate. The bulk of the work has been done in preparation for the court hearings in September. We have hit the peak of legal expenses associated with the litigation, and the rest will be the oral arguments.
Senator Raggio:
We would like to see an analysis of contracts dealing with the outside services. Is there a cap on the contracts for legal services?
Mr. Sandoval:
I will provide that information.
Let us now look at tab B/A 3806 Insurance Fraud.
Attorney General Insurance Fraud – Budget Page ELECTED-32 (Volume 1)
Budget Account 101-3806.
Senator Raggio:
You have 10 people in this unit and had 56 pending prosecutions in the previous quarter. We need to have real justification for that type of expenditure. Does this reflect appropriate activity on the part of the unit?
Mr. Sandoval:
I share your concern. We will be more aggressive than we have been in the past and I expect our numbers will improve.
I will now read tab B/A 1037 Medicaid Fraud, in the presentation booklet.
AG Medicaid Fraud – Budget Page ELECTED-36 (Volume 1)
Budget Account 101-1037
Senator Raggio:
Regarding the motor pool request, why does the Executive Budget show $9000 for each year of the biennium?
Ms. Lopez:
It was originally $9000. The budget office may have reduced it. There may have been changes in the actual costs.
Senator Raggio:
What are the requirements for being a Medicaid fraud control director?
Mr. Sandoval:
It is an attorney position actively involved in the various litigations.
Senator Raggio:
What is the $18,000 identified for collection?
Ms. Lopez:
Those are judgments we must still collect.
Senator Raggio:
Of the $3.4 million in judgments for FY 2001, how much has been collected?
Mr. Sandoval:
Our collection rate is 98 percent. There was a single judgment in the amount of $2.2 million, which was paid in full. There was a $400,000 judgment, of which 20 percent has been paid, and the rest is on schedule for full repayment.
Senator Raggio:
How much of the funding to support the Medicaid fraud unit is from federal grants?
Ms. lopez:
The funding is comprised of 75 percent federal funds and 25 percent state matching funds. There have always been sufficient judgment recoveries to cover the State costs.
Mr. Sandoval:
Please follow as I read the text at tab B/A 1033 Workers Comp Fraud.
Attorney General-Workers’ Comp Fraud – Budget Page ELECTED-41 (Volume 1)
Budget Account 101-1033
Senator Cegavske:
Some clients say they have difficulty communicating with the fraud unit. What is being done? Also, is all the work performed in this unit dedicated to workers’ compensation issues?
Mr. Sandoval:
I have assigned a deputy to meet with some of those clients. I will ensure that all funds paid through employer assessments are dedicated to the workers’ compensation fraud unit.
With regard to the security equipment request, we are seeking to bring the security of this building in-line with our other offices. Before spending money on installing security system, we will first decide if we are going to move from that building in the immediate future.
Senator Raggio:
Why do you need 31 people in this unit?
Mr. Sandoval:
If I do not see an improvement in performance, I may look at those numbers.
Next we will look at tab B/A 1038 Consumer Protection.
AG Office of Consumer Protection – Budget Page ELECTED-45 (Volume 1)
Budget Account 330-1038
Senator Raggio:
Does the Bureau of Consumer Protection deal with telemarketing complaints? If so, have the number of complaints declined?
Mr. Sandoval:
Yes, it deals with telemarketing. The office continues to get a number of complaints. The Office of the Attorney General will be sponsoring legislation to establish a no-call list.
Senator Raggio
What percentage of revenues is based on the mill assessment of regulated utilities?
Ms. Lopez:
The revenues are paid from 51 percent mill assessment, 49 percent from the General Fund.
Senator Raggio:
Is it necessary to continue assessing at the highest statutory mill assessment cap of .75? Also, 17 of the 31 full-time positions are funded by the mill assessment. Do you need so many positions in that category?
Mr. Sandoval:
I will review that.
Senator Cegavske:
How do you account for billings and control the distribution of funds dedicated to certain areas of work?
Mr. Sandoval:
I will look into that and get back to you.
Senator Cegavske:
Does your office currently do billable hours?
Mr. Sandoval:
We are exploring that now.
Senator Cegavske:
We want to be sure there is no cross-subsidizing within the office.
Mr. Sandoval:
We will now look at tab B/A 1036 Crime Prevention.
AG Crime Prevention – Budget Page ELECTED-49 (Volume 1)
Budget Account 101-1036
Senator Raggio:
Has there been any significant success with regard to missing children?
Mr. Sandoval:
Yes, as indicated by the number of children recovered by civil enforcement actions, as shown in tab B/A 1036.
Senator Raggio:
License plate fees fund 13 percent of this program. Are these special plates?
Ms. Lopez:
Yes, they are special license plates. The Office of the Attorney General receives a portion of these fees for special projects in the areas of missing children and child crime prevention.
Senator Coffin:
Is the Advisory Council for Community Notification Concerning the Sex Offender, or “Megan’s law,” budgeted in the Office of the Attorney General? Do we have a failure rate with compliance to “Megan’s law,” or have we just not reported to the national clearinghouse? Do you want to keep this advisory committee?
Mr. Sandoval:
It is not part of our budget. I do want to keep this advisory committee and will get back to you after I have discussed this with my staff.
I will read the text in tab B/A 1348 Tort Claims.
Attorney General Tort Claim Fund – Budget Page ELECTED-53 (Volume 1)
Budget Account 715-1348
Senator Raggio:
Is it the State Board of Examiners Contingency Fund, or the Interim Finance Contingency Fund, that you are referring to in this budget item?
Mr. Comeaux:
It is probably an error. I will look into it and get back to you.
Senator Raggio:
The vehicle assessment rate appears to jump significantly in FY 2004, and then will drop in FY 2005. Is an adjustment in the actuarial rates necessary?
Mr. Comeaux:
We set the rates to produce the amount of funding necessary to pay the actuarially forecasted claims and attain a reserve level of about $2 million. Last year we incurred a single large claim that eliminated our reserve.
Senator Raggio:
Have there been any policy changes implemented that would prevent that from occurring again?
Mr. Comeaux:
Yes. We have implemented a no-pursuit policy.
Mr. Sandoval:
The next item is tab B/A 1002 Extradition Coordinator.
AG Extradition Coordinator – Budget Page ELECTED-56 (Volume 1)
Budget Account 101-1002
The Executive Budget does not recommend the replacement of the two computers mentioned in this item. If they are not included in our budget this year, the extradition coordinator will have to wait until FY 2006 in order to replace them. Therefore, we request the budget be increased by $3800.
Senator Raggio:
The extradition costs you recommend are $100,000 less than was spent in FY 2002. Is that prudent?
Mr. Sandoval:
This was not our request. The Governor reduced it.
Senator Raggio:
If there are more extraditions, can you go to the Board of Examiners Contingency Fund?
Mr. Sandoval:
Yes.
The next item is tab B/A 1041 Prosecuting Attorneys.
AG Council for Prosecuting Attorneys – Budget Page ELECTED-59 (Volume 1)
Budget Account 101-1041
Senator Raggio:
Why is the increase needed if the entire amount is placed in reserve each year?
Ms. Lopez:
We are unlikely to have a reserve because the assessments are arriving slower than in the past.
Senator Raggio:
The budget reflects a total of $33,000 in reserve. Is the training course registration fee revenue overstated in the budget?
Mr. Sandoval:
We were supposed to have collected over $16,000. To date we have collected nothing. A training session that would generate these funds is being planned. The difficulty is that we have not traditionally charged the prosecutors for this.
Senator Raggio:
The prosecutors asked for this program. I think we would like to see some real results. The budget shows no General Fund money. You should provide us with an amount now, in case you need to come to the Contingency Fund for money later.
Mr. Comeaux:
That is a possibility.
Mr. Sandoval:
I will now read tab B/A 1042 Domestic Violence, in the presentation booklet.
AG, Victims of Domestic Violence – Budget Page ELECTED-63 (Volume 1)
Budget Account 101-1042
Senator Raggio:
Why is there nothing in this budget item about subgrants to courts?
Ms. Lopez:
The courts are receiving subgrants now. At the time the budget was prepared there was no base budget. This is because the program had not spent any money at that point.
Senator Raggio:
This was brought to the attention of the budget office and still does not appear in the budget. We need to have something in the budget that authorizes that. What you propose would exceed the amount contemplated for the reserve. Somebody needs to look at this budget and come back with an amendment.
What are the grants? Are they federal funds? Do they pertain only to domestic violence?
Ms. Lopez:
Yes. They are all federal funds. Some are strictly federal funds and others have a state match, usually an in-kind match rather than an actual percentage. They all pertain to violence against women, not necessarily domestic violence.
Mr. Sandoval:
I will again read from my prepared text, page 14, CFS Juvenile Justice Programs, B/A 1383.
CFS, Juvenile Justice Programs – Budget Page ELECTED-70 (Volume 1)
Budget Account 101-1383
The Executive Budget transfers the operation of the juvenile justice budget account to the Office of the Attorney General. The way the transfer is now proposed may create some problems in terms of how duties and responsibilities are split. I am concerned that the current proposal would not be efficient. We may propose an amendment.
Senator Raggio:
We need to see what you are proposing.
Senator Cegavske:
I would like to encourage you to take the whole unit, because I am concerned that a split will not be as efficient as it is now.
Mr. Sandoval:
I would like to discuss B/A 1343, the Ethics Commission. It is part of the Governor’s budget, though it is not on the agenda. We want to put it in the record today. Please review with me page 14 of my prepared text (Exhibit C).
Ethics Commission – Budget Page ELECTED-66 (Volume 1)
Budget Account 101-1343
Senator Raggio:
This committee is adjourned at 8:55 a.m.
RESPECTFULLY SUBMITTED:
Michael Archer,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: