MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session March 9, 1995 The Committee on Ways and Means was called to order at 7:35 a.m., on Thursday, March 9, 1995, Chairman John Marvel presiding in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Jan Evans, Vice Chairman Ms. Sandra Tiffany, Vice Chairman Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Vonne Chowning Mr. Jack D. Close Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. Bob Price Mr. Larry L. Spitler COMMITTEE MEMBERS ABSENT: Mr. Joseph E. Dini, Jr. STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst Mr. Gary Ghiggeri, Deputy Fiscal Analyst Mr. Ronald Steele, Program Analyst ASSEMBLY BILL 7 Transfers commission on postsecondary education from department of business and industry to department of education. Chairman Marvel called for a motion on A.B. 7, previously heard February 27, 1995. ASSEMBLYWOMAN GIUNCHIGLIANI MOVED DO PASS ON A.B. 7. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. (ASSEMBLYMEN CHOWNING, ALLARD AND DINI WERE ABSENT AT THE TIME OF THE VOTE). ASSEMBLY BILL 13 Requires submission of proposal to issue general obligation bonds to provide grants to local governments and department of transportation for projects for controlling erosion and restoring natural watercourses in Lake Tahoe Basin. Chairman Marvel called for a motion on Assembly Bill 13, previously heard March 6, 1995. Ms. Giunchigliani requested this bill be held pending amendment regarding the debt limit. Mr. Hettrick concurred the language did need clarification and indicated he had no problem with an amendment specifying "outside the debt limit" and there was also a question whether the bill applied to all Nevadans. The committee chose to hold A.B. 13 pending amendment. ASSEMBLY BILL 22 Authorizes administrator of division of state parks of state department of conservation and natural resources to establish certain accounts relating to operation of state parks. Chairman Marvel called for a motion on A.B. 22. Mark Stevens, Fiscal Analyst, referred to subsection 1 of section 1 which provides for a separate fee account for each state park. Staff recommends all fees be combined within one budget account in the State Treasury with each state park in a separate category within the account. This would require amendment. ASSEMBLYWOMAN EVANS MOVED AMEND AND DO PASS. ASSEMBLYMAN CLOSE SECONDED THE MOTION. Ms. Giunchigliani inquired what section the amendment would affect. Mr. Stevens indicated the amendment would most likely be incorporated in section 1 and would provide that each park's fees be accounted for in a separate category within one budget account. THE MOTION CARRIED UNANIMOUSLY. (ASSEMBLYMAN DINI WAS ABSENT AT THE TIME OF THE VOTE). ASSEMBLY BILL 33 Repeals obsolete provision relating to disposition of balance in abandoned property trust fund. Chairman Marvel explained A.B. 33 relates to abandoned property. The bill was heard March 6, 1995. Chairman Marvel called for a motion on A.B. 33. ASSEMBLYWOMAN TIFFANY MOVED DO PASS ON A.B. 33. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. (ASSEMBLYMAN DINI WAS ABSENT AT THE TIME OF THE VOTE). ASSEMBLY BILL 126 Makes supplemental appropriation to division of forestry of state department of conservation and natural resources for certain expenses relating to helicopters for use during fire season. Chairman Marvel opened discussion regarding A.B. 126. Mr. Hettrick requested verification that there is no overlap in expenses because a one-shot appropriation also relates to repair or preparation of two helicopters. Chairman Marvel said no vote would be taken on A.B. 126 until clarification regarding expenses is obtained. ASSEMBLY BILL 127 Makes supplemental appropriation to division of agriculture of department of business and industry for additional veterinary medical services. Chairman Marvel called for a motion on A.B. 127 which makes a supplemental appropriation to the Division of Agriculture, Department of Business and Industry, for additional veterinary medical services. The bill was first heard February 27, 1995. ASSEMBLYWOMAN EVANS MOVED DO PASS ON A.B. 127. ASSEMBLYWOMAN TIFFANY SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYWOMAN GIUNCHIGLIANI AND ASSEMBLYMAN SPITLER VOTED NO. (ASSEMBLYMAN DINI WAS ABSENT AT THE TIME OF THE VOTE). ASSEMBLY BILL 129 Makes supplemental appropriation to division of forestry of state department of conservation and natural resources for additional staff and equipment for state administrative office. Chairman Marvel opened discussion on A.B. 129, previously heard February 27, 1995. Mr. Stevens reported A.B. 129 would provide three additional positions (two accounting positions and one clerical support position) in the Division of Forestry budget. Previous discussion regarded whether the accounting positions should be placed in the Director's Office or the Division of Forestry. Fiscal staff recommends the two accounting positions be placed in the Director's Office and the clerical support position be placed in the Division of Forestry budget. Funding provides for hiring on April 1, 1995; however, it is unlikely this can be done so the amendment includes delaying hiring until April 15, 1995. Ms. Giunchigliani requested explanation of why a vote was taken to add positions separate from the budget and whether the positions were incorporated in the budget for the upcoming biennium. Mr. Stevens explained the positions are built into the budget for the upcoming biennium. A supplemental appropriation is requested now so the positions can be filled before fire season starts. Mr. Stevens explained the forestry budget would be adjusted to reflect $5,603 to support the one clerical support position. A new section would be created to appropriate money to the Director's Office in the amount of $33,145. These figures would comprise the amendment. An overall savings of $5,000 would be realized. ASSEMBLYMAN HETTRICK MOVED AMEND AND DO PASS. ASSEMBLYMAN CLOSE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. (ASSEMBLYMAN DINI WAS ABSENT AT THE TIME OF THE VOTE). ASSEMBLY BILL 105 Requires state board of education to provide for instruction relating to crimes. Assemblyman Dennis Nolan, Assembly District 13, explained A.B. 105 provides for education to children regarding criminal laws and maximum penalties for violating laws. Children are subject to violent influences through television, school, video and computer games and many are not able to differentiate between right and wrong. Juvenile crime statistics continue to rise. A.B. 105 provides instruction to be integrated into an existing course of study and was drafted with the assistance of the Clark County School District and the Teacher's Association. Mr. Nolan explained the primary consideration in the bill language was to permit local school districts to develop a detailed program to suit their needs without adding a new course of study and fiscal burden. Mr. Nolan expressed disagreement with the fiscal note of $3,000 to each school district because the district may choose to accept assistance volunteered by the District Attorney's Association to help provide local districts with curriculum. The cost of implementing the program may be less or more than the fiscal note indicates, depending on the desires of local school districts. Mr. Nolan reported A.B. 105 does not represent an unfunded curriculum mandate because school districts would have complete control over curriculum development and associated costs. The only requirement relates to teaching the psychological and physiological effects of violent crimes on victims and their families. Common Agenda, a Reno based group comprised of civic leaders and media executives and the Families of Murder Victims support A.B. 105 and offered to reproduce a professionally produced instructional videotape which would satisfy the requirements of the bill. Mr. Nolan reported at the first hearing of A.B. 105 in Las Vegas, the State Public Defender, the Metropolitan Police Department and Clark County School District testified on its behalf. Ms. Giunchigliani confirmed Mary Peterson, Superintendent of Public Instruction, had been involved in drafting the bill to insure a new course of curriculum did not need to be developed and inquired what grade levels the bill would affect. Mr. Nolan said originally the bill was designed to educate high school students; however, the language has been changed to allow districts to put the education at an earlier grade. Ms. Giunchigliani inquired whether the aforementioned videotape was on the accepted and approved materials list for the school districts. Mr. Nolan responded negatively as there is no reason to approve the video until curriculum has been developed. Ms. Giunchigliani added that cost is an issue and A.B. 105 does represent an unfunded mandate. Mr. Nolan indicated the investment would be a worthwhile one in the effort to fight juvenile crime. Ms. Giunchigliani referred to line 7 and inquired whose views of the "psychological and physiological effects of the victim" will be taught. Mr. Nolan responded each school district would make that determination. Mr. Spitler inquired whether A.B. 105 would mandate the curriculum be taught in all schools throughout the state. Mr. Nolan responded A.B. 105 does not mandate the curriculum be provided in all schools throughout the state. Some school districts may find merit in spacing the curriculum through different grades. Mr. Spitler inquired how much class time would be devoted the curriculum. Mr. Nolan said this would be the decision of the school districts; however, a suggested five hour course has been devised. Mr. Spitler indicated the fiscal note is somewhat misleading as it does not take into consideration any actual classroom time; if an additional ten minutes was added to the school day, the cost could be as high as $20 million. Mr. Spitler inquired if time is not added to the school day, what instruction would be eliminated in order to provide the additional curriculum. Mr. Nolan responded the school districts would make that determination. He noted that priorities change and with current crime statistics, education of this type needs to assume a higher priority. Ms. Tiffany inquired whether a program regarding crime education already in existence could incorporate this additional curriculum. Mr. Nolan said the DARE program might do this, but would require additional staff for the Metropolitan Police Department. However, despite the six years of effort by the DARE Program, juvenile crime continues to rise dramatically. Ms. Tiffany expressed her concern regarding the cost of the program and suggested looking at expanding the DARE Program in some fashion. Mr. Allard inquired whether the DARE Program teaches the punishments for various crimes. Mr. Nolan responded it did not and added the proposed curriculum covers items not included in the DARE Program. Mr. Allard expressed his appreciation of Mr. Nolan's efforts and indicated any money spent on the program would be more than justified by the results. Mr. Close agreed with Mr. Allard regarding the importance of the issue and indicated he shared Mr. Spitler's concerns regarding the cost. Mr. Close inquired whether Mr. Nolan would accept a sunset clause to A.B. 105 to allow time to evaluate the program. Mr. Nolan responded this would be an acceptable amendment to the bill if the amendment allowed sufficient time to fully determine the impact of the curriculum because evaluation of the impact could take a significant period of time and many other factors affect the increase in crime. Ms. Giunchigliani indicated the bill language seemed to mandate each school district incorporate the curriculum. She suggested perhaps one approach would be to involve families through programs at police substations. She recommended the word "shall" in Section 1, Line 3, be changed to "may" to allow the school districts flexibility. Mr. Nolan remarked community and social efforts are already underway in an attempt to address these issues. He added the word "shall" merely determines the requirement but does not designate the scope of effort put into the curriculum. Chairman Marvel recognized Assemblyman Bill Harrington who spoke in support of A.B. 105. He explained A. B. 105 does not request additional time for the school day as time will come from current social studies classes, displacing some of that curriculum. The curriculum as tentatively proposed by the District Attorney's Office would include four 45 minute sessions. Mr. Harrington agreed A.B. 105 is an unfunded mandate but felt the issue warranted the expense. Chairman Marvel inquired whether the Education Committee voted unanimously to pass A.B. 105. Mr. Harrington responded one member from each party voted no. Mr. Spitler asked what scope of crimes would be included in the curriculum. Mr. Harrington responded each school district would decide what would be taught based on local needs. Chairman Marvel recognized Keith Rheault, Deputy Superintendent of Public Instruction, who read from prepared testimony, attached as Exhibit C. Mr. Arberry expressed concern that judges would impose harsher sentences on students who had completed the curriculum and subsequently committed crimes. Mr. Rheault indicated it is difficult to anticipate because the curriculum content has not been defined. Mr. Arberry indicated care must be taken that sentencing does not automatically become harsher for those individuals who completed the course. Mr. Nolan said the intent of A.B. 105 is that an individual who has been taught the penalties for committing a crime and does commit a violent crime deserves a jail sentence. He expressed doubt that judges' decisions would be influenced by an individual having taken this course. Mr. Arberry said many times in high crime areas, juveniles commit a violent act in self defense and do not deserve jail time. Mr. Nolan expressed appreciation for Mr. Arberry's comments and said A.B. 105 would not impact in a negative way the ability of an individual to defend himself. Mr. Fettic questioned language in Section 1 of A.B. 105 which says "relating to crime." He inquired whether the purpose of the bill is to target violent crimes against society and other children in schools and whether the subcommittee considered confining the bill to that area. Mr. Nolan said in the original bill draft, "violent crime" was specified; however, the fact that juvenile crime of a nonviolent nature is proliferating led to the desire for a greater flexibility in the bill language so that crimes such as "tagging" could be addressed in the curriculum. Ms. Giunchigliani expressed concern that children who have completed the curriculum would potentially be treated differently. Many adults who know the law choose to commit a crime and are not sentenced differently. She indicated the curriculum would not be a deterrent; however, it might teach that there are consequences for one's behavior. Ms. Giunchigliani added the curriculum would need to be more narrowly defined for different age groups and that the proposed four 45 minute classes would be a significant amount of instructional time to lose. She remarked if each school district chooses its own curriculum, different groups of students will be taught different messages which could create an inequity. Mrs. Chowning indicated she views A.B. 105 as "preventative medicine" and added society spends millions of dollars to incarcerate individuals but is not willing to fund prevention. Mr. Allard observed Mr. Harrington's testimony did not indicate children who had completed the curriculum would be subject to harsher penalties but sentencing would be more fair because the individual committing the crime had prior knowledge of the penalties. Chairman Marvel recognized Douglas Byington, Nevada Association of School Administrators, who spoke in opposition to A.B. 105 and cited several flaws. The bill is a curriculum mandate which further overburdens teachers. The present curriculum contains 17 legislatively mandated courses, four of which were added during the last session. He added Nevada has more mandated courses than any other state, resulting in micro management of a system that is already managed by elected officials. The State Department of Education testified the cost to implement the course will be $3,000. Once the "instruction relating to crimes" has been developed, each school district must adapt that instruction to its social studies program. The bill does not specify grade level so it could involve grades 4 through 12. Normally, instruction adaptation is done by a committee of teachers at each level which could require either release time and the hiring of substitute teachers or overtime pay for teachers. Mr. Byington estimated the cost to Washoe County would be $13,500 in wages to adapt the curriculum. Once the curriculum is in place, in-service training for teachers relating to law and psychological and physiological effects on victims and families would be necessary. Chairman Marvel recognized Henry Etchemendy, Executive Director of the Nevada Association of School Boards, who testified the Nevada Association of School Boards is against mandated curriculum which intrudes further into the school day. He expressed agreement with the concerns voiced by Mr. Byington. Mr. Fettic inquired whether Mr. Etchemendy and Mr. Byington had testified at the Education Committee hearing. Mr. Etchemendy indicated he had been unable to attend. Mr. Byington indicated he had testified. Mr. Hettrick inquired whether teachers' groups have made recommendations to discontinue some of the 17 mandated courses. Mr. Byington indicated a bill is being drafted to discontinue four of the mandated subjects. Mr. Hettrick asked how Mr. Byington would regard A.B. 105 if four of the mandated courses were removed. Mr. Byington responded A.B. 105 is still a mandate and would take time away from the curriculum. In addition, it could create difficulties for smaller counties with fewer resources than the larger counties which have greater resources. Chairman Marvel recognized Lucille Lusk, Nevada Concerned Citizens who noted Ms. Giunchigliani had expressed nearly all the concerns of Nevada Concerned Citizens. Ms. Lusk testified she served on the Clark County School Board for eight years. She said A.B. 105 permits the local school districts the decision regarding the level and amount of instruction. However, the bill language provides the state board the power to regulate, so every local school district will be required to follow the state board's decision; that decision is as yet unknown. If A.B. 105 is passed, a mandate will be created without the specific terms of the mandate being apparent. Chairman Marvel called for further public testimony. There being none, he remanded A.B. 105 to the Assembly Committee on Ways and Means and Senate Finance Joint Subcommittee on Human Resources/K12 and requested committee members notify Mr. Nolan whenever A.B. 105 will be considered. SENATE BILL 146 Makes appropriation to state board of examiners to restore balance of certain accounts. Chairman Marvel recognized Janet Johnson, Deputy Administrator, Budget Division, who testified S.B. 146 seeks to reinstate fund balances for the Emergency Fund, the Statutory Contingency Fund and the Stale Claims Account. The balances in the Emergency Fund and the Statutory Contingency Fund have changed slightly. An agency recently requested a stale claim in the amount of $418,000 which will deplete the fund by one-third. It is requested to amend the portion of the bill affecting the Stale Claims Account by $400,000. Chairman Marvel explained for the benefit of the new committee members these are statutory requirements of the money committees. Chairman Marvel recognized Mr. Ghiggeri who said the bill language indicates $1,104,000 to restore to $1 million and inquired whether the account is currently $100,000 overspent plus the $400,000. Ms. Johnson said the account is overspent by $20,000 based on bills pending and in excess of $1 million is needed to bring the fund balance up to $1 million. Chairman Marvel asked what dollar amount is under consideration. Ms. Johnson responded $1,504,000. Chairman Marvel called for a motion on S.B. 146. ASSEMBLYWOMAN EVANS MOVED AMEND AND DO PASS ON S.B. 146. ASSEMBLYMAN SPITLER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. (ASSEMBLYWOMAN TIFFANY AND ASSEMBLYMAN PRICE WERE NOT PRESENT AT THE TIME OF THE VOTE). Ms. Giunchigliani inquired how the fund became overspent. Ms. Johnson responded there is no advance knowledge regarding how much agencies will submit in stale claims. The majority of stale claims come from the medical area. Mr. Ghiggeri explained the $418,000 Ms. Johnson referenced was an overpayment made by Medicaid to Northern Nevada Mental Retardation in fiscal year 94 which was not discovered until after the close of the fiscal year so the overpayment was reverted to the General Fund. Medicaid is now requesting the overpayment be refunded. SENATE BILL 150 Makes supplemental appropriation to commission on ethics for certain expenses. Chairman Marvel recognized Thomas Wilson, Chairman of the Ethics Commission, who indicated this supplemental appropriation is required to support the Ethics Commission through the balance of this fiscal year. The funds will be used to fund six meetings and if six meetings do not take place, the unused funds will revert. Ms. Giunchigliani asked whether the funding requested is adequate. Mr. Wilson responded affirmatively. ASSEMBLYWOMAN GIUNCHIGLIANI MOVED DO PASS ON S.B. 150. ASSEMBLYMAN CLOSE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. PUBLIC SERVICE COMMISSION REGULATORY FUND - PAGE 681 Mr. Spitler disclosed for the record he is an employee of Sprint Central Telephone - Nevada and would not participate in hearings or votes regarding the Public Service Commission. John Mendoza, Chairman of the Public Service Commission, reported the mission of the Public Service Commission is to regulate all intrastate operation of investor- owned utilities, telecommunications providers, railroads, motor carriers and oil pipeline firms. The Commission is charged with establishing just, reasonable and nondiscriminatory rates and fares. Mr. Mendoza indicated the Commission is within the Executive Branch, has a Legislative function to promulgate regulations and a Judicial function to conduct hearings and rate cases. Many rate cases involve considerable periods of time, numerous witnesses and have a potentially dramatic financial impact. Statutes allow 180 days to complete a rate hearing and 135 days to complete a resource plan. Statutes governing the Public Service Commission include NRS 703 through NRS 709 and NRS 712. Mr. Mendoza reported current areas of focus include deregulation in the gas field, telecommunications rule making, and restructuring of the electrical industry. Chairman Marvel inquired how regulation of telecommunications is funded. Mr. Mendoza responded funds are generated from the mill assessments on utilities. Chairman Marvel asked whether funds should come from another source since mill assessments are not part of telecommunications. Mr. Mendoza indicated alternative sources of funding had not been investigated. Chairman Marvel reiterated the mill rate levy is not an inter-related activity to other utilities. William Vance, Public Service Commission Secretary, explained telephone companies pay the same mill assessment rate as gas and electric companies. Chairman Marvel inquired what telecommunications companies pay. Mr. Vance said telecommunications companies also pay a mill assessment on gross intrastate revenues. Mr. Mendoza continued that also affecting the Commission's budget are mergers between companies. The changing environment in regulation coming from Washington, D.C. will have an effect on Nevada, so the budget requests authorization and funding of $175,000 for a consultant to make a recommendation on structure of the Commission to respond to the changing regulation environment. The National Association of Regulatory Utility Commissioners has invited all state public utility commissions to participate in a conference to be held in April regarding restructuring of their own agencies in response to restructuring of companies regulated by utility commissions. Chairman Marvel requested discussion of the status of deregulation of the trucking industry. Mr. Mendoza said deregulation began as the result of a lawsuit between Federal Express Corporation and the California Utility Commission. It was determined Federal Express is an interstate trucking corporation with incidental airline operations. Federal Express maintained that the airline operations delivering baggage or cargo constituted interstate commerce and the corporation should be exempted. The 9th Circuit Court of Appeals granted the exemption, in effect deregulating the motor carrier industry in the state of California. United Parcel Service requested the same exemption and were denied. Congress attached the exemption to a bill dealing with funding of airports. As of January 1, 1995, the Public Service Commission no longer regulates cargo businesses. Chairman Marvel inquired whether the Commission is now completely divorced from that regulation. Mr. Mendoza said the Commission still regulates safety for the carriers, routes, sizes and weight limitations and has a financial responsibility to make certain carriers are properly insured while on public highways. The Commission still regulates household movers. Chairman Marvel asked whether the same level of staffing at the Public Service Commission was necessary. Mr. Mendoza said the budget recommends decreasing 26 positions. The recommendation includes reducing the number of commissioners from five to three and reducing staff accordingly. Chairman Marvel inquired whether a bill draft was in process. Mr. Mendoza said the bill draft is being prepared by the Department of Administration. Mr. Vance explained the reduction of 26 positions is contained in decision unit M650 in the Executive Budget. Chairman Marvel noted the bill draft needs to be received before any budgets can be closed. Mr. Mendoza said the bill draft affecting statute had been approved by the Commission during the last week and was sent to the Legislative Counsel Bureau. Chairman Marvel requested Mr. Mendoza monitor the progress of the bill draft to ensure expeditious processing. Mr. Vance explained adjustments to the base budget include the request for a video conferencing system between the Commission hearing rooms in Carson City and Las Vegas. A reduction in in-state travel has been requested as a result of the video conferencing system. Mr. Vance reported the M200 decision unit requests a position for a utility engineer as the staff currently lacks manpower to perform annual inspections of small water companies required by NAC 704. Chairman Marvel inquired why the out-of-state audit account reflects an increase from $3,883 to $10,000 in the base budget. Mr. Vance explained out-of-state audit is a revolving travel account whereby travel expenses are paid and then reimbursed into the account. Chairman Marvel asked why the account is part of the base budget and suggested it should be a maintenance decision unit. Mr. Vance said the out-of-state audits are ongoing programs and during some fiscal years, travel expenses have been as high as $10,000; however, as the payments are reimbursed, the total may be as low as the $3,883 reflected for fiscal 94. Chairman Marvel requested explanation from a Budget Office representative. Jere Schultz said the account is revolving and expenses in fiscal 94 reached a maximum of $5,000 or $6,000 before reimbursement lowered them. The $10,000 represents the total that could be spent and will ultimately be reimbursed. Chairman Marvel suggested perhaps the account would be more appropriately included in a maintenance category. Chairman Marvel expressed concern regarding the expert consultants line in the base budget which reflects an increase from $117,109 to $205,000. Mr. Vance said consultants are hired depending upon what cases are filed by regulated companies. Chairman Marvel said incorporating out-of-state audit and expert consultants in the base budget causes confusion. Mrs. Evans added that in the budget summary on page 688, expert consultants increases from $117,109 to $205,000 to $455,000 in fiscal year 1995-96. Mr. Vance responded part of this figure results from an enhancement for a management study that is also paid out of expert consultants which accounts for the single year increase in the first year of the biennium. Mrs. Evans reiterated perhaps the item needs to be placed in a different budget category. Mr. Vance responded the situation could have been handled as a maintenance decision unit to explain the difference between actual costs and the $205,000. Chairman Marvel said that was the intent of the budget organization. Mr. Close asked whether the Commission's mission statement would be revised because of deregulation of the motor carrier industry. Mr. Mendoza explained the Commission still regulates the motor carrier industry with the exception of the moving of property. The Commission's mission is diminished but not changed. Mr. Close referred to the measurement indicator "utility certificate amendment" and asked why the actuals and projections rise and fall. Mr. Mendoza noted this indicator changes with industries coming into the state. Chairman Marvel requested discussion of decision units. Mr. Vance said decision unit M650 recommends the reduction of 26 positions, including two commissioners, in response to the Federal Transportation Regulation Preemption. This will reduce the Public Service Commission Highway Fund appropriation by 63 percent or $1.4 million in fiscal 96 and $1.423 million in fiscal 97. Mr. Vance explained decision unit E176 requests authorization of $175,000 to hire a consultant to perform an analysis of the PSC's organizational and operational structure; it is believed this will result in a more efficient and effective operation. Decision unit E177 recommends a Legal Case Manager be hired to provide the organizational skills necessary to manage the increasing number of complex cases. Mr. Mendoza explained attorneys currently perform this work and it would be less expensive to have a case manager perform this function. Chairman Marvel confirmed this position would not be an attorney and asked what the job description would be. Mr. Mendoza explained the person should have a paralegal background and understand the Public Service Commission and appropriate documents, exhibits and time frames. Chairman Marvel inquired how many attorneys are currently on staff. Mr. Mendoza responded three staff attorneys and three general counsel or policy attorneys. Ms. Giunchigliani asked whether the consultant referenced in decision unit E176 would be obtained through a request for proposal. Mr. Vance responded affirmatively and indicated the search would be coordinated through the National Association of Regulatory Commissioners. Ms. Giunchigliani asked what the $175,000 would include. Mr. Vance responded it would include all costs associated with the management study. Mr. Arberry asked when the management study would be completed, all recommendations submitted and implementation begun. Mr. Mendoza indicated the entire process should be completed within nine months to one year. Mr. Arberry requested a copy of the request for proposal be provided to the committee. Mr. Mendoza agreed to do this. Mr. Vance continued his discussion and explained decision unit E326 requests additional out-of-state travel for commissioners who must remain informed on current regulatory issues. Chairman Marvel questioned whether additional travel money would be required when the number of commissioners is being reduced by two. Mr. Vance responded negatively and said the reduction in personnel recommended by the Governor results in a $6,000 reduction in out-of-state travel for commissioners. The net impact is reflected on page 688 in the budget summary. Chairman Marvel indicated the budget summary reflects an increase in out-of-state travel of $6,000; there are two fewer commissioners who will travel yet the overall out-of-state travel budget increases. Mr. Hettrick said in fiscal 94 five people spent $18,000 for out-of-state travel and now it is proposed that three people spend $25,000 on out-of-state travel. Mr. Vance said out-of-state travel is used by many staff members. Each commissioner is allocated $3,000 per year while the remainder provides travel for advisors to participate in federal issues. Mr. Hettrick noted decision unit E326 states out-of-state travel is provided for commissioners. Mr. Vance said the increase would be an increase for commissioners only. Mr. Hettrick then inquired why travel was raised for the commissioners. Mr. Schultz explained the additional $6,000 is because the remaining commissioners will have additional travel over the next biennium to become informed regarding new regulatory and technical issues via national and regional conferences. Chairman Marvel requested a schedule of travel be provided in order to justify the increased funding. Mr. Mendoza indicated the information would be forthcoming. Mr. Vance reported issues to be addressed by the remaining three commissioners are very similar to those addressed by the original five commissioners. Mr. Fettic questioned why three commissioners required more travel than five commissioners. Mr. Mendoza said the issue would be resolved. Mr. Vance said decision unit E900 provides the transfer of $70,429 to fund base expenses previously funded by administrative fines in budget account 224-3921 due to the fact that revenues from the administrative citation process have been considerably less than estimated. Mr. Hettrick requested explanation of $75,000 for expert consultants in decision unit M650. Mr. Vance said that funding was for an administrative law judge. With three commissioners rather than five, the caseload will become heavier and the administrative law judge will absorb some of the caseload. Mr. Hettrick inquired whether this constitutes a delegation of the hearing authority. Mr. Mendoza responded statute provides this authority for the area of transportation. Many commissions that are three in number have an administrative law judge. Mr. Mendoza said several individuals may be used for this function depending on the length and types of hearings. Mr. Hettrick confirmed this would be at the discretion of the Commission and that a request for proposal would not be required. Mr. Mendoza indicated a contract would be made to retain an administrative law judge for a particular hearing. One of the 26 positions to be reduced is the transportation hearing officer who will be transferred to the Department of Transportation. The PSC will now have to absorb the remainder of that caseload. Mr. Hettrick asked whether the PSC's work load would drop 40 percent in accordance with the 40 percent drop in the number of commissioners. Mr. Mendoza said funding for the administrative law judge will be used on an as-needed basis. The impact of losing two commissioners is not fully known at this time; however, experts in telecommunication regulation have estimated a significant amount of litigation regarding interpretation. The electrical industry has also advised if a retail wheeling bill is passed, that industry will reorganize and this will result in more hearings. Mr. Vance added it is estimated one-fifth of the commissioner caseload results from transportation, or one commissioner; however, the commission must be made up of an odd number of members. The resultant caseload reduction should be less than the work load of one commissioner because one-third of transportation will still be regulated. Chairman Marvel requested explanation of the increase in reserves. Mr. Vance said reserves are reflected in the budget as higher than actual. The mill assessment is set every year to plan for a reserve of between $600,000 and $900,000. Chairman Marvel indicated the reserve balance in the second year of the biennium is indicated to be in excess of $2 million. Mr. Vance responded the mill assessment would be lowered so this did not happen. The reserve appears high because as the Governor reduces the Commission's request for expenditures, that reduction adds to reserve. Also, more was put into reserve because it was not known whether any cost of living increases would be included in the salary amounts in the Executive Budget and funds were included to cover salary expense. Chairman Marvel indicated it was expected salaries and numbers of staff members would decrease. Mr. Vance said when the original budget was submitted, the preemption had not yet taken place. He assured the committee the mill assessment would be set to lower the reserve so it remained below work program levels and added the Commission has no desire to have a reserve at that level. Chairman Marvel requested explanation from a Budget Office representative why the work program reflects $500,000, the Governor recommends $900,000 for fiscal year 1995-96 and $2 million for fiscal year 1996-97. Mr. Schultz explained this reflects recommended costs as opposed to anticipated revenue collected as a result of the mill assessment. The agency had provided lengthy calculations to justify the revenue. The intention would be to reduce the mill assessment and never achieve that size of a reserve. Chairman Marvel inquired whether the mill assessment is too high. Mr. Vance responded negatively and indicated the maximum allowed by statute has not been reached. Chairman Marvel reiterated his concern about the rapid rise in reserves and indicated staff would review the issue. Mr. Vance pointed out on page 688, total positions should be 93.5 for each year of the biennium rather than 119.5. Mr. Mendoza indicated the number of attorneys is currently five but is being reduced to four. PUBLIC SERVICE COMMISSION - ADMINISTRATIVE FINES - PAGE 690 Mr. Vance explained statutes require a separate administrative citation account and also provides the Commission the authority to write citations. The process has been successful in that the number of citations issued and resulting revenues have decreased. Mr. Arberry referred to the budget summary on page 691 and requested explanation of why the reserve balance falls from $60,000 in FY 95 to $9,000 in FY 97. Mr. Vance said the reserve is being spent down because there is no reason to carry a reserve in this account. Chairman Marvel inquired what the optimum reserve balance would be in this account. Mr. Vance said zero because this account is not necessary for start-up funding of the following year. Chairman Marvel called for public testimony. There was none. SENATE BILL 147 - Makes supplemental appropriation to office of the military for additional utility expenses. Drennan Clark, The Adjutant General, introduced Larry McCracken, the Director of Administration and Finance, and Joel Pinkerton, Fiscal Analyst from the Budget Division. General Clark reported S.B. 147 requests additional funding for a shortfall in the amount of $182,665 for utilities for fiscal 1995. Of that amount, $101,988 is federal funding and S.B. 147 seeks authority to receive that federal funding; the state portion of $80,677 is requested as an appropriation from the General Fund. The shortfall results from new facilities which opened during the last fiscal year at the Air Guard Base in Reno, including a medical dining facility, a flight simulator building and a flight simulator. Because of additional aircraft, an additional maintenance shift and a Replacement Training Unit (RTU) for F4 pilots were added. Also contributing to the shortfall is a new federal computer system which requires additional power plus heating and cooling to maintain an even temperature. Chairman Marvel inquired whether the amount of funding would change. General Clark responded it would not for this year and added the additional utility requirements have been built into the budget for the next two years. Mr. Pinkerton pointed out the figures used to calculate the requested appropriation are based on three or four months of experience and are subject to change. Chairman Marvel called for public testimony. There was none. MILITARY - PAGE 2031 General Clark distributed a sheet of amended measurement indicators (Exhibit D). He explained the number of soldiers receiving tuition assistance, measurement indicator No. 4, under Army National Guard, should reflect 134 projected for FY 96 and FY 97; measurement indicator No. 6, the amount of state share of building maintenance costs, should reflect $51,940 for actual FY 94 and $51,505 projected for FY 95. General Clark further explained under Air National Guard, the number of airmen receiving tuition, measurement indicator No. 4, should reflect 110 in FY 96 and FY 97. Measurement indicator No. 5, amount of state share of building maintenance costs, should reflect actual for FY 94 of $82,520 and projected for FY 95 of $82,897. General Clark referred to page 2032 and reported agency transfers comes from the Office of Emergency Management which occupies two-thirds of the basement of the headquarters building, as their share of the cost of operation and maintenance. General Clark reported operating expenses are mostly federal funds and include rental for two recruiting offices in shopping centers in Las Vegas and Reno; money paid monthly to the Airport Authority of Washoe County for use of common areas at Reno-Tahoe International Airport for the Air Guard and at Stead for the Army Guard Aviation Unit; security guards at the Air Guard base and security guards at the Army flying installation at Stead. Chairman Marvel inquired whether steps were being taken to address the rather high utility costs. General Clark responded utility costs are high because new facilities are being added, including an organizational maintenance shop in Yerington to be opened within the next three to four weeks; an organizational maintenance shop at Stead to be opened within the next six months; an armory complex includes an organizational maintenance shop, warehouse and combined support maintenance shop to be constructed in Clark County to open in September of 1996; and a new armory in Reno to open in September of 1996. Mr. Close asked whether the change in aircraft from F-4's to C-130's would affect the budget. General Clark responded the change should not affect the budget as flying and training operations would continue. Mr. Close questioned why measurement indicator No. 1 under Air National Guard, number of units ready for deployment vs. number of mission units, reflects 18 in all actual and projected fiscal years. General Clark responded these are the squadrons under the group; the number of units ready for deployment is the same as mission units. Mr. Allard asked how many of the airmen receiving tuition assistance actually receive college degrees. General Clark answered they are all required to be working toward a degree to participate in the system. Information regarding the number of graduates would be provided to the committee. Mr. Hettrick referred to decision unit M625 which provides protective clothing in accordance with OSHA regulations and inquired why operating expenses are listed. General Clark said a portion of the operating expense is to provide suitable storage for hazardous materials until disposal. Another portion is to provide training to those individuals who handle the hazardous materials. Mr. Hettrick noted the operating expense is outside of the current budget. General Clark said a large portion of funding is federal. Mr. McCracken reported there is a separation between equipment (storage cabinets, hazardous liquid spill pallet, hazardous chemical cabinets) and protective clothing. Mr. Hettrick requested that fiscal staff be provided a copy of the itemized list. Mr. McCracken said the information would be forthcoming. Mr. Arberry asked the status of the new building in southern Nevada. General Clark responded ground has not yet been broken; funding for the state's portion of construction and site preparation is in the CIP budget. It is hoped to be at contract by September 30 to avoid loss of the $10.5 million federal dollars. Construction will begin immediately after the contract. Mr. Arberry inquired when construction is estimated to be completed. General Clark said September of 1996 and the state portion of utilities for that building has been built into the budget. Mr. Arberry asked whether utilities had been overestimated to allow for any expansion or whether utilities were part of the design. General Clark responded utilities were part of the design. Mr. Arberry confirmed the utilities design would handle any potential additional buildings. General Clark said water and power lines would be available but future additions might require additional utility expense. Chairman Marvel inquired whether enough money has been budgeted for SIIS payments. General Clark said the Budget Office had approved the budget and a quarterly payment would provide SIIS protection to guardsmen who are called to state active duty by the Governor to fight fires or in the event of civil disturbance. Mr. Pinkerton noted the Budget Office would provide a letter regarding the inclusion of SIIS payments as an add-on to the budget. Chairman Marvel inquired whether the SIIS payments will be totally state funded. General Clark responded affirmatively because SIIS will cover soldiers on state active duty at the order of the Governor. Mr. Allard requested explanation of the Guard's participation in the Challenge Program. General Clark explained the Challenge Program is federally funded and coordinated through the National Guard. The Program is located on Mesa Air Force Base in Arizona which recently closed. The Program takes high school dropouts, ages 15 through 19, who are drug-free and not presently in the criminal justice system into a five month military oriented residential program which aims at getting participants a GED. At the end of the five month residential program, participants receive a $1,700 stipend which can be used for tuition at a community college, university or trade school and are assigned a National Guard mentor and a mentor from their home community to meet with them on at least a weekly basis to help with any difficulties adjusting to the community and work cycle. The third class recently graduated. Mr. Allard inquired whether the Program would accept graduates from the boot camps and indicated the Director of Human Services had testified the Guard was opposed to accepting those graduates. General Clark said the Guard is interested in recruiting graduates of the Challenge Program and would be happy to discuss the possibility of moving boot camp graduates into the Challenge Program. Mrs. Evans asked whether the Guard interacts with the Division of Child and Family Services. General Clark said the Program is new and is coordinated with Arizona because of the physical facilities; however, there is no reason why individuals finishing the boot camp could not be considered for the next Challenge course. Mrs. Evans inquired whether any written documentation describing the Program is available. General Clark responded affirmatively and indicated the committee would be provided with that information. Chairman Marvel requested discussion of decision unit M200. General Clark said this decision unit requests four additional employees resulting from the growth of facilities and the aging of other facilities. All four positions, to begin in July of 1995, are funded 75 percent by the federal government. The three positions requested for the Air Guard base in Reno include a building custodian necessitated by the expansion of that installation to 33,600 square feet; a Facility Supervisor II which was lost during budget cuts; a Grounds Maintenance Worker to maintain the 64 acres of the Air Guard base who would also perform maintenance on the landscaping equipment and do interior painting during the winter months. An Account Specialist would be located in the Carson City headquarters and would handle the payroll, accounts payable, accounts receivable and contracts for all state and federal operations in the Nevada Army and Air National Guard. Mr. Arberry referenced a federal maintenance manpower study which indicated the federal government would fund up to 75 percent of nine new positions and asked why only four new positions were requested. General Clark reported the three positions requested for the Air Guard Base in Reno would be adequate to maintain that facility. Mr. Spitler asked General Clark's comments regarding whether Veteran's Affairs should be located within the Department of Public Safety or within the Office of the Military. General Clark responded it seemed more sensible for Veteran's Affairs to be within the Office of the Military. General Clark explained decision unit E425 provides funding for additional positions for Army Guard facilities including a half-time building custodian in expectation of the new armory in September of 1996 at Stead; a senior building custodian for the Clark County Armory Complex in September of 1996; a maintenance repair specialist to be stationed in Clark County to handle the four new buildings to come on-line plus the Henderson Armory; and a 51 percent building custodian for the Plumb Lane property in Reno to begin in July of 1995. Mrs. Evans inquired whether the custodian at Plumb Lane would handle outside clean-up as well. General Clark responded the exterior of the building will be cleaned up. Mr. Arberry asked if the capital improvements for the armories in Clark and Washoe Counties are those on page A-67. General Clark responded affirmatively. Mr. Arberry inquired whether the projects will be completed by September of 1996. General Clark said if the projects go to contract in September of 1995, they should be on-line in September of 1996. ADJUTANT GENERAL CONSTRUCTION FUND - PAGE 2039 General Clark explained $5,000 from armory rental fees is retained in this account to perform minor unscheduled maintenance and repair on the armories. Also, $12,000 is retained from armory rental fees to be used as matching funds should the federal government provide funding for armory repairs; the account is also used as a pass-through account for funds sometimes provided at the end of the federal fiscal year for repair of armories or building funds. Funds are received into this account and then transferred to 101-3650 for expenditure. NATIONAL GUARD BENEFITS - PAGE 2041 General Clark explained this account provides funding for tuition assistance in the amount of up to 50 percent of tuition costs at community colleges or either state university for guardsmen and guardswomen who are participating in the guard, are taking courses at a university or community college toward a degree and pass the courses with at least a grade of "C". Benefits are paid at the end of the semester when grades are presented. General Clark testified the base budget of $45,000 would fund approximately 30 percent of tuition costs. Decision unit E425 requests an additional $28,000 which would enable approximately 50 percent of tuition costs to be paid. Chairman Marvel confirmed the additional $28,000 would bring funding near the authorized level of 50 percent. DEPARTMENT OF EMPLOYMENT, TRAINING AND REHABILITATION Carol Jackson, Director of the Department of Employment, Training and Rehabilitation, made an overhead presentation regarding the Department's organization. She distributed a folder entitled "Department of Employment, Training and Rehabilitation Ways and Means Committee Presentation March 9, 1995," a copy of which is on file in the Research Library of the Legislative Counsel Bureau. Ms. Jackson discussed a document (Exhibit E). The document contained a chart which reflected the Department's organization in 1993. Exhibit E also reflected what financial, personnel and data processing services were available to each Division within the Department prior to realignment; only two of the total eight Departments had access to all three types of services and four Departments had access to none of the services. Ms. Jackson reported in June of 1994, she testified before the Interim Finance Committee that no reassignments would be made until she appeared before the Legislature and received permission to permanently assign individuals to different areas; however, as the restructure of the Department proceeded, it became apparent the agencies without access to complete services were working under a severe handicap. During an appearance before the Interim Finance Committee in March of 1994, Ms. Jackson received approval for four positions: the Director, the Executive Assistant, Assistant Director and Financial Manager (reflected on the third page of Exhibit E). The Director, Assistant Director and Financial Manager positions came from Rehabilitation and the Executive Assistant position came from Employment Security. Ms. Jackson referred to a page entitled "Proposed Realignment" in Exhibit E reflecting which positions were moved from what agencies. It is proposed the Public Information Officer, originally within Employment Security, provide services to all Divisions; the Auditor II, originally within Rehabilitation, provide services to all Divisions. Also requested are a Management Assistant III and a Management Assistant IV. Information Development and Processing would be staffed by two positions from Rehabilitation and 65 positions from Employment Security. The State Occupational Information Coordinating Committee (SOICC) would move into Employment Security. In the Administrative Services Unit, the Financial Manager position received a total of 28.5 staff members from the State Job Training Office, the Equal Rights Commission and Rehabilitation. The Personnel Officer received six employees from Rehabilitation and Employment Security. The Office Services and Facilities Manager received positions from Employment Security. Ms. Jackson emphasized the reorganization results in no reduction in services to Employment Security and would expand services to all agencies within the Department. Mr. Arberry asked whether Ms. Jackson had the statutory authority to make the reorganization. Ms. Jackson responded affirmatively and noted the reorganization had allowed her the statutory authority to create any new divisions necessary to perform the duties of the Department; however, she sought legislative approval. Mr. Arberry confirmed the reorganization is only proposed at this point. Ms. Jackson responded she had made some administrative reassignments but reorganization has not yet been implemented. Chairman Marvel inquired what statute provided the authority. Ms. Jackson indicated the information would be forthcoming. Ms. Giunchigliani inquired whether the Committee to Hire the Handicapped would be moved to the Department of Business and Industry. Ms. Jackson indicated discussions were ongoing with Rose McKinney-James, Director of the Department of Business and Industry, and the Governor's Office regarding this transfer. Ms. Giunchigliani asked Stan Jones, Administrator, Employment Security Division, how many employees were moved from ESD to work in the Combined Audit Program. Mr. Jones responded fourteen positions were lost, six positions will be returned and one additional auditor will be added during the second year of the biennium. Ms. Giunchigliani confirmed this level of staffing will allow those audits required by the federal government to be performed. She also inquired how services would not be reduced when a total of 100 employees will be moved from ESD to other Divisions as a result of the reorganization. Mr. Jones responded the positions will be moved from ESD; however, the same services will be provided by other Divisions within the Department. Ms. Giunchigliani inquired what authority an administrator would have to give direction regarding an agency's needs to another administrator. Mr. Jones answered the needs would be channeled through the Director of Employment, Training and Rehabilitation. Ms. Giunchigliani expressed concern whether those departments responsible for financial management, personnel and data processing could be sufficiently responsive to the needs of other Divisions. Ms. Jackson responded Division Administrators work closely together. Ms. Giunchigliani observed most employees perform many tasks other than their specific job description and asked, when employees were shifted to task-specific areas, who would perform those tasks that were not specifically within the job description. Ms. Jackson explained data processing employees were not performing functions other than data processing. Ms. Giunchigliani noted some ESD employees would be performing work for ESD and other agencies and questioned whether they would be properly allocated. Ms. Jackson explained three employees will be designated to perform cost allocation. Ms. Giunchigliani reiterated concern about the number of employees transferred out of ESD and whether the agency would have sufficient staff for its needs. Ms. Jackson responded the citizens and the department would receive much better service with consolidation because an aggressive marketing program will be pursued to insure employers in the state become aware of all the services available to them. Ms. Giunchigliani questioned whether the Department had sufficient funds to perform the marketing. Ms. Jackson responded affirmatively. Chairman Marvel observed the Department is scheduled to appear before the Interim Finance Committee to request ten staff members. Ms. Jackson concurred and noted the staffing is for the One-Stop Career Center, completely funded by the Department of Labor. Chairman Marvel indicated this issue would be more properly addressed in subcommittee rather than the Interim Finance Committee. Ms. Jackson responded there was a risk of losing federal funding. Chairman Marvel asked the time frame. John Orr, Assistant Director, Department of Employment, Training and Rehabilitation explained funds to support the ten positions comes through the Job Training Office in the form of JTPA funding, which has a program year of July to June, so the money needs to be obligated by June 30, 1995. Chairman Marvel inquired whether funding would be continued into the next year. Mr. Orr responded affirmatively. Chairman Marvel asked why the issue is coming before the Interim Finance Committee. Mr. Orr responded if the Interim Finance Committee met since November, the issue would have been raised then. Chairman Marvel indicated the committee met in December and January. Mr. Orr said the original intent was to fund the One-Stop Career Center out of a dedicated grant through the Department of Labor. Chairman Marvel inquired whether the Center is included in the budget for the next biennium. Mr. Orr responded negatively. EMPLOYMENT SECURITY - PAGE 1413 Stan Jones, Administrator for the Employment Security Division, reported this budget covers Employment Service and Unemployment Insurance Administration and receives no General Fund. The Division is provided administrative funding through the Wagner Peyser Act and the federal unemployment tax. Nevada must remain in compliance with federal requirements to receive the administrative funding. The Division has eleven full service offices located throughout the state with two industrial labor offices, one in Las Vegas and one in Reno. Mr. Jones reported the budget request includes resources necessary to perform tasks and functions required by the Department of Labor and to encourage growth and productivity in the state economy and to create a better prepared work force. During the upcoming biennium, a Northern Nevada Adjudication Center will be opened. A Southern Nevada Adjudication Center was opened in 1993. The benefits of combining adjudication of unemployment insurance claims into a centralized unit include: alleviation of crowded offices; provision of adjudication to clients by telephone; equalization of work load between local offices; centralization of the entire function; better service to claimant and employer; and centralized supervision and training. Mr. Jones said during this biennium, an interactive voice response unit will permit claimants to file continued claims by telephone and to inquire regarding available jobs. Training for the interactive voice response unit is included in the budget. Staff will be required to participate in re-employment act training and planning required by the Department of Labor. The re-employment act will change the unemployment insurance system into a re-employment system through one-stop career centers for employment and training. Claimant profiling, required by the Department of Labor, will identify unemployment insurance claimants in need of specialized services. Mr. Jones explained during the first year of the biennium, 61.4 intermittent positions will be converted at no budgetary cost. The Division will begin administration of the audit function; six audit positions will revert to ESD and one additional auditor will be required in the second year of the biennium. Operating and equipment requirements include two four-wheel drive vehicles for two offices in rural Nevada. ESD will share in the cost allocation of the operation of the Department of Employment, Training and Rehabiliation. Mr. Spitler requested comment regarding the four positions to be potentially eliminated by the Strategic Plan for Information Resources and Information Technology (SPIRIT) and the Divisions' request to retain two positions. Mr. Orr explained the four positions in question are systems programmers; since the mainframe is being eliminated, these mainframe systems programmers will not be needed. During the last year, two of those four positions were vacant at the time Karen Kavanau, Director of the Department of Information Services, testified the four positions would become surplus. Two positions were filled and redirected to work on the local area network and wide area network that complement mainframe applications; the Division has one systems programmer who will be required to maintain the relationship with the DIS mainframe. Mr. Spitler inquired how many positions are devoted to networking systems. Mr. Orr said Jim Hanna, Administrator of Information Development and Processing, was not present at the hearing and a written response to the requested information would be provided. Mr. Spitler indicated several questions would be provided in writing to ensure adequate staffing is maintained so the work of the Division can be accomplished. Mr. Orr expressed his concern regarding the effect NOMADS is having on the capacity of the DIS mainframe. Chairman Marvel requested discussion of decision units. Bruce Tucker, Assistant Chief Financial Officer, Department of Employment, Training and Rehabilitation, said decision unit M200 contains a request to provide $250,000 for scheduled overtime anticipated to be necessary to maintain normal operations. Chairman Marvel inquired how much vacancy savings is built into the budget. Paula Steinbauer, Budget Office, reported there are no vacancy savings because the Division is a non General Fund agency. Chairman Marvel inquired why overtime should be budgeted when there are no vacancy savings. Mr. Tucker responded historically the agency has required overtime. Chairman Marvel inquired how much vacancy savings had been in the last biennium. Mr. Tucker answered $2.8 million in vacancy savings were approved in both years. Chairman Marvel inquired why this policy had been changed. Mr. Jones said previously the Division was required to appear before the Interim Finance Committee to request augmentation. Janet Johnson, Budget Office, explained the change in policy was made because in the past, non General Fund agencies had to request augmentations to their budgets to make up for vacancy savings losses. It was decided not to build vacancy savings into those budget accounts where there was no need to find savings. However, in reviewing the process, it appears assessment budgets should perhaps include vacancy savings and the policy may be changed. Chairman Marvel indicated the issue would be further addressed in subcommittee because it is a major policy change. Mr. Jones explained decision unit E125 would provide for the opening of the Northern Nevada Adjudication Center to complete the standardization of uniformity in the adjudication of claims. This decision unit also provides for staff training on the new interactive voice response unit. Mr. Jones said decision unit E126 provides for travel to various United States Department of Labor training conferences relating to new federal regulations contained in the Re-employment Training Act, the One-Stop Career Center, the Job Corps Program and other veterans programs. Mr. Jones reported decision unit E127 provides for enlarged facilities for the Unemployment Insurance Contributions Office which outgrew its space in the State Administrative Office Building. Mr. Jones explained decision unit E150 converts 61.4 intermittent positions to permanent positions. These conversions do not represent a budget increase because the positions will be paid by reducing seasonal (intermittent) salaries in the base budget. Mrs. Evans questioned whether seasonal fluctuations no longer occur and seasonal help will not be necessary. Mr. Jones said a number of intermittent employees will remain because of the fluctuations that do occur in work load of the Unemployment Insurance section. The 61.4 positions have over the past 2-3 years worked 40 hour weeks and more than one receive longevity pay. Mr. Orr explained there are 240 authorized intermittent positions in this budget; 61.4 of those will be converted and approximately 40 intermittent positions will be retained to handle seasonal fluctuations. Mr. Jones said decision unit E175 provides staff training in order to assist unemployed individuals to return to work. This decision unit also provides travel that will be required between the One-Stop delivery sites. Mr. Jones explained decision unit E325 recognizes the audit function will be performed by the Employment Security Division beginning July 1 and also provides for one additional auditor in the second year of the biennium as the result of continued employer growth in the state. This decision unit also provides operating and equipment requirements for the conversion of this audit function back to the Employment Security Division. Chairman Marvel requested a list of needed equipment be provided to the committee. Mr. Jones agreed to do so. Mr. Tucker indicated the equipment would be for new positions as well as computers. Mr. Jones explained decision unit E710 provides replacement equipment in offices located throughout the state in each of the 11 full service offices and the two industrial offices and two four-wheel drive vehicles necessary for remote areas of service delivery. Mr. Spitler requested a list be provided of what equipment was transferred to the Department of Taxation along with the employees who were transferred. Mr. Jones responded the information would be forthcoming. Mr. Tucker said equipment sold to the Department of Taxation included 18 laptop 286 computers, associated software and nine or ten bubble jet printers at a cost of $10,000 or $11,000. Mr. Spitler emphasized this is the equipment list requested. Mr. Hettrick referred to decision unit E710 which includes a request for 210 software upgrades and asked why one software upgrade could not be used if the computers are connected via a LAN. Mr. Tucker responded the purpose was to have the proportionate share of Employment Security pay for that upgrade. Mr. Hettrick requested a report detailing what equipment will be purchased, where it will be placed and how the costs will be allocated. Mr. Orr added that revised performance indicators were included in the packet distributed by Ms. Jackson. CLAIMANT EMPLOYMENT PROGRAM - PAGE 1425 This budget hearing was deferred to subcommittee. EMPLOYMENT SECURITY - SPECIAL FUND - PAGE 1433 This budget hearing was deferred to subcommittee. Chairman Marvel called for a motion for introduction of BDR 10-1769 to increase the maximum amount of annual fee which may be imposed on each lot in mobile home park. ASSEMBLYWOMAN EVANS MOVED DO PASS ON BDR 10-1769. ASSEMBLYMAN SPITLER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Chairman Marvel called for a motion to introduce BDR S-1754 which makes supplemental appropriation to School of Medical Sciences of the University and Community College System of Nevada for certain unforeseen expenses relating to Family Practice Residency Program and Family Medicine Center. ASSEMBLYMAN HETTRICK MOVED DO PASS ON BDR S-1754. ASSEMBLYMAN PRICE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Chairman Marvel assigned responsibility for explaining Assembly Bill 7 on the Assembly floor to Mrs. Brower; Assembly Bill 22 to Mr. Spitler; Assembly Bill 33 to Mrs. Chowning; Assembly Bill 127 to Mr. Fettic; Assembly Bill 129 to Ms. Giunchigliani; Senate Bill 146 to Mr. Close; and indicated he would explain Senate Bill 150. With no further business to come before the committee, Chairman Marvel adjourned the hearing at 11:17 a.m. RESPECTFULLY SUBMITTED: Deborah Salaber, Committee Secretary Assembly Committee on Ways and Means March 9, 1995 Page