MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session June 16, 1995 The Committee on Ways and Means was called to order at 7:45 a.m., on Friday, June 16, 1995, Chairman Marvel presiding in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Jan Evans, Vice Chairman Mrs. Sandra Tiffany, Vice Chairman Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Vonne Chowning Mr. Jack D. Close Mr. Joseph E. Dini, Jr. Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. Bob Price Mr. Larry L. Spitler STAFF MEMBERS PRESENT: Mark Stevens, Fiscal Analyst Gary L. Ghiggeri, Principal Deputy Fiscal Analyst Chairman Marvel announced the committee had only 15 minutes before the joint hearing and asked Mark Stevens, Fiscal Analyst, to proceed. Mr. Stevens stated there is one budget still not closed. Mr. Stevens provided handouts to the committee, a Difference Report, attached hereto as (Exhibit B) and a single page document relating to the Legislative Interim Budget, attached hereto as (Exhibit C). With regard to the Legislative Interim Budget, Mr. Stevens stated the recommendation from Leadership would be an addition of approximately $10,000 in each year of the biennium, over and above what is included in the budget. ASSEMBLYMAN HETTRICK MOVED TO ADOPT THE LEGISLATIVE INTERIM BUDGET ADJUSTMENT AS SHOWN IN (EXHIBIT C) ATTACHED HERETO. ASSEMBLYMAN CHOWNING SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN ALLARD AND PRICE WERE NOT PRESENT FOR THE VOTE. Mr. Stevens continued with the Difference Report (Exhibit B) asking if he should go through each item individually. Chairman Marvel asked if anyone had any specific areas of concern pertaining to the Difference Report. Mrs. Tiffany inquired into the technicalities of the Department of Transportation (DOT) telecommunications functions being consolidated into the Department of Information Services (DIS). Mrs. Tiffany explained she was out of the room when the vote was taken. She stressed the hard work put forth by Ms. Giunchigliani and herself in this regard, and she was interested in knowing why the committee decided to leave it this way. Mr. Stevens pointed out it takes a two-thirds vote of both the Assembly and Senate committees to reopen a budget after it has been closed. Chairman Marvel stated this was one small phase of the budget. Mrs. Tiffany asked if there was an appetite from any other members of the committee to review this issue. Chairman Marvel stated he would rather not bring it up again. Ms. Giunchigliani asked what they would need to do on the budget readjustments based on that closing because the other division has been left short by two people. Ms. Giunchigliani clarified two individuals had been moved and the Senate did the opposite. Ultimately, the Senate version was adopted so there would appear to be a "hole" in the other division. Gary Ghiggeri, Deputy Fiscal Analyst, commented the action taken last Wednesday, he believes, did not have any bearing on the two positions in Conservation and Natural Resources. Ms. Giunchigliani asked what effect was had on DIS. Mr. Ghiggeri stated it reversed the transfer of the telecommunications positions from DOT to DIS. There was an action on the DIS budget to not transfer the positions and there was an action on the DOT budget to reverse the transfer. Chairman Marvel noted it dealt with whether the positions would be located in any certain place and did not affect the number of positions at either location. Ms. Giunchigliani stated the budget was closed anyway so there was likely nothing she could do about it. Chairman Marvel asserted the budgets were taken in the normal course of order that day. Mrs. Evans remarked further work was accomplished at a Joint Subcommittee on Business Process Reengineerings (BPR) and inquired as to the outcome thereto. Mrs. Tiffany reported to Mrs. Evans that the Department of Motor Vehicles (DMV) BPR was at $595,000; The Department of Business and Industry was encouraged to look at the insurance division primarily and was at $350,000; Public Safety & Prisons was at $250,000; and the Department of Human Resources (DHR) was at $675,000; with a letter of intent to place it in reserve and come back in January to request authorization after a plan on utilization of these funds was developed. Mrs. Evans asked if those figures had been agreed upon jointly. Mrs. Tiffany stated yes that was what has been proposed. Chairman Marvel confirmed no formal action had been taken as yet. Mrs. Evans asked if the committee needed to vote on it or if it could be handled downstairs at the joint committee meeting. Chairman Marvel responded it could be handled downstairs. Ms. Giunchigliani stated she could not find any of the Senators to review it but she provided the proposed BPR list to them and has yet to hear back. Mr. Spitler asked if the committee was ready for a new subject. Chairman Marvel declared the committee was discussing BPR's presently and asked if there was any member ready to formalize the recommendation. ASSEMBLYMAN EVANS MOVED TO FORMALIZE THE RECOMMENDATION. ASSEMBLYMAN TIFFANY SECONDED THE MOTION. Mr. Stevens stated staff changed the closing sheets which is not indicated on the handout based on a previous discussion. In that regard, Mr. Stevens noted the $400,000 BPR requested by the Secretary of State has been added back into the closing sheets as a BPR study. THE MOTION CARRIED. ASSEMBLYMAN ALLARD WAS NOT PRESENT FOR THE VOTE. Chairman Marvel announced that would be the recommendation the committee would bring to the Senate. Mr. Spitler noted with regard to page four of the Difference Report, (Exhibit B), the Purchase of Social Services, it has been held because the Senate is not willing to go forward with any general fund support to the Title XX grants as a one time appropriation for this biennium. Mr. Spitler stated the committee made a firm statement when they voted to provide an additional $250,000 for each year of the biennium. Then, Mark and Gary were able to determine that the full half million was not needed and the committees' recommendation could be implemented utilizing only $253,055 in general fund. However, the Senate has indicated they can recomb these numbers and come up with an additional $61,000 hard cash minimum to the $131,743 and then it would be simply a bet on the second year of the biennium because the Title XX monies are tied to population. Therefore, when the population figures are redone, it could mean more money. Mr. Spitler acknowledged the proposal to be presented today was to drop the $253,055 one shot appropriation and augment only $61,000 which is already found in Title XX monies since the Senate wants to get away from a general fund contribution. Mr. Spitler inquired into the thoughts of the committee on this issue. Mr. Stevens commented the Senate would also like to include a letter of intent from the committee that if additional monies over and above the $61,000 are received either through federal grants or through the reallocation of unspent funds, that those funds be allocated to non-state agency contracts up to the $253,055 recommended by the Assembly. Mr. Spitler stated he saw this as a smoke screen in terms of what is really going to occur, reminding that Nevada is an unusual state in how it allocates Title XX monies in the first place. The majority of Title XX money is used to fund state agencies. The philosophy and practice they should get to is that a minimum of ten percent of Title XX money flows to community-based organizations. Mr. Spitler commented the most they would probably see that could be counted on would be $191,000 additional for the first year of the biennium and $115,000 for the second year. Mr. Spitler stressed the importance of the service delivery at the community level and this would be a disservice. He concluded the Assembly's proposal was the one with the most merit and treated the entire state fairly and it was disappointing to hear the Senate's argument that general fund money has never been given to Title XX money before. However, Mr. Spitler would assert, transfers to non-state agencies are done all the time. When looking at where state money should go it should have a statewide implication. In addition, this is sometimes the only opportunity the rural counties have in getting any money to community based organizations. Chairman Marvel asserted it was a compromise and the Senate modified their position as well. Mr. Spitler disagreed and warned not to be fooled by the trickery of transference of money in Title XX funds. While it may be a compromise, Mr. Spitler added, it is a compromise in existing numbers and is not necessarily in addition to monies going to community-based organizations. Mr. Spitler solicited comments from other committee members. Mrs. Evans noted a part of the overall plan had to do with the interim study dealing with all block grants, not just the Title XX block grants, but all the changes of the federal government transition plan for Human Services. Mrs. Evans questioned how this review would be funded. Mr. Spitler responded his understanding of the way the Senate will close this budget is partially based on the Assembly's closing by adding $131,743 additional Title XX funds for non-state agency contracts in the first year of the biennium and $115,00O in the second year of the biennium. An additional $61,000 in Title XX funds would be provided for non-state agency contracts in FY1995-96. Within the additional amounts added $80,000 could be utilized over the 1995-97 biennium to fund the review of federal block grants. Mr. Stevens added the action of this committee on the additional state funds of $253,055 was to allow the Department of Human Resources to expend a total of $80,000 over the biennium to review the issue of federal block grants, if they chose to. Ms. Giunchigliani suggested the issue is for less government and if the Senate has a problem allocating one shot funds then why not take out of the budget the money that was improperly allocated for Title XX and give it to the local entities. Chairman Marvel announced the committee was going into a joint committee and the issue would be decided the democratic way by voting. Mr. Hettrick stated he was under the impression there was more money in reserves that would be allocated for non-state agencies in the second year. He hoped they would have some direction in that regard. Mr. Hettrick declared he has just been named to the board of the family support council in Gardnerville which is a non-state agency that receives money so he will not be participating in the vote hereto. Mrs. Tiffany, in addressing the automation budget for DMV, noted the committee closed differently than the Senate did when dealing with setting aside and reserves and she would encourage the committee to hold strong on that issue because BPR should drive the spending and direction for that money. Chairman Marvel indicated Lt. Governor Lonnie L. Hammargren would be allowed to briefly address the committee. Lt. Governor Hammargren stated he has been working on the requested education program for two years. The program passed through the Board of Regents, the Governor approved it, the State Board of Education approved it, the Commission of Economic Development approved it, the Clark County School System approved it, and the Washoe County School System approved it. It could not have been in the University System budget because it was closed last August. The program got lost or tied up in the process. It is a good program. Lt. Governor Hammargren concluded it is not an education program per se and therefore belongs in the Economic Development Budget and he would like to see the program implemented. Chairman Marvel announced the committee would be in recess to meet with the Senate. The hearing recessed at 8:02 a.m. and reconvened at 10:10 a.m. ASSEMBLY BILL 691 - Transfers capitol police to Nevada highway patrol division of department of motor vehicles and public safety. Gary L. Ghiggeri, Principal Deputy Fiscal Analyst, provided a handout which completely amended A.B. 691. The bold print represents the suggested changes to the bill with the first change appearing at page 5 of the handout attached hereto as (Exhibit D). The bill sets forth that members of the capitol police division will be transferred to the Department of Motor Vehicles and Public Safety and become a separate division in that department. This better represents the intent of the committee in closing the budget. Mr. Ghiggeri stated this matter has been discussed with State of Nevada Employees Association (SNEA) and they are in concurrence. Mr. Hettrick mentioned his notes reflect at the end of the original bill, page 5, the inclusion of language such as "legislatively authorized expenditures" and wondered if that language was present in the new revision of the bill. Mr. Ghiggeri replied that language was present on page 7, subsection 2, and new sections had been added to the bill which expands the original bill. ASSEMBLYMAN HETTRICK MOVED AMEND & DO PASS A.B. 691. ASSEMBLYMAN SPITLER SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN DINI, PRICE, ALLARD, AND ASSEMBLYWOMEN EVANS, GIUNCHIGLIANI, TIFFANY WERE NOT PRESENT FOR THE VOTE. * * * * * ASSEMBLY BILL 679 - Makes appropriation to division of child and family services of department of human resources to fund special activities for children in foster care. Mrs. Chowning testified due to the wonderful efforts of staff, another mode of funding has been brought forth pertaining to A.B. 679 which would free up approximately $20,000 in general fund. She continued there is a "gift fund" in the division of Child and Family Services wherein the interest alone could be used to fund the foster care childrens' extracurricular activities. Mrs. Chowning emphasized this would remove the one shot appropriation and that would give the program more of a chance for success. The Division would be required to report to the Legislature on how the funds were used. Mrs. Chowning indicated the interest would be $20,000 to $25,000 and asked what the committee would like to approve. Her recommendation would be for the maximum of $25,000. Mrs. Chowning provided a letter dated June 13, 1995 from the Department of Human Resources, attached hereto as (Exhibit E). Mr. Hettrick stated he would make a motion if the Chairman was ready. Chairman Marvel asked if Mrs. Chowning had an amendment. Mrs. Chowning stated it was not prepared as yet but Mr. Stevens assured her the amendment could be drafted expeditiously. Mr. Spitler stated it was his first time reviewing the issue and, recalling an Attorney General's (AG) Opinion in 1991 or 1993 regarding how the interest on the Childrens Gift Fund could be used, he was surprised . . . Mr. Ghiggeri interjected what Mr. Spitler was talking about was that the Childrens' Division not only has a gift fund they maintain for the children whereby agencies and persons make donations; but the Childrens' Division is also payee for certain childrens' social security benefits, disability benefits, or some other source. The interest on those payments is directed towards the children for their benefit. The gift fund is strictly donations and are not earmarked for a specific child. Mr. Spitler continued his recollection, without having the research in front of him, was one of those funds was exclusive to the Childrens Home in Southern Nevada and Northern Nevada. Mr. Spitler added if it is the same fund, he would like to see the AG Opinion on this because he tried to divert these funds once before to childrens' programs and was unable to. Mr. Hettrick acknowledged Mr. Spitler's concern and asked what Mrs. Chowning's preference would be this late in the session. His suggestion would be to pass A.B. 679 with the understanding that if the AG opinion returns and it is inappropriate, the bill could be placed on the chief clerk's desk and Mrs. Chowning could look for another source of funding. Mr. Hettrick stated he was concerned Mrs. Chowning would not be able to move the bill if it got too late and then the entire program would be lost, acknowledging again if the funding proves inappropriate then another source needs to be brought forth. Mr. Hettrick also indicated the bill calls for a report back to the Legislature of the spending so he would be willing to proceed with the bill. ASSEMBLYMAN HETTRICK MOVED AMEND & DO PASS A.B. 679 TO INCLUDE A CAP OF INTEREST INCOME OF $25,000 PER YEAR SUBJECT TO REVIEW OF THE AG OPINION. ASSEMBLYMAN ALLARD SECONDED THE MOTION. Mrs. Chowning expressed her appreciation for proceeding with the bill and concurred Mr. Hettrick's motion was appropriate. She added Plan B could be to go back to the bill as originally written which would require a be general fund appropriation. Chairman Marvel brought the motion back to the floor. THE MOTION CARRIED. ASSEMBLYMEN EVANS AND PRICE WERE NOT PRESENT FOR THE VOTE. * * * * * ASSEMBLY BILL 245 - Makes appropriation to department of taxation for computer and office equipment. Chairman Marvel stated Mrs. Tiffany worked closely with staff from the taxation department and a reasonable solution is being proposed. Mrs. Tiffany declared since the Department of Taxation was recommended to receive more positions, it was time to look at what kind of tools the new positions would require to collect more tax revenue. It was time to look at the department's automation plan. Mrs. Tiffany continued the Department of Taxation went from a $250,000 automation plan to a $500,000 automation plan with the comment that this could not be phased in appropriately. So, what the Department of Taxation did was take their existing hardware/software proposal and added in the local area network, plus a wide area network which connected them to a mainframe through a server, in order to save terminal emulation software as well as printer location. Also, she continued, they looked at terminals versus workstations and made some upgrades for more functionality. Finally, $25,000 was added to create an automation plan to take them through the next biennium. Chairman Marvel asked Mrs. Tiffany to state the amounts she was recommending. Mrs. Tiffany declared the total for data processing hardware and software was $374,980. The amount recommended for additional office equipment is not recommended to change. ASSEMBLYMAN TIFFANY MOVED AMEND & DO PASS A.B. 245. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. Mrs. Chowning asked for an approximate total, including the cost of office equipment. Mark Stevens, fiscal analyst, informed the office equipment was recommended at $53,927. Chairman Marvel brought the motion back to the floor. THE MOTION CARRIED. ASSEMBLYMEN EVANS AND PRICE WERE NOT PRESENT FOR THE VOTE. ASSEMBLYMAN SPITLER ABSTAINED. Mr. Hettrick commended Mrs. Tiffany for her good work with the Department of Taxation on A.B. 245. Chairman Marvel concurred. Chairman Marvel announced the meeting in the afternoon would be in room 119 to hear the crime bill, Senate Bill 416, and the hearing would be teleconferenced to Las Vegas. He asked the members to be promptly present at 1:30 p.m. The meeting adjourned at 10:30 a.m. RESPECTFULLY SUBMITTED: Joi Davis, Committee Secretary Assembly Committee on Ways and Means June 16, 1995 Page