MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session June 20, 1995 The Committee on Ways and Means was called to order at 7:42 a.m., on Tuesday, June 20, 1995, Chairman 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. 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 Jeanne L. Botts, Program Analyst Chairman Marvel announced the bill books for the committee were not available; however, a copy of Senate Bill 224 was provided to each member of the committee for review. Since the hearing on the Senate Bill 224 was not closed yesterday and Senator Rhoads was present to answer questions, Chairman Marvel asked the committee to direct their attention to Senate Bill 224. SENATE BILL 224 - Makes various changes regarding preparation of state budget and review of federal mandates and encroachments. Senator Dean Rhoads, Northern Senatorial District, acknowledged a conflict existed regarding Section 6 of S.B. 224 and stated he would like to offer a suggestion thereto. Senator Rhoads clarified Section 6 was not his idea and believed the concept was derived from Senate Bill 226. He suggested the committee delete Section 6 from S.B. 224 and proceed with the remainder of the bill as is. Chairman Marvel asked if the committee had any questions or if anyone in the audience wished to testify on S.B. 224. Chairman Marvel informed he and Chairman Arberry were both members of the interim committee study of methods of establishing a Legislative Budget Office and S.B. 224 was one of the recommendations from the interim committee. Senator Rhoads strongly suggested S.B. 224 would shorten the budget process and other than the state of California, he was unaware of any other western state that spends more than 100 days on the budget. Mark Stevens, Fiscal Analyst, stated John Perry Comeaux, Director, Department of Administration, requested an amendment if it is desire of the committee to proceed with the bill. That amendment would be at Section 28 which changes a date computerized budget files are due to the Legislative Budget Office. The bill currently sets forth the date of October 1st and Mr. Comeaux would prefer an October 15th date. Chairman Marvel acknowledged Mr. Hettrick had expressed concerns to S.B. 224 at the previous hearing. Mr. Hettrick commented his concerns involved Section 6 so if that Section was deleted he would have no problem proceeding with the bill. Chairman Marvel announced Mr. Comeaux was now present and asked him to come forward to comment on the bill. John Perry Comeaux, Director, Department of Administration, stated he has reviewed S.B. 224 and expressed to the committee that the Department of Administration has serious concerns about the concept of the bill. Mr. Comeaux stated the Governor is concerned the establishment of a Legislative Budget Office would be a duplication of efforts and in the first biennium establishing such an office would cost $1 million. Thereafter, the on-going cost would be approximately $500,000 during the biennium. Mr. Comeaux informed, based on the current budget preparation cycle, the Administration has voluntarily made significant changes in the way the budget is managed and presented to the Legislature. Therefore, the Governor believes S.B. 224 is not necessary. Mr. Comeaux indicated the changes the Administration made resulted in the Legislature obtaining a great deal of information on the Executive Budget more than 30 days before the session commenced. Mr. Comeaux commented on another bill, Assembly Bill 210, which would establish into statute the changes made by the Administration. He explained Assembly Bill 210 would require the Administration to present to the Legislature by December 15th the base budget and additional information regarding the maintenance component of the budget. In that regard, by December 1st, the Legislature will have the revenue estimates upon which the budget is based. Assembly Bill 210 would also require that by the 19th day of the legislative session the Administration submit to the Legislative Counsel Bureau (LCB) all bills necessary to implement the Executive Budget. Mr. Comeaux added this deadline was nearly met this session. Mr. Comeaux stated the second concern the Administration has pertaining to S.B. 224 involves the review accorded the Executive Budget if there were also to be a legislative budget. He stated the Governor does not understand if it takes five months to thoroughly review the Executive Budget, how two budgets (the Executive Budget and a Legislative Budget) can be reviewed in the same amount of time or less time. The Governor is concerned his recommendations may not receive the consideration they deserve if a Legislative Budget is developed. Chairman Marvel asked if Mr. Comeaux had observed the closing sheets of the committee. Mr. Comeaux stated yes he had. Chairman Marvel commented very few budgets have been closed strictly by the Governor's recommendation. Mr. Comeaux acknowledged that was correct. Chairman Marvel stated he was compelled to continue with the concept of a Legislative Budget Office because the two budgets would likely be resolved more quickly if legislative input is received prior to the session. Mr. Comeaux insisted the committee could understand the Governor's apprehension in terms of the level of review his recommendations may receive if S.B. 224 were to pass. Those two issues aside, however, Mr. Comeaux stated with the level of cooperation currently existing between the budget office and the LCB, the details of the mechanics of S.B. 224 can be resolved. Mr. Comeaux emphasized he would strongly suggest the committee amend the bill to reflect a date change from October 1st to October 15th. Mr. Comeaux indicated the current date to supply the computerized files is November 15th which includes all agency requests. If the amendment to Assembly Bill 210 is approved, which requires the agencies to submit their budget requests to the Administration two weeks earlier, then the Administration is only losing approximately two weeks, net. Mr. Price asked if Mr. Comeaux would like a list of all the states that develop a Legislative Budget in addition to the Governor's budget which reflects how much time is saved. Mr. Comeaux acknowledged a number of states proceed in the fashion set forth in S.B. 224. Mr. Price asked for clarification regarding the Governor voluntarily allowing LCB staff to be present during budget matters as a result of legislation enacted several years ago. Mr. Stevens clarified the fiscal analysis division is statutorily invited to attend and participate in budget hearings between the agencies and the budget director during the budget building process. However, all matters disclosed during those meetings remain confidential until the Executive Budget is released. Chairman Marvel asked if staff would be allowed to discuss the base budget. Mr. Stevens concurred, once released, the base budget can be discussed and if the Administration has released information relating to the agencies' requests, that information can also be discussed. However, any information learned during a budget hearing by LCB staff is confidential unless the Administration allows disclosure to legislators or the budget is released. Mr. Price acknowledged S.B. 224 does not specifically state the Administration could be present during the budget hearings so proposed. Mr. Comeaux also recognized a clause of that nature was not present in the bill. Chairman Marvel remarked he has sat on the interim committees reviewing the state's budget process for three sessions and this was the first word he had that the Governor was displeased with the direction the committee was taking and that gives him some concern. Mr. Comeaux clarified his earlier comments in response to Mr. Price's comments. In that regard, his comments regarding the voluntary actions taken by the Administration for this session for the budget preparation process referred to releasing the base budget and information concerning the maintenance portion of the budget earlier. Mr. Comeaux stated this earlier release of information, along with the economic forum revenue estimates, allowed the Legislature to publicly release information that covered approximately 90% of the budget. Mr. Comeaux indicated the voluntary actions taken before this legislation as outlined above are placed in Assembly Bill 210 which would make the procedure a statutory requirement. He further commented on analysts attending the budget hearings in the past. Mr. Comeaux indicated the Governor was under the impression the Administration and LCB were working together to solve existing problems in the legislative process and allow the requirements of Assembly Bill 210 to evolve before taking further action. Chairman Marvel expressed his disagreement with Mr. Comeaux since Mr. Comeaux attended most of the interim hearings in this regard and knew exactly the direction of the interim committee in proceeding with the creation of a Legislative Budget Office. Chairman Marvel declared he did not appreciate Mr. Comeaux coming before the committee this late in the session after the subject has been discussed for over six years. Mr. Comeaux responded his belief was the interim committee wanted to make revisions to the existing legislative process. He agreed there were discussions of a Legislative Budget Office at times but he thought the focus was shifting from that concept. Chairman Marvel reminded Mr. Comeaux the suggestion of a Legislative Budget Office was clearly set forth in the recommendations of the interim committee. Senator Rhoads interjected Mr. Price succinctly grasped the concept in that many other states have two budgets and the other states make it work without extending the legislative process. Senator Rhoads indicated he has spoken with legislators from other states regarding the process and he believes the reason Nevada is in session for 160 days is due to working on the budget. Senator Rhoads acknowledged a concern that arose in yesterday's hearing was other legislators would not be able to participate in the budget process Yet, other legislators would in fact be allowed to participate in the hearings early in the process. Commenting on the $1 million cost, Senator Rhoads stated if the proposed Legislative Budget Office reduces the legislative session by 20 to 30 days and does a much better job, the initial set-up cost will be worthwhile. Chairman Marvel concurred the rationale of the interim committee was if 20 days can be reduced from the legislative session then the initial investment has paid for itself. Senator Rhoads emphasized in addition to saving time and money, he believes the proposed Legislative Budget Office would do a better job because information on what the state agencies needed could be obtained and the process will place the Nevada Legislature into the 21st Century. Chairman Marvel closed the hearing on S.B. 224 stating the committee would take the comments made today under advisement. ASSEMBLY BILL 581 - Makes various changes concerning department of business and industry. Rose McKinney-James, Director, Department of Business and Industry, stated A.B. 581 was extremely important to her. She informed the committee the Department of Business and Industry was created as a result of the reorganization of state government which merged what was the Department of Commerce with a variety of other agencies with three common interests--consumer protection, business regulation, and industrial relations. Ms. McKinney-James indicated since she did not participate in the reorganization efforts, some items remain statutorily unclear and A.B. 581 attempts to make clarifications. Ms. McKinney-James provided a handout outlining the major provisions of the bill, attached as (Exhibit C), entitled "Suggested Technical Amendments to A.B. 581." Ms. McKinney-James remarked A.B. 581 was originally referred to the Assembly Commerce Committee then re-referred to the Ways and Means Committee because of the provisions in the bill that implement the budget. In an effort to clarify concerns surrounding the bill and to strengthen the bill, re-drafting occurred and the results are present in the technical amendments shown in (Exhibit C). Essentially, A.B. 581 attempts to clarify the authority and role of the Director of the Department of Business and Industry in providing administrative oversight to the department. Also, A.B. 581 establishes the authority to create an office of business finance and planning, and a section for business advocacy. The bill provides the Director of the Department of Business and Industry the authority to utilize alternative dispute resolution for those agencies having a significant amount of volume. In addition, A.B. 581 transfers the office of hospital patients from the Insurance Division to the Consumer Affairs Division and establishes the ability of the Director of the Department of Business and Industry to administer and establish a trust account in the state treasury for the industrial development bond program. Chairman Marvel asked her to explain the mechanics of assessment. Ms. McKinney-James asked for clarification on that phrase. Chairman Marvel indicated that would involve the various agencies under her jurisdiction. Ms. McKinney- James responded when the Department of Business and Industry was created, there was no independent revenue stream so the budget office created a cost allocation system based on a formula considering the number of full-time employees, the source of revenues, and the amount of revenues within each agency of the Department. John Perry Comeaux, Director, Department of Administration, interjected the original method for allocating costs, namely "full-time equivalence" was used initially because another method of allocating costs was not available at the time. Chairman Marvel asked how many general fund agencies were currently under the Department of Business and Industry, along with the number of outside boards and commissions. Ms. McKinney-James stated her recollection is there are in the vicinity of 60 boards and commissions but the exact amount of general fund agencies she would have to provide at a later date. She indicated the vast majority of the agencies under the Department of Business and Industry are funded based on revenue generated from the industries the agencies regulate with very limited general fund appropriations. Chairman Marvel asked Ms. McKinney-James to comment on the essence of the proposed amendments. Turning to (Exhibit C), Ms. McKinney-James indicated Section 3 provides the authority to create the office of business finance and planning. The amendment thereto is to clarify the focus of that office would be financing, in order to avoid a conflict with the efforts of the Commission on Economic Development. In addition, Section 3 provides the Director of the Department of Business and Industry the ability to work cooperatively with the executive director of the Commission on Economic Development with respect to programs that may be jointly developed between the two agencies. Ms. McKinney-James indicated Section 5 of the bill relates to alternative dispute resolution methods. Section 7 of the bill would remain the same. With regard to Section 6 of the technical amendments, she would request line 26 of the bill be deleted. Continuing to Section 8 of the bill, she indicated that section clarifies the ability of the director to appoint the heads of the divisions. The technical amendments thereto are proposed to insure no violations of any current authority on a board or commission. Turning to Section 8, subsection 3 of the bill, located at page 4 of the handout, (Exhibit C), Ms. McKinney-James stated this section will provide her with the authority, if consistent with the statutes, to establish uniform polices for the Department of Business and Industry. She stressed this section is very important to her in that there are a number of very small agencies with no centralized budget, budget staff, personnel, or data processing. Therefore, her office takes on the responsibility of assisting the small agencies. However, at a future date she would like to centralize the procedure for the Department of Business and Industry. In the meantime, the language proposed hereto will give her the authority to proceed. She then discussed subsection 3(b) regarding the coordination among divisions, agencies, and entities under the Department of Business and Industry, for the enforcement of regulations, execution of agreements, preparation of legislative requests, and purchase of goods. Ms. McKinney-James indicated she would like to respond to Chairman Marvel's earlier questions regarding the break-down of the general fund agencies versus non general fund agencies. In that regard, according to the Governor's recommended budget, approximately two-thirds of the 29 agencies in the Department of Business and Industry are non-general fund. As a result of the recommendations included in the Executive Budget, specifically the Consumer Affairs Division, there would be an increase in the amount of general fund monies received by the Department of Business and Industry. Mr. Price, acknowledging the charts provided to the committee attached hereto as (Exhibit D), inquired if it was inappropriate to have an agency that has attorneys under the direction of a department head when some litigation may involve employees within the same department Ms. McKinney-James stated with respect to independence, the Nevada Attorney for Injured Workers (NAIW) was placed in the Department of Business and Industry as a result of the reorganization of state government. She stated the attorneys work independently from the Director's office with the exception of the administrative supervision of the budget and entering into non-exempt contracts. She informed the Nevada Attorney for Injured Workers was placed in the Department of Business and Industry because this locale would provide them with the least amount of conflicts. Mr. Allard asked how the proposed office of business finance planning would differ from the Commissions on Economic Development and Tourism. Ms. McKinney- James replied the proposed office of business finance planning will deal directly with business finance and the industrial development bond program. Whereas, the Commissions on Economic Development and Tourism are engaged in promotion and marketing. Mr. Allard asked for a definition of the "special projects" referenced in the bill. Ms. McKinney-James stated an example of a special project would be for the development of directories or brochures. Ms. McKinney-James provided the Nevada Department of Business and Industry Directory, and The Nevada Industrial Development Revenue Bond Program brochures as examples for the committee. (The originals of these items are included on file at the research library of the Legislative Counsel Bureau.) She indicated the special projects aspect will allow her the flexibility as new items develop to expand and provide information on an on-going basis. Ms. Giunchigliani commented on the Nevada Attorney for Injured Workers (NAIW) issue brought forth earlier and asked if any discussion has developed to place these attorneys in a similar guise as public defenders. Ms. McKinney-James stated there was no particular discussion in that regard. However, she indicated Ms. Nancyann Leeder was present to testify and provide a suggestion to the committee to consider an exemption for NAIW or consider additional language to clarify that section of the bill. Ms. McKinney-James stressed the language in her technical amendments have been specifically crafted to address the concerns of Ms. Leeder in order to avoid the situation wherein a non-lawyer would be in a supervisory role of a law firm. Ms. McKinney-James clarified her concern is matching responsibility with authority. Ms. Giunchigliani asked when NAIW became appointed by the Insurance Commissioner instead of the Governor. Ms. McKinney-James clarified the chart so referenced by Ms. Giunchigliani (Exhibit D) was an internal cluster system utilized for communication involved in the Department of Business and Industrial Relations and went on to explain how she uses this form. The Insurance Commissioner simply serves as the Chair of the internal cluster containing the NAIW. Ms. Giunchigliani stated Ms. Leeder would likely clear up this issue when she testifies. Chairman Marvel asked for clarification on Section 2 of the bill, the account for special projects. Ms. McKinney-James stated when the Department of Business and Industry was created, she determined the Department was thin on resources. So, when she looked at the budget in an attempt to up-date materials necessary for providing information, she was informed there was no funding for that purpose. Therefore she held discussions with the private sector and the University System regarding establishing funding from outside sources into a separate and distinct account to track gifts and donations. Chairman Marvel asked if she went through the Board of Examiners and Interim Finance Committee (IFC) for acceptance of the program. Ms. McKinney-James stated she did not; however, her understanding is a review by the Board of Examiners was not required. Chairman Marvel asserted gifts and donations of a certain amount must be approved by IFC. Mr. Comeaux stated he believed the same rules would apply to the Department of Business and Industry and the only exception he knew of was if the gifts or donations were approved in advance through the budgetary process. Chairman Marvel noting there were no further questions of Ms. McKinney-James, opened testimony on A.B. 581 to the audience. Robert Barengo, Chairman, Dairy Commission, stated the Dairy Commission was placed within the Department of Business and Industry during the reorganization of state government; however, the original proposal was to combine the Dairy Commission and the Division of Agriculture. When the final decision was made, that recommendation did not stand and the Dairy Commission became a division within the Department of Business and Industry. Mr. Barengo stated the Dairy Commission opposes provisions in the bill, specifically, page four, line 26, the inclusion of the Dairy Commission. He requested the committee consider removal of language thereto. Mr. Barengo indicated Ms. McKinney-James has concurred with this suggestion. He stated the concern of the Dairy Commission is that the passage of A.B. 581 would supplant the functions of the Dairy Commission and they would become abrogated to the Director of the Department of Business and Industry. Chairman Marvel asked if the Dairy Commission were to be removed from the bill, would the Dairy Commission still be to function. Mr. Barengo stated yes. Ms. Giunchigliani expressed concern that if the Dairy Commission is removed from A.B. 581, then the door will open for other groups to argue to be removed as well. Ms. Giunchigliani asked Mr. Barengo if the Dairy Commission was uncomfortable with the amendments to Section 8, subsection 3 and 3(b). Mr. Barengo stated that was accurate and read from subsection 2, "the director may, if he deems it necessary, to carry out his administrative responsibilities, be considered as a member of the staff of any division or other entity of the department for the purpose of budget administration or for carrying out any duty or exercising any power necessary to fill the responsibility of the director as provided in this section." Mr. Barengo concluded this language would allow the director to exercise authority that should not be exercised. Mr. Fettic noticed in the suggested technical amendments the Dairy Commission is still contained in the bill and asked if the bill were to proceed would Mr. Barengo wish that language extracted. Mr. Barengo stated yes that was correct. Ms. McKinney-James clarified the cost allocation process would still include the Dairy Commission. Mr. Barengo stated he understood that intent adding the Dairy Commission would be removed from A.B. 581 thereby removing the certain powers of the Director over the Dairy Commission. Doug Busselman, Executive Vice President, Nevada Farm Bureau, shared his concerns which deal with maintaining the statutory authorities for regulations and policies vested within various boards and commissions. Specifically, Mr. Busselman continued, the statutes which govern the Board of Agriculture, include very specific authorities for that particular board. However, the enactment of A.B. 581, would appear to provide dual authority and jurisdiction. Chairman Marvel interjected there may be pre-emption present. Mr. Busselman agreed that may be possible. However, the Farm Bureau would be more comfortable if subsection 2 on page four of the handout (Exhibit C) were deleted entirely. He indicated this request was presented to Director McKinney-James and this area still remains unresolved although the Farm Bureau has no problem with the remainder of the bill. He understands the purpose of the reorganization was to streamline the administrative functions of state government. Chairman Marvel asked Ms. McKinney-James to respond to Mr. Busselman's comments of subsection 2, page four of the handout. Ms. McKinney-James replied Mr. Busselman was correct in that they met to discuss the language in subsection 2 and amendments thereto. However, her understanding was the language set forth in subsection 2 was satisfactory to Mr. Busselman. When the bill was heard in Assembly Commerce Committee he was in support of the bill as amended and she thought he was referring to the technical amendments so proposed. Further, she does not recall any discussion regarding eliminating subsection 2; rather, the discussions involved clarifying subsection 2. Ms. McKinney-James stated subsection 2 is an essential aspect of her responsibilities. She continued, during the time she has been the Director of the Department of Business and Industry she has worked well with the Board of Agriculture. The Farm Bureau, and other agencies have required significant in-put from her with respect to budgeting, accounting oversight and other administrative matters. Ms. McKinney-James strongly emphasized her concern that the responsibility she is given as Director of the Department of Business and Industry is matched with the authority. Chairman Marvel pointed out, in response to Mr. Busselman's comments, subsection 1, states: "nothing herein may be construed to pre-empt any lawful authority or jurisdiction vested in any division, entity, board, commission, or office expressly provided in statute or other law" and asked if this language meets his concerns. Mr. Busselman indicated the language was an improvement from the time A.B. 581 was heard in the Assembly Commerce Committee; however, the language in subsection 2 is still a concern. Mr. Busselman wanted to make clear for the record the Farm Bureau has always had a very good working relationship with Director McKinney-James in that she is very cooperative and works well with the boards and commissions. However, there is no guarantee she will always be the Director of the Department of Business and Industry and a different Director may take whatever authority is provided by statute to create a bigger problem. Chairman Marvel asked if Mr. Busselman had worked with Ms. McKinney-James for any suggested language changes that would allay his concerns. Mr. Busselman replied his initial suggestion was to delete subsection 2; however, Ms. McKinney- James did not agree so they contemplated language changes and progress has been made. Mr. Busselman reiterated the Farm Bureau has had an outstanding cooperation from the Director's office in an attempt to resolve concerns of the Farm Bureau. Chairman Marvel concluded if language could be developed pertaining to subsection 2, the committee would be interested in reviewing the same. Mr. Fettic asked what the language in subsection 2, ". . . may be considered a member of the staff. . . ." exactly inferred. Ms. McKinney-James indicated the provision so referred was placed in the bill to insure on-going continuity of every division within the Department of Business and Industry. She reminded the language contained in subsection 2 was existing law and the amendments thereto are simply clarifying in nature. Stephanie Licht, Executive Secretary, Sheep Commission, stated her reading of the bill reflects the Director of Business and Industry needs the authority to maintain the process and the Sheep Commission would therefore be protected by statute. She stated working with Ms. McKinney-James has shown she takes the time for the small boards and commissions to regulate agencies to insure codes and safety plans are met. She has also integrated the small agencies into equal opportunity and other areas the small agencies needed to be in compliance with but were unaware of. Ms. Licht concluded the Sheep Commission appreciates all the time and effort Ms. McKinney-James has put into the agencies she directs, and therefore supports A.B. 581. Nancyann Leeder, Nevada Attorney for Injured Workers (NAIW), stated even though the technical amendments proposed by Ms. McKinney-James substantially improve A.B. 581, because the bill involves statutes which would require litigation if there were disagreements, NAIW believes the amendments still render the bill insufficient. Ms. Leeder indicated she has the same concerns brought forth by Robert Barengo in earlier testimony. That is to say, A.B. 581 would allow the Director, whoever the individual appointed is at the time, to exercise authority over decisions. Although there is the caveat, there may be overriding rules or statutes which would create a dispute. Chairman Marvel referred to Section 1 which he alluded to earlier regarding preemptions. Ms. Leeder replied NAIW are litigation attorneys bound by the Code of Professional Responsibility and the Supreme Court Rules. That means NAIW cannot accept cases that cannot be adequately handled. Therefore, staffing, support, and personnel become integral to the handling of client cases so administration and management is vital to the way cases are handled. Ms. Leeder informed there is nothing in the requirements for a director or delegate of a director to be a Nevada licensed attorney. Chairman Marvel asked if Ms. Leeder has discussed her concerns with Ms. McKinney-James. Ms. Leeder indicated yes she has. Chairman Marvel acknowledged A.B. 581 is a very comprehensive bill and if it is going to be processed it needs to be done correctly so problems are not created for agencies during the interim. Ms. McKinney-James drew attention to page four of the technical amendments (Exhibit C) hereto, and indicated Chairman Marvel referenced subsection 1, which is new language, however, she would like to draw attention to subsection 2 therein which was intended to address the concerns raised by Ms. Leeder. She indicated the language utilized in subsection 2 was drafted with the assistance of the chief deputy of the AG office. Ms. McKinney- James acknowledged when two or more lawyers are in a room there will be a differing opinion. Ms. McKinney-James explained her sole purpose in this legislation is to provide administrative continuity for the Department of Business and Industry and is not trying to delve into policy decisions for individual divisions under the department. Chairman Marvel asked Ms. Leeder if NAIW could function outside the Department of Business and Industry independently. Ms. Leeder declared NAIW could certainly function outside the Department of Business and Industry as they did in the past. She indicated NAIW is most comparable to the public defender's office in that both entities have an attorney/client relationship with an individual against the state and various departments within the state. Although the public defender's offices are somewhat of a "tag-a-long" with the Department of Human Resources, it is outside that loop. Basically, Ms. Leeder asserted, NAIW has been handled in a similar fashion for the past couple years since reorganization took place. Whereas, prior to that time, NAIW was a stand-alone agency. Mr. Price asked if NAIW has stood alone for the past two years. Ms. Leeder clarified that was incorrect as they have been a part of the Department of Business and Industry being handled semi-autonomous within that Department. She added the statutes were amended during the reorganization which placed NAIW under the Department of Business and Industry; however, NAIW was not included in the "list" set forth in A.B. 581 which defines the duties of the Director of the Department of Business and Industry. Mr. Price declared it was his understanding NAIW was in the same position as the public defender's office because any entity acting as a defense attorney should be as independent as possible. Ms. Leeder agreed, stressing the conflict directly applicable under the language of A.B. 581. Chairman Marvel noted the committee had many bills to consider at this hearing and testimony needed to be concluded on this bill. Ms. McKinney-James concluded in terms of checks and balances, the NAIW has a significant volume of activity and because an injured worker is already upset before they see their attorney, the Director's office handles a substantial amount of complaints related to case management. She clarified the handling of these complaints is an administrative function which then allows her to go to Ms. Leeder and bring forth the issue so presented. Ms. Leeder concluded she provided a proposal to the Director of the Business and Industry which would exempt NAIW from the provisions of NRS 232.520. Chairman Marvel asked Ms. Leeder to supply her suggested language to staff. The proposed amendment is attached hereto as (Exhibit E). Margi Grein, Nevada State Contractor's Board, brought forth proposed amendments addressing the concerns of the State Contractor's Board as shown in (Exhibit F) attached hereto. The proposed amendments of Ms. Grein involve the self-funded licensing boards under Title 54 of the Nevada Revised Statutes, particularly involving Sections 2, 3, 4, 7, and 8 of A.B. 581. Ms. Grein also indicated she has spoken with Ms. McKinney-James in this regard and was assured the intent of A.B. 581 would not affect the State Contractor's Board. SENATE BILL 36 - Requires development of program to track prescriptions for certain controlled substances filled by pharmacies. Keith McDonald, State Board of Pharmacy, introduced Frank Adams, Chief of Investigations, Department of Motor Vehicles and briefly stated S.B. 36 had a fiscal note attached. The Board of Pharmacy, upon receiving the fiscal note request, included amounts of money applicable. However, Mr. McDonald clarified funding for the bill will not be in the general fund but will be derived from revenue reserves the Board of Pharmacy has acquired through planning for the bill during the past several years. Vice-Chair Tiffany asked exactly how S.B. 36 would be funded. Mr. McDonald explained the Board of Pharmacy is an independent licensing agency and has its own funds. The Board of Pharmacy operates within those funds and reports to the budget division. Mr. McDonald went on to state the bill would be funded pursuant to fees and assessments collected from persons prescribing drugs and filling prescriptions. In addition, a potential for a grant from the Board of Medical Examiners exists as well. Further, Mr. McDonald clarified the majority of funding will be derived from the controlled substance registration of persons who dispense, administer, and possess controlled substance drugs. Vice-Chair Tiffany asked how much the registration costs were. Mr. McDonald responded the individuals pay $25 per year. Vice-Chair Tiffany asked for information regarding the amount currently held in reserve. Mr. McDonald replied the reserve fund is at approximately $232,000. Upon Vice-Chair Tiffany's inquiry, Mr. McDonald answered the approximate cost of S.B. 36 was listed at $380,000. Vice-Chair Tiffany commented in Section 3, subsection 2, the Board of Pharmacy may charge an additional fee for dispensing substances to cover the development and maintenance of a computerized program. Mr. McDonald explained that section of the bill addresses the registration fee but it is not the board's intent at this time to raise that fee. Further, the computerized program so referenced would involve a data collection system from pharmacies downloading monthly information regarding controlled substance prescriptions. A second portion of the computerized program would involve a software program to analyze the data supplied in order to advise practitioners of misutilization in order to divert persons from the criminal justice system and allow the practitioners to treat the patients regarding the abuse or misuse of controlled substances. In the instance of a criminal violation, the Board of Pharmacy would be provided the ability to identify and report the same to the Division of Investigations of the Department of Motor Vehicles. Vice-Chair Tiffany asked how the process Mr. McDonald explained was occurring now. Mr. McDonald responded presently the system is handled manually in that a practitioner may call the Board of Pharmacy with a concern. Thereafter, the Board of Pharmacy writes to every pharmacy in the community requesting a drug utilization profile. Once received, the Board of Pharmacy reviews the data and advises the practitioners of the drug profile of the person. Mr. Close asked if the process described by Mr. McDonald would be an on-going process. Mr. McDonald indicated it would; however, if the program is effective, eventually the process would diminish. Mr. Close asked if the reserves are entirely utilized for funding S.B. 36, where will funds be derived for the program in the next biennium. Mr. McDonald replied the major cost of setting up the program would come from the reserve account of the Board of Pharmacy. However, on-going incomes and revenues are received from registration fees which would go back into the reserve account. After setting up the program, the costs would be in simply maintaining the program which includes the cost of two employees. Vice-Chair Tiffany asked if S.B. 36 was enabling legislation to allow the Board of Pharmacy to implement computer programs for tracking substance abuse through the pharmacies. Mr. McDonald stated that was correct. Vice-Chair Tiffany asked for more specifics on the cost of the computer programing. Frank Adams, Division of Investigation, interjected the Division has reviewed programs from three different states--Hawaii and Oklahoma utilize the OSTAR program which is a batch processing system while Massachusetts utilizes a stand-alone PC system which downloads and analyzes the data in one large system. Most likely, Mr. Adams indicated, the Division of Investigation will provide an RFP to prospective bidders. Vice-Chair Tiffany asked if the records retrieved from the computerized systems would be treated as confidential and Mr. Adams confirmed that was so. Vice-Chair Tiffany asked once a patient is identified as having a problem, is there statutory authority to prosecute the patient. Mr. Adams replied the Board of Pharmacy has the authority to prosecute on a regulatory issue if the violation is against a professional. The Division of Investigation has the criminal authority to prosecute. Mr. Adams asserted the Division of Investigation is attempting to identify those persons abusing the system and take care of them "outside" the criminal justice system. However, blatant violators, of course, would be handled criminally. Further, Mr. Adams indicated an executive board is anticipated consisting of the Division of Investigations and the Board of Pharmacy for direction in handling the various cases with the intent of diverting most cases outside the criminal justice system as much as possible. Mr. Adams concluded S.B. 36 simply allows the Division of Investigations to implement the information via computer; however, the statutes regulating the authority is already in place. ASSEMBLYMAN MARVEL MOVED DO PASS S.B. 36. ASSEMBLYMAN FETTIC SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN ARBERRY AND PRICE WERE NOT PRESENT FOR THE VOTE. ASSEMBLYWOMEN GIUNCHIGLIANI AND EVANS WERE NOT PRESENT FOR THE VOTE. * * * * * SENATE BILL 219 - Makes appropriation to investigation division of department of motor vehicles and public safety for replacement of vehicles. John Comston, Fiscal Supervisor, Nevada Division of Investigation, testified S.B. 219 is a one-shot appropriation for the replacement of division vehicles. He informed the last replacement of vehicles was in FY89 with an additional appropriation the next fiscal year as a result of budget shortfalls. However, the Division of Investigation has not purchased any new vehicles in the past six years. Mr. Comston indicated the only vehicles the Division of Investigation has received were those obtained through seizures and forfeitures. Mr. Comston provided a list of the vehicles currently held with the Division of Investigation, attached hereto as (Exhibit G), along with the anticipated mileage of said vehicles by July, 1997. Mr. Comston added the list provided includes a recommendation of 45 vehicles that would be replaced indicating the vehicles are most often used for undercover narcotics operations on a statewide basis. SENATE BILL 524 - Revises provisions governing funding of certain duties of bureau of mines and geology. Chairman Marvel indicated the hearing would remain open on S.B. 524 while staff has an opportunity to review information thereto. SENATE BILL 525 - Requires certain fees collected by state land registrar to be paid into state treasury for credit to state general fund. Pam Wilcox, Administrator, Divison of State Lands, testified the Division of State Lands has been recommended to be financed completely from the state general fund and S.B. 525 provides the mechanism to complete that task. S.B. 525 eliminates the special fund for the Division of State Lands and returns the Division to a general fund agency. Mr. Close asked if any of the fees included in S.B. 525 were increased. Ms. Wilcox replied the fees listed in S.B. 525 are copy fees which have been in the statutes for many years. However, the major portion of revenue received by the Division of State Lands is realized from other sources, such as permit fees and easements. ASSEMBLYMAN FETTIC MOVED DO PASS S.B. 525. ASSEMBLYMAN CLOSE SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN ARBERRY, PRICE, AND SPITLER WERE NOT PRESENT FOR THE VOTE. ASSEMBLYWOMEN GIUNCHIGLIANI AND EVANS WERE NOT PRESENT FOR THE VOTE. * * * * * Chairman Marvel announced the committee would return to S.B. 524. Jeanne Botts, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), declared S.B. 524 was recommended by the joint subcommittee of Ways and Means and Senate Finance after review of the budget of the Department of Conservation and Natural Resources. At that time, the joint subcommittee noticed the mining cooperative fund, administered by the Nevada Bureau of Mines and Geology at UNR, was governed by a statute that required Nevada's match for USGS funds shall be provided by direct legislative appropriation from the general fund. However, Ms. Botts indicated, pursuant to another statute, the states match comes from money transferred from the Division of Environmental Protection of mining reclamation fees. Therefore, Ms. Botts asserted, S.B. 524 would clarify the language between the statutes to provide that the states match of funds comes from mining reclamation fees which is the current practice. ASSEMBLYMAN HETTRICK MOVED DO PASS S.B. 524. ASSEMBLYMAN ALLARD SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN ARBERRY AND PRICE WERE NOT PRESENT FOR THE VOTE. ASSEMBLYWOMEN GIUNCHIGLIANI AND EVANS WERE NOT PRESENT FOR THE VOTE. * * * * * SENATE BILL 527 - Transfers responsibility for administration of program to subsidize transportation by taxicab of elderly and permanently handicapped to aging services division of department of human resources. Mary Liveratti, Deputy Administrator, Division of Aging Services, testified S.B. 527 is the enabling legislation to implement the recommendations of the budget closing. In addition, she informed S.B. 527 allows the transfer of the senior ride program from the Department of Business and Industry to the Division of Aging Services. Ms. Liveratti indicated the committee has already heard testimony on the bill and she was available to answer questions of the committee, if any. Ms. McKinney-James, Director, Department of Business and Industry, stated she would like to request any funds not utilized by the Division of Aging Services in any fiscal year be reverted to the taxicab authority rather than to the general fund. This request is important since the funds are generated from the taxicab industry. Mark Stevens, Fiscal Analyst, pointed out pursuant to subsection 5 of Section 1, it is specifically denoted that excess funds will revert to the general fund. ASSEMBLYMAN ALLARD MOVED DO PASS S.B. 527. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN ARBERRY, PRICE, AND SPITLER WERE NOT PRESENT FOR THE VOTE. ASSEMBLYWOMEN GIUNCHIGLIANI, EVANS, AND TIFFANY WERE NOT PRESENT FOR THE VOTE. * * * * * SENATE BILL 528 - Requires director of state department of conservation and natural resources to employ state climatologist. Pam Wilcox, Administrator, Division of State Lands, stated Pete Morros, Director of Department of Conservation and Natural Resources, wished to extend his apologies to the committee that he was unable to be present for the hearing on S.B. 528; however, she has been briefed on the bill and can provide information on the bill and answer questions the committee may have. Ms. Wilcox stated S.B. 528 makes no substantive change because the state climatologist would still be selected through the same process except the final choice would be made by the Director of the Department of Natural Resources. Ms. Wilcox stated the reason for S.B. 528 is because presently the Department of Conservation and Natural Resources pays 25% of the salary and expenses of the state climatologist. This creates a complicated accounting procedure. Ms. Wilcox indicated S.B. 528 would enable the Department of Conservation and Natural Resources to enter into a contractual arrangement with the University allowing the Department to pay the expenses at the beginning of the year and no billing would have to take place. Chairman Marvel asked if the arrangement described by Ms. Wilcox would be similar to the arrangement with the state demographer. She indicated that was correct. ASSEMBLYMAN HETTRICK MOVED DO PASS S.B. 528. ASSEMBLYMAN CLOSE SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN ARBERRY, PRICE , SPITLER AND ALLARD WERE NOT PRESENT FOR THE VOTE. ASSEMBLYWOMAN GIUNCHIGLIANI WAS NOT PRESENT FOR THE VOTE. * * * * * ASSEMBLY BILL 606 - Revises provisions governing criminal and civil liability for crimes motivated by certain characteristics of victim. Assemblywoman Evans testified A.B. 606 was a "hate crimes" bill whereby there was a dual referral of the bill because information was not available on the fiscal note. However, the fiscal note is modest and has to do with the Criminal History Repository due to a section in the bill requiring the repository to collect data. Mrs. Evans indicated some of these procedures are already underway with the Criminal History Repository and A.B. 606 will simply modify the current procedure. Mrs. Evans explained A.B. 606 provides an option for judges when a crime has been committed against a particular individual defined in Section 1 of the bill, a judge "may" add up to 25% additional time to the sentence. Mrs. Evans explained this authority is discretionary by the judge, not mandatory. Mrs. Evans asserted judges and law enforcement support the bill. Mr. Hettrick stated he did not have any problem with the bill; however, after hearing testimony on Senate Bill 416 recently, he inquired how the 25% of additional time the judge "may" order would apply to the minimum and maximum sentencing structure. Mrs. Evans replied since the application of additional time is discretionary, how the time is applied would also be at the discretion of the judge. Honorable Nancy Becker, Eighth Judicial District Court Judge, present in the audience, explained her reading of A.B. 606 is the additional sentencing time would be 25% of the maximum allowed by the statute on the offense. Mr. Hettrick clarified he was interested the 25% additional time not affecting the minimum sentence. Ms. Tiffany asked how the data for Mrs. Evans' bill was derived and why the bill was important. Mrs. Evans replied A.B. 606 was a part of the Hate Crimes Act passed in the United States Congress in 1991. As a requirement of that Act, Congress requested jurisdictions begin collecting data on this issue. Ms. Tiffany stated the state, she believes, has computer capability of collecting and compiling data but statistical data is usually analyzed manually. She inquired if computer software was available for statistical analysis. Mrs. Evans indicated Mr. DeBaco, Criminal History Repository staff testified in support of the bill in the Assembly Judiciary Committee and he did not indicate any concerns regarding the analysis of data. Mrs. Evans stressed, in any event, the numbers involved in hate crimes are relatively small at this point. Mrs. Chowning stated Section 6 of the bill provides "the director shall establish within the Criminal Central Repository a program for . . ." and inquired if that provision would require hiring more staff or extra work. Mrs. Evans stated the numbers involved were far less than in the hundreds or even the thousands. She also pointed out the second and third page of the fiscal note to A.B. 606 indicates the only expenditure required is to provide hate crime training to local criminal justice agencies. ASSEMBLYMAN HETTRICK MOVED DO PASS A.B. 606. ASSEMBLYMAN CHOWNING SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN SPITLER WAS NOT PRESENT FOR THE VOTE. * * * * * ASSEMBLY BILL 524 - Makes various changes to provisions governing family foster care for children. Chairman Marvel announced the committee heard testimony from Assemblyman Carpenter, sponsor of the bill, indicating the fiscal note would be deleted from the bill, in particular Section 13, subsection 3 would be deleted. ASSEMBLYMAN ALLARD MOVED AMEND & DO PASS A.B. 524 BY DELETING SECTION 13, SUBSECTION 3 THERETO. ASSEMBLYMAN CHOWNING SECONDED THE MOTION. Mark Stevens, Fiscal Analyst, clarified the amendment included the removal of subsection 3 from Section 13, which the bill drafters may decide would require the entire removal of Section 13. Ms. Giunchigliani said her notes reflect Section 11 was to be deleted from the bill as well. Mr. Stevens stated regarding Section 11, there was a question whether subsection (b) would create a fiscal impact on the Division of Child and Family Services. However, Mr. Sarb indicated no fiscal impact would occur. Ms. Giunchigliani suggested deleting Section 11(b). Mr. Allard agreed to include the deletion of Section 11(b) to his motion. The seconder, Mrs. Chowning concurred. Chairman Marvel brought the motion back to the floor. THE MOTION CARRIED. ASSEMBLYMAN SPITLER WAS NOT PRESENT FOR THE VOTE. * * * * * ASSEMBLY BILL 580 - Requires certification of laboratories to analyze water. Chairman Marvel directed the committee to A.B. 580 and stated he would entertain a motion. ASSEMBLYMAN DINI MOVED DO PASS A.B. 580. ASSEMBLYMAN ALLARD SECONDED THE MOTION. Ms. Tiffany reminded A.B. 580 adds four position to the Health Division even though there was no testimony indicating additional staff was necessary. For that reason, she will be voting against the bill as an additional four persons is not justified in her opinion. Mr. Dini stated the bill allows the state laboratory to certify the private sector and requires additional help to perform the job correctly. Ms. Giunchigliani stated she too had concerns about staff initially. However, she recalled testimony indicating the hiring of additional personnel would only occur based on volume which may not require the hiring of four persons right from the start. Since her concerns have been alleviated, she supports the bill. Chairman Marvel brought the motion back to the floor. THE MOTION CARRIED. ASSEMBLYWOMAN TIFFANY VOTED NO. ASSEMBLYMAN SPITLER WAS NOT PRESENT FOR THE VOTE. * * * * * ASSEMBLY BILL 310 - Makes appropriation to aging services division of department of human resources for production, publication and distribution of directory of transportation services for aged and disabled persons. Mark Stevens, Fiscal Analyst, indicated the committee considered A.B. 310 previously and the bill was held for a revised fiscal impact. Ms. Giunchigliani stated the amendments discussed earlier in committee pertain to Section 1, line 2, the word "directory" would be deleted and the word "pamphlet" would be inserted and the word "all" would also be deleted. Going to line 4, in Section 1, she continued the word "must" would be changed to "may" and the word "directory" would be replaced with "pamphlet" throughout the entire bill. Also, on line 12 of Section 1(l) would be deleted and additional language would be included therein. Continuing to page 2, line 1 (m) would be deleted. Lastly, the effective date was amended to October 1, 1995. Mr. Stevens stated the matter has been discussed with the Division of Aging Services and a lower amount for the fiscal note--$6,800 has been computed. ASSEMBLYMAN ARBERRY MOVED AMEND & DO PASS A.B. 310. ASSEMBLYMAN BROWER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 364 - Increases amount of administrative assessments for misdemeanors to cover cost of providing court facilities. Chairman Marvel declared A.B. 364 was discussed at length in a previous hearing; however, since Judge Nancy Becker was present today, he asked her to come forward. Honorable Nancy Becker, Eighth Judicial District Court, indicated she spoke with committee members who expressed concerns to A.B. 364 after the initial hearing on the bill. She explained Mr. Allard suggested an amendment and she concurs. The proposed amendment is attached as (Exhibit H) which adds language at page 1, line 4 and corrects the statutory reference due to a typographical error. Judge Becker went on to explain Mr. Allard's concern was that the outlying justices of the peace in Clark County would have their own right to decide if the $10 would apply in their particular townships. This has been addressed since it was not the intent of the bill to have money generated from outlying townships be required to participate with the downtown justice center concept or the Las Vegas Municipal Court. ASSEMBLYWOMAN GIUNCHIGLIANI MOVED AMEND & DO PASS A.B. 364. ASSEMBLYMAN ALLARD SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATE BILL 135 - Makes appropriation to legislative fund for additional equipment and software for information systems for legislative counsel bureau. SENATE BILL 136 - Makes appropriation to legislative fund for computer equipment and software to allow interaction with legislature through INTERNET. Chairman Marvel recognized Ms. Tiffany to comment on the bill for the record. Ms. Tiffany suggested a proposed amendment to S.B. 135 specifically pertaining to the wireless computer systems. She reiterated her concerns were that the Legislature was moving too swiftly on implementing laptop computers after just a brief demonstration of the equipment. Ms. Tiffany stated her amendment would delete Item No. 10 (the PC multi-media upgrades) and Item No. 11 (KIOSK information). With regard to the wireless computer systems, she stated funds should be appropriated to an interim committee to allow a couple legislators plus Fred Dugger, from LCB to visit sites where these systems are currently installed to investigate policies, problems, implementation, total costs of the system, training, and hardware vendors in order to implement these systems correctly. Ms. Tiffany asserted LCB should be held to the same standards other agencies are held to when dealing with large computer acquisitions. Ms. Tiffany stated she would move to amend & do pass as indicated by her statements. Mr. Arberry stated S.B. 135 should proceed as is because the Legislature needs to move into the modern age and further study of this area is unnecessary. Mr. Dini stated he opposed Ms. Tiffany's suggested amendments. Further, he indicated LCB is comprised of competent staff and the committee should pass both S.B. 135 and S.B. 136 and allow LCB to proceed with an RFP in order to take care of the Legislature for once. Mr. Price acknowledged Ms. Tiffany's expertise in the computer field yet agreed with Mr. Dini in that the Legislature should be the leading edge and he trusts the knowledge of the staff at LCB in making these decisions. ASSEMBLYMAN DINI MOVED DO PASS S.B. 135. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN SPITLER AND TIFFANY VOTED NO. * * * * * Chairman Marvel moved the committees' attention to S.B. 136 and asked for comments thereto. No comments forthcoming, Chairman Marvel entertained a motion. ASSEMBLYMAN DINI MOVED DO PASS S.B. 136. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYWOMEN TIFFANY, BROWER, AND GIUNCHIGLIANI VOTED NO. ASSEMBLYMAN SPITLER VOTED NO. There being no further business before the committee, the meeting adjourned at 10:35 a.m. RESPECTFULLY SUBMITTED: Joi Davis, Committee Secretary Assembly Committee on Ways and Means June 20, 1995 Page