MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session June 29, 1995 The meeting of the Committee on Ways and Means was called to order at 8:33 a.m., on Thursday, June 29, 1995, Chairman Morse Arberry presiding in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. ASSEMBLY 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 COMMITTEE MEMBERS ABSENT: None GUEST LEGISLATORS PRESENT: None STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst OTHERS PRESENT: See attendance roster ASSEMBLY BILL 741 - Makes various appropriations from state general fund. Mr. Mike Alastuey, Assistant Superintendent of Business and Finance Services, Clark County School District (CCSD), introduced Ms. Carolyne Edwards, a Clark County elementary school principal. Mr. Alastuey explained the Clark County School District, through cooperative arrangements with other governments in the Las Vegas valley and beyond, are participating in the offering of approximately 112 after school programs. The current programs are staffed by persons from the community and, on occasion, CCSD staff who, at the time they serve, act as city, county and other authority employees (depending on whatever safety programming they are working in). What is missing is the connection to the curriculum of the school district and extension of the actual work day of school district employees on behalf of the same students they serve at the same school sites. The district proposes, to the extent that funds are available, up to 35 schools in the CCSD be designated to participate in a pilot program where the district would extend its instructional day into the hours covered by the safety program. The configuration for staffing the CCSD contemplates includes a certified teacher (contract $20 an hour rate) plus two instructional aides and some additional funds for a small nutritional snack. The essence of the program is to complement the resources that the governments in Clark County have already put together. Mr. Alastuey conveyed the district's intention to report on the progress of the program at the next session of the Legislature. Ms. Edwards indicated she was the legislative representative from the CCSD and also was the principal of an at-risk school. She testified her school had been broken into five times within the last five days at midnight by gang members and felt there was an urgent need for an after school program. Ms. Giunchigliani raised the subject of the Safe Key program. Ms. Edwards said parents pay approximately $26 per child for five days a week supervision lasting from 3 to 6 p.m. The cost is based on family income and is reduced if there is more than one child in the family. Mr. Alastuey noted the program detailed in the bill does not contemplate parent contribution. The program would involve school district personnel paid as school district personnel directed towards instructional goals. CCSD did not think it appropriate to charge tuition on top of a supervision fee that the county or city might charge. Ms. Giunchigliani did not want to see a duplication of other services offered. She asked whether the program was more curriculum based. Mr. Alastuey replied the principal would be in a position to control assignments which would be tied to the regular instructional day at the school site. Mr. Allard asked whether the 35 schools would be at-risk schools. Mr. Alastuey replied the proposal prescribed the distribution of resources be primarily at-risk. The school district contemplated two-thirds being at risk and one-third being available to other schools. Mr. Close asked whether the program would complement the Safe Key program. Mr. Alastuey answered affirmatively. Mrs. Chowning asked whether some of the money would be applied to students who are struggling with English. Ms. Edwards said her school had a large bilingual population and planned to involve students in the program. Mrs. Chowning asked how the schools would be chosen. Mr. Alastuey said the focused schools would be at-risk and would touch schools within every district of every Clark County legislator. ASSEMBLY BILL 331 - Makes various changes relating to investigation of insurance fraud. Ms. Alice Molasky, Commissioner on Insurance, testified the Office of the Attorney General and Division of Insurance (DOI) worked together on the amendments to A.B. 331. She indicated, over the next two years, the commission would like to work with the Attorney General's office as well as the industry to establish a program that meets the needs of the purpose for the AG's fraud unit as well as the program established by the Division of Insurance. As the bill is written, the division maintains the responsibility for assessing the insurance companies, however, the Insurance Fraud budget was effectively transferred from the DOI budget to the Attorney General Office's budget. The assessment will be imposed and funds transferred to the AG's account. During the next two years the commission is willing to absorb the responsibilities for collecting the assessment and in some cases (around 60 to 70 cases per year) enforcing the assessment. The commission, however, will have no real authority over the account which will be maintained by the Attorney General's Office. Mr. Spitler commended the program saying he believed this laid the foundation for the implementation of comprehensive fraud laws for Nevada. Mr. Bill Bradley, representing the Nevada Trial Lawyers, testified their organization supported strengthening insurance fraud laws and urged passage of the bill. He stated the bill needed a little language cleanup to better define what insurance fraud actually constitutes. He noted he was not trying to weaken state statues on insurance fraud in any manner. Mr. Arberry suggested the bill be amended in the Senate due to the committee's time restraints. Mr. Spitler stated he would not mind changing the language to be more consistent. MR. FETTIC MOVED DO PASS ON A.B. 331. MR. MARVEL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. COMMITTEE MEMBERS TIFFANY, HETTRICK, GIUNCHIGLIANI AND ALLARD WERE NOT PRESENT FOR THE VOTE. ASSEMBLY BILL 649 - Provides for certification of inspectors of real estate. Ms. Joan Buchanan, Administrator of the Real Estate Division, testified on behalf of A.B. 649. She explained the home inspector profession is gaining popularity within the state and it is time to set certain standards of quality and control with respect to inspector's qualifications. She said funds would cover the employment of a half-time position (preferably with an engineering background), setting up regulation hearings and printing certificates. She felt the $23,100 request would be offset by fees with an approximate deficit of $4,600. Mr. Arberry asked whether the bill needed an amendment to provide the necessary funding. Ms. Buchanan said an appropriation was needed as well as an effective date. She indicated it would be impossible for the Real Estate Division to be ready by October 1 due to the time needed for writing regulations and preparation of testing materials. She recommended January 1 as being a more appropriate date. Mr. Stevens asked whether the bill needed an amendment to provide any additional funds. Ms. Buchanan said she estimated $5,500 would be collected within the first fiscal year. Mr. Arberry requested Ms. Buchanan to deliver specific calculations before she left that day. Mrs. Chowning asked whether the division would be hiring examiners who would be able to determine whether inspectors were qualified to detect radon, chemicals or unstable foundations. Ms. Buchanan said the bill was more focused on home inspectors and structural defects and did not deal with environmental problems. She felt the division would expand itself to address environmental concerns in coming years. Mr. Fettic spoke in favor of the bill. Speaking from his past experience in real estate, he testified home inspectors' qualifications vary widely and it would be in the best interest of consumers to have the profession regulated. Assemblyman Bernie Anderson spoke in support of the bill. He said the meritorious legislation has taken 6 years to develop. Ms. Margi Grein of the State Contractor's Board testified she had assisted in writing some of the bill's amendments. She noted in section 24, where the fee is set to a specific amount, the bill should be amended to give the division the authority to develop their fee schedule and regulations in order to offset expenses by the number of inspectors licensed. Ms. Grein did not feel a $100 fee would cover the application processing costs. Mr. Stevens concluded the committee needed to decide whether to raise the fee or add General Fund money. Mr. Arberry requested a copy of the fiscal notes and declared the hearing closed. ASSEMBLY BILL 735 - Increases compensation of certain employees of senate and assembly. Mr. Stevens explained the bill increases compensation of employees hired by each house during the legislative session. MR. MARVEL MOVED DO PASS ON A.B. 735. MR. HETTRICK SECONDED THE MOTION. Ms. Giunchigliani requested the percentage increase. Mr. Stevens replied the increase was close to 7 percent. THE MOTION CARRIED UNANIMOUSLY. MRS. EVANS AND MR. ALLARD WERE NOT PRESENT FOR THE VOTE. ASSEMBLY BILL 736 - Establishes maximum allowed salaries for employees in unclassified service of state. Mr. Stevens explained the unclassified pay bill sets the maximum salary of unclassified employees in state service. Ms. Giunchigliani asked for the percentage increases. Mr. Stevens said the percentage increases listed on pages 1 through 9 were generally 4 percent. In section 3, the salaries were increased by an additional 1 percent effective July 1995. He noted a number of positions were increased over and above the standard increase provided state employees. Mr. Stevens reported the Governor's Chief of Staff's salary was increased from $60,715 to $75,000. Other positions increased over and above the standard were at the Las Vegas and Carson City Museums, 8 percent; positions within the Attorney for Injured Workers and Public Defender Office were increased by 8 percent; Economic Development Director; 2 positions within the Department of Industrial Relations, a 12 percent raise; Private Investigator's Licensing Board physician, a 12 percent raise; Minerals position in the Department of Business and Industry (Las Vegas), a 12 percent raise; Colorado River Commission Administrator, $70,000 to $90,000; Welfare Administrator; two deputies at the Department of Motor Vehicles; Lt. Governor's office; Medical Director for the Department of Mental Health and Mental Retardation; and Chief Deputy Controller. Mr. Dini suggested the Governor's Chief of Staff salary should be amended and increased to $80,950 which was the amount the Governor had recommended and more in line with department head salaries. Ms. Tiffany showed concern over the Science Advisor's $85,000 salary and asked why he was allowed the privilege of being a consultant. She felt it sent the wrong message to cabinet level personnel who have more responsibility and are not prevented from having outside jobs. She also felt the General Counsel position for the Commission on Judicial Discipline drawing a salary of $90,000 was also out of line. Mr. Marvel remembered the Legal Counsel for Judicial Discipline salary had been $106,000 and was originally authorized by the Interim Finance Committee. Ms. Tiffany asked why there was a two tiered salary system on the cabinet level positions. Mr. Stevens said the system was developed when the departments were reorganized during the previous session. Ms. Tiffany said salaries did not correspond with staff and budget sizes, education and responsibilities and would like to see cabinet level positions equalized. Mr. Spitler noticed salaries were lower than he had anticipated in the Secretary of State's Office and asked what the Chief Deputy's salary had been. He felt the Deputy Secretary of State for Election's salary was particularly low as 3 major election bills had been passed and would be that position's responsibility. Mr. Stevens said there was a mix in the Secretary of State's Office; a couple of positions were provided an over and above raise and the other positions were given the standard increase. Mr. Spitler commented he still felt the support staff salaries were inordinately low. Mr. Dean Heller, Secretary of State, stated the Chief Deputy, Elections Deputy and Commercial Recordings Deputy received a 5 percent increase. He felt A.B. 736 did a very good job in making the necessary changes in some of the unclassified salaries. He felt there was an oversight in regard to the Commercial Recordings Deputy who has the responsibility of overseeing the department's largest division composed of 40 staff persons located in both northern and southern Nevada. Mr. Heller testified he was concerned about losing the valuable person presently holding the job due to the low salary. Mr. Heller recounted proposing to Mr. Marvel that $2,500 be withheld from his own salary and that of the Chief Deputy in order to increase the Commercial Recordings Deputy's salary by $5,000. He stated he later learned that reducing a constitutional officer's salary was unconstitutional and thus prohibited his offer. Mr. Heller requested the committee to raise the Commercial Recordings Deputy's salary by $5,000. Mr. Spitler asked whether Mr. Heller felt the Elections Deputy's salary of $39,000 was adequate. Mr. Heller replied the Elections Deputy oversees a staff of 5; the Commercial Recordings Deputy oversees 50 persons. Mr. Spitler saw no reason for reducing the Chief Deputy's salary by $5,000 and felt the Legislature should grant Mr. Heller's request. Mr. Close expressed concern regarding the inconsistencies in agency salary structures. Mr. Stevens said every position included in the bill received at least a 5 percent increase. Mr. Close recommended an interim study by the Elections and Procedures Committee to review salary inconsistencies. Ms. Marilyn Skibinski, Administrative Assistant, Consumer Advocate's Office, reported her office had requested and received a new Assistant Staff Counsel which was awarded a salary of $62,400. She pointed out the office presently pays their existing Assistant Staff Counsel a salary of $57,680 for the exact same work. She also compared her office's salaries to that of the Public Service Commission Staff Counsel which was $64,755. Ms. Skibinski requested the two positions in her office be equalized at the $62,400 salary level. Mr. Spitler remarked since he was an employee of the telephone company whose work was monitored by the telephone company, he would be abstaining from addressing any of the issues contained in the request. Mr. Stevens pointed out there were a number of positions included in the Unclassified Pay Bill that did not match the Governor's Recommendation. Mr. Bob Gagnier, Executive Director, State of Nevada Employee's Association (SNEA) stated the increases ranging from 13-24 percent for unclassified employees were probably well deserved and that salary surveys would show that many of the state government administrators are underpaid. Mr. Gagnier questioned, the fairness of state employees receiving an increase of 5 percent in comparison to the 13-24 percent raises awarded unclassified employees. He noted SNEA surveys indicated state employees average 13-1/2 percent less than their counterparts in public and private employment in Nevada. CAPITAL IMPROVEMENTS SUBCOMMITTEE REPORT Mr. Arberry presented the Subcommittee on Capital Improvements recommendations (Exhibit C) and distributed a spreadsheet denoting the CIP Program Fund Allocation (Exhibit D). Mr. Arberry pointed out approximately $3.7 million is recommended for "re-programming" from existing CIP's to those recommended by the subcommittee. The amount of funding recommended for re- programming has no impact on the projects from which the funding is being re-programmed. The Executive Budget's recommended CIP recommended by the Assembly Committee on Ways and Means Subcommittee on Capital Improvements totals $227.1 million including projects previously approved via separate legislation and the use of re-programmed funds as previously referenced. The CIP program recommended by the subcommittee is allocated as follows: General Fund - Approximately $7.9 million more than recommended by the Governor; $107.1 million; General Obligation Bonds - Approximately $8.6 million more than recommended by the Governor; $86.2 million; Highway Fund - Approximately $27 million less than recommended by the Governor; $9.3 million; and Special Higher Education Capital Construction Funds - $3.6 million more than recommended by the Governor; $3.6 million. Mr. Arberry indicated funding recommended via General Obligation Bonds will continue the $0.15 property tax rate in each year of the 1995-97 biennium. This is predicated upon the issuance of approximately $48 million in bonds in fiscal year 1996 and an additional $38 million in fiscal year 1997. The property tax rate of $0.15 translates into approximately $52.50 per year on a $100,000 home. Mr. Arberry reviewed the highlights of changes as recommended by the subcommittee which included the remodel of the old State Library, Conservation Camp Forestry Shop Expansions, Advance Planning ETR Headquarters, Juvenile Treatment Facility, Addition to Lake's Crossing, projects at Caliente Youth Center, NMHI Advance Planning, Storage Building and Fire Sprinklers for Train Museum, DMV/PS Full Service Facility, Renovation of DMV Headquarters, Lovelock Correctional Center, Phase II, 60-Bed Housing Unit at NWCC, 36-Bed Boot Camp Expansion, Prison Facilities Study, Energy Retrofit Coordination, Physical Security Upgrades, CFC Conversion for Air Conditioners, Seismic Safety Work, UNR Education Building, DRI Northern Science Center, Advance Planning CCSN - Henderson Campus Phase III, Advance Planning/Design - Phase IV West Charleston: CCSN, UCCSN Deferred Maintenance and Renovation/Remodel of Existing Facilities, Completion of Classroom and Student Center, NNCC and UCCSN, Douglas County Branch - UCCSN and WNCC, Advance Planning for Summerlin Branch - CCSN and UCCSN and Feasibility Study for Establishment of a School of Law. Referring to the Feasibility Study for the Establishment of a School of Law, Ms. Giunchigliani felt the state would end up in the same predicament it experienced with the School of Medicine. She believed the state never had the population nor need to support it. Mr. Marvel contradicted Ms. Giunchigliani's opinion stating he felt the School of Medicine was producing some of the finest doctors in the United States and that Nevada had the population to sustain the school. Ms. Giunchigliani asked how the request for the law school originated. Mr. Arberry stated it was proposed several sessions ago by Senator Nick Horn. Ms. Giunchigliani stated she remained unconvinced that the population felt more lawyers were needed within Nevada. Ms. Giunchigliani stated it was her understanding regarding closings from the Joint Committee on CIP's there was no recommendation for expanding the State Legislature Building. Mr. Marvel said the recommendation originated from the Assembly Ways and Means Subcommittee and still had to be approved by the Senate Finance Committee. He noted there was more sentiment for expansion by the Assembly side than the Senate side. Mr. Marvel stated the Senate side of the subcommittee deferred their decision. Ms. Giunchigliani said it was her understanding the expansion issue was held by both sides and no recommendation was made. Ms. Giunchigliani said she could not support the CIP's. She understood the need for reconfiguring the building but to not study the current use of space before expanding was irresponsible and a waste of taxpayer's money. Mr. Dini justified the need for the expansion: lack of storage, accommodations for future legislators as the state grows, lack of office space at the Sedway Building, more room for the computer staff. Mr. Price voiced his opinion in support of the building expansion. Mr. Allard felt there was no room to expand or reconfigure space in the present building to comfortably accommodate the present number of legislators. Mr. Spitler suggested alternatives such as moving accounting to temporary space during the legislative session. He did not think expansion was justified as the overcrowding only occurs every other year for a period of six months. Mrs. Evans believed the expansion was overdue referring to the inefficiency of having staff located in another building across the street. MR. DINI MOVED TO ACCEPT THE SUBCOMMITTEE ON CAPITAL IMPROVEMENT'S REPORT. MR. FETTIC SECONDED THE MOTION. THE MOTION CARRIED. MR. SPITLER AND MS. GIUNCHIGLIANI VOTED NO. MRS. BROWER AND MS. TIFFANY WERE NOT PRESENT FOR THE VOTE. MR. MARVEL MOVED TO COMMITTEE INTRODUCTION OF BDR S- 2159. MR. PRICE SECONDED THE MOTION. THE MOTION CARRIED. MS. GIUNCHIGLIANI VOTED NO. MS. TIFFANY AND MRS. BROWER WERE NOT PRESENT FOR THE VOTE. ASSEMBLY BILL 737 - This summary apportions state distributive school account and revises provisions governing administration of public school money. Ms. Giunchigliani disclosed she was a public school teacher on an unpaid leave of absence, would not benefit from the legislation and would be participating in voting. She asked how the DSA was built. Mr. Stevens replied the DSA was built on a 4 percent increase over and above salaries (the average salaries as of October 1994) and an additional 3 percent increase in the second year of the biennium. The amounts are built into the appropriation and authorization levels included in A.B. 737. MR. MARVEL MOVED DO PASS ON A.B. 737. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MS. TIFFANY AND MR. DINI WERE NOT PRESENT FOR THE VOTE. Mr. Arberry reintroduced the subject of the pilot program for before and after school supervision of pupils in Clark County (Exhibit E). MR. MARVEL MOVED TO APPROVE A BILL DRAFT REQUEST TO INCORPORATE LANGUAGE IN REGARD TO THE PILOT PROGRAM FOR BEFORE AND AFTER SCHOOL SUPERVISION OF PUPILS IN THE CLARK COUNTY SCHOOL DISTRICT. MRS. EVANS SECONDED THE MOTION. Mr. Close said he would like to see a list of the schools recommended for this project. Ms. Giunchigliani wondered if there was an appetite to adding $100,000 to $300,000 for the inclusion of other school districts. Mr. Arberry reminded Ms. Giunchigliani the recommendation was for a pilot one shot program. THE MOTION CARRIED UNANIMOUSLY. MS. TIFFANY AND MR. DINI WERE NOT PRESENT FOR THE VOTE. Mr. Arberry returned to testimony on A.B. 649. Mr. Stevens reported an amendment had been received that would increase the application fee to $500, provide for an examination fee of $250 and an issuance of a new certificate or renewal would be $350. The fees are designed to give the division sufficient funds to make revenues equal expenses. Mrs. Chowning asked whether the state would be incurring liability as a result of issuing licenses. Ms. Giunchigliani said the question was addressed in the Assembly Commerce Committee. Because all state employees fall under state immunity, no liability will be incurred. Ms. Giunchigliani felt the increase was too steep. Mr. Arberry suggested the issue needed more study by the staff and the committee could act upon it during floor session. The committee recessed at 10:55 a.m. until the call of the chair. RESPECTFULLY SUBMITTED: Janine Sprout, Committee Secretary Assembly Committee on Ways and Means June 29, 1995 Page