MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session January 17, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 9:15 a.m., on Tuesday, January 17, 1995, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Deputy Fiscal Analyst Pamela Jochim, Committee Secretary OTHERS PRESENT: Dee Crawford, Senate Attach‚ Marion Entrekin, Senate Attach‚ Cristin Buchanan, Senate Attach‚ Jeanne Botts, Program Analyst Brian Burke, Program Analyst Debbie King, Program Analyst Larry Peri, Program Analyst Ron Steele, Program Analyst Senator Raggio opened the hearing and noted the committee had a vacant seat because of Senator Callister's resignation. He informed the committee that Senate Minority Leader, Senator Titus, would be appointing someone to fill the vacancy. Senator Raggio welcomed the committee members and introduced the committee secretaries and program analysts assigned to the Senate Committee on Finance. Dan Miles, Senior Fiscal Analyst, Fiscal Analyst Division, Legislative Counsel Bureau, distributed a handout (Exhibit C) to the committee indicating the state agency assignments for each fiscal analyst. Senator Raggio pointed out the fiscal division was available to assist any committee member with any concerns or problems they might encounter. Mr. Miles gave a brief overview of where committee reference material would be located and noted the Executive Budget would consist of three volumes this session. In addition, Mr. Miles indicated the Governor's Executive Budget would be delivered Wednesday, January 18, 1995, and placed in the budget books before the January 19, 1995, meeting. The committee reviewed Exhibit D, "Senate Committee on Finance Standing Rules- 1995". Senator Rhoads questioned if subcommittees were required to file a 3-day meeting notice. Senator Raggio explained subcommittees are open meetings and Jan Needham, Principal Deputy, Legal Division, Legislative Counsel Bureau, has informed him there is no 3-day notice requirement. He understood the rules only required adequate notice. Senator Rhoads inquired if notice was the same as an announcement. Senator Raggio explained that a notice must be posted. Senator Raggio asked for a motion on the adoption of the committee rules. SENATOR COFFIN MOVED TO ADOPT THE STANDING RULES OF THE 1995 SESSION. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Jacobsen questioned if the committee had the right to restrict tours to only subcommittee members. Senator Raggio indicated tours are considered open meetings, but if it was a tour where no committee action was anticipated it might be outside the rule. Mr. Miles interjected that the tours have always been posted as if they were a meeting. Senator Raggio pointed out it was impractical in some situations, such as a prison tour, to allow an open meeting. He further noted a tour of the Lovelock Prison would be scheduled early in the session for committee members. Senator Raggio turned the committee's attention to Exhibit E, Development of Committee Recommendations. The senator explained Exhibit E was developed as a result of Senate Concurrent Resolution (SCR) 46 of the Sixty-seventh Session Interim Study. The Interim Study committee made numerous recommendations regarding the procedures to be followed by the money committees during this session. Senate Concurrent Resolution 46 of the Sixty-seventh Session: Directs Legislative Commission to conduct interim study concerning method of establishing Legislative Budget Office. Mr. Miles stated he would be highlighting a number of the interim study committee recommendations and referred the committee to page 22 of the report (Exhibit E. Original is on file in the Research Library.). He clarified that Exhibit E represented only a portion of the report completed by the study committee. One recommendation proposed by the committee involved the establishment of a legislative budget office. A bill draft request (BDR) will be submitted this session on this proposal. Referring to page 23 of Exhibit E, Mr. Miles explained the interim committee also recommended the Budget Division and Fiscal Analysis Division agree on the adjusted base budget for each agency by December 1, 1994. Mr. Miles reported this recommendation has been complied with, and the Fiscal Analysis Division tentatively agrees with the Budget Division's treatment of 77 percent of the base budget. On page 24 of Exhibit E, it was pointed out the interim committee endorsed the adherence of strict time limits for agency budget hearings, streamlining of budget highlights, and resolution of nonbudgetary issues of interest to individual legislators outside the committee process. Senator Coffin questioned if the committee members would still have access to the fiscal staff. Senator Raggio answered in the affirmative, but cautioned the members about using the fiscal staff outside of their area of expertise. Mr. Miles referred the committee to page 25 of Exhibit E, and outlined the recommendations proposed by the interim committee on the utilization of more joint budget subcommittees by the Senate Committee on Finance and Assembly Committee on Ways and Means. Each joint subcommittee would review certain agency budgets and then make recommendations to the full joint committee. A full committee review would only be held for major budgets, while the smaller budgets would be reviewed by the joint subcommittee. Under this recommendation, in March, instead of having regular committee meetings in the morning, the schedule would be revised and joint subcommittee meetings would be held in their place. Page 25 of Exhibit E outlines the proposed number of subcommittees and the agency budgets that would be heard by each subcommittee. Mr. Miles noted page 27 of Exhibit E, requires the submission of BDRs for the implementation of the Executive Budget by the end of the third week of session. John P. Comeaux, Director, Department of Administration, tentatively agreed to this proposal. The interim committee also suggested modifying the floor session schedule in the early part of the session in order to allow money committees to work longer in the mornings. This particular recommendation was made because the volume of bills submitted early in the session is not sufficient to warrant lengthy floor sessions. Mr. Miles indicated the study committee proposed that 11 agencies be targeted for enhancement of their performance indicators (Exhibit E, page 30). The interim committee felt the Senate Committee on Finance and Assembly Committee on Ways and Means should take every opportunity to critique or offer advice on performance indicators in order to help them improve. Referring to page 31 of Exhibit E, Mr. Miles explained another recommendation of the study committee involved drafting of a bill to initiate an interim review process of an agency's base budget. This proposal was made because the Senate Committee on Finance and Assembly Committee on Ways and Means under this plan would be reviewing primarily enhancement and maintenance items and spending less time on the base budgets of each agency. It was felt an interim review process should be initiated to look at the base budget of all the agencies, although, not every budget would be reviewed during each interim. The review process would be established under the Interim Finance Committee as a subcommittee and the Legislature at the end of the session would designate what agencies would be reviewed by the subcommittee. Mr. Miles pointed out Appendix J of Exhibit E proposed several plans in which the subcommittees and joint subcommittees could be organized. He noted the study committee recommended Plan A. Appendix K of Exhibit E provides a timetable and calendar of the budget review process, and Appendix L breaks down what budgets would receive full committee review versus joint subcommittee review. Senator Raggio questioned if the recommendation requiring a hearing of the full committee referred to a joint meeting between the two houses. Mr. Miles answered in the affirmative. Senator Raggio asked if the study considered if a separate full committee of either the Assembly or the Senate would hear any budgets. Mr. Miles responded the joint committee would hear major budgets, but he did not recall the study committee discussing the issue of what the committees would be hearing separately. Senator Raggio further questioned if the individual full committees would hear bills or if the bills would also be assigned to subcommittees. Mr. Miles replied it was his understanding the bills would stay with each individual committee. The recommendations of the study committee only pertain to the Executive Budget. Senator Raggio informed the committee he had discussed the recommendations with the chairmen of the Assembly Committee on Ways and Means and had advised them the Senate Committee on Finance would have a full discussion on the proposals before reaching an agreement. Senator Coffin stated he opposed the use of joint committees. He explained the Senate is outnumbered on the joint committees which tends to limit the number of questions they are able to ask. In addition, the Assembly Committee on Ways and Means contains a number of freshman members, who tend to slow down the process with the type of inquiries they make. Senator Jacobsen pointed out the difficulty in getting subcommittee members together because of their full schedules. He felt more progress could be made when budgets are handled by the whole committee as opposed to a subcommittee. In reviewing Exhibit E, he noted he would prefer the implementation of Plan A over Plan B or B1. Senator Rhoads related that he served on the study committee and the recommended timetable allows for morning subcommittee meetings so there would be no conflict in scheduling. He explained the state of Arizona uses this plan and is able to get through their budget in 60 days. The senator stated he was in favor of implementing the recommendations. Senator O'Donnell inquired as to how the joint subcommittee chairmanships would be determined. Senator Raggio indicated this issue had not been covered by the study and went on to state: [T]here is one thing I did set out as a predicate in this morning's preliminary discussions, if the joint subcommittees were utilized. Their purpose would be as it has been in the past, to bring back recommendations to the respective full committees, and any decision in those subcommittees would have to be based upon each house having an equal vote on the subcommittee. . . . Without that, it is completely out of the question. . . . Senator Rawson contended he would like the committee to go beyond the recommendations of Plan A. He suggested the education budget should be heard by the whole committee because of the large amount of funds required. The senator said the committee should have a good understanding of how this budget is "driven." The decisions made regarding the education budget and human resources budget would determine if there was any money left to run the other programs. Senator O'Donnell mentioned that work being done by the Senate Committee on Transportation will be closely connected to the budget. Some kind of coordination between the chairmen of the respective subcommittees regarding the budget process is necessary, commented Senator O'Donnell. Senator Raggio stated his ambivalence regarding the proposals. He stressed the study committee worked very diligently in coming up with the recommendations. Referring to Plan A, the senator noted staffing six joint subcommittees by the Senate Committee on Finance would be difficult. Each member of the Senate Committee on Finance would have to serve on at least two subcommittees and in some instances three. In some cases, there might be joint subcommittees with no representation by the Democrats. Senator Coffin interjected he hoped the leadership would take this point into consideration when looking at the viability of the recommendations. Senator Raggio responded he will try and be as equitable as possible, but it will be difficult in some cases because of the number of proposed joint subcommittees. He agreed the Senate Committee on Finance should continue to hold joint committee meetings during the February recess. Both committees would then hear a thorough overview of the major budgets. The Assembly leadership indicated they would like to have at least six of their members from the Assembly Committee on Ways and Means on these joint subcommittees. The Assembly plans to appoint three members from each party to the joint subcommittees. Senator Rawson remarked it would be helpful to have joint subcommittees looking at the budgets on the Department of Human Resources and the Capital Improvements Program. He indicated some complicated financing would occur in the Department of Human Resources' budget this session. It might be productive to have a joint subcommittee review it. Senator Raggio asked if the fiscal staff could accommodate these recommendations. Mr. Miles indicated joint meetings were easier for his staff because the committees would be hearing the same testimony. The fiscal division supports the joint committee work presentation. Senator Raggio noted if the committee followed Plan A, it would be impossible for the Senate Committee on Finance to assign any additional subcommittees. The senator commented the Assembly has not ruled out the possibility of having other subcommittees besides the joint subcommittees recommended by the study. Senator Raggio referred to Appendix K of Exhibit E and stated the timetable set out by the subcommittee could be accommodated by the Senate Committee on Finance and the Assembly Committee on Ways and Means, but the length of the session has generally been extended because of the inordinate amount of BDRs introduced during each session. He commented that unless attention is given to this problem, the session will not be able to end earlier. If this problem is solved, then the timetable set forth by the interim committee is attainable. Senator Jacobsen, referred the committee to Exhibit F, a tentative proposal outlining the structure of the joint subcommittees. The senator stated a joint subcommittee for review of the Audit Division and the Capital Improvement Program could be eliminated because very few BDRs deal with these two areas. Senator Coffin suggested the possibility of soliciting other senators with finance experience to help on the joint subcommittees. Senator Raggio indicated the idea had been discussed by leadership, but was discounted because the final decisions have to be made by the members of the Senate Committee on Finance. Senator Rhoads inquired if Senator Raggio had discussed with the Assembly Committee on Ways and Means chairmen the possibility of dropping the subcommittees from six to three. Senator Raggio replied the proposal had not been discussed directly, but they had indicated to him six subcommittees were their minimum requirement. Senator Raggio said he will advise the chairmen of the Assembly Committee on Ways and Means of the Senate Committee on Finance's concerns and negotiate a plan acceptable to both committees. Until this matter is settled, the Senate Committee on Finance will continue to follow the meeting schedule (Exhibit G) proposed by the fiscal division. There being no further business before the committee, Senator Raggio adjourned the meeting at 10:30 a.m. R ESPECTFULLY SUBMITTED: Pamela Jochim, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance January 17, 1995 Page