MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session January 26, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:05 a.m., on Thursday, January 26, 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, Senate Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Debbra J. King, Program Analyst Cristin Buchanan, Committee Secretary OTHERS PRESENT: Darrel R. Daines, State Controller Ken West, Chief Deputy Controller Don Hataway, Chief Assistant Budget Administrator, Department of Administration John P. Comeaux, Director, Department of Administration Dean Heller, Secretary of State Dale A.R. Erquiaga, Chief Deputy Secretary of State Donald Reis, Deputy Secretary for Securities, Securities Division, Secretary of State Bryan A. Nix, Senior Appeals Officer, Department of Administration Tracy Raxter, Chief, Administrative Services Division Randy C. Day, Commissioner, Office of Nevada Commissioner for Veterans Affairs Kathie Milon‚ Levenberg, Interested Citizen Controller's Office - Page 73 Senator Raggio called on Darrel R. Daines, State Controller, to present his budget. Mr. Daines began the hearings by referring to Senate Bill (S.B.) 52 of the Sixty-seventh Session, which would allow the constitutional officers to submit the budgets directly to the legislators with a copy to the Budget Office and the Governor. SENATE BILL 52 OF THE SIXTY-SEVENTH SESSION: Allows consti tution al officer s to submit budge ts directl y to legisla ture. S.B. 52 of the Sixty-seventh Session was passed by both houses in 1993, but was vetoed by the Governor. Mr. Daines suggested if the bill had passed, the constitutional officers' budgets would have been considerably different. Those differences would not have been requests for more funding, but rather requests that would better meet the needs of the elected officials. Some requests made by the controller's office were moved out of the budget and placed in a one-shot budget category while others were eliminated by the Budget Office. Mr. Daines stated he would attempt to reintroduce the requests dropped by the Budget Office in his testimony. Continuing his testimony, Mr. Daines referred to the Executive Budget of 1992-1993. He reminded the committee the Governor requested all agencies to reduce spending and keep positions vacant. Mr. Daines stated, while the Governor did not make the same request to the constitutional officers, they volunteered to live by the same reductions. Today, several items in the constitutional officers' budgets have been reduced by the amounts not spent during the 1992-1993 fiscal year (FY). Mr. Daines petitioned the committee to replace the funds and asserted his budget is labor intensive, with more than 76 percent designated for salaries and 5 percent allocated to forms and checks furnished to other state agencies. He maintained, after rent, insurance and maintenance contracts are paid, limited funds are available for operational expenses. Senator Raggio asked Mr. Daines if he had a handout showing the requests that were eliminated. Mr. Daines stated he would prepare a handout with the additional requests, and would provide it to the committee. Mr. Daines provided the committee with a program statement (Exhibit C) and brought the committee's attention to page 2. The Controller's Budget chart, Mr. Daines reflected, has remained constant since FY 1983, with the exception of 2 years when funding was approved for the purchase of a new computer system. Mr. Daines noted the controller's office is conducting 60 percent more business than in 1983, but the actual cost of operation remains the same. Mr. Daines called the committee's attention to a $6,000 reduction in operating expenses. Mr. Daines explained the problem with the reduction was the receipt of a notice from the State Printing and Micrographics Division that effective immediately, the cost of printing would increase by 12 percent, with a 15 percent increase next year and 18 percent the following year. Mr. Daines explained the increases resulted from an audit of the print shop by the legislative auditors, wherein it was ascertained it was undercharging for printing services. Mr. Daines remarked: Most of our printing is printing that we furnished other agencies of government. There are the checks, there are the various forms the other agencies have to fill out in order to process data through the state and this is something we just simply can't absorb. Ken West, Chief Deputy Controller, stated the $6,000 Mr. Daines referred to has been added back in the budget under the maintenance category. Senator Raggio questioned if the basic difference between the controller's base budget and the governor's base budget was personnel related. Don Hataway, Chief Assistant Budget Administrator, Department of Administration answered the largest difference is the Vacancy Savings placed in all executive branch budgets. Senator Raggio asked for an explanation regarding the policy and uniformity the Budget Division applies to the Vacancy Savings reflected in the Governor's Executive Budget for the controller's office. Mr. Hataway stated, while he could not speak for the entire Executive Budget, the policy is uniformly applied to all agencies that receive General Funds. John P. Comeaux, Director, Department of Administration, clarified, for all General Fund agencies with more than 10 positions, the Vacancy Savings had been uniformly applied. He stated the Budget Division may have made an adjustment if there was a special circumstance in an agency's budget, but overall the policy was uniformly applied. Senator Raggio inquired if the same policy was applied to the Governor's Office and Mr. Comeaux answered in the affirmative. Mr. West stated the controller's office can make Vacancy Savings this biennium, however, if they are forced to make Vacancy Savings the following biennium, they would have to lay off employees. Senator Raggio commented that across the Executive Budget, where Vacancy Savings were applied or where positions were reduced, new positions were now being requested by various agencies. Asking for an explanation, Senator Raggio wanted to know if those agencies were trying to restore staff to the same level as before the cuts were made. Mr. Hataway commented each budget was looked at individually and an independent decision was made based on merit. Senator Raggio asked whether any positions were requested and not provided for in the budget. Mr. Daines answered in the negative. Mr. Daines further clarified he was only replacing one position with another. He noted the budget incorrectly reflects the controller's office increasing from 34 to 35 employees. Senator Raggio moved the discussion to the Maintenance category and asked why there is a difference in the inflation and whether or not the Budget Division followed the general formula. Mr. Hataway answered in the affirmative, and commented the Budget Office began with a set of general ledger items that were eligible for inflation and ended up with a 10 percent increase in postage and insurance. Senator Raggio turned the discussion back to the enhancement budget and asked if the $6,000 request was for information services. Mr. Hataway clarified the $6,000 item was added in the Enhancement category, 125 Accessible, Flexible Responsive Government (E-125) on page 74 of the Executive Budget, under operating expenses, for printing services. Mr. Daines attested that due to the failure of an air conditioning unit, funds from the budget for operating expenses were instead used to replace the unit. The $6,000 request is to replace the funds used on buildings and grounds maintenance. Senator Raggio asked for confirmation it would be $6,000 for each year of the biennium. Mr. West clarified it would be $6,000 each year since it affected the base budget. Senator Raggio questioned the position of the controller's office regarding the $6,000 budget request. Mr. West responded the controller's office annualizes forms and when the Budget Division formulated the base budget, they speculated as to actual expenses in 1994. However, in 1994 the controller's office delayed using the $6,000 until July, so the air conditioning could be repaired. The $6,000 inflated the base which affected both years. Mr. West continued, stating printing costs will continue to rise and those increases are not in the inflationary budget. The State Printing Office told the controller's office of the price increase and the figures reflecting the increased printing costs will be in the adjusted budget, to be provided to the committee at a later date. Mr. Daines referenced a computer request not addressed in the budget and asserted: We asked for three personal computers and they were dropped out of our budget altogether even though the other equipment was placed into the one-shot category. We would like those put back in. Those are important for our operation, they have made it possible for us to do 60 percent more work over 12 years, we are working smarter, not necessarily harder. We are using the power of the equipment to do a lot of the work for us. A $3,000 computer allows us to do what a $40,000 employee would have to do. Senator Raggio questioned what the purpose of the one-shot appropriation for $165,000 to develop the integrated financial system was for, and how it involved the state's accounting system. He asked for an outline of the project and how it would be proposed. Mr. Comeaux referred the committee to page A34 of the Governor's Executive Budget. He attested the appropriation would fund the development of systems requirements for the integrated financial systems and that it would involve the Treasurer's Office, the Controller's Office, Department of Personnel and the Budget and Planning, Internal Audit, Purchasing and Risk Management divisions of the Department of Administration. Mr. Comeaux explained during the biennium, a Business Process Reengineering (BPR) analysis was done in that area and was completed a couple of months ago. Senator Raggio asked if all the listed agencies involved with the appropriation participated in the study. Mr. Comeaux answered affirmatively. He added the purpose of the appropriation would be to develop the systems requirements for each of the individual entities which participated in the study. Senator Raggio questioned Mr. Daines whether the controller's office was aware of the appropriation. Mr. Daines answered in the affirmative and added Mr. West spent a considerable amount of time on the project. Mr. Daines asserted the responsibility of the state accounting system was under the purview of the controller's office, not the Department of Information Services. Further, he declared he did not want the state accounting system to be developed without input from the Office of the State Controller. Senator Raggio noted the existence of a disagreement regarding the implementation of the system. He questioned if the study precluded the controller's office from designing and operating the accounting system. Mr. Comeaux stated it did not. He clarified, each entity that participated in the study worked from the same information to develop a system which would meet the needs of those who will use the system. He assured the committee, there was never an intention to design an accounting system for Mr. Daines. The intention is to cooperatively determine what the requirements are for the seven entities involved and to be certain the systems design will meet the requirements of an integrated system. Mr. Daines countered that the transfer of the data processing employees to central data processing would cause the controller's office to lose control over those employees as well as lose the ability to operate the system the way it is intended. Mr. West insisted, the plans for Strategic Plan for Information Resources and Information Technology (SPIRIT) for central data processing will not affect the controller's office in this biennium. However, there are plans in the next biennium to consolidate the data processing services, causing the controller to lose the control of the data processing employees and "that is what Mr. Daines is objecting to," he affirmed. Senator Raggio asserted it is not possible to look toward concerns for the next biennium, nor at this point in time is it reflected in the budget process. Senator Raggio directed the discussion back to the agency's request for additional personal computers and asked what the cost would be for the three units. Mr. West replied the cost for each personal computer is $3,000. Senator Raggio questioned if the personal computers are reflected in the budget as approved and if the personal computers will serve the needs of the controller's office during this biennium. Mr. West stated the computer requests are not in the Governor's Executive Budget and verified the computers are necessary for staff to properly perform the functions of the office. Senator Raggio agreed the computers were necessary items for the controller's office during this biennium regardless of the implementation of the proposed SPIRIT system. Mr. West corroborated the opinion of Senator Raggio and added the personal computers would be used for accountants and for analyzing information downloaded from the main frame. Mr. Hataway interceded, stating the only objection the Budget Office has is there are no funds that have been eliminated from the budget, as requested by the controller's office. He identified the personal computers, referred to by Mr. Daines and Mr. West, are in the 999 Unfunded Decision Units, under Information Services. Mr. West referenced the Enhancement 125 Accessible, Flexible and Responsive Government category (E-125) of the budget and stated, "We have asked for one accountant and the deletion of a computer operator. The Governor recommended that we put three-quarters of the accountant the first year." Mr. West indicated the impact of the Securities Exchange Commission (SEC) federal regulations would necessitate the accountant position to ensure compliance with those new regulations. Addressing the SEC regulations, Mr. Daines said the Municipal Securities Rulemaking Board (MSRB) of the SEC, has proposed a set of regulations that will result in the creation of a repository of all information available in each state concerning bond issues which still have bonds outstanding. The MSRB also addressed secondary markets to receive information about the fiscal health or fiscal position of the bond issues. Mr. Daines noted he was not sure when the regulations are going to be implemented, but more regulations will be forthcoming and the effect of those regulations is unknown. Mr. Daines believes he may request additional funding from the Interim Finance Committee before the close of the fiscal year because of the regulations expected to take effect after the legislative session. Additionally, Mr. Daines informed the committee his office may need one additional employee to accumulate information to send to the State Informational Depository (SID) for distribution to the secondary bond dealers. Senator Raggio questioned who would promulgate the regulations and Mr. Daines advised the chairman it would be the SEC. Mr. Daines also informed the committee the SEC has already adopted the regulations; however they do not require the states to maintain a repository. Mr. Daines then called the committee's attention to Nationally Recognized Municipal Securities Information Repositories (NRMSIR), and stated this organization will collect information from the state and disseminate the information to various secondary markets. Continuing his testimony, Mr. Daines addressed the committee on Electronic Benefit Transfers (EBT). He stated the purpose is to eliminate food stamps and give recipients an automatic teller machine (ATM) card to acquire groceries. He noted one problem with the EBT program is Regulation E, which places responsibility on the firm that uses the ATM cards if fraud is committed. Mr. Daines explained the entity responsible for any fraud in the EBT program will be the Welfare Department and they are not comfortable with that potential liability. Senator Raggio questioned how the EBT program would affect the controller's office. Mr. West replied the debit cards, used in connection with EBT, are another form of a warrant, thereby affecting his office. Senator Raggio stated the issue of regulations, which may be imposed, could be covered by a letter of intent. He commented: If you could make a showing to the Interim Finance Committee, or this committee if it occurs during this session, that additional personnel is required, we would consider that. I think that would be satisfactory to this committee and I would think it would also be satisfactory to the other house. Senator Raggio invited additional testimony concerning enhancements. Mr. West stated he wished to address the 3/4 accountant position. Senator Raggio asked if the controller's office would be able to fill that position immediately upon the commencement of the fiscal year and Mr. West answered in the affirmative. Senator Raggio then questioned why the Budget Division only assigned a 3/4 position. Mr. Hataway claimed a 3/4 position will stretch the General Fund dollars as far as they could go. He added by the time the Legislature adjourns this session, it will be difficult to recruit and fill the position by July 1, 1995. He stated it will be more likely to recruit and fill the position by October 1, 1995. Mr. Comeaux commented nearly all the new positions requested were recommended to begin October 1, 1995, with a few exceptions. Senator Raggio asked if it would be acceptable if the position could be filled by October 1, 1995, and not July 1, 1995. Mr. West articulated the only problem is the SEC regulations have already passed and the controller's office needs to work with the Department of Administration immediately. Senator Raggio stated the committee will not decide this item until the budget is approved. The final issue Mr. Daines brought to the committee's attention is the new personnel system which will include a payroll system. Mr. Daines stated the payroll system is constitutionally within the responsibility of the controller's office, but the Legislature appropriates the money to the Department of Personnel. He advised the committee, the Department of Personnel has been performing the payroll duties for the last 12 years, and is now discussing a new payroll system. Mr. Daines claimed he would like to transfer the payroll duties back to the controller's office since that is where it constitutionally belongs. Mr. West explained the request to move the payroll activities back to the controller's office was under the 999 Unfunded Decision Units category of the budget. Senator Raggio questioned if the amount requested is sufficient to restore the payroll function to the controller's office. Mr. Daines stated it will simply be a transfer of the funds from the payroll division in the Department of Personnel to the payroll division in the controller's office. Mr. Hataway commented on the 999 Unfunded Decision Units category, stating the Balance Forward and the Other Non-State revenue are all related to payroll and apparently mirrors the payroll costs in the Department of Personnel. He continued, stating the payroll function was transferred out of the controller's office in the mid- 1970s and has been with the Department of Personnel since that time. Mr. Hataway explained the Budget Office feels the appropriate time to make a decision as to whom will ultimately be responsible for the payroll function will be when the new payroll system is put into place. Senator Raggio stated the committee will reserve judgment on the issue at this point. Senator Coffin questioned if the Governor's Executive Budget mentions the proposed new payroll system since it is not referred to in the controller's budget. Mr. Hataway asserted there is no new system recommended in the budget for this biennium, but he believes it will be addressed in the next biennium. Senator Raggio asked Mr. West to provide the documentation and fiscal impact of the specific requests for the Vacancy Savings, inflation on printing, personal computers and transfer of the payroll function, to the Fiscal Division. Senator O'Donnell asked Mr. Comeaux if the BPR for the controller's office has been completed and if so, he requested a copy. Mr. Comeaux answered in the affirmative and stated he will have a copy delivered to him. Senator Raggio then questioned why the controller's office budget does not contain performance indicators. Mr. West stated there are measurement indicators on page 1 of Exhibit C. He emphasized the difficulty he incurred when looking for quantifiers, and informed the committee since the budget has been constant for the past 12 years, there are no quantifiers that really reflect the demand for services. Senator Raggio articulated his concerns regarding the limited ways to measure the performance of the controller's office. Mr. Daines responded the controller's office has improved the way they enter information into the computer. He stated he moves money by electronic transfer and those transfers do not count as warrants, therefore the charts, on page 1 of Exhibit C, do not properly reflect the actual amount of business his office conducts. Senator Raggio voiced his concerns stating, "It would seem that you could have indicated and showed volume of the work and things of that nature. You're saying you can't?" Mr. West stated he has a chart showing the number of accounting transactions that the controller's office processes each year (page 1, Exhibit C). Mr. Hataway brought the committee's attention to page A31 of the Governor's Executive Budget, a one-time $38,238 appropriation recommended for equipment. Senator Raggio questioned the purpose of the one-time appropriation and whether it affects the controller's office. Mr. Hataway stated it is for equipment and he offered to provide a detailed list. Senator Raggio wanted to know how the equipment request would affect the controller's office. Mr. Daines replied the appropriation reflects the exclusion of the three personal computers. Senator Raggio questioned if that is the one-shot appropriation Mr. Daines wants enhanced by $9,000 and Mr. Daines answered in the affirmative. Secretary of State - Page 77 Dean Heller, Secretary of State, opened the budget by providing the Committee with an overview of the office. Mr. Heller then addressed budget account 1051 and provided testimony from prepared text (Exhibit D). Senator Raggio questioned the amount of the Vacancy Savings and where it is located in the budget. Mr. Hataway informed the chairman the Vacancy Savings is in the base budget, and that 1.575 percent has been incorporated. Senator Raggio asked what is the balance of the Expedite Fund and the expectations for FY 1995. Dale A.R. Erquiaga, Chief Deputy Secretary of State, stated the balance as of December 31, 1994 is $2.5 million and he added the projected balance at the end of FY 1995 will be between $3.1 to $3.2 million. Senator Raggio questioned if the funding for the five requested positions will come from the Expedite Fund and Mr. Hataway answered in the affirmative. Senator Raggio requested Mr. Heller to address whether the funds in the Expedite Fund should be reverted to the General Fund. Mr. Heller stated it is a good idea, however, he added he does not want to do that until the agency has been audited and a BPR has been completed. Senator Raggio agreed, stating Mr. Heller's suggestion is prudent, but the chairman made it clear he wanted to reserve that issue for further determination. He then addressed the Enhancement category, under 126 Accessible, Flexible Responsive Government (E-126), and questioned why it is not in the base budget. Mr. Hataway affirmed it has been eliminated from the base budget and has been proposed as a separate decision unit for the committee's consideration. He stated, "Because the function that had been assigned to that position will no longer exist in base, it has been eliminated, along with the proposed transfer of the other position, to the Archives (and Records, Division of the State Library)." Senator Raggio asked for an overview how E-126 is tied to the other transfers in the budget. In response, Mr. Hataway testified: There were two people involved in microfilming activities, one of which is proposed in the Enhancement category, under section 901 Program Transfers (E-901) to be transferred to archives and the other one which was eliminated from the base budget and was shown under a separate item to be reassigned to different duties in E-126. E-901 gives you a total composite view of what the impact is going to be on the Secretary of State's Office for archives handling microfilming. The net overall savings as I indicated was roughly in the $12,000 a year savings to their office; by the time you add up the items that were eliminated in the base, the position in E-126, the transfer of the other position in E-901 plus the transfer of certain costs to archives, taking all that into consideration, the cost to the Secretary of State's Office will be approximately $55,000 a year that they will have to pay archives to do it, but it is offset by elimination of roughly $67,000 from their budget. Mr. Heller drew the committee's attention to the agency's potential performance indicators and stated they are inadequate. He referred the committee to the third page of Exhibit D and read from the prepared text. In response, Senator Raggio suggested Mr. Heller submit a list of the potential performance indicators to the Budget Division to formulate what the performance indicators should be for future budgets. As a final note on budget 1051, Senator Coffin voiced his concern over the possibility of the Expedite Fund reverting to the General Fund. He asserted: We've seen a parallel in the Insurance Division where an increasing amount of dollars from fines and other licenses have gone into the General Fund as opposed to Agency Service, and what's happened is service declines and waits increase. I think anytime you have an Expedite Fund, you automatically have created two classes of customer. You've created a better service for the well heeled customer and since you have a zero sum game here because you are not increasing personnel, someone is going to suffer in their service. Consequently, I would rather see that fund stay with the Secretary of State to preempt a possibility of a grab to the General Fund so serious that service really never improves, but that the fee increase continues. I believe you can make a justification of that, particularly since you are a point of service agency. Secretary of State Securities Division - Page 85 Mr. Heller opened the hearing on this budget by providing testimony from prepared text (page 4, Exhibit D). Senator Raggio inquired why the proposed satellite office will be located in Reno rather than Carson City. Mr. Heller responded the decision to locate the proposed satellite office in Reno is because of it's population and size. Senator Raggio asked if Mr. Heller had adequate space within the office in Carson City to set up the northern office, rather than establish a new facility in Reno. Mr. Erquiaga explained that when the Securities Division relocated to southern Nevada, the Governor's Office reclaimed and remodeled the vacated space. Mr. Hataway advised the committee the rent is built into the budget for the purpose of acquiring additional space. Senator Mathews inquired if it would be more cost effective to establish the northern office in Carson City to eliminate the need for new personnel. Mr. Erquiaga advised the committee there are no Securities Investigators or staff in the Carson City office. Senator Mathews pointed out if the office is located in Reno, the agency will incur more travel expenses and she believes it will be more economical for the office to be in Carson City. Senator Raggio questioned Mr. Heller if his request for a northern office is based upon actual complaints from the northern region or if he anticipates more complaints will be filed once the northern office is established. Donald Reis, Deputy Secretary for Securities, Securities Division, Office of the Secretary of State, interjected that with the establishment of a northern office, more complaints will be generated, but the Securities Division will be able to do a better job investigating and following up on the complaints received. Senator Raggio asked for information concerning the new position requested for the Las Vegas office and Mr. Erquiaga stated it is a clerical position. Hearings and Appeals - Page 581 Bryan A. Nix, Senior Appeals Officer, Department of Administration, provided an overview of the division. Next, he addressed the enhancements requested in the budget. He said: We hear two levels of appeals...self insured employers or cases from disputes at State Industrial Insurance System (SIIS). We are primarily responsible for attempting to resolve those disputes at the Hearing Officer level by eight Hearing Officers (five in Las Vegas and three in Carson City). At the Appeals Officer level, we have three appeals officers in Las Vegas and two in Carson City.... Mr. Nix continued, stating the Appeals Officers have experienced a 247 percent growth in the number of appeal hearings requested, and to counter the increase, the division has requested two additional Appeals Officer positions, one for Carson City and one for Las Vegas. The budget includes funding for the appropriate furnishings and equipment to supply the additional positions and for office space for the position in Carson City. In addition, the division has asked for computer equipment. Senator Raggio asked Mr. Nix how many Hearing Officers and Appeals Officers are currently in the division. In response, Mr. Nix stated there are eight Hearing Officers and five Appeals Officers. Senator Raggio questioned what the salaries of the two new Appeals Officers will be and Mr. Nix responded the salary for each position is approximately $65,000 per year. Referencing page 581 of the Executive Budget, Senator Raggio inquired if the measurement indicator showing the "percentage of appeals scheduled for a hearing within the scheduled time" is correct. Mr. Nix stated it is correct, however he added that more than one-half of the cases scheduled for hearing before the Appeals Officers are continued, primarily at the request of the parties, because they are not ready to proceed by the first scheduled date. Mr. Nix informed the committee the division is required by state law, to set appeals hearings within 90 days, but added, the division has asked the Senate Committee on Commerce and Labor to remove that time (deadline) to allow the division more flexibility in scheduling hearings. Senator Raggio questioned what percentage of decisions by the Hearings Officers are overturned by Appeals Officers. Mr. Nix replied when continuances are removed from the number of cases considered, Appeals Officers reverse 12.72 percent of the Hearing Officers' decisions. Senator Raggio questioned how many Appeals Officers' decisions were overturned by the District Court, to which Mr. Nix had no information. Mr. Nix informed the committee the division is currently gathering that information, but he believes 70 percent of the decisions by Appeals Officers are affirmed by the courts. Senator Raggio asked Mr. Nix if he agrees with the Governor's recommendations in the budget and Mr. Nix answered in the affirmative. Senator Raggio inquired if the eight new computers and four new printers in the Enhancement, 125 Accessible, Flexible Responsive Government Category (E-125) is sufficient equipment for the division. Answering in the affirmative, Mr. Nix stated the requested equipment will enable every staff member access to a computer. Senator O'Donnell questioned Mr. Nix on what kind of computers are requested in E- 125. Mr. Nix could not answer Senator O'Donnell's question, but added he believes the computers are personal computers. Senator O'Donnell voiced his concerns over the large amount requested in the budget for the new computers and printers. Tracy Raxter, Chief, Administrative Services Division, addressed Senator O'Donnell's concerns. He maintained the eight computers will cost $24,500 and four laser jet printers will cost $16,000. Mr. Raxter mentioned in addition to the computers and printers, budgeted into E-125 is a file server, a modem, and a BPR study. Senator O'Donnell questioned why this information is not itemized in the budget. Senator Raggio requested Senator O'Donnell meet with the Hearings and Appeals Division to discuss this particular request and get back to the committee with his recommendations. Senator O'Donnell declared: I would sure like to see the true picture of where this money is going. If you are coming to us for a $78,000 request and the explanation is eight new computers and four printers, it does not ring true...I know what the prices are. Then I find out there are other things involved. I think we need to see a clear picture as to what is really going on. Senator Raggio asked if the Budget Division highlights only certain information in the budget. Mr. Comeaux answered in the affirmative. He informed the committee he will provide them with exact details on the budget request (E-125). Senator Jacobsen inquired as to the training allocated in the budget. Mr. Nix explained the training includes sending the Hearings Officers to the National Judicial College when a course is offered that is appropriate to the job, such as courses on Workers' Compensation Law or courses involving changes in the law. He further stated the attorneys attend courses for Continuing Legal Education (CLE) to keep their credits updated and to obtain new information on administrative law. Senator Jacobsen asked Mr. Nix about the turnover in the division. Mr. Nix stated the division has a large turnover since the Hearing Officers' positions have changed from classified to unclassified. He further commented in the last biennium, two Appeals Officers' positions were vacated. Workers' Compensation Hearings Reserve - Page 587 Senator Raggio commented it was not necessary to address this portion of the budget, but in the event of an unanticipated caseload, Mr. Nix could come before the Interim Finance Committee for additional expenditures. Mr. Nix acknowledged Senator Raggio's comment. Victims of Crime - Page 589 Mr. Nix provided a brief narration of the function of the program. He advised the committee the average amount of award granted to a victim has fallen due to policies which have been adopted by the Board of Examiners in evaluating and paying claims. The new policies have allowed the program to be more cautious in reviewing and paying claims, saving the division close to $1 million. Continuing, Mr. Nix advised the committee about legislation requested for the program concerning a request to pay more than $15,000 in total benefits to victims of certain violent crimes. Senator Raggio asked if a bill had been introduced and if it had been built into the budget, even though there is a cap on the amount which can be paid out. Mr. Nix stated he did not believe the bill has been introduced. Mr. Nix asserted there is presently a $15,000 cap and the division is requesting, that in a very limited amount of cases, they could increase that to $25,000. Senator Raggio asked if the division will limit the number of cases given an exception to the $15,000 cap, and Mr. Nix answered in the affirmative. Mr. Nix addressed another piece of legislation the division has drafted regarding burial expenses. He stated Nevada has one of the lowest burial approval rates at $1,000. The legislation will increase the amount to $2,500. Mr. Nix stated the impact on the budget would be approximately $54,000 per year for the 36 claims received. In addition, Mr. Nix stated the division has requested hit and run claims be subject to approval for benefits, which will impact the budget by $61,000. Senator O'Donnell questioned whether the program, after paying a claim for a victim, goes after the criminal for restitution. Mr. Nix answered the program is successful with other agencies that work with the court to obtain restitution. He clarified the restitution the division does collect is not a large sum since criminals do not pay very well. Senator O'Donnell interjected stating a law was passed in 1993 which states, after a criminal has been released on parole and they do not make restitution, their wages can be attached. Mr. Nix conceded, however, he stated the program has not yet utilized that law. Mr. Nix brought to the committee's attention the request for an additional compensation officer for the Las Vegas office to assist in handling a 50 percent increase in claims. Commissioner for Veterans Affairs - Page 1737 Randy C. Day, Commissioner, Office of Nevada Commissioner for Veterans Affairs, began his testimony by addressing the committee on a $215,000 one-shot appropriation on page A47, and a $42,000 one-shot appropriation on page A48 of the Executive Budget. He outlined the purpose of the appropriations as stated in the budget. Senator O'Donnell asked if an audit had been executed on the division and Mr. Day answered the audit has been completed except for one remaining item. Senator O'Donnell inquired about the remaining item and Mr. Day answered the item concerns increases in burial fees. Senator O'Donnell questioned if, in fact, that one item dealt with Mr. Day's unwillingness to transfer funds to the General Fund. Mr. Day asserted the transfer of funds to the General Fund has to do with the guardianship program. Senator O'Donnell asked what is the status of the transfer of funds from the guardianship program to the General Fund. Mr. Day responded the division is in the process of transferring the funds to the Treasurer's Office. Senator Coffin asked Mr. Day how long the land, currently dedicated to the cemetery, will last due to acceleration of burials. Mr. Day stated, for both cemeteries, he believes land will be used up by the year 2035, approximately 5 to 10 years prior to the original estimated date of 2040 or 2045. Senator Coffin then questioned if Mr. Day has considered construction of a mausoleum and Mr. Day proclaimed the department has discussed the idea at great length. Senator Jacobsen commended Mr. Day for a job well done. Veterans Home - Page 1743 Mr. Day testified that Senator Lowden introduced legislation in the 1993 legislative session, for veterans' license plates. The license plates have been available since November, 1994, and a total of 85 plates have been sold. Senator Raggio questioned what has been done as far as disseminating information on the availability of the license plates. Mr. Day responded he has been speaking to the various veterans service organizations. He informed the committee that prison laborers are currently manufacturing posters to be distributed throughout state agencies and he will be advertising in newspapers. Senator Raggio asked the price of the special license plates. Mr. Day answered the plates are $61 for the first year, $25 of which will go toward the Veterans Home Fund, and $30 for each subsequent year, of which $20 will go toward the Veterans Home Fund. Senator Rawson voiced his concerns over the cost of the special license plates and stated the price should either be reduced or more of the proceeds should go to the Veterans Home Fund. He added he did not believe the license plates will render the kind of return hoped for unless more proceeds are appropriated to the Veterans Home Fund from the sale of the plates. Senator Raggio invited audience members to testify before the committee. Kathie Milon‚ Levenberg, Interested Citizen, member of the Veterans Advisory Commission for the State of Nevada, represented to the committee her hopes the committee will approve the budget for the Commissioner for Veterans Affairs. She commended Mr. Day for his hard work and enthusiasm. Senator Raggio thanked Ms. Levenberg for her testimony and for her concerns. Senator Jacobsen introduced Senator Pozzi from the audience as a member of the advisory committee for the Veterans Cemetery. Senator Coffin asked Senator Pozzi to introduce his guests. Senator Pozzi introduced David and Denise Parson. There being no further business, Senator Raggio adjourned the meeting at 10:15 a.m. RESPECTFULLY SUBMITTED: Cristin Buchanan, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance January 26, 1995 Page