MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session April 17, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Monday, April 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 Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews COMMITTEE MEMBERS ABSENT: Senator Raymond D. Rawson, Vice Chairman (Excused) STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Judy Jacobs, Committee Secretary OTHERS PRESENT: Bob Gagnier, Lobbyist, State of Nevada Employees Association George Pyne, Executive Officer, Public Employees Retirement System Pat Eischeid, Chief, Office of Internal Audits, Department of Admin istra tion John P. Comeaux, Director, Department of Administration Walter R. Tarantino, Nevada Highway Patrol Association James P. Weller, Director, Department of Motor Vehicles and Public Safety Major Dan Hammack, Nevada Highway Patrol Richard E. Wyatt, Chief Parole and Probation Officer, Division of Parole and Probation, Department of Motor Vehicles and Public Safety David W. Wyble, State of Nevada Peace Officers Association Gary Yoes, Political Action Coordinator, SEIU Local 1864 Robert E. Bayer, Director, Department of Prisons After ascertaining that there were no bill draft requests (BDRs), Senator Raggio opened the hearing on the bills on the agenda. SENATE BILL 302: Makes various changes regarding public employees' retirement system. Bob Gagnier, Lobbyist, State of Nevada Employees Association (SNEA), said SNEA requested S.B. 302. He explained that although the three parts of the bill affect the retirement system, any one part could stand alone, and he asked the committee to consider each part as a single unit. Mr. Gagnier stated the first section of the bill will allow a member of the system to designate a dependent person as his survivor. He paraphrased the definition of the dependent person on page 5 under section 6 of the bill as "a surviving person of a deceased member who was designated by the deceased member and dependent upon the deceased member for at least 50 percent of his support for at least 6 months immediately preceding death." He indicated the explanation will allow the addition of a designated person other than those already specified. Mr. Gagnier said the present law only allows a child, dependent parent or spouse to be designated as listed in section 6. He noted an employee will not be allowed to designate both a child and another dependent person, only the one named to receive the $300 benefit. Senator Raggio inquired what will happen if the designee has not been dependent on the employee for at least 50 percent of his support for the last 6 months prior to death. Mr. Gagnier replied it may be a legal issue and may constitute fraud under the system. Senator Raggio asked what will happen if a person designated as a dependent by an employee who, at the time of designation, was dependent upon the employee for support, but who at the time of the employee's death no longer has a 50 percent dependency. Mr. Gagnier conceded the senator made a good point. Mr. Gagnier said SNEA wants to be sure the person really has been dependent upon the employee. Senator Raggio asked if it will be sufficient for the person to be a dependent at the time the designation is made. Mr. Gagnier speculated the bill drafters used the existing language in section 6, subsection 2 on lines 35 through 38. Mr. Gagnier described the second consideration commencing in section 2 on page 1 and continuing through line 34 on page 3. He declared it allows those employees who are paying their own retirement contribution to do so with pretax dollars so that they will have a current income tax advantage. He stated they will end up paying the tax when they receive the money. He said: There are a couple of reasons for this. Before the IRS [Internal Revenue Service] changed their manner of collecting money from retirement ... it used to be that all of the money that you had put into the retirement system, IRS waited until you had recovered all of that in retirement benefits before they charged you tax. They changed that, so that now, when you retire, even though you paid with after-tax dollars, they give you a credit but they phase it in over what they expect your life expectancy to be. So the amount of tax credit you get is minimal. Mr. Gagnier asserted the proposal will allow employees to lower their taxable income at the present time and they will pay the tax at the time they actually retire. He claimed the State of California has been offering this advantage to employees for over 10 years. Senator Raggio asked if the amount is deducted prior to reporting taxable compensation. Mr. Gagnier affirmed the query and indicated it will lower taxable income in a manner similar to deferred compensation programs or similar to those in which employers actually pay the retirement contribution on behalf of the employees. Mr. Gagnier said the final sections of S.B. 302 allow employees to change the beneficiary or the option. At present, he said, the statutes require a once-retired returning employee to work for 5 years or more before designating a new beneficiary. He admitted the area is very technical and the retirement system may have some objections. He noted there are increasing numbers of employees who return to work after having retired in order to earn additional credits toward retirement. Senator Raggio asked for clarification regarding the option available to retirees who return to work. Calling attention to section 4 on page 3, Mr. Gagnier explained: A retired employee who accepts employment, and he forfeits his current retirement allowance for the duration of that employment, and then upon termination of the employment he can either receive a refund of the additional contributions he made ... if he had less than 5 years, or under this, the additional allowance that he has earned during this new period of time. The employee may designate any beneficiary in accordance with the beneficiary law. Mr. Gagnier noted the employee cannot preclude the spouse from being the designated beneficiary, but at that time he may designate a new beneficiary or cancel any option he selected when he first retired and choose a new option reverting to the unmodified retirement allowance. He said it will allow the employee to add the new time to the previous time as long as he returns to work full-time. Senator Mathews asked if the employee will be required to return to work for 5 years before he is eligible for the opportunities described. Mr. Gagnier responded it is not the intention to require another 5-years' employment with the deletion to be found on line 4 of page 4. Mr. Gagnier asserted there will be no fiscal impact upon the state in the new section which will allow employees to pay retirement with pretax dollars. He reiterated it will have a beneficial impact on the employees by allowing more spendable income during employment. He averred the bill will be beneficial to the state's economy. Senator Raggio asked if the fiscal impact of other provisions for the year have been computed. Mr. Gagnier surmised the Public Employees Retirement System (PERS) has made computations for the first and third sections of S.B. 302. George Pyne, Executive Officer, Public Employees Retirement System, spoke from written testimony (Exhibit C) in opposition to S.B. 302. He voiced concern that there will be a fiscal impact as a result of each provision of the measure. Mr. Pyne opposed the provision regarding designated beneficiaries. He asserted three classes will continue to have the rights of survivorship before the dependent will be paid, while two other classes were omitted, such as the spouse of a member fully eligible to retire, and parents. He declared the intention of the provision is unclear. Mr. Pyne stated coverage will be expanded to include any dependent, not just to those with a familial relationship. He charged there is also a parity issue in which an unrelated child can receive benefits for life, longer than the actual legal issue of other deceased members of the system. Mr. Pyne objected to the provision of S.B. 302 which will limit benefits to a single additional dependent. He estimated the cost will be .05 percent of the payroll due to expansion of the class of eligible survivors to a fourth group which will amount to an additional $1 million annually to be shared equally between employees and employers. Mr. Pyne explained sections 2 and 3 of S.B. 302 will affect an estimated 20,000 active members of PERS, from which approximately half are enrolled under the employee-employer contribution plan, while the other half are under the employee-pay plan. He projected an eventual increased contribution rate of .15 percent as employees select the employer-pick-up plan proposed in the bill over the employer-pay plan because it will expand the group of individuals eligible for a refund. Mr. Pyne declared the plan being proposed by SNEA will offer the employees "the best of both worlds." He stated they will receive not only the tax advantage, but also the refundability feature. Senator Raggio asked how the system will be affected. Mr. Pyne responded the impact will amount to a .15 percent increase in the contribution rate just for the 20,000 who may select the employer- pick-up plan, which includes refundability. He reported the actuary estimated it will take approximately 5 years for the higher contribution rate to be recognized as new employees come into the plan. Otherwise, he said, some new employees will select the employer-pay plan which has no refund feature. Senator Raggio recalled discussions regarding advantages of the employer-pay plan versus the employee-pay plan. He remembered one of the features is that the employee will receive, under the employer-pay plan, the refund benefit while not being required to pay income tax on the benefit. He asked how refundability will be affected by S.B. 302. Mr. Pyne responded the employee will be eligible for the refund in both cases. Mr. Pyne explained: If you pass this, employee-pay goes out the window.... This plan will take its place. [The] employee will still get the same refund he's always got.... The employer is paying the full contribution. The employer picks up the employee's contribution. Mr. Pyne provided the committee with a worksheet (Exhibit D) to demonstrate the way it will operate. He indicated there will be no cost difference to the state if the employee goes from the employee-employer plan to the employer-pick-up plan under Internal Revenue Code Section 414(h) being proposed. "If you assume the employee has a pay of $1,000 per month paying 9.13 percent of contributions to the plan after tax," he explained, "the employee contribution is $93.10, matched by the employer at a cost of $93.10." He said the total cost to the employer is then $1,093.10. The amount refundable to the employee, if he terminates employment, will be $93.10, he said. Mr. Pyne explained under the employer pick-up plan the new wage will be $936.90 according to the IRS, although it will be $1,000 as far as others are concerned. He said: That's $1,000 minus the $93.10 contribution by the employee. It's called employer pick-up, because technically the employer is picking up the employee's contribution. [The] PERS contribution by the employer, though, is $186.20. We're still getting the full contribution we were originally because the employer is going to pay $1,000 times .1862 percent ... The total cost to the employer is still the same, $1,093.10, because the employee's pay is lower at $906.90 ... but again the employee can take a refund of the $93.10. Mr. Pyne continued to explain: The real differential is in the example below [on Exhibit D] in just remembering the employee pick-up ... cost is $1,093.10. Our current employer-pay plan works differently. There is no refundability feature. So as a result, the contribution rate is lower; it's .1822 percent. The wage is $916.51 to the employee. That's what he's being taxed on. The employer contribution is ... $166.99. The cost to the employer is $1,083.50. So because of the nonrefundability feature of our current program, it's a cheaper program. Mr. Pyne reiterated his opinion most new people coming into the system will go into the employer pick-up program in order to take advantage of both the tax benefit and the refundability features. Mr. Pyne stated, for a retiree returning to the system, section 4 will allow some new choices very costly to the retirement plan at the time he retires. He explained at present the benefit is suspended during the time of employment when a retiree returns to work for a public employer, and then he has the option to re-enroll in the system and earn additional benefits calculated in a separate manner from his original benefit. He asserted one problem with S.B. 302 commences on page 4, line 7, because it will not only affect the new benefit, but also it will allow the person to go back and cancel his originally selected option and select a new option and beneficiary. According to Mr. Pyne, if a person returns to work for 6 months and then retires, he will be able to select a new option and a new beneficiary, and it will make pension-cost predictability very difficult. He pointed out the employee will have an opportunity to select a new beneficiary if the original beneficiary has died, leaving no end in sight to the costs associated with that provision in section 4 of the bill. Senator Raggio surmised the provision could provide incentive for retirees to return to the work force. He inquired if there is historical information regarding the number of employees who retire and then return to work. Mr. Pyne was unable to answer but agreed the provision could result in much abuse. He reported the actuary has indicated it will be extremely difficult to project costs and he has expressed concern over the language in the provision. Senator Coffin agreed it would be helpful to know how many retirees return to work before making a determination to recalculate the costs to the system. He suggested the benefits will have to be reduced. Mr. Pyne responded the calculation of the cost is based upon the life expectancy of the retiree and his spouse at the time he retires. He explained S.B. 302 will allow the person to return to work and name a new beneficiary, perhaps a grandchild with a life expectancy that could go on for 70 years. He acknowledged that may not be the intent of the provision, but it will allow such a scenario. While agreeing such a case could occur, Senator Coffin asserted there may be a way to work out the problem. He said, "A person may choose not to name a grandchild if, in fact, the child is only going to get $33 a month for the rest of his or her expectable life, because that's probably where you'd be." He concurred the law will have to be worded in a fiscally responsible manner. Mr. Gagnier responded the omission of some beneficiaries in the first section is unintentional and it can easily be corrected by the bill drafters. He reiterated it is SNEA's intent that only one person be eligible. However, he said, although the definitions of "dependent person," "dependent parent," and "dependent child" are singular, the intent is that there can be more than one dependent. He suggested the definitions be changed. Mr. Gagnier wondered why the "best of both worlds" should not be available, as long as there is benefit to the employees, there is no problem according to the IRS, and it does not cost the state more. He declared employees should be allowed to use the employee pick-up plan if it is a better system. He iterated long-standing SNEA opposition to the employer-paid plan. Mr. Gagnier charged Mr. Pyne failed to mention that those who take the employer-paid plan have a 1 percent advantage through lower contribution rates, even if S.B. 302 is adopted. He reminded the committee those employees who are under the joint-pay system will have an increased contribution rate starting on July 1, an advantage over the pretax plan, but it will not affect those under the employer-paid plan. In response to the example cited by Mr. Payne regarding issue of beneficiaries, Mr. Gagnier commented: An employee retires and he takes an option to protect his beneficiary, and he's getting a reduced amount to protect the beneficiary in case he or she dies. But then the beneficiary dies, and then the employee wants to go to the unmodified allowance, and this is going to somehow increase costs. The only increased cost to the system is if the employee had died and they pay out to the beneficiary. So if the employee has been getting a reduced amount up to the point the beneficiary dies, the system's already made money. Then ... if the employee chooses a new option, even the unmodified allowance, then starts getting the higher amount, why not? The beneficiary's no longer being protected. That's what he paid for. So we can't see why there would be any cost other than some actuary said "Well, we figure it out that way." And we get a little tired of hearing actuaries and how they figure out things. In the absence of further testimony on S.B. 302, Senator Raggio closed the hearing and opened the hearing on S.B. 346. SENATE BILL 346: Makes supplemental appropriation to department of administration for personnel expenses of office of internal audits. Pat Eischeid, Chief, Office of Internal Audits, Department of Administration, stated the reason for the bill is to take care of additional salary expenses not contemplated at the time the budget was originally prepared. She explained "There is a policy that the steps within are set at one. Unfortunately, when you get to the area of expertise that was needed in my division for the internal auditor, we chose people within state government and therefore they were at a much higher step than was anticipated by the one set up in the budget." She said S.B. 346 will provide the additional $4,000 needed through June 30, 1995. John P. Comeaux, Director, Department of Administration, voiced approval of the measure. In the absence of further testimony, Senator Raggio closed the hearing on S.B. 346 and opened the hearing on S.B. 333. SENATE BILL 333: Requires reimbursement of peace officer employed by state for required clothing and accessories damaged in performance of duties. Walter R. Tarantino, Nevada Highway Patrol Association, recounted an incident in which a highway patrol trooper went down on his motorcycle when a deer ran into his path and he lost $661 worth of motorcycle safety uniform equipment, including boots and jacket. He said the Nevada Highway Patrol (NHP) and the Department of Personnel agreed the trooper should be reimbursed for his lost equipment, but no mechanism was available to do so. When the employee filed a claim, the State Board of Examiners agreed no recourse was available. Mr. Tarantino related the Personnel Commission was requested to revise the language of the Nevada Administrative Code, but members of the Personnel Commission felt it was beyond their powers to do so. He said both the Personnel Commission and the State Board of Examiners feel there should be some way to repay the trooper for the safety equipment and uniform that were unavoidably damaged, but there is no way to do so even though peace officers are given a uniform allowance. Senator Raggio questioned who makes the ultimate decision to determine if a uniform is damaged or destroyed during the course of duty, and he asked if making the provisions of S.B. 333 permissive will suffice. Mr. Tarantino declared he has no objection to using the word "may" instead of "shall." He agreed additional language may be needed to decide who will make the determination. Senator Raggio stated he is looking for a way to avoid hearings and litigation. He asked how many instances of that sort arise. Mr. Tarantino admitted that was the only incident of which he was aware. Senator Jacobsen remarked a precedent may be set through the bill. He listed volunteer firemen as one of the groups who are not allowed recompense for damaged clothing. He suggested there should be a limit. Senator Raggio interjected S.B. 333 limits the compensation to peace officers. Mr. Tarantino responded the intent is to address only uniformed peace officers. Senator Raggio noted the bill includes "other clothing." Mr. Tarantino explained motorcycle officers may, at their option, purchase heavier duty pants than those required for troopers, or they may purchase motorcycle jackets for which there is no uniform allotment. Senator Raggio remarked the bill will limit the clothing to that which officers are required to purchase and wear. Mr. Tarantino concurred. James P. Weller, Director, Department of Motor Vehicles and Public Safety (DMV&PS), voiced concern on behalf of non-uniformed personnel who do not receive uniform allowances but who tear or damage clothing in the course of duty as law enforcement officials. He agreed with the change from "shall" to "may" as long as it will include non-uniformed personnel. Mr. Weller asserted a highway patrolman who damages clothing in the performance of duty while working in plain clothes should be reimbursed. He acknowledged he has no statistics from which to project how many incidents will be covered. He stated there is such a policy in the federal system and there are two or three claims per year in a federal office in Las Vegas with approximately 100 personnel. Senator Raggio commented the issue is where one should draw a reasonable line. He noted the bill was presented in a situation making obvious the need to compensate without any authority to do so. He asked how a line can be drawn for plain clothes which could be very costly, whereas there is some consistency to the cost of uniforms. Major Dan Hammack, Nevada Highway Patrol, testified the NHP supports the concept of S.B. 333 but has similar concerns regarding accounting for damage to uniforms and how the provision will be administered. He suggested it may be preferable to increase the current uniform allowance by an average loss rate per employee. He said a survey of 71 employees showed the average loss rate is $100 to $150 per employee per year. Major Hammack explained the total impact of raising the uniform allowance has been calculated at $49,000 per year. He concurred it will be difficult to extrapolate the cost of S.B. 333 because it will depend upon the number of accidents or incidents. He said the uniform allowance is $664 per year based upon normal wear and tear. He stated the initial issue of a uniform, including boots, shirts and trousers, costs from $1,200 to $1,400. Senator Raggio inquired if Mr. Tarantino's proposal will cost $49,000 per year. Mr. Tarantino responded no survey has been conducted and the request is being made based upon the one incident. Richard E. Wyatt, Chief Parole and Probation Officer, Division of Parole and Probation, Department of Motor Vehicles and Public Safety, reported his employees do not have the luxury of uniform allowances. He stated he has experienced seven occasions over the past 20 years in which his clothing was damaged in the performance of his duties. He said he never received any reimbursement, although he agrees the state should reimburse employees for damage with a set amount per garment. Mr. Wyatt acknowledged his officers can go after the offender for reimbursement, whereas members of other law enforcement agencies may not have that ability. He pointed out a parole or probation officer can add restitution to the state to the sentence in order to recover losses. Senator Coffin remarked the bill may be broader than originally intended. He asked if there is a way to narrow the language beyond "may" or "shall." He stated a peace officer is subject to situations in which damage can occur 24 hours a day. He suggested the bill should be more specific and perhaps include language to limit the provision to officers working on shift or during apprehension or supervision. He agreed the measure is so open- ended it could cost much more than projected. Mr. Wyatt pointed out there are non-peace officer personnel who come into contact with offenders. He stated the intention to have more non-peace officer personnel work in the field to provide supervision wherever possible, which will mean more will come into contact with offenders. He added receptionists are in contact with offenders. He agreed there should be some way to reimburse those employees if they sustain damage to their clothing while they are involved with offenders. Senator O'Donnell recalled being required to pay for damage to his uniform when he was employed as a police officer. He agreed it is incumbent upon the state to consider reimbursement. He opined the word "may" will allow the director to consider each individual request on its own merit. He stated there should be no concern because it will become apparent if reimbursements grow too high. Senator Raggio suggested the bill should be limited to clothing so as not to include accessories or other non-uniform items. He declared a reasonable limitation should be put in place and authority should be given to monitor potential abuse. Senator Jacobsen asked if such damages are included in incident reports. Mr. Wyatt confirmed all damages of that nature are made part of the arrest report. He said the court can include those damages, but he has not seen judges honor such requests at the misdemeanor or gross misdemeanor level. Mr. Wyatt stated at present equipment for parole and probation officers is not state issue and the officers must purchase their own items. David W. Wyble, State of Nevada Peace Officers Association, presented a fact sheet (Exhibit E) in support of S.B. 333. He endorsed the change from "shall" to "may" in order to give the directors the option to determine if reimbursement is warranted. He agreed the number of cases is limited. Senator O'Donnell asked if there is any mechanism in which a peace officer can make a request for reimbursement. Mr. Wyble responded the only instrument is the incident report which indicates damage. He acknowledged it may be possible to submit a grievance report. Gary Yoes, Political Action Coordinator, SEIU Local 1864, offered strong support for S.B. 333 Robert E. Bayer, Director, Department of Prisons, acknowledged the possibility of a powerful fiscal impact to the bill. He pointed out the employees of DOP are in daily contact with inmates in which their clothing is often torn or damaged. He proposed inclusion of language that once a decision is made by the department it is a final decision and not subject to appeal. He visualized a steady stream of people filing appeals. Mr. Bayer suggested a pilot program could be instituted with a set pool of funds, and once the funds have been expended, no more reimbursements can be made. He said inmates are charged with disciplinary action if they tear an officer's uniform or damage state property. Senator Coffin asked if correctional officers have uniform allowances. Mr. Bayer affirmed they do, with an initial allowance of approximately $660 and an annual allowance of approximately $460, paid in quarterly increments. Senator Raggio closed the hearing on S.B. 333 and commenced to closing budgets. Office of the Military - Page 2031 Bob Guernsey, Principal Deputy Fiscal Analyst, stated, at the time the agency submitted a supplemental budget request to increase their allocation for utilities in Fiscal Year (FY) 1995, they were asked how much they will require in 1996 and 1997 and whether the budget should be augmented for those years. He said the agency initially responded they needed additional funding in both those years, and the General Fund budget was raised by $78,659 in Fiscal Year 1996 and by $81,148 in Fiscal Year 1997. He noted federal contributions will be increased by a larger amount in each fiscal year. Mr. Guernsey reported after he made calculations both the administrative officer and the accountant at the Office of the Military agreed the amounts proposed in the Executive Budget will be sufficient and they will not require additional funding. He said the result is the budget can be reduced by the amounts of the increase in the earlier closing actions. He said the only adjustments are those involving the utilities. SENATOR MATHEWS MOVED TO REOPEN THE BUDGET FOR THE OFFICE OF THE MILITARY. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * SENATOR O'DONNELL MOVED TO APPROVE THE BUDGET WITH THE CHANGES STATED BY STAFF BY ELIMINATION OF THE AUGMENTED AMOUNT FOR UTILITIES. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Mr. Guernsey reported concerns had been raised regarding general funding of the new armories. He provided committee members with copies of a memorandum (Exhibit F) dated April 13, 1995, from the State of Nevada Office of the Military. He said the memorandum indicates federal allocations for armories in Clark County and Washoe County may be in jeopardy of being pulled back. He stated it may be necessary for two capital Improvement projects (CIPs) to be removed from the normal CIP bill in order to put them under accelerated legislation to ensure that state matching funds will be included in efforts to avert losing federal funding for the two projects. Senator Raggio inquired if it will suffice if state funds are committed for the Clark County project and the site for the Washoe County project is identified prior to adjournment. Mr. Guernsey replied that will do. He said the two CIP projects are included in the Executive Budget as 95 C-8 and 95 C-9. Mr. Guernsey reported the Office of the Military expressed concern that even if the funding is allocated by September 30, the federal government might come in earlier and pull out the federal allocation. Senator Raggio agreed the projects may have to be pulled from the CIP budget and acted upon earlier. Senator Raggio announced his intention to invite representatives from the Office of the Military to make a report at the next full committee meeting. He turned to the museum budget. State Museum, Carson City - Page 401 Mr. Guernsey recommended the committee review the new budget page for the State Museum, Carson City. He called attention to a proposed increase in admissions revenue by $8,112 in FY 1996 and $15,612 in FY 1997 and a reduction in the General Fund appropriation by like amounts. He remarked earlier closing actions failed to include the increase in Other Revenue to be generated through admissions. Mr. Guernsey reported the museum now feels admission revenue can be increased with a corresponding reduction in General Revenue. Senator Mathews inquired if that reflects an increase in the fees. Mr. Guernsey responded it does not reflect an increase in the fee amount, rather it reflects a more accurate count of the number of visits to the museum. SENATOR O'DONNELL MOVED TO REOPEN THE STATE MUSEUM, CARSON CITY, BUDGET. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET BY ADJUSTMENT OF THE REVENUE AS REPORTED BY STAFF. SENATOR JACOBSEN SECONDED THE MOTION. Senator Coffin recalled an optimistic forecast for admissions to the Nevada Historical Society was made in 1993 which failed to develop. He voiced concern and asked if it would be wiser to balance the budget by increasing admissions revenue. Mr. Guernsey responded the situations are not similar, because the museum has history upon which to project admissions. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio indicated the budget for the East Ely Railroad Depot should be held. He noted there had been a question regarding a brochure for the Comstock Historic District. Comstock Historic District - Page 427 Mr. Guernsey stated he contacted the agency at the committee's request and the district forwarded a few remaining copies of the brochures. He recalled there was a suggestion that the committee may wish to partially or fully fund the booklet. Mr. Guernsey said the agency reported it will cost $12,000 to print 10,000 brochures. He suggested it may be possible to add $6,000 from the General Fund to print 5,000 brochures and require the agency to charge an amount to offset printing costs for the remainder. Another possible source of funding, he said, may be from the Division of Tourism. He voiced the understanding the Assembly Committee on Ways and Means fully funded the $12,000 through transfers from the Division of Tourism. Senator Coffin noted many historic sites mentioned in the brochure have a commercial aspect. He suggested some of the commercial sites be assessed in order to be mentioned in the brochure. Senator Raggio asked if the brochure is given away free of charge. Mr. Guernsey confirmed the query and suggested a limited charge be levied to help offset some of the costs. Senator Raggio inquired if the district could sell 10,000 brochures during the biennium. Mr. Guernsey responded the brochures are handed out sparingly to those who express an interest in the history of the Comstock because supplies are limited and because, if they are set out on a table, many people toss them in the trash. Senator Raggio suggested it would be more realistic to authorize an expenditure of $6,000 for half the printing and to require the district to charge a fee to pay for the other half. SENATOR O'DONNELL MOVED TO AUTHORIZE AN EXPENDITURE OF $6,000 FOR PRINTING 5,000 BROCHURES, TO AUTHORIZE REVENUE IN THE FORM OF A CHARGE FOR A SIMILAR AMOUNT AND MAKE AN ADJUSTMENT OF $34 IN FISCAL YEAR 1996 AND $70 IN FISCAL YEAR 1997 FOR UTILITIES AND CLOSE THE BUDGET. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio announced Senator Rawson made a request to hold the budget for the Commission on Women. He added he would hold the budgets for constitutional officers, too, and asked the committee to turn to budget account 101-2666. Commission on Postsecondary Education - Page 279 Dan Miles, Fiscal Analyst, stated the Subcommittee on Higher Education proposed a technical adjustment to defer the annual maintenance charge on computers until the second year of the biennium. He pointed out four new computers are being requested for the agency and the maintenance cost will not be necessary during the warranty period. Mr. Miles pointed out a bill is pending to transfer the Commission on Postsecondary Education from the Department of Business and Industry to the Department of Education. He acknowledged the transfer should not have any effect upon the budget. Senator Raggio noted there is a request for a one-shot appropriation for $17,300 for the computers being requested through Assembly Bill (A.B.) 241. ASSEMBLY BILL 241: Makes appropriation to commission on postsecondary education for computer hardware and software. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE ADJUSTMENTS DESCRIBED BY STAFF. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Museum, Library and Arts Administration - Page 393 Mr. Guernsey said a new Management Assistant position is requested by the agency, but during earlier committee actions there was a suggestion the position be delayed until October 1. He stated that is consistent with other action taken by the committee. Senator Raggio inquired if the funding for a part-time Public Information Officer in E-900 is a transfer from the Division of Tourism. Mr. Guernsey affirmed the query and added the position is to be funded at 80 percent. SENATOR MATHEWS MOVED TO CLOSE THE BUDGET AS PROPOSED. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Nevada State Library - Page 435 Mr. Guernsey reported concern was raised during earlier discussions by both the Assembly Committee on Ways and Means and by the Senate Committee on Finance concerning the possible deletion of the position of State Librarian. He said the position is eliminated from the Executive Budget. He suggested the committee consider returning the position to the budget to insure it is maintained within the inventory of positions within the Division of State Library and Archives while reducing the salary and fringe benefit costs of the position. Senator Raggio inquired what advantage is to be gained by maintaining the position on the list. Mr. Guernsey responded Joan Kerschner, the current director of the Department of Museums, Library and Arts and of the Division of State Library and Archives, has indicated she will be able to serve in both capacities for 2 more years, but she feels it is a burden to operate as both director of the department and as State Librarian. He explained maintaining the position will ensure the position remains in the department, and funding will be the responsibility of the next Legislature. Mr. Guernsey stated a minor adjustment has been proposed to cut bookmobile expenditures by $3,200 per year from the $99,200 proposed in the Executive Budget. He called attention to a memorandum (Exhibit G) dated April 10, 1995, which shows the bookmobile distributions. He said the budget should reflect a total of $96,000 for bookmobile expenditures which is overstated by $3,200 each year, and the recommendation is to move the funds back to the Title I grant distribution to local libraries. SENATOR RHOADS MOVED TO CLOSE THE BUDGET ACCORDING TO STAFF RECOMMENDATIONS. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio reiterated the closure will retain the position of State Librarian, but will not fund it for the coming biennium. Archives - Page 441 According to Mr. Guernsey, the subcommittee proposed delaying the start of new positions until October 1, 1995, cutting $700 from Out-of-State Travel, and confining attendance at annual meetings to one staff member. He reported the director of the Archives has approved the travel budget. He pointed out the Assembly Committee on Ways and Means failed to cut the $700 from Out-of-State Travel. Mr. Guernsey stated there was a recommendation to move the Micrographics operation into the Archives budget from the State Printing Office and from the Secretary of State. Following that, he said, the subcommittee recommended moving Micrographics into a separate budget account. He explained that will make it easier to track revenue and expenditures in connection with the Micrographics operation, with no distortion of the Archive's and record's budget. Finally, Mr. Guernsey said, a proposal was made to adjust duplicate equipment and adjust computer equipment and software in FY 1996. He explained there was a double count of the equipment at $1,646 each year of the biennium with no reason to include it in the second year. He said in the first year there was no clear indication of the use of funds for computer hardware. He related the agency needs two separate computers, a printer and software. He reported an increase is proposed in the first year to accommodate the items and a decrease in the second year. In response to a question by Senator Raggio, Mr. Guernsey said the Assembly Committee on Ways and Means approved the recommendations with the exception of Out-of-State Travel, which they did not cut. Senator Raggio recommended retaining the travel item since there is no reason to be $700 apart. Senator O'Donnell suggested the Micrographics budget account number 101-1332 be considered. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET ACCORDING TO STAFF RECOMMENDATION WITH THE EXCEPTION THAT THE OUT-OF- STATE TRAVEL BUDGET BE CLOSED IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATION WITH NO CUT. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Nevada State Library - Literacy - Page 447 Mr. Guernsey reminded the committee the agency will lose some federal Library Services and Construction Act Title VI funding and the Executive Budget recommends an increase in General Fund expenditures to offset the losses. He pointed out E-250 provides $2,000 each year for Out-of-State Travel which will henceforth come out of the General Fund instead of federal funds. Mr. Guernsey proposed a technical adjustment in insurance expenses to correct liability and bond insurance charges for the precise number of employees. He explained it was billed for three employees while there are only two employees. Senator Raggio inquired why it is necessary to spend $2,000 for travel under the literacy budget with only two employees. Mr. Guernsey replied he had some question with the figure. Mr. Comeaux interjected he had no information regarding the proposed travel. Senator Raggio declared a need for more information on why $2,000 is needed for travel in the limited literacy budget. He determined to hold the budget pending further information. Nevada State Library - CLAN - Page 451 There were no comments regarding the Cooperative Libraries Automated Network (CLAN) budget. SENATOR MATHEWS MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATION. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio asked the committee to consider the new Micrographics budget account number 101-1332. Micrographics SENATOR O'DONNELL MOVED TO ADD THE NEW MICROGRAPHICS BUDGET AND CLOSE IT ACCORDING TO THE PROPOSAL BY STAFF. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio reviewed the budget items to be discussed at the following Joint Meeting of the Senate Committee on Finance and the Assembly Committee on Ways and Means. Mr. Miles highlighted the differences to be resolved. Senator Raggio adjourned the meeting at 10:05 a.m. RESPECTFULLY SUBMITTED: Judy Jacobs, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance April 17, 1995 Page