MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session May 10, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 4:30 p.m., on Wednesday, May 10, 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 Dean A. Rhoads Senator Bernice Mathews COMMITTEE MEMBERS ABSENT: Senator William R. O'Donnell (Excused) STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Ronald T. Steele, Program Analyst Cristin Buchanan, Committee Secretary OTHERS PRESENT: Deb Erickson, Budget Analyst, Budget Division, Department of Administration Jere Schultz, Budget Analyst, Budget Division, Department of Administration Susan Boskoff, Executive Director, Nevada State Council on the Arts, Department of Museums, Library and Arts Senator Raggio called on the Fiscal Analysis Division staff to review the budget closing actions recommended by the Joint Subcommittee on General Government. Unclaimed Property Division - Page 703 Ronald T. Steele, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reviewed the adjustments on pages 1 and 2 of Exhibit C, as recommended by the subcommittee. Senator Rawson inquired as to the cost of the Management Information System. Mr. Steele replied the cost to acquire the system is estimated to be $39,200. He pointed out that since the system eliminates the need for a Management Assistant I position, the Management Information System should bring in additional revenue to the division. Senator Rawson questioned if the adjustments made to this budget will result in any savings to the division or whether it will result in additional costs. Mr. Steele surmised the Management Information System "will provide offsetting increases in General Fund revenue through additionally identified unclaimed property." Financial Institutions - Page 761 Financial Institutions Investigations - Page 765 Mr. Steele advised the committee the joint subcommittee suggests closing the budgets as recommended by the Governor. Financial Institutions Audit - Page 767 Mr. Steele indicated the joint subcommittee recommends a small adjustment, as outlined on page 5 of Exhibit C. Real Estate Administration - Page 771 Mr. Steele reviewed the recommended adjustments of the joint subcommittee on page 6 of Exhibit C. He noted the Program Officer II position salary figure of $22,343 is erroneous and has been adjusted to reflect the correct expense for that position to come on-line October 1, 1995. Senator Rawson questioned the significance of that adjustment. Mr. Steele explained the adjustment will result in an increased expense of approximately $6,000. Real Estate Education and Research - Page 777 Mr. Steele reviewed page 7 of Exhibit C outlining the adjustments the joint subcommittee recommends. Real Estate Investigative Fund - Page 781 Real Estate Recovery Account - Page 783 Manufactured Housing Fund - Page 787 Mobile Home Parks - 793 Mr. Steele testified the joint subcommittee suggests closing the budgets as recommended by the Governor. Lot Rent Trust Subsidy - Page 799 Mr. Steele reviewed the concerns and recommendations of the joint subcommittee as outlined on page 12 of Exhibit C. Manufactured Housing Education/Recovery - Page 803 Commission for Hospital Patients - Page 823 Mr. Steele testified the joint subcommittee recommends closing the budgets as recommended by the Governor. Energy Conservation - Page 827 Mr. Steele highlighted that technical corrections, outlined on page 15 of Exhibit C, have been made to the budget. He indicated the recommendation of the joint subcommittee is to close the budget in accordance with the recommendations of the Governor. Senator Raggio denoted Senate Bill (S.B.) 179 has not been processed and can affect this budget. SENATE BILL 179: Establishes state energy office and makes various other changes relating to energy conservation. He clarified, "If we close this in accordance with these adjustments, it could be reopened in the event we process that measure." Housing Division - Page 833 Mr. Steele reviewed the recommendations of the joint subcommittee on page 16 of Exhibit C. Low Income Housing Trust Fund - Page 841 Mr. Steele articulated the adjustments made to the budget, as profiled on page 17 of Exhibit C. Senator Raggio requested clarification of how the Housing Division will distribute funds, since the Welfare Division has rejected performing the distribution. Mr. Steele responded, "The Housing Division will distribute the funds for energy assistance programs without going through the Welfare Division." Senator Raggio inquired if the transfers will be to nonprofit and private entities and Mr. Steele answered in the affirmative. Plant Industry - Page 845 Reviewing page 18 of Exhibit C, Mr. Steele highlighted the adjustments recommended by the joint subcommittee. Grade & Certification of Agricultural Products - Page 851 Alfalfa Seed Research - Page 855 Mr. Steele relayed the joint subcommittee suggests closing the budgets in accordance with the recommendations of the Governor. Agriculture Registration/Enforcement - Page 857 Other than one small adjustment described on page 21 of Exhibit C, the joint subcommittee suggests closing the budget as recommended by the Governor. Apiary Inspection - Page 863 Mr. Steele stated the joint subcommittee recommends closing the budget as recommended by the Governor. Livestock Inspection - Page 865 Mr. Steele reviewed the adjustments recommended by the joint subcommittee on page 23 of Exhibit C. Senator Coffin requested justification for the elimination of the full-time District Brand Inspector position. Mr. Steele stated the administrator of the division recommended eliminating that position due to budget shortfalls. Senator Coffin expressed concern as to what recourse the current incumbent will have in obtaining other employment. Senator Rhoads revealed that many communities use part-time brand inspectors. Senator Coffin inquired whether the position recommended for elimination is currently filled or whether it is vacant. Deb Erickson, Budget Analyst, Budget Division, Department of Administration, clarified the position is currently filled. She summarized: There was...a lot of concern about how much reserve was remaining in that particular budget account and the discussion about the issue centered on the fact that their costs remained constant and their fees were declining. What they were trying to do is reduce their costs and this was a way of doing that. They still continue to have the coverage by having their seasonal brand inspectors that are throughout the state. Senator Coffin said, "Anytime someone is about to be removed from a job by a legislative action, it concerns me. I want to make sure we know what we are doing." He inquired whether the Budget Division is in agreement with the proposed elimination of the position. Ms. Erickson reported the Budget Division supports the division's request to eliminate the position based upon the expenses incurred versus the revenue. Senator Coffin raised the question, "What is the result of this for that person...Can they...just move down and bump somebody else in the process?" Ms. Erickson indicated the person currently occupying the position will have remedies available through the State Department of Personnel. Mr. Steele pointed out the proposal to eliminate the District Brand Inspector position was proposed by the livestock inspection division in order to address the budget concerns within the division. Veterinary Medical Services - Page 869 Insect Abatement - Page 873 Rural Rehabilitation Trust Fund - Page 875 Mr. Steele highlighted the recommendation of the joint subcommittee which is to close these budgets as recommended by the Governor. Gas Pollution Standards - Page 879 Reviewing the recommendation of the joint subcommittee, Mr. Steele referred to page 27 of Exhibit C. Predatory Animal & Rodent Control - Page 883 Grazing Board - Page 889 Woolgrowers Predatory Animal - Page 891 Division of Minerals - Page 895 Mr. Steele pointed out the recommendation by the joint subcommittee is to close the budgets as recommended by the Governor. Minerals - Reclamation Bond Pool - Page N/A Mr. Steele reminded the committee this budget account is not contained in the present Executive Budget. The adjustments to the account will "record the bond pool activity into the state's budgetary system...this will not change the Executive Budget or the reclamation bond pool budget. It was only done to improve accountability and budgetary control," Mr. Steele commented. Senator Rawson requested assurance that establishment of this account will not "change our bond ratings or the amount of indebtedness the state has in any way." Mr. Steele stated, "It does not actually change the amount. Previously, the potential liability we had was not recorded in the state system...." Senator Rawson queried if it will lessen the state's borrowing capacity. Mr. Steele responded in the negative and clarified it may constitute a potential liability as the state will assume the role of surety agent. Athletic Commission - Page 903 Mr. Steele reviewed the recommendations of the subcommittee contained on page 34 of Exhibit C. Senator Rawson inquired whether attorney general services are assigned to the division. Mr. Steele commented the attorney general's office will provide services to the division at no charge since the division is funded with General Fund appropriations. Senator Rawson asked if the division requested independent counsel. Mr. Steele answered in the negative. Nevada Beef Council - Page 913 Mr. Steele commented on the technical adjustment to the budget as described on page 35 of Exhibit C. Employees Management Relations Board - Page 923 Nevada Junior Livestock Show Board - Page 927 High School Rodeo Association - Page 931 Mr. Steele identified the joint subcommittee recommends actions to close the budgets in accordance with the Governor's recommendations. Office of Protection and Advocacy - Page 933 Mr. Steele informed the committee the joint subcommittee recommends closing the budget according to the Governor's recommendations to privatize the division. He reviewed the circumstances surrounding the privatization as outlined on page 39 of Exhibit C. Senator Raggio declared that he will abstain from voting on this budget account due to a potential conflict. Mentally Ill Individuals Program - Page 937 Mr. Steele indicated this budget account was previously contained in the Office of Protection and Advocacy budget. Senator Raggio declared that he will also abstain from voting on this budget account due to a potential conflict. Rural Housing - Page 941 Mr. Steele revealed the joint subcommittee recommends closing the budget in accordance with the Governor's recommendations. He informed the committee that if Assembly Bill (A.B.) 35 is passed, this budget account will no longer be necessary. ASSEMBLY BILL 35: Reorganizes Nevada rural housing authority. Senator Raggio noted: I think any action we take should reflect that with respect to this budget, if A.B. 35 is ultimately enacted, then our action...would be contingent upon that. In other words, the budget would not be necessary, it would no longer be a state agency. Sheep Commission - Page 945 Mr. Steele specified the joint subcommittee recommends closing the budget pursuant to the Governor's recommendation. Senator Raggio articulated that a bill draft has been requested which will alter the state cost allocation with respect to this budget. He suggested the committee should withhold from closing the budget at this time. Senator Rawson questioned whether the budget can be closed with a contingency that it may be reopened pending the outcome of the proposed legislation. Senator Raggio agreed. Taxicab Authority - Page 949 Mr. Steele referred to page 43 of Exhibit C and outlined the recommendations of the joint subcommittee to close the budget as recommended by the Governor with an additional adjustment. Senator Raggio solicited a vote by the committee to close the referenced budgets in accordance with the recommendations of the joint subcommittee. SENATOR RAWSON MOVED TO CLOSE THE BUDGETS IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE, WITH THE CONTINGENCY THAT THE BUDGETS ON ENERGY CONSERVATION, RURAL HOUSING AND SHEEP COMMISSION, CAN BE REOPENED PENDING THE OUTCOME OF PROPOSED LEGISLATION. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE. SENATOR RAGGIO ABSTAINED FROM VOTING ON THE BUDGETS FOR OFFICE OF PROTECTION AND ADVOCACY, AND MENTALLY ILL INDIVIDUALS PROGRAM.) ***** Board of Accountancy - Page 2061 Board of Architecture - Page 2065 Barbers' Health and Sanitation Board - Page 2071 Board of Certified Shorthand Reporters - Page 2073 Board of Chiropractic Examiners - Page 2077 Board of Cosmetology - Page 2087 Board of Dental Examiners - Page 2091 Board of Dispensing Opticians - Page 2095 Board of Examiners in Veterinary Medicine - Page 2097 Board of Funeral Directors, Embalmers & Operators - Page 2101 Board of Hearing Aid Specialists - Page 2103 Board of Homeopathic Medical Examiners - Page 2105 Board of Landscape Architects - Page 2109 Liquefied Petroleum Gas Board - Page 2111 Board of Marriage and Family Therapists - Page 2115 Board of Medical Examiners - Page 2117 Board of Nursing - Page 2121 Board of Long Term Care Administrators - Page 2125 Board of Occupational Therapy - Page 2127 Board of Optometry - Page 2129 Board of Oriental Medicine - Page 2131 Board of Osteopathy - Page 2133 Board of Pharmacy - Page 2135 Board of Physical Therapy Examiners - Page 2139 Board of Public Health Sanitarians - Page 2145 Board of Registered Engineers and Land Surveyors - Page 2151 Board of Social Worker Examiners - Page 2151 Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, set forth the Fiscal Analysis Division recommends actions to close the budgets as recommended by the Governor. Senator Rawson advised the chairman that although he is a licensed dentist, he will vote on the Board of Dental Examiners budget. SENATOR RHOADS MOVED TO CLOSE THE BUDGETS AS RECOMMENDED BY THE GOVERNOR. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE. SENATOR RAGGIO ABSTAINED FROM VOTING ON THE BOARD OF DENTAL EXAMINERS BUDGET. SENATOR MATHEWS ABSTAINED FROM VOTING ON THE BOARD OF NURSING BUDGET.) ***** Board of Audiology & Speech Pathology - Page 2069 Senator Raggio requested the Budget Division to comment on the memorandum dated March 22, 1995 (Exhibit D). Jere Schultz, Budget Analyst, Budget Division, Department of Administration, explained the Board of Audiology & Speech Pathology plans to increase their fees to the maximum amount allowed by statute in the coming biennium. He advised the committee the board plans on holding a public meeting some time in June 1995 regarding the increase. SENATOR JACOBSEN MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR, AND IN ACCORDANCE WITH THE BUDGET DIVISION'S RECOMMENDED ADJUSTMENTS CONTAINED IN EXHIBIT D. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) ***** State Board of Podiatry - Page 2141 Referring to page 45 of Exhibit C, Mr. Steele testified the adjustment to the budget "Merely reflects an adjustment requested by the Board of Podiatry to reflect the Fiscal Year (FY) 1995 work program in lieu of the 1994 base year figures...recommended by the Governor." Mr. Schultz assured the committee the Budget Division concurs with the recommended adjustment to the budget. SENATOR JACOBSEN MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR, AND IN ACCORDANCE WITH THE RECOMMENDED ADJUSTMENT CONTAINED ON PAGE 45 OF EXHIBIT C. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) ***** Nevada Council on the Arts - Page 455 Bob Guernsey, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reviewed the technical adjustments and policy decisions contained in the Budget Closing Action sheets (Exhibit E). Senator Rawson proposed establishing an account for the council which would enable the council to accept gifts, grants and donations in order to increase their Challenge Grant funds. He testified the establishment of the account will eliminate the need to revert the unused grant funds to the state. Senator Raggio clarified the budget office recommends the agency be allowed to carry forward the Challenge Grant funds for 3 years. Mr. Guernsey said: That is correct, and...any of those funds remaining after the conclusion of 3 years, then revert to the state General Fund. There are other appropriated funds which support activities of this budget, which would revert as would be the normal activity with any other General Fund account. Senator Rawson commented: But this is a fund that, because it is a Challenge Grant, it has the promise of bringing significant money in to support the arts and it would be of little state cost if we were to create that as...a trust fund...they could use other sources...all of which could be used as Challenge Grants. The potential of that could be very impressive... Mr. Guernsey reminded the committee the Challenge Grants contain matching requirements. Susan Boskoff, Executive Director, Nevada State Council on the Arts, Department of Museums, Library and Arts, explained, "This is the Challenge Grant program where we require $3 new to every $1 committed...we do allow a 3 year period because this is a sizeable amount of money that these organizations are raising." She asked Senator Rawson if his proposal meant "that the money would stay there [in the account] and we [the council] could also look at other foundations...to solicit funds to enhance that amount?" Senator Rawson answered in the affirmative and clarified the funds can be deposited into an interest bearing trust fund with the treasurer's office. Ms. Boskoff declared her support of any programs that will increase the amount of funds the council can make available to the community. Senator Raggio suggested approving the budget with the proposed adjustments, which will provide the council with ample time to investigate Senator Rawson's proposal before the next legislative session. Mr. Guernsey reviewed the second policy decision, as outlined on page 2 of Exhibit E. He said, "I am not recommending any changes at this point and time, I am just bringing it to your attention." Senator Raggio inquired whether making an adjustment to the budget in this biennium, as suggested by the fiscal division, would affect the structure of the budget in the 1997-1998 biennium. Mr. Guernsey responded, "It really would not, at that point, because it would all roll up into the base." Senator Raggio declared that it will not be necessary to adjust the budget to resolve the conflict, as described on page 2 of Exhibit E. SENATOR RHOADS MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS CONTAINED IN EXHIBIT E, INCLUDING AUTHORIZATION TO ALLOW THE COUNCIL ON THE ARTS TO CARRY FORWARD CHALLENGE GRANT FUNDS FOR A PERIOD OF 3 YEARS. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) ***** Senator Raggio requested introduction of Bill Draft Request (BDR) 38-816. BILL DRAFT REQUEST 38-816: Revises provisions governing eligibility for coverage for long- term care under state plan for assistance to medically indigent. SENATOR JACOBSEN MOVED FOR COMMITTEE INTRODUCTION OF BDR 38-816. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) ***** Determining that no further business remained, Senator Raggio adjourned the meeting at 5:20 p.m. RESPECTFULLY SUBMITTED: Cristin Buchanan, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance May 10, 1995 Page