MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session June 12, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Monday, June 12, 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 GUEST LEGISLATORS PRESENT: Assemblyman Lynn Hettrick, Assembly District No. 39 Assemblyman Dennis L. Allard, Assembly District No. 20 STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Pamela Jochim, Committee Secretary OTHERS PRESENT: John P. Comeaux, Director, Department of Administration Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration Gary Crews, Legislative Auditor, Audit Division, Legislative Counsel Bureau John E. Neill, Chief, Fiscal Services, Department of Prisons Birgit K. Baker, Administrative Services Officer IV, Department of Business and Industry Joan Buchanan, Administrator, Real Estate Division, Department of Business and Industry Tracy Raxter, Chief, Administrative Services Division, Department of Administration Senator Raggio opened the meeting and noted a copy of Bill Draft Request (BDR) R- 2134 has been distributed to the committee. After the parole and probation meeting on June 8, 1995, he requested a BDR to authorize an interim study of the Division of Parole and Probation. BILL DRAFT REQUEST R-2134: Directs Legislative Commission to conduct interim study of system of parole and probation within the State of Nevada. The chairman explained the study will review and evaluate the standards used for determining whether an offender is eligible for parole or probation. In addition, the study will evaluate the supervision of offenders released on parole and probation and perform an analysis of qualifications of members of the State Board of Parole Commissioners. Furthermore, the study will consider methods necessary to improve communications between the State Board of Parole Commissioners, the Division of Parole and Probation, local law enforcement agencies and other personnel who supervise parolees. Also, the study will conduct an analysis of how the rate of parole or probation is affected by budgetary limitations and determine data processing needs for the Division of Parole and Probation. The chairman pointed out an advisory committee will be assisting the Legislative Commission with the interim study. Senator Rhoads remarked the language in the BDR indicates two committees will be studying this subject, but it is his understanding that only one committee will be involved in the study. Senator Raggio clarified the interim study committee membership will consist only of legislators. SENATOR O'DONNELL MOVED FOR COMMITTEE INTRODUCTION OF BDR R-2134. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS COFFIN AND RAWSON WERE ABSENT FOR THE VOTE.) * * * * * Senator Raggio turned the committee's attention to Bill Draft Request (BDR) 40-2132. BILL DRAFT REQUEST 40-2132: Eliminates office of coordinator of program for substance abuse education, prevention, enforcement and treatment. SENATOR JACOBSEN MOVED FOR COMMITTEE INTRODUCTION OF BDR 40-2132. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS COFFIN AND RAWSON WERE ABSENT FOR THE VOTE.) * * * * * Senator Raggio invited Assemblyman Lynn Hettrick, Assembly District No. 39, to come forward and testify on Assembly Bill (A.B.) 389. ASSEMBLY BILL 389: Revises provisions governing payment of expenses of offenders incarcerated in state prison. Mr. Hettrick explained A.B. 389 has been proposed due to testimony the Assembly Committee on Ways and Means received from the Department of Prisons regarding inmate expenses. The bill will allow the department to assess an offender's account or the Offenders' Store Fund for costs incurred by the department on behalf of the inmate for medical costs, transportation costs, funeral costs, costs incurred when the inmate is released, and various other expenses incurred by an inmate. Additionally, Mr. Hettrick pointed out Nevada Revised Statutes 209.225 will be amended to provide that an offender does not have a right to any interest or income which accrues on the funds in the Offenders' Store Fund. This legislation is estimated to save the General Fund $226,000 a year over the next biennium, but it is his belief these changes will save approximately $600,000 per year. He pointed out the measure is not punitive towards the inmates because fees are paid into the Offenders' Store Fund from services purchased by the inmates. Senator Jacobsen asked if there was any language in the bill which addressed the purchase of recreational equipment. Mr. Hettrick replied the legislation does not address the issue of recreational equipment, but it does cover injuries occurring during recreational activities. Senator Raggio closed the hearing on A.B. 389 and opened the hearing on Assembly Bill (A.B.) 24. ASSEMBLY BILL 24: Retains existing provisions regarding office of internal audits. Assemblyman Dennis L. Allard, Assembly District No. 20, came forward and testified while reading from prepared text (Exhibit C). Gary Crews, Legislative Auditor, Audit Division, Legislative Counsel Bureau, stated the Office of Internal Audit was created during the 1993 Legislative session with the mandate to assist agencies in developing internal controls. However, the office experienced some problems during the last biennium and was unable to fully carry out this function. As required in A.B. 24, the Audit Division will provide input to the office in its development of a basic course in bookkeeping and management. He said the success of the program will be determined by how the program is executed. Senator Jacobsen stressed an audit should be made public once it is completed. Mr. Allard interjected the Office of Internal Audits will not be conducting audits in the future, but will be training agency personnel in basic internal controls and bookkeeping skills. Mr. Crews clarified the new legislation does not authorize the office to perform audits and prohibits it from conducting investigations. Senator Rhoads questioned whether the fiscal note will remain the same for the audit office. Mr. Allard replied, "Yes sir, it is." John P. Comeaux, Director, Department of Administration, commented the administration and the Legislature established the Office of Internal Audits to achieve improvement in the financial management practices of the various state agencies. He said A.B. 24 implements a program which will accomplish the exact same thing, but takes a different approach to the problem. Instead of conducting audits focused on systems of internal control, the office will determine which agencies are most in need of assistance and conduct a training program with the personnel responsible in each agency for financial management. In addition, if it is determined accounting procedures need to be changed or updated, then the office will provide assistance in this area too. Senator Raggio asked if the language in the second reprint of A.B. 24 is acceptable to the Budget Division. Mr. Comeaux responded, "Yes it is." The chairman questioned if the present administrator for the office meets the qualifications set out in section 2 of the bill. Mr. Comeaux answered, "She more than meets these qualifications." Senator Raggio closed the hearing on Assembly Bill 24 and opened the hearing on Senate Bill (S.B.) 198. SENATE BILL 198: Makes appropriation to department of prisons for replacement of various equipment. John E. Neill, Chief, Fiscal Services, Department of Prisons, testified S.B. 198 appropriates $2,557,834 to the Department of Prisons to replace old and deteriorated equipment and purchase computer hardware and software equipment. He related, in the past, equipment needs were placed in individual budgets, however, this session equipment requests have been placed in a one-shot appropriation request. Senator Raggio noted the committee has been provided a list of equipment (Exhibit D) which will be purchased with the one-shot appropriation. Mr. Neill pointed out approximately $610,000 is included in the appropriation for computer hardware and software equipment and funding for a new personnel automation system. He referred the committee to pages 18 and 20 of Exhibit D and explained page 18 depicts the Governor's expenditure recommendations and page 20 outlines suggested expenditure levels. The personnel automation system, which is expected to cost $343,676, is vitally important to the department because, currently, the agency has no method to track personnel training, shift assignments, officer availability, and certifications of Peace Officers Standards Training (POST). He said the tracking system is utilized by several other Western states and it is anticipated it will reduce overtime demands of Correctional Officers by 50 percent, as well as provide more efficient scheduling of staff on an around-the-clock basis. The department estimates the personnel tracking system can save the state up to $1 million per year. In addition, he related the appropriation will provide funding to automate the budget process. Presently, the department's budgets take Mr. Neill approximately 18 months to develop because the budgets are manually calculated and typed into a Lotus program. Also, $18,198 will be utilized to purchase computer workstations so the inmate population can be more efficiently tracked. Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, turned the committee's attention to page 19 of Exhibit D and noted the department is requesting $290,500 to purchase a 44 passenger bus. He indicated the department already operates one bus for inmate transportation. Mr. Neill contended the inmate bus is extremely cost-efficient and explained the bus only costs 49-cents a mile to operate while van costs are more expensive. He clarified the new bus will not be replacing the bus currently utilized by the department. Due to the opening of new facilities and prison expansion, another bus will be needed to transport inmates. Senator Jacobsen noted the department will be using a portion of the appropriation to purchase a forklift and asked if the department has contacted the Purchasing Division's Excess Property Program for this item. Mr. Neill replied the department does utilize the Excess Property Program, but has not contacted them regarding a forklift. Senator Jacobsen remarked he has requested a bill requiring agencies to include within their annual inventory a report listing all the equipment and property the agency uses seasonally or intermittently which may be available to other agencies for a rental fee. Senator Raggio requested Mr. Neill to contact the Excess Property Program to see if any of the department's equipment requests can be purchased from surplus property. Mr. Neill answered, "We will be happy to do that." Senator Raggio closed the hearing on S.B. 198 and opened the hearing on Assembly Bill (A.B.) 239. ASSEMBLY BILL 239: Makes appropriation to department of prisons for maintenance and minor construction projects. Mr. Neill distributed a handout (Exhibit E) to the committee outlining the projects proposed by A.B. 239. He indicated the appropriation provides for a number of small construction projects which will not be handled by the State Public Works Board. The Governor's revised budget recommended $622,006 to fund the projects, however, after reviewing the projects, the Assembly Committee on Ways and Means recommended funding certain projects related to inmate recreation from the Offenders' Store Fund which reduced the recommendation to $553,224. Due to the failure of the sewage system at the Humboldt Conservation Camp, $266,000 will need to be expended for replacement of the septic tank and leach field. He commented the State Public Works Board will oversee this project. Senator Raggio closed the hearing on A.B. 239 and opened the hearing on Assembly Bill (A.B.) 221. ASSEMBLY BILL 221: Makes appropriation to real estate division of department of business and industry and to employee-management relations board for certain office equipment. Joan Buchanan, Administrator, Real Estate Division, Department of Business and Industry, came forward and distributed two handouts (Exhibit F, Memorandum regarding telephone system request; Exhibit G, Memorandum regarding computer equipment and software requirements) to the committee. Ms. Buchanan pointed out only section 1 of the bill pertains to the Real Estate Division and explained the appropriation provides $31,730 to the division for an upgrade of its telephone and computer systems. She indicated the telephone upgrade will cost $18,500 and provide 12 incoming lines for the Las Vegas office, with self-directed calling features and voice mail capabilities. A survey performed by the telephone company in November 1994 indicated 64.4 percent of the telephone calls made to the division do not go through because the telephone lines are busy. In addition, $13,230 is requested for three new computers and six computer upgrades, with associated software and hardware. Ms. Buchanan said the computer upgrades will enable the division to communicate between its offices in a more cost efficient manner. In reference to the self-directed telephone system, Senator Raggio asked whether the general public telephoning the division will hear a "live" voice at some point or a computerized message. Ms. Buchanan answered one employee will be assigned to respond to calls for the division's licensing section, compliance section, and administrative section. Senator Coffin noted six computers will be upgraded from a 286 to a 486 Central Processing Unit at $300 per upgrade and questioned Senator O'Donnell if it would be more reasonable to purchase new 486 computers. Senator O'Donnell explained, some computers can be upgraded relatively easy by unplugging the "mother board" and replacing it with a "486 mother board." Ms. Buchanan pointed out Exhibit G details the division's computer and software needs. Birgit K. Baker, Administrative Services Officer IV, Department of Business and Industry, stated section 2 of A.B. 221 provides $877 to the Employees-Management Relations Board for a new fax machine. The board previously utilized a fax machine in the Governor's office in Las Vegas, but the office has moved its operations and the agency no longer has access to a fax machine. Senator Raggio closed the hearing on A.B. 221 and opened the hearing on Assembly Bill (A.B.) 229. ASSEMBLY BILL 229: Makes appropriation to office of governor for computer equipment and software. Mr. Comeaux testified the bill appropriates $67,220 to the Governor's Office for a "needs assessment" by the Department of Information Services and to upgrade data processing hardware and software. The appropriation will also provide a computerized tracking-retrieval system, E-mail and replacement of some existing data processing equipment. Senator O'Donnell requested more detail on the requested equipment. Senator Raggio stated the bill will be held until the committee receives more information on the equipment request. Senator Raggio closed the hearing on S.B. 229 and opened the hearing on Assembly Bill (A.B.) 430. ASSEMBLY BILL 430: Revises provisions governing operating fund of Department of Administration. Tracy Raxter, Chief, Administrative Services Division, Department of Administration, stated A.B. 430 corrects inconsistencies created by the Executive Branch reorganization during the 1993 Legislature. Mr. Raxter related, presently, all divisions within the Department of Administration, except the Hearings Division, the Risk Management Division, and the Office of Internal Audits provide funds to support the Administrative Services Division. A.B. 430 corrects this oversight and requires these three budgets to provide their share of the operating costs effective July 1, 1995. He noted if A.B. 24 is passed, then A.B. 430 will need to be amended by deleting any reference to Office of Internal Audits and replacing it with Office of Financial Management, Training and Controls. The chairman closed the hearing on A.B. 430 and turned the committee's attention to Amendment No. 735 to Senate Bill (S.B.) 426. SENATE BILL 426: Creates fire service standards and training committee. Senator Raggio noted the bill was originally heard on May 31, 1995, with the committee voting to amend and do pass. He asked the committee to review the amendment and if it meets with the committee's approval Amendment No. 735 will be submitted with S.B. 426 with a recommendation to do pass as amended. Senator Raggio stated the committee will now take action on the bills heard earlier in the meeting. Mr. Miles interjected S.B. 198 should be held until the Department of Prisons can thoroughly review the suggested funding revisions. The chairman turned the committee's attention to A.B. 24. SENATOR JACOBSEN MOVED TO DO PASS A.B. 24. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * In reference to A.B. 221, Senator O'Donnell disclosed he is a licensed real estate broker and indicated the bill will not affect his income or his relationship with the real estate board so he will be voting on the measure. SENATOR COFFIN MOVED TO DO PASS A.B. 221. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * SENATOR O'DONNELL MOVED TO DO PASS A.B. 239. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * SENATOR JACOBSEN MOVED TO DO PASS A.B. 389. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * SENATOR RHOADS MOVED TO AMEND AND DO PASS A.B. 430. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio referred the committee to page 1 of the Budget Closing Action Packet (Exhibit H). Office of the Governor - Page 1 The chairman pointed out the budget includes three new classified positions, however, the committee has not taken any action on unclassified positions. SENATOR COFFIN MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Mansion Maintenance - Page 5 Senator Jacobsen distributed a handout (Exhibit I) detailing replacement costs in the amount of $14,812.13 for china, crystal, tables, washer, dryer, and an icemaker. He recommended that this amount be added to the budget. SENATOR COFFIN MOVED TO AMEND AND CLOSE THE BUDGET WITH THE ADDITIONAL COSTS AS OUTLINED IN EXHIBIT I. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Commission on Women - Page 11 Mr. Miles commented the commission is scheduled to expire on July 1, 1995, however, the Assembly Committee on Ways and Means introduced Assembly Bill (A.B.) 116 which deletes the sunset. He explained the Assembly Committee on Ways and Means has closed this budget without any appropriations from the General Fund, but has provided a $10,000 one-shot appropriation in A.B.116 for the commission. ASSEMBLY BILL 116: Repeals prospective expiration of statute creating Nevada commission for women. Senator Raggio asked how the $10,000 will be expended. Mr. Miles responded the funds will be utilized for travel and meeting expenses. Senator Mathews said the commission becomes an unfunded mandate if it is not provided sufficient funds to operate. She remarked she was a member of the commission and stressed it is crucial that the commission be properly funded so it can continue to function. She supports the Governor's recommended budget for the commission. Senator Coffin suggested the funding be kept in the budget at a reduced amount, instead of a one-shot appropriation. Senator Rhoads stated he is against providing any funds to the commission. Senator Raggio noted the commission was originally approved with the understanding no state funds would be forthcoming. The chairman commented Senator Rawson is interested in this issue, so the budget will be held until he is available to vote on the measure. Ethics Commission - Page 13 SENATOR COFFIN MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Science, Engineering & Technology - Page 17 Mr. Miles explained the committee has processed a bill which will allow the science advisor to have outside interests. The budget is funded through federal funds and donations. Senator Jacobsen noted the office was established by the 1993 Legislature and asked what is the present status of the office. Senator Raggio said the administration has experienced some difficulties in recruiting a person with the experience and qualifications required for the position. He explained a salary of $85,000 has been proposed, and in order to recruit someone with such high qualifications, the person who fills the position will be allowed to pursue other interests. Senator Mathews expressed her disapproval of allowing the science advisor to have outside contracts. She related $85,000 in wages plus fringe benefits should provide an individual with enough compensation to work solely for the State of Nevada. The chairman remarked the individual filling this position will be allowed to pursue outside contracts because the salary offered by the state is inadequate for an individual with the qualifications the state is seeking. Presently, the state has other employees who are allowed to have contracts outside of their state employment. Mr. Comeaux mentioned the individuals contacted by the Governor's Office for this position are already earning six-figure incomes, so the individual filling the position would have to take a large decrease in salary unless allowed to perform outside consulting. SENATOR RHOADS MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATION. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN VOTED NO.) * * * * * Lieutenant Governor - Page 19 Senator Raggio remarked the Lieutenant Governor submitted a revised budget to the committee on March 27, 1995, which included a budget increase of $133,690 for Fiscal Year (FY) 1996 and $117,693 for FY 1997. Mr. Miles reviewed the budget enhancements as listed on page 6 of Exhibit H. The chairman pointed out the Assembly Committee on Ways and Means has accepted the equipment request of two computers and a copier for a cost of $9,000 for the biennium. In reference to the Lieutenant Governor's request for $53,252 in each year of the biennium for Education Outreach, Senator Raggio indicated the request is for one full-time contract position or two part-time positions to be filled by University of Nevada personnel. He pointed out approval of the program was requested pending the Legislature's action regarding combining the Division of Tourism and the Division of Economic Development. The program has been favorably received by both of these divisions and the regional development authorities. Senator Rawson commented the Lieutenant Governor is a constitutional officer, so therefore, the committee should not interfere with the Lieutenant Governor's budget. He supports the Education Outreach program and indicated a similar program is already successfully operating in northern Nevada. Senator O'Donnell indicated he would like to keep the program in the Lieutenant Governor's budget. Senator Jacobsen remarked he would like to receive more justification for the program. Senator Raggio asserted it is too late in the process to hold another hearing on the subject. The chairman questioned if the committee supports funding for a Host Account in the amount of $5,000. Senator Coffin related the Lieutenant Governor is concerned about the small amount of funding which has been allotted to In-State Travel and the senator said he supports increasing this account, however, the Host Account is not necessary. Senator Raggio pointed out the increased funding for In-State Travel includes 60 round trips from Las Vegas to Carson City, during the next biennium. Senator Rawson noted the Lieutenant Governor serves year-round and that number of trips is probably acceptable. He expressed his disapproval of funding a Host Account. The chairman asked how much the Executive Budget allowed for In-State Travel. Referring to page 21 of the Executive Budget, Mr. Miles noted funding for In-State Travel totaled $6,141 for FY 1996 and $15,720 in FY 1997. He explained the request in the second year of the biennium is higher because the Legislature will be in session at that time. Senator Raggio suggested the funding for In-State Travel should be decreased because he could not support funding more than one trip per week between Las Vegas and Carson City. He proposed funding half of the amount requested for In-State Travel. SENATOR COFFIN MOVED TO CLOSE THE BUDGET WITH THE FOLLOWING ADJUSTMENTS: INCREASE IN-STATE TRAVEL BY ONE- HALF OF THE AMOUNT REQUESTED ON PAGE 6 OF EXHIBIT H; INCREASE FUNDING FOR EQUIPMENT BY $9,000 FOR FY 1996 AND $1,000 FOR FY 1997; INCREASE FUNDING BY $53,256 IN FY 1996 AND $53,256 IN FY 1997 FOR AN EDUCATION OUTREACH PROGRAM; AND INCREASE FUNDING BY $250 IN FY 1996 FOR INFORMATION SERVICES. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Attorney General - Page 23 Mr. Miles referred the committee to pages 7 through 9 of Exhibit H and noted there have been a number of technical adjustments made to the budget. He explained the first three items under Adjustments to Revenue and the first item under Adjustments to Expenses adjusts the General Fund, agency payments and Board & Commission billings for final Statewide Cost Allocation and Attorney General Cost Allocation. Title XIX revenues and expenses have been deleted due to the transfer of Medicaid Fraud to a separate budget. The capital case coordinator position will be funded with court assessment felony fees. Presently, the Insurance Fraud Unit and the Private Investigator's Licensing Board are located in the attorney general's office, however, the two agencies are not charged for rent. It was determined the agencies should be charged a rental fee which will reduce the attorney general's General Fund request by $9,007 each year of the biennium. Mr. Miles noted Board & Commission Payments have been increased by $34,000 each year of the biennium because of a position transfer. He explained expenses for one-half of one attorney were transferred from the Insurance Fraud account because a number of the position's duties were related to licensing boards and commissions. Revenue from the General Fund was reduced by $91,359 in FY 1996 and Agency Payments were reduced by $66,158 in FY 1996 due to delaying the hiring of new positions until October 1, 1995. All new hires have been delayed except a half-time deputy for Employment, Training and Rehabilitation and a deputy attorney general proposed for the Department of Business and Industry. In addition, an adjustment has been made to delete duplicated fringe benefits for a half- time senior attorney assigned to the Department of Employment, Training and Rehabilitation. Mr. Miles explained $185,000 has been transferred to this budget from other agencies for support positions, travel and operating expenses for attorneys assigned to handle legal work for that particular agency. He indicated this action has been taken to properly allocate legal costs for the state. Some agencies are concerned existing statutory language in Nevada Revised Statutes 228.115 will allow the attorney general to continue to charge the agencies for certain costs even though the funds have already been transferred into the attorney general's budget, remarked Mr. Miles. He has spoken with the attorney general's staff about repealing or amending this provision, but staff members indicated the office still needs the authority to collect for Attorney General Cost Allocation. Senator Raggio stated, "If the travel is already transferred into the attorney general's budget, then they should not be asking the agency to pay for travel....Can't we amend that so it is clear you still have the cost allocation and the agency is not being billed twice for travel?" Mr. Miles replied the statute could be amended to indicated that "each agency must pay to the attorney general amounts due pursuant to the cost allocation plan that is in the approved budget." Senator Raggio asked the staff to determine if this amendment could be added to another bill and if not, then a bill draft request will need to be drawn up. SENATOR RHOADS MOVED FOR A BILL DRAFT REQUEST TO AMEND NEVADA REVISED STATUTES 228.15 OR TO ADD THE AMENDMENT TO PENDING LEGISLATION. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Mr. Miles turned the committee's attention to page 8 of Exhibit H and reviewed the 17.5 new positions which were requested by the agency. Senator Raggio interjected a handout (Exhibit J) has been distributed to committee members which outlines the requested positions and provides a justification for the positions. Continuing, Mr. Miles noted, in the Las Vegas office, the duties of the data entry operator and the administrative aide position will be combined, so only one position will now be needed. The office is requesting one Micro Computer Specialist II position for Carson City and Las Vegas, however, the position for Carson City is not recommended because the agency already has two positions in the northern part of the state. It is recommended the half-time student positions for Carson City be deleted because the agency already employs one half-time student position. Mr. Miles indicated the agency is requesting another Supervising Legal Secretary for the Civil Division due to the division's work load, but normally this is handled by the State Personnel Department through a reclassification process. Senator Raggio said it would be more appropriate to have an existing position reclassified as a Supervising Legal Secretary. Mr. Miles indicated position 11 listed on page 8 of Exhibit H is a deputy attorney general position which would be working primarily with Medicaid in collecting public assistance paid to estates of recipients on Medicaid. Senator Raggio indicated he supported this position. Proceeding, Mr. Miles said position 12 is a Legal Secretary II position requested to provide assistance to attorneys handling cases for the Department of Human Resources. Position 13 is a new deputy attorney general for the Nevada Department of Transportation (NDOT). NDOT is requesting an additional attorney to pursue internal industrial insurance claims for the agency, however, the agency already has 15 attorneys assigned to it. He pointed out the request for a Legal Researcher position for the Department of Motor Vehicles & Public Safety does not appear to be justified because of case load factors. Senator Raggio stated, "That is the problem with 13 and 14, the case load does not justify those positions." Mr. Miles mentioned position 15 is a request for a new deputy in Las Vegas in the Civil Division to handle prison and parole and probation cases. Senator Raggio said the case load in Las Vegas warrants another deputy position. Referring to number 16, a request for a Legal Researcher position in Las Vegas, Mr. Miles said the request was made to reduce the need for additional deputy positions. Senator Raggio stated, "Not much of a case was made for that position." Continuing, Mr. Miles said the agency has requested that a half-time senior deputy representing the Department of Employment, Training and Rehabilitation be increased to a full-time deputy. He noted the position has been temporarily filled and indicated the position will be filled permanently on July 1, 1995. For clarification, Senator Raggio said the following positions listed on page 8 of Exhibit H will be eliminated: 1,4,7,10,13,14,16, positions 2 and 3 will be combined, and position 8 will be reduced to one half-time position. Mr. Miles stated Vacancy Savings are budgeted at $112,881 for FY 1996 and $114,481 in FY 1997 which is far below the current year of $230,938. He explained Vacancy Savings are built into the budget because the attorney general hires new unclassified positions at less than the statutory maximum, and if the individual hired for the position works out satisfactorily, then the wages are increased. Senator Raggio suggested an additional $50,000 per year be added to the Vacancy Savings account. He asked Mr. Comeaux if the additional amount was acceptable to the Budget Division. Mr. Comeaux responded, "Yes sir." The chairman commented the agency's request for $75,000 more per year for Westlaw is excessive and suggested the amount be reduced to $40,000 per year. Senator Coffin inquired if the Office of the Attorney General has been given any new programs requiring the office to perform more investigations which will cause research costs to increase. Mr. Miles explained all the fraud units have been transferred out of this budget into their own accounts. The fraud units will have their own funding for Westlaw expenses. In addition, Mr. Miles related the State Board of Nursing on May 12, 1995, requested an additional half-time deputy attorney general be assigned to the board. The Board of Nursing has agreed to increase the board's assessment to the attorney general's office to provide the funding for the position. An adjustment will need to be made to the board's budget to reflect the additional assessment. Senator Coffin asked for clarification regarding position 10 on page 8 of Exhibit H. Senator Raggio answered the position was deleted with the understanding the agency has the authority to request a reclassification for the position. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET WITH THE TECHNICAL ADJUSTMENTS LISTED ON PAGES 7 AND 8 OF EXHIBIT H AND APPROVING POSITIONS 5,6,9,11,12,15,17,18; COMBINING POSITIONS 2 AND 3, AND APPROVING ONLY ONE HALF-TIME STUDENT WORKER FOR LAS VEGAS; VACANCY SAVINGS WILL BE INCREASED BY $50,000 IN EACH YEAR OF THE BIENNIUM; WESTLAW FUNDING WILL BE INCREASED $40,000 IN EACH YEAR OF THE BIENNIUM; AND AN ADDITIONAL HALF-TIME DEPUTY ATTORNEY GENERAL WILL BE ASSIGNED TO THE STATE BOARD OF NURSING. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Tort Claim Fund - Page 31 SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Special Fund - Page 35 Mr. Miles noted a technical adjustment has been made to the budget because Telemarketing litigation expenses have been included in the base budget and category E850. The mistake has been corrected by deleting the expenses from category E850. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS OUTLINED ON PAGE 11 OF EXHIBIT H. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Workers Compensation Fund - Page 37 Mr. Miles pointed out page 12 of the closing packet indicates there are no technical adjustments, however, the Assembly has a bill which includes a one-shot appropriation for new vehicles for the State Motor Pool and included within the new vehicle request are five vehicles for this budget. The Assembly Committee on Ways and Means determined, since the budget is a workers' compensation funded account, the funding for the vehicles should not be provided by the General Fund and recommended the vehicles, which total $56,860, be purchased with funds from this budget. Senator Raggio asked where this adjustment will be reflected in the budget. Mr. Miles explained if the committee chooses to take the same action as the Assembly Committee on Ways and Means, then the expenditure will be reflected as an addition to equipment during the first year of the biennium. Senator O'Donnell commented the state owns the motor pool cars and the State Industrial Insurance System (SIIS) should allocate funds in its budget to rent the cars from the state motor pool because other state agencies will not be able to utilize the vehicles purchased by SIIS. Mr. Miles explained the motor pool provides two kinds of vehicles to state agencies: some motor pool vehicles are supplied to agencies on a day-to-day basis and some are assigned to agencies on a permanent basis. If an agency is assigned a car on a permanent basis, then the agency is assessed a monthly fee and a mileage rate. Because of the state's cost allocation plan, federal regulations prohibit the state from recapturing the initial investment of the vehicle. In the past, the Legislature has typically required agencies who operate with non-General Fund revenues to purchase their own vehicles. Proceeding, Mr. Miles indicated the budget includes nine new position requests which will be funded by assessments on the insurers. Senator Raggio asked when the positions are scheduled to be hired. Mr. Miles responded the new hire date is July 1, 1995. Senator Raggio suggested the positions be adjusted to begin on October 1, 1995. Continuing, Mr. Miles pointed out the attorney general has requested restoration of $4,060 for reference books and $1,200 for cellular telephones for field investigators. SENATOR MATHEWS MOVED TO CLOSE THE BUDGET WITH THE UNDERSTANDING THE HIRING DATE FOR THE NINE NEW POSITIONS WILL BE OCTOBER 1, 1995; AND WITH THE RESTORATION OF $4,060 FOR REFERENCE BOOKS AND $1,200 FOR CELLULAR TELEPHONES; AND THE ADDITION OF $56,860 IN FY 1996 FOR VEHICLE PURCHASES. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio recessed the hearing at 10:25 a.m. The chairman reconvened the committee meeting at 12:15 p.m. and turned the committee's attention to the Telemarketing Fraud budget. Telemarketing Fraud - Page 43 Mr. Miles stated the Joint Subcommittee on General Government has recommended that the Consumer Affairs Division and deceptive trade/telemarketing be funded by the General Fund. In return, all license fees, fines and recoveries will be deposited in the General Fund. He indicated this action will impact the General Fund by $40,018 in FY 1996 and $57,140 in FY 1997. Senator Raggio questioned if this action will provide the fraud unit with adequate funding. Mr. Miles replied the actions taken by the joint subcommittee keeps the fraud unit intact and fully funds the agency. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT AS OUTLINED ON PAGE 13 OF EXHIBIT H. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Medicaid Fraud - Page 47 Mr. Miles related the attorney general's office projects Medicaid fraud recoveries of $225,000 in FY 1996 and $200,000 in FY 1997. Because the funds cannot be reliably projected, recoveries were increased to the level budgeted for FY 1995. Additionally, Mr. Miles noted the committee, in the 1993 session, issued a Letter of Intent requiring all fraud units to report quarterly to the Interim Finance Committee (IFC) on the units activities, case loads, and recoveries. Senator Raggio agreed a Letter of Intent should be reissued requiring the fraud units to continue to report quarterly to the IFC. Senator Rawson interjected he made a notation on his budget page that a Microcomputer Specialist position in the budget should be moved to the Department of Information Services (DIS) and assigned to the attorney general's office if necessary. The senator asked for an explanation as to why the position was being moved. Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration, explained the DIS related positions have been retained in all the attorney general's budgets. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT AS OUTLINED ON PAGE 14 OF EXHIBIT H AND WITH THE ISSUANCE OF A LETTER OF INTENT REQUIRING QUARTERLY REPORTS FROM ALL FRAUD UNITS DETAILING ACTIVITIES, CASE LOADS, AND RECOVERIES. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Insurance Fraud - Page 51 Mr. Miles said one-half of a deputy attorney position has been moved back to the administrative account because the position supports Boards and Commissions half- time. He explained Assembly Bill (A.B.) 331 proposes to transfer insurance fraud responsibilities from the Division of Insurance to the Office of the Attorney General, however, the bill at this point has not been passed. ASSEMBLY BILL 331: Makes various changes relating to investigation of insurance fraud. Mr. Miles noted, if the bill is not processed, the account may need to remain with the Division of Insurance and a new account will be created in the attorney general's budget. Senator Raggio asked what the staff's recommendations are on this matter. Mr. Miles suggested the budget should be closed as it is presented on page 15 of Exhibit H, and the committee should allow the Fiscal Analysis Division and the Budget Division to determine what accounting mechanism would be appropriate if A.B. 331 does not pass. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS OUTLINED ON PAGE 15 OF EXHIBIT H AND WITH THE UNDERSTANDING THE BUDGET DIVISION AND FISCAL ANALYSIS DIVISION MAY NEED TO RESTRUCTURE THE BUDGET ACCOUNT IF A.B. 331 IS NOT PASSED. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Crime Prevention - Page 57 SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Consumer Advocate - Page 65 Mr. Miles pointed out the agency has requested increasing the Assistant Staff Counsel salary from $51,500 to $60,000 due to a high turnover rate. In addition, the agency has asked that Out-of-State and In-State Travel be restored to 1995 budgeted levels. Mr. Hataway mentioned the Budget Division placed the travel funds into a Reserve account and if the agency demonstrates a need for the funds, then the monies will be transferred from the Reserve account. Senator Raggio supported the Budget Division's action regarding travel funds. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Private Investigators Licensing Board - Page 69 Mr. Miles commented the agency is located within the attorney general's office, so an adjustment has been made for rent charges. Furthermore, he remarked Senate Bill 2 reclassifies a Program Officer II position to an unclassified position and, if the bill passes the legislature, then the Budget Division will need to make a "mechanical" change to the budget. SENATE BILL 2: Revises provisions governing licensing of private investigators and related occupations. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE STAFF AS LISTED ON PAGE 18 OF EXHIBIT H. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Controller's Office - Page 73 Senator Raggio noted the committee has received a response from the Budget Division on the issue of transferring the function of the state payroll system from the State Department of Personnel to the Controller's Office. He said the budget will be held until the committee has an opportunity to review and discuss the Budget Division's findings. Secretary of State - Page 77 Mr. Miles referred the committee to page 20 of Exhibit H and reviewed the budget augmentations requested by the Secretary of State's office. He remarked the four new half-time positions will be utilized to operate a second shift in order to keep up with the office's work load. In addition, he pointed out the request for a Business Process Reengineering (BPR), a computer database rewrite, and four new half-time positions will be funded by expedite fees. Mr. Hataway maintained the augmentation to the budget is acceptable to the Budget Division. Senator Coffin said he does not recall receiving a justification for a BPR study and is inclined not to support the request. Mr. Hataway explained the Secretary of State, Dean Heller, initially did not include the BPR study in the budget because he thought the audit being conducted by the Audit Division of the Legislative Counsel Bureau would be completed before the session ended. However, the audit will not be completed in time, so he is requesting funding for a BPR study. Because the study will be funded by special services funds and not an appropriation from the General Fund, the Budget Division supports the study. If the study is not approved during the session, then the office will have to approach the IFC with a Work Program to transfer the fund. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET WITH THE INCLUSION OF THE BUDGET AUGMENTATIONS REQUESTED BY THE SECRETARY OF STATE AS OUTLINED ON PAGE 20 OF EXHIBIT H. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Securities Division - Page 85 Mr. Miles related three of the four new positions requested will be utilized to open a Reno office. He mentioned all the positions are included in the Executive Budget. SENATOR RHOADS MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * State Treasurer - Page 91 Mr. Miles stated the State Treasurer has requested that several items be restored to the budget which were not included in the Executive Budget. The restored items include: Vacancy Savings, surety bond insurance, Bloomberg Investment Database System, and dues for national associations. Senator Raggio asked what the Bloomberg Investment Database System encompasses. Mr. Hataway explained the system provides the treasurer's office with current information and other pertinent analysis for all state investments and issuance of municipal debt. The Budget Division funded one system for southern Nevada, however, the office would also like to have a system in the Carson City office. He noted the treasurer's office did not make it clear in their budget request that two systems were needed. The Budget Division supports the additional system because investment decisions are made in both parts of the state, remarked Mr. Hataway. The chairman asked for an explanation regarding the funding request for dues. Mr. Hataway said the Budget Division recommended that funding for dues be returned to the FY 1995 Work Program level, but the treasurer's office is requesting additional funding. Senator Raggio noted the committee received a memo (Exhibit J) earlier in the session from the State Treasurer which indicated the dues are for the National Association of Auditors, Controllers, and State Treasurers. The chair read the following justification for the expenditure: The State Treasurer was a member of the association in the past, but membership was discontinued during the 1993 budget crisis. Recently, the State Treasurer, Mr. Seale, was appointed to the executive board of the association. Membership in the association provides a vehicle for state representatives to testify at a national level on various issues affecting the state. The chairman questioned what the policy is on Vacancy Savings for budgets of elected officials. Mr. Hataway replied Vacancy Savings are included in the budgets of the Controller's Office and the Secretary of State. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET WITH THE TECHNICAL ADJUSTMENTS AND THE INCLUSION OF BUDGET ITEMS 2, 3, AND 4, AS OUTLINED ON PAGE 22 OF EXHIBIT H. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * There being no further business before the committee, Senator Raggio adjourned the meeting at 1:15 p.m. RESPECTFULLY SUBMITTED: Pamela Jochim, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance June 12, 1995 Page