MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session June 14, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:17 a.m., on Wednesday, June 14, 1995, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Judy Jacobs, Committee Secretary OTHERS PRESENT: John P. Comeaux, Director, Budget Division, Department of Administration Turning to Exhibit C, Senator Raggio declared a need to close the Interim Nevada Legislature budget. Nevada Legislature Interim - Page 161 Dan Miles, Fiscal Analyst, explained Exhibit C depicts the adjustments to the budget that were initially proposed. He noted the first change will increase the amount of group insurance for the staff, and item M-300 includes a pay raise for the chief clerk of the Assembly and the secretary of the Senate. Senator Raggio inquired if an adjustment for an additional position is included. Mr. Miles replied an additional secretarial position was included in the original budget proposal. Senator Jacobsen voiced the opinion it seems unfair for a new chief clerk of the Assembly to come in at a higher salary than the previous clerk. Senator Raggio said the speaker of the assembly indicated the authorization is necessary in order to provide parity between the houses. SENATOR O'DONNELL MOVED TO ADJUST THE BUDGET AS INDICATED ON EXHIBIT C. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio requested consideration of Amendment No. 969 to Senate Bill (S.B.) 224. SENATE BILL 224: Makes various changes regarding preparation of state budget and review of federal mandates and encroachments. Mr. Miles said the draft will amend the bill as a whole, so the draft is actually a new bill. He reviewed the proposed changes section by section. He explained section 2 will require the Legislative Budget Office to prepare a budget for the Legislature, and many of the proposals in sections 2 and 3 are parallel to directives for the Executive Budget. According to Mr. Miles, sections 4 and 5 create a budget subcommittee and set forth its method of appointment, operation procedures, duties, and compensation. Section 6 applies to the handling of the federal mandates by the research division and gives authority for obtaining information, he said. Mr. Miles indicated section 7 will rename the Fiscal Analysis Division and provide funding authority. Most of the remainder of the bill, he said, applies to the name change from "Fiscal Analysis Division" to "Legislative Budget Office." Mr. Miles called attention to new language in section 24 which he indicated may be of interest to the Budget Office. He explained it will allow the two offices to coordinate and compare the Executive Budget with the legislative budget 2 days before the commencement of the legislative session. Senator Jacobsen pointed out the computer equipment used by the Legislative Counsel Bureau (LCB), including the fiscal division, is approximately 20 years old. He suggested it should be assured that any equipment to be used by the new Legislative Budget Office will be compatible with that used by the Budget Office. Senator O'Donnell responded the Legislature will work with the Office of the Governor and the Budget Office to insure the equipment is compatible and that the same format is used for data. SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 224 WITH AMENDMENT NO. 969. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR COFFIN VOTED NO.) * * * * * Senator Raggio invited the committee to review the closing report (Exhibit D. Original is on file in the Research Library.) to be considered in a joint hearing with the Assembly Committee on Ways and Means later in the morning. Mansion Maintenance - Page 5 Senator Raggio noted the committee added amounts proposed by Senator Jacobsen. He recommended that the committee hold on that item. No comments were forthcoming. Lieutenant Governor - Page 19 Senator Raggio recalled the committee added requests made by the Lieutenant Governor. Senator Rawson asserted the committee should support the Lieutenant Governor. Workers Compensation Fraud - Page 37 Mr. Miles explained the Senate Committee on Finance recommended employment of nine new positions be delayed until October 1, 1995, whereas the Assembly Committee on Ways and Means eliminated five of those positions. Senator Raggio proposed the Senate concur with the action of the Assembly. He asked for opinion from other members of the committee. The committee agreed with his proposal. Office - State Treasurer - Page 91 Mr. Miles indicated the committee decided to reinstate funding for the surety bond, the Bloomberg Investment System and dues and registrations, whereas the Assembly reinstated only the Bloomberg Investment System and added vacancy savings. Senator Raggio recalled the committee determined there should be some consistency regarding vacancy savings, which he asserted would indicate the Assembly should concur with the Senate. Legislative Counsel Bureau - page 157 Senator Raggio noted the Senate added funding in E-125 and E-175 for the Legislative Budget Office and the Federal Mandates Analyst. He conjectured the Assembly may wish to concur with the Senate. School of Medical Sciences - Page 305 Mr. Miles pointed out the only difference between the two committees concerns the Residency Program. Senator Rawson commented there is a difference of $3 million, since the Assembly has taken no action to add the funding. Senator Raggio declared further discussion will be necessary. Senator Rawson stated three programs will be cut if no action is taken to add the funding. He said those are the Geriatric Education Center, which needs $120,000; a southern Nevada Area Health Education Center (AHEC); and the Health Service Corps. W.I.C.H.E. Loan & Stipend - Page 385 Senator Raggio opined the recommendations of the administrator should be followed, if possible. He suggested holding the budget until discussion is held regarding the need for physical therapy personnel. Comstock Historic District Commission - Page 427 Senator Raggio suggested the Assembly may be willing to add $6,000 from the Division of Tourism with an authorization to sell brochures for another $6,000, which means the two committees may wish to go with each other. Motor Pool Division - page 519 Motor Pool Vehicle Purchase - Page 525 Mr. Miles said the only difference came about because the Assembly Committee on Ways and Means approved a bill for a one-time purchase of additional automobiles for the motor pool. He noted the bill was recommended in the Governor's budget. He said the Assembly added the anticipated additional revenue and expenses for those additional vehicles, found under item M-201 in both budgets. Senator Raggio suggested the committee may wish to concur with the Assembly Committee on Ways and Means. The committee agreed. Facility Management - Page 631 Mr. Miles pointed out the actual difference can be found on page 6 in item E-911. He explained it deals with communications positions in the Nevada Department of Transportation (NDOT). He said the Senate Committee on Finance retained the nine positions in NDOT, but the Assembly approved a transfer of the positions to the Department of Information Services (DIS). Senator O'Donnell declared it would be a major mistake to transfer those employees and the Senate should maintain its decision to retain the positions in NDOT. Administration - Personnel Division - Page 653 Mr. Miles reported the two committees are actually in agreement, but the budget was included on the closing sheet so that the committees could review the footnotes. He said footnote number 2 has been settled because the assessment has already been recalculated. The business process reengineering (BPR) study remains an issue, he said. He explained both committees took the same action by moving BPR funding into a reserve, and there is no current authority for the BPR to go forward. He noted the Interim Finance Committee (IFC) could allow the study. Senator Raggio asked for the opinion of the committee. Mr. Miles pointed out the budget actions by the two committees are exactly the same, yet neither committee has made a determination regarding the BPR. Senator Raggio proposed that the two committees have a joint meeting to decide which BPRs should be authorized. P S C Regulatory Fund - Page 681 After Mr. Miles explained the only difference in committee actions are in regard to the secretarial position, Senator Raggio proposed there should be further discussion. Advocate for Insurance Customers - Page 731 Mr. Miles noted no action has been taken by the Senate Committee on Finance to restore the budget. Senator Raggio remembered the committee made the determination not to restore the budget, and it approved the Governor's first recommendation. Division of Industrial Relations - Page 737 Mr. Miles pointed out a difference in E-276. He said the Senate Committee on Finance decided to close the budget in accordance with a fiscal note on S.B. 458. SENATE BILL 458: Makes various changes to provisions relating to industrial insurance. He explained it will create seven new positions for the purposes of serving the group self-insurers which will be coming on line, for the three-way insurance expected in about 2 years, for increases in the complaint process, and for increased paperwork and computer systems. Senator Raggio said members of the Assembly Committee on Ways and Means have indicated they have not had an opportunity to analyze the effects of S.B. 458. Attorney for Injured Workers - Page 907 Senator Raggio commented the budget was included in the discussion regarding S.B. 458 and as a result the Senate added some positions. Mr. Miles stated the committee added one attorney on each end of the state along with secretaries, and two more attorneys were added to the reserve because there was some concern that the IFC will find the caseload has grown before the budget has been totally augmented. Economic Development - Page 955 Mr. Miles noted the difference lies in the two program specialists and associated costs added by the Senate. Division of Tourism - Page 961 According to Mr. Miles, one remaining difference between the committees includes the transfer to the Comstock Historic District Commission. He said, "If you agree on the previous budget on the brochures, then this would be automatically taken care of." Mr. Miles added the Senate Committee on Finance determined the $300,000 request for emergency contingency funds in E-350 should be placed into reserve, which will then require that a work program document be processed before the division may obtain access to the funding. Senator Raggio repeated his endorsement of the requirement that a work program approval must be obtained before contingency funds are released. Purchase of Social Services - Page 997 Senator Raggio noted the Assembly Committee on Ways and Means added $250,000. Mr. Miles stated there were some excess Title XX funds that were not budgeted from the carry-forward. He recalled the Senate Committee on Finance reserved $50,000 per year of those funds for a reserve for salary adjustments for the positions that are presently supported by Title XX. He added the committee placed the remainder into the non-state agency category for outside agencies. He said the Assembly allocated all of the excess into the outside agencies, and recommended a General Fund one-time appropriation of another $250,000. Senator Raggio asked how much the total will be. Mr. Miles replied, "They're adding $131,000 the first year and $115,000 the second year ... plus the $253,000." He calculated the total will come to approximately $500,000 over the biennium. He said the Senate Committee on Finance added $81,000 and $65,000 in the 2 years of the biennium, and allocated $100,000 to the reserve for salary increases. Senator Raggio inquired how the Assembly provided for salary increases. Mr. Miles answered they will have to be provided through the General Fund. Senator Raggio proposed holding the budget. Senator Rawson asked Mr. Miles what problems could be anticipated under the Assembly proposals. Mr. Miles said there may be some concern with the one-time appropriation, because it would be given to a non-state agency, which could result in a new line-item in future budgets. He acknowledged the Legislature occasionally makes one-time appropriations to outside agencies, but normally appropriations only go to state agencies. Senator Rawson noted the Assembly was considering replacing federal appropriations that are being withdrawn with General Fund appropriations. He agreed there is some sense that the state will pick up the deficit. Senator Raggio asked if any other state funds are included in the budget. Mr. Miles responded there are none, that the budget is funded through Title XX. Senator Raggio was unable to recall any requests made to the committee for additional funding. Rural Clinics - Page 1055 Mr. Miles noted the Governor's budget provided for creation of a new office entitled Fernley/Silver Springs. He said the Assembly Committee on Ways and Means proposed to create two offices, one in Fernley and another in Silver Springs. Senator Raggio recalled the Senate calculated the two clinics would only be 18 miles apart, and thus were redundant and would not justify the expenditure. Senator Rawson expressed concern because the clinic staff in Ely was reduced, and the Caliente clinic was closed, requiring patients to drive 250 miles for service. He concurred it would be difficult to justify two clinics just 18 miles apart, especially when other clinics are being closed or cut back. Bob Guernsey, Principal Deputy Fiscal Analyst, interjected the clinic in Ely is open with an operating staff, although the staff does travel to other areas from there. However, he said, the clinic is not open in Caliente. He explained the Ely clinic had been reduced, but staffing has been reinstated in order to serve the prison. Senator Mathews asked what is the status of the clinic in Battle Mountain. Mr. Guernsey replied it will be opening in early 1996 and staffing for it is being included in the budget. Children's Health services - Page 1113 Mr. Miles said the Assembly Committee on Ways and Means added $50,000 each year for the OB (obstetrics) Access Project at the Community Health Center of Southern Nevada (CHCSN) to be included in the base budget. Senator Rawson noted the CHCSN has serious financial difficulties and is seeking a way to keep the OB Access Project viable in order to improve the health of Medicaid babies. Senator Raggio inquired if anyone could elaborate. John P. Comeaux, Director, Budget Division, Department of Administration offered to obtain more information for the committee. Highway Patrol - Page 1755 Highway Patrol Special - Page 1763 According to Mr. Miles, there are two issues involving the Highway Patrol, whether to eliminate the special fund, and whether to eliminate vacancy savings. He said the Assembly eliminated both, while the Senate retained the special fund. Senator O'Donnell asserted it is imperative to retain the special fund in place. He explained officers in the Nevada Highway Patrol are given a measure of comfort knowing the reserve is available to fund their salaries each biennium and with the knowledge they do not have to compete with all others in the highway fund, including those for the Nevada Department of Transportation. He said otherwise their salaries are intermingled with projects for bridges and roads, and knowing funding for their salaries is in a special fund gives them a morale boost. Senator Raggio recalled receiving information that the NHP has indicated they do not feel the special fund is necessary. He proposed further discussion. Bicycle Safety Program - Page 1809 Mr. Miles said, "The only difference is the position. This committee has kept the position, ways and means has deleted the position." High Level Nuclear Waste - Page 1893 Senator Raggio recalled control is the issue. He voiced the understanding the Governor has requested control be returned to his office instead of leaving control under the Department of Conservation and Natural Resources. He indicated he would like to see the membership on the Commission on Nuclear Projects equalized, and he would like to see more direct involvement with legislative committees. He asserted the Legislature should authorize expenditures under the law, and the Agency for Nuclear Projects should have more accountability to the Legislature. He asked if Mr. Comeaux had any suggestions along those lines. Mr. Comeaux indicated he did not. Senator Jacobsen interjected there should be some sort of coordination between the three different segments involved under the agency. Senator Mathews expressed the opinion it may be better to return control to the Office of the Governor. Senator Raggio stated the committee could agree with some limitations. He suggested there should be some direct linkage to the legislative committees. He noted the Legislature had intended it to be their oversight committee. When he asked if the committee would support such a request, the committee indicated approval. Senator Raggio explained the Governor would control the commission but with a requirement that the committee report as requested on its operations. He noted there has been some concern that authorized funds have not been utilized for the stated purposes, and maybe too much has been expended on public relations. He said a commitment has been made that will not happen again, but he opined the legislative committees should monitor that sort of thing. Senator Raggio said he has been told the committee can offer an amendment for the issues being discussed to go into A.B. 130, and closure of the budget could be conditioned upon its success. Otherwise, he suggested, the committee may wish to withhold authorization for expenditure of the funds. ASSEMBLY BILL 130: Transfers agency for nuclear projects to office of governor. Senator Rawson asked if that will include the equalization of membership, which Senator Raggio confirmed. Forestry Honor Camps - Page 1943 Senator Raggio noted the only difference between committee actions may be the suggestion from Senator Jacobsen that positions be added for crew supervisors. Mr. Miles pointed out that can be found under module E-455 on page 23 of Exhibit D. He said the proposal is to add 10 crew supervisors so that assistant camp supervisors will not be assigned to inmate work crews. Administration - State Parks - Page 1979 Mr. Miles explained the committees are in disagreement regarding the seasonal aid for Mormon Fort and the acceptance of the boat ramp at Washoe Lake from Washoe County, both of which the Assembly has failed to support. Senator Rhoads stated there has been some severe damage at South Fork, which may require additional funding to be included in the budget. He said the damage has been in the spillway, the gabions, and in the upstream measuring device. He estimated $200,000 may be required to repair the damage. Department of Transportation - Administration - Page 2021 Mr. Miles called attention to the communications positions to be retained for the NDOT budget, rather than being transferred to DIS, which are depicted under unit E-911 on page 28, Exhibit D. Mr. Miles explained seven positions in the Department of Motor Vehicles and Public Safety (DMV&PS), and nine in NDOT were proposed for transfer to DIS. He said the Assembly decided to retain the DMV&PS positions where they are, but it voted to move the NDOT positions to DIS. The Senate Committee on Finance, he said, determined to retain them all in their current agencies. Public Employees Retirement System - Page 2043 According to Mr. Miles, the Senate added out-of-state travel, dues and registrations and board and commission pay. State Industrial Insurance System - Page 2049 Mr. Miles reported the major difference is in unit E-276, which the Senate committee closed in conformance with S.B. 458, and with some adjustments to premiums and other non-state revenues. SENATE BILL 458: Makes various changes to provision relating to industrial insurance. He indicated there were also reductions in operating costs and increases in claim costs. He explained those are related to S.B. 458. Two other items, he said, in units M-200 and E-275, are adjustments because the group self-insurance moratorium did not go into effect. Senator Raggio pointed out there now will be group self-insurance. Senator Raggio asked the committee to attempt to resolve differences in the meeting with the Assembly to follow. He recessed the meeting at 9:08 a.m. RESPECTFULLY SUBMITTED: Judy Jacobs, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance June 14, 1995 Page