MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-Second Session
May 8, 2003
The Committee on Ways and Meanswas called to order at 11:36 a.m., on Thursday, May 8, 2003. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairwoman
Mr. Walter Andonov
Mr. Bob Beers
Mrs. Vonne Chowning
Mrs. Dawn Gibbons
Mr. David Goldwater
Mr. Josh Griffin
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Ms. Kathy McClain
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Assemblywoman Barbara Buckley, Clark County, District No. 8
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Jeffrey Ferguson, Program Analyst
Julie Brand, Program Analyst
Michael Chapman, Program Analyst
Russell Guindon, Deputy Fiscal Analyst
Brian Burke, Senior Program Analyst
Mindy Braun, Education Program Analyst
Bob Atkinson, Program Analyst
Tracy Raxter, Program Analyst
Jim Rodriguez, Program Analyst
Catherine Caldwell, Committee Secretary
Anne Bowen, Committee Secretary
Chairman Morse Arberry Jr. called the meeting to order at 11:36 a.m.
ASSEMBLYMAN MARVEL MOVED FOR INTRODUCTION OF BDR S-1347.
ASSEMBLYMAN GRIFFIN SECONDED THE MOTION.
THE MOTION PASSED. (Speaker Perkins, Assemblywoman Gibbons, Assemblyman Goldwater, Assemblywoman Leslie, and Assemblywoman Chowning were not present for the vote.)
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ASSEMBLYMAN MARVEL MOVED FOR INTRODUCTION OF BDR C-1109.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION PASSED. (Speaker Perkins, Assemblywoman Gibbons, Assemblyman Goldwater, Assemblywoman Leslie, and Assemblywoman Chowning were not present for the vote.)
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ASSEMBLYWOMAN GIUNCHIGLIANI MOVED FOR INTRODUCTION OF BDR S-1346.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION PASSED. (Speaker Perkins, Assemblywoman Gibbons, Assemblyman Goldwater, Assemblywoman Leslie, and Assemblywoman Chowning were not present for the vote.)
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BUDGET CLOSINGS
ELECTED OFFICIALS
ATTORNEY GENERAL ADMIN FUND (101-1030)
EXECUTIVE BUDGET PAGE ELECTED-24
Jeffrey Ferguson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced the Attorney General Administration Budget Account 101‑1030 and said that there had been a number of errors and omissions in that budget account having to do with interest expenses, Building and Grounds (B&G) assessments, contract services, new assessments, and copy machine leases. Mr. Ferguson noted that fiscal staff had worked with the Office of the Attorney General (AG) and the Budget Office to make the appropriate corrections and the adjustments were reflected in the closing documents.
Mr. Ferguson said that in decision unit E-710 the Governor recommended $129,127 in FY2004 and $119,196 in FY2005 for the purchase of replacement computer hardware and software. The Executive Budget recommended that the entire cost for the hardware and software be paid from the General Fund. At the initial budget hearing staff did not have sufficient information to make an assessment of that request. Subsequently, the Attorney General’s Office provided staff with details for staff to concur with the recommendation.
Mr. Ferguson said there were two items under consideration in decision unit E‑600. Under item one the Governor recommended a reduction of $30,000 in each year of the biennium in training expenditures. The second item involved the Attorney General’s administrative account cost allocation. The account was funded partially through cost allocation assessments paid by state agencies that received legal services from the Office of the Attorney General (AG). Mr. Ferguson noted that the assessment was determined by a consultant, and was based on the Governor’s recommended budget for the Administration account in conjunction with historical analysis of agencies’ utilization of the Office’s services. The closing documents reflected the modifications required to the account based on the Attorney General’s Cost Allocation plan as of May 6, 2003. Those adjustments increased the AG Cost Allocation revenues to the Attorney General’s administrative account, thereby reducing the need for General Funds by $238,348 during the biennium. Staff requested authority to make changes to the account based on subsequent modifications to the AG Cost Allocation plan.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BUDGET ACCOUNT 101-1030 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED WITH ASSEMBLYMAN BEERS VOTING NO. (Assemblywomen Gibbons and Chowning, and Assemblyman Goldwater were not present for the vote.)
BUDGET CLOSED.
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ELECTED OFFICIALS ATTORNEY GENERAL
OFFICE OF CONSUMER PROTECTION (330-1038)
EXECUTIVE BUDGET PAGE ELECTED-45
Speaker Perkins noted that there was a bill before both Houses having to do with telemarketing either do-call or do-not-call lists that would have some impact on the Office of Consumer Protection budget and that it might be premature to close it.
Chairman Arberry held Budget Account 330-1038.
ELECTED OFFICIALS ETHICS COMMISSION (101-1343)
EXECUTIVE BUDGET PAGE ELECTED-66
Mark Stevens, Assembly Fiscal Analyst, Legislative Counsel Bureau, introduced himself and said that staff had not had sufficient time to complete work on the budget to bring to Committee but anticipated completing the work soon.
Chairman Arberry held Budget Account 101-1343.
DEPARTMENT OF ADMINISTRATION
INDIGENT SUPPLEMENTAL ACCOUNT (628-3244)
EXECUTIVE BUDGET PAGE ADMIN-22
Julie Brand, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 628-3244 and said that it was the medical assistance supplement fund for indigent individuals and provided reimbursement to Nevada counties for unpaid hospital charges. The account was funded through a property tax of $0.01 per $100 of assessed valuation. She said the Nevada Association of Counties (NACO) administered the account and decisions to pay counties were made by the Board of Trustees for the Fund for Hospital Care to Indigent Persons. Staff recommended technical adjustments to decrease real property tax revenues and associated claim payments by $62,000 in FY2004 and $82,000 in FY2005. The decrease would properly reflect funding as determined by property assessed valuations provided by the Department of Taxation for FY2004 and adjusted in FY2005 by a projected growth factor of 9.2 percent.
SPEAKER PERKINS MOVED TO CLOSE BUDGET ACCOUNT 628‑3244 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblywoman Chowning and Assemblyman Goldwater were not present for the vote.)
BUDGET CLOSED.
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DEPARTMENT OF ADMINISTRATION
INDIGENT ACCIDENT ACCOUNT (628-3245)
EXECUTIVE BUDGET PAGE ADMIN-24
Julie Brand introduced Budget Account 628-3245 and said that it was the medical assistance supplemental fund that reimbursed hospitals for care to indigent persons who were injured in motor vehicle accidents in Nevada. The fund was accessed when claims exceeded $3,000 with the counties reimbursing for claims under $3,000. The account was funded through a property tax of 1.5 cents per $100 of assessed valuation and was administered similarly to the previous budget account through NACO with the Board of Trustees providing decisions to pay the hospitals. Ms. Brand noted a reduction of the ad valorem tax for FY2003 and FY2004. The reduction resulted from the current FY2002 actual revenue that had exceeded expenditures by $11.6 million and resulted in an $11.6 million carry forward balance to FY2003. As of May 1st additional FY2003 revenues of $8.6 million resulted in total receipts of $20.2 million in funding for this account. Discussions with NACO estimated that claim expenditures for FY2003 were $8 million. As such the resulting difference of $12.2 million would be carried forward to FY2004. Based on the estimated carry forward balance of $12.2 million, for the hospital care of the medically indigent, the Board of Trustees voted not to levy the ad valorem tax for FY2003 and FY2004 and to levy the 1.5 cent tax for FY2005. Upon further review by staff and the Department of Administration it was mutually agreed that a reduction in the tax levy for the FY2004 year appeared reasonable. Staff also recommended reducing the real property tax revenue to zero in FY2004. Staff recommended adjustments to the balance forward for both fiscal years by the amounts estimated from FY2003 and FY2004 and in corresponding adjustments to claim expense. Additionally staff recommended a technical adjustment of approximately $124,000 in FY2005 to properly reflect funding as determined by the property assessed valuations by the Department of Taxation.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BUDGET ACCOUNT 628-3245 WITH STAFF RECOMMENDATIONS.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
Assemblyman Hettrick asked for clarification regarding whether or not the 1.5‑cent property tax assessment was statewide.
Ms. Brand said that was correct.
Assemblyman Hettrick then clarified and said it was proposed to rescind the property tax for FY2003-04, reinstating it in FY2004-05.
Ms. Brand said that was correct.
Assemblyman Hettrick asked how the proposed plan would affect those smaller counties at the cap. He said it appeared to him that it would be much harder on the counties to have the 1.5 cent tax collected, then not collected, and then collected again. He said it appeared to him that that would be much harder on the counties than if they made the levy flat and said, “If the rate that we are spending money is $8 million then let’s set the tax rate at $8 million for collection,” and let the counties adjust their budgets accordingly. He noted that a couple of the counties were “dying” and would prefer to have a steady stream of revenue that could be counted on rather than something that they could have one year and not the next. He said he did not think it made sense to have the tax fluctuate like that.
Assemblyman Marvel said the process was administered by NACO and he thought it was their responsibility to let the counties know what the problem might be. He added that since NACO recommended the plan it was their responsibility to alert the counties as to what might happen the second year of the biennium.
Mr. Hettrick suggested that NACO should evaluate continuing assessing the tax.
Mr. Stevens said the process was administered by NACO and the closing documents reflected what NACO recommended to handle the account during the upcoming biennium.
Mr. Hettrick said NACO should have enough input from their own membership to develop and propose the plan.
THE MOTION CARRIED. (Assemblyman Goldwater and Assemblywoman Chowning were not present for the vote.)
BUDGET CLOSED.
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DEPARTMENT OF EDUCATION
STUDENT INCENTIVE GRANTS (101-2606)
EXECUTIVE BUDGET PAGE K12ED-44
Mindy Braun, Education Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 101-2606 and said it was for the Leveraging Education Assistance Program (LEAP) and the Special Leveraging Education Assistance Program (SLEAP) that provided grant aid to students with substantial financial need to help them pay for post-secondary education costs. She said there was one major closing issue, which had to do with insufficient state matching funds from the estate tax revenues from the University System. The Governor recommended $448,000 for FY2004 and $451,000 in FY2005 to meet the state match requirements for LEAP and SLEAP. The Governor’s recommended state match for the LEAP and SLEAP programs contained in the University Systems budget was $376,000 in each year of the biennium, which created a shortfall of approximately $72,000 in FY2004 and $75,000 in FY2005 in estate tax revenues.
Ms. Braun said to address the shortfall the following options were provided to the Committee for consideration:
Option 1 would continue both the LEAP and SLEAP programs at the Governor recommended levels and receive the maximum amount of federal funding that was available. Additional state funds of $72,292 would be required in FY2004 and $75,555 would be required in FY2005 and would have to come from the state General Fund.
Option 2 would continue both the LEAP and SLEAP programs at a minimum level and would require additional state General Funds in the amount of $6,872 for FY2004 and $10,135 in FY2005. She noted the Senate Committee on Finance had selected this option.
Option 3 eliminated the SLEAP program, which provided about 400 student scholarships but would continue the LEAP program at current levels, which provided about 500 student scholarships. She noted that would reduce the higher education estate tax by $129,420 in FY2004 and $126,157 in FY2005.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-2606 AS RECOMMENDED BY STAFF INCLUDING OPTION THREE.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblyman Goldwater and Assemblywoman Chowning were not present for the vote.)
BUDGET CLOSED.
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DEPARTMENT OF EDUCATION
DRUG ABUSE EDUCATION (101-2605)
EXECUTIVE BUDGET PAGE K12ED-53
Bob Atkinson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 101-2605 and said staff recommended to close the budget as adjusted. He said in budget hearings concerns had been expressed that funding should be used for programs that proved to be effective. In the Human Resources/K-12 Joint Subcommittee hearing, at which the Health Division was present, the Subcommittee requested the Health Division to look at administering all drug programs within one state agency. Mr. Atkinson said staff had received a response indicating that the Division recommended a Letter of Intent be issued to provide the following: “The Health Division, through the Bureau of Alcohol and Drug Abuse, would conduct a fundamental review of the substance abuse prevention and treatment programming across all state agencies. This review must produce an action plan addressing how services can be better integrated to promote the best practices, enhance delivery and effective and efficient use of services, reduce unnecessary duplication and include suggested budget items to be incorporated into the next biennial budget. All state agencies that support or provide these services should be required to cooperate with and participate in this effort.”
The Health Division indicated that any of those recommendations would be included in a comprehensive state plan that was being developed by the Governor’s State Incentive Grant Advisory Committee. Mr. Atkinson said that staff recommended the budget account be closed as adjusted with the suggested Letter of Intent.
Mr. Hettrick said that he agreed with the basic content of the Letter of Intent. He said there had been ongoing concern over the myriad programs, each one having a supervisor, making decisions, and using funds for administrative costs. Mr. Hettrick said he would delete the phrase “eliminate unnecessary duplication” and insert “eliminate duplication.” He said he would also delete the phrase “should comply” and insert the phrase “must comply.” Mr. Hettrick said the Division needed to stop spending money on administration. He said if the phrases “unnecessary duplication” and “should comply” were retained then the agencies could all decide not to comply and continue on with unnecessary duplication and arbitrary compliance.
ASSEMBLYMAN HETTRICK MOVED TO CLOSE BUDGET ACCOUNT 101-2605 AS RECOMMENDED BY STAFF INCLUDING THE LETTER OF INTENT AMENDED TO CHANGE “REDUCE UNNECESSARY DUPLICATION” TO “REDUCE DUPLICATION” AND TO CHANGE “SHOULD BE REQUIRED” TO “ARE REQUIRED.”
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
Mr. Marvel said that long-term Committee members had observed the problem of myriad programs and no results.
Assemblywoman Giunchigliani said she agreed and suggested that the Department of Education be directed to establish through the State Board of Education within the next year programs statewide that had workable drug education programs, and that funding only be allocated for those programs that had been established.
ASSEMBLYMAN HETTRICK MOVED TO AMEND HIS MOTION TO ADD ASSEMBLYWOMAN GIUNCHIGLIANI’S SUGGESTION.
ASSEMBLYMAN MARVEL SECONDED THE AMENDED MOTION.
THE MOTION CARRIED. (Assemblyman Goldwater and Assemblywoman Chowning were not present for the vote.)
BUDGET CLOSED.
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DIVISION OF MENTAL HEALTH AND DEVELOPMENTAL SERVICES
HUMAN RESOURCES, SOUTHERN FOOD SERVICES (101-3159)
EXECUTIVE BUDGET PAGE MHDS-46
Michael Chapman, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 101-3159 and said that the Southern Food Services was part of the Division of Mental Health and Developmental Services and administered by the Desert Regional Center (DRC). The Southern Food Services provided food services including prepared meals and raw foods to the Desert Regional Center, Division of Child and Family Services, and the Southern Nevada Adult Mental Health Services. Staff had not noted any major issues in the account. There were a number of decision units within the account that were affected by modules in the Division of Child and Family Services (DCFS) budget, the Adult Mental Health Services budget, and the DRC budget. Staff requested authority to make those technical adjustments based on actions taken in the other accounts. Staff recommended closing the Southern Nevada Food Services budget as recommended by the Governor.
ASSEMBLYMAN HETTRICK MOVED TO CLOSE BUDGET ACCOUNT 101-3159 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblyman Goldwater and Assemblywoman Chowning were not present for the vote.)
BUDGET CLOSED.
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DEPARTMENT OF PUBLIC SAFETY
JUSTICE ASSISTANCE ACT (101-4708)
EXECUTIVE BUDGET PAGE PS-26
Tracy Raxter, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 101-4708 and said the Office of Criminal Justice Assistance Act budget provided for pass-through funding of federal funds from the United States Department of Justice, including the Byrne Grant funds, Violent Offender Incarceration and Truth-in-Sentencing (VOI/TIS) funds, Residential Substance Abuse Treatment funds, and Criminal History Improvement Program funds. The major issue in budget account 101-4708 was the transfer of the Federal Assistance Liaison Connecting Officials of Nevada’s Networking Equipment Support Team (FALCON’S NEST) equipment procurement program into a separate budget category within the Office of Criminal Justice Assistance pass-through grant account. Mr. Raxter noted that the equipment procurement program was currently in the administrative account. The Department had indicated that the transfer would eliminate commingling funds received from state and local government agencies that procured equipment through that account. Fiscal staff noted that the administrative costs of the FALCON’S NEST program would continue in the administrative account for the Office of Criminal Justice Assistance. Staff recommended approval of the transfer.
Assemblywoman Giunchigliani noted that she had asked the budget to be held because of the investigation being conducted on the FALCON’S NEST by the Department of Defense. She said recently Committee members had received a thick packet on the matter. She noted that the investigation was ongoing and separating the funds to prevent commingling of dollars would facilitate future tracking should the need arise. She said it was appropriate to close the budget.
ASSEMBLYMAN PARKS MOVED TO CLOSE BUDGET ACCOUNT 101-4708 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblywoman Chowning was not present for the vote.)
BUDGET CLOSED.
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DEPARTMENT OF PUBLIC SAFETY
JUSTICE GRANT (101-4736)
EXECUTIVE BUDGET PAGE PS-29
Mr. Raxter introduced Budget Account 101-4736 and said it was the administrative account for the Office of Criminal Justice Assistance. He said there were no major closing issues. He noted that staff had made some technical adjustments for computer pricing and for the Department’s cost allocations based on budget modifications submitted by the Budget Division. Mr. Raxter said that staff recommended approval of the budget as recommended by the Governor with technical adjustments.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BUDGET ACCOUNT 101-4736 AS RECOMMENDED BY THE GOVERNOR WITH TECHNICAL ADJUSTMENTS.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblywoman Chowning was not present for the vote.)
BUDGET CLOSED.
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DEPARTMENT OF PUBLIC SAFETY
MOTORCYCLE SAFETY PROGRAM (201-4691)
EXECUTIVE BUDGET PAGE PS-125
Jim Rodriguez, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 201-4691 and said there were no major issues with the program. He said there were several decision units that required the Committee’s attention. Mr. Rodriguez noted that at the last Committee hearing there had been an issue with the program’s reserves and that he would discuss staff findings on the issue at the end of the presentation.
Mr. Rodriguez said that decision unit E-350 requested funding for four areas to expand the Motorcycle Safety Program:
Mr. Rodriguez said that decision unit E-351 provided for the continuation of the contract with Adrian-Haliegh, Inc. for a Program Manager and in so doing, deleted the Program Officer position. He said the agency wanted to continue its contract with Adrian-Haliegh, Inc. until a qualified applicant was identified for the Program Manager position.
Mr. Rodriguez said that decision unit E-710 requested funding to replace four training motorcycles and computer equipment. He said staff had made some technical adjustments to the funding request for computers based on pricing. Staff also deleted some program computers that did not qualify for replacement under the standard four-year replacement policy. Mr. Rodriguez said that decision unit E-720 requested funding for two motorcycle sidecars to initiate a pilot program for sidecar training.
Regarding the Committee’s earlier concerns that the program reserve was too high and there were not sufficient expenditures for the program to expand to the community colleges, Mr. Rodriguez said that staff conducted an analysis of the reserves and noted that the beginning reserves were $220,000 and that ending reserves in FY2005 would be $99,000.
Staff would seek normal approvals to do the adjustments to the cost allocations based on closing decisions for the other Department of Public Safety accounts.
SPEAKER PERKINS MOVED TO CLOSE BUDGET ACCOUNT 201‑4691 AS RECOMMENDED BY STAFF WITH ADJUSTMENTS.
ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblywoman Chowning was not present for the vote.)
BUDGET CLOSED.
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DEPARTMENT OF PUBLIC SAFETY
EMERGENCY RESPONSE COMMISSION (101-4729)
EXECUTIVE BUDGET PAGE PS-159
Mr. Rodriguez introduced Budget Account 101-4729 and said there was one closing issue raised in an earlier Committee hearing on that budget. He said that decision unit E-500 requested an increase for out-of-state travel in the State Emergency Response Commission (SERC) budget from $4,382 to $14,455 in FY2004 and $15,455 in FY2005. Mr. Rodriguez said that staff had received information from the agency detailing each of the trips. The agency indicated that the increase in travel was in direct response to a legislative audit that found several weaknesses and deficiencies in its financial management and program functions. It was noted that SERC planned to begin more proactive support of the Local Emergency Planning Committees (LEPC). They had established several subcommittees for funding, planning, and information technology. SERC had also increased the frequency of meetings it would conduct. SERC proposed a total of 16 trips per year averaging about 1.3 trips per month. Mr. Rodriguez said the plan seemed reasonable to fiscal staff.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-4729 AS RECOMMENDED BY STAFF INCLUDING RECOMMENDED TRAVEL INCREASES, THE NOTATION OF THE EXECUTIVE BUDGET ERROR, AND COST ALLOCATION CHANGES ADJUSTMENTS.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblywoman Chowning was not present for the vote.)
BUDGET CLOSED.
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Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, noted that with regard to Budget Account 101-4729, Senate Bill 201 would be heard the following week and would allow the State Emergency Response Commission (SERC) to raise its fees. He said Assembly Bill 486 was in Committee and if one of those bills passed and SERC raised their fees the agency could approach the Interim Finance Committee for augmentations.
ELECTED OFFICIALS
STATE TREASURER (101-1080)
EXECUTIVE BUDGET PAGE ELECTED-86
Russell Guindon, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 101-1080 and said the major closing issue in the budget involved amendments submitted by the Budget Office on March 26th requesting a General Fund appropriation of $151,500 in each year of the biennium. The amendment provided funding for costs to mail checks through the State Mail Room. The Administrative Services Division decided mailing voucher checks for various state agencies by the Treasurer’s Office was a service provided to the agencies and should be paid directly from the Treasurer’s budget account. The General Fund would be reimbursed in future years through the statewide cost allocation. Mr. Guindon noted that the recommended General Fund appropriation of $303,000 over the biennium would not be offset during the 2003-2005 biennium, as the reimbursement to the cost allocation could not be implemented until the 2005-2007 biennium.
Assemblyman Hettrick asked what the consequences would be if the Committee did not approve the Governor’s recommendation.
Mr. Stevens said the cost would remain in the Mail Room budget. He said it had been determined that the current charge mechanism was not appropriate even though it was current practice. Mr. Hettrick asked if the Mail Services’ budget would be reduced a like amount for that activity.
Mr. Stevens said the cost was currently built-in as an overhead charge to all the users rather than as a charge to a specific user such as, in this case, the Treasurer’s Office. He said other agencies were being assessed overhead charges for services that should be specifically charged to the Treasurer’s Office.
Mr. Hettrick noted that the testimony had indicated that the mechanism would revert to a cost allocation charge to all the agencies in 2005. He asked why the costs could not continue as currently practiced.
Mr. Stevens said it was a Committee choice. He said it was currently an overhead charge. He noted that the state would recover the cost in the future through the statewide cost allocation plan which was allocated to agencies differently than the overhead charge in Mail Services. He said if the Committee left the charge in Mail Services, $151,000 would not have to be appropriated from the General Fund. He added that it was not the correct way to charge for the services and that was what was being brought to the Committee’s attention.
Mr. Hettrick said it appeared to him that although it should be done correctly as a bookkeeping procedure, it had historically been done as an overhead charge. He said the Committee was being asked to appropriate $151,000 a year from the General Fund to change the procedure and then in two years to revert back and charge all the agencies. He said he thought it would be better to save the $300,000 for the biennium and change it to cost allocation and appropriation in 2005.
Assemblywoman Giunchigliani asked why voucher payable checks were being mailed and asked if the state had an electronic payment program. She said there had been several discussions about utilizing electronic fund transfers and other kinds of electronic transactions throughout all the budgets.
Mark Winebarger, Deputy of Cash Management, Office of the State Treasurer, introduced himself and said electronic payments were a function of the Controller’s Office. He said many payments were made electronically and it was the vendor’s option as to whether or not payments were received electronically or through the check process.
Assemblyman Beers said that vendors required the electronic and technical infrastructure to accept electronic payment, which was not something that the Legislature could control.
Ms. Giunchigliani noted that the Controller’s Office could discover which vendors did not want to accept electronic payment versus those who had the capability. Ms. Giunchigliani inquired if it was the vendor’s option whether the Department had verified that the vendors had the necessary technology for electronic payments. Mr. Winebarger said he did not believe a study had been completed and that function was the responsibility of the Controller’s Office.
Ms. Giunchigliani said she agreed with Mr. Hettrick to not change the process. Chairman Arberry asked the Committee whether or not they wanted to hear all the budget issues and technical adjustments before making a motion. The Committee opted to hear the entire budget before making a motion.
Mr. Guindon continued and said that under other closing issues the Governor recommended funding of $5,558 for Board of Finance (BOF) related to salary, per diem, and travel expenses. He noted that the average level of expense over the last four years had been $310. Based on that information staff recommended adjusting the funding in that category to the FY2003 legislatively approved amount of $423 in each year of the biennium resulting in a General Fund savings of $5,135 in each year.
Mr. Guindon said under other closing issues at its budget hearing the State Treasurer requested additional funding of $1,712 in FY2004 and $2,890 in FY2005 for increased costs in the expense of printing and mailing check stock expenses. The requested funding was included in the agency’s original budget document but was not included in The Executive Budget. Staff reviewed the agency’s request and recommended a General Fund appropriation of $1,712 in FY2004 and $2,890 in FY2005.
Mr. Guindon said in decision unit E-300, Budget Page Elected-87, at the agency’s initial budget hearing the agency asked the Committee to consider a request for a General Fund appropriation of $895 in each year of the biennium for Verisign certificates. He said those digital certificates enabled visitors to the Treasurer’s Web site to verify authenticity, communicate securely, and protect confidential information from interception and hacking. Funding for that item was included in decision unit E-300 of the agency’s budget request document but the Governor did not recommend it in The Executive Budget. Staff reviewed the supporting information provided by the agency and recommended approval. He pointed out that the Budget Office indicated that funding for the item was inadvertently eliminated from decision unit E-300.
Mr. Guindon said that staff concurred with the Governor’s recommended General Fund appropriation of $10,332 in FY2005 for videoconference equipment as included in The Executive Budget. He said in decision unit E-721, staff concurred with the Governor’s recommended General Fund appropriation of $13,160 in FY2004 for a computer server, application software, and software maintenance. In decision unit E-722 the Governor recommended a General Fund appropriation of $5,766 in FY2004 for hardware and software for a document management and tracking system. Mr. Guindon said that staff reviewed the request and recommended a General Fund appropriation of $4,754 for the system resulting in a General Fund savings of $1,012 due to adjustments for reduced prices of computer hardware and software.
Mr. Guindon said there were three technical adjustments in Budget Account 101-1080:
Mr. Hettrick asked for clarification with regard to the technical adjustment to the Municipal Bond Bank Program. He summarized his understanding of the proposal and said that the agency would move revenue to another account if insufficient interest was generated in order to bypass a separate General Fund appropriation.
Mr. Guindon said the proposed technical adjustment intended that interest would be transferred from the Municipal Bond Bank (MBB) into the Treasurer’s Office account to cover the operations of the MBB Program. Due to low interest rates there was an insufficient balance in the MBB to cover the program’s operation costs. The state was therefore required to supplement the account with General Funds. Mr. Guindon noted that the Treasurer’s Office indicated that if the program generated additional interest because of a rise in interest rates, or the balance increased, additional funds would be transferred into Budget Account 101-1080 to cover the cost of administering the program.
Mr. Hettrick said since the MBB program administered the money for local governments there should be a way to charge those agencies for the services.
Mr. Guindon said there had been discussions between the State Treasurer and fiscal staff about charging local governments but according to information provided to staff, the Treasurer’s Office had not identified a procedure for doing so.
Mr. Hettrick said that the Committee should do something so that if the MBB did not generate enough interest to cover its administrative costs then the entities it served should cover those costs. He noted that the program saved the local governments money yet the state was obligated to pay all the administrative costs. He said it should not be that way when times were tough.
Assemblyman Hettrick moved to close budget account 101-1080 as recommended by staff, BUT TO not includE $151,000 IN EACH YEAR OF THE BIENNIUM FOR COSTS TO MAIL CHECKS THROUGH THE STATE MAILROOM BUT TO leavE it as it WAS, and TO INCLUDE the STAFF recommended ADJUSTMENT TO THE GOVERNOR’S RECOMMENDED APPROPRIATION FOR the Board of Finance, TO APPROVE THE APPROPRIATION FOR printing AND MAILING check stock, TO FUND THE APPROPRIATION REQUESTS IN decision unitS E-300, E-720, E-721, AND E-722, and TO APPROVE the other technical adjustments.
Assemblyman Marvel seconded the motion.
Vice Chairwoman Giunchigliani assumed the Chair.
Vice Chairwoman Giunchigliani asked for clarification on the technical adjustments and how the bond money program actually worked.
Mr. Stevens said that Mr. Guindon had indicated that the program had not generated sufficient interest to offset its operation costs and therefore the interest that represented the total cost to administer the program was not being transferred to the 101-1080 budget account, therefore, the General Fund had to supplement funding to finance that program. If the projections changed, interest rates rose, or the principal went up, the Treasurer’s Office would allocate as much as possible to the account. He said that if the interest revenues were higher than operational costs, the excess would be reserved for reversion to the General Fund. He said that was the recommended technical adjustment unless the Committee wanted to make changes.
Vice Chairwoman Giunchigliani said if the program did not generate the necessary revenue the state should dispose of it in the future.
Mr. Hettrick said that, although he did not know how, whether through a bill or in the appropriations bill, provisions should be included that provided if the Municipal Bond Bank did not generate enough interest to cover program operating costs for the participating local governments then there should be a charge back mechanism to the local governments to cover the cost of operations.
Vice Chairwoman Giunchigliani asked Mr. Hettrick whether or not he wanted to include that as an amendment to his motion. Mr. Hettrick replied that he did not know if he could.
Vice Chairwoman Giunchigliani asked Mr. Winebarger to clarify.
Mr. Winebarger said that the interest shortfall was a two-pronged problem. He said low interest rates were part of the problem, and another part of the problem was that principal was reduced because of the $20 million debt service agreement that had been entered into a year and a half ago. He added that some of the money came from the local governments, resulting in the reduced principal.
Vice Chairwoman Giunchigliani noted that was another reason securitization should not be supported.
Vice Chairwoman Giunchigliani continued and said the motion before the Committee had not been changed.
The motion carried UNANIMOUSLY.
Budget closed.
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Chairman Arberry resumed the Chair.
ELECTED OFFICIALS
TREASURER HIGHER EDUCATION TUITION ADMINISTRATION (101-1081)
EXECUTIVE BUDGET PAGE ELECTED-92
Brian Burke, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 101-1081 and said the account had been partially closed on April 23rd. He said there were additional decisions to make before the Committee could fully close the account. The Committee had approved the amended request to add one unclassified Senior Deputy Treasurer position, and to eliminate two positions to effectuate that change.
Mr. Burke said, with regard to the General Fund contributions, the account was previously funded with General Fund appropriations, or so-called General Fund loans with an established payback schedule. The Governor had requested to continue to pay back $25,000 a year to the General Fund from the Treasurer Higher Education Tuition Administration account, BA 101-1081. In subsequent years, from FY2006 and beyond, payments would be made through the College Savings Plan account.
Mr. Burke said the Committee had denied the Governor’s funding recommendation for marketing and advertising. Instead, the Committee chose to direct those amounts to the Prepaid Tuition unfunded liability.
Mr. Burke said there remained several minor decision units for equipment and rent transfers.
Assemblyman Goldwater asked Mr. Burke for clarification regarding the loan payback process and specifically wanted to know if they were changing the source of funds for the loan payback. He said when the Committee approved the loan, the proposal represented the loan paid back on a faster schedule.
Mr. Burke said Mr. Goldwater was correct and that initially there was a ten-year planned payback. He said the current proposal would carry through to FY2013.
Mr. Goldwater reiterated his original question regarding a change in budget accounts.
Mr. Burke said there was a minor clarification. The Prepaid Tuition Administration account had been the account making the payback and would continue to do so through this biennium. In the next biennium, beginning FY2006, the College Savings Plan would begin making the repayments.
Ms. Giunchigliani said the Committee needed to discuss whether or not both of those programs should continue if they could not generate sufficient funds. She said parents that had paid could be held harmless, and the state would not be obligated for some of the costs.
Chairman Arberry held Budget Account 101-1081.
ELECTED OFFICIALS
MILLENNIUM SCHOLARSHIP ADMINISTRATION (260-1088)
EXECUTIVE BUDGET PAGE ELECTED-96
Mr. Burke introduced Budget Account 260-1088 and said the account had been discussed briefly during an earlier closing hearing but no closing decisions had been made at that time. He noted that at the April 23rd meeting staff presented the Committee with an overview on the sustainability of the Millennium Scholarship payments and that the Treasurer had indicated to staff that the trend illustrated a need for adjustments to ensure that eligible Millennium Scholars would have adequate funding regardless of the timing of potential shortfalls. Within Senate Bill 448 the Treasurer proposed a number of program changes that involved increases in qualifying college and high school grade point averages and a reduction in the eight-year eligibility limit. Mr. Burke said no closing actions were required on the changes.
Mr. Burke noted that the Treasurer had provided the following list of budgetary cuts necessary to remain under the 2 percent administrative cap with no program changes and without securitization:
a. Eliminate $74,000 in funding for continuation of the baseline study in FY2004 (E-325).
b. Reduce telephone costs by $400 in each year of the biennium (Base).
c. Eliminate $3,900 in computer equipment funding in FY2005 (E-710).
d. Reduce printing and copying costs by $1,000 per year (Base).
e. Reduce postage by $1,400 in each year of the biennium (Base).
f. Reduce postage paid to the state mailroom by $3,700 annually (Base).
g. Reduce in-state air transportation by $500 each year (Base).
h. Eliminate caseload-driven operating cost increases - $40,147 per year (M-200).
i. Eliminate an additional Administrative Aide position - $34,495 in FY2003‑04 and $36,333 in FY2004-05 (Base).
j. Reduce DoIT MSA programmer charges by $30,000 in FY2004-05 (Base).
Mr. Burke said the Office of the Treasurer’s staff had noted on April 11 that the administrative expenditures in the Governor’s recommended budget would exceed the cap by $117,000. He said that items a. through j. outlined what the Treasurer proposed to cut to remain within the administrative 2 percent expenditure cap if no program changes were made and if securitization was not approved.
Mr. Burke said there were several alternatives for the Committee to consider relative to the closing of the administrative account.
1. The Committee could close the budget with the information on hand and if program changes in S.B. 448 were not ultimately approved the Committee could direct the Treasurer to approach the Interim Finance Committee at a later date to implement changes necessary to remain within the 2 percent administrative cap. He said the Committee should note that the Senate Finance Committee closed the budget with this option. The Senate Finance Committee also indicated that the Treasurer would have the flexibility to re-visit any potential cuts and would not be held to the items that were outlined in the priority list.
2. The Committee close the budget implementing the budget cuts identified by the Treasurer as needed to remain within the administrative cap.
3. The Committee could consider within S.B. 448 adjusting the administrative cap.
Ms. Giunchigliani noted that the cap included the securitization plan.
Mr. Burke said the securitization plan included an adjustment to the cap. If the program was securitized there would be a 0.5 percent cap rather than a 2 percent cap because there would be a larger pool of principal from which to draw.
Ms. Giunchigliani said she did not agree with securitization or that the grade point average (GPA) be raised. She noted it was contrary to the intent of the program to tighten the eligibility requirements and thereby reduce the number of eligible scholars. She also noted that the Committee was aware that the Tobacco Settlement funds were not an ideal source for funding the Millennium Scholarship program. She said she did not think it worked well as it stood, let alone in this budget.
Mr. Stevens said that the Committee could hold this account if they chose, but that the program would probably go forward in some form. He said the issues of the administrative cap and securitization would come later in the session. Mr. Stevens said the program needed most of the staff and the components in the budget to administer the program regardless of the form it took after the legislation had passed. He said it had been suggested that if securitization did not pass, the Committee could change the administrative cap similar to the Department of Human Resources that currently had a 3 percent cap for administration for the Healthy Nevada Fund. He noted that such a decision would come later in the session. Mr. Stevens said unless the Committee wanted to hold the budget, they could either approve it as it stood, or retain the 2 percent cap by implementing budget reductions a. through j. He said the Committee might want to close the budget in some fashion and deal with the policy issues and programmatic changes in the Millennium Scholarship program later in the session.
Mr. Hettrick said pursuant to Nevada Revised Statutes (NRS) 396.926, no more than 2 percent could be used to administer the trust fund. He said there was no choice but to reduce administrative expenses to meet the 2 percent cap. He said the cap was established in the NRS and the budget could not be passed otherwise. He said the structure of the law required them to implement the reductions in a. through j. to comply with the 2 percent administrative cap.
Mr. Goldwater said there were three options for securitization: accept the entire concept, reject the entire concept, or settle somewhere in the middle. He asked if the Committee would need to adjust the administrative cap if there were a contingency plan for partial securitizing. Mr. Goldwater said he was under the impression that the Board of Regents administered matters related to the Millennium Scholarship program and that responsibility for adjustments and restrictions to the approved Tobacco Settlement document lay with the Board. He believed the Board of Regents had that authority. Mr. Goldwater added that he was in favor of a means test for Millennium Scholarship eligibility.
Ms. Giunchigliani said she recollected that the Committee had put specific grade point averages into the original bill and that those had to be adopted by the Board of Regents. She added that the Committee might want to mandate a means test.
Mr. Goldwater said his point was that the Treasurer should be communicating with the Board of Regents rather than the Legislature. He said it was an ongoing program, and if curbs were needed it was up to the Board of Regents to take action. He added that his point in closing the other budget account with a Letter of Intent was to make the Board of Regents aware that the Tobacco Settlement funds were not unending, not an infinite source of funds, and would definitely end one day. He said the Regents and the Treasurer needed to take appropriate steps.
Ms. Giunchigliani suggested the Committee move to close the budget with an amendment and adopting option 2.
Janice Wright, Deputy of Education Programs, Office of the State Treasurer, introduced herself and said the Office of the State Treasurer did abide by the policy set by the Board of Regents, but the statute itself specified the GPA and that was what was contained in Senate Bill 448 coming before this Legislative Session.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 260-1088 AS RECOMMENDED BY STAFF WITH OPTION 2, WITH THE EXPENDITURE CUTS TO KEEP THE ADMINISTRATIVE COSTS UNDER THE 2 PERCENT CAP, AND TO REQUEST A FUTURE CHANGE IN STATUTE TO ESTABLISH A MEANS TEST.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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ECONOMIC DEVELOPMENT AND TOURISM
COMMISSION ON ECONOMIC DEVELOPMENT (101-1526)
EXECUTIVE BUDGET PAGE TOUR&ECON-1
Mr. Stevens introduced Budget Account 101-1526 and said the Committee had reviewed the budget earlier in the week. He said the first closing item for the Committee’s consideration was matching grants. Currently matching grants were funded at $995,000 each year of the biennium and were provided to the rural and urban development authorities. The grants required an equal matching amount from the recipients with some exceptions in the rural areas.
The second closing item was the Train Employees Now (TEN) program that provided funds for short-term training programs for qualified industries creating new jobs. Senate Bill 419 of the 1999 Legislative Session amended NRS 231.151 to allow the Commission to balance forward TEN funds between fiscal years. Mr. Stevens said it had been projected that $426,000 would be balanced forward into FY2004 less $104,000 that had been identified by the Commission to comply with the Governor’s 3 percent reductions. He said that would leave $321,000 to balance forward into FY2004. Mr. Stevens said the Committee could reduce the amount of TEN funding to $500,000 in each year of the biennium, which would reduce funding as recommended by the Governor in the first year of the biennium; or the Committee could elect to balance forward the $321,000, making the money available to the Commission for that program in FY2003-04.
The third closing item dealt with $20,000 used to support the Washington D.C. office. Mr. Stevens noted that the Washington, D.C. office had been eliminated by the Committee in previous closings. He said for consistency the Committee should eliminate that item in this budget as well.
Mr. Stevens concluded and said that the rest of the closing items were relatively minor.
Ms. Giunchigliani noted that the Committee had discussed the possibility of consolidating Economic Development and Tourism but thought they could close the budget and deal with that issue separately.
Mr. Stevens said the Committee would need to review that proposal. He said the budget accounts would remain much the same with some adjustments such as Commission’s costs that were built into two budgets.
Ms. Giunchigliani said she would ask that they do that so the Committee could consider the Tourism budget that was coming up the next week. She said she wanted to make a separate motion to deal with the Washington, D.C. office because some individuals did not support its elimination and some did.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-1526 AS RECOMMENDED BY STAFF, MAINTAINING THE FUNDING LEVEL FOR THE REGIONAL DEVELOPMENT AUTHORITIES OVER THE BIENNIUM, REMOVING THE NON-REVERTING PROVISION OF NRS 231.151 FOR THE TRAIN EMPLOYEES NOW (TEN) PROGRAM, PROVIDING AN ANNUAL APPROPRIATION AT A LOWER BASE LEVEL AND ALLOWING THE COMMISSION ON ECONOMIC DEVELOPMENT TO COME TO THE INTERIM FINANCE COMMITTEE IF QUALIFIED BUSINESSES REQUIRED FUNDING FOR TRAINING THAT EXCEEDED THE AVAILABLE BUDGETED FUNDS, APPROVING INCREASED TRAVEL FUNDING, AND APPROVING TECHNICAL ADJUSTMENTS.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
Assemblyman Beers asked if the motion had included the decision unit E-150 request for Web services training. His question was affirmed.
THE MOTION CARRIED UNANIMOUSLY.
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ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-1526 DELETING THE $20,000 IN GENERAL FUND FOR SUPPORT OF THE WASHINGTON, D.C. OFFICE.
ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.
THE MOTION CARRIED WITH ASSEMBLYMEN MARVEL, GRIFFIN, BEERS AND HETTRICK VOTING NO.
BUDGET CLOSED.
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ECONOMIC DEVELOPMENT AND TOURISM
RURAL COMMUNITY DEVELOPMENT (101-1528)
EXECUTIVE BUDGET PAGE TOUR&ECON-11
Mr. Stevens introduced Budget Account 101-1528 and said that after discussion earlier in the week the Committee decided to hold the budget. He said the discussion had focused on the significant percentage increase in General Fund support for the account. Mr. Stevens noted that the dollar increase was not significant but the percentage increase was.
In decision unit E-276 Mr. Stevens said there was a recommendation to increase out-of-state travel which was funded 100 percent from the General Fund. He said the agency requested $4,459 each year of the biennium, which was $1,000 more than had been spent in FY2002 and about $2,500 more than was budgeted for the current fiscal period.
Ms. Giunchigliani noted she would prefer not to increase the General Fund by 55 percent but did not know how to avoid that.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-1528 AS RECOMMENDED BY STAFF, APPROVING DECISION UNIT M-100 AND THE 55.7 PERCENT GENERAL FUND INCREASE, AND DECREASING FUNDING FOR OUT-OF-STATE TRAVEL BY $2,000 FOR THE CURRENT FISCAL YEAR.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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Assembly Bill 504 (1st Reprint): Requires Department of Human Resources to apply to Federal Government to establish program to extend coverage for prescription drugs and pharmaceutical services to certain persons under certain circumstances. (BDR 38-1207)
Assemblywoman Barbara Buckley, District No. 8, introduced herself for the record. She explained that Assembly Bill 504 required the state to apply to the federal government for a Medicaid Section 1115 Pharmacy Plus waiver that would bring federal funds to assist the state with its Senior Rx program. The bill also created enabling language to assist individuals with disabilities who received Medicare but did not have prescription drug coverage. She noted that in discussions with the Director of the Department of Human Resources and the Governor’s Office a consensus amendment was developed for the program.
Ms. Buckley highlighted the seminal aspects of the amendment. She noted that there had been concern over whether the Department could manage to stay within the originally proposed administrative overhead cap of 8 percent. The administrative overhead cap was raised to 10 percent, which the Department agreed was manageable. Ms. Buckley noted that a 10 percent cap would also realize a significant savings over the current 29 percent administrative cap, thereby directing more financial resources into program services.
Ms. Buckley said that a second significant element of the amendment helped to “jump-start” the disability component of the program by earmarking a portion of the Tobacco Settlement dollars allocated for disability pharmaceuticals. She explained that when the use of Tobacco Settlement funds was approved, 10 percent was directed toward individuals with disabilities and the amendment in Assembly Bill 504 removed one-quarter of that allocation to support pharmaceutical coverage for the group. Ms. Buckley said that representatives of the Nevada Disability Forum approved of the idea. The amendment did not intrude into other designated groups receiving Tobacco Settlement funds, and was consistent with the intent of the funds allocations. Ms. Buckley said that during discussions, the disability community noted priority-needs areas specific to the disability portion of the bill and in accordance with the disability strategic plan adopted by this Legislature’s Interim Committee on Individuals With Disabilities. The three priorities were respite, independent living, and positive behavioral support, and those were included in the amended bill.
Ms. Buckley said a third highlight to the amended bill provided that the administration could determine such parameters as co-payments within the disability program. When approved by the Director, the agency could bring the plan the Interim Finance Committee for approval.
Ms. Buckley asked for questions.
Assemblyman Hettrick asked if the agency approved of the amended bill and noted that the Director of DHR was present. Mr. Hettrick inquired if there was a fiscal note with the amended bill.
Ms. Buckley said that the Director of DHR supported the amendments.
Michael Willden, Director, Department of Human Resources, introduced himself and said there was no fiscal note. He said there were two steps to the funding mechanism associated with A.B. 504. He said the first step required obtaining the Senior Rx waiver and that would bring in additional Medicaid funding. That would change the funding structure within the Senior Rx program, which involved the Tobacco Settlement funds, and the Director could not apply for the disability Rx waiver unless he found that the Senior Rx waiver covered the roughly 12,000 recipients as recommended by the Governor. He said it was a “cascading domino process” and no new dollars would be required regarding the fiscal note.
Assemblywoman McClain asked for clarification regarding the phrase covering “other related services.” She hoped the plan could include vision and dental services in the waiver.
Ms. Buckley said that in A.B. 504, other related services covered such areas as ensuring that seniors received necessary pharmaceuticals or medications. She said that in their study of other states’ pharmacy waiver programs there had been services for quality control to ensure that folks did not overutilize drugs. Ms. Buckley added that they would be happy to hear any plans developed by Ms. McClain and her constituents.
Assemblywoman Leslie asked for information regarding the time frame on the pharmacy waiver plan.
Mr. Willden said the implementation of the plan was anticipated to be January 2004, the same as that for the Senior Rx plan. He said the Department intended to be very aggressive in the waiver application process. He said the Department needed to ensure that the Senior Rx program would fund the 12,000 plus recipients, as recommended in The Executive Budget, and to continue to work with the Center for Medicaid Services (CMS). He said he anticipated having a funding structure and plan to present to the IFC in the fall.
Ms. Leslie commended Ms. Buckley, Mr. Willden, and Senator Raggio for their excellent collaboration. She noted that the bill was a culmination of several years’ effort in the waiver area. She said she believed A.B. 504 was one of the most significant health-related programs of the session and would not have materialized without their efforts and cooperation. She thanked them again.
SPEAKER PERKINS MOVED TO AMEND AND DO PASS ASSEMBLY BILL 504.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
MOTION PASSED UNANIMOUSLY.
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Assembly Bill 173: Increases salaries of certain forensic specialists employed by State. (BDR S-113)
Mr. Stevens presented Assembly Bill 173 and said it had to do with setting salaries for Forensic Specialists at the Department of Corrections. Mr. Stevens said that the Subcommittee on Public Safety heard the issue and closed it reclassifying the Forensic Specialists to Correctional Officers. A.B. 173 would provide a salary increase to the position and retain the positions as Forensic Specialists. He said the issue was one of program rather than funding. If the bill went forward the Committee would be indicating that the Forensic Specialist positions should be retained and not be reclassified to Correctional Officers.
Chairman Arberry said that his understanding of the bill was that it left the positions as Forensic Specialists.
Ms. Giunchigliani asked for clarification. She recalled that the positions had been retained as Forensic Specialists and the concern was that the function and program would be lost if the positions were reclassified to Correctional Officers. She said her recollection was that in budget closings the positions would remain as Forensic Specialists and a salary increase would be addressed in the bill.
Chairman Arberry noted that he had the same recollection.
Mr. Hettrick said he recalled there was a concern that reclassification would require Forensic Specialists to wear uniforms that could inhibit their interaction with patients. The second concern was that reclassification could blur the boundaries of duties and responsibilities and cause Forensics Specialists to be assigned Correctional Officers’ duties. Mr. Hettrick added that there was an equity issue that needed to be addressed.
Mr. Stevens said the Committee would have an opportunity to reconcile the Subcommittee’s action when the issue was closed in full Committee.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS ASSEMBLY BILL 173.
ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY
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Assembly Bill 257: Makes appropriations to restore balance in Contingency Fund. (BDR S-1235)
Mr. Stevens introduced Assembly Bill 257 and said if it was approved it would replenish the Contingency Fund to slightly over $12 million at the close of the 2003 Session. He said the Committee could amend to reduce the amount, leave it at $12 million or leave the amount at slightly over $12 million. He said the Committee could change the effective date on that particular bill and that would assist in maintaining the 5 percent minimum fund balance requirement in FY2002-03.
Chairman Arberry said the Committee could amend the bill to make the effective date July 1, 2003.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS ASSEMBLY BILL 257.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Assembly Bill 267 (1st Reprint): Revises provisions relating to certain fees and surcharges charged and collected in regard to vehicles leased for short term. (BDR 43-961)
Mr. Stevens said that the Committee had heard A.B. 267 earlier when Mr. Parks testified regarding the bill and that it involved short-term car leases. He said either he or Assemblyman Parks could answer questions.
ASSEMBLYMAN PARKS MOVED TO DO PASS ASSEMBLY BILL 267.
ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Assembly Bill 332 (1st Reprint): Makes various changes relating to persons with disabilities, service animals and service animals in training. (BDR 38-1)
Chairman Arberry suggested the Committee amend the bill and take out the gross misdemeanor language.
Ms. Giunchigliani recommended to amend the language that referred to “guilty of a gross misdemeanor” and to insert instead “a fine not to exceed $500.” She said the rest of the bill should stand.
Ms. Leslie said Senators Titus and Townsend sponsored another bill having to do with guide dogs that she mentioned the last time the Committee discussed A.B. 332.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS ASSEMBLY BILL 332.
ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
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Assembly Bill 392 (1st Reprint): Increases amount of longevity payments to state employees. (BDR 23-964)
Mr. Stevens explained that Assembly Bill 392 would increase longevity payments to state employees and there was a fiscal impact on the original bill of $775,000, half of which would be a General Fund cost if the bill passed out of Committee and through the Legislature. He said that the cost would have to be absorbed within the payroll category of each state agency that was affected.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS ASSEMBLY BILL 392.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION PASSED WITH ASSEMBLYMAN HETTRICK VOTING NO.
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Mr. Stevens said there were several bills for the Committee to discuss in preparation for a possible vote the following week. He noted A.B. 515, A.B. 537, and the Public Employees’ Benefits bills, A.B. 286 and A.B. 544, that were in committee and that set the monthly contribution for group insurance on behalf of state employees and the base rate for retirees for the upcoming biennium.
Chairman Arberry said he was looking for discussion and comment on these bills. He began the discussion with Assembly Bill 515.
Assemblyman Parks noted that if A.B. 515 was not passed there were some problems with the current legislation that should be rectified. The recommendation in the first reprint included certain thresholds regarding the value of a home and the amount of liquid assets that an individual could have in order to qualify for a property tax assistance rebate. Mr. Parks said A.B. 515 would allow individuals with liquid assets of less than $100,000 to receive benefits from the program. He said he did not think that was the intent of the program as initially envisioned. Mr. Parks said the Committee also needed to discuss whether or not to provide property tax assistance and then recapture the rebate upon sale of the property or demise of the owner.
Mr. Hettrick said he agreed with the Chairman of the Committee on Taxation. He said the Committee on Taxation had amended the bill, which had originally had a $400,000 liquid asset cap and $75,000 assessed value of a home, which translated into a home worth over $220,000. He said that the amended bill still seemed excessive to him. He questioned the reasonableness of providing a property tax rebate to individuals who had $100,000 in liquid assets and a home value of $200,000 based on a $70,000 assessed value. He also said that it seemed very reasonable to develop a recapture provision, but suggested the Committee establish a dollar formula below which the recapture would not apply. He gave as an example an individual who had a home with a $25,000 assessed value or less and $75,000 in liquid assets, or some figure that was very low. He said he did not think it was reasonable to require recapture in such a situation. He reiterated that it seemed reasonable to recapture state funded property tax assistance on a $200,000 home and $100,000 liquid assets at the time of sale or demise of the owner.
Assemblywoman McClain noted that after hearing testimony on A.B. 515 the Committee on Taxation amended it. She later received information from the Division on Aging that the amendment eliminated from the program 1,500 people who had been receiving the tax rebate. She noted that two of those individuals had liquid assets of over $900,000 as estimated from their reported earned income. She observed that by changing the eligibility threshold a couple of millionaires and 1,500 people would be eliminated from receiving benefits. She commented that the Committee was in a “Catch 22” situation.
Ms. McClain continued with an illustration of an 80-year-old individual with a $100,000 certificate of deposit. She observed that the individual would never touch that money since it earned a little bit of cash each month and was a nest egg. Additionally, in that age bracket, and particularly as a female, the individual was most likely living on a social security pension of $400 or $500 a month. Ms. McClain said there were many seniors that appeared to have ample liquid assets on paper but who would not use them for day-to-day living.
Ms. Giunchigliani suggested the Committee discover a way to develop a combination of income levels and liquid asset caps from the old categories in an effort to address the situation pointed out by Ms. McClain.
Mr. Hettrick agreed that the problem was difficult. He noted with regard to Ms. McClain’s discussion, that the maximum tax rebate was $500. A $100,000 certificate of deposit might earn from 3 to 6 percent and yield from $3,000 to $6,000 a year. He observed that an individual who owned a $200,000 home with between $3,000 and $6,000 interest income from a certificate of deposit and other income should be able to forego a $500 property tax rebate. He said he did not think the plan would eliminate assistance per se. Mr. Hettrick went on to discuss how the numbers were derived. He said the Committee was told that because there was no current limit the figures and limits were guessed at and set at $400,000 and $75,000 assessed valuation. The numbers were arbitrary, and “just picked out of the air.”
Assemblywoman McClain said that was not totally accurate because there had been income limits.
Chairman Arberry said the Committee would seriously review the bill the next week. He noted discussion on A.B. 537 would be deferred until the next week. Mr. Stevens added that there was a fiscal note and three or four components to A.B. 537.
Mr. Stevens said that the Committee needed to review Assembly Bill 249, termed the Public Employees’ Benefits “clean up bill” and asked the Committee to consider whether or not to create a single rate for monthly insurance premiums by commingling the claims experience of state employees/retirees and non-state employees. Currently state retirees and active state employees were rated in one pool and non-state retirees and non-state employees were rated separately. There had been notable increases in non-state retiree premiums. There were a number of bills in committee that proposed to commingle all of those individuals into one rate and that would raise the current premiums paid on behalf of state employees. The fiscal note was about $4.5 million a year, half of which would come from the General Fund. He added the best way to accomplish that would be to raise the premium included in A.B. 544, and state agency budgets would have to reflect a commensurate increase. He said there were a number of charges that would cross all state agency lines in their budget, as with the Department of Information Technology (DoIT) charges that would affect several budget accounts. Mr. Stevens said that if the Committee approved the bill fiscal staff needed concurrence of the Senate and Assembly before payroll could be rerun. He said it was a time-consuming and difficult exercise that staff preferred to do no more than once.
Ms. Giunchigliani noted that the Committee was also reviewing Assembly Bill 165 and Assembly Bill 286, which commingled rates for state and non-state participants. The key to A.B. 286 was that starting in July 2003 those local government jurisdictions with retirees in the program would be required to subsidize premiums. Ms. Giunchigliani indicated that the Committee would have to find an additional $4.5 million and deal with A.B. 544 as Mr. Stevens indicated, and then next session revisit the situation with a larger pool of paying individuals.
Chairman Arberry said the Interim Finance Committee would meet at 3:30 p.m. Mr. Stevens said that IFC highlights had been distributed. Mr. Parks noted that the Committee on Taxation would meet at 1:30 p.m. Chairman Arberry said Transportation would meet at 1:30 p.m. and Elections at 5:00 p.m.
Chairman Arberry adjourned the meeting at 1:10 p.m.
The following bills were not heard by the Committee:
Assembly Bill 546: Makes appropriation to City of Las Vegas for support of Youth Athletic Grant Program. (BDR S-1347)
Assembly Bill 547: Makes appropriation to City of Las Vegas for additional services to child care providers through Child Care Improvement Grant Program. (BDR S-1346)
Assembly Joint Resolution 16: Proposes to amend Nevada Constitution to provide that State Treasurer is ex officio State Controller. (BDR C-1109)
RESPECTFULLY SUBMITTED:
Catherine Caldwell
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: