MINUTES OF THE
SENATE Committee on Finance
Seventy-second Session
May 19, 2003
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:45 a.m., on Monday, May 19, 2003, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Dean A. Rhoads
Senator Barbara K. Cegavske
Senator Sandra K. Tiffany
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATORS PRESENT:
Senator Randolph J. Townsend, Washoe County Senatorial District No. 4
Senator Ann O’Connell, Clark County Senatorial District No. 5
STAFF MEMBERS PRESENT:
Gary Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Julie Brand, Program Analyst
Michael J. Chapman, Program Analyst
Jim Rodriguez, Program Analyst
Julie Walker, Committee Secretary
OTHERS PRESENT:
The Honorable James W. Hardesty, Second Judicial District, District Courts of Nevada
The Honorable Peter I. Breen, Second Judicial District, District Courts of Nevada
Mary Liveratti, Deputy Director, Department of Human Resources
Margaret McConnell, Owner-Administrator, The Charleston in Las Vegas
Wendy N. Simons, Lobbyist, Chairman, Northern Coalition of Assisted Residential Environments/CARE
Keith L. Lee, Lobbyist, State Board of Medical Examiners
Philip H. Brown, Acting Chief, Investigation Division, Department of Public Safety
John P. Comeaux, Director, Department of Administration
Terry R. Crawforth, Administrator, Division of Wildlife, Department of Conservation and Natural Resources
I am going to pass out Bill Draft Request (BDR) C-1353 for your review.
SENATE BILL 391: Provides for stipends and payment of costs of postage for Legislators under certain circumstances. (BDR 17-949)
BILL DRAFT REQUEST (BDR) C-1353: Propose to amend the Constitution to revise provisions governing compensation of legislators. (Later introduced as SJR 11)
This is the bill draft we requested to replace Senate Bill (S.B.) 391. The BDR provides for compensation to members of the Legislature for income loss. We indicated we would propose legislation to amend the Nevada constitution to provide compensation to members of the Legislature for each day of service. That action will remove the archaic provision limiting legislative pay to 60 days. It also makes changes for reasonable allowances to members for expenses incurred for telephone and cell phone calls, postage, express charges, newspapers, and stationery, rather than the $60 now provided under the constitution.
Senator Coffin:
I would like to speak in support of this because I would like people to be able to come from their businesses and professions to the Legislature. We should pay people for each day they are here.
Senator Raggio:
The committee was in full agreement to have the bill introduced. It will be introduced and re-referred.
Gary L. Ghiggeri, Senate Fiscal Analyst, Analysis Division, Legislative Counsel Bureau:
As of today, the status report discloses all budgets have been heard, and 399 of the 410 budgets have been closed. There are 11 more budgets to be closed. All capital improvement projects have been reviewed. There have been 121 bills referred to committee, 41 bills have been processed, 80 bills are in committee, 61 bills have been heard, and 13 are scheduled to be heard this week.
Supreme Court Rural Drug Court - Budget Page COURTS-31 (Volume 1)
Budget Account 101-1495
ASSEMBLY BILL 29 (1st Reprint): Makes various changes concerning administrative assessments and forfeiture of bail. (BDR 14-130)
The Honorable James W. Hardesty, Second Judicial District, District Courts of Nevada:
We are requesting that the committee restore the money cut from the Governor’s proposed budget for drug court funding. Since 1995, the Legislature has been funding drug court with one-shot funding. This year the Governor put the same dollar amounts in his budget that had been funded for the past sessions on a one-shot basis. The judiciary made an affirmative decision not to seek increases in those funds from the General Fund, but rather to deal with drug court and mental health court funding through administrative assessments. Consequently, Assembly Bill (A.B.) 29 was proposed to increase administrative assessments by $5 for specialty court funding. The money is intended to address a number of issues, principally the loss of funding through federal grants, and cuts in funding that have previously provided funding for prisoner re‑entry programs and for drug courts in areas of the state where those programs do not exist. For example, there is no drug court in White Pine or Elko Counties, and we want to provide funding for drug courts in those areas.
Rather than placing the burden on the General Fund, we propose A.B. 29. We are asking that the same funding be maintained that has been provided previously through the one-shot funding, so we can use the funds from A.B. 29 for other purposes. If the Governor’s recommended funding is withdrawn or cut as proposed by the subcommittee, we will have to take funding out of A.B. 29.
Senator Raggio:
We have some information to be made part of the record. Apparently, in the first, third, and ninth districts, where there are now rural drug courts, there were additional program costs due to an increase in the per-client treatment funds. The result was an impact of $85,000. In the second judicial district, an additional 25 clients needed treatment in the mental health court at a cost of $4555 each. The original amount did not include the provider costs, and that is the corrected amount. That resulted in an impact of $114,000. There was a need in the drug court to treat an additional 16 clients at a cost of $2200 each. That additional impact was $422,000. This should be reflected.
Additionally, there was a 7 percent cut to an existing program that adds $84,000, and the loss of federal funding was $55,000 in integrated case service manager funds of approximately $60,000. The total federal fund reduction was $115,000. In the Eighth Judicial District, a local law enforcement grant will be lost in fiscal year (FY) 2004 and thereafter. The cost to the program was about $444,000 per year. In Clark County, $200,000 per year will be lost from the proceeds of the DUI traffic school because of reallocation, and the mental health court needs have increased as well.
Judge Hardesty:
There is no mental health court yet in Clark County.
Senator Raggio:
Right, it would be started for Clark County.
Judge Hardesty:
In Washoe County we have been operating our mental health court with no money, and we want to get funding for it.
Senator Raggio:
We would have to restore general funding of $1,012,000 with the understanding that if A.B. 29 is passed, we could write language in it that any excess that would come from A.B. 29 would revert to the General Fund, so this amount then could be lowered. Would that meet your needs?
Judge Hardesty:
We were hoping you would agree to restore the funds and hold us harmless.
Senator Raggio:
That is what we are talking about doing, but in the unlikely event that A.B. 29 produced more than what was projected for the budget, it would then be utilized instead of the General Fund.
The Honorable Peter I. Breen, Second Judicial District, District Courts of Nevada:
If the funds were restored with the provision you stated, at least we could have the security of maintaining our existing programs and not losing ground. This is a critical time.
Senator Raggio:
Can staff give some guidelines on what would be necessary for us to do to make it whole?
Julie Brand, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
The estimate of court assessments is approximately $2.5 million per year. The courts have identified additional needs of $2.9 million each year. If we were to restore the General Fund, there would still be a shortfall of $1,037,000 in FY 2004 and $412,000 in FY 2005. That is taking the needs, restoring the General Fund at the $1 million level and subtracting the needs from the estimated court assessments at $2.5 million per year to arrive at the yearly shortfalls on the court assessment side. A spreadsheet is provided for supplemental explanation on page 4 (Exhibit C).
Senator Tiffany:
What is the one-shot amount in the last year of the biennium?
Ms. Brand:
For these particular courts, it is $1,350,000 over the biennium.
Senator Tiffany:
For the last biennium, those particular courts had $1,300,000, and in order to maintain that amount would take $1,300,000. That would mean we are looking at $6 million. I feel you are getting the amount you had before plus more. I want to explain to the committee that the reason it was closed was to wean it away from the General Fund if there are assessments possible. We did that, plus we met the growth. It is not status quo. You may talk about needs, caseloads, backlog, and expansion, but what is represented is a need to be reinstated. We are over the amount for the last biennium. We went from $1 million to $5 million. Now we are going from $1 million to $6 million. I will be voting against this budget. I agree with what we decided in the subcommittee.
Judge Hardesty:
I understand Senator Tiffany’s position, but I think there is a misunderstanding on her part. Much of A.B. 29 is being used to restore funding lost in other areas. We are trying to make it up and make some progress at the same time. In Washoe County, for example, we have been capped at 18 defendants per month. We need a cap of 34. Any number over 18 will go to prison or diversion court, but not to the drug court system where we can adequately deal with them. Additionally, Clark County is losing $444,000 in a federal grant. We are using A.B. 29 to make up ground that we are losing from sources we did not have. Admittedly, A.B. 29 gives us an opportunity to make significant inroads toward our goals. If we lose the funding that the Governor proposed at the same time, we are going backward.
Senator Coffin:
I appreciate the additional information, because it helps to clear up what was done in the subcommittee. We could consider writing language into the bill that if there is money in the biennium over the required amount, the Interim Finance Committee (IFC) could disburse it in conjunction with the courts.
Senator Cegavske:
I would indicate to the committee that I will be abstaining on this vote. I filed a letter with the director of the Legislative Counsel Bureau for the public record disclosing that I am an employee of WestCare Foundation, Inc., a non-profit corporation. I will abstain to make sure I avoid any possible conflicts of interest.
Senator Tiffany:
I will be voting no because we went from a $1 million budget to a $6 million budget. We could cover their needs by an assessment, but we decided to add $1 million General Fund back in, and I believe in what we did in subcommittee.
Senator Raggio:
I feel that these are vital programs, but in this situation the need is clear to keep the programs at least at the basis of need. I think the money is better spent here than having it spent in the other correctional areas. I would ask that a copy of the Annual Specialty Court Funding Needs be noted on page 5 (Exhibit C).
SENATOR COFFIN MOVED TO AMEND THE BUDGET WITH THE ADDITIONAL GENERAL FUND AUTHORIZATION FOR $1,012,500 CONTINGENT UPON PASSAGE OF A.B. 29; IF ADDITIONAL MONEY BEYOND THE AMOUNT INDICATED MATERIALIZES FROM THE A.B. 29 ASSESSMENT, AUTHORIZATION FOR THAT ADDITIONAL AMOUNT OF FUNDING COULD BE REQUESTED FROM THE INTERIM FINANCE COMMITTEE, WITH A LETTER OF INTENT ISSUED.
SENATOR MATHEWS SECONDED THE MOTION
THE MOTION CARRIED. (SENATOR TIFFANY VOTED NO. SENATOR CEGAVSKE ABSTAINED FROM VOTING.)
*****
SENATE BILL 106 (1st Reprint): Provides for imposition of certain fees in certain actions and proceedings filed in courts of this state. (BDR 2-614)
Mr. Ghiggeri:
There was a suggested amendment distributed when this legislation was previously heard. That amendment was for Section 2-1(c) that would strike the “or defendant” in each case. I believe the way the committee has closed the court’s budgets incorporates this additional revenue in those budgets.
Senator Cegavske:
Is there a one-time filing fee, then a $30 fee for each additional respondent to answer?
Judge Hardesty:
An individual pays a filing fee with his responsive pleading. Every additional respondent pays $30 to file his answer. If that person prevails in the action, he recovers the $30 fee as a taxable cost. The funds are used to upgrade technology in order to accommodate these multi-party cases.
Senator Raggio:
To reaffirm information, of the $30 filing fee for multi-party cases, for each additional party after the first plaintiff and defendant, the funds are disbursed as follows: $8 to the local district court for technology; $7 to legal aid, of which $5 is for indigents and $2 is for elderly; $10 to the State Court Administrator for statewide technology purposes and direct distribution to courts; and $5 retired justices and judges duty fund. Section 3 also added the $50 filing fee for appeals and rehearing requests in the Supreme Court to be used for technology.
SENATOR COFFIN MOVED TO AMEND AND DO PASS S.B. 106.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
ASSEMBLY BILL 326 (1st Reprint): Requires separate regulation of residential facilities for groups which claim to provide assisted living services. (BDR 40-954)
Assemblywoman Barbara E. Buckley, Clark County Assembly District No. 8:
There are many assisted-living facilities being built in the state. Unfortunately, most of them are so costly that the average person on social security cannot afford to live there. In the course of developing a project to create a non-profit assisted-living facility in Clark County, an issue came up regarding the definition of “assisted living.” The statutes are not up to date, and “assisted living” is under the heading of “group homes.” It is not being defined as the product it is intended to be.
I was asked to bring A.B. 326 by a variety of groups. In that effort, some of the private sector assisted-living groups thought we would need more time, and it would be more appropriate through the regulatory process to look at all of the issues. We have guidance from many groups across the country, and A.B. 326, in its first reprint, would allow regulations to be developed to restrict people from being able to call something assisted living unless it truly is. The bill was developed with the cooperation of Mike Willden, the Aging Division, AARP, and private sector individuals. Everyone is in accord that this is a way to define to seniors and their families what they are getting.
Mary Liveratti, Deputy Director, Department of Human resources:
There are a few minor changes that should be made in the bill.
Senator Raggio:
The first reprint should require that the State Board of Health adopt regulations to prohibit a residential facility from advertising it as an assisted-living service unless it provides certain things. What are some of those things that would be mandated under the new definition?
Ms. Liveratti:
One of the key concepts for assisted living is the philosophy that the individual should be involved in providing his own care. There is more independence in assisted living; the person is treated with dignity and respect, and is involved in the decision-making process. There is an emphasis in the bill on seven items listed that are the core principles. These core principles were developed by the National Assisted-Living Work Group, and we have incorporated them based on those recommendations. The seven items appear on page 3 of the bill. The principles go beyond providing care. It is an active partnership between the resident and the facility to provide that care. Number 1 of the bill on page 3 at the bottom, subsection d (1) says it promotes each resident’s quality of life and right to privacy. That is the reason the issue with the individual living units is part of this bill. No one is forced to be a roommate to someone else unless both parties consent to that arrangement. The individual is given more freedom of choice in his living setting.
Senator Raggio:
The seven components are clear. Did you say there was another proposed amendment?
Ms. Liveratti:
On page 3, line 27, we would like to delete the word “separate” from the language, “contain toilet facilities and a separate sleeping area or bedroom.” We would like a studio apartment arrangement to fall into the category of assisted living. There was concern by the industry that if we had a separate sleeping area, a studio apartment would not fall into this definition.
We would also like to consider, perhaps not in the bill, but for the record, allowing the Bureau of Licensure and Certification, when they develop their regulations, to have the ability to waive any provision that would prevent someone who has a home and would provide excellent care from being licensed and certified. The Bureau of Licensure and Certification could waive parts of the regulations if it would create a hardship on the provider.
Senator Raggio:
Do you have language for that amendment?
Ms. Liveratti:
No, we do not.
Senator Raggio:
We would need that provided to the committee in written form.
Ms. Liveratti:
We have all agreed that we would like to delete, in its entirety, subsection (c), on line 31, page 3. There is some concern about the impact that could have on liability insurance.
Margaret McConnell, Owner-Administrator, The Charleston in Las Vegas:
I have served Nevada’s seniors for over 20 years. In addition to serving as an administrator for 20 years, I also chaired the Governor’s board of examiners for long-term care administrators, and I serve as the southern Nevada chairman of CARE, our industry’s professional organization. I am here to support Ms. Liveratti’s proposed amendments to A.B. 326, because they will reduce the potentially devastating fiscal impact to the Bureau of Licensure and Certification if the bureau attempts to develop regulations as the bill currently reads. The bill as it now stands would be opposed by the majority of residential care assisted‑living facility administrators in Nevada. When our Board of Examiners began licensing residential care administrators a few years ago, we had to develop new regulations. That action was opposed by numerous residential care and assisted-living administrators. We had to conduct numerous public hearings and meetings with industry representatives before we were finally able to adopt a final set of regulations. I urge this committee to refrain from passage of this bill until it is appropriately amended.
Senator Raggio:
Do the amendments meet with your approval?
Ms. McConnell:
Yes, sir.
Wendy Simons, Chairman, Northern Coalition of Assisted residential environments:
I have offered my written testimony (Exhibit D). As I understand the discussion from those who have spoken, you want to see the amendment in writing before it passes out of the committee, and I hope that would be the action.
Del Williams, Board Member, Care Committee:
I have submitted written testimony (Exhibit E) from Larry Frye.
SENATOR RAWSON MOVED TO AMEND AND DO PASS A.B. 326 WITH CHANGE ON PAGE 3, LINE 27 TO REVISE SECTION 1 (7) (b) (1) BY DELETION OF THE WORD “SEPARATE” AND CHANGE ON PAGE 3, LINES 31 THROUGH 36, TO DELETE SECTION 1 (7)_(c).
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
Senator Raggio:
Please bring the amendment to the committee first before it is taken to the floor, and provide the individuals with a copy of the amendment. If there is any opposition, please make the opposition known to both Mrs. Buckley and to this committee.
SENATE BILL 250 (1st Reprint): Revises various provisions relating to regulated businesses and professions. (BDR 57-835)
Senator Randolph J. Townsend, Washoe County Senatorial District No. 4:
I am here to talk about the financial component of the bill dealing with insurance and Board of Medical Examiner reforms. You will see several components in the bill. Flex-rating for insurance changes the date when the insurance commissioner will review the proposals for rate changes, allowing carriers to be more competitive. Protecting the public is the main thrust. It deals specifically with how the boards are audited and where they are located, particularly the medical board. The main component, and the reason we are before this committee, is because it deals with an appropriation to help offset the rising cost of medical malpractice insurance over the next 2 years.
Senator Raggio:
Is there a summary of the bill by section?
Senator Townsend:
Yes, we have a 5-page summary that can be provided.
Senator Raggio:
Before we discuss the fiscal aspects, there is a concern with the emphasis on the Board of Medical Examiners. What is the reason to change the location of the board’s office?
Senator Townsend:
Seventy percent of the licensees, and seventy percent of the people in this state live in southern Nevada. The disciplinary and regulatory hearings occur mainly in northern Nevada. It is not practical for individuals to fly to northern Nevada for the hearings.
Senator Raggio:
What section is that?
Senator Townsend:
I do not have the annotated version of it.
Senator Raggio:
I think we need to have a copy of that when you can get it to us. Is there an answer to the question of the necessity to move the office, rather than to set hearings in the south?
Senator Townsend:
Given the complexity and controversial nature of the cases, individuals should have better access.
Senator Raggio:
I believe we are talking about Section 11 that says, “not later than July 1, 2007, the board shall transfer its principal office to Las Vegas and maintain its principal office in Las Vegas thereafter.” It seems the necessity of moving the office is questionable when there is authority to hold hearings anywhere in the state. Is this true?
Mr. Townsend:
They do have the authority. Let me answer that specifically. One of the reasons for the move is because there has been a perception by many that the staff of the board has not been responsive to the need for hearings in the south.
Senator Ann O’Connell, Clark County Senatorial District No. 5:
One of the major complaints we hear is from people in the south who request information from the board but are told they must physically come to the north to receive that information. It has not been a friendly relationship for the people in the south who have been required to have information for audits of any kind of financial information. They have been required to fly to the north to receive that information and then to personally pay for the information that they have received. Apparently, there was no way it could have been conveniently given to them either through an e-mail request or through sending a check, and then having it mailed to them. They have been told that is not done.
Senator Raggio:
Why can we not mandate that they cooperate fully in requests for the information instead of moving the entire office?
Senator O’Connell:
Because the majority of the people served live in southern Nevada, it was initially felt that the northern office would certainly try to be accessible to the people served in the south. That did not happen. There would be no problem with retaining an office in the north. They did have an office in the south about 15 years ago. For unknown reasons, the office was moved to the north.
Senator Tiffany:
When the licensees request, want, and require better communication, I believe we should listen to the licensees. I believe that discussion came from the licensees. Senator Townsend, I want to know on the insurance portion, what do you think we can constitutionally do to look at the medical malpractice rates to either stabilize them, decrease them, bring in more insurers, or cap the insurers?
Senator Townsend:
The State of Nevada faces a most unique challenge since the federal laws make the state the regulatory entitity over insurance. This situation works if a state’s population is high; however, Nevada is not a desirable market because of the small population. The industry only comes here if it is going to make money. We believe we have excellent physicians, but it is the litigation that is always a challenge. Insurance is an issue whereby claims against the industry at large or losses against industry drive many other components of the industry. The industry looks where money is to be made, and it is not required to be anywhere or stay anywhere. We are completely disadvantaged. There is a premium that is paid on every policy in the State of Nevada because it is a 24‑hour town. If we want to crack down on the industry, it just packs up and leaves. We have to find the right balance. One thing in here is the flex-rating in which they can file a rate and use the rate, and over the next 60 days the insurance division then can review the rate and either reject it, amend it, or accept it. That gives more advantage to us as a state for purposes of being competitive and inviting more people in here. We do not have an answer other than to try to find a good insurance regulation.
Senator Tiffany:
I understand on the Assembly side there was a bill passed with a cap on insurance. Could you comment on the cap versus the flex-rating?
Senator Townsend:
I have not seen the cap.
Senator O’Connell:
We have talked to some of the insurance companies about setting protocols in their insurance packages. If those protocols are met by the doctors, they can be used as a measurement. If all of the procedure protocols have been met for a particular situation, the doctor could not be held accountable for any unintentional consequences of his actions.
Senator Tiffany:
Do you see the insurance division writing these protocols?
Senator O’Connell:
Yes.
Senator Rawson:
I read there can be no private reprimand, specifically in Section 58 where it talks about alcohol. I cannot tell whether it allows treatment and other quiet procedures to deal with a substance abuse problem.
Senator Townsend:
The individuals who recognize they have a problem and voluntarily seek help should not be discouraged. The bill supports public notice after a voluntary effort and appropriate treatment is provided and the individual continues to have the problem. The first time we offer encouragement, but the second time we think the public should be aware because we want the public protected.
Senator Rawson:
Has this changed the status quo as far as discoverability? Was it still discoverable before, or are we changing the standard on malpractice and will it make the situation worse?
Senator Townsend:
It was felt that we should separate the issues and leave the issues of liability for the other bills dealt with in the committee. We would only deal with our responsibilities in the Senate Committee on Commerce and Labor, which are the licensees through the licensing boards and insurance.
Senator Rawson:
It raises the issue, will we make a fundamental change?
Senator Townsend:
There is no fundamental change, just the liability in this bill.
Senator Raggio:
Let us look at Section 172 and the related sections that create a critically impacted medical specialty subsidy fund and the required appropriations for this fund and its purpose.
Senator Townsend:
The purpose of the fund is for a physician who is identified as part of the critically impacted medical specialty throughout the state to apply to this fund and state his case. The point is, you cannot apply simply because your insurance rates have skyrocketed. You have to meet a very serious standard as a practitioner.
Senator Raggio:
We need to have an understanding. What are the qualifying criteria in Sections 173 and 174 to get a subsidy, and what is the source of revenue for a subsidy?
Senator Townsend:
We have debated where this revenue should come from. Obviously it has to come from the General Fund. I think we have put $3 million in here.
Senator Raggio:
What section, please? I do not see a section that has a specific provision for an appropriation. Staff has given me a sheet (Exhibit F) that shows the fiscal impact, but is there some amendment to this that we do not have, or is it in here? In our book we are looking at the first reprint of S.B. 250.
Senator O’Connell:
The amount initially talked about was $1.5 million and as we went through the hearings it grew to a minimum of $2. The number we finally ended up with was $3 million. We approached this by first looking at what other states had done for doctors. There are 6 different states that have funds available for doctors. We try to encompass in the language the things that have been successful in the other states. It is a temporary fund for 2 years. The Board of Medical Examiners now has a very generous reserve and is thinking about building a fund. The board considered giving doctors a refund on their dues. The dues would be reduced to $400.
Senator Raggio:
We will need some explanation of the sheet that was just distributed. It shows revenue as a transfer from the Board of Medical Examiners of $402,000 in FY 2004, and expenditures that would total $3.5 million in the first year and $3.1 million in the second year. You have unfunded expenses of $3.158 million in the first year, with $3.155 million that I assume would require a General Fund appropriation for this biennium. Is there a plan to raise revenue for this purpose?
Senator Townsend:
The analysis done over the past 10 years indicates the band-width used for actuarial purposes is too narrow. The “good” doctors subsidize the “bad” doctors. The study also considered a doctor’s willingness to settle for less than policy limits. If the carrier refuses, it goes to litigation, and the doctor loses an amount of money above what he was willing to accept in settlement, why should that be associated with actuarial assessment and risk to him? He made a determination to settle early, so that would have to be considered. That is where the $402,000 came from in Section 178. The $2.95 million is the subsidy fund. Originally, we said that we would take the excess from the Board of Medical Examiners Reserve Fund, but that was deleted because they subsequently cut back their fees.
SENATE BILL 188: Makes various changes concerning access to health care services for persons in this state. (BDR 40-743)
Senator Rawson:
In S.B. 188 we set up a similar fund for which we did a careful study. It was under $4 million per year. I am preparing an amendment to take the appropriation out of S.B. 188, so we will deal with the policy, but it will leave that fund to be done through here.
Senator Mathews:
Did you indicate that some money could be found by the Senate Committee on Taxation?
Senator Townsend:
We feel an obligation, since we put it in the bill, to find the money for it. We feel it is that important.
Senator Mathews:
I am concerned about the precedent that would be set. I do not think the people of Nevada should set that type of precedent at this point.
Senator Townsend:
That is a legitimate concern. We do not want to set a precedent that would hurt us, but we feel we should give it our good faith support.
Senator Raggio:
You indicated this appropriation would be temporary. If you raise tax revenues specifically for this purpose, how is it temporary?
Senator Townsend:
It would only be for a 2-year period until it stabilized.
Senator Raggio:
Would it otherwise have to be kept in place until the market stabilized?
Senator Townsend:
We would find an appropriate tax for this. At the end of the 2-year subsidy, the revenue would stay in the General Fund for purposes that this committee would decide.
Senator Raggio:
There are other issues that have been raised. I am not questioning the intent, but I think it has some precedential considerations as well as funding considerations. We will have to have additional hearings after we receive the information we have requested.
Senator Tiffany:
Senator O’Connell, if you looked at what the operations of the Board of Medical Examiners cost each month and multiplied that by 2, do you know what that number would be? Do you know what the reserves would be even if the $200 was rolled back? I do not think the reserve is appropriate, it is in excess. Maybe more General Fund is needed.
Senator O’Connell:
They pay $100,000 in rent, $200,000 annually in advertising, and two staff members are receiving a salary. We did not feel that the advertising was necessary because it is general information, but we are talking about approximately $5 million in excess. They keep $2 million in excess in case of an extraordinary malpractice suit.
Keith L. Lee, Lobbyist, State Board of Medical Examiners:
We have an operating budget of about $2 million per year. We will end this fiscal year with $3.3 million in reserve funds. We have been advised by our certified public accountant (CPA) that we should have an ending fund balance of approximately $1 million every year. In action taken last December, the Board of Medical Examiners rolled back the biennial registration fee for physicians from $600 to $400. If S.B. 250 is processed and Section 178 remains in, we are required to fund that for a cost of $400,000. Because of the reduction in licensing fees, because of the increased costs required by A.B. 1 of the 18th Special Session, we will have an ending fund balance at the end of the first biennium of about $2 million. At the end of the second year the balance will be $787,000. We do not have the money in the fund to pay for the study as requested in section 178.
I would speak about moving the office to Las Vegas. We did have an office in Las Vegas and it was closed for lack of interest. This was some time ago. Dr. English, our president, committed on the record to opening a Las Vegas office at the Senate Committee on Commerce and Labor hearing.
Senator Raggio:
Is that an additional cost that is not contemplated?
Mr. Lee:
Yes. However, we committed to do that and to hold our meetings via teleconferencing, which will be an additional cost. With respect to Section 39 of the bill, I believe if that section were enacted as written now, any time a physician is sued for malpractice, that physician must report that to the Board of Medical Examiners. Subsection 3 of Section 39 requires that any report made by a physician pursuant to this particular section will be public record. Therefore, even before there is a finding of any responsibility, the fact that a physician has been sued for malpractice is part of the public record. Our procedure now is, of course, part of the public record if a judgment of malpractice is entered against a physician. It is also our practice that if there is a settlement of a malpractice claim in excess of $5000, that is also on the record. That is information supplied to us by insurance companies.
There are three other sections that deserve scrutiny, Sections 37, 44 and 58, which increase the burden of proof that the Board of Medical Examiners must now establish in order to discipline a physician. There is now a “preponderance of the evidence” for revocation and other disciplinary proceedings. The sections I denoted to you increase the burden the board must carry from a “preponderance of the evidence” to “clear and convincing evidence” in order to revoke a physician’s license. We to not think it is good public policy to increase the burden the board must carry in order to discipline a physician.
Senator Raggio:
What about the complaint that the board has been less than responsive and obstructive?
Mr. Lee:
I believe a representative of the Clark County Medical Society wanted some financial records of the board. We were happy to provide them, and we were willing to waive the cost. We needed to know what was requested, not just “financial records of the board”. We had to know more than that. Finally, the individual from the Clark County Medical Society came to the Reno office with an attorney, and the attorney and the board’s attorney decided the information needed was the audited financial records.
Senator Raggio:
We will close the hearing on S.B. 250.
Public Safety, Division of Investigations – Budget Page PS-77 (Volume 3)
Budget Account 101-3743
Senator Raggio:
On the last hearing for budget account 101-3743, we had a discussion about the fiscal impact of restoring some of these positions. What is the status of this budget now?
Jim Rodriguez, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
The Assembly Committee on Ways and Means closed this budget, with the add‑back of 15 of the 21 positions recommended for elimination by the Governor. If you will review pages 5 and 6 of the closing document (Exhibit G), you will see the three scenarios that this committee requested staff to go back to investigate. I have provided a review of options 2 and 3 (Exhibit H) for your information.
Option number 3 is the add-back of 15 positions approved by the Assembly Committee on Ways and Means. The Governor recommended adding back 6 positions in direct support of supervisory support of the Narcotics Control Task Force. That is option 1. Option 3 is the proposal presented by the agency to add back 15 of the 21 positions, including the 6 positions identified in option 1 and several positions involved with the Las Vegas Federal Task Force, that is the high-intensity drug-trafficking area task force.
Senator Raggio:
What is page 6?
Mr. Rodriguez:
Page 6 is FY 2005.
Senator Raggio:
In our discussion the other day when Chief Brown was here, we looked at the positions that were vacant.
Mr. Rodriguez:
That would be option 2 on page 4.
Senator Raggio:
In addition to that there were several positions that needed to be elevated to supervisory status.
Mr. Rodriguez:
That would be option 2. If the committee chose to approve this option, positions currently vacant would require some flexibility, and possibly reclassifying and reorganizing how the vacancies would be accommodated to maintain the services.
Senator Raggio:
I see a summary of the three scenarios on page 4. Does page 5 give the cost of scenario 1 located?
Mr. Rodriguez:
Yes. Even with the add-back of 6 positions, that scenario would result in a General Fund savings of $964,152 in salaries and $1,075,000 total savings when compared to current authorizations. That is the scenario supported by the Governor.
Senator Raggio:
What is scenario 2?
Mr. Rodriguez:
Scenario 2 would recommend the elimination of all current positions which the department has identified as being vacant. Recently, we received information that three more positions have been available. The department indicates there are currently eight positions under this scenario. If the committee chose this option, the department would require flexibility to move and reclassify the remaining existing positions in order to meet the demands.
Senator Raggio:
That was the scenario we were primarily discussing last time. Would that interfere with the action we took on the narcotic task force?
Mr. Rodriguez:
None of these actions would interfere with the action taken on the Narcotics Task Force.
Senator Raggio:
If we elected option 2, the add-back of 13 of the 21 positions, the State would still realize a total General Fund savings of $791,350 in salary and a total of $881,005 when compared to current funding levels. What is option 3?
Mr. Rodgriguez:
Option 3 is the agency’s proposal to add back 15 positions including the positions represented in option 1 plus some additional positions for the Las Vegas office in order to participate in the Federal Drug Task Force, and some additional support positions. The Assembly Committee on Ways and Means supports option 3.
Senator Raggio:
Does everyone concur with the fiscal impact of these scenarios? Does everyone understand what we are doing?
Senator Tiffany:
When I look at the budget on page 2, in 2003 we have 63 people, and the Governor recommends 40 people. When we talk about eliminating positions, is the elimination from the 63 or the 40?
E-600 Budget Reductions – Page PS-81
Mr. Rodriguez:
The proposal is to eliminate 21 positions in this decision unit from the 63. There are two additional vacant positions that are being eliminated in the E-600 unit. There are 23 positions being eliminated altogether.
Senator Rhoads:
If we do not adopt option 3, does that mean the Rural Task Force is eliminated?
Mr. Rodriguez:
What we decide in this budget account is not going to affect the decisions made on the Rural Task Force. These positions are in support of those positions; they are supervisory and administrative positions.
Senator Mathews:
Did you say they are support positions to the Rural Task Force?
Mr. Rodriguez:
These positions provide supervisory and additional administrative support to the task forces. Those task forces can still function without these positions. These positions in this budget account are in addition to the support and administration of the task forces.
Senator Mathews:
I am concerned that if there is no support at the main office when employees are in the rural areas, they will not get the backup they need. I would vote for option 3.
Senator Raggio:
To be prudent, we should consider option 2 which maintains considerable General Fund savings, but recognizes that these positions have been vacant and still gives them some flexibility.
Mr. Rodriguez:
Not all 21 positions are vacant.
Senator Raggio:
I am talking about the vacant positions. Under option 2, it was my understanding that this eliminated the vacant positions. Is there some misinformation in that?
Mr. Rodriguez:
Under option 2, it is likely there would still be two or three layoffs.
Senator Raggio:
Is that new information? That is not the information we had previously. We are looking at option 2 that would eliminate the vacancies, and that is scenario 2. What is the status here, would it require any lay-offs?
Philip H. Brown, Acting Chief, Investigation Division, Department of Public Safety:
There are some adjustments and some geographical concerns. There is a certain lay-off in the Ely office, and potentially one or two more.
John P. Comeaux, Director, Department of Administration:
To Senator Mathew’s question, the positions that would support the rural task force are the six that are covered in scenario 1. Scenario 2 proposes to eliminate vacant positions. I think what Mr. Brown is discussing is reallocation of resources and moving people around. I do not know how that would create a layoff. Scenario 2 is simply to eliminate positions that are currently vacant and that would not trigger lay-offs. In addition, I believe there are actually 10 that are vacant, with 2 that are vacant in the task force positions. Even those could be included with reallocating resources.
Senator Raggio:
We are still trying to be as prudent as possible and reserve what General Fund is required without being detrimental to purposes or personnel. In view of what I am hearing, scenario 2, option 2, would be the most prudent and efficient way to deal with this.
Senator Tiffany:
So scenario 1 would leave you with 46 employees, scenario 2 with 55, and scenario 3 with 55?
Mr. Rodriguez:
That is correct. You would be adding back the 6, 8, or 11 as we currently see it.
Senator Tiffany:
Would all 3 scenarios support the narcotics task force?
Mr. Rodriguez:
That is correct.
Senator Tiffany:
It is a matter of whether we give them flexibility in scenario 2, not give them flexibility in scenario 3, or reduce more positions in scenario 1.
Mr. Rodriguez:
I believe that in option 2 or option 3 the department would still reallocate and have flexibility. The least amount of flexibility would be presented by option 1.
Senator Coffin:
I am concerned about the new vacancies that have occurred. What level were those people, supervisory or non-supervisory?
Mr. Brown:
They are not confirmed resignations, but we have indications from three of our staff: one is a sworn position and he is going to retire; another is a sworn position, and she has decided to leave the agency; the third is a civilian position.
Senator Coffin:
Did the lady resign because of pay or other opportunities elsewhere?
Mr. Brown:
She found better employment outside of the State.
Senator Coffin:
I am concerned about all of these scenarios. I will only support the motion at this point so we can go to conference with the Assembly and discuss it further.
Senator Raggio:
We will have to do that, because they have adopted scenario 3.
SENATOR RAWSON MOVED TO ADOPT OPTION 2.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS TIFFANY AND CEGAVSKE VOTED NO.)
* * * * *
Mr. Rodriguez:
I would like to get clarification on the vacancies that we talked about. We talked about the eight proposed in option 2 plus the potential three that we just identified.
Senator Raggio:
No, I do not think so. We were just talking about the eight.
Public Safety, Fire Marshal – Budget Page PS-132 (Volume 3)
Budget Account 101-3816
Mr. Rodriguez:
This budget was heard on May 15, and there were some issues and staff recommendations to reduce the number of new positions from 22 to 6. The fire marshal had some concerns about needing resources. We spoke at the direction of the committee and came to an agreement that six would meet the requirements they need based on how the funding for the positions will be established. They are in concurrence with staff recommendations for the six positions.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-3816 WITH STAFF RECOMMENDATIONS INCLUDING THE ADDITION OF SIX POSITIONS IN E-500, RESTORING NINE POSITIONS IN E-501, CONSOLIDATION OF THE FIRE MARSHALL DIVISION WITH HAZARDOUS MATERIALS, INCLUDE THREE RECLASSIFICATIONS PRESENTED IN E-805 AND ELIMINATE THE RESERVE COMPONENT OF THIS BUDGET ACCOUNT, WITH A LETTER OF INTENT FOR THE FIRE MARSHAL TO PROVIDE STATUS REPORTS.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
SENATE BILL 420: Makes various changes relating to Division of Wildlife of State Department of Conservation and Natural Resources. (BDR 45-1254)
Senator Raggio:
This included the automatic consumer price index (CPI) and we indicated the committee’s concern about a CPI indexing. We understood that taking out the CPI and utilizing the fee increase resulted in a shortfall in the second year of the biennium of $180,000. The suggestion was that we fully fund it. There might be an amendment that would augment the fees in order not to have that type of shortfall.
Michael J. Chapman, Program Analyst, Fiscal Analysis Division:
The Division of Wildlife submitted a 5-page revision to S.B. 420. That is attachment 2 on a memorandum that I wrote to Mr. Ghiggeri on May 18, 2003. (Exhibit I). They have taken all reference to CPI inflation adjustments out of S.B 420 to offset that reduction in revenue that you have indicated, which approximates $180,000. The division proposed additional fee increases over and above what is included in S.B. 420 for non-resident hunting and fishing fees and resident combination licenses. Those are found on attachment 3.
In addition to the reductions in the CPI, the revisions supplied by the Division of Wildlife also eliminates license fees for native Americans and disabled veterans and restores the resident armed forces members back to the $5 fee currently provided for in the statutes.
Senator Raggio:
What would the fees be under the proposed amendment?
Terry R. Crawforth, Administrator, Division of Wildlife, depatment of conservation and natural resources:
Following the last hearing, we went back and took a look at several areas concerning the $180,000 in addition to taking out the CPI.
Senator Raggio:
Attachment 4, page 11, of the memo is the sheet to review.
Mr. Chapman:
The left side shows the incremental increase that the division is proposing over and above what is already included in S.B. 420. On the right side of that schedule, the current fee is compared to what an individual would pay under different scenarios.
Senator Raggio:
For a non-resident hunting license the regular fee now is $110, and it would go up to $138. That has not changed from the original bill. On the 1-day permits, there are added fee increases. On non-resident fishing, the fee would go up from the proposal of $63 to $65. What are the additional fees?
Mr. Crawforth:
The changes we are talking about now are non-resident hunting, and non‑resident and resident combination hunting and fishing.
Senator Raggio:
Let us go to the resident licenses. The resident combination, that is both hunting and fishing for regular licenses, was proposed to go to $48, and now will it go to $50 under this amendment? With that adjustment, will the shortfall be covered?
Mr. Crawforth:
That and the other ones in the non-residents will cover the shortfall.
Senator Raggio:
Are these augmented fees going to discourage non-residents from buying licenses? How do we compare otherwise?
Mr.Crawforth:
We are high and always will be because we are a small state and do not sell very many licenses. I have some comparison information which has been distributed (Exhibit J).
Senator Raggio:
Let us look as Sections 24 and 28 as proposed under the new amendment on page 2. This is the elk damage fee.
Mr. crawforth:
Those are to put special funds into our obligated reserve account.
Senator Raggio:
Did staff concur?
Mr. Chapman;
Yes, as Mr. Crawforth indicated, statute currently provides that the funds for the elk damage fee and the duck stamp fee be deposited in the wildlife account. These statutes were created prior to 1999 when the Legislature created the obligated reserve account. This would include statutory changes to reflect current practice.
Senator Raggio:
Otherwise would the proposed fees remain as adjusted in the original version of S.B. 420?
Mr. Crawforth:
In the bill, in our exuberance to eliminate the Colorado River special license, we also eliminated the non-resident junior fishing license, which currently costs $8. If the bill were passed as proposed in our amendments, a non-resident junior, aged 12 through 15, would have to pay $65 for a fishing license. We would recommend a change in the bill to retain the junior non-resident fishing license and raise it from $8 to $17, which is a comparable rate.
Senator Cegavske:
I also have concerns because there was no indication that they were going to be coming back. I found it difficult to approve the fees last time. I cannot support additional fees.
Senator Mathews:
After you came back, did you add in a fee for Native Americans and veterans?
Mr. Crawforth:
We had previously recommended in this bill when it was heard in the Senate Committee on Natural Resources that we remove the increases for Native Americans and disabled veterans and leave the fee as it is for resident servicemen. We have provided the numbers for the cost of that proposed amendment. In addition, in our initial proposal, the consumer price index was factored into our budget in the second year of this coming biennium; that is where the $180,000 would come from. The $180,000 in the second year from the CPI was always in there. It was your desire to take it out of there, and we did. Our instructions were to go back and find some places where we could make up that $180,000. We looked at areas we knew you were concerned about, and did not address those in the combination license.
Senator Raggio:
Are there any new positions in your budget?
Mr. Crawforth:
There are three fewer positions.
Senator Raggio:
What proposal would the committee make if you do not want to support this? You would have to cut positions.
SENATOR RHOADS MOVED TO AMEND S.B. 420 WITH THE PROPOSED AMENDMENT REMOVING THE CONSUMER PRICE INDEXING FROM THE BUDGET AND FEE INCREASES AS INDICATED TO ELIMINATE SHORTFALL, AND ADJUSTED JUNIOR NON-RESIDENT LICENSE INCREASE AS RECOMMENDED AND CHANGE IN SECTIONS 24 AND 28 TO REFLECT THE DEPOSIT OF FUNDS IN THE OBLIGATED RESERVE.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION PASSED. (SENATORS CEGAVSKE AND TIFFANY VOTED NO.)
*****
Senator Raggio:
This meeting is adjourned at 11:00 a.m.
RESPECTFULLY SUBMITTED:
Julie Walker,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: