MINUTES OF THE
SENATE Committee on Finance
Seventy-second Session
May 21, 2003
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:33 a.m., on Wednesday, May 21, 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 J. Tiffany
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATORS PRESENT:
Assemblywoman Ellen Marie Koivisto, Clark County Assembly District No. 14
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Deputy Fiscal Analyst
James D. Earl, Committee Secretary
OTHERS PRESENT:
Jim Fry, Workers’ Compensation Analyst, Risk Management Division, Department of Administration
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada
Michael Gillins, Lobbyist, Las Vegas Police Protective Association
Debbra J. King, Administrative Officer IV, Division of Health Care Financing and Policy, Department of Human Resources
Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources
Leslie A. Johnstone, Accounting Officer, Public Employees’ Benefits Program
James Richardson, Lobbyist, Nevada Faculty Alliance
F. Martin Bibb, Lobbyist, Retired Public Employees of Nevada
Doug Bierman, Lobbyist, City of Caliente, Eureka County, Great Basin Heritage Area Partnership, Humboldt River Basin Water Authority, Lander County, Lincoln County, Lincoln County Regional Development Authority, NTS Development Corporation
Danny N. Coyle, Lobbyist, State of Nevada Employees Association
Scott G. MacKenzie, Lobbyist, State of Nevada Employees Association
Michael Gillins, Lobbyist, Nevada Conference of Police and Sheriffs (COPS) and Las Vegas Police Protective Association
Gary H. Wolff, Lobbyist, Teamsters Local 14
Senator Raggio:
We will open with additional testimony on Senate Bill (S.B.) 184. That bill was last heard in this committee on April 30. It pertains to treatment of hepatitis and associated benefits.
SENATE BILL 184 (1st Reprint): Revises certain provisions governing occupational diseases contracted by police officers. (BDR 53-851)
Jim Fry, Workers’ Compensation Analyst, Risk Management Division, Department of Administration:
This bill expands workers’ compensation for peace officers to include hepatitis. Assembly Bill (A.B.) 313 of the 71st Legislative session established the public policy regarding hepatitis coverage for paid firemen. Expanding this to peace officers is appropriate. However, there is a fiscal impact. I have been asked to explain my fiscal note, submitted by the Risk Management Division.
Senator Raggio:
We have two fiscal notes. One is from your division and one is from the Department of Corrections. There may be more.
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
Following our hearing on this legislation on April 30, staff was asked to obtain revised fiscal notes. These are not in the bill books. I distributed them to committee members last week.
Senator Raggio:
Can you summarize them before we hear testimony?
Mr. Ghiggeri:
We received numerous fiscal notes. We received notes from risk management, the Department of Motor Vehicles (DMV), the Department of Conservation and Natural Resources, the Department of Corrections, the university system, the Department of Public Safety, the Nevada Investigations Division, the Highway Patrol, the Division of Parole and Probation, the State Fire Marshal, the City of North Las Vegas, the City of Las Vegas, the City of Henderson, Lincoln County, the City of Reno, the City of Carson City, Churchill County, Clark County, Douglas County, Esmeralda County, Mineral County, and Washoe County.
Senator Raggio:
Mr. Fry, please continue.
Mr. Fry:
National statistics indicate that 2 percent of the general population has hepatitis C. That variant of hepatitis is the most costly disease in the hepatitis group. After the passage of legislation last session, we established a baseline for all firefighters. We found a very low incidence of hepatitis C. I also checked the reporting of the State Health Division. There have been only 100 cases over a 5-year period in the entire Nevada population. Using this information, we decided that maybe 1 percent, rather than 2 percent, of the population of Nevada has hepatitis C.
We would test all of our peace officers the first year in a baseline test. We figured there would be 22 personnel testing positive for hepatitis C. This would be a rebuttable presumption. Perhaps 11 claims for hepatitis C would be accepted. That would represent 11 new claims in fiscal year (FY) 2004. A claim costs approximately $15,000 during the first year. The total fiscal impact during FY 2004 would be 11 times that amount or $165,000. Each year thereafter the State would probably have a single claim.
The second year of a claim is when the claim becomes costly. They average $30,000 annually for medical maintenance. In FY 2005, the impact jumps to $345,000. That figure includes one new claim in addition to maintenance on the 11 claims of the preceding year. This progression would continue through future biennia.
Senator Raggio:
Would the projected amount over the biennium be the $750,000 indicated?
Mr. Fry:
Yes.
Senator Raggio:
I am not going to take a lot of testimony on this bill. It was not scheduled. Is there something to add to this?
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada:
We want the committee to understand the figures presented by Mr. Fry are spread out over a period of time. The tests do not all occur on October 1, 2003. They are spread throughout the year. As a result, the fiscal impact occurs over the next several years. The record needs to reflect the City of Las Vegas and Clark County, for example, testified in the Assembly there was a $21 million cost. They are supporting the bill.
Senator Raggio:
They have their own fiscal notes. I do not know what the amounts are.
Mr. Dreher:
The original State fiscal note was $2.5 million because other agencies were included. Those agencies have been eliminated. The cost is now down to between $720,000 to $750,000. Another proposal involves the elimination of the yearly testing for hepatitis C after the baseline testing is complete. This involves only State law enforcement, not local government law enforcement, not firefighters. This would be a cost-reduction effort. The cost of the test is roughly $60 per person. This proposal would reduce the cost in the fiscal notes somewhat. We would like to see the bill processed, and we are looking for ways to reduce the costs for State law enforcement. We would have a 2‑year testing period enabling us to come back in 2005 and say we would now like yearly testing and those types of things.
Michael Gillins, Lobbyist, Las Vegas Police Protective Association:
We support this measure. We are trying to move incrementally so we do not have a severe fiscal impact. We delayed our timing of this attempt to get conclusive, presumptive coverage for law enforcement. The record regarding firefighters does not demonstrate a detrimental cost. The picture has been much better than anticipated. You need to keep that in mind. These certainly are worst‑case figures.
Senator Raggio:
We appreciate that; however, we still need to be guided by the fiscal notes. If they can be revised, fine, but that is what we have to rely on.
Was there a proposed amendment? I know the bill includes police officers, but I had a note regarding something else.
Mr. Gillins:
You may be referring to a vaccination provision submitted when the bill was before the Senate Committee on Commerce and Labor. It provided for vaccinations for hepatitis A and B. This would significantly impact cost.
Senator Raggio:
Did we get that proposed amendment?
Mr. Gillins:
It should be included in what you already have.
Senator Raggio:
Staff, would you ensure we have all of that? We are not going to act on this today.
Mr. Ghiggeri:
Is that reflected in the current legislation?
Mr. Gillins:
It should be in the first reprint.
Senator Raggio:
It is in the first reprint. I had another proposed amendment noted. I do not recall what it was. What was it?
Mr. Dreher:
That is the one I gave you 2 days ago. It would eliminate the annual testing for hepatitis C for State law enforcement only.
Senator Raggio:
Do you have that written out?
Mr. Dreher:
I do and I can give it to you.
Senator Raggio:
We will close the discussion on S.B. 184.
Committee, you asked for a list of bills and the actions taken to date. I am going to ask staff to go through it.
Mr. Ghiggeri:
Committee members have a legal-sized handout entitled “Bills in Senate Finance” (Exhibit C). It lists all the bills that have been referred to this committee.
Senator Raggio:
I am going to ask each member of this committee, using this handout, to furnish me a list of bills, if any, appropriate for processing. In most cases, this would involve an addition to any final action we take. Please look at them carefully. We need to move them if they are going to be discussed with the Assembly. This is not a time for pork bills. This is not the session for that. If there are important public policy issues, then we can take a look at them. I want to emphasize that.
SENATE BILL 258: Makes appropriation to University of Nevada, Reno, for certain expenses of Pediatric Diabetes and Endocrinology Center at School of Medicine. (BDR S-1204)
Mr. Ghiggeri:
Yesterday, when the committee voted on S.B. 258, Senator Cegavske had a question concerning the health division and possible federal funds. There is no treatment funding available through the health division. However, there is money for education. The division is exploring the possibility of providing funding to the university.
I have distributed copies of a letter received yesterday in support of the State’s Washington, D.C., office (Exhibit D). It was addressed to the chairmen of the Senate Committee on Finance (Finance Committee) and the Assembly Committee on Ways and Means (Ways and Means). The letter is from Steve Teshara, the cochairman of the Lake Tahoe Transportation & Water Quality Coalition.
Senator Raggio:
This issue is really for Ways and Means. That committee has refused to support the Washington, D.C., office.
Mr. Ghiggeri:
I have also distributed a revised fiscal note for S.B. 235. The fiscal division received that revision yesterday.
SENATE BILL 235 (1st Reprint): Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38-746)
Senator Raggio:
Senate Bill 235 is the disproportionate share bill. What is the revision in the fiscal note?
Mr. Ghiggeri:
The Department of Administration indicates the amended legislation has a fiscal impact to the Division of Health Care Financing and Policy. A representative is in the audience.
Senator Raggio:
Do you want to comment on this?
Debbra J. King, Administrative Officer, Division of Health Care Financing and Policy, Department of Human Resources:
This bill applies to the disproportionate share and intergovernmental transfer (IGT) program. The State benefit from the IGT is the difference between the State match and what the counties pay. Currently, the bill reflects a payment by Clark County of 67 percent of all DSH (Medicaid disproportionate share hospital program) funds, thereby reducing the State benefit by $1.2 million in FY 2004 and $987,000 in FY 2005.
Senator Raggio:
I am not following you. What are you saying? What is the change? Our fiscal note talks about an amendment. It says, “Senate Bill 235, the original proposal, limited the amount of intergovernmental transfers the State could collect compared to current law.” Is that it?
Ms. King:
Correct.
Senator Raggio:
The net benefit to the State is the difference between the intergovernmental transfer from local governments and the State matching funds required. What did the fiscal note show?
Ms. King:
The fiscal note initially showed a reduction in State benefit of $1.9 million the first year and $2.1 million the second year.
Senator Raggio:
Was that a loss of anticipated revenue from this source?
Ms. King:
Yes.
Senator Raggio:
What is the amendment?
Senator Rawson:
We closed this budget with an increase of the State’s percentage. I have prepared an amendment consistent with the budget closing action.
Senator Raggio:
We do not have it here.
Senator Rawson:
Mr. Ghiggeri will have it today.
Senator Raggio:
We will wait until we have the amendment.
Senator Rawson:
I believe we will be able to eliminate the fiscal note since the budget closing action was consistent with the Governor’s recommendation.
Senator Cegavske:
I am curious as to why the State takes money from this pot. The money is needed at the local level. I am puzzled why we do not divide it among the city and county hospitals most in need.
Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources:
This arrangement is not uncommon in the country. Some of the net federal funds are retained by the State as a benefit to assist in funding the larger Medicare program. The funds we retain in the intergovernmental transfer account are only used to offset the cost of Medicaid, the general funds we would otherwise have to maintain in the Medicaid budget. Much of the retained amount does flow through to local communities by going to assist individuals in local hospitals. It is not as though these funds are used to build roads, as they are in some states.
Senator Cegavske:
I still do not understand why the funds are not divided among them. If you want to discuss this later, that is fine.
Mr. Duarte:
I will be glad to do that.
Senator Raggio:
There is another reason. When first proposed, the State was required to participate. Had the State not done so, there would be no program. The State was willing to participate. That was a compromise. The feeling was that if the State was going to participate, some State interests needed to be served.
Mr. Ghiggeri:
I have distributed a General Fund balance sheet to the members of the committee (Exhibit E). It reflects the estimated available General Fund dollars at the end of the biennium based on actions taken to date by the committee in closing budgets. There are two open budgets. Currently, we are looking at a deficit at the end of the first year of approximately $395 million and a cumulative difference at the end of the second year of approximately $830 million. The deficit at the end of the second year includes $50 million to partially restore the fund to stabilize the operation of State government. If that were discounted, we would be down to a deficit of approximately $780 million. Also included in these numbers is approximately $32.5 million the Governor recommended to the Department of Taxation to implement the tax collection process on whatever tax package is finalized by the Legislature.
ASSEMBLY BILL 326 (1st Reprint): Requires separate regulation of residential facilities for groups which claim to provide assisted living services. (BDR 40-954)
Senator Raggio:
Let us take a look at A.B. 326. We heard that bill on May 19. The bill requires separate regulation of residential facilities for groups. I think everyone had signed off. We voted to amend and do pass. I am distributing to members Amendment No. 844. As requested, section 1, page 3, line 27 deletes the word “separate” from the phrase “separate sleeping area.” Also, lines 31 through 36 contain text to be deleted. This is the effect of the amendment. Is that agreeable to the committee? I see that it is, without objection. We will send down the bill utilizing Amendment No. 844.
SENATE BILL 496: Makes various changes concerning financing of Commission on Economic Development to carry out certain training programs for employees of businesses. (BDR 18-1348)
Senator Raggio:
The committee requested this bill. It is necessary to conform to the action we took in closing this budget. This is necessary to limit the reserves to $750,000. I want to make certain this tracks the committee action.
Bob Guernsey, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Division:
In closing the budget for the Commission on Economic Development, the committee wanted to limit the annual expenditure of the Train Employees Now (TEN) program to $750,000 through a combination of the annual appropriation and the carry-forward funds. The committee concurred with the Governor’s recommendation. It has an annual appropriation of $500,000. This would allow a maximum carry-forward of $250,000. Any funds in excess of that amount would revert to the General Fund. Ways and Means proposes the carry-forward fund provision in support of the TEN program be eliminated and all remaining general funds revert at the end of each fiscal year.
Senator Raggio:
Does this bill conform to the action we took in closing the budget?
Mr. Guernsey:
Yes.
Senator Raggio:
It seems like a lot of language to do what we wanted.
Mr. Guernsey:
The Legal Division had a difficult time with this bill. It was something Legal had not encountered, and I think Legal did a pretty good job. I had a number of meetings with the legal division covering this bill.
Senator Raggio:
Unless there is testimony in opposition, I will accept a motion from the committee.
SENATOR CEGAVSKE MOVED TO AMEND AND DO PASS SENATE BILL 496.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
Is there testimony concerning A.B. 286?
ASSEMBLY BILL 286: Revises provisions governing health insurance for retired officers and employees of local governments. (BDR 23-1124)
Assemblywoman Ellen Marie Koivisto, Clark County Assembly District No. 14:
This bill came about because of a neighbor of mine who is a non-state retiree. In order to cover himself and his wife, he has to pay $17,200 annually for health insurance under the Public Employees’ Benefits Program (PEBP). You now have a fact sheet handout (Exhibit F)
There are approximately 1500 non-state retirees. They are rated separately, and, consequently, their insurance rates are extremely high. These folks have spent their working lives in public service and now cannot afford health insurance.
This bill requires local government employers to offer their retirees a one-time option to rejoin the existing group insurance plan of the local government. If the retiree chooses to remain with PEBP, and I do not know why anyone would make that choice, then the local government is required to subsidize the retiree as the State subsidizes its retirees. That is the basis of the bill.
Ways and Means funded the bill and passed it to this committee. There are several testifiers in support. They may suggest changes. I think the policy embedded in the bill is important enough that I would urge you to adopt the policy even if you do not agree on funding. We have to do something to help these people.
Leslie A. Johnstone, Accounting Officer, Public Employees’ Benefits Program:
The PEBP supports this bill. However, we would like to submit proposed amendments. The intent of the amendments is to eliminate the need for PEBP to commingle State and non-State participants in the program. This would eliminate the fiscal impact of the bill and the need for an additional open enrollment.
Senator Raggio:
Would the amendment still allow the option identified by Assemblywoman Koivisto?
Ms. Johnstone:
That is correct.
Senator Raggio:
Would you tell us exactly what the amendment does?
Ms. Johnstone:
It eliminates the requirement for commingling. It leaves the remainder substantially in place. We would revert to the original commingling language on page 3, lines 42 and 43. Text on page 4, lines 7 and 14 would also revert to the original language. The State and non-State pools would remain separate. There is an additional change on page 4 to retain the separate nature of the pools.
Senator Raggio:
Do all of the additional changes pertain to the commingling requirement that would be required by the bill, absent the amendment? Do you have any problem with the amendment as proposed, Assemblywoman Koivisto?
Ms. Koivisto:
I think it is important to help these people who are simply unable to afford $17,000 annually for health insurance.
Senator Raggio:
I am not certain what you really said. There is a proposed amendment removing the commingling requirement from the bill. Your main concern is with the other portion of the bill, as I understand it.
Ms. Koivisto:
Yes, that is my concern.
Senator Raggio:
I interrupted Ms. Johnstone. The amendment would have the effect of removing the fiscal note of approximately $5 million for the second year. Is that correct?
Ms. Johnstone:
Yes. It would be $4.5 million per year. The only other change involves clarification of the effective dates. Section 8 would become effective July 1; the remainder of the bill would become effective October 1.
Senator Raggio:
What does that do?
Ms. Johnstone:
That is done in an effort to avoid the PEBP from having a second open enrollment this year.
Senator Raggio:
I understand.
James Richardson, Lobbyist, Nevada Faculty Alliance:
I would like to thank Assemblywoman Koivisto for the farsighted public policy contained in the bill. We should have done this long ago. It has the effect of requiring local governments to subsidize their former workers to the same extent done by the State.
Senator Raggio:
I think that has been the issue for some time.
Mr. Richardson:
The bill has a fiscal note of $4.5 million if non-state retirees were commingled with state retirees currently in the plan. Regrettably, it is not clear to me there is money to do that. We would like to see that happen if possible, but, even if it cannot, we strongly urge this public policy be implemented so that the problem will not expand in the future. The legislation contains a very valuable component, the ability of a retiree to return to local coverage. Some municipalities do not have retiree health plans, or, if they do, they are extremely expensive. As a result, not everyone might leave, but at least they would have the chance to transfer.
Senator Raggio:
Many of the letters I have received recount that the retiree does not have that option. That is a troublesome thing.
F. Martin Bibb, Lobbyist, Retired Public Employees of Nevada:
We think the idea expressed by other testifiers, having local governments commingle their active personnel and retirees in a single health plan, makes great sense. The State does this.
Senator Raggio:
You will recall that was a big issue when it first arose. The state employees were adamant that if retirees were taken into the system, then the separate systems needed to be maintained. Those of us who have been here for some time realize that was quite an objection. To do away with it would be a difficult thing to do.
Mr. Bibb:
We understand that. The governments can do the same sort of thing at their level, and that would help relieve the pressure on their retirees remaining in the local government plans. We do understand that history.
We also believe giving retirees an option to return to their plan is valid. On the commingling issue, we believe the non-state actives and retirees can be commingled in the State plan, but only if they bring to the State plan the same amount of subsidy the State authorizes and approves for its actives and retirees in the plan. Without that funding, there would be a financial hole. We would not support that.
Senator Raggio:
How would they do that?
Mr. Bibb:
They would simply authorize the same monthly subsidy they have in this plan as the State authorizes for its active and retired participants. This would bring the same amount of money per person to the PEBP.
Senator Raggio:
Do you mean from the local government?
Mr. Bibb:
That is correct.
Senator Raggio:
That is not in this amendment.
Mr. Bibb:
If commingling were to be approved, we think it has to be approved with that monetary inflow.
Senator Raggio:
Would you offer a substitute proposal?
Mr. Bibb:
We do not believe you can have those folks commingled without alleviating the financial impact. If the goal at the local level is to try to commingle in those claims, I can suggest how to proceed.
Senator Raggio:
I do not suppose the local governments would like to do that.
Mr. Bibb:
I do not suppose so. But, clearly, we believe that is key to the program. There is a provision in the bill stating future retirees would be subsidized in that fashion.
Senator Raggio:
Would that require an additional amendment?
Mr. Bibb:
I do not believe so. I believe there is a provision in the bill on page 3 indicating local governments shall pay the same portion of the cost of coverage under the PEBP for persons who join the program upon retirement.
Senator Raggio:
Would that be prospective?
Mr. Bibb:
Yes.
Senator Raggio:
Do you support that?
Mr. Bibb:
Yes.
Doug Bierman, Lobbyist, City of Caliente, Eureka County, Great Basin Heritage Area Partnership, Humboldt River Basin Water Authority, Lander County, Lincoln County, Lincoln County Regional Development Authority:
I am appearing today on behalf of several of the local governments that are currently members of PEBP and have been since the early 1990s. The counties of Lander and Eureka have been members since the 1990s, as has the City of Caliente. We are talking about active, non-state employees who are seeing their rates increase faster than the state employees. Yet, in many cases, they have been part of the system for over 10 years. To compound the problem, when those local, non-state employees retire, they see their premiums inflated to those associated with non-state retiree status. We hope the committee will support A.B. 286 as it came from Ways and Means with the appropriated amount in order to give temporary relief for those people who have been in the system for a long time and have seen their rates escalate at a higher rate. The problem should be solved in the future by revamping the program to allow these people to be aggregated into the same system, treated as their fellow public employees.
Senator Raggio:
Would you oppose the amendment on the commingling issue?
Mr. Bierman:
We would oppose the amendment as it was offered today.
Senator Raggio:
We do not have pots of money with $5 million in them for occasional use. We are scratching for every dollar.
Mr. Bierman:
I understand. On the other hand, not too long ago, your committee had to make concessions for mistakes made in calculating the premiums from earlier budget submissions. We have made mistakes about PEBP’s direction in the past, and this would be a good time to correct those mistakes, setting a new direction where all PEBP members are treated the same.
Senator Raggio:
The problem is this would not be a one-time cost. It would be a continuing cost.
Mr. Bierman:
Yes, but as time goes on, the provisions in the bill, with the contribution factor from the local governments, would help to eliminate those discrepancies.
I have submitted written testimony I would like included in the record (Exhibit G).
Senator Raggio:
If you want to add anything else, you may.
Mr. Bierman:
I would like to add one local item, using Lander County as an example. About 70 percent of the county employees earn $30,000 or less. Many of those county employees cannot afford the current premiums. They are dropping out of the system with no insurance. I am afraid if we do not do something to help these public employees, we will see greater problems in health care in the future.
Danny N. Coyle, Lobbyist, State of Nevada Employees Association:
We support the amendment. We have no objections to commingling if the shortfall described in the fiscal note were made up by the Legislature. However, if the Legislature is reluctant to make up the shortfall of approximately $5.3 million, then we would not support the amendment because of its adverse effect on the co-payments and deductibles of state retirees.
Scott G. MacKenzie, Lobbyist, State of Nevada Employees Association:
It is clear to me we are all scrambling to put out fires in the health insurance area. This is true nationwide. We support the proposed amendment. Clearly, our objective is to try to prevent any adverse impact on our retirees. If commingling takes place, it should involve all public employees in the state in a single fund. We believe that would have the most positive effect, although we recognize this legislation does not do that. Hopefully, a study during the interim will support that outcome. In the meantime, we want to soften the impact on our retirees. We support the amendment although we realize there is a fiscal impact.
Michael Gillins, Lobbyist, Nevada Conference of Police and Sheriffs (COPS) and Las Vegas Police Protective Association:
Although we support the objective we believe Assemblywoman Koivisto is attempting to attain, we have a problem with local governments being asked to provide a subsidy for those individuals remaining in the plan. Currently, we do not receive support for our retirees. We have been able to provide that coverage efficiently. In the last 2 years, we have turned our program around, moving from a $4 million deficit to a $2 million reserve. We have taken measures to try to provide a subsidy for our retirees as they come along using funding by active employees. This idea could be put into place. It would take the burden off local governments and groups such as ours that have to compete with people getting subsidized. We certainly support system revisions, adaptations, and improvements. That is more appropriate than adding subsidizing to a program that needs to be fixed.
Senator Raggio:
So, what is your position?
Mr. Gillins:
Our position is to delete the requirement of subsistence from local government for those employees.
Gary H. Wolff, Lobbyist, Teamsters Local 14:
We are right in the middle. I represent both local government and state personnel. I think the study is the vehicle that should determine how we deal with this issue in the future.
Senator Raggio:
In the meantime, we have to do something.
Mr. Wolff:
In the meantime, I think the counties are going to have to step up to the plate if they want their folks under this program. They are going to have to come up with the subsidy. I do not think we can take $5 million onto the backs of current state employees.
Senator Raggio:
We will close the hearing on A.B. 286 and open the hearing on A.B. 471. We are considering the first reprint of that bill. This involves a supplemental appropriation $11.7 million. This is in the budget, as I understand it.
ASSEMBLY BILL 471 (1st Reprint): Makes supplemental appropriation to Division of Health Care Financing and Policy of Department of Human Resources for shortfall in budgeting in Fiscal Year 2002-2003 for Medicaid caseload and county-match requirements. (BDR S-1227)
Ms. King:
It is in the budget; however, the numbers have changed.
This bill makes a supplemental General Fund appropriation to the Division of Health Care Financing and Policy for FY 2003. The general funds involved in the Medicaid budget account are $11.7 million. That is broken down into $11 million for the higher-than-budgeted caseload and the pay-down of inventory claims, and $662,000 to cover a projected shortfall in county matching funds. These amounts have changed from those recommended in the Executive Budget and the amount included in the original bill. The differences stem from rerunning the Medicaid payment projection program. This is a program, or a series of spreadsheets, used by the division to calculate the total projected Medicaid payments. The revised projections were completed April 16, 2003, and changed the supplemental request due to changes in the projected caseload cost per eligible person and in the claims inventory. For example, the supplemental request was based on maintaining the claims inventory of approximately 139,000 claims through the end of the fiscal year. The current claims inventory projection is approximately 50,000 claims. Therefore, the division has expended approximately $18 million more than originally projected in order to pay down claims.
This increase in the supplemental appropriation will be offset by the reduction in maintenance unit M-501 in FY 2004. The division had anticipated reducing the inventory of unpaid claims from 100,000 to 10,000 in FY 2004. The division also recalculated the projected savings from the 3 percent budget reduction in enhancement unit E-600 that has been implemented, but is not reflected in the cost per eligible person and/or the caseload projections.
The implementation of the upper payment limit program generated an additional $6 million in net state benefit that has been used to offset the need for a supplemental appropriation.
Senator Raggio:
Is this the reason for the change in the bill resulting in the first reprint? Is the amount in the first reprint consistent with your testimony? What is the status of the backlog of claims?
Ms. King:
The claims backlog is currently reduced by 40,000 claims. I am encouraging staff to get to 50,000 claims.
Senator Raggio:
From what we hear and what you are indicating, I understand this bill should be processed as soon as possible. Is that the situation?
Ms. King:
Yes.
Senator Raggio:
What happens if we do not do so?
Ms. King:
I hold medical claims payments on Tuesday.
Senator Raggio:
We will close the hearing on A.B. 471.
SENATOR RAWSON MOVED TO DO PASS ASSEMBLY BILL 471.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
There are several bills we have already reviewed that we may be able to dispose of with little effort.
SENATE BILL 98: Makes appropriation for maintenance of statewide system for collection and analysis of information concerning birth defects and other adverse birth outcomes. (BDR S-31)
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE SENATE BILL 98.
SENATOR CEGAVSKE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
In view of other actions, let us look at S.B. 182. This bill was heard in our committee on March 12. The bill involves an appropriation for $3 million.
SENATE BILL 182: Makes appropriation to Department of Education for revision of test-taking and grading sections of multiple-choice portion of high school proficiency examination. (BDR S-933)
SENATOR TIFFANY MOVED TO INDEFINITELY POSTPONE SENATE BILL 182.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
We took action on S.B. 185 in our action on S.B. 191.
SENATE BILL 185: Makes appropriation to Department of Education for allocation to Division of State Library and Archives of Department of Cultural Affairs for expenses relating to obtaining licenses that would allow school, public and academic libraries to access research databases and other on-line resources appropriate for pupils and students within this state. (BDR S-1093)
SENATE BILL 191 (1st Reprint): Makes various changes governing education to facilitate implementation of federal No Child Left Behind Act of 2001. (BDR 34‑635)
SENATOR MATHEWS MOVED TO INDEFINITELY POSTPONE SENATE BILL 185.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
Senator Coffin, will you track down the additional fiscal note information on S.B. 132? That bill deals with mold issues.
SENATE BILL 132 (1st Reprint): Requires licensure of persons engaged in certain activities relating to control of mold. (BDR 53-235)
Senator Coffin:
Yes, I will. There will be a need for seed money.
Senator Raggio:
I am going to ask staff to explore the coordination of S.B. 188 with S.B. 305.
SENATE BILL 188: Makes various changes concerning access to health care services for persons in this state. (BDR 40-743)
SENATE BILL 305: Requires Board of Regents of University of Nevada to establish Council on Graduate Medical Education. (BDR 34-931).
SENATE BILL 208: Requires transfer of money from Fund for School Improvement to University and Community College System of Nevada to provide scholarships for students pursuing degrees in teaching. (BDR S‑1033)
Senator Raggio:
Turn your attention to S.B. 208. We heard that bill on March 10. It involves a requirement that money be transferred from the fund for school improvement to provide scholarships. The original bill was for teaching. There was an amendment suggested by the university system in the March 10 hearing to increase the amount of the transfer. Instead of $230,680 for the biennium, they wanted that amount each year. Obviously, that funding is not available at this point. Then they submitted another request at the meeting on May 5, requesting $150,000 annually from the interest earned on the trust fund for public health to be used for loans to nursing students. Actually, the funding we would be able to obligate to that trust fund is not sufficient to implement the amendment requested by the chancellor. I think the current estimate is around $270,000. When something like this was suggested in 1999, we authorized the use of 25 percent of available interest earned on the trust fund to be used for a similar purpose. I suggest we amend this bill to provide that 25 percent of the available interest earned on the trust fund as determined on July 1 would be authorized for this purpose. Staff indicates that is approximately $122,000. Such action would be consistent with what we have done previously and would be of some assistance for nursing student loans.
SENATOR RAWSON MOVED TO AMEND AND DO PASS SENATE BILL 208, AUTHORIZING THE USE OF 25 PERCENT OF THE AVAILABLE INTEREST ON THE TRUST FUND FOR PUBLIC HEALTH AS OF JULY 1, 2003, TO BE USED FOR LOANS TO NURSING STUDENTS, AND STRIKING ALL OTHER TEXT FROM THE BILL.
SENATOR TIFFANY SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
SENATE BILL 209: Makes appropriation to Retired Justice Duty Fund for salaries for senior judges to increase coverage in Second and Eighth Judicial Districts and for emergency requests in smaller counties of Nevada. (BDR S-616)
ASSEMBLY BILL 29 (2nd Reprint): Makes various changes concerning administrative assessments and forfeiture of bail. (BDR 14-130)
Senator Raggio:
Senate Bill 209 is the appropriation for the fund for duty by retired justices; it was heard March 12. We heard a lot of testimony, and we have received numerous letters. Mr. Titus advised us funds would still be required but in the reduced amount of $175,000 for cash flow purposes. A lot of this depends on the amount of revenue provided from the administrative assessments. I believe A.B. 29 is the principal bill on that issue. He estimated the reserve going into FY 2004 would be about $50,000. That is $73,000 less than approved in their budget for the reserve going into FY 2004. A summary provided by staff showed receipts and expenditures. He indicated funding of $585,000 was required in FY 2004 and $719,000 in FY 2005, based on the estimated usage of senior judges.
I think we all recognize the value of the program. There is a cost savings that comes from the ability to use senior judges. The historic reserves have been 1 to 2 months of operating costs to cover expenses incurred prior to the receipt of current year funding. I think it appropriate to amend the request to $100,000 from the General Fund and require any amount in excess of $175,000 would revert to the General Fund.
SENATOR RAWSON MOVED TO AMEND AND DO PASS SENATE BILL 209, REDUCING THE AMOUNT OF FUNDING TO $100,000, AND REQUIRING ANY RESERVE AMOUNT IN EXCESS OF $175,000 REVERT TO THE GENERAL FUND.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
SENATE BILL 367: Makes appropriation to University and Community College System of Nevada for design of electrical and industrial technology building on campus of Great Basin College. (BDR S-1142)
Senator Raggio:
We will wait to act on S.B. 367 until we act on the Capital Improvement budget.
SENATE BILL 480: Deletes provision limiting issuance of citation for failure to wear safety belt in motor vehicle to vehicles halted for other offenses. (BDR 43-1039)
Senator Raggio:
Senate Bill 480 deals with the failure to wear safety belts. We have an amendment, approved by the Senate transportation committee, requiring a study to determine the potential impact. We need to look at this before we take any action. I believe the amendment would authorize primary enforcement. I ask the committee and staff to take another look at this. I know there is concern about the immediate authorization of a citation for the primary offense. There was some testimony indicating potential for future loss of federal funds if we did not provide for a primary offense.
I want to read this into the record from the Department of Public Safety, “There is a potential loss of future federal funds, $650,000 in FY 2005, if not approved.” The fiscal note indicates we lost $205,000 in federal funds in FY 2003 because we did not have a primary seatbelt law, and $440,000 in federal incentive funds because the seatbelt usage rate had dropped below 75 percent in the State. Actually, we were at 74.9 percent.
We stand adjourned at 10:38 a.m.
RESPECTFULLY SUBMITTED:
James D. Earl,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: