MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
June 3, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Thursday, June 3, 1993, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Bob Coffin
Senator Diana M. Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
STAFF MEMBERS PRESENT:
Daniel G. Miles, Fiscal Analyst
Robert Guernsey, Principal Deputy Fiscal Analyst
Gary Ghiggeri, Principal Deputy Fiscal Analyst
Larry L. Peri, Program Analyst
Jeanne L. Botts, Program Analyst
Judy Jacobs, Committee Secretary
OTHERS PRESENT:
Ron Angelone, Director, Department of Prisons
John E. Neill, Chief, Fiscal Services, Department of Prisons
Judy Matteucci, Director, Department of Administration
Mark Dawson, Chancellor, University and Community College System of Nevada
James T. Richardson, Lobbyist, American Association of University Professors
Mark Feldman, Attorney, Mark Feldman Associates
Fred W. Welden, Chief Deputy Research Director, Research Division, Legislative Counsel Bureau
Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources
John Perry Comeaux, Executive Director, Department of Taxation
L.D. Bennett, President, Tahoe Rim Trail
Marie Young, Trails Coalition of Southern Nevada
John Sarb, Administrator, Division of Child and Family Services, Department of Human Resources
Russ Champion, Northern Coordinator, National Trails Day
Susan Lynn, Nevada Representative, Oregon-California Trails Association, Desert Trail Association
Ann Kersten, Toiyabe Chapter, Sierra Club
Linda Leavister, Nevada Trails Coalition
Stephanie D. Licht, Treasurer, Nevada Wool Growers Association
Tom Bentz, Nevada Alliance for Responsible Animal Use
Senator Raggio announced the committee would consider the prison budgets before the bills scheduled for hearing. The committee had requested additional budget information in reference to the early release program.
Gary Ghiggeri, Principal Deputy Fiscal Analyst, distributed several sheets of information (Exhibits C, D and E. Originals of D and E are on file in the Research Library.) that depicted a need for
approximately $16.1 million to restore costs necessary to care for inmates based upon actions taken by the Senate Committee on Finance the previous day. He pointed out that would not include $2.9 million in bonds that have already been issued to expand the Pioche Conservation Camp.
Mr. Ghiggeri cautioned that if Assembly Bill (A.B.) 488, the medical release legislation, is not approved another $850,000 would have to be added to the $16.1 million.
ASSEMBLY BILL 488: Provides for expedited release from prison of terminally ill or physically incapacitated prisoners.
Mr. Ghiggeri said the sheets he prepared assume the passage of A.B. 488.
Mr. Ghiggeri said the action taken by the committee on the previous day resulted in an increase in the projected inmate population. The increase would require adjustments for inmate-driven expenses such as food, clothing, medical care and hygiene supplies amounting to approximately $708,000 in fiscal year (FY) 1994 and $1,665,000 in FY 1995.
Mr Ghiggeri reported the funding for camps that is not inmate-driven will be approximately $4 million in FY 1994 and $4.2 million in 1995. He pointed out the item labeled "Other Credits/Costs" on the second page of Exhibit D will result in the reduction of the General Fund appropriations by $184,746 in 1994 and $128,600 in 1995.
Senator Raggio asked Mr. Ghiggeri to explain the credit for the closed Lovelock Correctional Center. Mr. Ghiggeri replied:
That...is in concert with the Department of Administration's recommendation that the bulk of the mothball cost be absorbed in the Capital Improvement Project. I believe those approximate $1.3 or $1.4 [million] exclusive of the warden's salary. Those costs are listed on the Lovelock Correctional Center closing document.
Senator Raggio inquired what the contract service reduction for medical service was. Mr. Ghiggeri responded it was based upon the addition of some positions in the Department of Prisons budget that had been recommended by the administration such as a dietician and a funeral service contract. He said the Department of Prisons has not historically spent those funds so they were rolled back.
Mr. Ghiggeri said, "That summarizes the Department of Prisons costs...approximately $4.6 million in FY 1994 and $5.8 million in FY 1995."
Mr. Ghiggeri indicated inmate population adjustments on the next page and a summary of the inmate-driven adjustments with the medical and nonmedical adjustments segregated.
Senator Glomb asked for an explanation of the items in parentheses. Mr. Ghiggeri explained those would be savings. He said the action taken by the committee to disapprove the Facilities Capacity Act (FCA) led him to assume the honor camps would remain open, the prison population would continue to grow and the inmates would have to be housed in various facilities. The figures depict movement of those inmates to other facilities where they will not be as crowded
as they would have been according to the original recommendation in the Executive Budget.
Senator Raggio said an example was the reduction of food costs in the major institutions but food costs were increased in the conservation camps. Mr. Ghiggeri explained the inmate-driven costs follow to the facility where the inmate would reside.
Senator Raggio recalled there had been questions regarding the status of the Lovelock facility with respect to insurance and warranties. He asked if Mr. Ghiggeri had any information on those queries.
Mr. Ghiggeri responded the Assembly Committee on Ways and Means had learned that additional funding of $27,000 in each year was required and another $6,000 in each year would be required for the regional medical center. He said there were other small adjustments for outbuildings at the conservation camps such as water tanks or multipurpose buildings added over the years for which the department had not been paying insurance premiums.
Regarding the extended warranties on the Lovelock facility, Mr. Ghiggeri said it was included on the closing sheet for the Lovelock center. He noted the administration had proposed that the cost for extended warranties be funded out of the bond proceeds.
Calling attention to the item on the fourth page for purchase of a treadmill, Senator Rawson inquired asked if there was an order that a stress machine had to be provided. Mr. Ghiggeri said the machine was used for physical examinations of correctional officers pursuant to Nevada Revised Statutes 617.455. He explained annual physical examinations are required for correctional officers past the age of 40. He explained the cost for those examinations in southern Nevada is approximately $18,000 per year while the cost of the treadmill would be $18,340. The acquisition of the treadmill would pay for itself in a short time.
Ron Angelone, Director, Department of Prisons, confirmed Mr. Ghiggeri's explanation.
Senator Glomb asked if the total prison medical costs would be $182,000 in the first year and $629,000 in the next year. Mr. Ghiggeri said those figures were additions to the Governor's recommendations. Senator Glomb asked why the figure was so much greater in the second year. Mr. Ghiggeri said it was anticipated there would be more inmates housed in the second year. He summarized the medical costs and declared the prison system would spend less on inmate-driven costs than in FY 1992.
Senator Glomb noted the $629,000 in the second year could be attributed to an additional 400 inmates in FY 1995. Mr. Ghiggeri said a factor for inflation at 6 1/2 percent had also been included.
Senator Callister asked if the continued operation of Pioche would include the $3 million renovation there included under the Capital Improvement Project (CIP) list. He asked if the adjusted numbers presumed the level of occupancy at Pioche would be expanded. Mr. Ghiggeri replied, "This assumes the Pioche expansion, as approved by the '91 legislature, which increases the size from 78 to 194 beds." He indicated it would be complete and available for occupancy in April of 1995. The CIP cost for Pioche is projected at $2.9 million.
Mr. Ghiggeri called attention to the summary of costs attributable to the Division of Forestry on the last sheet of Exhibit D for continuation of the honor camps. The costs for operating expenses and for each position to be added to each camp are enumerated.
Senator Coffin asked if the summary on the page headed by the Jean Conservation Camp depicted additional costs. Mr. Ghiggeri replied he was correct and said the figures should be added to those on the last page. Those would total $7.2 million in FY 1994 and nearly $8.9 million in FY 1995 for the entire $16.1 million in total adjustments for the biennium. He said the top page of Exhibit E reflects the summary for the items already discussed and contains the $16.1 million costs and the cost of the general obligation bonds that were authorized by the 1991 legislature.
Referring back to the third sheet from the back of Exhibit D, Senator Glomb asked for an explanation of the line item for drug testing. Mr. Ghiggeri explained the inmates of the camps are tested at random. He said the average per year amounts to approximately $6.48 per inmate.
Senator Raggio asked Mr. Angelone what the cost would have been to keep the honor camps open for 3 or 4 months as considered previous to the action by the Senate Committee on Finance. Mr. Angelone said it was calculated at $1.2 million for the Department of Prisons alone. Forestry would have added to the cost, but neither Mr. Angelone nor Mr. Ghiggeri could cite the figure.
Senator Raggio pointed out the $16.1 million was probably a little high because it had not taken into consideration the cost to keep the camps open for 3 or 4 months. Mr. Angelone acknowledged that it was understood when he presented "Plan B" that he would have been required to find funding to keep the camps open.
Senator Callister asked if there had been any additional CIP funding added for renovation of any of the honor camps other than the one at Pioche. Mr. Ghiggeri replied the Executive Budget had included nearly $4 million for the expansion and renovation of the Stewart Conservation Camp. Senator Callister asked if that was predicated upon the closure of the other camps. Senator Raggio responded that the work on the Stewart Conservation Camp had been earmarked for expansion and renovation in any event.
Senator Callister estimated there would be $7 million in CIP funds expended for the Stewart camp and $3 million for Pioche. Mr. Ghiggeri said, "There's probably $1 million in savings based upon the department's decisions not to renovate the culinary unit at NSP [Nevada State Prison] that would probably have to be subtracted from that." Senator Callister computed the CIP costs would approximate $6 million.
Senator Coffin asked if there were any lawsuits pending against the prison system due to the budget. Mr. Angelone replied there are probably potential lawsuits at any time but he was unaware of any. When asked if there was a mandate to spend any money to rehabilitate any of the camps, he said there was no court or other mandate to do so. He suggested the fire marshal would probably be the first to close any of the camps, as was done with part of the camp at Pioche. He added the two scheduled for renovation were "in dire need of being renovated for safety and fire-code reasons."
Senator Coffin asked if any of the other camps that had originally been scheduled for closure were in such bad condition that it might
require Mr. Angelone to make a request for funds from the Interim Finance Committee (IFC). Mr. Angelone replied the Wells Conservation Camp might require additional funds for renovation and the continuous use of all the camps may require upgrading.
John E. Neill, Chief, Fiscal Services, Department of Prisons, confirmed Mr. Angelone's belief all the major problems that could be anticipated over the next 2 years had been included in the budget.
Judy Matteucci, Director, Department of Administration, stated the $2.9 million necessary to complete the camp at Pioche had been reobligated to other projects. She said there are some other bond savings that had come to light, such as the culinary unit, which could be moved.
Mr. Ghiggeri interjected the State Public Works Board had identified an additional $3 million in savings that can be applied to the 1993 CIP program. Senator Raggio declared there was no question that the camp at Pioche would have to be rehabilitated if it is to remain open. Mr. Ghiggeri said projections made by the Department of Prisons show the additional beds at Pioche will be required by April of 1995.
Mr. Ghiggeri stated there appear to be adequate savings that could be transferred from other CIP projects. He named $1.3 million from the regional medical center, $1 million from the culinary unit at NSP and $1.9 million for the Nellis site which could be used for the Pioche Conservation Camp.
Senator Coffin asked what sources of funding applied to the prison system aside from General Fund money. Mr. Ghiggeri replied there was some funding available from municipalities and some was contributed from the Division of Forestry.
Senator Coffin asked how much the Department of Prisons charged for services rendered to municipalities or parks. Mr. Angelone responded the Division of Forestry managed such projects, and the Department of Prisons has nothing to do with the project once the inmates leave the prison.
Senator Raggio indicated he would invite the Division of Forestry to respond. Mr. Ghiggeri interjected many projects are done at no cost to the municipality and they serve a secondary purpose of keeping the inmates busy.
Senator Coffin asserted the towns who fought so hard against the FCA and who benefit from the work done by inmates should be charged a fee. He suggested an income item be added from municipalities to help balance the budget. Senator Callister echoed Senator Coffin's opinions.
Senator Raggio opened the hearing on Assembly Bill (A.B.) 257.
ASSEMBLY BILL 257: Clarifies authority of board of regents to contract with different types of investment entities in providing retirement program for professional staff.
Mark Dawson, Chancellor, University and Community College System of Nevada, testified in support of A.B. 257. He related the university had only offered one retirement program (TIAA-CREF) until approximately 2 years ago at which time the university contracted for two more retirement programs, Variable Annuity Life Insurance Company (VALIC) and T. Rowe Price.
Mr. Dawson said the Committee on Group Insurance reviewed the action and felt there was an ambiguity in the law. A.B. 257 was proposed to clarify the university's ability to enter into such contracts. He stated his belief the bill was supported by the Department of Administration.
James T. Richardson, Lobbyist, American Association of University Professors, reported he had been chairman of the compensation committee at the time the retirement program was expanded. He had been informed of widespread interest throughout the system to broaden the retirement alternatives. Because 20 other states had
allowed alternatives to the TIAA-CREF retirement plan, the university was encountering difficulties in recruiting faculty members from universities with alternatives.
Dr. Richardson said initially he and the general counsel for the university felt the university had the authority to provide alternative programs. He explained the Committee on Benefits felt there was an ambiguity and requested the bill.
If the legislature does not pass the bill, Dr. Richardson said:
The Committee on Benefits has taken the position that folks who take one of these alternative retirement programs, when they retire...could not get health benefits that other state retirees could get. In other words [they] wouldn't have the health insurance unless they are under TIAA-CREF or PERS [Public Employees Retirement System].
Dr. Richardson urged approval of the bill.
Mark Feldman, Attorney, Mark Feldman Associates, said as a consultant in the insurance industry he had been involved in many retirement plans in several states across the country such as that at the university.
Mr. Feldman explained the retirement program used by the university is called a "defined contribution program," which is different from a "defined benefit plan" found in most state programs. He said:
"Defined benefit" means your benefit is defined in terms of your years of service, your final salary.... In a "defined contribution plan" the only thing that's defined is the amount of money, usually a percentage of salary, that goes into the program. The benefit at the end is the amount of money that went in and what that money earned over the employee's career.
Mr. Feldman stated he was appearing at the request of the university and of VALIC. He provided a written statement in support of A.B. 257 (Exhibit F. Original is on file in the Research Library.). He said the trend is to broaden the availability of various plans. That gives the employees the responsibility of making their investments which, he said, imposes a duty upon the employer to provide a carefully selected, wide array of investments from which the employees may choose.
Nobody came forward in opposition to the bill.
Senator Rawson announced as an employee of the university and an investor in the TIAA-CREF program he would abstain from either discussions or the vote on A.B. 257. Senator Glomb indicated she would not participate in discussions or vote either.
Senator Raggio opened the hearing on Senate Bill (S.B.) 476.
SENATE BILL 476: Creates recreational trail advisory board and provides funding for recreational trails.
Senator Rawson said S.B. 476 was an attempt to provide for the common interests of all those involved in various trails programs. He said it represented motorized vehicles, hikers, equestrians and other groups. The bill would support development of trails in the state to complement the federal system enacted in 1991 as the Symms National Recreation Trails Act.
Senator Rawson said the Symms Act provides up to $30 million nationally over each of the next five fiscal years to establish and maintain a recreational trails program. He read the list of activities to be included. He said the state has 3 years from the date on which congress approved the Symms Act to meet specific requirements. The target date is December 18, 1994, which makes this legislative session the last opportunity to act.
Senator Rawson said the state must create a recreational trails advisory board with representatives of both motorized and nonmotorized trail users. He read:
If a state imposes a tax on nonhighway recreational fuels, the state must, by law, reserve a reasonable estimation of the revenues from the tax for use in providing and maintaining recreational trails; and the governor must designate the state official or officials who will be responsible for administering the money that is received under the act.
Senator Rawson stated the Governor has designated the Division of State Parks as the lead agency to administer the program and S.B. 476 enacts the remaining provisions necessary for eligibility under the federal act.
Fred W. Welden, Chief Deputy Research Director, Research Division, Legislative Counsel Bureau, highlighted specifics in the bill which addressed the issues listed by Senator Rawson. He said section 11 was significant because it would provide the proceeds of the tax on motor vehicle fuel attributable to off-road vehicles must be used for recreational trails and related purposes. That money would go into the trust account. He explained the process is one similar to that used by motorboats to divert the portion of the motor vehicle fuel tax used for motorboats to motorboat purposes.
Senator Glomb asked how those taxes could be determined. Mr. Welden replied it was outlined by the provisions in section 15 in which the Division of State Parks will conduct a study under contract to the university to estimate the number and types of off-road vehicles used in the state. With that information the Department of Taxation will be able to estimate the amount of fuel tax that should be allocated to the trust fund. He pointed out section 11 places a cap of $950,000 on the amount that could be diverted.
Senator Rawson interjected other states have made comprehensive studies and the federal government has a table which can be used to help the state make an analysis.
Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources, said he was the person who had been designated by the Governor to administer the program.
Mr. Weaver said the University of Nevada, Reno (UNR), Bureau of Business and Economic Research had put together a proposal for him. They had estimated a survey to meet the stipulations of S.B. 476 would cost from $17,000 to $18,000. He said a portion of it could be funded by federal funds.
Senator Raggio called attention to a fiscal note which indicated approximately $600,000 would be raised annually. Mr. Weaver responded:
Based on the federal estimates, which are...taken [from] more detailed estimates from other states...because we don't have any registration of vehicles...to indicate exactly how many there are, based on the assumption that since the federal law does require both state and local taxes, so you're talking up to 33 cents in any one locality...it would be about $583,000, if you assume that the entire 33 cents is collected.
Senator Raggio asked if the bill added a new tax. Mr. Weaver responded it would not. He admitted it would have the effect of reducing the amount of fuel tax being collected for highway fund road maintenance.
Mr. Welden explained an amendment to section 13 would specify that a refund presently in the law for certain types of uses would not apply to the funds delegated to the trust fund. The present provision allows a person who purchases 200 gallons within a 6-month period for use off-highway to apply for a refund. He said, "This would specify that the refund does not apply for this portion."
John Perry Comeaux, Executive Director, Department of Taxation, explained:
There is that existing refund provision in the law, but the fact of the matter is that the department does not make refunds in that area because of that restriction of the 200 gallons over a certain period of time. We simply don't get the refund claims.
Mr. Comeaux pointed out that estimate in the fiscal note prepared by the department would be slightly under $400,000 in fiscal year (FY) 1994-95, the first year impacted. He gave copies of the fiscal note (Exhibit G) to the committee. He said of the $394,450 for FY 94-95, $302,750 would come out of the state highway fund and $91,700 would impact the distribution to the counties.
Mr. Comeaux interpreted the bill to impact only the mandatory 23 cent gas tax and would not affect the up to 10 cents optional county tax. He declared it was because the law only refers to specific sections of chapter 365 of the Nevada Revised Statutes which apply only to the 23-cent portion of the tax.
Senator Callister asked if the measure would affect existing highway tax money that is presently used to match federal highway money. Mr. Weaver responded he did not know that it was used to match federal funds although it is used for maintenance. He indicated a total of $129,934,390 was collected in FY 1992 and it is estimated approximately $400,000 would have been available for trails depending upon the results of the UNR study. The Symms Act would provide up to $333,000 per year of federal funds, although congress only appropriated 25 percent of the amount last year and the state will only receive $83,224 this year.
Senator Rawson acknowledged the bill would limit the amount that could be allocated to the trust fund from state fuel taxes to $950,000. He pointed out those buying fuel for off-road use have been paying taxes for other uses and should be entitled to a portion of those taxes for trails.
Senator Coffin asked how many different agencies would be involved in monitoring the program. Mr. Comeaux replied the Department of Taxation already collects the excise tax and would simply relay the information to the treasurer for distribution.
Senator Coffin asked, "Would that affect the ratios we maintain between DMV and PS (Department of Motor Vehicles and Public Safety) and total highway fund of 22 percent?" Daniel G. Miles, Fiscal Analyst, replied, "The 22 percent applies to the amount of money that DMV [and PS] collects...."
Mr. Comeaux pointed out the department uses a similar application for the Department of Wildlife based upon motorboats. He said the distribution for that program is calculated through a formula that estimates the gallons used multiplied by the existing tax rate from which one-twelfth is taken out of the current distribution and put into that fund. He averred the formula proposed in S.B. 476 might be a better way to allocate the tax. He explained the bill would use information on historical usage to determine a percentage to be applied to current revenue collections. He asserted the recreational trail program would benefit from the growth in sales each year.
Mr. Welden explained part of the inconsistency is due to the fact that motorboats are registered, which provides a base upon which to calculate the tax. Off-highway vehicles are not registered. Senator Raggio inquired if the bill would include jeeps used on the highway. Mr. Weaver responded it would not, only unregistered vehicles are to be included.
Senator Glomb inquired about the fiscal note which indicated General Fund revenue would be required to pay for staff. Mr. Weaver answered the Division of State Parks had estimated the program would take approximately 20 percent of the planning specialist's time and approximately 5 percent of his time. Senator Glomb estimated the program would cost $11,000 to $12,000 per year for salaries. Mr. Weaver concurred.
Mr. Weaver proposed the program should borrow funds from the General Fund for the study which might be repaid from federal funds once the program is fully implemented. He guessed the division might have to borrow $6,000 to $12,000 from the General Fund for the estimated $17,000 study.
Senator Glomb calculated the program would need approximately $20,000 from the General Fund in the first year and $12,000 each year thereafter. After further discussion Senator Glomb recognized only the amount to be borrowed for the study would be needed because the staff time has already been included in the budget. Mr. Weaver concurred.
Senator Jacobsen noted the biggest users of off-road fuel are agriculture and mining interests. He inquired how off-road usage of such equipment would be determined. Mr. Comeaux replied there is a formula used to verify refund claims from agriculture and mining. He said in FY 1992 refunds of $428,000 were made to farmers and ranchers from the motor vehicle fuel tax and refunds to general users, such as heavy construction operators, of $232,000.
Senator Jacobsen asked who funded the Rim Trail at Lake Tahoe. Mr. Weaver replied it had been funded primarily through private donations in a cooperative venture with the United States Forest Service (USFS) and the Nevada Division of State Parks who provided some manpower, supplies and secretarial assistance.
Senator Jacobsen voiced his opinion that users should pay. Mr. Weaver suggested the addition to S.B. 476 of another phrase that would exempt certain interests. He proposed adding to section 13, subsection 3, paragraph (b) to clarify the issue. He proposed the wording, "In this state for recreational purposes."
Senator Jacobsen asked how a goat trail could be distinguished from a road or a recreational trail. Mr. Weaver suggested a statewide plan should be formulated that would include an inventory of existing trail resources on federal, state and private lands with a detailed assessment of trail needs and a prioritized list of projects. Mr. Weaver said the Division of State Parks had intended to make such a study but due to loss of personnel as a result of budget cuts it would not be possible. He stated his intention to hire a consultant from the proceeds of the federal funds to be received for the recreation trails.
Senator Jacobsen asked how that would work in closed areas such as the wilderness areas. Mr. Weaver replied wilderness areas are eligible for the funds. He said the federal legislation includes a provision that 30 percent be used for nonmotorized trails, 30 percent for motorized trails, and 40 percent is discretionary. He said wilderness areas, Bureau of Land Management (BLM) areas, and USFS areas of national parks lands can be purchased with the grants.
Mr. Weaver declared the best use of the funds will be for maintenance and signage of existing trails. He said the federal law discourages construction of new trails.
In response to a query by Senator Jacobsen, Mr. Weaver acknowledged that it was possible that inmates could be paid for work on the trails out of the funds.
L.D. Bennett, President, Tahoe Rim Trail, offered testimony (Exhibit H) in favor of S.B. 476. He asked that the record reflect the organizations listed on his written testimony all offered support for the bill. The membership represented numbered 2,105 persons.
Mr. Bennett read a letter (Exhibit I) from Dale Ryan, chairman of the American Discovery Trail. Mr. Bennett said American Discovery Trail had applied for national scenic trail status and it is the only east-west trail that completely traverses the United States. That organization also supports S.B. 476.
Marie Young, Trails Coalition of Southern Nevada, expressed concern over the care and longevity of Nevada trails. She said she believed the trails not only would provide recreational benefits for Nevadans but also would have a positive economic effect on the state.
Ms. Young read a statement on behalf of Liz Manion of the Nevada Trails Coalition in support of S.B.476. The statement indicated the membership of the coalition includes 150 members of both motorized and nonmotorized trail users and trail providers representing over 800 persons.
Senator O'Donnell submitted the purpose of the bill was to allow trail users to contribute funds for the maintenance of trails, that it would be a user fee.
Senator Raggio interrupted the testimony of S.B. 476 in order to take testimony on funding for the Southern Nevada Children's Home.
Southern Nevada Children's Home - Page 1005
John Sarb, Administrator, Division of Child and Family Services, Department of Human Resources, came forward to respond to an earlier query as to whether there would be sufficient funding to pay for contract services at the Southern Nevada Children's Home. He declared there is sufficient funding budgeted. He stated:
That funding would come from budget account 3229, [category] 11 which currently pays for foster family placements and other similar contract placements. The 1994 budgeted amount is an increase of some $900,000 over 1992.... We estimate that the expenditures for contracts at the Southern Nevada Children's Home would be about $775,000.
Senator Glomb asked if Mr. Sarb was anticipating an increase in federal funds. Mr. Sarb responded:
The concern that we had previously registered...is that the budget certainly reflects sufficient funds to cover our anticipated costs as it stands right now. The concern we have is that the federal government is in the process of rewriting their funding policies. We do not know what the effect of that will be, and we won't know...for at least the next couple of months what the effect of that will be.
So the caution that I provided [the Assembly Committee on] Ways and Means and would provide you is that it may be necessary to revisit this budget as an IFC matter sometime, perhaps even before the end of this calendar year, depending on what the federal government does because that category is...heavily dependent on federal funds.
Mr. Sarb indicated he was looking into two other federal funding possibilities as a contingency plan. He requested the committee approve his ability to approach IFC should it become necessary.
Senator Coffin asked where another $6 million in cuts would be made that were imparted to him last week based upon actions of the Assembly Committee on Taxation. Mr. Sarb responded he employed a strategy to attempt to avoid lawsuits because the majority of the clients in the division have federal protections regarding the level of service that they are to receive. He said there are some states that failed to provide reasonable efforts that are under consent decrees right now.
Mr. Sarb said $6.5 million over the biennium will necessitate a deep cut in mental health and correctional services. He stated that was not advisable, but he said there is no federal statutory guarantee for services to those children which means they will be the ones impacted.
Mr. Sarb voiced the opinion that there will be no way to avoid a lawsuit with the cuts to be imposed and said it was likely that the state will lose such a court case based upon 47 lawsuits in 25 states that he has reviewed.
Senator Coffin asked Mr. Sarb to provide the committee with a list of the budgets that he would have to protect due to potential lawsuits. Mr. Sarb replied:
It's going to be fairly widespread...because the problem there is reasonable efforts include not only caseload size, which would be covered under [budget accounts] 3145 and 3229, the child welfare budgets, but also the services. Reasonable efforts include the services. That means the mental health budgets and that means reducing out-of-state placements.
Senator Raggio asked Mr. Sarb to provide the requested information.
Senator Glomb asked if there had been enough money in the foster care budget last year to cover their care. Mr. Sarb said he had borrowed from that budget to cover other accounts and he acknowledged the forthcoming budget for the Southern Nevada Children's Home includes sufficient funds for the care of the 42 children there.
Senator Raggio voiced the understanding that there will not be the potential for large overtime claims if Mr. Sarb is successful in contracting out the children's home services. Mr. Sarb replied there are two considerations that drive the cost. He said one is the employee costs and the second is the nature of the facility. He opined:
Good times or bad times, Fair Labor Standards Act or not...that is the kind of facility that should be operated by the nonprofit sector. In every instance they do that less expensively than the state. One of the things that will happen by having a private, nonprofit operator run that is that we will be eligible for federal funds for the care of those children that we're not eligible for now by virtue of the fact that it's run by the state.
SENATOR RAWSON MOVED TO CLOSE THE BUDGET ON THE SOUTHERN NEVADA CHILDREN'S HOME IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATION.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS GLOMB AND COFFIN VOTED NO.)
* * * * *
Senator Raggio resumed the hearing on S.B. 476.
Russ Champion, Northern Coordinator, National Trails Day, provided the committee with a copy of the program for the National Trails Day (Exhibit J. Original is on file in the Research Library.) and a brochure on National Trails Day (Exhibit K. Original is on file in the Research Library.). He referred to a survey made in 1991 in which 51 percent of those polled enjoyed hiking, camping and usage of park and recreational areas more than any of the other activities listed in the poll.
Mr. Champion asserted the countless hours of time and material donated by people representing trails and parks organizations should be rewarded through the passage of S.B. 476.
Susan Lynn, Nevada Representative, Oregon-California Trails Association; Desert Trail Association, said the Desert Trail Association has approximately 700 members in Oregon, Washington, California and Nevada, and the Oregon-California Trails Association has approximately 2,500 members nationwide. The latter will hold a convention for 5 days in Elko in 1995 that will bring about 1,000 people to the state. She suggested S.B. 476 is important to tourism in the state.
Ms. Lynn related the new Oregon Trails Visitors' Center had anticipated 150,000 visitors during their 150th anniversary this year but they have had over 450,000 visitors since the facility opened on April 1.
Ms. Lynn acknowledged S.B. 476 is supported by a coalition of both motorized users and nonmotorized users. As a hiker she said she is happy to pay a gasoline tax in support of the measure. She pointed out hikers drive to the areas where they commence hiking.
Ann Kersten, Toiyabe Chapter, Sierra Club, offered support for S.B. 476.
Linda Leavister, Nevada Trails Coalition, said she represented northern Nevada's off-highway vehicle users. She pointed out Nevada has one of the largest trail systems in the United States which should provide an excellent opportunity to obtain federal funds. She said there have been mass closures of roads in California which might bring additional revenue to Nevada. She indicated that would include revenues for many items other than gasoline taxes.
Ms. Leavister asserted maintenance and signage of trails is badly needed as is an educational program to prevent people from destroying the desert.
Stephanie D. Licht, Treasurer, Nevada Wool Growers Association, said her organization was not opposed to S.B. 476 but did have some concerns with it. She admitted it may be difficult to decide which projects are meritorious. She said food, water, shelter and clothing are absolute needs. She acknowledged it is up to the legislators to determine which things are needs and which are wants.
Ms. Licht suggested the trail program could grow bigger than originally anticipated and funding for other programs might suffer from lack of money because the funds were spent on the trails instead.
Senator Callister asked if Ms. Licht was aware the funds would come out of the gas tax and no new source was anticipated. Ms. Licht acknowledged she was aware of that fact. She countered, "You guys are also having trouble filling potholes.... Not that it shouldn't go there, but what are the needs...."
Senator Callister asked if Ms. Licht objected to the expenditure of state highway money on an off-road trails program. Ms. Licht replied, "My suggestion is that we need to be careful how we spend all our money, state, highway or federal."
Senator Callister argued there is $129 million in state highway funds and the proponents of S.B. 476 are asking for one-half of one percent of that, $400,000, to be used as a match for federal funds. He objected to the implication that the funds to be used would compete with funds for the children's home or filling potholes because that is not how state highway funds are used.
Tom Bentz, Nevada Alliance for Responsible Animal Use, expressed concern that the project may not be as promising as it appears. He charged that many federal promises are often turned into threats. He pointed out 87 percent of the land in Nevada belongs to the federal government. He said a majority of the off-road trails and 4-wheel drive roads were developed by mining and ranching interests over many years.
Mr. Bentz said he had just returned from an area where mining interests were chased out in order to put in a trail. He admitted the trail is beautiful, but he said only one person used the trail over a 4-day period. He suggested those trails are normally used by mining or ranching interests.
Mr. Bentz alleged the federal government is closing existing roads in southern Nevada at a rapid pace, and the southern BLM district has made statements that usage and access need to be restricted on more southern areas. He asserted BLM reasoned there is too much demand for those trails due to the large population centers nearby.
Mr. Bentz worried that the roads in the Mt. Charleston area will be closed. He asserted those closures will hurt many people who use the roads for purposes other than recreation. He expressed fear that usage of public lands by other interests will be restricted if the federal government is allowed into the program.
Mr. Bentz suggested the state may lose federal matching funds for the highway portion of the $400,000 in order to gain federal matching funds for use on trails.
Mr. Bentz agreed with Ms. Licht that the money could be used elsewhere. He suggested there is an unpaved section of road off the old highway between Tonapah and Austin through Belmont to Monitor Valley that goes to a campground. He said if the $400,000 was spent to pave that 2-mile section of road it would serve more people.
Mr. Bentz reiterated his concern over the federal restrictions on land use.
In the absence of further testimony for or against the measure, Senator Raggio closed the hearing on S.B. 476.
Senator Raggio opened the meeting to a discussion of bonding for the new state office building proposed for Las Vegas.
Senator Rawson said he had learned that a lot of money had already been spent on the project and many commitments had already been made. He said that caused him concern over stopping the project even though he did not believe this was a proper time to build large structures due to financial constraints.
Senator Rawson conceded large sums had already been spent in purchase of the land and a park. He admitted the park would require management if the building was not constructed. He acknowledged the purchase price of $500,000 for the land was not excessive but he called it a big expense if it is not used.
Senator Rawson noted about $1.8 million has been spent to develop the design and engineering on the project and other contracts have been completed which bring those costs to over $2 million. He estimated over $3 million may have already been spent in direct expenses. He conceded over half of that would be wasted if the project was not continued.
Senator Rawson added that assurances have been made to the city, and he felt that the project should be continued in good faith.
Senator Coffin reported that after the committee had raised questions as to whether the State Public Works Board had the right to reject the contract because the original bid was high, a FAX (facsimile) had been received from the contractor accepting the bid. He said the acceptance included several legal documents indicating the state would have a problem if the bid was not accepted because the contractor agreed to meet the price.
Senator Coffin stated his only remaining concern is over the fact that the area is archaeologically significant. He said the contractor has only verbally agreed to stop work if something of significance is found. He suggested the committee send a letter to the State Public Works Board to attempt to get the contractor to commit to halt construction long enough for archeologist to investigate or to move Indian remains or structures.
Senator Rawson reported he had received assurances from Tom Stephens, manager of the State Public Works Board, that could be done. He agreed a letter of intent would be appropriate. He suggested the committee should communicate quickly with the State Public Works Board as they may be signing the contract by Friday. He suggested staff call the board immediately with the concerns of the committee to be followed by a letter.
Senator Raggio noted that Senators Rawson and Glomb had declared they would refrain from participation in action on A.B. 257.
SENATOR COFFIN MOVED TO DO PASS ASSEMBLY BILL 257.
SENATOR O'DONNELL SECONDED THE MOTION.
Senator Jacobsen asked if a precedent would be set for other retirees by enacting the measure. Senator Raggio did not believe it would, that it only clarified some existing language.
THE MOTION CARRIED. (SENATORS RAWSON AND GLOMB ABSTAINED FROM THE VOTE.)
* * * * *
Senator Raggio asked how a loan from the General Fund would be processed if S.B. 476 passed. Senator Rawson suggested it could be handled through the university system because the university would be making the study. He said:
If they simply paid for that study a few months later, their salaries are paid anyway, the people who are doing the study, I don't see it as being a serious problem as long as the money is returned to the system.
Senator Rawson said he did not believe there would have to be an appropriation.
Senator Raggio repeated:
The suggestion is that the study, which is contemplated under section 15, would be conducted or contracted with the University of Nevada System and that the committee's intent is not to appropriate specific funding either for a fund or a loan but that there would be some reimbursement from the collection of the tax.
Senator Glomb asked if he meant the university would pick up the cost for the study and later be reimbursed from the highway fund money. Senator Rawson said he did not intend to single out the university system but the people who will do the study are already salaried so they would not be in a deficit situation. He explained they could bill in one month and be paid a few months later. He pointed out there might be some federal funds available before the highway funds became available.
Senator Raggio voiced a concern that a tax would be imposed without any firm assurance that there would be matching funds. Senator Rawson responded he understood that the federal funds have already been allocated and become available when the state meets certain conditions and applies for them.
Senator Raggio recalled that only 25 percent of the federal funds had been funded. Senator Rawson admitted that was why the bill was written with a maximum. It would enable the state to start the program at a minimum to set up an advisory board and make the study.
Senator Raggio recollected there had been a suggestion that section 13 be amended. Mr. Weaver provided a memorandum with the proposed amendment (Exhibit L).
Senator Raggio asked if there was a fiscal note. Senator Rawson responded, "At worst we might have to add $12,000 to this, and that's not a true reflection of the cost because that will be returned." He suggested an appropriation could be made with a reversion, but he did not believe that would be necessary.
Jeanne L. Botts, Program Analyst, interjected that since the trail act had been made part of the highway reauthorization bill there was anticipation that large sums would become available. She acknowledged the amount available was not as great as anticipated and it requires a match from the state. She suggested that if the committee chose to provide a loan from the General Fund that an appropriation be added in the first year for use over the biennium with a payback in the following year from a combination of federal funds and state fuel tax funds.
Ms. Botts reiterated an appropriation of $12,000 would be made in the first year of the biennium and repayment would be provided in the second year of the biennium from a combination of the Symms National Recreation Trails Act funds and the fuel tax. Senator Raggio said an amendment to that effect should be obtained.
Ms. Botts requested an opportunity to work with the Division of State Parks to work up a budget in order to determine the fiscal impact if it is the intent of the committee to pass the measure. Senator Raggio authorized an amendment and asked Ms. Botts to bring back the information.
Senator Jacobsen asked if there might not already be an existing board that could fill the provision of the trails act. He questioned the composition of the membership. Ms. Botts responded she would see if there was a board in existence that could be used. She said the State Parks Advisory Commission was scheduled to be rolled into the new Natural Resources Board. She agreed to review the federal legislation to see if it would be possible to combine the trails board with an existing board.
Senator Coffin asked Ms. Botts to review the fiscal note from the Department of Taxation. She explained the federal law making the provision for trails greatly increased the amount of federal money that will be available for highway projects.
Senator Raggio announced the meeting would start at 7:30 a.m. on the next day. He asked the committee to be ready to close the prison budgets. He informed the committee there would also be a hearing on Saturday morning at 8:00 a.m.
There being no further business before the committee, Senator Raggio adjourned the meeting at 10:45 a.m.
RESPECTFULLY SUBMITTED:
Judy Jacobs,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
June 3, 1993
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