MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
June 16, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Wednesday, June 16, 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
GUEST LEGISLATORS PRESENT:
John W. Marvel, Assembly District No. 34
Mike McGinness, Central Nevada Senatorial District
Gene Wines Segerblom, Clark County Assembly District No. 22
Dean A. Heller, Assembly District No. 40
Senator Suzanne (Sue) Lowden, Clark County Senatorial District
No. 3
STAFF MEMBERS PRESENT:
Daniel G. Miles, Fiscal Analyst
Robert Guernsey, Principal Deputy Fiscal Analyst
Jeanne L. Botts, Program Analyst
Judy Jacobs, Committee Secretary
OTHERS PRESENT:
Leo Puccinelli, Elko, Chairman, Nevada Racing Commission
Judy Matteucci, Director, Department of Administration
Edward H. Hopper, Presiding Greyhound Steward
Lorne J. Malkiewich, Legislative Counsel, Legislative Counsel Bureau
Mimi Rodden, Nevada Preservation Group
Toni Tennille, Ambassador of the Arts for the State of Nevada
Anita Laruy, Director of Intergovernmental Relations,
City of North Las Vegas
Robert E. Hadfield, Nevada Association of Counties
Tom J. Grady, Executive Director, Nevada League of Cities
Glenn E. Logan, Carson Valley Historical Society
Pat Jackson, Nevada Federation of Republican Women
Christine Fey, Assistant Planner, Community Development Department,
City of Reno
Mary Ellen McMullen, Chairman, Nevada Humanities Committee
Mrs. Jean Dini, Concerned Citizen
Richard Lenz, Chairman, Friends of the Huntridge Theater of Clark County
Ronald M. James, Administrator, Division of Historic Preservation and Archeology, State Department of Conservation and Natural Resources
Kristen Shields, Representing Self
William L. Fox, Executive Director, Nevada State Council on the Arts
Linda Ponn, Carson City Children's Museum
Collie Hutter, President, Brewery Arts Center
Carl Dahlen, Executive Director, Brewery Arts Center
Senator Raggio announced the three bills scheduled all relate to the issuance of bonds for the preservation of cultural resources. He indicated testimony on the bills would commence at 8:30. He stated there were several other matters that must be addressed during the morning. He opened the meeting with a hearing on Senate Bill (S.B.) 507, a measure introduced at the request of the Nevada Racing Commission.
SENATE BILL 507: Makes appropriation to Nevada racing commission for certain operating expenses.
Senator Raggio said Sharon Brandsness, Commissioner and Executive Director of the Nevada Racing Commission, had submitted a list of outstanding obligations of the commission. He noted the commission will be deleted under the Governor's proposed reorganization plan and will be included under the authority of the Nevada Gaming Commission. It will be necessary to close out the remaining business of the Nevada Racing Commission.
Leo Puccinelli, Elko, Chairman, Nevada Racing Commission, said S.B. 507 includes a request for $63,413.38 to pay the commission's obligations. Senator Raggio asked if the Budget Division could comment on the allegation that the budgetary authority of the commission had been exceeded and they had acted without previous authorization relative to their budget.
Judy Matteucci, Director, Department of Administration, stated:
We never received a request. This request was forwarded directly to the legislature from the [Nevada] Racing Commission. As of this date...we have still not received the claims for payment, we have only received the copies that...the legislature has been presented with.
Mr. Puccinelli provided Ms. Matteucci with copies of his records (Exhibit C. Original is on file in the Research Library.) She indicated she had seen the packet. She stated she had not been provided with backup vouchers for the claims.
Ms. Matteucci said her concern was that the commission had exceeded its budgetary authority, and she had notified Mr. Puccinelli of her concerns and had provided the Office of the Attorney General with a copy.
Mr. Puccinelli declared that the law requires certain acts of the Nevada Racing Commission but the legislature had failed to provide the funds. He provided the committee with a copy of the regulations of the Nevada Racing Commission (Exhibit D. Original is on file in the Research Library.) He said the commission had contracted with people to perform certain services mandated by law but not had the funds to pay them. He alleged those people could have recourse through the courts.
Senator Raggio asked if the matter had been taken to the Interim Finance Committee (IFC). Mr. Puccinelli replied:
The suggestion was made, this is hearsay on my part that comes through Sharon Brandsness, she tells me that she...was prepared to go through the Interim Finance Committee but Scott Craigie [Chief of Staff, Governor's Office] said, `Well, you've always received your money in the past, why bother this time.' So it wasn't done.
Edward H. Hopper, Presiding Greyhound Steward, declared he was the only person who had been running the Nevada Racing Commission since 1990 when everyone went on administrative leave of absence. He described himself as a staff member. He said he was the person responsible for authorizing payments.
Mr. Hopper said he set a priority to pay rent, laboratory fees for testing blood and urine samples, supplies and telephone costs. He said after he had paid those bills there was not enough cash left to pay the people included on the first page of Exhibit C. He said the same method had been used in the past to pay obligations of the Nevada Racing Commission, even though some people had to wait 3 or 4 years for payment. He indicated the accountant, Tracy Raxter, Chief Administrative Services, Accounting Division, Department of General Services, could verify that such action had been taken in the past.
Mr. Hopper said the contractors listed must be at each race according to law. He described the tests that must be made and the licensing that must be done. He indicated the expenses for commissioners and contractors were for services that have already been performed, saying he had vouchers for those services and he had sent copies to Mr. Raxter. He stated in the past he had never sent the vouchers to Mr. Raxter prior to being paid. He said he had sent copies of the vouchers to the budget office at the same time.
Ms. Matteucci indicated she had only received copies of the top vouchers but had not received any backup materials by which she could verify the claims. Mr. Hopper agreed to provide those materials.
Mr. Hopper said the claims go back to August and September 1991. He stated the bills had not been paid because the Nevada Racing Commission had failed to go to IFC to request payment.
Senator Raggio asked for an explanation of the dues to be paid to the Association of Racing Commissioners International in the amount of $5,000. Mr. Hopper replied the commission operates throughout the world as well as in the United States.
Mr. Puccinelli explained the Nevada Racing Commission has been a member of the international commission for several years. He said through the efforts of the Nevada Racing Commission the international commission will hold a convention in Las Vegas next May. He admitted it would not be a huge convention. He said he feared that the host committee could not be in attendance if the dues were not paid.
Mr. Hopper said the test barn veterinarian had not gone to the mule races that had been held earlier in the month in Winnemucca because he felt he could no longer provide services at his own expense. Mr. Hopper said the race was run without blood tests but fortunately none of the urine tests were positive. He said he had estimated laboratory test bills at $5,000, but he acknowledged $3,000 might be adequate. He said he has provided Mr. Raxter with a list of the bills and the accounts to which they should be charged.
Mr. Hopper indicated there was nothing on the list of expenses that he felt could be eliminated. He said the third, fourth and fifth pages of his packet show the deficit from the money received from racing in 1991, 1992 and 1993 and the expenditures for the people who run the races at the track. He stated the list does not include additional expenditures for the office. He reported the
office has been closed and it is run from the private office of Ms. Brandsness with no charges for either the space or the telephone.
Mr. Hopper said the annual events include races in Ely, Elko, and two in Winnemucca. He stated Steve Wynn, the chairman and president of Mirage Resorts, had joined the Association of Racing Commissioners International as an associate member and had made some very complimentary remarks at the last convention in New York about the commission in its newsletter. Mr. Puccinelli read from Mr. Wynn's speech.
Senator Raggio asked if any of the unpaid contracts were written. Mr. Hopper answered they were all written contracts on file except for the contract with Ms. Brandsness. He explained the contracts are in force until they are canceled. Senator Raggio asked for copies of the contracts for the Senate Committee on Finance and for the Budget Division. Mr. Hopper said the Office of the State Controller already has copies.
Ms. Matteucci acknowledged she has copies of the contracts that were approved by the State Board of Examiners. She said the contract with Mr. Hopper does not exist in written form and has not been approved by the State Board of Examiners. She admitted all the contracts are fairly old.
Senator Raggio asked what the basis was for compensation to Mr. Hopper. Mr. Hopper replied it was a verbal agreement made by Ms. Brandsness and authorized by Mr. Puccinelli. He said he had kept track of his hours, as advised, and the agreement was for him to charge a regular rate of $16 per hour, although he said he reduced the rate to $10 per hour. Senator Raggio stated he would like a copy of the backup to Mr. Hopper's claims.
Senator Rawson declared the claims had been an issue over several legislative sessions, and he warned that any state agency manager who overspends his budget could be subject to legal action. He advised Mr. Puccinelli and Mr. Hopper that they should follow the laws because they could be in serious personal jeopardy. He stated the committee had matters of much higher priority. Mr. Puccinelli responded that the commission had always presented a budget.
Mr. Hopper pointed out the commission had saved 72 percent of the budget authorized for 1990, had saved 89 percent of the authorized budget for 1991, had saved 97 percent of the budget authorized for 1992 and so far in 1993 the commission had only spent 1 percent of the authorized budget. He explained:
Our problem is that the monies to come in that were proposed when we submitted our budget never came in. The dog track didn't open. They thought they were going to open in '91 and '92 and '93.
Mr. Hopper said he did not know when the dog track would open and explained that the commission had never spent above the sums budgeted. He said he used the budgeted sums as criteria, and he quit paying bills when he ran out of money.
Senator Raggio closed the hearing on S.B. 507 and opened the meeting on Senate Bill (S.B.) 261, Assembly Bill (A.B.) 170, and Assembly Joint Resolution (A.J.R.) 14 .
SENATE BILL 261: Requires issuance of bonds to provide revenue for grants for preservation and promotion of cultural resources of state.
ASSEMBLY BILL 170: Requires issuance of bonds to provide revenue for grants for preservation and protection of certain historical buildings.
ASSEMBLY JOINT RESOLUTION 14:Proposed to amend Nevada constitution to exempt contracts for protection of preservation of cultural resources or historic properties from debt limitation.
Lorne J. Malkiewich, Legislative Counsel, Legislative Counsel Bureau, said the three measures dealt with issuance of bonds to finance the preservation and promotion of historical or cultural resources. He said S.B. 261 and A.B. 170 started from the same premise and A.J.R. 14 was a proposed constitutional amendment to exempt certain debts from the debt limit. He explained these measures were the result of passage of Assembly Bill 590 of the Sixty-sixth Session.
ASSEMBLY BILL 590 OF THE
SIXTY-SIXTH SESSION: Provides for preservation and promotion of cultural resources.
Mr. Malkiewich said the court had determined that the bonds were not outside the debt limit although they purported to be and thus they could not be issued. He said S.B. 261 and A.B.170 would allow issuance of the bonds. When asked how the bills would accomplish that, Mr. Malkiewich replied:
They do not purport to put the bonds outside the debt limit. This is not protection or preservation of state property or the natural resources of the state. Therefore it is within the debt limit and that is not a part of the bills.
A.J.R. 14 attempts to address that by proposing to amend the constitution to add to the list of exemptions contracts for the protection and preservation of cultural resources or historic properties within the state, whether or not owned by the state, or for obtaining the benefits of such resources or properties.
Mr. Malkiewich explained the constitutional amendment would have to be passed by this and the next session of the legislature and ratified by a vote of the people in 1996. After that time the debt could be incurred outside of the debt limit.
Mr. Malkiewich described the provisions of S.B. 261. The total amount of bonds that could be issued under the bill would be $5 million with no more issued in any one year than $2.5 million.
Mr. Malkiewich said some changes had been made to A.B. 170 on the assembly side. He said changes had been proposed by the bond counsel and to change the manner in which the State Board of Examiners was being urged to issue the bonds expeditiously. He explained:
One of the problems of A.B. 590 [of the Sixty-sixth Session]...in addition to the constitutional problems argument was raised in court that even though the legislature said the [State] Board of Examiners "shall" issue these bonds that the board of examiners had discretion to decide not to do it anyway.
Mr. Malkiewich said the first change between A.B. 170 and S.B. 261 could be found on the first page of A.B. 170. It states that instead of the cost of the issuance of the bonds being paid from the reserve for statutory contingency fund, the cost would be paid out of the proceeds of the issuance of the bonds. He said the budget office had made that suggestion. The expense would be limited to 2 percent and there would be no General Fund expenditure to issue the bonds.
Mr. Malkiewich said the assembly bill set limits of $10 million for the first 5 years and $10 million for the next 5 years. It would allow $2 million per year with one exception.
Senator Raggio asked if the provisions of the bills would require that these bonds take precedence over all other bonds for Capital Improvement Projects (CIP). Mr. Malkiewich affirmed the query. He explained, if four or five different bond issues were authorized and it was determined that only part of them could be issued due to the financial climate, the bonds from the bills under discussion would take priority.
Mr. Malkiewich said a concern had been raised in the Assembly Committee on Ways and Means that A.B. 170 was not limited to "bricks and mortar." He called attention to lines 28 and 29 and lines 44 through 46 on page 2 which make it clear that the money can be used only for the actual expenses of preserving or protecting historical buildings.
Mr. Malkiewich noted there is an exception in section 6 that only $2 million can be granted per year. He said the Commission for Cultural Affairs would be allowed to issue a grant of up to $4 million the first year to allow them to catch up for the amount not granted in the past year.
Mr. Malkiewich said a question had been raised as to whether the previously funded projects would receive a priority. He indicated he had not found anything in the law that made that requirement. He had been asked to draft an amendment to clarify the point. He distributed copies of the amendment (Exhibit E) to A.B. 170 which would not obligate the commission to give priority to previous grants.
Senator Raggio pointed out section 7 provides that payment of the bonds would be provided through the annual tax imposed for the payment of the obligations of the state. He asked if that pertained to an ad valorem tax on real property. Mr. Malkiewich replied he did not believe the provision was necessary because the state securities law applies. He said the state securities law has provisions requiring an imposition of an annual tax.
Mr. Malkiewich said A.J.R. 14 would allow the two bills to be exempt. He said the bills do not purport to put the bonds outside of the debt limit as did A.B. 590 of the Sixty-sixth Session.
Senator Raggio noted the amount is different in the senate bill than that of the assembly bill. Mr. Malkiewich said the total amount in S.B. 261 would be $5 million, with a maximum of $2.5 million in any single year. If less were used the unused portion up to a total of $5 million could be carried forward.
Mr. Malkiewich reiterated the total amount under A.B. 170 would be $20 million with up to $4 million allowed in the first year.
Senator Callister said the basic differences in the original bills as presented had to do with the amount that would be decided by the administration. He said he would like to defer to Ms. Matteucci.
Senator Raggio said he had received numerous letters and telephone calls regarding the hearing of the bills. He explained the bills had been scheduled for hearing 2 months earlier but the chair had been advised various interested parties were not prepared to testify. Thus he had taken the bills off the calendar until this time. He said other legislators present would be heard first in order to accommodate their schedules.
John W. Marvel, Assembly District No. 34, noted A.B. 170 had passed out of the assembly with a vote of 41-1 while A.J.R. 14 passed unanimously. He asserted legal counsel had worked very hard to draft measures that would satisfy the budget office and the bond counsel. He offered his endorsement of the measures even though the one building in his district (the Nixon Opera House) to which it might apply burned to the ground on the same day it received a grant of $87,000 for restoration. He voiced his interest in the preservation of what he termed "our heritage."
Senator Raggio asked for justification regarding the provision that the bonds would take priority over all other bonds authorized by the legislature. Mr. Marvel said it had been the suggestion of legal counsel.
Senator Callister declared in light of a recent vote in Clark County against any increase in property taxes for more police protection or parks, and since, he alleged, 75 percent of any money that is generated through a state-levied property tax will come from Clark County, he could not place a greater priority on historic preservation than on public safety or education.
Mr. Marvel responded the legislation is designed to take care of something that is already in existence, is irreplaceable, and is deteriorating. He suggested even though it would be nice to have the extra police stations, for example, the people have existed without them. He declared these measures will preserve assets that the State of Nevada is rapidly losing.
Senator Callister said it was a troubling dilemma to him to confront prioritization of spending when the public has even voted against expenditures for more police.
Mr. Marvel interjected it had been very traumatic to him to watch the Nixon Opera House burn. Pointing out that Clark County is a "major player" as far as taxes are concerned, he reminded the senator that Humboldt County has always been an exporter.
Mike McGinness, Central Nevada Senatorial District, echoed the philosophical comments made by Mr. Marvel. He said not only rural Nevada but also Washoe and Clark counties have historical places that should not be lost. He asserted many local groups only need the additional help the state can provide in order to protect historical and cultural locations. He offered a letter from former Senator Virgil Getto in support of A.B. 170 (Exhibit F), along with a supporting letter from the Churchill Arts Council (Exhibit G) and a brochure (Exhibit H. Original is on file in the Research Library.).
Gene Wines Segerblom, Clark County Assembly District No. 22, offered her support as a second generation Nevadan for A.B. 170 on behalf of Winnemucca. She called attention to letters from the Friends of the Nixon Opera House (Exhibit I) and the City Council of Winnemucca (Exhibit J) urging support of A.B. 170.
Dean A. Heller, Assembly District No. 40, voiced support of A.B. 170. He suggested the provision in the bill giving priority may have been because there are so many projects on the CIP list. In response to Senator Callister's concerns, he averred it is the responsibility of the legislators to prioritize the funds from bonds under the debt limit.
Senator Suzanne (Sue) Lowden, Clark County Senatorial District No. 3, subscribed to the comments made by her predecessors. She asserted the need for preservation. She suggested that Senator Callister may have been "talking apples and oranges" when he said the people of Clark County had voted down new issues regarding police and schools.
Senator Raggio requested Ms. Matteucci discuss the basic issues of the bill. He asked her to make clear how the bond limit would be affected, the impact upon the bond rating of the state under the ratio study, and the priority language of the bill.
Ms. Matteucci said she had worked with Mr. Marvel and Mr. Joseph E. Dini [Speaker of the Assembly] to formulate A.B. 170. She attributed some of the difficulty to the mandate to the State Board of Examiners regarding the sale of bonds. She offered the opinion several issues had been worked out under A.B. 170 to accommodate some of the concerns she and the bond counsel had. She voiced her understanding the debt would not be exempt from the debt limit.
Senator Raggio interjected it would not be exempt because it does not meet constitutional language since none of the property belongs to the state. Ms. Matteucci agreed, calling it the biggest issue. She said:
We did ask...in A.B. 170 that the issues be limited to historical buildings and not ongoing operating. Ongoing operating is frowned upon as being bonded. Many states use short-term financing to fund ongoing operating, but it indicates a weakness in your financial system and that has been removed in A.B. 170.
Ms. Matteucci declared the provisions of A.B. 170 to limit the use to the preservation and protection of historical buildings are more appropriate use of bonding. She referred to a debt-affordability analysis that was prepared earlier in the session. She said:
Our co-financial advisors, Public Resources Advisory Group, has indicated to us two scenarios of debt-affordability. The one that we have proposed in the Executive Budget is that we sell approximately $60 million of new bonds for the next biennium. And that is an attempt to restrain our debt limits and begin to get them back down to the median levels which are 5 percent debt service as a percentage of revenue.
Ms. Matteucci said if the $24 million of bonds had been sold as was contemplated in April the debt service as a percentage of revenue would have been 7.86 percent while the median is 5 percent. She stated Nevada has been repeatedly warned by the rating agencies that the debt level is in the median range and growing. The state has been cautioned that it must limit its appetite to consume debt if the AA rating is to be maintained.
As a result of that warning Ms. Matteucci said the debt-affordability study was developed. The study has proposed $60 million worth of issue. She explained the $20 million, even though it is broken down into ten $2 million increments, becomes an obligation that the state must consider with future issues. She said $25 million worth of bonds authorized at the last legislative session have not been sold. She reported there have been requests for $9 to $12 million from small water districts which need to be added to any new debt to be issued.
Senator Raggio asked how much the Governor had recommended for state bonding. Ms. Matteucci replied:
The debt-affordability study presented $60 million. We have proposed $35 million for new buildings. $26 million of that...is tied up with the Clark County Community College of Southern Nevada, and then there are various other projects of which you are aware. It's...a fairly limited list that we have proposed for bonding this year.
Senator Callister brings up the issue...of where these bonds would sit. By not prioritizing, and one of the criticisms that the Public Resources Advisory Group did on debt affordability, and one of the criticisms that we are frequently getting from the rating agencies, is that the State of Nevada has no long-term public policy as to what it wants to use its debt for.
Ms. Matteucci said the state has been urged to define priorities. She acknowledged that leads to the issue in section 1, subsection 6 which indicates where that particular bond issue would fall in the priority list. She had suggested the inclusion of that statement to Mr. Dini and Mr. Marvel if that was the intention of the legislature. She concurred that it would replace any other bond authority and she would set aside $20 million of authority for the $2 million to be issued each year until it was consumed. She said that would be done prior to any other bonds.
Senator Raggio asked if Ms. Matteucci would like to make any recommendation. She replied it was the decision of the legislature but she requested that the legislature give guidance as to the priorities. She admitted one legislative session could not make a commitment for the next session, but she said she needs some sort of prioritization. She pointed out the state has significantly increased debt in the past 6 to 8 years, and that has caused Wall Street to watch Nevada. She declared, "We are to the point where our bond authority is now a precious, limited resource."
Ms. Matteucci said if the legislature does not make some statement of public policy regarding bonding priorities it will be left to the State Board of Examiners. She said there had been a great deal of confusion due to the cultural bonds not moving forward after the last session. She acknowledged the people involved with small water districts feel they should have top priority.
Senator Callister asked if the administration supported the $20 million bond allocation for preservation of cultural resources.
Ms. Matteucci responded, "What we have taken up until A.B. 170 as the top priority is the Question 5 bonds because the voters approved those bonds." [Question 5 came about as a result of the passage of Senate Bill 189 of the Sixty-fifth Session.]
SENATE BILL 189 OF THE
SIXTY-FIFTH SESSION: Directs submission of proposal to issue bonds for acquisition of property and water rights to protect and preserve natural resources of state.
Senator Callister asked if the total amount and extent of other projects that require bonded indebtedness have an influence on any recommendation that Ms. Matteucci might make. She replied her recommendation was that no more than $60 million worth of bonds be sold in the coming biennium. She reiterated her request for a list of top priorities.
Senator Callister inquired how much of the $60 million includes the unsold bonds from Question 5. Ms. Matteucci said all of those bonds were included, $24.6 million worth of unsold bonds. Senator Callister declared those bonds should come first because they were supported by the public. He estimated the remaining available bonding at $35 million. He asked how much the CIP package included.
Ms. Matteucci replied it included $35 million for buildings. She said her office had proposed $17 million in unused authority be reallocated to other projects and another $1 or $2 million had become available from unused bond authority. Senator Callister asked if that meant there was $20 million available. Ms. Matteucci said that is already included in the debt that had been issued, was unused and could be reallocated. She explained new debt issuance could be another $60 million.
Senator Callister asked how much money comes from Clark County whenever a bond issue is sold under a statewide property tax levy. Ms. Matteucci estimated something less than 75 percent of assessed valuation comes from Clark County.
Mimi Rodden, Nevada Preservation Group, read testimony in favor of A.B. 170 from Lieutenant Governor Sue Wagner (Exhibit K). Mrs. Rodden said she could demonstrate that travelers visit sites at the rate of 68 percent, historic homes at the rate of 71 percent, museums at 64 percent, and restorations at 56 percent.
In regard to the issue of priorities, Mrs. Rodden stated:
As a result of the Supreme Court hearing...the question was raised that the bonds could be issued in an appropriate manner, and the court did find that in one instance 17 years was not unreasonable. In response to that counsel felt that this language would encourage a timely selling of the bonds. It did not mean to usurp any authority previously set by anybody in the legislature.
Toni Tennille, Ambassador of the Arts for the State of Nevada, declared her support for A.B. 170. She endorsed the previous statements to support the measure. She said many people outside the state are not aware "that the arts are alive and well in Nevada." She expressed interest in the restoration projects to provide a venue to bring various forms of the arts to the communities. She suggested the restored buildings will provide settings for poetry readings or drama or musical programs.
Anita Laruy, Director of Intergovernmental Relations, City of North Las Vegas, offered support for A.B. 170. She stated it is vitally important that all the historical buildings and properties in the state be protected.
Robert E. Hadfield, Nevada Association of Counties, said:
We, too, have been firm supporters of this preservation effort for the past 2 years, and we also agree that it is critical that we preserve these resources of the entire State of Nevada. We urge your approval and passage of A.B. 170.
Tom J. Grady, Executive Director, Nevada League of Cities, reminded the chairman that many cities, including Yerington, Winnemucca and Caliente, had contacted him in support of the bill. He said Elko Mayor Tom Polkinghorn wished to go on record as being in support of cultural tourism. Mr. Grady urged support of A.B. 170.
Glenn E. Logan, Carson Valley Historical Society, offered support for A.B. 170. He repeated earlier opinions that too many historical buildings have already been lost.
Pat Jackson, Nevada Federation of Republican Women, distributed copies of a resolution (Exhibit L) passed by her organization in favor of A.B. 170.
Christine Fey, Assistant Planner, Community Development Department, City of Reno, declared:
We support this bill because it will enable cities...to rehabilitate significant historic buildings in our communities for the betterment of our citizens. This bill enables the establishment of community cultural centers for the arts and cultural offerings in older areas of our communities where they are often needed most. We believe it will also create new jobs during construction phases and with later programming offerings.
Mary Ellen McMullen, Chairman, Nevada Humanities Committee, said she sits on the Commission for Cultural Affairs where she had an opportunity last October to review over $9 million in grant requests the commission had received. She urged support of A.B. 170, saying she would like to continue the important work that was begun at that meeting.
Mrs. Jean Dini, Concerned Citizen, voiced her support for A.B. 170.
Richard Lenz, Chairman, Friends of the Huntridge Theater of Clark County, spoke in favor of A.B. 170. He stated his group had sent over 2,000 letters in support of the measure. He said the significance of prioritizing was evident as a result of fires at the Kyle Ranch and the Nixon Opera House.
Senator Raggio said it would be helpful to the committee if someone would outline and list the types of projects being contemplated for inclusion.
Ronald M. James, Administrator, Division of Historic Preservation and Archeology, State Department of Conservation and Natural Resources, said the Huntridge Theater had just been nominated to the National Register of Historic Places. He indicated when the Nevada Commission for Cultural Affairs reviewed applications for $9 million in order to select those that would receive part of the initial $2 million available they found many worthwhile projects. He offered to provide a list of those who were awarded funds and the list of the applicants.
Mr. James pointed out the Huntridge Theater was not on the list nor were several other worthy projects that should be on the list of applicants.
Kristen Shields said she represented herself as a former resident of Ely and as a current resident of Washoe County. She voiced the opinion that passage of A.B. 170 would enable the rural areas to maintain and restore the cultural resources which would enhance the heritage of those areas.
William L. Fox, Executive Director, Nevada State Council on the Arts, expressed sadness that he would be leaving state service after 13 years. He noted the City of Albuquerque is a very fast-growing southwestern city like Las Vegas. He related they had a controversy over whether or not to appropriate $32 million from the New Mexico state legislature to build a new cultural complex in the city. He said the citizens of Albuquerque spent $100,000 for a consultant who told them they had existing, wonderful historical buildings that could be converted into viable cultural facilities for about $2 million. He said they had decided to go forward with restorations and the state will save $30 million.
Mr. Fox suggested the same opportunity is available for Reno and Las Vegas.
Senator Jacobsen requested an update on projects throughout the state. He agreed many of the projects should be assessed and a determination made which ones should be carried forward. Mr. James responded the intent of A.B. 590 of the Sixty-sixth Session had been to do just that. He declared the Nevada Commission for Cultural Affairs performed that function admirably, and he commended the five members.
Mr. James provided the committee with a list of the $2 million in grants that had been awarded by the Nevada Commission for Cultural Affairs (Exhibit M).
Senator Raggio reiterated his request for a list of other projects that should be considered for the future. Mr. James expressed gratification that the residents of the state had come forward to request grants in support of their chosen projects. He suggested the citizens had set their own priorities through those actions.
Senator Raggio noted there is a directive to the cultural commission to consider local efforts even though that is not a mandatory requirement. He asked Mr. James to what extent a local effort might be required in order to qualify for matching grants or if the match would be provided solely through state aid.
Mr. James responded the $9 million for which applications were made represented approximately a 2 to 1 ratio in requests.
Senator Raggio interjected there may be areas where it would be impractical for local people to raise much money. He suggested the authority for a project can have more effect if there is significant local support. He acknowledged the funds available would not be able to address more than a small number of the projects on the list.
Mr. James said the commission is very interested in the availability of matching funds because the grant funds will go farther with matching funds.
Mr. Fox reminded the committee they had awarded money for a "challenge grant program" to be awarded by the Nevada State Council on the Arts. He said one requirement for applicants was that they match the funds on a 3 to 1 basis for capital improvement projects. He reported the amount of funds raised, primarily in the two major cities, has been nearly 9 to 1. He declared that indicates there is substantial private funding available.
Mrs. Rodden offered two examples of the success of matching funds. She said the Nixon Opera House project would have cost $1.4 million. She said use of the building had been restricted due to unmet fire codes and could not be used for general assemblage. Until the building burned down, over $1 million had been raised from the city, county and private sources due to the obligations provided through A.B. 590 of the Sixty-sixth Session. She said the catalyst was the funding provided through that measure. She suggested the same thing could be done in the heart of Las Vegas as easily as it was in rural Nevada.
Mrs. Rodden asserted there was never an intention that "a lot of foolish projects" be fully funded through the legislative action. She stated it was up to the communities and counties to let the commission know through the application process that they are behind certain projects and they will offer support.
Mrs. Rodden said:
The buildings have to be changed in a manner to meet today's needs, not simply be house museums. So what this does is simply begin to get the ball rolling, and it's to be ongoing and you are not to be coming back to this body for additional funding. It...was to avoid a lot of one-shot legislation that you are faced with each and every biennium.
Linda Ponn, Carson City Children's Museum, stated the museum had been scheduled to receive $75,000 from actions of the last session. She said the project has raised $400,000 toward a $1 million project and the money from the commission would have helped in the restoration of the building for the museum. She added her support for the bill.
Collie Hutter, President, Brewery Arts Center, reported the center was one of the original recipients of funding from the previous bill. She presented a paper (Exhibit N. Original is on file in the Research Library.) with figures showing what can be accomplished under a bill such as A.B. 170. She declared the center is heavily supported by members of the community and by Carson City. She noted the building is used as a cultural center.
Carl Dahlen, Executive Director, Brewery Arts Center, reported the Carson City Arts Alliance raised over $100,000 in 1977 to purchase the facility, and then raised another $250,000 to replace the outbuildings and stabilize the current structure. He stated the newer portion of the facility is now being used for a theater, art gallery and classes for various arts and crafts. He said it will cost about $500,000 to rehabilitate the old Carson Brewing Company building.
Mr. Dahlen reported $180,000 has been raised and expended toward that project. The work on the building so far has included stabilization for earthquakes, a new roof, a new elevator and other work. He said the Nevada Commission for Cultural Affairs has authorized $75,000 and the commission had anticipated an additional $75,000 would have been available. He said that would have been sufficient to open the ground floor of the building.
Mr. Dahlen declared the rehabilitation of the Brewery Arts Center is representative of all the projects under consideration.
Mr. Logan remarked the old Douglas County High School, built in 1915, is in the process of being rehabilitated as a cultural center. After the project commenced it was found that the building required a seismic retrofit costing $250,000 that had not been anticipated. He said another $100,000 has been spent and the project still will require approximately $475,000 to be completed.
Mrs. Rodden interjected the type of funding anticipated for Caliente, a small amount, made possible the award of a grant for $625,000, a grant for $90,000, and a grant for $40,000. She indicated those funds have provided the first elevator in the county and the community college will able to meet in the upper portion of an otherwise unused building.
Mrs. Rodden acknowledged there is never a good time to ask for additional funding. She averred there had been much preparation after the bonds were approved at the last session of the legislature. Since then, many projects have been halted and people terminated. She asked the committee to keep those considerations in mind while coming to a decision.
Senator Callister pointed out a similar measure had been passed for park construction a few years ago involving about $60 million in still unsold bonds. That had been recommended by the legislature and then had gone to a vote of the people. He asked Mr. Marvel if he felt a similar method should be used regarding historical preservation.
Mr. Marvel replied his major concern is that the legislature is already 20 years late taking action. He opined the deterioration of the historical resources will be compounded if there is further delay.
He admitted going to a vote of the people would be an option, but he felt legislators should understand the will of their constituents and should be able to come to a decision. He compared the suggestion to operation of the State of California where, he alleged, everything is being decided by referendum.
Mr. Marvel added that a ballot initiative requires an expensive, concentrated lobbying effort. He suggested that would be another roadblock.
In the absence of further testimony, Senator Raggio closed the hearings on A.B. 170, A.J.R.14 and S.B. 261. He stated the chair would not entertain any motions on the matters until after the bond program had been dealt with.
Senator Coffin complained that he had just read a newspaper article stating that the legislature had approved the budget by revising revenue predictions upward. He said he had not been present during any such action and if there was no such action he felt the article was misleading. He asserted the same criticism has been made against the legislature for the past 2 years. He asked if some such action had taken place while he was absent.
Senator Raggio replied, "No, we did not." He pointed out that the chair was not quoted in the article. Senator Coffin wondered why the press would make such allegations. He said the press had claimed that a secret meeting had taken place before the session at which time revenue projections were increased.
Senator Raggio responded he had no knowledge of what drove the press and he asked to get along with the meeting. He said the action on the preceding day had been to close budgets and agree with the Assembly Committee on Ways and Means, all of which are subject to revenue being available to support those budgets. He stated anything further would be dependent upon revenue. He pointed out none of the staff projections were part of the discussion on the previous day. Senator Coffin agreed, saying he was glad that was on the record.
Senator Raggio directed attention to the Distributive School Account for class-size reduction.
Distributive School Fund - Page 642
Jeanne L. Botts, Program Analyst, handed out a summary (Exhibit O. Original is on file in the Research Library.) of the class-size reduction issue. She said the first two pages were a summary of action taken on the previous day by the two money committees regarding the Distributive School Account (DSA). No decision had been reached on class-size reduction. She called attention to the second page depicting what each of the committees had decided regarding class-size reduction. She noted there is a difference.
Ms. Botts explained the major difference involved the number of teachers estimated for fiscal year (FY) 1994. She said the most recent estimates by the State Department of Education show 971 teachers will be needed for a ratio of 16 to 1 in first and second grades and the selected at-risk kindergartens. She said that figure represents the closure of the budget according to Senate Committee on Finance. She said the figures were increased by an anticipated 5.5 percent increase for growth in the second year of the biennium. She said 5.5 percent was also used for projections by the Governor and for the Distributive School Account.
Ms. Botts stated the assembly committee had decided to provide for 980.5 teachers, the number currently hired in the program rather than the lower number estimated by the State Department of Education. She said they had also used an increase of 5.5 percent for the second year.
Ms. Botts said both sides used new assumptions regarding the rollup costs. She said the assembly used 3.5 percent instead of the 2 percent used by the senate. She indicated that was due to the fact most of the teachers were hired recently and would gain one step each year on the salary schedule. She said the DSA uses 2 percent because many teachers have reached the top of the salary schedule.
Ms. Botts pointed out other differences in the fringe-benefit rates. She said the DSA used 17.3 percent because some employees would not be eligible for retirement benefits. She said the department used the full 18.22 percent for retirement benefits in its revised estimates. She added there are differences in Medicare contributions because all class-size reduction teachers were hired after the higher rate came into being in April of 1986.
Turning to the third page of the handout, Ms. Botts said it depicted the way the senate closed the budget, while the fourth page showed the assembly closing. She pointed out the major difference could be attributed to the number of teachers.
Ms. Botts said:
Both committees are choosing to fund the additional costs for the higher rollups and higher fringe rates by using new estimates of the revenue from estate tax. Because the senate has fewer teachers to budget for they are looking at around $800,000 a year in additional estate tax money. The assembly side, because they have 9 1/2 more teachers to budget for are looking at additional revenue of $1.1 million and $1.2 million from estate tax.
Ms. Botts said the final page contained final new projections prepared by the Budget Division on estate tax revenue. In summary she said the difference amounts to 9 1/2 teachers and additional estate tax revenue.
Senator Coffin asked what the justification was for increasing the estate tax revenue projections over the next 45 months. Ms. Botts responded estate tax collections for 3 months amounted to well over $1 million, one month was nearly $3 million in FY 1993. She said the Budget Division projected an additional $1.5 million would be left to balance forward to next year, an amount greater than what was known at the time the original budget was formulated. She pointed out it is difficult to predict because it is based upon who dies during the period.
Senator Coffin asked if it included the Don Reynolds estate. Ms. Botts answered it did not, but acknowledged some very large estates take a long time to settle so recent large estates have not been included.
Ms. Botts said the projections are based upon the past 45 months with no attempt to plan ahead as to who might be deceased. She pointed out if the revenue should not materialize there would be a shortfall and some of those teachers would be terminated. She said there is no automatic guarantee of state funding.
Senator Raggio announced the figures depicted were the only area of differences between senate and assembly actions. He suggested the committee could take action without the necessity of a joint meeting.
Senator Rawson recommended that the senate concur with the assembly on the issue because it is limited by the amount of estate tax money available.
SENATOR RAWSON MOVED TO CONCUR WITH THE ACTION TAKEN BY THE ASSEMBLY.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL ABSTAINED FROM THE VOTE.)
* * * * *
SENATE BILL 265: Makes various changes regarding program for education of handicapped persons.
Ms. Botts explained the main purpose of the bill was to change the term "handicapped" to "disabled." She said that was in keeping with federal law.
Ms. Botts noted another major provision in section 8. She recalled Senate Bill 611 of the Sixty-sixth Session provided for out-of-state placements of handicapped children.
SENATE BILL 611 OF THE
SIXTY-SIXTH SESSION: Makes various changes regarding provision of services for children and families.
It provided that children who were autistic, had traumatic brain injuries or suffered from severe emotional handicaps would be placed with the Department of Human Resources with final approval by the Superintendent of Public Instruction. Because of the controversial nature of the bill, in which shared responsibility was mandated, a sunset provision had been included. She explained section 8 of S.B. 265 removes the sunset, making shared responsibility permanent.
Ms. Botts said Gloria Dopf, Director for Special Education, had requested an amendment (Exhibit P) that would allow certain funds to be used for making arrangements to return students to the state who have been placed out of state. It would be limited to use of federal funds if they were available.
SENATOR O'DONNELL MOVED TO AMEND AND DO PASS S.B. 265.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR CALLISTER WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 511: Revises provision concerning program of accountability for public schools.
Senator Raggio announced further information was necessary to process S.B. 511 so he set it aside.
SENATE BILL 360 :Authorizes temporary advance from state general fund for authorized expenses of Nevada equal rights commission.
Senator Raggio pointed out a suggestion had been made to amend the bill to be effective upon passage and approval. The bill would make a temporary advance until federal funding is received.
SENATOR COFFIN MOVED TO AMEND AND DO PASS S.B. 360.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
The committee discussed the merits of passage and approval and decided it did not have much meaning at this point in time. Ms. Botts explained it would mean something only if the agency had some federal receipts that they would need before the close of this fiscal year. Senator Raggio suggested it might be better to simply process the bill with no amendment.
SENATOR COFFIN MOVED TO RESCIND THE ACTION TO AMEND S.B. 360.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATOR COFFIN MOVED TO DO PASS S.B. 360 AND THAT IT BE PLACED ON THE CONSENT CALENDAR.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Ms. Botts reported:
The two money committees closed the budget of the Equal Rights Commission requesting...quarterly reports to IFC on the cases closed and money collected and the implementation of the computer system. But I think you might want to do a letter [of intent]. When we heard the testimony on this bill, Judy Matteucci did say that she was going to make sure that they really did have some federal receipts coming in before she loaned them money, and we would probably at least want that in the record of our minutes.... We would not want to be loaning General Fund money to this agency if they hadn't already sent a bill to the federal government.
Senator Raggio reiterated the request would be made to the director of the Department of Administration, and she would notify the state controller of her approval. He suggested it would be inherent that she would not approve the request unless the funds were forthcoming. He suggested she should be relied upon.
ASSEMBLY BILL 55:Makes various changes to provisions governing disbursement of administrative assessment for violation of misdemeanor.
Senator Raggio recalled the measure had to do with the lower courts and money reversion. He said it would also allow interest to accumulate. It included a provision limiting the expenditures for which the funds could be utilized.
SENATOR O'DONNELL MOVED TO DO PASS A.B. 55.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 414: Creates legislative committee on veteran affairs.
Senator Raggio remarked he was not sure the committee was ready to take action on the measure.
Senator Rawson inquired if it would create a standing committee. Senator Raggio replied it would be a joint committee that would serve as a standing committee in the sense that it would provide for a 2-year term.
Senator Rawson said the difference in the membership provision was unacceptable. Senator Raggio agreed any committee should have equal representation by both houses. He said he was unsure it would be wise to set up a continuing committee on the issue.
A discussion regarding the fiscal note ensued. Senator Coffin suggested the bill could be processed by amending it to equalize the membership and by providing that legislators serve without pay, which would reduce compensation to travel expenses.
Senator O'Donnell expressed reservations regarding the veteran status of members. Senator Jacobsen suggested the committee could be tied to the cemetery committee. Senator Raggio asked for further recommendations on the bill at a later time.
SENATE BILL 415: Requires department of motor vehicles and public safety to solicit certain information concerning veterans when issuing or renewing drivers' licenses or when issuing identification cards.
Senator Raggio noted the fiscal note was only $4,600. He suggested an authorization from the highway fund could be included in the bill.
SENATOR RAWSON MOVED TO AMEND TO APPROPRIATE $4,600 FROM THE HIGHWAY FUND AND DO PASS S.B. 415.
SENATOR JACOBSEN SECONDED THE MOTION.
Senator O'Donnell asked for an explanation of the intended use of the information. Senator Raggio said several veterans had expressed a desire for something to show that they were veterans. Senator Glomb said the bill would provide a tally of how many veterans there are in the state since there is no other way to count them.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 6: Requires department of parole and probation to pay costs of detaining parolee in county jail for violation of condition of parole.
Senator Raggio recalled earlier testimony in support of the amended bill. He had asked Senator Callister to research the days involved in the bill and later the bill was amended again. He read the proposed amendment:
If a parolee is incarcerated at a county jail for a violation of a condition of parole, the sheriff of that county shall notify the chief parole and probation officer. Unless the chief parole and probation officer can show good cause why the parolee should remain incarcerated at the jail, and if there are no other criminal charges pending or warrants outstanding for the parolee, the...parole and probation department shall take custody of or release the parolee within--
Senator Raggio said that was the point at which the date had been changed in order to make it consistent. He continued reading:
The notification must be within...15 days if the prisoner was paroled by the board and 30 days if the prisoner was paroled by the authority of another state and is under supervision in this state, etc. If the department fails to take custody or release that parolee within the time required the sheriff may, if there are no other criminal charges pending or warrants outstanding, release him from custody.
Senator Raggio recalled testimony from the Department of Parole and Probation that they concurred with the changes.
SENATOR O'DONNELL MOVED TO AMEND WITH THE AMENDMENT READ BY SENATOR RAGGIO AND DO PASS S.B. 6.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 56: Provides cost-of-living increases for reimbursements paid to family foster homes.
Senator Raggio said no hearing had been held on the measure so he asked that it be set for hearing. He asked Senator Glomb to obtain a fiscal note.
Senator Coffin remarked no response had been received from the Division of Forestry regarding the cost of maintaining honor camps. He pointed out inmates are paid from $1 to $3 per hour to work for various municipalities while the agency receives $7 per day. He wanted to know what the charge for the services should be and if the legislature should make a change in the daily rate.
Robert Guernsey, Principal Deputy Fiscal Analyst, stated the Division of Forestry has a limited data-collection system and in order to provide the information they would have to review all their monthly reports and billings. He said they had pointed out that a number of government entities throughout the state have been exempt from the fees in the past and it could provoke some real problems if that policy was changed. He cited the flood control groups in Clark County as examples of exempt groups.
Senator Raggio asked Senator Coffin and Mr. Guernsey to attempt to gather further information.
ASSEMBLY BILL 8: Requires, upon request, granting of leave of absence without pay for state employees to care for newborn or newly adopted children.
Senator Raggio said the measure has a considerable fiscal note which he would like to consider prior to hearing.
Senator Raggio adjourned the meeting at 10:50 a.m.
RESPECTFULLY SUBMITTED:
Judy Jacobs,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
June 16, 1993
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