The Committee on Ways and Means was called to order at 9:30 a.m., on Monday, April 5, 1999. Chairman Morse Arberry Jr., and Vice Chair Jan Evans presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Mrs. Jan Evans, Vice Chair

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph Dini, Jr.

Ms. Chris Giunchigliani

Mr. Lynn Hettrick

Mr. John Marvel

Mr. David Parks

COMMITTEE MEMBERS ABSENT:

Mr. David Goldwater (Excused)

Mr. Richard Perkins (Excused)

Mr. Robert Price (Excused)

STAFF MEMBERS PRESENT:

Vice Chair Evans advised committee members the first item for consideration was A.B. 41.

Allen Biaggi, Administrator, Nevada Division of Environmental Protection, explained the bill had been amended from its original form and passed out of the Assembly Committee on Natural Resources, Agriculture, and Mining. The changes made to the bill significantly reduced the cost to the Division of Environmental Protection for administering the provisions to the point where Mr. Biaggi felt the fiscal note for A.B. 41 could be removed. According to Mr. Biaggi, the revised bill neglected to incorporate two important items contained in the approved amendment:

• In Section 1, number 1, line 8 and, Section 1, number 2, line 11, "investigation" should be deleted and "inquiry" inserted in its place.

• In Section 1, number 2(a), line 13, after the word "permit," the words "or in response to a compliance order or consent agreement," should be added.

Mr. Biaggi informed the committee he had spoken to Assemblyman Carpenter, the sponsor of the bill, who related those changes would be satisfactory to him.

Vice Chair Evans asked Mr. Biaggi to confirm the removal of the fiscal note; he replied that was correct. Vice Chair Evans instructed Mr. Biaggi to submit his minor changes to staff in order to implement the final draft of A.B. 41.

Vice Chair Evans then asked Mr. Biaggi to explain the expected outcome of the bill after the requested changes were made; would those modifications change the thrust of the bill. Mr. Biaggi stated changing "investigation" to "inquiry" would allow the division to perform telephone follow-ups, or some type of action other than an actual analytical sampling, as would be required under the term "investigation." There was a significant discussion in the Natural Resources, Agriculture and Mining hearing regarding what an "investigation" would entail, and what the extent would be. Mr. Biaggi explained it was the consensus of opinion that the term "inquiry" would be more appropriate and would also provide greater flexibility for the agency.

In terms of the requested change to Section 1, line 13, Mr. Biaggi stated often, when the division was dealing with a compliance order or consent agreement, there was an acknowledgment by both parties that certain activities needed to be completed. In those instances, he explained, there would be no need for the division to conduct an inquiry, because both parties acknowledged the necessary action. In the modified version of the bill passed out of the Natural Resources, Agriculture, and Mining committee hearing, that language was included in the amendment, but was inadvertently dropped in the second draft.

Vice Chair Evans inquired why the bill originally contained a fiscal note, and what precipitated its removal. Mr. Biaggi explained the concern was that an investigation conducted at a federal facility, specifically the Department of Energy facility at the Nevada Test Site, and other Department of Defense facilities, could result in significant cost to the division in terms of conducting concurrent sampling and concurrent investigations. The division often used the data developed by those federal agencies, so the original bill was amended, Section 1, number 2 (1), to read: "Occurs on land that is managed or controlled by the United States Department of Defense or Department of Energy***". That amendment resolved the division’s concerns, and also resulted in removal of the fiscal note.

John Carpenter, Assembly District 33, advised the committee he concurred with the amended version of the bill. Those amendments were passed out of the Natural Resources, Agriculture, and Mining committee, but for some reason were not included in the final version of the amended bill. He stated basically what the bill would accomplish was when the Nevada Division of Environmental Protection was conducting an investigation or inquiry, it would do so with division staff. The division would not rely on testimony or findings from any other agency, unless there was an emergency or imminent danger to life or property.

Mr. Dini asked if the bill was the result of the case from Elko regarding the Forest Service. Mr. Carpenter replied in the affirmative. Mr. Dini then asked how the bill would help in such a situation. According to Mr. Carpenter, in that particular case, the county and Forest Service were at odds, and the Forest Service contacted the Nevada Division of Environmental Protection, although many actions they reported had not actually occurred. That was borne out after the division actually went to Elko County and conducted an investigation. If the division had conducted the investigation with its own staff in the beginning, much of the conflict could have been avoided and/or resolved. Mr. Carpenter stated he felt the bill would be of great assistance in such issues as clean air and clean water. Further, he noted if there were conflicts, the division needed to conduct an investigation, rather than using "hearsay" evidence.

With no further testimony forthcoming on A.B. 41, Chairman Evans declared the hearing closed. The committee would review A.B. 269 as the next item of business.

Nancy A. Becker, Justice, Nevada Supreme Court informed the committee A.B. 269 was a dual referral which was passed out of the Government Affairs committee and referred to the Ways and Means committee due to the fiscal note. The note was placed on the bill because at the time it was unclear whether or not the current budget included the allocation for the payment of the pension and, in fact, it did. When the committee approved the Supreme Court’s budget last session, the allocation for payment of Supreme Court Justice’s contributions was included. Justice Becker explained what had happened, however, was that no one realized the statute, which provided for the District Judge’s contributions to be paid by the state, did not include the Supreme Court.

According to Justice Becker, legislation was introduced in 1985 to include District Judges in the Public Employees’ Retirement System (PERS). At that time all members of the Supreme Court were under the Judicial Pension Plan, and were not contributing to PERS. No one thought ahead regarding what would happen when District Court Judges who were contributing to PERS were elected to the Supreme Court, as had occurred with her, Justice Myron Leavitt, and Justice Deborah Agosti. The bottom line was if their PERS contributions were not paid by the state, just as they were when they were District Court Judges, they would actually realize less money as a Supreme Court Justice than they had as a District Court Judge.

Justice Becker explained since 1985, as the legislature approved pay increases for both the Supreme Court Justices and District Court Judges, it had always considered the fact that pension benefits were paid for the District Court Judges when the base salaries were set, recognizing it was an additional benefit. What the bill would do was add those justices who were formerly District Court Judges into the language of Nevada Revised Statutes (NRS) 286.421, since the revenue was allocated during the last budgetary session. Justice Becker stated that action would ensure that any District Court Judge in the PERS pension plan who ran for and won a Supreme Court seat, would not end up earning a lesser salary.

Mr. Marvel asked if the bill would give the incumbent Justices the option of switching to PERS. Justice Becker stated it would not give those Justices that option, and they would remain under the Judicial Pension Plan. Mr. Marvel then asked how the two pension plans compared. According to Justice Becker, under the Judicial Pension Plan, pensions were paid by the state when a Justice retired, with annual payments allocated at that time. Under the PERS plan, she explained, contributions were made into an annuity fund, and employees who retired were paid from that fund once the required age was reached. Further, explained Justice Becker, the bill would actually equalize the two pension funds, because under the Judicial Pension Fund, the state paid for the full pension, and under the PERS plan, if the statute was not amended, those justices under PERS would be at a disadvantage.

Dana Bilyeu, Operations Officer, PERS, testified that PERS had taken a neutral position with respect to A.B. 269 because the fiscal note attached would have no impact on the pension fund itself. It would simply be a matter of the difference between retirement contributions being paid on a reduced scale, or based on full judicial salary as appropriated for the Judicial Pension Plan.

There being no further testimony, the hearing on A.B. 269 was declared closed; Chairman Arberry informed the committee the next item for review would be A.B. 595.

Bob Rose, Chief Justice, Nevada Supreme Court, announced he was appearing before the committee in support of the execution of a long term lease for office space in the Las Vegas Regional Justice Center. At the present time, the Supreme Court Office was housed on the second floor of an office building which did not provide sufficient space, and would only serve the court for an additional 2 or 3 years. The lease on that space would terminate in 3 years, and Chief Justice Rose stated the justices felt the Regional Justice Center would be a logical choice for the location of their office.

The Supreme Court has had a presence in Las Vegas for over 10 years, explained Chief Justice Rose, and he felt it was extremely helpful, not only to the court itself, but also to the Las Vegas community. It gave the Supreme Court a statewide presence, and assisted communication with the District Court and lower court judges, and their administrators on a daily basis. For example, Chief Justice Rose stated, the Supreme Court had found it very helpful in the last few months when planning the legislative package, to communicate regarding problems, and also provide a better coordination and communication system in southern Nevada. The two justices who were permanently based in Las Vegas had greatly assisted the court. Needless to say, Chief Justice Rose explained, the Nevada Supreme Court would always be housed in Carson City, with its primary office and workload in that location.

Continuing, Chief Justice Rose advised on any given week, Justices Agosti and Leavitt would work in Carson City, where case dispositions were handed down, and where support staff was located. He reiterated the majority of the court’s work would always be done in Carson City, but having a reasonable base in Las Vegas was very helpful. Chief Justice Rose said in the long run, he felt the Regional Justice Center would be good for every level of the judiciary, and the Supreme Court would like to be part of it. That location would assist in communication and cooperation with the other courts, and would provide the Supreme Court with a plan for the future 20 to 25 years. In the event the creation of an Intermediate Appellant Court was approved by the voters, the Regional Justice Center would be a logical place for it to be based.

Chief Justice Rose noted the legislature had historically advised the Supreme Court to present better planning and better forecasting, in order to present better statistics and a better plan. A.B. 595 was part of that "better plan," stated Chief Justice Rose, and he felt the legislation was proactive rather than reactive, and also an excellent long-term plan. It was important to the future development and growth of the judiciary and especially the Nevada Supreme Court. In short, Chief Justice Rose indicated, such action would put the Supreme Court in the best location with the other courts at the lowest price. Chief Justice Rose advised that Justice Becker would present the particulars, as she had been intimately involved with the project, both from the District Court level, and now as the Supreme Court representative.

Mr. Marvel asked in 10 to 20 years, which agency would have title to the office. Chief Justice Rose deferred to Justice Becker for specifics, however, as he understood it, the ownership of the building would remain with Clark County.

Justice Becker disclosed there were two available options, with the choice dependent on direction from the committee, and explained at the end of the 20-year lease, the Supreme Court could have a quasi-ownership interest. That meant it would never pay beyond the base rate over the 20-year period, based on the cost to Clark County to front the money to build out the floor for the Supreme Court. The base lease rate would be $1.85 or $1.86 per square foot, based on that formula. In addition, there would be a certain amount of operation and maintenance (O&M) costs, (Exhibit C).

According to Justice Becker, there would also be an option at the end of the 20-year lease to enter into an additional lease of 5 to 10 years, and pay an increase in the O&M costs. In the case of quasi-ownership, the Supreme Court would not be required to pay the lease rate, but would be required to pay the O&M costs for the life of the building. Justice Becker advised the Supreme Court had not yet made a decision as to which option to choose, and when the lease was actually signed, the court would give itself the flexibility to choose either option at the end of the original lease period.

Mr. Marvel asked if the lease would count against the bond indebtedness. It was her understanding, advised Justice Becker, the long-term lease would not count against the bond indebtedness. She stated it would be a long-term debt, which would effect the cash flow, but not the bonding cap. That information was provided at the Interim Finance Committee (IFC) meeting, and was consistent with IFC’s opinion to date. Mr. Marvel then asked for clarification of the annual tax alluded to in the bill. Justice Becker stated under the Constitution, the bill had to be written to include that stipulation because it was a long-term debt, however, there would not be an annual tax. Further, she explained, all long-term leases were written that way, but there would be no annual tax, and the only charge to the Supreme Court would be a percentage share of O&M costs; for example, a percentage share of security, or maintenance costs, et cetera.

Was an escalation figured into the lease, inquired Mr. Marvel. Justice Becker replied that the O&M costs would not escalate, and further, the court could negotiate the terms of the lease. Justice Becker referred to the packet of material furnished to the committee (Exhibit C), which contained the best case scenario and the worst case scenario. The worst case scenario was that the court would be required to pay 3 percent O&M costs. The estimate of O&M costs was based on the cost to operate the Government Center in Clark County, because it was a new building with similar costs. The best case scenario would be if the court was only required to pay 1 percent O&M costs. Even with the worst case scenario, Justice Becker noted there would be a savings of $10 million, with a break-even point in 5 years, versus a commercial lease.

Mr. Marvel inquired how the O&M money would be funded. Justice Becker stated it would be funded from the annual budget. The breakdown contained in Exhibit C, depicted the anticipated annual cost under the 20-year lease, versus what the anticipated annual cost would be under a commercial lease, which would have to be renewed every 5 years. In the worst case scenario, in the first year the court would be paying $130,000 more, assuming 3 percent O&M costs. If, however, 1 percent was assumed, the cost would only be approximately $20,000 more. For the first 5 years, the court would pay more than a commercial lease, if it was not able to negotiate less than 3 percent O&M costs. If the court negotiated those costs at 1 percent, it would recover the actual investment within 18 months. Justice Becker advised the court would be paying a substantial amount of money anyway when the current lease ended, and would have to find a new location in order to secure the additional square footage it needed.

Justice Becker noted the courtroom currently in use by the Supreme Court was quite small and inadequate, however, for the remainder of the lease, it was better to stay at that location rather than pay the fine for breaching the lease. Justice Becker explained if the Supreme Court leased space in a commercial building, it would be required to pay a substantial amount of money per year. For the first 5 years at the Regional Justice Center, at 1 percent O&M costs, the court would almost be at a break-even point during the second year of the lease. In other words, the court would be paying less for 20,000 square feet in the Regional Justice Center because the cost was so low, than it would pay for 10,000 square feet in a commercial office building, without the extra room to expand.

She explained the court would realize the much lower cost because Clark County would simply bond out the construction costs now and charge the court a flat lease rate of $1.85 or $1.86 per square foot, which was the current rate in most comparable buildings. Justice Becker noted the court had surveyed downtown buildings, and rents ranged from $1.85 to $3.30 per square foot, not including security or the cost of technology installation, and when those costs were added, the cost rose significantly. In the Regional Justice Center, she explained, Capital Police would not have to provide security, because it would be provided via the bailiffs who would be on duty anyway to service the District and Municipal Courts.

Did the justices have adequate room in the Supreme Court Building in Carson City, asked Mr. Marvel. Justice Becker replied there was adequate room through 2003 in the existing building with some remodeling for additional needs. The concept of having resident judges was not a space issue, because there was sufficient room for all justices in Carson City. According to Justice Becker, it was a question of servicing Clark County and to coordinate, at least during the next 5 years, some of the statewide changes the Supreme Court would like to see in the judiciary. It was also a matter of being able to have a significant presence in Clark County in order to deal with issues there.

Mr. Marvel then asked if the court would use panels. Justice Becker answered in the affirmative. Further, she explained, once the Court of Appeals became a reality, the space that was currently occupied by the Supreme Court could then be occupied by the Court of Appeals. That added flexibility to the proposal, and she noted Supreme Court staff in Las Vegas would either shift to the Court of Appeals, or return to Carson City. The method previously proposed for implementation of the Court of Appeals included six Justices, however, there was no way to know if the measure would pass or what the initial funding allocation would be. Justice Becker stated the concept was to continue to split into panels, with at least three justices in Clark County, and three in Carson City. She emphasized the primary work of the Supreme Court was in Carson City, and for the Court of Appeals, the work would be split geographically.

Chairman Arberry asked what would happen if the committee moved things forward and instead of waiting for construction of the county building, proceeded with property purchase and building design to construct a Supreme Court facility now. He advised the committee wanted the court housed properly, and not running from place-to-place like "gypsies." Justice Becker stated constructing a building could not be done for $8 million, because if the state constructed a building specifically for the court, it would want to make it larger than 20,000 square feet to allow for growth; in a lease scenario, space can be added if necessary. If the state attempted to build a building that would include the Court of Appeals, it would probably require at least 40,000 to 60,000 square feet. According to Justice Becker, when the court recently approached the IFC, there was no appetite for a capital improvement project, and the planning was then completed based upon the long-term lease.

If the legislature were to give the Supreme Court the ability and guarantee that a building would be constructed, that would always be the better route to take. Justice Becker advised the two blocks of land purchased for the Regional Justice Center cost the county between $11 and $15 million. Chairman Arberry stated some of the projects downtown fell out of design or construction phase, and perhaps there might be the possibility, working with the city and county, to locate property for a building. Justice Becker stated there was property available, but it would cost between $3 to $5 million just for that property. Along with the property cost, there would still be a $10 to $15 million construction cost, which Justice Becker felt would be closer to the $15 million cost, because a new building design would be needed without the benefit of shared construction costs or security, et cetera. It would take approximately 18 months to draw up the plans for the building, and architectural fees were usually approximately 9 percent of the total cost of the project. Justice Becker felt such a building could not be completed before 3 years, and the funding would have to be guaranteed during the current session.

Once the Court of Appeals was a reality, and the method of funding decided, the court could present better space projections. At that time, the process of building a Supreme Court building could begin, while the court was approaching the end of its lease with Clark County. If the legislature would approve $20 to $25 million to construct a building, the court would certainly accept that funding, however, Justice Becker reiterated there did not appear to be an appetite for that type of funding.

William Maupin, Justice, Nevada Supreme Court stated he had served on the committee to review the building of the Regional Justice Center when he was a District Court Judge, and also served as a member of the Supreme Court on the same committee. He commented that from time-to-time, as government projects were analyzed, it was not done from the standpoint of how business would approach such a project. Justice Maupin stated the proposal was totally consistent with recent projections he and his former law partners completed in connection with building a new building in Las Vegas. The proposal made very good sense from a business standpoint, and the analysis also approached it from a business standpoint. Further, he stated it made inherent good sense to take that approach, and it was certainly cost effective, given the respective needs of the court in Las Vegas versus Carson City.

Jim Spinello, representing Clark County, informed the committee that in 1994, the then County Manager, Pat Shalmy, asked Judge Becker, now Justice Becker, to chair the taskforce that would begin planning for the long-term facility needs of the county’s justice community. It was the idea that the judge and the taskforce not only develop recommendations to address the current and future space needs of the courts, but would also identify ways to improve the services provided to the community by the court system. Over a 2-year period, the taskforce undertook an intensive planning effort that involved all major business partners of the courts, including the City of Las Vegas Municipal Court and the Nevada Supreme Court. Mr. Spinello reported the early planning work of the taskforce formed the foundation of the current proposal, a Regional Justice Center designed with the citizen and the legal community in mind. The center would make good use of space, was designed to make the court process more efficient, and would be the co-location of the Las Vegas Justice Court, the Eighth Judicial District Court, and the City of Las Vegas Municipal Court; it was a one-stop judicial shop. Mr. Spinello advised the county was currently in the process of designing space within the Regional Justice Center for the Nevada Supreme Court. Clark County believed that having the Supreme Court located at the center added to the level of service the court system could provide for the community. According to Mr. Spinello, the bill, as written, would provide the county with the ability to construct the space currently under design for the Supreme Court, and allow the county to arrange for the payment of debt service related to the space over the 20-year lease period. For that reason, the County Commission strongly supported A.B. 595.

Mrs. Chowning inquired if the lease contained an "escape" clause for either party. Mr. Spinello stated he did not think the lease had been fully negotiated, but would defer to Justice Becker for specifics. Justice Becker responded there was not an escape clause, per se, and the court would be committed over the 20-year lease period. There would be the possibility in the future for Clark County and the court to mutually negotiate a cancellation of the contract. For example, if the court was able to build its own building in Clark County, and the county wanted the space in the center to expand the District Court, it could be negotiated. Other than that, the court would be committed for the full time period, because Clark County was actually bonding out for the funding to complete the center.

Justice Becker felt the 20-year period between the lease and actually building in the south would meet the needs of the Court of Appeals and the Supreme Court during that time frame. The only way that space would not be sufficient was if the legislature chose to fund the Court of Appeals and add justices in a more aggressive manner than was historically done in the past. She stated the court had used the historical precedent because during sessions where there were budget "crunches," it was difficult to attempt to allocate the state’s limited resources between all branches of government. If, for some reason, the legislature added appellate judges at a greater rate than occurred in the past, the court would need to lease additional space in either Carson City or Las Vegas, and the legislature could then decide if it would be feasible to build new court buildings in both the north and south to deal with the Court of Appeals.

Marvin Leavitt, representing the City of Las Vegas, informed the committee the city supported the Supreme Court use of the Regional Justice Center, and agreed with comments made by Mr. Spinello regarding the logic of locating the various courts in the same location, to essentially create a one-stop justice center.

With no further testimony to come before the committee regarding A.B. 595, the hearing was closed. The next item for committee review was A.B. 371.

Bonnie Parnell, Assembly District 40, advised the committee that A.B. 371 would authorize the use of arbitration in adjustment of certain grievances filed by state employees. Currently, the final administrative level of a grievance was the Employee Management Committee, a body composed of six state employees and officials appointed by the Governor. Ms. Parnell explained the bill would provide an alternative to that procedure, whereby an employee who filed a grievance could elect to have that grievance heard by an outside professional arbitrator. The bill also provided that the losing party would pay the cost of the arbitrator. Under the present procedure, the Department of Personnel bore the entire cost of grievance arbitration.

Under A.B. 371, the cost would be borne by the agencies that generated grievances. Ms. Parnell stated she sponsored the bill on behalf of the State of Nevada Employees Association (SNEA), and would defer additional comments to Bob Gagnier, Executive Director of the association.

Mr. Gagnier reported that last session, an identical bill was passed by the committee in an amended form. A.B. 371 was the same format, and included nothing different from the former bill. Mr. Gagnier explained the committee Ms. Parnell referred to, the Employee Management Committee, was comprised of six members, theoretically, three members from management and three employee members. That committee had been in operation for a number of years, however, he felt there was a flaw in the procedure. An employee filing an appeal had to secure more than three votes in order to win the grievance, therefore, one member of management would have to be convinced to vote in favor of the employee.

Mr. Gagnier stated even beyond that factor, SNEA had found in recent years that appointment of members to the committee did not reflect the wishes of employees. At one time the Governor would select the employee members from lists supplied by employee organizations, however, that was no longer the case. In SNEA’s opinion, the decisions rendered by the committee were extremely poor, not just because the employee lost the case, but due to the fact that in many instances, the findings of fact and the conclusions of law were less than two pages in length, which SNEA considered insufficient.

According to Mr. Gagnier, A.B. 371 was passed unanimously out of the Government Affairs Committee, and sent to the Ways and Means Committee because it contained a small fiscal note. Of the $12,708 listed for the first year, and $16,944 for the second year of the biennium, $557 was the actual amount SNEA felt it would cost. That was the amount it would cost for one day of hearings by the Personnel Commission to select the arbitration panel, and was a known cost. Mr. Gagnier explained the additional costs outlined in the fiscal note were assumptions by the Department of Personnel, and were not attributable to any one budget, but to whatever agency filed the grievance. The costs would be spread throughout state government, and based upon SNEA’s experience, Mr. Gagnier would hazard a guess that probably one-third of the grievances would be attributable to the Nevada Department of Prisons (NDOP).

Mr. Gagnier informed the committee there was another element included in the fiscal note, and that was a matter of equity. Currently, the Employee Management Committee only held hearings in Carson City and Las Vegas, and did not hold hearings in the area where the employee resided. Further, Mr. Gagnier stated, a Senate Bill had been proposed which would require the Nevada Department of Transportation (NDOT) to hold its grievance hearings in the locality of the employee. The sponsors of that bill felt it was a great disservice when employees had to travel on their own time to Carson City or Las Vegas from outlying areas. Approximately $2,400 of the fiscal note attached to A.B. 371 would be attributable to hearings being held in outlying areas. Additional costs, approximately $14,000, would be the actual cost of the arbitrator.

Mr. Gagnier also noted there was an error in the fiscal note, in that the figures were based upon the state paying 50 percent of the arbitrator costs, which would not be the case. He explained the arbitrator would assess the cost to the losing party, unless it was determined a different assessment would be in order. Therefore, the only cost to the state would be if it lost a case. The cost would be borne by each individual agency in the state, and was not a cost that could be added to agency budgets. On the other hand, stated Mr. Gagnier, there would be cost savings; currently all expenses attributed to the Employee Management Committee were borne by the Department of Personnel and by the agencies that employed the six members of that committee. When those employees were attending a hearing, their duties were left unattended, so there would be a cost avoidance, because every hearing conducted by an arbitrator would decrease the burden on the agencies that employed those six members.

The estimate in the fiscal note was that 20 percent of the 40 grievances each year would go to arbitration, as opposed to the Employee Management Committee, and Mr. Gagnier advised that SNEA had no reason to dispute that estimation. SNEA felt arbitration would be a better system and would provide more accountability because if agencies continued to suffer the cost of grievances, it would be brought to the attention of management, whereas, currently no one seemed to care.

Mr. Marvel asked how many grievances were filed each year. Mr. Gagnier replied according to the fiscal note, 40 grievances were currently heard by the Employee Management Committee each year; however, that did not represent the total number of grievances actually filed. Mr. Gagnier advised there were probably hundreds of grievances filed each year.

Danny Coyle, President, Retiree Chapter, SNEA, informed the committee he would speak in favor of A.B. 371, and had been a member of the Employee Management Committee from October 1976 through October 1991, a total of 15 years. Mr. Coyle advised he felt an arbitrator and arbitration panel was a necessary addition to the grievance process. As the committee had been informed, the Employee Management Committee consisted of three management members and three employee members. Mr. Coyle stated when he served as a member, the employee members were from classified positions within various agencies, and management members were from unclassified positions, usually department or division administrators.

According to Mr. Coyle, for those grievances of which the facts and circumstances constituted a prima facie abrogation of an employee’s rights or condition of employment, the resolution and disposition of the grievance was relatively smooth. However, for those grievances which were more subjective in nature, such as performance evaluations, one-on-one confrontations, harassment (perceived or real), interpretation of answers to oral exams, et cetera, the process became bogged down, much to the disadvantage to the complainant.

Mr. Coyle went on to explain it was during the deliberations for those grievances, that the philosophical differences of the employee members and the management members became manifest, which often resulted in a three-to-three tie vote. There was not, as best as he could recall, a fair way to break those ties and give a measure of justice to the grievance. In those cases, stated Mr. Coyle, there was usually a decision of some sort based on vague findings of fact and conclusions of law, which were often euphemisms for a "no decision," a result which inured to the benefit of the agency. In some cases, the complainant would petition for a judicial review and, if denied, the case would sometimes be remanded back to the committee for a hearing de novo. That hearing would often be moot as the complainant, having spent much time and money, would no longer be in state service. He stated by adding the arbitration process to the grievance procedure it would, in his opinion, result in a more equitable and timely resolution of grievances.

Walter "Wally" Tarantino, stated he was present at the hearing representing the Nevada Corrections Association and the Nevada Highway Patrol Association, and stated both organizations supported the bill. Mr. Tarantino indicated he would like to applaud Ms. Parnell and SNEA for requesting the bill draft. Another perspective for the committee to consider would be that of an advocate, and Mr. Tarantino explained he had appeared before the Employee Management Committee on behalf of state employees on an average of 10 to 12 times per year. He stated there were many frustrations experienced by state employees in particular grievance situations concerning highly technical or complex issues that might require a multiple number of witnesses. Further, Mr. Tarantino stated, he took no exception to the prediction of the fiscal note regarding 20 percent of approximately 40 grievances per year might go to arbitration, adding he felt that was a fairly accurate prediction. One attractive feature of the bill was that the loser would pay the fees, and hopefully both sides would carefully scrutinize grievances prior to requesting arbitration due to the financial risk.

Mr. Tarantino stated the thought was that the bill would supplement the Employee Management Committee, not supplant or replace it. Both sides should attempt to resolve grievances rather than enter arbitration. Further, explained Mr. Tarantino, the Employee Management Committee met once a month in Carson City, and once a month in Las Vegas, if the number of grievances justified those hearings. There were occasions he represented employees when up to six grievance hearings were scheduled, and on such days, cases were allotted as little time as 45 minutes to present the case from both sides. He advised in some cases that was sufficient time, however, there were many occasions when 45 minutes did not provide the due process that was necessary in order to enable the employee to feel the grievance was adequately heard. Those cases were the exception where the bill would be utilized judiciously and efficiently for state employees.

Continuing his presentation, Mr. Tarantino explained that he handled a case last year where there were six separate grievances consolidated into one 45 minute hearing. He stated the Employment Management Committee did not have subpoena power, so in that instance, there were five complainants whose grievances were consolidated and who were not afforded the opportunity to call additional witnesses beyond themselves. If arbitration was in place, that grievance probably would have taken 6 to 7 hours to hear, and there may have been 10 to 12 witnesses, which would have developed a full record of the events leading up to the grievance. He felt it was very difficult to conduct a hearing for five separate grievances in 45 minutes, and perhaps arbitration could alleviate some of the frustration.

While he understood arbitration would not be in effect in a matter of weeks or even months, Mr. Tarantino stated there were more and more complainants waiting 8 months to 1 year before their cases were heard. If the bill was passed into law, there would be additional latitude because a grievance panel could guide a case through the internal steps, and parties could opt to go to arbitration rather than appearing before the Employee Management Committee, which might shorten the length of a delay.

With no further testimony forthcoming on A.B. 371, Chairman Arberry closed the hearing. The next item for committee consideration was A.B. 665.

John Slansky, Assistant Director, NDOP, stated with him was Dr. Donald Molde, who was the Mental Health Director, NDOP, and they were present to speak on behalf of A.B. 665. Mr. Slansky informed the committee if the bill was passed and if medical services were privatized within NDOP, as currently being considered, it would result in a lower bid price, and the extra money could be used elsewhere with greater benefit. If medical services were privatized, the bill would protect existing psychological staff, because many were not eligible for licensure, and many had made a decision not to pursue an advanced degree based on the current exemption from licensure. Therefore, explained Mr. Slansky, it did not make much sense to put those employees at risk.

According to Mr. Slansky, prison psychologists were currently exempt from licensure requirements. If the bill was approved and medical services were not privatized, then absolutely nothing would change. If, however, later in the session medical privatization were approved, then the bill would ensure that current employees would retain their jobs; the bill was designed to protect the jobs of the existing prison psychological staff. Certification and licensure was designed to protect the public, who would otherwise have no way to ensure that they were being serviced by a competent person. Mr. Slansky informed the committee that NDOP had standards in place and provided much oversight of the medical division and protection of the inmates. The bill would not change the current situation, and he stated there was no need for public protection or additional oversight.

Mrs. de Braga stated that currently it appeared persons did not need to be licensed as doctors to perform psychological services for the prison, and inquired if the bill assumed that privatization would, in fact, become a reality. Since staff did not need to be licensed at the current time, why was the bill necessary. Mr. Slansky reported if medical services were privatized, the bill would include the private company in the existing exemption. Mrs. de Braga mentioned she was not sure that was good policy, and there had been objections to it.

Mr. Marvel inquired if psychological or psychiatric work was contracted out. Dr. Molde replied that was done only at the Ely State Prison (ESP) via the Correctional Medical Services (CMS) contract; elsewhere within the system, NDOP staff were employed.

Vice Chair Evans asked for a description of the psychological staff at ESP. Dr. Molde explained a psychiatrist had joined the staff on March 29, however, the Mental Health Director had terminated on March 26, and recruitment was underway to fill that position. It was his understanding there would be a person filling in on a part-time basis in the capacity of Mental Health Director. There were currently two senior psychologists at the institution, and a third who would be vacating his position in the very near future. Vice Chair Evans stated, for clarification purposes, there was a psychiatrist at ESP who left, and the new psychiatrist had not arrived. Dr. Molde explained the new psychiatrist was scheduled to being employment on March 29, 1999, however, he had not been in touch with the institution to verify that employment. Vice Chair Evans then inquired about the senior psychologist positions; Dr. Molde explained there was a total of three senior psychologist positions, all were filled, however one employee was vacating his position; Dr. Molde did not know his date of departure.

Further, explained Dr. Molde, CMS was currently recruiting for a new Mental Health Director. Vice Chair Evans then asked what type of licensure was required for those positions. According to Dr. Molde, the psychiatrists must have a Nevada medical license, and the Mental Health Director must possess a Nevada license from the Board of Psychological Examiners. The three senior psychologist positions were aiming for licensure certification which might include, for example, Bureau of Alcohol and Drug Abuse (BADA) certification, or marriage and family counseling certification. One employee was actually a psychiatric nurse, as well as a Masters degree level psychologist. Vice Chair Evans inquired if they were licensed psychologists. Dr. Molde stated the three senior psychologist positions were not licensed psychologists. Vice Chair Evans noted the ESP Medical Department was already privatized, with unlicensed persons employed in the mental health program, and inquired what the purpose was of A.B. 665.

To clarify the purpose of the bill, Dr. Molde explained there was an inmate complaint filed with the Board of Psychological Examiners as to licensure requirements for staff at ESP, who were calling themselves psychologists. That board then referred the question to the Attorney General’s (AG’s) Office. In 1995 when the CMS contract was initiated, the idea was that it would not be required to meet a standard higher than that imposed on the rest of the department. In other words, at that time, the AG’s Office viewed CMS as "standing in NDOP’s shoes," and would not require it to meet a higher standard. The subsequent review by the AG’s Office caused a different opinion, which was that any private company, regardless of the contractual arrangement with a state agency, would be subject to the requirements of the private sector. That surfaced within the last several months and when the director of NDOP pursued his interest relative to the privatization of all NDOP medical services, then clearly that issue became important. Dr. Molde stated if a private contractor was required to hire licensed psychologists in all institutions, not only would it be very difficult to find qualified individuals, but would also create an additional fiscal note.

Vice Chair Evans commented that a licensed individual would possess better qualifications, and would also have passed the licensing requirements. She asked, because of hiring problems, if NDOP allowed "lower-quality" individuals to fill the mental health positions. Dr. Molde stated he would not agree with that characterization, and explained NDOP had basically two levels of psychologists working in the institutions. One was the masters degree level person, who was not eligible for licensure in Nevada in the private sector and could not represent themselves as psychologists, because they did not possess the necessary Ph.D. There were also Ph.D psychologists employed with NDOP, some of whom were licensed, and the others probably could pursue licensure if they wished to do so. Dr. Molde explained in place of licensure, NDOP had the opportunity under the law to operate under its own explicit standards, i.e., minimum job specifications, work performance standards, et cetera. That was the "substitute" for licensure used by NDOP, and Dr. Molde assured the committee the mental health staff was excellent.

Further, indicated Dr. Molde, in November of 1994, the federal court agreed that NDOP had excellent staff, and ruled that the state was in full compliance with the Taylor vs. Wolff Federal Consent Decree. Most of the psychological staff at NDOP today were the same individuals as in 1994. Dr. Molde stated he personally felt the staff was excellent, both Masters level and Ph.D level. Vice Chair Evans stated as she understood the situation, the motivation for the bill was based on the AG’s opinion that NDOP could not continue to staff the mental health program at ESP under the assumption it used the same standard as state agencies. With the idea of moving the entire prison medical program into privatization, the issue became more urgent.

Chairman Arberry asked when the committee would receive the bid information regarding the privatization. Mr. Slansky replied last week an evaluation committee visited the various sites where the bidders had programs in place, so that part of the process was complete, however, he did not know when the bid information would be available to the committee. Chairman Arberry asked who could answer that question; Mr. Slansky stated he felt Director Baer could provide that information, and he would inform him of the committee’s request.

Appearing next before the committee was Mace Knapp, an unlicensed Ph.D level psychologist for NDOP, having been employed there for approximately 18 years. He stated he was not at the hearing to represent NDOP, and advised he would like to propose an amendment to A.B. 665 in order to ensure that minimum national and state standards was followed by the private corporation. Dr. Knapp stated his problem with the bill as presently written was the reference to "a person" who provided psychological services, and thought a private corporation could hire any person to provide psychological services. He would propose the following amendment be added to Section 1(b), line 11:

• "***and the department of prisons, provided that this person has met the same explicit standards required for public agency psychologists***".

Mrs. de Braga noted there were strict standards in place for those positions, and even though licensure was not one of them, she asked if those employees were licensed anywhere. Dr. Knapp replied he was a member of the American Psychological Association, which was recognized as being the equivalent of licensure, and there were also other alternatives. Licensing was required for private practice psychologists who worked with clients with no peer review. Typically, explained Dr. Knapp, in large organizations licensing was not a requirement, and that was the reason some employees working in the mental health program had not secured licenses. Mrs. de Braga then asked if Dr. Knapp felt there was sufficient regulation in place to ensure quality psychiatric care was being provided at NDOP. Dr. Knapp stated as long as NDOP followed Section 1(a) of the bill, and followed explicit state standards, the quality of care would be sufficient.

Carlos Concha, Chief, Parole and Probation Division, stated he would speak in favor of A.B. 665. Currently, the division employed a psychologist in both the Reno and Las Vegas offices. The division had difficulty locating a psychologist qualified to conduct psychiatric sexual evaluations under S.B. 99, which was implemented during the 1997 session. Mr. Concha stated the division recruited extensively in southern Nevada, however, could not locate a licensed psychologist that would accept the position. He felt that difficulty was attributable to the amount of money to be made in the private sector versus the public sector. As a result, the division employed an individual who was conducting like evaluations in the State of Colorado. What then occurred was the division was initially advised through mental health services that the employee would have 1 year to obtain his license.

According to Mr. Concha, because S.B. 99 required a licensed individual, the division incurred problems with the Public Defender’s Office in Las Vegas, and could no longer permit that employee to conduct psychiatric sexual evaluations. Mr. Concha advised he also wanted to submit an amendment to Section 1(b), line 11:

• "***and the department of prisons, or division of parole and probation as an employee***".

That amendment would allow the division to hire a qualified person who was not yet licensed, but was in the process of obtaining a license. Mr. Concha explained the psychologist currently employed in the Las Vegas office was attempting to obtain a license, and was told he could take the examination in May, however, would not know the outcome until August or September. Mr. Concha stated if the division lost that employee and found it necessary to recruit outside the State of Nevada, it would be faced with the same situation. If the committee saw fit to pass the bill, Mr. Concha stated he would request his proposed amendment be included.

Mrs. de Braga asked if there was a time specific to accomplish licensure. Mr. Concha advised one of the problems the division suffered in attempting to coordinate the procedure was with the licensing body, which only met twice a year. It took from 3 to 6 months to secure a license.

Vice Chair Evans stated she had a question for Mr. Slansky or Dr. Molde, and inquired what CMS was currently providing at ESP for substance abuse counseling. Electing to respond was Dr. Molde, who advised the mental health staff essentially provided minimal or no substance abuse counseling. There could be programming on a volunteer basis, such as Alcoholics Anonymous (AA) or Narcotics Anonymous (NA) through the chaplain or some other area of the institution. Further, he explained, the Mental Health Department primarily provided care to the mentally ill as determined via their constitutional rights, handled crisis situations, and provided administratively required reports, such as Parole Board reports, et cetera.

Vice Chair Evans asked what percentage of the population suffered from substance abuse problems at ESP. Mr. Slansky replied whether or not substance abuse was a factor in the crime was a statistic he could not immediately provide, and as a factor of a lifestyle, he would estimate approximately 80 percent of the population suffered substance abuse as a factor of their lifestyle. He would also make the assumption it was a contributory factor, whether direct or indirect, to the offense. Dr. Molde stated he would agree with Mr. Slansky’s statement. Vice Chair Evans stated when NDOP contracted with CMS, asking that a certain range of services be provided, why was substance abuse treatment and/or counseling not included, given the high number of inmates who suffered from substance abuse. She stated she wanted to know why that was not required of CMS.

Dr. Molde stated Vice Chair Evans had "put her finger" on a very interesting issue. The Taylor vs. Wolff Federal Consent Decree had substantial influence on what the system looked like today, not only in physical structures and staff, but in the priority of treatment defined through that decree. The highest priority, according to the federal courts, not only in Nevada but elsewhere, was treatment and assistance for the mentally ill, or those who typically were diagnosed as schizophrenic, or other disorders that would include psychotic symptoms. Dr. Molde indicated those inmates who had that condition were on the highest priority level, and shortly behind those inmates would come those persons suffering a crisis such as suicide, or behavior that endangered the institution or the inmates. At that same level were administratively required tasks that had to be done, such as Parole Board reports, and psychological review of those inmates who had undergone long periods of time under lockup in disciplinary housing.

Even though substance abuse was an immense problem in the prison system, Dr. Molde reported, it received a very low ranking through the federal decree, and was not a topic that the Federal Court recognized in a constitutional context. He stated the ESP contract and duties of staff reflected the priority established by the Federal Court. Traditionally, substance abuse was generally handled on a community volunteer model (AA or NA), where basically inmates helped themselves. Dr. Molde reiterated substance abuse was not an issue with the Federal Court and, therefore, was not an issue with the CMS contract.

Vice Chair Evans stated even if the Taylor vs. Wolff case never existed, it would seem to make sense to provide substance abuse treatment if 80 percent of the population suffered from substance abuse problems. She stated she found the revelation "shocking," and inquired if there was substance abuse counseling treatment offered in the other NDOP facilities. According to Dr. Molde, there were counseling programs in varying degrees. At the Nevada State Prison, one of the psychologists, Mr. Farrar, had received national recognition for his substance abuse program efforts and activities. Also at Northern Nevada Correctional Center there was a rather sophisticated program which Dr. Gedney, the medical physician, had run for a number of years. Dr. Molde explained at Southern Desert Correctional Center, one staff person was virtually assigned full-time on substance abuse programming. Vice Chair Evans asked for a run-down of the programs available at each facility, including how many inmates were served. She stated at the toughest prison in the system (ESP), the contractor had not been asked to provide substance abuse counseling or treatment, and she found that overwhelming.

Appearing next before the committee was Steven R. Graybar, Ph.D., Clinical Psychologist, who stated he divided his time between his work at the University of Nevada, Reno and his private practice. He advised he was present at the committee to speak on behalf of the State Board of Psychological Examiners. Dr. Graybar stated he would respectfully disagree with Mr. Slansky and Dr. Molde, and had grave concerns about A.B. 665. Dr. Graybar stated he basically agreed with the concerns voiced by Vice Chair Evans. He indicated there were minimum and explicit standards for licensure through the State Board of Psychological Examiners. Dr. Graber’s concerns were that prison inmates deserved and required the highest care they could access. Basically, there were two broad concerns, whether or not people were ethically competent to practice psychology, and whether or not they were intellectually competent to practice psychology. Dr. Graber explained that was the purpose and function of the board, and while it did not want to cause employees to lose jobs, and would applaud any efforts to cut costs and manage expenses, the question was, "At what cost?"

With an 80 percent rate of substance abuse in the commission of crimes, the issue needed to be addressed by qualified and competent professionals, advised Dr. Graybar. Further, he explained, while he was not advocating that psychologists provide all care, he was advocating for certification or licensure of psychologists. There seemed to be an inherent conflict of interest in terms of NDOP monitoring itself. Ultimately, the concern was about the psychologists in the prison system being ethical and competent. There were standards which included a national examination and a state oral examination to determine if a person knew the laws governing psychologists in the State of Nevada, which was crucial when providing services. Dr. Graybar indicated the fact that inmates submitted complaints was not new, but what was new was the legitimate and substantive nature of complaints the board was receiving.

Dr. Graybar stated prison inmates were released from prisons to communities and neighborhoods, and if those inmates received substandard treatment, the communities would reap what they had sown. There was a bill under consideration regarding review of the panel that evaluated sex offenders for release. The legislature asked that a study be done which would redesign the panel to include a requirement that the treating psychologist have more input in the evaluation and ultimate disposition in the case of a sex offender. Dr. Graybar noted if that person was not a licensed psychologist, it would not be known if he had met the minimum standard for education, training, or experience in the assessment, observation, treatment and evaluation of sex offenders. If a person was not licensed, it was not necessary for them to address continuing education requirements, in a field which was constantly changing. In such a critical assessment of sex offenders, Dr. Graybar stated he felt that was a grave mistake.

While Dr. Graybar was a member of the State Board of Psychological Examiners, a psychologist from another state came to the board with some very serious charges levied against him involving the sexual exploitation of patients, along with other ethical violations and concerns. That person informed the board he wanted to be licensed in the State of Nevada, and the board refused to issue a license before the charges were investigated, and if found to be true, there had to be serious remediation. Even then, the board would have concerns and would request continuing supervision and education. Dr. Graybar stated that was a true story, and the person ignored the board’s decision, as he was already employed by NDOP and didn’t need the license, but had applied in order to conduct private consultations. That was a person who, while unfit to practice in another state, was practicing quite legally or at least outside the purview of the board, in Nevada. Dr. Graybar advised he felt that was a "scary" situation. He stated he hoped that person was practicing ethically and competently, however, had no way to verify that. No one, other than NDOP, could look into the matter.

In conclusion, Dr. Graybar stated that ultimately, while the state was saving money on the front side, in the long run there could be some fairly legitimate law suits filed by inmates. Vice Chair Evans stated it was assumed that treatment and/or counseling would succeed in behavioral modification, and if a person was incarcerated for any length of time without benefit of treatment, what was the likelihood upon release that he would return to the same behavior. Dr. Graybar state the data was clear, and the recidivism rate in general, with treatment, was frighteningly high, but without treatment, he would assume it would be higher, especially for substance abuse. If 80 percent of the inmate population suffered from substance abuse, he would think at least half of that population would return to substance abuse.

Pat Hines, Citizens United for Rehabilitation of Errants (CURE), a national organization, thanked the committee for the opportunity to appear and speak for CURE. Ms. Hines thanked Vice Chair Evans for asking for the run-down on services provided by NDOP, and for her concern about the lack of standards. She noted most discussions had revolved around substance abuse services, and asked about the other services not touched by the Taylor vs. Wolff Decree, such as the requirement for licensed psychological staff within NDOP. Ms. Hines explained problems sometimes arose that required psychological services just from being incarcerated for a lengthy period of time. As in the public sector, there were psychological needs for those who suffered catastrophic illnesses. Ms. Hines stated she was concerned that, while the Taylor vs. Wolff Decree would help those "truly mentally ill" persons, how would it help the state assessed sex offenders. Were they mentally ill or not, she asked. Most states called that category of offender mentally disordered. Ms. Hines noted there was a legislative interim study in 1997 which addressed treatment for the mentally ill. That committee made 24 recommendations to the legislative body, with the first 12 dealing directly with adult sex offenders.

According to NDOP staff, stated Ms. Hines, the "mentally ill" category did not include sex offenders. Four of the recommendations from the interim committee dealt with juvenile sex offenders, and two recommendations dealt directly with mentally ill offenders. Ms. Hines stated she would like to have clarification where NDOP stood regarding "truly mentally ill" offenders. Sex offenders were one group that did not receive as much help as was needed by qualified, experienced and trained persons in the prison system. Ms. Hines asked about homosexuals or those who had a different sexual orientation, and if those persons had access to programming. Those were just a few of the other areas where questions needed to be answered in the prison system. Ms. Hines agreed with Dr. Knapp that prison psychologists were a group that should not monitor themselves, and required standards. Her biggest concern was the lack of public protection. Ms. Hines quoted Assemblyman Anderson’s statement that, "Nevada did a good job of putting people in prison for a long period of time," but she felt the state did very little in the area of rehabilitation.

Ms. Hines felt if persons were not better upon release than they were when incarcerated, it would show in the recidivism rates. Ms. Hines recommended an amendment to A.B. 665 to add the following language:

• Persons currently employed by the prison system as psychologists be grandfathered in, but required to receive continuing education units every year, and within a period of 5 years they must secure a psychological license.

Committee members who discussed substance abuse knew even in the prison system, counselors must be BADA certified service providers. Ms. Hines asked why the necessary certification could not be required of other persons providing psychological services in the prison system. Ms. Hines stated she was interested in a therapeutic community for sex offenders in prison, and many federal grants required that persons providing services under the grant be trained in the designated field, which action she highly approved.

Further, Ms. Hines explained, a federal grant entitled Residential Substance Abuse Treatment (RSAT) was used to create a therapeutic community in the prison system, with 124 inmates participating in the program. That grant could be expanded to include dual diagnosis persons, and Ms. Hines stated she felt that should be done. The current grant allotment was $292,000; however, she had been informed there was a "hold-over fund of approximately $3,000," and she would propose that part of that money be used for other programs, such as substance abuse. She explained she hoped the bill would be amended to include a required time frame for psychological staff at NDOP to be licensed.

There being no further questions forthcoming on A.B. 665, the hearing was closed and the hearing on A.B. 454 opened.

Testifying on behalf of the bill was Stan Olsen, representing the Las Vegas Metropolitan Police Department, and the Nevada Sheriff’s and Chief’s Associations. He advised there was no actual fiscal note attached to the bill, but rather an explanation of the possible impact on the inmate population within NDOP. Mr. Olsen advised the bill was directed toward drug labs, and in southern Nevada there had been a significant increase in clandestine labs, which was a manufacturing facility for making illicit drugs. Such labs had also spread throughout Nevada, basically due to laws recently enacted in the State of California, which made it easier to access the chemicals needed to manufacture the drugs.

Mr. Olsen advised he would provide an example of the increase in known clandestine labs in southern Nevada, as realized by the Las Vegas Metropolitan Police Department, but did not include other jurisdictions in the area:

• In 1997 there were 133 clandestine labs;
• In 1998 there were 257 clandestine labs; and,
• Since January 1, 1999, there were 106 clandestine labs.

Those figures did not include labs that were not discovered. According to Mr. Olsen, the danger of the labs was that they were set up in rented houses, apartments, and hotel or motel rooms, where the substance was manufactured. When the lab was moved and the accommodations rented to new occupants, those persons ran the risk of absorbing the substance residue through the skin, which could be accomplished by walking barefoot across the floor.

Mr. Olson emphasized it was an extremely dangerous substance. The amount of chemicals seized from those labs could be as little as few boxes in the trunk of a vehicle, or it could be up to 50 drums. The Las Vegas Metropolitan Police Department would like to have the authority to sample those chemicals, and allow defense attorneys to sample them as well for court purposes, then legally destroy those highly volatile chemicals. Mr. Olsen informed the committee that some flash-fires at those labs had resulted in significant damage to property and lives.

Mr. Olsen advised the only reason he thought the bill was being considered by the Ways and Means Committee was because in Section 1, number 3, it stated, "The court shall not grant probation to a person convicted pursuant to this section." As a result of that language, there was a probability that additional persons would be sent to prison, although, he indicated many persons involved with the labs were already being sent to prison.

Vice Chair Evans noted there was no appropriation contained in the bill, and inquired if it was just a matter of the potential impact on the NDOP population. Mr. Olsen answered in the affirmative.

Mr. Hettrick stated in reading the bill, there were instances where it referred to manufacturing or compounding marijuana, and asked if that terminology was correct, as he did not think marijuana could be compounded and manufactured. Mr. Olsen replied he did not know if that was correct language or not. Vice Chair Evans suggested that might be something he should talk to staff about; she then asked if there were other persons who wanted to testify on A.B. 454. Captain Jim Nadeau, Washoe County Sheriff’s Office, stated he would echo statements made by Mr. Olsen, and add the support of Washoe County Sheriff’s Office for the bill.

With no further testimony to come before the committee, the hearing on AB. 454 was closed. The next item for committee consideration was S.B. 281.

Freeman Johnson, Assistant Director, Department of Conservation and Natural Resources, stated he would speak on behalf of the bill, along with Lucy Zeier, Administrative Services Officer for the department. Mr. Johnson provided some background and historical perspective about the bill, stating originally the request for supplemental appropriation was placed in the department’s budget request for FY 1999 – FY 2001. The Budget Office later called for a deficit reduction plan in response to projected shortfalls in state revenue, and part of the instructions were for the department to attempt to find a way to cover the supplemental appropriation within existing budget limitations.

Further, explained Mr. Johnson, since the department budget was a small account, with little or no latitude to make up a budget shortfall of that magnitude, a Bill Draft Request (BDR) was initiated by the Legislative Counsel Bureau (LCB), which resulted in S.B. 281. He advised he would go over the specific elements of the request for the committee.

Mr. Johnson stated there were three basic issues associated with the supplemental appropriation request. The first concerned an overlapping position to address an extended leave of absence for an Account Technician II, which would amount to approximately $15,000. The department had requested and received approval for an overlap position for the period of October 7 through February 7. That request was necessary to address an unsuspected long-term leave of absence for the employee, who had experienced "burn-out." That person’s position was responsible for the daily account maintenance for the Division of Water Resources, Water Planning, State Lands, Conservation Districts, and the Natural Heritage Program. According to Mr. Johnson, the department had attempted to distribute the responsibilities and duties formerly held by the position among existing staff, however, the duration became too long for other employees to continue to do both jobs, thereby creating stress for the other employees. Mr. Johnson explained the department had received permission to add an additional 5 percent compensation pay for persons working out-of-class, in an attempt to minimize the stress. That compensation expired February 7, 1999.

The second element of the request concerned three upgrade requests that were approved during FY 1999. Mr. Johnson explained those upgrades were unexpected and were not accounted for in the budget. The first was an Accounting Specialist, grade 27 position that was upgraded to Personnel Tech III; the upgrade was employee initiated. State Personnel did not concur with the initial request to upgrade to a Personnel Analyst I, grade 32, but did concur there were increased duties and responsibilities sufficient to warrant an upgrade and, accordingly, the position was upgraded and reclassified to Personnel Tech III. While the department did not initiate the request, Mr. Johnson commented, it did support it in view of the duties and responsibilities that were actually being handled by the employee.

Vice Chair Evans inquired if the appropriation was included in the budget as a supplemental. Electing to respond was Ms. Zeier, who explained the amount was originally included in the budget as a supplemental appropriation. Vice Chair Evans then noted the bill requested a $35,000 appropriation, and inquired if that amount was sufficient; Ms. Zeier confirmed the request was less than what it was in the original budget submittal. Mr. Johnson confirmed that the amount of $35,000 was accurate to date, and was less than the amount initially submitted by approximately $1,600.

Continuing, Mr. Johnson explained the second upgrade involved an Account Specialist I position being upgraded to Account Tech I, a new position provided by the 1997 legislature. The original documentation describing that position was admittedly prepared hurriedly, which became apparent when State Personnel reviewed the position and noted discrepancies between the existing position assignments compared to the proposed assignments. Once the department implemented the position, it appeared the position was far more complicated than had been initially envisioned. Mr. Johnson stated the department agreed to a lower classification until it could revise the job description; that description was delivered to State Personnel in June, and based upon the new information, the Personnel Department recommended the position be reclassified to Account Tech I.

The third reclassification was a Budget Analyst III position being reclassified to Administrative Services Officer III. Mr. Johnson advised that request was originally targeted for inclusion in the FY 1999-2001 budget request, however, given the fact that the employee was already performing the higher level duties, the department decided it was unfair to the employee to continue to perform those duties without the appropriate level of compensation. That position and its responsibilities were similar to other Administrative Services Officer positions elsewhere within the agency, notably within the Division of Environmental Protection and the Division of Wildlife. Mr. Johnson reported all of the upgraded positions directed and managed the agency accounts and internal controls, and the request merely reflected a consistent and fair classification for all incumbents in that particular class series within the agency.

Continuing his presentation, Mr. Johnson advised the third element of the supplemental request dealt with the rent for the office occupied by the assistant director. At the time the budget was being formulated, that position had been authorized, however, it was felt at that time there was not sufficient space in the quarters occupied by the department to accommodate a new office. Subsequently, a "domino effect" occurred; the Division of Environmental Protection and the Division of Water Resources both requested and received permission for expansion within their quarters located at 123 West Nye Lane. Mr. Johnson explained the only place for those agencies to expand was into space already occupied by the Nevada Division of Forestry. The department obtained off-site quarters for the Division of Forestry, which then provided room for the expansion approved for the Division of Environmental Protection and the Division of Water Resources. Ultimately, space was freed-up for an expansion of the director’s office, so there could be identified and secured office space for the assistant director. Mr. Johnson stated that "domino effect" created the space that was felt did not exist at the time and, because it did not exist, funds for rent were not approved in the budget.

Mr. Johnson advised the committee the department was requesting the entire supplemental appropriation be approved, which would help it avoid budgetary shortfall for FY 1999 within the director’s office. Vice Chair Evans stated that the committee clearly understood the difficulties faced by agencies when requested to comply with preliminary reversions. However, she stated, in terms of the various changes in positions, upgrades and reclassifications, et cetera, if every agency presented a "laundry list" of wants, the legislature would be in session for quite a while, and she did not feel it was a good practice in general.

With no further testimony to come before the committee, the hearing on S.B. 281 was closed. The next order of business was budget closings.

Mr. Stevens, Fiscal Analyst, Legislative Counsel Bureau (LCB), stated staff had no recommendation regarding the account, and noted there were several bills pending which would increase the number of district court judges. Staff would submit closure of the budget as the Governor recommended, and allocations for additional judges could be made a part of the bills, if approved.

*************

According to Mrs. Stevens, the base budget in the account would provide for benefits to all existing beneficiaries in the District Judges’ and Widows’ Pension Account. The M-200 decision unit was a 5-year average of the anticipated increased funding. Traditionally, the Assembly Ways and Means and Senate Finance Committees did not increase monies in the account unless there was a specific person contemplating retirement on a specific day. Mr. Stevens stated the courts reported there were no persons retiring during the next biennium, therefore, staff would recommend elimination of decision unit M-200. Appropriations could be transferred between fiscal years in that account, and Mr. Stevens stated if there was an additional benefit paid to a participant, money could be moved from the second year to the first year of the biennium; the 2001 legislature could then be approached for a supplemental appropriation.

*************

Mr. Stevens advised the explanation and recommendation for the Supreme Court account would be identical to that presented for the District Court account.

*************

According to Mr. Stevens, modifications and adjustments to revenues were based on revised estimates of reserves and revenues submitted by the Administrative Office of the Courts (AOC). The committee should note with the reduction in revenues, reserves in the account would climb to $500,000 before the end of the biennium.

*************

Staff recommended closing the budget as recommended by the Governor, advised Mr. Stevens.

*************

There were a few changes recommended in the account, and Mr. Stevens explained small adjustments were made in the operating and information services categories. The travel category was also corrected, as it was booked both in the base budget and unit M-200. Mr. Stevens stated it was recommended that the Judicial Ethics and Election Procedures Committee be transferred to the Judicial Discipline budget. Jim Rodriguez, Program Analyst, LCB, informed the committee there was a $5,000 adjustment to unit M-200 because the Commission on Judicial Discipline had requested additional investigator costs, and a $10,000 adjustment was made for legal costs. Mr. Marvel noted staff had recommended a letter of intent, and asked for clarification. Mr. Stevens stated that letter would require the commission to establish an accounting structure that would isolate the expenditures of the Judicial Discipline Commission and the Committee on Judicial Ethics and Elections Procedures.

*************

The Judicial Ethics Commission would be incorporated into the Commission on Judicial Discipline account, and Mr. Stevens stated staff had no recommendations.

*************

In module E-710, Mr. Stevens advised there had been adjustments to reflect current price quotes. He stated Mr. Burke had reviewed the request to purchase equipment, updated the prices from the vendor, and those changes were incorporated into the budget closing.

*************

Mr. Stevens indicated computer hardware expenditures in module E-710 were decreased by approximately $10,000 in the first year and $5,000 in the second year of the biennium. Hardware costs were also reduced to reflect current pricing; there were additional adjustments in E-710 for related data processing equipment.

*************

The only adjustment recommended by staff in the account involved eliminating overtime funding, as overtime was traditionally not budgeted in state accounts unless it was holiday overtime. Mr. Stevens also noted there was no budgeted vacancy savings requirement.

*************

There were three adjustments listed for the account, and Mr. Stevens advised the base budget was adjusted to reflect revised payment amortization schedules for two pieces of equipment, and depreciation costs were also adjusted for that equipment. Overtime funding was eliminated from the account, and reserves correspondingly increased. Mr. Stevens explained overtime was historically not budgeted unless it was holiday overtime.

Mr. Dini asked if savings had been generated per piece of mail in the Mail Services account. Brian Burke, Program Analyst, LCB, advised there was a savings in mail services to agencies. Because of encoding, the cost of mail services was 26 cents per piece of mail, and the agencies were charged an additional 15 percent of the mail cost, which totaled approximately 30 cents for each first class item, whereas they would pay 33 cents if mailed directly. Mr. Marvel asked if the delivery service had been improved, as apparently it had been a costly procedure. Mr. Burke stated he was unsure of the status of the delivery service, however, would investigate the matter for Mr. Marvel.

*************

Mr. Stevens noted minor modifications were recommended based on the depreciation schedules for related pieces of equipment.

*************

Mr. Stevens announced there were very minor adjustments to the account, $479 in the first year and $958 in the second year of the biennium. That adjustment was made in the base treated water revenue, which was increased to FY 1998 actual levels. Further, Mr. Stevens pointed out, there was discussion between the state and Carson City, as far as the city taking over the treatment plant, which might occur over the interim. The operation of the plant would basically remain the same.

Vice Chair Evans stated the Carson Water Treatment Plant was discussed in the Joint Subcommittee on Capital Improvements, and she wondered if the negotiations would effect the plant’s budget if the matter was not resolved until after the legislature was adjourned. Mr. Burke explained the account was discussed during the subcommittee meeting, not as a formal hearing, but rather in connection with the hearing regarding the Marlette Lake Water System. He advised he had spoken with Michael Meizel, Administrator, Buildings and Grounds Division, who indicated if the negotiation with Carson City was successful during the interim, the state would lease the water tank, and would attempt to maintain the state rate for water sales at 85 cents.

*************

According to Mr. Stevens, the committee had two options with the budget, whether to hire a contract person or whether to convert to a state employee position. In decision unit M-200, The Executive Budget recommended that $40,000 in contract services be authorized for computer assistance. During a previous committee hearing, there was discussion on whether it would be better to create a state employee position for computer assistance, which would cost more than $40,000, but the agency would realize more hours of service from an employee rather than a contract position. Mr. Stevens advised the agency would pay a higher hourly rate for a contract person.

The first option would convert the recommended $40,000 contract computer position to a state employee position. In addition, explained Mr. Stevens, there would be related costs needed for the position: $750 for out-of-state travel to one training conference each year; $2,831 for equipment; $3,799 for data processing related equipment; and, $346 for other related equipment. In out-of-state travel, the initial request had been for $1,800, in addition to the amount recommended in The Executive Budget, and $600 for training. Subsequently, Mr. Stevens stated, LCB received a Memorandum from Dale Erquiaga, Acting Director, requesting those amounts be increased to $3,750 in in-state travel, and $2,000 in training. He noted the real question was whether or not those amounts would include the additional computer position, or whether it was simply an augmentation in those categories. If the in-state travel category was approved at $3,750, the agency would realize $8,086, or a 135 percent increase in its budget in that category. In the training category, the requested increase was from $600 to $2,000.

Mr. Marvel inquired if there had been discussion with the Budget Office regarding the proposed change. Mr. Stevens noted the Budget Office was aware of the request, and would support conversion of the contract position to a state employee position, and also concurred with the increased training and in-state-travel request. The proposal would not have a direct effect on the General Fund, because the Micrographics account would pay for 20 percent of the position, which was a non-General Fund account, and the Arts account would pay 15 percent. Mr. Stevens explained by charging some of the dollars to non-General Fund accounts, it would actually slightly lower the direct General Fund appropriation recommended in The Executive Budget.

Chairman Arberry inquired if all committee members were comfortable with the information presented, and understood the requested change in the budget. Vice Chair Evans asked if the amended version showed a budget increase of 135 percent. Mr. Stevens explained the in-state category for conversion to a state employee position would be a 135 percent increase.

Mr. Beers then inquired if the difference in the General Fund was the result of charging part of the expenses to the Micrographics and Arts accounts. Mr. Stevens replied in the affirmative, noting the overall cost was higher, but because of charging 20 percent to Micrographics and 15 percent to the Arts budget, the General Fund appropriation would actually be slightly lower. Mr. Beers asked if, presumably, part of the contract position might also be charged to non-General Fund accounts as well. Mr. Stevens replied that was correct.

Mr. Marvel inquired if the full time state position would be of help to the Las Vegas Museum. Mr. Stevens replied it was an employee for computer support. The department had cited it would assist the Las Vegas office in a number of ways, however, the position would be stationed in Carson City. Further, explained Mr. Stevens, he felt Mr. Beers was correct, that a portion of the $40,000 for a contract position could be charged to non-General Fund accounts. A state employee position would generate more hours for the same amount of money as a contract position, which was what initiated the proposed option.

Mr. Beers stated he assumed a $40,000 computer technician employed by the state would handle the less technical requests from other employees for computer assistance, rather than the technical work such as linking two offices. As a contract, he felt there would be greater flexibility to deliver planned services directly to the point where they were needed.

Ms. Giunchigliani stated by way of clarification, the original motion by Mr. Marvel was in favor of the option of a state employee position with the indicated adjustments. Chairman Arberry then inquired if travel was included in that option. Mr. Stevens advised if the motion was to approve the state employee position, then the travel augmentation of $3,750 was included for each year of the biennium in the in-state travel category. There was also a $2,000 augmentation in each year of the biennium for training.

Mr. Dini stated it appeared Mr. Erquiaga was requesting a raise in in-state travel to $3,750; originally the request had been for 12 trips at an average cost of $150 each. Now, the department advised it could increase efficiency in facilities outside Carson City, and increased the request to 18 two-day trips at $208 each, which amounted to $3,750. Carson City had the advantage of technical support, and the increase would give the department management staff the necessary changes for planning. The department suggested the state position option would allow for increased support to the Nevada Historical Society for historical photo storage, and the State Historic Preservation Office for various Virginia City Projects, et cetera.

Mr. Beers stated he felt the travel would increase in the event a state employee position was created rather than a contract position. He added the training costs would only be necessary if it was a state position rather than a contractor, because typically a contractor would provide training to its employees.

Chairman Arberry suggested to committee members that the budget account for Museums, Library & Arts Administration be held for further review and consideration of the two options. Vice Chair Evans stated she would like verification that all of the travel allotment would be used for the anticipated state technician position; Mr. Stevens advised staff would provide such clarification.

*************

Mr. Stevens advised there was one item for committee review, and that was the base budget, which included a funding transfer from the Tourism Commission via room tax money of between $11,000 and $12,000 per year to support the Boulder City Railroad project. Decision unit M-200 would increase funding by $3,910 each year for the project, but that funding would come from the General Fund. Mr. Stevens Felt the committee might want to change the support in M-200 to a Tourism Commission transfer.

*************

Staff would make no recommendations regarding that account, advised Mr. Stevens.

*************

Mr. Stevens advised staff had no recommendations regarding the Archives and Records account, however, decision unit E-730 included a $35,000 project to move the water and gas mains behind the Library and Archives Building. At a previous hearing, the committee questioned whether that particular function should be under the control of the Public Works Board, which might cost slightly more, but would prevent problems in the future. If that was the wish of the committee, Mr. Stevens explained that decision unit would need to be extracted from the Archives and Records budget and moved to the Joint Subcommittee on Capital Improvements for further consideration and appropriate action.

Mr. Marvel asked Mr. Ghiggeri if the committee had discussed the same item during last session. Mr. Ghiggeri stated he did not recall such a discussion, however, advised the committee it would be more of a technical relocation, and it might be wise to have either the Buildings and Grounds Division or the State Public Works Board involved in the project. He felt the agency probably lacked the expertise to deal with such a project. Mr. Ghiggeri stated he also felt it would be somewhat more costly to involve the Public Works Board because of inspections. Mr. Marvel commented he felt moving the water and gas mains should be done right.

*************

Mr. Stevens noted the Micrographics and Imaging budget would potentially provide support for the computer position in the Museums, Library & Arts Administration budget, which was held by the committee for further clarification, and requested the Micrographics and Imaging budget also be held.

*************

Staff would make no recommendation regarding the Nevada State Library-Literacy account, announced Mr. Stevens.

Mr. Giunchigliani stated she thought the committee had given that budget account additional revenue last session, and inquired if the current budget included any budget cuts. Mr. Stevens advised in the Literacy account there was actually a small increase; actual expenditures were $164,500, and the work program overall was $200,491. Further, he indicated just over $210,000 was recommended in each year of the biennium.

*************

Mr. Stevens advised staff recommended no adjustments to the account.

************

Once again, Mr. Stevens advised the Arts budget would directly impact the Museum, Library & Arts Administration budget, computer support position, and requested the committee hold the budget.

*************

Mr. Stevens advised in the commission’s budget, the base had been adjusted to reflect Budget Adjustment number 91 from the Budget Office, which reduced the commission’s contribution to support the Governor’s Washington, D.C. Office. The Governor’s amended recommendation reduced the contribution to $20,000 in each year of the biennium, and recommended approximately $80,000 in savings be reallocated to supplement the commission’s advertising expenditure category.

Chairman Arberry stated the committee wished to hold the commission’s budget for further review.

*************

Mr. Stevens noted staff would recommend no adjustment to the Motion Pictures account.

*************

There was no staff recommendation regarding the Rural Community Development account, Mr. Stevens stated, however, noted unit E-805 would align the budget with some position upgrades authorized in the 1997 Unclassified Pay Bill.

*************

Per Mr. Stevens, staff made no recommendation regarding the budget.

*************

Mr. Stevens advised an adjustment had been made in the base budget to include a continuation of the commission’s contribution to the Historic Marker Program in the amount of $10,000 in each year of the biennium. Also, Budget Amendment number 91 from the Budget Office would reallocate the original Governor’s recommendation for the Washington, D.C. Office. The commission’s share would increase from $49,950 to $106,250 in the first year of the biennium. In decision unit E-300, there was an adjustment to reflect the start time for the Program Assistant II position to October 1, 1999. Continuing, Mr. Stevens explained in decision unit E-805, Budget Amendment number 88 to The Executive Budget would reclassify three Tourism Development Specialist positions.

Mr. Stevens explained there was a recommendation involving the reserve fund category and the amount of room tax collections projected by the Commission on Tourism in its budget. The commission projected room tax collections to increase by 3 percent in the current year, 3 percent in the first year of the biennium, and 4.5 percent in the second year of the biennium. Currently, room tax collections had been approximately 4 percent higher during the current fiscal year. The committee traditionally discussed the possibility of utilizing additional reserve funds from the Tourism budget for other projects, such as museums, arts, or conservation areas that have a tourism link. Mr. Stevens noted there was an extra $133,000 in reserve if the budget was allowed to maintain a $1 million reserve balance in each year of the biennium. If the room tax collection was assumed at 4 percent in FY 1999, the current level, and projected a 3 percent increase in the first year of the biennium and 4.5 increase in the second year of the biennium, that would produce an additional $256,000, or $400,000 over the biennium. That amount would potentially be available for use by some other agency.

Vice Chair Evans inquired what the plan was for the Governor’s Washington, D.C. Office. Mr. Stevens stated he could explain the funding plan. Vice Chair Evans then asked if there would be a Washington, D.C. Office, as the representative was no longer on staff, and would that position be filled, or operations ceased. Chairman Arberry intervened, suggesting the budget be held pending receipt of additional information.

Mr. Arberry announced the committee would hold the budget for further review.

*************

Mr. Stevens announced staff would recommend no adjustments to the Nevada Magazine budget.

*************

There being no further business to come before the committee, the hearing was adjourned at 12:40 p.m.

RESPECTFULLY SUBMITTED:

Carol Thomsen,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry, Jr., Chairman

DATE:

_____________________________________________

Assemblywoman Jan Evans, Vice Chair

DATE:_______________________________________