The Committee on Ways and Means was called to order at 3:40 p.m., on Thursday, April 22, 1999. Chairman Morse Arberry, Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Mrs. Jan Evans, Vice Chair

Mrs. Marcia de Braga

Mr. Joseph Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

COMMITTEE MEMBERS ABSENT:

Mr. Bob Beers (Excused)

Mrs. Barbara Cegavske (Excused)

Mrs. Vonne Chowning (Excused)

Mr. Lynn Hettrick (Excused)

Mr. Robert Price (Excused)

STAFF MEMBERS PRESENT:

Mark Stevens, Fiscal Analyst

Chairman Arberry called the meeting to order and announced the committee was changing the order of the bills to be heard.

Assemblywoman Genie Ohrenschall, Assembly District 12 testified the bill was heard in the Assembly Judiciary Committee on April 6, 1999. The measure was amended to reference Nevada Revised Statutes (NRS) 62.211 that concerned the powers and duties of juvenile courts.

The important parts of the measure included sections 2 and 3 of A.B. 511 that defined "parole officer" as the chief of the Youth Parole Bureau of the Division of Child and Family Services (DCFS), of the Department of Human Resources or his designee. The definition was included because the regular Division of Parole and Probation headed by Carlos Concha did not have jurisdiction over juvenile offenders.

Sections 5 and 9 of A.B. 511 were the core elements of the bill. In addition to provisions of state law, the bill added options for the courts concerning a child who was adjudicated as a delinquent for an act. If the same act was committed by an adult it would be a sexual offense. The options in section 5 of the bill included:

• If the child was committed to the custody of DCFS the court could place the child under the supervision of a juvenile parole officer as defined in the bill until the child was no longer attending a public or private school in Nevada; or
• If the child was not committed to the custody of DCFS, the court could place the child under the supervision of a probation officer.

Section 9 of the bill provided another option to the courts. If the child was committed to the DCFS a court could place the child under the supervision of a parole officer until the child reached 21 years of age or was no longer subject to community notification as a juvenile sex offender pursuant to state law.

A.B. 511 amended certain provisions added to law with the passage of Senate Bill (S.B.) 102 of the 1997 Legislative Session. S.B. 102 had certain requirements when a child was adjudicated for certain sexual offenses:

• The court order must place the child under the supervision of the county probation officer until the child no longer attended school in Nevada;
• The court could not terminate its jurisdiction during that period;
• The court must also prohibit the child from attending the same school as the victim except in certain circumstances;
• The court must inform the parents of both the victim and the perpetrator of their rights under the measure; and
• The supervising parole or probation officer must keep tabs of any school changes for the child.

S.B. 102 of the 1997 Legislative Session was requested by the Legislative Commission Subcommittee to study the treatment of mentally ill offenders in the criminal justice system. The bill was further amended by S.B. 395 of the 1997 Legislative Session. A.B. 511 was designed to close a loophole in the community notification statutes. Assemblywoman Ohrenschall said the change was to specify exactly what happened and who had responsibility to monitor juvenile offenders. The system, as defined by A.B. 511 would protect society against a possible juvenile predator.

As evidenced by the recent headlines from the Littleton, Colorado tragedy, there was a lot of pressure on young people and that pressure could sometimes turn to violence where the young preyed against other young people.

The same thing occurred to those who were mentally ill or had a predisposition toward sexual offenses. Assemblywoman Ohrenschall stated A.B. 511 was needed to close the loophole and urged the committee to support the measure.

Assemblywoman Giunchigliani asked if the reference to NRS 62.211 in the bill dealt with sex offenders. Assemblywoman Ohrenschall agreed. Assemblywoman Giunchigliani asked what specific statute segregated youth sex offenders from every other child in society. Assemblywoman Ohrenschall replied she thought the section Ms. Giunchigliani was referring to was
NRS 62.405.

Assemblywoman Giunchigliani asked if the intent of the bill was that the juvenile, once released, would then be under parole. Assemblywoman Ohrenschall replied there was a difference based on whether or not the child was committed to DCFS as a sex offender. She added the provision for the probation officer was already in statute. The provision for the parole officer if the child was committed was not.

Assemblywoman Giunchigliani asked if a child was committed to DCFS and then released they would have been supervised by a probation officer, not a parole officer. Mr. Bruce Kennedy, Chief, Nevada Youth Parole Bureau, replied it was his understanding that the law read, "the court shall appoint a probation officer to all sex offenders, whether they are committed to the state or not."

Mr. Kennedy stated the bill would take youth sex offenders when they were committed to the State of Nevada away from probation, which was a county function and placed responsibility with the state.

Assemblywoman Giunchigliani asked what the change would do. Mr. Kennedy replied it would increase the youth parole caseload size. Juvenile sex offenders would be committed to the care of the state. He gave an example of an
11 or 12-year old youth who would be on parole for 9 or 10 years under the legislation. He added they would have been on probation prior to the legislation for 9 or 10 years.

Assemblywoman Giunchigliani stated she was going to ask a seemingly obvious question. She asked for a clarification of the difference between "parole" and "probation." Mr. Kennedy responded "probation" was a county function that had responsibility of youth prior to commitment to a juvenile institution. "Parole" was the status of a youth after they were released from an institution

Assemblywoman Giunchigliani said when a youth who had been committed to the state was released, he would then be assigned to a parole officer and asked if that was correct. Mr. Kennedy replied the youth would be assigned to youth parole at the time of the commitment the way the law read. Assemblywoman Giunchigliani asked if there was need to have the youth monitored while they were under commitment to the state. Mr. Kennedy replied even when a youth was housed at the Nevada Youth Training Center or the Caliente Youth Center a parole officer was assigned to the case and Youth Parole provided liaison to the institution, the community, and the families while the youth was incarcerated. Assemblywoman Giunchigliani asked if such a youth could currently be in a public school other than the two youth correctional facilities. Mr. Kennedy replied it was possible. Mr. Kennedy stated the youth referred to in NRS 62.213 might never be sent to a youth correctional facility. They could be placed in treatment instead.

Assemblywoman Giunchigliani confirmed under current statutes such youth would at least have a probation officer assigned to them. She asked what communication under current statute occurred with the school, the school site, the principal or the teachers. Mr. Kennedy replied there were ongoing communications with the school, the parents, and with employers of youth who were committed to the state for correctional care and were placed on parole. Assemblywoman Giunchigliani confirmed that was the current process whether they were sex offenders or not. Assemblywoman Giunchigliani noted, as a teacher, she had taught students wearing ankle bracelets and on probation and had never had anyone discuss the situation with her. Mr. Kennedy replied it was a good chance her students were on probation, not parole.

Assemblywoman Evans asked Mr. Kennedy to describe the current practice and how that would change under A.B. 511. She asked what the palpable difference was between how youth were handled presently and how they would be handled under the effects of the measure. Mr. Kennedy replied currently if a juvenile was committed to the state for correctional care and placed on parole the Nevada Youth Parole Bureau provided the supervision for that youth for the duration of time he was on parole status. Under current statute the bureau could go back to the court if a juvenile sex offender had successfully completed treatment asking that parole’s jurisdiction be terminated and that the youth be placed on probation. Currently, there was an unwritten rule within probation that youth parole would notify the schools and law enforcement when a youth was under their jurisdiction rather than tell probation where the youth was and have probation make the notifications.

Assemblywoman Evans asked how A.B. 511 would improve the system, better protect society and serve the youth. Mr. Kennedy replied the bill made a better understanding of who was responsible to report to schools and local law enforcement when a youth was released or placed back in the community. Assemblywoman Evans asked if that was the only intent of the bill, why it had a fiscal note. Mr. Kennedy responded if Youth Parole had to have a youth on parole status for anywhere from 2 additional years up to 10 years it would increase the caseloads and staff would be needed to monitor the youth. A youth could not be on parole status between the ages of 18 and 21 who was only expected to call and provide a new address if he moved, without providing supervision. The bureau would be held heavily accountable if something ever went wrong.

Assemblywoman Evans asked if the Youth Parole Bureau workload went up, would it not follow that there would be an offset to probation’s’ workload.
Mr. Kennedy stated that was correct. Assemblywoman Evans referred back to the fiscal note and stated if Youth Parole needed a position for the additional workload that position could be taken out of probation’s staff. Mr. Kennedy responded that could possibly work, however, there were a lot of probation officers that were within different districts or county jurisdictions. Youth Parole officers were state employees whereas probation officers were county employees.

Assemblyman Marvel asked if families were charged for parole supervision.
Mr. Kennedy replied they were not. Assemblyman Marvel asked why not. Adult parolees were charged a fee. Mr. Kennedy replied there was a bill currently under consideration that was proposing such a charge. Currently, by statute Youth Parole did not have the ability to charge. Parents were charged when the youth was housed at the Nevada Youth Training Center, the Caliente Youth Center or when the youth was in placement. The charge was considered a payment for child support. If the youth was living at home and the bureau just provided the supervision the parents were not charged.

Assemblyman Marvel asked if the youth were placed in bracelets or ankle cuffs. Mr. Kennedy replied bracelets and cuffs were used as a sanction. Assemblyman Marvel asked if the youth were charged for the cuffs and bracelets. Mr. Kennedy replied the county provided them. Assemblyman Marvel stated adults had to pay and suggested the families should have to purchase the bracelets and cuffs for youth. Mr. Kennedy stated he did not have a good answer for that and Chairman Arberry replied that was the best answer.

Chairman Arberry noted the fiscal note requested one additional position of Parole Counselor and asked if the position was planned for the northern or southern Nevada. Mr. Kennedy replied if the bill passed he would have to review caseloads and determine where the position should be placed. He stated the position would probably be placed in southern Nevada.

Chairman Arberry asked if the fiscal note should include some funds for travel because the person would appear to travel throughout the state. Mr. Kennedy replied the fiscal note included some travel funding, but the bureau would probably handle the rural Nevada cases through methods currently used.

Assemblywoman Giunchigliani stated she was not quite sure what the bill would accomplish because the current process seemed to incur most of the cost at the county level and A.B. 511 would shift the responsibility to the state. She asked what triggered the rationale for the change. She asked if some youth were not being monitored. Assemblywoman Ohrenschall stated her understanding when working with the Megan’s law Committee was that it aided the state statute to monitor the child whether he moved in any part of the state and there was a concern about communication between different county probation officers. The statute for sexual offenders and sexual predators required monitoring until that person was 21 years of age, a different age bracket than when a youth finished school. The Megan’s law committee had requested the bill to be considered.

Seeing no further testimony for or against A.B. 511 Chairman Arberry closed the hearing on A.B. 511 with no action and opened the hearing on A.B. 368.

Assemblyman Wendell Williams, Assembly District 6 presented the bill.

Assemblyman Williams stated for the record that the bill was requested long before the start of the legislative session when a school board member in his area in Las Vegas and he had held a town hall meeting. Two members of the committee had also attended the meeting. The history indicated many of the schools in the Clark County School District that were in his district were built in the late 1940’s and early 1950’s. The schools had been through some renovation but currently the schools were in such deplorable condition that rehabilitation and repair was no longer appropriate to keep the schools open. Most of the schools were in such a condition that they should be torn down and rebuilt.

Assemblyman Williams provided committee members with a letter from
Ms. Shirley Barber, Clark County School Board member (Exhibit C). Her letter indicated to compound the problem of older schools in deplorable condition, the parents were required to choose where to send their children to school. They could choose to send students to schools far from home with better facilities and equipment or choose to keep them close to home in inadequate facilities.

Assemblyman Williams stated anyone who had spent time in Clark County should know that a large amount of new school construction was underway. The new schools being built in Clark County compared to the schools in his area and other parts of Clark County had conditions so bad that it was nearly criminal that the schools were not being torn down and rebuilt.

Assemblyman Williams stated a coalition had approached the Clark County School District with their desire and pleas on behalf their constituents collectively to have something done about the conditions of several particular schools. Several bonds had passed in Clark County and in some cases facelifts and minor repairs had been done on certain schools.

A few weeks previous a bi-partisan legislative contingent visited some of the schools and a consensus was built that certain schools could no longer be used for children to receive an education. The conditions were so bad the schools were unsafe. Those schools were a negative value to the community. If the schools were in some city or state experiencing a slow growth and new schools were not being built Assemblyman Williams said he could understand. However, in the face of new school construction in Clark County, it was totally unfair to have schools in such poor condition.

A.B. 368 proposed an audit to determine where construction money had gone, were it was being spent, or where it was being hidden. The legislature needed to provide oversight and follow up to previous legislation.

More recently there had been some debate brewing between the Las Vegas Convention Authority and the Clark County School District over five-eighths of one percent of the room tax. Assemblyman Williams stated he had no involvement with that particular argument. He expressed a desire that efforts on behalf of A.B. 368 not be confused with that particular situation.

Two particular issues were addressed in the bill. One was the adequacy of the funding plan for the Clark County School District’s capital funding program as outlined by the school district to the 1997 Legislature and to the taxpayers of Clark County when the district sought their support on a ballot measure relating to the funding of school capital needs.

The second issue related to the school district’s ability to discharge the $3.5 billion construction program in a timely manner. There had been talk that the revenues committed to the solution were perhaps as much as $1.2 billion more than the legislature was told was necessary to address the problem of school construction. That was far more than would be necessary to rebuild some of the older schools.

Assemblyman Williams stated he did not want to act irresponsibly nor was he suggesting that the committee do the same. He only suggested the legislature look at the program to determine if funding was sufficient to accomplish the goals as outlined when the plan was adopted. It was somewhat surprising that in such cases one side or the other challenged the numbers and said there were not enough funds to meet the goals. That was not the case in Clark County.

Even the most cautious people Assemblyman Williams had spoken with admitted that the proposed plan was over funded and the only real question was how much over funding had occurred. The legislators had an undeniable responsibility to youth and the community to provide them with the best educational opportunities possible.

With A.B. 353 of the 1997 Legislature, significant progress was made in addressing the responsibility on the facility side of the equation. There still needed to be more progress made on the quality of education. While legislators recognized and embraced responsibilities to provide safe and functional school facilities, they must also remember their responsibility to the taxpayers of the state.

Some people said, "Any amount of money could be justified as long it was for our kids." Any expense regardless of the amount or level of efficiency was justified. That overly dramatized and emotionally-hyped rhetoric coming from the "No price is too high as long as it is for the kids," group simply failed to accept or respect the obligation to the taxpayers. Assemblyman Williams stated in his particular situation, that also meant a responsibility to his constituents. Simply put, the state should meet the responsibility to provide the best education possible for our youth and it should do so in the most cost efficient manner possible. In large part, that was why the bill authorized an audit as suggested in an amendment he would discuss later.

The youth to which the state owed a responsibility for education today were tomorrow’s taxpayers. What was done for the youth today would require payment by the same youth in the future as taxpayers. The tax lesson of the school funding plan should not be that it become the tax noose for every child educated in the Clark County School District for the rest of their lives. Assemblyman Williams stated he had no reason to doubt whether the
$3.5 billion was enough to address the total problem, and current administrators admitted $3.5 billion was sufficient, but they could find ways to spend more.

There had never been a project of the same magnitude proposed in the state. It was the legislator’s responsibility to take whatever precautions were necessary to ensure that the issues of A.B. 353 of the 1997 Legislature were done right the first time.

Assemblyman Williams stated he, for one, was extremely grateful that the issue had been raised because it gave the legislature an opportunity to do something about it. The interests of the children would not be compromised, that was for certain. But the interests of the taxpayers should not be compromised either. The only way to ensure responsibility was to evaluate the outcome. The Clark County School District’s track record for delivering on a promise could only be judged upon its results to date. Based on Exhibit C that track record was not very good, particularly in the West Las Vegas area. The school district had not been able to accomplish the goals of the 1996 bond question. Nearly one-half billion dollars remained unspent at the present time. And approximately $1 million in bonds remained to be sold. It recently came to Mr. Williams’s attention that the district was attempting to issue bonds against the revenues contemplated by A.B. 353 of the 1997 Legislature. The district was proposing to sell the taxpayer funded debt and to begin to pay interest on the bonds, even though the funding need was not anticipated until perhaps 2001.

Assemblyman Williams stated he was encouraged and disturbed at the same time. He was encouraged by the fact that the district was attempting to expedite the new construction part of the building program. But the district had certainly suffered from a less than stellar reputation as to how well it had performed with the previous and current building programs. Hopefully the new program would be more successful than past efforts. He was deeply disturbed that a large part of the district’s motivation in issuing the bonds had to do with pledging certain revenues so that no one, including the legislature could do anything about it. Once revenues were pledged to bonds it was nearly impossible to remove or alter the revenues.

In other words, even if an audit of the building program confirmed there were excess expenditures and other problems, the legislature would be precluded from fixing the problems. Once the audit was complete, and depending on its findings, the legislature could move forward with more confidence. Individually any of the questions raised about a program of that magnitude should cause the legislature to audit the results of the program. When multiple questions were raised in unison, the legislature would be negligent in their duties if they ignored the issues.

Assemblyman Williams offered an amendment to A.B. 368 (Exhibit D). The amendment would at least allow the legislature to review funding issues to ensure the district was using the funds in the most expedient and responsible way. Assemblyman Williams indicated that the children he represented should not have to continue trying to obtain an education under conditions that were so deplorable, while children in other neighborhoods had new schools. It was unfair.

Assemblyman Marvel asked the purpose of section 2 of the bill. How did the University and Community College System (UCCSN) fit into the remainder of the bill. Assemblyman Williams stated he had not testified to that portion of the bill yet.

Assemblyman Williams stated the legislature had conducted an audit of the (UCCSN) in 1995 and he had reviewed the results and recommendations. His understanding was that the Board of Regents received the 10 recommendations, ignored 3 or 4 of the recommendations, partially accepted a couple, and accepted maybe 1 or 2 of the recommendations. He hoped section 2 would not require another audit but would cause respect for and response to the recommendations of the 1995 audit.

Assemblyman Marvel asked if there was an amendment to section 2 of the bill. Assemblyman Williams replied he did not have a written amendment for that section. Assemblyman Marvel stated he read section 2 to require another audit of the university system. Assemblyman Williams stated he could submit a change to section 2 that would have the recommendations of the legislative auditor from the previous audit be adhered to.

Assemblyman Williams’s proposed amendment in Exhibit D was for section 1 of A.B. 368. He explained in talking to the legislative auditor and some of the staff, they had indicated it was time-consuming and costly to perform another audit of the university system and they felt that if the recommendations from the first audit were adhered to or responded to that would be sufficient. Assemblyman Williams stated an audit did need to be conducted on the Clark County School District because of the amount of money allocated from taxpayer dollars and there was a huge disparity with how the funds were spent in certain communities. The proposed amendment would address that.

Assemblywoman Giunchigliani stated she understood part of the issue and she agreed the legislature had not done much if anything to rebuild older schools. It seemed the legislature continued to throw good money after bad in areas of modernization and rehabilitation. Sometimes disintegration of schools was not tied to age of the facility, but because maintenance dollars were cut back so badly that facilities weren’t kept up. She agreed there was an inherent disparity and discrimination not only within Clark County, but also in many of the urban areas of the state. In some cases kids did not have access to quality water, bathrooms, lighting, computer facilities, let alone any modernization.

Assemblywoman Giunchigliani asked if part of the intent based on an audit was to help the district locate additional revenue for the rebuilding rather than continuing to remodel and rehabilitate existing schools. Assemblyman Williams replied there were only so many patches that could be placed on an inner tube and those days were gone. The school district had been approached many times about the conditions of those schools and had stated there was no money for repair. He found it very interesting, as well as suspect, that once conversations between the school district and the Las Vegas Convention Authority, which he had nothing to do with, came about, the school district was saying publicly they needed money to rebuild those schools. He found it ironic that the issue came to bear once someone else was trying to come into the school district’s territory.

One suggestion had even been made to take funding for one of the older schools as a demonstration model, tracking how much it cost to rebuild it, how cost effective it was to rebuild, and see if they could start putting money back into the older facilities. He agreed the problem existed in many areas of the state. He noted it was unfair that there were first-class and high-priced schools for some kids while others were going to schools in conditions that resembled third-world countries. Unless the state intervened and provided assistance to local communities the kids would continue to suffer.

Assemblywoman Giunchigliani stated she appreciated Mr. Williams comments on the five-eighths of one percent room tax issue because that had been the battle initiated on her legislation from the previous session by the Las Vegas Convention Authority and she had not appreciated it. She indicated that there were rumors that there might be an attempt to amend A.B. 368 in the end game to cap the five-eighths of one percent room tax. She hoped anyone present representing the Las Vegas Convention Authority would understand that that issue was decided during the 1997 Legislature.

Assemblyman Williams reiterated his point at the beginning of testimony that the bill was proposed solely to address the issue of the conditions of schools in some of the older areas of Clark County. The fight between the convention authority and the school district was not a part of the legislation. The problem of disintegrating schools was important and he would not want the two issues confused.

Chairman Arberry asked if it was Assemblyman Williams’s intent that the $40,000 funding in the fiscal note be given to an outside auditor selected through a request for proposal, a school auditor, or the legislative auditors. Assemblyman Williams replied he would be agreeable to either an outside auditor or the legislative auditor. He would definitely not want the audit done by a school district auditor.

Chairman Arberry noted testimony indicated the bill was not brought to be in any way part of the fight between the Clark County School District and the Las Vegas Convention Authority. He asked what would happen if A.B. 368 failed, the Clark County School District had made a verbal commitment to find some funding for the older schools, and once the legislature adjourned sine die and the school district went back on their verbal commitment. Assemblyman Williams replied that was why he had proposed the legislation. Over the years the people had been promised so many things in their communities in reference to the schools, and either the promises had fallen on deaf ears or partial commitments were made and as time passed the commitments disappeared. People tended to develop selective amnesia.

Assemblyman Williams testified that was why he would be comfortable with an outside auditor or legislative auditor because if funding proved to be short, the community had been wronged and treated unfairly with whatever funding the community had been given. A tremendous amount of new building was being done in Clark County but some communities had been left out.

Assemblyman Goldwater stated A.B. 353 of the 1997 Legislature included an oversight committee. He asked if Mr. Williams felt the oversight committee had not done its job or had the oversight committee not had the opportunity to do its job. Assemblyman Williams replied he recalled the oversight committee members themselves being quoted as saying they did not have enough "teeth" in their particular structure to do what needed to be done. The legislation was timely and appropriate and he felt the oversight committee should continue. But whatever was done the children and the families he represented were still falling through the cracks when it came to the attention of building projects in the Clark County School District. Assemblyman Goldwater agreed.

Assemblyman Goldwater referred to the proposed amendment and noted the audits being requested were actually performance audits. The original bond issues were delineated, as he remembered as a 60/40 split between new construction and refurbishing of old schools. School board minutes seemed to indicate the school district was not even living up to that original commitment with the new property tax rate freeze. He asked if the audit proposed in
A.B. 368 would look at that issue as well. Assemblyman Williams replied the audit should look at those particular items as well as cost, design, materials, and any abuses in particular spending programs. Anything that went outside A.B. 353 of the 1997 Legislature should be reviewed. The bill was not talking about some small town in Iowa, Wyoming or Louisiana; it was talking about the eighth largest school district in the nation. That school district had a lot of money and clearly showed a disparity in its practices.

Assemblywoman Giunchigliani asked Assemblyman Williams to explain section 3 of his proposed amendment. Assemblyman Williams replied the amendment added a population floor clause to target the Clark County School District. The five-eighths of one percent room tax was a part of the overall scheme of things. He would like to know if that particular statute was being addressed as well.

Assemblywoman Giunchigliani stated her question centered on the fact the effective date had been changed to a later date and asked if that was to allow an audit to be conducted. Assemblyman Williams stated that was correct and was why he had specified that no more bonds should be sold until the audit was complete. Assemblywoman Giunchigliani stated she would like bill drafting to ensure the date change did not affect any revenue collections.

Assemblywoman Giunchigliani stated she recognized Assemblyman Williams’s frustration regarding the fact that commitments were not obtained for rebuilding. She hoped the legislature proceeded with caution because of the infighting that had started. It was a matter of whose numbers one believed. She had heard some of the same criticisms from members of the oversight committee. The district was saying they did not have money available for re-construction and there really was funding available. She felt the school district was beginning to understand that rebuilding was on everyone’s minds and that a plan needed to come forward to show their case.

Assemblyman Williams stated when people were dealing with numbers such as the Ways and Means Committee dealt with daily he appreciated the process. He felt he had made his intent clear in his testimony. He was open to other approaches as the committee deemed appropriate that reached the same goal.

Assemblywoman Giunchigliani noted the established oversight committee might be one possibility for performance of the audit. The message should be received very clearly by not only Clark County, but others. When the legislature debated establishment of a statewide capital fund for school construction, they should not always focus only on rehabilitation, but some buildings such as the ones in Lincoln County that had been condemned, or the ones in White Pine County that did not exist needed to be built. Rehabilitation or modernization was not always the answer because that did not take care of structural problems. Assemblyman Williams commented what compounded the problem was when people saw new construction where others had the opportunity to attend class in new structures, while their children continued to attend school in the same old school and conditions that had existed for many decades.

Assemblywoman Giunchigliani commented the majority of "at risk" schools happened to be the same old schools under discussion and those kids deserved just as much opportunity for a good learning environment as any other. Those things made all the difference in school pride, upkeep, discipline, respect for one another, and school violence. The schools were not just a facility for some children but also their "safe haven."

Assemblywoman Evans stated the committee could applaud Assemblyman Williams’s objectives in dealing with the decaying facilities. She referred to the proposed amendment (Exhibit D) section 1 that specified the legislative auditor. The Clark County School District was a mega-enterprise and she asked if the legislative auditor had indicated the scope of such an audit and whether additional funds would be needed. It was important but it was also a large undertaking. She asked if the lack of an appropriation in section 1 was a suggestion from the legislative auditor that this office could absorb the cost of the undertaking. Assemblyman Williams stated he had not spoken to the legislative auditor, specifically about that question. However, he would be willing to use one school such as Booker School, formerly attended by Chairman Arberry, and make it a demonstration project, tracking all costs. He had asked Clark County for a breakdown on the cost of building some of the new schools and that information had never been provided. When he spoke with the auditor they had primarily discussed the university system. He offered to consider any approach that the committee suggested.

Assemblyman Williams stated there was not sufficient time to cover the portion of A.B. 368 dealing with the university system and emphasized his passion was the old schools in Clark County that were in such deplorable condition.

Carole Vilardo, Nevada Taxpayers’ Association testified she was aware an amendment had been offered and wished to generically support an audit of the school district facilities. In combination with prior bond issues and the last rollover issue the money generated was among the largest in the state of Nevada. It was not inconceivable that at the end of 10 years the Clark County School District would have to go back to the voters for more funding and an audit would perform two services. The district could use the audit if they were meeting their stated objectives when they went before the voters. An audit would also help instill a modicum of faith with taxpayers because there were some issues with previous bond issues where the facilities were not exactly built to the capacity that was identified. Ultimately the audit would become a "win-win situation."

Ms. Vilardo stated she had heard part of the testimony concerning the proposed amendment. Obviously, there was a monetary concern but conceptually the Taxpayers’ Association would support any audit that helped protect taxpayer’s money and showed the taxpayer that they were getting what they paid for.

Larry Spitler, representing Clark County School District testified he was not sure what happened in the proposed amendment, as he had not seen a copy. He testified in support of the audit proposed by A.B. 368.

Mr. Spitler stated the Clark County School District had reached resolution with the Las Vegas Visitor’s and Convention Authority and the money would reside with school construction. The district had been talking about school construction for many years and it really wasn’t until 1997 that something was done about it through A.B. 353 of the 1997 Legislature. Everyone should be extremely proud of that piece of legislation. The voter portion of the question that raised 70 percent of the funding for a 10-year building program beginning in the year 2000 had passed by a 65 percent margin. School construction was on the minds of the people in southern Nevada.

Room tax generated approximately 20 percent of the formula in terms of funding construction, renovation, and modernization. The real estate transfer tax funded another 10 percent of the funding mechanism. Schools in general had never really looked at reconstruction and it was time that was done.

Mr. Spitler stated the legislature certainly had the attention of the Clark County School District through letters and participation at school board meetings. There were board members who cared desperately about the quality of schools children attended. He stated the committee would see the board looking at the issue very comprehensively.

Mr. Spitler stated the oversight panel was in place and their first function had been to evaluate the funding mechanism authorized to determine if it would build schools as needed through the year 2008. The oversight committee had backed up the funding mechanism. The school district could not access any of the money from the property tax revenue without going through the oversight committee. The oversight committee had to be presented with the full bonding request, what it built, renovated, and modernized. It literally gave another opportunity for public input in terms of those proposals.

Mr. Spitler stated he would be happy to look at the amendment but they were in full support of the original A.B. 368. He stated there would not be a fiscal note in terms of the audit because the Clark County School District would be paying for the audit as specified in the A.B. 368.

Assemblywoman Giunchigliani stated she appreciated the district’s position and did not believe it to be antagonistic. The bonds did not preclude rebuilding because the authorization included the term "construction." That was a question in peoples’ mind at one point in time. Perhaps the oversight committee functions could be tweaked somewhat to serve as a review board to some extent also.

Chairman Arberry asked Legislative Auditor, Gary Crews to discuss the audit in terms of whether the funding was sufficient, how long it would take, if
A.B. 368 passed both houses and was signed by the Governor. Gary Crews stated the funding provided for in the first reprint of A.B. 368 was $40,000 that he had proposed and would cover only the follow up audit on the University and Community College System. He stated the Audit Division had not contemplated being involved in the Clark County issue when the fiscal note was drafted.

Mr. Crews stated it was his understanding that local governments and school districts were required to have an annual audit conducted by an outside accounting firm. He did not know if the audit contemplated in the bill would be a part of that annual audit.

Mr. Crews stated if the amendment as he read it placed the proposed audit under the purview of the Audit Division there would be a considerable fiscal note that had not yet been addressed. The way the amendment was written, some contracting services might be needed as well.

Chairman Arberry asked what type of time frame could be expected if the bill passed. Mr. Crews stated he would rather see language similar to what was in the first reprint that made audit completion due prior to the next legislative session. The amendment would place quite a demand on staff.

Chairman Arberry noted the original bill had a fiscal note of $120,000 that had been reduced to $40,000. Mr. Crews stated the original bill called for another complete audit of the UCCSN, which would have cost approximately $120,000. Upon further discussion, it was decided perhaps just a follow up audit could be done and that had reduced the fiscal note to $40,000.

Assemblyman Marvel asked whether the state or the school district would pay for the audit of the school district. Mr. Crews replied there was no provision in the bill to determine who would pay. Generally, the school districts paid for their own annual audits. Assemblyman Marvel commented the Legislative Counsel Bureau Audit Division would not be funded in the bill to perform the audit and Mr. Crews agreed.

Assemblyman Marvel asked if Mr. Crews agreed that the University System had not followed up with the recommendations of their last legislative audit.
Mr. Crews replied they were not exactly certain what the status was. Initially, when the audit report was issued, the UCCSN had rejected 3 of 10 recommendations and partially accepted others. Subsequent to that they went back to the Legislative Commission and somewhat reversed their stance and indicated they would accept and implement 9 of the 10 recommendations.

Assemblyman Marvel confirmed the Audit Division felt $40,000 would be needed for a follow up audit. Mr. Crews stated one problem identified in the audit had been that there were really seven institutions that were functioning independently and time would need to be spent at each institution to determine if the audit recommendations were being implemented.

Chairman Arberry asked how long that would take. Mr. Crews replied that was what the $40,000 was contemplated to do. The bill would give the Audit Division until the next legislative session to get the follow up done and by doing so would allow them to work it into their schedule.

Assemblywoman Evans asked what was the normal cycle through agencies and the necessary follow up in legislative audits. She stated her understanding that when an audit was performed a 6-month follow up was also performed.
Mr. Crews replied there was a process in place that after an audit report was issued the agency had 60 days to present a definitive implementation plan and then the Department of Administration was supposed to perform an evaluation of the status of implementation of audit recommendations at 6 months, which was then reported back to the Audit Subcommittee. The entire process took approximately 9 months.

Assemblywoman Evans asked how frequently the division was able to perform a complete cycle of audits. Mr. Crews replied the division did somewhat of a risk assessment of agencies and they were probably talking about 6 years between audits. Assemblywoman Evans noted the UCCSN audit was just conducted in 1995 and there must have been some reason to consider expediting that cycle in their case. Mr. Crews replied the Audit Division did not generally get into the UCCSN to perform audits. The 1995 audit was a special audit requested by Speaker Dini because of some problems the system was experiencing, particularly at the University of Nevada, Las Vegas. The Audit Division typically did not perform audits on the UCCSN nor local governments. The University System was not a part of the agency audit schedule because the system had an annual contract audit.

Assemblywoman Evans asked why it was felt there was a need to perform a follow up audit. Mr. Crews stated he was not sure of the entire reason but Assemblyman Williams’ testimony before the Committee on Education had been that his concern was the lack of implementation of the audit recommendations.

Richard Jarvis, Chancellor, University and Community College System testified against section 2 of A.B. 368. He stated, as Mr. Crews had pointed out, the system’s initial response had contained very partial reactions to three of the recommendations and full acceptance of only four recommendations. That partial acceptance would legitimately lead to a set of concerns. However, by the time of the 6-month review by the Department of Administration the system had changed their position and had a plan to be in compliance with 9 of the 10 recommendations.

The tenth recommendation the UCCSN had declined to follow was one that called for a single centralized controller in the UCCSN and the system was set up under a decentralized system of seven institutions. The Board of Regents had approved a set of recommendations to bring the system into full compliance with 9 of the 10 recommendations. All of those requirements except one had been completed. The last one, an automated control system would be in place in June 1999. The only reason for delay was an upgrade of the computer system. The university system believed it was fully on track with the audit.

As a result the system reported they had followed up on the audit and it was not strictly necessary or timely to put everyone through the work to do it again. If it would be of value to the committee, he offered to take a request to the Board of Regents to ask for the internal audit staff to complete a formal audit of the recommendations, deliver it to the Board of Regents, and have it delivered to the committee.

Jim Richardson, Nevada Faculty Alliance Association Chapters testified he too had some reservations about section 2 of the bill. He was not completely sure why it was included in the bill, which otherwise had been a bill with considerable support.

If the committee chose to leave section 2 in the bill, the reference should be made clear that the intent was simply a review of the audit recommendations because section 2, subsection 1 said, "The legislative auditors shall conduct a performance audit of the University and Community College System." Section 2 stated the bill would include such a review but the language left it open to interpretation. Mr. Richardson stated he was sure Mr. Crews had plenty to do without being asked to undertake another audit. He suggested language to require some type of professional report would perhaps address the issue.

Mr. Richardson commented on the hesitation the system seemed to show about the recommendations of the audit. The real issue was that of centralization from the current decentralized system and preservation of institutional autonomy. The Faculty Alliance had always taken the position of institutional autonomy, recognizing each of the institutions were vastly different. There was considerable discussion within UCCSN over the issue. Mr. Richardson noted he had recommended to the Chancellor not to accept those recommendations. It had been the Chancellor and Board of Regents’ decision to accept 9 of the
10 audit recommendations.

Mr. Richardson closed his remarks with a plea to the committee that if section 2 of A.B. 368 was left in the bill, it should be clarified as requiring something between a report and a full performance audit.

Seeing no further testimony Chairman Arberry closed the hearing on A.B. 368 with no action and opened the hearing on A.B. 608.

Andy Anderson representing the Nevada Conference of Police and Sheriffs (COPS) testified the bill was an attempt to do some cleanup on the definition of police officer. Nevada Revised Statutes (NRS) 617.135 dealt with occupational diseases including Heart and Lung provisions. There had been problems in the past from the original formation of the NRS chapter for police officers. Since that time different organizations, cities, counties and states had created little peace officer organizations and unless they were specifically named in the statute they were being denied certain claims under the Heart and Lung provisions.

Mr. Anderson gave an example in the Metropolitan Police Department where their correction officers were included in the statute. However, in the City of Las Vegas those correction officers who performed the same duties as the ones for Las Vegas Metropolitan Police Department were not included in statute and were denied Heart and Lung claims. A.B. 608 was an attempt to include all peace officers. Many organizations had requested to be added to the bill including the school police in Clark County. When the original bill was enacted, the school police had not existed.

Mr. Anderson acknowledged the bill seemed to add numerous different categories of officers who would receive coverage with passage. The sponsors had tried to find a commonality for each different group or title. The logic was that if an officer went through the Peace Officer Standards and Training (POST) certification, then the officer would be covered under the statute for Heart and Lung provisions.

Assemblywoman Giunchigliani stated she had a feeling that the original Heart and Lung legislation was not intended to include everyone who had been a peace officer. She thought the original intent of legislation had been to allow Heart and Lung claims for police and fire officers because of the stress related job they were in and therefore absolutely deserved the coverage. Not all individuals who went through the POST Academy were in as stress-related job as the "cop and firefighter out on the street on a regular basis on their job." She stated she appreciated the efforts made in trying to narrow the focus but stated she felt A.B. 608 broadened those intended for coverage considerably. She requested Mr. Anderson to restate what groups he wished to cover through the bill. Mr. Anderson replied initially the association wanted to categorize all police officers and define them under one statute and then refer all police officer definitions from NRS 617 and NRS 289 back to one statute. He understood it seemed like a lot of people were being added through the bill and that the original intent had been an issue of stress. He explained through an example of school police; when the original bill was enacted school police were nothing more than security guards. Since that time they had increased their jurisdiction, authority, and what they physically did until they were basically a full-fledged police department. The school police arrested felons and did all the other things other departments might do, although with a limited jurisdiction. Yet, because they were not listed in the original legislation they were not covered under the Heart and Lung provisions.

Mr. Anderson stated the sponsors had tried to find some similarities such as with a Parole and Probation officer in the Division of Parole and Probation that was already included but differed greatly from those at the Nevada Youth Training Center. City park rangers were covered because they were city-commissioned officers and yet the state rangers were not included.

Assemblywoman Giunchigliani stated she appreciated what the sponsors were trying to do but asked if they had looked at the opposite side; those who were currently covered under Heart and Lung that perhaps should no longer be covered. Mr. Anderson replied they had not. She commented she had not been comfortable with expanding the powers of school police to issuing tickets and other duties and she had not known they could arrest felons. Mr. Anderson replied if there was a felony crime in a school such as burglary, carrying a weapon, or narcotics the school police made the arrest just as any other officer might.

Mr. Anderson stated one of the concerns of the sponsors was they had not wanted to see different organizations like cities, counties or the state develop police agencies with a lower benefit level. As an example, the Metropolitan Police Department had established a position of Public Safety Officer and the people in those positions would have all the authority of a police officer but because of the title, they would not be included under early retirement, workmen’s compensation and those sort of benefits. The sponsors of A.B. 608 had tried to pick an isolation standard and that standard was POST certification.

Chairman Arberry noted the fiscal note on the bill was a conservative estimate that would cost the state from $500,000 to $1 million per year and asked someone to address the fiscal note. Susan Dunt with the state Risk Management Office stated she ran the worker’s compensation program for state employees. She had prepared the fiscal impact statement as the best estimate of what could be the expected increase in worker’s compensation costs if the bill was passed as it was presented.

The Risk Management office’s experience had been that disabling heart claims were very costly to the state. The average cost was about $400,000 per claim. Under the current rating plan the state had with the Employer’s Insurance Company of Nevada (EICN) a stop-loss had been set at $250,000 per claim, which if the bill were to pass EICN might not renew in the future.

Ms. Dunt noted A.B. 608 in combination with some of the other pending legislation could have a significant cumulative affect on the worker’s compensation fund. If they were all passed as presented, Risk Management would have to go back to the budget cycle and look at the reserves established in Budget Account 1329. If all the bills were made effective in July 1999, Risk Management could anticipate the addition of two to four more heart claims per year.

Chairman Arberry asked if the fiscal note was figured on the amended version of the bill. Ms. Dunt responded it was based on the most current version of the bill.

Ms. Dunt stated Risk Management expected there would be between 200 to 250 additional state employees who would be included in Heart and Lung benefits. It would be helpful in looking at the law, to clarify the legislative intent because currently, when state employees who had a heart attack or some other type of condition, fell in some of the other categories they would file a claim and considerable litigation always resulted based on who was defined as a peace officer.

One current claim that went through the appeals process and was pending at the Supreme Court level was an employee who requested to be added to the list of peace officers under Heart and Lung provisions for whom the state had been ordered to provide benefits. Clarification of inclusions or limitations would be helpful in such situations or whether claims could be looked at on an individual basis.

Leonard Ormsby, General Counsel, EICN testified EICN was neither for or against A.B. 608. They did wish to provide some clarification on the bill. The bill stated that there was no impact to EICN and that seemed inconceivable. The bill would not change benefits so that a rate change would not be necessary. The bill would expand the list of people to whom those benefits would be offered. With A.B. 552 of the 1995 Legislature the Insurance Commissioner had appointed the National Council on Compensation Insurance (NCCI) to set rates that would go into effect on July 1, 1999.

Mr. Ormsby stated he had contacted the Insurance Commissioner and NCCI regarding whether the bill would have an effect on the rate setting scheduled on July 1, 1999. He noted the committee was focusing on whether the list should be expanded but he had no opinion of whether the rates for police and fire would go up as a result.

Jim Spinello representing Clark County apologized to the sponsor that section 19, page 2 of the bill was an issue they thought had been clear but it was not. Clark County requested to go on the record as opposing section 19 of the bill. The reason was that the officers employed by the Board of County Commissioners pursuant to NRS 244.167 would be included in the security personnel at the county building as well as the park police. The fact that the title of the positions was "park police" did not indicate that they in fact made arrests or had the kind of day to day occupation that would provide for the conclusive presumption built into the basis of why Heart and Lung provisions were instituted.

Mr. Spinello stated the issues raised by Assemblywoman Giunchigliani in terms of the list of eligible positions and how it had grown over time was valid. To look at who should remain on the list as well as who should be added had the support of Clark County. Everyone who carried a weapon must have gone through POST training, but not everyone who went through POST training in fact ended up in an occupation that was peace officer in nature.

Seeing no further testimony Chairman Arberry closed the hearing on A.B. 608 with no action and opened the hearing on S.B. 507.

Robert Loux, Executive Director, Agency for Nuclear Projects had requested the bill. The history of the bill was that the state had run out of funding from the Federal Government and had approached the Interim Finance Committee (IFC) for several installments of funding to carry the operation of the office forward. The current funding ended on May 31, 1999 and the bill would fund the agency for the remainder of the fiscal year.

Mr. Loux stated there was one amendment needed to S.B. 507 that would change the funding request from $17,687 to $16,187. The remaining $1,500 could be provided by the state in another manner.

Assemblyman Marvel asked whether the funding would be recaptured if further federal funding was received. Mr. Loux replied the prior appropriations through IFC carried a requirement for recapture attached to them. The bill did not carry that provision. Mr. Loux replied he would not oppose such a requirement.

Assemblyman Marvel asked if the bill should be amended. Mr. Loux replied he did not know what the likelihood of receiving further federal funding was at the present time. If more federal funding was received it would definitely not be until October 1999 if at all.

Don Hataway, Budget Division stated his office would be happy to work with he committee either way. He noted the bill addressed only the month of
May 1999 and he was not sure when additional funds would come, if they came at all. He suggested a letter of intent would probably suffice to cover the situation. Chairman Arberry agreed.

Mr. Hataway referred to a question from the budget hearing held earlier in the day. He informed committee members he had checked his notes and spoken with Bob Loux. There was no inclusion in The Executive Budget for the Legislative Committee and his notes indicated, and Mr. Loux had verified, that because the position was being funded with General Fund money, it would be better to include funding to the legislature directly for the position. In the past it was funded through federal funds and then transferred to the legislature to fund one position in the LCB Research Division..

Seeing no further testimony Chairman Arberry closed the hearing on S.B. 507 with no action and opened the hearing on S.B. 517.

Pete English, Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV) introduced Eric Scheetz, Fiscal Analyst, Registration Division.

Mr. English testified that the bill was a request by DMV for a supplemental appropriation of $321,570 for FY 1998. The request was made due to a revenue shortfall that occurred during that fiscal year from unrealized revenues of the parking ticket program.

Chairman Arberry asked Mr. English to explain the term "parking ticket program." Mr. English stated the program was a measure that was heard during the 1995 Legislature and also the 1997 Legislature. A bill was passed to enable the courts to collect on unpaid parking fines. The program as passed, required DMV to place a stop on registrations for vehicles upon which parking tickets had been issued but not paid. During the 1997 Legislative Session considerable testimony was offered from various entities that substantial revenues would be generated as a result of the program. Because of that, $370,000 was built into the DMV budget each year of the biennium as a result of the program and that revenue was not realized.

Chairman Arberry asked how such a large amount of funding was overspent. Mr. English replied the program was not overspent. The revenues were anticipated from the parking ticket program and based upon that anticipation an amount of funding was removed from the Registration Division budget in the amount anticipated from the parking ticket program.

Chairman Arberry stated in other words, "the bottom line was like the legislators whose pay was cut off on April 1, but they kept spending hoping more money would come from somewhere. So the division spent the money hoping it would come from somewhere else and it didn’t materialize."
Mr. English replied that was essentially correct. He explained the parking ticket program was not actually implemented until February 1998 due to program changes that had to be made by the Information Services Bureau and the creation of regulations. Once the program was implemented, a substantial number of citations were received from the counties that were input into the DMV system. There was a large cost associated with establishment of the database. The shortfall was not recognized until May 1998. Chairman Arberry commented it was nearly May 1999.

Don Hataway, Budget Office, clarified the Budget Office did not find out about the shortfall until the latter stages of FY 1998 and the figures were actually expenditures related to that fiscal year. By that point, "the horse was already out of the barn." The Budget Office had begun working with the agency because the same situation existed in FY 1999. However, an expenditure plan was developed that reduced the levels of expenditure so there was no problem in FY 1999. S.B. 517 addressed the FY 1998 shortfall only.

Chairman Arberry asked what would happen if the bill was not passed.
Eric Scheetz replied if the bills were not paid then the Purchasing Division and some other state agencies that were kind enough to help out the division would not be reimbursed and ultimately, some of the personnel costs that amounted to approximately half the funding request would also have to be paid back. Chairman Arberry asked if that meant an employee would have to be laid off. Mr. Scheetz replied he did not believe so.

Mr. Hataway stated he did not have a specific answer to the issue. He did not know what the impact would be. Chairman Arberry stated he understood the Budget Office and the division had gotten the situation under control, but asked how the committee could be assured it would not happen again. Mr. Hataway stated the budget for the next biennium was constructed to take the situation into consideration.

Seeing no further testimony Chairman Arberry closed the hearing on S.B. 517 with no action and the meeting was adjourned at 5:20 p.m.

RESPECTFULLY SUBMITTED:

Cindy Clampitt,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

DATE: