The Committee on Ways and Means was called to order at 7:50 a.m., on Monday, May 3, 1999. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Ms. Jan Evans, Vice Chair

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph E. Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

Mr. Bob Price

COMMITTEE MEMBERS ABSENT:

None

STAFF MEMBERS PRESENT:

The Chair recognized Assemblywoman Sheila Leslie, District #27, Reno.
Ms. Leslie told committee members A.B. 178 was a bill she had requested to respond to a long-identified problem in northern Nevada in terms of providing mental health care to children and youth. She said the waiting list at Children’s Behavioral Services was very long, at most times between 200 to 300 children. A.B. 178 would open up funding of mental health services to Medicaid-eligible clients by allowing licensed clinical social workers (LCSWs) and licensed marriage and family therapists to provide mental health care to clients who would otherwise remain on the waiting list.

Ms. Leslie said Nevada’s plan only allowed licensed psychologists to provide mental health care to children and youth in the private sector through Medicaid although many other states had chosen the option of allowing other professionals to provide those services.

Ms. Leslie said A.B. 178 was not about protecting the turf of the psychologists, the clinical social workers, or the marriage and family therapists, it was about providing children with appropriate mental health care. She reported that while the initial fiscal note associated with the bill was huge, it had been reduced according to her 30 percent solution that included 30 percent of the
330 children on the waiting list who were Medicaid-eligible. If the bill were approved, she said, children could be referred to the private sector, i.e., licensed clinical social workers (LCSWs) and licensed marriage and family therapists.

She explained in southern Nevada, children were served through managed-care providers that included both LCSWs and licensed marriage and family therapists. Northern Nevada, however, did not provide those services unless the LCSW or licensed marriage and family therapist worked for the state. She advised LCSWs and licensed marriage and family therapists typically worked for a lower hourly fee.

Referring committee members back to the fiscal note issue Ms. Leslie explained that by restricting the program to children under 19 years of age, who were not required to enroll in a Medicaid-managed care, the total cost of the program was approximately $255,000 over the biennium. She reminded committee members those children were already Medicaid eligible and would have been categorized as needing psychological services.

The Chair recognized Vice Chair Evans who asked if the legislation required a change of any kind in the state’s Medicaid waiver. While she was not sure if it affected the waiver, Ms. Leslie was aware a change in the state plan would be required. Ms. Leslie had been told there was a box that could be checked on the documentation to indicate Nevada would like to exercise its option to open up mental health care to LCSWs and licensed marriage and family therapists.

The Chair again recognized Vice Chair Evans who recalled Ms. Leslie had participated in the interim discussions of the Juvenile Justice Study Committee. That committee had criticized the long waiting periods for juveniles to receive mental health treatment. During those discussions, it came to the attention of committee members that many other states were not restricted to treatment by psychologists. The question then arose why Nevada had those restrictions. It made no sense to have those restrictions in view of the tremendous need.
Vice Chair Evans said the Juvenile Justice Study Committee considered the issue very important.

The Chair recognized Alicia Smally, President, Nevada Chapter of the National Association of Social Workers. Ms. Smally said the chapter represented
650 members in Nevada and over 155,000 members nationally. Of the association members in Nevada, approximately 500 were licensed clinical social workers (LCSWs), many of whom worked for the state. She told committee members the association was the largest provider of mental health services nationally. She commended committee members for taking the bill seriously.

The Chair recognized Stuart Gordon, LCSW, at the non-profit organization of Family Counseling Service in Reno. Mr. Gordon represented a division of Family Counseling Service called Parents United that worked with survivors of sexual abuse. Approximately 50 percent of the organization’s clients were children, the majority of whom were on Medicaid. Those children sat on a six-month waiting list for individual counseling through Children’s Behavioral Services. He relayed a story to committee members of a recent group therapy session in which the children were discussing the fact they had all been in Children’s Cottage, a foster placement, at a cost of approximately $20 per day. Most of those children had gone into foster care at a cost of approximately $12 per day. The following day he was in a group session with teens that had either been in Willow Springs or West Hills Hospital at a cost of $1,000 per day to Medicaid. He explained the cost of waiting six months to one year was from $50 to
$60 per week in treatment to $1,000 per day in treatment. It was an extremely expensive process to keep children on a waiting list. Mr. Gordon thought it was feared there would be a large number of therapists jumping on the rolls to counsel the children. He felt non-profit organizations such as Family Counseling Service would continue to see the majority of the children due to the time frame for other providers to become Medicaid-eligible. He hoped that lengthy process would dispel the fear and at the same time, more children would be placed in care at a lesser rate than that associated with residential treatment.

The Chair recognized Dale Gray, a licensed marriage and family therapist, who appeared before committee members on behalf of herself and the Nevada Association of Marriage and Family Therapists. Ms. Gray told committee members the State Board of Marriage and Family Therapist Examiners also supported the bill. She said she worked for 3½ years as a family therapist with the DCFS Family Preservation Services Program working primarily with Medicaid recipients. She currently worked at West Hills Psychiatric Hospital with children and adolescents and felt the issue of those children being able to receive earlier care at an outpatient level was very important. Ms. Gray had conducted an informal poll at the hospital and it was the consensus among the doctors, treatment providers, and the utilization review staff that there was a limited availability of providers at the outpatient level. The concern was that some of the children and adolescents on the waiting list would decompensate to a higher level of need that might include social services intervention, juvenile probation involvement, etc. Ms. Gray urged the committee members’ support to increase the number of providers at the outpatient level as a preventative measure.

The Chair recognized May Shelton, Director, Washoe County Department of Social Services, the entity responsible for child protection in Washoe County.
Ms. Shelton explained many families had serious problems and the department was often ordered by the court to provide psychological evaluations. Those evaluations often led to both individual and group treatment. Because there had been such a long waiting list for its clients in the past, the department was forced to enter into private contracts. She told committee members the department’s budget for 1999 was approximately $185,000 in county monies paid out for those services. Even with those contracts, the county was lacking in bi-lingual professionals who could deal with children and families. It was the department’s hope that if services expanded to LCSWs and marriage and family therapists more resources would become available for bi-lingual professionals. The department urged committee members’ support of the bill.

The Chair recognized Mr. Marvel who asked the amount of the hourly contract fee. Ms. Shelton said there was one bi-lingual LCSW the department contracted with at a rate of $60 or $70 per hour. That particular LCSW conducted home visits. The department’s contract for family counseling charged $125 for an intake evaluation and $60 for 12 sessions. Mr. Marvel asked how long a session lasted and Ms. Shelton said approximately one hour. Mr. Marvel asked how many children the department reached through contracts and Ms. Shelton said year-to-date the department had served 217 children. Mr. Marvel asked about the department’s waiting list and Ms. Shelton said there was no waiting list. Mr. Marvel asked if the program was successful and Ms. Shelton said that it was, even though she could not attribute its success to any one strategy. She told committee members the department was seeing 16 percent lower numbers in investigations and 16 percent fewer placements of children year-to-date. The department attributed that success to the way it did business by providing more services up-front and by providing family assessments rather than incident-driven investigations. She said the family-to-family, baby-your-baby, and childcare programs were all beginning to yield fruit and she could not say enough about prevention to keep children from penetrating the system. Once a child entered the system, there was the chance they could enter the juvenile system, and eventually the prison system, all at a tremendous cost. Ms. Shelton encouraged committee members to appropriate sufficient funding for the bill.

The Chair recognized Ms. Evans who asked Janice Wright, Deputy Administrator, Department of Human Resources, Division of Health Care Financing and Policy, what would be required of the state’s plan in order to make the legislation work. Ms. Wright told committee members the issue in the bill was whether Medicaid should directly reimburse marriage and family therapists and LCSWs. Currently, the HMO’s were directly reimbursed for the services in southern Nevada that were provided by licensed marriage and family therapists and LCSWs. She said the bill would require a modification. In discussions with Assemblywoman Leslie on the language for the amendment of the bill, Ms. Wright had discovered the Federal Government would require language that stated services would be provided to persons who were eligible for the EPSDT services. She provided the following verbatim testimony regarding the language change:

Ms. Wright explained that language would allow the Federal Government to pay their matching share. The reason for the amendment to the fiscal note, she said, was because the earlier bill did not restrict the program to the 99 children currently anticipated to be on the waiting list who were Medicaid-eligible. The entire waiting list was approximately 330 children and the calculation of those services was approximately $1.4 million and $1.5 million, respectively, in each year of the biennium. She explained the amendment in the language to restrict the program to the 99 children who were Medicaid-eligible would reduce the fiscal note to $259,000 in the first year of the biennium and $264,000 in the second year of the biennium. The General Fund portion would be $127,000 in the first year of the biennium and $128,000 in the second year of the biennium. The therapists in those 99 cases would be directly reimbursed for their services.

Vice Chair Evans then asked the comparison of outpatient versus inpatient treatment. Ms. Wright said the expert testimony committee members had received earlier was more accurate than any information she could provide in view of the fact her agency only reimbursed the HMOs and had no way of knowing the contents of the provider reimbursement agreements. She said the bill would provide a fee-for-service arrangement and direct reimbursement to the individual therapists who provided those services. Currently, psychologists were reimbursed at approximately 86 percent of physician costs. She pointed out the bill contained no rate language and the fiscal note had been calculated at approximately 75 percent of physician costs. Vice Chair Evans stated that only southern Nevada could provide such a service through an HMO and the balance of the state was fee-for-service and Ms. Wright said that was correct. Vice Chair Evans said the bill would provide the needed services to Nevada’s children at a lesser price. Ms. Wright advised committee members the bill represented an expansion of Medicaid program that was not built into
The Executive Budget.

The Chair recognized Mr. Marvel who asked if the fiscal note represented new money and Ms. Wright said that it did because the 99 clients were not currently being paid for or receiving services. The language in the bill would expand the provider community that could then receive direct reimbursement from Medicaid. She advised the fiscal impact dollars would provide an average of 4.5 services per child per month. Mr. Marvel asked if Medicaid dollars were available for a match and Ms. Wright said it was anticipated there would be federal dollars available if the amended language were included in the bill.
Mr. Marvel asked if there was a guarantee the federal dollars would always be available and Ms. Wright said with the amended language there was a guarantee as long as the state came up with its match.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 178 closed.

The Chair recognized Assemblyman David Humke, District # 26, Washoe County. Mr. Humke told committee members A.B. 216 was a bill that contained an appropriation to create an endowment that would be funded, in part, by the National Geographic Society (NGS). He said the size of the appropriation was negotiable. Mr. Humke introduced Dr. Gary Hausladen, Chair of the Geography Department at the University of Nevada Reno (UNR).
Dr. Hausladen was the Father of the Geographic Alliance in Nevada (GAIN) and was prepared to explain the endowment.

Dr. Hausladen told committee members GAIN was the K-12 university program that was sponsored by the National Geographic Society. In the program, university professors worked with K-12 teachers to improve the quality of geographic education. He said there were alliances in every state in the union, two in California, one in Washington, D.C., one in Canada, and one in Puerto Rico. There had been many successes over the years, but he said the highlight was that the Nevada program was a model for professional development throughout the State of Nevada and was, in fact, included as a model in the professional development bill currently before the legislature.

Dr. Hausladen said funding for the program for the last two and current biennium came from the legislature through the Department of Education. He told committee members the university now had a window of opportunity. The NGS had put up $4 million to match endowments in individual states that raised $500,000. The state’s $500,000 would then be matched by NGS to establish an endowment that would be controlled by National Geographic Society Education Foundation. Dr. Hausladen explained the foundation was associated with NGS and was responsible for maintenance of the annual funding. He said six states had already established endowments and there were only two left. The plan was for Nevada to raise $500,000 that would then be matched by NGS.

Dr. Hausladen explained all monies and interest from the endowment would come to the State of Nevada. The foundation managed the endowment free-of-charge. In the first year, 5.5 percent of $1 million, or $55,000, would become the university’s budget, while the balance would return to the endowment. The foundation would match up to $100,000 per year in interest. It was anticipated it would be 8-years before the interest would reach the $100,000 level. In other words, he said, the foundation would match NGS money and geographic education in Nevada would be funded in perpetuity.

The Chair recognized Vice Chair Evans who agreed the program was important and asked if the $500,000 match was a requirement or if NGS would match at a lower level. Dr. Hausladen explained as soon as the level reached $250,000 NGS would start the match. NGS had discovered the initial gift in several states was $250,000 to $300,000 and it took approximately one year for those states to raise the balance of the $500,000. Vice Chair Evans asked if there was a window of opportunity regarding the NGS offer and Dr. Hausladen said until the money was gone. He explained NGS had an education program and the foundation, the corpus of which was about to exceed $100 million. The foundation funded the alliances. He clarified the match for the endowment would come from NGS, not the foundation. While the program was relatively successful, it was thought once the remaining two state programs were funded, it would end. He said it was an unusual mix of states that had been able to raise the $500,000 to enter the program and he assured committee members there were numerous other states, to include Nevada, that were working to become the last two states to participate in the program.

The Chair recognized Anita Brooks, a teacher at Carson High School (CHS) who appeared in support of A.B. 216. Ms. Brooks told committee members she had a degree in Social Studies and Business Education and was currently pursuing her masters in geography with an emphasis in technology education at UNR.

Ms. Brooks shared her employment history with committee members and told them she was trained as a teacher consultant by GAIN in 1993. Six years ago she had decided to go into teaching. Prior to that time she had been a computer consultant. She explained standards were becoming a very important part of today’s education and teachers were being required to teach to a standard at which they were able to prove what they were teaching was what students needed to know. The alliance had been very active in the development of national geography standards. Ms. Brooks had been on the technology end of writing performance standards.

She told committee members the alliance had empowered her to try new and innovative teaching strategies. The student population at CHS totaled 2,425 and she explained it was difficult to teach in a classroom of 30 students without teacher aids. Ms. Brooks was originally hired by CHS in 1994 to start its computer department and was teaching computer aided drafting, advanced computer applications, 3-D design, and had recently introduced geographic information systems as a component in her computer curriculum. She also taught anti-networking and hardware repair. When she began, she had
(24) 486#25s on the floor in boxes and computer literacy was offered in the senior year. Computer literacy had since been transferred to freshman year backed with health. CHS had three pentium labs and a check-out lab for teachers to bring in an entire classroom of students at one time. In short, CHS had a comprehensive computer program with various technologies to include internet and webpage design and C++ programming. It was her opinion that without the alliance, CHS would not be experiencing its current level of success.

Ms. Brooks told committee members a critical issue for the next school year would be the 50 students who had signed up for geographic information systems, a combination of geography and technology.

Ms. Brooks said the training she had received from the alliance had taught her to teach other teachers and that was the beauty of the system. She commented who better to teach a teacher than another teacher. She had been able to develop relationships and a magnificent support system with other teachers throughout Nevada who were trying wonderful innovative strategies that could then be shared.

Two weeks earlier Ms. Brooks had been preparing teachers to attend the new alliance institute in the summer of 1999. Those teachers, from throughout Nevada, would receive two weeks of intensive training at UNR on how to teach good geography in a way that students would want to learn.

Ms. Brooks relayed a recent situation to committee members where she had walked down the hall at CHS and looked into the classroom of a teacher who taught a freshman computer class. The teacher had loaded maps onto her computer screens by using a combination of ENCARTA and Virtual Globe software and shared a project she was working on. The students had to choose from a list of nine fictional clients from around the world. After they chose a client, they had to sell that client’s product. The students had to take a trip to the client’s location and find out everything they could about the area they chose by using physical and cultural geography. The end product was an eight-minute power point presentation to their peers and others. The students then had to develop a professional travel brochure in Microsoft Publisher for their clients.

Ms. Brooks told committee members there was a beautiful marriage between geographic education, technology, an incredibly supportive administration, and teachers teaching teachers. She advised she would be team-teaching a class with a U.S. history teacher from the geographical perspective and, in conjunction, would be teaching a geographic information systems technology class. Geographic education would be integrated into social studies, history, and technology.

The Chair recognized Mr. Goldwater who referred committee members back to earlier testimony by Dr. Hausladen and asked who would manage the endowment. Dr. Hausladen responded the National Geographic Society Education Foundation. Mr. Goldwater asked if the foundation followed good fiduciary responsibility and Dr. Hausladen said it was first rate.

The Chair recognized Mrs. Chowning who, having the privilege of serving on the Academic Standards Council, thanked those individuals who stepped up to the plate and were an essential part in the development of standards for geography. She explained for the first time in Nevada there would be end-of-the-year goals that had to be met regarding geography education.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 216 closed.

The Chair recognized Joan Taylor, a fifth-grade classroom teacher in Reno on leave to the State Department of Education to work on writing assessment. She was also Co-Director of the Northern Nevada Writing Project. Ms. Taylor explained the Northern Nevada and Southern Nevada Writing Projects were members of a national network that had 172 sites nationwide. The writing projects were the first to develop the teachers-teaching-teachers model that began in 1979 and had been in Nevada since 1982. The writing projects’ model was that classroom teachers were the leaders. The writing projects worked in partnership with the University System and had co-directors who were university professors. There were over 600 teachers in Nevada who were writing project teacher consultants.

Ms. Taylor told committee members there was currently nonpartisan federal legislation that provided $7.5 million in federal funding that was being appropriated to individual sites through annual grants. The writing projects were hoping to tap into some of those dollars. At the time class size reduction was instituted, the writing projects had conducted a teacher research project the result of which was a book that had been picked up by the second-largest national educational publishing house in the nation. That book was currently available to all teachers in the nation based on Nevada’s experience. The writing projects had written their own textbook for teaching writing when none existed and that textbook was provided free to Nevada’s counties.

Ms. Taylor said in the last four years the writing projects had made a concerted effort to reach rural Nevada that included partnering up with the University System to offer a distance-education class. The writing projects then wrote a grant to the National Writing Project for $30,000 and the project funded an institute in Elko during the summer of 1998. She said there was enough funding left for one more institute during the summer of 1999 and then the writing projects would apply to the National Writing Project to make Great Basin College the newest site in the national writing project network. Current projects included the networking of teachers in Nevada, specifically those located in at-risk or inadequate schools, and to help all teachers with national board certification. She said teachers throughout the nation were working on their national board certification and, in some states, the only teachers passing the board were writing project teachers. The criteria were very much writing-oriented to include teachers observations on classroom practices and publishing those results.

The Chair recognized Rosemary Holmes-Gull, the Southern Nevada Writing Project Director. Ms. Holmes-Gull was a classroom teacher from Las Vegas who commented on the need for increased funding in southern Nevada to develop the writing project for its teachers. She said the project was working diligently with the new teachers in the Clark County School District who needed their support and assistance. She reiterated the fact the writing projects were the grass-roots organization of the teachers-teaching-teachers model.

Ms. Holmes-Gull said the writing project was concerned about the year-round schools in Las Vegas and had developed a second institute designed specifically for year-round teachers. The original model had been a 5-week summer institute that year-round teachers could not attend so the writing projects had instituted a weekend program.

Ms. Holmes-Gull told committee members the writing projects were very excited about their progress and goals that had been set. The writing projects would like to do more but had not had the opportunity due to the lack of funding. She said her co-director position was a part-time position in addition to her full-time teaching position and both she and Ms. Taylor were very dedicated to sustaining the work of the project.

Both Ms. Holmes-Gull and Ms. Taylor were products of the institute and were aware of its effectiveness. They knew the institute was a career-changing experience they wanted to be able to share the power of writing with other teachers and have those teachers, in turn, share that power with their students.

Ms. Holmes-Gull respectfully requested committee members to favorably consider the writing projects’ request for additional funding.

Ms. Taylor directed committee members to Exhibit C entitled "Key Figures to Support Additional Funding for Nevada Writing Projects." Page C-8 of Exhibit C presented the cost-effectiveness of the writing projects as developed by Inverness Research Associates, an independent auditing firm. The Northern Nevada Writing Project cost $1.39 per contact hour.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 352 closed.

The Chair recognized Mark Stevens, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau. Mr. Stevens explained unresolved issues with this budget account included the following:

• The Executive Budget recommended funding for six legislatively approved physical therapist slots; four in-state and two out-of-state for the Health Care Access Program (HCAP). Funding for the six physical therapist slots totaled $41,600 in the first year of the biennium and $86,400 in the second year of the biennium.

Mr. Stevens advised the one of the issues committee members had to deal with were whether or not to continue the physical therapist slots. Past precedent had indicated the funding would be removed. The new HCAP program, however, would perhaps warrant continued funding of those slots.

Mr. Stevens told committee members there were four alternatives available to them as follows:

• To approve the Governor’s recommendation;

• To eliminate the physical therapist slots and urge UNLV to closely monitor the demand for physical therapists to determine if the current physical therapy program needed to be expanded. Mr. Stevens noted the current program provided for 21 physical therapist slots at UNLV in each year of the biennium;

• Due to the fact the UNLV Physical Therapy program would not be accredited until December 2000, reduce the number of physical therapist slots from
  8 to 4 out-of-state slots for the first year of the biennium and then eliminate funding in the second year of the biennium; or

• Based on the approval of the new HCAP program that required students to return and provide services to the underserved areas of Nevada, approve the additional slots.

The Chair recognized Mr. Marvel who felt the physical therapy program at UNLV was an excellent program and kept many individuals from being hospitalized.

The Chair recognized Vice Chair Evans who felt one good aspect of the HCAP program was those students had to return and provide services to an underserved area in Nevada for two years. The Chair stated that when the law school had been funded it was with the understanding no additional out-of-state slots would be funded and the existing out-of-state slots would be phased-out. He asked if committee members approved the agency’s recommendation, what would prevent other programs in the University System from asking for out-of-state positions to be funded. The Chair said some people felt Nevada’s schools were not up-to-par and being a graduate of a Nevada school held no status. He felt the agency’s recommendation would provide students another mechanism to opt to attend another school with a higher profile in physical therapy. He advised committee members he could not support the agency’s recommendation.

Ms. Evans expressed her concern with The Chair’s comparison using the law school because there was no shortage of lawyers, however, there was a shortage of physical therapists. She said physical therapy was a healthcare issue and shortages of healthcare professionals in Nevada had been well-identified. She felt the HCAP program was a way to address a shortage of professional people in a field that affected Nevadan’s.

The Chair recognized Mr. Dini who expressed his feeling that the physical therapist program was a different proposition than the law school. He felt the proposed dental school was also unique and rural Nevada was in great need of dentists. While the existing program sent six students out-of-state, the need was for approximately 50 physical therapists. Mr. Dini felt the program was temporary while the physical therapy program at UNLV was being fully accredited. It was important to keep six to eight out-of-state slots open while the program transitioned to accreditation.

The Chair recognized Mr. Stevens who told committee members this budget account recommended the funding of two out-of-state slots and four in-state physical therapist slots. He clarified the program, as recommended, would support the cost of in-state slots in return for those positions serving in underserved areas. While the program may be warranted, Mr. Stevens wanted committee members to know it would be a departure from what had occurred in the past.

The Chair recognized Mr. Dini who asked if that funding was already in
The Executive Budget and Mr. Stevens said that it was. Mr. Dini verified that included four in-state slots and two out-of-state slots and Mr. Stevens said that was correct. Mr. Dini asked if the funding would continue for those students already enrolled in programs out-of-state and Mr. Stevens said that it would.
Mr. Dini asked if the agency director felt the proposed program provided an appropriate transition.

Addressing Mr. Stevens, the Chair asked if the system would be phased-out in a like manner as the law school and Mr. Stevens said he could not speak to what was intended in the future. His belief was the new HCAP program would see any number of requests for any number of related healthcare fields and whether the out-of-state slots would be phased-out at some point in the future could not be determined. Mr. Stevens clarified funding would begin for in-state slots in the physical therapist program and nothing would prevent the agency or legislature from asking or receiving funding for that or other programs in the future.

The Chair asked if the legislature would be defeating the purpose of the physical therapy school at UNLV if a phase-out period were not instituted. Mr. Stevens said one of the questions was whether or not the legislature wanted to fund
out-of-state slots if there was an in-state school. Secondly, would the legislature want to fund slots within the in-state program and have them operate under the new HCAP program. Based on its answers, the legislature would provide appropriate funding.

The Chair recognized Mrs. de Braga who asked if option 3 mentioned above, would phase-out the out-of-state positions. Mr. Stevens explained option
3 would reduce the number of physical therapist slots from eight to four out-of-state slots in the first year of the biennium and eliminate those slots in the second year of the biennium.

The Chair recognized Don Hataway, Deputy Budget Administrator, Budget Division, Department of Administration. Mr. Hataway explained in the purest traditional W.I.C.H.E. program, if a state program came into existence, the W.I.C.H.E. slots went away. That had been a standard historical clause. However, he said, the HCAP issue added a new dimension to the W.I.C.H.E. program. HCAP tried to guarantee service to underserved areas in Nevada, both rural and urban. To say this program would be phased out was premature because the effectiveness of the new HCAP program was still under investigation. He said there was no guarantee the students graduating from the existing 21 physical therapist slots at UNLV would even stay in Nevada, let alone go to underserved areas. The budget office felt the HCAP program, although different from the traditional W.I.C.H.E. program, was an expansion and direction of talent into those underserved areas. It was not possible to say that physical therapy would be the only program recommended for HCAP. If HCAP proved to be successful, it was possible other programs would come before the legislature for consideration on a biennial basis. The budget office felt HCAP was worth an examination and evaluation over a period of time.

The Chair recognized Mr. Marvel who recalled the Chair, himself, and Mr. Dini sat on the audit committee together. That committee had determined that there were many areas in Nevada that were professionally underserved. He felt HCAP was a step in the right direction to correct that deficiency. Mr. Marvel agreed with Mr. Hataway that HCAP deserved examination and evaluation on a biennial basis.

The Chair wanted a commitment from the agency that the underserved district he represented, although in a metropolitan area, would receive benefit from the program. Mr. Marvel said that benefit would be one of the conditions of the payback by students. Mr. Hataway added northeast Reno, west Las Vegas and rural Nevada would all fit the definition of "underserved."

The Chair recognized Mr. Stevens who explained this budget account provided for the positions and administrative costs of the W.I.C.H.E. program. He said staff recommended a reduction in out-of-state travel of $487 in the first year of the biennium and $1,873 in the second year of the biennium.

Mr. Stevens told committee members the major issues with this budget account were the 96 percent increase in out-of-state travel in the first year of the biennium and a 136 percent increase in the second year of the biennium.
The Executive Budget requested $3,720 in out-of-state travel in the first year of the biennium, and $4,481 in the second year of the biennium. The adjustments to $487 in the first year of the biennium and $1,873 in the second year of the biennium would cover four out-of-state meetings in each year of the biennium, to include the WICHE semi-annual meeting to be held in Hawaii in FY 1999-2000. All annual and semi-annual WICHE meetings were funded in each year of the biennium.

The Chair recognized Mr. Stevens who covered the following issues regarding this budget account:

• The Governor had recommended the position of the Chief of the Audit Division be eliminated due to it being vacant for an extended period of time. As committee members recalled, that vacancy resulted in the Chief of the Electronic Services Division position being eliminated. Ultimately, GCB would not have the Chief of the Electronic Services position funded in the upcoming biennium.

• The credential payment plan had been initiated by the 1995 legislature to compensate employees of GCB who were CPAs, licensed attorneys, or individuals who had a higher education degree in engineering or electrical engineering, up to $5,000 annually. Traditionally, the appropriations for the program had been in the unclassified pay bill because language could be included to indicate how those funds could be utilized by GCB.

• Mr. Stevens said the third issue was regarding the networking of GCB offices. The agency had indicated the networking project was a priority for the upcoming biennium. Also of importance was the development of an imaging system to store and retrieve documents currently on microfilm. GCB planned to finance the project by using forfeiture funds for the one-time cost involved with the networking. The ongoing costs associated with phone lines, Internet access, and scanning documents into computer readable form could not be financed by forfeiture funds. The ongoing costs were not included in The Executive Budget and, if approved by committee members, would increase General Fund support by $43,983 in each year of the biennium.

• At the GCB budget hearing on March 15, 1999, the joint committee had requested information on the funding available for members of the Nevada Gaming Commission to travel to out-of-state seminars and meetings. The Chairman of the GCB had provided a letter that indicated $2,500 per year was recommended for each member of the Nevada Gaming Commission (NGC) for travel and registration costs. The letter also recommended the same amount be available for members of the GCB. If approved by the committee, Mr. Stevens indicated $20,000 would be added in each year of the biennium to GCB’s budget and would be a General Fund add.

• Mr. Stevens said the fifth issue was regarding the proposed reclassification and salary increase of four unclassified positions. He indicated that request would be covered at the time the Unclassified Pay Bill was discussed.

Mr. Stevens provided committee members with the following summary of staff recommendations:

Mr. Marvel asked if board and commission members attended meetings of the National Gaming Commission. Ms. Varin told committee members the additional travel dollars had been brought up by Senator Raggio in view of the fact GCB and NGC members had traditionally spent their own personal money to attend out-of-state conferences.

Mr. Stevens told committee members staff had no recommendation regarding this budget.

The Chair recognized Ginny Wiswell, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau. Ms. Wiswell advised committee members there were numerous technical corrections with both PUC budget accounts. She had worked closely with the budget division as well as the agency to make the necessary corrections within this budget account.

The revisions primarily surrounded the removal of one additional financial analyst position and associated costs. Rent had been overstated. Ms. Wiswell advised the budget, as corrected, represented a status quo budget for the PUC. There had been some discussion regarding the mil assessment rate. As proposed in The Executive Budget, the rate would be at 2.94 mils. Decision Unit E-276 recommended increasing the regulatory assessment to 3.04 mils to accommodate the move of the PUC’s Las Vegas office from the Sawyer Building to new quarters. As committee members were aware of from earlier testimony, the PUC had been evicted from the Sawyer Building in favor of General-Funded agencies. Staff believed the agency would require an additional $200,000 in each year of the biennium to accommodate leased office space.

Ms. Wiswell said Decision Unit M-200 requested additional funding to provide for consultants and consumer outreach programs that had resulted from utility deregulation legislation during the 1997 session. She explained the PUC was working with a consultant to determine the best delivery of information to the consumer. The requested additional funding totaled $273,900 over the biennium. The PUC had authority in its budget to extend up to $500,000 over the biennium and the requested amount was within the expenditure authority.

Ms. Wiswell told committee members legislation had been introduced in the form of S.B. 438 (1999) that provided for a change in the effective date of competition for the electric utility business from December 31, 1999 to March 1, 2000. The bill also provided a 3-year cap for the rates paid by residential customers. She said it appeared the bill would have limited, if any, fiscal impact to the operational costs for the PUC.

The Chair recognized Mr. Marvel who asked the amount of the final mill rate levy and Ms. Wiswell said 3.04 mills. She confirmed that rate represented a reduction over the existing rate.

Ms. Wiswell told committee members this budget account collected fines from those entities that violated licensing rules. Staff had no recommended changes to this budget account.

Ms. Wiswell explained this budget account had the authority to levy and collect fines. She said staff recommended the agency be allowed to place those fines in the reserve category.

The Chair recognized Mr. Marvel who asked how the Transportation Services Authority (TSA) would be funded. Ms. Wiswell replied the major source of funding for the TSA would be the State Highway Fund in the upcoming biennium. During the current biennium, TSA was primarily funded through the State Highway Fund with an infusion of funding from the Taxicab Authority.

The Chair recognized Mrs. Cegavske who asked if the administrative fines were those that had been collected and were sitting in reserve and Ms. Wiswell said yes, however, no expenditures were being recommended from that reserve.
Ms. Wiswell said TSA would have to identify a use for those funds and develop a work program prior to those funds being moved.

The Chair recognized Mark Stevens, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau who explained once those funds came out of reserve they were subject to Interim Finance Committee (IFC) approval.

The Chair recognized Ms. Wiswell who explained this was the base account for TSA. She said the first decision before committee members was relative to the infusion of the Taxicab Authority monies that had been used during the current biennium to cover the funding shortfall in TSA. The recommendation from the Governor’s Office was to eliminate that source of funding and to replace that entirely with State Highway Funds.

Ms. Wiswell said there had been discussion about having the industry support more of TSA’s operational costs. She pointed out those fees were established by statute and would require a statutory change.

Decision Unit E-129 provided for the relocation of TSA’s southern office from the Sawyer Building to non-state owned leased office space. The agency would require some additional funding to be able to accommodate the move.

Ms. Wiswell advised committee members there was proposed legislation in the form of S.B. 491 (1999) that could dramatically change the regulatory authority of TSA. Effectively, that bill would provide for the following:

• Deregulate charter buses and movers of household goods;
• Reduce the number of full-time commissioners for the TSA from three to one; and
• Limit the TSA’s authority to adjust the regulation of two trucks.

The Chair recognized Ms. Giunchigliani who thought TSA, as an agency, should be dissolved. She said perhaps TSA could be merged into the Taxicab Authority. TSA had never fully justified its purpose in the regulatory process.

The Chair recognized Mr. Dini who asked that representatives of TSA be brought before committee members to testify regarding the issues. He questioned which entity would regulate the taxicabs in Nevada counties other than Clark County if the TSA were dissolved.

Mr. Stevens said it was his understanding S.B. 491 (1999) would set up taxicab authorities in Washoe and Elko Counties and TSA’s authority would be reduced to the regulation of tow trucks. TSA would be reduced to one commissioner and the number of staff would be dramatically reduced. He recommended if committee members held TSA’s budget that the Taxicab Authority budget also be held. Those two agencies should be heard together.

The Chair advised those two budget accounts would be held.

Mr. Stevens told committee members staff had adjusted the base to reflect Budget Amendment #91 that recommended the funding contribution from the Commission on Economic Development (CED) to support the Washington D.C. office be reduced by $79,900 in each year of the biennium. Based on that budget amendment, the Governor had recommended, that same amount be added to the advertising category.

Mr. Stevens said there had been discussion in committee concerning the Train Employees Now (TEN) program concerning whether a letter of intent should be sent to the CED asking them to consider raising the minimum average wage requirement to receive TEN program monies. He advised the current requirement was that the average salary of a company be at least 75 percent of the statewide average wage.

The Chair recognized Vice Chair Evans who stated the 75 percent requirement had been in existence for some time and that TEN’s predecessor dealt with companies that barely paid salaries above the minimum wage. She felt minimum-wage jobs did not help Nevada’s economy. For a variety of reasons, Nevada wanted to help and promote better-paying jobs.

The Chair recognized Mr. Marvel who said he agreed with the Vice Chair that if Nevada was going to attract top-level industry, the current requirement would have to be increased to at least 80 percent.

Mr. Stevens told committee members there were a number of small technical adjustments in this budget account.

Mr. Stevens told committee members one adjustment had been made to the amount of anticipated federal revenue.

Mr. Stevens told committee members this budget account had been held based on concern that traffic safety monies were not being passed through to local government but was being retained at the state level.

Mr. Stevens explained the only adjustments staff had made in this budget account were in the travel area. The net increase in out-of-state travel was
28 percent over FY 1998 actual and 46 percent over FY 1998 actual for in-state travel.

The Chair recognized Mr. Stevens who advised committee members 70 percent of the budgets had been closed in full committee.

In preparation for their joint meeting with the Senate, Mr. Stevens explained there were four budget accounts on which the Assembly’s version of the budget closing differed from the Senate’s:

• The first was Other State Education Programs that Mr. Stevens felt would not be discussed by the joint committee.

• The second was Museums, Library & Arts. The issues were found in in-state travel and training as the result of a new data processing support position. The agency had requested an additional $3,750 in in-state travel and $2,000 in training. Assembly action resulted in $664 in in-state travel and $1,300 in training.

• The third was Archives and Records. The only difference was the Assembly had removed Decision Unit E-730, a project to move the gas and water main behind the Library and Archives building because it blocked access to the loading dock. Assembly action recommended the project be transferred to the State Public Works Board (SPWB) so that it could be supervised and done correctly.

• The fourth was the Juvenile Justice Act. Mr. Stevens explained the issue was a new federally funded program for aftercare. The Governor’s original recommendation assumed a 25 percent match that was split equally between state General Fund dollars and the grantee. The match amount equaled approximately $125,000 each, grantee and state. Staff had received Budget Revision #29 when it was learned there would only be a
  10 percent match required. The revision requested the grantee come up with 100 percent of the match. The General Fund was eliminated and the grantee would come up with around $80,000 (the 10 percent match). Staff then received Budget Revision #91-B which reflected that the state should, in the first year of the biennium, participate equally in the match with the grantee, around $40,000 to $42,000 in the first year of the biennium and 100 percent grantee responsibility in the second year of the biennium.
  Mr. Stevens advised the Ways & Means Committee had closed this agency’s budget based on Budget Revision #29. In view of the initial Governor’s recommendation that called for the grantees to come up with $121,000, it was appropriate the Assembly assumed the grantees could come up with $80,000. He told committee members the Senate’s action followed the second revision which split the 10 percent match requirement between the state and the grantee in the first year of the biennium and then included
  100 percent of the matching funds for the grantee in the second year of the biennium.

The Chair recognized Mr. Beers who asked if the Senate had looked at the moving of the gas line to SPWB. Mr. Stevens responded the Senate had closed the project within the agency’s budget and had not moved it to SPWB.
Mr. Beers then asked if the Senate had considered moving the project to SPWB and Mr. Stevens said he did not know.

The Chair recognized Mr. Hettrick who said the only budget account that appeared to have any conflict was the Museums, Library & Arts. He said he had supported the higher travel amounts in Ways & Means budget hearings and felt the higher travel amounts were not significant.

The Chair recognized Mr. Stevens who referred committee members to
Exhibit D, a memo from Jim Manning, Budget Division, to Debbra King, Legislative Counsel Bureau. The memo involved the retired employee’s group insurance program that was under-funded in the current biennium. To fund the program adequately, the assessment against payroll would have to be raised from .010 to .0112 in FY 2000 and from .0115 to .0132 in FY 2001.
Mr. Stevens said staff would be making one-time changes to payroll assessments to include the new statewide cost allocations, Attorney General cost allocations, DoIT cost allocations, changes in the worker’s comp assessment and, if committee members agreed, the change in the group insurance program.

Mr. Stevens advised the Department of Administration had recommended that no change be made to the retired employees group insurance assessment. Based on known factors, reserves would be reduced in the group insurance plan based on the assessment not generating sufficient monies to pay for the retired group insurance benefit. He pointed out those reserves had been built up based on supplemental appropriations that had been approved during the current legislative session as well as an increase in group insurance rates. The Department of Administration was recommending the reserves be spent down and that the rate not be increased. Mr. Stevens said staff had estimated the department’s plan would cost $583,000 in General Fund the first year of the biennium and $913,500 in General Fund in the second year of the biennium and would represent a General Fund increase on the Assembly’s side of the ledger. If committee members chose not to implement the department’s plan, those figures would represent the estimate of the reserve spend-down in the group insurance plan.

The Chair recognized Don Hataway, Deputy Budget Director, Budget Division, Department of Administration. Mr. Hataway said the memo, Exhibit D, put in writing the recommendation the department had made in subcommittee to leave the rates status quo. He said one reason the department made that recommendation was the fact a supplemental request for need this year was based on an overall $15 million expense need. The latest actuarial study the department had received listed an expense need of $14.2 million. He pointed out the entire actuarial process was based on assumptions.

The Chair recognized Mr. Price who expressed his concern for retirees.
Mr. Hataway said the department was not talking about changing benefits or rates to retired group employees. The projection was made based on people retiring at a higher level of years-of-service.

The Chair recognized Mr. Dini who asked if the department was going to take out the bad deal the previous insurance board negotiated on the Medicaid carve-out that hurt retired public employees by instituting a $3,000 deductible. He was concerned the retired people would face a disaster if the retired group insurance plan went broke. Mr. Dini was not comfortable with the plan.
Mr. Hataway reiterated the fact the current issue did not affect retired employees. Mr. Dini asked if the department’s plan reflected the assessment to fund the retired employee’s portion and Mr. Hataway said the assessment generated a certain block of dollars that went into the budget account for the retired group employees. The department would transfer, if necessary, all of those dollars to the benefits services fund.

The Chair recognized Mr. Stevens who told Mr. Dini he believed the carve-out issue was addressed in the group insurance plan budget that had not yet been closed in full committee. He suggested the risk manager be invited to discuss that issue in committee.

The Chair recognized Mr. Beers who stated if the assessments to the various funds were increased, expense would be transferred out of those funds and income into the insurance plan, and asked if there would be a recovery of federal funds. Mr. Stevens responded staff had estimated the total program cost to be $971,000 in the first year of the biennium, $583,000 of which would be a General Fund add and $1,522,426 in the second year of the biennium, $913,500 of which would be a General Fund add.

The Chair recognized Mr. Hettrick who asked if those figures represented payment from the General Fund and Mr. Stevens said the impact would be the same regardless of where the funds were derived. The question was what level of reserve committee members were comfortable with.

The Chair recognized Mr. Marvel who asked the amount of the reserve.
Mr. Stevens said based on known factors, the reserve was at the level determined appropriate by the actuary.

The Chair recognized Mr. Hettrick who said he agreed with Mr. Dini’s comments. If there were a question about where to use any extra General Fund money, it ought to be to remedy the $3,000 carve-out. He would rather see the reserve amount go down to address the issue at hand. Mr. Hettrick pointed out the carve-out had immediate guaranteed impact on those individuals who were retired and on fixed incomes. Mr. Stevens said staff would contact the risk manager for additional information regarding the carve-out issue.

The Chair recognized Mr. Marvel who asked if committee members had any heartburn with the Justice Assistance budget account and Mr. Stevens said from his point of view the original Governor’s recommendation had indicated that the grantees of the aftercare programs would be responsible for a $121,000 match. The first revision by the Governor had indicated the grantees would be responsible for $80,000. Based on the second revision, the Senate’s plan, the grantees would be responsible for $40,000. Mr. Stevens pointed out if the original Governor’s recommendation indicated the grantees could come up with $121,000 it would seem reasonable to adopt the first revision that indicated the grantees would be responsible for $80,000 in which case there would be a savings in General Fund of $40,000.

There being no further business, the meeting was adjourned at 10:20 a.m.

RESPECTFULLY SUBMITTED:

Debbie Zuspan,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

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