The Committee on Ways and Means was called to order at 12:10 p.m., on Saturday, May 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.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Ms. Sheila Leslie

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

Mr. Robert Price

COMMITTEE MEMBERS ABSENT:

Mrs. Jan Evans, Vice Chair (Excused)

STAFF MEMBERS PRESENT:

Chairman Arberry asked the committee to consider introduction of the following Bill Draft Requests (BDR):

• BDR S-1763 Makes appropriation for equipment and supplies to open Cold Creek State Prison. (A.B. 690)

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• BDR 16-1765 Authorize travel expenses for certain employees at Cold Creek State Prison. (A.B. 691)

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Lorne Malkiewich, Director, Legislative Counsel Bureau (LCB), stated there were two budgets under consideration, and regarding the Interim Nevada Legislature budget, the only adjustment was to increase the adjusted base to reflect the higher group insurance cost necessary for the next biennium. Mr. Malkiewich explained in the LCB budget, there had been a cut of approximately $475,000, however, the group insurance increase was approximately $450,000. There was also an adjustment of $107,000 during the first fiscal year and $100,000 during the second fiscal year for A.B. 525, which was passed by the Senate Finance Committee, for the Office of Financial Analysis and Planning. That was the primary difference between the proposed budget and the closing, which represented an increase of approximately $200,000. Mr. Malkiewich indicated the other adjustments were simply cuts made in an attempt to offset the group insurance increase.

Mr. Marvel inquired about the reduction in E-720 regarding the cost of a Bobcat Loader. Mr. Malkiewich advised the price of the loader would be reduced because LCB would purchase the one it had been leasing during session, so part of the lease-purchase could be paid from the current year, and the remainder would be a residual payment.

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Rick Combs, Program Analyst, LCB, indicated the committee had reviewed the budget account in detail at a previous hearing, and he would present the "high points" for committee consideration. In technical adjustments, expenditures in decision units M-200, E-125, and E-900 were adjusted to ensure that the correct funding source was being used to fund those decision units, based upon adjustments made in the cost allocation plan.

Mr. Combs noted expenditures for telephones in decision units E-710 and E-720 were eliminated based on the fact that the office received new phones during FY 1999. The half-time Deputy Attorney General position was eliminated, consistent with the closing for the Ethics Commission budget, which was closed by both the Senate Finance and Assembly Ways and Means Committees. Mr. Combs explained LCB staff had received the cost allocation plan after session began, based on the Governor’s recommended budget, and staff adjusted the budget accordingly for those cost allocation adjustments.

Continuing, Mr. Combs stated decision unit M-200 recommended the new positions, three full-time and two part-time Deputy Attorney Generals, two Legal Researchers, a Computer Network Specialist, an Information Systems Specialist, a Legal Secretary, two Management Assistants, and a half-time Administrative Aid. As previously discussed, the Attorney General’s Office currently had a staff of one computer position for every 100 computer devices which, when compared to other departments within state government, Welfare for instance, that had a 257 to 1 ratio, and DoIT had a 300 to 1 ratio, appeared sufficient.

Decision unit E-125 also recommended new positions, a new Grants and Projects Analyst, as well as increasing a current .75 Grants and Projects Analyst to a full-time position. According to Mr. Combs, those positions would be used to administer federal grants received by the office, and would be paid through those federal grants. Mr. Combs indicated there was a recommendation in decision unit E-805 for upgrade of existing computer positions, and removing two computer positions from unclassified service and placing them in the classified service.

Mr. Combs reported E-900 was the transfer of an Investigator position to the Private Investigator’s Licensing Board account, and that decision unit was basically approved when the board’s account was closed. Decision unit E-901 was the transfer of two positions to the Office of Consumer Protection account within the Attorney General’s Office, which was also approved when that budget account was closed.

Mark Stevens, Fiscal Analyst, LCB, advised that the Senate closure of the budget eliminated two computer support positions from the Governor’s recommendation. The Attorney General requested that the Ways and Means Committee consider a half-time position for the Reno office from the two that were eliminated by the Senate Finance Committee. Mr. Stevens stated that Mr. Dini had requested a note be added to the closing report, advising that Nancy Angres, Chief Deputy Attorney General, Human Resources Division, had indicated the fiscal impact related to A.B. 158 could be handled by "swapping-out" a new Child Support Deputy Attorney General within the Welfare Division, and replacing that position with an additional Deputy Attorney General for the Division of Child and Family Services. Mr. Stevens felt the committee should consider adding some language in the closing which would indicate that while there would be no additional positions recommended, one of the new deputy positions would be dedicated to the Division of Child and Family Services.

Mr. Stevens suggested it might be helpful for the committee to review how the Senate Finance Committee closed the budget, then make a decision regarding whether or not to agree with that closure, or schedule a resolution of differences in order to facilitate closure of the Appropriations Act.

Mr. Combs advised that Mr. Stevens had gone over the major items changed by the Senate closure. The other changes made in the budget were in the technical adjustments he had previously explained.

Chairman Arberry indicated he would be inclined to add the half-time computer position for the Reno office. Mr. Dini asked if there was also a difference regarding the attorney for the Ethics Commission. Mr. Stevens advised the Senate closing eliminated a half-time Deputy Attorney General that would provide counsel to the Ethics Commission, and included the Governor’s recommendation that independent counsel be provided for the commission.

Mr. Goldwater stated the committee had discussed the implication that A.B. 64 would have on the Attorney General’s Office, and asked Mr. Combs for clarification. Mr. Combs report it was his understanding that A.B. 64 would be handled through the Financial Institutions Investigation account, which was a fee-funded account. When the bill came "online" and as new positions were needed, the funding for a new Deputy Attorney General could be approved through a work program, if that became necessary.

Mr. Marvel stated he liked the idea of the Ethics Commission having an independent counsel, which would keep the commission at "arms length," where it could operate more freely. He felt that would be a much more "sterile" arrangement.

Mr. Perkins stated as part of the motion, the language needed to be added for the Attorney General to deal with A.B. 158 in the Division of Child and Family Services. Chairman Arberry noted that would be part of the motion.

Mr. Dini stated he did not want the issue of the independent counsel for the Ethics Commission to become political, however, did not know how to keep it at "arms length." Further, he advised he did not like the title "independent counsel," and felt Ethics Commission matters should be handled "fair and square." Mr. Dini stated it was his opinion that it was the wrong way to go, and perhaps the ethics law needed correction, which might help straighten out the commission.

Don Hataway, Deputy Budget Administrator, Budget Division, emphasized that the term, "independent counsel" and "contract" did not mean it was the intent to hire a private attorney. It would indicate the hiring of a new state employee in the Ethics Commission with the title of Commission Counsel. He reiterated it would not be a separate private contractor.

Chairman Arberry asked if Mr. Hataway was indicating that the counsel position would be required to answer to someone within the commission, rather than being an independent position. Mr. Hataway replied that position would answer to the Executive Director approved for the Ethics Commission. He explained there would be an Executive Director, a Commission Counsel, and a Legal Secretary.

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Mr. Stevens noted it was important for the committee to understand how the Senate had closed the budgets. The Senate had been working on S.B. 491, which had not yet been moved to the Assembly, however, the Senate Finance Committee had taken positive action on the bill. That legislation would have an impact on the Transportation Services Authority (TSA) account, and the Taxicab Authority account. Mr. Stevens stated the committee could chose to agree with the action of the Senate Finance Committee, but first needed to understand what that committee had done prior to making a decision.

Mrs. Chowning stated it was very important for the committee to know what action had been taken by the Senate, because if the Senate changed the regulatory authority to only statewide licensing of tow trucks, then that would eliminate much of the necessary staff, et cetera. She indicated it was her understanding that tow trucks and the movers of household goods were going to remain under the regulatory authority of the TSA. If there had been a change, the committee needed to know, because either way there would be a significant decrease in what was needed, both in terms of space and staff.

Ginny Wiswell, Program Analyst, LCB, explained as currently amended, S.B. 491 transferred the regulatory authority for limousines to the Taxicab Authority, established a northern Nevada Taxicab Authority, and expanded the existing Taxicab Authority in Clark County to three full-time commissioners. Currently, stated Ms. Wiswell, Clark County had a part-time board consisting of five appointees. The operation of both the northern and southern Taxicab offices would be funded through the 15-cent trip charge, and through the collection of licensing fees. The trip charge would remain unchanged from the current 15 cents; it was contemplated earlier that the fee would be increased to 20 cents, however, that was not the case at the current time.

Ms. Wiswell reported the regulatory authority of TSA would be limited solely to the operators of tow trucks, and the carriers of household goods. The number of commissioners for TSA would be reduced from three commissioners to one, and the administrative fines collected by the TSA would be reverted to the State Highway Fund.

Mrs. Chowning indicated, as she understood the changes, charter buses would be deregulated, but movers of household goods and tow trucks would not. So, the movers of household goods and tow trucks would be under the authority of TSA and the full-time commissioners would be reduced to one, there would be a northern and southern Nevada Taxicab Authority, adding three commissioners. Also, the trip charge would remain at 15 cents.

Mr. Stevens stated one other item that the committee should be aware of was that the Taxicab Authority funded the Senior Ride Program within the Aging Services Division. Based on a 15-cent trip charge, its reserve would go down to approximately $300,000 in the second year of the biennium; that was the best estimate LCB staff could calculate at the current time. The Taxicab Authority would be spending about $200,000 more per year in expenses than it would be receiving in revenue. That would put the Senior Ride Share Program at risk at some point in time, unless expenses were reduced or revenues were increased.

Basically, informed Mr. Stevens, LCB staff had made an effort to restructure the TSA and the Taxicab Authority based on S.B. 491. In looking at the revenues that would be generated based on the current 15-cent trip charge, and reviewing the expenditures over the biennium, it appeared the authority would be spending approximately $200,000 more than it was bringing in per year.

Mr. Marvel asked what the justification had been for a northern Taxicab Authority. Ms. Wiswell indicated, as she understood, it would provide increased regulation to limousine service in the northern part of the state, and would also collect the trip charge in the northern part of the state from the taxicabs. Mr. Marvel asked if the trip charge was already being paid by taxicabs in the north. Ms. Wiswell stated there was no "body" that would collect and distribute the fee like the Taxicab Authority in the southern part of the state. Mr. Marvel then inquired if there was a Senior Ride Program in the north. Ms. Wiswell replied no, there was not.

Mr. Marvel disclosed he was somewhat worried about the information presented by Mr. Stevens regarding the deficit situation facing the Taxicab Authority, and asked why there was a reduction. Ms. Wiswell replied it was unclear to her how the highway funding in S.B. 491, as amended, would be distributed. There appeared to be an understanding that the highway funding currently established in the TSA would, in fact, be used in some way by the Taxicab Authority, either north or south, however, she was not clear exactly how that process would work.

Mr. Stevens remarked the Senate Finance Committee closure was as recommended by the Governor, with technical adjustments. The closure also assumed S.B. 491 would be passed by both houses, which would require the TSA and the Taxicab Authority to return, by October 1, to the Interim Finance Committee (IFC). That action was similar to the split between the Public Service and the Public Utilities Commissions, and the TSA last session. Mr. Stevens explained the two agencies would come to IFC with a plan regarding the allocation of resources based on the passage of the bill, and IFC would then ultimately provide approval for how the resources would be structured. The question for IFC would not be whether the change in regulatory responsibilities would happen, but how to "divvy" up the resources that would be allocated between the two agencies. Mr. Stevens advised the committee could follow the Senate closure, or it could simply close the budget as recommended by the Governor, and let the bill "fly" on its own merit. The committee could also take independent action, changing the structure into a different form from that contained in S.B. 491.

Mrs. de Braga asked if northern Nevada included everything outside Clark County. Ms. Wiswell replied the outlying areas could opt into the Washoe County Taxicab Authority, or also had the option of having their local governments regulate the authority.

Mrs. Cegavske noted limousines were placed under the TSA, and asked about the fines that were generated over the 2 years. Ms. Wiswell explained the fines that had already been collected by TSA were in reserve, and what was not spent would be reverted to the Highway Fund. Mrs. Cegavske asked if that was what would happen in the future with the fine revenue; Ms. Wiswell replied in the affirmative.

Ms. Giunchigliani inquired what savings would be generated from the reduction of TSA commissioners from three to one, and if there was a savings, where would it be distributed. Ms. Wiswell stated the TSA, as currently funded, was 100 percent Highway Fund dollars, and the money dedicated for the two commissioners that would be eliminated, would remain in the Highway Fund. Ms. Giunchigliani then asked if the savings would be given to the northern Taxicab Authority. Ms. Wiswell noted that was the question, was it appropriate for the Highway Fund to fund the Taxicab Authority. Further, the Taxicab Authority thought it would be getting an infusion of Highway Fund money for the commissioners, which was another threshold question. Ms. Giunchigliani stated currently the southern Taxicab Authority had its own regulatory body, which charged its own fees, generated its own revenue and fines, et cetera. Ms. Wiswell indicated that was correct. So, rather than eliminating TSA and letting the Taxicab Authority handle the situation as it had in the past, a northern Taxicab Authority would be created, and Highway Funds would be considered to fund the agency. Ms. Wiswell reiterated she was unclear on the Highway Fund issue.

In Clark County, noted Ms. Giunchigliani, the Senior Ride Program for the Aging Division had been transferred to the Taxicab Authority, and asked if that was what the 15-cent add-on was for. Ms. Wiswell indicated the Senior Ride Program was funded through available reserve from the Taxicab Authority. In other words, when the authority had a reserve in excess of $200,000, any excess funds could be transferred to the Division of Aging Services to fund the Senior Ride Program. Ms. Giunchigliani asked how much funding was provided; Ms. Wiswell indicated it was approximately $215,000. Ms. Giunchigliani noted there was not a commensurate requirement that the northern authority should provide a Senior Ride Program; Ms. Wiswell stated that was her understanding.

Mr. Stevens stated that part of the problem was that the committee had not seen the amendments to S.B. 491, and was utilizing information generated at the subcommittee hearing, placing it at somewhat of a disadvantage. LCB staff was attempting to inform the committee what had happened as best it could, however, did not have the specific amendments in-hand to provide exact details of what the bill would look like when it moved to the Assembly. Ms. Giunchigliani asked if the intent was that the current commissioners for the TSA would automatically hold those positions in the new northern Taxicab Authority. Ms. Wiswell indicated that the TSA currently had two staffed commissioner positions, with one vacancy. Ms. Giunchigliani asked if there had been any discussion of what the intent was by creating the new body in the north, and would those commissioners or those positions then become the new Taxicab Authority. Ms. Wiswell indicated she was not aware of such intent. Ms. Giunchigliani suggested the committee wait until it had a chance to review the amendments and then make a decision regarding the TSA and Taxicab Authority budgets.

Mr. Stevens stated the committee had a number of options:

• The committee could close the budgets as recommended by the Governor, or including whatever adjustments it felt were necessary, which would retain the current regulatory structure between TSA and the Taxicab Authority.

• The committee could close the budgets including the Senate version of S.B. 491, but that could not be decided until the bill was in the Assembly. If the committee wanted to move in that direction, it could close the budget as the Senate had, and consider the bill, or a variation thereof, at a later date.

• If the committee was not happy with the regulatory structure, it could arrive at its own proposal as to how to structure the regulation of those two entities, and close in that fashion.

Mr. Stevens noted if the committee chose option number three, staff would need to commence working on such a proposal, because of time constraints.

Mr. Dini inquired if it would be best for staff to close the budget as recommended by the Governor, and then reconcile the closing with the bill. Mr. Stevens indicated the easiest action for staff would be closure of the budget as recommended by the Governor, or some modification of that action, which would close the budget and staff could then work on the bills. The committee could also choose to extract the TSA and the Taxicab Authority from the Appropriations and Authorizations Act, and put them into whatever bill passed. Mr. Stevens noted there were some options that would make it easier on staff:

• If the committee was satisfied with the current regulatory structure, it could simply move forward;

• The committee could agree with the Senate version of the closure, or some alternative that required legislation be passed prior to the end of session, then those appropriations and authorizations could be extracted from the general Appropriations and Authorizations Act, and put directly into the bill.

• The worst case scenario would be if the committee decided it wanted to change the budgets, but held staff work on the Appropriations and Authorizations Act until the end of the week, and the act could not be finalized because of the issue.

Chairman Arberry inquired if that would be closed as recommended by the Governor. Mr. Dini answered no. Mr. Stevens stated basically what that would do was move the two budgets "off the table" as far as the Appropriations and Authorizations Act went, and once all differences had been reconciled, staff would put the bills together. Whatever budget the committee approved in whatever regulatory structure it approved, any Highway Fund appropriation or any authorization of non-state monies would have to be included in that piece of legislation for the entities to have authority to spend dollars over the biennium. Mr. Stevens indicated that was not necessarily a bad way to go from the staff’s point of view.

Mr. Dini then restated his motion, and indicated he did not feel the committee could make a decision about setting up a Taxicab Authority in Washoe County, and "messing up" the Clark County Taxicab authority, which he felt was doing a good job and was necessary. He stated he had not heard from the taxi people in Reno that they needed a Taxicab Authority, and it certainly was not needed in Battle Mountain or Fernley, where there was only one taxicab. He felt the committee should expedite the matter for staff, in order to close the budgets, and that action could be handled through the bill. Mr. Dini indicated he wanted to hear some testimony prior to making a decision.

Mr. Chowning inquired if there had been any decisions or contracts written regarding space for the new Taxicab Authority; Ms. Wiswell stated it was her understanding there was a search for space, but there had been no contracts entered into.

Mr. Stevens advised staff would need to figure out how the budgets would be finalized, and recommended forming a subcommittee to review the issues, or the committee could allocate time for spokespersons from both groups to present testimony. Chairman Arberry indicated the committee would hear testimony as soon as possible from both groups in an attempt to deal with the situation.

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Larry Spitler representing Clark County School District, remarked that A.B.368 was previously heard by the committee, and Assemblyman Wendell Williams had offered amendments. Mr. Spitler stated he had been working with several legislators to address an issue that was becoming more and more pronounced throughout the education community, and that was the condition of existing schools. He emphasized that Nevada already faced schools that were in very bad condition in Lincoln and White Pine Counties, and also throughout the state. Mr. Spitler noted that several legislators representing southern Nevada wanted to ensure that schools would not go into disrepair in southern Nevada.

What the proposed amendment (Exhibit C) would do, was preserve section 1 of the bill, delete the current section 2 in its entirety, and present a new section 2. Mr. Spitler stated school districts with populations of more than 150,000 pupils would have a policy in place that addressed renovation versus replacement. That policy would include recommendations regarding when a board of trustees would consider one of two options, renovation or reconstruction. The policy would make it very clear whether there needed to be extensive renovation, or whether it would be more cost-effective, and more prudent from an educational perspective, to actually reconstruct or sell the existing school site and rebuild at a new site serving the same area.

Mr. Spitler advised the new section 2.1 would allow the Clark County School District to actually use a portion, up to 1 percent, of the current bonding capacity that was approved by the 1997 Legislature. That would be used to extensively evaluate older schools within the district, and actually reconstruct one existing elementary school, as designated by the Board of Trustees (Exhibit C). He went on to explain the Clark County Board of Trustees had been looking for some time at the need to renovate those schools that had reached a certain age, or schools where it had become cost prohibitive in terms of renovation to comparable standards of the newer schools.

According to Mr. Spitler, the Board of Trustees had an engineering firm evaluate three schools in Clark County, and had the recommendation and the criteria used by the firm, in terms of renovating those schools. Mr. Spitler advised he would like to proceed with the proposed amendment (Exhibit C), and then report back to the next session of the legislature where the school district was regarding the implementation of the pilot program. He felt Clark County could return in 2 years with very good results, and actually be in the process of replacing one of its older schools. Hopefully, Mr. Spitler advised, it would be preventive maintenance to ensure as newer schools were being built, the older schools were receiving adequate attention.

Mr. Marvel asked if Mr. Spitler had discussed the amendment with the LCB Legal Division regarding use of the 1 percent bond money for school renovation. Mr. Spitler stated in the affirmative, and the legislature would grant authority by passage of the bill as amended. Currently, Mr. Spitler indicated Clark County could actually rebuild a school with existing bond money. However, what had happened over time was that school districts had not always looked at replacement, particularly in southern Nevada where the district had been busy building new schools to keep up with growth. The school district tried to look at what had to be invested to renovate a school, and the district had not looked carefully enough at actually replacing or relocating a school. Mr. Spitler also advised the language in the amendment had been written by the school district’s bond counsel.

Ms. Giunchigliani indicated she felt "reconstruction" needed to be defined, as it did not exist anywhere in statute, and felt that might be something which needed to be added to the bill. She suggested something along the lines of a percentage of maintenance costs, and also defining "reconstruction" as rebuilding a school rather than rehabbing a school. Every entity should be clear about "dumping" additional money into a school after it had already been rehabilitated, and it was time to rebuild or reconstruct. Mr. Spitler stated that was a very good point. He indicated that quite often an existing school building would have another life to another client but, because of its age, et cetera, it would not be appropriate for an educational institution. That type of definition needed to be expanded to include the possibility of selling the old school building and then the school district could purchase land and rebuild within that same zone or area. Ms. Giunchigliani thought that would be the beauty of it, because there were schools that could be used for such things as senior centers, even though they were no longer effective for classroom use.

Addressing Exhibit C, section 2.1 (2), which stated, "***to reconstruct one existing elementary school as designated by the board of trustees and selected from the ‘Rehab vs. Replacement Study/Phase Analysis’***", Ms. Giunchigliani felt the phrase "or other analysis" should be added so the terminology was not so restrictive. She explained that trustees might want to use another document, and if the study analysis was quoted in statute, she felt the definition would be too narrow. Mr. Spitler stated that phrase was included solely for the pilot program.

Chairman Arberry asked Mr. Spitler if there were any General Fund dollars included in the amendment. Mr. Spitler replied in the affirmative, and indicated it would remove the audit from the University System, and would still hold the school districts to the audit as outlined in the original bill.

Mr. Marvel stated, for example, his old grammar school was condemned, and now was used as the county courthouse. Mr. Dini stated he did not want to get into a battle with the school districts about unfunded mandates. Further, he related at the end of the 1997 session he received letters from 17 school boards complaining that the legislature micro-managed the schools, and they did not like the package put together for the schools. Mr. Dini reported that Lyon County School District had done the same thing when it built two new high schools in Dayton and Fernley, and renovated the Yerington High School for approximately $500,000, bringing it up to standard. He asked why other school boards or districts had not already initiated such programs.

Mr. Spitler announced a board of trustees could conduct rehab or reconstruction programs. However, the situation in terms of legislative interest was that Clark County was building so fast in order to keep up with growth, that it was not moving quickly enough to review the schools built in the beginning. He believed, from a legislative perspective, that the school district felt comfortable with the language in the bill, which actually supported the school district in its endeavors, because it relieved any questions in terms of bonding. Once again, he stated the school district could currently rebuild, however, traditionally, school districts had always renovated. Mr. Spitler felt the bill was very good in terms of making it a pilot program, which could be observed long term, and also allowed for a partnership to get it done.

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Mr. Stevens advised the committee there were potential amendments to the bill, and indicated the legislature needed to provide for the $300,000 that historically had been provided to assist local governments in meeting their county match payments for the long-term care program. The bill also needed language which would allow payments to the hospitals; those were payments that were matched with federal dollars and then allocated to the hospitals. Mr. Stevens stated A.B. 386 was a related piece of legislation that was brought forward by the Nevada Association of Counties (NACO), and the amendments (Exhibit D) would substantially change the intent of the bill. Basically, the bill originally indicated the state would incur some of the additional costs of the county match program. Based on the amendments, that provision would be eliminated, and language would be included to allow local governments to access funds if they could not make payments on the county match program up to the $300,000 level. The amendments would also include the language concerning payments back to the hospitals. Mr. Stevens noted Steve Abba, Senior Program Analyst, LCB, and Charlotte Crawford, Director, Department of Human Resources were present at the hearing to provide additional information upon request. He noted that LCB staff had been working with the department to arrive at the necessary language, and thought A.B. 386 was the vehicle to do so.

Mr. Abba stated he felt Mr. Stevens had explained the amendments very well. There was a new section on page 2 of Exhibit D, which would follow the closings by the Joint Subcommittee on Human Resources of the Department of Human Resources budgets. It called for initiation of an interim study of the Intergovernmental Transfer and Disproportionate Share Program, which would be conducted by the Department of Human Resources. Mr. Abba noted there was a requirement that the department report back to the IFC, and the Legislative Committee on Health Care, as well as the Governor by July 1, 2000. The intent of the language was to review the current sharing of the proceeds from the Intergovernmental Transfer Program between the state and the participating hospitals in order to ascertain if there was a more equitable method of distributing the proceeds. It would also review the possibility of including private hospitals, which did not participate in the current program.

Mr. Marvel asked how many counties would access the fund. Mr. Abba stated the Institutional Care Fund, once it regained a $300,000 level, would be available to all counties. Over the past interim, only Lyon County accessed the fund; there had been some discussion that Mineral County might request some funding before the end of the fiscal year. However, Mr. Abba stated the department had not received a request to access those monies as of the current time. There had been a procedure established in order to apply for funding, and NACO was the administering entity that reviewed requests to access those monies. Mr. Marvel then asked how much funding Mineral County might request. Mr. Abba stated he had no idea, and also advised the fund had a balance of approximately $160,000, and Lyon County received approximately $140,000. Mr. Marvel asked if the fund carried forward. Mr. Abba stated it did, and would replenish the fund up to the $300,000 level.

Mr. Hettrick referred to Exhibit D, and inquired if most of the money was included in the budget. Mr. Abba stated the amendments would coordinate with the budget closing for the Intergovernmental Transfer Program. Mr. Hettrick stated the only real expenditure would be the additional $140,000 to replenish the fund back to the $300,000 level. Actually, explained Mr. Abba, the Intergovernmental Transfer Program budget closure included the authority to move funds, however, it was unknown how much would actually need to be transferred, and the amendments indicated the fund would be retained at the $300,000 level.

Mr. Dini stated he also understood Mineral County was going to apply and draw funds from the account for the current fiscal year.

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Mr. Stevens announced the bill was the vehicle that would be used to repay the short-term debt of White Pine County, if ultimately approved. The Governor recommended the bill as part of the package of monies available from bond refinancing. One of the Governor’s recommendations was to provide a General Fund appropriation to pay off the short-term debt that White Pine County School District had incurred. The amount was determined to be $2,310,337 and the proposal was to delete A.B. 480 in its entirety and replaced it with language stipulating an appropriation from the General Fund be allocated to the White Pine County School District in the amount of $2,310,337. It was also requested the language contain a provision that the school district report back by June 30, 2000, verifying that the debt had been repaid.

Mr. Dini advised the funding would be from the bond redemption from the Governor and State Treasurer, which saved $9.5 million in General Fund monies. Mr. Marvel stated White Pine County had borrowed the money, and paid the state back. Mr. Dini observed the county was suffering because the payment was taken from the Distributive School Account (DSA), and consequently, the children were being penalized $300,000 per year.

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Ms. Giunchigliani called the committee’s attention to the proposed amendments to the bill (Exhibit E). The amendments would basically "gut" the bill, which had contained funding from Rainy Day Fund reversion, bond language, room tax, et cetera. In working with the Governor, there was an additional $16 million in available funding, which was contained in section 2.1 of the amendment. Also, the amendment would define what an emergency condition was, as explained in the second portion of the amendment. Ms. Giunchigliani indicated the Governor suggested the evaluation and approval for emergency conditions should be submitted to both the Department of Taxation and the State Public Works Board. The Department of Taxation would determine and verify whether or not the county was at the tax cap, and the valuation issue, while the State Public Works Board would ensure that it was not a full blown project which the county really did not need, but rather an adequate and properly designed program. If both entities approved, the request would go to the Board of Examiners.

According to Ms. Giunchigliani, the additional piece was that those districts which had not utilized the additional one-quarter cent sales tax approved last session, could levy a one-eighth cent sales tax, with approval by a two-thirds vote of the trustees, and also approval of the county commission. Ms. Giunchigliani explained LCB Legal Division indicated a board of trustees could be given that authority. If Taxation reviewed the plans and informed a county it still had funding available at the local level, the county could be directed to initiate the sales tax prior to qualifying for additional funding.

Further, she indicated, the bill would continue the State Planning Commission, which would sunset July 1, 2001. That commission would be restricted to only reviewing the issue of need, and the standard for facilities. The commission could review all aspects of the plan and make a recommendation. The funding for the commission would be approximately $150,000. Ms. Giunchigliani stated meetings of the commission should be properly noticed and included in all legislative listings, so that persons knew when the commission was meeting.

Mrs. Chowning stated she appreciated all the hard work that had gone into A.B. 597 and the amendments. She indicated emergency conditions such as structural defects, environmental hazards, life and safety hazards, and accessibility barriers, were also present in urban area schools.

Chairman Arberry informed the committee he wanted the members to review the amendments and vote on the bill at a later hearing.

Mr. Marvel asked if the bill was the precursor to the state becoming involved in school construction some day. Ms. Giunchigliani stated she was not really involved in that issue, however, felt additional resources should be utilized for those types of emergency needs that some districts could not handle. She advised the bill was drafted fairly narrowly, but the issue was that the state could properly assist districts in the future, or they could assist themselves, and by empowering them with some funding, there would never be a school that reached the position where it qualified for emergency need. Ms. Giunchigliani stated the bill was set up as a prevention piece, because there were many districts that needed to focus on maintenance so facilities never reached a state of disrepair. Perhaps down the road, Ms. Giunchigliani stated, if there was an appetite, there could be grants, loans, or other methods of funding available to school districts.

Mr. Marvel noted that White Pine County had approached the legislature for additional funding since 1979. Mr. Dini indicated that at some point in time, the state would have to bear part of the responsibility for school construction for those counties that could not fund those projects. He felt the state could face some lawsuits in the future for not providing adequate facilities under the equal opportunity clause regarding education contained in the constitution. That was the reason the legislature had been proud of the Nevada funding plan, because it redistributed the wealth and took care of the counties that were not financially stable. Mr. Dini said some counties had turned down bond issues and would not realize any funding, however, counties such as White Pine, Lincoln, and Esmeralda, which were at the cap, simply could not generate further funding. There had to be some way to ensure that all children were safe in their schools, and Mr. Dini stated the bill was a modest way to initiate the program. He felt the problem would grow larger as more counties approached the tax cap.

Mr. Dini advised that Mineral County had been able to pass a bond issue to improve its schools. He recalled that there had been a real problem with funding for a school at the Schurz Indian Reservation, and the state, the Federal Government and Mineral County put in funding for a new school. Mr. Dini noted the legislature had to be "creative" in order to avoid children attending school in inferior buildings.

Mr. Beers indicated it would be tragic to see someplace like Aurora with a brand new school, amid the ruins. The nature of mining, which drove the economy, was "boom" and "bust," and the legislature had to be careful that it did not initiate extraordinary measures with taxpayer dollars to sustain something that was just not economically sustainable. That fact needed to be kept in the back of legislator’s minds as the issue was reviewed. Ms. Giunchigliani stated that was the reason the bill was crafted narrowly. The state needed to be sensitive in order not to perpetuate another fundamental structural problem in a community, and she felt the stopgaps would be the reporting. She felt Mr. Dini was correct, and the state had a constitutional obligation for a uniform system of education, and Nevada was at the point where it had not been providing that system. If the Federal Government allocated some monies, the legislation would provide that an established fund receive that allocation.

Chairman Arberry closed the hearing on A.B. 597, and opened the hearing on A.B. 622.

Mr. Stevens reported the bill would increase benefits for surviving spouses of District Court judges and Supreme Court justices. The proposal would increase the benefit from $2,000 per month to whichever was greater, 50 percent of the judges or justices pensions at the time of death, or $3,000. The bill would also provide post-retirement increases, which had not been provided in the past. Mr. Stevens stated he had reviewed the increase in the Consumer Price Index (CPI) since the last increase in 1991. The CPI had risen 22 percent from July of 1991 to April of 1999.

Ms. Giunchigliani made a suggestion to delete the other items in the bill, approve the CPI percentage and conduct a study of the issue, thereby giving the legislature an actual "handle" on what was needed. Mr. Hettrick stated, as he understood, Ms. Giunchigliani was advocating an increase in the retirement of 22 percent, rather than an automatic CPI increase. That was one of the problems, advised Mr. Hettrick, as the bill stated, "***plus an amount equal to any future post-retirement increases." Once such language was in place, there would be no control over the budget, and he did not feel that should be done. Mr. Hettrick stated he would agree with Ms. Giunchigliani, and if the committee saw fit to grant the 22 percent increase, the other issues could be reviewed next session.

Mr. Dini suggested a $2,500 increase, with the hope that a decent study could be completed in the interim regarding the entire retirement issue. Mr. Hettrick stated at a time when the legislative body did not feel it could spend money for salary and/or retirement increases for its members, why pass such a bill; he would advocate a study over the interim.

Mr. Stevens stated since the budget was closed, if the committee voted favorably on the raise, an appropriation would need to be amended into the bill in the amount of approximately $55,000. Chairman Arberry stated that would be part of the motion.

Mr. Stevens stated the bill allowed transfer of funds from the Offenders’ Store Fund to compensate the center for the purpose of making restitution. A.B. 687 was a bill to implement budget closings.

Pat Hines, representing Nevada CURE, Citizens United for the Rehabilitation of Errants, a national organization, addressed the committee. She advised 37 states now had an affiliate of the organization and its purpose was for prison reform. Ms. Hines indicated she was present to speak for families of inmates in prison, and stated the bill would add one more item to those items already deducted from the Inmate Welfare Fund, which she felt was against the intent of the Nevada Revised Statutes (NRS). Ms. Hines advised that every prison in the State of Nevada permitted at least 4 days of visiting and the amount of money spent by families in the vending machines was exorbitant. If the legislature wanted to secure money for staffing, she would suggest money be used from the vending machines. For example, she noted microwave popcorn that sold for 25 cents in stores, sold for 95 cents a package at the Lovelock prison.

Continuing, Ms. Hines reported the cost for a person sent to restitution centers, and who was unable to pay those costs, would be taken from the Inmate Welfare Fund; the same rationale would apply to that scenario. She stated if an inmate went back to prison and did not have the money in his account, it should not be taken from a fund that effected all the other inmates, just because one inmate slipped up and could not make the restitution payment.

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With no further business to come before the committee, Chairman Arberry adjourned the hearing at 1:25 p.m.

RESPECTFULLY SUBMITTED:

Carol Thomsen,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

DATE: