The Committee on Ways and Means was called to order at 8:10 a.m., on Thursday, May 27, 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

COMMITTEE MEMBERS ABSENT:

Mrs. Jan Evans, Vice Chair (Excused)

Mr. Robert Price (Excused)

STAFF MEMBERS PRESENT:

Chairman Arberry announced the first item for committee consideration would be S.B. 184.

Jack Lehman explained he was the Drug Court Judge from Clark County, Eighth Judicial District Court, which had been in existence for approximately 6½ years, since October 1992. Judge Lehman noted that the Clark County Drug Court presently provided services for 17,000 drug offenders per year. Four additional drug courts had been added in Clark County, one in Laughlin, one that covered the Mesquite-Moapa Valley area, a juvenile drug court, the first of its kind in the United States, and a dependency drug court for parents of children who were addicts, part of the family court. Judge Lehman remarked at the present time, graduates from the Eighth Judicial District Drug Court numbered 1,107 and of those only 142, or 14 percent, were recidivists. He stated the court considered recidivists anyone who had been re-arrested for any crime, even petty larceny, and he felt the court’s statistics were holding up well, as was the program.

Judge Lehman commented if graduates from other drug courts were included, there were close to 1,400 graduates, and the recidivism rate from the overall total was still approximately 14 percent. He pointed out the Justice Department estimated the average addict committed 100 crimes per year to support his or her habit. When the drug court was able to "turn a person around and get them off drugs," there was a material saving, insofar as the number of crimes that were committed in a given area. Judge Lehman indicated there were currently 1,200 active participants in the Clark County Adult Drug Court, and the cost was $1,500 per year for each participant in the program.

Continuing, Judge Lehman stated for the past 1½ years, the Justice Department had hired an organization entitled Crime and Justice Research Institute, which was a group of persons from Temple University, to study the Clark County program, along with the program in Portland, Oregon. The institute set up a study to follow a group of persons who did not go through the drug court program for a comparison, and Judge Lehman stated that report should be available in about 6 months. So far, he stated, the comparison indicated there seemed to be a substantial benefit for drug court participants. The institute concluded, through the work done up to the present time, that for every $1 spent on drug courts, $3 was saved in "hard costs" as far as incarceration and health services were concerned.

Judge Lehman remarked the drug courts were currently serving less than 10 percent of the actual drug offenders that were arrested each year, and he hoped to make a "dent" in that number with an increase in the number of participants in the coming years. He indicated the court was excited about the program contained in S.B. 184, which would bring the court a group of parolees, whose recidivism rate, according to the Nevada Department of Prisons (NDOP), was approximately 80 percent, into the program and give them, in effect, an early release. Judge Lehman stated the National Association of Drug Court Professionals was also excited about the program, and would follow it very closely, because it would be the first program of its type in the United States. According to Judge Lehman, the court hoped to make a serious "dent" in the number of recidivists among parolees released from prison, which he felt the court could accomplish.

Ms. Leslie asked if the court had a competitive process for selection of the agencies providing the treatment, and did participants have a choice about the treatment provider they were assigned. Judge Lehman answered no, and the main reason was that when the drug court program was initiated, it needed an organization that could actually provide services that were of a very specialized nature. The court chose a program entitled Choices Unlimited, which had been providing the services for 6½ years, and for approximately the first 2 years, Choices Unlimited lost a substantial amount of money. Judge Lehman indicated the court had not entered into competitive bidding, because it was "riding a horse that was doing a fantastic job," and hesitated to get involved in a bidding process. Judge Lehman reiterated the court had been very satisfied with Choices Unlimited, which continued to do an outstanding job.

Recently, explained Judge Lehman, the Nevada State Association of Drug Court Professionals was formed. He noted that the Reno drug court did use more than one provider. Ms. Leslie advised she was aware of that, and informed Judge Lehman she had heard complaints that participants did not have a choice in the southern Nevada program, and hoped the court would look at that in the future. Judge Lehman indicated the court would certainly review the program.

Ms. Giunchigliani asked how much Choices Unlimited charged for the program. Judge Lehman replied it was $1,500 per year for the treatment of the individual, which included 80 or more urine tests. Ms. Giunchigliani then inquired if the participant paid for the program, if able. Judge Lehman explained that every individual in the drug court program paid from $10 to $30 per week. The court had been successful in raising over $650,000 in the 6½ years it had been in operation from persons in the program. Judge Lehman stated he felt strongly that it was good therapy to let participants pay something back to the program, and the court could not possibly have treated the number of offenders it had, were it not for the manner in which it had been able to collect that money. Judge Lehman emphasized he did collect the fees, because persons who appeared before him were told exactly what they would owe. Ms. Giunchigliani then asked if there was an offset for any potential costs, or the actual $1,500. Judge Lehman explained the county had allowed the court to put the money right back into the program, and that was exactly what had been done with all monies it collected.

Ms. Giunchigliani asked how much urine tests cost; Judge Lehman stated he would defer to John Marr, Managing General Partner of Choices Unlimited. Mr. Marr informed the committee that currently, because of the volume of testing being done, and the technology being used, the program’s cost for a complete panel consisting of testing for 11 drugs, was approximately $10.50 per test. If those tests were sent out to a reference lab, the cost would be $70 per test. Ms. Giunchigliani advised she felt the drug court was a good program, and she had attended a hearing to see how it worked. She noted it was a good diversion program, which was the whole intent, because some of those persons did not belong in prison and if they could maintain their jobs and stay clean, that was the intent.

Next to address the committee was Peter Breen, District Court Judge, Second Judicial District, who presided over the Washoe County Adult Drug Court. He explained Washoe County had three drug courts, adult, family, and juvenile, with a total of approximately 350 participants. Judge Breen noted the numbers had "dipped" somewhat during the past year because of lack of resources. The drug court was finishing its fourth year, "sailing along in the wake of the mother ship" from Las Vegas, which he felt was a comfortable position because of that program’s great success. Judge Breen stated Washoe County modeled its drug court after the Clark County Drug Court with very few variations, explaining that Judge McGee’s Family Drug Court was the first family drug court in the country, and was the model being used for most of the other family drug courts rising throughout the country.

Judge Breen pointed out that between he and Judge Lehman, 50 years of judicial experience was represented, and the drug court was the most satisfying endeavor he had been associated with during his career. He believed the proposal to give prison inmates within 2 years of completing their sentence the opportunity to enter a very successful drug court program of accountability and responsibility, would be as successful as it was for those who entered the program at the beginning of the cycle. There was indeed a "repeat" cycle, and the drug court had been able to break that cycle because at least 80 to 85 percent of the participants were not re-arrested.

According to Judge Breen, when the Washoe County Drug Court Program was initiated, the county had the benefit of observing the court in Las Vegas. Further, he reported that Washoe County did have a competitive bidding process for its program in the beginning, and Choices Unlimited, which had its origins in Reno, was considerably cheaper than any of the other care providers who submitted bids or showed an interest. Choices Unlimited also had the necessary element of acupuncture, which was modeled after the first drug court in Miami, Florida, and which no other program offered. Judge Breen stated the county had not entered into an annual bidding process. He indicated a packet of information had been provided to the committee for its perusal, (Exhibit C), which described the current program and the proposed early prisoner release program as contained in S.B. 184.

Chairman Arberry queried the committee regarding further comments or questions, and hearing none, inquired if there were other persons in the audience who wished to present testimony on S.B. 184.

Scott Scherer, General Counsel, Office of the Governor, called the committee’s attention to Exhibit D, a proposed amendment to S.B. 184, which he would review. The amendment was fairly lengthy, and the major omission in the last draft of the bill was excluding the Division of Parole and Probation, and many of the proposed changes would simply put the division back into the bill. Mr. Scherer explained offenders entering the program would be placed under the custody of the Division of Parole and Probation, and would be supervised by the court, while being monitored by the division. Rather than repeating "Division of Parole and Probation of the Department of Motor Vehicles and Public Safety" over and over again, Mr. Scherer stated the term "division" would be used as a substitute throughout the bill.

Mr. Scherer explained it had been brought to his attention by court administrators and drug court judges that the current drug court program did not actually operate under Nevada Revised Statutes (NRS) 453.580, therefore, all references to that statute would be removed from the bill. In section 2, line 10, the words, "***supervised by a judge in the judicial district***" would be inserted in place of, "***established pursuant to NRS 453.580***".

The amendment to section 2, page 2 would delete line 2, and insert, "***judge in the judicial district to which the offender will be assigned will***". Mr. Scherer noted the significant change to that section would be that it would allow offenders to be assigned outside the district from which they were sentenced. For example, there had been some concern about whether or not the rural counties would be able to set up a drug court and certainly, if the counties chose to do so, S.B. 184 would not prohibit them from establishing such a program. Mr. Scherer remarked the change would allow the Washoe Drug Court to admit offenders from the surrounding counties. Offenders would require acceptance by the Advisory Board and the judge in Washoe County prior to admittance. Mr. Scherer explained that stipulation would be changed throughout the bill.

Continuing his review of Exhibit D, Mr. Scherer advised section 2, page 2, line 23 would insert the words, "***a minimum of one year but***" between the words "for" and "not." He informed the committee that the drug court had expressed concern that it really needed 1 year to work with participants, and did not want the director of the Nevada Department of Prisons (NDOP) to send persons who would not be available for at least 1 year.

Mr. Scherer explained in section 2, page 2, lines 37 through 40 inclusive would be deleted, and it was suggested that the language in NRS 209.424 be used to replace that section. That language read: "***has been convicted of more than one felony, unless all of the felonies for which the offender has been convicted arose out of the same act, transaction or occurrence***". Basically, Mr. Scherer stated, if an offender had one event that resulted in multiple convictions, that would not necessarily disqualify him.

According to Mr. Scherer, there were several sections throughout the bill that would be amended by deleting "a court" and inserting "the division," as outlined in Exhibit D.

The next major amendment was in section 3, page 3, deleting lines 37 through 42, inclusive, explained Mr. Scherer, and inserting language that would specify how the drug court would be paid for the offenders and in what amount. It was currently proposed that the cost for the offender to participate in the program would be $1,500 for the first month, which would cover the court’s cost for treatment, and $250 per month for each month the offender participated in the program. Mr. Scherer indicated it was hoped that would allow NDOP to put other eligible candidates into the program on the "front" end, and thereby keep them out of the prison system. That amount would be paid only until the offender’s probable release date from prison.

Mr. Scherer noted if an inmate was due to be released, NDOP would not want to pay the program, because that would create a fiscal impact on the department’s budget. The proposed amendment also specified the payment would be pro rata for any partial month. He noted there had been concern expressed by the director of NDOP that it might be easier to have a "cut-off" date, such as the 15^th of the month. If the offender participated in the program through the 15^th, NDOP would pay for the month, and if not, there would be no payment. Mr. Scherer advised the pro rata stipulation could be removed and NDOP and the drug court could reach an agreement regarding the appropriate method of payment for the offenders. Mr. Scherer indicated when the amendment was drafted, a daily rate was considered the simple method of calculation, but apparently it was not as simple as first thought.

Further changes reviewed by Mr. Scherer, as depicted in Exhibit D, included:

• Page 4, section 3, line 3, inserted "division" in place of "court" once again, and provide a transfer of money from NDOP to the Division of Parole and Probation to cover the division’s cost in supervising the offenders.

• The change on page 4, lines 3 and 4, specified that claims would be paid in the same manner as other claims against the state were paid, but from money appropriated to the department (defined to be NDOP).

• Section 4, page 4, line 12 contained a significant change which would delete "meet regularly to."

Mr. Scherer explained that members of the advisory board would be required to consider whether offenders were appropriate candidates for the program, and did not always have time to meet for those evaluations. The members might receive a file from NDOP or the Division of Parole and Probation, complete the evaluation, and then either meet or hold a telephonic meeting to arrive at a decision. According to Mr. Scherer, the deletion of those words would remove the requirement that the board meet regularly, even though the board would still be required to approve the assignment of the offender to the program. The advisory board consisted of the drug court judge, a representative from the District Attorney’s Office, a representative from local law enforcement, an attorney that represented offenders in the program, and might also include a representative from the Public Defender’s Office, and a person from the treatment provider. That board would complete the analysis and evaluation to determine whether or not the offenders being referred by the NDOP director were good candidates for the program, i.e., low risk with a good chance for success. Mr. Scherer advised the drug court judge would not be required to take any candidate he did not personally approve. Even though a majority of advisory board members could reject a candidate, they could not accept a candidate unless the drug court judge was present and a member of that majority. The reason for that stipulation was to ensure that the judge who actually had to provide the supervision, felt comfortable that the offender was a good risk.

• The next major change was on page 4, section 5, by deleting line 30, which would allow an attorney regularly assigned to represent offenders participating in the program or a representative of the Public Defender’s Office. In many cases, the attorney assigned to represent an offender by the court was not necessarily a deputy in the Public Defender’s Office.

• Section 10 of the bill would be deleted in its entirety. That section contained "clean-up" language for NRS 453.580, and reference to that statute would also be deleted from the bill.

Chairman Arberry asked how the amounts for treatment, $1,500 for the first month, and $250 for each month thereafter, were established. Mr. Scherer replied the cost of the treatment program was $1,500, and if an offender was placed in the treatment program, the program would require that $1,500 up front in order to handle the additional referrals. The $250 per month was an incentive to expand the program and keep more people out of the prison system. Mr. Scherer indicated the amount was chosen after review of the cost of incarcerating an offender in the prison system. He was informed it was approximately $7,000 per year, so the amount was calculated with the thought of leaving a savings in the State General Fund, while allowing a significant portion of those savings to go toward expanding the drug court program.

Chairman Arberry then asked for clarification regarding claims being submitted to the department, asking if that was NDOP; Mr. Scherer replied in the affirmative. The concept was that because offenders were being transferred out of the prison system, NDOP would pay the claims from its budget. NDOP would also realize a savings because of the transfer of offenders into the program. Chairman Arberry indicated the concern was that NDOP’s budget was closed, and the proposed amendment included additional costs for that budget. It was his understanding that NDOP’s budget might not have sufficient funds to cover the costs, and asked if NDOP had sufficient funds to finance the program. Mr. Scherer stated while the amendment changed the language, the costs were included in the first reprint of the bill, however, the $100 for the Parole and Probation Division was not included in the current version of the bill. After talking to Bob Bayer, Director, NDOP, Mr. Scherer felt the funds could be paid from that budget. He felt that perhaps Mr. Bayer could answer the question regarding costs.

Chairman Arberry asked Mr. Bayer to enlighten the committee regarding where the additional funds were in NDOP’s budget, as that budget was closed. Mr. Bayer stated the drug court program would "pluck" inmates that were already budgeted in the system out of the system. By doing that, NDOP would realize a very effective and real deduction from its budget and based on that, he felt the fees could be paid from the existing budget. Mr. Bayer explained the budget was predicated on a certain number of inmates being incarcerated in the system. Chairman Arberry once again stated the issue of funding was confusing, and asked why the committee had not been informed of that situation when it could have made adjustments in NDOP’s budget.

Chairman Arberry questioned whether or not the Senate Finance Committee had reviewed the bill and, if so, was it a "surprise" to that committee also. Mr. Scherer replied the $1,500 and $250 amounts were in the current version of the bill, which had been passed by Senate Finance. Chairman Arberry stated the issue was that the budget was closed and the fees were not built into the budget. There could be several bills, but the budget would not reflect the amounts required by the bill, which created a problem.

Mr. Marvel asked if "plucking" inmates from the prison system would require permission and/or approval from the Parole and Probation Division or the Parole Board prior to placement in the program. Mr. Bayer replied offenders would not have to go through that process, but would need approval of the advisory panel that was being established. The participants in the drug program would still be inmates, even though released, just like the "317" Program. Those participants would be under the supervision of the Division of Parole and Probation, hence the $100 payment for supervision.

Ms. Giunchigliani asked what level of supervision was intended for the program. Mr. Bayer replied he would anticipate a "house arrest-type" program under a very close supervision to begin with, and as the inmate progressed through the program, that supervision could be relaxed to some degree. Ms. Giunchigliani indicated she appreciated the proposed amendment (Exhibit D), because she was concerned that inmates might be moved from the prison to the drug program without the Division of Parole and Probation’s oversight. She then asked where the provision was in the budget for the division to provide the necessary staff for supervision of participants in the program.

Mr. Scherer noted that included in the proposed amendment (Exhibit D) was a proposal for payment to the Division of Parole of Probation of $100 per offender but, if that required an additional staff position, that probably had not been included in the division’s budget. Ms. Giunchigliani stated, as she understood, it would be $1,500 for the first month, then $250 for the remaining months; Mr. Scherer replied in the affirmative. Would Parole and Probation be included in the writing of the standards, inquired Ms. Giunchigliani. Mr. Scherer stated, for the most part, the standards were written into the bill, and NDOP Director Bob Bayer would choose what he felt were eligible candidates for the program, and those candidates would require approval of the advisory board.

Ms. Giunchigliani asked Mr. Bayer if the offender had to have his probation and/or parole revoked in order to be eligible, or could the offender be sentenced directly to the program. She indicated she wanted to know how the program would actually work; there were up to 150 participants, and would they all come from the NDOP. Mr. Bayer stated it was his understanding that the participants would be those who had already been revoked; it was not a true diversion program, per se, but rather a hybrid program along the lines of part diversion, part shock incarceration, et cetera. Mr. Bayer indicated the program had the capability of enhancing some of the existing programs. For example, he explained, based on the assumption that the participants were at one point in time suitable for probation or parole, by widening that net, the program would then make inmates eligible sooner for the Willing Inmates in Nevada Gaining Sobriety (WINGS) Program. The program would provide the missing piece; inmates were sent to the WINGS program, and those not eligible for release to the community could enter the transition program. Mr. Bayer stated that based on what he had seen of the drug court’s success rate, he was very enthusiastic about the program.

Ms. Giunchigliani inquired if there was diversion "down the road," and could an offender be revoked directly to the program, or was it anticipated that participants would be strictly those who were incarcerated. Mr. Scherer advised the bill anticipated only those offenders who had been revoked, and were on their way to prison. Part of it was a budget issue, he explained, and noted NDOP would be paying for those participants who were on their way to prison anyway. There would be a real savings realized by NDOP. At future sessions, where there was more time, he indicated he would come back and attempt to address up front the other budget issues that would come with diverting additional people into the program. Ms. Giunchigliani noted the bill would allow for assistance of the judge, perhaps through the court, in locating housing. Ms. Scherer stated that was correct. The judge, through the treatment provider, other persons on the advisory, and contacts in the community, could help place a participant in a residential setting.

Chairman Arberry indicated he was not against the program, and felt it was a great concept, however, the problem was that the program was submitted at the last minute. The legislature had fully funded NDOP’s conservation camp program, and the camps were currently 300 to 400 inmates below the maximum. If the legislature implemented the drug court program, would NDOP lay off staff, due to lack of inmates requiring supervision in the camps. Chairman Arberry noted the cost for inmate incarceration was $7,000 per inmate, which included mostly staff. He then asked Mr. Bayer to please enlighten the committee.

Mr. Bayer indicated the drug court program would not impact NDOP in terms of a staff lay-off; also, the inmates being pulled from institutions would be those who would not be assigned to the camps. The 2 years widened the gap to a length of time that actually exceeded the limitation for minimum custody. If there was an offender whose probation was revoked, and the court could not accept him into the program, he would remain in NDOP. Mr. Bayer stated inmates could be selected from NDOP’s medium security facilities, if they met the criteria. Chairman Arberry inquired if Mr. Bayer had an actual plan that could be provided to LCB staff. Mr. Bayer stated he did not have a written plan, and that was why the bill indicated the standards would be developed; it would take some thought to put together the program. He indicated he could produce a flow chart for the committee. Chairman Arberry indicated that Mr. Bayer needed to provide information to staff so that the committee could work with NDOP and the court regarding the program. He cautioned, however, that time was short, and the committee needed further information.

Chairman Arberry also asked how much would be saved if the plan was implemented. Mr. Bayer stated he did not anticipate it would save the system money, but might create a marginal saving. He felt it would be a "wash" depending on where the offenders came from. The money would simply be transferred from one agency to another, but Mr. Bayer felt it would save a lot in terms of recidivism, because inmates would not return to prison. It was hard to assess the program from that point of view, but he did not think it would cost NDOP additional money.

Mr. Scherer stated S.B. 184 would limit the program to 150 offenders, and was designed as a pilot program, as a test to see how it worked. In addition, the program had a "sunset" stipulation. Mr. Scherer assured the committee the plan was not to empty out the conservation camps. Chairman Arberry inquired about the "sunset" stipulation. Mr. Scherer replied section 14, lines 17 and 18, read in part: "***expire by limitation on June 30, 2001***". The limitation of 150 offenders was also included in the bill.

Mr. Marvel asked if the bill had been discussed before the Senate Finance Committee. Mr. Scherer indicated the bill itself was discussed before the budget was closed, but it was certainly his oversight in not ensuring that he returned to the committee when it came time to close the budgets. The bill was not scheduled until after the budgets were closed. Mr. Marvel asked if the Senate passed the bill including the amendments; Mr. Scherer stated he had discussed the fees, $1,500 and $250 for the drug court program, however, had not discussed the $100 fee for the Division of Parole and Probation. There was an oversight which omitted the division from the bill, and when that agency was included, supervision fees were also needed. Therefore, the funding for Parole and Probation was new, however, all other funding was included in the bill at the time it was discussed by the Senate.

Chairman Arberry stated that prompted an additional question, which was how would the Division of Parole and Probation absorb the additional caseload, because they were already over the national average for parolee supervision, and the division did not have sufficient staff to supervise those it already had. The legislature had worked on the ratio of officers to parolees in the past, to "whittle" the ratio down so the officers could provide better management of those cases. With the addition of the drug court program caseload, it would once again put the division "out of the norm." Chairman Arberry also noted the division’s budget was closed without additional funding for such a program, and asked where the money would come from.

Mr. Scherer stated the Governor recommended additional Parole and Probation Officers in The Executive Budget, to reduce the ratio. He stated he certainly understood the logistical problem with regard to the budgets being closed, however, he reiterated it was a pilot program of only 150 offenders maximum, and he did not feel that would be a major impact to the division’s budget. Ms. Scherer noted the committee could lower the number of participants to lessen the impact on the division, and indicated perhaps 100 participants might be more reasonable; it was up to the discretion of the committee.

Judge Breen commented he wished to address one aspect of the question concerning the Division of Parole and Probation. He stated the court envisioned a great deal of the supervision being done through the drug court itself, because the court saw the participants on a weekly basis. Further, noted Judge Breen, the care provider saw the participants three times a week, and he envisioned the Parole and Probation Division being in court and involved however it saw fit, but a great deal of the supervision would be through the drug court process.

Mr. Bayer related that as far as the camp issue, there was a diversion included in NDOP’s budget, where the Jean Conservation Camp would be converted to a female facility, which would create a surplus of minimum custody inmates actually housed at the institutions. As he had previously testified, Mr. Bayer noted NDOP would adjust to that situation, and would have an excess number of minimum custody inmates without sufficient space available in the camps. He advised that a number of those inmates would be absorbed into the drug court program.

Chairman Arberry reiterated that LCB staff were extremely busy in assisting the legislators in concluding the session, and at some point he suggested Mr. Bayer confer with Gary Ghiggeri, Deputy Fiscal Analyst, LCB, to ascertain if the drug court program was viable for all agencies.

Chairman Arberry then inquired if there were any other persons who wished to speak for or against S.B. 184, or the proposed amendment. Hearing none, he declared the hearing closed, and announced the next order of business would be S.B. 443.

Richard Jarvis, Chancellor, University and Community College System of Nevada, advised the committee the bill would create a committee to study methods of funding higher education in the state. Section 1 of the bill outlined the appointment of 12 voting members and 4 non-voting members. Dr. Jarvis indicated the voting members would be three members of the Senate appointed by the Majority Leader, three members of the Assembly appointed by the Speaker, three members of the Board of Regents appointed by the Chair, and three members appointed by the Governor. The four non-voting members would be appointed by the Governor, and would consist of one member from the Budget Division and three members from the University and Community College System. According to Dr. Jarvis, the chairman of the Legislative Commission would designate one of the members as chair of the committee.

The purpose of the bill, explained Dr. Jarvis, was for the committee to compare existing methods of funding higher education in Nevada with those methods used in other states, and to determine whether other methods would be appropriate and useful in Nevada. Section 4 of the bill identified that the committee might employ such educational and financial consultants as it deemed necessary, and in section 6, an appropriation from the state General Fund to the Legislative Commission would be granted in the amount of $150,000 for the purpose of conducting the study.

Dr. Jarvis informed the committee a bill to establish a funding study had been requested by the Board of Regents for several sessions. The goal was to examine the current funding formulas that had been in place since the last study in 1986. Since that time, noted Dr. Jarvis, there had been vast differences in the growth rates of the campuses, and now in the relative size of the campuses, which effected the applicability of any set of funding formulas. Dr. Jarvis remarked that in addition, new functions had developed in the last decade and a half, the most obvious of which was technology. In 1986, no one envisioned the extent to which technology would place a burden for hardware, software and people on the system, along with the cost of rapid upgrading and modernization of the system.

Dr. Jarvis commented that the study was quite distinct from that of the recent equity study conducted by the Board of Regents and submitted to the legislature. That equity study looked at what had happened in the past, and where the system was now. The study proposed by S.B. 443 would attempt to define and/or redefine the funding formulas necessary to guide the University and Community College System in the future. Dr. Jarvis stated it would build upon the results of the previous equity study, however, it was fundamentally a different and new look at the funding formulas that would hopefully guide the system through the next decade.

In conclusion, Dr. Jarvis indicated he would offer the help of his office and staff and/or any members of the system that might help. He urged the committee and the study team itself to expedite the process so the system could build upon its findings in preparing and submitting the next biennial budget request.

Chairman Arberry inquired how the $150,000 figure was established, and what would it be used for. Dr. Jarvis stated the primary purpose for the $150,000 would be to support consultants. As a gauge of the scope, the $70,000 equity study recently completed was to bring in a national team to look at current funding levels. The requested amount was approximately twice that used for the equity study; and Dr. Jarvis would imagine the scope of the proposed study would be substantially greater than the one recently completed. The $150,000 would also cover various expenses for members of the committee, as detailed in section 1 of the bill. Chairman Arberry then asked Dr. Jarvis to provide a breakdown to LCB staff, indicating how the $150,000 would be used. He also asked if any of the money would be used for travel, noting the various members on the committee would probably gather in either the northern or southern part of the state, which would create some travel. Chairman Arberry wanted a breakdown regarding the travel, and asked Dr. Jarvis to provide such to staff. Dr. Jarvis stated it would be utilized as indicated in the bill, and there were no other plans to use the money for other than what was outlined in the bill.

Joe Crowley, President, University of Nevada, Reno, advised he would speak in support of S.B. 443. He indicated he had the privilege of serving on the last interim committee to study the funding of higher education in the state, along with the presidents of the University of Nevada, Las Vegas, and the Community College of Southern Nevada (CCSN). Dr. Crowley noted that study occurred in 1986, and followed up on other funding studies that went back to the 60’s and 70’s. Because of the changing nature and the greater complexity, greater size, and forces over which there was no control, the time had arrived to take another look at how Nevada funded its education. According to Dr. Crowley, the study of 1986 was very helpful, and produced some significant benefits for higher education in the State of Nevada. He indicated everyone in the system believed it was time to take another look at how education was funded and how it needed to be funded in the future to carry out the obligations that the state assigned to the system.

Mr. Marvel asked how the campuses had faired with the support ratio established in the 1986 study. Dr. Crowley stated that typically the Executive Branch recommended, and it was the disposition of the legislature to increase an across-the-board percentage for the campuses, and they were then free to use those support dollars where there was the greatest need. For example, there was a formula for student services, for academic support, and institutional support. From campus to campus, noted Dr. Crowley, there might be a greater importance assigned to one area than another. He felt there had been some significant variations, and there had also been skewing of the situation a bit. The system had experienced tremendous growth, particularly in the institutions in southern Nevada, which caught institutions in a situation where they simply could not keep up. Dr. Crowley explained the support formula at CCSN had been significantly under- funded. By and large, he felt the distribution had been fair in terms of the formulas that were decided on by the committee and accepted by the legislature. Dr. Crowley stated it was time to simply take a look at how those formulas needed to be revised to recognize the realities that the system faced today and in the future.

Mr. Marvel stated he was concerned about the equity study, and realized that every campus was unique in its own self, however, wanted to know if Dr. Crowley felt there was equity among all the campuses. Dr. Crowley indicated the equity study went beyond the formulas. The one thing that stuck in his mind with respect to the study was the focus on support positions at CCSN, where it had clearly been unable to keep up because of the huge growth of the institution that went beyond projected enrollments. Those support formulas were driven in large part by budgeted enrollments, and when CCSN went beyond the budget, then the support positions could not keep up, which created an inequity. Dr. Crowley observed that beyond the formulas, certainly the equity study looked at comparative factors around the country, given where the institutions were and where they were headed, which produced some of the differences that were discovered. It certainly produced significant differences between the two universities from an equity perspective. As he understood, Dr. Crowley stated it was the intention to "roll" the equity study into the work of the interim study committee for its examination, analysis, use, and perhaps further refinements. In terms of the support formulas, which were the particular product of the 1986 study, they had served their purpose well.

Mr. Marvel indicated it appeared there was such a disparity, however, he was not sure the disparity really existed, when the support formulas were reviewed. Because of the uniqueness of each campus, perhaps that inequity was not as large as the study pointed out. Dr. Crowley stated everyone agreed to support the findings and recommendations of the management firm that completed the equity study. He indicated he was on record in support of those findings and recommendations, and could only say that he felt those findings were fair. Mr. Marvel then inquired if the equity study would be used as the base for the proposed committee. Dr. Crowley stated that would be up to the committee to decide, however, he felt it would be useful as part of the data to be reviewed by the committee. He would not actually call it a "base" for the study. Mr. Marvel inquired how long it took to complete the equity study. Dr. Crowley estimated it was approximately 3 months.

Ms. Giunchigliani questioned the number of members on the committee, commenting 12 voting members comprised a rather large committee. She asked if there had been any discussion about reducing the number of members so there were only two members from each entity, thereby reducing it to a workable group. Dr. Crowley indicated the size was comparable to the size of the last committee, which worked well together. He thought, in part, the numbers reflected the complexities of the system, as well as the legislature, and the need for various kinds of balance on the committee. Ms. Giunchigliani noted there were no faculty or student members, just bureaucrats, management, and politicians. Looking at the non-voting members, there were just the three persons who could again be management rather than faculty. Dr. Crowley stated those persons could be faculty, and in the process of the appointments being made, he would certainly urge that faculty be given consideration, and also the appointment of a student would be a useful idea. Ms. Giunchigliani suggested that be an amendment to the bill.

Continuing, Ms. Giunchigliani stated she was concerned about section 3 of the bill, which read, "***the committee may hold public hearings***", and felt it should read, "***the committee shall hold public hearings***". Dr. Crowley advised he would have no objection to that change. Reviewing what the committee would be looking at for the $150,000, a comparison of Nevada to other states, Ms. Giunchigliani did not necessarily feel that was a valid issue. She inquired why it was being done again when the equity study had just been completed. Dr. Crowley stated the purpose, as indicated by the Chancellor, was to look at where the system should be going, funding-wise, in the future. The equity study took the system up to that point. Ms. Giunchigliani felt there might be a need for more dollars, and noted the state continually looked at one portion of its educational institutions, higher education, and a student would not get to higher education if something was not done for the K-12 students.

Ms. Giunchigliani wondered why the study would only focus on comparisons from state-to-state, because she thought the issue generated from the equity study. Dr. Crowley remarked the proposal to create an interim study committee to study the funding for higher education had been in the legislature for at least three sessions. The time had simply come when the system had to take a look at how it was expected to conduct business in the future. It was not his province to comment one way or another regarding whether there was a need for examination of K-12, and he would have no objection to that, however, S.B. 443 would create a committee in the manner that all five previous interim study committees had been created. Further, Dr. Crowley advised, the system was not doing anything that represented a radical departure from the past, but rather looking at what the needs for higher education would be.

Ms. Giunchigliani stated section 2, number 1, read, "***compare the existing method of funding higher education***", and Dr. Crowley’s statement had been that he thought the equity study recently released would be incorporated in that study. Dr. Crowley advised he assumed it would become data to be used by the interim study committee. Ms. Giunchigliani said the bill did not state that; Dr. Crowley indicated it was up to the committee, or the legislature, if it wanted to incorporate that into the bill by way of an amendment. Ms. Giunchigliani then asked how the $150,000 would be used. Dr. Crowley commented it could go to hiring consultants to assist with the study, as well as to pay the expenses of the study as detailed in the bill. Was the compensation included, asked Ms. Giunchigliani. Dr. Crowley answered in the affirmative.

Appearing next before the committee was Jim Richardson, representing the Nevada Faculty Alliance Chapters. He noted, as indicated by Dr. Crowley, it was the third time the bill had come forward, and for the last two sessions, the legislature had been encouraged to approve that type of study. Mr. Richardson commented the bill was not even heard at the past two sessions. The reason the regents had requested the study for the past 6 years, was the fact that the system was experiencing growth. Also, impacting faculty in a very direct way was the fact that the previous study obviously did not adequately cover some areas, such as the rapid growth in the use of technology. He noted there had been discussions about whether technicians were needed to service the many computers in use by students and faculty.

Continuing, Mr. Richardson explained there was a severe dearth of trained technicians throughout the system, however, the current budget would help to somewhat alleviate that problem. He advised there had been a tremendous problem in dealing with the growth in technology, and quite frankly, the system was "behind the eight-ball" compared to most states. Mr. Richardson hoped the study would reveal such problems via use of the comparative types of data that had been alluded to. He wanted to go on record as strongly supporting S.B. 443, and would encourage support from the committee. In response to a comment made by Ms. Giunchigliani, Mr. Richardson indicated the faculty and their representatives intended to seek appointment to the committee, which would be up to the appointing authorities, particularly the Governor. There were a number of slots to fill, and faculty hoped he would fill at least one of the slots with a faculty member.

Mr. Marvel stated since the last study, the focus had changed on distance education, and he wondered if the study would have a direct impact on the support formula. Electing to respond was Dr. Jarvis, who remarked that was exactly the type of thing that was not specifically covered by the last set of formulas. He noted that Mr. Marvel had assisted with distance education during the last two sessions, and that would be something Dr. Jarvis would like to see put into the normal base of operations, rather than seeing the issue as an "add-on."

Mr. Goldwater stated the items that were proposed for study he felt should be functions of the Chancellor’s Office, inquiring why they were not, and why a separate study was needed. Dr. Jarvis replied that certainly the discussion of the formulas and the funding patterns within the system did fall within the purview of his office and staff, and that information was presented to the Board of Regents for their discussion. The history of Nevada, and other states as well, was that when the state wanted to undertake a major "rethinking" of the way it funded a sector like higher education, a legislatively driven committee was required, with external consultants to provide the needed detachment and objectivity. Further, Dr. Jarvis explained, his office dealt with maintenance, upkeep, and presentation of the biennial budgets, and it was normal practice to look for legislative support for what could be a fairly radical set of alterations in the way in which it apportioned funding for higher education in the future.

Mr. Perkins inquired if there were further questions from committee members or the audience, and hearing none, declared the hearing on S.B. 443 closed. The next item for committee consideration was S.B. 485.

Anne Cathcart, Special Assistant Attorney General, introduced Kevin Higgins, Chief of the Reno office, and Director of the Workers’ Compensation Fraud Unit. She explained Mr. Higgins was present because he was the expert regarding high technology crime. She called the committee’s attention to her letter of May 21, 1999 regarding S.B. 485 (Exhibit E). Ms. Cathcart indicated there were other employees of the Attorney General’s (AG’s) Office present, who were much more knowledgeable than she was in areas concerning high technology crimes such as "slamming," "cramming," computer viruses, and things of that nature. If the committee wanted technical information, she would defer to those persons for response.

Ms. Cathcart remarked the bill came about due to efforts within the AG’s Office in an attempt to ascertain how Nevada could better cope with the problems that law enforcement had experienced, and continued to experience at an exponential rate, with respect to high technology crime. High technology equipment such as computers and cellular phones were being used more and more as instrumentalities of crime or, as in the case of computers, used as repositories of information about crime, particularly in instances of drug activities and white collar-types of crime. Ms. Cathcart advised that Mr. Higgins could provide examples of how law enforcement had found evidence within computers.

Ms. Cathcart disclosed that contained in Exhibit E was a page entitled, "Summary of Provisions of Senate Bill 485 (Second Reprint)," which referred to the contents of the bill. She informed the committee that the bill was essentially two main parts. One part was to define what technological crimes consisted of, i.e., Internet service providers, viruses, encryptions, and other things of that nature. Those definitions would be included in the Nevada Revised Statutes (NRS). Further, explained Ms. Cathcart, the bill also identified certain types of activities that would be criminal. She advised the AG’s Office now received, and had been receiving for a number of years, an increasing number of complaints with respect to things such as practices involving "slamming," "cramming," or pornography. Ms. Cathcart indicated that law enforcement had increasingly dealt with problems involving concerned parents whose children were getting into "chat rooms" on the Internet, and chatting with unknown persons. She remarked that she knew of an instance where a teenage girl in her neighborhood had made plans to meet someone who she met on the Internet, who claimed to be a 17-year old youth from New Jersey, which, surprisingly, he was not. Such situations were very frightening, and law enforcement was attempting to get a handle on such problems.

According to Ms. Cathcart, the portion of the bill that the Ways and Means Committee needed to review from a fiscal standpoint, was that of the Advisory Board to the High Tech Crime Taskforce. The taskforce was in place, however, the Advisory Board, consisting of "movers" and "shakers," would include two persons from the legislature, representatives from the private sector who were impacted by high tech crime, also persons from law enforcement community, to coordinate all the efforts. The bottom line, explained Ms. Cathcart, was that no single state agency could tackle the problem alone, because the resources simply were not available. The legislature needed to review innovative ways to provide funding for the training, coordination, and cooperation of all levels of law enforcement.

The reason the AG’s Office felt S.B. 485 was a very good bill, was because of the funding mechanism. The funding would not come from the General Fund, taxes, assessments, fines, or Highway Fund money. The bill would authorize the AG’s Office to expend up to a certain sum of money, which would come from the reimbursement received by the office from attorney fees and costs it expended toward negotiation and settlement of the National Tobacco Litigation. Ms. Cathcart noted that the AG’s Office anticipated the reimbursement would be received in approximately July 1999, and it could spend up to a certain amount, as specified in section 53 of the litigation, for the purpose of providing some support staff for the Technological Advisory Board.

Chairman Arberry inquired if there was any further testimony to come before the committee regarding S.B. 485, and hearing no response, declared the hearing closed. The next item to come before the committee would be S.B. 504.

Raymond Sparks, Deputy Director, Department of Motor Vehicles/Public Safety (DMV/PS), announced he was present to address sections 1 and 2 of S.B. 504. The members of the committee might recall that during the 1997 session, DMV/PS requested, and was approved, funding to begin a project to upgrade its mobile radio communication system from low band to VHF high band. According to Mr. Sparks, the plan for the project followed the recommendation made by the radio engineering consultant contracted by the state in 1995 to study statewide mobile radio systems and needs. Mr. Sparks indicated the legislature appropriated approximately $2.9 million to begin the project.

Continuing, Mr. Sparks remarked in testimony presented in 1997, he stated that the total cost of the radio project was unknown at that time, and that an early and primary task of the project would be to contract with an engineering consultant to design the system. Once the system was designed, an accurate cost could be determined. He commented that since 1997, DMV/PS had, in fact, contracted for the services of a consultant and the radio system design was largely complete. In addition, the department had purchased much of the necessary radio equipment.

Mr. Sparks indicated he was present to request support of S.B. 504, which would appropriate the funds necessary for the build-out of the radio system. Specifically, DMV/PS was requesting $9,864,060 in Highway Fund dollars, and $355,422 in General Fund dollars, to allow the department to complete the radio system. The requested funding would enable DMV/PS to complete the radio project by the end of the next biennium, and would provide a mobile radio system that would greatly enhance public safety in Nevada.

According to Mr. Sparks, representatives from the Nevada Department of Transportation (NDOT) were present to address the other section of the bill. Chairman Arberry asked about the Highway Fund appropriation. Mr. Sparks advised the primary amount would be from the Highway Fund, along with a small amount from the General Fund, which would cover the cost for the Division of Parole and Probation and the Division of Investigations.

Mr. Marvel inquired if the bill would help cure some of the "dead spots" around the state. Mr. Sparks replied that one of the objectives of the project was to provide coverage over all of the main roadbeds throughout the state so officers had radio communication virtually everywhere. Mr. Marvel stated he spoke to an officer in Tonopah, and "dead spots" was one of the problems suffered in that area. Mr. Sparks indicated there were a number of such spots throughout the state and the project was designed to resolve those problems.

Chairman Arberry asked if all systems would be able to communicate with each other, because, when the issue was discussed in years past, there was some controversy about which entities could communicate with each other. He asked if everyone was now on the same "page," or would the system only work for a few. Mr. Sparks stated everyone was on the same "page" in that everyone agreed with the direction being pursued, which was to provide for interoperability. The VHS high band system that DMV/PS proposed, and was in the process of implementing, would allow the department and its officers to communicate with approximately 95 percent of the law enforcement agencies throughout the state. The NDOT 800-megahertz (MHz) system would provide communication with a few law enforcement agencies on that frequency. DMV/PS planned to work in cooperation with NDOT in an attempt to interface the two systems, so DMV/PS could go through NDOT’s system for interoperability with all agencies on that system.

Chairman Arberry asked if the system would take care of circumstances such as the incident of the gentleman who was murdered in the desert somewhere and no one knew what had happened. Mr. Sparks stated that was the goal, to ensure the department had interoperability with those agencies that would respond to a public safety situation, and so it could communicate via radio with allied agencies.

Mr. Beers stated he was rather confused, because an 800 MHz system was a line-of-site system, and why would the state be interested in such a system. Mr. Sparks stated he would defer to NDOT personnel to provide the answer. Roger Grable, Assistant Director for Administrative Services, NDOT, indicated the Data Processing/Telecommunications Division was his responsibility, noting he was also a licensed ham radio operator. Mr. Grable remarked he was present to speak in support of S.B. 504, because it would allow NDOT, under the added section, to complete its build-out of the existing 800 MHz shared radio system, called the Nevada Shared System, which currently covered approximately 60 percent of the state. He mentioned the bill would primarily fund the interoperability portion of the build-out, and the intent was to build a backbone that provided interoperability between the existing 800 MHz system and the expanded 800 MHz system. That would provide interoperability for the Highway Patrol to communicate under emergency conditions with everyone connected to the 800 MHz system. Mr. Grable stated NDOT felt there was sufficient funding for the project, and he respectfully requested that the bill move forward.

Mr. Beers indicated the appropriation was not included in the first version of the bill, to which Mr. Grable agreed, however, it appeared to have been added in the second version. He advised he was still somewhat confused because an 800 MHz system would imply that it serviced a local area rather than a statewide system. Mr. Grable noted NDOT was well established in the shared 800 MHz system in the Las Vegas region. NDOT had an inherent system with a Federal Communications Commission (FCC) waiver that permitted other than state agencies to join into the use of the 800 MHz system’s safety spectrum. Mr. Grable informed the committee there were technical persons present who could describe how that worked in more detail. The sharing of the system had allowed NDOT to share facilities with Nevada Power, Sierra Pacific Power, University of Nevada, Las Vegas, and North Las Vegas Police. Further, he conveyed the Gaming Control Board was ready to come into the system, along with other major state entities that wanted to join the system. Mr. Grable mentioned it would be very desirable to have all the systems talking to one another and to the Highway Patrol when a crisis situation developed. For example, during the flood in Sparks, persons could not talk from one side of the freeway to the other because the systems were "blanked," and a citizen’s band radio was the only thing that worked. According to Mr. Grable, it was critical that the state had the interoperability capability.

Mr. Beers then asked what the $4.3 million would buy. Mr. Grable replied that it would buy hardware, software, radio equipment to expand the 800 MHz system throughout the northern and northeastern segments of the State of Nevada, and it would buy the interconnectivity. He noted it would also buy the equipment that went into the integrated computer system, which linked all the radio mountaintop sites, and would provide certain mobile equipment that would interface NDOT’s system with DMV/PS’s system. Mr. Grable explained it was a fairly complex assortment of equipment.

Mr. Beers stated, if he understood correctly, it would be a northern Nevada only expenditure. Mr. Grable stated not necessarily, because the 800 MHz system was global throughout the state, and what was done in the north would effect what happened in the south. There were certain improvements that would be required in the south, including a "box" that went into the integrated system to connect the 150 MHz system with the 800 MHz system, which would be a statewide improvement included in the $4.3 million. Mr. Beers mentioned it sounded somewhat duplicative, because there was a low band for statewide communications, and the high band was a "line-of-site" system; he questioned the benefit of a statewide 800 MHz system.

Mr. Grable explained there were several mountaintop sites throughout the state, and the 800 MHz system technically operated very similar to the 150 MHz within the state. Both systems used the same mountaintop sites, and had the same number of repeaters throughout the state. Mr. Grable stated currently there were facilities which NDOT and DMV/PS shared, and other facilities where the two departments were not together. Those needed to be brought together so the system would function as a unit and not as two separate systems. Mr. Grable indicated part of the system was to bring NDOT and the Highway Patrol together with the Department of Information Technology (DoIT), to create a statewide operating system with two radio systems, one 150 MHz and one 800 MHz. Both systems were already in place in the state and both worked the same because of the mountaintop sites. Mr. Grable advised there was a map available where the proposed sites were plotted for the 150 MHz systems against the sites planned for the 800 MHz build-out, and they were essentially adjacent or parallel to each other.

Mr. Beers then inquired why the amended and original bill contained appropriations included in The Executive Budget, but they were $4.5 million apart. Chairman Arberry stated the appropriation was placed in the budget and the bill was needed to compliment the budget. With no further testimony forthcoming on S.B. 504, Chairman Arberry declared the hearing closed. The next order of business for the committee was S.B. 545.

Dave Pursell, Executive Director, Department of Taxation, stated that during the department’s budget closing, the fact was discussed that the department would suffer a shortfall in its budget for the current fiscal year, due to increased computer costs from DoIT. S.B. 545 was a request for a supplemental appropriation for FY 1999 in the amount of $165,000. The spreadsheet provided to the committee, (Exhibit F) was the same as reviewed during budget closings, and there were two categories where the department was short for FY 1999:

• A shortfall in operating in the amount of $97,000, however, through vacancy savings and savings on travel and other expenditures, the department was able to cover that shortfall.

• In the category for Information Services, the department was short $177,000.

Referring to Exhibit F, Mr. Purcell stated the work program authority for the department was $1,345,000 for computer costs, however, based on annualizing the actual costs for the first 6 months, the total costs for FY 1999 would be $1,522,000. He explained the department had been able to cover $13,000 of that shortfall, but would need the supplemental to cover approximately $165,000 of that increase in operating costs for the department’s computer runs for sales tax returns.

Mr. Marvel inquired if the department had hired a demographer yet; Mr. Purcell replied it had not, and the contract would not expire until June 30.

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With no further business to come before the committee, Chairman Arberry declared the hearing recessed at 9:45 a.m., at the call of the Chair.

RESPECTFULLY SUBMITTED:

Carol Thomsen,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

DATE: