The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Monday, April 5, 1999, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

Senator Bob Coffin

Senator Bernice Mathews

GUEST LEGISLATORS PRESENT:

Senator Terry John Care, Clark County Senatorial District No. 7

Assemblywoman Bonnie L. Parnell, Assembly District No. 40

Senator Jon C. Porter, Sr., Clark County Senatorial District No. 1

Senator Mike McGinness, Central Nevada Senatorial District

Senator Alice Costandina (Dina) Titus, Clark County Senatorial District No. 7

STAFF MEMBERS PRESENT:

Debbra J. King, Program Analyst

Ginny Wiswell, Program Analyst

Judy Jacobs, Committee Secretary

OTHERS PRESENT:

Don Hataway, Deputy Director, Budget Division, Department of Administration

C. Joseph Guild, Lobbyist, Nevada Humanities Committee

Senator Raggio announced he would take Senate Bill (S.B.) 261 out of order to accommodate Senator Care. Senator Raggio recalled there had been comment on the measure on March 9.

Senator Terry John Care, Clark County Senatorial District No. 7, related that shortly after he was elected, he met with fellow members of Post 40, American Legion in Henderson, who told him no provision was made for a spouse house when the veterans home was approved. Senator Care said what is being requested is a four-bedroom house with two bathrooms so that spouses will have a place to stay while visiting. He noted the Veterans Administration (VA) hospital in Reno has a home for visiting spouses. He reported the Reno spouse house was funded through private donations, and the request in the bill is for authorization to build a house using donations.

Senator Care pointed out an error in the fiscal note, saying there is no intention to charge spouses $10 each night to stay in the house. Senator Raggio interjected the fiscal note came from the veterans affairs office. Senator Care reiterated there is no intention to charge a fee, but there will be operating expenses for utilities and for some personnel costs associated with the house. However, he said, a lot of the work will be done by volunteers.

Jack Daniel, Chairman, Southern Nevada Veterans’ Home Steering Committee, testified that when a steering committee was formed for the Veterans’ Home a convenient place for spouses coming from out of town was discussed as a matter of concern. He said the committee realized not only would it be financially impossible for the state to build the home, but also approval would be needed from the Legislature to erect a house on the property.

Mr. Daniel pointed out that, although a site has been designated, legislative approval is necessary before the committee can hire an architect, structural approval must be received from the manager of the State Public Works Board, and funding must be collected from donors. Mr. Daniel estimated the maintenance will run approximately $100 per month.

According to Mr. Daniel, occupancy will be determined by the administrator of the home, contingent upon the need of the veteran. He said the average stay in the veterans home is about 2 years. He asserted it is a medical benefit to have the spouse near the veteran. He related he and his wife at one time took spouses who lacked means into their home in Redding, before a spouse house was constructed on land donated by the veterans hospital there. He said that spouse house now appears to be functioning very well at a minimal cost.

Mr. Daniel told the committee auxiliary groups, including spouses, active military, and various churches, have expressed a willingness to participate in the construction, maintenance, and operation of the home.

Senator Raggio noted the bill mandates construction of the home but does not indicate there will be no cost to the state. He asked for clarification. Mr. Daniel responded the committee intends to raise funds to construct the home, and it has no intention of imposing any financial obligation on the state. He said grants and private donations will be solicited, and it appears they will be forthcoming.

Senator Raggio drew attention to the revenue fiscal note which indicates there may be a $10 charge per night with an estimated 3.5 rooms occupied on average. He indicated the fiscal note refers to services of a residential housekeeper, a relief person for in-house staff to be provided by volunteers, and maintenance and upkeep estimated at a cost of $300 per month. Another $100 per month is estimated for insurance and office expense. Mr. Daniel responded the costs should be approximately $100 plus the utility expenses. Senator Raggio stated the estimation should be as accurate as possible to avoid understatement in order to ascertain what is actually being authorized. Mr. Daniel replied he has not studied all those figures, but the steering committee feels volunteer services will remove much of the maintenance costs. He acknowledged the idea is tenuous.

Charles G. Abbott, Executive Director, Office of Executive Director for Veteran Affairs, Office of the Military, interjected the Southern Nevada Veterans’ Home will become a focal point for most of the veterans in the state once it is completed. He said there is adequate acreage in Boulder City to accommodate many amenities, and not only will a spouse house be considered, but also a daycare center for employees and a daycare center for adults. He said the site will mix three generations and provide many features to benefit veterans and mold the home into a veterans center.

Mr. Abbott offered support for the proposal but voiced concerns. He stated the immediate focus should be to construct the Veterans’ Home. He said the bids were opened last month, and those bids and the remaining documentation were sent to the federal Department of Veterans’ Affairs for a final review regarding the grant for the Veterans’ Home. He related he was informed the grant should be awarded by the middle of May. He said the bids came in within the approved range.

Senator Raggio inquired whether there is any concern regarding the cost of operation. Mr. Abbott replied the operating cost for the year 2000 will be addressed during the legislative session as part of the office’s operating budget. Senator Raggio expressed concern that operating costs were underestimated. Mr. Abbott responded most of the issues have been resolved with the Legislative Counsel Bureau (LCB) and the Budget Division.

Senator Raggio asked how much a furnished four-bedroom home for spouses might cost. Mr. Daniel answered the cost is estimated at only $125,000 because the construction will include the use of volunteer labor.

Senator Raggio suggested the most the Legislature could do would be to authorize the receipt of funding for the home without committing any state funds to the project. He said the bill cannot be passed with a mandate included. Mr. Daniel agreed that would be the best resolution. Mr. Abbott interjected the request for the bill was to provide authority, not funding.

Senator Raggio asked whether any federal funds are available. Mr. Abbott answered there are none of which he is aware. He added funds to be used for the construction of the veterans home cannot be used for the spouse house.

Senator Jacobsen commented the matter has not been discussed by the Veterans’ Home Commission, which he chairs. He noted the main consideration is the construction of the home, but he agreed the spouse house will be a welcome adjunct.

Senator Raggio asked whether consideration has been given to contracting out the operation of the Veterans’ Home. Senator Jacobsen said the matter has been discussed briefly, and information has been solicited from other states. He noted the initial desire was to keep the operation in-house in order to maintain control of changes.

Daryl Mobley, State Commander, Veterans of Foreign Wars, confirmed there should be no fiscal impact to the state for the spouse house. He testified the project has moved forward on the premise the Veterans’ Home will be built first, and then a spouse house will be considered. He agreed local veterans should maintain complete control of the Veterans’ Home and it should not be turned over to a contractor. He asserted it will be less expensive to operate if local veterans run the operation, and quality control will be assured.

There being no further testimony on the matter, Senator Raggio closed the hearing on S.B. 261 and opened the hearing on Senate Bill 368.

Senator Lawrence E. Jacobsen, Western Nevada Senatorial District, testified in favor of S.B. 368. He recalled times when the Legislature supplied Carson City with equipment in lieu of taxes. He asserted the state has been the beneficiary of services offered by Carson City. He noted many firemen have trained in Carson City, and the city supplied a sprinkling system at the prison through use of effluents, at no cost to the state.

Senator Jacobsen recognized there may not be a great deal of new construction for the state in Carson City. He noted S.B. 368 will not take effect until July 1, 2001. He reiterated the state should take responsibility for many efforts supplied by Carson City, and it is only reasonable for the state to pay for sewer connections.

Assemblywoman Bonnie L. Parnell, Assembly District No. 40, added her endorsement of S.B. 368. She stated the bill will amend the statutes to authorize the state to pay sewer connection fees for new connections to Carson City’s sewer system for state-owned buildings after July 1, 2001. She pointed out the state currently does not pay hookup fees as a result of an agreement made in 1960. At that time Carson City agreed to waive charges in return for state lands and $135,000 in cash.

According to Ms. Parnell, since 1990 Carson City has waived $478,000 in fees for various projects, including the new Nevada State Library and Archives building, the Supreme Court building, expansion of Western Nevada Community College (WNCC) and the new daycare center there, and the expansion of the women’s prison. She said the Capitol Complex Master Plan calls for several additional buildings, and officials estimate that approximately $2.7 million in fees payable to Carson City has been waived since the 1960 agreement. She declared, "It is time for the state to help pay the cost of sewer hookups, like any other user." Ms. Parnell averred S.B. 368 will accomplish a measure of equity.

Ray Masayko, Mayor, Carson City, added his support for S.B. 368. He stated the bill will assure equity to the citizens in the use of the sewer system after the year 2001. He noted a great amount of capital investment has been put into the system and will continue to be put into the system. He explained the method to recover capital investment is through charging for connections, and if one class of customer is not charged, costs are shifted to another class of customer.

Eric Raecke, Manager, State Public Works Board, reported the board does not oppose the bill. He noted the city is exempt from impact fees by the state, as are all state and political subdivisions. He reported the attorney general handed down an opinion that the sewer connection fee is not an impact fee, and the fees are paid in every other city throughout the state except Carson City. He estimated the cost to Carson City has been approximately $1.5 million over the years.

Senator Raggio asked whether the state is exempt from any other normal fees in Carson City. Mr. Raecke said no and indicated the state pays the normal monthly fee for sewer service. He pointed out the state does not pay property taxes anywhere in the state.

Senator Raggio reiterated that when the agreement was reached in 1960 the state turned over a considerable amount of land and a cash payment in return for exempting the state from payment of such fees in perpetuity. He wanted to know whether S.B. 368 represents an abrogation of that agreement. Mr. Raecke concurred with the senator’s comment. He indicated the cash payment was $135,000, and 127.7 acres at the city sewer plant and the corporate yard at the end of Fifth Street were transferred to the city.

Mr. Raecke reported the State Public Works Board told Carson City it would not oppose S.B. 368. In response to a question from Senator Raggio, Mr. Raecke said the cost to connect to the sewer would run between $30,000 and $35,000 for a structure similar to the Cedar Building at WNCC. A new prison, he said, would cost a great deal more due to the head count and the bed count, up to perhaps $150,000 for a large structure. He noted the campus is fairly well built up, with perhaps another 6 to 8 buildings to be constructed over the next 20 to 30 years.

John Berkich, City Manager’s Office, Carson City, spoke from written testimony (Exhibit C) and pointed out the many projects that have been built in partnership between the city and the state. He noted the growth of state government has placed demands upon the local infrastructure. He drew attention to a display before the committee depicting the original agreement between the city and state.

Mr. Berkich noted the original agreement not only provided $135,000 and 127 acres of land, but also authorized the issuance of $336,000 in Carson City general obligation bonds to defray part of the construction cost of the sewer plant. He repeated Mr. Masayko’s warning regarding the financial impact upon other users if the city continues to waive connection fees for the state.

Noting the original plant was moved in 1980, Mr. Masayko reported the city is constructing $6 million in improvements. He pointed to a chart showing that 80 percent of the land originally donated by the state is in a flood plain and only a small portion is usable.

Mr. Masayko displayed a ledger comparing values of the property and cash given to Carson City according to the 1959 agreement, which showed the state contributed the equivalent of $950,000 in cash and $600,000 in land value. Since that time the city has waived fees for the state equivalent to $7.6 million for connection fees and is providing $11 million in plant capacity for the state’s use. He pointed out other construction has picked up the costs for new and expanded wastewater treatment facilities.

Mr. Masayko noted Carson City currently has $75 million invested in the system, and another $34 million will be needed by the time the city is built out. Build-out is anticipated to occur by the year 2015. The city’s goal is to retire all debt by that time. Unless the state pays connection fees, he asserted, all other customers will, in effect, subsidize the state.

Larry M. Osborne, Executive Vice President, Carson City Area Chamber of Commerce, testified in favor of S.B. 368 on behalf of the over 1,000 local business, manufacturing and professional firms represented by the chamber. While acknowledging the benefit to the city derived from state government, he agreed the bill will offset some of the deficiencies paid by local residents because of the waiver.

Gayle L. Farley, Builders Association of Western Nevada, offered support for S.B. 368. She said members of the association, which has been in existence for over 25 years, have been required to pay millions of dollars over the years in order to build homes for the citizens of Carson City, and they agree the waiver of state connection fees has become inequitable.

Senator Neal asked whether the payment of fees by the state will result in some relief of indebtedness for the citizens of Carson City. Ms. Farley responded all citizens must pay for water and sewer connection fees and the association asks that the state do the same. Mr. Osborne interjected the city has planned for major expansion of the facilities, and without consideration from the state, the rates will have to be assessed against those using the service.

Senator Raggio noted that according to the original agreement the state did not pay user fees, but later the state agreed to pay monthly service fees. He stated the connection fees will not become payable until after July 1, 2001, under S.B. 368. He pointed out any connection fees paid by the state in the future will alleviate the amount otherwise required to pay for future expansion of the facilities.

Pete Bachstadt, Citizen, came forward to oppose S.B. 368, asserting he could rebut a significant amount of what had already been stated. He read a prepared statement (Exhibit D), objecting to the bill as an "apparent . . . attempt to force the public to pay yet a third time for a sewer utility that is already in place, functioning, and has been paid for once, and in some cases, twice."

Mr. Bachstadt claimed the public utility department of the city is a fourth branch of government over which the public has no control. He characterized the fees for hookups to utilities as "tribute" and opined "the fourth branch of government is more concerned with maintaining itself than with providing services to the public."

Mr. Bachstadt objected to a "mandate" that citizens of certain areas of the city connect to the sewer by January 31, 1999.

Senator Raggio asked whether Mr. Bachstadt opposed all hookup fees, or just hookup fees for state projects. Mr. Bachstadt replied, "No, sir, I don’t think they’re constitutional. I think that the property doesn’t create nitrates, people do." He declared the utility system in Carson City should not pay any utility hookup fees to anyone. Senator Raggio pointed out the bill addresses future construction of state buildings. Mr. Bachstadt responded, "Same thing."

Scott Sisco, Administrative Services Office, Department of Museums, Library and Arts, noted a bill was passed during the 1995 Legislature to appropriate $2.5 million for the development of the Nevada State Railroad Museum in Boulder City through June 30, 1999.

Mr. Sisco stated that over the past 3 years the department has worked with federal, state, county, city, and local groups interested in developing the museum. He said the groups selected the best possible route for the extension of the railroad track, and as a result a 2.5-mile closed-loop track was adopted, and the department recently obtained additional rights of way and land transfers from the U.S. Bureau of Reclamation.

During the same period, Mr. Sisco said, the department was required to complete an environmental assessment study which was conducted and written by the Harry Reid Center at the University of Nevada, Las Vegas (UNLV), and a $69,300 fee was assessed by the U.S. Fish and Wildlife Service for the Desert Tortoise Conservation Fund. Also, an engineering firm was hired to deal with engineering and design for the project.

Mr. Sisco related the department was ready to proceed with roadbed development by the summer of 1998, but by that time the state was experiencing a budget shortfall. A funding request for $1.3 million was proposed for the department’s budget for Fiscal Year (FY) 2000-01 by the former administrator to be used as an enhancement to lay track, but it was pointed out the roadbed work could deteriorate if funding was not approved to lay the track. He said the $2.1 million remaining to be used was included in reversion requirements, and the department prepared alternatives to allow the project to continue without the use of the $1.3 million should it not be approved.

Mr. Sisco explained S.B. 308 is a compromise to provide for $562,246 to fund the project through this biennium. Development will concentrate on the passenger facilities, the coach refurbishment, and some limited track crossover work, and those projects are included in the General Fund request for FY 1999 under onetime appropriations on budget page INTRO-36. He stated the department would appreciate quick passage of the measure since it will become effective at that time and projects are ready to proceed.

Peter L. Bandurraga, Acting Administrator, Division of Museums and History, Department of Museums, Library and Arts, passed out a cost-information sheet on S.B. 308 (Exhibit E) and explained the requested funds are really not new, since at one time they were appropriated and then reverted. He pointed out the division is requesting a return of only a small portion of the funds in order to establish an historical railroad attraction within the next 2 years. He stated there currently is a maintenance facility in Boulder City and about 4 miles of track, and there is rolling stock in need of extensive restoration work.

Mr. Bandurraga noted the appropriation should provide for a cosmetic restoration of two engines and two open-air cars and for construction of a depot. He said the depot will not only serve the public, but it will also encompass a small interpretive area where discussions on railroad history, the creation of Boulder Dam, and the environment of southern Nevada can be presented. He said the train ride will provide an educational tool dealing with the ecosystems and history of the area.

Mr. Bandurraga acknowledged the tracks need some work because there is no way to cross back and forth in order to switch engines. Additionally, he said, supplies are needed to get the project running.

Senator Jacobsen commented there may be abandoned passenger facilities within the state that could be moved by inmate crews. Mr. Bandurraga responded the division would first have to acquire the buildings and then restore them and bring them up to code on the site. He said he was unsure whether the cost would be significantly different from the cost to build a new structure.

Senator Jacobsen suggested using inmate crews to help lay track. He also proposed including the community in the project. Mr. Bandurraga pointed out the community has already been deeply involved in the entire project in both Henderson and Boulder City. Senator Jacobsen noted a large building at the airport may be available to store equipment. Mr. Bandurraga agreed to look into the matter.

Senator Neal inquired where the rolling stock is located. Mr. Bandurraga replied the stock is on site on the north side of the intersection where the road "splits" to go one way to Boulder City and another way to the dam. He estimated there are approximately 20 pieces of rolling stock on track owned by the state. He said there are currently 4 miles of existing track from that site back toward Railroad Pass on the way to Henderson. The acquisition of rights of way should provide another 4 to 5 miles of track, he said.

Senator Coffin asked how much it might cost to move the original station back from Henderson, and whether the city would be willing to give up title to the building. Mr. Bandurraga replied no, because the building is an integral part of the Clark County Heritage Museum and is used for meetings and exhibitions. Senator Coffin suggested it could be less expensive to move the old building rather than construct a replica. Mr. Bandurraga explained the primary mission of that museum is to collect older buildings, and the station is the centerpiece of a collection of 20 or 30 buildings.

Senator Jacobsen remarked the funding for a railroad in Carson City was deleted from The Executive Budget, and it is possible the Governor might veto funding for the southern Nevada railroad. Senator Raggio clarified the funding for the Boulder City railroad is a portion of funding appropriated in 1997 from which $2.5 million was reverted. The compromise in the bill is included in the Governor’s budget in the amount of $562,000.

There being no further testimony on S.B. 308, Senator Raggio closed the hearing on the matter and opened the hearing on Senate Bill 350.

Senator Jon C. Porter, Sr., Clark County Senatorial District No. 1, distributed a report on the physical facilities of the Lincoln County School District (Exhibit F.) and explained S.B. 350 will establish a fund to assist the smallest and most rural of the 17 school districts in the state. He said the fund will provide for major repair and maintenance work on those schools which pose a demonstrable threat to the safety of the students.

Senator Porter pointed out many of those districts are unable to finance such repairs, and a choice must be made whether to allocate available funds to safety or to educational services. He noted some districts experience infrequent windfalls due to the inherent volatility of industries within their boundaries, but most, and often all, districts have significant difficulty in providing the costs of a quality education while ensuring the safety of students and school facilities.

Senator Porter stated S.B. 350 addresses the matter of safety. He said the fund will provide assistance to those districts which demonstrate a financial need when other resources have been exhausted. He explained the bill will provide a yearly funding source in three 4-year cycles with the funding to be distributed on a rotating basis to eligible districts, and it will become a matching source.

Citing the provisions of the bill, Senator Porter noted it addresses common elements among small districts, such as a minimal tax base from which to draw revenue, a lack of alternative capital funding sources, and an average age of 65 years for school facilities that have been identified as having a useful life of 50 years. He said it addresses identified needs of over $9.7 million for existing facilities, estimated capital repairs over $37 million, and the need for immediate safety repair and long-term financial planning for repair and maintenance.

According to Senator Porter, the accumulated total of the fund amounts to approximately 31 percent of the identified needs in rural communities, and the fund is not meant to be a giveaway.

Senator Porter said there is an amendment proposed by the Nevada Rural Alliance to delete lines 1 through 11 on page 4 in keeping with the intent to focus on student safety.

Senator Mike McGinness, Central Nevada Senatorial District, said five of the eight counties he represents are at their tax cap with no possibility of obtaining funding for schools. He said just 3 percent of the land in Lincoln County is owned by private entities, making it impossible for them to raise many funds even through a bond issue.

Senator McGinness asserted rural Nevada is in crisis, with 100-year-old buildings that cannot keep pace with growth and technology, most of which are faced with an abundance of costly repairs. He acknowledged the problem is not unique to Nevada, and nearly every session of Congress has legislation designed to alleviate the problem, including a half-dozen bills in the current Congress. He said 13 states fund school buildings, in 18 they are funded locally, and in 19 the responsibilities are shared. He suggested S.B. 350 will provide one step in the process for Nevada.

Senator Porter gave a brief overview of the bill, noting that it creates a fund similar to the preservation fund for the Commission for Cultural Affairs established 4 years ago. He said the bill provides for $1 million in general obligation bonds for a total of 12 years, and it is specific as to which districts qualify. He indicated there are 8 school districts with student populations under 2,100 which are addressed by the bill.

Senator Raggio reviewed the provisions and pointed out the bill will apply to Esmeralda, Eureka, Lander, Lincoln, Mineral, Pershing, Storey, and White Pine Counties. He said the bill will authorize the issuance of general obligation bonds to generate $1 million each year for a period of 12 years, and it will be limited to districts with enrollments under 2,100. He cited other provisions contained in the bill and noted the funds cannot be used for new construction, but the funds can be used for repair, maintenance, and improvements necessary to comply with state and federal laws and regulations. He asked whether there is a matching fund requirement.

Senator Porter commented the proposed amendment will preclude use of the funds for other than repairs and maintenance. The amendment will remove section 8, subsection 3 (b) through (f), and thus take away the ability to use funds for such things as professional development, special education, and contracts for technology support or other professional assistance. Senator Raggio interjected the proposed amendment will remove lines 1 through 12 on page 4.

Senator Porter indicated the next section provides three cycles of payment periods when school districts may apply for funds, once every 4 years. He explained school districts with under 600 students could apply for up to $300,000 for the first 4-year cycle, an amount equal to 100 percent of the total cost of a project. In the second and third cycles the district could only apply for 80 percent of its need up to $300,000, which then would require a 20 percent match. He noted Esmeralda, Eureka, and Storey County school districts could apply for $300,000 during each cycle for a total of $900,000 to be used as a match over 12 years.

Senator Porter listed Lincoln, Lander, and Mineral Counties as those having school districts containing 601 to 1,300 students that can apply for $500,000 each cycle, to a maximum of $1.5 million. He said the next level provides for school districts with enrollments from 1,301 to 2,100, affecting White Pine and Pershing Counties, which could apply for up to $700,000 each cycle for a maximum of $2.1 million. He reiterated the districts would have to show the ability to match 20 percent of the grant during the second and third cycles.

Randy C. Robison, Lobbyist, Lincoln County School District, reiterated S.B. 350 addresses the issue of safety and focuses on immediate needs. He noted the cumulative amount of the Rural Education Fund is $12 million, which will provide for 31 percent of identified needs according to the ISES Corporation. He said the ISES Corporation was employed by the state to survey new construction, design, maintenance, and school facility needs for the state.

Senator Raggio asked whether any of the school districts entitled under S.B. 350 have indicated the funding will be adequate to meet their needs, and specifically how the bill will address the needs of Lincoln County. Mr. Robison referred the question to Vaughn M. Higbee, Superintendent, Lincoln County School District

Mr. Higbee declared the fund will be of tremendous help to Lincoln County. He reported the county has many facilities that are very old, including the Pioche Elementary School which is 94 years old, the Caliente Elementary School which is 86 years old, and the Lincoln County High School which is 48 years old and has an attached auditorium and an attached gymnasium that are 70 years old. He listed several other old schools aged 52, 40, and 19 years, and two that are relatively new. He said the schools would fall under the 600-to-1,300-student category and the district would be eligible for $500,000 each year.

Senator Raggio asked whether that would be sufficient to meet the basic needs for repair, maintenance, and improvements. Mr. Higbee responded it was originally felt that would be sufficient to make the buildings safe, but after the district employed an engineering firm to survey the two oldest structures, it was found the auditorium and gymnasium at Lincoln County High School and the gymnasium at Pioche Elementary School are no longer usable. He said the engineering firm estimated the cost to reconstruct the buildings would be greater than the cost of new facilities. He stated the funding to be derived from S.B. 350 should be adequate when added to Lincoln County’s own funds.

Mr. Robison gave the senators a report (Exhibit G) prepared by the ISES Corporation showing, in the first column, the existing immediate deferred maintenance needs as estimated by the county; in the second column, a 10-year capital renewal and replacement estimate as reported by the districts; and in the third column, the combined total of the first two columns. He explained the fourth column depicts the total amount for which a school would be eligible pursuant to the Rural Education Fund. Mr. Robison explained the figures in parentheses at the bottom of the page represent an estimate of cost per student.

Senator Rawson inquired whether the funds from the bill can be used as part of the estimated $18 million needed to replace the Lincoln County High School. Mr. Robison responded there are two issues needing resolution. He said the Rural Education Fund would continue to be applicable to Lincoln County and other rural districts. However, he said, it would not address the concerns and conclusions made by the engineering fund about the particular buildings cited.

Senator Rawson asked what could be funded under S.B. 350 and how much funding is needed to resolve the safety problems at those schools. Mr. Robison responded the engineering firm classified three buildings as uninhabitable and beyond significant repair. He said a conservative estimate to replace the high school in Panaca and the elementary school in Pioche is between $18 million and $20 million. He noted the Rural Education Fund as drafted will not allow for new construction. He confirmed Senator Rawson’s estimate that $5 million from the fund could be utilized by Lincoln County.

Senator Rawson asked whether Lincoln County has reached its tax cap. Mr. Higbee replied it has. He added that in order to finance the garbage disposal system required by the federal government, Lincoln County had to take the tax to its cap, leaving no room for additional bonding.

Senator Raggio inquired what is available from the Rural Education Fund and for what purposes for Lincoln County. Mr. Robison responded that as drafted, the Rural Education Fund can only be used for major repairs and maintenance for student safety and it cannot be used for new construction. He said $500,000 would be available from the fund to Lincoln County in each of three cycles for a total of $1.5 million. He indicated no other funding sources appear to be available.

Senator Coffin commented the Senate Committee on Taxation is wrestling with the problem, and several members are in favor of allowing the tax to rise to the 1981 constitutional maximum if the counties are able to do so. He called the $3.64 rate "artificially low."

Senator Porter stated there are several counties facing serious challenges, but S.B. 350 addresses only the smallest with the worst problems. He agreed the other counties’ problems need to be addressed. He said there was concern over jeopardizing the Distributive School Account (DSA) funding. He opined that though S.B. 350 will not fund new schools, Mr. Higbee took the right course by expending a substantial amount to employ professional assistance rather than make a self-assessment. He suggested every school district should have a professional analysis of needs. Senator Porter noted there is a serious life-safety issue in Lincoln County and it is possible there are serious problems in other counties that need to be considered.

Senator Neal asked who will pay off the bonds. Senator Porter answered the bill provides for general obligation bonding with funding being determined by the Legislative Committee on Education, which would establish the criteria.

Senator Neal asked why the standing committee is needed to administer the program. Senator Porter responded the committee was chosen because it was already in existence and there would be no necessity to establish another layer of bureaucracy. He acknowledged other suggestions would be welcome.

Senator Neal wondered whether any legislation is pending for state funding for schools. Mr. Robison responded Assembly Bill 597 will create a state fund to assist capital projects for school districts.

Mr. Robison said the fund has no funding source attached to it at present, but it can receive gifts, grants or donations. He indicated there is no ongoing revenue stream. He explained the fund in S.B. 350 has a revenue source attached to it.

Senator Neal recalled the federal budget proposed by the President had a fund included for the rehabilitation of schools. Mr. Robison replied that is correct, but at present the legislation provides only funds to pay the interest on bonds for new school construction or rehabilitation of existing facilities. He reported U.S. Senator Harry Reid stated the fund would provide $78 million to Nevada, but those funds will not be applicable to a county that has already reached its bonding cap.

Senator Neal wanted to know whether it would be advisable to raise the cap. Mr. Higbee responded if the cap were lifted it would be of some help to Lincoln County, but because of the lack of ability to raise the property tax it would not be of great help. He explained a raise in the cap could be used only for a small match to state funds. He said there are two bonds in place being paid off now, one of which will expire in 2004, and the county hopes to be able to carry it on to help match some funds.

Noting the appearance of population loss there, Senator Neal asked what kind of growth Lincoln County is experiencing. Mr. Higbee responded growth is very small, just 1 or 2 percent each year, and most of those are senior citizens. He said the student population will level out next year at approximately 1,000 students.

Senator Raggio asked how much a 1-cent raise in the cap in Lincoln County would bring in. Mr. Higbee replied it would not cover enough to build two schools and it would be impossible for property owners to raise the necessary funds.

Senator Coffin argued the large counties will eventually pay the interest on the bonds for the small counties. He asserted there should be an effort by the small counties to raise those funds themselves. He declared there must be a political will to support a raise in the cap and the taxes necessary to fund new schools. He averred the county should support a raise in taxes between 50 cents and $1, not just a few cents. He insisted there is nothing more important than children.

Mr. Higbee clarified the county desires to make every possible effort to assist in paying its fair share, and the voters and county commissioners will be asked to contribute. He stated that in the past Lincoln County voters have passed bonds when asked, and during the past 5 years buildings have been constructed using honor camp labor and district employees because that was the only way to get the work done. He said it is against his nature to ask outsiders for help, and Lincoln County will do everything in its power to pay its fair share.

Senator Coffin suggested Mr. Higbee report to the chairman of the Senate Committee on Taxation regarding the intentions of Lincoln County citizens.

Senator Raggio agreed the discussion should be held before the Senate Committee on Taxation, but he acknowledged the Legislature helped create the situation when it established by law that each county would comprise its own school district. That effectively set the parameters as to the capability of any district to fund the operation and construction of schools, he said. He suggested the present dilemma can be attributed to a growing body of law which will mandate that a state is responsible in some measure for seeing to it that its schools are equitably funded for construction of adequate and safe facilities.

Senator Raggio voiced concern that someday Nevada will be challenged by a federal court regarding whether it is in compliance with those mandates. He noted the state has met that challenge in the past. He suggested there may be a future mandate for Nevada to reconstruct school districts in order to provide fair and adequate revenue to achieve the same level of construction across the state. He pointed out when that happens, all the citizens of the state will contribute part of the cost of construction of schools in the smaller counties. He reiterated the problem is not one that will be easily met, and S.B. 350 may be of some help although it may not meet the immediate needs of Lincoln County.

Senator Jacobsen asked how the public safety building in Pioche was funded, and whether it is being utilized. Mr. Higbee voiced his understanding the county prepared the ground for the building, and the other funding came from a private source which built the facility. He said the building is not being utilized at present. He said if it were not for honor camp crews, Lincoln County would have difficulty keeping up with the necessary maintenance. He declared, "The honor camp crews have been a lifesaver to us." He said they also have participated in new construction, and they provided skilled workers to assist in building classrooms.

Senator O’Donnell asked whether any of the federal funding being provided for the study of Yucca Mountain could be used for schools. Mr. Higbee opined there is nothing that precludes use of those funds for schools, but that was not a priority of the Lincoln County committee charged with the distribution of the oversight funds. He admitted he had no knowledge regarding any restrictions on the use of those funds. He noted the committee was asked for assistance in construction and the committee members did not feel it was part of their mission. Senator O’Donnell requested that a list of the priorities of the study committee be provided.

Senator Raggio noted if the bill is processed, it will add to the rate that will be required to be levied by the state for debt service.

Henry Etchemendy, Lobbyist, Nevada Association of School Boards, endorsed the bill. He agreed Lincoln County needs the assistance for reconstruction and modernization.

Don Hataway, Deputy Director, Budget Division, Department of Administration, said the state has a fiduciary responsibility to be as fiscally prudent as possible regarding the use of bonds, and in the past the bond rating bureau has taken a dim view of using bonds for operation and maintenance activities. He stated the administration would support an amendment to remove lines 1 through 12 on page 4 of the bill.

Mr. Hataway explained payment would be similar to that for the cultural resource bonds or others issued as a general obligation of the state, and initially the 15-cent tax rate would be utilized for bond interest and redemption in budget account 395-1082. He said the full faith and credit of the state is pledged for those bonds, and in the event that source of revenue is not available, the General Fund would bear the responsibility to retire the bonds.

Senator Raggio asked how much the bill would increase the rate. Mr. Hataway replied the state policy is to issue no bonds that would bring the rate to more than 15 cents. He said if the measure is passed the reserves of that budget account would have to be accessed. He said the reserves are probably sufficient at this state to accommodate $1 million, the same as for the cultural resource bonds, the Tahoe bonds, and the general obligation bonds for capital improvement programs (CIPs). He pointed out S.B. 350 would be a small part of that reserve and would not necessitate adding to the 15-cent rate. Should the rate have to be increased, it would become a policy issue for the Legislature and the Executive Branch whether to raise the property tax or to use the General Fund.

Senator Raggio noted the bill would provide funds for 12 years. Mr. Hataway said the cultural resource bonds provide $20 million over a 10-year period.

There being no further testimony on the matter, Senator Raggio closed the hearing on Senate Bill 350 and opened the hearing on Senate Bill 298.

C. Joseph Guild, Lobbyist, Nevada Humanities Committee, testified in favor of S.B. 298. He said in 1998 the Legislature completed a study on Nevada’s cultural resources and has been involved with the Nevada Humanities Committee since that time. He said the report recommended an annual appropriation of $50,000 for support, and since that time there has been a separate line item in the budget for the Nevada Arts Council for $9,000 to $10,000 each year. In 1997, he said, a bill was introduced to open an office for the Nevada Humanities Committee in southern Nevada, and another bill was passed to appropriate $135,000 to establish that office.

Mr. Guild drew attention to a number of young people in the audience involved in the Nevada Humanities Committee’s activities, including some from the Job Corps. He said some of the students reside in Las Vegas. He provided a packet of materials including a budget and financial statement (Exhibit H) showing the activities of the committee and the budget for the chautauqua sponsored by the southern Nevada office. Additionally, he provided remarks prepared by Judith Winzler (Exhibit I), the executive director of the committee, and two pages of documentation demonstrating support of humanities committees in other states (Exhibit J) ranging from $26,000 to $1,700,000.

Mr. Guild stressed the importance of the funding provided by the state last session which was used for successful programs in southern Nevada. He reported the committee hired Douglas Mischler, who has a Ph.D. in history, as coordinator, and office space was obtained at the University of Nevada, Las Vegas (UNLV). He said a chautauqua was presented from June 22 through June 25 last year, and there were many presentations made to the community during various forums and at schools. He said the community, including many southern Nevada businesses, offered wide support, and the second Las Vegas chautauqua is planned for June 7 through June 10 this year with a $10,000 grant from the Red Rock Foundation.

Mr. Guild stated young student workshops were held, as were history day competitions which will culminate in trips to Washington, D.C. A program called Nevada for Newcomers was established to reach out to teachers and others new to southern Nevada. The program provided a bus tour to various historical sites in the area. Also, Mr. Guild said, the office reviewed many grant proposals. He asserted that without continued state help the momentum of the last 2 years may be halted and the southern Nevada office may have to close.

According to Mr. Guild, it is imperative for Las Vegas, the fastest-growing community in the nation, to have such programs to "help recognize the unique and important history of southern Nevada." He commended the Nevada Humanities Committee. He pointed out the focus in the past has been upon northern Nevada and the rural areas, but he asserted southern Nevada has a unique history and the office provides a way to "cement that."

Jack Harvey, Member, Board of Directors, Nevada Humanities Committee, indicated he has enjoyed being a member of the committee for 5 years, acting as a business consultant and calling upon his experience over 40 years in four large, diversified corporations. He described the committee as one making a small but significant contribution to the education of communities and students at all levels. He said a very small sum affords the opportunity to provide many programs and to supplement activities.

Mr. Harvey said his experience as a businessman indicates "the real problems in life are not technical, not technology. . . .the real problems revolve around human beings, and the more you know about history and literature, the better you are in facing those problems." He asserted the Nevada Humanities Committee affects many people in many ways.

Rollan Melton, Columnist, Reno Gazette-Journal, stated he has been an admirer of the Nevada Humanities Committee since its formation in 1972. He said as a columnist for the past 21 years he has written scores of essays about the committee and "its meritorious and multiplying achievements statewide." He noted his wife is a senior trustee of the committee and has been a member for 19 years.

Mr. Melton stated he has been so impressed with the mission, results, and efficiency of the committee that in his role as a trustee of a highly regarded foundation he has been instrumental in obtaining a number of grants for the Nevada Humanities Committee. He said he has monitored the expenditure of those grant funds, and he has been very satisfied. He declared there has been no evident waste or misuse of funds or people. He voiced approval of the expansion of the committee in Las Vegas.

Mr. Melton reported The Donner Chronicles was published in 1997 under the aegis of the humanities committee, which he asserted has been the most authoritative and accurate representation of the Donner tragedy. He said 9,000 books were published, many of which were distributed to Nevada schools, and the book is presently in its second printing.

Mr. Melton observed the statewide speakers’ bureau has brought scholars to all parts of Nevada in chautauqua and other roles, and he singled out the Great Basin Chautauqua program, which is in its eighth year, as particularly effective.

Mr. Melton introduced four youngsters from the Sierra Nevada Job Corps Center: Joshua Reno, Tiffany Wright, Cindy Smith and Heath Hocken. Mr. Melton noted the four were statewide winners of a history day competition and they will travel to Washington, D.C., in May to compete for honors against teams from the other 49 states. He added three young chautauquans, Sarah Ferguson, Mara Bosey, and Adam Anderson, will give a presentation to a national humanities conference in Washington on May 7. He said this is the first time students have been invited to appear in a national humanities framework.

Mr. Melton introduced three costumed youngsters who appeared before the committee to make chautauqua presentations. The first was Nathaniel Phelps, Young Chautauquan, Sun Valley, who acted the part of Samuel Colt. Mr. Phelps said this was the third year he had portrayed Samuel Colt, and he had portrayed Louis Pasteur prior to that. He asserted the program has helped him not only socially, but also in his education. He said his studying skills have been greatly enhanced from doing research on the characters he has portrayed, and his presentations have helped him hone his public speaking skills. He added his portrayals have provided historical information to those for whom he has given programs.

Rebecca Phelps, Young Chautauquan, Sun Valley, a fifth-grader, told the committee she was appearing as Amy Sullivan, and last year she portrayed Annie Oakley. She said she has enjoyed going to elementary and middle schools to perform and introduce them to Young Chautauqua. She gave a brief presentation in the role of her character.

The third performer was seventh-grader Tasha deLeon, Young Chautauquan, Reno, who said she had been active in the program for 3 years. She acted in the role of artist Georgia O’Keefe. She stated the program has helped her in social studies, history and English and has given her an opportunity to practice public speaking. She pointed out good grammar is necessary to accurately portray the characters, most of whom were intelligent people.

Senator Raggio commended the youngsters for their involvement in the program. Mr. Melton introduced Joe Galata, AODA (Alcohol or Drug Abuse) Specialist, Sierra Nevada Job Corps Center. Mr. Galata said he has worked with the Job Corps program for 17 years and has worked with over 18,000 young adults. He stated the students come from every city and town in the state, and the Nevada Humanities Committee has provided them with opportunities unavailable from any other source. He explained the youngsters with whom he works are culturally and economically disadvantaged and have not had exposure to history and the arts, and that is provided through the Nevada Humanities Committee program.

Mr. Galata said that last year the Sierra Nevada Job Corps Center was the first of the 118 job corps in the United States to offer a State History Day program. The students researched, wrote, directed, and produced video stage plays, papers, and projects, and competed successfully in Washington, D.C., against all the other states. He noted some of the projects cost $10,000, whereas the project presented by the Sierra Nevada Job Corps Center cost approximately $80 with the assistance of the Nevada Humanities Committee. He reported all five of the students who went to Washington, D.C., last year are now in college. He asserted the program provides "a tremendous boost to their self-esteem and to their educational level."

Mr. Galata noted there are two other students who were unable to appear who competed in the State History Day competition and will also go to Washington, D.C., in June.

Senator Alice Costandina Titus, Clark County Senatorial District No. 7, drew attention to a packet of articles (Exhibit K. Original is on file in the Research Library.) from the Las Vegas Sun focusing on chautauqua and the newcomers tour. She declared the presentation from the students was the best possible argument in favor of S.B. 298. Senator Titus presented committee members with copies of The Young Chautauqua Handbook (Exhibit L. Original is on file in the Research Library.) and a book published by the Nevada Humanities Committee, Community in the American West (Exhibit M. Original is on file in the Research Library.).

Senator Raggio asked what funding is provided to the Nevada Humanities Committee in addition to that provided by the state. Judith Winzler, Executive Director, Nevada Humanities Committee, responded federal legislation started the program and base support comes from the National Endowment for the Humanities (NEH). She said that at one time the endowment provided nearly all the funding, although it was originally intended as a matching grant from NEH. She said the grant is usually matched on a 3-to-1 basis with in-kind services and support. Now, she said, federal funds comprise approximately 65 percent of the budget, and the committee has been successful in raising funds for projects. She noted it is difficult to raise administrative funds from private donors, foundations, and corporations.

Senator Raggio asked whether the budget applies only to the southern office. Ms. Winzler replied that was correct, and the total budget is $550,000. Senator Raggio asked to be provided a copy of the overall budget, including other sources of funding.

There was no further testimony on S.B. 298. Senator Raggio opened the hearing on Senate Bill 378.

Senator Porter returned to testify in favor of S.B. 378. He explained this bill came about as a result of an incident in Boulder City wherein a swarm of Africanized honey bees was found in a park where an art festival was being held. He said close to 60,000 people attend the festival, and it was fortunate the swarm was discovered early in the morning. He noted the Africanized bees are established in Clark County, and they are very dangerous.

Senator Porter surmised Africanized honey bees may become a part of the ecosystem in Las Vegas, and it will be essential to educate the public concerning their behavior. He said numerous colonies and swarms have been removed from residential areas all over Clark County, including Las Vegas, Henderson and Pahrump, not just Boulder City.

Senator Porter stated fire ants discovered in Nevada were traced to California nursery stock suppliers, and as a result 21 nurseries and over 80 square miles in southern California have been quarantined for imported fire ants. He said Arizona and California have increased their border inspection programs, and the Nevada Division of Agriculture is concerned, due to the lack of border inspection stations, that plants rejected from those states may be dumped in Nevada. He added the division is also concerned over its inability to adequately inspect nursery stock entering the state. He said that because of the infestation in California, which is 5 or 6 years old, Nevada is at a higher risk of receiving stock infected with imported fire ants and there is a need for immediate response.

Senator Porter explained imported fire ants are not yet considered established in the Las Vegas area, but they are a major health threat due to their aggressive stinging behavior. He asserted a survey should be conducted to determine the extent of the infestation and to prevent emergencies and the spread of the ants. He said educating students and citizens in the Las Vegas Valley and statewide may prevent their becoming innocent victims of the fire ants.

Senator Porter said it is implied in existing law that the administrator of the Division of Agriculture has the powers of a peace officer because of his or her ability to assign agents with those powers. S.B. 378 will clarify those powers. He said he wished to address five key areas of the bill.

Senator Porter said the bill will establish a program for the eradication of fire ants and Africanized honey bees. It will provide for the treatment of the pests as other nuisance pests are treated, and it will give local governments the ability to respond. It will give peace officer status to the administrator. It will provide for the State Board of Education to establish programs for kindergarten through sixth grade. Finally, he said, "it will provide up to $10,000 for financial assistance to those districts that cannot afford to hire exterminators."

Senator Porter pointed out there are properties throughout the Las Vegas Valley with absentee owners or the residents of which cannot afford to hire exterminators. The $10,000 will help provide funds to grant to low-income people who need assistance.

Paul J. Iverson, Administrator, Division of Agriculture, Department of Business and Industry, concurred with the remarks made by Senator Porter regarding the extent of the problem with fire ants and Africanized honey bees. He noted the presence in the hearing room of Gina Stoneking, who has been hired by the division to deal with the bees and provide training in the Las Vegas area, and of Jeffrey B. Knight, the state entomologist who has been focusing on the colonies of fire ants in Clark County.

Mr. Iverson declared the state has been fortunate that there has not been a major stinging incident because of the aggressive approach taken by the division when the bees first were discovered in Nevada. He said all emergency responders have been trained, as were school district, casino, golf course, and landscaping personnel and other interest groups. He reported hundreds of people have been alerted to the potential problems at town hall meetings sponsored by Senator Jon Porter and Senator Mark James.

Mr. Iverson said there was a stinging incident a week ago on the Boulder Highway at Sunset Boulevard, as depicted in photographs he displayed (Exhibit N.). He indicated trained pest control operators responded and the fire department was able to close the roads and eliminate a major problem. He said there were many thousands of bees at the intersection. He declared S.B. 378 will provide for the ability to react immediately in certain cases. He noted there were many more bee calls last year than in any previous year, and the calls are starting again this year. He stated it is unfortunate that the bees are beginning to establish homes this year, which will make them much more aggressive.

Mr. Iverson reported he observed Ms. Stoneking, dressed in a "bee suit" (the protective garb worn by bee handlers), being attacked by bees which are kept by the division to check genetic changes. He said there were thousands of bees on her within a second and she found it necessary to walk nearly a quarter of a mile to shake off the bees.

Mr. Iverson said there have been reports of bees in areas where nobody is willing to take on liability for eradication. He said though the county has some responsibility for nuisance pests, the bill will give the division the ability to respond immediately without having to determine who will pay. He said there once were similar problems over the issue of the removal of dead horses from the road, but now there is a fund in Washoe County that can be used to remove immediately. He described situations in which citizens who do not have the funds to get rid of them have been trapped in their homes due to the presence of bees.

Mr. Iverson mentioned there is a pest control operator in southern Nevada who is a member of the State Board of Agriculture, and there is a new pest control association there. He said the division would like to enter into an agreement with them for a set fee for response. He noted there are approximately 30 companies in the Las Vegas area who deal with bees and more are moving into the area due to the presence of bees, and they could be used on a rotating basis.

Mr. Iverson repeated the importance of education regarding the situation with the bees. He acknowledged the division does not know how far north the bees may travel and it has set up trap lines in Tonopah and Hawthorne to determine how far they may move. He suggested people need to know how to deal with all bees, not just Africanized bees.

Mr. Iverson said five colonies of fire ants were found on Rancho Drive near the freeway in Las Vegas. He expressed concern and said the division normally makes 30 or 40 surveys each year but wants to increase that to 2,000 surveys each year to determine, before they become a serious problem, whether colonies are already established in the area. He reported California had no idea fire ants had invaded the state, and now there are 80 square miles in which the state will have to spend $5 million to $10 million each year for the next 5 years to get rid of them.

Mr. Iverson said there were 19 nurseries in the area 1 week ago whereas there are now 22. He said most nursery stock coming into Nevada comes from the suspect areas, and inspectors are out with emergency orders to be issued under the quarantine. He said nursery trucks coming from California will be pulled over for inspection to ensure they meet quarantine standards.

Mr. Iverson reported a training program has been implemented in southern Nevada. He distributed a pamphlet (Exhibit O) being handed out in schools and nurseries providing information about the Africanized honey bees. He also passed out a page listing workshops on the subject (Exhibit P). He reiterated the need to address the problem through education and training. He reported a bee swarm was found last week at a major golf club, and the landscaper was able to identify the bees as Africanized honey bees and successfully remove them. Referring to the photographs in Exhibit N, Mr. Iverson said one swarm weighed 40 pounds and another 25 pounds and this was cause for great concern. He said the 25-pound swarm holds about 5,000 bees.

Mr. Iverson passed out copies of a brochure (Exhibit Q) soon to be distributed in school and nurseries asking for help in identifying fire ants. He noted the brochure asks people to tape samples of the ants onto a card, identifying the location, to be returned to the division. He provided copies of maps displaying the location of fire ants (Exhibit R) and photos of ants and the result of stings they inflict (Exhibit S). He called the situation extremely serious. He explained that when the ants get on a person, the first sends out a pheromone and they all sting at one time.

Mr. Iverson passed around a bottle containing regular honey bees, a bottle with Africanized honey bees, and a bottle of fire ants, to show how difficult the identification process will be. He said a house in Boulder City was infested with 20,000 Africanized honey bees, and it was necessary to evacuate five blocks in the neighborhood while the fire department got rid of the bees. He said four pest control companies in Boulder City have agreed to do whatever is necessary to get rid of the bees. He said the first stinging death victim there was a dog, but it could have been a child.

Mr. Iverson declared S.B. 378 will allow the division to respond to emergencies. He said the budget includes two new positions addressing the problem, one to regulate pest control operators and one for nursery inspections. He said a third position for Ms. Stoneking is desirable, but it may be necessary to place her in one of the other positions. He acknowledged the division will seek approval for her present position from the Interim Finance Committee (IFC) later in the week.

Senator Raggio asked what the $10,000 in section 6 will be used for. Senator Porter replied, "It will provide assistance to families that cannot afford to hire an exterminator." He commented the area is sensitive to publicity because of its tourist economy. He commended Mr. Iverson and his staff for doing "a superior job of educating those in the resort industry" and ensuring they are properly trained.

Senator Rawson asked whether people will have difficulties because the difference between Africanized honey bees and European bees is not apparent. Mr. Iverson replied there is no difference to the naked eye, which is of great concern. He said the publicity message in Las Vegas is to view all bees as Africanized except for those being raised by beekeepers, because within a short time they all will be Africanized. He explained it is necessary to make 27 different measurements to determine whether the bees are Africanized or European.

Senator Rawson asked whether the honey from Africanized bees can be utilized. Mr. Iverson replied that the honey is the same, although the Africanized bees do not store as much honey. He said many natives in Africa raise the bees for honey. He stated the bees are aggressive because they are protective of their homes, unlike the imported fire ants. He said the fire ants like to sting.

Senator Rawson asked whether the toxin in fire ants is different from the formic acid toxin in most ants. Mr. Iverson said the histamine is different in fire ants. Jeffrey B. Knight, Entomologist, Division of Agriculture, Department of Business and Industry, explained the chemical found in the imported fire ants is an alkaloid used as a sting, and people are much more sensitive to it. He said 1 to 2 percent of the general population will exhibit a near-death reaction to the sting because it is so different from the toxin found in native ants.

Senator Raggio closed the hearing on S.B. 378 and asked the committee to consider bills that are nonexempt under the new regulations agreed upon by legislators for the current session.

Senator Raggio noted S.B. 157 was heard on March 8. He pointed out there is no appropriation included in the bill, and testimony indicated, in the language of the bill, that to the extent of legislative appropriations the clerk of the court should prescribe regulations regarding dispositions. The senator recalled a long discussion as to whether the bill should be passed without appropriations. He asked for staff comment. He recalled the court had asked to be given the authority to transmit dispositions to the central repository.

Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, said the last section of the bill allows the court administrator to institute regulations as to how court dispositions will be transmitted to the repository. He noted the bill indicates no fiscal impact because it refers to the extent funds are available. Senator Raggio opined the record should be clear, perhaps through an amendment, that the bill will not be a mandate to local court jurisdictions because no appropriation is included, but it will allow the authority to provide reports and regulations as described in section 4.

Senator Raggio noted S.B. 404 had been heard on March 29 and it authorizes continued coverage under the state’s program for group insurance without charge for a surviving spouse or surviving children. He recalled the committee discussed having an amendment on page 2 at line 1 that would read "for the duration of the surviving spouse’s life or remarriage." He remembered there had been suggestions to enlarge the bill by extending it to include a plan of group insurance or a system of medical or hospital service that has been adopted by the governing body of a county. As written, however, the bill applies only to the state health plan, which has some local participants. Senator Raggio pointed out if the bill is expanded there may be additional costs to state and local governments that are not easy to ascertain. He suggested an extension for additional purposes probably would necessitate holding the bill, which is presently considered nonexempt.

Senator Rawson asked whether counties need permission to carry out the provisions of S.B. 404. Senator Raggio commented it may be that they may not need legislative authority to include the provisions in their own plans for group insurance. He pointed out a mandate situation would come into play if the bill is amended to include group insurance plans.

Senator Rawson wondered whether the bill should use the term "peace officers" rather than "police officers." Senator Raggio responded it is his understanding the term "police officers or firemen" covers all of those within the state’s plan.

* * * * *

Senator Raggio commented S.B. 261 will probably become an exempt bill because it contains additional costs connected with maintenance, utilities, insurance, and office expenses, and other bills are being reviewed to determine whether they will be exempt. He noted S.B. 368 will be designated as exempt since it will result in fees to be paid by the state in the future. He noted some bills are being held at the request of sponsors or pending amendments.

Senator Raggio asked the committee to turn to Closing List #8 (Exhibit T.). Debbra J. King, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, came forward to discuss the budget for the Department of Motor Vehicles and Public Safety (DMV&PS).

DEPARTMENT OF MOTOR VEHICLES AND PUBLIC SAFETY

DMV, Salvage Wreckers/Body Shops – Page DMV-64 (Volume 3)

Budget Account 101-4690

Ms. King commented this account provides for licensing and regulating of salvage pools, auto wreckers, body shops, and motor vehicle garages. She pointed out it is funded through licensing fees charged to the regulated industries. She noted the staff recommends some technical adjustments, including the reduction of investigator travel and the elimination of the vehicle requested under the enhancement decision unit E-710.

Senator Raggio asked whether the positions were presently active. Ms. King replied three positions were initially funded, but one was eliminated in the 1997 budget, and a second position was kept vacant during FY 1998. That position was not included in The Executive Budget. She explained a bill was passed in 1997 mandating that motor vehicle garages and repair shops be identified and registered, and this has resulted in additional funding for the account.

Senator Raggio noted the $25 registration fee has the possibility of generating a reserve of approximately $400,000. Ms. King said The Executive Budget estimates a reserve of $411,000, and staff has suggested that the committee may want to add back the position eliminated by the Governor. That would allow the department to have coverage in both the northern and southern ends of the state.

Senator Coffin opined the industry can afford the fees necessary to support the positions. He stated the lack of contradictory evidence indicates the users could be charged for the positions or they could be funded through the reserve.

Senator Raggio suggested the basic question is whether the positions are performing the duty they were charged with. He recalled there were problems with stolen vehicles being processed through body and salvage shops and the industry itself proposed the regulation to control those activities. Ms. King concurred and noted the department staffed the function in 1997 through a full-time equivalent (FTE) position, although there were not specific people assigned to regulate the industry. She said the department is now using the specific staff funded through the account to regulate the industry.

Senator Raggio agreed the industry probably expects the positions to function for the purposes for which they were originally created and the position should be restored. He asked whether the Budget Division had any objections. Mr. Hataway indicated the Budget Division had no objections.

DMV, Records Search – Budget Page MDV-84 (Volume 3)

Budget Account 201-4711

Ms. King reported the account is responsible for researching and disseminating drivers’ license and vehicle registration information to insurance companies, financial institutions, vehicle dealerships, courts and similar agencies. She noted the revenue is generated by processing fees from customers, and any revenue in excess of expenses is reverted to the Highway Fund. She said the staff recommends changes to the base revenue projections since a change in statutes in 1997 has resulted in fewer reports being sold than were previously sold.

According to Ms. King, the records search charges in maintenance decision unit M-200 are attributable primarily to insurance companies, and an increase is projected. She noted that when the budget was prepared the increase in the base was for 1 year only, instead of for 2 years, hence the staff recommendation to increase those charges. She explained there is a net increase in caseloads to insurance companies, and the sales that are down are primarily sales to entities that use the lists for advertising.

Ms. King noted there is no fiscal impact, but a study of the department reclassified staff from the DMV Technician Series to the Program Assistant Series, which the staff would like to show in the budget closings. She said that is the only change and otherwise the staff recommends closing in accordance with the Governor’s recommendation.

* * * * *

DMV, Hearings – Budget Page DMV-96 (Volume 3)

Budget Account 201-4732

Ms. King explained the account supports hearings officers and support staff who conduct administrative hearings, primarily regarding drivers’ license revocations and some business appeals. She said the base was adjusted to delete a onetime and extraordinary operating supply cost for items such as typewriters, chairs and shelves. She said enhancement decision unit E-177 was adjusted to provide 1 week of training for administrative law judges at the National Judicial College. She pointed out The Executive Budget recommended training in Washington, D.C.

Ms. King added computer prices were updated in units E-710, E-711, and E-712 based upon a memo from the Purchasing Division. She said a transcriber replacement was removed from unit E-713 because it was funded in FY 1996 and FY 1997, and rents were adjusted in unit E-714 to provide for renting a motor pool vehicle rather than the agency owning a vehicle. As a result, she said, there will be a net reduction of approximately $20,000 each year.

DMV, Justice Assistance Act – Budget Page DMV-105 (Volume 3)

Budget Account 101-4708

Ms. King stated the adjustment to decision unit E-375 was made as a result of a request from the Budget Division to eliminate a General Fund appropriation of $121,875 according to modification #29. She said a subsequent request was made according to modification #91 to restore $43,211 of the $121,875. She explained the account passes a grant through, and the Sentencing Commission recommended General Fund support for a residential substance abuse program for prisoners after they leave the prison system.

Ms. King explained the program initially required a 25 percent cash match, and The Executive Budget recommended half the match be provided by the General Fund and the other half be provided by the subrecipient. She said a grant was discovered that only required a 10 percent cash match, meaning only $86,000 would be required. That resulted in budget modification #29, she said. Then the Budget Division indicated a preference to provide half of the match for the aftercare program, but staff is not recommending a modification to replace back the additional $43,000 because, under the original scenario, the subrecipient could provide $121,000. She opined if the subrecipient could provide $121,000, it certainly should be able to provide $86,000.

Senator Raggio wondered whether the program would be damaged if the funds are not provided. Ms. King replied she has checked with the grant manager on the program who has indicated the subrecipient can bill for the entire cost to start the program, and then overmatch later to provide an overall 10 percent match. She said the program must be up and running before the offenders can enter the program and pay their share.

Senator Raggio asked how the program will work. Ms. King responded that once the offenders are out of prison they enter a highly structured environment such as a halfway house; they will need jobs and will be provided with job-search skills and Alcoholics Anonymous or Narcotics Anonymous support. They will receive training in life skills such as anger management. She explained it is believed that between the initial support in prison and the ongoing support the program will help reduce the recidivism when offenders are released into society.

Mr. Hataway agreed the aftercare program has merit and stated the Budget Division wants to ensure it will continue. Senator Raggio asked whether it would be appropriate for the agency to return to the IFC if the funds do not materialize. Ms. King pointed out there is no General Fund appropriation in the account and the state match will be totally met by the subrecipient under the staff’s recommendation because the person operating the program will charge the offender.

Senator Neal asked why the aftercare program is not specifically designated within the program description. Ms. King replied the grant pass-through account handles a variety of grants listed on the closing sheets, and the Residential Substance Abuse Treatment Grant is a federal pass-through grant. She explained the concept is that if Nevada provides treatment for offenders who are drug- or alcohol-addicted, the crime rate will be reduced.

Senator Neal commented there must be stipulations from the Department of Justice, and he wondered whether the aftercare program is included in those stipulations. Ms. King answered the program is included.

Senator Raggio repeated the proposal is to remove the entire General Fund appropriation from decision unit E-375. Ms. King responded that is the staff’s recommendation. Senator Raggio voiced concern over the possibility the funds will not become available. Ms. King said the committee could include the $43,000 recommended by The Executive Budget, which would still leave a decrease in decision unit E-375. Senator Raggio suggested authorizing the sum with a Letter of Intent indicating that if the other proposal does not fund the program, the General Fund could provide appropriations.

* * * * *

DMV, Justice Grant – Budget Page DMV-108 (Volume 3)

Budget Account 101-4736

Ms. King said the positions in the account administer all the grants recorded in the previous account. She noted the first is strictly a pass-through account while the second provides for administration, and there is a limit on the latter. She explained only a small portion of the pass-through account can be used in budget account 101-4736.

Ms. King stated staff has recommended technical adjustments in the account as noted on page 16 of the closing list (Exhibit T). She indicated the account is funded 75 percent through grants and 25 percent through the General Fund. She suggested the committee consider adjusting staffing to reflect the increase in the number of grants and subrecipients managed by the staff as reflected on the page.

Senator Raggio noted the request shows 5.02 staff members with 3.5 actual staff members, and the Governor recommended 4. Ms. King responded there are 3.51 FTE (full time equivalency) staff members authorized currently, and The Executive Budget recommends changing one half-time Program Assistant IV position to a full-time position. She said the agency involved would prefer to add a full-time Management Analyst position and to leave the Program Assistant position at half-time, which the staff also recommends. She noted it will generate a need for additional General Fund appropriations of $3,734 in FY 2000 and $6,224 in FY 2001.

Senator Raggio wanted to know how the Byrne Memorial Grant is used. Ms. King told him the funds are used for crime prevention and drug abuse prevention, with 62.01 percent to be used by local government entities. She said the largest state user is the Investigation Division of the DMV&PS.

Senator Neal asked whether the only purpose of the account is to solicit funds. Ms. King responded not only are funds solicited, but also the board is responsible for awarding grants after state and local governments apply. Also, the subrecipients are monitored to ensure that the grant is being used according to the application and that the funds are being used effectively and in compliance with the conditions of the grant. She said one position is clerical and the others monitor the grants.

DMV, Narcotics Control – Budget Page DMV-168 (Volume 3)

Budget Account 101-3744

Ms. King explained the account receives the Byrne Memorial Grant for narcotics enforcement by the Investigation Division of DMV&PS. She said the staff recommends changes to correct calculations in maintenance decision unit M-100. She added there was a calculation error in enhancement unit E-197 in which a decimal point was missed; the budget is not being cut by $10,000. She noted the hardware and software pricing was modified to comply with the March 9 memorandum from the Purchasing Division.

Ms. King stated the staff recommends closing the budget according to the Governor’s recommendation with the technical adjustments. She said the budget funds 18 positions with federal funds.

DMV, Emergency Assistance – Budget Page DMV-243 (Volume 3)

Budget Account 230-1336

Ms. King pointed out the Emergency Assistance Act was created in 1997 and it will receive up to $500,000 each year to provide funds to respond to emergencies for local or state government. She explained the funding is derived from half of the interest earned on the "rainy day fund" up to $500,000. She said the staff recommends closing the budget as recommended by the Governor.

Senator Raggio noted there is a bill that will limit grants to $250,000 each year. Ms. King responded the statute indicates any unused funds in this account can be used to provide grants to local governments for training and equipment, and there is a bill pending that would limit the amount of grants to $250,000. Senator Raggio surmised the bill will not affect this budget.

The closing list addressing Health Division budgets, Closing List #9, was reviewed next. (Exhibit U.)

HEALTH DIVISION

Office of Health Administration – Budget Page HEALTH-1 (Volume 2)

Budget Account 101-3223

Ginny Wiswell, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, noted the budgets in the closing packet have been reviewed and approved by the Joint Subcommittee on Human Services/K-12. She said the health administration budget supports the entire division including personnel and accounting, and funding is provided through an appropriation from the General Fund, a variety of federal grants, and the division’s cost-allocation plan.

Ms. Wiswell said the subcommittee approved budget 101-3223 as recommended by the Governor with technical corrections. She noted the subcommittee approved decision unit E-125 for a new Auditor position which will be used to examine both in-house grants and subgrants and will work closely with the Administrative Services Officer (ASO). The auditor will be funded through the division’s cost-allocation plan.

Ms. Wiswell said the subcommittee also approved the technical adjustments in enhancement decision unit E-710 to replace computer software and hardware. The adjustments reduced the cost proposal in the Governor’s original budget.

Ms. Wiswell reported the subcommittee approved the budget as recommended by the Governor with technical corrections proposed by staff.

Senator Coffin recalled there was a long discussion about two items in the budget. He said:

Senator Raggio asked what the joint subcommittee recommended regarding increasing fees. Mr. Miles reported the subcommittee did not take any action on the issue of fees, but it did indicate the problem should be considered later. He noted it would take a change in the statutes to raise fees.

Senator Raggio noted there will be a reduction in the General Fund of $1,671 in the first year of the biennium and $2,943 in the second year.

Senator Coffin asked whether the fees will stay at the same level. Senator Raggio reiterated no increase has been recommended.

HR, Cancer Control Registry – Budget Page HEALTH-9 (Volume 2)

Budget Account 101-3153

Ms. Wiswell said this was another budget approved by the subcommittee according to the Governor’s recommendation, with staff technical corrections.

Senator Rawson noted most large hospitals submit an abstraction of every cancer case, but smaller hospitals do not. As a result, he said, it may take a future statutory change to mandate participation by all hospitals.

Senator Raggio recalled the subcommittee removed a small General Fund appropriation. Ms. Wiswell commented the technical correction for $2,600 in the first year and $4,400 in the second year is a redistribution of fringe benefits because many of the positions are funded through a federal grant. Senator Raggio remembered using $8,000 from the General Fund to fund the program in the past. Ms. Wiswell responded at this time there is sufficient funding as the budget is structured.

HR, Health Aid to Counties – Budget Page HEALTH-12 (Volume 2)

Budget Account 101-3209

Ms. Wiswell said the subcommittee approved the budget as recommended by the Governor with staff technical corrections. Senator Raggio remembered there had been requests from both Clark and Washoe Counties that funding be restored to the original level in the account, nearly double at $1.10 per capita instead of $.55. He recalled after a lengthy discussion the subcommittee did not approve any addition.

Ms. Wiswell drew attention to pages 7 and 8 of the Closing List (Exhibit U) which show the potential impact of an increase by $.25 in the per capita rate, taking the rate up to $.80. She noted such a raise would require approximately $450,000 in each year of the biennium.

Mr. Miles recalled the subcommittee’s motion was to close the budget according to the Governor’s recommendation but to add the possibility of an increase to the list of priorities after the May 1 report from the Economic Forum.

Senator Raggio pointed out the request of the two counties affected will be added to the priority list if funding becomes available.

HR, Consumer Health Protection – Budget Page HEALTH-14 (Volume 2)

Budget Account 101-3194

Senator Raggio noted several adjustments had been recommended by the subcommittee as outlined on page 9 of the closing list. Ms. Wiswell said the subcommittee recommended approval of the budget as proposed by the Governor with staff technical corrections. Mr. Hataway agreed the corrections are acceptable to the agency.

Senator Raggio noted the joint subcommittee spent a great deal of time and effort on the Health Division budgets.

HR, Health Facilities Hospital Licensing – Budget Page HEALTH-24

Budget Account 101-3216

Ms. Wiswell reported the subcommittee approved the budget as the Governor recommended. She noted there was discussion regarding the need for additional Surveyor positions, but at this time the position was not recommended. She said the Health Division currently is reviewing staffing levels and may find it necessary to return to IFC to propose an increase in the Surveyor staff. She pointed out there were numerous vacancies for nearly 2 years, and the agency is just now fully staffed.

Ms. Wiswell said the subcommittee approved the budget as recommended by the Governor with staff technical adjustments. Senator Raggio asked whether the budget includes Washoe and Clark Counties. Ms. Wiswell replied the agency provides a variety of preventative health programs throughout all counties except Washoe and Clark Counties. She explained funding is provided through the General Fund, a variety of federal grants, and medical reimbursements.

Senator Raggio noted there appears to be a change in the General Fund appropriation. Ms. Wiswell said there was a decrease in the need for the appropriation from the General Fund because additional medical reimbursements are anticipated, and an increase is anticipated in medical revenue from counties in which Community Health Nurses are based. She indicated there will be no change in the total revenue, only the distribution of the revenue.

Ms. Wiswell stated the subcommittee approved the budget as recommended by the Governor with staff technical corrections. She indicated the budget provides approximately $2 million each year in additional funding from two large federal grants, one for tuberculosis assistance and one for the breast and cervical cancer program.

HR, Sexually Transmitted Disease Control – Budget Page HEALTH-40 (Volume 2)

Budget Account 101-3215

Ms. Wiswell reported the subcommittee approved closing the budget as proposed by the Governor with staff recommendations for technical corrections. She noted the primary technical correction adds $749,000 from the federal Ryan White II grant award in each year of the biennium, which was not contemplated in the original budget. Mr. Hataway concurred the Budget Division was not aware of the additional funding at the time the budget was prepared.

Senator Raggio inquired whether the budget includes funding for protease inhibitors. Ms. Wiswell replied it does, and the appropriation has been maintained in The Executive Budget at approximately $1.3 million each year.

HR, Immunization Program – Budget Page HEALTH-44 (Volume 2)

Budget Account 101-3213

Ms. Wiswell stated the joint subcommittee approved the budget as recommended by the Governor and with a Letter of Intent. The Letter of Intent was recommended due to concern over the level of direct assistance grant funding to be made available to the state and whether it would be sufficient to cover the costs of the immunization program.

Ms. Wiswell explained the letter will allow the agency to come back with a request if the grant does not materialize to a necessary level of support. She added the agency is reviewing two new virus vaccines, one for the Rotavirus vaccine against dehydration given to small babies suffering from severe cases of intestinal disorders or infection, and the other for the Pheumo-7 vaccine given to young children to prevent ear, nose, and throat infections.

HR, WIC Food Supplement – Budget Page HEALTH-58 (Volume 2)

Budget Account 101-3214

Ms. Wiswell said the subcommittee approved the budget for the Women, Infants and Children (WIC) program as recommended by the Governor with technical adjustments made by staff. She explained the adjustments correct the adjusted base and decision unit M-200 because one of the positions had been overstated.

Senator Raggio announced a meeting of the Interim Finance Committee was scheduled for Thursday at 3:30 p.m., barring any conflicts. There being no further business to come before the committee, he adjourned the meeting at 12:15 p.m.

RESPECTFULLY SUBMITTED:

Judy Jacobs,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman