The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Wednesday, April 7, 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

STAFF MEMBERS PRESENT:

Jeanne Botts, Senior Program Analyst

Johnnie Willis, Committee Secretary

OTHERS PRESENT:

Robert R. Loux, Executive Director, Agency for Nuclear Projects, Governor’s Office

John P. (Perry) Comeaux, Director, Budget Division, Department of Administration

Pamela Drum, Public Affairs Coordinator, Tahoe Regional Planning Agency

Senator Raggio referred the committee to the handout listing non exempt bills (Exhibit C) and indicated he wished to review the first reprint of Senate Bill (S.B.) 157 on that list and discuss the recommended amendment, Amendment No. 392. He stated the committee recommended to Amend and Do Pass on April 5, 1999. The senator said the amendment will add section 5 to the bill, which states: "The provisions of subsection 1 of [Nevada Revised Statues] NRS 354.599 do not apply to any additional expenses of a local government that are related to the provisions of this act."

Senator Raggio said that unless there were objections the committee would "report out" Amendment No. 392 to S.B. 157.

Senator Raggio read the proposed amendment to S.B. 404, Amendment No. 393, and asked the committee for comments. He stated the committee recommended to Amend and Do Pass the bill on April 5, 1999. The senator said the amendment will amend section 1, page 2, line 1 by deleting the period and inserting "or until the surviving spouse remarries."

Senator Raggio said, "With no objections the committee will utilize Amendment No. 393 for S.B. 404."

Senator Raggio read the proposed amendment, Amendment No. 256, and asked the committee for comments. He noted the committee recommended to Amend and Do Pass the bill on March 29, 1999.

Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), said the sponsor of the bill requested an amendment to amend the bill "as a whole." He said the bill allows the Division of Child and Family Services to enter into a pilot program to develop a continuity of care for children who receive protective services. Mr. Miles said the bill allows the division to go forward on the pilot program and provides stipulation that the division report to the Legislature regarding the program. He said the bill provides that the state and the counties can negotiate the amount to be paid for such items as foster care placement and related services. He noted the negotiated rate may be higher than the state pays at present and possibly lower than the county pays. Mr. Miles said this will help the child to continue his or her care in the same foster home.

Senator Raggio explained that Steven Shaw, Administrator, Division of Child and Family Services, Department of Human Resources, in his presentation regarding S.B. 288 stated that an average child is subject to 3.2 moves in an 11-month period. The senator said Mr. Shaw indicated the division could implement the bill without additional personnel.

Senator Raggio opened the hearing on S.B. 507 with testimony from Robert R. Loux, Executive Director, Agency for Nuclear Projects, Governor’s Office.

Mr. Loux stated he wished to urge the committee to support S.B. 507. He said this is the last installment of Fiscal Year (FY) 1999 for the operation of the agency for Nuclear Projects of Office of the Governor. He stated the Interim Finance Committee allocated funds to operate the agency until May and this bill would provide the agency with funds to continue operations through June 1999 into the new fiscal year.

Mr. Loux said there is a slight adjustment in overall costs. He said that rather than $17,687 the amount should be $16,187. He stated the amount has been reduced by $1,500. Mr. Loux said the agency believes that with the $16,187 it could pay for its salaries, travel funds, and operating costs through the month of June.

Senator Raggio inquired whether this is a supplemental appropriation and is not in The  Executive Budget. John P. (Perry) Comeaux, Director, Budget Division, Department of Administration, replied "That is correct."

Senator Raggio inquired what the Governor’s position was on this issue. Mr. Comeaux responded the budget office sent recommended adjustments to the supplemental appropriation.

Senator Raggio said that for the record, Mr. Comeaux is indicating the request for the supplemental appropriation of $16,187 is endorsed by the budget office and the Governor.

Senator Raggio asked Mr. Loux to explain to the committee about the funds that were previously appropriated and how those funds were expended. Mr. Loux replied the agency expended the funds in accordance with the Interim Finance Committee’s instructions. He said the last two appropriations were expended exclusively for salaries, travel, and operations of the agency.

Mr. Loux stated that none of those funds had been used for contractor activities. He said the agency has been using the $250,000 that the federal government provided for FY 1999 exclusively for contractor activities.

Mr. Loux explained the agency has been operating at a cost of about $60,000 a month. He stated the agency has curtailed its activities this year in order to accommodate the revenue shortfalls. He asserted this is the reason the agency is only asking for the $16,187. He said the agency believes it can operate the agency to the next biennium with that money and with some of the savings the agency has had over the last year.

Senator Raggio asked whether there were any new developments at the national level. Mr. Loux replied there have been a couple of new developments. He said the Secretary of Energy has proposed to the nuclear industry an alternative plan to interim storage in Nevada. He said the proposed alternative is that the Secretary of Energy would take title to the waste at the reactor sites. He said the utility would then be compensated for the "at reactor storage costs," which would alleviate the utility from a liability concern and from the fiscal concern that ratepayers are paying twice.

Mr. Loux stated that recently the largest nuclear utility in the nation, Commonwealth Edison, had indicated support for the interim storage bill. He said the utility has agreed to negotiate with the Secretary of Energy on his plan. He stated it was his belief this was a very strong signal that legislation to establish interim storage may not go forward this congressional session. He said several new agencies are reporting and the legislation is not likely to pass out of the U.S. Senate. He said it may be a productive development for Nevada.

Mr. Loux said the administration has submitted a budget for the agency of $4.7 million for FY 2000. He said whether or not that will go forward will not be certain until the August-September-October time frame.

Senator Raggio inquired whether staff had reviewed the request for the $16,187. Mr. Miles said there were no objections but he wanted to note that the out-of state travel would be supplied with more money than the agency has expended so far this year. He said the same is true for the in-state travel fund. Mr. Miles said he was not aware of the agency’s travel plans.

Senator Raggio inquired whether the agency was planning any travel. Mr. Loux replied there were a couple hearings coming up that the agency representatives may be invited to in Washington, D.C. He said if so the travel would be around May or June.

Senator Jacobsen asked what the outside contracts are at present, whether the agency had any contracts with the Nevada Department of Transportation (NDOT), and whether the agency was monitoring any situations. Mr. Loux replied the agency pays a transportation consultant out of the $250,000 federal in money. He said the transportation consultant is on contract and continues to be on contract. He said the agency is continuing to analyze, for example, the Department of Energy’s draft environmental impact statement (EIS) that will contain "a lot of transportation-type information." Mr. Loux said there is also new regulations pertaining to transportation coming from the Nuclear Regulatory Commission (NRC), and the agency is preparing comments. He said the agency is very active in the transportation arena.

Senator Neal asked whether this appropriation was "very" important to the agency. Mr. Loux replied, "Senator; yes, without this money we will not be able to exist through the month of June." Senator Neal asked whether Mr. Loux was aware that Senator Rawson has suggested the agency get together with Senator Neal on his resolution. Mr. Loux responded he was aware of that and he had placed a couple of phone calls already, and he said he was available whenever the senator wanted to meet. He stated he would be happy to meet with Senator Neal anytime on his resolution.

Senator O'Donnell inquired whether the nuclear storage problem for the state had been solved with the "at reactor storage" proposal. Mr. Loux replied it is possible. He said the Secretary of Energy proposed an alternative plan to the utilities. He reiterated this plan was that the Department of Energy (DOE) would take title to the material at the reactor sites, leave it at the reactor sites, and pay the utility for all of the costs associated with storing the material at the site. He said three or four minor utilities have agreed to the plan. He remarked the fact that the largest nuclear utility, Commonwealth Edison, has indicated it would like to work with the Secretary of Energy and abandon support for the bill previously mentioned is a significant development.

Senator O'Donnell inquired whether the DOE would retain title to the waste. Mr. Loux replied yes. Senator O'Donnell said, "So, the very same DOE that is digging the mountain out there would now own the waste." Mr. Loux replied the DOE would own it anyway. This proposal allows them to take title to it earlier at the reactor sites as opposed to when it leaves the gate of the reactor site complex.

Senator O'Donnell asked whether the agency would receive $4.7 million in its budget for FY 2000. Mr. Loux replied that is the proposal. Senator O'Donnell inquired why the federal government would give the state more money if the waste would not still be coming into the state. Mr. Loux said he was unable to answer that question. He stated the DOE is under obligation by law to provide an appropriation or grant to the state, and that may be the reason.

Senator Raggio closed the hearing on S.B. 507 and opened the hearing on S.B. 508.

Pamela B. Wilcox, Administrator and State Lands Registrar, Division of State Lands, State Department of Conservation and Natural Resources, stated this bill would take what has been a line item in the agency’s budget for management expenses and change it into a revolving account for land management. She stated the fiscal impact is the same as the present impact. She said the funds would be removed from the agency’s budget and placed into a special appropriation status.

Senator Raggio inquired the need for this bill. Ms. Wilcox replied this has been a line item in the agency’s budget, but management needs often do not reflect fiscal years’ monetary constraints. She said it would be very helpful for the agency to have an account that is available when the need arises.

Senator Raggio said, "So the agency would be able to do surveys, appraisals, construction of fences, and clean-up maintenance." Ms. Wilcox said the examples would be weed abatement, hauling away junk, which are "things that come up without advance notice."

Senator Raggio inquired whether the budget office and the fiscal division feel there is sufficient oversight if this account were to be created. Mr. Comeaux nodded yes.

Ms. Wilcox, referring to Exhibit D, stated the handout is a suggested amendment to S.B. 508. She said the suggested amendment makes three changes in the bill.

Ms. Wilcox said the first suggested change is in section 1, subsection 4. She explained this change would allow the agency to accept donations into the fund "in advance of actions." She said the agency can only accept donation reimbursements at present.

Ms. Wilcox said section 2 clarifies the bill by changing the $10,000 to $20,000. The agency at present receives $10,000 a year in the biennial budget. She said this change would include the total funding for both years of the biennium.

Ms. Wilcox stated the agency is also requesting changes in section 3 which would allow the agency to request contingency funds if the balance of the account falls below $5,000 and the agency has an extraordinary need.

Senator Raggio asked whether the budget office agreed with the proposal to allow the agency to seek contingency funds and asked staff whether the agency qualified under the contingency fund provision. Mr. Comeaux indicated the budget office agreed with the proposal. LCB fiscal staff indicated the agency would qualify to seek contingency funds if the bill passed. Senator Raggio said, "Then this is the authorization." Ms. Wilcox replied "Yes."

Senator Raggio asked how often the agency envisioned that procedure being necessary. Ms. Wilcox said, "Extremely infrequently." She stated that in the years she has been with the agency there have only been one or two times this provision would have been used.

Senator Raggio inquired what the appropriation was for. Ms. Wilcox replied the appropriation would replace an amount that is currently in the agency’s budget. She said it is budget account 4173, category 14.

Senator Raggio inquired whether S.B. 508 was exempt. Mr. Miles said yes.

Senator Raggio informed the committee that it had to act on the amendment today, however.

Senator Raggio opened the hearing on S.B. 517. He said this supplemental appropriation is for $316,231 and there is a proposed amendment.

Eric Scheetz, Management Analyst, Registration Division, Department of Motor Vehicles and Public Safety, said this supplemental appropriation is a serious issue with the department. He stated the department is requesting an increase in the originally requested supplemental appropriation of $5,339 and referred the committee to Exhibit E. He explained the total request is now $321,570. Mr. Scheetz said the increase is primarily due to personnel-related costs.

Senator Raggio asked what kind of additional expenses Mr. Scheetz was requesting funding for. Mr. Scheetz replied the additional expenses relate to personnel costs.

Senator Raggio asked what the department’s need was for the supplemental appropriations. Mr. Scheetz replied that about half of the appropriation is related to personnel costs and the rest is related to purchases made by DMV&PS.

Ginny Lewis, Assistant Chief, Administrative Services Division, Department of Motor Vehicle and Public Safety, said the supplemental appropriation request is the result of a revenue shortfall in the Registration Division budget for Fiscal Year (FY) 1998. She said the revenue from the parking ticket program never materialized. She stated the amount was approximately a $370,000 revenue line item in the Registration Division budget.

Senator Raggio asked whether this was an ordinary expense with a shortfall in revenue. Ms. Lewis replied, "In cash revenue, yes." She explained the costs were for operating expenses and for personnel costs for the Registration Division.

Senator Raggio, referring to Exhibit E, asked for further clarification. Ms. Lewis replied the MSI is the Merit Salary Increase for the four employees cited on the recommended amendment. She said there were also associated fringe benefit costs.

Senator Neal asked what the connection was between the parking ticket program and merit increases for employees. Mr. Scheetz replied the parking ticket program "is when an individual has unpaid parking tickets to a city or county and the city or county request the Registration Division to flag that individual’s registration account." He said this program requires the individual to pay all parking fines before his or her vehicle can be registered.

Senator Jacobsen asked whether this shortfall had anything to do with Project Genesis. Mr. Scheetz replied that Genesis did not impact this program at all.

Senator Raggio closed the hearing on S.B. 517 and inquired whether there was a motion.

Senator Raggio stated S.B. 517 would be recommended as Amend and Do Pass.

Senator Raggio opened the hearing on S.B. 511 and informed the committee that this bill was not exempt and the committee would be required to take action one way or another.

John P. (Perry) Comeaux, Director, Budget Division, Department of Administration, said the Budget Division requested this bill because it is necessary to implement certain portions of The Executive Budget. He said the budget office recommended that funding from the Motor Vehicle Pollution Control account be used for the Nevada TRPA (Tahoe Regional Planning Agency), the Division of Parks, TRPA, and the Nevada Division of Forestry. He explained the attorney general informed the budget office there was no authority in the existing pollution control account to allow the use of those funds for air quality control issues.

Mr. Comeaux, referring to Exhibit F, said he wished to propose an amendment to S.B. 511. He explained the purpose of this bill was to provide funding for other air quality-type endeavors documented in The Executive Budget, providing funding is available after the grants to the local governments that the statutes require have been paid. He said only the funding over and above the $500,000 reserve would be used.

Mr. Comeaux stated the reason for the amendment was that the budget office wanted to specifically identify the programs in The Executive Budget which would benefit from this bill. He said the bill as presented does not clearly define that the grants to the local governments would have first priority before the funding could be used for another purpose. He said the additional expenditure for programs in The Executive Budget would only be allowed if excess funds were available after the required grants to the local governments.

Senator Raggio asked whether the amendment proposes to leave the language as it is in the bill and add a new section 2 or whether it deletes some of those provisions. Mr. Comeaux replied the amendment would delete some of the provisions. He said the proposed amendment sections refer to the existing law and not to the bill. He explained that page 1, lines 13 through 16, is section 2 of the law. Mr. Comeaux said the budget office proposes to eliminate those lines and substitute them with section 2 of the proposed amendment, Exhibit F.

Senator Raggio inquired whether the only changes to NRS 445B.830, which is section 1 of the bill, are those the budget office is proposing in Exhibit F. Mr. Comeaux replied that is correct.

Mr. Comeaux explained Exhibit F documents the changes line by line and in priority order, along with the NRS that relates to that expenditure in the pollution control budget. He said this is the proposed new section 2 of the law. He said lines (a) through (e) are provided for in the existing law, but the NRS relating to those items are not presently documented in the law. He noted Exhibit F proposes to change that wording and add the additional expenditure items of (f) through (h).

Senator Raggio asked whether "line (d)" in Exhibit F replaced funds that have been previously used from General Fund money for TRPA purposes. Mr. Comeaux replied, "No line (d) does not replace those funds." He explained the state has traditionally provided approximately $33,000 to TRPA from the pollution control account. He said the new spending being proposed which would replace General Fund appropriation is reflected in lines (f) and (g).

Mr. Comeaux said line (h) of Exhibit F would provide funds from agencies for the environmental improvement program at Lake Tahoe. He said this would include items such as funding for parks, forestry, and agricultural positions and related costs. Senator Raggio inquired whether those positions were in the budgets. Mr. Comeaux replied yes.

Senator Raggio questioned whether the proposed amendment would also require a reserve of $500,000. Mr. Comeaux responded, "That is correct." He said the $500,000 is implied in the statute as it exists, but this bill and the amendment would specifically include the reserve as a requirement.

Senator Raggio, referring to Exhibit F, inquired what section 4 would provide. Mr. Comeaux replied Section 4 of the amendment would include lines 4 though 30 of page 2 on S.B. 511.

Senator Raggio asked what the term "in order of priority subject to approval" means. Mr. Comeaux replied that means (a), (b), (c), and (d) in that order. Senator Raggio inquired whether those would take priority as indicated as (a) first, (b) second, and "on down the line." Mr. Comeaux replied yes. He said section 4 (a) is first, then section 2 (a) through (e) in sequential order. He explained this sequential order is the way in which the funding distribution works now, but with the new proposal section 2 (f) through (h) would also be funded.

Senator O'Donnell remarked he was reluctant to take money out of the Clark County environmental protection reserve fund and fund Lake Tahoe’s TRPA. He was concerned this may be a situation where the state would be "robbing Peter to pay Paul" and not considering where the funds should go. He said the people in Clark County paid those fees for environmental protection. He remarked Clark County has the worst nonattainment area in the state, but the proposal "wants to take funds from the reserve and use them for TRPA when it should be General Fund." Mr. Comeaux responded that issue is why the bill stated the spending would be in priority order. He said if the local government does not request the supplemental grants, "then and only then" would those funds be allocated to other air quality-type projects in the state, specifically at Lake Tahoe.

Mr. Roberts stated Clark County is concerned in regard to the use of the excess funds from the pollution control budget. He said there is a significant amount of money there that is used in Clark County for "fuel for the engine that drives the field studies and research" that is a necessary prerequisite to developing clean air plans.

Mr. Roberts said Clark County is currently struggling with particulates and carbon monoxide. He noted there are new federal regulations "for ozone," for different size particulates, and for regional haze and visibility. He said the Las Vegas Valley is having difficulty meeting those standards. He stated Clark County will need a substantial amount of money to conduct the studies to find the answers for Clark County’s air quality issues.

Mr. Jennison stated Washoe County wanted to remind the committee to remember where these funds came from. He said these funds come from smog-check fees in the two largest urban areas. He noted the fees have been used to reduce air pollution in the two largest urban areas and those needs are still significant.

This concluded the morning portion of the hearing on S.B. 511.

Senator Raggio informed the committee it must take action on S.B. 507 and invited a motion.

Senator Raggio said that S.B. 507 would be recommended as Amend and Do Pass.

Senator Raggio recessed the meeting at 9:35 a.m. until immediately after the morning floor session of the Senate.

Senator Raggio reconvened the meeting at 1:55 p.m. with a continuation of the discussion on S.B. 511.

Senator Raggio asked Mr. Roberts and Mr. Jennison to restate their objections to the bill. Mr. Roberts replied it was Clark County’s position that the bill as proposed would preclude the county from using the funds, which it currently has access to for providing critical financial resources and for providing the necessary funds for research and field studies that are prerequisites to effective clean air plans in Clark County and the Las Vegas Valley. Mr. Jennison replied Washoe County concurred with Mr. Roberts’ remarks.

Senator Rawson stated it seems clear that the funds in the pollution control budget were set aside for other uses and the current executive budget does not have the resources to fund the TRPA commitment. He asked if these funds were used for the TRPA in this biennium and then reverted to the General Fund the reserves would be depleted to the point that it would harm the larger counties. Mr. Jennison replied Washoe County believes a "sunset" clause would be acceptable for just this biennium. Mr. Roberts replied Clark County’s position was that given the unknowns in the bill and the county’s experience of how things work, the most likely scenario would be that any funds available in the reserve would be expended by the next biennium.

Senator Rawson inquired whether it was possible to limit the amount expended in the biennium through an amendment to the bill. Mr. Roberts, referring to Exhibit G, stated that the suggested amendment to S.B. 511 would be Clark County’s solution to the senator’s question.

Senator Raggio asked Mr. Roberts to review the suggested amendment for the committee. Mr. Roberts replied the "heart" of the suggested amendment is in items 3 and 4. He said the suggested amendment establishes a $2 million limit of expenditure for those agencies outlined in the budget office’s proposed amendment presented earlier in the morning. He said the suggested amendment establishes a time frame for those agencies to access the funds and imposes a sunset clause as a cut-off date so those agencies would no longer be able to access the pollution control funds.

Senator Raggio inquired whether Mr. Comeaux had any comments on the suggested amendment from Clark County. Mr. Comeaux replied the sunset clause would not be an issue with the budget office; however, the not-to-exceed amount of $2 million would be a problem. Senator Raggio noted the budget office’s proposed amendment would retain a minimum of $500,000. Mr. Comeaux responded "Correct." Senator Raggio asked whether the effect of Clark County’s suggested amendment would be to leave a much larger reserve. Mr. Comeaux replied that according to the budget office’s calculations, if none of the bills that affect this account were to pass there would be a reserve of about $1.6 million left in the account. He said the suggested amendment would add approximately $1.6 million, which would bring the total to about $3.2 million.

Senator Raggio asked what the budget impact would be if S.B. 511 does not pass with the budget office’s proposed amendment. Mr. Comeaux replied that if the bill did not pass the pollution control budget would have a $3.6 million problem. He said that under existing law the $3.6 million being recommended to help fund TRPA, the environmental improvement program positions in parks, forestry and elsewhere could not be funded from the pollution control account. He stated another source of funds would have to be supplied. Mr. Comeaux said approximately $3.6 million over the biennium would probably come from the General Fund.

Senator Raggio commented, "So we would have to be looking for that amount of money to plug into the budget," which would be $3.6 million over the biennium from the General Fund to fund the TRPA projects. Mr. Comeaux replied "Yes, Sir."

Senator Neal asked how much money is in the pollution control fund at present. Mr. Comeaux replied the balance in that account is $4.9 million. He said the $4.9 million is what is in the account at present, and about $5 million in fees flows into that account annually.

Senator Rawson inquired whether or not S.B. 511 was an exempt bill. Mr. Miles replied it was not an exempt bill.

Senator Rawson stated that when the committee is presented with an isolated issue such as this it becomes "a tough vote." He said, "The flow of funds here comes from an issue that the public does not generally support in southern Nevada." He commented the budget office is asking the committee to allocate these funds to an issue that is unrelated to southern Nevada’s needs. The senator indicated he had spoken with a TRPA representative but was unaware that $3.6 million would be required.

Senator Raggio asked Mr. Miles whether there was any basis for this bill to be considered exempt from the legislation-processing deadlines. Mr. Miles replied the bill allows a wider array of expenditures from the pollution control account and a higher expenditure from that fund, and those factors would qualify it to be exempt.

Senator Raggio stated that if this bill could be designated exempt, then the committee could further study the issues that have arisen from the discussion in the hearing.

Senator Rawson stated that as a single vote this issue is difficult and he recommended listing S.B. 511 as an exempt bill.

Senator Raggio inquired whether Mr. Miles had the authority to designate the bill as exempt. Mr. Miles replied yes.

Senator Neal commented the account’s present balance is $4.9 million and another $5 million would be flowing into the account. He asked Mr. Comeaux when the budget office would determine that the funds are present in the account. Mr. Comeaux replied the budget office’s estimate of the revenue that will come into that account is $5,870,000. He said the actual collection for FY 1998 was $5,670,000. He stated the $5,870,000 estimate may be conservative.

Senator Neal inquired whether the funds were counted by calendar year or fiscal year. Mr. Comeaux responded, "By fiscal year." Senator Neal stated, "So in July that account would have additional funds in that account." Mr. Roberts replied, "The certificate fee is a renewable fund source, some of which is returned to the counties." He said there is a separate fund called the surplus fund that was created as a result of the fee being $6. He said that in the 1997 Legislative Session the DMV&PS understood the fund was collecting more money than was needed to administer the emissions testing program, and with the concurrence of the Legislature the fee was reduced to $5. He explained the resulting surplus was the amount that resulted from collecting the $6 fee. He said this surplus is a nonrecurring financially resource. Mr. Roberts further said that once a dollar is removed from the excess fund it will not be replaced. He said, "When Mr. Comeaux says that $5 million comes into that account annually he is correct; however, the money from the fee certificate program goes to the state budget for use by [the] DMV[&PS] to administer that program." He said part of those funds goes to counties, but it was his understanding that the surplus fund would not be maintain or enlarged.

Senator O'Donnell asked Mr. Jennison whether Washoe County has staff members that perform the air quality studies and planning whose employment would have to be terminated if the funds where not forthcoming. Mr. Jennison replied the county would not consider laying off employees if it did not receive the supplemental grants. He said the county would be considering items such as not contributing funds to the Desert Research Institute to study air pollution and particulates, or not contributing funds to the Regional Transportation Commission for alternative transportation, or not being able to advertise the smoking vehicle program, or not contributing funds to the community colleges for mechanics training.

Senator O'Donnell asked for Clark County’s response. Mr. Roberts stated Clark County uses only the $1 that is returned to the county and that dollar is split with the health districts in a 60-40 split to fund personnel positions. He said Clark County’s concern is that there are many research projects which need these funds to achieve the answer to the county’s air pollution problems. He said Clark County believes it will no longer have this funding source if S.B 511 passes.

Senator Raggio stated if this bill is not passed then the committee must find $3.6 million in funding for TRPA from another source since that is Nevada’s portion of the agreement.

Senator Jacobsen asked whether this issue involves California in any manner. Pamela Drum, Public Affairs Coordinator, Tahoe Regional Planning Agency, replied California is going through the same process in trying to receive approval for the Lake Tahoe budget. She said there are also questions for the California legislators regarding what is happening in Nevada. She said the agency would very much like to be able to tell the California legislators that the budget requests from Nevada have been approved and the project is "flowing along smoothly" so that California can "come forward" with its full funding approval as Nevada has.

Senator Rawson stated that any communication with California should be that the budget process is moving smoothly. He said that in the past there has been a general commitment to the Tahoe basin and it is not likely the Nevada Legislature would do anything to jeopardize that commitment.

Senator Raggio closed the hearing on S.B. 511 and noted for the record that this bill is exempt from the deadlines for processing legislation.

Senator Raggio opened discussion on S.B. 104 and noted that the committee heard testimony on this bill on March 10, 1999. He said there was a question regarding an amendment to extend implementation of certain achievement and proficiency examinations in public schools. The committee felt the extension time of 3 years was too long and requested that staff and the State Department of Education discuss this issue. The committee suggested that a different time period would accommodate the department’s concerns without doing an injustice to the Legislature’s goals.

Jeanne Botts, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, referred to Exhibit H and said that memorandum relates to the proposed amendment. Ms. Botts said that in the hearing on March 10, 1999, hearing on this bill, which would postpone standards-based exams for 3 years beyond the length of time that was approved last session, the members of this committee expressed concern that 3 years was an inordinate amount of time. She was directed to work with the interested parties to reach a compromise. She said the achieved compromise would delay the testing only 1 year from what the bill from the 1997 session required. Ms. Botts said that where as the State Board of Education’s original bill would have delayed testing for 5 years after the standards were adopted, this compromise is for a period of a little over 3 years.

Ms. Botts stated that on page 2 of Exhibit H there is a time schedule for implementing the new standards-based exams. She noted the schedule on Exhibit H covers tests of Phase I standards, which are the standards adopted in August 1998 in English, math, and science for grades 2, 3, 5, 8, and 12. She said the department is ready to send out a request for proposal (RFP) in June.

Ms. Botts noted the product will be selected sometime later in the summer of 1999, whether it is a ready-made test to be purchased, or a contractor hired to help them develop a test. She said that throughout the next academic year the department and the districts will work toward either purchasing the exam or developing the exam. Ms. Botts stated there will be pilot testing in the spring of 2000. The exam will be given first in the spring of 2001, and Ms. Botts said there is language in the amendment which clarifies that the first time the exam is given to all students it will be for baseline data-gathering purposes. She said there could be some problems with the exam, particularly on an exam that has been developed internally.

Ms. Botts stated the exam would be fully implemented in the spring of 2002.

Ms. Botts said the Phase II standards currently being developed are in social studies, arts, health, physical education and computer education. The only subject that requires testing is social studies. Ms. Botts noted the Phase II schedule would be the same as the Phase I schedule except delayed 1 year.

Ms. Botts stated the Council to Establish Academic Standards for Public Schools has already recommended that the test start in grades 3 and 5. She said the suggested amendments start on page 3 of Exhibit H. She noted the changes have been shaded for quick reference.

Ms. Botts said the original language adopted last session showed the exams commencing in the 1999-2000 school year. She noted the next lined-out portion on page 3 of Exhibit H is the State Board of Education’s suggestion to delay the exams to the 2002-03 school year. She indicated the shaded underlined school year shown in on page 3 of Exhibit H is "the amendment date of the 2000-01 school year."

Ms. Botts reiterated language has been added which clarifies that in the first year the exams are administered, the results of the exams will be used only for the purpose of gathering information concerning the examinations.

Ms. Botts stated that in section (c) of the suggested amendment there is a date which was changed in another bill that the Senate Committee on Human Resources has processed. The Senate Committee on Human Resources changed the date for administering the next standard to February 28, 2000.

Ms. Botts directed the committee’s attention to section 7 on page 4 of Exhibit H and said the original bill clarifies that the standards council will report to the Legislative Committee on Education regarding the standards and exams adopted by the State Board of Education. She said the board suggested language that said the standards council will report "if the standards and exams have been adopted." She stated she had changed the wording to indicate the standards and exams "have been adopted." She said the standards council will not report if the standards and exams have not been adopted.

Ms. Botts reported the testing and advisory committee which was set up under the Legislative Committee on Education had proposed a schedule for the implementation of new tests that had "lead-in cycle" of about a 3 year. She said these amendments are consistent with the advisory committee’s proposed schedule.

Ms. Botts stated she met with the testing and advisory committee. The committee reviewed the time schedule and indicated it was workable.

Senator Raggio said the testing and advisory committee and the State Department of Education have agreed to the proposed amendment. He stated that Dr. Rose indicated the testing could be started as soon as the test is available. Ms. Botts responded "Yes."

Senator Raggio said the amendment should answer the committee’s concern. He said 3 years was an ordinate amount of time "that would have done injustice to the whole concept of bringing standards up in a timely manner."

Senator Rawson inquired whether this amendment changes the testing from fall to spring. Ms. Botts replied "Yes and no." She said on the standards-based exams, which are the exams that will test whether or not students have met the standards, would be given in the spring. The TerraNova test, the norm-referenced test that is given in grades 4, 8, and 10, would still be given in the fall. She said there was a bill that has been indefinitely postponed which would have moved that testing to the spring.

Senator Raggio said the committee would recommend S.B. 104 for Amend and Do Pass.

Senator Raggio opened the hearing regarding S.B. 288 which he noted is nonexempt with a report from Mr. Miles.

Mr. Miles said this bill originally would have required a reorganization of the Department of Human Resources. He explained the reorganization would have combined Medicaid eligibility duties with the eligibility duties for Nevada Check-Up Program. He noted the Medicaid eligibility duties and Nevada Check-Up eligibility duties are currently performed in two different divisions.

Mr. Miles said the sponsor of the bill and the agencies were directed to investigate whether there was an administrative solution to the reorganization problem. He stated fiscal staff has met with Senator Washington, who is the sponsor, and with representatives from both the Welfare Division and the Division of Health Care Financing and Policy.

Mr. Miles said the bill’s sponsor and representatives of both divisions have agreed to some revisions in the way eligibility duties are performed. He said that at present if a client applies and does not qualify for Medicaid then the client is sent to Nevada Check-Up. He said what the agencies wish to do is to present both applications to the client in the beginning so that the client has the option to apply to both programs. He stated that under the federal law if a client is Medicaid-eligible the client must access Medicaid. He said this change would streamline the process.

Mr. Miles said that Senator Washington expressed an interest in having the Senate Committee on Finance send a Letter of Intent directing the involved divisions to follow through on the suggested procedural changes they have agreed to. He said he had agreed to present Senator Washington’s wish to the committee for its consideration. He asked whether it would be permissible to have LCB staff draft the letter for the committee’s consideration. Mr. Miles said S.B. 288 would not have to be processed if the Letter of Intent were issued.

Senator Raggio inquired who would draft the Letter of Intent. Mr. Miles replied Steve Abba, Program Analyst, Legislative Counsel Bureau would draft the letter.

Senator Raggio directed the committee’s attention to S.B. 71 and said this bill was heard by the committee on March 17, 1999. He said the bill authorizes the Legislature to prepare a legislative budget.

Senator Raggio noted that Mr. Comeaux testified in opposition to the bill on behalf of the Governor. He said Denise Miller, Senior Policy Advisor, Governor’s Office, also opposed the bill and presented a separation of powers argument.

Senator Raggio said an opinion from legislative counsel indicated there was not a constitutional problem with the proposal. The opinion further indicated that in fact, there is nothing in the Nevada Constitution which requires the Governor to submit a budget, and the Legislature has full right to do so.

Senator Raggio said S.B. 71 would be recommended for Do Pass.

Senator Raggio said S.B. 214, which was heard by the committee on March 10, 1999, is on the nonexempt list. He said this bill would prohibit consideration of the ending balance on school districts as a revenue source in preparation of the state budget.

Senator Raggio said the testimony indicated there was misunderstanding on whether or not the ending balance of the school districts was being considered.

Senator Raggio stated S.B. 214 would be recommended to be Indefinitely Postponed.

Senator Raggio adjourned the meeting at 2:30 p.m.

RESPECTFULLY SUBMITTED:

Johnnie L. Willis,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE: