The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 4:35 p.m., on Wednesday, May 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

STAFF MEMBERS PRESENT:

Millard Clark, Committee Secretary

OTHERS PRESENT:

Rick Combs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, said the Joint Subcommittee on General Government determined that the cost allocation plan did not include an allocation of all the costs that had been allocated under the plan in past biennia. Mr. Combs said the department was asked to submit a cost allocation that was based on all the office’s expenditures that were attributable to services provided to the department agencies.

Mr. Combs stated the subcommittee approved funding for a half-time student assistant position for the Las Vegas office as recommended in decision unit M-200. He noted the subcommittee approved funding for a DoIT Computer Network Specialist position to provide full-time information technology support to the agencies within the department as recommended in decision unit M-201. He said the subcommittee approved funding for the costs of entering into a service and maintenance contract for a computer system designed for the visually impaired receptionist in the Las Vegas office as recommended in decision unit M-525.

Mr. Combs commented the one big issue in this budget is the elimination of the Center for Business Advocacy and Services and the three positions that administer the program as recommended in decision unit E-125. He said this was part of the Governor’s recommendation. He noted the subcommittee did agree to eliminate the program because the Commission on Economic Development and the University’s Small Business Development Center would handle the duties that are currently being performed by the Center for Business Advocacy. Senator Raggio asked whether the subcommittee felt there would still be sufficient resources available to somebody starting a business. Mr. Combs replied, "Yes, the department indicated that they would continue to refer people coming to the department to the other sources."

Mr. Combs said that Assembly Bill (A.B.) 103 would remove the Division of Agriculture, the Division of Minerals, and the Predatory Animal and Rodent Committee from the Department of Business and Industry. He said this would affect the cost allocation plan for this budget. He said the subcommittee recommends issuing a Letter of Intent that would include a statement directing the department to work with the Budget Division and the Fiscal Analysis Division Legislative Counsel Bureau (LCB), to make a presentation to the Interim Finance Committee (IFC) regarding their expenditures if A.B. 103 is approved.

ASSEMBLY BILL 103: Reestablishes state department of agriculture. (BDR 18-102)

Senator Raggio asked whether the subcommittee made a decision on the suggestion that the Division of Agriculture become a separate department. Mr. Combs replied they did not, it was decided to wait for the outcome of A.B. 103.

Don Hataway, Deputy Director, Budget Division, Department of Administration, said the new Director of the Department of Business and Industry testified at the subcommittee hearing that the cost allocation plan would not change. Mr. Hataway said it was the new director’s intent to reduce expenditures in the department budget. He said there is revenue in this budget transferred from the Division of Agriculture and the other agencies to support the Department of Business and Industry budget; but the new director said the department would not change the allocation charges to the remaining agencies, just reduce the expenditures in this budget. He said the Budget Division would still need to work with the department to create a report identifying what the changes will be.

Senator Raggio said if the budget is closed, it is subject to revision if the determination is made to create a separate department. Mr. Combs said the department would need to present its plan to the IFC for how the reduction in expenditures would be handled.

Mr. Combs said the Joint Subcommittee on General Government approved the transfer of funds from this account to the director’s office account to fund the purchase of a laptop computer for use by the Chief of the Office of Business Finance and Planning as recommended in decision unit E-710.

Mr. Combs said the Joint Subcommittee on General Government voted to provide operating support for the division to continue the program for the certification of building inspectors. He said The Executive Budget indicates the program is recommended for elimination; however, the administrator of the division indicated in testimony before the subcommittee that only the half-time position which administered the program would be eliminated. The administrator indicated the division would continue to administer the program with existing staff. He commented the administrator indicated the program could be accomplished without the half-time position, but the division would need $5,131 for operational support costs in each year of the biennium to administer the program effectively. He said the subcommittee voted to approve the requested funding to continue the program.

Mr. Combs noted that in decision unit E-125 funding was approved for the rental costs of meeting rooms for some of the division’s hearings, for public service announcements, and for the rental of billboards to provide the public with information regarding the requirement for persons who sell real property to submit a property disclosure form to potential buyers. Funding was also approved for providing access to the state mainframe for three additional employees and for replacing various computer hardware in the Carson City and Las Vegas offices. Mr. Combs said that just prior to the subcommittee’s budget closing hearing the division indicated there were expenditures of about $19,000 in this decision unit for computer equipment that will not be needed because of "some things that had occurred during Fiscal Year (FY) 1999." The subcommittee voted to decrease the amount of funding in this decision unit to $4,000 for computer equipment. He said the division will be able to share some of the computer equipment with the Manufactured Housing Division in Las Vegas as well as with the Division of Insurance in Carson City.

Senator Raggio asked, "How much more onerous is the property disclosure form than the current one?" Mr. Combs replied the division has asked for funding to provide some public service announcements and billboard rentals to ensure that people are aware of this new requirement and the disclosure form that must be submitted to potential buyers. He said the division has received many complaints from people "not using real estate agents and when they sold their property they were not aware of the requirement, therefore did not provide the disclosure form to buyers."

Senator Raggio asked how much was allocated for that purpose. Mr. Combs replied the amount is about $20,000 for each year of the biennium.

Mr. Combs said this budget account was not heard by the Joint Subcommittee on General Government. He said the account funds the process for review and approval of continuing education courses for Nevada’s real estate licensees and the licensing of instructors for those courses. He noted that decision unit M-200 recommends funding in the amount of $2,500 for the costs of printing a real estate broker reference manual in each year of the biennium. He pointed out that decision unit E-125 recommends funding for increased travel, copy machine lease costs, and computer software. He said decision unit E-710 recommends funding for the replacement of two personal computers and associated costs.

Mr. Combs stated he recommends some adjustments be made to the budget request. He said when the Real Estate Recovery account was closed, the amount of the transfer from that account to this account was increased by $10,460 in the second year of the biennium based upon the division’s projected number of licensees. He noted a corresponding adjustment has been made to accept the increased transfer amount in this account.

Mr. Combs noted the costs for the brokers’ manual in the second year of the biennium have been removed. He said the division has indicated the manual will only be updated every other year.

Mr. Combs said that because the expenditures in this account were projected to be higher than the revenue projected for the 2000-01 biennium, the division has re-evaluated its need for the enhancements recommended in decision unit E-125 and has requested the expenditures be removed from the budget. He said, "Please note that the base budget already includes authorization for out-of-state and in-state travel." He noted that the base budget represents an increase to the Research and Education category when compared to the FY 1998 actual expenditures.

Mr. Combs further noted the costs for computer equipment in E-710 have been adjusted based upon the revised prices received from the Purchasing Division.

Senator O'Donnell said he is a real estate agent and a broker and would not be voting on this budget.

Mr. Combs said the Joint Subcommittee on General Government approved funding for 4 new Financial Examiners in each year of the biennium as recommended in decision unit M-200. He said the subcommittee voted to close the budget as the Governor recommended with the technical adjustments for computer hardware and software costs.

Senator Coffin stated that his wife is a director of a bank and they own stock in a bank so he would abstain from voting.

Senator Mathews said she is on the board of a bank. Senator Raggio said he does not think being on the board of a bank would disqualify the senator from approving this budget.

Mr. Combs said the Joint Subcommittee on General Government closed this budget as the Governor recommended with technical adjustments and with a Letter of Intent. He said the main decision units in this account included approved funding for the costs associated with moving the office from the Bradley Building to non-state-owned office space in Las Vegas as recommended in decision unit M-200. He commented the division has outgrown its current office space and this space is needed to house General Fund agencies.

Mr. Combs said the subcommittee approved an increase in revenue and operating authority for the projected expansion of the Home Loan Servicing Program as recommended in decision unit M-210. He commented that the division elects to service certain loans issued by lenders through the division’s revenue bond programs. He said the division uses its profit for servicing the loans to finance the Down Payment Assistance Loan Program. He said the division wants to expand the number of loans it services internally.

Mr. Combs said the subcommittee approved funding to hire a new Field Auditor in each year of the biennium as recommended in decision unit M-597. He said the auditors will be used to determine whether occupants in the multifamily housing units meet the requirements to be living in those units as well as whether the units are charging the correct amount of rent for an affordable housing project.

Mr. Combs said the Letter of Intent is related to decision units E-175 and E-275. He noted the subcommittee expressed concerns regarding the expenditures necessary to provide training for the division’s employees. Based upon those concerns, the subcommittee recommended issuing a Letter of Intent directing the agency to attempt to provide training for its employees in the most cost-effective manner possible, including limiting the number of persons who attend each training course and sending employees to courses conducted in Nevada whenever possible. Senator Raggio inquired whether these were employees currently in place. He asked whether this refers to the training for all of the employees or just the new ones. Mr. Combs said the training will not include all of the employees but some of the existing employees will receive additional training under these programs. He said some of the training is for software programs. He explained that money of the programs operated in this account are federal programs and they change their federal software is changed on a regular basis, so the division is required to attend meetings to be trained in the new software. Mr. Combs said decision units E-175 and E-275 both include training. He said all of the training included in decision unit E-275 is for the Home Loan Servicing Program and includes credit-and-collections-related type of work.

Mr. Combs said this is one of the accounts not heard by the Joint Subcommittee on General Government. He said LCB staff recommends that this account be approved as recommended by the Governor.

Senator Raggio asked the purpose of this fund. Mr. Combs replied this account is funded through a transfer from the real estate transfer tax. He said the account receives a portion of that tax equating to 10 cents for each $500 of value. He explained that the funds in the account are used for distribution to public or private nonprofit charitable organizations, housing authorities, and local governments for the acquisition, construction, and rehabilitation of housing for low-income families. He said the funds from this account are also used to leverage state and federal dollars for housing for low-income families.

Mr. Combs said this account was not heard by the Joint Subcommittee on General Government. He said the Weatherization program is funded through a grant from the U.S. Department of Energy and funds transferred from the Low Income Housing Trust Fund. The account funds tests performed on residential dwellings to determine whether defective materials, weak construction techniques, or inefficient furnaces or air conditioning equipment have resulted in increased energy costs for low income households.

Mr. Combs noted that the only adjustment recommended is to send two people to a Weatherization Advisory Board meeting. He said it was determined in discussions with the Housing Division that the update sessions recommended in decision unit E-175 would not provide a significant benefit to the advisory board member. Senator Raggio asked whether this account was funded through the U.S. Department of Energy. He asked, "How do people apply for these grants?" Mr. Combs said people can submit an application to the Housing Division, although the Housing Division routinely goes out to look for homes that might be eligible for the funding and asks whether the residents can come into the office to complete an application.

Mr. Combs said the Joint Subcommittee on General Government approved funding for a new Management Assistant and associated costs as recommended in decision unit M-200. The position will serve as a receptionist and provide clerical support to the administrative staff in the Reno office.

Mr. Combs noted that the subcommittee approved funding for two new Agriculturist II positions and their associated costs as recommended in decision unit M-201. He said originally these positions were to inspect nurseries to ensure that dangerous insects are not imported into Nevada and to monitor pest control company operations. He noted the Governor submitted Amendment No. 96 which moved the starting date for one of the positions to July 1, 1999, from October 1, 1999, and recommended using that position to address the Africanized honey bee problem in southern Nevada. He said the subcommittee was concerned about the funding for the two positions. The subcommittee felt that if the two positions were going to be inspecting nurseries and monitoring pest control operations, the fees paid should be used to fund the positions. Mr. Combs said that based on these concerns the division indicated agreement with the subcommittee’s recommendation but said it did not have the revenue to do this during the current biennium. To remedy the problem the division proposed a fee increase. He said that based on the subcommittees concerns on the issue and the division’s concurrence, the subcommittee approved the positions.

Mr. Combs pointed out that legislative action is required to fund the programs with a fee revenue increase in the second year of the biennium. Based upon the need for the division to develop a realistic funding policy for all of its programs and the need to increase fee revenue to fund the nursery inspection and pest control programs in FY 2001, the subcommittee voted to recommend a bill draft request (BDR) to remove the division’s fees from statute and to provide the State Board of Agriculture with the authority to establish the fees by administrative regulation.

Senator Raggio said the fees are set forth in statute and asked why the division would need to have the fees removed from statute and placed under administrative regulation. Mr. Combs said there were basically two options; one was to raise the fee in the statute so the two positions could be funded with the fee revenue, the other option was to take the fees out of the statute and give the division the authority to establish the fees by administrative regulation. Senator Raggio clarified the two positions referenced by Mr. Combs were the proposed "agriculturalist positions to address the Africanized honey bee and fire ant problems. Mr. Combs replied, "Basically for Africanized honey bees, monitoring the pest control company operations, and nursery inspections."

Senator Raggio asked again why the fees needed to be removed from statute. Mr. Combs replied the fees do not have to be removed from statute; the subcommittee felt the positions should be fee-funded because of the activities they would be involved in. He said the division was being encouraged, through an audit by LCB and the review of its base budget for this budget request, to develop funding policies for all of its fee funded programs. He remarked the division felt that removing these fees from statute and putting them into regulation would give it the ability to set the fees at the level needed to operate its programs. Senator Raggio said these are fees from nursery inspections and pest control programs. Mr. Combs replied, "That is correct."

Senator Coffin commented that the two positions were added because of a quasi public-safety issue, the Africanized honey bee and the fire ants. He asked whether there was testimony in the subcommittee hearings indicating that levying a fee on the people in the business to pay for a public safety issue was justified. Mr. Combs said the purpose for the fee is to fund the nursery inspections that will be performed as well as the monitoring of the pest control company operations. He said the subcommittee determined the General Fund has basically been supporting those fee-funded programs in the past, because the fees in some of the fee-funded programs have not been raised in over 20 years.

Mr. Combs said the subcommittee approved funding for a new Weights and Measures Inspector and associated costs in decision unit M-202. He said the subcommittee requested the division review its projections on weights and measures fees because there were no weights and measures fees proposed to help fund the position. Based on the subcommittee’s direction, the division proposed an increase of $30,000 in the first year of the biennium and $38,000 in the second year to help fund the position.

Mr. Hataway pointed out the additional recommendation the Governor made for this budget. He noted the situations with the Africanized bees and the fire ants have been unfolding over the past 6 to 9 months and said the Governor recommended, if the funds are available, that $162,127 for the first year of the biennium and $156,004 in the second year of the biennium be added to this budget for additional fire ant and Africanized bee staff and operating expenses. Senator Raggio asked whether the additional money was for positions or for contract services. Mr. Hataway replied it was primarily for positions but also included operating and contractual expenses. Senator Raggio asked whether the joint subcommittee reviewed this additional funding. Mr. Combs said, "No they did not. I only became aware of the additional funding just prior to this meeting."

Senator O'Donnell said the subcommittee made remarks that the Governor was aware of indicating its concern about bee hives and swarms that were located on land or parcels where people owning the land could not afford to pay for the removal of the insects. He said the current process is that whoever owns the land must pay for the mitigation of the bee problem. He commented that when the people cannot afford to kill the bees, the state has to step in and pay to eradicate of the bees. The senator said the Governor included this money to pay for these activities.

Mr. Combs said decision units E-900 through E-910 will transfer 8 administrative personnel from this account and will create a new Bureau of Administration account. He stated this will also transfer 14 Weights and Measures inspectors and the newly approved Weights and Measures inspector to a new Weights and Measures program account. He said this delineates the various programs presently in this account and establishes separate accounts for the programs.

Senator Raggio asked whether this bureau would be outside the Department of Business and Industry. Mr. Combs said there would be two new bureaus, the Bureau of Weights and Measures and the Bureau of Administration, in addition to the existing Bureau of Plant Industry. He stated that all of the bureaus will be within the Division of Agriculture. If the Division of Agriculture is removed from the Department of Business and Industry, these bureaus will be removed with the division.

Senator Raggio asked whether the additional proposal is that a separate department be made. Mr. Combs said the proposal in A.B. 103 would transfer all of the bureaus in the Division of Agriculture into a new department.

ASSEMBLY BILL 103: Reestablishes state department of agriculture. (BDR 18-102)

B&I, Gas Pollution Standards – Budget Page B&I-158 (Volume 2)

Budget Account 101-4537

Mr. Combs said the Joint Subcommittee on General Government recommended funding for two new chemists and their associated costs, as recommended in decision unit M-200. He said the two new positions would be funded through a transfer from the Department of Motor Vehicles and Public Safety (DMV&PS) air pollution control account. He commented that most of the funding for this budget is provided through this transfer of air pollution control funds.

Mr. Combs noted the subcommittee also approved funding for the purchase of a vapor liquid tester and a quad BTU analyzer for each of the division’s petroleum laboratories as recommended in decision unit E-720.

Mr. Combs stated the subcommittee changed the funding source for the two Weights and Measures Inspectors included in this account. He said these two Weights and Measures Inspectors will be transferred to the new Weights and Measures Bureau as part of the reorganization plan. He noted The Executive Budget recommended funding more than 74 percent of the costs with general funds whereas in the past they had been funded entirely through petroleum inspection fees in the transfer from the DMV&PS air pollution control funds. He said the subcommittee voted to continue using the air pollution control funds as the funding source rather than fund the positions with general funds.

Senator Raggio asked whether there was any legal problem with the percentage of funding that comes from general funds. Mr. Combs replied, "No, there is no required percentage of air pollution control funds, it is a legislative decision as to how they wish to use those funds."

B&I, AG Administration – Budget Page B&I-140 (Volume 2)

Budget Account 101-4554

Mr. Combs noted this account creates the new Bureau of Administration. He said that by approving the transfers in the Plant Industry account this committee has approved the creation of this new account. He noted the subcommittee approved the transfer of funds from the Gas Pollution Standards account to offset the costs of administering that account by the positions in this account as requested in decision unit E-801.

Mr. Combs said the subcommittee directed the Division of Agriculture to develop a cost allocation plan that would allocate the administrative costs of the division to the various fee-funded and General Fund accounts in the division. He said when the division attempted to develop the cost allocation plan it became apparent many of the fee-funded accounts in the Division of Agriculture did not have sufficient revenue to contribute to the cost allocation plan. He said that means the General Fund is in some manner supporting those fees-funded programs. He noted the subcommittee voted to issue a Letter of Intent directing the division to develop a cost allocation plan and funding policy that would allow the plan to be implemented prior to the next biennial budget cycle. He said the subcommittee directed the division to present a report to the IFC not later than June 30, 2000, so it could be determined whether the plan was workable and could be included in the next budget cycle.

Senator Raggio asked when the new division would commence operation. Mr. Combs replied, "July 1, 1999." Senator Raggio asked how the funding is authorized until the division submits the proposed funding policy. Mr. Combs said these positions are currently in the Plant Industry account and are being funded with General Fund dollars. He said when the positions are moved to the new Bureau of Administration account they will continue to be funded in the same way until a cost allocation plan is developed and implemented. He commented that a portion of the funding should be general funds but the fee-funded accounts should also be contributing to this function.

B&I, AG Weights & Measures – Budget Page B&I-154 (Volume 2)

Budget Account 101-4551

Mr. Combs said this is a new account that was approved when this committee approved the Plant Industry account. He commented that this account will be a bureau in the new Department of Agriculture.

Mr. Combs noted the subcommittee approved placing the Weights and Measures Supervisor in the unclassified service of the state with an increase in salary as recommended in decision unit E-805. He said the division proposed this because they wanted to put the supervisor of the bureau on the same or similar level to their other bureau chiefs. He commented that the subcommittee felt this request was reasonable.

Senator Raggio asked whether the supervisor of the Bureau of Agricultural Administration is an unclassified position. Mr. Combs replied that other bureau chiefs in the division are unclassified.

B&I, Agriculture Registration/Enforcement – Budget Page B&I-163 (Volume 2)

Budget Account 101-4545

Mr. Combs said the subcommittee did not approve a new Chemist II position that was recommended in decision unit M-200 for the pesticide laboratory in the division’s Reno office. He said the position was funded through a reduction in the reserve. He noted the position could not be funded through the increased grant funds being brought into this account. He commented that by not being able to use the grant funds the reserve would have to be used. He said the division presented the subcommittee with a proposal to increase fees during the biennium to ensure the continued funding for the position. Rather than fund the position through a reduction in the reserve, the subcommittee determined that the position should be denied. He said the division was told that if the additional fee revenues became available during the biennium, the division could submit a request to the IFC for approval of the position at that time.

Mr. Combs said the other decision units in this account were for upgrades to computers and replacement computers.

Senator Raggio asked how not getting the Chemist II position impacted the agency’s operation. Mr. Combs said the position would have been used to analyze pesticide samples to determine whether "the pesticides comply with their labeling requirements" and to determine whether they work in the manner indicated. He said the division indicated the position is needed, but without the fee funding available to fund it they could not afford the position. Senator Raggio noted there would be $90,000 at the end of FY 2001 if the position were approved. Mr. Combs said the problem with a $90,000 reserve in this account is the reserve balance should be between 2 and 6 months or more of operating expenditures for this account. He commented there is a lot of expensive laboratory equipment used to conduct the required analysis. If the equipment breaks it is necessary to have a funding source to either replace or repair the equipment.

Senator Raggio said the subcommittee did indicate the division could submit a request to the IFC if the funding becomes available. Mr. Combs said that is correct. Since it is fee funding, the subcommittee wanted the division to be able to request the IFC to approve the position if the fees are increased during the biennium or the fee revenue increases in another manner.

B&I, Grade & Certification of Agricultural Products – Page B&I-168 (Volume 2)

Budget Account 101-4541

Mr. Combs said the Joint Subcommittee on General Government did not hold a hearing on this account. He said he recommends closing the account as recommended by the Governor.

B&I, Livestock Inspection – Budget Page B&I-176 (Volume 2)

Budget Account 101-4546

Mr. Combs said the subcommittee approved the account as recommended by the Governor with some very minor technical adjustments. He said the subcommittee approved funding for travel and registration for two employees to attend the International Livestock Identification Association meeting and funding for uniforms and a quarterly uniform allowance for eight positions as recommended in decision unit E-150. He stated, "This account has had funding concerns in the past and this travel was formerly conducted out of this account; the employees did not attend the meeting last year." Senator Raggio noted not enough income was received from the inspection fees in past years to cover all of the brand inspectors expenses and asked whether that is still a problem. Mr. Combs said the account is still not supporting itself. The division has left the bureau chief position vacant for about 2 years to save money in this account. He commented that the reserve for this account is growing and is currently about $80,000. Mr. Combs commented that during the next biennium the brand re-recording fees would be collected. He noted these fees are collected every 4 years.

Senator Raggio asked who supervises the program, with the bureau chief position being vacant. Mr. Combs said the Chief Deputy Brand Inspector position is currently supervising the program and the administrator of the division has also taken on some of the supervisory tasks. Senator Raggio asked whether the subcommittee was satisfied that there are sufficient inspectors available for the needs of the industry. Mr. Combs replied there are about 100 inspectors at present.

B&I, Veterinary Medical Services – Budget Page B&I-184 (Volume 2)

Budget Account 101-4550

Mr. Combs said the base budget was inadvertently increased for seasonal salaries in this account from $38,210 (the FY 1998 actual) to $84,076. He said the joint subcommittee voted to adjust the base budget down to $38,676 for each year of the biennium based upon the division’s estimate of the amount needed to conduct its programs. He noted the decision units for this account are for training courses and Internet access for several positions in the Reno office.

Mr. Combs said the subcommittee approved funding to purchase a laboratory dishwasher requested in decision unit E-720. He said the laboratory equipment is currently being washed by hand.

B&I, Noxious Weed & Insect Control – Budget Page B&I-190 (Volume 2)

Budget Account 101-4552

Mr. Combs said this account is funded through the sales of vertebrate pest bait and insects. He said it is a self-perpetuating account. He noted there is a provision in statute which stipulates that when a landowner does not control a noxious weed or insect problem on his property, the division will take care of the problem and the landowner is required to reimburse the division. He said the subcommittee closed the account as recommended by the Governor.

B&I, Predatory Animal & Rodent Control – Budget Page B&I-191 (Volume 2)

Budget Account 101-4600

Mr. Combs said the subcommittee voted to approve this budget as recommended by the Governor with some technical adjustments and the elimination of overtime that was recommended in decision unit E-250. He said the overtime pay was for employees that are used during the lambing season. This account has paid overtime in the past but it has not been budgeted and the subcommittee did not think it was necessary to change that practice.

Mr. Combs said the subcommittee approved funding for a new field assistant to serve Clark County and the surrounding areas as recommended in decision unit E-375. He said the state’s portion of the position, one-half of the position, will be funded through an appropriation from the General Fund. He commented that the other half of the position would be funded through a transfer from the Clark County Desert Conservation Plan. Mr. Combs said that in return for the funding from the conservation plan, one-half of the position’s time must be devoted to protecting threatened and endangered species. Therefore, he said, the position will only spend one-half of its time addressing "wildlife conflicts with the general population of Clark County."

Mr. Combs pointed out that the subcommittee approved the transfer of the half-time Field Assistant II position from the Woolgrowers’ Predatory Animal Control account to this account as recommended in decision unit E-900. He said the subcommittee approved the transfer of the position contingent upon the costs for the position continuing to be funded totally through the per-head tax on sheep.

B&I, Woolgrowers Predatory Animal – Budget Page B&I-196 (Volume 2)

Budget Account 101-4604

Mr. Combs said that transferring the half-time Field Assistant II position from this account to the Predatory Animal and Rodent Control account eliminates this account.

B&I, Nevada Beef Council – Budget Page B&I-199 (Volume 2)

Budget Account 101-4491

Mr. Combs said the Joint Subcommittee on General Government did not hear this budget. He noted The Executive Budget eliminates the sole legislatively approved position in this account. He said the Nevada Beef Council decided during the biennium not to fill the vacant position. The council believes it can adequately perform its promotional and research activities through contracts.

Mr. Combs said The Executive Budget included decision unit E-900 to transfer this account out of The Executive Budget. He said the Beef Council decided not to eliminate this account after The Executive Budget was submitted and the council eliminated decision unit E-900 from its budget request. Mr. Combs said that because decision unit E-900 was eliminated, someone had to administer the account; the one position in this account had been eliminated. He said that because the Division of Agriculture had been administering the account in the past, the division was asked to provide an estimate of the cost to continue administering it. Mr. Combs said the Division of Agriculture has indicated that its costs related to this budget account will be $8,979 in FY 2000 and $9,105 in FY 2001. These amounts were added into this account.

Senator Raggio asked where the funding for this account comes from. Mr. Combs replied that the account is funded through an assessment imposed on sellers of cattle in Nevada. He said half of the assessment is retained in this account and half of the assessment is remitted to the Cattleman’s Beef Promotion and Research Board.

B&I, Minerals – Budget Page B&I-212 (Volume 2)

Budget Account 101-4219

Mr. Combs said the subcommittee voted to close this account as recommended by the Governor. He said the subcommittee voted to close this account based on a projected fee increase for filing a mining claim and for producing or marketing oil. He noted that this account was experiencing a considerable revenue shortfall because of the continued low prices for minerals.

Mr. Combs said Assembly Bill 103 and Assembly Bill 450 both contain provisions that would increase the fee or move the fee out of statute and put it in administrative regulation.

ASSEMBLY BILL 103: Reestablishes state department of agriculture. (BDR 18-102)

Senator Raggio said that either way it is necessary for this account to be funded by increasing the revenues. Mr. Hataway agreed the Division of Minerals needs a fee adjustment to be able to continue. Senator Raggio stated, "This is not General Fund dollars, it is a fee adjustment." Mr. Hataway confirmed the funding would come from a fee adjustment, not from the General Fund.

Senator O'Donnell said the industry supports the fee increase so they can keep this account.

B&I, Labor Relations – Budget Page B&I-218 (Volume 2)

Budget Account 101-3900

Mr. Combs said the subcommittee approved funding for the increased costs of the office’s copy machine lease as recommended in decision unit E-710. He said the subcommittee also approved funding for the purchase of a safe for each office location and for the purchase and use of cellular phones by the auditors and compliance investigators as recommended in decision unit E-720.

Mr. Combs noted the subcommittee received testimony that there would be no positions available during the 1999-2001 biennium to administer the state’s apprenticeship program because a position requested by the agency was not approved in The Executive Budget. The subcommittee voted to approve funding for an Apprenticeship Training Representative position.

B&I, Employees Management Relations Board – Budget Page B&I-221 (Volume 2)

Budget Account 101-1374

Mr. Combs said the subcommittee voted to close this account as recommended by the Governor. He said the subcommittee approved funding to conduct 3 additional hearings during FY 2000 and to conduct 4 additional hearings during FY 2001 as recommended in decision unit M-200. He noted the subcommittee recommended that the unclassified pay bill include an increase in salary for the secretary of the board in the amount of $4,797.

Senator Raggio noted that the salary for unclassified employees would be addressed in the unclassified pay bill.

B&I, Athletic Commission – Budget Page B&I-238 (Volume 2)

Budget Account 101-3952

Mr. Combs said the subcommittee recommended this account be closed as recommended by the Governor.

Mr. Combs said the subcommittee approved funding for overtime pay for the Athletic Commission’s employees, and funding for additional out-of-state travel, increased funding for in-state travel, funding to provide an additional Inspector at each event supervised by the commission. Funding was also approved for additional in-state and out-of-state travel for the members of the medical and advisory board and recommended in decision unit E-250. He pointed out the subcommittee recommended an amendment to the unclassified pay bill to increase the salary of the Executive Director of the Athletic Commission by not more than $10,000.

DEPARTMENT OF ADMINISTRATION

Buildings & Grounds – Budget Page ADMIN-69 (Volume 1)

Budget Account 710-1349

Brian Burke, Program Analyst, Fiscal Analysis Division, LCB, said the Governor’s recommended renovation project listing included $281,425 in FY 2001 to balance the HVAC (heating, ventilating, and air conditioning) and upgrade sensors and controls at the Grant Sawyer State Office Building in Las Vegas. Mr. Burke said that after considerable discussion, the Joint Subcommittee on General Government recommended reducing funding for the Sawyer HVAC project from $281,425 to $50,000 in FY 2001. This will fund the balancing portion of the request only. Further, Mr. Burke said, the subcommittee recommends a Letter of Intent directing the agency to report semiannually on the progress of the project and the status of alleged building-related illnesses.

Mr. Burke said the Governor recommended $176,000 for carpet renovation in FY 2001 for the Sawyer Building in Las Vegas. He said at the encouragement of the subcommittee, the Buildings and Grounds Division reevaluated its need to replace four floors of carpeting and submitted a revised plan, which was supported by the subcommittee, to recarpet high-traffic areas only in the Sawyer Building at this time. He noted this reduced the FY 2001 costs from $176,000 to $94,248 – a reduction of $81,752.

Clear Creek Youth Center – Budget Page ADMIN-85 (Volume 1)

Budget Account 101-1353

Mr. Burke said the Joint Subcommittee on General Government concurred with the Governor’s recommendations for decision unit E-710 and E-730 for the replacement equipment and maintenance funding. He pointed out that the subcommittee recommends adding a General Fund appropriation of $50,000 for high-priority maintenance items at the center. Clear Creek currently has a backlog of necessary maintenance projects with an estimated cost of $319,092.

Mr. Burke said the subcommittee discussed several alternatives regarding the continued operation and management of the Clear Creek center. He said the subcommittee reviewed a proposal submitted by the Girl Scouts and also considered the possibility of transferring responsibility for Clear Creek operations to the Division of State Parks. He commented that at the April 27, 1999, closing hearing, the B&G (building and grounds) administrator mentioned that other proposals (such as a boarding school operation) are being considered.

Mr. Burke stated the subcommittee recommends the B&G administrator continue negotiating with parties interested in operating and managing the Clear Creek Youth Center (including the Division of State Parks). He said the subcommittee further recommends a Letter of Intent be written directing B&G to present a report on viable alternatives for the Clear Creek center. He said the report should be presented for consideration by the Interim Finance Committee (IFC) at the first meeting after January 1, 2000.

Senator Raggio said the joint subcommittee did not want to limit the various groups using the Clear Creek center at this time. He mentioned that while the Girl Scout proposal of $1 a year for 10 years with the option to purchase was inviting, the joint subcommittee felt that in the interim there should be discussions and negotiations with all parties including the state parks division. He commented that the B&G administrator would present the alternatives to the Legislature at the next legislative session. He noted the Clear Creek Youth Center is a continual drain on the state and there is a large backlog of maintenance that needs to be performed.

Marlette Lake– Budget Page ADMIN-89 (Volume 1)

Budget Account 712-1366

Mr. Burke stated the subcommittee concurs with the Governor’s recommendations on the Marlette Lake budget with technical adjustments.

DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES

CNR Administration – Budget Page CNR-1 (Volume 3)

Budget Account 101-4150

Mr. Burke said the subcommittee recommends approval of the new Accounting Clerk position for the Nevada Division of Forestry in Elko. Further, he said, the subcommittee recommended approval of Amendment No. 11. This amendment makes the position full-time rather than half-time, adding General Fund appropriations of $11,106 in FY 2000 and $11,038 in FY 2001.

Mr. Burke said the subcommittee recommends approval of the new Accountant Technician position. Further, he said, the subcommittee recommends approval of Amendment No. 86, which accelerates the hiring date from October 1, 1999, to July 1, 1999. Portions of the General Fund revenues are supplanted with Water Basin Account allocations which reduces General fund appropriations by $1,248 in FY 2000 and $10,380 in FY 2001.

Mr. Burke said the subcommittee recommends denial of the decision unit E-810 recommendation for terminal annual and sick leave funding. He said the subcommittee noted the availability of partial payment, if needed, from the statutory contingency fund. He pointed out that the subcommittee also noted the agency could approach the IFC for additional funding if a shortfall is experienced due to the terminal annual and sick leave payoffs.

Mr. Burke commented that the subcommittee recommends approval of the department’s request to redirect unspent appropriations from S.B. 211 of the Sixty-Ninth Session to a study to enhance the wild horse adoption program. He noted that if approved by the full committee, fiscal and legal staff would work with the department on legislation needed to extend the reversion date of the money appropriated in S.B. 211.

Senator Raggio asked whether the unspent appropriations were to study the adoption program. Mr. Burke replied, "Yes. If approved a private foundation would be established to assist in marketing wild horses and burros." Senator Raggio asked where the authority to extend the reversion date of the money would be. Mr. Burke replied that Fiscal Analysis Division staff would work with the Legal Division to make the appropriate changes.

Senator Coffin asked about the proposed move of the office from Reno to Carson City. Senator Raggio replied that discussion was with the Division of Wildlife. Mr. Burke said the subcommittee did discuss this move. The department indicated it would not move during this biennium but could potentially move during the next biennium.

Environmental Protection Administration – Budget Page CNR-9 (Volume 3)

Budget Account 101-3173

Mr. Burke said the subcommittee concurs with the Governor’s recommendations with technical adjustments.

DEP Air Quality – Budget Page CNR-14 (Volume 3)

Budget Account 101-3185

Mr. Burke said the subcommittee recommends approval of the Governor’s recommendations with technical adjustments.

DEP – Mining Regulation/Reclamation – Budget Page CNR-25 (Volume 3)

Budget Account 101-3188

Mr. Burke said this is a new budget account recommended for the 1999-2001 biennium. He said that due to the increase in activity associated with this bureau’s mining regulatory responsibilities, the subcommittee concurs with the Governor’s recommendations that all 18 of the mining staff and associated costs in the Water and Mining budget (account 101-3186) be transferred to this new budget account.

He commented that fees collected from the mining industry support the bureau. He noted that the bureau regulates approximately 185 mining operations.

Mr. Burke said the subcommittee recommends technical adjustments only to this account.

DEP Water and Mining – Budget Page CNR-28 (Volume 3)

Budget Account 101-3186

Mr. Burke said the subcommittee noted that water permit revenues are budgeted at approximately $1.5 million in each year of the biennium, which is a 44 percent increase over FY 1998 fees of $1.037 million. He pointed out that water permit fee increases are anticipated to provide the additional revenue.

Mr. Burke commented the Division of Environmental Protection reports that fees have not been increased since 1990 for discharge permits and since 1991 for underground injection control activities. He noted the Division of Environmental Protection plans a series of informal and formal workshops with the regulated community to evaluate the current funding structure, changes needed, and revised fee amounts. He said the subcommittee did recommend approval of the fee increase.

Mr. Burke said the agency administrator testified the environmental commission has the authority to raise the water permit fees. The administrator also testified he has conferred with the Budget Division and confirmed that these fee increases would not be subject to veto by the Governor if approved by the Legislature.

Division of Conservation Districts – Budget Page CNR-39 (Volume 3)

Budget Account 101-4151

Mr. Burke said the subcommittee recommends approval of the Governor’s recommended budget with technical adjustments.

State Lands – Budget Page CNR-45 (Volume 3)

Budget Account 101-4173

Mr. Burke said S.B. 201 of the Sixty-ninth Session included $210,000 for the development of an integrated database geographic information system for the Division of State Lands.

Mr. Burke commented that to date, $182,465 has been committed. He said the agency has reported that additional report work is needed which will extend the project into FY 2000, but the project will stay within the $210,000 budgeted amount. He said the subcommittee recommends approval to extend the reversion date for the geographic information system (GIS) one-shot funding. He commented that an amendment to S.B. 305 will be submitted to include this reversion extension.

Mr. Burke pointed out that the State Lands base and maintenance budgets include $20,000 for each year of the biennium for land management needs, which include surveys and appraisals. He noted that half of the amount is funded with General Fund appropriations. He said S.B. 508 creates a revolving account for land management and appropriates $20,000 for the biennium.

Mr. Burke stated that the subcommittee recommends fiscal staff eliminate the land management category if S.B. 508 is approved.

He noted the subcommittee recommends approval of the new Environmental Scientist III position funded from Tahoe Bond interest. He commented that the subcommittee recommended accelerating the hire date of the position from October 1, 1999, to July 1, 1999. Senator Raggio asked whether the division could fill the position by July 1, 1999. Mr. Burke replied that State Lands had indicated it could.

Forestry – Budget Page CNR-52 (Volume 3)

Budget Account 101-4195

Mr. Burke said the subcommittee recommends approval of funding for a state-employed Aircraft Mechanic position. He noted the cost of the position would be shared between the Division of Forestry and the Nevada Division of Wildlife. He identified that technical adjustments and equipment removal reduces the cost in the Forestry budget from over $105,046 to $54,313 in FY 2000 and from $59,702 to $55,902 in FY 2001.

Mr. Burke said the Governor’s budget reflects all of the training funds for the mechanic in the first year of the biennium. He noted the subcommittee recommends approval for the training funding recommended in FY 2000 to be available for both years of the biennium.

Mr. Burke said the subcommittee recommends approval of a General Fund appropriation to support a dispatcher for the new Elko Dispatch Center as requested in decision unit M-201. He said the division indicated the projected completion date of the dispatch center is now April 4, 2000. With the revision, the start date for the new position should be delayed to February 1, 2000. He said that because of this revision the General Fund appropriations are reduced by $9,201 in FY 2000 and $310 in FY 2001.

Mr. Burke stated that the subcommittee recommends denial of the DMV&PS Air Pollution Control funds to support a new Forester III position and associated costs for the Environmental Improvement Program (EIP). He said the subcommittee recommends this module be placed on the add-back list and possibly be funded if General Fund money is available. He noted the Assembly subcommittee did not concur with this recommendation. Senator Raggio asked what action the Assembly subcommittee wanted to take. Mr. Burke said they included the Forester III to be funded with DMV&PS Air Pollution Control funds. Senator Raggio said that does not seem unreasonable.

Senator O'Donnell replied that the reason the Senate subcommittee excluded the Forester III position for the DMV&PS funding was the state continues to see the depletion of the highway funds. Senator Raggio noted these funds were pollution funds. Senator O'Donnell said there was a consensus within the Senate subcommittee that it did not want to see DMV&PS Air Pollution Control funds used for this purpose. The senator said these funds were coming from only Washoe and Clark Counties.

Senator Jacobsen said he agreed with the Assembly members of the subcommittee and believed the DMV&PS Air Pollution Control funds should be spread equally over Nevada and not just allocated to Lake Tahoe.

Senator Neal said it is his position the planning funds needed for Lake Tahoe should come out of the General Fund budget. He commented that the State of Nevada has signed an agreement with the State of California to manage the Lake Tahoe problems and the funding for the project should not be just from Washoe and Clark Counties. He stated that his position is the funds for the Forester III position should come from the General Fund budget.

Senator Raggio asked whether this was the same position the Senate subcommittee took on the proposed funding for the Tahoe Regional Planning Association (TRPA). Senator Neal replied "Yes." Senator Raggio asked how much of the TRPA budget was from the DMV&PS Air Pollution Control funds. Mr. Burke replied the entire budget for the TRPA was from the DMV&PS Air Pollution Control funds. Senator Raggio stated there is no question that the state must fund TRPA. Senator Neal agreed.

Senator Raggio said the joint subcommittee did not approve the use of DMV&PS Air Pollution Control funds to support the new Forester III position but recommended the funding for the position be placed on the priority list to be funded with general funds if available.

Forestry Intergovernmental Agreements – Budget Page CNR-63 (Volume 3)

Budget Account 101-4227

Mr. Burke said the Governor’s recommendation reflects Storey County’s request to discontinue its participation in the cooperative fire district with the Nevada Division of Forestry. He said representatives from the county and the forestry division met and agreed to revise the cooperative agreement whereby the state would fund personnel and related costs (uniform allowances, physicals, employee tort and bond, and the statewide the attorney general cost allocations) and Storey County would fund operating expenses directly. He said this arrangement would be similar to current agreements with several northern counties.

Mr. Burke said the subcommittee recommends approval of decision module E-400 as amended, which has the state retaining responsibility for Storey County personnel expenditures and Storey County assuming direct responsibility for operating costs.

Senator Jacobsen said he wanted to make sure Storey County understood that the forestry equipment in Storey County remained the property of the Division of Forestry. Senator Raggio asked why it would become county property. Senator Jacobsen replied that initially Storey County wanted to keep the Forestry Division out of the county and keep the equipment that was there.

Forest Fire Suppression – Budget Page CNR-68 (Volume 3)

Budget Account 101-4196

Mr. Burke said decision unit M-200 represents the fire suppression account’s share of the Aircraft Mechanic’s position and related costs. He said the subcommittee recommends adjustments in decision unit M-200 consistent with the technical corrections and equipment reductions made in the Forestry account.

Mr. Burke said the subcommittee recommends restoring authority to the FY 1999 work program amounts as requested in decision unit M-201. Senator Raggio noted the state is always concerned that there be sufficient funding authorized to deal with the problems which can occur.

Forestry Honor Camps – Budget Page CNR-71 (Volume 3)

Budget Account 101-4198

Mr. Burke said the Governor’s budget recommends Forestry Honor Camp reimbursements of $1.2 million in each year of the biennium. He noted the FY 1998 actual reimbursements were $1.28 million. He said the subcommittee recommends increasing the base budget reimbursement revenues to the $1.28 million amount with a corresponding General Fund decrease of $80,000 in each year of the biennium. He stated this was consistent with the FY 1998 actual revenues. He further stated the subcommittee also recommends increasing project reimbursement revenues by $40,000 in FY 2001 to reflect the additional revenues committed by the Nevada Department of Transportation (NDOT) for vehicle refurbishment.

Mr. Burke noted the subcommittee recommends eliminating the three additional Silver Springs crews for the Silver Springs Conservation Camp sought in decision unit M-200 because there will be no expansion of the camp during the biennium.

Forestry Nurseries – Budget Page CNR-77 (Volume 3)

Budget Account 257-4235

Mr. Burke said the subcommittee concurs with the Governor’s recommendation with technical adjustments.

Water Resources – Budget Page CNR-81 (Volume 3)

Budget Account 101-4171

Mr. Burke said the subcommittee recommends approval of the Governor’s recommendations with technical adjustments.

Wildlife – Budget Page CNR-86 (Volume 3)

Budget Account 101-4452

Mr. Burke said that there was concern expressed about the budgeted $14,483 ending reserve balance in this account. He said the subcommittee recommends approval of Wildlife Amendments No. 61, 62, and 63, which adjust federal fee and transfer revenues and restore the ending reserve balance to $2.1 million.

Mr. Burke said the subcommittee concurs with the Governor’s recommendation to add 8 new positions to the Wildlife budget.

Mr. Burke noted that with the Division of Wildlife administrator’s concurrence, the subcommittee recommends reducing operating costs in decision unit E-400 by $148,500 in FY 2000 and $400,940 in FY 2001. He said the subcommittee further recommends placing these amounts in reserve with the understanding that Wildlife can approach the IFC when additional information is available to request approval to move the funding to the operating category.

Mr. Burke stated that the subcommittee wishes to eliminate the $132,000 each year budgeted for terminal annual and sick leave in decision unit E-400. Senator Raggio asked why this was recommended. Mr. Burke replied that with the reserve which Wildlife had after the adjustments of $2.1 million, the subcommittee felt if a shortfall occurred the Division of Wildlife could come back to the IFC. Senator Raggio asked where the IFC would get the money. Mr. Burke replied, "Out of the reserve account." Senator Raggio asked what the reserve balance will be if this action is approved in FY 2001. Mr. Burke replied, "The ending reserve balance projected for FY 2001 is $2.1 million." He said Wildlife omitted several revenue items in its base budget request. He commented the amendments bring the amounts up to the FY 1998 actual amounts. He stated these are realistic revenues.

Mr. Burke said there were several adjustments to correctly fund Wildlife’s transfer to the Division of Forestry for the aircraft mechanic.

Mr. Burke said the division submitted a revised equipment listing which shifts $12,737 of the equipment costs from FY 2001 to FY 2000 and reduces FY 2001 equipment by $104,218. He stated the subcommittee recommends approval of the division’s revised equipment list, which reduces equipment costs by $91,481 for the biennium.

Wildlife Obligated Reserve – Budget Page CNR-98 (Volume 3)

Budget Account 101-4458

Mr. Burke said there was some concern about the ending obligated reserve balance. The Governor’s budget reflected a negative ending balance. Mr. Burke said a technical adjustment restores the FY 2001 ending reserve balance to $75,191. Senator Raggio asked what action was taken to restore this account. Mr. Burke replied, "It was primarily gifts and donation revenues. The division knows that if the revenue is not received it cannot be spent."

Wildlife – Boating Program – Budget Page CNR-103 (Volume 3)

Budget Account 101-4456

Mr. Burke said there were several large technical adjustments to this account. He said the subcommittee noted that the Boating account’s share of the capital improvement program (CIP) project 99-C18 is not accounted for in the Governor’s recommended budget. He pointed out that CIP 99-C18 is a State Department of Conservation and Natural Resources project in Elko that would construct a 4,000-square-foot office building, a 1,600-square-foot shop, and a 3,000-square-foot metal storage building. He noted the office would include a boat registration counter. He stated that the subcommittee recommends a $200,000 adjustment in decision unit E-376 to provide the Boating account’s share of the Governor’s recommended CIP project 99-C18. He said the actions taken in this account would reduce the ending reserve balance by $1.1 million to about $1.7 million at the end of FY 2001.

Senator Raggio asked whether this is the account used for the boating permits. He asked whether boat fuel tax money is deposited to this account also. Mr. Burke replied "Yes" and explained there was an adjustment to the boat fuel tax estimate as part of the technical adjustments.

State Parks – Budget Page CNR-113 (Volume 3)

Budget Account 101-4162

Mr. Burke said the subcommittee recommends revising the boat fuel tax revenues based on the current estimates. He said this would allow the state to save $94,568 in General Fund appropriations in each year of the biennium. Senator Raggio asked how much the boat fuel tax revenues increased. Mr. Burke replied it was increased from about $1.4 million up to $1.5 million.

Mr. Burke said the subcommittee recommends approval of the new Park Ranger position to support the environmental improvement program (EIP) program for the Lake Tahoe Basin funded with DMV&PS pollution control revenues. He commented that the Senate subcommittee did concur with the usage of DMV&PS Air Pollution Control funds with the proviso the usage of Air Pollution Control funds is dependent upon the passage of S.B. 511. He said if S.B. 511 is not approved, the subcommittee recommends funding the new position and associated costs with general funds.

Senator Raggio asked what the dollar value of this is. Mr. Burke replied that decision unit E-410 for the transfer from DMV&PS Air Pollution Control funds is $54,000 for FY 2000 and $29,000 for FY 2001.

Mr. Burke said the subcommittee strongly recommended that all State Department of Conservation and Natural Resources enhancements funded with DMV&PS Air Pollution Control revenues not be built into the base budgets of the affected accounts in the 2001-03 biennium. He said the subcommittee stated that if the Budget Division wishes to continue the initiatives (if approved by the Legislature) in future biennia, the initiatives must continue to be reflected as enhancement decision items. He pointed out that the subcommittee wishes to have a Letter of Intent prepared to formalize this understanding.

Mr. Burke said the subcommittee recommends approval of the park maintenance funding recommended in decision unit E-730 as amended in the amount of $346,715 in FY 2000 to provide park staff with materials and labor needed to complete the highest-priority maintenance projects. He noted the Governor’s recommendation places all parks funding in the first year of the biennium. He said the subcommittee recommends the FY 2000 funding be available for both years of the biennium and fiscal staff will work with the Legal Division to ensure appropriation bill language contains this provision.

Mr. Burke stated that park capital improvement one-shots have not been recommended in The Executive Budget. He noted the subcommittee concurs with the division’s request to carry forward the balance of existing General Fund appropriations in the park improvement budget accounts to complete several ongoing projects that have been delayed and will not be finished in FY 1999. He commented the potential carry-forward is about $1,180,010.

Senator Raggio asked whether these projects were in the CIP budget. Mr. Burke replied these projects are not included in the current CIP budget, they are carryovers from the 1995 and 1997 Legislative Sessions.

Senator O'Donnell asked whether the $1.1 million of carry-forward money is in the Governor’s CIP budget. Mr. Hataway replied the Budget Division did not take this money into consideration when preparing the budgets.

Mr. Burke said that during the March 25, 1999, meeting of the Joint Subcommittee on Public Safety, Natural Resources, and Transportation, there was considerable discussion regarding park funding sources and unfunded capital improvements (the park administrator mentioned a $30 million backlog). He said the subcommittee encourages the full committee to consider expanding funding sources for the Division of State Parks to possibly include room tax revenues or increased General Fund appropriations.

Senator Raggio asked what the subcommittee suggested be added to the room tax to get the $30 million needed. Mr. Burke replied there was no specific recommendation by the subcommittee. Senator Rawson suggested forming a task force to study the possible alternatives for obtaining the needed funding. He said he toured a lot of the state parks prior to this session and he can confirm that a lot of work needs to be performed. He suggested considering a state maintenance bond or some other "creative method" of funding the needed repairs. Senator Raggio said it may be possible to issue a park improvement bond to fund these repairs but the bond should not be used to create new parks. He commented this is a problem that will require considerable more thought and discussion.

Water Planning – Budget Page CNR-126 (Volume 3)

Budget Account 101-4161

Mr. Burke said the subcommittee recommends closing this account as recommended by the Governor with technical adjustments only.

Tahoe Regional Planning Agency – Budget Page CNR-136 (Volume 3)

Budget Account 101-4204

Mr. Burke said the subcommittee wishes to restore Nevada’s share of the previously authorized 3 percent cost of living adjustment (COLA) at a General Fund cost of $14,994 in each year of the biennium.

Mr. Burke stated the subcommittee recommends denial of the Governor’s recommended proposals in the "pollution control-funded" decision units. He said the subcommittee does not concur with the use of DMV&PS Air Pollution Control transfers to fund the TRPA. He noted the subcommittee’s recommendation would restore $670,173 to both years of the biennium to the adjusted base General Fund appropriations as a result of eliminating of decision unit E-404.

Mr. Burke commented the committee should note the Assembly did not concur with the proposed elimination of DMV&PS Air Pollution Control transfers to fund the base and enhancement decision units recommended for TRPA. He noted The Executive Budget does not fund Nevada’s share of TRPA’s request for salary comparability and 3 percent COLAs in the upcoming biennium. He said the subcommittee recommends approval of TRPA’s request for Nevada’s share of salary comparability; however, he said, the subcommittee does recommend denying the COLA adjustments. He noted the subcommittee recommends adding General Fund appropriations of $30,192 in each year of the biennium to fund the salary comparability. He said the subcommittee also wishes to have a Letter of Intent drafted which directs TRPA to have an independent party (possibly the state Department of Personnel) review future salary comparability and reclassification requests.

Senator Raggio asked what the joint subcommittee recommendation was in reference to the base and maintenance portion of this budget. Mr. Burke replied the actions that the subcommittee took on the "E" decisional units affected the base decision units. He noted the base was funded with $670,000 of General Fund dollars. Senator Raggio commented he is concerned that the TRPA needs to be maintained and Nevada has agreed to fund one-third of the cost of operations. He asked whether the action of the subcommittee was sufficient to sustain the existing operations of the TRPA. Mr. Burke replied that the action by the Senate side of the subcommittee is sufficient to sustain the base with adjustments for previously authorized COLAs and salary comparability.

Senator Raggio asked what impact denying the "E" decision units had on the budget. Mr. Burke replied, "You are restoring $670,000 in General Fund appropriation in each year of the biennium." Senator Raggio asked whether all of the "E" decision units were originally funded with the Air Pollution Control funds and the Assembly approved it but the Senate is saying "we will put general funds into the budget to replace the Air Pollution Control funds for the budget." Mr. Burke replied, "Yes, for the base. The ‘E’ decision units were denied by the Senate subcommittee." Senator Raggio asked the total amount of General Fund money being requested. Mr. Burke replied, "the amount is $670,000 for the base budget each year of the biennium, $14,994 in previously authorized COLAs each year, and $30,000 for the salary comparability for a total of about $715,000 each year of general funds."

Senator Coffin said he supports the action taken by the Senate subcommittee because Washoe and Clark Counties had applications submitted to use the reserve fund money. He said the Governor should explain why he used these funds at a time when both Washoe and Clark Counties were having environmental problems.

Mr. Hataway stated the additional requests from Washoe and Clark Counties were received after The Executive Budget was prepared. He said when the Budget Division looked at the requests there were sufficient reserves to sustain the allocations for the two counties plus the allocations made throughout The Executive Budget for pollution-type activities in the Lake Tahoe Basin.

Senator O'Donnell said the Budget Division "did not tell Clark and Washoe Counties what they were doing until after they did it."

Senator Raggio commented that all of the money in the Air Pollution Control fund is from the fees charged that are charged for the inspection of automobiles. He noted that only Clark and Washoe Counties charge these fees.

Debbra J. King, Program Analyst, Fiscal Analysis Division, LCB, replied the money is deposited into the Motor Vehicle Emission Control account in the DMV&PS. Senator Raggio asked how this account was handled differently this year for budget purposes than it has been handled during past years. Ms. King replied that receiving $5 for each smog certificate issued funds the Motor Vehicle Emission Control account. She commented that about $1 of the $5 goes back to the counties as a direct grant to be used for air quality motioning programs. Senator Raggio asked whether the grant funds have been cut back during this budget period. Ms. King replied this portion has not been reduced. In total The Executive Budget includes $1.2 million to be passed through to the health districts. She said the account has been carrying a sizable reserve. The reserve was so significant that the fees were reduced for the last biennium from $6 to $5 from each certificate.

Ms. King said any amounts over $500,000 in the reserve of this account can be applied for by the county health districts or regional planning commissions as an excess reserve grant. She noted that last year Clark County received a grant of about $1 million to repair old automobiles. Ms. King commented that if the budget is approved as recommended by the Governor, $1.5 million would remain in the emission control account at the end of the biennium. She commented the difference this year is that about $1.3 million each year is budgeted in the TRPA, Forestry, and Wildlife budgets.

Senator Raggio said he understood that the members of the Senate subcommittee would like to see the funding remain in the Motor Vehicle Emission Control account to be available for whoever might apply for the funding, either Clark County or Washoe County. But, he said, without using these funds, the state must find $1.3 million over the next biennium to replace the funds. He asked where the state could find the needed $1.3 million if the Motor Vehicle Emission Control funds are not used. He commented that it is better, at this point in time, to utilize pollution control funds that are available than to spend general funds that are not available. He stated that he did not wish to continue using these funds beyond this biennium, "but we have to continue to support the TRPA."

Senator O'Donnell said it was never intended to not fund the TRPA. He said the question is whether or not the TRPA should be funded out of Air Pollution Control money that comes from only two counties, Washoe and Clark. He commented that the responsibility for Lake Tahoe is a responsibility for every county. He noted that many counties are paying nothing and the people of Washoe and Clark Counties are bearing the brunt with their tax dollars for the support of Lake Tahoe. He said the question is where the money will come from to fund the TRPA. He commented that the Economic Forum "came up with" $107 million for this year and next year. He said he does not know where the $107 million will be spent or how it will be used and he must decide whether or not to approve funding the TRPA with General Fund money.

Senator Raggio replied there is only a tentative list that identifies where the additional money is needed. He said:

Senator Raggio reiterated that this is without taking any action on the bills that have appropriations in them. He stated the problem is very real and said he is very concerned that an additional $1.3 million of General Fund money is now being requested.

Senator O'Donnell said it would make more sense to him to spend the Air Pollution Control money on the needs of Clark and Washoe Counties and use the General Fund dollars for the TRPA. Senator Raggio said he cannot vote to approve that request because he knows the Legislature cannot find an additional $1.3 million of General Fund dollars.

Senator Neal asked whether it is being suggested that the Legislature fund the TRPA with the Motor Vehicle Emission Control funds for this biennium only. Senator Raggio said that is his understanding of what is proposed; it is a recognition of the financial problem the state has. He asked the Budget Division whether funding the TRPA with Motor Vehicle Emission Control funds was proposed for this biennium only. Mr. Hataway replied that is correct; the Budget Division will revisit this question during the next budget process. Senator Neal suggested that if funding for the TRPA is approved from Motor Vehicle Emission Control funds a letter be sent to the Governor requesting the General Fund be reimbursed. He declared the TRPA should not be pitted against Washoe and Clark Counties for funding. Senator Raggio said he agrees this is a onetime solution. He remarked that "everyone is making commitments to try to resolve the budget problems." He said the state needs to support the TRPA. He asked whether the TRPA can survive and continue to perform without any of the enhancement money the agency requested.

Senator Rawson asked whether a Letter of Intent should be sent to the Budget Division stating that if resources are available the Motor Vehicle Emission Control funds used by the TRPA should be replaced with general funds. Senator Raggio said he would endorse a "strong" Letter of Intent stating this is a onetime solution and the money should be restored to the Motor Vehicle Emission Control funds when it becomes available. He commented that he did not think the funds would be available during this biennium.

Senator Raggio said that motion would fund only the base and maintenance budget, not the enhancement portion of the budget. He asked whether the agency was able to function without the enhancement. Senator Rawson said, "I don’t think we should jeopardize the agency." Senator Neal said the Nevada funding for TRPA is based on one-third of the total cost. Senator Raggio said, "That is correct; if we don’t fund our one-third part of the total cost, California will not fund its two-thirds portion of the total cost." He commented that Nevada would take the same position.

Senator Coffin said, "this is a very serious matter." He felt that issuing a strong Letter of Intent versus our other Letters of Intent is confusing. He pointed out that all of the Legislature’s Letters of Intent are supposed to be strong. He said using the Motor Vehicle Emission Control funds sets a precedent and "it’s not good." He predicted that if the Motor Vehicle Emission Control funds are used, their use "will be built into the budget again the same way it is now. That’s the usual way; if it works this time for this budget, it will be tried again." He commented that by approving the use of these funds in this budget the legislators would be "turning our backs on our own counties that have some very special needs." Senator Coffin said this money was raised from a specific source to be used for pollution control in the counties. He commented that it would be very difficult to explain what benefit Clark County is receiving by spending these funds at Lake Tahoe.

Senator Raggio stated that he hoped we would not take the position that the preservation of Lake Tahoe is only the obligation of those counties bordering on the lake. He commented that he did not want to get into sectional discussions because the issue can always be raised that the people in the other counties are supporting the social problems that exist in Clark County. He stated that this kind of dialog is not useful or productive.

Senator Coffin said the money in the Motor Vehicle Emission Control funds account is really a tax on the vehicles from the county charging the fee that should be spent in that county to solve the problems the vehicles cause.

Senator Raggio recapped the motion from Senator Rawson: To close the budget in accordance with the recommendations of the Joint Subcommittee on Public Safety, Natural Resources, and Transportation, additionally, to approve funding of the base and maintenance budgets from the DMV&PS Air Pollution Control fund transfers rather than General Fund, to send a strong Letter of Intent to the Governor and the Budget Division indicating that this source of funding is acceptable only for this biennium, and to stipulate that the funds should be restored from future general funds if possible.

Senator O'Donnell said he could support this motion, realizing that money is very short for this biennium budget, but only with the understanding that when the budget is reviewed during the next legislative session the Motor Vehicle Emission Control funds (DMV&PS Air Pollution Control funds) are replaced. Senator Jacobsen said he remembers when the Legislature bailed out the Clark County School District. Senator Raggio said, "We are trying not to get into these types of issues."

Senator Raggio asked whether the Assembly supported the enhancements in this budget. Mr. Burke replied, "Yes, they supported every enhancement to be funded with DMV&PS Air Pollution Control funds."

Senator O'Donnell asked what the growth rate of the TRPA has been over the last 10 years. He commented that the enhancements contained some substantial pay increases for TRPA employees. Senator Raggio said he did not think he could support any funding for pay raises because the state employees are not receiving any increases.

Senator Raggio stated that the motion did include all of the adjustments but not the enhancements requested for this budget. He said this would be discussed again during the joint closing hearings.

Nevada Tahoe Regional Planning Agency – Budget Page CNR-140 (Volume 3)

Budget Account 101-4166

Mr. Burke said the subcommittee does not concur with the Governor’s recommendation (as amended) to replace the General Fund appropriation of $3,720 each year with transfers from the DMV Air Pollution Control account. Senator Raggio said this would add General Fund money of $3,720 to each year of the biennium. Mr. Burke replied "Yes."

Department of Motor Vehicles and Public Safety

DMV, Hazardous Materials – Budget Page DMV-128 (Volume 3)

Budget Account 201-4728

Ms. King said this account is staffed with 12 sworn staff and three civilians. She noted that decision unit E-375 recommends authorizing the division to conduct reviews and investigations of radioactive waste carriers and allows the budget to be reimbursed from the carriers for the cost of the reviews and investigations. She commented that prior to the reorganization of the Public Service Commission of Nevada into the Public Utilities Commission of Nevada and the Transportation Services Authority, these functions were the responsibility of the Public Service Commission. She said the functions were not transferred to the Transportation Services Authority when the reorganization occurred. She pointed out that to implement this decision unit, S.B. 167, as introduced, will need to be approved. She said if S.B. 167 is not approved, the division would not have authority to expend the funds recommended in the reviews/investigations category or receive the reimbursements for the investigations.

Senator Raggio asked what S.B. 167 does. Ms. King replied that S.B. 167 allows the Nevada Highway Patrol Division (NHP) to investigate carriers of radioactive waste.

Ms. King said the subcommittee recommended technical adjustments to this account to adjust prices as listed in the March 9, 1999, memorandum the division received from the Purchasing Division.

Senator Raggio commented that decision unit E-375 will only be effective if S.B. 167 is passed. Ms. King replied that this budget can be closed without passing S.B. 167 because if it passes the division can perform the functions. Senator Raggio asked whether the Assembly approved S.B. 167. Ms. King replied, "Yes, they did." She said the funding to perform the investigations and charge the carriers is included in this budget. She pointed out that the authority for the NHP to perform these inspections is included in S.B. 167.

DMV, Criminal History Repository – Budget Page DMV-132 (Volume 3)

Budget Account 101-4709

Ms. King said the subcommittee voted to close this budget as recommended by the Governor with technical adjustments. She said the largest of the technical adjustments is the reallocation of the public safety information technology cost allocations that will be funded through court assessments. She noted that revenues in decision unit M-200 were adjusted to reflect the projected population increases into 2001. She commented that decision units E-710 and E-720, equipment and furniture approved by the Interim Finance Committee (IFC) in September 1998, were eliminated.

DMV, Division of Investigations – Budget Page DMV-159 (Volume 3)

Budget Account 101-3743

Ms. King said this account is "the general-funded side of the Nevada Division of Investigations" Investigation Division. She said the Governor had recommended in The Executive Budget that 3 highway-funded positions be transferred back to the Registration Division. She noted the subcommittee did not concur with the Governor’s initial recommendation to transfer the 3 highway-funded positions to the Registration Division and the Budget Division representatives indicated they had no problem with not transferring the positions. She said the 3 Bureau of Enforcement positions which perform criminal investigations of automotive issues will remain in the Investigation Division.

Ms. King were technical adjustments regarding contract costs and changes in contractors were recommended by the subcommittee.

Ms. King said the subcommittee discussed the value of the Vehicle Investigations Project for Enforcement and Recovery (VIPER) program which was established by the 1997 Legislature but eliminated in The Executive Budget in the base budget. She noted the Assembly voted to issue a Letter of Intent instructing the department to request funding for the VIPER program from the IFC. She said the Senate voted to include the funding needed for the VIPER program on the priority add-back list to fund if additional General Fund appropriations become available.

Senator Raggio asked what information was presented about the effectiveness of the VIPER program. Senator O'Donnell replied that the VIPER program is a statewide automobile theft prevention program. He said, "The VIPER program is analogous to kidnapping." He commented that kidnapping in not a local problem. He stated, "The automobile thieves usually take the automobiles to a distant location. There needs to be a statewide coordinated effort." He said there has been some contentious bickering among the agencies but they are working it out. He commented he "did not think we wanted to get rid of the VIPER program, it is a program we need to fight for and keep."

Senator Neal said the VIPER program in a cross-jurisdictional agency that could be more effective in tracking down the stolen automobiles than the county law enforcement agencies. He commented the state VIPER program can follow the investigation more effectively out of state into other states working with the FBI (Federal Bureau of Investigation) and other agencies.

Senator Raggio asked what action the committee wanted to take with the VIPER program. Senator Neal said it should be included on the priority add-back list.

Director’s Office-DMV – Budget Page DMV-173 (Volume 3)

Budget Account 201-4706

Ms. King said that while there are a lot of changes to this budget, many of the changes were made based upon a letter from the department dated February 22, 1999. She said that between the time the budget was developed and the hearings were held there was a change in executive directors, there is a new acting director, and the priorities have changed. These changes resulted in changes in this budget.

Ms. King said the subcommittee voted to reduce the vacancy savings included in The Executive Budget. She explained that the vacancy savings had been calculated based upon a position that had been eliminated. She noted that when the position was eliminated, the vacancy savings should have been reduced.

Ms. King noted that inflation on the laboratory payments was reduced in accordance with a letter from the department dated December 6, 1998. She noted that decision unit E-125 recommended a variety of general enhancements to the director’s office budget. She commented there were some technical corrections to this decision unit to adjust airfare to $500 for East Coast conferences and $250 for

West Cost conferences. She said the subcommittee recommended the following additional modifications to decision unit E-125:

• The additional out-of-state travel was reduced to $2,862 in FY 2000 and $1,492 in FY 2001 to reflect funding for one out-of-state trip each year for the director and each deputy director, and one Public Information Officer’s attendance at a national conference each year.

• In-state travel was reduced to reflect the director’s living in Carson City.

Ms. King said the director and the deputy director of public safety are currently driving vehicles authorized for highway patrol troopers. To increase budgetary integrity and comply with a Letter of Intent sent by the 1997 money committees, the department is requesting the two vehicles be formally established in the director’s office account. She said The Executive Budget recommended funding one-quarter of the cost of a new vehicle each year and transferring the payment to the highway patrol. She said the subcommittee voted to purchase two full-sized sedans without emergency response equipment.

Senator Raggio asked why the sedans were to be purchased without the emergency response equipment. Ms. King replied the sedans were for the director and the deputy director.

Ms. King noted decision unit E-126 requested a Management Analyst III and a Management Analyst II to form a planning and research unit for the department. She said testimony indicated there was an existing position that currently has some of these responsibilities. She stated the subcommittee agreed that as the department has grown, additional staff was justified; the subcommittee therefore recommended funding one new Management Analyst II position and left the Administrative Services Officer III position in the account.

Ms. King stated the subcommittee did not recommend the non-holiday overtime requested in decision unit E-197. Senator Raggio asked what the effect of not recommending the non-holiday overtime would be. Ms. King replied this budget account has never been funded for overtime. She said this account incurred only $230 of overtime in FY 1998.

Ms. King said the subcommittee did not approve the replacement vehicle recommended in decision unit E-710. She noted the vehicle had only been driven 3,607 miles during FY 1998. She pointed out the subcommittee did recommend that additional funding in the amount of $1,573 be placed in the in-state travel category each year to allow the department to rent a motor pool vehicle if necessary.

Ms. King stated the subcommittee did not recommend funding the new vehicle that was requested in decision unit E-720. She commented that because of the low mileage on the existing vehicle, the subcommittee did not believe the additional vehicle was necessary.

Ms. King said the subcommittee established the Internal Affairs Unit as a separate budget account. She noted this would make the cost allocation in future years much easier because the cost would only be allocated based upon sworn staff.

Director’s Office-DMV – Budget Page DMV-173 (Volume 3)

Budget Account 201-4706

DMV, Administrative Services – Budget Page DMV-189 (Volume 3)

Budget Account 201-4714

Ms. King stated that the subcommittee elected to approve the budget as recommended by the Governor with the technical adjustments. She said the majority of the adjustments are included in decision units E-810 through E-819. She said the 1997 money committees had recommended that the department develop a cost allocation methodology for the director’s office and the Administrative Services Division and to direct charge costs whenever possible.

Ms. King said the department was unable to develop its budget showing the direct costs. She noted the department did subsequently provide the information to the LCB Fiscal Analysis Division and the E-800 decision units reflect the transfer of direct costs. She further noted these decision units transfer the costs associated with insurance, postage, and rent to the budget account which generated the cost. Additionally, she commented, the department indicated it did not have the expertise to develop a full cost allocation methodology, so the subcommittee recommended adding $45,000 in Highway Fund appropriation to complete a cost allocation study to appropriately allocate the cost of the director’s office and administrative services.

Ms. King noted the subcommittee recommended a Letter of Intent be provided to have the department report the results of the study to the IFC in June 2000. She commented this would ensure the study was completed in sufficient time to allow the department to use the results in developing the 2001-2003 biennial budget.

Ms King commented that decision unit E-950 was added to reflect the subcommittee’s closing of the Division of Emergency Management budget. She noted that an Accountant Technician III position was transferred from Administrative Services to Emergency Management.

Senator Raggio asked how $3.5 million a year is being adjusted out of this account. Ms. King replied decision unit E-816 transfers $1.9 million out of this account to the Field Services account. She noted that most of the $1.9 million is for rent for the DMV&PS offices throughout the state.

DMV, Capitol Police – Budget Page DMV-194 (Volume 3)

Budget Account 710-4727

Ms. King stated that the subcommittee voted to close this budget as recommended by the Governor with technical corrections to adjust the categories for physicals and uniforms.

DMV, Peace Officers Standards & Training – Budget Page DMV-198 (Volume 3)

Budget Account 101-3774

Ms. King stated the subcommittee recommends closing the budget for the Peace Officers’ Standards and Training Committee (P.O.S.T.) as a stand-alone agency with only shared facilities, administrative support provided by P.O.S.T. This entails an additional cost of $94,324 and requires passage of S.B. 68. She said the additional costs for payroll and operating have been added to this account. She noted that if S.B. 68 does not pass, the costs would need to be eliminated.

Senator Raggio said S.B. 68 was passed out of the Senate Committee on Government Affairs and the subcommittee’s recommendation is consistent with the actions previously taken. He asked whether the Assembly has acted on S.B. 68 yet. Ms. King said she was not sure. Senator Raggio asked, "Senate Bill 68 is consistent with the subcommittee recommendation for this account, isn’t it?" Ms. King replied, "Yes, it is." Senator Raggio asked whether the Assembly Committee on Ways and Means closed this budget "as you are recommending." Ms. King replied, "Yes, they did."

Senator Jacobsen said that S.B. 68 was referred to the Assembly Committee on Ways and Means by the Senate Committee on Government Affairs earlier in the day.

DMV, Training Division – Budget Page DMV-204 (Volume 3)

Budget Account 101-3775

Ms King stated that the subcommittee voted to approve the Training Division as recommended in The Executive Budget without the Word Processing Operator. She said the Word Processing Operator will remain with the Division of Parole and Probation. She said the department had indicated its intention to return the next biennium to replace the Word Processing Operator position in the Division of Parole and Probation "because it is not primarily responsible for training."

Public Employees Health Program – Budget Page SPEC PURPOSE-11 (Volume 3)

Budget Account 625-1338

Ms. King said the subcommittee voted to close the budget in accordance with the Governor’s revised recommendations.

Senator Raggio said, "The Governor has the program now; what does this budget request do?" Ms. King said A.B. 416 is scheduled for a hearing with the Senate Committee on Finance May 10, 1999. She noted this was the other half of the one-shot funding. She said S.B. 544, which recreates the benefits services board of directors was heard by the Assembly Committee on Government Affairs the previous day.

Senator Raggio asked whether the Assembly has closed this budget. Ms. King replied that the Assembly closed this budget as it was presented to this committee.

Senator Coffin asked whether the subcommittee looked into how much it would cost to restore the benefits to the previous level or to reduce the contributions of the employees to the level they were before January 1, 1999. Senator Coffin stated the employees are "taking a double hit; they got their benefits cut and their premium increased." Ms. King replied this did not get discussed. Senator Coffin asked whether Ms. King had an estimate of the cost of restoring the benefits or reducing the premium to its previous level. Ms. King said she would get an estimate of the cost and send it to Senator Coffin.

Senator Raggio noted there is a premium rate increase of 23.7 percent in FY 2000 and 12.7 percent in FY 2001 for both the state contribution and the dependent premium contribution. He asked whether this is the total cost included in this budget. Ms. King replied there were some errors in The Executive Budget, just technical and mathematical errors.

Senator Raggio asked about the FY 1999 onetime appropriation of $26 million. Ms. King replied the $26 million is "a 1999 issue."

Senator Raggio commented that the group insurance rate for retirees needed to be increased for FY 2000 to .0112 and for FY 2001to .0132.

Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, LCB, said the budget was built using one assessment rate which was used to assess payroll throughout all of the state agencies to provide the money to pay the contributions on behalf of retired employees. He commented the actuary for the health insurance fund has now determined that the assessment rates used are too low and suggested that the rates be raised for the biennium. Senator Raggio asked whether this was just for the retirees. Mr. Miles replied this just affects the retirees. Senator Raggio suggested that the committee approve following the recommendation of the actuary. The Senate Committee on Finance agreed to use the rates suggested by the actuary to identify the agency charges for retiree insurance for the biennium.

RESPECTFULLY SUBMITTED:

Millard Clark

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE: