The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Monday, May 17, 1999, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

Senator Bob Coffin

Senator Bernice Mathews

GUEST LEGISLATORS:

Senator Maurice E. Washington, Washoe County Senatorial District No. 2

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Steven Horsford, Lobbyist, Andre Agassi Foundation

Perry Rogers, President, Andre Agassi Foundation

Morgan Baumgartner, Lobbyist, Andre Agassi Foundation

Ray E. Bacon, Lobbyist, Nevada Manufacturing Association

Henry Etchemendy, Lobbyist, Nevada Association of School Boards

Debbie Cahill, Lobbyist, Nevada State Education Association

Al Bellister, Lobbyist, Nevada State Education Association

Barbara Clark, Lobbyist, Nevada Parent Teacher Association

Elaine Wynn, Cochairman, Greater Las Vegas Inner-City Games

Jennifer Ross, Youth Ambassador, Greater Las Vegas Inner-City Games

Lisa Perry, Youth Ambassador, Greater Las Vegas Inner-City Games

John Pucci, Cochairman, Greater Las Vegas Inner-City Games

Michael Edwards, Private Citizen

Senator Raggio stated budget closings would be heard before proceeding to hearings on bills. He said the budget closing sheets represent the recommendations of the Joint Subcommittee on Human Resources/K-12.

DEPARTMENT OF HUMAN RESOURCES

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Steve Abba, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, said a majority of the closing adjustments, beginning on page 1 of Exhibit C, is part of the administration’s request that is shown on page 10 of Exhibit C. He noted that most of the changes relate to caseload. He said a revised caseload projection was developed in March. He called attention to the new issues addressed in the closing sheets on whether or not to include the request to fund the settlement agreement with the University Medical Center (UMC) in Las Vegas, which was included in the Governor’s budget and which resolves a number of rate appeals going back to 1994, as well as the proposal to proceed with developing a Medicaid Management System Information System (MMIS). He said the last issue is whether or not to pursue and fund the Independent Choices Waiver for the physically disabled.

Mr. Abba reviewed the technical adjustments and budget closing decisions and the recommendations of the Joint Subcommittee on Human Resources/K-12, shown on pages 3 through 9 of Exhibit C. He said most of the adjustments in this budget relate directly to the caseload modifications. Senator Raggio called attention to the chart shown on page 5 of Exhibit C. He explained that the projected increase in caseload is primarily attributable to growth in the Child Health Assurance Program (CHAP) and disabled population. The CHAP population accounts for approximately 85 percent of the increase. Mr. Abba said that since July 1998, the CHAP population has exhibited significant growth compared to what is was in FY 1998. From July 1998 through March 1999 the CHAP caseload has increased by over 11 percent. Mr. Abba said that for FY 1998, the CHAP caseload growth for the entire fiscal year was 4.7 percent. The March 1999 caseload projection is that the CHAP caseload will continue to grow by approximately 15 percent for FY 2000 and approximately 13 percent for FY 2001. Mr. Abba stated that although the projected increase is significant, the out-year projections are based on the actual caseload growth year to date, which he said is a reasonable assumption to use. He said there are no definitive reasons for the significant increases in CHAP caseload growth; however, it appears it may be associated to some degree with families deciding to apply for Medicaid only for their children through the CHAP program versus applying for TANF (Temporary Assistance to Needy families) cash assistance, which also includes Medicaid coverage. Additionally, the growth in CHAP caseload may also be a result of the increased marketing efforts for the Nevada Check-Up Program. Senator Raggio said the chart on page 5 of Exhibit C shows clearly what the projections are.

Mr. Abba noted there were 54 ICFMR (intermediate care facility for mentally retarded) beds that were in The Executive Budget and it was determined when the subcommittee reviewed the mental health and mental retardation budgets that they were not needed. He said the funding for the beds was used differently in the mental retardation budget, which allowed the funding for the new beds to be eliminated in this particular budget. He pointed out the reduction was approximately $6 million in total funds each fiscal year, roughly 50 percent of that being state funds.

Mr. Abba explained that the other primary reduction was in the area of buy-ins. He said the Medicaid budget does purchase buy-ins for certain portions of their population. He noted it was overstated in The Executive Budget, so there was a small adjustment amounting to approximately $335,000 in state funds each fiscal year of the biennium.

Mr. Abba reported on the UMC rate appeal. He said that in the first year of the biennium there is $3.5 million in state funds to accommodate the appeal, and an additional $3.5 million in federal funds that are reflected in this budget. He pointed out that in FY 2001, there is an additional $1.5 million in state funds and $1.5 million in federal funds. He said this will resolve the appeal, "going back to 1994" and will take care of the retroactive part of the appeal. He stated that for the upcoming biennium the Division of Health Care Financing and Policy will amend its state plan with the approval of the federal Health Care Financing Administration (HCFA), which is still pending, to adjust rates for UMC in recognizing its Graduate Medical Education component as well as its designation as a trauma level I hospital. He said approximately $1.5 million of the closing documents increase reflects the additional rates that will be generated by the settlement.

Senator Raggio said this will result in no appeals or further effort to litigate this issue and UMC has waived its right to appeal Medicaid hospital inpatient rates through Fiscal Year (FY) 2004.

Mr. Abba said the other issue the subcommittee dealt with is the MMIS. He said the 1997 Legislature approved funding to conduct a Medicaid business process reengineering (BPR) study and the study is still in process. He stated there was testimony from the consultants regarding the MMIS system and the subcommittee did approve some initial start-up funding for the MMIS system in both FY 2000 and FY 2001.

Mr. Abba said the subcommittee was concerned that the BPR study is not complete. He stated the BPR consultants are working on the cost-benefit analysis (CBA) that should provide not only the division but also the Legislature full knowledge on what approach will be taken for the automated system. He said it will be a fully out-sourced system, but there are a number of approaches that can be taken in its development. He noted the subcommittee authorized a Letter of Intent to be sent to the division directing the division not proceed with the development portion of the MMIS system until the cost/benefit analysis is completed and a full report is provided to the Interim Finance Committee (IFC).

Mr. Abba pointed out the joint subcommittee reserved the additional monies for the development contractors, as well as the accelerated rate for the pharmaceutical claims, until the CBA report is completed. He said that at the time the report is given the IFC would make the final determination on whether to proceed with the MMIS system.

Mr. Abba said the last issue the subcommittee dealt with was to approve approximately $1.9 million over the biennium, almost $1 million of that in state

funds, to expand the existing Medicaid waiver for the physically disabled. He noted there is currently a waiting list of 162 clients for this particular waiver. He said this action will reduce the waiver to approximately 100 clients. He stated that with the approval of the expansion, the subcommittee also expanded the current number of services which are provided to the physically disabled. Mr. Abba said it is anticipated that with the expanded services the division will be able to serve a number of clients currently residing in institutional care that would not be served if the additional services were not enhanced.

Mr. Abba said the total closing adjustments approved by the joint subcommittee will increase the Medicaid budget, in terms of state funds, by approximately $5.9 million in FY 2000 and $11 million in FY 2001.

Mr. Abba pointed out the subcommittee did not approve any additional rate increases for any provider with the exception of the pharmaceutical providers. He said The Executive Budget did not include rate increases for any other type of provider. He stated the subcommittee did place a rate increase on an add-back list, if funding is available, for certain providers that were noted as definitely in need of a rate increase. He referred the committee to a display on page 4 of Exhibit C, showing a listing of various providers that have been prioritized, in terms of their need, for a provider rate increase. He explained that the subcommittee identified priority levels 1 and 2 as providers in most need of an increase and the monies have been placed on the add-back list.

Senator Raggio noted that priority levels 1 and 2 are Home Health, Personal Care Aides, ICF/MR, Nursing Facility/Skilled Level, Nursing Facility/Intermediate Level, Adult Day Care and Hospice/LTC. He stated he believes these have been placed on the General Fund priority add-back list for the second year of the biennium. He recalled the cost would be approximately $3 million. He indicated that Senator Rawson, who cochaired the subcommittee together with Ms. Evans, spent a great deal of time on this issue. Senator Raggio also commended the fiscal staff for the work they performed on "this complicated issue." He stated this seems to be an effective use of the funding that is available, with some augmentation from The Executive Budget.

Senator Rawson suggested approving language that would direct, where possible, the Medicaid monies for dentistry through either managed care or contract towards the dental programs in the University and Community College System of Nevada (UCCSN). Senator Raggio asked whether that is reflected in the closing sheets. Mr. Abba answered it is not; the language will be added to one of the "money bills."

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Mr. Abba pointed out the primary issue in the budget was a concern over the cap on the number of children that could participate in this program. He said The Executive Budget had capped the population at 10,000 children a year. He stated the committee’s concern was that it appeared in FY 2001 a waiting list would begin for this program if the cap were not adjusted, because the division had no other means to accommodate additional children.

Mr. Abba said the committee approved a reallocation of funding from FY 2000 to FY 2001 in an amount equivalent to the cost of medical coverage for 750 children. In order to add another 2,000 children to the program in FY 2001, the money would be moved to FY 2001. Approximately $441,000 in state funding was added for use in matching federal funds of approximately $1.3 million. Mr. Abba pointed out this will increase the number of children served by the Nevada Check-Up Program to 11,750 for FY 2001.

Mr. Abba said that at this time it is difficult to estimate whether the funding will be sufficient to cover the enrollees coming into this program, but it should be sufficient to carry the division through January of FY 2001, in time for the start of the next legislative session. Additionally, there will be language in the General Appropriations Act that allows the division to move monies, and money could also be moved from the Medicaid budget if needed.

Senator Raggio noted page 24 of Exhibit C shows that selecting the above proposal would, in the out-year, increase to 11,750 the authorized number of children to be served, bringing in approximately $1,350,000. Noting that $441,000 of that amount is from the General Fund, he asked whether there is a reversion on this money if the caseload is not reached. Mr. Abba answered the general funds would revert at the end of FY 2001.

Senator Rawson said there needs to be similar language as that in the previous budget to direct the funds to the dental programs.

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Mr. Abba reviewed the issues, shown on page 27 of Exhibit C, considered by the subcommittee. He said the major issue was the 2 positions responsible for the Billed Charge Master program and the positions were eliminated in conjunction with the sunset of that program. He stated the subcommittee, in reviewing the elimination of the positions, determined that removing the positions would affect the division in other areas of its cost containment responsibilities. He said the committee reinstated the positions but funded them with cost containment fees, which are paid by health insurers registered in Nevada. He noted there are approximately 850 health insurers licensed and registered in Nevada.

Senator Raggio asked whether keeping the 2 positions affects the General Fund. Mr. Abba replied no, the money comes totally from assessments.

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Mr. Abba provided an overview of the budget shown on page 28 of Exhibit C. He reviewed the major issue in the budget that is shown under item 4 on page 29 of Exhibit C. He said decision unit E-125 would add an additional $30 million in transfers from the Intergovernmental Transfer Account to help fund Medicaid. He noted the issue has been resolved because the requirement of the division to meet a reversion in FY 1999, in the amount of $53.5 million, has been relaxed. He said the revision requirement is approximately $18 million, approximately $35 million less than previously required. He pointed out this will allow the Intergovernmental Transfer Program budget to retain those monies in the current year and bring them forward into FY 2000 to be able to make the transfers as reflected in decision unit E-125.

Mr. Abba explained that by doing this the reserve at the end of FY 2001 is also preserved at a level that is reflected in the budget, in addition to the closing adjustments which added an additional $4.7 million, so the reserve at the end of FY 2001 will be approximately $26 million.

Mr. Abba said the joint subcommittee also approved replenishing the Institutional Care Fund that is used primarily by rural counties to help with their responsibility for paying Medicaid long-term care costs. He noted there have been several years in the past when a $300,000 allotment has been set aside for the rural counties to access when they have hard times. Senator Raggio asked whether that is for long-term care. Mr. Abba replied yes.

Mr. Abba said there would be legislation from the Assembly to reenact, "from the legislation side," the Institutional Care Fund. He stated the legislation would indicate that the replenishment of the fund would be capped at $300,000. Senator Raggio said the closing sheet shows that the $300,000 would be transferred from the Intergovernmental Transfer Fund to the Institutional Care Fund. He asked whether this is only available to the small counties. Mr. Abba replied it is available to all counties, but the small counties are the ones that have the problem.

Senator Raggio asked whether the concern about the intergovernmental transfer budget and the reserve has been solved. Mr. Abba explained that because of the administration relieving the Medicaid program from the $53.5 million reversion requirement in FY 1999, $35 million will be freed up in this fiscal year that will not have to be transferred from the Intergovernmental Transfer Account to Medicaid. The $35 million will be balanced forward into FY 2000 and will be available for FY 2000-01, so the budget, as well as Medicaid, should be complete. Mr. Abba pointed out that an increase of approximately $4.7 million is projected in the reserve at the end of FY 2001.

Senator Raggio asked whether the $35 million in new money being put into Medicaid is related to the $35 million in the Intergovernmental Transfer Account. Mr. Abba pointed out the $35 million is an FY 1999 issue. He said that by allowing the division to not have to revert so much money, there will not have to be the transfers from the Intergovernmental Transfer Program to make that reversion. He said the other "fix" for FY 2000-01 in Medicaid is the add-back to the General Fund for the projected caseloads.

Senator Raggio said the subcommittee also approved language to be included that requires an interim study of the entire transfer program, with the idea of trying to get more funding for the rural hospitals and those hospitals that take a major load of Medicaid patients, but do not receive any benefit. Mr. Abba said that is in the subcommittee’s report.

Mr. Abba added that the language will most likely be added to a bill which will come forward on a county match program, as well as some additional language for intergovernmental transfer to retain Washoe and Elko Counties’ role in this program.

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Mr. Abba stated that the committee recommended the budget be closed as recommended by the Governor. He said this budget will be transferred to the Aging Services Division and will be absorbed into a new budget account called the Homemaker budget. He explained the Homemaking Service budget will be eliminated at the close of FY 1999.

Senator Raggio announced the committee would hear the bills dealing with charter schools.

Assemblyman Kathryn (Kathy) A. McClain, Clark County Assembly District No. 15, testified she originally introduced this bill while working with some parents in Clark County to develop a charter school for deaf students. She said the original version, which was cosponsored by the remaining 62 members of the Legislature, was subsequently agreed upon by the Clark County School District, making the legislation unnecessary.

Ms. McClain stated it was at this point that the Andre Agassi Foundation asked that the bill be amended to provide further changes in the state’s charter school law, to accommodate a charter school which the foundation wanted to start.

Ms. McClain spoke about the long-standing commitment the foundation has had to serving youth and said she supports the proposed changes. She pointed out that the changes were adopted by the Legislative Committee on Education and passed out of the Assembly.

Senator Raggio stated that what is in the bill books is the first reprint of Assembly Bill (A.B.) 348. Ms. McClain explained that as she understands it, the bill which was passed out of the Assembly was the Agassi foundation’s original request. She said there may be further amendments.

Senator Raggio remarked that Senator Porter could not be present for the hearing, as he had planned to be. He noted Senator Porter has proposed an amendment.

Steven Horsford, Lobbyist, Andre Agassi Foundation, pointed out there are two separate amendments. He stated there are additional provisions since the measure passed out of the Assembly which the foundation is asking be considered, and the subsequent amendment has been offered by Senator Porter. He called attention to Senate Bill (S.B.) 431, which he noted had been moving in the Assembly but then Senator Porter agreed to have the provision in that bill included in A.B. 348 in order to make it a more comprehensive bill.

SENATE BILL 431: Revises provisions governing charter schools. (BDR 34-1098)

Mr. Horsford pointed out that some of the issues which Senator Porter was planning to support are provisions that are in A.B. 348, so it makes more sense to have one bill.

Perry Rogers, President, Andre Agassi Foundation, said this foundation was started in 1994 to help at-risk children in Nevada. A video presentation requesting support for A.B. 348 was played prior to discussing the foundation’s role in the charter school bill.

Mr. Rogers said that when the foundation was started it was felt it was a great idea to help children make better decisions for themselves. He said building the Andre Agassi Boys and Girls Club was a start in giving the children an opportunity to make the decision to engage themselves in recreational activities that are healthy and productive. He stated that once this was done there was a realization that more needs to be done, and that comes in the form of education. He explained the charter school would be located adjacent to the boys and girls club and would basically be one facility. He said the hope is that the Legislature will see fit to not only pass A.B. 348 for its changes in charter school legislation, but also to become a partner in the school.

Mr. Rogers pointed out that $750,000 has been raised by the foundation and $750,000 has been secured from the federal government and said the request is for the state to contribute $750,000.

Mr. Horsford stated this bill is the effort of a number of parties interested in bringing forward what are believed to be reasonable changes to charter school law. He said the changes would provide flexibility and innovation in public education, and the project that the Andre Agassi Foundation is bringing forth would be a model in the state of Nevada and could potentially become a national model.

Morgan Baumgartner, Lobbyist, Andre Agassi Foundation, reviewed the current version of the bill as it is in the bill books. She pointed out that subsection 2 of section 2 shows the bulk of exemptions from the collective bargaining agreement approved by the teachers, that would provide flexibility to the administration of the proposed. She said a charter school employee would be exempt from the limits on the times of day teachers can work, the number of hours in a day they can work, the number of hours and days a teacher can work in 1 year, and the number of hours and days that a teacher can work in 1 year. She pointed out these exemptions would not abrogate state law, they would just allow the administration and the teachers to have flexibility within the collective bargaining agreement negotiated between the school district and the teachers union.

Ms. Baumgartner called attention to a provision that deals with salary. She explained this provision allows a teach who works over the hours or days provided for in the collective bargaining agreement to be compensated on a pro rata basis for the additional hours worked.

Ms. Baumgartner noted there is one more flexibility issue addressed in the amendments proposed by the Andre Agassi Foundation (Exhibit D) which she said concerns teacher preparation periods. Currently, the collective bargaining agreement dictates the amount of time and the scheduling the teachers have to abide by for their preparation. This amendment would allow preparation-period flexibility, so that if the teachers wanted to have a team meeting they could do so on one day, for example, and that would constitute a prep period so long as they have the total amount of preparation time teachers in a traditional public school would have.

Ms. Baumgartner reviewed the remainder of the amendments dealing with the definition of "teacher." She recalled that when the charter school legislation was enacted in 1997, there was no transfer of the definition of teacher to the charter school language. The amendment would include a definition that would be in Nevada Revised Statutes (NRS) Chapter 386 which would track the language of NRS 391. She said this defines "teacher" as "a licensed employee whose majority of working time is devoted to rendering educational services to pupils in a public school or a charter school." Senator Raggio asked whether this is a new definition. Ms. Baumgartner answer no, and explained it is the language that is in NRS 391. She said the need for this was recognized as a result of discussions with the school districts and the teachers’ representatives indicating there was not a definition in the charter school chapter.

Ms. Baumgartner stated that the third amendment requires that when the State Department of Education and a school board review the application for a charter school, in addition to all of the requirements of the charter school chapter the charter school applicant would have to evidence compliance with the education provisions. The charter school would not be able to "get around" the state standards set by statute. Ms. Baumgartner said the school board and the State Department of Education would not only have to look at application procedures but at the schools’ compliance with statute as well.

Ms. Baumgartner said the final amendment is a request for $750,000 for the expansion of the Andre Agassi Boys & Girls Club & Education Center in Southern Nevada. Senator Raggio inquired why this request was not submitted to the Assembly Committee on Ways and Means. Mr. Horsford answered that when the proposal was originally submitted, it was not known what the full scope of the project would include. He said that since the passage of A.B. 348 in the Assembly, the foundation has been able to obtain the architectural renderings and subsequent costs of what the project will involve.

Senator Raggio asked whether the request for an appropriation has been considered by the Assembly. Mr. Horsford answered no. Senator Raggio pointed out the difficulties the state is facing in trying to meet requests for appropriations that are not in The Executive Budget. Mr. Horsford said he understands this is a tight budget year and the foundation is asking for consideration should funds be available.

Ms. Baumgartner provided testimony on the amendments proposed by Senator Porter (Exhibit E). She said the first one amends NRS 386.525, which is an appeals process in the event that a charter school application is turned down. She stated that the amendment allows an applicant whose application was turned down by the local board of trustees to submit a written request to the State Board of Education asking the board of trustees to reconsider the application. The amendment directs the local board to reconsider the request if the state board grants the request to reconsider. It also outlines how the request is to be reconsidered and sets forth time frames. She pointed out it also determines that after the appeals process is completed and there is a final decision from the administrative body, the decision can be appealed to the district court of the county in which the proposed charter school will be located.

Ms. Baumgartner noted the amendment to NRS 386.545 is a provision for liability insurance. This would require a charter school to obtain liability insurance similar to that required by other public schools located in the same school district as the charter school is located. Ms. Baumgartner explained this would hold harmless, indemnify, and defend the sponsor, which is the school district, to create an insurance policy for the district so the district is not liable for the actions of the charter school.

Ms. Baumgartner said the final amendments are to NRS 386.560 and NRS 332.185 that would allow the board of trustees of a school district to donate surplus personal property to the charter school. Ms. Baumgartner noted the language in NRS 332.185 allows that to be easily done.

Senator Neal asked the projected completion date of the charter school proposed by the Andre Agassi Foundation. Mr. Rogers answered it is September 2000.

Ms. McClain commented the charter school for the deaf students is going forward. She said they found they were trying to change a law that did not have to be changed. She stated the amendments to the bill will also help the effort on the school for the deaf and she urged support for A.B. 348.

Senator Raggio asked whether it is certain the public school buildings can be used for the purposes covered in the original version of the bill. Ms. McClain responded the buildings cannot be used during the day, but there is nothing to preclude the charter school having its own building and having a joint facilities lease on public school property. Senator Raggio said the original bill allowed use of the public school buildings during regular school hours. Ms. McClain stated the desire was to have the deaf children close to the "needs" they required, within the public school system. She said they realized the buildings were overcrowded and if a modular building could be obtained, to get started, and placed on school property where the other services are offered, then the school could be facilitated through a joint facilities agreement.

Mr. Rogers acknowledged the existing budget constraints. He reiterated the foundation has raised $750,000 for this facility and is only looking for the state to be a partner.

Senator Neal asked whether this would be considered a public facility. Ms. Baumgartner responded that under the definition, a charter school is considered a public school. Senator Raggio asked whether the foundation has a private nonprofit designation. Mr. Rogers answered yes.

Senator Raggio closed the hearing on A.B. 348 and opened the hearing on S.B. 258.

Senator Washington, Washoe County Senatorial District No. 2 requested Jeanne L. Botts, Fiscal Analysis Division, and Pepper Sturm, Research Division, review the amendments.

Senator Raggio stated this bill was heard on March 23, 1999 and inquired whether these are proposed amendments to the bill (Exhibit F). H. Pepper Sturm, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau, answered yes. He said the majority of the amendments come from Clark County School District, and include input from the sponsor of the bill.

Mr. Sturm reviewed the amendments shown in Exhibit F. He said the first amendment would clarify that the course of study requirements for charter schools, as set forth in S.B. 445, apply in this bill and specify that charter schools must teach courses of study linked to required units needed to graduate from high school.

Senator Raggio asked what changes were made in the Assembly to S.B. 445.

Mr. Sturm testified that the changes were to restore drivers education and set up a special fund for payment of drivers education and the course of study for suicide prevention, to be incorporated into an existing course, and to make the bill consistent with Assemblywoman Parnell’s bill requiring patriotic exercises.

Senator Raggio inquired about Senator James’ bill to add required study of the constitution and so forth. Senator Washington said he was a cosponsor of S.B. 285, which he understood had been heard and then indefinitely postponed.

Mr. Strum continued the review of the proposed amendments to S.B. 258 shown in Exhibit F.

SENATE BILL 258: Revises provisions governing charter schools. (BDR 34-43)

Mr. Strum stated the committee might want to consider restoring existing provisions within state statute that relate to this issue, and adjusting only for the provisions contained within S.B. 445 that define the core academic curriculum.

Senator Raggio asked whether this action would leave the flexibility that is desirable for charter schools. Mr. Sturm answered it would, but the core curriculum would have to be followed as well as what is required to graduate from high school. Senator Washington agreed the flexibility would be retained on certain academic studies.

Mr. Sturm explained the second amendment would include provisions regarding the liability of the charter school governance board, the school employees, and the sponsor, which are contained in S.B. 431, heard earlier.

Mr. Sturm testified amendment No. 3 would limit the collection of late bills and amend section 8 of S.B. 258. Senator Raggio asked why this is needed. Mr. Sturm explained that under the current language of the bill, the bill provides there is no cause of action against the governing body of a charter school for billings presented 6 months or more after the obligation is incurred. He pointed out this amendment would eliminate the sponsor as a secondary source for a cause of action under these circumstances.

Senator Raggio asked what happened to the bill that would allow charter school students to attend public schools for classes and extracurricular activities under certain circumstances. Senator Washington answered that this bill was also indefinitely postponed in the Assembly.

Senator Raggio said he was not clear what amendment 13 would accomplish. Jeanne Botts, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained that for regular public schools there is a requirement the school districts’ accountability reports be attached to the budget document when the local board approves the budget. She said this amendment would extend a similar requirement to charter schools that their accountability report be attached to their final budget. However, they are not subject to NRS 354.598; their budgets instead are developed under regulations of the State Department of Education.

Senator Raggio asked whether the appeals process in amendment 14 is the same as what has been reviewed. Mr. Sturm replied he believes it is. He noted Ms. Botts would review this in detail later in the hearing.

Senator Raggio asked why it is desirable to prevent private schools from converting to charter schools, as outlined in amendment 14. Senator Washington answered this was a request from Clark County School District. He said he thinks, personally, it is a good idea that private institutions might have the opportunity to convert to a charter school if deemed necessary or desired. Senator Raggio asked, "If they meet the requirements, what would be the problem?" Senator Washington responded there would not be a problem.

Senator Raggio asked why the school district wanted this section of the bill deleted. Mr. Sturm pointed out there was a lot of opposition, from more than just the school district, to the conversion of private schools. He said there was a sense that this would be using public money to subsidize private schools. Senator Raggio asked where the public money comes into the equation. Mr. Sturm replied, "There are others who can speak to their concerns."

Senator Washington said there are provisions in the bill that if a private converted to a charter school it can no longer take tuition and the students would be counted in the Distributive School Account (DSA). Senator Raggio stated he does not see what difference that would make. He said that once the school becomes a charter school, it would have to operate as a charter school. Senator Washington agreed.

Mr. Sturm explained that amendment 16 would prohibit the conversion of public schools to charter schools. Senator Raggio remarked he would assume children could not be forced to attend a charter school unless that was the desire of the parents. He asked whether this would be an issue. Mr. Sturm answered, "Only the transportation issue that might be incurred by the district."

Senator Raggio referred committee members to the proposed amendments to S.B. 258 concerning the Charter School Commission, shown in Exhibit G. Ms. Botts reviewed portions of the amendments shown in Exhibit G. She provided details on the appeals process, the appropriations related to the bill, and new staff in the State Department of Education.

Senator Raggio asked who proposed the amendments. Ms. Botts answered they have been worked out with the sponsor of the bill, Senator Washington. Senator Washington stated that what happens with S.B. 466 will determine whether or not there is an appeal process through the State Board of Education. He said that if the bill does pass, it will be necessary to redevelop a Charter School Commission.

SENATE BILL 466: Revises provisions governing education. (BDR 34-1247)

Senator Raggio asked why the present law that establishes a Charter School Commission is being changed. Senator Washington pointed out that his concern was the need to fall within the budget constraints. He said that if federal funds were accessible, there could be a choice of either a Charter School Commission or a State Board Subcommittee, so he thought if the funding was not available there was still an opportunity to create an appeal process through the State Board of Education.

Senator Raggio noted this amendment proposes that three of the members of the State Board of Education become a subcommittee for an appeal process.

Ms. Botts explained the appeals process shown under No. 2 of Exhibit G. She pointed out this process is the same as that contained in S.B. 431, as amended. Senator Raggio pointed out S.B. 431 has not been processed in this committee. He asked where the bill is at this time. Senator Washington answered it is in the Assembly. He said it was scheduled for a hearing last week but was withdrawn by the sponsor of the bill and parts were amended into A.B. 348, which was just heard.

Senator Raggio said that at some point all of the bills need to be reviewed together. He noted that as he understands it, the federal Charter School Expansion Act does require some kind of appeal process. Ms. Botts agreed. She said the appeal process currently being discussed is similar to that in Senator Porter’s amendment.

Ms. Botts reviewed other duties for the subcommittee on charter schools, shown under No. 3 of Exhibit G, and the responsibilities of new staff assigned to assist with the review and evaluation that is required of a charter school’s renewal request shown under No. 4 of Exhibit G.

Senator Raggio asked when a renewal has to be requested under the current law. Ms. Botts answered it must be requested within 6 years, with an option in the third year.

Ms. Botts provided detail on the appropriations shown under No. 5 of Exhibit G. Senator Raggio asked what the appropriations were in the original bill. Ms. Botts replied there was $25,000 for the per diem allowances and travel expenses of the Charter School Commission, and $36,950 in FY 1999-2000 and $33,117 in FY 2000-01 for a part-time secretary. Senator Raggio asked why there is a need to increase this amount for a three-member subcommittee, when a five-member commission operated with the current budget. Ms. Botts answered, "Because there is staff added." She referred to a detailed budget on page 3 of Exhibit G. She noted that in conversations with the State Department of Education it was indicated the department could not perform the added duties without additional staff. Senator Raggio maintained that is hard to understand. He asked how many charter schools there are. Ms. Botts answered that at present there is one. Senator Raggio stated he fails to see the logic in the argument that it would be necessary to add staff to take care of 1 charter school and the one being proposed.

Senator Rawson asked whether there are any conflicts between the two amendments being proposed. Senator Raggio answered there are some. He said if the two bills are going to be processed, it will be necessary to review everything that impacts either bill. He said the appeal process is almost the same, but one amendment has suggested the replacement of the Charter School Commission.

Senator Neal asked whether the amount shown on page 3 of Exhibit G reflects the total amount of money being requested. Ms. Botts said the cost is $117,000 over the biennium.

Senator Washington said that in regard to the appeal process, the chairman of the Assembly Committee on Education did not want to "deal with" the Charter School Commission. He stated his first choice would be to set up a commission, but this is an effort to accommodate both houses of the Legislature.

Ray E. Bacon, Lobbyist, Nevada Manufacturing Association, referenced item No. 16 on page 5 of Exhibit F, which would prohibit the conversion of public schools to charter schools. He noted several of the trade associations have had discussions that perhaps some of the vocational/technical schools would be better run if the trade associations were the sponsors of the charter. He said this amendment would prohibit that kind of action.

Senator Raggio asked what the associations would propose. Mr. Brown answered perhaps it might be included that conversions of vocational high schools to charter schools would be allowed. He said the provision that allows a vocational high school to become a charter school makes sense. He pointed out the trade associations have the technical expertise in the vocations and if they were the sponsors, it would get "some real buy-in" between the business community and the school system.

Senator Washington stated he would not be opposed to an amendment to allow the conversion of vocational/technical high schools. He said the owners of Western Nevada Supply have been instrumental in trying to get some technical institutions converted to charter schools.

Henry Etchemendy, Lobbyist, Nevada Association of School Boards, called attention to item No. 3 of Exhibit G. He testified the association has objected to this amendment in other hearings, but "with all of the factors considered, if there [were] an interim review by the State Board of Education’s Subcommittee on Charter Schools, that would be good for the school boards, districts, and the Legislature."

Senator Raggio opined that if the issue is to be studied by anyone, it should be studied by the Legislative Committee on Education. Mr. Etchemendy said that would not be a concern. He stated that everything else in the amendments seemed to be acceptable. He urged the committee to consider the amendment to A.B. 348, because it would be beneficial to the school districts.

Debbie Cahill, Lobbyist, Nevada State Education Association (NSEA), stated that many of the amendments shown in Exhibit F appear to take care of some of the NSEA’s concerns about the original version of S.B. 258. She said written statements were submitted following the testimony on S.B. 258 expressing concern about other parts of the bill that these amendments do not address. Senator Raggio remarked those concerns should be brought to the attention of the committee. He asked for an up-to-date list that incorporates whatever concerns the association has.

Ms. Cahill pointed out that specifically there is a concern regarding section 26, which deals with the licensure of teachers. She said it would reduce from 75 to 50 percent the percentage of teachers that must be licensed. Senator Raggio asked what is "magic" about a certain percentage. Ms. Cahill answered that having a certain percentage is not really relevant to what is being attempted in regard to charter schools, "or any schools." She maintained there should be a licensed teacher in a classroom for any course of study or subject for which there is a licensure requirement. She said that when the compromise was drafted on S.B. 220 of the Sixty-ninth Session in 1997, the 25 percent was to accommodate the fact that many of those schools will teach subjects in specialty areas for which there is no licensure. She stated that some of the language in S.B. 258 attempts to address that concern, but at this point the percentage is not relevant.

Senator Raggio said the original idea, which comes from other states that have successfully used charter schools, was to have some innovative programs and courses which were not covered under licensure. He emphasized the need not to place restrictions and defeat the purposes of charter schools as long as the core curriculum and standards are met.

Al Bellister, Lobbyist, Nevada State Education Association (NSEA), testified the association is still opposed to section 27 of S.B. 258 as originally written. He noted he did not see any amendments regarding the collective bargaining provisions. He said the association worked with the Andre Aggasi Foundation on A.B. 348 and granted a little more flexibility on the terms of the collective bargaining agreement, but "this bill goes too far." He pointed out that the existence of the Washoe County Teachers Association’s collective bargaining agreement did not propose any obstacles to the "I Can Do Anything" charter school. He said that there are five more charter schools due to begin. Mr. Bellister maintained the existing law does not seem to discourage the formation of charter schools. He said if flexibility is an issue, section 27, subsection 2 does provide for the parties, where a charter school is to be created, to apply for waivers to the collective bargaining agreement.

Mr. Bellister called attention to a survey performed by the U.S. Department of Education last year finding that collective bargaining was not a significant obstacle to the formation and operation of charter schools.

Senator Jacobsen said he would prefer to have all schools, including charter schools, under the State Board of Education.

Barbara Clark, Lobbyist, Nevada Parent Teacher Association (PTA), testified the association has a concern with section 14 of the original bill. She said the PTA acknowledges that charter schools are one avenue to school reform and the association is a strong advocate of excellence in education in public schools and charter schools. She pointed out the concern is in regard to the proposed deletion of all of the language in NRS 386.505. She maintained this is "the meat of the bill and everything else "just changes the mechanics." Ms. Clark said this bill "eliminates the intention of the legislation in establishing charter schools." She maintained it removes all of the statements concerning the legislative intent behind the charter school law. She said that under this bill "the application for the charter school and the organizer of a charter school would not have to indicate either how it can be accomplished." Further, Identification of the reasons for establishing a charter school, which the Legislature approved in 1997 will not even be required for establishment of the schools if the proposed language is approved.

Senator Raggio asked why all of the language referenced by Ms. Clark was deleted. Senator Washington answered that with the intensive reviews which will be performed for the reapplication or continuance of a charter school, this language is not necessary. Senator Raggio questioned the need to remove all of the language, which he said was a legislative declaration of intent in the original bill. Mr. Sturm explained that the original intent of the sponsor was to restore the version of S.B. 220 which passed the Senate in 1997, and that particular list of purposes was contained in another section of the bill. He referred to page 8, line 35, where there is language similar to the language Ms. Clark referred to, and noted it is just contained in another section of the bill.

Senator Raggio asked the fiscal staff to review all of the proposals to put them into a uniform bill for processing and to take into consideration some of the proposals that have been indefinitely postponed in the Assembly. He closed the hearing on S.B. 258.

Elaine Wynn, Cochairman, Greater Las Vegas Inner-City Games, said she is aware that the committee has not as yet heard A.B. 654.

Ms. Wynn provided an Inner-City Games packet (Exhibit H) (Original is on file in the Research Library.), which includes all of the information on the program. She said the packet includes a detailed discussion of the program, the mission, the goals, the budget, and the program schedule.

Ms. Wynn said her motivation for supporting the games comes from having been an education advocate for many years. She explained that Arnold Schwartzenegger asked whether she would be interested in assisting him in creating 1 of what would be 11 programs in America. She said she was not sure about this because it would be a sports-related program, but she realized there are many doors a child can go through sometimes to have his or her life changed.

Ms. Wynn pointed out the Boys and Girls Clubs charge a minimal fee to participate and most are closed on the weekends. She stated that transportation to facilities is a key issue either because of safety concerns or because there is no one to take children to the clubs. She noted the parks and recreation facilities are facilities managers more than deliverers of programs.

Ms. Wynn explained that any child between the ages of 7 and 17 is welcome to participate, but the youngsters targeted for the games are those that perhaps will not be selected for teams in their schools because they have not had a chance to learn the sports, "or they will not be recruited for the yearbook staff and will most likely not make the cheerleading squad." She said these children probably do not have $2 to go the Boys and Girls Clubs and perhaps their parents cannot drive them to the local park or buy them the Little League uniforms they might need.

Ms. Wynn suggested this program tells children they can turn to the Inner-City Games when they turn away from drugs, that there are caring adults in the community who are going to provide alternatives. She explained these games are not Olympic-style contests that last for only a few weeks. Beginning in April and running through Labor Day, on every Saturday, children in Las Vegas can either board a school bus for free or have their parents take them to a specific school site in the zone where they live and engage in a variety of sports activities.

Ms. Wynn said the children are taught by professional clinicians who are paid a stipend, cheered on by wonderful volunteers who act as counselors, and are fed nutritious refreshments donated by various companies in Las Vegas.

Ms. Wynn stated that the sporting events in the games are a metaphor for life. The children are told about the importance of making positive choices; that by just getting up, coming and participating, they are winners. She pointed out the slogan is "If You Play You Win." She said that all children receive medals and the games try to show the children that one small success can lead to another success.

Ms. Wynn explained that volunteers involved with the games try to give the children some character development. A quality is attached to each of the sports ,such as kindness, courage, trust, or responsibility; and this year, for the first time, the games are introducing some educational components. She said there would be art, music, creative writing, chess, and a computer club.

Ms. Wynn made a video presentation using a video that is distributed to all of the schools in Clark County and is used to invite the children to participate in the inner-city games.

Ms. Wynn introduced two youths who are Youth Ambassadors, which is part of the inner-city games. She stated they were selected because of their strong character and leadership skills.

Jennifer Ross, Youth Ambassador, Greater Las Vegas Inner-City Games, testified she is 14 years old and attends middle school. She thanked the committee for the opportunity to speak. She said the inner-city games have taken her "out of the bed and onto the field" on Saturdays. She stated that before participating in the program she would just watch television and do nothing. Ms. Ross said this program has given her the opportunity to meet people and help them. She pointed out she does not teach the children how to play the sport, just how to improve their skills. She declared the inner-city games have changed her life completely.

Lisa Perry, Youth Ambassador, Greater Las Vegas Inner-City Games, who is a freshman at the vocational/technical high school in Las Vegas, stated she feels the most important thing the games have given her is a chance to interact with kids from all around the city. She said she listens to what is happening in their lives and gives them a chance to make a new friend. She stated it feels good to be part of something that is so good for the community.

Senator Raggio asked how long these games have been operating. Ms. Wynn answered this will be the fourth year. She said the organization began 5 years ago. She maintained it would have been inappropriate to seek state support prior to this time because it was a new program and was unproven, but now there is a track record. She said that what is great about the success of the program is that the children continue to express their interest in the program. She noted that every year there is greater participation and as of now, there are record-breaking numbers attending the clinics.

Ms. Wynn pointed out that the number and kinds of events have been increased to satisfy the interest in the program. The games have expanded from 130 event sites to 254. Ms. Wynn explained this is a communitywide collaboration in that there is very strong private support, which was needed. She said there have been generous contributions from the corporate community, both cash and in-kind. She noted the games are partnering with Clark County School District in that they are held on district sites, which she said is very good because it means the facilities are fully used on the weekends. She pointed out this has really helped to build community because of the parental involvement.

Ms. Wynn stated that now the problem is that the Inner-City Games are being asked to expand into more areas, such as Henderson and Boulder City and some of the more outlying areas. She said it is just a question of the resources available. She explained that the games have reached a point where the need is greater than the ability to fund the program, and "a more public balance" is needed.

Ms. Wynn suggested that this program is an example of prevention and is a way to invest in programs for children that can be preventive and intervening. She pointed out the Andre Agassi Foundation has been a key supporter of the inner-city games and the computer camps are being held at the Andre Agassi Boys and Girls Club. She said this can be seen as "a wonderful moment when the charter school movement can be matched with the Greater Las Vegas Inner-City Games to direct efforts to the population of youngsters that can really use help."

Senator Raggio asked what the total budget is for the program. Ms. Wynn answered it is approximately $1.2 million. She said most of the funding comes from the private sector. Senator Raggio asked what kind of assistance is received from the public. Ms. Wynn replied approximately $50,000 is received from Clark County and there are some in-kind services from the City of Las Vegas, in terms of staffing and facility use. Ms. Wynn noted this is a nonprofit organization.

Senator Raggio told the group from the Andre Agassi Foundation that a complete budget would need to be submitted indicating the foundation’s sources of funding.

Senator Raggio asked how the inner-city games mesh with all of the other established programs. Ms. Wynn answered it has been found that most of the existing programs do not overcome two important barriers, transportation and costs. She reiterated the games are a totally free program and the critical issue of transportation is resolved because the children use the school buses. She stated one of the most expensive components of the program is paying for the use of the buses. She noted the school district does provide a discount, but an expense is still an expense. Ms. Wynn stressed that a compact has been made with the children that whether there are 2 children or 35 children on the bus, they will be transported to the sites.

Senator Raggio asked what is being requested from the state. Ms. Wynn answered the request is for $250,000. Senator Raggio inquired whether this is a onetime request. Ms. Wynn replied she would like it to be ongoing, but she would be grateful for whatever the state would deem appropriate. She stressed that the games are seen as a public-private partnership. Businesses in Las Vegas have primarily paid for the program for the past 4 years, but it is to the point that sources have been exhausted and the fund-raising is a significant and ongoing challenge. She said they are prepared to continue to raise the funds to the level in the past, but the success of the program has increased the need and more funding is required if the program is to be expanded.

Ms. Wynn emphasized that she sees this program as a way to "get in the side door" to initiate more typical educational programs.

Senator Raggio stated there is no way the state can ever guarantee that if an appropriation is made it can be extended for more than 1 biennium. He said the concern in trying to better education, as well as to deal with troubled youth, is the need to get parents involved. He inquired whether parents get involved in the games program. Ms. Wynn answered that is one of the highlights of the program. She pointed out that parents do not find this program intimidating and said she thinks parents feeling intimidated is one of the issues with "school-based kinds of parent programs." She said many parents find a school environment somewhat intimidating for a variety of reasons. She explained that when parents do bring their children to the events, they are asked to help and become the volunteers. Ms. Wynn noted the involvement of parents is becoming stronger.

Senator Raggio called attention to the Chess Program in the Washoe County School District. He said it is not large, but it has been quite effective. He asked what the likelihood is that the inner-city games program could be expanded beyond Clark County. Ms. Wynn answered that good business partners would have to be found in other parts of the state. She said the key to all of the programs is the local and business leadership. She stated they would be willing to share their experience with other communities in the state.

John Pucci, Cochairman, Greater Las Vegas Inner-City Games, said he is a Burger King franchisee. He said that at a Burger King convention held in Reno last month, the owners of all of the Burger Kings in Reno and the outlying areas showed an interest in the inner-city games program.

Michael Edwards, private citizen, testified that he was the executive director for the inner-city games during the first 3 years of the program. He said the question about parental involvement is an excellent one. He stated it was found that parents are volunteering at an escalated rate throughout the community and are coming to the events with their children. He pointed out that sports is "the vehicle" for what takes place at these sites every Saturday, which is the networking between caring adults and the talk of values. Noting he had served for years as a high school principal, Mr. Edwards said the schools were always looking for avenues where children could go into the community, in nonthreatening ways, and be able to deal with and identify with caring adults in the community where they could be in contact with role models outside the school setting. He stated the Inner-City Games program accomplishes this and emphasized he has never seen anything like it in the 36 years he has been involved in Clark County.

Senator Raggio asked whether any improvement has been measured in the children’s educational achievement when they become involved in the program. Mr. Edwards replied "Absolutely." He said extensive surveys have been conducted over the past 2 years which indicate that a high percentage of the children return to the program. He stated the importance of focusing on sports is that probably two-thirds of the children involved in the program would not be the athletes that are involved with team sports at school. He pointed out this program provides avenues for the children to deal with clinicians, paid coaches and caring adults which they would not normally have. Mr. Edwards stated that given the fact the inner city fosters a situation where children spend an extraordinary amount of time on their own, this is one opportunity for them to go to a place that is nonthreatening. He said nobody expects them to become stars in a sport or in the arts, but they are given an opportunity to perform in these venues and to be involved with a caring adult whose emphasis is always on values.

Mr. Edwards stated the carryover is very noticeable and is reflected in surveys and in daily communication with the children.

Senator Coffin acknowledged Mr. Edwards, who was the principal of "two of the toughest schools in Las Vegas," for the contribution he made to children in those schools. He said who most people would have given up on these children.

Senator Raggio asked whether this presentation has been made to the Assembly. Ms. Wynn answered yes.

Senator Raggio opened the hearing on S.B. 485.

Senator Raggio reminded the committee that on May 11, 1999, the committee voted to amend and do pass this measure. He said this deals with the advisory board for the Nevada Task Force for Technological Crime. He commented he wants to make sure Amendment No. 880 conforms to the action of the committee. He stated, "The main thing it does is resolve a conflict with S.B. 27 in section 48."

Mr. Miles explained the amendment was requested by the committee to remove the appropriation that was in section 53 of the bill and replace it with an authorization for both the position of executive director of the technological crime task force, which was established by this bill, and for the computer forensic laboratory expenses.

Senator Raggio said if there is no objection, Amendment No. 880 to S.B. 485 will be submitted.

Senator Raggio noted there is an amendment to S.B. 363.

Senator Coffin said this amendment was heard in the Senate Committee on Natural Resources’ meeting. He stated:

Senator Raggio stated his intention to abstain from voting on this bill.

Senator Raggio said that it was voted on the Senate floor to amend A.B. 660 to restore the original version of the bill.

Senator Raggio said S.B. 111 was heard and passed out of this committee on March 4, 1999. He explained it deals with the State Dairy Commission. There was a problem over an agreement entered into for approving some purchase of retirement credit. He recalled the problem was that the commission did not want this to happen again without some type of existing, prearranged agreement.

Senator Raggio called attention to Assembly Amendment No. 732. He said the Assembly changed the language, but he did not know what the changes were. Senator Neal explained that in section 1, the Assembly took the language in subsection (a) and made it a part of the language beginning on line 3 of the original bill, so it would read "the state agency may enter into an agreement to pay for the cost of purchasing credit." He said that not much of a change has been made.

Senator Raggio said the bill used to read "a state agency shall pay the cost of purchasing credit if the agency entered into an agreement under which the member was employed" and under the amendment it will say "state agency may enter into an agreement if the agency enters into an agreement before the member is employed or the member is employed upon the condition that they pay that and the agreement to pay the cost is in writing." He stated it seems to be about the same. Senator Neal agreed.

Mr. Miles said Legislative Counsel Brenda Erdoes indicated to him that this amendment actually changes this law, but it also changes the focus of this section of NRS from "purchasing credit for retirement service" to "entering into an agreement with an employee before employment."

Senator Raggio called attention to an amendment to A.B. 289. He commented that the committee voted previously to amend and do pass this bill. He said the amendment would limit the use of the vending machine money that was discussed to what is in the visitors’ areas of institutions and facilities of the Department of Prisons. He stated the remainder could be used for employees.

Senator Raggio stated that Senate Amendment No. 902 to A.B. 289 will be utilized to limit the money going into the Store Fund and it is clear by this amendment that the money going into the vending machines in the employees’ area can still be utilized for purposes of the employees.

Senator Raggio stated that S.B. 70 was heard on March 4, 1999, dealing with public school accountability, and there are some amendments.

Senator Raggio recalled there were a number of individuals testifying on this bill and he had asked staff to consolidate the suggested amendments.

Jeanne Botts reviewed the summary of suggested amendments to S.B. 70 shown in Exhibit I. She said the additions to the accountability report have become an issue in recent days.

Senator Raggio said he would address the issue of students failing the high school proficiency examination later in the meeting because there is a proposal that he would like to discuss with the committee.

Ms. Botts continue reviewing the suggested changes to the bill shown in Exhibit I. Senator Raggio commented that as the suggested amendments are reviewed, he would like to hear any concerns.

Ms. Botts said that school districts must prepare what is called the Part III Quality Improvement Report each year, and that is their plan for improvement. She pointed out there have been some concerns because the reports come out in March and cover the prior school year. She said when the Part III report is due in June it is almost a year old. Several of the school districts had indicated they did not want the report restricted to what happened over a year ago. Ms. Botts explained that the changes in section 6 would incorporated any recent data and what the district is currently doing in response to the deficiencies noted in the accountability report, as well as in the past. She said it also requires the school district to note the deficiencies that might have been pointed out by the panel reviewing the accountability reports.

Ms. Botts stated there had been a statement that the plan needed to include some type of proposal for improving the attendance of teachers. That was considered offensive to some and has been removed from section 7.

Melinda Braun, Education Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reviewed section 9 of the amendments. Senator Raggio asked what it means when it says "schools having too few pupils." Ms. Braun explained it is schools with 10 or fewer pupils. She pointed that in those cases, the schools do not want to have a child’s identity exposed.

Ms. Botts explained that the State Department of Education has prepared regulations on this issue, but when changes to other law were being proposed this year the Legal Division pointed out the current law did not allow the authority to exempt a school. This change would provide the districts that authority. Senator Raggio said his understanding is that section 9 would not change what the districts have been doing.

Ms. Braun noted that section 15 changes the reporting procedure for schools designated as "needing improvement" from four reports a year to two reports a year, one at the end of each semester.

Senator Raggio said he has a note on section 16, subsection 5, indicating there is a question about the due date of May 1 for one of the reports, and the State Department of Education requested a June 1 date because they wanted to allow for a waiver. Ms. Botts said the date was changed to June 1. Senator Raggio said there was also discussion of an August 1 date. Ms. Botts stated that date has been included. She noted the effort was made to include all of the suggested date changes.

Ms. Braun noted that sections 17, 18, and 19 also change dates, but section 19, also changes the reporting procedure for schools that were designated as needing improvement, where the school administrator has been replaced, from four reports a year to two report a year.

Ms. Braun said section 22 makes technical adjustments so that charter school accountability language is aligned with other sections of the bill. Senator Raggio asked whether accountability was addressed in any of the bills discussed earlier today. Ms. Botts said she believes it is already required in the bills, but she will review the matter.

Ms. Botts explained that section 23 primarily corrects errors in A.B. 523 of the Sixty-ninth Session. There were several mistakes made when the bill was drafted.

Ms. Botts said:

Ms. Botts said the amendment clarifies that a pupil with a disability who is unable to take the examinations under regular conditions or with modification approved by the test publisher may take the examination with modification and accommodations approved by the State Board of Education. Additionally, a pupil with a disability may be allowed additional time to complete the High School Proficiency examination if additional time is a testing modification authorized in the pupil’s individualized education program (IEP).

Ms. Braun explained the major changes in section 24 shown on pages 3 and 4 of Exhibit I. Ms. Botts said the idea is that districts not be discouraged from testing some of the special population due to a concern that their school or districts’ score might be lowered. She said average scores would be received for each sector identified in section 24. She stated the only scores reported as schoolwide or districtwide are examinations that are taken under regular or approved conditions. She pointed out these provisions were put into A.B. 523 of the Sixty-ninth Session, which was reworked by Assemblywomen Cegavske and Guinchigliani to try to encourage more testing in special populations. But under this bill the scores would be averaged into the total, and that was the problem.

Ms. Botts noted that section 26 dealing with the professional development centers is deleted and will be handled through the DSA.

Senator Raggio commented he does not see anything alarming in these amendments. He said they appear to be what had been discussed and seem to incorporate everyone’s concerns.

Senator Raggio remarked that the Assembly Committee on Ways and Means has had considerable discussion concerning the fact that a number of students had failed the High School Proficiency Examination after taking it the allowable number of times. He said the ultimate decision, which he thinks was a wise one, was that the passing score would not be lowered. He stated that he had indicated the Senate would support some accommodation to allow a further opportunity for those students, following graduation exercises, to attempt again to pass the test and to provide some remedial program for the students to be tutored for this purpose. He noted he has asked fiscal staff to work with the Assembly to devise a proposal that does two things: (1) the passing grade would not further be lowered, and (2) there would be an opportunity for those students who have not passed to have a remedial program and attempt to pass the exam.

Ms. Botts referred to page 2 of Exhibit J, a memorandum regarding a summer 1999 intensive remedial program. She said that pages 9 through 11 are a suggested bill draft for an amendment or inclusion in another bill. She explained this suggested bill draft adds transitory language that provides the opportunity for pupils who would have received a standard high school diploma in June of 1999 if they had not failed the High School Proficiency Examination in mathematics, to receive intensive, remedial instruction in the summer of 1999. It also confers upon them a standard diploma if they pass the proficiency exam after receiving such instruction.

Ms. Botts reviewed sections of the suggested bill draft shown on pages 9 through 11 of Exhibit J. Senator Raggio stressed it needs to be understood that the required passing score of 61 is only for 1999 and is not a percentage. Ms. Botts explained that in the first form of the test administered in April of 1998, the percentage meant 61 percent of the questions; but in subsequent administrations the percentage has declined. She stated that most recently the requirement was that a passing score must be received in 55.2 percent of the questions.

Senator Raggio pointed out that is a scaled score based on the number of questions on the examination. Ms. Botts noted some of the questions are repeated on the form so that the forms can be "equated."

Senator Raggio commented that the money which is required to pay expenses of teachers or personnel hired, and for instructional materials for the remedial programs, is probably needed before the end of the fiscal year, so there would have to be an appropriation from this current fiscal year. Ms. Botts agreed. She pointed out that is why she had written this to be in operation upon passage and approval.

Senator Raggio opined this would be going the extra mile to address the needs of students who have not been able to pass the exam. Senator Neal asked where in the suggested bill draft it says students must have received the information on which they are tested. Ms. Botts answered the student must have completed any 2 credits of mathematics. She said the test itself does contain problems on beginning algebra and geometry, but the formulas are included. She stated the State Department of Education has identified that a student could miss those questions and still succeed. She noted 26 questions of the 58 could be missed.

Ms. Botts said the State Board of Education set the course of study in 1992 and math standards were adopted in 1994. She explained that the framework of this test was designed at that time and the districts should have been aware of what was required. She stated the State Board of Education officially adopted the framework in 1995, when the Legislature appropriated the funding for test development. She said these tests do not include the new standards that were adopted in August 1998. Ms. Botts maintained the school districts were aware of what was required and should have included the necessary information in the math courses that the students were taking.

Senator Neal said the question would be, Is there any evidence, in terms of a report to the State Board of Education, as to whether or not these standards were included in the curriculum? Ms. Botts answered that Mary Peterson, Superintendent of Public Instruction, would be a better person to answer that question. She said the Fiscal Analysis Division conducted a survey and has heard from only six of the counties. She stated the districts were specifically asked what they have done in terms of changing and assuring that their curriculum aligns with the standards. She said what the suggested plan does is provide intensive work for those students who did not pass the math portion of the examination, whether the information was included in the coursework and they did not master it or they might were not given instruction in the necessary content.

Ms. Botts said this bill does require the school districts to look at the coursework of the students who will be juniors this year and effect steps to help them in their senior year. Senator Neal asked whether this is just one state standard test that is given to all of the students in the state. Ms. Botts answered yes. She pointed out there are different forms of the test. She said it was designed by teachers in the state of Nevada and there is a test bank from which to take questions for the tests. Senator Neal asked what "different forms of the test" means. Ms. Botts replied that the test is changed around so that students do not retake exactly the same test.

Senator Raggio noted the current test was based on current standards, not the new, higher standards. Ms. Botts pointed out that S.B. 104 specifies the High School Proficiency Examination for the class of 2003 will encompass the new standards which were just adopted.

Senator Raggio stated that one of the alibis going around is that the tests were not valid and did not cover what was being taught. He pointed out that approximately 90 percent of the students passed the test.

Senator Raggio suggested placing the proposed draft on one of the existing bills so it can be processed as soon as possible. He reiterated this appears to be a further effort to help the students who have had continued difficulty in passing the proficiency test, without doing damage to the level of requirement that other students have met.

Senator Raggio recessed the meeting at 10:55 a.m. and reconvened at 1:30 p.m.

Deborah Smith, Chairman, Council to Establish Academic Standards for Public Schools, testified she has been following the work that has been done in the past few days on the proficiency exam. She stated that with the increased standards movement and all of the reform and accountability issues, some things might become harder before they get better. She pointed out that the new, higher standards have not been implemented and testing has not been done with these standards in place. She said her point is that some "rocky times" will be encountered as the standards are implemented. She stressed it is important to determine who needs remediation and to help those students get through the process and obtain their diploma. She said the bottom line is not just to graduate, it is to know the material, and funding for a remedial program provides that opportunity.

Senator Raggio acknowledged the committee is considering funding the remediation program. He said he is hopeful the Assembly will agree. He said that would not include in any way lowering the established passing grade. He pointed out that the passing grade for this class was already artificially lowered using the course material that has been authorized for approximately 4 years. Ms. Smith stated she supports doing what can be done to help the students learn the material.

Senator Raggio pointed out that the remedial program would be doing more than what has been done for past classes because previously, students were not given additional opportunities to take the test. He reiterated there is a lot of misinformation that the process is requiring students to be tested on the new standards and the courses have not been taught yet.

Ms. Smith suggested that perhaps a component missing is the public relations portion. She said that ways of better informing the public need to be considered. She stated she is not sure all of the information the average person thinks he or she knows about the test is accurate. She maintained the problem will be ongoing as the standards are implemented and the proficiency exam becomes aligned to the standards, and she emphasized the public needs to be informed.

Senator Raggio expressed appreciation to Ms. Smith and all those who have worked hard over the past 2 years to deal with enhanced standards.

Senator Raggio opened the hearing on S.B. 466. He said testimony was heard on this bill on April 26, 1999. He noted he had asked the fiscal analysis staff to review the bill and remove those portions that were particularly contentious. He recalled that the first 5 sections dealt with the reconstitution of the State Board of Education. He said the proposed reconstitution has been deleted from the proposed amendment, at least for this legislative session.

Ms. Botts pointed out the bill has been reduced from 60 sections to 10. She said section 2 contained the provision to provide for an appointed, rather than an elected, state board, and that has been removed. Senator Raggio suggested starting the review of the bill at section 6.

Ms. Botts explained the old language in section 6 requires the State Board of Education "to prescribe and cause to be enforced the courses of study throughout the state." She said the new language is "the courses of study prescribed and enforced by the board must comply with the standards of content and performance established by the Council to Establish Academic Standards for Public Schools." She pointed out this will reinforce that the course of study to be followed in the state match the new standards.

Ms. Botts testified that section 7 was the provision dealing with the state’s superintendent of public instruction. She said the original bill reduced the term from 3 years to 1 year. She stated this amendment puts it back at 3 years but does provide authority for the state board to remove the superintendent for cause. It also provides that a vacancy must be filled by the state board for the remainder of an unexpired term.

Ms. Botts said section 8 requires the superintendent of public instruction to provide a biennial report to the Legislature. She noted that existing law requires a biennial report, but it is her understanding that has not been done for quite some time. She said this also requires the superintendent to report to the Legislature in each regular session.

Ms. Botts stated that sections 9 through 22 are deleted. Senator Raggio recalled that some of what was deleted is in other bills. Ms. Botts explained that section 10 exempted small schools from the accountability rankings. She noted that amendments to S.B. 70 take care of that. She stated that the state board provided in regulation that this occur, but the Legal Division opined there was no legal authority to do that; so that was added to S.B. 70 earlier in today’s meeting.

Ms. Botts said section 11 dealt with charter school students taking the examinations linked to the standards. Senator Raggio said that could be dealt with in the charter school law. Ms. Botts explained that sections 12 through 14 dealt with financial audits of school districts and those sections could be dealt with in the school-funding bill. Senator Raggio requested staff to note that language in the funding bill.

Ms. Botts stated section 15 deals with teachers who have received certification from the National Board of Professional Teaching Standards and that issue is dealt with in S.B. 46 and S.B. 47.

Ms. Botts pointed one of these bills were amended, but they have passed. She said section 16 was a suggestion to change the name of the Fund for Class-size Reduction (CSR) to the Fund for Class-size Reduction and Pupil Achievement. She explained that the issue of how the CSR money and fund will be used, will be determined by the Joint Subcommittee on Human Resources/K-12 when they close the DSA and CSR, so that does not need to be dealt with in this bill.

Ms. Botts pointed out sections 18 through 28 dealt with making the Council to Establish Academic Standards for Public Schools permanent and giving the body additional duties, namely prescribing the examinations to be given linked to the standards, and those sections have been deleted.

Senator Raggio asked what would happen to the council if the permanency of the council is not provided for. Ms. Botts answered that under S.B. 482 of the Sixty-ninth Session, the council sunsets June 30, 2001, and at that point the duties of the council are assumed by the Legislative Bureau of Educational Accountability and Program Evaluation.

Ms Botts said this bill made the council permanent and expanded the duties, including prescribing the examinations to be given be linked to the standards. She stated exams have been recommended by the council for grades 3 and 5. Senator Raggio asked why it is being deleted in this bill. Ms. Botts stated it is up to the committee and it can be put back into this bill. She said there had been testimony, primarily from the State Board of Education, that there were concerns, and there has also been concern among members of the council.

Senator Raggio said thresholds have been set and it would not be a big step from setting thresholds to setting standards. Ms. Smith testified:

Senator Raggio asked whether Ms. Smith thinks the council should be retained. Ms. Smith responded she thinks the council has done very valuable work and has worked well with the State Department of Education and various bodies to accomplish what has been done so far. She said she does not feel at liberty to speak on behalf of the council, beyond that

Senator Raggio pointed out she does not have to speak for retaining the membership of the council, but asked whether she sees a role for the council in the years ahead. Ms. Smith replied it has been clear that the standards have to be revisited and reworked on a continuing basis by someone.

Mr. Bacon commented on the grade-by-grade standards. He said that from his standpoint, taking a look at what has been done in some of the other states, this is probably the biggest issue in S.B. 466 that he would like to see addressed. He called attention to an article shown on pages 2 through 4 of Exhibit K. He said this article discusses what the state of Tennessee has been able to do by implementing grade-by-grade standards. Mr. Bacon stressed that if the desire is to implement long-term education reform, grade-by-grade standards are needed in the key academic areas.

Ms. Botts explained that section 21 of the bill required the State Department of Education to provide administrative support to the permanent council and has been deleted. Section 22 required that core academic subjects be taught and is the same language that is in S.B. 445, so it was deleted from this bill. Ms. Botts noted that section 23 has been retained and requires the board of trustees of each school district to conduct a periodic review of the courses of study offered in the public schools of their school district, to determine whether the courses of study comply with the standards of content and performance established by the council and whether revision of the course of study is necessary to ensure compliance. She said this is the curriculum audits which is preformed to ensure that what is being taught in the schools matches the state standards.

Ms. Botts said section 24 deals with the standards-based exams. It was deleted and will be handled through the DSA, and that is also true of the section requiring the local boards to look at training and reviewing the results of criterion-referenced tests (CRTs). She said section 27 created a testing advisory committee and that was also contained in S.B. 15, which was indefinitely postponed in the Assembly Committee on Education.

Ms. Botts stated that section 28 specifies the duties of the testing advisory committee and that has also been deleted. Senator Raggio asked why the Assembly indefinitely postponed S.B. 15. Ms. Botts answered that the testimony provided by Keith Rheault, Deputy Superintendent for Instruction, Research and Evaluative Services, indicated the State Board of Education could appoint a committee now if they wished and a law was not needed.

Ms. Botts testified section 29 has been retained and requires that the board of trustees in the school districts enforce the standards of content and performance established by the Council to Establish Academic Standards for Public Schools, as well as the courses of study prescribed and adopted by the State Board of Education.

Ms. Botts noted that section 30 requires the department to transmit results of the statewide proficiency exams to the Legislative Counsel Bureau. Senator Raggio asked why that is being deleted. Ms. Botts answered it was her thought this would be included with the appropriations for testing. She said there was considerable difficulty in getting the test results during the past year.

Ms. Botts explained that sections 31 and 32 have been retained and deal primarily with textbooks and software for computers. She said there is a requirement in section 32 that if a textbook is proposed for selection which is in a subject area for which standards of content have been adopted by the academic standards council, the State Board of Education will not select the textbook unless the board determines the textbook adequately supports the standards. This is to ensure that instructional materials are aligned with the standards established by the Council to Establish Standards in Public Schools and approved by the State Board of Education.

Senator Neal said he thought this was dealt with when A.B. 219 failed earlier today on the Senate floor.

Senator Raggio said this bill would have established a level of funding for categories of textbooks and instructional supplies based on an average of expenditures over the past 3 years.

Senator Neal asked how this bill differs from A.B. 219. Ms. Botts explained that A.B. 219 dealt with the level of expenditures requiring school districts to spend no less than a 3-year average. She said section 32 does not have language about spending, it just says that the textbooks and instructional supplies must be aligned with the standards.

Ms. Botts pointed out sections 33 through 37, which basically dealt with tiered licensing, have been deleted. Senator Raggio said this was included in S.B. 22.

Ms. Botts reported S.B. 22 "failed to be moved out of the Assembly Committee on Education." Senator Raggio asked it this fails to be passed, what is in the law to further the goal that an applicant must satisfy special conditions to teach science and math, if S.B. 22 is not passed. Ms. Botts answered that currently the qualifications for licensure in math and science are set by the Commission on Professional Standards, which has the ability to modify the regulations if they so choose.

Senator Raggio asked what the commission has done that addresses this issue. Ms. Botts responded that to her knowledge nothing new has been done. Senator Raggio asked what is currently in the regulations that gives some assurance that math and science teachers are qualified to teach. Dr. Rheault noted he staffs the Commission on Professional Standards. He said what is currently in place for math and science is that there are standards for both a math major and a math minor and there are teacher endorsements in each of these. He said that all of the criteria currently considered are based upon the initial licensure. He maintained the math criteria is the most stringent. He stated there have been requests from the Board of Regents of the UCCSN to ease the requirements for receiving a math endorsement. He pointed out there is a detailed listing of all of the coursework required for an initial licensure and if an applicant does not have the requirements upon application, an endorsement will be granted if the applicant needs 6 or fewer credits to meet the requirements. A 3-year nonrenewable license would be issued and the individual would have 3 years to make up the coursework. Dr. Rheault stated the applicant must pass the 3 math specialty-area tests. He said an applicant receives a renewable license after having qualified with all of the coursework and testing. He stated the weakest area is in the area of renewals. He said credits for renewal are not specified as being in math or science.

Dr. Rheault pointed out the commission has established a taskforce to review items that have come up in this legislative session. He said the taskforce will be looking at revising renewal credit requirements.

Senator Raggio asked what is objectionable about the language in S.B. 466 section 34. He said he is particularly concerned about the capabilities of math and science teachers. Dr. Rheault said his primary objection to S.B. 22 was that the licensing analyst are already doing exactly what the bill was asking for on initial licensure and identifying coursework applicants were "short in." He recalled that there probably was not an objection to S.B. 466 when the commission reviewed suggested bill drafts from the Legislative Committee on Education. He said the only comment was that the commission would like to look at models other than just the Utah model and determine what would be best to put into regulation.

Ms. Botts pointed out that section 35 required the State Department of Education to maintain a list of standards-based continuing education programs for teachers, and local boards were required to report on training. She said this can be handled in the appropriation for professional development.

Ms. Botts said that sections 36 and 37 dealt with revising the appointment and membership of the Commission on Professional Standards. She noted this was also in S.B. 59, which did not move out of the Assembly.

Ms. Botts said section 38 requires the State Board of Education to work with boards of trustees of each school district in reviewing and approving the training programs offered by higher education for training teachers. In addition, the state board could not approve a course of study or training of teachers in institutions of higher education unless the course of study contained training in the standards of content and performance adopted by the State Board of Education.

Ms. Botts pointed out that in teacher preparation programs there would be involvement of the local school districts and the state board could not approve a teacher-training program if it did not link to the standards. She stated this section has been retained. She said this in on page 4 of the modified bill.

Ms. Botts noted section 39 was somewhat controversial and has been removed. It would have required that school districts not employ teachers in subject areas in which they did not hold a license.

Ms. Botts stated that section 40 relates to the National Board of Professional Teaching Standards and requires the 5 percent salary increase. Senator Raggio asked what bill this is contained in. Ms. Botts answered it is in S.B. 46 and has passed the Assembly. Senator Raggio asked whether the bill was amended. Ms. Botts replied no. She explained the Assembly amended S.B. 47, the appropriation measure tied to S.B. 46, to reimburse teachers for the training cost of obtaining certification. The Assembly also added a requirement that if a teacher who does not remain in Nevada and teach for 2 years, would have to repay the reimbursement costs.

Ms. Botts said section 41 has been removed and would have provided a waiver for schools to employ a teacher without a proper license in the subject area in which they were going to teach.

Ms. Botts pointed out section 42 required that under the waiver a person not having a proper license would not have to be supervised by a licensed teacher and has been eliminated.

Ms. Botts explained that section 43 would sunset the current Council to Establish Academic Standards for Public Schools in order to make it a permanent council. She said this was something the bill drafters did to terminate the existing council, providing for the members’ reappointment and making the council permanent. She pointed out that if the council is not being made permanent, the sections are not needed.

Ms. Botts stated that the appropriations start with section 44 and many of them will be handled through the school funding bill.

Senator Raggio stated that section 50 is retained and noted this was the program which had a demonstration of the Financial Analysis Model. Ms. Botts explained that all of the other appropriations are either eliminated or handled through the DSA or other K-12 budget accounts.

Senator Raggio said his questions are on the advisability of not retaining the Council to Establish Academic Standards for Public Schools and the issue of grade-by-grade standards. He said it seems the council should be retained. He stated that the grade-by-grade standards, if not immediately achieved, should be a goal to be achieved "within a period of time."

Ms. Botts clarified that the standards council does continue for another biennium and if the desire is to continue the council beyond that, a phased-in approach for the grade-by-grade standards could be implemented, addressing reading and math or core subjects only. Senator Raggio stated he would suggest that be done.

HR, MH/MR Administration – Budget Page MH/MR-1 (Volume 2)

Budget Account 101-3168

Bob Guernsey, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, called attention to a listing of General Fund changes indicating the additions in each year of the biennium (Exhibit L), as well as a recap of the possible Letters of Intent that were approved by the Joint Subcommittee on Human Resources/K-12 (Exhibit M). He pointed out that the total net change in the division budgets is $1,633,915 in FY 2000 and $3,729,764 in FY 2001. He noted this increase is offset by the Medicaid budget of approximately $6.5 million.

Mr. Guernsey reviewed the MH/MR Administration budget shown on page 1 of Exhibit N. He said the joint subcommittee agreed to add the Psychiatric Residency program back into the budget, which will provide funding for psychiatric residents from the medical school at the Nevada Mental Health Institute. He said the funding that was restored was $162,140 in each year of the biennium.

Mr. Guernsey stated the subcommittee felt that with the additional revenues being added, especially in the mental retardation area, the reestablishment of a management analyst position was warranted. He said the budget was also adjusted for changes in computer hardware and software prices. An adjustment of $10,000 a year in revenue was made to provide for a clinical program manager from Rural Mental Retardation Services being moved to this budget. The adjustment would allow this budget to collect some federal funding,

Senator Raggio asked whether the $162,140 a year restores the Psychiatric Residency Program to its present status. Mr. Guernsey answered it does. He indicated the amount represents a cost savings because the amount originally in the budget was approximately $175,000 a year. He explained that the division indicated this could be lower given the actual time the residents spend providing services at the institute.

Senator Raggio called attention to a letter supporting the projected savings shown on page 2 of Exhibit N.

HR, Nevada Mental Health Institute – Budget Page MH/MR-5 (Volume 2)

Budget Account 101-3162

Mr. Guernsey stated there were revenue adjustments totaling approximately $203,000 in each year of the biennium shown on page 5 of Exhibit N. He explained that the costs of the programs added by the 1997 Legislature for the Program for Assertive Community Treatment (PACT), and the eight-bed Residential Treatment Program in the community were annualized and the expenses were built into the base budget, but the revenues and support of those programs were not so that the revenue can be captured and the General Fund cost reduced.

Mr. Guernsey reviewed the issues for the subcommittee shown on page 6 of Exhibit N. He said the Las Vegas Mental Health Center has had a 10-bed psychiatric emergency program that allows the clinicians to hold a potential client up to 72 hours, perform an evaluation, stabilize the clients if they can, and hospitalize those that are unable to be stabilized. He stated this has proved to be a cost-effective method of lowering the inpatient census.

Mr. Guernsey indicated that the subcommittee did agree with adding the 10-bed psychiatric emergency unit, similar to the one in Las Vegas, to the Nevada Mental Health Institute budget. He said there were several approaches to implementing this unit and the one selected brings an additional General Fund cost of $497,157 in FY 2000 and $739,787 in FY 2001. With the addition of 10 beds in the facility, the subcommittee felt that the 52-inpatient census could be lowered from 52 to 50 beds.

Senator Raggio recalled that the facility is complete and would be empty unless this program is approved. Mr. Guernsey pointed out that the renovation of building No. 7 was approved by the 1997 Legislature in planning ahead for the implementation of this program, until the new psychiatric hospital can be completed.

Senator Jacobsen asked what staff thinks about the Letter of Intent. Mr. Guernsey said Exhibit M deals with the Letters of Intent suggested for the MH/MR budgets. Senator Jacobsen asked whether the Letter of Intent could be included in the last motion. Mr. Guernsey said the committee might want to issue a Letter of Intent directing the agency to report quarterly to IFC on the progress and daily census of the 10-bed psychiatric emergency program, and indicate what effect the program has on the inpatient census.

HR, Facility for the Mental Offender – Budget Page MH/MR-11 (Volume 2)

Budget Account 101-3645

Mr. Guernsey noted that the only adjustments in this budget are technical adjustments updating the prices for computer hardware and software.

Senator Raggio noted this includes the opening of the new 12-bed addition.

HR, Rural Clinics – Budget Page MH/MR-15 (Volume 2)

Budget Account 101-3648

Mr. Guernsey pointed out there are a number of adjustments to this budget in addition to the technical adjustments for the computer prices. He reviewed the adjustments shown on pages 15 through 16 of Exhibit N. He said that after reviewing additional staffing and programs which were added by the 1997 Legislature, revenues were increased by $67,302 in each year of the biennium and this reduces the General Fund cost. He stated testimony received has indicated that the facility in Douglas County is extremely overcrowded. He said the agency presented a plan to move to additional space, but the cost of the move can be offset through additional revenues. The joint subcommittee supported the plan. Mr. Guernsey stated that the final action was to approve a Clinical Social Worker position for the new Silver Springs facility which will be in close proximity to the new five-county juvenile facility. He reported it was felt that with caseload growth in the Silver Springs area and with the facility being close, the position was warranted and could provide services to all of the clients and work in conjunction with the new facility. She said the division would be working with the five counties to seek reimbursement for services provided in support of the facility.

Senator Raggio asked what has happened at the Mesquite clinic. Mr. Guernsey answered the facilities in Mesquite were authorized and opened last legislative session. He reported that the Pahrump facility is also in operation. He said Laughlin is working in conjunction with Arizona and will most likely be coming to the next Legislature with a plan to provide a full array of services to that area.

Senator Raggio asked whether there is some funding that comes in from the counties on these programs. Mr. Guernsey stated there is in the Lakes Crossing facility, where state staff are providing services to the jails in Clark and Washoe Counties. He explained the counties reimburse the state for part of the cost of a position. He said the division has indicated they are going to work with the five counties to try to arrive at a similar arrangement and any savings that would come in as a result of that would be put in reserve for reversion. Without having a firm plan in place the only way to pay for the position is through the General Fund.

HR, Southern Nevada Adult Mental Health Services – Page MH/MR-20 (Volume 2)

Budget Account 101-3161

Mr. Guernsey explained that the revenues in this budget have also been adjusted to fully reflect revenues from the 10-bed psychiatric emergency services (PES) program and updated physician billings. He reported that the division is taking an assertive role in trying to ensure the capturing of all of the revenue which is available for the state to offset the General Fund costs in support of these programs. He reviewed the positions requested and rent increases in support of a move of the East Sahara Clinic as shown on page 17 of Exhibit N. He indicated increased revenues would offset the cost of the move.

Mr. Guernsey reviewed the 4 Letters of Intent listed on page 18 of Exhibit N.

HR, Southern MH/MR Food Service – Budget Page MH/MR-27 (Volume 2)

Budget Account 101-3159

Mr. Guernsey noted there are no changes in this budget.

HR, Southern Nevada Mental Retardation Services – Page MH/MR-36 (Volume 2)

Budget Account 101-3279

Mr. Guernsey reported there are no changes in this budget.

HR, Northern Nevada Mental Retardation Services – Page MH/MR-30 (Volume 2)

Budget Account 101-3280

HR, MH/MR Resident Placement – Page MH/MR-44 (Volume 2)

Budget Account 101-3167

Mr. Guernsey stated that pages 21 through 23 of Exhibit N indicate the actions of the subcommittee and the issues for the subcommittee in reviewing the mental retardation budgets. He said that there was a significant increase added under decision unit M-600 as a result of the state’s having lost a court case. He pointed out that with the additional funding added for that and for other programs in the state, The Executive Budget was constructed such that only 25 percent of the anticipated residential waiting lists can be met by the end of the coming biennium.

Mr. Guernsey reported the subcommittee worked in concert with the Department of Human Resources and the MH/MR division to develop a number of plans, including an all-waiver plan which the subcommittee finally decided upon. He said it is being proposed to remove the funding from the Medicaid budget for the 54 intermediate facility beds, to shut down 6 state-operated beds in southern Nevada, and 12 state-operated beds at the Nevada Mental Health Institute, effective July 1, 2000, and to reallocate that funding along with additional revenue in these budgets to fully meet the waiting lists. This would provide services to 184 residential placements: 118 in southern Nevada, 43 in northern Nevada, and 23 in rural Nevada. Mr. Guernsey pointed out that 166 of these beds are new and 18 are transfers from the state-operated beds. He said the updated General Fund cost of the plan would be $1.4 million in FY 2000 and $3.3 in FY 2001, for a total cost of approximately $4,672,000. He noted this is offset by the savings in the Medicaid program. Over 2 years, by reallocating the funding for the 54 bed intermediate-care-facility-for-mentally retarded (ICF/MR) small beds and capturing some additional revenue, the total savings would be approximately $1.7 million over the coming biennium. He said this would fully meet the waiting list demand for residential community training centers, jobs, and family support for all of the clients and still save some money.

Mr. Guernsey pointed out this affects the Northern, Southern, and Rural Mental Retardation services budgets.

Senator Raggio stated all three budgets could be closed with those adjustments.

HR, MH/MR Home Care – Budget Page MH/MR-42 (Volume 2)

Budget Account 101-3166

Mr. Guernsey stated that the subcommittee suggests closing this budget as recommended by the Governor.

HR, Mental Health Information System – Budget Page MH/MR-50 (Volume 2)

Budget Account 101-3164

Senator Raggio thanked Mr. Guernsey and the subcommittee for all the effort made on these budgets.

Gaming Control Board – Budget Page GAMING-1 (Volume 2)

Budget Account 101-4061

Mr. Miles stated that pages 10 through 12 shown in Exhibit N include the reinstatement of the Chief of Audit position. He reminded the committee that the Governor had deleted the position because it had been vacant for an inordinate amount of time. He explained that the position was vacant because the individual in the position had been temporarily assigned the responsibility of Chief of the Electronic Services Division, which was vacant because the salary was too low to attract someone with the necessary education and work history for the position.

Mr. Miles noted this budget was not heard by subcommittee, it was heard by the Senate Committee on Finance and Assembly Committee on Ways and Means meeting jointly. The discussion at the joint committee meeting was that with a full audit program planned over the next several years, perhaps the Chief of the Audit Division should be reinstated. That is reflected on page 10 of Exhibit O.

Mr. Miles said another recommendation is the movement of the "credential pay plan." He stated money has been appropriated in the unclassified pay bill for certain individuals having professional licenses or a higher education degree in engineering or electrical engineering. He said this money was placed into the budget and the recommendation is that the money, if approved, should be again placed in the unclassified pay bill because there is certain restrictive language as to how that money can and should be used.

Senator Raggio asked how much that is each year. Mr. Miles answered it is $177,500 in each year of the biennium for the purposes indicated above. He pointed out that the Gaming Control Board (GCB) would like to increase the numbers of positions which would qualify for the increase.

Mr. Miles stated the GCB has testified the board needs to network its offices in the northern and southern parts of the state. He said there is a substantial sum of money available from forfeiture funds, which the GCB will propose to the IFC be used to offset costs. He pointed out that forfeiture funds cannot be used for ongoing costs, only for onetime costs, so the board has requested an additional $43,983 in each year of the biennium be added to the GCB budget. He indicated this has not been included in the closing sheet. Mr. Miles stated that a description of the requested funding is on page 13 of Exhibit O.

Mr. Miles said another issue is whether or not to approve an additional $20,000 a year to provide $2,500 a year for each of the five members of the Gaming Commission and three members of the GCB to travel to out-of-state seminars and meetings. He referred the committee to page 14 of Exhibit O, a letter requesting funding for travel and registration costs. Senator Raggio pointed out it has been found that the members have been paying these expenses themselves.

Mr. Miles stated that to cover the Gaming Commission members and the GCB would add approximately $20,000 a year. He said the Assembly Ways and Means committee did not approve the addition when it closed the budget, but did approve funding for network and imaging projects.

Mr. Miles said the unclassified position reclassifications would be reviewed when the unclassified pay bill is discussed.

Senator Raggio requested fiscal staff to note requests for changes in the unclassified pay bill.

Senator Raggio stated he disagrees with the ways and means committee on the travel for the commission and board members. He said it is uncalled for that they be required to pay their expenses when they go to meetings.

Gaming Control Board Investigation Fund – Budget Page GAMING-8 (Volume 2)

Budget Account 244-4063

Mr. Miles stated there are no adjustments to this budget.

High Level Nuclear Waste – Budget Page ELECTED-10 (Volume 1)

Budget Account 101-1005

Mary A. Matheus, Local Government Budget Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated the recommendation on this budget was to close as recommended by the Governor. She said this would include the addition of $1,099,439 in FY 2000 and $1,063,101 in FY 2001 of General Fund money in addition to $400,000 a year from the Highway Fund, as indicated on page 1 of Exhibit O. She noted that the funding that has been available in the past from the U. S. Department of Energy has been greatly reduced.

Senator asked whether there are votes to close the budget. He stated he would support the budget.

Senator Jacobsen said he has noticed the Agency for Nuclear Projects is included in the Governor’s recommendation. He said he does not approve of the Governor setting salaries for this staff.

Senator Raggio asked whether it is the committee’s desire to leave the budget open. Senator O’Donnell pointed out that years have gone by and money allocated by the federal government has been used to fund this office. He said:

Senator Raggio noted the IFC has provided General Fund dollars to allow the office to remain open. He stated the Governor is recommending the full funding that is required to pursue the goals and directives that go with this office. The senator stated he has been critical of this office in the past. He said he believes there is not much choice at this point, however, but to continue to support the funding, but for the purpose it was intended for. That purpose is to determine the safety and the security of the project, and not to be used for unrelated purposes."

Senator Neal commented if that were what the money had been used for, he would not have a problem approving it now. Senator Raggio agreed. He explained that the reason the federal funds have been withdrawn is that federal law requires the U.S. Department of Energy (DOE) to fund this office, but the DOE has refused to do so because the it says the funds have been misused. He said, "Now we have to go forward, with an understanding that this administration is going to make the office adhere to using the funds as required."

Senator O’Donnell stated he received an e-mail from a constituent saying the person was unable to obtain a handicap placard from the Department of Motor Vehicles and Public Safety (DMV&PS) "because they had run out of their supply, and yet we are going to take $400,000 from the Highway Fund to pay for a nuclear waste agency that does absolutely nothing but spend money." He stressed he is not interested in spending the state’s money when there are more pressing needs. He said if the Governor wants to pare this down to a bare-bones budget, he would consider it, but at this point he is not willing to spend $1.9 million of the taxpayers’ money.

Senator Jacobsen said he feels somewhat as Senator O’Donnell does but would support "any kind of transportation money because regardless of what happens in the state, it is our responsibility. If nuclear waste is passing through the state it must be monitored."

Senator Raggio stated there are three members of the committee who would support the budget as recommended by the Governor and three are opposed, with one member absent.

Mr. Comeaux stated the Governor believes it is very important that the state leave itself in a position to be able to respond to the various studies that are produced by the DOE and its contractors. He said he has also spoken to Tom Stevens, Director, Nevada Department of Transportation (NDOT), when the highway funding was being considered for this budget, and was assured that NDOT would be paying someone out of the Highway Fund to conduct studies. He urged the committee to support this budget.

State Treasurer – Budget Page ELECTED-79 (Volume 1)

Budget Page 101-1080

Mr. Miles stated that page 4 of Exhibit O indicates the issues in this budget. He said the staff recommends closing as recommended by the Governor. He said the only real change is replacement equipment for the upgrading of the treasurer’s investment account system to make it compatible with the Integrated Financial System (IFS).

Senator Rawson asked whether this is the entire budget for the state treasurer or just a special appropriation. Mr. Miles answered it is the treasurer’s operating budget.

Senator Raggio asked about the allodial title. Mr. Miles noted that is attached and is shown on page 6 of Exhibit O. Senator Rawson said approximately $1 million is shown for the biennium and he cannot accept that. He said the basic actuarial could be done with $250,000 a year. He stated there is a list of people trying to get the allodial title and the treasurer’s office will not develop the contracts for them until they can do the actuarial work. He pointed out this has been in law for 2 years and if this continues for another 2 years it is more or less a write-off.

Senator Raggio pointed out the authority is in the law, it is a matter of getting it funded. Senator Rawson said the request is for approximately $400,000 a year and he does not think the program needs to be advertised, so this amount can be decreased. Mr. Miles stated the budget proposal is on pages 7 and 8 of Exhibit O. Senator Raggio said this only funds two positions. Senator Rawson stated more than two would never be needed.

Senator Rawson maintained that if $89,000 were used for the positions and $50,000 were included for the actuarial, "that would really be the issue." He said that comes to a total of approximately $140,000 in each year of the biennium. He stated that funding is needed or there will never be anything on allodial title. He noted there are individuals who are willing to pay the cost. He explained it is not an outright appropriation, it is a loan and will come back to the state through the administration of the allodial title.

Treasurer Higher Education Tuition Administration – Budget Page ELECTED-83

Budget Account 101-1081

Mr. Miles stated that the only recommendation from staff is that in The Executive Budget there is a request for $40,000 each year for a contingency to cover potential patent infringements relating to the Pre-paid Tuition Program. He pointed out those budget amounts will not be sufficient to cover all legal expenses should the state get into "that kind of a lawsuit," so it is suggested the contingency be reduced from $40,000 annually to $20,000 annually. He said the agency did not have a problem with this reduction.

Public Employees Retirement System – Budget Page SPECPURPOSE-1 (Volume 3)

Budget Account 101-4821

Ms. Matheus called attention to technical adjustments and issues shown on pages 16 and 17 of Exhibit O. She said there is an adjustment reflecting the elimination of the payroll assessment calculation and the inclusion of the personnel assessment calculation. She pointed out that the Public Employees’ Retirement System (PERS) does not participate in the Central Payroll System.

Ms. Matheus said the other adjustment is to the travel budget. She stated The Executive Budget included a 55 percent increase in FY 2000 and an 85 percent increase for in-state travel in FY 2001. She said the full joint committee expressed concern regarding this increased level of travel. She stated that staff recommends adjusting travel categories in the base budget to reflect the 1998 actual travel costs. She pointed out the agency has agreed.

Senator Raggio asked whether this included the actuarial review performed every 10 years. Ms. Matheus responded yes.

Board of Contractors – Budget Page BOARDS-20 (Volume 3)

Budget Account 000-B011

Senator Raggio pointed out this budget was held because of pending legislation. He asked whether the legislation has affected the budget. Ms. Matheus answered no. Senator Raggio asked what the big changes are in the revenues shown in Exhibit O. Ms. Matheus explained that the changes included are basically to reflect the results of the FY 1998 audit, that was not shown in the original budget, as it was submitted. She said there is some increase in balance forward and increased projections of fee collection.

Senator Raggio asked whether fees are being raised. Ms. Matheus answered no.

DHR Administration – Budget Page HR/DIR-1 (Volume 2)

Budget Account 101-3150

Larry E. Peri, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reported on the technical adjustment and closing actions approved by the Joint Subcommittee on Human Resources/K-12 shown on pages 1 and 2 of Exhibit P. He said the recommendation that was agreed upon by the subcommittee had to do with MAXIMUS revenue. He explained that when the subcommittee closed this budget they agreed to add $500,000 of MAXIMUS revenue to, at that time, an unidentified Department of Human Resources budget account in each year of the coming 1999-01 biennium and remove the same amount in General Fund.

Mr. Peri said the subcommittee agreed to issue a Letter of Intent to the agency that was to receive the MAXIMUS revenue authorizing the agency to approach the IFC if the MAXIMUS revenue does not materialize in either year of the 1999-01 biennium.

Senator Raggio asked for a reminder of what MAXIMUS covers. Mr. Peri explained the MAXIMUS revenue is a term that has been assigned to federal revenue maximization. He said MAXIMUS is a firm that is under contract with the Department of Human Resources which provides methodology to Department of Human Resources agencies, most notably the Division of Child and Family Services, that assists them in recovering retroactive federal revenue and maximizing future revenue. He stated the company then takes a percentage of recovered revenue as its fee for the realization of that money.

Senator Raggio asked whether those are revenues that might have been otherwise overlooked. Mr. Peri answered yes and explained it does not cost the state because if the revenue is received from the firms efforts, its payment comes from the revenues recovered.

Mr. Peri stated that the fiscal staff worked with the Department of Human Resources to try to identify an agency in which to place the revenue. He said several agencies were identified and the Assembly Committee on Ways and Means chose to place $500,000 in each year of the biennium in the Bureau of Alcohol and Drug Abuse budget; however, the committee chose not to remove General Fund dollars, but to add $500,000 of expenditure authority in each year of the biennium for adolescent treatment.

Mr. Peri pointed out that the choice to do that is based on A.B. 181, which, among other things, proposes to move the Bureau of Alcohol and Drug Abuse out of the Department of Employment, Training and Rehabilitation, into the Department of Human Resources.

Senator Raggio asked where the bill is at this time. Mr. Peri answered it recently passed out of the Assembly and has been referred to the Senate. Senator Raggio asked how that affects this budget. Mr. Peri replied it does not affect the closing of this budget.

Senator Raggio asked about the Family Resource Center Program. Mr. Peri stated the resource centers are covered under No. 3 of Exhibit P, decision unit E-908. He said all of the expenditures related to that program are taken out of this budget and placed in a separate budget, funded as they have been in the current biennium, and that budget has been closed by the full Senate Committee on Finance.

B&I, Insurance Examiners – Budget Page B&I-90 (Volume 2)

Budget Account 223-3817

Jim Rodriguez, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reported the subcommittee recommended two adjustments to this account shown on pages 3 and 4 of Exhibit P. He said one would redefine the way the internal agency cost allocations are performed. Also, there was a change in the way the department accounts for costs associated with insurance regulation and misconduct examinations. He explained that up until now the costs were accounted for in their main account and upon review it was deemed more appropriate to allocate those costs into this account, with a transfer into 223-3813 of the salaries used for the compliance investigators.

Mr. Rodriguez said there were also adjustments for the attorney general allocation cost and some minor technical adjustments.

DMV, Motor Vehicle Pollution Control – Budget Page DMV-73 (Volume 3)

Budget Account 101-4722

Debbra J. King, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reviewed the decision units and closing actions of the joint subcommittee as shown on pages 15 and 16 of Exhibit P. She noted that the committee approved the budget as recommended by the Governor, with the exception of the staff requested in decision unit E-200, and the Visible Smoke Enforcement Program recommended in decision unit E-126.

Senator Raggio asked why the department states that the visual emissions do not have any impact and therefore the program is being deleted. Ms. King answered it does have an impact on the airborne particulate matter, but not on the ozone, which is the area of noncompliance. She said that in southern Nevada the airborne particulate matter is generally created by building construction.

Mr. Comeaux commented the department’s testimony was that this program did not have much of an effect in terms of improving air quality; what the program did was increase public awareness that the government was doing something about air pollution.

Ms. King stated that funding for state agencies from this account was increased in decision unit E-375. The Executive Budget recommended funding 100 percent of the costs of the Tahoe Regional Planning Agency and positions for the Divisions of Parks and Forestry from this budget. Ms. King pointed out that S.B. 511 would need to pass to allow the transfer of the funds to the various agencies. She explained this budget could be closed without the passage of S.B. 511 because if the bill does not pass, the funds cannot be transferred and will revert to the reserve.

Ms. King stated the subcommittee voted to request an amendment to S.B. 511 to sunset the ability to fund the Tahoe Regional Planning Agency and Parks and Forestry positions from ongoing funding from the account after June 30, 2001. Senator Raggio stated that action was consistent with that of the finance committee, who wanted to send a message that this was a onetime funding source.

Ms. King pointed out that decision units E-895, E-896 and E-897 all relate to the proposed reorganization of the Motor Vehicle branch of the DMV&PS, which the subcommittee recommended.

Senator Raggio asked whether the Assembly had approved this. Ms. King answered no. She said the Assembly did not approve any of the reorganization structure.

Senator Raggio asked whether a sunset provision needs to be requested for S.B. 511. Mr. Miles answered that was the recommendation of the joint subcommittee.

There being no further business the meeting was adjourned at 3:35 p.m.

RESPECTFULLY SUBMITTED:

Patricia Hampton,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE: