The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:45 a.m., on Friday, May 28, 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

OTHER LEGISLATORS PRESENT:

Assemblyman Joseph E. Dini, Jr., Assembly District No. 38

Senator Mark E. Amodei, Capital Senatorial District

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

STAFF MEMBERS PRESENT:

Jeanne L. Botts, Senior Program Analyst

Barbara Moss, Committee Secretary

OTHERS PRESENT:

Senator Raggio opened the meeting with the announcement of a request from the Governor for a contingency amount for the year 2000 (Y2K) problem. He indicated the request would be addressed by Mr. Comeaux.

John P. Comeaux, Director, Department of Administration, indicated that in the Governor’s recommendations for additional spending, and as a result of the April 30, 1999, meeting of the Economic Forum, a contingency fund was recommended for the Department of Information Technology (DoIT) to cover any additional Y2K problems. He said the recommendation had not yet been funded; however, the request had been made and both the Senate Committee on Finance and the Assembly Committee on Ways and Means approved a carry-forward into the next biennium of the remainder of the Y2K appropriation (that was made 2 years ago). He estimated the amount was in excess of $400,000. Mr. Comeaux expressed the hope "the money committees" would welcome a visit to the Interim Finance Committee (IFC) later in the biennium for additional funding should it become necessary.

Senator Raggio inquired from whence the funding would come. Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), replied the funding could come from the contingency fund. He noted the IFC would have the authority to approve it because there is General Fund carry-forward that could be used as its nexus.

Senator Raggio indicated a Letter of Intent would suffice and Mr. Comeaux agreed.

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Senator Raggio opened the hearing on Assembly Bill (A.B.) 472.

Judge Gene T. Porter, Department 1, Eighth Judicial District, Las Vegas, explained that A.B. 472 changes the longevity pay currently received by supreme court justices and district court judges from 1 percent to 2 percent. He said the bill also changes vesting from 5 years to 4 years for district court judges, and from 6 years to 4 years for the justices of the supreme court.

Judge Porter distributed a copy of Nevada Revised Statutes (NRS) 245.044 (Exhibit  C), which provides elected county officers in State of Nevada service 2 percent longevity after 4 years. He also submitted an agenda item from the Clark County Board of Commissioners, dated September 19, 1995 (Exhibit D), and pointed out that page 2, item number 80, indicates the justices of the peace in Clark County currently also receive 2 percent longevity after 4 years. The judge said A.B. 472 would bring supreme court justices and district court judges into parity with the amount currently received by elected county officers and justices of the peace in Clark County.

Senator Raggio inquired whether there was a fiscal note. Judge Porter said there is a fiscal note in the amount of $186,000 for FY 2000 and $200,000 for FY 2001. Senator Raggio clarified A.B. 472 applies to all district court judges and Judge Porter replied that was correct.

Senator Raggio pointed out the Legislature approved longevity pay in 1989. He said there was only one other state at that time, Pennsylvania, that provided any form of longevity pay to judges. The senator commented longevity pay is a unique addition to judges’ salaries. He reflected it is an unusual add-on and wondered whether its use has been adopted by other states. Senator Raggio also noted longevity for judges should not be tied to what is done by any county for its justices of the peace whether or not A.B. 472 is processed. He indicated he was "sending a signal" this is not the way the measure should apply. He declared that should counties provide such benefits to judicial positions, a "whipsaw" situation will be avoided if it is not tied to what is done by the state. Judge Porter indicated Senator Raggio’s point was well-taken.

Senator Raggio closed the hearing on A.B. 472 and opened the hearing on A.B. 360.

Bus Scharmann, Dean, Off Campus Programs, Western Nevada Community College (WNCC), indicated WNCC deals with a seven county service area. He stated Lyon County and Douglas County are the fastest growing counties in Nevada, in both population and industry. He said the Lyon County School District currently serves approximately 300 students in Yerington and Fernley. Mr. Scharmann indicated A.B. 360 would provide the opportunity "to look closely" at both Yerington and Fernley. He remarked Yerington is a community that needs "a shot in the arm" and pointed out WNCC can help the city bring in new industry and diversify its economy. He noted Fernley is "crying out" for the support of WNCC in regard to education and training. Mr.  Scharmann pointed out that Matt Lomrey, Superintendent, Lyon County School District, was present at the meeting. He indicated WNCC and Lyon County have formed a partnership to develop a closer relationship and a "bridge" for high school students in Fernley and Yerington.

Mr. Scharmann indicated the 1997 Legislature appropriated funds for Douglas County, and with the addition of private funds a "beautiful" facility was built. He said enrollment in Douglas County increased 110 percent over the past 5 years, mainly because of the facilities wherein day-time programs are offered to students and industry. He pointed out industry looks to WNCC as a guide for training. Mr. Scharmann said these efforts should continue, particularly with the Douglas County School District where WNCC is viewed as a "magnet school" that will bring in preengineering, high-level math, and computer science courses for juniors and seniors.

Helaine Jesse, Dean, Institutional Advancement, WNCC, noted one of the strengths of WNCC is its ties to business, industry, and manufacturing. She indicated Carson City, Douglas County, Lyon County, and Storey County areas are the manufacturing hub of the state and have the highest manufacturing employment base in the entire state at 14 percent. Providing a comparison, Dean Jesse stated Nevada has a 4 percent manufacturing employment base overall, Reno/Sparks has 6 percent, and Las Vegas has 3 percent. She said Lyon County has the highest manufacturing employment base at 24 percent, and Douglas County is third at 9 percent.

Dean Jesse indicated the state demographer has predicted growth in Lyon County will increase by 55 percent in the first decade of the millenium and Douglas County will increase by 33 percent. She emphasized it makes sense to create the kind of environment that ensures manufacturing companies will continue relocating to this area. She said the concept of the "hi-tech center," educating high school students and bringing business and industry together with students, will help diversify Nevada’s economy and decrease its reliance on a less stable form of taxation. Senator Raggio indicated WNCC is doing a fine job.

Matt Lomrey, Superintendent, Lyon County School District, stated the Lyon County School District is "very excited" to be working in partnership with WNCC and the business and industry communities. He indicated there had been planning meetings with industry in the Dayton and Fernley areas in a cooperative effort to obtain bonds to construct facilities that would meet the training needs of the workforce. Mr. Lomrey noted the Lyon County School District is also working on distance learning with WNCC.

Answering a query by Senator Raggio, Mr. Lomrey said there is a hi-tech center in Carson City and another is envisioned for Fernley or Yerington, as well as an enhancement to the facility in Douglas County.

Senator Raggio reflected this was in the planning stage and asked whether it could be called "the foot in the door" concept. Mr. Scharmann agreed and said a "rural concept" is sought for the hi-tech center.

Mr. Lomrey said it was important to point out that property is available in both Yerington and Fernley to support the A.B. 360 plans.

Joseph E. Dini, Jr., Assemblyman, Assembly District No. 38, indicated he brought the Lyon County portion of A.B. 360 forward because a great deal of hi-tech industry is moving into the Fernley area. He said the Lyon County high school has 700 students, but the Yerington area is more isolated. He suggested WNCC study the sites to ascertain which location would be supported. Mr. Dini indicated Douglas County was added to A.B. 360 by Assemblyman Hettrick.

Senator Raggio indicated A.B. 360 referred to two feasibility studies and asked whether the fiscal note could accommodate them. Mr. Dini said $150,000 would accommodate feasibility studies for three sites, two in Lyon County and one in Douglas County.

Howard Rosenberg, Regent, Board of Regents, WNCC, indicated he agreed with everything that had been said. He said A.B. 360 would encourage students to remain in high school and make the transition to college, which he emphasized was vital.

Senator Jacobsen asked for a definition of "feasibility study." Mr. Dini answered a feasibility study determines need, benefit, and community support. He pointed out there is community support in Yerington and Fernley. He noted it must be determined whether the facility will be placed in Yerington or Fernley to avoid an intercounty "fight." Mr. Dini asserted the sites and school district support are in place and a group of Yerington citizens have united to "push" A.B. 360 through. He pointed out Steve Pellegrini, Coordinator, Western Nevada Community College, administers the community college program and is one of the more excellent educators in science. He mentioned the site is located near the high school campus. In view of the growth of industrial development in Fernley, Mr. Dini suggested the facility might be placed there, but indicated it was not his "political decision."

Senator Mark E. Amodei, Capital Senatorial District, indicated he was in full support of A.B. 360. He said the measure would allow WNCC the ability to continue its tradition of bringing in a "showcase" hi-tech center.

James Richardson, Ph.D., Lobbyist, Nevada Faculty Alliance, indicated strong support for A.B. 360. He said hi-tech centers have been a significant "success story."

Senator Raggio closed the hearing on A.B. 360 and opened the hearing on A.B. 189.

Before addressing A.B. 189, Senator Raggio stated there had been testimony on S.B. 299 on March 31, 1999, presented through an actuarial report which demonstrated that any passage of "25 years and out" for peace officers would fall below the cost (.5 percent) where it would be necessary, in accordance with policy and good management, to require an increase in premium.

SENATE BILL 299: Reduces number of years of service required for retirement of police officer or fireman at any age. (BDR 23-1412)

Senator Raggio pointed out other measures have been proposed. He asked whether there would be an increase in the premium rate, as well as other proposed benefits, should S.B. 299 be enacted.

George Pyne, Executive Officer, Public Employees’ Retirement System of Nevada (PERS), explained that actuaries estimate future plan costs based on uncertain future events. He said the PERS actuary takes a conservative approach to estimating the cost of the retirement system because PERS does not wish to fall into financial difficulty similar to the fate of the state group insurance program. Mr. Pyne noted that regardless of whether or not A.B. 189, or any other measure, passes this session, the PERS actuary estimated the cost for the benefit improvement in S.B. 299 for police officers and firemen to be .7 percent. He said .7 percent is not necessarily high compared to other actuarial cost estimates, but should .7 percent be added to the current actuarially determined rate for police officers or firemen, which is 28.4 percent, the cost would increase to 29.1 percent. He pointed out that the way the "statutory trigger works," an increase of .5 percent in the contribution rate would be triggered. Mr. Pyne indicated, based on projections, should A.B. 189 be processed, the contribution rate would need to increase .5 percent to recognize the increase in the cost.

Mr. Pyne indicated A.B. 189 is the retirement board’s technical or housekeeping bill. He said there are cost elements contained in the bill but they are not significant enough to require an increase in retirement contribution rates. He proposed to highlight the cost elements while reviewing the bill. Mr. Pyne indicated the bill contains two amendments not originally requested by the retirement board. He pointed out one amendment deals with legislators who are also public employees, and the other deals with retired elected officials. Mr. Pyne said he would review the amendments as they arise within A.B. 189.

Mr. Pyne indicated page 1, section 1, of A.B. 189, represents the first amendment added to the bill that was not requested by the retirement board. He pointed out section 1 would provide public employees, elected to serve in the Nevada Legislature and needing to take leave of absence from their public employer to do so, with the opportunity to remain contributing members of PERS. He said the intent is to provide these employees a onetime election to stay in PERS on a "going forward" basis and fund the contributions out of "their own pocket."

Mr. Pyne said page 1, section 1, subsection 1 of A.B. 189 enables legislators who are public employee to contribute to PERS during the period of leave of absence without pay for their active legislative time.

Continuing, Mr. Pyne indicated page 2, subsection 2, line 3, of A.B. 189, requires legislators who are public employees to pay the contribution to PERS directly out of their own pocket without involving the public employer.

Mr. Pyne said subsection 3, as currently written, provides public employee legislators with an open-ended election to participate either in the Legislators’ Retirement System (LRS) or PERS on an ongoing basis, session to session. He pointed out that was not the intent of the Assembly. He expressed the intent was to provide public employee legislators with a one-time prospective election "going forward" to cover active legislative service in PERS. This would avoid lengthy periods of accruing no service credit due to their leave without pay status each time they serve in the Legislature. Mr. Pyne indicated the intent is not to receive service credit in both systems for the same period of time. To clarify the intent, he indicated an amendment was drafted (Exhibit E) that provides employee legislators with a onetime election which makes that election permanent on a "going-forward" basis. He said it also provides public employee legislators the ability to fund a portion of their contribution into PERS with the amount that would otherwise be deducted from their legislative pay and paid into the LRS. That would be the 15 percent of pay that comes out of the legislator employee’s pocket. Mr. Pyne summarized the intent is for the approximately 10 public employee legislators to be able to opt out of the LRS on a "going-forward" basis and continue to pay into PERS the amount that would have been paid by their public employer to keep their service credit "continuous, without interruption."

Senator Raggio inquired whether or not legislators presently pay into the LRS or if it is paid by the state. Mr. Pyne answered the legislators pay a 15 percent after-tax contribution into the LRS. Senator Raggio asked what would occur should a legislator opt to be removed from the LRS. Mr. Pyne said the legislator would no longer pay into the LRS but would pay the 15 percent for his or her service in PERS.

Senator Coffin asked whether or not the legislators could participate in both PERS and LRS. Mr. Pyne voiced the belief legislators could participate in both PERS and LRS. He pointed out the measure intends to erase any idea that the legislators are attempting to "double dip" or receive something from both systems for the same period of time. Senator Coffin commented the issue could not be considered "double dipping" if the legislator is paying into the system.

Senator Raggio asked whether the proposed amendment would provide the legislators a onetime option, or instead they would be provided the option each time they serve in the Legislature. Mr. Pyne said the amendment states the legislators would be allowed a onetime election; however, once the option is made they would be "stuck with it going forward." Senator Raggio summarized that a public employee who serves in the Legislature and has other employment with the state could opt to continue in PERS and pay the premiums during the 4 months of the legislative session but would no longer be part of LRS "forever." Mr. Pyne stated, "That is correct." Senator Raggio inquired whether the legislators would be refunded money they had paid into LRS. Mr. Pyne confessed ignorance regarding the question but indicated he would provide the answer as soon as possible.

Mr. Pyne referred to page 12, section 18, line 35 of the second reprint of A.B. 189, which includes transitory language that would provide state employee legislators with the ability to pay contributions for previously served legislative sessions for which they were on leave without pay from their public employer. He noted the contributions would credit service in PERS and remove service from credit in the LRS. He indicated the measure is not meant to completely remove all their legislative time from the LRS but incrementally reduces their service for those periods of leave without pay each session. Mr. Pyne explained the legislators would have service coming out of the LRS system and going into the PERS system and would be paying to PERS the contributions plus interest. He noted the intent is to make the PERS service, which is reflective of the state employee legislators’ working career, become whole through the "look-back" as well as the "going- forward basis."

Senator Raggio asked whether the legislator would pay the full cost or just the employee’s share. Mr. Pyne replied the legislator would pay the full contribution to PERS.

Continuing, Mr. Pyne said page 3, section 2, subsection 3, line 3 of A.B. 189 deals with the definition of "compensation subject to contribution." He indicated the section has been requested to be modified to clarify contributions shall not be paid on any type of payment not specifically enumerated in the Retirement Act as subject to contribution. He said that prior to 1975 contributions were paid on almost all taxable forms of compensation, which resulted in abuses and unpredictability of retirement plan costs. For example, many public employees worked significant amounts of overtime in the final years of retirement to "spike" the retirement benefits, which was a big problem for PERS. Mr. Pyne said legislation passed in 1975 addressed the problem by allowing contributions to be paid only on an employee's base pay and "some other" specific forms of compensation, but specifically excluded contributions on overtime pay. He stated this limiting definition of compensation is to guard against abuses that could drive up plan costs.

Mr. Pyne said that presently the Retirement Act enumerates those items that are, and are not, subject to retirement contribution. For example, contributions are paid on an employee’s base pay, but not on fringe benefits. He indicated "today’s language" makes it difficult to determine whether or not many new forms of compensation are subject to contribution. He said he had often been asked whether contributions should be made on such things as education incentive pay, lunchtime pay, or remote area pay, and "those types of things." Mr. Pyne pointed out that some people claim because a specific type of compensation is not listed as an exclusion, it should be "contributed on." He indicated:

Further, Mr. Pyne said page 3, section 3, subsection 1(d), line 28 of A.B. 189 provides the position of gaming commissioner would be eligible for participation in the retirement system, which was requested by the Nevada Gaming Commission. He said that historically members of the Gaming Commission have not been PERS members. Mr. Pyne pointed out research shows this omission was based on the assumption the position was not the equivalent of full-time employment at the time the commission was created. He noted gaming commissioners presently receive a base salary of $40,000 annually, and the chairman of the Gaming Commission earns $55,000 annually. By contrast, the average annual salary of a regular PERS member is $32,714. He said the pay level of these positions strongly suggests they are more akin to full-time employees of the state than board or commission members receiving a per diem income. Mr. Pyne indicated it is believed appropriate, for that reason, for all members of the Gaming Commission to be included within the membership of PERS on a going-forward basis. He said there is marginal cost associated with the inclusion of the gaming commissioners within PERS. He indicated that should the current group of commissioners all choose to participate in PERS, the annual cost would be approximately $5,600, which is the difference between what "they" are paying into social security and what "they" would be paying into PERS.

In reference to page 13, section 19 of A.B. 189, Mr. Pyne said the provision allows any member of the commission appointed before July 1, 1999, to elect to participate in PERS. He noted all the current commission members shall decide whether or not to participate in PERS; however, new appointees after that date shall participate in PERS.

Mr. Pyne indicated page 3, section 3, subsection 2 of A.B. 189 is added to allow the board to establish standards to determine a full-time work schedule for retirement reporting purposes. He said this recommended change is requested as a result of recommendations contained in Assembly Concurrent Resolution (A.C.R.) 15 of the Sixty-ninth Session, which was the retirement system’s interim legislative study of service credit and average compensation.

Mr. Pyne pointed out the study found that certain public employees who work nontraditional work weeks, primarily those working 12-hour work days (perhaps 36  hours one week and 48 hours the next) were not receiving full-time service credit in PERS, for what is equal to or greater than the 80-hour biweekly period. He said he had been working with public hospitals in the state with regard to this issue because the biggest problems lie in that area. He indicated there is concurrence that reporting standards can be established to ensure those employees are reported as full-time.

Mr. Pyne said page 4, section 4, subsection 4, line 18 of A.B. 189 is a new section being added to allow cash rollovers from various retirement accounts for the purchase of service credit in the retirement system. He indicated PERS would be able to accept pretax contributions for the purchase of service credit from a qualified trust under section 401(a) of the Internal Revenue Code, in addition to rollovers of pretax contributions from an individual retirement account or an individual retirement annuity. He pointed out a positive aspect of this section is that it would give employees incentive to save toward their retirement through the purchase of service credit with no tax consequences rather than removing the money from their account to purchase a frivolous item.

Senator Raggio asked for an example of a "qualified trust." Mr. Pyne said the PERS plan would be considered a qualified trust under section 401(a) of the Internal Revenue Code, wherein investment earnings on contributions paid into the plan are not taxable until received as a retirement benefit.

Senator Raggio queried how an Individual Retirement Account (IRA) could be used to purchase credit. Mr. Pyne gave the following scenario:

Senator Raggio asked whether the limit of purchase of service is still 5 years and Mr. Pyne said that was correct. He indicated the intent of this measure is to provide help from a tax standpoint.

Further, Mr. Pyne said page 4, section 5, subsection 3, line 12 of A.B. 189 is a new section that addresses the calculation of retirement benefits for certain locally elected officials. He noted the act presently provides for separate calculation of benefits for members with both regular and elective service as a county commissioner, councilman, or mayor. He indicated the separate treatment of service for purposes of benefits is based on the policy that part-time service should not result in a full time retirement benefit. Mr. Pyne pointed out this action is "felt to be needed" from a funding perspective, as well as a policy perspective. He asserted times have changed and many elected officials claim that elective offices in certain jurisdictions have evolved into the equivalent of full-time. He said that although there is little formal study to substantiate this claim, the amount of pay received by these officials in some jurisdictions strongly suggests this is the case. He pointed out that in Clark County, for example, county commissioners receive a base salary of $52,000 a year, whereas a city councilman in Las Vegas earns $36,407 a year. Mr. Pyne indicated these amounts exceed the average income of a PERS member similarly to the situation that exists in regard to the gaming commissioners, described earlier.

Mr. Pyne declared the range of pay received by locally elected officials statewide was surveyed. He pointed out the annual pay received by a city councilman in Wells, Nevada is $480. Therefore, while the positions appear to be full-time in Clark County, they do not seem to be that way in Wells. He said currently all work time is treated the same and to continue the practice of calculating benefits separately for service in some positions does not recognize the evolution of the positions into full-time employment. Mr. Pyne declared the suggested measure is the best approach to dealing with the situation. He indicated elective service should be treated as regular service only if the average salary for the entire period of elective service was equal to or greater than the average salary of a regular PERS member for the corresponding time frame. He noted that should the revision be made there will be no additional employer cost because contributions have already been received from those positions.

Senator Raggio inquired whether an elected official, such as a county commissioner, a sheriff, or a district attorney, would have the option or be required to participate in PERS. Mr. Pyne replied the elected officials have been required since 1975 to participate.

Continuing, Mr. Pyne stated section 7 of A.B. 189 is a technical reference to the election discussed earlier.

Mr. Pyne said page 7, section 8, subsection 4, line 12 of A.B. 189 is another amendment requested by local governments that was added after the bill was introduced. He indicated retirement law allows retired employees, elected or appointed to an elected public office, to receive the PERS benefit in addition to their pay as an elected officer, but they do not "participate" in the retirement system. Mr. Pyne pointed out language is being added to allow the employer to pay into a separate retirement fund on the employee’s behalf. He said the amount of contributions could not exceed what would otherwise be paid into PERS. This has no fiscal impact on PERS and would allow a county, for example, to pay the same amount into a retirement fund for all its commissioners, Mr. Pyne remarked.

Senator Raggio requested some examples. Mr. Pyne hypothesized that should he be elected county commissioner in Washoe County, the statute states he would be required to participate in the retirement system as an elected official. On the other hand, should another person who is retired from PERS be elected a Washoe County commissioner, the statute specifically states that he or she would continue to receive the PERS benefit but shall not "participate" in PERS. However, while the county is paying into PERS for Mr. Pyne’s retirement, because the other person is already retired, money would be paid into a different retirement plan for that person. Senator Raggio clarified money could be paid into another type of retirement fund and Mr. Pyne said that was correct.

Mr. Pyne stated page 8, section 9, subsection 3, line 12 of A.B. 189 was added to allow reemployed retirees who enroll in the system for at least 5 years (which is the vesting period) to have their current service added to the previous service to determine the new retirement benefit. He said in most cases the benefit earned from the current service must be computed separately from the previous service to determine the benefit amount. He noted several retirees requested both periods of service be combined because oftentimes the pay from their second period of employment is greater than what was earned prior to their initial retirement. Mr. Pyne pointed out that by combining all their service together with the higher earnings from the second career, a higher benefit would result. He indicated that because the retired employees are required to be back in PERS for a minimum of 5 years before the two benefits are combined, the actuarial integrity of PERS can be maintained. He explained individuals cannot return to the retirement system for a short period of time to spike up their retirement benefit because they are making a great deal more money in their second job, and that is the purpose of the 5-year threshold.

Referring to page 8, line 9 of A.B. 189, Senator Neal asked how the measure relates to section 415 of the Internal Revenue Code. Mr. Pyne answered the bill refers to the benefit restrictions imposed on the system by the Internal Revenue Code. He indicated that based on the federal limits certain dollar amounts cannot be exceeded when benefits are being received from the system. He indicated all members of PERS that were in the system prior to January 1990 were "grandfathered" from those limits, but they are subject to the limits on a "going- forward" basis after that date.

Continuing, Mr. Pyne pointed out that page 8, section 10, subsection 2, line 31 of A.B. 189 deletes certain language regarding spousal retirement benefits from the police officer and firefighters retirement fund. He said a retired employee who receives service or disability allowances from that fund is entitled, at present, to receive his or her full benefit without modification. He indicated that upon the death of such person, the individual who was the spouse at both the time of retirement and the time of death is entitled to receive a benefit equal to 50 percent of the deceased employee’s allowance upon attaining the age of 50. Therefore, police officer or firefighter members can retire with full benefit and after their death the spouse can continue to receive that benefit for his or her lifetime. Mr. Pyne reiterated the spouse must be married to the person both at the time of retirement and at the time of death. Mr. Pyne indicated the language relating to the requirement that "the spouse still be the spouse on the date of the death of the retired member" is being deleted. He said the only purpose served by this requirement is to foster continued marriage for police officer and firefighter members, and although it could be considered a rather noble cause, it could also be viewed as social engineering. He commented the benefit consultant indicated provisions of this type are being removed from plans around the country because they have no actuarial impact on the plan. He said that since there is merely the social impact of a continued marriage requirement and no pension policy impact, the board took the position that this requirement bears no relationship to the underlying purpose of the retirement system and that removal of the language would be appropriate.

Mr. Pyne indicated page 9, section 11, line 18, and page 10, section 12, line 6 of A.B. 189 increases the base amounts received by dependent children and certain surviving spouses when a member dies prior to retirement, from $400 to $450 for surviving spouses and $350 to $400 for dependent children. He pointed out changes are made "every so many years" based on inflation since the last increase. He said inflation has risen about 12 percent since the last increase. He stated the cost for this improvement is .02 percent to .03 percent of payroll, which is minimal. Mr. Pyne indicated the increases are recommended.

Mr. Pyne said also under section 12, subsection 1, line 9, of A.B. 189, the language that states benefits for certain surviving spouses shall cease upon remarriage is proposed to be removed. He indicated NRS 286.674 carries a restriction with the survivor benefit provisions proposed. He said the restriction limits those who receive the flat amount (described above) to the current $400 a month, but also states the payments must begin on the first day of the month immediately following the death of the member and must cease on the last day of the month in which the spouse dies or remarries. Mr. Pyne opined the marriage restrictions set forth in the above paragraph applied only to the flat dollar amount and not to other survivor benefits. He expressed the belief the restriction is archaic and could penalize the very population the survivor benefits were designed to help. Mr. Pyne said the provision essentially penalizes individuals for remarriage and PERS should be neutral with respect to this type of issue. He remarked the actuarial cost increase for this is very insignificant.

Mr. Pyne indicated page 10, section 13, subsection 1 of A.B. 189 allows the surviving spouse of a deceased vested member of the system with at least 15 years of service to receive benefits under retirement option 2, rather than option 3. He said survivor benefits are intended to address the financial difficulty experienced by the surviving family of a deceased member. He explained the option 2 benefit provides maximum financial protection to a surviving spouse under the plan and is paid in recognition of career service by a Nevada public employee. Mr. Pyne said moving the threshold from 20 to 15 years is consistent with the intent of the statute, it would impact approximately 50 to 70 accounts. The cost would be about .03 to .07 percent of payroll, which is minimal. He indicated the change is recommended.

Mr. Pyne said page 11, section 14 of A.B. 189 increases the payment to dependent parents of deceased active members by $50 a month. He said they receive benefits only if there are no other eligible survivors. He indicated there are only a "handful" of people who receive those particular benefits.

Referring to page 11, section 14, line 17 of A.B. 189, Senator Raggio inquired why remarriage for parents was not changed in order to be consistent. Mr. Pyne replied it was an oversight.

Mr. Pyne indicated sections 15 to 17 of A.B. 189 makes technical changes to NRS Chapter 218 to accommodate the changes discussed earlier with respect to the public employee legislator’s elected retirement.

Senator Neal inquired to what extent the state retirement plan is required to track the Employment Retirement Income Security Act (ERISA) federal statutes. Mr. Pyne answered public retirement systems are not bound by ERISA; however, there is a "big" qualification that states there are several parts of ERISA that apply to public employee retirement systems which have been deemed to do so by various regulations and promulgations of the Internal Revenue Code. Therefore, PERS must be cognizant of the code with respect to benefit improvements and protecting the contractual rights of its members.

Senator Neal asked whether PERS could exceed the salary limit upon which employee retirement is based. Mr. Pyne replied there are certain limits of which PERS must be cognizant. He said one limit that does not involve the Legislature is that contributions can only be paid on a certain amount of compensation into the plan. If, for example, a new administrator was hired at a state hospital and was to be paid $400,000 a year, PERS could only accept contributions on the first $170,000 (approximately). He pointed out programs are built into the "PERS computer" to ensure the limits are not exceeded. He indicated there is a "grandfather" issue regarding the limits. He pointed out contributions based on compensation are one side of the issue, but the other side is benefits. Mr. Pyne noted increases could be passed that exceed the Internal Revenue Code limits because various types of mechanisms could be put in place to state the Legislature allowed PERS to grant the increase by statute. He said these mechanisms are called "spill-over plans" or "excess benefit plans," whereby the higher benefits could be paid with certain tax consequences to the individual recipient.

Senator Raggio said should the bill be processed the proposed amendment would be added and the language on page 11, line 17 could be changed. Mr. Pyne indicated that would be acceptable.

In regard to the proposed amendment to A.B. 189 (Exhibit E), Senator Neal asked whether it would permit a state employee, or an employee of the state retirement system, to be elected to the Legislature and still remain in that retirement system. Mr. Pyne said, "Yes, it does." He added this election is for public employee legislators who serve 4 months, take leave without pay from their public employer, and lose 4 months of "valuable time" in PERS. He said the amendment would allow the person to pay into PERS to retain continuous service; however, he or she could not also be a participant in the LRS. Senator Neal inquired whether the employee or the Legislature would make the payment into PERS. Mr. Pyne answered the employee would make the payment. Senator Neal queried whether a designated amount would be paid out of the employee’s salary. Mr. Pyne indicated PERS would work with the employee’s public employer to determine the full contribution amount and the employee would "probably" write a check for the 4-month period. Senator Neal asked what would happen should the employee not make the payment to PERS. Mr. Pyne replied that should the person not make the payment, they would lose their service credit in PERS for that period of time.

Regarding S.B. 299, Senator Raggio asked the effect on the system should the "25-year service and out" be implemented. The senator said the actuarial report showed a conservative impact of .07 percent, but implementing the "25-year service and out" measure would cost an additional .05 percent which would raise the contribution rate to 29 percent. Mr. Pyne said, "That is correct."

Senator Raggio noted a copy of a letter indicating support for S.B. 299 addressed to the Governor from the Peace Officers Research Association had been received by members of the committee.

Andy Anderson, Lobbyist, Nevada Conference of Police and Sheriffs (NCPS), indicated the "25 and out measure boils down" to a money issue and the original intent of early retirement. He said NCPS "sold" the fact that police officers should retire early because of their age, not because of their service time. He pointed out the age of 50 years had been specified because that would be the time when a police officer should not be chasing juveniles, or a fireman pulling hoses. Mr. Anderson stated, "The intent of early retirement was never based on 25 years of service." He indicated that although it is a good benefit, there is a cost factor and the amount of people taking advantage of it would be small. He questioned why 100 people should pay for a benefit when only 5 or 10 would take advantage of it. Senator Raggio clarified the request is not endorsed uniformly across the law enforcement community. Mr. Anderson said, "That is correct."

Senator Mathews stated the letter from the Peace Officers Research Association demonstrated that 95 percent of the police officers across the state support S.B. 299. Senator Raggio indicated the measure had been represented to be uniformly supported and asserted the issue of additional cost should be raised. He indicated initial information reported no cost or increase in the PERS system. He reiterated there would be an increase of at least .05 percent on the premium should the measure be implemented. Mr. Pyne said present estimates show an increase in the contribution rate would be required. He indicated PERS will continue to study this and other police and fire issues every year, reestimate the costs and peruse life expectancies for all members of the system with the "second opinion and experience studies."

Senator Raggio closed the hearing on A.B. 189 and opened the hearing on S.B. 353.

Senator Raggio noted there had been ongoing discussions with the Assembly regarding S.B. 353 which culminated in the following tentative agreement:

• The group of employees in custody positions within the Department of Prisons have been "waiting patiently" for an occupational study which, other than surveys, has not been conducted. The consensus is to support an occupational study for the positions during the interim.

• The consensus is to address the issue of rural area differential (RAD), which is the subject of a bill in the Assembly. The fiscal constraints are understood; however, in order to make "some showing" of commitment while recognizing that the occupational study will probably require even more funding, should the Senate Committee on Finance "go along," the committees would be agreeable to increasing the salaries of the correctional officers by one grade during the last half of the second year of the biennium.

Senator Raggio asked what the cost would be.

Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, LCB, indicated that based on using the information provided by the Department of Personnel, the cost would be approximately $1.2 million in FY 2001.

Senator Raggio pointed out both committees struggled with this measure because it has been a concern for longer than this session. He indicated the Chair was prepared to recommend the measure to the committee.

Senator Mathews inquired whether the $1.2 million is for both years. Senator Raggio replied the measure would authorize the salaries of the custody positions within the Department of Prisons to be augmented by one grade, commencing January 1, 2001, which would be the last half of the second year of the biennium. He said the measure would send "a strong signal" that the Legislature recognized the need and realized the issue had been studied for a long time, but fiscal restraints prevented it from happening. The senator pointed out the "other house" is prepared to agree to the adjustments. He said the Legislature wants the occupational study reported back for action at the next legislative session.

Senator Coffin asked whether the measure includes correctional caseworkers as well as officers. Mr. Miles indicated it would cost an additional $350,000 to include caseworkers. Senator Raggio noted caseworkers would be included in the occupational study.

Senator Coffin inquired about the cost of RAD. Mr. Miles commented the bill had been amended to $750 a day for differential pay. Senator Coffin queried how many institutions receive RAD. Senator Raggio pointed out the first reprint of the bill addressed the Southern Nevada Correctional Center, Southern Desert Correctional Center, Indian Springs, the new Men’s Prison No. 7 (Cold Creek State Prison), and Jean Conservation Camp. Senator Coffin indicated he read in news reports the Jean Conservation Camp would be closed. Senator Raggio stated a proposal had been made to close Jean Conservation Camp, but the forestry camp would remain open. Senator Coffin inquired whether the closing would provide savings for RAD which could be provided to other institutions. Senator Raggio said he read the list of prisons from A.B. 691. He indicated the bill would be amended by the Assembly. He surmised the bill covered all the prisons because the only other outlying institution would be the new Men’s Prison No. 7 (Cold Creek).

Senator Raggio asked whether the committee wished to act on S.B. 353. He indicated he would accept a motion to mandate an occupational study to report before the next legislative session and to augment the pay plan of the custody positions, including correctional caseworkers, by one grade commencing January 1,  2001.

*****

Senator Raggio opened the hearing on A.B. 386.

Janice Wright, Deputy Administrator, Division of Health Care Financing and Policy, Department of Human Resources, indicated A.B. 386 accomplishes three things:

1. Section 1 of A.B. 386 provides language that is part of the appropriations bill which authorizes the Department of Human Resources to conduct a study on a program entitled The Disproportionate Share for Hospitals Payments. Ms. Wright declared the department will conduct this study with all hospitals that are currently the disproportionate share (DSH) "players" and also entities not a party to the program. She noted this is an optional federal program put into place in the 1980s and it does not compensate hospitals for the disproportionate share of indigent patients served in those facilities. Ms. Wright indicated the department will conduct the study and report back to the Governor, the Interim Finance Committee (IFC), and the Legislative Committee on Health Care, before July 1, 2000.
2. Section 2 of A.B. 386 provides for reimbursement to budget account 101-3246, which is for county indigent payments. Ms. Wright said the 1997 Legislature appropriated $300,000 from the Intergovernmental Transfer (IGT) Account and put it into this fund. She noted there have been two distributions since that time, both of which were made to Lyon County. She indicated there is currently a balance of approximately $140,000 in the fund. She pointed out A.B. 386 would provide that the state controller transfer from the IGT account the balance necessary to return the fund to $300,000.
3. Section 3 of A.B. 386 provides continuation of the existing dollar amount of payments for the disproportionate share for two hospitals, Washoe Medical Center and Elko General Hospital. She said these are private hospitals and not parties to the DSH payments "in the same fashion as the others." Ms. Wright stated Elko General Hospital recently went from being a public facility to being a private facility. She noted the bill retains the same language that was in the transitory language during the current biennium; therefore, the payments will be made in the identical fashion and the same dollar amounts as in the current biennium.

Senator Neal asked whether private hospitals receive the same amount as public hospitals. Ms. Wright replied that when public hospitals become private the mechanisms go into place to assure payment for the disproportionate share. She said part of the disproportionate share is encompassed in a federal program; therefore, to bring in the full amount of money the state must match 50-50. She declared that in order to generate the match, the State of Nevada created what it called an Intergovernmental Transfer Account which allows payments from the hospitals to be used as the state match. Senator Neal clarified this program is for Medicaid patients and Ms. Wright replied, "That is correct." She said that for the two hospitals which do not receive payments from the county, the DSH payments will occur in the same dollar amount as in the current biennium for Elko and Washoe Counties, and each county will "make the payment back" through the IGT mechanism to provide the match for the DSH. She indicated the program for the two counties is interrelated. Ms. Wright pointed out the program provides the same dollar amounts being received for those two private hospitals.

May S. Shelton, Director, Washoe County Department of Social Services, indicated support for A.B. 386 on behalf of Washoe County and the Nevada Association of Human Service Administrators.

Michelle M. Gamble, Lobbyist, Nevada Association of Counties, expressed support for A.B. 386. She said A.B. 386 was originally introduced by the association and has been amended to achieve "other things." She indicated section 2 of A.B. 386 deals with the $300,000  transfer to assist counties unable to make their interlocal

agreement payments, which is a key component for Nevada’s rural counties. She noted there are several rural counties, Mineral County being one, that informed her they would need assistance from the fund. Ms. Gamble asserted it is critical this component be passed by the Legislature in order to continue the program to help the counties with their long-term-care obligations.

Senator Raggio closed the hearing on A.B. 386 and opened the hearing on A.B. 690.

John Slansky, Assistant Director, Department of Prisons, indicated he was in support of A.B. 690, which provides an appropriation for $2,160,399 to allow the opening of a new prison near Indian Springs in Las Vegas.

Senator Raggio noted the expenditure had been in the budget. He asked whether the bill is consistent with the action agreed upon with reference to prisons that will be constructed and remain open. Mr. Miles replied this expenditure was in the Governor’s budget but was removed and put in a one-shot bill. He indicated the numbers have been "worked over" and there is a complete list of anticipated purchases.

Senator Jacobsen commented that should the Jean prison be closed there would be a transfer of equipment and asked whether any of the equipment is anticipated to be used elsewhere.

Mr. Slansky said LCB staff examined the equipment, furnishings, and vehicle list, and removed items from the appropriation that could be transferred to the new prison. Senator Jacobsen reflected this scenario was carried out once before and ended up with equipment deteriorating "for a couple of years." He pointed out the honor camp is located close by and suggested the equipment could be utilized there. Mr. Slansky indicated this would be done.

Senator Coffin inquired whether there had been a determination "regarding [the] Jean prison during the time it is closed, its ultimate use upon reopening, and what type of prisoners would be incarcerated there." Mr. Slansky replied the subject has yet to be resolved. He said the department was directed to peruse NRS Chapter 212 and propose an amendment allowing the prison to be a private operation.

Senator Coffin expressed the hope that out-of-state prisoners would not be incarcerated in Nevada.

Mr. Comeaux indicated a bill in the Assembly Committee on Ways and Means addresses leasing the Jean correctional facility and also covers some liability issues. He did not believe the bill contained language that specified what kind of prisoners may be housed at the prison. He indicated there had been "talk" about housing people from Clark County in the jail system. Mr. Comeaux commented the outcome would probably be that out-of-state prisoners would be housed at that facility for some period of time. He said the department anticipates reopening the facility for state use in 4 years and recommends it be opened as a women’s prison. He pointed out it is part of a long-term plan and will be discussed in 2 years at the next legislative session.

Senator Coffin asked the reason a bill is "in play" at present if the Jean prison building is not going to be open. Mr. Comeaux replied, "So we can lease it." Senator Coffin inquired when the building would be leased. Mr. Comeaux answered it would be leased during the 4-year period when it will not be used by the state. He said it would be desirable to lease the building to the federal government or a private corporation that runs privatized institutions. Senator Coffin asked "Why?" Mr. Comeaux explained it would be desirable for a variety of reasons: (1) to create a "revenue string" for the state, (2) to keep the institution functioning during that period of time to avoid paying to "mothball it," (3) hopefully, to create a situation in which whoever leased the building would make improvements so the institution could be returned in better physical shape than it is now. Senator Raggio pointed out the joint subcommittees that addressed the issue were unanimous in their desire for a plan to help the state recoup funds.

Senator Coffin expressed concern regarding the type of prisoners coming into the state. Mr. Comeaux indicated the kind of prisoners coming into the state have always been subject to the approval of the director of the Department of Prisons.

Mr. Slansky said that to his knowledge, language exists in the bill stipulating the Department of Prisons would have veto or approval authority on inmates coming into Jean from any other state.

Senator Raggio closed the hearing on A.B. 690 and opened the hearing on S.B. 288.

Senator Raggio indicated S.B. 288 was heard and acted upon by the Senate Committee on Finance on April 2, 1999, and requested an explanation of Amendment No. 1144 placed on it by the Assembly. Mr. Miles stated the Assembly put a "sunset" on the bill of Fiscal Year (FY) 2001. He pointed out it is a pilot program and hence should be "sunseted."

*****

Senator Raggio opened the hearing on S.B. 404.

Senator Raggio indicated two amendments placed on the bill added coverage. He explained S.B. 404 was sponsored by Senator James et al and initially was supported by all members of the Senate. He said the bill states that the surviving spouse and children of a police officer would continue to receive group insurance until death or remarriage of the spouse. The senator declared the amendment would "add others to this qualification."

Mr. Miles stated the original bill only applied to those in the state’s group health insurance program. He indicated the bill was broadened to include other public employees with group health care coverage. He said coverage was added for volunteer firemen should something happen in the course of their duty. Senator  Raggio clarified the measure applies only to police or fire personnel, and Mr. Miles said, "That is correct." He declared the Assembly Committee on Ways and Means added an amendment to make S.B. 404 effective upon passage so it becomes effective immediately rather than October 1, 1999.

Senator Coffin indicated he supported the bill but desired a report on the cost. He noted there is alleged to be no cost, or small cost. He said, "I just want to make sure we are not accused by counties and cities who will be paying this¾ if they had any input into it over there in the Assembly. If they raise no serious objection I certainly do not have any."

Answering a query by Senator Coffin, Senator Raggio indicated it is difficult to estimate how many people might be killed in the line of duty at either the state or local level, but surmised it would not be many. Senator Coffin inquired whether "line of duty deaths" from exposure to toxic fumes, and so forth, are covered adequately. He noted there have been eight state police officers and three state firefighters killed over the last 40 years and indicated he wanted to be sure the counties and cities were aware of this. Senator Raggio expressed the belief the language is "killed in the line of duty," which he pointed out is a clear definition.

*****

Senator Raggio called for action on A.B. 189.

Senator Raggio explained A.B. 189 needs to be amended with the proposed amendment (Exhibit E) and a change made to one reference.

Senator Neal indicated he had a problem with A.B. 189 because it allows legislators to have two different types of retirement systems if the legislator is coming from an already existing state retirement system. Senator Raggio explained that should a person working in the public sector be elected to the Legislature, the legislator would make a onetime election as to whether or not he or she wishes to remain under the PERS system, in which event payment to PERS must be made during the 4 months of the legislative session. Otherwise, the legislator may take a 4-month leave of absence and pay into the Legislators’ Retirement System (LRS). He said to that extent the measure provides for either option.

Senator Neal declared the legislator has the option to remain with a retirement system (PERS) that pays more than the LRS, which in his opinion, will cause problems. He said, "When a person buys into the legislative process everybody should be under the same rules." Senator Raggio pointed out a similar procedure was implemented in regard to judges; therefore, a precedent of that nature exists.

Senator Rawson remarked that although the proposal is reasonable, he told his constituents he would not vote on any issues regarding retirement for himself. Senator Raggio pointed out the measure would not raise Senator Rawson’s retirement but would do away with his legislative retirement should he make the election to continue with PERS.

*****

Senator Raggio called for action on A.B. 690.

*****

Senator Raggio opened the hearing on A.B. 386 for action by the committee.

*****

Senator Raggio opened the hearing on A.B. 684.

Senator Raggio indicated the committee had recommended to do pass A.B. 684; however, since then it was found money could be authorized from the Heil Wild Horse Bequest fund created pursuant to NRS 504.450 which would save the balance of General Fund appropriation made previously. He said Senate Amendment No. 1195 to A.B. 684 could be offered as a floor amendment should the committee so approve.

*****

Senator Raggio pointed out Amendment No. 1195 to A.B. 684 would not reduce the amount of principal in the trust fund beyond that which, by policy, has been established, which is about $1 million.

Senator Raggio opened the hearing on A.B. 220.

Senator Raggio indicated A.B. 220 was brought to the committee by Assemblyman Richard D.  Perkins and provides an amendment which creates an advisory committee on the location issue of the new 4-year state college in Henderson, Nevada.

Senator Coffin pointed out that when he made the motion on A.B. 220 he did not realize the Board of Regents had been placed in the awkward position of being the minority of a selection committee to create a university campus under their jurisdiction. He said this fact was brought to his attention by several members of the board. He noted he would have no objection should the amendment state there be people from the Governor’s Office, the Senate, and the Assembly on the advisory committee. Senator Coffin suggested changing the amendment to provide the regents a better understanding of "what is being done."

Senator Raggio expressed reluctance to change Mr. Perkins’ amendment and suggested Senator Coffin contact him personally regarding his suggestion.

Senator Raggio closed the hearing on A.B. 220 and opened the hearing on S.B. 551.

Senator Raggio indicated S.B. 551 was introduced May 27, 1999, and the Senate Committee on Finance reviewed the narrative position commencing with section 2. He stated section 1 includes all the sums otherwise authorized in the budget actions. Mr. Miles said, "That is correct."

*****

Senator Raggio mentioned he had received some suggestions from Senator Titus regarding bills, proposals, and projects that could be included in the funding of the "omnibus bill," and requested further suggestions from the committee. He noted LCB staff informed him the "omnibus bill" changes moment by moment, depending upon the present action. He expressed the understanding that approximately $16 million was available each year which could be utilized to fund some of the proposals heard by the committee and others that might be included.

Senator Neal asked whether $16 million is the "average amount." Senator Raggio replied it is an average amount, noting it is "onetime money" that will not accommodate continuing programs. Senator Neal inquired whether the salary proposal for the Nevada Highway Patrol would be excluded. Senator Raggio explained a proposal which would put any sector of state employees into a situation where their salaries would be automatically set cannot be considered. He said the salary obligation would continue and could not be done for one sector of state employees and not others. Senator Raggio stated the action would remove considerations of this kind from both the Executive and the Legislative Branch. He said, "If somebody says otherwise they are probably not dealing with a full deck."

Answering a query by Senator Coffin, Senator Raggio responded there are no funds to support ongoing programs, nor would it be equitable to approve an automatic cost of living increase for one sector of state employees and not others. Senator Coffin suggested a onetime bonus. Senator Raggio indicated the committee provided meaningful increases to the Nevada Highway Patrol during the 1997 Legislative Session. Senator Coffin asked whether a salary study of the highway patrol would be conducted. Senator Raggio replied a salary study is not proposed at this time.

Senator Raggio indicated amendments would be presented regarding the omnibus bill and the committee would be called back upon the amendments’ arrival.

Senator Raggio recessed the committee to the call of the Chair at 10:45 a.m. and called the committee back to order at 5:30 p.m.

Senator Raggio reopened the hearing on S.B. 353.

Senator Raggio indicated S.B. 353 is the vehicle used in connection with custodial officers and would raise their salary one grade commencing January 1, 2001. He noted the bill states the Department of Personnel shall conduct an occupational study of all custody and related positions within the Department of Prisons. He said there is an appropriation of $1,220,000 for the one-grade increase that would begin in the last half of the second year of the biennium.

Senator Raggio said that unless there was an objection from the committee, Assembly Amendment No. 1201 to S.B. 353 would be submitted. No objection was forthcoming.

Jeanne L. Botts, Senior Program Analyst, Fiscal Analysis Division, LCB, indicated Senate Amendment No. 1175 to A.B. 348 was addressed on May 27, 1999. She explained the first issue of the amendment relates to the percentage of teachers in a charter school who must be licensed by the State Department of Education. She said that percentage is currently 75 percent of the teachers and 25 percent must have 5 years’ experience or more if they are not licensed. Ms. Botts stated an agreement has been reached that 70 percent would be licensed teachers and 30 percent would be unlicensed teachers with 2 years’ experience.

Responding to a query from Senator Mathews, Senator Raggio explained the committee had agreed upon certain amendments to A.B. 348 which encompassed everything dealing with charter schools. He indicated Senate Amendment No. 1175 was the vehicle that would have accomplished it; however, since that time there had been discussions between the Assembly, the Senate, and others involved in the process. Senator Raggio pointed out Ms. Botts would explain the adjustments to Senate Amendment No. 1175 to A.B. 348, which would avoid any further conflicts.

Ms. Botts addressed the adjustments to Senate Amendment No. 1175 to A.B. 348:

1. There is still a question about whether the 70:30 percent split between licensed and unlicensed teachers would be required in a vocational/technical school. She said there was confusion regarding who licenses teachers and clarified it is the State Department of Education, not the Clark County School District, that sets the requirements. Ms. Botts pointed out the Legal Division of the LCB would provide the committee a copy of the regulations. She suggested the committee study whether there should be a different percentage of licensed teachers for vocational schools and "whether it is more restrictive." She said the question of who may teach in a vocation school is "wide open" at present.
2. Language was requested to specify that schools wishing to convert must apply as any other charter school applicant and meet the same standards and rules. She said that since charter schools already must apply and meet the same standards and rules as any other applicant, language is not needed to specify this.
3. Language was requested that would require teacher evaluation procedures be spelled out. She suggested it would be simpler to describe that requirement in the charter school application.
4. Language was requested that would state the charter would be revoked should the charter school not use generally accepted standards of accounting and fiscal management. Ms. Botts said current regulations of the State Department of Education require charter schools to follow generally accepted accounting standards, but there is no automatic revocation of the charter should they not do so. She noted an amendment would be necessary to require revocation of charter should the charter schools not comply. Senator Raggio asked whether the mandate should make it a requirement or grounds for revocation, and Ms. Botts replied it should be grounds for revocation.

Senator Washington indicated he agreed with the proposed amendments to A.B. 348. Senator Raggio suggested a new amendment be ordered that would allow the matter to be amended in this committee and therefore it would not be necessary to amend it in the Assembly.

Senator Neal inquired about the unresolved issue of whether the State Department of Education or the school district would license teachers. Ms. Botts replied some of the parties were confused about the issue. She indicated the Legal Division of the LCB provided the committee with the regulations pertaining to teacher licensure. She explained a limited business and industry endorsement is issued by the Superintendent of Public Instruction by the State Department of Education, not the Clark County School District,. Ms. Botts said to receive a limited business and industry endorsement, the applicant must have:

• Received a high school diploma or its equivalent.

• Completed 6 semester hours of course work, including professional occupational education and teaching methodology.

• Been employed for at least 5 years, after reaching 16 years of age, in a position that relates to the program for which the applicant is applying for endorsement.

Ms. Botts noted a limited business and industry endorsement is not renewable and the holder must complete the requirements for business and industry endorsement to continue teaching.

Senator Neal reflected that Ms. Botts’ explanation answered the question of who could teach in a vocational school, but it did not answer the question regarding licensure. Ms. Botts reiterated the State Department of Education licenses teachers. She indicated it is "fairly easy" to obtain "one of those" licenses because the applicant is not required to graduate from college and go through a teacher preparation program. However, she said, it appears the licenses are nonrenewable and this could be a problem.

Senator Neal asked whether the amendment stated the teacher evaluation procedure would "be spelled out" in the application. Senator Washington indicated it would be reflected "in the amendment to the amendment."

Further, Senator Neal asked whether the transportation issue needed to be resolved by an amendment. Senator Raggio indicated the transportation issue had been addressed otherwise, and Ms. Botts agreed. Senator Washington clarified students would get to school by whatever transportation methods are provided by the school or the school district.

Continuing, Senator Neal inquired whether the item requiring students to obtain a waiver to attend sports programs in the regular public school is spelled out in the amendment. It was Senator Raggio’s understanding the new agreed-upon amendment states that students in a charter school would be allowed an opportunity to participate in extracurricular activities and to take subjects that are not taught in the charter school, should space be available. He pointed out students would also have the opportunity to engage in sports activities if space is available, but the activity must take place in the school district zone in which he or she resides unless the school district has granted a waiver. Senator Washington indicated that was correct.

In reference to S.B. 213 pertaining to private schools and home teaching, Senator Neal clarified that when or if a student desires to attend public school, the student’s attendance must be based upon whether or not space is available. He asked who would make that determination. Senator Washington answered the school district would make the determination and the schools would be compensated for the students taking the class.

Calling attention to the high school vocational technical programs, Ms. Botts said there was a question whether or not to remain with the requirement 70 percent of the teachers be licensed. She expressed the understanding that should a teacher hold a limited business and industry endorsement issued from the State Department of Education, it is considered a license. Senator Raggio said he understood the agreement was "50-50 on the occupational schools," and Senator Washington agreed.

Senator Raggio directed Ms. Botts to obtain the new amendment and the committee would review it as soon as possible.

Senator Raggio closed the hearing on A.B. 348, and reopened the hearing on A.B. 189.

Senator Raggio noted A.B. 189 was "amended and do passed" out of committee earlier in this meeting. He indicated Senate Amendment No. 1202 to A.B. 189 had been created. He asked Mr. Pyne whether or not the amendment covered the earlier action. Mr. Pyne indicated Senate Amendment No. 1202 successfully covered the earlier action. Senator Raggio declared Amendment No. 1202 to A.B. 189 would, in that case, be submitted.

Senator Raggio opened the hearing on S.B. 507.

Senator Raggio indicated there was an amendment to S.B. 507. He noted the original bill that passed out of the Senate Committee on Finance contained an appropriation of $16,187 and that amount was amended. He pointed out the Assembly has since amended it further, to $4,063. Senator Raggio indicated he would accept a motion to concur.

*****

Senator Raggio recessed the meeting at 6 p.m. until the call of the Chair.

RESPECTFULLY SUBMITTED:

Barbara Moss,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE: