The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 10:00 a.m., on Sunday, May 30, 1999, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

Senator Bob Coffin

Senator Bernice Mathews

GUEST LEGISLATORS PRESENT:

Assemblywoman Chris Giunchigliani, Clark County Assembly District No. 9

Assemblyman P. M. "Roy" Neighbors, Assembly District No. 36

Senator Mike McGinness, Central Nevada Senatorial District

STAFF MEMBERS PRESENT:

Jean Laird, Committee Secretary

OTHERS PRESENT:

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Senator Raggio asked Fritsi Ericson, President and CEO, Nevada Women’s Fund, to describe the Nevada Women’s Fund, its operation, membership, and goals and whether it is a "501(c)3" organization, a tax-exempt entity under the Internal Revenue Code 501(c)3. Ms. Ericson replied the Nevada Women’s Fund is a "501(c)3" organization and was founded in 1982 by a group of community women concerned about the amount of money available for women and children through scholarships and grants. She explained that since 1982 the organization had awarded over $1 million in scholarships and over $800,000 in grants.

Ms. Ericson stated the Nevada Women’s Fund scholarships are awarded in many cases to "nontraditional" women who may be reentering school and raising children alone. She said the scholarship program had been very successful in returning people to northern Nevada communities with self-sufficiency skills.

Senator Raggio asked how the Nevada Women’s Fund is currently funded. Ms. Ericson replied it is funded totally by the community and operates as a community foundation operates. She noted the organization has two major fundraisers a year and just completed the "Women of Achievement" fundraiser, which was highly successful. She added another major fundraiser is held in the fall. She stated the organization also conducts campaigns with individual donors and the board members all participate with financial pledges.

Senator Raggio inquired about the annual budget and how long the organization had been in operation. Ms. Ericson replied the annual budget is $500,000 to $600,000 a year and the organization has been in operation since 1982. Senator Raggio asked whether Ms. Ericson had the capability to present copies of the organization’s total budget for the last 2 years. Ms. Ericson said she did not have it with her but could send it to the committee. In response to Senator Raggio’s further inquiry, Ms. Ericson said there are about 3,000 people actively involved through some kind of fundraising and 10,000 people on the mailing list. She indicated the fundraising goal is $500,000.

Senator Mathews indicated she had been involved with the Nevada Women’s Fund for years and informed the committee it is a great organization. She noted the group does a great job for women and children in the northern part of the state. She stated it has been involved in scholarships throughout the state, with the exception of Clark County. She said this organization ensures "nontraditional" women can get back into school and it issue grants to organizations. She added there is also an arm of the organization that provides loans for small businesses. Senator Mathews also indicated she was a member of the advisory board.

Senator Raggio noted the request under consideration is for $50,000 and asked whether that would be of assistance to the organization. Ms. Ericson indicated it would be.

Senator Coffin asked for a definitive description of grant recipients, with a list of past recipients. Ms. Ericson replied she would provide that. Senator Coffin inquired whether there is a companion organization in Clark County. Ms. Ericson said there is another group in Las Vegas called the Foundation for an Independent Tomorrow, which began under the umbrella of the Nevada Women’s Fund but is conducting its own fundraising campaigns. She noted the Nevada Women’s Fund had provided scholarships to women from Las Vegas who are in medical school or attending the University of Nevada, Reno. Senator Raggio thanked Ms. Ericson for her testimony.

Senator Raggio directed attention to Assembly Bill (A.B.) 472 and reminded the committee there had been a hearing on the bill several days previously.

Senator Raggio reminded the committee this bill increases longevity for judges from 1 percent to 2 percent. He indicated the bill would need to be amended to provide the funding in the bill.

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Senator Raggio asked Senator Rawson to conduct the hearings for A.B. 373, A.B. 205, and A.B. 696. He stated that although the bill was not noticed on the agenda, he had previously indicated the committee would hear all bills awaiting action in this committee for action on this day.

Senator Rawson opened the hearing on A.B. 373.

Assemblywoman Chris Giunchigliani, Clark County Assembly District No. 9, informed the committee A.B. 373 was originally intended to "impact" mentally ill or mentally retarded persons. She said the bill was split into two bills during the drafting process and the summary should have been changed to exclude mentally ill persons but was not.

Ms. Giunchigliani said A.B. 373 had been amended based on passage of S.B. 163, which requires registered group homes to become licensed.

Ms. Giunchigliani explained that is the reason the fiscal note had been removed from this bill. She said it had been brought to the attention of the Nevada Commission on Aging and the Nevada State Board of Examiners for Administrators of Facilities for Long Term Health Care that individuals were representing themselves to nursing homes and hospitals as agencies licensed to refer clients in to group homes. Ms. Giunchigliani pointed out there is no such thing as a licensed referral business. She stated those individuals might have had a local business license, but no health care background. She said that through her work with the people in the health care field, she became convinced it was time to establish a licensing process for group home referral agencies.

Ms. Giunchigliani explained this bill would require the State Board of Health to adopt standards for the licensing of referral businesses, standards for fees charged by the referral agencies, regulations governing the licensing of the businesses, and regulations regarding training. She said training regulations were specifically requested by operators of group homes, who are fearful that people are placing senior citizens or other "fragile" individuals in group homes when that is not the right level of care.

Ms. Giunchigliani further explained A.B. 373 stipulates that a licensed nurse, social worker, physician, hospital, or provider of geriatric care who is licensed as a nurse or social worker may provide referrals to group homes through a licensed referral agency. In addition, she said, the board may consider other persons, such as a public guardian, and that would be defined by regulation.

Ms. Giunchigliani pointed out it would be prohibited, as it is for other medical services, for a person to self-refer. She said it would also be prohibited to refer anyone to an unlicensed group home.

Ms. Giunchigliani said the Health Division would be able to revoke a license upon receipt of valid complaints. She noted the Health Division reported a 38 percent increase in complaints in the group home industry.

Ms. Giunchigliani pointed out A.B. 373 also addresses licensing of group homes. She said the bill clarifies that if the Health Division suspends or revokes the license of a person who operates a group home for having committed abuse, neglect, or isolation, the division shall also suspend or revoke the licenses of all other group homes operated by that person. She noted the Health Division requested this provision.

Ms. Giunchigliani explained this bill applies only to counties with populations of 100,000 or more because there is an apparent shortage of licensed care workers in many of the other areas. She explained the Health Division has the option to develop regulations for the other areas if needed.

Ms. Giunchigliani said as group homes move into residential areas, a problem has developed regarding the posting of emergency exits. She directed attention to subsection 7 on page 4, which addresses that problem. She said the bill requires group homes to adopt emergency response plans. Group homes are now allowed to have both ambulatory and nonambulatory residents in one home and do not have the same staffing patterns as nursing homes. She explained if the home is for fewer than 10 residents, it does not have to meet certain requirements, such as sprinkler systems and handicap ingress or egress. The State Fire Marshal had indicated it is important for group homes to have an emergency plan that has been properly posted and communicated to staff and residents. Ms. Giunchigliani said the bill calls on the State Fire Marshal to enter and inspect a residential facility for groups and review emergency plans.

Ms. Giunchigliani noted if the Health Division is informed of an unlicensed group home, it must inspect it within 72 hours. She indicated she personally had come across at least five unlicensed homes in her district when she was campaigning door to door. She said that as recently as the last campaign she had found seven seniors in a home with no supervision and no caretaker. She said two people were in wheelchairs and there was concern about whether they were being properly taken care of. All the Health Division could do was send a letter of notification to the home and the division has, therefore, asked for steeper penalties.

Ms. Giunchigliani stated the person at Metro (Las Vegas Metropolitan Police Department) who handles complaints about group homes testified before the Assembly Committee on Health and Human Services that Metro is strongly in support of this measure because of the number of complaints received and the inability to do anything. She said Metro testified there are a few individuals who buy several homes and open them up as group homes. She said those homes many times are not licensed until the authorities catch up with them. Ms. Giunchigliani said Las Vegas has to identify group homes using the property tax rolls. Then a visit to the home is made to determine whether a group home is operating and licensed.

Ms. Giunchigliani testified Metro asked for stiff penalties. A.B. 373 would provide for a $10,000 fine the first time a person is caught operating a group home without a license and a $20,000 fine the second time. After the second time that person would not be allowed to apply for a license for 6 months.

Ms. Giunchigliani summarized that A.B. 373 is a good consumer protection measure and that the various senior groups have supported it.

Senator Neal asked why section 6 would require a two-thirds vote for passage. Ms. Giunchigliani responded the original bill had language that is also in S.B. 163 which requires that registered homes become licensed homes over time. She said there was a fee associated with that language which was deleted from A.B. 373 and there was originally a $200,000 fiscal impact. Apparently, she said, when the bill was redrafted, the note regarding the two-thirds vote was not eliminated. She said in the revised bill the board will establish licensure fees and the fiscal impact was dropped down to about $40,000 in the first year of the biennium and $50,000 in the second year. She said there is no General Fund appropriation and fees will be handled through the regulatory process just as other fees are now.

Senator Neal said that is not referenced in section 6. Ms. Giunchigliani referred to section 3, subsection 2(b), which indicates the board shall adopt standards relating to the fees charged by such business and 2(c), which covers regulations governing the licensing of such businesses. She said the Health Division testified it already has authority to charge fees whenever a license is required and the regulatory process would cover that. She said this bill does not add anything new in that regard.

John Yacenda, Deputy Director, Department of Human Resources, testified the Department of Human Resources and the Health Division have worked with Ms. Giunchigliani in the development of this bill and the department and the division support the bill.

Senator Rawson said there was legislation on this same matter in the Senate Committee on Human Resources and Facilities and asked whether this bill is consistent. Ms. Giunchigliani responded the section relating to the subject of S.B 163 had been deleted from this bill, so A.B. 373 would not conflict with S.B. 163.

Senator Jacobsen asked what the average referral fee is. Ms. Giunchigliani responded individuals who are doing referrals may charge $500 and may charge as much as 50 percent of the monthly group home cost. She said the bill originally would have prohibited a referral agency from charging a fee.

Ms. Giunchigliani said the Assembly Committee on Health and Human Services narrowed the focus, clarified the purpose was not to put anyone out of business, and determined it was important to get the licensing process started and be reasonable about it. She said the important thing is to ensure persons with health care backgrounds are doing the referrals. She noted referral agencies currently are placing people in group homes who do not appear to be ill, but in fact need skilled nursing. She pointed out that requiring people who make the decision have a health background will correct this. After working with the geriatric care nurses from Washoe County who do referrals, the Assembly Committee on Ways and Means changed the language in the bill to allow referral agencies to charge a fee. Ms. Giunchigliani noted, however, regulations will require the fees be reasonable to prevent "price gouging" on seniors or their families.

Ms. Giunchigliani said the other issue was whether to allow the facility to pay the referral agency. She noted some states have prohibited the family from being billed and only the facility is to be billed. To prevent possible "head hunting," some states have said the facility may not be charged. Based on information provided by operators of group homes, the issue is to prevent "self-referral." She said it is important to not allow a person to claim to be a referral agency, be the owner of a group home, and refer clients to his or her own group home. This bill would prohibit that.

Senator Rawson closed the hearing on A.B. 373 and opened the hearing on A.B. 696.

Robert Bayer, Director, Department of Prisons, testified in support of A.B. 696 and Amendment No. 1207. He said the bill allows the Department of Prisons authority to lease out the Southern Nevada Correctional Center if a suitable lessee is found during the period the facility would be "mothballed." He said this gives the department the ability to submit a contract to the State Board of Examiners to lease the facility. He said the prime target would be the federal government, but the department would also consider local agencies. If necessary, he said, the department would bring in prisoners from other states. If that occurs, he stated, this bill provides that all prisoners be reviewed by Nevada’s classification committee to ensure all are appropriate for that facility.

Senator Coffin recalled discussions that this facility could potentially be a women’s correctional center but noted that is not in the bill. Mr. Bayer said the bill would allow the department to use the facility as an adult or juvenile facility, which provides wide flexibility.

Regarding custody and classification, Mr. Bayer said the department would follow the same kind of classification system currently being used in this state. He said the department would review each potential inmate and would not put anybody inappropriate to the physical design in the facility. Senator Coffin asked where in the bill it is spelled out what classification levels are allowed to be in this building. Mr. Bayer said it does not specifically say what classification levels, but it does state the Department of Prisons must review every inmate who comes into the system.

Senator Coffin said it is indicated in section 3 on page 2 there would be a contract with the committing jurisdiction for every person who would be confined there. He asked whether that means the out-of-state jurisdiction or the local jurisdiction. Mr. Bayer replied yes. He explained if the department does not directly lease to a government agency and leases to a private contractor, the bill has certain requirements. He cited Corrections Corporation of America (CCA), which operates a women’s prison in Las Vegas, as an example of a private contractor the department might lease to rather than a government agency. He noted the jurisdiction sending the inmates through that company would also have to sign off on that contract and be held jointly and severally liable for the conditions of the contract. If, for example, the State of Wyoming were sending female inmates, Wyoming would have to be cognizant of what the contract says and agree to it and be held responsible just as the private company is.

Senator Coffin said he was in Ohio the previous summer when the prison break took place and noted that prison was operated by CCA. He said the governor of Ohio indicated he had felt secure the prison department had a "handle" on the kind of inmates at that facility, yet five or six life-term prisoners broke out. He said Ohio also had language in its contract similar to what was being discussed at this hearing. He said he became aware residents of eastern Ohio and western Pennsylvania were frightened. The senator noted that because of this incident, the governor of Ohio appeared before the Ohio Legislature and said "no more of this kind of prison and no more out-of-state inmates, whether it is in a state-owned or [a] contractor-built facility."

Senator Coffin pointed out Nevada has a facility built by the state and it is known to be a "weak-walled prison." He voiced concern the department would follow the easy course to limit the number of contracts that would have to be executed. He said he could see the possibility of a single contract with the State of California or Orange County, instead of searching the country for prisoners the department would have to have individual contracts for. He noted it is not likely the other jurisdiction would send Nevada its model prisoners.

Senator Coffin asked how the department would know what the other jurisdiction’s classification system is and how the department would know the other jurisdiction will not lie to Nevada. He noted Washington, D.C. apparently lied to Ohio and may have lied to CCA and there are several lawsuits. He asked where Nevada’s protection would be. Senator Coffin pointed out the Jean facility is only about 300 yards away from several major casinos.

Mr. Bayer said that at the time the prisoners broke out of the Ohio prison, Nevada had inmates in Ohio at that same facility.

Mr. Bayer stated Nevada had no problems at all and one of the reasons is that Nevada exercises high levels of oversight regarding the privatization issue. He said the protections are in place and all contracts go to the State Board of Examiners, which has the same members as the Board of State Prison Commissioners. He said it would also go in front of the Interim Finance Committee (IFC). He said Nevada has a lot of oversight and according to conversations with the director of prisons in Ohio, prior to that incident Ohio really had no oversight at all. He said Ohio was not auditing, reviewing, or looking at the inmates as they arrived. He said one of the biggest mistakes made by other states leasing out-of-state prison space is thinking they were free of their problems, thinking they would just wash their hands of it. He pointed out Nevada does not do that. He said that in regard to privatization he is one of the more knowledgeable prison directors in the country right now and he said he will make sure all contracts address all the concerns the committee has voiced. He said the department will exercise Nevada’s review of each candidate and use Nevada’s classification custody definitions.

Senator Coffin pointed out that Ohio governor is now a congressman because he "went the other way." The senator opined Nevada would get "snookered" if Nevada were to take out-of-state prisoners. He said if the department only took local prisoners, at lease the file would be available. He also pointed out that facility is a medium-level facility at best. He recalled the Legislature had spent a lot of money just trying to keep it at the medium level and it had been difficult.

Senator Neal directed attention to section 3 of the bill. He said it states that "a contract to lease the Southern Nevada Correctional Center must be made on the best terms available for this state." He asked Mr. Bayer what that means in his estimation. Mr. Bayer replied this is a phrase that comes out of the state lands section and is used to describe any leasing or selling of property and said he would defer to an attorney to define that phrase. He said the state always tries to get the best terms for the state, so he was not sure why that had to be there.

Senator Neal said this hearing is about prisons and about leasing a facility. He pointed out his question was regarding Mr. Bayer’s knowledge and understanding as to what that would mean in terms of prisons. Mr. Bayer responded that means he would seek the lowest risk in terms of the lowest classification levels. He explained the best terms would be to lease this facility out as a minimum-custody facility to a federal government agency or other government agency and get a good financial return for Nevada. He added he would view it in terms of lowest custody and highest revenue for the state.

Senator Neal directed attention to section 4 of the bill regarding the approval or disapproval of each prisoner. He asked whether Mr. Bayer understood that to mean there would be a list of the individuals as they arrive and the department would make the determination as to whether those individuals could be placed in the facility. Mr. Bayer replied that he did and noted this is the section which relates to the department’s classification program. He explained it means every inmate coming to that particular facility would have to go through the same classification process currently used by the department and every candidate would be reviewed. Mr. Bayer testified he was making the commitment to do that.

Senator Neal inquired whether sections 3 and 4 of the bill relate to preventing the situation that occurred in the State of Ohio. Mr. Bayer answered that the bill goes a step further. He said Senator Coffin’s point is well-taken because no matter what level security there is, there can always be an incident such as a damaged building. He pointed out this bill also provides that the lessee would reimburse the state for anything which does happen in the facility.

Senator Neal asked whether Mr. Bayer anticipated the lease would be awarded to "anybody other than a political subdivision." Mr. Bayer said the bill provides for the department to be able to lease the facility to a private company that operates prisons for profit. He said his dialogue so far had been with the federal government, but the bill would provide that if government agencies do not want to lease it the department could lease it to a for-profit company. He explained that is why the bill includes the phrase "lessee and the jurisdiction of commitment." Senator Neal asked whether Mr. Bayer interprets the definition of lessee in section 1 to include private companies. Mr. Bayer replied he does. However, he said, terms of the lease would be so "tough" that it would be difficult for any entity but the federal government or another state to lease this facility.

Senator Neal recalled there was another bill before the Legislature that would have privatized the prison. He asked whether this bill is another attempt to accomplish privatization without the other bill passing the Legislature. Mr. Bayer replied this is the same bill and it was developed in the Assembly. He said there was no other bill. He asked whether Senator Neal was referring to the privatization of prison medical services. Senator Neal said that was part of the discussion, but there was also discussion of privatizing the prison facilities. He said the only facility currently privatized is the women’s facility in the south. Mr. Bayer said that was correct and added that medical services at the Ely State Prison have also been privatized.

Senator Neal asked whether the intent of this bill is to privatize the Southern Nevada Correctional Center. Mr. Bayer said that in discussions regarding privatization of medical services, testimony from the medical division staff made it appear he also supported privatization of the custody staff in prisons. He asserted he does not support privatization of custody staff in prisons and has never said he did. He pointed out those are two separate issues. Mr. Bayer stated this bill only allows the Department of Prisons to privatize that one facility and only for the period of time the department is not using it, which would be approximately 4 years. He said after that the master plan calls for opening it as a minimum-custody facility. He said that during those 4 years the department would not be staffing it. He agreed if a company did lease the facility from the state, it would be privatized. However, he emphasized, it would not be the department’s staff that would be privatized. He further stated he has no intention of privatizing any other correctional staff.

Senator Jacobsen noted the prison system has federal mandates and asked whether the Jean facility meets requirements such as for light and air space. Mr. Bayer said there are "a few things still being fixed," such as projects to meet ADA (Americans with Disabilities Act) requirements. He informed the committee the department has never applied for ACA (American Correctional Association) accreditation but meets all other requirements. Senator Jacobsen asked whether the state would be assuming any responsibility or liability if this facility were leased out. Mr. Bayer said the entity using the facility would have to indemnify the state, assume the liability, and have insurance in place.

Ed Flagg, Lobbyist, Nevada Corrections Association, stated, "Everyone knows about the war stories" about private corrections companies. He opined the private companies are only concerned about profit and do not care about public safety. He pointed out there is no language anybody can put into a contract that will completely make a private corrections company solely liable for a contract. He noted that if the contract is with a federal agency or a juvenile facility that is one thing, but he asserted private contracting just does not work.

Senator Coffin informed the chairman he wanted to hear more testimony on this "late-rising" bill. He said he would like to hear from the Department of Administration and from the State of Nevada Employees Association and any other stakeholders.

Robert J. Gagnier, Lobbyist, State of Nevada Employee’s Association (SNEA), said he had not intended to testify on this. He noted he had listened to the debate and information put together by the Joint Subcommittee on Public Safety/Natural Resources/Transportation during development of the bill. He said the subcommittee appears to have put in place a great many safeguards. He said "everybody knows" SNEA is opposed to the concept of privately operated prisons. He testified his preference would be for a public entity to operate this facility, but he doubted that will happen.

Mr. Gagnier pointed out there should be some assurance from the department that no Nevada inmates will be housed in this facility while it is contracted out. He stated SNEA fears that once this facility is leased out it will never again be operated as a state facility.

Mr. Gagnier recalled Mr. Bayer had indicated the bill assures the department will control the classification of the inmates coming in from someplace else. He indicated additional staff for the classification review will be needed unless the review is just a perfunctory one. He said the problems in Ohio were lack of trained staff and improper classification and there are still ongoing lawsuits on those issues. He said the nearby communities in Ohio were told the prison would be a low-medium facility, but in fact it was a high-risk facility. However, he said, it appears the subcommittee has attempted to address the risks in this bill and that is why SNEA did not oppose it.

Senator Coffin agreed there does appear to be protection for jobs and positions, but he is still worried about the safety of the community in the area.

Senator Rawson closed the hearing on A.B. 696.

Senator Coffin asked who was representing the two private correctional companies. Senator Raggio said A.B. 696 is a bill the Executive Branch and the joint subcommittee developed to ensure the facility did not remain vacant during the 4-year period. He said the cost of "mothballing" a facility is considerable and the intent was to provide the opportunity to lease the facility under restrictive conditions. He informed Senator Coffin there is nobody from correctional companies advocating either way on this bill.

Senator Raggio opened the hearing on A.B. 205.

Assemblyman P.M. "Roy" Neighbors, Assembly District No. 36, informed the committee the 1997 Legislature made available $75,000 for the study and engineering of a Hi-Tech Learning Center for the Pahrump area. He noted the residents in the area are excited about the center. He stated the growth in Pahrump is fantastic and the center would also cover Amargosa Valley, Beatty, and Sandy Valley. He indicated there are resolutions of unanimous support from the Pahrump Town Board and the Nye County Commissioners.

Senator Mike McGinness, Central Nevada Senatorial District, added that the center can serve as a hub for "distance education courses" throughout rural Nevada. He said there are six remote sites planned and the Community College of Southern Nevada is going to be doing customized training for the test site. He said it would be a great addition because it reaches out to areas where higher education is otherwise not available.

Scott M. Craigie, Lobbyist, Community College of Southern Nevada, testified this hi-tech center is located in the hi-tech corridor, which is an official corridor throughout central Nevada that will eventually connect the northern Nevada university system and the southern Nevada university system. He said there is an industrial hi-tech park planned in Nye County close to where this facility will be built. He noted it is anticipated that a large number of people will be trained in basic computing skills to service the hi-tech industry expected to move into that area. He informed the committee the Nevada Test Site Development Corporation is the group overseeing the development of that industrial park. In addition, he said, there were a number of private sector and local government contributions to this site. He noted most of these centers cost $5 million to build and the appropriation for this center was changed from $5 million to $3.5 million.

Senator Raggio stated this committee is aware of the amendment placed on this bill by the Assembly Committee on Ways and Means. He said that during hearings to close the Capital Improvement Projects budget, there was discussion regarding surplus money being available from the CIP for the center connected to Truckee Meadows Community College (TMCC). There were also discussions regarding alternative funding if there is no surplus from the TMCC project. The senator noted the committee added $500,000 in optional potential funding, which would be in addition to the appropriation in this bill. He said it has also been indicated there is other potential funding to otherwise complete the project. He pointed out all that was considered when the amendment to reduce the appropriation was processed.

Mr. Craigie confirmed there is the possibility of $500,000 from the TMCC project and an additional $700,000 from "the Economic Development." Senator Raggio said there had been impressions this was a different type hi-tech center than others in the community college system since it would be in a rural setting. He said Mr. Craigie had correctly pointed out the center is modeled after those already authorized and it is more cost-effective to use the same model. Mr. Craigie said he wanted to assure the committee this center will be a full-sized and complete facility.

Senator Coffin asked what the appropriation from last session yielded. Mr. Neighbors reiterated the appropriation was $75,000 for the study and engineering. Senator Coffin asked whether a report is available. Mr. Neighbors said, if needed, he could get the report from the State Public Works Board and make it available for the committee. Senator Coffin asked whether one had already been distributed to legislators. Senator McGinness explained the report resides at the public works board.

Robert Dickens, Ph.D., Lobbyist, University of Nevada, Reno, said the finding of the study was that the project was feasible. Senator Coffin said this project was number 11 on the university’s tier 1 priority list and asked how many other projects on tier 1 were funded. Dr. Dickens replied the only project not funded on tier 1 was the chemistry building at the University of Nevada, Reno, which was withdrawn because the private donor was unable to meet his commitment.

Senator Coffin inquired the population of the area where the center would be located. Mr. Neighbors responded Pahrump has a population of 35,000. He added there is a four-lane highway planned and the growth is so high that Nye County is the sixth-fastest-growing county in the nation. Senator Coffin asked how many school-aged children there are among the 35,000 or in a 30-mile radius. Mr. Neighbors said he would use a much larger radius because Amargosa Valley is about 17 miles away and Beatty is about 65 miles away. Senator Coffin said it would be important to be able to estimate the number of children this center would serve. Senator McGinness said the Community College of Southern Nevada has 600 students now using the high school center. With the addition of this hi-tech center that number would jump considerably since right now there are limited class offerings because classrooms are not available during the day. Senator McGinness said he would provide the numbers requested by Senator Coffin.

Senator Rawson added that these high-tech centers are beneficial to school-aged children, but teachers also utilize the centers for their training and it also becomes a community resource.

Senator Jacobsen asked whether there is plenty of space, water, fire protection, and law enforcement to support the center. Mr. Neighbors replied there is. He said with the growth in Pahrump there are two excellent volunteer fire departments and water is no problem at all. He added the school district has provided land valued at approximately $1 million. He said this project has really been a team effort and the entire community is behind it and excited about it. He said there is plenty of police protection and the county has just funded the construction of a new courthouse for Pahrump.

Senator Coffin indicated he wanted information from legislative fiscal staff before this bill goes to the full Senate. He said he would be curious to know whether there were any unfunded requests for Nye County School District for basic fundamental educational requirements. He also inquired how many high-tech centers there are in Clark County.

Mr. Craigie said it is important to remember these high-tech centers are facilities that are shared with the local school district. He said every one of the centers is connected to the high school system. Also, the community college system has brought high school students into these facilities and in some cases high school students finish their first year of college while in high school.

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SENATE BILL 181: Makes various changes to provisions governing practice of dentistry and dental hygiene. (BDR 54-125)

Senator Rawson stated that the Senate passed S.B. 181, which provided for dental licensure by credential and allowed the system to hire faculty for a dental school. He explained he had not previously noticed the effective date would be October 1, 1999, and was looking for a vehicle to make the bill effective upon passage and approval or July 1, 1999. Senator Raggio asked legislative staff to look for a method to change the effective date.

Senator Raggio reminded the committee S.B. 548 was heard by the committee on May 25, 1999.

Senator Raggio called the meeting back to order at 4:05 p.m. He informed the committee the Assembly had a list of projects they wanted to fund called the "A" list. He directed attention to the one-page document entitled the "S" list (Exhibit C), also referred to as the approved list, which is the Senate’s companion list of projects proposed to be put in a single bill for funding.

Senator Raggio directed attention to the item on the approved list titled "PWB for Maintenance Projects." He said there was an agreement between the Senate Committee on Finance and the Assembly Committee on Ways and Means to use any excess funding to remove some of the maintenance projects from the bonding program. He said it had been tentatively agreed to remove $2 million in maintenance projects. Also, the Assembly Committee on Ways and Means wanted to include $1 million for distribution to state libraries. Senator Raggio pointed out the "S" list includes an allocation proposed for school library books. To stay within the approved amounts the $2 million for "PWB maintenance projects" will be put on the "S" list and the Assembly would add $1 million to the "A" list for distribution to state libraries.

Senator Raggio indicated the items at the bottom of the page noted as "Above the line" are items that are proposed to be funded before funding is approved for the projects on either the "A" list or the "S" list. Those "Above the line" items will be in separate bills. Senator Coffin asked whether there had already been agreement on these two projects annotated as "Above the line." Senator Raggio replied there had been and there had also been agreement on other items. He explained some projects have been allocated partly to the "A" list and partly to the "S" list, such as the Opportunity Village proposal and the Inner City Games proposal.

Senator Raggio requested a bill draft be prepared by staff according to the "S" list for the committee to consider.

Senator Raggio recessed the meeting at 4:25 p.m. until the call of the Chair.

Senator Raggio called the meeting back to order at 6 p.m.

Senator Raggio presented gifts to staff of the Fiscal Analysis Division, Legislative Counsel Bureau, indicated his appreciation for the effort those employees put forth, and stated the committee could not function without the expertise, the experience and the capabilities the staff bring to the process.

Senator Raggio stated the committee heard testimony on A.B. 320 May 24 and May 26, 1999, and it is on the "A" list.

Senator Raggio noted the committee heard testimony on A.B. 373 earlier in this meeting.

Senator Raggio informed the committee Amendment No. 1221 had been prepared to provide the necessary funding in A.B. 472, which was discussed earlier by the committee.

Senator Raggio indicated the committee heard testimony on A.B. 663 on May 24, 1999.

Senator Raggio indicated S.B. 33 would increase the veterans’ property tax exemption, which would result in more than $700,000 loss a year in property tax revenue for counties. He pointed out the bill also has a built-in cost of living adjustment (COLA) that would be continuing. He said he would like to support the bill, but it would be inappropriate for the Legislature to do that to the counties.

Senator O’Donnell asked whether the effective date could be delayed to give counties opportunity to prepare for the property tax decrease. Senator Raggio responded that could be accomplished by addressing the measure in the next legislative session.

Senator Coffin mentioned there had been written testimony requesting a date change to conform to a federal date change of some sort. He said since the property tax change in the bill has a negative impact to local governments, perhaps the bill could be amended to include only the date change.

Senator Raggio indicated there is a cost to this bill in that it would decrease the General Fund because at the end of each fiscal year unclaimed property money is transferred to the General Fund. Senator Raggio inquired whether Senator Neal would like to suggest this bill as a high priority for the next legislative session. Senator Neal indicated he would.

Senator Raggio pointed out S.B. 91 also has a fiscal note that would require $220,000.

Senator Raggio indicated a pay increase for state employees had been passed in the Senate.

Senator Raggio indicated S.B. 142, S.B. 143, and S.B. 147 are "projects" that are already on the approved list.

Senator Raggio indicated S.B. 196 has a $2 million fiscal note. Senator Rawson noted the Governor had already signed a bill that does essentially the same thing.

Senator Raggio reminded the committee S.B. 239 would tie highway patrol salaries to an average of all other law enforcement salaries and would continue to do so in the future. He noted this would set an unfavorable precedent.

Senator Raggio reminded the committee the content of S.B. 270 is included in another bill.

Senator Raggio noted the committee had determined S.B. 299 would be exceedingly costly.

Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained Amendment No. 1218, which amends S.B. 184. He said when the Senate passed the bill, the pilot program requested by the Governor was added to allow release of prison inmates into the drug court program. He noted the bill did not also provide for supervision of those inmates by the state. The Assembly Committee on Ways and Means amended the bill to require the Division of Parole and Probation to keep track of the individuals who enter into the drug court program from prison. He said the Assembly also added requirements regarding how the Department of Prisons would pay for those individuals. The Senate version of the bill indicated the program would be paid for from savings generated because there were fewer inmates. The amendment requires the funding to be identified and transferred to the director’s office of the Department of Prisons for centralized accounting. Bills would be paid from that central system.

Senator Raggio asked Mr. Comeaux whether he had objection to the amendment. Mr. Comeaux replied he did not.

Senator Raggio indicated that when the committee closed the budget for the Aging Services Division, a new category was established to combine funding for all volunteer programs which were to be granted based on need and performance outcomes. He said that had been necessary at that point because the state had not fully funded those programs back to previous levels. He pointed out the funds were not earmarked by program when the funding was restored to the current levels. He said it is the committee’s desire to ensure programs the committee feels are essential are fully funded. He proposed a Letter of Intent indicating that in restoring funding levels, it is the intent of the committee that certain programs be fully funded and specifying those programs and amounts. He inquired whether the budget office had objections. Mr. Comeaux replied it did not.

Senator Raggio directed staff to request the Assembly Committee on Ways and Means to consider the Letter of Intent and to notify the Department of Human Resources.

Senator Raggio said this is a $20 million project and the portion agreed to from the state is $3 million. He added the Assembly and the Senate have agreed on this and it is on both approved lists.

Mark Schellinger, Superintendent, White Pine County School District, said the keystone for the White Pine County lobbying effort has been the creation of the Nevada Plan for school construction to ensure all children will have a clean, safe, and appropriate school facility no matter where they live. Mr. Schellinger indicated A.B. 597 would accomplish that.

ASSEMBLY BILL 597: Revises provisions regarding school facilities. (BDR 34-1574)

Mr. Schellinger explained this bill narrowly defines state involvement in school construction for counties at the maximum tax capacity with declining valuation and unsafe schools. He said "poorer counties" in Nevada, such as White Pine County, have maintained their buildings well, but the schools in question were built in 1909 and 1913. He testified that since White Pine County has no bonding capacity, replacement of these schools is only possible with state assistance. He stated that increasing the tax capacity in White Pine County, even to the constitutional limit of 5 percent, would not create the necessary bonding capacity.

Mr. Schellinger opined that this legislation is truly historic and is of national significance. He said no other state has taken an action like this without court intervention and it would be a historic action if it occurred. The Nevada Legislature also led the nation in creation of the Nevada Plan for operation funding, again without court intervention. He indicated appreciation for the bipartisan effort and thanked the Governor, legislative leadership, and "our own Senator McGinness and Assemblywoman de Braga" for helping with this issue.

Senator Raggio asked who would be explaining the bill, especially section 6, which would impose a tax. He also noted a fund of $16 million for construction had been established in the Capital Improvement Projects budget.

Senator Raggio asked whether section 6 relates to a sales tax. Carole A. Vilardo, Lobbyist, Nevada Taxpayers Association, replied it is the sales tax approved last legislative session in the omnibus bill A.B. 291.

Ms. Vilardo said this bill would establish a fund to assist school districts in financing capital improvements and sets out the criteria counties must meet to receive a grant from the fund. She said Lincoln County and White Pine County currently meet the criteria. In fact, she said, the same criteria, except for the sales tax provision, is also within another bill on the same issue specifically for Lincoln County. She explained Storey County would not meet the criteria because it has not reached the tax cap. She noted Storey County had not imposed the additional 1 percent sales tax, even though the county has a school that is condemned.

Regarding section 6, Ms. Vilardo said revenue from the additional sales tax, if imposed, would go into the fund described in Nevada Revised Statutes (NRS) 354.611.

Ms. Vilardo said her understanding is that if a county applies for a grant, the Department of Tax must verify the county has used all resources available, the State Public Works Board must verify the proposed school is a basic structure and not a "Taj Mahal," and the school or schools in the county must be condemned or determined unsafe. She added the State Board of Examiners considers that information and determines whether the criteria are met for a grant.

Senator Raggio attempted to summarize what the bill does. He said a fund is created for financing capital improvement and certain school districts will be able to qualify for application provided the county meets certain criteria. He asked whether the criteria are the same as in the bill for the Lincoln County school. Ms. Vilardo replied the criteria are parallel, although the criteria in A.B. 597 are more extensive. Senator Raggio asked whether section 6 would impose the tax, whether or not a county applies for a grant from the fund. Ms. Vilardo replied it would not.

Senator Raggio described his understanding of section 6. He said a tax is imposed if a county has not already added that tax and the county makes an application for a grant and that is an additional condition for the grant. Ms. Vilardo said that is correct.

Ms. Vilardo pointed out the bill requires an amendment. She directed attention to page 2, line 36 and page 5, line 20. She said the words "more than" should be deleted at both of those locations. She said A.B. 597 was also supposed to be only for counties with populations under 100,000 and that is not specified in the bill.

Senator Rawson inquired, since the end of the session was near, what the effect would be if the amendment were not made and whether it would invalidate this bill. Ms. Vilardo said imposing more than one-eighth of 1 percent would not leave any room for the counties for other infrastructure needs and the intent was to leave at least one-eighth of 1 percent.

Mr. Schellinger pointed out that section 6, subsection 2 specifies the rate of tax imposed in subsection 1 is one-eighth of 1 percent. He said Ms. Vilardo is correct that subsection 1 is in error and needs to be corrected.

Senator Raggio asked what authority Storey County currently has to raise sales tax. Ms. Vilardo replied all counties except Elko County can increase sales tax by 1.25 percent, but specific amounts are earmarked for different areas. She said Storey County could increase the sales tax one-half percent and choose to use it for schools, floodplain management, solid waste disposal, or detention facilities.

Senator Raggio explained that the amendment would have to be approved by the committee before the full Senate adopts it. He expressed that there may not be time to accomplish that before the Legislature adjourns.

Mr. Schellinger reiterated this is a critical need for students in White Pine County and Lincoln County. Senator Raggio suggested Mr. Schellinger work diligently on an amendment with the bill drafters. He emphasized that the motion, if the committee passes it, will be subject to the committee’s approval of the amendment.

Noting it is a technical amendment, Mr. Schellinger asked whether it could be dealt with by Letter of Intent. Senator Raggio replied it must be addressed in the bill.

Senator Raggio asked who was present to explain A.B. 598. Since no one came forward, Senator Raggio said this bill would be held until someone appears before the committee to explain it.

Senator Raggio recessed at 7:17 p.m. until the call of the chair.

RESPECTFULLY SUBMITTED:

Jean Laird,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE: