MINUTES OF THE meeting
of the
ASSEMBLY Committee on Education
Seventy-First Session
May 2, 2001
The Committee on Educationwas called to order at 3:54 p.m., on Wednesday, May 2, 2001. Chairman Wendell Williams presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Wendell Williams, Chairman
Ms. Bonnie Parnell, Vice Chairman
Mrs. Barbara Cegavske
Mrs. Vonne Chowning
Mr. Don Gustavson
Mrs. Ellen Koivisto
Mr. Mark Manendo
Mrs. Debbie Smith
Ms. Kathy Von Tobel
COMMITTEE MEMBERS EXCUSED:
Mrs. Sharron Angle
Mr. Tom Collins
Mrs. Marcia de Braga
GUEST LEGISLATORS PRESENT:
Senator Valerie Wiener
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Linda Corbett, Committee Manager
Mary Drake, Committee Secretary
OTHERS PRESENT:
David Perlman, Administrator, Commission on Postsecondary Education
Dr. Keith Rheault, Deputy Superintendent of Instructional, Research and Evaluative Services, Nevada Department of Education
Chairman Williams called the meeting to order as a subcommittee. He asked Senator Wiener to make the presentation on S.B. 237. Exhibit C was a copy of her testimony.
Senate Bill 237: Removes commission on postsecondary education from department of education. (BDR 34-1145)
Senator Wiener, Senatorial District 3, began the presentation by providing some history on S.B. 237. She explained the intent of the bill was to remove the Commission on Postsecondary Education from the Department of Education. Senator Wiener had served as vice chair on the Commission on Postsecondary Education from 1992 to 1996. The commission had the sole authority for licensing private, post-secondary educational institutions and the persons who operated them. She explained the commission was created in 1975 as a regulatory overseer of the private, postsecondary industry. Since its inception, the commission had provided consumer protection for more than 250,000 Nevadans who attended commission-licensed schools. Protection activities included: resolution of student complaints, providing academic records from closed schools, and relocating students to operating facilities when a school closed.
Senator Wiener continued her testimony explaining from 1975 until 1993 the commission operated as an independent agency. Due to legislative changes in 1993, the commission was moved to the newly formed State Department of Business and Industry. In 1995, the commission was then moved to the State Department of Education. Senator Wiener advised that as a result of those moves, operating costs increased without additional benefits or service to the public. The Commission on Postsecondary Education was therefore asking the Legislature to support S.B. 237, which removed the commission from the Department of Education and returned it to a self-standing, independent commission.
David Perlman, Administrator for the Commission on Postsecondary Education, spoke in support of S.B. 237. A copy of his testimony was attached as Exhibit D. He said the commission wanted to provide the best service at the least cost. The additional ancillary benefits would be restoring the commission’s authority over hiring its staff, as well as providing the necessary budgetary controls commensurate with its fiduciary responsibility.
Mr. Perlman maintained for most of the 25 years of its existence, the commission had operated effectively without being part of a department. He noted past audits reflected a high degree of professionalism and integrity, which supported the commission’s ability to operate as an independent agency. Exhibit E was a copy of a position paper on the structural changes to the commission governance. Mr. Perlman concluded his testimony by pointing out returning the commission to its independent status would result in thousands of dollars of savings to the state General Fund each year.
Dr. Keith Rheault, Deputy Superintendent with the Nevada Department of Education (NDOE), said they supported S.B. 237 and opined when the commission was added back to the NDOE, it was simply a place “to park” the commission. Dr. Rheault said since that time the commission had operated independently with no responsibility or authority changed between the commission, NDOE and the State Board of Education. Dr. Rheault explained the NDOE agreement with the federal government required that, in order for NDOE to collect indirect costs charged on federal charges, all NDOE budgets must be charged equally. In terms of the Commission on Postsecondary Education, since the commission was under NDOE, indirect costs were charged to the commission even though NDOE did not provided any services to the commission.
Dr. Keith Rheault said he did have one call of concern about S.B. 237 from the University of Nevada, Reno, inquiring if passage of the bill would affect teacher education program approvals within the state. He explained currently the State Board of Education made those approvals. He emphasized S.B. 237 would not change anything; NDOE still had full authority for the approval of the teacher education programs.
Mrs. Cegavske said she was still perplexed as to the rationale for making the commission an independent agency. She asked if the commission was originally under a different agency. Mr. Perlman said it started out originally in the late 1960s as two employees within the Department of Education who were assigned additional duties. It became a stand-alone commission in 1975. During reorganization in the early 1990s, it was absorbed by the Department of Business and Industry. As a result of legislative changes in 1995, the commission was moved back to the Department of Education.
Mrs. Cegavske inquired why the commission had been moved from the Department of Business and Industry to NDOE. Mr. Perlman said the Department of Business and Industry had a different thrust. Mrs. Cegavske said it was a “very curious” bill; she did not understand the purpose of the bill; and she had heard no compelling evidence to vote to change the structure of the commission.
Mr. Perlman said the primary purpose was to save money currently paid to the NDOE. Mrs. Cegavske asked why the commission was required to pay indirect costs to NDOE. Dr. Rheault explained that was a result of a federal agreement; all NDOE budgets, whether state or federal appropriations, were charged for indirect costs. Within the state budget, the indirect costs charged to the commission amounted to $24,000. Dr. Rheault explained that amount would now be saved because the commission would not be a part of the Department of Education.
Mrs. Cegavske asked why those costs were charged. Dr. Rheault said it was built in for additional accounting services; it was the mandatory indirect costs. Mrs. Cegavske asked if any duties were actually performed. Dr. Rheault stated since the commission operated independently with their staff, they did not require any additional services. The NDOE was forced to charge those indirect costs. He noted that would be one advantage for granting independent status to the commission. Mrs. Cegavske commented there was then no real justification for charging the commission. Dr. Rheault reiterated the agreement with the federal government treated all NDOE budgets the same, even if the service was actually provided to NDOE and not the commission.
Mrs. Cegavske asked to whom would the commission now report. Mr. Perlman explained the commission would report to the Governor, as it did now. Mrs. Cegavske asked for clarification on who the commission would now work with. She remarked passage of the bill might only add to the number of entities working independently without combining efforts and working together.
Mr. Perlman addressed the question by explaining the reason NDOE did not prepare the commission’s budget was because one-third of the commission’s budget was derived from an annual contract with the Veteran’s Administration; the federal fiscal year ran three months off of the state fiscal year. He emphasized where the commission was placed had no bearing on working with other agencies; it was a matter of cost savings.
Dr. Rheault said all the statutes governing the commission were in NRS 394. The statutes were very specific about the purpose of the commission; there was no overlap with the NDOE or the Department of Business and Industry. The Commission on Postsecondary Education ran the private postsecondary school educational industry. The commission would perform the identical service, no matter whom they were attached to. Not being attached would save the indirect cost charge.
Mrs. Cegavske said part of the problem she saw was there was no cooperation; NDOE and the commission did not actually work together. She said she could not see the asset to doing this.
Chairman Williams said one of the points made in the testimony was $24,000 would be saved. Additionally, the referral services would remain the same without the $24,000 cost. He asked if there was any advantage to staying together.
Mr. Perlman answered there was no correlation between public education and private, postsecondary education. The range of the commission’s control went from dog grooming to the University of Phoenix. The commission did work closely with NDOE in regard to teacher education. Chairman Williams asked for clarification that the interaction would continue even without the $24,000. Mr. Perlman said that was correct. Chairman Williams said that sounded to him like a good reason to separate. He asked Mr. Perlman if the commission would continue to be audited if the bill passed. He confirmed it would.
Ms. Von Tobel asked if under the Governor’s Budget there would be a reduction of $24,000 if the bill passed. Mr. Perlman said if the bill passed, the $24,000 would be removed from the commission budget and revert back to the state General Fund. The state would then save $24,000 a year.
Ms. Von Tobel asked Mr. Perlman if he was aware of the closure of a flight school in North Las Vegas. She said a constituent had sought her help getting his tuition reimbursed. Mr. Perlman said statute precluded them from licensing schools already licensed by the federal government; the commission had no jurisdiction over that particular situation.
Senator Wiener concluded the testimony on S.B. 237 by commenting NRS 394.383 created the Commission on Postsecondary Education as an independent agency; she was unaware of the politics that moved it under the Department of Business and Industry and then under the Department of Education. She said the cost savings of $48,000 per biennium was a strong incentive for passage of the bill, particularly since the commission would provide the same level of service to the public.
Chairman Williams said that paralleled his thinking about the bill; it was cost effective and the auditing component remained the same.
Chairman Williams then closed the hearing on S.B. 237 and opened the hearing on S.B. 114. Mr. Perlman made the presentation in support of S.B. 114. A copy of his testimony was attached as Exhibit F.
Senate Bill 114: Revises provisions governing bonding requirements of certain postsecondary educational institutions. (BDR 34-399)
Mr. Perlman testified on S.B. 114 stating the Commission on Postsecondary Education supported the legislation because it allowed the commission to set the surety bond amount for private schools at a level commensurate with risks, which would ultimately protect the financial well being of students.
Mr. Perlman explained the current level of $10,000 was inadequate. The average cost of a vocational program was $3,300, and more than 18,000 students a year enrolled in those programs. Mr. Perlman described the current approach to the surety bond as a “one-size-fits-all” approach, which did not take into consideration the broad differences in school operations that directly affected the risk.
Mr. Perlman continued another significant factor was the training demands brought on by rapid changes in the job market. As an example, he stated that less than four years ago there were only five schools offering short-term, low-cost computer training. He noted today there were more than 20 schools offering long-term, high-cost programs designed to meet industry certifications. Most of those programs cost approximately $15,000. S.B. 114 would allow the commission to react to that and other issues directly affecting risks since commission-licensed schools were susceptible to failure. Those schools generally closed due to lack of financial assets leaving the students without the ability to finish their education.
Mr. Perlman ended his testimony by saying support for S.B. 114 would provide for the financial well being of students when those private schools closed.
Mrs. Von Tobel asked in what area most of the private schools were located. Mr. Perlman said about 70 to 75 percent of the schools were in Southern Nevada. She asked where the commission’s offices were located. Mr. Perlman answered Las Vegas. She asked how many individuals served on the commission. Mr. Perlman said there were seven commissioners.
Chairman Williams said he felt it was a good idea to have the ability to ask for a higher bond since some of the private schools literally closed overnight, leaving the students “high and dry.” Chairman Williams also asked the record reflect that during the presentation of S.B. 114 the committee became a quorum.
Chairman Williams closed the hearing on S.B. 114 and said he would accept a motion.
ASSEMBLYWOMAN VON TOBEL MOVED TO DO PASS S.B. 114.
ASSEMBLYWOMAN PARNELL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY. (COLLINS, CHOWNING, DE BRAGA ABSENT.)
Chairman Williams said he would not take action on S.B. 237 and allow Mrs. Cegavske more time to review the bill and talk with the bill sponsors.
Policy Analyst Susan Scholley announced there would be a joint meeting of the Assembly Committee on Judiciary and the Assembly Committee on Education on May 9 at 3:45 p.m. to hear S.B. 291 and S.B. 339. Both bills were concurrently referred; S.B. 291 was within the jurisdiction of Committee on Education and S.B. 339 was within the jurisdiction of the Judiciary Committee.
There being no other business before the committee, Chairman Williams closed the hearing at 4:20 p.m.
RESPECTFULLY SUBMITTED:
Mary Drake
Committee Secretary
APPROVED BY:
Assemblyman Wendell Williams, Chairman
DATE: