ASSEMBLY COMMITTEE ON WAYS AND MEANS

MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

Seventy-First Session

February 19, 2001

The Committee on Ways and Meanswas called to order at 9:15 a.m. on Monday, February 19, 2001. Chairman Morse Arberry Jr. presided in Room 3137 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. Morse Arberry Jr., Chairman

Ms. Chris Giunchigliani, Vice Chairwoman

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph Dini, Jr.

Mr. David Goldwater

Mr. Lynn Hettrick

Ms. Sheila Leslie

Mr. John Marvel

Mr. David Parks

Mr. Richard D. Perkins

Ms. Sandra Tiffany

COMMITTEE MEMBERS ABSENT:

None

STAFF MEMBERS PRESENT:

Mark Stevens, Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Mindy Braun, Program Analyst

Jim Rodriguez, Program Analyst

Bob Atkinson, Program Analyst

Kathryn Fosnaugh, Committee Secretary

ELECTED OFFICIALS

HIGH LEVEL NUCLEAR WASTE BUDGET PAGE ELECTED 8

Chairman Arberry asked to hear the budget for High Level Nuclear Waste (101-1005).

Robert Loux, Executive Director, NWPO, introduced himself then discussed his handouts, Exhibit C, Exhibit D, and Exhibit E. Mr. Loux explained that in addition to Yucca Mountain issues, the agency was involved in half a dozen other nuclear waste related activities that were low-level waste (LLW) issues. He said he brought those activities up because in many instances they impacted the budget of other agencies within the state.

Mr. Loux discussed the first program (Exhibit C), explaining that, at the Governor's request, they had participated in coordinating negotiations with the Department of Energy's (DOE) Nevada 0perations Office for the Agreement in Principles. The negotiations included three other state agencies, the Health Division, the Division of Emergency Management, and the Division of Environmental Protection. The Agreement in Principles provided funds to all participating agencies for oversight of low-level nuclear waste disposal activities at the Nevada Test Site and other related activities. Mr. Loux said the DOE had previously been playing one agency against the other, but with the help of the Nevada High-Level Nuclear Waste Project Office (NWPO) negotiations proceeded more smoothly.

Mr. Loux explained that the second program (Exhibit C) involved coordinating the DOE's Nevada Operations Office routes that would be used for LLW shipments going to the Nevada Test Site from various DOE facilities. Mr. Loux directed the committee's attention to the handouts he had distributed, and discussed a letter from the Nevada Operations Office, which listed all the routes in Nevada, primarily in southern Nevada and the number of shipments (Exhibit D). From October 2000 to December 2000, 134 LLW shipments were taken to the Nevada Test Site and of those, eight shipments went through the Las Vegas valley, including one that went over the Hoover Dam. The NWPO had been trying to avoid this situation and that was why they had been participating in negotiations with the Department of Energy's (DOE) Nevada Operations Office. The DOE's Nevada Operations Office had said that actions were being taken so that no further shipments would go through the Las Vegas valley or over the Hoover Dam.

Mr. Loux said that the third program (Exhibit C) involved negotiating with the DOE's Nevada Operations Office for additional funding, on behalf of the State Health Division, for the Cancer and Birth Defects registry. He was hopeful that an announcement would be made in a week or so that an award would be given to the Health Division for funding of those activities.

Mr. Loux stated that the fourth program (Exhibit C) involved the coordination of the state's planning effort for eventual shipments of transuranic wastes from the Nevada Test Site to the Waste Isolation Pilot Plant (WIPP) in Carlsbad, New Mexico. He said that 80 or 90 shipments were scheduled to leave Nevada in November 2001. The program was funded mostly by a grant from the Western Governor's Association to the NWPO, and they, in turn, pass the funds on to other affected state agencies. The affected agencies included the Health Division, Division of Emergency Management, and Nevada Highway Patrol, who were also involved with the planning and training effort associated with transportation issues.

Mr. Loux explained the last program (Exhibit C) was to help coordinate the state's oversight of the shipments of foreign reactor fuel from Concord California, originating from other places in the world, to the Idaho National Engineering Laboratory in Idaho Falls, Idaho. A previous train shipment passed through northern Nevada during 1998. There would probably be three to four additional shipments occurring during 2002 to 2004. Mr. Loux said he was not sure of an exact date for future shipments. Other Nevada agencies involved with the program were the Health Division, the Division of Emergency Management, the Forestry Division, the Public Utility Commission, and the Nevada National Guard.

Mr. Loux continued and explained the Yucca Mountain Project Decision Schedule, (Exhibit E). He said that time was getting closer for some decision to be made by the DOE in regard to Yucca Mountain. He said that Exhibit E provided the Ways and Means Committee with the actual statutory decisions, and prerequisites to those decisions, that had to be met before the DOE could actually recommend a site. The DOE had currently scheduled July 2001 for the actual recommendation of a site, but most recent events seemed to indicate that the decision would be postponed to either later this calendar year or early next year. Mr. Loux discussed two prerequisites relevant to the committee that had to be met prior to recommending the site decision. One was the DOE must inform both the Governor and the legislature of their intent to recommend the site; the other prerequisite was there must be a public hearing prior to the recommendation. The DOE must also allow the Governor and the legislature the opportunity to review the recommendation, along with the opportunity to make comments, etc. The DOE must deal with the outcome of the current inspector general's investigation and issue a final environmental impact statement prior to recommending a site as well.

Mr. Marvel asked if the $5 million one-shot appropriation referenced by the Governor in his State of the State Address would be used in any of the public hearings, or be designated to Yucca Mountain. Mr. Loux answered that he didn't think there was a relationship to those events at all. He said the Governor was proposing a fund that would be available for a variety of purposes, including emergency legal needs and a national awareness campaign in other states to talk about transportation of nuclear waste. He said he didn't think there was a connection between the two.

Mr. Marvel asked if the agency had done all the scientific research necessary to determine if Yucca Mountain was a safe or unsafe storage area. Mr. Loux responded, saying that they were still doing one last piece of research. He said the DOE had virtually come around to agreeing with the state about the physical conditions of the site. The DOE believed that they had to have 95 percent of Yucca Mountain's performance attributed to the metal container around the waste. Less than 5 percent of the overall systems isolation capability of isolating the waste was due to the geology, hydrology, or any other aspects at the physical geological site. Mr. Loux said that the DOE believed that in order to make Yucca Mountain work, they had to have a super metal container around the waste that was believed to last from 11 to 50,000 years underground.

Mr. Loux explained that the NWPO was working on some corrosion testing on the metal container, something the DOE had not done. Those results indicated that the metal containers would last around 400 to 500 years, and not the projected 11 to 50,000 years that the DOE had suggested. The NWPO planned on doing more work to try to get more definite figures. He said the important point here was that the DOE cannot say that the site was now better, since it had already been declared not to be a good site. Mr. Loux said that if it could be shown that the metal containers do not work, the DOE may be obligated to find some other metal that would last longer underground. He said he was uncertain if there was a metal that would serve that function.

Mr. Marvel asked what other options the DOE had if Nevada was not a candidate for the waste disposal.

Mr. Loux said that there were no other options, and that the DOE would have to deal with the lawsuits that utilities had filed in regard to missing the date of waste receipt at the utility sites. The DOE had proposed to possibly pay the utility companies for their reactor storage costs. Most of the utilities had refused payments to enable them to keep the pressure on Yucca Mountain. At some point in time the DOE was going to have to make a decision in regard to Yucca Mountain. He said that if the current scientific data was used, and with a "level playing field," the state felt pretty confident that it would be successful. Mr. Loux questioned whether there would be a "level playing field."

Mr. Marvel asked who made the determination. Mr. Loux responded that the decision about Yucca Mountain would be made late in 2001 or early in 2002. At that time legal issues for Nevada, such as challenging the rule making and challenging the final environmental impact statement would be pursued. Also, the technical suitability of the site would be a very important part of all the lawsuits as well as Nevada's notice of disapproval or veto. And lastly, the technical suitability would be brought up in the licensing proceeding before the Nuclear Regulatory Commission.

Mr. Marvel asked if currently there was sufficient storage at the various reactor sites. Mr. Loux answered that some spent fuel was being stored at reactor sites, and because some areas had run out of room in the pools, dry storage was being used. Mr. Marvel asked if there was any storage of waste at Yucca Mountain and Mr. Loux said no.

Ms. Giunchigliani said that earlier, on National Public Radio (NPR), the Association for State Highway Transportation Officers' (ASHTO) new transportation director was mentioning that he thought the casks were safe to transport and that there was no problem with moving the waste across the nation's highways, including Las Vegas or the rest of Nevada. Ms. Giunchigliani asked what the agency was doing to deal with that way of thinking.

Mr. Loux responded that one of the things the agency had done was to ask Tom Stevens, a member of the ASHTO, to see if the ASHTO would host a pro/con panel at one of their national meetings. Mr. Loux said the agency believed there was ample reason for concern and not optimism. The containers mentioned would not be used in the Yucca Mountain campaign, as there were only 12 or so transportation containers anywhere. The DOE had done scale model tests of the containers, and the Sandia National Laboratory had produced films showing the containers being crashed into trains; the tests were not used for safety purposes, rather for computer validation. Mr. Loux said it was a misuse of the films to claim they were made for safety purposes. The DOE, however, was using the films for that purpose. It would be easy for someone who had not done an in-depth study of this issue to be influenced. More than 2,000 or 3,000 shipments had been done in the country, but there would be more than that number in the first year of a 35-year campaign so there was a great deal of experience to be gained and the past was not a good measure of the future.

Ms. Giunchigliani asked about the LLW being transported through Las Vegas and how it was going to be stopped. Mr. Loux said that primarily it would be stopped because of the Nevada Operations Office, city councils, county commissions, the Governor and delegations leaning on the DOE to have those shipments stopped. Mr. Loux referred to Kathleen Carlson's letter (Exhibit D) which said, "that the Nevada Operations Office had discussed the matter with the generating sites and indicated that failure to initiate corrective action may result in the Nevada Test Site (NTS) refusing to accept future waste shipments for disposal."

Ms. Giunchigliani asked if the NWPO was notified when shipments would be coming into Nevada. Mr. Loux answered that they were not notified in advance but received a quarterly report after the fact. The shipments were low-level waste; therefore prior notification was not a requirement.

Ms. Giunchigliani asked how they would change the requirements for notification regarding low-level waste transport and Mr. Loux said that it was a change that would have to come from Congress, or possibly the Federal Department of Transportation.

Ms. Giunchigliani asked if there would be some updates of the performance indicators in regard to technical reports. She asked if they were doing much in that realm. Mr. Loux said they were doing some technical activities, for example, the corrosion work on the casks and also some reports on the upwelling of water theory that UNLV recently completed. He said that the agency would be issuing technical reports, socio-economic reports, transportation reports, etc., as they were still relevant.

Ms. Giunchigliani asked if any new reporting would be needed. Mr. Loux said no, because the program was going to be shifting gears in the next year to 18 months from a site study to more of a legal or technical arena.

Ms. Giunchigliani asked that since the scientific studies were essentially completed, would the agency still qualify for federal cost reimbursement. Mr. Loux answered that a provision in the Nuclear Waste Policy Act indicated that one year after the recommendation was made, funding would end. Mr. Loux said that he was not sure how the state would deal with that issue, but possibly the Governor's proposed one-shot appropriation plan was a possibility, but the possibility of losing funding had not been addressed yet, since it would be awhile before that happened.

Ms. Giunchigliani, to clarify, asked, since the term "scientific" was used in the document, would Nevada still qualify for the federal funding once the changes in direction took place. Mr. Loux replied yes, the focus would be directed toward the legal side instead of scientific studies, and since the DOE had basically conceded that the geologic and hydrologic studies were correct, the agency had more of an oversight presense in those arenas and would not be doing any new work on those issues. Mr. Loux replied that most of the agency's work would be with the corrosion testing, etc. He said, in answer to Ms. Giunchigliani's question, that there was still scientific work in progress.

Chairman Arberry asked Mr. Loux to comment in regard to the legislative audit done on the NWPO. Chairman Arberry further commented that the audit identified about $50,000 in federal reimbursement.

Mr. Loux explained that the audit results showed that the NWPO paid $50,000 to the technical contractors from the state contingency fund money but the money could have been paid with federal money. Mr. Loux explained the reason this was done was because when the contingency money was received, they did not have any federal money. The agency assumed that the Interim Finance Committee (IFC) funded their program so that the agency could continue to function until they saw if they were to receive any federal funding. The agency did not know about the new federal money until the following October, and if they had not reimbursed the technical contractors out of the contingency fund, the technical program would have been halted from around July 1 until October, November or December. They used some state money to pay contractors to extend federal money that they had on hand into the following fiscal year. Mr. Loux said that it was an interpretation the NWPO made as to the intent of the IFC when the money was given. Mr. Loux stated that the legislative auditor must have disagreed with the Nuclear Waste Project’s Office's interpretation, and the NWPO had accepted the recommendation of the auditor and had prepared a corrective action plan.

Chairman Arberry asked if the NWPO was going to go after the money. Mr. Loux stated that they had $2.5 million of federal money, but the problem was there were restrictions on the use of the federal money, for example, it could not be used for salaries or expenses for state employees. Mr. Loux said none of the funds that they requested could be used to reimburse the state expenses. He said they did revert $120,000 of state money last year that was offset with the federal money when they paid back the contracts.

Chairman Arberry again asked if the NWPO was going after the money. Mr. Loux answered that in the current year they had received $2.5 million in federal funds. Mr. Loux said he did not believe that any of that money could be used legally for reimbursement of the money, so the answer was no.

Mrs. Chowning said that the report (Exhibit D) was very disturbing, as it read that eight shipments "inadvertently" went through I-15 and US-95 Interchange, and one went across the Hoover Dam. Mrs. Chowning reiterated that this was from October through December and that eight shipments went through the Spaghetti Bowl of Las Vegas. She said this was low-level waste, and the DOE was supposed to have oversight of the shipments, and yet, eight shipments went through Las Vegas in one quarter. Mrs. Chowning pointed out that the system was not perfect and this should serve as a warning to the rest of the country. With high-level waste shipment, Nevada was to be notified ahead of time, and Nevada was also to be notified about the low-level shipments, and this was not supposed to happen. Mrs. Chowning said, however, that it had happened and it all boiled down to the fact that Nevada could not trust the DOE.

Mr. Hettrick commented that he appreciated that the money from the Federal Fund could not be reimbursed, but he was concerned that the NWPO felt they had to follow the rules on the federal money, but not the state money. Mr. Hettrick said that was the kind of thing that bothered the Ways and Means Committee. He said the audit showed $15,000 spent in supplies and $50,000 spent on a contract that most likely should not have been paid out of the General Fund. He said a letter went with the fund that indicated what could be paid for. Mr. Hettrick encouraged Mr. Loux to not disregard the rules regarding state money again.

Mr. Loux stated that he appreciated Mr. Hettrick's concern, and reiterated that at the time the money was spent, they felt they were within the intent of the letter. He thought the intent was to keep the program going until new federal money was received. He said that obviously there were two interpretations of the intent of the money, and most likely the committee's interpretation was the correct one. Mr. Loux said that the money was not spent deliberately incorrectly and that it would not happen again.

Mr. Loux said that because of the conditional restrictions of the use of the federal money, the agency had requested three revenue "streams" to fund their activities. They were requesting $1.1 million out of the General Fund. The language in the Appropriations Act that gave them the federal money indicated that none of the funds appropriated could be used for salaries or expenses of state employees. In addition, the DOE had a very narrow interpretation of the use of the words "scientific oversight" to mean hard-core science, including geology, hydrology, engineering, and metallurgic work. They did not consider transportation or socio-economic impact to be "science," so those activities could not be funded out of federal money. Therefore, they were asking for $360,000 out of the State Highway Trust Fund to fund transportation work that they were doing, and wanted to continue. Mr. Loux stated that they were also requesting $2.5 million, which was a transfer from the Division of Emergency Management.

Mr. Loux reminded the committee that most of the work done by the Nuclear Waste Project Office was done by contract. The contract areas were separated into three categories, federal, state and transportation. Mr. Loux explained the federal contract, $2.5 million, was funding three or four major activities, including $1.5 million for corrosion testing of the metal containers, since the NWPO felt that the Yucca Mountain suitability issue hinged on whether the containers would hold up. The NWPO would continue some oversight work in geology, hydrology and volcanic work. They would also be concluding some work with Russian scientists in regard to the upwelling water theory, previously reviewed by the UNLV Joint Committee approximately a week prior to February 19, 2001. The NWPO would be completing a final report soon, and that would be the final expenditure for that work.

Mr. Loux said the state contracts of $340,000 funded two or three areas that could not be funded with federal money. One activity was the wrap up of the socio-economic analysis. If the Secretary of Energy recommended Yucca Mountain to the President of the United States, Nevada had an obligation to submit a report documenting the results of the socio-economic impact on Nevada, privately and publicly. The report would be completed soon, as it might be needed by July 2001. Mr. Loux said some of the funding would be going toward legal research, rail issues, and some environmental work.

Mr. Loux explained that the budget included $375,900 out of the Highway Trust Fund, each fiscal year, to look at highway transportation issues, which included looking at casks, highway conditions, routes, heavy haul trucks, etc.

Mr. Loux said the $125,000 from the Western Governor's Association was a pass-through fund. The Western Governor's Association received the money from the DOE and the money was passed through to the NWPO, who then passed the money to the Department of Health, the Department of Emergency Management, and the Highway Patrol, for planning of the eventual transuranic shipments from the Nevada Test Site to Carlsbad, New Mexico. Those shipments would occur during both years of the biennium.

Mr. Loux explained that the balance of the budget was identical to almost every year in the past, including salary money, etc.

Chairman Arberry asked what role the Attorney General had in regard to the $125,000 from the Western Governor's Association. Mr. Loux explained that the Attorney General and the NWPO had a joint contract with a law firm in San Francisco for $450,000, and the Attorney General's office provided some supervision of the contract. The law office was looking at some of the legal issues that Nevada would be facing possibly as early as this summer, but probably not until the fall. The law office would be looking at the adequacy of the DOE's environmental impact statement, and the adequacy of the DOE's proposed rule making, such as changing the rules for Yucca Mountain.

Mr. Loux said they had requested approximately $13,000 each for the in-state and the out-of-state travel for each year, and $127,000 in operating expenses. Mr. Loux explained the $37,000 and $35,000 requested each year was for information services related equipment including acquiring a new phone system. The NWPO was down to seven staff and one clerical person and frequently the phones were not manned. Mr. Loux felt that a voice mail system would be beneficial.

Chairman Arberry asked what the basis was for the $5 million one-time appropriation that the Governor had requested. Mr. Loux explained that the money was not for operating costs and not for use by the NWPO. Mr. Loux said that the Governor had seen a need for the state to become more aggressive in outreach to inform communities, cities, and elected leaders in other areas of the country about the transportation and shipping issues involved in transport of nuclear waste to Yucca Mountain, if and when that occurred. The NWPO had previously gone out with federal money, holding press conferences as well as other related information activities, throughout the country. This had resulted in the agency's loss of federal money. Mr. Loux suspected that the congressional districts where the activities were held had not received the information well. The process had been effective and resulted in activity that included letters to the editor and letters to Congress about constituent concerns. Mr. Loux said that if the Governor's plan was approved, a majority of the $5 million would be used to create a national outreach program to make other areas aware of the transportation of nuclear waste issues. The program should create a greater awareness, especially along "key transportation corridors" where the nuclear waste would be transported. The hope was to level off the enthusiasm of Congress so that they would not pass new legislation or automatically accept the DOE's recommendations of Yucca Mountain or the nuclear world. Mr. Loux said the Governor was preparing a description of the one-shot appropriation and someone from his office would be presenting it to the committee when the issue came up.

Mrs. Cegavske thanked Mr. Loux for his previous participation and assistance in helping her craft some language to make a presentation to Women in Government, a national committee comprised of other women legislators across the nation, explaining why Nevada did not want the nuclear storage at Yucca Mountain. Mrs. Cegavske said the other legislators were shocked at the reasons and explanations that were given. Other Nevada legislators that attended the meeting in Utah were Assemblywoman Tiffany and Senator O'Connell. Mrs. Cegavske said another interesting event was, two years ago, when she went and talked to the Congress and the Senate in Washington D.C. and discussed the issues that Nevada had and reasons for not wanting nuclear waste at Yucca Mountain, none of the people she talked to knew that Yucca Mountain was so close to Las Vegas, none of them understood that the transportation of nuclear waste would go through their own states, and the same responses were heard again and again.

Mrs. Cegavske asked Mr. Loux who was educating the people who were making the decisions regarding Yucca Mountain, and explaining that Nevada did not want the nuclear waste in their backyard, and that the transport of the nuclear waste would be in their backyard. Mrs. Cegavske explained that there was no compensation to a state when the nuclear waste was transported through that state. If an accident occurred, it would be the state's responsibility to pay for the cleanup. She said no one had been explaining this to the states.

Mr. Loux said the primary people talking to Washington D.C. were from the nuclear industry. The nuclear industry had spent approximately $20 to $30 million a year. The NWPO was doing what they could, but also were hearing from people that they were unaware of the issues. Mr. Loux said most did not read up on what they were voting on, rather, they were depending on the industry information, and they were hearing from the industry that this was a good thing to vote for. Some of the work that the NWPO had done in the past had an impact. Mr. Loux said he felt the Governor's plan was aimed at education and was to do what Mrs. Cegavske had done in Salt Lake City, Utah, at the Women in Government conference and on Capitol Hill. Although the $5 million was a large sum, it was a small amount for the purpose of educating other states, and he was hoping to challenge businesses throughout the state to match funds so that the program could be expanded. Mr. Loux continued, saying the transportation issue worked and that the "other side" did not want to talk about it because they knew the issue worked as well. Although Mr. Loux did not think that there would be an instant turnaround and the whole Yucca Mountain program would be canceled immediately, he felt that with the right amount of money and the right kind of plan, the playing field would be more level. Mr. Loux said that with a level playing field, Nevada could be successful with the scientific issue as well as transportation issues such as property values, etc.

Ms. Leslie said she was disturbed over Mr. Loux's statement that he was "assuming the Governor's plan" and he "thought the Governor's plan," and asked who was going to be in charge of the $5 million, the NWPO or the Governor's Office. Mr. Loux explained the Governor's Office would be handling the money.

Ms. Leslie asked what role the NWPO would then have. Mr. Loux said he thought the Governor was proposing the Commission on Nuclear Projects, which serves the NWPO and also as advisory to the Governor and the legislature, would serve as a stirring committee. The commission would have the task of putting together a plan or framework. Ms. Leslie asked when the committee would know and Mr. Loux replied that within the next week or two the one-shot budget plans would be brought forward.

Ms. Leslie asked if there had been any discussion for public involvement to help determine how the money would be spent. She gave as an example, Citizen's Alert, which had been involved for decades on the nuclear waste issue. She wanted to know how this type of group might be involved in deciding how the money would be used, or if all the money would be going to an advertising contract. Mr. Loux said that the Governor had told him that the money was not going to be a lump sum for advertising. The money was not for an advertising campaign, but would be used as a combination of on-the-ground activities, press conferences, rallies, and other kinds of things, along with national public interest groups. Mr. Loux confirmed that the committee would get the Governor's proposal in a couple of weeks.

Ms. Leslie asked if Mr. Loux was aware of the $10 million effort in Las Vegas and the Save Nevada organization, as well as the 501 C3 that the business community was trying to set up, and if the efforts were going to be coordinated. Mr. Loux said he was hopeful that they would "marry up" their efforts in the future, and Steve Klubeck, a businessman from Las Vegas involved with the Save Nevada organization, had indicated to Mr. Loux that most of the people involved with the organization believed that the right thing to do was to combine their efforts with the Governor. Mr. Loux also felt that would make outside contributions more likely. Ms. Leslie stated that she wanted more details and wanted to make sure that the public was involved in bringing forth ideas so that they had an effective campaign and so that the money would not be wasted.

Mr. Loux agreed with Ms. Leslie, saying the Commission on Nuclear Projects had worked with NEARS and Public Citizen and had some discussion with Citizen's Alert and the Nuclear Waste Task Force. He said the commission had plans to have more public meetings with the business community and public interest groups. Ms. Leslie asked that Mr. Loux be sure to involve the public during the process and he agreed.

Mr. Goldwater asked what level of participation and commitment had the local governments provided. Mr. Loux said the Governor had indicated to him on the night of the State of the State Address, when he announced the one-shot plan, the chairman of the Clark County Commission had indicated to the Governor that he would contribute county funds to the Governor's fund and could also contribute some money to the Klubeck effort as well. Mr. Loux said that more recently he had been talking to the mayor and his staff regarding participation.

Mr. Goldwater asked if any of the people had made any commitments or had they reneged on giving money. Mr. Loux said no one had reneged, but they had not given any money as yet.

Ms. Tiffany asked Mr. Loux if the office knew when the report from the Department of Energy (DOE) would get to Washington D.C. Mr. Loux said that the situation would be triggered by the Secretary of Energy's recommendation of the site to the President. The recommendation was scheduled to occur in July 2001, but now appeared it would probably be later in the calendar year or early next year. He said the NWPO was trying to be ready, and would be ready in July if it did happen, but another six to eight months to finalize their report would be helpful.

Ms. Tiffany then asked if, once the report went to the Secretary of Energy and then to the President, and if the recommendation was a yes, would a special session be needed to address the issue. Mr. Loux said that the Commission on Nuclear Projects recommended that the legislature pass a resolution as an "if or when kind of thing." Mr. Loux said in the Nuclear Waste Policy Act the role of the Governor and the legislature was not clear. In two places of the act it says "The Governor and the legislature shall issue a notice of disapproval or veto" and in several other places it says "the Governor or the legislature" so it could be read either way. Mr. Loux felt that the commission's thought, to protect the Governor's Office and the legislature, was to pass a resolution in case this occurred when not in session. Ms. Tiffany asked if the Notice of Disapproval had been created, and Mr. Loux said that he thought the resolution was being drafted. Ms. Tiffany asked who requested the resolution and Mr. Loux said that the commission made the recommendation and he thought Senator Titus was working on it. He agreed that if the resolution was passed then there would probably not be a need for a special session.

Included, for the record, by Senator William J. Raggio was a letter from the Attorney General dated April 17, 2001, in regard to Nuclear Waste Litigation (Exhibit F).

ELECTED OFFICIALS

OFFICE OF THE CONSUMER HEALTH ASSISTANCE BUDGET PAGE ELECTED 13

Chairman Arberry introduced Budget Account 101-1003.

Laurie England, Director, Governor's Office of Consumer Health Assistance, introduced herself and then introduced Mary Lushina, Deputy Director, and Tracy Raxter, Budget Analyst.

Ms. England informed the committee that the Office of the Consumer Health Assistance was created as a result of S.B. 37 of the Seventieth Legislative Session, which made various changes regarding industrial insurance. It was created under the Governor's Office and its mission was twofold. One mission was to assist individuals in regard to health care concerns and health plan issues, inclusive of all payer mechanisms and Worker's Compensation. The second mission was to provide a database that reported to the legislature and the Governor information regarding the types of cases handled, the methods of resolution, and the time frames for each case.

Ms. England said that the issue of health care was important to everyone. She said that with her years of experience she had determined that what we had in regard to health care, insurance, etc., was a myriad of systems. She said there was a tremendous difference between payer mechanisms in regard to laws, regulations, history, benefits, coverage, etc. She said if a ball of string was tossed between three or four legislators in terms of who was a provider, an additional provider, a specialist, a payer, a utilization entity, an adjudicator, and the consumer, the string would become a tangled web. She said she had found that over the course of the growth of health care, there was a tremendous amount of confusion for the consumer. Ms. England said she had surveyed approximately 30 other states during the last year and had yet to find anything close to the office she represented. It was her honor to be director of the office, but felt credit should also be given to the legislature and the Governor for establishing the office. She said she was proud to be the creator of the department, along with other state officials and constituents with whom she had discussed the office.

Ms. England said the office was a one-stop office that allowed people to contact the office needed and, hopefully, was easy to locate. She hoped to create better awareness of the office in the future. She said that the Office of Consumer Health Assistance assisted individuals, dealt with their issues, documented what was done and reported what was done to the legislature and the Governor. Ms. England said that she had posted the Executive 2000 Report on the agency's Web site for review by the committee. She referred to the copy she was holding to show the committee what they could find on the Web site. Ms. England said she had documented the history of the Patient's Bill of Rights' issue, and other information for the reader, including some emotional issues, politics, who was doing what, what were the issues, etc. The Web site gave an outlet to get the facts out to the public. Ms. England said she had traveled throughout the state during the year and the issues that were statewide were also nationwide. One of the things that was unique about The Consumer Health Assistance Office in Nevada was that they dealt with whatever the payer mechanism was, be it Medicare, a Medicare risk, Medicaid, Nevada Checkup, HMOs, indemnity carriers, PPOs, and self-funded union trusts.

Ms. England explained that the office worked collaboratively with various agencies, statewide and locally. She felt that health care was a local issue, and it was somewhat different from one area to another. She had trained and staffed her agency to understand the community where they worked, as well as what resources were available in their area to help people with their insurance, health plan, or other insurance issues.

Chairman Arberry asked Ms. England to discuss the budget issues, and Ms. England complied. She said that she wanted to highlight the recommendation of the Governor's Stirring Committee to Conduct a Fundamental Review of State Government, which was for the Commission for Hospital Patients and the functions of that office, to be incorporated into the Office of Consumer Health Assistance. Ms. England then directed the committee to the enhancement portion of the budget. The office had requested taking the two present positions from the Office for Hospital Patients and creating one ombudsman position.

Ms. England explained that since the Governor's Office of Consumer Health Assistance had not been created until the end of the 1999 session, basically, no funding had been allotted. She stated that the money allotted for rent for the Commission for Hospital Patients' offices, would be used to maintain the southern Nevada office, thus giving two offices to work from, one in northern Nevada and one in southern Nevada.

Mrs. Chowning stated that the Commission for Hospital Patients had been very helpful to consumers. She said she did not see how the consolidation would make things more efficient. Mrs. Chowning said that although there would be a savings of $19,000 realized by eliminating the personnel positions, there would be additional operating, printing, office rent, and technology cost, and so the consolidation would not appear to save money.

Ms. England said that the idea was not to do away with the functions of the office, but to combine the offices to enable meeting a larger scope of issues for the consumer. She said that people were often referred back and forth between the two agencies, and it would only be a matter of time to see that it was more efficient to have the offices combined. Ms. England told the committee that the enabling legislation for the Office for Consumer Health Assistance stated "will assist the consumer with their health issues" and the two offices would both combine well under this legislation. Ms. England explained that two and one-half positions were to be eliminated, and a new position would be created. The new position would help staff members with northern and southern issues.

Mr. Marvel gave an example of a constituent that was helped with scheduling a hospital visit, due to Ms. England's office, and Mr. Marvel thanked her for her work.

Mr. Raxter explained that the increase to the budget, in relation to the consolidation, was $5,000 for increased outreach efforts, as well as an increase for rent. The agency was currently occupying space that was part of the Governor's Office in the Las Vegas area, and the plan was to acquire separate office space.

Mrs. Chowning asked if the money was still coming from the assessment to the hospitals and Mr. Raxter answered yes.

Mr. Hettrick commended the office and discussed a constituent that had a problem getting approval for surgery. After being referred by Mr. Hettrick to the Office of Consumer Health Assistance, the constituent said after she contacted the office, she had approval for surgery within two hours. Mr. Hettrick said he felt the consolidation would be a good idea.

Ms. Tiffany said she had a similar experience. She had a constituent who did not like his doctor and the agency was able to help him. Ms. Tiffany asked if there was any way of knowing how many people called the office, requests the callers had, the outcome of the requests, and if there was any cost savings for the constituents or the state. Ms. England replied that there was an extensive report on the Web site. Anyone who had an issue or complaint was listed on that publication. Ms. England said that any part of the Web site could be printed. Ms. Tiffany asked if there was a complaint system on the Web site, and Ms. England said yes, including forms that could be downloaded, and an interactive e-mail program. Ms. England said the agency was also focusing on many aspects of outreach to include seniors, civic areas, and minorities. The Web site was available in Spanish as well as English.

Ms. England stated that the agency had begun to identify saving costs, by case, to the consumer. Last year the savings were over $300,000.

Mrs. Cegavske also commended Ms. England and her work with the Alzheimer's

Homes, in senior areas, etc., in the Las Vegas area and said that the office had been proactive as well as speedy in their responses. Mrs. Cegavske asked if the in-state travel budget requested was enough to be able to continue their work in southern Nevada. Ms. England said that the projections were conservative, but said she felt that the amount requested would meet the needs of the next biennium.

Ms. Giunchigliani questioned why the funding from worker's compensation was increased from $262,000 to $377,000. She also asked if the office was providing assistance out of that funding only to the injured employees. Ms. England answered that the funds were all together, so they had not broken the amounts out. Ms. England explained there were eight staff members all dealing with different issues. Ms. Giunchigliani asked what percentage of the office's clients were from Worker's Compensation and Ms. England replied that Worker's Compensation related calls were approximately 20 percent of the calls received in the office. Ms. England explained that Worker's Compensation calls were usually more time-consuming and that much emphasis was placed on the individual health side, with the Patient Bill of Rights, but Worker's Compensation was a unique area to provide for outreach because until someone was injured, and thus into the system, they did not realize that they needed assistance. Ms. England said that there had been a shift from the fully insured to the self-funded insured and employees impacted by this change were seeking assistance. She explained that the self-funded program had not been in existence before, under the previous worker's compensation system, with State Industrial Insurance System.

Ms. Giunchigliani commented that since about 41 percent of the agency's budget was funded for Worker's Compensation, and if only 20 percent of the calls were related to Worker's Compensation, the issue needed to be looked at more closely. Ms. England agreed.

Ms. Giunchigliani asked Mr. Raxter to explain the increases of the Worker's Compensation funding for this budget. Mr. Raxter explained that when the office was created two years ago and the budget was created in August 2000, there was not enough history to get a clear idea of how much would be needed for each account. Mr. Raxter said it might take another biennium before they would have a good idea of the actual funding need. Ms. Giunchigliani asked Mr. Raxter what he used to base his figures on, and he replied that some positions were funded with Worker's Compensation funding, some with General Fund appropriation, and a partial position with Medicaid funding, etc. Ms. Giunchigliani asked if it was related to workload or just so much per body, and Mr. Raxter answered it was a continuation of the allocation from the 1999 biennium, not necessarily work related.

Don Hataway, Deputy Director, Budget Division, said that Ms. Giunchigliani had raised a good point and that the budget they were currently operating in was a "guesstimate." Four positions had been transferred from Employers Insurance Company of Nevada (EICoN) and were funded by Worker's Compensation. He thought they would need more history and that probably the allocation from the Worker's Compensation Fund would go down and the General Fund would go up. In two years the department would have a better feel for the amounts needed.

Ms. Giunchigliani asked why part of the tobacco money had not been requested, since part of the focus of the tobacco bill was health care. Mr. Hataway said that they had not thought of it, but with Ms. Giunchigliani's encouragement, agreed to ponder the issue.

Ms. Giunchigliani asked about the ombudsman position changes requested. She said the consolidation of the two agencies made sense, but was concerned that there might be too many bosses and was concerned about the salary increases. Ms. England replied that when she "inherited" the budget there was a listing for three deputies under the chief ombudsman. She agreed that they did not need three deputies so what was done was to create one deputy, and with her position as director, the rest of the positions would be ombudsmen. The new position would be upgraded to a salary (based on studies) to have equality with the consumer assistance individuals.

Ms. Giunchigliani asked if it was necessary to have a boss and a deputy to manage three people. Ms. England said that it was really the management of the entire operations of two offices, etc. Ms. Giunchigliani said she did not necessarily agree that the agency needed that many supervisory positions for such a small grouping and that this issue would have to be looked at.

Mrs. de Braga said her experience with the agency had not been productive, as she was referred back to the people that caused the problem. Mrs. de Braga asked for a list of what changes in the law Ms. England would recommend for the agency, based on her experience of the last two years.

EDUCATION

WESTERN INTERSTATE COMMISSION FOR HIGHER EDUCATION, LOAN AND STIPEND BUDGET PAGE WICHE-1

Chairman Arberry asked for testimony on the Western Interstate Commission for Higher Education (WICHE), Budget Account 614-2681.

Ron Sparks, Director, WICHE, introduced himself. He said that the agency had the Health Care Access Program (HCAP) for students they were putting through school. The program required the students to come back to the state to work in an underserved community when they had completed their schooling. The agency had two physician's assistant students, as well as a physical therapist, who were currently out in the community, working. The majority of the students would not be graduating until 2002. The agency did not know what the experiences would be when those students graduated, but working with the groups and seeing where the students would be placed, he was confident that there would be a big impact on the underserved problem in the state.

Mr. Sparks said that during the process of working through the health care system, they had developed an aggressive pro bono program. This had enabled students, with a Nevada license, or without a Nevada license, through a limited license process or through travel, to fulfill the needs of the state. He thought the agency had 10 or 12 students in the pro bono program at the time. Mr. Sparks said that they appreciated what the Dental Board had done to help bring students back to Nevada. However, he said they had to place people in tribal settings, the only place they could be put, because they were not eligible to have a limited license due to the fact that they failed the Dental Board examinations. A lot of students were practicing outside the state, but would willingly come back to Nevada if they could be licensed. Mr. Sparks said it would be to the state's advantage to have the students in Nevada as they provided a service to the population that had been underserved.

Mr. Dini asked how Medicaid treatment could be brought to children of the rural areas that did not belong to Indian tribes. He thought there were only two doctors in Reno that took Medicaid cases and in the rural areas it was impossible to get help. Mr. Dini asked if there was any chance of working it out with the Dental Board. Mr. Sparks said when the HCAP "kicks into gear" and the students got their licenses, (if they did not get their license they would have triple principal and penalty requirements) and they returned to Nevada, an impact should be seen in the rural areas. The pro bono program was doing what it could to get people into rural settings, but their hands were tied with the tribal issues. If the tribes would allow them to send people on the reservations it would help. He said they had talked to the Dental Board about this issue and the Dental Board was working to help, but was not bending on the WICHE students that failed the boards.

Mrs. Chowning asked why it was okay for the people who failed the boards to go to the Indian reservations and practice, but not to practice on non-Indian citizen adults as well as children, and commented that this was a double standard. Mr. Sparks replied that the tribal settings were where they placed the students because it was a federal requirement but not a state requirement in tribal settings. The students did have licenses from other states and so they were able to practice on federal property.

Chairman Arberry said his understanding of the Dental Board examination was the board made the exam difficult because they did not want anyone to pass. This was so the Dental Board could keep a monopoly on the system, and thus control the amount of dentists per capita. Chairman Arberry said in Nevada the number of dentists per capita was the worst in the country. He said it did not matter how smart the students were, or that they passed tests in other states, they could not pass the Nevada examination.

Ms. Giunchigliani said the problem was not just with the Dental Board, but other Nevada commissions had many specialized tests that no one could pass, yet we were recruiting people from other states and the whole issue was nonsensical. She said there would be debate on this issue, as there were bills on the issue this year.

Mr. Sparks said the agency was satisfied with what the Governor had proposed for their budget. He said that all of their needs were funded in Budget Account 2681, but he wanted to point out that they had a zero reserve and that during the next legislative session they would be requesting funding, including increases in General Fund money.

Chairman Arberry asked for an explanation in regard to in-state dental slots. Mr. Sparks said that they had five slots built into the first year of the biennium but the dental school would not start until the second year of the biennium, so they would need to make adjustments to be able to continue to support the students outside the state and keep the full ten slots, five for each biennium. The five in-state dental slots would go to the HCAP students who would be required, when finished with their schooling, to serve in an underserved community. He said the reason they still gave incentives to the students now that Nevada would have a dental school was because, for example, California had, and would continue to have, an underserved population as well, and could buy out the Nevada students. Mr. Sparks said if Nevada did not give incentives to stay in Nevada, and work in the underserved communities, we would just be educating people to work in other states. The same concept was used in the physical therapist program. The first class of physical therapists would graduate in June of this year. Most of the graduates would be placed in rural settings; for example, Winnemucca was one target area for a couple of placements and Reno was another area for placement.

Ms. Giunchigliani asked if there would be a problem placing people, and Mr. Sparks said no, there should be no difficulty placing them in the areas needed. He reminded the committee that the students were required to work two years, but could fulfill their obligation over a five-year period. They only needed to be in the setting a couple of days a week, which meant the underserved area received the care needed and Nevada would receive the benefits for five years.

Ms. Giunchigliani asked when they would have the placements. Mr. Sparks said they were working with the students currently. He said that the students coming out of the UNLV program this year were pretty much set. Ms. Giunchigliani asked if the students picked the area or if the agency picked the area and Mr. Sparks said that it was a combination of the two. He said what they tried to do was work with the Health Division, the hospitals, etc., to build a resource center so WICHE would know when positions came open.

Ms. Giunchigliani asked if the students could refuse placement. Mr. Sparks said yes, they could go where ever they wanted, but the triple principal and penalties' requirement was a deterrent.

Ms. Giunchigliani asked for clarification on the graduation dates of the first class. Mr. Sparks said that a group of physical therapists from UNLV would graduate June 2001. The physician's assistants had already graduated and been placed. The four-year students were getting close to graduation, and two dental students had opted for the three-year program. Both wanted to be located in Reno, and work in the Health Access Washoe County Community Health Center (HAWC) clinic and St. Mary's Hospital's van to the rural areas.

Ms. Giunchigliani asked what was the need for graduate librarians. Mr. Sparks said that if librarians were not at a certain level, federal dollars might be jeopardized. Ms. Giunchigliani asked for clarification regarding the federal money and Mr. Sparks explained that the federal funding for the actual libraries could be affected depending on the education level of the staff working in those libraries. Ms. Giunchigliani said she thought there were a lot of librarians in Nevada and felt that the agency should be looking into areas where there was a true shortage. Mr. Sparks said that they would be reviewing librarians, and also occupational therapists to see if the need was there in respect to the WICHE program. He said there was a true need for librarians at the graduate level, but maybe it was not WICHE's roll to work with those groups. Ms. Giunchigliani agreed. Ms. Giunchigliani asked if they were looking at physician's assistants as well and Mr. Sparks said he still felt the need for physician's assistants as they were still being used. Mr. Sparks explained that the agency might be turning the physician's assistant program into a nurse practitioner program because nurse practitioners had more ability to work on their own in the underserved communities.

Mrs. Cegavske said she believed that there was a great need for teachers and nurses and asked how someone paid back the money if they failed to comply with the agreement. Mr. Sparks replied that the agency was set up like a bank; they made collections, had a loan stipend fund, and were very involved with the collection process. Mrs. Cegavske asked if any money went to the student or if all funds went to the schools. Mr. Sparks said that the money went directly to the schools.

Mrs. Cegavske explained that with the Millennium Scholarship program, if any money was left over, it went to the family and she wanted to make sure that this was not the case at WICHE, and she felt it was something that needed to be corrected with the Millennium Scholarship program.

Mr. Sparks said that he thought that the need for teachers was a good area to pursue and Mrs. Cegavske said that they should look into special education teachers as well. Mrs. Cegavske said, in her opinion, when looking at the programs created by WICHE, she had not heard a "crying of need" from the public for those programs and the needs that were out there should have been handled five years ago. Mr. Sparks agreed that it was WICHE's job and responsibility to discover where the needs were and what fields they would need to pursue. Mr. Sparks said he recognized that the nursing shortage problem was serious and would continue to be so. He said WICHE had requested a nursing program be added to the budget, but the program was rejected by the Governor.

Mr. Marvel asked how they funded the reserve in the past and if they ever had one. Mr. Sparks said they previously had a reserve from the money paid back by students. Mr. Sparks said that the reserve had to be budgeted at the highest level from where their students were, and a lot of the students attended less expensive schools or chose to go to a three-year school instead of a four-year school, which meant more funding up front.

Mr. Sparks said without the ability to spend the reserve, there was no reason to have a reserve. He said they were trying to rectify the fact that they could not spend the reserve without coming before the committee, and S. B. 55, which would make various changes to provisions regarding Western InterstateCommission for Higher Education, was coming up this session and might rectify the situation. Mr. Sparks added that having the reserve did offset some of the General Fund.

Mr. Marvel asked if the money paid back from the students went to the General Fund. Mr. Sparks answered no, only about 25 percent reverted back to the General Fund, and the rest went to the reserve. Mr. Marvel asked where the paybacks were reflected in the budget. Mr. Sparks said it was under Student Loans and Stipend.

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WESTERN INTERSTATE COMMISSION FOR HIGHER EDUCATION, ADMINISTRATION – BUDGET PAGE WICHE -7

Chairman Arberry asked to go next to Budget Account 101-2995.

Mr. Sparks explained that Budget Account 101-2995 was to fund WICHE's administrative needs. He said WICHE was pleased with what was requested, with a few minor adjustments.

Chairman Arberry pointed out that the travel budget increased 102 percent and asked if this was because there would be two people traveling. Mr. Sparks said that an increase had been requested, but that they did not get approval and that the amount approved was "pretty much flat."

Chairman Arberry did not agree, and pointed out the actual money spent in FY2000 was $128,169; $1,520; and $3,059, etc. Mr. Sparks said that they did get an increase in in-state travel from the $1,520 to $3,072, but on the out-of-state travel, they were "basically flat." Chairman Arberry asked why the department needed the increase. Mr. Sparks said that the reason for the increase was because WICHE did not have a presence in Las Vegas and they did not have enough money to go to Las Vegas. He said that they had the ability through UNLV to have some free office space and they had the ability to operate there once or twice a month.

Chairman Arberry asked Mr. Sparks to provide the committee some detail on how they would utilize the travel money requested.

Chairman Arberry asked for a discussion about unit E-720, Advertising. Mr. Sparks said the request was for funds to purchase an LCD projector for presentations. Mr. Sparks explained that the agency did a lot of presentations to help people know what WICHE was, and he felt they were doing a good job getting the message out. Mr. Sparks continued, saying that with Elaine Fisher, the new program officer, and her "aggressive" style of work, progress was being made.

Chairman Arberry asked committee members to take action to introduce the following Bill Draft Requests:

BDR S-732 - Makes appropriation to legislative fund for equipment and software for information systems for Legislative Counsel Bureau and Nevada Legislature (A.B. 187).

ASSEMBLYMAN MARVEL MOVED COMMITTEE INTRODUCTION OF BDR S-732.

ASSEMBLYMAN PARKS SECONDED THE MOTION.

THE MOTION WAS CARRIED UNANIMOUSLY.

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BDR S-731 - Makes appropriation to legislative fund for reproduction of older volumes of Nevada Reports, and Statutes of Nevada (A.B. 183).

ASSEMBLYMAN MARVEL MOVED COMMITTEE INTRODUCTION OF BDR S-731.

ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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BDR S-349 - Makes appropriations to Clark County School District for expansion of distance education (A.B. 188).

ASSEMBLYWOMAN CHOWNING MOVED COMMITTEE INTRODUCTION OF BDR S-349.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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BDR S-730 - Makes appropriation to legislative fund for certain maintenance and rehabilitation projects on legislative building (A.B. 189).

ASSEMBLYMAN DINI MOVED COMMITTEE INTRODUCTION OF

BDR S-730.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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BDR S-1120 - Makes appropriation for support of clinical law program at William S. Boyd School of Law in Las Vegas (A.B. 83).

ASSEMBLYMAN DINI MOVED COMMITTEE INTRODUCTION OF

BDR S-1120.

ASSEMBLYWOMAN DE BRAGA SECONDED THE MOTION.

THE MOTION WAS CARRIED UNANIMOUSLY.

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BDR S-629 - Makes appropriations to Lander County for support of Battle Mountain Flood Control Project (A.B. 185).

ASSEMBLYMAN MARVEL MOVED COMMITTEE INTRODUCTION OF BDR S-629.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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BDR S-350 - Makes appropriations to Clark County School District for creation of pilot program to extend school day of selected middle schools (A.B. 184).

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED COMMITTEE INTRODUCTION OF BDR S-350.

ASSEMBLYWOMAN TIFFANY SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

There being no further business, the meeting adjourned at 10:56 a.m.

RESPECTFULLY SUBMITTED:

Kathryn Fosnaugh

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

DATE: