MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

 

Seventy-First Session

March 26, 2001

 

 

The Committee on Ways and Meanswas called to order at 7:30 a.m. on Monday, March 26, 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

Linda Smith, Committee Secretary

Assembly Bill 114:  Makes appropriation to Lander County for design and

construction of Battle Mountain Industrial Park. (BDR S-630)

 

Chairman Arberry recognized Judy Negro, Lander County Clerk.  Ms. Negro stated the Lander County commissioners were unable to attend the hearing and extended their apologies.  Bonnie Duke, former Lander County Manager, referred to a handout (see Exhibit C) and stated Lander County was heavily dependent on natural resources; mining was the major industry.  The recent downturn in the mining industry had caused economic concerns in the county and caused the commissioners to research ways to diversify and develop the local economy.  The tax base was quite limited in terms of ability to raise funds through property taxes due to the fact the federal government controlled approximately 93 percent of the land in Lander County.  The county had suffered through periods of economic growth and economic decline.  Ms. Duke explained the county was crossed by a strategic infrastructure including a mainline rail, an interstate highway, natural gas lines, fiber optic and electrical transmission lines.  The county had embarked on an initiative to develop an industrial park.  A Community Development Block Grant had provided funding for the site studies and conceptual designs. By June or July of 2001, the studies would be completed.  The county would then apply for grants through the federal Economic Development Administration (EDA) to complete construction.  The passage of A.B. 114 would assist the county with the preparation of final designs.  Ms. Duke said the county had generated nearly $7 million in net proceeds of mines taxes for the state of Nevada during the past three years.  Ms. Duke indicated an investment by the state in Lander County would provide more returns to the state.

 

Ms. Duke referred members to the second page of the handout (Exhibit C), a status report on the Battle Mountain business park.  The first phase, the site plan and preliminary studies, was almost complete, and the site with the most potential for development and with good access was shown on the map (Exhibit C).  A secondary site was also shown on the map.  In response to a question posed by Mr. Marvel, Ms. Duke stated the airport had been considered.  There were some excellent sites around the airport, but the installation of utilities would be very expensive.  Mr. Marvel asked if any businesses had indicated an interest in the proposed business park.  Ms. Duke indicated there had been a few discussions with developers who might be interested.

 

With no further questions or comments, Chairman Arberry declared the hearing on A.B. 114 closed.

 

Assembly Bill 120:  Revises distribution of federal money received by State of

Nevada from lease of federal lands. (BDR 26-97)

 

Assemblyman P. M. “Roy” Neighbors, Assembly District 36, introduced Mr. Steve Bradhurst, Consultant, and Mr. Henry Neth, County Commissioner from Pahrump.  Mr. Neighbors had worked on the issue of returning federal mineral lease revenue to the county for approximately 16 years.  Mr. Neighbors referred to the first tab in the handout (Exhibit D) that provided background information for A.B. 120.  The U.S. Department of Interior disbursed revenue to states from federal mineral leases under the revenue disbursement provisions of the Mineral Leasing Act of 1920 and the Geothermal Steam Act of 1970.  Federal mineral leases involved fluid and solid minerals.  Fluid minerals included oil, geothermal, hot water, gas, sulfur, and carbon dioxide.  Solid minerals included sand, gravel, coal, copper, lead, limestone, potash, phosphate, and zinc.  The Mineral Leasing Act did not pertain to precious metals such as gold and silver; therefore, the net proceeds of mines were not affected.

Mr. Neighbors explained the primary source of federal mineral lease revenues were royalties, rents, and bonuses.  Royalty, due when production began, was a share or percentage of the value of the mineral produced.  Rents were annual payments, normally a fixed dollar amount per acre, required to preserve the rights to a lease.  Bonuses represented the cash amount successfully bid to win the rights to a lease.  Mr. Neighbors continued and stated under Section 191 of the Mineral Leasing Act, all states except Alaska received 50 cents of every dollar on all royalties, rents, and bonuses collected from any public domain mineral leases located within their respective boundaries.  Forty percent of mineral revenues from public domain leases were deposited in the Reclamation Fund at the federal level and 10 percent were directed to the General Fund of the U.S. Department of Treasury.  Section 191 of the Mineral Leasing Act states:

 

50 per centum thereof shall be paid by the Secretary of the Treasury to the State other than Alaska within the boundaries of which the leased lands or deposits are or were located; said moneys paid to any of such States on or after January 1, 1976, to be used by such State and its subdivision, as the legislature of the State may direct giving priority to those subdivisions of the State socially or economically impacted by development of minerals leased under this chapter, for (i) planning, (ii) construction and maintenance of public facilities, and (iii) provision of public service.

 

Mr. Neighbors stated, to date not one dime of the mineral lease money had been distributed to the counties in accordance with federal law.

 

Mr. Neighbors said Nevada Revised Statutes (NRS) 328.450 stipulated that the first $7 million received by the state pursuant to Section 191 of the Mineral Leasing Act had to be deposited in the Distributive School Account (DSA), and amounts in excess of the $7 million were to be deposited into the Account of Revenue from the Lease of Federal Lands.  Funds in that account were to be distributed as follows: 25 percent to the DSA, and 75 percent to the county of origin of the revenue.  In addition, 25 percent of the funds distributed to the county of origin must be provided to the school district of that county (NRS 328.460).

 

Mr. Neighbors noted A.B. 120 provided that money received in a fiscal year by the state pursuant to Title 30, Section 191, United States Code (U.S.C.) must be deposited in the account for revenue from the lease of federal lands.  The funds in the account must be distributed to the counties from which the mineral lease revenues were generated.  Seventy-five percent of the revenue must be used by the counties for: 1) construction and maintenance of public facilities; 2) public services; and 3) planning.  The remaining 25 percent of the revenue must be used by the school districts in the counties for: 1) the fund for the construction of capital projects pursuant to NRS 354.6113; 2) the fund for capital projects pursuant to NRS 387.328; or 3) both funds specified in 1) and 2).

 

Mr. Neighbors said the initial mineral lease threshold was $10 million.  In 1995 the threshold was lowered to $7 million.  Mr. Neighbors indicated the mineral lease funds should have gone directly to the counties with a percentage earmarked for the schools.

 

Mr. Marvel asked what was projected for mineral lease revenues, and Mr. Neighbors responded that the initial amounts were between $10 million and $12 million.  However, through the years revenues had continually declined.  The projection for FY2001 was $2.6 million, less than one quarter of 1 percent of the state budget.  Mr. Marvel stated $5 million had been included in the DSA for mineral lease revenues for the biennium and was concerned that funding might not materialize.  Steve Bradhurst, Consultant for the Nye County Board of Commissioners, referred members to pages 5 and 6 of the handout (Exhibit D) and stated the charts provided an answer to Mr. Marvel’s question.  The mineral lease revenues were detailed by fiscal year from FY1976 to FY2000.  Page 7 was a report generated by the U.S. Department of the Interior, Minerals Management Service – the agency responsible for collecting and disbursing the revenue.  The report detailed the mineral revenue disbursements for Nevada by county of origin for FY2000.  The statewide total disbursement for FY2000 was $2.6 million.  Mr. Bradhurst referred to a copy of the federal law included on page 10 of the handout (Exhibit D) and referred to Section 191 that Mr. Neighbors referred to in earlier testimony.  The Nye County Assessor had indicated to Mr. Bradhurst that most of the oil activity in Nevada was in the northeastern corner of Nye County and oil activity had decreased significantly.  Nevada was considered a pioneer territory for oil exploration.  If geothermal energy increased, the state would benefit from increased mineral lease revenues.

 

Chairman Arberry indicated the committee had numerous bills to review and asked if Mr. Neighbors could shorten his presentation since most members understood the bill request.  Mr. Neighbors agreed and referred to page 11 (Exhibit D) that contained a legal opinion from the Legislative Counsel Bureau (LCB), Legal Division, and read the conclusion into the record:

 

In conclusion, it is the opinion of this office that NRS 328.450, by annually reserving the initial $10,000,000 received pursuant to 30 U.S.C. § 191 exclusively for educational purposes does not comply with the objectives and spirit of 30 U.S.C. § 191.  It is also the opinion of this office that this state is not required pursuant to section 3 of Article 11 of the Nevada Constitution to dedicate that money exclusively to educational purposes.

 

Mr. Neighbors related that the opinion came out very late in the 1995 Legislative Session and the legislature agreed to drop the threshold to $7 million – the amount was not reduced more because budgets had been closed.  The legislature asked Mr. Neighbors to return to the 1997 Legislative Session to resolve the issue, but to date the $7 million threshold had not been reduced.

 

Henry E. Neth, Nye County Commissioner for District 5, referred to page 18 of the handout (Exhibit D) that contained an example of one area impacted by the mineral lease issue.  The cost of rebuilding a road used by oil trucks in northern Nye County was between $8.5 million and $9 million.  Mr. Neth referred to the resolution in Exhibit D from the National Association of Counties.  The resolution emphasized states needed to do a better job of distributing mineral lease revenues.

 

Mr. Marvel asked what mineral lease revenues were projected for the next biennium and Mr. Bradhurst indicated the amounts included in The Executive Budget were probably realistic.  Mr. Bradhurst agreed with Mr. Marvel that passage of A.B. 120 would leave a $5 million shortfall in the DSA budget.

 

Doug Bierman, Senior Research Associate, Intertech Services Corporation, represented Lander and Eureka Counties and urged support for A.B. 120.  Mr. Bierman referred to the map of Nevada included in the handout (Exhibit E), and stated there was a preponderance of public land in Nevada and what appeared to be private land included local, county and tribal state lands.  Lander and Eureka Counties each contained a great deal of public land and had very narrow economies that were not well diversified due to the public land base.  The two counties were also very dependent upon public land activities for their tax base.  Because of the economic uncertainty and diminishing tax bases in many rural counties, Mr. Bierman urged the committee’s support for A.B. 120 that would help enhance the fiscal viability of rural Nevada.  Mr. Marvel asked how much activity was going on in Lander and Eureka Counties under the Mineral Leasing Act.  Mr. Bierman did not have the requested information but agreed to provide the numbers to Mr. Marvel.

 

Senator Mike McGinness, Central Nevada Senatorial District, representing Churchill, White Pine, Mineral, Nye, Lincoln, Esmeralda, part of Lander and part of Eureka Counties, indicated his support for A.B. 120.

 

A. Paul Donohue, Lincoln County Board of Commissioners, thanked Assemblyman Neighbors for his help and supported A.B. 120.

 

Al Bellister, Nevada State Education Association, stated due to the lack of adequate support for K-12 funding this biennium, the growing teacher shortage in the state, the lack of an inflation adjustment in the DSA, the lack of adequate support for special education, etc., the time was not right to remove $4.8 million over the biennium from the DSA without a guarantee the state General Fund would replace that money.  The Nevada State Education Association was opposed to A.B. 120.

 

Mrs. de Braga asked Mr. Bellister if any attempt had been made to negotiate with the bill sponsors.  Mrs. de Braga agreed that education should not be shorted, but felt education was not entitled to the mineral lease funds.  The counties desperately needed the additional revenues.  Mrs. de Braga referred to a $164 million lawsuit related to the mineral lease funds and stated if that lawsuit succeeded, the state would be in more dire straights.  Any motions to deny the lawsuit had failed.  Mrs. de Braga wondered if there was a means of stopping the suit from going forward and to negotiate with the bill sponsors.  Even though the DSA would take a hit, some of the money that would go to the counties would be used for education at the local level.  Mr. Bellister stated he did not agree with the interpretation that the revenues should not go to education, at least for operational uses.  Funds that currently went to districts for the operational side of their budgets would have to be replaced.  Mr. Bellister commented he would be happy to talk with the sponsors, but without General Fund capability to replace the lost revenue, he did not know where the negotiations would go.  A replacement tax could be discussed.  Ms. Giunchigliani noted it was the state’s responsibility to determine if the funds should continue to be distributed in the same manner.

 

Assembly Bill 288:  Makes appropriation to Lincoln County for improvement of

facilities at fairgrounds in Panaca and in Caliente. (BDR S-1194)

 

Assemblyman Tom Collins, Clark County Assembly District 1, stated this was his fourth term in the legislature and was the first time he had appeared before the Ways and Means to request an appropriation.  Assemblyman Collins recalled attending a rodeo in an old wooden arena in Logandale, Nevada, around 1969 or 1970 and there were approximately 400 spectators.  This year, over 60,000 people were expected to attend the fair and rodeo.  In the past, the legislature had provided one-time appropriations for the development of Logandale’s Clark County Fair and Rodeo. The appropriations had benefited the economy in rural Clark County and Assemblyman Collins asked the members to begin the same process for Lincoln County.  Lincoln County’s population was approximately 4,000 and only 1,100 to 1,200 were employed.  Assemblyman Collins stated he had recently attended a rodeo in Panaca and, in order to put on a rodeo, corral panels had to be hauled from several ranches, some at a distance of 30 miles, to have sufficient facilities for the events.  Outhouses had to be transported in for restroom facilities.  Camping trailers and cooking equipment had to be transported in for concession stands.  Funding would help improve the local economy and improve the facilities.  Mr. Marvel asked what land would be purchased, and Assemblyman Collins indicated the land to be purchased was located just south of the old rodeo grounds in Caliente.  Mr. Marvel asked if the land was privately owned and Assemblyman Collins thought it was public, but was not certain.

 

Senator Mike McGinness stated his appreciation to Assemblyman Collins for bringing A.B. 288 forward and stated Lincoln County had little ability to raise money through property taxes because of the lack of private land in the county.  The appropriation would provide assistance for a very limited amount of money.  Senator McGinness stated his support for A.B. 288.

 

Assemblyman P. M. “Roy” Neighbors, Assembly District 36, indicated his strong support for A.B. 288.

 

George T. (Tommy) Rowe, Lincoln County Board of Commissioners, explained the majority of rodeo contestants in Alamo, Panaca, and Caliente, were from other Nevada counties as well as from California, and Utah.  The rodeos were scheduled during a “dead time” in the rodeo circuit and drew large crowds and good contestants. Mr. Rowe requested support for A.B. 288.

 

Bryan Elkins, Director, Community Development, City of Caliente, responded to Mr. Marvel’s earlier question related to the ownership of the land.  He stated the potential site for the fairgrounds was private agricultural land.  Mr. Marvel asked if the land had been appraised at $125,000.  Mr. Elkins stated the price of land in the proposed area ranged between $2,000 and $5,000 per acre.  Mr. Marvel asked if the land would be taken out of the tax roll.  Mr. Elkins responded in the negative and indicated Lincoln County had to take every opportunity to expand its economic base.  Lincoln County was 98.2 percent federally controlled.  Mr. Elkins stated five gymkhanas were held every year and each event had approximately 125 contestants and 500 spectators.  Mr. Elkins said the facilities were primitive. The bleachers were permanent, however, if you sat crooked, additional wood would be added to the back end of your jeans.  Seven barrel races were held each year with approximately 300 contestants and between 900 and 1,200 spectators.  During the two to three days of the races, the population of the town doubled, creating a significant economic boost.  Mr. Elkins said Caliente would like to sponsor many more events.  At least ten teams traveled from the Las Vegas area to participate in softball events each Labor Day, Memorial Day, and the Fourth of July.

 

Robert Rowe, a senior from Lincoln County High School, represented Lincoln County and the Lincoln County High School Rodeo Club.  Mr. Rowe said each year the high school sponsored a rodeo for high school students and there were approximately 190 contestants from throughout the state.  Food was prepared for the contestants and their families in a concession stand that measured 10‑ by 12-foot.  The bleachers were transported from the high school’s football and baseball fields and Port-A-Johns had to be rented.  Mr. Rowe stated the cost to put on the rodeo exceeded $15,000 each year.

 

Mr. Parks asked how Lincoln County would prioritize the three projects specified in A.B. 288.  Mr. Donohue indicated the Lincoln County High School rodeo that was held in Panaca was the first priority.  The land acquisition was the second priority.  Mr. Donohue explained Caliente had had a rodeo grounds and a recreational area, and the city had taken that recreational area for an industrial park.  The rodeo facility in Caliente was the third priority.  Mr. Donohue referred to a handout (Exhibit F) that contained copies of letters that had been sent to Lincoln County’s legislative representatives and some photographs of the facilities.  Mr. Donohue thanked the committee for the funding provided last session for the new school in Pioche and also thanked the committee for the opportunity to present A.B. 288.  Assemblyman Tom Collins stated the fairs and rodeos in Lincoln County were very important to the residents and thanked the committee for consideration of A.B. 288.

 

Assembly Bill 251:  Makes appropriation to Department of Education for

teachers to obtain endorsements to teach English as a second

language. (BDR S-847)

 

Assemblywoman Debbie Smith, District 30, Washoe County, presented A.B. 251 which appropriated $120,000 to the Nevada Department of Education (NDE) for grants to schools that would assist teachers, either collectively or individually, to receive an endorsement for Teaching English as a Second Language (TESL).  The bill estimated the cost of an individual teacher receiving the endorsement was $1,200.  Ms. Smith stated quality teaching continued to be the number one indicator of student achievement.  A.B. 251 would give teachers the opportunity to learn new information and teaching skills would be enhanced.

 

Ms. Smith said during her tenure as a member of the Council to Establish Academic Standards, there had been numerous conversations related to second language learners.  Teachers and parents had questioned how the second language learners would be accommodated with respect to the standards.  Ms. Smith indicated the second language learner problem had weighed heavily on her mind the past three and a half years, and knew it was also an area of particular concern for Mrs. Chowning, who had also served on the council.  Ms. Smith realized there was no one solution to the problem.

 

Ms. Smith stated the Elaine Wynn Elementary School located in Las Vegas had done some wonderful things related to second language learners.  Ms. Smith was a member of the Nevada Goals 2000 Panel and the Elaine Wynn Elementary School staff had made a presentation to the panel on the use of the Goals 2000 grant that had been awarded to the school.  The grant funds had been used to bring Sierra Nevada College staff to the Elaine Wynn Elementary School, and the teachers received TESL endorsements while taking classes on‑site.  The principal and teachers felt confident that the TESL endorsements made a significant difference in enhancing their ability to teach second language learners.

 

Ms. Smith testified, when she began thinking about what bills to have drafted for the current session, the issue of second language learners was one of the most significant.  Rather than funding individuals, Ms. Smith thought it was important to grant money directly to schools that had the largest populations of second language learners.  Ms. Smith addressed the Chairman and committee members and stated A.B. 251 was a very straightforward bill that would go a long way, for a relatively small amount of money, to improve opportunities of second language learners and their teachers.

 

Ms. Leslie thanked Ms. Smith for bringing the bill forward and asked if the money was to be used only for individuals who did not hold a TESL endorsement.  Ms. Smith affirmed and stated there could be one teacher in one school, or five teachers in one school, if the school wanted to apply for the grant.  Ms. Leslie asked what percentage of Nevada’s teachers currently had the TESL endorsement.  Ms. Smith said she did not have that information.

 

Mrs. Cegavske asked if it would cost $1,200 per teacher to receive a TESL endorsement.  Ms. Smith indicated the funding numbers were based on the costs incurred by the Elaine Wynn Elementary School.  The costs included substitute pay and the entire facilitating package.  Mrs. Cegavske wondered what it would cost an individual teacher to receive a TESL endorsement through the University System.  Mrs. Cegavske also asked the length of time required to receive the endorsement.  Ms. Smith did not have the answers, but hoped the Nevada Department of Education (NDE) could provide the information.

 

Ms. Giunchigliani said when the TESL endorsement had been put into place seven or eight years ago, there had been quite a bit of disagreement on what course work was needed.  Ms. Giunchigliani thought TESL endorsements should be targeted to teachers of at‑risk populations.  She wondered what was available through the community colleges or distance learning to teachers in the rural areas.  Ms. Giunchigliani suggested the legislature could fund a pool of dollars for a loan grant program or a subsidy program for teacher shortage areas.  The school districts would determine the shortage areas and funding would be provided for teachers to return to school to receive the needed endorsements – TESL, math, etc.  Ms. Giunchigliani felt it was better to bring the course work to the school site because a greater percentage of teachers could participate and stated the universities were bringing more classes to sites in urban areas. 

 

Mrs. Chowning pointed out funding for 100 teachers would fill part of the need.  

In the past, a small percentage of the population of an elementary school was not proficient in English, but the percentage had increased significantly.  Mrs. Chowning stated that the Elaine Wynn Elementary School was not in an area typically thought of as having a non‑English proficient population and applauded Ms. Smith for bringing A.B. 251 to the committee.  Mrs. Chowning was concerned that the $1,200 per teacher might not cover the endorsement expenses. 

 

Dr. Keith Rheault, Deputy Superintendent of Instructional, Research and Evaluative Services, Nevada Department of Education, indicated support for A.B. 251.  A blue-ribbon task force had looked at all the limited English proficient problems and had recommended an incentive that would encourage more teachers to obtain a TESL endorsement.  Dr. Rheault then responded to questions posed earlier in the hearing and stated the TESL endorsement was a non-stand-alone endorsement that required 12 credits of course work.  Before the endorsement could be added to a license, a teacher had to hold a valid elementary, secondary, or special license.  Dr. Rheault stated he would provide the committee members with the count of TESL students, but thought the maximum would be 2 or 3 percent.  Dr. Rheault felt the $1,200 per teacher amount included in A.B. 251 would be sufficient.  The Commission on Professional Standards currently allowed only course work issued through university credit and the cost was between $90 and $300 per credit.  Dr. Rheault thought perhaps the commission could come up with a method to provide credits at a lower cost or to provide courses on-site at the schools.  Dr. Rheault explained until four or five years ago, the only institution that had a good program was Sierra Nevada College, a private school located in Incline Village, Nevada.  The college had been very helpful in getting the course work throughout the state, but since that time the University of Nevada, Las Vegas, Nova University, and the University of Phoenix provided the course work.

 

Mrs. Cegavske asked if there were federal grants available for the TESL area.  Dr. Rheault thought perhaps Goals 2000 had been used, however, that grant ended in FY2001.  Dr. Rheault indicated federal Title I funds could be used for TESL and stated there were federal English as a Second Language competitive grants that the department had not been awarded.  Local school districts could use funds from some of their federal grants if the TESL program was deemed to be a priority.

 

Martha Tittle, Clark County School District (CCSD), commented the district had one of the fastest growing student populations that needed teachers having the highly skilled instructional strategies addressed in the A.B. 251.  Therefore, the CCSD was very much in support of the bill.  Any resources directed to support the training of teachers in TESL was very important.  Ms. Tittle referred to the question Mrs. Cegavske had asked about the available grants and stated the district currently had some federal grant money that provided training for teachers in the TESL area.  However, the funding was not enough for the growing population.

 

 

Assembly Bill 185:  Makes appropriation to Lander County for support of Battle   

Mountain Flood Control Project. (BDR S-629)

 

Bonnie Duke, former Lander County Manager, referred to the photographs (Exhibit G) of the flood that occurred in Battle Mountain in 1962 and stated Battle Mountain was located in the confluence of the Humboldt and Reese Rivers.  In 1969 a levee was constructed, however, that levee did not afford flood protection for Battle Mountain.  Ms. Duke stated the U.S. Army Corps of Engineers had recently designed a project that raised the elevation and extended the existing levee.  The Federal Emergency Management Agency (FEMA) had indicated the proposed levee improvements would result in the community of Battle Mountain being removed from the flood hazard area and would eliminate the requirement for flood hazard insurance.  Because of the current high cost of flood insurance, private industry was hesitant to locate in Battle Mountain.  The cost of flood insurance for residents averaged $600 per year, and the cost   was even higher for commercial establishments. 

 

Ms. Duke stated Lander County’s required match was 35 percent, approximately $800,000. The U.S. Army Corps of Engineers would provide the remaining amount.  U. S. Senator Harry Reid had been able to earmark funding with the Corps’ budget to ensure that federal funds would be available to complete the project.  Lander County currently had $600,000 from the capital projects fund, primarily from the net proceeds of mines.  The county was heavily dependent upon net proceeds for operational funds.  The project was estimated to cost $2.3 million.  Ms. Duke stated Lander County was requesting the legislature’s assistance in providing the remaining $200,000 required to construct the Battle Mountain Flood Control Project – a very important project and a high priority of the county commissioners.  Ms. Duke referred to a newspaper article included in the handout (Exhibit G) that provided additional information on the funding to be provided by the Army Corps of Engineers and the county requirement for matching funds.  In response to a question posed by Mr. Dini, Ms. Duke stated Lander County did not have a flood control district.

 

 

Assembly Bill 342:  Authorizes division of child and family services of             department of human resources to enter into agreements for provision of             maintenance and other services with certain persons. (BDR 38-324)

 

Assemblywoman Barbara Buckley, District 8, Clark County, introduced A.B. 342, which had resulted from a unanimous, bipartisan recommendation of the Interim Committee on the Study of State and Local Child Welfare Systems.  In the course of the study, the committee found a few areas that needed to be changed.  At age 18, children were thrown out of the child welfare system and most were not prepared to be on their own.

 

Tom Reilly, Professor, University of Nevada, Las Vegas (UNLV), Department of Social Work, stated A.B. 342 allowed young people to stay in the child welfare system up to age 21 on a voluntary basis with the consent of the court.  Individuals who left foster care upon reaching the age of 18 had been in the system for a long period of time and any crises that occurred after leaving the system was financially and emotionally devastating.  Society pays if youths are not assisted in the transition from foster care to independent living.  A.B. 342 would require the individuals to be involved in a university, community college, trade school, or technical school. The Division of Child and Family Services had commissioned UNLV to study what happened to youths forced out of the system and the outcome of the study was appalling.  Dr. Reilly explained when a crises occurred, there was no one to turn to – no connection to family, very little connection to the community and the child was not allowed to return to Child and Family Services.  An exit study was conducted to locate over 250 youths that had left the system in the last three years and only 100 were located.  Of the 100, over 35 percent made less than $5,000 a year – the poverty line was $9,000.  Fifty percent left without a high school diploma, 36 percent had no place to live, 35 percent moved more than five times during the past year.  Dr. Reilly referred to health issues and stated that 38 percent had early pregnancies, 31 percent experienced violence in the dating relationship, 14 percent experienced attempted rape, and 41 percent had spent time in jail since leaving foster care.  Seven of the youths had been in state prison, and Dr. Reilly emphasized the cost to incarcerate those individuals far exceeded the cost of ensuring youths made it on their own. The majority of states allowed youths to stay in the system past the age of 18 based on a case-by-case basis. 

 

Donald Gutterman, graduate student, Social Work Department, UNLV, stated it had been extremely difficult to locate the 100 individuals who participated in the survey.  Even though the individuals were paid $30 to participate in the study, many had difficulties even appearing for the interviews.  Mr. Gutterman said the entire experience had been a very sad one and indicated his strong support for A.B. 342.

 

In response to a question posed by Chairman Arberry, Ms. Buckley stated Channel 5 had presented a special program that chronicled homeless teenagers and stated the Assembly Health and Human Services Committee had a bill that allowed non-profits to set up homeless shelters for teenagers.  Ms. Buckley thought the early release from child and family services contributed to the homeless teenage problem.

 

Ms. Giunchigliani referred to the statistic that 50 percent of the young people interviewed did not have a high school diploma, and indicated A.B. 342 would assist in lowering that statistic.  Dr. Reilly stated that of the 50 percent who had not attained a high school diploma, 70 percent had received a General Educational Development diploma (GED).  Ms. Giunchigliani stated Adult Education funding probably should be increased.

 

Ms. Leslie thought it was a sad commentary that abused and neglected children who had been through the foster care system, through no fault of their own, ended up with such horrible outcomes.  Ms. Leslie expressed concern that 36 percent of the foster care children had no place to go when they turned 18 years of age.  Dr. Reilly said the Division of Child and Family Services currently provided each child leaving the system with a portfolio of important documents and made certain each individual had a place to reside.  Because the law stated that foster care ended at age 18, the division was unable to provide assistance to youth in need.  Dr. Reilly explained that students who had not graduated from high school were allowed to stay in the system until age 19.  Ms. Leslie said the committee always looked for ways to save money and there appeared to be a direct correlation between where the youths ended up and what could happen with a few extra years -- not including the possible savings in the fiscal notes did not make sense.

 

Mr. Goldwater asked about the agreements referred to in A.B. 342, and Ms. Buckley referred to the maintenance definition on page 2, line 16, of the bill.  Maintenance included general expenses such as board, shelter, clothing, transportation, and other necessary or incidental expenses.  It would be within the discretion of the division to determine maintenance items.  Mr. Goldwater wanted to know if that statement would be included in the agreement.  Ms. Buckley said an individual’s conduct would not be monitored and the maintenance provision benefited only the child.  Dr. Reilly said many of the youths would not stay until age 21.  Nationally, only 25 percent of foster care children actually stayed in foster care until age 21.

 

Ms. Tiffany stated the transitioning for foster care was part of the inclusion of the Work Force Initiative Grant for Welfare to Work.  Some cash assistance and transportation tokens were provided, but housing was not included.  Housing was a very big component and Ms. Tiffany wondered if the agency had checked with the U.S. Housing and Urban Development (HUD) to see if there were grants specific to the foster care population.  Dr. Reilly stated the federal Chafee Independent Living Act (H.R. 3443) recently passed.  The act appropriated funds to states and 30 percent of those funds could be spent for former foster care participants.  The Division of Child and Family Services was currently in the process of developing regulations and policies.

 

 

Ms. Buckley stated grants usually covered 10 to 15 percent of the need, and A.B. 342 would ensure that no one slipped through the cracks. Ms. Tiffany indicated the bill was important and the need was great, but if the bill did not pass, there would still be limited funding available for former foster care participants.

 

Mrs. Cegavske wondered if the results of the study conducted by UNLV were similar to those conducted in other states.  Mrs. Cegavske also wondered if children in the program before age 18 were able to utilize life skill programs and services to help with their emotional problems.  Were former foster care youths who committed crimes eligible for assistance?  Dr. Reilly said results of surveys from other states indicated that Nevada mirrored what was happening nationally.  The division provided skills training but few foster care youths had actual job experience and that seemed to be the difference.  Dr. Reilly stated many of the children could not deal with the issues that brought them into child care.  The emotional component was very important.

Mr. Parks had received an e-mail from Judge Dougherty, Juvenile Court Master, Second Judicial District, that included rather compelling incidences related to foster care children and Mr. Parks shared the e-mail with the committee.

 

Stephen Shaw, Administrator, Division of Child and Family Services, Department of Human Resources, indicated the fiscal note for A.B. 342 had been submitted on March 17, 2001, but was currently being revised.  In FY2002 the fiscal impact was estimated at $410,787 and in FY2003 the estimate was $652,965 -- the ongoing costs would be approximately $1 million a year.  A portion of the $1 million might be federally reimbursed.  The fiscal note, which was prepared based on FY2000 Medicaid costs, needed to be revised to be in line with The Executive Budget.  Chairman Arberry asked for a breakdown of the federal and state amounts.  Mr. Shaw said the current fiscal note included approximately $950,000 each year in state General Fund.  Ms. Leslie wanted to know what percentage of youths leaving foster care the fiscal note addressed.  Mr. Shaw responded that the calculations were based on approximately 147 youths who would age out of the system over the next two years and it was estimated that 25 percent of those individuals would take advantage of the program.

 

Mr. Beers thought the federal participation rate was extremely low.  Mr. Shaw stated the federal government would not participate in costs for anyone over age 19 not enrolled in school.  With the state plan change, the federal government would participate 50 percent for Medicaid-eligible youths over age 18.  There was no maintenance participation by the federal government, only the special services section.

 

Mrs. Chowning indicated the state mandated that each individual leaving prison had a plan and felt the state treated prisoners much better than youths aging out of the system.  Mr. Shaw stated, of the 4,000 children in the care programs, only a small portion aged out of the system.  The agencies emphasized placing children in some type of permanent situation early in life.  Children entered the system as young as two years of age -- the average length of stay in the program was three and a half years.  In response to a question posed by Ms. Giunchigliani, Mr. Shaw said the fiscal note had been developed on two-thirds of the youths being in family foster care and was based on a $684 rate.  Mr. Shaw stated the revised fiscal note would be submitted the following day.

 

Kathy Shane, Foster Care Specialist, Division of Child and Family Services, said the Independent Living Program started with youths aged fifteen and a half and older and was 100 percent federally funded.  In the past, only $150,000 had been available to cover children in independent living services statewide.  The amount had increased to $530,000, of which $130,000 could be used for individuals who had aged out of foster care.  The agency had providers in northern Nevada and southern Nevada who worked with the youths to increase self-sufficiency.  Some funding was provided for room and board for individuals in exceptional circumstances and the remaining funds supported participation in vocational education programs.  Ms. Shane indicated the agency had worked with HUD.  Ms. Shane stated Clark County had applied for a certain number of HUD slots that would be available to former foster care participants.  Based on the limited amount of funding, the agency would pay for the housing deposit and then HUD would pay for the housing service.  Ms. Shane referred to the question regarding medically-fragile youths aging out of the foster care system, and said those youths were covered by Supplemental Security Income (SSI) as a family of one and continued to be eligible for medical assistance even after leaving the system.  The youths did not always follow through with medical-related recommendations made by child care staff.

 

Mr. Shaw stated the committee had heard Dr. Reilly testify that the Division of Child and Family Services had contracted with UNLV to conduct the study.  Many of the issues currently being addressed in independent living were the result of that study.  Ms. Giunchigliani indicated her displeasure with the local school districts for not automatically accepting students’ credits.  Ms. Shane said the problem had occurred in the Clark County School District.  Ms. Giunchigliani thought the medically-fragile youths would automatically qualify for Medicaid.  Ms. Shane stated an individual had to have Supplemental Security Income (SSI) and stated the division applied for SSI when the children were in the custody of the program.  The children had coverage when they transferred out, but contact needed to be maintained.  Ms. Giunchigliani assumed someone who was medically fragile would also probably be under a 504 plan or under IDEA and should be part of the school transition plan.  Ms. Giunchigliani asked if there were regulations for children that might participate in the Kinship Care program and Mr. Shaw indicated he did not know, but would find out.

 

Ms. Leslie asked for clarification on the funding.  Ms. Shane had said the funding went from $150,000 in federal independent living money to $530,000 and Ms. Leslie wanted to know if that was the new Chafee money or would additional funding be received.  Ms. Shane responded it was the new Chafee money.  The Independent Living Act actually passed in December of 1999 but the regulations and guidelines were not published until recently.  Ms. Shane said the funding would be ongoing.

 

Ms. Tiffany thought the Student Management Automated Record Transfer (SMART) program could handle the records.  The youth centers were not currently included in SMART, but the committee might want to look at having the centers included.  In response to a question posed by Ms. Tiffany, Mr. Shaw stated the agency did not have a position on A.B. 342.  Ms. Tiffany asked how much drug and alcohol abuse was found in the youths who were transitioning out of foster care.  Ms. Shane did not have the answer available but agency staff had indicated drug and alcohol abuse was a problem.  Dr. Reilly would provide the statistics to the Ms. Tiffany.  Ms. Giunchigliani wanted the audience to know that there were certain things agency heads could not go on the record for or against.  An agency might be doing the best job possible within the fiscal constraints, but there was still an unmet need.  Mr. Parks requested the agency provide detail with the fiscal note on how the numbers were determined.  Mrs. Chowning stated the Caliente Youth Center contracted with the local high school and felt there should be no excuse for not tracking the youths.

 

Krista Hershenhaus, stated she was a former “State Kid.”  At the age of 18, Ms. Hershenhaus was told there were two choices – the Air Force or leave the program.  Ms. Hershenhaus chose the Air Force but lasted only four weeks and then returned to Nevada with no money, no food, and no place to live.  A former caseworker helped Ms. Hershenhaus find a place to live and obtain financial aid for college.  Ms. Hershenhaus had been attending college for five years, had an apartment, and a brand new car, but continued to struggle while attending college.  Ms. Hershenhaus strongly urged passage of A.B. 342.

 

Mason H. Ross, Jr., a former State Kid, also urged passage of A.B. 342.  Mr. Mason stated he had just received his GED diploma after five years out of the system, held two jobs, and could not go to college because he had to support himself.  Many of Mr. Mason’s friends who had been State Kids had joined gangs and had been arrested because there had been no planning for leaving state custody.

 

Ms. Dorothy Pomin, Sierra Association of Foster Families and the Foster Care and Adoption Association of Nevada, stated her strong support for A.B. 342.  Ms. Pomin had been a community-based treatment home provider for adolescent females from 1992 through the summer of 2000.  Most of the children Ms. Pomin provided for aged out of the system.  Children in foster care to adolescence experienced multiple placements and had multiple emotional traumas.  Forty percent of children in foster care ultimately end up severely emotionally disturbed.  The emotional aspect of aging out, having no skills, no mentors, no money, and no resources was incredibly difficult.  Ms. Pomin had many children who had aged out that turned to prostitution, worked in men’s clubs, used drugs, sold drugs, and had been incarcerated.  The youths entered foster care traumatized and the system does not help.  Ms. Pomin stated the children in foster care were often on medication, often received counseling, and at age 18 that all went away.  It was difficult for the children to experience independent living prior to age 18 due to the liabilities the providers might incur.  In response to a question posed by Ms. Giunchigliani, Ms. Pomin indicated she wanted the bill to be more specific on obtaining a GED or a high school diploma and to provide for reentry into the program.

 

Melisa Wilson, School of Social Work, UNLV, thought A.B. 342 provided a sense of hope.  Many of the children who dropped out of school did not feel there was a chance to move forward.  Ms. Wilson had worked with the at-risk population, and a main concern of that population was how success could be achieved.  Ms. Wilson strongly supported A.B. 342.

 

K. Joni Reid, School of Social Work, UNLV, was compelled to address the committee as a licensed Nevada foster parent.  Ms. Reid had watched the foster care youths enter and leave foster care homes.  Ms. Reid stated her natural children had the opportunity to have 18 years of parental wisdom and experience – the youths in foster care did not have the same opportunity.  The bill would give youths the incentive to further their education, which was vital to well-being and to the well-being of their children.  Ms. Reid encouraged passage of A.B. 342.

 

Shona Whitham, Graduate Social Work Student, UNLV, stated as part of her internship she worked at the West Care Youth Crises Shelter in Las Vegas, which served a population between 10 and 18 years of age.  Approximately 250 children were served each month, all in crises.  Many of the children were already in the foster care system, had substance abuse problems, but were still very intelligent and ambitious.  Ms. Whitham had spoken to many 17 year olds who were very excited about the prospect of turning 18 and getting out of the system, but at the same time were also scared to death because return to West Care was not allowed after age 18.  The children did not have hope or skills.  Giving the children the chance to maintain child care support until the age of 21 and to maintain hope would make a big difference.  Ms. Whitham strongly supported A.B. 342.  Ms. Giunchigliani extended appreciation to UNLV for promoting the School of Social Work and hoped the school districts would hire more social workers in the future.

 

Vice Chairwoman Giunchigliani closed the hearing on A.B. 342.

Chairman Arberry requested a blanket introduction for the following Bill Draft Requests:

 

·        BDR S-511 – Makes appropriation to restore and increase balance in stale claims account. (A.B. 587)

 

·        BDR S-1510 – Makes appropriation to restore balance in emergency account. (A.B. 588)

 

·        BDR S-1469 – Makes appropriation to State Public Works Board for construction of Hi-Tech Learning Center at Rancho High School in North Las Vegas. (A.B. 589)

 

·        BDR S-1414 – Makes appropriation to Welfare Division of Department of Human Resources for energy bill assistance for low-income Nevadans.  (A.B. 590)

 

·        BDR S-1468 – Makes appropriation to State Public Works Board for needs assessment and feasibility study relating to curriculum programming and potential building construction at Fallon campus of Western Nevada Community College. (A.B. 591)

 

·        BDR S-1417 – Makes appropriations from state general fund and state highway fund to Department of Motor Vehicles and Public Safety for various information technology upgrades. (A.B. 592)

 

·        BDR S-1467 – Makes appropriations to State Department of Agriculture for support of Advisory Council for Organic Agricultural Products. (A.B. 593)

 

·        BDR S-42 – Makes appropriation to Culinary and Hospitality Academy of Las Vegas for design and construction of facility for vocational training in Southern Nevada. (A.B. 594)

 

·        BDR S-1509 – Makes appropriation to Clark County for support of Greater Las Vegas Inner-City Games. (A.B. 595)

 

·        BDR S-1381 – Makes appropriation to Department of Motor Vehicles and Public Safety for computer upgrades at Division of Parole and Probation.  (A.B. 596)

 

·        BDR S-1382 – Makes appropriation to Department of Motor Vehicles and Public Safety for purchase of computers for Division of Parole and Probation. (A.B. 597)

 

·        BDR S-1405 – Makes appropriation to Department of Human Resources for enhanced health clinic for Jan Evans Juvenile Justice Center. (A.B. 598)

 

·        BDR S-1406 – Makes appropriation to Department of Human Resources for program to coordinate family resources. (A.B. 599)

 

·        BDR 17-1132 – Provides for preparation of legislative proposal for budget for state government. (A.B. 600)

 

·        BDR 31-1106 – Restricts ability of state agencies to enter into certain agreements to purchase real property. (A.B. 601)

 

·        BDR 18-488 - Makes various changes to provisions governing powers and duties of attorney general. (A.B. 602)

·        BDR 31-1408 – Creates Nevada health account for uninsured families in state general fund. (A.B. 603)

 

·        BDR 23-1307 – Makes various changes relating to awards for state employees. (A.B. 604)

 

·        BDR 27-1315 – Makes various changes relating to state purchasing fund. (A.B. 605)

 

·        BDR 23-1435 – Makes various changes regarding base amount and periodic review and adjustment of compensation of certain state and local elected officers. (A.B. 606)

 

·        BDR 53-1313 – Makes various changes relating to unemployment compensation affecting Indian tribes to comply with federal law. (A.B. 607)

 

·        BDR 38-1320 – Transfers responsibility for administering program for property tax assistance for senior citizens from department of taxation to aging services division of department of human resources, increases maximum amount of assistance and lengthens period for filing claim for assistance. (A.B. 608)

 

·        BDR S-1319 – Extends authorized period of expenditure of certain money appropriated to department of motor vehicles and public safety. (A.B. 609)

 

·        BDR S-1466 – Makes appropriation to Comstock Cemetery Foundation, Inc., for expenses relating to historic preservation and restoration of cemeteries located in Virginia City area. (A.B. 610)

 

·        BDR 35-1322 – Removes limitation on amount of money in state highway fund that may be used to pay costs of administration. (A.B. 611)

 

·        BDR 31-1421 – Creates revolving loan account in state general fund to provide assistance to certain rural health programs. (A.B. 612)

 

·        BDR S-434 – Requires transfers of money from fund for school improvement to provide scholarships for students pursuing degrees in teaching. (A.B. 613)

 

·        BDR 23-1471 – Increases amount of longevity payments to state employees. (A.B. 614)

 

·        BDR S-1463 – Requires submission to voters of proposal to issue general obligation bonds to protect, preserve and obtain benefits of property and natural resources of state. (A.B. 615)

 

·        BDR 34-1321 – Revises provisions governing class-size reduction program. (A.B. 616)

 

·        BDR S-1355 – Makes appropriation to Budget Division of Department of Administration for continuation of development and roll out of Integrated Financial System. (A.B. 658)

 

ASSEMBLYWOMAN CHRIS GIUNCHIGLIANI MOVED FOR A BLANKET INTRODUCTION OF THE ABOVE MENTIONED BILL DRAFT REQUESTS.

 

ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.

 

THE MOTION PASSED UNANIMOUSLY.

 

********

Chairman Arberry moved to A.B. 359

 

Assembly Bill 359:  Makes appropriation to Interim Finance Committee for             expenses relating to investigation of leukemia cluster in Fallon. (BDR S-            1465)

 

Assemblyman Marcia de Braga, Assembly District 35, explained that A.B. 359 appropriated $1 million to assist with the leukemia investigations in Fallon.  In the spring of 2000, Mrs. de Braga notified the state Health Division that Fallon had had four cases of acute lymphocytic anemia, childhood leukemia, in less than three months.  The normal average was one case every three to five years.  Currently 12 cases of childhood leukemia were confirmed in Fallon. The Health Division had families complete questionnaires to determine if there was a common denominator between the cases, and an expert panel was created that assessed the findings of those inquiries.  Testing was conducted on some of the possible environmental causes such as the water wells.  Legislative hearings were conducted in early February 2001.  There was a great deal of expert testimony and assistance was provided by the Centers for Disease Control (CDC).  There had also been a promise of federal assistance.  The panel made recommendations to the Fallon Naval Air Station, to the local government, to the owner of the pipeline that carried jet fuel from Sparks, Nevada, to Fallon, and to the Health Division.  A recommendation was made to the Health Division that testing be expanded on water and other environmental causes, and to begin testing of hair, blood, and tissue of the victims.  The panel had also recommended expanding the number of years and perhaps expanding the testing to all marrow diseases and to look at adult statistics.  The division looked at a very narrow cluster – cases diagnosed over a one-and-a-half year period.  Ms. de Braga stated there were cases that had occurred just a few years before that the division might want to include in the study.

 

Ms. de Braga said A.B. 359 allowed for the dissemination of information to all involved entities.  The public also needed to be informed because there was a great deal of misunderstanding as to what might and might not have caused the leukemia and the fears of the community needed to be dispelled.  Ms. de Braga advised there would be federal hearings conducted in Fallon on April 12, 2001.  U.S. Senator Harry Reid had received all the information that had been collected to assist in the hearings.  Ms. de Braga requested that $1 million be set aside as quickly as possible.  The state Health Division, the lead agency in the investigations, would go before the Interim Finance Committee to request funds on an as-needed basis. 

 

Joe Johnson, representative of the Toiyabe Chapter of the Sierra Club, asked to go on record in support of A.B. 359 and indicated the importance of the legislation – the committee needed to realize the cluster of leukemia was not random.  Assemblyman Mortenson had asked the Legislative Counsel Bureau to calculate the likelihood of this leukemia cluster being the result of a simple random assemblage and it came out to be an almost infinitesimal chance.  Mr. Johnson said the portion of A.B. 359 that indicated the money would be used to disseminate information was very important.  Proceeding with the investigation of the possible causes was extremely important, both from a standpoint of public health and the general well-being of the citizenry.  Mr. Johnson repeated the chapter’s strong support of the bill and felt the funding should be provided as soon as possible.

 

Assembly Bill 372:  Makes appropriation to Department of Museums, Library             and Arts for expenses relating to development and production of Nevada             History CD-ROM. (BDR S-1274)

 

Barbara Cegavske, Assemblywoman, District 5, referred to A.B. 372 and expressed excitement about the CD-ROM program.  The program would be coming alive in the schools and libraries throughout the state by highlighting and describing pivotal moments in Nevada’s history.  The 1999 legislature expressed support when it appropriated $50,000 to the Department of Museums, Libraries and Arts to begin the Nevada History CD-ROM project.  The department had used the funds in conjunction with other fund-raising efforts and developed a unique and worthwhile educational CD.  The agency was ready to complete the project and distribute the CDs throughout the state.  Mrs. Cegavske was pleased to have served as one of the project coordinators along with former department director, Joan Kerschner.  Over the last two years there had been a statewide effort to assemble written and photographic histories with materials provided by various state museums and other historical and cultural centers.  Additionally, oral narratives by a variety of citizens and lawmakers added to the quality of the CD.  The project had been an outstanding collaborative effort and Mrs. Cegavske wanted to take the opportunity to thank everyone who had participated.  The appropriation of $31,500 contained in A.B. 372 would provide:

 

·        $17,000 -- completion of narratives and documentation

·        $4,000 – production of 2,000 CD-ROMS

·        $7,000 -- 1,000 teacher packets

·        $850 -- 200 library information packets

·        $250 – press packets

·        $2,400 – postage

 

The CDs would be distributed to approximately 500 schools across Nevada and each school would receive two CDs and two teacher packets with associated materials.  Additionally, two CDs and two library information packets would be sent to 100 public libraries.  Finally, press packets would be forwarded to the media in association with a teacher awareness campaign.  Mrs. Cegavske thanked Chairman Arberry and the committee members for their time and support and asked if there were any questions.

 

Danny Lee, representing the Nevada State Library Association, asked the committee to seriously consider implementing A.B. 372.  Mr. Lee explained when he attended school, very little time was directed to teaching Nevada history and he thought it was important that all the people living in Nevada had knowledge of the state’s history.  The project presented Nevada history in a new format.  Mr. Lee said the state funding was minimal since a large portion of the funding had been federal.  On behalf of all the libraries in Nevada, Mr. Lee asked the committee to please implement A.B. 372.

 

Mark Stevens, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, asked Don Hataway to review the first round of the Governor’s recommendations on budget revisions.

 

Don Hataway, Deputy Director, Budget Division, said on March 9, 2001, the division submitted a memorandum to Mr. Stevens concerning recommended modifications to The Executive Budget.  Mr. Hataway stated there was some discussion concerning the recommendations, particularly in light of the potential that expenditures might have to be reduced after the Economic Forum meets in May of 2001.  Mr. Hataway referred the committee to a two-page spreadsheet (Exhibit H).  The first page contained state General Fund adjustments and the second page listed Other Fund adjustments.  Mr. Hataway had detailed backup on virtually every adjustment, and said if anyone had specific questions he would be happy to provide the backup.  The first line of the spreadsheet showed where the budget stood in terms of the ending fund balances between revenues and expenditures and that was the base.  The positive numbers were savings to the General Fund and the negative numbers were deductions against the General Fund.  Mr. Hataway reviewed the adjustments to the budget accounts contained in Exhibit H:

 

 

 

 

 

 

 

 

 

 

 

 

 

In response to a question posed by Ms. Giunchigliani, Mr. Hataway said the funding stream for Budget Accounts 2630 and 2631 was the state General Fund, and stated, based upon the Governor’s direction, cost-of-living adjustments were built into the budgets early in the process.  Ms. Giunchigliani asked about the 16 percent included in the budgets for utility costs and Mr. Hataway responded that those costs were also built into the budget early.  Mr. Hataway stated the Budget Division was tracking the rising utility costs very carefully.

 

Mr. Dini stated there was currently competition from other states and Indian gaming and asked Mr. Hataway to provide rationale for cutting Tourism’s reserves.  Mr. Hataway indicated the Budget Division felt the reduced reserve was adequate.  Tourism had a $3 million plus reserve projected at the end of FY2003.  The Budget Division felt Conservation and Natural Resources and Cultural Affairs also provided services that attracted and maintained the tourism base of the state.  Ms. Giunchigliani asked if one-shot funds would be used for ongoing programs.  Mr. Hataway said a reserve amount was no different than any other resource that was reviewed each biennium.  Mr. Hataway stressed if a budget had to be built based on guaranteed resources, the recommended budget would be totally different.  There were always estimates that would have to be addressed down the road – the biggest one this biennium was the use of the Inter-Governmental Transfer (IGT) funds and the Medicaid budget.  Mr. Hataway said all of the “holes in the budget” referred to for FY2002 and FY2003 did not compare in terms of dollars to the amount of money used out of the IGT reserves.  Ms. Giunchigliani referred again to holes in the budget, and Mr. Hataway stated if “hole” was spelled “whole,” he and Ms. Giunchigliani would be in agreement. 

 

Mr. Hataway referred to the second page of Exhibit H and stated the amounts were for Other Funds:

 

 

 

 

 

 

 

 

 

Mr. Hataway concluded review of the spreadsheet (Exhibit H) and said he would be happy to answer any questions.

 

Ms. Giunchigliani asked what was the fee increase recommended for Budget Account 4722, the Pollution Control.  Mr. Hataway stated a work program was submitted to the February IFC meeting that requested a contract for additional analyzers.  At that time the Governor had not approved the fees to be paid by the consumers.  The Governor had since indicated he had no problem with charging the consumers with the actual costs of the analytical work that the machines produced.  The contract was eliminated, which obviously eliminated a major expense in the budget.  In response to a request of Ms. Giunchigliani, Mr. Hataway agreed to provide a report indicating if there would be fee increases.  Ms. Giunchigliani asked Mr. Hataway to compile a report on the holes in the budget that might impact the next budget.  Mr. Hataway stated this was the seventh session he had been through and recalled the same discussions each session.  Mr. Hataway reiterated that the Budget Division looked at available resources when the budgets were constructed, and there was no guarantee that current revenues would be available in two years.

 

Mr. Stevens handed out a schedule (Exhibit I) to the committee.  Mr. Stevens thought it would be helpful for the committee to have an understanding of the revenue situation prior to budget closings. The front page (Exhibit I) detailed information on sales tax and gaming percentage fee collections to date.  Sales tax collections for the first seven months of FY2001 increased 5.1 percent compared to the same seven months of FY2000.  The Economic Forum projected a 5.9 percent increase in sales tax in the current fiscal year. Any shortfall would impact state revenues and the 2.25 cent local school support tax (LSST) included in the Distributive School Account.  For the first seven months of FY2001, sales tax was down approximately eight-tenths of a percent.  Gaming percentage fees were down for the first eight months of collections, a negative 2.3 percent in FY2001 compared to the previous eight months of FY2000.  In December 2000, the Economic Forum had projected a 5.9 percent increase in gaming percentage fees in the current fiscal year, and the fees were below projections.  Mr. Stevens stated the projections in his handout (Exhibit I) were not projections made by the Fiscal Analysis Division of LCB – the division was currently working on those numbers.  The handout would give the committee an idea of the extent of the revenue problem based on certain assumptions, and was not the official projection of LCB Fiscal.  For display purposes, the schedule utilized a 5 percent increase for sales tax in the current fiscal period and brought in percentage fees flat to provide an idea on the revenue impact.  The impact on the General Fund, both in revenues and the Distributive School Account, would be $44.7 million.  If the Economic Forum’s growth rates for sales tax and percentage fees were retained, the impact on the General Fund would grow to $47 million in the first year of the biennium and $49 million in the second year. 

 

Mr. Goldwater asked if Mr. Stevens had any thoughts on what was driving the lower sales tax collections.  Mr. Stevens stated the last few months gaming wins had been higher than collections.  Sales tax was down eight-tenths of a percent.  Mr. Goldwater thought on-line sales had started to impact the sales tax collections and the state budget. 

 

The meeting was adjourned at 10:57 a.m.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Linda J. Smith

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Assemblyman Morse Arberry Jr., Chairman

 

 

DATE: