MINUTES OF THE
SENATE Committee on Finance
Seventy-First Session
May 9, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:04 a.m., on Wednesday, May 9, 2001, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator William R. O’Donnell
Senator Joseph M. Neal Jr.
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATURES PRESENT:
Jon C. Porter, Sr., District No. 1, Clark County Senate, Nevada State Legislature
Valerie Wiener, District No. 3, Clark County Senate, Nevada State Legislature
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Carla Watson, Program Analyst
Mindy Braun, Education Program Analyst
ElizaBeth Root, Committee Secretary
OTHERS PRESENT:
Jolaine Johnson, Deputy Administrator, Air, Mining and Water Programs, Division of Environmental Protection, State Department of Conservation and Natural Resources
Donald O. Williams, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau
Brenda J. Erdoes, Legislative Counsel, Legal Division, Legislative Counsel Bureau
K. Neena Laxalt, Lobbyist, Nevada Propane Dealers’ Association
Noel Bonderson, Lobbyist, Air Quality Division, Washoe County District Health Department
Helen A. Foley, Lobbyist, Clark County Health District
Jim Parsons, Environmental Management Specialist, Chairman, Advisory Committee for the Control of Vehicle Emissions, Compliance Enforcement Division, Department of Motor Vehicles and Public Safety
George Pyne, Executive Officer, Public Employees’ Retirement System
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada
George Ann Rice, Assistant Superintendent, Human Resources Division, Clark County School District
Rick C. Bennett, Director, Government Relations, University of Nevada, Las Vegas, University of Community College System of Nevada
Frank Brusa, Lobbyist, Nevada Association of School Administrators
Gary H. Wolff, Lobbyist, Nevada Highway Patrol Association, Teamsters Local 14
Deborah K. Cahill, Lobbyist,Nevada State Education Association (NSEA)
Scott K. Sisco, Interim Director, Department of Museums, Library and Arts
Susan Boskoff, Executive Director, Nevada Arts Council, Department of Museums, Library and Arts
Fred L. Hillerby, Lobbyist, American Institute of Appraisers
Ron W. Sparks II, Director, Western Interstate Commission for Higher Education (WICHE)
Chairman Raggio:
I will open Senate Bill (S.B) 534 for the purposes of hearing Senator Porter’s testimony.
SENATE BILL 534: Makes various changes relating to control of air pollution. (BDR 40-794)
Jon C. Porter, Sr., District No. 1, Clark County Senate, Nevada State Legislature (Senator Porter’s prepared speech is exhibit c):
I am presenting Senate Bill 534 on behalf of the Legislative Commission’s Subcommittee on air quality programs in Clark County as established by S.B. 432 of the Seventieth Session.
SENATE BILL 432 OF THE SEVENTIETH SESSION: Directs Legislative Commission to conduct interim study of certain air quality control programs and Department of Motor Vehicles and Public Safety to implement certain programs of air quality control. (BDR S-54)
Senator Porter:
I am particularly pleased to present this bill because it reflects our position that the state needs to take a more active role in addressing local air quality problems.
In response to concerns raised by the subcommittee regarding the need for more accountability for local air quality programs, the administrator of Nevada’s Division of Environmental Protection (NDEP) presented a proposal for NDEP to oversee a biennial audit of Clark County’s air quality programs. The subcommittee adopted the following recommendation, which is incorporated in Sections 6 and 9 of S.B. 534:
Section 6 requires the local air quality agency in Clark County to conduct a biennial audit of air quality programs in the county as part of its programmatic responsibilities. Working in conjunction with NDEP and the United States Environmental Protection Agency (USEPA), the local agency would fund the costs of hiring an independent contractor to conduct a comprehensive program audit to include a detailed evaluation of the county’s ambient air monitoring, compliance, enforcement, permitting, and planning programs.
Section 9 requires the State Environmental Commission to establish criteria for evaluating the adequacy of local air quality programs in Clark County, and makes a formal adequacy determination based on the results of the audit. Should inadequacies be found, the commission would be required to establish the corrective measures that need to be taken. Also, it would require that a report containing the local air quality agency’s biennial audit report be prepared by the State Environmental Commission and provided to the Legislature.
A major issue consistently raised by members of the subcommittee and identified by the subcommittee’s consultant, Environ International Corporation (Environ), is the need for the state to provide increased oversight and technical assistance to Clark County in the area of air quality compliance. In particular, Environ recommended that NDEP play a bigger role in the development, review, and approval of state implementation plan (SIP) revisions. Most of the proposals recommended by the Southern Regional Planning Coalition were adopted by the subcommittee and are reflected in the following recommendations for legislation:
1) Require that NDEP be actively involved in developing, reviewing, and approving SIP revisions and be a party to SIP development.
2) Assign NDEP the lead role in setting regional haze standards.
3) Require that NDEP coordinate assessment of, and make recommendations regarding funding needs for, air pollution control programs throughout Nevada, particularly the local air quality programs in Clark County. The NDEP should take the lead in coordination with all involved federal, state, and county agencies to assess the funding needs, and it should investigate and apply for all available funding sources. Furthermore, the NDEP should establish priorities for the use of limited funding, and it should recommend appropriate legislation to the Legislature before each legislative session.
The subcommittee recommended legislation to expand the duties of NDEP relating to its implementation of Nevada’s alternative fuels program, and to require NDEP to work with the Nevada State Energy Office to evaluate, promote, and implement incentives for increased use of alternative-fueled vehicles. Public awareness and outreach efforts should be enhanced by these agencies.
According to NDEP, the repair of high-emitting vehicles is critical to successfully reducing mobile source pollution, and, therefore, to achieving and maintaining ambient air quality standards. Furthermore, NDEP reports that a pilot program, recently conducted by the Department of Motor Vehicles and Public Safety (DMV&PS) and Clark County resulted in the repair of over 1,100 vehicles that failed smog check tests and were owned by individuals who could not afford to pay the repair costs.
Finally, the subcommittee recommended legislation to authorize and require NDEP to develop incentive programs for repairing high-emitting vehicles. That concludes my presentation on S.B. 534.
Chairman Raggio:
Have you examined the fiscal note to this bill?
Senator Porter:
Yes, I have Mr. Chairman.
Chairman Raggio:
I have looked at the amendment and it does not substantially change the role for NDEP.
Senator Porter:
We have a number of proposals this morning that should substantially change the fiscal note.
Jolaine Johnson, Deputy Administrator, Air, Mining and Water Programs, Division of Environmental Protection, State Department of Conservation and Natural Resources:
We have been engaged with Senator’s Porter’s committee from the start of that committee to address these suggested increased responsibilities for NDEP to help the Clark County air quality program along. We support the concepts of additional support and we have prepared a fiscal note that indicates there are substantial resources necessary in order to carry forth those new responsibilities.
Chairman Raggio:
We have a fiscal note prepared on April 9, 2001. Is there a new fiscal note?
Ms. Johnson:
There is not a new fiscal note. However, there has been discussion recently, which may provide us an opportunity to substantially reduce that fiscal note depending on how we amend this bill.
Section 3 of the bill requires NDEP to coordinate with local air pollution control boards to review the financial conditions of each program. The original language of this bill did not have this coordination clause. It provided that NDEP do a full review of the financial needs and condition of those agencies. I do not believe that is necessary. Those agencies have their own resources and they are best qualified to determine what their needs and financial requirements may be.
Chairman Raggio:
The bill still requires you to coordinate with the boards to review the financial condition?
Ms. Johnson:
That is correct, Mr. Chairman. That is not a problem. The fiscal note was based on NDEP actually taking some responsibility for doing a full evaluation of those programs. So, the coordination clause will allow NDEP to back off on the need for consultant services.
Chairman Raggio:
You would still have to establish the priorities for the use of the revenue?
Ms. Johnson:
We would suggest this language be changed so that we could continue to coordinate with the two agencies to establish those priorities, rather than our agency establishing the priorities.
Chairman Raggio:
Let me indicate to both you and Senator Porter that the committee will require proposed amendments to be submitted in writing as soon as possible before we can consider this bill.
Ms. Johnson:
We will do that right away and prepare written amendments in writing after today’s hearing.
We suggest that we work with those groups to establish priorities and to work together to identify those funding resources and apply for the revenue in separate forms because that is the way it is set up now. We also would like to come together to recommend legislation for future funding needs.
Section 4 of the bill establishes a requirement for SIP to be submitted by the county government in Clark County or counties with more than 400,000 in population. It would require our agency to take a much greater role. This probably is the most substantial part of the financial need of this fiscal audit for this bill. I believe we are coming to agreement that the counties should continue to do their state implementation plan, development and leave the state’s role “as is.” That role is a precursory completeness review and then forward that, on behalf of the Governor, on to USEPA, which does a full review of those SIPs.
It should be noted that the counties also are extensively involved with the USEPA as they develop those SIPs. Generally, those are ready for a USEPA full review and approval by the time they get to USEPA.
Chairman Raggio:
What change would you suggest in Section 4 to alleviate the fiscal impact?
Ms. Johnson:
We are suggesting completely eliminating Section 4. That will substantially cut the needs for the fiscal program. Section 5 of the bill is an important program. It states that the commission shall adopt regulations that establish measures for control and reduction of regional haze. This also has some resources associated with it. The fact is that this program is going to have to go forth whether this bill is processed or not. If we are not able to work through and find the resources for this provision in Section 5, at this point our agency will have to come back to the Interim Finance Committee (IFC) to request resources for this program. It is a federal mandate and does have to go forth.
Chairman Raggio:
Section 5 would be statewide?
Ms. Johnson:
Yes, it is statewide.
Chairman Raggio:
You are saying it is necessary, and if this bill did not pass, NDEP would have to request funding from IFC?
Ms. Johnson:
Yes, Mr. Chairman.
Chairman Raggio:
Are they eligible for this program to come to the IFC? You will have to check that because there are certain prerequisites to request funding from IFC. There must be some factor in your budget that alludes to your ability to request such funding. If you are saying this, we may have to look at NDEP’s budget.
Ms. Johnson:
I appreciate your informing me, Mr. Chairman. We will look at that issue as we consider further revision of this bill and when we talk to committee staff.
Section 6 of the bill requires that a county whose population is 400,000 or more to provide for a biennial audit or a full program audit. Generally, this is a requirement for the county to hire the contractors to do this and should not have any substantial impact on NDEP.
Chairman Raggio:
Would there be any role NDEP would play in your responsibilities dealing with this section?
Ms. Johnson:
There is a role in subsection 4 of Section 6 where our agency is involved with the county and with USEPA in establishing the criteria for what is a good program and then in comparing that program in Clark County against those criteria. We can do that with existing expertise and resources, so there is no fiscal impact from Section 6.
Section 8 discusses local air control pollution boards in counties whose population is greater than 400,000.
Chairman Raggio:
Why is that section being deleted? Why is the language defining a local air pollution control board being stricken from that section?
Ms. Johnson:
Mr. Chairman, I do not know the answer to that question.
Chairman Raggio:
Does Mr. Williams know the answer to that question?
Donald O. Williams, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau:
It appears likely to me that section may be more of a legal housekeeping matter. Section 2 of the bill now includes the definition of “local air pollution control board,” and I am assuming Section 2 precludes the need for restating that definition in Section 8.
Ms. Johnson:
Section 9 starts out with deletion of certain language for purposes of housecleaning. Then Section 9 indicates that on or before January 31 of each numbered year, the State Environmental Commission shall review these programs. Our discussions are suggesting this provision also be deleted in that the county will have to bring its audit directly to the Legislature and not through the commission. Again, this is to save time and resources.
Chairman Raggio:
Why would that be appropriate, for the Legislature to be the reviewing body, rather than your agency?
Ms. Johnson:
As the legislation is set up now, the county has direct legislative authority and responsibility for its air pollution control program. The State Environmental Commission has some responsibility. If it is brought to their attention that the program is inadequate, the commission has some authority over that. These provisions require regular review of those programs by the commission and the agency. The suggestion at this time is that we will eliminate those requirements to save those funds.
Chairman Raggio:
What about Section 10 and Section 11?
Ms. Johnson:
Regarding Sections 10 and 11, the agency feels it has current expertise and resources and is engaged with these other agencies already on these topics. We can carry through those provisions, as amended, with existing resources.
Chairman Raggio:
Can you speak for DMV&PS and the Department of Business and Industry (B&I)?
Ms. Johnson:
I cannot, Mr. Chairman.
Chairman Raggio:
I suggest you work with Senator Porter and bring in the proposed amendment, as well as a new fiscal note based on the proposed amendment.
I am going to switch from this bill for the moment. I only opened S.B. 534 to accommodate Senator Porter. We need to look at S.B. 560 and have Ms. Erdoes give us a review of the bill.
SENATE BILL 560: Makes various changes to provisions relating to employment practices and prevailing wages for public works. (BDR 28-559)
Chairman Raggio:
If the committee will remember, we had a question on S.B. 560 when we heard this bill on May 2, 2001. The issue that arose dealt with section 9 where the law for the past 65 years had indicated that, “Any public body and its officers or agents awarding a contract shall take cognizance of complaints of and determine whether a violation has been committed and inform the labor commissioner of any such violations.” We wanted to clarify that so it is in line with the Legislature’s intent that public bodies investigate complaints, not the state labor commissioner as indicated by other interested persons.
Again, the issue was the possibility of a shifting of burden in the investigation of complaints in the first instance to the public body awarding the contract. Those representing the public bodies felt that there was such a shift in that the labor commissioner held this responsibility. The issue is, should this function be decentralized and performed by various local governments, or should the function remain centralized, being performed by the state labor commissioner. In light of those concerns, we would like your opinion, Ms. Erdoes.
Brenda J. Erdoes, Legislative Counsel, Legal division, Legislative Counsel Bureau:
The best I can tell you is that, in looking at the old section, which began some time ago and is quite similar to the 1937 act that first came into being, these two subsections were contained in one sentence. If you read it that way, it actually makes this clearer in terms of what was intended. Section 7 of the 1937 act said:
That it shall be the duty of any public body awarding a contract, and its officers and agents, to take cognizance of complaints and violations of the provisions of this act committed in the course of execution of the contract; and, when making payments, the contractor money becoming due under said contract to withhold and obtain therefrom all sums forfeited pursuant to the provisions of this section; and, further, the terms of this act provided that you cannot withhold retainer or forfeited money without having a full investigation.
What I would suggest to you is that this is a change. Obviously, it is a change from “take cognizance of.” I think it is a shift in duties. It is a long-standing rule of statutory construction that the Legislature will not be presumed to mean something that they could have said, but chose not to. Taking that into consideration in this case, I suggest that the Legislature in 1937 did not mean to say that public bodies had to investigate every complaint they received.
However, it is clear that what they meant is that public bodies have to pay attention to, and carry out, the provisions of this act in their contracts. They have to include a stipulation in each contract saying that they will comply. I suggest this language states “investigate possible violations.” It does not say the public bodies have to investigate every complaint. I suggest it is a change, but not a shift in the duties per se.
Chairman Raggio:
In your opinion, the proposed language change in the first reprint of the bill is appropriate? That would mean “investigate possible violations” is just that, and public bodies do not have to conduct a full investigation in all matters?
Ms. Erdoes:
Yes, that is what I am saying. Even if a complaint came in, if they had investigated that particular complaint before some contractor that complains every time they lose a bid or something like that, they may not investigate that complaint. But, it would mean they would have to pay attention.
Chairman Raggio:
Does the committee have any questions of Ms. Erdoes?
Senator Neal:
I just want to point out that Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Department of Business and Industry, was correct in his interpretation of this bill during testimony conducted on May 2, 2001.
Chairman Raggio:
Yes, Mr. Johnson is doing a good job. Thank you Ms. Erdoes. Committee staff, were there any amendments to this bill?
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
No. The only reason this came to the Senate Committee on Finance was the fiscal note. However, the Office of the Attorney General’s memorandum indicated there would be no fiscal impact.
Chairman Raggio:
If that is satisfactory to the committee, I will accept a motion to do pass this bill.
SENATOR NEAL MOVED TO DO PASS S.B. 560.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
Let us take up the matter of S.B. 277, which was heard in this committee on April 13, 2001. Committee staff has distributed Amendment No. 649 (Exhibit E) to S.B. 277.
SENATE BILL 277: Requires posting of sign in food establishments in which alcoholic beverages are sold that warns of dangers of drinking such beverages during pregnancy. (BDR 40-24)
Valerie Wiener, District No. 3, Clark County Senate, Nevada State Legislature (Senator Wiener’s prepared speech is Exhibit D):
Mr. Chairman, at that time of the hearing, the committee had questions on this bill. In order to resolve those, I brought an amendment that addresses the committee’s concerns (Exhibit E).
Chairman Raggio:
There was testimony that the cost of the signage could be donated. We do not want to pass any bill that relies on donations alone. I do not believe we can do that if it is mandatory, unless the source of the donation has been assured. We heard testimony from Senator Wiener that the March of Dimes would provide funding. Do we have reasonable assurance of that? Is that what this amendment does?
Senator Wiener:
The committee had concerns about the opportunity to receive those donations, so we have an amendment in the bill that allows the receipt of those donated signs for the purposes of placing them in food establishments that serve alcoholic beverages by the drink.
Chairman Raggio:
What is the estimated cost?
Senator Wiener:
The cost did not come out, Mr. Chairman. However, in the testimony from Las Vegas, we heard that the March of Dimes would be willing to absorb the cost of statewide expenses.
Other concerns the committee had were that we remove language about those places that do not sell beverages by the drink. We have also addressed that issue by deleting references in lines 38 through 40 in Section 2. So, this would only involve food establishments that sell beverages that would be consumed on the premises.
The March of Dimes testimony assured us, and allowed for language in the amendment, that they would disperse those signs as a donation for statewide distribution. One of the other concerns addressed by Helen Foley, representing the Health Authority in southern Nevada was that, as they enforce the civil penalties of this legislation, the authority would enable them to recover the actual costs of enforcing the civil penalty. That language has also been added in Section 3.
We have also removed language regarding the $100,000 appropriation and that is by the deletion of Sections 5 and 6. Also, the amendment applies language that the enforcement date would occur on October 1, 2001, to give those restaurants and other locations that serve these beverages by the drink an opportunity to get up to speed on the requirement for such signs.
Senator Coffin:
Is there any proof that a glass of wine or a bottle of beer causes fetal alcohol problems in fetuses?
Senator Wiener:
We do not know which drink starts the problem. There is no science that proves that, but we do know now that the message for a pregnant woman is, “If you are thinking of getting pregnant or are pregnant, do not consume alcohol during your pregnancy.”
We know that the more the pregnant woman drinks, the more severe the problem becomes. There are five levels of fetal alcohol syndrome (FAS), and at its severest level it produces mental retardation 2½ to 3 times more often than Down’s Syndrome. Each FAS child now is estimated to cost about $4 million in extra social costs over a lifetime.
Senator Neal:
By this legislation and amendment, are we saying that notices that appear on a bottle of beer or wine are not sufficient?
Senator Wiener:
This legislation addresses alcohol sold by the drink for consumption on the premises in restaurants and other places where food is sold. It would be posted in the women’s restroom. Often, when sold by the drink, there is no warning on the bottle of beer or glass of wine, and these women may not see the notice.
Chairman Raggio:
Are there any further comments or testimony? There being no further testimony on S.B. 277, let us go back to the other bill, S.B. 534. Who else wishes to speak on this measure?
K. Neena Laxalt, Lobbyist, Nevada Propane Dealers’ Association:
We have an amendment (Exhibit F) our organization would like to propose to S.B. 534. I presented this amendment to Senator Porter and Allen Biaggi, Administrator, NDEP, and both have agreed to this amendment.
Essentially, the amendment modifies Section 11 after the words “to use alternative fuels” by inserting the words “and clean-burning fuels.” With that insert, we would also like to include the definition of “clean-burning fuel,” which means any fuel as defined in Title 10, Chapter II, Subchapter D of the Code of Federal Regulations, Part 490, Section 2.
Last week I brought before this committee S.B. 478, which was a tax exemption for clean-burning fuels.
SENATE BILL 478: Exempts clean-burning fuel from tax on special fuels. (BDR 32‑137)
Ms. Laxalt:
We agreed to remove the fiscal impact to that bill, which left only a definition. So, you will see me coming before you again with a similar amendment, doing what this same amendment does.
Chairman Raggio:
If we process this bill and put this language in S.B. 534, do we still need S.B. 478?
Ms. Laxalt:
It appears that I am hedging my bet, but yes. This particular bill, S.B. 534, does a great more than what S.B. 478 accomplishes.
Noel Bonderson, Lobbyist, Air Quality Division, Washoe County District Health Department:
I want to comment on Section 3 of S.B. 534, which mandates coordination of financial oversight and the setting of priorities of local air quality programs implemented by the Department of Conservation and Natural Resources. While we would welcome the review of our budget by any appropriate body at any time, we believe it is critical for local jurisdictions to maintain authority for implementation of air quality programs.
I am here to state that the Washoe County District Health Department is fiscally responsible and financially sound in its administration of air quality programs. Although we still face challenges in maintaining good air quality, we have developed and maintained a successful, cost-effective program in Washoe County. The way to change this is to add the 400,000-population limit as stated in Section 4.
Chairman Raggio:
There was a suggestion that you are looking at subsection 3, where the state would establish the priorities. They were recommending modification of that subsection. The first subsection says the state would coordinate with the local air pollution control boards. Do you object to any coordination?
Mr. Bonderson:
No. However, I was not sure exactly what that meant.
Chairman Raggio:
So, you are indicating to this subcommittee you want to retain the authority you now have to establish your own budgets and priorities. You would not object to some coordination with the state. The state may actually have some helpful input.
Mr. Bonderson:
Absolutely. We want to maintain that authority in our budgets.
Chairman Raggio:
Thank you. Are there any others to testify on this bill?
Helen A. Foley, Lobbyist, Clark County Health District:
We support this legislation. We hope the bill encompasses the entire state and not just Clark County. The way the bill is to be rewritten, with the strong coordination clause, it is appropriate. When we developed state implementation plans telling USEPA how we are going to clean up a problem, the word was “state implementation,” not federal intrusion.
Although the counties are responsible for putting this together, the state does have a major role. The consequences can be dramatic, in that federal highway revenue, wastewater treatment plant revenue, and everything else can be removed, and we could end up with federal implementation plans where USEPA comes in and runs the state’s programs. We like the idea there will be state oversight.
Chairman Raggio:
Are you endorsing the proposed recommendations that were made because they do not extend statewide?
Ms. Foley:
Senator, we support that which discusses coordination with local air quality programs.
Chairman Raggio:
That would be statewide.
Ms. Foley:
That would, and we support that.
Chairman Raggio:
The committee will look at the amendments when they are submitted. Thank you. Are there any questions on this bill?
Senator Jacobsen:
I have concerns about the audit. Would the audit or the observation of the air quality be on a daily basis? Also, would that determine what the cause of the pollution may be, whether it is agricultural burning, pollution from auto emissions, or from other sources?
Chairman Raggio:
Is there someone here who can answer Senator Jacobsen’s inquiry? Also, is there anyone here from the Department of Business and Industry or the Department of Motor Vehicles & Public Safety? If there is, and you have a comment, the subcommittee would like to hear that now.
Jolaine Johnson, Deputy Administrator, Air, Mining and Water Programs, Division of Environmental Protection, State Department of Conservation and Natural Resources:
The Senator was asking if the oversight of the regional haze program or the oversight of the SIP program would evaluate all of the potential causes of pollution. The audit that is proposed in this bill is a general program audit. The audit addresses issues such as whether they have adequate monitoring; whether they have adequate enforcement, compliance, staff, and those sorts of things.
The general responsibilities for state implementation plans require that the entity responsible for it to conduct a full evaluation of the inventory of those pollutants. There would be a necessity to understand that it might change seasonally. In order to develop a program that will place an area into attainment of inventory for pollutants, it is absolutely necessary to know where those pollutants are coming from to establish control measures accordingly.
Senator Jacobsen:
I am concerned about the rural areas because most of our pollution seems to come over the hill from California. Or, take for example, the haze that was here a few weeks ago from China. How do we control something like that?
Ms. Johnson:
We do not, Senator. USEPA acknowledges that those kinds of events are beyond our control, and, USEPA does not hold our agency responsible to alleviate the pollutant through our emission sources. It is also necessary to understand the division does not monitor rural areas in Nevada located in “nonattainment for those pollutants.” We are looking at one area in the southern part of Nevada that is approaching a impurity level that could necessitate our review. However, we do not have to conduct “attainment implementation plans” for Douglas County, Lyon County and other rural counties because we do not have the high concentration of pollutant sources in Nevada’s air quality that mandates our division’s examination.
Chairman Raggio:
If you are referring to the audit in Section 6, presently it only applies to Clark County. There is a requirement for review in Section 5 that would still be in the bill on the regional haze.
Ms. Johnson:
That is correct, Mr. Chairman.
Jim Parsons, Environmental Management Specialist, Chairman, Advisory Committee for the Control of Vehicle Emissions, Compliance Enforcement Division, Department of Motor Vehicles and Public Safety:
If the programs go forward as they have in the past, we do not have any problem with Section 10 where DMV&PS is cooperating with the other state agencies
Chairman Raggio:
Thank you. We will close the hearing on S.B. 534. At this time we will open the hearing on A.B. 555.
ASSEMBLY BILL 555: Makes various changes to provisions governing public employees’ retirement. (BDR 23-547)
George Pyne, Executive Officer, Public Employees’ Retirement System:
Good morning, Mr. Chairman. I am here today on A.B. 555, which is the Public Employees’ Retirement System (PERS) housekeeping bill, which contains modifications to the Retirement Act.
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System (Ms. Bilyeu’s prepared speech is Exhibit G):
Section 1 of the bill beginning at line 3 on page 1 is PERS-requested reemployment modifications designed to assist our employers with reemployment of retirees in areas of critical labor shortage. This language is the result of the study PERS conducted under A.B. 74 of the Seventieth Session.
ASSEMBLY BILL 74 OF THE SEVENTIETH SESSION: Provides temporarily that retired public employees may accept certain employment with University and Community College System of Nevada without affecting their retirement benefits and requires public employees’ retirement board to conduct study of effect on public employees’ retirement system of employment of retired public employees by public employers participating in system. (BDR S-1342)
Ms. Bilyeu:
PERS surveyed pension systems across the country regarding retiree reemployment, and held well-attended employer and employee association meetings. The result of this collaborative effort is the bill before this committee today.
The Public Employees’ Retirement Board is requesting that our reemployment restrictions be lifted in positions determined by our employers to be suffering from a critical labor shortage. The governing body of the employer will make this determination. For the state, the State Board of Examiners will determine that, and the Board of Regents will do so for the University and Community College System of Nevada (UCCSN). The Supreme Court will determine positions of critical labor shortage within the judicial branch; the State Department of Education will do so for school districts, and the governing body of local jurisdictions will do so for positions within their respective jurisdictions.
When making these designations, the governing body will have to take into consideration an applicant’s turnover history, the number of openings versus qualified candidates, the length of time the position has been open, and the history of out‑of-state recruitment.
This section allows all retirees to apply for positions deemed to be experiencing a critical labor shortage, even those who retired with an early retirement reduction. They may go back to work in one of these positions upon attaining the age needed to have retired without penalty. Once you make it to 10 years at age 60, even though you retired at age 58, once you hit the age of 60, you will be able to apply and come back to work in these positions.
Based on the advice of USSSN’s actuary, this exemption from PERS reemployment restrictions does not require advance funding because of the experience study requested in Section 8 of the bill, and the sunset provision provided in subsection 2 of Section 9 of the bill. UCCSN will bring the issue back to the 2005 legislative session, provided the actual experience is reviewed and costs associated with this proposal are recognized for continuation at that time.
Chairman Raggio:
This ties in with Section 7?
Ms. Bilyeu:
That is correct. The language in Section 7 is the actual reemployment restrictions provision.
Chairman Raggio:
When there is a critical labor shortage established, the retired employee is rehired, accepts employment or even an independent contractor position, then what happens?
Ms. Bilyeu:
What happens is the reemployed retirees have an option to reenroll in PERS, if they so chose. They are not required to do so, which is current language in our statute.
Chairman Raggio:
Would they continue to collect their retirement?
Ms. Bilyeu:
They will continue to collect their pensions without restriction. Currently we have restrictions of how much money a retiree may earn working in the public sector. This provision exempts a reemployed retiree from that limitation.
Chairman Raggio:
When a rehired retiree works another 5 years, what happens then?
Ms. Bilyeu:
What happens is they have the right to reenroll in PERS, if they so chose. If they make it to 5 years of covered employment in that second period of time, there were modifications made to our bill, which allows them to select another option and another beneficiary.
Chairman Raggio:
So, if a rehired retiree works, they are still collecting their retirement, but they may or may not participate in PERS, is that the option?
Ms. Bilyeu:
That is correct, Mr. Chairman.
Chairman Raggio:
So, they could earn an additional, separate retirement, or can they add to the retirement they are collecting?
Ms. Bilyeu:
If rehired retirees are employed for 5 years, they can have separate retirement benefits. If it is for less than that period of time that is simply calculated as part of, or an addition to, the benefits they are currently receiving.
Chairman Raggio:
So, rehired retirees could get additional enhanced retirement benefits based upon the additional retirement even though they may be collecting their retirements?
Ms. Bilyeu:
That is correct, Mr. Chairman.
Chairman Raggio:
That would come into place when? When they leave employment?
Ms. Bilyeu:
That is correct, Mr. Chairman.
Chairman Raggio:
Would there be adjustments they would get to their retirements in an enhanced payment?
Ms. Bilyeu:
That is correct, Mr. Chairman. It is what we call a “re-retired individual.”
Chairman Raggio:
What areas of employment or positions would qualify under this bill? For example, I hope discussion of this bill in the Assembly would include teachers, health personnel and others?
Ms. Bilyeu:
Absolutely. The employers themselves will make the determinations as to what positions they want to use in the critical labor-shortage areas. The school districts will be able to talk to the State Board of Education who will make those determinations for the school districts. For the state, there are various positions that they are having difficulty filling. We have talked to the Department of Personnel about this matter. The State Board of Examiners will be able to make those determinations. So, it applies across-the-board to all of our employers.
Chairman Raggio:
This bill does not require any adjustment to the contribution rate?
Ms. Bilyeu:
Not at this time, because of the language contained at the end of the bill concerning an experienced study. When we conduct that study and we come back to the Legislature, there is a sunset provision on this bill. It is to sunset in 2005 unless the costs associated with it, if there are any once we look at that experience study, are recognized for continuation of the benefits.
Section 2 of the bill on page 2 at line 32, provides for the creation of an Assistant Investment Officer position to assist with the daily management of the investment portfolio. We previously presented the needs for this position during our budget testimony before this subcommittee. Briefly, the position will be responsible to the Investment Officer and will perform duties at the middle portfolio management level.
The Assistant Investment Officer would have the authority to make the multi‑million dollar investment decisions that are required daily within the scope of the investment program administration. The investment program has experienced significant growth in activity over the recent past, and we believe this trend will continue. The portfolio is projected to grow to over $19 billion, managed by up to 30 external investment managers.
Section 3 of the bill at page 3, line 15, broadens the Public Employees’ Retirement Board’s rule-making authority to include the ability to adopt regulations to keep the plan qualified under the Internal Revenue Code (IRC), as well as to take advantage of new federal laws, which may provide our members with opportunities otherwise not available to them until we can come to the next legislative session.
Chairman Raggio:
Why is that necessary? Do you not have that authority now?
Ms. Bilyeu:
The IRC modifications are necessary for legislative approval because the Retirement Act itself is the plan document. What we are asking to do here is simply allow the rule-making authority, so that when we have to make modifications to keep the plan qualified, we can do so during the interim. Additionally, there are provisions that the U.S. Congress is going to be considering, which will allow the “roll-ins” of certain types of deferred compensation program revenues, such as Section 457 of the IRC or a Section 403(b) educational plan, which would be rolled in for the purchase of service. Currently, our plan does not allow for that. What we want to be able to do is take advantage of that once the U.S. Congress actually does pass that law.
Chairman Raggio:
What is the reason for the language in Section 3 of the bill, which states Nevada Revised Statutes (NRS) 286.200 is hereby amended to read, “Subject to the limitations of this chapter, the board shall, from time to time, establish rules and regulations for transacting its business and for administering the system as a public agency.”
Ms. Bilyeu:
If you will look at NRS 286.110, there is a section that creates PERS as a public agency supported by administrative fees. That is language that is taken from an earlier section in the Retirement Act. We are simply carrying that language over to NRS 286.200.
Section 4 is a restriction on the purchase of service credit required by the IRC. Basically, it provides that a member who first becomes a member after January 1, 2000, and who becomes eligible to purchase service (meaning they attain 5 years of service credit in the plan), may only make purchases of service if they are actively employed and participating in PERS. So, inactive members, even if they were vested in the future, would be prohibited from making purchases in the plan.
Additionally, if a member enters into an agreement to purchase service and defaults on the agreement, the IRC prevents PERS from refunding the employee contributions on the agreement unless he or she is no longer employed with a participating public employer. If the member defaults and is still an active member of PERS, the IRC requires the member’s service be prorated to the amount paid, but no refund is available. To refund while actively employed is interpreted by the Internal Revenue Service to be an “in-service” distribution, which is prohibited.
Chairman Raggio:
So, this conforms to the IRC?
Ms. Bilyeu:
That is correct, Mr. Chairman.
Section 5 of the bill keeps our refund provisions in sync with the restrictions on refunds under our purchase-of-service provisions previously described. Section 6, beginning on page 5, line 34, modifies employer-reporting requirements to place the onus on our employers to provide accurate payroll information on forms prescribed by the board. Most employers do a terrific job complying with the reporting requirements of PERS; however, we do have problems with employers failing to provide accurate information to us, complicating our ability to properly provide service credit updates to our member accounts.
This modification strengthens the language related to the employer’s responsibility to report accurately. Additionally, when an employer does not timely file its report, or the funds associated with the report, PERS would like the ability to immediately assess a penalty, rather than waiting until we receive some balance of the funds. The way the law currently reads, PERS may only assess a penalty on the unpaid balance prorated for the period delinquent, and it can only be assessed when we actually received the report and the funds. Under the proposed language, PERS would assess a penalty based on the previous month’s report amount, and it would start the clock ticking.
Section 7 of the bill contains a provision designed to clarify a confusing section of our statute. NRS 286.520 if modified as requested, will contain language regarding the ability of an employer who hires a retiree, and that retiree elects not to participate in PERS for that employer, to set up some type of retirement account on behalf of that reemployed retiree. It has never been PERS’ intent to restrict such action on the part of employers.
As an example, Washoe County came back last session and asked for an amendment to allow for its elected officials to have a separate retirement account set up. We believed that they could do that anyway. However, they asked for the language. Because that additional language was placed into the statute, it now appears that only elected officials have the opportunity to have a separate retirement benefit and that is not the intent. The intent is for employees to have the opportunity to do this, if they chose.
Chairman Raggio:
Would these persons pay into Social Security?
Ms. Bilyeu:
There are questions about whether they can ever participate in Social Security.
Chairman Raggio:
If they chose not to participate in PERS, do they not have to pay Social Security?
Ms. Bilyeu:
Once you enter retirement status, there are rules constructed by the Social Security Administration (SSA) that may prohibit a person’s participation in that program. So, this is an optional program where a retiree may set up an Individual Retirement Account (IRA) or some kind of deferred compensation program.
Chairman Raggio:
If you did not participate in PERS, I cannot believe that the federal government would let a retiree work and not pay into Social Security.
Ms. Bilyeu:
This is an area that is, at best, confusing, but it is something we have discussed with UCCSN. It is my understanding that the SSA does not want a person to participate once he or she retires from this program.
Section 8 of the bill is the section requiring an experienced study of the retiree reemployment provisions as modified in the bill. Section 9 contains the effective date of the bill of the bill as well as the sunset language for the retiree reemployment provisions.
Chairman Raggio:
Will you discuss the amendments that were made to this bill and the reasons for them in Section 1?
Ms. Bilyeu:
The amendments that were made in the Assembly were done for clarification purposes. The way the bill was originally drafted, it was going to be limited to those people who retired with an unreduced benefit. We did not want to restrict the pool of retirees that could come back to work. What we wanted to do was make sure that no one would simply retire, for instance, with only 26 years of service, take the early retirement reduction, and immediately go back into the workforce. So, that is why we asked for the amendment that said persons who retired with a reduced benefit can go back to work in one of these positions, but they must wait until their full age of eligibility would have been. So, the person who retired at age 56 could come back and work at age 60, if he or she did not have 30 years of service.
Chairman Raggio:
Subsection 5 was added, which indicated a “participating public employer shall not refuse to reemploy a retired employee who is eligible pursuant to this section solely on the basis of the date of his retirement.” What was the reason for that subsection?
Ms. Bilyeu:
Assemblyman Bache asked that this amendment be placed into the bill on the basis that an employer had passed a rule, or was in the process of doing so, indicating that he or she would not consider retirees for reemployment if they had been retired after September 1, 2000. Mr. Bache did not want employers to have a date limiting the ability of those retirees to come back to work.
Chairman Raggio:
I still do not understand the reason for that. Why is that necessary?
Ms. Bilyeu:
This was done on the basis of an employer who wanted to prevent hiring people who had retired after the September 1, 2000, date. Quite frankly, I am not familiar with the rationale behind why that rule was being adopted.
Chairman Raggio:
We would like some clarification on why that provision should be retained.
Ms. Bilyeu:
Certainly. The amendment I just spoke of concerning the ability of an employer to set up a separate account was one of the amendments added by the Assembly. Finally, the sunset provision was added, which was one of the recommendations of the A.B. 74 of the Seventieth Session study.
Senator Rawson:
I would first disclose that I am an employee of UCCSN. UCCSN is one of the employers that can participate. Most of the UCCSN employees are on the Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA‑CREF) retirement plan. You keep mentioning PERS. Is this simply a PERS issue, or does it affect those retirement plans also?
Ms. Bilyeu:
This is simply a PERS issue. This is a retiree reemployment restriction that we are trying to lessen. Obviously, there are people at UCCSN who participate in PERS, both at the professional and classified levels and that is why the Board of Regents was placed in this measure to determine critical labor shortages for UCCSN. I am unfamiliar as to how the TIAA-CREF retirement plan works for reemployment.
Senator Rawson:
Is it mostly older employees that are in PERS in the UCCSN, or are they still putting employees under PERS?
Ms. Bilyeu:
There is a provision in NRS that states that, if you have had any service credit in PERS and you go to work at UCCSN, you must retain your service and must participate in PERS
Senator Neal:
How many other states have adopted this particular system, do you know?
Ms. Bilyeu:
When we did our national survey, we found systems across the country that are dealing with critical labor-shortage issues and doing various kinds of approaches. Our approach is a hybrid approach from different states looking at trying to maintain the system on a sound, fiscal level, but at the same time reacting to the labor shortage. Our particular approach is not like any other state. It is similar in that there are states that allow people to come back to work without restriction at all. There are those states that prohibit reemployment completely. What we tried to do is come to the middle ground.
Senator Neal:
What is the length of time in which a person may be able to come back to work?
Ms. Bilyeu:
There is no restriction on this bill as to the amount of time that the person could come back to reemployment. In fact, even the sunset provision contained in the bill does not preclude termination of those retirees who are already reemployed in those positions. They would, or could, continue past the 2005 session.
Senator Neal:
Would the benefits received by a reemployed retiree come from his retirement, or would they be received from his reemployment?
Ms. Bilyeu:
The issue as to how that individual would be reemployed by the local government or the state would be subject to an employment contract between them. That would be negotiated, or if the person came back into a position already created, it would be in the same fashion as any of the other employees. All we are looking at doing is making sure that we do not take away their retirement benefits during that period of employment. All of the other parts of that employment would be determined between the employer and employee.
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada (PORAN):
We speak in support of A.B. 555, especially the provisions that would allow the critical shortages, should that occur, in law enforcement. It is our position that we do not ever want to lower our standards, and this would provide the ability to local government and state employees to hire back law enforcement officers should the need arise. Currently, that need has not risen, but should it arise, it would be a good thing.
Chairman Raggio:
You have no objection to the bill in its present form?
Mr. Dreher:
No, Sir.
Chairman Raggio:
Thank you.
George Ann Rice, Assistant Superintendent, Human Resources Division, Clark County School District:
We speak enthusiastically in favor of A.B. 555. I would like to clarify the section that you had questions on. I was the person who sent out a memorandum that resulted in the Assembly Amendment on Section 1.
Chairman Raggio:
That was the amendment that was added to subsection 5 to Section 1.
Ms. Rice:
Yes. What I did was try to begin to seek out retired teachers that administrators would say, “I would be thrilled if this person would walk back into my school.” However, I did not want to encourage those who are presently teaching to bail out in order to come back under this provision. So, in the memorandum I said, “Please give me the names of teachers who have retired prior to August 2000,” so we would not be encouraging our present staff to bail out in order to come back.
Chairman Raggio:
That is what I was concerned about when I asked the question. Why is this provision necessary?
Ms. Rice:
We can live with this provision.
Chairman Raggio:
I would rather you live without it. Thank you for your clarification.
Ms. Rice:
In addition to using substitutes, we are looking for retired teachers to come back to fill positions because we are going to need quite a few teachers. This would also allow us to employ retired police officers and fire fighters, who were able to retire early, who have degrees, and who would like to go through our alternative programs and be in the classroom.
Chairman Raggio:
Do these people have to meet certification requirements?
Ms. Rice:
Absolutely.
Senator Rawson:
You would not necessarily want them to wait until they are age 60 to come back into education, would you?
Ms. Rice:
We agree with this provision of the bill because we do not want people bailing out early. It would be a “zero sum game” for us.
Senator Rawson:
I understand, but you could have a police officer that retires with 20 years’ employment and is 55 years old.
Ms. Rice:
Exactly, and that is why they say “receiving full benefit.” That would be the policeman who did retire at some period of time.
Senator Rawson:
If you were going to restrict employment to those who retired before the year 2000, why not write that so it does not have to be addressed again?
Ms. Rice:
We believe we can live with this. If we needed a teacher for some special education program, and no others were available except a person who had just retired, we would not want to be restricted from recruiting that person.
Senator Rawson:
Rather than putting in a specific date in legislation, we should include a requirement, such as “within the last year.”
Ms. Rice:
There is no date included in the legislation.
Senator Neal:
Would you give me an idea as to what contract you would use to hire retired individuals? Would it be a standard contract?
Ms. Rice:
We have not addressed that issue with our bargaining entity, but we believe they would come under the standard contract, as it currently exists. There would be no difference in a retired employee’s contract than for any other employee.
Senator Neal:
But they would not have to be part of a bargaining unit if you have an independent contractor.
Ms. Rice:
We do not intend to hire them as independent contractors because that would require them to set themselves up as corporations. We wanted these retirees to come under the regular, standard contract so that we could administer all of our provisions as they relate to our teachers under the same contract. We would prefer to have them under that contract because we do not plan to treat them any differently.
Chairman Raggio:
It appears the provisions regarding independent contractors may be needed to accommodate other types of employment status, as there are state agencies who may want to hire a former, retired employee as an independent contractor. Is that correct?
Ms. Rice:
Yes, Mr. Chairman. They could do that.
Rick C. Bennett, Director, Government Relations, University of Nevada, Las Vegas, University of Community College System of Nevada:
I support A.B. 555, and specifically the sections related to reemployment of retired public employees. The bill has been adequately discussed. I would like to take this opportunity to thank the PERS board and George Pyne and his staff for the manner in which they handled the study. They made every effort to keep all interested parties informed and aware of the results of the study. They welcomed our input and feedback and various options that were being considered. They did an excellent job of allowing all of us to participate as they worked on this bill.
Frank Brusa, Lobbyist, Nevada Association of School Administrators:
For the record, I am a PERS recipient. The Nevada Association of School Administrators supports A.B. 555 with all of its amendments.
Gary H. Wolff, Lobbyist, Nevada Highway Patrol Association, Teamsters Local 14:
For the record, the following people we represent support the bill. Those people and organizations include Nevada Highway Patrol Association, Nevada Department of Transportation, Department of Motor Vehicles & Public Safety, cities of Mesquite, Boulder City, North Las Vegas, Henderson, and the library districts of Las Vegas and Clark County.
Deborah K. Cahill, Lobbyist,Nevada State Education Association (NSEA)
We would like to register our support for A.B. 555. We believe it will help address a critical shortage area and we are concerned about standards for certification and licensure of teachers. We believe this will ease the strain. Thank you.
Chairman Raggio:
Are there any others on this bill? Are there any opposed to this bill? We will close the hearing on A.B. 555.
Committee, there are a number of bills we will consider for indefinite postponement that have not been heard and for which there have been no requests for hearing from the sponsors.
SENATE BILL 10: Makes appropriation to Department of Motor Vehicles and Public Safety for creation and maintenance of branch office in Fernley. (BDR S-605)
Chairman Raggio:
I am going to ask committee staff to contact the Department of Motor Vehicles and Public Safety on S.B. 10. I checked with Senator Amodei, who is the sponsor, and the only question is whether the department is considering it. I will obtain a report; otherwise, the bill can be indefinitely postponed. So, we will hold this bill for now.
SENATE BILL 11: Reduces number of years of service required for retirement of police officer or fireman at any age. (BDR 23-134)
Chairman Raggio:
S.B. 11 can be indefinitely postponed. It was covered in another measure dealing with early retirement.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 11.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 13: Provides for administration of program to provide grants for local treatment and control of invasive species of weeds that are not native to Nevada. (BDR S-638)
Chairman Raggio:
On S.B. 13, there was no request for a hearing by Senator Rhoads and he indicated this bill might be indefinitely postponed.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 13.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 97: Makes appropriation to State Public Works Board for construction of residence facilities at Great Basin College, Elko campus. (BDR S-697)
Chairman Raggio:
We will hold S.B. 97 because there is going to be an amendment to another bill that would eliminate the need for this bill.
SENATE BILL 135: Makes various changes concerning veterans’ homes. (BDR 37‑1032)
Chairman Raggio:
S.B. 135 was heard on April 13, 2001. Committee staff, could I have a status report on that bill?
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
This legislation sets up a gift account, which would redirect the proceeds from the sale of veteran’s license plates from the operating account of the Nevada Veterans’ Nursing Home account to this gift account. That is approximately $37,000 a year that would be transferred out of the veterans home account.
Chairman Raggio:
I will ask committee staff to contact Senator Care. The problem is this redirects revenue that would otherwise go to operating the veterans’ home. Senator Care should be contacted; otherwise, this bill can be indefinitely postponed.
SENATE BILL 140: Revises provisions and makes appropriations regarding educational personnel. (BDR 34-347)
Chairman Raggio:
S.B. 140 was heard on March 12, 2001, and has a large fiscal note that would be applied to Clark County, which is not included in The Executive Budget. It was not requested for any additional consideration.
SENATOR MATHEWS MOVED TO INDEFINITELY POSTPONE S.B. 140.
SENATOR JACOBSEN SECONDED THE MOTION.
Senator Rawson:
This bill provides an ongoing program and it allows for public school teachers to obtain national board certification.
Chairman Raggio:
This is the bill that has a fiscal note of $3.8 million in Fiscal Year (FY) 2001.
Senator Rawson:
Does The Executive Budget include the $3.8 million funding? Is funding for national board certification included in the $3.8 million?
Mr. Ghiggeri:
The Governor recommended allocations from the Distributive School Account (DSA) be used to fund national board certification.
Chairman Raggio:
S.B. 140 held only a portion of the fiscal note. There is no reason to hold these bills forever if we are not going to be able to fund them.
THE MOTION CARRIED. (SENATOR NEAL VOTED NO AND SENATOR COFFIN WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 158: Makes appropriation to Division of Forestry of State Department of Conservation and Natural Resources for creation of regional strike teams to assist in suppression of fires. (BDR S-724)
Chairman Raggio:
The next bill is S.B. 158, which is from the Senate Committee on Natural Resources. Senator Rhoads indicated this bill can be indefinitely postponed to assist the committee.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 158.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 162: Makes appropriation to legislative fund for use by Legislative Committee on Public Lands in awarding grants for certain projects relating to public lands. (BDR S-721)
Chairman Raggio:
Next is S.B. 162, which Senator Rhoads recommended be indefinitely postponed.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 162.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 187: Makes contingent appropriation to Western Folklife Center for completion of renovation to Pioneer Hotel Building that houses Center. (BDR S-1041)
Chairman Raggio:
Senate Bill 187, which has not been heard, and was introduced by Senator Rhoads. He requested this measure be indefinitely postponed.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 187.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 278: Requires establishment of program to provide supportive assistance to certain persons who obtain legal guardianship of their grandchildren. (BDR 38-541)
Chairman Raggio:
Senate Bill 278 was heard on April 4, 2001. There was a request for an amendment on this bill.
Senator Mathews:
Our companion bill was in the other house. We combined this bill with the Assembly bill. So, this bill can be indefinitely postponed.
Chairman Raggio:
I will accept your motion.
SENATOR MATHEWS MOVED TO INDEFINITELY POSTPONE S.B. 278.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 295: Provides for establishment of registry of putative fathers for purposes of facilitating termination of parental rights and adoption of certain children. (BDR 11-50)
Chairman Raggio:
Senate Bill 295 was not requested for hearing.
Senator Rawson:
This was a bill that came out of the Senate Committee on Judiciary after the policy issues were dealt with. It came to this committee because there was a supposition that there would be a fiscal note to this bill. The nonprofit agencies that will apply for this information have indicated that they are willing to pay a fee to cover the costs of a registry. So, we may have to put a revenue amount in somewhere.
Chairman Raggio:
We will need an amendment to this bill, then. Senator Rawson, will you deal with committee staff on this bill so that we can finalize the action?
SENATE BILL 319: Provides for licensing and regulation of halfway houses for alcohol and drug abusers as facilities for dependent and repeals requirements for certification of operators of such halfway houses. (BDR 40-1211)
Chairman Raggio:
Senate Bill 319 was requested by Senators O’Donnell and O’Connell, and it has not been requested for hearing.
Senator O’Donnell:
Mr. Chairman, we had a hearing on this bill.
Chairman Raggio:
If we did have a hearing, I do not have it noted. It was heard in the Senate Committee on Natural Resources and Facilities, but not in this committee. It has a fiscal note on it. Please, Senator O’Donnell, let the chairman know what needs to be done on this bill.
Senator O’Donnell:
Mr. Chairman, we need a hearing on this bill. I did not realize it had not been heard.
Chairman Raggio:
Okay. Committee staff, please set S.B. 319 for hearing on the next agenda of this committee.
SENATE BILL 359: Makes appropriation to University and Community College System of Nevada to enhance amount budgeted for biennium for special priorities of Nevada Agricultural Experiment Station and University of Nevada Cooperative Extension. (BDR S-1169)
Chairman Raggio:
Senate Bill 359 was introduced by Senator Rhoads, but was not requested for hearing. Senator Rhoads indicated to assist the committee this bill could be indefinitely postponed.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 359.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 368: Makes appropriation to Carson City for establishment of housing in Carson City for persons returning to community from institutional care. (BDR S-1207)
Chairman Raggio:
Senate Bill 368 was sponsored by Senator Amodei who has indicated, to assist the committee, the bill can be indefinitely postponed.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 368.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 382: Directs Department of Personnel to increase salaries of certain classified positions in Department of Prisons. (BDR S-1147)
Chairman Raggio:
Senate Bill 382 was sponsored by Senator Jacobsen. Committee, this is dealt with in the budget by special recognition, and this bill is not needed.
SENATOR JACOBSEN MOVED TO INDEFINITELY POSTPONE S.B. 382.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 392: Provides for state contribution to cost of certain group insurance or medical and hospital coverage for retired employees of school district. (BDR S-610)
Chairman Raggio:
Senate Bill 392 was introduced by this committee and was not requested for hearing. It has a $3 million fiscal note.
Senator O’Donnell:
This bill was requested by me. Due to budget constraints at the present time, I am willing to forego this bill. However, if revenues do surface, I would hope that we would revisit the issue.
Chairman Raggio:
Very well, if we get financial “manna from heaven,” we will look at all these bills that have been indefinitely postponed.
SENATOR O’DONNELL MOVED TO INDEFINITELY POSTPONE S.B. 392.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 393: Expands certain retirement and industrial insurance benefits afforded to peace officers. (BDR 23-747)
Chairman Raggio:
Senate Bill 393 was introduced by Senator Washington and was not requested for hearing. This bill has a fiscal note of $1.3 million each year of the biennium.
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada (PORAN):
We asked Senator Washington to bring this bill forward. We have been under the impression that he had requested a hearing on this bill, and we have not heard anything more until just now. We would appreciate a hearing on this bill so you can hear our arguments. We disagree with the figures noted in the fiscal note. Obviously, I had not previously seen a fiscal note on this bill.
Chairman Raggio:
We will hear S.B. 393 at the next hearing of the Senate Committee on Finance. We will give you a copy of the fiscal note as prepared by the Department of Personnel. It was not requested for hearing. So, be mindful of our time problems and we will give you a full opportunity to present the information. Before you leave here today, please get a copy of the bill’s fiscal note.
SENATE BILL 404: Makes appropriation to Nevada Alliance for Defense, Energy and Business for expansion and enhancement of federally funded science and technology activities in State of Nevada. (BDR S-887)
Chairman Raggio:
Senate Bill 404 is proposed next for indefinite postponement. This bill has a $400,000 fiscal note and this bill has not been requested for hearing.
Senator Rawson:
It hurts, but I will move to indefinitely postpone this bill.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 404.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 486: Creates Task Force for Community-Based Services for Persons with Disabilities. (BDR S-970)
Chairman Raggio:
Senate Bill 486 has a $350,000 appropriation and has not been requested for hearing.
Senator Rawson:
Mr. Chairman, we may have a way to fold this into another bill if we can just hold it for a day or two. I will make sure to track this bill, but we can fold it into another bill and lose the fiscal note.
Chairman Raggio:
At the request of Senator Rawson, we will hold that bill and review it later.
SENATE BILL 537: Revises provisions governing personnel of state department of agriculture. (BDR 50-1472)
Chairman Raggio:
Senate Bill 537 has a fiscal note of $98,000 in the first year of the biennium, and $86,000 in the second year. Senator Rhoads has indicated that in view of the committee’s situation, this bill can be indefinitely postponed.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 537.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
Committee, at the next meeting we will take action on those bills for which hearings have not been requested. Let us go to the Assembly bills.
ASSEMBLY BILL 183: Makes appropriation to legislative fund for reproduction of older volumes of Nevada Reports and Statutes of Nevada. (BDR S-731)
Chairman Raggio:
Assembly Bill 183 was heard on March 29, 2001.
Senator Coffin:
As we heard from testimony in this account we spend the appropriation up front, but we get it back over the biennium. So, I would move to approve this bill.
SENATOR COFFIN MOVED TO DO PASS A.B. 183.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
ASSEMBLY BILL 549: Increases amount of general obligation bonds that state board of finance may issue to provide grants to certain water systems. (BDR 30-1328)
Chairman Raggio:
Assembly Bill 549 was heard on April 26, 2001. There appeared to be no objection to the bill. The Chairman will accept a motion for do pass.
SENATOR JACOBSEN MOVED TO DO PASS A.B. 549.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 170: Creates endowment fund for arts and humanities and revises powers and duties of state arts council. (BDR 18-133)
Chairman Raggio:
Senate Bill 170 requires a proposed amendment (Exhibit H).
Scott K. Sisco, Interim Director, Department of Museums, Library and Arts:
Before you is a proposed amendment, and the items in orange ink are the items that we had discussed at the hearing on May 7, 2001. We have worked with the Fiscal Analysis Division of the Legislative Counsel Bureau (LCB) and all are in agreement on these items, which takes this from an endowment fund to a cultural trust fund.
Susan Boskoff, Executive Director, Nevada Arts Council, Department of Museums, Library and Arts:
Section 2 changes the name to a cultural trust fund and speaks about what the fund is doing.
Senator Coffin:
Would this amendment reduce or eliminate the fiscal note of $5 million?
Ms. Boskoff:
It eliminates completely the fiscal note in Section 6 of the amendment.
Chairman Raggio:
Section 2 apparently creates the Nevada Cultural Trust Fund and sets out the goals. These are to advance and promote a meaningful role and to stimulate the development of private sector funding. Apparently, Section 3 deletes a great deal of the language that was in the bill. Why is that deleted?
Ms. Boskoff:
The language in the bill was inaccurate in terms of how funds are distributed. This clarifies and makes more accurate the wording in the trust. It also allows for the mechanism on the way the fund is designed and administered to allow us to address it in the trust guidelines, to provide oversight and to allow for modifications.
Chairman Raggio:
Section 3 allows the trust to be used to provide additional resources, to develop art, provide administrative financial stability of cultural organizations, support programs and projects that provide citizens and visitors to our state, encourage cultural organizations to reduce deficits, establish cash reserves and endowments, and support initiatives and organizations that encourage access to, awareness of, and education in the arts.
Senator Rawson:
This bill places in statute how the trust’s funds can be used. This allows the community to come together in the interim to develop guidelines. This is a better approach. There will be a better “buy-in” this way, rather than mandating it.
Chairman Raggio:
It does strip the appropriation of $5 million, so we do not have a budget problem.
Senator Rawson:
This may appear the trust is not active given that the appropriation has been eliminated, but it is an important step forward to be able to set up this fund and to establish the principles of its use. This trust will be funded over time, both with private donations and with help from the state. It remains an important issue to move through this session.
Chairman Raggio:
I will entertain a motion, if there is no objection.
SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 170.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
Next is S.B. 307, which the committee heard on May 2, 2001.
SENATE BILL 307: Provides for employment of special investigator to assist commission of appraisers of real estate and for increase in certain fees of real estate division of department of business and industry. (BDR 54-1062)
Fred L. Hillerby, Lobbyist, American Institute of Appraisers:
An amendment has been proposed for this bill (Exhibit I). We had presented this amendment in concept at the last meeting. S.B. 307 in its original form attempted to hire a special investigator in the Real Estate Division, Department of Business and Industry, to deal with the Real Estate Appraisal Commission.
After further consideration and discussion, we had agreed to this amendment. The amendment deletes Sections 1, 2 and 3. Section 2 would have set up a special dedicated account in the General Fund for this purpose. We have deleted all of that and what you will see is a new Section 1, which expands the administrator’s authority to employ consultants. It indicates that within the limits of the available money they can employ professional consultants.
The purpose of the consultants is to handle complaints that come to the division. Last year there was an audit by the appraisal subcommittee of the Federal Financial Institutions Examination Council (FFIEC), which found fault with the length of time the division was taking to respond to these complaints.
The amendment will add a $40 fee increase to pay for this consultant. It will generate, by conservative figures, about $24,000 in revenue. The bill only appropriates $22,000 each year. So, this is self-funding in its fee increase, and we hope you would support this amendment to the bill.
Chairman Raggio:
Has committee staff reviewed the proposal as far as the amount of money that the increased fees will provide?
Mr. Ghiggeri:
Based on the information provided to us, it appears that Mr. Hillerby is accurate in his estimate. So, the appropriation would be funded and the revenue can be plugged in to the General Fund.
Chairman Raggio:
I will entertain a motion to amend and do pass.
SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 307 WITH AMENDMENT 655.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE CONCURRENT RESOLUTION 46: Urging the City of Sparks to name a park in the memory of Jeanne L. Botts.
Chairman Raggio:
Committee, we requested a resolution memorializing Jeanne L. Botts. I have a proposed resolution (Exhibit J), which is being distributed to the committee. If you agree, I would ask for a motion for introduction.
SENATOR RAWSON MOVED TO INTRODUCE SENATE CONCURRENT RESOLUTION 46.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
The next matter is budget closings. We have Budget Closing List 13 (Exhibit K.). The first matter we will take up is Prison Industry, budget account 525-3719.
Prison Industry – Budget Page PRISONS-210 (Volume 3)
Budget Account 525-3719
Carla Watson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Ms. Watson’s brief overview is included in Exhibit K, page 14):
Staff has one technical adjustment in this account. Committee staff recommends the license plate charges be increased by $34,584 in FY 2002 and $49,393 in FY 2003. The Department of Motor Vehicles & Public Safety provided information on projected sales information, which is the basis for the increase.
Under decision units (E-150), item number 1 (Exhibit K, page 15), is the transfer to the prison dairy account. The Nevada Department of Prisons (DOP), in conjunction with the Department of Agriculture, operates in an estray program for wild horses caught on state land. Operating costs for this program are in the prison dairy account. When closing the agriculture veterinary medical services budget account, the Joint Subcommittee on General Government recommended transferring two components of the estray horse program from the Department of Agriculture to prison industries. As a result of the subcommittee’s action that affect this account, staff created this module to provide start‑up funding for the salary cost of $30,000 to be transferred from the prison industry reserve in FY 2002 and paid back in FY 2003.
Chairman Raggio:
Why is it going from the account of prison industry to the account of prison dairy?
Senator O’Donnell:
There is a General Fund budget account that provides funding for this particular position for the wild horse program. However, what was happening was the horses were being inoculated and then sent directly to the prison system. All of the funding comes through the Department of Agriculture. We figured out that, if we took funds from the reserve of the prison industries, we could save General Fund revenue. Effectively, this provides the same program with prison industries reserve funds instead of General Fund appropriations.
Mr. Ghiggeri:
The Executive Budget has presented projected retained earnings in prison industries of approximately $2.2 million at the end of FY 2003 in this account. So, there is ample funding.
Chairman Raggio:
So, this is appropriate?
Mr. Ghiggeri:
Yes.
Ms. Watson:
Under the second decision (E-401) is a new prison industry program, which is operated at the Lovelock Correctional Center in conjunction with Summerset Farms. They operate a dry and frozen food packaging and repackaging operation. They are leasing 30,000 square feet of manufacturing space at that facility, and they anticipate employing 30 inmates in FY 2002 and 45 inmates in FY 2003.
Chairman Raggio:
If the committee has any objections or questions, please do not hesitate to capture the attention of the chairman as we go through these accounts.
Ms. Watson:
Item number 3 (E-710) includes replacement equipment, which recommends funding of $40,590 in FY 2002 and $45,770 in FY 2003. The cost as adjusted by committee staff is $37,935 in FY 2002 and $30,440 in FY 2003. What I have done is list the items within each of the various industries with their associated costs. The items that are being recommended are directly related to each type of industry.
Chairman Raggio:
Is there anyone here from the Budget Division? If so, are there any objections? [Sherry Blackwell, Budget Division, Department of Administration is in the audience and nods her lack of objection.]
Ms. Watson, you have identified all of these and done your homework on it. We do not have to go through the whole list (Exhibit J, page 15). Thank you, Ms. Watson.
Ms. Watson:
The fourth decision unit (E-720) is for new equipment (Exhibit J, page 16). Committee staff recommends reducing funding by $900 in FY 2002. The adjusted cost is $77,885 in FY 2002. Again, I have listed all of the items (Exhibit J).
SENATE BILL 443: Makes appropriation to Department of Prisons for stables for wild horses for prison industries. (BDR S-1379)
Ms. Watson:
The last issue is S.B. 443, which recommends a “one-shot” appropriation from the General Fund of $200,000 for the prison dairy account as a loan to be repaid over a period of 10 years for the construction of holding facilities for wild horses adjacent to the prison ranch. The ending reserve balance for prison industry exceeds $2 million in each year of the biennium, which would be sufficient to cover the loan to the Prison Dairy and then the Prison Dairy account could repay the loan to prison industries at the same amount of $20,000 per fiscal year.
Chairman Raggio:
If we did this, we would not need to process an appropriation in S.B. 443.
Ms. Watson:
That is correct, Mr. Chairman.
Chairman Raggio:
Does the administration have any objection? This has been proposed by the Governor. If there is no objection from the committee, I will take a motion to close this budget as recommended by staff with these adjustments. Part of that motion will provide for the transfer of the loan and we will not require the processing of S.B. 443. That is included in the motion.
SENATOR O’DONNELL MOVED TO CLOSE BUDGET ACCOUNT 525-3719 AS RECOMMENDED BY STAFF, INCLUDING INCREASING REVENUE FOR LICENSE PLATE CHARGES BY $34,584 IN FISCAL YEAR 2002 AND $49,393 IN FY 2003, INCLUDING THE TRANSFER OF $30,000 IN FISCAL YEAR 2002 FROM THE PRISON INDUSTRY ACCOUNT TO THE PRISON DAIRY ACCOUNT (525-3727), INCLUDING FUNDING FOR THE INDUSTRY PROGRAM AT THE LOVELOCK CORRECTIONAL CENTER, INCLUDING APPROVING NEW AND REPLACEMENT EQUIPMENT, INCLUDING APPROVING $200,000 FROM THE PRISON INDUSTRY ACCOUNT TO THE PRISON DAIRY ACCOUNT (525-3727) IN FISCAL YEAR 2002 AND DENIAL OF $200,000 IN SENATE BILL 443.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Chairman Raggio:
Let us go to the next budget account. I believe we have already covered the one item, being the transfer to the Prison Dairy budget.
Prison Dairy – Budget Page PRISONS-218 (Volume 3)
Budget Account 525-3727
Carla Watson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Ms. Watson’s brief overview is in Exhibit K, page 18):
Yes, Mr. Chairman, that was the one technical adjustment for the General Fund loan repayment as recommended by the Governor.
Committee staff recommends an increase as recommended by the Governor to the reserve of $87,050 each year to expand two programs (the feeder steer program and the estray program). The estray horse program, which was established in conjunction with the Bureau of Land Management (BLM). Revenue streams and operating costs recommended in this module are $273,000 in FY 2002 and $365,000 in FY 2003.
Chairman Raggio:
What happens after they catch these wild horses and they go through the Gentling Program?
Ms. Watson:
They have auctions periodically and they sell the horses.
The estray horse program includes a revenue stream of $10,500 per year, which was the amount forecasted by the Department of Agriculture. This module (E‑150) provides start-up funding for the salary cost of $30,000 to be transferred from the prison industry reserve in FY 2002 and paid back in FY 2003.
Chairman Raggio:
We get a daily payment from the BLM. What do you get for the horses that come from the state?
Ms. Watson:
BLM pays $2.75 a horse and the Department of Agriculture pays $2.
The next item (E-710) is replacement equipment. That recommends funding of $35,500 in FY 2002 and $12,000 in FY 2003 from the reserve for replacement of sprinklers, a walk-in cooler for the dairy, a cream separator, and a livestock trailer.
Chairman Raggio:
Do all of those seem reasonable?
Ms. Watson:
Yes they do, Mr. Chairman.
Item number 5 is for new equipment (E-720), which recommends funding of $4,500 in FY 2003 for an electronic livestock scale. Next is special projects (E‑850), which recommends funding of $85,000 in FY 2002 for the construction of a mechanic’s building. Also there is a recommended funding of $37,100 in FY 2003 for the construction of a barn. The DOP indicates that medical costs would be reduced due to the construction of this barn, and staff has reduced operating by $4,000 each year for anticipated reduction in medical costs.
Chairman Raggio:
All right, that is consistent with our previous action. If there are no objections from the committee, I will entertain a motion to close this budget account according to staff adjustments.
SENATOR JACOBSEN MOVED TO CLOSE BUDGET ACCOUNT 525-3727 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator O’Donnell:
I wanted to make a comment about Ms. Watson. She has consistently scrutinized the budgets and saved the state thousands of dollars. I wanted to let her know the job that she has done for the Senate Subcommittee on General Government is extremely good and we appreciate her.
Chairman Raggio:
The next budget account is the Western Interstate Commission for Higher Education (WICHE).
W.I.C.H.E. Loan and Stipend – Budget Page WICHE-1 (Volume 1)
Budget Account 614-2681
Mindy Braun, Education Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Ms. Braun’s brief overview is in Exhibit K, page 8):
There are five technical adjustments with regard to professional slots recommended for this account. First, The Executive Budget recommends funding for five in-state dental slots in FY 2002. However, the new University of Nevada, Las Vegas (UNLV) dental program will not start until FY 2002-2003. In order to maintain a total of 10 new dental slots in each year, the committee may wish to consider moving the 5-in‑state slots to the 4-year dental program (out-of-state) in FY 2002, and move the slots back to the in-state program in FY 2003. This recommendation would cost an additional $11,500 in FY 2002 and provide a reduction of $3,900 in FY 2003.
Senator Rawson:
I think that makes sense and should be done.
Chairman Raggio:
As we go through these budgets, committee, please indicate any objections you may have. Next item.
Ms. Braun:
The second adjustment raises a concern regarding the continued necessity of graduate library slots. In discussing the issue with the executive director of WICHE, it was determined that all new slots could be eliminated beginning in FY 2002.
Chairman Raggio:
The executive director agrees these slots can be eliminated?
Ron W. Sparks II, Director, Western Interstate Commission for Higher Education:
Yes, Mr. Chairman.
Ms. Braun:
As regards the physical therapy professional slots, although The Executive Budget recommends continued funding for in-state physical therapy slots for the first and second years of the program, the recommended budget does not provide funding for the slots for the third and final year of the program. In FY 2002, there will be 5 students who will be ready to enter the third year of the program at a total cost of $5,000. In FY 2003 there will be 4 students ready to enter the third year of the program at a total cost of $4,400.
Chairman Raggio:
Mr. Sparks, would you like to join us at the table to discuss this topic. The Executive Budget does not continue those programs in the third year.
Mr. Sparks:
In regard to the questions about what we are doing with the additional revenue, the physical therapy program originally was going to be a 2-year program. It is now 2½-year program. We have another half year that we have to fund and it is going to start with our entering class, which will be at the beginning of this year.
Chairman Raggio:
What do we have to do then, since the budget did not provide for the third year?
Mr. Sparks:
We have to make the adjustment. Each student gets $1,000 for the third year. So, we have to make the adjustment.
Chairman Raggio:
Is it just a matter of adding adjustments, rather than adding funds?
Ms. Braun:
It would cost an additional $5,000 in FY 2002 and it would cost an additional $4,400 in FY 2003.
Senator Rawson:
I believe that was an oversight that should have naturally been “rolled out.”
Ms. Braun:
The Executive Budget recommends an additional physician assistant slot in each year of the biennium. This was not recommended as either maintenance or an enhancement unit. In discussing the additional slot with the executive director, it was determined that the slot was not needed in either year of the biennium and that the total number of physician assistant positions should remain at 3 new slots per year.
Chairman Raggio:
Is that agreeable, Mr. Sparks?
Mr. Sparks:
Yes, Mr. Chairman.
Ms. Braun:
The Executive Budget recommends two additional community scholar professional slots in each year of the biennium. Funding for these slots is derived from community, state, or federal government. In discussing these slots with the executive director, it was noted that the federal government is not reallocating funds for this program in the upcoming biennium. However, because WICHE has not spent all of the federal funding allocated for the program, the director has indicated that there are sufficient federal funds to enroll one new student each year, but not two as recommended by the Governor. Reducing the number of slots to one in each year, instead of two, will provide a cost savings of $5,000 in FY 2002 and $10,000 in FY 2003.
The Executive Budget reduces the reserve for this budget account to zero in FY 2003. According to the Budget Division, it was believed that with the passing of A.B. 587 of the Seventieth Session, the need for a reserve was no longer required.
ASSEMBLY BILL 587 OF THE SEVENTIETH SESSION: Authorizes temporary advance from state general fund to Western Interstate Commission for Higher Education’s fund for student loans. (BDR 31-785)
Ms. Braun:
That is the reason they cut the reserve to zero. During a previous budget hearing, the director expressed concern over not having reserve funding available. In response, the committee staff reviewed the issue and discovered that there is approximately $333,000 not accounted for in the Governor’s recommended budget, either in a reserve or in a balance forward funds. This amount reflects the total actual reserve in the budget to date, as well as the amount that was not expended by the agency on professional slots during the current FY 2001.
With this information, the committee may want to consider one of two options. The first option would be to balance forward the entire amount and reduce the General Fund appropriation by $333,623, and submit a Letter of Intent requiring WICHE to utilize all other funds first in paying student loans and stipends, and then utilize General Fund revenue to make up any shortfall. The remaining General Fund revenue would be reverted at the end of each fiscal year.
The second option would balance forward the entire amount in FY 2002, but would not reduce the General Fund appropriation. The funds would be used to generate a reserve in the school year 2003 for the agency. The committee may also wish to submit a Letter of Intent requiring the reserve funding to be accessed only after IFC approval, if you chose this option.
Senator Rawson:
That is the volatile nature of the return of these funds, and a reserve is prudent. We are looking for General Fund revenue everywhere we can, but it is appropriate to chose the second option.
Chairman Raggio:
So, we would not reduce the General Fund in any way. Is there a combination of the two options available?
Ms. Braun:
We could reduce the General Fund and increase funding so that the reserve in the second year is about the same as the budget recommended.
Chairman Raggio:
If you chose the first option to balance forward the entire $558,000, and reduce the General Fund by the unaccounted amount of $333,000, where does that leave the reserve at the end?
Ms. Braun:
It would be a zero reserve in the second year. We could do a combination.
Chairman Raggio:
I would like to see a combination with some reserve, but some reduction of the General Fund. How could that be accomplished?
Ms. Braun:
I could get the reserve to be about the same as what the Governor recommended in FY 2002 and decrease the General Fund appropriation accordingly.
Chairman Raggio:
That would be more prudent.
Mr. Sparks:
Let me explain what that extra money is about. We budget at the 3‑year program level in dentistry and in other areas, between a 3-year and a 4-year program. When the students go to the 3‑year program, they get their $60,000 and a 3-year frame, but the extra revenue is because students end up taking a 4-year program. In other words, that $250,000, or whatever amount, really still exists to pay for the student’s fourth year. The revenue continues to be moved in reserve for the benefit of the fourth year should the student decide to continue. It is not extra money. It is just money being used in the future.
Senator O’Donnell:
First of all, I must disclose that my daughter is a WICHE recipient in dental school at Creighton University. However, the actions we take here will not have any benefit to her. I believe that Mr. Sparks is correct. The reserve is not the reserve. The reserve is an encumbered amount, dedicated for future responsibilities of the state. I do not know how we can strip the WICHE program to take all of the revenue down to zero. That does not seem to me to be prudent, knowing full well that in the out years, we still have those expenses coming in.
Chairman Raggio:
The chair is not convinced altogether in this. I am going to hold this budget. Committee staff, Mr. Sparks and Senator O’Donnell, please work together and see if there is not something we can do to accommodate all our concerns on this issue. We need to keep the whole General Fund appropriation. So, please all work together to accomplish this and examine what is essential to making sure the recipients of this program are covered.
The next budget is WICHE administration budget.
W.I.C.H.E. Administration – Budget Page WICHE-3 (Volume 1)
Budget Account 101-2995
Mindy Braun, Education Program Analyst Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Ms. Braun’s brief overview is in Exhibit K, page 12):
There are three technical adjustments recommended for this account. First, the Governor recommends $3,072 in each year of the biennium for in-state travel, which represents a 102 percent increase over the actual amount spent during FY 2000. This increase is due, in part, to requesting travel for two staff instead of one. Based upon committee staff review, the committee may wish to consider reducing in‑state travel by $342 in FY 2003 to reflect the need for only one person attending two different meetings.
Chairman Raggio:
So, we can reduce in-state travel a little bit.
Ms. Braun:
Yes, Mr. Chairman. The second adjustment is to decision unit E-710, which recommends $1,000 in FY 2002 to purchase two office chairs, and for which committee staff recommends reduction by $300.
The third decision unit recommends $7,000 to purchase a liquid crystal display (LCD) projector for Microsoft’s PowerPoint presentations. A technical adjustment is recommended to reduce the amount by $1,205 in FY 2002 to reflect the revised price of the projector.
Chairman Raggio:
Do you agree with that recommendation, Mr. Sparks?
Mr. Sparks:
Yes, Mr. Chairman.
Ms. Braun:
The committee does have one decision to make for this account. During a previous hearing, the director expressed the need for additional in‑state travel funds above those recommended by the Governor. The total cost would be $1,112 in FY 2002 and $542 in FY 2003 if the committee chooses to fund this request.
Chairman Raggio:
How does this tie in with our previous recommendation on the adjustment for in‑state travel?
Ms. Braun:
The adjustment was actually to reduce the need for two people traveling to each of the meetings. The executive director felt that the agency needed additional travel funds and these would be travel requests for meetings they would like to attend.
Chairman Raggio:
Is this necessary, Mr. Sparks?
Mr. Sparks:
Yes, Mr. Chairman, those are meetings we are currently attending.
Senator O’Donnell:
I have a bill in this committee, S.B. 391, which augments the WICHE program for students enrolling in 4-year nursing programs right out of high school. I would like to keep the door open that we may be able to augment some staff to administer that program.
SENATE BILL 391: Creates Western Interstate Commission for Higher Education scholarship trust fund (BDR 34-282)
Senator Rawson:
The bill could deal with this issue, could it not? We could go ahead and close this budget, and then the bill, if passed, could address the matter directly.
Senator O’Donnell:
We amended that bill removing millennium scholarship funds and replaced General Fund revenue.
Chairman Raggio:
Did we deal with S.B. 55?
SENATE BILL 55: Makes various changes to provisions regarding Western Interstate Commission for Higher Education. (BDR 34-814)
Ms. Braun:
Senate Bill 55 authorizes WICHE to require an application fee of $50 for the consideration of each application submitted by the agency. As the bill is written, the funds generated would be deposited in the WICHE Loan & Stipend account. If the bill is approved, the committee may wish to consider budgeting the revenues generated from this new fee in the WICHE Administration budget account, and any additional administrative expenses needed by the agency could also be included in the administrative budget and now in the Loan & Stipend account.
Chairman Raggio:
I am not clear on this issue. Is S.B. 55 in the Assembly?
Ms. Braun:
Yes. It has passed the Senate.
Chairman Raggio:
What do we have to do in this budget?
Ms. Braun:
Nothing, Mr. Chairman. The data regarding this bill is merely information for this committee.
Chairman Raggio:
Committee, I am prepared to close this account with those adjustments.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-2995 AS RECOMMENDED BY STAFF, INCLUDING INCREASING IN‑STATE TRAVEL FUNDS FOR $1,112 IN FISCAL YEAR 2001 AND $542 IN FISCAL YEAR 2002.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
Let us go to the next budget, account 101-1000
Office of the Governor – Budget Page ELECTED-1 (Volume 1)
Budget Account 101-1000
Mr. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Mr. Ghiggeri’s brief overview is in Exhibit K, page 1):
There are seven new positions being recommended (M-200) for the upcoming biennium. The first module recommends $383,102 in FY 2002 and $354,840 in FY 2003 for five new positions.
The next decision unit (M-201) provides for the creation of the Family Resources Program. The Executive Budget recommends $157,112 in FY 2002 and $145,530 in FY 2003, which includes two new positions.
Next is decision unit E-375, which recommends a transfer of the Office of Science, Engineering and Technology function from the University and Community College System of Nevada (UCCSN) back to the Governor’s office. A General Fund appropriation of $280,081 in FY 2002 is recommended and $255,427 in FY 2003. The Governor has suggested this decision unit could be reduced by $50,000 in each year of the biennium to address the funding shortfall.
Chairman Raggio:
I would entertain a motion to close this budget as recommended by the Governor, subject to staff recommendations. That would include the $50,000 reduction in each year of the biennium.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1000 AS RECOMMENDED BY THE GOVERNOR SUBJECT TO TECHNICAL ADJUSTMENTS RECOMMENDED BY STAFF, AND WITH A REDUCTION OF $50,000 TO THE OFFICE OF SCIENCE, ENGINEERING AND TECHNOLOGY IN EACH YEAR OF THE BIENNIUM.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
The next budget is Mansion Maintenance.
Mansion Maintenance – Budget Page ELECTED-5 (Volume 1)
Budget Account 101-1001
Mr. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Mr. Ghiggeri’s brief overview is in Exhibit K, page 3):
Staff would recommend that account be closed in accordance to the Governor’s recommendation.
SENATOR NEAL MOVED TO CLOSE BUDGET ACCOUNT 101-1001 AS RECOMMENDED BY THE GOVERNOR.
SENATOR MATHEWS SECONDED THE MOTION.
Senator Jacobsen:
I have a date this afternoon to meet with the Governor’s staff regarding the mansion. They have a lighting problem in one of the rooms. So, I would like to delay closing this budget until our next meeting.
Chairman Raggio:
All right. At Senator Jacobsen’s request we will delay closure of this budget account. Senator Jacobsen, please get back to us on that account. The next account is the State Treasurer’s budget.
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State Treasurer – Budget Page ELECTED-88 (Volume 1)
Budget Account 101-1080
Mr. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Mr. Ghiggeri’s brief overview is in Exhibit K, page 4):
The state treasurer’s office provides a recommendation of $5,894 in each year of the biennium to provide training funds for the Office of the State Treasurer (E-225). The next decision unit recommends (E-475) $150,000 in each year of the biennium to support the Allodial Title Program.
The Allodial Title program has been researched by the state treasurer’s office and the Office of the Attorney General. According to their research into this issue, all outstanding issues are anticipated to be resolved prior to the beginning of the 2001-2003 biennium. The $150,000 recommended would provide for a new Management Analyst position to administer the program and provide for $100,000 to $115,000 per year in operating expenses.
Senator Neal:
Did we approve someone in this position about 7 or 8 years ago, for this Allodial Title program? This program keeps coming back on us. What is going on there?
Senator Rawson:
We approved the Allodial Title program about 7 or 8 years ago, but it has had constitutional challenges by the Office of the Attorney General. They have now worked those matters out and we have withheld the revenue until they had all those challenges resolved. The program now may be implemented.
Mr. Ghiggeri:
Not included in The Executive Budget, but attached on page 6 of Exhibit K, is a memorandum from the state treasurer requesting a new assistant treasurer position. Page 7 (Exhibit K) indicates how the treasurer anticipates utilizing this position. The funding requested would require an additional $68,185 in FY 2002 and $84,875 in FY 2003.
Chairman Raggio:
The treasurer discussed this with the committee previously.
Mr. Ghiggeri:
The next unit (E-710) provides funding for the replacement of data processing equipment. This equipment can be revised and the price reduced for a new cost of $4,922 in each year of the biennium. Next is the decision unit (E-720), which provides funding to purchase a new server and related software for the Carson City office. Based on revised prices received from state purchasing, the amount provided to purchase the file server could be reduced from $15,000 to $7,500 in FY 2002. However, the treasurer has provided revised specification that would require $10,997 for the server and $3,784 for software for a total of $14,781.
One item that requires notation is that Assemblyman Beers has met with the state treasurer’s staff on this issue and his recommendation would be to not replace this equipment at this time since a new server was purchased last fiscal year.
The next decision unit (E-721) recommends $81,770 in FY 2002 and $10,776 in FY 2003. Funding would be used to upgrade the investment management system and would be used to perform treasury management functions and tasks for the state treasurer.
Chairman Raggio:
Is there someone from the state treasurer’s office here today? On the one hand we are told they need this replacement server with upgraded specifications, and then Mr. Beers met with staff and determined that the case could be made to approve or not approve this item.
Mr. Ghiggeri:
That is basically because the current server was just replaced last year.
Chairman Raggio:
So, we need not approve that item, is that correct?
Mr. Ghiggeri:
I am not sure what the Assembly Committee on Ways and Means has done on this issue, but I wanted to make you aware of Mr. Beers’ research into this issue.
Senator Rawson:
This is a matter that can be approved or not approved. It appears we need to give a constitutional officer, who has billions of dollars going through his office, the equipment he needs, as well as the requested additional personnel.
Chairman Raggio:
I do not believe we can make that judgment today. We better leave the matter in. Is there anything else, Mr. Ghiggeri?
Mr. Ghiggeri:
The only other issue would be whether the committee wishes to add the new position, and whether the committee wishes to reduce the data processing equipment funding based upon the revised prices.
Senator Rawson:
Mr. Chairman, I would move that we close this budget leaving the equipment in, adding the new position, and making any adjustment recommended by staff.
Chairman Raggio:
That will be closed, then, with the assistant treasurer’s position, with a reduction in cost for the equipment, and including the equipment.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1080 AS RECOMMENDED BY THE GOVERNOR SUBJECT TO TECHNICAL ADJUSTMENTS RECOMMENDED BY STAFF, FUNDING TO IMPLEMENT THE ALLODIAL TITLE PROGRAM, $150,000 IN EACH YEAR OF THE BIENNIUM FOR A MANAGEMENT ANALYST, $100,000-$115,000 PER YEAR IN OPERATING EXPENSES, AND $68,185 IN FY 2001 AND $85,875 IN FY 2002 FOR AN ASSISTANT TREASURER.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Raggio:
The following budget accounts on this date’s agenda will be held over to another meeting:
Commission on Tourism – Budget Page ECON DEV & TOURISM-21 (Volume 2)
Budget Account 225-1522
Public Employees Retirement System - Budget Page PERS-1 (Volume 3)
Budget Account 101-4821
Chairman Raggio:
The other evening, this committee heard a proposal from Mr. Raymond Bacon, Lobbyist, Nevada Manufacturers Association, and he referenced Ms. Carole Vilardo, Lobbyist, Nevada Taxpayers Association, and a suggestion about the Department of Taxation that could result in the collection of revenue not now being looked at. Will the Senate Committee on General Government look into that?
Senator O’Donnell:
Mr. Chairman, that was an aspect of returning the discount to the state or to another agency.
Chairman Raggio:
That was one, and then there was another one that would bring in an additional $10 million in revenue. Senator O’Donnell, would you ask Mr. Bacon or Ms. Vilardo what that proposal is all about?
Senator O’Donnell:
Yes, Mr. Chairman.
Chairman Raggio adjourned the hearing at 10:37 a.m.
RESPECTFULLY SUBMITTED:
ElizaBeth Root
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: