MINUTES OF THE
SENATE Committee on Finance
Seventy-First Session
May 21, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:00 a.m., on Monday, May 21, 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 Joseph M. Neal Jr.
Senator Bob Coffin
Senator Bernice Mathews
COMMITTEE MEMBERS ABSENT:
Senator William R. O’Donnell (Excused)
GUEST LEGISLATORS PRESENT:
Assemblyman John Oceguera, Clark County Assembly District No. 16
Senator Maurice E. Washington, Washoe County Senatorial District No. 2
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Mark Krmpotic, Program Analyst
Steven J. Abba, Principal Deputy Fiscal Analyst
Bob Williston, Committee Secretary
OTHERS PRESENT:
Don Hataway, Deputy Director, Budget Division, Department of Administration
H. Pepper Sturm, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau
Susan E. Scholley, Senior Research Analyst, Research Division, Legislative Counsel Bureau
Raymond Bacon, Lobbyist, Nevada Manufacturers Association
Steve Williams, Lobbyist, Washoe County School District
Ricci Elkins, Lobbyist, Alliance for Children’s Educational Excellence
Randy Robison, Lobbyist, Nevada Association of School Boards
Rose E. McKinney-James, Lobbyist, Clark County School District
Al Bellister, Lobbyist, Nevada State Education Association
Donald O. Williams, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau
Jolaine Johnson, Deputy Administrator, Air, Mining and Water Programs, Division of Environmental Protection, State Department of Conservation and Natural Resources
Dana K. Bilyeu, Operations Officer, Public Employees’ Retirement System
Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources
Senator Raggio opened the hearing on Assembly Bill (A.B.) 431.
ASSEMBLY BILL 431: Requires public employees’ retirement board to conduct study regarding lump-sum optional retirement programs. (BDR S-985
Assemblyman John Oceguera, Clark County Assembly District No. 16, stated that A.B. 431 would require the Public Employees’ Retirement Board to conduct a study on deferred retirement option plans (DROP). He stated DROP is a way to retain a skilled public employee workforce. He explained the focus of DROP is not the return of existing retirees to the workforce, but rather to retain members in employment after becoming eligible to retire.
Mr. Oceguera indicated that, according to a report issued by the Public Employees’ Retirement Board in December, 2000, DROP can be structured in many ways. He said typically monthly retirement benefits earned by the employee through the date of electing to participate in DROP are frozen until retirement. Meanwhile, he explained, the employer contributes to the employee’s DROP account. Mr. Oceguera said upon retirement the employee receives both his monthly pension amount, which is based on service through DROP election, and a lump sum distribution from the DROP account.
Mr. Oceguera stated employees may favor DROP because it allows them to accumulate a retirement savings account prior to retirement. He pointed out this money could be used for a number of different things, such as a home mortgage or a college education.
Mr. Oceguera stated employers could favor these programs because they are able to retain employees eligible to retire. He said this allows an employer time to develop strategies for the replacement of these employees. He explained that, when structured properly, these programs allow the employer to offer additional benefits at little or no cost to retain experienced employees.
Senator Raggio asked why this is called a DROP account.
Mr. Oceguera replied that it stands for “deferred retirement option plan.” He stated that it is just another “tool in the toolbox.” He said it is intended to keep individuals employed, and instead of their money going into the retirement system it would go into some type of annuity to be taken as a lump sum after they retire, in a period of 1 to 5 years.
Senator Neal asked whether there had been a bill similar to this to allow employees to continue to work.
Senator Raggio replied the committee will consider another bill today, but he considered this bill to be different.
Mr. Oceguera explained the other bill concerns rehire provisions, and this bill concerns employees who do not quit. He stated they would just continue working and their retirement would just go to another place and be collected in a different way.
Dana K. Bilyeu, Operations Officer, Public Employees’ Retirement System (PERS), read her testimony (Exhibit C) to the committee. She said the Retirement Board originally opposed A.B. 431 because it mandated a DROP program. She stated the board is not opposed to a study of lump sum optional retirement plans, as is now being proposed by the bill.
Senator Neal asked what some of the categories are that presently have mandatory retirement. Ms. Bilyeu replied that within PERS there are no mandatory retirement ages. She stated there are voluntary retirement ages at which an employee can receive a full retirement without reduction for being too young to retire.
Senator Neal asked why this bill would be needed, if there is no mandatory retirement age. Ms. Bilyeu replied such programs are designed as an incentive to keep employees who want to retire in the workforce past the normal retirement age.
Senator Raggio asked in what manner these employees would be able to use their lump sum retirement. Ms. Bilyeu stated they could use it in any manner they see fit. She stated the goal of PERS would be to design the program so it is cost neutral to the defined benefit.
Senator Raggio closed the hearing on A.B. 431.
BUDGET CLOSINGS – DEPARTMENT OF MOTOR VEHICLES
DMV, Compliance Enforcement – Budget Page DMV-7 (Volume 3)
Budget Account 201-4740
Mark Krmpotic, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, read the summary for this budget account on page 1 of the Joint Subcommittee on Public Safety, Natural Resources, Transportation Closing Report (Exhibit D). He said the subcommittee concurs with the Governor’s recommendation to fund two non-sworn positions to conduct audits and inspections of schools for drivers, driving under the influence, traffic safety, and commercial drivers license (CDL) throughout the state.
Senator Raggio asked the members who were on the joint subcommittee to help the committee where needed.
SENATOR NEAL MOVED TO CLOSE BUDGET 201-4740 AS RECOMMENDED BY THE GOVERNOR.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
DMV, Field Services – Budget Page DMV-13 (Volume 3)
Budget Account 201-4735
Mr. Krmpotic read the summary of this budget account on pages 1 and 2 of the Joint Subcommittee on Public Safety, Natural Resources, Transportation Closing Report (Exhibit D). He stated the subcommittee supports the Governor’s recommendation to continue 48 positions added by the Interim Finance Committee (IFC) in February 2000, and 64 part-time positions added by the IFC in December 2000. He said the subcommittee recommends that funding for 16 part-time positions be placed in reserve since the department is consistently under its goal of a 1-hour wait at the Reno (Galletti) office and does not have immediate plans to fill the positions. He said the department may approach the IFC to use these positions at another field office if needed.
Mr. Krmpotic said the subcommittee also supports the addition of two program officer positions to assist with day-to-day operations at the Henderson and Carson City offices.
Mr. Krmpotic stated the subcommittee concurs with the Governor’s recommendation to eliminate transfers from the pollution control account supporting salary expenses for positions in the field services budget. He noted that elimination of verification of the emission certificate by field services staff at the window no longer supports the transfer of funding.
SENATOR NEAL MOVED TO CLOSE BUDGET 201-4735 WITH ADJUSTMENTS RECOMMENDED BY THE JOINT SUBCOMMITTEE.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
DMV, Central Services – Budget Page DMV-21 (Volume 3)
Budget Account 201-4741
Mr. Krmpotic read the summary for this budget account on page 2 of the Joint Subcommittee on Public Safety, Natural Resources, Transportation Closing Report (Exhibit D). He stated the subcommittee concurs with the addition of nine positions in the microfilming section to address increased volumes of documents requiring microfilming. He said the subcommittee supports the Governor’s amendment to add $315,933 in Fiscal Year (FY) 2002 to outsource the backlog of documents requiring microfilming with the new Department of Cultural Affairs.
Mr. Krmpotic said the subcommittee also concurs with the addition of 10 positions in the data integrity section to address increases in the volume of documents requiring data entry such as convictions, traffic safety school completions, and accidents. He said the subcommittee supports the Governor’s amendment to sunset five positions after one year.
Mr. Krmpotic stated the subcommittee concurs with the continuation of seven positions added by the IFC in February 2000 for the title and renew-by-mail sections.
SENATOR NEAL MOVED TO CLOSE BUDGET 201-4741 ACCORDING TO THE SUBCOMMITTEE’S RECOMMENDATIONS.
SENATOR JACOBSEN SECONDED THE MOTION.
Senator Coffin asked whether the new positions in this budget are needed because of the expansion of the highway system to cover all the areas of early settlement and exploration.
Mr. Krmpotic replied that the new positions have to do with microfilming documents such as titles and registration paperwork that the department needs to maintain archives. He stated the proposal to outsource involves the microfilming section in the new Department of Cultural Affairs. He explained this is a means that the department has deemed appropriate for archiving and addressing its backlog of documents that need archiving.
Senator Coffin asked what the Department of Cultural Affairs does. Mr. Krmpotic replied this department was previously known as the Department of Museums, Library and Arts, and has a micrographic section.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
DMV, Management Services – Budget Page DMV-29 (Volume 3)
Budget Account 201-4742
Mr. Krmpotic read the summary of this budget account on pages 2 and 3 of the Joint Subcommittee on Public Safety, Natural Resources, Transportation Closing Report (Exhibit D). He stated the subcommittee supports amendments recommended by the Governor to adjust expenses based on new digitized photo license technology. He said the subcommittee recommends a revision to statute to allow the department to recoup the cost of the photo license by establishing the fee by regulation.
Mr. Krmpotic stated the subcommittee supports the continuation of two training positions added by the IFC in February 2000. He said the subcommittee also concurred with the addition of five positions to assist with program development in the vehicle programs section, the driver program section, and the business program section.
Mr. Krmpotic said the subcommittee did not concur with the recommendation to fund customer feedback surveys through a third party contractor. He said the subcommittee also did not concur with the recommendation to centralize personal computer and printer purchases for the entire motor vehicle branch.
Mr. Krmpotic said the subcommittee did not act on the recommendation to transfer eleven positions and associated expenses to the Department of Motor Vehicles (DMV) Administrative Services budget account. He said transfer of these positions is associated with the proposal to split the department and consolidate administrative functions within the Department of Motor Vehicles Administrative Services account. He stated full committee action is required.
Senator Raggio stated the committee more or less indicated its approval to split the Department of Motor Vehicles and Public Safety, which was also the recommendation of the Governor, to provide for a Department of Public Safety and a Department of Motor Vehicles. He asked whether it was the committee’s desire to follow the Governor’s recommendation on the division of the department. No objection was voiced.
Senator Raggio stated that since the committee concurred, the committee could take a motion to concur with the remainder of the joint subcommittee’s recommendations based upon the division of the department into the two new departments.
SENATOR RAWSON MOVED TO CLOSE BUDGET 201-4742 INCLUDING ALL OF THE SUBCOMMITTEE’S RECOMMENDATIONS, WITH THE UNDERSTANDING THAT THE COMMITTEE APPROVES OF THE DIVISION OF THE DEPARTMENT OF MOTOR VEHICLES AND PUBLIC SAFETY INTO THE DEPARTMENT OF MOTOR VEHICLES AND THE DEPARTMENT OF PUBLIC SAFETY.
SENATOR MATHEWS SECONDED THE MOTION.
Senator Neal asked whether concurrence in this motion meant the centralized personnel computers and printers would not be approved.
Senator Raggio said the joint subcommittees did not act on that recommendation. He stated that, since the committee’s position is to divide the department, the motion would be to transfer the positions in the summary to the appropriate department.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
SENATOR NEAL MOVED TO REQUEST A BILL TO ALLOW THE DEPARTMENT TO RECOUP THE COST OF THE PHOTO LICENSE THROUGH FEES.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
DMV, Verification of Insurance – Budget Page DMV-50 (Volume 3)
Budget Account 201-4731
Mr. Krmpotic read the summary of this budget account on page 3 of the Joint Subcommittee on Public Safety, Natural Resources, Transportation Closing Report (Exhibit D). He stated the subcommittee recommends a reduction in the reserve from $1 million to $500,000 and recommends a revision to Nevada Revised Statutes (NRS) to support the reduction in the budget.
SENATOR NEAL MOVED TO CLOSE BUDGET 201-4731 ACCORDING TO THE SUBCOMMITTEE’S RECOMMENDATIONS, AND TO REQUEST AN APPROPRIATE BILL DRAFT TO REVISE THE NRS TO SUPPORT THE REDUCTION IN THE BUDGET.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
DMV, Motor Vehicle Pollution Control – Budget Page DMV-55 (Volume 3)
Budget Account 101-4722
Mr. Krmpotic read the summary of this budget account on pages 3 and 4 of the Joint Subcommittee on Public Safety, Natural Resources, Transportation Closing Report (Exhibit D). He stated the subcommittee supported amendments recommended by the Governor to eliminate excess reserve grant authority in FY 2002 and increase transfers to the Division of Environmental Protection each year. He said these actions increase the reserve from $500,000 to $1.3 million in FY 2002 and from $519,157 to $1.3 million in FY 2003.
SENATOR NEAL MOVED TO CLOSE BUDGET 201-4722 ACCORDING TO THE RECOMMENDATIONS OF THE SUBCOMMITTEE.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
DMV, Automation – Budget Page DMV-68 (Volume 3)
Budget Account 201-4715
Mr. Krmpotic read the summary of this budget account on page 4 of the Joint Subcommittee on Public Safety, Natural Resources, Transportation Closing Report (Exhibit D). He stated the subcommittee supported the Governor’s recommendation for the continuation of 3 Information Technology positions from the Project Genesis account and 11 new positions for programming support. He said that, based on the level of productivity for Department of Motor Vehicle programmers (1,000 hours) versus Department of Information Technology (DoIT) programmers (1,450 hours), the subcommittee recommended a Letter of Intent to request the department report semi-annually to the IFC regarding progress toward solving data corruption problems and resolving top priority tickets within the GENESIS system. He said the subcommittee also recommended these positions be considered by the 2003 Legislature for continuation beyond the next biennium.
Mr. Krmpotic stated the subcommittee supported the continuation of a webmaster approved by the IFC in December 2000.
Senator Raggio asked whether this budget contains all Highway Funds. Mr. Krmpotic replied that was correct.
SENATOR NEAL MOVED TO CLOSE BUDGET 201-4715 AS RECOMMENDED BY THE GOVERNOR; AND INCLUDING FURTHER RECOMMENDATIONS BY THE SUBCOMMITTEE THAT A LETTER OF INTENT TO REQUEST THE DEPARTMENT REPORT SEMI-ANNUALLY TO THE IFC REGARDING PROGRESS TOWARD SOLVING DATA CORRUPTION PROBLEMS AND RESOLVING TOP PRIORITY TICKETS (GENESIS); AND INCLUDING THE RECOMMENDATION THAT THESE POSITIONS BE CONSIDERED BY THE 2003 LEGISLATURE FOR CONTINUATION BEYOND THE NEXT BIENNIUM.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Senator Raggio explained that the Joint Subcommittee on Public Safety/Natural Resources/Transportation Closing List 11 (Exhibit E) contains budgets that were not closed by the joint subcommittee because they could not agree on dividing the Department of Motor Vehicles and Public Safety. He stated that the committee could deal with these budgets with the understanding that its actions would be consistent with the division of the department.
DMV, Director’s Office – Budget Page DMV-1 (Volume 3)
Budget Account 201-4744
Mr. Krmpotic read the question from decision item 1 on page 2 of the Joint Subcommittee on Public Safety/Natural Resources/Transportation Closing List 11 (Exhibit E). He asked whether the committee wished to approve the recommendation for the director position for the proposed Department of Motor Vehicles.
Senator Coffin asked, on the issue of splitting the Department of Motor Vehicles and Public Safety, what the impact would be on the 22 percent cap, all of which is contained in Senate Bill (S.B.) 481.
SENATE BILL 481: Provides for reorganization of department of motor vehicles and public safety into two departments. (BDR 43-1107)
Senator Coffin asked why S.B. 481 was not referred to this committee, noting that it may have gone to the Committee on Government Affairs. He pointed out this issue has a big impact on the budget. He asked what was happening with that bill.
Mr. Krmpotic said that S.B. 481 was heard in the Senate Committee on Transportation and passed out of that committee. He stated the original bill contained the request to split the department. He added the Senate Committee on Transportation amended the bill to repeal the 22 percent cap. He stated S.B. 481 is now in the Assembly Committee on Ways and Means. He said the Assembly Committee on Transportation heard the bill and amended it to include the 22 percent cap and approve the split of the department.
Senator Coffin asked whether it could be arranged for S.B. 481 to come back to the Senate Committee on Finance instead of to the previous committee it was heard in. Senator Raggio noted it had already been amended, so there would have to be a conference.
Senator Coffin pointed out that getting rid of the 22 percent was probably the last bit of leverage the Senate Committee on Finance had over the growth of the department. Senator Raggio stated the committee would have to be on the alert for when S.B. 481 comes back to the Senate.
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, agreed the 22 percent cap portion of the legislation was adjusted in the Assembly. He recalled for the committee that the field services budget was closed in the morning with a flat-line projection in the privilege tax collections over the 2003-2005 biennium. He said that meant there was no increase projected in privilege tax collections.
Mr. Ghiggeri stated if that budget is closed with the agency’s projections for privilege tax collections, it would reduce the Highway Fund appropriation by approximately $902,000 in FY 2002 and approximately $1.3 million in FY 2003. He concluded that would reduce the department below the 22 percent level in the Highway Fund need. He stated if there was a concern, the field services budget could be adjusted.
Senator Raggio concluded the committee could take any other action at this time. Senator Raggio asked Mr. Hataway whether he knew the impact of the issue on the budget.
Don Hataway, Deputy Director, Budget Division, Department of Administration, said he believed there was still no problem. He stated the reason the budget division proposed the 22 percent elimination was the fact that the Legislature has ultimate control over how much the department can spend. He said his division also proposed adding money to the IFC contingency fund to cover additional issues not known at this time. He also added one-shot appropriations out of the Highway Fund have never been included in the 22 percent. He concluded that the fears on this issue are convoluted.
Mr. Hataway pointed out the division falls back on the basis of giving the committee a good budget to consider and ultimately adopt, and if it turns out to be 21 percent or 23 percent, that is what the department must live with.
Senator Raggio asked how the 22 percent cap was arrived at.
Mr. Hataway recalled that it “has been around a long time,” but he did not know the history.
Senator Coffin recalled the last time the committee ran into serious difficulty with this cap was in 1991, when, in a panic, the committee had to adjust a lot of fees to increase the cap.
Senator Raggio recalled those who represented the trucking industry were concerned there was not going to be sufficient money used for the projects, but reiterated he did not know where the 22 percent came from.
Mr. Hataway said his division was concerned when it put the budget together with the large cost of living adjustments (COLAs) that were being built into the budget. He stated that with the fees for credit card charges, which is a new phenomenon, the division was “pushing up against the 22.”
Mr. Krmpotic pointed out key items in this account include the recommendation for a new director over the Department of Motor Vehicles, the transfer from the Department of Public Safety Director’s Office to facilitate implementation of a new department, and amendments proposed by the Governor to add a Management Analyst to revise the administrative cost allocation.
Senator Raggio asked whether the staff had checked the amounts in this budget to verify their accuracy.
Mr. Krmpotic replied that the staff reviewed the amounts based on information provided by the agency. He said the agency went back and did a thorough job of reviewing the split of the department, expenses, and the cost allocation. He concluded those amendments and changes are in order.
Senator Raggio stated that according to the backup material there was a revision submitted on May 9. He asked whether the numbers were consistent with the revision. Mr. Krmpotic stated these numbers do not reflect the revision.
Senator Raggio asked what was being done about that. Mr. Krmpotic replied the revision was submitted just prior to closing by the subcommittee.
Senator Raggio asked Mr. Hataway whether he knew what this was about. Mr. Hataway explained that it was just the latest reiteration of the cost allocation.
E-226 Reward More Efficient Operation – Page DMV-1
E-915 Transfer DMV Costs from B/A 4706 – Page DMV-2
Senator Raggio suggested an appropriate motion should be consistent with the committee’s other action to approve the new director position and the transfer of the positions in module E-915 and the provision for the Management Analyst.
SENATOR JACOBSEN MOVED TO CLOSE BUDGET 201-4744 ACCORDING TO THE GOVERNOR’S RECOMMENDATION, APPROVING THE PROVISION FOR THE MANAGEMENT ANALYST AND THE REVISIONS TO THE COST ALLOCATION AS INDICATED.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
DMV, Administrative Services – Budget Page DMV-4 (Volume 3)
Budget Account 201-4745
Mr. Krmpotic restated the overview and decision items on pages 4 and 5 of the Joint Subcommittee on Public Safety/Natural Resources/Transportation Closing List 11 (Exhibit E). He pointed out that the DMV, Administrative Services budget is a new budget account created to provide administrative support to the Department of Motor Vehicles.
E-226 Reward More Efficient Operation – Page DMV-4
Senator Raggio asked what “ASO IV” in decision unit E-226 refers to. Mr. Krmpotic replied that it is for Administrative Services Officer IV.
E-916 Trans Existing Positions from Budget Account 4714 – Page DMV-5
Mr. Krmpotic said this decision unit recommends the transfer of 42 out of a total of 63.51 full-time equivalent (FTE) positions that exist in the current Administrative Services budget account (4714).
E-960 Trans Existing Positions from Budget Account 4742 – Page DMV-5
Mr. Krmpotic stated decision unit E-960 recommends the consolidation of administrative support positions and expenses in the Department of Motor Vehicles.
E-992 Transfer E720 from Budget Account 4742 – Page DMV-6
Mr. Krmpotic added that decision unit E-992 should be eliminated from the budget based on the decision by the subcommittee to distribute computer purchases among the various budgets within the department.
SENATOR JACOBSEN MOVED TO CLOSE BUDGET 201-4745 WITH APPROVAL OF THE NEW ADMINISTRATIVE SERVICES OFFICER IV IN DECISION UNIT E-226; THE TRANSFER OF THE POSITIONS IN DECISION UNIT E-916; THE TRANSFER OF 11 POSITIONS IN DECISION UNIT E-960 FROM THE MANAGEMENT SERVICES BUDGET ACCOUNT; THE TRANSFER BY THE STAFF OF THE EXPENSES RELATED TO THE PRINTING OF THE REGISTRATION FORMS FROM THAT BUDGET; THE AUTHORITY TO MAKE THE CHANGES TO THE TRANSFER OF THE EXPENSES AS REVENUES FOR DRIVERS LICENSE PHOTO FEES; THE AUTHORITY TO MAKE THE CHANGES FOR THE TECHNICAL ADJUSTMENTS; THE ELIMINATION OF MODULE E-992; AND THE MODIFIED COST ALLOCATION FOR THE NEW DEPARTMENT OF MOTOR VEHICLES.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS MATHEWS AND O’DONNELL WERE ABSENT FOR THE VOTE.)
* * * * *
DMV, Motor Carrier – Budget Page DMV-38 (Volume 3)
Budget Account 201-4717
Mr. Krmpotic briefly restated the contents of the decision items contained on pages 7 through 9 of the Joint Subcommittee on Public Safety/Natural Resources/Transportation Closing List 11 (Exhibit E).
Senator Neal asked whether the motor carrier section receives money from the special fuel tax. Mr. Krmpotic replied that the motor carrier section collects special fuel tax and diesel tax.
Senator Neal asked whether it receives any money from that. Mr. Krmpotic replied that it receives a Highway Fund appropriation to administer that program. He stated the proceeds are all deposited to the Highway Fund.
Senator Neal asked whether the funding comes directly from the fuel tax. Mr. Krmpotic said it does not. Senator Neal asked whether it comes indirectly from the fuel tax. Mr. Krmpotic replied it does.
Senator Neal pointed out there is a bill before the committee to exempt special fuel. He suggested the committee take a look at that before they vote on the budget.
Senator Raggio stated he did not know the impact of the bill. He asked whether it was a recommendation not to transfer the gasoline tax program from the Department of Taxation.
Mr. Hataway replied the recommendation was merely to defer the transfer for 6 months, and explained that was only proposed in an attempt to balance the budget.
Senator Raggio noted that would be effective in July instead of January. He asked whether that is presently in a bill.
Mr. Ghiggeri explained the 1999 Legislature approved A.B. 584 to provide for the transfer of the gas tax collection from the Department of Taxation to the Department of Motor Vehicles, effective January 1, 2002.
ASSEMBLY BILL 584 OF THE SEVENTIETH LEGISLATURE: Transfers responsibility for collection of taxes and fees imposed on certain fuels from department of taxation to department of motor vehicles and public safety and revises provisions relating to imposition and collection of tax on certain types of motor vehicle fuel. (BDR 32-212)
Mr. Ghiggeri stated one of the budget reduction proposals considered in the past provided for the deferral of that transfer to July 1, 2002. He explained the staff’s calculations now, as far as the General Fund balance, would indicate the deferral of that transfer at this point would not be required to balance the budget.
Senator Raggio concluded the committee may go ahead and make that transfer on January 1, 2002, according to the original bill.
Senator Raggio asked whether the rest of the actions would be adjusted accordingly if the committee based its motion on the transfer of the gas tax collection from the Department of Taxation effective January 1, 2002
Mr. Krmpotic replied that is correct. He explained the items indicated in Joint Subcommittee on Public Safety/Natural Resources/Transportation Closing List 11 (Exhibit E) are based on the January 1, 2002, transfer.
SENATOR NEAL MOVED TO CLOSE BUDGET 201-4717, BASED UPON THE TRANSFER FROM THE DEPARTMENT OF TAXATION BEING EFFECTING JANUARY 1, 2002; AND APPROVING THE ITEMS THAT WERE RECOMMENDED BY THE STAFF, INCLUDING THE TRANSFERS, THE RECOMMENDATION TO ADD 5 POSITIONS FOR THE GASOLINE TAX COLLECTION, RECOMMENDATIONS ADJUSTING THE COST OF VEHICLES AND REDUCING THE COST OF THE MODULAR FURNITURE, THE IMPLEMENTATION OF THE FUEL TRACKING SYSTEM, AND ACCEPTANCE OF PAYMENTS THROUGH THE INTERNET.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS MATHEWS AND O’DONNELL WERE ABSENT FOR THE VOTE.)
* * * * *
Mr. Ghiggeri stated that, based on the committee’s actions on this budget account by allowing the transfer of the gas tax to go forth on January 1, 2002, the staff would request authority to align the Department of Taxation’s budget to accommodate what was done for the Department of Motor Vehicles.
SENATOR NEAL MOVED TO GRANT AUTHORITY FOR THE STAFF TO ALIGN THE DEPARTMENT OF TAXATION’S BUDGET TO ACCOMMODATE THE ACTIONS OF THE PRIOR MOTION.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS MATHEWS AND O’DONNELL WERE ABSENT FOR THE VOTE.)
* * * * *
Senator Raggio pointed out there were five other budgets that would be under the newly created Department of Public Safety. He asked whether there were any special recommendations to be discussed. He suggested that, if there were not, a motion could be entertained to approve those budgets based upon the committee’s decision to split the Department of Motor Vehicles and Public Safety.
Public Safety, Training Division – Budget Page PS-129 (Volume 3)
Budget Account 101-3775
Mr. Krmpotic stated that the only item he would point out was that in the training division budget is the recommendation to allocate the cost of continuing education training. He pointed out the staff received a request from the department to place that funding in FY 2002. He stated that The Executive Budget reflects that funding in FY 2003.
Senator Raggio asked whether it would replace General Funding.
Mr. Krmpotic replied that the recommendation would increase General Fund and seek authority to charge other funding sources indicated on the table on page 21 of the Joint Subcommittee on Public Safety/Natural Resources/Transportation Closing List 11 (Exhibit E).
Senator Raggio noted that would reduce additional funding for in-house command and supervisor training as amended by the department from $100,000 to $67,000. Mr. Krmpotic replied that was correct.
Mr. Krmpotic stated the item was presently recommended for funding from Highway Funds, and the department indicated the training would be provided to staff throughout the department, which would be funded from a variety of funding sources as indicated on the table on page 21 of Exhibit E.
Director’s Office – Public Safety – Budget Page PS-1
Budget Account 201-4706
Public Safety – Administrative Services – Budget Page PS-7
Budget Account 201-4714
Public Safety – Internal Affairs – Budget Page PS-23
Budget Account 201-4707
Public Safety Technology Division – Budget Page PS-28
Budget Account 201-4733
Public Safety, Training Division – Budget Page PS-129
Budget Account 101-3775
SENATOR NEAL MOVED TO CLOSE BUDGETS 201-4706, 201‑4714, 201‑4707, 201-4733, AND 101-3775 AS ADJUSTED TO ACCOMMODATE THE REQUEST OF THE DEPARTMENT WITH REQUEST TO THE FUNDING OF CONTINUING EDUCATION.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS MATHEWS AND O’DONNELL WERE ABSENT FOR THE VOTE.)
* * * * *
Senator Neal asked whether the department could be asked to report to the IFC within 12 months as to how the split in the Department of Motor Vehicles and Public Safety is working out.
Senator Raggio agreed that would be a good idea. He said he believes the committee should have a report regularly when the IFC meets on the issue. He asked that a Letter of Intent be prepared to that effect.
Senator Raggio opened the hearing on S.B. 292.
SENATE BILL 292: Revises provisions governing education. (BDR 34-382)
Senator Raggio indicated the committee had the first reprint of this bill before them. He stated the bill was heard in the Committee on Human Resources and Facilities.
Senator Maurice E. Washington, Washoe, Number 2, stated that S.B. 292 deals with provision for charter schools, and with distance education. He stated it is a combination of several bills in distance education that have been considered, one from the Assembly and two from the Senate.
Senator Washington stated the provisions in S.B. 292 are very necessary for the operations of charter schools. He stated it is a combination of the stakeholders, both the State Department of Education and the providers of education for charter schools. He said concerned people got together in round-table fashion and looked at the operations of charter schools and the things that would make it easier for them to operate. The participants discussed what would make the schools more comprehensive in the application process and more financially stable.
Senator Washington indicated the committee had been presented with a brief outline of the bill (Exhibit F).
Senator Washington stated the first important thing about S.B. 292 is that it would permit alternative sponsorship by creating an 18th school district, equivalent to a sponsoring agent through the State Department of Education. He said this is important because the United States (U.S.) Department of Education has said that it is necessary for charter schools to have alternative routes for sponsorship. He explained this would open up another avenue for charter schools to receive additional funding from the U.S. Department of Education. He pointed out those funds cannot currently be accessed because there is only a single route of sponsorship, and that sponsorship is through the school districts themselves. He stated this provision will give the opportunity to access federal funds.
Senator Washington stated the bill also authorizes sponsorships to review applications for financial viability. He explained this is important, because some charter schools have operated not just on a shoestring budget, but on a wish and a prayer. He pointed out this bill gives the sponsoring agent along with the State Department of Education an opportunity to review the application and make sure they are financially stable so there will be no charter schools closing like the Tech World school in Las Vegas.
Senator Washington further stated this bill clarifies the process for adding grades. He stated some charter schools go from grade 1 to grade 6 and they may want to add grades 7 and 8. He explained they currently would have to resubmit an entire application for those additional grades, even though elementary schools and junior high schools are all in one section in the Nevada Revised Statutes. He pointed out that when it comes to high school there is an entirely different set of statutes for operating them. He explained if a charter school were going to add high school grades, they would have to resubmit an entire application. The bill would allow charter schools to add elementary grades or other grades without going through a new application.
Senator Washington added S.B. 292 deletes the conditional charter school provisions and adopts a trigger mechanism for early approval of charter schools. He pointed out that traditional waivers do not work. He stated there ought to be triggers in place for approval of applications for charter schools.
Senator Washington stated the bill requires a governing body to undergo fingerprint and background checks of those applying to be board members on governing bodies of charter schools.
Senator Jacobsen asked whether there have been any objections raised to the proposed background checks or fingerprinting.
Senator Washington replied there has been no opposition to the background checks. He stated he objects to school board members going through background checks, since other elected officials do not. He expressed uncertainty about the necessity of background checks. However, he stated some of the stakeholders involved have said it is a necessity.
Senator Jacobsen said it seems strange for an educational system to have a problem with that. Senator Washington agreed with him on that.
Senator Washington noted the bill also provides for a statewide diploma as opposed to a diploma from the sponsoring agent. He said this issue arose because the Gateway to Success school in Churchill County has criteria for receiving a diploma that follows the lines of the state provisions, as opposed to those of Churchill County. Churchill County School Board asked why it should offer the charter schools a diploma when it is not meeting the criteria set by the school district. He explained the provision would provide the alternative option for a statewide diploma as long as it meets the credits required by the state.
Senator Raggio asked whether students in a charter school have to pass the high school proficiency exam. Senator Washington responded, yes.
Senator Washington stated the bill provides for charter schools to provide for a class of traditional public school students or home school students if space is available. He recalled during the last session the Legislature dealt with extracurricular activities for public education. He said this bill allows for the same provision for charter schools if space is available. He stated certain classes are not offered for home-schooled students. He pointed out that if the courses were offered by a charter school, it would provide the option to participate if space is available and certain conditions are met.
Senator Washington added the bill provides for reimbursement of sponsors for required administrative services, 2 percent in the first year and second year, and 1 percent in following years. He pointed out the sponsoring agents have claimed it has cost them to administer some of the applications and include certain procedures for charter schools to operate within the district. He said they have asked that 2 percent of the allotment be set aside for those administrative duties. He stated the charter school proponents have agreed to that.
Senator Washington said the bill authorizes charter schools to employ higher education personnel as faculty members. He explained this will give charter schools the opportunity to tap into some of the university faculty for certain subjects for which they cannot normally hire others to teach. He noted there is a charter school in the Reno area that employs several professors who teach courses in the junior high setting.
Senator Washington stated the bill also would clarify bargaining issues. He stated that was requested by the Nevada State Education Association (NSEA) with regard to collective bargaining between the government and the employees of charter schools. He said the bill would allow the employees, after the first year, to set up their own collective bargaining unit. He stated that NSEA was very specific that in the first year of operation, even though the employees collectively bargain in a given district, the district bargaining unit may not necessarily represent them if there is a grievance.
Senator Washington said the bill also specifies that the state sponsored charter school employees may, at the expiration of an applicable collective bargaining agreement, form a new unit for their own purposes. Another provision, he stated, allows state sponsored schools to receive funding in the manner other charter schools receive funding, or receive an average weighted state pupil funding, whichever is higher. He said this would be for the proposed 18th district that would be created. He said it was difficult to figure out how the per pupil count would be funded, if the charter school applicant went to the State Department of Education.
Senator Washington added the bill requires charter school funding to be housed within Nevada financial institutions. He said this was a request that came from Senator Mathews during the summer, that all Distributive School Account (DSA) funding should be housed in Nevada state financial institutions.
Senator Washington stated the bill also calls for tax-exempt status for real or personal property if it is rented or leased to a charter school. He said this request was made because several from Dermody Properties, who lease real property to Sierra Nevada Academy, were asking for the same provision that is provided to the university system.
Senator Washington stated the bill includes a provision that sets aside five discretionary units for charter schools for special education, which is a mandate from the U.S. Department of Education. He said this would determine who the Local Education Agencies (LEAs) will be, whether it is the sponsoring agent or the charter school itself. He stated some discretionary funds need to be set aside for these charter schools to operate because they are getting a large portion of special education students. He stated one discretionary unit is about $28,000, and said charter schools are asking for five such units to be set aside to deal with these students.
Senator Washington added the bill sets up a revolving account to assist charter schools with start-up costs and operating costs. He said this fund would be operated by the State Department of Education. It would work with an application process with a certain annual percentage rate (APR) setup and 1 or 2 points for administrative procedures set up within the revolving loan. He stated the charter school would be able to apply for a loan, set up a payment schedule based on a certain percent, and the fund would become self-contained once it is funded.
Senator Washington noted some have suggested that, because of the financial situation in the state, there may not be funds to operate such an account. He stated he is still interested in seeing the mechanism set in place whether or not private individuals want to donate or give gifts, and the State Department of Education could run it from there. He said the last provision is for evaluation of the charter schools.
Senator Raggio asked who would evaluate charter schools. Senator Washington stated a person from the university gave a presentation to the Legislative Education Committee during the summer. He said this person was asking for $10,000 to evaluate the 8 charter schools.
Senator Raggio asked which section of the bill includes appropriation. Senator Washington replied it is in Section 58.
Senator Raggio asked the research analysts to prepare a breakdown of the sections in this bill that are applicable to each of the points that Senator Washington had made.
Senator Mathews asked what the total fiscal note is on this bill.
Senator Washington replied it is $110,000. He emphasized that $100,000 of that is for the revolving account. He stated if the committee deems the money is not available, the provisions of the mechanism to set up the account will still be necessary.
Senator Raggio asked what section the $100,000 was in. Senator Washington told him it is in Section 57. He said that Sections 5, 6, and 7 set up the mechanism for the revolving account, distribution, and collection.
Senator Raggio asked what the necessity is for the revolving account.
Senator Washington replied it is for start-up provisions and operations. He said what has happened with the evolution of charter schools is that the current DSA accounts are not enough to keep charter schools running through the first year and they find themselves falling short. He pointed out several charter schools have fallen short in the first year of continuing their operations, salaries, facilities, and benefits. He stated they “scramble” trying to find the necessary funds to keep themselves operating. He said some schools have even had to go back to the sponsoring agents as well as to the State Department of Education to ask for additional funds to keep themselves going. He said this provision in the bill would give the schools the opportunity to apply for additional money to keep them going throughout the year and pay it back in the following years.
Senator Jacobsen asked whether charter schools are still a necessity.
Senator Washington replied charter schools are very much a necessity. He stated what has happened so far is that a lot of charter schools are actually picking up students that have “fallen through the cracks” but have decided to go back to school. He said parents are looking for alternative options for students that may not be thriving in the public education arena. He emphasized charter schools are not the catch-all or the answer to every situation, but just another avenue for those who want an alternative to the current setting available to them. He stated that his interest is in providing as many options for parents as possible.
Senator Washington stated distance education requests came from stakeholders, the State Department of Education, school districts, and those who are providing distance education for students. He explained they met in round-table fashion and ideas were prioritized through a combination of compromises among those individuals.
Senator Washington stated three bills were looked at. He said one of them, S.B. 108, went to Senator Rawson’s committee.
SENATE BILL 108: Authorizes school districts and charter schools to provide programs of distance education. (BDR 34-834)
Senator Washington said another, A.B. 127, is currently in the Assembly.
ASSEMBLY BILL 127: Authorizes school districts and charter schools to provide programs of distance education for pupils at risk of dropping out of high school. (BDR 34-461)
Senator Washington said the third related bill is S.B. 399, which has to do with teachers’ unions.
SENATE BILL 399: Revises provisions governing charter schools and authorizes programs of distance education. (BDR 34-859)
Senator Raggio inquired whether Senator Washington had been working with the Assembly on this bill. He noted it is now late in the session and S.B. 292 is a long bill.
Senator Washington stated he worked with the sponsor, Assemblywoman Kathy A. Von Tobel, regarding some of the provisions in her bill that were put in S.B. 292.
Senator Washington stated the first provision for distance education in S.B. 292 limits the number of pupils that are eligible for distance education. He said the list includes those students who are at risk of dropping out of school, who currently participate in independent studies, who are unable to attend because of medical reasons, who need alternative education because they lack access to advanced courses, or who are set in certain districts but need courses from other districts that may only be provided through distance education.
Senator Washington said the second provision permits part time enrollment for home school and private school students. He said a third provision is to count for the DSA one distance education student as one student enrollment. He said it provides for a full-time distance education student to be counted as one full-time student.
Senator Washington stated the fifth provision involves detailed provisions relating to the State Department of Education to set up regulations governing the application of distance education. He said it also sets up the criteria for those regulations to be reviewed by the legislative education committee during the off session. He said it also sets up effective dates for those regulations to be implemented, and a second effective date for the actual approval and commencement of distance education.
Senator Washington said the last provision is the set-up of requirements for course studies that the State Department of Education will approve for distance education.
Senator Neal asked whether the curriculum of a charter school is different than that of the public school.
Senator Washington replied the curriculum for charter schools has to be approved within the application process by the State Department of Education. He said the curricula have to be submitted, and can be flexible, innovative, and creative, based on the types of students they are applying for. He emphasized the curricula must be approved by the State Department of Education.
Senator Neal asked whether there is a particular reason why “school districts or the State Board of Education” is cited as being able to run a charter school.
H. Pepper Sturm, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau, stated charter schools are required to teach the core curriculum that is established by the Council to Establish Academic Standards at the secondary level to allow for the possibility of transfers from charter schools to public schools and vice versa. He said that math, English, science, and social studies are defined as the core and these subjects must be taught. He said that is a requirement enacted by the 1999 Legislature.
Senator Washington added the way the statute currently provides for sponsorship is that the applicant receives an application from the State Department of Education. He said the applicant then completes the application and returns it to the department. The department then looks at the application to make sure it is in compliance with the requirements of the statute. He stated the application then goes to the sponsoring district, which also looks at the application and puts it on its agenda for review by their board with the applicant.
Senator Washington pointed out the current statute does not provide for denial of an application. He stated if there is anything missing or that needs clarification, the application can be sent back to the applicant.
Senator Neal interjected his question goes specifically to Section 9. He stated that section allows trustees to apply to the department to sponsor a charter school.
Senator Raggio pointed out there is a federal requirement that there be an alternate sponsorship available.
Senator Neal asked whether that is what this is about. Senator Washington responded what is being asked for in S.B. 292 is an alternative sponsorship because currently funds from the United States Department of Education cannot be accessed because there is only one avenue of sponsorship, and that is the school districts themselves.
Senator Neal asked whether the state board is being added as a sponsor. Senator Washington replied that is correct.
Senator Washington stated the current statute provides for the state board to set up a subcommittee to review applications. He stated he wants that language expanded to so the subcommittee could be the sponsoring agent for alternative sponsors. He said this allows the charter schools and the state to go after federal funds that they cannot presently access.
Senator Neal asked whether the funds will be made available to the charter schools by the mere fact this is just stated in the law. Senator Washington stated that is correct.
Senator Raggio said that was his question also. He stated he understood that charter schools cannot qualify for federal money unless they have the alternative sponsorship. Senator Washington reiterated it is not in the law now, and that makes the need for the alternative sponsorship.
Senator Neal stated his question goes further than that. He said he understands that just by the mere fact it is in the law, and even if no action is taken by the board to sponsor schools, they will be eligible to receive funds. Senator Washington replied that is correct.
Senator Neal noted that in Section 5 the total amount of money that may be given to a charter school must not exceed $25,000 a year. He asked where the money comes from in the beginning.
Senator Washington stated the money is being asked for in the bill in section 57 on page 51. Senator Neal asked whether that is an appropriation. Senator Washington replied it is an appropriation of $100,000.
Senator Raggio noted the money in Section 57 is a transfer from the DSA, and the money in Section 58 is an appropriation.
Senator Washington clarified that Section 58 is asking for $10,000 to evaluate charter schools. He confirmed that the money in Section 58 is a transfer from the DSA.
Senator Neal asked whether the transfer from the DSA to the fund will be created within the treasury department. Senator Washington replied yes.
Senator Neal asked for clarification that this money would be put in a revolving account and any interest that comes from it will go into the account itself. Senator Washington responded that is correct.
Senator Neal asked where in the bill it says a charter school must report back to the Legislature as to the expenditure of these funds. Senator Washington replied the bill does not provide for that. He stated he feels it would be necessary, and there should be some mechanism for reporting.
Senator Raggio pointed out Section 58, if approved, would require a report to the Legislative Committee on Education on the evaluation of those schools. Senator Washington agreed that could be used.
Senator Neal pointed out that would not be to the Legislature, but just to the committee. Senator Neal asked who the committee would report to.
Senator Washington directed attention to Section 58 subsection 3. He said it indicates the evaluation should be reported to the seventy-second legislative session.
Senator Neal asked who the bureau is in that section.
Susan E. Scholley, Senior Research Analyst, Research Division, Legislative Counsel Bureau, stated the bureau is the Legislative Bureau of Educational Accountability and Program Evaluation. Senator Neal asked whether that is a new agency. Ms. Scholley stated it is a bureau within the Fiscal Analysis Division of the Legislative Counsel Bureau.
Senator Raggio stated it was created in the Education Reform Act.
Senator Neal concluded the bureau would submit a written evaluation including any recommendations for the Legislature. He pointed out that nothing is said about the funding.
Senator Washington explained it was left to the State Department of Education to set up the criteria and the mechanism for dispensing and collection.
Senator Coffin commented it makes sense to fund distance education. However, he asked how a fair level of funding would be determined.
Senator Washington replied that currently in S.B. 399 a distance education student counts for six-tenths of the appropriation for the area in which a student resides. He stated in S.B. 292 each student is counted as a full-time student and the appropriation would be received by the district in which the student is educated. He explained if the student receives education from White Pine School District but lives in Washoe County the appropriation amount would go to White Pine for providing that education.
Senator Coffin suggested there should be language that would allow someone to determine, not necessarily a fixed percentage in the law, but rather something that allows for some flexibility based on the investment of time and money put into distance education. He stated he worries about a flat ratio of money because some students will do better than others.
Senator Washington pointed out an earlier version of the bill provided the schools would be allocated the cost of providing distance education, as opposed to what is currently in S.B. 292. Senator Washington stated the bill could revert to that prior language if it was the committee’s desire.
Senator Coffin stated it may not be prudent to consider just “cost plus” because it leaves the funding open to abuse. He suggested it would be appropriate for someone without a vested interest to determine what the fair amount of money would be. He stated that what is considered fair may change from school to school because of varying amounts of technology and contact time with students.
Senator Washington stated that either method is acceptable to him. He recalled it was stated during testimony that it would be a lot easier and processing would be simplified to use the DSA allotment per student. He explained that is the reason the bill was written the way it is. He said the process becomes convoluted when the actual cost of courses are used.
Raymond Bacon, Lobbyist, Nevada Manufacturers Association, stated he wished to clarify a comment he made to the committee prior to this meeting. He referred to Section 57 in S.B. 292 and suggested that the lines “transfer from the state Distributive School Account” be removed and replaced by “establish an account.” He suggested the problem would be resolved by removing the words at the end of the section starting, “the sum of $100,000” and replacing them with “donations and grants.”
Senator Raggio recalled Mr. Bacon had testified before the committee that he believed the change was realistic and money would not have to be transferred from the DSA.
Mr. Bacon agreed. He said money from grants and donations could be found and that part of the fiscal issue would be solved.
Senator Raggio stated the committee would refer to his previous testimony on this matter. He pointed out the bill would have to be amended if that suggestion were followed.
Steve Williams, Lobbyist, Washoe County School District, thanked Senator Washington for his work on S.B. 292. He stated the Washoe County School District worked with Senator Washington, and much of what the school district desired was incorporated into the bill.
Mr. Williams stated his school board has not taken any position on the bill as a whole, but supports several of the concepts. He said those include approving the State Board of Education as an alternative source of school chartering. He said the board also supports the idea of a distinctive diploma for the charter school if students do not meet the same graduation requirements as the school district in which they are located. He stated such a diploma would represent “truth in labeling.”
Senator Raggio asked whether the students would still need to pass the high school proficiency exam. Mr. Williams said that is correct.
Mr. Williams said charter schools have to abide by all the state mandated requirements. He stated Washoe County has slightly stricter requirements in some areas for graduation. He said the school board thinks if a charter school does not have the same requirements that it should not say “Washoe County Diploma,” but rather say that it is a charter school diploma.
Mr. Williams added the school board thinks the reimbursement for administrative costs is also a good thing.
Mr. Williams pointed out that the school board has a couple of problems with the legislation. He stated the board agrees with Mr. Bacon on the provision for the $100,000.
Mr. Williams stated, regarding the transfer of five special education units to charter schools, there is already a shortage of units. He said the school district thinks this transfer would exacerbate an existing problem.
Senator Raggio asked what section that transfer is found in. Mr. Williams replied it is in Section 59.
Mr. Williams requested that additional special education units be included and not be taken from the existing allocation.
Ricci Elkins, Lobbyist, Alliance for Children’s Educational Excellence, explained her organization represents several charter schools with populations of approximately 500 students. She stated the alliance is very much in favor of S.B. 292. She indicated they also sat on the task force and helped draft this bill, and they are excited about the possibilities.
Ms. Elkins referred to Senator Jacobsen’s question as to whether charter schools are still needed in the state. She stated they are still needed. She said that with the committee’s help the law can be improved. She pointed out it has been recognized nationally that out of the 39 states that have charter school laws, Nevada’s rank 36th in terms of restrictiveness. She said a national study showed that the more restrictive a state is, the more likely charter schools are to fail. She stated that, with the improvements in S.B. 292, it will be possible to demonstrate to the public that great efforts are being made to reform education and provide new educational opportunities for students.
Ms. Elkins stated charter schools provide small school settings for Nevada’s children. She pointed out national studies have demonstrated that one of the issues revolving around school violence and disruptions and behavioral disorders is the propensity for trouble in larger school settings. She stated charter schools are small enough bodies that they are able to provide a more personalized oversight and feeling of community to their schools.
Ms. Elkins stated her organization wants to emphasize the alternative sponsor route, which is mentioned in the bill in several sections, but predominantly in Sections 9 through 11. She reiterated part of the federal requirements for grant funding include alternative routes of sponsorship. She stated it is a necessity for Nevada’s schools to qualify for this grant money to support charter schools.
Ms. Elkins added one of the reasons The Annie E. Casey Foundation and the Walton Family Foundation are not willing to sponsor charter schools in Nevada is that there is no alternative sponsorship and the law is too restrictive. She stated they do not want to put money into schools here and have them fail because of lack of support. She said they have indicated they are willing to provide start-up funding and support funding should the state adopt some significant changes in the law.
Ms. Elkins said the alliance is concerned that schools for the gifted and talented and for the disabled can apply directly to the state, but any other charter schools have to first go through the school district, be denied, and then apply to the state. She stated that, while it is not a “fighting issue” for the alliance, it would be better for charter schools to apply either to the school district directly or to the state directly, rather than having the provision where it is necessary to be denied by the district.
Ms. Elkins added that the alliance is concerned about Section 12 regarding deleting the charter. She said this deletes the former Sections 3 and 4, the conditional charter phrase. She stated this is extremely important for funding. She said her organization is finding several schools have struggled in their first year, and a big part of that has been that charter schools have had to try to come up with all their start-up finding in their first year.
Senator Raggio asked whether Ms. Elkins had some proposed amendments to the bill. He said the committee needed to have them in written form. Ms. Elkins said she would be happy to do that.
Ms. Elkins concluded she is very much in support of S.B. 292 and very appreciative of the efforts of Senator Washington.
Senator Jacobsen asked whether charter schools have competitions with other schools in curriculum or sports.
Ms. Elkins replied the Coral Academy of Science entered the math competition and won the best first year school in the math competition. She stated they have science fairs and spelling bees. She said they are very participatory in academic activities.
Randy Robison, Lobbyist, Nevada Association of School Boards, expressed his association’s unqualified support for the bill. He distributed a proposed amendment (Exhibit G). He explained the amendment simply reinstates some language in the original bill.
Mr. Robison stated local school boards of trustees consider both the financial effect and the financial viability, and members work together to help make responsible decisions. He requested the proposed amendment be considered by the committee.
Senator Raggio commented that Mr. Robison suggested amendment to Section 11 subsection 2 on page 9, beginning at line 19 in the first reprint.
Mr. Hataway stated the budget division did not have a position on S.B. 292, but said he wanted to point out two fiscal issues. He noted concern regarding Section 57. He pointed out the DSA is not a fund in the sense that it has reserves to use for specific purposes.
Senator Raggio interjected it is still unknown how the DSA will be closed out for this biennium.
Mr. Hataway agreed, but added there would have to be an appropriation from the General Fund, or there would have to be reduced expenditures somewhere else in the DSA.
Senator Raggio noted Mr. Bacon suggested this not be funded either way and suggested that if the Legislature processes this bill, it is guaranteed there will be a fund. He stated otherwise it would not be effective. Mr. Hataway reiterated there are no reserves to use for this purpose.
Mr. Hataway indicated the other fiscal issue is in Section 59. He stated that, in terms of the special education units, if the money is taken from the existing block of special education units, the existing 17 school districts would lose those allocations. He also pointed out if the committee adds 5 units above what is already included, there would be a fiscal impact of approximately $150,000 on the DSA.
Rose E. McKinney-James, Lobbyist, Clark County School District, stated the Clark County School District was involved in some of the discussions on this bill. She expressed support for the amendment presented by the Nevada Association of School Boards. She said it will address the concerns the district has with respect to any fiscal implications for the district that this bill may generate.
Ms. McKinney-James also expressed concern with Section 25 of S.B. 292 and the lack of specified criterion for participation in distance education. She said the school district believes this open endedness could create some issues, both with fiscal implications and with complete misunderstanding of the total impact.
Senator Raggio asked what page Section 25 was on. Ms. McKinney-James replied it was on page 25. Senator Raggio noted the section speaks about pupil count.
Ms. McKinney-James agreed. She also indicated the pupils of grades 1 through 12 inclusive are involved in a program of distance education. However, she said there is no specific criterion outlined in terms of what or who those students need to be in order to be eligible to participate.
Senator Raggio asked whether the school district proposed an amendment. Ms. McKinney-James responded it had not. Senator Raggio asked that it be presented when there is one.
Ms. McKinney-Jones pointed out that on page 16 of the bill there is amended language in Section 17 which provides for a 2 percent administrative fee in the first year, and 1 percent for each of the succeeding years, if that becomes necessary. She said, given the potential fiscal implications, the school district strongly supports that section of the bill.
Al Bellister, Lobbyist, Nevada State Education Association (NSEA), stated that, while there are certain provisions of S.B. 292 the association supports, there are portions of the bill that have some serious policy implications and are troublesome to the association. He said for those reasons the association cannot support the bill.
Mr. Bellister stated that, in addition to the points Mr. Hataway made about Section 57 and Section 59, the NSEA is also concerned about Section 9. He said that section authorizes the state board to serve as a sponsoring agent.
Senator Raggio pointed out it is required to have that in order to be eligible for federal funding. He asked whether that is correct.
Mr. Bellister explained he has a different impression of what the federal law requires. He said there are certain federal funds available to charter school operators, and the charter schools in Nevada currently receive federal money. He explained this bill just provides access to “another pot of federal dollars,” for which an alternate sponsor may be required.
Senator Raggio asked why the association would object to qualifying for this particular source of funding.
Mr. Bellister replied there are two reasons. He said one is a policy question. He said the state board is primarily a policy making board as opposed to getting into the business of sponsoring charter schools.
Senator Raggio asked whether the board would have an interest in making those federal funds available if the school could be operated. Mr. Bellister responded the board probably would.
Mr. Bellister said the second and more important concern is with the special education provisions. He said federal law regarding special education requires the designation of a local education agency at the state or local level. He suggested if a charter school has a student who has a disability and cannot provide services to that child, it can then rely on the local school district for support. He said the same arrangement would arise in a relationship with a state board as a sponsoring agent, since the state board is not a local education agency.
Mr. Bellister stated Section 19 is also of concern. He noted the law currently requires that 70 percent of the faculty be licensed teachers. He stated that particular requirement has been violated in some cases by certain operators and there have been no sanctions applied. He said it is not desirable to see the situation further watered down as the bill proposes to do, allowing that teachers would not need to teach in their area of endorsement. As an example, he suggested a licensed instructor endorsed to teach English could be teaching math or social studies.
Mr. Bellister added the NSEA is concerned about Section 20. He acknowledged that Senator Washington is correct in that the NSEA offered proposals to amend some of the collective bargaining provisions of charter schools. However, he stated the NSEA did not offer the section that speaks of individual bargaining. He pointed out the bill is set up so that collective bargaining agreements would stay in effect until such time as a new exclusive bargaining agent would be recognized by the governing board of a charter school. He noted in the first year of operation the existing collective bargaining agreement is in place, but it would cease to apply when a new bargaining agent is recognized. He said the section further indicates the ability to individually bargain would remain. He stated that is completely contrary to the whole idea of collective bargaining. He stated that was not something the NSEA proposed, and it would remain opposed to the whole notion of individual bargaining in a collective bargaining context.
Mr. Bellister stated the distance education portion of S.B. 292 that relates to funding is found in Section 27. He pointed out distance education providers do not provide student transportation. He said the NSEA has a bill, S.B. 399, that was heard in the Senate and is currently on the Assembly side. He said the bill proposed for distance education provides that basic support would be calculated on the basis of six-tenths apportionment.
Mr. Bellister explained NSEA looked at it more closely and asked for an amendment on the Assembly side. He explained the amendment would give distance education providers the basic support minus the amount that is attributable to student transportation. He stated that amount is easily calculated by the State Department of Education because it currently makes those calculations. He noted the statewide average amount for student transportation is about $278 a pupil. This, he stated, would be a windfall to providers of distance education, and the NSEA does not think that is appropriate.
Mr. Bellister added Section 27 subsection 3b is very troublesome. He said the association reads it to mean the charter school would get the full basic support amount minus the amount per pupil which would have been received by the school district in which the pupil resides. He noted the remainder must be paid directly to the school district in which the pupil resides. He suggested this means the provider who can “do it” for $3,000 instead of the basic support amount of $4,000 will in fact be allowing the school district to keep the remaining $1,000. He stated it sounds like a “kickback” arrangement and is not a good use of public money.
Mr. Bellister referred to Section 27 subsection 5. He said it is troublesome because it clearly provides funding for charter schools that would provide distance education to students who are enrolled in private schools. He said he assumes that includes sectarian schools and home school students. He recalled that with the first charter school bill in 1997 there was an agreement that charter schools would not be used as a method to provide financial assistance to private schools and home schools. He said that is contained in Nevada Revised Statutes (NRS) 386.505. He remarked this appears to be a way to get around the existing prohibition and allow financial assistance to home schools and private schools, and it is further against the Nevada Constitution.
Mr. Bellister pointed out this provision is very similar to a provision in A.B. 127.
Senator Raggio asked whether all this testimony was given to the Committee on Human Resources.
Mr. Bellister replied most of the concerns were registered either in committee or in subcommittee.
Mr. Bellister stated his last point concerns Section 38 which also defines special education. He said the NSEA firmly believes there ought to be a definition in Nevada law for what distance education is and what it is not. He noted some of the points in Section 38 are goals the NSEA originally proposed. He said this is an excellent tool to supplement the existing curriculum.
Senator Raggio stated if the Legislature is to process this bill it has to be done in a very few days. He asked whether Mr. Bellister could give the committee a sheet of bullet points and the sections of concern, with references to the other bills he mentioned.
Mr. Bellister said he would do that. He also said he and Senator Washington planned to meet the next day to come to some “meeting of minds.”
Senator Raggio reiterated the committee does not have a lot of time to work through a major bill of this kind, and to revisit everything that was heard in another committee.
Senator Raggio instructed a letter (Exhibit H) from Lezlie Porter, Private Citizen, be entered into the record.
Senator Raggio closed the hearing on S.B. 292.
Senator Raggio opened the hearing on S.B. 534.
Senator Raggio stated this bill had been heard in the committee on May 9, 2001, at which time a number of individuals had appeared before the committee.
SENATE BILL 534: Makes various changes relating to control of air pollution. (BDR 40-794)
Senator Raggio noted Washoe County registered opposition to a portion of the bill in Section 3.
Senator Raggio recalled that one individual referred to S.B. 478 in her concerns. He added there was a request for some deletion.
SENATE BILL 478: Authorizes state department of conservation and natural resources to develop and carry out program to encourage certain persons to use clean-burning fuel in motor vehicles. (BDR 43-137)
Donald O. Williams, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau, stated he was appearing to represent Senator Porter, at the Senator’s request, to present a proposed amendment (Exhibit I). Mr. Williams said the intent of the proposed amendment is to remove the existing provisions that have been identified as having a fiscal impact on the state, except for the regional haze provisions. He explained that was identified as an area in which the state would have to comply with federal regulations. He said the amendment still includes Section 5.
Senator Coffin asked how much the amendment would save. He noted it involves a lot of work, and questioned whether it would be worth it.
Mr. Williams replied that, as the bill is written now, there is approximately $500,000 cost in the first year and approximately $800,000 in the second year. He stated with this amendment the only thing left would be what is included on the sheet that had been handed to the committee (Exhibit J). He indicated the remaining costs are due to the regional haze program, and would be $237,890 in the first year of the biennium and $462,243 in the second year.
Mr. Williams stated Senator Porter wants this to be a proposal that the committee makes a positive decision on, whether or not the committee will provide any funding at all. He stated the other option Senator Porter proposes would take out that Section 5 of the bill so there would be no fiscal impact on the state.
Mr. Williams stated, for the purpose of considering the concerns raised by the Division of Environmental Protection, he and Senator Porter are proposing Option B (Exhibit K), which has the funding for the regional haze program.
Mr. Williams stated that it is proposed that the language of Section 3 of the bill be changed to address the concerns that were raised by the Washoe County air quality officials. He read the proposed language for Section 3 included on page 1 of Exhibit K:
The department shall coordinate with local air pollution control boards to:
1. Review the financial condition of each program for the control of air pollution and determine the present and future financial needs of the program; and
2. Recommend legislation relating to providing money for programs for the control of air pollution to the legislature.
He stated he had met with the official from that agency and there was agreement. He said the Clark County health district officials also agree to that language.
Senator Raggio noted Section 4 is to be deleted. Mr. Williams stated eliminating Section 4 would be the cost-saving measure, except for Section 5, which remains in the bill.
Mr. Williams read the amended language for Section 6, which also appears on page 1 of Exhibit K: “submitted to the department and the legislature on or before November 30 of each even-numbered year.
Mr. Williams stated deleting subsection 2 in Section 9 has some fiscal implications resulting in cost savings.
Mr. Williams read item 9 on page 2 of Exhibit K, relating to Section 10 of S.B. 534. He pointed out it was suggested by local air quality agencies and the state, so there would be a public perception that there is a program in place. He noted the original bill included language that there would be a program developed and implemented, but the implementation language had been removed. He said there was a concern that the way it read would give the public perception that the money already exists for those programs unless there was some clause included about recommending legislation to provide money.
Mr. Williams stated Section 11 would be revised on lines 3 and 7, and would include language proposed by Neal Laxalt on clean-burning fuels. He stated Senator Porter agreed to include that language in this bill if the committee agrees to it. He said this would conform to the language in S.B. 478, which has already been processed. He read the language in Item 10 on page 2 of Exhibit K.
Mr. Williams stated the Department of Business and Industry did not have a representative at the hearing. He indicated he had contacted the administrator of the Nevada State Energy Office, which is the entity within the Department of Business and Industry that would be involved in this. He stated the administrator had no problem with, and supported, this language in the bill.
Senator Raggio noted if the amendment is adopted the existing Section 5 would be renumbered 4. He asked why there is such a fiscal impact. He noted that it still requires 3 positions.
Mr. Williams said that was correct.
Jolaine Johnson, Deputy Administrator, Air, Mining and Water Programs, Division of Environmental Protection, State Department of Conservation and Natural Resources, added the division worked closely with Mr. Williams and Senator Porter on these amendments, and the division supports these amendments. She stated Section 5 continues to have a fiscal impact in order for the division to carry out those provisions, including 3 staff and appropriate support, finances, and contracts.
Senator Raggio asked what the impact on the counties would be.
Mr. Williams replied he had suggested there be another fiscal note. He said the health district and the county involved had been contacted and the amount for the audit was included in the budget for the health district. He stated there will not be a fiscal impact.
Mr. Williams reiterated Senator Porter presented Option B, with Section 5 remaining, because of concerns that were raised by the division. However, he stated if the committee cannot find the money for whatever reason, Senator Porter would like the committee to consider processing the bill without Section 5.
Senator Raggio asked what the result would be of doing that. Mr. Williams said the result would be no fiscal impact on the state.
Senator Raggio asked what would be accomplished by doing that. Mr. Williams replied the intent of the legislation is to increase the role of the state in dealing with local agencies, and there would still be provisions in the bill requiring an audit. He noted the Division of Environmental Protection has indicated it will have to do this in any case to comply with federal regulations. He stated Senator Porter would “hate to lose the bill.”
Senator Raggio asked whether there are federal mandates that the state is attempting to comply with.
Ms. Johnson replied there is a federal mandate that the regional haze issues be addressed and there are some complicated timelines involved with that. She stated there has to be a state plan of implementation in place by the end of 2003.
Senator Raggio asked for clarification that it must be a state implementation plan. Ms. Johnson replied that is correct. Senator Raggio asked whether this is mandated by the United States Environmental Protection Agency (USEPA). Ms. Johnson responded that it is.
Senator Raggio asked whether there is some proposal to partner with other states on this. Ms. Johnson replied her division is in negotiations with Idaho and Oregon to form a partnership that would allow additional time. Senator Raggio suggested that would extend the deadline to 2006. Ms. Johnson said that is correct.
Senator Raggio asked whether the division had already proposed to partner with other states. Ms. Johnson replied that was the division’s original proposal. Senator Raggio asked what is happening on that proposal.
Ms. Johnson replied it seems to be falling apart. She pointed out those states seem not to have the resources to be able to join with Nevada in the partnerships are necessary to meet the USEPA’s approval for an extension on the time.
Senator Raggio concluded a plan must be reached if the state does not partner with another state. He asked whether S.B. 534 would facilitate the development of such a plan even if the funding were not included in the bill.
Mr. Johnson stated the division is hoping for the funding through this bill. She stated if Section 5 is removed, the division believes it has the authority to go ahead and do the job anyway.
Senator Coffin expressed concern that the state not play a major role in this matter. He asked whether the counties would be asked to pay for this if the state does not provide the funding. He pointed out there are major haze problems in existence already. He said the state can watch the counties, but added the counties are rather liberal in their zoning for development. He said many of the problems relate to particulate matter in the air, which hurts the old and the young. He stated someone must “watch the counties on the public’s behalf.” He stated that while he was flying in the other day he saw a great extent of undeveloped land that will create more dust in Las Vegas. He stressed the necessity to “do this right.”
Senator Coffin stated that Senator Porter, on behalf of Clark County, is doing the right thing and he expressed concern that the bill would be “gutted by making it cheaper.” He suggested the state “bite the bullet” and find the money because there is so much at stake.
Senator Coffin stated he had sat on a policy committee with Senator Jacobsen that heard the initial testimony.
Senator Raggio noted the amounts would be $237,000 in the first year of the biennium and $462,000 in the second year. He asked whether $150,000 was designated for contracting out on this.
Ms. Johnson replied that was correct. She said the other substantial difference is that the staff would not be hired until October in the first year.
Senator Raggio asked whether it takes a $150,000 contract to do this plan. Ms. Johnson replied there is one element of the requirements that demand contract services.
Senator Raggio asked what the feelings of the members from Clark County were, noting they will be primarily affected by this. Senator Coffin pointed out Douglas County is also growing rapidly and becoming crowded, and the Truckee Meadows has a lot of haze.
Senator Raggio concluded the committee would not act on the bill at the moment. He said the staff would be given some time to review the bill to see what could be done about funding.
Senator Coffin stated he is aware of haze problems in southern Nevada caused by California. He asked whether thought has been given to aligning with California rather than Idaho and Utah, since California causes Nevada the most trouble. He suggested Nevada could sue California because a lot of the problems come from California.
Ms. Johnson explained regional haze is a program that addresses haze in Class 1 areas such as the Grand Canyon and Zion Park. She said in Nevada there is one Class 1 area, the Jarbridge Wilderness. She stated these programs will not address urban haze.
Senator Raggio repeated that the staff would come back with some suggestions on this bill.
Senator Raggio closed the hearing on S.B. 534.
ASSEMBLY BILL 4: Allows money in fund for new construction of facilities for prison industries to be used to expand existing industries. (BDR 16-680)
Senator Raggio stated at some point the advisory board on prison industries was deleted. He expressed his great concern about that, and his feeling the committee should be retained. Senator Raggio stated the advisory committee should be restored if the committee has no objection. He pointed out some good people have been working on the advisory committee for a long time. He stated Mr. Skolnik indicated the advisory committee was very helpful.
SENATOR RAWSON MOVED TO AMEND A.B. 4 BY RETAINING THE ADVISORY COMMITTEE ON PRISON INDUSTRIES AND DO PASS AS AMENDED.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
ASSEMBLY BILL 267: Provides for creation of statue of Sarah Winnemucca for placement in National Statuary Hall Collection in United States Capitol. (BDR S‑695)
Senator Raggio stated the first reprint of the bill was heard in the committee on May 17, 2001.
SENATOR NEAL MOVED TO DO PASS A.B. 267.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
ASSEMBLY BILL 431: Requires public employees’ retirement board to conduct study regarding lump-sum optional retirement programs. (BDR S-985)
Senator Raggio noted the bill had already been discussed in this meeting.
SENATOR NEAL MOVED TO DO PASS A.B. 431.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
ASSEMBLY BILL 555: Makes various changes to provisions governing public employees’ retirement. (BDR 23-547)
Senator Raggio stated the committee heard this bill on May 9, 2001. He pointed out this is the first reprint of the bill.
Senator Raggio recalled there was some concern in this committee about the added provision on page 2 that a participating public employer shall not refuse to reemploy a retired employee who is eligible for reemployment pursuant to the section solely on the basis of the date of his retirement. He said that was prompted by a memo that was misinterpreted and suggested that language was not necessary. He stated he believed the rest of the bill is acceptable.
SENATOR NEAL MOVED TO AMEND A.B. 555 BY DELETING SUBSECTION 5 OF SECTION 1 AND DO PASS AS AMENDED.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 109: Makes appropriations relating to education. (BDR S-838)
Senator Raggio read the introductory paragraph and the two provisions of the amendment on page 1 of a memo on S.B. 109 (Exhibit L).
Mr. Ghiggeri pointed out that pages 2 and 3 of Exhibit L is a marked up copy of S.B. 109, which displays what the amendment would do. He said it would delete Section 1, which provided for the public relations portion of the legislation; increase the appropriation on page 2 of the bill, which was previously Section 2, from $276,217 to $304,127; and add language on line 19 that would provide for track educational expenditures and revenues to individual schools.
Senator Raggio recalled there had been a question on the Insight program. He asked whether that was in Section 2.
Mr. Ghiggeri replied that portion is Section 2.
Senator Raggio stated that is the section the committee authorized previously. He recalled that Douglas C. Thunder was not in favor of the changes, but Senator Raggio said he believes it is a good program and ought to be continued.
SENATOR NEAL MOVED TO AMEND AND DO PASS AS AMENDED, BY DELETING THE FUNDING IN SECTION 1, BUT PROVIDING THE AUGMENTATION OF THE APPROPRIATION THAT WAS REQUIRED FOR INSIGHT, AND ADDING THE LANGUAGE TO REQUIRE THE FINANCIAL ANALYSIS MODEL TRACKS REVENUE AND EXPENDITURES AS INDICATED ON THE MEMORANDUM.
SENATOR MATHEWS SECONDED THE MOTION.
Senator Coffin stated there was one part of Section 1 he thought was good. He said it had to do with research that includes surveying the public to determine knowledge and opinion of standards of content and performance. He said this would not be public relations, but rather the gathering of information to make things work better. He suggested that by saving a bit of money the committee may be depriving itself of valuable information.
Senator Raggio stated that would be nice, but if the committee is trying to adjust revenues it can probably live without it at the moment.
Senator Coffin expressed his curiosity about whether there are other ways of obtaining this information. He stated he has no objection to taking the money out, but suggested there is no other way of ascertaining this information.
Senator Rawson stated he understands this to be improved public relations concerning the standards of content and performance. He pointed out each of the school boards has a budget for that, and they have community relations personnel.
Senator Coffin reiterated he agrees with getting rid of the public relations aspect of the section. However, he said Section 1 contains language indicating “shall spend no more than $50,000” to survey and research and prove the usefulness of some of the programs that have been launched and on which the Federal government is spending millions.
Senator Raggio suggested the language is somewhat illusive. He referred to the phrase:
surveying the public to determine the current public knowledge and opinion of the standards of conduct and performance, surveying pupils regarding their knowledge and opinion of the standards of content and performance, and determining practices for communicating it.
Senator Raggio suggested this is something that should necessarily be done in any case. He said he does not see why it takes $50,000 to understand what the students’ understanding of this is.
THE MOTION CARRIED. (SENATOR COFFIN VOTED NO.) (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 137: Increases number of district judges in second judicial district. (BDR 1-521)
Senator Raggio stated the committee heard the bill on March 19, 2001. He said whatever the committee does will affect the appropriation.
Mr. Ghiggeri stated S.B. 184 increases the salary of district court judges from $100,000 to $130,000 per year.
SENATE BILL 184: Adjusts prospective salary of supreme court justices and district court judges. (BDR 1-517)
Mr. Ghiggeri stated if S.B. 184 is approved, the appropriation should be adjusted to $81,588, and the effective date of the appropriation should be January 1, 2003.
Senator Raggio suggested the committee look at S.B. 184 first. He pointed out the committee heard the bill on several occasions, the first time being March 19, 2001, when Judge Porter presented the bill. He stated it was heard again on May 14 at which time the committee heard from representatives of the bar who were proposing amendments that would ensure salaries stayed even, and there would not be a gap between those whose terms expired and their successors.
Senator Raggio stated that on the first issue, the salaries proposed in the bill were rather arbitrary, going from the base salary existing for Supreme Court justices, which is $106,000, to $150,000. He added in Section 2 the salaries were proposed for district court judges to go to $130,000. He stated he had asked the staff to base this on a cost of living factor.
Mr. Ghiggeri distributed to the members of committee a chart showing the Supreme Court Justices’ and District Judge’s Salary History (Exhibit M). He explained pay raises recommended for the district court judges provide for an average of about a 5 percent pay raise per year since the last increase. He stated the alternative that is listed under the Supreme Court justices’ salaries at $140,000 per year would provide a similar increase of approximately 5 percent per year.
Senator Raggio pointed out the chart shows the justices’ salaries are presently $107,600 and the district judges’ salaries are $100,000. He explained if a 5 percent factor is applied, it would raise the justices to $140,000 rather than $150,000, and would raise district court salaries to $130,000. He added judges get longevity pay as well, and that would not be affected by this bill.
Senator Coffin said that “you can’t pay your judges enough.” He stated people come out of law school with the best of them getting 6-figure salaries now, and he pointed out Nevada is competing with firms all over the country for the best. He suggested that for the state to pay less than the $150,000 is a mistake. He asserted the state should pay for the best to keep the best, and to ensure fairness.
Senator Raggio stated that would create a $20,000 differential in the bill between existing salaries and proposed salaries. He asked whether Senator Coffin was suggesting that it should be left at $150,000 as is presently in the bill.
Senator Coffin stated he is prepared to support the bill as it is written.
Senator Raggio expressed confidence that everyone on the committee agrees that judges and justices need a salary increase.
Senator Coffin added he feels they need to be paid equitably, and all judges should be paid the same.
Senator Raggio asked for the committee’s thoughts on whether the bill should be left as it is at $150,000 for justices and $130,000 for district judges or whether it should be based on a 5 percent increase, which would raise the justices but only to $140,000.
SENATOR NEAL MOVED TO AMEND AND DO PASS AS AMENDED S.B. 184, RAISING THE JUSTICES’ SALARIES TO $140,000 AND THE DISTRICT JUDGES TO $130,000
SENATOR COFFIN SECONDED THE MOTION.
Senator Raggio asked the staff to calculate the appropriation that would be required.
Mr. Ghiggeri stated that, to process this legislation and equalize the salaries in the amendment as proposed with the reduction to $140,000 for the justices, an appropriation of $153,688 would have to be added to this bill from the General Fund.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 137: Increases number of district judges in second judicial district. (BDR 1-521)
Senator Raggio stated this bill increases the number of judges in the second judicial district by adding one, and reassigns judges in the family court to increase it from three to four. He indicated the committee would amend the bill to align the funding for the increases. He said this would require an increased appropriation, and the effective date should be revised to reflect January 1, 2003.
SENATOR NEAL MOVED TO AMEND S.B. 137 TO ALIGN FUNDING FOR INCREASES, AND DO PASS AS AMENDED.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 139: Revise manner in which administrative assessments are distributed. (BDR 14-515)
Senator Raggio stated the committee heard the bill on March 19, 2001. He recalled it deals with the manner in which administrative assessments are distributed. He said this is the bill that related to the 51 percent of court assessments for judicial purposes.
Senator Neal explained it was felt it should be changed because the assessment as it presently exists would amount to a tax.
Senator Raggio stated Amendment Number 795 (Exhibit N) resolves the conflict with A.B. 548.
ASSEMBLY BILL 548: Revises provisions governing agencies eligible to receive distribution of proceeds of administrative assessments. (BDR 14-1438)
Mr. Ghiggeri stated the amendment to S.B. 139 would provide for the judicial branch to retain 51 percent of the administrative assessments. However, he said language in the amendment would provide that, to the extent that collections from the administrative assessments exceed the authorization for the Supreme Court budget, the amount of the General Fund support provided must be reserved in a like amount. As an example, he suggested the collections for administrative assessments may exceed the authorized level by $500,000. He said a similar amount is funded via the General Fund and must be retained for reversion by the Supreme Court.
Mr. Ghiggeri said the budget, as approved by the Supreme Court for FY 2002 and FY 2003, is $4.2 million from the General Fund from FY 2002, and $4.3 million in FY 2003. He said administrative assessments have been authorized in an approximate amount of $4.1 million and $4.4 million per year for the Supreme Court.
Mr. Ghiggeri stated the amendment to S.B. 139 is consistent with language that currently exists in the Authorizations Act:
where the operation of an office, department, board, agency, commission, institution, or program is financed by an appropriation or appropriations from the state General Fund as well as by money received from other sources, the portion provided by appropriation from the state General Fund must be decreased to the extent that receipts of money from other sources is exceeded, but such decrease must not jeopardize the receipts of such money as received from other sources.
Mr. Ghiggeri summarized the amendment indicating it would enable the courts to retain 51 percent, but the state would get back anything in excess that is collected from the General Fund appropriation.
Senator Raggio stated that is the only way to control this. He said it gives the courts the assurance they will receive their 51 percent.
SENATOR NEAL MOVED TO AMEND S.B. 139, BY ADOPTING AMENDMENT NUMBER 795 AND TO DO PASS AS AMENDED.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 143: Makes appropriations to judicial districts in Clark and Washoe counties for continuation of programs of treatment for abuse of alcohol or controlled substances. (BDR S-178)
Senator Raggio stated that the committee had heard this bill on April 11, 2001. He asked how this bill relates to S.B. 430.
SENATE BILL 430: Makes appropriation to Administrator of the Courts of Eighth Judicial District for continuation of its programs of treatment for abuse of alcohol or drugs. (BDR S-1353)
Mr. Ghiggeri stated that the Governor has recommended S.B. 429 and S.B. 430.
SENATE BILL 429: Makes appropriation to Administrator of the Courts of Second Judicial District for continuation of its programs of treatment for abuse of alcohol or drugs. (BDR S-1352)
Mr. Ghiggeri said S.B. 429 provides an appropriation of $330,000 to the second judicial district and S.B. 430 provides an appropriation of $700,000 to the eighth judicial district. He added that S.B. 143 provides $350,000 to the second judicial district and $700,000 to the eighth judicial district.
Senator Raggio noted that if the committee processes S.B. 143, the other two bills will not be needed. Mr. Ghiggeri stated that is correct.
Senator Raggio asked whether S.B. 143 has the additional appropriation that was recommended. Mr. Ghiggeri replied it has the additional $20,000 that was recommended by the second judicial district.
Senator Raggio suggested it would be appropriate to pass S.B. 143; and that S.B. 429 and S.B. 430 would not be needed.
SENATOR RAWSON MOVED TO DO PASS S.B. 143.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
SENATOR MATHEWS MOVED TO INDEFINITELY POSTPONE S.B. 429 AND S.B. 430.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 448: Makes appropriation to State Department of Conservation and Natural Resources for improvement projects at state parks. (BDR S-1392)
Senator Raggio stated the committee heard the bill on two occasions, on April 4, 2001, and May 14, 2001. He noted the committee had voted to amend and do pass S.B. 448 on May 14, 2001. He pointed out it includes the appropriation from the General Fund to the Department of Conservation and Natural Resources for park improvements in state parks. He stated there is an amendment, Number 760 (Exhibit O), regarding this bill. He asked whether the amendment resolves a conflict.
Mr. Ghiggeri replied the committee voted last week to amend the legislation and substitute $1 million in General Fund appropriation with $1 million from room tax. However, he stated the Division of State Parks requested an additional amendment to the legislation for previously funded projects that would extend the reversion dates on those projects.
Steve Weaver, Chief of Planning and Development, Division of State Parks, Department of Conservation and Natural Resources, recalled this committee has, in years past, approved carrying forward funds that were left over from projects that were completed, whose scope was reduced, or that were not completed by the end of the biennium. He said the last situation is most often the case.
Mr. Weaver stated that in this particular amendment the division is requesting to carry over a total of $110,867. He said the bulk of this amount, or $86,380, is required for the Spooner Lake parking area rehabilitation and expansion. He explained this project was originally included in the 1997 legislation, and the division had intended to utilize an 80 percent federal grant under the Scenic Byways program. He stated the division tried 3 consecutive years to obtain those funds, but noted the decisions on the program are made in Washington, and the state has very little say in how the funds are allocated. He said the division was not successful.
Mr. Weaver stated last year the land and water conservation fund, that had not been funded for a number of years, had its funding reinstated and was actually more than doubled this year. He stated the has already applied for a $275,000 land and water grant toward the $560,000 project. He said the $86,000 the division is requesting to be carried over will be used as a match along with some Tahoe license plate funds towards completion of this $560,000 project.
Senator Raggio asked whether that was included in Amendment No. 760. Mr. Weaver replied it was included.
Senator Raggio noted the $1 million reduction is indicated on page 4 of the amendment, on the second line from the bottom. He asked whether the staff has checked this amendment. Mr. Ghiggeri replied that it had.
Senator Raggio noted this is a new and additional amendment to S.B. 448.
SENATOR RAWSON MOVED TO AMEND S.B. 448 WITH AMENDMENT NUMBER 760 IN LIEU OF THE PREVIOUS ACTION, AND DO PASS AS AMENDED.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Senator Jacobsen stated he had been to the Dangberg property and noted it is deteriorating. He said if “something does not happen there shortly, we better forget it.”
Mr. Weaver expressed his full agreement with Senator Jacobsen. He said he believes that it may well be the intent of the owners to let it deteriorate to a point where the state will not want the property.
Senator Jacobsen asked whether there is anything the committee could do to direct the court to take some action. Senator Raggio stated he does not know what the status of the case is. Mr. Weaver stated that all that is known is that “it is in limbo.” He pointed out it has been tied up in court for over 2 years.
Senator Jacobsen noted the property is valuable. He noted it is ranch property under dispute between park land, cattle, Bently Nevada, and the courts. He noted the bunkhouse has no windows left in it.
Senator Raggio asked what it is being used for. Senator Jacobsen replied it currently is not being used for anything. He said it was going to be a state park.
Senator Raggio asked whether it was donated to the state. Senator Jacobsen replied it was part of an estate. He said after the three girls died there were some ownership questions. He added that in the meantime the property changed hands from the Dangberg family to Bently Nevada Corporation.
Senator Raggio asked what the state’s situation is at the present time on this. Senator Jacobsen replied all he can find out is that it is held up in court. Mr. Weaver stated the division is still waiting for the court to decide the disposition of the property.
Senator Raggio asked what the legal issue is. Mr. Weaver responded it is whether the state has a valid claim towards the property.
Senator Raggio asked what the claim is based on. Mr. Weaver replied transfer of the property was not technically based on a will, but on an agreement of some kind with respect to the property.
Senator Raggio asked what the state was required to do. Mr. Weaver replied that according to that particular agreement dated in 1977 it was stipulated that the core of the home ranch would be offered to the county for a historic park. He explained the county backed off, and that is when the state stepped in. He added the county originally expressed its dissatisfaction with the state being involved. He said the county wanted to handle the property, and the state agreed. Then, he pointed out, the county signed an agreement to dispose of the property and the state had no more say in the matter.
Senator Raggio asked whether the state was required to pay an appraised value. Mr. Weaver replied the state was not required to do so. He explained that is part of the court debate, whether the state will end up having to pay something, or whether the state has first right to the property. He stated this is a complex legal issue.
Senator Jacobsen asked whether it would be proper to ask the court to come and give the committee an update. Senator Raggio pointed out no judge is going to come and explain something that is in litigation.
BUDGET CLOSINGS – DIVISION OF HEALTH CARE FINANCING AND POLICY
HR, Health Care Financing & Policy – Budget Page HCF&P-1 (Volume 2)
Budget Account 101-3158
E-275 Working Environment & Wage – Page HCF&P-4
E-278 Working Environment & Wage – Page HCF&P-4
Steven J. Abba, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated there are two basic decision units in this budget, E‑275 and E-278, outlined on pages 7 and 8 of the Subcommittee on Human Resources/K-12 Closing Report for the Division of Health Care Financing and Policy (Exhibit P). He said those two decision units include a total of 9 new positions.
Mr. Abba stated that the division has traded in a number of positions in the Medicaid budget to help fund those 9 positions. He said the positions traded in from the Medicaid budget were primarily nurse positions.
Mr. Abba pointed out the subcommittee approved 8 of the 9 new positions. He said that in decision unit E-275 there are 3 Administrative Service Officers that the subcommittee approved.
Mr. Abba stated that in decision unit E-278 the subcommittee approved 3 Management Analysts, 1 Personnel Technician, and 1 Accounting Specialist. He said the subcommittee did not approve 1 Management Analyst position.
Mr. Abba stated the subcommittee also approved merging the health costs review budget into this budget, and it will be separately tracked by the expenditure category and by funding source. He said that appears to be reasonable.
SENATOR RAWSON MOVED TO CLOSE ACCOUNT 101-3158 AND TO APPROVE DECISION UNITS E‑275 AND E‑278 AS RECOMMENDED BY THE SUBCOMMITTEE.
SENATOR MATHEWS SECONDED THE MOTION.
Senator Neal asked how nurses can be traded in.
Mr. Abba replied the division is proposing to contract out a number of services that Medicaid staff, primarily nurses, used to perform. He explained they were doing prior authorization requests, preadmission screening, and level of care determinations. He said the division is going to contract these services out, and has, in some cases, already done that. He stated the division feels the contractor can actually do a better job for them and free up the nursing staff to obtain the type of staff needed to go in the organizational direction that they are hoping to achieve over the next couple of years.
Senator Neal asked how many nurses are affected by this decision. Mr. Abba said there are a total of 13 positions affected, and 11 of them are nursing positions. He said several other positions are filled.
Mr. Abba stated the division has a number of decision units in the Medicaid budget that require nursing staff. He said they are case managers for adult care waivers. He explained a lot of the nurse positions that are being eliminated will be transitioned into existing positions such as these, or to a couple of nurse positions that have been requested for the managed care unit. He said it is not felt that any of the nursing staff in the incumbent positions will be affected by this decision.
Senator Neal asked whether any more nurses will be needed for this program.
Mr. Abba replied there will not be a need for additional nurse positions in the area where the positions are being eliminated. He stated in the area of Medicaid where they are expanding the waivers there will be a need for new nursing staff because they are the case managers.
Senator Raggio asked whether this is the account over which there was a long discussion regarding the new concept of value purchasing. Mr. Abba replied that was correct.
Senator Raggio suggested the committee needs to be aware of what that is about. He asked what this change is about.
Mr. Abba stated that the 1997 Legislature approved money to conduct a business process reengineering (BPR) study with the division, and one of the outcomes of the BPR study was a decision to move the division along the lines of what is called value purchasing, in addition to recommending that the division be funded for a Medicaid management information system.
Mr. Abba stated the division proposes to look at alternative ways of doing business that it is currently handling internally. He said this involves considering contracting out services and looking at managed care organizations to take on more responsibilities.
Senator Raggio asked how that would affect quality control. He recalled that there had been some discussion about changing to contracted services.
Mr. Abba stated there are two things that have to go hand in hand with the direction the division is heading. He said, if it is going to start contracting out, the division should have the fiscal staff to establish and monitor the contracts the quality control staff should be able to monitor the quality of the services that are going to be provided.
Senator Raggio asked why it is called value purchasing.
Mr. Abba said it is a term that should be interpreted as “get the most bang out of the buck.” He said certain types of services are going to be grouped and requests for proposals (RFP) will go out. Then, he said, the division will consider the value of the purchase in terms of the “dollars and cents,” and look at the value of the service in terms of the quality to be received from the contractor.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
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HR, HCF&P, Nevada Medicaid, Title XIX – Budget Page HCF&P-8
Budget Account 101-3243
Mr. Abba stated this account was affected by the subcommittee’s decision to incorporate the higher federal participation rate that is anticipated for the second year of the biennium. He stated it is still “up in the air,” but from all perspectives it looks like the federal match rate will go up.
Senator Raggio pointed out the projections have always been quite accurate. Mr. Abba said that is true. He stated the entity from which the division gets its information is used nationwide, and it provides very accurate information.
Mr. Abba read the summary for this account from page 2 of Exhibit P.
Senator Raggio asked whether these recommendations were made because of the potential savings to the other part of the account.
Mr. Abba stated the waiver and the new slots were recommended in The Executive Budget. He said there is not a true savings.
Mr. Abba continued reading the summary of this budget on pages 3 and 4 of Exhibit P.
Senator Neal asked what the 13 new positions mentioned were for.
Mr. Abba replied 8 of the new positions would be in the new administrative budget that was just closed, and 5 of the positions were being reclassified and reflected as new positions. He said 2 of the positions would be in the managed care section, and 1 would be a higher level functioning social worker.
Senator Neal asked whether this is a situation where the “person was not needed but the dollars were.”
Mr. Abba replied it was more of a situation where the nursing staff was not needed but there was a need for a person to perform a different type of job.
Mr. Abba stated there has been a lot of discussion since the subcommittee closed the Medicaid budget about changing the implementation date of the rate increases that were approved. He said the subcommittee approved the rate structure that the division preferred based upon the results of the rate study that was recently finished by its consultant.
Mr. Abba handed out a document reflecting the different rate scenarios the subcommittee reviewed. (Exhibit Q). He said the second table on the page displays the rate increases proposed by the Governor and the rate increases called the “division preference” based on the consultant’s study.
Mr. Abba referred again to the first table in Exhibit Q. He stated the bold figures indicate the rate structure the subcommittee approved with the implementation dates of October 1, 2001, and October 1, 2002, at a cost of approximately $76.9 million. He noted there was some discussion the day of the subcommittee meeting about changing the implementation date the second year of the biennium to a July date instead of an October date. He informed the committee that the Assembly changed the implementation dates to October 1, 2001, and July 1, 2002. He stated that would increase the discretionary rates to approximately $81.7 million.
Mr. Abba stated the primary reason for this change came about as the result of a discussion regarding changing the rate and what impact the delay would have on the long-term care industry. He explained that the first chart in Exhibit Q shows what the difference would be in the amount of rate increase if the start date were moved from October 1, 2002, to July 1, 2002, and how it would affect the long-term care industry.
Mr. Abba noted in the first scenario of the October-October dates, the long-term care industry would receive approximately $32.4 million over the biennium.
Senator Raggio asked for confirmation that the figures in bold were those recommended by the division.
Mr. Abba replied the division requested the implementation dates be October 1, 2001, and July 1, 2002. He pointed out those figures were at the bottom of the first chart. He said the subcommittee approved October of each year, but there has been a request to consider amending the implementation date in the second year.
Mr. Abba stated the long-term care industry would realize about a $6 million increase in overall reimbursement by changing the rate increase implementation date. He explained approximately half that amount would be federal funding and the rest state and county funding.
Senator Raggio asked who proposed the change following the joint subcommittee’s actions. Mr. Abba replied it was the Department of Administration and the Division of Health Care Financing and Policy.
Mr. Hataway stated the Department of Administration asked the staff to look at the October 1, 2001, and July 1, 2002, alternative. He said the department had originally proposed July 1, 2001, and July 1, 2002, and did not have a particular problem moving the first year to October 1. However, he stated the department definitely wants reconsideration regarding July 1, 2002.
Senator Raggio pointed out that would add $5 million from what was originally proposed.
Mr. Hataway agreed, but pointed out his department submitted an amendment based on the updated rate findings of the consultant based upon the “Division Preferred 7/1-7/1” column in the chart in the overall balancing of the budget. He said when the committee closed with 10/1-10/1 dates, the department asked for July 1 as a reasonable compromise for the second year.
E-350 Service at Level Closest to People – Page HCF&P-17
Mr. Abba indicated there was another change requested. He pointed out that in decision unit E-350 the funding for the rate increases are federal funds and state funds. He said when the funding for the rate increases was reinvestigated, it was discovered the county portion of the rate increase had been left out.
Mr. Abba pointed out there is a county match program with the Medicaid program, and the long-term care part of the rate increases is the most significant part of the overall cost for rate increases. He said the division was asked to review the issue again, and it concurred that the county will have to pay for part of the rate increases. He pointed out that this would happen regardless of the rate structure.
Mr. Abba said that consideration has resulted in an over budgeting of state funds in that particular decision unit in the amount of $838,761 in FY 2002, and almost $1.8 million in FY 2003. He reiterated that whatever rate increases are approved, if long-term care is one of the providers that receives a rate increase, the counties would have to pick up a portion of the rate increase because they participate in paying long-term care costs for the Medicaid program.
Senator Raggio asked what should be done with the budget if that is the case. Mr. Abba replied the state’s share of the cost for those rate increases would be reduced by the amount of increase in the county’s share. He said that would be a General Fund savings of $838,000 in the first year and $1.8 million in the second year. He pointed out this should have been included originally, and now state funds are over budgeted.
Senator Raggio asked Mr. Hataway whether he agreed with that. Mr. Hataway replied that he did.
SENATOR RAWSON MOVED TO CLOSE BUDGET 101-3243 WITH THE RECOMMENDATIONS OF THE SUBCOMMITTEE, AND FOLLOWING THE DIVISION PREFERENCE OF OCTOBER 1, 2001, AND JULY 1, 2002, FOR THE RATE INCREASES.
Mr. Abba added the division then checked to see what the impact of the federal match rate increase would be in the second year of the biennium. He said when the division reaches $7 million, it will also be allocated to the state savings against the Intergovernmental Transfer (IGT) revenue that is transferred to the Medicaid budget to offset Medicaid costs from the IGT. He said that revenue is already included in the Medicaid budget, but in treating it in that manner the IGT funding just sits there and would revert to the reserve category in the IGT budget.
Mr. Abba stated the committee has some options to consider. He said it could leave the funding there in its entirety, which is about $1.6 million. He said this would add to the state General Fund savings over and above the $7 million.
However, Mr. Abba suggested, the committee could do what the division proposed and revert all the money to the reserve, which would increase the reserve from $13.2 million to approximately $14.8 million. He added there has been some concern about the level of the IGT reserve because a lot of it is being used to fund Medicaid costs in this biennium.
Mr. Abba added there could be a compromise with a portion of the IGT money going to reserve and a portion used for a reduction in the General Fund.
Senator Raggio asked for the total amount of this consideration. Mr. Abba stated the total amount is $1,647,000.
Senator Raggio asked about reducing the General Fund contribution by $1 million and leaving $640,000 in the reserve. Mr. Abba replied there would be a savings of $1 million, which would allow $640,000 to go back into the reserve. This would increase the reserve to approximately $13.8 million.
Senator Rawson asked what the Assembly had done on this issue. Mr. Abba replied the Assembly saved half the $1.6 million in the General Fund and moved the rest into the IGT reserve, which would give a reserve of about $14 million.
SENATOR RAWSON MOVED TO CLOSE BUDGET 101-3243 BY ADOPTING THE JOINT SUBCOMMITTEE REPORT; CHANGING THE RATE INCREASES TO BECOME EFFECTIVE ON OCTOBER 1, 2001 AND JULY 1, 2002; AND SPREADING THE AMOUNT EQUALLY BETWEEN THE RESERVE AND GENERAL FUND REDUCTION.
SENATOR JACOBSEN SECONDED THE MOTION.
Senator Neal asked whether the federal portion of this funding is Medicaid money.
Mr. Abba replied it is. He explained the Medicaid budget is funded approximately 50 percent federal and 50 percent state, and a portion is funded by the counties.
Senator Neal asked whether the committee removed any medical persons from review of these facilities that will be receiving this money. Mr. Abba responded Medicaid staff will still do reviews.
Senator Neal stressed he was referring not to Medicaid staff but to medical personnel such as nurses. Mr. Abba replied there will still be nurse staff reviewing institutions. He added the Bureau of Licensure and Certifications of the Health Division review long-term care facilities and adult group care facilities every year. He stated the Bureau of Licensure and Certifications is the regulatory arm.
Senator Neal asked whether the bureau is equipped with medical personnel. Mr. Abba replied that it operates under a team concept with nursing staff as well as other disciplines as part of its teams.
Senator Neal asked whether the committee has assurance the review with respect to medical personnel will not be affected by the passage of this bill.
Mr. Abba stated Charles Duarte, Medicaid Administrator at the Division of Health Care Financing and Policy, will provide the committee with that assurance. He stated Mr. Duarte’s approach to the organization is reasonable.
Mr. Abba noted Mr. Duarte had assured him that the nursing staff is not needed to handle the prior authorization requests. Mr. Abba explained this will involve such things as approving extra medical visits and extra prescriptions, for which thousands of requests are processed.
Mr. Abba assured the committee the review will still occur, but will be handled by another entity.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
HR, HCF&P, Nevada Check-Up Program – Budget Page HCF&P-24 (Volume 2)
Budget Account 101-3178
Mr. Abba read the summary of this budget on page 4 of Exhibit P. He said the subcommittee recommended sufficient funding to allow caseloads for the Check-Up program to increase to 20,431 enrollees per month for FY 2002 and 23,887 enrollees per month for FY 2003. He said that, similar to Medicaid, the federal match participation rate for the Check-Up program is anticipated to increase, and that will produce a savings of approximately $260,000 in FY 2003. He stated the Letter of Intent referenced in the Medicaid budget, as well as modifications to the capping language will also apply to the Check-Up budget.
SENATOR RAWSON MOVED TO CLOSE BUDGET 101-3178 AS RECOMMENDED BY THE SUBCOMMITTEE.
SENATOR MATHEWS SECONDED THE MOTION.
Senator Neal asked how this relates to the State Children’s Health Insurance Program (SCHIP). Mr. Abba stated this is the state’s version of that program. He explained SCHIP is a Title XIX program at the federal level, and Nevada Check-Up is the state’s version.
Senator Neal asked whether the caseload for this program was being reduced. Mr. Abba replied the caseload was being increased significantly.
Senator Raggio asked what the General Fund appropriation would be for this account.
Mr. Abba replied the account used to be funded with IGT revenues, but because of the shortfall it is now being funded with General Funds.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
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HR, HCF&P, INTERGOVERNMENTAL TRANSFER PROGRAM – Budget Page HCF&P‑30 – Budget Account 101-3157
Mr. Abba read the summary for this budget on pages 4 and 5 of Exhibit P. He stated the subcommittee concurred with the Governor’s recommendations to use approximately $149 million over the upcoming biennium from the IGT budget to help fund Medicaid expenditures. He said the extensive use of the IGT revenues for the current and upcoming biennium will reduce the IGT reserve to approximately $13.2 million at the end of FY 2003. He stated the availability of this revenue source to fund Medicaid expenditures will be significantly reduced for the 2003-05 biennium.
Mr. Abba stated the subcommittee recommended replenishing the institutional care fund at a level of $500,000 for the upcoming biennium. He said the institutional care fund serves as a revenue source to assist financially strapped counties with their portion of Medicaid long-term care costs.
Mr. Abba added the subcommittee’s recommendations will reduce the General Fund appropriation for the Division of Health Care Financing and Policy by $8 million for FY 2002 and $1.9 million for FY 2003 for a net reduction of $10 million over the upcoming biennium.
Senator Raggio asked which counties are still experiencing problems with this budget. Mr. Abba replied Lyon County, Mineral County, and Pershing County are experiencing problems.
Senator Raggio asked why Lyon County keeps having this problem.
Mr. Abba replied Lyon County has indicated they budget amounts for long-term care, and when they get to that expenditure they access this fund. He acknowledged there has been discussion about other available revenues within the county, but Lyon County has chosen to use those revenues elsewhere.
Senator Raggio expressed concern about what would occur if every county arbitrarily said it did not have enough money for this program and had access to this account. He asked what control there is over that situation.
Mr. Abba replied it is controlled by a board of trustees whose members are from the counties, and who are appointed by the Nevada Association of Counties (NACO) and the Governor. He said they oversee their own use of this particular account.
Senator Raggio asked whether all the counties have to participate in this account to maintain the federal match. Mr. Abba replied that is correct.
Senator Raggio expressed his feeling that something is inappropriate about that arrangement.
Mr. Abba stated Lyon County has continuously accessed the fund, but the amount of funding requested is less now than it has been in the past.
Senator Raggio asked how much is in the fund. Mr. Abba stated it has been $300,000 in the past but will be $500,000. He explained there is a carry-forward provision so any unused portion of the money in the fund can be brought forward. He stated it is uncertain at this point how many counties will access it in this fiscal year.
Senator Raggio queried whether the counties are holding the state hostage, suggesting that if the state will not approve a fund like this, the counties will not participate.
Mr. Abba replied if the counties do not participate the state has to fund long-term care up to a certain level of income for eligible clients and the counties have to fund the rest. He explained that would require counties to provide full funding versus half federal and half county funding.
Senator Rawson asked whether the committee, at some time in the future, could look at the relative effort each of the counties put into this program. He suggested this would give the committee some judgment about whether they are trying equally.
Senator Jacobsen asked whether it is true most of the rural hospitals could not survive without long-term care. He surmised this is because their caseloads are not adequate since many people who want special service go to Reno or to Las Vegas. He said rural hospitals are more or less emergency centers, and as such have a difficult time keeping the beds full.
Mr. Abba replied that is correct. He confirmed a lot of the rural hospitals have a hospital wing as well as a wing for long-term care beds. He said he thinks Medicaid makes every effort to pay them as much as possible for the bed-days for long-term care, which helps the rural hospitals continue to operate.
Senator Jacobsen said the Hawthorne facility was doing better when the base was activated and there was a lot of activity in the town. He pointed out people now who have the funds would much rather go to Reno where they think the care is better.
Senator Rawson stated this budget was closed by the subcommittee consistent with Senate action on a bill that used the growth in IGT money to spread around the counties.
Mr. Abba stated all the provisions of S.B. 377 have been incorporated into this budget. He said there will be extra IGT money coming in that will provide an extra state benefit. He said the IGT program will then be opened up for other private hospitals.
SENATE BILL 377: Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low- income patients. (BDR 38-316)
Senator Rawson suggested that Mr. Abba consider what language would be necessary if, for some reason, S.B. 377 does not pass both houses. He stated that, since the committee has “closed consistently,” the committee would want to have the language that would activate this program.
SENATOR RAWSON MOVED TO CLOSE BUDGET 101-3157 ACCORDING TO THE SUBCOMMITTEE RECOMMENDATIONS.
SENATOR JACOBSEN SECONDED THE MOTION.
Senator Neal stated he would have to oppose the motion if it is incorporated the provisions of S.B. 377.
Senator Raggio reiterated that if S.B. 377 does not pass, some language will have to be put into the appropriations bill to activate this program.
Senator Rawson pointed out budgets have been closed in both houses consistent with that bill.
Senator Neal expressed concern that Sunrise Hospital is in the bill with an appropriation of almost $1 million.
THE MOTION CARRIED. (SENATOR NEAL VOTED NO. SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Senator Rawson indicated he would like to be provided with an undated summary of this budget.
Mr. Abba said he would provide that summary.
Mr. Abba stated the actions taken on this date would increase the savings indicated in the chart on page 5 of Exhibit P. He said the reason that in there is not a larger savings in FY 2003 is because of the rate increases. He said the distribution of the rate increases are different based upon the division preference scenario.
There being no further business the meeting adjourned at 11:59 a.m.
RESPECTFULLY SUBMITTED:
Bob Williston,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: