MINUTES OF THE
SENATE Committee on Finance
Seventy-First Session
May 30, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:08 a.m., on Wednesday, May 30, 2001, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator William R. O’Donnell
Senator Joseph M. Neal Jr.
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATORS:
Assemblywoman Christina R. Giunchigliani, Clark County District Number 9
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Georgia J. Rohrs, Program Analyst, Fiscal Analysis Division
Mindy Braun, Education Program Analyst, Fiscal Analysis Division
Debra Petrelli, Committee Secretary
OTHERS PRESENT:
Lorne J. Malkiewich, Director, Legislative Counsel Bureau
Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources
Don Hataway, Deputy Director, Budget Division, Department of Administration
Steven Silva, Senior Law Enforcement Specialist, Carson/Tahoe Region Headquarters, State Parks Division, Department of Conservation and Natural Resources
Pamela Drum-Dupre, Environmental Information Coordinator, Tahoe Regional Planning Agency
Joe Crowley, Lobbyist, University and Community College System of Nevada
Bruce Alder, Deputy Administrator, Division of Child and Family Services, Department of Human Resources
Mark Blomstrom, Deputy Director, Communication and Computing Division, Department of Information Technology
Michael Torvinen, Administrative Services Officer IV, Division of Mental Health and Developmental Services, Department of Human Resources
Sydney H. Wickliffe, C.P.A., Director, Department of Business and Industry
Ron W. Sparks II, Director, Western Interstate Commission for Higher Education, University and Community College System of Nevada
ASSEMBLY BILL (A.B.) 187: Makes appropriation to legislative fund for equipment and software for information systems for Legislative Counsel Bureau and Nevada Legislature. (BDR S-732)
ASSEMBLY BILL 189: Makes appropriation to legislative fund for certain maintenance and rehabilitation projects on legislative building. (BDR S-730)
ASSEMBLY BILL 527: Makes appropriation to Legislative Counsel Bureau for new and replacement equipment and various maintenance projects. (BDR S-1361)
Lorne J. Malkiewich, Director, Legislative Counsel Bureau (LCB), indicated the division approved making cuts in the appropriations in three Assembly Bills Assembly Bill (A.B.) 187, A.B. 189, and A.B. 527. He commented all three bills are in their first reprint because the proposals were adopted by the Assembly Committee on Ways and Means. The first reprint contains a reduced version of the original appropriation in A.B. 187, he added.
Mr. Malkiewich stated A.B. 187 makes an appropriation to the legislative fund for its Information Systems (IS) computer software and hardware in the interim. He said the amount was reduced from $760,000 to $700,000. He indicated the initial amount was based on proposals from the LCB’s information technology subcommittee. He said IS hopes, with the reductions, to be able to carry out the projects proposed by the subcommittee by realizing savings either from declining costs of technology or by project work being done in‑house.
Mr. Malkiewich pointed out A.B. 189 is the reduced version of the original appropriation in the bill. He added $102,040 was cut from the appropriation in A.B. 189 by deleting the project that changes the heating, ventilating, and air conditioning (HVAC) controls in the older section of the legislative building. This will cut the appropriation down to $715,700, he added. He said the HVAC works fine in the new section and is controlled by one central computer. He pointed out this appropriation cut will not allow the new HVAC controls to be centrally located, but rather they will be controlled in each office.
Mr. Malkiewich said the Legislative Commission’s budget review committee consulted with him during the interim, and together they came up with a list of proposals. He noted the list was later cut back. He said the Assembly also cut a project.
Mr. Malkiewich said this version of A.B. 527 reduces the original appropriation. He explained it contains decision units E-700, E-720, and E-730 enhancements of the LCB budget that were put into a “one-shot” so they could be paid out of current Fiscal Year revenues.
Mr. Malkiewich remarked A.B. 527 is basically the consequences of the reductions made in closing the LCB budget. He pointed out that reductions made when the LCB budget was closed are carried forward in this bill. He stated this is why the bill has been reduced to a $747,823 appropriation. He said various projects eliminated from it include a sweeper for the garage and computer equipment. He added this reflects the final budget of the LCB.
ASSEMBLY BILL (A.B.) 507: Makes appropriation to State Department of Conservation and Natural Resources for radio connection between Nevada State Park System and Department of Motor Vehicles and Public Safety. (BDR S-1393)
Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources, said the purpose of A.B. 507 is to provide radio equipment for the field staff in the state park system, so the staff can be tied into the Nevada Highway Patrol (NHP) dispatch system. Currently, he added, the park system has a very unreliable “hit and miss” dispatch service to various agencies. He remarked the biggest problem is the lack of tracking. He explained when state park peace officers call in for license check requests, or any requests, no one tracks that particular officer, so if he were in trouble no one would know.
Mr. Weaver said in looking at all the alternatives the department determined tying in with the NHP system would be its best alternative by far.
Senator Rawson asked whether Highway Fund money could be used for this purpose.
Don Hataway, Deputy Director, Budget Division, Department of Administration, responded the General Fund would be most appropriate for funding the project, because the Division of State Parks is a General Funded agency. He said that is how the funding streams are normally tied together, although the Budget Division would not be adverse to State Highway Funds, but the General Fund would be more appropriate.
Steven Silva, Senior Law Enforcement Specialist, Carson/Tahoe Region Headquarters, State Parks Division, Department of Conservation and Natural Resources, stated he was not involved in the selection of funding sources. He added he would like to reinforce what Mr. Weaver had said. He explained the Division works well with all the counties around the state, but tracking an officer and knowing whether an officer is clear to contact is vitally important. He commented joining the Department of Motor Vehicles and Public Safety’s system will give the parks division the consistency it needs everywhere rangers are assigned.
Senator Jacobsen asked whether the dispatch system would cover the entire state. Mr. Silva replied that it will. He explained the system will be “trunked” in the areas that NHP is “trunking,” and that will join the division to NHP’s conventional system in rural counties.
ASSEMBLY BILL 511: Makes appropriation to Tahoe Regional Planning Agency for threshold research. (BDR S-1398)
Senator Raggio commented this is the first reprint of A.B. 511 and the appropriation amount has been reduced from $400,000 to $200,000.
Pamela Drum-Dupre, Environmental Information Coordinator, Tahoe Regional Planning Agency (TRPA), stated the other $200,000 is in the TRPA budget and will be obtained from bond interest income. Senator Raggio asked what the appropriation is for. Ms. Drum-Dupre replied it would be used for threshold studies directly related to the TRPA’s nine threshold standards. She said the existing regional plan at Lake Tahoe is scheduled to expire, and TRPA will need to revisit many of the assumptions originally made when the 1987 plan was adopted. She commented that, in order to use the best science available and find the best answers to anticipated questions, the TRPA will need to start its threshold studies during this biennium.
Senator Raggio asked whether a written outline had been furnished by TRPA regarding threshold research. Ms. Drum-Dupre replied that a several page description of the different studies they anticipate funding with this appropriation was previously furnished to the committee.
Senator Raggio asked Ms. Drum-Dupre to inform the committee as to which studies are contained in the outline. Ms. Drum-Dupre responded she was unaware the committee would get into this level of detail and did not bring any material on the subject for review. Senator Raggio asked what amount would be designated for threshold research. Ms. Drum-Dupre replied the total is $400,000, with $200,000 in this bill, and $200,000 that will come from interest income from the bonds.
Senator Raggio asked what the State of California was going to appropriate for its part of the Lake Tahoe Plan. Ms. Drum-Dupre answered it is providing a match of two‑thirds of the total, which would be $400,000 in the next Fiscal Year. Senator Raggio commented he was under the assumption there was a two-third/one-third contribution between Nevada and California. Ms. Drum-Dupre indicated the total would be $600,000 in the next Fiscal Year, of which $200,000 would come from Nevada and $400,000 from California.
Senator Raggio remarked Ms. Drum-Dupre had said $200,000 would come from interest on the bonds for the second year of the biennium. Ms. Drum-Dupre indicated California operates only on an annual basis; therefore, Nevada will request $400,000 from California in the second year of Nevada’s biennium. Senator Raggio asked whether that would be the match to the $200,000. Ms. Drum-Dupre replied that is correct. Senator Raggio asked whether the match had been committed to yet. Ms. Drum‑Dupre responded the Lake Tahoe Plan’s budget in California had moved through subcommittees on both sides of the legislature, as recommended by the Governor, which will provide a two-thirds match.
Senator Raggio queried whether this appropriation would be conditioned on California’s approval of $400,000. Ms. Drum-Dupre replied she does not know how it would be handled in the second year of the biennium. She added the TRPA does not expect the Nevada funds to come forth without the match from California. Senator Raggio commented it is not a matter of trust, but rather it should be an agreement.
Ms. Drum-Dupre remarked the two states have worked very closely together at the staff level in preparation of this budget, and the TRPA has been very pleased. Senator Raggio said in the past there was a situation in which California did not appropriate funding for projects.
Mr. Hataway said, “The record should indicate that the funds in the operating budget, as well as these, are predicated on the two-thirds match from California.” Senator Raggio asked how that could be controlled. Mr. Hataway replied a Letter of Intent would be appropriate.
Senator Raggio said the committee staff would prepare a Letter of Intent expressing the continuation of that understanding between California and Nevada in order for the funds to be released, if the matter is processed.
Senator Coffin asked whether the title would be for “threshold research,” because the committee never received a definition of that type of research. He asked whether an outline of what would be studied was included, whether TRPA had have already decided what to study, and whether the appropriation would pay for research. Ms. Drum-Dupre replied this money pays for the actual research. She added the studies being recommended for funding by this appropriation were recommended by the Science Advisory Group, which is made up of scientists who have spent much time at Lake Tahoe over the last several decades. They come from the University of Nevada, Reno (UNR), the Desert Research Institute (DRI), The University of California, Davis (UCD), United States Geological Survey, and others, she added.
Ms. Drum-Dupre pointed out this group of scientists has developed a series of “management” questions. She said these are specific questions directly related to policy decisions that TRPA and other resource management agencies have to ask, based on good science. She commented the research includes science just for the sake of knowledge, and science that needs to be applied. She added the latter is the type of science they are after.
Senator Jacobsen asked whether in-house studies are done by the agency or whether they are contract studies. Ms. Drum-Dupre responded most of the funds would probably be passed through in the form of contracts to those scientists she mentioned. She added DRI has become increasingly active at Lake Tahoe, which is much to the delight of TRPA, and DRI has done some excellent work.
Senator Raggio remarked the committee might amend the bill to require progress reports on the studies and the results of those studies. Ms. Drum-Dupre replied that would be done.
ASSEMBLY BILL 311: Revises provisions governing educational personnel and basic support guarantee for special education. (BDR 34-1084)
Senator Raggio pointed out the committee has the second reprint of A.B. 311.
Ms. Christina R. Giunchigliani stated A.B. 311 is basically an “attract and retain” concept of legislation. She said the Legislature used the concept approved by the last legislative session creating a one-fifth additional retirement credit for teachers at schools that are designated “in need of improvement.” She remarked that because Nevada’s schools are doing such a good job, only six schools are actually impacted. She said she suggested one-fifth would not be much of an incentive, and therefore it was increased to one-fourth. She added the concept has had a minimal impact, because there are very few schools that are actually deemed “in need of improvement” any longer.
Ms. Giunchigliani said the key part of this bill is a concept in which “at-risk” schools recruit, or make sure they retain, more experienced teachers. She commented if a teacher has 5 years or more in public school teaching the teacher can qualify for an additional half-year retirement credit. She added this is a good incentive to keep teachers at the “at-risk” schools.
Ms. Giunchigliani stated there has been a debate whether there are greater problems with curriculum or discipline at “at-risk” campuses when there are too many first or second year teachers. She said a reasonable incentive needed to be found.
Ms. Giunchigliani remarked another “key piece” to the bill concerns a debate regarding full special education funding. She said, as a special education teacher, she starting doing additional work by reviewing old reports, and decided not to change the special education unit, but rather, better define what a unit is. The goal was to reach a 60/40 partnership, she added. She pointed out school districts have added many programs that she believes are not the state’s responsibility.
Ms. Giunchigliani commented, “If we got to that point, right now we’re at 55 percent, this would say, beginning in the year 2003, we would get to a 58 percent and then over the biennia to a 60 percent.”
Senator Raggio asked who is established at 55 percent. Ms. Giunchigliani replied that when the Fiscal Division did the report, they informed her that currently the school districts are at a 55 percent funding level.
Ms. Giunchigliani stated when the budgets are presented in the next biennium, the school districts would be budgeted at a 58 percent funding level. Senator Raggio asked why a commitment should be made at this time that will impact the next budget. Ms. Giunchigliani responded, originally the bill’s provisions were to start during this biennia, but would have needed $1,853,447 in appropriations. Basically, she added, when speaking with the Governor and other individuals, it was felt the policy should be on record and planning could commence.
Ms. Giunchigliani commented it is the same thing with the retirement credit. She said school districts wanted to make sure they did not have a negative impact this legislative session. She added school districts could plan for the next legislative session and determine how many teachers had taught for 5 years, and which schools would be considered “at‑risk.” She said schools could then present that information in requests for their budgets under the retirement issue.
Senator Raggio asked how the average annual salary is determined. Ms. Giunchigliani replied the legislative staff supplies those numbers. Senator Raggio questioned, “Are we going to agree on this, that if we decide this, everybody will always talk about average annual salary.” Ms. Giunchigliani responded, “At least for special ed [education], yes.”
Mr. Hataway commented that for budgeting purposes, the Budget Division uses “387” audited reports from the school districts. He added that is how the division determines the average annual salary. He said for purposes of this bill, the average annual salaries of 2002 would be used.
Senator Raggio asked whether Section 2 of the bill would allow an increase in the number of licensed teachers eligible to purchase one-fourth year of service, and whether that would apply only to “at-risk” schools. Ms. Giunchigliani replied the one-fourth year would only apply to those schools designated as “in need of improvement,” and the one-half year of service would include schools with “at‑risk” pupils. Senator Raggio asked whether this is all that Section 2 of the bill would do. Ms. Giunchigliani answered that would be all. Senator Raggio questioned what the costs of this section would be. Ms. Giunchigliani responded she does not have that information.
Senator Raggio queried whether this would be a cost to the school district. Ms. Giunchigliani commented there would be a cost to the school district and that is why it would not go into effect until 2003. She added the school district could break out how many schools might be “at‑risk” by the time it was preparing budgets. She said this would include how many teachers had reached 5 years of teaching experience that could qualify them. Then there would be a known element on which to base a budget request to the Legislature, she added.
Senator Raggio said, “Well, in Section 2, the one we’re talking about, wouldn’t become effective until July 1. The other part becomes effective in January that year, as I read the bill.”
Senator Raggio asked what Section 3 of the bill would do. Ms. Giunchigliani replied Section 3 would phase in the provisions for licensed teachers in special education. She explained it would begin in Fiscal Year (FY) 2003-04, and must not be less than an amount equal to 58 percent of a teacher’s average annual salary plus benefits for that year.
Senator Raggio questioned how Section 3 would tie in to the 60 percent of average annual salary specified in Section 1, and how FY 2004-05 would be involved. Ms. Giunchigliani responded this is the “phase-in” time. Mr. Hataway stated that as he understands Section 1, the goal is to guarantee 60 percent of annual salary. He added it would be a phase-in for 2004 and would be 58 percent. In 2005 it would be 59 percent, and not hit 60 percent until 2006, he added.
Senator Raggio stated in Section 1 the new language says, “The basic support for special education must not be less than 60 percent of the average annual salary plus benefits for the year in which the basic support guarantee is established.” He surmised that means it becomes effective January 1, 2003, which is before the next legislative session. He added that Section 3 says, “Not withstanding the provisions of Section 1,” which is the section that was just discussed.
Mr. Hataway said, “The first subsection in Section 4, should be July 1 of 2003 because we’re really talking about the next biennium.” Senator Raggio stated he believed the whole bill should be July 1, 2003, if it is processed. He asked whether the administration was committed to this process. Mr. Hataway replied, “No, I’m just explaining that this looks like a phase-in. We’re at 55 percent now, the goal is 60.”
Senator Raggio stated, “If it says it must be not less than 60 percent, then it says not withstanding the provisions in those other years it goes to 58 and then it goes to 59, and we’re told that presently it’s 55.” Mr. Hataway commented that was correct. He added he did not know why subsection 3 was taken out from Section 1.
Senator O’Donnell asked how the bill would be administered. Ms. Giunchigliani asked what part of the bill he was referring to. Senator O’Donnell asked whether the University and Community College System of Nevada (UCCSN) Board of Regents (Board of Regents) would administer the bill. Mr. Hataway replied it would be part of the Distributive School Fund (DSA). He pointed out that when the budget was prepared for the DSA, the Budget Division used a special category for special education units. He said when it was established in 1967, one unit equated to 100 percent. He added it has decreased to its current level over the years, which is approximately 55 percent of what the cost of a special education unit is. He indicated this bill merely sets a standard of 60 percent.
Ms. Giunchigliani said she agreed that July 1, 2003 should be the effective date, because that would allow the Legislature time for review. She added the intent was not to have it go into effect until the Legislature made a decision on it.
Senator Raggio questioned if provisions of the bill take effect after the next legislative session, why it needed to go into the statute now. Ms. Giunchigliani replied it sets the policy. She added that puts everybody on notice that there is legislative intent to increase funding.
Senator Raggio commented:
I hate to be the devil’s advocate, but we’re still on a sharing basis, where the state and local school districts share the cost. We’re struggling with trying to fund the state and I don’t want to lose sight of the fact that this is a shared responsibility. The local governments are the ones getting all the money. Every time you raise the specter, somebody yells, “well that’s sectionalism.”
Ms. Giunchigliani explained A.B. 311 is an attempt to say there is a partnership, and the state should no longer be focusing on funding at 100 percent. That is why a 60/40 split was arrived at, she added. She pointed out the Federal Government funds approximately 9 percent, and depending on what comes out of budget negotiations, there may actually be an increase the state would realize to offset those costs.
Ms. Giunchigliani remarked the issue is the policy statement in the bill. She said she agreed to phase in the changes and not have the retirement issues take place, because she believed the school districts made a reasonable case, and because of funding problems this legislative session. This way it can be planned and properly segregated, she noted.
Senator Raggio asked what is so “magic” about 60 percent. Ms. Giunchigliani responded the original intent was 100 percent, which was the state’s obligation. She asserted that has eroded. She indicated some individuals have argued to achieve a 70/30 split. Senator Raggio inquired who made the commitment of 100 percent. Ms. Giunchigliani replied when the unit was defined, 100 percent was the intent, that the unit would be fully funded. She remarked special education units are currently funded at approximately $29,000. She said that was fine 25 years ago, but it no longer keeps pace with actual average salary.
ASSEMBLY BILL 613: Makes various changes relating to educational personnel. (BDR 34-434)
Ms. Giunchigliani stated a portion of the bill is “university” legislation. She said A.B. 613 provides a loan program for recruiting youth into the teaching profession. She pointed out it is modeled after current law in Chapter 396 of the Nevada Revised Statutes (NRS) to attract students into the nursing profession. She remarked that school districts worked with the Board of Regents to set up a plan for recruiting more males, minorities, and others into the teaching profession, from high school and other places. She added A.B. 613 would allow for a loan program for these students.
Ms. Giunchigliani stated the bill was modeled exactly after what is in statute and after the National Student Defense Loan Program. She said the federal program waives a portion of the teacher’s loan after the person has taught school for a certain amount of years in an “at‑risk” school. She pointed out this bill, also, creates that part of the program.
Ms. Giunchigliani drew attention to Section 4 of A.B. 613, and said, “If a recipient of the loan does get a teaching license and agrees to teach full-time for at least 3 years in an “at-risk” school, then the Board of Regents may waive that portion of that loan.” She added if a teacher obtains a license and agrees to teach for 5 consecutive years, any place in the state, the bill provides for a waiver of a portion of the loan.
Ms. Giunchigliani said the intent was to try to get teachers in underserved areas of the state or on school campuses where they might otherwise not wish to teach. She commented the revolving fund, for those teachers who chose not to take either one of those options, would then pay back the loan and the funds would go back into the loan program.
Ms. Giunchigliani indicated that the loan program would be funded at $250,000 to start, and would be funded with estate tax money rather than General Fund dollars. She referred the committee to Section 11. She said the section deals with licensed teachers that are within a few credit hours for a specialized area in which there is a teacher shortage. She explained the section addresses funding for any teacher who agrees to go back to college to pick up additional credits to receive an endorsement to teach in that area at the request of the district. There is a $100,000 fund to provide reimbursement over the biennium for the cost of tuition, textbooks, lab fees, or what ever may be deemed necessary, she added.
Senator Raggio asked what the nexus is between Section 11 and the other portions of the bill. Ms. Giunchigliani responded Section 11 is separate. It applies to teacher shortages and areas of need identified by the school districts, she noted. She said if there are teachers that only need a few credits to pick up a specific license, and if the school district requests them to do so, the Section would allow reimbursement for the costs of those classes.
Senator Raggio inquired how many teachers would be affected. Ms. Giunchigliani answered approximately 50 to 100 teachers each year, depending on needs of the different school districts. She added this would apply to Section 11 only.
Senator Raggio asked what Section 13 would entail. Ms. Giunchigliani replied Section 13 related to the UCCSN. She stated there currently is a scholarship program funded out of estate tax dollars. Senator Raggio inquired whether Section 13 is separate from the first part of the bill. Ms. Giunchigliani explained that with the agreement of the UCCSN, language was taken from another bill and added to this bill. This way, she noted, there will be a scholarship program, a loan program, and an offset program for those currently licensed to attract teachers into areas of need.
Senator Raggio asked whether there are three aspects to the bill. Ms. Giunchigliani responded that is correct. Senator Raggio asked whether the school fund for school improvements would come out of estate taxes. Ms. Giunchigliani replied that is correct. Senator Raggio questioned what portions of this bill would be funded. Ms. Giunchigliani replied that Sections 12 and 13 would be funded by the school improvement fund, and Section 11 would come from the General Fund. However, she added, there is money in the school improvement estate tax that could be used. Senator Raggio asked whether it is in the budget. Ms. Giunchigliani responded that it is not.
Senator O’Donnell commented the bill is similar to S.B. 391. He asked whether A.B. 613 would allow a student to attend another college outside of the state. Ms. Giunchigliani replied she did not know, but the bill recommends that the Board of Regents establish a program. However, she added, the student would need to be a bona fide resident of the state for at least 6 months. Senator O’Donnell commented the student would need to be a bona fide resident of Nevada, but that would not necessarily mean he or she could not attend school outside of the state.
SENATE BILL 391: Creates Western Interstate Commission for Higher Education scholarship trust fund. (BDR 34-282)
Senator O’Donnell stated he is very interested in S.B. 391. However, he said, the same program is being considered through the WICHE (Western Interstate Commission for Higher Education) Loan & Stipend budget.
He said:
I believe we can parlay, if you will, these students, and required them to come back to the state and sign up as a teacher, and we can do that and use the augmentation of the parent’s tuition that they would have to pay for students who go to any university outside the state. I don’t see a prohibition in this bill that requires them to go to one of the state’s universities, they can go anywhere in the country.
Ms. Giunchigliani remarked that issue was never discussed. This wording, she added, was “lifted” out of current statutes pertaining to rural nurses. She said she would need to get an interpretation for Senator O’Donnell.
Joe Crowley, Lobbyist, University and Community College System of Nevada (UCCSN), stated the loan portion of the program, in this proposed legislation, would be administered by the Board of Regents. He noted the language under Section 2(b) says, “At the time the loan is made, be enrolled in a program of the system,” which would be UCCSN. He commented the scholarship component of the program in Sections 12 and 13 are specifically directed at system institutions, which would include two colleges: the new Nevada State College in Henderson, and the 4-year teaching program at Great Basin Community College.
Mr. Crowley acknowledged that portion of the legislation has been around for a long time. The scholarships for the University of Las Vegas, Nevada (UNLV), and the University of Reno, Nevada (UNR), have been funded for many years on an annual basis, he added. However, he stated, there was a problem during the current biennium with funding for this program. He indicated the program is directed specifically at “4-year system” institutions.
Senator O’Donnell asked whether over 300 scholarships are currently given by UNR to students from out-of-state. Mr. Crowley remarked he is not aware of any scholarship programs funded for out-of-state students. Senator O’Donnell commented there are over 600 at UNLV. Mr. Crowley repeated he is unaware of any scholarship programs of this type.
Senator O’Donnell said he believes the state should do whatever it can to accommodate teachers in the state. He asked where the funding would come from. Mr. Crowley replied it would come from the School Improvement Fund, which is the K‑12 portion of the estate tax. Senator O’Donnell remarked he is not willing to give the program to the Board of Regents to administer because he believes it rightly belongs to the WICHE program. He offered the opinion it should be a program whereby students could be sent to the college of their choice with the caveat that they must come back to Nevada and serve the community.
Mr. Crowley stated his understanding of the WICHE program is that state funds extended through WICHE would be for programs that do not exist in the state of origin. He added that, in this case, public funds would be used to send students out of state to attend programs that are already available in the state.
Senator O’Donnell commented:
We understand that a lot of children desire to go to the university of their parents’ alumni. A lot of students desire to go to other places in the country, due to the fact that they have specific expertise in their criteria that they would like to participate in, and bring that back to Nevada. I think that is laudable. Furthermore, in the WICHE program. . . there’s a metamorphosis going on, in terms of WICHE, because more and more of the colleges that WICHE was set up for, we now in this state, have. However, there is a need for disciplines that we don’t have in this state. I think that is going to be the new focus of WICHE in the future. Not necessarily WICHE, I don’t care what you call it, but, that program is going to be designed to educate those disciplines that we absolutely have a shortage here in Nevada. Whether we have schools here in Nevada for them or not, I don’t have any pride of authorship on S.B. 391. If S.B. 391 can roll into this, that’s fine.
Ms. Giunchigliani remarked that she is unaware of S.B. 391.
Ms. Giunchigliani said she believes the Board of Regents should be monitoring the program in A.B. 613, because it is a partnership. She added legislation was passed during the last legislative session for the Board of Regents to develop a plan with the State Board of Education on how to recruit Nevada high school students into the teaching profession along with individuals in the business sector who might want to go into teaching.
Ms. Giunchigliani pointed out this type of plan should prohibit paying for students to attend out of state schools. Secondly, she added, legislation was passed for the creation of an additional school on college campuses for teaching education. She said this is a perfect blend, which is the policy decision the legislature made.
Ms. Giunchigliani said:
WICHE is another issue on how they fill their slots and make their determinations for specializations of disciplines. We have a teaching program. We have a nursing program, but I think this would compliment whatever decision we’ve now made legislatively to put those forward. I think the Board of Regents are [sic] the proper body. I will also state, if my language ties up the university’s bill, I would ask you take my loan program out, because I don’t want to impact what they did on scholarships.
Senator O’Donnell stated that from testimony heard in this committee no educational students were turned away from our own university system. Ms. Giunchigliani remarked that may be true, but she had not taken part in any discussion on that issue. She stated her goal has been to recruit more high school students into the profession of teaching, including more minority students, more males into elementary schools, and more teachers from the business sector. She noted this legislation would give them that assistance.
Senator O’Donnell stated it would assist students as long as they go to UNR or UNLV. Ms. Giunchigliani remarked that is correct. She added they are our public institutions and public tax dollars go to them.
Senator Rawson asked whether the Board of Regents would consider it “friendly” to require that the Board of Regents administer this program through a Memorandum of Understanding with WICHE.
Ms. Giunchigliani replied:
I’d have to think about that, and for the very simple purposes that we have not decided on what role we want WICHE to play now. Their job is a different standard, in my understanding. The program’s not broken. The scholarship program that’s been in place for years is not broken. There hasn’t been a problem. I don’t know why we would need to divert those dollars to another bureaucracy, to some extent. Especially when that’s suppose to be focusing on slots and disciplines that do not currently exist. We have teachers. We’re recruiting more teachers, and that’s the intent.
Senator O’Donnell commented he believes if this were put on a spreadsheet, there would be a dramatic explanation of what is being done.
Senator O’Donnell said:
When you use a minimum $10,000 as a scholarship for a university outside this state, we don’t have to build the buildings, we don’t have to hire the teachers, we can use the augmentation of parents’ tuition and scholarship money that these students will get with the requirement that they have to come back and teach. The Millennium Scholarship has no requirement to come back and teach.
Ms. Giunchigliani remarked, “That is why this is not millennium dollars.”
Senator O’Donnell said, “I understand that, but what we’re saying here is that, if you want to go ahead and do this, and everything in the system, you will also have to understand that those dollars that have to go into the educational system, to teach teachers, comes out of the DSA fund.” Ms. Giunchigliani remarked it comes out of the estate tax.
Senator O’Donnell stated:
There’s only a limited amount of money in this General Fund, so either put it at the university system or we put it in K-12. So, if you want to build this organization over here, and in my mind, and I don’t mean any disparaging remarks, but I think it’s short-sighted if we build this huge institution and we require all of these teachers to go to UNLV and UNR, we are going to have to build buildings, hire teachers, hire support staff, and the like. Whereby, if we got wise, and we said, okay what we’d like to do is give a stipend to these students who can go anywhere in the United States, and the parents can pay the rest of their tuition, and then we require them to come back here and teach. I think we are going to be exponentially better off financially, if we do that.
Mr. Crowley remarked he believes one would need to take considerable care in spending public dollars from the State of Nevada to support a student studying elsewhere, in programs that are already in place in Nevada. He added that with respect to the question of requiring these students to come back to Nevada, he is unaware of the success record in enforcing that kind of requirement in existing WICHE programs. He said he knows there is significant literature available indicating when students go away to school, whether in a WICHE program or not, the likelihood of those students settling in the place they go to school is very strong.
Senator O’Donnell asserted that is absolutely incorrect. He added there is a 70 percent return of students to the state.
Mr. Crowley commented he is not restricting his remarks to the WICHE programs. He pointed out that he is referring to what happens after these students come back and teach in Nevada for a couple of years. He added the likelihood is that a significant number of these students will go back to where they went to school.
Senator O’Donnell said there is evidence that 70 percent of the people return who are involved in WICHE, which is a contract to return to Nevada and supply their trade to the rural areas, and the needed areas, in our communities. Once they come back, he added, the odds of them leaving again to go to another state is remote.
Mr. Crowley indicated the UCCSN supports this bill for the inclusion of the programs from A.B. 311, with the loan program being administered by the Board of Regents.
Mr. Hataway said the Budget Division does not have a position on A.B. 613. However, he said, Section 12 needs to be passed. He added that an error was made in the authority in the 1999 legislative session. He pointed out that normally $130,000 per year was given for scholarships. By not specifying the amount as “each year of the biennium,” was just an oversight, he noted. He repeated that Section 12 needs to be passed or otherwise there will be no funding for the second year of this biennium in this program.
Mr. Hataway clarified that traditionally $130,000 per year was given to the university system from the state to use for scholarships. He said the 1999 legislative session inadvertently limited it to one $130,000 allocation. He indicated the budget is legislatively approved at $130,000, but the authority is only approved for $100,000. Senator Raggio asked whether that could be done with a “supplemental.” Mr. Hataway indicated it would be a clarification of the language. He added it is not a “supplemental, “ because it is in the legislatively approved budget, but the language and the authority is the issue. Senator Raggio asked whether the current year needs to be covered. Mr. Hataway said it does.
Mr. Hataway remarked the legislatively approved budget was for $130,000 per year. Senator Raggio said the original language in Section 12 is for $130,000, for not more than 45 scholarships at each institution. He added it was passed in 1999. Mr. Hataway stated that is correct. He said, “You approved a legislatively approved budget at $130,680 each year. We can’t use the second year [funding] unless you modify the language.” Senator Raggio indicated he understood.
ASSEMBLY BILL 517: Makes appropriation to Department of Human Resources for furnishings and equipment for Division of Child and Family Services. (BDRS‑1422)
Bruce Alder, Deputy Administrator, Division of Child and Family Services, Department of Human Resources, stated A.B. 517 would provide a “one-shot” appropriation to the Division of Child And Family Services (DCFS). He said the original request was for $167,407, and in working with legislative staff, the figure has been reduced to $117,244. The intent of this “one-shot,” he added, would be for the purchase of equipment, supplies, several telephone systems, and other needed items for the multiple district offices throughout the state.
Senator Raggio asked whether the committee staff received itemization of the reduction and whether it approved the adjusted amount. Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, responded it was reviewed and approved.
ASSEMBLY BILL 524: Makes appropriation to Department of Information Technology for phase II of digital microwave upgrade. (BDR S-1358)
Mark Blomstrom, Deputy Director, Communication and Computing Division, Department of Information Technology (DoIT), referring to his written testimony (Exhibit C), said the request was originally for $9,141,986 for phase 2 of a three‑phase project to replace the aging analog microwave system. He pointed out this amount has been reduced to $4,641,986, for phase 2A and the replacement microwave system will upgrade service to digital and increase capacity.
Mr. Blomstrom stated that currently phase 1 is operating successfully, and was brought in “on budget.” He said the microwave system provides transport for critical state communications traffic and establishes the foundation necessary for public safety radio systems, including the Nevada Department of Transportation (NDOT) 800 megahertz (MHz) system and the Department of Motor Vehicles and Public Safety (DMV&PS) high band, very high frequency (VHF) system.
Mr. Blomstrom pointed out the existing analog microwave system is 30 years old and has exceeded its original design life. He said it is entirely full of user circuits, with no more space for additional circuits, and is actually operating beyond design capacity at 103 percent. He indicated this overuse has created a negative effect of increased noise and distortion levels.
Mr. Blomstrom acknowledged the old system is currently operating and has served the state reliably and well. He explained this is in large part because of its “loop protection” design. However, he noted, because of the “loop protection” design, the entire analog microwave system must be maintained in full operation until it can be completely replaced. He said the department does not have the option of shutting down part of the analog system while part of the new digital system is brought on line. He explained that all three phases of the digital system must be online before the old analog system can be replaced and taken offline. Senator Raggio asked what the estimated cost would be to complete all three phases, beyond this request. Mr. Blomstrom replied the original estimate from the 1996 study was approximately $17 million. He said DoIT received $5.6 million in lieu of the consultant’s recommendation of $7.4 million for phase 1. He stated the department originally requested $9.1 million, which was reduced to $4.6 million. He said he estimates, at this point, the department has approximately $9 million remaining in funding required after completion of phase 2A.
Mr. Blomstrom pointed out the department anticipates the balance of the detailed engineering and budget estimate will be ready by the beginning of the next legislative session. He stated that will specifically outline what the final amount should be.
Senator Raggio noted approximately $9 million had been the original request for phase 2, but that request had been reduced to approximately $4 million. He asked whether DoIT intended to complete the original phase 2, or would only complete half. Mr. Blomstrom replied the division’s request for $4 million would complete just half of phase 2, which is now referred to as 2A.
Mr. Hataway stated the Budget Division reluctantly recommended the reduction, which would help balance the budget based upon the Economic Forum’s forecast. He said this should allow the department to finish the engineering work on the total system and start phase 2A. He suggested that may enable DoIT to come back with a “one-shot” in FY 2003 to finish phase 2B and possibly start on phase 3. It will depend upon funding, he added.
Senator Raggio asked whether the committee staff reviewed the bill before it came over from the Assembly. Mr. Ghiggeri responded that he had not talked with staff about the bill, but he indicated they had reviewed it. He added that the original request was reduced as a budget-balancing effort. He said the committee should be aware that DoIT will be back at the 2003 legislative session to request this money along with additional funding.
Senator Raggio asked whether the reduction of this phase would require the analog system to remain in operation for approximately 2 more years. Mr. Blomstrom answered that is correct.
Senator Coffin asked what company would be used to provide the equipment, and whether there will be compatibility. Mr. Blomstrom replied there is compatibility with the 800 MHz and the DMV&PS high band, VHF system. He added this microwave system will provide the foundation for either of those two systems. In fact, he noted, it can provide the foundation for any radio system operating within the state. He said this basically carries transport for those systems. Senator Coffin asked whether that would leave the competitive market open. Mr. Blomstrom responded that it would.
ASSEMBLY BILL 529: Makes appropriation to Department of Human Resources for software and computer equipment for Nevada rural health communications system. (BDR S-1368)
Michael Torvinen, Administrative Services Officer IV, Division of Mental Health and Developmental Services, Department of Human Resources, said this is the first reprint of A.B. 529. He referred the committee to his handout (Exhibit D), and indicated the bill had been discussed with the committee’s staff. He stated the original appropriation in the bill was reduced by approximately $42,500. He added the division did not appropriately account for the base budget amounts in this project.
Mr. Torvinen stated A.B. 529 provides for conversion of analog to digital communications systems for the division’s 17 rural clinics. He said, similar to DoIT’s problems, there is no longer service available for these systems. He added there is a Health Insurance Portability and Accountability Act (HIPAA) issue involved. He commented the new lines will be more secure and help the division in their quest to become HIPAA compliant.
Senator Raggio suggested that about the time analog is complete, someone will have an entirely new system. Mr. Torvinen concurred.
ASSEMBLY BILL 532: Makes appropriation to Department of Human Resources for vehicle, office equipment and remodeling for Northern Nevada Child and Adolescent Services. (BDR S-1376)
Bruce Alder, Deputy Administrator, Division of Child and Family Services, Department of Human Resources, stated A.B. 532 provides a “one-shot” appropriation to the Northern Nevada Child and Adolescent Services. Senator Raggio asked whether it is the first reprint with an adjusted amount. Mr. Alder responded that is correct. He said the first request was for $75,321, and was slightly revised to $72,892.
Mr. Alder explained the request would provide a telephone system at the Adolescent Treatment Center on the Mental Health Institute grounds, replacement of passenger vans, and fund remodeling of three client restrooms.
ASSEMBLY BILL 533: Makes appropriation to Department of Business and Industry for replacement of computers in Consumer Affairs Division. (BDR S‑1384)
Sydney H. Wickliffe, C.P.A., Director, Department of Business and Industry, stated this is the first reprint of A.B. 533, which is a “one-shot” appropriation for the Consumer Affairs Division. She added it would provide replacement equipment for five computers per year.
Senator Raggio asked whether all the funding in the bill would go for replacement of computers. Ms. Wickliffe replied that is correct. Senator Raggio inquired whether that is necessary. Ms. Wickliffe responded that it was very necessary. Senator Raggio asked whether staff had reviewed this bill. Mr. Ghiggeri responded it had been reviewed.
Senator Jacobsen asked what wears out on a computer. Senator O’Donnell explained that the software today needs more memory and more hard-disc space. He said as the software needs grow, the computer becomes antiquated, only because it cannot do what the upgraded software is capable of doing. He remarked that most of the time, the “mother board” or the hard-disc drive is the part that breaks. He pointed out that in state government, computers run fine and work great, but they are so antiquated, they do not process any of the new software. He added that is an industry-wide problem, therefore the state must keep updating.
BILL DRAFT REQUEST R-1568: Resolution commending Shelba Gamble for her services as Administrative Assistant to the University of Nevada, Reno. (Later introduced at Senate Concurrent Resolution (SCR) 52.)
Senator Raggio commented the bill draft request (BDR) commends Shelba Gamble for her service as Administrative Assistant to the President of the University of Nevada in Reno. He said he requested the resolution to recognize her 25 years of service.
SENATOR RAWSON MOVED TO INTRODUCE BDR R-1568.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
******
BILL DRAFT REQUEST 18-1562: Creates the committee for tourism based project development. (Later introduced as S.B. 583)
Senator Raggio stated discussions were held with the Commission on Economic Development and the Commission on Tourism for a request for a bill to establish a grant program for the development of projects, particularly for the rural areas.
SENATOR O’DONNELL MOVED TO INTRODUCE BDR 18-1562.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
ASSEMBLY BILL (A.B.) 187: Makes appropriation to legislative fund for equipment and software for information systems for Legislative Counsel Bureau and Nevada Legislature. (BDR S-732)
SENATOR COFFIN MOVED TO DO PASS A.B. 187.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 189: Makes appropriation to legislative fund for certain maintenance and rehabilitation projects on legislative building. (BDR S-730)
SENATOR O’DONNELL MOVED TO DO PASS A.B. 189.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 507: Makes appropriation to State Department of Conservation and Natural Resources for radio connection between Nevada State Park System and Department of Motor Vehicles and Public Safety. (BDR S-1393)
SENATOR O’DONNELL MOVED TO DO PASS A.B. 507.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 511: Makes appropriation to Tahoe Regional Planning Agency for threshold research. (BDR S-1398)
SENATOR O’DONNELL MOVED TO AMEND A.B. 511, TO PROVIDE PERIODIC REPORTS TO THE INTERIM FINANCE COMMITTEE ON THE NATURE AND PROGRESS OF THE THRESHOLD RESEARCH PROJECTS, WITH A LETTER OF INTENT THAT THE APPROPRIATION IS CONDITIONED UPON THE APPROPRIATE MATCHING GRANT FROM THE STATE OF CALIFORNIA, AND TO DO PASS AS AMENDED.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 517: Makes appropriation to Department of Human Resources for furnishings and equipment for Division of Child and Family Services. (BDRS‑1422)
SENATOR JACOBSEN MOVED TO DO PASS A.B. 517.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 524: Makes appropriation to Department of Information Technology for phase II of digital microwave upgrade. (BDR S-1358)
SENATOR RAWSON MOVED TO DO PASS A.B. 524.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 527: Makes appropriation to Legislative Counsel Bureau for new and replacement equipment and various maintenance projects. (BDR S-1361)
SENATOR O’DONNELL MOVED TO DO PASS A.B. 527.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 529: Makes appropriation to Department of Human Resources for software and computer equipment for Nevada rural health communications system. (BDR S-1368)
SENATOR RAWSON MOVED TO DO PASS A.B. 529.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 532: Makes appropriation to Department of Human Resources for vehicle, office equipment and remodeling for Northern Nevada Child and Adolescent Services. (BDR S-1376)
Senator Raggio commented the committee is addressing the first reprint of A.B. 532.
SENATOR RAWSON MOVED TO DO PASS A.B. 532.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
ASSEMBLY BILL 533: Makes appropriation to Department of Business and Industry for replacement of computers in Consumer Affairs Division. (BDR S‑1384)
SENATOR RAWSON MOVED TO DO PASS A.B. 533.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Senator Raggio commented that A.B. 311 and A.B. 613, which were heard earlier in the meeting, would be held until further information is received.
Senator O’Donnell remarked he would like to put together a spreadsheet reflecting the cost of educating a teacher within the state, and what the cost of an alternate education would be.
SENATE BILL 463: Makes appropriations to Department of Prisons for maintenance projects at certain facilities and ongoing expenses for various budget accounts. (BDR S-1432)
Senator Raggio stated S.B. 463 was heard by the committee on March 28, 2001. He explained it would provide funding for maintenance projects at the Department of Prisons (DOP). He commented the requested amount for ongoing projects has been amended.
Mr. Ghiggeri remarked the amount was amended for one-time maintenance projects to $334,376, and the ongoing expenses had been amended to $10,129 per year, for an approximate total of $355,000.
Senator Raggio drew attention to Amendment 1155, and said it conformed to the action. He stated if there was no objection from the committee, the amendment would be submitted in connection with the committee’s motion to amend and do pass S.B. 463. There was no objection.
SENATE BILL 579: Revises provisions governing compensation of certain legislative employees. (BDR 17-1007)
Mr. Ghiggeri referred the committee to Amendment Number 1150, and said it would add a line “Journal Clerk” to Section 1, page 2, between lines 45 and 46.
Senator Raggio stated if there is no objection from the committee, Amendment Number 1150 would reflect the committee’s action for amend and do pass S.B. 579. There was no objection.
ASSEMBLY BILL 530: Makes various changes concerning regional planning in certain counties. (BDR 22-1115)
Mr. Ghiggeri stated that with Amendment Number 1152 the use of funds would be approved to provide $54,572 for a telephone system, and $13,315 for finger printing employees of the Welfare Division.
Senator Raggio said Amendment Number 1152 would be utilized, if there is no objection from the committee, to confirm the committee’s action to amend and do pass A.B. 530. There was no objection.
SENATE BILL 442: Makes appropriations to Department of Prisons for various replacement equipment at certain facilities and ongoing expenses of Pioche Conservation Camp to lease certain equipment. (BDR S-1378)
Mr. Ghiggeri drew attention to Amendment Number 1151 to S.B. 442, which would provide $1,034,239 for various replacement equipment at certain facilities within the Department of Prisons. He added the amendment included a “one-time” cost of $1,034,239 and provided $948 per year for ongoing costs to lease a dishwasher at the Pioche Conservation Camp.
Senator Raggio stated Amendment Number 1151 conveys the committee’s action on May 28, 2001 to amend and do pass S.B. 442. He said Amendment Number 1151 would be utilized if there is no objection from the committee. There was no objection.
ASSEMBLY BILL 123: Revises provisions relating to health insurance provided by public employees’ benefits program. (BDR 57-603)
Mr. Ghiggeri drew attention to Amendment Number 1154, and said he had not yet read the amendment.
Senator Raggio said the meeting would be at ease while committee staff reviewed Amendment Number 1154 for A.B. 123. He pointed out the bill was last heard on May 28, 2001, and the interested parties were consulted. He added the amendment reflects the general agreement between all the interested parties.
James T. Richardson, Lobbyist, Nevada Faculty Alliance, said the fiscal staff pointed out a potential problem with Section 9 of A.B. 123, which is the section that had wording added for clarification. He remarked that one key item was left out, which is an effective date for that section.
Mr. Richardson commented:
If we don’t put an effective date in Section 9, at line 19, for instance, you could say effective January 1, 2002, any deduction. . . If you don’t do that, this would be effective upon passage and approval, and right in the middle of a plan year you would be changing how the rate structure works. Bob [Bob Gagnier, Lobbyist, State of Nevada Employees Association] and I have agreed, I think, that we would recommend an effective date of January 1, 2002. We couldn’t find an effective date in here. I think it’s clear that there is at least a small fiscal impact of this section. The exact amount of that is a bit in discussion this morning, but at issue is the practice that developed just this past, in this planned year, of charging $74.79 for each active only employee in the North participating in the single HMO [health maintenance organization] option. We think the language here would impact that, perhaps even preclude it, and you need to understand that. We weren’t tying to pull a fast one the other day, we were working in a hurry, and we did not comment on that aspect of it and Georgia [Georgia J. Rohrs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau] did call it to our attention. It’s my estimate that if you made the effective date January 1, 2002, it would impact the plan, probably around $300,000 for the biennium, which would come out of reserves. It could be more, because we could have a mass rush into the Northern HMO. I don’t know how to exactly make that prediction, but based on current enrollment. . .
Senator Raggio asked what the anticipated reserve would be otherwise. Mr. Richardson replied he believed it would be $12 million.
Georgia J. Rohrs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated she believes the reserve is projected to be approximately $21 million. She added that is for the “incurred but not reported reserve” (IBNR), and it is not available.
Senator Raggio asked whether it would be available for this purpose. Ms. Rohrs replied it should be available for claims that are incurred but not yet reported, and is a specific reserve category. Senator Raggio questioned if there is the kind of impact that Mr. Richardson referred to, whether it would imperil the client. Ms. Rohrs responded that if the actuaries’ projections were assumed to be correct, and the Budget Division testified it was comfortable with the numbers in the plan, then it would appear to be well funded and would be available.
Ms. Rohrs commented there is some question whether the language submitted, would preclude the continued charge of $74.49 for employee only participants. Senator Raggio asked what the intent would be. Ms. Rohrs replied the intent would be a policy decision for the committee to make. Senator Raggio asked whether the intent would include stopping the collection of that amount.
Mr. Richardson remarked that has been a major concern. Senator Raggio asked whether it would only apply in the Northern sector of the state. Mr. Richardson replied that is the only area where this has been in place. He added it has to do with the rate structure and the charges made by the HMO’s in the North, which the Nevada Faculty Alliance has very little control over. Senator Raggio indicated he understood.
Ms. Rohrs commented that it seemed odd that the $74.79 is only charged for St. Mary’s Hospital’s HMO, and it only appears on the documents provided to staff from the Public Employees’ Benefits Program (PEBP). She added it is only levied against the employee. Senator Raggio inquired whether St. Mary’s is the sole provider in Northern Nevada. Ms. Rohrs responded that it is.
Mr. Gagnier clarified it is the sole HMO, and not the sole provider. Senator Raggio acknowledged that is correct. Mr. Gagnier remarked there is a difference of opinion as to what the bill says. He pointed out the chairman of the PEBP Board indicated he believes the language would impact the HMO rate by $30.00 and not the full $74.79, and the language would still allow St Mary’s to charge for the subsidy for retirees and dependants, which would be $45.
Ms. Rohrs said if that analysis is correct, it is in conflict with what the staff based its assumptions on. Senator Raggio remarked the issue is unclear to the committee. Ms. Rohrs reiterated that staff’s assumptions, on the cost and the fiscal effect, were based on a document provided to staff by the PEBP. She said that document appears to be in conflict with certain statements provided by the acting chairman of the board of PEBP.
Senator Raggio asked what decision the committee should make. Mr. Richardson responded he only became aware of the issue this morning, and feels it is incumbent to advise David Smith, chairman of the PEBP. He said he would hope the original understanding of the language would prevail, and if there is lack of clarity, he encourages the committee to pass A.B. 123 with the effective date added, and a Letter of Intent to that effect for clarification purposes.
Mr. Richardson commented, as in previous testimony with a number of committees, this new development of starting to charge state active employees for participating is a rather remarkable change of policy. He said he hopes the issue could be dealt with through this piece of legislation.
Senator Raggio asked whether Mr. Smith is present. Mr. Richardson replied he is not present, but Mr. Smith is aware the matter is being discussed. Mr. Gagnier remarked he could advise Mr. Smith that he should be present. Senator Raggio commented that A.B. 123 will be held until tomorrow morning, and Mr. Smith should be advised.
Senator Coffin asked whether there are any benefit changes planned, and whether the HMO has any options for certain levels of care that would effect the premium versus the benefit received. Ms. Rohrs responded, “I would say, as to the benefit changes and premiums, that isn’t decided until toward fall, because that’s one thing we attempted to get as part of the budget evaluation process.”
Senator Coffin commented he does not believe it is dangerous to dip into the reserves. He added it probably will not be, unless there is a contemplated benefit increase.
Mr. Richardson stated he would anticipate that if the intent of the section is carried forward, it would lead to the participation of another HMO in the North and offer some competition of which there is currently none. He pointed out there had been two HMO’s to be involved, but because of the rate structure and the notion of charging, one HMO withdrew. He said only one HMO was left, and he believes if the practice of levying charges against the employee were stopped, it would encourage competition and there would be two HMO options in the North in the future. Senator Coffin stated that would be good.
Ms. Rohrs said she believes it is important to note that, according to Mr. Smith’s calculations contained in his memorandum to staff, he anticipates that the annual loss to the dependent retiree subsidization pool would be $1.6 million per year.
SENATE BILL 433: Makes appropriation to Department of Museums, Library and Arts for purchase of equipment. (BDR S-1364)
Senator Raggio stated the appropriation in S.B. 433 was to be adjusted and there was also a discussion about the markers in the statewide monument program. This appropriation, he added, would fund a half-time position, and referred the committee to a handout (Exhibit E) detailing the appropriation.
SENATOR RAWSON MOVED TO AMEND AND DO PASS A.B. 433 WITH AMENDMENT NUMBER 1158.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Senator Raggio recessed the meeting at 9:43 a.m., until the call of the chair.
Senator Raggio called the meeting to order at 2:48 p.m.
Senator Raggio stated the committee is meeting for the purpose of hearing two budgets that remain unresolved, and the committee needs to learn of the action taken by the Assembly Committee on Ways and Means on the Western Interstate Commission for Higher Education (WICHE) budget and the Proficiency Testing budget.
W.I.C.H.E. LOAN & STIPEND – Budget Page – WICHE-1 (Volume 1)
Budget Account 614-2681
Mr. Ghiggeri commented that Senator Raggio is correct. He pointed out he was not at the closing hearing in the Assembly Committee on Ways and Means. He drew attention to the closing sheet on W.I.C.H.E. Loan & Stipend (Exhibit F), the closing document used by the Assembly Committee on Ways and Means.
Mr. Ghiggeri pointed out that it provides for 3 physical therapy slots in each year of the biennium. He added it includes 10 nursing slots and 5 mental health slots in the second year of the biennium. He said it also eliminates the reserve in the WICHE account.
Senator Mathews said, with regard to the nursing slots, she had understood the students could attend any nursing school in the state, and yet the bill still reflects “4-year nursing programs.” She asked why community colleges were not included and why these students could not receive a stipend. She added that the community colleges can produce nurses in 2 to 3 years.
Senator Rawson commented this is a compromise.
He said:
It’s like all compromises, you don’t have everything on one side or another, and I think this is probably agreeable to the other side. But, in the final language, it just wasn’t put in. I hesitate to slow it down. The way it is written here, does it have to go to ‘four-year’? The way you see it. The way I see it, it just says new professional slots.
Senator Mathews stated it says “4-year” nursing programs. She said, “If you have a shortage and you’re trying to get something to get rid of that shortage, you ought to have an option.”
Senator Rawson remarked he believes a Letter of Intent could indicate that any nursing programs would be for this purpose. He said he believes the language reflects categories that were used in the past and they are being used again.
Mindy Braun, Education Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, commented, regarding the language, that these categories have been used in the past.
Ms. Braun said:
What we do normally with this is put them all into the higher amount of funding, so that we understand which one the student wants to go in to. I don’t believe that the administrator to WICHE has yet made agreements with the variety of different schools that will be used in this, but we wanted to put the funding at the higher amount so that they would have sufficient funding regardless of the type of program.
Senator Mathews commented she liked the idea of a Letter of Intent, because she believes this issue will “get lost in the shuffle one more time.” She added the focus always ends up here, especially when there is talk of shortages, and not having people ready to go into a hospital setting. She said the people who are prepared to do that are people who are prepared at 2-year schools.
Senator Rawson asked whether it would be permissible to attach a Letter of Intent to indicate that it is open to 2-year and 4-year programs.
Ron W. Sparks II, Director, Western Interstate Commission for Higher Education, University and Community College System of Nevada, said it is currently categorized as a 4-year college. He pointed out it is built in at the higher amount, but the intent is to definitely work with the community college system. He added that is most likely where a majority of these students will go.
Senator O’Donnell asked about the reversion and whether the terms of the reversion are in the compromise. Mr. Sparks replied the reversion is not part of the compromise. He said, “At this time the agreement is to zero us out [the reserve] at the end [of the biennium], with the agreement that we were going to build in the nursing, the mental health, and those slots. “ Senator Raggio added it also includes retaining 3 new physical therapy slots. Mr. Sparks remarked that is correct.
Senator Raggio asked whether, under the compromise, the reserve would remain for FY 2002 at $182,067, and then be zeroed out at the end of that Fiscal Year. Ms. Braun indicated that is correct.
Senator O’Donnell commented:
I support the revenue enhancements for education. I think education is an integral part of what government has to do to support its communities. However, I also realize that we have got an extreme shortage of nurses and of teachers. It costs approximately $100,000 per teacher, to teach them how to be a teacher, in this state. Whereby, if we utilize the WICHE program, we can do that for far less money and get the same product for our communities. It just seems to me like the Assembly, and maybe that’s not proper for me to say that, but I think it is important to make sure the WICHE program, whatever it morphs into, is funded enough to accommodate positions in education as well as nurses and mental health. Those are the three basic areas that we need. Any compromise that’s less than that I am not going to be in favor of. I was part and parcel of this education package that came through. My name never seems to get on anything, but I was the one who worked with Mark James [Senator Mark A. James, Clark County, Senatorial District No.8] to get this proposal out. This is one of the things that I want to do for education. However, it’s not there, and I think it is disingenuous and sad that the other side would completely gut the WICHE program. I say ‘gut it’ because I know they’re adding a few here and few there, but basically they’ve gutted what I wanted to do, yet I can guarantee you that they will take the revenue that I helped put forth, and they will take that and use it for their teachers’ salaries. I think that’s just disingenuous.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 614-2681, ON THE COMPROMISE OF THE ASSEMBLY WITH A LETTER OF INTENT.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL ACCEPTED THE MOTION BUT WITH THE UNDERSTANDING THAT HE OBJECTS TO STRIPPING THE PROPOSED TEACHING SLOTS FROM W.I.C.H.E.).
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PROFICIENCY TESTING – Budget Page – K12ED-32 (Volume 1)
Budget Account 101-2697
Mr. Ghiggeri commented the Assembly Committee on Ways and Means closed the budget account by removing the funding in decision unit M-202. In essence, he explained, the Assembly currently concurs with the Senate’s closing of this budget.
Senator Raggio said he believes the Senate is not required to take action, because the Senate closed this budget without that funding in the budget. He added that the Senate is now in accord with the Assembly Committee on Ways and Means.
Senator Raggio asked whether there is any information on closing the Distributive School Account (DSA). He said this committee, or the subcommittee of this committee, would be ready to close that budget based upon the proposal that results from S.B. 577, which is currently under consideration in the Assembly. He added that when that matter is resolved, the DSA could be closed.
SENATE BILL 577: Limits common-law and statutory liability of corporate stockholders, directors and officers and increases fees for filing certain documents with secretary of state. (BDR 7-1547)
Senator Coffin asked how much money would be yielded from S.B. 577, because it is unknown how many individuals will continue to incorporate. Senator Raggio remarked that anticipated increases in fees for corporate filing would result in approximately $29 million over the biennium. He said the anticipated new money from the rental/lease rebate (A.B. 460) would be approximately $23.5 million over the biennium, in its present form.
ASSEMBLY BILL 460: Creates legislative committee on transportation and revises provisions governing fees collected by short-term lessors of passenger cars. (BDR 17-589)
Senator Raggio remarked that, together, S.B. 577 and A.B. 460 should yield $25 million in the first year, and $27.5 million in the second year of the biennium.
Senator Coffin stated he would be worried about budgeting the entire amount from S.B. 577, because he believes “we are on shaky ground” in terms of knowing how many re-incorporations will happen. He said, “We know pretty much on our tourism statistics and rental cars.”
Senator Raggio said:
We’re on pretty solid ground on those numbers according to fiscal. Ted Zuend [Ted A. Zuend, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau] has tracked those numbers, and that accommodates the proposal, which would be a 3-percent bonus out of the ‘one-shot’ money for this fiscal year and would accommodate the 2-percent cost-of-living increase in the second year of the biennium. So those numbers are pretty solid according to fiscal.
Senator Raggio adjourned the meeting at 3:02 p.m.
RESPECTFULLY SUBMITTED:
Debra Petrelli
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: