SENATE COMMITTEE ON FINANCE

MINUTES OF THE

SENATE Committee on Finance

Seventy-First Session

May 31, 2001

The Senate Committee on Financewas called to order by Vice Chairman Raymond D. Rawson at 8:19 a.m., on Thursday, May 31, 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

STAFF MEMBERS PRESENT:

Gary L. Ghiggeri, Senate Fiscal Analyst

Bob Guernsey, Principal Deputy Fiscal Analyst

Jennifer Ruedy, Committee Secretary

GUEST LEGISLATORS PRESENT:

Senator Maurice E. Washington, Washoe Senatorial District No. 2

OTHERS PRESENT:

Steve Thaler, Director, China Spring Youth Camp

Robert E. Shriver, Executive Director, Division of Economic Development, Commission on Economic Development

Nancy A. Dunn, Interim Executive Director and Business Manager, Commission on Tourism

William J. Maier, Administrative Services Officer, Department of Business and Industry

R. Michael Turnipseed, P.E., Director, State Department of Conservation and Natural Resources

Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources

Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy, Department of Human Resources

Michael J. Willden, Administrator, Welfare Division, Department of Human Resources

H. Pepper Sturm, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau

Susan E. Scholley, Senior Research Analyst, Research Division, Legislative Counsel Bureau

Don Hataway, Deputy Director, Budget Division, Department of Administration

Cindy Edwards, Property Manager, Buildings and Grounds Division, Department of Administration

Frank Revell, Chief, State Motor Pool, Department of Administration

Ron Titus, Deputy Court Administrator and Deputy Director of the Administrative Office of the Courts, Office of Court Administrator, Supreme Court

Judy Holt, Manager/Budget and Finance, Office of Court Administrator, Supreme Court

P. Forrest Thorne, Deputy Executive Director, Department of Taxation

Bob Gagnier, Lobbyist, State of Nevada Employees’ Association (SNEA/AFSCME)

James T. Richardson, Lobbyist, Nevada Faculty Alliance

David Smith, Acting Chairman, Board of the Public Employees’ Benefits Program

Senator Rawson indicated the committee would address the bills on the agenda in the order they are listed unless it is necessary to accommodate the schedule of any persons wishing to testify.

Senator O’Donnell asked staff to keep the committee apprised of which bills are not included in the budget throughout the course of the meeting.

Senator Rawson directed Bob Guernsey, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), to comply with Senator O’Donnell’s request during the temporary absence of Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, LCB.

SENATE BILL 582: Revises provisions governing certain appropriations for public lands and China Spring Youth Camp. (BDR S-1566)

Steve Thaler, Director, China Spring Youth Camp, stated Senate Bill (S.B.) 582 resulted from a request by Dan Holler, County Manager, Douglas County. He said this bill is in reference to the construction project that is currently underway. He explained the construction bid would be awarded on Thursday, June 7, 2001, after which construction will immediately begin. He said this bill would allow funding approved by the 1999 Legislature to pass through to the county sooner than the current process of appearing before the Interim Finance Committee (IFC). He noted this legislation would allow China Spring Youth Camp to avoid a negative cash flow when payments are distributed to the contractor.

Senator Rawson stated the committee is familiar with the bill, and he asked whether anybody else would like to testify on the bill. He closed the hearing on S.B. 582 because there were no further individuals wishing to testify.

SENATE BILL 583: Establishes grant program for development of projects relating to tourism. (BDR 18-1562)

Robert E. Shriver, Executive Director, Division of Economic Development, Commission on Economic Development, stated this bill would establish a grant program in communities, municipalities, and counties of less than 100,000 inhabitants throughout the state using the reserve funds from the Commission on Tourism. He pointed out this is a reallocation of existing funds, not a request for new funds.

Nancy A. Dunn, Interim Executive Director and Business Manager, Commission on Tourism, explained that she and Mr. Shriver were asked by Lieutenant Governor Lorraine T. Hunt to collaborate in finding new ways to assist the rural areas of Nevada. She said that she and Mr. Shriver discovered there is a gap in funding sources available to rural Nevada. She explained that both the Commission on Economic Development and the Commission on Tourism have grant programs available to rural Nevada, but there are numerous current projects that do not qualify for either of those existing grant programs. She articulated this bill provides for the establishment of a new grant program in which both commissions will participate equally to provide funding for certain tourism related projects in rural Nevada.

Ms. Dunn discussed the funding source for the grant program. She explained that a category within the Commission on Tourism’s budget would be established to receive any funds left in reserve at the end of the fiscal year. She said those funds would be built into the budget and applied to the grant program. She stated the funding source is subject to legislative authorization through the normal budget process. It is too late in this legislative session to incorporate this process, but the authorization to create the committee would enable the committee to appear before IFC at the end of the fiscal year to dedicate any remaining funds into the program, she concluded.

Senator Rawson inquired about the current amount of reserve funds and the amounts anticipated in the future.

Ms. Dunn responded that LCB fiscal analysts recalculated the Commission on Tourism’s revenue earnings for this year at 8.8 percent, which is higher than the 4.5 percent the commission had previously determined it would be. She pointed out “they have taken the anticipated reserve funding, and it has been dedicated to state projects throughout the state.” Therefore, she added, if the Commission on Tourism achieves the 8.8 percent, “there may not be any funding left in reserve because it has all been rededicated.” She noted if the commission exceeds the 8.8 percent by any amount, the commission would appeal to IFC to have the reserve be dedicated to the program.

Senator Rawson stated there is no appropriation in the bill. Ms. Dunn acknowledged that is correct.

Senator Rawson questioned whether Lake Tahoe is considered rural by the definition of communities with populations less than 100,000.

Mr. Shriver responded that Douglas County would probably qualify for assistance, but Washoe County probably would not. He said the commission’s Rural Economic Development Program considers portions of Washoe County rural. Unfortunately, the commission does not do the same in Clark County, he added. He noted Clark County is handled strictly by the county and the cities.

Ms. Dunn commented it is important to also understand the tourism side because the proposal is a combined effort. She said the Commission on Tourism considers portions of Washoe County rural. She noted the Commission on Tourism also divided Clark County so that Mesquite, Pahrump, and similar communities are eligible under the commission’s guidelines.

Senator Rawson closed the hearing on S.B. 583, and opened the hearing on A.B. 503.

ASSEMBLY BILL 503: Makes appropriation to Department of Business and Industry for replacement of certain computers in Office of Labor Commissioner. (BDR S-1387)

William J. Maier, Administrative Services Officer, Department of Business and Industry, stated A.B. 503 is a request for funding for the Office of Labor Commissioner to replace 10 computers.

Senator Raggio inquired whether the amount included in the first reprint of A.B. 503 has been adjusted to reflect the current pricing for computer hardware. Mr. Maier responded affirmatively.

Senator Raggio closed the hearing on A.B. 503. He opened the hearing on A.B. 504.

ASSEMBLY BILL 504: Makes appropriation to State Department of Conservation and Natural Resources for State of Nevada’s share for carrying out Truckee River Operating Agreement. (BDR S-1389)

R. Michael Turnipseed, P.E., Director, State Department of Conservation and Natural Resources, said United States Congress passed the Truckee-Carson-Pyramid Lake Water Rights Settlement Act of 1990, Public Law 101-618, to divide the waters of the Truckee River, Carson River, and Lake Tahoe between the states of California and Nevada. He said, “There was a monetary settlement with the Fallon tribe. There was a settlement of a half a dozen different lawsuits, one of which was resolved with the water quality agreement.” He stated this bill provides for the Truckee River Operating Agreement to be completed, which is the final step in this process.

Mr. Turnipseed explained that Nevada, California, the Pyramid Lake Tribe, and Sierra Pacific Power Company have been negotiating an operating agreement wherein everybody’s water would be accounted for. He said the agreement involves many exchanges between reservoirs and storage and reduction of flow rates. He continued:

At any rate there is water equality credit water, Newlands Project’s credit water, California credit water, Fernley credit water, the Tribe’s fish water, the recreational water for California, in-stream flows, and this whole agreement is coming to closure now. There is a couple of issues yet to be resolved. However, the administrator of the operating agreement wants it done. It would be about two years or one and a half years to complete the environmental impact statement on behalf of the federal government and the environmental report by the state of California under their environmental laws. That will take about one and a half to two years. But, we need to have a water accounting program that will account for everybody’s water, where it is at any particular moment and in what reservoir, who is releasing water, and who is storing water. And this money is to pay Nevada’s portion, one-fifth, of this administrator’s salary and operating to come up with a computer program. He is working with some people at Colorado State University that have done similar things on bureau projects, basically a water accounting program.

Senator Raggio inquired whether the $70,000 appropriation is adequate for the intended purpose.

Mr. Turnipseed responded that $70,000 would not cover the costs completely. He explained that the original bill requested $80,000. He pointed out there is an additional bill that requests $35,000 for the first year. He added that the department believes the costs might be slightly higher in the second year.

Senator Raggio asked why the appropriation was reduced from $80,000 to $70,000. Mr. Turnipseed responded he was not sure.

Senator Raggio inquired what other parties share in the expense of the agreement. Mr. Turnipseed replied that California, Sierra Pacific Power Company, the Pyramid Lake Paiute Tribe, Nevada, and the United States each pay one-fifth of the costs.

Senator Raggio stated it is important to ensure the appropriation is adequate to cover one-fifth of the total costs that Nevada would be responsible to pay. He asked Mr. Turnipseed what he estimates the one-fifth of the total costs to be.

Mr. Turnipseed commented it would be approximately $35,000 for the first year and $40,000 to $45,000 for the second year.

Senator Raggio noted that is how the original amount was calculated. Mr. Turnipseed responded affirmatively.

Senator Raggio commented an $80,000 appropriation with a provision that would require a reversion of any unused funds appears reasonable. Mr. Turnipseed agreed.

Senator Raggio closed the hearing on A.B. 504, and he opened the hearing on A.B. 506.

ASSEMBLY BILL 506: Makes appropriation to State Department of Conservation and Natural Resources for maintenance projects at state parks. (BDR S‑1391)

Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources, explained this $593,928 appropriation is requested for a myriad of maintenance projects at state parks including electrical and plumbing repairs, painting, and landscape maintenance. He noted $122,675 of room tax funding would augment the requested appropriation to complete the maintenance projects.

Senator Raggio directed attention to the handout provided by Mr. Weaver, which is a list of the maintenance projects provided for in this appropriation (Exhibit C). He asked whether staff had reviewed the project breakdown. Mr. Ghiggeri indicated staff had reviewed the project breakdown.

Senator Raggio noted the projects were well documented in the handout, and he asked whether the committee members have any questions regarding the projects. There were no questions posed by the committee.

Senator Raggio closed the hearing on A.B. 506, and he opened the hearing on A.B. 514.

ASSEMBLY BILL 514: Makes appropriation to Interim Finance Committee for allocation to Department of Human Resources for electronic application process for Nevada Check Up program and Medicaid assistance. (BDR S‑1409)

Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy, Department of Human Resources, said he believes the electronic application process provided for in A.B. 514 will enhance the ability of recipients and advocates to take advantage of Medicaid eligibility as well as Nevada Check Up eligibility. He stated his division is currently developing a single form for Nevada Check Up and Medicaid, and it would be helpful to present this form online to allow advocates and recipients to apply online for these programs. He pointed out the Welfare Division would be responsible for implementation of this project, so he suggested Michael J. Willden, Administrator, Welfare Division, Department of Human Resources address the committee.

Mr. Willden directed attention to a handout he provided, which is an “Expenditure Analysis and Revenue Stream Calculation” for the electronic application processing one-time appropriation request (Exhibit D). He pointed out the Assembly amended the bill to provide the appropriation to IFC for allocation to Department of Human Resources for this project.

Senator Raggio questioned whether the amendment would be a problem. Mr. Willden responded the amendment would not be a problem.

Mr. Willden stated the $500,000 General Fund appropriation would be matched with $981,480 of federal funds creating a total project authority of $1,481,480. He noted Mr. Duarte had explained the Welfare Division would be doing an electronic application for Medicaid and Nevada Check Up, but he proposes the project include web-based technology for Food Stamps and Temporary Assistance for Needy Families (TANF). He clarified the expanded project would enable applicants to complete an application online for any of the department’s programs to be processed through web-based technology and interfaced to various eligibility systems. Eligibility determinations would be made online quickly, he added.

Mr. Willden explained Exhibit D includes a fiscal note and a simple illustration of the project structure. He said the process would begin by approaching IFC after July 1, 2001, for the authority to then initiate the request for proposals (RFP) phase to locate an appropriate vendor. He commented that the Welfare Division would then revisit IFC to secure the remaining funds to implement the rest of the project.

Senator Raggio commented Exhibit D indicates federal funding would provide approximately two-thirds of the required funding. He noted the funding would benefit the following programs: food stamps, TANF, Nevada Check Up, and Title XIX (Medicaid). Mr. Willden responded affirmatively.

Senator Raggio questioned whether the handout was correct in indicating federal funds would provide 100 percent of the necessary funding for the TANF program. Mr. Willden replied the handout is correct.

Senator Raggio closed the hearing on A.B. 514, and he opened the hearing on A.B. 516.

ASSEMBLY BILL 516: Makes appropriation to Department of Human Resources for Medicaid Management Information System. (BDR S-1412)

Mr. Duarte stated A.B. 516 requests a $2,090,840 appropriation to implement the Medicaid Management Information System (MMIS). He provided a written copy of his statement to the committee (Exhibit E). He indicated the appropriation is a state match for $17,609,659 in federal funds during the 2001 to 2003 biennium.

Senator Raggio noted the federal funds provide a significant portion of the total costs. He inquired about the total cost of the project and whether the costs were for the complete project or individual phases.

Mr. Duarte responded the $2,090,840 would allow the Department of Human Resources to implement the majority of the project during the next biennium.

Senator Raggio questioned the amount of the project that would be federally funded.

Mr. Duarte responded that 90 percent of the costs for design, development, and implementation would be provided by federal funds. He noted federal funds would pay for 75 percent of the cost of operation. He said the total one-time cost of the project presented to the 1999 Legislature, $25,621,000 is still an accurate figure. He said the balance of funds needed to complete the project would be requested from the 2003 Legislature. He said, “We have testified many times on the value of this particular system. I personally believe it is the most important project for the Medicaid program in this state.” He stated the project would enhance services to recipients and providers.

Senator Raggio inquired how the program would specifically enhance services.

Mr. Duarte stated the program would provide numerous benefits, including improved claims payment processing time, which would enhance payment to providers thereby improving the state’s Medicaid program’s ability to recruit and retain providers. He said the MMIS would provide Nevada’s Medicaid program information regarding utilization of services that would enable the program to set policy and improve quality of services to recipients while reducing costs to the taxpayer. He added the MMIS would allow providers to submit online electronic claims easily. He noted Nevada currently does not have a certified Medicaid Management Information System; therefore, the federal government reimburses operational costs at 50 percent. He said this system would allow Nevada to receive 75 percent funding for operation costs. He indicated the state hired MAXIMUS to complete the requirements documentation necessary for development of an RFP. He indicated MAXIMUS and state staff visited numerous states to review their systems.

Senator Raggio asked the amount of the MAXIMUS contract, and whether it is worthwhile for the state.

Mr. Duarte replied the MAXIMUS contract is approximately $1.6 million, and he stated it has been very worthwhile. He explained MAXIMUS provided highly competent staff, which enabled the department to document the system’s needs for the state of Nevada, so the department “will have a more accurate RFP, reducing risk of procurement in the future.”

Senator Raggio closed the hearing on A.B. 516. He opened the hearing on S.B. 292 to accommodate Senator Maurice E. Washington, Washoe County Senatorial District Number 2.

SENATE BILL 292: Revises provisions governing charter schools and authorizes programs of distance education. (BDR 34-382)

Senator Raggio stated S.B. 292 was previously heard by this committee on May 21, 2001.

Senator Washington provided proposed amendments to the bill (Exhibit F).

H. Pepper Sturm, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau, addressed the major provisions included in the handout (Exhibit F). He explained the amendment includes references to the sections of the different bills from which the concepts are derived. He stated this is a consensus agreement among all the interested parties. He said the first of seven authorizing provisions states the charter school statutes do not authorize an existing public school, home school, or other program of home study to convert to a charter school, but it does not prohibit conversion of a private school. He indicated the second provision is to retain the current caps on the number of charter schools until July 2006.

Senator Raggio questioned how many charter schools would be allowed under the proposed caps.

Mr. Sturm said he believes there is no limitation on the number of charter schools for at-risk children.

Senator Washington, Mr. Sturm, and Susan E. Scholley, Senior Research Analyst, Research Division, Legislative Counsel Bureau, stated they believe the cap provides for two charter schools in Washoe County, six charter schools in Clark County, and one charter school “each” for rural Nevada.

Senator Raggio inquired how many charter schools are currently in existence. Senator Washington responded there are nine schools currently in existence, and four additional schools have applied.

Senator Raggio inquired whether the current cap allows for the schools that have applications pending. Senator Washington responded affirmatively.

Senator Raggio stated it appears the proposed amendment would not allow additional charter schools, and he questioned whether that is correct.

Senator Washington replied only charter schools for at-risk children would be permitted. He pointed out there is only one charter school in Washoe County that is not for at-risk children, and the rest of the charter schools are for at-risk children.

Senator Raggio inquired who agreed to these amendments.

Senator Washington replied the following parties had agreed to these amendments: the school districts, the teachers’ union, stakeholders, operators of charter schools, and the State Board of Education.

Mr. Sturm pointed out the “sunset” on caps has been extended from July 2003 to July 2006 under the new amendments.

Senator Raggio questioned, “If these are successful, why leave the cap on another four years?” He asked, “Is that the only way this could be compromised?”

Senator Washington responded affirmatively that the caps are a compromise.

Mr. Sturm stated another provision in the amendments is to allow the State Board of Education to be an alternate sponsor for charter schools, in the event a school district denies an application.

Senator Raggio commented the committee understood the reasoning for that amendment is that it is required to secure federal funding.

Mr. Sturm addressed the governance provisions of the amendment. He indicated the first provision states a charter school shall not operate for profit. The second provision, he said, requires a majority of the persons who serve on the committee to form a charter school to be Nevada residents at the time the application to form a charter school is submitted to the department. He stated the third provision requires “a governing body member to sign an affidavit affirming that he/she has not been convicted of a felony or a crime involving moral turpitude.”

Senator Raggio inquired whether public school teachers are required to sign affidavits affirming they have not been convicted of a felony or a crime involving moral turpitude.

Mr. Sturm clarified the amendment concerns the governing body, not the teachers. He said the parallel body would be the Board of Trustees of each individual school district.

Senator Raggio voiced concern whether anybody who has been convicted of a felony or a crime involving moral turpitude is going to care whether he or she signs an affidavit.

Mr. Sturm addressed the personnel provisions of the amendment. He indicated the first provision provides that teachers on leave of absence are covered by the existing collective bargaining agreement for the first three years of their employment by the charter school and would be subject to the collective bargaining provisions of Chapter 288 of Nevada Revised Statutes after their third year of employment. He pointed out the teachers would no longer be covered by the existing collective bargaining agreement after their third year of employment by the charter school. He noted a new provision would provide “charter school employees (other than teachers on a leave of absence) are not covered by any existing collective bargaining agreements, but are subject to the collective bargaining provisions of Chapter 288.” He said the final personnel provision in Exhibit F adds charter school employees to the provisions that exempt post-probationary employees from serving on probation when they change employment from charter school to public school or public school to charter school.

Mr. Sturm discussed the operational provisions of the amendment. He stated any charter school with established graduation requirements less than those required by the school district in which the charter school is located would be required to issue a diploma clearly designated as a “charter school” diploma.

Senator Raggio inquired whether the charter school graduates are required to pass the high school proficiency examination. Mr. Sturm responded affirmatively.

Mr. Sturm continued addressing the operational provisions of the amendment. He noted the amendment would allow a charter school to amend its charter to add a grade within its current school designation such as elementary, junior high, or high school, but would require a new application if the charter school is proposing to add a grade outside of its current school designation. He stated the amendment requires charter schools to comply with distance education requirements.

Mr. Sturm stated the fiscal provisions of the amendment include the deletion of the $100,000 appropriation from the bill. He pointed out the amendment provides for a $10,000 appropriation to Legislative Bureau of Educational Accountability and Program Evaluation for an evaluation of no more than eight charter schools. Another fiscal provision he mentioned is to require any public monies received by a charter school to be deposited in a bank or other financial institution in the state. He said there is also a provision for a tax exemption for real or personal property leased or rented by a charter school for educational purposes. He noted that, at the request of the “school board association,” there is a provision allowing the charter school sponsor to request reimbursement from the charter school for administrative costs.

Mr. Sturm indicated that both S.B. 292 and “the school funding bill” would provide authority for charter schools to access the special education program units. Senator Raggio clarified the distributive school account would provide that authority.

Mr. Sturm stated that the language of the bill currently indicates the special education program units are distributed to school districts, and he said he believes there is a proposal that charter schools will be able to access that funding directly.

Senator Raggio questioned whether all of the school districts approved the amendments. He said the committee had the understanding that Washoe County had not approved the additional charter school slot. He asked Senator Washington to verify the Washoe County School District had approved the proposed amendments.

Senator Washington explained Washoe County School District had approved the proposed amendments on the previous day, but he would verify their approval again at Senator Raggio’s request.

Susan E. Scholley, Senior Research Analyst, Research Division, Legislative Counsel Bureau, addressed the four distance education provisions included in Exhibit F, which differ from S.B. 292. She pointed out a new provision would prohibit “home school or private school students from taking distance education courses from public schools, including charter schools.”

Senator Raggio questioned the reasoning behind that provision.

Ms. Scholley responded that distance education courses are available through commercial vendors, so there is no need to provide that service through the public education system.

Senator O’Donnell requested further clarification of the provision concerning distance education.

Senator Washington responded that home school students can access distance education through commercial vendors, and public school students can access distance education through any school district in Nevada that offers that course of study.

Ms. Scholley clarified the prohibition only applies to home school or private school students taking distance education courses through the public schools.

Senator O’Donnell commented, “But their parents pay taxes. Private schools all over the state subsidize the public schools.” He referenced an incident in Chicago wherein a Catholic Bishop closed all of the private Catholic schools because the public schools would not allow the private school students to use the public school buses. He said the massive influx of private Catholic school students created chaos in the public school system resulting in the public school system allowing the private school students to use the buses. He stated, “I don’t understand the mentality of cutting off the private school students from public school access,” because they are entitled to access if they desire it.

Senator Washington responded that he agrees with Senator O’Donnell, but this was one of many compromises made among the parties involved in order to get the bill processed.

Senator Raggio commented, “Legislation is the art of compromise.”

Senator O’Donnell discussed his own high school experience. He explained he attended and graduated from Bishop Gorman High School, which is a private Catholic high school in Las Vegas. He noted he learned Fortran programming on his own time by using a computer at Valley High School because Bishop Gorman High School did not have a computer at that time. He said that opportunity for him to access the computer at the public school enabled him to be where he is today.

Senator Coffin noted Senator Washington and his colleagues have engaged in a great deal of diplomacy to amend the bill to meet the approval of all interested parties.

Ms. Scholley re-addressed the distance education provisions. She said the full-time distance education student would be reimbursed at the per-pupil apportionment amount for the school district providing the distance education. She noted there is a provision to add specific minimum requirements for teacher contact time and compliance with minimum requirements for number of minutes of instruction, which is currently included in A.B. 127.

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)

Ms. Scholley concluded her comments by indicating the Department of Education would review and approve distance education programs according to the amendment.

Senator Raggio indicated the committee should review the proposed amendments bearing in mind many compromises were involved in the process. He inquired when the amendment would be drafted.

Senator Washington responded the amendment is currently being drafted, and it should be delivered to the committee by the end of the day.

Senator Raggio closed the hearing on S.B. 292, and opened the hearing on A.B. 115.

ASSEMBLY BILL 115: Revises provisions relating to certain accounts of state department of agriculture. (BDR 50-620)

Don Hataway, Deputy Director, Budget Division, Department of Administration, stated that when the Senate Committee on Finance closed the State Department of Agriculture’s budgets, the apiary inspection program was consolidated into the plant industry budget account 101-4540. He said A.B. 115 provides for the implementation of that consolidation. He stated that at the end of the first reprint of A.B. 115 there is a section that has been repealed regarding the apiary inspection account. He said lines seven to nine provide the necessary language to include the functions of the former apiary inspection account into the plant industry program.

Senator Raggio questioned whether the bill comports with the committee’s actions on the relevant budgets. Mr. Hataway assured him that it did.

Senator Raggio closed the hearing on A.B. 115, and opened the hearing on A.B. 520.

ASSEMBLY BILL 520: Makes appropriation to Governor’s Advisory Council on Education Relating to the Holocaust for continuation of its educational programs. (BDR S-1434)

Mr. Hataway said he believes the Governor’s Advisory Council on Education Relating to the Holocaust has been in existence since the early 1990s. He said one-time appropriations have been provided to the council on a regular basis throughout its existence. He said he is unable to provide a specific breakdown of the intended use of this allocation, but he understands it will be used for speakers and exhibits to be brought into the school system for educational purposes related to the Holocaust.

Senator Raggio suggested the committee include the language requiring reporting of the use of funds to the next Legislature and reversion of any unused funds. Mr. Hataway agreed.

Mr. Hataway stated there is concern regarding the provision in the amendment that would provide the funds directly to the Department of Education for distribution to the council, whereas the original bill allocated the funds directly to the council. He pointed out the council has a separate budget account. He said the primary problem with the funds going directly to the Department of Education is the department then must collect indirect costs from the funds. He suggested the bill be amended to provide the funds directly to the Department of Administration, so the Budget Division could distribute the funds without losing any funds to indirect costs.

Senator Raggio indicated the committee had no objection to amending the bill to provide the funds directly to the Department of Administration for allocation to the council. He closed the hearing on A.B. 520 and opened the hearing on A.B. 522.

ASSEMBLY BILL 522: Makes appropriation to Buildings and Grounds Division of Department of Administration for moving expenses of various agencies to and from Grant Sawyer State Office Building. (BDR S-1356)

Cindy Edwards, Property Manager, Buildings and Grounds Division, Department of Administration, explained her division is requesting the $220,400 appropriation for the moving expenses associated with moving Division of Water Resources and Division of Environmental Protection from the Grant Sawyer State Office Building to leased space. She noted this move would accommodate the additional space needs of the Office of the Secretary of State, Division of Unclaimed Property, “gaming,” and the Office of the State Controller. The costs to remodel the vacated area are included in the appropriation request, she added.

Senator Raggio inquired whether the language of the bill should be amended to include the use of funds for remodeling. Mr. Ghiggeri indicated the bill should be amended to allow for the use of funds for remodeling.

Ms. Edwards stated $84,000 of the appropriation is designated for remodeling, and the remaining funds are for the moving expenses.

Senator Raggio indicated the bill would be amended to provide for the use of funds for remodeling. He closed the hearing on A.B. 522, and he opened the hearing on A.B. 523.

ASSEMBLY BILL 523: Makes appropriations to Motor Pool Division of Department of Administration and Investigation Division of Department of Motor Vehicles and Public Safety for purchase of additional vehicles. (BDR S-1357)

Frank Revell, Chief, State Motor Pool, Department of Administration, stated the bill provides the State Motor Pool $1,749,874 for the purchase of additional vehicles for various state agencies. He noted the Assembly amended the bill by deleting 15 vehicles from the State Motor Pool budget and moved them to the budget for the Investigation Division of the Department of Motor Vehicles and Public Safety.

Senator Raggio clarified the bill under discussion is the first reprint of A.B. 523. He stated Section one of the bill provides $1,749,874 to the State Motor Pool for the purchase of vehicles for various state agencies, and Section two provides $274,012 to the Investigation Division of the Department of Motor Vehicles and Public Safety for purchase of vehicles. He also noted Section three provides $22,341 from the State Highway Fund to the Investigation Division of the Department of Motor Vehicles and Public Safety for the purchase of a motor vehicle. He inquired about the reasoning behind splitting the appropriation into three sections.

Mr. Hataway explained the Investigation Division of the Department of Motor Vehicles and Public Safety generally operates their own vehicles, so it was decided their vehicles should be accounted for separately. He said Section 2 and Section 3 of the bill are split to allow one of the vehicles to be purchased with State Highway Funds and the remaining vehicles for the Investigation Division to be purchased with General Funds.

Senator Raggio inquired whether staff had any additional comments.

Mr. Ghiggeri stated Mr. Hataway’s explanation is correct. He said at the time the budget for the Investigation Division was closed, funding remained in the budget to lease the cars from the State Motor Pool. He said that money has now been eliminated from their budget and funding is proposed for them to purchase the vehicles directly. He said operating funds have been added to their budget, resulting in minor savings.

Senator O’Donnell questioned whether the proposed new vehicles would include any hybrid vehicles for the Las Vegas area.

Mr. Revell responded the State Motor Pool currently includes some hybrid vehicles, but he does not anticipate using hybrid vehicles in the Las Vegas area. He said the hybrid vehicles currently do not meet the federal standards established by the Energy Policy Act of 1992 (EPACT), because it runs on gasoline. He stated the State Motor Pool is working with the federal government to allow the use of the hybrid vehicles because it is a very low-emission vehicle. He said the State Motor Pool is satisfying the alternative fuel mandate in the Las Vegas valley with the use of other alternative fuels because the hybrid vehicle is currently unacceptable according to the federal regulations.

Senator O’Donnell asked whether the State Motor Pool is using natural gas in the Las Vegas area.

Mr. Revell responded the State Motor Pool is using natural gas and exploring the possibility of using biodiesel.

Senator O’Donnell said he hopes the Highway Patrol Division would not be expected to use any of the hybrid vehicles for chases. Mr. Revell commented he thinks the hybrid vehicles are too small for use by the Highway Patrol Division.

Senator Coffin asked whether Mr. Revell has been following the discussion concerning the location of the State Motor Pool in Las Vegas. He said the committee has learned the University of Nevada, Las Vegas, (UNLV) has the first right of refusal on the land across the street from UNLV where an old elementary school is currently located. He noted the elementary school could be demolished to allow new construction at the site. He said there is a large playground at the school that could accommodate the State Motor Pool. He asked whether Mr. Revell had discussed this possibility with UNLV.

Mr. Revell replied that he had discussed the issue with UNLV. He said the particular plot of land Senator Coffin is referring to would require a lengthy approval process because it is zoned incorrectly for the State Motor Pool’s use. He noted it took the elementary school two years to receive approval for a portable classroom at that site. He also pointed out the necessary utility lines are not available at that location.

Senator Coffin commented the property is owned by Clark County Airport.

Mr. Revell agreed the property is owned by the county, and he pointed out the county has indicated reluctance to develop the property at this point.

Senator Coffin stated Randall H. Walker, Director, Clark County Airport, has indicated he has no objections to the State Motor Pool using that property.

Mr. Revell stated Mr. Walker has not objected to the use of the property by the State Motor Pool, but UNLV and the State Public Works Board consider the county’s approval process to be too time consuming in view of the State Motor Pool’s time constraints. He pointed out the State Motor Pool would be out of its current location by November 1, 2002.

Senator Coffin said Mr. Revell’s statement differs from Mr. Walker’s statement regarding the date the property would need to be vacated. He said Mr. Walker stated the property would not need to be vacated until the last quarter of 2003 or the first quarter of 2004.

Mr. Revell stated he has a letter from the Clark County Airport Authority that clearly states the premises must be vacated by November 1, 2002 and that is including a six-month extension of their lease.

Senator Coffin requested a copy of the letter. Mr. Revell agreed to provide a copy of the letter to Senator Coffin later the same day.

Senator Coffin said he would like to discuss the letter with the Clark County Airport Authority to determine whether their management might consider extending the time frame the State Motor Pool could use the site.

Senator Raggio closed the hearing on A.B. 523 and opened the hearing on A.B. 525.

ASSEMBLY BILL 525: Makes appropriation to Supreme Court of Nevada for security system upgrades, system-wide website and communications infrastructure, and new and replacement equipment. (BDR S-1359)

Ron Titus, Deputy Court Administrator and Deputy Director of the Administrative Office of the Courts, Office of Court Administrator, Supreme Court, pointed out the appropriation request in A.B. 525 has been reduced to $395,028 at the request of the Assembly Committee on Ways and Means. He provided a handout of the breakdown of the revised one-shot appropriation request (Exhibit G).

Senator Raggio requested further discussion of the purpose of the appropriation.

Mr. Titus stated the appropriation includes funding to replace older black and white security cameras with color cameras.

Senator Raggio inquired whether the appropriation is for the Supreme Court building in Carson City or also for the court facility in Las Vegas.

Judy Holt, Manager/Budget and Finance, Office of Court Administrator, Supreme Court, explained the appropriation is a “carry over” from last session for the Supreme Court building in Carson City. She said the camera system currently used by the Capitol Police is considered insufficient and has been recommended for upgrade to a color system. She pointed out her staff worked with the media services staff of the Legislative Counsel Bureau to develop this proposal.

Senator O’Donnell asked whether it would be possible to utilize court assessment funds in lieu of General Funds for these improvements.

Ms. Holt responded the building is owned by the State and the Judicial Branch is merely a tenant, so it is the responsibility of Buildings and Grounds Division to improve the building as necessary. She explained the Supreme Court budget is funded nearly 50 percent by court assessments, and her office believes the inclusion of this request in the Supreme Court budget on behalf of the Buildings and Grounds Division is certainly fair.

Senator Raggio noted the revisions to the “one-shot” appropriation request are reflected in the first reprint of A.B. 525. He closed the hearing on A.B. 525 and opened the hearing on A.B. 526.

ASSEMBLY BILL 526: Makes appropriation to Department of Taxation for purchase of new and replacement equipment. (BDR S-1360)

P. Forrest Thorne, Deputy Executive Director, Department of Taxation, stated A.B. 526 provides a one-time appropriation in the amount of $454,173 for the purchase of new and replacement equipment. He noted approximately $425,000 of the appropriation is designated for replacement computer equipment.

Senator Raggio pointed out the appropriation request had been reduced by $100,000 from the original request. He asked whether the revised amount is adequate for the intended purpose. Mr. Thorne indicated the revised amount is sufficient.

Senator Raggio stated computer hardware accounts for slightly over $300,000 and computer software accounts for $133,000 of the appropriation. He noted this would provide upgrades to 83 desktop computers and 46 laptop computers in addition to printers. He said the laptop computers are used by auditors in the field.

Mr. Thorne indicated Senator Raggio is correct in his understanding of the proposed use of funds.

Senator Raggio closed the hearing on A.B. 526.

SENATE BILL 582: Revises provisions governing certain appropriations for public lands and China Spring Youth Camp. (BDR S-1566)

Senator Raggio indicated he would accept a motion to process S.B. 582 if there were no objections from the committee members.

SENATOR JACOBSEN MOVED TO DO PASS S.B. 582.

SENATOR RAWSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

Senator Raggio indicated S.B. 583 would not be processed at this time, and he proceeded to address the bills that were discussed earlier during the meeting.

ASSEMBLY BILL 115: Revises provisions relating to certain accounts of state department of agriculture. (BDR 50-620)

SENATOR O’DONNELL MOVED TO DO PASS A.B. 115.

SENATOR RAWSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

ASSEMBLY BILL 503: Makes appropriation to Department of Business and Industry for replacement of certain computers in Office of Labor Commissioner. (BDR S-1387)

SENATOR O’DONNELL MOVED TO DO PASS A.B. 503.

SENATOR RAWSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

ASSEMBLY BILL 504: Makes appropriation to State Department of Conservation and Natural Resources for State of Nevada’s share for carrying out Truckee River Operating Agreement. (BDR S-1389)

Senator Raggio stated the testimony provided earlier during the meeting indicated an $80,000 appropriation is necessary in lieu of the $70,000 recommended by the Assembly. He indicated action on the bill would be postponed until staff is able to determine the reason the Assembly amended the bill to decrease the original amount by $10,000 to $70,000. He suggested an amendment might be necessary depending on the determinations made by staff.

ASSEMBLY BILL 506: Makes appropriation to State Department of Conservation and Natural Resources for maintenance projects at state parks. (BDR S‑1391)

SENATOR O’DONNELL MOVED TO DO PASS A.B. 506.

SENATOR JACOBSEN SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

SENATOR O’DONNELL MOVED TO DO PASS A.B. 514.

SENATOR MATHEWS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

ASSEMBLY BILL 516: Makes appropriation to Department of Human Resources for Medicaid Management Information System. (BDR S-1412)

SENATOR O’DONNELL MOVED TO DO PASS A.B. 516.

SENATOR RAWSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

ASSEMBLY BILL 520: Makes appropriation to Governor’s Advisory Council on Education Relating to the Holocaust for continuation of its educational programs. (BDR S-1434)

Senator Raggio recommended A.B. 520 be amended to include language requiring the reporting of the use of funds to the next Legislature and the funds be appropriated to the Department of Administration for allocation to the Governor’s Advisory Council on Education Relating to the Holocaust.

SENATOR O’DONNELL MOVED TO AMEND A.B. 520 TO INCLUDE LANGUAGE REQUIRING THE REPORTING OF THE USE OF FUNDS TO THE 2003 LEGISLATURE AND TO APPROPRIATE THE FUNDS TO THE DEPARTMENT OF ADMINISTRATION FOR ALLOCATION TO THE GOVERNOR’S ADVISORY COUNCIL ON EDUCATION RELATING TO THE HOLOCAUST AND TO DO PASS AS AMENDED.

SENATOR RAWSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

Senator Raggio indicated A.B. 522 should be amended to authorize the use of the appropriated funds for remodeling in addition to the moving expenses.

SENATOR O’DONNELL MOVED TO AMEND A.B. 522 TO INCLUDE LANGUAGE AUTHORIZING THE USE OF THE APPROPRIATED FUNDS FOR REMODELING IN ADDITION TO THE MOVING EXPENSES AND TO DO PASS AS AMENDED.

SENATOR MATHEWS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

SENATOR O’DONNELL MOVED TO DO PASS A.B. 523.

SENATOR JACOBSEN SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

SENATOR O’DONNELL MOVED TO DO PASS A.B. 525.

SENATOR JACOBSEN SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

ASSEMBLY BILL 526: Makes appropriation to Department of Taxation for purchase of new and replacement equipment. (BDR S-1360)

SENATOR O’DONNELL MOVED TO DO PASS A.B. 526.

SENATOR RAWSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

Mr. Ghiggeri directed attention to S.B. 580.

SENATE BILL 580: Makes supplemental appropriation to Department of Prisons for unanticipated costs associated with utility budget of Southern Desert Correctional Center. (BDR S-1563)

Senator Raggio indicated S.B. 580 was heard by the committee on May 29, 2001.

Mr. Ghiggeri stated the bill was heard by the committee earlier in the week, but no action was taken at that time so that staff could perform additional research. He provided a memorandum dated May 30, 2001, from Darrel Rexwinkel, Administrative Services Officer IV, Department of Prisons, that was directed to Carla Watson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Exhibit H). He pointed out the memorandum indicates S.B. 580 is no longer necessary as sufficient authority has been provided in budget account 101‑3738 for the Southern Desert Correctional Center. He stated that, pursuant to the direction of the Department of Prisons, the bill could be indefinitely postponed.

Senator Raggio asked whether Mr. Hataway would like to comment.

Mr. Hataway stated at the beginning of session there was a $1,035,000 budget deficit, which has now been reduced to what the Budget Division believes is $184,000, the amount requested in this bill. He extended an apology to the Legal Division for their efforts in drafting S.B. 580 because the bill is no longer necessary. He said the Department of Prisons believes the $184,000 appropriation is no longer necessary.

SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 580.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

ASSEMBLY BILL 123: Revises provisions relating to health insurance provided by public employees’ benefits program. (BDR 57-603)

Senator Raggio opened the hearing on A.B. 123. He indicated the committee had previously discussed a Letter of Intent regarding this bill.

Bob Gagnier, Lobbyist, State of Nevada Employees’ Association (SNEA/AFSCME), accompanied by James T. Richardson, Lobbyist, Nevada Faculty Alliance, and David Smith, Acting Chairman, Board of the Public Employees’ Benefits Program, addressed the committee. He stated he recommends A.B. 123 be amended to provide an effective date of January 1, 2002 and that a Letter of Intent be included.

Mr. Richardson commented that Mr. Smith would like to address the issue of the Letter of Intent.

Senator Raggio asked whether Mr. Smith agreed with the proposed amendment for the first reprint of A.B. 123.

Mr. Smith responded he believes the proposed amendment would help neutralize concerns regarding costs of the program.

Senator Raggio directed attention to the proposed Letter of Intent (Exhibit I) provided by Mr. Gagnier, Mr. Richardson, and Mr. Smith.

Mr. Richardson articulated he and his colleagues have worked on the language in an effort to avoid any cost impact. Basically the Letter of Intent calls on the Public Employees’ Benefits Program (PEBP) to produce information. He said he believes Mr. Smith has attended today’s committee meeting to assure the board’s compliance with the Letter of Intent. He said in the past it has been very difficult to sufficiently access information from the PEBP, and this Letter of Intent addresses that problem, in addition to other concerns regarding rate structure. He said he believes tremendous progress has been made during the past two years by the PEBP.

Senator Raggio asked whether Mr. Smith is familiar with the contents of the proposed Letter of Intent (Exhibit I). He explained it deletes the provision that PEBP must provide a choice of plans and directs the PEBP to make reasonable efforts to provide a choice of plans offering full coverage to all participants, whenever economically feasible. He said the Letter of Intent also directs the PEBP to provide to each participant by May 1 of each year specific information on the actual cost of premiums. He commented he believes this information is pertinent and should be readily available to participants. He questioned whether the PEBP agrees with the direction to provide this information.

Mr. Smith responded he believes it is the best solution to address all of the concerns raised by all of the parties involved.

Senator Raggio noted the Letter of Intent also includes a directive for the PEBP to make the insured’s portion of health insurance rates uniform throughout.

Mr. Smith stated his agreement with the directive.

Senator Raggio asked whether Mr. Smith had any objection to any part of the Letter of Intent.

Mr. Smith replied that the PEBP has no objection to the Letter of Intent.

Senator Coffin asked Mr. Smith to discuss his background, specifically related to insurance and benefits, because the committee has never met Mr. Smith before today’s hearing.

Mr. Smith commented he does not have any background in insurance. He explained his involvement with the PEBP evolved from his own problems dealing with the PEBP several years ago. He stated he had testified before this committee during the last session regarding some of the problems he had experienced. He said it is important to understand the plan, but it is also important to recognize this plan belongs to the employees of the State of Nevada.

Senator Coffin questioned who the new Chairman of the Board of the Public Employees’ Benefits Program will be.

Mr. Smith responded the new Chairman of the Board of the Public Employees’ Benefits Program will be Steve Ashley. He explained Mr. Ashley is the current benefits manager for the State of Kansas Health Benefits Plan, and Mr. Ashley has indicated he would commence his new position in Nevada on July 1, 2001.

Senator Coffin asked Mr. Smith to provide copies of Mr. Ashley’s vita to all the members of the committee, so they are able to ascertain Mr. Ashley has sufficient relevant experience.

Senator O’Donnell commented the PEBP budget has been very difficult, and he said he hopes the PEBP is embarking on a new and improved course of action. He noted full disclosure is very important, and he said he hopes the PEBP is committed to working with LCB staff to avoid some of the past problems. He thanked Georgia J. Rohrs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, for her efforts regarding this budget.

Senator Raggio stated he would abstain from voting on A.B. 123 because he is the Director of Sierra Health Services, which provides managed care. He said he is unaware whether this bill would directly affect Sierra Health Services, but he prefers to abstain from the vote nonetheless.

SENATOR RAWSON MOVED TO AMEND A.B. 123 TO PROVIDE AN EFFECTIVE DATE OF JANUARY 1, 2002 AND TO INCLUDE THE LETTER OF INTENT (EXHIBIT I) AND TO DO PASS AS AMENDED.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR RAGGIO ABSTAINED FROM THE VOTE.)

*****

The meeting was adjourned at 9:35 a.m.

RESPECTFULLY SUBMITTED:

Jennifer Ruedy

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE: