MINUTES OF THE
SENATE Committee on Finance
Seventy-First Session
June 3, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:27 a.m., on Sunday, June 3, 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:
Assemblyman David R. Parks, Clark County Assembly District, No. 41
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Debra Petrelli, Committee Secretary
OTHERS PRESENT:
Alexander Haartz, Administrative Services Officer III, Health Division, Department of Human Resources
John P. Comeaux, Director, Department of Administration
Georgia J. Rohrs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau
ASSEMBLY BILL (A.B.) 515: Makes appropriation to Department of Human Resources for assistance in operation of HIV/AIDS clinics in Reno and Las Vegas. (BDR S-1411)
Alexander Haartz, Administrative Services Officer III, Health Division, Department of Human Resources (DHR), stated that A.B. 515, in its first reprint, provides an appropriation to DHR in the amount of $1 million. He said the original bill was for an appropriation of $2 million. He added that the bill appropriates $1 million for allocation to two principal providers of Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome (HIV/AIDS) services in the state. Mr. Haartz remarked that approximately $500,000 would go to the Northern Nevada HIV Outpatient Program, Education, and Services Clinic (HOPES) Clinic, located in Reno, which serves the northern region of the state.
Also, for the purpose of providing HIV/AIDS services, Mr. Haartz commented that approximately $500,000 would be made available to the University Medical Clinic (UMC) Wellness Center, and as part of its satellite, the Enterprise Health Care Center.
Mr. Haartz noted that A.B. 515 requires using the funds for capital and infrastructure purposes. He said the reason for this is the crowded conditions in the current clinic space, especially in the North. He said this bill would provide assistance on a one-time basis for the construction of a new facility.
Senator Mathews asked why the funding is to be divided equally between the North and the South since the need would be greater in the southern portion of the state because of its population base. Mr. Haartz responded that the funds were originally requested specifically for the cost of the construction of a new facility and a decision was made by both clinics to distribute the funds in that manner.
Mr. Hataway concurred there was mutual agreement between the northern and southern clinics to split the appropriation evenly. Senator Mathews inquired whether southern Nevada has more clients because of its population base. Mr. Hataway responded that during a recent Assembly hearing a representative from the southern organization indicated they fully supported the allocation to the North in order for them to bring their physical facilities up to speed.
Senator Coffin acknowledged there is a huge population difference between northern and southern Nevada. To help balance this situation, he asked whether there is other funding available in the budget to care for the AIDS population. He opined there is sufficient funds in the budget in a proportion that will help care for those individuals in an equal manner.
Mr. Haartz responded that Senator Coffin is correct. He said that within the Health Division budget, there are significant federal and state funds that are used for the AIDS Drug Assistance Program (ADAP). This funding is distributed on a prorated basis for treatment services, he added.
Senator Raggio further noted A.B. 515 provides that any unused or uncommitted balance from one region may be transferred to another region.
Assemblyman Parks stated he had a hand in the additional wording in this bill, and he believes a good compromise was worked out between both entities. He said the situation is very different in the northern and the southern parts of the state. He added that this funding would strictly be used for capital expenditures. Unfortunately, he noted, ADAP funds and other funds available are for services, and not for any type of capital improvement.
Assemblyman Parks commented that in the north there is a need for a facility and, although there are facilities in the south, there is a definite need for additional equipment. A good example, Mr. Parks said, is the Enterprise Clinic in West Las Vegas, which is in need of additional equipment in order to provide all of the required services from that clinic. This would be opposed to a person receiving initial screening from one clinic and then having to go across town to the Wellness Center for additional services.
Assemblyman Parks stated that he believes A.B. 515 is a very good compromise and believes it is the best that could be done, considering the funds that are available.
BILL DRAFT REQUEST (BDR) 28-1576: Authorizes and provides funding for certain projects of capital improvement.
Senator Raggio commented that he and the committee staff have checked the language pertaining to the proposed site for the motor pool. He said the language as written limits the site to the University of Nevada, Las Vegas, (UNLV) campus. Consequently, that language has been removed. He asked that the committee review Bill Draft Request (BDR) 28-1576, which has been approved for committee introduction. Senator Raggio stated that, unless there is objection, the BDR will be submitted for committee introduction.
ASSEMBLY BILL 378: Makes appropriation to support certain loan program for nursing students and requires development of plan to increase capacity of programs of nursing within the University and Community College System of Nevada. (BDR S-852)
Senator Raggio commented this is the first reprint of A.B. 378. He said the committee heard this bill on June 2, 2001. He said A.B. 378 provides funding from tobacco settlement money for loans to nursing students and will be appropriated to the Board of Regents of the University and Community College System of Nevada (UCCSN). He said if this measure is processed he believes there should be some “express” language included.
Senator Raggio pointed out that the bill refers to “available interest and income.” Because A.B. 378 becomes effective July 1, 2001, the committee needs to be aware of the current available interest earning, Senator Raggio said.
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, remarked that, based on recent research, the interest for the third quarter has not been posted. He added that since the inception of the trust fund, $239,767 has been earned on interest. He said $110,599 has been transferred to the Health Division, pursuant to statute.
Mr. Ghiggeri commented that as of this date, there is approximately $129,168 in interest income available in the fund. He said the interest posted for the second quarter amounted to $75,450.
Senator Raggio asked at what point it will be determined that the interest would be available because that amount will determine the amount to be used for the purpose of this bill. He noted that another issue is the language. Because this is a loan, he said, the Board of Regents should establish policy regarding how the loan will be repaid and monitored.
Senator Raggio designated Rick C. Bennett, Lobbyist, University of Nevada Las Vegas, to supply the language that deals with the issues. Mr. Bennett commented he believes there is specific language in A.B. 613, that deals with the repayment of loans, and possibly that language should be considered.
ASSEMBLY BILL 613: Requires transfers of money from fund for school improvement to provide scholarships for students pursuing degrees in teaching. (BDR S-434)
Senator O’Donnell stated he has the same concerns. He said he is not sure whether, in the short amount of time left of the session, the committee can analyze the ability of the regents to come up with a program to address repayment and the processing of these loans. He asked how these loans are going to be administered over a period of time.
Senator O’Donnell said:
We can do something in a 2-year period, but what about a 4-year nursing school. I would like to see, at least for this next biennium, that the money be administered through the Western Interstate Commission for Higher Education [WICHE] organization, and expend it to the university system as the students come through. The WICHE organization is already set up, the programs are already in place and the loan repayment process is already there. There is already a board for approval. The whole thing is right there; and yet, we are trying to create a duplicative agency to do exactly the same thing, only we do it in state. I would be interested to see if we could put it into the WICHE program to do that.
Senator Rawson commented that everyone testifies about the crisis in nursing, and for 10 years, the Legislature has been grappling with this issue. He added that during those years, the nursing program has doubled in size, and Nevada is still short 1,500 to 2,000 nurses. He said something has to be done in this area. He stated, “The hospital association has come up behind this bill and said, if we have whatever amount of money you’ll give us out of this, we’ll more than match it.” He said they would make this “fly,” because they are short of nurses.
Senator Rawson remarked that if this bill is tied to the WICHE program, it would not make it through the Assembly. He added that the WICHE budgets have been closed and those budgets have more funding in them then was recommended in The Executive Budget.
Senator Rawson said:
If we work through the university system, if we want to pick the language in A.B. 613, they certainly can work in conjunction with WICHE. The chancellor is a WICHE commissioner. So, this isn’t going to be in a vacuum, it’s going to be done in the same method and to the same purpose. I don’t want to delay this bill, I think we need to move on with the simplest language we can for the university.
Senator Raggio commented that he believes A.B. 378 will go nowhere if it is attached to WICHE, because the university, and others involved, have indicated that they do not want to see this occur. He added that he does not want to jeopardize the anticipated program.
Senator Raggio suggested the available interest be measured as of July 1, 2001, and that measurement will determine the amount. He added that the Board of Regents should adopt a policy, because the language in A.B. 613 is not necessarily applicable. He said the board should do this as soon as possible and present information regarding how the loan will be monitored and paid, to the Interim Finance Committee (IFC) for approval. He pointed out this action would be a condition of the bill’s implementation.
Mr. Bennett concurred the suggestion is reasonable. He added that A.B. 613 is the UCCSN bill that is related to an ongoing scholarship program for the education of students. He pointed out that with the agreement of UNLV, Assemblywoman Christina R. Giunchigliani attached a loan program to A.B. 613. He added Ms. Giunchigliani has indicated that, if there are any problems with the loan program, she does not want to hamper the approval of A.B. 613.
SENATOR RAWSON MOVED TO AMEND AND DO PASS A.B. 378, AND TO PROVIDE THAT THE INTEREST AVAILABLE WILL BE DETERMINED AS OF JULY 1, 2001, AND THAT THE BOARD OF REGENTS DEVELOP A POLICY OF REPAYMENT OF THE LOANS AND ACCOUNTABILITY AND MANAGEMENT FOR THE LOANS AND REPORT TO THE IFC FOR APPROVAL BEFORE IMPLEMENTATION OF THE LOAN PROGRAM.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
ASSEMBLY BILL 564: Makes various changes relating to public employees’ benefits program. (BDR 23-1346)
Senator Raggio commented this is the second reprint of A.B. 564. He pointed out there was unanimous support for the bill in previous testimony, but the acting Executive Officer of the Public Employees’ Benefits Program raised an issue regarding the wording of the bill that could result in a situation of unfair competition between the self-funded program and others.
Senator Raggio suggested that A.B. 564 should be amended to provide that the state benefits program be required to apply the rating requirement to all proposals that are being offered to state employees. He said the request for proposals (RFP) issued would include the rating requirement of commingling of the claims experience. He added that he does not believe anyone would object to that proposal. He stated that the amendment would clarify the bill.
SENATOR NEAL MOVED TO AMEND AND DO PASS A.B. 564, WITH THE STATED PROVISION REGARDING APPLICATION OF THE RATING REQUIREMENT.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Coffin asked whether the intent of the proposal could be restated. Senator Raggio responded that the self-funded plan would be at a disadvantage if it alone were required to commingle the rating required, because of the commingling of the claims experience. He added that he believes it could easily be assuaged by requiring that anybody making a proposal utilize the rating requirement that results from commingling of the claims experience for both active and retired individuals.
For clarity, Senator Rawson commented that a single line could easily be added to the bill by the bill-drafters.
Senator Raggio indicated the committee should look at the “back language” proposed in the appropriations bill and authorizations bill. He referred the committee to a summary of appropriations by functions (Exhibit C). He pointed out that this summary is the most effective way to have every senator understand what is being placed into the appropriations bill.
Mr. Ghiggeri referred the committee to page 11 of Exhibit C, and remarked that this shows the total statewide appropriation recommended by the Governor, which is $1,869,121,338 in FY 2002 and $1,977,807,769 in FY 2003. He said the Legislature has approved $1,785,289,070 in FY 2002 and $1,897,862,472 in FY 2003.
Mr. Ghiggeri noted that a portion of the reduction in the first year of the biennium of approximately $39.9 million is applicable to the state employee’s pay raise, which has been placed in a separate bill that will be introduced. He added that, in the second year of the biennium, approximately $65.4 million has been pulled out of the appropriation. Additionally, he said, the $1.898 billion in FY 2003 includes approximately $34.7 million for the 2 percent pay raise reflected in the Distributive School Account (DSA).
Senator Coffin asked whether Exhibit C could be put into “bill form” and taken to the Senate Floor to satisfy the legal requirements of getting this information to the floor. Senator Raggio replied that Exhibit C is only a summary of what will be in the appropriations bill.
Mr. Ghiggeri remarked that, as indicated in Section 31, the provisions of Nevada Revised Statutes (NRS) 353.150 to 353.245 inclusive, and the “back language” in the appropriations bill (Exhibit D) is duplicated from the 1999 Legislative Session and this basically sets forth the state budget act. He said that Section 32 of the appropriations bill basically allows the transfer of funds between fiscal years. He pointed out that new programs, added this legislative session, are the Immunization Program, Health Care Financing and Policy, and the Veterans’ Home account.
Mr. Ghiggeri commented that Section 33 is replicated from prior legislation, which allows the transfer of funds for information technology projects from FY 2002 to FY 2003. He said Section 34 provides for the transfer of funds from one fiscal year to another for projects involving the Commission on Economic Development for the Train Employees Now Program. He indicated that it also includes permissive language for the appropriation for the State Department of Education for the Peer Mediation Program and National Teacher Certification Program to be transferred between fiscal years.
Mr. Ghiggeri pointed out that Section 35 allows the Legislative Counsel Bureau (LCB) to transfer funds between divisions of the LCB upon recommendation of the director and approval of the Legislative Commission, and subsection 2 of Section 35 was referenced during closure of the LCB budget. It was indicated that funding within the Legal Division is required to be carried forward from this fiscal year to next fiscal year.
Mr. Ghiggeri drew attention to Section 36, which is the “cap” language for the Health Care Financing and Policy Division, and the Welfare Division budgets. He said in subsections 1, 2, and 3 there is language specifying that, should the matching rates change from the anticipated levels approved by the legislature upon closure of the budgets or additional services are mandated by the federal government, the caps would be lifted to provide for additional funding.
Mr. Ghiggeri commented that Section 37 is the same as in previous general appropriation acts and allows the Welfare Division to transfer funds among budgets. He added that Section 38 provides the same transfer capability for Nevada Medicaid and the Nevada Check-up program. He pointed out that Section 39 was included in the 1999 Appropriations and Authorizations Acts and requires that the Division of Health Care Financing and Policy work with the UCCSN to incorporate a dental services program within those budgets.
Mr. Ghiggeri said that Section 40 is an expansion of the language for the Department of Prisons (DOP). He remarked the DOP currently is required to approach the IFC for approval prior to transferring any funds between budget accounts. He commented that the expanded language now allows the DOP to transfer funds, up to the limits allowed, for revisions of work programs in NRS 353.220, between budget accounts without coming before the IFC. However, he said, any transfers proposed that would exceed those levels require IFC approval.
Senator Raggio asked John P. Comeaux, Director, Department of Administration, “This accommodates the discussions that we had between the budget offices on this issue.” Mr. Comeaux replied that is correct.
Mr. Ghiggeri remarked that the language in Section 41 is similar to the language contained in the 1999 Appropriations and Authorizations Acts and allows the Department of Public Safety to transfer funds between budget accounts, with the approval of IFC, to pay for the Public Safety Information Services Section charges. He stated that Section 42 would provide the authority to the Department of Motor Vehicles and the Department of Public Safety to transfer funds, with the approval of IFC, between budgets to effect a reorganization of those departments, pursuant to the provision of S.B. 481. He added that this is similar to language that was included in the 1999 Appropriations and Authorizations Acts for Project Genesis, and it requires that a plan be submitted to the IFC no later than January 1, 2002 to implement this reorganization.
Mr. Ghiggeri pointed out that Section 43 provides for the transfer of payroll funds, with the approval of IFC, between budget accounts within the same department for the support of salaries and payroll costs. He said transfers are limited to vacancy savings amounts and costs related to positions that were not budgeted for merit salary increases.
Mr. Ghiggeri remarked that Section 44 deals with language that has also been included in prior appropriations acts. He said it requires the Board of Regents of the UCCSN to comply with any request by the Governor to set aside money because of budget concerns or reductions in fund balance. He stated that Section 45 has also been in prior appropriations acts. He pointed out that it provides for the appropriation of General Fund dollars to the Public Employees Retirement Board for administration of the legislators’ retirement system.
Mr. Ghiggeri stated that subsection 2 of Section 45 is new. It provides for payment of costs to the Public Employees Retirement Board for actuary services provided for the judicial retirement system. Senator Raggio asked whether this is because it is just being implemented. Mr. Ghiggeri replied that is correct.
Mr. Ghiggeri commented that Section 46 is the appropriation to the LCB for the new Legislative Auditor position that will be utilized to survey the issues in the school districts for Clark and Washoe Counties over the 2001-03 biennium, and report the findings during the next session of the Legislature. Senator Raggio asked whether this appropriation would cover the costs associated with the new position. Mr. Ghiggeri responded that the costs of the Legislative Auditor position would be covered.
Mr. Ghiggeri pointed out that Section 48 allows for the DOP to temporarily advance funds to its warehouse account from funds appropriated to the department, with the approval of the Department of Administration.
Mr. Ghiggeri stated Section 49 requires the State Controller to pay claims on behalf of state agencies through the last business day of August, immediately following the end of the fiscal year. Also, he said, language has been inserted to require the State Controller to process any transactions requested by the Director of the Department of Administration from the prior fiscal period, until the third Friday in September, immediately following the end of the fiscal year. Senator Raggio commented this explanation clarifies the closure date and removes any confusion that may have existed.
Mr. Ghiggeri stated that Sections 50 and 51 contain language also included in prior legislation. He commented that Section 52 provides $1.7 million to cover the cost of the Seventy-first session of the Legislature. He added this is similar to what has been in previous appropriations acts.
Mr. Ghiggeri said Section 53 provides for an advance to the Attorney General (AG), upon approval by the Director of the Department of Administration, to fund any shortfalls in the Medicaid Fraud Control Unit, pending receipt of recovery revenue. He pointed out that Section 54 provides a similar advance from the General Fund to the Office of Executive Director for Veterans’ Services for the Southern Nevada Veterans’ Home account, pending receipt of federal reimbursement for services provided.
Mr. Ghiggeri remarked that Section 55 provides for an advance to the Department of Conservation and Natural Resources for costs incurred in the suppression of fires or other emergencies, pending receipt of revenue for services billed to third parties. He stated that if billings have been submitted, this would allow vendors to be paid on a timely basis. Senator Raggio questioned whether this is because of late payments that occur. Mr. Ghiggeri replied this is correct.
Mr. Ghiggeri said Section 56 provides for an advance of funds to the Nevada National Guard to pay expenses that are incurred as the result of the Governor ordering the Guard to active duty. Funds that are advanced must be repaid from the emergency account, which is administered by the Board of Examiners. He commented that Section 57 provides for advancing up to $400,000 per year to the DOP, pending receipt of federal funds for housing illegal aliens. He added that it has been significantly reduced from what was in the previous appropriations act. However, the funding that is also in the DOP budget is significantly less than what was in prior authorizations acts.
Mr. Ghiggeri pointed out that Section 58 requires that the Board of Examiners will report to the Legislature if it is determined that the ending fund balance in the General Fund is projected to be less than $50 million. He pointed out that the Governor may direct the Director of the Department of Administration to require the State Controller, or the head of each department, to set aside a reserve of not more than 15 percent of the total amount of the appropriation for that operation. In the 1999 appropriations act, that funding level was $40 million. It has now been increased to $50 million, he added.
Mr. Ghiggeri said Section 60 provides for the carry-forward of funds appropriated to the State Arts Council for the Challenge Grant program. He said the language provides for a 3-year grant cycle and would allow the agency to carry forward funds for a maximum of 2 fiscal years.
BILL DRAFT REQUEST S-1579: Authorizes expenditures by agencies of state government. (Later introduced as S.B. 586).
Mr. Ghiggeri referred the committee to BDR S-1579, the authorizations act. (Exhibit E). He pointed out that the first 19 pages of Exhibit E lists all the accounts and the funding that is authorized for receipt and expenditure. He added these are funds authorized for expenditure that are not provided by General Fund or State Highway Fund appropriations.
Mr. Ghiggeri stated that Section 2 of BDR S-1579 provides for appropriations from the (Tobacco) Fund for a Healthy Nevada to the Office of the Attorney General and to the Aging Service Division. Section 2 also contains the recommendations that were made by the Governor and were approved by the Legislature.
Mr. Ghiggeri said this appropriation provides $238,501 in FY 2002 and $251,825 in FY 2003 to the AG Administration account for operation of a “tobacco sting” program. He added there is also funding provided to the Aging Services Division for the Elder Protective Services (EPS)/Homemakers program of approximately $248,000 in FY 2002 and approximately $263,000 in FY 2003. He noted funding is also included to the Aging Services Division for the operation of the Senior Services Program of approximately $623,000 in FY 2002 and $846,000 in FY 2003.
Senator Rawson asked whether someone from the Legal Division should review this language, and Mr. Ghiggeri replied that the Legal Division drafted the language.
Mr. Ghiggeri pointed out that Section 3 contains language that has historically appeared before, which is the authorization for expenditure from the General Fund by the Gaming Control Board, and Section 4 is new. He said the Governor recommended, and the Legislature approved, funding from the General Fund for a separate account to be used by the Gaming Commission. He stated subsection 3 of both Sections 3 and 4 requires that any funds that are authorized for expenditure from the General Fund should revert to the General Fund at the end of the fiscal year.
Mr. Ghiggeri remarked Section 7 provides that, funds received by an agency that exceed what is authorized in either fiscal year, and that agency receives either General Fund or State Highway Fund support, must be decreased to the extent that the receipts of the money from other sources is exceeded. He added that such a decrease must not jeopardize the receipt of funds from other sources. Senator Raggio asked whether the General Fund amount is decreased by the amount of additional money received from elsewhere. Mr. Ghiggeri responded that it is. He pointed out this section also applies to the State Highway Fund along with the General Fund. The State Highway Fund had not been included in the previous authorization acts, he added.
Mr. Ghiggeri stated that Section 8 provides for the UCCSN to utilize tuition fees for operation. He said subsection 2 of Section 8 provides for the UCCSN to utilize the funds collected in excess of amounts authorized by the 1999 Legislature in the current fiscal year to offset utility costs. He said this is a one-time solution for the current fiscal year utility problems. He noted that problems encountered in FY 2002 and FY 2003 will be addressed through the funding already approved for the IFC contingency fund.
Mr. Ghiggeri said there were no new additions to Section 9, but Section 10 will enable the UCCSN to expend funds from the UCCSN Endowment Fund. He indicated that subsection 2 of Section 10 contains language establishing the $1 million estate tax emergency fund that was established by the Legislature in the closure of the UCCSN budgets. He added the emergency fund was established to assist the UCCSN campuses that encounter difficulty in responding to enrollment growth.
Senator Raggio asked whether Section 10 refers to “hold harmless.” Mr. Ghiggeri replied this was the emergency fund that the Board of Regents approved in mid‑May 2001. Senator Raggio inquired whether the UCCSN is still required to get approval of the IFC. Mr. Ghiggeri responded that is correct; expenditure of those funds requires IFC approval.
Mr. Ghiggeri commented that Section 11 authorizes the State Public Defender to collect funds from the counties for support of this office. He added that Sections 12, 13, 14, 15, 16, and 17 are duplicates of what was in the prior authorizations acts. He pointed out that Section 18 allows the Department of Motor Vehicles and the Department of Public Safety to transfer funds to implement reorganization, and it is similar to language that was discussed in the appropriations act.
Mr. Ghiggeri said Section 19 provides for the effective date of subsection 2 of Section 8, which states this section becomes effective on passage and approval. Senator Raggio asked what Section 8 refers to. Mr. Ghiggeri replied that is the language that provides for the UCCSN to use excess revenues this Fiscal Year to offset utility costs.
Senator Coffin commented there are a couple of items in the authorization bill that might be contingent on passage of another piece of legislation. He said, “We are simply authorizing in this bill here, that should those pass they could spend them.” Mr. Ghiggeri remarked that is correct and “hanging” legislation is being tracked.
SENATOR RAWSON MOVED TO INTRODUCE BDR S-1579.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Senator Raggio pointed out that both the appropriations bill and the authorization bill are contingent on revenues.
Senator Raggio indicated there had been a question regarding Section 58 of the appropriations bill.
Senator Raggio said:
Section 58 as you recall was put in there because of the emergency situation, call it what you want, that occurred in 1991, that required a set aside and since there was no statutory authority for the set aside, by request from the Governor, there was litigation. This ensures that will occur. . .lets hope it doesn’t. That’s a pretty low amount, $50 million. If it gets down to that point, then the Governor will be required to do that. That’s the authorization part.
Senator Coffin indicated that he remembers when this happened. He said that, at the time, he was worried that too much authority was left in the hands of the Governor, who cut some budgets too much and left others alone. He pointed out that the Division of Mental Health and Developmental Services has only recently recovered from budget cuts during that time.
Senator Coffin asked whether there is a way to provide direction regarding this type of occurrence, or, “do you just trust the good will of the Governor to recognize which programs are more important to the public or at least the intent of the Legislature?”
Senator Raggio commented he believes the Governor has to have this “blanket” authority and hopes it never becomes necessary. If the ending balance gets down to $50 million, then the Governor will have to do something drastic, he added. He noted he believes the language needs to stay in the bill.
SENATE BILL 518: Makes appropriations to contingency fund to restore and increase balance in fund and to Interim Finance Committee to assist state agencies and school districts in paying for certain energy needs. (BDR S‑1514)
Senator Raggio asked whether the committee previously voted to amend S.B. 518. Mr. Ghiggeri responded that is correct. He explained Amendment Number 1226 increases the level in the Contingency Fund from $9 million to $11 million. He said it also provides $17 million to the IFC for allocation to state agencies and the UCCSN to address utility needs over the next two fiscal years, if the need arises. He pointed out that Section 3 provides $6.5 million to the IFC for allocation to various school districts around the state to address utility needs, if the need arises. He added the legislation also requires the State Board of Examiners to establish policies and procedures for the review of requests for the funding.
Mr. Ghiggeri remarked that Section 3 also requires the State Board of Examiners to approve any request and to forward those requests that are approved to the IFC for consideration. The IFC is not bound by any recommendations by the Board of Examiners, he noted.
Senator Raggio stated he is unsure of what the difference is between this amendment and the other amendment. Mr. Ghiggeri mentioned that when the first amendment was last discussed, the increase in the appropriation to the contingency fund, from $9 million to $11 million, was not included in the first amendment.
SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 518, UTILIZING AMENDMENT NO. 1226.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
BILL DRAFT REQUEST (BDR) S-1575: Apportioning the state distributive school account in the state general fund for the 2001-2003 biennium. (Later introduced as S.B. 585).
Senator Raggio commented BDR S-1575 is dependent on funding sources contained in other bills, which are still in the Assembly.
Georgia J. Rohrs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, referred the committee to BDR S-1575 (Exhibit F), and stated this BDR appropriates from the General Fund approximately $496.3 million in the first year and $543.3 million in the second year of the upcoming biennium. She said additionally there is approximately $147 million in FY 2002 and $151 million in FY 2003 of other revenues authorized to be received and expended for the state support of public education.
Ms. Rohrs pointed out these other revenues include an annual tax on slot machines, sales tax collected on out-of-state sales, interest earned on the Permanent School Fund, revenue from mineral land leases, and estate tax collections.
Ms. Rohrs said the statewide average of basic support per pupil increases over the upcoming biennium. She indicated that $3,804 is the amount in the current fiscal year; $3,897 per pupil is budgeted in FY 2002, and $3,991 per pupil is budgeted in FY 2003.
Senator Raggio asked whether the bill specifies the amounts for each county. Ms. Rohrs replied that it does, and the bill uses estimated weighted-averages for each county. Senator Raggio inquired whether this is based on each county’s own formula. Ms. Rohrs responded that is correct.
Ms. Rohrs stated enrollment is projected to grow at 4.86 percent in the first year and 4.68 percent in the second year of the biennium. She explained that a 2 percent cost of living adjustment (COLA) for local school district employees is included in the DSA for FY 2003. She said S.B. 458 also provides for a teacher retention bonus of approximately 3 percent, which is not part of the DSA. In addition, she noted, a funding mechanism, also not part of the DSA, has been developed that could generate salary increases depending on the General Fund balance during the upcoming biennium.
SENATE BILL 458: Makes appropriation to Department of Education for cost‑of‑living bonus for all public employees in local school districts. (BDR S‑1424)
Ms. Rohrs commented that the class-size reduction program remains part of the DSA with expenditures tracked in a separate category, which is in a separate bill that has yet to be introduced.
Ms. Rohrs said state funding for special education continues to be allocated on the basis of special education units. She pointed out that total funding for the special education units amounts to approximately $72 million for 2,402 units at $29,977 each in FY 2002, and approximately $77 million for 2,514 units at $30,576 each in FY 2003. As in the past, she added, 40 of those units will be reserved for the State Board of Education to assign to districts that have unexpected needs.
Ms. Rohrs remarked S.B. 292 provides a mechanism, whereby charter schools can also apply for these units. She said that, in addition to the 40 discretionary units, the bill adds 5.24 units and 5.47 units for FY 2002 and FY 2003 respectively, for gifted and talented pupils to participate in the Stargate Program.
SENATE BILL 292: Revises provisions governing charter schools and authorizes programs of distance education. (BDR 34-382)
Returning to BDR S-1575, Ms. Rohrs commented that the BDR sets a base level of $50,000 each year, per district, to continue support of special education counseling services for elementary school students at risk of failure.
The BDR also supports the adult high school diploma programs, including those in prison facilities, Ms. Rohrs added. She explained that $14.7 million and $15.6 million are budgeted in the first and second years of the biennium, respectively, for support of courses, which are approved by the Department of Education as meeting the course of study for an adult, standard high school diploma as approved by the State Board of Education.
Ms. Rohrs stated BDR S-1575 appropriates approximately $11.4 million and $12.3 million for the first and second years of the biennium, respectively, for remedial education programs and professional development centers to train teachers to teach to the academic standards. Additionally, she noted, approximately $4.5 million each year is appropriated for a new literacy program, the Nevada Early Intervention program, to train K-3 (Kindergarten through Third grade) teachers to teach fundamental reading skills.
Ms. Rohrs pointed out that BDR S-1575 increases funding for early childhood education programs from $500,000 per year to $3.5 million per year, for competitive grants to school districts and community based organizations for early childhood education programs. Funding is continued for the School to Careers program in the amount of $500,000 for FY 2002, she added.
Senator Raggio asked whether Section 19 of BDR S-1575 deals with transportation costs. Ms. Rohrs responded that it does.
SENATOR RAWSON MOVED FOR COMMITTEE INTRODUCTION OF BDR S-1575.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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SENATE BILL 148: Makes various changes regarding education and educational personnel. (BDR 34-219)
Senator Raggio stated that on June 1, 2001, the committee voted to amend and do pass S.B. 148. He said the amendment apparently resolves many conflicts. He remarked there are some substantive changes in the amendment. He requested that H. Pepper Sturm, Chief Deputy Research Analyst, Research Division, Legislative Counsel Bureau, review this amendment. Mr. Ghiggeri remarked that Mr. Sturm and Mindy Braun, Education Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, have both reviewed Amendment Number 1160.
SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 148 UTILIZING AMENDMENT NUMBER 1160.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED.
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Senator Coffin asked whether the language in Section 25 of Amendment Number 1160, regarding the intimidation of pupils or employees, is also included in another bill. He also asked whether the language in Section 25 is in conflict with other bills. Senator Rawson replied there was a bill referred to as the “bully bill” that went through the Senate Committee on Human Resources and Facilities, which was primarily directed at school personnel. He said it required the school districts to develop policy to ensure individuals are treated with respect and without intimidation. He added that Amendment Number 1160 of S.B. 148 is directed more to the threats that come from outside the schools.
Senator Raggio commented that language was extracted from Assembly Bill (A.B.) 319 to be modified and added to S.B. 148.
ASSEMBLY BILL 319: Makes various changes to provisions governing education. (BDR 34-784)
Mr. Comeaux commented that it did not occur to the Budget Division, until recently, that the current utility crisis is having an effect on hotel room rates in this state. He said the per diem allowance for state employees traveling instate for those room rates has not been adjusted for quite some time. He added that the per diem allowance is currently $43 per night. He pointed out that specifically there are hotels in the state that have tacked on a utility surcharge to their room rates.
Mr. Comeaux explained that the Budget Division recommends that if a means can be found, the existing per diem rates be increased by approximately 15 percent each year of the biennium. He said that is approximately the same percentage increase that was initially provided in The Executive Budget for utilities. He added this would take the per diem rate from the existing $69 per day, of which $43 is for lodging, to $76, with the total difference being for the increased room rate. This would amount to $76 the first year of the biennium and $84 in the second year of the biennium, he said.
Mr. Comeaux clarified that the current option would be to require state agencies to absorb those amounts out of their existing travel budgets, and then review it again in 2 years. Senator Raggio asked whether the cost to the state had been computed to accomplish this increase. Mr. Comeaux replied that by requiring the state agencies to absorb the cost, there would be no additional cost to the state. Senator Raggio said he understands and asked whether all the agencies are able to absorb that cost. Mr. Comeaux responded that the division has not yet calculated that.
Senator Raggio asked whether Mr. Comeaux is indicating this increase be attached to the “pay bill.” Mr. Comeaux replied that is correct. Senator Raggio asked the current status of the “pay bill.” Mr. Ghiggeri responded the “pay bill” is in the Assembly. Senator Raggio directed Mr. Comeaux to take the matter up with the Assembly.
The following bills were on the agenda, but were not discussed:
SENATE BILL 584: Authorizes and provides funding for certain projects of capital improvement. (BDR 28-1576)
ASSEMBLY BILL 513: Makes appropriation to Department of Human Resources for development of long-term strategic plan concerning health care needs of citizens of Nevada. (BDR S-1407)
Senator Raggio recessed the meeting at 9:36 a.m. until the call of the chair.
Senator Raggio adjourned the meeting at 6:31 p.m.
RESPECTFULLY SUBMITTED:
Debra Petrelli
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: