MINUTES OF THE
SENATE Committee on Finance
Seventy-First Session
February 19, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:00 a.m., on Monday, February 19, 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, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Jim Rodriguez, Program Analyst
Bob Atkinson, Program Analyst
Judy Jacobs, Committee Secretary
OTHERS PRESENT:
Lorne J. Malkiewich, Director, Director’s Office, Administrative Division, Legislative Counsel Bureau
Don Hataway, Deputy Director, Budget Division, Department of Administration
Robert R. Loux, Executive Director, Agency for Nuclear Projects, Office of the Governor
Laurie England, Director, Governor’s Office of Consumer Health Assistance, Office of the Governor
Tracy Raxter, Chief, Administrative Services Division, Department of Administration
Ron Sparks II, Executive Director, Western Interstate Commission for Higher Education, University and Community College System of Nevada
Gary L. Ghiggeri, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reported on the progress of budget hearings, indicating the committee has heard 102 of the 418 budgets, not including the 2-week activity prior to the beginning of the legislative session. He noted that is 24.4 percent of the budgets.
Senator Raggio reminded members of the committee that last session 75 of the budgets were closed based on the recommendations of staff. He requested that committee members consider specific budget items and make note of any matters for which they would like to hold hearings. He asked that staff or the chairman be informed of items that members would prefer to have heard prior to closing. In regard to the budget for judge’s salaries, Senator Raggio commented a bill proposed by the Supreme Court has been drafted that will be heard by the full committee, but the salaries will be heard by a subcommittee.
Mr. Ghiggeri drew attention to a memo (Exhibit C) from the Department of Administration regarding tobacco settlement funds. He noted the memo draws attention to those budgets impacted by the fund. Senator Raggio pointed out the memo was in response to an inquiry from the committee.
Senator Jacobsen stated he would like a bill draft request (BDR) dealing with women inmates, who have children, and who are approaching release. He requested authorization for introduction by the committee.
*****
SENATOR JACOBSEN MOVED FOR COMMITTEE INTRODUCTION OF A BILL DRAFT REQUEST TO PREPARE FEMALE INMATES NEARING RELEASE, WHO HAVE CHILDREN, FOR REENTRY INTO THE COMMUNITY.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
SENATOR COFFIN MOVED FOR COMMITTEE INTRODUCTION OF A BILL DRAFT REQUEST OF A RESOLUTION TO HONOR JOHN W. RIGGS, SR., WHO PASSED AWAY THE PREVIOUS WEEK.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Lorne J. Malkiewich, Director, Director’s Office, Administrative Division, Legislative Counsel Bureau, came forward to request committee introduction of a one-time appropriation to the Legislative Counsel Bureau (LCB). He noted The Executive Budget includes four one-shot appropriations to fund the LCB.
Mr. Malkiewich explained that this session all enhancements in the LCB budget for fiscal years (FY) 2002 and 2003 were taken out of the budgets and put in as a fiscal year 2001 one‑shot appropriation. He said LCB did not know that was going to happen, so it did not put in a bill draft request for it, but it is included in the Governor’s budget. He pointed out the enhancements and appropriations were already reviewed and approved by LCB. He asked for approval of a one-time appropriation effective on passage for $861,585 to fund new and replacement equipment and various maintenance projects.
Senator Raggio interjected the request could be found in the budget book on page INTRO-15 for one-time appropriations in fiscal year 2001.
*****
SENATOR JACOBSEN MOVED FOR INTRODUCTION OF A BILL DRAFT AS PROPOSED BY MR. MALKIEWICH.
SENATOR O’DONNELL SECONDED THE MOTION.
Senator Raggio asked whether the bill draft request had already been drawn up. Mr. Malkiewich answered that it had not. Don Hataway, Deputy Director, Budget Division, Department of Administration, explained:
We pulled that out on the basis of the fact surplus dollars were available. We sent our packet of BDRs over last week, and that is included in it as are all the one-shot appropriations for LCB. We are treating it as one bill to save paperwork.
Mr. Malkiewich reiterated LCB had put in four bill draft requests for other appropriations, and suggested this matter sent over by the Department of Administration could be treated as the fifth request for an appropriation. In that case, he said, the LCB would not need an appropriation. Senator Raggio proposed setting it aside for now.
* * * * *
Senator Raggio asked about a proposed purchase of property. Mr. Malkiewich said another BDR is completed to provide for $1,753,100 for purchase of the Capitol Apartments. Senator Raggio noted that is BDR S-733.
BILL DRAFT REQUEST S-733: Makes appropriation for purchase and light renovation by Legislative Counsel Bureau of Capitol Apartments as described in land description verified pursuant to NRS 218.255. (Later introduced as Senate Bill 199.)
*****
SENATOR MATHEWS MOVED FOR INTRODUCTION OF BDR S-733.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
AGENCY FOR NUCLEAR PROJECTS
High Level Nuclear Waste – Budget Page ELECTED-8 (Volume 1)
Budget Account 101-1005
Robert R. Loux, Executive director, Agency for Nuclear Projects, Office of the Governor, distributed a single-page handout (Exhibit D) entitled Other Program Areas. He said he would summarize four or five areas not specifically related to Yucca Mountain. He acknowledged there could have been more coordination with other agencies dealing with a variety of nuclear waste shipments.
As an example, Mr. Loux said, his agency coordinates with the Department of Energy (DOE) Nevada Operations Office. He explained the agreement between the state and DOE requires all federal funds be provided to the Division of Emergency Management (DEM), Department of Motor Vehicles and Public Safety (DMV&PS) in matters related to oversight of the Department of Energy’s lower level waste activity at the test site. He said the nuclear projects office coordinates the routing of low-level waste shipments with the Nevada Operations Office.
Mr. Loux distributed a second handout (Exhibit E) he described as a letter to him from the DOE Nevada Operations Office. He stated it is the DOE’s most recent quarterly report on low-level waste shipments in southern Nevada. He pointed out that, of the 134 shipments listed, a total of 8 shipments went through the Las Vegas Valley and over Hoover Dam. He stated that is something the agency is working with the Department of Energy on in an attempt to avoid that route.
Mr. Loux reported the agency is involved in negotiating with the Department of Energy on behalf of the Health Division for funding for the Health Division’s cancer and birth defects registry. He said the nuclear projects agency is also involved with coordinating the activities of half a dozen other agencies on the eventual shipments of transuranic nuclear waste from the Nevada Test Site to the Waste Isolation Pilot Plant (WIPP) in Carlsbad, New Mexico. He pointed out those agencies are listed in the second handout (Exhibit E).
Mr. Loux said that in the past he has coordinated with the Department of Energy on shipments of foreign reactor fuel that comes into Concord, California, by boat, and eventually goes to the Idaho Engineering Laboratory in Idaho. He reported there was a single train shipment in 1998 for which the agency helped on coordination with the other agencies. He said he expects that there will be additional shipments sometime in 2001.
Senator Raggio asked whether Nevada gets prior notice of those shipments. Mr. Loux replied the state received notice of that one, but not of low-level waste shipments. He said the state would receive notice of any shipments that would fall into the high-level waste category.
Mr. Loux explained the state receives not only prior notice of foreign-reactor-fuel shipments like the one that went through the state to Idaho, but also has the opportunity to work with the Department of Energy to coordinate escorting and emergency response training. In fact, he said, in the Idaho shipment case, the agency helped decide the route that moved the shipments out of the Reno-Sparks area and onto the other Union Pacific Railroad line.
Turning to the Yucca Mountain issue, Mr.Loux distributed another handout (Exhibit F) entitled Yucca Mountain Decision Schedule. He explained it attempts to show the relationships of various decisions the Department of Energy has to make to reach certain milestones. He said the first item addresses the site recommendation decision. He noted it lists the prerequisites DOE must complete before the Secretary of Energy could, if that is his or her desire, recommend a site to the President for development as a repository. He drew attention to the top one or two rule-makings, which he said are currently held at the Office of Management and Budget (OMB). He added there is also an ongoing inspector general’s report that they must deal with.
Mr. Loux explained the DOE has to inform both the Governor and the Legislature of the intent to recommend a site, and must have public hearings in Nevada. The DOE has to issue a final environmental impact statement. Finally, he said, it must allow the Governor and the Legislature to actually review and examine the recommendation decision and related documentation, allowing comment on it. He said those comments are then reported back to the Secretary of Energy, whose response is reported back to the state. He noted all of that has to be in the package that would go to the President at some future point in time for site recommendation.
Mr. Loux reported DOE’s official date for this decision is July of this year, but recently they indicated it will more likely be at the end of the calendar year at the very earliest or even in 2002. He said, given the list of requirements and prerequisites, he felt even that may be optimistic.
Mr. Loux indicated the last item, found on the second page of Exhibit F, is the actual site approval process. This process comes after the recommendation by the Secretary of Energy to the President and after a list of prerequisites and opportunities for the state, such as the notice of disapproval. He pointed out that once the Secretary of Energy receives the recommendation from the President, there is no time frame in which the President must submit to Congress the recommendation for approval. Mr. Loux said the President could do it rather rapidly, or actually sit on it for a while. He noted that appears to be one of the very few decisions that are not triggered by a particular date or number of days in which they must be completed.
Senator Raggio asked what impact the investigation would have as to whether or not there is bias or prejudice on the part of the DOE. He asked Mr. Loux to enlighten the committee on the origin of the investigation and the request for it. He noted he had just read there is an objection being made that the law firm involved in making that determination could have a conflict.
Mr. Loux responded that there are three issues that are all related. The first one, he said, the origin of the Inspector General’s investigation, came about as a result of a “leaked” DOE cover memo on a draft report. He explained the report was intended for internal DOE review before it would be released to the public. He said the cover memo referred to the purpose of the document in terms of “selling the site to Congress,” words to the effect that a budget and schedule are much more important than the actual scientific decision whether it is a suitable site. Mr. Loux opined the document should be of help to those (he quoted), “people in Congress that want to promote the site.” He suggested some things in the memo were very non-scientific and appear to be biased and subjective.
Continuing, Mr. Loux related that upon receiving the report, U.S. Senator Harry Reid and others in the delegation immediately wrote to the DOE Inspector General asking for an investigation. Immediately following that, he said, former Secretary of Energy Elliott Richardson directed the Inspector General to begin investigating the Yucca Mountain project for any evidence of bias in the process.
Mr. Loux said that subsequent to that, in the last several weeks, a number of anonymous letters from inside DOE were discovered. He noted it is not clear whether those were part of the Inspector General’s investigation, since, when the Inspector General launches an investigation there is generally very little discussion about the issues he is investigating or how long the investigation will take. Mr. Loux said it was reported that the DOE stated, “The next time you will hear of this is when we issue our report.” Mr. Loux said DOE has delayed the release of many of their documents and put the program on hold.
Mr. Loux related that the DOE recently hired a law firm, Winston Strong of Chicago, to handle all of their license activities before the Nuclear Regulatory Commission. The activities include preparation of licensing documents and review and approval of past studies to see whether they are appropriately put forward. He said another Washington, D.C., law firm protested that arrangement because the procurement document itself indicated that any law firm that had prior relationships with the DOE, or any of their contractors, was ineligible to bid on the project. Mr. Loux said Winston Strong had been doing work for DOE’s contractor, TRW, at the Yucca Mountain site for the last 10 years, preparing licensing documents and other technical reports and perfecting them for their availability in licensing. Mr. Loux noted that U.S. Representative Shelley Berkley asked to be involved in the Inspector General’s investigation.
Mr. Loux said, “The real issue here is, before you cut, you want to measure twice.” He explained, “You do not want to have the same parties doing both measures.” He asserted the problem would be that if the contract went to Winston Strong they would be reviewing their own work and their own licensing documents. That would take away an element of independence or quality assurance in preparation of the documents for licensing by the DOE, he said.
Mr. Loux reported there is a lawsuit pending on the issue and the state Office of the Attorney General has filed a motion to intervene. He said no word has been received on the motion, and there will be a status conference late this month or early next month about the overall lawsuit.
Senator Raggio asked whether Nevada has been involved in any other litigation on the issue. Mr. Loux responded there is another case. He explained the State Engineer for the Division of Water Resources denied the Department of Energy permanent water rights for Yucca Mountain that caused the government to file two actions against the state, one in the District Court in Nye County, and another in the Federal District Court in Las Vegas. He said the case in Las Vegas was decided by United States District Court Judge Roger L. Hunt who essentially threw the case out and told the DOE that it should proceed in state court, since the application was made in the state for water permits.
Mr. Loux said the DOE believes the state action thwarts a federal purpose and contends the basis for the water engineer’s determination that the applications were not in the public interest is unconstitutional. He indicated the government says that, therefore, the water engineer could not have relied on it as an expression of legislative intent or interest. He reported the DOE now has appealed Judge Hunt’s decision in Las Vegas in the Ninth Circuit Court and has been granted an expedited briefing and hearing process. He noted the government has filed a brief, the state has replied, and all arguments are scheduled for May. He indicated those are the only other litigation areas.
Senator Raggio commented there has been concern about the problems identified in the last audit. He noted the state lost federal funding according to some audit findings. He asked whether the state has recovered any federal funds, and whether the federal funds in The Executive Budget are going to be utilized in conformity with federal guidelines. Mr. Loux replied the revenue is primarily based on three revenue streams, General Fund appropriations, State Highway Funds relative to highway analysis, and federal funds. He said that over the last 3 years the federal funding has been partially restored, that 3 years ago the state received a $250,000 appropriation, 2 years ago a $500,000 appropriation, and in the current year the Governor was able to secure $2.5 million from Congress in a federal appropriation, which previously had been “zeroed out” and restored incrementally. He acknowledged that prior to that time the state received approximately $5 million each year in federal funds.
Mr. Loux pointed out that two constraints are placed on the use of federal money. He said federal appropriations cannot be used for salaries or expenses of state employees, which implies that the entire amount of federal funds must be used primarily for contractual activities. He pointed out that necessitates use of General Fund appropriations for salaries, operating, and travel expenses.
Mr. Loux said the funds are further restricted by the Department of Energy, which uses language in the appropriation that indicates the funds are only for scientific oversight and investigations, which the DOE has determined are very narrow in scope as applied to the physical conditions at Yucca Mountain. He noted that precludes expenditures for transportation, socio-economic impact, environment-related work, or anything determined to be “softer” sciences. He said the funds may be used only for very hard-core geology, hydrology, engineering, metallurgy, and that particular type of activity. He explained that is why an appropriation is requested from the State Highway Fund for transportation-related work. He concluded those three streams essentially make up the revenue side of the budget.
Mr. Loux said the General Fund is proposed to pay for the expenses in fiscal years 2001, 2002, 2003, 2004, and 2005, with the bulk of the funds being expended in the contract area. He indicated the contract area has been broken down into three distinct categories that will allow easier tracking and understanding of where the expenditures are going. As an example, he said, the first category is $2.5 million in federal contracts for scientific studies. He indicated one contract is for a study of the corrosion of metals that the DOE is proposing to use for waste disposal containers. Other uses of funds are for hydrology, geology, and volcanics studies, and finishing up some work that was done relative to the “much-ballyhooed” upwelling of water theory.
Senator Raggio inquired who is doing that work. Mr. Loux replied a Russian scientist, Yuri Dublionsky, who was a member of a joint University of Nevada Las Vegas (UNLV), state and DOE study that just concluded at UNLV. Mr. Loux said Mr. Dublionsky will make his final report in a month or two, and that will conclude his activities for the state.
Mr. Loux noted the next category is state contracts that are not eligible for federal funds, such as social and economic impact analysis. He said rail analysis is underway, but not with State Highway Funds. Further studies are being made on environmental reviews and legal analysis, particularly in the contractual area.
Senator Raggio asked what amount is allocated to the socio-economic study, and how the study will be utilized. Mr. Loux replied that when the Secretary of Energy recommends a repository site to the President, the state will have an obligation and an opportunity to submit an impact assessment report to delineate what the likely impacts on Nevada will be in both the private sector and the public sector. The secretary must consider those, and then make a recommendation, he said.
Mr. Loux explained the Secretary of Energy must consider funding mitigation efforts. Mr. Loux said impacts on some state agencies have been identified. As an example, he said, the Nevada Department of Transportation (NDOT) and some of the other agencies could see a dramatic impact. NDOT now must oversee DOE’s actual operation activities, such as using heavy-haul trucks on some rural roads. Mr. Loux said his agency is looking at those impacts and trying to document what they will be. He noted the agency has been working on that study for a while, and the fact that the date for a decision from DOE keeps slipping forward in months gives the agency additional time to work on it.
Mr. Loux said that in the current year the agency is spending about $176,000 on the analysis, trying to update the work done over the last 10 or 15 years and to integrate it into a single report. Prior to this time, he said, it had been in scattered reports in various places. He indicated a report will be available this July and later, depending on when the DOE actually makes a recommendation.
Senator Raggio asked whether the agency intends to contract out the socio-economic study analogy. Mr. Loux answered the agency has already contracted it out. He reported much of the early work was done by one of the big eight accounting firms, and now it is being done by a group from California, the Pacific World Institute. He explained the group is not doing new work, but it is pulling together the socio-economic work. He added the Urban Institute in Phoenix did some property value analysis earlier.
Senator Raggio noted there is an allocation for transportation of transuranic waste to the Waste Isolation Pilot Plant (WIPP). Mr. Loux responded that appears in the Western Governors’ Association expenditures. He said the Department of Energy provides the Western Governors’ Association with funds to help coordinate shipments of transuranic waste to Carlsbad, New Mexico. He said the funds from DOE are passed through the other agencies. The federal funds cannot be used for studying transportation matters.
Senator Raggio asked what portion of this budget will be used for that kind of a study, in addition to the transuranic waste transfer. Mr. Loux pointed out it is the line item in the Governor’s budget identified as “Transportation Contracts” that appears just above the “Western Governors’ Association” line. He noted it includes studies of the actual transportation casks, highways, and roads relative to the impact of truck traffic. He said the budget recommends $375,983 each year, mostly for contract studies. He indicated the agency has a contract with the University of Nevada, Reno, engineering lab to study fabrication of the casks and their durability.
Senator Raggio asked whether the $2.5 million each year indicated in the summary on budget page ELECTED-11 is the limit of the federal funds. He reiterated that in the past the agency received $5 million each year. Mr. Loux admitted that was true, for uses he described earlier.
Senator Raggio noted the Governor is recommending more than $1 million each year in General Fund appropriations. Mr. Loux pointed out the budget this year is very close to the actual budget in past years, with very little change. He said it supports seven positions, with the same amount for in-state and out-of-state travel, around $13,000 in each category for each year. He said the budget includes $120,000 in operating expenses, and the bulk of the General Fund goes into state contracts, which covers socio-economic and other areas that are not allowed with federal funds.
E-710 Replacement Equipment – Page ELECTED-11
Mr. Loux reported the agency is proposing approximately $37,000 the first year and $35,000 the second year in the equipment budget, primarily for information services. He said there is a need to replace some personal computers (PCs), laptops, and some interoffice network equipment. A new phone system, he said, is one of the larger items. He explained the phone system is 10 years old and does not provide voice mail or any sort of answering process. He declared it is important to have a better system with a small staff of seven including only one clerical position.
Senator Raggio voiced his understanding that the federal money, under the Authorization Act passed by Congress, must pass through the Division of Emergency Management (DEM). He asked whether the pass-through satisfies the accountability requirement and other financial limitations, and whether it has been determined it would be appropriate to transfer these funds into the nuclear agency budget. Mr. Loux replied the federal appropriation goes through the Division of Emergency Management, which contracts with the nuclear agency for the proposed work program and list of services and contracts that DEM has agreed to fund. He said the agency reports to DEM quarterly on the progress of those studies.
Senator Raggio asked who will be primarily responsible to ensure the use of the funding is in accordance with federal limitations. Mr. Loux answered there are two entities, his and the Division of Emergency Management. He said the nuclear waste project office is paying very close attention to avoid loss of funds in the future, and monitors the appropriation language and the use restriction. He added that the Division of Emergency Management is also looking at the same requirements to ensure that everyone is in compliance and there will be no problems with funding because of noncompliance with the restrictions. He noted the budget office has also been overseeing the process.
Senator Raggio noted that in the past the Legislature authorized over $843,000 in contingency funds when federal funding was denied, with the understanding that it would be reimbursed to the General Fund or the Contingency Fund when it was recovered. He said staff has indicated only $124,000 has been reverted back. He asked whether any of the present federal money, or the anticipated $2.5 million in federal funding each year, is available for reimbursement to the Contingency Fund.
Mr. Loux responded that, with the DOE’s current restrictions, available federal funding cannot be used for the salaries or expense of state employees. He explained the fact that DOE imposed conditions that the funds may only be used for scientific investigations makes it unlikely that it could be used for state reimbursement. He remarked that the agency has looked at it and the deputy attorney general has looked at it, and she is of the same opinion that it would be very difficult, or impossible, to do legally.
Senator Raggio commented the legislative audit, in addition to the federal audit, made certain recommendations. He asked whether all of those have been accepted or implemented. Mr. Loux answered they have, that a corrective action plan was submitted earlier in the month.
Senator Neal asked why the $2.5 million in funds are not being given to the agency directly instead of passing through the Division of Emergency Management before being passed along for the contracts. Mr. Loux offered his opinion that the Governor negotiated with the chairman of the appropriations subcommittee, Congressman Packard, when he first got in office and asked that the state be given a chance to have the funding reinstated. He said the chairman agreed to provide the funding to the state. Later, he reported, when the Governor’s office was negotiating with some of the congressional committee staff, and they were writing the language, the DOE staff objected to having the money put either in the Governor’s office directly, or in the agency directly, and insisted that it go elsewhere.
Senator Neal asked whether that was due to a lack of confidence that the Nevada Agency for Nuclear Projects would carry out the program. Mr. Loux replied he did not think it was necessarily a lack of confidence. He opined the DOE might have been bit concerned about how the funds were spent relative to some of the areas of past spending.
Senator Neal pointed out the agency has been at this a long time. He prefaced his next question with a little bit of history. Under the Nuclear Waste Policy Act of 1996, he said, the generators of the waste had contracts with the Department of Energy, but the state was not a part of those contracts. He related the Department of Energy had, until 1998, to accept the waste, but failed to meet the deadline. They were sued by the generators, he said, and the generators won the lawsuit. Disagreeing, Mr. Loux said, “Not entirely.”
Senator Neal asked what Mr. Loux meant, and said, “When they say that you have to pay money back, the claims court in Washington, D.C., rendered a ruling that they failed to meet the deadline, and so the Department of Energy is responsible for paying them to the tune of about $1 billion.”
Mr. Loux further responded that, although the DOE missed a 1998 deadline, the contract provided that they could reimburse the utilities for whatever it would take for the utilities to continue to hold the waste and pay for adequate storage. He said one court indicated that was not adequate, and DOE appealed. He acknowledged that decision has not been rendered, and the DOE has not yet been ordered to pay.
Senator Neal asked whether the appeal was filed after July 2000. Mr. Loux replied, “Yes,” and reiterated the matter is still on appeal.
Senator Neal commented he has perceived a shift in nuclear agency’s focus from whether the site is viable for storage of nuclear waste, to the problems associated with the transportation of nuclear waste. He asked whether he is correct in discerning that the agency has shifted emphasis. Mr. Loux replied, “I do not believe so.” He said the agency is still spending $2.5 million a year on the actual site and site-suitability issues. He acknowledged the agency has also been spending a considerable amount of money on transportation over the years but not $400,000.
Senator Neal commented the Governor has put $5 million in the budget to use for advertising to fight the transportation of nuclear waste. He asked whether or not that represents a shift. Mr. Loux replied:
I think it certainly is a new thing for this Governor to do, something that has not been done before that many people have advocated. As you might recall, one of the causes for looting our funding was that we were out doing these same activities in the past with federal money, going into various cities, talking about quandaries of transportation, number of shipments, and the like. When we did that we got a very strong reaction. That is why the Governor is proposing this particular project, because it works.
Senator Neal asked what the $5 million in funding in the budget will provide to stop nuclear waste from coming into the state that has not been done during the number of years that Mr. Loux has been in the office. Mr. Loux responded that he wanted to make clear that the $5 million the Governor is proposing is not in this budget, and it will not have anything to do with the scientific or transportation studies.
Senator Neal asked, “It is not going to come into your office?” Mr. Loux answered, “It is not.” Senator Raggio interjected the $5 million is separate, to be used for a community outreach program and will be in the Governor’s office budget.
Mr. Hataway commented testimony on the $5 million will be presented when the bill comes up, but basically the figures in the nuclear project’s office, as well as the attorney general’s office, represent the baseline budgets to continue their current expenditure patterns. He explained the Governor views the $5 million as the fund for all aspects of the nuclear storage question at Yucca Mountain. He noted it could be the transportation issue, or it could pay expenses for a full-blown legal challenge to any decisions the federal government makes. He reiterated the $5 million is for all aspects, including the nuclear projects office, the attorney general’s office, and the Governor’s office.
In the interest of time, Senator Raggio proposed deferring questions on the $5 million one-shot appropriation. Mr. Hataway noted the $5 million appropriation is a part of submittals made the previous week.
Mr. Loux said that in many ways the scientific and technical programs at Yucca Mountain have become a lot simpler. He asserted the DOE is in general agreement now with the state that the site is actually a poor one, and as a consequence they will rely on metal containers for over 95 percent of the waste systems. He said less than 5 percent of the program is concerned with the actual physical characteristics of the site now, including hydrology, geology, rocks, and any natural substances.
Mr. Loux continued, saying 95 percent of the waste is destined for metal containers, and that is why the agency is spending a great deal of time and attention studying the metal that the DOE is going to propose. He indicated the agency has made corrosion studies and has found that the metal under consideration would not last more than about 400 years under ground. He surmised that in many ways the Department of Energy is getting boxed in, and cannot go back now and say the site has gotten better. He opined DOE may have to find a new metal that will work better under ground. He charged the DOE is in agreement with the state that the site itself is not a good one, but it has taken 20 years for the department to realize that.
Senator Raggio asked what the government is doing down at the site and whether they are still excavating. Mr. Loux responded they are doing heater tests. He explained they are putting artificial heaters in the tunnels to try to ascertain the effect of heat on the rocks and on the hydrology. He said those are primarily long-term, performance-type tests, and very little is being done in the way of any new excavations or drilling.
Senator Jacobsen declared he has had a number of concerns over the years. He said he had the good fortune of chairing the Legislative Audit Subcommittee a couple of years ago. He reported Mr. Loux appeared before the committee, and he indicated the current audit is almost a repeat of the same concerns the auditor had then. Senator Jacobsen said the auditor indicates that some of the financial and administrative practices have improved, but a number of weaknesses still exist.
Senator Jacobsen said Mr. Loux was called before the committee on a couple of occasions, and for a personal interview, and he indicated to the committee at that time that the Board of Examiners had approved almost everything he had done. Senator Jacobsen concluded not much ever came of the audit.
Senator Jacobsen reported he also chaired the Legislative High-Level Radioactive Waste Interim Committee, and it traveled all over the country. He said the committee viewed all the storage sites in the U.S. He indicated he has been to Yucca Mountain 15 times, and he recently toured the Savannah, Georgia, site to see the military waste that is generated. He added he has been at Three-Mile Island, Love Canal, and many power plants. He noted the travels were funded by the Department of Energy.
Senator Jacobsen related he went aboard the aircraft carrier George Washington off the coast of Norfolk, which had just completed its one-millionth mile at sea. He said the trip went 250 miles out, and it covered that mileage on a “semi-load” of uranium pellets. He said the crew stated they were not afraid of being on a nuclear ship.
Continuing, Senator Jacobsen said the interim committee had good exposure to nuclear power and had to make very difficult decisions. He reported the committee made two decisions: that the public health and safety of the people of Nevada is the first priority, and that transportation routes are the second priority. He noted the committee came to the conclusion the problem is not going to go away, and must be dealt with. He said the U.S. Congress indicated in 1998 that the country would take all nuclear waste. He stated it was very difficult to get the committee to agree on what stand Nevada should take.
Senator Jacobsen expressed hope more will be done to follow up on the audit report. He said, “I think one of these days we are going to be presented with a bill that we are not going to like from the federal government.”
Senator Rawson suggested that if the President were to announce the site is qualified, there would be a very short period of time to disagree with it, assuming the state would disagree. He warned that if the state does not disagree legally, the decision would become effective within 60 days. He noted that the decision could happen while the Legislature is in session and then there would be 90 days for Congress to deal with it. That would extend the response time for Nevada beyond the time the Legislature would be in session.
Senator Rawson said his concern is whether, without having to come back for a special session, any groundwork should be laid during this session to ensure that the state has the necessary means to deal with it. He asked, “Without sending any signals that we want it or that we will accept it, is there anything that we should be doing while we are in the Legislature?”
Mr. Loux responded that the Commission on Nuclear Projects, which is supported by the budget and is chaired by Brian McKay, made a recommendation that will be reported to the committee. He said the commission recommended that the Legislature adopt a resolution, sort of an “if, then” resolution. He surmised that means while the Legislature is out of session, if the Secretary of the DOE recommends the site, then the Legislature would give notice of disapproval, and a veto.
Mr. Loux noted there is some ambiguity in the act relative to who has the authority to act in a notice of disapproval. He said one section indicates the “Governor or Legislature,” and in another section it indicates “Governor and Legislature.” He said the commission decided that, to be safe, the Legislature, if that is the desire of the majority, should probably adopt the resolution in case the decision happens between sessions.
Mr. Loux added that the legal issues essentially are not going to become ripe until the Department of Energy actually recommends the site. At that point, he said, the final “environmental act statement record of decision” will be issued, and that becomes available to challenge, as well as the actual decision itself. He opined that at that time there will probably be adequate resources in the proposed budget, including the nuclear agency budget and the attorney general’s budget, to handle some of the short-range legal issues, challenging some of the federal rule-making, and that kind of thing.
According to Mr. Loux, the Commission on Nuclear Projects also indicated that at some point in time the state will have to retain the services of a Washington, D.C., law firm that has had experience before the Nuclear Regulatory Commission to represent the state in that proceeding. He said the Department of Energy schedule indicates that could begin as early as 2002 or 2003. Mr. Loux guessed it is more than likely it will be a year or two later than that.
Mr. Loux suggested the Governor planned to utilize the $5 million fund on an emergency basis in the event something happens when the Legislature is out of session, and the contingency fund is insufficient to meet the need.
Senator O’Donnell drew attention to page 11 of the budget that indicates some of the money is to assist in the planning and preparation for shipments of transuranic wastes from the Nevada Test Site to the WIPP project in Carlsbad, New Mexico. He asked whether the state ships nuclear waste from this state to another state. Mr. Loux replied there are between 80 and 90 shipments of transuranic waste at the Nevada Test Site that is scheduled to go to WIPP. He said the initial shipment might begin sometime in November of this year and continue thereafter. He explained most of the material actually came from Lawrence Livermore National Laboratory and was shipped to the Nevada Test Site. He recollected it was under some cloud earlier in the decade, and the State Environmental Commission had hearings on the issue and levied fines against the Department of Energy for bringing it in without any sort of permits or notification.
Senator O’Donnell asked that Mr. Loux explain his strategy for the one-shot appropriation. Senator Raggio interjected he would like to defer discussion on the bill.
Senator Raggio recalled that formerly the funding for both the Commission on Nuclear Projects and the legislative counterpart committee came from federal funding, but that appears not to be the case now. He asked whether the federal funding is available to be used for those purposes. Mr. Loux answered that it is not available.
Senator Raggio asked who made the rules on the matter. Mr. Loux replied he did not believe there is a formal, written, legal opinion, but the attorney general’s office indicates the funds cannot be used for salary and expenses of state employees.
Senator Raggio requested that the staff, the auditor, legal counsel, or the attorney general’s office check into the matter to determine whether it is appropriate to use some of the federal funding that has historically been used for the expenses of those entities.
Senator Jacobsen commented that on a recent visit to the WIPP site he learned that five loads are being delivered from Las Vegas. He said the storage area is 2,800 feet under the ground in salt formations. He said when he visited the site 35 years ago when WIPP was in its initial stages, the public raised the same kinds of questions as those concerning the Nevada storage site, but today the people in Arizona are 100 percent in support of it. He noted Arizona is getting $16 million a year for infrastructure, schools, or whatever need they determine.
Senator Raggio turned to the next budget.
Gov, Office of Consumer Health Assistance – Budget Page ELECTED-13 (Volume 1) Budget Account 101-1003
Laurie England, Director, Governor’s Office of Consumer Health Assistance, Office of the Governor, came forward to testify.
Senator Rawson commended the Office for Hospital Patients for their work. He asked whether that is still a division in the Department of Business and Industry. Ms. England responded the Office of Hospital Patients was formed in 1991 or 1992. She said there has been a recommendation through the Governor’s fundamental review task force that the essential functions of that office be included in the Governor’s Office of Consumer Health Assistance.
Ms. England remarked that during the last legislative session the Office of Consumer Health Assistance was created and housed under the Governor’s office. She said the purpose of the office is to provide a “one-stop shop” to help consumers deal with health care concerns, workers’ compensation, and other types of health plan coverage. She noted there is growing national attention given to health-care concerns, including the uncertainty and financial impact of third-party payments. She pointed out a tremendous amount of information on the subject comes from a variety of different sources, such as Health Maintenance Organizations (HMO), indemnity carriers, or self‑funded carriers, a multitude of systems.
Ms. England explained the consumer health assistance office offers assistance to people who perceive their needs are not being met, providing them security and comfort. It also provides comprehensive data to elected officials. She noted she has found no other state that provides a similar comprehensive service, and the office is one of a kind.
Ms. England stated her staff is well versed in different payor mechanisms, regulatory entities, regulations, appeals processes, workers’ compensation, and general health-care delivery. She said there is an office in Las Vegas and another in the Carson City area that handles administrative functions. The staff includes 8.5 positions, three which serve as advocates or ombudsmen, one deputy director, and the remainder who provide operational support. She added there are two medical advisors under a contractual arrangement. She said they deal with medical concerns on a peer-to-peer level.
Ms. England reported every case is handled on an individual basis She said many requests are made by people looking for information regarding resources available throughout the state.
Senator Raggio asked how the office is advertised, so that somebody who is not sophisticated knows whom to call. Ms. England responded she has requested additional outreach money. She said the office is listed on a web site off of the Governor’s web page, and the office relies on word of mouth. She indicated she has attempted to meet with every elected official throughout the state to make sure that if constituents call in with particular health care concerns, they will know about the office. She said she has also put out some brochures.
Senator Raggio asked where the brochures are distributed. Ms. England said the Nevada State Medical Association has distributed a poster and brochures to all of its physician members. She said, “In addition to that I have a great number of brochures in my office, and try to pass them out to anyone willing to post them in any particular public areas.”
Ms. England commented outreach is one of the legislative requirements. She said she has traveled throughout the state and met with different civic groups, senior groups, medically oriented groups, brokers, and employer groups. She said she has found tremendous interest in the issue with regards to health plans and insurance coverage. She reported the legislatively-required executive report for 2000 was submitted to the Governor and the Legislature on February 1 and is also available on the web site. She said it includes an historical overview, and specifics of the types of cases, payors, and resolutions, broken down by health plan. She explained that way every payor, whether it be an HMO, indemnity carrier, risk carrier, Medicare, Medicaid, Check-up, or self-funding entity, that has had a concern or a complaint or an issue, will be found on the web page.
Ms. England reported she has broken the issues into specific types with the biggest being actual benefit or billing issues. She said she learned that consumers are being harmed or confused because forms are not being filled out correctly. She said she initiated a medical-management, quality-improvement initiative involving people from the medical association, the HMO association, the managed-care nurses association, and representatives from the union to develop a standardized prior-authorization form for the State of Nevada, which became available in February. She noted it was developed to simplify administrative burdens and did not require legislation or regulation.
Senator Raggio asked Ms. England to elaborate on the enhancements in decision unit E-225.
E-225 Reward More Efficient Operation - Page ELECTED-15
Ms. England responded the module takes components of the Office for Hospital Patients and incorporates them into the Office of Consumer Health Assistance budget account.
Senator Raggio commented decision unit E-900 is the actual transfer of the hospital patients budget into the consumer health assistance budget. He asked what effect it will have with respect to existing positions and costs.
E-900 Trans from BA 3825 – Page ELECTED-16
Ms. England replied two and one-half positions were budgeted, but actually only two were filled for the Office for Hospital Patients. She said her office intends to absorb one position and upgrade it to an ombudsman position. Additionally, she said, no funding for rent was allocated in the Office of Consumer Health Assistance account for the Las Vegas office, so she will be taking the monies from the Office for Hospital Patients.
Senator Raggio asked whether the funds for the Office for Hospital Patients come from an assessment against certain hospitals. Ms. England replied the funds come from hospitals with 49 beds or more, resulting in $100,000 a year, and increased by the consumer price index (CPI) annually.
Senator Raggio asked whether the hospital office would be as effective in the consumer health assistance office as otherwise. Ms. England responded it should be. She explained her office gets many calls that it transfers there, and she opined it will be a tremendous asset to have it all housed in one area.
In response to a question from Senator Raggio, Ms. England said there will not be additional costs. She explained the rent was added because it was not included in the Governor’s Office of Consumer Health Assistance budget.
Senator Raggio asked whether in-state travel is going up in the budget, and whether there will be additional printing costs, or additional rent costs. He asked whether the overall effect will lessen the cost of the two agencies and whether putting them together will be cost-efficient. Ms. England replied, “Yes,” and said some go to the question of outreach, with need for additional funds for travel, printing, and media.
Senator Raggio asked for comment on the request for enhancements of unclassified salaries for the Chief Ombudsman and Chief Deputy Ombudsman, and for 3 new Ombudsmen. Ms. England replied she is the Chief Ombudsman, and there is a deputy position.
Senator Raggio asked, “Is it for $103,000 and $107,000?” Ms. England answered, “I believe that is the inflation or the proposed raises that the Governor has put in. That is my enhancement.” Senator Raggio said the committee will need justification for those, and suggested Ms. England should submit the justifications for the unclassified pay bill.
E-806 Unclassified Pay Changes – Page ELECTED-16
Tracy Raxter, Chief, Administrative Services Division, Department of Administration, reported the base budget reflects the Governor’s salary increases of 9 percent the first year and 4 percent the second year. In enhancement decision unit E-806, he said, the agency is actually asking for an adjustment to the existing salaries, to reduce the salaries and put them in line with the organizational structure.
Senator Raggio commented those will be taken up in the unclassified pay bill. He suggested Mr. Raxter be ready to justify those by submitting specific information supporting the request to the committee. Senator Raggio made note of some of the salaries being considered, including the Chief Ombudsman for $103,301 in FY 2002 and $107,434 in FY 2003, Chief Deputy Ombudsman to $70,000 each year, and three Ombudsmen to $60,000 each year. He stated the Legislature will want justification for those increases. Mr. Raxter stated he will provide the information.
Senator Neal commented the program description did not seem to match the performance indicators. He voiced his understanding the Governor’s Office of Consumer Health Assistance was established during the 1999 session to provide a single point of contact for consumers and injured workers, and to assist them in understanding their rights and responsibilities under Nevada law in health care plans, including industrial insurance policies. He asked how many listed in the caseload were actually individuals who came to the office who had a problem with a health care plan, or an industrial insurance policy, or whether they just did not have an understanding of their rights.
Ms. England responded the cases have been broken out into the number of calls that come in by payor, workers’ comp, HMO, Medicare, Medicaid, etc., and then they have been broken out as to whether or not the query was regarding appealed assistance, or an area that was investigated, and whether the decision was overturned. She explained that in the area of workers’ comp, because of the way the law is set, the office may assist but not intervene or interfere once the case gets into the hearing or the appellate level.
Senator Neal reiterated, “I understand that, but my question is how many of these that you have listed as case volume actually deal with complaints involving industrial insurance policies?”
Ms. England replied:
The industrial insurance component out of the total volume is at 20 percent, within the workers’ comp are 51 percent that involve benefit eligibility, and 49 percent that involve a medical management issue. In the groups as a whole, we have 21 percent that are actual appeal assistance, and 79 percent that involve some type of active intervention on behalf of the consumer to overturn a health-plan decision or facilitate what that resolution is.
Senator Neal asked for an example of what she stated in terms of assisting the consumer with overturning a decision involving a health plan. Ms. England replied that recently an elected official was concerned about a patient who had been denied a liver transplant. She stated the office interceded with the particular payor and helped the payor realize that was a covered benefit under state and federal law. The person subsequently had the liver transplant in California. She indicated the office helps people understand their rights.
Senator Neal asked whether Ms. England had said 79 percent of complaints were of that type. Ms. England replied many are not at the level of a transplant, but the office intercedes within the arena of what people are entitled to under their particular health plan, or payment coverage, and assists them in understanding.
Senator Neal asked what the difference is between the consumer health assistance office and the Office for Hospital Patients. Ms. England responded, “The Office for Hospital Patients has fairly limited legislative ability to assist people in obtaining a 30-percent discount.” Senator Neal asked why it would be beneficial to merge that office into Ms. England’s office, since the hospital patients’ office has limited ability to assist. Ms. England replied:
It has limited ability because of statutory requirements. It actually gives people a 30 percent discount, if they have no payment mechanism, off of full charges. It also allows individuals to have assistance in understanding their particular bill in terms of the very limited area in health care of the hospital. It is actually a very nice portion of what we do in the whole scheme of various providers.
Senator Neal asked whether Ms. England’s office overlaps into that area. Ms. England responded it does not. She said if the hospital office becomes part of her office, it will allow the consumer health office to assist consumers with information about other types of facilities, or with payment or billing issues related to the physician or health plan. She stated the inclusion of the hospital office will dovetail very nicely into a “one-stop shop.”
Senator Neal asked what reason the Governor’s fundamental review committee gave for the proposed merger of the two offices. Mr. Hataway responded the process started during the latter stages of the 1999 session. He recalled that the bill to privatize Employees Insurance Company of Nevada (EICON) was developed at the last minute, and part of it was the section to establish Ms. England’s office. He remembered he received a call from the LCB Fiscal Analysis Division about 2 weeks before the end of the session asking for a budget to establish the consumer health assistance office. At that time, he said, inclusion of the Office for Hospital Patients was considered, but a decision was made to deal with it later.
Mr. Hataway suggested the inclusion results from the legislation that was adopted to privatize EICON. He said when the fundamental review committee looked at it, they agreed it would be a good merger, providing a compatibility of service, and there was no justification to have two offices that refer problems back and forth.
Senator Neal asked, “What is the reason proposed that the merger take place upward rather than, say, downward to the Commission on Hospital Patients?” Mr. Hataway replied the Office of Ombudsmen serves a broader range of services and it seemed more logical. He noted the hospital patients’ office has a more limited focus.
Concluding the budget discussions for the Office of Consumer Health Assistance, Senator Raggio turned to the budgets for the Western Interstate Commission for Higher Education (WICHE).
W.I.C.H.E. Loan and Stipend – Budget Page WICHE-1 (Volume 1)
Budget Account 614-2681
W.I.C.H.E. Administration – Budget Page WICHE-3 (Volume 1)
Budget Account 101-2995
Senator O’Donnell revealed, “I have to make a declaration that my daughter is a recipient of the WICHE program.”
Ron Sparks II, Executive Director, Western Interstate Commission for Higher Education noted that over the past 4 years WICHE established a new Health Care Access Program (HCAP) designed to provide opportunities for students to obtain a health-related degree in exchange for going to work in underserved communities. He explained the legislative audit done 4 years ago suggested that WICHE did a great job of bringing people back to Nevada, but was not doing a very good job of getting them into the areas of need, which is why the program was developed. He said the program will start to graduate students in pharmacy and the dental area. He reported two will graduate in dentistry this year, with other disciplines the following year, so WICHE will soon see how that will impact the underserved.
Mr. Sparks said the program covers pharmacy, physician’s assistants, physical therapy, and dentistry. In response to a question from Senator Raggio, Mr. Sparks said the difference between the present program and the previous program is that there is no longer a requirement that the student pay back any funds. However, he said, in exchange, the student must agree to spend 2 years in an underserved community, and he must do it within a 5-year period after graduation. He surmised graduates will establish practices elsewhere and spend 1 or 2 days a week in some of the facilities that have a need for care.
Senator Raggio asked what sanction is imposed if they do not carry out their obligations. Mr. Sparks replied that currently the federal sanction imposes triple the principle and penalties. He said a bill is out this session that already has an amendment requesting that the commission be given some leeway on the triple principle and penalties. He explained there is a student who is not going to be able to fulfill the obligation. The bill suggests changing “shall” to “may” so that in that situation he will not be charged triple principle and a penalty, and he will simply repay the funds already spent plus interest.
Senator Raggio asked why the sanction would not be maintained when a student goes into the program knowing what the limitations are, and knowing what the sanctions are. Mr. Sparks responded the purpose behind the bill is not necessarily to alleviate it, but to give the commissioners ability to help in some situations. He explained the student had an unforeseen personal situation as a result of a death in the family, and there will be no penalty because he never completed school. Mr. Sparks suggested changing the rule so that once the student graduates he will be charged the required triple principle and penalty, but the commissioners will have the ability to give a little leeway to students who are not able to complete the program.
Acknowledging that he was unfamiliar with the details of the case, Senator Raggio remarked that once the opportunity is offered to a person, the commitment should stand that the graduate will serve 2 years in an underserved area of the state. Otherwise, he said, that position could go to somebody else and an opportunity to attain the original goal is missed.
Senator Rawson remembered the triple penalty was included because some would, with impunity, go somewhere like San Francisco where it is possible to make twice as much money as in rural Nevada. They would just decide to pay off the loan, he said, so a penalty was included that was stiff enough to induce them to really consider whether they would come back instead.
Senator Rawson noted, “There is compassion at issue here, though.” He called the penalty punitive for somebody that does not finish school because of something beyond his control. He likened it to “kicking someone who is already down.”
Senator Rawson said he thought that Sunrise Hospital was putting in $50,000 to pay for nursing faculty positions to draw in more nurses. He added the state has also been working on upgrading the emergency medical services (EMS) system in the state. He indicated those are not included in the budget and asked why.
Mr. Sparks responded it is the Nevada Hospital Association that was willing to put $45,000 into the program and match the state. He explained that under the Western Regional Graduate Program, currently operated by WICHE, faculty and practicing nurses would be sent back to get their degrees and masters-level degrees so that they could come back and teach in the nursing programs. He noted that would substantially increase the number of nursing slots over a period of time. He recalled it was eight slots, and WICHE was going to pay for two of them up front, with the expectation that when they were out of school they would come back to fulfill their obligation by working and teaching in the university system for a certain period of time. He said that although that would increase the number of slots in the program, the Governor did not see fit to put it into the budget.
Mr. Sparks said that part of a study, The Nursing Workforce and Education in Nevada by John F. Packham, PhD, and the Nevada Nurse Task Force, recommends the WICHE proposal as a way to meet the nursing shortage.
Senator Rawson noted the Governor has his hands full trying to hold the budget down. He asked the staff to work on the proposal because it is hard to turn down gifts coming from the industries that are affected. He opined it ought to be on the table to consider and there are other similar issues. He noted travel and information services are necessary just to update the program. He asked Mr. Sparks to give input to the staff.
Senator Rawson also asked staff to look into a research grant position from the Federal State Developmental Initiative (FSDI). He stated his belief that it is under the administration of the Health Division under Administrator Yvonne Sylva. Senator Rawson said it is a 5-year grant that supplies $145,000 to Nevada medical students, including nursing, physician’s assistants, certified nurse-wife practitioners, and so on to get them into the rural areas. He wondered whether it attempts the same thing as the WICHE program. He suggested the two should be coordinated.
Mr. Sparks responded that the Health Division’s research grant is given to students currently in school to get them into the underserved communities. He noted it gives WICHE students an indication of what they are going to be experiencing when they finish school, the type of service they will provide and the type of populations they will work with. He said WICHE coordinates the program, but it is not available for dentistry or pharmacy, it is only provided for physician assistants. He said he did not think it serves physical therapists either. He offered to confer with Ms. Sylva to see whether there have been any changes.
Senator Rawson recalled that the information presented to the health subcommittee was that dentistry, dental hygiene, all of the nursing fields, and social workers would be covered. He repeated his request that Mr. Sparks and the fiscal staff look into the matter.
Mr. Sparks declared that the WICHE program has done a great job of getting professionals out into the underserved communities under pro bono guidance. He explained they are given either $500 or $250 a day toward their loans in exchange for working in underserved communities. He said there are currently 10 to 12 students in the dental field, and a couple of them are even working at the dental school. He added one works with the St. Mary’s Hospital day caravan that goes to the outreach centers, and another works with the Rite of Passage program.
Mr. Sparks acknowledged that, although most students return to the state, a lot of students in the Health Care Access Program, and others in the regular program, do not. He reiterated the state needs them, the state provided their educations, but many are practicing in other states. He opined the pro bono process will encourage them to return to Nevada. He suggested limited licensure may bring students from the dental community and some others back into the state. He explained if the students fail the boards, making a limited license in dentistry available might help bring them back to the state. He said many dentists he has talked with assert they want the WICHE program because it helps the underserved areas and takes some of the pressure off of them.
Mr. Sparks warned, “California is opening up their big checkbook out there, because they are starting to see an underserved problem out there as well, and they are buying out our students.” He stated it will be a very large issue regarding nursing.
WICHE ADMINISTRATION – Budget Page WICHE-3 (Volume 1)
Budget Account 101-2995
Mr. Sparks stated, “We are extremely happy with our budget.” He indicated the only concern is with travel funds and the ability to get to underserved communities and the Las Vegas area where the largest population is. Otherwise, he said, “For the most part, we were funded fairly generously.”
Mr. Sparks outlined another concern in budget 101-2995 for information services. He said WICHE has not had to spend a lot of money to get the computer program upgraded every time anything goes wrong, but soon the agency will bring a proposal for a new system. He called the current system obsolete. He said it is FoxPRO, which is not user-friendly, although it is computer-friendly to the text. He explained his office cannot make its own changes, which would be beneficial. He reiterated he is pretty well satisfied with the funds the Governor allocated for budget 101-2995.
Senator O’Donnell asked how much replacement of the system will cost. Mr. Sparks replied the entire computer system needs replacement. He admitted his agency has not really looked into the matter, but he knows it is getting to a point where there is a need to do so. He acknowledged WICHE can get by for now, but as computers get more powerful and needs grow, a new system will be needed. He stated the agency will make an evaluation soon.
Senator O’Donnell requested that Mr. Sparks give him a figure when the evaluation is complete. Mr. Sparks agreed to do so.
Senator Raggio noted the budget does not provide for an application fee, but there is a bill that would require a $50 application fee. He asked for comment. Mr. Sparks responded Senate Bill 55 includes a $50 application fee to cover costs.
SENATE BILL 55: Makes various changes to provisions regarding Western Interstate Commission for Higher Education. (BDR 34-814)
Mr. Sparks related students request information from WICHE, go through the application process, but fail to completely fill out their applications. He said the agency must monitor applications and often must call the students, and, he added, somebody needs to bear some of the costs to operate the program. He offered the opinion a $50 fee is fair. He stated he does not like to add any more fees to the other fees that students are paying, but at the same time there is a need for some kind of a requirement for the applicants to fulfill their obligation when they send in an application.
Senator Raggio asked what fields are covered under WICHE. Mr. Sparks replied WICHE covers dentistry, graduate library studies, occupational therapy, physician’s assistants, pharmacy, optometry, “vetmed,” and, he added, the nursing field is being considered. He said the physical therapy program will have the first graduates from Las Vegas, and many of them are going to the Winnemucca area. He reiterated the desire to pursue the need for dentistry services through the Graduate Assistance Program (GAP) requirement.
WICHE Loan & Stipend – Budget Page WICHE-1 (Volume 1)
Budget Account 614-2681
Mr. Sparks commented the reserve category indicates zero, but “it is not necessarily a zero reserve” because the funds will roll forward. He indicated he is not too concerned with that, but he wanted the legislators to be aware that it had been zeroed out. He surmised the Governor gave the agency the ability to get an adjustment in order to pay the bills for the students, and the Governor’s office does not believe it is necessary to have any kind of reserve.
At the same time, Mr. Sparks said, Senate Bill 55 requests the ability to spend funds out of the loan and stipend fund, not just on contract places, but on other needs such as administrative costs. He suggested if an emergency situation arose his agency would be able to expend funds out of that budget, with the approval of the Interim Finance Committee (IFC), to offset any shortfalls.
Senator Raggio asked for an explanation of the difference between the loan student and the stipend student. Mr. Sparks responded the loan student is considered to be the professional exchange student, and that student is required to come back to Nevada, but not required to go to a certain area. He explained they must pay back 25 percent of the funds, plus interest, and they have a 5-year period to complete their obligation.
Mr. Sparks said the health-care access program requires that the students come back to the state without a payback requirement, and they have go to an underserved community. They have to complete their obligations within a 5-year period, and their penalty is much stiffer, with triple the principal.
Senator Raggio asked how long the period of time for repayment is for persons who are required to repay. Mr. Sparks answered the time is based on the total dollar amount. He said it can be from 48 months to 120 months and beyond, with discretion from the commission. He said the agency tracks collections from the students and receives reports every month. He reported the agency reminds them they have an opportunity to fulfill their obligations, to do pro bono work, and they are given credit against their loans. Otherwise, he said, if the students are not willing to do it, they receive no sympathy and the agency goes after them.
Senator Raggio recalled a time when the Legislature received a list of people who had not paid. He remarked it was a bit embarrassing, and asked whether there is a concerted effort being made to recover those amounts. Mr. Sparks answered there is. He said currently the Office of the Attorney General is working to make collections, and he expressed gratitude for the new deputy attorney general working with the agency. He acknowledged there has not been much difficulty collecting from people beyond 30 to 60 days.
Senator Rawson remembered when the collections problem was a constant problem for the state, with funds not coming in and the necessity to allocate supplements. He said the records were not good, and there was a tremendous turn-around in the agency. He requested that staff advise the committee on policy decisions made in the past when the reserve was cut to zero. He expressed concern the Legislature may have to supplement the reserve, but admitted having a little in the reserve might not be a bad idea.
Senator O’Donnell voiced his agreement with Senator Rawson. However, he said, the economic condition of Nevada has caused the Governor to do whatever is necessary to cut expenses and dip into the reserves in order to make things work. He acknowledged that the impact of Indian gaming in California is an unknown factor.
Mr. Sparks agreed but reiterated his request for the authority to spend the reserve funds down, and then if funds remain, use them for other purposes. He repeated his conclusion there will be funds left in the reserve.
Senator Jacobsen asked whether WICHE requires any cosigners. He explained he was asking because a couple of years ago he saw a list with the names of two of his neighbors on it. When he questioned the parents, they said they did not even know that the kids had signed up for the program. Mr. Sparks responded that WICHE does require a cosigner now, and the last of those students who did not have co signors are finishing soon. He agreed that a call to the parents generally resolves the problem.
There being no further business, Senator Raggio proclaimed the committee adjourned at 10:10 a.m.
RESPECTFULLY SUBMITTED:
Judy Jacobs,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: