MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-Second Session
February 7, 2003
The Committee on Ways and Meanswas called to order at 8:09 a.m., on Friday, February 7, 2003. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairman
Mr. Walter Andonov
Mr. Bob Beers
Mrs. Vonne Chowning
Mrs. Dawn Gibbons
Mr. David Goldwater
Mr. Josh Griffin
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Ms. Kathy McClain
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Joyce Garrett, Program Analyst
Mindy Braun, Education Program Analyst
Russell Guindon, Deputy Fiscal Analyst
Lila Clark, Committee Secretary
Carol Thomsen, Committee Secretary
ELECTED OFFICIALS
HIGH LEVEL NUCLEAR WASTE – BUDGET PAGE ELECTED 9
Chairman Arberry said the Committee would start with the budget for the Nevada Nuclear Waste Project Office, Budget Account 101-1005.
Mr. Robert Loux, Executive Director of the Agency for Nuclear Projects, introduced himself and Trudy Stanford, Agency Accountant, Agency for Nuclear Projects.
Mr. Loux started his presentation with an overview of the project and related some of the recent actions that had taken place. He said the Agency for Nuclear Projects consisted of two divisions, a Planning Division, and a Technical Division. It also had a commission that provided guidance to the office as well as policy recommendations to the Legislature and the Governor. The Commission on Nuclear Projects had issued its report to the Governor and the Legislature in the fall of 2001. He said the report contained a fairly comprehensive summary of the activities that had occurred since the last session of the Legislature. It also contained other issues associated with some of the legal briefs that had been filed in the Agency’s court cases. Mr. Loux said Mr. Brian McKay was the Chairman of the Commission and Ms. Michon Mackedon was Vice Chairman. Other members of the Commission were Mr. Steven Molasky, former Senator Richard Bryan, Ms. Myrna Williams, Mr. Larry Brown, and Mr. Paul Workman. The Commission had been instrumental in helping guide not only the Agency’s activities and making policy recommendations, but also helped the Agency work with the law firms that were under contract with the Attorney General’s Office. The Commission had helped manage the issues and helped in the selection of the attorneys currently under contract.
Mr. Loux stated that the Agency also administered, at the request of the Governor, the Nevada Protection Fund. That was an account that had been established by the Governor and funded in part by the Legislature as well as by local governments and other citizens throughout the state. The purpose of the Fund was to support the Agency’s efforts, both in litigation and public relations issues associated with the activities in Congress and the override of the Governor’s veto in spring 2002. The Nevada Protection Fund currently had a balance of approximately $1.9 million available that was being used exclusively to pay legal costs that were being incurred with the law firms under contract.
Mr. Loux said that in February 2002, the Secretary of Energy recommended the Yucca Mountain site for development as a repository for nuclear waste. Shortly thereafter, the President of the United States recommended the site to Congress for development as a repository as well. The federal law, the Nuclear Waste Policy Act of 1982, provided that the Governor of Nevada had the opportunity to issue a “notice of disapproval,” or a veto. The Governor issued the notice of disapproval and the statute provided that Congress, by a simple majority in both houses, could override that veto. That occurred on July 9, 2002, and a resolution was signed by the President in late July 2002. Mr. Loux said that subsequent to those activities, the state had filed several legal challenges against the decision with many of the underlying support documents, such as the Environmental Impact Statement associated with the project. In addition, some of the other federal agencies had established rules and regulations that the Department of Energy must meet in order for Yucca Mountain to be licensed as a repository.
Mr. Loux said the Agency had filed three major legal challenges. The first legal action was filed against the Environmental Protection Agency for establishing radiation standards that were not protective of the citizens of the state as well as protective of the ground water and for setting a performance period that the repository only had to perform a 10,000-year period which was significantly less than the National Academy of Science’s recommendation of a million-year standard and performance period. Mr. Loux said the Agency was also challenging and litigating the Nuclear Regulatory Commission’s licensing regulations for Yucca Mountain. The licensing regulations were designed to assist the Department of Energy in enabling the facility to get licensed as opposed to setting forward objective criteria and standards that the repository must meet in order to be protective of public health and safety. Mr. Loux stated that the Agency had also challenged the Department of Energy’s actions itself. They had challenged the Presidential recommendation, the Secretary’s recommendation, and the two bases for those recommendations. The bases included the siting guidelines that the Department of Energy developed to make the determination that Yucca Mountain was suitable as a repository. The Agency had also challenged the Environmental Impact Statement (EIS) on both procedural and substantive issues. Mr. Loux gave the example that the study had not made an adequate assessment of the national transportation system, nor the transportation system in Nevada. He said no record of decision had been issued from the EIS and there were a number of other flaws that the Agency had challenged. Mr. Loux said the three major lawsuits were almost fully briefed and fully developed. He said the Environmental Protection Agency (EPA) case was fully developed and briefed. The Nuclear Regulatory Commission (NRC) case was approximately halfway prepared and the Department of Energy (DOE) case was also approximately halfway prepared. All the cases would be heard in the U.S. Court of Appeals in Washington, D.C. He said that federal law required any challenges to any act of the Department of Energy to be filed in the federal courts, either in the Court of Appeals or in the 9th Circuit District Court. Mr. Loux said the Agency had chosen the Court of Appeals in Washington, D.C. for the lawsuit it had filed.
Mr. Loux said that he believed all the issues associated with the three lawsuits were interrelated and the Agency had asked the court to hear them in tandem in front of the same three-judge panel. That request had been granted by the court and the suits would be heard in September 2003 in Washington, D.C.
Mr. Loux said the primary issue was that the federal law required that the geologic structure, or the geology of the site, must provide the primary protection over the performance period of 10,000 years. Mr. Loux advised the Committee that in our society there simply was not enough experience with man-made materials, or engineered barriers, metal containers, etc., to know how long they would be capable of lasting. Therefore, the federal law and all the underlying legislative history required the geology as the primary barrier, and adding redundancy or additional protection to the system by having robust metal containers and other engineered measures. The federal law contemplated that those engineered measures only provided protection for the first 1,000 years and after that they would probably become ineffective. Mr. Loux said it was necessary then to rely on the long-term care provided by the geologic structure itself. Part of the problem the DOE faced at Yucca Mountain was in their most recent performance assessment because the site itself and the contribution it had to waste isolation was less than 1 percent of the needed isolation capability. The DOE was currently relying over 99 percent exclusively on the metal waste packages and the containers that the waste would be put in and placed underground at Yucca Mountain for protection for the 10,000-year period. According to Mr. Loux, that was not only a violation of the law but also a violation of the public policy relative to how the issues were looked at in considering the long-term protection of future generations from the hazardous material.
Mr. Loux continued by saying that the Agency had filed more recently a constitutional challenge of the actual recommendation by the President and the subsequent action by the Congress. That issue had not been scheduled for briefing or oral argument. Mr. Loux said it was important to keep in mind that the cases were not evidentiary cases, there were no witnesses, there were no experts, it was merely an interpretation of the statute. Mr. Loux said it appeared very clear to the Agency, and he felt very confident about the cases, that the Secretary’s decision and the Presidential decision would be overturned and thrown out. He believed that the program would then be remanded back to the Department of Energy at some future point in time. Mr. Loux said that looking at the history of activities in the Court of Appeals, he estimated that after oral arguments in September 2003, a decision from the court could be expected in December 2003 or January 2004.
Mr. Loux reported that the Agency was working very closely with the Attorney General’s Office on the issues. In fact, the Attorney General’s Office had a litigation team that the Agency worked with on an ongoing basis to help manage the cases. He said there was also a team composed of all the lawyers that were involved in the cases, both the contract lawyers and those from the Attorney General’s Office. Mr. Loux said he met with the attorneys on a weekly basis to discuss the cases and manage the contracts. Mr. Loux reiterated that he felt very confident about the cases and their resolution and that the decisions made by the Secretary and the President would be overturned.
Mr. Loux continued with his presentation to say the Agency had for some time looked at various transportation decisions that might be made by the Department of Energy in order to facilitate the eventual opening of Yucca Mountain, should it occur. Mr. Loux said that much of the budget from the Department of Transportation and some of the other General Fund appropriations supported analysis of both highway routes and rail routes. In the EIS the Department of Energy released last spring, a number of issues were identified that were important for the state to review. The number one issue was that it had become clear through the EIS that rail was more than likely the preferred option for shipping material eventually to a repository. The difficulty with that issue for the Department of Energy was twofold. One difficulty was that there was no rail access to the Yucca Mountain site. The closest rail access would be from downtown Las Vegas. The other difficulty was that 40 to 50 percent of the reactor sites no longer had rail access either.
Mr. Loux said there would have to be some construction of new rail spurs to some of the reactor sites or, more likely, it would result in a great deal of truck transportation as opposed to rail. Mr. Loux said there were five rail corridors that were identified by the Department of Energy to bring material to Nevada and to the Yucca Mountain site. One route departed from the Union Pacific Line near Carlin, Nevada, building an entire new rail line to Tonopah and then circumventing the Nevada Test Site on the west to Goldfield, Beatty, and into the Test Site. Mr. Loux said another option involved entering at Caliente, Nevada, and then going around the north end of the Test Site, through Goldfield and Beatty, and into the Site. Mr. Loux said the other three options involved departing the main rail line somewhere in the Las Vegas area; one was near Apex and would skirt the north end of the valley and run parallel to U.S. 395 to the Site. The two other options involved traveling through downtown Las Vegas, to Blue Diamond, and building a rail line over the Mountain Springs Pass into Pahrump and into the Site. Mr. Loux said that the Department of Energy had no preference at that point for any one of the options. He estimated that the costs of the options varied with the least expensive option probably being the one that ran across north Las Vegas valley out of Apex. Mr. Loux said all the options probably had a bottom line cost of close to $1 billion and the options from Carlin or Caliente, which were probably the most expensive, were in the several billion dollar range. He asked the Committee to keep in mind that there had not been more than a 30- or 40-mile new rail line constructed in the United States since the 1920s. There had been no acquisition of property, no environmental impact statements, and a lack of expertise. That meant that any construction would be a very long time away. Mr. Loux said he believed that if the plan went forward and the DOE did go with a rail line that at least in the initial period much of the transportation would be done by legal weight trucks. The estimates of numbers of shipments that might eventually be required to ship the entire 77,000-ton maximum capacity of Yucca Mountain to the site was anywhere from 120,000 individual shipments to as few as 30,000 or 40,000, depending on the mode and mix relative to rail and legal weight trucks. Mr. Loux said legal weight trucks utilized the maximum number of shipments in that it was not possible to get the same payload in a truck as was possible in a rail car.
Assemblyman Marvel asked how much nuclear waste was on hand at the present time.
Mr. Loux answered that there was approximately 48,000 metric tons of spent fuel at existing power plants. All of the power plants collectively were discharging approximately 2,000 new metric tons per year.
Mr. Marvel asked what the maximum storage capacity was. Mr. Loux replied, “70,000.” Mr. Loux said it was estimated that after the 38-year transportation period to move material to Yucca Mountain, once the capacity of Yucca Mountain had been reached, there might be as much as another 40,000 or 50,000 tons with nowhere to go.
Mrs. Chowning said that at the present time, no one knew what would be going to Yucca Mountain by rail or by truck but it was known that the infrastructure was not in place and Nevada had no promises from the federal government to do anything about that. She said there were no promises to build bridges or add lanes for traffic. So far, she still had the mental picture that 220-foot trucks would be lumbering down the roads at 20 to 30 miles per hour, spilling over a lane of traffic, with no promises of any remedy whatsoever by the federal government. Mr. Loux replied at the present time he thought that was an accurate description of the situation. He asked the Committee to keep in mind that the Department of Energy had been saying for some time that the earliest any material could move in the country would be 2010. That date had recently been moving out further. In the most recent budget submission that the Department of Energy made to Congress for the 2004 budget it had been indicated that the target date for submitting a license application to the Nuclear Regulatory Commission, which had been December 2004, had likely slipped at least by one year or longer. Mr. Loux said many people, including the General Accounting Office (GAO), believed that even if everything went according to the DOE schedule, it would be more likely in the 2015 to 2020 time frame before any materials would be moving. Mr. Loux commented that the Department of Energy had never adhered to a schedule on that project or any other project. In fact, the DOE had never constructed a facility that had actually worked. Mr. Loux felt there were many obstacles to the project, not the least of which were ongoing budget problems. Much of what the DOE would like to accomplish was difficult because of the existing Congressional budget caps and the DOE’s belief that they would not be able to get the level of appropriation each year that they would like. Mr. Loux said those factors, combined with the legal actions that had been filed by the state, had pushed out the schedule for an undetermined amount of time.
Mr. Loux continued by saying the Department of Energy had produced and released an environmental impact statement in spring 2002 to support the decisions made by the Secretary of Energy. He said that ostensibly the DOE would like to use that environmental impact statement to make subsequent transportation decisions and records of decisions. For example, whether the preferred option was rail or road, which rail corridor and which rail alignment would be selected. The problem for the Department of Energy was that while Nevada had challenged the EIS and suggested it was inadequate and should be remanded, the Justice Department, on behalf of the Department of Energy, had said that Nevada’s lawsuit was moot, the new resolution by Congress overrode the Governor’s veto because it constituted new law and it superseded the Nuclear Waste Policy Act. Mr. Loux said that if the Justice Department was correct, there was no EIS, and if Nevada was correct, the EIS went back to the DOE. That meant the Department of Energy was going to have a very difficult, if not impossible, time trying to make transportation decisions in the short-run from the EIS. Mr. Loux said that either way, whether Nevada was correct or the Justice Department was correct, the EIS either did not exist or must be remanded to the DOE. Mr. Loux said he believed that the DOE had not done an adequate job in the entire environmental assessment area relative to transportation. He also believed the DOE had to do substantially more in the environmental impact arena including route identification, identification of impacts, long routes including the infrastructure issues that Mrs. Chowning had mentioned earlier in the meeting, not only in Nevada but nationwide. That would be necessary in order for the DOE to put forward a transportation plan and make subsequent decisions.
Mrs. Chowning said that it was good news that the timetable kept moving out but in her research she had found that Nevada’s states’ rights were very minimal. She also believed the only regulations that Nevada could put into place were in terms of training, border entry watch, and things like that because Nevada would not be allowed to put in burdensome regulations. Mrs. Chowning stated that the only remedy Nevada had was to go to the court.
Mr. Loux concurred with Mrs. Chowning and said that many of the issues that Mrs. Chowning talked about would have to be addressed at some future point in time. Mr. Loux said the real issue from a policy perspective was that, “We need to keep the ball in the Department of Energy’s court on this issue and not attempt to bail them out by helping them make these decisions. In that way, we may not then be able to legally challenge them.” He said that Nevada needed to first force the DOE to provide some environmental documentation, a transportation plan, and then force them to make tentative decisions about mode, mix, routes, etc. Mr. Loux said the DOE should allow Nevada, along with local governments in other states, to evaluate those decisions to see whether they had been adequately assessed.
Mrs. Chowning said she totally agreed with Mr. Loux, that what he said represented the only responsible thing Nevada could do for Nevada’s future because it would be our children that would have to live with what was done.
Mr. Loux went on to say that he wanted to relate one more issue to illustrate the fact the delay was actually working in Nevada’s favor. He said there was a surface interim storage facility proposed for a site in northern Utah that the Skull Valley Goshute Indians had negotiated directly with several nuclear utilities. The site would be a 40,000 metric ton spent fuel storage area west of Salt Lake City. That facility had been in the NRC licensing process for five years. It was likely to get a license in the following month or two and the company that managed it for the Indians was already advertising nationwide that they would be ready to accept spent fuel at the site sometime near the end of calendar year 2003. Mr. Loux said he believed that might end up providing a safety valve that would take the pressure off to make hard and fast decisions about Yucca Mountain. Mr. Loux said if Nevada prevailed in the court cases that the issues would be remanded to the DOE and the process would have to be done over again. Mr. Loux said at that time if there was an operating 40,000 metric ton facility accepting fuel, that would remove a great deal of pressure from the system and perhaps cause the federal government to rethink its priorities to some extent. Mr. Loux said that several entities in Utah were currently openly advocating for the federal government to build a repository in southern Utah as a means of heading off the building of an interim storage facility.
Mr. Goldwater asked what was being done with the funds the Legislature had allocated for the advertising campaign. Mr. Loux said the Agency had spent approximately $2.9 million. A combination of funds authorized by the Legislature and individual donations matched by the private sector was utilized to finance the campaign. Mr. Loux said that the day before the Committee met he had received another $24,000 in donations to the fund. Mr. Loux said the Agency had subsequently used some of the money donated by local governments to help with the match as well. Mr. Loux said the advertising campaign was over and he had provided a detailed breakdown of expenditures state by state previously to the Interim Finance Committee. He said he had also provided copies of all the advertisements in all the locations where the campaign had been operated.
Mr. Goldwater asked if the campaign was finished and if so, would the funds revert to the state General Fund. Mr. Loux said there were no more expenditures but the Agency was still looking at the reversion issue. He said he was cognizant of it, analyzing it and had not reached a decision about the reversion question. Mr. Goldwater asked who was considering the issue. Mr. Loux said the Governor’s Office, the Budget Office, and his office were considering the issue.
Mr. Arberry asked what was being analyzed on the question of reverting the funds to the General Fund. Mr. Loux said there was a question of whether the Agency could use the funds or had to revert them back to the state General Fund. Mr. Arberry asked when Mr. Loux would know if the funds would be reverted. Mr. Loux said he had hoped that he would know the answer for the present meeting but he did not; he expected to know within one month.
Mr. Beers asked if the lowering of cost to generate energy with solar power had been contemplated in the debate about future storage needs. The use of solar power could presumably end the creation of new waste. Mr. Loux answered that a number of parties in the country, including Nevada, had looked at that issue. He said it would not alleviate the issue of the existing inventory. Mr. Loux said that if nuclear energy became less economical than it currently was to use, a scenario might emerge to leave the material at the nuclear power plants. Those were plants that were dedicated nuclear facilities in dry storage and had been determined to be safe as repositories. All of the existing inventory could be stored at the reactor sites across the country for the next 200 or 300 years without any health and safety implications. The only real reason the push was on to find a repository, in Mr. Loux’s opinion, was that the nuclear energy industry believed it was on the verge of some revival of the industry and would like to build new generating facilities but knew they could not as long as the waste was stored at the sites. Mr. Loux reported that the industry had an impact on what actions Congress would take and the industry believed that the waste had to be removed in order for the industry to have a revival. Mr. Loux said there were many people in the other energy industries that believed it was not reality, but it was an issue that people were reviewing.
Mr. Arberry asked if there was currently any waste being transported. Mr. Loux said there was currently about one or two spent fuel assemblies per year that traveled through Nevada either from places in the East, California, or back from California where some research had gone on, back to the power plants. Those would be very small and very infrequent. On the low level waste side, the Department of Energy had established the Nevada Test Site as one of the two or three low-level waste disposal areas in the country for low level waste. There were between 230 to 250 shipments annually to the Nevada Test Site that traversed some portions of Nevada through routes that had been negotiated and designated with the Department of Energy and the Governor, primarily avoiding the Las Vegas valley. Mr. Loux said there were 80 to 90 shipments of transuranic or intermediate level waste that currently existed at the Nevada Test Site waiting to be shipped to the Waste Isolation Pilot Plan (WIPP) facility in New Mexico. Those had been on hand for some time and would probably leave the Test Site and go directly south into California across I-40 or I-10, as the case might be, to New Mexico. Mr. Loux said that was the extent of the shipments.
Mr. Arberry asked if Mr. Loux anticipated any increases over the next three years. Mr. Loux said there would be no dramatic increases in the low level waste arena. He reiterated there might be some shipments of intermediate waste leaving the Test Site and going south.
ELECTED OFFICIALS
ENERGY CONSERVATION – BUDGET PAGE ELECTED 17
Carl Linvill, Ph.D., Director of the Nevada State Office of Energy, and Economic and Energy Advisor, introduced himself. Dr. Linvill said that at the beginning of the 2001 Legislature, energy supplies in Nevada were not very secure. Blackouts were rolling through California, a serious gas pipeline break had been suffered that was affecting the price of gas, and he had found out since that time that there had been some anti-competitive activities on the part of large gas and electric companies. He said the price of electricity and natural gas was reaching unprecedented levels in the western states. Since the implementation of the Governor’s Nevada Energy Protection Plan, announced on February 17, 2001, and the legislative action that had taken place in the 2001 Legislative Session, there had been no significant power outages. The Governor’s Plan and legislative action stopped the divestiture of utility generation assets and reinstituted deferred energy accounting. It encouraged the investment of hundreds of millions of dollars in additional energy infrastructure, which would result in 780 megawatts (MWs) of new electricity going on-line in southern Nevada that year and 1,120 megawatts of new electric capacity going on-line in southern Nevada the next year.
Dr. Linvill continued by saying the plan and legislative action had supported the construction of the Centennial and Falcon-Gonder transmission lines, and resulted in the implementation of the renewable portfolio standard. That had resulted in contracts that were still pending Public Utility Commission (PUC) approval for 130 megawatts of wind, 97 megawatts of geothermal power, and 50 megawatts of solar energy. It expanded the fuel and natural gas supply in Clark County, and it supported conservation and energy efficiency improvements. It also contributed to garnering more than $4 million in energy efficiency and renewable energy grants for people and entities in Nevada the year before.
Dr. Linvill stated that the further implementation of the Governor’s Plan and the Comprehensive Energy Plan that was called for in A. B. 661 of the Seventy-first Legislative Session were discussed in the “Energy Status Report.” Dr. Linvill said the Committee members had received a compact disc (CD) the week before containing the “Energy Status Report.” Dr. Linville stated that the activities that were discussed in that report, the activities that constituted the forward movement in the Governor’s Plan and the implementation of the Comprehensive Energy Plan for Nevada, involved no budget enhancements to his office. There were no additional funds from the General Fund for the office staff requested and currently the only General Fund support for the office was for Dr. Linvill’s salary. The remaining budget for the office came from a federal grant that was cost-shared out of the Petroleum Violation Escrow Fund. There was no General Fund support requested for office projects and activities.
Mr. Arberry asked Dr. Linvill to provide the Committee with an overview of the office.
Dr. Linvill referred the Committee to the “2003-2005 Budget Presentation to Assembly Ways & Means,” Exhibit C. Dr. Linvill said there was a description of the Governor’s Energy Protection Plan on page 2 of Exhibit C that had been based upon the recommendations of the Nevada Electric Policy Committee. Dr. Linvill said there were five basic components to the plan including:
Mr. Marvel asked what the Agency was doing to develop alternative energy sources. Dr. Linvill responded that that was a large part of the Agency’s activities. He referred the Committee to page 11 of Exhibit C, box 1-3. He said there was an itemization of the renewable portfolio standard contracts that had been submitted to the Commission for approval. Dr. Linvill said that was one advance that had been made in the area of alternative energy development. He then referred the Committee to box 1-4 on page 11 for a list of grant activities that had occurred in the Agency. Dr. Linvill described the first item as especially interesting. The Agency had worked with individuals from the research institutions in the state and the NTS Development Corporation to secure a grant that had brought $3.2 million to projects in Nevada. Those projects included several solar projects in southern Nevada, integrated building efficiency and solar projects in southern Nevada, investigation of geothermal resources in northern Nevada, and improving upon resource mapping of wind potential in northern Nevada.
Mr. Marvel asked if anything was being done to develop the energy. Dr. Linvill stated that the Agency had participated in discussions involving expansion of transmission to facilitate renewable energy resources in the marketplace. Many renewable resources were not proximate to the existing grid. A cost challenge to developing renewable energy in Nevada was how the renewable resources would get to market. Dr. Linvill said the Agency was participating with developers and groups that advocated the promotion of renewable energy to consider transmission alternatives that could make the development of more renewable resources economical.
Mr. Marvel asked if alternative resources were being developed at the Test Site. Dr. Linvill responded that the Test Site had an 80-megawatt wind project that looked like it would be the first wind project in Nevada. At the very end of the permitting process, after MNS Wind had entered into a contract with Sierra Pacific Power Company, a concern was expressed by the federal government regarding military implications at the Test Site. He said it was believed that the wind turbines could somehow affect the ability to take on the military activities that needed to happen at the Test Site. Dr. Linvill said that was as specific as the explanation had been but it “killed” the project.
Mr. Marvel asked if there were any new geothermal projects. Dr. Linvill referred the committee to page 11 of Exhibit C, box 1-3. There was a 25-megawatt (MW) geothermal project in Desert Peak, Nevada, that was being built by Ormat and was expected to go on-line in late 2004. He continued by describing the Hot Sulfur Springs 25 MW geothermal project in Elko County. Dr. Linvill said the Steamboat IV project was a 62 MW geothermal project in Galena, Nevada.
Mr. Marvel asked how many megawatts of geothermal electricity were being generated. Dr. Linvill said he believed it was approximately 190 MWs. Of that 190 MWs, approximately 130 of it benefited Nevada directly and 60 MWs was exported over a dedicated transmission line to southern California.
Mr. Arberry indicated that the Committee would next hear the Secretary of State’s budget, Budget Account 101-1050.
ELECTED OFFICIALS
SECRETARY OF STATE – BUDGET PAGE ELECTED 80
Mr. Dean Heller, Secretary of State, introduced himself, and introduced Ms. Renee L. Parker, Esq., Chief Deputy Secretary of State; and Janice Webb, Web advisor for the office, who would do the slide presentation.
Mr. Heller started his presentation by paraphrasing the immortal words of Yogi Berra, “Budget preparation is 90 percent perspiration and the other half is inspiration.” Mr. Heller said that having sat on the legislator’s side of the table, he understood the difficulties the Committee went through and he assured the Committee that the budget his office presented would not add to the complications.
Mr. Heller said he would provide a brief summary of the activities in his office. He referred the Committee to Exhibit D, the “Secretary of State Biennial Budget Request, FY 2004-2005.” Mr. Heller said everything he would present to the Committee in his slide show was included in Exhibit D. Mr. Heller said the executive summary was designed to show the continuing growth in the Secretary of State’s Office. Due to some increases in fees made by the 2001 Legislature, the Office had seen an overall revenue increase of 30 percent. He said his office continued to generate $6 of revenue for each dollar of expenses. Mr. Heller said one of the performance indicators his staff had endeavored to review was how much revenue was produced versus the expenses in the Office. Charts in Exhibit D graphically illustrated revenues and expenses. He referred to a chart in the slide show, which was not included in Exhibit D, that showed what the projected revenues would be if the 50 percent fee increases built into The Executive Budget were adopted.
Mr. Heller stated that the Office used as a performance indicator the dollars generated per employee in the Office. He said the dollar amount per employee had more than doubled since he took office and was anticipated to almost triple if The Executive Budget was approved in its present form.
Mr. Heller continued with the slide show and looked at the annual new filings of all types of entities. He said the filings had been “flat” over the preceding three years. Mr. Heller said the bad news was that the filings were flat, but the good news was that most other major competitive states had been down 25 to 40 percent. He said that although Nevada was flat, it had still outperformed most of its major competitors such as Delaware, New York, Florida, and Texas. He said Nevada was doing well when compared to the other states.
Mr. Arberry asked if Nevada was outperforming other states that had outperformed Nevada in the past. Mr. Heller said that, for example, Delaware had done a tremendous amount of business when it came to incorporating, and it was down over 25 percent during the previous biennium. He said Delaware was very competitive and its fee structure was very different from Nevada’s, but the fact that Nevada maintained its status quo as opposed to states like Delaware, New York, Florida, and Texas, that lost ground, made him feel that Nevada’s performance was positive.
Mr. Heller said that over 52,000 business entities had filed in fiscal year 2002. There had also been over 300,000 total filings in the Commercial Recordings Division that produced nearly $43 million in revenue in that fiscal year. Mr. Heller said the Office had a “money-back guarantee” that was one of the performance indicators relating to the efficiency and effectiveness of the Office. The fact that the “money-back guarantee” that had been in place since 1997, guaranteeing at least a ten-day to two-week turnaround period, showed that the Office stayed steady and that the expectations from the general public as to the kind of service they wanted from the Office had been maintained. Mr. Heller said there had only been six refunds since the guarantee program had been put in place. Mr. Heller went on to say the Office had maintained a two- to three-day turnaround on most non-expedited filings, down from six to eight weeks five years previously. Mr. Heller said the Office had a two-hour expedite program that cost $500 per filing and he had been unsure how many people would use that service. He said that since August 2001, there had been over 300 requests for that service. Mr. Heller commented that when a company was paying attorneys $500 an hour, the company might want to have the paperwork processed as quickly as possible to save money. Mr. Heller said the expedited service had become a service that the public had used and he believed it would be used more in the near future.
Mr. Heller said other milestones included all of the Office’s forms being available on the Web site. He said their business entity database that allowed attorneys, realtors, and banks to do searches on corporations were available on the Web site at no charge. Mr. Heller said some states charged for those services and his office had received a tremendous number of compliments regarding the fact that Nevada’s Web site was so easy to use and that the availability of the information was at the public’s fingertips at no cost.
Mr. Heller said the Office had developed and employed the revised Article 9 compliant processing system that had moved the responsibilities from the local governments to the state. He said that had resulted from federal legislation. He went on to say that the Office was currently developing a fully integrated processing system, which he believed would be completed in the 2003 calendar year. The Uniform Commercial Code (UCC) and the accounting system had been completed and the Office was shifting from the UCC to the Commercial Recording System after the Web portion of it was developed. He said that was slowly moving in the right direction and he anticipated it to be completed in calendar year 2003.
Mr. Heller pointed out to the Committee that voter turnout had been up 10 percent over the last two election cycles from the previous two election cycles. He said that the Office did not compare presidential years with non-presidential years because there was a substantial voter increase during a presidential cycle. Mr. Heller said the Office had compared non-presidential years with non-presidential years and presidential years with presidential years to calculate the 10 percent increase over the previous two cycles.
Mr. Heller said the Elections Division had goals shown in Exhibit D including administering the Help America Vote Act (HAVA). He said that would be discussed further in later meetings before the Legislature. Mr. Heller said that with that Act came the statewide voter registration system that had been mandated by the federal government. Mr. Heller said there were some campaign finance reforms in Bill Draft Request (BDR) 558 and his office was upgrading voting systems throughout the state. He said it was mandated by the HAVA that the punch-card voting systems be “bought out.” Other goals of the Elections Division included the Voter’s Bill of Rights, BDR 270, and Election Day Registration, BDR 560. Those projects would be considered by other committees of the Legislature.
Mr. Heller continued his presentation with a discussion of the Help America Vote Act of 2002 (HAVA). That federal legislation was very broad and affected the Elections Division. Numerous requirements would change for all Secretaries of State’s offices. The federal legislation said the voting process would no longer be the counties’ responsibility and if the Department of Justice investigated, it would investigate the Secretaries of State’s Offices rather than the county offices, which they had done in the past. If the Department of Justice sued anyone, it would sue the state, rather than the county. The responsibility had moved up to the Secretary of State’s Office. Mr. Heller said that with the new responsibility came an authorized $3.8 billion in federal funds. He hoped the funds would materialize but that was subject to appropriations and yet to be seen. Mr. Heller said his office was required to develop a state plan.
Ms. Giunchigliani asked if the state was required to match the federal funds. Mr. Heller responded that there was a $2.4 million appropriation included in The Executive Budget for a statewide voter registration system. Mr. Heller said that could be reduced to $1 million.
Ms. Renee L. Parker, Esq., Chief Deputy, Office of the Secretary of State, introduced herself. She pointed out that the $2.4 million was included in decision unit E-301 of the budget. She directed the Committee’s attention to Exhibit E, a letter dated February 7, 2003 to Assemblyman Morse Arberry Jr., Chairman, and signed by Renee L. Parker, Chief Deputy Secretary of State. She said the budget had been submitted in September 2002 and that was prior to the President signing the Help America Vote Act (HAVA). Because of the signing of the Act, the state matching fund appropriation could be reduced to $1,022,223.
Ms. Giunchigliani offered that the Elections Committee could contemplate what a statewide voter registration system might look like. She said there were many options to consider. Mr. Heller said there had been much consternation over how the system would go forward because both Washoe County and Clark County had just installed new systems and now it was being said that there should only be one statewide system. There had been an argument regarding which system and which vendor should be used. Mr. Heller said effort would be needed on the part of all county registrars and the Secretary of State’s Office to work out the details of the project. Mr. Heller stated that that was part of the development of the state plan. The federal legislation required a state plan in order to receive the potential $25 million that Nevada could receive. Mr. Heller said the plan must be certified by the Governor, sent to the federal government for certification, and at that point Mr. Heller’s office could determine whether Nevada qualified for Nevada’s portion of the $3.86 billion in federal funding. Mr. Heller reiterated that there was a requirement for the state to contribute approximately $1 million in order to receive the federal appropriation. Mr. Heller said he had sent letters from the Secretary of State’s Office to urge the establishment of an Election Fund. In order to receive the dollars, the federal government required that there must be a separate fund established and Mr. Heller acknowledged that Senator Raggio and Mr. Arberry had been working on that.
Ms. Giunchigliani said that it appeared to her that the Secretary of State’s Office had requested $2.4 million from the General Fund but it was currently “zeroed” out. She said that would leave the Office approximately $1.2 million short. Ms. Parker agreed with Ms. Giunchigliani and said the $1.2 million request had been an amendment to the agency’s request rather than shown in The Executive Budget. Ms. Giunchigliani said it was important to make that clear for the record because the Governor had not recommended any funding for the project, leaving the Office short $1.2 million.
Mr. Heller continued his presentation with the discussion of the Securities Division. He said there had been growth in the Broker-Dealer branch offices, both Nevada-based and branch offices for national offices. Mr. Heller said his office had not seen growth in the total number of sales representative’s licenses in the state. Mr. Heller said the decline had to do with the current market status and the fact that there had been three years of downward movement in the market overall.
Mr. Heller reported the goals for the Securities Division. Mr. Heller said his office continued to perform routine audits of brokers and investment advisors every two years. That had always been a goal of the Office and had been presented to the Legislature as a goal in the past. Mr. Heller said another goal was to expand the investor education program. He said that was very similar to what the Securities Exchange Commission (SEC) had done. Mr. Heller said the number of complaints to his office had risen due to investors and those involved in the markets looking more closely at their statements and concerned about the activities within their portfolios. Mr. Heller said to offset the complaints his office had tried to expand the investor education program. He said the Office continued with its education program by sponsoring the Economic Education Entrepreneurship Program and the Web-based stock market game for students. The final goal mentioned by Mr. Heller was to deter fraud through public awareness of enforcement activities.
Mr. Goldwater disclosed that he held a Series 7, 63 and 65 license and was regulated by the Secretary of State’s Office.
Mr. Heller continued his presentation with a discussion of the Customer Service Division of his office. He said there were approximately 500,000 documents filed yearly through his office, including commercial recordings, securities, notaries, etc. That led to a large number of telephone calls. Mr. Heller said the Office received an average of approximately 500 calls per day but on some days they had received 1,000 calls. He said he had a staff that specifically answered telephone calls and the Office had a goal of 80 to 90 percent pickup of calls. If the call was not picked up the caller would be placed on hold for a few minutes until the next available employee could answer the telephone. Mr. Heller said his staff was working very hard to maintain that level of service. He said that if a caller called most states, he would reach a telephone tree and end up leaving a message for the Secretary of State’s Office to call back within 24 hours. Mr. Heller reported that most people calling his office were able to talk to a human being, rather than a telephone tree, and that had been greatly appreciated by banks, attorneys, and others.
Chairman Arberry complimented Mr. Heller on the telephone system. Mr. Heller said he had been tempted from time to time to go to a telephone tree but he believed that would not enhance the image of the Office and he had not done it.
Mr. Heller said some of the downward trend in telephone calls could be explained by the increase in the activities of the agency’s Web site. He said that there had been growth in the use of the Web site from 1998 to 2002. Mr. Heller said the Office averaged 40 million hits per year and he expected the use would be much higher than that in 2003. He said 40 million hits per year equaled approximately 150,000 to 200,000 sessions of people actually doing business on the site.
Mr. Heller reviewed the statistics provided by the Notary Division. He said there had been 7,431 notaries appointed in fiscal year 2002 and 8,752 total Apostilles issued in fiscal year 2002. Mr. Heller said 2,075 notaries had been trained since implementation of A. B. 266 of the 2001 Legislature. That bill had allowed the Secretary of State’s Office to charge a fee to train people. He said that the Office currently charged people to attend notary training and he had seen a dramatic increase in the number of people who wanted to be trained when they found out the Office charged for the training. Mr. Heller jokingly said he thought that perhaps the Office had not charged enough for the training and maybe the fee should have been doubled, which would have resulted in 4,000 people being trained. Mr. Heller said that the irony of the increase in requests for training along with the charge for training never failed to amaze him.
Mr. Heller continued his presentation with information about the Technology Division. Mr. Heller said the Division was moving from a processing agency to a high-tech division. He said that could be seen by looking at the activities on the Web site. Mr. Heller discussed the Electronic Secretary of State Program (E‑SoS). Mr. Heller said he believed that by the end of calendar year 2004, a majority of the program should be online. He said the program had been delayed from time to time. The Office had contracted with Sterling Software, which had been bought out by another software company. The new software company, Northrup Grummond, had been somewhat concerned with the contract and all the promises that Sterling had made to the state. Mr. Heller said that his office had had to deal with the Attorney General’s Office and the Department of Information Technology, to get the program back on track. Mr. Heller said he believed that Northrup Grummond was working very well but to assure they were working well and were committed to that particular project, they had been removed from all Master Services Agreement (MSA) lists in the state of Nevada. They were no longer allowed to do any business with any other state agency until they completed the Secretary of State’s project to Mr. Heller’s satisfaction. Mr. Heller said Northrup Grummond’s “feet would be held to the fire” and he had every reason to believe they would work diligently and complete the project. Mr. Heller assured the Committee that the problems with the project had cost no additional dollars to the state but there had been some out-of-pocket costs to Northrup Grummond to get the system online.
Mr. Heller stated that the accounting system was in place and the UCC system was in place. Mr. Heller expected that the Web portion of the system would be completed in February or March 2003. After that, the commercial recording system would go online followed by the Web portion of that system. Mr. Heller said the largest component of the system would be the commercial recordings but the UCC was the pilot program that had been put in place. He said the commercial recording system would be a spin-off of the UCC system. Mr. Heller said he was comfortable that the project was going in the right direction and there would be “big” results by the end of calendar year 2003.
Mr. Heller said other SoSTEK projects going forward would cause strain for his technical staff, including the statewide voter registration system and election night reporting. According to Mr. Heller, there had been “glitches” in the election night reporting due to the dramatic number of hits to the Web site compared to the number in the election cycle two years prior. He said that the Office had to prepare itself well for the next presidential race. Mr. Heller reported that the online contribution expense reporting was well received by those who used the system, even though it had a few “glitches,” but overall, the system had received positive comments. Mr. Heller said he had used the system as well as approximately 60 other candidates. Mr. Heller said the candidates found the system to be user-friendly and helpful.
Assemblywoman Chowning commented on the online contribution expense reporting. She said there was David Parks, and “the real David Parks.” Mrs. Chowning said that recently in reviewing those reports the “other David Parks’” information was shown on the most current filing rather than information for “the real David Parks.” Mrs. Chowning asked if the reporting was a “glitch” or if one of the David Parks had filed online or by mail. She was concerned because the information was not accurate. Mrs. Chowning said that everything else seemed to have vastly improved but she had a concern with the online contribution expense reporting. Mrs. Chowning said that even recently the information on the site was for “the other David Parks,” rather than for “the real David Parks.” Mr. Heller answered that if information came into the Office it was not subject to audit by the Secretary of State’s Office. If paperwork came in from “the real David Parks” and the “non-real David Parks,” the office did not have the authority to audit or determine whether it should be on the Web site. Mr. Heller said his office automatically took all the information to the State Library for scanning and then immediately put it on the system. He apologized for any confusion that had occurred but reiterated that if paperwork was sent in and it was a report from the “non-real David Parks,” it would go on the system anyway until the Secretary of State’s Office had the authority to determine whether it was legitimate paperwork to actually be on the Web site.
Mrs. Chowning said the point was that there were not two individuals’ reports on the system. Mr. Heller said he would review the situation to determine what the problem was and correct it. Mr. Heller said that the information was not put into the system until it had been transmitted to them from the counties. He said he would determine if the “glitch” was on the part of his office or transmitted incorrectly from the county.
Assemblywoman Leslie revealed that she had used the online reporting system and it had worked great the first time. When she tried to go to the second and third report it would not carry forward the correct totals and she happened to notice that it was wrong. Ms. Leslie said she had to print it out, white it out, and redo the totals manually. Her complaint was that she had called the Office twice to report the problem and no one called her with possible solutions. Ms. Leslie said she wanted to put on the record that she had not been able to complete the second and third reports online. Ms. Leslie said that someone from the Secretary of State’s Office had told her on the telephone that they were going to contact legislators who had used the system. Ms. Leslie asked if anyone from the Secretary of State’s Office would be contacting those who had used the system for input on improving the system because she had ideas on how it could be improved. Mr. Heller pointed out that the online reporting had been a pilot program, not an official elections site, and he appreciated that Ms. Leslie had participated. Mr. Heller apologized for any inconvenience that had been caused and said the Office had sent out a survey for those that used the system. Ms. Leslie said she did not believe she had gotten a copy of the survey. Mr. Heller said he would supply a copy of the survey to Ms. Leslie. Ms. Leslie said she had not filed online because the totals were incorrect and she was afraid to file the report online because of the incorrect totals. Ms. Leslie believed it was a great idea and much easier than typing the report. Ms. Leslie said she was aware that there was a bill that would require online filing and she said the problems with the system should be repaired before its use was required.
Assemblyman Beers disclosed that he had long before computerized the process of reporting contributions. He said that the Web system would be duplicate effort on his part and, before it was made mandatory, there should be a format in Excel or Access or another electronic format that could be used to export his data into the system to be e-mailed to the Secretary of State’s Office.
Mr. Heller continued discussing the SoSTEK projects by reviewing the need for new technology positions. Mr. Heller said he wanted to ensure the timely completion of the projects he had previously discussed and he wanted to reduce the increases that had occurred in employee overtime and employee burnout. Mr. Heller said the Office had lost a couple of employees to other agencies due to employee burnout, especially staff that worked on the network and had to deal with over 140 personal computers (PCs). Mr. Heller said that the Department of Information Technology recommended one employee for every 50 PCs and his office had one employee for over 140 PCs. Mr. Heller said that the burnout was too high. When employees had the opportunity to go to another agency where they did not have to service so many PCs they went. Because of that, Mr. Heller included in the budget a recommendation for 2.5 new employees and 2 of those positions would be tech positions that were federally funded through the HAVA dollars, if those dollars did become available. Mr. Heller said the budget proposed the reclassification of two clerical positions to technical positions and that reclassification would be requested at the next meeting of the Interim Finance Committee (IFC). According to Mr. Heller, those two reclassifications would greatly enhance the ability of the technical staff to complete the tasks ahead of them.
Assemblywoman Chowning asked Mr. Heller if he was sure the positions that were requested would be federally funded. She had a concern that if the positions were not federally funded, they would require funding from the state’s General Fund. Mrs. Chowning also wondered what would happen to the positions once the Secretary of State’s Office had completed the duties necessary for the Help America Vote Act.
Mr. Heller responded that the two tech positions would be necessary in order to service the statewide voter registration system that would be housed in the Secretary of State’s Office. He said the Legislature needed to approve the matching dollars in order to receive Nevada’s portion of the federal HAVA funds. Mr. Heller said those dollars would not have to be spent in the biennium, they just needed the authority to keep the dollars in place and the positions established.
Mrs. Chowning asked if Mr. Heller was certain that the federal dollars could be used to fund positions and Mr. Heller answered affirmatively. He said there were two positions that would be federally funded. There were actually four positions, however, two of the positions were upgrades from Grade 25 to 35 positions and those were the positions that would be considered for upgrade by the Interim Finance Committee. Mr. Heller said those upgrades would relieve the stress on the agency. One of the positions would come from the Uniform Commercial Code (UCC) Division because the new SoSTEK project had relieved some of the stress in that division. The other position was a vacant position that would be upgraded also. Mr. Heller said that plan would relieve the stress in the Office without using additional dollars or new bodies because the Office was going more toward a technical office with the implementation of new computer applications as opposed to a processing office.
Mrs. Chowning asked how the pilot program to decentralize data processing was going. She asked if certain positions had been transferred into the Secretary of State’s Office from DoIT. Mr. Heller responded that the positions had been transferred into his office during the last session of the Legislature. He said the Office was trying its best to get off DoIT’s mainframe computer but was not there yet, although he believed that would be accomplished later in the calendar year. Mr. Heller said the new tech positions being requested would relieve stress from the current seven positions in removing the Office from DoIT’s mainframe when the new commercial recording system went online.
Mrs. Chowning asked if the decentralization was working well and if there had been any cost savings. Mr. Heller said there would be cost savings and he was very comfortable with the direction the decentralization was going.
Mrs. Chowning asked if the positions that had been transferred from the DoIT during the last legislature could do some of the current required work rather than adding new positions. Mr. Heller said that there were so many new duties and applications, such as the statewide voter registration system, the election night reporting, and the online reporting system, that were being put into the Division that the employees were not able to keep up with all the work.
Chairman Arberry asked when the Office would achieve some cost savings. Mr. Heller responded, saying that the DoIT charged the office approximately $150,000 per year to be on their mainframe and once the Secretary of State’s Office was off the mainframe that would definitely be a savings. Chairman Arberry asked when that might occur and Mr. Heller said sometime in the current calendar year. Mr. Heller said the new E-SOS system should be online by the end of calendar year 2003 and he hoped the Office would be able to get off the DoIT mainframe in 2003. Mr. Arberry asked Mr. Heller to advise the Committee of the date as soon as he knew it. Mr. Heller said he would be happy to share the projected dates for completion of the system. Mr. Heller pointed out that it was difficult to pin down time frames with technology projects but he believed he could estimate the date within a two- to three-month time period.
Chairman Arberry asked for confirmation that the HAVA positions could be funded with federal dollars and wondered what would happen when the funding ran out. Mr. Heller said $25 million was allocated for the project and the question of how to fund the positions would be a question to be asked two or three years into the future when the funding ran out. He said that at that time he might need to return to the Legislature to request General Fund dollars in order to maintain those positions.
Assemblywoman McClain asked Mr. Heller to clarify whether the federal government had to approve the state plan prior to the state receiving the funds. Mr. Heller answered that the federal government had to certify the plan and that the individuals participating in the state plan had met earlier that week. Mr. Heller said the 13 individuals working on the state plan included a representative from Speaker Perkins’ office, Senator Raggio’s office, the Governor’s Office, the registrars from Clark and Washoe Counties, the American Civil Liberties Union (ACLU) Plan, and minority or disability groups. Mr. Heller said there were approximately 13 points in the plan and the plan would be completed by May 2003. All the points of the plan would have to be addressed in order to assure disability and minority groups access to vote.
Ms. McClain said she was concerned about using General Funds as matching dollars for federal dollars if there was any chance that the federal funds might not be approved. Mr. Heller said there was a question about adding matching funds to the federal funds. He said the state would receive $5 million in Title I funding with no requirement for matching funds or any other requirements. The other $20 million federal funds would require a 5 percent state match. Mr. Heller stated that the funding would be discussed fully in the Elections and Procedures Committee during a discussion on what options were available for Nevada and what the impact would be on the election process in Nevada if the matching dollars were not allocated.
Chairman Arberry asked if Mr. Heller had a listing of the current fees charged by the Secretary of State’s Office as well as the fees proposed in The Executive Budget. Mr. Heller responded that the Legislative Counsel Bureau had received a copy of the current fees and the proposed 50 percent increase the prior week. Mr. Heller said he would supply the information to the Committee.
Chairman Arberry continued by asking for information on the amount of revenue that would be generated by the proposed increase in fees. Mr. Heller said The Executive Budget anticipated an increase of $30 million in the budget if the status quo was maintained in the Office, in other words, that there would be no decrease in the number of filings in the Office due to the 50 percent increase. Chairman Arberry asked Mr. Heller to provide details on the proposed increase in fees and the associated anticipated revenue increases.
Chairman Arberry asked Mr. Heller how the proposed increased fees would compare with other states. Mr. Heller answered that his office continually compared Nevada’s fees with other states and he believed that Nevada might be going outside the market on some of the fee increases. He said he believed there would be some corporations that would choose to go to other states, such as Delaware, that were more competitive. Mr. Heller said the fees charged by Delaware and Wyoming would be lower than Nevada’s fees and businesses considering where to incorporate would go to the states considered to be more competitive. Mr. Heller stated that Nevada might be at the point where it was starting to lose its competitive edge. He pointed out that the revenue projections were subject to the same number of filings as had been previously made and if there was a decrease in the number of filings in the office that would affect the revenue flow.
Chairman Arberry asked if Mr. Heller had worked with the Governor’s Office to develop the proposed schedule of fee increases. Mr. Heller said he had not worked with the Governor’s Office on the development of the proposed fee schedule. Mr. Heller said he asked the Governor’s staff if the Secretary of State’s Office could assist but that had not occurred. Mr. Heller said he believed there were some “glitches” in the proposal. The Governor wanted the new fee schedule implemented by April 1, 2003, and the Secretary of State’s Office needed 90 days to implement a change. Mr. Heller said his office had already sent out the mailings for April annual filings and if the new fee structure was started April 1 the reports would arrive in his office with the wrong amounts paid and have a 100 percent rejection rate. Mr. Heller said DoIT would need at least 30 days to program the changes and his office would need 60 days after that to prepare the lists of annual filings. Mr. Heller said there were some complications to be considered and he wished his office would have been advised of the proposed changes so the problems could have been worked out.
Chairman Arberry asked how the 50 percent increase had been determined knowing that rate might hurt Nevada’s competitiveness with other states. Mr. Heller stressed that he had had no input on the amount of the proposed increase in fees. He had not been asked what impact a 50 percent increase in fees would have on the state. Chairman Arberry asked Mr. Heller what his recommendation would be for fee increases and Mr. Heller said he had no recommendation. He said he believed the Governor had taken the recommendation from the Governor’s Task Force on Tax Policy in Nevada that had met during the interim and the Task Force had not contacted his office to determine the impact of the proposed fee hikes. Chairman Arberry asked Mr. Heller to get back to the Committee with a recommendation on fee hikes. Mr. Heller said he believed the Committee was going to be presented with some alternative recommendations that the actual new filing itself be at a reasonable rate, and then the annual renewals would pay additional fees to generate the same amount of revenue but still be competitive with other states at the front end. Mr. Heller said some of the proposals that could emerge in the current session of the Legislature were based on the capitalization within the corporations themselves and those would be progressive filings. He was unsure what the impact of that type of plan would be on the Office. Chairman Arberry reiterated that he would like Mr. Heller’s recommendations and asked when Mr. Heller could supply that. Mr. Heller said he would be meeting with the Resident Agents’ Association the next week and some alternatives might be suggested at that meeting. Mr. Heller said he might not necessarily endorse such a plan but he would like to bring two or three different alternatives to the Committee for consideration.
Chairman Arberry asked Mr. Heller how many positions were being requested in The Executive Budget. Mr. Heller responded that the request was for two upgrades to positions, two federally funded positions, and one half-time position.
Assemblyman Hettrick said he had concerns regarding the proposed increases in filing fees. He said he had spoken to Assemblyman Brown about the issue and Mr. Brown said that his brother-in-law in Las Vegas was an attorney and acted as a resident agent for foreign corporations that filed in Nevada. Mr. Hettrick said that the attorney had reported that merely the mention of increases in certain taxes that had been enumerated in the Governor’s State of the State Address had reduced his business. Mr. Hettrick reported that he had met with the resident agents, who were proposing a different fee schedule. Mr. Hettrick said he hoped that the Resident Agents’ Association meeting with the Secretary of State would produce a plan that both would agree would have less impact on Nevada’s ability to have foreign corporations continue to file in Nevada. Mr. Hettrick said he believed that if the Legislature adopted the fees as currently proposed Nevada would see a reduction in filing that would probably have a negative impact. He said he did not believe it would go negative with the increase in rate but it would have a definite negative impact on the number of businesses filing and might ultimately cause less revenue to be received. Mr. Hettrick again expressed his concern and said that the Secretary of State should be deeply involved in determining the impact on the state.
Mrs. Chowning asked for support documentation explaining why a full-time position was needed for the Confidential Address Program (CAP). Mr. Heller said he would provide that information. He said the program had started in 1998 and in that year there had been one filing. In 1999 there had been 12 filings with 10 additional filings in fiscal years 2000 and 2001. Mr. Heller said that at that point, the office started a training program. The Legislature had provided some funding for travel to help organizations understand what the CAP was and how it worked. Mr. Heller said that in 2002 there had been an increase of 23 additional filings and in fiscal year 2003 there had been an increase of 63 new filings. Mr. Heller anticipated that the growth of the program would continue as people became aware of it. Mr. Heller said the increase from FY2002 to FY2003 had been almost 300 percent and he anticipated that would continue to be the rate of growth over the biennium. Mr. Heller said, as his staff was able to educate some of the individuals that needed the program, he anticipated the growth to be substantial.
Mr. Goldwater asked if it was possible to identify the people who came into Nevada that were simply non-contributing users of state services that cost the state money. Mr. Heller responded that the current DoIT system did not allow the data to be broken down to identify what services were used by individual businesses. Mr. Heller said most of the businesses that filed in the state did not require services and that was not information that was required to be submitted when a business applied for corporate status in Nevada. Mr. Heller said it was very difficult to answer Mr. Goldwater’s question. Mr. Goldwater added that Nevada should be mindful of services that would be used by the businesses and did not need to attract businesses into the state simply for the sake of attracting them to Nevada. If certain businesses ended up costing the state money, and that had been identified by Governor Guinn as a potential issue that needed to be dealt with, those businesses could leave Nevada.
Assemblyman Griffin asked for clarification on the statistics of the Office. He said he believed Nevada had remained “flat” and that was still 20 to 25 percent better than the competitors who had seen declines. Mr. Griffin said he realized there were some economic conditions that affected geographic regions differently but he wondered why Nevada had done so well when other states had not done as well. Mr. Heller said he believed Nevada was more competitive than some other states partly due to the telephone system in the office that allowed the caller to talk to an employee directly 80 to 90 percent of the time. Mr. Heller said that a caller who called the California Secretary of State’s Office would encounter a confusing telephone tree and either get a busy signal or be forced to leave a message for a callback. The callback might not occur for two to three days. Mr. Heller continued that the flat filings were also due to market conditions, economic conditions, and the result of September 11, 2001. He believed every state had seen the number of filings flatten out or decrease. Mr. Heller commented that the excellent service offered by the Secretary of State’s Office, along with the competitive fees, were the reason businesses came to Nevada rather than Delaware, Florida, Texas, or New York. Mr. Heller added that Nevada’s tax structure also was part of the reason why businesses came to Nevada as Nevada had no personal or corporate income tax.
Mr. Heller opined that although some of the taxes being debated by the Legislature would not specifically affect the filings at the Secretary of State’s Office, clearly there was a message and some of the corporations would be concerned even though they were only housed in the state and required no services.
Assemblywoman Giunchigliani said she believed that S. B. 27 of the 71st Legislative Session required one paragraph of the ballot to be printed in a 14point font, not the entire document. Mr. Heller referred the question to Ms. Susan Bilyeu, Deputy Secretary of State for Elections. Ms. Bilyeu said statute required that a certain statement be in 20-point type but the additional costs actually had come from people who had requested the ballot be printed in larger font size and the Office had gone to a 14-point font type. Ms. Bilyeu said that it was more expensive for some of the county clerks to produce two different types of ballots so they went ahead and printed all their ballots in the 14-point font size. Ms. Bilyeu said the additional cost due to the printing was less than it would have been if the county clerks had done two different ballot types.
Mr. Heller said he would provide the Committee with comparisons of fiscal year 2000–2002 publication costs.
Mr. Heller closed his presentation with a quotation from Lili Tomlin, “Ninety-eight percent of the adults in this country are decent, hardworking, honest Americans. It is the other lousy two percent that get all the publicity, but then, we elected them.” Mr. Heller added that he hoped the quotation would not hurt his budget.
Chairman Arberry recessed the Committee for a short break and resumed the meeting with budget accounts 614-2681 and 101-2995.
EDUCATION
W.I.C.H.E. LOAN & STIPEND – BUDGET PAGE WICHE 1
W.I.C.H.E. ADMINISTRATION – BUDGET PAGE WICHE 4
Mr. Ron W. Sparks, II, Executive Director of the Western Interstate Commission for Higher Education (WICHE), introduced himself and Mr. Carl Shaff, WICHE Commissioner. He also introduced Ms. Elaine Fisher, Program Officer, who was in the audience.
Mr. Sparks said he wanted to discuss some of the achievements of the program and also some upcoming events. He said that the current year was the 50th anniversary of WICHE regionally. Mr. Sparks said there would be a celebration of the anniversary on February 27, 2003. The celebration would include a breakfast and presentation by the regional director in Room 3100 of the Legislative Building. Mr. Sparks said he wanted to be certain the Committee members knew about the celebration.
Mr. Sparks said the current biennium had been a good biennium for WICHE. They had been very successful in placing practitioners into the communities and had stayed within their budgets. Mr. Sparks said the agency was requesting a “flat” budget for the next biennium with a few exceptions. Mr. Sparks reported that a few technical changes had been made from the figures contained in The Executive Budget and that information had been provided to the Committee’s staff.
Mr. Sparks continued by saying that Budget 101-2995 was the WICHE Administration Budget. He said that the budget was generally the base budget with some adjustments to the base budget for ongoing costs. The significant change was in the personnel area, which included an upgrade of a position from a Grade 25 Administrative Assistant II to a Grade 27 Accounting Assistant III. Other than the required upgrade, the budget was “flat and thin.”
Mr. Arberry asked Mr. Sparks to comment on federal dollars that had been received. Mr. Sparks stated that the federal dollars were included in the WICHE Loan & Stipend Budget and he would discuss that next in his presentation.
Mr. Sparks said Budget 614-2681 funded the student loan program. The student loan program had been a very successful way of providing practitioners to the underserved areas of rural and urban Nevada. Mr. Sparks said the adjusted base budget represented support fee increases that were required through the regional WICHE office and the continuation of the program to another class of students for the next two years of the biennium. Mr. Sparks said that WICHE proposed, as an enhancement to the budget with the Community Center for Education Health Services Outreach through the School of Medicine, a matching program in order to obtain federal money to fund some of the students under the Health Care Access Program. Mr. Sparks said WICHE proposed to allocate the cost of two out-of-state slots to match funds that would be available through the School of Medicine. He said the proposed program would look like the program they currently operated. The students would still be required to go to an underserved community for two years. The key to the program was that it would put practitioners into the community sooner, rather than later. Mr. Sparks said the program would provide the money to students at the end of their schooling and not at the beginning of their schooling. By the time the two student slots from whom the funds would be taken could graduate, there would have been 26 practitioners in the community. Mr. Sparks said he believed the plan was a great way to stretch state dollars.
Mr. Sparks said that between the time The Executive Budget was built and the start of the Legislature, approximately $50,000 had been cut from the budget. Mr. Sparks said he proposed taking approximately $31,000 of dental funds over the biennium and instead of funding 2 four-year students, those slots would be moved into three-year slots. Mr. Sparks referred the Committee to Exhibit F,“Western Interstate Commission for Higher Education” and said that if a student went to a three-year program WICHE could end up short of funds.
Mr. Marvel asked how many slots would be available. Mr. Sparks said that WICHE was asking for more funds in order to assure that the cost was covered. He said that in his opinion it was really a no-cost issue because if the students did not end up attending the three-year program, the funds would be returned. Mr. Sparks said there were no reserves and no balance forward.
Mr. Marvel asked if there was a decrease in the number of physical therapy slots and veterinary science slots. Mr. Sparks answered that there had been reductions in those slots that had been made in order to meet the requested budget reductions. Mr. Sparks said the physical therapy program had been reduced by one slot, from three to two slots, in the in-state program. The veterinary medicine program had been reduced from four slots to three slots. That had been done because veterinary medicine was a very costly program and there were other areas in the state, such as nursing, where the need was far greater.
Mr. Goldwater asked if the dentists that were graduating out of the WICHE program were having difficulty with the examination required by the Board of Dental Examiners of Nevada. Mr. Sparks replied that in the past that had been a difficulty for WICHE students but he believed the problem had somewhat resolved itself, especially with the passage in 2001 of S. B. 133, which allowed WICHE students to return to Nevada to work with the underserved, even if they were having difficulty passing the Boards. Mr. Sparks said that the situation had improved significantly from five years ago but it was still a barrier for the system.
Mr. Goldwater asked Mr. Sparks who had imposed the barrier. Mr. Goldwater said that if the students were not passing the Boards, either they were going to the wrong dental school or they were not being properly prepared. Mr. Sparks said that through the licensure process and the pro bono program, no matter what happened with the students taking or not taking the test, they were getting out to the underserved areas of the state. He said there were 20 people serving the underserved areas under the pro bono program. Mr. Sparks said that students had to be able to pass the Boards in order to be able to fulfill their obligations to WICHE. He said dentistry had been a difficult field for people to pass but there were things in place in the program to help the students.
Mr. Goldwater asked how many WICHE graduates had been unable to pass the Nevada Boards, did not fulfill their WICHE obligation, and left the state of Nevada. Mr. Sparks said he would provide the information to the Committee although it had not been a significant number in recent years.
Mr. Marvel said he and Chairman Arberry were both on the Audit Subcommittee and had found out from a previous audit that there were some areas of “need.” Mr. Marvel said he appreciated the fact that Mr. Sparks had tried to identify those areas and the WICHE programs had provided a good service to the state of Nevada.
Mr. Sparks said there were still many things to be accomplished by the Health Care Access Program (HCAP). Mr. Sparks said the HCAP was a program to place people in underserved areas with a required two-year commitment to those areas. He said there had been only one graduating class of dentists to date through the HCAP and he believed that once there were additional graduating classes, more of the needs of the underserved would be served.
Assemblyman Andonov asked what the retention rate was in the underserved areas after a graduate had filled his practice obligation. Mr. Sparks responded that generally the graduates stayed in the underserved areas they had served. He said that if the dentists were brought in under the pro bono program, which was a program to bring people into Nevada, once they fulfilled their obligation to the underserved they had a tendency to return to their own state.
Mr. Marvel asked if there was any problem collecting repayment on the loans made by the program. Mr. Sparks said the collection process continued to be revamped and it was improved every year. He said the collections were where they needed to be in order to make sure the budgets were funded. Mr. Sparks said WICHE was very well aware of who should be paying back loans and the state’s dollars were protected.
Assemblywoman Giunchigliani asked if the budget would have a zero reserve balance. Mr. Sparks responded affirmatively and said that the 2001 Legislature had specified there should be a zero reserve balance.
Chairman Arberry asked Mr. Sparks to comment on the nursing program. Mr. Sparks said the program was currently educating 26 nurses to be available for the underserved and the entire state of Nevada. The program’s intention was to fund ten out-of-state slots in 2004 and ten out-of-state slots in 2005. Mr. Sparks said the nurses actually would probably be educated in the state and that was where the 26 nurses currently in the program were being educated.
Chairman Arberry asked if Nevada was doing anything special to educate the nurses that other states might not be doing. Mr. Sparks said that WICHE in Nevada did many things that WICHE in other states in the region did not do. He said that Nevada had the requirements for payback and there were a few states that did have a requirement for payback but no other state had a requirement upon their WICHE students that would require them to work in an underserved community when they completed their educations. Mr. Sparks said he believed that Nevada did a better job with its workforce development than other states did. He said other states had chosen not to use the system in the same way Nevada had, but for the dollars put into the program by the Legislature, he believed the state was well served.
Chairman Arberry said that since Nevada was in the forefront, he wondered if other states were looking at what Nevada had done. Mr. Sparks replied affirmatively and said that there would be a meeting of the Subcommittee of WICHE Certifying Officers, who were in charge of the certifying process for all states, and recommendations would be going to the commissioners concerning the programs necessary for states to stabilize their funding. Mr. Sparks added that many states’ funding had been cut significantly because they did not have workforce development built into their systems.
Chairman Arberry asked Mr. Sparks to comment on why an increase for travel had been included in the budget. Mr. Sparks said there had been a significant decrease in the out-of-state travel and a portion of those funds had been moved to the in-state travel account. Mr. Sparks said that because the program was located in the north, he wanted to make certain that people understood that WICHE was a statewide program. He felt that in order to get the word out, the staff needed to be able to travel to southern Nevada and the rural areas to assure that students in those areas received just as much information as students in the north. Mr. Sparks stated that WICHE had recently put a Web site online that included an application.
There being no further testimony on the WICHE budgets, Chairman Arberry opened the testimony on the Military budgets.
MILITARY
MILITARY – BUDGET PAGE MILITARY 1
ADJUTANT GENERAL CONSTRUCTION FUND – BUDGET PAGE MILITARY 6
NATIONAL GUARD BENEFITS – BUDGET PAGE MILITARY 8
Major General Giles E. Vanderhoof, Adjutant General of Nevada, introduced himself and Mr. Miles Celio, Administrative Officer II for the Office of the Military. General Vanderhoof said he commanded approximately 3,000 Nevada Army and Air National Guard members and supervised 74 state of Nevada employees.
General Vanderhoof said the budget was a lean budget, as were most other agency budgets the Committee was considering. General Vanderhoof stated that he realized Nevada was facing tough times and that all agencies had to tighten their belts as much as possible. He said the Nevada Army and Air National Guard had a total budget of $229 million of federal funds for fiscal years 2001 and 2002. General Vanderhoof said the state of Nevada funding for fiscal years 2001 and 2002, which was non-reimbursed by the federal government, amounted to $4 million. While the state expenditure was small in comparison to the federal expenditure, it was nonetheless an essential factor in the Guard’s ability to achieve and maintain military mission readiness. General Vanderhoof said those state funds primarily contributed to the maintenance and repair of their training facilities and infrastructure.
General Vanderhoof reported that the budget before the Committee was his projection for the minimum amount the Guard needed in order to fulfill its responsibility to the state and the nation. General Vanderhoof said that fortunately, Nevada was able to secure a higher rate of federal funding for the State/Federal Cooperative Agreements for utilities and maintenance costs at army armories for the remainder of fiscal year 2003 and the next biennium, thus lowering the state’s share. General Vanderhoof said that were it not for that unprecedented federal interim increase, the budget could not have been trimmed as much as it had been. General Vanderhoof reiterated that the budget before the Committee was minimally adequate to address the agency’s responsibilities.
General Vanderhoof reported that since the terrible events of September 11, 2001, the Nevada National Guard had been engaged in many operations and had performed superbly. He said that there had been over 500 of their men and women on active duty performing military missions in several areas in the United States and overseas. General Vanderhoof said the ones that were the most noticeable to the public were the Guard personnel involved in airport security around Nevada. General Vanderhoof told the Committee that there had been Nevada Guard personnel in areas such as Kosovo, Afghanistan, Tajikistan, Qatar, Saudi Arabia, South America, and several places in Europe. He called attention to the fact that some of those Nevadans were in harm’s way, but thankfully, there had been no casualties. General Vanderhoof said that while many of those people had been released from active duty, some were well into their second year protecting their country.
General Vanderhoof stated that the week prior to the meeting an additional nearly 200 people had been mobilized; all but three would be stateside for the time being and he had received notice to place another 125 people on alert for mobilization. General Vanderhoof said that he had been notified that it was certain, under current plans, that more of their units and individuals would be alerted and mobilized. He said he was sure the Committee was aware that the Nevada National Guard also responded to state emergencies involving fires, search and rescue, counter-drug operations, as well as providing aerial photography and intelligence analysis. General Vanderhoof said all of the state and federal missions were performed with superb professionalism and excellence, and many times at great personal sacrifice of their members, their families, and their employers.
General Vanderhoof continued by saying that the goal of the Department was to provide a ready, trained, equipped, professional force capable of responding to federal and state requirements. That goal had been superbly met. General Vanderhoof said that in every instance, Army and Air Force Commanders had notified him that the mobilized Nevada Guard men and women were the finest soldiers and airmen. He said the Commanders were surprised that the Nevada National Guard personnel were at, or above, the level of quality that would normally only be expected of active duty members.
General Vanderhoof offered that the Committee and all Nevadans could be extremely proud of the men and women that voluntarily served in the Nevada National Guard.
General Vanderhoof said he wanted to mention that there was an error in the in-state travel portion of the budget. There was a much higher figure there than in the past and that was because the figure had been placed in the wrong account and the error also involved a formula that had to do with the motor pool. General Vanderhoof said his staff was working with the staff of the Legislative Counsel Bureau to correct the budget.
Chairman Arberry reported that he had just heard on the news that the terrorist alert had been upgraded to “orange.” He asked how that would affect General Vanderhoof and his staff.
General Vanderhoof said the upgrade in the alert would require an upgrade in the security that was provided to their facilities and it alerted all Nevadans to be more vigilant and aware. He said the police, firefighters, and Guard personnel would all watch more closely critical infrastructure that had been identified. Those were areas that could possibly be expected to be attacked. General Vanderhoof said the upgrade also meant that more Guardsmen would be placed on active duty. General Vanderhoof added that if the country went to war, he believed the threat conditions would go up much more.
General Vanderhoof described his agency’s budget as “flat.” He said that some reductions had been made in utilities and personnel.
Assemblywoman Chowning questioned the deletion of some positions in the budget. She wondered if the agency could keep up with the maintenance and upkeep without the positions. She also wanted to know why a position that was 100 percent federally funded would be eliminated. She said she could understand its elimination if it was truly not necessary. General Vanderhoof responded that Mrs. Chowning’s observation was correct, the position was not considered necessary. He said the agency had very adequate environmental staff that was capable of handling the issues, making the position unnecessary. General Vanderhoof said the budget gave a somewhat false impression of the number of employees included in the budget. He said it appeared that the agency had given up four positions, one of which was the 100 percent federally funded position. In actuality, the agency could employ 130 people at the 75 percent federally funded rate and that had been the case for at least the past 15 years. The agency, however, had only increased the number of employees because of budgetary reasons by approximately two or three per year. General Vanderhoof said there were 78 state employees in The Executive Budget, but if the budget allowed that number could go much higher. As a result, the agency could get by minimally with the number of employees budgeted with some help from the federal employees. General Vanderhoof said the federal employees took pride in their facilities and helped out with maintenance and care. General Vanderhoof said that if he had to cut employees any further he might jeopardize the state/federal agreement for the 50/50 split of utilities for the army armories by not keeping up the state’s responsibilities.
Assemblyman Marvel asked how the tuition program was working and how many of the staff had taken advantage of it. General Vanderhoof said the number taking advantage of the program increased each year. In 1999, there were 215 students in the program, 224 in 2000, 258 in 2001, and 268 in 2002. The program use had changed in the last year, however, due to the mobilization of the staff. The General said the colleges had cooperated tremendously with the agency regarding the students that had to be taken out of classes for mobilization during the final six weeks of class. General Vanderhoof said he was unsure of how many students would utilize the program in the upcoming year.
Mr. Marvel asked if the tuition program was a good recruiting tool. General Vanderhoof stated that the recruiters reported that it was the best recruiting tool they had available. General Vanderhoof called it “a bit of a dichotomy,” since the tuition program was the most effective recruiting tool they had, one would think that every person would be going to college and that was not the case. He said he thought some people believed they wanted to go to college and then went on to other things instead. General Vanderhoof said the Montgomery GI Bill was still available to fund schooling, although the state’s tuition reimbursement program was still the number one aid for recruitment.
Mr. Marvel reported that he and Chairman Arberry were members of the Audit Subcommittee and he wondered if General Vanderhoof had had an opportunity to implement the recommendations that had been suggested by the auditors. General Vanderhoof replied that every one of the audit suggestions had been implemented. The only goal left to achieve was to write some of the procedures that went along with the corrections. General Vanderhoof reported that the audit process had been traumatic for the agency. He explained that Mr. Celio had started employment with the Office of the Military three months before the start of the 2001 Legislature and General Vanderhoof had started ten days before the Legislature commenced. Prior to Mr. Celio’s employment, the Administrative Services Officer position had been vacant for seven months and in the three years before that, there had been a turnover of three people in the position. General Vanderhoof said it had been traumatic to go through an intensive audit at the same time they were going through a legislative session. In the short term it was trauma, in the long term the audit had helped because General Vanderhoof did not believe the agency would have found some of the issues nearly as fast as the audit had. General Vanderhoof reiterated that in every instance the deficiencies had been corrected and new policies and procedures had been written. The few remaining policies and procedures to be written should be completed within the following two months. General Vanderhoof said the audit had been very good for the agency.
Mr. Marvel commented that the audits were designed to help agencies stay in compliance with statutes and he appreciated General Vanderhoof’s attitude regarding the audit.
Chairman Arberry asked General Vanderhoof to explain the anticipated savings in maintenance and utility costs that were not reflected in The Executive Budget. General Vanderhoof explained that the agency had moved into a new building with almost double the square footage as the old building had. Many energy-saving devices had been built into the new building and the agency had no track record on the costs for the new building. General Vanderhoof said the federal government had agreed to pay 50 percent of the costs on some of the rural army armories for the current fiscal year and the next biennium. General Vanderhoof said the agency would have an approximately $58,000 increase in expenses for property and contents insurance in case of fire damage. They would also have an $80,000 increase in expenses for the statewide cost allocation program (SWCAP). General Vanderhoof stated that those two items had never been included in their budget in the past. General Vanderhoof said that the cost savings to the state would not be as great as anticipated due to the increase in insurance expenses; the SWCAP would affect federal funds.
Chairman Arberry asked for a breakdown of the costs by armory to be supplied to the Committee’s staff. General Vanderhoof said he would supply a breakdown of the costs by armory.
Chairman Arberry reminded the Committee members to guard the confidentiality of the Budget Highlights. There being no further business, Chairman Arberry adjourned the meeting at 10:45 a.m.
Lila Clark
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: