MINUTES OF THE
SENATE Committee on Finance
Seventy-second Session
May 5, 2003
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 4:15 p.m. on Monday, May 5, 2003, in Room 2134 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4401, 555 East Washington Avenue, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Dean A. Rhoads
Senator Barbara K. Cegavske
Senator Sandra J. Tiffany
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATORS PRESENT:
Assemblywoman Christina R. Giunchigliani, Clark County Assembly District No. 9
Senator Michael A. Schneider, Clark County Senatorial District No. 11
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Russell J. Guindon, Deputy Fiscal Analyst
Brian M. Burke, Senior Program Analyst
Bob Atkinson, Program Analyst
Michael J. Chapman, Program Analyst
Denise Davis, Committee Secretary
OTHERS PRESENT:
David Perlman, Administrator, Commission on Postsecondary Education
Dorothy L. Merrill, Lobbyist, Washoe County School District
Lonnie F. Shields, Lobbyist, Washoe County Education Administrators Association
Tom Peacock, Associate Vice President, Human Resources, Community College of Southern Nevada
P. Forrest Thorne, Executive Officer, Board of the Public Employees’ Benefits Program
Andrew Clinger, Deputy Director, Budget Division, Department of Administration
James Richardson, Lobbyist, Nevada Faculty Alliance
Terry R. Crawforth, Administrator, Division of Wildlife, State Department of Conservation and Natural Resources
The first item on our agenda is Senate Bill (S.B.) 457 (1st Reprint).
SENATE BILL 457 (1st Reprint): Prohibits use of false or misleading educational credentials. (BDR 34-1311)
Assemblywoman Christina R. Giunchigliani, Clark County Assembly District No. 9:
I believe this bill was referred to the committee because of a potential fiscal note. I have distributed copies of two e-mails (Exhibit C) I received this week which prove the need for this bill. It is time that we establish a policy that states it is unlawful for a person to misrepresent his or her diploma, degree, or license. It is also important that we have assistance from postsecondary education institutions so employers can confirm degrees from accredited institutions.
Senator Raggio:
Does this address “diploma mills”?
Assemblywoman Giunchigliani:
Yes, it does.
Senator Raggio:
Will someone address the fiscal note?
David Perlman, Administrator, Commission on Postsecondary Education:
I submitted the fiscal note. I think the impact to the commission will be minimal. Oregon has a similar bill; it has had 40 cases in 3 years, and one hearing. I do not foresee any issues with the commission regarding enforcement.
Senator Raggio:
What does “minimal” mean?
Mr. Perlman:
If an employer is looking for verification, we will request that a copy of the transcript be sent sealed to us. We will review the transcript and ensure the institution is accredited.
Senator Raggio:
Are you saying the commission can absorb any workload within its existing budget?
Mr. Perlman:
Yes, I am.
Senator Raggio:
Is there any fiscal impact if this bill is processed?
Mr. Perlman:
No, there is no fiscal impact.
Dorothy L. Merrill, Lobbyist, Washoe County School District:
I am here to testify on behalf of the trustees and the superintendent in support of S.B. 457 as it has been reprinted. This bill will make it illegal to knowingly use a false or misleading educational credential for any purpose relating to education, business, employment, and other situations. Punishment will consist of both a fine and a gross misdemeanor. I have distributed a handout (Exhibit D) containing information from Web sites offering diplomas. I believe the e-mail I included on page 1 indicates this type of business exists in Nevada.
Senator Raggio:
How much will a doctorate cost me?
Dr. Merrill:
I do not know; when I called the number listed, it was answered by machine. The information on page 2 is from “Make Your Own Degrees.” Although the Web site claims these degrees are fun novelty degrees, it appears they could easily be university degrees or business certifications; accessories such as gold foil seals, ribbons, and embossers are available. Page 10 is the home page for “Fantasy Diplomas”; although the small print indicates that these diplomas are not intended for use in connection with unlawful misrepresentation or fraud, the company certainly makes it easy for someone to purchase them.
Lonnie F. Shields, Lobbyist, Washoe County Education Administrators Association:
The Washoe County Education Administrators Association is in favor of S.B. 457.
Senator Raggio:
I think the committee was mainly concerned with the fiscal note.
Tom Peacock, Associate Vice President, Human Resources, Community College of Southern Nevada:
I am speaking in favor of this bill. I have also submitted a written statement (Exhibit E).
Senator Raggio:
We will close the hearing on S.B. 457 and open the hearing on S.B. 371 (1st Reprint).
SENATE BILL 371 (1st Reprint): Creates Constructional Defect Commission and revises various provisions governing actions resulting from constructional defects. (BDR 54-251)
This bill was referred from the Senate Committee on Commerce and Labor, primarily because of the fiscal note from the Office of the Attorney General. The fiscal note indicates expenses of $353,358 in fiscal year (FY) 2003-2004 and $334,423 in FY 2004-2005; there is a continuing effect on future biennia of $669,246. I understand the Real Estate Division and the State Contractors’ Board also submitted fiscal notes. I am not familiar with the note from the State Contractors’ Board, but it is rather high.
Senator Michael A. Schneider, Clark County Senatorial District No. 11:
The State Contractors’ Board submitted a large fiscal note, based on an estimate of 225 new class action cases per year. That information is completely wrong. I have distributed a handout (Exhibit F) with the total number of class action suits that have been filed since 1997. The estimate of 225 cases used by the State Contractors’ Board is the approximate number of cases pending before the district court in Las Vegas. The money for this action will come from the “Recovery Fund,” which currently has a balance of over $3 million. The bill also assesses an additional fee on contractors’ licenses to be used to pay the expenses of the commission. This assessment is agreeable to every contractor I have talked with, because contractors cannot obtain construction-defect insurance in Nevada.
Senator Raggio:
Could you give those of us who have not heard the testimony regarding this bill some background? Does this bill create the Constructional Defect Commission?
Senator Schneider:
Yes, it does.
Senator Raggio:
Are the seven members of the commission appointed by the Governor?
Senator Schneider:
Yes, they are.
Senator Raggio:
Please explain briefly how the commission will operate.
Senator Schneider:
The Governor will appoint the commission, which is financed by the “Recovery Fund.” The recovery fund was started a few years ago by Assemblywoman Barbara Buckley to fund repairs of defective houses and complete projects if contractors did not fulfill contracts. Unlike medical malpractice, construction defects can be completely corrected. Under the current system, many years are spent in court arguing the price of the repair and a jury decides the award. This bill will set up a new system; the claimant will submit a claim to the commission, and the commission will send its expert to the site. After examination, the expert will determine the award.
Senator Raggio:
Is the purpose of the commission to act as a prerequisite for filing a lawsuit?
Senator Schneider:
No; the commission eliminates lawsuits.
Senator Raggio:
I understand that. If someone wants to file a lawsuit, is he or she required to go through this procedure?
Senator Schneider:
If a claim is filed with the commission, every defect is fixed. There is no need for a lawsuit. The key is every defect can be 100 percent repaired; no one is left at the mercy of a jury. I think everyone is entitled to a house that is free of defects.
For example, if a roof is leaking and the builder will not repair it, the commission will send its expert to examine the problem. The expert says the tile has to be removed, the paper and flashing have to be replaced, and the tile has to be reinstalled, for a total price of $5000; the expert also specifies the job has to be completed right away, not in 30 or 60 days.
You have heard that builders have the “right to repair”; under S.B. 371, the builders must repair. Every defect is 100 percent fixed. Builders and subcontractors are currently involved in cases where they are not responsible for the defect; some of these cases take years to resolve. Some builders and subcontractors “buy their way out.” This process is not in the best interest of our businesspeople or consumers. The objective of this bill is to take care of problems in a fast and efficient manner, and to get every defect repaired.
Senator Raggio:
I guess the reason S.B. 371 is in this committee is the fiscal note. Are you saying this process is fully funded by the “Recovery Fund”?
Senator Schneider:
Yes, it is.
Senator Raggio:
What is the status of the “Recovery Fund”?
Senator Schneider:
Currently, there is over $3 million in the fund. The bill also allows the State Contractors’ Board to assess fees in conjunction with license renewals which will go to the “Recovery Fund”.
Senator Raggio:
What happens if the contractor fails to perform after the commission’s expert makes a decision?
Senator Schneider:
The contractor’s insurance company is also involved in the entire process; if the contractor fails to perform, he or she will lose his or her license.
Senator Raggio:
Can the commission require another contractor to perform the work?
Senator Schneider:
Yes; the other contractor will be paid from the insurance money.
Senator Rhoads:
Where do the seven members come from? Are they area representatives, or are they all from one area?
Senator Schneider:
The seven members will be appointed by the Governor. We specified in the bill who the members will be; three of the members will be contractors who have been residents for at least 5 years. The other four members are representatives of the general public; they can be “citizens.”
Senator Rhoads:
Will any of the representatives be from northern Nevada?
Senator Schneider:
The commission will serve the entire state.
Senator Rhoads:
But all the representatives could be from Las Vegas or Reno.
Senator Schneider:
No, I do not think so.
Senator Rhoads:
Where in the bill does it specify that?
Senator Schneider:
I guess you are correct; it is not specified. We could adjust that to include northern Nevada.
Senator Raggio:
Does the Office of the Attorney General act as counsel for the commission?
Senator Schneider:
Yes, it does.
Senator Raggio:
We will close the hearing on S.B. 371.
OFFICE OF THE SECRETARY OF STATE
Secretary of State - Budget Page ELECTED-80 (Volume 1)
Budget Account 101-1050
Russell J. Guindon, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
At today’s 8 a.m. hearing, Senator Tiffany had a question regarding the large increase in the General Fund revenues in this budget account; I have distributed copies of the budget closing document (Exhibit G). Using staff recommendations instead of the Governor’s recommendations, the actual General Fund increase is 16.1 percent. The reason for the large increase is due mainly to personnel costs; operating costs have increased due to credit card fee increases. The information services category increase is for the equipment requested in enhancement unit 710 (E-710).
Returning to the personnel category, there is an anomaly; the FY 2004 numbers are not being compared to the same base budget in the FY 2003 work program. There is a $300,000 salary adjustment included in the work program for FY 2003; that is the salary adjustment money for the State Board of Examiners, which is required for FY 2003. If you add this $300,000 to the work program amount for FY 2003, the General Fund increase is only 9.5 percent, instead of 16.1 percent. The personnel costs increase is 10.7 percent after the adjustment.
Senator Raggio:
What is the reason for the $300,000 adjustment?
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
That is the salary adjustment money given to state agencies based on pay raises that were approved during the 71st Session.
Senator Raggio:
What is happening with the credit card discount?
Mr. Ghiggeri:
Staff was instructed this morning to watch legislation affecting the Office of the Secretary of State, to ensure that any legislation increasing fees also addresses the potential for increased credit card costs.
Senator Raggio:
Are those discount fees?
Mr. Ghiggeri:
Those are fees the Office of the Secretary of State is responsible for paying, based on credit card use by customers. This item is discussed on page 3 of the closing document.
Senator Raggio:
Will $10,414 be added for the restoration of the training funds which were left out of the budget?
Mr. Ghiggeri:
Yes; maintenance unit 400 (M-400) will be added.
Senator Raggio:
The other adjustment is E-710, which is a technical adjustment.
SENATOR CEGAVSKE MOVED TO CLOSE BUDGET ACCOUNT 101-1050 AS RECOMMENDED BY STAFF, INCLUDING $10,414 FOR M-400.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS COFFIN AND TIFFANY WERE ABSENT FOR THE VOTE.)
*****
PUBLIC EMPLOYEES BENEFITS PROGRAM
Public Employees Benefits Program - Budget Page PEBP-1 (Volume 3)
Budget Account 625-1338
Bob Atkinson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
My remarks are contained in “Joint Subcommittee on General Government Closing Report, Public Employees’ Benefits Program, May 5, 2003” (Exhibit H. Original is on file in the Research Library.).
E-500 Accessible, Flexible, Cost-Efficient Government – Page PEBP-4
E-501 Accessible, Flexible, Cost-Efficient Government – Page PEBP-4
E-502 Accessible, Flexible, Cost-Efficient Government – Page PEBP-4
E-503 Accessible, Flexible, Cost-Efficient Government – Page PEBP-5
This information can be found on pages 1, 7, and 8. Included in the recommended budget is a new unclassified financial analyst position to assist the program with analysis of trends and utilization, as well as evaluation of the financial impacts of proposed plan design changes. The subcommittee concurs with the addition of this position, and also concurs with the recommended replacement of five temporary clerical staff with permanent positions in the Operations Division and the Public Information Division. It is recommended that all of these new positions be funded with reductions in the cost of services currently provided through contracts. The subcommittee approves the recommended increase in non-state-owned building rent to provide office space for these new positions.
Senator Raggio:
Can the costs of these new positions be covered by the reduction in contract services?
Mr. Atkinson:
Yes. The number of people contracted through the temporary agency to provide clerical‑type support will be reduced. The financial analyst position will be performing some of the work currently done by the consultant under contract; the contract will be reduced.
Senator Raggio:
Do the contracts expire, or will they have to be cancelled?
Mr. Atkinson:
I think the temporary employment agency contract is based on people provided. The consultant’s contract has just been awarded; I think it is based on a per‑hour rate with maximum limits.
E-275 Working Environment & Wage – Page PEBP-3
This information can be found on pages 2 and 8. The subcommittee considered the request for overtime as recommended in E-275; however, the subcommittee does not recommend approval of E-275. The subcommittee reasoned that a full compliment of staff should reduce the need for any overtime, and that any overtime required for special projects should be handled through effective use of compensatory time.
Senator Raggio:
Is this issue a concern for you?
P. Forrest Thorne, Executive Officer, Board of the Public Employees’ Benefits Program:
Yes; we are concerned about overtime because, if overtime is required, we cannot mandate that employees take compensatory time. We can request that they do so, but it is their choice.
Senator Raggio:
The reasoning is, if you have a full staff, the need for overtime will be reduced. Are you saying there will still be some need for overtime?
Mr. Thorne:
During peak times, such as open enrollment, we still expect overtime.
Senator Raggio:
Are you saying compensatory time cannot be used?
Mr. Thorne:
Compensatory time can be used, but we cannot mandate that employees take compensatory time instead of being paid overtime.
Senator Raggio:
If compensatory time cannot be mandated, how do you propose to eliminate the overtime? Did the subcommittee take that into consideration?
Mr. Atkinson:
The subcommittee did not discuss that issue. What was discussed was the approximately $50,000 for overtime in the base budget for the year. At the time the overtime was incurred, the program was operating with a vacancy rate of approximately 30 percent.
Mr. Ghiggeri:
This budget is self-funded; if there is a shortfall in the salary category due to unbudgeted overtime, the agency can approach the Interim Finance Committee (IFC) to transfer funds from reserves to cover costs.
Mr. Thorne:
That will be acceptable.
Senator Raggio:
We will issue a Letter of Intent on this issue.
Mr. Atkinson:
Continuing on pages 2 and 7, the subcommittee recommends approval of the Governor’s recommended State contribution rates made on behalf of state employees; Assembly Bill (A.B.) 544 has been introduced to establish these rates in law.
ASSEMBLY BILL 544: Establishes for next biennium amount to be paid by this state for group insurance for certain public employees, public officers and retired public employees. (BDR-S-1342)
For FY 2003-2004, the recommended amount is $495.68 per month, which is an increase of 6.4 percent over the current amount of $465.78 per month. For FY 2004-2005, the recommended amount is $558.07 per month, which is an increase of 12.6 percent over the amount recommended for FY 2003-2004.
E-504 Accessible, Flexible, Cost-Efficient Government – Page PEBP-5
The committee may recall that the Public Employees Benefits Program incurred a net operating loss in excess of $16 million for FY 2001-2002, which severely reduced the cash balance in the fund. As of June 30, 2002, the program had cash reserves and other assets of approximately $9 million, along with a liability for incurred but not reported claims estimated at $24.9 million; that left the fund with a deficit balance of approximately $15.9 million. The losses of the program continued into FY 2002-2003; even with a cash infusion of approximately $18 million from the 18th Special Session, the program anticipates the cash balance will be reduced to $3.9 million or $4 million by June 30, 2003. This information can be found on pages 2 and 8.
The State contribution rates recommended by the Governor and approved by the subcommittee are designed to implement the program’s plan to rebuild sufficient cash reserves over a 4-year period. With the recommended rates and other program modifications, the program anticipates cash reserves will be rebuilt to $9.7 million by the end of FY 2003-2004 and $15.4 million by the end of FY 2004-2005. Since the incurred but not reported claims liability represents claims for which services have been performed but the billing has not been submitted or the payment has not been made, the amount of that liability generally continues throughout time with some increase related to medical trends. It is anticipated that this liability will increase to a level somewhere above $24.9 million at the end of each of the next two fiscal years, so the fund will continue to operate with a deficit fund balance.
In summary, for the Public Employees Benefits Program, the subcommittee recommends approval of the State contribution rates for active employees as recommended by the Governor. The subcommittee recommends approval of the budget as submitted by the Governor, with the exception of the overtime in E‑275, and recommends approval of the technical adjustments recommended by staff.
Senator Raggio:
Is this only for the Public Employees Benefits account? Are there any other recommendations in that account?
Mr. Atkinson:
Yes, this is only for the Public Employees Benefits account. With the exception of the Letter of Intent that was just discussed, these are the recommendations.
Mr. Thorne:
Those will work well for us.
Senator Coffin:
I disagreed with the subcommittee’s recommendation because I felt we were underfunded. I realize this has been “screwed down too tight” and we will be short of funds again. I do not know when it will happen, but I have a “gut feeling” it will, based on my experiences in the group insurance business. Testimony regarding the incurred but not reported amount reported reserves will cover about 1.7 months of claims; the industry average is 2.5 months to 3 months. I do not feel the amount we have is enough, and I think we will be looking at a net operating loss again. As long as we are facing bad news and big numbers, we might as well add some more to the mix.
Andrew Clinger, Deputy Director, Budget Division, Department of Administration:
We feel that $9.7 million and $15.4 million in cash reserves is adequate for the next biennium.
SENATOR RHOADS MOVED TO CLOSE BUDGET ACCOUNT 625-1338 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION, AND TO INCLUDE A LETTER OF INTENT ALLOWING THE AGENCY TO RETURN TO THE INTERIM FINANCE COMMITTEE IF THERE IS A SHORTFALL IN THE SALARY CATEGORY DUE TO UNBUDGETED OVERTIME.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR COFFIN VOTED NO. SENATOR TIFFANY WAS ABSENT FOR THE VOTE.)
*****
Retired Employee Group Insurance - Budget Page PEBP-8 (Volume 3)
Budget Account 101-1368
Mr. Atkinson:
The information for this budget account can be found on pages 3 through 5 and 21 through 24. This account is funded through a payroll assessment charged as a percentage of gross salaries for all approved positions. The assessment rate for the current year is 1.7 percent. The Governor’s recommended budget includes assessment rates of 1.49 percent for FY 2003-2004 and 1.66 percent for FY 2004-2005.
The Governor’s recommended base retiree subsidy amounts are $280.78 for FY 2003-2004 and $316.26 for FY 2004-2005. These recommended amounts provide the same percentage increases, 6.4 percent and 12.6 percent, as recommended for active employees. During the budget hearings, the subcommittee became aware that the recommended assessment rates fell short of the amount necessary to fund the Governor’s recommended retiree subsidy amounts by $2.6 million to $2.7 million each year of the 2003‑2005 biennium. The subcommittee considered the following three options.
The first option increases the assessment rates to 1.72 percent for FY 2003‑2004 and to 1.88 percent for FY 2004-2005 in order to provide sufficient funding for the Governor’s recommended subsidy amounts. Of the $2.6 million to $2.7 million increase required each year, staff estimates approximately 62 percent, or $1.6 million to $1.7 million, will come from accounts funded through the General Fund; the remaining portion will be provided by other revenue sources.
The second option is to approve the Governor’s recommended subsidy amounts without any increase in the account’s funding, which will create a shortfall in the account of $5.3 million over the upcoming biennium.
The third option is to reduce the subsidy amount to remain within the resources recommended in the Executive Budget.
In summary, the subcommittee recommends approval of the Retired Employee Group Insurance account as submitted by the Governor, with the technical adjustments recommended by staff. In an effort to keep the total cost of the subsidies within the amounts provided by the Governor’s recommended assessment rates, the Senate subcommittee recommends a reduction in the base subsidy amount for retirees to $242.86 for FY 2003-2004 and $280.13 for FY 2004-2005. The Governor’s recommendation is $280.78 for FY 2003-2004 and $316.26 for FY 2004‑2005.
James Richardson, Lobbyist, Nevada Faculty Alliance:
It is our understanding that there was an error in the Executive Budget concerning the shortfall; the total should be $5.3 million for the biennium. When the error was discovered, we immediately became concerned and requested a budget adjustment. The adjustment has not been made; that is why you are considering the three options presented.
If the committee decides to approve the amounts in the Executive Budget and lower the contributions per retiree, it has the effect of increasing the monthly charge for state retirees $32 to $52 a month, depending on length of service. This is the option the subcommittee has chosen. The Budget Division prefers keeping the subsidy amount per retiree, which will create an unfunded liability, and adjusting the rates in the next biennium. The other option is to adjust the rates and force the agencies to pay higher amounts so the absolute dollar amounts in the bill will remain as recommended by the Governor. This is not a good option for agencies already trying to find enough money to operate, but I think it is preferable to the option chosen by the subcommittee, which forces retirees to find additional money. Retirees are facing serious cuts in benefits in the state health plan during the next biennium. I urge you to consider a budget adjustment or other option which does not “soak” the retirees.
Senator Raggio:
Which option are you suggesting would be the most appropriate?
Mr. Richardson:
The option I have recommended to many people is that the amount of total dollars in the Executive Budget be adjusted upward.
Senator Raggio:
Is that one of the options we have heard?
Mr. Atkinson:
That is the first option; we will increase the assessment rates in order to provide the resources to provide the amount of subsidy recommended.
Senator Raggio:
Will that have an impact on the General Fund of $3.3 million?
Mr. Atkinson:
That is the amount estimated for the biennium.
Senator Raggio:
Will the rest of the money come from other revenue sources?
Mr. Atkinson:
Yes, it will.
Senator Coffin:
Senator Rhoads and I served on the subcommittee; I think we might agree we made a mistake. We should have recognized that a mistake was made in the calculations.
Mr. Clinger:
At the subcommittee hearing, our recommendation was to leave the subsidy amount at the recommended level in the Executive Budget, but not to increase the assessments; the $5.3 million will be made up.
Senator Raggio:
How do you make up the $5.3 million if you do that?
Mr. Clinger:
It will have to be made up in the next biennium in the rates, starting in FY 2006.
Senator Raggio:
That sounds like “smoke and mirrors” to me. I am not being pejorative; I just do not understand what you are saying. Are you saying we are going to operate on a false premise for this biennium, and make it up in the next biennium?
Mr. Clinger:
Yes, sir.
Senator Raggio:
Why do we not do what is right this time?
Mr. Clinger:
We recommend including the $5.3 million, but we do not know where it will come from.
Senator Raggio:
At this moment, none of us knows where it will come from, but I do not think we should create a bigger problem in the next biennium. We should “bite the bullet” and deal with it now. Do you think the Governor agrees with you?
Mr. Clinger:
I do not know. Mr. Comeaux met with the Governor regarding this issue, and this is the recommendation from Mr. Comeaux.
Senator Raggio:
It seems to me we are talking about $3.3 million from the General Fund that we are going to have to find one way or the other. I do not think we should leave this sitting as a “festering sore”; we need to deal with it.
Senator Mathews:
This will affect me; I am a state retiree.
Senator Raggio:
I am also a state retiree. As Legislators, I think this affects all of us. I do not see any alternative. Mr. Thorne, do you disagree with any of this?
Mr. Thorne:
I prefer to stay out of this discussion.
Senator Raggio:
What is happening with the non-state retirees?
Mr. Atkinson:
That issue is still being considered by the Assembly Committee on Ways and Means.
Senator Raggio:
I think that issue has been a big part of this problem; non-state entities need to come forward and bear some of the burden, instead of shoving problems over to the State.
Mr. Atkinson:
I adjusted the budget to include the revenue generated by the assessment rates recommended in the Executive Budget. When we started this process, the rates provided more of the $517,000 than was actually built into the budget. Also, I cleaned up some old operating costs in this account, which moved $12,000 to a reserve. Staff did not see the necessity of a $12,000 or $24,000 reserve in this account, so it was moved to the expenditure category.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1368 ACCORDING TO THE FIRST OPTION AND AS ADJUSTED BY STAFF.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TIFFANY WAS ABSENT FOR THE VOTE.)
*****
STATE DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES
Michael J. Chapman, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
My remarks are contained in “Joint Subcommittee on Public Safety, Natural Resources and Transportation Closing Report, Department of Conservation and Natural Resources, May 5, 2003” (Exhibit I. Original is on file in the Research Library.). In summary, the Senate subcommittee’s recommendations for the State Department of Conservation and Natural Resources results in General Fund increases of $40,356 in FY 2004 and $46,638 in FY 2005; these totals can be found on page 11.
CNR Administration - Budget Page CNR-1 (Volume 3)
Budget Account 101-4150
Information regarding this budget account can be found on pages 1, 2, and 12 through 15.
E-840 AB9 Conservation Bond – Page CNR-7
In this budget account, two positions were recommended to support administration of the $200 million Question 1 bond program. In lieu of approving the two positions, the subcommittee approves the agency’s amended request for one management analyst II position.
E-275 Working Environment & Wage – Page CNR-3
E-276 Working Environment & Wage – Page CNR-3
The subcommittee agrees with the Governor’s recommendation for a new accounting technician position to assist with increasing fiscal complexities and workload of the department, and an administrative assistant position to support the reception area and provide relief to the director’s office during the executive assistant’s leave periods.
E-901 Transfer NDF Fiscal Unit to NDF (Base & M150) – Page CNR-8
The subcommittee concurs with the Governor’s recommendation to transfer funding support for the Division of Forestry’s fiscal unit to the Forestry account; this is consistent with the director’s decision to transfer the supervision of the fiscal unit to the state forester. There are 13 positions in the fiscal unit.
The subcommittee also recommends issuing a Letter of Intent specifying that new positions supporting the Question 1 bond program approved in the director’s office, the Division of State Lands, and the Division of State Parks are contingent on the availability of funds arising from the sale of the bonds and associated interest earnings.
Senator Raggio:
Is the funding for the fiscal unit included in the transfer to the Forestry account?
Mr. Chapman:
Yes, it is; it is based on the Governor’s recommendation. The director made the decision to transfer the fiscal unit in February 2002.
Senator Raggio:
Is the Letter of Intent for the new positions?
Mr. Chapman:
That is correct.
Senator Raggio:
Are the new positions contingent on the availability of funds?
Mr. Chapman:
Yes; there is one position in this account, three positions recommended in the State Lands budget, and three positions recommended in the State Parks budget. All these positions will be contingent on the availability of bond proceeds.
Senator Rawson:
I am not sure if this is where this question fits. In the past, we have had some funding for Tahoe Regional Planning Agency (TRPA) staff. Is this funding handled through the Legislative Counsel Bureau?
Brian M. Burke, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
Are you referring to the staff in the TRPA account?
Senator Rawson:
Yes, I am.
Mr. Burke:
About 75 positions are funded, but those positions are not state employee positions.
Senator Rawson:
Does any General Fund money go towards that?
Mr. Burke:
There is some General Fund money in that account. Nevada funds one-third of the agency, and California funds two-thirds.
Senator Rawson:
There has been a concern that we might lose the TRPA; I do not want to lose track of the agency or its funding. It needs to continue.
Mr. Burke:
The TRPA budget account is the last account in the handout; the subcommittee recommends continued funding for the TRPA.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4150 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Division of Conservation Districts - Budget Page CNR-10 (Volume 3)
Budget Account 101-4151
Mr. Chapman:
Information regarding this budget account can be found on pages 2, 16, and 17. The main item that came before the subcommittee for consideration was the restoration of funding for the 28 conservation districts at $5000 each, as provided by previous Legislatures, at an additional General Fund cost of $6799 per year beyond the amounts recommended by the Governor.
Senator Raggio:
Does that cover all 28 conservation districts?
Mr. Chapman:
Yes, it does. Each district will receive $5000.
Senator Raggio:
Is the total increase $6799?
Mr. Chapman:
Yes, it is.
Senator Raggio:
Where does the odd number come from?
Mr. Chapman:
It is due to rounding. In the Governor’s budget, there is a reduction of $93 per year for each district; the reduction is based on one district not using its full grant funding. The Governor also recommends removing $150 per district for the mandatory 3 percent budget reduction.
SENATOR RHOADS MOVED TO CLOSE BUDGET ACCOUNT 101-4151 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION, WITH FULL FUNDING FOR EACH CONSERVATION DISTRICT.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Heil Wild Horse Bequest - Budget Page CNR-14 (Volume 3)
Budget Account 607-4156
Mr. Chapman:
Information regarding this budget account can be found on pages 2, 18, and 19. The subcommittee recommends closing the account with minor technical adjustments. The subcommittee notes that the reserves are projected to be $508,042 at the end of the 2003-2005 biennium, which is $22,602 more than the amount of the original bequest from Mr. Leo Heil; the original bequest was $485,440. Assembly Bill 474, which is currently in the Assembly Committee on Ways and Means, will amend Nevada Revised Statutes (NRS) 540.450 to allow the Commission for the Preservation of Wild Horses to utilize the original principal bequeathed to continue the operations of the commission beyond the 2003-2005 biennium.
ASSEMBLY BILL 474: Revises provisions governing payment of expenses of Commission for the Preservation of Wild Horses from money in Heil Trust Fund for Wild Horses. (BDR 45-1261)
If A.B. 474 is not passed by this Legislature, the commission will have to cease operations when the trust fund balance reaches the amount of the original bequest, in order to not violate the provisions of NRS 540.450. However, if revised projections hold true, the $485,440 floor will not be reached during the 2003-2005 biennium.
Senator Raggio:
I am not clear on the use of this. What is the money being used for?
Mr. Chapman:
The statute currently provides for use of the funds within the trust account, which is now approximately $800,000, to support the operations of the Commission for the Preservation of Wild Horses. Based on the Governor’s budget and some work program changes, the reserve is expected to decline.
Senator Raggio:
How is the Wild Horse and Burro Foundation involved? Is any of this funding for that group?
Mr. Chapman:
During the 71st Session, the Legislature approved $400,000 to fund the Wild Horse and Burro Foundation. The foundation is a joint effort with the U.S. Bureau of Land Management (BLM); the BLM matched the State’s $400,000. The foundation has been funded through the 2001‑2003 biennium.
Senator Raggio:
Is there not a proposal for a wild horse museum? I thought Lacy J. Dalton was interested in this. Has this been taken into consideration? I am going to hold this budget until we get more information.
Mr. Chapman:
That is a separate issue; it is not part of this budget.
Senator Raggio:
I am just wondering if some of these funds can be utilized for that purpose. I know there is a strict limit on how these funds can be used; I believe it was originally restricted to protecting wild horses. We can close this budget, but I am interested in knowing whether some funding will be available for the museum.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 607-4156, WITH AUTHORITY FOR STAFF TO MAKE TECHNICAL ADJUSTMENTS.
Senator Rawson:
Does accessing the funds need to be contingent on passage of A.B. 474?
Mr. Chapman:
During the subcommittee hearings, there was discussion concerning the likelihood of the reserve lasting through the 2003-2005 biennium. Based on staff’s best projections, the reserve should be sufficient; however, the commission is concerned about other possible budget adjustments, such as an unclassified salary adjustment for the administrator.
Senator Raggio:
Does A.B. 474 authorize the use of principal?
Mr. Chapman:
Yes; the bill will allow the commission to use principal from the original bequest. The current statute requires the commission to operate off the interest earnings accrued in the account; those earnings are being depleted at a faster rate. Assembly Bill 474 will take out the provision requiring the commission to operate off the interest earnings and will allow the commission to use principal from the original bequest.
Senator Raggio:
Are you saying that is necessary to fund this budget?
Mr. Chapman:
No, not at this time, based on the best information that staff has.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
State Lands - Budget Page CNR-18 (Volume 3)
Budget Account 101-4173
Mr. Chapman:
Information regarding this budget account can be found on pages 3, 4, 20, 21, and 22.
E-840 AB9 Conservation Bond – Page CNR-22
The subcommittee recommends approval of three positions to administer State Lands’ $65.5 million allocation from the Question 1 bond program, which supports grants to state agencies, local governments, or private nonprofit organizations. A management analyst III will serve as the grant program coordinator and supervise the other two positions. A management analyst II is recommended by the agency instead of a senior land use planner; this change was recommended by the Budget Division to be more indicative of the job duties. An administrative assistant is recommended to support the other two positions and provide fiscal support for the program. These three positions related to the Question 1 bond program will be included in the Letter of Intent recommended in the administration budget account closing.
The committee should note an adjustment has been made to reflect the reclassification of an engineering technician position, Grade 30, to an agency/program information specialist, Grade 36; the IFC approved this reclassification on November 21, 2002, but it was not reflected in the Governor’s budget or the subcommittee’s closing action. The adjustment for the reclassification increases General Fund appropriations by $9499 in FY 2003‑2004 and $9787 in FY 2004-2005.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4173 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION, INCLUDING THE CHANGE FROM A SENIOR LAND USE PLANNER POSITION TO A MANAGEMENT ANALYST II POSITION.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
State Parks - Budget Page CNR-38 (Volume 3)
Budget Account 101-4162
Mr. Chapman:
Information regarding this budget account can be found on pages 3, 4, and 27 through 31.
E-840 AB9 Conservation Bond – Page CNR-44
The subcommittee concurs with the Governor’s recommendation for three new positions in support of the Question 1 bond program; the three positions are a project architect, a park landscape architect, and an engineering technician to support the other two positions. Of the $200 million bond total, the allocation to State Parks is $27 million; the agency has identified 11 acquisition projects and 58 development projects within the State Parks system.
E-275 Working Environment & Wage – Page CNR-41
E-276 Working Environment & Wage – Page CNR-41
The subcommittee also concurs with the Governor’s recommendation for a new accounting assistant position to assist with fiscal duties in the central Nevada/Fallon region, along with fee collection compliance at the Lahontan State Recreation Area. A new maintenance worker position is also recommended; it will be assigned to the Ward Charcoal Ovens State Historic Park and Cave Lake State Park.
E-377 Tahoe License Plate Funding Adj – Page CNR-42
The subcommittee recommends that the committee introduce legislation to amend A.B. No. 13 of the 68th Session, the Tahoe Bond Act, to provide for the use of bond funds and interest earnings for erosion control grants and other projects to protect Lake Tahoe. The bond fund money will replace General Fund money used to partially support an existing park ranger position assigned to the Lake Tahoe Environmental Improvement Program (EIP); the position supports a variety of EIP projects, including erosion control grants and natural watercourse restoration projects.
The subcommittee also recommends that the committee introduce legislation to amend the 2001 Appropriations Act, S.B. No. 448 of the 71st Session, to extend the reversion date to June 30, 2005, for certain park improvement projects approved by the 71st Session. The subcommittee recommends legislation be introduced to amend the 2001 Authorizations Act, S.B. No. 586 of the 71st Session, to extend the carry forward date into the 2003‑2005 biennium for the use of lodging tax receipts transferred from the Commission on Tourism in the 2001-2003 biennium for certain park projects. The park projects are listed on pages 32 and 33.
Senator Raggio:
Will the closing action require new bill drafts?
Mr. Chapman:
Yes; three pieces of legislation will be created by your closing actions. The first piece of legislation will amend A.B. No. 13 of the 68th Session, to allow for the use of funds in the Tahoe Bond Act account.
Senator Raggio:
Will that replace General Fund money?
Mr. Chapman:
Yes, it will. The second piece of legislation will extend the reversion date in the 2001 Appropriations Act to June 30, 2005, for two projects listed on page 32; the total for the two projects is approximately $172,000. This is General Fund money, but it is used as a match for federal dollars.
The third piece of legislation concerns the 2001 Authorizations Act; it provides for lodging tax receipts from the Commission on Tourism to be used for certain park improvements, which are listed on pages 32 and 33. Amending the 2001 Authorizations Act will allow the agency to carry forward the balances into the 2003-2005 biennium.
Senator Raggio:
If we approve extending the reversion dates, does it affect the anticipated reversions in the Governor’s budget?
Mr. Ghiggeri:
I do not believe that State Parks had identified those items as budget reductions that would have been reverted.
SENATOR RHOADS MOVED TO CLOSE BUDGET ACCOUNT 101-4162 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Environmental Protection Administration - Budget Page CNR-47 (Volume 3) Budget Account 101-3173
Mr. Chapman:
Information regarding this budget account can be found on pages 4, 34, 35, and 36.
E-950 Transfer Position From 3187 – Page CNR-55
The subcommittee concurs with the recommendation to transfer a bureau chief position from the Bureau of Federal Facilities, budget account 101‑3187, to the newly created Bureau of Information Management and Environmental Policy. This new bureau oversees all current information systems activities, in addition to the one-stop and environmental public health tracking system grant programs recently approved by the IFC.
E-900 Transfer Position to B/A 3185 – Page CNR-53
The subcommittee voted to approve the Governor’s recommendation to transfer an environmental scientist position to the Bureau of Air Quality to support increasing workloads in air quality programs.
Senator Raggio:
Was there an issue on additional funding for litigation in this account?
Mr. Chapman:
Yes; the subcommittee agreed with the Governor’s recommendation for $50,000 in the first year of the biennium and $75,000 in the second year to support an additional half-time attorney general position.
E-378 Environmental Policies & Programs – Page CNR-51
Senator Raggio:
What is the Robert Hager case?
Mr. Chapman:
That case was based on an investigation and a cleanup action at the Cave Rock area at Lake Tahoe, I believe. It concerned underground storage tanks; there was an attempt to get the previous owner to pay the cleanup costs.
Senator Raggio:
Is that the potential litigation matter?
Mr. Chapman:
It is one of several cases the agency has underway.
Senator Raggio:
Are mining companies that have not performed reclamation included in this?
Mr. Chapman:
Yes; a separate budget account deals with some fluid clean ups in mining operations.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-3173 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
DEP Air Quality - Budget Page CNR-57 (Volume 3)
Budget Account 101-3185
Mr. Chapman:
Information regarding this budget account can be found on pages 4 and 5. Two bureaus are included in this account, the Bureau of Air Quality Planning and the Bureau of Air Quality Pollution Control.
M-590 Clear Air Act – Page CNR-59
The subcommittee approves the six new positions recommended by the Governor to address increasing air monitoring programs arising from new federal regulations, and the Pahrump Valley non-attainment status with federal air quality standards.
The subcommittee also recommends closing this account with an additional $200,000 transfer in the second year of the biennium from the Department of Motor Vehicles’ Motor Vehicle Pollution Control account, in anticipation of reduced revenues due to the projected December 2005 closure of the Mohave Generating Station in Laughlin. The increased transfer to support reserves, and the new positions and associated costs, are funded with increased transfers from the pollution control account, in anticipation of increasing the vehicle emission certification fee from $5 to $7, as provided for in S.B. 419.
SENATE BILL 419: Makes various changes to provisions governing Pollution Control Account administered by Department of Motor Vehicles. (BDR 40-1266)
Subsequent to the subcommittee’s closing action, S.B. 419 failed to pass the Senate. Staff is recommending that this account be held until the subcommittee considers the closing action to be recommended in the pollution control account.
Senator Rawson:
Does this also include the Health Aid to Counties program?
Mr. Chapman:
No; that is not in this account. There are, however, transfers to the counties from the pollution control account. The concern now is, since S.B. 419 failed to pass the Senate, whether there will be adequate funding to support the recommended increases in decision units in the account.
Senator Raggio:
If we hold this budget account, what is the outlook for it?
Mr. Ghiggeri:
The joint subcommittee on Public Safety/Natural Resources/Transportation is going to review the pollution control account tomorrow; I believe staff will recommend if the $7 fee is not approved, that at least a $1 fee increase be approved. There is also some potential for eliminating funding, probably funding to the counties, and some potential for scaling back capital improvement projects.
Senator Raggio:
At the request of staff, we will hold this budget account.
DEP Water Pollution Control - Budget Page CNR-63 (Volume 3)
Budget Account 101-3186
DEP Water Quality Planning - Budget Page CNR-74 (Volume 3)
Budget Account 101-3193
Mr. Chapman:
Information regarding these budget accounts can be found on pages 5 and 37 through 41. The subcommittee recommends approving the Governor’s recommendation to establish a separate budget account for the Bureau of Water Quality Planning due to the increasing complexity of the existing account; the new budget account is 101-3193. Decision units E-901 through E-920 in both accounts are in regard to establishing the new budget account.
E-500 Accessible, Flexible, Cost-Efficient Government – Page CNR-66
E-503 Accessible, Flexible, Cost-Efficient Government – Page CNR-67
The subcommittee also recommends approving the Governor’s recommendation for a new registered professional staff engineer in support of additional phase II stormwater requirements mandated by the U.S. Environmental Protection Agency, and a new environmental scientist position to support increased activity associated with the Nonpoint Source program.
E-900 Transfer In - From B/A 3216 Env Lab Cert Program – Page CNR-75
The subcommittee concurs with the Governor’s recommendation to transfer the environmental labs certification program, including two health facility surveyor positions, from the Health Division to the Bureau of Water Quality Planning.
Senator Raggio:
Will the budget that we approve for the Water Pollution Control account then be divided up to create the new budget account? Is this enough for both budgets?
Mr. Chapman:
Yes, it is.
SENATOR RHOADS MOVED TO CLOSE BUDGET ACCOUNT 101-3186 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION, AND TO CREATE THE NEW BUDGET ACCOUNT 101-3193, DEP WATER QUALITY PLANNING.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
DEP Waste Mgmt and Federal Facilities - Budget Page CNR-79 (Volume 3)
Budget Account 101-3187
Bureau - Federal Facilities - Budget Page CNR-90 (Volume 3)
Budget Account 101-3198
Mr. Chapman:
Information regarding these budget accounts can be found on pages 5, 6, and 42 through 46. Similar to the previous water programs budget, the subcommittee agrees with the Governor’s recommendation to establish a separate budget account for the Bureau of Federal Facilities due to the increasing complexity of the existing account; the new budget account is 101‑3198. Decision units E-900 through E-908 in both accounts are in regard to establishing the new budget account.
E-500 Accessible, Flexible, Cost-Efficient Government – Page CNR-82
The subcommittee recommends approving the Governor’s recommendation for a new bureau chief position to replace the one transferred to Environmental Protection Administration for the new Bureau of Information Management and Environmental Policy. The new bureau chief is needed to supervise the Bureau of Federal Facilities due to the anticipated January 2004 retirement of a federal employee who is operating under an interpersonnel agency agreement.
Senator Raggio:
Will the employee in this position be a state employee?
Mr. Chapman:
Yes; this employee will be a state employee beginning January 2004.
Senator Raggio:
Is the current employee a federal employee?
Mr. Chapman:
That is correct; the agency funded the federal position through an interpersonnel agency agreement, covering the costs of the position supervising the federal facilities program. This will replace the contract cost with a state position.
Senator Raggio:
Is more state funding required?
Mr. Chapman:
I believe it is slightly less, because there was also some travel money included in the contract.
The subcommittee concurs with the Governor’s recommendation for a new environmental scientist position to supervise increased preventative inspections of underground storage tanks, notably in Clark and Washoe Counties.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-3187 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION, AND TO CREATE THE NEW BUDGET ACCOUNT 101-3198, BUREAU - FEDERAL FACILITIES.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Forestry - Budget Page CNR-109 (Volume 3)
Budget Account 101-4195
Mr. Chapman:
Information regarding this budget account can be found on pages 6, 7, and 49 through 52.
E-377 Tahoe License Plate Funding Adj – Page CNR-114
Similar to the discussion we had during the State Parks budget account, the subcommittee recommends legislation be introduced to amend A.B. No. 13 of the 68th Session, the Tahoe Bond Act. The Governor recommends replacing General Fund money used to partially support an existing park ranger position assigned to the Lake Tahoe EIP with bond fund money; the position supports a variety of EIP projects. This action was approved today in the State Parks budget account.
E-502 Accessible, Flexible, Cost-Efficient Government – Page CNR-115
The subcommittee concurs with the Governor’s recommendation for a new administrative services officer position to provide additional accounting and budgetary support in the Nevada Division of Forestry (NDF) fiscal unit. The NDF fiscal unit was moved from the director’s office to the Forestry account today when the budget was closed.
E-277 Working Environment & Wage – Page CNR-114
The subcommittee concurs with the Governor’s recommendation for two 6‑month seasonal accounting positions that will provide additional resources for employee timesheet and payroll reporting during the fire season.
The subcommittee recommends approving the replacement of transfers from the Division of Wildlife with additional fire reimbursements from the Forest Fire Suppression account; this is a result of the director’s December 2002 decision to have each division be responsible for their respective air operations.
Senator Raggio:
Was there an issue with a reduction in county cost-allocation receipts?
Mr. Chapman:
Yes; I was going to discuss that issue during the inter-governmental agreements account. The 71st Session approved an increase in the transfer from the inter‑governmental agreements account in support of forestry administration costs. During that session, there was quite a reaction from the counties, so the Senate Committee on Finance and the Assembly Committee on Ways and Means directed NDF to work with the Nevada Association of Counties to determine a more amenable solution to the cost-allocation program. As a result, the Governor’s budget recommends a reduction of about $56,000 a year in support of NDF’s administration costs. In lieu of General Fund money to replace that reduction, the Governor recommends eliminating a forestry staff specialist position.
Senator Tiffany:
It appears we are increasing General Fund spending by almost $1 million; I assumed the increased number of positions was responsible for the increased spending. Are you saying the decision regarding the 13 positions is “revenue neutral”?
Mr. Chapman:
The increase from $2.8 million to $3.8 million is a result of transferring 13 positions from the director’s office to the Forestry account.
SENATOR RHOADS MOVED TO CLOSE BUDGET ACCOUNT 101-4195 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION, INCLUDING LEGISLATION TO AMEND A.B. NO. 13 OF THE 68TH SESSION.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
*****
Forestry Honor Camps - Budget Page CNR-123 (Volume 3)
Budget Account 101-4198
Mr. Chapman:
Information regarding this budget account can be found on pages 7, 55, and 56.
E-600 Budget Reductions – Page CNR-126
The subcommittee does not concur with the Governor’s recommendation to eliminate four crew supervisor positions as a continuation of the FY 2002-2003 budget reductions; the proposal eliminates two positions at Wells Camp, one position at Jean Camp, and one position at Humboldt Camp. During the subcommittee hearing, there was quite a bit of concern expressed regarding the reduction in crew resources, which could potentially impact the availability of resources during fire season. The reinstatement of the four crew supervisors increases General Fund appropriations by $257,550 in FY 2003-2004 and $259,455 in FY 2004-2005. Staff will also be making an adjustment to include the statewide cost-allocation increase in this account; it was not included in the Governor’s budget.
SENATOR RHOADS MOVED TO CLOSE BUDGET ACCOUNT 101-4198 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
*****
CNR Forestry Inter-Governmental Agreements - Budget Page CNR-129
(Volume 3) Budget Account 101-4227
Mr. Chapman:
Information regarding this budget account can be found on pages 7, 57, and 58. I believe I covered the issues in this account during the Forestry budget.
SENATOR MATHEWS MOVED TO CLOSE BUDGET ACCOUNT 101-4227 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Wildlife - Budget Page CNR-139 (Volume 3)
Budget Account 101-4452
Mr. Chapman:
Information regarding this budget account can be found on pages 7, 8, and 59 through 63.
E-501 Accessible, Flexible, Cost-Efficient Government – Page CNR-144
The subcommittee recommends closing the Wildlife account, which includes additional revenues of $0.8 million in FY 2003-2004 and $1.8 million in FY 2004-2005. These additional revenues are dependent upon passage of S.B. 420, which provides for across-the-board fee increases.
SENATE BILL 420: Makes various changes relating to Division of Wildlife of State Department of Conservation and Natural Resources. (BDR 45-1254)
I believe the bill is still pending in this committee.
Senator Raggio:
I think the problem with S.B. 420 is, if the bill is processed without the Consumer Price Index adjustment, then there is a shortfall of about $180,000 in the second year of the biennium.
Mr. Chapman:
That is the latest information I have, based on the division’s estimates.
Senator Raggio:
A proposal was made that, if the bill was processed, there would have to be an additional dollar added to fees the second year to cover the shortfall in 2005. It seems to me staff should adjust the fees so there is no increase the second year; the biennium should be taken care of without indexing. Based on what I have heard from the committee, it would prefer that type of solution. Does S.B. 420 not increase some fees by $6?
Mr. Ghiggeri:
There are a number of increases in S.B. 420; staff anticipates the committee will process the bill in the next week.
Senator Raggio:
If we are going to process this bill, I would rather designate an adequate increase to fund the programs and budget once and not have a second increase. I do not know how the rest of the committee feels, but I do not think a second increase is the way to do this.
Senator Rawson:
When an agency waits 4 or 5 years for a fee increase, it is a big fight every time. I know we are reticent to include a Consumer Price Index increase, but I would like the agencies to come to us every session with the increases they need so we make regular, smaller increases.
Senator Raggio:
That is what I was referencing. I do not think indexing is the solution, because we do not use it in any other accounts. I think we should do this another way. Can we close this budget contingent on the passage of S.B. 420?
Mr. Chapman:
I believe the budget can be closed; if fees are significantly modified, or S.B. 420 is passed without the index increases, the agency can adjust the work program through the Budget Division or the IFC.
Senator Rawson:
I think it is important that we do not scale down its activities halfway through the biennium; when we deal with S.B. 420, we need to make sure the fee increases are large enough to carry it through the biennium.
Senator Raggio:
What else does the subcommittee recommend?
Mr. Chapman:
The subcommittee recommends issuing a Letter of Intent regarding S.B. 420; if the bill is not approved or is significantly modified, it directs the agency to come back to the IFC with work program revisions, if the budget is closed as proposed.
The Governor recommended increases in General Fund appropriations of $200,000 each year because of the elimination of the annual $200,000 transfer of lodging tax receipts from the Commission on Tourism due to reduction in receipts from that revenue source and corresponding reserves in the tourism budget. The Senate subcommittee voted to replace the $200,000 per year with reserve reductions in the Wildlife account; the Assembly subcommittee did not concur with the Senate subcommittee.
Senator Raggio:
What is the status of the unobligated reserve?
Mr. Chapman:
For the 2003-2005 biennium, the Governor recommends an ending balance of approximately $1.5 million. Staff adjustments in this account, along with amendments from the Budget Division, increased the reserve projection to $1.9 million at the end of the biennium.
Senator Raggio:
Will the Senate subcommittee’s recommendation use $200,000 of that reserve?
Mr. Chapman:
It will use a total of $400,000 for the biennium. The reserve will have an ending balance of approximately $1.5 million, which is the amount the Governor recommends.
Senator Rawson:
When I started in the Legislature, we were having problems with this reserve account; we cannot continue to deplete it forever. Should we also issue a Letter of Intent for the next budget to be constructed with the lodging tax receipts included?
Senator Raggio:
I do not think that would be appropriate.
Senator Rawson:
I think we have to watch this reserve carefully because we have had trouble with it before.
Senator Raggio:
I understand the reserve is $1.9 million instead of $1.5 million.
Mr. Chapman:
To clarify, the Governor recommends an ending reserve of $1.5 million; a variety of adjustments have been made in this account, resulting in an ending reserve balance of $1.9 million. If the committee approves the subcommittee’s recommendation to replace the increased General Fund appropriation with $200,000 of reserve funds each year, for a total of $400,000 for the biennium, the ending reserve balance will be $1.5 million.
Senator Raggio:
That was my understanding. Hopefully, S.B. 420 will provide adequate funding and a shortfall will be avoided. Otherwise, the agency will need $180,000 in the second year of the biennium.
Mr. Chapman:
If fee increases are not approved, or fees are reduced significantly, the agency can come back to the IFC during the interim and present its expenditure program.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4452 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION, AND TO USE $200,000 PER YEAR FROM THE UNOBLIGATED RESERVE, AND TO MAKE THE BUDGET CONTINGENT ON PASSAGE OF S.B. 420.
SENATOR RHOADS SECONDED THE MOTION.
Terry R. Crawforth, Administrator, Division of Wildlife, State Department of Conservation and Natural Resources:
Is the motion to use $200,000 per year from the General Fund or from reserves?
Senator Raggio:
The $200,000 per year will come from the unobligated reserve. The committee recommends the ending balance of the unobligated reserve account be $1.5 million at the end of the 2003-2005 biennium.
Mr. Crawforth:
My concern is we use General Fund money as a match for federal money for our non-game programs. If we do not receive the General Fund money, we will either miss out on some of the federal funds, or we will spend sportsmen’s dollars on non-game programs.
Senator Raggio:
Does the Governor recommend $200,000 in General Fund money for those programs? Is all the money in the unobligated reserve from the General Fund?
Mr. Crawforth:
No, it is not. The unobligated reserve comes from licenses.
Senator Raggio:
The Senate subcommittee voted to replace the $200,000 with a reserve reduction. What is your concern if we do that?
Mr. Crawforth:
If that is what you are doing, that is fine; I did not understand what you had decided to do.
Senator Raggio:
Staff indicates reserves will still have an ending balance of $1.5 million at the end of the biennium.
Mr. Crawforth:
I understand that.
Senator Tiffany:
I am going to vote against S.B. 420; is that in conflict with a “yes” vote on this budget?
Senator Raggio:
Yes, because S.B. 420 provides the funding.
THE MOTION CARRIED. (SENATOR TIFFANY VOTED NO.)
*****
Wildlife – Boating Program - Budget Page CNR-149 (Volume 3)
Budget Account 101-4456
Mr. Chapman:
Information regarding this budget account can be found on pages 8, 64, and 65.
E-501 Accessible, Flexible, Cost-Efficient Government – Page CNR-152
The subcommittee concurs with the Governor’s recommendation to increase revenues by $764,359 in FY 2003-2004 and $834,690 in FY 2004-2005 through passage of S.B. 420; the bill will increase fees for boat titling and registration. Part of the additional revenues, a total of $737,711 for the 2003‑2005 biennium, will transfer to the county school districts. If S.B. 420 does not pass, there will be an ending reserve balance of approximately $400,000 at the end of the biennium, if the proposed expenditure program is followed.
Senator Raggio:
Is there a balance forward in this account?
Mr. Chapman:
Yes, there is.
Senator Raggio:
Is federal funding available?
Mr. Chapman:
There is a variety of funding in this budget. There is no General Fund money in this account. Revenues include motor fuel taxes, boat titling and registration fees, and some federal dollars.
Senator Raggio:
Why does this account need money from S.B. 420?
Mr. Chapman:
The agency is increasing fees to support a variety of projects; a partial list of the projects is on page 65. Over the biennium, total funding is approximately $400,000.
Senator Raggio:
Is the Eagle Valley Dam in Elko County?
Mr. Chapman:
I believe it is in Lincoln County, near Echo Canyon State Park.
Senator Raggio:
Several of these projects are at the Kirch Wildlife Management Area and Walker Lake. This will allow for a new boat launch facility at Comins Lake?
Mr. Chapman:
That is correct; I believe the Division of Wildlife and the Division of State Parks have recommended a number of projects to develop the lake as a recreational area for sportsmen and park users.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4456 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TIFFANY VOTED NO.)
*****
Wildlife Account – Trout Management - Budget Page CNR-155 (Volume 3)
Budget Account 101-4454
Mr. Chapman:
Information regarding this budget account can be found on pages 8, 66, and 67. The subcommittee concurs with the Budget Division amendment that provides for the sale of an additional $1.5 million in revenue bonds in the FY 2002-2003 work program year; this was approved by the 71st Session.
E-501 Accessible, Flexible, Cost-Efficient Government – Page CNR-156
The subcommittee also concurs with revisions to the Governor’s recommendation for the 2003‑2005 biennium that provide for the sale of up to $14 million in revenue bonds, $700,000 in federal sport fishing funds, and reductions in reserves to continue the hatchery refurbishment program that commenced during the 2001‑2003 biennium. As you will recall, S.B. 416 was passed out of this committee this morning; it authorizes the sale of $14 million in bonds to support the hatchery refurbishment program.
SENATE BILL 416: Authorizes issuance of bonds and other securities for completion of Fish Hatchery Refurbishment Project. (BDR S-1212)
Repayment of the existing bonds, along with the additional $14 million in new bonds, is from the sale of trout stamps; the 71st Session increased the price of trout stamps from $5 to $10.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4454 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RHOADS WAS ABSENT FOR THE VOTE.)
*****
Wildlife Obligated Reserve - Budget Page CNR-158 (Volume 3)
Budget Account 101-4458
Mr. Chapman:
Information regarding this budget account can be found on pages 8, 9, 68, 69, and 70. The subcommittee concurs with the Governor’s recommendation for additional revenues from two new fees, along with an increase in duck stamps from $5 to $10. These fees are proposed in S.B. 420.
E-501 Accessible, Flexible, Cost-Efficient Government – Page CNR-160
The first new fee is a $10 upland game bird stamp, which will be assessed to upland game hunters; it will provide support for protection and propagation of upland game birds.
Senate Bill 420 also proposes a new $3 habitat conservation fee that will be added to all hunting, fishing, trapping, and combination licenses. The habitat conservation fee is intended to fund wildlife restoration and rehabilitation programs statewide. If the new fees are approved, the Division of Wildlife will approach the IFC with specific programs to consider for use of the additional funds; until then, additional fees will be transferred to reserves.
The subcommittee also recommends elimination of $300,000 per year for mining programs for which the agency did not provide specific projects or information. The Division of Wildlife may approach the IFC at a later date as projects are identified.
Senator Raggio:
Where does the $300,000 come from? When we heard testimony regarding S.B. 420, all sportsmen groups in the state were involved in the process, and all groups supported the fee increases. Is that correct?
Mr. Crawforth:
Yes, with the exception of two groups, Hunter’s Alert and the Nevada Hunters Association.
Senator Raggio:
Are the two groups opposed to any fee increases?
Mr. Crawforth:
They have spoken out against S.B. 420.
Senator Raggio:
How do they propose that the budgets be funded, if these fees are not increased?
Mr. Crawforth:
They did not have any suggestions.
Senator Raggio:
Why is the mining program not important?
Mr. Crawforth:
The mining program is very important to us. The procedure is mining companies with ponds toxic to wildlife get a permit from us; based on ore tonnage moved, there is an assessment. The assessment goes into the reserve to support the mining program. We have some funds, but because of the condition of the industry, we would like to put those funds in reserve and use them for range rehabilitation projects. We do not have a specific list of projects yet; we are working with the industry to develop that list.
SENATOR MATHEWS MOVED TO CLOSE BUDGET ACCOUNT 101-4458 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TIFFANY VOTED NO.)
*****
Tahoe Regional Planning Agency - Budget Page CNR-162 (Volume 3)
Budget Account 101-4204
Mr. Burke:
Information regarding this budget account can be found on pages 9, 10, 71, 72, and 73.
E-377 Environmental Policies & Programs – Page CNR-164
The subcommittee recommends approval of funding for phase II of the TRPA threshold efforts started during the 2001-2003 biennium. The funding will provide for the analysis of phase I data, expansion and improvement of the Tahoe integrated management system, establishment of baseline environmental conditions and timelines for standard attainment, and development of common goals and a work program for updating the regional plan.
The subcommittee recommends approval of the amendment suggested by the Budget Division that will fund phase II efforts with Tahoe Bond Act bond interest revenues rather than EIP bond interest revenues. This is necessary because, after the Executive Budget was submitted, a shortfall in the EIP interest revenues was discovered. The subcommittee also recommends approval of the amended request to bring forward Nevada’s share of unspent threshold research revenue and expenditure authority from FY 2002-2003 to FY 2003‑2004.
The subcommittee recommends approval of the amended request to allow the use of FY 2003-2004 phase II revenue and expenditure authority to be available in both years of the 2003-2005 biennium.
Senator Raggio:
Why are we funding Pathway 2007? What is it?
Mr. Burke:
Pathway 2007 is the continuation of the threshold research efforts started during the last biennium; the ultimate goal is to develop threshold standards and a regional plan by 2007.
Senator Raggio:
What else is involved in this account?
Mr. Burke:
In addition to E-377, there have been discussions regarding the adjusted base and the continuation of cuts from the FY 2003 funding reduction; California has made budget cuts of 10 percent, which amounts to $313,000. Since Nevada’s share is one-third, that equals a $156,000 decrease. The decrease will continue in the 2003-2005 biennium.
Senator Rawson:
We need to make sure there is a new resolution or legislation to continue the TRPA. As I recall, it needs to be done each session. Depending on the actions of the Senate Committee on Legislative Affairs and Operations, we might need to consider a bill draft or resolution.
Mr. Ghiggeri:
I believe you are thinking of the IFC process.
Senator Rawson:
Whatever the process is, we need to make sure the TRPA is continued.
Senator Raggio:
What is the amendment submitted by the Budget Division to fund Nevada’s share of the threshold cost with interest from the bonds?
Mr. Burke:
Rather than use EIP interest revenue, revenue from the Tahoe Bond Act bonds will be used.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4204 AS RECOMMENDED BY THE SUBCOMMITTEE ON PUBLIC SAFETY/NATURAL RESOURCES/TRANSPORTATION, CONTINGENT UPON THE STATE OF CALIFORNIA FUNDING TWO-THIRDS OF THE TAHOE REGIONAL PLANNING AGENCY BUDGET.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Nevada Natural Heritage - Budget Page CNR-27 (Volume 3)
Budget Account 101-4101
Mr. Chapman:
Information regarding this budget account can be found on pages 23 and 24.
Water Resources - Budget Page CNR-32 (Volume 3)
Budget Account 101-4171
Information regarding this budget account can be found on pages 25 and 26.
DEP Mining Regulation/Reclamation - Budget Page CNR-96 (Volume 3)
Budget Account 101-3188
Information regarding this budget account can be found on page 47.
Water Planning Cap Improvement - Budget Page CNR-101 (Volume 3)
Budget Account 101-4155
Information regarding this budget account can be found on page 48.
Forest Fire Suppression - Budget Page CNR-120 (Volume 3)
Budget Account 101-4196
Information regarding this budget account can be found on pages 53 and 54.
The subcommittee recommends closing these five budget accounts as recommended by the Governor, with minor or technical adjustments.
Senator Raggio:
Does the Forest Fire Suppression account have $1 million of General Fund money each year?
Mr. Chapman:
Yes, it continues at a $1 million General Fund appropriation. This account pays for overtime and other fire suppression costs for the NDF, including equipment and air support. The $1 million is usually supplemented with annual allocations from the IFC.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNTS 101-4101, 101-4171, 101-3188, 101-4155, AND 101-4196 AS RECOMMENDED BY THE GOVERNOR, WITH AUTHORITY FOR STAFF TO MAKE TECHNICAL ADJUSTMENTS.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
I appreciate all the work done by staff; we are adjourned at 6:17 p.m.
RESPECTFULLY SUBMITTED:
Denise Davis,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: