MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session March 16, 1995 The Committee on Ways and Means was called to order at 7:35 a.m., on Thursday, March 16, 1995, Chairman John Marvel presiding in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Jan Evans, Vice Chairman Ms. Sandra Tiffany, Vice Chairman Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Vonne Chowning Mr. Jack D. Close Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Bob Price Mr. Larry L. Spitler COMMITTEE MEMBERS ABSENT: Mr. Joseph E. Dini, Jr. (Excused) Mr. Lynn Hettrick (Excused) STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst Mr. Gary Ghiggeri, Deputy Fiscal Analyst Mr. Brian Burke, Program Analyst Mr. Ronald Steele, Program Analyst ASSEMBLY BILL 135 Revises provisions governing repayment of financial support received by students from Western Interstate Commission for Higher Education. Ron Sparks II, Director, Western Interstate Commission for Higher Education (WICHE) reported A.B. 135 authorizes the Commission to delegate certain powers to the director and eliminates a provision which allows students to qualify for WICHE support by contributing a certain amount of money. Also proposed is an amendment which will allow WICHE to receive funds other than legislatively appropriated funds for the purpose of providing additional slots and to place a rural practice requirement on those students who accept support in the physician assistant field. Mr. Sparks explained A.B. 135 amends NRS 397 by adding sections 2 through 5. Section 2 would provide a better definition of financial support. Mr. Sparks distributed a chart (Exhibit C) which demonstrates how financial support is distributed. The total amount of money provided to a student is the support fee, of which 25% is a student loan which must be repaid and the other 75% is a stipend which can be repaid through practice. Mr. Sparks reported sections 3 and 4 will provide more in-depth explanation of repayment terms for those students who do not meet their practice obligation. This will allow WICHE to convert those stipends more readily if students do not fulfill their obligation. This would also provide that the death of a student would discharge all obligations to repay stipends. Mr. Sparks said section 5 would allow the commissioners to delegate the authority to negotiate repayment terms, including how and when payments will be made on loans or stipends in default. Mr. Sparks explained section 6 will amend NRS 397.063 by adding language to allow the discharge of the student loan portion of a support fee in the case of the untimely death of a student who entered the program prior to July 1, 1995. Chairman Marvel asked whether this had ever happened. Mr. Sparks said one student met an untimely death and the loan was discharged. Mr. Sparks testified section 7 will amend NRS 397.064 to more clearly specify the time at which interest begins to accrue on the student loan portion of the support fee for those students who entered the program on or after July 1, 1995. This section would allow the director to negotiate terms regarding repayment of the student loan. Mr. Sparks reported section 8 amends NRS 397.065 by adding a death clause relating to stipends granted to students who entered the program before July 1, 1995. Section 9 amends NRS 397.067 and will give the commission delegation authority to empower the director to provide notice to a recipient of support to make immediate repayment of the student loan or stipend portion of the support fee. This section allows WICHE to initiate immediate collection procedures against a student who is in default. Chairman Marvel inquired what methods were used to enforce defaults and whether the Attorney General assists in collections. Mr. Sparks responded the collection process begins with a letter and the Attorney General becomes involved only when a student refuses all suggestions of a repayment plan. There have been only five or six such cases. Mr. Allard expressed agreement with the intent of A.B. 135, but questioned whether 8 percent interest provides enough incentive for a graduate to return to Nevada to practice. Mr. Sparks responded 8 percent does provide an incentive because many times students wait to fulfill the practice requirement during which time interest accrues and the stipend portion can be as much as $60,000 to $70,000. Mr. Allard questioned whether a variable rate might be considered. Mr. Sparks said A.B. 135 does not propose to raise the interest rate. Chairman Marvel interjected a higher interest rate might be a greater incentive for students to return to Nevada to practice. Mr. Arberry inquired whether there had been discussion regarding insurance policies to provide loan repayment in the event of a recipient's death. Mr. Sparks responded insurance policies had not been discussed; however, the possibility merits consideration. He added the situation has only taken place once. Mr. Fettic asked if the program is effective and whether many students default. Mr. Sparks responded most students return to the state and do repay their obligation. The default rate is near 3 percent. Mr. Fettic asked what percentage of students completely fulfill their obligation. Mr. Sparks answered 85-90 percent of recipients return to practice in Nevada. Mr. Close noted the major goal of WICHE is to help Nevada students attend professional schools not available in this state. He inquired whether WICHE's secondary mission is to ensure students return to practice in Nevada. Mr. Sparks responded the goal of the program is to provide students access to professional degrees with an incentive to encourage students to return to the state to practice. Mr. Close noted the secondary goal of encouraging students to return to the state is not written in the mission statement. He inquired whether a higher loan percentage would provide greater incentive for students to return to Nevada. Mr. Sparks answered the loan percentage would most likely not be persuasive; students return to Nevada if there are job opportunities. Mr. Price said it appeared as though the program had never received private donations. Mr. Sparks concurred. Mr. Price observed the bill language seemed as though it would allow the creation of a foundation. Mr. Sparks agreed this was not specifically prohibited. Mr. Price pointed out a potential problem existed, if a foundation were to be formed, with donors requesting their funds be used for a particular student who might apply to the program. Mr. Sparks responded the amendment was not designed to allow for specific students, but rather for additional slots. The certification process will not change and the best students possible will enter the program. Mr. Sparks added NRS 397.061 has been repealed which would have allowed an individual to pay for a slot. Mr. Price asked whether other states have similar language. Mr. Sparks said other states provide grants and do not have any type of payback policy. Those states lost many positions when funding was tighter. Mr. Spitler confirmed A.B. 135 is not to bring Nevada into compliance with the interstate compact. He asked how many states are in the compact. Mr. Sparks responded 13 states are members. Mr. Spitler inquired what amount is paid for membership. Mr. Sparks responded approximately $79,000 for each year of the biennium. Mr. Spitler asked how the membership fee is set. Mr. Sparks said the regional office sets fees which are voted on by local commissioners. Mr. Spitler inquired how many states are in default of paying their membership. Mr. Sparks said all states are current and added states cannot be members without paying dues. Mr. Spitler requested confirmation that no states were or had been in default. Mr. Sparks indicated he would provide the information. Ms. Giunchigliani inquired whether A.B. 135 would affect the types of professions receiving slots. Mr. Sparks indicated that was a separate issue. Ms. Giunchigliani asked whether work is the only way to repay the stipend. Mr. Sparks concurred and added pro bono work can be applied to a percentage of the student loan for certain under served areas, such as dentistry. Ms. Giunchigliani inquired whether the issue of need is being discussed by the commission. Mr. Sparks confirmed that it was. Ms. Giunchigliani asked what happened to the stipend if a student chose not to return to Nevada and work. Mr. Sparks said when a student decides not to return to Nevada, the full stipend plus interest must be repaid. Ms. Giunchigliani asked what the collection rate is on defaults. Mr. Sparks responded each student signs a contract which gives the commission full collection authority. Ms. Giunchigliani confirmed the default rate is approximately 3 percent. Mr. Sparks answered the 3 percent includes late payments and actual defaults are probably only five or six individuals. Mr. Allard referred to lines 35 and 36 on page 2 which allow the commissioners acting jointly to adopt regulations which would reduce the period of required practice for an individual who practices in a rural area of the state. He asked whether those individuals who come from rural areas could be required to return to those areas to fulfill the stipend obligation. Mr. Sparks said the commission does not provide placement so each student has responsibility for finding a job; however, the physicians' assistant area is specifically targeted at improving health care in the rural areas. Mr. Allard asked what decisions the commissioners could make regarding reducing the practice requirement. Mr. Sparks responded after one continuous year of service, recipients were allowed to petition the commission to remove one year of required service. Mr. Allard inquired how successful the program has been at encouraging professionals to practice in the rural areas. Mr. Sparks responded the percentage is not as high as the commission would wish. Mr. Allard asked whether the student loan portion could remain at 8 percent interest and the stipend portion be made a variable interest rate. Mr. Sparks responded any incentives to encourage students to return to the state would be considered. Mr. Close asked if the money and interest repaid reverts to the General Fund. Mr. Sparks responded a percentage reverts to the General Fund and a large portion is put back into the program. Ms. Giunchigliani requested explanation of the phrase "may enter into binding agreements to purchase additional contract places" and asked if this creates additional slots. Mary Linde, Deputy Attorney General, responded the language does create slots which will be allocated in the normal way. Ms. Giunchigliani asked for definition of a slot. Mr. Sparks explained a slot is a position for a student. Ms. Giunchigliani confirmed the language would not allow an individual to donate money for a slot with the stipulation that it be given to a particular student. Mr. Sparks concurred. Mr. Price inquired whether WICHE is a 501 C non-profit organization. Ms. Linde responded WICHE is a governmental corporation and 501 C probably would not apply. Chairman Marvel requested Mr. Sparks confirm WICHE's status. Mrs. Evans observed determination of nonprofit status is very important because an individual wanting to make a contribution cannot claim a tax deduction unless the agency is qualified. Ms. Linde deferred the question to the tax section of the Attorney General's Office so the amendment can be restructured to insure the tax advantage. Chairman Marvel requested the information be returned as expeditiously as possible. Chairman Marvel called for public testimony. There was none. Chairman Marvel called for committee introductions. BDR S-1020 makes appropriation to the Public Works Board for architectural design of a new legislative building in Clark County. ASSEMBLYMAN ARBERRY MOVED FOR A COMMITTEE INTRODUCTION OF BDR S-1020. ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Chairman Marvel noted BDR S-1885 makes appropriation to the City of Las Vegas for a California-Nevada Super Speed Ground Transportation Commission. ASSEMBLYWOMAN GIUNCHIGLIANI MOVED FOR A COMMITTEE INTRODUCTION OF BDR S-1885. ASSEMBLYMAN ALLARD SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Chairman Marvel said BDR S-1825 makes appropriation to the City of North Las Vegas for costs of relocating residents of Windsor Park whose homes are sinking. ASSEMBLYMAN ARBERRY MOVED FOR A COMMITTEE INTRODUCTION OF BDR S-1825. ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Chairman Marvel explained BDR S-1824 makes appropriation to Lied Discovery Children's Museum for support of programs designed to assist children who are at risk of becoming delinquent. ASSEMBLYWOMAN CHOWNING MOVED FOR A COMMITTEE INTRODUCTION OF BDR S-1824. ASSEMBLYMAN ARBERRY SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. ASSEMBLY BILL 245 Makes appropriation to department of taxation for computer and office equipment. Michael Pitlock, Executive Director, Department of Taxation, said A.B. 245 provides funding for some of the tools necessary for the Department to do its job. The appropriation can be broken into three categories. One portion (slightly more than $53,000) is for office equipment, furniture and a new telephone system for the Reno office. The second portion relates to the data processing capabilities the Department currently has on the state's mainframe and represents expenditures for new monitors and for three new printers. Most monitors currently used to access the state's mainframe were purchased as surplus equipment from other agencies. The original request was for 61 new monitors to replace old ones; the current recommendation contains appropriation for 25 monitors. The third and largest portion of the appropriation, just more than $191,000, is for personal computers and additional laptops. Mr. Pitlock explained equipment currently used in the Department is antiquated and far below the capacity required to perform the work. An agency of more than 180 people is using a handful of outdated PC's. The work load is growing and in order to keep up with that growth, staff members must be provided up-to-date tools to do their jobs. This appropriation would fund 27 PC's as well as eight laptops. The Department identified a need for 38 PC's, only 27 of which will be funded, and a need for 32 laptops, only eight of which will be funded. Mr. Pitlock said this appropriation will maintain the Department at its normal level of efficiency. In order to improve efficiency, additional replacement equipment will be required in the near future. Ms. Tiffany observed the Department's request is certainly worthwhile but pointed out eight laptops could probably be obtained for closer to $5,000 than the $6,100 per computer itemized in the appropriation. Mr. Pitlock explained costing had been done jointly between the Department of Taxation and the Department of Information Services. Ms. Tiffany requested Mr. Pitlock find a source that could provide the laptops at $5,000 each. Mr. Pitlock agreed to do so. Ms. Tiffany questioned the purchase of monitors. Mr. Pitlock said the monitors were necessary to access the state's mainframe which provides the most significant data processing capability the Department currently has. Ms. Tiffany confirmed the request is for 25 monitors, 27 PC's and eight laptops. Mr. Spitler expressed concern that the Department is still working at bare-bones levels because the Executive Director inherited a program that is failing to collect taxes that are due. Mr. Pitlock responded he also inherited a budget and if he had been involved in development of the budget, significantly more funding would have been requested in the data processing area. Mr. Spitler observed he would support additional funding if it could be demonstrated the additional funding would enable the Department to collect at a higher rate and generate more revenue. Mr. Pitlock observed an ongoing program to consistently upgrade and replace equipment would be more beneficial than large appropriations at very irregular intervals. Mr. Spitler agreed it is short-sighted to routinely cut equipment upgrades and replacements from budgets and indicated he would like to see the Department of Taxation request more funding. Ms. Tiffany expressed her support of substituting PC's for monitors if that would be a more efficient means of configuring work stations. Ms. Giunchigliani noted enough equipment funding should be provided to allow the Department to regain appropriate levels of collection. She observed funding eight laptops out of the requested amount of 24 might be irresponsible and perhaps consideration should be given to reconfiguration of work stations. Ms. Giunchigliani requested explanation of what could be collected if the equipment request were to be upgraded. Mr. Spitler requested a report of category 2 and 3 equipment, where it will be placed, what new equipment would be needed and where it would be placed. Mr. Pitlock indicated he would provide a comparison between the Department's original request, the areas those machines would have been placed and the resulting recommended appropriation. Also provided would be information regarding additional opportunities for improvement if the appropriation were to move closer to the Department's original request. Ms. Tiffany requested the equipment information be tied to potential collections. Mr. Close asked whether Mr. Pitlock felt he would be able to accomplish the things he discussed during previous testimony with this level of appropriation. Mr. Pitlock responded affirmatively and noted his earlier statements had been based on funding in the Executive Budget. Mr. Pitlock urged speedy consideration of A.B. 245 in order to expedite purchase of the equipment and the resulting improvements in efficiency. Chairman Marvel called for public testimony. There was none. ASSEMBLY BILL 232 Makes appropriation to division of forestry of state department of conservation and natural resources for equipment and aircraft maintenance. Roy Trenoweth, State Forester, distributed a document entitled "AB 232, One Shot Budget Request" (Exhibit D). Item number 1 requests replacement of 35 underground fuel tanks at various fire stations and conservation camps. This item is not part of a capital improvement project to remove underground fuel storage tanks. The underground fuel tanks must be removed by December 31, 1998. This appropriation would provide for removal of all underground tanks and replacement with above ground fuel storage tanks. Chairman Marvel inquired whether it was necessary to remove the tanks or if the problem could be solved in another way. Mr. Trenoweth said he understood the tanks could be disconnected, filled with sand and left below ground. Chairman Marvel asked whether this would be cheaper. Mr. Trenoweth responded the two methods would be researched and the less expensive method would be used. Mr. Close asked why this appropriation was not made a part of the capital improvement project. Mr. Trenoweth responded he did not know but indicated he would investigate and report back. Mr. Trenoweth explained item number two is to upgrade 45 sets of fire turnout safety clothing, 27 self-contained breathing apparatus and 100 sets of fire safety clothing. Ms. Giunchigliani requested a report regarding how much of the equipment is for full-time employees versus volunteers. She inquired whether equipment has ever been purchased for volunteers before. Mr. Trenoweth responded the information would be forthcoming. Mr. Trenoweth explained item number three requests funding to replace multi- channel radios which are no longer serviceable in the Cheyenne and Aero Commander planes. Item number four would replace the radios in four National Guard Chinook helicopters with the same type of radios to be installed in the planes. Mr. Trenoweth said item number six provides for a notebook computer for field programming of frequencies on fire lines. Often fires do not occur near power lines or communities and the radios must be programmed. Mr. Trenoweth explained item number seven would replace telephone lines that run from Eastlake Dispatch to the Minden Dispatch center and pass through Nevada Bell and Contel. The current system is not entirely reliable. The new system would provide a microwave link from McClellan Peak to the Dispatch Center to repeater stations at Peavine, Eagle Peak, Snow Valley and Pinenut. Mr. Trenoweth said item number eight provides one-time aircraft repairs for Cheyenne and Aero-Commander planes. Item number nine provides one-time training for two Division of Wildlife interagency pilots in helicopter wild land fire suppression. Mr. Trenoweth explained item number ten provides funds for 26 crew-cab and chassis, ten staff vehicles and ten new mobile multi-channel programmable radios. Mr. Trenoweth said the conservation camp program began in the late 1970's with buses which have never been replaced. The crew-cab and chassis have the ability to travel over terrain that buses cannot. Chairman Marvel asked how many crew members could be transported on each vehicle. Mr. Trenoweth responded twelve people. Chairman Marvel inquired whether enough equipment would be available if more able bodied crews are provided. Mr. Trenoweth said if able bodied people are placed in all the camps, the additional manpower would require additional crew-cab and chassis. He made a correction to item number ten and pointed out ten "state office" vehicles should read ten "staff" vehicles. Mr. Trenoweth explained item number 11 replaces 43 portable radios and 33 pagers. Multi-channel radios are requested so that crews need not carry several portable radios on fires. Mr. Trenoweth said item number 12 replaces two mountain top base stations, seven repeaters, eight duplexers and an antenna and six office base stations to maintain the integrity of the NDF radio communications network. Mr. Trenoweth explained item number 13 provides three crew-cab and chassis and three mobile multi-channel programmable radios for the expanded boot camp at Indian Springs. Item number 14 provides for the purchase of computer software for NDF's 70 computers to provide standardization and ensure compliance with license requirements. Item number 15 requests funding for a one-time EDP systems programming cost to modify the existing in-house Foxbase software accounting package for payroll purposes. Mrs. Evans requested the Division work on an amendment to the bill that provides detail by categories. Mr. Trenoweth concurred. Mr. Allard referred to item number seven and asked whether the microwave link could be used by any other agencies. Mr. Trenoweth responded the system would tie in to the Minden Dispatch Center. Mr. Allard inquired whether telephone charges would be reduced after the microwave link is installed. Mr. Trenoweth answered telephone line charges which average $5,200 per year would be saved. Mr. Allard asked whether the radios referenced in item number 11 are 800 megahertz. Mr. Trenoweth responded negatively. Ms. Giunchigliani referenced item number 10 and asked whether some of the buses could be phased out rather than replacing them all at one time. She requested a listing of where the Division's vehicles and radios are located and whether the equipment is used by county, grant or state employees. Mr. Trenoweth responded the information would be forthcoming. Mrs. Chowning requested information be provided regarding cost comparisons of the vehicles. Mr. Trenoweth agreed to do so. Mr. Spitler expressed his concern to the committee that many items which had traditionally been included in budgets were now being presented as one-shot appropriations. He added that many of the items included in the one-shot appropriations are actually part of on-going costs of an agency's business. Chairman Marvel observed that any equipment added through a one-shot appropriation would increase operating expenses. Mr. Spitler reminded the committee to remember that any one-shot appropriations ultimately add to the base budget. ASSEMBLY BILL 234 Makes appropriation to division of water planning of state department of conservation and natural resources for office equipment and computer hardware and software. Naomi Duerr, State Water Planner, explained A.B. 234 would provide replacement and new office equipment, replacement and new computer equipment and purchase of a geographic information system and associated equipment in the amount of $91,000. Chairman Marvel inquired if detail regarding the proposed equipment was available. Mr. Ghiggeri responded some detail was available; however, the committee might wish to request additional information for the bill. Ms. Tiffany noted most of the cost associated with the geographic information system would be the items other than hardware and asked whether the system would be Arc Info. She inquired whether a microcomputer specialist was available and who would load and structure the data base as costs for those items were not listed. Ms. Duerr said water planning relates to providing map data and numeric data throughout the state. Much of the information requested by local governments is map layers that can be transposed and produced at different scales. She noted an engineer on staff has received basic training on the system. Ms. Duerr pointed out she managed a much larger geographic information system in a larger state agency for eight years and was very well aware of what would be involved to get the system set up and running. Another bill includes a separate appropriation to prepare the basic data layers for water basin studies. Ms. Tiffany inquired whether the system would be used for mapping or planning. Ms. Duerr responded the system will be used for both because the planning part is actually an analysis of data looking at overlays of water systems, waste water systems and water quality data. Ms. Tiffany noted Arc Info is not a good graphics system and asked whether Auto Cad would be used for mapping. Ms. Duerr responded her experience has shown the basic map layers can be produced very effectively using Arc Info. Other agencies within the Department have Auto Cad and are in the process of inputting water rights data. Ms. Tiffany expressed concern regarding the GIS software because staffing requirements and what is planned to be extracted from the data were not specifically defined in the bill. Ms. Duerr said data will be obtained and down loaded from other sources, such as the United States Geological Survey (USGS) which has invested heavily in their Arc Info system. Ms. Tiffany asked whether the data would be purchased. Ms. Duerr explained a cooperative program provided for sharing of data and the system will link the system in the Division of Water Planning to the USGS and to the Division of Water Resources. Mr. Spitler inquired how much of the requested $91,000 is for the GIS. Ms. Duerr responded $46,000. He asked whether maintenance and other support costs have been included in the Division's budget. Ms. Duerr said all software licenses have been included in the one-shot; in two years this amount would need to be built into the budget. Mr. Allard asked how much of the $91,000 is for office equipment. Ms. Duerr said $5,000 is for replacement equipment. Mr. Allard inquired whether any of the request is for furniture and whether Prison Industries would provide a bid. Ms. Duerr responded affirmatively. Mr. Allard asked if Prison Industry prices were competitive. Ms. Duerr said they were for some items. Chairman Marvel observed a 2,000 bed prison is under consideration for the Indian Springs area and requested Ms. Duerr develop information regarding the availability of water. Ms. Duerr indicated the information would be forthcoming. Chairman Marvel asked whether Indian Springs is a closed water basin. Peter Morros, Director of the Department of Conservation and Natural Resources, responded he believed Indian Springs was a designated basin but not closed. He added a facility such as a prison would come under the preferred use provisions of the ground water law. Ms. Duerr noted she would provide a summary. Ms. Tiffany asked whether Karen Kavanau at the Department of Information Services had been consulted regarding the GIS. Ms. Duerr responded affirmatively. Pam Wilcox, Administrator of State Lands, noted the information regarding Indian Springs had been provided to the Public Works Board and it would be forwarded to the committee. Applications have been pending for significantly more than the amount of water needed to support the expansion requested at Indian Springs. Chairman Marvel inquired how much land will be required. Ms. Wilcox said two additional sections were under application with the Bureau of Land Management and would provide more than sufficient land. Mr. Arberry inquired whether there is a mitigation cost for desert tortoises. Ms. Wilcox responded affirmatively and said the information would be provided to the committee. ASSEMBLY BILL 235 Makes appropriation to division of conservation districts of state department of conservation and natural resources for replacement of office equipment and computer hardware and software. Pam Wilcox, Acting Administrator for the Division of Conservation Districts, explained A.B. 235 will provide one replacement computer and replacement office furniture. Chairman Marvel called for public testimony. There was none. JUDICIAL DISCIPLINE - PAGE 153 Guy Shipler, Vice Chairman of the Commission on Judicial Discipline, introduced Alan Lefebvre, Leonard Gang and Rhonda Azevedo. Leonard Gang, General Counsel and Executive Director for the Nevada Commission on Judicial Discipline, distributed a document entitled "Nevada Commission on Judicial Discipline, Supplemental Work Program Narrative FY 96 & FY 97" (Exhibit E). Mr. Gang explained the Commission originally submitted its budget in August of 1994. However, in September of 1994, the Supreme Court of Nevada ruled that the Attorney General's Office could no longer serve as counsel for or perform any investigations for the Commission. The Commission relocated its offices and hired an executive director, an executive counsel and a full time legal assistant. The Interim Finance Committee granted the Commission $217,000 to function through the end of the current fiscal year. It was therefore necessary to submit an updated narrative regarding the current status of the Commission and requests for financing for the next biennium. Chairman Marvel inquired how much of the $217,000 has not been spent. Mr. Gang said $159,000 remains. Chairman Marvel asked whether any of that amount is obligated. Mr. Gang indicated it was anticipated some hearings expected to be completed during this year would actually be done in the next fiscal year, so some of the remaining money will most likely be reverted. Mr. Gang explained the Commission's offices have been relocated to 1050 East William Street. Chairman Marvel asked whether any state-owned space was available. Mr. Gang responded there was no state-owned space available at the time the Commission moved. State-owned space would have been available in February; however, the Commission needed to move November 1 and renting the state-owned space would have necessitated two separate moves. Chairman Marvel asked how much rent the Commission paid. Mr. Gang said $1.15 per square foot or $1,000.50 per month. Chairman Marvel asked how much state-owned space would have cost. Mr. Gang answered the state-owned space was larger in square footage and although it was less in rent, the monthly cost would have been only slightly less. Mr. Price asked whether the Commission had been required to enter into a long- term lease. Mr. Gang said the lease ran through the end of June and was in the process of being renegotiated. Necessary furniture and equipment has been purchased, much of it from Prison Industries. Mr. Gang observed the Commission had not been able to function very effectively during 1994, but since moving into the new offices has processed a number of cases. Performance statistics are included the supplemental narrative (Exhibit E). Chairman Marvel requested performance indicators be provided. Mr. Gang pointed out pages 14 and 15 of Exhibit E reflect a significant increase in caseload since 1992. Complaints received increased 55 percent in 1993 and 74 percent in 1994. The number of complaints is expected to continue to increase because of public awareness of the Commission's existence and the Commission's increased jurisdiction as a result of the passage of ballot question number one in November. Mr. Close referred to page 14 of Exhibit E and noted of the 87 complaints disposed of in 1994, 55 were dismissed with no code violations. He inquired whether any of the complaints are frivolous. Mr. Gang said the Supreme Court has held the Commission must review every complaint coming before it to determine whether to proceed to investigation. After investigation, the Commission must review the results of that investigation to determine whether to hold a hearing for probable cause. The rules do not allow staff to make those determinations. Mr. Gang added the Nevada Commission's figures are consistent with national averages throughout the United States. Mr. Gang said the Commission serves several functions: to discipline judges for misconduct; to protect the independence and integrity of the judiciary; and to dispose of complaints which are frivolous. Chairman Marvel asked what body set the rules the Commission must follow. Mr. Gang responded the Supreme Court performs that function. Chairman Marvel inquired whether the Supreme Court was rewriting the rules. Mr. Gang said the Court is in the process of examining several of the rules; Mr. Shipler serves as chairman of a committee which submitted a report to the Court on other forms of discipline which the Commission should be able to impose. A committee of judges is examining the rules governing the Commission and will make suggestions to the Court. The Court has also indicated the Commission can petition the Court to amend the rules. Ms. Giunchigliani referred to page 14 of Exhibit E and observed several of the complaints were apparently dismissed after some form of conclusion or disciplinary action had been taken. She asked whether rules permitted public notification of infractions. Mr. Gang said recent Supreme Court decisions set forth more guidelines regarding how the Commission should function. The Court held the Commission had been functioning outside of its jurisdiction in the past by entering into deferred discipline agreements with judges. Ballot question one provides for the imposition of other forms of discipline which could include deferred discipline agreements but those rules have not been promulgated by the Court. The Commission can issue press statements and public statements to inform the public as to the types of discipline that have occurred. Ms. Giunchigliani requested explanation of deferred discipline. Mr. Gang said the Supreme Court has ruled that in every case in which the Commission on Judicial Discipline imposes any type of discipline, a hearing must take place to determine probable cause and a formal statement of charges filed. The matter becomes public record when a formal statement of charges has been filed. The passage of ballot question one presupposed other types of discipline such as a warning, which up until this time has not been permitted. Mr. Allard asked whether the Commission had been contacted by Internal Audit regarding providing performance indicators with the budget. Mr. Gang responded negatively. Mr. Gang said the budget request and Governor's recommendation are identical. Chairman Marvel asked whether Mr. Gang was a contract or classified employee. Mr. Gang said he served at the pleasure of the Commission and was a nonclassified employee. Chairman Marvel inquired whether his position came under the unclassified pay bill or contract. Mr. Gang said he was not on contract. Mr. Gang said the appropriation from the Interim Finance Committee did not include funding to hire attorneys to serve as special prosecutors to the Commission. Under Supreme Court rulings, any time the Commission determines a probable cause hearing or a formal hearing should take place, the Commission must hire a special prosecutor to present that case. The budget includes $50,000 for that purpose. Mr. Gang pointed out the Interim Finance Committee had approved hiring a full-time investigator at the sum of $45,000; however, it is not certain a full-time employee is necessary so investigators are hired on an ad hoc basis for each case. The budget includes $45,000 to provide the flexibility to hire on a case-by-case basis and a full-time employee can be hired if necessary. Mr. Close referred to page 9 of Exhibit E and requested why $1,718 is requested for postage when actual FY 94 postage charges were $2,112.87. Mr. Gang explained a very large one-time mailing took place in FY 94 which accounted for the higher postage charges. Mr. Close referred to publications and periodicals on page 11 of Exhibit F and asked whether access to the periodicals was available through the Supreme Court Library. Mr. Gang said the Supreme Court Library was available; the budget request includes $850 per year for a CD-ROM database called CaseLaw which includes computer access time through the library. Ms. Giunchigliani questioned whether funding for producing a newsletter for the general public was included in the budget. Mr. Gang said funding on page 6 of Exhibit E under printing and copying provides for publication of an annual report and a quarterly newsletter. Mrs. Evans inquired if the Supreme Court had indicated when the rules might be completed. Alan Lefebvre said rule-making is in flux. A set of rules interpreting the Whitehead case was the opinion of Justices Springer and Steffen. Justice Shearing does not agree with the ruling; Justice Rose was disqualified from the case; and Justice Young has not rendered an opinion. Chairman Marvel said a definite answer has not been received from the Administrative Officer of the Courts. Mr. Lefebvre observed Justices Shearing, Rose and Young may take the initiative to revamp the rules if they do not agree with them. Mr. Fettic questioned whether the Supreme Court was obligated by ballot question one to promulgate rules. Mr. Gang responded ballot question one provided rules must be promulgated for other forms of discipline which the Commission may impose. A committee was appointed and submitted a report approximately 30 days ago and those rules have not yet been promulgated. Mr. Gang distributed letters from Justice Steffen (Exhibit F) and Common Cause (Exhibit G) urging the committee to adequately fund the Commission. OFFICE OF THE LABOR COMMISSIONER - PAGE 807 Frank MacDonald, Labor Commissioner, said the Office of the Labor Commissioner is charged with the responsibility of protecting Nevada workers through the enforcement of state labor statutes; to arbitrate, prosecute and investigate wage compensation and working condition claims; to assure a fair and equitable rate of compensation for construction workers on public works projects through the conduct of an annual wage survey; to promote employment opportunities in industry through the regulation of apprenticeship programs statewide; and, to protect employers and consumers through the licensing, regulating and monitoring of private employment agencies. Mr. MacDonald referred to page 807 of the Executive Budget and corrected measurement indicator No. 1, wage claims settled, where the FY 95 projection should be 2,748. Measurement indicator No. 2, average days to collect, should read 10 days for all columns. Mr. MacDonald said the Carson City office includes nine staff members: the Commissioner, Chief Assistant, two investigators, one auditor and four clerical staff. The Las Vegas office includes six staff members: the Deputy Labor Commissioner, two investigators and three clerical staff. The M200 decision unit includes a request for four additional staff members to be assigned to the Las Vegas office: two investigators, one auditor and one clerical staff member. The primary responsibility will be to monitor public works projects. Chairman Marvel inquired if the additional staff members will be instrumental in reducing average days to collect to ten. Mr. MacDonald responded the Las Vegas office has been assigned two public entities, the City of Henderson and Clark County School District, and monitors 60 projects of total of 1,423 projects, the remainder of which are monitored by the Carson City office. Clark County contains 733 of these projects, Washoe county contains 299 and the rural counties contain 391. Mr. MacDonald reported these 1,423 projects represent 1,489 prime contractors and 4,014 subcontractors. Mr. Arberry referred to measurement indicator No. 2 and asked what the average days to collect has been over the past nine months. Mr. MacDonald responded FY 94 should reflect 12.5 days rather than 752. Deborah Erickson, Budget Analyst, clarified that numbers provided originally had been total numbers to collect rather than average numbers. Mrs. Brower requested comment regarding issues raised by a Legislative Counsel Bureau audit in 1994. Mr. MacDonald expressed agreement with the audit report and disagreement with the corrective measures recommended in the report. He observed the audit recommendations were based on NRS 338.070 which states any public body and its officers or agents awarding a contract shall take cognizance of complaints of violations of the provisions of NRS 338.010 to 338.090 inclusive; however, there is a conflict with NRS 338.015 which states the labor commissioner shall enforce the provisions of NRS 338.010 to 338.130, inclusive. This results in a duplication of mandate, but not in a duplication of effort. Compliance with the audit report recommendations would result in local government bodies assuming responsibility of monitoring public works projects. NDOT monitors its own projects and is mandated by NRS 408.393 which states that NDOT will cooperate with the State Labor Commissioner in the enforcement of the state labor laws insofar as such labor laws relate to labor performed in construction, maintenance, repair of highways under the jurisdiction of the department. Mr. MacDonald said a bill draft request had been submitted which provides the labor commissioner will assume the responsibilities of monitoring public works projects. Mr. MacDonald said another item in the audit report requested the Commission develop policies and procedures to ensure timely and consistent resolution of worker's wage claims. Establishment of the investigative unit in Las Vegas will enable shifting responsibility for Nevada Public Works to the Las Vegas office and will relieve the Carson City office and reduce the response time to a more acceptable period. Mr. MacDonald explained the third item in the audit report recommended program administration be examined to identify and eliminate unnecessary procedures. Establishment of the investigative unit in Las Vegas with the additional management assistant will allow timely processing of certified payroll reports submitted by the public works contractors in southern Nevada. The management assistant in Carson City will be relieved of the southern Nevada responsibilities and will able to process northern Nevada payrolls in a timely fashion. Chairman Marvel referred to a portion of the audit report which identified the lack of an adequate management information system as contributing to the reporting of inaccurate information to the Assembly Committee on Ways and Means during the 1993 Legislative Session. The Labor commissioner testified the backlog on wage complaints was 316 days per investigator; however, the Executive Budget reported 115 days as the number of days required to close a wage complaint from date of receipt. Mr. MacDonald reported the one-shot appropriation request for computer programming will assist the agency in collecting statistical information that would prevent errors of this type. Chairman Marvel asked why the incorrect information had been provided. Mr. MacDonald said at that time a physical count had been performed and the count was incorrect. Mrs. Brower noted the audit report referenced employees doing unnecessary paper work and generating reports that are not relevant. Mr. MacDonald said the audit report was referring to certified payrolls that all contractors and public works projects submit. The payrolls list each individual employee, job classification, rate of pay and any payroll deductions. The shortage of staffing prohibits monitoring of all of the payroll reports; however, the additional four staff members should make it possible to monitor all of the certified payroll reports. Mr. Allard referred to performance indicator No. 4, audits performed, and asked why the projected number of desk audits decreased from 1994 to 1995 and rose dramatically for 1996. Mr. MacDonald said the increase in 1996 is based on the additional staffing requested. Mr. Allard observed the 1995 projection should at least be at the level of the 1994 actual. Ms. Giunchigliani suggested performance indicators be revised to include the number of contractors and subcontractors being monitored to reflect the impact of the caseload. Ms. Giunchigliani asked the difference between a desk audit and a field audit and what the ideal audit penetration would be. Mr. MacDonald said a field audit involves the auditor going to a company and auditing for payroll compliance while desk audits involve clerical staff auditing certified payroll reports. Audits are projected at 72 for 1996 and 96 for 1997. Ms. Giunchigliani referred to the M200 decision unit and requested explanation of funding for in-state travel. Mr. MacDonald said in 1991-92, 23.9 percent of in- state travel was lost and the request has been increased for this biennium to make up some of the lost travel funding. Mr. Price expressed support for providing enough investigators and auditors to ensure businesses comply with the regulations. Chairman Marvel called for public testimony. There was none. MINERALS DIVISION - PAGE 895 Russ Fields, Administrator of the Nevada Division of Minerals, explained the Division works closely with the Commission on Mineral Resources. The Division of Minerals has as its primary mission to promote and encourage the development of the state's mineral resources through interaction and liaison with other agencies and industry relating to mineral development. The Division operates the program that regulates drilling of oil and gas wells and geothermal wells; administers the state's abandoned mine lands program; and administers the mine land reclamation bond pool. The Division also is involved with public awareness activities. There are two offices in Carson City and in Las Vegas with a total of fourteen staff members. Mr. Fields explained the Commission on Mineral Resources is made up of seven individuals with expertise in areas relating to minerals and mining. Chairman Marvel pointed out the budget contains no General Fund money. Mr. Fields said funding sources are assessments and fees derived from the industries with which the Division works. Mr. Fields pointed out three vacancies exist in the budget and will not be filled unless the work load requires additional staff and funding from outside sources allows them to be filled. Mr. Fields said measurement indicator No. 1 reflects the percentage of staff time to be devoted to the official registry of mining and geothermal operations as well as oil and gas and the collection of material used in various publications. Mr. Fields explained measurement indicator No. 2 reflects the number of presentations given relating to mineral resources. That number is expected to be 120 per year, not 120% as reflected in the Executive Budget. Mr. Fields said drilling permit applications (oil, gas and geothermal), measurement indicator No. 3, are expected to average 50 per year. Chairman Marvel inquired whether there was much activity in oil and gas. Mr. Fields said there is more activity in terms of geologic mapping and seismic work; however the rig count in Nevada has not changed markedly from prior years. Mr. Fields reported the number of field inspections conducted, measurement indicator No. 4, is expected to be 35 per year. Measurement indicators 5, 6 and 7 relate to the abandoned mine lands program. The Division is expected to identify, rank and conduct ownership research on approximately 600 sites. Approximately 450 abandoned mining sites will be secured. The purpose of this program is to secure the sites so they do not pose any physical danger to the public. Mr. Close referred to measurement indicator No. 7, number of mines secured, and asked how many mines remain to be secured. Mr. Fields responded to date just over 6,000 sites have been identified and ranked and approximately 3,500 have been secured. When the program began in 1988, it was estimated approximately 50,000 sites existed that posed some degree of physical hazard. Chairman Marvel requested explanation of decision unit E425. Mr. Fields explained funding for decision unit E425 comes from the same mechanism used to secure abandoned mines and to educate the public regarding the dangers of abandoned mines. Companies with newly approved plans of operation are required to submit a fee based on acreage to the Minerals Division and the fees are used to secure abandoned mines for which there is no responsible party. These funds would be used to enhance public awareness relating to abandoned mines; to purchase supplies to secure the sites; and to produce educational materials regarding abandoned mines for fourth grade students. In 1997, $10,000 from this decision unit would carry forward into the next year to continue those activities. Ms. Giunchigliani requested information be provided regarding how much of the funding requested in decision unit E425 is for education, for public service and for warning signs. Deborah Erickson, Budget Analyst, indicated the information would be forthcoming. Ms. Giunchigliani asked what percentage of the budget provides for the securing of abandoned mines. Mr. Fields responded the bulk of expense involved with securing mines is staff time. In the base budget, approximately $60,000 is dedicated annually to securing mines, or 8-9 percent of the total budget. Ms. Giunchigliani asked the primary mission of the division. Mr. Fields said the mission is to encourage and promote the responsible development of the state's mineral resources. The major portion of the budget relates to interaction with industry and with other agencies involved in regulating mining. Ms. Giunchigliani asked how the remainder of the $600,000-$700,000 collected in licenses and fees is spent. Mr. Fields responded the majority is spent for staff and associated operating expenses to promote a business environment attractive to mining. Mr. Spitler referred to the E450 decision unit and asked why there is such a significant increase in funding in this decision unit. Mr. Fields said the cost to join the Interstate Mining Compact Commission (IMCC) is $1,500 per year. The IMCC is an association of states that have mining activities and provides a forum for states to work together on common issues for the purpose of encouraging mineral resource development in the states. Mr. Spitler requested the committee be provided background information regarding the advantages of membership. Mr. Fields said he would do so. Mr. Spitler asked why the Reclamation Bond Pool Account was not included in the budget. Mr. Fields explained the bond pool was established by the 1989 Legislature to relieve the burden of the bonding requirement on small miners who were in danger of being put out of business by the bonding requirements of NRS 519A. Participants in the bond pool pay a deposit and regular premiums and that pool, which is all participants' money, is used to guarantee that reclamation by the participants will take place. Mr. Spitler noted the bond pool does have a budget account number and if it were budgeted, the Interim Finance Committee would not necessarily have to review the account on a regular basis. Ms. Erickson noted there have been several changes in the manner in which this budget has been regarded and in the past, this account was not in the Executive Budget. She understood the account had been established by statute and that was why it did not appear in the budget. Chairman Marvel stated this account should be included in the Executive Budget. Mr. Spitler asked whether a budget could be provided. Ms. Erickson responded she would research providing a budget. Mr. Spitler requested the committee be notified if it appears a budget could not be provided. Mrs. Chowning referred to decision unit E425 and asked whether the increase from $37,900 in FY 96 to $76,540 in FY 97 represented a fee increase. She also asked for further information regarding the educational program. Mr. Fields responded the mining industry provided a great deal of assistance regarding education and workshops are cosponsored with the Nevada Mining Association. All educational programs are voluntary and are coordinated through the State Department of Education. The increase in licenses and fees does not represent a fee increase but represents additional income expected from the abandoned mine securing fee because of increased activity in approval of mining plans of operation. Chairman Marvel recognized Rose McKinney-James, Director of the Department of Business and Industry, who informed the committee a merger is contemplated of the Energy Office and the Division of Minerals. Mr. Spitler asked who was responsible for setting fees. Mr. Fields responded every fee the Division received is in statute. Mr. Spitler observed agency heads were responsible for notifying the Legislature when a fee appeared to be too high. Ms. McKinney-James responded the mineral industry was extremely vocal and active and monitors the fees they pay. Industry has expressed the preference of keeping money in the types of programs promoted by the Division. Mr. Fields concurred with Ms. McKinney-James' remarks. Chairman Marvel called for public testimony. Scott Lewis, Environmental Manager for Independence Mining Company in Elko County, spoke in support of the Department of Business and Industry and the Division of Minerals. He expressed appreciation for assistance provided by both agencies in completing an environmental impact study associated with a mine expansion in 15 months rather than the usual 24 months. The expedited process insured the continued employment of 650 Nevadans in Elko County. Mr. Price expressed his appreciation for Mr. Lewis' participation and comments. Mr. Lewis added the industry is supportive of the fees paid to the Division for the programs it implements. RURAL HOUSING - PAGE 941 Carolyn Stockton, Director of the Nevada Rural Housing Authority, reported the mission of the Rural Housing Authority is to provide decent, safe and affordable housing for low income families and elderly persons in rural Nevada. The Authority accomplishes its mission through rental assistance and through construction rehabilitation and maintenance of housing units. The Authority owns and manages 176 units for low income persons and manages the Section VIII certificate program through the U.S. Department of Housing and Urban Development (HUD) which defrays rental expenses of 985 low income families. The Rural Housing Authority consists of five commissioners appointed by the Governor and the Executive Director who is appointed by the commissioners. Ms. Stockton explained measurement indicator No. 1, number of active certificates and percent of lease out, is 985 per month. In June of 1994, there were a total of 1,029 units under lease in rural Nevada, reflected in measurement indicator No. 2. There are currently more than 2,400 rural Nevadans on a waiting list, reflected in measurement indicator No. 3. Turnover, measurement indicator No. 4, has been consistently near 2.5 percent. Ms. Stockton reported the Housing Management Program has 166 units of senior citizen housing throughout the state and ten units of family housing, reflected in measurement indicator No. 1. Measurement indicator No. 2 shows turnover of senior citizen housing to be 24 percent per year. Ms. Stockton testified the adjusted base budget recommends the funding of 21.5 full time positions. There are currently 16 positions. The Rural Housing Authority transferred two major programs from outside banking accounts into the state accounting system in FY 95 to comply with requirements of the Cash Management Information Act. Housing Assistance Payments are budgeted at $4.7 million for both years of the biennium. Chairman Marvel inquired why cost allocations are now included in the budget. Ms. Stockton responded before FY 95, the Authority's budget included only payroll and administrative services; bringing in the full budgets for the two programs raised the budget up to $6.4 million. The state cost allocation for the state is $24,640 in each year of the biennium. Mr. Arberry asked how the budget would be affected by rulings Congress might make. Ms. Stockton said the rulings would not affect Rural Housing Authority. She added that in 1996, there is a possibility the Section VIII new construction low income elderly housing might provide vouchers rather than the current procedure of rent from tenants and a subsidy from HUD to operate the project. Mr. Arberry asked whether the budget had been based on what might take place in Washington, D.C. Ms. Stockton responded the contracts with HUD for the Section VIII certificate and voucher program are currently in effect and are renewed every three years. Ms. Giunchigliani asked the source of non-state revenue. Ms. Stockton said non- state revenues came from Southgate Apartment Complex which provides funding for four of Rural Housing's positions. Ms. Giunchigliani asked what income level was required to qualify for the program. Ms. Stockton responded it varies by county and that information would be provided to the committee. INDIAN COMMISSION - PAGE 1009 Gerald Allen, Acting Executive Director for the Indian Commission, distributed a document providing information regarding the Indian Commission, attached as Exhibit H. He explained the Commission is made up of five members of which three are Indians and two are representatives of the general public. The Commission's mission is to study issues that concern Indians in Nevada relating to the environment, taxation, land and water rights, religious freedom and any other issues affecting the tribes. There are 27 governing bodies consisting of Western Shoshones, Paiutes, Southern Paiutes and Washoe tribes. Chairman Marvel requested explanation of the increase for in-state travel. Mr. Allen responded the funds are used to travel to the various tribes in all areas of the state when issues arise requiring the Commission's attention. Also included in travel is funding for increasing the number of Commission meetings from four to six per year to allow for closer monitoring of issues concerning the tribes. Mrs. Brower asked how many individuals would use the in-state travel funds. Mr. Allen responded six people would travel. Ms. Giunchigliani asked whether the education and information officer position should be combined with the executive director position. Mr. Allen indicated he has been fulfilling the duties of both positions and formally combining the two positions is requested at this time; however, it is likely that in the future funding will again be requested for a separate education and information officer position. Ms. Giunchigliani referred to measurement indicators which reflected 790 individuals received assistance from the Commission and asked what type of assistance was provided. Mr. Allen responded much of the assistance related to answering questions regarding taxation and water rights. Chairman Marvel requested a committee introduction of BDR 34-950 which revises provisions governing use of taxes levied for capital projects of school districts. ASSEMBLYWOMAN EVANS MOVED FOR A COMMITTEE INTRODUCTION OF BDR 34-950. ASSEMBLYMAN CLOSE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Chairman Marvel called for a motion on Senate Bill 147 previously heard March 9. S.B. 147 makes a supplemental appropriation to the Office of the Military. ASSEMBLYWOMAN EVANS MOVED DO PASS ON S.B. 147. ASSEMBLYMAN ALLARD SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Chairman Marvel called for a motion on Assembly Bill 126. Mr. Stevens said when the bill was originally heard there had been question regarding possible duplication between the supplemental request in A.B. 126 and the one-shot request. The amount included in A.B. 126 is a supplemental appropriation for maintenance of helicopters. The aircraft maintenance built into A.B. 232 provides funding for maintenance of fixed wing aircraft. Staff investigated and found no duplication of funding. ASSEMBLYMAN CLOSE MOVED DO PASS ON A.B. 126. ASSEMBLYWOMAN EVANS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. There being no further business to come before the committee, Chairman Marvel adjourned the hearing at 10:58 a.m. RESPECTFULLY SUBMITTED: Deborah Salaber, Committee Secretary Assembly Committee on Ways and Means March 16, 1995 Page