MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session May 22, 1995 The Committee on Ways and Means was called to order at 8:03 a.m., on Monday, May 22, 1995, Chairman Arberry 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. Joseph E. Dini, Jr. Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. Bob Price Mr. Larry L. Spitler COMMITTEE MEMBERS ABSENT: None STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst Mr. Gary Ghiggeri, Deputy Fiscal Analyst ASSEMBLY BILL 316 Increases maximum amount of annual fee which may be imposed on each lot in mobile home park. Ms. Renee Diamond, Administrator, Manufactured Housing Division, testified A.B. 316 would authorize a fee increase from $3 to $5 for each lot within a mobile home park. She noted revenue projected from the increase was included in the budget as closed by the committee. Ms. Diamond explained the revenue would be deposited to the account dealing with tenant-landlord conciliation and investigation and gathering of statistical data about mobile home parks. The fee increase would remove the need to move funds from the reserve of a separate budget account into this budget account. If A.B. 316 did not pass, additional revenue would be required in the other budget account. Ms. Diamond stated approximately 30,050 spaces would be affected by the fee increase. The increase would add approximately $61,000 to this budget account. Mr. Close noted the budget account had not yet been closed. He asked when the fee was last increased. Ms. Diamond replied she was unsure of the date of the last increase to this fee. The last time agency fees were increased generally was 1984. Mr. Close asked the rationale for the increase. Ms. Diamond said the increase was to cover the escalating expenses which were not being met by the budget, necessitating the transfer of funds from another account. Mr. Close noted mobile home park owners were not entitled to reimbursement from tenants for penalties for nonpayment of fees. He asked if there was any guarantee that reimbursement was not occurring. Ms. Diamond responded field representatives who monitored tenant-landlord issues ensured this was not occurring. Mrs. Brower asked if the fee increase would be allocated to operating expenses. Ms. Diamond said the fee revenue was directed to tenant-landlord services and data collection. Mrs. Brower inquired whether there was another fee increase proposed. Ms. Diamond said a proposal to increase fees in the lot rent subsidy program had been withdrawn. She explained A.B. 316 had been agreed to by mobile home park owners. Mrs. Chowning asked why current revenues were not sufficient to fund the budget. Ms. Diamond explained there were three Field Representatives within the division whose sole purpose was to mediate tenant-landlord issues and collect data about mobile home parks. There was not sufficient revenue to cover the costs of this program. Mrs. Chowning attested to how helpful the Field Representatives had been, especially in her district. Mr. Allard asked if the Field Representatives were classified employees. Ms. Diamond responded affirmatively. Mr. Allard inquired whether any of the increase would be allocated to salary increases. Ms. Diamond stated neither salaries nor benefits would be increased. Ms. Marolyn Mann, Executive Director, Nevada Mobile Home Park Owners, expressed support for A.B. 316. She noted it had been over ten years since this fee was increased. ASSEMBLY BILL 347 Makes appropriation to Lied Discovery Children's Museum for support of programs designed to assist children who are at risk of becoming delinquent. Ms. Suzanne LeBlanc, Executive Director, Lied Discovery Children's Museum, stated A.B. 347 would provide support to the Children's Museum for programs serving children at risk of becoming delinquent. She explained the museum is located near Cashman Field. The neighborhood surrounding the museum contains one of the highest concentrations of low income families in southern Nevada. Schools in that area are predominantly designated as at risk schools, i.e., schools with high numbers of families receiving Aid to Families With Dependent Children, with high dropout statistics, and high rates of teen pregnancy. In many ways the museum also served as a social services agency. Ms. LeBlanc said the museum was committed to serving the children and families in its neighborhood. It had developed a number of programs in partnership with other agencies and schools in response to the high need for positive alternatives to gang involvement, drugs, and other criminal activity. The emphasis of programs was serving youths age 10 to 17, although some programs were designed to serve younger children and families. She distributed to the committee a list of programs offered by the museum (see Exhibit C). Ms. LeBlanc explained youths were referred to museum programs from partner agencies, including the Dropout Prevention Program at Rancho High School, Nevada Cooperative Extension's program for children living in housing projects, the Las Vegas Indian Center, etc. Children under 14 years old could fill volunteer positions at the museum. Children over 14 could fill paid positions. They learn to teach other children and receive exposure to a variety of career options. Ms. LeBlanc noted experts agreed that what made a difference in preventing young people from becoming delinquent was having adults who cared about them and were role models as well as the availability of activities which engaged their interest. She had personally witnessed the impact children's museums could make in the lives of children. She asked for the committee's support to help the museum make that difference. Mrs. Chowning thanked Ms. LeBlanc for the museum's work. She noted the museum provided hope to youths who would not have hope otherwise. She asked how many people had been served by the museum and how many more could be served by this appropriation. Ms. LeBlanc stated several thousand children had been served by the museum and more could be served with additional funding. ASSEMBLY BILL 348 Makes appropriation to City of North Las Vegas for costs of relocating residents of Windsor Park whose homes are sinking. Mr. Warren Hardy, representing the City of North Las Vegas, introduced Ms. Marta Golding Brown, Administrator of Projects, City of North Las Vegas, and Councilmen Theron Goynes and John Rhodes. Ms. Brown explained the Windsor Park revitalization project is a top priority for North Las Vegas. She noted the City was proposing an amendment to A.B. 348 to require financial assistance to pursue alternative replacement housing due to geologic conditions which are rendering residences uninhabitable in the Windsor Park Subdivision. She explained correcting the existing conditions was no longer deemed possible following geologic studies within the subdivision. Therefore, it would be necessary to seek replacement housing outside the subdivision boundaries. Alternate housing was the only financially viable long-term option for residents in mitigating the current conditions. Ms. Brown noted the City had previously appeared before the committee to request funding to relocate and rehabilitate the homes in Windsor Park. It has been determined this is financially not feasible due to the condition of the homes. Ms. Brown stated the amendment would also allow the City the opportunity to rehabilitate currently existing housing in the mature neighborhoods of North Las Vegas for use as replacement housing for Windsor Park residents who chose to participate in the project. Ms. Brown added the City would like to include replacement clauses to provide clearer definition of the proposed development activities to be undertaken for the Windsor Park residents. Ms. Brown explained she had responsibility for oversight of the Windsor Park revitalization project. She said the Windsor Park development is a residential subdivision located in the northwest quadrant of the intersection of Carey Avenue and Martin Luther King Boulevard. It consists of 241 single family homes. The subdivision is experiencing severe deterioration resulting from ground subsidence and geologic fault movement. On November 20, 1991, the City of North Las Vegas City Council approved a preliminary plan delineating a path of action by the City with funding assistance from the federal government, the State of Nevada, the City, and support from the Windsor Park residents. The preliminary plan calls for remedial action against the problems such as soil subsidence which cause structural failures. A qualified engineering firm was contracted to designate which of the homes are located near the geological fault line which is the source of the subsidence activity. These homes were to be relocated onto land owned by the City and subdivided by a qualified developer. The remaining homes were to be stabilized, renovated, or demolished. The area from which homes are removed will be rehabilitated to serve as a public park. Ms. Brown said the preliminary plan was based on programs implemented in other areas of the western United States having similar subsidence problems. The conditions in Windsor Park are unlike those in other areas, however. Due to those unique conditions, the solutions mapped by the City are subject to change based on continued engineering work, HUD relocation assistance requirements, and/or future funding allocations. Ms. Brown explained prioritization for resident assistance is based on engineering reports and a HUD damage assessment report. Owner-occupied homes will receive priority assistance. Additional funding will be sought at a later time for tenant- occupied rental units. Funding from programs designed to meet the needs of low income persons will be sought for all who qualify. Ms. Brown reported on May 17, 1995, the North Las Vegas Mayor and City Council awarded a construction contract for the construction of 20 single family homes to be constructed in Walker Park, a subdivision approximately two miles east of Windsor Park. These homes will assist 20 relocated Windsor Park families and will be the first of 45 to be located in Walker Park. The new homes are located away from mapped fault lines and fissure areas. In addition, the City will be assisting residents acquire homes throughout established North Las Vegas communities. When necessary, the City will assist with rehabilitation of these homes. Ms. Brown stated the total estimated cost of the Windsor Park revitalization project is $16 million, $6.7 million of which has been funded by the Department of Housing and Urban Development, the State of Nevada, and the City of Las Vegas. Mr. Marvel asked if the subsidence was still occurring. Ms. Brown responded affirmatively. Mr. Marvel asked what the initial cause of the subsidence was. Ms. Brown stated the pumping of subsurface water had an effect on the geologic conditions but it was not the major effect on the problem. She explained Windsor Park was located between two fault zones with fissuring and soil problems. Mr. Marvel inquired about the use of funds appropriated in the past. Ms. Brown replied those funds had been used to complete engineering studies and relocate four homes to the Walker Park subdivision. She noted it was during the relocation of those four homes it was determined it was too costly to continue with the relocation project as originally designed. Ms. Giunchigliani asked how much the City had allocated for the project. Ms. Golding stated community development block grant (CDBG) funds totaling over $1 million had been allocated to the project. In addition, one full-time and other part-time staff members were dedicated to the project. Ms. Giunchigliani inquired whether the $1 million was separate from the $6.7 million mentioned previously. Ms. Brown answered the $1 million was included in the $6.7 million. Ms. Giunchigliani asked if any funding actually came from the City of North Las Vegas. Ms. Brown said there was no City funding other than the CDBG funds and staffing support. Ms. Giunchigliani noted legislation was pending which would allow local governments to use their tax base to support local projects. Councilman Goynes explained a majority of the Windsor Park homeowners have lived in the subdivision since the 1960s who have invested the major part of their working careers in establishing stable lifestyles while looking forward to retirement. In recent years those homeowners have found their futures jeopardized due to circumstances beyond their control, namely geologic conditions that are causing severe damage to their property and forcing them to abandon their homes. They have no opportunity to recover the equity from the property because of the damages and significant loss of property value. Many have reached an age where entering into a new mortgage without the benefit of financial assistance is not feasible. Councilman Goynes stated the City of North Las Vegas approached the state in 1991 for a special allocation to perform studies and develop options for correction of the problems. The studies revealed that site conditions were more severe than anticipated and that attempts to slow or stop the damage from occurring would not result in a permanent solution. In 1992 the City sought assistance from HUD through a special purpose grant to relocate the homes to an alternate site where the soils were more stable. This approach did not prove feasible due to the already deteriorated condition of the homes. The City revised the original plans to allow for the construction of new homes at Walker Park. Councilman Goynes asked the committee to assist in continuing efforts to help the Windsor Park residents obtain replacement housing. Mrs. Chowning confirmed the deplorable conditions in which the Windsor Park residents were forced to live. She pointed out the potential danger in the area associated with gas leaks. She asked if people were still living under those dire conditions. Councilman Goynes estimated six to eight families were living in very uncomfortable circumstances. He noted the gas system had been realigned in 1991 to avoid a potential catastrophe. He explained the relocation schedule had been prioritized, with the residents living under the worst conditions scheduled to move first. The first phase included the relocation of the four homes mentioned by Ms. Brown. Mrs. Chowning asked where the balance of the $16 million would be coming from and when there would be final relief for the residents. Councilman Goynes said the project director had offered assurance that construction on 20 new homes was scheduled to begin in June 1995. It was hoped those homes would be completed by the end of the year. He explained the project was proceeding as quickly as possible. Mrs. Chowning asked that the committee be provided with an itemization of the total input to the project from the City of North Las Vegas. Ms. Brown agreed to provide the information. Mr. Close noted over 220 households remained to be assisted. Councilman Goynes explained some of the original homes had been purchased and demolished. Some residents had chosen not to relocate from their homes. The City did not intend to force any residents to leave their homes. Other homes were not affected by the geologic conditions. Mr. Close asked Councilman Goynes to provide the committee with a breakdown of which homes were affected and which were not. Councilman Goynes agreed to do so. Councilman Rhodes stated the homeowners' efforts to perform maintenance and repair of the homes have proven fruitless. He noted several reasons have been cited as the cause of the unstable soil conditions and it was evident the structural damage was not the fault of the homeowners. He expressed appreciation for the committee's consideration of A.B. 348. Mr. Allard asked what the market value of the homes was prior to the damage. Councilman Rhodes replied the approximate market value was $50,000 to $60,000. Mr. Allard asked how many families would have to be relocated. Councilman Rhodes answered approximately 150 to 175 homes were affected. Mr. Allard noted even if 200 homes valued at $50,000 were affected, the cost would total only $10 million. He questioned why the total project cost was estimated at $16 million. Councilman Rhodes explained the cost estimates took into consideration the cost of geologic studies and the purchase of land. Mr. Allard suggested existing homes could be purchased for less than $16 million. Councilman Rhodes stated that was one option which had been identified. Councilman Goynes said the construction contractor had advised restructuring the soil base in Walker Park and reinforcing foundations to prevent similar conditions from occurring. Mr. Allard suggested looking at a different location for the homes. Councilman Goynes pointed out the geologic conditions were occurring throughout North Las Vegas. Mr. Allard questioned whether it was likely similar problems would occur in Walker Park. Councilman Goynes replied the engineering report recommended strengthening foundations and making soil analyses. Mr. Allard stated those costs were generally included in the construction costs. He asked again why the projected cost was so high. Ms. Brown stated the current bids came in at $69,000 per home, including reworking soils and reinforcing foundations. She noted there would also be costs associated with demolishing the damaged homes in Windsor Park estimated at $4,500 per home, including hazardous material removal. Mr. Allard asked how many homes had to be demolished. Ms. Brown said no homes were currently being demolished and the contract had not gone to bid. The $4,500 was a City estimate. She noted no residents had been moved out of their homes. When the homes were abandoned, they would be demolished. Mr. Allard asked for clarification about the plan to purchase and rehabilitate existing homes. Ms. Brown said the City would look for homes for sale or abandoned homes which were structurally sound and could be rehabilitated for the Windsor Park residents. The City proposed using home grant funds for that program. Mr. Allard expressed the hope the City would pursue this program. Mrs. Chowning asked what the square footage of the existing homes was. Ms. Brown said square footage ranged from 1,000 to 1,300. She requested a cost breakdown of the Windsor Park revitalization project, past, present, and future. Ms. Brown agreed to provide a breakdown. Mr. Fettic inquired whether this problem was unique in the state. Ms. Brown said the situation was unique in the western United States. She explained three distinct geologic conditions were all occurring in the same location, which was very unusual. ASSEMBLY BILL 351 Makes appropriation to City of Las Vegas for California- Nevada Super Speed Ground Transportation Commission. Mr. Marvin Leavitt, representing the City of Las Vegas, testified A.B. 351 was introduced at the request of the City on behalf of the California-Nevada Super Speed Ground Transportation Commission. It requested an appropriation of $250,000 to fund the activities of the Commission. He introduced Mr. Arnie Adamsen, Las Vegas City Councilman. Mr. Adamsen thanked the committee for the opportunity to testify in favor of A.B. 351. He stated the California-Nevada Super Speed Ground Transportation Commission had the potential to create jobs, conserve energy, and bring more people to the Las Vegas area in the most efficient manner. He explained this cutting edge technology can solve current and future critical transportation problems. No other mode of transporting tourists and business people to Las Vegas can accomplish as much traffic diversion while making socio-economic and environmental sense. California is currently working on a 20-year plan for high speed ground transportation. Florida has committed over $70 million per year for the next 25 years to make high speed ground transportation a reality in that state. In order for Nevada to compete with those two major tourist markets, it must be committed to providing equally comfortable, clean, safe, and efficient transportation for tourists and businessmen making Las Vegas their destination. Mr. Adamsen reported the transportation corridor linking Anaheim, California, and Las Vegas would be the most plausible in terms of passenger volume and self- sustaining financial viability. He noted technology had advanced to the point where it was feasible to discuss high speed ground transportation for moving freight as well as passengers. Considering Nevada receives much of its freight and goods from California, this would be another advantage of the system. Mr. Adamsen stated a commitment from the Legislature to fund a modest ridership study and grassroots support represented a commitment to Nevada's future. He indicated the Commission was diligently working to bring this project to the construction phase. The construction phase would provide some funding for a bankable ridership study which would improve funding options for the project. The project enhancement team will be formed in California and Nevada to position a public relations effort to move the project forward. Mr. Adamsen noted federal, state, and local funding for the Commission had been sought. The project had reached the point where a conditional franchise was issued, but world economic conditions deteriorated to the point where venture capital became no longer available. Mr. Adamsen pointed out high speed ground transportation was the transportation system of the future in terms of moving people short distances. Nevada could not allow its future growth to be crippled by inefficient, polluting systems for transporting tourists. It must provide state of the art transportation to connect Nevada to visitors from California. He suggested if transportation from California was not improved, California tourists would stop coming to Las Vegas. Mrs. Evans inquired if it was the hope the ridership survey would evoke additional information which would offer a higher level of comfort to potential private investors. Mr. Adamsen answered the current ridership study was conducted in 1988. It conservatively estimated 6 million round trips were available between Anaheim and Las Vegas at a cost of $100. Interested franchisees were concerned with ridership numbers. According to the 1988 figures there would be $600 million available to pay operating expenses and retire the debt. Mr. Adamsen stated the Commission hoped to piggyback the ridership study with a ridership study being done by the state of California for the Los Angeles to San Francisco route. It was estimated for a cost of $300,000 to $400,000 Nevada could attach an addendum to the study contract to piggyback a ridership study of how the Anaheim-Las Vegas corridor would enhance ridership in the Los Angeles- San Francisco corridor and vice versa. Mrs. Evans inquired how the money markets have changed and how the Commission would pursue funding for this project at this time. Mr. Adamsen noted there was competition between the United States and Germany as to which country would build the first system. Germany is currently constructing a system covering a 200 mile corridor between Hamburg and Berlin. There was acceptance of this concept within the financial community to a certain extent. Activities have taken place at the federal level (i.e., allowance of tax exempt status, right-of-way access, and exemption from Interstate Commerce Commission regulations) to encourage progress. Mrs. Evans inquired whether Japan had been involved in this process. Mr. Adamsen stated the Japanese trading partner in the consortium had demanded worldwide exclusive trading rights to transrapid technology in return for providing $250 million in venture capital. The other two partners in the consortium declined the offer and sought venture capital elsewhere. Due to the deteriorating world economy no other venture capital was located. Ms. Tiffany asked about the status of federal funding. Mr. Adamsen stated there was a great deal of support at the federal level from the Department of Transportation and the Railway Administration. He said $178,000 remained from a previous federal grant, but noted that grant required a 50-50 match. State funding would be used to match the federal grant to obtain the ridership study and public relations. Ms. Tiffany asked how much the ridership study would cost. Mr. Adamsen replied there was a broad range of costs. The Commission believed a modest ridership study could cost from $250,000 to $400,000. Ms. Tiffany inquired why the Commission was seeking $250,000 from the state. Mr. Adamsen responded the minimum needed was $180,000 to match the federal grant. The Commission was also seeking funding for expenses, including errors and omissions insurance premiums, and travel costs. He stated the City of Las Vegas had absorbed the costs of salaries and benefits of staff members associated with the project. Ms. Tiffany questioned whether California had provided any funding to the project. Mr. Adamsen explained the California statutes restricted the use of state money for this project. Significant funding had been provided by the City of Anaheim. Orange County, California, would also be approached for funding. Ms. Tiffany asked if Congress was cutting back on transportation funding. Mr. Adamsen said there had been no attack on new technology train transportation systems in federal legislation. He noted many airports were currently at maximum operating capacity. Ground transportation systems had the capacity to move the equivalent of 10 lanes of freeway per hour. Mrs. Brower asked if all of the $250,000 appropriation would be used to fund the study. Mr. Adamsen stated the majority of the appropriation would be used to match the federal grant to fund the ridership study. The balance would be applied to operating costs. Mrs. Brower inquired how long it would take for the project to be up and running. Mr. Adamsen replied projects of this magnitude ($7 billion to $8 billion range) took several years to complete. He noted once completed they were financially successful if they were studied correctly. He cited the tunnel beneath the English Channel as an example. Profits realized on that project were much higher than projected even though the costs exceeded original projections by $2 billion. He said the proposed system would also turn a handsome profit. He stated the only figures he could cite to the committee were the ones included in the 1988 study. That study projected direct economic benefits to southern Nevada of $590 million per year. He said a conservative estimate was that it would take five years to reach the point where construction could begin and an additional five years for construction to be completed. Ms. Giunchigliani asked what the long-term approach to financing the project was. Mr. Adamsen stated the system was originally designed to be 100 percent privately financed. Given Nevada's size and California's financial instability and lack of reserves, no local participation was anticipated. He explained this was a public benefit system but would be financed through the private sector. It was expected this system would be self-sufficient in terms of generating sufficient revenue to pay operating expenses. Mr. Adamsen noted Clark County had previously committed significant sums to the project. He had recently been advised not to seek further funding from Clark County. Ms. Giunchigliani inquired when the ridership study would be completed. Mr. Adamsen said California was in the process of initiating its study. The Commission could contract for the study by early fall 1995. Ms. Giunchigliani asked if the study would incorporate the issue of freight transport. Mr. Adamsen answered affirmatively. Mr. Close expressed concern about investing in a project with California in light of California's problems financing its own expenses and statutory restrictions against using state funds for the project. He asked what guarantees were available from California that it would finance the project. He added Clark County also had a responsibility to support this program. Mr. Adamsen noted the attitude toward the project had taken a diametric shift in California over the past eight years. California now believed this was a critical transportation system. He reiterated Clark County as well as the Convention and Visitors Authority had contributed significant amounts of money toward the project in the past, which has funded the operation of the Commission for its entire existence. Mr. Close asked whether the Commission would accept a state contribution in the form of a loan. Mr. Leavitt explained it would be difficult to create loan terms since it was unknown when or if repayment could be made. There was no guarantee the project was going to move forward. Mr. Adamsen noted the Commission was created by the Legislature, and a loan was just moving money from one pocket to another. Mr. Jack Jeffrey, Chairman, California-Nevada Super Speed Ground Transportation Commission, stated the important thing to keep in mind was the Commission has been working for several years without compensation other than reimbursement for travel expenses. He noted the Commission had not met for some time. Mr. Jeffrey stated it was important to update the ridership study in order to market the project to the financial community. It was the understanding of the Commission the Anaheim to Las Vegas corridor had the best potential of any area in the country for supporting a self-sustaining high speed ground transportation system. Mr. Jeffrey said in the past there was no guarantee the Commission could secure the necessary right-of-way. In addition, the developer was unable to raise capital through the sale of tax-free bonds. Those hurdles had been overcome through federal legislation. The right-of-way had been secured and the developer could now sell tax-free bonds. Mr. Jeffrey noted the plan was sound and there was no reason it should not work. He expressed concern that if the Commission disbanded it would be several years before the project would be initiated again, which would be detrimental to the transportation industry and the tourist industry in southern Nevada. His aim was to avoid dissolution of the Commission. Ms. Giunchigliani asked if Bechtel was still involved in this project. Mr. Jeffrey answered Bechtel was no longer involved. He said Bechtel might develop an interest in the project in the future. Ms. Giunchigliani inquired whether any Nevada manufacturers had shown an interest in the project. Mr. Jeffrey stated the primary market for this operation would be passenger traffic. The system would not necessarily provide an inexpensive mode of transporting freight. Ms. Giunchigliani asked if the gaming industry had offered to contribute funding to the project. Mr. Jeffrey said there had been some contact with the gaming industry and there were representatives from the gaming industry on the Commission, but there was some internal conflict which he did not care to address. Mr. Adamsen added the Commission hoped to approach the Convention Authority for support at some point in the future. Mr. Marvel asked who would operate the system. Mr. Jeffrey said it was anticipated the system would be privately operated. Mr. Marvel stated he would not like to see this project become stalled since it was probably one of the most viable projects the state could invest in. Mr. Jeffrey noted it was unfortunate more people did not have the opportunity to take a test ride in a high speed train. Ms. Richann Johnson, Executive Assistant, California-Nevada Super Speed Train Commission, reiterated California was now very interested in moving forward with this project. She noted the federal Railroad Administration and the Department of Transportation had also indicated federal reorganization would allow states more ability to decide where funds could be spent. She expressed the hope the committee would see this project as positive for Nevada. ASSEMBLY BILL 373 Proposes to exempt from taxes on retail sales orthotic appliances and ambulatory casts, other supports and casts if prescribed or applied by licensed provider of health care, and splints, bandages, pads, compresses and dressings prescribed, furnished or sold under certain circumstances. Assemblyman Brian Sandoval, District 25, stated A.B. 373 proposed exempting certain orthotics, casts, braces, etc., from sales tax. He explained when the sales tax was enacted "medicine" was specifically exempted. The Act defines "medicine" as: ...any substance or preparation intended for use by external or internal application to the human body in the diagnosis, cure, mitigation, treatment or prevention of disease or affliction of the human body and which is commonly recognized as a substance or preparation intended for such use. Mr. Sandoval stated orthotics, casts, splints, braces, bandages, etc., fit within the definition of "medicine." A.B. 373 seeks to have the issue of the exemption placed on the ballot for the people of Nevada to decide in 1996. Mr. Sandoval noted there was a fiscal note attached to the bill. He said according to the Department of Taxation the fiscal impact would be $4 million per year if the people of Nevada were to decide in favor of the exemption. Based on that estimation, orthotics valued at approximately $30 million would have to be sold each year in order to generate that amount of sales tax revenue. He stated there was some question regarding the accuracy of this fiscal note. Mr. Sandoval also pointed out certain hospitals did not charge sales tax for orthotics, etc. The same treatment from a private practitioner outside a hospital setting was subject to sales tax. Mr. Close disclosed as a Physical Therapist he was a provider of some of these services. Therefore, he would abstain from participation in discussion and voting on this bill. Mr. Marvel asked if the fiscal note had been reconciled. Mr. Sandoval stated he had had no contact with the Department of Taxation. He noted representatives of the Nevada State Medical Association and the constituent who requested the bill had conducted their own research. Ms. Giunchigliani said she appreciated the intent of the bill. She noted various exemptions had considerably narrowed the sales tax base. She suggested this bill contradicted attempts to establish broad tax policy. Mr. Sandoval said the point of this bill was to include these devices with "medicine." He questioned why they were originally excluded from that classification. Ms. Giunchigliani questioned whether all medicine should be exempt from sales tax. Mrs. Kathy Karrasch, representing her husband Dr. Craig Karrasch, a practicing podiatric physician, testified in support of A.B. 373 (see written transcript of testimony attached as Exhibit D). Mrs. Karrasch offered photographs depicting treatment methods to support her argument that orthotic devices fit the definition of "medicine." Ms. Giunchigliani asked if doctors surveyed were podiatrists. Mrs. Karrasch said she had surveyed practicing podiatric physicians. She did not survey any other specialties. Ms. Giunchigliani pointed out some implements which podiatrists were requesting to be exempt from sales tax were used by other physicians as well. Mrs. Karrasch said her understanding of the survey conducted by the Department of Taxation was that it only addressed orthotic appliances. She pointed out orthotic appliances were prescribed by podiatric physicians, and most orthopedists referred patients to podiatric physicians for orthotic appliances. Ms. Giunchigliani reiterated the impact of this legislation was not limited to podiatrists. Mrs. Karrasch noted orthotic dressings were provided to patients without charge. She likened them to toothbrushes given to dental patients and pointed out dentists were not required to pay sales tax on toothbrushes. Ms. Giunchigliani inquired whether insurance companies paid for dressings. Mrs. Karrasch said insurance companies would pay those charges if they were billed charges. It was not the practice of podiatric physicians to bill those charges. Ms. Giunchigliani said she would assume those costs were included in overall medical charges. Mrs. Karrasch stated those costs were not rolled into office charges but were considered a cost of doing business. Ms. Giunchigliani asked if the state should pick up that cost of doing business. Mrs. Karrasch said she was not asking the state to pick up that cost. She pointed out if the devices were not exempted, the cost of paying sales tax would be added to fees. Ms. Giunchigliani noted the cost of any tax was passed on to the taxpayer. The cost of the exemption would also be passed on to the taxpayer, who would have to pick up the difference in sales tax revenue lost as a result of the exemption. Choosing to shift the tax burden was a policy decision. Mrs. Karrasch noted none of these items were taxed until the amnesty program went into place. Mrs. Brower asked if the same items would be exempt from sales tax if applied in a hospital. Mrs. Karrasch responded affirmatively. She noted the doctors and the hospitals utilized the same suppliers. Mrs. Brower questioned whether these items could be purchased at a drug store. Mrs. Karrasch stated some items could be purchased at a drug store. She noted orthotics could not be purchased at a drug store. Mrs. Chowning asked why hospitals were not required to pay sales tax. Mrs. Karrasch stated she would also like to know the answer to the question. Mrs. Chowning said she was not certain she favored the exemption but there should be equity between the hospitals and the doctors. Ms. Marsha Berkbigler, representing the Nevada State Medical Association and the Nevada State Podiatric Medical Association, testified the inequity between hospitals and doctors appeared to encourage in-patient treatment. She explained she had surveyed all orthopedic surgeons in Nevada and determined total sales taxes paid in 1994 was approximately $680,000. Approximately one-third of that amount was tax on orthotics. In offices where the doctor paid the tax, the tax was passed through to the patient. She suggested sales tax should not be allowed to drive up the cost of health care, and passage of A.B. 373 would help lower health care costs. She noted the effect of A.B. 373 on total sales tax revenue would be minimal and questioned the accuracy of the fiscal note developed by the Department of Taxation. Ms. Stephanie Tyler, representing the Nevada Nurses Association and the Nevada State Chiropractic Association, stated with the advent of managed care and increased outpatient services the issues of equitable taxation and lack of insurance reimbursement for sales tax costs needed to be addressed. Ms. Sonia Martin, representing the Nevada Pharmacists Association, said pharmacists believed they would be impacted by passage of A.B. 373. She noted items sold through pharmacies should fall under the definition of "medicine" in the Act. She expressed support for A.B. 373. Ms. Giunchigliani stated the tax burden should be shared equitably by the doctors and hospitals. She asked if some doctors were passing the cost of sales tax along to patients. Ms. Berkbigler said she imagined all doctors passed the cost to patients. She explained in some cases the tax was paid by suppliers but was then included in the overall cost paid by the physician. Ms. Giunchigliani asked if there were doctors who billed insurance companies for the cost of sales tax. Ms. Berkbigler stated the cost would not be reimbursed if it was billed as a sales tax. Mr. Dini asked if doctors would lower their rates if A.B. 373 was passed. Ms. Berkbigler said the position of the Nevada State Medical Association was that health care costs should be lowered in any manner possible. Mr. Price noted the joint Senate and Assembly Taxation Committee would be meeting to review policy issues associated with proposed tax exemptions. Ms. Janice Wright, Department of Taxation, stated hospitals pay a use tax rather than a sales tax. The only exemptions to that tax were to four charitable hospitals. She explained A.B. 373 addressed the exemption to medicine. She noted the statutes defined both what medicine is and what it is not. Medicine does not include articles in the nature of splints, bandages, pads, compresses, supports, dressings, instruments, crutches, canes, braces, devices, or other mechanical, electronic, optical, or physical equipment. Ms. Wright explained the information in the fiscal note was based on a misunderstanding. The individual laboratories which were contacted provided the actual amount of sales of orthotics transacted in Nevada. The tax impact of those sales would be approximately $290,000, which would be the loss of sales tax revenue per year resulting from expanding the exemption to include orthotics. The Department of Taxation was unable to obtain any information from manufacturers and suppliers with respect to other devices which would be excluded by A.B. 373 (e.g., dressings, bandages, etc.) Therefore, the fiscal impact for that portion of the bill could not be determined. Mr. Marvel asked if the fiscal note was accurate. Ms. Wright stated the fiscal note reflected the amount of taxable sales over a six-month period of time. The fiscal note was based on the suppliers' best estimate of sales over that period of time. ASSEMBLY BILL 458 Makes appropriation to Churchill County for Turnabout AmeriCorps Child Care Program. Assemblywoman Marcia de Braga, District 35, stated A.B. 458 seeks an appropriation for the AmeriCorps Turnabout Program in Churchill County. She explained this is a pilot program conducted through the Lutheran Church in Fallon to help young unmarried pregnant women and young unmarried mothers complete their high school education. The program also requires those women to work in the church day care center under supervision and to learn parenting skills. The program helped these women regain their sense of self-esteem and purpose for their lives. She asked the committee to assist this program. Ms. Giunchigliani asked if this appropriation would allow the program to expand to provide services to women under age 17. Ms. de Braga answered the AmeriCorps program could not accept mothers under age 17. The church has taken mothers under age 17 into the program at its own expense. Ms. Giunchigliani inquired how education was provided to program participants. Ms. de Braga stated the women were attending Churchill County High School. Ms. Giunchigliani asked if this appropriation would be tied to matching funds from AmeriCorp. Ms. de Braga said 15 percent matching funds were required. Ms. de Braga noted A.B. 458 appropriated funds to Churchill County. Those funds would more appropriately be directed to the Churchill County School District. Ms. Tiffany asked if most of the program participants were also Welfare recipients. Rev. Robert Porterfield, Pastor, St. John's Evangelical Lutheran Church, stated the children being served were the most at risk. Their mothers were age 12 to 17 years. The program utilizes a high scope developmental curriculum, which is considered the premiere curriculum for helping these children get a better start on life. In addition, the program helped the mothers finish their education so they could get off Welfare. Many participants had been able to get off Aid to Families With Dependent Children and were receiving only Food Stamps or medical assistance. The program was designed to impact both mothers and children to reduce long-term Welfare costs and crime. Ms. Tiffany asked if most participants were on Welfare. Rev. Porterfield replied most full-time participants were not on Welfare. Ms. Tiffany noted proposed Welfare reform included day care, education, and job placement components. She questioned whether services were being duplicated and why the state should fund this day care program over other day care programs. Rev. Porterfield explained this was a community based program which included the Welfare Division, the Child and Family Services Division, Job Opportunities in Nevada, the school district, and the community hospital, which provided a network of service providers working together. He explained the program was filling a gap that was not previously met by any agency. The goal of the program was to get participants off Welfare and help them become self-supporting. Ms. Tiffany asked how the $40,000 would be distributed. Rev. Porterfield replied funding was in the form of federal grants, in-kind contributions, and matching funds. The federal funding was restricted to use for mothers over 17 years of age. The appropriation requested was to help mothers under 17. Ms. Tiffany inquired whether there would be staff and administrative costs. Rev. Porterfield stated expenses included staffing, training, supplies, etc., and meeting the cash match. Mrs. Chowning asked if this appropriation would be used only for the portion of the program serving mothers under 17. Ms. de Braga responded affirmatively. Mr. Close asked if there were other similar programs in the state. Rev. Porterfield responded to his knowledge, this was the only program of its kind in the state. He noted the Governor's wife was supportive of this program to deal with the high teen pregnancy and repeat pregnancy rates in the rural areas. None of the girls in the program have had repeat pregnancies. Mr. Close asked Ms. de Braga to explain why the appropriation should go to the school district rather than the county. Ms. de Braga stated the program did not have a direct connection with the county. Therefore, the appropriation might more properly be administered through the school district if it did not go directly to the program itself. Mr. Close inquired whether local funds were being contributed to this program. Ms. Sue Chambers, Chairman, Turnabout AmeriCorps Advisory Committee, replied two school district employees were auditing the federal grant and making the federal report. Mr. Close asked if the only county contribution was in-kind support through payment of those employees' salaries. Ms. Chambers stated Mr. Close was correct. She noted the program had approached the school district for matching funds. Mr. Close noted the proposed legislation required that 15 percent of expenses must be paid by the local provider. He asked how that 15 percent would be funded. Rev. Porterfield stated a portion of the appropriation would cover those expenses. The school district would also contribute funds toward those expenses. The balance would be collected through fund raising efforts. Mr. Close requested a breakdown of funding for those expenses. Rev. Porterfield agreed to provide the information. Mr. Hettrick asked what the total program budget was. Rev. Porterfield stated the total budget for the past year was over $330,000. In the current year over $120,000 of in-kind and cash match had been raised locally. Currently $225,339 had been received from federal grants. Ms. Arlene Martinez, program participant, testified she had been able to discontinue cash aid from Aid to Families With Dependent Children and was becoming more self-sufficient as a result of the program. She stated she had learned parenting skills which she applied both in her job at the day care center and in raising her own children. She noted participants were involved in fund raising efforts to raise money for the program. Rev. Porterfield explained by teaching participants child care skills, it was preparing them for employment in day care centers. He said he would appreciate the committee's support for the program. Ms. Chambers noted the program represented a wonderful example of community partnership and what a community can do to help its members. Over ten private and public agencies joined together to provide the in-kind contributions to the program. Mr. Price thanked Ms. Martinez for appearing before the committee. He noted the committee did not often have an opportunity to talk to people who were participating in state funded programs. Ms. Elizabeth Livingston, Nevada Women's Lobby, expressed support for A.B. 458. SENATE BILL 413 Makes appropriation to state public works board for program of capital improvements for Office of the Military. Adjutant General Tony Clark, Office of the Military, noted he had previously testified about two construction projects for which the Office of the Military was seeking state funding. This funding was removed from the Capital Improvement Program at the suggestion of Senator Rawson so approval could be expedited to preclude the possible rescission of federal matching funds which had previously been appropriated for the two projects. He explained once state funding was available, the federal money would become obligated for the projects. Mr. Dini asked if fiscal staff agreed with the figures contained in the bill. Mr. Ghiggeri indicated fiscal staff was in agreement with S.B. 413. Mrs. Chowning asked if there would be any reimbursement from the City of Las Vegas for the Southern Nevada Armory facility. General Clark replied the deed to the property contained a reversion clause stating when the Office of the Military vacated the facility it would revert to the City of Las Vegas. No agreement had been reached with the City to withdraw the reversion clause or to reconvey the property without the reversion clause to allow title to remain with the state. He noted 15 local agencies had expressed an interest in the facility. Vice Chairman Evans asked for committee introduction of a bill for an appropriation to the Department of Education for a pilot program for certain pre-school and kindergarten children. MR. DINI MOVED TO INTRODUCE A BILL FOR AN APPROPRIATION TO THE DEPARTMENT OF EDUCATION FOR A PILOT PROGRAM FOR CERTAIN PRE-SCHOOL AND KINDERGARTEN CHILDREN. MR. MARVEL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * The committee recessed to attend the Assembly floor session at 11:00 a.m. The committee reconvened at 12:20 p.m. Chairman Arberry requested a committee introduction of a bill requiring the State Welfare Administrator to include in state plan for assistance to medically indigent coverage for transplant of person's heart under certain circumstances. MR. MARVEL MOVED TO INTRODUCE A BILL REQUIRING THE STATE WELFARE ADMINISTRATOR TO INCLUDE IN STATE PLAN FOR ASSISTANCE TO MEDICALLY INDIGENT COVERAGE FOR TRANSPLANT OF PERSON'S HEART UNDER CERTAIN CIRCUMSTANCES. MRS. EVANS SECONDED THE MOTION. THE MOTION CARRIED. MR. ALLARD AND MS. TIFFANY WERE OPPOSED. MR. PRICE AND MR. SPITLER WERE ABSENT FOR THE VOTE. * * * * * ASSEMBLY BILL 303 Requires State Board of Education to adopt program to provide pupils with skills to make transition from school to work. Mr. Stevens explained A.B. 303 was the occupational education bill for a one-time appropriation of $4 million. He noted those funds were included in the Executive Budget. As originally drafted, the bill would have provided for ongoing funding of $2 million per year. A proposed amendment would change that funding to a $4 million appropriation, effective on passage and approval, or June 30, 1995, which would make those funds surplus monies to match the funding source recommended in the Executive Budget. He pointed out there were also policy issues associated with the bill. Ms. Giunchigliani noted funding was requested to provide career counseling. Testimony in the committee indicated $200,000 had already been allocated for career counseling. She questioned whether that component of the bill was still necessary. Ms. Giunchigliani expressed concern about rewriting curriculum to coordinate with the school to work transition plan. She noted that was not addressed in A.B. 303. Mrs. Evans said her recollection was that issue was addressed by the Department of Education in earlier testimony. She suggested the department could be called before the committee again if Ms. Giunchigliani was not satisfied with that earlier testimony. Ms. Giunchigliani said she would be willing to meet with the Department of Education. Mr. Dini stated the bill required the State Board of Education to adopt a comprehensive program to provide pupils with the skills to make the transition from school to work. Ms. Giunchigliani stated a course of study had to be in place in order for local boards to write curriculum. Nothing in A.B. 303 addressed rewriting the curriculum. Mrs. Evans stated this was the first time she had heard there was a component missing from the bill but she would research the issue with the Department of Education. Chairman Arberry suggested holding action on this bill. ASSEMBLY BILL 237 Makes appropriation to Nevada Commissioner for Veteran Affairs of Department of Motor Vehicles and Public Safety for replacement of backhoe at Boulder City veterans' cemetery. Mr. Stevens reported A.B. 237 would provide $42,000 for a replacement backhoe at the Boulder City veterans' cemetery. Mr. Dini noted the backhoe was badly needed by the veterans' cemetery. Mr. Close recalled earlier testimony that this appropriation would be supplemented by private donations. He said he would like some assurance those private donations would be forthcoming. Mr. Stevens noted the agency had funds available to supplement this appropriation. ASSEMBLY BILL 238 Makes appropriation to Nevada Commissioner for Veteran Affairs of Department of Motor Vehicles and Public Safety for improvements to veterans' cemeteries. Mr. Stevens stated A.B. 238 involved improvements to the cemeteries at Boulder City and Fernley. He noted the committee might choose to amend the bill to delineate the actual improvements being considered. He pointed out in cases where legislation for one-time appropriations were not specific, the funds could be used for purposes which were not originally contemplated. Mr. Dini stated the intent of the bill was to allocate funding for effluent water and an expansion of eight acres. He noted the appropriation would be matched with federal funds. MR. DINI MOVED DO PASS ON ASSEMBLY BILL 237 AND ASSEMBLY BILL 238. MR. MARVEL SECONDED THE MOTION. Mr. Spitler noted a compelling argument had been made for preburying vaults. He suggested increasing the appropriation to fund some preburial of vaults during good weather conditions. Mr. Close expressed support for A.B. 238 since it would reduce water costs significantly (from $37,000 per year to $3,700 per year). Mrs. Chowning stated she agreed with A.B. 237 and A.B. 238. She concurred with staff's suggestion to include more detail in the bill, however. MR. DINI WITHDREW THE MOTION. MR. MARVEL WITHDREW THE SECOND TO THE MOTION. * * * * * ASSEMBLY BILL 247 Makes appropriation to Division of Agriculture of Department of Business and Industry for maintenance and repair of facilities leased by Division of Agriculture. Mr. Stevens explained this bill was for a one-time General Fund appropriation of $8,937 to Plant Industry and $7,048 to Veterinary Medicine to pay for improvements to their building pursuant to the terms of the lease. MR. HETTRICK MOVED DO PASS A.B. 247. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 248 Makes appropriation to Division of Agriculture of Department of Business and Industry for trucks and safety clothing and equipment for Plant Industry Program. Mr. Stevens explained this was also an appropriation to the Division of Agriculture. It would provide $150,000 to replace a tractor and trailer as well as funding for safety equipment and gasoline testing equipment. Mr. Hettrick stated he objected to allocating $5,925 for three five-gallon tanks. Chairman Arberry stated the committee was in agreement with Mr. Hettrick. He suggested amending that portion of the funding out of the bill. MR. HETTRICK MOVED AMEND AND DO PASS A.B. 248 TO REVISE THE APPROPRIATION FOR THREE FIVE-GALLON TANKS TO $600. MRS. BROWER SECONDED THE MOTION. Ms. Giunchigliani questioned whether the amount estimated by the agency had come from the Purchasing Division. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 249 Makes appropriation to Division of Agriculture of Department of Business and Industry for Veterinary Medical Services. Mr. Stevens reported this appropriation would provide funding for two replacement four-wheel drive vehicles for Veterinary Medical Services as well as for laboratory equipment. MR. DINI MOVED DO PASS A.B. 249. MR. MARVEL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 250 Makes appropriation to State Predatory Animal and Rodent Committee for equipment. Mr. Stevens said A.B. 250 would provide funding to the Predatory Animal and Rodent Committee for safety equipment associated with air operations as well as animal control equipment for use in urban areas. MR. ALLARD MOVED DO PASS A.B. 250. MR. CLOSE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 251 Makes appropriation to Nevada Junior Livestock Show Board for gate panels to ensure safety of exhibitors, spectators and animals. Mr. Stevens explained A.B. 251 was for a one-time appropriation to the Junior Livestock Show Board for gate panels. MR. MARVEL MOVED DO PASS A.B. 251. MRS. CHOWNING SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 308 Authorizes dissemination of records of criminal history to certain agencies which provide protective services to children. Mr. Stevens stated passage of A.B. 308 would expand the list of agencies or individuals who can receive information from the central criminal history repository of the Division of Child and Family Services. MR. FETTIC MOVED DO PASS A.B. 308. MR. DINI SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. PRICE WAS ABSENT FOR THE VOTE. ASSEMBLY BILL 315 Makes supplemental appropriation to School of Medical Sciences of the University and Community College System of Nevada for certain unforeseen expenses relating to Family Practice Residency Program and Family Medicine Center. Mr. Stevens noted the committee had previously discussed A.B. 315. He explained it would authorize a supplemental appropriation to the School of Medicine to correct a shortfall in funding in the current biennium resulting from the Welfare Division reducing an administrative fee to the School of Medicine. He pointed out the Interim Finance Committee approved an Interim Finance Committee allocation for Fiscal Year 1994 and requested that the School of Medicine approach the Legislature for a supplemental appropriation for Fiscal Year 1995. He stated the request was for $135,829, which was less than the amount requested and approved in Fiscal Year 1994. He explained salary savings had been generated to lower the cost of this appropriation. Ms. Tiffany stated she was opposed to A.B. 315. She explained the Dean of the School of Medicine had indicated to her the shortfall was due to a change in the Medicaid rate structure. Subsequently, following her own research on this issue, she became aware of conflicting information. She stated the Medicaid rate was not truly capitated. Secondly, the rate structure was not the problem. Rather, what was being funded was the problem. She stated allowing the School of Medicine to balance its budget on the back of the Medicaid rate and the administrative rate sent the wrong message to other agencies. In addition, not only Medicaid patients were being treated. Ms. Tiffany also noted the School of Medicine claimed to have saved the state $8 million. Information from the former Director of the Department of Human Resources indicated there was no direct savings which could be attributed to the PCCM Program. Mr. Close also expressed concerns about A.B. 315. He noted if the problem was that the rate structure was inappropriate, providing additional funding to the program would not resolve the problem. He added the revenue should be coming from the Welfare Division budget. Mr. Allard questioned whether this funding was included in the Executive Budget. Mr. Stevens indicated it was not. Ms. Giunchigliani said it was her understanding this bill had failed previously. She questioned whether it was being opened for reconsideration. Mr. Stevens explained when this bill had been heard previously it had not received a sufficient number of votes to either pass or fail. Ms. Giunchigliani indicated she did not support this measure. She suggested this program was not working and the Legislature should not continue to subsidize it. Chairman Arberry said his understanding of this shortfall was that it was unforeseen and was not the fault of the School of Medicine or the University. He agreed the Legislature had subsidized the School of Medicine in the past but there was no need to penalize the School of Medicine in this instance. Mr. Dini recalled the School of Medicine had originally approached the Interim Finance Committee requesting funding for both Fiscal Year 1994 and Fiscal Year 1995. The Interim Finance Committee directed the School of Medicine to approach the Legislature for funding for Fiscal Year 1995. Mr. Dini disagreed with the statement that the program was not working. He stated the $8 million savings were verifiable. He suggested some of the previous comments about the program were somewhat inappropriate. He stated the shortfall was not the fault of the School of Medicine. He said the Legislature should support this program. Mrs. Brower asked if action on this bill could be held until the committee could review the information obtained by Ms. Tiffany. Mr. Close inquired why this funding was not recommended by the Governor in the Executive Budget. Mr. Stevens stated he was uncertain why this funding was not recommended by the Governor, particularly since the Budget Division recommended to the Interim Finance Committee that it only provide funding for Fiscal Year 1994 and approach the Legislature for a supplemental appropriation for Fiscal Year 1995. Mr. Dini noted the Budget Director requested the bill to make the supplemental appropriation. Ms. Giunchigliani pointed out there were concerns raised about funding this program at the Interim Finance Committee hearing. She reiterated in her opinion the program was not working and should be revisited. Money that was appropriated for the program was being shifted to supplement other areas of the budget. She stated Medicaid could be more appropriately managed elsewhere. Chairman Arberry said action on this measure would be held until after the School of Medicine could respond to the committee's concerns. There being no further business, the meeting was adjourned at 1:05 p.m. RESPECTFULLY SUBMITTED: Dale Gray, Committee Secretary Assembly Committee on Ways and Means May 22, 1995 Page