MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session June 25, 1995 The Committee on Ways and Means was called to order at 2:57 p.m., on Sunday, June 25, 1995, Chairman Morse Arberry, Jr. 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 699 Makes supplemental appropriation to division of child and family services of department of human resources for costs of placing certain children in intermediate care facilities for mentally retarded in Utah. Chairman Arberry requested a final update regarding A.B. 699. John Sarb, Administrator, Division of Child and Family Services, reported A.B. 699 requests $331,158 as a supplemental appropriation for category 11 in budget account 3229 to cover a probable shortfall in that category. Mr. Stevens indicated the Fiscal Analysis Division had worked with the Budget Division and Mr. Sarb's office for several days and the requested appropriation has changed. He noted the problem relates to the failure on the part of the Division of Child and Family Services to collect funds from Clark and Washoe Counties as part of their agreement to bring in money from the counties to be matched with federal IV-A funds which would be returned back to the counties. Clark and Washoe Counties were also to reimburse the state for services provided on behalf of county clients and $1 million was budgeted in FY 95. Interim Finance Committee minutes indicated those funds would be collected and they have not been. Those amounts have also been built into the FY 96 and FY 97 budget and the Division has indicated a very small amount of money is expected to be collected from that source in either year of the upcoming biennium. Mr. Stevens suggested a report be requested from the Division through the Budget Office reflecting how the Division plans to collect the money from the counties. If money is not collected from the counties, the federal government could be billed for those costs; however, the billing rate would be only 50 cents on the dollar. The problem exists in this fiscal year and could potentially recur in each year of the upcoming biennium. The latest information from the Division indicates a $331,158 appropriation will be required through the remainder of this fiscal year. Mrs. Evans observed that during a prior hearing the committee had requested the Division provide additional information regarding projected collections from the counties during the current fiscal year. Mr. Sarb said the estimated county bill- back for the current fiscal year was $3,848; approximately $24,414 is expected in each year of the upcoming biennium. Mrs. Evans asked how the Division's budget would be affected and whether there would be a shortfall in the future that would cause the Division to request a supplemental appropriation. Mr. Sarb responded he could not be certain a shortfall would occur in this budget account during the next fiscal year because a number of variables affect the account. He also noted a probability that the entire IV-A Emergency Assistance program will cease to exist October 1, 1995, because no version of federal welfare reform contains the program. Mrs. Evans indicated during the November 1994 Interim Finance Committee meeting the Division testified $1 million would be collected and currently, near the end of the fiscal year, only $3,848 has been collected with only $24,414 projected for the next year. Mr. Sarb explained in February of 1994, estimated figures were presented to the Interim Finance Committee and at that time it was expected the program would begin April 1, 1994. The necessary federal approvals were not received until well into April and the program actually began July 1, 1994. The contract with Clark and Washoe counties stipulated that after four months of experience a bill back process would be developed by the counties and the Division. The estimate of $1 million assumed nine months of billing and collection; however, the program began late. Negotiations with the counties did not proceed smoothly and in calendar 1995 it was decided an agreement was not forthcoming and some money needed to be recouped; the services on which the counties and state could not agree were removed from the bill-back arrangement and those services were directly billed to the federal government at the rate of 50 percent. After removing those services from the bill-back negotiations, an agreement was reached with the counties effective April 1, 1995. Mrs. Evans reiterated that in November 1994, the estimate was $1 million and at no time during hearings on the Division's budget was the shortfall mentioned. A.B. 699 was introduced June 7. She inquired at what point the Division was aware it would not collect a sizeable portion of that money and asked why the committee was not informed of the problem then. Mr. Sarb responded he was not aware of the shortfall during the budget hearings. It was only during the past few weeks that the amount to be received from the counties was known. He noted not all of the $1 million has gone uncollected because the services the money was to be collected from have been billed separately from the county bill back. Total IV-A Emergency Assistance collections projected in February of 1994 have been exceeded. Mr. Sarb noted the Division has a great deal of difficulty tracking encumbrances; the BPR and SACWIS is designed to address that ongoing problem. Chairman Arberry asked whether the Division sent the counties a letter asking for the money. Mr. Sarb responded the counties were billed for the agreed upon services. Chairman Arberry asked how much the billings were. Mr. Sarb said the billing depends on the service and the hourly rate for that service. Chairman Arberry asked what would be necessary for the billings to be paid. Mr. Sarb responded any service the contract covered was being billed and paid. What the counties owe was determined by the amendment to the contract. He stated the original estimate of $1 million was too high and the bill-back amendment did not include all of the services it was originally anticipated to include. He reiterated the counties have been paying what they owe; however, what the counties owe has been reduced drastically from the February 1994 estimate. Chairman Arberry asked why there was such a large shortfall if the Division and its staff were doing what they should. Mr. Sarb replied the staff is doing what it should; however, services that would have been reimbursed 100 percent were removed from the bill-back arrangement. Chairman Arberry asked who removed the services from the bill back arrangement. Mr. Sarb said the services were deleted during negotiations between Clark and Washoe Counties and the Division when it became apparent that was the only way to move the negotiations forward and to start collecting money into the Division's accounts. Mr. Sarb said at the time, it seemed that 50 percent of something was better than 100 percent of nothing. Mr. Marvel said it appeared the Division was currently in deficit spending. Mr. Sarb replied it was estimated the budget will be approximately $331,158 short. When Mr. Marvel noted there are statutory prohibitions against deficit spending, Mr. Sarb indicated he was aware of those prohibitions. Mr. Marvel asked whether Mr. Sarb had been aware the situation was developing. Mr. Sarb said the problem became apparent around June 7, 1995. He wished the committee to be aware the Division did not take the issue lightly and indicated if he could do something differently, he would have approached the Interim Finance Committee last year to avoid reaching the point of deficit spending. Mr. Marvel asked what would happen if the program was discontinued. Mr. Sarb said the program is a revenue source that has brought $2.5 million into the state that was previously paid from the general fund. Mr. Stevens indicated he would have to check to see whether $2.5 million was collected from the federal government that previously came from the general fund. He recalled programs were dramatically enhanced during the interim period by the use of IV-A funds and other federal programs and general fund never supported that enhanced funding in the past. Mr. Stevens indicated Chairman Arberry asked him what leverage the Division might have to cause the counties to pay in the second phase of this process. The process was originally presented in two phases. Phase one was that the counties would send in county funds to be matched with federal IV-A dollars which would then be passed back to the counties. Mr. Stevens said information received indicated the counties realized approximately $3 million. The second phase was that the counties would then pay the state for services rendered on their behalf. He said he had not read the contracts but the leverage might be to cease implementation of phase one which would then cost the counties a significant amount of money and might cause the counties to be more receptive to paying costs anticipated under phase two. Chairman Arberry invited Mr. Sarb to address those comments. Mr. Sarb replied he did not believe stopping phase one would be a legal option. He reiterated there were two ways the state would make money on the process: the set of services billed directly to the federal government and the bill back provision. If the program is stopped, the federal funds the Division receives would also stop. Chairman Arberry asked what period of time the contracts cover. Mr. Sarb replied the contracts run through 1999. Chairman Arberry expressed concern that the state is bound to a process without receiving anything in return. Mr. Sarb said this fiscal year the state received $2.6 million through June 16, 1995 from this program, more than was projected. Mr. Price remarked the Division could have used the Legislature as a negotiating tool to assist with negotiations with the counties. Ms. Giunchigliani asked whether the services under discussion are required. Mr. Sarb responded the services were for the most part previously supported by the general fund. The enhanced services Mr. Stevens referred to were services the Division would have been required to institute in order to ensure rural areas received the same services as urban areas. Ms. Giunchigliani confirmed the counties pay for some services. Mr. Sarb said one of the services paid is investigations; the IV-A Emergency Assistance program pays for emergency services for a six month period of time, starting from the investigation. In Clark and Washoe Counties, the county provides investigations; the state provides investigation services in the rest of the state. Ms. Giunchigliani asked if the contract contains a re-opener clause. Mr. Sarb said the contract specified termination for cause with 180 days notice. Ms. Giunchigliani indicated there was cause and asked whether notice had been served. Mr. Sarb responded negatively and indicated he did not feel there was cause to serve notice. Mr. Spitler asked what the shortfall is projected for the next biennium. Mr. Sarb responded he was not certain there would be a shortfall and if there is a shortfall, it may be possible to cover it through other funding sources. Mr. Spitler inquired whether the contract had been reviewed by the Attorney General before it was signed. Mr. Sarb said the contract was reviewed by the Attorney General. Mr. Spitler observed the contract should include a clause for mutual termination, especially since the contract extends beyond the upcoming biennium. Mr. Sarb said one reason the contract was so binding for all parties was that the contract represents a large amount of money coming into the state and if any of the parties did not uphold its portion of the contract, the other parties would be equally affected. Mr. Spitler asked if the other parties face any shortfall as a result of the contract. Mr. Sarb said the money was required for the Division of Child and Family Services to make its budget; the money was not vital to the county budgets. Mr. Spitler pointed out the one entity that did not really benefit from the arrangement was the state. Mr. Sarb reiterated the state received more money from the arrangement than was projected. SENATE BILL 18 Requires study of rates charged for leasing grazing rights on private property in Nevada. Stephanie Licht, representing the Nevada Woolgrowers Association, spoke in support of S.B. 18 which requires a study of rates charged for leasing grazing rights on private property in Nevada. Ms. Licht noted she had been associated with the range livestock industry for 25 years and adversaries of public lands grazing have always said charges for grazing lease rights were too low. Senator Rhoads introduced this legislation in an attempt to clarify grazing lease rates for public and private lands. S.B. 18 would identify the number of leases, rates charged, terms of each lease, acreage, head of livestock involved and any other pertinent information. The study would be conducted by the Department of Agricultural Economics of the University of Nevada, Reno under the auspices of the Board of Regents. Any money not used in performance of the study as of June 30, 1997 would be returned to the general fund. Ms. Giunchigliani asked what guarantees would be provided that the Department of Agricultural Economics would be independent in their research. Joe Guild, representing the Nevada Cattlemen's Association, responded the Department of Agriculture would not actually conduct the study but would contract with independent range scientists to perform the study. Testimony from the Administrator of State Lands indicated the information to be generated by the study was important. Mr. Guild expressed confidence the study would be independent and scientifically oriented. Ms. Giunchigliani observed the results of the study could have long term policy effects. Mr. Guild remarked there was serious discussion in Congress that some western range lands will be returned to the states and it is important for Nevada to have data regarding what would constitute a valid fee if land was returned to the state. Mr. Dini said the information to be obtained would be helpful when dealing with United States government departments. Mr. Marvel spoke in support of S.B. 18 and concurred that historically there has never been enough data to establish what a private lease amount should be and if Nevada does receive some western range lands back, it would be of tremendous benefit to have firm information regarding a fee structure. Jim Richardson, representing the Nevada Faculty Alliance, spoke in support of S.B. 18. He pointed out the individuals who will perform the study have a high national reputation and the information to be obtained is vital. Mr. Richardson said the Sierra Club was also in favor of S.B. 18. ASSEMBLYWOMAN EVANS MOVED DO PASS ON S.B. 18. ASSEMBLYMAN DINI SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. **************** SENATE BILL 198 Makes appropriation to department of prisons for replacement of various equipment. Robert Bayer, Director of the Nevada Department of Prisons, spoke in support of S.B. 198 which represents the Department's equipment request for the biennium. Gary Ghiggeri, Deputy Fiscal Analyst, distributed a document entitled "Nevada Department of Prisons, Senate Bill 198 - Summary," attached as Exhibit C which outlines equipment requested in S.B. 198. He requested a representative from the Department of Prisons provide explanation regarding some of the more costly items on the list. John Neill, Department of Prisons, explained a bus requested in the amount of $290,500 plus $5,000 for caging would be the second bus owned by the Department. The Department currently owns a 44 passenger bus that is used for inmate transportation throughout the state. The expansion of the prison system and the addition of the Lovelock Prison created the necessity for a second bus. Mr. Neill remarked the new bus would replace 12 passenger mini vans at a considerable savings. The requested bus could accumulate 750,000 miles before replacement would be necessary. The existing bus had 322,950 miles as of June 1 and costs approximately 50 cents per mile to operate. Ms. Giunchigliani asked whether the mini vans would be sold. Mr. Neill responded the vans would still be used. He also remarked this was the first time the entire equipment request appeared in the form of a single bill. Mr. Neill said another major item is a request for $562,000 for data processing needs. Mrs. Chowning asked whether the requested two-way radios would provide sufficient communication equipment for the guards. Mr. Neill explained the radios were the second phase of equipment approved by the Interim Finance Committee and would provide enough radios for the next two years. Mrs. Chowning inquired whether outdated equipment in the medium security prison in Carson City would be replaced. Mr. Bayer responded the necessary equipment is within a capital improvement project. She asked whether furniture requested in S.B. 198 was made by Prison Industries. Mr. Neill responded that furniture was purchased from Prison Industries whenever possible. ASSEMBLYMAN DINI MOVED DO PASS ON S.B. 198. ASSEMBLYMAN MARVEL SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYWOMAN EVANS WAS NOT PRESENT AT THE TIME OF THE VOTE. ************** SENATE BILL 217 Makes appropriation to department of prisons for expenses related to Stewart conservation camp. Robert Bayer, Director of the Department of Prisons, explained S.B. 217 requests a one-shot appropriation for equipment for the expansion of the Stewart Conservation Camp, scheduled for completion in August of 1995. Mr. Ghiggeri distributed a document entitled "Nevada Department of Prisons, One Shot Appropriation - S.B. 217," attached as Exhibit D, which lists items requested in S.B. 217. Ms. Giunchigliani inquired how many beds will be at the Stewart Conservation Camp. Mr. Bayer answered the number of beds will increase from 188 to 240. ASSEMBLYMAN FETTIC MOVED DO PASS ON S.B. 217. ASSEMBLYMAN DINI SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYWOMAN EVANS AND ASSEMBLYMAN ALLARD WERE NOT PRESENT AT THE TIME OF THE VOTE. ************** ASSEMBLY BILL 622 Revises provisions related to tobacco. ASSEMBLY BILL 637 Revises provisions governing crimes related to tobacco and makes appropriation to bureau of alcohol and drug abuse of rehabilitation division of department of employment, training and rehabilitation. Harvey Whittemore spoke in support of A.B. 622 on behalf of R. J. Reynolds Company. Mr. Whittemore introduced Sam McMullen who appeared on behalf of Phillip Morris, Jack Jeffrey on behalf of the Tobacco Institute, and Peter Kruger on behalf of various retail convenience stores. Mr. Whittemore said A.B. 622 is the result of 18 months of work combining interests associated with the tobacco industry along with retailers in an attempt to comply with the federal law so that the state does not lose federal grant money. Random unannounced inspections are required but how those inspections are conducted is a policy question yet to be decided. A.B. 622 would allow the Attorney General or designee to contract with individuals to perform those inspections. The tobacco industry is concerned the inspections be conducted in a fair and impartial manner. Mr. Whittemore remarked BADA funds would not be adversely impacted; rather A.B. 622 would ensure those funds remain available. A pre-emption provision states that if the state is in compliance, local governments could not establish different rules than those expressed as a state policy. Mr. Close expressed concern regarding Section 3 which identifies the Attorney General and later language which allows individuals under 18 years of age to perform inspections. Mr. Whittemore said individuals under 18 years of age could take part in unannounced inspections along with adults to determine if a retailer was selling tobacco products to underage individuals. Mr. Fettic remarked A.B. 622 requires a driver's license as proof of age. He pointed out many individuals who are 16 or 17 years old appear to be 18 years of age and expressed concern about retailers unknowingly selling tobacco to underage teenagers. Mr. Whittemore said when A.B. 622 was created, it was desired to create a program which would comply but would not negatively impact the merchant who should not be held to unrealistic standards. However, it is a crime to sell tobacco products to someone who is underage. It is suggested merchants be subject to misdemeanor for a continuing practice of selling tobacco to minors. Ms. Giunchigliani referred to page 3, line 44, and requested explanation of what types of identification would be acceptable. Joe Guild, representing the Smokeless Tobacco Council, said an affidavit to the effect an individual was over the age of 18 would suffice. Ms. Giunchigliani confirmed that parental consent would be required for a minor to participate in an unannounced inspection and questioned the requirement that minors participating in inspections be photographed immediately prior to the inspection. Mr. Wittemore replied the photograph was to verify the individual appeared to be within the age group for purposes of determining compliance with state law. Mr. Dini requested explanation of the Attorney General's involvement. Sam McMullen, representing the Las Vegas Chamber of Commerce and Phillip Morris, explained the original bill draft proposed that the sheriff in each county be responsible. Adverse reaction from the sheriffs caused the Attorney General to be contacted who agreed to take an umbrella role so that either the Attorney General's Office or, through a grant program, local law enforcement agencies would contract for individuals to conduct inspections in areas where local law enforcement did not wish to do so. The first reprint of A.B. 622 now allows any individual to conduct inspections as long as the inspection is performed in a fair and impartial manner. Mr. McMullen remarked there are biases on all sides of the smoking issue and the interest is in having inspections performed accurately and reliably for the federal government as that information affects state BADA funds. Mr. Dini inquired how retailers are expected to control purchases from cigarette machines. Mr. McMullen said retail compliance checks will be for across-the- counter sales. The issue with vending machines is whether they are placed in an area that is illegal under the law. Mr. Whittemore said A.B. 622 states a coin operated vending machine containing cigarettes may not be used to dispense any products not made from tobacco. Mr. Dini asked whether the amended version of A.B. 622 would provide adequate funding for BADA. Mr. Whittemore said the first reprint does comply with federal mandates regarding eligibility for BADA funding by specifying that inspections will be conducted as necessary to comply with federal law. In sections pertaining to how an inspection would be performed it has been attempted to balance the interests of the retailers with the interests of those individuals trying to ensure the smoking laws are being complied with to make sure the state qualifies for the 10 percent grant which is in excess of $600,000. Mr. McMullen explained A.B. 622 was driven by the Synar Amendment which reauthorized health funds in 1992. The Synar Amendment requires: the closure of loopholes in the law which would allow individuals under 18 years of age to acquire tobacco; a program for random, unannounced inspections; reasonable enforcement of laws. A group of retail wholesalers, distributors, the Reno and Las Vegas Chambers of Commerce, Petroleum Marketers, convenience stores, tobacco industry, tobacco wholesalers and distributors worked on A.B. 622 for approximately 14 months. Mr. McMullen said A.B. 622 clearly addresses issues regarding closing loopholes and unannounced inspections. The best enforcement will be the training programs and delineation of company policies and communication to retail clerks that the law must be followed. Mr. Dini pointed out A.B. 622 excludes Indian cigarette shops where most underage individuals purchase tobacco products. Mr. McMullen agreed A.B. 622 does not address the issue. Mr. Whittemore said the group was aware of inequities associated with sales of cigarettes from Indian cigarette shops; however, the state has no authority to inspect those businesses. Federal law does mandate inspections be performed of those retailers under state regulation. Mrs. Evans asked whether it was true the fiscal note for A.B. 622 was actually contained in A.B. 637. Mr. Whittemore said necessary funds could be appropriated under A.B. 637 or the Attorney General could appear before the Interim Finance Committee when the enforcement program has been designed and request funding at that time. It is not anticipated to require in excess of $60,000 for the biennium. If funds were appropriated in A.B. 637, the necessary funds would be available for the program in A.B. 622. Mrs. Evans said typically when a sum is appropriated, a detailed breakout of expenditures is provided to indicate how the requested appropriation was calculated. Mrs. Evans remarked A.B. 622 provided for the Attorney General to perform inspections through her office or to contract with an outside entity. She inquired who that outside entity might be. Mr. McMullen responded funding could be granted to law enforcement agencies to cover time for their staff to perform inspections or private investigators could be hired. Mr. McMullen added he understood the Washoe County Sheriff had expressed interest in the grant program as had some other sheriffs. Mrs. Evans confirmed the Attorney General could accept RFP's from interested individuals. Mrs. Evans observed the Synar Amendment required a compliance study and asked whether the Attorney General would be likely to conduct the compliance study. Mr. McMullen indicated enough inspections needed to be conducted throughout the state to provide a reliable sampling and that information would then have to be formatted into a report, probably reflecting the number of sites inspected and the results. Mr. Marvel asked whether the Attorney General had been contacted regarding A.B. 622. Mr. Guild responded two meetings were held with Brooke Nielsen of the Attorney General's office. Mr. Marvel inquired if either A.B. 622 or A.B. 637 would produce compliance with the Synar Amendment. Mr. Whittemore replied that to comply with the Synar Amendment the three requirements of closing loopholes, conducting random, unannounced inspections and compiling the results had to be met. He added retailers would need to be educated regarding the program and inspections that would be performed. Ms. Giunchigliani observed Section 7 from A.B. 637 could be amended into A.B. 622 and then only A.B. 622 would need to be processed. Mr. Whittemore agreed. Mr. Price remarked one of the groups concerned with A.B. 622 might submit a bid to the Attorney General's Office to perform the unannounced inspections. Mr. Whittemore reiterated A.B. 622 required the inspection be fair and impartial and if individuals involved in that business performed the inspections, the inspection would be neither fair nor impartial. Mr. Price observed a member of the Attorney General's Office should appear before the committee before any action was taken on A.B. 622. Chairman Arberry asked whether monitoring would be done to ensure competing businesses did not falsely accuse one another of inappropriate sales of tobacco products, such as sales of single cigarettes. Mr. Whittemore said this practice could take place with or without A.B. 622. The intent of A.B. 622 was not to regulate conduct between retailers but to establish an enforcement mechanism so that the state meets the basic requirements of the Synar Amendment in a way that is fair to retailers. Chairman Arberry remarked that in many areas, retailers sell single cigarettes. Mr. Whittemore said that practice must be stopped in order to comply with federal law. Mary Santina-Lau of the Retail Association of Nevada spoke in support of A.B. 622. The Association wanted fair and impartial inspections conducted through law enforcement with guidelines established to avoid "expose'" type operations. Ms. Santina-Lau credited Mr. Whittemore and Mr. McMullen for involving the Retail Association in work on A.B. 622 and the Retail Association is very strongly supportive of A.B. 622. Mr. Fettic expressed concern with language on page 3, Section 7 which terms compliance as demanding to see a valid driver's license or other documentary evidence. He noted teenagers younger than 18 could be made to appear of age, buy tobacco products from a retailer and the retailer would be subject to sanction. Mr. Whittemore referred to page 4, lines 7 through 12 which indicate the owner of a retail establishment has complied with the law if employees were not directed to sell tobacco products to underage individuals or if the owner has established a continuing program of employee training designed to prevent inappropriate tobacco sales. Mr. McMullen indicated the effect of the language is that a retailer has complied if he requests a driver's license and the driver's license indicates the individual is more than 18 years of age. He noted the program is new and the cost contained in the fiscal note may not be accurate. Mr. Close confirmed there is currently a law prohibiting the sale of tobacco products to minors with enforcement being the responsibility of local jurisdictions. He asked whether the Health Department had reported retailers who sold tobacco products to minors. Mr. McMullen said the Synar Amendment put retailers in the middle of the smoking and non-smoking war. Because of that and the recognition that teen smoking can be used as an argument to foster anti-smoking legislation, unscrupulous inspections have been performed of retail establishments. BADA has also been put in the middle of the smoking and non-smoking war. Mr. Close confirmed anti-smoking individuals have reported retailers and not the health agencies who were given the responsibility of enforcement. Ms. Santina-Lau responded this has happened in other states. Nevada has had no requirements for inspections so that has not occurred in this state. Mr. Close asked who would perform inspections if the Attorney General did not. Mr. Whittemore said district health authorities would then have that responsibility. Ms. Tiffany remarked licenses to sell tobacco are issued by counties and observed A.B. 622 appears to supersede the counties' responsibilities. She noted A.B. 622 should require that counties implement the program and report to the state. Mr. Whittemore said officials at the local level would not provide fair and impartial inspections and if a retailer was found not to be in compliance, the entire business license would be revoked rather than merely the tobacco license. Ms. Giunchigliani expressed support for the Attorney General's Office performing the unannounced inspections. Vice-Chairman Evans called for further public testimony. Liz Breshears, Chief of the Bureau of Alcohol and Drug Abuse, testified BADA is interested in A.B. 622 and A.B. 637 in two ways. One is to preserve the federal block grant funding entering the state which provides the majority of funds for treatment and prevention for community based programs. The second interest is in the area of prevention in that prevention occurs at the community level and retailers who are members in communities around the state must comply with the law willingly. The fiscal note in A.B. 637 is for $60,000. BADA has no enforcement authority and those funds would allow BADA to contract with sheriffs and chiefs, local health authorities, the Nevada Department of Investigation or other peace officers authorized by law to enforce. Ms. Breshears said unbiased, professional enforcement must be done but a scientific, random survey must also be conducted. BADA would like all retailers to willingly participate in that survey. Ms. Breshears distributed a document entitled "Synopsis, 1994 Random Selection, Nevada State Tobacco Purchase Report," attached as Exhibit E. She pointed out that in Mesquite, Nevada, community education has occurred consistently and only 28 percent of the retailers sold tobacco to minors. In Washoe County where there had been no merchant education, 78 percent of the retailers sold tobacco to minors. In order to preserve BADA funds, the number of retailers who have sold tobacco to minors needs to be very low. Mrs. Evans confirmed Ms. Breshears was concerned that funding was only being requested for enforcement but was also needed for prevention and education. Mr. Dini observed it would be difficult for the Health Department with its low numbers of staff members to become involved in enforcement. Ms. Breshears said that although current law indicates the Health Department shall enforce, no citation has ever been issued. Mr. Dini expressed support for contracting enforcement services. Chairman Arberry called for further public testimony. Eric Cooper, Nevada Sheriffs and Chiefs Association, provided explanation for Mr. Dini's comments and said grants from the Attorney General's office would be for overtime officers to perform inspections and enforcement functions. SENATE BILL 386 Makes various changes concerning program of accountability of public schools and statewide achievement and proficiency testing of pupils. Mr. Stevens explained S.B. 386 contained an appropriation of $670,030, of which $489,000 was contained in the Executive Budget. A proposed amendment would amend section 1, page 1, line 19 by inserting: "In addition, the board shall also report the results of other examinations of pupil achievement administered to each pupil in the school district in grades other than 4, 8 and 11. The results of these examinations for the current school year must be compared with those of previous school years." Mr. Price asked what would be done with the results of the comparison between school years. Ray Bacon said the funding was increased by the Senate Finance Committee so that all tests could be graded by the same grading agency so results would be comparable statewide between school districts. Mrs. Chowning said she did not understand what additional achievement examinations meant. She noted many factors affect test scores, including nutrition, home life and the safety of the neighborhood, all of which are difficult to include in legislation; however, the lack of a student's ability to speak fluent English could be included. Schools with a large portion of non-English speaking students will appear to be doing a poor job of teaching because those students will not perform as well on tests. Mrs. Chowning stated a bill that would have provided funding for additional English as a second language education was killed in the Senate. She observed if more students are taught English they will perform better and the number of students who do not speak English fluently is increasing. Ms. Giunchigliani requested explanation of "other examinations" in the amendment and referred to section 1, item c, and asked if those reports referred to individual reports done by each school which are then sent to parents or whether the report was transmitted to the State Department of Education. Ms. Giunchigliani asked what the budget included. Mr. Stevens said the budget was just under $500,000. Ms. Giunchigliani observed the fiscal note was close to $1 million and requested clarification of whether the fiscal impact on the school districts had been considered. Mike Alastuey, Clark County School District, said he understood the amount in the Executive Budget had been augmented and that a fiscal note was very close to the $600,000 appropriation in S.B. 386. Mr. Alastuey agreed with Ms. Giunchigliani there would be an impact on the school districts; however, similar impacts had been absorbed by the school districts in the past and the appropriation should be sufficient to cover the costs of the testing. Ms. Giunchigliani asked what "other examinations" meant. Mr. Alastuey said he could not answer that question. Mrs. Chowning noted there are some schools where 90 percent of the students have limited English proficiency. If the tests are given in English, those schools will fair very poorly on the test results. She asked whether all the tests would be given in English and if so, requested a letter of intent be sent to the State Board of Education that those schools with primarily non-English speaking students must be presented separately in the final report. Mr. Alastuey replied that to the best of his knowledge, all testing would be done in English. Mrs. Chowning indicated she agreed with the accountability of schools but felt the picture had to be fair and that included indicating which schools had a large population of non-English proficient students. Mr. Arberry agreed with Mrs. Chowning that testing in English of non-English proficient students did not provide a fair means of evaluation. Mr. Close requested clarification of the fiscal note. Mr. Stevens explained $479,000 was built into the Executive Budget while the appropriation in S.B. 386 is $670,000. Ms. Giunchigliani then requested explanation of the $771,000 fiscal note. Mr. Stevens said he was not sure if the first reprint would modify the fiscal note of the original bill. Ms. Giunchigliani asked whether the cost for "other exams" was included in the appropriation. Mr. Stevens said the amendment regarding "other exams" resulted from newspaper editorials and the fact that some school districts test students in areas other than those included in S.B. 386. Ms. Giunchigliani asked whether the amendment would impact the fiscal note. Mr. Stevens said he did not think so because those exams are currently being administered by the school districts; the amendment does not require the school districts to conduct new additional examinations. Ms. Giunchigliani expressed concern that comparison would be made of tests that not all school districts give. Mr. Hettrick clarified the language requires comparison of test scores to be made with previous years, not between school districts. Mrs. Evans asked what costs would recur in future bienniums. Mr. Bacon indicated the larger portion of expense would be to revise the proficiency test which had not been revised since approximately 1984. Chairman Arberry confirmed the larger cost would be to bring the proficiency test to current standards, the cost would then decrease in the next biennium and would maintain at a fairly constant level. Mr. Bacon concurred. ASSEMBLYMAN HETTRICK MOVED AMEND AND DO PASS ON S.B. 386 WITH THE INCLUSION OF A LETTER OF INTENT TO THE STATE BOARD OF EDUCATION THAT SCHOOLS WITH LARGE POPULATIONS OF STUDENTS WITH LIMITED ENGLISH PROFICIENCY MUST BE SO INDICATED ALONG WITH TEST SCORE RESULTS. ASSEMBLYMAN ALLARD SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYWOMAN GIUNCHIGLIANI VOTED NO. ************* With no further business to come before the committee, Chairman Arberry adjourned the hearing at 5:21 p.m. RESPECTFULLY SUBMITTED: Deborah Salaber, Committee Secretary Assembly Committee on Ways and Means June 25, 1995 Page