MINUTES OF THE JOINT MEETING OF SENATE COMMITTEE ON FINANCE AND ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session February 9, 1995 The joint meeting of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman William J. Raggio, at 8:00 a.m., on Thursday, February 9, 1995, in Room 119 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. SENATE COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews ASSEMBLY COMMITTEE MEMBERS PRESENT: 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 ASSEMBLY COMMITTEE MEMBERS ABSENT: Mr. Morse Arberry, Jr., Chairman (Excused) STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Mark Stevens, Fiscal Analyst Gary L. Ghiggeri, Deputy Fiscal Analyst Jeanne L. Botts, Program Analyst Pamela Jochim, Committee Secretary Jonni Sue Hansen, Committee Secretary OTHERS PRESENT: Michael Nolan, Budget Analyst, Budget Division, Department of Administration Peter G. Morros, Director, State Department of Conservation and Natural Resources Naomi Duerr, State Water Planner, Division of Water Planning State Department of Conservation and Natural Resources Lewis H. Dodgion, Administrator, Division of Environmental Protection, State Department of Conservation and Natural Resources William A. Molini, Administrator, Division of Wildlife, State Department of Conservation and an Natural Resources Pamela Wilcox, Administrator and State Land Registrar, Division of State Lands, State Department of Conservation and Natural Resources Roy W. Trenoweth, State Forester Firewarden, Division of Forestry, State Department of Conservation and Natural Resources R. Michael Turnipseed, State Engineer, Division of Water Resources, State Department of Conservation and Natural Resources Wayne Perock, Chief Field Operations, Division of State Parks, State Department of Conservation and Natural Resources Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources James W. Baetge, Executive Director, Tahoe Regional Planning Agency, State Department of Conservation and Natural Resources Robin Bates, Chief, Classification and Planning, Department of Prisons Senator Raggio opened the meeting on the State Department of Conservation and Natural Resources budgets. Natural Resources Administration - Page 1879 Peter G. Morros, Director, State Department of Conservation and Natural Resources, testified the base budget funds five professional and classified employees. The Department of Personnel has recently approved a reclassification for a Land Use Planner from a grade 33 to a grade 35. The Land Use Planner position was difficult to fill because of the low salary level. Senator Raggio asked if the position will be utilized to implement the Environmental Resources Plan. Mr. Morros replied in the affirmative. He noted the position is presently filled, but in order to retain an employee in the position a higher salary is needed. Senator Raggio questioned what is the purpose of the Environmental Resources Plan. Naomi Duerr, State Water Planner, Division of Water Planning, State Department of Conservation and Natural Resources, stated the department is developing a Natural Resources Plan in order to identify issues within the natural resources environment, ongoing planning efforts, and areas in need of attention. Staff from each division of the department have been selected to help with the plan development. Senator Raggio asked when the plan would be ready for presentation. Ms. Duerr said it is the Division of Water Planning's goal to present the plan to the 1997 Legislature. She said, "The idea is to pull together existing planning processes, not reinvent the wheel." Mr. Morros noted the base budget provided increases in board member salaries and workers' compensation coverage for the seven member Natural Resources Board. Senator Raggio asked if Mr. Morros would be addressing the status of ongoing water negotiations. Mr. Morros stated the department has been involved in closed mediation negotiations. Mr. Morros said the department has reached an interim agreement on all issues, with the exception of the wetlands issues. He related another meeting was scheduled for early March, 1995. Senator Raggio inquired why the State Climatologist's budget is being transferred to the Natural Resources Administrative budget. Mr. Morros stated it is the department's intent to contract with the University of Nevada, Reno (UNR), for climatology services. Senator Raggio noted the fiscal staff indicates the transfer might cause a problem because of indirect cost allocations imposed by the UNR. Mr. Morros stated the department has already looked into the matter. Senator Rhoads asked if members of the Western States Water Council "feel as strongly as Nevada does about water rights." Mr. Morros explained a number of western states' water laws differ from Nevada's, but overall the western states are united in their effort to keep the federal government from interfering with western water laws. Senator Rhoads questioned if Mr. Morros had seen the final draft of the Rangeland Reform of 1994 regulations. Mr. Morros indicated he had seen portions of the document, but the department is not satisfied with the language relating to water right's issues. Ms. Giunchigliani requested the department to monitor the transfer of the state climatologist, so the position "doesn't evaporate." Senator Jacobsen questioned how the members of the Advisory Board on Natural Resources are chosen. Mr. Morros stated the members are appointed by the Governor. A number of boards were eliminated when the Natural Resources Board was created. Initially, a member from each of the defunct boards was placed on the Natural Resources Board. Environmental Protection Administration - Page 1883 Lewis H. Dodgion, Administrator, Division of Environmental Protection, State Department of Conservation and Natural Resources, stated the division consists of seven bureaus and an administrative unit. The seven bureaus include: Bureau of Air Quality, Bureau of Mining, Regulation, and Reclamation, Bureau of Water Pollution Control, Bureau of Water Quality Planning, Bureau of Corrective Actions, Bureau of Federal Facilities, and Bureau of Waste Management. The division has offices located in Carson City and Las Vegas. Mr. Dodgion explained the administrative budget encompasses the administrator, legal services, accounting, personnel, grants management, staff support for the environmental commission, small business assistance, and clerical support. The administrative unit provides direction, policy, and service to each of the bureaus. The budget is funded by an indirect cost assessment which is applied to the direct salaries budgeted to the division's programs. The budget receives no appropriations from the General Fund. Mr. Dodgion related the division negotiates with the United States Department of Interior, Office of the Inspector General for indirect cost rates which are applied to federal grants. In decision unit M200, the division is requesting an Accounting Clerk II position due to increased work load growth. Senator Raggio asked what is the status of the Ombudsman position and if the position had been transferred. Mr. Dodgion stated the Ombudsman position and a technical assistant position are required under the Clean Air Act Amendments (CAAA) of 1990 to provide assistance to small businesses associated with air quality issues. The Ombudsman position has been transferred to the administrative budget and will be funded by indirect costs. The Ombudsman will provide services to all programs in the division, instead of servicing only the Air Quality program. Mr. Dodgion maintained it is more efficient to place the Ombudsman and technical assistant position in the administrative budget rather than in an individual program. Mr. Spitler stated he would like Mr. Dodgion to provide the joint subcommittee with a more detailed explanation regarding the Ombudsman's duties. Ms. Giunchigliani asked if the Ombudsman would still provide services to small businesses. Mr. Dodgion noted the Ombudsman post is a requirement of the CAAA and services of the Ombudsman must follow the guidelines set out by the federal government. Ms. Giunchigliani questioned, "Since IFC (Interim Finance Committee), we said no to the federal government requiring additional admission standards, what effect does that have on this post?" Mr. Dodgion answered admission standards are handled by the Department of Motor Vehicles and Public Safety and the Ombudsman position is unrelated to the admissions control program. Ms. Tiffany asked Mr. Dodgion to provide information to the joint subcommittee regarding the impact the CAAA has on small businesses in Clark County versus Washoe County. Mr. Dodgion noted Clark County and Washoe County operate their own air pollution control programs. Both counties are required by the act to have an Ombudsman and a technical assistant. Senator Rhoads stated he was in Washington, D.C, recently and the "overall thought on environmental issues and Western issues was there is going to be...a lessening of funding for a lot of these programs....What is going to happen if that does take place....Does the state have to pick it up?" Mr. Dodgion said if the federal grants are cut and the mandates stay in place, the Legislature and the Governor will have to decide how the programs would be funded. Mr. Dodgion noted the Environmental Protection Agency (EPA) has threatened to take highway funds away from states in noncompliance with the CAAA. States have challenged the EPA on emission standards' regulations and the agency has conceded on every occasion. Senator Rhoads asked, "With your contacts, do you see that threat coming?" Mr. Morros said: There is one thing we have to be very careful of, not putting the State of Nevada in the position where we would be made the example....Politically it would be easier to make the State of Nevada an example than it would California or New York....We have tried to jockey ourselves into position where they are confronted with states like California, before they have to deal with Nevada.... Air Quality - Page 1889 Mr. Dodgion testified the Bureau of Air Quality operates programs for the control of air quality throughout the state in accordance with state statutes. The bureau operates air quality programs consisting of permitting, monitoring, inspection, enforcement, and planning in all the counties except Washoe County and Clark County. Washoe County and Clark County are responsible for their own air quality programs within their boundaries, except in the areas of auto emission and power plant regulation. Mr. Dodgion noted the EPA has rescinded its demand for an enhanced inspection and maintenance (I/M) auto emissions testing program. The EPA issued a letter in January 1995, indicating it would provide the states with additional flexibility and a second performance standard for the enhanced I/M programs would be developed. If states demonstrate they can achieve the lower performance standard, then the EPA would accept the lower standards. Clark County will be able to use the lower performance standard and still be in compliance with the EPA. Mr. Dodgion related the air quality for carbon monoxide in Clark County has improved greatly over the last 3 years. He indicated Clark County should be able to maintain a basic I/M program with the addition of enhanced mechanic training, increased enforcement, and remote roadside sensing. The EPA will have the new regulations developed by March of 1995. Senator Raggio asked if there are any other areas in the state which have not met EPA attainment standards. Mr. Dodgion related Washoe County is classified as non- attainment for carbon monoxide, ozone, and particulate matter. Washoe County has demonstrated the ability for attainment on ozone and an application for redesignation of attainment status has been filed. Particulate matter attainment for Washoe County and Clark is difficult to obtain because of the state's desert environment. Senator Raggio questioned if nine new positions would still be necessary if the EPA relaxes the air quality standards. Mr. Dodgion explained the proposed lower standards would affect the I/M program and not the air quality program. The nine new positions are needed to implement air quality federal mandates. Mr. Dodgion stated the division is requesting five new positions in budget category M590 for Fiscal Year (FY) 1996 and four additional positions in FY 1997 to meet the CAAA mandates. The division has performed a detailed staffing analysis for the budget and determined nine and one-half positions are needed to meet federal mandates. The majority of the positions would be used for permitting. Permitting requirements apply to larger industries which emit more than 100 tons of a standard pollutant or 10 tons or more of a toxic pollutant. Currently, there are 50 large sources of pollutants outside of Washoe County and Clark County. Senator Raggio asked if the positions are funded under the federal program. Mr. Dodgion explained the positions are funded by federal grants. The CAAA requires states to charge sufficient fees in order to implement the program. Mr. Dodgion stated the division receives a fund transfer from the Department of Motor Vehicles & Public Safety's Pollution Control Fund which is the I/M fund. Additional funds are received from fees charged to the regulated community. The fees are deposited into the Air Quality Management Fund and then transferred into the budget. Senator Raggio asked if the fee increase was needed to fund the new positions. Mr. Dodgion related a fee increase went into effect July 1, 1994. Increases are also scheduled to take effect July 1, 1995 and July 1, 1996. He maintained, if the 1995 and 1996 increases are not needed, then the division would ask the State Environmental Commission to rescind the increases. Senator Raggio requested committee notification regarding the State Environmental Commission's action on the matter. Ms. Giunchigliani questioned if the standards are relaxed, did the state have the flexibility to decrease the fees and phase out positions. Mr. Dodgion replied in the affirmative. He noted the division met with the regulated community and an agreement was made indicating the fees would be adjusted according to the needs of the program. Ms. Giunchigliani asked if the lower standards proposed by the EPA indicates a lack of commitment to the environment. Mr. Dodgion said he understands the changes are being made to allow the states more flexibility in meeting performance levels. Senator Rhoads inquired whether the division would have submitted an air quality program to the Legislature if it had not been mandated by the federal government. Mr. Dodgion asserted the division would not have submitted a program similar to CAAA. The division has been administering an air quality permitting program since 1970, which has been very successful. Mr. Price inquired how the program affects small businesses. Mr. Dodgion explained the main focus of the Title V permitting program is on large industries. Mrs. Chowning asked Mr. Dodgion to provide the joint subcommittee with information regarding mechanic training, location of training, and the funding source for training. Mr. Dodgion pointed out the program would be run by the DMV&PS. Senator Coffin inquired as to where most of the funds for air quality are spent. Mr. Dodgion indicated the funds are used to operate statewide air quality programs, except the programs operated by Clark County and Washoe County. Senator Coffin asked if any funds are being transferred from the budget to help support Clark County's and Washoe County's programs. Mr. Dodgion explained the Air Quality budget is not transferring any funds because the two counties receive their funding directly from the federal government. In addition, the two counties receive funds from the DMV&PS Pollution Control Fund. Water and Mining - Page 1905 Mr. Dodgion testified the Water and Mining budget contains three bureaus: Bureau of Mining Regulation and Reclamation, the Bureau of Water Pollution Control, and the Bureau of Water Quality Planning. The bureaus operate programs statewide for the protection of water quality. The Bureau of Mining Regulation and Reclamation operates programs protecting the state's water resources from the impacts of mining and ensures proper reclamation of mined lands. The programs, within the bureau of mines, were developed with the cooperation of the mining industry and are totally funded by fees charged to the industry. Mr. Dodgion noted the regulation program is a model to the federal EPA and other western states. Performance standards developed by the division and Nevada's mining industry are practiced throughout the world. Mr. Dodgion explained the Bureau of Water Pollution Control programs include: construction grants for sewer treatment facilities; administration of a State Revolving Loan Program, and providing low-interest loans to municipalities to assist in financing of wastewater treatment plants. Senator Raggio asked who receives the low-interest loans. Mr. Dodgion related loans have been given to the City of Henderson, Incline Village, Elko, Carson City, Fernley, Yerington, Mesquite, and Jackpot. He noted the loans are for sewage collection and treatment. Continuing on, Mr. Dodgion stated the water pollution program also provides the following services: issues permits for wastewater and storm water; reviews subdivision plans; operates a training and assistance program for rural treatment plants; treatment plant operator certification; underground injection program; and the inspection and enforcement program. Mr. Dodgion stated the Bureau of Water Quality Program duties include: development of water quality standards for surface water; water quality monitoring of surface water; directs water quality planning studies; develops groundwater protection plans, such as the Wellhead Protection Plan; certifies laboratories; and certifies dredge and fill permits issued by the Army Corps of Engineers. The Water Quality Program anticipates continued funding from the EPA for grant funds passed through to communities and industries for non-point source projects. Mr. Dodgion noted the Bureau of Water Pollution Control and the Bureau of Water Quality are funded by a General Fund appropriation of $327,322. Senator Raggio questioned why the two programs utilize General Fund appropriations. Mr. Dodgion noted General Funds were eliminated from all other budgets administered by the division, but it is necessary to keep General Funds in the two programs. Senator Raggio asked if the water pollution program and the water quality program are mandated by the federal government. Mr. Dodgion said the two programs are required under the federal Clean Water Act. He noted the programs are funded by grants, General Fund appropriations, and fees from permits and plan inspection reviews. The chairman asked if the mining industry is paying for the cost of mine inspections. Mr. Dodgion asserted the mine inspection program and the reclamation program is 100 percent funded by fees charged to the industr y. Mr. Hettrick, referring to page 1907 of the budget, noted the Governor Recommends column indicates Operating Expenses of $717,000 for 1.75 positions. He asked if the figure includes grant funding. Mr. Dodgion said $680,000 represents federal grant funds from the Clean Water Act for the continuation of erosion control projects and wetlands restoration projects. Mr. Hetterick asserted grant funds should be placed in a separate category. Senator Rhoads noted mining companies have related to him mining exploration is at an all time low, but a recent press release indicated gold production has reached an all time high in Nevada. The senator asked if the division had statistics on the subject. Mr. Dodgion stated the division does not break out these types of statistics, but he would get them for the committee. Mr. Close asked if the request for new safety clothing in the category of E175 is replacement of old clothing. Mr. Dodgion said the request is for new equipment, because the program has been operating in violation of Occupational Safety and Health Administration requirements. He explained the equipment is needed primarily for sewer treatment plant inspectors, due to the toxic environment the inspectors encounter. Mr. Close requested Mr. Dodgion to provide the joint subcommittee with a report on "what the $700,000 is spent on as it relates to the non-point water projects." State Environmental Commission - Page 1999 Mr. Dodgion testified the State Environmental Commission is an 11 member body consisting of five members appointed by the Governor, administrators from the Division of Wildlife, Agriculture, Minerals, Forestry, Water Resources, and a representative from the State Board of Health. One of the five members appointed by the Governor must be a licensed general building contractor and another must have expertise in performing mining reclamation. The commission adopts rules, regulations, and plans necessary to implement the environmental programs required by state and federal law. In addition, the commission acts as an appellant board for actions dealing with permit decisions and enforcement actions. The full commission meets 4-6 times per year to adopt regulations and meets another 4-6 times per year in three member panels for appeal hearings. Staffing for the commission is provided by the Division of Environmental Protection. The commission's activities are funded by General Fund transfers from the DMV&PS Pollution Control fund, Hazardous Waste Management fund, and the Petroleum fund. Commission members, who are not state employees, receive $80 per day for each day spent on commission business, plus travel expenses. Mr. Dodgion stated budget category E590 recommends establishing, pursuant to federal regulations, a Compliance Advisory Panel. The purpose of the panel would be to oversee and evaluate the effectiveness of the small business compliance assistance program, which is required by the CAAA. Senator Raggio questioned if the Compliance Advisory Panel would be separate from the State Environmental Commission. Mr. Dodgion answered the panel would be separate and operate only as an advisory panel. Senator Raggio asked why the State Environmental Commission could not perform the functions of the advisory panel. Mr. Dodgion said the commission could perform the same functions, but CAAA mandates that the panel be structured in a particular way. The panel would be composed of seven members, two members would be appointed by the Governor from the general public, four members representing small business would be appointed by the Legislature, and one member from the air pollution program. The panel's structure would be entirely different than the State Environmental Commission's. Panel requirements are dictated by the CAAA and referenced in Chapter 654, Nevada Revised Statutes. Mr. Dodgion explained the environmental division would be asking the Governor to implement the panel through an executive order. Senator Raggio asked how active the commission had been in the last year. Mr. Dodgion said the commission meets 4-6 times on an as-needed basis. The appeal panels hear 1-6 cases per year. Ms. Giunchigliani questioned if the commission would be able to handle the oversight duties of the small business compliance program. William A. Molini, Vice Chairman, State Environmental Commission, stated he does not know the requirements of the CAAA. Ms. Giunchigliani asked the commission to discuss the matter with Mr. Dodgion and inform the joint subcommittee about their findings. Mr. Dodgion interjected the subject would be addressed by the commission on February 16, 1995, at its monthly meeting. Senator Rhoads noted the commission had adopted 24 rules and regulations in 1994. He questioned what the difference is between a rule, regulation, or legislation. Mr. Dodgion said legislation "sets the bounds" and regulations cannot exceed the bounds of the legislative authority. All rules and regulations adopted by the commission are reviewed and can be challenged for exceeding legislative authority. Challenges to rule or regulation changes can be made by anyone. Division of Conservation Districts - Page 1913 Pamela Wilcox, Administrator and State Land Registrar, Division of State Lands, State Department of Conservation and Natural Resources, testified the Division of Conservation Districts and the State Conservation Commission regulate the activities of the state's 28 Conservation Districts. Conservation Districts are locally elected special purpose units of government which work for the conservation and proper development of the state's renewable natural resources. The Conservation Districts provide services to private landowners on plans for soil conservation, water conservation, protection of water facilities, and watershed protection. Ms. Wilcox stated the budget requests a reclassification of a Management Assistant I to a Management Assistant II. Adjustments have also been made in salaries for board and commission members, longevity payments to professional employees, and rent. Mr. Spitler asked who attends the National Association of Conservation Districts meetings. Ms. Wilcox answered one professional employee is sent to the meetings. Mr. Dini queried, "Weren't the Conservation Districts going to be put into the scheme of the wetlands protection?" Ms. Wilcox responded Conservation Districts have always been involved in some form with wetlands protection. The changes in the Clean Water Act increased the Conservation District's jurisdiction over agricultural wetland protection. In addition, the districts have become more involved in water quality projects. Ms. Giunchigliani asked if the Conservation Districts confer with each other on issues and if there is any duplication of efforts among the districts. Ms. Wilcox assured Ms. Giunchigliani the agency's departments work closely together. She would address the subject in more detail with the joint subcommittee. Senator Jacobsen questioned what type of assistance the division provides to local Conservation Districts. Ms. Wilcox noted regulations are set up and a technical handout is provided to districts detailing statutory requirements and grants. In addition, the division administers a training program for districts. State Lands - Page 1919 Ms. Wilcox testified the Division of State Lands consists of two programs: the State Land Office Program and the State Land Use Planning Assistance Program. The State Land Office Program holds title and disposes of all state lands, except lands held by the University System, Department of Transportation, and the Nevada State Legislature. The State Land Use Planning Assistance Program provides technical land use planning assistance primarily to rural counties. Additionally, the land use program works on federal land use issues for the state. Ms. Wilcox stated two new positions are being requested to handle the existing backlog of transactions. A Land Agent I position is requested for October 1, 1995, and an Engineering Technician III position is requested for Fiscal Year 1996-1997. Budget category E450, funds the Carey Act Trust Fund program and the Tahoe Mitigation Program. The Carey Act Trust Fund will be depleted by the end of 1995, and no new funds are projected. The division is requesting transfer of the Carey Act Trust Fund program into the State Lands' budget. In addition, budget category E450 indicates an agency transfer of $4,260 for the support of the Tahoe Mitigation Program, which was established by the 1993 Legislature. Ms. Giunchigliani questioned what budget includes the Governor's request for expansion of the Indian Springs Conservation Camp. Mr. Morros responded the request would be addressed in the Division of Forestry and Department of Prison's budgets. Senator Jacobsen noted the 1993 Legislature passed legislation allowing the division to collect fees for applications and permits. The senator asked how Nevada citizens have responded to the fee charges. Ms. Wilcox answered the program is on-line and has received very few complaints regarding the fee schedule. The division assured the Tahoe Regional Planning Agency that fees would be monitored and adjustments would be made accordingly. She noted a bill draft request has been submitted to make the fee adjustments "more fair." Senator Rhoads commented a memo was "leaked" from Bruce Babbit's office, Secretary, United States Department of Interior, stating 30 million acres of federal land would be sold or transferred to state control. The senator asked if the Division of State Lands has sufficient personnel to handle the project or if Senate Bill (S.B.) 40 of the Sixty-second Session addressed the issue. SENATE BILL 40 OF THE SIXTY-SECOND SESSION: Relates to local and state planning of the use of federal lands in Nevada. Ms. Wilcox explained S.B. 40 of the Sixty-second Session was adopted in 1983 for the purpose of providing policy plans for federal lands. The division has made an effort with the counties to identify lands which should be released from federal ownership. Federal ownership lists are now outdated and additional funding for federal land issues has not been provided by the Legislature. Senator Rhoads requested Ms. Wilcox to provide a breakdown of costs for personnel to handle the federal land selection process. Senator Jacobsen asked if the State Lands Division has the authority to sell state land. Ms. Wilcox said the division does have authority to dispose of lands that are in excess to the state's needs. State land sales need the approval of the Board of Examiners and the Interim Finance Committee and must be sold at competitive market prices. She related the division will provide the committee with an appraisal list of most state land values. Forestry - Page 1927 Roy W. Trenoweth, State Forester Firewarden, Division of Forestry, State Department of Conservation and Natural Resources, testified the Forestry Division manages and coordinates all forestry, nursery, endangered plant species, and watershed resource activities on certain public and private lands. Mr. Trenoweth said the adjusted base budget funds 36 professional and classified positions. Budget Category M200 provides funds for the division to buy and screen excess property for rural fire protection programs. The division is requesting a one-shot appropriation of $95,000 for the removal of underground fuel tanks. Mr. Trenoweth pointed out budget category E450 recommends the addition of the following three positions: Budget Analyst III, Accounting Technical III, and a Management Assistant I. He stated, because of budget cutbacks and staff retirement, the division needs clerical and accounting assistance. The additional personnel would help the division implement internal controls. Senator Raggio asked who would be supervising the new employees. Mr. Morros replied the positions would be supervised by the Administrative Services Officer in the Director's Office of the Department of Conservation and Natural Resources. He stated the problems the division has experienced were caused, in some part, by the large fire season the state encountered last summer. Mr. Morros said so many personnel were out fighting fires last fire season, the "janitors were answering the phone for the Forestry Division." He related the accounting work load for the fire season was "horrendous" and could not be addressed until the fire season had ended. Because of significant delays in processing payments to volunteers and vendors, some rural vendors have stopped providing services to the Division of Forestry. Legislation has been proposed to allow the division to borrow money from the General Fund, so bills can be paid in a more timely manner. Senator Raggio asked why the positions are not in the Director's budget. Mr. Morros stated the positions could be placed in any budget, "just as long as we get them." Mr. Marvel inquired how current the division is on collection from the federal government for fire suppression. Mr. Trenoweth responded the federal government has an outstanding debt of $2 million for fire suppression costs. Mr. Marvel asked when the division would be completely reimbursed for its fire fighting efforts. Mr. Trenoweth said all billings have been mailed and payment should be received within 60 days. Senator Raggio questioned why it took so long for the division to be reimbursed. Mr. Trenoweth explained the division signed an agreement with the federal government in 1993, whereby, each agency would bill the federal government within 60 days of service , then the federal government would reimburse the division within 60 days. Due to last year's large fire season, the federal government has not been able to reimburse the providers within the 60 day limit. Senator Raggio asked what percentage of fire suppression costs are picked up by the federal government. Mr. Trenoweth replied 80 percent of the costs are recoverable. Mr. Marvel inquired if the Division of Forestry had considered asking the Legislature for a supplemental loan. Because the bulk of the billings were mailed in November 1994, the division had expected to be reimbursed by January 1995, commented Mr.Trenoweth. The division's remaining accounts payables total approximately $300,000. Mr. Trenoweth noted one or two small vendors may not have been paid, because statements have not been received from the vendors. Mr. Marvel asked what percent of the division's billings were sent to the federal government before November 1994. Mr. Trenoweth answered "At least 90 percent went out by November." Mr. Close questioned how soon after a fire occurs is the federal government billed. Mr. Morros commented billing delays have occurred because of personnel shortages. Once fire season begins, fire fighters no longer have the time to process the billings. Mr. Close asked, "As part of these new additions to your staff, would that include a strategic plan to bill them more timely?" Mr. Morros responded in the affirmative and noted considerable effort has gone into developing internal controls. Mr. Close said he would like to see the plan once it is developed. Mr. Morros said a bill has been proposed to allow the Division of Forestry to hire the new positions by April 1, 1995, in order to allow training time before the fire season begins in May. Mr. Marvel noted the Division of Forestry's budget is overspent by $30,000. Mr. Morros stated: That is correct. We were in the last fiscal year and as you recall we came to interim finance for a transfusion in the amount of about $30,000. The reason we came to interim finance was because that money had already been spent, unfortunately, so there wasn't much else we could do. We have a shortfall of $30,000 again in this fiscal year, but we are just going to have to suck it up. I am not going to come to interim finance with another request for an infusion. Mr. Marvel asked if the division was developing internal controls. Mr. Morros stated internal controls are already developed and implemented. Mr. Spitler stated the joint subcommittee would be looking very seriously at the management of the Forestry Division. He stated the division should be prepared to provide the joint subcommittee with dates regarding when the fire season ended and when billings were submitted to the federal government. Mr. Spitler proclaimed it was inexcusable not to have a functioning accounting system, during the fire season. Mr. Hettrick interjected the joint subcommittee would also be addressing helicopter repairs and upgrades. Senator Raggio stated the joint subcommittee would need the division's full cooperation in supplying the committee with prompt and complete information. Forestry Intergovernmental Agreements - Page 1935 Mr. Trenoweth stated the Forestry Intergovernmental Agreements program provides initial response to fires or other emergencies which threaten human life on certain Humboldt and Toiyabe National Forest lands, the Sierra Forest Fire Protection District, Clark, Elko, Eureka, Storey, and White Pine counties. The budget continues funding for 44 professional and classified positions. Budget category E450 provides a breakdown of all county costs in the intergovernmental account. Mr. Trenoweth explained, prior to 1995, a small portion of each county's fire protection funds remained within the county, with the exception of Clark County, which has always paid the division 100 percent of its funds. After reviewing the budget with the state auditor, it was recommended that all funds be placed in the intergovernmental budget. Senator Raggio asked the fiscal staff if the proposed change is acceptable budgetary practice. Jeanne L. Botts, Program Analyst, Fiscal Division, Legislative Council Bureau, noted: As far as bringing all the county money in, yes it is a change. You may also be referring to last session there was a letter of intent sent to the agency that the monies from each particular county be kept separate to the extent you could account for expenditures incurred for the staff assigned to those county monies. The division was apparently pooling all of the money from the various counties and some counties were paying a disproportionate share, so a letter of intent last session required that they properly track expenditures to the counties. Senator Raggio questioned what the division is doing to see that county funds are not being disproportionately utilized. Mr. Trenoweth said everything in the budget has been "split out by percentage of full-time employees." Forest Fire Suppression - Page 1939 Mr. Trenoweth testified the program provides funding to cover expenses necessary for fire protection and forest and watershed management which are caused by fire or other emergencies. Senator Raggio asked if the division had prepared a complete accounting of fire suppression costs. Mr. Trenoweth replied in the negative, but indicated he would provide the committee with the information. Senator Rhoads asked who has jurisdiction over range fires. Mr. Trenoweth responded jurisdiction generally rests with the first response team unless the fire is on Bureau of Land Management land or forest service land. Forestry Honor Camps - Page 1943 Mr. Trenoweth stated the purpose of the program is to coordinate and supervise the outside work related to forestry and conservation performed by inmates from the Department of Prisons who reside in Forestry Conservation Camps. The program has 10 honor camps statewide. Senator Raggio asked the division to provide more specific information in the future on the types of projects the program has completed. Mr. Trenoweth commented budget category E425 recommends closure of the Jean Conservation Camp to be used by the prison as a DUI (Driving Under the Influence) center effective January 1996. Budget category M200 recommends a reduction in staff of 36 positions at various camps. Senator Raggio questioned why there is such a large reduction in staffing when the conservation camps are at capacity. Mr. Trenoweth explained the camps are full, but the number of inmates available to the Division of Forestry have decreased. Senator Raggio requested members from the Department of Prisons to come forward and provide the committee with information regarding decreases in the number of inmates available to the Division of Forestry. The senator stated the committee is concerned because the number of healthy and capable inmates available to the Division of Forestry has diminished. The chairman asked what could be done to ensure the inmates at the honor camps are willing and able to perform fire fighting duties. Robin Bates, Chief, Classification and Planning, Department of Prisons (DOP), testified the inmates placed in honor camps are generally unfit for conservation work. The inmates are unfit because of medical conditions, high turnover rates, and recalcitrancy. Inmates cannot refuse to work, but their conduct may not be proper for conservation work. Mr. Bates explained: In a 150 bed conservation camp, 25 inmates will be assigned to support services, within the camp, and another 25-40 inmates who are sick, lame, lazy, and recalcitrant. The remainder are fit and ready for NDF [Nevada Department of Forestry] assignments. That level is the result of those three phenomena. Senator Raggio questioned why the number of unfit inmates has increased. Mr. Bates noted there is an increase in unfit inmates in the camps, because of the resource allocation issue. Previously, unfit inmates would be assigned to minimum custody in an institution, but because of the need for more beds, the inmates are placed in honor camps. Mr. Bates also noted the DOPs' ability to diagnose and treat inmates has increased over the last 5 years. In addition, he said laws have been enacted shortening an inmates length of stay. Senator Raggio inquired if the DOP is out of beds. Mr. Bates responded the department has 35 beds available as of today. Mr. Bates explained there is no shortage of inmates to send to the honor camps. Senator Raggio commented the prison system has 7,000 inmates and asked why the DOP could not find enough inmates to work on fire crews. Mr. Bates said the prison system could do a better job, but based upon today's laws and policies it is difficult to make all the needed changes. Senator Raggio inquired if the laws need to be changed. Mr. Bates explained if the honor camp criteria is reduced, then more serious offenders would be placed in the camps. Senator Raggio asked the DOP to recommend a change in policy or law which ensures inmates sent to honor camps are willing and able to perform fire fighting crew duties. Mr. Bates indicated the DOP can achieve a small percentage of improvement with inmate participation, but a change in minimum custody criteria is needed for a larger impact. Senator Raggio commented: I would like to see some recommendation which preserves the safety of the community, but ensures more people are available in the honor camps, so we don't have to cut back on this effort and we will have the number of crews we historically have had. It is an important function and it ought to be important to the inmates. Mr. Hettrick questioned if DUI offenders can be placed immediately into honor camps. Mr. Bates explained DUI offenders are exempt from the "proximity to release" criteria. DUI offenders are placed immediately in honor camps. Senator Raggio requested the DOP to meet with Mr. Trenoweth and report back to the committee in 2 weeks with recommendations on how the shortage of inmate conservation crews can be solved. Mr. Dini commented, in the past, honor camp eligibility required an inmate to have 9- 14 months remaining on their sentence. He noted, "Apparently, anybody can go out there that meets the criteria, whether he has 3-5 months to go, which is a waste of effort because by the time you get the inmate trained they are ready to leave." Mr. Bates said changes made in the criminal code with regard to sentence credits and parole laws, allows the nonviolent criminal to be paroled at an earlier date. Honor camp eligibility requires an inmate to be within 18 months of a reasonable expectation of parole or discharge. He suggested the eligibility policy could be modified to 24 months, but the number of "walk aways" might increase. Mr. Dini questioned if the DOP has statistics regarding the recidivism rate of honor camp inmates. Mr. Bates replied statistics are not available, but he would try to isolate the honor camp figures. Senator Jacobsen stated honor camp crews are an invaluable resource for the State of Nevada. He has toured all the honor camps in Nevada and on occasion has even worked side-by-side with the inmates. The senator stressed the prison system and the forestry division need to cooperate with each in order for the camps to be successful. He stated the prison system views the honor camps as a "bed situation." The forestry division has been reimbursed $332,000 for services performed by honor camp crews. He exclaimed the camps must be enhanced, not dismantled Mr. Spitler requested Mr. Bates to do a presentation for the joint subcommittee regarding honor camp inmate population and criteria utilized by other states in determining honor camp eligibility. Ms. Giunchigliani questioned: Is the issue here, for us to find people to place in an honor camp to do county and city work in the rural counties, or is it to truly train some people that are lighter offenders while we are trying to move them out of the prison system.... Ms. Giunchigliani stated she would like a breakdown indicating the value of reimbursed projects versus actual reimbursed funds. In addition, a breakdown identifying the projects performed by the honor crews was requested. Mr. Bates said the DOP has proposed implementing an honor camp for inmates who are unfit for Division of Forestry duty. If the proposed honor camp goes forward, then unfit inmates would not have to be placed in forestry division camps. The DOP supports the honor camp system and has budgeted for long-term improvements to a number of the camps. Senator Raggio asked what changes are being proposed for the Indian Springs Conservation Camp. Mr. Trenoweth explained three additional crew supervisor positions have been requested for the expansion of the Indian Springs program. Mike Nolan, Budget Analyst, Budget Division, Department of Administration, interjected the Jean Conservation Camp will be closed and used as a DUI center. Three crew supervisors will be transferred, effective January 1997, to the Indian Springs Conservation Camp (ISCC) to oversee the creation of three new crews totaling 36 inmates. Mr. Nolan stated an equipment request for three new trucks and mobile radios has been made for the ISCC's expansion. Senator Raggio questioned what would happen to the equipment available to the 36 positions being eliminated. Mr. Trenoweth explained unusable equipment would be "excessed" and the remaining equipment would be placed in other honor camps. Senator Rawson inquired if the DUI center at Jean would be supplying crews for veteran's cemetery maintenance. Mr. Trenoweth said the Jean camp would no longer provide the forestry division with crews. He said the division will continue to provide maintenance for the veteran's cemeteries in Boulder City and Fernley, Nevada. Water Resources - Page 1955 R. Michael Turnipseed, State Engineer, Division of Water Resources, State Department of Conservation and Natural Resources, testified the division is charged with managing the state's water resources, with the exception of the Colorado River. Funding for the division is provided by a General Fund appropriation and all fees are deposited into the General Fund. He noted the base budget has a built-in inflation factor for rent and longevity. Budget category E450 requests additional Out-of-State Travel funds for Virgin River negotiations with Utah and Arizona. Additionally, category E450 requests funding to increase file room and conference room square footage. Funding has also been requested for water records microfilming. The division has over 10,000 applications and 10,000 maps which need to be microfilmed. Senator Raggio commented the main issue with the division's budget is the significant backlog of 4200 water right applications. The senator noted 1400 of the 4200 applications waiting for action have been protested. He observed the division has requested seven new positions to handle the increased work load and backlog of applications. He asked why the Governor did not recommend any new positions for the division. Mr. Morros explained, after considering all the requests for new personnel, he decided other programs within the State Department of Conservation and Natural Resources needs more attention than the Division of Water Resources. He pointed out an interim study committee is studying water right enforcement and water resource administration and he determined the interim study committee is in a better position to address the needs of the water division. Mr. Morros stated the work load increase has occurred more in the area of protests, than in the filing of new applications. At any given time, the division has 40-50 active cases in litigation. Senator Raggio asked how long it takes to process an unprotested water application. Mr. Turnipseed said the process takes from 3-6 months. Protested applications requires investigation, fact gathering, a hearing, and a written decision. Senator Raggio inquired how many new staff positions would be needed to reduce the water application backlog. Mr. Turnipseed answered that a hearing officer is the division's top priority. Mr. Marvel commented the Division of Water Resources' budget was heavily impacted in 1993 by budget cuts. He stressed the water resource area is one of the most critical problems for the State of Nevada. Wildlife - Page 1961 William A. Molini, Administrator, Division of Wildlife, State Department of Conservation and Natural Resources, testified the mission of the division is to protect, preserve, enhance and manage state wildlife resources. In addition, the division titles and registers boats. The division registered over 49,000 boats in 1994. He said wildlife population is monitored on an annual basis to determine population levels, so seasons and "bag limits" can be set. The division operates three hatcheries and stocks approximately 2.5 million fish per year. Nevada's 27 game wardens have the largest patrol areas in the United States, with the exception of Alaska. Ninety-three percent of the budget is funded by user fees. The remaining 7 percent of the budget is funded by the General Fund, mining assessment fees, and a tourism transfer. Mr. Marvel asked what the mining assessment fee represents. Mr. Molini said the fee is assessed and collected annually. The fee is based on the tonnage of material processed through the mining operation. The division collects approximately $500,000 a year from assessment fees. Mr. Marvel inquired if the assessment fee is earmarked for particular areas within the division. Mr. Molini responded the fee was initially to be used to hire a biologist and a game warden for each of the three mining regions, in order to help with mitigating impacts of mining activity and to help with the permitting process. The biologists' positions have been filled, but the division has never been given authority to add the game warden positions. Mr. Marvel asked if the division provides an environmentalist to handle wetlands issues at the Sleeper Mine. Mr. Molini replied the division has not furnished the mine with an environmentalist, but the division has worked on engineering and surveying of the wetlands. Mr. Marvel stated it is his understanding, the division is required to provide the Sleeper Mine with an environmentalist for their wetlands project. Mr. Molini stated it is his understanding, the division is responsible for furnishing the Sleeper Mine with an environmentalist position. Mr. Allard questioned why the number of big game animals harvested has declined. Mr. Molini related the reduction of deer and elk herds has primarily been caused by the drought and the severe winter experienced in 1993. Mr. Allard asserted, "It has been indicated to me that a lot of this is due to the management that your office is performing on predators." Mr. Molini explained the focus of deer herd reduction has been on mountain lions. Deer are the primary prey base for mountain lions. Deer herds peaked in 1989 and have steadily declined in recent years. He explained there is a "lag time" before predator populations decline. Mr. Molini said he fully expects to see a decline in mountain lion populations, since deer herd populations are down. Surrounding states have also experienced a reduction in their deer herds. He noted the division conducts a yearly mountain lion sport harvest. Senator Raggio turned the gavel over to Senator Rawson. Senator Rawson noted the joint subcommittee would be questioning the division regarding the Wildhorse Program, fee increases, and the Governor's anti-crime legislation. Mr. Molini related fees have declined because of the drought situation and if fees are not increased a shortfall in revenue is projected. The division sought guidance from the Wildlife Commission and it was suggested that a team of division employees review licensing procedures and fee structures. Proposals made by the team would raise approximately $750,000 a year. The proposals and fees are built into the budget. Mr. Molini noted a cost-of-living salary increase has not been factored into the division's budget. The budget has a $400,000 deficit, when the cost-of-living increases are included. After the division met with the Wildlife Commission, the commission authorized a further increase in fishing and hunting licenses. The additional increases in licensing fees would allow the division to cover the cost-of- living increase. Mr. Molini stated the Wildhorse Commission was created by the Heil Trust Fund and has only one staff member, Katherine Barcomb. He said Ms. Barcomb is overwhelmed with her duties of overseeing the BLM plans for allotment management and horse removal. Ms. Barcomb's duties have kept her from doing fundraising, which is necessary to keep the Wildhorse Commission fund solvent. Mr. Molini said the Department of Administration was reluctant to place funds in a non-General Fund budget, so the department asked if the funds for the Wildhorse Commission could be placed in the division's budget. He noted biologists from the wildlife division have on occasions helped the Wildhorse Commission with a review of land use plans. Mr. Molini stated: The position of the Division of Wildlife relative to horse populations and horse management would not change and stand alone. The position [in the budget] would represent the horse commission....and generate their positions. It would not influence our [position]....I just want it to be clear that it is a technical support thing, I am not looking at getting it intertwined with our division. Nor am I looking at this division trying to take over the management of wild horses.... Mr. Molini said the Governor has proposed anti-crime legislation which would require minors, under 18 years old, to obtain a permit to carry an unloaded hunting firearm. The wildlife division would provide the permits and collect the fees for the program. The application would designate that the parent is responsible for their child's use of the firearm and a parent would be required to sign the application acknowledging their responsibility. Details on program costs and implementation have not been finalized. Mr. Spitler asked what the $519,000 in budget category E425 represents. Mr. Molini answered $22,920 of the $519,000 pertains to the operating expenditures for the firearms program. The additional funds represent an indirect cost against all the division's revenue sources. Mr. Spitler questioned if fees would have to be raised in other division budgets to cover the indirect cost allocated by the division. Mr. Molini explained the overhead charge would stress some budgets, but the division should be able to handle it. Mr. Allard inquired about who proposed the anti-crime legislation. Mr. Molini responded the anti-crime legislation was proposed by the Governor. Mr. Allard stated he fails to see how the proposed legislation is going to stop kids from using firearms illegally. He asked, "Why would you want to charge a child who wants to go out and target practice or hunt, a permit fee to go out and do something that is wholesome...?" Mr. Molini commented kids involved in outdoor recreational activities are less likely to be involved with firearms in an urban situation. Mr. Allard interjected, "The kids that are going to go out and shoot somebody, they are not going to go out and get a permit." Mr. Molini explained the legislation would prevent a juvenile under the age of 18 from possessing a firearm unless they are accompanied by an adult. The proposed legislation allows 16-18 year olds who have a permit, to go hunting without an adult. One reason for the legislation is to make parents responsible for their child's behavior. Mr. Allard inquired if the parent could sign an application at the same time the juvenile applies for a hunting license, so additional fees would not have to be charged. Mr. Molini stressed the division will be examining how the program should be implemented. Mr. Hettrick observed the projected revenues and expenditures for the program are $22,920. Mr. Molini said the figures were projected by using a $20 permit fee. Fee charges should cover program expenditures. Mr. Nolan interjected the cost and revenue for the program is predicated on the number of individuals between the ages of 16-18 who have hunting permits. The Budget Division and the Division of Wildlife determined it would cost approximately $20 a permit to administer the program. Mr. Hettrick asked if penalties would be assessed if a young adult does not possess a permit. Mr. Molini said he understands the legislation would fine a young adult with a firearm if they do not have a permit or are not with a parent. He said the young adult could possibly be fined or lose their vehicle. Mr. Hettrick exclaimed he has serious problems with the proposed legislation. State Parks - Page 1979 Wayne Perock, Acting Administrator, Division of State Parks, State Department of Conservation and Natural Resources, distributed a report (Exhibit C) providing detailed information regarding the division's equipment inventory and requested park maintenance costs. Mr. Perock testified the division operates 24 state park units and is charged with development and maintenance of parks and recreational areas. The Park Planning and Development program provides master planning, construction, and park renovation. In budget category M200, the division is requesting additional funds for seasonal staff at various state parks. Mr. Perock said three new positions are being requested along with accompanying operating and utility costs to support the positions. The majority of the operating costs pertain to the visitors center at Big Bend Park of the Colorado. Mr. Perock noted Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources, would be presenting a slide show to the committee highlighting the state parks and their existing maintenance problems. Mr. Weaver distributed a handout (Exhibit D) listing the top 25 park improvement projects. The 25 projects were selected from a master priority list of 373 projects. Forty percent of the list consists of major maintenance and renovation projects caused by years of deferred maintenance. The green highlighted park projects shown in Exhibit D represent the projects which can be funded under the Governor's recommended budget. Mr. Weaver noted federal grant funds can be obtained for park projects highlighted in yellow on the list, if the state provides the matching funds. The division expects to exceed 1995 projections of 2,880,000 visitors, due to new facilities and the wet winter experienced in the state. Two-thirds of the state parks' visitors live in Nevada and another 16 percent are from California. Nevada's state parks total over 148,500 acres. Senator Rawson turned the gavel over to Senator Jacobsen at 12:10 a.m. Senator Jacobsen noted the number of arrests and citations in state parks has increased and asked if the park rangers are able to handle the increase. Mr. Perock commented park rangers have been able to address the increases with little problem. He related park rangers are trained as Class I Peace Officers. Senator Jacobsen questioned if the park system could survive without inmate honor crews. Mr. Perock said the reduction of inmate crews has caused the division to delay some park projects. Water Planning - Page 1991 Naomi Duerr, State Water Planner, Division of Water Planning, State Department of Conservation and Natural Resources testified the mission of the division is to provide technical, financial, educational, and economic assistance to state agencies and private citizens concerning the state's water supply. Ms. Duerr stated Nevada is the most arid state in the nation, with the fastest growing population. Water planning and water management have become critical to the development of the state. The division has four staff members and receives funding from the General Fund. The Division of Water Planning has a 13-member Advisory Board on Water Resources Planning and General Development composed of local government representatives and water resource consultants. The division provides water plans focusing on needs and sources, conservation, inter-basin transfers, drought planning, habitat protection, and flood control. In addition, the division administers a $25 million grant program to help small water systems comply with unfunded federal and state mandates. Ms. Duerr explained the Division of Water Planning also manages a $100 million loan program. In the next biennium, Ms. Duerr said the division's focus will be on providing better information to the public and governmental agencies, initiation of two watershed plans, and increasing productivity and quality of work. The division should be able to accomplish these goals without additional staff through computer enhancement, staff training, and additional space. Ms. Duerr indicated budget category M200 provides $60 per day for four meetings per year of the Advisory Board on Water Resource Planning and Development. Board members waived their salaries during the current biennium because of budget shortfalls. Increased travel funds are requested to enable one staff member to travel 2 days per month in order to help local governments develop watershed plans. Additional funds are requested for printing and updating of documents. Ms. Duerr stated Out-of-State Travel funds are requested in category E450 to enable staff members to attend technical training programs and conferences on water planning and water management. Senator Rhoads asked what authority gives the division jurisdiction over statewide water policy development. Ms. Duerr said Chapter 540 of Nevada Revised Statutes states the division may develop regional, state, and local water plans. She noted the first step in developing a water plan is the development of a state water policy. Senator Rhoads interjected the state engineers office has the same authority under Title 48. The senator said the Division of Water Resources and the Division of Water Planning is a duplication of services. Mr. Morros explained the state engineer's responsibility under Title 48 is administration and enforcement of Nevada water law. The primary mission of the water planning commission is a resource planning effort. Mr. Morros said in 1977 the Division of Water Planning was created because legislators felt it was a conflict of interest for the state engineer to make decisions on water appropriations and water planning. Senator Rhoads stated the Division of Water Planning "seems to be detrimental for growth and uses, rather than helpful." The senator noted the advisory board membership does not contain a property owner. Mr. Morros explained advisory board membership is governed by statutory requirements. Senator Rhoads said to his knowledge the division has never contacted ranchers or farmers for their input. Ms. Duerr explained in developing the water policy plan the division decided it is more beneficial to conduct meetings on the plan in the rural counties. Ms. Duerr explained she has met with the Elko County Commissioners, the Nevada Farm Bureau, the Southern Nevada Home Builders' Association, and several conservation groups. In addition, she is scheduled to meet with the Nevada Mining Association next week and she has been in contact with several cattlemen in Northern Nevada. Mr. Morros said the division has just finished developing the basic process on how the water policy will be developed. Workshop efforts have just begun and all interested parties will be included in the process, he reported. Ms. Duerr interjected the basic focus of the water plan is on water supply development, protection, and enhancement. Water Planning Capital Improvements - Page 1997 Ms. Duerr testified the program administers a $25 million grant program to help small water systems comply with federal mandates. The program issued 10 grants in 1994 totaling $6.3 million. The budget requests continued funding for one position and necessary travel and operating costs. Mr. Spitler asked how many projects had been funded and what entities had received funding. Ms. Duerr said 10 projects have been funded and six applications are presently being processed. The program has funded projects for: Manhattan, Virginia City, Austin, Stagecoach, Mina, Luning, and Roundhill. The projects include: redwood tank replacement with steel tanks, line looping, placement of filtration units, refitting springs, and well restoration. Mr. Spitler questioned how long the program is expected to continue. Ms. Duerr estimated funding would allow the program to continue for approximately 5 years. Mr. Spitler inquired about the cost of administrative fees for the program. Ms. Duerr replied administrative fees accounted for 2 percent of the program's costs. Tahoe Regional Planning Agency - Page 2005 James W. Baetge, Executive Director, Tahoe Regional Planning Agency (TRPA), testified the agency was created in 1969 by the states of Nevada and California to control and perform essential functions over the water and other resources of the Lake Tahoe Region. In 1987, the agency began implementing a Regional Plan requiring the agency to evaluate the effectiveness of the program every 5 years. Mr. Baetge explained a portion of the budget includes evaluation costs. Mr. Spitler inquired if California is paying its required two-thirds funding ratio. Mr. Baetge responded California did not pay the required amount last year. Mr. Spitler asked if the payment is in arrears and if California is expected to make up the payment. Mr. Baetge stated he reviewed the payment schedules for the last 15 years for California and Nevada and found the California match was higher than Nevada's portion of the match. Mr. Spitler again questioned if California's portion of the match was outstanding. Mr. Baetge explained the debt does not accrue over time. He said there has been a shortfall in California's match for the last 2 years. California has taken a 10 percent cut in their portion of the match. Mr. Spitler noted the Interim Finance Committee (IFC) authorized a contribution to the agency which was more than required by the pact. Jeanne L. Botts, Program Analyst, explained: The bi-state compact requires the agency to request funds, two-thirds from California and one-third from Nevada. There is no requirement that the two states actually fund on that basis. What happened after the 1993 Legislature appropriated money to TRPA, California was unable to come up with the entire amount. The Director of the Department of Conservation, Mr. Morros, chose not to release the full amount to TRPA that Nevada had appropriated because California had not matched it. For many years there has been a practice of trying to match what the other state is doing and I have spoken with legislative counsel about this a number of times and there is no requirement that we match or California match us. For obvious reason, we can't have one legislature obligating another. There was a decision made in the director's office not to release money that was not matched, based on past practice. TRPA came into the November IFC meeting and asked that the money be released from reserve to be used on their partnership program. The $45,500 from the prior year had already reverted at the end of fiscal 1994, so there was an allocation of a like amount, $45, 500 from the IFC contingency fund to make up for the money that had been reserved in the first year. Authority was granted to transfer the $70,250 this year that would have been reserved for lack of a California match, to move it out of their general support category into a partnership approach program. Senator O'Donnell maintained the motion to release the funds is contingent upon California releasing their funds. He said a time limit is placed on the funding release. Ms. Botts stated she recalled TRPA testifying at the IFC that California would not be forthcoming with the funds. Mr. Baetge interjected, at the time of the request for the $115,000, it was too late in California's budgetary process to make a request for the partnership funding. The IFC request does not hinge upon California making a match during 1994-1995. Senator O'Donnell stated, "I was under a different impression and I would Iike to take a look at those tapes." Mr. Baetge related the partnership funds have been effective in bringing parties together on very difficult policy issues regarding Lake Tahoe. At this time, Lake Tahoe policy issues are moving along very well, commented Mr. Baetge. There being no further business before the committee, Senator Jacobsen adjourned the meeting at 1:15 p.m. RESPECTFULLY SUBMITTED: Pamela Jochim, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Assemblyman John W. Marvel, Chairman DATE: Senate Committee on Finance Assembly Committee on Ways and Means February 9, 1995