MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session April 19, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:10 a.m., on Wednesday, April 19, 1995, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. 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 COMMITTEE MEMBERS ABSENT: Senator Dean A. Rhoads (Excused) Senator Bernice Mathews (Excused) STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Jeanne L. Botts, Program Analyst Sue Parkhurst, Committee Secretary OTHERS PRESENT: Michael Pescetta, Executive Director, Nevada Appellate and Post-conviction Project Ron Lange, Deputy Administrator, Health Division, Department of Human Resources Drennan A. Clark, Major General, The Adjutant General of Nevada, Office of the Military Lorne J. Malkiewich, Director, Legislative Counsel Bureau Keith Rheault, Deputy Superintendent, Instructional, Research and Evaluative Services, State Department of Education Steve Knight, Adult Education Coordinator, Lyon County School District Hank Etchemendy, Executive Director, Nevada Association of School Boards Donald F. McHenry, Area Superintendent, Alternative Schools and Programs, Clark County School District Roselyne Pirodeau, Representative, Mineral County School District Carolyn Ford, Assistant Dean, University of Nevada School of Medicine Bobbie Gang, Lobbyist, Nevada Women's Lobby and the National Association of Social Workers, Nevada Chapter Douglas E. Walther, Senior Deputy Attorney General, Commerce Section, Office of the Attorney General Gary Crews, Legislative Auditor, Audit Division, Legislative Counsel Bureau Annette Swainston, Administrative Services Officer, Division of Child and Family Services, Department of Human Resources Donald J. Mello, Director, Administrative Office of the Courts Mary L. Peterson, Superintendent of Public Instruction, State Department of Education Douglas Thunder, Director, Fiscal Services, State Department of Education Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration BILL DRAFT REQUEST 34-350: Makes various changes concerning programs for accountability of school districts. Senator Raggio said he requested this bill draft, which removes the sunset provision from the statute pertaining to accountability of public schools. The proposed legislation also adds reportable phenomena such as truancy and transient rate, provides for norm-referenced testing and includes an appropriation of $670,000 for the local school districts. SENATOR RAWSON MOVED FOR COMMITTEE INTRODUCTION OF BILL DRAFT REQUEST 34-350. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * BILL DRAFT REQUEST S-1962: Makes supplemental appropriation to Department of Employment, Training and Rehabilitation. Senator Raggio said this legislative proposal contains a $59,500 supplemental appropriation for the Nevada Equal Rights Commission of the Department of Employment, Training and Rehabilitation and is not in the Executive Budget. He asked Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration, if this measure has the administration's approval. Mr. Hataway stated he is not familiar with the bill. Senator Raggio requested that Mr. Hataway obtain an answer to his inquiry as soon as possible to expedite processing of the bill draft request (BDR). Committee action on the BDR was held pending a response from the administration. Bill Draft Request - Appropriation for Death Penalty Resource Center Michael Pescetta, Executive Director, Nevada Appellate and Post-conviction Project, testified in support of obtaining a bill draft request that would provide an appropriation from the state General Fund for this project. Supporting documentation (Exhibit C) was distributed to committee members. Mr. Pescetta said the mission of this project, which was funded by the 1991 Legislature, is to increase the level of defense representation in capital cases and thereby to reduce the number of constitutional errors that are committed in complex, time-consuming cases. He said ultimately, funding of this project will reduce the delay in processing capital cases and the cost of capital litigation in general. He further stated the project was established as a result of a movement by the federal judges to create a nonprofit organization for assistance and consultation to counsel in capital cases. Referencing the fact sheet in Exhibit C, Mr. Pescetta cited statistics regarding capital cases in Nevada. He noted Nevada has the highest per capita death row population in the country, double that of states such as California, Texas and Florida which have enormous death row populations. Additionally, Nevada has the fewest number of defense lawyers dealing with capital cases. Mr. Pescetta stated that very frequently, after protracted litigation in state and federal court, these cases are returned for retrial or reduction of sentence on the basis of errors which could easily have been avoided at the initial trial or in the initial round of post-conviction or appellate proceedings. He said the Nevada Appellate and Post-conviction Project (NAPP) is the only organization in the state devoted entirely to defense-related death penalty work and is unique among the resource centers established in the U.S. in that entities such as the attorney general's office and the district attorneys' association have consistently supported the NAPP. Mr. Pescetta said the project received complete bipartisan support in the 1991 Legislature, but due to the state's budget constraints in the last session no funding was provided by the 1993 Legislature. Senator Raggio asked how the NAPP was funded during the last biennium. Mr. Pescetta answered the project "scraped along" on federal funding from the administrative office of the U.S. courts. Responding to further inquiry from the senator, Mr. Pescetta said last year the NAPP received $178,000 from that source and it is not known at this time what the prospects are for continued funding from federal sources. Because of the current budgetary situation at the federal level it is possible the NAPP will receive no federal funding at all, he said. Senator Raggio inquired whether the NAPP in any way furthers attempts to abolish the death penalty. Mr. Pescetta replied the project does not lobby nor take a position on the validity or invalidity of the death penalty as a political matter. It is the NAPP's position, he stated, that given the reality of the death penalty, it cannot be contested that fairness on both sides should be part of the judicial system. He submitted that the NAPP is simply attempting to level the playing field somewhat by providing information and assistance. He said the $300,000 appropriation request would provide "bare bones" funding in the event the federal funds are not forthcoming. It was pointed out that committee introduction of the bill does not necessarily ensure its passage. Mr. Pescetta responded the NAPP is seeking the opportunity to present its case to the committee on its merits. SENATOR RAWSON MOVED TO APPROVE A BILL DRAFT REQUEST APPROPRIATING $300,000 FOR THE NEVADA APPELLATE AND POST- CONVICTION PROJECT. SENATOR O'DONNELL SECONDED THE MOTION. Senator Coffin inquired if former State Senator Mel Close still supports the NAPP. Mr. Pescetta replied the former senator continues to support the project. Senator Jacobsen asked if the NAPP will reduce the number of inmates on death row. Mr. Pescetta said it may ultimately reduce the number, either through reversal of convictions due to constitutional or legal errors or through execution in cases found to be error-free. It would not affect the 68 cases currently on death row, he indicated. Senator Jacobsen said he would support the motion but with a great deal of reservation. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * SENATE BILL 153: Makes various changes to provisions governing planning for health care. Senator Raggio reminded the committee members this bill was heard April 3. Ron Lange, Deputy Administrator, Health Division, Department of Human Resources, presented testimony (Exhibit D) regarding the amendments to Senate Bill (S. B.) 153 that were suggested at the previous hearing (Exhibit E). Mr. Lange said S.B. 153 removes the requirement for the State Health Coordinating Council as well as the Certificate of Need (CON) review process in rural counties. During the initial hearing the Nevada Rural Hospital Project expressed concern about the removal of the CON process as it relates to facilities construction, he testified. Their concern was for the protection of existing county-supported health facilities. Mr. Lange said the Health Division representatives met with Bill Welch, Executive Director, Nevada Rural Hospital Project and that he concurs with the proposed amendment. Mr. Lange directed the committee's attention to Attachment 1 to the amendment (Exhibit E-1), which contains the amending language. SENATOR JACOBSEN MOVED TO OBTAIN THE AMENDMENT TO S.B. 153 IN ACCORDANCE WITH THE LANGUAGE AGREED UPON BY REPRESENTATIVES OF THE HEALTH DIVISION AND THE NEVADA RURAL HOSPITAL PROJECT (EXHIBIT E-1). SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * State of Nevada Office of the Military Senator Raggio addressed the need for a bill draft request (BDR) to expedite the armory capital improvement projects (CIPs) for the military department (CIPs 95-C8 and 95-C9). Prior to taking testimony from the department's representative, he commended the presentation given by the officers who hosted the committee members when they toured the military facility in Yerington, and their deportment. The tour was arranged by Senator Jacobsen and was hosted by the State Command Sergeant Major, Jack Moseby of Yerington. Drennan A. Clark, Major General, The Adjutant General of Nevada, Office of the Military, presented testimony in support of expediting verification of state matching funds for the two armory CIPs. Summarizing the contents of a letter sent to Senator Raggio (Exhibit F), Major General Clark said the federal funds appropriated for the armory projects are currently subject to rescission by Congress if they are not obligated soon. If the state funds for the projects, both the Washoe County armory and the Clark County armory projects will be transferred at the national level from the unobligated list to an obligated list so they will not be subject to rescission. The bill draft request would allow the two CIPS to be processed individually. SENATOR RAWSON MOVED TO OBTAIN A BILL DRAFT REQUEST FOR EXPEDITIOUS ACTION WITH REFERENCE TO CAPITAL IMPROVEMENT PROJECTS 95-C8 AND 95-C9. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) Senator Raggio thanked Senator Coffin for suggesting the request for expeditious action and for bringing the matter to the committee's attention. He indicated the bill will be voted upon as soon as it comes before the committee. * * * * * SENATE BILL 368: Makes appropriation to legislative fund. Senator Raggio stated his intention to hold the hearing on Senate Bill 368 next in order to accommodate the testimony of Lorne Malkiewich, Director, Legislative Counsel Bureau (LCB). The measure appropriates additional funding for the conduct of the Legislature this session. Mr. Malkiewich said LCB projects the appropriation for $3.6 million in S. B. 368 will fund the Legislature through June 15, 1995. The appropriation is projected to cover the costs of the legislative session through the adjournment and to provide a sufficient balance in the legislative fund to implement the 1997 session. It was noted the previous appropriation for the 1995 Legislature was $5 million. The total appropriation would be $8.6 million. Senator Raggio closed the hearing on this bill. SENATE BILL 8: Requires that computation of basic support of school districts include average daily attendance of certain part-time pupils. Senator Raggio noted this bill was introduced by the Senate Committee on Human Resources and Facilities. Jeanne L. Botts, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, presented background information on S.B. 8 from written testimony (Exhibit G). She noted the bill was recommended by the interim study of public elementary and secondary education authorized in Senate Concurrent Resolution (S.C.R.) 52 of the Sixty-seventh Session and chaired by Senator Rawson. SENATE CONCURRENT RESOLUTION 52 OF THE SIXTY-SEVENTH SESSION: Directs Legislative Commission to conduct interim study of public elementary and secondary education. Ms. Botts further described the history and purpose of S.B. 8. She said a fiscal advisory group composed of representatives of local school districts having expertise in school finance helped review several proposals for the interim study subcommittee. One of the issues examined by the group was the method of funding alternative programs for earning high school diplomas. State aid for adult high school diploma programs in the states' prisons was capped in 1987, and for non-prison programs, in 1991. Previously, Ms. Botts continued, state aid was provided through an open-ended formula; but growth became difficult to predict, and actual costs were often not determined until after the end of the fiscal year, due to complicated pupil accounting procedures. There is also some indication the formula, which then provided one-fourth of basic support per pupil multiplied by the 3 highest months' attendance in adult programs, was funding more than the actual costs of operating the programs. Ms. Botts said in the 1993 legislative session, funding for the programs was frozen at the amount spent in Fiscal Year (FY) 1991-1992, and any relief for addressing growth had to be postponed until the current legislative session. Continuing, Ms. Botts said the school districts have expressed concern the current cap on funding does not allow for growth in the adult high school diploma programs. To provide an incentive for expanding existing programs and establishing new programs and to assure better accountability and more equity than the current method, which reimburses districts for actual expenditures within the capped limit, the school districts have indicated they would prefer to return to a formula for funding adult high school diploma programs, based on attendance. Ms. Botts said the fiscal advisory group suggested payments for the adult diploma program be based on one-fifth of the statewide average rather than on each district's separate basic support per pupil. This figure would be multiplied by the average daily attendance. Ms. Botts pointed out that at the time the fiscal advisory group was reviewing whether the payments should be one-fourth or one-fifth of basic support, no recent expenditure data was available. She said the group also explored methods of reporting data that would facilitate expediting the reimbursement process. Ms. Botts said S.B. 8 is the S.C.R. 52 of the Sixty-seventh Session subcommittee's attempt to reinstate a formula for allocating funding from the Distributive School Account (DSA) to the adult high school diploma programs. In the discussion regarding the latter, the fiscal advisory group considered the situation that exists with respect to adolescent or school-age pupils who are unable to participate in the regular high school program. It was observed that many adolescents face adult problems and need the flexibility commonly found in adult high school diploma programs such as night school, independent study and short-term intensive programs. The adult high school diploma program, however, is limited to individuals who are 17 years of age or older or who have withdrawn from regular high school and missed their graduation date. There is an exception if the court orders a pupil under the age of 17 into the adult high school diploma program, Ms. Botts said. In further testimony Ms. Botts said the fiscal advisory group preferred the flexibility of providing courses in alternative education programs based on a number of minutes per course rather than 330 minutes per day for 180 days. The group discussed funding programs for alternative education for school-aged children using the same formula suggested for the adult high school diploma programs. Ms. Botts noted a mechanism would be needed to avoid double-counting students in alternative education programs who might have been enrolled and counted in the regular education program during the first school months. Ms. Botts said the State Department of Education was, at the time of the interim study, revising its regulations pertaining to alternative education, and it was noted that legislation would be required to fund alternative education programs by a method other than counting each pupil enrolled in an alternative program the first school month as one full pupil, regardless of the amount of time spent in class. The fiscal note accompanying S.B. 8 only considers existing regular and adult education programs, Ms. Botts pointed out. The impact of the bill on new adult diploma programs, or new and existing alternative education programs for school-age students, is not addressed. The fiscal note assumes school districts that have no programs currently, or have very small programs, would not be expanding under a formula-based funding mechanism. Ms. Botts said the bill does not limit reimbursement, so funding for these programs could greatly increase. On the other hand, she stated, part-time high school students enrolled in alternative education programs who are not attending school for a minimum number of minutes per year would no longer be counted as full-time pupils for apportionment purposes, which could result in significant savings. Ms. Botts said for several years the adult high school diploma programs have been reimbursed for actual expenditures within a capped amount. Programs that were long established or spending more, received more, and it was difficult for new programs to start up or for programs to expand within the capped amount of funding. Also, Ms. Botts stated, the state was experiencing a fiscal crisis for much of the time following the capping of funds for the regular adult diploma program, so growth in a non- mandated program was probably unlikely. She said in the 1992-1993 school year, the Clark County School District (CCSD) actually cut $1 million from its adult diploma program to achieve savings required by the budget reductions. The fiscal advisory group recognized the need for a reasonable amount of funding per pupil for which adult and alternative education programs could be efficiently operated, Ms. Botts continued, and that amount should be a specified percentage of statewide basic support. She said at the time the bill was addressed by the S.C.R. 52 of the Sixty-seventh Session interim study committee the amount was 20 percent. In response to questioning from Senator Raggio, Ms. Botts said the 20 percent (one- fifth) figure is probably negotiable. At the time the bill draft was recommended by the S.C.R. 52 of the Sixty-seventh Session committee, 20 percent seemed to be a reasonable level of funding based on the information available. Senator Raggio asked if the effect of S.B. 8 would be that there would be the absence of a cap on any of the programs, including the prison program. Ms. Botts replied yes. She said the bill as written contains no upper limit. Senator Raggio requested Ms. Botts to explain the result of the fiscal note attached to S.B. 8. Ms. Botts stated the school districts, should this legislation be approved, will receive $1 million less than they otherwise would. Senator Raggio referenced a table provided by the State Department of Education depicting the fiscal impact of S.B. 8 based on three basic support levels (20 percent, 25 percent and 30 percent) (Exhibit H). Ms. Botts said the information in this table does not address any expansion or new programs, or the effect of the alternative education programs. Keith Rheault, Deputy Superintendent, Instructional, Research and Evaluative Services, State Department of Education, explained the data presented in Exhibit H and provided testimony regarding the effects of S.B. 8 on current programs (Exhibit I). He said the most recent information available (FY 1994 average daily attendance for adult education programs only) was used to calculate the figures in the table. Dr. Rheault said the 20 percent support level would generate $6 million, while the current allocations are approximately $7.7 million. He indicated the difference of approximately $1.7 million reflects a reduction in adult education funding, which he said the department does not believe was the intention of the S.C.R. 52 of the Sixty- seventh Session committee. Continuing, Dr. Rheault said the 25 percent basic support (using the most recent data available at the time the table was developed) would generate $7.5 million, while the current allocations are approximately $7.8 million. He said the recommendations in the Executive Budget for the DSA currently includes $9 million for FY 1996 and $9.9 million for FY 1997 for the high school adult diploma programs. He noted the amount for FY 1996 includes $576,000 for the new Lovelock Correctional Center and $790,000 for the programs in FY 1997. The other increases in this budget are due to some roll-up costs and allowance for growth. Senator Rawson said what is being recommended in S.B. 8, essentially, is that a cost- neutral formula be developed. He recommends developing the formula using a figure aimed at a cost-neutral impact for the 1995-1997 biennium; the formula would drive the funding "in the normal fashion" in the future. Dr. Rheault said the State Department of Education fully supports the intent of S.B. 8 to develop a formula. However, the department has several concerns, including the projected negative effect of the formula on the small rural counties. Dr. Rheault suggested a work session could be held to determine an accurate reimbursement rate. He said the department also is concerned with regard to the start-up date of July 1, 1995. Currently, he explained, the way the appropriations are being made, districts are already negotiating what their budgets will be for next year, and the proposed effective date would present significant problems. He suggested implementing a "hold harmless" provision or delaying conversion to the formula until July 1, 1996. This would enable the department to work with school districts in order to implement the appropriate procedures that would be required. Senator Jacobsen voiced concern about the possible impact of S.B. 8 on the programs in the rural counties. Ms. Botts said the issue addressed by this measure with respect to alternative education is that if the students are in class the required number of minutes they would be counted as full-time; otherwise, they would not be eligible to be counted for full apportionment as they are currently. Hank Etchemendy, Executive Director, Nevada Association of School Boards (NASB), testified in support of the concept of a formula as provided in S.B. 8, although he said the 20 percent level is not adequate. He spoke on behalf of the Elko County School District as well as the NASB. He called attention to documents provided by Ernie McKenzie, Principal, Carson City School District (CCSD) that include letters regarding the district's position on S.B. 8, information about the adult high school diploma programs in the CCSD, a proposed adult education statewide plan and supplemental data (Exhibit J). Mr. Etchemendy said Mr. McKenzie was unable to attend the hearing. Senator Rawson suggested the simplest solution to the formula funding problem would be to handle this situation in the same manner as the DSA and to count adult diploma or alternative education students as a certain percentage of "a regular student," resulting in the funding formula "correcting" for the rural areas. Donald F. McHenry, Area Superintendent, Alternative Schools and Programs, Clark County School District (CCSD) testified in opposition to S.B. 8. He said he was somewhat uncertain whether he should speak in support of or in opposition to this measure, because while the CCSD supports the concept of different funding, as currently written at the 20 percent level, S.B. 8 would have an adverse effect on some of the programs in the school district. Mr. McHenry presented the balance of his testimony from a written text (Exhibit K). Mr. McHenry's testimony is summarized in the written text as follows: The bottom line is that S.B. 8, as currently written, will result in substantial reductions in educational programs offered both in the community, and as the only real rehabilitation program in prison settings. The positions now in place minimally offer only the subject areas required for graduation, and three vocational programs at each site. To eliminate any positions will result in not being able to graduate students with an adult high school diploma, or offer vocational training. An additional result of reduced funding will be the elimination of the itinerant programs we offer at the honor camps, boot camp, and the driving under the influence (DUI) camp. As stated in the written text, the Clark County School District proposes that one of two options be considered for this bill, which would facilitate continued educational programming and would address specific needs for adjusted funding in adult and correctional education areas. The first option is to continue the existing capped funding levels (including roll-up adjustments) for the next biennium, during which time a task force would work on an adjusted formula. The second option would be to establish an average daily attendance (ADA) formula at 30 percent of the statewide average, which would allow for continued programming, with no reduction in funding. Regardless of the option chosen, the CCSD proposes the task force should address a need for differential funding formulas to distinguish funding differences between adult education, prison education, large districts, and small districts. Senator Raggio verified that Mr. McHenry supports "removing a capped amount" and asked him to indicate to the committee what he regards as the percentage to apply to part-time students, should this be "plugged into" a formula. Mr. McHenry replied the formula would need to be 30 percent merely to allow the school district to break even, given the current ADA. Remarking that the break-even point involves an arbitrary number set by the Legislature every year and is not a fair standard, Senator Raggio asked Mr. McHenry what could be regarded as a fair percentage to apply for a part- time student. Mr. McHenry indicated the part-time status is relative, depending upon the number of classes taken by a student, and needs to be based on the amount of time. He said the actual average amount of time that students are participating in the part-time classes needs to be considered. In order to obtain an average, he continued, using the funding level of 30 percent of the ADA seems realistic in terms of allowing both continued existing programming and would enable the programs to expand based on increased enrollment. This places the burden of responsibility on marketing to attract more students into the programs, Mr. McHenry said. Continuing, Mr. McHenry stressed the need for differential funding formulas. In addition to the issues related to large districts versus small districts, he said it is necessary to fund prison education differently than other adult education programs. The reason, he explained, is that prison education programs cannot actively engage in marketing efforts to draw a substantially increased population and are therefore "locked into" a set population; the programs cannot increase their attendance in ADA formulas to draw additional funds. Mr. McHenry said what is really needed is a task force to develop differential formula funding for small districts and large districts in adult education, and for prison education programs. He recommended that at this point the adult education programs should be funded at a level that at least allows continuous funding and programming, and a task force should be created and assigned the task of developing an absolute formula for differential funding during the 1995- 1997 biennium. Steve Knight, Adult Education Coordinator, Lyon County School District (LCSD), indicated his testimony in opposition to S.B. 8 represents his personal views. He said he is a member of the board of the directors of the Nevada Adult Education Association and is the president-elect of that body. Mr. Knight said rural districts will be substantially impacted by the "reduction on funding formula." He emphasized the necessity to examine and increase the funding and to not cap it at 20 percent. This would destroy the adult programs in the rural counties, Mr. Knight maintained. He said the Lyon County and Carson City school districts have the third-largest adult education programs in the state, other than those in Clark and Washoe counties. He supports the creation of a task force to develop funding formulas that will not adversely impact the rural counties, and the implementation of differential formulas. Continuing, Mr. Knight said in the Lyon County School District, more than 125 adult high school diplomas and 400 general education diplomas (GEDs) have been awarded. He said the adult education programs help the citizenry to become more productive and employable, and are very important to the community. He stressed the need to avoid the constraints of a funding formula that is too low and that would destroy existing adult education programs and obliterate the possibility of operating such programs in the rural counties. He said Lyon County and probably the other rural counties have multiple sites, and it is expensive to operate several sites. Mr. Knight said the adult education programs are important and are not terribly expensive compared to the prison programs. Roselyne Pirodeau, Representative, Mineral County School District (MCSD), said she works in the district's adult education and alternative education program. She said she has been allotted just 1 hour per day and funding of $11,000 for the year for these programs. She stated there is a great need for the programs in small counties and noted that Mineral County has a high dropout rate and the highest pregnancy rate in the state. It is nearly impossible to create one of these programs under the current conditions, Ms. Pirodeau remarked. She said she works 3 days per week, from 7:00 a.m. to 8:00 p.m., in an effort to keep the program going. Ms. Pirodeau recommended an incentive program be created to encourage expansion of the adult and alternative education programs by the school district. She suggested a special 2-year financing be provided to establish the program. She said the school district does not oppose the formula, which it is believed would be beneficial to the school district once the program is established. She urged the committee to create the special 2-year funding and guaranteed she will have the program in operation within the 2-year period. Senator Raggio closed the hearing on S.B. 8. He invited the presentation of additional information on the bill at a later date. SENATE BILL 364: Modifies program to subsidize malpractice insurance premiums for providers of prenatal care in areas of state that lack services for prenatal care. Carolyn Ford, Assistant Dean, University of Nevada School of Medicine, testified in support of S.B. 364. She said she is also the director for the Center for Education and Health Services Outreach, which office would administer this program. As background information Ms. Ford said the language of this legislation was passed by the 1991 Legislature under the leadership of Senator Rawson. She said the senator has great concern and compassion for the issues related to obstetrics in Nevada, especially in underserved rural and remote communities. Ms. Ford stated there has been a historical, documented problem in Nevada with regard to access to primary care services in the area of obstetrics, particularly in the rural and frontier communities. A bill similar to S.B. 364 was passed, and an appropriation set, in 1991. Ms. Ford said at the close of the session, budget cuts were implemented and this program fell victim to the reduction in funding. She said S.B. 364 includes a funding appropriation request. Referencing background information distributed to the committee (Exhibit L), Ms. Ford said the figures examine the distribution of malpractice subsidies. She said this particular program contemplates subsidizing practitioners who would provide prenatal services. The practitioners include family and general practitioners, obstetricians, nurse practitioners, physician assistants and certified nurse midwives. Ms. Ford said the role of the University of Nevada School of Medicine would be to administer the program, and 100 percent of the funds requested in S.B. 364 would be used for the malpractice subsidies. All administrative fees would be absorbed by the medical school. Ms. Ford further testified the school is prepared to offer the continuing medical education function that is outlined in the bill, through the area health education center (AHEC). The AHEC system designs residency training and other opportunities for practitioners to upgrade and maintain their skills and knowledge in this area. Another system, the Computer Assisted Medical Education Link (CAMEL), is an electronic data base installed in all rural communities in Nevada to enable on-line access by practitioners to medical information such as clinical standards or pharmaceutical questions relating to prenatal care. Ms. Ford reiterated the school of medicine is prepared to work with practitioners in this arena. Continuing, Ms. Ford said another feature of S.B. 364 is to address issues regarding the health status of pregnant women in various communities. She said the medical school never proposed that this legislation should simply subsidize people who provide obstetrical services, but would address problems with regard to health status in these communities, such as low birth weight babies and earlier prenatal care to avoid longer- term, tertiary care costs with hospitalization. Ms. Ford stated the practitioners participating in this program would be required to participate with medical facilities in their communities to provide the care, and to develop plans that address the issue of access to services regardless of ability to pay as well as the means of improving the health status of women in the communities who are pregnant or potentially pregnant. Senator Raggio asked if in this proposal, 40 percent of the malpractice insurance premiums of family practitioners would be subsidized and 50 percent of the premiums of the other practitioners would be subsidized. Ms. Ford replied the amount of the subsidy would be 40 or 50 percent of the difference between the cost of malpractice insurance for practitioners who perform obstetrical services and the cost when obstetrical medicine is not practiced. Further discussion ensued on the application of S.B. 364 to the existing situation in rural counties that lack obstetrical services. Senator Raggio ascertained that to be eligible for this program the requirements include that the practitioner complete training in prenatal care, continue to provide prenatal care for at least 1 year and provide proof that insurance coverage is maintained. Senator Coffin inquired as to insurance companies currently providing malpractice insurance in Nevada besides The Doctor's Company. Ms. Ford said she could not say for certain. Senator Coffin asked what the difference is between the rates charged by the Doctor's Company and those charged by other insurance carriers. Ms. Ford replied the established rates are fairly similar. She said all of the physicians are surveyed regarding the rates they are paying, but not to determine the names of their insurance providers. In further questioning, Senator Coffin noted the premiums for the certified nurse midwives (CNMs) are almost exactly the same as those for family practice physicians who perform obstetrics (Exhibit L, Proposed Budget, OB Malpractice Subsidy Program). He asked if the subsidy that theoretically would be given to the midwives would, if made available, attract physicians to serve in the community where the CNM is serving. Ms. Ford said probably not. Stating her intention to answer the question in two ways, she said in one respect if a nurse midwife is in a community specifically to provide the obstetrical service in conjunction with a physician, it is typically because there is not enough business to recruit a second physician. Secondly, Ms. Ford continued, there are actually two rates for CNMs. One is for direct supervision and one is for indirect supervision. The malpractice insurance premium is much less for direct supervision CNMs than for those under indirect supervision, Ms. Ford said, but requires that the physician be in the room at the time the CNM is practicing obstetrics. She pointed out this essentially circumvents the reason for the CNM in the first place, which is to help provide obstetrical coverage and to free the physicians to provide other medical services. Ms. Ford said the proposed budget for the program therefore provides for the higher malpractice premium for indirect supervision, which translates into a lesser amount of on-site supervision. Senator Coffin asked if legislation has been proposed regarding immunity for obstetrics practitioners to help limit the liability, which he commented is what is driving the premium costs. Ms. Ford said she is not aware of any current legislative proposals to address this issue. She noted that in the past the medical review board has helped significantly to reduce the claims that revolve around obstetrics, particularly, and a decline in the insurance premium rates for this area of medicine occurred as a direct result of the board's activities. Senator Coffin noted the premium costs are related to malpractice litigation that is often based on unrealistic expectations. Ms. Ford responded that the original intent of the proposed legislation was to provide some protection for practitioners who provide obstetrical services, whether the person served is a patient or not. One of the other significant factors in S.B. 364 is the fact that nine out of the 13 practitioners performing obstetrics in rural Nevada are family practitioners, whereas family practitioners in the urban areas are not providing obstetrical care. Such care has been left exclusively to obstetric-gynecology (OB-GYN) physicians. Ms. Ford said aside from the school of medicine family practice residency program, those are the only family practice physicians who perform obstetrics. Continuing, Ms. Ford said the rural communities are in jeopardy of losing practitioners who provide obstetrical services. As an example, she said in one particular community the two physicians who are currently working with a hospital that is helping to subsidize their malpractice insurance rates are going to cancel the insurance coverage because of the high cost of the premiums. This will eliminate coverage of pregnant women for a radius of 280 miles in either direction, Ms. Ford said. In conclusion Ms. Ford said the crisis continues to worsen, and while the subsidy will not solve all of the problems related to obstetrics in Nevada it will help to address the problem. Bobbie Gang, Lobbyist, Nevada Women's Lobby and the National Association of Social Workers, Nevada Chapter, stated these organizations support S.B. 364 because they are concerned with the health of women and with the possibility that women in the rural communities may not be able to receive the care that might be needed on very short notice. BILL DRAFT REQUEST S-1962: Makes supplemental appropriation to Department of Employment, Training and Rehabilitation. Mr. Hataway said he conferred with John P. Comeaux, Budget Director, Department of Administration on this BDR as requested earlier by Senator Raggio and verified this bill is supported by the administration. He said the alternative to not having a supplemental appropriation would be layoffs and further delays in "an already tight budget situation." SENATOR RAWSON MOVED FOR COMMITTEE INTRODUCTION OF BILL DRAFT REQUEST S-1962. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS O'DONNELL, RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * ASSEMBLY BILL 33: Repeals obsolete provision relating to disposition of balance in abandoned property trust fund. Douglas E. Walther, Deputy Attorney General, Commerce Section, Office of the Attorney General, testified in support of Assembly Bill (A.B.) 33. He said the bill will remove obsolete language that should have been removed in 1985, when the Unclaimed Property Division was continued indefinitely. The language has been in existence since the inception of the program. It was originally intended to provide a mechanism for the disposition of funds in the event the division was "sunsetted" and expired, but due to a drafting error the language has been retained in the statutes. Mr. Walther said the language is inconsistent with continuation of the unclaimed property program. Mr. Walther further stated this legislation was recommended during the last audit of the Unclaimed Property Division to remove the ambiguity in the statute. Senator Raggio called attention to a notation from the fiscal analysis staff that this measure would allow approximately $3.7 million to be transferred from the unclaimed property trust fund to the General Fund in each year of the biennium. Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated the $3.7 million represents the current estimate of annual transfers to the General Fund. Senator Rawson questioned the characterization of this measure as a simple change in the statutes to remove obsolete language. He said the bill fundamentally makes a change from the permanent school fund to the General Fund and involves a fundamental difference in the handling of abandoned property trust funds. Senator Raggio called upon Gary Crews, Legislative Auditor, Audit Division, Legislative Counsel Bureau (LCB), to provide testimony on this matter. Mr. Crews told the committee the Audit Division conducted an audit on the Unclaimed Property Division and identified the conflicting statute. A legal opinion was requested from legislative counsel on what the disposition of the funds should be. After researching the matter, the legislative counsel reached the same conclusion as the attorney general's office that when the program was initially established it was a pilot project and was to terminate at some point in the future. Mr. Crews said when the sunset provision for the program was eliminated, the bill drafters failed to eliminate the clause that provided distribution of funds to the permanent school fund. There is a conflicting provision in the statutes specifying that the funding go to the General Fund. ASSEMBLY BILL 391: Makes supplemental appropriation to division of child and family services of department of human resources for increase in cost of utilities at Caliente youth center. Annette Swainston, Administrative Services Officer, Division of Child and Family Services, Department of Human Resources, provided testimony in support of A.B. 391. She stated that during the 1993 legislative session, information was provided to both the Senate Committee on Finance and the Assembly Committee on Ways and Means indicating utility rate increases were being proposed by the Caliente Public Utilities. Ms. Swainston said no final amounts were available at the time the budget was closed. A letter of intent from the Legislature directed the Caliente Youth Center to approach the Interim Finance Committee in FY 1995 to request a supplemental appropriation, should a shortfall occur. The current FY 1995 shortfall has been estimated at $70,483, Ms. Swainston continued. Senator Raggio asked if the amount cited by Ms. Swainston is still the controlling amount. Ms. Swainston replied yes. The senator asked Mr. Hataway if A.B. 391 has the approval of the administration. Mr. Hataway replied affirmatively. SENATOR RAWSON MOVED TO DO PASS ASSEMBLY BILL 391. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * ASSEMBLY BILL 33: Repeals obsolete provision relating to disposition of balance in abandoned property trust fund. SENATOR JACOBSEN MOVED TO DO PASS ASSEMBLY BILL 33. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * SENATE BILL 368: Makes appropriation to legislative fund. SENATOR JACOBSEN MOVED TO DO PASS SENATE BILL 368. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * SENATE BILL 346: Makes supplemental appropriation to department of administration for personnel expenses of office of internal audits. SENATOR RAWSON MOVED FOR DO PASS ON SENATE BILL 346. SENATOR COFFIN SECONDED THE MOTION. In discussion prior to the vote, Senator O'Donnell stated his intention to support this measure, albeit reluctantly. He said the performance indicators for the internal audit agency are weak. Senator Raggio pointed out the division is now led by Pat Eischeid, Chief, Internal Audit, and there have been definite improvements within the agency. Mr. Miles said the division has returned information requested by the subcommittee regarding audits planned and work to be performed for the next 2 years. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Following the vote on S.B. 346, Senator Jacobsen echoed the concerns expressed by Senator O'Donnell with respect to the Internal Audit Division. He suggested the Legislature utilize some kind of mechanism to track the future performance of this agency. Senator O'Donnell commented the situation with regard to the division was that the agency was not apprising the Legislature of serious problems it had detected. Senator Raggio stated the committee would address the need for monitoring by the Legislature either statutorily or through a letter requiring the information to be submitted to the Interim Finance Committee or the Legislature. He instructed staff to make a note of the proposed letter of intent. Statutory Changes to Improve Collection of Fines and Assessments Senator Raggio noted that Donald J. Mello, Director, Administrative Office of the Courts, had been previously requested by the committee to provide suggestions for changes to facilitate improvement in the collection of fines and assessments. He noted the suggestions had previously been made available to all members of the committee (Exhibit M), and since the committee has had an opportunity to review the information he requested that Mr. Mello merely highlight the suggestions in the interest of time. He asked if the suggestions have been reviewed by members of the Nevada Supreme Court. Mr. Mello replied the proposed statutory changes have been distributed to the justices. He reviewed the explanations of the changes outlined in Exhibit N. Senator Raggio asked if, with respect to the proposed lien on drivers' licenses (Exhibit M, page 1, Nevada Revised Statutes (NRS) 176.275), the proposal is that the defendant would not be allowed to renew his or her license if the fine or assessment remained unpaid. Mr. Mello said he believes this to be correct. He said language has been requested that would allow the Department of Motor Vehicles and Public Safety (DMV&PS) to collect fines and assessments when individuals come in to renew their licenses or registration so they are not put in the position of having to return to court and wait for the paperwork to transfer. The intention of the proposed language is to simplify the process by having the DMV&PS collect the fees and assessments and refer them to the appropriate courts, Mr. Mello stated. Regarding the suggested change to the NRS 209.463 (Exhibit M, page 1), Mr. Mello said currently it is not a requirement that the Department of Prisons deduct from inmates' wages the amounts to pay fines and assessments that they owe. He said such deductions are discretionary at this time, but the proposed new language would make them mandatory. Senator Raggio inquired if the effect would be that the deduction to pay fines and assessments would receive first priority. Mr. Mello replied yes. Mr. Mello said a proposed revision of an unspecified existing section or new section to the NRS "requires audits of justice, municipal and district courts and requires noted deficiencies to be corrected or for explanations to be submitted detailing why the deficiencies have not been corrected." Senator Raggio remarked the only issue not addressed in this proposed change is the cost of the audit and the fact that if the audit is to be mandated, local entities may be concerned about the failure of the state to provide the funding. He suggested the cost of the audit should be payable from the assessment fees. Mr. Mello said the possibility could be considered, but it would not be desirable to reduce the amount of monies received by the local courts. In explanation of another suggested revision to an existing or new NRS section, Mr. Mello said the proposal to impose similar post-audit requirements on local courts as are required of state agencies would provide a method of tracking the improvements in the local court systems and dissemination of the rationale as to why the recommended improvements were not implemented. In many instances, Mr. Mello stated, the improvements are not implemented because of a reluctance on the part of the city councils and the county commissions to pay for the improvements. The question of whether public policy should be changed in this regard would become a legislative issue, Mr. Mello said. Mr. Mello explained another revision of an existing or new NRS section, which would place liens on vehicle and drivers' licenses and require the payment of all outstanding fines and assessments prior to the issuance of title for a vehicle. He said this provision is employed effectively in the State of California. In that state, a title search on the vehicle is conducted before a vehicle is sold. If there are outstanding fines, the buyer and the seller negotiate payment or the buyer assumes the liability. Senator Raggio asked if this procedure would be a responsibility of the DMV&PS. Mr. Mello said any outstanding fines would be recorded with the department, and the title would not be issued until the fine is paid. Concerning a proposed revision to NRS 178.518 that would change existing law to agree with the recent audit report, Mr. Mello said the amending language would specify that "except for money collected and forfeited as bail due to a violation of a misdemeanor pursuant to state law," the money would go to the county (page 4, Exhibit M). If a state law has been violated, however, the money would go to the state, Mr. Mello stated. Senator Raggio recalled there had been discussion regarding the need to prevent the situation that occurs in some areas in which a district attorney changes a citation issued by a highway patrolman to a county misdemeanor of a similar nature. Mr. Mello said according to his recollection, the issue raised in the audit was that of the court making the change, resulting in the defendant not being properly noticed as to the charge. Senator Raggio responded the necessity of preventing a district or city attorney from changing a state citation to a similar charge under a city or county ordinance also needs to be addressed. Mr. Mello replied the proposal to amend NRS 178.518 does not address that issue. Continuing, Mr. Mello said some city charters allow for the city to automatically adopt all state misdemeanor laws as violations of local ordinances without being specific, so any misdemeanor section of the NRS that is stated is automatically presumed to be a violation of local ordinance. Senator Raggio averred the issue is that when state officials are making the arrest, the violations should be treated as state violations. Senator Jacobsen questioned the necessity for the proposed statutory changes to facilitate improvement in the collection of fines and assessments. He asserted the court should exercise its authority and responsibility. Mr. Mello pointed out the court is bound by the state constitution and state law, and to implement the proposed changes to the state statutes would require legislative action. He said the court is not in a position to unilaterally determine the changes will be law. Senator Jacobsen countered the court should stand on its authority to establish the fines and collection procedures. Mr. Mello responded with an example of a situation involving an attempt by one judge to obtain extradition of a person from Lancaster, California who owed a fine of $2,500, and the refusal of the district attorney in that jurisdiction to cooperate on the basis that he did not have time to bother with such matters. Mr. Mello suggested this is symptomatic of a need for the executive department to work more closely with the courts to execute the orders of the court. He said many of the proposed statutory changes would strengthen existing laws. Senator Jacobsen suggested publishing the names of persons owing fines and assessments could be effective. Mr. Mello replied this is an option. Senator Coffin asked several questions regarding issues discussed in the initial hearing. He said he had expressed concern at that time regarding the "broad banding" of the administrative assessment and had hoped the process could be simplified, possibly through returning to the single-level fee that existed when the administrative assessment fee was implemented in 1983. He noted there is no such proposal in the proposed statutory changes. Mr. Mello said the court is leaving it to the Nevada Judges Association (NJA) to determine what changes are needed in the administrative assessment fee. He said there is a proposal to restructure the assessment, which the court supports as long as its finances are not impacted. The proposal is contained in a legislative bill in process. Mr. Mello said it is not his intention for the proposal presented in Attachment B (Exhibit M) to interfere with the above-mentioned legislative measure. He said the proposal contains suggestions regarding the administrative assessment fees. Page B-2 of the proposal contains a proposal to delete the reference to NRS 268.019, Mr. Mello said, because there is currently a move by at least one city to decriminalize traffic offenses. Such matters would still be heard in the court, but because of the exemption provided in this statute there would be no administrative assessment. Senator Coffin inquired if the previously referenced bill addresses the fact that judges often fail to vigorously enforce the administrative assessment because they believe they are not receiving a large enough share of the fees, considering the negative political consequences of assessing the fee. Mr. Mello responded affirmatively. In further questioning, Senator Coffin asked if parking would be excluded in the proposal to delete the reference to NRS 268.019 in NRS 176.059. Mr. Mello said no. Senator Raggio suggested it would be appropriate to request an omnibus bill draft on the suggested changes, including comments developed during the present discussion. SENATOR O'DONNELL MOVED TO REQUEST A BILL DRAFT FOR THE PURPOSE STATED ABOVE. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Education State Programs - Page 165 Senator Raggio requested Ms. Botts to report on the joint subcommittee recommendations with respect to the budgets of the State Department of Education. Ms. Botts said the joint subcommittee met to discuss 23 of the 26 budgets in the department. The subcommittee did not handle the Distributive School Account (DSA), Class Size Reduction (CSR), or School Improvement. Ms. Botts outlined the budget changes that have been recommended by the subcommittee, referencing the recommended budget closing actions presented in Exhibit O. Regarding the budget for the Education State Programs, Ms. Botts said the subcommittee recommended the budget be approved with some adjustments. The Education Technology Consultant and related .50 FTE (full-time equivalency) clerical position is recommended to be deleted from this budget and possibly placed in Senate Bill 204, which contains the $11.2 one-shot appropriation request for the Statewide Management of Automated Record Transfer (SMART) plan. SENATE BILL 204: Makes appropriation to department of education for development of statewide system of reports and analyses of information concerning pupils. Additionally, Ms. Botts continued, the subcommittee recommends moving the new Science Consultant and accompanying clerical position in decision unit E-252 from the state-funded account to the federal programs account, and funding the positions if federal funds are available. Ms. Botts also pointed out this budget account includes half of the salary for the Deputy Superintendent for Administrative and Fiscal Services that is recommended to be restored. The other half of the salary is in the support services budget. Senator Raggio noted that unless specified otherwise, the effective date of hire for all new positions is October 1, 1995. Senator Rawson called attention to the decision unit (E-250) involving whether or not the SMART plan would be exempt from the Department of Information Services (DIS). Ms. Botts noted that as budgeted the Education Technology Consultant would be working in the State Department of Education, not the DIS. Senator Rawson voiced the opinion it would be appropriate to give the education department, rather than the DIS, the responsibility for this position. Senator Raggio pointed out that funding the Education Technology Consultant position was made contingent on passage of S.B. 204. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGES 4 AND 5 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS COFFIN, RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Education Gift Fund - Page 185 SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS COFFIN, RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * ESEA Chapter 1 - Page 187 Ms. Botts said the joint subcommittee recommended closing this budget in accordance with staff recommendations and to approve the temporary reclassification of the half- time Education Consultant as Assistant Director of Federal Programs, with a "plus 5 percent" salary increase for supervisory duties. The additional funds are to be transferred from the Goals 2000 federal funds. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGE 7 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * National Origin/Race Desegregation - Page 191 SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGE 8 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Discretionary Grants - Page 195 Ms. Botts said the subcommittee, in addition to recommending adoption of the changes recommended by staff, recommends approval of the temporary reclassification of the half-time Education Consultant for the National Diffusion Network as Assistant Director of Federal Programs (the other half of the position in the ESEA Chapter 1, budget, page 187). The reclassification entails a 5 percent salary increase for supervisory duties, to be paid from the Goals 2000 federal funds. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGE 9 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Other State Educational Programs - Page 199 SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR RAWSON SECONDED THE MOTION. Ms. Botts pointed out the inclusion in this budget (decision unit E-251) of the $50,000 appropriation to match funds from the National Geographic Society for the Geographic Alliance in Nevada (GAIN) project. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * ESEA Chapter 2 - Page 11 Ms. Botts said in this budget account, decision unit E-900 contains transfer of the Title II Match and Science Program and its half-time Education Consultant from budget account 2708. She said the adjustments presented on page 11 of Exhibit O reflect the attempts by staff to meet the 90 percent required pass-through to the local school districts. Additionally, the new Science Consultant position requested in the Education State Programs budget (page 165) would be transferred to this account, and the position would be funded if there are sufficient federal funds available for this purpose. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGE 11 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Title II ESEA - Page 205 SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Education for Handicapped Act (IDEA) - Page 209 SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGES 13 AND 14 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Education of Handicapped (Chapter 395 of NRS) - Page 215 This budget pertains to the out-of-district placement of handicapped children. Ms. Botts said the joint subcommittee proposes discontinuing the shared responsibility for this program, currently held by the State Department of Education and the Division of Child and Family Services of the Department of Human Resources. It is recommended that the entire authority for the program be returned to the education department. Senator Raggio noted the joint subcommittee discussed this matter at length and was unanimous in its recommendation. Ms. Botts said it was agreed in the joint subcommittee hearing that the two agencies should continue to participate in a joint advisory committee. She said the director of special education expressed concern, in a conversation the previous day, because prior to the shared responsibility for the out-of-district placements it was often difficult for the State Department of Education to have students placed in in-state facilities that were under the control of the human resources department. The special education director told Ms. Botts the situation improved greatly during the period of shared responsibility, and she is therefore suggesting the cross-agency panel, or joint advisory panel, be reactivated. Further, Ms. Botts continued, the special education director recommends the advisory committee be expanded to include representatives from not only the State Department of Education and the Division of Child and Family Services but also the Division of Mental Hygiene and Mental Retardation and possibly the Director's Office of the Department of Human Resources. It is also proposed the panel meet prior to placing students out-of-state and that priority placement be given to the children in the NRS chapter 395 program for in-state placement in the Department of Human Resources facilities. Additionally, it is recommended the agencies plan cooperatively to meet the needs not currently being met and that they work together on future legislative proposals to develop in-state capacity. Senator Raggio suggested it might be prudent to place the above recommendations in a letter of intent. Ms. Botts said the recommendations could be included in a bill because a bill is required to change the law. Mary L. Peterson, Superintendent of Public Instruction, said the State Department of Education is also working with the Division of Child and Family Services on the issue of indirect costs. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGES 15 AND 16 OF EXHIBIT O, INCLUDING A BILL DRAFT REQUEST TO AUTHORIZE THE NECESSARY CHANGES AND THE ADJUSTMENT OF THE INDIRECT COSTS. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Douglas Thunder, Director, Fiscal Services, State Department of Education, said the department has just realized what might be involved with respect to the indirect costs and will furnish the relevant information as quickly as possible. Ms. Botts explained that funds transferred from this budget to the Department of Human Resources did not have an indirect cost rate applied to it. If the funds are in the State Department of Education and the department is paying for direct services as it currently is for some of the placements, an indirect charge is applicable and the amount would be significant, Ms. Botts said. Mr. Miles advised Senator Raggio the committee can consider the indirect cost situation when it receives the bill draft. Early Childhood Education - Page 219 Ms. Botts noted this budget account is one of those that have been consolidated into the federally funded budget containing all programs for special education (budget account 2715). SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Education for Handicapped - Teacher Training - Page 223 Ms. Botts said this is the third federally funded program for handicapped education that is being consolidated into budget account 2715. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Nutrition Education Programs - Page 227 Ms. Botts said staff has recommended that the proposal in the Executive Budget to increase four part-time positions in the Nutrition Program not be approved. The recommendation by staff is based upon a review of the overtime hours worked by those personnel, Ms. Botts stated. The staff recommends that the coordinator of the Summer Food Program be increased to full-time, a .25 FTE clerical position be increased to half-time, and the other two positions be left unchanged and the savings passed on to local school districts. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGE 18 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Continuing Education - Page 237 Ms. Botts said in this budget account the federally funded Adult Basic Education (ABE) program and the Job Training Partnership Act (JTPA) program have been combined, and the consolidated budget account has been renamed "Continuing Education." Additionally, the Executive Budget calls for hiring a half-time Education Consultant to assist the full-time consultant. The recommendation of staff, after reviewing the overtime records of this position, is that the position request may not be justified. The joint subcommittee therefore recommended deletion of the new half-time Education Consultant position. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGES 20 AND 21 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Educational Personnel Testing - Page 249 Stating this is the budget for the teacher competency testing program, Ms. Botts said the Governor is proposing this activity be rolled into the Teacher Education and Licensing budget account. Additionally, a letter of intent sets forth a schedule of payments to be followed by the department in repaying a 1989 General Fund appropriation for the validation of competency tests. Ms. Botts noted the department has continued to make the payments and the letter of intent is merely a reminder of this obligation. The joint subcommittee recommended closing this budget in accordance with the recommendations of the Governor and approving the letter of intent. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE, INCLUDING THE LETTER OF INTENT. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Education Support Services - Page 257 Ms. Botts said this budget account contains the other half of the position of Deputy Superintendent for Administrative and Fiscal Services. There is also a provision that after all of the education department's budgets are finalized, the cost allocations for the state's cost recovery plan and the attorney general's office, rent costs, fringe benefits and insurance costs must be recomputed and allocated throughout the various budgets within the department. Ms. Peterson said the department has an ongoing concern with indirect costs, and if federal funds are decreased over the next biennium, as anticipated, that will impact the revenue in budget account 2720. She said if the revenue is less than has been projected, it will become impossible to fund half of the fiscal deputy position. Ms. Peterson said this position is essential for the State Department of Education. Ms. Botts countered that if it is now required that an indirect cost rate be assessed against all out-of-district placements, additional funds should become available. Ms. Peterson agreed, assuming the decision [requiring the assessment of an indirect cost rate] is made accordingly. Senator Coffin stated the committee should clarify that the Deputy Superintendent of Administrative and Fiscal Services position, which he described as important, is not contingent on some unforeseen action. He said it will be difficult to recruit a person to fill the position, otherwise. Ms. Botts said the out-of-district placements for which the Department of Human Resources is responsible amount to well over $1 million, and the indirect cost rate of approximately 14 percent would result in a considerable amount of funds being transferred into this account from that source. She said the funding for the deputy fiscal position would probably therefore be assured. Senator Rawson remarked the joint subcommittee made the assumption the deputy fiscal position is definitely to be funded. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE AS PRESENTED ON PAGES 25 AND 26 OF EXHIBIT O. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Student Incentive Grants - Page 27 SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Drug Abuse Education - Page 267 Ms. Botts stated there are small technical adjustments in this budget as well as a letter of intent directing that performance indicators be developed for this program that focus on outcomes, and that the agency should draw from findings of surveys of students to measure changes in reported use of drugs or alcohol. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE. SENATOR O'DONNELL SECONDED THE MOTION. Ms. Peterson noted the drug abuse education and student incentive grants programs are being recommended for elimination at the federal level. Senator Raggio acknowledged this is a possibility, but he observed, "This is only an authorization with federal funding." THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * School Health Education - AIDS - Page 271 Ms. Botts said there are small adjustments in this budget and a possible letter of intent specifying that performance indicators for the account should be developed to focus on outcomes. It would be further specified that the agency draw from findings of surveys of students to measure changes in their knowledge about health issues and AIDS, changes in their behavior and in the incidence of AIDS in the student population. Senator Raggio noted the committee's concern regarding the performance indicators for this program. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Job Training Partnership Act - Page 275 Ms. Botts said the Job Training Partnership Act (JTPA) program is proposed to be consolidated into the Adult Basic Education account, now called "Continuing Education." She said the Governor has recommended the half-time Grants and Projects Analyst I position be increased to full-time. The records show this person has been working a considerable amount of overtime, Ms. Botts continued. She said the administrator of the State Job Training Office, which funds this program, confirmed this. The subcommittee therefore recommended closing the budget in accordance with the Governor's recommendations. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. INCLUDED IN THE MOTION IS A PROPOSED LETTER OF INTENT DIRECTING THE STATE DEPARTMENT OF EDUCATION TO DEVELOP, DURING THE BIENNIUM, A BUDGET ACCOUNT FOR PLANNING, RESEARCH AND EVALUATION, AND TO RETURN TO THE 1997 LEGISLATURE WITH A BUDGET THAT DRAWS ON FEDERAL FUNDS ALLOWED FOR ASSESSMENT AND EVALUATION OF PROGRAMS AND DATA COLLECTION TO PROVIDE AN IMPROVED PROGRAM FOR DATA COLLECTION, EVALUATION AND ASSESSMENT OF PROGRAMS. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND MATHEWS WERE ABSENT FOR THE VOTE.) * * * * * Senator Raggio thanked the members of the joint subcommittee, which was chaired by Senator Rawson, for their diligent efforts in considering the education budgets. Ms. Botts commented the new budget process has been productive. Senator Raggio said the cooperation between the LCB and Budget Division personnel has saved time and has greatly enhanced the process. Senator Jacobsen wished to acknowledge for the record the presence of two "exceptional students" from Douglas High School, Adrianne Alder and Brenda Alder, and three Republican women from Lake Tahoe. Senator Raggio welcomed the visitors. The meeting was adjourned at 10:28 a.m. RESPECTFULLY SUBMITTED: Sue Parkhurst, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance April 19, 1995 Page