MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session April 26, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:35 a.m., on Wednesday, April 26, 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 Senator Dean A. Rhoads Senator Bernice Mathews GUEST LEGISLATORS PRESENT: Assemblyman Lynn Hettrick STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Larry L. Peri, Program Analyst Fred W. Welden, Chief Deputy Research Director Pamela Jochim, Committee Secretary OTHERS PRESENT: Lonnie Hammargren, M.D., Lieutenant Governor John P. Comeaux, Director, Department of Administration Pamela B. Wilcox, Administrator and State Land Registrar, Division of State Lands, Department of Conservation and Natural Resources Thomas F. Reilly, Deputy Administrator, Family Support Services, Department of Human Resources Susan Vanden Plas, Benchmark Behavorial Health Systems Bob Malin, Nextel Project Manager, Fleet Call of Utah Pam Drum, Ombudsman, Tahoe Regional Planning Agency Rochelle Nason, Executive Director, League to Save Lake Tahoe Roderick Mier, Chief Administrative Officer, Tahoe Resource Conservation District I.R. Ashleman, II, Attorney at Law, Representative, Museums, Arts and Library Foundation Lorne J. Malkiewich, Director, Legislative Counsel Bureau Fred Dugger, Manager, Information Services, Legislative Counsel Bureau Thomas G. Tait, Executive Director, Division of Tourism, Commission on Tourism Karen Baggett, Deputy Director, Division of Economic Development, Commission on Economic Development Donald Logsaw, Executive Director, Business Council of Douglas County J.P. Smith, Representative, Nevada Resources Shirley Walker, Executive Director, Churchill Economic Development Authority John Sanderson, Chairman, Lyon County Economic Development Authority. Terry William, Executive Director, Tri-County Development Authority Senator Raggio opened the meeting for discussion on Bill Draft Request (BDR) 38- 1975. BILL DRAFT REQUEST 38-1975: Provides for establishment of family resource centers in certain neighborhoods to provide and administer social services. John P. Comeaux, Director, Department of Administration, noted funding for the centers has already been included in the Executive Budget. SENATOR JACOBSEN MOVED FOR COMMITTEE INTRODUCTION OF BDR 38-1975. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio introduced Bill Draft Request (BDR) 43-904 for committee consideration and noted the General Government joint subcommittee has already held hearings on the matter. BILL DRAFT REQUEST 43-904: Revises provisions governing organization of department of motor vehicles and public safety. SENATOR COFFIN MOVED FOR COMMITTEE INTRODUCTION OF BDR 43-904. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RHOADS WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio opened the hearing on Assembly Bill (A.B.) 387. ASSEMBLY BILL 387: Makes various changes concerning sale, lease or exchange of state land. Pamela B. Wilcox, Administrator and State Land Registrar, Division of State Lands, Department of Conservation and Natural Resources, testified the committee, in a previous meeting, held the bill until more information could be obtained regarding section 2(2) and section 4 of A.B. 387. Ms. Wilcox noted section 2(2) of the bill pertains to leasing Cottage 8B at the Nevada Mental Health Institute by Benchmark Behavioral Health System. She distributed three letters (Exhibit C) from local governments indicating their support of the lease agreement. Thomas F. Reilly, Deputy Administrator, Family Support Services, Department of Human Resources, distributed a handout (Exhibit D) which provides a detailed explanation of Benchmark's juvenile sex offenders' group home care program. Susan Vanden Plas, Representative, Benchmark Behavioral Health Systems, testified she will be overseeing the proposed program. Currently, all juvenile sex offenders, except 10, in the State of Nevada are sent out-of-state for treatment. Once the juvenile has completed treatment out-of-state, the individual is sent back to Nevada without any follow-up care. The group home program is designed to alleviate this problem by assisting with the juvenile's adaptation and integration back into the community. Senator Raggio noted there were no questions on section 2(2) and referred the committee to section 2(4) of A.B. 387. He stated section 2(4) pertains to a land-lease (Exhibit E) request on Southern Nevada Correctional Center property. Ms. Wilcox distributed three handouts (Exhibit F - Approval Letter from Department of Prisons; Exhibit G - Approval Letter from Department of Information Services; Exhibit H - Site Aerial Survey) which addresses some concerns voiced by the committee at a previous hearing. She indicated the lease (Exhibit E) has been revised since the first committee hearing. The lease fee has been renegotiated upward to $200 per month and the company will provide free rack space to the Department of Information Services. Senator Coffin indicated Sprint has a site located in close proximity to the proposed Nextel site and asked if the two systems can coexist. Bob Malin, Nextel Project Manager, Fleet Call of Utah, replied Sprint is aware of the proposed site and he assured the committee the systems can operate in such close proximity. Senator Coffin questioned if the state land lease gives an advantage to Fleet Call of Utah over SPRINT. Ms. Wilcox responded the Sprint site is on private land and she has no knowledge of Sprint's financial arrangements regarding their site. She said a state land lease is significantly different than a lease on private land. Fleet Call of Utah was not given the normal protections offered in a lease on private land. Ms. Wilcox, referring to the water lease (Exhibit I) mentioned in section 2(6) of A.B. 387, said the Public Service Commission of Nevada (PSC) informed her yesterday that Rule 17 applies to the lease (Exhibit I) which means the water must go to the municipality rather than the purveyor. Because of the PSC's ruling, an emergency revision was made to the lease and the City of Reno was designated the lessee. Presently, the City of Reno has the revised lease and is reviewing its content. The agreement to supply water to Silver Lake Water Distribution Company will not be changed because the City of Reno already has an agreement with the company. Senator Raggio noted the language in section 2(6) of the bill is incorrect, since the lessee is no longer Silver Lake Water Distribution Company. Ms. Wilcox agreed with the senator and stated she did not know how the situation should be handled. She related Friends In Service Helping (FISH) will be penalized approximately $4,000 by the U.S. Department of Housing and Urban Development (HUD) if the bill is not passed immediately. She suggested the bill could be passed with its present language and the language could be corrected at a later date in a trailer bill. Senator Raggio indicated he favored passing the bill as written on an emergency basis and immediately introducing a trailer bill correcting section 2(6). SENATOR O'DONNELL MOVED TO DO PASS A.B. 387 WITH THE UNDERSTANDING SECTION 2(6) WILL BE CORRECTED IN A TRAILER BILL WHICH WILL IDENTIFY THE LESSEE AS THE CITY OF RENO. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RHOADS WAS ABSENT FOR THE VOTE.) * * * * * SENATOR O'DONNELL MOVED TO REQUEST A BILL DRAFT REQUEST TO CORRECT THE PROVISIONS OF SECTION 2(6) OF A.B. 387 TO INCLUDE THE CITY OF RENO AS THE LESSEE. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RHOADS WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio closed the hearing on A.B. 387 and opened the hearing on Assembly Bill (A.B.) 13. ASSEMBLY BILL 13: Requires submission of proposal to issue general obligation bonds to provide grants to local governments and department of transportation for projects for controlling erosion and restoring natural watercourses in Lake Tahoe Basin. Assemblyman Lynn Hettrick came forward and stated the bill was passed unanimously out of the Interim Committee on the Tahoe Regional Planning Agency. The bill provides an opportunity for Nevada voters to determine if $20,000,000 in general obligation bonds should be issued for erosion control and the restoration of natural watercourses in the Lake Tahoe Basin. He referred to line 5 of the bill and stressed the funds are only to be used to carry out projects dealing with erosion control and restoration. Senator Raggio questioned if the bill provides any "buy-out" funding. Mr. Hettrick replied, no, and stated the funds would be used only for erosion and restoration projects. Senator Raggio asked if the bonding amount will be calculated under the state bonding limit. Mr. Hettrick responded section 4 of the bill was amended to indicate the amount will not be within the bond limit. Senator Raggio inquired about the type of bonds which will be issued. Mr. Hettrick indicated General Obligation bonds will be issued. Senator Raggio questioned what types of projects the bond funds will support. Pam Drum, Ombudsman, Tahoe Regional Planning Agency (TRPA), stated the agency and a number of researchers have been studying the decline in water quality at Lake Tahoe. She emphasized the solution to the problem is investment in Capital Improvement Projects (CIPS). In the last 30 years, Lake Tahoe has lost more than 30 feet in clarity due to algae growth. The excessive algae growth in the last 30 years was caused by land use practices which disturb existing conditions. Since 1977, $80 million has been spent on CIP projects around the lake. Remedial measures such as: erosion control, storm water drainage conveyance, and water infiltration projects are still needed and will cost approximately $270 million region wide. Nevada's portion of the cost is estimated to be $99 million. Ms. Drum distributed a report (Exhibit J. Original is on file in the Research Library.) detailing the legislative history of the TRPA and the Bistate Compact, public land purchases, and project recommendations. Senator Raggio asked if any of the proposed projects will impact private property rights. Ms. Drum replied, "I do not believe so." She indicated the funds will be made available to the county public works departments and the Nevada Department of Transportation for expenditure on projects in their rights-of-way. Senator Raggio commented it is his understanding the $20 million in bonding will increase the debt levy on property tax by one-half cent. Mr. Hettrick responded the tax increase will amount to $1.99 per year on property with a value of $100,000. Senator Raggio asked whether the bill indicates the funding can only be utilized on projects in the State of Nevada. Ms. Drum replied it is the agency's intent the funds go only to Washoe County, Douglas County, Carson City, special assessment districts, and the Nevada Department of Transportation. Senator Raggio inquired if the state of California is providing funding for similar projects. Ms. Drum answered the California Tahoe Conservancy continues to spend funds on erosion control, sensitive property acquisition, drainage conveyance improvements, and wildlife habitat restoration. In addition, the California Department of Transportation invests significant appropriations for roadside erosion projects. Senator Raggio noted TRPA has identified $99 million in projects on the Nevada side of the lake and asked what California's improvement projects total. Ms. Drum said California's projects total approximately $190 million. Senator Raggio commented he supports the bill's concept, but if the state of California does not follow through with its projects then the projects carried out by Nevada may be of little value. Ms. Drum indicated the state of California has invested millions of dollars in these types of projects. The California Tahoe Conservancy was originally funded in the mid-1980s with a bond act of $88 million. Senator Raggio questioned what the state of California is doing with respect to future costs for TRPA. Ms. Drum answered the agency is presently attending budget hearings in California. She said the TRPA has been told by the California Legislature not to request more funding than what was received in previous years. Senator Raggio stressed: This is not going to be a one-way street. We are going to continue on the basis that was firmly agreed upon originally with the creation of the Tahoe Regional Planning Agency. Someone needs to send that message clearly. Our funding will diminish accordingly in order to keep the partnership agreement. Ms. Drum responded, "I understand that." She said California has invested significantly on their side of the basin in terms of capital investments. She related the agency hopes the increased emphasis on the partnership approach will prevent future conflicts. Senator Coffin inquired whether the agency will be putting together a campaign to help promote the passage of the bond issue. Ms. Drum responded there is a great deal of private sector and public interest in the bond issue, but as a public agency, TRPA will not be heavily involved in lobbying voters. She indicated the agency anticipates a wide variety of support from a number of interested parties. Mr. Hettrick interjected the California Tahoe Conservancy has budgeted $3 million per year for restoration projects and erosion control. He said there is significant expenditure on the part of California to carry out some erosion control projects. Senator Raggio asked if the California funding is specifically budgeted for erosion control and Mr. Hettrick answered, "Yes." Fred W. Welden, Chief Deputy Research Director, Research Division, Legislative Counsel Bureau, noted California's funding for the Tahoe Basin projects is provided by off-shore oil revenues and other environmentally dedicated sources. Ms. Drum related most of the projects will be funded with a combination of funds such as: bond funds, matching grants from the TRPA, mitigation fees funds, and local county funds. Ms. Wilcox commented, under the terms of the 1986 Tahoe Bond Act, funding could not be made available to the Nevada Department of Transportation and many of the projects dealt with highway rights-of-way. She said A.B. 13 remedies this situation by also making funds available to the Nevada Department of Transportation. In response to Senator Raggio's question regarding private property rights, Ms. Wilcox stated she does not foresee this measure having any impact on private property rights. In fact, she said it is important to continue with the proposed projects to allow TRPA to continue to obtain the thresholds the agency is required to attain. She stressed the projects will enhance local property rights in the basin. Senator Raggio asked what effect the $20 million bond issuance would have on the state's bond rating if all the bond projects recommended by the Governor are approved. Mr. Comeaux replied, based on the Budget Division's discussions with the rating agencies, Nevada can issue bonds up to $100 million without affecting the bond rating. Presently, the bond projects recommended by the Governor total approximately $78 million. The additional $20 million bond project will put the state at its maximum bonding level. Rochelle Nason, Executive Director, League to Save Lake Tahoe, urged the committee to give the voters the opportunity to vote on the measure. She related a unified group of environmental interests, economic interests, and property rights' interests are prepared to promote this measure throughout the state. On the subject of property rights, she mentioned the Tahoe Sierra Preservation Council which is a local property rights organization supports A.B. 13. Roderick Mier, District Manager, Nevada Tahoe Conservation District, stated the conservation district was instrumental in selecting and directing projects for the 1986 bond act and will provide the same service for the new bond act if it is passed. The federal government provides the organization with a number of services to help in determining which projects should be undertaken and how they should be carried out. Senator Raggio closed the hearing on A.B. 13 and noted the committee will hear a bill draft request proposed by the Museum, Arts, and Library Foundation. I.R. Ashelman, Representative, Museum, Arts, and Library Foundation, requested a bill draft for $300,000 in funds which would be matched by private donations for a permanent endowment. The endowment would be modeled after the Judicial College and the National College of Juvenile and Family Law. Senator Raggio stated it is his understanding the foundation is requesting a $300,000 appropriation which will be made in a form of an endowment, but the funds will remain available to the state if needed. Mr. Ashelman noted the foundation is aware the funds can be recalled by the state. SENATOR RHOADS MOVED TO AUTHORIZE A BILL DRAFT REQUEST. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio opened the hearing on Assembly Bill (A.B.) 34. ASSEMBLY BILL 34: Makes appropriation to budget division of department of administration to reimburse legal division of legislative counsel bureau for expenses involved in preparing bill drafts requested by state agencies. Lorne J. Malkiewich, Director, Legislative Counsel Bureau (LCB), noted bill drafters log in the amount of time spent on drafting legislation and the state agencies are billed accordingly. The legal division is paid for its bill drafting services from this appropriation. He said the $125,000 appropriation is an estimate and does not include overhead expenses. Senator Raggio questioned if the appropriation was included in the Executive Budget. Mr. Malkiewich responded, "Yes it is." Senator Raggio closed the hearing on A.B. 34 and opened the hearing on Senate Bill (S.B.) 135 and Senate Bill (S.B.) 136. SENATE BILL 135: Makes appropriation to legislative fund for additional equipment and software for information systems for the legislative counsel bureau. SENATE BILL 136: Makes appropriation to legislative fund for computer equipment and software to allow interaction with legislature through INTERNET. Mr. Malkiewich distributed four handouts (Exhibit K - S.B. 135, Future Needs For LCB Legislative Processing; Exhibit L - S.B. 136, Legislative Access to the Internet and Public Access to the Legislature; Exhibit M - Hardware/software Purchase Chart; Exhibit N - Internet Catalog) to the committee. These handouts provide information regarding the two appropriation requests. He indicated S.B. 135 is an appropriation of $1,291,420 and relates to 15 separate projects which are detailed in Exhibit K. He stated the two bills were submitted to the subcommittee on Computer Applications and Legislative Process and recommended for bill drafting by the subcommittee and the Legislative Commission. At the end of March, many of the legislators received a wireless computer demonstration and in response to the demonstration a revision to S.B. 135 has been proposed. Fred Dugger, Manager, Information Services, Legislative Counsel Bureau, noted the proposed changes would involve expanding the scope of a "Request For Proposal" (RFP) process to include a separate RFP for a wireless network component and another RFP to replace a majority of the system's software. He said the application software for the legislature has not been replaced in 10 years and is expensive to maintain. The LCB would like to upgrade the software in order to provide more direct support, communication capabilities, and interaction with the legislators and their secretaries. He related the second component of the wireless network will cost $750,000. This amount will cover wireless computers for each legislator and support software to enable the computers to interact with network information. A legislator will be able to obtain all bill texts, make personal notes, examine and investigate current NELIS system, access electronic mail, and schedule meetings from their laptop computers. Mr. Dugger said a questionnaire was submitted to all the legislators regarding the wireless demonstration and there was a 100 percent positive response to the proposed system. Mr. Malkiewich explained the original proposal was for a RFP to update the present system, but the revision breaks the RFP into two components: wireless system for the 1997 Legislative Session and continuance of system examination for replacement. He noted all computerization purchases up until now have been for the benefit of the LCB staff and nothing has been done which will directly benefit and increase the efficiency of the legislators. Senator Raggio asked if this system is approved would it be outdated by the time it is on-line in 1997. Mr. Dugger replied computer technology is rapidly changing, but the infrastructure of the wireless such as receivers, aerials and wiring system can be utilized for a number of years. The purchase of the laptop computers will not occur for another 14 months. Delaying the equipment purchase for 14 months will ensure the technology is up-to-date and costs are reasonable. Senator Raggio questioned whether the expenditure is justified for a biennial Legislature. Mr. Dugger explained the portable laptop can take the place of an office. The laptop will allow a legislator to tap into the legislative system and retrieve a variety of information. Senator O'Donnell interjected, over the last two sessions, the Legislature has attempted to decrease the amount of funding it provides for data processing equipment. He stated data processing advances are continually being made and the Legislature will be "woefully" behind, if current technology is not maintained. The senator pointed out the requested funding is far below other funding requests from other branches of government. He stressed it is imperative to provide the funding requested in S.B. 135 and S.B. 136 in order to remain current with today's technology. Senator Rawson inquired if a legislator can use the laptop between sessions to carry on legislative business. Mr. Dugger replied the laptop computer will be checked out to a legislator and remain with that individual during their term. He said a legislator will be able to access the LCB system through various established access points. Currently, the LCB staff has an electronic mail system allowing them to interchange documents and information. This function is not presently available to legislators, but the proposed system will have this capability even in a remote location. The laptop computer will have the following capability: sending and receiving facsimiles, word processing, and spreadsheets. Senator Rawson related the interim study committees have complicated agendas and budgets which can be programmed into the laptop computers. In addition, the information necessary to carry out the Interim Finance Committee meetings can be downloaded into the computer. He voiced his support for the proposal. Senator Rhoads asked if the rural legislators will have the same program access as the legislators from larger counties. Mr. Dugger responded there will be an 800 number which will allow all legislators the same informational capabilities. Senator Rhoads questioned what the cost will be for the laptop computers. Mr. Dugger answered the laptops cost approximately $7,000 apiece. He explained that estimate is for hardware only and does not include costs for software and specialized adaptors. The laptops under consideration have touch screen applications which are more convenient for users who are not computer literate. The hardware costs will decrease if these types of laptops are not selected. Senator Rhoads inquired when the laptops would be available for use. Mr. Malkiewich replied the RFP could be done by next fall and laptops could be available sometime in July of 1996. Senator Coffin commented, during recent discussions on the discontinuance of the February legislative recess, Senator O'Donnell made reference to S.B. 135 and S.B. 136 as having the capability to broadcast live committee meetings to Las Vegas. Senator O'Donnell responded S.B. 136 allows the legislature to connect with the Internet. The Internet is used for information transfer and the Legislature will hook-up to the University of Nevada, Reno which will allow the transmittal of pictures and images to the Las Vegas area. Senator Coffin asked if the system allows for a live transmission. Senator O'Donnell answered the system's technology and the Internet will allow for live transmissions. Senator Coffin commented the two bills do not include computer hardware capable of a live transmission. Senator O'Donnell replied an RFP must be completed before determining the need for more hardware. Senator Raggio asked if the revised amount of $1,730,000 will purchase all the necessary equipment to accomplish the goals set out by the LCB. Senator O'Donnell answered, "Yes sir, it does." Mr. Dugger stated the Internet has the capability to provide slow motion video transmission. If constituents have the same computing capability, they will be able to receive and provide video transmission over the Internet. Senator Coffin questioned if the system has the capability of connecting to local cable systems in order to broadcast meetings into homes or offices. Mr. Dugger said S.B. 136 allows for the purchase of equipment which will allow interaction through Internet. The proposed system will initially participate in the University of Nevada Systems Computing Center network which has some videoconferencing capability; however, the budget does not allow for the expense of transmitting signals to cable companies. Senator Rawson interjected, with the proper equipment, a broadcasting company could telecast a live meeting. Senator O'Donnell stated the proposed system should be implemented in a "planned, slow, methodical method." Lonnie Hammargren, M.D., Lieutenant Governor, said he supports Senator O'Donnell's suggestion to implement the system in small incremental steps. He commented his office in Las Vegas is capable of videoconferencing over regular telephone lines. Mr. Dugger referred the committee to page 4 of Exhibit J, and noted $300,000 was deleted from the original request in order to facilitate the inclusion of the laptop computers. He indicated $90,000 of the $300,000 was to be used to purchase sound cards, speakers, video cards and cameras which would have enabled the system to participate in videoconferencing over regular telephone lines. Mr. Malkiewich explained the appropriation is being requested as a lump sum in order to have some flexibility with equipment purchases due to the rapid changes in technology. Senator Raggio stated if there are any changes in choice of equipment, then LCB will need to approach the IFC for approval. Senator Jacobsen questioned whether there is adequate space in the legislative building for the additional equipment. Mr. Dugger related much of the equipment in the request is very small and will be utilized with existing computer space. Senator Jacobsen inquired as to why the older computer equipment will be kept for backup. Mr. Dugger explained the backup equipment will be kept in case of software failure. Furthermore, the older equipment must be kept in order to retrieve archival information. Senator Jacobsen asked if the legislative building is expanded, should there be additional space included for computer applications. Mr. Dugger replied it is critical to establish a fully functional training area to train staff and legislators on computer applications. Mr. Malkiewich commented the ability to present information on the Internet will help with public access and public records' issues. Senator Jacobsen related the new computer system at the State Industrial Insurance System has the capability to transmit images of a worker's injury. The senator asked if the proposed system will also have this capability. Mr. Dugger responded the system will be able to transmit printed material and images over telephone lines. Senator Raggio closed the hearing on S.B. 135 and S.B. 136 and opened the hearing on Senate Bill (S.B.) 345. SENATE BILL 345: Combines commission on economic development with commission on tourism. Thomas G. Tait, Executive Director, Division of Tourism, Commission on Tourism, stated he supports S.B. 345. He said the concept to combine the two commissions was developed 4 years ago and meetings were held to discuss the matter. It was determined through the meetings and discussions with the Governor that in order for economic diversification to be successful, tourism leadership must be involved and supportive. He pointed out the former Lieutenant Governor, Sue Wagner, fully supported the proposal and read a letter (Exhibit O) from Ms. Wagner outlining her reasons for supporting this measure. In addition, Mr. Tait distributed a packet of letters (Exhibit P) written by commissioners for the Commission on Tourism and the Commission on Economic Development indicating their support of the proposal. Senator Raggio questioned if there were any commissioners who objected to the proposal. Mr. Tait responded all the commissioners support the proposal except Commissioner Mike Sheppard who has raised some concerns regarding economic development for rural Nevada. He indicated there are ongoing discussions with the rural development authorities and with Commissioner Sheppard to ensure all their concerns are addressed. Mr. Tait stated: The commissioners believe strongly that for economic development and diversification, as well as the continued diversification of our tourism product to get a shot in the arm, a major thrust needs to be made. The shot in the arm will come from use of the strengths of both agencies operating as one. One publications division to manage all printed matter. One rural program's office to look at the spectrum of activities throughout rural Nevada. One industry and trade office to manage both domestic and international trade operations. One marketing office to oversee the development of a new image for the state, and then publicize that image. One media relations' office to coordinate all publicity and media tours in the state. One film division funded and managed by the same commission. The economies of scale and reduction of duplication are self-evident and the General Fund will be reduced by close to $400,000 over the biennium. Anytime there is change recommended, a number of constituencies may be concerned. This has been the case with the rural economic development authorities, who I believe felt that tourism would overshadow their efforts. We do not feel this is at all likely, but will be sensitive to this concern in development of a new department. Karen Baggett, Deputy Director, Division of Economic Development, Commission on Economic Development, stated the division supports the measure and recognizes there are two basic differences between the two commissions. The tourism commission is attempting to attract visitors to the state for a few days or a few weeks, while the economic development commission is endeavoring to attract companies which will become longtime Nevada corporate citizens. She indicated the proposal will have little effect on the larger development authorities, but the rural areas will be impacted more by the passage of S.B. 345. Many of the smaller development authorities depend on the state economic development commission for assistance in marketing and research. Senator Raggio asked what assurances can Mr. Tait or Ms. Baggett provide that the effort on the part of the rural counties will not be diminished. Mr. Tait replied the supporters of the bill maintain the efforts on behalf of rural Nevada will be enhanced by the measure and not diminished. Senator Raggio commented most of tourism's budget is geared towards advertising, with a certain amount designated for rural counties. The senator questioned what amount will be allocated for rural counties in the next biennium. Mr. Tait responded virtually all of the tourism commission's advertising is image advertising which depicts the cultural, historical, scenic, and recreational activities within the state. A new image campaign will be developed to address tourism concerns and take into consideration a new business development scheme. The staff and commissioners are fully prepared to go forward with a new image development campaign. The new image will not solely focus on tourism. Senator Raggio asked for assurance that the efforts with respect to economic development will not be diminished by the merger. In addition, the chairman questioned if the representatives from both commissions are prepared to look after the interests of tourism and economic development. Mr. Tait replied there is a commonality and synergy which already exists between the two agencies. He said some significant inroads can be made into the diversification of the state with this measure. Senator Raggio, referring to sections 2 and 3 of S.B. 345, questioned if the divisions mentioned are newly created divisions. Mr. Tait responded the divisions mentioned are newly created in name only because both tourism and economic development have rural programs and industry and trade relation programs. Senator Raggio asked if the new divisions will have new directors. Mr. Tait anwered, "Potentially, they would have a person within the division who would be considered the supervisor or chief of the division." Senator Raggio inquired if the merger will displace personnel from the two commissions. Mr. Tait replied, "No it does not, sir." Senator Raggio asked what role will the two directors of the present commissions perform if the merger proceeds. Mr. Tait responded there will only be one director if the merger occurs. The law requires the new commission to select an executive director. Senator Raggio questioned how the $400,000 reduction in General Funds will be achieved. Mr. Tait answered the film commission has been funded 75 percent by the Commission on Tourism will be assuming 100 percent of their funding for the next biennium. Twenty-five percent of the film commission's budget has traditionally been provided by the General Fund and the 25 percent will now revert back to the General Fund. In addition, funding for one of the executive director's positions will no longer be necessary. Senator Raggio noted Tim Carlson, Executive Director, Division of Tourism, Commission on Economic Development, was not present at the meeting and stated the committee would be interested in hearing his viewpoint on this matter. Mr. Tait explained Mr. Carlson had to attend a meeting in southern Nevada regarding the new usage of the Nevada Test Site. Lieutenant Governor Hammargren stated for the record he has no recommendation with regard to the merger. He would strongly support S.B. 345 if it included more funding and advancement for economic development. He pointed out the state is more dependent now on tourism than it was several years ago. The state needs to diversify its economy, but the state is losing ground in this area, remarked the lieutenant governor. He has sent a letter to both the commissions asking for clarification regarding the merger. The lieutenant governor stated the most important question posed to the commissioners was whether the commissioners would support tourism funds being allocated to economic development. He said the commissioners unanimously answered, no. The commissioners support the merger, but do not support the use of tourism funds for economic development unless the development is tourism related. Mr. Hammargren does not support the bill as written unless an additional source of revenue can be earmarked for economic development. Donald Logsaw, Executive Director, Business Council, Douglas County, stated the Business Council is opposed to S.B. 345. He said the goals of the two commissions are very dissimilar and should not be compared. Prior to working in his present position, Mr. Logsaw was employed by a company who transferred all its business operations from southern California to Nevada. The company chose Nevada for relocation because of Nevada's economic development package, its information package, and its open communication. He stated Nevada is successful in promoting tourism and recently has been successful in promoting economic development, but if the two commissions are combined, the state's diversification efforts will be damaged. Senator Raggio asked if the economic development programs throughout the state support the proposal. Mr. Logsaw replied he has not had contact with all the entities involved, but some of the northern programs are unclear on the specifics of the bill. Ms. Baggett noted the Nevada Development Authority (NDA) and the Economic Development Authority of Western Nevada (EDAWN) have not raised any serious concerns regarding the merger of the two commissions. Senator Raggio requested that the economic development authorities provide the committee with a letter acknowledging their support or nonsupport for S.B. 345. The senator noted the economic development authorities work in close cooperation with the state Commission on Economic Development and the committee needs to be aware of the positions taken by the various authorities on the proposed merger. Ms. Baggett replied she will provide the requested information to the committee. J.P. Smith, Representative, Nevada Resources, stated his firm is the state's first private economic development coordinator for the relocation of out-of-state firms. The firm works in conjunction with development authorities across the state to provide information on site selection and coordination of new-hire employees. He stressed his firm, as well as a number of the rural economic development authorities were not consulted about the proposed merger. Mr. Smith said his firm is against the bill as it is now written, because the funding for economic development will be concentrated in northern and southern Nevada which will diminish the ability of the rural development authorities to attract new businesses. Shirley Walker, Executive Director, Churchill Economic Development Authority, distributed a copy of her prepared text (Exhibit Q) to the committee and testified while referencing the document. She indicated she was speaking on behalf of the rural areas and noted the rural development authorities are not totally opposed to the merger of the two commissions; however, the rural development authorities are not comfortable with the bill in its present form. Ms. Walker distributed a list (Exhibit R) of questions which she feels needs to be addressed before the bill is passed. She stated the Commission on Tourism and the Commission on Economic Development have been doing an excellent job for the rural areas. She related the proliferation of gaming outside the state is threatening Nevada's well being and economic diversification must become a state priority. She said tourism marketing is quite different than the type of marketing which is applied to economic development. Ms. Walker stated, "If it is not broken, why are we fixing it. It seems to me it is working well now." She indicated the bill was written in haste and the rural authorities were never contacted for their input. Senator Raggio stated a copy of the questions (Exhibit R) submitted by Ms. Walker will be given to Mr. Tait for his response. Senator Jacobsen opined economic development has done nothing to support agriculture. Ms. Walker replied the rural development authorities work closely with the agricultural interests. Surveys sent out by the rural development authorities indicate many of the farmers are interested in economic development. John Sanderson, Chairman, Lyon County Economic Development Authority, stated Lyon County had an economic development committee before the development of the states's commission. He said the "rurals" are concerned about the passage of S.B. 345 because a large portion of their funding is provided by the Commission on Economic Development. He referred the committee to section 2(1) and noted the bill's language in this section does not mention rural grants for economic development. The rural granting process is an important funding source for the rural development authorities. He indicated he is seriously concerned about the effect the proposal will have on tourism and economic development in rural Nevada. Senator Raggio invited Mr. Sanderson to submit in writing any additional concerns of the Lyon County Development Authority. Ms. Walker suggested the merger of the two commissions should be examined by an interim study committee or a subcommittee, so the subject can be investigated more thoroughly and more input can be provided. Mr. Tait pointed out the language in section 2 of the bill is not associated with grants provided to the rural development authorities for administrative and operational funds. He said the existing law remains the same regarding operational grants. Sentor Raggio requested Mr. Tait to provide the committee with a written overview of S.B. 345. Senator Mathews questioned if the proposed merger is modeled after a program from another state. Mr. Tait replied, "No." Senator Raggio, referred to page 10 of S.B. 345 and asked why the language in the bill has been changed to allow editorial comments at the discretion of the editor of the Nevada Magazine. Mr. Tait responded the language allows the editor of the magazine to produce a business journal on an annual basis. Senator Raggio questioned why the proposed language is necessary. Mr. Tait answered the language is not necessary, but was placed in the bill for emphasis purposes only. Senator O'Donnell asked whether political comments will be allowed in the editorial comment section. Mr. Tait replied, "I can't imagine the Nevada Magazine ever being used as a political forum. . .the editorial staff and the board that oversees the magazine would never allow that to happen." The additional language only allows the magazine editor to expand the premise of the Nevada Magazine on a monthly or yearly basis. Senator Raggio noted the hearing on S.B. 345 will be rescheduled in order to allow Mr. Tait time to respond to the number of questions posed at today's meeting. Terry Williams, Executive Director, Tri-County Development Authority, distributed a Resolution (Exhibit S) endorsed by the Tri-County Development Authority Board of Directors. Ms. Williams related the Tri-County Development Authority represents the counties of Lander, Humboldt, and Pershing. The board members take exception to language in the bill which changes economic development to a division of marketing. She said this philosophy is very narrow and the "guerilla marketing techniques" used to market tourism are not appropriate for marketing economic development. Senator Raggio closed the hearing on S.B. 345. Children and Family Administration - Page 1273 Larry L. Peri, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, distributed a Budget Closing Action list (Exhibit T) to the committee. Mr. Peri, referring to pages 3 and 4 of the closing list, noted the Base Budget contains a number of adjustments, including the revised amounts for State Cost Allocation and Attorney General Cost Allocation. In addition, there is an increase in Title XX block grant funding to equal the transfers out of the Purchase of Social Services account. He related the most noteworthy revision pertains to court-ordered support payments on behalf of youths committed to state training center facilities and parole programs. Judges, at their discretion, may order parents or legal guardians of a youth committed to a training center to pay a portion of their support costs. In order to credit the budget with the court-ordered support payments, Nevada Revised Statutes (NRS) 210.180 and 210.580 need to be amended, as these two statutes require the collections to be deposited to the General Fund by the superintendents of the Training Centers. Mr. Peri said the agency is in agreement with the change and a memorandum is provided on pages 5-7 of Exhibit T from the division's administrator, John Sarb. Mr. Peri stated a Letter of Intent has been recommended which would require the division to report quarterly to the Interim Finance Committee (IFC) on the progress of returning children to Nevada from out-of-state placement. SENATOR JACOBSEN MOVED TO ENDORSE A LETTER OF INTENT TO THE DIVISION OF CHILD AND FAMILY SERVICES REQUIRING THE DIVISION TO REPORT QUARTERLY TO THE INTERIM FINANCE COMMITTEE ON THE PROGRESS OF THE OUT-OF-STATE CHILD PLACEMENTS. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 AS LISTED ON PAGES 1-3 OF EXHIBIT T. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Youth Community Services - Page 1287 Mr. Peri explained the Title XX Social Services Block Grant has been increased to equal amounts for transfer out of the Purchase of Social Services budget. Additionally, there are increases in Federal Child Welfare IV-E revenue of $197,803 in Fiscal Year (FY) 1996 and $146,927 in FY 1997 which will decrease the General Fund. He related the NRS 395 Placement Program has been recommended to be returned to the State Department of Education. The budget indicates the necessary adjustments which have been made to accommodate the transfer. Budget category M200 has been adjusted due to projected increased savings from returning out-of-state placements by utilizing the average daily costs shown in the budget's performance indicators of $220.50 in FY 1996 and $232.00 in FY 1997 compared to the $220.00 per day used in the Executive Budget. Mr. Peri noted the most significant action taken by the joint subcommittee was the creation of a separate budget category for Medical Payments from the Welfare Division's Medicaid budget made on behalf of children covered by this budget account. The isolation of the medical costs will allow the IFC to conduct more in-depth reviews regarding the need for additional funding. Mr. Peri said another option the committee may wish to consider is returning all Title XIX Medicaid expenditure authority back to the Welfare Division. In 1993, the Executive Budget took the funds out of Medicaid and placed them into individual agencies. The suggestion to transfer the funds back to the Welfare Division was made because in some instances when the total allowable expenditure authority for Medicaid was not needed, the General Fund portion, which was dedicated as a Medicaid match, was spent for other purposes. Placing the expenditure authority back with the Welfare Division would eliminate this potential abuse. Senator Rawson noted the joint subcommittee closed the budget with the recommendation that a separate category be created for Medical Payments expenditures. He recommended the budget should be closed in accordance with the subcommittee's recommendation. Senator Raggio asked if the second option had been discussed. Senator Rawson replied, "Unless the fiscal staff feels strongly about that action we will probably not go to that option." Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated the joint subcommittee considered both options and determined it would be easier to implement the first option of creating a separate expenditure category for the children's division within the Welfare Division's Medicaid budget. The first option provides the needed accounting controls, because if the Medical Payments category experiences a shortfall, the Welfare Division will be required to approach the IFC. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 AS LISTED ON PAGES 16-18 OF EXHIBIT T. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Victims of Domestic Violence - Page 1295 SENATOR RAWSON MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Child Abuse and Neglect - Page 1297 Mr. Peri noted the budget has been revised to accommodate some minor technical adjustments in group insurance savings and the deletion of the Attorney General Cost Allocation. It is also proposed the funding for the restoration of a Nurse Case Manager position be adjusted from General Fund support to Federal IV-A revenue. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 AS LISTED ON PAGE 20 OF EXHIBIT T. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Child Welfare Trust - Page 1301 Mr. Peri stated a technical adjustment has been made to the budget because it did not contain a decision unit which would allow a funding transfer to the Youth Community Services budget account. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 AS LISTED ON PAGE 21 OF EXHIBIT T. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Children's Trust Account - Page 1303 SENATOR RAWSON MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Northern Nevada Child & Adolescent Services - Page 1305 Southern Nevada Child & Adolescent Services - Page 1313 Mr. Peri explained the Contract Psychiatric Services for back-up and on-call services has been reduced from $30,868 per year to $9,810 per year. He noted the joint subcommittee discussed the continuation of the Project Crisis Program in FY 1997, but did not have all the necessary information to close the budget. Mr. Peri related he has collected the information and referred the committee to pages 24-28 of Exhibit T and pointed out the program's funding source and costs. He said the funding source for the program will terminate on September 30, 1996. The division has requested General Fund support to continue the program for the remaining 9 months of FY 1997; however, the Executive Budget has not recommended the funding. The subcommittee considered continuing the program in the Northern Nevada Child and Adolescent Services and the Southern Nevada Child and Adolescent Services. Mr. Peri noted the agency's request sought not only to continue the program, but to enhance it. Referring to page 30 of Exhibit T, he provided a detailed explanation of the proposed program enhancements. The costs to continue the program for the remaining 9 months of FY 1997 for the Northern Nevada Child and Adolescent budget is $97,217 and $120,333 for the Southern Nevada Child and Adolescent budget. Mr. Peri commented the committee has two options to consider regarding the continuation of the program. The program could be continued at the same level of funding or with the proposed enhancements. The agency has agreed to fund the program with 50 percent of the funds coming from the General Fund and 50 percent from Title IV-A federal funds. Senator Raggio asked if Title IV-A federal funding will be available for the program. Mr. Peri replied the program can earn the Title IV-A funds by providing services to the children. Senator Raggio noted the joint subcommittee has an interest in continuing the program, but did not indicate an interest in enhancing the program at this time. Mr. Peri said the fiscal staff recommended the continuation of the program as it currently exists, with the funding divided between federal and state funds. SENATOR RAWSON MOVED TO CLOSE THE ABOVE-REFERENCED BUDGETS AS RECOMMENDED ON PAGES 23-34 OF EXHIBIT T WITH THE UNDERSTANDING THE PROJECT CRISIS PROGRAM WILL BE FUNDED AT EXISTING LEVELS. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio recessed the committee meeting at 10:55 a.m. The chairman reconvened the meeting at 12:35 p.m. and stated Bill Draft Request (BDR) S-2010 is before the committee for introduction. BILL DRAFT REQUEST S-2010: Makes appropriation to state public works board for program of capital improvements for office of the military. SENATOR O'DONNELL MOVED FOR COMMITTEE INTRODUCTION OF BDR S-2010. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Child Care Services - Page 1323 Mr. Peri noted postage funding has been increased and decision unit M200 provides In-State Travel, operating and equipment costs for the two new positions of Child Development Surveyor and Social Worker II. SENATOR COFFIN MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS LISTED ON PAGE 35 OF EXHIBIT T. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Youth Corrections Services - Page 1327 Mr. Peri explained detention fees paid to the counties from the operating category are being removed and a separate expenditure category is being created for a more precise accounting of expenditures. He stated the joint subcommittee did not have the opportunity to address the Special Salary Adjustment Reduction indicated on page 36 of Exhibit T, because the expense adjustment was not made until April 25, 1995. Mr. Peri related he discovered an existing position with a special salary adjustment in the account which needed to be removed. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 AND IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 36 OF EXHIBIT T. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) * * * * * Youth Alternative Placement - Page 1331 Mr. Peri stated an additional $20,000 in funding for each year of the biennium was recommended to continue the China Springs Youth Camp summer school program. The $20,000 in funding will be split between the General Fund and the counties utilizing the facility. It is estimated $7,366 a year will be provided by the General Fund and $12,634 a year by participating counties. SENATOR JACOBSEN MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 AND AS LISTED ON PAGE 37 OF EXHIBIT T. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Probation Subsidies - Page 1335 SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Nevada Youth Training Center - Page 1337 Mr. Peri noted there are two items of significance in the closing recommendations for the budget. The first item, the Juvenile Boot Camp recommended by the Governor, has been removed. During the joint subcommittee meeting, the committee was informed the Governor had requested the recommendation be withdrawn until additional information could be obtained regarding the availability of federal funds. The Governor, as of yesterday, has requested an additional 7 to 10 days to submit a proposal on the Juvenile Boot Camp, remarked Mr. Peri. The joint subcommittee agreed to review the proposal, but the budget was closed as recommended. Senator Raggio stated the joint subcommittee discussed the potential of returning some of the out-of-state serious offenders and utilizing the Rite of Passage program to accommodate the returnees. The senator also indicated a Principal Psychologist position was added to the budget by the joint subcommittee. SENATOR RHOADS MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 AS LISTED ON PAGE 45 OF EXHIBIT T. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Farm Account - Youth Training Center - Page 1341 SENATOR COFFIN MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Chapter I & II Education Program - Page 1343 SENATOR COFFIN MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Caliente Youth Center - Page 1347 Mr. Peri indicated there are several small increases in the budget. The Base Budget corrects Retirement Fringe Benefits and provides for increased utility costs and inflation. The joint subcommittee added an Administrative Aide position which was deleted during the 1991-1993 biennium and a Maintenance Repair Specialist I position. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 AND IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 50 OF EXHIBIT S. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Chapter I - Special Education Project - Page 1353 SENATOR RHOADS MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * There being no further business before the committee, Senator Raggio adjourned the meeting at 12:45 p.m. RESPECTFULLY SUBMITTED: Pamela Jochim, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance April 26, 1995 Page