MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session May 29, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Monday, May 29, 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 Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews COMMITTEE MEMBERS ABSENT: Senator Lawrence E. Jacobsen (Excused) GUEST LEGISLATORS PRESENT: Senator Ernest E. Adler, Capital Senatorial District STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Brian Burke, Program Analyst Jeanne Botts, Program Analyst Steve Abba, Program Analyst Cristin Buchanan, Committee Secretary OTHERS PRESENT: R. Michael Turnipseed, P.E., State Engineer, Division of Water Resources, Department of Conservation and Natural Resources Glen Adair, Principal, Carson City High School Keith Rheault, Ph.D., Deputy Superintendent for Instructional, Research and Evaluative Services, State Department of Education Nat Lommori, Superintendent, Lyon County School District Carlos E. Brandenburg, Ph.D., Acting Administrator, Mental Hygiene and Mental Retardation Division, Department of Human Resources Donald J. Mello, Court Administrator and Director, Office of Court Administrator, Supreme Court Jan Llewelyn-Davidson, Court Administrator, North Las Vegas Municipal Court David R. Gamble, Judge, Ninth Judicial District George M. Weeks, III, Assistant Director, Fiscal and Support Services, Department of Prisons Anne B. Cathcart, Senior Deputy Attorney General, Litigation Division, Office of the Attorney General Larry Stout, Assistant Chief, Bureau of Enforcement, Registration Division, Department of Motor Vehicles and Public Safety G. Paul Corbin, Chief, Nevada Highway Patrol Division, Department of Motor Vehicles and Public Safety Nancy Howard, Lobbyist, Nevada League of Cities Ron W. Sparks, III, Director, Western Interstate Commission for Higher Education John P. Comeaux, Director, Department of Administration Opening the hearing on Senate Bill (S.B.) 93, Senator Raggio called for testimony in support of the bill. SENATE BILL 93: Makes various changes relating to titling and recording of water rights. R. Michael Turnipseed, P.E., State Engineer, Division of Water Resources, Department of Conservation and Natural Resources, stated the provisions contained in S.B. 93 are the recommendations of the interim study committee on water management and water allocation. Senator Raggio inquired as to any effect the bill will have on the Division of Water Resources budget. Mr. Turnipseed revealed the bill will increase the revenue to the division by approximately $50,000. Senator Raggio asked whether the water resources budget will need to be adjusted if the bill is processed. Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), responded in the negative, indicating the additional revenue will be deposited into the General Fund. Senator Rhoads noted the bill was originally heard in the Senate Committee on Natural Resources and is being heard in the finance committee since the bill contains additional revenue for the water resources division. Senator Coffin questioned whether the increased fee amount is sufficient to offset the amount of work involved. Mr. Turnipseed responded in the affirmative and stated that one of the purposes of this bill is to privatize the title work. He said the division's technicians perform the agency's title work, are qualified in surveying, and also conduct the division's groundwater and pumpage inventories, but they are not title experts. Senator Raggio closed the hearing on S.B. 93, and opened the hearing on Senate Bill (S.B.) 411. SENATE BILL 411: Establishes Northern Nevada Technical Preparation Center. Senator Ernest E. Adler, Capital Senatorial District, testified in support of S.B. 411, providing an overview of the purpose of the bill. He stated the technical preparation center will offer classes in conjunction with Carson City High School and Western Nevada Community College (WNCC), to provide technical training which cannot be obtained through other programs. Senator Adler distributed copies of the Northern Nevada Tech Prep Center Site Proposal study (Exhibit C), and commented on the findings and recommendations of the study. Glen Adair, Principal, Carson High School, emphasized the most expensive aspect of building schools is the technical and vocational programs. He suggested a technical center will enable schools to send to one location those students desiring to enroll in the special technical and vocational programs. Keith Rheault, Ph.D., Deputy Superintendent for Instructional, Research and Evaluative Services, State Department of Education, testified in support of S.B. 411, commenting on the success of similar programs in other states. Senator Raggio asked which building the bill designates as the site of the center. Mr. Adair directed Senator Raggio to page 16 of (Exhibit C), which exhibits the layout of the WNCC Stewart Center campus, where the technical center will be located should the bill be processed. Senator Raggio inquired whether the designated building is currently being utilized by the community college. Senator Adler indicated the building is currently occupied; however, the college will be "transitioning out...to the technical center up at the main campus." Senator Raggio queried as to the anticipated number of students who will enter into the program. Senator Adler estimated the initial number at approximately 250 students, primarily juniors and seniors. Senator Raggio asked whether the per pupil allocation from the distributive school account (DSA), for the technical center, will be deducted from the allocation normally given to the county from which the student originates. Jeanne Botts, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, responded in the affirmative, stating: "The $4,888 that is included in the bill...would be the amount allocated from the DSA for those pupils. Their home school district would not count them or receive money." Senator Raggio further inquired whether this would require additional appropriation over and above the amount presently contemplated by the budget for the distributive school account. Ms. Botts said she does not believe so. She explained the department of education, in the fiscal note, deducted the estimated per pupil amounts in the counties affected. Senator Raggio requested an explanation of the fiscal note. Ms. Botts stated the fiscal note is based upon the estimated 250 pupils, at $4,888 per pupil for a total cost of $1.22 million, to operate the center. She added there is potential for additional funding through federal funds or through Assembly Bill (A.B.) 303. ASSEMBLY BILL 303: Requires state board of education to adopt program to provide pupils with skills to make transition from school to work. Senator Raggio inquired as to the existence of additional federal funds other than the funding currently contemplated. Dr. Rheault replied provisions are included, with the funding currently received by the department, for the establishment of multi-district vocational centers as separate entities entitled to the same amount of funding received by a regular school district. If the school-to-work transition federal funds are received, the proposed technical center would therefore be eligible for funds from this source. Senator Raggio asked if the additional federal funding would be a reallocation of existing federal funds or would instead be in addition to federal funds already being received. Dr. Rheault answered the additional funds would be a reallocation of funds currently being received. Senator Raggio asked from what source the funding is to be obtained. Dr. Rheault stated the education department will reapportion the funding based upon the current formula used to allocate funds. Senator Raggio requested a work sheet illustrating the probable redistribution of the federal funding, should the technical preparation center be established. Senator Raggio asked if it is correct the board would be composed of five members and would represent each of the counties. Senator Adler affirmed this is correct. Seeking to further ascertain the funding situation, Senator Raggio asked if it is correct the total funding would be obtained from the redistribution of federal funding and a payment of $4,888 for each pupil in attendance at the time of the count (the first month of the school year). This was affirmed. The senator inquired whether any other funding, either direct or indirect, would be required. Senator Adler responded that since the budget must be constructed based on available money, additional funding is apparently not required. Senator Raggio further questioned the proponents of S.B. 411 regarding start-up costs that might be entailed in establishing the technical preparation center. Mr. Adair responded there would be some start-up costs. He explained that when the WNCC vacates the Stewart facilities, the equipment in place at the Stewart Center would be relocated to the technical center at the main campus; equipment for programs at the Northern Nevada Technical Preparation Center (NNTPC) would therefore need to be obtained in some manner. He said the proposed center would not be inexpensive in that the goal of the program is to address the needs of the high school students who lack the motivation to remain in a regular high school because they cannot take classes that are relevant to their particular interests and career goals. In order to accomplish this, there would be some initial equipment and supply start-up costs. Mr. Adair said he does not know the extent of the cost at this time. Senator Adler suggested these costs would probably not be incurred until Fiscal Year (FY) 1997 because WNCC will not vacate the Stewart facilities until then, and the equipment currently at Stewart could be utilized for the NNTPC programs in the meantime. Once the college has moved to the main campus location, equipment would need to be obtained for the technical preparation center and there would be start-up costs in this regard. Senator Raggio requested the start-up cost information be provided with the previously requested information so the Legislature will know the amount the state would actually be committing for this project. He asked if the school districts are committing any financial resources in connection with the center. Mr. Adair replied the Carson City School District (CCSD) would, as outlined in the bill, handle the financial services. In terms of supplying staff there might be some overlap, he stated, but the facility would primarily be required to retain its own faculty and would be responsible for its own budgets. Senator Raggio inquired as to the reason for the 1 percent reimbursement to the CCSD. Mr. Adair responded it is to be used to initially handle all of the monies that would be allocated from the distributive school fund, to disburse salary payments to the teachers and staff and to deal with the daily working operations of the center. Senator Raggio asked where the NNTPC students would live. Mr. Adair said initially it was anticipated the school would be a residential program to accommodate students attending from out of the area; but while this concept may be adopted later, initially the students would commute to the center. He elaborated the school would not be considered a comprehensive, competitive school in that it would not have athletic and sundry other programs that are available to the students at their regular school. Senator Raggio asked from which counties the students would be drawn. Mr. Adair answered the service area would be basically the same as WNCC currently supports: Storey, Lyon, Carson City, and Douglas counties. He said some students from other counties might be able to participate in a specific technical program if such an agreement were to be entered into. Senator Adler responded to Senator Raggio's query as to whether the students would be attending the center full time and commuting on a daily basis. He said this would be the situation initially, but he pointed out there are dormitories at the Stewart facility that could eventually be rehabilitated for use by the NNTPC program participants. Senator Raggio observed the program would primarily serve the Carson City area. Mr. Adair reiterated the service area would include Carson City, Douglas, Storey and Lyon counties. In further questioning on this issue, Senator Raggio asked what the CCSD is doing at present with respect to occupational education. Mr. Adair replied the school district is actively pursuing this area at one high school to the degree it can be financially supported. One of the inhibiting factors currently existing at the Carson High School is that the growth rate is so large the district cannot appropriate large spaces for vocational courses because of the need to accommodate standard classes. Mr. Adair further stated the district is currently supporting, at the high school, those courses that have traditionally existed, such as collision repair, auto body work, welding and photography. Senator Raggio asked if the situation is that the Carson High School does not have a separate occupational education program but does have courses of this type. Mr. Adair replied yes. He said these courses are incorporated in the standard curriculum. Some of these courses would be supplanted by offerings at the new technical center, should S.B. 411 be approved, which should be of a somewhat better quality and better equipped. Responding to Senator Raggio's query regarding the high school dropout rate in Carson City and Douglas County, Mr. Adair replied the dropout rate in Carson City is slightly over 6 percent and the rate in Douglas County is 5 to 5« percent. Senator Rhoads asked if it is correct the technical preparation center would operate in conjunction with the WNCC rather than in competition with it. Mr. Adler replied yes. He said the attempt is being made to establish a situation wherein students could take community college classes to encourage their transition from high school to community college, where they could obtain more advanced technical training. Senator Adler pointed out the bill contains no prohibition against students from any school district applying for attendance at the center. He added that he supports the concept of a dormitory system. It was noted Las Vegas has some very advanced technical preparation centers. Senator Rhoads remarked he has toured one of the centers in Las Vegas and was quite impressed with it. Senator Raggio inquired as to the significance of the language in the bill indicating the center is not a school district or a local government for any purpose. He stated his assumption the provision is intended to preclude participation in tax collections. Ms. Botts affirmed this and said it is her recollection the bill drafters also included the language to provide that the employees of the technical preparation center are not subject to the laws governing collective bargaining. Nat Lommori, Superintendent, Lyon County School District (LCSD), offered testimony in support of S.B. 411. He stated that in the LCSD there are five attendance areas, with the largest high school having a population of 500 students. He said it is therefore very difficult to add a comprehensive vocational program to meet the needs of students interested in various courses, such as electronics and auto-related classes. He noted in the Dayton corridor there is a large industrial park, a major development just outside the CCSD. Also, he continued, the Wade Corporation has a major industrial park in the Fernley area and has announced that 16,000 new jobs are expected to be developed by the year 2010. He said he has completed several demographic studies and has observed that all of the manufacturing firms involved are seeking trained personnel with specific skills that qualify them to be hired by the firms. Continuing, Mr. Lommori voiced the opinion a technical center such as the one proposed in S.B. 411 would be of great benefit to northern Nevada. He concurred with Senator Adler's comments that students outside the basic service area should be allowed to attend the technical center when the courses they are seeking are not available at their regular schools. Concluding his formal testimony, he asserted the proposal in this measure "is good for the economics of Nevada." Senator Raggio asked whether it would be feasible for the students in Lyon County to attend the technical preparation center. Mr. Lommori responded in the affirmative. He advocated converting facilities at the Stewart Center into residential quarters for technical center students traveling from well outside the area, who could attend classes at the center during the week and return home for the weekends. Senator Raggio posed the question of which program would receive the highest priority if a choice must be made between the proposal in S.B. 411 and the proposed expansion of the class-size reduction (CSR) program. After some deliberation, Mr. Lommori said CSR for third grade is probably a very important item and should be addressed, but if there is not adequate funding it would be desirable to at least retain the flexibility for the school districts that was recently proposed in a compromise plan on CSR. He indicated he could not respond further without consulting the school board. Senator Raggio addressed the question to Mr. Adair, who responded it is a difficult question to answer. He echoed Mr. Lommori's sentiments regarding the need for more flexibility. He expressed the opinion that support for both ends of the spectrum is important; but in terms of the needs of employers seeking qualified entry-level employees, their interests lie more with the high school students and their preparation for employment. Continuing, Mr. Adair stated that as a high school administrator he is keenly interested that students entering high school are well prepared, but he is also keenly interested that the high schools produce a well-educated, technically literate product. He asserted this is something that the proposed vocational center would facilitate. He remarked the answer to the question might not be a simple "yes" or "no." Senator Raggio said one reason he posed the question relates to a recent news item released by the Nevada Manufacturers' Association indicating manufacturers in this state are having to recruit young employees from out-of-state because the level of technical and vocational training received by Nevada youths is inadequate. Mr. Adair stated this report is correct. Senator Raggio stated it might be that because of the limited number of dollars, a choice must be made to allocate the available funding to one area or the other. Mr. Adair responded that while he understands the dilemma, Senator Raggio's comments are exactly correct. He said the school districts attempt to develop the business partnerships and are actively involved in determining the needs of the employers. When the school officials ask the employers what it is they are looking for (adequately trained and skilled candidates for employment), they receive the same response consistently, Mr. Adair stated. He expressed the opinion S.B. 411 is an effort to address the question of how to prepare students for employment. Senator Raggio said the essence of the newspaper article was that students graduating from out-of-state are being hired because they are better educated than students in Nevada. Senator Coffin commented he has visited technical centers and has examined the manuals the students are required to study and master to be able to learn the technical skills required to gain employment with manufacturers and other businesses. He said at the heart of the matter is, What skill is necessary to master these manuals and to absorb the information that will be thrown at them at the 10th, 11th and 12 grade level? He asserted the skill is reading, the development of which begins in the elementary grades. Mr. Lommori said after giving further thought to Senator Raggio's question, he believes this is a "chicken-and-egg" problem, and that is why the school districts are requesting flexibility. He said the school district is prepared to supply information, at the next hearing on this bill, on a reading recovery program the district would like to implement for the first grade. Mr. Lommori said it has been found that students who have not learned to read well in the first grade tend to lose self-esteem, become disruptive and are often referred to special education by about fifth grade. He noted that reading is a skill that "carries them all the way through." Continuing, Mr. Lommori said the reading recovery program was developed in New Zealand approximately 30 years ago and has been found to be effective in "getting young students on track and keeping them on track." He said it is probably one of the only such programs the district would recommend as effective. He indicated that having maximum flexibility at the first-grade level would assist the district in implementing the program. On the other end of the scale are the students who are leaving school, Mr. Lommori stated. These students require certain skills and the ability to earn a living with a decent wage and should not be denied the opportunity to gain employment because other students from out-of-state are being imported to take the Nevada jobs. Mr. Lommori stressed the importance of both the CSR expansion and the technical preparation center. Senator Coffin asked Mr. Lommori what level of reading skill is required to be a good student at the technical level. The superintendent replied the reading ability required is 9th or 10th grade level. Senator Coffin further questioned Mr. Lommori regarding the development of reading skills in the elementary grades. He pointed out the basic reading and comprehension skills are formed in the early grades. Mr. Lommori concurred. He said many studies have shown that if students are successful in the primary grades, there is less likelihood they will later become high school dropouts. Senator Raggio asked what jurisdiction the superintendent of public instruction will have other than merely allocating the DSA funds. Dr. Rheault responded it would be governed separately by one member from each of the five school boards. The senator asked if it is a concern that under the proposal neither the superintendent of public instruction nor the State Board of Education would have authority of any kind. Dr. Rheault said his understanding in reading the bill is that the superintendent of public instruction would have some input, since the State Department of Education administers the apportionment of the funding to the CCSD. In further discussion on this issue, Senator Raggio said there appears to be no reference to authority over curriculum in the bill. Senator Adler said the standard curriculum law should apply. Senator Raggio said the only applicable provision appears to be in the language in section 3 which states that the board of trustees of the NNTPC shall establish the courses of study as approved by the State Board for Occupational Education. The hearing on S.B. 411 was closed, and the hearing on S.B. 476 was opened. SENATE BILL 476: Revises provisions governing allocation of money from community training center account. Senator Raggio noted this bill was part of the recommendation of the Joint Subcommittee on Human Resources/K-12. Carlos Brandenburg, Ph.D., Acting Administrator, Mental Hygiene and Mental Retardation Division, testified in support of S.B. 476. He said the bill repeals Nevada Revised Statutes (NRS) 435.209, section 3, eliminating the provision to disburse unused funds at the end of the fiscal year. He said if this legislation is not passed, the division will continue to pay out any remaining unused funds at the end of the fiscal year as a bonus to the community training centers (CTC's); but if S.B. 476 does pass, CTC's will only be paid for the services rendered for eligible clients. Senator Raggio invited comment from the joint subcommittee members with regard to their reason for recommending this legislation. Bob Guernsey, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated that in closing the budgets for the CTC's, the joint subcommittee, Senate Committee on Finance and Assembly Committee on Ways and Means made significant augmentations to the CTC budgets, which are paid from four separate budget accounts. The feeling was that this resolves the problem of the waiting list and addresses an inequity that had developed over a number of years due to the various rates that are paid according to the level of service provided by the CTC's. As a result, the committees felt the additional year-end bonus would no longer be necessary, and the state would be paying for services which were actually rendered and received by the various clients. He said the CTC's have indicated they would not oppose repealing this section in law if the joint subcommittee approves the additional budget augmentations. Senator Raggio voiced the belief there is some disincentive on the part of the Legislature to attempt full funding of these programs given the knowledge of additional revenue that would otherwise revert (to the General Fund). Dr. Brandenburg agreed. Senator Rawson concurred with the rationale for this bill. Senator Raggio closed the hearing on S.B. 476, and opened the hearing on S.B. 495. SENATE BILL 495: Makes various changes to provisions governing collection of fines and assessments. Senator Raggio noted this bill was requested by the Senate Committee on Finance based on information provided by the court administrator. Donald J. Mello, Court Administrator and Director, Office of Court Administrator, Supreme Court, testified S.B. 495 is the result of the court administrator's input to the Legislature following the legislative auditor's review of the judicial system's collection of fines and assessments. Mr. Mello reviewed a number of proposed amendments to S.B. 495, outlined in Exhibit D. Regarding the proposed amendments to section 4 (page 1, Exhibit D), Mr. Mello voiced support for the proposal by Jan Davidson to change the assessment to a flat rate of $25. Senator Raggio requested discussion on Ms. Davidson's proposed amendment (Exhibit E), the effect of which would be to amend NRS 176.059 to provide for a fixed fee of $25. Jan Llewelyn-Davidson, Court Administrator, North Las Vegas Municipal Court, explained the proposed amendment referenced by Mr. Mello and Senator Raggio. She said with regard to the fiscal note (Exhibit F) and the fiscal impact analysis prepared by the Fiscal Analysis Division of the LCB (Exhibit G), under the $25 flat fee the state courts would receive $10, the executive branch would receive $9, the municipal and justice courts would receive $4 and the county treasurer for the family courts would receive $2. Senator Raggio called upon Brian Burke, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, to explain the fiscal impact of the proposed amendment. Mr. Burke reviewed the content of a memorandum dated May 25, 1995, Exhibit H). He explained he had applied the $25 flat fee to the number of assessments that were made in FY 1994, and what is shown in Exhibit F is the amount of revenue that would have been collected had the $25 flat fee been in place rather than the sliding scale methodology. He noted that approximately $1 million would have been collected using the $25 flat fee mechanism. Mr. Burke said an important point to consider is that the fiscal impact analysis assumes no change in collections as a result of changing to a flat $25 fee. He noted the courts have indicated that a significant number of their collections are $10 assessments. He said a question to be considered is whether changing the fee to $25 will affect the collections coming in. The calculations presented in the fiscal impact analysis are based on averages, Mr. Burke said, and based on the averages an estimated $1 million in additional revenue would be collected. Continuing, Mr. Burke said the state's share of the distribution, reflected on the lower half of the page (Exhibit F), shows the courts' allocation (the traditional 51 percent share) would increase by $241,000 in FY 1994. Under the proposed amendment, the category labeled "Repository Et Al. Allocation" (central data collection, Victims of Crime and two other entities) would lose $8,000 according to the FY 1994 formula. Mr. Burke explained this would result from the different method of allocating the assessment. Senator Raggio asked Mr. Mello for his evaluation of the proposed amendment. Mr. Mello replied he is in favor of the proposal, which would provide the courts with much needed revenue to continue their programs. Senator Raggio inquired, "What about the allocation that is proposed in the amendment? It [the amendment] changes the allocation, does it not?" Mr. Mello replied that it does, but it is fair and reasonable and meshes with the present allocation of 51 percent of revenue to the state courts. Senator Raggio recalled that when the assessment was initially imposed, a fixed fee was established. The sliding scale fee was implemented for several reasons, including the necessity to generate more revenue. At some point there was concern with regard to the judiciary that on low fines the assessment was becoming too high. The senator asked whether the proposal would alleviate that concern and further inquired whether there is also a concern that making the assessment a fixed fee of $25 would change the amount of the fine that would otherwise ordinarily be imposed. Ms. Davidson responded she has spoken with several judges regarding this issue because of the court administrators' concern, and the judges indicated this situation would not occur. She said the standard fine is from $35-$45 for traffic, which lends itself to a $10 administrative assessment fee. The courts' costs associated with processing tickets have increased, Ms. Davidson continued, and it costs the agency with which she is associated more than $18 to process a single ticket. Under the current system the court administrator keeps $2.50. With a flat fee, large administrative assessment fees will not be imposed in cases involving large fines. Currrently, the large assessment fees are so excessive, many of the people who receive the large fines opt to enter a work program, and the agency therefore never collects the large administrative fees. Continuing, Ms. Davidson testified that with S.B. 495, not only would the assessment fee be lowered to $25, which is reasonable, but the courts would collect the $25 even if the person filed chooses to participate in the work program because the fee is affordable. In this way the state still receives revenue from this source. Senator Raggio inquired if it is true that a significant proportion of the administrative assessments currently fall within the $10 category. Mr. Burke said from his discussions with the courts it is his understanding the proportion of assessments in this category is approximately 67 percent. The senator asked if it is realistic to expect the $25 fee will be collectible, if the $10 is not being collected. Ms. Davidson replied the courts are collecting the $10 and will be able to collect the $25 fee. She said people will pay the $25, but it is at the $50-$55 level of assessment that the courts lose the ability to collect the fees. Senator Rawson asked if Assembly Bill (A.B.) 182 will still be necessary (because of an anticipated shortfall in revenues for the Supreme Court), should S.B. 495 be approved. Mr. Mello replied yes. He said the measure addresses a problem for the current fiscal year. ASSEMBLY BILL 182: Makes supplemental appropriation to supreme court for anticipated shortfall in revenue from administrative assessments. Senator O'Donnell remarked the proposal in S.B. 495 is in line with and an adjunct to what the Senate Committee on Transportation is working on, in terms of having the Department of Motor Vehicles and Public Safety (DMV&PS) refuse to renew the registration of a driver who has an outstanding administrative assessment. He said to his knowledge there is concurrent language in the pertinent bills before the Senate Committee on Finance and the Senate Committee on Transportation. Continuing, Senator O'Donnell voiced approval of DMV&PS participation in enforcement and collection efforts, which currently is not provided by statute, with regard to the administrative assessment. He said the only known mechanism the state has to ensure the assessment is paid would appear to be the withholding of the privilege of driving a vehicle on Nevada's roads. The senator stated he is adamant about working toward that end. Senator Raggio asked Ms. Davidson and Mr. Mello if the agencies they represent both support the change in allocation to what is proposed in Scenario 2 (Exhibit H). They both responded in the affirmative. Senator Rawson asked if any objections to the proposal have been raised. Ms. Davidson replied no. She said the Nevada Judges Association proposed the flat fee and supports Scenario 2. Senator Raggio inquired whether those who have been reticent to effect collection agree with the proposed fixed assessment fee and whether it will help them in their collection efforts. Ms. Davidson replied it will help the court administrators. She said in her jurisdiction there are marshals who apprehend and arrest persons who do not pay their fines and administrative assessment fees, and having the DMV&PS involved in the enforcement area will be of tremendous assistance to the courts. Senator Raggio asked Ms. Davidson if the agency she represents is proposing any additional amendments. She said the only section for which an amendment is being requested is the one under discussion, in section 4 of S.B. 495. Senator Raggio requested Mr. Mello to briefly indicate other substantive changes the Office of Court Administrator is recommending. Mr. Mello reviewed the proposed amendments outlined in Exhibit D. Regarding the suggested amendment to section 4 to add enabling language for collection and distribution of administrative fees, Senator Raggio asked who would have final authority on the regulations that are proposed. Mr. Mello replied his actions are subject to approval of the Supreme Court. Concerning the proposed amendment to section 8, Mr. Mello said it is recommended that any language used in this section be taken from S.B. 392 to avoid a possible conflict between S.B. 495 and S.B. 392. SENATE BILL 392: Makes various changes to provisions governing deductions from wages earned or money received by offenders, accounting of money of offenders and transportation of offenders to court. Ms. Davidson suggested the language in section 8 should be amended to replace the term "judgment" with "judgment or conviction" because many municipal courts do not enter judgments. Senator Raggio called upon George M. Weeks, Assistant Director, Fiscal and Support Services, Department of Prisons, to elaborate on S.B. 392. Mr. Weeks said S.B. 392 contains a priority for the deduction from inmates' wages. As written, the language in S.B. 495 that conflicts with S.B. 392 would give collection of assessments priority over everything else, including payments for child support, the Victims of Crimes fund, the costs of incarceration, and the inmates' savings accounts. He said another significant aspect of this situation is that, based on a recent survey of inmates, 61 percent of the inmates had an average balance in their accounts of $1.31; 87.3 percent had less than $100, or an average account balance of $3.52. His point was that there is not a significant amount of money in the inmate accounts, and under the bill as written it would undoubtedly cost the Department of Prisons far more to collect the assessment portion of the inmates' earnings than would be received. Senator Raggio questioned whether retaining the provision would be a problem. Mr. Weeks said the provision would give priority to the collection of outstanding assessment fees over child support and other payments. Seeking clarification, Senator Raggio asked if it is Mr. Weeks' proposal that the Legislature address the issue of prioritization (in collections from inmates). Mr. Weeks replied yes. He said that is what S.B. 392 would accomplish. Resuming his testimony, Mr. Mello said David R. Gamble, Judge, Ninth District Court, has a concern about section 10. He said that section probably should be amended to refer to audits of the county clerk's records pertaining to the financial affairs of the district court, rather than audits of the district courts. Auditing the district courts would not accomplish the intended objectives because it is the county clerks who hold the financial records and have responsibility for financial transactions, Mr. Mello said. Senator Raggio inquired whether it is a financial audit that Mr. Mello is referring to. Mr. Mello replied affirmatively. He said the parameters of what is to be examined are clearly defined. The audit would include the system of financial internal controls and a reconciliation report concerning the accounts receivable. Senator Raggio asked Judge Gamble if he has any problem with the language in the bill in terms of the scope of the audit. Judge Gamble voiced concern the language in the bill may not adequately define the term "internal controls." He said if the term is intended to mean fines and assessments (and could not be construed to include performance auditing), that would satisfy his concern. Senator Raggio indicated the committee's interest is primarily in the financial audit. Judge Gamble replied he is concerned with the language in the bill (in terms of possible misinterpretation of the term "audit"). Seeking further clarification of the judge's concern, Senator Raggio asked if what is being suggested is that the bill clearly specifies the audit, as it applies to district and justice courts, is a financial audit. Judge Gamble responded yes. He said the problem he has with the legislation is more general than that, but it is section 10 that he is primarily concerned about. He explained that throughout several sections of the bill there are references to the court being responsible for certain functions, probably arising out of the legislative audit of the courts. He said this bill quite appropriately addresses the issue of court responsibility for collecting fines and assessments, but the problem is that at the district court level, historically it has been the county clerk who performs the work. Judge Gamble further stated that if directed to do so by the Legislature, the district courts will perform the function currently handled by the county clerk with respect to collecting fines and assessments. As the situation exists now, however, there are no internal controls in the district courts in terms of responsibility for collection of the fees because the responsibility resides with the county clerks, over whom the district courts have no control, the judge explained. Senator Raggio requested Mr. Mello to work with Judge Gamble and other parties involved to suggest appropriate language to address the concerns expressed by the judge. Mr. Mello agreed to do so and to provide the information later today. Senator Raggio inquired of Judge Gamble if he has other concerns. The judge replied, "It all basically surrounds that." He said the district and justice courts wish to be responsive to the legislative audit of the court system but do not have the power to make themselves responsive because they do not control the county clerks. He noted the bill also calls for an audit of a state office by a county commission, and he voiced the opinion this provision is inappropriate. He pointed out the district court is a state office. Judge Gamble indicated the problem would be resolved if it is specified the county clerk's office, and not the court, is to be audited. Senator Raggio said his understanding is that it would be the county clerk's office, in its capacity as ex-officio clerk of the court, that would be audited. He suggested the insertion of the appropriate language into the bill will address the concerns that have been presented. Judge Gamble agreed. Mr. Mello continued his review of the proposed amendments to S.B. 495 (Exhibit D). Regarding sections 14 through 29, he said the language from S.B. 441 should be used instead of the language in S.B. 495. He explained a substantial amount of work has gone into developing S.B. 441. SENATE BILL 441: Prohibits department of motor vehicles and public safety from renewing registration of motor vehicle if fines for certain traffic violations have not been paid. Senator Raggio inquired as to the significance of the differences in the language in the two bills. Mr. Mello replied the differences are widespread and difficult to quantify. He said the scope has been expanded substantially (in S.B. 441). The senator asked if it involves a limitation on the ability to re-register. Mr. Mello replied it does. Ms. Davidson stated the courts would like to ensure the provisions pertain to traffic violations as well as parking tickets. Mr. Mello responded that as currently written, S.B. 441 strictly pertains to parking tickets, but he has proposed amendments to the bill to expand the scope. Senator Raggio verified it will be necessary to "conform the language" in S.B. 495 and S.B. 441 (with regard to sections 14-29). Discussion ensued as to the manner in which the bills should be processed to achieve the necessary conformance. After Mr. Mello completed his review of the proposed amendments, Senator Raggio requested Mr. Burke to work with Mr. Mello on the suggested changes. He asked committee members if they wished to process S.B. 495 with the proposed changes. They indicated their assent. Senator Raggio invited further testimony on S.B. 495. Anne B. Cathcart, Senior Deputy Attorney General, Litigation Division, Office of the Attorney General, came forward to testify on behalf of the Department of Prisons. She testified that S.B. 392, the pending legislation that addresses fines and assessments from inmates, is currently in the Senate Committee on Judiciary. She said her office has worked extensively with Senator Ernie Adler on this measure, at the direction of Senator Mark James, to develop a means to cost effectively obtain deductions from inmate accounts. She offered her assistance in working out any problem areas. Larry Stout, Assistant Chief, Bureau of Enforcement, Registration Division, Department of Motor Vehicles and Public Safety, testified next. He said the Registration Division supports the provisions of this bill with regard to the department being directed to collect the assessment fees. He further testified the division also supports the recommendations to conform the language in this measure with the related language in S.B. 441 and to make July 1, 1996 the proposed effective date in section 38 of S.B. 495. Senator Raggio inquired whether that date is feasible for implementation of the provisions involving the DMV&PS. Mr. Stout replied yes. Commenting on remarks made by Mr. Stout, Senator O'Donnell said the DMV&PS will incur some cost associated with data processing, storage and the implementation of the applicable provisions of the bill. He said the costs must be recovered from the assessments that are received by the department. Senator Raggio asked where this provision appears in the legislation. Senator O'Donnell said it is in S.B. 441. He said the fiscal notes are being developed at this time. G. Paul Corbin, Chief, Nevada Highway Patrol Division, Department of Motor Vehicles and Public Safety, said the division supports the legislation but has several minor concerns. He said one of the concerns pertains to section 30 (page 19, lines 23-25), which provides for a change in the citations. Noting it will require some time to develop the new citations, he said the change in the effective date to July 1, 1996 will provide sufficient time to dispose of and replace the old citations and therefore addresses this particular concern. Additionally, Mr. Corbin testified, lines 44-47 on page 19 provide that "...the peace officer shall attach to the citation a preaddressed envelope...." He said it is hoped that each of the courts would be responsible for providing the preaddressed envelopes because of the cost involved. Ms. Davidson objected, stating the court she represents does not have the funds to accommodate this proposal. Mr. Corbin said there would be tremendous cost to the state in providing the preaddressed envelopes for the highway patrol division. Senator Raggio voiced the opinion it is logical, given the fact a preaddressed envelope must be provided for each court, to require the courts to provide the envelopes. There was discussion regarding the costs that might be incurred by the courts involving the purchase and printing of the preaddressed envelopes. Discussion ensued with respect to the date by which the new citations will be needed. Mr. Mello said his request is that the effective date for all of the provisions in the bill, except for those pertaining to the DMV&PS, will be October 1, 1995. The proposed effective date for the portions of the bill relating to the DMV&PS would be the later date (July 1, 1996). Senator Raggio instructed Mr. Burke to coordinate development of the appropriate amendments discussed in this hearing. Nancy Howard, Lobbyist, Nevada League of Cities (NLC), testified this organization is the sponsor of S.B. 441. She offered the league's assistance in resolving any conflicts between S.B. 441 and S.B. 495. Senator Raggio asked Ms. Howard if she objects to any of the suggested changes to S.B. 441. She replied no. The hearing on S.B. 495 was closed, and the hearing on A.B. 182 was opened next at the request of Mr. Mello. ASSEMBLY BILL 182: Makes supplemental appropriation to supreme court for anticipated shortfall in revenue from administrative assessments. Mr. Mello testified that in conjunction with the Assembly Committee on Ways and Means, a method has been devised by which there would be a transfer of surplus funds in the Judicial Education and the Retired Justices Duty accounts. A supplemental appropriation from the General Fund of $25,428 is being requested in A.B. 182. Mr. Mello said it is entirely possible this amount will not be needed, and if that is the case the funds will be reverted to the General Fund. The court would rely on the administrative assessment fee transfers first to compensate for any shortfalls. Senator Raggio inquired whether other Supreme Court funds would suffer in any way as a result of A.B. 182. Mr. Mello answered no. The senator verified the amounts to be transferred from the other accounts would be $177,198 from the Judicial Education account and $71,000 from the other budget account. He asked whether it is intended that any portion of the unused funds will revert to the General Fund, noting such a provision does not appear in the bill. Mr. Mello acknowledged this has not been provided for, but said it is intended the administrative assessment fees would be used first. Senator Raggio called for an amendment to specifically provide for the reversion of unexpended funds. Senator Raggio asked the reason for the occurrence of the shortfall. Mr. Mello answered it was due to an overestimation of the revenues for the current fiscal year. The hearing on A.B. 182 was closed, and the hearing on A.B. 135 was opened. ASSEMBLY BILL 135: Revises provisions governing repayment of financial support received by students from Western Interstate Commission for Higher Education. Ron W. Sparks, III, Director, Western Interstate Commission for Higher Education (WICHE), testified in support of A.B. 135. He said the bill includes a provision authorizing the commission to delegate certain powers to the director of the commission and eliminates a provision which allows students to qualify for WICHE support by contributing a certain amount of money. Furthermore, this bill will allow for WICHE to receive funds, other than legislatively appropriated funds, for the purpose of providing additional slots. It also allows for the commission to place a rural practice requirement on the students who accept support in the physician assistant field. Finally, Mr. Sparks continued, a section has been added requiring students to carry a life insurance policy as a requirement for receiving WICHE funds. Noting it is the first reprint of A.B. 135 that is being heard, Senator Raggio requested Mr. Sparks to indicate any changes made from the original bill and whether or not the commission supports those changes. Mr. Sparks said the original bill called for a section to allow for the write-off of WICHE funds if a student were to die. The Assembly Committee on Ways and Means chose to remove this section and insert a requirement for term life insurance (in section 5 of the bill). This would be accomplished through regulation. Mr. Sparks commented the commission does not feel the provision is a necessary requirement. Since 1990, only $5,000, out of nearly $3 million collected, has been written off due to the death of a student. Mr. Sparks said the risk is minimal, and students should not be required to bear the cost of the insurance to qualify for WICHE support. Senator Rawson echoed Mr. Sparks' comments on this provision. He said for older students the costs of insurance could be quite prohibitive and limiting, and he recommended deleting the provision from the bill. Senator Raggio observed there might be students who would qualify for WICHE support, but who are uninsurable for one reason or another. Mr. Sparks agreed. He said the risk is virtually nonexistent at this time. However, he stated, in NRS 397.066 there is a provision authorizing the commission to place a life insurance requirement on the students, and this could be implemented at a later date if it is determined necessary. Senator Mathews suggested the possibility of having students bond themselves as a less expensive means of achieving the same desired effect. Senator Coffin pointed out that bonding merely provides that a person has sufficient assets to meet the proposed obligation, and since most students would not have sufficient assets to prove the bond this mechanism would not be a viable substitute for insurance. Senator Raggio requested that the committee return to discussion of the bill as a whole. He asked how section 2 would change the present law. Mr. Sparks responded this section defines what is meant by financial support. He noted this area has never been clearly defined, and section 2 is intended to address that oversight. Senator Raggio observed this proposal is a codification of the existing policy or statute. Senator Raggio inquired as to the purpose of the language in section 3. Mr. Sparks explained this section was included to enable the commission to more readily collect on stipends that are being converted. Currently, the collection process cannot be initiated until the students have completed their practice requirement period, and the delay can result in the loss of a substantial dollar amount. Section 3 would enable conversion of stipends to loans under certain circumstances, thereby facilitating collection of loan payments. Senator Raggio asked if it is correct that if a student does not conform to the conditions imposed, the stipend is converted to a loan. Mr. Sparks replied yes. The senator further inquired whether the proposal under discussion would substantially change the existing practice. Mr. Sparks said it would merely facilitate the ability to convert from stipends to loans much more quickly. In further questioning on section 3, Senator Raggio inquired whether the 8 percent interest rate and monthly installment payment provisions are new. Mr. Sparks answered no. Senator O'Donnell voiced concern regarding the 8 percent interest that is applied beginning on the first day of the academic term, and the compounding of the interest. He stated that while he has no objections to students obtaining the loans and then being required to repay them, it might be better to use a 30-year federal funds rate in the interest calculations. He further stated that the state is taking a risk based on the assumption the student will return to the state to practice, and should be remunerated if this does not occur; however, the annual compounding of interest could put a student in serious financial trouble. He suggested that if the commission is required to disclose the amount of money that must be repaid should a student elect not to return to the state, such disclosure might kill the WICHE program. Mr. Sparks said the commission does indeed disclose this information to students before they sign their contracts. He said if the interest rate were to be increased to 12 or 13 percent, the student's financial situation could be adversely affected. He pointed out that 75 percent of the amount of the loan is a write- off, and the 8 percent interest rate applies only to the 25 percent the student is required to repay unless the student does not return to the State of Nevada. Further discussion ensued on these provisions and the manner in which the interest is calculated. Mr. Sparks next explained the changes in section 4, which enable the commission to collect on stipends received by students prior to July 1, 1995. Noting section 5 was previously discussed, Senator Raggio requested explanation of the next section. Mr. Sparks said section 6 would allow the commission to receive funds other than legislatively appropriated funds in order to fund specific occupational slots. He said the commission would conduct the selection process. Senator Raggio sought assurance this would in fact occur, commenting the buying of slots must not be allowed. Mr. Sparks assured him this has been addressed in the bill, including repeal of a section that might be construed to permit the buying of slots. Section 7 relates to the new physician assistant area, Mr. Sparks continued. He said the commission felt it was necessary to impose a rural practice requirement in this area in concert with the original goal for this program of providing service to the rural areas as well as better health care in those areas, thereby economically benefiting the state and assisting the rural population. This section merely delineates what the requirement would be. Senator Raggio requested explanation of sections 8-11. Mr. Sparks said section 8 clarifies that the first day of the academic term is the date from which interest would begin to accrue. He said there have been problems in this area in terms of legal interpretation. In explanation of Section 9, Mr. Sparks said this section simply clarifies that the new sections apply only to loans made prior to July 1, 1995 and that the commission will continue to process other loans. Senator Raggio asked if it is correct the language that has been deleted has been moved to section 4. Mr. Sparks replied yes. Senator Raggio inquired the purpose of repealing NRS 397.061 in section 12 of the bill. Mr. Sparks responded it is this section which can be interpreted to mean WICHE is allowing students to buy slots, although that was not the original intent of the language. Senator Raggio verified it is the commission's recommendation that section 5 be deleted, should the committee approve the bill. The hearing on A.B. 135 was closed. Senator Raggio indicated his desire for committee action on bills heard previously during this hearing. SENATE BILL 93: Makes various changes relating to titling and recording of water rights. SENATOR RHOADS MOVED TO DO PASS SENATE BILL 93. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * SENATE BILL 476: Revises provisions governing allocation of money from community training center account. SENATOR MATHEWS MOVED TO DO PASS SENATE BILL 476. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * ASSEMBLY BILL 182: Makes supplemental appropriation to supreme court for anticipated shortfall in revenue from administrative assessments. Senator Raggio noted that if this measure is processed it should include an amendment that the court assessment fees will be utilized initially, and any unused funds will revert to the General Fund. SENATOR O'DONNELL MOVED TO AMEND ASSEMBLY BILL 182 TO PROVIDE THAT THE COURT WILL UTILIZE THE ADMINISTRATIVE ASSESSMENT FEES FIRST, WITH ANY UNEXPENDED FUNDS TO REVERT TO THE GENERAL FUND, AND TO DO PASS AS AMENDED. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * ASSEMBLY BILL 135: Revises provisions governing repayment of financial support received by students from Western Interstate Commission for Higher Education. SENATOR RHOADS MOVED TO AMEND ASSEMBLY BILL 135 BY DELETING SECTION 5, AND DO PASS AS AMENDED. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio indicated no action would be taken on S.B. 495, pending receipt of amendments, or on S.B. 411, pending receipt of additional information requested by the committee. The committee voted to introduce several bills that had been requested by the Senate Committee on Finance. BILL DRAFT REQUEST 34-2087: Requires director of state department of conservation and natural resources to employ state climatologist. Senator Raggio said the Fiscal Analysis Division has indicated this bill draft request (BDR) is consistent with the committee's closing action on the budget for the State Department of Conservation and Natural Resources. SENATOR RHOADS MOVED TO INTRODUCE BDR 34-2087. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * BILL DRAFT REQUEST 58-2092: Transfers responsibility for administration of program to subsidize transportation by taxicab of elderly and permanently handicapped to aging services division of department of human resources. SENATOR COFFIN MOVED TO INTRODUCE BDR 58-2092. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * BILL DRAFT REQUEST 18-2093: Authorizes director of office of science, engineering and technology to engage in other employment under certain circumstances. SENATOR O'DONNELL MOVED TO INTRODUCE BDR 18-2093. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * BILL DRAFT REQUEST 26-2088: Requires certain fees collected by state land registrar to be paid into state treasury for credit to state general fund. SENATOR RHOADS MOVED TO INTRODUCE BDR 26-2088. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * BILL DRAFT REQUEST 46-2091: Revises provisions governing funding of certain duties of bureau of mines and geology. Mr. Miles noted the current statute requires the program to be funded by (General Fund) appropriation, and the actual current funding mechanism is through Division of Minerals' fees. This bill resolves the discrepancy. SENATOR RHOADS MOVED TO INTRODUCE BDR 46-2091. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * BILL DRAFT REQUEST 18-2090: Establishes by statute Nevada natural heritage program. SENATOR COFFIN MOVED TO INTRODUCE BDR 18-2090. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * BILL DRAFT REQUEST 16-2040: Requires deposit of money collected for support and maintenance of certain delinquent juveniles in administrative account for division of child and family services of department of human resources. SENATOR RAWSON MOVED TO INTRODUCE BDR 16-2040. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * SENATE BILL 215: Makes appropriation to division of child and family services of department of human resources for vehicles, equipment, supplies and building maintenance for certain youth bureaus. Senator Raggio noted S.B. 215 was heard on March 27 and is in the Executive Budget. He ascertained from John P. Comeaux, Director, Department of Administration, that the administration has no objections to this bill. SENATOR RAWSON MOVED TO DO PASS SENATE BILL 215. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * SENATE BILL 212: Makes appropriation to health division of department of human resources for various equipment. Senator Raggio said this bill was heard on March 23. He requested comment from staff regarding a breakdown of the Health Division's onetime appropriation by program. Mr. Miles explained the breakdown, provided in the handout identified as Exhibit I. He noted the one-shot appropriation is contained within the Executive Budget and includes revised totals of $1.2 million for the State Health Laboratory, $45,000 for the State Health Officer, $69,000 for Community Health Services and $23,000 for Radiological Health. He said the recommendation is that the amount to be appropriated for the State Health Laboratory be reduced by $163,481 as a result of two factors: (1) more current pricing of some of the equipment being requested, and (2) the fact that the agency dropped some equipment items from its original request. Senator Raggio inquired of Mr. Comeaux whether the proposed reduction meets with his approval. Mr. Comeaux replied yes. SENATOR RAWSON MOVED TO AMEND SENATE BILL 212 WITH THE REDUCTION IN THE APPROPRIATION FOR THE STATE HEALTH LABORATORY TO THE RECOMMENDED AMOUNT OF $1,361,521, AND DO PASS AS AMENDED. SENATOR O'DONNELL SECONDED THE MOTION. Senator Raggio said when the health laboratory was discussed with Mr. Lange on previous occasions, one of the concerns expressed was that the state is subsidizing a number of fees, and this has been a cause of concern among private labs. He said Mr. Lange indicated the likelihood that some of the fees would be augmented, and requested Mr. Comeaux to contact Mr. Lange to determine the agency's intention in regard to this issue. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * SENATE BILL 468: Provides for certain post-retirement increases in benefits of surviving spouses of supreme court justices and district court judges. Senator Raggio called attention to a short note on the estimated fiscal impact of providing cost-of-living adjustments (COLAs) to Supreme Court justices' and judges' widows (Exhibit J) (approximately $3,400 in FY 1996 and $7,900 in FY 1997). Mr. Miles noted that the committee closed the Supreme Court budgets with none of the increases required by legislation in process that pertains to the court, and therefore the appropriation needs to be amended into S.B. 468. Senator Raggio stated his preference would be to reopen the budget rather than amend S.B. 468. SENATOR MATHEWS MOVED TO DO PASS SENATE BILL 468 AND TO REOPEN THE APPROPRIATE BUDGETS TO REFLECT THE ADDITIONAL COSTS. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Supreme Court Justices' and Widows' Pensions - Page 115 District Judges' and Widows' Pensions - Page 141 SENATOR RAWSON MOVED TO AUGMENT BUDGET ACCOUNTS 101-1492 AND 101-1491 WITH THE APPROPRIATE AMOUNT OF FUNDING TO CONFORM WITH THE COMMITTEE'S ACTION ON S.B. 468 (AS INDICATED ABOVE). SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * There was discussion among the committee on the new high school proficiency examination, preview copies of which had been distributed to the committee. The general consensus of committee members was that the test requires a relatively low level of achievement to pass. Judicial Discipline - Page 153 Senator Raggio noted this budget was heard March 2, 1995. Reporting for staff on this budget, Mr. Burke reminded the committee that due to a Nevada Supreme Court ruling, the attorney general's office can no longer serve as counsel for the Commission on Judicial Discipline. In FY 1995 the Interim Finance Committee (IFC) approved an independent body for the commission, composed of legal counsel, a legal assistant, a management assistant and an investigator position. The request included in the Executive Budget differs somewhat from the staffing approved by the IFC, Mr. Burke noted, and reflects the elimination of the management assistant position from the base; this is the half-time position that until recently served as the administrator of the commission. The only current state-employed positions are the counsel and the legal secretary. Continuing, Mr. Burke reported that rather than employing an investigator, the commission's budget reflects contract investigative support of $45,000 per year. Additionally, $50,000 per year has been requested for contract legal support for probable cause hearings. Those changes are reflected in decision module M- 600, as outlined in the budget closing action sheets (Exhibit K). Mr. Burke said the other modules, M-200 and E-125, pertain to caseload costs. The changes in these decision units are essentially to provide for 12 meetings per year of the Commission on Judicial Discipline, and the allocation would fund the non-state employee costs for the commission members and the travel associated with the commission meetings. Senator Raggio noted the salary of the legal counsel is not included in the closing action on this budget and will be addressed in the unclassified pay bill. Mr. Burke said the budget currently reflects the salary of the legal counsel at $106,667 per year plus fringe benefits, and the decisions made in the unclassified pay bill will affect this budget. SENATOR RHOADS MOVED TO CLOSE THIS BUDGET AS RECOMMENDED BY THE GOVERNOR, WITH THE EXCEPTION OF THE UNCLASSIFIED SALARY WHICH WILL BE ADDRESSED IN THE UNCLASSIFIED PAY BILL. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Regarding the placement of the legal counsel for the judicial discipline commission, Senator Coffin inquired whether there might be a problem with respect to separation of powers since the unclassified pay bill is a product of the executive branch. Senator Raggio recalled that the legislation pertaining to this issue provides for the position to be in the executive branch. Senator Raggio commended the Joint Subcommittee on General Government and the fiscal analysis staff for their detailed, time- consuming efforts with regard to the Supreme Court budgets. Welfare Administration - Page 1181 Steve Abba, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, provided preliminary comments regarding caseload adjustments in a number of Welfare Division budgets. He said the caseload calculations used in constructing the Executive Budget were based on projections made in November 1994. The Joint Subcommittee on Human Resources/K-12 adopted revised caseload projections that were made at the end of March 1995, which revealed a significant reduction in caseloads. There are a number of reductions in the budget accounts involved resulting from the revised caseload projections, Mr. Abba stated. Illustrating the impact of the revised caseload figures, Mr. Abba said in the Aid to Dependent Children (ADC) budget, caseloads were reduced by 2,152 cases in FY 1996 and over 3,500 cases in FY 1997, and the Food Stamp caseload was reduced by over 4,600 cases in FY 1996 and over 8,000 cases in FY 1997. He said there were some increases in caseloads, as well, which were also taken into consideration and modifications made accordingly. The increases were primarily in the disabled caseload in the Medicaid program. The increase in caseload was 500 cases per month in FY 1996 and approximately 900 cases (per month) in FY 1997. Senator Raggio inquired whether the fiscal analysis staff and the administration both agree the changes in caseload are still operative at this date. The response was affirmative. With regard to the budget for the Welfare Administration, Mr. Abba highlighted the recommended adjustments delineated on pages 2 through 6 of the budget closing action packet (Exhibit L). Mr. Abba noted 86 new eligibility workers over the FY 1995-97 biennium are recommended in the Executive Budget in decision units M-200, Caseload Demographics, and E-901, Program Transfers, based in caseload increase projections. With the reduced caseload projections the potential exists to reduce the number of new eligibility workers. Mr. Abba said the joint subcommittee considered this issue, but committee members were concerned about rising error rates in the AFDC (Aid to Families with Dependent Children) program and the fact the division is still under court supervision for processing issues related to AFDC and CHAP (Child Health Assurance Program) cases. Continuing, Mr. Abba said the joint subcommittee acted to eliminate the salary costs of 14 new eligibility worker positions over the biennium, in lieu of eliminating 19 positions which theoretically could have been eliminated based on the reduction in caseloads. He explained the reduction in salary costs did not eliminate the position, but merely removed the salaries from the budget, and the subcommittee believed this to be an appropriate decision for two reasons: (1) the issues related to error rates and the court supervision issue, and (2) because the budget as recommended has unfrozen merit salaries for eligibility workers, which increased the overall salary category for the Welfare Administration budget by approximately $2 million over the biennium. Netting that increase against the reduction in salaries still provides the Welfare Division a substantial degree of flexibility in hiring new eligibility worker positions if warranted by caseload or processing requirements. This is reflected in decision unit M-300 (page 4, Exhibit L), which provides for the merit salary increases. Mr. Abba next highlighted the recommended modifications to decision unit M-581, NOMADS (Nevada Operations Multi Automated Data Systems), which include significant reductions that would result in savings of approximately $2 million over the biennium. He said the reductions are based on several issues, which are detailed on page 4 (Exhibit L). Regarding decision unit M-582, National Voter Registration Act (NVRA), Mr. Abba noted the Executive Budget included additional clerical support (five positions) to provide support for the NVRA. Based on information the Welfare Division has provided the committee, it has been determined that time spent by existing staff on this function amounts to less than one full-time position; it was therefore recommended by the subcommittee that all five positions be eliminated. However, the subcommittee recommends retaining the postage and printing costs for pamphlets to be distributed to clients visiting the district offices. Mr. Abba said decision units E-175, E-178, E-179, E-180 and E-181 provide for 12 additional new administrative staff for the Welfare Division in the areas of finance, accounting, budgeting, quality control, hearings, personnel and Medicaid financial accounting. He said the subcommittee recommends approving the 12 positions but delaying the hiring of the positions by 3 months. Senator O'Donnell questioned the recommendation to approve all 12 positions, noting that was the number requested by the agency and the Governor's budget recommended only two. He inquired as to the justification for all 12 positions. It was explained the 12 positions relate to five decision units, and there had been many more positions (recommended in the Executive Budget but not recommended for approval by the joint subcommittee). Noting that decision unit E-400 is a component of the Governor's welfare reform proposals, Mr. Abba said there are three budgets affected by the proposals: Welfare Administration, ADC and Employment and Training. In the Welfare Administration budget, decision unit E-400 consists of the component that will work with case management and up-front marketing of employment services. Eleven positions have been recommended in the Executive Budget (over the biennium) for these efforts. Essentially what was proposed in the Governor's budget was to add five social worker positions for case management services (which would also be subsidized by university intern support), and six additional eligibility workers, which will allow the division to devote more time with clients to discuss employability issues when they apply for assistance. Senator Raggio commented the Joint Subcommittee on Human Resources/K-12 spent a great deal of time on this issue (determining applicants' employability). He stated, "This is consistent with both the Governor's proposal and Senator Washington's self-sufficiency proposal." He said the joint subcommittee felt the additional five social worker positions to be imperative in order to effectively address this aspect of both proposals. He invited Senator Rawson, as chairman of the Joint Subcommittee on Human Resources/K-12, to enlarge upon the subcommittee's views on this issue. Senator Rawson agreed the joint subcommittee had spent a substantial amount of time on this area and had examined the issue of how much caseload reduction could be anticipated given different scenarios and circumstances. The subcommittee was of the opinion there would be significantly more long-term improvement if the employability aspect were to be supported at this time and therefore recommended the additional social worker positions. Senator Rawson said the subcommittee's intention was that there be more case management with regard to welfare applicants. Senator Rhoads stated his intention to support the additional positions, albeit reluctantly. He voiced the opinion the proposed reforms are activities in which the Welfare Division should already be engaged, and the amount of savings to be achieved through the proposal is overly optimistic based on results achieved in other states. He said he intends to closely monitor this phase of welfare reform. Senator Raggio echoed the sentiments expressed by Senator Rhoads. He further stated it his belief the anticipated savings that have been built into the Executive Budget will be difficult to achieve, particularly in the short amount of time entailed. He stated his intention to support the recommendation for the additional positions, but with reservations in terms of the likelihood of achieving the projected savings. Summarizing the recommended action in decision unit E-400, Mr. Abba said as indicated by the chairman the subcommittee recommended five additional social worker positions to enhance case management within the district offices. Mr. Abba next addressed decision units E-900, E-901 and E-902. He said the joint subcommittee approved the Executive Budget recommendation to merge the Welfare Administration and Food Stamp budgets, which is necessary at this point because of the seamless worker concept in NOMADS. He explained the Food Stamp budget is not one in which positions can easily be cost allocated against other federal programs. He noted the subcommittee is recommending that a letter of intent be sent to the administration that for the 1997 legislative session the administrative and eligibility functions within Welfare Administration should be segregated into separate budgets. Concluding his review of the joint subcommittee recommendations, Mr. Abba said with the reductions in food stamp caseloads there is an offsetting reduction in the amount of funding provided for transaction costs associated with mailing out food stamp coupons, as reflected in decision unit E-902. SENATOR RAWSON MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS JACOBSEN AND COFFIN WERE ABSENT FOR THE VOTE.) * * * * * In discussion following the vote, Senator Rawson inquired whether the mainframe computer that was hijacked has been located or replaced. Mr. Abba responded the computers that were hijacked have not been found, but it is his understanding ISSC/IBM (the contractor) will make good on the additional equipment that was to be provided because the computers were still under the firm's ownership at the time of the hijacking. Senator Raggio explained the mainframe enhanced equipment that was being furnished by the contractor apparently arrived in Nevada, but somehow the truck carrying the equipment was hijacked. He remarked, "That's truly Murphy's Law as it applies to NOMADS." Mr. Abba added that the Phase II code that had been rescheduled for delivery on May 31, 1995 has been received, and the Welfare Division is currently engaged in testing the delivered items. Senator Raggio requested the Senate Committee on Finance be informed as to the results of the division's analysis of the items received. Aid to Dependent Children - Page 1195 Mr. Abba said the M-200 decision module shown at the top of page 11 (Exhibit L) reflects the reductions in caseload based upon the revised projections provided by the Welfare Division. The General Fund savings is projected at $1.5 million in FY 1996 and $2.3 million in FY 1997. Mr. Abba further reported the issue in this budget on which the subcommittee spent the majority of its time also concerned the second component of the Governor's welfare reform proposals, that being the allowance for the AFDC recipients to retain earned income. He said this is a budget in which the savings previously discussed will have to be earned in order for the required federal waiver to be cost neutral. The Governor has proposed recipients be allowed to retain income over a period of 1 year, using a "stair- stepped" approach. Under this plan, recipients will retain 100 percent of their earned income for the first 3 months they are on the rolls; that will be reduced incrementally over the next 9 months to 50 percent of recipients' tenure on the rolls. Mr. Abba further explained the policy issues, related issues and subcommittee recommendations for this budget as presented on pages 11 and 12 (Exhibit L). Noting the AFDC federal waivers are generally of 5-year duration, he stated it will be necessary to closely monitor the progress this waiver is making and whether or not it is actually reducing costs as anticipated. Noting that Senator Washington's bill (S.B. 428) is still under consideration and may entail minor changes in the welfare budgets, Senator Rawson recommended closing the budgets with the knowledge they may need to be adjusted if S.B. 428 is approved. SENATE BILL 428: Requires establishment of program for self- sufficiency of applicants for and recipients of aid to families with dependent children. Senator Rawson voiced the opinion "there will be some recommendations that will favorably reflect upon these budgets." Senator Raggio noted there is a difference between the Governor's welfare reform proposal and S.B. 428 with regard to the income disregard. SENATOR RAWSON MOVED TO APPROVED THE CHANGES AS RECOMMENDED BY THE JOINT SUBCOMMITTEE AND TO CLOSE THE BUDGET ACCORDINGLY. SENATOR RHOADS SECONDED THE MOTION. In discussion prior to the vote, Senator Raggio voiced concern regarding the need, assuming the Governor's proposal to allow AFDC recipients to retain income is approved, to develop a fail-safe mechanism to shut down the program if savings from a slowing of caseload growth are not achieved as projected. (This issue is discussed in the last paragraph on the staff report on page 12, Exhibit L.) He said it is necessary to have a fail-safe mechanism in place fairly soon in the event the state will be held liable at some point for additional costs. He asked when the implementation of the fail-safe mechanism is expected to be completed. Mr. Abba responded that when the Welfare Division initiates its waiver application to the federal government, the fail-safe mechanism must be outlined because of the need to ensure the proposal is cost neutral at the federal level as well. He suggested the agency be required to report to the IFC during the interim "on an informational basis." Senator Raggio suggested including in the motion the provision to specifically reference in a letter of intent that the Welfare Division advise the committee as soon as practicable as to the fail-safe procedure to be implemented in connection with the division's federal waiver application. Senator Rawson, who made the motion, and Senator Rhoads, who seconded the motion, agreed to the revised motion, which is restated as follows: SENATOR RAWSON MOVED TO APPROVE THE CHANGES AS RECOMMENDED BY THE JOINT SUBCOMMITTEE, TO APPROVE A LETTER OF INTENT REQUESTING THE WELFARE DIVISION TO ADVISE THE COMMITTEE AS SOON AS PRACTICABLE AS TO THE FAIL-SAFE MECHANISM TO BE IMPLEMENTED IN CONNECTION WITH THE FEDERAL WAIVER APPLICATION, AND TO CLOSE THE BUDGET ACCORDINGLY. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Child Support Enforcement Program - Page 1199 Mr. Abba reported the joint subcommittee's recommendations for this budget are primarily technical modifications in three different areas. First, Mr. Abba stated, child support collections that were estimated in the budget to be earned, essentially, by the private collection agency were far higher than actual history has shown. Based upon a reanalysis of the collection of revenues that might occur, a reduction of $500,000 in FY 1996 and $600,000 in FY 1996 is recommended. Continuing, Mr. Abba said the second technical modification is an adjustment in the amount of funds that were cost allocated from the Child Support Enforcement Program (CSEP) for NOMADS, for Welfare Administration support; the offset was reflected in the Welfare Administration budget, which provided for a small amount of savings to the General Fund (page 14, Exhibit L). Mr. Abba said the third technical change is primarily due to the expected failure of the NOMADS project to become operational, as previously anticipated, in FY 1996. He explained there must be a reauthorization of authority for distributing nonassistance child support payments in this budget. He said it was anticipated when the budget was constructed that with NOMADS in place, this function could be performed by the local district attorney's offices. If NOMADS is not operational, however, the Welfare Division will need to continue performing this function. Mr. Abba said the subcommittee's closing recommendation is to reauthorize $6.8 million in FY 1996 to continue this function. SENATOR RAWSON MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Assistance to the Aged and Blind - Page 1205 Senator Raggio noted this budget was heard in the Senate Committee on Finance on February 15, 1995. Mr. Abba reported the joint subcommittee is recommending approval of an amended Adult Group Care Waiver Program which will extend to clients in the Community Home Based Initiatives (CHIP) program and clients being discharged from hospitals who are at risk of being placed in a nursing facility. The current program, which is not working, attempts to target clients who are already residing in long-term care facilities and then attempts to move those clients into an adult group care setting. The Welfare Division and the Division for Aging Services have been unable to move any clients out of such settings, Mr. Abba stated. Mr. Abba said the modifications recommended in the closing document (page 16, Exhibit L) are based upon more recent information provided by the Welfare Division. The Executive Budget was constructed on the basis of moving 75 clients into adult group care settings, either from CHIP or from the hospitals. Based upon a reanalysis it has been determined to be more likely that only 30 clients will be moved from those facilities. Additionally, the amended waiver submitted to the federal government has not been acted upon; the transition was to take effect in January but will not happen until at least July, as a result. Continuing, Mr. Abba stated that based on the two issues of the reduction in clients and the delay until July in obtaining the federal waiver, a reduction in the amount of supplements paid to adult group care facility operators has been recommended. The payments are to be reduced by $120,000 in FY 1996 and $149,000 in FY 1997, as reflected in the closing documents. SENATOR RAWSON MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Food Stamp Program - Page 1209 Mr. Abba said the Food Stamp Program budget is recommended to be consolidated with the budget for Welfare Administration, and the joint subcommittee therefore recommends the closing out of this budget. Senator Raggio called for a motion on this budget, with the understanding it will be merged with the Welfare Administration budget. SENATOR COFFIN MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Homemaking Services - Page 1227 Mr. Abba stated the joint subcommittee has recommended this budget be closed as recommended by the Governor. He called attention to the fact the funding source of the Homemaking Services budget is composed entirely of federal Title XX funds. The amount of Title XX funds proposed in the Executive Budget differs from the amount of funds transferred from the Purchase of Social Services budget, where Title XX monies are housed. Mr. Abba said the Budget Division has provided the Legislature with revised closing sheets for the Purchase of Social Services budget that will make the Homemaking Services budget whole. He recalled that the Purchase of Social Services budget was modified, during closing action on the budget for the Director's Office of the Department of Human Resources, to accommodate the need to make whole the Homemaking Services budget. Senator Coffin inquired as to where the director of the department will obtain the funds for this purpose and whether she will have the flexibility to take the funds from other budgets already closed. Mr. Abba replied there apparently are sufficient FY 1995 carryforward monies (not reflected in the Purchase of Social Services budget) to resolve the problem in the Homemaking Services budget as well as several other problems in the budget for the Division of Child and Family Services, obviating the need to obtain funds from other agencies. Senator Raggio asked Mr. Abba to indicate his recommendation on this budget. Mr. Abba recommended closing the budget as the Governor has recommended. He said the problems appear to have been resolved with the actions indicated above. SENATOR RAWSON MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Prior to the vote on the above motion, Senator Raggio inquired of Mr. Comeaux whether he concurs with the proposed action. Mr. Comeaux indicated he does. Employment and Training - Page 1231 Senator Raggio noted this budget was heard on February 15 by the full committee. Mr. Abba told the committee the Employment and Training budget is the third budget that includes part of the Governor's welfare reform proposals. Decision units M-200 and M-593 include additional staff that would be needed to provide the additional jobs training for AFDC clients who will be directed to Employment and Training in an attempt to facilitate their employment in line with the Governor's goal of providing jobs services to over 6,000 clients by the end of FY 1996. Mr. Abba said the closing adjustments reflected in the closing sheets (pages 24-25, Exhibit L) are made based upon three primary factors. The first factor, previously discussed, is the caseload issue, which allows for a reduction in several of the decision units with the Employment and Training budget. The second factor is that expenditures for child care, which is the primary cost component within the jobs category, were significantly inflated, based upon child care costs that differ between types of providers and types of children of different age groups. Also, the CPI (Consumer Price Index) increases that were included in the budget (7.15 percent each fiscal year) were based solely on one age group of children versus a blending of age groups, thereby overstating the historical inflation increases for child care costs. Continuing, Mr. Abba stated that taking these factors into consideration and basing the inflation rates upon more realistic inflation rates, reductions in the jobs category ($76,000 in FY 1996 and $94,000 in FY 1997) are recommended. The third primary factor on which the closing adjustments are based was the reduction in the State Industrial Insurance System (SIIS) rates applied for Community Work Experience Program (CWEP) participants, which were overstated. The recommended reduction in FY 1996 is approximately $9,000 in FY 1996 and $12,400 in FY 1997. Mr. Abba said the caseload adjustments were the major reason for the significant reductions recommended. The caseload adjustments reduced the Employment and Training budget by $315,000 in FY 1996 and $687,000 in FY 1997. He said the other issue is the additional staff that had been recommended in the budget for the welfare reform initiative as well as to meet the requirements of the Family Support Act, which increase rate requirements for AFDC recipients participating in the jobs program. Mr. Abba stated that based upon the reductions in caseload, the subcommittee is recommending the deletion of one position over the biennium and the delayed hiring of another position until the second year of the biennium. These actions are reflected in the closing sheets (Exhibit L). Senator Rawson pointed out this budget may be impacted by welfare reform legislation, requiring adjustments in the future, but he moved to close the budget at this time. SENATOR RAWSON MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) * * * * * Following a review of the agenda for the next day, the meeting was adjourned at 11:00 a.m. RESPECTFULLY SUBMITTED: ______________________________ Sue Parkhurst, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance May 29, 1995 Page