MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session June 6, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Tuesday, June 6, 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 STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Mary Matheus, Local Government Budget Analyst Jeanne L. Botts, Program Analyst Brian M. Burke, Program Analyst Cristin Buchanan, Committee Secretary OTHERS PRESENT: Jere Schultz, Budget Analyst, Budget Division, Department of Administration Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration Thomas G. Tait, Executive Director, Commission on Tourism Senator Raggio announced the committee will consider various budgets for potential closing. Economic Development - Page 955 Senator Raggio stated a threshold determination must be made on the proposal to combine the Commission on Economic Development with the Commission on Tourism (Senate Bill 345), which was first heard in committee on April 26 and was subsequently heard May 11. Discussion on the bill ensued. SENATE BILL 345: Combines commission on economic development with commission on tourism. Senator Raggio noted the Assembly Committee on Ways and Means has declined to approve this measure. He inquired as to additional closing actions taken by the assembly committee. Mary Matheus, Local Government Budget Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, directed the chairman's attention to the two separate sets of closing recommendations for the Commission on Economic Development (CED) budget in the budget closing packet provided to the committee (Exhibit C). Pages 1 and 2 reflect the budget adjustments that would be made if Senate Bill 345 passes, while the closing action recommendations on pages 3 and 4 reflect the assumption the measure will fail. Mrs. Matheus said if S.B. 345 fails, the closing recommendations include reinstatement of the Executive Director position, the board and commission, and travel for the Executive Director position, and adjustment of the salary and travel costs of the board and commission to correlate with the restoration of the commission to its original size. The Assembly Committee on Ways and Means chose the second scenario (the assumption S.B. 345 will fail; pages 3 and 4, Exhibit C). Senator Raggio called for discussion among committee members on the question of whether the two commissions should be combined or left as separate agencies. Senator Rawson observed that strong testimony has been provided by parties who feel they will be negatively impacted by the consolidation proposed in S.B. 345. He said it is difficult to determine at first glance whether the problem arises from a fear of change or if the anticipated negative impact might actually result. He recommended against combining the commissions at this time, but he suggested the subject be examined by the Legislature during the interim. He said it would not be desirable to "take anything away" from the Commission on Tourism while providing the Commission on Economic Development what it needs to be effective. Senator O'Donnell commented the two commissions have been functioning quite well as separate agencies for several years. He suggested that while it might be valuable to examine every possible avenue to consolidate government and make it more efficient, in this case the reverse effect might be achieved. He remarked this was demonstrated during the last legislative session, when a number of budgets were combined and had to be revisited later to reverse the Legislature's actions. He expressed reluctance to see the commissions combined without solid evidence provided as to the merits of consolidating them and without a great deal of careful thought being given to the proposal. Senator Mathews indicated agreement with the views expressed by Senator O'Donnell. She said although she could have been persuaded in either direction, she fears the small counties would suffer from the consolidation. She proposed the Legislature undertake a study during the interim to determine how the smaller counties can be assisted in the areas of tourism and economic development. She expressed doubt the town of Dayton, Nevada would have developed as it has, had the two commissions been combined as proposed. Senator Mathews stated she is reluctant to support the proposal for these reasons. She acknowledged that persuasive arguments in favor of S.B. 345 had also been presented by powerful advocates of the bill and should not be discounted. She indicated, however, that the effectiveness of the commissions as two separate entities has already been demonstrated. She recommended maintaining the status quo. Senator Rhoads echoed the sentiments voiced by Senator Mathews. He agreed that persuasive points were made in favor of combining the commissions; but he said the people in the rural district, who are closest to the issue, overwhelmingly oppose consolidation at this time. He stated his opposition to the proposal. Senator Jacobsen concurred with the views expressed by the other senators. He said as the representative of "multi-districts," he has attended many meetings on economic development. He voiced the opinion the smaller counties, which are the ones most in need of economic development efforts, would suffer ultimately under the consolidation. He stated his opposition to the proposal. Senator Rawson proposed indefinitely postponing this measure. He had a question, however, regarding the significance of a section in the bill (page 10, line 41) which provides that "at the discretion of the editor the magazine may also contain editorial comments concerning business development in the state." Senator Raggio said as he understands it, this policy is not precluded under the law and the language in the bill would merely clarify the issue. He was of the opinion this provision is not sufficient reason to process S.B. 345. SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE S.B. 345 AND TO INDICATE THE COMMITTEE'S SUPPORT OF THE EDITORIAL POLICY STATED IN SECTION 25, LINE 41, IN A LETTER OF INTENT TO THE COMMISSION ON TOURISM. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * The committee returned to consideration of the recommendations for closing of the Economic Development budget. Economic Development - Page 955 Mrs. Matheus said the changes in this budget are primarily technical. Regarding item 2 on page 4 of Exhibit C, Mrs. Matheus noted the agency originally requested $5,000 per year for training of 11 employees in Total Quality Management (TQM) and computer operation. Through discussions with the CED, staff has determined that $2,500 per year would be adequate to fund the proposed training, based on the agency`s current training plan. Item 3 pertains to purchases of computer hardware and software erroneously included in the base budget. Item 4 involves adjustments to state owned and non-state owned office rents. Senator Rawson drew attention to decision unit E-325, Business/Government Environment. In the ensuing discussion on the positions in this category, Senator Raggio asked if the positions were requested to be contractual. Mrs. Matheus replied there are contract positions in the budget for the tourism commission. Senator Rawson expressed the opinion CED's program will be able to "essentially go forward adequately with those professional positions in the three areas of the state." He said the commission should be able to adequately handle the clerical functions (with existing staff) and could probably manage without the Contract Loan Packager recommended in decision module E-325. Senator Raggio called upon the budget office to explain the request in E-325. Jere Schultz, Budget Analyst, Budget Division, Department of Administration, explained the agency request was for five additional positions: a Finance Specialist, a Senior Industrial Associate, two Program Specialists and a Management Assistant (M.A.) II. The first four positions are in the unclassified category and the M.A. II is in the classified service; none of them were recommended by the Governor in the Executive Budget. Senator Raggio inquired as to the purpose of the requested positions. Mr. Schultz responded the Program Specialists would provide support in the north and the south, to assist with conferences, meetings and related activities. The Finance Specialist was to be utilized to assist the rural areas in developing finance and loan packages, Mr. Schultz recalled. He could not recall the purpose of the Senior Industrial Associate position. Senator Raggio attempted to ascertain whether the requested positions are a necessary enhancement for the agency to accomplish its objectives. Mr. Schultz said they are not essential, in the opinion of the budget office. Senator Rawson commented that in attempting to better understand what is entailed in the agency's positions request, he determined there is apparently a real need for the support services in connection with preparing finance and loan packages. He said with regard to secretarial (clerical) functions, the existing staff have the capability of performing much of the work on their computers and are doing so. Although the additional clerical assistance would be advantageous, the agency personnel have indicated they can continue to function without it, the senator said. Senator Raggio requested further clarification of the purpose of the Contract Loan Packager position that has been recommended (in the Executive Budget) for funding. Mr. Schultz explained the position would provide the expertise to assist small businesses in preparing loan and finance packages. He said that while the position is not one the CED requires full time, the authority to contract with someone to provide this service is needed. Senator Rawson suggested that having the three unclassified positions will enable careful and precise evaluation of the effectiveness of the positions. He said statistics examined with regard to the effectiveness of the loan packaging assistance indicate the program pays for itself by generating sales tax revenues and other revenues. He indicated the additional office expense is minimal. Senator Raggio inquired whether the 11 positions currently authorized for the CED include the director. After some discussion this was ascertained to be the case. Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained the position count does not follow the decision unit. Senator Coffin voiced concern with the direction being taken in funding the CED budget (with reference to the positions request). He noted that in effect, killing S.B. 345 necessitates an additional net cost for the biennium of $178,000, and the proposed additional five positions would further increase the amount of General Fund appropriation required to fund this budget. Senator Raggio observed the attempt is being made to clarify the purpose of the additional positions requested. Senator Coffin inquired as to the closing action taken by the Assembly Committee on Ways and Means in regard to the additional positions. Senator Raggio asked if the closing sheets (pages 3 and 4) reflect the adjustments made by the ways and means committee. Mrs. Matheus replied yes. She said the committee did not approve the additional five positions. Senator Raggio advocated that the Senate Committee on Finance approve the additional three (business support) positions and address the differences with the Assembly Committee on Ways and Means once the matter has been clarified. It was ascertained the two Program Specialist positions and the third position referenced previously (Contract Loan Packager) comprise the three positions recommended by Senator Rawson for committee approval. Senator Raggio requested that Senator Rawson undertake to clarify the necessity of the positions. Senator Rawson agreed to do so. Senator Raggio inquired whether the closing action recommendations include reinstatement of the commission to the original number of commissioners. Mrs. Matheus replied yes. SENATOR RAWSON MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGES 3 AND 4 OF EXHIBIT C. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY * * * * * SENATOR RAWSON MOVED TO ADD, IN DECISION UNIT E-325, THE FUNDING FOR TWO PROGRAM SPECIALIST POSITIONS. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR COFFIN VOTED NO.) * * * * * Senator Coffin indicated he is unwilling to support the additional positions request without a hearing being held on this proposal for the purpose of providing further information on which to base a decision. Senator Raggio agreed there has been no hearing on the proposal, and he noted it will be necessary to go to conference with the Assembly Committee on Ways and Means because of the difference in the committees' closing actions. He reiterated his request to Senator Rawson to provide justification for the action of the Senate Committee on Finance to approve the additional positions. Tourism - Page 961 Mrs. Matheus reported on the recommended adjustments to this budget as presented on pages 7 and 8 (Exhibit C). She said the first adjustment is to increase the balance forward and the reserve categories to reflect the increased revenue projection of room tax revenues for Fiscal Year (FY) 1995. She further stated this amount has been adjusted to reflect the increased FY 1995 work program. The revenue projections for FY 1996 and FY 1997 have been adjusted to reflect an 8 percent increase over the projected FY 1995 revenues for each year of the biennium, in line with the agency's performance indicators. Senator Raggio asked if the 8 percent increase is in conformity with the projections in the Executive Budget. Mrs. Matheus replied yes. Item 2 calls for transference of $20,000 in FY 1996 to Historic Preservation, as a result of the Senate and Assembly closing actions in the Historic Preservation budget for the historic marker program. Item 3 reflects the reinstatement of the commission to the original number of commissioners, as well as reinstatement of the associated travel and salary funding. Item 4 pertains to the adjustment of state owned and non-state owned office rental. Mrs. Matheus noted the scheduled move to the Old State Library has been delayed, and there is a 5 percent rent increase on the building in which the commission currently resides. Item 5 reduces the advertising category for the Conference Planner contract. Mrs. Matheus said the two Conference Planner positions are recommended to become staff on October 1, 1995. Item 6 removes maintenance cost for new computers for the year in which they are purchased. There is a 1-year warranty on new computers purchased. Item 7 calls for the removal of the Rural/Advertising Marketing Contingency for $300,000 each year of the biennium. Mrs. Matheus noted the agency had requested that $300,000 be moved from reserve to the contingency fund for emergency funds in the event of a natural disaster or other emergency, but staff recommends leaving the funds in the reserve account as there are existing provisions for the agency to seek a work program change from the IFC if the additional funds are needed. This item is in decision unit E-350. Item 8 adjusts the agency transfer to the Motion Picture Division "so the agency transfers agree." Item 9 adjusts the cost allocation to conform with the latest allocation from the Department of Administration. Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Human Resources, came forward to testify on the item pertaining to the contingency account (item 7, page 8, Exhibit C). He said the proposed contingency fund was discussed when the Assembly Committee on Ways and Means closed this budget, and the concern expressed was that there would be too great a delay in processing a work program and transferring funds to allow timely response to an emergency. He further stated the consensus was that a letter of intent should be initiated which requires the agency to report to the IFC on the actual emergency-related expenditures. Senator Raggio inquired as to the kinds of emergencies the agency might encounter. Mr. Hataway replied they would be natural or man-made disasters. He deferred to a representative from the Commission on Tourism to further respond. Thomas G. Tait, Executive Director, Commission on Tourism, stated the commission spent a considerable amount of time the previous summer preparing for the fire season. The agency incurred a tremendous amount of cost allocation, time and energy with regard to working with tourism organizations and emergency management agencies in developing a plan to address the potential problem of fires that in fact occurred last summer. Mr. Tait stated this is one of the factors that gave rise to the contingency request, because funds were not available at the time to allow the commission to publicize that the roads were open from the Bay Area and the Sacramento area into the Reno area without shifting funds from the standard promotional programs. He said this also applies to the drought situation that existed at Rye Patch and to other emergency situations that might occur throughout the state. Continuing, Mr. Tait said the contingency fund would provide the Commission on Tourism the opportunity to better respond to emergencies in the principal and major markets in order to protect the state's market share. Senator Raggio suggested the issue is essentially one of accountability, and a requirement that the commission report to the Legislature on the actual use of contingency funds should be satisfactory. Mr. Tait concurred. Following further discussion on this item, Senator Raggio requested staff to provide an overview of the types of emergencies contemplated in this request. Mr. Miles responded that under the statutory provisions governing work program revisions, there are three opportunities for a state agency to revise its work program. The first is the declaration by the Governor that an emergency exists, resulting in the agency's ability to obtain immediate approval of work program changes. The second is that if the Governor determines the work program requires expeditious action, a 15-day time limit takes effect with respect to action by the Interim Finance Committee. The third is the normal work program involving a 45-day time limit for processing. Stating the options outlined by Mr. Miles would appear to be adequate, Senator Raggio inquired whether the Commission on Tourism can operate effectively under these scenarios. Mr. Tait indicated either of the latter two options would probably suffice, but having an actual emergency declared should be avoided because of the negative publicity it can generate. Mr. Hataway stated, "We'll make it work one way or another." Senator Raggio remarked it would be preferable to conform to the existing procedures. SENATOR JACOBSEN MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS PRESENTED IN THE CLOSING ACTION SHEETS ON PAGES 7 AND 8 OF EXHIBIT C. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.) * * * * * Motion Pictures - Page 969 Senator Raggio noted this budget was heard by the committee on February 21, 1995. Mrs. Matheus reported the adjustments recommended for this budget are (1) to adjust the building rent to properly allocate building rent between budgets, and (2) to delay the hiring of a Management Assistant I for the Las Vegas office to October 1, 1995. Senator Raggio inquired as to the reason for the transfers from the Commission on Tourism as itemized on page 9 (Exhibit C). Mrs. Matheus explained this budget was previously funded 75 percent by tourism and 25 percent by General Fund appropriation, but the Governor's budget recommends that it be funded entirely with tourism funds. SENATOR O'DONNELL MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 9 OF EXHIBIT C. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR COFFIN ABSTAINED FROM THE VOTE.) * * * * * Rural Community Development - Page 975 Mrs. Matheus said there is only a technical adjustment in this budget, involving rent. SENATOR JACOBSEN MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 10 OF EXHIBIT C. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Procurement Outreach Program - Page 979 Mrs. Matheus reported that in the E-326 decision module of this budget it is recommended the Small Business Revitalization program, which was funded in the past with Petroleum Rebate money, be funded with General Fund appropriation and then transferred to the Department of Business and Industry. The adjustments in this budget are technical and pertain to rent and delayed hiring of a new position. Senator Raggio inquired if the recommendations are consistent with the committee's closing actions on the Department of Business and Industry budget. Mrs. Matheus replied yes. SENATOR MATHEWS MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 11 OF EXHIBIT C. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Nevada Magazine - Page 983 Mrs. Matheus explained the adjustment made to this budget relates to the delay in moving Nevada Magazine to the Old State Library building. The office originally anticipated being able to relocate during the upcoming biennium, but the reports from the Division of Buildings and Grounds indicate the move will not occur until after the biennium. Senator Raggio asked when the division actually expects to relocate. Mrs. Matheus answered that she spoke to Richard Moreno, Publisher, Nevada Magazine, Division of Publications, Commission on Tourism, who said the architect has given a date of August 1996, but the buildings and grounds division is projecting the move will not occur until after the 1995-1997 biennium. Senator Raggio requested staff to obtain a report on the status of the Old State Library. SENATOR JACOBSEN MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 12 OF EXHIBIT C. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Colorado River Commission - Page 1861 Jeanne L. Botts, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reported on the staff adjustments and recommendations for this budget as presented in pages 1 and 2 of the closing action packet (Exhibit D). Ms. Botts said there has been an adjustment in this budget to match the balance forward with the reserve in FY 1996. Rent is adjusted to match the amounts provided by the Division of Buildings and Grounds. Operating lease payments are increased for a copier, and Equipment is reduced because the agency would prefer to lease the copier rather than purchase it. There has been an increase in the Office and Other Equipment category to provide sufficient funding. Continuing, Ms. Botts noted the adjustments to the reserve account, the Statewide Cost Allocation and the Attorney General's Cost Allocation (in adjustments to expense, page 1, Exhibit D). Regarding the addition of the Chief of Land and Environment position (item 4, page 2), Ms. Botts said the Colorado River Commission (CRC) had requested that a new position be added, but the request was not included in the Executive Budget. The rationale for the new position was that the Laughlin and Eldorado Valley areas are becoming increasingly active, and the commission needs to be involved in the development of the two areas. The cost of the new position, which is requested to be at the grade 44, step 7 level, amounts to $63,268 in FY 1996 and $66,300 in FY 1997. Senator Raggio asked if the position would be unclassified. Ms. Botts replied no, the position is a classified position, and the actual grade and step would be subject to change by the Department of Personnel. Ms. Botts discussed the issues and recommendations in items 2 and 3, relating to the Director, Deputy Director and Chief Accountant positions. She reminded the committee the CRC has a Deputy Director position which, along with the position of Director, has been vacant for quite some time. The commission is requesting that the Director's position, which has been vacant since May of 1994, be granted a considerable increase in salary, from the existing level of $69,561 to $90,000. Ms. Botts said the Executive Budget did not recommend an increase, but apparently the Budget Division is recommending an increase in the unclassified pay bill. Senator Raggio sought verification that the Budget Division is recommending an increase in the Director's salary in the unclassified pay bill. Mr. Miles said he received a letter the previous day from John P. Comeaux, Director, Department of Administration, requesting the increase to $90,000. Continuing her review of the closing recommendations, Ms. Botts said the agency is requesting the Deputy Director position not be funded but remain vacant. The commission does not wish the position to be removed from the statutes in case it is desired to reinstate the position at a future time. Ms. Botts said the agency is requesting the Chief Accountant be reclassified as the Chief of Finance and Management. This position is budgeted at grade 47 and was recommended accordingly by the Governor, but the personnel department will determine the actual grade level because the position is classified. Ms. Botts added the commission apparently intends to utilize this position as a combination Deputy Director and Chief Accountant. Ms. Botts reported the agency's host fund (item 5, page 2, Exhibit D) has been transferred from the CRC Research and Development budget to allow for water funding to share in the expenses of meetings hosted by Nevada. Regarding item 7, page 2, Exhibit D, Ms. Botts reminded the committee the Southern Nevada Water System is proposed to be transferred to the Southern Nevada Water Authority (SNWA), and there is a bill that would effectuate this transfer (Assembly Bill 542). The bill is currently in the Assembly Committee on Government Affairs. ASSEMBLY BILL 542: Makes various changes relating to Colorado River commission. Ms. Botts said the proposed transfer is scheduled for January 1, 1996 and would affect this budget account as well as two others: the CRC Federal Pumping and Transmission Facilities and the Alfred Merritt Smith Water Treatment Plan budget accounts. These accounts would be eliminated under the planned transfer, but since the transfer will not occur until January 1996 the two budget accounts are included in staff's closing recommendations. Continuing, Ms. Botts stated it is suggested there be a letter of intent directing the agency to present its amended budgets to IFC if the transfer occurs, and within those revised budgets to record all transfers of revenue between budget accounts as revenue rather than as reductions to expense. Noting she has been assigned this budget account fairly recently, Ms. Botts said it is her understanding that for years the agency has recorded the transferring of funds into this budget as reduction to expense, which she said does not provide a true picture of the total expenditures. She further commented that because these accounts will probably change rather dramatically with the proposed transfer and two of the budget accounts will be eliminated, staff is proposing that any changes presented to IFC must have the transfer in of revenue recorded appropriately as revenue. Senator Raggio asked what will happen, assuming the committee closes this budget on the basis presented in the staff recommendations, if the bill to transfer the authority, Assembly Bill (A.B.) 542, does not pass. Ms. Botts indicated this would not present a problem. She said the budgets will continue to be handled as they have been in the past. She pointed out the budgets were submitted and recommended by the Governor as if the transfer were not occurring, and the budgets would be closed with that in mind. If the transfer occurs, the budgets would be revised and brought to IFC. Ms. Botts noted there is no General Fund money in any of the CRC budgets. SENATOR RHOADS MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGES 1 AND 2 OF EXHIBIT D, INCLUDING A LETTER OF INTENT DIRECTING THE AGENCY TO PRESENT ITS AMENDED BUDGETS TO THE INTERIM FINANCE COMMITTEE IF THE TRANSFER OCCURS AND, WITHIN THOSE REVISED BUDGETS, TO RECORD ALL TRANSFERS OF REVENUE BETWEEN BUDGET ACCOUNTS AS REVENUE RATHER THAN AS REDUCTIONS TO EXPENSE. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * CRC Federal Pumping and Transmission Facilities - Page 1867 Ms. Botts said the only adjustments to this budget are those involving the transfer of the Statewide Cost Allocation Plan out of this budget and into the main operating account, since this budget would no longer be needed if the Southern Nevada Water System is transferred to the SNWA as proposed. SENATOR O'DONNELL MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 3 OF EXHIBIT D. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * CRC Research and Development - Page 1869 Ms. Botts said there is an adjustment in this budget reducing the balance forward to match the amount in reserve in FY 1996. Also, the agency had requested an increase in contractual services for activities related to water acquisition. The adjustments are reflected in the adjustments to expense on page 4 (Exhibit D). Continuing, Ms. Botts said the agency's host fund, which had been contained in this budget, is being transferred to the main operating budget so the host expenses can be supported by revenue from both water and power. Senator Raggio requested explanation of the comment in item 1 on page 4 of the closing action sheets. Ms. Botts said the commission was showing a larger balance forward than actually would be available in the first year of the biennium, according to the reserve account. The senator asked if the proposed action reduces the reserve. Ms. Botts replied it reduces the balance forward to match the reserve in the first year. Seeking further clarification, Senator Raggio asked if it is being suggested the committee consider an increase in the reserves. Ms. Botts replied no. She said the reserve actually decreases because the agency is seeking an increase in contractual services. SENATOR RAWSON MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 4 OF EXHIBIT D. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Power Marketing Fund - Page 1873 Ms. Botts said there is an adjustment to reserve in this budget and a reduction in the payback to the General Fund. She said the General Fund appropriations totaling $1.1 million were made quite some time ago and have been reimbursed at the rate of $120,000 per year over 10 years. The Executive Budget recommended payments of $120,000 in both fiscal years of the upcoming biennium; however, staff determined a full payment of $120,000 is not called for in the second year of the biennium, and in working with the Budget Division and the agency the amount of the reimbursement in FY 1997 has been reduced. Ms. Botts said that savings has been taken into account and balanced to reserve. SENATOR RAWSON MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 5 of EXHIBIT D. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Fort Mojave Development Fund - Page 1875 Reporting on the adjustments in this budget, Ms. Botts said all of the commission's Fort Mojave Valley land will be sold in the first year of the 1995-1997 biennium. When the budget was submitted and recommended by the Governor, the agency was contemplating land sales of $3 million per year (with authority for $4 million having been provided). A letter has recently been received indicating the agency has requested authority of $15 million in the first year of the biennium, because the sale of all property (with a total purchase price set at $14, 370,954) is anticipated in FY 1996. The $11 million increase in land sales income in the adjustments to revenue (page 6, Exhibit D) reflects the adjustment that was made to move all of the money forward to the first year of the biennium so the agency can effectuate the sale. Should some of the land not be sold, the remainder of the $15 million could be balanced forward as unused authority. Referencing item 2 on page 6 (Exhibit D), Senator Raggio inquired whether the litigation involving the Orion Land Development company is still hampering the sale of the Fort Mojave Valley land. Ms. Botts replied no and said it is her understanding the sale is scheduled to proceed in FY 1996. SENATOR O'DONNELL MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 6 OF EXHIBIT D. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Alfred Merritt Smith Water Treatment Plant - Page 1877 Ms. Botts said the adjustment was made in this budget "to match the balance forward to what will be available in reserve according to the budget." This is one of the budget accounts that will no longer be needed if the Southern Nevada Water System is transferred to the Southern Nevada Water Authority. SENATOR JACOBSEN MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 7 OF EXHIBIT D. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Division of Wildlife - Page 1961 Ms. Botts directed the committee's attention to the "remarks" component of the closing action sheets for this budget (Exhibit E) and reviewed the recommendations presented on pages 2 through 4. Senator Raggio called attention to the statement in item 1 on page 3 (Exhibit E) that the Budget Division indicated the equipment budgeted for the Habitat Biologist could be deleted since the Wild Horse Commission will supply all equipment. He inquired whether the proposed use of commission funds for such items is a legitimate use of the funds. Ms. Botts said she believes so, based on the fact the Habitat Biologist position would be responsible for reviewing land use and land management plans with regard to the impact of wild horses on the lands. Ms. Botts continued her review of the recommendations outlined on pages 2 through 4, Exhibit E. With respect to items 2 and 3 on page 3, she said the estimates of the amounts budgeted for unobligated reserve ($683,216 in FY 1996 and $485,308 in FY 1997) take into account the revenue that is expected to be generated by A.B. 212, which contains fee increases for the Division of Wildlife. Ms. Botts said there should be sufficient money available (with passage of A.B. 212). ASSEMBLY BILL 212: Makes various changes to provisions governing hunting and fishing licenses. Senator Raggio asked if the projected reserves include the augmented fees (contained in A.B. 212). Ms. Botts said they do. The senator observed the level of the reserve is rather low and inquired what will be done in the next biennium with respect to funding salary increases. Ms. Botts replied, "Raise fees, cut expenses." Senator Raggio noted the decline in the sales of hunting and fishing licenses as indicated in item 3. Ms. Botts affirmed sales have been declining. Ms. Botts proceeded with her review of the decisions and closing recommendations for this budget. Regarding item 4, Exhibit E, pertaining to two new positions, Senator Raggio asked whether two positions in the Division of Wildlife budget were funded from mining. Ms. Botts replied no. She said it is her understanding that mining is contributing approximately $500,000 per year, but the funds were not earmarked for specific positions. She deferred to Bob Guernsey, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, to further respond. Mr. Guernsey stated the wildlife agency last session approached the Senate Committee on Finance and the Assembly Committee on Ways and Means and requested additional positions to address increased mining activity in rural Nevada. The committees added two wildlife biologist positions last session for that purpose. When the mining funds, estimated at $500,000 per year, were initially received, there was some dispute as to whether it was earmarked. It was Mr. Guernsey's recollection the Senate Committee on Finance had not earmarked the money and had intended that it be used to support the entire agency. Continuing, Mr. Guernsey said the Division of Wildlife was experiencing considerable funding problems at that time, and the alternative to funding the positions with the mining funds would have been to make significant cuts in this budget (in the 1993 legislative session). Senator Raggio indicated his question was aimed at determining whether the two positions supported by the mining funds remain in the Division of Wildlife budget. Mr. Guernsey said yes. The senator asked if the additional funding from mining is still in this budget. Mr. Guernsey replied the approximately one-half million dollars from mining is in this budget. Ms. Botts observed the two positions are not earmarked for mining activities. Senator Raggio said this is understood, but his point was that funding of the two positions was made possible by the availability of the mining funds. Ms. Botts further explained the recommendations on pages 3 and 4. With respect to item 5, Exhibit E, Ms. Botts said there were several errors in the position roster of this agency. There were existing positions that were not reflected, as well as positions that needed to be changed, and the problems have been corrected by the Budget Division at the direction of the joint subcommittee. The corrections added $110,571 in salary costs in FY 1996 and $125,915 in FY 1997. Concerning item 8, Exhibit E, Ms. Botts said S.B. 230 was proposed by the agency, and recommended by the Governor, to create a separate interest-bearing account named the Wildlife Heritage Trust Fund. Only the interest earned in the previous year could be spent, and the money could be used for any project related to the mission of the Division of Wildlife. SENATE BILL 230: Establishes wildlife heritage trust account in state general fund. Funding for the new account would come from donations ($50,000), an increased number of big game auction tags ($325,000), and a new "Partners-in-Wildlife" second- chance drawing ($242,643). Ms. Botts reminded the committee members they had approved the budget account for the Wildlife Heritage Trust Fund pending approval of S.B. 230. Pertaining to item 11, Exhibit E, Ms. Botts referenced A.B. 231. ASSEMBLY BILL 231: Makes appropriation to division of wildlife of state department of conservation and natural resources for construction of airplane hangar at Minden airport. Ms. Botts explained the bill includes a onetime General Fund appropriation request of $250,000, which would provide a new hangar at the Minden Airport adjacent to the Division of Forestry's hangar to facilitate consolidation of the wildlife division's aircraft operations with the Division of Forestry. As indicated in item 11, page 4, Exhibit E, this "co-location" will permit cross-training of both agencies' pilots and, during periods of heavy wildland fire-fighting, enable the Division of Wildlife pilots to back up the forestry division's pilots. The cost of the building will be partially offset by a deposit to the General Fund of insurance settlement proceeds. Continuing, Ms. Botts noted the director of the State Department of Conservation and Natural Resources has indicated one of the wildlife division's three pilots may be eliminated after the three programs are consolidated. She said she has therefore recommended the amount of this pilot's salary be shown as vacancy savings in the budget in both years of the biennium. Should A.B. 231 be approved, and once the hangar is constructed and the programs are co-located, the position could be eliminated. If the bill is not passed, the position may or may not be eliminated after the division has evaluated the situation. Rather than eliminate the position in question, Ms. Botts budgeted its cost as vacancy savings. Reviewing item 12, page 4, Exhibit E, Ms. Botts said concerns have been expressed that the Division of Wildlife has not been spending its obligated reserve, consisting of funds from programs such as the Duck Stamp, Elk Damage, Auction Tags and federally funded Habitat Program, because it was using the funds for cash flow purposes "to operate in their regular account." The division distributed literature indicating its intention to "spend into" the obligated funds. The joint subcommittee has recommended that a separate, obligated reserve be established as a new budget account, and that funds from the above sources be placed in the separate account. Continuing, Ms. Botts said the Division of Wildlife may experience cash flow problems if the obligated reserve is transferred to another account; however, language has been included in the Authorized Expenditures Act that allows the division to borrow from the General Fund. The joint subcommittee recommends the language continue to be included in the authorizations act, but once the obligated reserves are placed in another budget the funds would be available to expend on the projects for which the money is collected. She said Brenda J. Erdoes, Legislative Counsel, has advised that the obligated reserve be established through a bill draft. Regarding a proposed letter of intent, Ms. Botts said the rent paid by employees should be sufficient to fund routine maintenance on division housing. It is recommended a letter of intent be sent directing the division to report to the 1997 Legislature on the adequacy of rental income and its relationship to the cost of maintenance on the agency's housing. Ms. Botts further stated the Budget Division has indicated its intention to examine the issue of employee housing in an attempt to achieve uniformity in this area. Senator Raggio asked Mr. Hataway if he wished to comment on any of the closing recommendations. Mr. Hataway replied no. After calling for a motion to close this budget, Senator Raggio praised the joint subcommittee and the staff for their efforts on what he said is always a difficult budget to handle. SENATOR O'DONNELL MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGES 1 THROUGH 4 OF EXHIBIT E, INCLUDING A LETTER OF INTENT AS DETAILED ABOVE. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Wildlife Obligated Reserve Fund - New Account SENATOR O'DONNELL MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AS PRESENTED ON PAGE 5 OF EXHIBIT E. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Ms. Botts called attention to the last page of the closing packet (page 6, Exhibit E), which contains the suggested language for the Authorized Expenditures Act pertaining to the Division of Wildlife. She said the language in section 7 is the same language that has been in the authorizations act for several sessions. The proposed language for section 12 contains a recommendation to continue dividing the motor vehicle fuel tax equally between the Division of Wildlife and the Division of State Parks. She said her adjustments include an increase in revenue to the wildlife division by approximately $90,000 per year, based on her projections of the revenue from this source. SENATOR O'DONNELL MOVED TO ADOPT THE LANGUAGE FOR THE AUTHORIZED EXPENDITURES ACT RELATIVE TO THE DIVISION OF WILDLIFE BUDGET AS INDICATED ABOVE. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * There was discussion on the committee's upcoming meeting schedule and agenda. Senator Raggio announced there will be a hearing on Thursday, June 8 at 10:00 a.m. to revisit S.B. 241, the bill providing for an increase in the number of commissioners on the State Board of Parole Commissioners. He noted the parole commissioners have been invited to the hearing, and it is hoped that recommendations on the commission's procedures, composition and qualifications will be offered at that time. He said the meeting will be an appropriate occasion for committee members to discuss any concerns they may have regarding the parole board. He added the administrator of the Division of Parole and Probation has also been invited to attend the hearing. SENATE BILL 241: Increases number of members of state board of parole commissioners. Senator Coffin said it was his understanding the commissioners have not been invited to, but rather summoned to, the hearing. Senator Raggio responded they have been invited, but to ease their situation a subpoena has been issued requiring their presence at the hearing. He indicated the commissioners requested the subpoena action. Senator Coffin inquired as to who issued the subpoena. Senator Raggio replied he issued the subpoena, as chairman of the Senate Committee on Finance. Alcoholism and Drug Rehabilitation - Page 1451 Brian M. Burke, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reported on the recommendations of the Joint Subcommittee on General Government delineated on page 6 of the closing packet (Exhibit F), with regard to the budget for the Bureau of Alcohol and Drug Abuse (BADA). Mr. Burke said the joint subcommittee recommended adding $1.3 million in General Fund appropriation over and above the Governor's recommended budget (item 3, page 6, Exhibit F). This appropriation would be divided equally between the 2 years of the biennium, adding $650,000 in each year. The subcommittee added this amount to help the BADA reduce the waiting list of clients seeking services. The agency indicates this funding would provide services to an additional 685 clients, Mr. Burke stated. Continuing, Mr. Burke said the subcommittee also recommended a letter of intent be written directing the agency to compile treatment outcome reports from providers who receive BADA treatment funding. Additionally, the subcommittee recommends additional federal Substance Abuse Prevention and Treatment (SAPT) funding amounting to $308,349 in FY 1996 and $298,193 in FY 1997 (item 2, page 6, Exhibit E). Mr. Burke said this was done to match the federal FY 1995 block grant award. Mr. Burke stated the full amount of the revenue augmentation is used to increase the prevention and treatment grant category. Regarding item 1, Exhibit E, Mr. Burke said this recommendation reflects rent and cost allocation adjustments, and the balance from the adjustments is placed in the prevention and treatment grant category. Pursuant to agency testimony, Mr. Burke stated, the request for a color printer (contained in decision module E-720) has been eliminated. Senator Raggio verified the additional General Fund appropriation of $650,000 per year is provided for the purpose of reducing BADA's waiting list. SENATOR MATHEWS MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT AS PRESENTED ON PAGE 6 OF EXHIBIT F. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Alcohol Tax Program - Page 1459 SENATOR O'DONNELL MOVED TO CLOSE THIS BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE GOVERNOR. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio informed the committee that with regard to the question raised by Senator Coffin as to issuance of the subpoenas, he had asked the legislative counsel if it is appropriate for the chair to issue the subpoenas and was informed that it is. However, as a precautionary measure he called for a motion to ratify the issuance of the subpoenas for the persons indicated. SENATOR O'DONNELL MOVED TO RATIFY THE ISSUANCE OF THE SUBPOENAS FOR THE PERSONS INDICATED, REQUIRING THEIR ATTENDANCE AT THE HEARING SCHEDULED FOR JUNE 8, 1995, FOR THE PURPOSE INDICATED ABOVE. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * In discussion prior to the vote, Senator Coffin said he would not oppose the motion, but he requested Senator Raggio to restate the purpose and focus of the hearing. Senator Raggio indicated he did not wish to discuss the subject matter of the hearing in detail at this time. He said the members of the State Board of Parole Commissioners were invited to come before the committee for the purpose of discussing parole procedures and to obtain recommendations from the commissioners as to desirable changes with respect to procedure, as well as recommendations relating to commissioners' qualifications in connection with S.B. 241. Further, the commissioners will be invited to indicate anything that would be relevant with reference to the recent incident involving the death of a Sparks police officer at the hands of a parolee. Senator Raggio stated, "This is not a dog-and-pony show. I want the committee to get their recommendations before we act on the bill." The meeting was adjourned at 6:40 p.m. RESPECTFULLY SUBMITTED: Sue Parkhurst, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance June 6, 1995 Page