MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session June 13, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 7:45 a.m., on Tuesday, June 13, 1995, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews GUEST LEGISLATORS PRESENT: Assemblywoman Jan Evans, Assembly District No. 30 STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Gary Ghiggeri, Principal Deputy Fiscal Analyst Ronald T. Steele, Program Analyst Marion Entrekin, Committee Secretary OTHERS PRESENT: John P. Comeaux, Director, Department of Administration Fred Dugger, Manager, Information Systems, Legislative Counsel Bureau Rose McKinney-James, Director, Department of Business and Industry Austin Stedham, President, Nevada Development Capital Corporation Bobbi Bennett, Member, Nevada Development Capital Corporation Sarah Adler, Nevada Director, United States Department of Agriculture Randy C. Day, Commissioner, Office of Nevada Commissioner for Veteran Affairs, Department of Motor Vehicles and Public Safety David Perlman, Administrator, Commission on Postsecondary Education, Department of Business and Industry Mary L. Peterson, Superintendent of Public Instruction, State Department of Education James R. Pagliarini, General Manager, Public Broadcasting Station KNPB, Channel Five Eric Cooper, Lobbyist, Las Vegas Chamber of Commerce Elizabeth Livingston, Lobbyist, Nevada Women's Lobby Jack N. Armstrong, D.V.M., Acting Administrator, Division of Agriculture, Department of Business and Industry Michael F. Meizel, Buildings and Grounds Division, Department of Administration Gary Simmons, Director, State Predatory Animal and Rodent Committee, Department of Business and Industry Frederick W. Dressler, President, Nevada Junior Livestock Show Board Elizabeth Williams, Program Assistant, Nevada Junior Livestock Show Board Stephanie D. Licht, Treasurer, Nevada Wool Growers Association Birgit K. Baker, Administrative Services Officer, Directors Office, Department of Business and Industry Commission for Women - Page 11 Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, said the Assembly Committee on Ways and Means removed the ongoing General Fund appropriation recommended in the Governor's Executive Budget for each year of the biennium, and have opted instead to process proposed legislation to remove the sunset by including a $10,000 appropriation for the expenses over the course of the biennium. Senator Raggio asked what expenses will be covered by the appropriation. Mr. Miles replied it is his understanding the $10,000 will cover the cost of meetings of the Commission for Women. John P. Comeaux, Director, Department of Administration, agreed with Mr. Miles that the $10,000 is to be used to cover the expenses in connection with commission meetings. Senator Coffin asked if the $10,000 will be provided as a one-shot appropriation. Mr. Miles explained the Assembly Committee on Ways and Means recommended the removal of $50,000 for Fiscal Year 1995 - 1996, and $41,000 for Fiscal Year 1996 - 1997, and approved a $10,000 "onetime" appropriation to be used for the 2-year period. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE ACTIONS TAKEN BY THE ASSEMBLY COMMITTEE ON WAYS AND MEANS TO INCLUDE A $10,000 BIENNIAL APPROPRIATION FOR EXPENSES OF THE COMMISSION, AND TO REMOVE THE SUNSET PROVISION. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Controller's Office - Page 73 As referenced in item 1 of Exhibit C, Mr. Miles explained the controller requested an increase in the office's printing budget due to the inflationary increases being imposed by the state printer, an addition of the maintenance contracts for some equipment that had been omitted from the budget, and the restoration of vacancy savings. Mr. Miles pointed out the Assembly Committee on Ways and Means did not agree to the restoration of Vacancy savings. SENATOR COFFIN MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS THAT WILL INCLUDE $9,300 FOR FISCAL YEAR 1995 - 1996, AND $11,147 FOR FISCAL YEAR 1996 - 1997 FOR PRINTING INFLATIONARY COSTS; AND $3,728 FOR FISCAL YEAR 1995 - 1996, AND $6,033 FOR FISCAL YEAR 1996 - 1997 FOR MAINTENANCE CONTRACTS' INFLATION COSTS. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Office of the Labor Commissioner - Page 807 Ronald T. Steele, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, referred the committee to the budget closing actions sheets (Exhibit D) from which he provided an overview of the suggested adjustments to this account. He reported the Joint Subcommittee on General Government recommends closing the Office of the Labor Commissioner's budget, as presented in the Governor's Executive Budget, with a change in funding for the positions recommended in decision unit M-200. The joint subcommittee also recommended the funding for four requested positions be placed in a Reserve account, and will require the commissioner to appear before the Interim Finance Committee (IFC) with a plan for the utilization of the positions, with updated performance indicators. The joint subcommittee requested the director of the Department of Business and Industry to review the staffing patterns of the Office of the Labor Commissioner, Mr. Steele related, to potentially shift existing employees from Carson City to Las Vegas. He explained this will address caseload increases in the south. To provide for the potential shift of employees, Mr. Steele said the subcommittee recommended funding the M-200 travel amounts with any unused funds reverting to the General Fund. Mr. Steele suggested a Letter of Intent be issued to request the Office of the Labor Commissioner to come before the IFC with a plan for the utilization of the four positions prior to release of funding. He pointed out the report to the IFC should also include information on the travel costs incurred as a result of transferring existing positions from Carson City to Las Vegas, updated performance indicators, and recommended restructuring plans. SENATOR O'DONNELL MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AND THE JOINT SUBCOMMITTEE REFLECTED IN EXHIBIT D. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR MATHEWS ABSTAINED FROM THE VOTE.) * * * * * Senator Raggio opened the hearing for discussion of Senate Bill (S.B.) 208. SENATE BILL 208: Makes appropriation to office of labor commissioner of department of business and industry for computer and office equipment. Senator Raggio indicated testimony concerning S.B. 208 was heard on March 23, 1995. He referenced Exhibit E, a memorandum from Rose McKinney-James, Director, Department of Business and Industry, dated June 6, 1995, in which she indicated the request, which totals $105,461, is for replacement equipment, computer upgrades, programming, and software for the Office of the Labor Commissioner. She emphasized the request does not include any equipment for new positions recommended in the Governor's Executive Budget. He noted the department has agreed to engage in a comprehensive restructuring of the agency during the biennium, and Ms. McKinney- James indicated this information is correct. Senator Raggio asked what type of restructuring is contemplated. Ms. McKinney-James said based on some of the discussions the department has had with the joint subcommittee, restructuring will involve how the labor commissioner's office will deal with prevailing wage calculations, staffing patterns, and the potential of shifting some employees to the southern part of the state to handle increased work load. Senator Raggio asked Ms. McKinney-James if the department will be willing to provide a report to the IFC at each of its meetings during the biennium, and Ms. McKinney-James replied, "Absolutely." SENATOR O'DONNELL MOVED TO DO PASS S.B. 208 WITH THE REPRESENTATION OF THE DIRECTOR OF THE DEPARTMENT OF BUSINESS AND INDUSTRY THAT A PROGRESS REPORT ON THE RESTRUCTURING OF THE OFFICE OF THE LABOR COMMISSIONER WILL BE FURNISHED TO THE IFC AT EACH MEETING OF THE COMMITTEE DURING THE INTERIM. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Legislative Counsel Bureau - Page 157 Senator Raggio reported that Lorne J. Malkiewich, Director, Legislative Counsel Bureau (LCB), presented an adjusted budget (Exhibit F) at the direction of leadership, and the reflected closing adjustments, items 1 - 7, were highlighted for the committee's information by Mr. Miles. Senator Rhoads asked if required legislation has been processed that will allow the LCB budget to be closed. Senator Raggio responded, "We have not done that, but we have asked for a proposed amendment. Instead of making a new division it can be accommodated by augmenting the fiscal division." Mr. Miles stated Senate Bill (S.B.) 224 is in the Senate Committee on Finance for consideration, and pertains to the budget process. He stated the bill, as drafted, would create a new division within the Legislative Counsel Bureau entitled the "Legislative Budget Office" and would require that office to create a legislative budget. SENATE BILL 224: Makes various changes regarding preparation of state budget and review of federal mandates and encroachments. Continuing, Mr. Miles said S.B. 224 was drafted to initiate the debate over the desirability of creating a Legislative Budget Office, and would create a new division within the Legislative Counsel Bureau. S.B. 224 will also keep the existing Fiscal Analysis Division in place which seems redundant, Mr. Miles stated. Mr. Miles distributed Exhibit G, a proposed amendment to S.B. 224, and advised the committee if they wish to process this bill, the proposed amendment will accomplish the deletion of language to facilitate creating a new division called the Legislative Budget Office; renaming the Fiscal Analysis Division the "Legislative Budget Office," and the retention of the existing Senate and Assembly Fiscal Analyst configuration to continue the practice of giving each house equal representation. Mr. Miles said there are some corollary issues that would have to be discussed concerning S.B. 224 that were not determined by the study committee, and are listed as items 1 - 9 commencing on the first page of Exhibit G. Mr. Miles reviewed the issues with the committee, including whether there should be a complete budget proposal document prepared by the proposed Legislative Budget Office similar to the Governor's Executive Budget. He pointed out the fiscal note for S.B. 224 includes computer system costs and some additional staff for the Fiscal Analysis Division. He said three new Program Analyst positions and a Secretary position would be needed, which would make the division's staff complement comparable to the current Budget Division. Mr. Miles asserted the key to a successful budget is the computer system developed around it. He referred to correspondence concerning a proposal for an automated system, and the related costs for the computer system, contained within Exhibit G. Senator Raggio inquired if the costs would involve a onetime initial purchase of the computer software. Mr. Miles replied, "Correct, the cost would relate to the creation of the software, and the initial equipment that would be added for the four positions, as well as additional other hardware needed to develop the system." Mr. Miles advised the committee if they were to process S.B. 224 as outlined, the budget would have to be augmented by the cost for the computer system. Senator Coffin asked: In looking through the bill (S.B. 224) regarding the committee that would control the office, I want to make sure we talk about the committee so that if we do this, we approach the construction of the budget in a spirit of bipartisanship or nonpartisanship if we can. I would hope that the committee, however it is constructed, would be comprised of an equal number of both parties. Mr. Miles stated Assembly Bill (A.B.) 210 proposes that a subcommittee of the Legislative Commission will be created after the election day of prospective members to the Senate Committee on Finance and the Assembly Committee on Ways and Means, but Mr. Miles opined a subcommittee should be available much earlier in order to prepare a legislative budget. ASSEMBLY BILL 210: Makes various changes regarding preparation of governmental budgets. Mr. Miles referred to page 4 of Exhibit G where it is suggested the chairman of the Legislative Commission shall appoint to the subcommittee four members of the Assembly Standing Committee on Ways and Means, designated by the speaker, and four members of the Standing Committee on Finance designated by the majority leader. It further suggests if any appointed members of the subcommittee do not stand for reelection or are not reelected, the chairman of the Legislative Commission shall appoint as a replacement persons designated by the speaker or the majority leader to be members of the Standing Committee on Ways and Means or the Standing Committee on Finance for the next ensuing legislative session. Senator Coffin commented: That paragraph tells the story. I would like to see some adjustments to that simply because we have a situation where we could make this work if we had equal representation of the parties. We have covered the issue of equal representation of the houses, four and four, but what I am afraid of is we start to create a partisanship fight through the interim when we usually are welcome to have those (fights) during the session when we are healthy....I think in the construction of our budget...if it is going to be the budget of this house and the budget of this branch of government, it ought to be done on a bipartisan basis. What you can see, for instance, in the present makeup of this committee is that you would be forced to essentially...if you followed the formula...appoint three Republicans and one Democrat. It would be easy to do on the other side. But on any other given time, the Assembly would have to have a majority on one side or the other and there could be a lot of partisan wrangling on this. I look at this as a positive step. I think we need an LBO [Legislative Budget Office] of some kind....I want you to consider the possibility of going ahead and trying to make them even simply because the cycle swings and it would be better for consistency. Senator Raggio responded: It would probably be inconsistent with the way budget committees work in any legislature. Certainly your party is not perennially going to be the minority party, but the budget should be built by the structure of the legislature. If your party is in the majority I would expect that party to have a majority on the committee, and certainly on the budget committee. I think it would be unusual to structure the committee on an equal membership in structuring the budget. The budget should reflect the consensus of the existing legislature as well as the incoming legislature. After the election in other states, these budget committees are structured to represent the makeup of the individual houses. I do not think we should depart from that. I would be opposed to that even if I were in the minority. Senator Coffin asked that this issue be followed up. He explained if he perceives the appointment of the subcommittee to be a problem, others may also see it in this manner. He opined communication should be maintained between the staff because, "You are now controlling our staff with what would be a partisan majority. In the interim...we would be introducing a partisan budget with a nonpartisan staff which will put pressure on our staff." Senator Raggio asked, "Don't we get a partisan Executive Budget? I think the same thing applies." Senator Coffin argued, "But we have one staff. That is my point. If you want to go to this step, we have to have a minority and majority staff." Senator Raggio asked Fred Dugger, Manager, Information Systems, Legislative Counsel Bureau, if the proposed costs reflected for computer and automated system costs are viable. Mr. Dugger replied in the affirmative. Senator Rawson remarked: We have protected the idea of the staff serving both parties, and I think one of the biggest mistakes we could make would be to begin to hire partisan staff. There is no question they are stressed, but they are able to manage it and keep an integrity. I really appreciate the way it works now, and I think if we were to start hiring partisan staff we would see our process deteriorate very quickly, and I would be very nervous about that. I am wondering if we should be processing Senate Bill (S.B.) 266 that puts an auditor or an analyst in the counsel bureau specifically for the federal mandates. Senate Bill 266: Requires research division of legislative counsel bureau to prepare certain information related to federal mandates and encroachments. Senator Coffin responded the last thing he wants to do is hire partisan staff. He suggested: If we could build into the legislation some means of making sure that all communications drafted for any member of the committee would be simultaneously made available to any other member of that committee, then I would not worry so much. We are breaking new ground here and I think if we go into this new procedure that is protection for a minority no matter if it is republican or democrat, because the flow of information is the control of the legislation. I think that would remove any squabbling when we presented our budget. Senator Raggio responded: I guess your perspective changes if you are in the majority or the minority. I think any member of the committee has always had the opportunity to request information. I know that you have, that has not been shared with this committee, and that is your privilege. Any member of the committee has always had the right to request information from staff and to my knowledge, I do not know of any occasion when the staff has refused any reasonable request of a committee member. I do not think we should change that. The staff has been above and beyond that, and I have not sensed any partisanship on the staff. The process works in other states. There are few occasions when each house is equally represented. Senator O'Donnell noted S.B. 224 provides for $82,000 for computer hardware and $420,000 for software, but the Interim Oversight Committee has not yet reviewed the proposed appropriation. If approved, he requested the funds be placed in the legislative budget to be reviewed prior to release. Prior to action being taken, Senator Raggio asked that an amendment be proposed to S.B. 224. SENATOR RAWSON MOVED TO REQUEST AN AMENDMENT TO S.B. 224 CONTAINING THE ISSUES CONTAINED IN EXHIBIT G AND INCORPORATING THE POSITION REFERENCED IN S.B. 266. SENATOR O'DONNELL SECONDED THE MOTION. Senator Raggio commented some of the issues concerning the extent of the budget do not have to be addressed in the amendment. From the chairman's position and what he understood to be the interim committee's position, the proposed budget would be a complete document similar to the Executive Budget to be submitted to the Legislature as early as feasible. Certainly on or before the time the Executive Budget is delivered, he said. Senator Raggio also pointed out the proposed budget would be comparable to the appearance and style of the Executive Budget obviously in the form now approved. He said many of the issues will be developed after the process begins. He remarked, "You have to walk before you can run with this." THE MOTION CARRIED UNANIMOUSLY. * * * * * Since Senator Raggio felt there is consensus for adding the staff and the costs needed for the proposed Legislative Budget Office, with the understanding there should be a review made by the Oversight Committee of equipment and software, the chairman asked for a motion from the committee to include these items. SENATOR RHOADS MOVED TO ADJUST THE BUDGET WITH THE ADJUSTMENTS INITIALLY OUTLINED IN EXHIBIT F REFLECTING A TOTAL DECREASE OF $32,113 FROM THE BUDGET, AND WITH THE ADDITION OF THE AMOUNTS NECESSARY FOR THE NEW POSITIONS, COMPUTER EQUIPMENT, SOFTWARE AND MAINTENANCE FOR THE PROPOSED LEGISLATIVE BUDGET OFFICE, AND THE POSITION OF LEGISLATIVE ANALYST. SENATOR O'DONNELL SECONDED THE MOTION. Senator Coffin inquired if the issue of whether or not there will actually be a Legislative Budget Office will be contained within the bill (S.B. 224). Senator Raggio answered in the affirmative, and qualified the aforementioned motions will only add to the cost of funding for the proposed budget. Senator Jacobsen expressed his hope with the amount of revenue being placed into computer equipment and software for the proposed budget office, the new system will be compatible with the existing computer system. Senator Raggio stated Senator O'Donnell's reference committee will have the final decision regarding the computer equipment and software. THE MOTION CARRIED UNANIMOUSLY. * * * * * Parole and Probation - Page 1849 Gary Ghiggeri, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, read from prepared testimony (Exhibit H) regarding the budget closing recommendations of the Joint Subcommittee on Public Safety/Natural Resources/Transportation referenced in the budget closing action sheets (Exhibit I). Senator Raggio asked what is the function of the Program Assistant IVs included in the revised budget, and recommended by the joint subcommittee. Mr. Ghiggeri responded the Program Assistant IVs will handle warrants, interstate compact activities, and preparation of necessary paperwork needed for parole board hearings. Senator Raggio asked if this will release for other duties some parole officers who are now performing those functions. Mr. Ghiggeri responded this will facilitate the deployment of 10 existing Parole and Probation Officers that were performing those duties to supervision of offenders in the community. Mr. Ghiggeri pointed out funding was recommended in the Governor's Executive Budget and is included in the recommended closing by the joint subcommittee (Exhibit I) to provide for the operation of an Assessment and Lifeskills Program in Reno and Las Vegas, and for the operation of an expanded Residential Confinement Program to include nonviolent first and second-time offenders, and the offenders in that program will be utilizing the house-arrest ankle bracelet. Mr Ghiggeri said the Assessment and Lifeskills Program is projected to "deflect" 14 prison admissions per month, which is projected to reduce the average prison population by 61 inmates in Fiscal Year 1996, and 179 inmates in Fiscal Year 1997. The expanded Residential Confinement Program is projected to reduce the average prison population by 141 inmates in Fiscal Year 1996, and 148 inmates in Fiscal Year 1997. Mr. Ghiggeri referred the committee to page 1 of Exhibit I and pointed out there is an increase shown in the charges for "house arrest" to reflect the charges to the offenders for participation in the Residential Confinement Program. The Budget Division requested, and the joint subcommittee is recommending, the addition of the state substance abuse coordinator in the Lifeskills and Assessment Program, Mr. Ghiggeri stated. He said the transfer of the position to this program will enhance the Lifeskills Program since it will significantly target drug and alcohol abuse among criminal offenders. While no monetary adjustment was made to the Division of Parole and Probation's operating budget, the joint subcommittee is recommending the division move towards the use of midsize vehicles, and have recommended the funding provided to the State Motor Pool Division be adjusted to facilitate the purchase of 20 midsize vehicles for lease to the Division of Parole and Probation. Although the estimated cost for midsize vehicles is more than what would be expended for the current compact size vehicle, the movement towards midsize is recommended as a safety enhancement, Mr. Ghiggeri said. Senator Raggio asked if the recommendations made by the joint subcommittee fully support the proposal that was presented by the Division of Parole and Probation. Mr. Ghiggeri responded in the affirmative. He indicated in the committee's review of the closing sheets (Exhibit I) it should be noted there are a number of items that were adjusted based upon worker-driven and caseload costs. Senator Raggio indicated he has received a number of letters suggesting that the salary levels for the Division of Parole and Probation are inadequate. He asked if there was discussion by the joint subcommittee on the issue of salaries. Mr. Ghiggeri replied he does not recall any presentation on that subject in the subcommittee hearings. Senator Raggio noted the Budget Division has recommended upgrades in the Nevada Highway Patrol Division, and inquired if any such upgrades have been recommended for the Division of Parole and Probation. Mr. Comeaux responded, "No, sir." Senator Raggio asked if comparisons have been made in the level of pay of parole and probation officers with other law enforcement salaries. Mr. Comeaux stated within the state system, the administration did look at the comparability of salaries for parole and probation officers, correctional officers, capitol policemen, and several others, in connection with their review of the highway patrol salaries. The administration did not compare the salaries to outside agencies, Mr. Comeaux clarified. Senator Raggio asked if the administration would have any objection to the committee requiring an occupational study of the positions to be performed by the Department of Personnel. Mr. Comeaux replied the administration will not object to an occupational study. He said this study was planned to be conducted during the interim period anyway. Senator Raggio said an occupational study is of the highest priority, and asked Mr. Comeaux for his assurance it will be requested so that a letter can be sent to the Division of Parole and Probation regarding the committee's request. Senator Coffin noted the highway patrolmen will soon receive a two- grade level salary increase. He asked the grade level of parole and probation officers. Mr. Comeaux replied, "Grade 34." Senator Coffin said: There was a great deal of testimony heard recently, and in the discussion relating to the "Cameron" case, there was a lot of talk about the turnover in the P & P [Division of Parole and Probation]. There is no question about the risky business these people are involved in, and the kind of customers they have to deal with...and deal with them on their home turf versus in the streets where an officer has a little better chance as opposed to going to somebody's home. What would the fiscal impact be if we raised the P & P people to grade 36? Mr. Comeaux replied when the issue of the salary for officers of the highway patrol first came up, the administration did review the law enforcement type positions, and the Department of Personnel prepared estimates of the cost to move all of the law enforcement positions up two pay grades. (Mr. Comeaux stated he will provide the committee with this information right away.) He explained the reason why the administration recommended the highway patrol be adjusted at this time, and not everyone else, was there seemed to be a particular problem with the highway patrol that could cause their turnover to increase significantly. Historically, their turnover has not been any worse than the Department of Prisons, Division of Parole and Probation, or any of the other positions that are comparably placed in the state's pay package, Mr. Comeaux said. Senator Coffin asked how many parole and probation officer's there are, and the cost to increase each grade. Senator Coffin explained to the chairman he wanted to get a feel for the fiscal impact of a grade change now rather than to wait for an occupational study to be completed. Mr. Comeaux said he can provide that information to the committee later this morning. Senator Raggio pointed out that staff has indicated if a grade increase is considered, the information will be contained in the classified pay bill. Mr. Ghiggeri called the committee's attention to a narrative reflected at the top of page 4 of Exhibit I concerning the transition towards an automated system for the Division of Parole and Probation. He explained on April 15, 1995, the Budget Division recommended that funding be provided to initialize the automation of the division, and the recommended closing provides for two positions. He said the joint subcommittee proposed the initial equipment portion of approximately $332,000 be added to Assembly Bill (A.B.) 236. ASSEMBLY BILL 236: Makes appropriation to division of parole and probation of department of motor vehicles and public safety for replacement and purchase of various equipment. Mr. Ghiggeri said the Assembly Committee on Ways and Means has processed A.B. 236, and funding in the amount of $332,464 for the equipment has been approved. Senator Raggio asked what action was taken on the budget by the Assembly Committee on Ways and Means. Mr. Ghiggeri responded the assembly committee closed the budget in accordance with the recommendations of the joint subcommittee, and requested that a Letter of Intent be issued that the new midsize vehicles be provided to the parole and probation officers that provide supervision to offenders. Senator Jacobsen noted there is a request for increased space for division offices located in Las Vegas and Reno, but no increased space has been recommended for the division's Carson City office that he feels is cramped. Mr. Ghiggeri said there is funding included in the budget for increased staff, and additional rent for the Carson City office. He speculated the funding was recommended by the Governor, and explains why an adjustment is not reflected for the Carson City office in Exhibit I. He said there is an additional amount recommended for rent of approximately $4,500 in Fiscal Year 1996, and approximately $6,300 in Fiscal Year 1997. SENATOR RAWSON MOVED TO ADJUST THE BUDGET IN ACCORDANCE WITH THE JOINT SUBCOMMITTEE RECOMMENDATIONS REFLECTED IN EXHIBIT I, AND TO INCLUDE A LETTER OF INTENT DIRECTING AN OCCUPATIONAL STUDY BE PERFORMED WITH REFERENCE TO THE SALARIES OF THE PAROLE AND PROBATION OFFICERS. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Parole Board - Page 1857 Mr. Ghiggeri highlighted the adjustments reflected on pages 6 and 7 of Exhibit I. He said the subcommittee's recommendation for the closure of the board's budget results in an additional $13,000 of General Fund dollars in the first year of the biennium, and a reduction of approximately $14,000 in the second year of the biennium. The subcommittee also recommended hiring a new parole board commissioner on July 1, 1995 instead of September 1995 as recommended in the Governor's Executive Budget. They have made that recommendation predicated upon the anticipated opening of the Lovelock Correctional Center on July 1, 1995. Senator Raggio asked if the Governor will be able to appoint a new commissioner that quickly. Mr. Comeaux replied the Governor has already got two appointments that will expire on June 30, 1995, and the appointment of a new commissioner to serve on the State Board of Parole Commissioners will bring that number to three. Mr. Comeaux doubts there will be enough time for the appointment to take place by July 1, 1995. Mr. Ghiggeri said there are a number of technical adjustments reflected on pages 7 and 8 of the closing sheets (Exhibit I), and he highlighted the major adjustments with the committee. He pointed out the joint subcommittee spent a great deal of time discussing training for the commissioners, and this resulted in an increase of the board's training allotment from $1,907 per year, as recommended by the Governor, to $10,000 in Fiscal Year 1996 and $2,000 in Fiscal Year 1997. Mr. Ghiggeri remarked the joint subcommittee felt it is important to provide adequate training to the board's commissioners. They also felt it would be beneficial if the board can arrange to have the trainer come to Nevada to provide training on site. Senator Raggio noted that attached to Exhibit I is a copy of the proposed qualifications for parole board members. Mr. Ghiggeri interjected there is legislation required to increase the size of the board from six to seven members, and there are currently a number of bills pending that will address this issue. He said the attachment to Exhibit I is a suggested bill draft request (BDR) to add qualifications for the parole board members. Senator Raggio commented he reviewed the proposed BDR and believes the suggestions outlined are good ones. With the committee's approval, he will review the proposed BDR with the chairmen of the Assembly Committee on Ways and Means in order to arrive at a single bill to be processed that will add a new commissioner and the qualifications for the board members. He assured the committee this will be done with the understanding the Interim Study Committee will again review the issue. Senator Raggio pointed out the process should be started, and it will be a major step towards clarifying the type of qualifications the members of the board should have. Directing his comments to Mr. Comeaux, Senator Raggio remarked it will be helpful to the administration as well to outline some basic qualifications, and Mr. Comeaux agreed with his suggestion. SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS OF STAFF AND THE JOINT SUBCOMMITTEE. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio said he would provide a report to the committee regarding the discussion with the Assembly Committee on Ways and Means regarding the qualifications of the parole board members. Senator Raggio opened the hearing for discussion of Assembly Bill (A.B.) 244. ASSEMBLY BILL 244: Makes appropriation to department of business and industry for operating expenses of program to provide small businesses with access to financing not otherwise available. Assemblywoman Jan Evans, Washoe County Assembly District No. 30, testified in support of the passage of A.B. 244 to create a capital fund to provide financing for small businesses in Nevada. Mrs. Evans said the private capital fund will target small and medium sized businesses which may not qualify for traditional financing, but whose continued growth and increased profitability expand and diversify the economic base by creating and retaining good jobs in Nevada. A.B. 244 provides a number of requirements upon the private corporation contracting with the Department of Business and Industry, Mrs. Evans said. One requirement before state funds are released is that the contracting private corporation must have at least $3 million in legally-binding commitments, or such greater amount as the director determines appropriate. Senator Raggio asked for information pertaining to the extent of commitments that are presently available. Mrs. Evans said this information will be included in testimony that will be provided today. Austin Stedham, President, Nevada Development Capital Corporation (NDCC), supports the passage of A.B. 244 that he feels is critical to the State of Nevada to provide the funding mechanisms in the economic development processes within the state, and to diversify the economic base. In response to Senator Raggio`s inquiry, he stated there has been $1 million committed at this time toward the establishment of this fund. The state is being asked to appropriate $200,000 for the operation of the fund itself, to be matched from funds committed by the United States (U.S.) Department of Agriculture (USDA) through their Rural Nevada Development Corporation as well as other sources. Mr. Stedham stated the passage of A.B. 244 is necessary to ensure that the funds invested are made available for lending to worthwhile new industries, or expanding industries, that are unable to obtain commercial financing through normal means due to cash flow problems or a weak balance sheet, yet are corporations that have a good chance of "making it." Senator Raggio asked what is the likelihood of reaching $3 million in legally binding commitments. Mr. Stedham replied, "Extremely viable." Senator Raggio inquired if there is a specific entity that has been identified to manage the fund. Mr. Stedham said partnerships have been entered into with the Rural Nevada Development Authority and the NDCC that will initially manage the fund. Senator Raggio asked if these are private corporations, and Mr. Stedham replied one is a public and the other a private corporation. Senator Raggio said the language of the bill specifies the funds may be used to contract with a private corporation to manage a privately capitalized fund or pool. Rose McKinney-James, Director, Department of Business and Industry, submitted Exhibit J, a packet of material in support of A.B. 244, and said the private corporation that is envisioned is the NDCC which is a corporation that has been in place for 1 year. NDCC is currently engaging in additional subcontracts to assist them with the professional support for the corporation, she stated. Senator Raggio asked if this is permissible under the terms of the bill, and Ms. McKinney-James responded, "Yes." Senator Coffin noted article 8, section 9 of the Constitution prohibits the state from lending funds to businesses. Ms. McKinney-James said the appropriation would be limited to providing the support for the initial operating costs and salaries, but precluded from any use with respect to the actual lending of dollars. Senator Raggio asked Ms. McKinney-James if she would be adverse to a requirement that the NDCC report its progress on the commitments to the IFC at each of their meetings. Ms. McKinney-James asserted, "This is a privately-funded and privately capitalized private-sector initiative, and the Department of Business and Industry will be happy to periodically report to the IFC." Senator Raggio reiterated the committee wants the NDCC to report the progress of the binding commitments that are required before the funds can be utilized. Ms. McKinney-James stated she is in concurrence with Senator Raggio 's concerns. Bobbi Bennett, Member, Nevada Development Capital Corporation, said the enterprise is a privately-owned Nevada corporation that has been in business since 1983 to assist small business owners in obtaining financing for expansion. She stated they work with Nevada banks and also the U.S. Small Business Administration. She distributed Exhibit K, a letter dated June 13, 1995, she wrote in support of the passage of A.B. 244. She ended her testimony by saying the NDCC plans to grant loans only to credit-worthy business enterprises that cannot qualify for bank financing due to strict regulations the banking industry must comply with. Senator Raggio pointed out in view of a recent decision by the U. S. Supreme Court, the loans granted will not be based upon affirmative-action guidelines. Sarah Adler, Nevada Director, U. S. Department of Agriculture, indicated she is the state's director of what used to be called the Farmer's Home Administration, a department of the USDA, and said she is confident NDCC will serve the needs of rural Nevada, and she is in support of the passage of A.B. 244. She indicated she is involved in rural business financing and her agency will be placing grant funds as a match to the appropriation that is being requested through the passage of A.B. 244. Senator Raggio asked if the grant fund from the USDA is contingent upon any conditions. Ms. Adler replied it will be contingent upon the state having its 60 percent appropriation. Compared to the state's $200,000 appropriation, her agency will contribute 40 percent or $80,000. She stated she is currently seeking a 3-year investment from the USDA to support the grant. Senator Raggio asked if there is any danger the federal funds will not be available in view of congressional action. Ms. Adler replied there is some danger, but the federal grant funds at issue is what is used by the U. S. Congress to support this specific type of venture, and the funds are currently available. Senator O'Donnell said he read some information recently regarding some of the projects funded by the federal agency she represents, and inquired as to the amount of interest that will be charged. Ms. Adler said that is a decision that would have to be made by the board of directors of the NDCC at the time the loan funds are in place, and the loan terms will be flexible based upon the needs of the business, and the source of the loan proceeds. Senator O'Donnell asked if points will be charged and the necessary fees for processing the grant loan. Ms. Adler replied there has been some discussion about charging processing fees on a delayed time frame whereby the fees would not be assessed at onset, but 2 or 3 years later. She stated this method has been used successfully in other states such as Indiana and Massachusetts. Senator O'Donnell asked if the interest earned will be put back into the NDCC. Ms. Adler replied, "Yes it would. It would be taken back into the corporation, and then part of it will be used to revitalize the loan pool, and part of it will be used to pay the investor on their investment in the company." Senator O'Donnell said he did not see anything written in A.B. 244 that indicates how the $200,000 will be paid back to the state. Ms. McKinney-James said there is a provision in the bill that will allow for any of the funds not used to revert to the General Fund, but there was no provision made for a "payback" of these funds that are to be used as an incentive and to represent a commitment on behalf of the state toward the effort. Senator O'Donnell remarked, "I guess I would have a little problem with that....lf that was the attitude of your organization, you would be lending money with no consideration of return, and we [the state] want to make our money back." Ms. McKinney-James said the $200,000 will represent a commitment in behalf of the state, and an investment for which the return will be based upon stimulating the economy, identifying small businesses that are prone to generate significant employment for the state, and other forms of economic development. She commented the investment of the $200,000, considered "seed money" for operating costs, will generate a more significant payback down the road if the fund is successful. Senator Raggio closed the hearing on A.B. 244 and opened the hearing for discussion of Assembly Bill (A.B.) 237. ASSEMBLY BILL 237: Makes appropriation to Nevada commissioner for veteran affairs of department of motor vehicles and public safety for replacement of backhoe at Boulder City veterans' cemetery. Randy C. Day, Commissioner, Office of Nevada Commissioner for Veteran Affairs, said A.B. 237 will provide a General Fund appropriation of $42,000 to assist with the replacement of the (used) 1975 backhoe at the Boulder City veterans' cemetery. Donated funds are currently available, he said, to supplement the appropriation to allow the agency to purchase the backhoe that costs $54,900. Senator Raggio closed the hearing on A. B. 237 and opened the hearing for discussion of Assembly Bill (A.B.) 238. ASSEMBLY BILL 238: Makes appropriation to Nevada commissioner for veteran affairs of department of motor vehicles and public safety for improvements to veterans' cemetery. Mr. Day said the passage of A.B. 238 will provide a onetime appropriation of $237,200 for improvements to the veterans' cemeteries in northern and southern Nevada, and vault pre-burial. The funds would be matched by the federal government, and by in-kind use of existing land to accomplish the completion of five projects in the state including the retrofitting for the use of effluent water, and an eight-acre expansion for the cemetery in the south, and pavilion enclosure and road paving for the cemetery in the north. Senator Raggio closed the hearing on A.B. 238 and opened the hearing for discussion of Assembly Bill (A.B.) 241. ASSEMBLY BILL 241: Makes appropriation to commission on postsecondary education for computer hardware and software. David Perlman, Administrator, Commission on Postsecondary Education, Department of Business and Industry, said the passage of A.B 241 will provide a onetime General Fund appropriation of $ 17,300 for the development of a computerized data base and office management system to automate the agency's functions. The appropriation will provide four computers, four printers, and software to replace the employees' own computers brought from home, Mr. Perlman said. Closing the hearing on A.B. 241, Senator Raggio solicited testimony regarding Assembly Bill (A.B.) 243. ASSEMBLY BILL 243: Makes appropriation to department of education for support of nonprofit public broadcasting stations in Nevada. Mary L. Peterson, Superintendent of Public Instruction, State Department of Education, testified the one-shot funding being requested with the passage of A.B. 243 will provide funding to public television and radio in the State of Nevada. She said similar funding was provided during the 1991 legislative session, and she would recommend the funds be distributed in the same manner. She indicated the department has used a "base grant" and "incentive grant" to distribute the funds, and the department fully supports the passage of A.B. 243 that will provide a valuable educational service. Senator Raggio inquired if federal funds are available at this time. James R. Pagliarini, General Manager, Public Broadcasting Station KNPB, Channel Five, said funding for Fiscal Years 1996 and 1997 from the federal government has already been committed, and the costs will be less draconian than expected. He anticipates a 3.6 percent cut in federal funding for Fiscal Year 1996, and an 8.7 percent cut in funding for Fiscal Year 1997. Senator Raggio noted the original bill was for a one-shot appropriation of $200,000 and has since been amended to $300,000. He asked the reason for the amended appropriation request. Ms. Peterson replied the increase was at the request of Assemblyman Morse Arberry, Jr. (Assembly District No. 7), and she does not know the rationale for the increased appropriation request. Mr. Pagliarini distributed background material on Nevada public television and radio material to the committee (Exhibit L). He said public broadcasting by television and radio is available to approximately 99 percent of the state's population, and the funds that will be provided by the passage of the bill will be distributed not only to Las Vegas and Reno, but to a number of the rural stations that operate in Nevada. Senator Raggio asked Ms. Peterson to explain how the funding proposed in A.B. 243 will be allocated. Ms. Peterson answered when the funds were appropriated in 1991, the department developed a funding formula that was based on a base grant. She stated each of the stations received a base grant and an incentive grant. The incentive grant was determined by the amount of additional revenues that the particular radio or television station had coming in, so the funding is a combination of a base grant and incentive grant. Senator Raggio inquired if there is a set allocation between radio and television. Ms. Peterson answered 75 percent is allocated for public television, and 25 percent for public radio. Senator Raggio asked how the distribution percentage was determined. Mr. Pagliarini said the funding formula parallels how the federal funds are distributed, and reflects the operating costs of the two operations. He remarked it is much more expensive to operate television than radio. Eric Cooper, Lobbyist, Las Vegas Chamber of Commerce, stated he is representing Public Radio Station KNPR, Las Vegas, and is past chairman of the board of directors for that station. He explained public radio receives a smaller share of the grants. He opined Assemblyman Arberry may have placed an additional appropriation of $100,000 to A.B. 243 to help fund a small radio station located in Las Vegas operated by the Economic Opportunity Board. He stated radio station KNPR derives all of its support from its listeners and public radio, and grants such as will be appropriated through the passage of A.B. 243. Elizabeth Livingston, Lobbyist, Nevada Women's Lobby, urged support for the passage of A.B.243. Senator O'Donnell noted that 20 percent of the public television grant pool, and 20 percent of the radio pool will be split equally among all eligible stations. Mr. Pagliarini responded that is referred to as the base grant, and is an assurance that every station, no matter how small, will receive some funding to equalize their operation. The hearing was closed on A.B. 243 to hear testimony regarding Assembly Bill (A.B.) 247. ASSEMBLY BILL 247: Makes appropriation to division of agriculture of department of business and industry for maintenance and repair of facilities leased by division of agriculture. Jack N. Armstrong, D.V.M., Acting Administrator, Division of Agriculture, Department of Business and Industry, distributed a copy of a memorandum from Keith Marcher, Deputy Attorney General, dated April 4, 1995 (Exhibit M) concerning the renewal of a lease agreement for a building currently occupied by the division that is located in Reno. He stated part of the renewal provides for building upgrades. Dr. Armstrong commented for over 3 years the building has not had janitorial or building maintenance services, and the building and outside grounds have deteriorated. A.B. 247 will provide $15,985 of the total $26,180 needed to paint and repair the Reno-based building and parking lot as required by the lease agreement, he stated. Dr. Armstrong further indicated the appropriation represents the General Fund's portion of the repairs allocated to the budgets of the Plant Industry and Veterinary Medical Services. The balance of the $26,180 needed for the leasehold repairs will be paid from other budgets within the division that are not funded with General Fund appropriations. If A.B. 247 is approved, Dr. Armstrong pointed out the appropriation provided will also enable the Division of Agriculture to enter into a new lease agreement which will stipulate the landlord will be responsible for repairs and maintenance in the future. Michael F. Meizel, Buildings and Grounds Division, Department of Administration, said the amount that will be provided by the passage of A.B. 247 includes the funding necessary for building maintenance and repair. Testimony regarding A.B. 247 was concluded, and the hearing opened for discussion of Assembly Bill (A.B.) 248. ASSEMBLY BILL 248: Makes appropriation to division of agriculture of department of business and industry for trucks, safety clothing and equipment for plant industry program. Dr. Armstrong testified A.B. 248 will provide an appropriation of $170,617 to purchase trucks, safety clothing, and equipment for the Division of Agriculture. He said the primary expenditure of $150,000 is for one 30 ton truck, trailer, and hoist to replace the weights and measures truck currently in use in Las Vegas. He said the truck scheduled for replacement was purchased in 1974, and is in need of repair with 220,000 miles and 8,500 hours of operation. The appropriation will also include $19,100 for one gas testing truck and associated fuel tanks to supplement the gas testing program in Las Vegas. The gas testing truck is also scheduled to be used in Elko for 3 months of the year. An additional $1,517 for safety equipment for six inspectors funded in the Plant Industry budget account is also included in the proposed appropriation. Dr. Armstrong said the remaining $1,517 will be used for safety equipment for six inspectors funded in the Plant Industry budget. The safety equipment is requested due to Occupational Safety and Health Administration (OSHA) requirements to provide safety clothing for each inspector. Senator Raggio closed the hearing on A.B. 248 to allow for testimony to be heard regarding Assembly Bill (A.B.) 249. ASSEMBLY BILL 249: Makes appropriation to division of agriculture of department of business and industry for veterinary medical services. Dr. Armstrong testified A.B. 249 will provide a $46,643 General Fund appropriation to the Veterinary Medical Services program for two four-wheel drive vehicles to replace high mileage vehicles, laboratory equipment, replacement of six of the seven air conditioning units currently used by the Reno laboratory, and one 22 cubic refrigerator to store laboratory samples. Senator Raggio concluded testimony on A.B. 249 and opened the hearing for discussion of Assembly Bill (A.B.) 250. ASSEMBLY BILL 250: Makes appropriation to state predatory animal and rodent committee for equipment. Gary Simmons, Director, State Predatory Animal and Rodent Committee, Department of Business and Industry, testified A.B. 250 will provide a $13,780 General Fund appropriation for safety and control equipment. He said $10,080 will be used for safety equipment consisting of helmets and fireproof flight suits for use by field assistant staff who frequently conduct low level aerial hunting operations. The additional $3,700 is for one net gun and one tranquilizer gun (with scope) to replace and improve existing control capabilities required as a result of increased predator concerns . Senator Raggio closed the hearing on A.B. 250 and opened the hearing on Assembly Bill (A.B.) 251. ASSEMBLY BILL 251: Makes appropriation to Nevada junior livestock show board for gate panels to ensure safety of exhibitors, spectators and animals. Frederick W. Dressler, President, Nevada Junior Livestock Show Board, stated A. B. 251 will provide funding of $5,040 to replace existing gate panels to ensure the safety of exhibitors, spectators, and animals at annual livestock shows. He introduced Elizabeth Williams, Program Assistant, Nevada Junior Livestock Show Board, who said the panels currently used are over 20 years old, bent, broken, and dangerous to use. She stated the new gates will provide for the replacement of 36 ten-foot gate panels that have become damaged through their use and movement during livestock shows. Stephanie D. Licht, Treasurer, Nevada Wool Growers Association, added the association's endorsement for the passage of A.B. 251. Senator Raggio closed the hearing on A.B. 251 and asked for a vote on the bills heard by the committee today commencing with A.B. 237. SENATOR JACOBSEN MOVED TO DO PASS A.B. 237. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR JACOBSEN MOVED TO DO PASS A.B. 238. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR RAWSON MOVED TO DO PASS A.B. 241. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio requested that A.B. 243 be held pending discussion with the chairmen of the Assembly Committee on Ways and Means and asked for a motion on A.B. 244. Senator O'Donnell asked if there would be any way to include language that will provide for a repayment of the state's $200,000 appropriation after a period of 5 years if the venture is successful. He commented if successful, the state should have some type of repayment policy for the purposes of operation and garnishment of other investors. Senator Raggio responded there might be a question of federal funding being granted if the state requires repayment, even after an extended period of time. Ms. McKinney-James agreed with Senator Raggio the state will be faced with a dilemma if repayment is requested because of the match from the federal government through the USDA. In addition, she said part of what the department has been attempting to do in securing commitments from lending institutions, as well as the gaming and mining industry, has been based upon their view the state should make an investment. She opined the passage of A.B. 244 represents an investment in the long-term returns to be achieved by financing small businesses. Repayment will complicate the commitment, she said. Senator Rawson stated one of the serious shortfalls in the state's economic development policy is the lack of funds that will be provided by the passage of A.B. 244. SENATOR RAWSON MOVED TO DO PASS A.B.244. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR RHOADS MOVED TO DO PASS A.B. 247. SENATOR MATHEWS SECONDED THE MOTION. Senator Jacobsen objected to providing maintenance services to a building that is leased. He stated an inventory of buildings already owned by the state should be conducted with the idea of moving the Division of Agriculture's Reno-based building into a state-owned building. Senator Raggio stated as long as the state has a lease, the services ought to be provided as a part of the lease agreement. Birgit K. Baker, Administrative Services Officer, Director's Office, Department of Business and Industry, stated one of the things the department will review during the interim period is the possibility of relocating the Division of Agriculture. She stated the passage of A.B. 247 will involve only a 2-year lease of the Reno space during which time action to relocate the division will be actively explored. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR MATHEWS MOVED TO DO PASS A. B. 248. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR RHOADS MOVED TO DO PASS A.B. 249. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR RHOADS MOVED TO DO PASS A.B. 250. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR MATHEWS MOVED TO DO PASS A.B. 251. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * High Level Nuclear Waste - Page 1893 Mr. Miles presented an overview of the recommended technical adjustments to this budget account reflected in the budget closing action sheets (Exhibit N). With reference to Nevada Revised Statutes (NRS) 459.0085, the chairman raised the issue the Committee on High Level Radio Active Waste is comprised of three members of the Senate and four from the Assembly. He indicated there is a suggested BDR that will change the membership to equal representation of both the Senate and Assembly. Mr. Miles indicated the joint subcommittee also recommended transferring the agency back to the jurisdiction of the Governor's Office from the Department of Conservation and Natural Resources which has also been recommended by the administration. Senator Rawson stated there have been significant issues raised about the control in this agency. He asked, "How are we left as we leave session? Who will this person respond to? Have we made any changes at all?" Senator Raggio interjected the proposed adjustments to the budget account will change it. Mr. Miles concurred, stating the recommendations will place the agency under the control of the Governor's Office. He said the joint subcommittee was advised the director of the Department of Conservation and Natural Resources felt the department had no control over the agency in terms of work product. Senator Rawson remarked: There appear to be serious allegations regarding misuse of money. We have not determined any of the allegations to be factual, but there are questions...there is kind of disregard for direction from anybody in the division, which bothers me. Lets take the political issue away from this for a minute and talk about the organizational structure. It is not good government, and we ought to straighten it out. Let them go on with their mission. The Governor can determine what that mission is. I do not want to interfere, but there ought to be a proper administration. Senator Jacobsen commented: I certainly agree with Senator Rawson's comments. In the subcommittee we tried to deal with that. It was my preference to put it under the Department of Conservation and Natural Resources to make sure we corrected some of the items as far as outside contracts and things like that. Mr. Morros [the director of the Department of Conservation and Natural Resources] indicated he would accept it, but he did not want any strings attached to his judgement. I think that is where it truly belongs. Senator Raggio stated the agency is currently under the jurisdiction of the Department of Conservation and Natural Resources. Senator Rawson replied, "But there are strings." Senator Jacobsen said the joint subcommittee did not concur with leaving the agency under the Department of Conservation and Natural Resources, but opted in favor of placing it under the control of the administration. Senator O'Donnell articulated: I think there was some confusion during our acts of 1993 whereby we put their organization underneath Pete Morros. The attitude was `yes, this is where I work but I am still responsible to the committee'...and the committee was the High Level Nuclear Waste Oversight Committee. There was a problem with the span of control and chain of command. Since Mr. Morros was responsible for Mr. Loux [Executive Director, Agency for Nuclear Projects], he felt he should have some say in when and where he appeared for staff meetings....We have received an additional $6 million for oversight studies. To not have that chain of command, and span of control, will be a disservice to the community and citizens of the state...by not making certain that money is appropriately spent for oversight. There is a reason for an additional $6 million to be spent, and I think if we do not do all we can to make sure those dollars, and that agency, is monitored correctly will be doing a disservice. Senator Mathews stated during discussions that occurred in the joint subcommittee meetings, she had many concerns that Mr. Loux was not reporting to anyone. She opined the issue of whether the state will accept or not accept nuclear waste is a crucial issue that must be decided. She commented, "When I asked this person [Mr. Loux] who evaluates him, he said no one." Senator Mathews concluded Mr. Loux should be under the jurisdiction of someone with a "strong hand" who will be able to stay on top of the actions of the agency. Senator Jacobsen interjected he has never served on a more frustrating committee than the High Level Nuclear Waste Committee. He stated there is no continuity between Mr. Loux's office and the committee members. Senator Raggio asked, "What is the authority for the other commission?" Mr. Miles answered it is a statutory commission. Senator Jacobsen interjected, "That is the trouble. There is about three of us out there fumbling around. No continuity at all." Senator Raggio directed that the High Level Nuclear Waste budget be held pending further review and discussion. He adjourned the meeting at 10:30 a.m. RESPECTFULLY SUBMITTED: Marion Entrekin, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance June 13, 1995 Page