MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session June 30, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:25 a.m., on Friday, June 30, 1995, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews GUEST LEGISLATORS PRESENT: Assemblyman Lynn Hettrick, Assembly District 35 STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Jeanne L. Botts, Program Analyst Pamela Jochim, Committee Secretary OTHERS PRESENT: John P. Comeaux, Director, Department of Administration John W. Riggs, Concerned Citizen Harvey Whittemore, Lobbyist, Kal Kan, Inc. John E. Jeffrey, Lobbyist, Southern Nevada Central Labor Council, Chairman, California-Nevada Super Speed Ground Transportation Commission Robert Gagnier, Executive Director, State of Nevada Employees Association Michael R. Alastuey, Lobbyist, Clark County School District Ann Andreini, Administrative Assistant, Boards and Commissions, Governor's Office Phillip A. Galeoto, Lieutenant, South Division, Reno Police Department Senator Raggio opened the hearing on Assembly Bill (A.B.) 113 and invited Assemblyman Lynn Hettrick, Assembly District 35, to come forward and provide the committee with an overview of the bill. ASSEMBLY BILL 113: Makes contingent appropriation to Tricounty Railway Commission of Carson City and Lyon and Storey counties for restoration of railroad line from Virginia City to Carson City. Mr. Hettrick stated A.B. 113 provides a $5 million appropriation to the Tricounty Railway Commission for the Virginia & Truckee (V&T) Railroad reconstruction project. The appropriation is a loan and contingent upon the commission raising an additional $15 million in funding from private sources. The Nevada Department of Transportation will provide the commission with $2.2 million in grant funds for the construction of the Gold Hill Line Change. He indicated a private fundraising firm has been hired by the commission to raise $7 million for the project. In addition, he pointed out funds raised for the project will be placed with the Office of the State Treasurer and the state will keep all interest earned on these funds. The appropriation will be repaid from 6 percent of the ticket price or $1 per ticket sold, whichever is greater, explained Mr. Hettrick. He said the state will be given a first security interest in all V&T Railroad assets. The estimated annual tax revenues to the state amount to $343,753 which will be in addition to the $160,000 the state will receive annually for repayment of the loan. Senator Coffin asked if the Mr. Hettrick had information regarding the success rates of similar projects. Mr. Hettrick noted a handout (Exhibit C) has been distributed to the committee which provides information on the project's economic impact and an operational budget. John W. Riggs, Concerned Citizen, related the V&T Railroad is one of the most popular model lines in the United States. He said rail fans wholeheartedly support the project. Senator Coffin questioned who will be liable if a train is involved in an accident. Mr. Hettrick responded the V&T Railroad will be operated by a franchise, so the franchisee will be responsible for all insurance costs. He assured Senator Coffin the contract with the franchisee will contain a clause which will hold the State of Nevada harmless in these situations. Continuing, Senator Coffin inquired about the amount of insurance the franchisee will be required to carry. Mr. Hettrick replied the Tricounty Railway Commission will handle this issue with the franchisee. Senator Raggio closed the hearing on A.B. 113 and opened the hearing on Assembly Bill (A.B.) 224. ASSEMBLY BILL 224: Makes appropriation to department of education for distribution to local school districts. Mr. Hettrick explained the reprint of A.B. 224 appropriates $34 million from the state General Fund to the Department of Education for the following purposes: $300,000 to finance a study of the feasibility of reconfiguring Nevada's county school districts and $33.7 million will be distributed among the local school districts to meet identified needs. He pointed out 73 percent of the funds must be utilized for non-salary and non-operational expenses and stressed the funds do not replace the monies the school district would have otherwise spent on textbooks, computers, instructional material, and "so forth." The remaining 27 percent can be used for salaries and other operational expenses, remarked Senator Raggio. The funding is to be allocated on the basis of each school district's proportional share of basic support for Fiscal Year 1994- 1995. He indicated the Assembly Committee on Ways and Means added an additional $5 million to the appropriation to allow for purchase of more instructional materials, books, computer hardware and software. In reference to the feasibility study, Senator Raggio stated, "It may be the intent of this committee to earmark within the 73 percent up to that amount [$300,000] to accommodate such a study." Mr. Hettrick interjected, "I do not think there will be a problem with that because we [Assembly Committee on Ways and Means] wanted the 73 percent to go to benefit kids and if bifurcating the school districts will be beneficial to the kids, it would be more than reasonable to include the study within the 73 percent." Senator Raggio closed the hearing on A.B. 224 and opened the hearing on Assembly Bill (A.B.) 270. ASSEMBLY BILL 270: Makes appropriation to department of transportation for construction of highway between Patrick interchange of Interstate Highway No. 80 and Storey County. Mr. Hettrick stated the amended bill appropriates $1.5 million from the state General Fund to the Department of Transportation to be matched with $1 million from the State Highway Fund to pay for construction of a portion of highway and bridge over the Truckee River at the Patrick interchange on Interstate Highway 80. The new highway and bridge will provide access to an area in Storey County near the Tracy Power Plant which will open the area for economic development. If the interchange and bridge are built, Kal Kan, Inc. has proposed building a plant at the site which will double the county's assessed valuation. He noted the state should recoup the funds it has invested within 5 years. Senator Mathews asked why the Mustang Bridge could not be utilized by developers. Harvey Whittemore, Lobbyist, Kal Kan, Inc., replied the Mustang Bridge is located too far for easy access. He related any further development will be borne by the individual developers. Kal Kan, Inc. is ready to begin construction on the project, once the project receives approval. He said the state will recoup its $1.5 million appropriation within 1 year from sales tax revenues. In addition, the project will open up a large area of Storey County for economic development. Senator Coffin questioned when the Nevada Department of Transportation (NDOT) agreed to commit $1 million to the project. Mr. Whittemore responded he discussed this project with the former director of the NDOT, Garth Dull, many months ago. The NDOT indicated the department would recommend the project and the requested funding to its board of directors. Senator Jacobsen asked if the project will have an impact on wetlands or Indian artifacts. Mr. Whittemore answered the site has been evaluated for utilities and none of these factors have been encountered. The chairman closed the hearing on A.B. 270 and opened the hearing on Assembly Bill (A.B.) 271. ASSEMBLY BILL 271: Makes appropriation to account for local cultural activities. Mr. Hettrick explained A.B. 271 provides a $150,000 appropriation to support local cultural activities such as operas, concerts, ballets, public dances and various other activities. John E. Jeffrey, Lobbyist, Southern Nevada Central Labor Council, stated this program has been established for many years and is administered by the Musicians' Trust Fund. In the past, he indicated, the fund provided matching funds, but he is not certain these funds are presently available. He stressed there are no administrative fees charged for the allocation of the funds. The activities are free to the public and presented in Nevada's public parks, hospitals and other institutions. The funding pays the costs for musicians, singers, dancers, technicians and costs associated with transporting the performers to and from the event. Senator Jacobsen commented he would like to see a prison band formed. Mr. Jeffrey said he will look into the matter. Senator Raggio closed the hearing on A.B. 271 and opened the hearing on Assembly Bill (A.B.) 351. ASSEMBLY BILL 351: Makes appropriation to City of Las Vegas for California-Nevada Super Speed Ground Transportation Commission. Mr. Hettrick stated A.B. 351 appropriates $250,000 from the General Fund to support the activities of the California-Nevada Super Speed Ground Transportation Commission. He indicated the Assembly Committee on Ways and Means supports the funding request because the committee members feel there is still a good opportunity to establish a superspeed train between California and the City of Las Vegas. The funding is necessary to help the commission remain active and to fund a study in conjunction with the state of California on ridership projections. The City of Las Vegas and Clark County will provide matching funds if the state appropriates the funding. Senator Raggio asked what the status is for the California-Nevada Super Speed Ground Transportation Commission. Mr. Jeffrey, speaking in his capacity as Chairman, California-Nevada Super Speed Ground Transportation Commission, testified the project came to a standstill in 1992 due to the world economy. He said a major obstacle has been overcome with the permission of the United States Congress to utilize freeway corridors for track right-of-ways. In addition, tax free bonds are now available for this type of project, remarked Mr. Jeffrey. He voiced concern that if the commission is not funded, then it will take another generation before interest in the project is rekindled. Senator Coffin inquired if the appropriation has always been made to the City of Las Vegas as opposed to the commission. Mr. Jeffrey responded the City of Las Vegas receives the funding, then tranfers the monies to the commission. The chairman closed the hearing on A.B. 351 and opened the hearing on Assembly Bill (A.B.) 406. ASSEMBLY BILL 406: Makes contingent appropriation to Clark County for improvements to fairgrounds for Clark County fair. Mr. Hettrick stated A.B. 406 appropriates $250,000 to Clark County for improvements to the Clark County fairgrounds located in Moapa, Nevada. Clark County will match the state appropriation on a dollar-for-dollar basis prior to release of any funds. The funding will assist in constructing an animal pavilion and improve restroom facilities. Senator Raggio closed the hearing on A.B. 406 and opened the hearing on Assembly Bill (A.B.) 443. ASSEMBLY BILL 443: Establishes program to pay fees and other related costs for classes taken at University and Community College System of Nevada by dependent children of certain public employees killed in line of duty. Mr. Hettrick related A.B. 443, as amended, establishes a trust fund for the education of dependent children of policemen, firemen or officers of the Nevada Highway Patrol who are killed in the line of duty. He pointed out financial assistance will be provided to these children if they pursue an undergraduate degree within the University and Community College System of Nevada. The bill provides a $20,000 appropriation from the General Fund to the trust fund. He expects ongoing funding to be provided by private donations and grants. Senator O'Donnell commented this subject was discussed in a joint subcommittee meeting and indicated he is pleased that a bill was drawn up to address the matter. Mr. Hettrick indicated the bill was amended to include children of volunteer firemen. Robert Gagnier, Executive Director, State of Nevada Employees Association (SNEA), testified he supports the bill's concept, however, the measure is discriminatory because it does not include state fire fighters, parole and probation officers, and correctional officers. Senator Raggio said Mr. Gagnier's suggestion is meritorious, but it is too late in the session to amend the bill. Mr. Gagnier remarked he understands the situation and indicated the SNEA will request that the legislation be amended next session to include the additional firemen and peace officers. Senator O'Donnell agreed with Mr. Gagnier's stance and maintained he will support a request to review the issue next session. Senator Coffin related, when action is taken on the bill, he will move to amend to include the categories suggested by Mr. Gagnier. Senator Raggio asserted it might be difficult to obtain an amendment at such a late date because of the large backlog on amendments. He assured Senator Coffin the committee will consider amending the bill. The chairman closed the hearing on A.B. 443 and opened the hearing on Assembly Bill (A.B.) 458. ASSEMBLY BILL 458: Makes appropriation to Churchill County School District for Turnabout AmeriCorps Child Care Program. Mr. Hettrick related A.B. 458 appropriates $20,000 each year of the next biennium to Churchill County for its required match for the Turnabout AmeriCorps Child Care Program. The program is a national initiative which provides education to young mothers under the age of 17 who are at risk of dropping out of high school because of lack of affordable child care. Senator Raggio closed the hearing on A.B. 458 and opened the hearing on Assembly Bill (A.B.) 734. ASSEMBLY BILL 734: Makes appropriations for support of civil government of state. Mr. Hettrick explained A.B. 734 is the General Appropriations Act that provides for the operation of Nevada's state government for the 1995-1997 biennium. The chairman closed the hearing on A.B. 734 and opened the hearing on Assembly Bill (A.B.) 735. ASSEMBLY BILL 735: Increases compensation of certain employees of senate and assembly. A.B. 735 increases and establishes the compensation for employees of the Senate and the Assembly, remarked Mr. Hettrick. He pointed out the salaries for session employees have been increased 7 percent. Senator Raggio closed the hearing on A.B. 735 and opened the hearing on Assembly Bill (A.B.) 737. ASSEMBLY BILL 737: Apportions state distributive school account and revises provisions governing administration of public school money. Mr. Hettrick noted A.B. 737 provides state aid for Nevada's school districts for the coming biennium. The statewide average basic support per pupil increases from $3,323 in FY 1994-1995 to $3,497 in FY 1995-1996 and to $3,621 in FY 1996- 1997. Senator Raggio stated the bill is consistent with the action taken by the Joint Subcommittee on Human Resources/K-12 and referred the committee to Bill Draft Request (BDR) S-2171. BILL DRAFT REQUEST S-2171: Authorizes installment purchase contracts for purchase of upgrade for computer mainframe by department of information services. The chairman said the bond counsel has indicated the language in BDR S-2171 is necessary to accommodate certain concerns the counsel has regarding installment contracts. Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, indicated the upgrade for the computer mainframe for the Department of Information Service has been delivered, but cannot be installed because financing has not been arranged. He noted the bond counsel is concerned because the financing approved in the General Appropriations Act extends beyond the next biennium. A legal opinion from the Office of the Attorney General indicates there is certain statutory language which is required in order to allow the payments to extend into the following biennium. SENATOR RAWSON MOVED FOR COMMITTEE INTRODUCTION OF BDR S-2171 AND TO DO PASS THE MEASURE ONCE IT IS ASSIGNED A SENATE BILL NUMBER. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio reopened the hearing on A.B. 734 and noted the bill was originally heard in committee on June 28, 1995. He asked if the measure has been amended since it was heard by the committee. Mr. Miles responded the legislation has not been changed and it reflects the joint action of the Senate Committee on Finance and the Assembly Committee on Ways and Means. He noted the State Climatologist's position has been moved to the Director's budget of the Department of Natural Resources and Conservation as a line item. However, the funding source for the position was not moved into that budget, so presently the position is unfunded. He said the committee decided to prepare a Letter of Intent requiring the department to apply to the Interim Finance Committee (IFC) for the funding, but since this discussion, it has been suggested the funding for the position be attached to Assembly Bill (A.B.) 228. ASSEMBLY BILL 228: Makes appropriation to office of the governor for enhanced security system for governor's mansion and to director's office of state department of conservation and natural resources. Senator Raggio commented if the committee does not have any questions on A.B. 734 he would like to take action on the bill. SENATOR COFFIN MOVED TO DO PASS A.B. 734. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * The chairman reopened the hearing on A.B. 737 and requested Jeanne L. Botts, Program Analyst, Fiscal Division, Legislative Counsel Bureau, to review the legislation for the committee. Ms. Botts distributed a summary sheet (Exhibit D) on the Distributive School Account (DSA) comparing the Governor's recommendations to the legislatively approved amounts. She pointed out some minor changes were made to the DSA after the joint subcommittee and the Senate Committee on Finance closed the budget, because Assembly Bill (A.B.) 631 changes the formula for the distribution of revenue received from the federal government for mineral land leases. ASSEMBLY BILL 631: Revises distribution on revenue received from lease of federal land. Currently, the first $10 million from this source is disbursed to the DSA and any excess over the $10 million is distributed 25 percent to the DSA, 50 percent to the counties and 25 percent to the Department of Business and Industry for grants. Since the revenue from the mineral land leases has never exceeded $10 million, remarked Ms. Botts, the amended version of A.B. 631 provides that the first $7 million collected will be disbursed to the DSA and any excess over this amount will be divided as follows: 25 percent to DSA, 75 percent to the county in which the mineral lands are leased, and 25 percent of the 75 percent will go to the local school district. She noted A.B. 631 will take effect July 1, 1996 and turned the committee's attention to Exhibit D. Ms. Botts pointed out the legislatively approved amount for mineral land lease revenues is $7,150,144, however, the Governor's recommendation is $7,600,577. Because the amount approved by the Legislature is $450,000 less than what the Governor recommended, the General Fund appropriation to the DSA has been increased by this amount. She said this adjustment is the only change made to the DSA after it received committee approval. Senator Raggio stated it is his understanding the adjustment was made as a result of an opinion furnished by the Legislative Counsel as to the appropriate usage and allocation of the federal funds. Ms. Botts responded, "That is correct." Continuing, Ms. Botts commented the statewide average basic support for students is $3,497 in FY 1995-1996 and $3,621 in 1996-1997. She indicated this amount of funding includes the cost of school district employee salary increments for additional years of service or training and the amount necessary for school districts to grant a salary increase in FY 1995-1996 which will be approximately 4 percent greater than the average salary for FY 1993-1994. The 4 percent salary increase was based upon the average salary of a teacher reported in the Nevada Department of Education's salary survey of licensed personnel on October 1, 1994. Funding for an additional salary increase of 3 percent is included for FY 1996-1997, related Ms. Botts. She mentioned it is up to the local school districts, through negotiations with their employee groups, to determine the actual amount of raise the employees will receive. In reference to the Special Education Units listed on pages 4 and 5 of the bill, Ms. Botts pointed out the units have been increased from 1645 units in the current year to 1745 units in the first year of the biennium and 1857 units in the second year. In addition, the amount per unit has increased from $26,208 in FY 1994-1995 to $26,740 in FY 1995-1996 and $27,151 in FY 1996-1997. Senator Raggio noted 40 Special Education Units are reserved by the State Board of Education and asked why these units are reserved. Ms. Botts explained each school district is allocated a number of Special Education Units based upon the reported number of students which need to be served. If these units are not sufficient for a school district, then the district can apply to the State Board of Education for more units. The chairman questioned what criteria the board uses in allocating the units. Ms. Botts replied the distribution of the reserve units is based upon need, so the Special Education Consultants for the Department of Education review the school districts' requests and determines which districts have the greatest need for the reserve units. The bill has a one-time appropriation of $4,769,552, commented Ms. Botts, for computer hardware and software. She stressed the measure clearly states the funds are not to be included in the adjusted base budget for the costs of maintaining the current level of service for the 1997-1999 biennium. Section 11 of A.B.737, related Ms. Botts, provides $9,022,637 in FY 1995-1996 and $9,655,428 in FY 1996-1997 to support adult high school diploma programs operated both in and outside the system. She indicated this funding includes the "start-up" costs for the educational program at the Lovelock Correctional Center. Ms. Botts noted section 2 of the bill addresses the changes required by the Governmental Accounting Standards Board (GASB) 22. She said GASB 22 requires that the August collections of local school support tax be included in the FY ended July 1 of each year. Because of this requirement, adjustments have been made in how school aid is apportioned. In the past, school aid was apportioned quarterly and any adjustments from the previous year were made in the August 1 apportionment, however, since the actual adjustment will not be computed until after August sales taxes are collected, section 3 of the bill was added to allow for a final adjustment time period, explained Ms. Botts. Senator Raggio asked if the bill is basically the same as it has been in the past. Ms. Botts responded affirmatively and pointed out sections 1,2,3, and 4 are unique to this bill because the sections address changes in the county school district fund versus separate school district funds and GASB 22. The chairman commented there were several issues discussed by the joint subcommittee which need to be discussed and clarified. He asked if the bill allows the one-time adjustment for GASB 22 to become part of the state funding formula. Ms. Botts explained the GASB 22 adjustment is only a one-time adjustment and the 13th month distribution will be received by the school districts. However, the GASB 22 adjustment does reduce the school districts' state aid in the current fiscal year. Senator Raggio stressed GASB 22 is only a one-time adjustment. Michael R. Alastuey, Lobbyist, Clark County School District, testified the actual operation of the formula is not changed by the GASB adjustment, however, he said there is an annual impact to the school districts in terms of lost interest and overall cash-flow. Senator Raggio stated, as a result of the joint subcommittee's actions, $19 million which would have reverted to the General Fund will now be allowed to remain in the DSA. He commented: The formula has not been changed for the future. The obligation of the state to add to, as part of its guarantee, or to receive back reversions still remains in place. Ms. Botts replied GASB 22 does not change the formula, it only makes a one-time adjustment. The chairman stressed, "We need to have that fully understood....Our actions should not be understood as somehow a precedent that changes the guarantee of the state's share with respect to either additions or reversions to the funding." Mr. Alastuey commented: [T]here are some unique features to this bill. First of all, it has never happened, in my experience at least, that a part of the basic support guarantee...has been set aside from all other aid and deemed to be one- time not part of the base and earmarked for computer hardware and software. While this appears clear on page 5 of the bill that the $4,769,00 is not to be considered part of the base for continued funding in future fiscal bienniums, we wonder about the clarity or lack thereof, in terms of legislative intent regarding the $9 million in Assembly Bill 224 as to whether it is or can be made part of the base as well. Perhaps some discussion on the committee's part along those lines would be of interest to us. The notion that much of the funding is of a one-time nature poses those issues for planning our obligations for the future and for the next legislative session. Committee intent would be of interest to the school district....Never before has the state worked more with the interplay between one-time and ongoing funding to fund major obligations, then it has this time. We find ourselves taking ongoing money and calling it one-time and we find ourselves taking one-time money and sorta, maybe, kinda using it for ongoing purposes. The interplay between the state and local school districts has changed, the formula has not, but the relationship funding-wise has changed because of the heavy sales tax reliance....Now we have a formula I personally believe is skewed and is deserving of a very good look.... Senator Raggio asked what the legislature needs to do to ensure that the same problems are not encountered again with Clark County and Washoe County School Districts with regard to allowing the results of negotiations in the second year of a biennium from becoming a problem. He said the legislature cannot allow the negotiations in the second year to somehow be reflected in the budget. Ms. Botts responded the actions of the joint subcommittee have not directed school districts on how to negotiate raises in the first versus the second year of biennium. The chairman remarked: We need to leave here with some clear expression that isn't going to happen next time. We need to make that clear in a statute or by Letter of Intent and clearly define that....We cannot allow negotiations late in the process which potentially do not have the capability of being funded to, in essence, drive the appropriation under the Nevada Plan. That needs to be carefully defined in this bill or by Letter of Intent. Ms. Botts related the funding calculations could be explained in a Letter of Intent and it could be indicated in the letter the base budget is based upon FY 1995-1996, but she maintained it is inappropriate for the Legislature to dictate to the local school districts that a raise could not be provided to their employees the second year of a biennium. Senator Raggio indicated it is his intention to define how the DSA budget is determined and not to interfere with salary negotiations. He related: A concern arose in the joint subcommittee hearings. Everyone said there was some concern because they had been led to believe there was going to be funding available to adjust to those additional negotiations. We do not want that to occur in the future. We want to make sure that is understood. Senator Coffin commented $139 million from the DSA will revert to the General Fund and pointed out the reversion is providing the large reserve built-up by the state. He said the reserve funds allows the legislature to "have all this play money to fund local projects." Senator Jacobsen inquired about the situation with Eureka County School District. Ms. Botts explained the support from the mining industry in Eureka County and the 2.5 percent sales tax for local school support more than covers the basic support for the 300 students in the district. In order to avoid providing state funds to the county when local revenues are adequate, there is an artificial $100 included in the basic support, related Mr. Botts. Senator Jacobsen asked if the funds from the federal government for mineral land lease have been stable in the last 4 years. Ms. Botts said the lease payments generally have averaged approximately $8 to $9 million for the last several years, although she noted the mining industry is volatile and fluctuates greatly. The Assembly Committee on Taxation has proposed to take the payments of the net proceeds from a prospective basis to a retroactive basis. SENATOR COFFIN MOVED TO DO PASS A.B. 737. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio referred the committee to Amendment Number 1448 to Senate Bill (S.B.) 495 and pointed out section 6, page 6 of the bill was amended by deleting lines 47 and 48 and requiring the notice of nonpayment to be filed with the county recorder of the county in which the court is located. SENATE BILL 495: Makes various changes to provisions governing collection of fines and assessments. SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 495. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) * * * * * Turning the committee's attention to Bill Draft Request S-2171, Senator Raggio related Senator Mathews has requested this measure be introduced by the committee. BILL DRAFT REQUEST S-2172: Makes appropriation to Gerlach General Improvement District. Senator Mathews stated the two water tanks utilized by the town of Gerlach are not functioning properly. The town has the funds to replace the tanks, but does not have sufficient funds for installation costs. She related the health department has determined the leaking tanks are a health hazard and the water is unsafe to drink. Senator Coffin questioned the amount of the requested appropriation. Senator Mathews replied, "$91,000." Continuing, Senator Coffin asked if the Washoe County Commission has been approached regarding this matter. Senator Mathews responded the commission was contacted, but indicated it could not help the town at this time. She said this is an emergency situation because, until the new tanks are installed, the town does not have safe drinking water. Senator Jacobsen inquired about the size of the tanks. Senator Mathews replied she is unsure of the size, but will get the information for the committee. SENATOR RAWSON MOVED FOR COMMITTEE INTRODUCTION OF BDR S-2172. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) * * * * * The chairman opened the hearing on Senate Bill (S.B.) 199 and noted this measure appropriates $81,942,218 to the state's rainy day stabilization fund. He asked staff members if the appropriation meets the shortfall goal set by the committee. SENATE BILL 199: Makes appropriation to fund to stabilize operation of state government. Mr. Miles distributed a 2-page report (Exhibit E) depicting the status of the General Fund and reviewed the document for the committee. He pointed out the appropriations for the classified and the unclassified pay bills have been adjusted to include an additional 1 percent increase. The net budget actions for FY 1995 have increased expenditures by $11,219,178, decreased expenditures by $61,012,157 in FY 1996 and increased expenditures by $4,716,870 in FY 1997, remarked Mr. Miles. He related revenues will exceed expenditures by $85.6 million in FY 1995 and $14 million in FY 1996, however, expenditures exceed revenues in FY 1997 by $8.8 million. Senator Raggio commented Exhibit E indicates the Current Fund Balance for FY 1997 will be $90.9 million. Mr. Miles explained this figure may be modified due to the actions taken by the Assembly Committee on Ways and Means. Turning the committee's attention to page 2 of Exhibit E, Mr. Miles explained the first half of the page indicates changes which have occurred due to the legislative actions taken by the committee. Mr. Miles pointed out the FY 1995 column represents changes or differences between the Governor's recommendations and the final action taken by the legislature on the measures. He related the bottom portion of page 2 indicates potential changes which might occur due to legislative action. Because the Senate Committee on Finance and the Assembly Committee on Ways and Means were trying to reduce the deficit in the second year of the biennium, he explained, reductions in proposed budgets, as well as the Economic Forum's new revenue estimates, increased funds available in FY 1996. He noted $29 million in one-shot appropriations to the school districts was moved to FY 1996 to preserve the Ending Fund Balance. SENATOR MATHEWS MOVED TO DO PASS S.B. 199. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) * * * * * Mr. Alastuey stated: Mr. Miles indicated the school district one-shot was moved from the 1995 to the 1996 school year....This is a little atypical for a one-shot. One-shots usually come out of a current year surplus and are available for the two ensuing years. What is the relationship between the year of appropriation the availability of those funds in terms of the base for future bienniums? Because rather than this coming from current year surplus, it is carried into the first year of the operating biennium. What would the committee's understanding be with respect to future commitments for those funds? Mr. Miles replied: The funds in the books of the state will come out of FY 1996. That is just to preserve, on the records of the state, a nice smooth ending fund balance. The funds would not have, in any case, been available to the school districts until the fiscal year that begins Saturday [July 1, 1995]. In terms of your records, I don't see any difference. Mr. Alastuey asked: Do school districts look at or treat those funds any differently in terms of future commitments, than if they would if it were made from current year surplus? Mr. Miles responded, "I would suggest it is one-time money." Mr. Alastuey questioned, "Including the $9 million that was pointed out by Speaker Hettrick as being separate and available for operating needs." Senator Raggio commented, "We have not discussed that, but we will. We want to make sure we have a consensus on that." Senator Rawson suggested a Letter of Intent be issued to the state's school districts regarding the necessity of providing the Legislature with accountability data. Senator Coffin related he would like to amend Assembly Bill (A.B.) 443, heard earlier, by deleting lines 1-8 on page 2 and inserting firemen, police officers and those defined in Chapter 617 of the Nevada Revised Statutes. He said this revision will include all the persons covered under the "heart-lung" provisions. Senator Rawson asked whether there will be sufficient funding if these employees are included in the bill. Senator Raggio pointed out the state's contribution was made only to help establish the trust fund. He stated the trust fund will solicit private donations and grants to further its goals. SENATOR COFFIN MOVED TO AMEND AND DO PASS A. B. 443. Senator Raggio said he will take the motion to amend with the understanding the amendment can be accommodated by the bill drafters. Senator Coffin asked, "You don't want to take the motion to amend?" Senator Raggio responded the committee is not going to act on any bill until the Assembly acts on some of the Senate bills they have under consideration. SENATOR COFFIN MOVED TO AMEND ASSEMBLY BILL 443. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.) * * * * * Senator Raggio recessed the meeting at 10:20 a.m. The chairman reconvened the meeting at 3:50 p.m. and referred the committee to Senate Bill (S.B.) 581 which is an appropriation to the Gerlach General Improvement District for the installation of water tanks. SENATE BILL 581: Makes appropriation to Gerlach General Improvement District for expenses relating to replacement of water tank and to department of education for pilot program for certain preschool and kindergarten students. Senator Mathews related the water tank holds 300,000 gallons of water and is 22 feet high and 40 feet in diameter. Washoe County did not provide the town of Gerlach with the installation funds because it is a General Improvement District and the county cannot give funds to such a district. The county can loan Gerlach the funds, but the town does not have sufficent revenues to repay the loan, explained Senator Mathews. SENATOR MATHEWS MOVED TO DO PASS S.B. 581. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR COFFIN VOTED NO.) * * * * * Senator Raggio closed the hearing on S.B. 581 and opened the hearing on Assembly Bill (A.B.) 73. He noted a handout (Exhibit F) distributed to the committee depicts the costs associated with the Michael Sonner trial. ASSEMBLY BILL 73: Makes appropriation to Pershing County for expenses related to trial of Michael Sonner. SENATOR RHOADS MOVED TO DO PASS A.B. 73. SENATOR JACOBSEN SECONDED THE MOTION. The chairman pointed out in most situations such as this, the counties are responsible for expenses related to criminal trials, but this case involves the death of a state highway patrolman. He indicated Pershing County has limited financial resources and maintained the county should not raise their taxes due to a one-time criminal act perpetrated on a highway patrolman. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio stated the committee will now take action on legislation discussed earlier in the meeting and referred the committee to A.B. 113. SENATOR JACOBSEN MOVED TO DO PASS A.B. 113. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR COFFIN VOTED NO.) * * * * * Turning the committee's attention to A.B. 224, the chairman indicated the measure was amended to provide an additional $5 million and some restrictive language. He said the committee will not act on this measure until the final reprint of the bill is available. Senator Rawson questioned if the amended version will include $300,000 for a de- consolidation study. He explained consultants will be hired to independently study the size of each school district in the state. Senator Raggio pointed out Amendment No. 1461 to A.B. 224 provides the authority to utilize up to $300,000 from the 73 percent portion of the appropriation earmarked to improve educational programs for this study. He said the school districts and the Assembly Committee on Ways and Means have also agreed to fund the study in this manner. Senator Coffin commented, since the study is requested by the Legislature, then it should be funded from a General Fund appropriation. Senator Raggio remarked the Legislature is appropriating an additional $5 million to the Department of Education and only earmarking $300,000 of this amount to perform a study. The chairman closed the hearing on A.B. 224 and hearing on A.B. 270 for committee action. SENATOR JACOBSEN MOVED TO DO PASS A.B. 270. SENATOR RAWSON SECONDED THE MOTION. Senator Coffin said he objects to the bill because $1 million will be diverted from highway projects which have already received approval. He stressed the diversion of these monies is a misallocation of funds and maintained local government should be helping Kal Kan, Inc., finance this project, not the state. Storey County, it was reported in the Comstock Chronicle, has already approved industrial bonds for the project, remarked Senator Coffin. THE MOTION CARRIED. (SENATOR COFFIN VOTED NO.) * * * * * Senator Raggio related Senator Coffin has withdrawn his proposal to amend A.B. 443 which was voted on earlier in the meeting. SENATOR MATHEWS MOVED TO WITHDRAW THE PROPOSED AMENDMENT AND TO DO PASS A.B. 443. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR RHOADS MOVED TO DO PASS A.B. 458. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR JACOBSEN MOVED TO DO PASS A.B. 735. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATOR O'DONNELL MOVED TO DO PASS A.B. 406. SENATOR RAWSON SECONDED THE MOTION. Senator Coffin said he opposes the appropriation because sufficient information was not provided indicating Clark County did not have the resources to fund the project. THE MOTION CARRIED. (SENATOR COFFIN VOTED NO.) * * * * * SENATOR RAWSON MOVED TO DO PASS A.B. 351. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR COFFIN VOTED NO.) * * * * * SENATOR JACOBSEN MOVED TO DO PASS A.B. 271. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * The chairman referred the committee to Amendment No. 1464 to Assembly Bill (A.B.) 288 and asked Senator O'Donnell to review the amendment. ASSEMBLY BILL 288: Makes various changes affecting state board of parole commissioners. Senator O'Donnell indicated the amendment revises section 1 and requires the Department of Motor Vehicles and Public Safety and the Department of Prisons to establish an orientation program for new members of the State Board of Parole Commissioners. Ann Andreini, Administrative Assistant, Boards and Commissions, Governor's Office, interjected each member of the board must have a bachelor's degree in specified fields of study or 6 years experience in the law enforcement field or counseling. Phillip Galeoto, Lieutenant, South Division, Reno Police Department (RPD), stated the RPD supports the proposed amendment. Senator O'Donnell pointed out section 10 is amended to address a conflict with Senate Bill 61. SENATE BILL 61: Requires person in custody to sign waiver of extradition proceeding as condition of release. SENATOR O'DONNELL MOVED TO AMEND AND DO PASS A.B. 288 WITH AMENDMENT NO. 1464. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Referring to Senate Bill (S.B.) 210, the chairman said it is his understanding the Business Processing Re-engineering study for the Department of Human Resources has been recommended with the requirement the disbursement of the funds be subject to the approval of the Interim Finance Committee (IFC). SENATE BILL 210: Makes appropriations to finance state's share of business process re-engineering for certain divisions and departments. Senator O'Donnell interjected, "That is not quite what I agreed to. I don't think we should do one at all because we do not know what is going to happen in the next few years with welfare." Senator Raggio replied, "I think it was the other sides [Assembly Committee on Ways and Means] understanding that might be the case, but they should authorize the funding, so the IFC could [act]...." He inquired about the amount of the BPR study. Mr. Miles replied, "$675,000." The chairman noted the Assembly Committee on Ways and Means has requested that the other BPR studies for the Department of Business and Industry and a combination study for the Division of Parole and Probation, Office of the Attorney General, and Department of Prisons be added to this legislation. SENATOR O'DONNELL MOVED TO AMEND S.B. 210 TO INCLUDE APPROPRIATIONS IN THE AMOUNT OF $350,000 TO FUND A JOINT BUSINESS PROCESS RE-ENGINEERING FOR THE DEPARTMENT OF BUSINESS AND INDUSTRY AND THE DEPARTMENT OF TAXATION AND $250,000 FOR EXPENSES RELATING TO A BUSINESS PROCESS RE- ENGINEERING WHICH WOULD INCLUDE AN INTERFACE BETWEEN THE DATA CENTERS FOR THE PUBLIC SAFETY PORTION OF THE DEPARTMENT OF MOTOR VEHICLES AND PUBLIC SAFETY, THE DEPARTMENT OF PRISONS AND THE OFFICE OF THE ATTORNEY GENERAL. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 194: Provides for fundamental review of base budgets of state agencies by legislature. The chairman pointed out this legislation was heard by the committee on June 20, 1995. SENATOR RAWSON MOVED TO DO PASS ASSEMBLY BILL 194. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 223: Makes certain appropriations to University and Community College System of Nevada. Senator Rawson indicated he will abstain from voting on this measure because he is employed by the University and Community College System of Nevada. SENATOR JACOBSEN MOVED TO DO PASS S.B. 223. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio stated the first reprint on A.B. 224 is now available and asked the committee to review the proposed amendment to the first reprint of the bill. He related the language in section 8 was modified by adding an additional $4.7 million. Section 8(2), remarked the chairman, addresses how the 73 percent allocation is to be used and indicates the funds are not to be utilized for salaries or benefits for school district personnel. Senator Raggio noted the remainder of the funds, which are approximately $9.8 million, can be allocated by the school districts as they see fit. He commented the committee has not received information regarding whether the $9.8 million applies to the base budget. He stressed, before this legislation is processed on the Senate floor, there must be "some firm understanding" on this issue. ASSEMBLY BILL 224: Makes various changes to provisions governing local financial administrations. Senator Raggio briefly reviewed the new language relating to sections 1 through 7 of the proposed amendment. He stated the language in the amendment has been agreed to by representatives of the teachers' union, the school districts, the local governments, the firemen's and policemen's unions. Section 10, remarked the chairmen, earmarks the sum of $300,000 to contract with one or more qualified independent nationally recognized consultants to determine the feasibility of reconfiguring the structure of school districts. SENATOR COFFIN MOVED TO AMEND AND DO PASS A.B. 224 WITH AMENDMENT NO. 1461. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 243: Makes appropriation to department of education for support of nonprofit public broadcasting stations in Nevada. Senator Raggio related the appropriation requested in Assembly Bill (A.B.) 243 was originally $200,000, however, the Assembly Committee on Ways and Means has recommended an amendment to the bill which would increase the amount to $300,000. SENATOR COFFIN MOVED TO DO PASS THE FIRST REPRINT OF A.B. 243. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * The chairman adjourned the hearing at 4:45 p.m. RESPECTFULLY SUBMITTED: Pamela Jochim, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance June 30, 1995 Page