MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-Second Session
April 23, 2003
The Committee on Ways and Meanswas called to order at 8:08 a.m., on Wednesday, April 23, 2003. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada, and via simultaneous videoconference in Room 4406 of the Grant Sawyer Office Building, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairwoman
Mr. Walter Andonov
Mr. Bob Beers
Mrs. Vonne Chowning
Mrs. Dawn Gibbons
Mr. David Goldwater
Mr. Josh Griffin
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Ms. Kathy McClain
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Russell Guindon, Deputy Fiscal Analyst
Brian Burke, Senior Program Analyst
Bob Atkinson, Program Analyst
Mindy Braun, Education Program Analyst
Jeff Ferguson, Program Analyst
Joyce Garrett, Program Analyst
Tracy Raxter, Program Analyst
Carol Thomsen, Committee Secretary
Connie Davis, Committee Secretary
Chairman Arberry called the meeting to order and opened the hearing on A.B. 465.
Assembly Bill 465: Makes appropriations for planning and design of facility for vocational training in Southern Nevada and for planning and design of performing arts center in City of Las Vegas. (BDR S-1219)
Steven Horsford, Chief Executive Officer, Nevada Partners, explained that the bill would appropriate funding for the new Culinary Training Academy, located on the campus of Nevada Partners in Las Vegas. Mr. Horsford informed the Committee that he would provide a brief overview of the program, discuss the funding resources that had already been secured, and outline the functions of the building. Mr. Horsford referenced Exhibit C, which outlined the program and would support his PowerPoint presentation.
The Culinary Training Academy was actually a joint labor/management partnership, stated Mr. Horsford, and was based on an agreement between 28 participating hotels in Las Vegas, which represented some of the largest employers in Nevada. Also participating in the endeavor were the Culinary Workers’ Union and the Bartenders’ Local 165. Mr. Horsford explained that the partnership had been developed in 1993 to create a program that actually trained persons in the vocational skills that were needed, such as stewards, housekeepers, cooks, food servers, and bus people, who were the backbone of the industry. According to Mr. Horsford, people required training to participate in those jobs, which was the purpose of the Culinary Training Academy.
The Academy also worked very closely with the hotels to provide incumbent worker training, and Mr. Horsford explained that approximately 40 percent of all students trained were incumbent workers. That training was provided for existing employees in the industry who had a desire to be promoted, which would also promote wage gain, economic growth, and would be the engine that created additional funding for the state. Mr. Horsford noted that the Academy offered some very good advanced training programs, and had a certified sommelier on staff to teach the wine training class, along with a gourmet food server. Those programs had been introduced because the industry of today was not the same as it had been five or ten years ago; it was no longer coffee shops and buffets, but rather consisted of five-star, gourmet dining. Mr. Horsford pointed out that when persons paid $100 to $200 for meals, they expected excellent customer service, and people had to be trained to meet that need.
Continuing his presentation, Mr. Horsford explained that the housekeeping program was a very important component and thousands of people were trained every year for jobs in housekeeping. He noted that the Academy could not train enough persons in that area and the industry had hundreds of openings at the present time that could not be filled due to the lack of an adequate training facility. Mr. Horsford explained that was one of the reasons the appropriation was requested through A.B. 465.
Fortunately, stated Mr. Horsford, since the last legislative session, the Academy had leveraged a very significant partnership with Nevada Partners, which was now its sister agency. Nevada Partners was tax exempt under section 501(c)(3) of the Internal Revenue Code, and primarily received grant funding via the U.S. Department of Labor. Mr. Horsford explained that Nevada Partners received several million dollars in grant funding through the Workforce Investment Act, funded through the Department of Labor. That program assisted in the operation of the Culinary Training Academy, and Mr. Horsford stated A.B. 465 did not request operational support, but rather requested a one‑time capital appropriation.
Mr. Horsford explained that Nevada Partners focused on employment preparation, and dealt with the “soft” skills of employability, which helped people do well at interviews, understand the value of good work ethics, learn how to interview others, and learn the basic skills that most people took for granted. The Culinary Training Academy focused on vocational skills and job performance, which was a really great “marriage” of skills to promote employability.
Mr. Horsford noted that classes were offered in employment services and the Academy also maintained a youth program. That program was funded through an education credit retrieval program offered by the U.S. Department of Labor for youth who were credit-deficient, some of whom had actually dropped out of school. According to Mr. Horsford, those youth often approached the Academy seeking a job, but they were informed that without a high school diploma or General Education Diploma (GED), they could not secure employment. Those youth were enrolled in the program and placed back into school while the Academy also assisted them in the development of work skills. Mr. Horsford emphasized that the Culinary Training Academy was mainly geared to workforce development and almost all of its programs and services were offered in Spanish because approximately 40 percent of its participants were Hispanic.
Per Mr. Horsford, the Academy was strong on performance, and for the quarter ending January 2003, 80 percent of the adult clients were exited from the Academy into employment situations. At a time of economic distress when people were being laid off, employers valued the training provided by the Academy and those who graduated from the program were able to obtain employment. Mr. Horsford stated the Academy had received $1.5 million through a national emergency grant after the incidents of September 11, 2001, and 82 percent of the clients served through that grant had been placed in employment, again during very distressing times.
Chairman Arberry asked about job retention rates for those students employed from the Academy. Mr. Horsford stated that another performance requirement of the grant funding was job retention and the Academy tracked its clients for a minimum of one year. The rate for over six months retention was approximately 75 percent and for those students who lost their jobs, the Academy provided job coaches who attempted to intervene on their behalf. Because of the Academy’s partnership with the Culinary Union, Mr. Horsford explained that most of the jobs secured by students paid from $14 to $15 per hour starting wage, along with full benefits including pension. The untold story about the gaming industry was that a maid in Las Vegas earned $11.05 per hour with full medical benefits for the worker and dependents, along with a pension. Mr. Horsford noted that employment benefits for students were very good, which the Academy was very proud of.
Mr. Horsford explained that the employers were a critical piece of the partnership as well, and received much valued information from the program. A recent survey regarding the effectiveness of the program by frontline supervisory staff indicated that workers who had graduated from the Academy performed better, remained on the job longer, had a better attitude, and they believed it was an all around “win-win” situation.
Mr. Horsford stated the partner agencies that worked with the Culinary Training Academy were labor, government, other nonprofit organizations and faith‑based organizations, as it was a community agency that worked collectively with the community. The first goal established by the Academy’s Board of Trustees was to complete the construction of the new facility. The reason that the building was so important was that the program had been operating from the Days Inn on East Fremont Street in Las Vegas. Mr. Horsford explained that the facility was old and antiquated, even though it had sufficed to train approximately 20,000 people, however, it simply would not be sufficient for future training needs. He indicated the Academy had embarked on a very aggressive plan to build a new facility.
Mr. Horsford pointed out that during the 2001 session his request had been for planning money; he explained that at the present time a great deal of money had been secured in the form of a $700,000 grant from the U.S. Department of Housing and Urban Development (HUD) toward the capital for construction of the Academy. The Academy had recently received an invitation from the Economic Development Administration to apply for up to $2 million in grant funding, and Mr. Horsford reported that the participating employers had also earmarked $2 million as their contribution to the program. Mr. Horsford informed the Committee that financing for the new facility was still incomplete, and he asked for the Committee’s support of A.B. 465.
Mr. Horsford said the second goal established by the Academy’s Board of Trustees was to work more closely with the industry to better understand its needs so that the Academy could continue to adapt its programs and ensure employment for its students. The third goal was to continue to increase the number and quality of the Academy’s graduates, and Mr. Horsford reported that the new building would not be used to simply train the same number of people. The goal was to double the number of people trained by the Academy, which could be accomplished with the expanded facility.
Once the expanded facility had been completed and the program was growing at a certain percentage per year, Chairman Arberry asked how long it would be before the Academy outgrew the expanded facility, or would it already be outgrown when it was built. Mr. Horsford stated that during the Academy’s initial dedication, Senator Harry Reid had stated that the day the new building was completed it would be too small because the needs of the community were so great. Mr. Horsford emphasized that the facility would be fully utilized and the Academy hoped to continue to work in other areas of the community; he explained that the Academy worked very closely with the county and utilized some county facilities for its classes. Mr. Horsford emphasized that the program would continue to provide services throughout the southern Nevada area.
Mr. Horsford referenced Exhibit C, which depicted the state-of-the art training facility, and explained that the kitchen alone would encompass 8,000 square feet and would contain a restaurant for training food and beverage servers. The facility would also contain a banquet facility, an expansion for a classroom wing, a child care center, and would be a national model.
Mr. Horsford introduced Dr. Alonzo Jones, Youth Program Manager, present at the hearing in Las Vegas. Mr. Horsford noted there were youth present in Las Vegas who would like to present testimony to the Committee.
Dr. Jones introduced the youth present at the hearing, and stated they would present testimony regarding the program and how it had influenced their lives.
Jennifer Atton told the Committee that she was 15 years of age and was the mother of an eight-month-old baby. Ms. Atton indicated she was from the state of Texas and since she had been attending Nevada Partners, she had learned that school was very important. Ms. Atton stated she had secured a job through the program and had learned customer service skills. The program helped young adults in every possible way. Ms. Atton said that Nevada Partners had helped her with child care costs and provided vouchers for bus fare, baby formula, and vouchers for Kmart for other needed items.
Nina Williams informed the Committee that she was the President of the Youth Council at Nevada Partners. Ms. Williams stated that Project H.Y.P.E., Helping Youth Progress and Excel, was a great program that helped youth with career services, educational opportunities, and provided support services. For example, through Youth Career Services, Project H.Y.P.E. had helped Ms. Williams obtain a job and also provided needed work experience. Ms. Williams noted that there were many educational opportunities through Project H.Y.P.E., which was also assisting her with a college education. The Project had helped other youth to obtain General Education Diplomas (GEDs), retrieve lost credits, and provided tutoring for the Nevada State Proficiency Test. Ms. Williams stated that Project H.Y.P.E. also assisted youth with support services such as bus service passes, payment of utilities, and school assistance. Ms. Williams believed it was important for the community to be aware of Project H.Y.P.E. and the services offered that changed participants’ lives from negative to positive. In her opinion, only positive things could come from the Project and she would highly recommend it to all youth.
Percy Williams testified that when he entered Project H.Y.P.E. he was a high school graduate, however, had not continued his education and was not working. The Project had helped Mr. Williams change that status by locating employment, and had put college within his grasp, which he did not think would be possible. Mr. Williams also noted that the Project helped him change his way of thinking and get his life back on track. He believed that Project H.Y.P.E. was a great program that helped young people put their priorities in order, such as school and job, which some youth would never accomplish without the help of the Project. Mr. Williams thanked the people at Project H.Y.P.E. for helping him become a better person and get his life back on track.
Dr. Jones stated the youth were talking about an initiative from Nevada Partners, Project H.Y.P.E., Helping Youth Progress and Excel, which was basically a cognitive restructuring and cognitive development program that changed the mind-set and moved youth toward the idea of success.
Mr. Horsford stated he was a native of Las Vegas, Nevada, and there were many people who had provided assistance to him during his youth, and he assured the Committee that the programs offered through Nevada Partners really would affect many lives. Mr. Horsford stated that he appreciated the comments from the youth. He advised that he was in receipt of an approval letter from the U.S. Department of Housing and Urban Development (HUD) for the $700,000 in grant funding that Nevada Partners had secured, as well as the invitation from the Economic Development Administration for the additional $2 million in funding. Mr. Horsford emphasized that Nevada Partners was not simply asking for money without doing its part to secure funding; he believed that the state should be a part of the exciting program, which would be a national model for success.
Barbara Hewitt, Executive Director, MGM Grand University, a training program offered by the MGM, stated she was responsible for the training functions at the MGM Grand and New York, New York Hotel/Casinos in Las Vegas. Ms. Hewitt explained there was an approximately 12,000-employee workforce between both properties, and she was pleased to have the opportunity to voice support for A.B. 465. As a current partner with Nevada Partners and the Culinary Training Academy, she emphasized just how important the current program and future programs were to the advancement of Nevada’s diverse incumbent workforce.
Ms. Hewitt explained that a six-month program designed to train line employees in supervisory education was available to promote advancement within the company, from line positions into supervisory positions, and continue on to higher levels of management throughout the organization. Ms. Hewitt stated the MGM Grand was extremely committed to the development of employee education and advancement opportunities, and believed that those employees who aspired to expand their careers should be provided the avenues and resources to do so. The partnership with Nevada Partners and the Culinary Training Academy had broadened the scope of the creative leading edge programs that would produce a “win win” situation for everyone.
Ms. Hewitt stated that Nevada Partners and the Culinary Training Academy could provide assistance with a number of educational opportunities, such as English as a Second Language and GED certification. Ms. Hewitt stated all entities were united, extremely committed, and were confident that between the efforts of Nevada Partners, the Culinary Training Academy, and the MGM Grand and New York, New York Hotel/Casinos, resources would be provided to assist employees in reaching their goals.
D. Taylor, Director, Nevada Culinary Union, stated that the private sector had already contributed over $20 million to the program since the Culinary Training Academy had opened its doors, and the Academy was not looking for government handouts. The Academy and the Union were proud of the track record regarding job retention and the number of people trained. Mr. Taylor indicated that two things were obvious:
Mr. Taylor believed those were necessary elements of growth and were part of the American dream. The Union believed that the Culinary Training Academy would help persons achieve goals and dreams, both in the number of people trained and in providing access to the career ladder, which was essential in order to promote greater prosperity in the community.
Assemblywoman Chowning thanked everyone for providing testimony and stated she had observed changes to literally hundreds of lives because of the programs promoted by the Culinary Union. She appreciated the continuing emphasis on education and providing access to the employment ladder. Mrs. Chowning stated those people were able and were encouraged to become citizens, to become better educated, were able to be excellent stewards in the community, and were able to become homeowners. Without the appropriate training those goals would be impossible to attain. Mrs. Chowning stated that the training provided by Nevada Partners in its current facility was phenomenal. She asked approximately how many people had been trained in the past two years, and how many more would be trained with the new facility.
Mr. Horsford explained that Nevada Partners and the Culinary Training Academy currently trained approximately 2,500 people per year, which included both entry level and incumbent workers. The Board of Trustees had established a goal to double the number of people trained once the proposed facility was completed. Mr. Horsford stated that Nevada Partners was also reviewing the possibility of expanding into new training programs based on input from the industry and diversification of its training programs based on future need.
Mr. Horsford thanked the Committee for hearing testimony regarding A.B. 465 and, if at all possible, would appreciate the Committee’s support in passage of the bill.
Testifying next before the Committee was Blake Cumbers, who stated he would testify on behalf of the Las Vegas Performing Arts Center Foundation. The Foundation had been formed several years ago for the purpose of compiling public and private monies to build a world-class performing arts center in Las Vegas. Mr. Cumbers indicated that the center currently being contemplated was a 2,400-seat theatre for professional ballet, opera, philharmonic, drama, and musical theatre. It would also have an 800-seat theatre with back house support and appropriate facilities for professional productions. Mr. Cumbers noted that the anticipated facility would cost approximately $125 million and would require a $50 million operating endowment. The location of the facility would be on a 61-acre tract of land which was currently owned by the City of Las Vegas. According to Mr. Cumbers, the Foundation would appear before the City of Las Vegas on May 21, 2003, to request and receive approval for five acres of land within that 61-acre tract.
The Foundation’s plan, explained Mr. Cumbers, was to seek the operating endowment from public and private companies in southern Nevada in the amount of $50 million. The reason for that endowment was to make the cultural facility accessible to the entire community, especially children and those less fortunate within the community. Mr. Cumbers stated that two years after the acquisition of the land, the Foundation would once again approach the Legislature seeking construction funding for the project. The Foundation believed that in approximately five years, the project could be brought to fruition.
Mr. Cumbers advised the Committee that the Foundation was simply seeking “seed” money, which would be utilized for the design of the facility and would assist in securing funds from the private sector, such as endowments from various foundations. He emphasized that the Foundation included the group of people who could assist in that endeavor and he provided the names of those members to the Committee.
The Foundation hoped that the facility would prove to be a catalyst in the community, and Mr. Cumbers noted that would include a catalyst for children’s education, as children did not have access to that level of professional cultural art. It would also be a catalyst for the quality of life in southern Nevada, and a catalyst for the diversification of the business community. Mr. Cumbers pointed out that in an attempt to attract new businesses to diversify the economy in southern Nevada, new businesses always sought arts and a cultural foundation when they relocated, particularly technical companies.
Mr. Cumbers reiterated that the Foundation was seeking seed money for facility design and for studies of the facility to create the renderings and presentations necessary to seek private contributions from foundations and major businesses in southern Nevada. He stated the request for that purpose was $250,000.
Nancy Houssels, representing the Las Vegas Performing Arts Center Foundation, informed the Committee that she had been working in the arts in Las Vegas for over 30 years, and had been working on the proposed facility for the past 9 years. She believed it was time to move forward and also believed people could see the need. Ms. Houssels stated she would like to see the cultural gap in Las Vegas filled; she noted that the hotels in Las Vegas had magnificent theatres, but the community, itself, did not have a theatre and Las Vegas needed a world-class theatre. The foundation needed the endorsement, assistance, and participation of the Legislature, and Ms. Houssels advised that the facility would belong to all persons in the community.
Ms. Houssels stated she had been working in outreach with children through her work in the arts, and like the Kennedy Center and Lincoln Center, there would be a strong educational side to the facility. She believed the center would fill a huge gap that currently existed in the community, and development of the cultural side of Las Vegas was needed.
Mr. Cumbers stated in terms of the size of the project, the request was for a small amount of “seed” money, which would result in a very large “tree” that would bear “fruit” and the community would enjoy that fruit for years and years to come. The center would have a profound effect on the children and the quality of life in the community, which was why the allocation had been requested. Mr. Cumbers stated he was involved with the group based on his business background and his fine arts degree in theatre. Earlier in his career, he had done much work in the entertainment field and had been involved in the business of entertainment and the arts. Mr. Cumbers believed with his experience he would be a good “shepherd” over the money, as would the Foundation, and it would have a very positive effect on the community.
Assemblywoman Giunchigliani thanked Mr. Cumbers for presenting testimony to the Committee, and indicated that the bill would be taken under consideration. She believed that both components of the legislation were very important; similar legislation had been passed during the 2001 session, however, that bill was lost in the end of session “crunch.” Ms. Giunchigliani wondered about the use of tourism dollars to assist with the performing arts center and noted it was a $150 million project so $250,000 would merely be a “drop in the bucket,” but was still very important. She was pleased to hear that the City of Las Vegas would dedicate the property, which would be very helpful to the project.
Chairman Arberry asked whether there was further testimony forthcoming regarding A.B. 465, and hearing none, declared the hearing closed.
Chairman Arberry informed the Committee that the Senate Committee on Finance had determined that sufficient information was not available to proceed with the advertised meeting of the Interim Finance Committee (IFC) scheduled for 8:15 a.m. (Exhibit A), therefore, that meeting would be cancelled. The item under consideration regarding the Division of State Lands would be moved to the next regularly scheduled IFC meeting on May 8, 2003.
Chairman Arberry opened the hearing on A.B. 466.
Assembly Bill 466: Makes appropriation for special assessment on state-owned property assessed for improvements relating to flood protection project. (BDR S-1253)
Pam Wilcox, Administrator, Division of State Lands, explained that A.B. 466 was requested in order to allow the Division to make payments to the City of North Las Vegas for an assessment for a flood control/drainage project. The Division was holding a piece of School Trust Fund land in the City of North Las Vegas that consisted of an approximately 40-acre site. The flood control project had been built through the acreage, which split the land into two smaller parcels, one approximately 33 acres and the other approximately 5 acres. Ms. Wilcox noted that the assessment had been due for some time and the Division had been working with the City regarding payments. The Division planned to sell the parcel for the benefit of the School Trust Fund, but had agreed with the City sometime ago that if it was not sold prior to the 2003 session, the Division would seek an appropriation so the City could be assured of payment; the allocation would be paid back to the General Fund at the time the property was sold.
Ms. Wilcox informed the Committee that an auction was currently scheduled in June 2003 and, given the state’s tight financial situation, the Division had approached the City to explore the option of making payments over a period of time. Ms. Wilcox referenced Exhibit D, which proposed an amendment to A.B. 466. She explained that if the Division made the payment in its entirety, the cost would be $292,721.51 with interest, however, if payment was made through July 2003, the amount would drop to $116,641. The Division was requesting that the amount of the appropriation be reduced to $116,641, which would be advanced from the General Fund and repaid at the time the property was sold. Ms. Wilcox stated if the property did not sell, the Division would request permission to approach the IFC on an annual basis to request future annual payments of approximately $33,336 per year until the property was sold, or until the year 2010.
Ms. Wilcox reiterated that the Division offered the amendment to reduce the appropriation to $116,641, which would be paid to the City of North Las Vegas, and to also authorize the agency to approach the IFC annually for additional funds not to exceed $33,336 per year.
Assemblywoman Giunchigliani pointed out that the property was listed and hopefully would be sold in June 2003; Ms. Wilcox noted that the Division had scheduled an auction during the first week in June. Ms. Giunchigliani asked whether it would make sense to pay the full amount owed at the time the property was sold. Ms. Wilcox stated the Division’s original plan was to pay the total assessed amount, however, the total amount due was approximately $300,000 and there was always some risk associated with land sales. She explained that the property could be sold with the assessment due, which would require that the buyers make the future payments. Ms. Giunchigliani asked whether the assessment would be totally paid by the year 2010. Ms. Wilcox replied that the assessment would be totally paid by either the buyer or the state.
Assemblywoman Chowning asked why the Division was requesting that the payments be drawn out for so many years. Hopefully, stated Mrs. Chowning, the land would be sold and the assessment paid at that time, however, it appeared that the Division proposed to pay a large lump sum up front and make much smaller payments until the year 2010. Mrs. Chowning wondered why the payments could not be larger in order to pay the assessment in a shorter period of time.
Ms. Wilcox explained that Legislative Counsel Bureau (LCB) staff had been provided with a copy of the assessment schedule from the City of North Las Vegas. At the time the assessment district was established, persons coming into the district had the option of making a lump sum payment or paying the assessment over a period of time. Ms. Wilcox stated because of problems with noticing, the Division did not receive the notice in time to make that choice and was forced to make a lump sum payment. The Division had approached the City of North Las Vegas simply because of the fiscal impact on the state and, if payments were made over a period of time, the buyer would make future payments rather than the state, which would save the state money. Ms. Wilcox stated the Division had approached the City and requested that it be allowed to pay the amount due over time. The amounts included in Exhibit D represented the City’s regular assessment schedule for payment of the assessment over a ten-year period. Ms. Wilcox noted that the $116,641 amount was due because the Division was in arrears and that would bring the payments current to the end of July 2003; the remaining payments would, hopefully, be paid by the buyer.
Assemblyman Beers asked why the Division was in arrears. Ms. Wilcox explained that the Division’s budget did not include the assessment amount owed of approximately $300,000. Assemblyman Beers asked whether the assessment was already in arrears when the Division became aware of it. Ms. Wilcox stated that noticing by the City of North Las Vegas had been problematic, and the Division had already missed the first payment by the time notice was received. Mr. Beers asked whether all of the similarly assessed properties in the area were experiencing the same problem. Ms. Wilcox commented that the City had contacted the state, but the Division had not been made aware of the assessment. Mr. Beers asked which agency in the state had been notified. Ms. Wilcox indicated that notices were sent to the Public Works Board, along with other state offices, since the notices were simply addressed to the state of Nevada. When the Division finally approached the City of North Las Vegas, the determination was made that the assessment could be paid at the time the property was sold, but if it had not been sold prior to the 2003 session, the Division would approach the Legislature for an appropriation to make the necessary payments.
Mr. Beers noted that the Division had an auction scheduled in approximately two months, and asked what was the appraised value of the land. Ms. Wilcox stated that she would provide that information, however, it was valuable land that was worth somewhat more than $100,000 per acre. Mr. Beers stated that the amount could clearly be paid in June; Ms. Wilcox stated that was correct, as long as the property sold, there would be no problem making the payment.
Kimberly McDonald, representing the City of North Las Vegas, advised the Committee that the City did support A.B. 466, as it contained an appropriation to pay the City back for the construction improvements for the special improvement district. She introduced Randal Cagle, Manager of Real Property, City of North Las Vegas, who could provide testimony regarding the technical aspect of the land should the Committee have questions. Mr. Cagle stated he was present to voice support for the bill, and would be happy to address questions from the Committee.
Chairman Arberry asked whether there were further questions from the Committee, and hearing none, declared the hearing closed. The Chair opened the hearing on A.B. 475.
Assembly Bill 475 (1st Reprint): Makes various changes concerning providing health insurance for child pursuant to court order for support.
(BDR 3-1246)
Leland Sullivan, Chief, Nevada Child Support Enforcement Program, Welfare Division, stated he was present at the hearing to support A.B. 475 as reprinted, which would make changes to Nevada Revised Statutes (NRS) 31A.350 to provide for the use of the National Medical Support Notice (NMSN), a federally mandated notice intended to provide a standardized means of communication between state child support enforcement agencies, employers, and administrators of group health plans regarding the medical support obligations of non-custodial parents, Exhibit E. Mr. Sullivan explained that the NMSN had been developed by a national work group that consisted of state and federal child support representatives, employers, payroll associations, and health plan administrators. The combined expertise of that group addressed problems experienced with state notices.
Mr. Sullivan pointed out that federal regulations required that state child support enforcement agencies issue the notice to employers that maintained or contributed to group health plans and employed persons obligated by child support orders to provide medical support for their children. The federally mandated NMSN provided specific time frames for employers and medical plan administrators to adhere to regarding child support actions where the court had ordered a parent to provide medical insurance for a dependant child, and medical insurance was available through an employer.
According to Mr. Sullivan, the proposed legislation supported the implementation of that notice in the state of Nevada and provided penalties for non-compliance. The federal mandate required the use of the federal form exactly as it was published in order to provide a uniform vehicle for employers to transmit the medical insurance information to the Child Support Enforcement Program nationwide, thereby minimizing the impact on employers, payroll organizations, and medical plan administrators.
Mr. Sullivan stated that the bill also proposed to delete the current requirement to notify obligors by certified mail when enforcing authorities intended to seek enrollment of the obligor’s child in a health insurance plan pursuant to the court order, which was not a federal mandate. The federal mandate required that the NMSN be sent to employers within two days of identifying a non-custodial parent’s employer. Removal of the current requirement would ensure compliance with the two-day mandate. Additionally, stated Mr. Sullivan, the current notice was unnecessary and costly because obligors were notified in their court orders of their health insurance obligations. The Child Support Enforcement Program would realize a cost savings by eliminating the redundant notice requirement. Mr. Sullivan indicated that the cost of mailing each certified letter was $1.09, not including the printing of notices and the staff time for processing.
Mr. Sullivan informed the Committee that the State Child Support Enforcement Program had to comply with Title IV-D mandates to be eligible for both child support enforcement and Temporary Assistance to Needy Families’ (TANF) federal funding. Federal funding for TANF was contingent upon a state’s compliance with federal child support mandates, and Mr. Sullivan emphasized that failure to adopt the legislation would result in the disapproval of both Nevada’s child support and TANF state plans, along with the federal funding for those programs.
Assemblyman Hettrick commented that it appeared there was no fiscal note attached to A.B. 475 and he wondered why the bill was before the Ways and Means Committee. He noted that it appeared passage of the bill would save state revenue regarding mailing costs, and if the bill were not passed federal funding would be lost. Chairman Arberry pointed out that the bill had been concurrently referred to the Committee on Judiciary and the Committee on Ways and Means.
Chairman Arberry asked whether there was further testimony regarding A.B. 475, and hearing none, declared the hearing closed. The Chair opened the hearing on A.B. 543.
Assembly Bill 543: Repeals credit against general tax on insurance premiums for certain assessments paid by insurers providing industrial insurance. (BDR 57-962)
Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), stated that in reviewing the options to increase General Fund revenue for the upcoming biennium, one of the issues discussed had been the credit applied to the insurance premium tax. One of the current credits was authorized by NRS 680B.036, which provided that workers’ compensation insurers who paid an assessment to the Division of Industrial Relations (DIR) were entitled to an insurance premium tax credit equal to the amount of that assessment.
Mr. Stevens explained that assessment was utilized to finance a number of budgetary areas, including the DIR, the Attorney General’s Workers’ Compensation Fraud Unit, and the Nevada Attorney for Injured Workers, among others. He noted that assessment resulted in those agencies being funded indirectly from the state’s General Fund due to the insurance premium tax credit that was allowed for payment of the assessment by workers’ compensation insurers. Mr. Stevens commented that in FY2002 the total insurance premium tax due from workers’ compensation insurers was approximately $12.3 million and the value of credits that were earned, but not yet taken at the end of FY2002, equaled $17.2 million.
According to Mr. Stevens, Chairman Arberry had requested that Fiscal Analysis Division staff work with the LCB Legal Division in development of a bill draft that would eliminate the insurance premium tax credit effective July 1, 2003, but allow credits previously earned to be used over the next few years.
Mr. Stevens stated that bringing the bill forward would allow discussion and review by the Assembly Committee on Ways and Means. A.B. 543 provided for the elimination of the current insurance premium tax credit provided to workers’ compensation insurers for assessments paid to the Division of Industrial Relations (DIR) effective July 1, 2003. Mr. Stevens noted that insurers with outstanding credits would be required to apply to the Director of the Department of Taxation to request that accumulated credits be applied to reduce the insurance premium tax due between July 1, 2003, and January 1, 2006.
Mr. Stevens explained that if an insurer was unable to utilize the accumulated credits to offset insurance premium taxes through January 1, 2006, A.B. 543 provided that the Department of Taxation would repay outstanding credits as of June 30, 2006. In essence, stated Mr. Stevens, that was what the bill would accomplish, and he indicated that it had been brought forward to allow the Committee to discuss the particular issue and determine whether the bill was worthy of passage.
Assemblyman Hettrick asked how much money would be saved by passage of A.B. 543. Mr. Stevens reported that in FY2002 the total premium tax due, per the Department of Taxation, was $12.2 million before credits were taken. If the credits were eliminated effective July 1, 2003, there would be more than $12.3 million in taxes; Mr. Stevens noted there was also a pool of outstanding credits that would have to be reduced over time.
Assemblyman Goldwater stated that, as a point of background, the credit issue came about in an almost arbitrary manner when the state went to three-way workers’ compensation bid insurance. The legislation that promoted that insurance was so complicated in and of itself, that the issue of premium tax was not addressed. Mr. Goldwater believed that the Legislature should have considered that issue more carefully and the impact to taxation. He believed that A.B. 543 would be an appropriate follow-up.
Robert Ostrovsky, representing the Employers Insurance Company of Nevada (EICON), stated that when the law was originally brought forward, the idea was that the general insurance industry would pay the premium tax, a portion of which would pay for its regulatory responsibilities through the Division of Industrial Relations (DIR), which was a General Fund budget. Mr. Ostrovsky noted that the remaining portion of that money obviously was placed in the General Fund for other expenditures. It had been determined that workers’ compensation carriers would pay through an assessment directly to the DIR. Mr. Ostrovsky did not know what the assessment would be for the upcoming biennium, however, believed it would be between $27 million to $30 million assessed by the DIR for its total operation, including Occupational Safety and Health Administration (OSHA), Mine Safety, Industrial Insurance regulation, administration, and so forth.
Mr. Ostrovsky stated that he would assume the figure of $12.3 million referenced by Mr. Stevens was correct, and represented the insured portion; however, he pointed out that self-insured employers and self-insured groups did not pay the premium tax under any conditions. If the Legislature removed the credit it would appear from a policy position that the self-insured employers and self‑insured groups would receive a competitive advantage because they would pay the assessment but not the premium tax, however, insurers would pay both the assessment and the premium tax. Mr. Ostrovsky stated that was important to remember.
The other policy question, stated Mr. Ostrovsky, would be regarding the direction in which the Legislature wanted to move in terms of the cost of workers’ compensation during the current session. It was known that the medical fee schedule would increase, permanent partial disability awards would move from the fourth “edition” to the fifth “edition,” and Mr. Ostrovsky opined that those increases, combined with other bills that would undoubtedly pass during session for increases in benefits for long-term total disability awards, would create a double-digit increase in workers’ compensation insurance for all employers in the state.
Mr. Ostrovsky stated A.B. 543 would only add to that double-digit increase because, clearly, the premium tax would be rolled back into the rate and would be assessed against employers who purchased workers’ compensation policies. Should the Legislature choose to process the bill, an additional 3.5 percent would be added to the cost of workers’ compensation. According to Mr. Ostrovsky, the question of fairness was a policy question the Legislature should review in terms of the cost placed upon employers in the workers’ compensation arena.
The EICON would request that if A.B. 543 was processed, the effective date be changed to January 1, 2004, which Mr. Ostrovsky stated would give the EICON an opportunity to add the appropriate amount to the rates that would be charged employers in the policy year continuing from January 1, 2004, forward. Mr. Ostrovsky emphasized that the July 1, 2003, effective date would not provide sufficient time to add that to the process.
Ann Nelson, representing the EICON, concurred with Mr. Ostrovsky’s comments and noted that the financial impact of the bill on the EICON alone would be between $3.5 million and $4 million per year. Clearly, stated Ms. Nelson, the EICON could build that increase into its rates; she urged the Committee to change the effective date to January 1, 2004, if the bill were processed, so that the increase could be built into the rates.
Assemblyman Goldwater noted that the EICON did not pay the premium tax, but rather collected that tax. Ms. Nelson stated that the EICON did not collect the premium tax from the policyholders. Mr. Goldwater asked whether it was built into the actual rate. Ms. Nelson explained that all of the EICON’s costs were built into its rate. The fact that the EICON currently received an offset against the premium tax for the assessment it paid to the Division of Industrial Relations (DIR) was also built into the 2003 rates. Mr. Goldwater stated it was assumed that when the EICON established its rates, those rates would include the tax credited to the DIR. Ms. Nelson replied that was correct.
Mr. Goldwater noted that the EICON was currently collecting the tax, however, under the provisions of A.B. 543 would not receive a credit for collecting that tax. Ms. Nelson replied that ultimately it was the employers who paid the premium tax, which was collected through the rates and remitted to the Department of Taxation. However, she explained, the EICON’s current rates were based on the assumption that it would receive an offset on those premium taxes for the DIR assessment. Ms. Nelson emphasized that dollar amount was not currently being collected and was not built into the rates. Mr. Goldwater asked whether the EICON took advantage of the home office tax credit. Ms. Nelson replied that it did not take advantage of that tax credit because of the DIR offset. Mr. Goldwater asked whether the EICON planned to take advantage of that credit; Ms. Nelson replied in the affirmative, and pointed out that there were also a number of other bills under consideration.
Assemblyman Beers stated that it appeared there was a DIR assessment paid by the EICON that many other providers of industrial insurers were not required to pay. Ms. Nelson explained that the self-insured entities paid a different assessment, however, were not required to pay the premium tax. Mr. Beers asked why they did not pay that tax. Ms. Nelson stated it was because of the self-insured status, therefore, no premium was collected.
Mr. Ostrovsky explained that if A.B. 543 were passed, the EICON would be required to pay both the premium tax and the DIR assessment, however, the self-insured employers would pay their assessment to the DIR, but would not pay the premium tax. Mr. Beers asked whether that issue could be addressed if the assessment were on a per-insured basis. Mr. Ostrovsky pointed out that the assessment formula was extremely complicated and included numbers that pertained to claims paid, evaluation of reserves, and evaluation of future claims; he reiterated that it was an extremely complex formula. In theory, stated Mr. Ostrovsky, a system could be devised which actually double charged self‑insured employers, however, he wondered about the equality issues regarding the regulatory costs. Mr. Ostrovsky pointed out that under the provisions of the bill, the EICON would pay twice while self-insured entities would pay once.
Mr. Goldwater stated that once the EICON collected and remitted the insurance premium tax, it could then take advantage of the home office tax credit, which self-insured entities would not utilize. Mr. Ostrovsky remarked that the EICON would take advantage of the home office tax credit, as its home office was in Nevada. Self-insured employers did not pay any premium tax, so the question of the home office credit was moot. Mr. Goldwater asked whether that credit had been computed into the aforementioned possible rate increase. Ms. Nelson advised that the home office credit was figured into the $3.5 million to $4 million annual impact on the EICON previously mentioned. The current premium tax rate was 3.5 percent. Mr. Goldwater pointed out that the home office tax credit would offset that tax rate. Ms. Nelson explained that the annual impact on the EICON of $3.5 million to $4 million took into account the home office tax credit.
With no further testimony forthcoming regarding A.B. 543, Chairman Arberry closed the hearing, and declared the Committee in recess.
Chairman Arberry called the meeting back to order at 9:38 a.m., and indicated that the Committee would commence with budget closings.
BUDGET CLOSINGS
CULTURAL AFFAIRS ADMINISTRATION (101-2892) –
BUDGET PAGE CULTURAL-1
Mr. Stevens explained that the only closing issue in BA 2892 was the department-wide replacement of computer equipment and software within decision unit E-710. In the budget request, those items were within each individual budget, however, The Executive Budget combined the costs for most of the Department’s computer needs within the Administration budget of the Department of Cultural Affairs. The revenue would be allocated to the divisions as needed, and Mr. Stevens explained that would total $129,765 in the first year of the biennium and $110,967 in the second year of the biennium.
Mr. Stevens reminded the Committee that there was an overall General Fund increase in BA 2892, and that increase was based on the unavailability of funds from the Commission on Tourism budget via room tax receipts, which had funded a portion of the Department’s activities during the current biennium. He explained that those room tax funds would not be available during the upcoming biennium to the extent they had been available in the current biennium. According to Mr. Stevens, the amount received in the current biennium was $4.8 million, which was reduced to approximately $800,000 in The Executive Budget for the 2003-05 biennium.
Mr. Stevens stated that the only adjustment to the account would be changes in computer equipment based on the new price list received from the State Purchasing Division.
Assemblyman Beers noted that the budget represented a 200 percent increase in the General Fund appropriation, which apparently occurred because of room tax revenue, and he asked whether there was any way to redirect the tourism dollars back into BA 2892. Mr. Stevens explained that the room tax monies available in the current biennium were mainly reserve funds of a one-time nature. Since there had been a slight decline in the amount of room tax revenue received versus projections, those monies simply were not available unless funding was reduced within the Commission on Tourism budget.
Mr. Beers asked whether there had been a significant reduction in the amount of the General Fund appropriation to BA 2892 during previous biennia. Mr. Stevens noted that approximately $4.8 million in room tax monies had been provided in the current biennium to the Department of Cultural Affairs and there had been a small amount of money provided during the previous biennium. Mr. Stevens explained that the General Fund appropriation had been reduced by the amount of room tax revenue. Since it was reserve funding, it represented a one‑time savings and reserve funds had been expended and were not available for the upcoming biennium.
Mr. Beers asked the level of the General Fund appropriation to BA 2892 prior to the current biennium. Mr. Stevens stated he would provide that information, and indicated that Scott Sisco was present at the hearing and could possibly provide that information.
Scott Sisco, Interim Director, Department of Cultural Affairs, advised the Committee that the information had been provided during the original budget presentation regarding utilization of excess funding via room tax revenue from the Commission on Tourism. The amount had been approximately $840,000 and during the 2001 session, the Department had been asked to revert General Fund revenue, which had been replaced with the room tax revenue. Mr. Sisco explained that the proposed increase in General Fund appropriation was based on the loss of room tax revenue and the Department had actually realized an overall decrease of 5.61 percent.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 2892 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED WITH MR. BEERS VOTING NO. (Assemblyman Hettrick was not present for the vote.)
BUDGET CLOSED.
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MUSEUMS AND HISTORY (101-2941) – BUDGET PAGE CULTURAL-6
Mr. Stevens advised that the only item to be brought to the Committee’s attention in BA 2941 was that the new administrator for the Division of Museums and History had given notice that she would be terminating her employment in the near future, and the question was whether the Division would be allowed to fill that position should the hiring freeze continue. Mr. Stevens wanted to ensure that the Committee was aware of that situation. He indicated that staff would recommend closure of the budget as recommended by the Governor.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 2941 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblyman Hettrick was not present for the vote.)
BUDGET CLOSED.
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LOST CITY MUSEUM (101-1350) – BUDGET PAGE CULTURAL-9
Mr. Stevens explained there were a few technical adjustments in BA 1350 regarding changes in property and contents insurance, and truing up the fringe benefits costs to the appropriate funding source.
ASSEMBLYMAN PARKS MOVED TO CLOSE BA 1350 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblyman Hettrick was not present for the vote.)
BUDGET CLOSED.
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NEVADA HISTORICAL SOCIETY (101-2870) – BUDGET PAGE CULTURAL-12
According to Mr. Stevens, the General Fund appropriation for BA 2870 had been revised to reflect the increased fringe benefit costs for employees funded from trust funds. Adjustments had also been made for changes in insurance cost of employees, and in the property and contents insurance, per revised information received from the Budget Division.
ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BA 2870 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblyman Hettrick was not present for the vote.)
BUDGET CLOSED.
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STATE MUSEUM, CARSON CITY (101-2940) – BUDGET PAGE CULTURAL-18
The one closing issue identified in BA 2940 was the reduction in admission revenue and a reduction in the number of visitors. Mr. Stevens explained that actual revenue from admission charges was $109,173 in FY2002, which was less than the budgeted amount of $125,851. During the first nine months of 2003, the State Museum reported approximately $86,000 in revenue, and Mr. Stevens explained that if admission collections continued at the same rate, the State Museum would exceed the budgeted collections for FY2004-05 by $5,390 per year. The Committee could determine whether to increase the admission revenue by $5,390 or increase that revenue within the budget account.
For clarification, Mr. Stevens advised that the Senate Committee on Finance had closed BA 2940 with admissions revenue at $115,000, which would raise it approximately $5,800 above the recommended amount in The Executive Budget.
The only other item for consideration by the Committee was the reduction in General Fund to reflect increased fringe benefit costs for employees funded from private trust funds.
Chairman Arberry asked how the Senate Committee on Finance had arrived at the figure of $115,000. Mr. Stevens was unsure how that number had been selected, as it was somewhat different than the $5,390 figure. He believed that any figure within that range would be appropriate.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 2940 IN ACCORDANCE WITH THE SENATE COMMITTEE ON FINANCE CLOSURE.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED WITH ASSEMBLYMAN BEERS VOTING NO.
BUDGET CLOSED.
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MUSEUM & HISTORICAL SOCIETY (101-2943) –
BUDGET PAGE CULTURAL-23
Mr. Stevens noted that BA 2943 included only minor technical adjustments to line up the vacancy savings amount with the amended amount provided by the Budget Division.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 2943 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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STATE RAILROAD MUSEUMS (101-4216) – BUDGET PAGE CULTURAL-27
Mr. Stevens pointed out that there was $337,500 in each year of the biennium recommended for ongoing restoration of railroad cars and improvements to the Boulder City Railroad Museum within the base budget for BA 4216. There were various pieces of equipment planned for rehab during the upcoming biennium, which was included in The Executive Budget.
According to Mr. Stevens, there were two positions recommended for elimination in BA 4216 in decision unit E-605. The Governor was recommending two of the four positions at the Boulder City Railroad Museum be eliminated.
Mr. Stevens said the only adjustments for the Committee’s consideration in the account were the same as other accounts, a truing up of the property and contents insurance amounts, and alignment of fringe benefit costs for the employee to the proper funding source.
ASSEMBLYMAN GOLDWATER MOVED TO CLOSE BA 4216 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
Assemblywoman Chowning asked whether the two positions recommended for elimination at the Boulder City Railroad Museum were the only positions being considered for elimination. Mr. Stevens stated there were 19 positions in the work program and 17 positions recommended in each year of the biennium in The Executive Budget. Mrs. Chowning asked whether the museum could function with only two positions. Mr. Stevens assumed that the museum would remain open, and pointed out that there were representatives from the Department of Cultural Affairs present at the hearing who could provide additional information.
Scott Sisco, Interim Director, Department of Cultural Affairs, explained that the museum in Boulder City had been in the start-up phase for approximately two years. During the 2001 Legislature, the budget contained an enhancement unit that added three positions so that the museum could become operational. Mr. Sisco reported that the Department had frozen those positions. He also explained that the Nevada Department of Transportation (NDOT) had issued a new plan that would eventually bypass the location of the museum, which gave the Department the opportunity to review the location and possibly move the museum across the road where there was access to tracks.
Mr. Sisco stated the NDOT process, plus the fact that the $4.5 million needed for the loop track extension for that particular railroad facility was not included in the Capitol Improvement Program, led to the proposed elimination of the positions. The Department would review the facility over the next biennium and possibly wait until the NDOT had completed the bypass and the Department could access the track already owned, which would eliminate the necessity for the $4.5 million. Mr. Sisco indicated that delaying the positions for two years would not adversely affect the museum, and would allow the Department to review other possibilities, such as a concessionaire possibly operating the facility or the train. At the present time, the Boulder City Railroad Museum could still operate at the current level, which included a Santa Train, along with other appropriate holiday trains.
THE MOTION CARRIED WITH MR. BEERS VOTING NO.
BUDGET CLOSED.
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COMSTOCK HISTORIC DISTRICT (101-5030) – BUDGET PAGE CULTURAL-33
Per Mr. Stevens, the agency was required to revert $960 based on lower attendance at board meetings during the current fiscal year. Funding had been adjusted to reflect the continuation of an average of one of the eight commission members missing one meeting. The remaining funding in BA 5030 would be $6,720, which was greater than the actual expenditure of $5,200 in FY2002.
ASSEMBLYMAN GOLDWATER MOVED TO CLOSE BA 5030 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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STATE HISTORIC PRESERVATION OFFICE (101-4205) –
BUDGET PAGE CULTURAL 36
Mr. Stevens pointed out that the Historic Marker Program had previously been funded by a $10,000 transfer from the Commission on Tourism, along with funding from the NDOT. The Executive Budget did not recommend continuation of funding from room tax revenue for the Historic Marker Program during the upcoming biennium. Mr. Stevens explained that would make the program supported by the General Fund, along with Highway Fund dollars. The only technical adjustments consisted of revised computer pricing for hardware and software, and truing up property and contents insurance.
ASSEMBLYWOMAN LESLIE MOVED TO CLOSE BA 4205 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN BEERS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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SOUTHERN NEVADA CORRECTIONAL CENTER (101-3715) –
BUDGET PAGE NDOC-24
According to Mr. Stevens, BA 3715 was the Southern Nevada Correctional Center (SNCC) located in Jean, Nevada, which had closed in September of 2000. Staff and inmates were transferred from that facility to the High Desert State Prison (HDSP), however, two staff remained at the SNCC in the capacity of caretakers. The only adjustments in BA 3715 were based on revised figures from the Budget Division regarding insurance assessments.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 3715 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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RESTITUTION CENTER, NORTH (101-3724) – BUDGET PAGE NDOC-86
Mr. Stevens explained that within the remaining Nevada Department of Corrections (NDOC) accounts, there might be some changes in the number of inmates in each account based on the new capacity plan submitted by the NDOC versus the numbers included in The Executive Budget; he believed those changes would be minor.
Mr. Stevens pointed out that the inmate room and board charge revenue, as recommended in The Executive Budget, excluded the first ten days of inmate residence at the Restitution Center. That represented a departure from historical practice and the Department had indicated that the ten days would provide time for an inmate to obtain employment or to accumulate personal funds prior to release. Mr. Stevens noted that the procedural change, which appeared to have been in place since FY2002, resulted in a need for increased General Fund support of $27,200 in each year of the upcoming biennium.
Also, stated Mr. Stevens, there were one-time miscellaneous equipment costs of approximately $500 that had been eliminated in BA 3724, and staff had deleted funding for inflationary food increases in decision unit E-500, consistent with the Committee’s prior action in closing other budgets within the NDOC. Mr. Stevens pointed out that the NDOC had taken exception to that action.
Darrel Rexwinkel, Assistant Director of Support Services, NDOC, stated that the NDOC felt very strongly about the request for inflationary food costs included in The Executive Budget. There were two aspects to the request, and the first was that it represented a major security issue. Mr. Rexwinkel explained that inmates held food very dearly and the NDOC was not extravagant in the food offered to inmates; it was very efficient in purchasing and menu planning, and he believed that the food costs were as low as possible. The cost would be astronomical should the inmates become upset with the food service and as a result made an attempt to destroy the culinary or took other action.
Mr. Rexwinkel noted that the other issue was from the cost perspective. For the 2003-05 biennium the food budget, including inflation, was $17.2 million, and the inflation component was approximately $750,000, which included a 1.8 percent annual increase. Mr. Rexwinkel explained that the inflation factor was based on the U.S. Department of Labor Producer Price Index for finished consumer food. The Index had increased 1.58 percent annually over the last nine-year period ending December 31, 2002, and Mr. Rexwinkel noted that was somewhat lower than the anticipated 1.8 percent included in the NDOC budget. He added that, according to the Index, the preliminary increase for January and February of 2003 was 2.7 percent greater than the figure at the end of December 2002. Mr. Rexwinkel pointed out that the Index did fluctuate each year. It had been elevated for seven of the nine years, down two-tenths of 1 percent for 1998, and down 1.3 percent for 2002. While there had been a small downturn in the Index in 2002, it had increased dramatically during the first two months of 2003.
Mr. Rexwinkel said the NDOC food cost, including inflation, for the upcoming biennium was only $2.29 a day per inmate, which excluded Ely State Prison, where costs were somewhat higher due to its location; the cost for the remote camps was $2.59 per day. Mr. Rexwinkel reported that the average for the western states, based on The 2000 Corrections Yearbook published by the Criminal Justice Institute, which included costs for foods, was $4.41 per day compared to the NDOC’s request for $2.29. According to Mr. Rexwinkel, the state of Wyoming had been excluded because that state had included labor costs in its food component; Hawaii had also been excluded because the costs in that state were extremely high; and Nevada had also been excluded. The costs referenced in The 2000 Corrections Yearbook were now dated and current costs would undoubtedly be higher.
Per Mr. Rexwinkel, the NDOC was required to comply with the provisions of the Nevada Revised Statutes (NRS) and should generally follow the American Correctional Association standards. Mr. Rexwinkel said the NRS required that each offender would be provided a healthful diet, and also provided that the State Health Officer would periodically examine and report to the Board semiannually regarding the following operations of the Department of Corrections: (1) The nutritional adequacy of the diet of incarcerated offenders, taking into account the religious or medical dietary needs of an offender, and the adjustment of dietary allowances for age, sex, and the level of activity; and (2) The sanitation, healthfulness, cleanliness, and safety of the various institutions, which included the culinary operations.
Mr. Rexwinkel explained that the principle on which the American Correctional Association standards were based was that meals must be nutritionally balanced, well planned, and prepared and served in a manner that met established governmental health and safety codes. The standards also stipulated that “dietary allowances as adjusted for age, sex, and the level of activity” should meet or exceed the recommended dietary allowances published by the National Academy of Sciences.
The NDOC provided nutritious meals, stated Mr. Rexwinkel, and the menu for the average inmate was approximately 2,900 calories per day in accordance with the recommended allowances set forth by the National Academy of Sciences. Most correctional department menus averaged from 2,900 to 3,200 calories per day. Mr. Rexwinkel pointed out that not only calories had to be considered, but the NDOC also had to consider protein content; carbohydrate content; and fat content, both saturated and unsaturated. He reiterated that the NDOC was required to provide a nutritious meal, and pointed out that medical costs should also be considered should the NDOC not provide nutritiously balanced meals.
Mr. Rexwinkel noted that the NDOC had been compared to the Division of Child and Family Services (DCFS) in that there were no inflationary costs included in the DCFS budget. While that was true for the youthful offender facilities, the non-offender facilities purchased food from Mental Health Developmental Services, which in turn purchased from a private contractor. Mr. Rexwinkel remarked that the non-youthful offender budgets in southern Nevada were budgeted at $3.95 per meal for FY2003, and that figure was budgeted to increase to $4.04 per meal in FY2004, and $4.15 per meal for FY2005, which represented an annual increase of 6 percent. Mr. Rexwinkel understood that the daily food budget for the DCFS youthful offender facilities was higher than that of the NDOC.
According to Mr. Rexwinkel, the NDOC served approximately 10,000 inmates, which averaged approximately 11 million meals per year, which was substantially higher than the number of meals served by the DCFS. The NDOC looked at the food budget from two perspectives, first, it needed sufficient money in the budget to purchase food, since food costs were increasing, and second, the NDOC believed nutritious meals were a necessity. Mr. Rexwinkel noted that the NDOC could not serve extravagant meals at a cost of $2.29 per day, which was much lower than the western states average of $4.41. He emphasized that the NDOC would appreciate the Committee’s consideration of the inflationary factor in its budget.
Chairman Arberry indicated that the Committee’s biggest concern was whether inflation had been budgeted over the current biennium. Mr. Rexwinkel replied that inflation for food costs had not been budgeted for the current biennium, and he further explained that the NDOC had brought its food costs down very low; however, the NDOC would need to continue to purchase food and the cost of that food was increasing. Mr. Rexwinkel stated if the NDOC did not receive inflationary costs for food for the upcoming biennium, it would amount to three years of inflation before the NDOC could request another increase.
Chairman Arberry asked why those costs had not been included at the time the budget was being prepared by the Governor and his staff. Mr. Rexwinkel emphasized that food inflationary costs were included in The Executive Budget for the 2003-05 biennium.
Speaker Perkins referenced the letter dated April 11, 2003, from Glen Whorton, Assistant Director of Operations, NDOC, Exhibit F, and advised that he took significant issue with the tone of the letter and the way it was framed. The letter discussed in great detail the retaliatory attitude of Legislative Counsel Bureau (LCB) staff and misrepresentations. Speaker Perkins believed it was important for all involved parties to understand that LCB staff complied with requests from legislators and worked for the Legislature. It was necessarily an adversarial system, because there were checks and balances between the Legislative and Executive Branches.
According to Speaker Perkins, the letter also spoke to the issue of not receiving inflationary increases during prior years, which undoubtedly had been the case, however, it was probably the worst possible year to request such an increase. He referenced the differences of opinion regarding whether or not the food issue would become a security concern and, while he understood the security issue and keeping inmates content, it was not viewed by many the same as having a sufficient number of correctional officers, or proper security fences, and so forth. Speaker Perkins noted it certainly was a behavioral modification issue.
Speaker Perkins believed it had been more of a difference of opinion rather than displaying a “retaliatory” attitude or misrepresentation on the part of LCB staff. The NDOC was one budget area that had the freedom and flexibility to transfer money amongst budget accounts, which was not allowed in many other budgets. He explained that the Ways and Means Committee had decided to review other budget accounts that included food provision, and where inflationary increases had not been provided; it appeared to be more of an equity issue. Speaker Perkins noted that Mr. Rexwinkel had explained the different impact on the NDOC.
It was disturbing when an agency went so far as to issue a letter such as had been penned by Mr. Whorton, and in the tone that it had been penned, and Speaker Perkins did not find that acceptable.
Chairman Arberry requested clarification regarding technical adjustments. Mr. Stevens explained that the budget closing recommendation took into account the elimination of one-time miscellaneous equipment costs of $505 in each year of the biennium. Depending upon the Committee’s decision regarding the food inflationary costs issue, the action would stand in a certain number of budgets where those dollars had been extracted; however, if the Committee wanted to add the food inflationary costs once again, the NDOC budgets would have to be reopened and the costs added.
Mr. Rexwinkel advised that Mr. Whorton could not be present at the hearing, but did extend his apologies for the aforementioned letter of April 11, 2003, Exhibit F. Mr. Whorton’s letter stemmed from his concern for the security and safety of the NDOC’s correctional officers. Mr. Rexwinkel indicated that Mr. Whorton believed food was a very significant security concern, particularly because of what could occur when inmates became disturbed over improper food, or insufficient amounts of food. Also, stated Mr. Rexwinkel, many of the inmates had a significant amount of spare time and liked to utilize the court system; he emphasized that the NDOC had attempted to provide meals that met the bare minimum standards and kept the costs down.
According to Mr. Rexwinkel, the inmate count within the NDOC was down, and during the current fiscal year, it had covered a substantial amount of costs increases, such as a $2 million utility increase, an increase in property insurance, the health insurance costs for employees, and the 3 percent budget reductions, which amounted to approximately $11 million. Mr. Rexwinkel explained that amount had been extracted from the NDOC budget, and he reiterated that the NDOC believed that the inflation factor was an important component.
Chairman Arberry asked Mr. Stevens to provide the closing report for the Pioche Conservation Camp.
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PIOCHE CONSERVATION CAMP (101-3723) – BUDGET PAGE NDOC-96
Mr. Stevens reported that the technical adjustments for Pioche Conservation Camp resulted in an increase of $4,475 in each year of the biennium for inmate-driven food costs, and there were adjustments to Lincoln County Jail costs of $137 in the second year of the biennium. Mr. Stevens noted that in decision unit E-500, the Committee would also have the decision regarding inflationary increases for food.
Chairman Arberry asked Mr. Stevens to continue his budget presentation with the Wells Conservation Camp.
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WELLS CONSERVATION CAMP (101-3739) – BUDGET PAGE NDOC-106
According to Mr. Stevens, the only adjustment in BA 3739 was for the inflationary increases for food, and staff could make necessary adjustments when the Committee made its decision regarding that cost.
Chairman Arberry instructed Mr. Stevens to proceed with the budget closing for Prison Industry.
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PRISON INDUSTRY (525-3719) – BUDGET PAGE NDOC-150
Mr. Stevens stated that in decision unit E-276, the Governor recommended additional revenue and expense authority of $1 million in FY2004 and $1.8 million in FY2005 for projected increases in sales and corresponding increases in direct manufacturing costs. Staff noted that the projections provided by the Department reflected estimates of increased manufacturing levels from those of FY2002. Mr. Stevens said the NDOC had noted that due to general economic decline, FY2002 sales had declined from the previous year’s level. One decision before the Committee was whether it wanted to approve budget authority for increased sales and direct manufacturing costs as recommended by the Governor. Mr. Stevens pointed out that Prison Industry was a self-funded budget and generated its own income.
Per Mr. Stevens, the Governor recommended funding for a community work program in decision unit E-278 that would provide for the employment of inmates outside institutional facilities while under the supervision of correctional officers. A community work program was approved by the Interim Finance Committee (IFC) in September 2001, however, had not been implemented due to the decline in the national economy. Mr. Stevens indicated that program costs included reimbursement from inmate wage assessments for the personnel costs of four correctional officers who would provide inmate supervision. Staff noted that the reimbursements were not included in the institutional budgets.
Mr. Stevens stated staff would recommend that four correctional officer positions be established in BA 3719, rather than a reimbursement to the institutional budgets. Mr. Stevens indicated staff would also recommend that a Letter of Intent be issued to the NDOC, which indicated that those positions were to be used only for the community work program and that the correctional officer positions in the institutional budgets should not be used for the program. Such action would ensure that overtime and the relief factor in the institutional budgets were not affected and that the integrity of the post staffing in the institutional budgets was maintained.
Mr. Stevens explained those were the major decisions in the decision units, and pointed out that there were also a number of technical adjustments.
Mr. Marvel asked Howard Skolnik, Assistant Director, Prison Industries, to respond to the recommendations from staff. Mr. Skolnik advised the Committee that the NDOC had discussed all referenced changes with LCB staff, and found all to be completely acceptable to the Department.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 3719 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
Assemblywoman Chowning asked about the License Plate Factory located within the NDOC, and the projected increase in revenue. Tracy Raxter, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), indicated that staff had received projections from the Department of Motor Vehicles regarding license plate sales.
There was a provision in the Nevada Revised Statutes (NRS) that Prison Industries would receive a small amount of money from each license plate sold. Mrs. Chowning commended the NDOC for its Prison Industries program.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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PRISON DAIRY (525-3727) – BUDGET PAGE NDOC-157
According to Mr. Stevens, the only minor technical adjustment in BA 3727 was included in decision unit M-100 for insurance.
ASSEMBLYMAN HETTRICK MOVED TO CLOSE BA 3727 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
********
Mr. Stevens reminded the Committee that BA 3724, BA 3723, and BA 3739 had not been closed, however, the budget closing reports had been presented to the Committee. The remaining item, unless there were changes to staff recommendations, was the issue of the inflationary food increase.
Speaker Perkins opined that, based on the current fiscal situation, it was not a good time to ask for increases. If the NDOC believed inflationary costs were a crucial issue, then perhaps a compromise would be to allow the authority for the NDOC to retain the inflationary increase in its budget, however, locate the appropriate savings in other areas of its budget.
SPEAKER PERKINS MOVED TO REMOVE THE INFLATIONARY FOOD COST OF 5 PERCENT FROM THE APPROPRIATE NDOC BUDGET ACCOUNTS.
Mr. Stevens asked whether the Committee wanted to extract that particular decision unit from the budget or increase the item and provide for some negative adjustment. Chairman Arberry stated that the Committee wanted to remove the inflationary food cost from the NDOC budget accounts.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Arberry indicated he would also accept a motion to close BA 3724, BA 3723, and BA 3739.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 3724, BA 3723, AND BA 3739 AS RECOMMENDED BY STAFF INCLUDING REMOVAL OF THE INFLATIONARY FOOD INCREASE.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGETS CLOSED.
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NEVADA STATE LIBRARY (101-2891) – BUDGET PAGE CULTURAL-41
Mr. Stevens advised that there were no major closing issues in BA 2891. There was an inflationary factor for books built into the budget in decision unit M-101, and the vacancy savings had been adjusted to agree with the latest vacancy savings schedule received from the Budget Division. That would result in a General Fund increase of $22,000, and Mr. Stevens wanted to ensure that the Committee was aware of that increase. The only other item would be adjustments for tort and employee bond costs for employees funded from federal funds.
ASSEMBLYWOMAN LESLIE MOVED TO CLOSE BA 2891 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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ARCHIVES AND RECORDS (101-1052) – BUDGET PAGE CULTURAL-47
According to Mr. Stevens, there were no closing issues in BA 1052, and staff would recommend closure as recommended by the Governor.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 1052 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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MICROGRAPHICS AND IMAGING (101-1055) – BUDGET PAGE CULTURAL-52
Mr. Stevens stated there were a number of positions in BA 1055 that were recommended for deletion; four positions within the base budget and an additional three positions within decision unit E-605. There were no major issues within BA 1055, and Mr. Stevens indicated staff recommended closure as recommended by the Governor.
ASSEMBLYMAN ANDONOV MOVED TO CLOSE BA 1055 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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NEVADA STATE LIBRARY – LITERACY (101-2893) –
BUDGET PAGE CULTURAL-57
There were no closing issues within BA 2893, and Mr. Stevens indicated staff would recommend closure as recommended by the Governor.
ASSEMBLYMAN PARKS MOVED TO CLOSE BA 2893 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYMAN GRIFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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NEVADA STATE LIBRARY – CLAN (101-2895) – BUDGET PAGE CULTURAL-61
No major closing issues existed in BA 2895, and Mr. Stevens advised that the recommendation would be to close the account as recommended by the Governor.
ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BA 2895 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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NEVADA ARTS COUNCIL (101-2979) – BUDGET PAGE CULTURAL-64
Mr. Stevens indicated the only adjustment made in BA 2979 was to increase the amount of the anticipated license plate revenue to a total of $51,000 in each year of the biennium. That resulted in an adjustment of $19,022 in each year of the biennium.
ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BA 2979 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN GRIFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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GAMING CONTROL BOARD (101-4061) – BUDGET PAGE GAMING-1
Jeff Ferguson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), explained that the main issue in BA 4061 was decision unit E‑176. The current Nevada Revised Statutes (NRS) required that all gaming employees would be issued gaming work permits, which were typically issued by the city or county in which the gaming employee lived. However, stated Mr. Ferguson, Clark County and the City of Las Vegas had indicated that as of December 31, 2003, they would no longer issue gaming work permits. As a result, statute required that the Gaming Control Board issue those work permits. Initially, The Executive Budget recommended that the Gaming Control Board provide work permits for Las Vegas and Laughlin.
Mr. Ferguson indicated that the original request was for $3.13 million over the biennium with $1.57 million of that comprised of General Fund dollars. However, the Gaming Control Board had been advised that other cities and counties throughout the state were considering not issuing gaming work permits as well, and Mr. Ferguson explained that as a result, the Gaming Control Board had reviewed the issue and submitted a revised decision unit E-176, which essentially would change NRS and require that the Board issue gaming work permits statewide. Mr. Ferguson explained that would be accomplished via registration in a database that would contain the information for all registered gaming employees, rather than the issuance of cards.
According to Mr. Ferguson, one request from the money committees was that the system be self-supporting and not utilize General Fund dollars. As a result, the Gaming Control Board had included the plan to register gaming employees statewide; the proposal to change the NRS and allow the Gaming Control Board to register gaming employees statewide was contained in S.B. 432. Mr. Ferguson reiterated that the registration would be self-supporting and would reduce the General Fund appropriation by $1.57 million over the biennium, based on the Governor’s recommended budget.
The Gaming Control Board had also indicated that it would require a $384,235 loan from the General Fund to initiate the program, and Mr. Ferguson assured the Committee that the loan would be paid back by the end of the biennium:
Mr. Ferguson explained that the new decision unit contained 10 positions as opposed to the original request for 12 positions, and all positions would be located in Las Vegas within existing space at the Gaming Control Board office in the Grant Sawyer Building. Essentially, there would be three shifts of employees working normal shift hours to accommodate the workload.
Mr. Ferguson pointed out that the current plan was based on the fee of $75 to register as a gaming employee. Staff had reviewed the Gaming Control Board’s proposal, the dollars, and the payback, and concurred that it was a reasonable proposal which would allow the Board to issue gaming work permits statewide. Mr. Ferguson advised that staff had made adjustments to BA 4061 to include the new decision unit, however, that action was pending approval of S.B. 432. Should the Committee choose to approve the budget as recommended by staff, Mr. Ferguson stated staff would request the authority to modify the budget accordingly, based on the final action regarding S.B. 432.
Chairman Arberry asked Dennis Neilander, Chairman of the State Gaming Control Board, to explain the time frame needed by the Board to implement the new database. Mr. Neilander explained that S.B. 432, as it was currently drafted and as it had passed out of the Senate on April 22, 2003, contained a provision that made the substantive sections of the bill effective January 1, 2004. That provision would provide the Board with six months to adopt any necessary regulations and to put the program in place prior to actually commencing with the registration of gaming employees. Mr. Neilander informed the Committee that the Board was confident the program could be made ready within that six-month time frame.
Assemblywoman Giunchigliani asked whether the program would be accessible via the Internet. Mr. Neilander stated the Board envisioned a master list which would be kept confidential, however, it would be necessary to provide access to licensees, therefore, the Board would eventually offer that service via computer access. According to Mr. Neilander, the exact mechanics of that program had not been established, but the Board would also have a manual system in place during the interim period. Ms. Giunchigliani asked whether the program would be available at multiple locations. Mr. Neilander explained that when a person applied for a gaming job, that person would go through the normal process and, at that time, the licensee would actually provide the prospective employer with an application along with a fingerprint card. The employer would then fill out the application and return it to the licensee with the other materials, and the licensee would provide the application to the Gaming Control Board at its Las Vegas office. Ms. Giunchigliani believed that would be more efficient in the long run. Mr. Neilander stated that would cut down the need for satellite-type offices which would require physical structures and facilities for face-to-face meetings. The Board was confident that it could initiate the program and save the state money. Ms. Giunchigliani concurred, and commended Mr. Neilander and the Board for devising a workable plan.
Assemblywoman Leslie also believed it would be a good program, however, her concern was with the $75 fee, which Mr. Ferguson stated had been the assumed fee when the budget was constructed. Ms. Leslie stated she had been tracking S.B. 432 and believed that statements had been made regarding an increase in that fee; she did not feel that employees should be required to pay higher fees. Mr. Neilander explained that the current language of S.B. 432 indicated that the Board would simply charge the actual cost. He further explained that a large part of that cost would be passed through to the Criminal Repository to conduct the state check and the Federal Bureau of Investigation (FBI), and so forth, which represented approximately $40 of that cost. According to Mr. Neilander, it was expected that fees would increase at the FBI level and the state level, which would leave the Board with approximately $30 to run the program. The only caveat would be that applicants would be responsible for securing fingerprint cards, and that could be accomplished at local sheriffs’ departments, private fingerprint services, or electronic fingerprint service. Mr. Neilander pointed out that the costs varied from jurisdiction to jurisdiction, so the employee would be required to pay the costs established by that jurisdiction.
Ms. Leslie pointed out that it might end up costing the employee more than the fee. Mr. Neilander believed it might be approximately $10 more, which was the amount determined by the initial survey conducted by the Board. Ms. Leslie noted that the permit would remain valid for five years, so if the amount were amortized, it would actually be less. She asked for clarification regarding the action that would be taken as current cards expired, and asked whether there were some counties that issued lifetime work cards. Currently, stated Mr. Neilander, if a person had already been issued a work card, the registration with the Board would expire at the same time the card would have expired. The indefinite cards would become an automatic five-year card, and Mr. Neilander explained that the statute attempted to accommodate that by setting the expiration on a person’s birth date. There were a few indefinite cards, but most did have an expiration date. Ms. Leslie thanked Mr. Neilander for his hard work regarding the proposal, which she believed was a good plan; however, she indicated that she would like costs to be kept down for the gaming employee.
Assemblyman Beers asked how the program would be implemented, and would the Board add persons to the database as cards expired, or was there some type of mechanism with the two large local governments to download and convert their database information. Mr. Neilander explained that during the last legislative session, legislation had been passed that required the Board to initiate maintenance of a master list of all persons issued a work permit, and where each person was located. That information was already part of the Board’s database, and that list would be amalgamated into the registration database, which would essentially marry the two together. Mr. Neilander stated that part of the costs referenced by Mr. Ferguson would be utilized in the initial period for up front costs in terms of marrying those lists together, and creating the master list that would be maintained on an ongoing basis.
Continuing his presentation, Mr. Ferguson stated that decision unit E-177 added six Electronic Lab Engineer positions and one Administrative Assistant position to BA 4061. The Gaming Control Board had testified that those positions were critical to keep pace with the gaming industry’s demand for testing electronic gaming devices, and also to reduce the backlog that currently existed for testing those devices. Mr. Ferguson indicated that The Executive Budget contained $1.4 million for the positions, the associated equipment, and operating costs. He informed the Committee that The Executive Budget recommended $154,979 of that amount would be allocated from the General Fund, however, the Committee had asked that the positions be fully funded with fees. The Gaming Control Board had complied with that request and had issued an amendment that removed all General Fund dollars from the positions and replaced those dollars with fees. Mr. Ferguson stated that in February of 2003, the Board had increased fees to accommodate those positions.
According to Mr. Ferguson, the Board had recently approached the Interim Finance Committee (IFC) and requested that four of the Electronic Lab Engineer positions be filled immediately or prior to the end of the current fiscal year. That request was approved, and decision unit E-177 would continue those four positions and add two additional Electronic Lab Engineer positions, along with one Administrative Assistant position.
Chairman Arberry inquired whether there were questions from the Committee regarding decision unit E-177, and hearing none, instructed Mr. Ferguson to continue his presentation.
Mr. Ferguson explained that the Governor recommended a total of $450,000 in FY2004 and $465,000 in FY2005 to continue the Board’s “credential pay plan.” The Board indicated that currently, all employees who received credential pay received the maximum payment, which was $5,000 per year paid semiannually. Mr. Ferguson indicated that historically, the General Fund portion of the credential pay plan had been removed from the Gaming Control Board’s budget and placed into the unclassified pay bill, along with specific language that outlined how the funding could be utilized by the Board. Accordingly, explained Mr. Ferguson, the budget had been adjusted to remove the General Fund dollars and staff recommended that funding for the General Fund portion of the credential pay plan be included in the unclassified pay bill, along with language outlining how the funding could be used.
Chairman Arberry instructed Mr. Ferguson to continue his presentation in the absence of questions from the Committee.
Mr. Ferguson stated that in decision unit M-400, audit travel funding, the Governor recommended General Funds totaling $90,000 in FY2004 and $74,000 in FY2005 for per diem costs related to travel for the Audit Division. The Board had previously testified that the Audit Division’s travel budget had shrunk due to the higher cost of travel and the expansion of the Division’s travel schedule. Mr. Ferguson pointed out that following the September 11, 2001, terrorist attacks in New York travel had been cut back, which had resulted in a substantial backlog of audits. Staff had reviewed the recommendation and the associated cost detail submitted by the Board, and believed that approval of the decision unit would be in the best interest of the state.
Assemblywoman Giunchigliani questioned the travel funding, and believed that presented a question that should be resolved. Chairman Arberry pointed out that travel costs were on the rise and the Board was required to perform audits of gaming licensees. The Chair recognized Dennis Neilander.
In response to Ms. Giunchigliani’s concern regarding travel, Mr. Neilander explained that part of the reason the Board had requested an increase in travel funding was because after its budget was closed during the 2001 session, certain per diem expenses had increased and the Board had been forced to absorb those increases within its budget. Also, stated Mr. Neilander, there had been several properties that closed and the Board was required to conduct an immediate closing audit when a licensee closed. Unfortunately, there were more closures than the Board anticipated and it had fallen behind. Mr. Neilander stated the Board had previously submitted a schedule to Committee members which detailed the audits the Board had to perform over the next biennium, and depicted where the money would be spent.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 4061 AS RECOMMENDED BY STAFF, INCLUDING APPROVAL OF PER DIEM COSTS.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
Assemblyman Marvel asked Mr. Neilander whether the turnover in the Audit Division had improved. Mr. Neilander replied that it had improved and the credential pay had been absolutely critical within the Division; he believed the pay continued to assist in keeping the avoidable turnover rate down, as well as being useful as a recruiting tool. The increases in the credential pay were due in part to the several auditors currently striving to receive licensure as certified public accounts (CPAs).
Mr. Neilander stated half of the staff were CPAs which was a great incentive for the remaining staff.
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GAMING COMMISSION (101-4067) – BUDGET PAGE GAMING-8
Mr. Ferguson reported that the only issue in BA 4067 was elimination of an Administrative Assistant III position that had not been filled since it was approved by the 2001 Legislature, which resulted in an $83,113 General Fund savings. There was also an allocation of $8,400 in FY2004 and $10,000 in FY2005 to purchase specialized equipment needed to analyze and verify hardware, software, and communications devices used in both interactive gaming devices and cashless wagering systems.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 4067 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
Chairman Arberry asked whether the position slated for elimination had not been filled because of the hiring freeze and, since the Board was short staffed, why was the position being eliminated. Mr. Neilander explained that the Board had utilized an existing position within the Board’s budget to assist the Senior Policy Analyst for the Gaming Commission with administrative matters. The Board had ultimately hired a person for the Senior Policy Analyst position, which was included in the Gaming Commission’s budget, and that person was very proficient in terms of computers and would not require additional help. Chairman Arberry asked what would happen if that qualified person quit. Mr. Neilander assured the Committee that the Gaming Commission did not need the position that was slated for elimination.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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GAMING CONTROL BOARD INVESTIGATION FUND (244-4063) –
BUDGET PAGE GAMING-12
Mr. Ferguson indicated that the only issue in BA 4063 was decision unit E-177, which transferred fees to the Gaming Control Board account to pay for the seven positions in the Electronic Services Division. Staff had modified that decision unit to add $106,158 in FY2004 and $48,821 in FY2005 to offset the General Funds that were removed from the Gaming Control Board account.
ASSEMBLYWOMAN LESLIE MOVED TO CLOSE BA 4063 AS RECOMMENDED BY STAFF.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
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REAL ESTATE EDUCATION AND RESEARCH (216-3826) –
BUDGET PAGE B&I-17
Joyce Garrett, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), advised that BA 3826 funded the review and approval of continuing education courses for Nevada’s real estate licensees and the licensing of instructors for those courses. Ms. Garrett reported that the Governor recommended $50,000 in additional funding in each fiscal year for contract services for licensee education programs in decision unit E-503. The actual expenditures in the base year were $21,125; the decision unit would increase total funding in each year of the biennium to $71,215 for contract services.
According to Ms. Garrett, the Governor recommended an additional $10,000 in decision unit E-502 during the upcoming biennium to print informational brochures, which would contain current issues for consumers and licensees. There was an additional $10,000 in funding in FY2005 recommended for printing costs for a textbook that the agency was developing. Ms. Garrett stated she had discussed that with the agency and it had not been able to provide firm cost justification for the funding to print the textbook, and had agreed to eliminate the $10,000 in funding in FY2005. Once firm costs were available, the agency would make a presentation to the Interim Finance Committee (IFC). According to Ms. Garrett, there were a number of other closing items which staff had determined were reasonable.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 3826 AS RECOMMENDED BY STAFF, ELIMINATING THE $10,000 FOR PRINTING OF THE TEXTBOOK.
ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.
Assemblywoman Chowning disclosed that she was a Nevada State real estate licensee, however, action by the Committee would not affect her differently than other licensees, and she would still be required to pay her fees; she stated she would vote on the budget closure.
Assemblyman Parks also disclosed that he was a Nevada State real estate licensee, and would vote on the budget closure.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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REAL ESTATE RECOVERY ACCOUNT (216-3827) – BUDGET PAGE B&I-24
Ms. Garrett explained that BA 3827 paid recovery claims that were made against licensees as ordered by a court of law. There were no closing issues in the budget account, and staff recommended closure as recommended by the Governor. However, Ms. Garrett noted there was one technical adjustment which consisted of an expenditure in BA 3827 that was made to transfer funds to BA 3826. It had come to staff’s attention that the transfer amounts did not match from one budget account to another, so there would be an approximately $3,000 adjustment to true up the budgets.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 3827 AS RECOMMENDED BY THE GOVERNOR INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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MOBILE HOME PARKS (271-3843) – BUDGET PAGE B&I-81
Ms. Garrett explained that BA 3843 investigated and resolved complaints made by tenants of mobile home parks regarding landlord violations of the provisions of the NRS. There were no major closing issues in the account, and staff recommended closure as recommended by the Governor, with one technical adjustment to true up the purchasing assessment.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 3843 AS RECOMMENDED BY THE GOVERNOR INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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MANUFACTURED HOUSING EDUCATION/RECOVERY (271-3847) –
BUDGET PAGE B&I-85
According to Ms. Garrett, BA 3847 had been established to satisfy claims, upon court order, against individuals and/or businesses licensed by the Division. There were no major closing issues and staff recommended closure of BA 3847 as recommended by the Governor with a technical adjustment to true up the purchasing assessment. Ms. Garrett advised the Committee that there was legislation tied to BA 3847 that would slightly increase revenue.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 3847 AS RECOMMENDED BY STAFF INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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FINANCIAL INSTITUTIONS INVESTIGATIONS (101-3805) –
BUDGET PAGE B&I-109
Ms. Garrett indicated that the purpose of BA 3805 was to reimburse the expenses associated with investigations of licensees, and costs associated with mergers, consolidations, conversions, receiverships, liquidations, and so forth. There were no major closing issues in the budget and staff would recommend that the account be closed as recommended by the Governor with one technical adjustment regarding the statewide cost allocation.
Assemblyman Goldwater stated that in a recent discussion with the Financial Institutions Division, he had been advised that a portion of the fees from mortgage brokers and banks allocated to BA 3805 were above the actual cost to regulate the entities. He noted that from the Division’s perspective, it appeared that money was allocated in excess of the amount needed for investigations. Mr. Goldwater indicated that the Division had informed him that a portion of the mortgage broker fee and mortgage agent registration fee was allocated to BA 3805, which did not make sense to him.
Ms. Garrett advised that she would research that issue and was not aware of that situation at the present time. Mr. Goldwater said he would not hold the closing of the budget, but stated there appeared to be considerable confusion.
ASSEMBLYMAN GOLDWATER MOVED TO CLOSE BA 3805 AS RECOMMENDED BY THE GOVERNOR INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins and Assemblyman Parks were not present for the vote).
BUDGET CLOSED.
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FINANCIAL INSTITUTIONS AUDIT (101-3882) – BUDGET PAGE B&I-111
Per Ms. Garrett, BA 3882 contained one full-time certified public accountant (CPA), who conducted special independent audits of licensees on an as needed basis and reviewed the annual financial information supplied by existing licensees and applicants for new licenses. There were no closing issues in the budget and staff recommended closure as recommended by the Governor with one technical adjustment regarding the statewide cost allocation.
ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BA 3882 AS RECOMMENDED BY THE GOVERNOR INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins and Assemblyman Parks were not present for the vote.)
BUDGET CLOSED.
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FORT MOJAVE DEVELOPMENT FUND (296-4496) – BUDGET PAGE CRC-8
Ms. Garrett explained that BA 4496 was established to manage the transfer of approximately 15,000 acres of land received by the Colorado River Commission from the federal government. Approximately 6,000 acres had been sold and 9,000 acres remained available for sale in the Laughlin area. Ms. Garrett stated the account basically collected any sales revenue from the land and supported the costs with that revenue and any interest the account might earn. There were no major closing issues in the budget account, however, the Laughlin Town Board had requested that the Colorado River Commission increase its efforts to find potential purchasers. Ms. Garrett stated that the Governor recommended an allocation of $1.2 million from the reserve in FY2004 for the transfer of funds to Clark County to be used for potential infrastructure development projects. That was included in the agreement when the land was turned over to the Colorado River Commission for use of the proceeds in the sale of the land.
After reviewing the projected FY2002-03 reserve balance, Ms. Garrett reported that staff recommended the $1.2 million transfer to Clark County be reduced by $400,000, which would provide an adequate reserve balance in the account to fund costs of future land sales.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 4496 AS RECOMMENDED BY THE GOVERNOR INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins and Assemblyman Parks were not present for the vote.)
BUDGET CLOSED.
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CRC RESEARCH AND DEVELOPMENT (296-4497) – BUDGET PAGE CRC-10
Ms. Garrett informed the Committee that BA 4497 provided for the cost of engineering studies, analyses, negotiations, and other efforts in protecting the interests of Nevada in the development of any of the resources under the control of the Commission. The current interstate environmental project was the Lower Colorado River Multi-Species Conservation Program, and decision unit E-375 recommended $507,501 in FY2004 and $573,062 in FY2005 for the cost of the planning phase of that program. Ms. Garrett pointed out that the Commission had expended only $88,091 in FY2002; the full amount had not been expended because of unanticipated delays in the program.
Additionally, stated Ms. Garrett, the agency had requested a reduction of $30,002 in each year of the biennium in decision unit E-375, to bring the total authority in the account to $500,000 in each fiscal year, which was the original intent.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 4497 AS RECOMMENDED BY THE GOVERNOR INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins and Assemblyman Parks were not present for the vote.)
BUDGET CLOSED.
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Chairman Arberry declared the Committee in recess, and reconvened the hearing at 11:13 a.m. The Chair indicated the Committee would continue budget closings.
STATE TREASURER (101-1080) – BUDGET PAGE ELECTED-86
Russell Guindon, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), stated that the only major closing issue in BA 1080 was a proposed amendment by the Budget Division to request a General Fund appropriation of $151,500 in each year of the biennium. That amendment would provide funding costs for the State Treasurer to mail checks through the State Mail Room. Mr. Guindon indicated that the Administrative Services Division had decided that the Treasurer’s Office mailing of voucher checks for various state agencies was a service provided by the Treasurer to those agencies and, therefore, should be paid directly from the Treasurer’s budget account. The General Fund would be reimbursed in future years through the statewide cost allocation, however, the recommended General Fund appropriation of $303,000 for the upcoming biennium would not be offset, as the reimbursement could not be implemented until the 2005-07 biennium.
Chairman Arberry asked that a representative from the Budget Division come forward and provide clarification regarding the issue. Andrew Clinger, Deputy Director, Budget Division, explained that the $151,500 had been previously included in the overhead for the State Mail Room, and was included in the cost charged to other agencies. The Budget Division believed it would be more appropriate to place that appropriation within the Treasurer’s Office budget and recover that amount through the statewide cost allocation.
Chairman Arberry asked what had prompted the proposed change. Mr. Clinger stated that placement of the funding in the Treasurer’s account would be a more accurate reflection regarding recovery of the costs because the State Mail Room might not necessarily mail out only checks and because of that, all the agencies were, in essence, paying a portion of the cost of the Treasurer’s Office, which would be included in their mail rate. According to Mr. Clinger, including the allocation in the Treasurer’s Office budget would more accurately reflect the costs. Chairman Arberry asked what would occur if the Committee did not approve the $151,500 allocation. Mr. Clinger stated the amount would remain part of the overhead for the State Mail Room if the Committee chose not to approve the recommended amendment.
Assemblyman Beers asked whether it was checks being mailed out, and Mr. Clinger replied in the affirmative. Mr. Beers opined that some of those checks could be attributed to large check runs such as benefit payments, and asked whether the costs could be tracked to specific agencies. If 50 percent of the mailing were vouchers for a federally funded program, perhaps the load on the General Fund could be lightened. Mr. Clinger stated it would be burdensome to attempt to direct-bill those agencies for such check mailings, however, he reiterated that those funds were recouped through the statewide cost allocation.
Mr. Beers noted that the Treasurer’s assessment had fallen significantly from prior years, from $448,000 in FY2003 to $291,000 in FY2004, and it appeared the amount had to be made up with General Fund appropriations. It was his understanding that a cost was generated and the mechanism used for distribution was apparently tied to interest earnings so that when the market, as a whole, declined, the assessment also declined with interest earnings. However, the same amount of work was probably being done by the Treasurer’s Office in maintaining that investment pool, and perhaps the Committee should look at future budgets that included some sort of an allocation based on percentage of monies being invested on a weighted average over the course of a month. Mr. Beers believed that would result in a more accurate recovery of the Treasurer’s costs.
Chairman Arberry declared that BA 1080, State Treasurer, would be held, and instructed Mr. Guindon to commence with his presentation regarding BA 3815.
UNCLAIMED PROPERTY (101-3815) – BUDGET PAGE ELECTED-101
Mr. Guindon stated that the only closing issue in BA 3815 pertained to out-of-state travel. The Governor recommended out-of-state travel funding of $15,105 in Category 11, Holder’s Publications, in each year of the biennium. That was approximately $7,327 more than legislatively approved for the 2002‑03 work program year. Mr. Guindon advised that staff had contacted the agency regarding the trips requested for each year of the biennium and, after consulting with the agency, staff recommended funding of $10,120 for out-of-state travel in both years of the biennium. That would result in a General Fund savings of approximately $4,985, and also the Committee should note that if the item were approved, a reduction could be made in funding for registration fees by $1,395 to $2,700 per year.
ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BA 3815 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins and Assemblywoman Gibbons were not present for the vote.)
BUDGET CLOSED.
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MUNICIPAL BOND BANK REVENUE (745-1086) – BUDGET PAGE ELECTED-111
Mr. Guindon explained that the Treasurer used BA 1086 for the Municipal Bond Bank Revenue program with regard to providing funding for local government projects. There were no major closing issues in the account, however, there was one technical adjustment to remove the balance forward from FY2004-05 because, under statute, in odd years the money reverted to the General Fund.
ASSEMBLYMAN PARKS MOVED TO CLOSE BA 1086 AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins and Assemblywoman Gibbons were not present for the vote.)
BUDGET CLOSED.
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MUNICIPAL BOND BANK DEBT SERVICE (395-1087) –
BUDGET PAGE ELECTED-113
According to Mr. Guindon, there were no major issues in BA 1087 and staff recommended closure as recommended by the Governor. He explained that BA 1087 was the account used by the Treasurer to implement the Municipal Bond Bank financing program.
ASSEMBLYMAN HETTRICK MOVED TO CLOSE BA 1087 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins and Assemblywoman Gibbons were not present for the vote.)
BUDGET CLOSED.
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TREASURER HIGHER EDUCATION TUITION ADMIN (101-1081) –
BUDGET PAGE ELECTED-92
Brian Burke, Senior Program Analyst, Fiscal Division, Legislative Counsel Bureau (LCB), indicated there were major closing issues within BA 1081. The Treasurer proposed to create a new unclassified Senior Deputy Treasurer position and eliminate two classified positions, an Administrative Services Officer IV (ASO IV) and a Management Analyst IV (MA IV). Mr. Burke stated that would result in a net salary savings of $60,914 in the first year of the biennium and $63,432 in the second year. The Treasurer indicated that the amended request would standardize classifications of the Treasurer’s management team and provide the Treasurer with greater flexibility.
Mr. Burke noted that S.B. 446 proposed to add two Senior Deputy Treasurer positions to the list of unclassified positions, and that bill had recently passed out of the Senate.
The second issue was the General Fund contributions, and Mr. Burke explained that the Higher Education Tuition Administration account had been established and maintained through General Fund appropriation loans that totaled $4.4 million. Beginning in FY2004, the Treasurer requested, and the Governor recommended, that the account be funded entirely with transfers from the Higher Education Tuition Trust Fund. Mr. Burke noted that General Fund appropriations would then be discontinued. The Treasurer requested, and the Governor recommended continued payback amounts of $25,000 per year in BA 1081. Payback amounts would be discussed further when BA 1092 was under review, and the decision would be whether the Committee wished to approve the continuation of the $25,000 General Fund payback amounts.
According to Mr. Burke, the actuarial study reported a 39 percent probability of sufficiency in the prepaid program. The Treasurer had indicated that NRS 353B.160 required the Board of Trustees of the College Savings Plan of Nevada to modify terms of future program contracts if the annual actuarial study revealed that the pricing formula was insufficient to ensure the actuarial soundness. Mr. Burke reported that the Treasurer and the Board of Trustees had implemented changes to the program, increasing the contract costs. He emphasized that no Committee action would be required regarding that issue to close the budget.
Mr. Burke stated that during FY2001-02, the Prepaid Tuition account bore the full costs of $370,000 for marketing and advertising consulting services. That amount had been split between the Prepaid Tuition account, $205,000, and the College Savings Plan account, $165,000.
The Committee had requested that the Treasurer’s Office calculate the impact the $370,000 in marketing and advertising would have if redirected to reduce the unfunded liability in the Prepaid Tuition program. Mr. Burke reported that the Treasurer’s Office had complied with that request, and estimated that if the $370,000 per year was invested and earned 7.5 percent interest, it would take until the year 2030 to pay off the $4.6 million unfunded liability, if the General Fund loan was included. Mr. Burke indicated that the Treasurer’s Office had written that, “Given the limited assistance toward reduction of the unfunded liability and the elimination of a coordinated effort to educate the public about these savings options, it would be unwise to eliminate the funding for marketing and advertising.”
Mr. Burke advised that one technical adjustment had been made in the account to reflect the current pricing, and staff would request the authority to make the appropriate cost allocation or assessment changes.
Assemblyman Goldwater opined that the funding for marketing and advertising should be removed from BA 1081, as it did not appear to be money well spent, particularly in the base budget. Mr. Goldwater indicated it was his hope that the amount in the base budget for marketing and advertising included in the Higher Education Tuition Administration and the College Savings Plan budget accounts could be utilized to fund the unfunded liability that existed in the tuition program. He stated he would make that in the form of a motion, if acceptable to the Chair.
ASSEMBLYMAN GOLDWATER MOVED TO REMOVE THE AMOUNT INCLUDED IN THE BASE BUDGET FOR MARKETING AND ADVERTISING TO FUND THE UNFUNDED LIABILITY IN THE TUITION PROGRAM.
ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.
THE MOTION CARRIED WITH MR. GRIFFIN VOTING NO. (Speaker Perkins was not present for the vote.)
Chairman Arberry informed the Committee that there were other issues within the budget for its consideration. Mr. Burke noted that the payback issue and the issue regarding the revised request for the position were also before the Committee for consideration.
Brian Krolicki, State Treasurer, informed the Committee that both the Prepaid Tuition Program and the College Savings Plan had been created legislatively, however, the actual implementation of personnel had been done through the IFC, which could only create classified employee positions. Mr. Krolicki explained that the request reflected the duties of the positions, what was expected of those positions, and would allow flexibility outside the classified system to better and more wisely utilize those positions. The request would also guarantee that employees were compensated in the same manner, and Mr. Krolicki explained that the Treasurer’s Office was in a position where its classified employees were making more money than its unclassified Deputy Treasurers.
Chairman Arberry noted that the second issue for Committee consideration was the General Fund payback of the $4.4 million loan, which Mr. Burke had explained to the Committee.
Chairman Arberry announced that BA 1081 would be held for further review, and asked Mr. Burke to commence his budget presentation regarding BA 1088.
MILLENNIUM SCHOLARSHIP ADMINISTRATION (260-1088) –
BUDGET PAGE ELECTED-96
Mr. Burke indicated that the first issue for Committee review was the sustainability of the Millennium Scholarship payments. There had been considerable discussion regarding the sustainability of the Millennium Scholarship program as currently configured. Mr. Burke noted that staff had made projections earlier in the session that under the current configuration, the program could not continue past FY2006. While the Treasurer’s Office did not concur with the projections, the Treasurer indicated that the trend clearly illustrated the need to make appropriate adjustments in order to ensure that eligible Millennium Scholars would have adequate funding. Accordingly, the Treasurer added language to his securitization bill, S.B. 448, to institute the following changes to the program:
Mr. Burke stated the securitized environment that was part of S.B. 448 included a proposal for a .5 percent administrative cap. He reiterated that no action was required from the Committee regarding the sustainability of the Millennium Scholarship payments, and the information had been presented in an effort to keep the Committee apprised that without some changes, the program could not continue indefinitely under the current funding structure.
Assemblyman Goldwater did not feel that the sustainability of the program was something the Committee could responsibly “brush over,” and he stated it was highly unlikely that when the current funding plan ran out, that the program would simply be shut down. Mr. Goldwater believed that a letter should be sent to the Treasurer suggesting that planning commence at the present time regarding future funding plans for the program, and that the Treasurer recognize the issue which existed within the Millennium Scholarship program, along with the needed funding level. Mr. Goldwater emphasized that the Committee could not simply ignore the issue because it was too important an item, and many people counted on funding from the Millennium Scholarship program. If acceptable to the Chair, Mr. Goldwater indicated he would offer a motion that the Committee issue a letter that outlined the legislative concern with the current funding structure, and with future funding sources, and how the funding would continue for the program once the tobacco settlement money was no longer available.
Chairman Arberry indicated that he would like further clarification, and asked whether approval of the budget closure would include the proposed changes in the GPA. Mr. Burke stated that approval of the budget would not include the program changes; he explained those changes were included in S.B. 448. Because the issue was relative to the Millennium Scholarship program, Mr. Burke had provided an overview for the Committee.
Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), concurred, and indicated that staff simply wanted to ensure that the Committee understood all the issues relative to the Millennium Scholarship program. He emphasized that program changes regarding the GPA would remain outside the budget closing. Mr. Stevens explained that the budget would provide the funding in whatever fashion the program existed, and if the criteria for eligibility in the program changed, that would not be done through the budget, but rather through legislation.
Assemblyman Goldwater opined that a collaborative effort was needed and he noted that Governor Guinn had introduced and promoted the program, which had worked well. Perhaps the Legislature should work with the Governor’s Office, the Treasurer’s Office, and the Board of Regents to determine whether the program could continue in the future, how it would be funded in the future, or would the program eventually be eliminated. Mr. Goldwater emphasized that the Legislature should address that issue now, because people planning on college were also planning on the scholarship funds.
Chairman Arberry concurred, and stated that the Legislature did not want the program to turn into a “cancer” that simply ate away the funding.
Assemblywoman Chowning acknowledged that S.B. 448 was not part of the budget closing issue, but she stated that far fewer people would be planning on a college education with the proposed increase in the GPA. That suggested increase went totally against the original intent regarding implementation of the Millennium Scholarship program, which was to provide assistance with tuition to as many people as possible. Mrs. Chowning stated that increasing from a 2.0 GPA to a 3.25 GPA by 2007 would eliminate a huge number of people, and perhaps there would not be the worry that too many people would apply because they simply would not qualify.
For the purpose of clarification, Mr. Burke stated that a GPA of 2.0 to 2.6 was the requirement for a college student to maintain eligibility for the scholarship. The high school GPA would eventually increase from 3.0 to 3.25.
Chairman Arberry declared that the Committee would take no further action on BA 1088, and instructed Mr. Burke to continue with BA 1092.
NEVADA COLLEGE SAVINGS TRUST (605-1092) –
BUDGET PAGE ELECTED-104
Mr. Burke advised that the Treasurer proposed to create a new unclassified Senior Deputy Treasurer position and eliminate an Administrative Services Officer IV (ASO IV) position. The second issue in BA 1092 was the General Fund payback contribution and, as previously noted, there would be a shift of the repayments from the Prepaid Tuition Administration account to the Nevada College Savings Trust commencing in 2006. Mr. Burke stated that according to the schedule provided by the Treasurer, the General Fund loans that had been made to the Prepaid Tuition program would be fully paid back by 2013.
As of April 12, 2003, stated Mr. Burke, there were excess revenue receipts of approximately $37,000 in the budget account, which could be used to accelerate General Fund loan paybacks or to reduce the liability of the prepaid tuition. The Treasurer’s Office had indicated that it planned to approach the IFC to discuss the disbursement of that excess revenue, and staff would encourage the Committee to consider using any excess revenues in BA 1092 as a possible General Fund payback accelerate or prepaid tuition payback.
Mr. Burke noted there were some nominal revenue adjustments that would result in a balance of $1,700 in the first year of the biennium and $2,400 in the second year, and if the Committee approved the adjustments made by staff, it should decide whether to dedicate those funds to a General Fund repayment or to a prepaid liability.
Chairman Arberry asked Mr. Stevens to provide clarification regarding the requested positions. Mr. Stevens explained that in BA 1088, the Treasurer requested that one position be eliminated and one position be reclassified to an unclassified Deputy Treasurer. That would create a savings in that budget account based on the elimination of the one position. However, stated Mr. Stevens, in BA 1092, the Treasurer was requesting that an ASO IV position be reclassified to an unclassified Deputy Treasurer position. The result would be that two ASO IV positions in two different accounts would be reclassified from an ASO IV to unclassified Deputy Treasurer positions and, in addition, one position would be eliminated in BA 1088. Mr. Stevens stated there would be two new unclassified Deputy Treasurer positions in lieu of two current classified positions.
Mr. Krolicki explained that the current ASO IV positions already acted as “bosses” within the Treasurer’s Office, and it was a matter of having the flexibility to utilize those positions in a much broader manner, particularly the position in the Prepaid Tuition account. Financially, from a budget standpoint, they were not General Fund positions and, in fact, in the Nevada College Savings Trust account, there was no budget allocation when the position was approved two years ago. Mr. Krolicki explained that all of the money had been entrepreneurially created to fund the positions, but because of the classified system, those positions received more compensation than an unclassified Deputy Treasurer. From the perspective of fairness within the Treasurer’s Office, Mr. Krolicki believed that the unclassified positions would be appropriate.
Mr. Stevens reminded the Committee that the advertisement component was included in two budget accounts, and any action by the Committee should be consistently applied.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 1092 INCLUDING APPROVAL OF THE TREASURER’S REQUEST TO CREATE A NEW UNCLASSIFIED SENIOR DEPUTY TREASURER POSITION, ADVISING THE TREASURER’S OFFICE TO APPROACH THE IFC ANNUALLY FOR APPROVAL OF REVENUE ALLOCATIONS WHEN COLLEGE SAVINGS PLAN REVENUES EXCEEDED WORK PROGRAM AUTHORITY, AND APPLICATION OF THE UNOBLIGATED BALANCES TOWARD THE REPAYMENT OF PREPAID TUITION GENERAL FUND LOANS OR THE REDUCTION OF THE UNFUNDED LIABILITY.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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DISCRETIONARY GRANTS – RESTRICTED (101-2709) –
BUDGET PAGE K-12 ED-21
Mr. Stevens informed the Committee that there were particular accounts within the Department of Education that were the responsibility of staff to close and bring recommendations to the Committee. He advised that those accounts had not been previously heard in Subcommittee.
Bob Atkinson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), indicated that BA 2709 and BA 2706 were very similar and included federal grants; the accounts were separated because of the rates. The programs in BA 2709 were entirely funded by federal grants and were subject to the Restricted Indirect Cost rate, which was currently estimated at 17.6 percent. The final amount would not be known until after negotiations had been completed, however, anticipated amounts were included in the budget.
Mr. Atkinson indicated that staff had adjusted the grant amounts to the most recent grant update, and the grants included in the account were:
· The Homeless Children Project
· The Robert C. Byrd Scholarship Program
· The Advanced Placement Fee Grant
· The Refugee School Impact Grant
· 21st Century Community Learning Centers
· The English Language Acquisition Grant
· The Reading Excellence Act
· The Nevada Character Education Project
According to Mr. Atkinson, staff would recommend that the account be closed as adjusted, with the caveat that staff would seek authority to continue to make adjustments for transfers between BA 2709 and BA 2706 for the necessary payroll transactions.
ASSEMBLYMAN HETTRICK MOVED TO CLOSE BA 2709 AS RECOMMENDED BY STAFF INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
Mrs. Chowning noted the elimination of the Bilingual Education and Immigrant Education Grant and wondered whether there would be additional money to teach children to read English. There were additional mandates, and she asked whether there would be additional funding.
Douglas Thunder, Deputy Superintendent for Administrative and Fiscal Services, Department of Education, stated that there was additional money. The English Language Acquisition Grant was in the neighborhood of approximately $3.6 million and the other two combined grants were approximately $1.4 million. Mr. Thunder stated the money would double, however, the Committee should bear in mind that previously the Bilingual Education Grant money was not directly distributed to schools for the purpose of teaching, but rather was distributed to state projects and to assist teachers.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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COMMISSION ON POSTSECONDARY EDUCATION (101-2666) –
BUDGET PAGE K-12 ED-34
Mindy Braun, Education Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), stated BA 2666 was the Commission on Postsecondary Education, which set policies, adopted regulations, and granted licenses to operate private postsecondary education institutions. The funding was through the state General Fund and the U.S. Department of Veterans Affairs. Ms. Braun indicated there were no major issues in BA 2666, however, S.B. 457 had been amended and passed by the Committee on Human Resources and Facilities. S.B. 457 would prohibit the use or attempted use of false or misleading educational credentials under certain circumstances. Ms. Braun reported that a fiscal note had not been requested by the agency, however, the agency had contacted staff to indicate a potential impact of the bill in the amount of $38,483 in FY2004 and $76,965 in FY2005. The costs would be for one part-time educational consultant in the first year of the biennium, and a full-time consultant in the second year.
Mr. Braun indicated that staff would recommend that BA 2666 be closed as recommended by the Governor.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 2666 AS RECOMMENDED BY THE GOVERNOR INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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NDE STAFFING SERVICES (101-2719) – BUDGET PAGE K-12 ED-37
Mr. Atkinson reported that BA 2719 had been created for the sole purpose of accounting for personnel-related costs of the numerous less than full-time positions that were included in the Department of Education, which were funded via multiple sources. Mr. Atkinson indicated there were no closing issues in BA 2719 and it was recommended that the account be closed as recommended by the Governor, with the caveat that adjustment might be required to align the revenue sources to the actual costs of positions that were supported by those revenues, should payroll/personnel adjustments be identified.
ASSEMBLYWOMAN McCLAIN MOVED TO CLOSE BA 2719 AS RECOMMENDED BY THE GOVERNOR INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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STUDENT INCENTIVE GRANTS (101-2606) – BUDGET PAGE K-12 ED-44
Ms. Braun reported that BA 2606 provided grants to eligible students who attended postsecondary schools and demonstrated substantial need. The federal programs from which funding was provided were the Leveraging Educational Assistance Program (LEAP) and the Special Leveraging Education Assistance Program (SLEAP). Ms. Braun explained there were state funding match requirements associated with each of the grants; the federal LEAP allotment had to be matched one-to-one by state funds, and the match had to represent an increase over three years. The SLEAP program required a two-to-one state match. According to Ms. Braun, the state match had traditionally been provided by a transfer of a portion of higher education’s share of the estate tax revenues from the Special Project Account, BA 2977, of the University and Community College System of Nevada (UCCSN).
Ms. Braun informed the Committee that there was one major closing issue within the account and that was insufficient state matching funds from the estate tax revenue for the UCCSN. The Governor recommended $448,487 in FY2004 and $451,750 in FY2005, to meet the state match requirements for the LEAP and SLEAP federal programs. As was traditional, the Governor recommended that the state match funding continue via the estate tax revenues from the UCCSN’s Special Project Account.
According to Ms. Braun, the Governor was only recommending $376,000 in each fiscal year through the UCCSN, which would provide a shortfall for BA 2606 in the amount of $72,292 in FY2004 and $75,555 in FY2005. Ms. Braun stated because of that, staff had provided three options for the Committee to consider:
Assemblywoman Giunchigliani asked about the amount of scholarships provided by the LEAP program. Ms. Braun explained that the maximum award from the LEAP program was $5,000 and the minimum was $200. The student had to be enrolled at least half-time in an eligible institution, which also included all private institutions. The student also had to be economically disadvantaged. Ms. Giunchigliani asked whether the scholarships were a form of financial aid and, if so, asked why the effort was duplicated because most colleges already offered financial aid.
Mr. Thunder informed the Committee that the LEAP program was one of the avenues used by the UCCSN for financial aid. The money was not distributed directly to students by the Department of Education, but rather was distributed among the institutions for postsecondary education. Mr. Thunder stated those institutions in turn funded the scholarships.
Ms. Giunchigliani asked whether the financial aid in the higher education budgets could be augmented through the funding provided by the LEAP program. Mr. Thunder reported that the federal funding, which required a state match, would be in question if the funding were allocated directly to the UCCSN. Ms. Giunchigliani asked whether the UCCSN’s financial aid money could be used as the state match. Mr. Thunder suspected that would create a supplanting issue. Ms. Giunchigliani stated the funding would be in addition and asked why it would be supplanting. Mr. Thunder explained that if the UCCSN used funding that was already being used for scholarships as the state match, it would create a supplanting issue.
Ms. Giunchigliani stated it did not make sense to her to duplicate the effort, and if it were an issue of financial aid, she would like to ensure that the same persons were not qualifying for more than one form of financial aid. She asked whether the 500 students currently utilizing the LEAP program had to be enrolled in specific programs. Mr. Thunder stated that Phyllis Furlong, Budget Analyst, Department of Education, was present at the hearing and had previously administered that program.
Ms. Furlong informed the Committee that as originally established the program had not allocated the state match portion of the funding to private schools. Originally, there had been a council that consisted of the UCCSN schools and private schools within the state that established the program. Ms. Furlong indicated that the state funds were allocated to the state schools, and the federal funds were also allocated to the state schools, however, a portion was also allocated to the private schools. Ms. Furlong stated there were 23 schools currently receiving funds from the LEAP program.
Ms. Braun indicated it was her understanding that the federal money could be used to provide scholarships to students at private schools, however, the state matching funds could not be used at private schools. If the federal money was eliminated that would also eliminate the scholarships for the private schools.
Ms. Giunchigliani asked that Ms. Braun provide a list of the institutions and the grant amounts that had been issued. She indicated that she was attempting to get a “handle” on who was actually being helped with those dollars, and asked that BA 2606 be held for further review.
Assemblyman Hettrick referenced option two that would reduce the program to the minimum level, and asked whether it would be possible to reduce the number of students from 400 to 375, which might eliminate the need for additional funding. His concern was based on the fact that estate tax revenues would be eliminated and the money would have to be replaced with General Fund dollars in the LEAP and SLEAP programs, or the programs discontinued entirely. Mr. Hettrick believed that the Committee should make some firm decisions rather than leading people “down the path” that the programs would be available when they might be eliminated. He asked whether there was another method that could be used to determine how many students participated in the programs.
Ms. Furlong explained that the schools which received funding would determine the amount allocated to students. Some schools might allocate up to the $5,000 limit in an extreme situation, however, that happened infrequently. There were schools, such as beauty academies, that might want to give 30 scholarships of $200 rather than one large grant. Ms. Furlong reiterated that the amount of each grant was up to the individual schools within the guideline amount of $200 to $5,000.
Per Ms. Furlong, if the Committee chose option two and did not add additional money the number of students receiving scholarships could be adjusted by individual schools. Ms. Furlong explained there was a maintenance of effort agreement and the state was required to meet that maintenance of effort through a two-to-one match for the SLEAP program and a one-to-one match for the LEAP program. That funding covered a three-year time period when the state could not go below that level of funding. If the state dropped below what was previously allotted for that program, the program would be lost.
Mr. Hettrick emphasized that the state matching funds could not be realized from estate tax revenue, which meant that in two years the state would be forced to replace $1 million in funding. He opined that at some point in time the Legislature had to decide whether to continue such practices; it was nice to keep programs operational, but the funding for the LEAP and SLEAP programs would cease with the elimination of the estate tax revenue. Mr. Hettrick believed that the Committee should make a decision because there would be no further estate tax revenue, and $1 million in funding would be needed in approximately two years.
Assemblywoman Giunchigliani concurred with Mr. Hettrick, and asked whether the LEAP program required a state match. Ms. Braun stated that both programs required a state match. Ms. Giunchigliani believed that the Committee should close the budget including option three, which would eliminate the SLEAP program and continue the LEAP program.
Ms. Braun noted that if the state retained one of the programs, it would have to be the LEAP program since that was the base program, and the overflow money was allocated to the SLEAP program. Mr. Thunder explained that the SLEAP program required a one-to-one match. Ms. Giunchigliani suggested that the Committee close the budget including option three, which would retain the LEAP program.
Mr. Thunder explained that the LEAP program was a one-to-one match, however, the state would be required to meet the maintenance of effort agreement, so the actual dollars would far exceed the federal dollars that would be received. Ms. Giunchigliani reiterated that the budget should be closed with option three.
Chairman Arberry announced that BA 2606 would be held for further review.
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DRUG ABUSE EDUCATION (101-2606) – BUDGET PAGE K-12 ED-53
Mr. Atkinson stated that the Federal Safe and Drug-free Schools and Communities Act provided funding to implement drug abuse education and prevention programs at elementary and secondary schools. Federal funds in the budget could only be used for education and prevention and could not be used for treatment. Mr. Atkinson reported that the program was 100 percent federally funded and at least 93 percent of the funds had to be passed through to local school districts where there were eligible programs.
According to Mr. Atkinson, there were technical adjustments to the account which included an adjustment of the revenue and expenditure authority to reflect the most recent grant award. Funding for training had been adjusted to $250, and the costs for a replacement computer and laptop computer had been adjusted to reflect the most recent prices available through the State Purchasing Division.
Mr. Atkinson directed the Committee’s attention to the Letter of Intent issue, and explained that for a number of biennia the Committee had been concerned about the effectiveness of the programs within BA 2606. Letters of Intent had been issued in 1997, 1999, and 2001. Mr. Atkinson stated that the Letter of Intent in 2001 called for staff to conduct a review of the effectiveness of the programs, specific to the programs operated in Nevada, with a report submitted to the Governor and the Interim Finance Committee (IFC) on June 30, 2002. According to Mr. Atkinson, that report was not furnished to the IFC, and the Department had indicated that with the current funding levels in the account, it would be unable to complete such a study. The Committee might wish to consider directing the Department to develop some performance indicators that would measure the effectiveness of the programs, or some other means of achieving the end results.
Assemblywoman Giunchigliani noted that there were many, many current drug programs and there should be a determination made regarding which two or three of those programs worked best, which would be the only programs funded. Ms. Giunchigliani advocated that all drug grant money should be reviewed to determine how many programs were being duplicated, whether it was from the Bureau of Alcohol and Drug Abuse (BADA), the Department of Education, or other sources, as it appeared there was no coordination of the programs. Ms. Giunchigliani believed the state could actually capitalize on the drug program dollars if the programs were coordinated. With no disrespect to the Drug Abuse Resistance Education (DARE) program, Ms. Giunchigliani pointed out that it had long been said that the program did not work and was not effective, yet dollars were still allocated for the program. Ms. Giunchigliani opined that schools could be surveyed and the top three drug programs could then be funded. She reiterated that the state should consolidate all grant money for drug programs, determine which programs worked best overall, and redirect those dollars to those programs.
Assemblyman Marvel concurred with Ms. Giunchigliani and noted that the issue had been discussed during the 2001 session, however, no action had been taken because of time constraints. It was obvious that there was a significant amount of funding for drug programs, but there never seemed to be significant results from those programs.
Assemblyman Hettrick pointed out that staff indicated that a study had been conducted in 1999 regarding the programs utilized in Nevada, but the conclusions were not based in Nevada, so an additional study had been requested. He noted that the study had never been completed based on the lack of federal funding. Mr. Hettrick wondered why the Committee could not go back to the 1999-based national research and pick the top three programs for funding, rather than funding 100 programs with 100 different administrators, along with the resultant accounting required to satisfy the federal funding source. Mr. Hettrick opined that programs could be consolidated to produce more effective programs that included a lot less expense for administration.
Dr. Keith Rheault, Deputy Superintendent for Instructional, Research, and Evaluative Services, Department of Education, indicated that one of the reasons staff had not completed the requested study was because after review of the original study, it had been determined that no new programs had been added. Dr. Rheault indicated he would provide a copy of the 1999 study and would check the federal grants to determine whether the state had authority to set the priorities; in some grants, that authority was left up to the school districts.
Ms. Giunchigliani believed that was an excellent idea. Dr. Rheault stated that with some grants, the priorities could be limited, depending upon the wording in the grant.
Assemblywoman Leslie agreed with Ms. Giunchigliani that drug prevention programs within the BADA should be reviewed, and asked that staff request the same type of information from BADA. She referenced the Drug Commission within the Department of Public Safety, and asked that staff also request information from that Commission.
Assemblywoman Chowning pointed out that the Committee should be aware that one position had already been eliminated which dealt with AIDS and drug abuse education because of reductions in federal funding.
Chairman Arberry announced that BA 2605 would be held.
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SCHOOL HEALTH EDUCATION – AIDS (101-2611) –
BUDGET PAGE K-12 ED-57
Mr. Atkinson stated the program was funded through a grant from the Centers for Disease Control (CDC) to assist school districts in development of comprehensive health education programs to prevent the spread of AIDS and other sexually transmitted diseases. The funding level in BA 2611 was considerably reduced based on the fact that the federal government was no longer making that level of funding available. Mr. Atkinson pointed out that reduction had been reflected in the recommended budget.
Mr. Atkinson stated that the budget account supported 10 percent of two positions in the Nutrition Education budget account, and there had been a minor adjustment to bring that into alignment. There had also been an adjustment to the price of computer equipment to reflect the most recent prices available from the State Purchasing Division.
With those adjustments, Mr. Atkinson indicated that staff would recommend closure of BA 2611 as adjusted, including the authority to make the necessary adjustments.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 2611 AS RECOMMENDED BY STAFF INCLUDING TECHNICAL ADJUSTMENTS.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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DISCRETIONARY GRANTS – UNRESTRICTED (101-2706) –
BUDGET PAGE K-12 ED-79
According to Mr. Atkinson, BA 2706 and BA 2709, Discretionary Grants – Restricted, were separated only because of the type of indirect costs paid from each.
Mr. Atkinson stated BA 2706 included four federally-funded programs: (1) The Public Charter Schools Program, which provided supplemental support to educational programs in charter schools and assistance to charter schools in the planning phase; (2) National Cooperative Statistics, which provided funding for participation in training for appropriate responses to federal requests; (3) The NAEP Task Order, which provided funding for administering the National Assessment of Education Program; and, (4) The National Community Service Program, which provided training, technical assistance, and support for implementation costs for service-learning in the classroom.
According to Mr. Atkinson, grants which had been included in the account consisted of: (1) The federal Class-size Reduction program; (2) The Technology Literacy Challenge Grant program; (3) The Goals 20O0 program; and, (4) The Christa McAuliffe Fellowship program. Those grants had been discontinued in their original format, however, it should be noted that class-size reduction was one of the acceptable uses of the new Teacher Quality Grant included in BA 2713. Mr. Atkinson further explained that a portion of the No Child Left Behind funding within BA 2713 could also be used for education technology. It had not been anticipated that the Christa McAuliffe Fellowship program would continue.
Mr. Atkinson informed the Committee that there were no closing issues in BA 2706 and staff would recommend closure as recommended by the Governor.
ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 2706 AS RECOMMENDED BY THE GOVERNOR.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
BUDGET CLOSED.
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Mr. Stevens provided an overview of meetings scheduled for April 24, 2003.
With no further business to come before the Committee, Chairman Arberry adjourned the hearing at 12:17 p.m.
Carol Thomsen
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: