MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

 

Seventy-Second Session

May 19, 2003

 

 

The Committee on Ways and Meanswas called to order at 8:08 a.m., on Monday, May 19, 2003.  Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada, and through simultaneous videoconference in Room 4405 of the Grant Sawyer 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

 

GUEST LEGISLATORS PRESENT:

 

Assemblywoman Ellen Koivisto, District No. 14

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Assembly Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Rick Combs, Deputy Fiscal Analyst

Mike Chapman, Program Analyst

Linda Smith, Committee Secretary

Anne Bowen, Committee Secretary

 

Chairman Arberry called the Committee to order, and opened the hearing on A.B. 297.

 

Assembly Bill 297 (1st Reprint):  Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38-885)

 

Charles Duarte, Administrator, Division of Health Care Financing and Policy (HCF&P), advised that the issues of concern pertained to the hospitals in Las Vegas.  The bill would make changes to the administration of the Disproportionate Share Hospital (DSH) program, one of which would be to ensure that the state’s net benefit from the program as contained in The Executive Budget was protected.  Mr. Duarte explained A.B. 297 would allow retention of the net state benefit from the DSH program at the necessary level within the budget.  The bill would also protect the interests of rural hospitals, a goal that was supported by the Division.  Mr. Duarte indicated, from the state’s standpoint, it appeared that the bill would serve the Division’s needs.

 

Michael Alastuey, representing the University Medical Center (UMC), voiced support for A.B. 297.  The bill incorporated the findings of an interim study conducted by the Legislative Committee on Health Care concerning distribution of federal DSH funds.  According to Mr. Alastuey, DSH was a federal program that provided approximately $38 million in net benefits to qualifying hospitals and the state of Nevada combined.  Mr. Alastuey remarked that the UMC had recently received DSH funding in the amount of approximately $15 million for FY2002.  A number of other hospitals also received DSH funding, as did the state for its needs in balancing the budget. 

 

According to Mr. Alastuey, although the federal government required approximately $32 million in matching funds from non-federal sources, the state provided no matching funds, however, required that hospitals and counties pay approximately $48 million, which was paid almost entirely by Clark County.  That amount was paid into the state’s Intergovernmental Transfer account and the extra $16 million beyond the match requirement was either retained by the state in reserve or utilized for the Medicaid program in lieu of state funding.  Mr. Alastuey pointed out that Clark County taxpayers funded the program for the entire state, which was somewhat troublesome, and the county was concerned that there would be further proposals that would disadvantage southern Nevada taxpayers.  Southern Nevada taxpayers bore the burden of the matching fund requirement, and Mr. Alastuey reiterated that Clark County was the financial foundation for the DSH program.  Without the payment from southern Nevada taxpayers, Nevada’s DSH program would either collapse, which meant that no entity, including the state, would receive DSH funding, or the state would be forced to secure another funding source for the $32 million to match the federal funds. 

 

Currently, stated Mr. Alastuey, the state retained approximately $16 million and proposed to retain $17 million and $18 million respectively during the upcoming biennium.  The UMC in Clark County was approved for the program and the concern was in protecting the UMC’s share of the DSH funding.  Mr. Alastuey stated the DSH allocation proposed in A.B. 297 was absolutely critical to the UMC, particularly after the events of September 11, 2001, and the ensuing obvious economic challenges faced by the community regarding uninsured individuals and the uninsured working poor.  The UMC had borne a disproportionate burden and had incurred a 28 percent increase in patients who could not pay for their care.  Mr. Alastuey remarked that the continuing number of uninsured, along with the historically high levels of uninsured care at public hospitals overall, placed greater responsibility on the UMC than ever before.  Also, stated Mr. Alastuey, for the public good, the UMC bore costs not required from other hospitals:

 

1.      The UMC was the primary teaching hospital in Nevada.

2.      The UMC had to incur costs, under contract, to make available a variety of physicians and practices for indigents, along with a complete spectrum of care.

 

Mr. Alastuey indicated there were a greater number of indigent people who could not pay for their care at the UMC, therefore, additional incentives were required by doctors to practice at the hospital.  There was only a fixed amount of federal benefits available, and Mr. Alastuey explained that benefit amounts were typically debated with great vigor among hospitals. 

 

According to Mr. Alastuey, at the conclusion of the 2001 Session of the Legislature, there had been much concern regarding the lack of a consistent, common statistical base, which was necessary in order to make reasonable decisions regarding the Disproportionate Share Hospital (DSH) program.  Disputes over conflicting statistics had occurred and decisions had been made without a consistent method for determining the true needs of hospitals that served uninsured patients.  At the end of the 2001 session, with frustration at its highest, Mr. Alastuey indicated that all participants had finally agreed to conduct and honor an independent study that would determine the fairest sustainable method for distribution of the funds; however, despite completion of that study, everyone did not agree with all aspects of the study. 

 

Mr. Alastuey stated that the outside consultant had conferred on a number of occasions with fiscal experts and persons who were particularly expert in reimbursement and rate establishment on behalf of all hospitals.  Mr. Alastuey noted that the consultant recommended the concept of net uncompensated care as a basis for distribution of DSH funding, which had been adopted by the interim committee.  That concept included the total care in dollar amounts that had been provided to persons who were uninsured, defrayed by the amount in governmental payments from Medicaid, county social services, or other sources. 

 

Mr. Alastuey indicated there were a number of uncompensated costs incurred by the UMC that were not included in the analysis.  Nonetheless, the study showed conclusively that the UMC bore the highest percentage of net uncompensated costs of any hospital in the state by far.  Mr. Alastuey stated the study had found that:

 

·        Net uncompensated costs should be used to determine which hospitals should receive DSH funds

·        Of all the hospitals in the study, the UMC incurred by far the highest percentage of costs on behalf of uninsured patients

·        Net benefit to hospitals could continue to be distributed generally based on population for hospitals in Clark, Washoe, and other counties

·        Hospitals currently receiving DSH funds could receive those funds on a continuing basis, with the exception of one hospital which the study found should be eliminated due to the extremely low percentage of uncompensated costs, and two other hospitals that should have adjustments in terms of reductions

·        Should DSH funding increase in the future, that increase should be distributed to those hospitals incurring the highest percentage of net uncompensated costs

 

According to Mr. Alastuey, there were those that disputed the interim study, and the alternate language and numbers would be of major harm to the UMC.  There had been discussion that the UMC had issues regarding efficiency, and yet the cost comparisons from audited sources could all be explained; some of the cost comparisons actually excluded legitimate costs borne only by the UMC.  Mr. Alastuey noted that there had been studies commissioned by the UMC, which faulted the UMC’s collection process, when it was actually the UMC’s mission to provide care to persons who would never be able to pay.  It had been said that other patients were more acutely ill or of higher acuity than those at the UMC, but that was based only on one measure of acuity.  Mr. Alastuey indicated there were those who believed the UMC should give its share of DSH funds to profitable private hospitals in the name of fairness, which ignored the fact that the UMC essentially bought and paid for the DSH program for the entire state. 

 

Mr. Alastuey reiterated some persons believed that southern Nevada taxpayers should not pay money to profitable private hospitals.  He indicated such action would not provide additional treatment to patients for free and would not increase access to care.  Any claims that disputed the findings of the study, based on those and other assertions, had but one purpose, which was to divert attention from the fact that some hospitals had far lower percentages of net uncompensated care, and therefore might be disqualified from the DSH program under the findings of the study.

 

Mr. Alastuey stated the UMC supported A.B. 297 because it was faithful to the interim study, which found that DSH funding should be allocated to hospitals that provided the greatest percentage of net uncompensated care.  The bill would allocate the amount necessary to the state to balance the budget, would keep rural hospitals whole, and would allocate approximately $2 million less to the UMC than it had received in FY2002.  Knowing that budgets were extremely tight, Mr. Alastuey stated the UMC would ask the Committee to support the funding levels depicted by the bill, so that the UMC’s financial position would not be further eroded.  Finally, stated Mr. Alastuey, the UMC also supported establishment of the allotment process within statute, so the DSH program would not have to be revisited every two years by the Legislature.

 

Assemblywoman Chowning commented that there had been allegations that the UMC had not been efficient in debt collection, and she noted that the majority of the persons treated by the UMC, along with other hospitals, were indigent, however, it appeared that the UMC treated a greater number of such patients than other hospitals.  Mrs. Chowning stated that no matter how efficient the hospital attempted to be, if a person did not have insurance there would be no entity to contact regarding payment of the bill.  Mrs. Chowning asked whether there were other sources available to the UMC regarding payment of bills for indigent persons.

 

Mr. Alastuey believed that was a very good point, and explained that the historic patient mix at the UMC, along with other publicly supported and private hospitals nationwide, consisted of a great number of uninsured non-working and uninsured working individuals.  The numbers varied widely in terms of net uncompensated care, which arose from the nature of the population and the uninsured status.  Mr. Alastuey indicated that every hospital could be more efficient, and profitable private hospitals, marginal private hospitals, and good public hospitals were always seeking ways to improve collections.  Mr. Alastuey stated every hospital had to be efficient, but if the nature of the population were such that the hospital served a large number of uninsured indigent persons, that hospital simply would not have the same success at collection as other hospitals.

 

Assemblywoman Leslie asked which formula Mr. Alastuey was addressing with his statement that he would like to see the formula made a part of statute.  Mr. Alastuey replied that the allocation formula included in A.B. 297 contained a section that referenced the amounts upon which the state plan should be based, and a section that determined base grants to hospitals.  Ms. Leslie asked whether Mr. Alastuey was referring to the formula in the first reprint of A.B. 297, and Mr. Alastuey replied in the affirmative.  Ms. Leslie asked whether there was a similar bill currently under consideration by the Senate.  Mr. Alastuey stated there was a similar bill under consideration by the Senate Finance Committee, however, that bill had not been amended to date, even though the amendment language had been made available to that Committee.  The Senate bill would not set the formula in statute, and simply delineated the base grants for the two fiscal years of the upcoming biennium.  Ms. Leslie asked Mr. Alastuey whether he would prefer passage of A.B. 297, since it would set the formula in statute, and Mr. Alastuey replied in the affirmative.

 

Mr. Alastuey explained there was one other difference between S.B. 235, as it currently existed, and A.B. 297, as amended.  S.B. 235 contained a carve-out of one-sixth the amount set aside for private hospitals in Clark County for the Sunrise Hospital and Medical Center, which was not included in A.B. 297. 

 

Mr. Marvel asked about the aforementioned hospitals that did not qualify for the DSH program.  Mr. Alastuey replied that the interim study found that the Sunrise Hospital should not receive DSH funding based on the net uncompensated parameter, and also suggested some adjustments for the Carson-Tahoe Hospital and the Churchill Community Hospital. 

 

Assemblywoman Ellen Koivisto, District No. 14, believed that Mr. Alastuey had adequately explained the study conducted by the interim committee.  She advised that every two years, the Legislature grappled with the DSH program issue, and over the past interim the Legislative Committee on Health Care had contracted with an outside group that had no interest in any of the hospitals in Nevada.  Mrs. Koivisto explained that the study had produced a formula, which the Assembly Committee on Health and Human Services believed should be included in statute, so that a set formula would be available rather than “fighting” over DSH funding every two years.  Mrs. Koivisto emphasized that the formula should be set in statute.

 

Chairman Arberry referenced the interim study, and asked whether all parties involved had agreed to the study, and that the end results would be acceptable to all entities.  Mrs. Koivisto replied in the affirmative.  There had been studies conducted in the past, where various hospitals used different methodologies to report the dollars, and the current interim study had used the same data from every hospital and compiled the data in the same manner, as the basis of the report.  Chairman Arberry asked whether all involved parties had come before the Interim Committee when hearings were held and voiced support on record for the study, no matter what the outcome.  Mrs. Koivisto stated it was her recollection that all parties were supportive of the study being conducted by an outside consultant, however, she could not assure Chairman Arberry that all parties had voiced that support on record.

 

Charles Duarte, Administrator, Division of Health Care Financing and Policy (HCF&P), indicated that, although the state was not directly involved in the interim study, he had attended some hearings.  It was his recollection that the hospitals, which were the stakeholders in the process, had agreed to participate in the study.  Mr. Duarte could not recall whether representatives from the hospitals had actually agreed to abide by the findings of the study, as it appeared the hospitals would reserve comment until the study had been completed.  Mr. Durate reiterated that all of the major stakeholders had participated actively in the development of the study.

 

Chairman Arberry asked whether there were further questions or testimony forthcoming regarding A.B. 297.

 

Robert Ostrovsky informed the Committee that he represented Lake Mead Hospital, which was one of the beneficiaries of DSH funding in Clark County, and Lake Mead Hospital had received a much larger share from the 2001 session than had been received in prior years.  Mr. Ostrovsky advised that Lake Mead Hospital would support A.B. 297, therefore, would also support the conclusions of the study.  Lake Mead Hospital had participated in the interim process and, in support of the study, had provided data to the consultants.  Mr. Ostrovsky stated that the hospital was aware that it would have to deal with the results of that study, not knowing what the outcome would be.  The Committee might hear testimony that the definitions of uncompensated care in the study were inappropriate, however, Mr. Ostrovsky disagreed, and stated that Lake Mead Hospital believed the study did define uncompensated care properly, and it was one of the hospitals that had a disproportionate share of uncompensated care.  Mr. Ostrovsky emphasized that there was no dispute that Lake Mead Hospital was number two behind the UMC in its percentage of uncompensated care.

 

According to Mr. Ostrovsky, Lake Mead Hospital was located in the older section of North Las Vegas, had experienced continuing growth in uncompensated care, and received no Medicaid payments or county social service payments in support of the indigent population.  On the other hand, stated Mr. Ostrovsky, the City of North Las Vegas was embarking on probably its largest growth ever, and was experiencing significant growth and construction.  Unfortunately, Lake Mead Hospital would not benefit from that growth and construction.  Mr. Ostrovsky indicated that a number of hospitals were being built on the edges of North Las Vegas, however, Lake Mead Hospital continued to experience problems in the core area where it was located, and would for some years to come, until additional redevelopment money was forthcoming and situations were created where the working poor were offered health insurance benefits.

 

Mr. Ostrovsky informed the Committee that he would not argue that Lake Mead Hospital could be as efficient as any of the large hospitals in Clark County; it was a smaller hospital and was less efficient.  The hospital attempted to be as efficient as possible with the resources available to a small hospital in comparison to other larger facilities in Clark County.  Mr. Ostrovsky referenced the possibility of other entities sharing in the money received by the UMC and Lake Mead Hospital, and he asked that the Committee keep in mind the definition of uncompensated care, and the hospitals that were required to provide the highest degree of uncompensated care.

 

Assemblywoman Leslie noted that the preference of Lake Mead Hospital, as stated by Mr. Ostrovsky, would be passage of the first reprint of A.B. 297 rather than the Senate version of the bill.  Mr. Ostrovsky replied that was correct.

 

Lynn Fulstone informed the Committee that she represented Sunrise Hospital, another interested party in the DSH funding.  In terms of the study, it was Ms. Fulstone’s understanding that all interested parties wanted the issue to be studied, in order to develop a formula that would not have to be revisited every session.  However, stated Ms. Fulstone, it was also her understanding that Sunrise Hospital had not agreed to abide by the yet-to-be-seen results of the study.  Sunrise Hospital would also agree that the UMC provided the largest share of uncompensated care in Clark County and that fact could not be disputed.  Ms. Fulstone also stated that the UMC had a huge burden in Clark County that it tried its best to address.  The concern was that the DSH funding should be allocated to all hospitals that provided a high level of uncompensated care, and Sunrise Hospital happened to provide the third highest level of uncompensated care behind the UMC and the Lake Mead Hospital in Clark County.

 

Ms. Fulstone referenced the packet provided to the Committee, Exhibit C, which contained a document entitled, “Summary of Proposed Amendment to SB 235,” which would also apply to A.B. 297.  The proposed amendments had been presented to the Senate Finance Committee and would achieve the state’s objectives to fairly compensate the state and provide the state with the same amount of money it was currently receiving and the amount that was projected for the 2003-05 biennium.  Ms. Fulstone believed that the proposed amendments would also fairly distribute DSH funds to those hospitals that provided a disproportionate share of care to low income patients throughout the state.  The proposed amendments would protect rural hospitals, explained Ms. Fulstone, which was one of the goals of the interim study and the Division of Health Care Financing and Policy (HCF&P).  Ms. Fulstone stated that the proposed amendment simplified the DSH formula tremendously.  The proposed amendment intended to provide flexibility and talked in terms of percentages rather than absolute dollars, which were included in statute and had to be addressed every biennium.  Ms. Fulstone explained that the absolute dollars contained in both bills did not depict the actual dollars the state would receive in federal DSH funds, and would have to be amended.

 

Ms. Fulstone referenced Exhibit C, and pointed out that the proposed amendment dealt with an audit of all hospitals that received DSH funds, which would provide some financial accountability for those hospitals.  The state could then be certain that those hospitals were truly caring for indigent patients and not incurring uncompensated costs due to other things such as inefficiency.  An example of inefficiency would be not collecting accounts receivable from paying sources, which could drive up the cost of care, and that would not be attributed to indigent patients without insurance.  Ms. Fulstone stated the cost of care could include many things other than simply caring for patients who truly had no source of income.  The audit mechanism would identify those things and keep all hospitals accountable for receiving DSH funds.  According to Ms. Fulstone, audits would be conducted by the Legislative Auditor any time a hospital’s cost-to-charge ratio would exceed 10 percent of the average for similar hospitals in that geographic region.  The proposed amendment also provided for the mechanics of the audit, required the hospital being audited to pay for the audit, and if a hospital’s audit determined that its cost-to-charge ratio was in excess and was not justified, that hospital would forfeit a certain portion of DSH funds.

 

The next section of the proposed amendment, Exhibit C, stated Ms. Fulstone, would give the Division of Health Care Financing and Policy (HCF&P) the flexibility to determine the amount of the Intergovernmental Transfer (IGT) amounts, and maximize the amount of federal money brought into the state.  She explained that would give discretion to the Division to maximize the funds and would not have to be addressed every biennium, as had previously been done.  According to Ms. Fulstone, only Clark and Washoe Counties would pay the IGT.  She referenced previous testimony by Mr. Alastuey that Clark County provided the bulk of the IGT and state matching funds would not be available without that payment, which was correct.  The IGT was paid by the Clark County taxpayers and was also immediately allocated to Clark County, almost like a simultaneous check exchange.  Ms. Fulstone stated it was really a mechanism to bring federal dollars into the state and should be utilized to its fullest.

 

Continuing her presentation, Ms. Fulstone stated that the proposed amendment would also address the distribution of DSH funds based on regional pools.  That concept was adopted from the interim study, which proposed that the pool concept be determined by percentages, which was not included in A.B. 297.  The bill contained language pertaining to absolute dollars, and Ms. Fulstone stated the proposed amendment, Exhibit C, actually addressed those same dollars in terms of percentages so that the dollars would not require readjustment every session.  If the total amount of DSH funds decreased, the percentages would remain the same and all participants would take a proportionately lesser amount based on the percentages.  Also discussed were the percentages regarding how DSH funds would be distributed to each of the hospitals within each of the pools, which were:  (1) Clark and Washoe Counties; (2) private rural hospitals; and (3) public rural hospitals.  According to Ms. Fulstone, the hospitals within each of those pools would be broken down by percentages and would receive the same amount of money as currently being received.

 

Ms. Fulstone noted that the proposed amendment addressed the Clark County pool, and proposed that in Clark County the DSH dollars, which were currently approximately $14 million net benefit, be distributed to those hospitals that had above average Medicaid utilization for the state, and which served a high number of Medicaid inpatients.  The number of Medicaid inpatient days was believed to be a better barometer of how the funds should be distributed in Clark County.  Ms. Fulstone noted that was based on the tremendous growth and also because the number was easily verified and reported to the HCF&P on a regular basis.

 

Assemblyman Goldwater stated that he and Assemblyman Parks represented the area of North Las Vegas where Sunrise Hospital was located, and he wanted to provide an incentive for the hospital to treat indigent patients.  He noted that the original allocation of DSH money had been difficult to determine, and asked why there were so many proposed amendments after the study had been completed.  Ms. Fulstone explained that the amendments had been proposed because the outcome of the study was based on the data received and, in reviewing the study, it was believed that the data was not complete.  One of the collateral recommendations of the study was to verify the data used in the study before actually applying the recommendations, which Ms. Fulstone believed had not been done and was part of the problem.  Mr. Goldwater asked whether the “study needed to be studied.”  Ms. Fulstone believed that the data used in the study was antiquated, was incomplete, and did not include the recent upper payment limit money that was awarded to the UMC in the amount of $20 million.  The study itself indicated that data would need to be verified, as there were four hospitals that might have provided incorrect data.

 

Assemblyman Marvel asked whether the proposed audit had been discussed with the Legislative Auditor, and who would pay the cost for the audit.  Ms. Fulstone explained that the proposed audit had not been discussed with the Legislative Auditor, but the proposal indicated that either the Legislative Auditor or an auditor approved by the Legislative Auditor could conduct the audit, and the contract would be paid by the hospital being audited. 

 

Ms. Fulstone noted that Exhibit C also contained a breakdown of the dollars that would be distributed under the amendment.  Ms. Fulstone believed that would be helpful, and advised the Committee that the third page of the document entitled, “SB 235 – Proposed Amendment, DSH/IGT Analysis, DSH Allocation to Pools & Allocation Within Pools,” depicted a comparison of existing law, S.B. 235, A.B. 297, and the proposed amendment.  She noted that the state’s net benefit and the rules would remain the same, with the difference occurring in Clark County.  Ms. Fulstone indicated that the UMC would still receive the lion’s share of the DSH funds in Clark County, with Lake Mead and Sunrise Hospitals actually receiving more under A.B. 297. 

 

Ms. Fulstone called the Committee’s attention to the document entitled, “Based on Nevada Legislative Study Committee on Health Care Report on Indigent Care Costs and Disproportionate Share” contained in Exhibit C, and explained that even though Sunrise Hospital did not agree that cost of care was a good measure of how the DSH funds should be distributed, using data from the study for cost of care indicated that Sunrise Hospital provided gross indigent care costs in the second highest amount in Clark County at over $26 million, with the UMC, by far the largest at $122 million, and Lake Mead Hospital at $12 million.  Ms. Fulstone opined that it would be extremely unfair for Sunrise Hospital, which was located in the same area as the other facilities serving indigent patients, to receive nothing in the way of a DSH benefit to promote care for those patients.  She emphasized that it was not correct to say that the Sunrise Hospital was last or had the lowest figures, and the aforementioned numbers were taken directly from the study.  Ms. Fulstone noted that the study actually proposed four different methods of reviewing gross indigent care costs, and in each one of the scenarios, Sunrise Hospital should, on a proportionate basis, receive between $1.9 million to $2.3 million of that $14 million in net benefit allocated to Clark County.

 

Ms. Fulstone stated the reason for the study’s conclusion was because it penalized Sunrise Hospital for being efficient.  The study divided the numbers by profit and arrived at a completely different number.  Ms. Fulstone said that a review of cost of care in the study would indicate that Sunrise Hospital was the second or third highest in providing the largest amount of indigent care.  Ms. Fulstone indicated that included people without insurance and without sources of payment who came to the UMC, Lake Mead, and Sunrise Hospitals, and also to other hospitals in the area that should ultimately participate in the DSH funds, and the proposed amendment would allow for such participation.  She explained that was the inequity and she asked for the Committee’s consideration regarding the proposed amendment.

 

Mr. Alastuey stated that the UMC would oppose the proposed amendment, as it would appear to reduce the UMC’s share by approximately $5 million annually.  He indicated it was not a situation where the data was in dispute, but rather was the complete parameter by which the amendment proposed to distribute DSH dollars.  Mr. Alastuey noted that the proposed amendment would distribute the dollars based on Medicaid patient days, whereas, the study recommended that DSH dollars be allocated based on net uncompensated care.  He reiterated that the UMC would oppose the proposed amendment (Exhibit C).  Mr. Alastuey referenced the comment had been made that DSH funds should be viewed as a way to ensure that there was an incentive that patients not be turned away, and he assured the Committee that patients were not turned away at the UMC.  The audit proposed by the amendment would be acceptable, as long as it audited the factors that actually drove the distribution.  However, the amendment proposed to audit cost-of-charge ratio, which had nothing to do with the distribution of dollars in the formula.  Mr. Alastuey emphasized that the UMC would heartily oppose the proposed amendment.

 

Ms. Fulstone indicated that the Sunrise Hospital would be open to compromise, and if Medicaid inpatient days constituted a point of strong objection, gross indigent care costs could be utilized, without penalizing the hospital for its profits, as a fair method of distributing the funds.

Chairman Arberry suggested that all parties meet to iron out their differences and advise the Committee regarding the final agreement.

 

Robin Keith, President, Nevada Rural Hospital Partners, recognized the fact that both the UMC and Sunrise Hospital had taken pains to protect the integrity of the rural hospitals in the DSH distribution process.  Ms. Keith advised the Committee that the Nevada Rural Hospital Partners were officially neutral in terms of how the DSH funds were divided in Clark County, and all versions of the Disproportionate Share Hospital (DSH) program bills contained the requirements for rural hospitals.

 

Janice Pine, representing St. Mary’s Network, addressed the proposed amendment and stated if the Committee decided to move A.B. 297 forward, she would request a change to the amendment proposed by Sunrise Hospital (Exhibit C).  The change would be requested to subsection 7, which referenced new hospitals becoming eligible for DSH distribution, but did not contain language pertinent to existing hospitals reaching eligibility under the formula for DSH payments.  Ms. Pine suggested that subsection 7(a) of the amendment should include existing hospitals as well.  She stated she had presented a written amendment to the Senate and would provide that information to the Assembly Committee on Ways and Means, should it decide to process the amendment.

 

Chairman Arberry asked whether there was any further testimony regarding A.B. 297, and hearing none, declared the hearing closed.  The Chair opened the hearing on A.B. 533.

 

Assembly Bill 533 (1st Reprint):  Makes various changes to provisions governing the recordation and taxation of property. (BDR 32-122)

 

Mark Schofield, Clark County Assessor, introduced Jeff Johnson, President, Assessors Association of Nevada, and Dave Dawley, Carson City Assessor, and thanked the Committee for the opportunity to present testimony. 

 

Mr. Schofield explained that A.B. 533 was the assessor’s omnibus bill that had taken approximately one and one-half years to finalize.  During that process, all parties that had concerns relative to the language of the bill had been included in discussions.  The language of the bill had been reviewed by the Assembly Committee on Taxation on April 3, 2003, and was passed out of the Committee on Taxation on April 8, 2003, with several amendments.  Mr. Schofield noted that A.B. 533 was a rather lengthy bill and included 67 sections; most of those sections dealt with clarification of statutory language that would provide brighter lines within the laws that governed the assessors. 

 

Mr. Schofield indicated that he would address an amendment, Exhibit D, relative to a rather controversial subject contained in Section 16 of A.B. 533, which was the issue of intangibles.  He assured the Committee that Section 16 of the bill was tax neutral, and the language would simply provide clarification of the term “full cash value,” which was simply a term that had been placed into the statute in 1981 and basically defined market value.  Mr. Schofield explained that full cash value was not the method of assessment currently employed within the 17 counties, however, it was the chief litmus test to ensure that the taxable value placed on property did not exceed full cash value, which represented the market value.  That language was included in Section 16 as it was germane since Nevada Revised Statutes (NRS) 361.228 identified intangibles, the exemption of intangibles, and what items were not intangible. 

 

According to Mr. Schofield, when market value was determined, particularly with income-producing properties, intangibles would be contained within the market value, such as, trade name, stock, customer base, and so forth.  The only reason the language had been added was to address a loophole, which would allow further reduction of property values by further reducing market value by intangible value, since the law exempted intangibles.  Mr. Schofield explained that full cash value had nothing to do with the assessment process in the state of Nevada, other than as a litmus test in the appeal process.  Per Mr. Schofield, it had been determined that one reason an assessment would be appealed was that the taxable value the assessor or the Department of Taxation had placed on the property exceeded full cash value or market value, which included intangibles. 

 

The proposed amendment, stated Mr. Schofield, would simply provide clarification and would be a bright line embedded in statute to provide further guidance and relief regarding a very confusing issue to the counties and the state boards of equalization but, more importantly, upon judicial review would provide clear guidance regarding full cash value.  According to Mr. Schofield, several utilities and businesses exempted from the assessment of intangibles, which only occurred in properties that were centrally assessed, could not understand the concept that it was clean-up language.  In some cases, it was believed that the intent was to assess intangibles, and Mr. Schofield assured the Committee that was not the intent.  Mr. Schofield indicated that he had advised the concerned entities that if their fears could not be allayed prior to the hearing, he would recommend that Section 16 be removed from the bill.

 

Chairman Arberry asked what effect the amendment would have on the bill.  Mr. Schofield stated the proposed amendment would virtually have no effect on the bill because the necessary language was already included, and if the language were to remain in the bill, it would eliminate confusion and provide guidance.  With respect for those who believed there might be some abuse of the language to interpret the meaning to be that intangibles would be assessed, it was respectfully recommended that Section 16 be amended out of the bill.

 

Assemblywoman Giunchigliani stated she did not have a problem with the language in Section 16 of A.B. 533, and appreciated Mr. Schofield’s effort to compromise with entities that otherwise would not want the bill to move forward.  Ms. Giunchigliani believed the bill was necessary and it was unfortunate that after unanimous passage of the bill by the Assembly Committee on Taxation, that such “end games” would begin.  She informed Mr. Schofield that she could understand his commitment, however, she would request that the Floor statement represent the interpretation and legislative intent of the bill, so it would be very clear for the record.

 

Mr. Schofield disclosed that there were several individuals present at the hearing who wished to oppose various sections of A.B. 533, based on technical adjustments.  He had attempted to dissuade those persons, and had explained that any problems experienced in administering the language of the bill could be addressed during the 2005 session.  Mr. Schofield noted that given the short time frame remaining in the 2003 session, the bill could be placed in a further precarious position should those persons voice their objections at hearings conducted by the Senate Committee on Taxation.  He stated that serious concerns had been voiced regarding an amendment placed on the bill by Assemblyman David Parks, Chairman of the Assembly Committee on Taxation.  Mr. Schofield explained that Legislative Counsel Bureau (LCB) staff had asked him to keep the testimony on A.B. 533 brief and germane to the purpose of the Committee on Ways and Means, which was to deal with fiscal issues. 

Assemblyman Parks stated that he had questions surrounding the issue of the veterans’ exemption, which was addressed in at least four different sections of A.B. 533.  The reason the bill was being considered by the Committee on Ways and Means was because of the fiscal impact created by the veterans’ exemption; he advised the Committee that he would hold his question at the present time.

 

Assemblywoman McClain referenced Section 22 of the bill, and stated she had heard some concerns regarding that section and asked for clarification.  Mr. Schofield explained that current statute stipulated that if a taxpayer did not allow the assessor’s office entry or provide requested information, assessors were quasi-law enforcement and had subpoena power; assessors could actually subpoena information from taxpayers.  Mr. Schofield commented that statute also stated if a taxpayer did not cooperate and the assessor was forced to estimate the value of the property, the taxpayer lost the remedy of appeal based on that lack of cooperation.  The language in Section 22 of A.B. 533 was simply a clarification of that stipulation, and further clarified that a taxpayer had to cooperate during the assessment process.  If a taxpayer did not cooperate or provide clear and satisfactory evidence, explained Mr. Schofield, that taxpayer would lose the right to appeal. 

 

Ms. McClain noted that the language did not address an added stipulation, and Mr. Schofield stated it was a further refinement of the current language in statute, however, he believed that persons who opposed the language in Section 22 might have a different viewpoint.  Mr. Schofield advised the Committee that the Nevada Assessors Association had tacitly agreed to remove the clarification issues from A.B. 533, since the language seemed to have created so much dissention because of the misinterpretation of the intent.  He assured the Committee that there was nothing in the bill that would adversely impact any taxpayer.  Additionally, there was nothing in the bill that would create an additional property tax for taxpayers.

 

Mr. Schofield noted there were three issues that would create a fiscal impact, albeit a negligible fiscal impact, to the state, the first of which was the surviving spouse exemption.  Section 4 of the bill addressed that issue, and the language would allow an increase in that exemption based on the Consumer Price Index (CPI).  A law was passed during the 2001 Session of the Legislature, which added the increase to the veterans’ exemption beginning in 2005.  According to Mr. Schofield, A.B. 533 would allow surviving spouses, who currently enjoyed the exemption, to also enjoy the increase based on the CPI beginning in 2005, which would create a very negligible fiscal impact. 

 

Mr. Schofield indicated that for ten years, an attempt had been made to allow widowers to enjoy the same exemption as widows.  He stated the inequity had been changed during the 2001 session, however, there had been significant concern regarding the fiscal impact.  Since that legislation had passed, there had only been 207 widowers apply for the exemption in Clark County. 

 

Dave Dawley, Carson City Assessor, informed the Committee that for the smaller counties, a total of 47 widowers had signed up for the exemption.

 

Continuing, Mr. Schofield stated the second issue would provide for an increase in the collection fee charged by assessors for the assessment of personal property.  The increase would be dedicated to the enhancement of technology in the assessor’s office, as well as other nexus offices that touched the assessor’s office.  That increase was very similar to legislation passed by the 2001 Legislature that allowed recorders to increase recording fees by $3.  Mr. Schofield noted that $3 was placed in an accumulative account and rolled over every year; the funds could only be used by the recorders.  Mr. Schofield explained that the assessors had attempted to join the recorders in the proposed legislation in the latter hours of the 2001 session, however, were asked not to tamper with the legislation for fear it would not pass.  The assessors had also attempted to persuade the recorders to allow assessors to share in that fee increase, however, the recorders believed that would not be in their best interest. 

 

Mr. Schofield stated there was also a bill currently under consideration that would provide the same type of increase for county clerks.  A.B. 533 would allow the assessors to share funds with the nexus departments, for example, the treasurer, public works if necessary, and those departments within the county that directly touched the assessor’s office.  Mr. Schofield indicated that A.B. 533 would not allow those funds to roll over, and any funding that was not utilized would revert back to the county general fund every year. 

 

Mr. Schofield explained that the third issue surrounded the exemption for veterans, and the last veterans who had been allowed to enjoy that exemption were the Gulf War veterans.  Assessors had always contended that there was another group of veterans referred to as the “notch” veterans, who did not enjoy the exemption yet had placed their lives on the line in the demilitarized zone in Korea between the years 1955 and 1961.  The language of A.B. 533 would not only capture those veterans, but would capture all veterans who served in any conflict after the Gulf War, such as Afghanistan, Somalia, through and including the Iraq war.  According to Mr. Schofield, there appeared to be a significant appetite not only to provide an exemption for veterans who had been involved in the most recent Iraq conflict, but also for veterans who served in other conflicts. 

 

The fiscal impacts were negligible, explained Mr. Schofield, and it did not appear that the number of veterans signing up for the exemption had increased dramatically each year.  For example, in 2002 there were 43,380 veterans signed up for the exemption in Clark County, which had a population that hovered around 1.8 million people.  Mr. Schofield believed there was in excess of 180,000 veterans that were currently eligible for the exemption; of the 43,380 currently signed up, only 35,348 used the exemption.  It was apparent that all veterans who signed up had not utilized the exemption, and less than one-quarter of all eligible veterans utilized the exemption.  According to Mr. Schofield, allowing the veterans to take advantage of the exemption would create a negligible fiscal impact for the state, and also for local governments. 

 

Mr. Schofield informed the Committee that the calculation regarding the impact on the state for the aforementioned fee increase was approximately $88,915. 

 

Mr. Dawley stated, for the record, when the Legislature passed the veterans’ exemption for Desert Storm, a total of 166 veterans had signed up.  From 2001 to 2002 the number of veterans signed up for the exemption was 155, which meant there were less veterans claiming the exemption even with the addition of the Desert Storm veterans.

 

Mr. Schofield noted that Clark County had an additional 2,993 veterans signed up from the Desert Storm conflict.

 

Robert Ostrovsky, representing the Nevada Resort Association, remarked that the Association had some concerns regarding certain sections of A.B. 533, however, after reviewing the proposed amendments, that opposition would be withdrawn.  According to Mr. Ostrovsky, there had been a serious disagreement regarding the operative intent of the bill and the substantive meaning of language in a number of sections, which had been addressed by the amendment.  Mr. Ostrovsky stated the Association had only one concern, Section 19, which was a public policy issue that should be reviewed by the Legislature as a whole.  That section would eliminate the newspaper publication of the annual records and utilize an Internet publication, which Mr. Ostrovsky believed should be reviewed by the Legislature.  Mr. Ostrovsky reiterated that the Association was supportive of the bill. 

 

Kent Lauer, representing the Nevada Press Association, proposed an amendment to Section 19 of A.B. 533.  The amendment, Exhibit E, would preserve the newspaper publication of the property tax assessment role, rather than allowing the posting of the list on a Web site.  Mr. Lauer indicated that publication was popular at the present time among newspaper readers, and newspapers oftentimes printed extra copies of the list to meet the demand. 

 

Mr. Lauer said he would argue that the Internet was not a valid substitute for publishing the list for several reasons.  One reason was that the Internet remained inaccessible to a large number of residents, and was a “pull” medium where users had to “pull” the content they wanted from the Internet.  Mr. Lauer noted that the Internet was good for persons with an extremely high incentive to seek out specific information.  On the other hand, newspapers were a “push” medium, and thrust the information “under people’s noses” in a convenient way.  Few people would be motivated to seek out assessment records on the Internet, but they would be inclined to read them over breakfast, when they noticed them in the local newspaper.  Mr. Lauer indicated that the day might come when Interstate access was nearly universal, but until that day, government had a responsibility to ensure that information was fairly and equitably distributed.  Information was power, and to limit information was to disempower certain groups, which Mr. Lauer believed was not something that should be done for the purpose of saving money. 

 

Assemblyman Parks stated, for the record, that he had offered the amendment to the bill regarding the Internet access and, while he certainly conceded Mr. Lauer’s perspective and point of view, the amendment to A.B. 533 had been proposed and approved by the Assembly Committee on Taxation in an effort to “make the best of all worlds.”  Mr. Parks stated that numerous individuals had asked why a “forest” was being destroyed for a document that went straight from a person’s driveway to the recycle bin.  The amendment would require that the information be posted in all public libraries and placed on the Internet, which was an alternative to spending up to $400,000 of taxpayer dollars in Clark County alone, which could easily be saved by virtue of not having to produce something that was roughly the size of two Sunday newspaper issues.  Mr. Parks emphasized that he certainly appreciated Mr. Lauer’s concerns, but the Legislature was looking for ways to save taxpayer dollars, and he believed use of the Internet would be a good example.

 

Assemblyman Goldwater asked Mr. Lauer to estimate what the state’s largest newspaper would make off the government provision of publishing the property tax listing.  Mr. Lauer stated he did not know, however, would provide that information.

 

Paul Bancroft informed the Committee he was an attorney who practiced primarily in the area of state and local tax, and appeared regularly in front of the county and state boards of equalization.  Mr. Bancroft indicated that he worked regularly with Mr. Schofield and his staff in the Clark County Assessor’s Office, and had the utmost respect for the work being done by Mr. Schofield and his staff.  However, Mr. Bancroft stated he would disagree with Mr. Schofield regarding several significant provisions in A.B. 533, and would express those concerns on behalf of The Howard Hughes Corporation and the Idaho Power Company. 

 

Mr. Bancroft provided the document entitled, “Proposed Amendments to AB 533, First Reprint” to the Committee, Exhibit F, and explained that the first proposed amendment would delete Section 16, which had also been addressed by Mr. Schofield, Exhibit D, and he urged the Committee to adopt that proposed amendment. 

 

According to Mr. Bancroft, the second proposed amendment would alter language in Section 15, lines 8 through 13, regarding “fee simple” ownership, which was a technical term and referred to an estate in property that was not subject to any conditions.  He noted that true fee simple interest seldom existed at the present time, and virtually all properties were subject to public restrictions, such as zoning, and private restrictions, such as easements.  Mr. Bancroft testified that such restrictions should be taken into account when valuing properties, but by using the term “fee simple,” A.B. 533 would require the person valuing the property to assume a hypothetical estate, free of restrictions.  He presumed that the sponsor of the bill had not intended such a result, but a court, applying normal rules of statutory construction, would give the technical term its technical meaning.  To avoid unnecessary and unintended ramifications, Mr. Bancroft stated that the proposed amendment would retain the language currently in statute, which would read, “The value of any property must not exceed its full cash value.” 

 

The third proposed amendment, explained Mr. Bancroft, would delete the language printed in bold print in Section 22, lines 21 through 29, which should be deleted for several reasons:

 

1. Under current statutes, county boards heard evidence presented by both parties, judged the creditability of the evidence, and gave it the weight deemed appropriate by the board.  Decisions were rendered based upon a preponderance of the evidence.  Upon judicial review, a court could not substitute its judgment for that of the board as to the weight given the evidence, and could only set aside the determination if the board’s decision was not supported by clear and convincing evidence.  A.B. 533 would apply the appellant standard to the determination of the county board, ignoring the different functions of initial fact-finding and judicial review.
2. The language printed in bold print required that the appellant show the evidence to support the reduction, which was inconsistent with the board’s general authority to equalize values.  County boards on occasion did equalize values, even though an appellant taxpayer had not filed an appeal and had not presented any evidence.  It could be argued that the language in bold print would prevent the board from exercising that equalization from equalizing property in that situation. 

 

Mr. Bancroft stated for the foregoing reasons, an amendment had been proposed that would delete the language printed in bold print in Section 22.

 

The amendment, Exhibit F, also proposed amending Section 22, lines 21 through 29, which identified four situations where the county board would be excluded from hearing a taxpayer’s appeal.  Mr. Bancroft stated that was an important procedural due process right.  Taxpayers had only one remedy regarding property tax, which was to approach the county board.

 

Chairman Arberry explained that the Assembly Committee on Ways and Means dealt only with the fiscal aspect of bills, and the proposed amendments should be presented at the time A.B. 533 was considered by the Senate Committee on Taxation.  Chairman Arberry requested that Mr. Bancroft hold further testimony regarding the proposed amendments until that time.  Mr. Bancroft apologized, and indicated he was under the impression that at times the Committee would entertain amendments.  Chairman Arberry stated that was true, however, not to the extent of the amendment introduced by Mr. Bancroft.  Out of respect to the Chairman of the Assembly Committee on Taxation, the amendments should have been presented when the bill was being considered by that Committee.  Such extensive amendments should have been addressed by that Committee, and Chairman Arberry reiterated that he would not allow presentation of the proposed amendments to the Committee on Ways and Means.

 

Assemblyman Parks asked Mr. Bancroft whether the Nevada Assessors Association had been provided copies of the proposed amendments, Exhibit F.  Mr. Bancroft indicated that he had discussed the amendments with the Association. 

 

Chairman Arberry asked whether there were further questions for Mr. Bancroft or anyone else who wished to present testimony regarding A.B. 533.

 

Samuel McMullen, representing the Las Vegas Chamber of Commerce, stated that the amendments offered by the assessors were very positive and helped alleviate a number of concerns.  The Chamber of Commerce would support the deletion of Section 16.

 

Charles (Chuck) Fulkerson, Director, Office of Veterans’ Services, indicated that at the first hearing for A.B. 533 before the Committee on Taxation, an amendment had been offered regarding monies donated by veterans through the tax exemption process, which had been utilized within the Veterans Nursing Home operating budget for overhead for the home.  Mr. Fulkerson indicated the amendment, Exhibit G, would allow the tax exempt money donated by veterans to be deposited into the Nursing Home Gift account, which could be used by the administrator for discretionary purchases that were not provided for in the operating budget.  The amendment would also delete the wartime service periods for veterans to apply for tax exemption, as depicted by Section 7 of the bill.  Mr. Fulkerson stated that since 1946, there had not been a day gone by that a member of the Armed Forces had not been subjected to the possibility of a conflict.  The few examples of that were:

 

• 1920s:  U.S. Army troops guarding trains in Russia
• 1930s:  U.S. Marine Corps involved in Central America
• 1946-1950:  U.S. Army advisors to Republic of Korea armed forces
• 1946-1989: U.S. Army patrolling the Iron Curtain; U.S. Air Force patrolling air lanes to Berlin in Europe, and U.S. Navy facing off ships and submarines on a global basis
• 1953 to present: U.S. Army troops on the Korean Demilitarized Zone
• 1980s: U.S. Armed Forces in Panama and Grenada

 

Chairman Arberry appreciated the statistics, and he advised that the Committee had ultimate respect for veterans, however, the Committee on Ways and Means dealt only with the fiscal issues of bills.

 

Mr. Fulkerson explained that there would be no fiscal impact on the first proposal regarding the donations being transferred from the operating account to the gift account, as that was donated money from veterans.  Regarding the second amendment, which dealt with deletion of the wartime service periods, Mr. Fulkerson explained that the U.S. Department of Veterans Affairs estimated that 93 percent of the veterans were wartime veterans, and the proposed action would add approximately 7 percent to the total number of veterans in the state.

 

Assemblyman Parks noted that when amendments had been presented to the Assembly Committee on Taxation, there appeared to be overlap and duplication, however, he believed that the intent of the members of the Taxation Committee had been to approve the proposed amendments as recommended by Mr. Fulkerson in Exhibit G.  Mr. Parks explained that if a person had served a minimum of 90 consecutive days on active duty, none of which was for training purposes, and had received an honorable discharge, that person would be qualified according to the four sections of A.B. 533 which included the appropriate provisions.  Mr. Parks noted that the fiscal note contemplated the worst case scenario and the greatest potential costs, and his recommendation would be to amend Sections 7, 8, 41, and 42, where those particular dates had been inserted in the bill.

 

Assemblywoman Chowning concurred with the amendments, and disclosed that there was a possibility that her husband would be affected by the amendment, and that her daughter was a veteran of Desert Storm and might also be affected.

 

David Smith, representing Sentinel Advisors, stated there were various aspects of the bill that Sentinel Advisors would not support, however, those aspects did not relate to the fiscal impact of the bill, and he would reserve his comments for an alternative forum.  Mr. Smith thanked the Assessors Association for proposing to amend the language in Section 16, Exhibit D, and urged the Committee to adopt the proposed amendment.

 

Chairman Arberry asked whether there was further testimony or questions forthcoming regarding A.B. 533, and hearing none, declared the hearing closed.

 

The Chair opened the hearing on S.B. 247.

 

Senate Bill 247 (1st Reprint):  Makes appropriations to restore balances in Stale Claims Account, Emergency Account and Reserve for Statutory Contingency Account. (BDR S-1236)

 

Andrew Clinger, Deputy Administrator, Budget Division, explained that the purpose of S.B. 247 was to restore the balances in the Stale Claims account, the Emergency account, and the Reserve for Statutory Contingency account.  The bill would appropriate $2.5 million to the Stale Claims account; $215,593 to the Emergency account; and, $3 million to the Statutory Contingency account.  Mr. Clinger advised that those appropriations were all included in The Executive Budget. 

 

Chairman Arberry asked whether there were further questions or testimony regarding S.B. 247, and hearing none, declared the hearing closed.  The Chair opened the hearing on S.B. 413.

Senate Bill 413 (1st Reprint):  Makes various changes concerning securities issued by the University and Community College System of Nevada. (BDR 34-1034)

 

Dr. Jane Nichols, Chancellor, System Administration Office, University and Community College System of Nevada (UCCSN), explained that S.B. 413 had been requested by the Board of Regents, and was a fairly routine occurrence each legislative session, when the cap was set on the authorized principal amount of revenue bonds that the Board of Regents could issue for facilities at the UCCSN campuses.  Dr. Nichols stated the bill reflected the anticipated capital projects over the next biennium at the University of Nevada, Las Vegas (UNLV), and the University of Nevada, Reno (UNR), and reflected the growth of enrollment and the residential nature of those campuses.  Dr. Nichols asked Daniel Miles, Vice Chancellor, Finance and Administration, UCCSN, to address the Committee regarding the particulars of the bill.

 

Mr. Miles explained that the bill addressed revenue bonds sold by the universities.  In order to sell those bonds, the universities had to pledge revenues for redemption of the debts.  According to Mr. Miles, the UCCSN was attempting to expand the revenues that could be pledged to include lease revenues in instances where a campus could lease space to an outside entity or the federal government, which could be used as a pledge revenue source for redemption of the bonds.  Mr. Miles opined that it was always advantageous to make the amount of pledge revenues as high as possible because that made the bonds more attractive to purchasers.

 

According to Mr. Miles, changes were recommended in Section 2, lines 23 and 24, of the bill to change “Desert Research Institute” to reflect the entire UCCSN, so that it would become available as a pledge revenue source for UNR and UNLV.  Mr. Miles stated that item C on lines 29 and 30 were added, which reflected the operation of any, “buildings, structures, or other facilities of the university or board.”  Section 2(5) was recommended for elimination, which Mr. Miles stated was a provision in the pledge revenue language that did not allow for those types of revenues to be pledged.  Mr. Miles indicated that the main portion of the bill, Section 3, would increase the amount of allowable bonds that might be issued at each of the campuses. 

 

Mr. Miles called the Committee’s attention to Exhibit H, entitled, “UNR/UNLV Project Future Revenue Bonds, 03/03/2003,” which depicted how the amounts were determined.  For UNR, $110.5 million had been authorized, and Mr. Miles stated that several projects were being contemplated, such as $22 million for the UNR Library, which had been approved during the 2001 Legislature.  The UNR was presently going forward with a parking garage, which was related to the Library project.  Mr. Miles explained the UNR was also attempting to plan a building for the Cooperative Extension, and eventually a new Student Union facility for students on the UNR campus.  Mr. Miles explained that the UCCSN had asked campuses to look at least three years ahead, so that limits could be set and any projects that came forward before the Legislature met again could be accommodated.  The total for UNR was $109.2 million, and Mr. Miles explained that the University currently had $43.9 million available under the current limitation, so an additional $66 million would be added to that amount, which resulted in the request for $176 million. 

 

Likewise, stated Mr. Miles, at UNLV, a new dormitory building was under consideration, and both the parking facility at UNR and the dormitory at UNLV had been authorized by the Board of Regents, with ground broken on both of those for construction to begin by August 2003.  Mr. Miles indicated that UNLV also had a significant Student Union project planned, and in the Governor’s recommended Capital Improvement Program (CIP), up to $25 million in revenue bonds might be required for the Science and Engineering Building.  Mr. Miles explained that the Science and Engineering Building was a $75 million project where UNLV had offered to provide $25 million for the project.  The University was seeking donations, but would also need the authority to raise $25 million in bonds.  Mr. Miles stated the total needed for the UNLV was $130 million, with a current balance of $37.8 million, so an additional $92 million would be necessary. 

 

Assemblyman Marvel asked how much funding would be via revenue bonds.  Mr. Miles explained that funding would be totally revenue bonds, backed primarily by revenues available to the two Universities, for example, student fee revenues that could be dedicated to CIP projects and net earnings on the dormitories and dining commons, which were all pledged.  Mr. Miles indicated if S.B. 413 were passed, any net income from leases to outside agencies could also be pledged.

 

Chairman Arberry asked whether there was further testimony forthcoming regarding S.B. 413, and hearing none, declared the hearing closed.  The Chair opened the hearing on S.B. 415.

 

Senate Bill 415 (1st Reprint):  Removes certain restrictions on use of money in Estate Tax Account in Endowment Fund of University and Community College System of Nevada. (BDR 32-1264)

 

Dr. Jane Nichols, Chancellor, System Administration Office, University and Community College System of Nevada (UCCSN), explained that S.B. 415 was supported by the Governor and had come about as part of The Executive Budget recommendations.  The bill would make changes in the estate tax, and passage of the bill, along with a proposed amendment, was essential to support the UCCSN budget recommended by the Committee.  Dr. Nichols stated that Mr. Miles would address the details of the bill.

 

Daniel Miles, Vice Chancellor, Finance and Administration, UCCSN, explained that when the estate tax was initially established and approved by the voters in 1986, and became law in 1987, the money earned from that tax for the UCCSN was set aside in an endowment; UCCSN was allowed to spend $2.5 million per year until that endowment was sufficient to produce $2.5 million per year.  Once that took place, explained Mr. Miles, the expenditures were allowed to grow over time as the endowment grew.  For the past two biennia, and for the upcoming biennium, there would be significant funds expended from that endowment.

 

Mr. Miles stated that S.B. 415 would eliminate the provision that only $2.5 million could be expended from the fund if there were insufficient funds in the account to produce $2.5 million in earnings.  The UCCSN expected that situation to arise during the upcoming biennium because The Executive Budget, and the budget that had been approved by the money committees, basically would expend the amount of money in the endowment account to zero.  Mr. Miles explained that the provisions of the bill were absolutely necessary in order to circumvent the current limitation in statute.  According to Mr. Miles, the bill would maintain the authority of the Legislature and the Interim Finance Committee (IFC), and would allow the Board of Regents to only expend those funds as provided by legislative or IFC authorization. 

 

The amendment alluded to by Dr. Nichols was a mechanical amendment.  Mr. Miles reported that in closure of the budgets for the UCCSN, the money committees had agreed to a proposal that over the next two years, the UCCSN would transfer an equivalent amount of estate tax funds to the state General Fund and, in return, those expenses and programs funded by estate tax would be appropriated from the General Fund.  Mr. Miles noted there was a total of $89.2 million programmed for transfer from the estate tax to the General Fund over the upcoming two years, and that action would guarantee the programs and shifted the risk to the General Fund, should a shortfall occur.  Mr. Miles commented that there were several projections regarding a possible shortfall.  According to Mr. Miles, that amendment would need to be added to S.B. 415.

 

Assemblywoman Giunchigliani asked how much was left in the estate tax endowment account for the UCCSN.  Mr. Miles remarked that by the end of the current fiscal year on June 30, 2003, the UCCSN anticipated that the account would be approximately $65 million, but there was still income being added to the endowment fund, plus funds were realized from investment income.  Mr. Miles stated that, hopefully, if the stock market and other investments continued to rise, the fair market value of the endowment would also improve.  Ms. Giunchigliani asked whether the amounts previously allocated to the UCCSN budgets from the endowment fund consisted of the interest, which was depleted.  Mr. Miles replied that the proposal in The Executive Budget was to expend the principal and the interest, and after the upcoming biennium, there would be no estate tax funds remaining.  Ms. Giunchigliani noted that would create a “hole” in the budget which would have to be reviewed during the 2005 session. 

 

Ms. Giunchigliani asked about the Women’s Leadership Program that would be hosted by the UCCSN, and asked whether that program could apply for funding from the Estate Tax Fund.  Mr. Miles reiterated that the funds would be exhausted, and legislative approval would be necessary in order for that program to gain support.  Ms. Giunchigliani asked why the bill was necessary if the funding was going to be exhausted.  Mr. Miles explained that current statutory language would prohibit the UCCSN from spending those funds, and the bill would simply free up the funds.  He reiterated that the funding would cease, however, even after the end of the 2003-05 biennium, some estate tax revenue would “dribble” in. 

 

Chairman Arberry asked whether there was further testimony or questions regarding S.B. 415, and hearing none, declared the hearing closed.  The Chair opened the hearing on S.B. 416.

 

Senate Bill 416:  Authorizes issuance of bonds and other securities for completion of Fish Hatchery Refurbishment Project. (BDR S-1212)

 

Gene Weller, Deputy Administrator, Division of Wildlife, explained that the Division maintained four fish hatchery facilities throughout the state, primarily used to raise trout and meet the recreational demand of Nevada’s recreational public.  Two years ago, stated Mr. Weller, the Division approached the Legislature with a project to refurbish those hatcheries, since they were in various stages of disrepair.  Mr. Weller explained at that time the Division believed it could create a project to rebuild the hatcheries and maintain them in good operating condition.  The 2001 Legislature authorized an increase in the cost of the trout stamp to help the Division fund the project, and also authorized the issuance of approximately $3 million in General Obligation Bonds to aid the Division in paying for the project.

 

Mr. Weller informed the Committee that, to date, the Division had been working very diligently on the design and architecture of the pending project, and had completed approximately $1 million in work in that arena, as well as developing preliminary work on the hatcheries themselves, such as electrical panels, in order to get ready for the project.  Mr. Weller stated the Division would request approval of S.B. 416, which would allow the authorization of an additional $14 million in General Obligation Bonds and other securities that would allow the Division to pay for and complete the project in the future. 

 

Assemblyman Marvel asked about water levels, and the situation at Wild Horse Reservoir.  Mr. Weller explained that the water level at Wild Horse Reservoir was way down, and the Division anticipated that the level would go down even further in the future.  Mr. Marvel noted that the level would be down in almost all of the reservoirs.  Mr. Weller concurred and noted that there had been some recent snow that would help the water levels somewhat. 

 

Chairman Arberry asked whether there were further questions or testimony forthcoming regarding S.B. 416, and hearing none, declared the hearing closed.  The Chair opened the hearing on S.B. 446.

 

Senate Bill 446:  Authorizes State Treasurer to appoint and employ two Senior Deputies in unclassified service of State. (BDR 18-301)

 

Brian Krolicki, State Treasurer, Office of the State Treasurer, explained that the provisions of S.B. 446 had already been discussed during budget hearings, and essentially the bill would reclassify two employees in the Treasurer’s Office to unclassified service.  Mr. Krolicki noted that the bill had been referred from the Committee on Government Affairs, to ensure that the Committee on Ways and Means had the opportunity to review the proposal.  Mr. Krolicki reiterated that the reclassification of the positions had been discussed by the Committee during past budget hearings.  In context, explained Mr. Krolicki, within the combined Treasurer’s Office budgets, approximately five positions had been eliminated in creation of the two unclassified positions. 

 

Chairman Arberry noted that the reclassification was in the budget, and he asked whether there were further questions from the Committee, or further testimony regarding S.B. 446.  Hearing none, the Chair closed the hearing and declared the Committee in recess.

 

The Chair called the meeting back to order at 10:13 a.m., and announced that the Committee would commence with budget closings.

 

BUDGET CLOSINGS

 

Assemblyman Morse Arberry Jr., Chairman of the Joint Subcommittee on Higher Education and Capital Improvements, read the following closing report for the Division of Buildings and Grounds and the State Public Works Board:

 

THE JOINT SUBCOMMITTEE ON HIGHER EDUCATION AND CAPITAL IMPROVEMENTS HAS COMPLETED ITS REVIEW OF THE BUDGET ACCOUNTS FOR THE DIVISION OF BUILDINGS AND GROUNDS AND THE STATE PUBLIC WORKS BOARD.  The following is a discussion of the major actions taken by the Subcommittee with respect to theseaccounts.

 

Buildings and Grounds (B/A 710-1349) ADMIN-59

The Subcommittee concurred with the Governor’s recommendation to increase the monthly rental rates for state‑owned buildings to approximately $1.14 square foot in FY 2004 and $1.15 per square foot in FY 2005.  The Subcommittee also approved the Governor’s recommendation to use only one rental rate regardless of the security provided for the buildings.  The rental rate increase was necessitated in large part by increased costs for contract maintenance services and utility costs during the 2001-03 biennium.  Because of the expenditure increases in those areas, many of the building maintenance and renovation projects approved by the 2001 Legislature were deferred until the 2003-05 biennium, which has also contributed to the rate increase. 

 

The Subcommittee created a new category of expenditures that includes all expenditures directly related to the maintenance of buildings and grounds of state facilities.  The new category will better enable the division to track the costs that are directly attributable to maintaining state facilities that are the responsibility of the division.

 

The Subcommittee concurred in the Governor’s recommendation to provide approximately  $1.4 million in FY 2004 and approximately $1.6 million in FY 2005 for building maintenance and renovation projects.  A list of the projects recommended for the 2003-05 biennium is includED on page 9 of the closing packet. 

 

CLEAR CREEK YOUTH CENTER (B/A 101-1353) ADMIN-73

The Division of Buildings and Grounds indicated during subcommittee hearings that the division was in negotiations with the Future Farmers of America organization to allow the FFA to take over the operations and maintenance of the facility.  The division later indicated that it had been directed by the Governor to begin the process of putting the property up for sale.  Because members of the SUBcommittee determined that the property was of significant value to the state, the Subcommittee voted to approve the Governor’s recommended budget for the facility and to issue a Letter of Intent indicating the Subcommittee’s support for not selling the facility.  The Subcommittee directed the Division of Buildings and Grounds to provide Fiscal Analysis Division staff with their recommendations for funding to complete repairs and maintenance projects at the facility within a week after the closing.  The additional requests for repairs and maintenancewill be considered by the CIP Joint Subcommittee when it closes the 2003 CIP Program. 

 

MARLETTE LAKE (BA 712-1366) ADMIN-77

The Subcommittee voted to close the budget for the Marlette Lake Water System as recommended by the governor.  The only enhancement to the budget included $17,000 for two new snowmobiles for the division’s use in maintaining the system and properly regulating water flow.

 

PUBLIC WORKS BOARD OVERVIEW

In the State Public Works Board accounts, the Subcommittee approved the transfer of an Administrative Assistant IV position frOm the Inspection account (B/A 1562) to the Administration account (B/A 1560).  The Subcommittee also approved the Governor’s recommendation to transfer two Administrative Assistant III positions from the Administration account to the Inspection account.  The information provided by the board regarding the workload of the positions indicated that the transfers were justified.

 

PUBLIC WORKS ADMINISTRATION (101-1560) ADMIN-81

The Subcommittee voted to continue the Facility Condition Analysis Program in the base budget and approved a Letter of Intent directing the manager of the board to continue developing performance indicators for the program and to ensure that those performance measures are included in the board’s budget request for the 2005-07 biennium.  During the 2001 Legislative Session the Subcommittee had considered the elimination of the facility audit program, but voted to provide continued funding in the base budget for the program and require the manager to establish a worthwhile and effective program.

 

The Subcommittee did not approve THE Governor’s recommendation to provide $1,719 in each year of the 2003-05 biennium for the Manager and Deputy Manager to obtain the continuing education credits necessary to maintain their licenses as professional engineers. 

 

Public Works Inspection (BA 101-1562) ADMIN-87

The Subcommittee approved the Governor’s recommendation to reduce management and inspection fees by $85,000 each fiscal year and to replace those revenues with revenues received from the Division of Buildings and Grounds for performing ADA compliance inspections for buildings leased by state agencies and revenues received from CIP projects for in-house design services.  However, the Subcommittee did not approve the Governor’s recommendation to reduce management and inspection fees by $163,300 each fiscal year and to replace those revenues with revenues received from increased plan review fees.

 

The Subcommittee approved the Governor’s recommendation to transfer an Accounting Assistant I position from the Administrative Services Division to the Public Works Board Inspection account and the Governor’s recommendation to eliminate a Building Construction Inspector III position because it was vacant longer than six months.

 

STATE PUBLIC WORKS BOARD AND
DIVISION OF BUILDINGS AND GROUNDS
GENERAL FUND IMPACT
Page	Budget	Title	FY 2002	FY 2003
ADMIN-59	710-1349	Buildings and Grounds	$                -	$                 -
ADMIN-73	101-1353	Clear Creek Youth Center	$                -	$                 -
ADMIN-77	712-1366	Marlette Lake	$                -	$                 -
ADMIN-81	101-1560	Public Works Administration	$      (9,883)	$     (11,220)
ADMIN-87	101-1562	Public Works Inspection	$                -	$                 -
		Total	$      (9,883)	$     (11,220)

I:\ONGOING\Session 2003\Budget Closings\Assembly Ways & Means\SPWB&B&G_SPEECH_RSC_jd.doc

 

Chairman Arberry thanked Rick Combs, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), for his diligence in working with the Subcommittee. 

 

Assemblyman Marvel stated he was disappointed that the offer from the Future Farmers of America (FFA) regarding the Clear Creek Youth Facility had been turned down, and noted that the Facility continued to deteriorate, despite funding allocated each session, and he believed the FFA proposal would have been a better use of the property; however, he would offer the following motion.

 

ASSEMBLYMAN MARVEL MOVED TO ACCEPT THE RECOMMENDATIONS MADE BY THE JOINT SUBCOMMITTEE ON HIGHER EDUCATION AND CAPITAL IMPROVEMENTS REGARDING THE BUDGET ACCOUNTS WITHIN THE DIVISION OF BUILDINGS AND GROUNDS AND THE STATE PUBLIC WORKS BOARD.

 

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

 

Chairman Arberry explained that the decision regarding the Clear Creek Youth Facility had been very difficult for the Subcommittee, and there was a commitment to complete the necessary maintenance in the hopes that the property could become a state park in the future.  

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblywoman Leslie, and Assemblyman Parks were not present for the vote.)

 

BUDGETS CLOSED.

 

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Chairman Arberry opened budget hearings for the State Department of Conservation and Natural Resources, Division of Environmental Protection (DEP), Air Quality, BA 3185.

DEP AIR QUALITY (101-3185) - BUDGET PAGE CNR-57

 

Mike Chapman, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), stated that the Subcommittee closing report for the Department of Conservation and Natural Resources had been presented to the Committee on May 12, 2003, with a recommendation to hold action on BA 3185 until the Department of Motor Vehicles (DMV) Pollution Control account was closed.  Mr. Chapman explained that the recommendation was necessary because of concerns regarding the availability of adequate funds in the Pollution Control account that supported, in part, recommended programs in the Division of Environmental Protection (DEP) Air Quality account. 

 

According to Mr. Chapman, the DEP Air Quality account was heard and closed by the Joint Subcommittee on Public Safety, Natural Resources and Transportation.  In that account, the Subcommittee approved six new positions, as recommended by the Governor, to address increasing air monitoring programs arising from new federal regulations, and the Pahrump Valley non- attainment status with federal air quality standards.  Mr. Chapman indicated the Subcommittee also recommended closing BA 3185 with an additional $200,000 transfer from the DMV Pollution Control account in anticipation of reduced revenues based on the projected December 2005 closure of the Mojave generating facility in Laughlin. 

 

The new positions and associated costs, and the increased transfer to support reserves would have been funded with increased transfers from the DMV Pollution Control account in anticipation of increasing the vehicle omissions certification fee from $5 to $7, as proposed in S.B. 419.  Mr. Chapman stated that subsequent to the Subcommittee’s closing action, S.B. 419 failed to pass the Senate.  The DMV Pollution Control account had been closed, and in closing that account, the Senate Committee on Finance and the Assembly Committee on Ways and Means requested legislation be introduced proposing the vehicle omission certification fee be increased by an additional $1.  Mr. Chapman said that fee increase was intended to provide sufficient funding in part to satisfy the increased transfers recommended for the DEP Air Quality account, and to provide for an adequate reserve in the Pollution Control account.

 

In addition, stated Mr. Chapman, staff had been working with the Division of Environmental Protection (DEP), and had determined that additional fee revenues would be generated from new business enterprises that were subject to the new federal regulations.  The projected additional fees were not included in The Executive Budget, nor were those fees considered by the Subcommittee during budget hearings or the closing process.  According to Mr. Chapman, the DEP had projected that approximately $60,000 should be generated during the first year of the biennium and approximately $100,000 in the second year of the biennium.

 

Mr. Chapman informed the Committee that staff recommended closure of BA 3185, recognizing the additional fee revenues of $60,000 in the first year and $100,000 in the second year of the biennium, as projected by the DEP, with corresponding decreases in transfers from the DMV Pollution Control account.  Staff would also recommend that the DMV Pollution Control account be reconsidered to reduce the transfers to the Air Quality account by the same amounts, with corresponding increases in reserves in that account.

 

Regarding the remainder of the budget, Mr. Chapman indicated that the Subcommittee recommended reductions in federal air quality grants, and staff had made the appropriate adjustments.  The Subcommittee also recommended approval of the remaining items as recommended by the Governor with technical adjustments.  Mr. Chapman noted that the Committee might wish to consider issuance of a Letter of Intent that directed the DEP to return to the Interim Finance Committee (IFC) with work program changes should legislation increase the vehicle omission certification fee.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 3185 AS RECOMMENDED BY STAFF INCLUDING TECHNICAL ADJUSTMENTS.

 

ASSEMBLYMAN MARVEL SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblywomen Chowning and Leslie, and Assemblymen Hettrick and Parks were not present for the vote.)

 

BUDGET CLOSED.

 

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DESERT REGIONAL CENTER (101-3279) - BUDGET PAGE MHDS-59

 

Mike Chapman, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), explained that the Committee had already closed BA 3279 and, subsequent to closing, staff had identified some technical errors that were made during the process of inputting the information into the accounting system.  As a result of those errors, and the resultant corrections, there were additional General Fund savings in BA 3279 of $3,231 in the first year of the biennium, and $9,343 in the second year of the biennium.

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BUDGET ACCOUNT 3279 AS RECOMMENDED BY STAFF, INCLUDING GENERAL FUND SAVINGS.

 

ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblywomen Chowning and Leslie, and Assemblymen Goldwater, Hettrick, and Parks were not present for the vote.)

 

BUDGET CLOSED.

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PUBLIC EMPLOYEES RETIREMENT SYSTEM (101-4821)

BUDGET PAGE PERS-1

 

Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), explained that the only closing issue was that the retirement contribution rate recommended in The Executive Budget for employer paid employees had been increased by 1.5 percent.  One-half of the cost was the responsibility of the employee and one-half was the responsibility of the employer. 

 

Mr. Stevens stated that a total of $111,146 in the adjusted base budget had been included in each year of the biennium for non-holiday overtime.  Agencies were not normally budgeted for non-holiday overtime costs, and those costs would have to be addressed via vacancy savings.  According to Mr. Stevens, the Public Employees’ Retirement System (PERS) had indicated that due to S.B. 439, which was anticipated to pass the 2003 session, many members would be updating their beneficiary information, which would require overtime costs to update that information during the upcoming biennium.

 

The first decision of the Committee would be whether to budget for the $111,146 cost for non-holiday overtime in each year of the biennium.  Mr. Stevens noted that within the adjusted base budget for the services category, a total of $150,000 was included in each year of the upcoming biennium to contract for a long-range technology strategic plan. 

 

Continuing, Mr. Stevens explained that decision unit E-275 would provide $110,040 in the first year of the biennium and $135,292 in the second year of the biennium for three new positions:  (1) One Management Specialist position to replace contract assistance and address issues cited by the external auditor that one person should not be responsible for security and database administration; and, (2) Two Administrative Assistant positions, one each in Carson City and Las Vegas.  The Las Vegas position would answer telephones, greet members and retirees, and perform general clerical duties.  Those duties were currently being handled by Retirement Counselors, and the PERS believed that counselors could be better utilized in meeting with members and retirees.  The position in Carson City would ensure that all documents received and generated by the PERS would be scanned and indexed into the optical imaging system. 

 

Mr. Stevens stated that decision unit E-300 would provide approximately $600,000 in each year of the biennium for a variety of data processing expenditures such as hardware/software purchases, communication and security costs, and disaster recovery site costs.  According to Mr. Stevens, the Budget Division had eliminated a number of the costs before the budget was presented to the Legislature, and Mr. Stevens explained that staff had reviewed the most recent prices from the Purchasing Division and made the appropriate adjustments in decision unit E-300.

 

Decision unit E-350, explained Mr. Stevens, included $49,802 in each year of the biennium for a system-wide initiative to examine all current communications including forms, letters, newsletters, and member and employer programs.  Decision unit E-500 provided approximately $172,000 over the 2003-05 biennium for costs related to the development and review of a Request for Proposal (RFP) for a new custodial/commercial bank contract, which expired on June 30, 2005.  Finally, stated Mr. Stevens, decision units E-710 and E-720 provided a total of approximately $80,000 over the biennium to replace existing equipment and purchase new equipment, including the telephone system at $50,000 and furnishings in the meeting room utilized by the PERS board.

 

Mr. Stevens noted that technical adjustments included actuarial expenses related to the Judicial Retirement Plan, which had been budgeted twice for the 2003-05 biennium and the duplicated amount had been removed.  Also, the Attorney General cost allocation amounts had increased by $27,112 in FY2003‑04 and decreased by $4,414 in FY2004-05. 

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 4821 AS RECOMMENDED BY STAFF INCLUDING TECHNICAL ADJUSTMENTS, AND WITHOUT THE FUNDING FOR NON‑HOLIDAY OVERTIME.

 

ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblywomen Chowning and Leslie, and Assemblymen Hettrick and Parks were not present for the vote.) 

 

BUDGET CLOSED.

 

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Chairman Arberry asked members of the Committee to review the closing report from the Joint Subcommittee on Public Safety, Natural Resources and Transportation regarding the budget accounts within the Colorado River Commission, as follows:

 

COLORADO RIVER COMMISSION

 

THE JOINT SUBCOMMITTEE ON PUBLIC SAFETY, NATURAL RESOURCES AND TRANSPORTATION HAS COMPLETED ITS REVIEW OF THE BUDGET ACCOUNTS FOR THE COLORADO RIVER COMMISSION’S SECTION OF THE EXECUTIVE BUDGET AND IS RECOMMENDING THE FOLLOWING CLOSING ACTIONS.

 

COLORADO RIVER COMMISSION (B/A 4490) CRC – PG 1

THE SUBCOMMITTEE VOTED TO CLOSE THE COLORADO RIVER COMMISSION BUDGET ACCOUNT AS RECOMMENDED BY THE GOVERNOR, WITH ONE EXCEPTION.  OF THE EIGHT NEW POSITIONS RECOMMENDED BY THE GOVERNOR OVER THE 2003-05 BIENNIUM, THREE POSITIONS WERE DEFERRED TO THE SECOND YEAR OF THE BIENNIUM TO MEET WORKLOAD INCREASES EXPECTED IN THE SECOND YEAR OF THE BIENNIUM.  THE SUBCOMMITTEE APPROVED FUNDING FOR POTENTIAL CONTRACTS FOR RESEARCH AND DEVELOPMENT-RELATED STUDIES, AND ALSO APPROVED FUNDING TO SUPPORT THE COMMISSION’S ANTICIPATED WATER AND POWER RESEARCH ACTIVITIES ALONG THE COLORADO RIVER.  THE SUBCOMMITTEE CONCURRED WITH THE GOVERNOR’S RECOMMENDATION TO ELIMINATE THREE VACANT POSITIONS.  ALSO, THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO PURCHASE NEW COMPUTER HARDWARE AND SOFTWARE.

 

POWER DELIVERY SYSTEM (B/A 4501) CRC – PG 13

THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO PROVIDE ADDITIONAL FUNDING FOR SOUTHERN NEVADA WATER AUTHORITY’S (SNWA) AND CRC'S OTHER CUSTOMERS' PROJECTED INCREASE IN DEMAND FOR POWER.  ADDITIONALLY, THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO FUND A PILOT PROJECT FOR RENEWABLE ENERGY RESOURCES IN COLLABORATION WITH SNWA.  FUNDING FOR THE PROJECT WILL BE PROVIDED UNDER A CONTRACT WITH SNWA.

 

POWER MARKETING FUND (B/A 4502) CRC – PG 17

THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO PROVIDE ADDITIONAL FUNDING TO SUPPORT THE GROWTH PROJECTED BY CRC’S HYDROPOWER CUSTOMERS FOR THE 2003-05 BIENNIUM.  THE SUBCOMMITTEE ALSO APPROVED THE GOVERNOR’S RECOMMENDATION TO FUND OPERATING AND REBUILDING COSTS OF THE BASIC INDUSTRIES SUBSTATION IN HENDERSON.  THE REVENUE WILL BE DERIVED THROUGH AN ADDITIONAL POWER CHARGE TO INDUSTRIAL CUSTOMERS AS AGREED UPON BY BOTH PARTIES.

 

Assemblyman Griffin advised the Committee that he did not recall any particular problems within the budget accounts for the Colorado River Commission.  Chairman Arberry called for a motion.

 

ASSEMBLYMAN MARVEL MOVED TO ACCEPT THE CLOSING REPORT FROM THE JOINT SUBCOMMITTEE ON PUBLIC SAFETY, NATURAL RESOURCES AND TRANSPORTATION REGARDING THE BUDGET ACCOUNTS WITHIN THE COLORADO RIVER COMMISSION.

 

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblywomen Chowning and Leslie, and Assemblymen Hettrick and Parks were not present for the vote.) 

 

BUDGETS CLOSED.

 

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Chairman Arberry asked the Committee to consider action on A.B. 264.

 

Assembly Bill 264 (1st Reprint):  Makes various changes governing education.  (BDR 34-62)

 

Mr. Stevens explained there were a number of provisions, along with proposed amendments, and he believed it would be better to discuss the proposed amendments.

 

Assemblywoman Giunchigliani explained that A.B. 264 was the policy implementation bill regarding how budgets were closed.  She would suggest amending the bill by eliminating Section 70, as it was on a “side list” for funding possibility.  Section 70 essentially dealt with establishment of a $30,000 salary schedule for teachers.  Ms. Giunchigliani stated she had also been asked to include language from S.B. 457, which was the “diploma mill” bill that prohibited people from using false licenses or diplomas as credentials, and language from S.B. 393 pertaining to juvenile probation officers inspecting education records of students.  Ms. Giunchigliani provided copies of the proposed amendments to the Committee, Exhibit I.

 

Assemblywoman Chowning asked, after deletion of Section 70, what the appropriation amount would be including the two extra days in Section 18.  Ms. Giunchigliani explained there would be five extra days in the second year, as recommended in the budget closures.  She noted that revenue would be allocated from stipend money without requesting additional revenue to fund the association and districts’ negotiation of the skills-based, performance-based, and career ladder issues, and appropriate language would be contained in the bill. 

Mrs. Chowning referenced Section 18, which added two school days, and asked about the cost.  Ms. Giunchigliani explained the bill added three days for students at $10 million per day for a total of $30 million, and the cost for professional days would be approximately $6.4 million. 

 

Assemblywoman Gibbons asked for the figures for the additional days.  Ms. Giunchigliani stated the three days would be $30 million and approximately $6 to $8 million for the two professional days.

 

Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), explained that the cost for school days would be $30 million total, and the two days for professional development would be $13.4 million in the first year of the biennium and $14 million in the second year of the biennium.  The total in personnel costs would be approximately $43.4 million and an additional 10 percent for operating costs for a total of approximately $47 million.

 

Ms. Giunchigliani suggested that the Committee review the information contained in Exhibit I and the bill could then be addressed during Floor Session, so that Committee members would be completely aware of the additional suggestions for the bill.

 

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Chairman Arberry asked for Committee introduction for the following BDR:

 

·        BDR 14-1354 – Revise provisions governing obligations of certain forfeiture funds.  (A.B. 549)

 

ASSEMBLYMAN MARVEL MOVED COMMITTEE INTRODUCTION OF BDR 14-1354.

 

ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblywoman Leslie, and Assemblymen Hettrick and Parks were not present for the vote.) 

 

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With no further business to come before the Committee, Chairman Arberry adjourned the hearing at 10:39 a.m.

 

RESPECTFULLY SUBMITTED:

 

 

                                                           

Carol Thomsen

Transcribing Secretary

 

 

APPROVED BY:

 

 

                                                                                         

Assemblyman Morse Arberry Jr., Chairman

 

 

DATE: