MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-Second Session
May 31, 2003
The Committee on Ways and Meanswas called to order at 8:13 a.m., on Saturday, May 31, 2003. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Chairman Arberry adjourned the May 30, 2003, meeting of the Committee, which had been in recess. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairwoman
Mr. Walter Andonov
Mr. Bob Beers
Mrs. Vonne Chowning
Mrs. Dawn Gibbons
Mr. David Goldwater
Mr. Josh Griffin
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Ms. Kathy McClain
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Rick Combs, Deputy Fiscal Analyst
Anne Bowen, Committee Recording Secretary
Susan Cherpeski, Committee Backup Secretary
OTHERS PRESENT:
Refer to Exhibit B.
Chairman Arberry opened the hearing on A.B. 240.
Assembly Bill 240 (1st Reprint): Extends prospective expiration of provisions that expand purposes for which board of trustees of county school district may issue general obligations. (BDR 34-453)
Chairman Arberry recognized Joyce Haldeman, a lobbyist representing the Clark County School District.
Ms. Haldeman identified herself for the record and testified that the Nevada State Legislature approved two bills related to school reconstruction, A.B. 499 of the 71st Legislative Session that required the Clark County School District to use funding from bonds to reconstruct five schools, and S.B. 553 of the 71st Legislative Session that provided the Clark County School District authorization to use funding from bonds to pay for the school reconstruction required by A.B. 499. Ms. Haldeman advised the members of the Committee that S.B. 553 also allowed the Clark County School District to use funding from bonds to purchase environmentally friendly school buses. Ms. Haldeman pointed out that Section 48 of S.B. 553 had a sunset date of July 1, 2003.
Ms. Haldeman said that A.B. 396, which had been enrolled and sent to the Governor, increased the number of schools to be reconstructed to a total of ten.
Ms. Haldeman advised the Committee that A.B. 240, brought forth by the Clark County School District, would extend the sunset provision in S.B. 553 of the 71st Legislative Session from July 1, 2003, to July 1, 2007. Ms. Haldeman explained that passage of A.B. 240 would allow the Clark County School District to continue to use bond funding for school reconstruction and to purchase additional school buses.
Ms. Haldeman also advised the Committee that the Clark County School District anticipated purchasing 115 buses for the 2003-04 school year. The cost of each bus was approximately $115,000 for a total cost of $13.2 million. Ms. Haldeman explained that if the sunset provision was not extended, the buses would have to be purchased with funding from the general operating fund, which would require the trustees to reduce another program area.
Ms. Haldeman further advised that of the 115 buses, 50 were needed for growth, 30 for children in Special Education, approximately 10 for the requirements of the No Child Left Behind Act (NCLBA), assuming there would be parents who would opt to go to other schools if their child attended a school that was rated as needing improvement, and about 25 to replace existing buses.
Ms. Haldeman testified that after the Clark County School District’s current school construction bond program expired on June 30, 2008, the next bond program to go before the voters would include “the school replacement component,” and would not require Legislative approval.
Ms. Haldeman advised that the school replacement list included four schools identified as being either replaced or under construction. The fifth school was Rancho High School, which had been targeted for replacement, but because funding was previously limited at $90 million, A.B. 396 had been introduced and approved, and A.B. 240 was needed to allow the Clark County School District to use the bond money for reconstruction.
In response to a question from Assemblywoman Giunchigliani, who asked whether the 115 buses would be purchased between now and 2007, Ms. Haldeman said the buses would be purchased during the current biennium.
Ms. Giunchigliani noted that legislation that expanded into the area of funding for school transportation was not normally allowed, but as indicated by Ms. Haldeman, was approved during the 71st Legislature.
Ms. Haldeman reiterated that the sunset provision set for July 1, 2003, was imposed on S.B. 553.
Ms. Giunchigliani raised concerns that the Clark County School District would not utilize the Citizens Area Transit (CAT) buses as the District bought additional buses. Ms. Giunchigliani requested some assurance that the District would continue to move toward utilizing the CAT.
Ms. Haldeman indicated she was under the impression that one of the University regents was currently entertaining a bid from CAT to conduct a regional project, which was in part tied with changing the starting school time.
Assemblyman Beers questioned how soon “out-of-zoning transportation” would have to be provided under the No Child Left Behind Act (NCLBA).
Ms. Haldeman responded that at the beginning of the current school year, school choice was offered at five schools, and 135 students took advantage of the opportunity for school choice. Ms. Haldeman explained that a provision of the No Child Left Behind Act stipulated that if a child was in the second year of a state program identified as a school that needed improvement, the parents had to be notified of the opportunity to choose another school.
In response to a question from Assemblyman Beers concerning the number of families who were offered “out-of-zoning transportation,” Ms. Haldeman advised that while letters were mailed to over 5,000 students, only 135 took advantage of the offer. Ms. Haldeman indicated the District was uncertain whether the small percentage of students who took advantage of the offer was a trend that would continue to be followed. Ms. Haldeman explained that the parents might have misunderstood the availability of school choice because notification of the law was received and letters advising parents of the new law were sent within a two‑week time period.
Assemblyman Beers questioned whether the No Child Left Behind Act provision allowed parents to choose any school for their child.
Ms. Haldeman responded that the law provided two opportunities for choice, and the District was permitted to make the choices. Ms. Haldeman advised that the District made the choices based on proximity to the school and space available. However, Ms. Haldeman explained that initially a problem occurred when the District advised parents their children could stay where they were or choose another school. Subsequently, the District learned that the parents were to be provided the opportunity to have their children stay where they were or choose two other schools.
In response to a question from Assemblyman Beers concerning whether the transportation issue had been simplified, Ms. Haldeman advised that while the issue had been simplified to an extent, additional schools would be rated as needing improvement, and more choices would have to be offered. Ms. Haldeman indicated that Clark County schools were already overcrowded and in determining the choices that could be offered, taking into account schools that were in close proximity to students, the District did not want to “force another school into a situation that was unbearable.” Ms. Haldeman said that the District recognized that some students would have to be transported to schools that were further away than the District would prefer.
Chairman Arberry questioned whether there were others who wanted to speak for or in opposition to A.B. 240. There was no further testimony, and Chairman Arberry closed the hearing on A.B. 240.
Chairman Arberry opened the hearing on S.B. 209.
Senate Bill 209 (1st Reprint): Makes appropriation to Retired Justice Duty Fund for salaries for senior judges to increase coverage in Second and Eighth Judicial Districts and for emergency requests in smaller counties of Nevada. (BDR S-616)
Deborah A. Agosti, Chief Justice, Supreme Court of Nevada, identified herself for the record. Justice Agosti testified that S.B. 209 initially requested funding from the General Fund in the amount of $225,000. As a result of the passage of S.B. 106, and the Court’s projections concerning the augmentation for the employment of senior judges, S.B. 209 was subsequently reduced to $100,000.
With approval of S.B. 106, Justice Agosti indicated it was anticipated that no future legislation for a one-shot appropriation would be required. Justice Agosti indicated that without the assistance of the funding requested in the revised legislation, the use of senior judges would have to be curtailed for a period of time because of a lack of funding to pay them. Justice Agosti discussed the “extraordinary amount of money” it took to pay senior judges to assist in the lawsuit the Venetian Hotel brought against the Las Vegas Convention and Visitors Authority in Clark County as well as other matters that had arisen. As previously mentioned by Justice Rose, Justice Agosti indicated that the use of senior judges helped to “stave off” the need to hire additional district court judges.
Justice Agosti advised the members of the Committee that the senior judge program was heavily relied upon, and the use of senior judges had been on the rise. While Clark County had been the primary beneficiary of the program, Justice Agosti indicated that Washoe County’s needs were increasing.
Justice Agosti discussed a family court judge in Clark County who had been involved in an automobile accident and would require assistance to keep his caseload moving as well as another family court judge in Washoe County who was on an extended medical leave. Justice Agosti indicated that while rural judges were called upon to fill in, their resources were limited. For example, Justice Agosti indicated that Douglas County’s Judge Gibbons would be sitting in Tonopah in a two-month trial, which left one less person to assist with urban district needs.
Justice Agosti reiterated that there was an increasing need for senior court judges, and the need could not be deferred without deferring the needs of the public. Justice Agosti asked for the Committee’s favorable consideration of S.B. 209 and indicated that if cases had to be continued, the public would not be well served. Justice Agosti concluded her testimony and advised that she would defer comments to Ron Titus, Court Administrator, Administrative Office of the Courts, and to Associate Justice Mark Gibbons.
Mark Gibbons, Associate Justice, Supreme Court of Nevada, and former Chief Judge of the Eighth Judicial District Court in Clark County, identified himself for the record.
Justice Gibbons addressed a 2003 Construction Defect Trial Schedule of cases in Clark County (Exhibit C). Justice Gibbons indicated that many of the cases were “settled at the last minute” and that if all of the cases went to trial, the system would be brought to a standstill. Additionally, Justice Gibbons indicated that while there were active efforts to settle the cases, if the cases were not set for trial, which was the trigger to try to have them resolved, they could not be settled.
Justice Gibbons provided an explanation of the senior judge program and the mechanism used to settle the construction defect cases in Clark County. Justice Gibbons explained that Chief Judge Gene Porter had the flexibility to request senior judges to substitute for a sitting judge’s calendar if that sitting judge was scheduled for a construction defect case. A construction defect trial would be scheduled to begin early in the morning and proceed into the early evening in order to speed it up for the jury and conclude as quickly as possible.
As previously mentioned by Chief Justice Agosti, Justice Gibbons indicated that Judge Steve Jones, a family court judge in Clark County, had been injured and would be on leave for an extended period. Justice Gibbons advised that he had volunteered to substitute as a district court judge in Clark County and hear Judge Jones’ calendar during the last week of June. Other Supreme Court justices had also agreed to substitute for Judge Jones in order to resolve the coverage issue.
Additionally, Justice Gibbons indicated that, as previously mentioned by the Chief Justice, Michael Gibbons, one of two district judges in Douglas County, had been assigned, in lieu of a senior judge, to hear a trial in Tonopah that would take a minimum of two months. Justice Gibbons explained that there was no senior judge coverage for Judge Gibbons and, because of a lack of funds and availability of the senior judges, Judge Gibbons was attempting to do “double duty” and schedule as many Douglas County cases as possible into Monday mornings and then proceed to Tonopah to conduct the trial there on Tuesday through Friday.
Justice Gibbons indicated that the senior judge program was used for various emergency situations and recalled that several years ago, a judge was appointed to federal court and coverage was needed for his department until the Governor named a replacement. While the program had been primarily used in Clark County, Justice Gibbons indicated the rural counties and Washoe County were experiencing needs as well.
Justice Gibbons reiterated that S.B. 106 had been approved but not yet signed by the Governor. Justice Gibbons explained that the bill provided that a $5 portion of a multi-party filing fee would be allocated to the senior judge program. However, the allocation would not begin before October and then would gradually build. While there were projections, Justice Gibbons advised it remained uncertain as to how much funding would be received from the multi-party filing fee, which was similar to the administrative assessment fee. In the meantime, Justice Gibbons advised the members of the Committee that the unavailability of funding to assign senior judges made the one-time appropriation a necessity. Justice Gibbons indicated that the Court was hopeful that S.B. 106 would take care of any additional problems throughout the biennium and into the future once the funding from the multi-party filing fee was activated.
Ron Titus, Court Administrator and Director of the Administrative Office of the Courts, identified himself for the record. Mr. Titus advised the members of the Committee that S.B. 209 requested a one-time appropriation of $100,000 for salaries for senior judges. Mr. Titus further advised the members of the Committee that the bill also recognized that any amount in the Retired Justice Duty Fund in excess of $175,000 would revert to the General Fund at the end of June 2005.
Chairman Arberry questioned whether there were others who wanted to speak for or in opposition to S.B. 209. There was no further testimony, and Chairman Arberry closed the hearing on S.B. 209.
Chairman Arberry opened the hearing on S.B. 368.
Senate Bill 368: Provides for reimbursement of Legislators for certain travel expenses incurred during legislative interim. (BDR 17-676)
Chairman Arberry recognized Senator Rhoads, Northern Nevada Senatorial District, who identified himself for the record and testified that S.B. 368 provided each legislator, within their district, a maximum reimbursement allowance of $5,000 each interim for travel expenses to participate in public meetings with elected local officials.
Senator Rhoads explained that the travel reimbursement was available to all members of the Nevada Legislature for travel that occurred during the legislative interim between sessions. The bill specified that reimbursements would not be provided while a legislator was a candidate for elective office. Further, transportation had to be by the most economical means considering total cost and time spent in transit. Additionally, the bill required the inclusion of specific information, signature by the legislator, and claims had to be paid from the Legislative Fund.
Currently, Senator Rhoads indicated there were 13 legislative districts in Nevada that had a land area larger than 1,000 square miles. The largest district in the United States, excluding Alaska, was the 73,000 miles located in Senator Rhoads’ district. Senator Rhoads explained that he had recently traveled to Lincoln County, a round trip of 1,050 miles. The trip to Lincoln County included a flight to Las Vegas, lodging and a rental car, with a cost of $529 for one trip to Pioche for dedication of a school.
Senator Rhoads indicated his 73,000-square-mile district was almost 70 percent of the geographical area of Nevada and was larger than 34 states, while 9 states, the District of Columbia and the Republic of China or Taiwan, all could fit into the district. Other legislators, named by Senator Rhoads, who served large areas, included Senators McGinness, Hardy and Washington, Assemblymen Christensen, Atkinson, Hardy, Marvel, Carpenter, Goicoechea, Grady, and Sherer. Senator Rhoads asked for the Committee’s favorable consideration of the bill and noted that in many areas of Las Vegas or Reno, a legislator could drive an hour and be out of their district while legislators in other areas of Nevada could drive eight hours and still be within their district.
Chairman Arberry questioned whether there were others who wanted to speak for or in opposition to S.B. 368. There was no further testimony, and Chairman Arberry closed the hearing on S.B. 368.
Chairman Arberry opened the hearing on S.B. 499.
Senate Bill 499 (1st Reprint): Makes appropriations to Interim Finance Committee for allocation to state entities for radio system costs, infrastructure upgrades and user equipment. (BDR S-1364)
Chairman Arberry recognized Colonel Dave Hosmer, Chief, Nevada Highway Patrol, who identified himself for the record. After testifying in favor of S.B. 499 earlier in the week, Colonel Hosmer requested the Committee’s favorable consideration of the bill and indicated he would be happy to answer questions.
Vice Chairwoman Giunchigliani mentioned the availability of forfeiture funds, which she indicated could reduce the General Fund obligation by several hundred thousand dollars.
Colonel Hosmer indicated that forfeiture funds were an option that could be considered, but he was uncertain about the amount still available after an allocation was made to the Nevada Department of Investigations.
It was Vice Chairwoman Giunchigliani’s understanding that forfeiture funds in the range of $300,000 to $400,000 were currently available. The Vice Chairwoman asked Colonel Hosmer to provide information on the available funding by the time the Committee was scheduled to be on the Floor.
Colonel Hosmer agreed to do so.
Assemblyman Beers questioned whether it would be appropriate to use forfeiture funds in place of the General Fund since there could be some non‑Highway Patrol entities that would request allocations for funding.
Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, LCB, indicated that the Division of Parole and Probation would be the primary entity requesting funds. While Mr. Stevens indicated he believed it would be permissible to use the forfeiture funds, he said that Colonel Hosmer could more properly respond to Mr. Beers’ question.
Colonel Hosmer agreed that it would be appropriate to use forfeiture funds and said that some of the funding would be used to support the Nevada Division of Investigation narcotics enforcement.
Vice Chairwoman Giunchigliani indicated that because of the budget closings, it was not yet known how much funding was actually allocated for the Nevada Division of Investigations’ Task Force.
Assemblyman Beers questioned whether future forfeiture funds could be encumbered in an effort to avoid appropriations from the General Fund.
Mr. Stevens advised the members of the Committee that staff remained uncertain with respect to setting a goal for how much would be generated in forfeiture funds since no one wanted to provide an incentive to seize property.
Assemblyman Hettrick discussed amending the bill to include a statement that any available forfeiture money had to be used before funding could be requested from the General Fund and that any General Fund balance had to be reverted.
Vice Chairwoman Giunchigliani reiterated her earlier request to Colonel Hosmer to determine the available forfeiture dollar amount and provide the information by the time the Committee was scheduled to be on the Floor. Additionally, Vice Chairwoman Giunchigliani questioned whether the Colonel agreed with Assemblyman Hettrick’s proposed amendment.
Colonel Hosmer expressed his agreement with Assemblyman Hettrick’s proposal.
In response to a comment from Assemblyman Marvel concerning the amount of forfeiture funds available, Vice Chairwoman Giunchigliani believed it was approximately $400,000.
Mr. Stevens advised that after briefly reviewing the forfeiture fund earlier in the morning, it appeared that between $300,000 and $400,000 was currently available after the money obligated for the Task Force was reserved. However, Mr. Stevens indicated a firm number was required. Additionally, Mr. Stevens noted that the total General Fund appropriation for S.B. 499 was $1.8 million, and the Highway Fund was in the $13 million or $14 million range.
Vice Chairwoman Giunchigliani questioned whether there were others who wanted to speak for or in opposition to S.B. 499. There was no further testimony, and Vice Chairwoman Giunchigliani closed the hearing on S.B. 499.
Chairman Arberry opened the hearing on S.B. 502.
Senate Bill 502: Extends reversion date of certain appropriations from previous sessions for park improvements. (BDR S-1366)
Steve Weaver, Chief of Planning and Development, Division of State Parks, identified himself for the record and testified that S.B. 502 was intended to carry over authorization for expenditure of approximately $170,000 of General Fund monies for two partially completed park renovation and restoration projects.
Mr. Weaver advised the members of the Committee that the funds were used to leverage approximately $650,000 of already approved federal funds. The two projects included completion of the first floor interior restoration work in the 133-year-old Buckland Station at Fort Churchill State Historic Park and completion of the renovation of the Cathedral Gorge State Park campground, including potable water and irrigation systems, a recreational vehicle dump station, and campsite reconstruction including grading, retaining walls, gravel pads, grills and tables.
In response to a question from Assemblyman Marvel concerning the funding, Mr. Weaver indicated there was approximately $170,000 of General Fund monies.
In response to an additional question from Assemblyman Marvel with respect to whether the $170,000 had been included in the budget for reversion, Mr. Weaver said the funding had been requested long ago and was not included in the budget.
Chairman Arberry questioned whether there were others who wanted to speak for or in opposition to S.B. 502. There was no further testimony, and Chairman Arberry closed the hearing on S.B. 502.
Chairman Arberry recessed the meeting at 8:41 a.m.
The Chairman reconvened the meeting at 9:29 a.m.
BUDGET CLOSINGS
2003 RECOMMENDED CAPITAL IMPROVEMENT PROGRAM
Rick Combs, Deputy Fiscal Analyst, Fiscal Analysis Division, LCB, identified himself for the record. Mr. Combs referred to a document titled “CIP Joint Subcommittee Recommended CIP Program for the 2003-05 Biennium,” (Exhibit D). Beginning on page 10 of the document, Mr. Combs provided an overview of the Subcommittee’s recommendations versus the Governor’s recommendations on the various projects included in the Capital Improvement Program (CIP) for the 2003-05 biennium.
Mr. Combs advised the members of the Committee that the Governor recommended $170,047,895 in bond funding and reallocated funds and $71,596,739 in Other Funds for a total of $241,644,634. The Subcommittee recommendation reduced the bond funding to $143,357,203, and increased Other Funds to $75,141,903 for a total of $218,499,106.
Mr. Combs noted that $4 million in funding had been reallocated from previous CIP projects, and he pointed out that almost $4 million included in the bond column on the spreadsheet under the Governor’s recommendation had been moved to the Other Funds column under the heading, Subcommittee Recommendation. Mr. Combs pointed out that the $4 million appeared as a difference in the Other Funds column but, in reality, was not really a difference.
CONSTRUCTION PROJECTS
Mr. Combs turned to page 1 of the document (Exhibit D) and reviewed the following construction projects:
· 03-C1 – 150-bed Psychiatric Hospital at Southern Nevada Adult Mental Health Services (SNAMHS) included 120 acute care beds, and 30 psychiatric emergency services beds. Construction would permit addition of another 40 beds when needed.
· 03-C6 – A new State Emergency Operations Center was recommended in the Governor’s budget to be funded at full construction for $7,071,365. The Emergency Management Division applied for federal funds for the “design through construction document phase.” A bill was anticipated in the next several days to provide funding to the Interim Finance Committee Contingency Fund that would serve as matching funds for construction if the grant was received.
In response to a question from Assemblyman Marvel concerning location of the new State Emergency Operations Center, Mr. Combs advised that the Center would be located near the new National Guard Building on Fairview Drive in Carson City.
Assemblyman Marvel questioned the use of the building on Carson Street that the National Guard had occupied for so many years.
Mr. Combs advised that the building, which was in a prime location, could not be sold until the Division of Emergency Management was relocated.
Assemblyman Marvel questioned whether the property had been appraised and whether it would command a high resale value.
Mr. Combs indicated the property had been appraised several years ago for approximately $6 million and during that time had probably increased in value. Additionally, Mr. Combs indicated there had been some discussion during the morning’s Senate Finance Committee hearing to use some of the sales proceeds to help fund the project if it went to full construction during the current biennium.
· 03-C21 – Recommendation for construction of the Health Sciences Building on the West Charleston Campus of the Community College of Southern Nevada (CCSN). The 71st Legislative Session approved the project for advance planning and design.
· 03-C23 – Recommendation for a new University of Nevada, Las Vegas (UNLV), Science Engineering and Technology Complex construction project. The new complex was the largest project in the program at $60,326,401, and a total of $25,000,000 would be provided by University sources.
· 03-C50 and 03-C51 were projects to enter into a lease-purchase agreement for state office buildings in Carson City, one for the Department of Conservation and Natural Resources, and one for the Department of Human Resources. The Subcommittee recommended approval of the Conservation and Natural Resources’ building at an initial investment of $3.1 million. The Department of Human Resources building was not recommended for approval. The Subcommittee indicated that the lease-purchase concept should be tested with one project. Based on that concept, the Subcommittee selected the Department of Conservation and Natural Resources because they had the greatest number of employees who were located in leased space.
In response to a question from Assemblyman Marvel concerning the location of the property, Mr. Combs indicated he was uncertain of the exact location of the project but that the property was located in the Capitol Complex area.
Mr. Combs indicated that the Joint Subcommittee on Higher Education and Capital Improvement Projects added the following projects:
· 03-C91L – Maxey Science Center building renovations and addition at the Desert Research Institute.
· 03-C92L – Purchase and renovation of 120 miles of Nevada Northern Railroad track, which was in A.B. 180.
· 03-C94L – Campus-wide fire and life safety retrofits at the University of Nevada, Reno, which would address portions of the Fire Marshal’s list of deficiencies.
· 03-C95L – Land acquisition for women’s athletics programs at the University of Nevada, Reno, for a total cost of $5 million.
· 03-C96L – Community College of Southern Nevada (CCSN) renovation of former Mesquite High School to be used as a satellite campus for CCSN for a total of $750,000.
· 03-C97L – Security system and equipment upgrades at various campuses for the Community College of Southern Nevada (CCSN) funded at $500,000.
· 03-C98L – Establishment of an oral health clinic at the Great Basin College in Elko was approved at a total cost of $250,000.
· 03-C99L – Study and design of a heart transplant facility and construction of an embalming facility plasticization laboratory at the University of Nevada Medical School.
MAINTENANCE PROJECTS
Mr. Combs turned to page 8 of the document (Exhibit D) and reviewed the Governor’s recommended funding for the maintenance projects compared with the Subcommittee’s recommendation. The Governor recommended $29,837,856, which was reduced by the Subcommittee to $16,772,799. Mr. Combs explained that many of the projects were not recommended for funding until fiscal year 2006, and the Subcommittee decided that approval should be delayed until the following legislative session since construction would not occur until 2006. Mr. Combs advised that “a concerted effort” was made to not expend the bond authority by which the projects were reduced so that the funding would be available during the following session.
ADVANCE PLANNING PROJECTS
STATEWIDE PROJECTS
Mr. Combs noted that the statewide projects had all been adjusted downward. Mr. Combs explained that the Subcommittee asked the State Public Works Board to reduce the statewide projects to the level of funding they thought would be feasible to complete the projects within the next two years. Mr. Combs noted that “a significant reduction” of about a third could be seen in each of the projects.
UNIVERSITY PROJECTS
Mr. Combs advised that the “U” projects, 03-U1L through 03-U8L, identified deferred maintenance projects for the University and Community College System of Nevada (UCCSN). The projects included $10 million in state funding and $5 million from the Special Higher Education Capital Construction Funds, funding that had been included in the most recent Capital Improvement Programs.
Mr. Combs advised that the additional two pages attached to the document (Exhibit D) were included for the Committee’s information. Mr. Combs advised that the first page illustrated how the funds from previous CIP projects had been reallocated to the projects in the 2003 Capital Improvement Program.
The last page (Exhibit D) was a copy of an e-mail from Daniel O’Brien, Manager, State Public Works Board, concerning a Community College of Southern Nevada (CCSN) project that was included in the previous Capital Improvement Program project 01-C29L, a Telecommunications Building, as well as project 03-C21, the Health Science Building, recommended in the 2003 Capital Improvement Program.
Mr. Combs discussed a provision added to the CIP bill during the 71st Legislative Session that required the Board to actually receive any donated funds before the Board could contract for a project for which funds had been donated. The provision was added to the bill in an effort to ensure that the Board was not committed to funding the contract without the money actually being raised. Mr. Combs explained that the donated funding for the two projects in question was small, and the Board asked to be removed from the requirement that the funding was received before the construction contract could be bid. Mr. Combs indicated that the request for the two projects was reasonable. Mr. Combs also indicated that the State Public Works Board recommended that additional language be included that would remove the actual expenditure line item from S.B. 584 of the 71st Legislative Session. However, Mr. Combs did not recommend approval of that particular request.
In response to a question from Assemblyman Marvel concerning a tax rate increase, Mr. Combs indicated that the tax rate for the Capital Improvement Program would be increased 1 cent from 15 cents to 16 cents.
Assemblyman Marvel questioned whether any consideration had been given to local governments who were currently at the $3.64 cap.
Mr. Combs advised that one cent of the taxes imposed by the provisions of the CIP bill would not be included in calculating the limitation set forth on the total ad valorem tax levied for all public purposes. Additionally, an ad valorem tax of one cent on each $100 of assessed valuation of taxable property for the Question 1 bonds would not be included under the $3.64 cap.
Assemblyman Parks questioned the last entry on page 8 (Exhibit D) concerning the Student Services Addition, Design through Construction documents for the University of Nevada, Las Vegas (UNLV). Assemblyman Parks indicated he was surprised to see $500,000 for the project since the master plan for UNLV indicated that Maude Frazier Hall was slated for demolition.
Mr. Combs advised that the design was actually for the Student Services building, not Frazier Hall. The addition to the Student Services building would be built to house student services currently provided at Frazier Hall.
ASSEMBLYMAN MARVEL MOVED TO ACCEPT THE FINDINGS AND RECOMMENDATIONS BY THE JOINT SUBCOMMITTEE ON HIGHER EDUCATION/CIP IDENTIFIED IN THE REPORT (EXHIBIT D).
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED WITH ASSEMBLYMAN HETTRICK, ASSEMBLYMAN BEERS, AND ASSEMBLYMAN ANDONOV VOTING NO.
On behalf of the Committee, Chairman Arberry extended his appreciation to Mr. Combs for his many hours of staff work on the Capital Improvement Program.
Chairman Arberry opened the following bills for consideration by the Committee.
Assembly Bill 240 (1st Reprint): Extends prospective expiration of provisions that expand purposes for which board of trustees of county school district may issue general obligations. (BDR 34-453)
Mr. Stevens indicated that A.B. 240, involving the school district General Obligation Bond issues, had been heard earlier in the meeting.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS A.B. 240.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
********
Senate Bill 200: Authorizes grants to pay certain costs associated with connections to community sewage disposal system. (BDR 30-889)
ASSEMBLYMAN MARVEL MOVED TO DO PASS S.B. 200.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
********
Senate Bill 233: Increases amount of general obligation bonds that State Board of Finance may issue to provide grants to certain water systems. (BDR 30-553)
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS S.B. 233.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
********
Senate Bill 446: Authorizes State Treasurer to appoint and employ two Senior Deputies in unclassified service of State. (BDR 18-301)
Mr. Stevens advised the members of the Committee that S.B. 446 would provide two additional deputies for the State Treasurer’s Office. Additionally, Mr. Stevens indicated the State Treasurer’s budget had been closed to include the two additional deputies, and the statute would be changed to match the budget closings.
The Chairman closed the hearing on S.B. 446 and opened the hearing on S.B. 496.
********
Senate Bill 496: Makes various changes concerning financing of Commission on Economic Development to carry out certain training programs for employees of businesses. (BDR 18-1348)
Mr. Stevens advised the members of the Committee that the Senate Committee on Finance drafted S.B. 496, a bill concerning the Commission on Development’s Train Employees Now (TEN) Program. Currently, the program’s unexpended balances were balanced forward each fiscal year. Mr. Stevens explained that the bill, as originally drafted, limited the balance forward to $750,000. The Senate Committee on Finance agreed with the Assembly’s closing document which removed the carry forward provision and provided that the TEN Program funds reverted at the end of each biennium.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS S.B. 496 TO CONFORM TO THE BUDGET AND TO REMOVE THE CARRY FORWARD LANGUAGE.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
********
Senate Bill 502: Extends reversion date of certain appropriations from previous sessions for park improvements. (BDR S-1366)
Mr. Stevens indicated that S.B. 502, heard earlier in the hearing, extended the reversion dates on certain park improvement projects.
ASSEMBLYWOMAN CHOWNING MOVED TO DO PASS S.B. 502.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
********
Senate Bill 447 (2nd Reprint): Makes various changes relating to governmental financial administration. (BDR 31-302)
Mr. Stevens indicated that S.B. 447 was heard in Committee several days ago when State Treasurer, Brian Krolicki, testified on the bill, which involved local government financial matters. Mr. Stevens addressed language on page 15, Sec. 20.2 of the bill concerning current bond issues which provided that No lease or installment purchase agreement authorized pursuant to subsection 1 may be entered into after July 1, 2003, other than a lease or installment purchase agreement entered into for the purpose of refunding outstanding obligations. Mr. Stevens explained that the language could apply to any number of current bond issues.
In response to a question from Chairman Arberry concerning the Interim Finance Committee’s involvement, Mr. Stevens indicated the Committee could consider amending the bill to include language that the members of the Board of Examiners, Board of Finance, and the Interim Finance Committee would be consulted and their approval requested before agreements were entered into. However, Mr. Stevens indicated that he had not spoken to the Treasurer concerning such an amendment, and he did not know if the Treasurer would have any objections.
Ms. Giunchigliani indicated that she had spoken with Mr. Krolicki, and it was her opinion that language should be included that required Board of Finance and Interim Finance Committee approval. Ms. Giunchigliani introduced Assemblyman Goicoechea, who was in attendance to ask the Committee to consider an amendment based on rural county needs.
Assemblyman Goicoechea, District No. 35, identified himself for the record and introduced Ben Zunino, Superintendent, Eureka County School District. Assemblyman Goicoechea addressed an issue the rural counties had with the establishment of governmental stabilization funds that only permitted 10 percent of a county’s budget to be shifted into a fund, and access to those dollars could only be gained if a county’s budget met an unexpected shortfall or a natural disaster. Assemblyman Goicoechea explained that his proposed amendment to the bill (Exhibit E) requested that in a county whose population was less than 3,000, the money in the fund might also be used to retire outstanding bonds or other forms of debt.
Mr. Zunino, Superintendent, Eureka County School District, testified that several years ago during a strong economic period, the Eureka County School District obtained a loan to purchase the Crescent Valley School in Crescent Valley, Nevada. However, as a result of the downturn in the economy and less revenue being received from net proceeds of mines, the obligation to pay $250,000 a year with a $5 million budget had a tremendous impact on the Eureka County School District’s cash flow.
Mr. Zunino testified that the Eureka County School District would like to use the money in the revenue stabilization fund to pay off the Crescent Valley School loan, which would save about $200,000 over the life of the loan, and enable the School District to place an additional $250,000 into their cash flow for maintenance and for other requirements of the School District.
Assemblyman Goldwater questioned the term “local government” in the bill and whom that included.
Assemblyman Goicoechea responded that only Esmeralda County and Eureka County local governments, county government, and/or the school district would be included because of the population cap of 3,000.
Additionally, Assemblyman Goldwater questioned whether the language provided in Sections 10 and 11 would allow local government to engage in securities lending.
Assemblyman Goicoechea responded that he did not draft the language in Sections 10 and 11, and the language was not included in his proposed amendment.
ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS S.B. 447.
ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
********
Mr. Stevens distributed a document (Exhibit F) that he indicated was the “back language” to the Appropriations Act, which had to be reviewed by the Senate Committee on Finance and the Assembly Committee on Ways and Means for changes that might be needed. Mr. Stevens explained that typically, the Appropriations Act was not amended on the floor.
In a brief review of the document, Mr. Stevens indicated that the first 31 sections listed the actual appropriations made by particular budget accounts.
Section 32 listed the actual budget accounts that were permitted to transfer monies between fiscal years. New budget accounts included in the list were identified as Number 12, Child Assistance and Development; Number 22, Child Welfare Integration; Number 23, Secretary of State, Help America Vote Act (HAVA) Election Reform; and Number 24, Information Technology Projects. Mr. Stevens advised that Budget Accounts 1 through 24 would have monies available in both fiscal years to transfer upon the recommendation of the Governor and approval of the Interim Finance Committee.
Section 33 included a number of items within specific budget accounts that could be transferred between fiscal years. Subsection 1 covered the TEN Program, which had been discussed earlier during the Committee’s consideration of S.B. 496. Mr. Stevens advised that subsection 1 would allow the monies provided in the TEN Program to be transferred between fiscal years during the biennium. Based on the provisions of S.B. 496, Mr. Stevens advised that the monies would revert at the end of the biennium.
Turning to page 19, subsection 2, Mr. Stevens advised that a number of individual programs of the Department of Education would be provided the authority to transfer monies between fiscal years including:
Additionally, Mr. Stevens indicated that of the amounts appropriated to the Department of Education for proficiency testing, including the state norm‑referenced examination, the criterion-referenced examination, and the high school proficiency examination, the state writing proficiency examination would be permitted to transfer monies between fiscal years.
Section 34 allowed amounts provided to each of the divisions in the Legislative Counsel Bureau and for the support of the Legislative Commission to be transferred between fiscal years.
Section 35 contained “capping language,” which Mr. Stevens explained prevented the Welfare Division and the Division of Health Care Financing and Policy from requesting additional money over the amounts appropriated in the Appropriations Act with the exceptions listed in subsections 1, 2, and 3. Subsection 1 indicated that additional funding could be requested in the event federal financial participation rates for those agencies changed. Subsection 2 indicated that additional funding could be requested if the federal government mandated additional services that were currently unknown. Subsection 3 indicated that additional funding could be requested if the annual allocation of federal Temporary Assistance for Needy Families (TANF) block grant funds were lower than the amounts approved by the Legislature for 2003-2005.
Mr. Stevens continued his presentation by explaining the provisions of the following sections:
Assemblywoman Leslie addressed the “capping language” provided in Section 35 and questioned why the Welfare Division and the Division of Health Care Financing and Policy were being treated differently than other agencies. Assemblywoman Leslie expressed concern over the possibility of a future Welfare and Medicaid caseload increase, and asked if there was another part of the Appropriations Act that would allow the Legislature to review those budgets in the event of a caseload increase.
Mr. Stevens responded that Sections 36 and 37 provided language that allowed the Welfare Division and the Division of Health Care Financing and Policy to move monies between budget accounts. Mr. Stevens explained that the provision was extended because of the capping language in Section 35. Additionally, he said that if a substantial caseload increase occurred and additional funds were needed, a legislative review would be required on a case‑by‑case basis. Mr. Stevens pointed out that during the current biennium the Legislature reviewed and determined that both the Welfare Division and the Division of Health Care Financing and Policy could not live within their respective budgets, and a supplemental appropriation was provided.
Assemblywoman Leslie indicated, for the record, that it was her understanding in the event of a true emergency, the agencies could request a supplemental appropriation and the capping language would be ignored.
Mr. Stevens explained that extraordinary circumstances would be required before the divisions could request a supplemental appropriation and, as previously discussed, the need would have to be reviewed on a case-by-case basis.
Assemblywoman Leslie noted that a message was being sent to the divisions to stay within their budgets, but at the same time, a precedent had already been set that in the event of a statewide emergency that a supplemental appropriation could be requested.
Another issue Mr. Stevens discussed was the Governor’s recommendation that based on an approved tax plan, funding in the amount of $12.5 million in the first year of the biennium and $20 million in the second year be set aside to provide the Department of Taxation a data processing system and additional staff. Mr. Stevens explained that the funding was not included within any of the budgets and while he was uncertain on how the Committee wanted to proceed, he indicated the appropriation could be included in the “back language” of the Appropriations Act. Mr. Stevens further indicated that the Committee might wish to consider appropriating the funding to the Interim Finance Committee and require the Department of Taxation to approach the Committee for an allocation from the Contingency Fund based on a plan the Department would bring forward.
Assemblyman Hettrick questioned the availability of the $32.5 million in funding.
Mr. Stevens responded that the Governor’s recommendation for $12.5 million in the first year of the biennium and $20 million in the second year was built into the data provided in the updated Senate and Assembly status sheets, (Exhibit G), a copy of which he indicated he would distribute.
In response to clarification from Assemblyman Hettrick concerning the availability of the funding on the total budget proposal, Mr. Stevens explained that the funding was within the budgets.
Assemblywoman Giunchigliani agreed with the suggestion to appropriate the funding to the Interim Finance Committee and to require the Department of Taxation to submit a plan to the Committee for the system they intended to purchase. Assemblywoman Giunchigliani also suggested that the data processing system should be put out to bid by the Department of Taxation.
Chairman Arberry indicated that a motion would be required.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO REQUIRE THAT THE FUNDING FOR THE DEPARTMENT OF TAXATION INFORMATION SYSTEMS EQUIPMENT AND STAFFING BE APPROPRIATED TO THE INTERIM FINANCE COMMITTEE CONTINGENCY FUND. THE DEPARTMENT OF TAXATION WOULD BE REQUIRED TO APPROACH THE INTERIM FINANCE COMMITTEE FOR AN ALLOCATION FROM THE CONTINGENCY FUND BASED ON A PLAN SUPPORTED BY THE APPROVED TAX PACKAGE.
ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
Mr. Stevens distributed a document titled “Potential General Fund Actions 2003‑05 Surplus Funds” (Exhibit G), which he indicated was the updated status sheet for the latest information the Fiscal Analysis Division staff had received on revenues and expenses. Pointing to the bottom of the first page, Mr. Stevens advised the members of the Committee that the estimated General Fund balance for fiscal year 2002‑03 was $101,868,471, which was above the 5 percent ending fund balance requirement.
The second page of the document included revenues and expenses for both years of the biennium. Mr. Stevens pointed out that the second line under Expenses showed the Department of Taxation’s operational cost item, for example, $12,500,000 in fiscal year 2003-04 and $20 million in fiscal year 2004-05.
Moving on Mr. Stevens indicated that the fiscal impact of the bills passed through May 24, 2003, was listed under the heading, Budget Actions to Date, and showed $8,211,205 in the first year of the biennium and $111,069 in the second year. Mr. Stevens explained that while the Governor recommended $8.2 million in fiscal year 2003, the effective date was changed to 2004, which was the reason it was listed under Expenses.
Mr. Stevens explained that budget closings to date, outside of the Distributive School Account (DSA) and the UCCSN closings, showed a negative $30,046,144 in the first year of the biennium and a negative $27,772,718 in the second year. Mr. Stevens explained that the amount of money for the UCCSN closings was almost completely offset by revenue listed under the heading, Potential Ways and Means Revenue Actions.
Additionally, Mr. Stevens explained that the additional money required to pay the state subsidy for state retirees, based on the Governor’s recommendation, was listed as $1,630,286 in the first year of the biennium and $1,594,229 in the second year.
Mr. Stevens indicated that under the heading Potential Budget Actions, $2 million for Transfer to the Disaster Relief Fund was eliminated based on interest from the Rainy Day Fund. Additionally, the Distributive School Account Closings of $1,069,010 in the first year of the biennium and $28,749,092 in the second year, and a salary increase of $13,832,378 for all other employee groups in the second year, were based on a 0.75 percent increase in salary above what was built into the Governor’s budget in the first year of the biennium and a 2.0 percent salary increase for all employee groups in the second year.
Mr. Stevens pointed out that assumptions listed in the document included the costs for S.B. 191, which had been built into the document but had not yet been processed by the Committee. Additionally, $1.8 million had been included in the first year of the biennium for S.B. 499that would provide allocations to state entities for radio system costs, infrastructure upgrades, and user equipment.
Assumptions had also been made that the Legislature would utilize flexible federal funding for essential state services recently approved by Congress. Mr. Stevens indicated he believed a proposal would be made to provide funds in the Distributive School Account to offset General Fund appropriations. Additionally, Congress had approved increased federal financial participation rates in Medicaid. While an actual decision had not yet been reached on that funding, Mr. Stevens indicated he believed that the Governor had proposed to let the monies accrue in the Intergovernmental Transfer Account to build a reserve that could be accessed if a situation occurred that required additional funding during the interim.
Mr. Stevens also indicated that the $50 million transfer to the Rainy Day Fund recommended by the Governor in 2005 was proposed to be reduced to $30 million, which explained why a negative $20 million to amend the Rainy Day Fund transfer appeared in the second year of the biennium and a $50 million transfer to the Rainy Day Fund appeared under the heading, Expenses. Assumptions also included a $250,000 appropriation for S.B. 258 in the first year of the biennium, and $98,711 for the Legislative Retirement Administration in the first year of the biennium.
Mr. Stevens advised the members of the Committee that based on the assumptions, $349,917,457 in additional revenue was required in the first year of the biennium and about $509,126,370 in the second year of the biennium.
In response to a question from Assemblyman Marvel concerning where the Senate stood on the potential General Fund actions, Mr. Stevens advised that the Senate had similar data; however, both Committees had processed different bills so status sheets for the Assembly and the Senate were slightly off. Mr. Stevens indicated he believed the Senate status sheet totaled $859.1 million.
Chairman Arberry opened S.B. 499 for the Committee’s consideration.
Senate Bill 499 (1st Reprint): Makes appropriations to Interim Finance Committee for allocation to state entities for radio system costs, infrastructure upgrades and user equipment. (BDR S-1364)
Mr. Stevens advised that S.B. 499, which would provide allocations to state entities for radio system costs, infrastructure upgrades, and user equipment had been discussed earlier in the hearing. A suggestion had been made to reduce the appropriation by available forfeiture monies, which had been determined to be between $300,000 and $400,000. Mr. Stevens indicated that the appropriation could be reduced by a $300,000 authorization from the Forfeiture account, a figure with which the representatives of the Highway Patrol appeared to be comfortable. The appropriations from both the General Fund and the Highway Fund would be sent to the Interim Finance Committee. Mr. Hettrick suggested a provision that as forfeiture funds became available during the interim period, the State General Fund dollars would be reduced by that amount.
ASSEMBLYMAN HETTRICK MOVED TO AMEND AND DO PASS S.B. 499 AS PROPOSED.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED. (Speaker Perkins was not present for the vote.)
Chairman Arberry recessed the hearing at 10:20 a.m.
RESPECTFULLY SUBMITTED
Connie Davis, Transcribing Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: