MINUTES OF THE
SENATE Committee on Finance
Seventy-second Session
May 24, 2003
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:17 a.m. on Thursday, May 24, 2003, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Dean A. Rhoads
Senator Barbara K. Cegavske
Senator Sandra J. Tiffany
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATORS PRESENT:
Assemblyman Richard D. Perkins, Clark County Assembly District No. 23
Senator Maurice E. Washington, Washoe County Senatorial District No. 2
Senator Randolph J. Townsend, Washoe County Senatorial District No. 4
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Susan E. Scholley, Senior Research Analyst
Michael Archer, Committee Secretary
OTHERS PRESENT:
Lucille Lusk, Lobbyist, Nevada Concerned Citizens
David K. Schumann, Lobbyist, Nevada Committee for Full Statehood
Dr. Jane A. Nichols, Chancellor, System Administration Office, University and Community College System of Nevada
Thalia M. Dondero, Board of Regents, University and Community College System of Nevada
Dr. James Richardson, Lobbyist, Nevada Faculty Alliance
Scott G. MacKenzie, Lobbyist, Executive Director, State of Nevada Employees Association
Robert E. Romer, Lobbyist, State of Nevada Employees Association
Diane R. Comeaux, Deputy Administrator, Division of Child and Family Services, Department of Human Resources
Joyce Haldeman, Lobbyist, Clark County School District
Alfredo Alonso, Lobbyist, Nevada Pari-Mutuel Wagering System
Michael Hillerby, Deputy Chief of Staff, Office of the Governor
Dave Hosmer, Chief, Nevada Highway Patrol, Department of Public Safety
Jim J. Avance, Lobbyist, Nevada Marine Association
John P. Comeaux, Director, Department of Administration
Senator Raggio:
Does staff have a report for us this morning?
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative counsel Bureau:
I have distributed to the committee a current listing of the bills that are in the Senate Committee on Finance (Exhibit C). It indicates which bills are scheduled to be heard, which have not been heard, and which bills action has been taken on. The unappropriated General Fund balance shows an accumulative projected shortfall of $829 million.
Senator Raggio:
Does that include the $50 million to begin restoration of the Fund to Stabilize the Operation of State Government?
Mr. Ghiggeri:
That is correct.
Senator Rhoads:
Are you aware of the $10 billion that goes back to the states, and from which we should receive $69 million?
Mr. Ghiggeri:
You are referring to Title IV of the federal Jobs and Growth Tax Relief Reconciliation Act of 2003 (H.R. 2) Nevada will receive approximately $100 million; $67 million of that is not tied to any particular purpose, and the remaining funding, of about $36 million, is due for an increased matching rate for Medicaid. None of this is reflected in the figures I just went over.
Senator Raggio:
We are looking at this as a potential source of revenue. The language in that bill indicates a certain amount of it would be mandated for Medicaid, and additional language states it is to help states with unfunded federal mandates. Based on these projected shortfalls, where do we stand on the balanced budget?
Mr. Ghiggeri:
I am not sure because we do not know what tax package, or mixture of tax packages, will be approved. In order to balance the budget there is a need for $393 million of new revenue in fiscal year (FY) 2004.
Senator Raggio:
We will open the hearing on Senate Joint Resolution (S.J.R.) 11.
SENATE JOINT RESOLUTION 11: Proposes to amend Nevada Constitution to provide for payment of compensation to members of Legislature for each day of service during regular and special sessions and to provide for payment of reasonable allowances to such members for postage, express charges, newspapers, telecommunications and stationery. (BDR C-1353)
Lucille Lusk, Lobbyist, Nevada Concerned Citizens:
I support a constitutional amendment that would extend the pay of Legislators. We appreciate those who have kept faith with the Nevada Constitution and not tried to circumvent it through accounting practices. I ask the committee to amend the language so that there will be a 20-day limit on special sessions. Please see my handout of the proposed amendment (Exhibit D). There is currently no time limit on a special session. This proposal adds language to Section 9 of the Nevada Constitution that would limit special sessions to 20 days.
Senator Raggio:
The Governor currently has the right to not only call a special session, but to limit the length of that session. Is this change really needed?
Ms. Lusk:
While passing a constitutional provision that specifies Legislators are paid for each day of service, it is important for the people to know how many days of service that will be. If he chose, the Governor could call serial special sessions. I do not think this complicates the issue, but rather clarifies it for the voters.
David K. Schumann, Lobbyist, Nevada Committee for Full Statehood:
I support Ms. Lusk’s proposal to constitutionally limit special sessions to 20 days. It will provide discipline for both the Legislature and Governor. I would further suggest that the amount of compensation should be determined solely by the Legislature during a regular session, and not by some anonymous commission. The Congress uses a commission for this purpose and it is wrong.
Senator Cegavske:
Historically, have we ever gone over 20 days in a special session? Also, if you limited it to 20 days and it ended without completion of the work, would you have to reconvene another special session?
Senator Raggio:
I do not recall a special session that lasted more than a few days. In the situation you described, we would have to reconvene another special session. We will close the hearing on S.J.R. 11, and open the hearing on Assembly Bill (A.B.) 203.
ASSEMBLY BILL 203 (1st Reprint): Creates Committee to Evaluate Higher Education Programs. (BDR S-809)
Assemblyman Richard D. Perkins, Clark County Assembly District No. 23:
In the year 2000, 19.3 percent of Nevada adults over the age of 25 earned a bachelor or advanced degree, but the national average was 25.6 percent. If we want Nevada to participate in the growing knowledge-based economy, with high-income jobs, we must pay attention to these facts. Assembly Bill 203 calls for a committee to examine and evaluate existing and potential higher education programs, and recommend actions needed for a more efficient and effective higher education system. I see this bill as a companion bill to A.B. 148, which calls for a performance audit of the University and Community College System of Nevada (UCCSN).
ASSEMBLY BILL 148: Requires Legislative Auditor to conduct audit of University and Community College System of Nevada and Board of Regents of University of Nevada. (BDR S-808)
We are trying to go back to review every program that is offered by every institution in our State to see whether it is still consistent with where we are going as Nevadans.
Senator Raggio:
How do you envision A.B. 203 as coordinating with A.B. 148?
Assemblyman Perkins:
A.B. 148 will coordinate in some ways but is distinctly different in that the performance audit will be conducted under the audit standards that we have prescribed in Nevada Revised Statute (NRS) 218. Assembly Bill 203 is more along the lines of what UCCSN has already done, and “piggybacks” on the studies of where higher education is going in Nevada and what programs should be offered.
Senator Raggio:
This would determine whether it is feasible to reallocate existing resources within institutions, and whether the revenues from fees and appropriations are being efficiently distributed internally. Does this cross over into what the audit would do?
Assemblyman Perkins:
When this Legislature authorizes an appropriation to UCCSN, we need to know they follow what we intended them to do.
Senator Tiffany:
We have some oversight on an Executive Branch committee, but Legislators can only be advisory. Will this also apply to the committee described in A.B. 203? Also, is this considered an interim study, because I see a sunset date on this?
Senator Raggio:
We had a similar committee composition when we studied fiscal equity and formula funding for UCCSN. We will have our Legal Division check this out.
Assemblyman Perkins:
I look at this as a Legislative committee, and we are inviting the Executive Branch to participate. I would not characterize this as an interim study.
Senator Tiffany:
Is the $250,000 in this bill to be used for paying the educational and financial consultants mentioned in Section 4, Lines 12 and 13?
Assemblyman Perkins:
Yes. We are going to need experts in this field in order to properly evaluate all the programs.
Senator Tiffany:
Will the money to pay the Legislators come out of the fund that we also use for the interim study, as opposed to taking it from the $250,000?
Assemblyman Perkins:
It could come from either source; however, I do see the $250,000 being used for the consultants.
Dr. Jane A. Nichols, Chancellor, System Administration Office, University and Community College System of Nevada:
I am here to speak in favor of A.B. 203. The advantage of this legislation is that it would allow the Legislature, the Governor, and the UCCSN Board of Regents to come together to create a common vision and direction for higher education in this State. In response to Senator Tiffany’s question about the division of powers on the proposed committee, we view this committee as advisory. The Board of Regents would be happy to receive reports from the commission to help make more informed decisions on the needs of higher education, and have no objection.
Thalia M. Dondero, Board of Regents, University and Community College System of Nevada:
I support A.B. 203, but I have a concern about who would chair that committee and whether that person would be able to properly evaluate all the information. Regarding the reallocation of existing resources, I assume the foundation, research, and grant money would not be included in that reallocation.
Dr. James Richardson, Lobbyist, Nevada Faculty Alliance:
I am here to support A.B. 203. I would like to point out that this is a companion bill to the formula and equity study that was done years ago. The structure of that committee was very similar to the one proposed here. We hope the Governor would honor the faculty by putting a member on this committee, as he did on the formula study.
Senator Raggio:
Does not Section 3 state that the committee should have two persons who are employed by UCCSN?
Dr. Richardson:
Yes, I was appointed as a voting member. I am not seeking an amendment to this bill.
Senator Raggio:
We have a number of bills with appropriations that are not included in the budget, and we will have to take a look at all these bills to see where we are on our funding. This will be one of those bills.
Senator Raggio:
We will now move on to Assembly Bill 392.
ASSEMBLY BILL 392 (3rd Reprint): Increases amount of longevity payments to state employees. (BDR 23-964)
Scott G. MacKenzie, Lobbyist, Executive Director, State of Nevada Employees Association:
I am here because Assemblyman Arberry could not attend. This bill increases the amount of longevity pay for State workers. The bill proposes a $25 increase in the rate of longevity pay for employees with 17 through 23 years of continuous service, and a $50 increase with 24 or more years of continuous service up to a maximum of 30 years. The additional costs for the number of employees at that level has multiplied for each year of service, as represented on the “City and County Government Longevity Benefits” table in my handout (Exhibit E). Assuming there is no change in the number of employees eligible for the longevity, the projected increase for one semi-annual payment for the period July 1, 2003, to December 31, 2003, would be $350,925. The period January 2004 through June 2004 is paid in July 2004; therefore, the additional expense for that period is projected in FY 2005. The cumulative total for FY 2004-2005 is $775,650.
Senator Raggio:
What is the significance of excluding the UCCSN employees from this? Also, why is the word “increases” deleted and replaced with the word “payments” in the current proposal?
Robert E. Romer, Lobbyist, State of Nevada Employees Association:
The UCCSN employees are excluded in NRS 284.179. The word was changed from “increases” to “payments” because the Legal Division thought it was a better definition.
Senator Raggio:
Will this fiscal note still be applicable to the classified employees?
Mr. Romer:
Yes.
Senator Raggio:
We will now move on to A.B. 470.
ASSEMBLY BILL 470: Extends date of reversion of appropriation for one-time costs of transfer of certain child welfare services to Clark County and Washoe County. (BDR S-1260)
Diane R.Comeaux, Deputy Administrator, Division of Child and Family Services, Department of Human Resources:
Please refer to my written testimony (Exhibit F). I am here to support A.B. 470. Assembly Bill No. 1 of the 17th Special Session allowed for the transfer of certain child welfare services to counties with a population of 100,000 or more. Approval of A.B. 470 would allow the division to balance forward $393,929 not used for expenditures in FY 2004-2005 for qualified staff transferring to Clark County. If the Clark County information system is not implemented by the close of FY 2003, the division would request any remaining funds to be balanced forward to FY 2004.
Senator Tiffany:
Why did this come up as a bill instead of being in the budget?
Senator Raggio:
This is an FY 2003 expenditure, and Clark County is asking that if they do not expend the funds by the close of FY 2003, they will have the authority to do so in FY 2004. It is not an addition to the budget.
Senator Tiffany:
Can it be used as part of the budget that exists?
Senator Raggio:
This is not uncommon to allow them to extend the funding in case they have not been able to expend it.
Ms. Comeaux:
The only thing that will be extended in the reversion is the $469,000 we appropriated for retirement buy-out costs. Because we delayed implementation of systems integration in Clark County, we are requesting those funds that were designated for Clark County be balanced forward into the next year which is when we are going to do the integration.
Senator Tiffany:
We gave the Department of Information Technology (DoIT) an upgrade on the mainframes, so they should not have any problems.
Ms. Comeaux:
I understand that, but it will take DoIT a while to implement that, and we are planning on going live in August 2003.
Senator Raggio:
We will close the hearing on A.B. 470.
SENATOR COFFIN MOVED TO DO PASS A.B. 470.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
We will now go back to Senate Joint Resolution (S.J.R.) 11. I think it would be better to process this bill as it is, without adding something in here about limiting the terms of a special session. I cannot imagine a Governor calling a special session for any purpose that would last more than 20 days. I suppose there could be something so complex someday that would require a special session to exceed that time frame. What does the committee have to say?
Senator Rawson:
Assembly Joint Resolution (A.J.R.) 13 allows the Legislature to call a special session and limits it to 20 days. It is an issue that will probably end up on the ballot, so it is probably not necessary to put it in this bill.
ASSEMBLY JOINT RESOLUTION 13 (1st Reprint):: Proposes to amend Nevada Constitution to revise provisions regarding special sessions of Legislature. (BDR C-313)
SENATOR RAWSON MOVED TO DO PASS S.J.R. 11.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
Senator Raggio:
We will now look at A.B. 254. This appropriates $156,500 to make up for a shortfall in the automation division for the upgrade and expansion of a toll-free telephone system, and appropriates $146,800 to cover the shortfall for expenses related to storage space. There are several other items on the list that we covered during a previous hearing.
ASSEMBLY BILL 254 (1st Reprint): Makes supplemental appropriations to Department of Motor Vehicles for certain unanticipated shortfalls in money for Fiscal Year 2002-2003. (BDR S-1232)
SENATOR RAWSON MOVED TO DO PASS A.B. 254.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
Senator Raggio:
We will look at S.B. 252.
SENATE BILL 252: Makes various changes concerning charter schools. (BDR 34-140)
Susan E. Scholley, Senior Research Analyst, Research division, Legislative Counsel Bureau:
I direct your attention to my handout, “Revised – Proposed Amendment to Senate Bill No. 252” (Exhibit G). The amendments proposed in S.B. 252 would remove a provision that makes the State Board of Education the sole sponsor of charter schools. Instead, applicants would be permitted to apply to either a school district or to the State Board of Education. The State Board of Education would be fully responsible for the oversight of the schools it sponsored, except as otherwise provided in statute. The amended version of this bill would also delete the current provisions that a committee forming a charter school would be limited to submitting an application only to the State Board of Education for special education charter schools. It would retain the current proposal that a school district “may accept” an application, while the State Board of Education “shall accept” an application.
Senator Raggio:
What does it mean in the language of bill in which it says “shall accept”? Is that the same as “approve”?
Ms. Scholley:
Yes, that is the same idea. The school districts would have the discretion to disapprove an application, whereas the State Board of Education would be obligated to approve the application if it met the requirements.
The amendments to this bill help clarify that if a charter school submits a new application to expand a grade level, it could use the same governing body as an existing charter school. It would also clarify that members of the governing body of a charter school may receive a salary, travel expenses, and subsistence in the same way that State Board of Education trustees currently do. It provides a cap of one meeting per month.
The amendment will provide that governing body members are public officers per NRS 281.4365. It will require the sponsor of a charter school to provide a list of administrative services and training that will be provided by that sponsor to the charter school. This changes the format from a “reimbursement” to a “withholding” of the administrative costs of such services from the apportionment.
Senator Raggio:
Is the amount withheld from the apportionment currently 2 percent?
Ms. Scholley:
For school districts it is presently 2 percent for the first year, and 1 percent for the second year and each year thereafter. The State Board of Education would have a 2 percent withholding in the first year, and 1.5 percent for the second year and thereafter.
Senator Raggio:
There has been some discussion about this with the State Board of Education. Has this now resulted in some compromise agreement?
Senator Maurice E. Washington, Washoe County Senatorial District No. 2:
Yes.
Ms. Scholley:
I want to clarify that the reimbursement would be upon the request of the sponsor.Further, the amendmentprovides that charter schools sponsored by a school district and the State Board of Education would set aside 0.25 percent of their apportionment for deposit into the revolving fund for charter schools. The amendment deletes provisions that authorize the governing body of a charter school to appeal a decision of revocation to an arbitrator, and it removes the role of the State Board of Education from the decision-making process. Additionally, the amendment will require the Department of Education to provide training for governing body members on Nevada education law and related matters. It would also change the time frame for a school district review of a charter school application, and require charter school employees to have background investigations.
Senator Cegavske:
Why did we come up with the 0.25 percent for deposit into the revolving fund for charter schools? Does the State Board of Education currently get any money for overseeing or administering charter schools?
Senator Washington:
Currently the State Board of Education does not receive any fees. The new provision was worked out with one of the trustee members for the State Board of Education to compensate them for their efforts in overseeing charter schools. The agreement was to take 0.25 percent for that service, and have the other 0.25 percent applied to the revolving Fund.
Senator Cegavske:
If this passes, does the 2 percent still stay with the school district?
Senator washington:
Yes. If the school district is the sponsor of the charter school, the 2 percent goes with the district. If the State Board of Education becomes the sponsor, it is 2.5 percent. This is because the two 0.25 percent withholdings are added.
Joyce Haldeman, Lobbyist, Clark County School District:
I think we have made great progress on this bill. We have another meeting again tomorrow with the staff, and we feel we will have a final resolution on these issues.
Senator Raggio:
We need to process this bill because we are down to the last few days. Do we have an amendment drafted yet?
Ms. Scholley:
We did some revisions yesterday; legal division will not have it ready before Monday.
Senator Washington:
There are just some small revisions left.
Senator Raggio:
Then we will not act on this bill until next Tuesday.
Senator Raggio:
We will now look at S.B. 3.
SENATE BILL 3: Reserves a portion of certain gaming license fees from off-track pari-mutuel wagering to augment purses for horse racing in certain counties. (BDR 41-41)
Alfredo Alonso, Lobbyist, Nevada Pari-Mutuel Wagering System:
Please refer to my handout “Amendment to S.B. 3” (Exhibit H). Over the years pari-mutuels in Nevada have lost out in competition with other states. The rural counties now have almost no pari-mutuel racing. This amendment will allow other states and countries to wager with Nevada race books through permitted communications technology. Also, the Nevada Gaming Commission would have the authority to exempt certain rebates, refunds, payoffs, and bonuses in order to market pari-mutuel betting in Nevada. This bill will result in projected new taxes of $5 million to $10 million per year.
Senator Raggio:
Does the Nevada Gaming Commission have any concern about your proposed amendment?
Mr. Alonso
Initially there was concern that this would delve into the Internet gaming area. We have subsequently had discussions with the commission, and they now have no opposition to the bill.
Senator Raggio:
Should we amend it to include mule racing?
Senator Rhoads:
Yes, in Winnemucca they have mule racing.
Senator Raggio:
We would have to add the mule racing language; do I hear a motion?
Senator Cegavske:
Could you refresh my memory on the fiscal note that goes with this?
Senator Rhoads:
We decided to have 1 percent of the betting “handle” go to the counties. Initially we were looking at $216,000, but now we think it will generate more.
Senator Raggio:
Where is the 1 percent shown in this amendment?
Mr. Alonso:
It is not in here. It was part of a discussion I had with Senator Rhoads. We can add that language to this amendment.
Senator Raggio:
I think that should be part of the amendment.
SENATOR RHOADS MOVED TO AMEND DO PASS S.B. 3 INCLUDING A PROVISION TO PROVIDE FOR MULE RACING AND 1 PERCENT OF THE AMOUNT BET GOING TO THE COUNTIES.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
We will now look at S.B. 51.
SENATE BILL 51: Extends date by which certain prerequisites must be satisfied for State Board of Finance to issue general obligation bonds to assist in construction of California Immigrant Trail Interpretive Center in Elko County. (BDR S-674)
Senator Rhoads:
This is an interpretive center in Elko County. It will cost $15 million by the time it is completed. We have city, county, and federal funds committed. This bill is to extend the completion date of the project from 2003 to 2005, and also to allow the county to use in-kind work to contribute to their matching federal funds.
Senator Raggio:
We approved this in 1999 and the federal government will own and operate the center. The amendment is necessary to allow in-kind work in lieu of funds. The state treasurer has indicated in a memo to this committee dated May 21, 2003, (Exhibit I), that, although the legislation is not included in the proposed budget, the debt-capacity mode was developed on maximizing 16 cents of ad volorem tax.
In a worst-case scenario, if $3 million in bonds were issued on July 1, 2003, the Bond Interest and Redemption Account would be charged approximately $215,000 for debt service, and the balance of the principal and interest would be paid in the subsequent 18 years. Bond-issuance costs could be no more than $60,000 in the year of issuance, so it would be based upon the availability at the time the bonds were issued.
SENATOR RHOADS MOVED TO AMEND AND DO PASS S.B. 51 AS AMENDED.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
We need to look again at S.B. 208. We approved this on March 10, 2003, with information that 25 percent of the $490,000 in interest was available for loans to nursing students. Since then our staff has spoken to the State Health Division and found that amount would now be 25 percent of $232,000. This will only produce about $58,000 in funds for these loans. The appropriate thing to do would be to replace our action on the amendment with the appropriation from the Public Health Trust Fund in that amount.
SENATE BILL 208: Requires the transfer of money from Fund for School Improvement to University and Community College System of Nevada to provide scholarships for students pursuing degrees in teaching BDR S‑1033)
Mr. Ghiggeri:
In the amendment that we had previously requested, the funds were to be repaid back to the nursing loan program instead of the Public Health Trust Fund. That would provide them with this on a revolving basis, and they can reinitiate new loans to other students as the loans are repaid.
SENATOR MATHEWS MOVED TO RESCIND THE ACTION WITH THE AMENDMENT THAT WAS PROPOSED, AND TO AMEND AND DO PASS THE BILL WITH THE PROVISION FOR AN APPROPRIATION OF $122,000 FROM THE TRUST FUND FOR PUBLIC HEALTH UPON PASSAGE AND APPROVAL, AND REPAYMENTS WOULD GO BACK TO THE PROGRAM.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
We will now look at S.B. 230. This relates to the transportation of pupils and requires the State Board of Education to adopt regulations prescribing a safety program for the evacuation of a school bus, and also requires bus drivers to be certified in the administration of cardio-pulmonary resuscitation
SENATE BILL 230: Makes various changes regarding transportation of pupils. (BDR 34-641)
Senator Cegavske:
Is this for transportation of students with disabilities to any school including charter schools?
Senator Raggio:
Yes.
SENATOR CEGAVSKE MOVED TO DO PASS S.B. 230.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
We will now discuss the radio communications problem some State agencies are experiencing.
Michael Hillerby, Deputy Chief of Staff, Office of the Governor:
The State has traditionally gone two different ways to achieve radio communication among its agencies. The public safety agencies use a VHF high‑band technology. The Nevada Department of Transportation (NDOT) uses 800 megahertz (MHz) technology. The two are essentially incompatible. During an audit of the Department of Public Safety, it was discovered that their communications system contained approximately 150 frequencies that are not licensed by the Federal Communications Commission (FCC).
We put together an interagency team that communicated with the FCC. It was determined we would not be able to get the number of frequencies we needed licensed and operational with this system. Also, the system was running at twice the power it should be, thus affecting the frequencies of others. Please refer to the “FCC Regulatory Compliance Plan for the State of Nevada Department of Public Safety Radio Communications” (Exhibit J). Part of the compliance plan is to ask the State Legislature for an appropriation to move the Department of Public Safety, in particular the Nevada Highway Patrol (NHP), to an 800 MHz radio system. A major problem with doing this is that it would leave many rural areas without communications.
Please refer to the “Radio System Cost Summaries” (Exhibit K). We want to purchase equipment that will be compatible with the Project 25 (P25) interoperability digital standard adopted by the FCC. The Governor is very frustrated by this problem, but our major concern is for the safety of our citizens and first responders. We request that you make an appropriation to the Interim Finance Committee (IFC) and that we can access periodically for funds as we build the new system.
Senator Raggio:
If we follow this recommendation, where will it get us in the end? What will be the interoperability of the system at that point?
Mr. Hillerby:
There are two issues: licensing the frequencies on the VHF system, or moving to the 800 MHz systems. The question of interoperability involves P25 technologies. None of the radios we have at NHP, NDOT, and the local jurisdictions are currently compatible with one another. This technology is just now entering the market and will be available in the next year. As an intermediate step, if we can find enough licensable frequencies to make the VHF system work for the next 2 years, we will go that direction until that P25 standard is further developed and more of that equipment becomes available. Some vendors are offering stand-alone interoperability solutions that are computer-based and would allow multiple users on different kinds of systems to communicate with one another. We may get some funding through the Federal Emergency Management Agency and Homeland Security grants to help the situation in rural areas.
Senator Raggio:
How will this get us toward the 800 MHz system?
Mr. Hillerby:
This appropriation would replace all of the NHP equipment with 800 MHz‑compatible equipment, put them on the NDOT system, build six new towers to make the 800 MHz systems statewide compatible, and allow us to be fully licensed. The 800 MHz system today is not compatible with the VHF system used by rural areas. For the short term, the NHP troopers will need to carry two radios in order to communicate with some rural areas.
Senator Raggio:
I recall how difficult it was deciding on the appropriateness of the communication system you currently use, and now we have to replace it already. How long will this new system last?
Mr. Hillerby:
We are distressed that the systems we then decided upon turned out to be so incompatible. If we wait and buy P25 technology, all the radios will be interoperable and compatible statewide. We will probably continue to come to future legislatures, as will the rural areas, because we will eventually have to replace every radio in the state.
Dave Hosmer, Chief, Nevada Highway Patrol, Department of Public Safety:
I cannot say that this will be the ultimate fix for this problem because technologies do change. To get every radio in the state compatible with all the others will take new technology that we do not have yet.
Senator Raggio:
Does the Washoe County Sheriffs office already use 800 MHz radios?
Mr. Hosmer:
Yes, and Henderson and North Las Vegas are also on 800 MHz. Las Vegas Metropolitan Police are going to 700 MHz radios, which are probably not compatible with other systems. Sometimes even 800 MHz radios provided by different vendors are not compatible with one another.
Senator Raggio:
How, then, will we get these radios to be compatible?
Mr. Hosmer:
The immediate fix is to keep the existing 150 MHz radios we have in our cars, and if we go with the 800 MHz radios, we will need to keep dual radios in the cars. It is not efficient, but it will work to cover us with almost everyone in the State emergency agency and the U.S. Forest Service.
Senator Raggio:
How will you communicate with Las Vegas Metropolitan police?
Mr. Hosmer:
They are currently on the 150 MHz, but they will not be going to 700 MHz for 3 to 5 years. By that time, the 800 and 700 MHz radios should be compatible due to newer technology.
Senator Raggio:
Is there any reasonable alternative to what you are proposing? How will this utilization of $50 million from the Highway Fund impact other projects that need to be matched with State funding for construction?
Mr. Hillerby:
After our conversations with the FCC, I believe this is the best alternative available to us. In our discussion with NDOT, it will not adversely impact any of the scheduled major construction projects. This is more of a cash-flow issue for them. It does, however, have the potential to impact some of the smaller highway maintenance projects.
Senator Raggio:
Is this the fix recommended by the Governor?
Mr. Hillerby:
Yes. The FCC has been very clear that they want us off the unlicensed frequencies immediately. They want us to move toward the 700 and 800 MHz systems.
Senator Coffin:
We must move on this. The dual use of radios is cumbersome, but it does provide communications for our emergency personnel in most of the rural areas.
Senator Tiffany:
Is the reason we use 150 MHz radios to reach the rural areas?
Mr. Hosmer:
Yes; the NDOT system would need additional towers constructed to resolve this problem.
Senator Tiffany:
Do you believe the five proposed towers would solve the problem?
Mr. Hosmer:
Yes.
Senator Tiffany:
Is there interoperability, or an interpreter, between the 150 MHz and the 800 MHz systems? Is there a stand-alone third-party interpreter right now?
Mr. Hosmer:
There is currently a gateway between them, as in the case of Henderson, but it is singular-channel and is very limited as to the number of users it can accommodate.
Senator Tiffany:
Is the reason for the 700 MHz system to produce new channels from the FCC? Is the P25 the standard between the 700 MHz and 800 MHz systems?
Mr. Hosmer:
The answer is yes to both questions.
Senator Tiffany:
Does this mean the 150 MHz radios will never be compatible with the other systems?
Mr. Hillerby:
Regardless of the standard, all the radio equipment would have to be replaced before compatibility can be achieved.
Senator Tiffany:
Did you ever look into purchasing 150 MHz channels?
Mr. Hillerby:
We are currently looking into that. The complication is that not all those frequencies are located in areas where we need them.
Senator Tiffany:
Can we get an exemption from the FCC due to this emergency situation? Can we ask the attorney general to take some legal action on this?
Mr. Hillerby:
The FCC will not grant us an exemption. We have had the Office of the Attorney General involved in our conversations with the FCC. This is a problem created by the State of Nevada, rather than the FCC, and they cannot give us permission to use these frequencies illegally.
Senator Tiffany:
Are those 800 MHz towers compatible with the 700 MHz communications system?
Mr. Hillerby:
Yes.
Senator Mathews:
Will homeland security be compromised because of this problem? Have you figured out who was responsible for making these poor decisions regarding your current communications system?
Mr. Hosmer:
We have briefed the Special Advisor on Homeland Security and we are working with him to ensure we do not have a breach of homeland security.
Senator Rawson:
The FCC told us to stop using these frequencies, and if we do not put a plan forward this session, they will start to fine us. This may end up doubling the cost of the replacement system.
Senator Cegavske:
Do we have to use matching General Fund money, or can we just use federal funding?
Mr. Ghiggeri:
If they were purchasing radios for General Fund agencies, like the Department of Parole and Probation, they would have to use General Fund dollars to do that. The NHP would use Highway Fund dollars.
Mr. Hillerby:
We would like to come back to the IFC with regular updates before you authorize the money.
SENATOR RAWSON MOVED TO AUTHORIZE A BILL DRAFT TO PROVIDE APPROPRIATIONS FOR THE PURPOSES OF MOVING TOWARD AN 800 MHZ RADIO SYSTEM WITH A REQUIREMENT THAT THE IFC APPROVE THE DISPOSITION OF THESE FUNDS. (LATER INTRODUCED AS SENATE BILL 499)
SENATOR TIFFANY SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
Let us revisit S.B. 230. Please see the memo from Mindy Braun, Education Program Analyst, Fiscal Analysis Decision, Legislative Counsel Bureau, dated May 24, 2003, (Exhibit L). The language has been changed to indicate the training should be given annually, and at no cost to the drivers. Additionally, changes are made clarifying driver discretion with regard to the safety of the pupil. Does any of this change the fiscal notes?
Mr. Ghiggeri:
It does not.
Senator Cegavske:
Clark County is already training on this. I would suggest not making any amendments to the bill.
Senator Raggio:
We will leave it as it is and they can address that amendment if they choose in the Assembly. We will now discuss S.B. 464. The problem the committee is having with this bill is that there is no exemption for the casual sale of a vessel.
SENATE BILL 464 (1st Reprint):Revises provisions relating to vessels. (BDR 32‑1240)
Jim J. Avance, Lobbyist, Nevada Marine Association:
That is not an integral part of the bill and I can offer you an amendment to take it out. Please look at my handout, “Proposed Amendments to S.B. 464 First Reprint” (Exhibit M).
Senator Mathews:
We have to make this palatable to everyone.
Mr. Avance:
In the case of an automobile, there is no such thing as a casual sale; taxes are paid on every transaction. In order to pass this bill, I will delete Section 4, which is the part of the bill that calls for taxing the sale of boats between private individuals. The Department of Taxation wants us to keep the other sections regarding taxation, and my clients would appreciate the remaining parts also be kept.
Senator Raggio:
What is the result of the remaining parts of the bill?
Mr. Avance:
One part would allow for the sale of vessels to out-of-state residents who would not have to pay out-of-state residents’ tax on the purchase if they move the vessel out of Nevada within 15 days. The bill also provides for Department of Taxation tax on vessels that are federally registered. Another provision would allow the boat dealer to deduct the cost of a boat he takes in trade from the selling price for tax purposes. This is fair because when he resells the boat, he will pay that tax.
Senator Cegavske:
Will we be amending Section 3 and deleting Section 4?
Senator Raggio:
Yes.
SENATOR RHOADS MOVED TO AMEND AND DO PASS S.B. 464 TO DELETE SECTION 4, AND AMEND SECTION 3 WITH THE DEFINITION OF “VESSEL,” AND AMEND SECTION 13 TO DELETE ALL REFERENCES TO SECTION 4.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Mathews:
I may vote against this on the Senate floor.
Senator Raggio:
I want to remind the committee of the rule to advise the chairman if you intend to vote against your action on the Senate floor. We will now look at A.B. 395. We had previous testimony on this bill. It is intended to allow for matching federal Medicaid funds to provide rate increases. These increases are limited by the funding available. We recommended an amendment stating that if at some future date it is determined the tax could no longer be utilized for this match, we would roll back the rate increases. There was also an amendment to exempt the State Veterans’ Home.
ASSEMBLY BILL 395 (1st Reprint): Provides for assessment of fee on facilities for intermediate care and facilities for skilled nursing. (BDR 38-999)
Mr. Ghiggeri:
Under Section 5 of the bill we have received suggested language which would change the wording to indicate a “nursing facility” means “a facility for intermediate care or facility for skilled nursing, but does not include any nursing facility owned or operated by the State of Nevada or any of its political subdivisions.” This language covers the State Veterans’ Home.
SENATOR RAWSON MOVED TO AMEND AND DO PASS A.B. 395 AS DESCRIBED.
SENATOR TIFFANY SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS MATHEWS AND CEGAVSKE VOTED NO.)
*****
Senator Coffin:
I am curious why they voted no.
Senator Raggio:
They do not have to tell us why. We will now cover A.B. 286. We heard this bill and a proposed amendment earlier. What would that amendment do?
ASSEMBLY BILL 286: Revises provisions governing health insurance for retired officers and employees of local governments. (BDR 23-1124)
Dr. Richardson:
The amendment would have the effect of deleting the portions of the bill that force commingling of non-State retirees’ health insurance with the State pool. The requirement for the local government to pay the same subsidy for retirees as is paid by the State is good public policy. There is also a provision here that would allow non-State retirees, who come into the State pool, to be allowed back into their local government health plan.
Senator Raggio:
Our major concern is that this was a new concept to deny separation of these groups. The intent of this amendment is to eliminate the requirement for them to commingle the State and non-State participants in the program. That eliminates the fiscal impact of the bill and the need for an additional open enrollment. We would like to see the amendment before we take it to the Senate floor.
SENATOR COFFIN MOVED TO AMEND AND DO PASS A.B. 286.
SENATOR CEGAVSKE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
ENATOR CEGAVSKE
Senator Raggio:
Please look at the second reprint of A.B. 353. When we heard this bill on May 15, 2003, we struck out all the language about the current membership on the UCCSN Board of Regents and retained only the part dealing with the form for informed consent of students with regard to credit card solicitations. The Assembly did not agree with our actions and retained all the language. I would recommend we not recede.
SENATOR RAWSON MOVED TO NOT RECEDE ON A.B. 353.
SENATOR CEGAVSKE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
We will now look at S.B. 439. The bill was amended to change the word “fireman” to “firefighter,” and to allow the justices to enter the Public Employees’ Retirement System without being reelected.
SENATE BILL 439 (1st Reprint): Makes various changes concerning Public Employees’ Retirement System and Judicial Retirement System. (BDR 23‑563)
SENATOR RAWSON MOVED TO CONCUR ON ASSEMBLY AMENDMENT NO. 781 TO S.B. 439.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
****
Senator Raggio:
I am going to assign a conference committee for A.B. 353. Senator Cegavske and Senator Coffin, will you serve on this?
Senator Coffin:
Yes.
Senator Cegavske:
Yes.
Senator Raggio:
We will now consider S.B. 381. Senator Rhoads, did you have something to say on this?
SENATE BILL 381: Authorizes state agencies to retain certain cost savings and use savings for training and equipment purchases. (BDR 31-936)
Senator Rhoads:
Mr. Comeaux and I have spoken, and he now seems satisfied with this.
John P. Comeaux, Director, Department of Administration:
What we recommended was to approach this on a pilot basis, and the way that should be done is to provide up to a dozen agency budget accounts that could qualify for this treatment. Going through the legislative auditor is a good way to do it. This would allow us to be sure this is administratively a good way to separate the savings that result in reversions due to gained efficiencies in their operations.
Senator Tiffany:
Did we already approve one agency to do this on their own?
Senator Rhoads:
That was the Department of Agriculture.
Senator Tiffany:
This is a policy change. I think procedure standards should be established because we budget these reversions and depend on them. I thought we had a merit system through the Department of Human Resources.
Mr. Comeaux:
We already have a provision in the statute that allows agencies to make recognition awards to employees, but these are not in cash. This is different than what Senator Rhoads is proposing here, which could provide important incentives, in the form of additional funds for training and the purchase of equipment, to an agency looking for ways to save the State money. Half the reversions would go to the Fund to Stabilize the Operation of State Government, but the other half would be available for use by that agency.
Senator Tiffany:
We should not be too casual about this. It is a major policy decision.
Senator Raggio:
What happens to the reversions?
Mr. Comeaux:
Regular reversions will continue to revert as they do now. Agencies that demonstrate there was a specific amount of savings attributable to an action that the agency took to improve efficiency and resulted in the savings will keep a share of those savings. But this would be subject to approval by the legislative auditor.
Senator Rhoads:
In most cases this is an incentive to the agencies.
Senator Raggio:
Under this bill, would the agency’s chief have to identify the savings that resulted?
Mr. Comeaux:
Yes, and also under this bill the legislative auditor would have to agree.
SENATOR RHOADS MOVED TO AMEND AND DO PASS S.B. 381.
SENATOR COFFIN SECONDED THE MOTION.
Senator Cegavske:
Are all your concerns alleviated about the fiscal note? Will we be seeing a substantial amount of decrease in revenue from lost reversions?
Mr. Comeaux:
We no longer have concerns about the fiscal note. To your second question, reversions should increase as a result of this and only the increase would be used.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
We will now take up A.B. 320.
ASSEMBLY BILL 320 (2nd Reprint): Makes various changes regarding malpractice. (BDR 57-868)
Senator Randolph J. Townsend, Washoe County Senatorial District No. 4:
There were components of this bill that were in question as a result of the processing of S.B. 122 and S.B. 250. We took language from both of those bills, as well as language that the Committee on Commerce and Labor chose to exclude, brought interested parties together, and went through this bill line by line to be sure there were not any policy changes that were in conflict with either one of those bills. As a result we now have unanimity.
SENATE BILL 122 (2nd Reprint): Makes various changes regarding malpractice insurance and actions. (BDR 57-265)
SENATE BILL 250 (1st Reprint): Revises various provisions relating to regulated businesses and professions. (BDR 57-835)
Section 10 of A.B 320 deals with continuity of care, standard contracts for medical malpractice insurance and health insurance. Section 12 of the bill discusses payment to health insurance carriers. The new language has to do with applying a payment penalty and allowing the commissioner to suspend an insurer’s Certificate of Authority.
Senator Raggio:
In Section 12, is the amended language in subsection 8, or somewhere else?
Senator Townsend:
Yes, the amended language allowing the commissioner to suspend a Certificate of Authority is found in Section 12, subsection 8, lines 13 through 16. Section 13 of the bill provides uniformity in the continuity of care among health care providers. Section 19 regards settlement and judgments that exceed the limits, and how commissioners shall review these judgments. Section 21 changes the language to clarify situations in which an insurer has a breach of professional duty against a patient, and if insurers set premiums for a policy for the practitioner at higher than the standard rate, the insurers shall, upon request, disclose the reasons for the increase.
Senator Raggio:
What is the standard rate?
Senator Townsend:
Under this new language, when the insurance commissioner sets the standard rate above the rate for a particular practitioner, that practitioner has the right to find out why. Section 22 mirrors identically the language in Section 14 of S.B 122 (2nd reprint). Section 35 in A.B. 320 sets out the requirement that a defendant be provided with independent counsel in the case of a practitioner that is being sued, and that the insurer shall pay the independent counsel. Section 40 standardizes credentialing as agreed upon by providers of insurance and managed-care organizations.
Senator Raggio:
Is it your recommendation that this be processed without additional amendments?
Senator Townsend:
Yes.
Senator Raggio:
I serve on the board of directors of Sierra Health Care Services.
Senator Townsend:
Sierra Health Care Services has been active in this bill process.
Senator Raggio:
There may not be a conflict of interest, but I will abstain from the discussion of this matter.
Senator Coffin:
I am, under this new terminology, a “producer of insurance,” but this will not affect me. In Section 2, line 3, how did the insurance agents get involved in this?
Senator Townsend:
I do not know. We, as a committee, did not hear testimony on that.
Senator Rawson:
I want to note that I am a provider of health care, but this will not affect me.
SENATOR RAWSON MOVED TO DO PASS A.B. 320.
SENATOR TIFFANY SECONDED THE MOTION.
THE MOTION CARRIED (SENATOR RAGGIO ABSTAINED.)
*****
Senator Raggio:
There being no further business and no further questions, this meeting is adjourned at 11:19 a.m.
RESPECTFULLY SUBMITTED:
Michael Archer,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: