MINUTES OF THE

SENATE Committee on Finance

 

Seventy-second Session

May 27, 2003

 

 

The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 9:25 a.m., on Tuesday, May 27, 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:

 

Assemblywoman Christina R. Giunchigliani, Assembly District No. 9

Assemblyman Richard D. Perkins, Assembly District No. 23

 

STAFF MEMBERS PRESENT:

 

Gary Ghiggeri, Fiscal Analyst

Pamela Carter, Committee Secretary

 

OTHERS PRESENT:

 

John P. Comeaux, Director, Department of Administration

Michael Hillerby, Deputy Chief of Staff, Office of the Governor

Michael R. Alastuey, Lobbyist, University Medical Center

Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources

Danny Thompson, Advisory Council to the Division of Industrial Relations, Department of Business and Industry, and Lobbyist, American Federation of Labor Congress of Industrial Organizations

Lynn Fulstone, Lobbyist, Sunrise Hospital and Medical Center

Lucille Lusk, Lobbyist, Nevada Concerned Citizens

Brian Krolicki, State Treasurer

Terry L. Hickman, Lobbyist, Nevada State Education Association

James J. Jackson, Lobbyist, Nevada State Education Association

Stan Olsen, Lobbyist, Lieutenant, Las Vegas Metropolitan Police Department, and Nevada Sheriff’s & Chief’s Association/South

Janine Hansen, Lobbyist, Nevada Eagle Forum

Laura M. Mijanovich, Lobbyist, American Civil Liberties Union of Nevada

Richard L. Siegel, Lobbyist, American Civil Liberties Union of Nevada

Craig Kadlub, Lobbyist, Clark County School District

Jeannie Simons

Juanita Y. Jeanney, Washoe County School District

Ivan R. “Renny” Ashleman, Lobbyist, State Public Works Board, and Southern Nevada Homebuilders Association

Daniel K. O’Brien, Manager, State Public Works Board

Richard Mirgon, Director of Communications, Douglas County

Dino DiCianno, Deputy Executive Director, Department of Taxation

Daniel G. Miles, Vice Chancellor, Finance and Administration, University and Community College System of Nevada

Keith L. Lee, Lobbyist, State Board of Medical Examiners

 

Senator Raggio:

The committee will come to order. We will begin with a word from the staff.

 

Gary Ghiggeri, Fiscal Analyst:

I distributed a memorandum to the committee (Exhibit C) describing budget corrections that need to be made in the Medicaid budget. The Division of Health Care Financing and Policy advised us of an error in decision unit M-501, which would need to be adjusted by approximately $3.9 million, approximately $975,976 is General Fund in the first year, and approximately $485,000 is General Fund in the second year. Additionally, when the input was put into the Budget Analysis System of Nevada (BASN) for the Department of Information Technology (DoIT) cost allocation, we realized savings in Temporary Assistance to Needy Families (TANF) funding for approximately $642,000 in fiscal year (FY) 2004, and approximately $334,000 in FY 2005.

 

The Assembly Committee on Ways and Means (Ways and Means) utilized the enhanced Federal Medicaid Assistance Program (FMAP) dollars that recently became available to fund the shortfall in the Medicaid budget, and the additional funding realized in the TANF budget was placed in reserve. I need direction from the committee.

 

Senator Raggio:

Are those General Fund corrections?

 

Mr. Ghiggeri:

Those are the General Fund corrections. Yesterday, the Assembly Committee on Ways and Means substituted the increased FMAP funding that recently became available.

 

Senator Raggio:

What is that?

 

Mr. Ghiggeri:

That is the Jobs and Growth Tax Relief Reconciliation Act of 2003, U.S. House of Representatives Bill No. 2 (HR2) money.

 

Senator Raggio:

Is it $100-and-some million?

 

Mr. Ghiggeri:

That is correct. Approximately $36 million is the increase in the FMAP funding. I believe it is 2.75 percent or 2.85 percent increase in the …

 

Senator Raggio:

Is it available for Medicaid?

 

Mr. Ghiggeri:

It is available for Medicaid.

 

Senator Raggio:

Would it replace the General Fund error?

 

Mr. Ghiggeri:

That is correct.

 

Senator Raggio:

I guess it is a calculation error.

 

Mr. Ghiggeri:

Yes, it is. When they input the cost allocation at BASN on the TANF portion there was additional TANF savings of approximately $642,000 in FY 2004, and approximately $334,000 in FY 2005. Yesterday Ways and Means added that to the TANF reserve.

 

Senator Raggio:

Is it staff’s recommendation?

 

Mr. Ghiggeri:

Yes, it is, in order to be consistent with what was done by the Assembly Committee on Ways and Means.

 

Senator Raggio:

Is that the best way to do it?

 

Mr. Ghiggeri:

I would reserve the TANF funding or reduce the General Fund dollars in the TANF budget at this time.

 

Senator Raggio:

That is why I asked the question. Would it be available?

 

Mr. Ghiggeri:

It is available to reduce the General Fund portion.

 

Senator Raggio:

Mr. Comeaux, do you have a comment on this?

 

John P. Comeaux, Director, Department of Administration:

I urge the committee to leave that money in TANF reserve. As you know, we are tapped out. I think this is an opportunity to build up a little reserve, as is the temporary FMAP funding.

 

Senator Raggio:

What is FMAP?

 

Mr. Comeaux:

It is the Federal Medical Assistance Percentage and the percent of participation of the federal government in our Medicaid program. Part of the attempt by the federal government to help the states is a 4-quarter temporary increase in its participation rate of approximately 2.95 percent, which equates to $36 million over 4 quarters. I was disturbed the Assembly Committee on Ways and Means took all of that money except for the amount necessary to solve the problem in the Medicaid budget. This would be a good time to use some of that money for a little reserve in that area.

 

Senator Raggio:

Should we utilize the FMAP money to address the Medicaid error, as was done by the Assembly Committee on Ways and Means, and place the TANF correction in reserve?

 

Mr. Comeaux:

Yes, we should. Further, I recommend you consider using more of the enhanced FMAP to enhance the reserves in Medicaid, which was not done by the Assembly Committee on Ways and Means.

 

Senator Raggio:

What amount would you recommend in order to do that? We need recommendations from the Governor’s Office on this.

 

Mr. Comeaux:

My recommendation would be all of it, but half would be better than nothing.

 

Senator Raggio:

What is half?

 

Mr. Comeaux:

Half would be $7 million for the last quarter of FY 2003, and about $27 million for the first 3 quarters of next fiscal year. Therefore, I would recommend leaving approximately $14 million for the next fiscal year.

 

Senator Raggio:

Is it a total of $14 million and $7 million?

 

Mr. Comeaux:

The $7 million is the full amount for the last quarter of this fiscal year and $27 million is for the first 3 quarters of next fiscal year.

 

Senator Rawson:

Is it required the $35 million be used for Medicaid?

 

Mr. Comeaux:

Correct.

 

Senator Rawson:

There really is no other proper place to use it; therefore, rather than committing it to increases, why not put it in reserve? Is that what you are saying?

 

Mr. Comeaux:

Yes, sir.

 

Senator Rawson:

I think it is prudent since it cannot be used anywhere else.

Senator Raggio:

It is not money that is firm yet, either.

 

Mr. Comeaux:

No, sir, it is not.

 

Senator Raggio:

Do you have some numbers?

 

Mr. Ghiggeri:

The numbers showing up in the Federal Funds Information for States (FFIS) are about $14 million for federal FY 2003 and approximately $23 million for federal FY 2004, assuming federal FY 2003 is cut off in July; therefore, it is about $7 million for FY 2003 and possibly another $7 million for the first quarter of FY 2004. That funding can also be reserved via work programs. I do not know whether the Assembly Committee on Ways and Means spent all that money.

 

Mr. Comeaux:

The Assembly Committee on Ways and Means apparently decided to take out an equal amount from the General Fund, with the exception of the amount necessary to correct the problem. I was not present when they did it.

 

Mr. Ghiggeri:

I understood the Assembly Committee on Ways and Means used the increased FMAP to cover the approximate $1.3 million error and did nothing further.

 

Mr. Comeaux:

Hopefully, you are correct. It would provide flexibility at the end of the next fiscal year to either revert General Fund at that time or keep the money in the Inter‑Governmental Transfer (IGT) account reserve. Transfers would not be made out of that account, but this money would be used instead, which would, in effect, increase the reserve.

 

Senator Raggio:

I ask staff for a recommendation on how to indicate available funding and the best way to place it because it should not be utilized without some kind of work program revision for that purpose.

 

Mr. Ghiggeri:

Due to the time constraints of the session, I recommend that the Senate Committee on Finance utilize $1.3 million to cover the shortfall and reserve TANF funding, the same as the Assembly Committee on Ways and Means. Once the assigned amount of money is available, I recommend that the Budget Division present a work program revision to the Interim Finance Committee (IFC) to either reserve the money in IGT or Medicaid. In any event, the money cannot be spent without coming back to IFC.

 

Senator Raggio:

We would not do anything other than suggest a work program revision to utilize the money.

 

Mr. Comeaux:

I wholeheartedly agree.

Senator Raggio:

Is that acceptable to the committee? Apparently the money cannot be used for any other purpose, at least that portion of it. I would accept a motion to cover the shortfall in the Medicaid budget as indicated in M-501, utilize the amount freed up in the Welfare Administration budget in the DoIT cost allocation in the amounts of $642,000 for FY 2004, and $334,000 for FY 2005 in reserve, and use the balance of available money from that federal funding, when it becomes available, subject to a work-program revision to be taken to the IFC for those purposes.

 

SENATOR RAWSON MOVED TO COVER THE SHORTFALL IN THE MEDICAID BUDGET AND UTILIZE THE AMOUNT FREED UP IN THE WELFARE ADMINISTRATION BUDGET IN THE DOIT COST ALLOCATION, IN THE AMOUNTS OF $642,000 FOR FY 2004, AND $333,856 FOR FY 2005 IN RESERVE; AND USE THE BALANCE OF AVAILABLE MONEY FROM FEDERAL FUNDING WHEN IT BECOMES AVAILABLE, SUBJECT TO A WORK-PROGRAM REVISION BE TAKEN TO THE IFC FOR THOSE PURPOSES.

 

THE MOTION WAS SECONDED BY SENATOR COFFIN.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

Senator Raggio:

There are a number of bills on which we must either concur or not concur. The hearing is opened on Senate Bill (S.B.) 345. I will distribute Assembly Amendment No. 784 to S.B. 345 to the committee (Exhibit D).

 

SENATE BILL 345 (1st Reprint): Provides direction to Public Employees’ Retirement System regarding payment of certain benefits. (BDR 23-88)

 

Senator Raggio:

Senators Nolan and Hardy brought S.B. 345 forward, and there was discussion with the Public Employees’ Retirement System (PERS) regarding whether or not it was effective reporting of the disability retirement allowance to the Internal Revenue Service (IRS). Apparently the Assembly amended S.B. 345 as a whole, renumbering section 2 as section 3, and adding a new designated section following section 1; therefore, section 1 was left in and reads:

 

On or before October 1 of this year, the Public Employees’ Retirement System shall submit a request to the IRS for a determination of whether disability retirement benefits paid are excludable from taxable income, and on or before July 1 of next year, review any alternative methods allowed under federal law for recording disability retirement allowances, and on or before that time prepare and submit a report to the Legislative Commission.

 

Also, on page 1, section 2, of S.B. 345, the Assembly deleted line 8, which is the effective date, becoming effective upon passage and approval. Section 1 of S.B. 345 would become effective and then delayed until July 1, 2005. It seems prudent. I think the best way is to get a determination from the IRS, if possible. Are there any thoughts from the committee?

Senator Coffin:

Is this a formal request for an opinion letter from the IRS?

 

Senator Raggio:

I assume it is.

 

Senator Coffin:

I believe it takes quite a while to get an opinion letter from the IRS. I wonder whether the National Conference of State Legislatures (NCSL), other states, or perhaps some repository might speed things up, or tell us how other states handle this sort of thing.

 

Senator Raggio:

If you recall, PERS did not have a violent objection. However, in their opinion, it was not appropriate. Therefore, I think the only way is to obtain a determination letter from the IRS to ascertain whether or not it is feasible. I would accept a motion we concur.

 

SENATOR RAWSON MOVED TO CONCUR WITH AMENDMENT NO. 784 TO S.B. 345.

 

SENATOR RHOADS SECONDED THE MOTION.

 

Senator Cegavske:

Why is there a delay until 2005?

 

Senator Raggio:

Senate Bill 345 says PERS shall, to the extent allowed, report this to the IRS as disability retirement allowance instead of retirement income. The PERS has taken a position it is not feasible to do so because the IRS does not accommodate it. That was the issue. I know of no other way to decide it other than to direct PERS to obtain an opinion from the IRS.

 

Senator Cegavske:

Do you think it will take 2 years?

 

Senator Raggio:

I do not know.

 

Senator Cegavske:

You are giving them the time because of the mandate.

 

Senator Raggio:

The problem is we cannot force them to do it should the law not allow it. I am not the advocate for this bill.

 

Senator Cegavske:

I am not either. I was just curious why it would be 2 years rather than 1 year, or even an October date this year.

 

Senator Raggio:

It is inconsistent to allow PERS to do it when there is no opinion whether or not it is legal to do so.

Senator Cegavske:

I yield to your expertise in the law.

 

Senator Raggio:

I have no expertise on this issue.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

Senator Raggio:

The hearing is closed on S.B. 345 and opened on S.B. 100.

 

SENATE BILL 100 (2nd Reprint): Makes various changes to provisions governing common-interest communities. (BDR 10-29)

 

Senator Raggio:

Senate Bill 100 came to this committee after being processed by the Senate Committee on Commerce and Labor, and then was sent to the Assembly. The Senate Committee on Finance received back an extensive amendment, which I showed to the chairman of the Senate Committee on Commerce and Labor (Commerce and Labor), who indicated it was appropriate. Other than that, I have no information. I will distribute Amendment No. 744 to S.B 100 to the committee (Exhibit E).

 

Senator Tiffany:

Was anything changed that would change the fiscal note?

 

Senator Raggio:

Senate Bill 100 deals with common-interest communities. The Senate Committee on Finance sent the bill to the Assembly with a fiscal note. The Assembly amended the bill, but I do not know whether it changed the fiscal note in any way. The chairman of Commerce and Labor reviewed the amendment, felt it was appropriate, and would concur with it. Unfortunately, it returned to this committee for concurrence because this was the last committee to process the bill. Therefore, we can either concur or send it to Commerce and Labor for concurrence. Do we need to obtain some information on the fiscal note? There are fiscal notes from the Real Estate Division and the Office of the Attorney General.

 

Mr. Ghiggeri:

When you heard S.B. 100 in the Senate Committee on Finance, it was noted the funding was coming out of the common-interest communities funding and there was no General Fund impact.

 

Senator Rawson:

At this point in the session, rather than re-referring it, since there was assurance from the chairman of Commerce and Labor that it was an appropriate amendment, I suggest this committee concur.

 

Senator Raggio:

What is the pleasure of the committee?

 

SENATOR COFFIN MOVED TO CONCUR WITH AMENDMENT NO. 744 TO S.B. 100.

SENATOR RAWSON SECONDED THE MOTION.

 

Senator Raggio:

Based upon the assurance of the chairman of Commerce and Labor, the motion is to concur with Amendment No. 744 to S.B. 100. Are there any objections to the motion?

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

Senator Raggio:

The hearing is closed on S.B. 100 and opened on S.B. 46.

 

SENATE BILL 46 (1st Reprint): Authorizes issuance of general obligation bonds to carry out Environmental Improvement Program in Lake Tahoe Basin. (BDR S-174)

 

Senator Raggio:

I will distribute Amendment No. 851 to S.B. 46 (Exhibit F). Senate Bill 46 was amended by renumbering section 4 as section 6, adding new sections designated as sections 4 and 5, following section 3, to read as follows: “To carry out projects for control of erosion and the restoration of natural water courses and other projects.” It is carried out through section 5 where issuance of the bonds and use of the proceeds is limited to awarding grants specifically for control of erosion and restoration of natural watercourses. The language, “and other projects,” was added; therefore, we need a knowledgeable person to explain the reason that language was added.

 

Mr. Ghiggeri:

The amendment amends prior bond issuance language consistent with the closing of certain budgets in the State Department of Conservation and Natural Resources. In the closing of those budgets, the committees agreed to fund certain positions in the Division of State Lands and the Division of State Parks using the interest from the bonds issued.

 

Senator Raggio:

Was there any objection to it?

 

Mr. Ghiggeri:

Not in the closing.

 

Senator Coffin:

The original bill spelled out projects the organization felt necessary and they were clear to us. Now, however, I do not know. The language “and other programs and other projects” is vague. You could bill just about anything for anybody with that language.

 

Senator Raggio:

Would you like clarification?

 

Senator Coffin:

Yes.

Senator Raggio:

We will reserve judgment on S.B. 46 until the sponsor can tell us the reason it is needed.  The hearing is closed on S.B. 46 and opened on 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 Raggio:

Senate Bill 51 is Senator Rhoads’ California Immigrant Trail Interpretive Center bill, and Amendment No. 914 provides extension to 2007 and the equivalent‑in‑kind contribution language.

 

The hearing is closed on S.B. 51 and opened on S.B. 214.

 

SENATE BILL 214: Revises provisions concerning enforcement of requirement of registration of motor vehicle by new resident of this state. (BDR 43‑058)

 

Senator Raggio:

Amendment No. 920 to S.B. 214 mandates that the director of the Department of Motor Vehicles (DMV) maintain a local telephone number to report the procedures.

 

The hearing is closed on S.B. 214 and opened on Assembly Bill (A.B.) 286.

 

ASSEMBLY BILL 286: Revises provisions governing health insurance for retired officers and employees of local governments. (BDR 23-1124)

 

Senator Raggio:

Assembly Bill 286 had to do with proposed commingling and the committee removed it from the bill. It also contains language that leaves in the opportunity to opt back into retirement programs for non-State retirees. We will utilize Amendment No. 912 to A.B 286.

 

The hearing is closed on A.B. 286 and opened on A.B. 29.

 

ASSEMBLY BILL 29: Makes various changes concerning administrative assessments and forfeiture of bail. (BDR 14-130)

 

Senator Raggio:

The committee agreed to amend and do pass A.B. 29, an administrative assessment bill, with Amendment No. 919, which increases the assessment as indicated from $5 to $7.

 

The hearing is closed on A.B. 29 and opened on A.B. 395.

 

ASSEMBLY BILL 395: Provides for assessment of fee on certain facilities for intermediate care and on certain facilities for skilled nursing. (BDR 38‑999)

 

Senator Raggio:

Assembly Bill 395 was the assessment fee that the committee agreed to amend and do pass by a vote of 5 to 2, with Senators Cegavske and Mathews voting in opposition. This bill sets up the procedure for an assessment fee on intermediate care and skilled-nursing facilities. Amendment No. 913 to A.B. 395 is consistent with the committee’s action and, should the two Senators choose to change their votes, the committee will take a revote on the bill. In such event, I will entertain a motion to rescind the committee’s action on A.B. 395.

 

SENATOR MATHEWS MOVED TO RESCIND THE PREVIOUS ACTION TAKEN ON A.B. 395.

 

SENATOR RAWSON SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

SENATOR MATHEWS MOVED TO AMEND AND DO PASS A.B. 395 WITH AMENDMENT NO. 913.

 

SENATOR RAWSON SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR CEGAVSKE VOTED NO.)

 

*****

Senator Raggio:

The hearing is closed on A.B. 395 and opened on Bill Draft Request (BDR) 43‑1360. Bill Draft Request 43-1360 is pursuant to the committee’s request of the Department of Motor Vehicles for a mechanism to keep them within the 22 percent administrative cap.

 

BILL DRAFT REQUEST 43-1360: Requires Department of Motor Vehicles to charge and collect certain new fees relating to sale or lease of vehicle. (Later introduced as Senate Bill 501.)

 

Mr. Ghiggeri:

Bill Draft Request 4-1360 provides for an $8.25 charge per dealer report-of-sale, which would be effective October 1.

 

Senator Raggio:

I will entertain a motion to introduce BDR 43-1360.

 

SENATOR RAWSON MOVED TO INTRODUCE BDR 43-1360.

 

SENATOR COFFIN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

Senator Raggio:

The hearing is closed on BDR 43-1360 and opened on BDR 40-1365, which pertains to the fee for the emission control requested by the committee, and it adds $1 in Nevada Revised Statutes (NRS) 445B.830.

 

BILL DRAFT REQUEST 40-1365: Revises certain fees paid to Department of Motor Vehicles concerning control of emissions from motor vehicles. (Later introduced as Senate Bill 500.)

 

SENATOR RHOADS MOVED TO INTRODUCE BDR 40-1365.

 

SENATOR COFFIN SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

Senator Raggio:

The hearing is closed on BDR 40-1365.

 

We welcome some visiting junior and senior students from Pioneer High School in Carson City. As you know, we are in the final week of the Nevada Legislature. This is the Senate Committee on Finance in the process of finalizing budgets and approving bills with appropriations, and so forth. Do you have any questions? For example, where we will find the money to fund all this? Do you have enough money to run your school? We thank you for visiting us today and welcome to the Legislature.

 

I will open the hearing on S.B. 499.

 

SENATE BILL 499: Makes appropriation to Interim Finance Committee for allocation to Department of Public Safety for radio system costs, infrastructure upgrades and user equipment. (BDR S-1364)

 

Senator Raggio:

Senate Bill 499 requires $14,656,000 from the Highway Fund and $1,800,000 from the General Fund, and puts the money with the IFC, which will approve the request, conditioned upon the State Board of Examiners. It then authorizes funding and monitors the progress in correcting the situation.

 

Mr. Ghiggeri:

There may be a required amendment for S.B. 499. At the present time, the allocation is limited to the Department of Public Safety. It was recently pointed out to me that the Division of State Parks and the Transportation Services Authority may also require replacement of their radios. Therefore, you may want to strike out “for allocation of the Department of Public Safety” and just indicate “for allocation for radio system costs.”

 

Senator Tiffany:

Do we also need to add more language about what we agreed upon; for example, the construction of so many towers?

 

Mr. Ghiggeri:

I do not have sufficient backup or detail to tell you exactly what they are going to be doing.

 

Senator Tiffany:

Did we ask them to return to the IFC before spending the money?

 

Senator Raggio:

They have to come back for authorization on any of this.

 

Mr. Ghiggeri:

I recommend we strike the one portion.

Senator Raggio:

So, we would strike “the Department of Public Safety,” and then what?

 

Mr. Ghiggeri:

Just ask the IFC to allocate radio system costs and strike “the Department of Public Safety.”

 

Senator Raggio:

Is this a request from the Governor’s Office?

 

Michael Hillerby, Deputy Chief of Staff, Office of the Governor:

Yes, it is a request from the Office of the Governor. In response to Senator Tiffany’s question, it will go back to IFC before authorization to spend any money can be given.

 

Senator Raggio:

Does that include expenditures for the towers, as well?

 

Mr. Hillerby:

Yes.

 

Senator Coffin:

I want to make sure there is no logistical problem, or some sort of problem with the timing of IFC meetings and construction of the project. The IFC meets June 24, and frequently does not meet during the summer. Therefore, we need to know because we would be appropriating directly to the IFC.

 

Senator Raggio:

The IFC usually meets every couple of months.

 

Senator Coffin:

You do not find the IFC here in July or August.

 

Mr. Ghiggeri:

That is correct; the IFC usually meets in June and then mid-September.

 

Mr. Hillerby:

The short answer is, we do not know exactly what the timetable will be. We will switch over from the trunked mode, based on current frequencies, in the early to middle part of next month, to what is known as conventional mode. The frequencies we have found so far, and as we continue to look for more, will dictate when we need to do some of these things. We will know, at that point, the functionality of the existing system on the frequencies we are able to find and where we go from there. Bearing in mind the IFC meeting dates, we will certainly give as much notice as possible.

 

Senator Coffin:

I was more concerned with the construction and acquisition timing. However, if it does not interfere with yours, we can accommodate it.

 

Senator Raggio:

Is that understood?

Mr. Hillerby:

Thank you, Mr. Chairman, yes.

 

SENATOR RAWSON MOVED TO AMEND AND DO PASS S.B. 499.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Senator Raggio:

The hearing is closed on S.B. 499 and opened on A.B. 297.

 

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

 

Senator Raggio:

The Chairman recuses himself on this measure and Senator Rawson, as vice chairman, will preside over the hearing on A.B. 297.

 

Mr. Alastuey, Lobbyist, University Medical Center:

Assembly Bill 297 addresses disproportionate share, the same issue discussed yesterday in this committee in the form of S.B. 235.

 

SENATE BILL 235: Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38-746)

 

Mr. R. Alastuey:

This is a federal program bringing about $38 million in benefit to the state that will require about $32 million in nonfederal match. However, $48 million is collected from local governments and hospitals. It leaves the State about $16 million in the current fiscal year for deposit in the Intergovernmental Transfer Account (ITA). In effect, this is an overmatch collected by the State and held aside in reserve. The reserve is either maintained for future needs in Medicaid to supplant appropriations that would otherwise be necessary for Medicaid, or kept as a contingency for the Medicaid program. Of the funds now on hand, it is my understanding any excess balances in the ITA come from southern Nevada. These are southern Nevada taxpayer dollars in one form or another; therefore, if the University Medical Center’s (UMC) testimony appears to be of sharp concern and intense watchfulness over these funds, it is absolutely justified. It is critical UMC’s share be maintained, as is the case in A.B. 297.

 

The 71st Legislative Session ended on a contentious note, and all agreed to conduct an interim study, which was an arduous task conducted by an independent consultant. Everybody agreed to the study and no objections to the study findings were raised, even though they were presented in public on more than one occasion. The findings were clear: net uncompensated care should be the determinant of which hospitals should or should not receive disproportionate share. The University Medical Center provided most net uncompensated care and, of the private hospitals in Clark County, Lake Mead Hospital expended an extraordinary effort and is deserving of disproportionate share support.

The study found, in general, population-driven, hold-harmless agreements could prevail as a starting point for implementing the study findings, with three exceptions. Those exceptions were that Sunrise Hospital should receive no disproportionate share, and adjustments should be made to Churchill Community Hospital and Carson-Tahoe Hospital. Again, no objections were raised at the time. We are now trying to implement the study and remain faithful to its outcome at a time when there is limited funding. In our view, the right thing to do is maintain the State’s current share at $16 million a year. However, in order to balance the state’s budget to the Governor’s recommended level, the State needs to take an increasing share from $16 million, to $17 million, to $18 million. That means UMC’s share will have been cut, which is the case in A.B. 297, from $15 million last year, $14 million this year, and $13 million in the next 2 years. The UMC will have taken the largest hit of any participating entity in the disproportionate share program. We understand that, but we cannot suffer any more losses.

 

Even though A.B. 297 is at a limited amount of money, it is faithful to the study findings because it puts in language providing that if more disproportionate share money becomes available, it is to be first distributed to the hospitals with the most net uncompensated-care percentages. Other amendments were proposed in both the Assembly Committee on Ways and Means and the Senate Committee on Finance. We oppose those amendments because they are contradictory to the study findings in that they would be distributing disproportionate-share funds on something other than net uncompensated care. They would be distributing funds based on patient days already compensated. We believe those amendments, as proposed, would violate the disproportionate share concept and would, in fact, violate the study findings. They also proposed audits be conducted. We do not mind audits, but if, indeed, hospitals are to be subject to audit, let them be subject to audit for something that actually drives distribution of funds.

 

We support the concept of the study findings even though they were not entirely to our liking. They excluded millions of dollars of uncompensated cost to UMC. We understand the State must keep its budget whole, which A.B. 297 does. We support allocations to the rural hospitals and A.B. 297 does keep rural hospitals proportionately whole in conformance with the study. We also support the allocation to Lake Mead Hospital and the maximum share possible under section 4 of A.B. 297. Again, UMC takes the biggest hit of all under any of these measures. The match contemplated in these bills is all from Clark County. Clark County is carrying the disproportionate share program on its back.

 

A bill is needed to be passed this Legislative Session to support continuation of the disproportionate share program, particularly for hospitals other than those in Clark County. Yesterday it was suggested in the committee that some additional funds could be released into the distribution formula. Those funds, if they were to come from the ITA, would come from the account typically set aside for use as Medicaid match. Medicaid match is an issue for you, and you can get over $2 for $1 if that remains available for Medicaid care. In order to make such a redistribution and give it to other hospitals, the ITA reserve would be reduced. Once again, our deep concern is that you would be calling upon UMC for ITA match. This does not contain any State money. This is not a situation in which you are dishing out State money. This is a situation in which it has gotten down to this program, and budgeting for this program is essentially taking the spoils of federal financial participation, matched entirely by UMC, and dividing it around the state. Therefore, if we are watchful, it is deservedly so. We urge you to support A.B. 297 because we believe it is faithful to the study, and it treats hospitals and the State fairly in view of the limited funding available.

 

Senator Rawson:

What does A.B. 297, as written, do to Churchill Community Hospital and Carson-Tahoe Hospital?

 

Mr. Alastuey:

The rural hospitals could best respond, but it is my understanding Churchill Community Hospital takes a slight downward adjustment, and Carson-Tahoe Hospital stays flat at about $1 million.

 

Senator Coffin:

The generation of funds all coming from UMC was not as clear in my mind, as stated pretty bluntly by you today. Did Washoe Medical Center generate sufficient funds to get some of this funding? 

 

Mr. Alastuey:

My statement was not intended to exclude the part of inter-governmental transfer tax (IGT) contributed under the bill by Washoe County on behalf of Washoe Medical Center. The reason I say any residuals in the fund are Clark County residuals is, in fact, because the contribution from Washoe County does not even come up to the level for the required nonfederal financial participation. So, it is completely exhausted and any remaining match necessary to fund the pro rata share from Washoe County does come out of Clark County. There is a very small share of IGT coming from Washoe County, which does not even fund its proportionate match.

 

Senator Coffin:

Do you feel the distribution among the hospitals listed in the bill is a fair distribution based upon the source of funds, or is your position that UMC is basically funding all these other hospitals, including Washoe Medical Center?

 

Mr. Alastuey:

In effect, the match for the whole program is coming out of southern Nevada. There is no question about it. Could the bill be fairer? Absolutely. Is this an issue of regional interest? Absolutely. When the independent consultant was commissioned to work on the study, the group was told to try to hold hospitals roughly harmless, and it did so with the exception of several adjustments recommended in the study. We cannot really break even in an era of limited funds.

 

Senator Coffin:

Later paragraphs in the bill talk about unnamed hospitals that divide a certain percentage of what is left over. How much is withheld by the State?

 

Mr. Alastuey:

The State is withholding, for its own use, roughly $16 million this year and A.B. 297, or S.B. 235, were it amended yesterday with the amendment then under discussion, would be reserving for the state’s use about $17 million-plus next year, and $18 million the following the year.

Senator Coffin:

The money is generated in Clark County, mostly by UMC. Some other hospitals in Clark County, such as Lake Mead Hospital and Sunrise Hospital, have some uncompensated care.

 

Mr. Alastuey:

The money is all generated by UMC. The care that ostensibly justifies consideration for distributions occurs at many hospitals. I brought up Lake Mead Hospital because its net uncompensated care percentage is quite high for a private hospital.

 

Senator Coffin:

There is also Desert Springs Hospital. I cannot think of others that might conceivably want to dip into this a little bit because of their uncompensated care. It may or may not be a great amount of money, but over and above what the allocation is now, they could make the argument they should have a little more.

 

Mr. Alastuey:

If there were sufficient funds and more nonfederal participation from other than UMC, I think other hospitals could step up and, even under the methodology that came out of the interim study, pose an argument for some assistance. The limitations are there, however, in the study outcome. They were able to confirm, in general, the selection of hospitals that had been made previously for participation, and confirmed those hospitals should continue, with one exception, and start pretty much from a hold-harmless situation. However, the language put into the bill addressing possible future allocations, should the federal financial participation be materially enhanced, essentially said that after the base allocations are met, any additional money should be allocated to the various regional pools, with Washoe County being one pool, Clark County being another pool, rural private hospitals and rural public hospitals being other pools. It would be allocated among the pools proportionately. Once the new pool allocations are determined, any additional dollars would go first to the hospital with the highest net uncompensated care until that net uncompensated care is bought down to the level of the second poorest hospital, if you will, and then in even measure, to those two hospitals until they are bought down to the third. We do not foresee the ability to make material amounts of additional federal allocations right now. Therefore, it is basically every hospital attempting to maintain its share.

 

Senator Rawson:

I must call time and ask you to conclude your testimony.

 

Mr. Alastuey:

I will conclude by offering our support for A.B. 297 within the allocation set aside for private hospitals in Clark County and the maximum possible share for Lake Mead Hospital.

 

Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources:

Mr. Alastuey correctly described the intent of the bill to adjust the total disproportionate-share payments to a lower level that will be received from the federal government in fiscal years 2004 and 2005, to establish a methodology consistent with the interim study, establish funding pools, and provide payment guarantees to private hospitals. From the State’s perspective, the bill allows the state budget to be kept whole. The Governor recommends the budget close at the amount to which Mr. Alastuey referred. The bill allows us to realize those amounts and retain approximately $17 million and $18 million, respectively, in 2004 and 2005 in our IGT accounts. I understand from Mr. Alastuey there was a discussion yesterday in a work session regarding the use of intergovernmental transfers in the next biennium to augment payments to hospitals. As we testified, and as our budget closed, the IGT account will have enough to maintain cash flow. There really is no effective reserve in that account to augment any of the programs. We will end this fiscal year with approximately $3.6 million in reserve and conclude the next fiscal biennium with approximately $4 million in fiscal reserve or to maintain cash flow.

 

Senator Rawson:

Since A.B. 297 is essentially the same as S.B. 235 with one change, it is basically repetitive; therefore, we will move on.

 

Danny Thompson, Advisory Council to the Division of Industrial Relations, Department of Business and Industry, and Lobbyist, American Federal of Labor Congress of Industrial Organizations:

I represent the Nevada State American Federal of Labor-Congress of Industrial Organizations (AFL-CIO). This issue has been the topic of discussion in numerous bills this Legislative Session and we think A.B. 297 accurately reflects what the study intended. Amendments have been proposed to different bills that would change the formula and definition of uncompensated care. We believe this bill solves all those problems and support it wholeheartedly.

 

Senator Coffin:

The bill contains $4.8 million for Washoe Medical Center, among others, and yet it is generated to UMC. Do you support that?

 

Mr. Thompson:

Yes, we do.

 

Senator Coffin:

Why?

 

Mr. Thompson:

Washoe Medical Center is the trauma center for northern Nevada, as is UMC for southern Nevada. When those centers close, we all know the detrimental effect it will have on the community. We believe this bill contains all the solutions and should be passed as is.

 

Senator Coffin:

If the tax base of Clark County is essentially providing the match to get these dollars back, is there a difference in the tax base of Washoe County that requires we pay this money to Washoe Medical Center?

 

Mr. Thompson:

We all live in the State of Nevada and I would say Washoe Medical Center and the trauma center are just as important to Washoe County as UMC is to southern Nevada. Many of the funds that go to Esmerelda County are generated in Clark County. Therefore, we support this and think it represents a compromise with which everyone can live.

Lynn Fulstone, Lobbyist, Sunrise Hospital and Medical Center:

We oppose A.B. 297 for many of the same reasons that were raised yesterday in the discussion on S.B. 235. The two bills are identical, except Sunrise Hospital receives zero dollars under A.B. 297. According to the interim study cited by Mr. Alastuey, Sunrise Hospital provides the second highest uncompensated care cost in Clark County. We believe it would be good public policy to provide a fair distribution to facilities in Clark County treating low‑income patients. Unfortunately, this formula does not accomplish it. We ask the committee to amend A.B. 297, or deal with it in S.B. 235, to make the distribution fair for the growing population in the Clark County area and for the facilities that treat those patients. 

 

To clarify a point for Senator Coffin, the IGT is not paid by UMC, nor is it even paid by Clark County. It is paid by Clark County taxpayers who provide the money for this program to support low-income patients who go to the different facilities in the growing areas of Clark County. The State is also responsible for bringing in these funds. We could not have the program without State support as well.

 

Although we proposed an amendment, I will not testify about it again. We ask the committee to award Sunrise Hospital the same amount currently received under existing law until further changes can be made to the formula. It comes from the interim study and the gross uncompensated care costs, which are only second to UMC. We agree the rules should not be hurt by this and there is no question UMC deserves the lion’s share of the money, but we believe the money should be fairly distributed in Clark County.

 

Mr. Duarte:

I want to point out there is a difference between S.B. 235 and A.B. 297. From the State’s standpoint, S.B. 235 does not hold the state’s budget harmless and does not maintain the levels needed to get in the budget.

 

Senator Rawson:

The hearing is closed on A.B. 297 and the Chairman will resume control.

 

Senator Raggio:

The hearing is opened on A.B. 179.

 

ASSEMBLY BILL 179 (2nd Reprint): Revises provisions governing education. (BDR 34-22)

 

Assemblywoman Christina R. Giunchigliani:

 

Assembly Bill 179, as amended, revises provisions governing the high school proficiency examination (HSPE). Section 7 of A.B. 179 authorizes a pupil to retake only those portions of the HSPE in which the pupil failed to achieve a passing score. In addition, the bill provides that a pupil who is currently a senior in high school and failed the math portion, but has otherwise satisfied the requirements for graduation from high school, may participate in graduation ceremonies and receive a standard high school diploma. This provision becomes effective upon passage and approval. Also, for the 2003-2005 biennium, the bill removes the math portion of the examination and places a moratorium on it in order for a student to receive a standard high school diploma. Pupils will continue to be required to meet all other requirements for graduation and will continue to take the exam, and if, by chance, they do not pass, it will not affect their high school diploma.

 

As amended, the bill also revises provisions governing the administration of the HSPE to pupils with disabilities and pupils whose primary language is not English, to be consistent with the requirements of the federal No Child Left Behind Act, which are in sections 5 and 6 of A.B. 179. For pupils with disabilities, the bill provides if they are blind or otherwise have visual impairment, or have a specific learning disability in reading, the program team may determine that the examinations in reading must be read aloud to the pupil.

 

Finally, A.B. 179, as amended, revises the minimum qualifications for receipt of a Millennium Scholarship by providing the incremental increase and minimum grade point average (GPA) required for receipt of a scholarship, so by 2007 the minimum GPA will be 3.25. A bill did not move in the Assembly and we felt the Treasurer needed this language to move forward; therefore, I included it in this Legislation at the request of leadership.

 

Assembly Bill 179 also revises the time frame of submission for an application for the Millennium Scholarship. In making the requirement, the bill provides that the Board of Regents may accept students who have been on active duty serving the armed forces in the United States for a 6-year limitation on the Millennium Scholarship awards.

 

Assemblywoman Giunchigliani:

I distributed several different packets of information: articles regarding high‑stakes exams and how they actually impact student achievement (Exhibit G. Original is on file in the Research Library.), and a packet of e-mails demonstrating the concerns of students and pupils (Exhibit H. Original is on file in the Research Library.).

 

No one promotes lowering standards or “dumbing down” the curriculum, despite comments of some individuals. The intent is to recognize the problem. Students testified in the Assembly Committee on Education. Many of those were honor students. A young lady from Washoe County, in the National Guard and math honors classes, could not pass the math proficiency exam. Her mother called 2 weeks ago and said her daughter still had not passed. The girl wants to enter the military, but cannot be accepted without a standard diploma. She will only receive a certificate of attendance for 4 years of school, taking 7 classes every semester, taking both semester and final exams in every one of those classes, and yet one test is barring her, as well as thousands of other students, from receiving a diploma. Something is wrong. We need to do an audit of the exam to ascertain whether it is aligned with the curriculum and the questions are actually testing what the students are being taught. The irony is, calculus and geometry are two main areas that are not required classes in all school districts, which sets students up for failure. Shame on us for doing that.

 

Assembly Bill 179 requests a 2‑year moratorium on the math portion of the HSPE. Students may continue to take it; however, it will not be a barrier to getting their diploma. I am attempting to determine a way to resolve a problem that, although unintentional, was caused by test questions that do not reflect the curriculum. The sad part is, a student that has been homeschooled, or was enrolled in a correspondence course in order to get a standard diploma, is not required to take the HSPE. It is somewhat indiscriminate. A parent called to tell me they bought their child a high school diploma by enrolling the child in private school, paying the tuition, and then the student was not required to take the HSPE and received the high school diploma. We are not recognizing these are good kids who study and take tutoring classes. Something is wrong. We need to take time, step back, and figure out what it is. If A.B. 179, in its entirety, is not acceptable, I ask you to work with me on behalf of students, parents, and school districts, to ascertain what is wrong and what can be done to help students in school currently, and come up with a better plan to ensure the curriculum is for the average student. Not all average students need to graduate with a high school diploma that tests calculus and geometry. The whole intent of a proficiency exam is to test what the average child needs to know in order to get out of high school and be successful in the world, not what every university‑bound student must have.

 

I distributed an article about boycotts in Florida regarding this issue (Exhibit  I). Through a news brief, I learned Massachusetts had a problem and set up an appeal procedure through its State Department of Education. A standard was set, and students who repeatedly come within a few points of passing the exam, but still fall short, may apply for a waiver from the high-stakes examination. If they show near-perfect attendance, make use of tutoring and test preparation programs, and demonstrate, through work samples, teacher recommendations, and other standardized tests, that they have the other skills to graduate, they are granted a waiver and earn a high school diploma. It is food for thought for the committee to consider.

 

Senator Rawson:

Have you any objection to tying the Millennium Scholarship to a passing or acceptable grade on the Academic Criteria Test (ACT) or the Scholastic Aptitude Test (SAT)?

 

Assemblywoman Giunchigliani:

I spoke with Lucille Lusk about it and did not feel comfortable with moving forward. I do not know enough about how the ACT and SAT measure going into college. Perhaps others can discuss it further.

 

Senator Coffin:

I want to clarify that geometry is not required, yet it is tested on the HSPE. I thought the students were tested on trigonometry.

 

Assemblywoman Giunchigliani:

There may be questions on trigonometry. We do not have access to the exam, of course, but testimony from students indicated algebra, geometry, and calculus were the main areas. One idea that came out of the hearing was to allow students to retake the portions they failed. The more often students retake the whole test, the worse they do, which is unfortunate. If a student had difficulty with one or two sections of the HSPE, A.B. 179 would allow him or her to focus on those sections. Due to secrecy in protecting the exams, I have not actually seen one.

 

Senator Coffin:

Is geometry required?

 

Assemblywoman Giunchigliani:

No, it is not a required course in Clark County. I think the Washoe County school board finally designated a couple of those courses for its requirement. However, not every child will go on to a university, nor will they enter an occupation in which they will need to be proficient in geometry and calculus. We need to review whether or not the questions really test what average students, the majority of young men and women, need to know. Is our goal to teach to mastery, or is our goal simply to cover material? Right now, we are covering material because there has been no time to actually implement as many of the other requirements that have come into play. Many students are not good test takers. I submit to you, half this body are probably not good test takers. There should be provisions for oral exams and other ways to show students are quite capable of achieving.

 

Senator Coffin:

Is this bill consonant with S.B. 191 that has gone to the Assembly?

 

SENATE BILL 191: Makes various changes governing education to facilitate implementation of federal No Child Left Behind Act of 2001. (BDR 34‑635)

 

Assemblywoman Giunchigliani:

We are hearing it currently. I do not believe there is any conflict with it. I think science was the only portion under concern, but it was delayed until 2007‑2008.

 

Lucille Lusk, Lobbyist, Nevada Concerned Citizens:

I distributed my written testimony (Exhibit J), which supports A.B. 179. I would like to address comment number 3 in my testimony in response to Senator Rawson’s question about tying the Millennium Scholarship to the ACT or SAT. It is something we proposed and, indeed, feel it is more sensible to tie a college scholarship to a college entrance exam. We would like the committee to consider that possibility.

 

I would like to bring attention to an item in A.B. 179 which is the requirement a pupil retake only the portion of the exam he or she has not previously passed. That is just common sense and efficiency. Regardless of whatever else survives or does not survive in the bill, we ask you to give particular consideration to maintaining that provision and, if you can see a way to do it, tie the Millennium Scholarship to a college entrance exam provision of the ACT or SAT.

 

Brian Krolicki, State Treasurer:

We support and appreciate the Millennium Scholarship language now part of A.B. 179. We think it is critical. Not only does it make it more competitive, but it also saves almost $30 million for the program through fiscal year 2010.

 

Senator Raggio:

Are the GPA’s required in the bill consistent with our action on S.B. 448?

 

SENATE BILL 448: Revises authority of State Treasurer to invest money held in certain trust funds and to administer proceeds from certain settlement agreements and civil litigation between State of Nevada and tobacco companies and revises qualifications for Millenium Scholarships. (BDR 18‑299)

 

Mr. Krolicki:

They are identical.

 

Senator Raggio:

Are you speaking to that part of the bill?

 

Mr. Krolicki:

I am speaking only to that part of the bill, not the proficiency side. As you know, S.B. 448 did not only contain Millenium Scholarship language, it also contained tobacco securitization. The Assembly chose not to hear this language, which is the reason the Millenium Scholarship is back in front of you in A.B. 179. With the Governor in full support, I urge the committee to reinsert tobacco securitization as part of the bill, as an amendment.

 

Senator Raggio:

The Assembly did not process it?

 

Mr. Krolicki:

The Assembly did not hear the bill.

 

I am distributing a book entitled “Tobacco Settlement Securitization” (Exhibit K. Original is on file in the Research Library.).

 

Terry L. Hickman, Lobbyist, Nevada State Education Association:

I am a high school counselor and president of the Nevada State Education Association (NSEA). We support A.B. 179 and share the concerns of students being tested in subjects they are not required to take. Many students throughout the state take a standard diploma program, which means they generally take 3 years of math, which is an option and does not require them to complete algebra and geometry, except in a few districts.

 

Senator Raggio:

Are the students advised on what they will be tested?

 

Mr. Hickman:

Yes, they are.

 

Senator Raggio:

So, why do they not take the courses?

 

Mr. Hickman:

Students and parents have a choice in terms of what they are going to take.

 

Senator Raggio:

Do I understand correctly, A.B. 179, for the current graduating class and the next biennium, will remove the math portion of the HSPE and students would not be required to pass it in order to receive a high school diploma?

 

Mr. Hickman:

Yes.

 

Senator Raggio:

I understand the passage rate is something like 99 percent and everybody gets 12 chances to take the test. How do we explain to prior students who did not pass the test and did not receive a diploma that the State was wrong? If 99 percent of students can pass the test, why are we making special exceptions when they have so many opportunities to pass the test?

 

Mr. Hickman:

The test is changing.

 

Senator Raggio:

Should every test provided in life be on a level everyone can pass? Is that the idea of a test?

 

Mr. Hickman:

I believe the test should be aligned with the curriculum taught to the students.

 

Senator Raggio: 

We have been assured that is the case.

 

Mr. Hickman:

Classes required to prepare for the test are not required by many school districts; therefore, classes that prepare the student for the test are not required for graduation. The test continues to go down the track of a college preparatory test.

 

Senator Raggio:

We have spent years developing standards and the test is the minimum of the prescribed standards.

 

Mr. Hickman:

We do not require students to take algebra II, trigonometry, or calculus, to graduate from high school.

 

Senator Raggio:

Is there any more testimony on A.B. 179? The hearing is closed on A.B. 179 and opened on A.B. 264.

 

ASSEMBLY BILL 264 (2nd Reprint): Makes various changes governing education. (BDR 34-62)

 

Assemblywoman Giunchigliani:

Assembly Bill 264 is a combination of several different areas. The first sections were lifted from S.B. 393.

 

SENATE BILL 393: Provides for release of certain records of pupils under certain circumstances. (BDR 5-318)

 

Senator Raggio:

While we have you here, it was surprising to hear S.B. 448 was not even heard in the Assembly.

Assemblywoman Giunchigliani:

Senate Bill 448 was in the Assembly Committee on Government Affairs. I was approached; this bill was germane; I moved it out of the Assembly Committee on Ways and Means, and I put in Mr. Krolicki’s language.

 

Senate Bill 393 had been in the Senate Committee on Human Resources and, according to the Legal Division, is compliant with the Federal Educational Rights and Privacy Act (FERPA). Sections 1, 2, 3, 4, and 11 of S.B. 393 include language requested by the police and sheriff’s counsel in a bill that did not move. I agreed to allow the language to be placed in this bill because it was the only germane bill that existed. My two sections dealt with what we are negotiating at this point, which is the one-fifth retirement credit for individuals in at-risk schools, and the original language regarding the pooling of $9 million for the purposes of the districts and associations to negotiate the suggested skills-based-performance career and mentor ladder program. That language, based on our negotiations, could go away; however, we would probably need to add the high impact into the risk area for the one-fifth credit. In addition to this was S.B. 457, on which Senator Rawson helped. It passed out of the Senate but did not get a hearing because it came over too late.

 

SENATE BILL 457: Prohibits use of false or misleading educational credentials. (BDR 34-1311)

 

Senator Raggio:

What bill is that?

 

Assemblywoman Giunchigliani:

It was S.B. 457, which was on diploma mills and the use of false diplomas and licensing, and is also contained in S.B. 393. It was not posted in time and I was asked to insert it. It was my bill with Senator Rawson and had already passed out of the Senate.

 

Senator Raggio:

Did it get a hearing in the Assembly?

 

Assemblywoman Giunchigliani:

No, we got the bill after the meetings were adjourned.

 

James J. Jackson, Lobbyist, Nevada State Education Association:

With respect to the inclusion of language from S.B. 393, we worked with the law enforcement community, specifically Lieutenant Olsen from the Las Vegas Metropolitan Police Department (METRO), and we agreed the language contained in sections 1 and 2 of S.B. 393 is fine.

 

Senator Raggio:

We are not familiar with S.B. 393; therefore, please explain the sections.

 

Mr. Jackson:

Certainly, Mr. Chairman. Senate Bill 393 originally opened access to student educational records to a number of different agencies, to which the NSEA and school districts had grave concerns. The bill was indefinitely postponed for various reasons. Lt. Olsen explained that law enforcement needs to be able to look at education records of handicapped children who are eligible for services in the school district when a parent is concerned about potential abuse or sustainable acts of abuse, in order to ascertain whether there is anything in the records that would sustain allegations. We have no objection to the language in section 2 of S.B. 393, which requires both the request and consent of a parent. The concerns in sections 4 and 11 of S.B. 393 are, without any sort of consent, to allow other agencies to look at the records. We want to support the goal of law enforcement to fully investigate acts of alleged abuse; therefore, we have no objection to sections 1 and 2 of S.B. 393 remaining. It has been agreed to withdraw sections 4 and 11 of S.B. 393, and I understand Assemblywoman Giunchigliani agrees as well.

 

Senator Raggio:

What about section 3 of A.B. 264?

 

Assemblywoman Giunchigliani:

Section 3 of A.B. 264is the one-fifth retirement credit for at-risk schools.

 

Mr. Jackson:

We are not addressing that.

 

Senator Raggio:

Are you saying you support sections 1 and 2 of A.B. 264, but you do not want the bill processed with sections 4 and 11?

 

Mr. Jackson:

We are fine with processing A.B. 264 should sections 4 and 11 be removed.

 

Stan Olsen, Lobbyist, Lieutenant, Las Vegas Metropolitan Police Department, and Nevada Sheriff’s & Chief’s Association/South:

Mr. Jackson explained it accurately and we support it.

 

Senator Coffin:

I understand there is agreement on removing sections 4 and 11 of A.B. 264, and I assume those sections are from the original bill or Senate action. I realize the tendency for people to want these records to be kept private, but how else will juvenile authorities find out about a student who might be potentially violent? I am unsure whether or not there is harm in letting juvenile authorities have access to the records, assuming the usual standards of secrecy are maintained.

 

Lt. Olsen:

For the most part, we are not in the business of trying to identify potentially violent people. We will be looking at criminal activity that has occurred and things of that nature. Assembly Bill 264 would still allow law enforcement to provide an avenue to parents who feel their child was possibly the victim of a criminal activity, and give law enforcement the opportunity to look at the records and make that determination.

 

Janine Hansen, Lobbyist, Nevada Eagle Forum:

We are pleased to hear willingness to remove sections 4 and 11 of A.B. 264. We are concerned about those sections because they violate the Federal Education Rights and Privacy Act. Also, the bill that took 8 years to get passed, S.B. No. 168 of the 69th Session passed in 1997, follows right in line with federal regulations. Our concern is that sections 4 and 11 of A.B. 264 be removed so there will be no violation of parent and pupil privacy, due process, and search and seizure.

 

I distributed a copy of an article from the Education Reporter (Exhibit L) regarding the long-fought battle to get those protections into Nevada State law. I also have a copy of the Federal Education Rights and Privacy Act, should you care to see it.

 

Laura M. Mijanovich, Lobbyist, American Civil Liberties Union of Nevada:

Regarding the release of certain records of students, we urge you to drop sections 4 and 11 of A.B. 264 for the reasons stated. These sections violate FERPA and the constitutional right of privacy. In addition, release of these kinds of documents must be made pursuant to court order and only pursuant to court order. It is up to judges to decide when such privileged information should be released to law enforcement and under what circumstances. We urge you to drop those two provisions.

 

Richard L. Siegel, Lobbyist, American Civil Liberties Union of Nevada:

In response to Senator Coffin’s comment, we can still proceed under court order in these procedures, and should there be disagreement between the Legal Division of the Legislative Counsel Bureau and our general counsel, we ask the Legal Division to consider the points brought to the issue by our general counsel. In particular, if we were to move toward the language in sections 4 and 11 of A.B. 264, they would have to be carefully stated in terms of the conditions and process by which information might be turned over without the permission of parents.

 

Senator Raggio:

Was A.B. 264 heard and did you make your comments on sections 4 and 11 in the Assembly?

 

Mr. Siegel:

The American Civil Liberties Union did not know sections 4 and 11 of A.B. 264would be amended into the act.

 

Ms. Hansen:

This was not contained in the original bill, A.B. 264, and the bill in which it was contained did not pass out of the Assembly. I am not surprised it showed up here.

 

Senator Raggio:

Frankly, I am looking at this for the first time. Section 4 of A.B. 264, as we read it, states a public school, except as provided in the U.S. Code, which is stricken out for some reason, shall not release education records to a person or organization without written consent of the parent. There are exceptions, which I would like to review. The exceptions are: a juvenile probation officer or law enforcement officer or a district attorney conducting an investigation of truancy; a juvenile probation officer or district attorney conducting an investigation of a threat pursuant to NRS 392.915; and conducting a preliminary inquiry as a juvenile probation officer on some other matters.

 

I am interested in knowing whether or not there is some way law enforcement could look at education records, for example, if they are conducting an investigation on truancy. What will they have to do should we not pass this bill?

 

Mr. Siegel:

Our general counsel said they would have to get a court order, which is required by federal law.

 

Senator Raggio:

What about a threat? I am thinking of Columbine High School in Colorado. Should a threat be received and there is real concern, would a court order be required to look at education records on a particular student or students? The issue concerns me.

 

Mr. Siegel:

I appreciate your point; however, it is an issue of clarifying federal law.

 

Ms. Hansen:

It can be done with parental consent in compliance with the Federal Education Rights and Privacy Act. In any event, parents should be involved in the whole issue.

 

Senator Raggio:

I understand, but I am thinking about the Colorado situation. If law enforcement had information regarding threatening activities of two students, it seems to me it would be practical to go to the parents for their consent to get a court order to see their children’s education records.

 

Ms. Hansen:

Law enforcement would not need a court order if the parents agreed to allow access to the records.

 

Senator Raggio:

Would it be practical for law enforcement to go to the parents to ask their permission to look at the records because their child is suspected of making threats to murder people? Is that a practical solution? This is not to be argumentative.

 

Ms. Hansen:

I understand, but if the parents are not involved with the child, there will be a greater problem. The reason the portion citing federal law was removed is it violates federal law to allow access to education records without parental consent. There must be due process in order to accomplish it.

 

Senator Raggio:

I am not being argumentative, but after the Colorado event and some others, a lot of people asked why law enforcement did not do anything. On the other hand, I do not know what they could have done.

 

Ms. Hansen:

I think the first responsibility was on the people at the school, who knew what was happening, to contact the parents and begin the process, which apparently did not happen.

 

Senator Raggio:

If school officials suspected a threat to commit this kind of homicide, should they have gone to the parents and not law enforcement?

 

Ms. Hansen:

They are not precluded from going to law enforcement.

 

Senator Raggio:

I am just being practical. I see a real problem here.

 

Ms. Hansen:

It is always easier to avoid the rules for law enforcement, but the reason we have rules is to protect our constitutional rights, and at times they become burdensome. However, protecting constitutional rights is worth the burden and it is very important to maintain them. Occasionally, it might be inconvenient, but it does not matter because constitutional rights are inconvenient to government, especially law enforcement.

 

Craig Kadlub, Lobbyist, Clark County School District:

We support A.B. 264 and the deletion of sections 4 and 11. Although we initially supported section 3 of A.B. 264, it was with the caveat it come with some funding. We think it is a good idea and probably would draw some experienced teachers into some of the most at-risk areas, but, as written, it would impose a cost on our district of slightly more than $2 million. We appreciate and support it with the understanding funding would be provided.

 

Senator Raggio:

Are you saying without funding you would want section 3 of A.B. 264 deleted?

 

Mr. Kadlub:

It would be an unfunded mandate we could not sustain.

 

Senator Raggio:

You are saying without the funding, you would want section 3 of A.B. 264 deleted.

 

Mr. Kadlub:

Yes, sir.

 

Jeannie Simons:

I think many parts of A.B. 264 are great, but I would like to see section 4, subsection 3, paragraphs (a), (b), and (c), section 9, and section 11 removed from the bill. I also think disclosure of student records without consent can already occur, as demonstrated by two examples. The first example is, if an educational agency initiates legal action against a parent or student, such as truancy, the educational agency may disclose to the court, without a court order or subpoena, the educational records of the student that are relevant to proceed with a legal action as plaintiff. The second example, in regard to Columbine High School in Colorado, is an educational agency may disclose personally identifiable information from an education record to appropriate parties in connection with an emergency if knowledge of the information is necessary to protect the health or safety of the student, other students, or other members of the school community.

 

Senator Raggio:

From what are you reading?

 

Ms. Simons:

It is federal law, Title 20, Chapter 31 of U.S. Code, Section 1232g, which was my favorite thing to fight a few legislative sessions ago.

 

Senator Cegavske:

I want to say how nice it is to see Jeannie Simons again because we have not seen her for a while. She is probably one of the state’s biggest advocates for children.

 

Juanita Y. Jeanney, Washoe County School District:

Washoe County School District supports the deletion of sections 4 and 11 of A.B. 264. Additionally, we concur with Clark County on section 3 of A.B. 264. We support the concept of one-fifth retirement credit, should it be fully funded, otherwise it is an unfunded mandate which we cannot support. We would like to discuss section 2 of A.B. 264, which indicates a law enforcement agency or district attorney may investigate the denial rights to a pupil with a disability.

 

Senator Raggio:

That can be done upon the request of a parent.

 

Ms. Jeanney:

Correct. The Washoe County School District believes requirements of notification for student rights denial is already mandated in A.B. No. 280 of the 70th Session. Moreover, the Washoe County School District already has procedures for investigating violations of the civil rights of pupils with disabilities. Additionally, the Office for Civil Rights is available to parents should they not agree with local investigations. The Washoe County School District believes this area is already covered and a change would circumvent what districts have in place. The question is, why would we add the third agency?

 

Senator Raggio:

Do you want to delete section 2 of A.B. 264 as well?

 

Ms. Jeanney:

Yes.

 

Senator Raggio:

The hearing is closed on A.B. 264 and opened on A.B. 418.

 

ASSEMBLY BILL 418 (1st Reprint): Privatizes temporarily certain duties of State Public Works Board. (BDR 28-1189)

 

Ivan R. “Renny” Ashleman, Lobbyist, State Public Works Board:

Assembly Bill 418 sets up two pilot projects to test the usefulness of private construction management. The understanding is to do it on two large jobs, both provisionally chosen to be at the university system. I am distributing an amendment (Exhibit M) that refers to the selection of the construction manager, which would ordinarily involve a team using design professionals, engineers, and so forth, besides a construction company. It could be any of the three, or combinations of them, and those not suitable for the lowest bid. An architect is prohibited by law, in many cases, from being involved in a low bid situation. It allows a selection process, as done currently, when professionals are used. It is a good idea when obtaining construction managers, particularly for large jobs. Using a low bidder to manage a job was done by Clark County in construction of its justice center, which did not work out very well. There are a couple of other examples of that type as well. I think most people familiar with the construction industry would concur with that statement.

 

Daniel K. O’Brien, Manager, State Public Works Board

We support A.B. 418 and the amendment. I provided a copy of the qualification-based selection process used for architects and engineers (Exhibit N), and also Nevada Administrative Code provisions that refer to state purchasing, as well as the Public Works Board, which outline professional services done through a competitive selection process (Exhibit O).

 

Senator Raggio:

What kind of projects do you anticipate?

 

Mr. O’Brien:

I provided testimony during the capital improvement program (CIP) process regarding the University of Nevada, Las Vegas (UNLV), engineering and science project. There is a construction manager line item in the budget, and the university supports having a construction manager on the project. Basically, the person will be on the job full-time, looking out for the interests of the state, which is a large benefit to the project itself. There are other projects being considered, possibly the psychiatric hospital in southern Nevada, and perhaps others.

 

Senator Raggio:

Are you familiar with this type of supervision?

 

Mr. O’Brien:

A construction manager was used to complete the veterans’ home and coordinate the subcontractors to complete the job and look out for the owners. I have no personal experience with a new project from the outset. We are not funded for a full-time project manager. Our project managers typically manage 10 or 11 projects at a time; therefore, having a representative on the site is an advantage.

 

Senator Raggio:

Please explain the fiscal note which shows an expense of $2.8 million in the first year and $6.3 million in the second, and from whence it comes.

 

Mr. O’Brien:

The fiscal note was based on the original wording of A.B. 418. It does not apply at this point, and was done when all the Public Works Board project management and inspection services would be provided through contracting.

 

Senator Raggio:

We are looking at A.B. 418. Is that correct?

 

Mr. O’Brien:

That is correct, and there is an amendment to the bill.

 

Senator Raggio:

The amendment changes the part that says, “solicit bids for contract to select through a qualification based selection process.” Is that the only purpose of this amendment? Where is the limitation in the bill on the number of projects that would be contemplated?

 

Mr. O’Brien:

It is in section 1 of A.B. 418 where it states, “… notwithstanding any other provisions of law to the contract contrary to the State Public Works Board shall with respect to two separate projects for new construction or major repairs that are approved by the Legislature for the 2003-2005 biennium.”

 

Senator Raggio:

It is a redo of the original bill. Is there a fiscal note on this bill?

 

Mr. O’Brien:

No, we would remove it.

 

Senator Raggio:

Who would pay the cost of the private person or business selected to do this, and from whence would the cost come?

 

Mr. O’Brien:

It would come from the project itself, which is outlined in A.B. 418, and says, “The cost of each contract awarded and executed pursuant to this section must be financed from the capital construction program approved by the Legislature.”

 

Senator Raggio:

You mentioned the UNLV engineering and science building project. Therefore, should we approve this, and that becomes one of the projects, will you return and request more funding for the cost of that project?

 

Mr. O’Brien:

No.

 

Senator Raggio:

Are you going to say, because of this we must cut back some of the project because we need to accommodate this payment?

 

Mr. O’Brien:

No.

 

Senator Raggio:

The hearing is closed on A.B. 418 and opened on A.B. 534.

 

ASSEMBLY BILL 534 (2nd Reprint): Makes various changes concerning State Public Works Board. (BDR 28-556)

 

Mr. O’Brien:

Assembly Bill 534 sets up and clarifies the capacity of the manager of the State Public Works Board, and the State Public Works Board as the building official for state projects on state land. It also provides the penalty, and with past amendments, the penalty was a misdemeanor. It was originally listed a gross misdemeanor with a $10,000-a-day fine, but as a misdemeanor, it is a $5,000‑a-day fine for working over a stop-work order. This is the same kind of provision utilized by all building departments across the state, as well as the state fire marshal. Current legislation has no provision for the issuance of a citation when a contractor works over a stop-work order.

 

There are also provisions regarding change orders on small projects less than $10,000, and it would allow a change order to be an amount equal to the contract when it is under $10,000. The reason is, with a $10,000 contract, the 10 percent limitation, currently in the statutes, would only allow a $1,000 change order.

 

Also, regarding a state department, board, commission, or agency that provides the board money that has been appropriated by the Legislature for a capital improvement project, page 5, line 16 of A.B. 534 (2nd Reprint) says, “ … any interest earned on the money accrues to the benefit of the project.” An example would be the UNLV project in which it is providing $25 million in donor money, and its own money, to the project. The interest on any money deposited with the State Public Works Board and the state of Nevada would accrue to the benefit of the project. We felt this was only fair. It has been a detriment in the past not to allow for that because certain agencies do not want to provide $2 million to $3 million to the State Public Works Board with the interest going to the General Fund. This would eliminate the problem. Everyone seems to be satisfied with it.

 

Page 5, line 24, section 3 of A.B. 534 contains provisions on priorities of how the money is to be spent. During a prior committee hearing, this was rearranged. Money received for the project from the federal government will be spent first; money generated from the state department, board, commission, or agency, such as donation money, will be spent second; money approved from a previous biennium would be spent third; then general obligation bonds, General Fund, and any other source of money would be spent. This would be money spent after being deposited with the board. There was some concern donation money would have to be provided to the State Public Works Board up front before entering into an architectural contract.

 

Senator Raggio:

I think the university and community college system raised that issue.

 

Mr. O’Brien:

That is correct.

 

Senator Raggio:

What is the response?

 

Mr. O’Brien:

This would only be money after it is deposited. In the current CIP, and I believe it will be proposed in the new CIP, it requires the money be deposited prior to entering into a contract for construction, therefore, any money that would be matching funds from the …

 

Senator Raggio:

What about design?

 

Mr. O’Brien:

It would not be for design.

 

Senator Raggio:

Is that clear in the bill? We are way behind schedule and must complete the hearing on this bill and other measures; therefore, the committee will recess at this time, 11:26 a.m.

 

Let us now resume our discussion at 4:41 p.m.

 

Mr. O’Brien:

When we left off this morning we were on section 8 of A.B. 534, discussing the order of expenditure. There were concerns regarding how it would affect the university system when it provides donor money as well as its own money. We looked at the issue during the recess and are proposing an amendment (Exhibit P) that adds a couple of words to clarify the bill.

 

The order of spending would allow for actual donor money to be spent first, as well as federal money, and so forth, before bond money. Any leftover project money would go back to the bond redemption account. Therefore, section 8, subsection 3 of A.B. 534, now says:

 

Except as otherwise provided in subsection 4, if the actual money received by the Board for a capital improvement project includes money from more than one source, the money must be expended in the following order … .

 

We believe that should clarify the issue. 

 

Mr. Ghiggeri:

The university system is concerned it would have to provide funding during the design phase and not be able to raise cash for the construction.

 

Mr. O’Brien:

The CIP typically provides matching funds prior to going out for award of contract and that is when it would actually provide the funds. Therefore, where the amendment says, “received by the Board,” it would not occur until the money is actually received.

 

Section 9 of A.B. 534 has a provision wherein when the State separates a project into individual pieces. It clarifies the savings will result to the State, not to the lowest responsive bidder. A project will not be broken up to benefit the bidder, it will be to the benefit of the State. That is the only other provision.

 

Senator Raggio:

That was existing language that is being corrected.

 

Mr. O’Brien:

Yes, we did not amend any of it.

 

Senator Rawson:

We had some concerns or complaints about the penalties. I think there are people in the system who fear being charged.

 

Mr. Ashleman:

The penalties for going over a stop-work order are true to the contractor, not to the agency. This is the same wording and it includes the same size penalties generally employed by local governments. I think we are the only entity with responsibility for inspection that does not currently have these powers.

 

Senator Raggio:

The hearing is closed on A.B. 534 and opened on A.B. 441.

 

ASSEMBLY BILL 441 (2nd Reprint): Enacts provisions relating to ensuring security of State of Nevada and its residents with respect to acts of terrorism and related emergencies. (BDR 19-1139)

 

Assemblyman Richard D. Perkins, Assembly District No. 23:

I am here today sponsoring A.B. 441 which takes a very comprehensive approach to protecting the state’s infrastructure and its citizens against terrorism. The definition of active terrorism in the most current version of section 5 of A.B. 441 is one word different than that in A.B. 250, which will have to be reconciled. Last week the United States Department of Homeland Security once again raised the terror alert to orange, the second highest of five levels. States across the country responded by increasing security at airports, state buildings, chemical plants, nuclear facilities, symbolic sites, and national monuments. The various states have also beefed up police presence along the United States borders and at ports, and have added more inspections of vehicles at border crossings and access roads. I mention this because these actions are very relevant to A.B. 441 and its provisions to protect Nevada’s infrastructure.

 

ASSEMBLY BILL 250 (3rd Reprint): Makes various changes regarding certain acts relating to terrorism, weapons of mass destruction, biological agents, chemical agents, radioactive agents and other lethal agents, toxins and delivery systems and enacts provisions concerning responses to emergencies. (BDR 15-49)

 

Assemblyman Perkins:

Because I recognize it is critical to protect the residents of Nevada and visiting tourists against any possible act of terrorism, I introduced A.B. 441 to give our first responders, law enforcement, firefighters, emergency medical technicians, National Guard members, and health care workers the tools they need to better respond to acts of terrorism in all emergencies.

 

During the past year, I had the privilege of serving as a member of the National Conference of State Legislatures (NCSL) Task Force on Protecting Democracy. The bipartisan task force is comprised of 20 other legislators and several legislative security staff representing states in every region of the country. The task force worked closely with several federal agencies including the Department of Homeland Security and its director, now cabinet secretary, Tom Ridge.

 

The idea for drafting and introducing A.B. 441 came about because of the work on the task force and my recognizing Nevada needs legislation to improve several key elements of state security and emergency response. The provisions of A.B. 441 are consistent with what has been recommended by the NCSL task force and legislation actively proposed in many states.

 

As a brief overview of the bill and its major provisions, let me indicate A.B. 441 enacts state security provisions concerning emergencies and acts of terrorism. The bill addresses, among other things, critical infrastructures, government oversight continuity, communications and interoperability, and government documents. Section 12 of A.B. 441 creates the Nevada Commission on Homeland Security, consisting of the Governor or his designee as the chairman, and 14 voting members. The Senate Majority Leader and the Speaker of the Assembly shall each appoint two members from our respective Houses. The Governor is responsible for appointing the other 10 voting members of the commission to include at least one person from the private sector, and others who should have expertise in specific areas such as law enforcement, firefighting, public health, and counterterrorism. In addition, the Governor may appoint as many nonvoting members as he chooses. The voting members of the commission may elect a vice chairman from the members.

 

With representatives of the Governor’s Office, I discussed some concerns about the appointing authority for the Commission on Homeland Security. I believe their approach is friendly to the bill.

 

Assemblyman Perkins:

Section 17 of A.B. 441 sets forth the duties of the commission to include making recommendations to the Governor, the Legislature, state agencies, local governments, businesses, and private citizens about actions to be taken to protect against terrorism; proposing goals and programs to counteract acts of terrorism; ensuring the safety of Nevada’s residents and the critical infrastructures of the state by identifying the susceptibility of those infrastructures to terrorist acts; examining the use and deployment of response agencies; reviewing the interoperability of the state’s communication systems and the efficacy of emergency 911 telephone systems, and, particularly, establishing a state plan for the compatibility and interoperability of the state’s information and communication systems for response agencies; coordinating between government agencies to avoid duplicative emergency response programs and policies; and conducting other activities to protect and enhance the safety of the State of Nevada, its residents, and its visitors.

 

The other major provisions of A.B. 441 include providing for confidentiality of certain documents or records, such as drawings, maps, or plans of security systems in important public buildings and facilities; requiring each political subdivision to establish a local emergency management organization and to adopt and maintain a plan to respond to acts of terrorism or related emergencies; establishing a plan for the continuity of state government in certain cases of disaster or emergency; requiring public utilities to conduct vulnerability assessments regarding potential terrorist attacks and prepare emergency response plans; revising provisions governing the issuance of state driver’s licenses and identification cards; and requiring state and local governments to comply with the state plan for compatibility and interoperability of information and communication systems used by response agencies in Nevada. State and local governments are prohibited from purchasing such systems unless they comply with the state plan that must be established by the Nevada Commission on Homeland Security.

 

For the record, I would like to state it is not my intent for the state and local governments to have to comply with these requirements until the state plan is actually adopted by the commission. I would also like to point out all affected state and local agencies will have an opportunity to help develop the plan when the commission does the study required under subsection 5, section 17 of A.B. 441.

Finally, A.B. 441 requires the placement of automated external defibrillators in certain public buildings with high pedestrian traffic, or house agencies serving large numbers of persons.

 

In closing, I know all of us recognize the difficult challenge faced in addressing these types of acts. We are fully aware of the delicate balance we must strike as a nation and as a state to protect our citizens on the one hand, and our civil liberties on the other. I want to assure you I will continue to make certain this, or any legislation with which I am involved, will uphold and promote the constitutional rights of our citizens.

 

Senator Raggio:

Is the definition of an act of terrorism in A.B. 441 the same as the definition in A.B. 250?

 

Assemblyman Perkins:

My understanding is they are the same. I was alerted earlier by a staff member there may be a one-word difference in one of the amendments that may need to be changed in order to reconcile the two bills, but the essence of the two definitions are the same.

 

Senator Coffin:

Section 21 of A.B. 441 talks about documents prepared and maintained for public response agencies. The same agencies that handle everyday police work and firefighting, as well as other utility work, are also responders to terrorism. There are millions of people in this country who listen to scanners and like to follow the local police. Books and documents containing those frequencies outlined as confidential are, in fact, public record. No state act could possibly make listening to or publishing those frequencies an illegal act. I do not think it could be stopped because the airwaves are public.

 

We get into another area here, for example, maps, plans, drawings, and records revealing the critical infrastructure of primary buildings. At great expense, I purchased a complete set of the entire plans of Hoover Dam with the intention of reselling them some time. I suppose if some agency should come along and buy them to keep them out of the public domain, they can come to me and pay my price.

 

These kinds of things are typical of what could happen if a bill is passed to make something illegal that, in fact, is a matter of custom. I worry about that. There are many people who listen to radio frequencies and police reports and receive great enjoyment from it. Sometimes it is a hobby, sometimes an impulse, but whatever it is, they do not do it as a criminal activity; in fact, they help the police. As I see it, you would be making their actions a gross misdemeanor.

 

Assemblyman Perkins:

Section 21, subsection 1 of A.B. 441 says specifically the Governor make determinations by executive order. There are documents and things in the public venue that would never be determined as security concerns. I do not think anybody could declare your personal holdings to be a threat. This legislation speaks to items housed by government. For example, we would not want to release the security system for the legislative building, although a person could walk around long enough and figure it out. However, we would not want it to be in public view because it might accommodate a terrorist. It only pertains to executive order and the Governor makes the declaration. A person who collects items such as yours would have the ability to explain to the chief executive the reason an executive order in his or her case is not appropriate. I do not think the Governor would consider these decisions lightly.

 

I fully agree with you in regard to scanners and frequencies. I can tell you many incidences of citizens who listen, contact my agency, and are very helpful with law enforcement activities in the City of Henderson. Quite honestly, the radios have scrambling capability for secret and high-risk operations.

 

Senator Coffin:

As long as the plain language says it, the Governor could use the power of the State to push that point. I do not know how it would be settled with the language of the law, as plain as it is.

 

Ms. Hansen:

We are pleased with many sections of this bill, and I will highlight some of them. We are much happier with the definition of terrorism and feel it is an improvement over the original definitions in several previous bills. Page 4, lines 21 through 24, section 12 of A.B. 441, considers the fact there will be members of the Legislature who will be part of the Homeland Security Commission. We think it is important to have legislators involved, and we support it.

 

Section 26 of A.B. 441 addresses the continuity of government. Of course, it is provided for in article 4, section 37, in the Nevada State Constitution. There is a well thought-out plan for the continuity of government in this particular bill. One of the things added since the original, which I think is particularly important, are in lines 29 through 32 of A.B. 441, which allows the Legislature to call itself into session if the regular succession of the Governor is not available and it must elect a Governor as an emergency measure.

 

Senator Raggio:

That would only apply if none of the successors were available.

 

Ms. Hansen:

Correct. I think it is an important safeguard, which was not in the original bill, and we support it. Page 12, lines 36 through 38 of A.B. 441 provides that the Legislature can select an alternative location, which is also an important issue with regard to the issue of terrorism.

 

Senator Raggio:

We think Senator Coffin sneaked that in there.

 

Ms. Hansen:

I supported him in doing that in another bill. I support it and think it is important, when you consider there might be a circumstance such as a biological or nuclear attack, and the place where the Legislature meets must be changed.

 

Also, page 13, lines 1 through 4 of A.B. 441 provides for the elections as soon as possible under the direction of the Secretary of State. I think it is wise not to go on for an extended period of time without going through the regular process of electing people to replace those who may have been lost in a terrorist attack.

Page 20, section 34 of A.B. 441 addresses the Department of Motor Vehicles being able to refuse to accept a driver’s license from another state should it have less stringent standards than the State of Nevada. Some other states have already started doing this, such as Virginia, which issued driver’s licenses and other things to people involved in terrorist attacks on the United States. This is an important provision when looking at the fact every person involved in the September 11, 2001, incident was in the country illegally, and yet they had the needed documents to operate in the United States, including driver’s licenses. We have been involved and concerned with terrorist legislation this session and support the provisions of the bill.

 

Lt. Olsen:

We supported all terrorist legislation that has come through this body this session. We support A.B. 441, which will give us the tools needed to help protect the community.

 

Mr. Hillerby:

We have been involved and interested in specific sections of A.B. 441. A proposed amendment (Exhibit Q) is being distributed. Senate Bill 175 was processed and passed by the Senate and has gone through part of the process in the Assembly. It also dealt with the creation of a Homeland Security Commission, as well as some specific information about the security of information technology information to prevent hacking and access to sensitive information.

 

SENATE BILL 175: Makes various changes with respect to security of State of Nevada. (BDR 18-536)

 

Mr. Hillerby:

We believe the advisory commission, as outlined in S.B. 175, and seen on the bottom half of the front page of the proposed amendment (Exhibit Q), is more workable. In A.B. 441, the committee has four legislators appointed by the speaker and majority leader; therefore, none of the Executive Branch employees has a vote. The specific roles spelled out in A.B. 441 would be, by their nature, those of Executive Branch employees. We feel the language regarding the advisory commission, as passed in S.B. 175, makes more sense.

 

The amendment would delete the language regarding the advisory commission in sections 12 and 13 of A.B. 441 and replace it with the language in S.B. 175.

 

Page 1, section 15, subsection 3, of the proposed amendment (Exhibit Q) refers to legislative pay. The marked out part at the bottom of the page was an inadvertent addition.

 

Sections 30 and 31 of A.B. 441 are important in regard to communication systems. The Homeland Security Commission needs to take a thorough look at how to establish a statewide interoperabable communication system. A state committee previously titled the “Weapons of Mass Destruction Committee” was renamed the Homeland Security Committee. The committee has operated with emergency management and other entities in state government since September 11, 2001, which was obviously after the last legislative session. Although continued work on a communications plan is important, it will take time and impact the finances of local governments. Therefore, we suggest the purchasing prohibitions contained in sections 30 and 31 of A.B. 441 be moved from July 2004 to July 2005, which would give everybody another bite of the apple in front of the Legislature. Local and state governments need to be involved, as well as federal agencies that deal with wildfires and so forth.

 

Sections 32 and 33 of A.B. 441 require the Health Division, as well as certain counties, to provide automatic defibrillator devices in local government buildings of a certain size, and a funding mechanism to accomplish it. We suggest deleting those sections to deal with the fiscal note issue and eliminate another burdensome requirement on local governments.

 

Page 2 of the proposed amendment (Exhibit Q) is lifted in its entirety from S.B. 175, and deals with the confidentiality of certain information technology records and information. The last underlined line on page 2 keeps the act of terrorism consistent with section 7 of A.B. 250, previously passed by both Houses.

 

Senator Raggio:

It is a large amendment that pretty much changes A.B. 441. Has the sponsor agreed to it?

 

Mr. Hillerby:

I discussed many of the changes with the sponsor. When S.B. 175 expired on the desk last week, the sponsor indicated he would testify in the Senate in regard to the Homeland Security Commission and information technology. The sponsor considers the proposed amendment (Exhibit Q) friendly. The other parts of the proposed amendment are not major changes; however, deleting automatic defibrillators and other parts would make the legislation more workable.

 

Senator Raggio:

Does your proposed amendment (Exhibit Q) take all reference to the defibrillator equipment out of the bill?

 

Mr. Hillerby:

It does.

 

Senator Raggio:

It also removes the proposed commission appointed by the Legislature and replaces it with the advisory commission referenced in S.B. 175.

 

Mr. Hillerby:

That is correct.

 

Senator Coffin:

At the bottom of page 1 of the proposed amendment (Exhibit Q), it is scratched out, indicating sections 21 through 26 of A.B. 441 are deleted. Are those sections to be deleted?

 

Mr. Hillerby:

Those sections are to be deleted. We were not involved with the sections pertaining to policy matters; however, we feel there is a benefit to discussing succession planning in the event of a catastrophic emergency.

Senator Coffin:

Communication frequencies are public record, they are published, and people know they are being listened to most of the time. There are computer-driven programs that allow people to listen to digital frequency hopping techniques. It seems to me, a mechanism must be found to transmit in such a way people cannot listen in. Technology designed by governments is frequently defeated by individuals who want to break in and listen. Should the Governor determine information is confidential, how would it be enforced, and why would you want to make criminals out of citizens? It is a problem, and I do not think you advocated it. It seems the language is overreaching the police boilerplate.

 

Mr. Hillerby:

I would certainly not want to make criminals out of citizens. These sections of A.B. 441 came from the sponsor. There was significant testimony from the press association and others in the Assembly. We specifically stayed out of the debate regarding those particular sections. If the policy decision of the Legislature is to provide a mechanism for some level of confidentiality on certain documents, and the choice is an executive order from the Governor, we will abide by it. It is not this Governor’s intention to make those kinds of activities criminal. Lt. Olsen can testify more accurately about changing technology. Work is being done to scramble frequencies to prevent certain individuals from listening in, and there is probably as much effort on the other side in an attempt to break the scramble. Should this legislation be passed, Governor Guinn would seriously consider any decision to declare anything confidential. Public access is very important to democracy, and a policy decision regarding it is best left to the Legislature.

 

Senator Coffin:

This was not even done in World War II. I have studied the history of these things and people were not restricted to listening in on “radio cars,” which is what police vehicles were called in World War II. You cannot stop people from doing it just because of the law. I would hate to see a person who either published or purchased a book be dragged in by accident.

 

Lt. Olsen:

It is our interpretation these are tactical channels, which are not published and not easy to access. We work off microwave systems, which is a very expensive way to receive radios. We also work off scrambling systems, which change frequencies multiple times per minute, with the radio used for those types of tactical operations. It is my understanding the regular day-to-day radio traffic is not what we interpreted in this bill, nor is it the intent.

 

Senator Coffin:

Is there a way to word it when a tactical situation involving a national or emergency nature occurs. I would feel more comfortable if there was language to tighten it down. You talked about tactical situations, which could bring in the guys calling each other to arrange to meet for doughnuts and coffee at Starbucks.

 

Lt. Olsen:

Our interpretation is that if a person uses the frequencies with intent to further criminal activities, the greatest concern would be tactical channels.

Richard Mirgon, Director of Communications, Douglas County:

We support the proposed amendment (Exhibit Q) with some reservations. We are concerned about the potential impact to local governments on an unfunded mandate, depending upon what the plan might say. As it stands currently, we believe the bill is workable.

 

Senator Raggio:

Having heard the proposed amendment, does anyone want to change his or her testimony on A.B. 441? Is there any more testimony on A.B. 441? I would like to hear from Speaker Perkins regarding the proposed amendment (Exhibit Q). The hearing is closed on A.B. 441 and opened on S.B. 464.

 

SENATE BILL 464 (1st Reprint): Revises provisions relating to vessels. (BDR 32‑1240)

 

Senator Raggio:

Senate Bill 464 deals with vessels. We asked for an amendment on the measure and now have Amendment No. 915 (Exhibit R). Staff expressed concern that amending the bill and removing the reference to tax on what is called “occasional sales” might cause a significant fiscal impact as a result of lost revenue.

 

Dino DiCianno, Deputy Executive Director, Department of Taxation:

I would like to make clear, the Department of Taxation has no position with respect to S.B. 464. I reviewed the amendment and what is left is section 1 of S.B. 464, which would allow moving permits for vessels purchased from out‑of-state residents to move them to their states of residency.

 

Section 7 of S.B. 464 would continue to allow a trade-in allowance with respect to a boat purchased in the state. The deletion of section 4 of S.B. 464, which was an attempt to mirror the statutes related to the sale of vehicles, would remove the fiscal impact to the Department of Taxation. We would no longer need the request for a tax examiner and any other associated support costs. Sections 1, 7, 10, 11, and 12, which relate to those documented vessels that would be required to pay a use tax if the vessels are used on Nevada waters, are left in. The net effect, with respect to section 1 of S.B. 464, would be a loss of revenue. With respect to section 7 of S.B. 464, there would be a loss of revenue; however, with the provisions contained in sections 10, 11, and 12, those additional revenues would make it a wash.

 

Senator Raggio:

Why are there additional revenues as a result of sections 10, 11, and 12 of S.B.  464?

 

Mr. DiCianno:

Currently, those documented vessels are exempt under the sales and use tax provisions. Revenue could be collected on those vessels by bringing them under the use tax provisions.

 

Senator Raggio:

That is very helpful. Thank you. With no objections noted, we will utilize Amendment No. 915 to S.B. 464. The hearing is closed on S.B. 464 and opened on S.B. 132.

SENATE BILL 132 (1st Reprint): Requires licensure of persons engaged in certain activities relating to control of mold. (BDR 53-235)

 

Senator Raggio:

Senate Bill 132 was heard in this committee on April 30, and Senator Coffin requested an amendment.

 

Senator Coffin:

Amendment No. 908 to S.B. 132 (Exhibit S. Original is on file in the Research Library.) will significantly reduce the fiscal note previously attached by agencies, but will still maintain the spirit intended by the bill to provide protection for all of us. There were extensive hearings, one in the full Senate Committee on Commerce and Labor, one in a subcommittee of the Senate Committee on Commerce and Labor, and one in the Senate Committee on Finance. The amendment was drafted with the assistance of Mr. Ashleman, who will inform us who agreed to support S.B. 132.

 

Ivan R. Renny Ashleman, Lobbyist, State Public Works Board, and  Southern Nevada Homebuilders Association:

Amendment No. 908 to S.B. 132 (Exhibit S) is a complete replacement amendment. There have been extensive hearings on S.B. 132; therefore, I will attempt to hit the high points, particularly as they vary from the original presentation.

 

The first thing we have is a definition of “mold,” which means any form of multicellular fungi living on plant or animal matter. Significant added language is, “which may or may not be a health hazard.” There is a list of the various kinds of mold and a description of remediation, which are the same as those in the original bill. Under section 4 of the amendment, there is an exception for remediation of mold by a person in residence, or by the developer, contractor, or any subcontractor who constructed the residence. Frequently when residences are constructed, or there is a call back for amelioration under warranty or otherwise, it is easy to spot mold and simply remove it. At that point, there is no concern with what kind of mold it is because it will be removed before occupancy. This cuts down on the expense of the board in carrying it out. The intent of the bill is to reach individuals advertising themselves as experts in either certification or remediation of mold by running ads and promoting business in this area. There is a legitimate use for such persons, but we are trying to make sure they are, in fact, legitimate.

 

One of the ways we are trying to cut down the effect of the fiscal note is seen on page 3, section 5, subsection 3 of Amendment No. 908 to S.B. 132 (Exhibit S):

 

The Board shall not adopt any regulation concerning the effect various types of mold may have on human health or designating what types of mold are health hazards unless federal standards have been adopted for this purpose and the regulation of the Board is in compliance with those federal standards …

 

That process is currently under way and it is our expectation the drafters will meet federal standards. The alternative is: “… or the regulation is in compliance with generally accepted scientific practices for the remediation of mold.”

 

Currently, nine states are doing studies and several states have adopted laws along the lines suggested by Senator Coffin. They are beginning to set up things that might generally be accepted.

 

Senator Raggio:

Your reference to “board” pertains to which board?

 

Mr. Ashleman:

The board in this section pertains to the State Contractors’ Board.

 

Section 6, subsection 1, of Amendment No. 908 to S.B. 132 (Exhibit S) says: “The Board shall establish by regulation a schedule of fees designed to recover revenue to defray the cost of carrying out the provisions of sections 3 to 16, inclusive, of this act.”

 

We then go on to the enforcement sections wherein persons cannot engage in remediation of mold unless they hold licenses issued by the board. There are restrictions on who can be involved. An application must be submitted on a form prescribed by the board, an examination approved or administrated by the board must be passed and satisfactory proof of that provided to the board.

 

Senator Raggio:

Would the State Contractors’ Board develop the examination?

 

Mr. Ashleman:

Yes, they would.

 

Senator Raggio:

Do they have the examination at the present time?

 

 

Mr. Ashleman:

They do not have the examination at present.

 

Section 8, subsection 3 of Amendment No. 908 makes sure participants are insured for the appropriate activities.

 

Section 9 encompasses the familiar statements by the Welfare Division, such as placement of restrictions on all those engaged in professions that require licensing, the restrictions on renewal involved with those court orders for support of a child, and so forth. The section also requires a social security number be included.

 

In section 11, subsections 1 and 2 indicate licenses expire December 31 of each year, requires evidence of continuing education must be submitted, payment of annual fees, and submission of the statement mentioned in section 9.

Section 12 says:

 

The State Environmental Commission shall adopt, by regulation, standards for the disposal of mold and material containing mold removed from a building or structure during a project for the remediation of mold.

 

It must be remediated in regard to disposal by the State Environmental Commission. Should the board receive a copy of a court order requiring suspension, it tells how to handle it, deal with the district attorney, the reinstatement, and so forth, based on those efforts.

 

Section 14 of Amendment No. 908 is the penal section for violating the requirements, which allows for administrative fines, revocation of licenses, and so on. Allowing any administrative fine does not preclude criminal prosecution as previously allowed by the bill. Page 8, section 14, subsection 3 says:

 

If the license of a contractor for projects for the remediation of mold is revoked pursuant to this section, and the owner of a building or structure upon which the contractor is engaged in a project employs another licensed contractor to complete the project, the original contractor may not bring an action against the owner of the building or structure for breach of contract or damages based on the employment of another contractor.

 

Section 15 of the amendment calls for notice of any intent to revoke a license and prescribes a statement of the authority, jurisdiction, and reasons for the action. However, it does allow summary suspension of the license if there is a public health threat. Section 15, subsection 3, provides for a hearing to contest summary suspension or proposed revocation, prescribes the hearing dates, and so on.

 

Pages 8 and 9, section 16, allows the board to go to court for competent jurisdiction. An injunction may be issued without proof of actual damage sustained by any person as a preventive as well as a punitive measure. An injunction does not relieve the person from criminal liability and re-creates the misdemeanor language.

 

The new language simply coordinates with the statutes by putting in appropriate references until page 16 of Amendment No. 908 to S.B. 132, which amends chapter 625A of NRS, the environmental specialist portions of the Nevada statutes. It takes up the issue of inspection and testing of mold as opposed to the remediation issue. Inspection and testing of mold is defined and includes, without limitation, visual inspection, surface sampling, air monitoring, and laboratory analysis. It repeats the definition of mold and the requirements for regulations as previously done with the State Contractors’ Board, except it refers to inspection and testing of mold and to the Environmental Board. It has the same limitation on federal standards or regulation for scientific practices. It makes it a fee process and carries out the other restrictions.

 

Senator Raggio:

Is it a different board after chapter 625A of NRS?

 

Mr. Ashleman:

Correct. It is then the Environmental Board.

 

Senator Raggio:

That is for the inspection and testing. Would someone who might be involved in both inspection and testing and in remediation be licensed under both sections?

Mr. Ashleman:

That is correct.

 

Senator Coffin:

I have a point of clarification. I think the original bill said a person could not do both remediation and testing on any one single job.

 

Mr. Ashleman:

We need to check on it.

 

The final part coordinates it with the Consumer Affairs Division and the miscellaneous provisions therein. Page 28, section 52, makes it a violation of the Consumer Affairs Act so action can be taken. Page 38 contains the effective clause. It becomes effective July 1 for the starting of regulations for preparatory administrative tasks, which do not become effective until October 1, 2004, and for other purposes allowing time for the boards to put together their various regulations and administrative procedures.

 

Senator Mathews:

Most licensing boards allow a 2-year requirement in regard to continuing education because requiring it every year would never give a person time to practice. Would you object to making it 2 years?

 

Mr. Ashleman:

It was in the original bill. I have no objection to 2 years, should the sponsor agree.

 

Senator Raggio:

What was the suggestion?

 

Senator Mathews:

Page 6, section 11, subsection 2, of Amendment No. 908 to S.B. 132 says on January 1 of each year they must give proof of continuing education. I suggest changing that to January 1 every other year, making it a 2-year continuing education requirement.

 

Senator Raggio:

Would they still renew the license every year?

 

Senator Mathews:

They would renew the license, but continuing education would be every 2 years. It is very difficult for a person who is working to continue education every year. As a nurse, I know continuing education in the classroom takes a lot of time away from work.

 

Senator Raggio:

I believe fees for the annual license are required in order to support the bill.

 

Senator Mathews:

I have no problem with the annual license fee.

 

Senator Raggio:

Is that correct, gentlemen?

Mr. Ashleman:

That is correct, Senator. I think Senator Mathews wants to allow a 2-year period to complete continuing education. I have no problem trying it experimentally until the next session.

 

Senator Rawson:

Do we need to make a change in the language? Page 6, section 11, subsection 2, paragraph (d), of Amendment No. 908 to S.B. 132 (Exhibit S) says, “Submit evidence satisfactory to the board of his completion of the requirements for continuing education or training established by the board, if any.” It seems to me it could be done by regulation.

 

Senator Raggio:

What is the fiscal note on the amendment? A fiscal note from the Division of Industrial Relations indicated a significant fiscal impact and expenditures would be increased in the areas of personnel, equipment, and information technician training and operating. The first year was $437,000 and the next year $347,000, and a number of positions were required. Is there an update?

 

Senator Coffin:

That was the Division of Industrial Relations’ fiscal note, and they are no longer involved in the process. I think the idea is they confronted the unknown and had brought all their ammunition to ascertain what they could get out of it. Due to the fact this is a fee-driven agency, it will need start-up money because they may have to hire a consultant. The effective date of their regulations is October 1, 2004. Spreading out the time will give them a chance to beg and borrow all the regulations that are now, or will be, in place; therefore, they will not have to do extensive research in order to plow the ground.

 

Senator Raggio:

We need to know what money is needed.

 

Senator Coffin:

I felt they would need start-up money because, as a fee-driven agency, they are sometimes a little on the edge.

 

Senator Raggio: 

Are you talking about the State Contractors’ Board?

 

Senator Coffin:

I suggest an appropriation totaling $50,000, $25,000 for the State Contractors’ Board and $25,000 for the Environmental Commission.

 

Senator Raggio:

Do we have communication from them that amount would be adequate for their purposes? Staff, can we contact them to ascertain whether it would be appropriate?

 

Senator Coffin:

They have not requested any money, but I am sure they would like more.

 

Senator Raggio:

The State Contractors’ Board does not receive General Fund money.

 

Senator Coffin:

That is correct. However, it is not unprecedented to appropriate money to a non‑general fund agency for start-up of something extraordinary. In many ways, we would be justified in turning them down for any money.

 

Senator Raggio:

Do you want to contact the State Contractors’ Board, or would you prefer staff contact them to ascertain their financial need?

 

Senator Coffin:

I will contact them.

 

Senator Raggio:

Please do that and get back to us. Amendment No. 908 to S.B. 132 (Exhibit S) is ready and, should it be somewhat livable, we can process the bill with the amendment.

 

Mr. Ashleman:

The sponsor asked me to identify others who worked on the amendment. Both southern and northern Nevada Associated General Contractors of America are familiar with the amendment and expressed support thereof.

 

Senator Raggio:

The hearing is closed on Senate Bill 132 and opened on A.B. 249.

 

ASSEMBLY BILL 249 (1st Reprint): Makes various changes concerning Public Employees’ Benefits Program. (BDR 23-549)

 

Senator Raggio:

Assembly Bill 249 was heard in this committee May 20, 2003. Gary Wolff proposed an amendment on behalf of Teamsters Local 14 and the Nevada Highway Patrol Association that would add to subsection 5 of NRS 281.129, referenced in section 1 of A.B. 249. It had to do with payroll deductions for employer organizations and labor unions. Organizations with 100 members with payroll deduction status as of January 1 of this year would be eligible for payroll deductions. That section authorized any officer of the state, except the legislative fiscal officer, to withhold amounts upon written request and pay them to a number of charitable organizations, employee credit unions, and labor organizations. This benefit was expanded to payroll deductions for life insurance and matters of that kind. There was some objection from the State of Nevada Employees Association and the State Controller’s Office. The bill must be processed, and I ask whether the committee wants to process the bill with the proposed amendment. What is the appetite of the committee?

 

SENATOR RHOADS MOVED TO DO PASS A.B. 249.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

Senator Cegavske:

Would staff provide an explanation of A.B. 249 with and without the amendment, as well as the fiscal note on each?

Senator Raggio:

This is a situation in which passage of A.B. 249 will make some people happy and some not. I think I would vote to put the amendment on, let it go to conference, and give them an opportunity to make their pitch. I have a difficult time with the idea that only one labor organization has this benefit right now.

 

Mr. Ghiggeri:

The legislation, as it came from the Assembly, would provide for the amount of state subsidy for retiree group insurance. Cost shall be based on the years of state service only, and not the total number of years under the PERS system. Currently, there are retired employees participating in the retired employees’ group insurance program who have both state and non-state service and obtain the benefit from combined service, rather than just the state-only service. Additionally, the legislation provides for an opened enrollment period to join the Public Employees’ Benefits Program for those pre-1994 local government retirees who, at the time of their retirement, did not have an option to join the Public Employees’ Benefits Program. The legislation also addresses the composition of the Board of the Public Employees’ Benefits Program and extends the two non-state government employee members of the board. It was endorsed by a number of individuals who testified on the legislation.

 

Senator Raggio:

Mr. Thorne and Mr. Bibb testified on the general aspects of the bill.

 

Senator Mathews:

I withdraw my second on the motion.

 

Senator Rhoads:

I withdraw the motion.

 

Senator Raggio:

Is there another motion?

 

SENATOR MATHEWS MOVED TO AMEND AND DO PASS A.B. 249.

 

SENATOR CEGAVSKE SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR TIFFANY WAS ABSENT FOR THE VOTE.)

 

*****

 

Senator Raggio:

The hearing is closed on A.B. 249 and reopened on A.B. 534.

 

ASSEMBLY BILL 534 (2nd Reprint): Makes various changes concerning State Public Works Board. (BDR 28-556)

 

Daniel G. Miles, Vice Chancellor Finance and Administration, University and Community College System of Nevada:

We believe the amendment (Exhibit P) to A.B. 534 would do what we seek. We want to make the results of this bill compatible with the capital improvements bill about to be drafted and put out.

 

Senator Raggio:

Does the amendment meet your concerns?

 

Mr. Miles:

Yes, it does.

 

Senator Raggio:

Is there any reason the committee could not process A.B. 534 with the proposed amendment?

 

SENATOR RAWSON MOVED TO AMEND AND DO PASS A.B. 534.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR TIFFANY WAS ABSENT FOR THE VOTE.)

 

*****

Senator Raggio:

The hearing is closed on A.B. 534 and opened on S.B. 250.

 

SENATE BILL 250 (1st Reprint): Revises various provisions relating to regulated businesses and professions. (BDR 57-835)

 

Senator Raggio:

Senate Bill 250 was heard May 19, 2003. Senator Townsend, one of the sponsors, discussed the bill with the committee. The bill relates to medical malpractice and the Board of Medical Examiners. Keith L. Lee received a proposed amendment (Exhibit T) and testified on behalf of the Board of Medical Examiners expressing concern about some of the sections. Please tell us whether or not the proposed amendment meets your objections and has been approved by the sponsor.

 

Keith L. Lee, Lobbyist, State Board of Medical Examiners:

Senator Townsend and I reached an agreement on almost every issue. There are two or three outstanding issues on which I will present my case and the committee can make a decision. I gave the proposed amendment (Exhibit T) from the Board of Medical Examiners to Senator Townsend yesterday. He has discussed it with some physicians and others since then, and he and I met just before I entered the room today.

 

Senator Townsend and I agree on deleting section 22, page 47 of S.B. 250 in its entirety. It mandates moving the principal office of the board to Las Vegas no later than July 1, 2007. As we committed in Senator Townsend’s committee, and were supported by the action the board will take this Friday at the regular meeting, we are opening an office in Las Vegas and staffing it appropriately for the needs of physicians and physician’s assistants in Las Vegas. Given that, Senator Townsend agreed to delete it. The next agreement deletes section 178, page 89 of S.B. 250. This is a proposed study to be conducted by the insurance commissioner considering various factors involving how insurance arrives at medical malpractice premiums and a number of things. It mandates that the board will pay for an amount not to exceed $402,000. The insurance commissioner advised me a similar study was done in 1995, albeit not as thorough or complete as proposed. She indicated she has insufficient staffing and would have to contract it to a third party. Senator Townsend, myself, and others discussed it and feel we made a great deal of progress in the insurance “reform area,” and for the present it is appropriate to delete it and see how it goes.

 

We agreed to disagree on my proposal to delete section 51, page 19 of S.B. 250. This is a provision requiring a performance audit of the board, to be paid for by the board, and for the Legislative Commission to issue requests for proposal to third parties with expertise in conducting performance audits, and issue a contract if the commission is satisfied. Should the Legislative Commission be dissatisfied with the proposals, the Audit Division of the Legislative Counsel Bureau (LCB) would be directed to it.

 

The board and Senator Townsend reached a compromise satisfying both their concerns. I drafted some language and will outline it. There is a Federation of Medical Boards of the United States, composed of virtually every state’s board of medical examiners, which conducts performance audits of other boards. Should the committee go forward with a proposed audit, we agreed the Legislative Commission shall issue a request for proposal or request for information, whichever is appropriate, to the Federation of Medical Boards of the United States. Upon receipt of those requests for proposal or information, if the Legislative Commission is satisfied the federation can conduct a fair, impartial, and accurate performance audit, it will issue the contract to the federation to perform the audit. If, on the other hand, the commission is not satisfied the federation can conduct a fair and impartial hearing, the commission will direct the Audit Division of the LCB to conduct the hearing. I proposed some language I will submit to Mr. Ghiggeri.

 

Senator Raggio:

Is that agreeable to Senator Townsend?

 

Mr. Lee:

As a fallback position, it is agreeable to Senator Townsend.

 

I proposed we delete section 37, page 18; section 44, page 21; section 58, page 30; and section 52, page 26, subsection 4 of S.B. 250. These all have to do with changing the burden of proof the Board of Medical Examiners must establish in order to revoke a physician’s license. After 1999, the Legislature saw fit to require a preponderance of evidence burden for the board to take any disciplinary action against a physician, including revocation of the license for no more than a single act of malpractice, if that should be the case.

 

The provisions on which Senator Townsend and I agreed to disagree increase the burden of proof to a clear and convincing standard.

 

Senator Raggio:

Senator Townsend’s position is that section 37 of S.B. 250 should remain.

 

Mr. Lee:

That is correct. I suggested sections 37, 44, 58, and 52 of S.B. 250 remain. His position is the burden should be increased to “clear and convincing.” Our position is it should remain at the present standard or burden of preponderance of evidence. We think it provides greater protection to the consumers and sends the right message to physicians. One of the primary concerns of physicians is, obviously, revocation of a license, which is a serious matter and not taken lightly by either the physician or the board. I assure you, we follow all rules of due process and procedure. Clearly, it is a difficult process, but we think the present burden of preponderance is sufficient, adequate, and provides the protection to the general public that allows us to go forward.

 

Senator Townsend:

I agreed to everything Mr. Lee and his client proposed for deletion purposes. We changed the language relative to the audit. The only thing on which we have not come to agreement is the issue of preponderance of the evidence, vis-à-vis revocation of the license. 

 

Senator Raggio:

That affects a number of sections.

 

Senator Townsend:

Yes. The reason we looked at it in a manner that is clear and convincing is the fact only revocation is considered, and since it is a privileged license, we felt the standard should be extremely high. Preponderance remains under this proposal for suspension or any other levels of disciplinary action. We leave it up to you. I understand and respect Mr. Lee and his client and what they are trying to do, but we thought it should be considered. Certainly, whatever the committee decides I will support on the Senate Floor.

 

Mr. Lee:

There are three other areas to consider, two on which we agree. By deleting section 49 on page 23 of S.B. 250, some changes to NRS 630.160 proposed in that section would be deleted. We have accomplished those changes, plus some other changes in S.B. 332, which was amended and concurred in by the Assembly and sent to enrollment. Therefore, we can agree it can be deleted.

 

SENATE BILL 332 (3rd Reprint): Revises qualifications of State Health Officer, clarifies restrictions on use of “M.D.” title and makes various changes relating to licensure of physicians and Board of Medical Examiners. (BDR 40-1036)

 

Mr. Lee:

I think Senator Townsend agrees to delete section 50, subsection 4 on pages 24 and 25 of S.B. 250 which changes the review period of a voluntary physician’s license. In 2001, we created a voluntary physician’s license and wanted to review it every 2 years. This suggests we give the license to them until they surrender it. We think it is important to have review ability, which is a continuing ability to look at the license.

 

There is one final area on which Senator Townsend and I agreed to disagree. It is on section 39, page 14 of S.B. 250, which provides that the executive director of the commission serve at the pleasure of the board and the Governor. The position presently serves at the pleasure of the board and we think it is appropriate. Senators O’Connell and Townsend believe the Governor should also be involved. We are concerned it will be difficult to hire a new executive director and ask him or her to serve two masters, the board and the Governor. We will leave it up to you as a policy decision.

Senator Raggio:

Senator Townsend, do you feel strongly about that point?

 

Senator Townsend:

We have not exactly had a disagreement over it. I think the important components of the bill remain. I do not feel strongly about the issue. We have had a challenge in the past, which is the reason it was put in.

 

Senator Raggio:

Your committee worked very hard on this. The problem we have before us is the funding. The committee will accommodate any amendment on which you two gentlemen firmly agree. We do not want to be in a position of deciding between “clear and convincing evidence,” and “preponderance of evidence,” and matters of that kind. I think the only issue is, with the deletion of section 178 of S.B. 250, what is the cost?

 

Senator Townsend:

The original proposal was $3 million. It was an important component for our friends in southern Nevada, particularly in the obstetrics and gynecology area. The other components of the bill are also important long-term. Senator Coffin is our resident expert in the area of health insurance and probably has much knowledge in the area of medical malpractice insurance. It is my understanding he does not represent that area, but he certainly understands it. The components not dealing with funding are as important as anything else in this bill. Since money is an important issue, I would certainly go to my colleague, Senator O'Connell, and represent to her that, with the lack of funding mechanisms we promised we would bring you and we have not, it would be important to process the bill and just remove the fiscal note.

 

Senator Raggio:

I suggest you and Mr. Lee return with a clean amendment on which you all agree.

 

Senator Townsend:

You will have it tomorrow morning.

 

Mr. Lee:

The bill before you includes a large amendment. I will bring a clean amendment in the morning.

 

Senator Raggio:

Is that satisfactory with the committee?

 

Senator Cegavske:

In regard to the volunteer physician’s license, what is the reason they would not continue to be within the purview of the board?

 

Mr. Lee:

Generally speaking, volunteer physicians are those who are retired from practice; consequently, they are older. We think it is important a license is issued to them assuming they meet initial qualifications and standards. It is also important to have the ability to renew the license every 2 years.

Senator Cegavske:

It was my understanding the ability to review a volunteer physician every 2 years would be taken away.

 

Mr. Lee:

I must have misspoken. We wish to keep the law the way it is now, which is to reissue a license every 2 years.

 

Senator Raggio:

The hearing is closed on S.B. 250. There being no further business to come before the committee, the hearing is adjourned at 6:30 p.m

 

 

RESPECTFULLY SUBMITTED:

 

 

 

                                                           

Barbara Moss,

Committee Secretary

 

 

APPROVED BY:

 

 

 

                                                                                         

Senator William J. Raggio, Chairman

 

 

DATE: