MINUTES OF THE
SENATE Committee on Finance
Seventy-second Session
May 31, 2003
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:48 a.m., on Saturday, May 31, 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
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Rick Combs, Deputy Fiscal Analyst
James D. Earl, Committee Secretary
OTHERS PRESENT:
John P. Comeaux, Director, Department of Administration
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada
Randy Robison, Lobbyist, Nevada Assn. Of School Boards/Reno
Senator Raggio:
We have Rick Combs with us this morning to go over the Capital Improvement Program (CIP) recommendations from the CIP joint subcommittee.
I want to take this opportunity to extend thanks to Mr. Combs. He has been pulled in many directions on behalf of the CIP subcommittee and the tax committees. You have done an outstanding job. You have this committee’s great appreciation.
Rick Combs, Deputy Financial Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
If you refer to page 10 of the spreadsheet handout (Exhibit C), you will be looking at the overall impact of the CIP subcommittee’s recommendations. You will notice the Governor’s recommended program totaled about $170 million in bond funding and about $71.6 million for other funds, for a total of about $241.6 million. The subcommittee recommendation reduces the bond funding to approximately $143.4 million. The “other funds” category increases to a total of about $75.1 million, for a total of about $218.5 million.
There is $4 million included in the Governor’s bond recommendations that represent reallocated funds from previous CIP budgets. I have moved that into the “other funds” category in the subcommittee recommends column. This means that the $4 million difference between the two recommendations is actually not a difference at all.
Senator Raggio:
Would you pick the major projects to discuss? Committee, if you see issues you need explained, we will be happy to take a look at those.
Project No. C01– 150-Bed Psychiatric Hospital
Project number (PN) 03-C1 is for a 150-bed psychiatric hospital at the Southern Nevada Adult Mental Health Services (SNAHMS) facility. There are 120 acute care beds and a 30-bed psychiatric emergency services unit. It will be constructed in such a manner that an additional 40-bed unit can be added later. The subcommittee approved the Governor’s recommendation on this project. You will notice other funds associated with this project. They have been reallocated from human resources projects in previous years.
Senator Coffin:
Was there testimony to the effect that there might be a need for a portion of the facility to be allocated for pediatrics purposes? That would require somewhat different architecture in particular areas.
Mr. Combs:
That issue did not arise in the hearings. My understanding is that the facility is for adult psychiatric care, and that it will be of the same design as the facility at the Northern Nevada Adult Mental Health Center.
Senator Coffin:
We had never seen the word “adult” associated with the project.
Senator Rawson:
I need to mention that we did put money back into the budget to keep some of the pediatric units open.
Project No. C06– State Emergency Operation Center
Mr. Combs:
The State Emergency Operations Center is PN 03-C6. The Governor recommended about $7.1 million; that was reduced by the subcommittee to $571,175. This resulted from the subcommittee decision to reduce the project to one of “design only” during this biennium.
Senator Raggio:
The committee will recall we addressed this yesterday by reallocating funding of $4 million from the Wall Street settlement money, and, in addition, we will be drafting some language to consider later this morning that will authorize the sale of the old armory property in the event the Wall Street-settlement money does not become available. The armory sale would be subject to approval by the Interim Finance Committee (IFC). Mr. Comeaux, I see you in the audience, and I want to make you aware of our plan.
Project No. C09– North Las Vegas Field Services
The new Department of Motor Vehicles (DMV) field services office in Las Vegas is PN 30-C9. That office is now located in leased space where the lease expiration is December 2005. The project would include a commercial driver’s license course.
Project No. C12–Hatchery Refurbishment, Phase II
SENATE BILL 416: Authorizes issuance of bonds and other securities for completion of Fish Hatchery Refurbishment Project. (BDR S-1212)
Mr. Combs:
Phase II of the fish hatchery refurbishment project is PN 03-C12. Senate Bill (S.B.) 416 will contain authority to issue bonds for this project. Authority will not be contained in the CIP bill.
Project No. C15– Land Acquisition for a DMV Office in South Reno
Project number 03-C15 involves land acquisition for a new DMV office in south Reno. The cost of that project was reduced based on revised estimates from the Division of State Lands on the cost per acre of the property.
Senator Raggio:
The reason for the urgency on that project is the rapid appreciation of land value in the area. We need to put a stake on that land. This area is near the Mt. Rose Highway intersection where a lot of development is taking place.
Project No. C19– Nevada State Museum ADA Access
Mr. Combs:
I want to suggest a slight modification to the subcommittee recommendation on PN 03-C19 involving improved disability access to the Nevada State Museum. Staff recommended the elimination of this project to the subcommittee since it appeared to duplicate another project in the statewide Americans with Disabilities Act program. However, later discussions revealed there were differences between the two projects. One involves interior remodeling; the other involves exterior remodeling. The project needs to start quickly. Funding for construction was not included until fiscal year (FY) 2006. My recommendation in the handout envisions getting the design stage completed through receipt of construction documents.
Senator Raggio:
Will the amount listed in the handout cover that purpose?
Mr. Combs:
That is correct.
Project No. C21– Health Science Building– West Charleston
Project number 03-C21 involves construction of the health sciences building on the West Charleston Campus of the Community College of Southern Nevada. The planning was done last session pursuant to legislative action. Approximately $19 million in State funds and $500,000 in other funds are involved.
Project No. C23 – UNLV – Sciences Building
Construction of the University of Nevada, Las Vegas Sciences Building on the West Charleston Campus is PN 03-C23. It involves a total of $60.3 million. Advanced planning and some site work involving utility placement was approved last session for approximately $8 million.
Project No. C50 – CNR - Lease Purchase
Project number 03-C50 is the lease purchase of the State office building for the State Department of Conservation and Natural Resources. The subcommittee recommends approval of that project.
Project No. C51– HR– Lease Purchase
Project number 03-C51 is the lease purchase of an office building for the Department of Human Resources. The subcommittee did not recommend approval of that project.
Senator Raggio:
I think we wanted to see how well the first project progressed. The subcommittees felt if the lease purchase arrangement for the State Department of Conservation and Natural Resources proved worthwhile, then they would consider a building for the Department of Human Resources in the next session.
Mr. Combs:
You will notice the difference in costs for both projects as recommended by the Governor. The State Department of Conservation and Natural Resources has more employees in leased space than does the Department of Human Resources. That reason explains the subcommittee’s action.
Let me turn to some added legislative projects.
Project No. C91L– Maxey Science Center, Building Renovation and Addition
Project number 03-C91L is the Maxey Science Center building renovation and addition. It involves a total of $2.1 million. State funds make up $1.9 million. The construction will entail a new addition to the science center as well as completion of several unfinished sections.
Project No. C92L– Purchase And Renovation Of 120 Miles Of Nevada Northern Railroad Track
Project number O3-C92L involves the purchase and renovation of 120 miles of Nevada Northern Railroad track.
Senator Raggio:
I think this was a concern of Speaker Perkins.
Project No. C94L–Campus-Wide Fire And Life Safety Retrofits
Mr. Combs:
Project number 03-C94L is a campus-wide retrofit for fire and life safety. It involves $750,000.
Project No. C95L– Land Acquisitions For Women’s Athletic Programs
Project number 03-C95L is the land acquisition of the women’s athletic program at the University of Nevada, Reno. It entails $5 million to match a gift of 23 acres of land in order to try to comply with Title XI.
Project No. C96L– Renovation Of Former Mesquite High School
Project number 03-C96L is the Community College of Southern Nevada (CCSN) renovation of the former Mesquite High School. It will be used by the community college as a satellite campus in Mesquite.
Senator Raggio:
What did we do with S.B. 152?
SENATE BILL 152: Makes appropriation to University and Community College System of Nevada for renovation of former Mesquite High School for use as part of Community College System. (BDR S-1063)
Mr. Ghiggeri:
The committee voted to indefinitely postpone that bill.
Project No. C97L– Security System And Equipment Upgrades At Various Campuses
Mr. Combs:
Project number 03-C97L involves security system and equipment upgrades at various colleges throughout the system. The recommended expenditure is $500,000, primarily for the replacement of antiquated surveillance equipment.
Project No. C98L– Establishment of Oral Health Clinic
Project number 03-C98L is the establishment of an oral health clinic at Great Basin College in Elko. It involves $250,000 for a five-chair dental clinic.
Project No. C99L– UNLV School of Medicine
Project number 03-C99L involves the School of Medicine at the University of Nevada, Las Vegas. The project is the study and design of a heart transplant facility, and the construction of an embalming facility and a plasticization lab at a recommended cost of $1.7 million in total.
Senator Raggio:
The Senate and Assembly bills (A.B. 180, S.B. 152, S.B. 154, A.B. 333, S.B. 178) referenced in the “Remarks” section of the handout (Exhibit C) have all been indefinitely postponed by this committee because these projects are now on the list of capital improvement projects.
Mr. Combs:
I will not go through all the maintenance projects, but I do want to refer to page 8 of the spreadsheet handout. The section entitled “Advance Planning Projects” provides a rolling total.
The Governor’s recommendation for maintenance projects was reduced by the subcommittee from $29.8 million to about $16.8 million. A lot of the projects were not funded for construction until FY 2006 because the authority to issue the necessary bonds would not become available until then. The subcommittee, based on the large number of maintenance projects and the fact that general funds were not available, decided to defer a number of the projects not scheduled for construction until FY 2006. They obviously can be addressed in the next CIP program if they remain a high priority for the administration.
Senator Raggio:
My understanding is that these projects would not have been done anyway until FY 2006.
Mr. Combs:
That is correct.
Project No. P05.5– Feasibility Study– Northern Nevada Vets Home
Project 03-P5.5 is a feasibility study for a northern Nevada veterans’ nursing home. The subcommittee recommended deletion of this project. There was concern that the timing was not right given the difficulties at the southern home. Additionally, some members were concerned that the State would be using general obligation bonds to undertake the feasibility study.
Project No. P10L– Math And Science Center, Programming, Design And Preliminary Cost Estimate
Project 03-P10L is new; it was added by the subcommittee. It is for a schematic design and preliminary cost estimate for the math and science center at the University of Nevada, Reno (UNR). This is one of the projects on the Board of Regents’ list.
Project No. P11L– Renovation of Getchell Library–UNR
Project 03-P11L involves programming and design of the renovation of the Getchell Library at UNR. There was a project approved last session to construct a new library on that campus. This project will design the building conversion from a library to classroom and office space.
Project No. P12L– Student Services Addition, Design Through Construction Documents–UNLV
Project 03-P12L involves the design through construction documents for the student services addition at the University of Nevada, Las Vegas (UNLV). There is an attempt to centralize all student services in a single location. This project includes an addition of about 21,000 square feet to the existing complex. It also involves a redesign of a portion or Frazier Hall, which is currently being used to provide those services.
The statewide projects are displayed on page 9 of the handout. The main subcommittee action in this area was to reduce the project funding to the amount that would fund completion over the next 2 years. Statewide projects are funded on a 2-year basis. The goal of the subcommittee was to reduce the funding to what could be accomplished in the next 2 years. This is why the program amounts are reduced from those of the Governor’s recommendations.
Project No. S05– Statewide Paving Project
I make a recommendation concerning Project 03-S5 in the far right column of the spreadsheet. The committee may wish to consider a Letter of Intent. When the budgets for the Lovelock Correctional Center and the Northern Nevada Correctional Center were closed, there were repaving expenditures contained in those budgets. The repaving expense was eliminated by the subcommittee based on the fact that the repaving projects would be paid out of funds for the statewide paving program. The State Public Works Board has listed the two correctional centers as agencies that will receive money from this program. I think a Letter of Intent would help to ensure these projects do not get lost.
The final projects on page 10 of the spreadsheet are the university maintenance projects. They total $10 million in general obligation bond funding and $5 million from the Special Higher Education Construction Fund, derived from the annual slot tax revenue money dedicated to paying off bonds for maintenance within the university system.
There are two additional pages attached to the handout packet. The first of these depicts how previous allocated funds under previous CIP programs have been reallocated. It shows what projects were to be funded initially and how they will be used in this CIP program.
The second page is an e-mail from the State Public Works Board referencing a request to change language contained in the last CIP program, which is also contained in the current CIP bill now being drafted. In the last CIP bill, S.B. No 584 of the 71st Session, a provision was added requiring the university, when using donated funds, to provide those funds to the State Public Works Board before the board can let a construction contract. The board is indicating there are several university projects in which the amount of donated funds is so small that absence of the funding would not prevent letting the contract and meeting contract requirements. The board has recommended the subject language be removed from the portion of the bill that applies to the telecommunications building at the CCSN. The university system’s share of that project is $1 million. The board makes a similar recommendation regarding the health sciences building at the West Charleston campus of CCSN. The staff recommendation, given the small funding amounts involved, is that the board’s recommendation appears to be reasonable since the construction contracts will not be held up without the donation funding. In other words, the State will not be placed in a materially worse position if the funds do not materialize.
Senator Raggio:
Will that be seen as waiving the other funding completely?
Mr. Combs:
It should not be viewed in that manner. The e-mail suggests the board wanted to delete the expenditure authority for the additional $1 million. I do not recommend that authority be removed. The community college still needs to come forward with either $1 million in cash, in-kind contributions, or some combination to acquire the equipment required for the project. The only recommendation contained in the e‑mail that I suggest the committee approve is the removal of the provision requiring that funding be provided to the board before the board lets the construction contract.
Senator Raggio:
I believe that to be prudent. All these projects were funded with the understanding that other funds would be available at some point. I think your recommendation should be followed. Does the committee have any questions on any of the projects that have been reviewed?
If not, I will take a motion to approve the joint subcommittee report on capital improvement projects, including a Letter of Intent regarding the paving items for the two correctional institutions, and including provision for the language we just discussed relating to the removal of donation funding to be in place but retaining the requirement that the funding be included in the projects.
SENATOR RAWSON MOVED TO APPROVE THE JOINT SUBCOMMITTEE REPORT ON CAPITAL IMPROVEMENT PROJECTS, TO ISSUE A LETTER OF INTENT TO THE STATE PUBLIC WORKS BOARD INSTRUCTING THE BOARD TO COMPLETE PAVING PROJECTS AT THE LOVELOCK CORRECTIONAL CENTER AND THE NORTHERN NEVADA CORRECTIONAL CENTER USING CAPITAL IMPROVEMENT PROJECT FUNDS, AND TO AMEND THE REQUIREMENT THAT DONATED FUNDS OR FUNDS OTHER THAN THOSE RAISED PURSUANT TO THE ISSUANCE OF CONSTRUCTION BONDS BE CONVEYED TO THE STATE PUBLIC WORKS BOARD PRIOR TO THE LETTING OF THE RELEVANT CONSTRUCTION CONTRACT, PROVIDED THAT SUCH DONATED OR OTHER FUNDS ULTIMATELY BE USED TO COMPLETE THE SUBJECT PROJECT.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION PASSED. (SENATOR CEGAVSKE VOTED NO. SENATOR TIFFANY WAS ABSENT FOR THE VOTE.)
*****
Senator Raggio:
Would staff please walk us through the latest version of the statement of projected unappropriated General Fund balance (Exhibit D)?
Gary L. Ghiggeri, Senate Financial Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
The committee now has an updated fund balance sheet (Exhibit D). It is based on actions that have been tentatively recommended in the closure of the Distributive School Account (DSA). I have distributed a separate spreadsheet (Exhibit E) which delineates recommendations and closing actions for programs within the DSA.
Let me draw your attention to an entry about halfway down the page of the General Fund balance sheet. In FY 2004, there is an estimated cost of the 0.75 percent pay raise for K-12 employees. That has been added since the committee saw the last tracking sheet. The amount involved is approximately $14 million in FY 2004.
About three-quarters down the page, in the FY 2005 numbers, there is a similar cost for that pay raise continuing through the second year of the biennium. The total pay raise in the first year of the biennium for K‑12 employees is 2.75 percent, and it would continue in the second year. There is a 2 percent pay raise for all employees, the line entry just above, in FY 2005 of approximately $53.4 million. Additionally, in FY 2005, there is an appropriation recommended by the Governor to restore $50 million into the rainy day fund. That appropriation is recommended for reduction to approximately $30 million with trigger language recommended to fund up to an additional $20 million to the rainy day fund in FY 2005 based on the revenue projections of the Economic Forum as of December 1, 2004. I have a suggested amendment to Senate Bill (S.B.) 243 to accommodate that action.
SENATE BILL 243: Makes appropriation from State General Fund to Fund to Stabilize the Operation of State Government. (BDR S-1234)
Senator Raggio:
Let me enlarge upon that explanation. All committee members will understand that we reached an agreement during the final DSA closing discussions. We agreed to remove class-size reduction in kindergarten. The additional day of schooling suggested by the Assembly Committee on Ways and Means (Ways and Means) was removed. The pay raise was retained in the second year for all employees, not just teachers, but for state workers including university employees. Funding was approved to accommodate the 0.75 percent cost of the increased rate required for the retirement system.
The rainy day fund appropriation, omitted in the Ways and Means version, some $50 million in the Senate version, was also the subject of an agreement. It was agreed that $30 million would be funded, and that there would be a trigger mechanism active at the time of the report from the Economic Forum on December 1, 2004, to the effect that, to the extent the Economic Forum projection exceeded the ending fund balance determined by the Legislature in this budget, up to an additional $20 million would be added to the rainy day fund. Those are the essential agreements.
There is also an agreement to authorize some flexibility for class-size reduction. This involves some caps. Language to effectuate that agreement will be in the class-size reduction bill.
Senate Bill 243 involves additions to the rainy day fund. It envisions an addition of $50 million. I will entertain a motion, in accordance with that agreement and understanding on the budget, that we amend that bill using the language of Amendment No. 964. As I indicated, that changes the $50 million amount to $30 million and provides the trigger mechanism for the addition of up to $20 million.
SENATOR RAWSON MOVED TO AMEND AND DO PASS SENATE BILL 243 AS AMENDED BY AMENDMENT NO. 964.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio:
Let us turn to the back language of the draft appropriations bill (Exhibit F) so that drafting can continue.
Mr. Ghiggeri:
Section 32 of the draft contains some budgets that have not been included historically. The first of these is number 12, the Child Assistance and Development account. Other budgets included for the first time are number 22, Child Welfare Integration; number 23, Secretary of State HAVA (Help America Vote Act) Election Reform; and number 24, Information Technology Projects, which is a new budget included in the Executive Budget to give the Budget Division the authority to use these appropriated funds in both years of the biennium upon approval of the IFC, pursuant to a recommendation by the Governor.
Section 33 incorporates a reference to section 14, not contained in this draft text, dealing with the Commission on Economic Development. That commission can move a total of $500,000 between each year of the biennium to be used in the Train Employees Now program. The committee may recall, prior to this session, the Commission on Economic Development was compelled to revert funding. There is a bill, probably coming back from the Assembly, which will remove the non-reversionary statutory language. This reflects an agreement reached in the closure of that budget.
Page 19 reflects a number of appropriations to the Department of Education. These can be used in either year of the biennium. Specifically, those appropriations are for the Peer Mediation Program, the National Board Teacher Certification Program, new teacher signing bonuses, technology components of the System for Accountability Information in Nevada (SAIN), proficiency testing, norm-referenced examinations, the high school proficiency examination, the criterion-referenced examinations, and the state writing proficiency examinations.
Senator Raggio:
Committee, these appropriations can be used in either year.
Mr. Ghiggeri:
They can be used either year upon recommendation of the Governor and subsequent approval of the IFC.
The next section deserving attention is section 35. It contains capping language for Medicaid and the Temporary Assistance for Needy Families (TANF) programs.
Senator Raggio:
Committee, that is consistent with our previous actions.
Mr. Ghiggeri:
Provisions like this have been in appropriations acts for the last 20 years.
Section 36 provides authority to the Welfare Division to transfer funds among its various budget accounts. This provision has been included historically.
Senator Raggio:
Committee, those transfers would be subject to IFC approval.
Mr. Ghiggeri:
That is correct.
Section 37 provides the same authority to the Nevada Medicaid and Nevada Check Up programs.
Section 38 allows the Department of Corrections to move money between budget accounts in accordance with criteria set forth in Nevada Revised Statutes (NRS) 353.220.
Section 39 allows the Department of Public Safety to transfer funding between budget accounts, both Highway Fund and General Fund dollars, to the extent necessary based on the cost allocation for the department’s information technology projects. This provision is similar to ones contained in previous legislation.
Section 40 provides for the transfer between fiscal years of $50,000 as appropriated in FY 2003‑2004, and $2 million as appropriated in FY 2004‑2005, related to the kiosk program. The transfer would have to be requested by the Governor and approved by the IFC. This is consistent with the manner in which those budgets were closed.
Section 41 provides an appropriation of almost $1.3 million from the Highway Fund to the Nevada Highway Patrol to be expended for furniture and various other items for the new highway patrol building in Las Vegas. This funding was included in the Executive Budget and in the operating budget for the Nevada Highway Patrol for FY 2004 only. Staff felt that even if money were needed in FY 2005, it should be described as a one-shot provision in this legislation.
Section 42 allows agencies to transfer funding associated with vacancy savings only up to the amount of their budgets associated with that funding.
Section 44 provides for the University and Community College System of Nevada to carry forward funding for research projects. The text is similar to that contained in arts council grants that bridge more than 1 fiscal year.
Section 45 provides general funds for the administrative costs of the Legislators’ Retirement System.
Section 46 provides for the reversion of funding provided for the office of science, innovation and technology. I believe this had been done earlier without a reversion date. Testimony indicated there were no current plans for that funding. This action would revert that money to the General Fund.
Section 47 limits the funding provided to the Tahoe Regional Planning Agency (TRPA) to the one-third match with California.
Senator Raggio:
It also makes our funding contingent on California providing its two-thirds share.
Mr. Ghiggeri:
Section 49 provides an appropriation of approximately $2.2 million to the IFC for allocation to the Department of Corrections for the operation of a transitional housing facility.
Senator Raggio:
Is that the Casa Grande project?
Mr. Ghiggeri:
Yes, it is.
If the department is unsuccessful in generating a plan that would result in funding that facility, then the money can be used to cover other costs within the department related to inmate-driven and staffing costs.
Section 50 requires the State Controller to process payments through the third Friday in September in each fiscal year. This allows the IFC to meet and transfer funds upon request prior to the closure of the books.
Section 53 provides an additional appropriation to the Legislature for the cost of session in the amount of $1.6 million.
Section 54 provides for the Office of the Attorney General to receive advances for the operation of the Medicaid Fraud Control Unit in the event there are delays in the receipt of funds. Permissive language providing similar advances can be found in section 55 for the executive director of the Veterans’ Services, and in other sections relating to the State Department of Conservation and Natural Resources for the suppression of fires, and to the Nevada National Guard to cover call-up costs.
The amount referenced in section 58, subsection 2, was $50 million in the last biennium. That amount has been increased to the $60 million you see in the bill draft based on the size of the budget. This provision requires the Governor to report to the IFC if he reduces the budget due to an economic downturn.
Senator Raggio:
Other than those provisions you have pointed out, this is boilerplate language for the appropriations bill.
Mr. Comeaux, do you have any concerns about the language?
John P. Comeaux, Director, Department of Administration:
I do not.
Senator Raggio:
I will then take a motion to approve the insertion of this language into the appropriations bill.
SENATOR RAWSON MOVED TO APPROVE THE INSERTION OF THE LANGUAGE CONTAINED IN EXHIBIT F INTO THE APPROPRIATIONS BILL.
SENATOR RHOADS SECONDED THE MOTION.
Senator Coffin:
We usually include language allowing the Governor to make changes in the budget. Are we including the same language in this appropriations bill?
Senator Raggio:
I believe so. What section contains that provision?
Mr. Ghiggeri:
That language is in section 58. The only change made is an increase in the amount from $50 million to $60 million. Last session, the amount was increased from $40 million to $50 million based on the size of the budget. Staff felt it appropriate to increase the amount by an additional $10 million this session.
THE MOTION CARRIED. (SENATOR TIFFANY WAS ABSENT FOR THE VOTE.)
*****
Senator Raggio:
Let us turn to similar back language for the Authorization Act. As the committee members will be aware, the Authorization Act provides budgetary authority to expend funds other than general funds.
Mr. Ghiggeri:
The handout (Exhibit G) contains proposed back language for inclusion in the Authorization Act. The handout begins with section 2.
Section 1, running from page 1 to page 20, is essentially a list of agencies and the corresponding authorized expenditure amounts. When this bill is printed, that information will be available to the committee.
Section 2 provides the appropriations from the Fund for a Healthy Nevada to the homemaker program and the Senior Services Program.
Subsection 5 on page 22 is a general reversion provision. It requires reversion of unexpended funds into certain accounts at the end of each fiscal year. Specifically, 10 percent would go the Trust Fund for Public Health; 40 percent would go to the Millennium Scholarship Trust Fund; and 50 percent to the Fund for a Healthy Nevada. This provision differs from its counterpart last session; I believe all the money then went back to the Fund for a Healthy Nevada. This provision puts money back to where it would have gone had the appropriation not been made.
Section 3 provides the appropriations from the General Fund to the operation of the Gaming Control Board, approximately $26.9 million in FY 2004 and about $26.7 in FY 2005.
Section 4 provides the appropriations from the General Fund for the State Gaming Commission, approximately $406,000 in FY 2004 and about $408,000 in FY 2005.
Section 7 contains the language that prohibits state agencies from spending additional revenue earned during the year if they are supported from the General Fund or the Highway Fund. Essentially this provision requires any agency supported wholly or partially by the General Fund or Highway Fund to decrease its General Fund or Highway Fund expenditures by the amount that funds from other sources exceed the amount projected by the legislative budget. There is one caveat: receipt of the funds from other sources should not be jeopardized by the potential reduction of General Fund support.
Section 8, subsection 2, includes new language addressing excess student fees based on enrollment growth in the University and Community College System of Nevada (UCCSN). The provision would allow the UCCSN to expend additional registration fees collected from students for the purpose of meeting salaries and related benefits for incremental instructional faculty necessary as a result of registering additional students beyond the budget enrollments. It also provides that the university system may expend, with the approval of the IFC, any additional nonresident tuition fees and registration fees not utilized for incremental faculty costs, in addition to authorized amounts for the respective fiscal years.
Senator Raggio:
This language seems consistent with subsection 1.
Mr. Ghiggeri:
That is correct.
Senator Rawson:
What happens to excess fees received beyond what we contemplate? Presumably, there will be more fees as a result of growth.
Mr. Ghiggeri:
If such fees were not expended, they would revert to the General Fund. During the last interim period, there were additional registration fees that were not approved by the IFC for expenditure. I believe those funds are targeted for budget savings in FY 2005. I believe they amount to some $2.9 million.
Senator Raggio:
If you recall, we guaranteed the utilization of the estate tax revenue, so this reversion would be appropriate.
Mr. Ghiggeri:
Section 9 provides to the newly created Department of Wildlife the opportunity to obtain an advance from the General Fund of up to 50 percent of the amount available from the federal government to use for cash flow purposes. That funding must revert at the end of the fiscal year.
Section 10 provides for the availability of funds for the Tahoe Regional Planning Agency for its Threshold Research/Pathway 2007 project in both fiscal years.
Section 11 delineates the funds paid by the counties to the State Public Defender for services provided in the counties.
Section 15 provides language concerning certain information technology projects within the Department of Administration’s authorization. Money for projects in excess of $50,000 can be used in either fiscal year.
Section 17 provides for continued use of tourism funding provided by the 71st Legislature for projects of the Division of State Parks that will not be completed this biennium. That prior funding can be used next biennium.
Senator Raggio:
I thought we passed a bill to that effect.
Mr. Ghiggeri:
This language deals with projects funded by the prior Legislature with room tax funds. The projects could not be completed. The money is not from the General Fund.
Section 18 deals with tourism issues. In closing the budget for the Commission on Tourism, the sum of $250,000 was allocated for the Las Vegas Performing Arts Center Foundation. This language describes how those funds will be used. The section also requires that a report dealing with the use of the funds be provided to the IFC. Additionally, the section provides for funding a reversion on June 30, 2006.
Senator Raggio:
Mr. Comeaux, do you have any questions?
Mr. Comeaux:
I do not.
Senator Rawson:
We considered indirect cost recovery at some point. I know that involves General Fund money. Is that budgeted somewhere?
Senator Raggio:
That money goes to the State. We have a bill dealing with the subject. In view of our action in the UCCSN budgets, I think it inadvisable for us to dent the General Fund further.
Senator Rawson:
I am not arguing for that. Does it show up in reversions?
Mr. Ghiggeri:
The university account is not my area of expertise, but I believe it shows up as a reduction in General Fund support provided to the university. Put another way, the General Fund support nets out additional funds from other sources.
Senator Raggio:
I will take a motion to use this language in the Authorization Act.
SENATOR RAWSON MOVED TO APPROVE THE INSERTION OF THE LANGUAGE CONTAINED IN EXHIBIT G INTO THE AUTHORIZATION BILL.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TIFFANY WAS ABSENT FOR THE VOTE.)
*****
Bill DRAFT REQUEST 34-1369: Revises provisions governing homeschooled children and millennium scholarships. (Later Introduced as Senate Bill 503.)
ASSEMBLY BILL 311 (1st Reprint): Revises provisions governing homeschooled children. (BDR 34-966)
Senator Raggio:
Yesterday this committee authorized a request for a bill draft that would revise the minimum qualifications for receipt of a Millennium Scholarship. It would also utilize, per agreement, the language in Assembly Bill (A.B.) 311 dealing with home schooled children and their participation in interscholastic events. That request is BDR 34-1369. I am handing out a copy to the committee. If it is acceptable to you, I will take a motion for committee introduction of the bill.
SENATOR RAWSON MOVED FOR THE INTRODUCTION OF BDR 34‑1369.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TIFFANY WAS ABSENT FOR THE VOTE.)
*****
SENATE BILL 498: Requires reversion to State General Fund of certain money in Revolving Account for Investigation, Enforcement and Education. (BDR 7‑1358)
Senator Raggio:
Yesterday we agreed to amend and do pass S.B. 498. We amended that bill with the language I am now passing out to the committee. Mr. Ghiggeri, would you explain the amendment.
Mr. Ghiggeri:
This involves the funding that may become available from the recent court settlement by Wall Street investment firms. Normally, it would be deposited in the secretary of state’s revolving account for investigation, enforcement, and education. This amendment will permit that money to be used as matching funds in the construction of the state emergency operations center.
Senator Raggio:
The settlement agreement has been signed. My understanding is that Nevada will receive about $4 million.
Mr. Ghiggeri:
There are a number of different agreements. Work continues toward a final resolution. The information we have is that relevant agreements should be concluded within the next 3 to 4 months.
Senator Raggio:
Unless there is objection, we will utilize Amendment No. 965 as the amendment to S.B. 498. I see no objection and we will utilize that amendment.
ASSEMBLY BILL 544: Establishes for next biennium amount to be paid by this state for group insurance for certain public employees, public officers and retired public employees. (BDR S-1342)
Senator Raggio:
Committee, please turn to A.B. 544. We voted on May 29 to amend and do pass this bill. The bill deals with the amounts required to fund the public employees’ benefits program. We now have Amendment No. 966, which I will hand out now. Mr. Ghiggeri, would you summarize the amendment?
Mr. Ghiggeri:
The amendment includes an appropriation to the IFC in order to allocate funds to these agencies as required in order to meet the shortfall in the Retired Employees’ Group Insurance assessment to the various state agencies.
Senator Raggio:
Is this consistent with our action?
Mr. Ghiggeri:
Yes, it is.
Senator Raggio:
Is there any objection to utilizing Amendment No. 966 to A.B. 544? I see none. We will utilize that amendment.
Senator Raggio:
Consistent with what I indicated earlier, what I have before me deals with funding for the state emergency center. In the event the funding does not become otherwise available, the Governor’s office has requested that we authorize the sale of the old Nevada National Guard Armory on South Carson Street. I suggest we request a bill draft providing, in substance, in the event sufficient funding is not available from the sources indicated, that is, the “Wall Street” settlement funding or the federal grant that has been sought, then the IFC is granted the authority to sell the property pursuant to competitive bid, that is, subject to the provisions of NRS 321.335. I will take a motion requesting a bill draft for that purpose.
SENATOR RAWSON MOVED TO REQUEST A BILL DRAFT AUTHORIZING THE INTERIM FINANCE COMMITTEE TO SELL THE NEVADA NATIONAL GUARD ARMORY LOCATED ON SOUTH CARSON STREET IN THE EVENT SUFFICIENT FUNDING FOR THE CONSTRUCTION OF THE STATE EMERGENCY CENTER IS NOT OBTAINED FROM “WALL STREET” SETTLEMENT FUNDS AND FROM THE PENDING FEDERAL GRANT APPLICATION FOR CONSTRUCTION OF THE CENTER.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
Senator Raggio:
Senator Rawson, do you have any pending amendments?
SENATE BILL 188: Makes various changes concerning access to health care services for persons in this state. (BDR 40-743)
Senator Rawson:
Amendment No. 973 would amend S.B. 188. The bill codifies existing practices in the rural access health care programs. There are a number of programs that have provided care in rural areas for about 10 years. The reason to put existing practices into statute is that some programs will be more successful in their grant applications if they are undertaken pursuant to State authority. A graduate education council is established. It also allows for the development of obstetrical residency programs. The amendment strips all the appropriations from the bill, and it authorizes the use of gifts, grants, and donations. The programs would have the authority to seek intergovernmental transfers. It appears as though the State could receive $6 million of federal money by adopting such a regime. This amendment would allow the program administrators to explore such possibilities.
Senator Raggio:
I understand there would be no appropriation or fiscal note associated with the amended bill.
Senator Rawson:
That is correct.
Senator Raggio:
If this is agreeable to the committee, I will accept a motion to amend and do pass S.B. 188.
SENATOR RAWSON MOVED TO AMEND AND DO PASS AS AMENDED SENATE BILL 188, AS AMENDED BY AMENDMENT NO. 793.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
SENATE BILL 184 (1st Reprint): Revises certain provisions governing occupational diseases contracted by certain local police officers. (BDR 53‑851)
Senator Raggio:
Let us turn to S.B. 184. The fiscal note, responsible for the delay on this bill, has somehow been removed. We have a letter of correspondence (Exhibit H) from Ronald Dreher, president of the Peace Officers Research Association of Nevada. We also have an associated e-mail (Exhibit I) from Jim Fry, deputy risk manager in the Risk Management Division. Mr. Fry writes:
I have spoken with Ron Dreher (representing the Peace Officers Research Association of Nevada) concerning an amendment to SB 184 that would remove state peace officers as defined in NRS § 617.135 from this bill. Removing this eliminates the fiscal note to BA 1352, as it would not change the existing law as it pertains to state peace officers.
This is where we are at the moment. Is there a proposed amendment?
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada:
There is an amendment. I drafted one and presented it yesterday to Senator Mathews. You should have it. It is the letter I gave to you (Exhibit H).
Senator Raggio:
Is that the letter dated May 30?
Mr. Dreher:
That is correct.
Senator Raggio:
Senator Mathews, is it agreeable to you to add this amendment?
Senator Mathews:
Yes, it is.
Mr. Dreher:
The amendment eliminates the conclusive presumption for certain state law enforcement officers. A rebuttable presumption would still apply.
Senator Raggio:
Is anyone else going to have a serious problem with this?
Mr. Dreher:
No, I do not believe so. This bill satisfies our concerns. Hopefully, we will see you in 2 more years.
SENATOR MATHEWS MOVED TO AMEND AND DO PASS SENATE BILL 184 (1st Reprint) AS AMENDED BY TEXT PROPOSED IN THE MAY 30, 2003, LETTER OF RONALD P. DREHER.
SENATOR CEGAVSKE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
SENATE BILL 305: Requires Board of Regents of University of Nevada to establish Council on Graduate Medical Education. (BDR 34-931)
Senator Raggio:
Can we indefinitely postpone S.B. 305? The subject matter seems to have been taken care of by an amendment on another bill.
Senator Rawson:
I believe we can.
SENATOR RAWSON MOVED TO INDEFINITELY POSTPONE SENATE BILL 305.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
SENATE BILL 480: Deletes provision limiting issuance of citation for failure to wear safety belt in motor vehicle to vehicles halted for other offenses. (BDR 43-1039)
Senator Raggio:
I think we heard enough testimony to indicate there is no appetite for S.B. 480. That is the bill that would make the failure to wear a safety belt a primary violation. There are some consequences. There will be loss of some federal funding. However, I definitely formed the opinion that this committee does not want to process that bill. I will take a motion to indefinitely postpone.
SENATOR RHOADS MOVED TO INDEFINITELY POSTPONE SENATE BILL 480.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
ASSEMBLY BILL 214 (1st Reprint): Revises provisions relating to publications by state agencies and certain local governments. (BDR 33-1078)
ASSEMBLY BILL 266 (1st Reprint): Requires Superintendent of Public Instruction to prepare compilation of certain information for inclusion in biennial budgetary request for State Distributive School Account. (BDR 34-903)
Senator Raggio:
I have asked the staff to contact the sponsors of A.B. 214 to determine its fiscal impact. This bill relates to publications by state agencies.
We have a suggested amendment to A.B. 266 provided by Joyce Haldeman, Dotty Merrill, and Randy Robison (Exhibit J). We are looking at the first reprint of that bill. The bill contains language requiring the superintendent of public instruction to compile a biennial budget request and to take into account certain items without limitation. My concern, which I believe is shared by the committee, is that the language would be perceived as a mandate of some sort requiring all the enumerated items to be considered.
The amending language would change the bill to a resolution. There is also a wording change. Is there someone here as a witness on the amendment? Does this represent a genuine change?
Randy Robison, Lobbyist, Nevada Association Of School Boards/Reno:
We are recommending changing the bill to a resolution. We also change “shall account for” to “shall consider” and, on the last line of the bill, we change “must” to “may.”
Senator Raggio:
You are interpreting this to mean this is not something mandatory that would have to go in the budget, particularly as it relates to enhancements for new programs.
Mr. Robison:
That is correct.
Senator Raggio:
When someone comes in with a million dollar proposal, or a hundred million dollar proposal as Ms. Merrill did this time, that would not require consideration. There is still language “shall consider” that applies to compiling the budget. Why not change that to “may consider” as well?
Mr. Robison:
That is certainly acceptable if that is the committee’s pleasure.
Senator Raggio:
I think that would be consistent with the other language.
SENATOR RAWSON MOVED TO AMEND AND DO PASS ASSEMBLY BILL 266 AS AMENDED BY LANGUAGE TO TRANSFORM THE BILL TO A RESOLUTION AND TO MAKE CERTAIN REQUIREMENTS PERMISSIVE.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
ASSEMBLY BILL 392 (3rd Reprint): Increases amount of longevity payments to state employees. (BDR 23-964)
Senator Raggio:
We need to consider A.B. 392. This bill deals with longevity pay for state employees. What does it do, exactly?
Mr. Ghiggeri:
It increases the amount, and I believe it extends the years.
Senator Raggio:
There is no funding for this. If we pass the bill, the agencies would have to absorb the cost.
Mr. Ghiggeri:
That is correct. We have a fiscal note for the legislation, but there is no funding provided in the bill nor elsewhere in the budget.
Senator Raggio:
Mr. Comeaux, what do you think about this?
Mr. Comeaux:
I do not recall the amount of money identified in the fiscal note.
Mr. Ghiggeri:
The cost in the fiscal note, as estimated by the Legislative Counsel Bureau, would be about $3300 in FY 2004 and about $3900 in FY 2005. The university has a fiscal note for approximately $128,000 in FY 2004 and approximately $156,000 in FY 2005.
Senator Raggio:
This would affect compacted employees, those who cannot advance further on the salary scale.
Mr. Ghiggeri:
Yes, this would provide longevity payment. The Department of Personnel has estimated a fiscal impact of about $351,000 in FY 2004 and about $776,000 in FY 2005.
Mr. Comeaux:
I would characterize the fiscal impact on the budgets just mentioned as minimal. Our estimates of vacancy savings, included in the budget estimates, are fairly conservative. I do not consider this to be a roadblock.
Senator Raggio:
I will take a motion to do pass A. B. 392 (3rd Reprint).
SENATOR RAWSON MOVED TO DO PASS ASSEMBLY BILL 392 (3rd Reprint).
SENATOR MATHEWS SECONDED THE MOTION.
Senator Cegavske:
Did I hear correctly that agencies would pay for this with vacancy savings?
Senator Raggio:
Mr. Comeaux indicated there is usually enough in vacancy savings to accommodate this in the affected agencies. Is that correct, Mr. Comeaux?
Mr. Comeaux:
Our estimates on vacancy savings, the amount we withhold from the funding we supply to agencies, are very conservative. The funds required by this bill would simply be adding to that amount. I think the amount is manageable by all of the agencies. In effect, the agencies would be taking the funding from the vacancy savings they accumulate over the course of the year.
Senator Cegavske:
However, you do not know for sure, do you?
Mr. Comeaux:
No, I do not know for sure. It is, however, reasonable to assume that will happen.
THE MOTION CARRIED. (SENATORS TIFFANY AND CEGAVSKE VOTED NO.)
*****
Senator Raggio:
I want to ensure the letter from The National Judicial College dated May 23, 2003, is inserted in the record (Exhibit K). The letter is signed by William Dressel, the president, and by David Mitchell, the executive director. The revenue we usually provide these institutions was not funded in this biennium. The question is whether the committee would entertain a motion that would trigger payment of the amounts involved historically similar to the action we took on another fund.
Senator Coffin:
I would support that. I want to ensure I understand the sequence of triggers.
Senator Raggio:
Incidentally, it would have to be in the second year.
Senator Coffin:
Is there a sequence of triggers in the bills that contain them? This is similar to a number of airplanes trying to land at an airport. They have to proceed in a certain sequence.
Senator Raggio:
The only trigger we have endorsed is the funding of the rainy day fund. This trigger would have to follow the rainy day fund.
Senator Coffin:
What amount do you have in mind? Are you thinking of the historical amount or some new figure?
Senator Raggio:
I am considering whatever amount is requested.
Senator Tiffany:
Can staff tell me what it is that we are funding?
Senator Raggio:
The Legislature has consistently funded the National Judicial College. In the past, the Legislature did this through an endowment. We established an endowment, and the National Judicial College received the interest from that endowment. Then, when the State was placed in a budget crunch, the money was taken from the endowment. In lieu of the endowment fund, the Legislature appropriated the amount that would have been received in interest to both the judicial college and the family court judges council.
If the money is available, then these amounts could be funded in the second year. That is really the issue before us.
Senator Tiffany:
Do we know how much money is involved?
Senator Raggio:
We can get that amount.
Senator Tiffany:
Is it a couple of thousand dollars or several hundred thousand?
Senator Raggio:
It is a couple of hundred thousand dollars.
Senator Cegavske:
Could you explain again the conditions under which the money would be appropriated to these groups?
Senator Raggio:
It would only be available if there were sufficient money, over and above what the Legislature has projected as an ending fund balance, based on the Economic Forum projection at that time. We would first fund the stabilization fund. If there were money available after that, up to the historical level the State has provided these groups, then they would be funded during the second fiscal year.
Senator Cegavske:
What was that amount? Do we know?
Senator Raggio:
We can get it. I think it is on the order of $200,000 or $300,000.
Senator Cegavske:
Is this something we normally do?
Senator Raggio:
This is something we have done every year since these organizations were founded.
Senator Cegavske:
Is this the only action of this type that the Legislature takes?
Senator Raggio:
It is, to my knowledge. The action involves both colleges; two entities are involved.
Senator Cegavske:
I have just never heard of this.
Senator Raggio:
It has been in every budget since I have been in the Legislature. I do not care what the committee wants to do. I am following the suggestion contained in the letter. If the committee wants to do this, I will take a motion to that effect.
Senator Coffin:
I am familiar with this issue. I believe our support originated about the time I was first elected in 1983. Our support has gone up and down. We do our best to help these groups. These groups provide the education for our lower‑level judicial officials. They also receive training fees from judges around the country who attend these colleges. They are quite famous. They need a little money to support the education of our local judges. Their activities really bring the level of the judiciary up a notch and helps maintain a higher judicial performance standard. This is why we have supported these institutions in the past. Sometimes we have taken away the money; sometimes we have restored it. The institutions have had to live with the fact that State money is never guaranteed. I am willing to move the appropriation, whatever it has been historically, after the rainy day fund has been made whole.
Senator Raggio:
Staff can get those amounts for us.
SENATOR COFFIN MOVED TO REQUEST A BILL DRAFT TO FUND THE NATIONAL JUDICIAL COLLEGE AND THE NATIONAL COUNCIL OF JUVENILE AND FAMILY COURT JUDGES IN FY 2005 AT HISTORIC LEVELS, PROVIDED STATE REVENUE IN EXCESS OF THE AMOUNT NEEDED TO FULLY FUND THE GOVERNMENT STABILIZATION FUND IS AVAILABLE. (Later introduced as Senate Bill 505.)
SENATOR RAWSON SECONDED THE MOTION.
Senator Raggio:
I am surprised that members of the committee are unaware of these institutions. Both of these organizations are recognized internationally. Judges from all over the United States, as well as from other countries, come to Nevada to participate in these very prestigious institutions. They have always received partial funding by the State. Now, there is no funding for them in the budget. I certainly support the motion.
THE MOTION CARRIED. (SENATORS TIFFANY AND CEGAVSKE VOTED NO.)
*****
Senator Raggio:
We will request a bill draft for that purpose.
Staff, how do you anticipate the bills being presented?
Mr. Ghiggeri:
I anticipate the Appropriations Act will be introduced tomorrow by Ways and Means. The Authorizations Act should be introduced by Senate Finance tomorrow. Hopefully, the capital improvements bill will be introduced tomorrow, also by Senate Finance. I think Ways and Means will introduce the Distributive School Account bill this year. I believe the class‑size bill will be handled by Senate Finance. I think the pay bill will be introduced by Ways and Means.
Senator Raggio:
Is that the unclassified pay bill?
Mr. Ghiggeri:
That is the unclassified pay bill and the 2 percent increase.
Senator Raggio:
We will be in recess from the conclusion of this meeting at 10:24 a.m. until the call of the chair.
RESPECTFULLY SUBMITTED:
James D. Earl,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: