MINUTES OF THE
SENATE Committee on Finance
Seventy-second Session
June 2, 2003
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 10:00 a.m., on Monday, June 2, 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 Cegavske
Senator Sandra J. Tiffany
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATORS PRESENT:
Assemblyman William C. Horne, Clark County Assembly District No. 34
STAFF MEMBERS PRESENT:
Gary Ghiggeri, Fiscal Analyst
Rick Combs, Deputy Fiscal Analyst
Russell J. Guindon, Deputy Fiscal Analyst
Ted A. Zuend, Deputy Fiscal Analyst
Mindy Braun, Education Program Analyst
Donald O. Williams, Chief Principal Research Analyst
Pamela Carter, Committee Secretary
OTHERS PRESENT:
Stan Olsen, Lobbyist, Las Vegas Metropolitan Police, and Nevada Sheriff’s and Chief’s Association/South
Chairman Raggio:
This morning the first order of business is Bill Draft Request (BDR) S-1377. This is the bill containing appropriations included in the Executive Budget to deal with capital improvement projects (CIPs). These are all the projects approved by the committee, and the effect of this is to authorize the projects indicated in the bill, and to add an additional 1 cent to the 15 cents the State has historically utilized for CIPs. It is my understanding the additional 1 cent for the State is outside the cap, and it does not impact local governments. I believe the effect of the voters on the approved park projects bill would necessitate the additional 1 cent, and I believe that is also outside the cap.
BILL DRAFT REQUEST S-1377: Authorizes and provides funding for certain projects of capital improvement. (Later introduced as Senate Bill 507.)
SENATOR RAWSON MOVED TO INTRODUCE BDR S-1377 TO THE SENATE COMMITTEE ON FINANCE.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Raggio:
I will now accept a motion to do pass BDR S-1377.
SENATOR RAWSON MOVED TO DO PASS BDR S-1377.
SENATOR MATHEWS SECONDED THE MOTION.
Chairman Raggio:
Is there any objection to the motion?
Senator Cegavske:
Is that the CIP?
Chairman Raggio:
This is the CIP bill. Is there any objection to the motion to do pass? Senator Cegavske, are you voting “no”?
Senator Cegavske:
Yes. By the way, I would like my testimony for this meeting to be recorded verbatim.
THE MOTION CARRIED. (SENATOR CEGAVSKE VOTED NO.)
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Chairman Raggio:
I am allocating 2 minutes to Assembly Bill (A.B.) 441. This is one we heard yesterday. We had a series of proposed amendments. I asked Mr. Williams and others to look into this to see what needed to be done to the proposed amendments, because there is no use passing it if we do not have agreement from the sponsors. Mr. Williams, report back to us.
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)
Donald O. Williams, Chief Principal Research Analyst:
There were four issues that arose yesterday during the work session. One issue was Senator Cegavske’s concern about taking out the Legislators as members of the Nevada Commission on Homeland Security. Assembly Speaker Perkins and the Governor’s office reached an agreement to have two nonvoting Legislators on the commission. The Senate Majority Leader would appoint one, and Assembly Speaker Perkins would appoint the other. That is the only change to the amendment. The other issues, I understand, have been resolved. As far as Senator Rawson’s proposed amendment, I understand the Heart Association has agreed to support the amendment as written, which leaves in provisions for automated external defibrillators, but takes out the funding.
Regarding Senator Tiffany’s concerns about a Department of Information Technology (DoIT) amendment, our fiscal staff looked into her questions about the budget subcommittee closings, and determined there is not a conflict between the budget subcommittee closings and this proposed amendment. The last issue regarded Senator Coffin’s proposed amendment to Section 21, subsection 2, paragraph (f) of A.B. 441, which deals with radio frequency transmissions. Assembly Speaker Perkins had indicated that he would accept the amendment only if law enforcement agreed to it. I can state for the record our Legal Division looked into the issues raised by various national organizations, and the Clark County District Attorney’s Office looked into the issue, and they did not agree with the concerns raised by those organizations.
Senator Coffin:
That last phraseology is somewhat policy, and I believe we ought to relieve staff from becoming involved in the middle of it, because since I have not heard from legal, I do not know if they actually had a position contrary to the National Community of Radio Enthusiasts and Hobbyists. Recapping quickly what made me nervous, as well as many other people outside the building, was Section 21, subsection 2, paragraph (f). In trying to avoid getting into a conflict with Assembly Speaker Perkins regarding A.B. 441, we discussed possibly putting additional intent to criminally subvert the country or the State with the use of radio frequencies and the publication thereof, and so forth, into the bill. Assembly Speaker Perkins responded affirmatively by suggesting we could, perhaps, work out some language. As a result of that conversation, legal and research for the Assembly committee came up with the language in front of you.
We met after yesterday’s meeting. My intention was not to do away with paragraph (f), which was the bone of contention, but to try to come up with real intent language. We did not want people caught up in this net by an overreaching governmental action. I met with law enforcement afterwards. We came up with some thoughts, but we did not have quite the right words to indicate law enforcement would like to keep secret, under the Governor’s order, the encryption codes used on these frequencies or the devices, whether published or not, that allow scrambling, frequency hopping, and allow communications to be kept intact in times of emergency.
I agreed to that, and we are supposed to hear from law enforcement this morning as to whether or not they have the proper words to put into the bill to accommodate that sort of agreement. They are here now, and if they have had the opportunity to talk to technical people about the proper wording, paragraph (f) could stand, and my amendment could be withdrawn.
Stan Olsen, Lobbyist, Las Vegas Metropolitan Police, and Nevada Sheriff’s and Chief’s Association/South:
Our radio people cannot come up with wording. I have talked to the investigators who would be charged with doing this. They believe the amendment published yesterday, highlighted in yellow, would be counterproductive in some cases. We believe what is already in the top part of Section 1 of A.B. 441 covers it. Our intent is not to grab the hobbyists who listen to radios. At the risk of making this sound minor, we have to be trusted at some point.
Assemblyman William C. Horne, Clark County Assembly District No. 34:
I was assigned the task of working on A.B. 250 and A.B. 441, so I am fairly familiar with it. As Mr. Williams stated, Assembly Speaker Perkins said if law enforcement members were in agreement with the proposed amendment, it would be acceptable to him. In turn, law enforcement came to me, and I looked at the amendment as well as the text of the bill and its intent. As you know, throughout hearings on both A.B. 250 and A.B. 441, we took great pains in assuring the proper mens rea was present, and that intent, in particular, was outlined in the two bills. I believe Senator Coffin’s concerns, while valid, have been addressed in A.B. 441. I believe any additional language would become cumbersome. I do not believe an additional amendment is necessary.
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)
Senator Coffin:
I do not get the feeling an attempt was made to find new language to address what we had agreed to last night. Therefore, I do not believe we should try to excise paragraph (f). I am willing to go along with Assembly Speaker Perkins and leave it there, but I believe the new subsection 4 is important. I do not believe it will kill the bill if we pass it, nor do I believe it is going to hurt law enforcement. If it is cumbersome, that is something law enforcement sometimes has to live with for the civic welfare and civic rights of people. Therefore, I would move that we amend A.B. 441.
Chairman Raggio:
We have a proposed amendment, and you want to add to the proposed amendment, is that correct? We have the revised proposed amendment, which, among other things, appoints two nonvoting Legislators to the commission. I understand the reason they cannot vote is because it is a commission. Is that correct?
Mr. Williams:
Yes, that issue had come up on the other side, as to whether we could have members from the Legislature and the Governor voting on the commission. Our Legal Division was straightforward in saying “no,” because it would violate separation of powers. Either the Executive Branch would vote or the Legislators would vote, but not both. The compromise was to have the two Legislators as nonvoting members.
Senator Coffin:
I see the language in this amendment that would have been used in the other sections of the bill to which law enforcement and I agreed. Did you discuss this with law enforcement, Mr. Williams?
Mr. Williams:
Which amendment are you referring to?
Senator Coffin:
I am referring to the Governor’s amendment.
Mr. Williams:
Yes, it is the proposed amendment from the Speaker.
Senator Coffin:
On page 3 of proposed Amendment No. 1008 to A.B. 441 is the exact language we would have used for clarification in the other sections of the bill. Section 27.5, subsection 1, paragraph (a), subparagraph (1), states, “Access codes, passwords and programs used to ensure the security of an information system;” and (2) “Access codes used to ensure the security of software applications.” Is this in a section that would have general application throughout the bill? That is what we were trying for. I do not know why it is not available for Section 21.
Mr. Williams:
Senator, that particular section deals only with the Department of Information Technology.
Senator Coffin:
Did law enforcement agree to those words being inserted in Section 21? That is, in essence, what the prohibition should be on, as we agreed last night.
Mr. Olsen:
Yes, we were aware of that, again, thinking along the lines of computer technology, the computers themselves. We did not connect it with radios.
Senator Coffin:
Is it acceptable to law enforcement to help Assembly Speaker Perkins along here, suggesting these words could be inserted into Section 21?
Chairman Raggio:
Let us leave it this way. Apparently they are going to be inserted in Section 21, so I guess you will have to carry the message and see what you can do about it. Senator Coffin, make your motion to further amend and include in the revised amendment the language you are indicating in Section 21.
SENATOR COFFIN MOVED TO FURTHER AMEND A.B. 441, INCLUDING IN THE REVISED AMENDMENT THE LANGUAGE JUST DISCUSSED IN SECTION 21 OF THE BILL.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Raggio:
Mr. Williams, your task is to revise the amendment to include the applicable language in Section 21. Based on that, the committee is prepared to recommend amend and do pass.
We will next look at BDR 1374, which is a redo of a previous bill.
BILL DRAFT REQUEST 1374: Provides items for consideration by Superintendent of Public Instruction in compiling biennial budgetary request. (Later introduced as Senate Concurrent Resolution 41.)
Chairman Raggio:
This language has been redrafted on the superintendent of public instruction’s consideration in compiling the biennial budgetary request. You will note in the language on page 2 of BDR 1374, among other items, the language has been redrafted to provide the Legislature’s recognition of certain items. The language now reads, “in each of those to the extent practicable and sufficient to ensure the effectiveness of the public schools;” and in all cases to the extent practicable, because we do not want to consider this a mandate. It has to be to the extent it is practicable. If that is agreeable to the committee, I would take a motion to introduce BDR 1374, which is a concurrent resolution.
SENATOR RAWSON MOVED FOR COMMITTEE INTRODUCTION OF BDR 1374 TO THE SENATE COMMITTEE ON FINANCE.
SENATOR RHOADS SECONDED THE MOTION.
Senator Tiffany:
I would like my testimony to be recorded verbatim.
What I do not understand is the school district has the ability to do this right now with the State superintendent. The State superintendent’s budget still has to go through Mr. [John P.] Comeaux, [Director, Department of Administration]. I do not understand what this is trying to accomplish.
Chairman Raggio:
I believe it is “feel good” language the superintendents had hoped to have in a resolution. It was more or less a mandate in the original bill, and we agreed to process it if it was changed to a resolution, and the language was muted. That is, frankly, my analysis of this measure.
Senator Tiffany:
“So you agree, it still has to go through Mr. Comeaux no matter what is reviewed. You read it the way I read it then?”
Senator Rawson:
This is unusual, but could we express the will of the committee to do pass this as it is printed before us, so that we do not have to meet on the Senate Floor again?
Chairman Raggio:
Yes, I will accept a motion to do pass, as well.
SENATOR RAWSON MOVED TO DO PASS BDR 1374.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Raggio:
The resolution will be recommended for a do pass.
We have A.B. 148, which we looked at yesterday. We added the language on page 2, policies and procedures. We will utilize Amendment No. 989 to A.B. 148.
ASSEMBLY BILL 148: Requires Legislative Auditor to conduct audit of University and Community College System of Nevada and Board of Regents of University of Nevada. (BDR S-808)
Chairman Raggio:
We are in recess as of 10:15 a.m.
Chairman Raggio:
We are reconvened at 3:37 p.m. We have before us BDR S-1380. This is the bill making appropriations to the Distributive School Account (DSA) for class-size reduction.
BILL DRAFT REQUEST S-1380: Makes appropriations to State Distribute School Account for class-size reduction. (Later introduced as Senate Bill 508.)
Chairman Raggio:
This is not the DSA; this is the portion of it that deals with class-size reduction. We discussed some issues during the DSA hearing, but essentially what the proposed bill does is appropriate the sum of $108,000,937 for distribution to the school districts to employ the teachers needed to comply with the class-size reduction ratio in Grades 1 and 2 and at-risk kindergartens. Otherwise, I believe the bill is usual. The sum of $117 million is included in the second year for the same purposes. I believe the language is similar otherwise; however, as you know, we discussed the flexibility that would be allowed on this issue. If you will look at Section 3, it provides that the board of trustees of each county school district will be required to file a plan describing how the money appropriated will be used to comply with the required ratio in Grades 1, 2, and 3. It allows, in the rural school districts, which is all school districts other than Clark and Washoe, to have flexibility with a maximum of 22 to 1 in Grades 1 through 3, and 25 to 1 in Grades 4 and 6.
Senator Rhoads, this allows the same kind of flexibility now being utilized in Elko County School District. Again, the urban school districts, Clark and Washoe, are required to study class sizes in Grades 1 and 5 during the interim. This is covered in section 4 of BDR S-1380. It requires annual evaluation reports for any rural school district utilizing this flexibility and implementing an alternative class-size program. Under the language, the report must include an evaluation of the program’s affect on student achievement to the extent they are able to do so, student discipline, and team teaching. Obviously, I believe the goal of all of us is to see what kind of plan can be developed to eliminate the need for team teaching. Hopefully, this flexibility will assist. Again, Clark and Washoe school districts are required to submit a report to the 2005 Legislature, for those of you who are here, concerning alternative class sizes to increase the academic achievement of students, decrease student discipline, and decrease or eliminate team teaching. The other things are specified.
Section 6, pursuant to our agreement with the Assembly, would sunset this in a 2-year period. This is the compromise reached in our agreements on the DSA.
SENATOR RAWSON MOVED FOR COMMITTEE INTRODUCTION OF BDR S-1380.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS TIFFANY, CEGAVSKE, AND COFFIN WERE ABSENT FOR THE VOTE.)
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SENATOR RAWSON MOVED TO DO PASS BDR S-1380.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS TIFFANY, CEGAVSKE, AND COFFIN WERE ABSENT FOR THE VOTE.)
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Chairman Raggio:
We will be in recess as of 3:43 p.m.
Chairman Raggio:
As we reconvene at 10:33 p.m., the first item on the agenda is the introduction of BDR 32-1382. This bill combines the DSA, which this committee has approved, and the funding, and also provides for a tax plan for the imposition and administration of taxes for the purpose of funding the budget. I know we could have a lot of testimony on this, and everybody on this committee at this time is fully aware of the components of the tax plan. However, for the record, I am going to ask Mr. Zeund to come up. We have a sheet that was distributed to the committee and which is also available to the audience, which lists the components of the tax plan before you (Exhibit C). I am going to ask you to review it for the record.
BILL DRAFT REQUEST 32-1382: Provides revenue in support of state budget. (Later introduced as Senate Bill 509.)
Ted A. Zuend, Deputy Fiscal Analyst:
The first four items include a reduction in the cigarette stamp fee to 0.5 percent and elimination of the other tobacco allowance, the liquor tax allowance, and the retail allowance now provided in statute.
Chairman Raggio:
I might indicate to the committee, as you go through this, I have also asked staff to provide a listing of the background on current tax rates (Exhibit D), so you have the information as to the proposal to be changed.
Mr. Zuend:
The first four, which are all reductions in allowances, add about $24 million the first year, and nearly $25 million the second year, in revenue. The fifth item is the business license fee. It would be a $100 annual fee, payable upon renewal of a business license, and it would raise approximately $24 million each year over the biennium. Currently there is only a one-time fee in existence. The next item is a live entertainment tax. It is basically the casino entertainment tax expanded to both live entertainment now performed at casinos, and not now being taxed, as well as live entertainment outside the casino area.
Chairman Raggio:
What is the commencement date for non-casino live entertainment?
Mr. Zuend:
The non-casino live entertainment tax would commence January 1, 2004. If you read the statutes, the expansion in the casino industry is July 1, 2003. The casino entertainment tax is abolished on January 1 and is replaced by a general live entertainment tax that would apply equally, both within the casino sector and outside the casino sector. The only thing remaining in place is that gaming control would continue to collect the casino portion of the tax. The tax raises almost $48 million the first year and $81 million the second year. The lower number the first year is due to the 6-month lag in a portion of the tax.
The cigarette tax would be increased by $.65, which would raise the tax to $1 even. It would raise $96 million the first year and $99 million the second year. The liquor tax is a roughly 50 percent increase in each of the individual rates. There are four different rates, if you recall the tax, which are raised proportionately. This would raise approximately $10 million each year. The gaming tax would be increased in two parts. In the first year, it would be increased by 0.25 percent in all brackets, raising $22.5 million. In the second year, it would be increased another 0.25 percent in all brackets, and would produce almost $49 million. There is a similar situation with restricted slot fees. In the first year, they would be raised 33 percent from the current rate, raising $2.3 million. The bill contains an additional increase in the second year, bringing the total increase to 50 percent, and raising $3.6 million.
The Office of the Secretary of State fees are in this bill, in part. Assembly Bill 536, which I believe is in conference or has been reported out of conference, had a number of fee increases.
ASSEMBLY BILL 536 (4th Reprint): Makes various changes to provisions pertaining to business. (BDR 7-454)
Mr. Zuend:
The reason the fee increases are included in this bill is that part of the fee increase was reduced for annual renewals because of the $100 business license fee. It increases the business license fee money quite a bit, because it would apply to everyone registered with the Office of the Secretary of State, at least in for‑profit areas, as well as sole proprietors. I might point out direct sellers are specifically excluded from business license fees. The business license tax is increased; I believe your notes are incorrect on this, to $125 in fiscal year 2004, raising $20 million for the first year of the biennium. The tax is then rolled back in fiscal year (FY) 2005, or reduced to $85, which is, of course, less than it is now. It is a yearly rate, and will cost $12.6 million in FY 2005. It is further reduced to $50 in FY 2006.
Chairman Raggio:
Is the reduction to $50 from the present $100 per year per employee?
Mr. Zuend:
That is correct, Senator. Also imposed is a bank franchise fee, which is expected to raise a little over $20 million in each year of the biennium. The fee will actually be imposed on July 1, 2003; it is incorrect in the margin here. It will allow the Department of Taxation 9 months to begin collecting, so they can gear up for it. In effect, the first collection will be a 9-month collection rather than a 3-month collection. The next item is a real estate transfer tax, set at $1.88 per $500 of value, although that value will first be determined by eliminating the first $100,000. Everything over $100,000 will be taxed on the transaction. This will raise $24.2 million the first year, and approximately double that the second year, because the tax does not take effect until January 1, 2004. This also provides a small commission for the counties to collect the tax, as well as a provision to allow counties with populations of under 30,000 to request assistance from the Department of Taxation, if needed.
Finally, the uniform business tax (UBT) would be implemented January 1, 2004, on only those businesses with $750,000 per quarter or $3 million per year of gross receipts. It will last for the whole calendar year because of the problems the Department of Taxation would have implementing the tax on a broader basis. This limits the imposition to about 3000 businesses in the State. It is expected to generate $49.8 million the first year, and in the second year, again, you will have a partial collection for the first 6 months.
Chairman Raggio:
The rate is 0.25 percent?
Mr. Zuend:
Yes, sir. It is 0.25 percent and the standard deduction of $450,000 for every business, which has been discussed quite a bit, apparently eliminates over 50 percent of all businesses in the State from having to pay any tax. It also applies an alternative tax of 1 percent of gross profit. Basically gross profit is gross receipts, net of cost of goods sold, and it is pure cost of goods sold. In other words, it affects the products that go into a sale, the purchases you do for resale, or, in the case of a manufacturer, for example, the input to a manufacturing output. There are also deductions for subcontractor costs incurred by a master developer to prevent cascading of the tax in various pieces of the contractor process. Additionally, there is a deduction for any revenue received by a business for any sale of food currently exempt from the sales and use tax. In the second year, $146.4 million would be raised, much higher than in the first year, because there is full implementation of the tax expected on January 1, 2005. All businesses, at that point, would be subject to the tax. The tax package would raise $355.3 million the first year, and $513.8 million the second year, for a total of approximately $869 million over the biennium.
Chairman Raggio:
You have covered all the taxes, and the bill we have before us comports with these items?
Mr. Zuend:
Yes. This bill only amends the fees in A.B. 536 to lower the annual renewal fee for those who transact business with the secretary from, generally, $125 to $85, to avoid the double whammy of the $100 annual fee and a $40 increase in the base fee. Those are the parts of BDR 32-1382. Assembly Bill 536 is expected to be processed separately, and it contains other transaction fee increases.
Chairman Raggio:
I will accept a motion for introduction of BDR 32-1382.
SENATOR COFFIN MOVED FOR COMMITTEE INTRODUCTION OF BDR 32-1382.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS CEGAVSKE, TIFFANY, AND MATHEWS VOTED NO.)
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Senator Tiffany:
Thank you, Mr. Chairman. I appreciate the opportunity to say something, because, frankly, I am a little disappointed in the style and the tactic that has been used in this committee. There are a lot of budgets I have voted for and against, and I have to say I voted for all of the K-12 funding. I sit on the tax committee, and we have voted down time and time and time again this UBT tax that is bundled into this, and it keeps popping up again. I have to say we have 1 hour and 15 minutes until we, hopefully, will sine die, and I think this last-minute tactic to bundle together the K-12 funding with an absolutely unacceptable tax, is something I am kind of embarrassed about. I hope I have an opportunity to vote for the K‑12 funding on an individual basis, like I did in this committee, and not have it be bundled with a tax that I have been, very clearly, throughout the whole session, against.
Senator Coffin:
The taxation committee had a chance to hear this tax proposal and rejected it 6 to 1, out of hand, within 15 minutes. They were not given a chance to present it.
Senator Rawson:
This is a big bill, and I am wondering if we have sufficient language in it to be able to do any technical corrections. Is there anything we need to follow this with to be able to make sure it is workable?
Rick Combs, Deputy Fiscal Analyst:
I do not see any transitory provisions at the end stating anything to that effect, but I do know the Legal Division has been working hard to get this in the right order, and we have been looking at it as well.
Senator Cegavske:
Thank you, Mr. Chair. I have to agree with the comments my colleague, Senator Tiffany, made, and I am very disappointed in the tactics and the way this is presented to us. I worked very hard on and supported the DSA. I was proud of it, I am proud of what we did on that. We did this in the committee together, and I did not always agree on all the budget items. I voted against those that I did not support, but I guess I shouldn’t be surprised, but I am, because the DSA should have been dealt with separately. We should have been able to work on that on its merits for what it was and where it was voted up and down. The taxes are a totally different issue. We have not been able to be a part of everything that has happened with the taxes. There has been a vacuum of a handful of people that have been working on this, and I am extremely disappointed. I represent the people of the State of Nevada and I don’t think this is the kind of information that is healthy and is good for what we are supposed to be doing. This appropriation, this bill right here, should be split. It should not come with these two items together. They are completely two different issues to battle.
Chairman Raggio:
At this time, I am going to accept a motion for do pass on the bill from this committee. Is there a motion?
SENATOR RHOADS MOVED TO DO PASS BDR 32-1382.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS CEGAVSKE, TIFFANY, AND MATHEWS, VOTED NO.)
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Chairman Raggio:
The bill will be recommended for do pass by this committee.
Senator Coffin:
I am reserving the right to vote for possible amendments on the Senate Floor.
Chairman Raggio:
Yes, I understand, and I am sure there will be some.
Let us go to some other items. Senate Bill (S.B.) 499 was amended by Assembly Amendment No. 977.
SENATE BILL 499 (2nd Reprint): Makes appropriations to Interim Finance Committee for allocation to state entities for radio system costs, infrastructure upgrades and user equipment. (BDR S-1364)
Chairman Raggio:
This is the bill to fund the upgrades and the radio system cost for the Nevada Highway Patrol, and I believe the amendment merely changes the amount required from the General Fund.
Gary Ghiggeri, Fiscal Analyst:
When the Assembly reviewed this legislation, they reduced the amount of funding from the General Fund from $1.8 million to $1.5 million and provided for the use of up to $300,000 from the forfeiture accounts administered by the State treasurer. The funding is the same; the source of the funds has been altered slightly.
Chairman Raggio:
I can accept a motion to concur with Assembly Amendment No. 977 to S.B. 499.
SENATOR RHOADS MOVED TO CONCUR WITH ASSEMBLY AMENDMENT NO. 977 TO S.B. 499.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Raggio:
Please look at S.B. 210.
SENATE BILL 210 (2nd Reprint): Revises provisions governing regional training programs for professional development of teachers and administrators. (BDR 34-636)
Chairman Raggio:
I believe the only proposed amendment to S.B. 210 was Assembly Amendment No. 985, changing the reference to “Executive Director” of the Nevada State Education Association, to “President.” I would accept a motion to concur.
SENATOR RAWSON MOVED TO CONCUR WITH ASSEMBLY AMENDMENT NO. 985 TO S.B. 210.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Raggio:
Committee, please look at S.B. 250.
SENATE BILL 250 (2nd Reprint): Revises various provisions relating to regulated businesses and professions. (BDR 57-835)
Chairman Raggio:
This bill came back to this committee even though the Senate Committee on Commerce and Labor originally processed it. This is the bill we heard extensive testimony on dealing with the Board of Medical Examiners. I ran this by the chairman of the Senate Committee on Commerce and Labor. We are looking at Assembly Amendment No. 987, and I believe the issue was on preponderance of evidence vis-à-vis clear and convincing evidence. The amendment deletes “clear and convincing” and inserts “preponderance” for the most part. Senator Townsend said it was acceptable.
SENATOR COFFIN MOVED TO CONCUR IN ASSEMBLY AMENDMENT NO. 987 TO S.B. 250.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Raggio:
I believe this is an appropriate time to look at A.B. 555, which is coming from the Assembly and referred to this committee. This is the unclassified salary bill.
ASSEMBLY BILL 555: Increases salaries of certain public employees. (BDR S‑1381)
Chairman Raggio:
You will see on the sheet staff has handed out the summary of the bill (Exhibit E).
Mr. Ghiggeri:
This is the unclassified pay bill. You will see in Section 1 of A.B. 555, the legislation establishes maximum salaries for those positions in the unclassified services. Section 2 provides authority in the Interim Finance Committee (IFC) to make corrections or additions to the positions.
Senator Tiffany:
“I have a question. Thank you. Mr. Ghiggeri, maybe you can answer this. This is on page 25. I was just wondering why a senior psychiatrist would be $154,000, and a senior physician is $135,000. How did that happen?”
Mr. Ghiggeri:
The State of Nevada has experienced extreme difficulties in recruiting and retaining psychiatrists.
Senator Tiffany:
“So, it is for recruiting purposes?”
Mr. Ghiggeri:
In both northern and southern Nevada, adult mental health facilities have had extreme difficulties in recruiting and retaining psychiatrists.
Senator Tiffany:
“Has it always been that way?”
Mr. Ghiggeri:
It has probably been that way during the last 10 years. As I recall, psychiatrists’ salaries have been higher than physicians’ salaries.
Senator Tiffany:
“How about the State officer? Is that usually an M.D. [medical doctor]?”
Mr. Ghiggeri:
It has been in the past.
Section 2 allows the IFC to add positions that may have been omitted from the legislation. Section 3 increases the salaries in Sections 1 and 2 by 2 percent, effective July 1, 2004.
Chairman Raggio:
Is that the same as is being done with the classified positions?
Mr. Ghiggeri:
Yes, it is. Section 4 provides the appropriation for the 2 percent pay raise for positions in Sections 1 and 2, both from the General Fund and the Highway Fund. Section 5 provides for the credentialed pay raise, or pay funding for the Gaming Control Board, which is $197,500 in FY 2004 and $212,500 in FY 2005. Section 6 includes a 2 percent increase for classified employees. That is approximately $4.6 million. Section 7 provides a classified medical salary funding of 2 percent, which is approximately $206,000. Section 8 lists the classified medical salaries. Section 9 lists the funding for a 2 percent increase for classified employees from the Highway Fund, which amounts to approximately $1.8 million.
Section 10 provides funding for a 2 percent increase for the university and community college classified and professional employees, which is approximately $8 million. Section 11 provides for the reversion of funds on June 30, 2005. Section 12 provides funding for a 2 percent pay raise effective July 1, 2004, for employees of the Legislative Counsel Bureau; that is approximately $343,000. Section 13 provides authorization to utilize funding in other sections of the legislation for the one-third cost of the pay raises providing California provides a two-thirds match. Section 14 permits transfer of general funds between functions, if required. Section 15 provides language that would permit a classification study of university and community college police officers. The results of that study are to be reported to the IFC, and the IFC may approve a grade increase effective July 1, 2004. However, no additional funding will be provided should a pay raise be granted. Section 16 provides for this act to become effective July 1.
Chairman Raggio:
I would accept a motion to do pass A.B. 555.
SENATOR RHOADS MOVED TO DO PASS A.B. 555.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Raggio:
Senator Rawson will distribute A.B. 482, which involves the disproportionate share of Medicaid patient payments. As indicated previously, I will recuse myself from discussion or voting on this measure.
ASSEMBLY BILL 482 (1st Reprint): Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38-687)
Vice Chairman Rawson:
Committee, the Assembly has refused to act on S.B. 235, where we dealt with the disproportionate share issue. They have come to an absolute stop on adding any public funds to Sunrise Hospital. I believe there has been a decent case made for that, but what is at stake here is we have more than half a dozen rural hospitals that are in absolute jeopardy if we do not process something, and we are out of time to negotiate on this. I believe the easy way to resolve this, at this point, is to pass A.B. 482. It essentially strikes any money for Sunrise Hospital. The rest of it is the same as we heard in A.B. 297 and S.B. 235.
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)
SENATE BILL 235 (2nd Reprint): Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38-746)
SENATOR RHOADS MOVED TO DO PASS A.B. 482.
SENATOR COFFIN SECONDED THE MOTION.
Senator Tiffany:
I think Sunrise made a pretty darn compelling case for their position, as well as some of the charts I saw. But, really what I wanted to find out, did we go through both conference committees? Did we only go through one conference committee? What did we do on the bill that we went to the mat to make sure that the committee, that went through all this trouble, went as far as we could go as opposed to giving up early and doing this as an alternative?
Vice Chairman Rawson:
They simply did not process our bill, and so we had nothing to conference on. We did not process theirs, so they had nothing to communicate on. They simply took another bill and essentially removed all the language and substituted the language they had in A.B. 297. In a discussion of this I had the attorneys representing Sunrise Hospital, and I spoke personally with the chairman, as well as Assembly Speaker Perkins, and there was simply an impasse. There was no movement. I believe in the long run it would have reflected badly on them to have these rural hospitals lose their funding, to lose the $4 million that goes to Washoe County. It was not necessary to do anything for University Medical Center. They have the authorization without this bill, although I believe that would have reflected badly on them. The net effect might have been bankruptcy for some of the rural hospitals. It is not a game of chicken that I was willing to play.
Senator Tiffany:
“I guess I don’t look at it as a game of chicken. I look at it as this was what the committee’s will was, and I think we should do everything we possibly can to make sure the committee’s will was met.”
Vice Chairman Rawson:
I believe that was done, and what we have, at this point, is this instrument. If they are not processing on the other side, there is nothing for us to go to conference on. We have legal approaches before us, and if we want to see those rural hospitals taken care of, this is the instrument. Otherwise, I believe we have done a real disservice. That is a tough option, but I think you are faced with the same choice that I am.
THE MOTION CARRIED. (SENATOR TIFFANY VOTED NO. SENATOR RAGGIO ABSTAINED FROM VOTING.)
*****
Chairman Raggio:
I believe we can look at A.B. 203, which was heard on May 24. This bill related to higher education and created the Committee to Evaluate Higher Education Programs.
ASSEMBLY BILL 203 (1st Reprint): Creates Committee to Evaluate Higher Education Programs. (BDR S-809)
Chairman Raggio:
There is an appropriation in the bill.
Mr. Ghiggeri:
There is a $250,000 General Fund appropriation in this legislation. Testimony indicated the funding is required for the use of consultants’ expertise during the study.
SENATOR CEGAVSKE MOVED TO INDEFINITELY POSTPONE A.B. 203.
SENATOR TIFFANY SECONDED THE MOTION.
Senator Coffin:
What is the reason for the move to indefinitely postpone A.B. 203?
Senator Cegavske:
“I believe it has an appropriation in it, and it is not included in the Executive Budget.”
Senator Tiffany:
Mr. Chairman, we are already doing an audit, and even though this is programs, I think we’re already, and I know that they are paying $90,000 for it. While we are cutting everybody else’s budget, we are trying to raise some taxes. This is done at the last minute. Higher ed[ucation] is already getting an audit. I just see absolutely no reason for it.
Senator Coffin:
Mr. Chairman, this bill adopts a programmatic approach to the audit, in essence, the oversight. We have a budget of more than $1 billion at the university. At any given moment it could be subject to a lot of criticism, particularly if you follow the actions of the Board of Regents, and many times they receive a lot of public criticism. I believe it would be helpful if we were able to work with the regents to help evaluate their existing programs because we are investing so much money in the university. I believe the original audit that has been discussed is a narrowly based audit, and this one would tend to be a little more of an inside look at what goes on.
Senator Mathews:
This does not look like it is from the Board of Regents.
Chairman Raggio:
I cannot recall the testimony. Mr. Perkins testified, of course, and the Chancellor and Regent Dondero, as well as Dr. Richardson.
Senator Mathews:
They did not imply this was from the Board of Regents. That is what I heard from Senator Coffin.
Chairman Raggio:
I do not believe it was from the Board of Regents, and I do not know that their testimony was in opposition. I do not recall that.
THE MOTION FAILED.
*****
SENATOR RHOADS MOVED TO DO PASS A.B. 203.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS CEGAVSKE AND TIFFANY VOTED NO.)
*****
Senator Coffin:
I sent a letter to all the Assemblymen and Senators a while ago indicating my intention to move for suspension of Joint Rule 9.5 on terminating the session at midnight. I was the sponsor of Senate Concurrent Resolution 26 and proud of it, and objected vigorously to our inability to finish last session at midnight. Therefore, I crafted the resolution, and both Houses passed it. It has been enrolled, and it is with the Secretary of State.
SENATE CONCURRENT RESOLUTION 26: Amending the Joint Rules of the Senate and Assembly for the 72nd Session of the Legislature to clarify the time by which the Legislature must adjourn the session sine die. (BDR R-1328)
Senator Coffin:
When we go to the Senate Floor, I am going to move to suspend my own resolution so that we can make some headway and see if we can close before we have to go into special session. I hope we will get to the Senate Floor before midnight so I can make my motion.
Chairman Raggio:
We are going right now. This committee is adjourned at 11:14 p.m.
RESPECTFULLY SUBMITTED:
Jo Greenslate,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: