of the

ASSEMBLY Committee on Ways and Means


Seventy-First Session

April 11, 2001



The Committee on Ways and Meanswas called to order at 7:37 a.m. on Wednesday, April 11, 2001.  Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Guest List.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.





Mr.                     Morse Arberry Jr., Chairman

Ms.                     Chris Giunchigliani, Vice Chairwoman

Mr.                     Bob Beers

Mrs.                     Barbara Cegavske

Mrs.                     Vonne Chowning

Mrs.                     Marcia de Braga

Mr.                     Joseph Dini, Jr.

Mr.                     David Goldwater

Mr.                     Lynn Hettrick

Ms.                     Sheila Leslie

Mr.                     John Marvel

Mr.                     David Parks

Mr.                     Richard D. Perkins

Ms.                     Sandra Tiffany








Mark Stevens, Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Jim Rodriguez, Program Analyst

Rick Combs, Program Analyst

Lila Clark, Committee Secretary


Assembly Bill 470:  Creates juvenile crime reduction fund and provides for its             administration and use. (BDR 5-1012)


Assemblyman David E. Humke, Assembly District 26 from Washoe County, introduced himself.  He thanked the committee for hearing his testimony on A.B. 470 out of agenda order as he had to return to Reno for an appearance in court.  Mr. Humke said A.B. 470 contained an appropriation of $1.6 million.  He referred to Exhibit C that was entitled A Legislative Proposal Creating “The Juvenile Crime Reduction Fund.”  He introduced Mr. Larry Carter, Juvenile Justice Specialist, who staffed the Nevada Juvenile Justice Commission.  Mr. Humke said he was a member of the commission. 


Mr. Humke said A.B. 470 was the work product of a committee of the commission.  It would create the Juvenile Crime Reduction Fund that would use state dollars which would be allocated to the local court districts to provide services to juvenile offenders at a relatively early stage of their offense pattern so there could be prevention of state institutional placement and, thus, the expenditure of large amounts of state dollars.  Mr. Humke asked for the committee’s indulgence with the bill.  He said he knew the committee had a severe fiscal problem but he was negotiating with the Governor’s Office and the Division of Child and Family Services (DCFS) to determine a manner in which the appropriation for the bill could be reduced so that the program could be started in some way. 


Mr. Larry Carter, Chief of the Juvenile Justice Program, introduced himself.  Mr. Carter said he staffed the Nevada Juvenile Justice Commission and its work groups.  He stated that the bill came as a response through A.C.R. 57 and A.C.R. 13, the two interim legislative study committees on juvenile justice.  Juvenile justice, during the 1990s, made great strides through responses from the Juvenile Justice Commission, the state legislature, and the Nevada Association of Juvenile Justice Administrators.  The work groups looked at whether Nevada should approach the program in a manner similar to the “Reclaim Ohio” model.  After extensive research, planning, and meetings, it was determined that that type of change was not necessary for Nevada.  As a result, the work group recommended additional funding for the Juvenile Crime Reduction Fund as explained in Exhibit C.  The Nevada Juvenile Justice Commission and Youth Correctional Services recognized that the funds had not been included in The Executive Budget.  The bill was a response to recommendations from A.C.R. 13.  Mr. Carter said he appreciated the committee’s consideration and efforts to meet the most critical needs of juvenile justice in Nevada. 


Ms. Giunchigliani asked if the funding was intended to be a one-shot appropriation or ongoing.


Mr. Carter said the bill was written to include one-half of the funds in each year of the biennium.  He said the issues to be addressed with the funds would be ongoing. 


Mr. Leonard Pugh, Vice President of the Nevada Association of Juvenile Justice Administrators, introduced himself and said he was there to support A.B. 470.  He pointed out that one of the reasons that the Juvenile Justice Commission’s work study group was asked to look at the “Reclaim Ohio” plan was that four or five years ago Nevada’s youth correctional facilities were in a critical, overcrowded situation.  As a result of that, the legislature appropriated money for the construction of the Summit View Facility in Clark County which had offered some relief to that problem.  However, the juvenile population in Nevada was increasing at a significant rate.  For example, in 1995, the total male juvenile population between 8 and 18 years old was 106,540.  In 2000, it was 137,312.  Yet, in 1995, statewide there were 589 males committed to correctional care and in 2000, there were only 419 male commitments.  One of the reasons why the number of commitments had been reduced was because the legislature appropriated the Community Corrections Partnership Block Grant monies in 1996.  Those monies were given to local jurisdictions to develop community-based programs that would keep children out of the institutions.  Mr. Pugh said he felt that those programs had been successful in doing that and that could be seen by reviewing the numbers in Exhibit C.  Instead of going into a complicated funding formula similar to “Reclaim Ohio” in order to continue maintaining a lower number of male commitments and hopefully reducing the need to construct another expensive juvenile correctional facility, the Nevada Association of Juvenile Justice Administrators felt that more money brought to the local level for those sorts of programs would target substance abuse issues and mental health issues related to juveniles.  That would delay the need for construction of more facilities. 


There being no further testimony on A.B. 470, Chairman Arberry closed the hearing on A.B. 470 and opened the hearing on A.B. 285


Assembly Bill 285:  Provides for appeal of decision of appointing authority             regarding use of catastrophic leave by state employee. (BDR 23-438)


Assemblywoman Bonnie Parnell, representing Assembly District 40 from Carson City, introduced herself.  She explained that A.B. 285 would create a five-member committee on catastrophic leave that would hear appeals from decisions of appointing authorities.  The committee would consist of five members appointed by the Governor, three who were executive officers of state agencies and two who would represent labor.  The intent of A.B. 285 was to assure consistency in the granting of catastrophic leave.  Decisions on the use of catastrophic leave were currently made within each agency.  State employees had found that a set of circumstances in one agency that might warrant catastrophic leave might not be consistent with another agency’s policies on granting catastrophic leave. 


Section 1 of A.B. 285 showed the makeup of the committee and explained how the committee would be created.  Section 3 referenced the chairmanship and detailed meetings.  Section 4 covered the appeal process.  Ms. Parnell believed the bill was a good bill and that was why she was appearing before the committee on behalf of the State of Nevada Employees’ Association. 


Mr. Bob Gagnier, State of Nevada Employees’ Association, introduced himself.  He said that Ms. Parnell had stated the primary reason for the bill and that was to ensure consistency in the use of catastrophic leave as that was currently lacking.  It had been discussed in the Committee on Government Affairs that rather than creating some new body, which A.B. 285 did, it should be referred to the grievance procedure.  The law that created catastrophic leave specifically stated that it could not be appealed through the grievance procedure.  There were a couple of reasons for that but one of them was that the grievance procedure was extremely lengthy.  It took a long time to get grievances processed and when the need for catastrophic leave was involved, the decision would need to be made in a short time.  Mr. Gagnier said the bill did not propose full-blown hearings, only hearings designed to maintain consistency.  He suspected that rather than conducting a large number of meetings of the body, having it in existence would negate the need to appeal to it.  If someone knew that there was a body that could review the decision, the person might be a little more consistent in the dealings with the employees.  The bill was sent to the Committee on Ways and Means because the proposal was estimated by the Department of Personnel to cost $20,000 per year.  Mr. Gagnier said he was unsure whether that figure was high or low because he did not know how many appeals there would be to the committee.  He thought that the estimate might be high because he would foresee that the committee would hold a number of its hearings by teleconference. 


Another alternative was to have a panel conduct the appeal.  There was a provision in the bill that three members constituted a quorum and two of those could render a decision.  There could be separate meetings in Las Vegas and in northern Nevada in order to hold down the costs.  Basically, the bill attempted to inform the state agencies that there was oversight on denial of catastrophic leave.  Mr. Gagnier reminded the committee that catastrophic leave was not something that was a gift to state employees by the state because other employees had to donate to the catastrophic leave account.  There were employees who had given up their own sick leave so that people with major illnesses or those that had suffered major accidents would have access to the leave and uninterrupted income. 


Ms. Jeanne Green, Director of the Department of Personnel, introduced herself and said that the Department of Personnel was not taking a position on A.B. 285.  She provided statistics regarding the use of catastrophic leave to assist the committee.  In calendar year 2000, there were 217 requests for catastrophic leave.  Of those requests, 195 were approved.  Of those that were denied, the reasons for denial were:  two employees left state service before the request was acted upon; in two cases no one donated leave to the employees; one employee submitted the request after he had been back on the job for a long period of time; and 17 requests were denied because the employees did not meet the qualifying conditions or did not provide the medical documentation required.  Of the 195 recipients that were granted leave, 49,386 hours were granted at a value of $771,000. 


There being no further testimony on A.B. 285, Chairman Arberry closed the hearing on A.B. 285 and opened the hearing on A.B. 602


Assembly Bill 602:  Makes various changes to provisions governing powers and             duties of attorney general. (BDR 18-488)


Ms. Frankie Sue Del Papa, Attorney General (AG), introduced herself and Chief Deputy Higgins.  She stated she appreciated the opportunity to appear before the committee in support of A.B. 602.  She said she wanted to enumerate some reasons why she felt the bill was important.  Ms. Del Papa said the Attorney General’s office, like most other state agencies, over the past two years had undergone an extraordinary amount of staff turnover.  It had been the most incredible amount of staff turnover that she had seen in her entire tenure in state service.  The turnover problem was compounded by the fact that the AG’s office had experienced difficulty in hiring not only attorney positions but other positions within the office.  Oftentimes, the office was in need of specialized skills and also specialized legal backgrounds that would be helped by the passage of A.B. 602.  Examples of attorneys with expertise in particular types of law included Tim Hay, who was the Consumer Advocate, with expertise in utilities and deregulation.  Mr. Kevin Higgins was in charge of the Workers’ Compensation Fraud Unit.  In addition to those duties, he had developed a very keen background in high-tech crime.  He assisted with the high-tech crime unit, Internet crime, and such things as auction fraud, luring of children, identity theft, and privacy issues.  Ms. Del Papa said she believed that some of the committee members were aware of that expertise and had taken advantage of it in terms of bills that were important in those areas.  Another individual she was concerned about retaining in her office was John Albrecht.  There were four people who had been involved with the tobacco litigation in the AG’s office.  Those individuals were Ms. Del Papa, Brooke Nielsen, Ann Cathcart, and John Albrecht.  Ann Cathcart had passed away, Brooke Nielsen left to go to another agency, and that left John Albrecht and Ms. Del Papa.  She said that the tobacco settlement agreement and the other tobacco issues were an ongoing project.  Every meeting that she attended at the national level dedicated at least one-half a day to tobacco issues.  If someone with the institutional knowledge that Mr. Albrecht possessed was lost, it would impact the AG’s office.  It was also very important to have the litigation deputies and the gaming deputies.  She said that it had not yet been announced publicly, however, the AG’s Chief of Gaming was leaving to go to the private sector.  Ms. Del Papa said that each week she wondered who would be left after that week’s turnover. 


According to Ms. Del Papa, the request before the committee was consistent with requests that other constitutional officers had made.  Governor Guinn asked for something similar in the 1999 Legislative Session and it had been granted.  Lieutenant Governor Hunt proposed a similar bill to the Committee on Senate Finance and her understanding was that it was well received.  Ms. Del Papa said she had the support of the Budget Office in terms of what the AG’s office was attempting to accomplish.  She said she had had extensive conversations with Perry Comeaux and Don Hataway, who had worked with the AG’s office during the budget crunch that had been experienced in the current biennium.  The Budget Office told her staff that the bill would require no additional General Fund money nor would it present a problem in terms of accounting even in the areas where there was specific source funding.  According to Ms. Del Papa, most of the information presented during the budget hearing, as well as the responses provided to the questions asked during the hearing, evidenced the overwhelming amount of turnover that the office had experienced as well as the need for salary increases.  Although the requests made in A.B. 602 would not alleviate the need for salary increases, she believed that the bill was critical to enhance the AG’s ability to pay employees’ salaries equal to their responsibilities. 


Ms. Del Papa reviewed for the committee what A.B. 602 provided.  The first part of the bill provided the AG’s office with the ability to pay those employees not employed in the classified or unclassified service of the state a salary that was deemed to be appropriate based on a level of responsibility as well as an area of expertise of the employee.  The bill also enabled the Attorney General to transfer up to $25,000 between budget accounts without receiving prior approval of the Interim Finance Committee.  Her understanding was that there were other constitutional officers with that ability although she did not know the full ramifications of what they were doing.  The situation was slightly different in her office according to Ms. Del Papa.  She believed there were other agencies that would appear before the committee asking for the same authority.  The bill also provided the AG with the ability to contract for goods and services up to $10,000 if notice was provided to the Board of Examiners.  Additional contracts for goods and services between $10,000 and $25,000 could be entered into if written approval was first obtained from the Chief of the Budget Division of the Department of Administration.  Ms. Del Papa referred to Exhibit D, a Comparison of Public Attorney Pay Scales, which she said clearly evidenced the disparity in salaries.  She said that she and her staff had reviewed the performance indicators and been in contact with the Clark County District Attorney’s office.  The scale that was set forth in the unclassified pay bill locked in the salaries for certain positions.  That was one of the challenges.  However, with the passage of the proposed bill, the AG’s office, similar to other law firms, would be put in a position to determine appropriate salary adjustments based on those types of expertise that were critical to the state and the bill would provide one additional tool in terms of trying to curtail some of the staff turnover.  Ms. Del Papa pointed out that the AG’s office was the law office for the state and, in fact, was now the largest law office in the state. 


Mr. Kevin Higgins, Chief Deputy Attorney General, said Ms. Del Papa had thoroughly explained A.B. 602 and he would not belabor the point.  It was extremely difficult in the face of the potential of not obtaining the pay raises recommended by the Governor for state employees to hope to retain the qualified people currently in the AG’s office.  One way to do that was within the current payroll category of the budget to pay some employees more money.  If the AG’s office could retain some of its expertise that would be a great step toward operating the office in a more professional and businesslike fashion.  Mr. Higgins said he had updated Exhibit D as he did every couple of years.  He said that comparing salaries between offices was difficult because each office ran things differently.  Most public agencies had employer paid retirement contributions, unlike the system the state used.  The numbers in the chart had been adjusted to account for that.  Mr. Higgins said he had some difficulty calculating the salaries of the University System because they had four different retirement plans depending upon whether or not an employee was a member of the Public Employees Retirement System (PERS) before being hired by the university.  If the employee had not been a PERS employee, he would go into a 403B plan.  Mr. Higgins said that at times it was more than someone who did not have an accounting degree could comprehend.  He thought that generally the information in the chart was accurate and showed very good comparisons between positions by responsibility.  While other state agencies were close to the AG’s office in salary, the AG’s office lagged behind in just about every category as compared to other entities.  Mr. Higgins claimed that the AG’s office lost people every day to the District Attorney’s office in Las Vegas, the North Las Vegas City Attorney’s office, or even the Washoe County District Attorney’s office.  Mr. Higgins said that Senator Raggio had a bill pending on how to retain employees.  One way to retain people, in Mr. Higgins’ opinion, was to compete in the marketplace and A.B. 602 would help do that. 


Ms. Giunchigliani asked if the AG’s office had the ability to transfer some funds between budgets.


Ms. Del Papa said that the ability to transfer money had been very restrictive and there were certain instances where it was very appropriate.  It was her understanding from a discussion with the Budget Office, that there were accounting mechanisms that could be worked out to accommodate the transfers.  She said that the office would have to be very careful to properly account for the various sources of funding the office received.  That would allow the office to use the limited resources in a more cost-effective and efficient manner. 


Ms. Giunchigliani asked about the ombudsman position mentioned in Section 6 of the bill.  She wanted to know whether the position was currently filled and what duties were accomplished by the position. 


Mr. Higgins answered that the position was currently filled.  Ms. Del Papa said that she chaired the state’s Domestic Violence Prevention Council.  The ombudsman was staff to that council and was a ”jack of all trades.”  The employee in the position did “a lot in many areas.”  She interfaced with the advocacy groups, she handled calls that came in to the office and she was on the front lines.  The AG’s office was the agency that received the Violence Against Women money that was, in turn, granted out. 


Mr. Bob Gagnier, Executive Director of the State of Nevada Employees’ Association, opposed A.B. 602.  He said there were a number of bills in the current session that dealt with the same subject and he had testified against all of them that he was aware of.  Most of them were in the Senate, although there was a bill currently in Assembly Government Affairs.  He said that in the 1999 Legislative Session the association had extreme reservations about the proposal to place the employees of the Governor’s Office in non-classified status.  The association relayed that concern to the Committee on Ways and Means on February 11, 1999, in a letter to the Chairman and expressed concern, not so much about what was being proposed by the Governor for his staff, but the “creep” it would create in future years.  He said he expected to see exactly what he was now seeing and that was other proposals to create the non-classifed status.  Most everyone that he had heard speak in favor of the concept did so with the idea that it would lead to more money for the staff.  That was a good thing, but he was concerned about how it would be done.  If there was a budget with a set amount of money and within that budget the agency could pay the employees whatever it determined to be fair, the only way an agency could pay some employees more money was to pay other employees less or to eliminate positions in order to provide others with pay increases.  That was where the association had real concern.  He had seen happen what he predicted would happen, and that was the elimination of lower level positions so that upper level positions could receive increases.  He said what was really needed was a more realistic unclassified pay bill or a more realistic salary for the classified positions. 


As far as the turnover was concerned within the AG’s office, Mr. Gagnier addressed the classified group only.  They did have a relatively high rate of turnover in the AG’s office.  Legal secretaries in the last fiscal year had a turnover of 18.6 percent and the salary survey showed that they were approximately 30 percent behind in salaries.  However, that had been addressed.  The legal secretaries were all due for a two-grade increase effective July 1, 2001, as part of an occupational study.  That would be in addition to whatever pay raises were approved by the legislature.  Mr. Gagnier said the pay grade increases would go a great distance in taking care of the problems related to the legal secretaries’ salaries.  Mr. Gagnier believed that the proposals to expand the non-classified service would only create more problems.  He said the association was concerned about the elimination of classified positions.  His concern was that in the next budget, agencies who had eliminated classified positions would come back and ask for the re-creation of the positions.  Mr. Gagnier said that he believed that could be seen in some budgets this session.  Two years ago when the issue of the Governor’s staff was discussed, it was brought out that governors’ offices were treated differently in the entire country.  Even the federal government treated the governors’ offices differently; they were not subject to the Fair Labor Standards Act.  It was the only elected official in each state that was not subject to the Fair Labor Standards Act so it could be said that governors’ offices should be treated differently in other issues also.  That was one of the cases that had been made in the 1999 session of the legislature.  Mr. Gagnier said the association was very much opposed to the proposal to expand the non-classified status beyond the Governor’s office and he encouraged the committee to defeat A.B. 602


Mr. Higgins addressed the committee to distinguish between what the Governor’s Office had done and what the AG’s office proposed to do.  Mr. Higgins said that perhaps Mr. Gagnier had misunderstood what A.B. 602 would accomplish.  The bill only applied to the people who were currently unclassified in the office.  That would include deputy attorneys general, investigators, and a few other people such as the administrative assistant, and the domestic violence ombudsman.  The bill was not intended to apply to the current classified staff in the office and would not affect the employees that Mr. Gagnier represented. 


Mr. Higgins went on to explain that the legal secretaries in the AG’s office would be getting a raise because the Attorney General and Mr. Higgins had appeared before the Personnel Commission and argued to have the positions reclassified against the advice of the Department of Personnel.  The positions would be increased by two grades.  He hoped that increase would stop the turnover in that area.  Mr. Higgins said that if Mr. Gagnier’s opposition was based solely on the fact that the bill affected the people he represented, that opposition did not exist.  Only unclassified personnel would be affected by the bill.  Mr. Higgins went on to say that he understood that the money would only be available if there were positions that were not filled or people that did not get raises.  However, that was the way it worked in a real law office, some people got raises and some people did not. 


There being no further testimony on A.B. 602, Chairman Arberry closed the hearing on A.B. 602 and opened the hearing on A.B. 549


Assembly Bill 549: Increases amount of general obligation bonds that state   board of finance may issue to provide grants to certain water systems.             (BDR 30-1328)


Mr. Allen Biaggi, Administrator of the Nevada Division of Environmental Protection, introduced himself.  He said A.B. 549 would increase the amount of general obligation bonds that could be used in Nevada’s Drinking Water Program from $50 million to $69 million.  Mr. Biaggi introduced Mr. Leo Drozdoff, Chief of the Bureau of Water Pollution Control of the Division of Environmental Protection. 


Mr. Biaggi stated that A.B. 198 of the Sixty-Sixth Session, which had been spearheaded by Speaker Dini, created a program to assist municipal drinking water systems in Nevada with the high cost of water supply improvement projects and compliance with the Safe Drinking Water Act.  Those programs and projects included systems upgrades such as piping replacement, treatment system capitalization, tank replacement, and other projects that assisted and allowed the system to provide an adequate and safe supply of drinking water to the customers.  The funds could also be used by water purveyors in the future to meet the revised arsenic rule that was currently being reevaluated by the Bush administration.  Since the inception of the program, 29 recipients had obtained grants totaling $27 million.  The majority of the systems utilizing the funds were small, rural systems such as those in Jarbidge, Topaz Lake, Mina, Austin and Kingston.  Currently, $32 million in projects were being requested or being held in a pending status.  Additionally, $10 million had been specifically earmarked for conservation efforts related to water projects through A.B. 237 of the Seventieth Session.  The total need at the current time was $69 million.  Nevada Revised Statutes (NRS) 329.986 provided for the issuance of general obligation bonds of not more than $50 million.  Mr. Biaggi pointed out that the gap in need versus funding in water pollution and drinking water programs was not unique to the state of Nevada.  Nationwide, it was estimated that there existed a $3 billion shortfall between funding and need every year for system upgrades and refurbishment.  Therefore, due to the ongoing as well as anticipated program needs, Mr. Biaggi supported the proposed increase in bonding authority for the program. 


Regarding the arsenic rule currently in effect Mrs. de Braga asked, “Do you have any sense of how many more communities would be affected if the standard is set at ten?”  Mr. Biaggi answered that it was his understanding that there were 126 water systems in the state of Nevada that would be affected by the revised arsenic rule down to ten.  If the Bush administration revised it upward to 15 or 20, that number would be reduced. 


Mrs. de Braga said she did not think many of the rural communities could comply even with the assistance of a low cost loan.  She asked what the interest rate and time period of the loans would be.  Mr. Biaggi said the program being discussed in A.B. 549 was a grant program.  He said that the State Health Division operated another program that was a revolving loan fund that provided low-interest loans that was used often in conjunction with the grants to assist the local water purveyors.  He believed the interest rates on those programs were running between 3 and 4 percent. 


Mrs. de Braga said the estimate to upgrade Fallon’s system was approximately $10 million and that the costs would vary with the size of the community. 


Mr. Dini commented that the program had worked well and when the bonds were spread statewide, they did not amount to very much on the tax roll and had provided assistance to the small water companies.  There were recently three applications before the board in Mr. Dini’s district and he believed the grants had all been granted.  They were Mound House, Yerington, and Lockwood.  The grants had been lifesavers for people in small towns.  If they were not available, small towns could not afford to do the necessary projects.  The program made it economically feasible to do the projects.  Mr. Dini referenced A.B. 237 of the Seventieth Session, which he had sponsored, that promoted water conservation.  He said A.B. 549 provided a good program that should continue.


Mr. Don Hataway, representing the Budget Division, said he was not opposed to the bill as it was a good bill. The expansion of the amount of bonds that could be issued was good from a planning point of view but he pointed out that in addition to the maximum amount of dollars that could be issued it was also limited by the fact that those bonds were retired through the 15 cent tax rate and so the agency would have to work closely with the Budget Division and the Department of Public Works in terms of the total bonds that were being issued.  There was $3 million a year planned in the Capital Improvement Program (CIP) project for the next biennium for the project so the Budget Division would be working with them.  He advised the committee that there was another limiting factor on the issuance of the bonds. 


Ms. Stephanie Licht, representing Elko County, addressed the committee and referenced Exhibit E, a letter to the committee from Cash Minor, Elko County Chief Financial Officer.  Ms. Licht supported A.B. 549 and said that she liked to call Jarbidge the poster child of the program.  There were 27 people in that community for which the county had spent $850,000 in cash or in-kind contributions trying to establish a system and the program had been very helpful.  She said she appreciated the committee’s consideration of the bill. 


There being no further testimony on A.B. 549, Chairman Arberry closed the hearing on A.B. 549 and opened the hearing on A.B. 609


Assembly Bill 609:  Extends authorized period of expenditure of certain money             appropriated to department of motor vehicles and public safety. (BDR S-            1319)


Mr. Dennis Colling, Chief of the Administrative Services Division for the Department of Motor Vehicles and Public Safety (DMV/PS), introduced himself.  He said A.B. 609 would allow the date for expenditure of funds for the purchase of modular furniture for the remodel of the DMV/PS building at 555 Wright Way, Carson City, Nevada, to be changed from June 30, 2001, to December 31, 2001. 


There being no further testimony on A.B. 609, Chairman Arberry closed the hearing on A.B. 609 and opened the hearing on A.B. 616.


Assembly Bill 616:  Revises provisions governing class-size reduction program.             (BDR 34-1321)


Mr. Don Hataway of the Budget Division explained that A.B. 616 was recommended by the Governor and based upon the flexibility that the legislature gave to the Elko County School District in the 1999 session on the basis of the positive feedback that the Governor received from that district concerning their experiment.  He felt that the same type of flexibility should be given to all the other school districts in the state.  Mr. Hataway said there were a couple of caveats that he would add to the language in the bill.  He said there was a specific amendment for one part and a comment on another.  The understanding he had with Ms. Brenda Erdoes, Legislative Counsel, was that because of the crush of work she had to do in order to get bills out on certain deadlines, including the bills to implement the budget, they agreed that the bill could be introduced and then reviewed.  If there were any issues, amendments would be suggested.  The one amendment Mr. Hataway wanted to bring to the attention of the committee, and the Governor definitely wanted to have included, was on Section 4, line 37.  It said “A plan developed pursuant to this subsection must be submitted to the state board.”  The Governor definitely felt that the state board should be part of the mix to approve the plans that the districts came up with.  The wording should be, in the Governor’s opinion, “A plan developed pursuant to this subsection must be submitted to and approved by the state board.”  The other issue that Mr. Hataway discussed was the 22 to 1 pupil-teacher ratio that the legislature had given the Elko County School District flexibility on last session.  Twenty-two to one was not necessarily a magic number.  The Governor had no specific suggested language related to the ratio but was open to suggestion.  In summary, the bill would provide the districts more flexibility and Section 4, line 37, should be amended to include the phrase, “and approved by” the state board. 


Chairman Arberry asked if the money to fund A.B. 616 had been included in The Executive Budget.  Mr. Hataway said that the money was built into The Executive Budget but districts would not get any more dollars under the allocation of class-size reduction but they could use those dollars like Elko County had done to come up with a more flexible alternative if they thought it would be beneficial.  It would not necessarily have to be for the entire district, it could be an experimental plan for certain schools within the district or a block of schools in a large school district. 


Ms. Giunchigliani asked where in the bill she could find the language regarding class-size reduction for kindergarten children.


Mr. Hataway said there was another section of the statute that stated if a district could not meet the standards, it could apply for a variance from the State Board of Education.  The law had always said 15 to 1 in first and second grades and that had never been funded.  It had been at 16 to 1.  Every year, every district, except for some of the smaller ones that had unique situations, had to ask the State Board of Education for a variance from 15 to 1 to 16 to 1.  Funding was provided for 23.5 slots in kindergarten for at-risk children at the present time.


Ms. Giunchigliani stated that the bill did not anticipate any new revenues and technically should not be exempt because there was no money in it. 


Mr. Hataway stated that it implemented the budget in the sense that the dollars that were in the budget now could be used under certain approved conditions for other things besides the 16 to 1 ratios for which they were funded.


Mr. Mark Stevens, Fiscal Analyst, said that was the big question and one of the things that had to be resolved by the committee.  Mr. Stevens said he could only exempt a bill if there was a fiscal impact or an issue that implemented the budget.  Mr. Stevens said he was searching for a way to exempt the bill so that it would not have to be voted upon immediately.  The funding had been built into The Executive Budget and would remain there whether the bill passed or not so there was not a funding issue.  Mr. Stevens felt that the only way that he could exempt it was if it implemented some portion of the budget.  That was something the committee needed to determine so he could determine whether the bill was exempt.  If it was not exempt, it would have to be passed out of the committee by Monday, April 16, 2001. 


Mr. Hataway said the Budget Office would be happy to work with Mr. Stevens in determining whether the bill was exempt.  The Budget Office felt there was approximately $90 million in the budget to implement the bill.  Without those funds, the districts would not have the flexibility to do beyond what the law already stated. 


Mrs. Chowning commented on Mr. Hataway’s testimony regarding the most appropriate student teacher ratio.  She said that in all her years of teaching and all the years of education she had, the optimum in ability to reach students was at 17 to 19 students to 1 teacher.  That was the magic number that had been well researched and well documented.  In grades 1 through 6 it was better to have 22 to 1 than 38 to 40 to 1.  The best results were achieved at 17 to 19 to 1. 


Ms. Leslie said she had received an e-mail opposing the bill from the Washoe County School District saying they could not implement the bill due to a facilities problem since they did not have the classroom space.  She asked if they could get a variance from the State Board of Education if they did not have adequate facilities. 


Mr. Hataway said the alternative available to districts now was the team teaching process.  He could not recall that the board had approved variances beyond the 16 to 1 ratio unless it was an unusual rural situation where it was 18 to 1 no matter how it was split.  He said most districts had gone with 16 to 1 in some combination of single teacher or team teaching situation. 


Ms. Leslie said she thought districts had “reached the end of their rope.”  The Washoe County School District would oppose the bill if it did not get funding for new facilities. 


Mr. Hataway said that would be one thing the district would have to take into consideration if it came up with an alternative plan as to how they would physically serve the plan. 


Ms. Debbie Cahill, representing the Nevada State Education Association (NSEA), provided the committee with Exhibit F, a copy of S.B. 127, which was a bill that dealt with the same subject as A.B. 616 and was passed out of the Senate Human Resources Committee with amendments.  She provided the information to the committee so that it would be aware of the direction that bill was taking.  She believed S.B. 127 was not an exempt bill.  Ms. Cahill stated that the NSEA agreed that some flexibility with class size was appropriate.  She said they first went down that road when they talked about flexibility to use money that would have gone for class-size reduction for remediation programs.  The NSEA did not oppose the Elko demonstration pilot project for class size because they were aware what the project was before permission was given by the legislature for Elko County to proceed.  In the discussion on S.B. 127, the NSEA thought that before the state backed away from its commitment to class-size reduction and provided flexibility to the districts, perhaps the legislature should hear from the districts regarding what their plans were and how they intended to use the money provided.  Ms. Cahill believed there should be prior approval given to a district either by the state board or by someone before a program for flexibility could be approved.  That was the amendment that had been approved on page 2 of S.B. 127.  The concept was that a detailed proposal must be submitted to the State Board of Education and approval would be given by the Board of Examiners and the Interim Finance Committee before a program could go forward.  The NSEA also agreed that 22 students to 1 teacher was not a magic number.  The focus in Elko was to eliminate team teaching and if a district had a goal to eliminate team teaching, the NSEA believed that discussion should take place and permission given ahead of time before that could go forward.  In Elko there were teachers who were taken out of a team situation that they thought was beneficial and they lost a mentor.  Team teaching was not necessarily a “negative, horrible thing that it has been portrayed in the past.”  Districts could use team teaching as an opportunity to provide the support that had been lacking in the past to beginning teachers.  The NSEA was concerned that if the committee believed it should provide more flexibility, there should be some prior approval.  Ms. Cahill had not heard other school districts coming forward requesting flexibility such as Elko had done.  She would like to know what the plan was before any permission was given to deviate from the ratios that the legislature had established when class-size reduction was first put into place.  Nevada was one of the leaders in the country in pursuing reduction of class size and improving ratios and the NSEA had serious reservations about the legislature backing away from those ratios without understanding exactly what the impact would be. 


Mr. Keith Rheault, representing the Department of Education, introduced himself.  He said the department supported the flexibility provided in the bill.  He said there were questions regarding the funding that had arisen in some of the joint subcommittees regarding how this might affect the federal class-size reduction funds.  As the bill was worded, as long as it was a pilot program and the state did not provide any less funding than it did previously for class-size reduction to avoid the supplanting issue, Mr. Rheault thought it would not affect the class-size funds.  Mr. Rheault said he noted that the department had just received President Bush’s budget plans for fiscal year 2003 and federal class-size reduction funds had zero shown.  Mr. Rheault noted that as far as the notification to the board of the plan, regardless of whether grades 1 and 2 were at 16 to 1 and  grade 3 at 19 to 1, or whether a pilot project was done, the district would still have to provide to the state board a signed assurance that the bargaining unit or employees’ associations had signed off on the plans.  Mr. Rheault said the department did get copies of the plans.  He said that Section 4 of the bill referred to the fact that the districts must continue to provide the state board with any plan developed.  Mr. Rheault said he believed the department would continue to have access to the districts and their plans as far as the pilot project was concerned. 


Mr. Rheault said he had a question on whether districts had to go in total 22 to 1 or could they choose a few pilot schools within a district.  He said he had received inquiries on that.  Mr. Rheault said the testimony provided gave him the impression that pilot projects were allowable and he believed a few districts would be interested in that. 


Mrs. Chowning asked Mr. Rheault to repeat his discussion of the federal class-size reduction dollars. 


Mr. Rheault said that in President Bush’s proposed federal FY2002 budget, which was the state’s fiscal year 2003, it showed as zero.  There were no funds budgeted for federal class-size reduction. 


Mrs. Chowning asked Mr. Rheault if he had said that if the program was a pilot program it would not affect the receipt of federal dollars.  But if there were zero dollars projected, she asked what the state would receive. 


Mr. Rheault said the state had federal funds for the current year and there were already funds budgeted for the state’s FY2002 in the amount of approximately $7 million.  The problem was in the second year of the biennium.  It was still very early in the process and the federal budget had just been presented.  He said many of those things were changed at the federal level. 


Mrs. Chowning asked for confirmation that there was $7 million budgeted and then after that it could possibly be zero.  Mr. Rheault confirmed the statement. 


Ms. Martha Tittle, legislative representative for the Clark County School District, introduced herself.  She supported the concept of authorizing school districts to develop alternative plans for the reduction of pupil-teacher ratios in the elementary grades.  A.B. 616 provided an opportunity to depart from the original class size ratios identified in class-size reduction legislation previously discussed.  Ms. Tittle said she appreciated Mr. Hataway’s comments indicating that there would be some flexibility intended in the legislation.  She said the bill indicated that 22 to 1 in grades 1 through 6 was the alternative.  In the Clark County School District, for example, grade 6 was in the middle schools, not the elementary schools.  The Clark County School District would be more interested in limiting the ratio to grades K through 5 rather than 1st through 6th grades.  Ms. Cahill said they would propose a change in language that offered districts the authority to develop class-size plans, not only at the 22 to 1 level for grades K through 6 but also at 22 to 1 at other grades such as K through 5 or other ratios as may be deemed practicable.  Currently the districts developed plans together with the recognized associations representing licensed personnel.  There had to be involvement of teachers in the development of those plans.  The plans were currently submitted to the state board.  Ms. Cahill said the flexibility was needed in the Clark County School District because as the Washoe County School District had also indicated, there would be some facilities issues to work through if they moved to a totally different model for all schools in grades K through 5.  Ms. Tittle said the Clark County School District would appreciate the opportunity to set up some pilot projects for K through 5 at 22 to 1 or perhaps some other ratios between 16 to 1 and 22 to 1 that would be worked out. 


Ms. Giunchigliani asked Ms. Tittle to give examples where the Clark County School District had worked out class-size plans with the teachers. 


Ms. Tittle said that the teachers in the elementary schools took part in the planning for how to use the class-size reduction models; for example, if there was to be team teaching or a pull-out type of program that was an off ratio or single classroom assignments.  Often, it depended upon the facility at the site as to how many single classrooms you could have or how many team teaching

classrooms you had.  Ms. Tittle said that at the district level, after the final plans from each school had been received, there was a meeting held with the teachers’ association representatives and the administrators’ association representatives to talk about the final plan. 


Ms. Giunchigliani asked how the teachers were involved in the plan at the school site. 


Ms. Tittle said that in her case as a principal, she met with all the teachers at those grade levels and they talked about what the various options were.


Ms. Giunchigliani asked if the numbers anticipated staffing or facility needs.  Ms. Tittle said that it was staffing and had nothing to do with the facility needs. 


Ms. Giunchigliani asked if Ms. Tittle was requesting the ability to be flexible on some campuses and did she think that flexibility did not presently exist based on what she had said about how principals may do it on their individual campuses. 


Ms. Tittle said that she believed that currently in the statute the districts would be limited to 16 to 1 in 1st and 2nd grades and 19 to 1 in 3rd grade.  Districts had to submit the waiver to move outside the ratio specified in the law for K through 2. 


Ms. Giunchigliani said that she was trying to understand what would be different from what the district was doing now.  She said she did not think the district would be precluded from including kindergarten on a site if it wanted to but it would not receive additional funding to do it. 


Ms. Tittle said that A.B. 616 stated that districts would continue to do what they were doing in K, 1, 2 and 3 or they could go to a plan for grades 1 through 6 at 22 to 1.  The Clark County School District would want some language added to the bill that would allow K through 5 to be done rather than 1 through 6 at 22 to 1, or some of the language inserted into A.B. 616 from S.B. 127 as had been suggested by Ms. Cahill. 


Ms. Giunchigliani said that she wanted to make sure that whatever plan was followed would start in kindergarten.  It was a shame to have 36 to 38 students in the classroom and class-size reduction should be part of the legislature’s focus. 


Mrs. de Braga commented that Ms. Tittle had stated that 6th grade was housed in the middle schools but that was not the case in all counties so it would not apply statewide.


Ms. Tittle agreed with Mrs. de Braga.  She said that grades 1 through 6 would be fine to be in the bill but the language should be expanded so that it was not limited to grades 1 through 6. 


There being no further testimony on A.B. 616, Chairman Arberry closed the hearing on A.B. 616






Mr. Mark Stevens, Fiscal Analyst, Legislative Counsel Bureau (LCB), said there were a number of issues in the account including a question on replacement computer equipment that required direction from the committee. 


Mr. Jim Rodriguez, Program Analyst, Legislative Counsel Bureau (LCB), said he had made technical adjustments to the budget account.  The first was an adjustment to align the revenues with the expenditures.  During the process of building the budget there was a misalignment of revenues so $14,496 was moved from the General Appropriations line item into the Transfer from the Department of Transportation. 


The second adjustment made was to realign the revenue authority with what the Department of Transportation had in its budget transferring over to the Nuclear Waste office.  The adjustment added $24,017 to make that an even $400,000 to match what was supplied to the Nuclear Waste Office in the last biennium. 


Decision unit E-710 made an adjustment for revised computer prices.  There had been some confusion in what the agency was requesting in the budget.  Mr. Rodriguez referred to Exhibit G that was information on the computer equipment requested by the office.  He said that in the 1999 biennium the Nuclear Waste Project Office had requested computer equipment that was very similar to what had been requested in The Executive Budget.  In 1999, the office was provided $46,549 to buy computer equipment comprised of eight PC’s, a laptop, a file server, two printers, and some other corresponding software and equipment.  In the current budget the office was requesting very similar counts of equipment.  A file server, eight PC’s, two laptops, some work station installation costs, and some printers were being requested.  Mr. Rodriguez pointed out that some of the equipment may not warrant replacement at this time. 


Chairman Arberry asked if the agency really needed the equipment.  Mr. Rodriguez said that based on the information he had received it appeared that a majority of the equipment requested could not be justified.  He said that the software request seemed reasonable based on the services the office planned to perform but their hardware appeared to be sufficient to meet their needs through the next biennium. 


Mrs. Chowning said that she understood that in many instances staff had asked for information and justification for equipment and it was not provided.  She suggested that since the computers were only one and one-half years old, replacement was not required. 


Mr. Rodriguez said he was not recommending denial of all the equipment.  He meant only the equipment the office had purchased in the last biennium.  He did not believe there was a generation gap between software and capability between the equipment.  They would still maintain in the account a netware licensing fee that had to be paid along with the software costs. 


Mr. Stevens said that if the committee wanted staff to closely examine the office’s request, they could bring back a figure to the committee as to what they would recommend.  There were a couple of gaps in the information but there were some amounts that needed to go forward.  For example, the $3,200 for the netware license would have to be paid one way or the other and should probably be included.  That should not be taken away because that would be a cost but staff could come back with a revised recommendation on the equipment side if the committee gave staff the authority to do so.


Mr. Hettrick wondered if the committee could close the budget with staff recommendations with the understanding that the staff would take care of the computer issue.  Mr. Stevens said that the staff would do whatever the committee authorized. 






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins, Mr. Goldwater and Ms. Leslie were not present for the vote.) 








Mr. Rodriguez said the Research and Analysis Bureau was responsible for providing the Department of Employment, Training and Rehabilitation with its source of labor market and economic information.  There were no major programs or expansions recommended for the budget but there were two initiatives that were carry-on efforts for the bureau. 


Decision unit E-350 was the Nevada Career Information System.  The Executive Budget recommended $10,000 in FY2002 and $8,000 in FY2003 that would be used to supply some operational supplies such as paper and general office supplies. 


Decision unit E-710 requested $47,138 in FY2002 and $52,414 in FY2003 to fund the bureau’s normally scheduled equipment replacement needs. 


Decision unit E-720 recommended $4,800 in FY2002 and $4,500 in FY2003 to fund necessary software and equipment to enhance Internet and publication services. 


Mr. Rodriguez said there was a technical adjustment to the budget account that adjusted for the revised PC costs as supplied by the Purchasing Division. 


Mr. Rodriguez said there was a new position included in the budget.  It was an Economist II position and had been funded in DETR’s Employment Security Division (ESD) account.  The position would work with the local boards to meet information requirements and research analysis for the local workforce investment boards.  The Executive Budget included $50,465 in FY2002 and $61,271 in FY2003. 






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Ms. Leslie were not present for the vote.) 








Mr. Rodriguez said the One-Stop system was created when the Workforce Investment Act was approved.  The budget account was established for a three-year period that would end June 30, 2001, when the U.S. Department of Labor One-Stop implementation grant expired.  There was one position in the account and when the budget expired the position would be transferred into DETR’s Information Development and Processing budget account.  The position would continue to support the One-Stop Career Centers. 






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Ms. Leslie were not present for the vote.) 








Mr. Rodriguez said the program was totally self-sustaining and supported by revenues generated from the blind vendors’ operations that were approved on federal and state properties.  There was a minor technical adjustment for revised computer prices from the Purchasing Division. 






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Ms. Leslie were not present for the vote.) 







Mr. Stevens said there were a few issues in the budget that needed to be brought to the attention of the committee.  Mr. Stevens pointed out that there were seven positions in the Lieutenant Governor’s office and no new positions were recommended.  M-200 was the decision unit that provided $8,865 in each year of the biennium to provide for printing and postage expenses related to the newsletter being produced by the Lieutenant Governor’s office.  Mr. Stevens said he had provided the committee with a copy of the Lieutenant Governor’s response to committee questions plus a copy of the newsletter.  Decision unit E-275 was a recommendation from the Governor to change the status of the existing staff in the Lt. Governor’s office from unclassified to non-classified status.  The request was similar to the request that the Attorney General had made in A.B. 602.  It had been included in S.B. 146 that was currently in the Senate Finance Committee.  That item was not a financial issue and would not impact the 2001-03 budget.  It was a policy issue that needed to be made by the committee.  Mr. Stevens said the committee would not have to make the decision at that hearing because it would not impact the budget but it would have to be addressed at some point in time.  It was noted that requests for non‑classified status had also been received from the State Treasurer and Attorney General.  Mr. Stevens went on to say that the accounting services for the Lieutenant Governor’s office would no longer be provided by the Administrative Services Division of the Department of Administration.  The Commission on Tourism business office was currently providing those services. 


Ms. Giunchigliani commented that there had not been a justification made to change the positions to non-classified status and that issue was being dealt with in legislation.






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Ms. Leslie were not present for the vote.) 






Mr. Rick Combs recommended closing the budget as recommended by the Governor. 






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Ms. Leslie were not present for the vote.) 




Mr. Combs stated that the Office of Consumer Protection was created by the 1997 legislature and it combined the Utility Consumer Advocate’s Office with the Telemarketing and Consumer Fraud Unit and the Criminal Securities Unit.  At a meeting conducted on February 8, 2001, the Interim Finance Committee approved an upgrade of a Deputy Attorney General to a Senior Deputy Attorney General.  Because that upgrade occurred after The Executive Budget was submitted, Mr. Combs added the increased salary and fringe benefit costs for that increase in the position. 


Decision unit E-350 recommended $25,000 in each year of the biennium for the cost of conducting some consumer education activities related to the deregulation of Nevada’s electricity industry.  The 1999 legislature had approved identical amounts in each year of the 1999-01 biennium and none of the funds were expended.  Based on the uncertainty with respect to deregulation at the current time and the likelihood that deregulation for residential customers, at least, would not occur during this biennium, staff recommended transferring the funds from that decision unit back into the reserve.  If the Attorney General developed a plan for how to spend the funds on other items related to deregulation, the money could be moved by the Interim Finance Committee out of reserve once the plan was identified. 


Decision unit E-710 was funding for 3 computer workstations, 2 laptop computers, 12 personal computers, and the standard adjustments had been made to the prices of that equipment. 


Decision unit E-720 was $1,038 for the purchase of a small conference table and four chairs. 


Mr. Combs updated the committee on two additional issues.  A 0.75 mill assessment rate was assessed at the current time and that resulted in a reserve of a little over $500,000 in the first year, increasing to almost $800,000 in the second year.  He had asked questions of the agency regarding whether or not there was some possibility of reducing the mill assessment.  The agency indicated to Mr. Combs that they did not want the mill assessment reduced at the current time based on the instability of the deregulation issues.  The reserve in the first year did not appear excessive but if the growth continued at the same rate the legislature would expect the agency to reduce the mill assessment at some point.  Mr. Combs said he had gotten a commitment from that agency that if the reserve continued to increase, the agency would be brought into the Interim Finance Committee to explain why the mill assessment was not reduced. 


The other issue discussed by Mr. Combs was non-state-owned building rent.  There was a proposal in the Capital Improvement Program (CIP) to finish the old Carson City Courthouse remodel.  If that remodel was to be approved, approximately 17 positions would be transferred from non-state-owned building rent to state-owned building rent.  Mr. Combs recommended making no adjustments now as there was sufficient authority in the budget to handle the change if it occurred and it would be a reduction. 


Mr. Goldwater said that he had a bill relating to the mill assessment and he had learned something.  He asked if the mill assessment collected in the budget account was based on the end retail users or was it based on the total generation.  Mr. Goldwater said that if it was based on the end retail user it was a very small amount and if it was based on generation, even the power that was exported, then it was a much larger amount and the rate could probably be reduced.  Mr. Combs said he was unaware of what the assessment was based on.  His understanding was that it was based on the general revenue to the utilities rather than based on the residential customer. 


Mr. Hataway from the Budget Division said the mill assessments were always a year behind and based upon audited records of the companies. 






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Ms. Leslie were not present for the vote.)








The Crime Prevention account included funding for the Missing Children’s Clearinghouse and the Crime Prevention Unit.  Decision unit E-475 recommended $2,000 for the production of a newsletter regarding the activities of the Missing Children’s Clearinghouse and issues facing children.  The Governor’s recommendation was to fund that with license plate revenue.  There was a special license plate sold by the Department of Motor Vehicles for the support of missing or exploited children.  The Office of the Attorney General began receiving revenue for that license plate in FY2001 and as of March 30, 2001, they had received approximately $7,700 from the issuance of the plates.  Since only $2,000 of that revenue was being included in The Executive Budget, Mr. Combs had asked the Office of the Attorney General to respond to how the remainder of the revenue was going to be utilized.  The AG’s office indicated the funds would be used for the newsletter, pamphlets, training, travel, and the normal operation of the division.  Based on the lack of specificity, Mr. Combs recommended that the committee take the year-to-date FY2000 number of $7,725 and reduce that by one-third and include that amount as revenue and a credit to reserve in each year.  The fee for the issuance of the original license plate was $15 and the renewal fee was $10.  Mr. Combs also recommended a Letter of Intent directing the Office of the Attorney General to go to the Interim Finance Committee with a plan when it was ready to determine how it would use the revenues. 






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Ms. Leslie were not present for the vote.) 








Mr. Combs reminded the committee that performance indicator number 10 in The Executive Budget indicated the agency believed its recovery of costs for returning fugitives to the state would increase to $100,823 in FY2002 and $110,906 in FY2003.  Based on the information in the performance indicator, staff asked the agency to verify those numbers because a lesser amount was included in The Executive Budget for collection of recovery revenue.  The revised performance indicators had been provided to the committee.  The office had reduced the revenue projection down to $97,891 in FY2002 and $102,785 in FY2003.  Based on the fact that The Executive Budget recommended authorizing the use of the General Fund in both years of the biennium, they could transfer forward to the first year if needed.  Mr. Combs recommended increasing the recovery revenues to the amounts projected in the revised performance indicator. 


Decision unit E-710 recommended replacement of one personal computer and decision unit E-720 recommended $500 for a new scanner.  The appropriate reductions to the prices had been made on the equipment. 






THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Ms. Leslie were not present for the vote.) 








Mr. Combs said that the Advisory Council for Prosecuting Attorneys was created by the 1997 legislature.  The Executive Budget recommended eliminating the General Fund revenue for the account and replacing that with justice court assessment revenue.  Pursuant to Nevada Revised Statutes (NRS) 176.059, not more than 49 percent of those assessments could go to support executive branch agencies.  The Department of Administration had requested a Bill Draft (A.B. 548) to amend the provisions of that statute to include the AG Council for Prosecuting Attorneys in that section as one of the agencies that could receive the executive branch portion of the money.  During testimony on the bill, Mr. Hataway indicated that it was the intent of the Governor to replace all of the General Fund revenue in that account with those justice court assessments.  Mr. Combs said he had removed $1,765 in FY2003 and $1,880 in FY2003.


Mr. Combs went on to say that decision unit E-275 also recommended additional registration fee revenue totaling $10,229 in FY2002 and $10,239 in FY2003 for conducting additional training courses.  Those training courses would be funded by registration fees of the attendees.  There might be one concern in the second year and that was that there was no balance forward shown in the second year.  Due to the manner in which the agency was created, they were one of the few, and maybe the only agency that was allowed to balance forward General Fund revenues from one fiscal year to another.  The one attorney position in the office in the account had been vacant for a large portion of the year so it appeared the agency would have a significant balance forward to carry forward into the biennium.  Mr. Combs did not believe that cash flow would be a problem. 


Mrs. Chowning asked if the committee could feel confident that the court assessment revenue was “more on track” as there had been significant problems in the past.


Mr. Combs said the assessments were justice court assessments for misdemeanors, had been very stable, and had increased greatly over the last few fiscal years.  The Executive Budget had projected a 7 percent increase in the assessments in each year of the biennium and that was actually less than had happened in the last two fiscal years.  The district court assessment revenue went into a different Attorney General account and probably was the one Mrs. Chowning had recalled as it had been very unstable. 


Chairman Arberry announced the committee would hold Budget Account 1041, AG Council for Prosecuting Attorneys, for further review. 






Mr. Stevens began his presentation by discussing the issues on positions.  Decision unit M-201 recommended five positions that were currently funded through one-shot appropriations approved for rollout and implementation of the Integrated Financial System (IFS).  A total of $341,331 in the first year and $363,488 in the second year was requested to finance the decision unit.  At the end of the IFS project, which was scheduled to be completed in 2003, any of the positions recommended to be retained would need to be separately justified to the 2003 legislature.  Mr. Stevens said that the Controller’s office felt that it might need to retain two of the five positions in the next biennium. 


Mr. Stevens said there was a new position not recommended in the original Executive Budget for which the Budget Division had supplied a revision.  The Governor was now recommending that an additional management assistant position for the Controller’s office be provided for additional clerical support.  The hire date was recommended to be October 1, 2001, at an additional cost of $22,813 in the first year and $31,169 in the second year.  That was a revised Governor’s recommendation. 


Decision unit E-806 recommended that six positions be transferred from classified status to the unclassified status.  That was dealt with in S.B. 228 that had been amended in the Senate.  That bill currently provided for an additional three positions to be statutorily included in the unclassified service.  That would include the Assistant Controller, a manager for operations in southern Nevada and an executive assistant.  In addition, the Chief Deputy was currently statutorily in the unclassified service.  Mr. Stevens noted that in some cases that decision unit included salary increases that were over and above the 9 and 4 percent increases recommended by the Governor generally for state employees.  Adjustments to the decision unit would need to be made based on how S.B. 228 was passed or the decisions that were made later on unclassified salaries.


Mr. Stevens said that he had provided the committee with a letter submitted from the State Controller that indicated some additional operating funds were needed.  The letter requested $5,000 in FY2002, including $4,000 for increased check stock.  The Controller had indicated that as a result of refund checks for cancelled vehicle registrations that began on January 1, 2001, additional checks were being issued and it required an additional order of checks in the first year of the biennium.  An additional $1,000 was requested in each year of the biennium for an increase in dues to the National Association of State Auditors, Comptrollers and Treasurers. 


Decision unit E-710 recommended replacement data processing equipment that could be reduced based on revised prices received from State Purchasing.  The Controller’s office submitted new specifications that they would like to utilize for their replacement PCs and file servers.  Mr. Stevens said he had provided copies of the specifications to the committee and had tried to outline the primary differences between what was the State Purchasing standard and what was requested by the Controller’s office.  For example, the State Purchasing standard was a Pentium III, 933 MHz machine.  The Controller’s office requested a Pentium 4, 1,300 MHz machine.  They wanted to upgrade the memory from 128 MB to 256 MB and purchase an uninterrupted power source for each of the PCs and an internal zip drive.  If the specifications requested by the Controller’s office were used, the equipment cost could be reduced by $8,478 in the first year and $8,926 in the second year; that savings could be increased if some of the specifications that were requested by the Purchasing Division were not utilized. 


Mr. Stevens reported that the State Controller had testified at an earlier hearing that the Controller’s office might move into the Employer’s Insurance Company of Nevada (EICON) building in Carson City if the recommendation of the Governor to purchase the building was approved by the legislature.  There was some concern expressed by the Controller that the state’s fiber optic cable would not reach to the EICON building and they would need to have the fiber optic cable in order to utilize the Integrated Financial System.  In a subsequent Capital Improvement Program (CIP) subcommittee meeting the Public Works Board indicated that if the EICON building was purchased, the fiber optic cable could be extended through a 1999 CIP project that was previously approved by the legislature. 


Ms. Giunchigliani asked if three of the five positions requested would “go away” for the next biennium and two would still be needed to continue the work. 


Mr. Stevens said that was what had been indicated preliminarily.  He thought that The Executive Budget and the closing document listed that all the positions would need to be justified to the next session of the legislature regardless of the number of positions requested to continue.  The Controller had indicated that she believed they would need two of the positions to be ongoing. 


Ms. Giunchigliani suggested that regarding S.B. 228, if the committee took any action on the budget it should take no action on making the positions unclassified. 


Mr. Stevens said that this issue was a little different than the issue that was in the Lieutenant Governor’s budget.  In that budget, the issue was the transfer from unclassified status to non-classified status.  The Controller was requesting that certain positions in the classified service be unclassified.  Adjustments would need to be made based upon what the ultimate decisions were because there was $19,464 for the first year and $15,612 for the second year requested for salary increases that were over and above the amounts recommended by the Governor for state employees. 


Ms. Giunchigliani indicated she had questions on the amount budgeted for travel.  She asked if the Governor was recommending the $4,000 increase for the unplanned check stock order and $1,000 for dues. 


Mr. Hataway, of the Budget Division, said the Controller had received a communication from the national association as to what the dues would be so the Budget Division had no problem with that amount.  The $4,000 was related to the fact that the office was issuing more checks primarily related to DMV refunds.  The Governor had not taken a position on that but it was a logical change that probably should be made. 


Ms. Giunchigliani asked for more information on the new position that had been requested. 


Mr. Stevens said he had received a revised recommendation from the Governor on the position that indicated he was recommending a new position for the Controller’s office and the Treasurer’s office. 


Ms. Giunchigliani said she did not remember any justification during the testimony for a new position. 


Mr. Beers commented that the machines requested by the Controller’s office would certainly be top of the line machines.  He said he was having a hard time determining the need for zip drives since the machines would be on the network and they could be backed up over the network.  The upgrade to 256 MB of RAM was something that would be a good thing to do regardless of whether the Pentium III or the Pentium 4 CPUs were selected.  Mr. Beers said that in general he counseled his business clients not to buy the very latest, greatest version of the hardware on the grounds that the price would go down very rapidly over the next six to eight months just as Pentium IIIs had gone rapidly down in price from the prices of a year ago.  Mr. Beers said the machines the Controller’s office wanted would certainly be “a deluxe version” and in a tight budget environment, the committee might want to rethink it.


Chairman Arberry asked Mr. Beers to explain the difference between a Pentium III and a Pentium 4 machine.  Mr. Beers answered, “Speed.” 


Ms. Giunchigliani said that she would like to discuss the travel requested.  She said she referred back to the audit and was concerned about the justification for travel to such places as the United Blood Services, the Cambridge Community Outreach Center, the Board of Directors for the Nevada Ballet Theater, Clark County Republican party, and the Women’s History Project.  All of the travel seemed to be tied to an invitation and, therefore, tied to a request for the Controller to be present.  Ms. Giunchigliani said all public officials were inundated with invitations and she did not have a comfort level that that was a justification for the Controller to be traveling.  She said she was unsure whether the budget was adequate or should be reduced but she definitely believed a Letter of Intent was appropriate stating that the travel would have to be directly tied to the position of state Controller.


Mrs. Chowning said that she agreed with Ms. Giunchigliani and it backed up the conversations the committee had had regarding other budgets as well.  The committee had asked for justification as to the benefits to the department and overall benefits to the taxpayers of Nevada.  Too many times the committee was seeing that conferences were being attended just because there had been an invitation.  Mrs. Chowning said there needed to be more efficient expenditure of the taxpayers’ dollars.  She said the committee had asked other agencies to list the benefits to Nevadans and to the people who directly served under the agency director.  Maybe it would benefit the director individually but would it benefit their staff.  If not, the expense would not be justified. 


Chairman Arberry reported that there was inadequate justification for the new position that had been requested.  He recommended removing the position from the budget. 




Mr. Beers said the specifics on the technical amendment would be to keep the machines at the State Purchasing standard but to upgrade the RAM from 128 MB to 256 MB. 


Mr. Stevens asked for clarification.  He said his understanding was that the machines would be Pentium III 933 MHz machines, the MS Office Professional Suite and the memory would be upgraded to 256 MB.  Mr. Stevens asked about the uninterrupted power supply, the data fax modem, the McAfee Virus Scan and the zip drives. 


Mr. Beers clarified that the virus scan and fax modem card were included in the State Purchasing specifications.  The uninterrupted power supply was not necessary and the zip drives were not necessary.  He said he was assuming the machines would be on the network and they would have a network backup in place. 


Mr. Hataway added that the Controller’s office maintained on the network the current fiscal year and the most recent fiscal year.  They downloaded past fiscal years to be used as a resource.  Mr. Hataway said the office had large files that they had to maintain off-line for research.


Mr. Beers said there were two concepts available.  There was a software zip process that was a file compression technique resulting in a smaller file for storage that could then be unzipped and expanded to be used as it was originally.  The second concept was a zip drive, which was a 100 MB, thick, 3.5 inch floppy disk that would hold 100 MB.  That was equivalent to approximately 66 floppy disks but was a tiny fraction of any kind of hard disk storage that the network would have. 


Mr. Hataway said that the way Mr. Beers described the two concepts led him to believe that the Controller’s office wanted the first concept Mr. Beers had described.  Mr. Beers said that would require a $39 piece of shareware called “PK Zip.” 


Mr. Beers suggested that clarification was needed from the Controller’s office as to what was needed.  If it was a compression technique, they probably needed a site license for the necessary software.  That would be far less expensive than purchasing zip drives. 


Mr. Hettrick suggested approving the budget but leaving it to the staff to confer with the Controller’s office and decide on what software was needed. 


Mr. Beers said if the Controller’s office did need the zip software, they would probably need it on more than just their new machines.  They probably would need it on every machine in the office.  They could purchase a site license that would drop the $39 per unit cost down to $25 or $30. 




Mr. Stevens said he wanted to be certain he understood the motion.  The new position would be excluded, the $1,000 for additional dues would be approved, the $4,000 in the first year of the biennium for additional check stock would be approved, there would be a Letter of Intent on travel and the replacement list on PCs that had been discussed would be approved. 


Chairman Arberry added that staff would follow up with Mr. Hataway and the Controller’s office on the required software depending upon their needs. 


THE MOTION CARRIED UNANIMOUSLY.  (Ms. Leslie and Mr. Goldwater were not present for the vote.) 







Assembly Bill 69:  Imposes surcharge on payment of child support collected by             district attorney to be used for programs for mentoring of children.             (BDR 11-110)


Mr. Stevens said that the committee should consider eliminating A.B. 69.  It was a bill that could be used for the fee that was recommended in The Executive Budget to support the Child Support Enforcement Program.  Mr. Stevens said that he could not exempt the bill at that time but if the bill was amended to include the fee that was recommended to be implemented in The Executive Budget for the Child Support Enforcement Program and re-referred back to the Committee on Ways and Means, it could be exempted and a hearing could be held on the new revised bill, which was necessary in order to finance the Child Support Enforcement Program.  If that fee was not adopted, the committee would have to make dramatic cuts on the expenditure side.  Mr. Stevens asked the committee to consider amending the bill by eliminating the current bill and including language that would implement the child support fee recommended in The Executive Budget.  He recommended that if the committee approved that, the bill should be brought back to the Committee on Ways and Means for a hearing. 









Assembly Bill 197:  Requires disclosure to customers of certain information             concerning electric services by electric utilities and alternative sellers.             (BDR 58-910)


Mr. Stevens stated that the bill had been heard a few days earlier involving the Public Service Commission and information that would be provided concerning electrical services by utilities.  He said there was a fiscal impact on the bill but the Chairman of the Public Utilities Commission indicated that the commission would absorb that within their budget. 








Assembly Bill 236:  Makes appropriation to Department of Motor Vehicles and     Public Safety for funding of shortfalls resulting from 1998 reclassification       of personnel. (BDR S-1306)


Mr. Stevens said A.B. 236 was a supplemental appropriation to the Department of Motor Vehicles and Public Safety due to funding shortfalls resulting from reclassification of personnel. 


Mr. Dini commented that his notes showed that the bill needed an amendment.  Mr. Stevens said his notes indicated that as well, however, the staff had worked with the DMV and they had indicated that the amount was appropriate. 








Assembly Bill 604:  Makes various changes relating to awards for state             employees. (BDR 23-1307)


Mr. Stevens said the bill had recently been heard and might need to be held until a later meeting.  Mr. Stevens stated that he had a note that the bill needed to be amended and he had not gotten the amendment. 


Chairman Arberry stated that A.B. 604 would be held. 


Assembly Bill 607:  Makes various changes relating to unemployment             compensation affecting Indian tribes to comply with federal law.             (BDR 53-1313)


Mr. Stevens said that A.B. 607 was heard a few days ago.  It was an administration bill that increased the daily compensation for members of the Nevada Employment Security Council and complied with federal law relating to Indian tribes in the unemployment compensation program.








Assembly Bill 359:  Makes appropriation to Interim Finance Committee for             expenses relating to investigation of leukemia cluster in Fallon. (BDR S-            1465)


Chairman Arberry said there had been some discussion of reducing the amount appropriated by the bill to $500,000 and wondered if there were any federal dollars that would be allocated.


Mrs. de Braga said she did not know about federal dollars yet.  She said there would be a subcommittee meeting held in Fallon on April 12, 2001, by the Environmental Committee and Senator Reid proposed a nationwide task force so that every time a leukemia cluster or some other type of cancer cluster appeared, the task force would be in place.  The money that was included in the bill would be held in reserve and the Health Division would have to go to the Interim Finance Committee to request money to fund each of the projects proposed.  That way, the legislature would have oversight as to how the money was spent.  The money would come from tourism dollars.


Chairman Arberry asked if using tourism dollars would establish a precedent.  Mrs. de Braga said she was unsure and that using tourism dollars might be “a bit of a stretch.”  The people in Fallon did not believe it was a stretch.


Mr. Dini said it was imperative for the legislature to create an image that Fallon was not just a town full of leukemia patients and the proposed dissemination of factual information and health advice was enough justification.  He pointed out that the leukemia problem would affect tourism in Fallon and the rural area surrounding Fallon.  Mr. Dini said that Fallon was the hub of central Nevada.  He believed it would be money well spent to spread the word that it was a safe area and it would help to promote tourism in the area.  It would help to avoid a decline in tourism. 


Chairman Arberry asked Mr. Stevens to discuss the bill’s costs.  Mr. Stevens said that he had reviewed the current projection for room tax that funded the Commission on Tourism budget.  For the first eight months of the fiscal year, the room tax was up 12.5 percent and the projection in The Executive Budget was 4.5 percent for the current fiscal year and each year of the biennium.  Assuming a 5 percent increase for the final four months of the fiscal year, there would be approximately $500,000 available in room tax dollars that could be used for some purpose. 


Ms. Giunchigliani said that she had a concern that the money should be going to the testing of victims, the environment, and the research rather than for tourism.  She said she believed the city of Fallon had already hired its own advertising firm.  She asked if Section 2 (d) of the bill was for the department to disseminate the information.


Mrs. de Braga said the intent was for the Health Division to provide information.  It was not specifically to pump up the image of Fallon but only so that the residents and others seeking to move or travel there would be aware of the facts. 


Ms. Giunchigliani asked if $500,000 was adequate.  Chairman Arberry commented that it was up to the committee. 






Mr. Hettrick said he had no problem attempting to do something for the image of Fallon and he appreciated Mr. Dini’s pointing out Section 2 (d) of the bill.  However, Section 2 (d) referred to the dissemination of factual information and health advice to the residents of Fallon.  He said the bill could be amended to include tourism or people moving to Fallon but he did not think that was what the committee was accomplishing.  Mr. Hettrick said he did not know that information needed to be disseminated to the residents; he believed they probably would seek out the information to be certain they were protecting their families.  Mr. Hettrick said that he did not want to deny Fallon help if it was needed but he felt the bill was a “stretch.” 


Mr. Perkins said that the committee could look at Section 2 (d) and amend it to read, “dissemination of factual information and health advice to the residents and visitors in and around Fallon.”  That way, the information would be provided to folks that would be potential tourists.  Mr. Perkins felt that it would “spook a lot of people off” if the legislature did not show a strong effort to provide support for the residents and the tourism industry in the area.




Mrs. Chowning asked if the motion included adding the language that Mr. Perkins had recommended.  Chairman Arberry confirmed that the motion included Mr. Perkins’ proposed language change. 


Ms. Tiffany asked if the $500,000 to fund the bill would come out of the Tourism budget and Chairman Arberry confirmed that it would.  Ms. Tiffany said that when the committee closed the Tourism budget it would need to close it with a Letter of Intent that $500,000 should be used for that purpose.


There being no further business, Chairman Arberry adjourned the hearing at 10:41 a.m. 






Lila Clark

Committee Secretary








Assemblyman Morse Arberry Jr., Chairman