MINUTES of the AUGUST 23, 2016 MEETING of the INTERIM FINANCE COMMITTEE Carson City, Nevada

MINUTES OF THE AUGUST 23, 2016 MEETING OF THE INTERIM FINANCE COMMITTEE Carson City, Nevada

Vice Chair Ben Kieckhefer served as Chair in the absence of Assemblyman Paul Anderson. He called a regular meeting of the Interim Finance Committee (IFC) to order at 9:14 a.m. on August 23, 2016, in Room 4100 of the Nevada Legislative Building, 401 South Carson Street, Carson City, Nevada. The meeting was videoconferenced to Room 4401 of the Grant Sawyer Office Building, 555 East Washington Avenue, Las Vegas, Nevada.

COMMITTEE MEMBERS PRESENT: Senator Ben Kieckhefer, Vice Chair Senator Kelvin Atkinson for Senator Woodhouse Senator Pete Goicoechea Senator Michael Roberson Senator James Settelmeyer for Senator Lipparelli Senator Pat Spearman Assemblyman Derek Armstrong Assemblywoman Teresa Benitez-Thompson Assemblywoman Irene Bustamante Adams Assemblywoman Maggie Carlton Assemblywoman Jill Dickman Assemblyman Chris Edwards Assemblyman Randy Kirner Assemblyman James Ohrenschall for Assemblywoman Swank Assemblyman P.K. O’Neill for Assemblyman Hambrick Assemblyman James Oscarson Assemblyman Stephen Silberkraus Assemblyman Michael Sprinkle Assemblyman Tyrone Thompson Assemblywoman Robin Titus Assemblyman Jim Wheeler for Assemblyman Paul Anderson

COMMITTEE MEMBERS EXCUSED: Senator Mark Lipparelli Senator David Parks Senator Joyce Woodhouse Assemblyman Paul Anderson, Chair Assemblyman John Hambrick Assemblywoman Heidi Swank

LEGISLATIVE COUNSEL BUREAU STAFF PRESENT: Rick Combs, Director, Legislative Counsel Bureau Mark Krmpotic, Fiscal Analyst, Senate Cindy Jones, Fiscal Analyst, Assembly Alex Haartz, Deputy Fiscal Analyst Sarah Coffman, Deputy Fiscal Analyst Brenda Erdoes, Legislative Counsel Eileen O’Grady, Chief Deputy Legislative Counsel Cheryl Harvey, Fiscal Analysis Division Secretary Carla Ulrych, Fiscal Analysis Division Secretary

EXHIBITS: (Exhibit A): Agenda (Exhibit B): Meeting Packet – Volume I (Exhibit C): Meeting Packet – Volume II (Exhibit D): Handout - Nevada Arts Council (Exhibit E): Stewart Indian School Scope Site Plan – Nevada Indian Commission

A. ROLL CALL.

Rick Combs, Director, Legislative Counsel Bureau and Secretary, Interim Finance Committee, called the roll; all members were present, except Senator Lipparelli, Senator Parks, Senator Woodhouse, Assemblyman Paul Anderson, Assemblyman Hambrick and Assemblywoman Swank, who were excused. Assemblywoman Benitez-Thompson and Assemblyman Sprinkle joined the meeting in progress.

B. PUBLIC COMMENT.

John Wagnon, Commissioner, Nevada Commission on Tourism (NCOT), spoke about Agenda Item C-68, Department of Tourism and Cultural Affairs (DTCA), Tourism Development Fund. He said tourism was the leading economic driver for the State of Nevada. He said 30 percent of Nevada’s workforce was employed by the tourism industry, and 13 percent of Nevada’s gross national product was driven by the travel industry. Mr. Wagnon said, in 2015 Nevada tourism increased 3 percent year-over-year, which was a remarkable number. He said 55 million travelers spent over $62 billion in the State of Nevada, which was an increase of $3 billion year-over-year. He said state tourism marketing played a key role in driving those year-over-year increases. Mr. Wagnon said that before he was a commissioner with NCOT, he was a commissioner with the California Travel and Tourism Commission (CTTC) for eight years. When he first began as a CTTC Commissioner, the tourism marketing budget for the State of California was $7 million, which was among the lowest in the nation. Mr. Wagnon said tourism in the State of California was on the decline at the time, which was extraordinary. He said California’s tourism marketing budget at the end of his commission term was $50 million, and there had been a dramatic rebound in the tourism economy and growth of tourism in the State of California. He said there used to be a theory that California would market itself due to the reputation of the state and the abundance of things to see and do; however, that was not the case. He said the State of California learned that tourism marketing was essential, because tourism was a highly competitive industry. As a result of California’s growth, its tourism

marketing budget increased from $50 million to $120 million, one of the largest budgets in the country. Mr. Wagnon said, by comparison, the NCOT budget was one-tenth of California’s budget. More relevantly, Nevada’s tourism marketing budget was also below that of Oregon, Utah and Arizona, Nevada’s three nearest competitors. He said it was no longer reasonable to think that a state’s reputation would market itself, it was important to have a competitive budget and build a brand for the state.

Mr. Wagnon said for the past 12 years he had been responsible for marketing three Lake Tahoe ski resorts owned by Vail Resorts, the largest ski operator in the world. He said NCOT played a critical role in helping the state establish Lake Tahoe as one of the leading winter sports destinations in North America, competing with Colorado and Utah. He said both Colorado and Utah had larger state tourism marketing budgets than Nevada, and those budgets were highly focused on the sport of skiing, which was not the case in Nevada.

Mr. Wagnon said, as a NCOT Commissioner and having been a tourism marketing executive for the past 30 years, he thought the Division of Tourism was doing an excellent job of leveraging its budget, maximizing impact, creating a brand and brand recognition for the State of Nevada, and generating 3 percent year-over-year growth as mentioned earlier. He reiterated that tourism was a highly competitive industry, and marketing was necessary for growth. Mr. Wagnon thought the state needed to continue to fund NCOT at the highest level possible, so Nevada could remain competitive, particularly compared to its closest competitors in the western United States.

Ed Guthrie, Executive Director and Chief Executive Officer Emeritus, Opportunity Village, spoke regarding Agenda Item C-24, Department of Health and Human Services (DHHS), Developmental Disabilities Councils (DDC). Mr. Guthrie said he was in favor of Agenda Item C-24, with one concern. He said, if approved, there would be one Social Services Program Specialist position handling self-advocacy throughout Nevada. He said that position would be located in Northern Nevada; however, 72.5 percent of Nevada’s population was in Southern Nevada. Mr. Guthrie said he assumed that percentage also corresponded with the percentage of people with intellectual disabilities in Nevada. He said there were approximately 400 self-advocates in Southern Nevada, and he hoped that the Social Services Program Specialist would spend a significant amount of time in Southern Nevada.

Cindy Carano, Vice Chair, NCOT, and Executive Director, Eldorado Resorts, thanked Mr. Wagnon for his earlier comments. She reminded the Committee that tourism dollars were three-eighths of 1 percent of the room tax dollars collected throughout the state. Ms. Carano said she had been with NCOT for more than eight years, and she thought the current leadership within the DTCA was outperforming its predecessors. She said marketing dollars had a return on investment of approximately $70 per $1 spent in tax dollars. She thought the money was being well spent and increasing the number of visitors to Nevada. Ms. Carano echoed Mr. Wagnon’s comments that Nevada had a lot of competition, both nationally and globally. She said the lodging tax funds would be used to preserve Nevada’s heritage. She said the wild west was still very marketable in

the global market; international visitors found Nevada’s heritage interesting, as do Nevadans.

Ms. Carano said the funds were being spent prudently, and she was excited about the projects. She urged the Committee to keep the funds where they belonged, so they could be used to promote the State of Nevada.

C. APPROVAL OF GIFTS, GRANTS, WORK PROGRAM REVISIONS AND POSITION CHANGES IN ACCORDANCE WITH CHAPTER 353 OF NRS.

Mark Krmpotic, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), directed the Committee to the revised list for Agenda Item C.

The Committee expressed interest in hearing testimony on the following items: Agenda Items C-28, Department of Health and Human Services, Division of Public and Behavioral Health; C-41 and C-42, Department of Employment, Training and Rehabilitation; C-59 and C-60, Department of Conservation and Natural Resources; C-68 through C-73, Department of Tourism and Cultural Affairs; and C-82 and C-83, Department of Administration, Director’s Office.

Mr. Krmpotic noted that Agenda Items C-39, Department of Employment, Training and Rehabilitation; and C-66 and C-67, Department of Education, had been withdrawn.

Vice Chair Kieckhefer requested further testimony on Agenda Items C-64 and C-65, Department of Education.

Assemblyman Ohrenschall said, because the IFC was considering a work program that had items that tangentially related to medical marijuana and marijuana establishments, he wanted to advise the Committee that his wife was employed by, and lobbied on behalf of, medical marijuana dispensary owners. After consulting with Legislative Counsel, he chose to make the disclosure in an abundance of caution and pursuant to Standing Rule 23. Assemblyman Ohrenschall said he would vote on the item, because it would not impact his wife’s clients any differently than other dispensary owners in the state.

ASSEMBLYWOMAN DICKMAN MOVED TO APPROVE THE REMAINING WORK PROGRAM REVISIONS AND POSITION RECLASSIFICATIONS IN AGENDA ITEM C.

SENATOR GOICOECHEA SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

1. Office of the Governor - State Energy Office - Governor's Office of Energy - FY 2017 - Addition of $39,276 in State Energy Program (SEP) Formula grant funds and $97,524 in Transfer from Renewable Energy Fund to continue ongoing energy programs. Requires Interim Finance approval since the amount added to the SEP Formula Grant category exceeds $75,000. RELATES TO ITEM C.2. Work Program #C35868

Refer to motion for approval under Agenda Item C.

2. Office of the Governor - State Energy Office - Renewable Energy Fund – FY 2017 - Transfer of $97,524 from the Reserve category to the Transfer to Office of Energy category to continue ongoing energy programs. Requires Interim Finance approval since the amount transferred to the Transfer to Office of Energy category exceeds $75,000. RELATES TO ITEM C.1. Work Program #C35918

Refer to motion for approval under Agenda Item C.

3. Department of Administration - Fleet Services - FY 2016 - Addition of $19,449 in Outside Vehicle Rentals to fund an increase in vehicle rental services from outside vendors. Requires Interim Finance approval since the cumulative amount added to the Outside Vehicle Rental category exceeds 10 percent of the legislatively approved amount for the category. Work Program #C36131

Refer to motion for approval under Agenda Item C.

4. Department of Administration - Hearings and Appeals - FY 2017 - Addition of $147,545 in Transfer from Industrial Relations to fund one new position to reduce caseload and provide timely hearings and appeal decisions related to disputed workers compensation cases. Requires Interim Finance approval since the amount added to the Personnel Services category exceeds $75,000. Work Program #C36155

Refer to motion for approval under Agenda Item C.

5. Department of Education - Distributive School Account - FY 2016 - Addition of $476,690 in Medical Marijuana Excise Tax funds, $7,897,000 in School Support Tax funds, $16,378,637 in Transfer from Education funds and $1,526,355 in Permanent School Fund revenues for the operation of school districts and charter schools. Requires Interim Finance approval since the amount added to the Distributive Schools Account Basic Aid to Schools category exceeds $75,000. Work Program #C36307

Refer to motion for approval under Agenda Item C.

6. Department of Education - State Supplemental School Support Account - FY 2016 - Addition of $16,312,927 in Assembly Bill 579 (2011 Legislative Session) Transient Lodging Tax and $65,710 in Treasurer's Interest Distribution to transfer funds received to the Distributive School Account for the operation of school districts and charter schools. Requires Interim Finance approval since the amount added to the Room Tax - Aid to Schools category exceeds $75,000. Work Program #C36313

Refer to motion for approval under Agenda Item C.

7. Department of Education - Individuals with Disabilities Act (IDEA) – FY 2017 - Addition of $758,498 in federal Personnel Development grant funds to fund professional development programs for teachers and administrators across the state to improve student outcomes for those receiving special education services. Requires Interim Finance approval since the amount added to the Personnel Development Aid to Schools category exceeds $75,000. Work Program #C36133

Refer to motion for approval under Agenda Item C.

8. Department of Education - Individuals with Disabilities Act (IDEA) – FY 2016 - Transfer of $30,929 from the Operating category to the Personnel Services category and $12,186 from the Early Childhood Administration category to the Personnel Services category to fund projected expenditures for the remainder of the fiscal year. Requires Interim Finance approval since the amount transferred from the Operating category exceeds 10 percent of the legislatively approved amount for that category. Work Program #C36339

Refer to motion for approval under Agenda Item C.

9. State Public Charter School Authority - FY 2017 - Addition of $808,784 in Education English Language Learner grant funds transferred from the Department of Education to continue to provide English Language Learner programs to students attending charter schools. Requires Interim Finance approval since the amount added to the English Language Learners category exceeds $75,000. Work Program #C35489

Refer to motion for approval under Agenda Item C.

10. State Public Charter School Authority - FY 2017 - Transfer of $418,066 from the Reserve category to the Operating category to expand academic testing of students in state-sponsored charter schools to provide reliable and valid measures of academic achievement. Requires Interim Finance approval since the amount transferred to the Operating category exceeds $75,000. Work Program #C35798

Refer to motion for approval under Agenda Item C.

11. State Public Charter School Authority - FY 2017 - Addition of $1,194,937 in Special Education grant funds transferred from the Department of Education to align federal and state authority for programs for students with disabilities. Requires Interim Finance approval since the amount added to the Special Education category exceeds $75,000. Work Program #C36142

Refer to motion for approval under Agenda Item C.

12. Department of Agriculture - Nutrition Education Programs - FY 2016 - Addition of $7,782,388 in federal School Breakfast Program grant funds to support an increase in reimbursements for meals to eligible school districts. Requires Interim Finance approval since the amount added to the School Breakfast Program category exceeds $75,000. Work Program #C35999

Refer to motion for approval under Agenda Item C.

13. Department of Agriculture - Nutrition Education Programs - FY 2016 - Addition of $16,372,919 in federal School Lunch Program grant funds to support the increase of National School Lunch Program reimbursement amounts due to an increase in participation, rates and additional food service options. Requires Interim Finance approval since the amount added to the School Lunch Program category exceeds $75,000. Work Program #C36068

Refer to motion for approval under Agenda Item C.

14. Department of Agriculture - Registration and Enforcement - FY 2017 - Addition of $91,087 in Industrial Hemp Registration and Seed Fees to continue implementation of the pilot program to study the growth, cultivation and marketing of industrial hemp. Requires Interim Finance approval since the amount added to the Industrial Research Program category exceeds 10 percent of the legislatively approved amount for that category. Work Program #C36263

Refer to motion for approval under Agenda Item C.

15. Department of Agriculture - Nutrition Education Programs - FY 2016 - Addition of $346,718 in federal Summer Food Service Program grant funds to support the increase of Summer Food Program reimbursement amounts to eligible participants. Requires Interim Finance approval since the amount added to the Summer Food Programs category exceeds $75,000. Work Program #C36145

Refer to motion for approval under Agenda Item C.

16. Department of Agriculture - Nutrition Education Programs - FY 2016 - Addition of $2,843,140 in federal Child/Adult Care Program grant funds to support the projected USDA Food and Nutrition Services meal reimbursement claims through the end of Fiscal Year 2016. Requires Interim Finance approval since the amount added to the Child/Adult Care Food Program category exceeds $75,000. Work Program #C36225

Refer to motion for approval under Agenda Item C.

17. Department of Agriculture - Nutrition Education Programs - FY 2017 - Addition of $47,883 in Balance Forward from Previous Year funds and $194,225 in National School Lunch Program (NSLP) School Equipment grant funds to award equipment assistance subgrants to eligible school districts. Requires Interim Finance approval since the amount added to the NSLP School Equipment grant category exceeds $75,000. Work Program #C35786

Refer to motion for approval under Agenda Item C.

18. Department of Agriculture - Nutrition Education Programs - FY 2017 - Transfer of $1,000,000 from the School Breakfast Program category to the Breakfast After The Bell category to isolate the cost of program activities for accountability and transparency. Requires Interim Finance approval since the amount transferred from the School Breakfast Program category exceeds $75,000. Work Program #C36294

Refer to motion for approval under Agenda Item C.

19. Department of Business and Industry - Insurance Division - Insurance Regulation – FY 2016 - Addition of $80,620 in Network Adequacy revenue to fund health care network adequacy examinations for the remainder of the fiscal year. Requires Interim Finance approval since the amount added to the Network Adequacy category exceeds $75,000. Work Program #C36220

Refer to motion for approval under Agenda Item C.

20. Department of Business and Industry - Housing Division - Weatherization - FY 2017 - Addition of $216,704 in federal Department of Energy (DOE) Weatherization grant funds to support personnel costs as well as subgrants to homeowners. Requires Interim Finance approval since the amount added to the DOE subgrant category exceeds $75,000. Work Program #C36013

Refer to motion for approval under Agenda Item C.

21. Department of Business and Industry - Real Estate Division - Administration - FY 2016 - Deletion of $279,502 in Testing Fees revenue and transfer of $137,911 from the Testing Services category to the Transfer to

General Fund category to align real estate testing fee revenue with planned General Fund reversions. Requires Interim Finance approval since the amount added to the Transfer to General Fund category exceeds $75,000. Work Program #C36008

Refer to motion for approval under Agenda Item C.

22. Governor's Office of Economic Development - Procurement Outreach Program - FY 2017 - Addition of $124,981 in federal Department of Defense grant funds to support the costs of one additional previously approved position and related costs for the Procurement Outreach Program. Requires Interim Finance approval since the amount added to the Personnel category exceeds $75,000. Work Program #C35778

Refer to motion for approval under Agenda Item C.

23. Governor's Office of Economic Development – Workforce Innovation for New Nevada (WINN) - FY 2017 - Addition of $800,000 in federal Workforce Innovation and Opportunity Act funds transferred from the Employment Security program within the Department of Employment, Training and Rehabilitation in order to support workforce training. Requires Interim Finance approval since the amount added to the Grants to Providers category exceeds $75,000. Work Program #C36296

Refer to motion for approval under Agenda Item C.

24. Department of Health and Human Services - Director's Office - Developmental Disabilities - FY 2017 - Addition of $293,811 in federal Assistance to Developmental Disabilities (DD) Councils grant funds to support a new Social Services Program Specialist position to provide technical assistance and guidance to self-advocacy and leadership projects or programs. Requires Interim Finance approval since the amount added to the DD Council category exceeds $75,000. Work Program #C36137

Refer to motion for approval under Agenda Item C.

25. Department of Health and Human Services - Aging and Disability Services - Early Intervention Services - FY 2016 - Addition of $484,724 in Medicaid Administration Charge funds to cover a projected shortfall due to caseload growth and increased costs. Requires Interim Finance approval since the amount added to the Cost Allocation category exceeds $75,000. Work Program #C36424

Refer to motion for approval under Agenda Item C.

26. Department of Health and Human Services - Health Care Financing and Policy - Intergovernmental Transfer Program - FY 2016 - Transfer of $399,882 from the Reserve category to the Transfer to Nevada Check Up category to cover required program expenditures for the remainder of the fiscal year. Requires Interim Finance approval since the amount added to Nevada Check Up category exceeds $75,000. Work Program #C36303. WITHDRAWN 8-9-16.

27. Department of Health and Human Services - Health Care Financing and Policy - Increased Quality of Nursing Care - FY 2016 - Addition of $1,107,243 in Long-term Care Provider Tax funds and $15,495 in Treasurer's Interest Distribution funds to provide the non-federal share of nursing facility supplemental payments. Requires Interim Finance approval since the amount added to the Transfer to Medicaid category exceeds $75,000. Work Program #C36266

Refer to motion for approval under Agenda Item C.

28. Department of Health and Human Services - Public and Behavioral Health - Child Care Services - FY 2017 - Transfer of $30,170 from the In State Travel category to the Transfer from Division of Welfare and Supportive Services (DWSS) category, $98,278 from the Operating category to the Transfer from DWSS category, $1,802 from the Central Licensing Inspections and Complaints System category to the Transfer from DWSS category, $16,742 from the Information Services category to the Transfer from DWSS category, $1,294 from the Training category to the Transfer from DWSS category, $144,470 from the Administration Cost Allocation category to the Transfer from DWSS category and $24,469 from the Reserve category to the Transfer from DWSS category to create a special use category for accounting efficiency. Requires Interim Finance approval since the work program involves the allocation of block grant funds and the agency is choosing to use the IFC meeting for the required public hearing and since the amount added to the Transfer from DWSS category exceeds $75,000. Work Program #C35900

Joe Pollock, Deputy Administrator, Department of Public and Behavioral Health (DPBH), Department of Health and Human Services (DHHS), stated he was available for questions from the Committee.

Vice Chair Kieckhefer opened the public hearing. There being no requests to testify, Vice Chair Kieckhefer closed the public hearing.

ASSEMBLYWOMAN CARLTON MOVED TO APPROVE AGENDA ITEM C-28.

SENATOR GOICOECHEA SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

29. Department of Health and Human Services - Public and Behavioral Health - Public Health Preparedness Program - FY 2017 - Addition of $304,726 in federal Public Health Preparedness and Response for Zika 2016 grant funds to intensify and expand Nevada's ability to collaborate, partner and respond to the public health threat from the Zika virus. Requires Interim Finance approval since the amount added to the Zika Preparedness and Response category exceeds $75,000. Work Program #C36192

Refer to motion for approval under Agenda Item C.

30. Department of Health and Human Services - Public and Behavioral Health - Chronic Disease - FY 2017 - Addition of $347,958 in federal Connecting Kids to Coverage grant funds to utilize community health workers to improve access to healthcare through outreach and enrollment assistance. Requires Interim Finance approval since the amount added to the Community Health Worker category exceeds $75,000. Work Program #C36184

Refer to motion for approval under Agenda Item C.

31. Department of Health and Human Services - Public and Behavioral Health - Northern Nevada Adult Mental Health Services - FY 2016 - Deletion of $768,765 in General Fund appropriations to allow the completion of approved deferred maintenance projects in FY 2017. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.32. Work Program #C36134

Refer to motion for approval under Agenda Item C.

32. Department of Health and Human Services - Public and Behavioral Health - Northern Nevada Adult Mental Health Services - FY 2017 - Addition of $768,765 in General Fund appropriations to allow the completion of approved FY 2016 deferred maintenance projects. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.31. Work Program #C36159

Refer to motion for approval under Agenda Item C.

33. Department of Health and Human Services - Public and Behavioral Health - Southern Nevada Adult Mental Health Services - FY 2016 - Deletion of $64,961 in General Fund appropriations to allow the completion of approved deferred maintenance projects in FY 2017. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.34. Work Program #C36435

Refer to motion for approval under Agenda Item C.

34. Department of Health and Human Services - Public and Behavioral Health - Southern Nevada Adult Mental Health Services - FY 2017 - Addition of $64,961 in General Fund appropriations to allow the completion of approved FY 2016 deferred maintenance projects. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.33. Work Program #C36431

Refer to motion for approval under Agenda Item C.

35. Department of Health and Human Services - Public and Behavioral Health - Facility for the Mental Offender - FY 2017 - Addition of $135,870 in General Fund appropriations to allow the completion of approved deferred maintenance projects in FY 2017. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.36. Work Program #C36139

Refer to motion for approval under Agenda Item C.

36. Department of Health and Human Services - Public and Behavioral Health - Facility for the Mental Offender - FY 2016 - Deletion of $135,870 in General Fund appropriations to allow the completion of approved FY 2016 deferred maintenance projects. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.35. Work Program #C36112

Refer to motion for approval under Agenda Item C.

37. Department of Health and Human Services - Public and Behavioral Health - Facility for the Mental Offender - FY 2017 - Transfer of $880,413 from the Personnel Services category to the Professional Services category to fund contracted psychiatrists and other professionals to support current agency operations and provide the treatment necessary for rehabilitation. Requires Interim Finance approval since the amount transferred to the Professional Services category exceeds $75,000. Work Program #C36170

Refer to motion for approval under Agenda Item C.

38. Department of Health and Human Services - Child and Family Services - Rural Child Welfare - FY 2017 - Transfer of $443,284 from the Personnel Services category to the Temporary Contract Staffing category to allow the division to cover vacancies in hard to fill Social Worker positions with non-state employees. Requires Interim Finance approval since the amount added to the Temporary Contract Staffing category exceeds $75,000. Work Program #C36177

Refer to motion for approval under Agenda Item C.

39. Department of Employment, Training and Rehabilitation - Rehabilitation Division - Vocational Rehabilitation - FY 2016 - Transfer of $89,000 from the Personnel Services category to the Division Cost Allocation category to fund projected expenditures for the remainder of the fiscal year. Requires Interim Finance approval since the amount transferred to the Division Cost Allocation category exceeds $75,000. Work Program #C35616. WITHDRAWN 7-22-2016.

40. Department of Employment, Training and Rehabilitation - Rehabilitation Division - Vocational Rehabilitation - FY 2017 - Addition of $159,840 in Healthy Nevada grant funds transferred from the Department of Health and Human Services to support the Assistive Technology Employment Service program. Requires Interim Finance approval since the amount added to the Fund for Healthy Nevada category exceeds $75,000. Work Program #C36140

Refer to motion for approval under Agenda Item C.

41. Department of Employment, Training and Rehabilitation - Employment Security - FY 2017 - Addition of $2,411,432 in federal Workforce Innovation Opportunity Act grant funds to support the management and implementation of the Statewide Automated Workforce System (SAWS). Requires Interim Finance approval since the SAWS Project category exceeds $75,000. RELATES TO ITEM C.42. Work Program #C36392

Refer to testimony and motion for approval under Agenda Item C-42.

42. Department of Employment, Training and Rehabilitation - Administrative Services - Information Development and Processing - FY 2017 - Deletion of $189,230 in Cost Allocation Reimbursement funds and addition of $2,411,432 in Transfer of federal Workforce Innovation Opportunity Act grant funds from the Employment Security Division to support the management and implementation of the Statewide Automated Workforce System (SAWS). Requires Interim Finance approval since the amount added to the SAWS Project category exceeds $75,000. RELATES TO ITEM C.41. Work Program #C36428

Dennis Perea, Deputy Director, DETR, said Work Program C36428 requested to transfer funds from the agency’s Governor’s reserve account to its Information Development and Processing account for implementation of a new case management system known as the Statewide Automated Workforce System (SAWS). He said DETR currently operated on the One Stop Operating System (OSOS). DETR belonged to a consortium of states that maintained OSOS. Mr. Perea said DETR began discussing the change several years ago when states began leaving the consortium. He said the OSOS consortium began with seven states, three of which had since left the group. The system continually increased in cost and DETR determined it would be best to begin

13 seeking a new system. Mr. Perea said during that same time period, the implementation of the Workforce Innovation Opportunity Act (WIOA) began and the agency concluded that OSOS would not serve its needs going forward. Mr. Perea said DETR collaborated with the local Workforce Investment Board a year ago to develop a request for proposal (RFP) that would meet the needs of the entire workforce system. He said DETR was ready to proceed on a contract if the work program was approved by the IFC. Mr. Perea said the agency was striving to convert the system at the beginning of a fiscal year, so receiving the Committee’s approval today would allow nine months for the conversion process, and the new system could go live on July 1, 2017. However, he said DETR had pushed the limit with the vendor negotiations, so the conversion may need to occur during an interim period.

Mr. Perea said the new system would be WIOA compliant, and allow DETR to execute its federal reporting on July 1. He said DETR staff had concerns about whether the OSOS consortium would be ready by July 1, 2017, for WIOA compliance for federal reporting.

Mr. Perea said those were some of the reasons DETR brought such a large request before the IFC during the interim period. He said Grant Nielson, Program Chief, Employment Security Division (ESD), DETR; and Nancy St. Clair, Business Process Analyst, ESD, DETR, were available to answer technical questions.

Assemblyman Sprinkle said he understood what DETR was trying to accomplish with SAWS, the new case management system; however, he was uncertain about the July 1, 2017, timeframe. He asked how an entire system upgrade/redesign could be accomplished in nine months, and what were the consequences if the deadline was not met. Also, as he understood it, the state was required to pay for a portion of the consortium. Assemblyman Sprinkle asked if the state would be responsible for the cost of both systems if the conversion did not occur on July 1.

Mr. Perea replied that the nine-month timeframe was included in the proposal from the lead bidder. He said if the SAWS conversion did not occur by July 1 then DETR would incur additional charges for remaining on OSOS. Currently, DETR paid a reduced rate for OSOS in anticipation of the state leaving the consortium. Mr. Perea said the longer the state remained with OSOS, the more the cost would increase. He said DETR paid approximately $440,000 for the current year of OSOS, and the department just received an invoice for $200,000 from the consortium for the WIOA implementation. He said, by comparison, the other states in the consortium were invoiced $600,000 for the WIOA implementation, in addition to their annual OSOS payment. Mr. Perea noted that the remaining states in the consortium would have to vote to allow Nevada to remain in the consortium in the next biennium if the state did not convert to a new system.

Assemblyman Sprinkle asked if the contract with the new vendor included fees the state might incur for exceeding the July 1 deadline. Mr. Perea replied that DETR had not yet signed a contract with the vendor. He said additional fees had not been discussed during negotiations; however, DETR would raise the issue with the prospective vendor. He noted that negotiations with the vendor had been challenging.

Assemblyman Thompson remarked that OSOS was antiquated and incompatible with WIOA. He asked about the potential lifespan of SAWS, as well as the expected cost of the system. He recalled past situations where an agency had to request additional funds for a project, because the actual cost was higher than anticipated. Assemblyman Thompson said one such example was the Nevada Operations of Multi-Automated Data Systems that was previously used by the Division of Welfare and Supportive Services.

Mr. Perea replied that SAWS was an off-the-shelf system that was used by many customers across the country. He said the system would be updated continually, and the cost of updates would be built into the annual licensing fee. Mr. Perea said he did not anticipate lifespan being an issue with an off-the-shelf system.

Mr. Perea said the negotiations were confidential, but he estimated the implementation costs to be approximately $750,000. He thought the annual cost of licensing would also be about $750,000.

Assemblyman Thompson asked about the interfacing capability of the new system. He said there were many 18 to 24 year olds facing homelessness, and if DETR’s new system could interface with the Homeless Management Information System (HMIS), case workers could communicate electronically rather than by telephone and fax.

Mr. Perea replied that DETR had not considered interfacing with HMIS, but SAWS would interface with approximately 15 different systems. He thought the Vocational Rehabilitation Automated Information System of Nevada would need to interface with the unemployment insurance claim system, UInv. He said the RFP included a number of systems that would need to interface with one another. Mr. Perea thought it was feasible to include additional systems in SAWS, but he was unsure of the cost.

In response to a question from Assemblyman Kirner, Mr. Perea replied that SAWS was not part of a consortium, the vendor was a for-profit entity. He said SAWS was used across the country. The most recent SAWS implementation was for the State of California, which required interfacing 48 local systems, the vendor’s largest project to date. Mr. Perea said the vendor was a mature company with many customers.

Assemblywoman Bustamante Adams said there were proposed changes for the workforce, and she hoped the 2017 Legislature would take action on those items. She asked how SAWS would interact with prospective workforce changes at the state level.

Mr. Perea replied that Assemblywoman Bustamante Adams’ same question arose while developing the RFP with the local board. There were questions concerning the WIOA implementation, the impact of the new rules, and reorganization. He said the system that was currently under negotiation had many more modules available than what was included in the RFP; for example, a vocational rehabilitation module, which was in its infancy; and a Temporary Assistance for Needy Families employment and training module. He said there were other modules available that would allow DETR to expand and join with the workforce under one seamless system. Mr. Perea said he could provide the Committee with more detail on the various modules that were available.

Assemblywoman Bustamante Adams asked if the local boards would use SAWS. Mr. Perea said that was correct. He said the local boards participated in the process of building the RFP, so the document also reflected their business needs. He said the entire workforce system would be using SAWS.

ASSEMBLYMAN EDWARDS MOVED TO APPROVE AGENDA ITEMS C-41 AND C-42.

SENATOR GOICOECHEA SECONDED THE MOTION.

Assemblyman Sprinkle said he was concerned that the July 1 deadline would not be met. He wanted to avoid any financial impact on the state if the vendor failed to meet the deadline and suggested the contract include something to that affect.

Vice Chair Kieckhefer said Assemblyman Sprinkle’s concerns were shared, and he hoped those concerns were understood by the agency.

THE MOTION PASSED UNANIMOUSLY. (Senator Roberson was not present for the vote.)

43. Department of Employment, Training and Rehabilitation - Administrative Services - Nevada P20 Workforce Reporting - FY 2017 - Transfer of $100,000 from the Personnel Services category to the Statewide Longitudinal Data System (SLDS) category and $60,000 from the Operating category to the SLDS category to support a Master Services Agreement contractor for development and maintenance of the data system. Requires Interim Finance approval since the amount transferred to the SLDS category exceeds $75,000. Work Program #C35864. REVISED 8-5-16.

Refer to motion for approval under Agenda Item C.

44. Department of Corrections - Director's Office - FY 2016 - Deletion of $261,413 in Budgetary Transfers and a reduction of $277,065 in Personnel Services category to fund a shortfall of $15,652 in employee physical costs and to fund a projected shortfall within the department for the remainder of the fiscal year. Requires Interim Finance approval since the amount deducted from the Personnel Services category exceeds $75,000. Work Program #C36144. REVISED 8-15-16.

Refer to motion for approval under Agenda Item C.

45. Department of Corrections - Northern Nevada Correctional Center – FY 2016 - Addition of $190,510 in Budgetary Transfers and transfer of $31,215 from the Utilities category to the Personnel Services category to fund a projected shortfall within the department for the remainder of the fiscal year. Requires Interim Finance approval since the amount added to the Personnel Services category exceeds $75,000. Work Program #C36143

Refer to motion for approval under Agenda Item C.

46. Department of Corrections - Southern Desert Correctional Center – FY 2016 - Deletion of $22,992 in General Fund appropriations to allow completion of an approved deferred maintenance project in FY 2017. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.47. Work Program #C36065

Refer to motion for approval under Agenda Item C.

47. Department of Corrections - Southern Desert Correctional Center - FY 2017 - Addition of $22,992 in General Fund appropriations to allow completion of an approved FY 2016 deferred maintenance project. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.46. Work Program #C36098

Refer to motion for approval under Agenda Item C.

48. Department of Corrections - Warm Springs Correctional Center - FY 2016 - Deletion of $9,800 in General Fund appropriations to complete an approved deferred maintenance project in FY 2017. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.49. Work Program #C36258

Refer to motion for approval under Agenda Item C.

49. Department of Corrections - Warm Springs Correctional Center - FY 2017 - Addition of $9,800 in General Fund appropriations to complete an approved FY 2016 deferred maintenance project. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.48. Work Program #C36259

Refer to motion for approval under Agenda Item C.

50. Department of Corrections - Florence McClure Women's Correctional Center - FY 2016 - Addition of $70,903 in Budgetary Transfers and transfer of $2,383 from the Operating category to the Personnel Services category and $5,317 from the Equipment category to the Personnel Services category to fund a projected shortfall within the department for the remainder of the fiscal year. Requires Interim Finance approval since the amount added to the Personnel Services category exceeds $75,000. Work Program #C36130

Refer to motion for approval under Agenda Item C.

51. Department of Corrections - Pioche Conservation Camp - FY 2016 - Deletion of $7,494 in General Fund appropriations to complete approved deferred maintenance projects in FY 2017. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.52. Work Program #C36253

Refer to motion for approval under Agenda Item C.

52. Department of Corrections - Pioche Conservation Camp - FY 2017 - Addition of $7,494 in General Fund appropriations to complete approved FY 2016 deferred maintenance projects. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.51. Work Program #C36273

Refer to motion for approval under Agenda Item C.

53. Department of Corrections - Wells Conservation Camp - FY 2016 - Deletion of $2,245 in General Fund appropriations to complete an approved deferred maintenance project in FY 2017. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.54. Work Program #C36185

Refer to motion for approval under Agenda Item C.

54. Department of Corrections - Wells Conservation Camp - FY 2017 - Addition of $2,245 in General Fund appropriations to complete an approved FY 2016 deferred maintenance project. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.53. Work Program #C36186

Refer to motion for approval under Agenda Item C.

55. Department of Motor Vehicles - System Modernization - FY 2016 - Deletion of $1,849,852 $1,855,455 $2,031,541 in Highway Fund Appropriation in FY 2016 for the purchase of equipment and software for the Department of Motor Vehicles System Modernization budget in FY 2017 and for temporary backfill of subject matter experts (SME) associated with the project. Requires Interim Finance approval pursuant to Section 35 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.56. Work Program #C36375. REVISED 7-28-16. REVISED 8-16-16.

Refer to motion for approval under Agenda Item C.

56. Department of Motor Vehicles - System Modernization - FY 2017 - Addition of $1,849,852 $1,855,455 $2,031,541 in Highway Fund Appropriation in FY 2017 for the purchase of equipment and software for the Department of Motor Vehicles System Modernization budget and for temporary backfill of subject matter experts (SME) associated with the project. Requires Interim Finance approval pursuant to Section 35 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.55. Work Program #C36390. REVISED 7-28-16. REVISED 8-16-16.

Refer to motion for approval under Agenda Item C.

57. Department of Public Safety - Emergency Management Assistance Grants - FY 2017 - Addition of $1,859,607 in Federal Emergency Management Assistance grant authority to align federal and state authority for the Pre-Disaster Mitigation and Cooperative Partners grant program to continue reimbursement to subgrantees for ongoing projects. Requires Interim Finance approval since the amount added to the Pre-Disaster Mitigation category exceeds $75,000. Work Program #C36056

Refer to motion for approval under Agenda Item C.

58. Department of Conservation and Natural Resources - Forestry - FY 2017 - Addition of $600,000 in U.S. Forest Service Landscape Restoration grant funds for projects to manage pinyon and juniper encroachment into sagebrush habitat in Lincoln County and optimize urban tree canopy coverage during water conservation programs in Washoe and Clark Counties. Requires Interim Finance approval since the amount added to the Federal Landscape Scale Restoration category exceeds $75,000. Work Program #C36126

Refer to motion for approval under Agenda Item C.

59. Department of Conservation and Natural Resources - Environmental Protection - Waste Management and Corrective Action - FY 2017 - Addition of $500,000 in transfer from Bureau of Mining Regulation and Reclamation funds to cover project and operating costs related to the Abandoned Mine Lands program. Requires Interim Finance approval since the amount added to the Corrective Actions category exceeds $75,000. RELATES TO ITEM C.60. Work Program #C36187

Refer to testimony and motion for approval under Agenda Item C-60.

60. Department of Conservation and Natural Resources - Environmental Protection - Mining Regulation and Reclamation - FY 2017 - Transfer of $500,000 from the Reserve category to the Transfers category to cover project and operating costs related to the Abandoned Mine Lands program in the Bureau of Corrective Actions. Requires Interim Finance approval since the amount added to the Transfers category exceeds $75,000. RELATES TO ITEM C.59. Work Program #C36209

Dave Emme, Administrator, Nevada Division of Environmental Protection (NDEP), Department of Conservation and Natural Resources (DCNR), introduced Greg Lovato, Deputy Administrator, NDEP, DCNR.

Mr. Emme said Work Program C36209 requested a transfer of $500,000 in reserve authority from the NDEP’s Bureau of Mining Regulation and Reclamation budget to its Bureau of Corrective Actions budget to support work at abandoned mine lands sites. He said the NDEP’s Mining Regulation and Reclamation program was established in statute in 1989 as a comprehensive and protective program supported entirely by fees paid by the mining industry. He said the NDEP also had a small Abandoned Mine Lands (AML) program that focused on addressing issues at sites that were closed or abandoned prior to the mining regulations adopted in 1989. Mr. Emme said some of the sites had a responsible party to pay for reclamation and closure work pertaining to environmental issues. For example, the Rio Tinto site on the Idaho border, north of Elko, was recently closed and the site was supported entirely by industry as the responsible party. He said there were a large number of sites without a responsible party to handle

AML site issues. Mr. Emme noted the Division of Minerals operated an AML program, but it was strictly focused on addressing safety issues at AML sites, not environmental issues.

Mr. Emme said, in addition to the fact that many AML sites lacked a responsible party, there was also funding and environmental issues associated with those same sites. In the case of some higher priority sites, the U.S. Environmental Protection Agency (EPA) could get involved, which provided Superfund authority and funding to address matters at those sites. For example, Superfund dollars were currently being used for work in Eureka, Nevada. Mr. Emme said there was not a dedicated source of funding, however, for lower priority sites. He said the funds requested in the work program would be transferred from the active mining program to the AML program to support work at multiple lower priority sites. Mr. Emme explained that the NDEP experienced a spike in mining fee reserves when gold prices were very high, so the division proposed the idea of using the excess funds to address issues at AML sites. He said the mining industry, as represented through the Nevada Mining Association Board (Board), was supportive of the idea; however, the Board sought assurance that use of the funds would not result in a fee increase, and the industry would not incur liability for using the fee revenue for such purposes. He said the NDEP reassured the Board that neither of those things would occur. Mr. Emme said Mr. Lovato could provide the Committee with details concerning the specific uses for the funds.

In response to a question from Vice Chair Kieckhefer, Mr. Emme replied that the NDEP identified approximately 191 AML sites with environmental issues.

Vice Chair Kieckhefer said, according to staff, the total cost of remediation for all AML sites in Nevada could exceed $1.0 billion, and Mr. Emme said that was correct.

Vice Chair Kieckhefer asked if the reserve funds were currently the only source of funding for the state’s 10 percent share of the remediation efforts.

Mr. Emme thought the 10 percent state share referred to by Vice Chair Kieckhefer was cost share. He said one of the sites identified by the NDEP was the Anaconda Mine, which was an abandoned copper mine near Yerington, Nevada. He said the Anaconda Mine had issues for years, and recently Governor Sandoval conditionally concurred with listing the site on the U.S. EPA National Priority List (NPL). Mr. Emme said the reason for that was to gain access to federal funds to address some of the issues at the Anaconda Mine. He said most of the issues at the site were being addressed by Atlantic Richfield, a subsidiary of British Petroleum. Atlantic Richfield was the responsible party for most issues at the Anaconda Mine; however, there was a “donut hole” associated with a former operator at the site, for which there was no responsible party. Because the Anaconda Mine was listed on the NPL, federal

21 funds were available to address certain issues at the site, but the state was liable for a 10 percent share of costs associated with that small section of the mine.

Vice Chair Kieckhefer asked if the state’s match for reclamation activities in that small section of the Anaconda Mine would be approximately $4 million, and Mr. Emme said that was correct.

In response to a question from Vice Chair Kieckhefer, Mr. Emme replied that the NDEP was requesting $200,000 as a down payment toward the state’s share of the cost for reclamation activities at the Anaconda Mine. He said the issues at the Anaconda Mine were not new. For a number of years the NDEP and U.S. EPA had been dealing with issues at the site and planning reclamation activities.

Vice Chair Kieckhefer asked if the NDEP planned to eventually remediate all AML sites where there was an environmental concern. Mr. Emme replied that there was not a funding mechanism for the cost to remediate all AML sites with identified environmental issues. He said the NDEP intended to identify and prioritize sites and look for issues that could be addressed at a reasonable cost. Additionally, the NDEP would seek opportunities to work with federal agencies or nonprofit organizations to address issues at some AML sites.

Vice Chair Kieckhefer asked how the NDEP selected the three AML sites that would undergo remediation with the requested funding allocation.

Greg Lovato, Deputy Administrator, NDEP, replied that the Anaconda Mine was selected for remediation because it was on the federal NPL list. He said the NDEP selected the Birthday and Buckskin Mines based on reclamation activities that were executable using available funding. He said the Birthday Mine was located in northern Humboldt County, near the Oregon border, in the Santa Rosa Mountains. Mr. Lovato said acid mine drainage and high arsenic concentrations had impacted the water quality at the Birthday Mine for years, which had contributed to cattle deaths in no less than three separate years. He said the $250,000 cost was based on construction work that had been performed by the National Forest Service at a nearby mine, with a similar setting and approach. He said the funds would help the NDEP stabilize the site and improve the water quality.

Mr. Lovato said there were hazardous substances at the Buckskin Mine. Additionally, the site had fallen into tax delinquency and become the possession of the Douglas County Board of Trustees. He said the funds would be used this year to stabilize the site and remove some of the hazardous substances. Mr. Lovato said, overall, environmental priority and available funding dictated which sites were selected for remediation efforts.

Mr. Lovato said, to add some perspective to the $1.2 billion cost to remediate all AML sites in Nevada, a large percentage of that was driven by the Three Kids Mine near Henderson, Nevada. He said the Three Kids Mine had estimated closure costs and reclamation costs of more than $300 million. The NDEP was working with a prospective developer, the City of Henderson, and the Bureau of Land Management, to produce a private funding proposal to address the Three Kids Mine. Mr. Lovato said the NDEP did not consider the cost of AML remediation activities to be the state’s responsibility, but the NDEP was proposing cleanup at several AML sites, because there was available revenue.

Vice Chair Kieckhefer said, therefore, the state should not expect a 10 percent cost share for the entire $1.2 billion, and Mr. Lovato said that was correct. He said the Three Kids Mine site, for example, would be remediated using only private funds. He said the NDEP was working to secure an alternate source of funding for several other AML sites to avoid a cost to the state.

Assemblywoman Titus said the Anaconda Mine was in her district. As a county health officer for Lyon County, she had been acutely involved in the mine’s impact on the county since its closure in the mid-1970s. She thought the 10 percent figure was the amount agreed to by Governor Sandoval for the Anaconda Mine explicitly, not across the board.

Mr. Emme replied that Governor Sandoval concurred with listing the Anaconda Mine site on the NPL. By doing so, Nevada was required to match 10 percent of the federal funds per Superfund regulations.

Assemblywoman Titus said an important factor was that there were private government partnerships looking to restore AML sites. For example, the Anaconda Mine was still being actively mined. She said private government partnerships were involved in mitigations in hopes that some AML sites could be mined again to offset costs. Assemblywoman Titus said it was good to know that the funds were being used to mitigate some of the environmental impacts as opposed to funding additional studies. She said she recently attended a U.S. EPA meeting in Yerington, Nevada, and she was concerned that more funds would be spent performing studies now that the Anaconda Mine was a Superfund site. She said the environmental hazards at AML sites had been studied ad nauseam for three decades. Assemblywoman Titus said her concerns were justified when she discovered that additional studies would, in fact, occur. She thought it was more important to put funds toward mitigation efforts. Assemblywoman Titus said she was encouraged to know that the funds requested by the NDEP would have a positive impact on several AML sites.

Senator Goicoechea asked if the state was providing funds for remedial activities at the AML site in Eureka, Nevada. Mr. Emme replied that the state was not currently obligated to provide cost share support for remedial activities at the site; however, the U.S. EPA did ask the state to contribute to the cost of rock crushing

23 work being performed at the site to stabilize some slopes. He said the NDEP was considering the request of the U.S. EPA.

Assemblyman Wheeler asked why the agency was requesting to use reserve funds for AML site remediation activities if the NDEP had been planning the activities for several years. He asked why there was not a dedicated source of funding for those efforts, thereby freeing up reserve funds for other needs. He also inquired about other uses for the reserve funds.

Mr. Emme replied that the planning he spoke of was specific to the Anaconda Mine. He said the NDEP had been working on that site for several years. He said the idea of including the site on the National Priorities List (NPL) had been a consideration for nearly ten years; therefore, the matter of a state cost share had been deliberated for a number of years.

Mr. Emme said the use of the reserve funds was constrained by the Nevada Revised Statutes. He said the agency’s Deputy Attorney General concurred that NRS provided authority to use reserve funds specifically for reclamation at AML sites. He said the funds could not be used for purposes outside statutory constraints.

Assemblyman Wheeler said NRS also provided for different regulations and implementation of regulations. He asked if the funds could be used for regulations in the future. He noted that his question about a dedicated source of funding for reclamation activities had not been answered. Assemblyman Wheeler asked why the NDEP wanted to perform the reclamation activities now, using reserve funds.

Mr. Emme replied that the agency was using the funds now in an effort to be opportunistic. He explained that there had been a spike in reserves due to increased metal prices. That revenue source had since returned to prior levels, but there was some funding available that the NDEP wanted to put to good use. With regard to why there was not a dedicated source of funding for reclamation activities, he said that was a policy issue that may need to be addressed by the Legislature. Mr. Emme said it may be a challenging policy change, because it was a sizeable issue; however, it may be time for a discussion.

Assemblyman Ohrenschall said, as he understood it, none of the funding requested by the NDEP would be utilized for the Three Kids Mine. He asked the timeframe for the cleanup at the Three Kids Mine site, and the state’s cost.

Mr. Lovato replied that there was not a state cost share obligation for the reclamation work at the Three Kids Mine. He said the NDEP would work in an oversight regulatory role, and all costs to the state would be reimbursed by whoever performed the work. With regard to a timeframe for the Three Kids Mine project, he said the Three Kids Mine Reclamation Act was signed by the

President in 2014 to allow transfer of the property from the federal government, through the City of Henderson, to a developer. Before that could occur, a mine remediation/reclamation plan must be approved by the state, and it must include financial assurance to complete the work. Mr. Lovato said the prospective developer was currently working on the remediation/reclamation plan with potential investors. He said the NDEP expected an update later in the year. He said, after the work began, the expected timeframe would be between three and five years based on other projects of similar scope and scale.

Senator Spearman asked if any of the mines scheduled for reclamation were being considered for repurposing, such as for use in geothermal projects.

Mr. Emme replied that some AML sites had been repurposed. He said there were entities looking at the potential for developing solar projects on AML sites; however, to his knowledge, that had not yet occurred. Mr. Emme said the Three Kids Mine was a classic redevelopment intended for housing.

SENATOR SETTELMEYER MOVED TO APPROVE AGENDA ITEMS C-59 AND C-60.

ASSEMBLYWOMAN DICKMAN SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

61. Department of Wildlife - Fisheries Management - FY 2017 - Addition of $126,695 in U.S. Fish and Wildlife Service and U.S. Bureau of Reclamation grant funds to continue conservation efforts of aquatic species currently state protected or listed on the Endangered Species Act list. Requires Interim Finance approval since the amount added to the Fisheries Small Grants category exceeds $75,000. Work Program #C35714

Refer to motion for approval under Agenda Item C.

62. Department of Health and Human Services - Aging and Disability Services - Tobacco Settlement Program - FY 2016 - Transfer of $54,366 from the Grants category to the Cost Allocation category to cover expenditures through the remainder of the fiscal year. Requires Interim Finance approval since the amount transferred to the Cost Allocation category exceeds 10 percent of the legislatively approved amount for that category. Work Program #C36558. RECEIVED AFTER SUBMITTAL DEADLINE, 7-22-16.

Refer to motion for approval under Agenda Item C.

63. Department of Health and Human Services - Aging and Disability Services - Senior Rx and Disability Rx - FY 2016 - Transfer of $2,805 from the Personnel

Services category to the Cost Allocation category, $87,249 from the Senior Prescription Program category to the Cost Allocation category, $45,340 from the Disabled RX Program category to the Cost Allocation category, and $3,327 from the Information Services category to the Cost Allocation category to cover expenditures through the remainder of the fiscal year. Requires Interim Finance approval since the amount transferred from the Senior Prescription Program category exceeds $75,000. Work Program #C36559. RECEIVED AFTER SUBMITTAL DEADLINE, 7-22-16.

Refer to motion for approval under Agenda Item C.

64. Department of Education - Other State Education Programs - FY 2017 - Addition of $14,413,177 $6,371,817 $6,159,801 in General Fund appropriations to allow continuation of approved programs. Requires Interim Finance approval pursuant to Section 19 and 21 of Senate Bill 515 (2015 Legislative Session). RELATES TO ITEM C.65 Work Program #C36591. RECEIVED AFTER SUBMITTAL DEADLINE, 7-25-16. REVISED 8-1-16. REVISED 8-11-16.

Refer to testimony and motion for approval under Agenda Item C-65.

65. Department of Education - Other State Education Programs - FY 2016 - Deletion of $14,413,177 $6,371,817 $6,159,801 in General Fund appropriations in FY 2016 to allow the continuation of approved programs in FY 2017. Requires Interim Finance approval pursuant to Section 19 and 21 of Senate Bill 515 (2015 Legislative Session). RELATES TO ITEM C.64. Work Program #C36603. RECEIVED AFTER SUBMITTAL DEADLINE, 7-25-16. REVISED 8-1-16. REVISED 8-11-2016.

Vice Chair Kieckhefer asked the agency to provide details on its request to balance forward unspent funds to FY 2017. He was aware the department withdrew its work programs related to the School Remediation Trust Fund Account. He thought those work programs were primarily for English language learner program funds that would be balanced forward in a different manner, and apart from the IFC. He asked the department to discuss the roll out of the grant funds that were put into place during the 2015 Legislative Session, and how the funds would be carried forward into FY 2017.

Roger Rahming, Deputy Superintendent for Business and Support Services, Nevada Department of Education (NDE), asked for clarification of Vice Chair Kieckhefer’s request. Vice Chair Kieckhefer asked how the department would use the $6.1 million being balanced forward in the Other State Education Programs account.

Brett Barley, Deputy Superintendent for Student Achievement, NDE, replied that approximately $5 million was a roll over for the Nevada Ready 21 program, which was the one-on-one device program for Nevada middle schools. He said

Kim Vidoni, Education Programs Professional, NDE, was available to answer questions specific to the program.

Vice Chair Kieckhefer asked if the department had been unable to spend the funds in the first year of the biennium, and Mr. Rahming said that was correct.

Ms. Vidoni clarified that only 30 percent of the funds were required to be spent in the first year of the biennium. The remaining 70 percent of the funds would be spent in the second year of the biennium, when the devices were delivered.

In response to a question from Vice Chair Kieckhefer, Ms. Vidoni said the funds were originally budgeted to be divided equally between both fiscal years; however, the department divided them 30/70.

Vice Chair Kieckhefer remarked that $10 million would be balanced forward to the School Remediation Trust Fund Account. Andrea McCalla, Director of Budget, NDE, said that was correct. She said the funds would be carried forward; however, it would be done through the budget process, because IFC approval was not required for that particular line item.

Vice Chair Kieckhefer asked what the School Remediation Trust Fund Account funds would be used for in FY 2017. Ms. McCalla replied that she did not have that information available.

Vice Chair Kieckhefer said the Committee would not be voting on the item, because it had been withdrawn; however, he requested the agency provide the information to staff, who would disseminate it to the Committee.

Assemblyman Edwards asked why so few funds were being allocated to the Teacher Certification program when there was a critical need for certified teachers. He said he had spoken with many constituents who wanted to be teachers, but the certification process seemed unreasonable.

Mr. Barley agreed with Assemblyman Edwards. He said the pipeline was a critical issue facing Nevada schools. He recommended that Assemblyman Edwards speak with Deputy Superintendent Dena Durish, who oversaw the teacher and principal pipeline work. He said Ms. Durish could provide a better explanation about the program and what was taking place within the program.

Assemblyman Edwards asked if the department anticipated submitting a budget request to the 2017 Legislature that included a greater emphasis on the Teacher Certification program, because it was a significant problem for the state. Mr. Barley said that was correct. He said the department would be excited to work with Assemblyman Edwards regarding the Teacher Certification program.

Assemblyman Thompson asked why the NDE could not provide the Committee with its intended use for the $6.1 million that was being carried forward. Ms. McCalla explained that she did not have that particular work program available to provide an answer to the Committee.

Vice Chair Kieckhefer clarified that Work Programs C36591 and C36603 were requests by the NDE to balance forward $6.1 million into FY 2017. He said a vast majority of those funds would be spent on Nevada Ready 21 grants, which would be used for technology in the classroom. He further clarified that his question concerned the School Remediation Trust Fund in Work Programs C36592 and C36604, both of which had been withdrawn by the department.

ASSEMBLYMAN KIRNER MOVED TO APPROVE AGENDA ITEMS C-64 AND C-65.

SENATOR GOICOECHEA SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

66. Department of Education - School Remediation Trust Fund - FY 2017 - Addition of $32,801,745 $10,174,691 in General Fund appropriations to allow continuation of approved programs in FY 2017. Requires Interim Finance approval pursuant to Section 27, 28 and 31 of Senate Bill 515 (2015 Legislative Session). RELATES TO ITEM C.67. Work Program #C36592. RECEIVED AFTER SUBMITTAL DEADLINE, 7-25-16. REVISED 8-1-16. WITHDRAWN 8-10-16.

67. Department of Education - School Remediation Trust Fund - FY 2016 - Deletion of $32,801,745 $10,174,691 in General Fund appropriations in FY 2016 to allow the continuation of programs in FY 2017. Requires Interim Finance approval pursuant to Section 27, 28 and 31 of Senate Bill 515 (2015 Legislative Session). RELATES TO ITEM C.66. Work Program #C36604. RECEIVED AFTER SUBMITTAL DEADLINE, 7-25-16. REVISED 8-1-16. WITHDRAWN 8-10-16.

68. Department of Tourism and Cultural Affairs - Tourism Development Fund - FY 2017 - Transfer of $469,000 from the Reserve category to the State Railroad Museum category, $325,000 from the Reserve category to the Transfer to Indian Commission category, $267,254 from the Reserve category to the Transfer to Arts Council category, $126,000 from the Reserve category to the Nevada State Museum - Carson City category, $75,000 from the Reserve category to the Stewart Historic District category, $23,373 from the Reserve category to the Nevada Historical Society category, and $23,373 from the Reserve category to the Nevada State Museum – Las Vegas category to fund various one-time expenditures across the Department. Requires Interim Finance approval since the amount transferred to the State Railroad Museums category

exceeds $75,000. RELATES TO ITEMS C.69, 70 ,71, 72, and 73. Work Program #C36204. RECEIVED AFTER SUBMITTAL DEADLINE, 7-26-16.

Refer to motion for approval under Agenda Item C.

69. Department of Tourism and Cultural Affairs - Indian Commission – FY 2017 - Addition of $325,000 in Transfer from Commission on Tourism (NCOT) to fund an expanded master plan that includes interpretive, marketing and business planning documents for the Stewart Facility and replacement of the phone system. Requires Interim Finance approval since the amount added to the One Shot NCOT Transfer category exceeds $75,000. RELATES TO ITEMS C.68, 70 ,71, 72, and 73. Work Program #C36270. RECEIVED AFTER SUBMITTAL DEADLINE, 7-26-16.

Refer to motion for approval under Agenda Item C.

70. Department of Tourism and Cultural Affairs - Stewart Indian School Living Legacy - FY 2017 - Addition of $75,000 in Transfer from Commission on Tourism (NCOT) to fund the renovation of Building 4 at the Stewart Facility to house the employees of the Stewart Indian School Living Legacy. Requires Interim Finance approval since the amount added to the One Shot NCOT Transfer category exceeds 10% of the legislatively approved amount for that category. RELATES TO ITEMS C. 68, 69,71, 72, and 73. Work Program #C36260. RECEIVED AFTER SUBMITTAL DEADLINE, 7-26-16.

Refer to motion for approval under Agenda Item C.

71. Department of Tourism and Cultural Affairs - Museums and History - Nevada State Museum, Carson City - FY 2017 - Addition of $126,000 in Transfer from the Commission on Tourism to develop a master plan and construction schematic design documents to expand the storage facility at the Indian Hills Curatorial Center. Requires Interim Finance approval since the amount added to the Indian Hills Curatorial Center Expansion category exceeds $75,000. RELATES TO ITEMS C.68, 69, 70, 72, and 73. Work Program #C36045. RECEIVED AFTER SUBMITTAL DEADLINE, 7-26-16. REVISED 7-28-16

Refer to motion for approval under Agenda Item C.

72. Department of Tourism and Cultural Affairs - Museums and History - State Railroad Museums - FY 2017 - Addition of $469,000 in Transfer from Commission on Tourism to fund the development of construction documents to expand the visitor center at the Nevada State Railroad Museum in Boulder City. Requires Interim Finance approval since the amount added to the Nevada State Railroad Museum Boulder City Expansion category exceeds $75,000.

RELATES TO ITEMS C.68, 69, 70, 71, and 73. Work Program #C36050. RECEIVED AFTER SUBMITTAL DEADLINE, 7-26-16.

Refer to motion for approval under Agenda Item C.

73. Department of Tourism and Cultural Affairs - Nevada Arts Council - FY 2017 Addition of $267,254 in Transfer from Commission on Tourism to increase arts grants, create a traveling exhibition, fund the Nevada Arts Council's 50th anniversary celebration, and replace the phone system. Requires Interim Finance approval since the amount added to the Tourism Program Funding One Shot category exceeds $75,000. RELATES TO ITEMS C.68, 69, 70, 71, and 72. Work Program C36041. RECEIVED AFTER SUBMITTAL DEADLINE, 7-26-16.

Claudia Vecchio, Director, Department of Tourism and Cultural Affairs (DTCA), said, at the April 14, 2016, IFC meeting the Division of Tourism requested $2.5 million in incremental lodging tax funds for tourism marketing efforts. She said the IFC authorized $1.2 million for tourism marketing efforts, and asked the agency to consider allocating the remaining $1.3 million in lodging tax revenue to other agencies within the DTCA.

Ms. Vecchio said the DTCA always sought the best return on investment (ROI) when considering long-term and short-term investments. She said tourism marketing typically had the best ROI, which was why the department had requested to use the $2.5 million in lodging tax funds for marketing efforts. Ms. Vecchio said experts representing several agencies within the DTCA would provide the Committee insight into the programs that the $1.3 million would benefit, which would provide long-term and short-term ROI potential for the state.

Ms. Vecchio thanked the Committee for the $1.2 million approved at the April 14, 2016, IFC meeting. She said the agency was already realizing an ROI from the funds. She said the IFC authorized $650,000 in incremental television buy, which helped the Division of Tourism increase the overall spring/summer television gross rating points by 83 percent in Los Angeles and San Francisco, two of the most expensive markets in the nation. Ms. Vecchio said that was an improvement in the number of people that had viewed the television commercial. The division also increased airtime frequency in Los Angeles and San Francisco and included additional “day parts” on the early and late news. She said research indicated that the early and late news were the ideal times to reach target audiences.

Ms. Vecchio said $125,000 was authorized by the IFC for the Travel Nevada website development. She said the team had been working diligently to enhance the website, create a “landing page,” and integrate the Google Trekker program. Sydney Martinez, Art Director, Division of Tourism, utilized the Google Trekker camera system at 23 locations around the state. Ms. Vecchio said the

Google Trekker photos had been integrated on the Travel Nevada website. She said the funds also helped to provide updates to the Highway 50 landing page in honor of the 30th anniversary of the Highway 50, Loneliest Road designation.

Ms. Vecchio said $100,000 funded an international sales and marketing mission for staff and ten industry partners including Cesar’s Entertainment, Las Vegas Convention and Visitors Authority, Reno Sparks Visitors Authority, Wynn Encore, Papillon Helicopters, MGM Resorts International, Nevada Silver Trails, Pony Express Territory, Cowboy Country Territory, and the Reno Tahoe Territory. She said the group visited Paris, Amsterdam, Cologne and Dusseldorf to promote Nevada and new direct flights to Las Vegas. They also visited Stockholm, which Brand USA, a destination marketing organization, identified as a key burgeoning market. Ms. Vecchio added that 201 sales leads had been sent across the state. She offered to provide a full report to the Committee.

Ms. Vecchio said $50,000 was used to update the NVDTCA.org website, formally known as NevadaCulture.org. She said the website showcased the DTCA as a whole. She said ongoing website development and maintenance would be handled by D4 Advanced Media in Reno, Nevada.

Ms. Vecchio said $25,000 was applied toward the Highway 50, Loneliest Road, 30th Anniversary, and much had been accomplished with those funds. She said 42,000 I Survived Highway 50 passports were printed to be used by national and international travelers. She said the program was well received by visitors who could travel from Carson City, Nevada to Baker, Nevada on Highway 50. Along the way, visitors could have their passport stamped at various establishments. Inside the passport was a tear-out card that travelers could mail in to receive a lapel pin and an I Survived Highway 50 certificate signed by the Governor. Ms. Vecchio said the division also had t-shirts printed, so that its partners across the state could promote the Don’t Fence Me In slogan. Metal placards and window clings were also made available for establishments, so that travelers would know where to get their Highway 50 passports stamped. Lastly, new road signs had been installed along Highway 50 in partnership with the Nevada Department of Transportation to celebrate the 30th anniversary. Ms. Vecchio said the anniversary celebration of Highway 50 dovetailed with the 100th anniversary of the National Park Service, as well as the 30th anniversary of Great Basin National Park, which was located at the very end of Highway 50.

Ms. Vecchio said the IFC also approved $250,000 for the Rural Marketing grant, which was tremendously appreciated by the rural marketing partners. She said the money provided additional funding for 37 projects and locations including the Lake Tahoe Shakespeare Festival, Pershing County Chamber of Commerce, Tonopah, and Virginia City. Ms. Vecchio noted that there were some wonderful video projects taking place in Virginia City.

Ms. Vecchio said the expenditure of the $1.2 million allocated by the Committee at the April 14, 2016, IFC meeting showed the scope of the Division of Tourism. She said the division worked closely with six tourism territories across the state to promote not only Nevada’s iconic Las Vegas, but also the extraordinary rural destinations and experiences throughout the state. She said Nevada was competing on a global level with destinations such as Paris, London, Australia, Kenya and Machu Picchu for adventure-oriented visitors. Ms. Vecchio said it was expensive to compete in the global travel market, which was why the division was working closely with its partners across the state. She said those partners were counting on the Division of Tourism to ensure that lodging tax dollars were spent in the most effective way to urge travelers to visit all areas of Nevada.

Senator Roberson thanked the DTCA for its presentation. He asked how the DTCA determined the allocation of funds, of if the decision was primarily based on the best ROI.

Ms. Vecchio said there were a couple of ways the DTCA determined how to allocate the funds. She said the department worked with TNS, a research group that did a lot of work in the travel industry. She said TNS provided the DTCA with the origin of tourists traveling to Nevada, which allowed the agency to target areas such as Los Angeles, Sacramento, Salt Lake City and Phoenix. Ms. Vecchio said those key areas were determined by TNS based on inquiries that were derived from Division of Tourism advertising. To increase the short-term effectiveness of its marketing efforts, the Division of Tourism would continue to focus on those key markets, because there was a large population of people still interested in visiting Nevada. She said the division was also advertising in emerging markets such as Dallas and New York, because direct flights to Nevada had recently become available. Ms. Vecchio said the division was considering markets that would have a long-term future based on available flights to Nevada. She said, overall, recommendations were made to the Nevada Commission on Tourism based on research.

Senator Roberson said he appreciated the information. He represented the City of Henderson, which was the second largest city in the state, and there were limited funds being allocated to Henderson compared to many other parts of the state (Exhibit D). He hoped the DTCA would give the City of Henderson more consideration when allocating funds in the future, and Ms. Vecchio agreed. She said she would like to have Senator Roberson speak with various “fan troops” as they were brought to Nevada by the DTCA. She said there were two fan troops coming to Nevada for the annual Governor’s Global Tourism Summit. Ms. Vecchio said 60 buyers were brought in from around the world and would be stopping in Henderson. The department would be working closely with the Hilton Lake Las Vegas and other entities in Henderson. She said the buyers would be lodging in Henderson, so the DTCA would be showcasing the City of Henderson, in addition to a number of other locations, as the buyers made

32 their way from Las Vegas to Reno where the conference would take place. Ms. Vecchio noted the Governor’s Global Tourism Summit was held at the Hilton Lake Las Vegas in Henderson in 2015. She thought the City of Henderson was a great destination, and she hoped the DTCA would be able to show Senator Roberson how the department promoted the city.

Ms. Vecchio said the DTCA had intended to present work programs at the June 30, 2016, IFC meeting; however, the work programs were challenging and required the assistance of a number of staff. She introduced Sherry Rupert, Executive Director, Nevada Indian Commission; Peter Barton, Administrator, Division of Museums and History; Susan Boskoff, Administrator, Nevada Arts Council; and David Peterson, Chief Finance and Operations Officer, DTCA. She thanked Chris Chimits, Deputy Administrator, State Public Works Division, Janet Murphy, Deputy Director, Governor’s Finance Office, and the staff at the Budget Division, as well as the Governor’s Office, for their assistance with the work programs. Ms. Vecchio said the work programs were a multi-process, vetted series. She said it was important to remember that the funds were a one-time appropriation. Although it was reasonable to expect the tourism industry, especially the lodging sector, to continue to grow over the next several years, the funds were not guaranteed. The lodging tax dollars were opportunistic funds that needed to be allocated as such. Some of the recommendations for funding were the following:

• Enhance current programming, such as Nevada Arts Council grants, which would increase the number of grants available to Nevada artists; • Lay a foundation for much needed expansion of current properties, such as the Stewart Indian School and the Boulder City Railroad Museum Visitors Center; • Provide critical funds to ensure Nevada’s historical treasures were preserved for future generations; and • Celebrate Nevada’s most inventive artists and creative thinkers.

She said, ultimately, all of the programs would produce significant value through one-time allocations. Ms. Vecchio said she would allow the other DTCA staff to provide details about each of the work programs and share their insight with the Committee.

Vice Chair Kieckhefer asked agency staff to present each of the work programs individually.

Sherry Rupert, Executive Director, Nevada Indian Commission (NIC), said Work Program C36270 was a request to transfer $325,000 from the Nevada Commission on Tourism to assist in funding an expanded master plan for the NIC Stewart Facility, which would include an interpretive, marketing, and business/operations plan. Additionally, the requested dollars would fund the cost

33 of writing an application to have the Stewart Indian School designated as a national historic landmark, and to replace the outdated phone system at the NIC.

Ms. Rupert said during the 2015 Legislative Session the NIC was granted Capital Improvement Project (CIP) funding. The agency’s original CIP request included construction funds for Buildings 1 and 2 at the Stewart Facility for a cultural center and welcome center. She said the funding was not approved; however, planning funds were approved for the design and construction documents for the cultural center and welcome center. Subsequently, the agency was awarded a grant to fund the design and construction documents for the cultural center; therefore, the cultural center was removed from the CIP and the remaining funds were applied toward a master plan. Ms. Rupert noted that the funds received in the 2015 CIP were for different work than the work being proposed for the expanded master plan. She explained that the NIC realized that the master plan for the Stewart Indian School did not include several essential components including the interpretive plan, marketing study and business plan. Ms. Rupert said it was especially important to note that the master plan acted as an insurance policy by determining in advance what would be successful, rather than proceeding without a plan, which could cause the venture to fail. Ms. Rupert said the master plan would also determine the extent of the work and whether the NIC could afford the cost. Additionally, the master plan would help generate private funding, which was critical to the growth and viability of the project. Ms. Rupert stated that the master plan would aid the Legislature in its decision-making process.

Ms. Rupert said the agency had been working with the State Historic Preservation Office to complete its National Historic Landmarks application for the Stewart Indian School. She stated that the NIC received a letter of support from the Governor’s Office, which was included on page 91 in Volume II of the meeting packet (Exhibit C).

Ms. Rupert said in 1985, when the application was submitted to place the Stewart Indian School on the National Register of Historic Places, the National Park Service questioned the ownership of the land on which the Stewart Indian School was located. At that time, the state was going through ownership issues, because there were a couple different parties named as owners; however, she assured the Committee that the State of Nevada was the rightful owner of the Stewart Facility.

Ms. Rupert said the phone system at the NIC had not been replaced in more than 13 years. Based on current problems with the phone system, experts in the field indicated that the system could fail at any time.

Ms. Rupert reiterated that the funds were a one-time transfer that would allow the DTCA to move programs forward in a strategic manner that would be beneficial

34 for the state. She referenced a map from the landscape preservation plan that indicated the area being considered for the master plan (Exhibit E).

Vice Chair Kieckhefer asked why H&K Architecture would prepare the master plan rather than a company that specialized in business plan design.

Ms. Rupert replied that the NIC had an existing contract with H&K Architecture, which was the firm that prepared the design and construction documents for the cultural center. She said the NIC and SPWD discussed the idea of adding an endorsement to the H&K Architecture contract to give the firm the ability to subcontract for the business plan.

Vice Chair Kieckhefer asked if it was prudent to allow the architect to control that process. Ms. Rupert replied that H&K Architecture was the mechanism to have the business plan prepared; however, the NIC would be involved in every step of the process. She said the NIC knew the most about the facility and the vision moving forward.

Chris Chimits, Deputy Administrator, SPWD, said the preparation of the documents could be handled differently; however, he thought there was an advantage in terms of building consensus and communication. He said some of the components, such as the interpretive plan and the marketing study, could influence the architect’s plans and vice versa. He said it was an opportunity to collaborate, because the goal was to optimize the output.

Assemblyman Ohrenschall asked about the anticipated visitor volume when the projects were complete at the Stewart Indian School. Ms. Rupert replied that those details would be worked out in the marketing study and the business plan.

Assemblyman Ohrenschall asked about the current visitor volume at the Stewart Indian School.

Ms. Rupert replied that some tour groups consisted of as few as 20 to 30 students, but there were also larger groups with as many as 150 people originating from places such as Southern Nevada. She said when she began working at the NIC there were two to three tours per year, mostly school tours; however, the number of visitors had increased by over 100 percent, with approximately 1,500 students visiting per year.

In response to a question from Vice Chair Kieckhefer, Ms. Rupert replied that the agency was requesting $75,000 to fund the preparation of Building 4 for expansion of the NIC staff. She said the 2015 Legislature approved two positions, Museum Director and Curator, both of which would be housed in Building 4 after October 1, 2016.

Vice Chair Kieckhefer asked if the agency anticipated having available office space in Building 3 when the positions were approved.

Ms. Rupert replied that the agency originally intended to house the new employees in the cultural center; however, when CIP funding was denied, the agency had to seek alternate accommodations. She said the best option was to renovate a portion of Building 4 to house the two new employees. Ms. Rupert said the NIC staff were currently housed in the south end of Building 3 and there were two additional rooms in the north end of the building; however, one of the rooms currently contained the Stewart Indian School collections, and the other held all of the collateral materials for the Stewart Indian School and Nevada’s Indian Territory, the marketing arm of the NCOT that promoted Indian country tourism. She added that the two rooms lacked electrical outlets or the capability for Internet access, so the NIC would require funding to rewire that part of the building and find storage for the items that currently resided in those rooms.

Peter Barton, Administrator, Division of Museums and History, DTCA, said Work Programs C36045 and C36050 responded to mission, vision, and philosophical goals and long-standing chronic needs of the division. He said the great recession of the last decade had significant impacts on all state agencies, but in particular, the seven state museums. Budget reductions were severe and resulted in a reduction of the work force by 12 percent, followed by a reduction in work hours that ultimately reduced total staffing by 40 percent. He said public services were also impacted when the museums were only open four days per week instead of six or seven. Mr. Barton said recovery began in 2013 as work hours were restored, and with that, partial restoration of public services. The recovery continued with incremental restoration of staff in 2015 and increased public services. He said the public had responded positively, with increased overall program attendance by an average of 10 percent.

Mr. Barton said there was one area where the recovery had not been realized for the Division of Museums and History, and that was the ability to develop new infrastructure to meet public demand. He said the CIP had seen a monumental decline in new construction as limited bond capacity rightfully put a focus on maintaining current state assets versus new construction. In that environment, museums had been unable to secure funding for planning, design and new construction. Mr. Barton said the availability of lodging tax revenue through the DTCA afforded a unique, one-time opportunity to address the two most critical infrastructure needs identified in the division. More importantly, the funds would help advance museums rather than just maintaining current services. He said for the first time in over a decade the museums would be able to provide additional services to meet the demand.

Mr. Barton said the Indian Hills Curatorial Center was a ten-acre site located on East Topsy Lane in Carson City, Nevada. He said a 15,000 square foot storage facility was constructed at the site in 1980 to house historical and cultural

36 resource materials. The facility was now nearly 95 percent of capacity, which resulted in a more critical evaluation of everything the division collected. Mr. Barton said there were several stories in the media about 15 months ago regarding the conditions of some museum collections being stored at offsite locations that were not under the division’s control. He said, beginning in 2004, and in every biennial CIP since, the division had requested consideration for master site planning and design of additional facilities located in Indian Hills on property controlled by the division; however, limited availability of bond funding competing with other critical state infrastructure needs kept the needs of the division from being met. Mr. Barton said the Indian Hills Curatorial Center, in addition to housing the state’s own museum collections, held considerable collections for others, notably the Bureau of Land Management (BLM) and other federal agencies that must have a repository for cultural resource collections that result from various development activities occurring on federal lands in the State of Nevada. He said those collections were necessary to provide a more complete picture of Nevada’s past, from prehistoric times to the present.

Mr. Barton said Work Program C36045 sought to provide master site planning and schematic design for phase one, which would be a 20,000 square foot addition to the facility. The BLM provided $90,000 in federal funds toward phase one, and the work program requested an additional $126,000 in lodging tax revenue for the project, which would be managed by the SPWD through the established agency project program. He said the reason the division was seeking to plan and design a project absent capacity for the state to provide capital construction funding was to seek funding from outside stakeholders. Mr. Barton said the primary goal was to advance the concept for added state-of-the-art collection storage to enable the division to solicit to potential stakeholders to reduce the cost burden to the state. Therefore, it was important to have hard data concerning the appearance and available services of the facility, as well as the potential cost for stakeholders. He reiterated that the goal was to reduce the cost burden to the state and enlist stakeholders with an interest in the project to share the cost of the capital development. Mr. Barton said a master plan and design would demonstrate the concept, thereby increasing the chance to build successful partnerships. He said the same model was frequently used by the Nevada System of Higher Education to construct facilities.

Mr. Barton noted that several members of the Friends of the Nevada State Museum were available to provide testimony if there was an opportunity for public comment on the work program.

Assemblywoman Carlton said she had concerns about Agenda Items C-71 and C-72; however, she was more concerned with Agenda Item C-72 due to the advance planning documents.

Assemblywoman Carlton thanked the division for being proactive and bringing the item forward. She noted the Committee hoped to discuss the issue during the June 30, 2016, IFC meeting, and acknowledged that a lot of effort went into producing the work programs.

Assemblywoman Carlton said she was uncomfortable about using lodging tax revenue for advance planning, especially after the discussion during the April 14, 2016, IFC meeting about deferred needs within the DTCA over the past several years due to budget cuts. She said the Division of Museums and History suffered more than most state agencies during budget cuts, which was why the Committee was trying to restore the division back to its pre-recession level, so the division could move forward. Assemblywoman Carlton said, however, the deferred maintenance schedule had over $2.4 million in priority one estimated costs. She said the $2.4 million combined with the deferred maintenance costs for all of the DTCA was almost $10 million. She thought lodging tax revenue, as one-time expenditure funds, should be used to manage deferred maintenance issues. Assemblywoman Carlton said the state needed to address maintenance issues now to build on the future. She said building on a bad foundation would prevent progress. She said, unfortunately, deferred maintenance issues had been postponed during budget cuts.

Assemblywoman Carlton said she liked the projects and thought they had great potential; however, the timing was not appropriate, especially for advance planning projects. She said the lodging tax revenue was a significant amount of funds that could have a considerable impact on crumbling infrastructure, which needed to be addressed. She said the infrastructure issues did not involve health and safety concerns, but they were important issues nonetheless.

Mr. Barton agreed that deferred maintenance issues were a priority. He said the division worked closely with the SPWD, and the SPWD had repeatedly found ways to assist the Division of Museums and History. Mr. Barton said the division was due for its 2017 CIP hearings on August 24, 2016, and the division had prioritized maintenance items based on critical need. He said after 12 years of trying to make progress on the storage facility in Indian Hills in an effort to consolidate collections, house them in appropriate conditions, and continue to serve other agencies with critical storage needs for cultural resource materials, advance planning would allow the division to seek stakeholders to invest in the project. Mr. Barton said there were no firm commitments on capital construction participation, but there was a lot of sincere interest.

Vice Chair Kieckhefer said although he supported the division’s efforts, he was struggling with Agenda Items C-71 and C-72 much like Assemblywoman Carlton. He said, knowing the Executive Branch had denied the division’s requests multiple times, it would be difficult for the Committee to deny the division’s request. He noted the division’s work program request included advanced planning, but he also recognized that it was the state’s responsibility, as

38 custodians of the artifacts and documents, to take care of them in the appropriate manner. Vice Chair Kieckhefer said he shared Assemblywoman Carlton’s concerns about the potential long-term build out implications of the Boulder City Railroad Museum. He noted that the railroad museum was the fourth item on the division’s priority list for its upcoming CIP hearing, and Mr. Barton said that was correct.

Moving on to Agenda Item C-72, Mr. Barton said Work Program C36050 aligned with Work Program C36045 in the goal to provide a concept, develop a solid design and cost date it to enable innovative partnerships and funding.

Mr. Barton said the Boulder City Railroad Museum had seen phenomenal growth in a short period of time. He said the museum opened in 2001, and 1,600 people rode the historic train to Railroad Pass that year. By 2013, that number had grown to over 43,000. He said nearly every public program offered at the Nevada State Railroad Museum in Boulder City resulted in a sellout. Mr. Barton said there was continued growth potential for the Boulder City Railroad Museum due to the fact that the resident market exceeded 2 million, the transient market exceeded 42 million, and there was no competition for a similar experience within 150 miles. In addition, Interstate 11 was scheduled for completion in 2018, and the rail link between Boulder City and Las Vegas would be restored. He said, for the first time in 30 years, it would be possible to run passenger trains from Las Vegas to Boulder City, which was a game changer. While such an endeavor was years away, the reconnected rail link would provide immediate opportunities to expand the rail excursion and improve the visitor experience by traveling to the City of Henderson. Mr. Barton said in September 2014, the division and the Boulder City Railroad Museum brought together community leaders and elected officials for a train ride envisioning what the future of the museum might hold in terms of promoting tourism in Boulder City and Henderson.

Mr. Barton said when the Boulder City Railroad Museum was built it had no central point of visitor contact. He said there were currently three buildings, which included a ticket window, a small building for crew quarters, and a small retail store. However, there was not a structure to protect visitors from the elements. He said there was no centralized visitor experience. Mr. Barton said adding a modest visitors center would serve all visitor contact needs, provide retail space, and shelter visitors from the elements. He said, last year, the division and the SPWD collaborated on a vision for the new visitors center. The new visitors center would emulate the 1940s Las Vegas Depot in its design, look and feel in the art deco/modern period of architecture. He said the division also developed a site plan showing how visitors would access the site. The visitor experience would be relocated to another point on the property to provide a centralized visitor experience. Mr. Barton said the division and the SPWD explored alternate means of capital construction funding through private partnerships and lease purchase. The division thought the project would qualify under a lease purchase that would allow the division to generate sufficient

39 revenue to cover bond costs of construction. He said the division had a couple of meetings with the Governmental Facilities Development Services Group, which had a contract with the State of Nevada, and was developing public facilities using the lease purchase model. Mr. Barton said the division would like to continue that dialogue, however, funding the cost of design work was very difficult. He said bond providers did not like to fund the cost of design, because it was risky; therefore, having the design completed would provide the division an opportunity to advance the concept through the design phase and sell the project to prospective partners.

Mr. Barton introduced Larry Bender, Consultant, Economic Vitality Commission of the Boulder City Chamber of Commerce, and accomplished development officer.

Mr. Bender said, as a consultant for the Economic Vitality Commission, he was responsible for economic development in Boulder City, Nevada. He supported Work Program C36050, which requested allocation of funds for the Boulder City Railroad Museum. He said, although the railroad museum facilities and equipment were state-owned and operated, the project was extremely important to Boulder City and the City of Henderson. So important, in fact, that the Economic Vitality Commission had been working with state staff for over two years on the Boulder City Railroad Museum project. Mr. Bender said the project was important to Boulder City for many reasons, but the foremost reason was its relationship to the Interstate 11 project, which was currently under construction, with completion scheduled for 2018. He said Las Vegas and Phoenix were the two largest cities in the United States that were not connected by an interstate highway; however, when finished the Interstate 11 project would provide a four-lane limited access route, which would reduce traffic through Boulder City. He said that a study commissioned by Boulder City and conducted by CT Economics in 2014 stated that 34 percent of the traffic that currently passed through Boulder City would be eliminated in 2018. Mr. Bender said that was beneficial for travelers from Las Vegas to Phoenix; however, it would negatively impact many businesses in Boulder City. In turn, it had become the responsibility of the Economic Vitality Commission to address the situation by mitigating the adverse impact on businesses in the Boulder City community. To accomplish this, the Economic Vitality Commission was proactively working on a number of projects to replace the traffic and visitors that would be eliminated when Interstate 11 opened, which was why the Economic Vitality Commission had partnered with the state on its vision for a new museum campus. Mr. Bender said one positive aspect of the Interstate 11 project was the inclusion of a non-vehicular bridge over the interstate exclusively dedicated for train tracks, which would connect Boulder City to Henderson. He said the tracks had been paved over at U.S. Route 95 for decades, limiting the length and duration of the current train experience. The bridge would allow the train to travel from Boulder City to Henderson for the first time in many years, which would provide unlimited marketing opportunities that were currently unavailable due to the

40 train’s restricted length. Mr. Bender said new, quality facilities must be built in order to take advantage of those new opportunities and realize the substantial increase in ridership. To that end, Boulder City was not only a supporter of the project, but also a committed and eager contributor in the process, with the intention of being full partners in the process.

Mr. Bender said the museum campus included two distinct parts. The first part included onsite improvements, for which the state would be responsible. The second part included offsite improvements, for which Boulder City and the local community had taken the lead on. The offsite improvements included a new one-mile road leading to a parking lot. He said the road would be the spine of a linear park with a bicycle trail, wide sidewalks, interpretative signage, benches and shade structures throughout. Mr. Bender said the offsite improvements would also include a small, traditional park to accommodate families waiting to board the train, and an outdoor tiered learning element designed for small-group education. He said the linear park would connect the entire museum campus to the existing River Mountain Loop Trail System. He emphasized that Boulder City had taken the lead in finding sources of revenue needed for the offsite improvements. Mr. Bender said, to date, Boulder City had 1) convened a stakeholders meeting in September 2015 to introduce the museum campus to numerous prominent local public and private sector individuals who would be contacted in the future in tandem with fundraising efforts; 2) received cost estimates from Boulder City Public Works for the offsite improvements; and 3) coordinated multiple meetings with City of Henderson staff. He said the Economic Vitality Commission had prepared proposals, which would be submitted to several grant sources. The Economic Vitality Commission was also working with Clark County on a Southern Nevada Public Land Management Act application. Mr. Bender said preparations had begun for a formal fundraising campaign. Additionally, preliminary discussions had begun concerning a shuttle system that would transport visitors from the museum campus to shops and restaurants in downtown Boulder City, the Hoover Dam, and businesses in the City of Henderson.

Mr. Bender said the funding requested by the Division of Museums and History was extremely important, because it would help continue the partnership and momentum established between Boulder City and the state. In addition, the division would be one step closer to constructing quality facilities that were desperately needed to make the museum campus a major visitor attraction. Finally, it was essential for Boulder City businesses that were concerned about their future once the Interstate 11 project was complete.

Assemblyman O’Neill asked about the difference between the railroad museums in Carson City, Ely and Boulder City. He asked if the Carson City and Ely locations would be negatively impacted if funding was allocated to the Boulder City Railroad Museum.

Mr. Barton replied that the railroad had been an important part of Nevada’s development. He said there were a total of three railroad museums in the state, which was unique to Nevada. He explained that the Carson City museum focused on the overall state story, with an emphasis on Northern Nevada and the Virginia/Truckee Railroad. Mr. Barton said the Boulder City museum focused on how the railroad had supported the development of the Hoover Dam, Boulder City and Las Vegas. He noted that Las Vegas was originally established as a railroad community. The third museum, located in East Ely, focused on the importance of the railroad for the copper and extractive industries in Nevada over time. Mr. Barton said all three museums were integrated in the division’s strategic planning, so the funding allocated for the Boulder City museum would not be at the expense of the other railroad museums. He said the reason for allocating the funds to the Boulder City museum was due to the museum’s small size. He said the museum was designed small, because the state was unsure what the response would be from the public. Mr. Barton said the public response had been overwhelmingly positive and continued to grow, and the size of the museum made it difficult to address the public demand.

Assemblywoman Carlton addressed Assemblyman O’Neill’s question regarding deferred maintenance issues. She said the Carson City Railroad Museum, Jacobsen Interpretative Center, was high on the list on the deferred maintenance schedule. She said there were priority one estimated costs of $242,000, and priority two estimated costs of nearly $350,000 that could benefit from the lodging tax revenue. Assemblywoman Carlton said she wanted to ensure that Assemblyman O’Neill had that information as he evaluated the work program.

Senator Roberson said he supported the expansion of the Boulder City Railroad Museum, and he thought the division made a compelling case. Speaking for his colleagues, Senator Hardy and Assemblywoman Woodbury, who did not serve on the IFC, he thought both would be enthusiastically supportive of the project. Senator Roberson thought the Committee should move forward on Agenda Item C-72.

Vice Chair Kieckhefer said he was concerned about the uncertainty of long-term funding for the Boulder City Railroad Museum project. He questioned whether there would be a partnership between the state and Boulder City to use admission revenue to help fund the project. He recalled a similar issue with the Springs Preserve Valley Water District, which had not been successful. Vice Chair Kieckhefer asked when the division would present a proposal to the IFC to evaluate the fiscal reality of the project.

Mr. Barton replied that the planning process had just begun. The division had met with potential bond funders twice, primarily to discuss the information the bond funders would require concerning the project. He said the division had also met with SPWD management to discuss the project. The division was currently envisioning the new visitor experience, and taking into consideration the cost that

42 could be sustained in the current market, the higher operating costs associated with new and additional facilities, and the additional personnel and maintenance costs. He said the division would also need to ascertain whether the remainder of the funds would be enough to support the cost of construction. Mr. Barton said the division should have information available within the next 60 to 90 days.

Vice Chair Kieckhefer asked if the division would be presenting its proposal to the 2017 Legislature. Mr. Barton replied that with the budget constraints in terms of the “two times” cap, the division would more than likely submit its proposal to the 2019 Legislature instead of the 2017 Legislature. He explained that it would take a considerable amount of time to complete the design and raise funds for the project, which was the reason the division anticipated implementation in 2019.

Assemblyman Armstrong thought the current ticket sale revenue would not be enough to sustain the project. He asked if the division anticipated an increase in ticket prices.

Mr. Barton replied that new visitor experiences would be offered that would justify the increased costs. For example, the current train excursion was a 3.5 mile ride to Railroad Pass and back. The division anticipated lengthening the excursion to Henderson, which was approximately 5 miles. The new excursion would allow riders to exit the train and experience the City of Henderson before returning to Boulder City. Mr. Barton said there was also the possibility to work with a Class I railroad to allow occasional operations to and from Las Vegas. He said nothing was definite, but the potential was there to offer a variety of experiences such as dinner trains or evening trains, which would increase the revenue stream sufficiently to cover the additional costs of the facility and capital construction.

Assemblyman Edwards asked if the division would require additional capital investment for new trains if the service was expanded to Las Vegas. Mr. Barton replied that the current fleet would support the expansion to Henderson; however, the division would probably require additional capacity to expand to Las Vegas. He noted the division had proven itself to be resourceful in the past by restoring rundown equipment.

Assemblyman Silberkraus echoed Senator Roberson’s support of the project. He said the current experience at the Boulder City Railroad Museum seemed to be a draw for young families with events such as story time on the train. He agreed that expanding the train route to include two major destinations would draw more adults. Assemblyman Silberkraus asked if the division anticipated the need to substantially increase the number of trains.

Mr. Barton said that was correct. The division anticipated that various new themed experiences would cater to a broader audience demographic.

Susan Boskoff, Administrator, Nevada Arts Council (NAC), said she was pleased to work with such remarkable and experienced colleagues within the DTCA. She said the expenditure plan for the $267,254 of the one-time lodging tax funding was designed to enhance the NAC’s efforts to expand the arts and cultural programming available to all regions of the state, whether provided by the agency, partners or grantees. She said much of what the NAC supported today would fill museums and educational guidebooks in the future.

Ms. Boskoff said $207,254 would increase the FY 2017 Partners in Excellence and Arts Learning grant awards that had already been awarded. The grants supported innovative projects, arts learning activities and organizational support. She said 89 grantees would be thrilled to have their grant awards increased by 22 percent. Ms. Boskoff reminded the Committee that the grants were reviewed by out-of-state adjudicators in public meetings, which were broadcast on the Internet. She said grant applicants were invited to attend the meetings and learn from the comments made by specialists from around the country.

Ms. Boskoff said the NAC awarded $1.2 million in grants, which was the highest amount since 2009. She said the NAC would award $862,000 in annual grants in 2016. In FY 2016, the NAC awarded approximately 340 grants throughout the year, which included quarterly grants and rolling grants to accommodate the requests and needs from artists, organizations and public institutions across the state.

Ms. Boskoff said $14,000 would support a new traveling exhibition for the Nevada Touring Initiative. She said a traveling exhibition was similar to creating and curating a stationary museum exhibit. She said the NAC was still gathering information regarding traveling exhibits for FY 2016, but in FY 2015, the NAC installed traveling exhibits in 11 counties, which attracted 36,000 attendees. She noted the cost of attendance to view the traveling exhibits was free. Ms. Boskoff said the NAC collaborated with the Nevada Historical Society for the most recent traveling exhibit, Mountain Picassos: Basque Arborglyphs of the Great Basin. She said it was a fascinating exhibit that included carvings and drawings created by Basque sheepherders in the early 20th century in the forests of the Great Basin. Ms. Boskoff said that in addition to educational guides who travelled with the exhibits, funding was provided by the Nevada Humanities for speakers to visit all the exhibit host sites to share Nevada’s great Basque history and culture. She noted that a brochure regarding the exhibit was available on the NAC website (http://nac.nevadaculture.org).

Ms. Boskoff said a portion of the funding would also be used for a new exhibit called Making a Mark, which would be curated by Paul Baker Prindle, Director of the Sheppard Contemporary and University Galleries, University of Nevada Reno. The exhibit would feature artwork by Nevada artists exploring the art form of drawing. Ms. Boskoff thought it was inspirational that artists were still drawing in spite of the increased availability of technology. She said it was amazing to

44 watch an artist bring an idea to life by putting pen to paper. She said the NAC was excited about the Making a Mark traveling exhibition.

Ms. Boskoff said another portion of the funds would be used to purchase a new phone system for the NAC office in Carson City. The phone system currently in use by the NAC was inherited from the Department of Corrections in 2000, and it was failing. She said a new phone system would cost approximately $10,000.

Ms. Boskoff said, lastly, $41,000 would be used to commemorate the 50th anniversary of the NAC. She was thankful the Legislature established the Nevada State Council on the Arts 50 years ago. She said, Thelma Calhoun, who helped create the agency, served on the first Interim Finance Committee with James Springmeyer and one auditor. She noted that Ms. Calhoun had a wonderful history, and she had also been a working artist.

Ms. Boskoff said the 50th anniversary of the NAC would be acknowledged with a special recognition awards celebration, and an artist would be commissioned to create the awards. There would also be a video to document six decades of artists who received fellowships beginning with Jim McCormick up to the most recent recipient. She noted that the celebration was not a restoration of the Governor’s Arts Awards program, which was suspended during the recession. Ms. Boskoff said the anniversary was an important celebration that would be shared with grantees across the state in many ways, and the NAC welcomed input from Legislators. She noted that invitations to the 50th anniversary awards celebration would be mailed to legislators soon.

Ms. Boskoff said, included in 50th anniversary celebration would be the launch of the statewide poet laureate program. She said the NAC was collaborating with the Governor’s Office to restore this important program. Ms. Boskoff said the allocated funds would support the poet laureate’s activities at public gatherings and educational settings in communities across the state. She said the poet laureate program would tie into the NAC’s Poetry Out Loud program.

Assemblywoman Dickman recalled that the 2015 Legislature funded grant awards at a level higher than the Governor’s recommended budget. She asked why the NAC was requesting additional funds.

Ms. Boskoff replied that in 2009 the NAC awarded $1.2 million for projects in schools, public institutions and communities to support artists, educators and cultural institutions, which included museums and organizations in rural communities such as the Western Folklife Center, Pahrump Arts and Culture Commission, Dam Short Film Festival in Boulder City, and the City of Henderson’s cultural affairs district. Ms. Boskoff said the NAC was working to increase the amount of grant awards to the growing rural organizations, because it was important in providing quality of life for all communities, as well as local economic diversification. The rural arts organizations also worked closely with

45 school districts to provide arts education activities that had been eliminated from most schools. Additionally, the increasing grants for those organizations created a profile for the state that could be promoted through cultural tourism efforts. She remarked that cultural tourists were great visitors for Nevada. Ms. Boskoff said the NAC was working to increase its grant budgets after the 52 percent reduction that occurred during the recession. She said the grants ranged from very small amounts to amounts as high as $30,000, but that was considerably less than what was recommended by the adjudication panel. Ms. Boskoff said the additional 22 percent was a one-time appropriation, and then the grants would return to the level provided by the 2015 Legislature. She said the 2017 Legislature and future Legislatures would hear from grantees about how important the grant money was for their work. Ms. Boskoff reminded the Committee that nonprofit organizations followed a business model that served communities, and the state’s investment in the arts and cultural industry demonstrated a commitment to serve its citizens in the best possible way.

Senator Atkinson noted that the City of North Las Vegas was not included on the NAC’s list of organizations that would receive a portion of the one-time allocation of lodging tax revenue funds (Exhibit D). He said there were several Committee members who represented the City of North Las Vegas, which was the third or fourth largest city in Nevada.

Senator Atkinson asked for additional information concerning the 50th anniversary of the NAC.

Ms. Boskoff replied that the NAC was aware of the vitality and vibrancy of North Las Vegas. She said the Left of Center Art Gallery, which was listed in Las Vegas, was actually located in North Las Vegas. She said Vicki Richardson and the other staff at Left of Center Art Gallery had been instrumental in ensuring that the breadth of diversity of artists as well as the diverse population of Las Vegas were represented. Ms. Boskoff said every three years the NAC engaged in a strategic planning process as required by the National Endowment for the Arts. She said part of the process was to hold Arts Town meetings throughout the state. There were typically 20 to 30 communities that would request Arts Town meetings. Ms. Boskoff said several years ago Arts Town meetings were held in 13 communities in Nevada, including Las Vegas, North Las Vegas and Henderson. She said the NAC Community Arts Development staff was currently arranging Arts Town meetings in public forums and focus groups in approximately 20 communities, which would begin in Carson City, followed by Reno, the rural communities and then Las Vegas. Ms. Boskoff said she would ensure that Legislators representing North Las Vegas received an invitation to the next Arts Town meeting in that area. She noted that the previous meeting in North Las Vegas was a remarkable event. Ms. Boskoff said the NAC was presently working with groups in North Las Vegas to apply for rolling grants that were available for start-up organizations and public institutions that needed assistance. Those groups would be applying for a Nevada Circuit

Riders grant, which would provide a consultant to help prepare an arts and cultural plan. The groups would also be applying for Jackpot grants and Artist Residency Express grants. She said, overall, the NAC worked closely with North Las Vegas and Henderson.

Ms. Boskoff said the National Endowment for the Arts (NEA) was created in 1963. She said the NEA provided $12,000 to states without an established state arts agency for the development of one. She said through the “cultural delivery of services” the funds were transferred from the NEA at the federal level to the Western States Arts Federation at the regional level. From there the funds were distributed to state arts agencies that worked to develop local or community arts councils. Ms. Boskoff said the NAC, as a state arts agency, ensured there was communication at all levels, and helped to encourage people around the country to be involved in the arts as an artist, performer and/or patron.

Ms. Boskoff said she would provide Assemblyman Atkinson with information about the history of the NAC. Additionally, the NAC would reach out to Assemblyman Atkinson to assist with the planning of the 50th anniversary.

Vice Chair Kieckhefer called for a motion on Agenda Items C-69 through C-73. He said the Committee would vote on Agenda Item C-68 separately.

Senator Roberson asked for clarification.

Vice Chair Kieckhefer explained that Agenda Item C-68 was a request to transfer lodging tax revenue from the Tourism Development Fund to various DTCA agencies. Agenda Items C-69 through C-73 were work programs requesting authority to spend those funds. For example, Agenda Item C-69 requested $325,000 for the Nevada Indian Commission, Agenda Item C-70 requested $75,000 for the Stewart Indian School Living Legacy, Agenda Item C-71 requested funds for the expansion of the storage capacity for the Carson City State Museum, Agenda Item C-72 requested funds for the design to expand the Boulder City Railroad Museum, and Agenda Item C-73 requested funds for use by the NAC. He said the motion for Agenda Item C-68 would depend on whether the Committee approved the expenditure of all funds, as requested for Agenda Items C-69 through C-73.

Mr. Krmpotic clarified that the total amount of all the transfers would be approximately $1.3 million.

Senator Roberson said he was concerned, because some Committee members may not support all of the work program requests, which may influence his vote on some of the other issues depending on the outcome.

Vice Chair Kieckhefer explained that the Committee needed to determine how much funding would be allocated to the agencies to know how much to transfer

47 out of the Tourism Development Fund. He said the order of the vote would ensure that the amount to be transferred aligned with the amount authorized for expenditure.

Vice Chair Kieckhefer called for a motion to approve Agenda Items C-69 through C-73. ASSEMBLYMAN SILBERKRAUS MOVED TO APPROVE AGENDA ITEMS C-69 THROUGH C-73.

SENATOR ROBERSON SECONDED THE MOTION.

Assemblywoman Carlton said she supported a majority of the work programs; however, she wanted to know why at least $12 million in deferred maintenance issues had not been addressed. She said she could support Agenda Item C-71, because she understood there were storage concerns for museum collections. Assemblywoman Carlton said Agenda Item C-72, however, was a long-term project to develop a new museum, so the issue would be addressed during multiple legislative sessions in the future. She said new programs and projects were typically established during a legislative session, so that all legislators could provide input. Assemblywoman Carlton said she would oppose the motion if it remained as a block, because she thought committee members should have the opportunity to opine on each item individually. She thought the vote would misrepresent the will of the committee members, because some committee members may vote in favor of the motion even if they opposed one or more of the work programs. Assemblywoman Carlton added that it was poor public policy for the Committee to set precedence on advance planning dollars instead of maintenance dollars.

Ms. Vecchio replied that part of the delay in returning to the IFC was because the DTCA learned that lodging tax revenue could not be used for CIPs such as deferred maintenance issues; therefore, the agency determined it would be best to utilize funds in a way that would increase tourism.

Assemblyman Sprinkle thought it was inappropriate to hold some of the projects for one that may be controversial. He disagreed with being put in a position to vote against projects he supported, simply because all the work programs were grouped into a single motion. He thought the Committee should vote on each work program individually. If the motion remained as it was, Assemblyman Sprinkle said he would oppose it, even though it would upset him to vote against projects he supported.

Assemblyman Thompson agreed with the comments made by Assemblywoman Carlton and Assemblyman Sprinkle.

THE MOTION PASSED. (Assemblywoman Bustamante Adams, Assemblywoman Carlton, Assemblyman Ohrenschall, Assemblyman Sprinkle and Assemblyman Thompson opposed the motion. Assemblyman Oscarson was not present for the vote.)

ASSEMBLYMAN O’NEILL MOVED TO APPROVE AGENDA ITEM C-68.

SENATOR GOICOECHEA SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

74. Department of Corrections - Prison Medical Care - FY 2017 - Transfer of $353,415 from the Personnel Services category to the Professional Services category to fund contracted services for licensed healthcare professionals to provide the constitutionally required healthcare to inmates as projected through the first two quarters of FY 2017. Requires Interim Finance approval since the amount transferred to the Professional Services category exceeds $75,000. Work Program #C36429. RECEIVED AFTER SUBMITTAL DEADLINE, 7-29-16.

Refer to motion for approval under Agenda Item C.

75. Department of Corrections - Prison Medical Care - FY 2016 - Addition of $1,322 in Miscellaneous Revenue, $2,210 in Charges for Services, $6,143 in Reimbursement revenue and transfer of $3,000 from the Uniform Allowance category to the Personnel category, $5,073 from the In-State Travel category to the Personnel category, $7,868 $4,210 from the Inmate Driven Stale Claims category to the Personnel category, and $13,292 from the Professional Services category to the Personnel category, and $15,841 from the Inmate Driven category to the Personnel category to cover expenditures through the remainder of the fiscal year. Requires Interim Finance approval since the cumulative change to the Personnel category exceeds $75,000. Work Program #C36584. RECEIVED AFTER SUBMITTAL DEADLINE, 7-29-16. REVISED 8-5-16.

Refer to motion for approval under Agenda Item C.

76. Department of Health and Human Services - Health Care Financing and Policy - Administration - FY 2016 - Deletion of $170,000 in General Fund appropriations to support a contract to analyze and study Managed Care Organizations in FY 2017. Requires Interim Finance approval pursuant to Section 35 of Senate Bill 514 (2015 Legislative Session). RELATES TO

ITEM C.77. Work Program #C36670. RECEIVED AFTER SUBMITTAL DEADLINE, 8-1-16.

Refer to motion for approval under Agenda Item C.

77. Department of Health and Human Services - Health Care Financing and Policy - Administration - FY 2017 - Addition of $170,000 in General Fund appropriations and of federal Title XIX grant funds to support a contract to analyze and study Managed Care Organizations in FY 2017. Requires Interim Finance approval pursuant to Section 35 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C.76. Work Program #C36676. RECEIVED AFTER SUBMITTAL DEADLINE, 8-1-16.

Refer to motion for approval under Agenda Item C.

78. Office of the Governor - Nuclear Projects Office - FY 2016 - Deletion of $321,397 in General Fund appropriations to allow funding for the Yucca Mountain repository program in FY 2017. Requires Interim Finance approval pursuant to Section 35 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C. 79. Work Program #C36800. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Refer to motion for approval under Agenda Item C.

79. Office of the Governor - Nuclear Projects Office - FY 2017 - Addition of $321,397 in General Fund appropriations to allow funding for the Yucca Mountain repository program in FY 2017. Requires Interim Finance approval pursuant to Section 35 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C. 78. Work Program #C36819. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Refer to motion for approval under Agenda Item C.

80. Office of the Secretary of State - Secretary of State - FY 2016 - Deletion of $3,464,264 in General Fund appropriations to continue work on the Electronic Secretary of State software and hardware upgrades in FY 2017. Requires Interim Finance approval pursuant to Section 38 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C. 81. Work Program #C36827. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Refer to motion for approval under Agenda Item C.

81. Office of the Secretary of State - Secretary of State - FY 2017 - Addition of $3,464,264 in General Fund appropriations to continue work on the Electronic Secretary of State software and hardware upgrades in FY 2017. Requires Interim Finance approval pursuant to Section 38 of Senate Bill 514 (2015 Legislative

Session). RELATES TO ITEM C. 80. Work Program #C36787. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Refer to motion for approval under Agenda Item C.

82. Department of Administration – Director’s Office - Special Appropriations - FY 2016 - Deletion of $847,544 in General Fund appropriations to allow completion of the review of the state's financial and human resource business processes project in FY 2017. Requires Interim Finance approval pursuant to Section 43 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C. 83. Work Program #C36782. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Refer to testimony and motion for approval under Agenda Item C-83.

83. Department of Administration – Director’s Office - Special Appropriations - FY 2017 - Addition of $847,544 in General Fund appropriations to allow completion of the review of the state's financial and human resource business processes project in FY 2017. Requires Interim Finance approval pursuant to Section 43 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C. 82. Work Program #C36765. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Patrick Cates, Director, Department of Administration, asked if the Committee wanted an overview of the project.

Vice Chair Kieckhefer said the 2015 Legislature approved General Fund appropriations to allow completion of the review of the state’s financial and human resource business processes project. He asked the agency for the results of that review.

Mr. Cates introduced Zam Alidina, Contract Project Manager, who was also available for questions.

Mr. Cates said in 2014 a benchmark study was performed by The Hackett Group that reviewed the state’s business processes. The study found that the state could achieve significant efficiencies by updating its Enterprise Resource Planning (ERP) system (business systems), specifically the finance and human resource systems. He said Senate Bill (S.B.) 514 (2015) appropriated $1 million to perform a more in-depth study of the state’s business processes and to help the agency prepare a request for proposal (RFP) for an implementation project to replace the state’s aging Advantage, human resource, and finance systems, which were 20 years old. Mr. Cates said an executive committee was established to review the state’s business processes. He served on the committee along with the State Budget Director and the State Controller. Stakeholder groups for finance, purchasing, human resources and information

51 technology had been established with several state agencies. Mr. Alidina supervised a group that had been collecting business processes for all the participants. He said hundreds of processes had been identified, and the engineering piece had begun. He said, last month, two business analysts were added to assist with the project. Mr. Cates said the goal would be to use all the documentation and business process engineering to develop an RFP to implement a portion of the system, if funding was approved during the 2017 Legislative Session.

Mr. Cates said the executive committee agreed that implementation should be done in phases, because there was significant risk if all the systems were implemented simultaneously. He said, potentially, the first phase would be the state accounting system. If the 2017 Legislature approved funding for the first phase, then implementation would occur by the end of the following biennium. The next phase would be for the budgeting and procurement systems, with potential implementation the following biennium if approved by the 2019 Legislature. The last phase would be the human resource system, which would be implemented by the end of 2021 if approved by the Legislature. Mr. Cates said Mr. Alidina had extensive experience with business process system implementation, mostly recently with the State of Arizona. He said Arizona’s new system was implemented in phases, but the total cost of implementation was approximately $65 million.

Mr. Cates said in July 2016 the state’s information technology strategic planning committee reviewed technology project requests from agencies. Two items reviewed by the committee included projects from the Department of Administration Director’s Office for the new financial and procurement systems. He said the state’s current procurement processes were manually intensive. The procurement system was anticipated to cost less than the financial system, which was estimated at $15 million.

Mr. Cates said the executive committee was in the process of gathering the system requirements and performing analysis for the new business process systems. He said vendor demonstrations would be presented to the committee over the next couple of months. He said the Department of Administration Director’s Office would also be making a recommendation regarding new business process systems to the Governor’s Office for the 2017-19 biennium.

Assemblyman Armstrong asked how the system implementation would impact the budgeting process, including interfacing with legislative staff.

Mr. Cates replied that the budgeting piece presented to the 2019 Legislature would be implemented in two phases. He said interfaces would have to be created to link the financial system with the Nevada Executive Budget System (NEBS). He said NEBS would then be replaced in the following biennium. Mr. Cates said the executive committee was currently focusing on the finance

portion, so the committee was engaging heavily with the financial stakeholder group on their functionality. The committee was also meeting with the other stakeholder groups, such as budget and human resources, to discuss the interface with the financial system. He said there had been many discussions regarding the process of transferring the budget information to the Legislative Counsel Bureau.

Assemblyman Armstrong asked the agency to keep legislative staff informed of the progress.

ASSEMBLYMAN ARMSTRONG MOVED TO APPROVE AGENDA ITEMS C-82 AND C-83.

SENATOR ROBERSON SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

84. Department of Health and Human Services - Welfare and Supportive Services - Administration - FY 2016 - Deletion of $207,825 in General Fund appropriations for the enhancement of the health care reform Eligibility Engine Design, Development and Implementation project in FY 2017. Requires Interim Finance approval pursuant to Section 35 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C. 85. Work Program #C36808. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Refer to motion for approval under Agenda Item C.

85. Department of Health and Human Services - Welfare and Supportive Services - Administration - FY 2017 - Addition of $207,825 in General Fund appropriations and $1,853,546 in federal Title XIX grant funds and $106,519 in federal Nevada Check Up grant funds from FY 2016 for the enhancement of the health care reform Eligibility Engine Design, Development and Implementation project. Requires Interim Finance approval pursuant to Section 35 of Senate Bill 514 (2015 Legislative Session) RELATES TO ITEM C. 84. Work Program #C36625. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Refer to motion for approval under Agenda Item C.

86. Department of Conservation and Natural Resources - State Parks – FY 2016 - Deletion of $41,987 in General Fund appropriations to complete approved deferred maintenance projects in FY 2017. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C. 87. Work Program #C37091. RECEIVED AFTER SUBMITTAL DEADLINE, 8-16-16.

Refer to motion for approval under Agenda Item C.

87. Department of Conservation and Natural Resources - State Parks – FY 2017 - Addition of $41,987 in General Fund appropriations to complete approved FY 2016 deferred maintenance projects. Requires Interim Finance approval pursuant to Section 45 of Senate Bill 514 (2015 Legislative Session). RELATES TO ITEM C. 86. Work Program #C37025. RECEIVED AFTER SUBMITTAL DEADLINE, 8-16-16.

Refer to motion for approval under Agenda Item C.

88. Department of Business and Industry – Industrial Relations Division – FY 2017 - Addition of $69,618 in federal 21(d) Consultation Program grant funds and transfer $7,735 from the Las Vegas Centralization Relocation category to the 21(d) Consultation Program Funds category to purchase field equipment and items for marketing needs. Requires Interim Finance approval since the amount added to the 21(d) Consultation Program Funds category exceeds $75,000. Work Program #C36761. RECEIVED AFTER SUBMITTAL DEADLINE, 8-17-16.

Refer to motion for approval under Agenda Item C.

RECLASSIFICATIONS Agency/ Present Class Title, Proposed Class Title, Position Agency Account Class Code, Grade and Class Code, Grade and Number Number Salary Salary Office of the 030/1030 0086 Supervising Legal Program Officer 1 Attorney General - Secretary Code:07.649 Grade:31/10 Information Code:02.151 Grade:31/10 Employer Paid Retirement Technology Employer Paid $51,176.88 Retirement $51,176.88 Department of 407/3228 00018 Accounting Assistant 2 Personnel Technician 3 Health and Human Code:02.303 Grade: Code:07.532 Grade:29/01 Services – Welfare 25/01 Employee/Employer Paid and Supportive Employee/Employer Paid Retirement Services Retirement $36,540.00 $31,090.32 Department of 709/3186 0499 Supervisor, Professional Environmental Scientist 4 Conservation and Engineer Code:10.545 Grade:38/01 Natural Resources Code:06.207 Grade 42/01 Employee/Employer Paid Division of Employee/Employer Paid Retirement Environmental Retirement $53,431.16 Protection $63,830.16

Refer to motion for approval under Agenda Item C.

D. STATEMENT OF CONTINGENCY ACCOUNT BALANCE.

Mark Krmpotic, Senate Fiscal Analyst, Fiscal Analysis Division, LCB, said there were no Contingency Account requests before the Committee. He said the current balance of

54 the unrestricted portion of the General Fund was approximately $12.3 million. The balance of the unrestricted portion of the Highway Fund was approximately $1.7 million. He said the balance of the restricted portion of the General Fund was $19 million. Mr. Krmpotic said staff would have a better indication of the total reversions to the Contingency Account at the October 25, 2016, IFC meeting, which may increase the unrestricted General Fund balance.

E. REQUEST FOR ALLOCATION FROM THE IFC CONTINGENCY ACCOUNT (GENERAL FUND) PURSUANT TO NRS 353.268 (Note: IFC may approve a different amount for an allocation than the amount requested) – Department of Motor Vehicles – Request for an allocation of $198,000 to purchase an additional server to provide voter data and signatures to the Secretary of State and County Clerk offices. WITHDRAWN 8-4-16.

F. REQUEST FOR EXTENSION OF REVERSION DATE FOR PREVIOUS ALLOCATION FROM THE IFC CONTINGENCY ACCOUNT (GENERAL FUND) PURSUANT TO NRS 353.268 – Department of Motor Vehicles – Field Services - Request for an extension of the reversion date of the Contingency Account allocation approved on April 14, 2016, for new voter registration forms to bring the agency into compliance with the National Voter Registration Act. RECEIVED AFTER SUBMITTAL DEADLINE, 8-5-16.

Terri Albertson, Director, Department of Motor Vehicles (DMV), said the department was requesting to balance forward funds that were previously approved by the IFC, so the department could purchase the motor voter registration forms for its offices that were compliant with the National Voter Registration Act. She said sample forms were currently being tested by all of the parties. The DMV hoped to have the forms approved within a week and available in DMV offices by the end of September.

ASSEMBLYWOMAN DICKMAN MOVED TO APPROVE AGENDA ITEM F.

SENATOR SETTELMEYER SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY. (Assemblyman Oscarson was not present for the vote.)

G. INFORMATIONAL ITEMS.

The Committee expressed interest in hearing testimony on the following items: Agenda Item G-6, Department of Employment, Training and Rehabilitation; and Agenda Item G-11, Department of Transportation.

Vice Chair Kieckhefer requested further testimony on Agenda Item 3b, Office of the State Treasurer.

Assemblyman Thompson requested further testimony on Agenda Item G-4c, Department of Administration, State Public Works Division.

1. GOVERNOR’S FINANCE OFFICE – Budget Division – Quarterly report of the agency activity relating to contracting with current or former employees of the state, for the periods ending March 31, 2016, and June 30, 2016, pursuant to NRS 333.705(5).

There was no discussion on this item.

2. OFFICE OF THE SECRETARY OF STATE – Semiannual report on the progress of the eSoS replacement project for the period ending June 30, 2016 (letter of intent, 2015 Legislature).

There was no discussion on this item.

3. OFFICE OF STATE TREASURER a) Report on estimated amount of proceeds of the ad valorem taxes levied for FY 2017 pursuant to A.B. 491, Section 31.1 (2015 Legislature).

There was no discussion on this item.

b) Report to verify the sufficiency of the Bond Interest and Redemption Fund to meet the obligations of the State of Nevada pursuant to A.B. 491, Section 31.3 (2015 Legislature).

Vice Chair Kieckhefer said the Legislature had heard about property taxes from the local governments, and thought it was important to understand the impact that it might have on the state and the state’s ability to pay and issue new debt. He asked the agency for a summary regarding the state’s outlook.

Lori Chatwood, Deputy State Treasurer, Office of the State Treasurer, said the Office of the State Treasurer was responsible for informing the IFC whether reserves from the General Fund would be required to pay the state’s debt in FY 2017 (A.B. 491, Section 31, 2015 Legislature). She said the Office of the State Treasurer would not be requesting General Funds to pay the debt, because revenue and reserves would provide sufficient funds. She said the Office of the State Treasurer had not requested reserves from the General Fund, therefore, no funds were due for repayment.

Ms. Chatwood said the Bond Interest and Redemption Fund was sufficient to pay the state’s debt. She said the Office of the State Treasurer had begun its analysis to determine the state’s affordability. She reminded the Committee that the state reduced its CIP during the recession, because the amount of property tax revenue received declined by 30 percent; yet, the Office of the

State Treasurer was able to pay the existing debt using reserve funds, and without the assistance of General Funds. Ms. Chatwood said she had been questioned whether the property tax rate allocation of 0.17 cents per $100 of assessed valuation would be sufficient to pay for current debt. She said the Office of the State Treasurer had levelized the debt portfolio through refundings and savings, and based on FY 2016 fourth quarter revenue, it was confirmed that the 0.17 cent property tax rate allocation for FY 2016 was more than sufficient to meet the state’s debt obligations. As a result, Ms. Chatwood said the state was approximately $6 million in the positive.

Ms. Chatwood said the debt affordability was not as positive. She said the Office of the State Treasurer reserved funding in the state’s portfolio for three to four biennia to avoid a “peak and valley” CIP, as was previously the case. She said, originally, the agency would not have been able to bring CIP bonding affordability forward until 2019 and 2020; however, the Office of the State Treasurer was able to bring CIP bonding affordability forward in each of the last two legislative sessions. Ms. Chatwood indicated that the CIP bonding affordability for the 2017 Legislative Session would be at least $50 million; however, she hoped the amount would be higher. She said bonding affordability was based on year-over-year revenue. For example, $1 million in funding would produce $10 million of bonding if the funding was consistent over a 20 year period; therefore, a continued revenue source was necessary. Ms. Chatwood said the state currently had an increased assessment of taxes, but the state could not capture the revenue because of abatements. She said, in preliminary meetings with the Legislative Counsel Bureau, the Governor’s Finance Office, and the Department of Taxation, the state was facing a flat revenue amount from the assessed value of property taxes for its affordability. Ms. Chatwood said the flat revenue would allow the Office of the State Treasurer to deliver the previous amount of bonding affordability, but without growth, it would be difficult to increase the amount.

Vice Chair Kieckhefer asked if the bonding affordability for CIPs in the 2017 Legislative Session would be half of the amount available in the 2015 Legislative Session.

Ms. Chatwood replied that she was not yet prepared to estimate the bonding affordability that low. She said the Office of the State Treasurer used estimates that the committee came forward with for the revenue. She said the collected property tax revenues were approximately $6 million higher than the state’s debt service in FY 2016, so the Office of the State Treasurer would have a higher flat base to work with, but the anticipated bonding affordability growth would not be as high in the next few years. Ms. Chatwood reiterated that the estimated bonding affordability for CIPs in the 2017 Legislative Session would be at least $50 million.

Vice Chair Kieckhefer said the state’s anticipated tax revenue for FY 2017 would not be sufficient to meet the state’s debt obligations, so the state would have to utilize reserve funds to meet the obligation. Ms. Chatwood said that was correct based on the model used by the Office of the State Treasurer; however, if the state experienced revenue recovery again in FY 2017, then it would be possible to meet the state’s debt obligations without using reserves. If necessary, there were sufficient reserve funds; therefore, the Office of the State Treasurer would not require the use of General Funds.

4. DEPARTMENT OF ADMINISTRATION a) Director’s Office – Merit Award Board – Report summarizing rejected employee suggestions, adopted employee suggestions and any required legislation needed before an employee suggestion may be adopted, pursuant to NRS 285.060(3)(d).

There was no discussion on this item.

b) Enterprise Information Technology Services 1) Report on the methodology for billing the UNIX cost pool (letter of intent, 2015 Legislature). 2) Report on the payback of General Fund and Highway Fund appropriations in the amount of $6,000,000 for the replacement of existing state-owned microwave communications system (letter of intent, 2015 Legislature). 3) Report on the upgrading of the state core telephone system (letter of intent, 2015 Legislature). 4) Report of the billing model, including the division’s standard cost pools, specialized IT services for Department of Public Safety and analysis of cost pools (letter of intent, 2015 Legislature).

There was no discussion on these items.

c) State Public Works Division – Report on Veterans with Service-Connected Disabilities Bidders’ Preference pursuant to NRS 338.13846.

Assemblyman Thompson said, although the state wanted to give bidders’ preference to local businesses owned by veterans with service-connected disabilities, zero awards had occurred in the past two years (page 329, Exhibit C). He asked how many local businesses owned by veterans with service-connected disabilities were in the state. Also, he asked what efforts were being made by the State Public Works Division (SPWD) to encourage veterans with service-connected disabilities to bid on contracts, and to ensure there was competition for projects.

Gus Nunez, Administrator, State Public Works Division, replied that a total of five contractors had applied under the provisions for local businesses owned by veterans with service-connected disabilities. Each contractor qualified for

58 various amounts ranging from $100,000 to $3 million depending on their bonding capacity. With respect to outreach, he said the project manager contacted each qualified company to inform them of upcoming bids. Mr. Nunez said, to date, the SPWD had not received any proposals or bids from any of the five qualified companies.

In response to a question from Assemblyman Thompson, Mr. Nunez replied that the SPWD had received applications from five contractors that qualified as a business owned by a veteran with a service-connected disability. He said the qualified companies were listed on the SPWD’s website. Mr. Nunez said from January 1, 2016, to June 30, 2016, there were 30 qualifying projects totaling $346,000; however, the SPWD did not receive bids or informal proposals from any of the five contractors.

Assemblyman Thompson said it was incumbent upon the state to determine why veterans with service-connected disabilities were not bidding on contracts. He said there were five qualified contractors in the program; however, he wanted to know how many more businesses owned by veterans with service-connected disabilities also qualified for the program. He said competition was important for the program. He asked the agency to provide information regarding the number of local businesses owned by veterans with service-connected disabilities throughout Nevada.

Mr. Nunez said the SPWD could provide whatever information the Committee requested with respect to the five qualified contractors. He said the division had not investigated why the five known entities had not taken advantage of any of the bidding opportunities. He said the 30 projects mentioned previously would not have required the contractors to post a bond, the only requirement was a license and insurance. Mr. Nunez noted that if any of the five contractors had been the low bidder within 5 percent on any of the projects then the contract would have been awarded to them.

Assemblyman Thompson asked the agency to also provide information regarding why the five known entities had not submitted bids for any projects over the past two fiscal years.

Assemblywoman Bustamante Adams said she appreciated Assemblyman Thompson’s questions, because the reports provided by the SPWD regularly indicated that zero contracts were awarded to local businesses owned by veterans with service-connected disabilities, and the trend could not be allowed to continue. It was critical to know why qualified contractors were not bidding on projects, and why there was not a larger pool of qualified contractors. Assemblywoman Bustamante Adams noted the veteran community was important to the Legislature.

Senator Spearman asked if the SPWD had collaborated with the Veterans Service Commission. She recommended that the division collaborate with veterans’ reintegration services that were available in many communities. She said veteran business owners with service-connected disabilities may not fully understand the benefits of the bidders’ preference program. Senator Spearman said if veterans were not ready to participate in the program then the state should provide assistance to help them become prepared. She said there were several organizations that offered training to veterans for various jobs. She asked if a database had been established, so that as bidding opportunities became available, the SPWD could contact those training organizations. Also, she asked if the division had thought about how the state could help veteran business owners become more prepared to bid on projects as opportunities arose. Senator Spearman thought the trend could be reversed if those questions were answered.

Mr. Nunez said the division had not considered assisting veterans become more prepared to bid on projects. He reiterated that the SPWD project manager contacted the five known entities as bidding opportunities became available. He said the division could inquire with the companies about why they were not bidding on projects. With regard to outreach efforts, Mr. Nunez indicated that GOED performed outreach to small businesses at events such as job fairs using funds devoted for that purpose. He said the SPWD participated in those events with GOED; however, the division was not in a position to perform outreach beyond that. He said he would contact Kat Miller, Director, Department of Veterans’ Services, to determine the number of local businesses owned by veterans with service-connected disabilities throughout Nevada. Mr. Nunez said, subsequently, the division could use the information provided by Ms. Miller to reach out to qualified veterans.

Senator Spearman said she was on the Veterans Service Commission two years ago. She said the commission was regularly in touch with personnel organizations at places such as Nellis Air Force Base. She said the SPWD’s bidders’ preference program was similar to that of the Army Corps of Engineers. She said military personnel who were discharged or retired from service already had a skill set, they just required additional assistance to establish a small business. Senator Spearman said she had worked with Ms. Miller at the Department of Veterans’ Services, and resources were available. She said there were approximately 300,000 veterans in Nevada who may qualify for the program, so it was possible to build a database that exceeded five qualified contractors.

Mr. Nunez thanked Senator Spearman for her suggestions. He said the division would consider her recommendations. He said the division could provide information to local veterans groups about qualifying for the program.

In response to a question from Assemblyman Edwards, Mr. Nunez said the report from the SPWD concerning bidders’ preference only applied to businesses owned by veterans with service-connected disabilities. He said veteran-owned businesses may be bidding on projects; however, the bidders’ preference program was specifically aimed at businesses owned by veterans with service-connected disabilities.

5. DEPARTMENT OF HEALTH AND HUMAN SERVICES a) Division of Health Care Financing and Policy – Quarterly report on the Disproportionate Share Hospital Supplemental Payment Program for the periods ending March 31, 2016, and June 30, 2016, pursuant to NRS 422.390. b) Division of Public and Behavioral Health – Behavioral Health Prevention and Treatment – Quarterly report on the maintenance of effort requirements for the federal Substance Abuse Prevention and Treatment block grant funds for FY 2015 and FY 2016 for the period ending March 31, 2016 (letter of intent, 2015 Legislature). c) Child and Family Services – Notice to increase four 0.51 FTE positions to 1.00 FTE. This results in a net increase of 1.96 in the total FTE count.

There was no discussion on these items.

6. DEPARTMENT OF EMPLOYMENT, TRAINING AND REHABILITATION – Response to request for information from the February 11, 2016, Interim Finance Committee meeting regarding the progress of the division’s work as a result of the development of the Management and Administrative Support Services (MASS) unit.

Renee Olson, Administrator, Employment Security Division (ESD), DETR, said Agenda Item G-6 was a follow up from the February 11, 2016, IFC meeting regarding position reclassifications.

Ms. Olson said the Department of Labor set numerous performance requirements for the ESD. She said the division had not met its performance marker on several items; however, since that time, 9 issues within the Unemployment Insurance program had been corrected. She said there was 1 performance issue from the Veterans’ Employment and Training program that had been corrected, and the ESD was currently meeting and exceeding that performance marker. Ms. Olson said approximately 12 issues remained, which the division was working diligently to correct.

Ms. Olson said the ESD recruited one Management Analyst 2, who started with the division on June 13, 2016. She said the new Management Analyst was working diligently to understand the complicated nature of the division’s programs while completing job assignments at the same time. She said the other two positions, a Management Analyst 1 and another Management Analyst 2,

remained vacant. Ms. Olson noted the division had pursued recruitments on the positions a couple of times.

Vice Chair Kieckhefer asked if the vacant positions had hindered the Management and Administration Support Services (MASS) unit’s ability to meet its goals.

Ms. Olson replied that it had been very difficult to meet the goals of the MASS unit, but existing staff was working overtime to meet those objectives. She said the lack of staff hampered Ms. Olson’s ability to assign permanent tasks and begin the appropriate training; therefore, she was focusing on prioritizing assignments. Ms. Olson said, in addition, the unit had been focusing on agency budget requests, which had been time consuming for staff.

In response to a question from Vice Chair Kieckhefer, Ms. Olson replied that she recently requested a new recruitment for the Management Analyst series. The previous recruitment was outdated and many people on the list were no longer available. She hoped the new recruitment would produce another qualified batch of candidates; however, it was difficult to predict the outcome.

Assemblyman Armstrong commended the ESD for correcting many of its performance issues. He asked about the timeline for resolving the remaining issues. Ms. Olson replied that she did not have a specific timeline for correcting the performance issues. The ESD was constantly striving to improve its performance markers. She said the corrective action plans were put in place over the course of a year. Ms. Olson said the division provided quarterly performance reports to the federal government. She said some of the issues were due to reporting errors in the system, and the ESD was working with IT staff to correct those matters as well. Ms. Olson said she would follow up with the Committee with more specific timelines.

7. DEPARTMENT OF MOTOR VEHICLES – Field Services – Notice to increase an existing DMV Services Technician from a 0.51 FTE to 1.0 FTE.

There was no discussion on this item.

8. DEPARTMENT OF PUBLIC SAFETY a) Parole and Probation 1) Quarterly reports on the status of the agency’s pre-sentence investigations backlog for the period ending March 31, 2016, and June 30, 2016 (letter of intent, 2015 Legislature). 2) Semiannual report on the number of offenders in the Low-Risk Supervision (LRS) unit by category of offense and the number of officers and other personnel assigned to manage LRS for the period ending June 30, 2016 (letter of intent, 2015 Legislature).

3) Notice to increase a Parole and Probation Specialist from 0.49 FTE to a 1.0 FTE. b) Division of Emergency Management – Emergency Assistance Account – Quarterly reports on the status of the Emergency Assistance Account for the periods ending March 31, 2016, and June 30, 2016, pursuant to NRS 414.135(5).

There was no discussion on these items.

9. NEVADA DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES – Division of State Lands – Semiannual report on the status of the state’s Environmental Improvement Program (EIP)/Fund to Protect the Lake Tahoe Basin (FPLTB) for the period ending June 30, 2016, pursuant to Chapter 514, Statutes of Nevada 1999.

There was no discussion on this item.

10. DEPARTMENT OF WILDLIFE – Notice to add one new FTE due to workload needs. This results in an increase from 45.0 FTE to 46.0 FTE.

There was no discussion on this item.

11. DEPARTMENT OF TRANSPORTATION - Report on the activities of the Advisory Committee on Transportational Stormwater Management and the implementation and efficacy of the department’s stormwater program pursuant to S.B. 324, Section 10.3 (2015 Legislature).

Dave Gaskin, Deputy Director, Nevada Department of Transportation (NDOT), introduced Rudy Malfabon, Director, NDOT. Mr. Gaskin referred the Committee to the department’s presentation on page 405 in Volume II of the meeting packet (Exhibit C).

Mr. Gaskin said that in 2011 NDOT was audited by the U.S. Environmental Protection Agency (EPA) and certain elements of the department’s stormwater program were found to be inadequate. The department, in conjunction with the Nevada Division of Environmental Protection (NDEP) and the Governor’s Office, submitted a bill draft request for the 2015 Legislative Session to request the resources and authority necessary to correct the issues. The department also submitted a budget amendment during the 2015 Legislative Session for funding to build a fully compliant stormwater program, which was approved by the 2015 Legislature. Mr. Gaskin said Senate Bill (S.B.) 324 (2015) gave NDOT the enforcement authority to prevent unauthorized discharges relating to stormwater on state highways, rights-of-ways and conveyance systems. He said NRS 408 was recently codified to incorporate the changes from S.B. 324.

Mr. Gaskin said NDOT had been working with the U.S. EPA and NDEP since 2011 to implement a stormwater program that would meet the Clean Water Act requirements. He said NDOT reached a settlement agreement with the U.S. EPA and NDEP after meeting with the U.S. EPA to refine the legal terms. He said the Board of Examiners approved the settlement terms on July 12, 2016, and the consent decree was subsequently lodged with the district court on July 28, 2016, and posted in the federal register on August 3, 2016. Mr. Gaskin said the department anticipated the consent decree would become effective around mid-September 2016, which would begin the timeline to meet the requirements of the decree.

Mr. Gaskin said 80 percent of the staff for the stormwater program had been hired, including Alan Tinney, Division Chief. He said there were approximately 30 positions in the field, including compliance and maintenance. The districts were nearly 100 percent staffed. Mr. Gaskin said the department continued the recruitment process for several outstanding positions.

Mr. Gaskin said multiple pieces of equipment were approved during the 2015 Legislative Session, including culvert cleaners and sweepers. He said all of the equipment for FY 2016 had been received with the exception of a couple of sweepers. He said the department was in the process of ordering equipment for FY 2017.

Mr. Gaskin referred the Committee to page 410 in Volume II of the meeting packet (Exhibit C), which listed the elements of the consent decree in terms of program development. He said the following items were included in the consent decree, many of which had required timeframes for completion.

• Stormwater Management Plan • Annual Report • Public Stormwater Education Program • Employee Training • Construction Site Runoff Control Program • Post-Construction Stormwater Management Program • Illicit Discharge Detection and Elimination • Maintenance Facilities • Operations and Maintenance Program

Mr. Gaskin said the technology implementation was unique to the settlement agreement. He said the U.S. EPA required that all stormwater components in the state be mapped electronically and linked together in a database in order to be interconnected with the operation and maintenance programs and inspections. He said there were many components involved, which required significant effort from the department; however, the mapping process was nearly complete.

Mr. Gaskin said Senate Bill 324 (2015) established the Advisory Committee on Transportational Stormwater Management (ACTSWM), which had met quarterly throughout the year. He said the committee’s focus was the implementation and efficacy of the stormwater program. Mr. Gaskin noted the next meeting of the ACTSWM was scheduled for September 14, 2016.

Mr. Gaskin referred the Committee to page 413 in Volume II of the meeting packet (Exhibit C), which highlighted the stormwater program’s website and outreach efforts. He said the website and outreach efforts were a large part of the stormwater program and included public education, awareness, and information for NDOT staff, state agencies and the public. He said the stormwater program had its own website, which included frequently asked questions, contact information, and reports concerning illicit discharges. Mr. Gaskin said there was a prominent link to the stormwater program on the NDOT website.

Mr. Gaskin said, overall, NDOT was developing a dedicated stormwater program that would focus on meeting and exceeding the stormwater provisions of the Clean Water Act.

Assemblywoman Titus thanked the department for its presentation. She remarked that a tremendous amount of progress had been made since the last presentation. She asked if NDOT was current on the requirements and goals set by the U.S. EPA.

Mr. Gaskin replied that the U.S. EPA was pleased with the progress made by the department. He said the consent decree was not yet effective; however, a significant amount of progress had been made on the items outlined in the decree, and some items were already complete.

Assemblyman Thompson commended the department for its recruitment progress. He asked NDOT to describe its outreach efforts beyond the traditional methods of social media, events and presentations. He said there may be individuals who do not use social media that would be excellent staff for the stormwater program.

Mr. Gaskin replied that the stormwater program had established a non-bureaucratic webpage called Love NV Waters that was not NDOT-specific. He said the website focused on general water quality programs and meetings with the public.

Assemblyman Thompson asked what outreach efforts were being made to reach individuals without access to the Internet, such as interaction with various community groups.

Mr. Gaskin said NDOT typically had a booth at events such as Earth Day and the Tahoe Summit. The department also partnered with the Stormwater Quality Management Committee, which was a group consisting of all the stormwater programs in Southern Nevada. He said the department also coordinated with other agencies that performed similar roles to assist with their outreach functions.

Assemblyman Thompson recommended that NDOT consider less traditional outreach recruitment methods, such as reaching out to faith-based and nonprofit groups in various communities.

Assemblyman Wheeler said the state faced some significant fines from the U.S. EPA for non-compliance. He asked if there was a monetary settlement included in the agreement.

Mr. Gaskin said some states had been fined millions of dollars for stormwater programs that were recalcitrant, and NDOT wanted to avoid a similar fine. He said, through the approval of the budget amendment and passage of S.B. 324 (2015), the State of Nevada demonstrated its willingness to respond to the results of the audit and a desire to build a strong stormwater program. Mr. Gaskin said the total penalty for Nevada was $120,000, which would be distributed equally between the U.S. EPA and NDEP.

Vice Chair Kieckhefer said the 2015 Legislature approved 68 positions, 17 of which were vacant positions that would be reclassified. He asked why only 3 of the 17 positions had been reclassified.

Mr. Malfabon replied that some of the positions that had been vacant for more than a year were in the process of being reclassified through the Division of Human Resource Management (DHRM). He said other positions were in the recruitment stage. He said NDOT was working to fill all of the positions in the stormwater program. Mr. Malfabon said NDOT still required some of the vacant positions to remain in their original role, and the department was working to fill those positions. He said some of the positions were used to address federal aid programs to avoid putting federal funds at risk. Mr. Malfabon said NDOT would continue repurposing positions.

Vice Chair Kieckhefer asked if the stormwater program required fewer than 68 positions.

Mr. Malfabon replied that NDOT was concentrating on the program management level, but Mr. Gaskin had identified the priority positions that were necessary for the stormwater program. He said vacant positions would be repurposed toward that effort. Mr. Malfabon said 68 positions were originally estimated to be needed for the program, but he was not certain all of those positions would be required. He said NDOT would support the stormwater program to the best of its ability without removing positions from NDOT that were still necessary. He said

NDOT would not put federal funds at risk, such as the funds provided for the Americans with Disabilities Act program. He said many of the positions were leadership positions within the NDOT planning program, which were recently filled. Mr. Malfabon said NDOT was thoughtfully selecting positions that could transfer to the stormwater program. He said the department was selecting positions based on prioritization, and with the input of Mr. Gaskin and Mr. Tinney concerning the most critical positions needed for the stormwater program. Mr. Malfabon said NDOT had limited positions to work with, because of the need to maintain and fill some vacant positions in their current role.

Vice Chair Kieckhefer said the 2015 Legislature approved 68 positions, 17 of which were identified as vacant positions that could be reclassified. He was concerned that NDOT was going to request additional positions during the 2017 Legislative Session to complete the stormwater program.

Mr. Malfabon replied that NDOT did not plan to request additional positions for the stormwater program. He said vacant NDOT positions would be used for the program.

Assemblyman Ohrenschall said he and Assemblywoman Carlton lived in an older area on the east side of Las Vegas where there were many state routes such as East Charleston Boulevard, East Sahara Avenue, and Nellis Boulevard, which were dangerous to drive during flash floods. He noted that just recently there was terrible flooding in Southern Nevada. He asked when improvements would begin in Clark County to make roads safer during flash floods.

Mr. Malfabon replied that NDOT was working closely with Clark County Regional Flood Control District to incorporate improvements. For example, work was currently in progress at the Interstate 215 and Interstate 95 Centennial Bowl Interchange. He said millions of dollars in local funds were being used toward flood control improvements such as box culverts. Mr. Malfabon said NDOT was working closely with other agencies such as Clark County and the cities of Las Vegas, North Las Vegas and Henderson to implement flood control improvements. He said most flood control improvements were the responsibility of the Clark County Regional Flood Control District, but NDOT partnered with the district on various NDOT projects.

In response to a question from Assemblyman Ohrenschall concerning a timeframe for completion, Mr. Malfabon replied that there was not a specific timeframe, because projects were ongoing. He said he would request information from the Clark County Regional Flood Control District regarding the location of major improvement projects and how they aligned with NDOT projects.

Assemblyman Edwards asked about the progress on the consent decree requirements, and the timeframe for completion.

Mr. Gaskin replied that the original extent of the consent decree included a two-year timeframe for total completion, or approximately the end of calendar year 2018. He said that timeframe was driven by the critical path item, which was the mapping of all the major and minor components. He said 3 of 17 consent decree items were already complete. Mr. Gaskin said the division had focused on those items first, because the deadlines for completion were approximately 30 days each.

12. Reports on the use of consultants for the January 1, 2016, through June 30, 2016, reporting period: a) Reports from school districts pursuant to NRS 391.155. b) Reports from boards and commissions pursuant to NRS 333.705(7). c) Reports from Nevada System of Higher Education, pursuant to NRS 333.705(7).

There was no discussion on these items.

H. PUBLIC COMMENT.

There was no public comment.

I. ADJOURNMENT.

Vice Chair Kieckhefer adjourned the meeting at 12:41 p.m.

______Senator Ben Kieckhefer, Vice Chairman Interim Finance Committee

______Rick Combs, Director, Legislative Counsel Bureau, and Secretary, Interim Finance Committee

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