MINUTES OF THE
ASSEMBLY COMMITTEE ON WAYS AND MEANS
Sixty-seventh Session
March 23, 1993
The Assembly Committee on Ways and Means was called to order by Chairman Morse Arberry, Jr., at 7:37 a.m., on Tuesday, March 23, 1993, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry, Jr., Chairman
Mr. Larry L. Spitler, Vice Chairman
Mrs. Vonne Chowning
Mr. Joseph E. Dini, Jr.
Mrs. Jan Evans
Ms. Christina R. Giunchigliani
Mr. Dean A. Heller
Mr. David E. Humke
Mr. Richard Perkins
Mr. Robert E. Price
Ms. Sandra Tiffany
Mrs. Myrna T. Williams
COMMITTEE MEMBERS ABSENT:
Mr. John W. Marvel (Excused)
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Gary Ghiggeri, Deputy Fiscal Analyst
PLANT INDUSTRY FUND - PAGE 459
Mr. Tom Ballow, Executive Director, Department of Agriculture, introduced Mr. Bob Gronowski, Director, Division of Plant Industry; Mr. Steve Mahoney, Director, Division of Brand Inspection; and Dr. Jack Armstrong, Director, Animal Industry Division.
Mr. Ballow explained the Department of Agriculture was headed by the 10-member State Board of Agriculture. The main office of the department was located in Reno and included an animal disease laboratory. The Weights and Measures laboratory was located in Sparks. Other offices and laboratory facilities were located in Elko, Las Vegas and Winnemucca. The department included 59 full-time employees and approximately 100 seasonal part-time employees hired at various times throughout the year. The department was comprised of four divisions: Division of Plant Industry, Division of Animal Industry, Brand Inspection and Administration Division.
Mr. Ballow noted the purpose of agriculture was food production. Farmers and ranchers in the United States were very efficient producers, with only 2 percent of the population actually living and working on farms. The programs of the department were designed to assist farmers and ranchers in food production efforts and to promote the general welfare of all citizens in the state.
Chairman Arberry asked Mr. Ballow to discuss the proposal to relocate the Weights and Measures program to the Nevada Department of Transportation. Mr. Ballow said a representative of KMPG Peat Marwick had met once with the department; however, the subject of moving Weights and Measures to the Department of Transportation was never discussed at that time. He indicated after the consultant's report had been issued he had testified in opposition to the proposal.
Chairman Arberry asked Mr. Gronowski to provide more information about the proposed reorganization.
Mr. Gronowski distributed copies of a pamphlet entitled "Getting What You Pay For, Weights and Measures Tips for Consumers" (Exhibit G) a copy of which is on file in the Fiscal Division). He indicated there was some misunderstanding regarding what the responsibilities of the Weights and Measures section were. The relationship of those responsibilities to highway construction was minimal. The Weights and Measures Program tested 39 highway scales and hoppers for the Department of Transportation in fiscal year 1991-92 for highway construction. The project equalled approximately .26 percent of the total work performed by Weights and Measures. The remainder of Weights and Measures' work had no relation to highway construction and, therefore, should not be financed by the Highway Fund. Additionally, Department of Transportation contracts state highway scales and hoppers must be certified by a third party. It would be a conflict of interest for Weights and Measures to perform those certifications if it was a part of the Department of Transportation.
Mr. Gronowski noted 35 of the 50 states housed Weights and Measures within their Departments of Agriculture. No state housed Weights and Measures within the Department of Transportation.
Chairman Arberry questioned whether there were any legal problems associated with the proposed reorganization. Mr. Gronowski said there was no way federal highway funds could pay salaries of Weights and Measures staff.
Mr. P. Forrest "Woody" Thorne, Deputy Budget Administrator, Budget Division, stated gasoline pumps represented 68.6 percent of the devices tested by the Weights and Measures Program. In addition, the bureau tested specialty gas pumps, truck scales, propane tanks and livestock scales. Much of the work performed by the bureau was, therefore, transportation related. One of the primary funding sources for the Department of Transportation was gasoline tax revenue and this was the basis of the KPMG Peat Marwick recommendation to relocate Weights and Measures to the Department of Transportation.
Chairman Arberry inquired whether the proposed reorganization was legal. Mr. Thorne answered KPMG Peat Marwick advised there would be no conflict of interest. A legal opinion had not been obtained; however, if there were problems in using Highway Fund money for the program, fees for certification could be raised to make the program self-supporting.
Chairman Arberry requested the Budget Division to secure an Attorney General opinion on this matter.
Chairman noted one of the 13 positions in Weights and Measures was being eliminated. He questioned how the level of services could be maintained. Mr. Thorne indicated the position was being eliminated in order for the Department of Agriculture to meet General Fund caps. He said he would research the question and provide an answer at a later time.
Mr. Gronowski said it was his opinion testing a gasoline pump for accuracy did not relate to transportation. It only related to the accuracy of the measuring device. Mr. Thorne stated the accuracy of the pump had a direct bearing on the accuracy of the tax collected.
Chairman Arberry asked Mr. Gronowski to present the Plant Industry budget.
Mr. Gronowski reported the division provided basic support for 16 regulatory and service programs as well as the Division of Administration. The base budget request included continued funding for expenses which remained after the 20 percent budget reduction. The maintenance budget was comprised of inflationary costs and expenses related to an occupational study. Enhancement items included funding for projected increases in Weights and Measures responsibilities and exportation of products.
Mr. Gronowski pointed out board salaries ($4,480 each year) and longevity pay ($10,688 in the first year of the biennium and $11,788 in the second year) had been left out of the Executive Budget inadvertently. In order to replace those items in the base budget, fees would have to be increased. He recommended the Executive Budget be revised accordingly.
Chairman Arberry noted the agency had requested $14,000 for new vehicles. Mr. Gronowski said several agency vehicles had mileage over 100,000 miles. Repairs and maintenance on those vehicles were very expensive and the purchase of new vehicles would represent cost savings in the long run.
Mr. Spitler asked what percentage of Nevada's economic base was agriculture driven. Mr. Ballow answered in the rural counties mining and agriculture were the first and second most important economic activities. Agricultural was also the most important economic activity in rural Washoe County. Mr. Spitler asked Mr. Ballow to submit to the committee in writing the percentages of agriculture's contribution to the overall state economy.
Mr. Spitler inquired why this was not a fee-based agency rather than a General Fund agency. Mr. Ballow stated agricultural products were important not only to the producers but to the consumers as well. Protection of the agricultural industry enhanced the general well-being of the entire state.
Mr. Spitler said he believed in protecting the consumer; however, the state had an obligation to charge fees for services provided to private enterprise. He questioned how much of the agency's costs could be recovered through fees. Mr. Ballow responded the Department of Taxation collected petroleum inspection tax fees from the petroleum industry totaling $408,000 annually which was contributed to the General Fund.
Mr. Spitler asked if the fees from the petroleum industry paid the costs to perform the tests. Mr. Ballow replied most of the costs were paid from fees if revenue from the gasoline import fee was included in the calculation. If the gasoline import fee was not considered, petroleum industry fees funded approximately one-third of the cost of testing.
Mr. Spitler asked if the petroleum industry fees deposited to the General Fund were earmarked to pay testing costs. Mr. Ballow said he did not know how the Budget Division handled the disbursement of the fees. Money was provided from the General Fund to cover the cost of testing activities.
Mr. Gronowski noted the revenue from the petroleum tax exceeded the cost of operating the Weights and Measures program.
Mr. Spitler asked how much gasoline pump inspections cost and how much the agency charged for the inspection service. Mr. Gronowski replied gas stations were charged a $7.00 per meter for inspection fees. The agency might recoup inspection costs from large stations with several meters. It might be losing money on inspections of small stations.
Mr. Spitler said Mr. Gronowski's statement supported the Budget Division's argument that the gasoline tax revenue was subsidizing the cost of pump inspections and, therefore, Weights and Measures should be moved to the Department of Transportation. He asked why petroleum tax revenue should be used to offset the cost of pump inspections.
Mr. Gronowski responded the petroleum tax revenue funded various programs pursuant to NRS 590.
Mr. Spitler said if the cost to inspect a pump was $7.00 the inspection fee should be $7.00 per pump. If a small gas station had only one pump, labor costs should be added to the inspection fee.
Mr. Spitler asked why the agency had requested funding for out-of-state travel. Mr. Gronowski replied the funding would have covered the cost of traveling to an annual meeting of representatives of various state Departments of Agriculture. Mr. Spitler inquired whether there would be a loss to the state if the funding was not granted. Mr. Gronowski replied the state would lose the benefit of sharing experience with other states.
Ms. Giunchigliani noted the agriculture industry produced approximately one percent of the state's revenue but used approximately 90 percent of the state's water. She asked what the amount of new fees required to make Weights and Measures self-supporting would be if Highway Fund money could not be used to fund the program. Mr. Thorne responded he would research the question.
Ms. Giunchigliani inquired whether all budgets included longevity pay for staff. Mr. Thorne responded affirmatively.
Ms. Giunchigliani requested a schedule of fees charged by Plant Industry. She asked what Weights and Measures fees were. Mr. Gronowski answered fees ranged from $6.00 to $150 per test.
Ms. Giunchigliani agreed with Mr. Spitler the agency should be funded by fees rather than from the General Fund.
Ms. Tiffany asked if the petroleum tax and Weights and Measures fee revenue could be used for other purposes once Weights and Measures was transferred to the Department of Transportation. Mr. Thorne said he presumed it would require a change in the statute to earmark those revenues for other uses. He noted the fee revenue was deposited directly into the agency budget rather than into the General Fund.
Mr. Heller asked why the performance indicators reflected either flat numbers or decreases over the biennium. Mr. Gronowski responded the agriculture industry had suffered over the past six years as a result of the drought and, therefore, department activities were reduced.
Mr. Heller questioned what the effect to the public would be if Plant Industry did no licensing. Mr. Gronowski stated the agriculture buyers were required to be licensed and bonded in order to protect the grower. Mr. Heller asked if there were any complaints associated with the licenses. Mr. Gronowski said there were complaints.
Mr. Heller inquired about pest control licenses. Mr. Gronowski stated the performance indicators referred to the number of businesses licensed in the state rather than individual persons. Mr. Heller asked if there were complaints associated with pest control licenses. Mr. Gronowski replied complaints were received regarding improper applications, ineffective pest control procedures, improper inspections, etc. Mr. Heller asked the number of complaints received. Mr. Gronowski indicated he could provide the information to the committee at a later time.
Mr. Heller stated the complaint data would be more informative to the committee than the performance indicators contained in the Executive Budget. He suggested the performance indicators reflect results achieved.
Mr. Heller noted most of the Department of Agriculture budgets did not include performance indicators. He asked the reason for the omission. Mr. Gronowski stated the fee-funded budgets had never contained performance indicators. Mr. Heller requested the department to compile performance indicators for the budgets where they were lacking. Mr. Gronowski agreed to do so.
Chairman Arberry asked Mr. Ballow to discuss the proposed consolidation of the Dairy Commission with the Department of Agriculture. Mr. Ballow stated the Board of Agriculture had met to discuss the proposed consolidation. A representative from the Dairy Commission was also in attendance to explain the function of the Dairy Commission and its sources of funding. It was the consensus of the Board of Agriculture they would prefer not to be consolidated with the Dairy Commission because the functions and time schedules of the Board and Commission were incompatible.
Chairman Arberry questioned whether the proposed consolidation envisioned the Dairy Commission serving as a representative of the dairy industry as a member of the Board of Agriculture. Mr. Thorne explained the recommendation was for one dairyman to sit on the Board of Agriculture. The Dairy Commission would become a subcommittee of the Board of Agriculture and would continue to perform its current regulatory and statutory duties.
Chairman Arberry asked the rationale behind the proposed consolidation. Mr. Thorne responded the proposal was to combine various agriculturally-related boards and commissions into the Board of Agriculture.
Chairman Arberry stated it appeared the Budget Division was tying the hands of the Dairy Commission by making it an advisory body. He suggested this issue be revisited.
Mr. Dini noted for the record he opposed the consolidation. He stated the Dairy Commission would have a tough job keeping the dairy industry alive in Nevada. He warned against returning to the problems the dairy industry experienced in the 1960s, prior to the creation of the Commission. He added the Dairy Commission served an important function for both the producers and the consumers. He would not want to remove any of the Board's authority. He suggested making the Executive Director position an appointee of the Governor.
Chairman Arberry expressed agreement with Mr. Dini's position.
Ms. Giunchigliani said she understood from the testimony of the Budget Director at reorganization committee hearings regulatory commissions would retain their regulatory status under the proposed reorganization. Mr. Thorne said the majority of regulatory commissions would remain regulatory. The Dairy Commission would retain its regulatory authority. The current commission members would become ex officio members of the Board of Agriculture and the commission would operate as a subcommittee of the Board of Agriculture. Mr. Dini noted ex officio members had no voting power.
Chairman Arberry asked Mr. Ballow to address the proposed transfer of the gas pollution standards program to the Department of Environmental Protection. Mr. Ballow stated he did not view the transfer as appropriate because the Department of Agriculture currently operated the laboratories for analyzing gasoline, diesel fuel, antifreeze and oil. There was no other laboratory with those facilities. Weights and Measures inspectors could obtain gasoline samples at the same time as they were inspecting gas pumps. He said it did not make sense to hire additional staff to do the sampling. It would be preferable to leave the pollution standards program within the Department of Agriculture and he recommended doing so.
Chairman Arberry asked if the gas pollution standards laboratories would remain in the Department of Agriculture. Mr. Ballow indicated it would be very expensive to establish new laboratories in the Department of Environmental Protection. In addition, the current laboratory facilities were leased through July 1, 1995. The lease obligation would remain through the end of the lease term even if the pollution standards activity was removed.
Ms. Tiffany noted fuel standards were also governed by the conditions of NRS 590. She questioned whether splitting the pollution standards function from the Weights and Measures function would require amendment of the statute. Mr. Thorne said he would have to research the statute and provide an answer at a later time.
Mr. Humke inquired whether the chief chemist position would be transferred to the Department of Environmental Protection. Mr. Gronowski said the draft budgets did not reflect transfer of the chief chemist. He noted the chief chemist supervised both the pesticide laboratory and the petroleum laboratory.
Mr. Humke asked if the Department of Environmental Protection would have to bear the cost of hiring an additional supervisory chemist. Mr. Gronowski noted fertilizer testing would remain with the Department of Agriculture and would require a senior chemist position. Mr. Humke said it appeared there would be a duplication of functions.
Mrs. Williams noted job titles did not always accurately describe job functions. She asked how the Budget Division determined if there were duplicative positions. Mr. Thorne said the determination was based on job titles and duties. Specific positions were not removed from the budgets in order to give department directors leeway to determine which positions should ultimately be eliminated.
Mrs. Williams asked if specific positions to eliminate could be identified. Mr. Ballow said he could not identify specific positions because he had not been provided that information from the Budget Division. He said he suspected one position might be his own, however.
Mrs. Williams asked where there was duplication of effort within the Department of Agriculture. Mr. Ballow responded the department did not believe there was duplication of effort. No two people were doing the same job at the same time.
Mrs. Williams questioned whether there was any duplication between Department of Agriculture staff and staff members within related agencies. Mr. Ballow replied he did not believe there was duplication of effort.
Ms. Giunchigliani questioned whether it would be more feasible to move motor vehicle pollution standards and gas pollution standards from the Department of Transportation to the Department of Agriculture where the laboratories and chemists were currently available. Mr. Gronowski noted motor vehicle testing was conducted by gasoline stations. Mr. Ballow said he opposed moving responsibility for motor vehicle testing from the gas stations to the state because gas station operators had invested substantial sums in the purchase of smog testing equipment.
Ms. Giunchigliani inquired whether Department of Agriculture laboratories could assume the testing responsibilities of any other agencies. Mr. Gronowski said the only other laboratories in the state were Health Department laboratories and university research laboratories. There was no duplication of the efforts of those facilities.
Ms. Giunchigliani requested a current organization chart as well as recommendations for moving like functions into the Department of Agriculture.
GRADE & CERTIFICATION OF AGRICULTURAL PRODUCTS - PAGE 463
Mr. Gronowski stated certification, grading and certification inspection fees totally funded the program. No General Fund appropriations were received. The base budget included continuance of one full-time position. He noted seasonal part-time inspector positions had been left out of the budget inadvertently. He suggested the budget be amended to increase personnel expenses to include those seasonal positions and decrease the budget reserve by a like amount. The maintenance budget reflected inflationary increases. The enhancement budget reflected an increase in grant funding from the U.S. Department of Agriculture.
Mr. Dini noted in 1992 there had been a problem with too few inspectors to handle onion crops. He asked if the problem had been resolved. Mr. Gronowski responded inspectors from Reno were used to complete the inspection process.
Mr. Dini asked if a sufficient number of inspectors was funded by the budget. Mr. Gronowski responded affirmatively.
ALFALFA SEED RESEARCH - PAGE 467
Mr. Gronowski stated the budget was entirely funded by a self tax on clean alfalfa seed. The purpose of the program was to improve the industry using industry funding.
AGRICULTURE REGISTRATION/ENFORCEMENT - PAGE 469
Mr. Gronowski said this fund supported agricultural product inspection at the resale level, monitored pesticide application and enforced protection plans for ground water, workers and endangered species. Funding was derived from registration fees for antifreeze and pesticide and tax on commercial fertilizers and agricultural materials as well as federal grants. The base budget included continuance of seven positions, out-of-state travel to attend training seminars, in-state travel for monitoring and enforcement of programs and operating expenses. The agency requested funding for additional equipment to analyze pesticides. He noted grant funding from the Environmental Protection Agency for enforcement of environmental protection laws had increased.
Mr. Spitler noted the budget contained no performance indicators. Mr. Gronowski said he would provide performance indicators to the committee. Mr. Spitler requested performance indicators which would address laboratory analysis and inspection requirements.
APIARY INSPECTION - PAGE 473
Mr. Gronowski stated the budget was self-funded. Apiary registration fees were collected from both residential bee keepers and bees imported to Nevada. Funding supported inspection of bees to ensure their health and control the spread of disease to residential bees.
Mr. Spitler noted there were no performance indicators in this budget. Mr. Gronowski stated he had provided performance indicators with the expanded program narrative.
Mrs. Williams asked the status of Africanized bees. Mr. Gronowski responded the Africanized bees had traveled approximately one-third of the way through Texas and were heading north rapidly. They were currently halfway through the state of Sonora, Mexico, and were expected to reach Arizona in 1993.
Mrs. Williams questioned whether there had been any success in controlling the Africanized bees. Mr. Gronowski said there had been no success in stopping the spread of Africanized bees but they were being managed through containment and increased public awareness.
Mrs. Williams inquired if any deaths had resulted from Africanized bee attacks. Mr. Gronowski replied there had been numerous deaths in Mexico because medical aid was not readily accessible.
Mr. Humke asked if the absence of funding for seasonal positions in this budget was an error. Mr. Gronowski said an error had been made. The budget required an additional $7,200 each year for personnel expenses to cover seasonal positions. An amendment to the budget had been requested of the Budget Division.
LIVESTOCK INSPECTION - PAGE 480
Mr. Ballow introduced Mr. Steve Mahoney, Director, Livestock Inspection Division. Mr. Mahoney indicated the division was entirely industry funded. The purpose of the program was to protect the livestock industry from theft of livestock as well as to find and return stray livestock. Dealers buying livestock for resale were required to be licensed and bonded.
Mr. Mahoney stated the budget supported eight full-time positions and approximately 70 part-time deputy brand inspectors. He noted funding for part-time seasonal positions was also inadvertently left out of this budget. Additionally, an agency request for $60,313 for operating expenses and a request for $16,630 for equipment in each year was not included in the Executive Budget. A budget amendment had been requested to reduce the reserve and increase the appropriate expense categories.
Mr. Mahoney indicated there was a miscalculation regarding state cost recovery. The agency had paid $13,000 in the past; however, the Executive Budget reflected cost recovery of $40,279. The amount was reallocated following discussions with the Budget Division.
Mr. Ballow stated the Budget Division had indicated they would review the state cost recovery figure and submit a letter of adjustment.
Mr. Spitler asked if the Budget Division was revising the budget. Mr. Thorne responded the Budget Division was working with the agency.
Mr. Humke asked if prosecution for livestock theft was handled by the Attorney General or by local district attorneys. Mr. Mahoney replied livestock theft normally came under the jurisdiction of the county district attorney. He noted the rural district attorneys had been quite cooperative in prosecuting those cases. He was unaware of any prosecutions by the Attorney General.
Mr. Humke inquired how many prosecutions had occurred in the current biennium. Mr. Mahoney stated there had been approximately six prosecutions for felony livestock theft. Additionally, there had been prosecutions of lesser offenses. The total number of criminal activities appeared in the performance indicators.
Mr. Humke asked if it was correct fees for Attorney General services did not greatly impact state cost recovery in this budget. Mr. Mahoney said basically there had been no change in use of Attorney General services over the past several years. In fact, Attorney General activity had decreased in the current biennium as a result of the drought.
VETERINARY MEDICAL SERVICES - PAGE 484
Dr. Jack Armstrong explained the division provided a comprehensive, statewide animal health monitoring system to investigate, diagnose and control animal diseases and to provide scientific information to animal owners and managers as well as human health professionals. Protective animal health programs were designed to benefit the general public.
Dr. Armstrong noted funding for seasonal staff and longevity pay had inadvertently been left out of the Executive Budget. He distributed an expanded narrative explaining the funding requested (Exhibit C). The Budget Division indicated funding for seasonal salaries and longevity would be made available.
Mr. Spitler asked if the salaries for seasonal staff could be charged against the livestock inspections budget. Dr. Armstrong answered there were strict controls on the testing procedures performed by the seasonal animal health technicians at the livestock auction yard because of the regulatory nature of the testing.
Mr. Spitler asked if fees were charged for the tests. Dr. Armstrong said fees were not charged.
Dr. Armstrong indicated one part-time employee monitored animal health regulation compliance on the part of livestock carriers entering the state and collected milk samples from dairies in the Reno-Sparks-Fallon-Minden-Gardnerville area. The seasonal staff was involved in the collection and/or processing of animal specimens as opposed to brand inspections.
Mr. Spitler questioned whether the agency was somehow precluded from charging fees. Dr. Armstrong replied the processing of samples was done in conjunction with a state-federal cooperative program to contain, control and eradicate livestock diseases. The state provided this service for the overall benefit of the state in the form of animal health containment as well as protection for consumers of animal products. Charging fees for those services could cause reluctance on the part of animal owners to submit specimens for testing. He noted many animal diseases were highly transmissible to humans and reduced testing could significantly impact human health.
Mr. Spitler asked if other states charged for testing services. Dr. Armstrong stated some states charged fees and some states did not. Nothing precluded Nevada from charging similar fees.
Mr. Spitler inquired about the costs of the tests. Dr. Armstrong replied it would be difficult to collect fees which would offset the true cost of the tests.
Mr. Spitler asked who performed the laboratory work. Dr. Armstrong responded the Department of Agriculture had animal disease diagnostic laboratories in Elko and Reno. In addition, contract satellite laboratories were utilized when more sophisticated analysis was necessary.
Mr. Spitler inquired what percentage of test results was positive for disease. Dr. Armstrong stated there was a preponderance of positive results. He noted samples were collected from wild animals such as bighorn sheep in order to develop health profiles.
Mr. Spitler asked about blood sampling at auction houses. Dr. Armstrong answered blood samples were collected by private veterinarians. The samples were tested to keep diseased animals from being sold in order to prevent the outbreak of disease in Nevada herds.
Ms. Giunchigliani asked why it was necessary to have budgets for both livestock inspection and veterinary medical services. Dr. Armstrong replied there was no budget overlap; however, the livestock inspection division enforced quarantines placed by veterinary medical services. Mr. Ballow noted veterinary medical services performed infectious anemia tests on wild horses for which fees were charged to the Bureau of Land Management. The revenue from those fees was deposited into the livestock inspection fund pursuant to NRS 575. A portion of the revenue was then transferred into the veterinary medical services budget.
Ms. Giunchigliani asked if a statutory amendment was necessary to allow the fee revenue to be deposited directly into the veterinary medical services budget. Mr. Ballow stated the funding to the veterinary medical services budget was accomplished through an agency transfer. Mr. Thorne stated he would research this question.
Mr. Dini noted there was a bill pending in the Senate regarding raising wild game commercially. He questioned if the agency would be able to handle the additional work load which would result from passage of the bill. Dr. Armstrong stated present staff could perform the additional work.
Mrs. Williams inquired whether any testing could be accomplished at the state Health Department laboratory. Dr. Armstrong said the public health laboratory was busy testing for social diseases.
Dr. Armstrong distributed copies of an expanded narrative explaining a request for a budget enhancement to fund laboratory equipment and vehicles (Exhibit D). Mr. Spitler asked if the request was in prioritized order. Dr. Armstrong responded affirmatively.
INSECT ABATEMENT - PAGE 488
Mr. Gronowski explained the program provided for insect and weed abatement and control of vertebrate pests. Funds expended from the budget would be reimbursed by landowners. Failure to make those reimbursements could result in a tax lien on the landowner's property.
Mr. Gronowski reported the budget had supported two eradication programs over the past two years. One dealt with an infestation of red imported fire ants in Las Vegas. The other dealt with an infestation of Japanese beetles at a private golf course in Las Vegas.
Mrs. Evans questioned whether the unusually wet winter just experienced would affect the insect populations. Mr. Gronowski replied the moist climate provided a better opportunity for exotic insects to move into the state. He noted pest surveys were conducted on a constant basis to ensure pests were detected early and eradicated swiftly.
Mrs. Evans asked if the projected budget would accommodate eradication of exotic pests. Mr. Gronowski said additional funding might have to be located to if an exotic species escaped early detection and was able to gain a foothold in Nevada.
Mr. Dini inquired about white top weed abatement along the Truckee River. Mr. Gronowski responded the agency was providing education to other agencies regarding the elimination of weeds without harming the riparian ecosystem. It was expected to take two to three years to reduce the weeds to minimal levels. It was uncertain whether total eradication was possible.
Vice Chairman Spitler called for public testimony.
Mr. Doug Busselman, Executive Vice President, Nevada Farm Bureau, stated he, along with representatives of other agricultural organizations, had met with the Budget Director to discuss the details of the Governor's proposed reorganization relative to the Department of Agriculture. He said the industry perspective was the current organization of the Department of Agriculture was satisfactory. Many of the goals of the proposed reorganization had already been accomplished within the Department of Agriculture.
Mr. Busselman noted the Budget Director indicated in all likelihood the reorganization would occur. The Budget Director had invited members of the agriculture industry to participate in the reorganization process and the industry was very interested in doing so.
Mr. Busselman said members of the agricultural industry concurred with the Board of Agriculture that the Dairy Commission should remain a regulatory body within the Department of Business and Industry. He expressed concern consolidating the Dairy Commission and the Board of Agriculture would result in the displacement of agriculture producers from the Board of Agriculture.
Mr. Busselman pointed out Nevada could become the first state without a Department of Agriculture if the reorganization occurred. He added while the industry was somewhat disconcerted by the proposal to downsize the agency from department status to bureau status, the Nevada Farm Bureau's prime interest was to maintain the integrity of the functions currently carried out by the Department of Agriculture. He noted several of those activities were financed by the industry.
Mr. Busselman asked the committee to look seriously at the Governor's proposal to make the Board of Agriculture advisory rather than regulatory. Industry representatives believed the Board of Agriculture should continue to be viewed as a regulatory body.
Mr. Busselman also recommended adding a representative from the sheep industry to the Board of Agriculture.
Mr. Busselman further testified the industry believed the Beef Council and the Sheep Commission should remain intact. The industry perspective was that producers provided the funding for the promotion of their products. Representatives of both the beef and sheep industries had taken serious offense to the proposal to have people who were not involved in their industry spending those funds.
Ms. Stephanie Licht, Executive Secretary, Board of Sheep Commissioners, said she had been involved in the range industry in Nevada for 12 years. She noted while agriculture appeared to be a small industry, society was dependent on food producers. A nation which could not control its own food supply was in danger of being controlled by someone else. She pointed out while cattle, sheep and dairy ranchers shared many common concerns they did not share specific knowledge about each other's particular industry.
PREDATORY ANIMAL & RODENT CONTROL - PAGE 490
Mr. Pete Paris, Jr., Chairman, Predatory Animal & Rodent Control (PARC), stated the PARC mission was to protect the Nevada agriculture industry and natural resources, safeguard public health and safety through cooperative assistance and control and prevent damage and disease caused by wildlife. He introduced Mr. Gary Simmons, Director of Animal Damage Control.
Mr. Gary Simmons noted the Animal Damage Control program was a cooperative program among federal, state and local government entities. He explained increases requested in the budget were to offset deficiencies in the program. The base budget funded 10.5 employees. Budget enhancements were requested to pay for vehicle expenses and the aerial hunting program. Historically, $45,000 was included in the budget to fund aerial services. Additionally, there was not adequate funding in the Executive Budget to pay the costs ($70,000 per year) of federal vehicles used by state employees. Funding was also requested for a staff position in the Las Vegas area and staff positions which were previously lost in Elko and Ely. Those positions would be field staff to respond to complaints of livestock loss.
Vice Chairman Spitler inquired about the source of federal funding and if federal funding would continue. Mr. Simmons distributed an information packet (Exhibit E) which included a variety of charts explaining funding sources and resources impacted. He noted federal government involvement in the program had been continual since 1931. Federal funding had continued to increase and was expected to increase in the future. The program was currently 57 percent federally-funded.
Vice Chairman Spitler asked if Exhibit E contained performance indicators. Mr. Simmons answered performance indicators were included in the narrative statement portion of Exhibit E. In the future, performance indicators reflecting measures of productivity would be included in the Executive Budget. He noted lost resources also represented performance indicators although they were difficult to portray accurately.
Mr. Simmons stated the program was vital to the continued survival of the livestock industry in Nevada, but the livestock industry was not the only recipient of PARC services. Airports and urban residents also benefitted from the PARC program. Vice Chairman Spitler noted expanded performance indicators were needed to reflect the actual accomplishments of the program.
Mr. Perkins questioned whether the program interacted with the Department of Wildlife. Mr. Simmons stated annual coordination meetings were held with representatives of the Department of Wildlife. Additionally, representatives of both agencies maintained a continual dialogue at the local level.
Mr. Humke asked if aircraft operations would be funded solely with state money. Mr. Simmons stated this was a cooperative effort and would involve federal, state and Grazing Board funding.
Mr. Humke questioned how PARC could perform its job if this portion of the budget was cut. Mr. Simmons indicated services would be reduced and losses of resources would be greater. Budget cuts over the past two years had increased the work area which field employees were responsible for to 181 square miles per person.
RURAL REHABILITATION TRUST FUND - PAGE 494
Vice Chairman Spitler stated the hearing on the Rural Rehabilitation Trust Fund budget would be deferred to a later date.
GRAZING CONTROL - PAGE 496
Mr. Simmons reported funding for this account came from the grazing districts and was specifically earmarked for aerial hunting within the districts which appropriated the funds. This account did not reflect all of the funding for aerial hunting because each district had the discretion to either administer its own funding or deposit it into the state system. Funding in this account specifically covered aerial hunting in the Winnemucca and Las Vegas grazing districts.
WOOLGROWERS PREDATORY ANIMAL CONTROL - PAGE 498
Mr. Simmons explained revenue was collected by the Sheep Commission in the form of a $.30 tax per head. He indicated $.20 of the $.30 tax was earmarked to fund predatory animal control and supported a half-time position.
SHEEP CERTIFICATION - PAGE 501
Mr. Paris reported the mission of the Sheep Commission was to carry on a statewide program to prevent, suppress and control communicable and non-communicable diseases of the ovine species and to provide support for federal programs to benefit the general public and oversee the well-being of Nevada's sheep industry.
Ms. Licht distributed copies of an information packet (Exhibit F) which contained the mission statement, goals and objectives of the Sheep Commission as well as an explanation of the agency request. She noted sheep inspection tax revenue was projected to increase. Increased personnel expenses were the result of increased State Industrial Insurance System premiums. Travel expenses increased during the legislative session when Commission members traveled to Carson City to attend legislative hearings.
Ms. Licht stated the most controversial portion of the budget had to do with state cost recovery plan. Cost allocations had not previously been included in this budget. She noted the budget had been revised and she extended her appreciation to the Budget Division for their assistance with the revisions.
Ms. Licht explained the Sheep Commission was comprised of three members appointed by the Governor. It maintained an office in Elko, Nevada. Ms. Licht noted she was the sole staff person and her position was part-time. The Commission worked in cooperation with the county assessors and livestock committees, compiled sheep owner information to control disease, provided permit numbers and collected taxes for sheep coming into the state, coordinated information with the Department of Agriculture Brand Inspection Division and enforced statutory compliance. Additionally, the Commission promoted the sheep industry through sponsorship of youth organizations such as 4-H and FFA, scientific and marketing research, commodity promotion development and educational support.
Mrs. Evans noted tax revenues were projected to increase from $10,000 to $15,171. She asked if those figures were correct. Ms. Licht responded the reserve funds were carried forward from year to year. Each year budget projections underestimated income and overestimated expenses in order to balance the budget. In the past income had averaged approximately $10,000. The $15,000 reflected $5,000 carried forward from reserves.
Mrs. Evans asked if the $15,000 could be realized. Ms. Licht responded the $10,000 could be realized. This item represented a difference of opinion between the Commission and the Budget Division.
Ms. Licht said state cost allocations had not previously been assessed against either the Woolgrowers account or the Sheep Commission account. The assessment which originally appeared in the Executive Budget for this account was $5,865, which represented 58 percent of the budget.
Ms. Licht explained the Budget Division had made the assessment on the basis of advice from KPMG Peat Marwick. The cost allocation was assessed to cover the cost of a legislative audit conducted in 1988. She noted the audit took place one year prior to the passage of cost allocation legislation.
Ms. Licht indicated the Commission was willing to pay $1,000 in cost allocations over the course of the coming biennium to pay the cost of the audit.
Mrs. Evans asked the Budget Division for their characterization of the situation. Mr. Thorne responded $3,985 of the cost allocation in each year of the biennium was to pay the cost of the audit. The Budget Division had agreed to reduce the amount and expand the time for repayment over the course of the coming two biennia. As a result, the total cost allocation would be reduced from $5,865 to $3,873. He noted cost allocation calculations had been based on information supplied to KPMG Peat Marwick from the legislative auditor.
Mrs. Evans stated the reduction still represented 20 percent of the budget and this matter should be looked at more closely.
Ms. Licht requested the name of the budget account be changed from "Sheep Certification" to "Sheep Inspection" to more closely parallel the language in the statute. Mrs. Evans asked fiscal staff if a name change would require a statutory amendment. Mr. Ghiggeri noted NRS 562.170 referred to this account as the "Sheep Inspection Account." Mrs. Evans said the Executive Budget would be changed accordingly.
Ms. Giunchigliani questioned why the Commission was being assessed now for an audit that occurred in 1988. Mr. Thorne replied the cost allocation plan was on a three-year cycle. There was a normal lag from the time of determining actual costs. Adjustments were made through roll forwards. The Budget Division was not satisfied with the thoroughness of the original cost allocation plan and the contract was rebid. The second plan was more thorough and resulted in several additional budgets being assessed for cost allocations.
Ms. Giunchigliani inquired whether audit costs should be included in budget projections. Mr. Thorne said audit costs would only be assessed against agencies whose audit happened to fall within the three-year cycle.
Ms. Giunchigliani asked if there was coordination between the Legislative Counsel Bureau Audit Division and the Budget Division regarding audit schedules. Mr. Thorne replied budget cycles had no bearing on which agencies were audited by the Legislative Counsel Bureau.
Ms. Giunchigliani inquired why the audit had been conducted. Ms. Licht said it was her understanding the audit had been requested by the industry.
Ms. Giunchigliani suggested there should be some coordination between the Audit Division and the Budget Division so agencies would have the opportunity to budget for audits.
Ms. Licht noted the proposed reorganization would functionally and administratively cripple the Sheep Commission. The Commission wished to remain as a three-member board. She explained she had developed an alternative to the reorganization plan which she would submit in draft form to the committee.
There being no further business, the meeting was adjourned at 10:50 a.m.
RESPECTFULLY SUBMITTED:
_________________________
C. Dale Gray
Committee Secretary
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Assembly Committee on Ways and Means
March 23, 1993
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