MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
May 28, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 2:00 p.m., on Friday, May 28, 1993, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Bob Coffin
Senator Diana Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
STAFF MEMBERS PRESENT:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Jeanne L. Botts, Program Analyst
Larry L. Peri, Program Analyst
Marion Entrekin, Committee Secretary
OTHERS PRESENT:
Louise Lizzi, Representative, Families of Murder Victims
Kim Alverra, Vice President, Families of Murder Victims
Sandy Heverly, Executive Director, Mothers Against Drunk Drivers, Clark County Chapter
Frankie Sue Del Papa, Attorney General
Brooke A. Nielsen, Assistant Chief Deputy Attorney General, Office
of the Attorney General
John P. Kuminecz, Commissioner, Consumer Affairs Division
Department of Commerce
Steve Sisolak, Telemarketing Representative, American Distributing
Company
Judy Matteucci, Director, Department of Administration
Colette Rausch, Deputy Attorney General, Consumer Affairs Division
Department of Commerce
Although not scheduled, Senator Raggio opened the hearing for discussion of Senate Bill (S.B.) 338 to accommodate individuals wishing to testify regarding this bill.
SENATE BILL 338: Establishes emergency procedure for reducing
number of offenders in facilities and
institutions of department of prisons.
Louise Lizzi, Representative, Families of Murder Victims, read from prepared text (Exhibit C) in opposition to the passage of S.B. 338.
Kim Alverra, Vice President, Families of Murder Victims, wished to state her opposition to the passage of S.B. 338. She asserted the proposal of the Governor to make the Department of Parole and Probation a division of the Department of Prisons should not take place. Additionally, Ms. Alverra stated the Families of Murder Victims strongly opposes any action to close honor camps located in the State of Nevada.
Sandy Heverly, Executive Director, Mothers Against Drunk Driving, Clark County Chapter, testified her organization strongly opposes the passage of S.B. 338. They believe if this bill is passed, it will send a very strong message to current and potential criminals that it is open-season on crime. They are also concerned if this bill passes the result will be the sacrifice of lives for dollars.
Ms. Heverly commented Mothers Against Drunk Drivers are very concerned about the nonviolent offender portion of the bill. It is their contention that driving while intoxicated is murder on the roadways and a violent crime that should not be categorized as a nonviolent crime.
Senator Raggio closed the hearing on S.B. 338 after announcing that a vote will be taken on this bill upon receipt of an amendment proposed by the Governor to eliminate the language that would provide for the early release of nonviolent offenders.
Senator Raggio opened the hearing for discussion of Senate Bill (S.B.) 375.
SENATE BILL 375: Makes various changes relating to regulation
of trade practices.
Frankie Sue Del Papa, Attorney General, said her staff just completed work on the fiscal portion of this bill but will require some time to consider how to reword the exemption language for the benefit of legitimate telemarketing activities conducted by many of the larger retail stores in the state.
Ms. Del Papa understands the reason her office is being asked to rewrite the exemption portion of the bill is to resolve the concerns of the legitimate companies caught up with the exemption language. She cautioned that if the language is weakened it will have an impact on law enforcement.
Ms. Del Papa remarked for the record:
We will put that in writing so that 2 years down the road when you start to write us on certain things I will want to be able to indicate what happened. Our office will be willing to do something on the order of an attorney general opinion because I understand where they are coming from...it is not our intent...nor do I believe it will have that sort of impact....
Brooke A. Nielsen, Assistant Chief Deputy Attorney General, Office of the Attorney General, stated her office reached an agreement with the Consumer Affairs Division (CAD) regarding the form the fiscal note should take. She distributed to the committee Exhibit D, "Telemarketing Budget Augmentation/Revision under S.B. 375." She also said her office wrote a proposed amendment (Exhibit E) to S.B. 375 regarding the subpoena power of the attorney general and to clarify the authority for the CAD to perform consumer affairs mediation.
Ms. Nielsen outlined the contents of Exhibit D with the committee.
She stated the total cost of the CAD and the Office of the Attorney General budget in fiscal year 1993-1994 is $1,325,455 and in fiscal year 1994-1995 is $1,264,762.
Senator Raggio asked the amount of registration fees that are expected to be received from telemarketers annually.
John Kuminecz, Commissioner, Consumer Affairs Division, Department of Commerce, said under S.B. 375 the registration fee assessed sellers is $6,000 per year and the registration fee assessed salesmen is $3,000 per year. Expected revenue from these two sources would amount to approximately $780,000 per annum. An additional $300,000 would be received from fines and investigative fees recoupment for total annual revenue of $1,080,000.
Senator Raggio asked if the cost of this program will be more than the revenue generated since there is about a $300,000 shortfall in the amount of revenue versus the total cost of the program.
Mr. Kuminecz said some of the money in reserve will be used to finance the shortfall.
Senator Raggio asked what will occur in the fourth or fifth year when the reserve is used up.
Mr. Kuminecz said there are some costs that are one-time costs in terms of expenses, and the figures reflected in Exhibit D are very prudent projections for the next 2 years both in the number of sellers and for the fines and investigative fees recoupment. He anticipates a much larger number of sellers and salesmen in future years will be assessed a registration fee that will result in higher revenue.
Steve Sisolak, Telemarketing Representative, American Distributing Company, remarked the telemarketing industry would not be opposed to an increase in the registration fees in order to cover the costs of enforcement if it is found after 2 years additional funds will be required. He explained the telemarketing industry intended to be self-funded and to regulate themselves and would not object to handling the costs.
Senator Coffin said the telemarketing industry is constantly under attack and there is a possibility it could be shut down. He commented the employees hired to perform the functions involved with telemarketing should be advised their positions depend on the funding from fees collected and if the source of the fees are eliminated their positions would also be eliminated.
Senator Raggio stated the committee would like to have input from the Budget Division regarding this issue.
Judy Matteucci, Director, Department of Administration, replied she has not been contacted regarding the augmentation revision to S.B. 375. She will review Exhibit D to discuss before the committee at a later date.
Senator Raggio referred to Exhibit E and said the amendment concerning a subpoena to appear before a hearing officer is still troublesome to the chairman. He asked what kind of a hearing.
Ms. Nielsen replied an investigative fact-finding hearing whereby an individual is placed under oath, testimony is taken, and evidence is developed in the cases where it is believed fraudulent activity has occurred. She said this would be a way to gather this evidence in a concrete form. The statutes state the commissioner of CAD has this power at the present time as an enforcement tool.
Senator Raggio said he has a great deal of concern about issuing subpoenas to investigators when the people are not subpoenaed to a hearing where they can have the opportunity to hear both sides of the issue. He said:
We do not give policemen subpoenas to go out and investigate something to subpoena people to appear before them to get evidence. I want to know what the hearing officer is going to do at that time. Is he going to turn over the testimony and documents to the attorney general for investigative purposes? Why don't you just subpoena them to the hearing when you propose to take some action?
Colette Rausch, Deputy Attorney General, Consumer Affairs Division, Department of Commerce, stated:
This authority not only exists in the current law for telemarketing whereby the commissioner has authority...also in other states....Whoever enforces the telemarketing provisions also has subpoena authority. The goal is if it is criminal do not use this. If it is criminal you do your own investigation. You do what the cops do. If it is civil a lot of times these hearings and preparing for a hearings officer subpoena is a way of finding out if there is enough evidence there and pursuing if there is. A lot of times the business comes in and explains that there was an error....It allows them to have a forum to express their differences. Also, if it is overburdensome as far as the subpoena language goes they don't have to come to the hearing. They can go to court and get that subpoena quashed. There is a due process provision to make sure there are no abuses in that procedure.
Senator Raggio remarked when he was a district attorney he could not issue a subpoena to do an investigation and have the evidence brought back to him. He did have the right to issue a subpoena to bring somebody before the grand jury, to a preliminary hearing, or to a trial but not to bring an individual to deliver evidence to him. He believes this poses a problem that is subject to great abuse. He wants to make certain this situation is not misused.
Ms. Nielsen suggested her office could arrive at additional language with tighter standards restricting subpoena power clearly to civil actions. She opined this would clarify and alleviate some of the concern and said this procedure would not be used in criminal matters.
Senator Raggio wished to include for the record a packet of letters from the Western Express Service Company (Exhibit F - Original on file in the Research Library) supporting the passage of S.B. 375.
Senator Raggio closed the hearing on discussion of S.B. 375.
Commission for Hospital Patients - Page 361
Jeanne L. Botts, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, referenced Exhibit G, budget closing action, to which is attached a memorandum from the Department of Administration. She stated when the commissioner for the Department of Insurance appeared before the committee during budget hearings, she had indicated there was a problem with the revenue. The statute provided for an original assessment of $100,000 to increase in an amount equal to the increase in the Consumer Price Index (CPI) on a daily basis. The memorandum from the Department of Administration indicates by what amount that revenue should be increased, and the changes are reflected in the budget closing action sheet, Exhibit G.
Also attached to Exhibit G is some additional information that Ms. Botts said was requested from the Department of Insurance by Senator Glomb. She said this pertains to a request from the deputy insurance commissioner for additional needs and positions for the Commission for Hospital Patients totalling $95,651 in the first year of the biennium and $84,033 in the second year of the biennium. This request did not provide a suggestion for revenue to fund the budget so the Budget Division denied the request. The commissioner of the Department of Insurance concurred with the denial by the Budget Division. Ms. Botts pointed out that the revenue to this budget is limited by existing statute that provides for $100,000 plus CPI increases since 1991.
Senator Coffin noted an additional $60,000 was being spent over and above the assessment. He asked how this happened.
Ms. Botts replied the Commission for Hospital Patients was slow in starting up but had some revenue to work with. However, she opined there probably would be a crisis in the following biennium because the CPI will not keep up with their revenue demands. She said the budget for this account is not $160,000 per annum since this amount includes a reserve, but they are spending about $10,000 more than they are taking in each year.
Ms. Matteucci pointed out the amount allocated for this account was misrepresented in the original budget. This error is being corrected and there will be no change in the assessment. The commission will have more revenue as a result of the CPI and will not spend more than they will be taking in each year.
SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH THE RECOMMENDATIONS BY STAFF REFLECTED FOR BUDGET PAGE 361 IN EXHIBIT G.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Communicable Disease Control - Page 832
Senator Glomb stated she voted against passage of this budget because she felt it was underfunded. She made some telephone calls and requested information from the Health Division regarding what is being done in the way of tuberculosis control. She distributed Exhibit H to the committee which provides background and cost information on the tuberculosis program in Nevada and reviewed with the committee items 1 through 5 on page 3 that indicates people are going without treatment for tuberculosis in the state.
Senator Glomb stated the Performance Indicators shown on page 834 of the Governor's Executive Budget projected 2700 cases of tuberculosis in fiscal year 1993 but the number of cases dropped to 2600. She said the reason the number dropped is the money is not there to provide for testing, diagnosis, and treatment for clients with known tuberculosis.
Senator Rawson said the counties have the legal or statutory responsibility to provide for indigent care when all other resources are exhausted. He stated there is an ad valorem tax that pays for that service. It is his suggestion the state should pursue this resource to prevent using state funding.
Senator Glomb referred the committee to item 5 that indicates two persons in Washoe County and three persons in Clark County with active tuberculosis have been denied financial assistance for hospitalization. She wished to state for the record that there are documented needs not being met in the state because the funds are not available.
Senator Rawson reiterated that it concerns him the county hospitals in the state are turning away individuals with an active disease that do not have the ability to pay for medical treatment. He feels the counties have an obligation to deal with these cases.
Senator Raggio requested committee introduction of the following bill draft request (BDR).
BILL DRAFT REQUEST 34-2075: Revises provision concerning program of accountability for public schools.
SENATOR COFFIN MOVED TO INTRODUCE BDR 34-2075.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Insurance Insolvency Fund - Page 368
SENATOR GLOMB MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Energy Conservation - Page 437
Dan Miles, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, referred the committee to Exhibit I, budget closing action report, and covered its contents with the committee. He pointed out the Budget Division submitted a revised budget for the Energy Conservation Program on March 9, 1993. The recommended revisions remove pass-through transfers for the Community Services Block Grant and Recycling Programs. These transfers are recommended to go directly from those programs to the new departments responsible for the administration of the programs under the reorganization proposal.
SENATOR GLOMB MOVED TO APPROVE THE BUDGET IN ACCORDANCE WITH THE REVISED BUDGET.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Education, Health and Human Services Administration - Page 613
Larry L. Peri, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, referred the committee to the budget closing action sheet reflected on page 3 of Exhibit I. He stated this is the budget for the office of the director of the Department of Human Resources and the adjustment to the regular appropriation removes $57,000 recommended for the State Department of Education dues and registration costs. This amount was placed in this account predicated upon the reorganization. Since the State Department of Education will remain a separate department, the dues should be removed from this budget account. Another action was one taken by the Assembly Committee on Ways and Means to move reorganization savings into the vacancy savings line item.
Mr. Peri discussed the issues reflected on page 4 of Exhibit I with the committee.
SENATOR COFFIN MOVED TO APPROVE THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS REFLECTED FOR BUDGET PAGE 613 OF EXHIBIT I.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Health Resources Cost Review - Page 619
Mr. Peri said there is one recommendation in this budget account. He referred the committee to an attachment to the closing action sheet (Exhibit I), a memorandum from the Department of Human Resources that indicates in the budget-building process the agency neglected to request authority to collect funds from hospitals as required by Nevada Revised Statutes (NRS) 439B.440(2) stipulating that the director may examine major hospitals through an independent audit on a regular basis. That legislation allows the department to collect funds from hospitals to have the audit conducted.
Senator Raggio asked if this would give the department $100,000 in authority for collection of audit fees.
Mr. Peri replied in the affirmative and added it would give them the authority for collection from hospitals and payment of the audit fees.
Discussion ensued within the committee concerning this budget account.
SENATOR RAWSON MOVED TO CLOSE THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS REFLECTED ON BUDGET PAGE 619 OF EXHIBIT I AND TO ADJUST INDIGENT PENALTY REVENUES AND INDIGENT PENALTY PAYMENTS BY DELETING $50,000 FROM EACH.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Purchase of Social Services - Page 621
Ms. Matteucci said this budget is federally funded.
Senator Glomb noted that the total resources listed on page 621 of the Governor's Executive Budget required adjustment to $13,996,000 for the first year of the biennium and $14,407,000 for the second year of the biennium.
Senator Raggio concurred with Senator Glomb regarding the necessary adjustment.
SENATOR GLOMB MOVED TO CLOSE THE BUDGET BY AUGMENTING THE RESOURCES BY THE AMOUNT OF $13,996,000 THE FIRST YEAR OF THE BIENNIUM AND $14,407,000 THE SECOND YEAR OF THE BIENNIUM.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Mr. Miles referred the committee to page 623 of the Governor's Executive Budget that provides a summary of the federal funds for budget page 621. He noted the action was a reduction in the second year of the biennium, not an increase, and recommended the motion taken to augment the resources may not be correct.
SENATOR COFFIN MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Department of Transportation - Page 1639
Ms. Botts referred the committee to Exhibit J, budget closing action sheet for the Department of Transportation (NDOT) and reviewed the recommendations reflected on page 1 with them.
Referring to work performed by the State Sealer of Weights and Measures under the State Department of Agriculture, Senator Rawson inquired if any portion of the work they do would be on non-highway vehicles.
Ms. Botts answered there has been conflicting testimony on where the majority of their work is performed. The State Department of Agriculture provided information that approximately 26 percent of the work performed by the State Sealer of Weights and Measures involves testing the scales to weigh trucks that haul materials for highway construction but very little of their work relates to highways. The Department of Administration had supplied a letter that said about 70 percent of the devices that are checked by the State Sealer of Weights and Measures are gasoline pumps and it might be feasible to relate this work to NDOT to insure accurate collection of taxes for fuel.
Ms. Botts continued her testimony commencing with page 2 of Exhibit J that involves the restoration of 40 positions that were scheduled to be transferred to the new Division of Information Technology Services under the Department of Administration.
Ms. Botts said that NDOT in their equipment requests provides very specific information on their planned purchases for their major pieces of heavy-duty equipment, but $1.5 million for operational equipment is requested each year for a variety of unspecified items. In the past the legislature has not required NDOT to submit an itemized list of operational equipment purchases, but during the current biennium legislative auditors have asked why the legislature did not require detailed information regarding a $1.5 million expenditure. She asked if the committee wanted more detailed plans regarding the $1.5 million equipment purchases by NDOT.
Senator Raggio replied the committee would be interested in seeing a detailed list of purchases.
Senator Raggio asked for an explanation regarding the suggested letter of intent that would request the NDOT should refrain from contracting with former employees to perform the same work they did while employed by NDOT.
Ms. Botts explained the letter of intent had been suggested by the Assembly Committee on Ways and Means. She said the NDOT does not currently have any former employees under contract, but in some cases former employees have been hired by firms with which they contract.
Senator Raggio commented since the committee did not hear any testimony concerning this issue, they would not request a letter of intent.
Ms. Botts resumed testimony by referring the committee to pages 3 and 4 of Exhibit J. She called the committee's attention to the note on page 3 that NDOT has requested all revenue and expenditures connected with the Nevada Bicycle Advisory Board be tracked in a separate category. This program is supported by 65 percent of a 50-cent fee on each driver's license.
SENATOR RAWSON MOVED TO CLOSE THE BUDGET TO CONFORM WITH THE COMMITTEE'S PREVIOUS ACTION WITH THE STATE DEPARTMENT OF AGRICULTURE WITH THE RESTORATION OF THE DATA PROCESSING EMPLOYEES, AN ADJUSTMENT ON THE BICYCLE ADVISORY BOARD, AND A DECISION ON THE INCREASED AUTHORITIES REFLECTED ON PAGE 4 OF EXHIBIT J.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'DONNELL WAS ABSENT FOR THE VOTE.)
* * * * *
Senator Raggio adjourned the meeting at 3:30 p.m.
RESPECTFULLY SUBMITTED:
Marion Entrekin,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
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Senate Committee on Finance
May 28, 1993
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