MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
March 25, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:05 a.m., on Thursday, March 25, 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 M. Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
STAFF MEMBERS PRESENT:
Daniel G. Miles, Fiscal Analyst
Robert Guernsey, Principal Deputy Fiscal Analyst
Steve Abba, Program Analyst
Joan McConnell, Committee Secretary
OTHERS PRESENT:
Mimi Rodden, Lobbyist, Representing Self
Kristin Belko, Citizen, Representing Self
Thomas Ballow, Executive Director, State Department of Agriculture
Tom Stephens, Manager, State Public Works Board
Judy Matteucci, Director, Department of Administration
Barbara A. Curti, President, Nevada Farm Bureau
Robert Gronowski, Director, Division of Plant Industry, State Department of Agriculture
Doug D. Busselman, Executive Vice President, Nevada Farm Bureau
Stephanie D. Licht, Representative for Nevada Wool Growers
Joel Pinkerton, Principal Budget Analyst, Budget Division, Department of Administration
Stephen J. Mahoney, Director, Division of Brand Inspection, State Department of Agriculture
Jack N. Armstrong, Doctor of Veterinary Medicine (D.V.M.), Director, Division of Animal Industry, State Department of Agriculture
Tammy Rae Wright, Nevada Beef Council
Frederick Dressler, Rancher
Senator Raggio requested committee introduction of Bill Draft Request (BDR) S-1727.
BILL DRAFT REQUEST S-1727: Makes supplemental appropriation to state distributive school account.
SENATOR O'DONNELL MOVED FOR COMMITTEE INTRODUCTION OF BDR S-1727.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS RAWSON AND CALLISTER WERE ABSENT FOR THE VOTE.)
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Mimi Rodden, Lobbyist, Representing Self, submitted a plan to accommodate the full restoration of the federal building in Carson City, which recently housed the Nevada State Library for nearly 20 years. (Exhibits C and D. Originals are on file in the Research Library.)
Senator Raggio explained the purpose this morning is to determine whether or not the committee will approve a bill draft request and a full presentation would not be necessary unless the bill is introduced. He suggested Ms. Rodden give an overview of the project at this time.
Kristin Belko, Citizen, Representing Self, began the overview for Ms. Rodden. She stated:
The proposal is to do a private full restoration of the old federal building, entering into a partnership between private investors and the State of Nevada. We are requesting a two-phase approach to this property. The first phase involves the investor group, which I represent, advancing the amount of money necessary to do a full engineering and architectural study of the building and prepare complete working drawings. The developers would advance our costs. We estimate these costs will be at least $100,000.
The second phase is, we will take this plan out for bid and get formal, binding construction bids by bondable Nevada contractors to perform the full restoration of the work. If those costs come in for the full restoration at under $5 million, the state will have the choice either to proceed with my investor group advancing all the money necessary for restoration, or the state may determine it does not wish at this time to proceed with full restoration, but at that time the state would be committed to return the $100,000 cost advance made by my group to do the full engineering report.
The restoration work will extend the useful life of this building 30 to 50 years. If this arrangement is agreed to, the state will give my investor group a 30-year lease of the building, for which my investor group will have full responsibility for maintenance and leasing operation of the building. At the end of that 30-year period the lease will terminate, and control of the building will be returned to the state. The state will have the option to lease, but be under no obligation to do so.
The state would repay over 30 years, but my investor group is fully prepared to advance all of the $5 million with a combination of our cash and some bank financing. We are looking to the state to provide any of the financing through its bonding capacity.
Senator Raggio said the chair would entertain a motion to initiate a bill draft request.
SENATOR COFFIN MOVED TO INITIATE A BILL DRAFT REQUEST.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Senator Jacobsen asked staff to determine how much money the state has put into the building in the past.
Senator Raggio reopened the hearing on Senate Bill (S.B.) 306.
SENATE BILL 306: Makes appropriation to state public works board for certain capital improvement projects.
Senator Raggio stated one of the reasons for holding the bill since last heard on Tuesday, March 23, 1993, was to allow Senator Jacobsen to look into item 2 under section 1, which involved the fencing at the Southern Nevada Correctional Center.
Senator Jacobsen said he has been in constant contact with the honor camp crew, talked to the supervisors who indicated they can do the job immediately. He added, "They have a great deal of experience in this area and indicate they can do it for about $40,000 which is quite a difference from $81,000."
Tom Stephens, Manager, State Public Works Board, referred to Exhibit E, and stated the job can be done for $45,959, which includes a contingency which may or may not be used. He recommended going ahead with the design, appropriating a design-only amount.
SENATOR COFFIN MOVED TO AMEND AND DO PASS S.B. 306, INSERTING THE AMOUNT $45,959 IN SECTION 1, SUBSECTION 2, IN PLACE OF $81,551, AND IN SECTION 2, DESIGN ONLY WITH THE AMOUNT OF $127,239 FOR PARAGRAPH 1, AND FOR PARAGRAPH 2, DESIGN ONLY FOR $29,678.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Plant Industry Fund - Page 459
Thomas Ballow, Executive Director, State Department of Agriculture, stated the farmers and ranchers, which make up about 3 percent of Nevada's population, are very efficient in producing the food for everyone. An additional 17 percent of Nevada's population is engaged in processing agricultural products, the market, transportation, etc.
The agency's programs are designed to assist farmers and ranchers in their food production efforts and to promote the general welfare of all of the citizens.
The main office and an animal disease laboratory are located in Reno. There are a weights and measures laboratory and an office in Sparks, an office and animal disease laboratory in Elko, and in Las Vegas there is an office and weights and measures complex at 2300 McCloud. In Winnemucca there is an office at 1200 Highway 40 East.
There are 59 full-time employees in the department and about 100 seasonal and part-time employees employed at various times throughout the year, depending upon the work load in the state.
Mr. Ballow stated, "The division directors will present the budgets for the programs they administer."
Senator Raggio asked, "What does the reorganization do to the existing department? What occurs and what changes result? You become a bureau under the Department of Business and Industry, is that right?"
Judy Matteucci, Director, Department of Administration, answered:
The department becomes a division of the Department of Business and Industry. Also there is a recommendation that a number of boards and commissions be consolidated with the Board of Agriculture. Those would be the Dairy Commission, the Sheep Commission, and the Beef Council. We have prepared the proposal and will deliver it to your bill drafter today or tomorrow.
The recommendation is that the weights and measures function be transferred from the Division of Agriculture to the Department of Transportation. The gas standards program established in the 1991 session is recommended for transfer to the Department of Environmental Protection.
Mr. Ballow stated he has concerns about the reorganization. He opposes the transfer of the weights and measures program, to the Department of Transportation.
Ms. Matteucci said:
We examined the bulk of the devices, the work that is being done by the weights and measures program and we believe the combination of weights and measures and the Department of Transportation is more appropriate. About 70 percent of the work weights and measures does is directly related to either testing gasoline pumps or scales for vehicles.
Ms. Matteucci stated the transfer would result in about $240,000 in General Fund savings, which would come from the highway fund. The authority of the Board of Agriculture would remain unchanged with the exception of appointment of the executive director and the administrative handling of the account, which go to the executive director of the Department of Business and Industry. The appoint-ment authority would no longer remain with all the boards and commissions. It would either go directly to the Governor or to the executive directors of the various departments.
Senator Raggio asked when the committee could receive an outline on what Ms. Matteucci is suggesting. Ms. Matteucci agreed to send the outline in the afternoon.
Senator Raggio invited comments on the effects of reorganization.
Barbara A. Curti, President, Nevada Farm Bureau, stated she is also a farmer and rancher in Nevada. She commented:
I think the reorganization will reduce the status of the Department of Agriculture to a nonentity, within a business and industry structure. I think it's extremely important we maintain the strength of the Department of Agriculture.
Robert Gronowski, Director, Division of Plant Industry, State Department of Agriculture, stated the weights and measures section is under his supervision. He referred to the booklet Getting What You Pay For (Exhibit F. Original is on file in the Research Library.) previously distributed. He added:
Weights and measures is not about highways or transporta-
tion. Weights and measures is about getting what you pay for. It checks the highway scales for the highway department so that the contract the highway department, which pays the contractor by the amount of material put in that highway, assures the material was weighed accurately and are getting what they paid for.
Mr. Gronowski also distributed copies of a letter, dated February 26, 1993, to Judy Matteucci, and a memorandum, dated March 4, 1993, to Joel Pinkerton (Exhibits G and H). He added:
The function of weights and measures has a great deal to do with agriculture. Thirty-five states have weights and measures in agriculture. Zero states have it in the Department of Transportation, and I see two problems with putting it there. One, the highway fund cannot be used to pay weights and measures. If you were going to pay it all out of fees it doesn't make any difference if I raise the fees or they raise the fees.
Also weights and measures inspectors are highly important to the fuel program, which you heard will be transferred to the Department of Environmental Protection. Weights and measures inspectors are in every gas station every year. At the same time they check the pump they take a gas sample, which is taken to our laboratory in our building and analyzed for gasoline.
If you move weights and measures to one department, move gas pollution to another department, and we've got the laboratories, you're going to have to hire many more people to follow the weights and measures inspectors into the gas station to take the gas sample for the Department of Environmental Protection, and what are you going to do at the laboratory? I've got a big, expensive laboratory, good equipment, can test the material to any degree of testing that is required.
Senator Raggio asked Ms. Matteucci, "What are we going to do with the laboratory presently in existence?"
Ms. Matteucci replied:
The Department of Transportation has extensive laboratories...I think that is not a material issue to this discussion. As far as the gas standards people, they are two different programs. The gas standards program...was established in 1991 and they do utilize the information. Gasoline is very important to the Department of Transportation since that is their significant state resource, and that's one of the reasons we're recommending the transfer to the Department of Transportation.
Ms. Curti stated it is extremely important the chemical issue be regulated and be handled through the department as it has been, instead of moving it into the Department of Environmental Protection area. The Department of Agriculture has regulatory authority over all farmers and ranchers and those are who use those chemicals. They have the labs in place to test fertilizers as well. She added:
Are we just making work here by moving things around, or are we costing the state more money, because of all this determination to move things around. We think they are working very well where they are.
Ms. Curti stated she would like to see the Dairy Commission maintain its autonomy rather than being moved on to the Board of Agriculture. As far as the Beef Council, Sheep Commission, and those intended to be brought under the Bureau of Agriculture, each one of those groups are funded by the industry. They are done under state law to give them the authority to collect those funds. Coming under the Board of Agriculture will change the structure of those boards and impair the way they carry out their function. They are not costing the government. They pay an administrative fee and fund themselves.
Doug D. Busselman, Executive Vice President, Nevada Farm Bureau, stated he is in total agreement with Ms. Curti.
Stephanie D. Licht, Representative for Nevada Wool Growers, expressed her concern over the reorganization and how it affects the Board of Agriculture. She submitted a copy of an article from the Elko Daily Free Press (Exhibit I), which appeared March 18, 1993. She stated neither the Nevada Cattlemen's Association nor she ascribed to the viewpoint in the article, but "it does provide some food for thought." She added she, too, concurred with Ms. Curti and Mr. Busselman.
Senator Jacobsen remarked, "I think you have to keep everything that relates to agriculture together, and certainly weights and measures is one of those."
Mr. Gronowski submitted a copy of a memo to Joel Pinkerton dated March 24, 1993, stating a budget correction (Exhibit J) for Plant Industry, budget page 459.
Joel Pinkerton, Principal Budget Analyst, Budget Division, Department of Administration, regarding the Board & Commission Pay figure of $4,880, stated, "These were costs that were not included in the Governor's recommendation."
Senator Raggio asked, "Where is the cost for the Board of Agriculture which you are proposing? Where is that in the budget?"
Ms. Matteucci stated:
What happened on the board and commission pay is when we had to reformat the budget, the reformatted budget in the legislative re-approved form was sent back to the agency and they did not notice that had fallen out. When we then sent out a cap to the agency they again did not put that expenditure back in. They just noticed it and brought it to our attention. We suggested that it would not be fair for them to come in and ask for you to add that money back, that they needed a proposal as to how to pay for the board and commission pay. I don't know where the federal receipts would come from. The weights and measures test fee under the proposal, as the Governor has it, is not an option, and I don't know what Mr. Gronowski has planned for the board and commission pay, but we will work with him and get back to you on that.
Senator Raggio said, "I think you had better look at a number of those boards and commissions to make certain you have, under your reorganization, made provision for the compensation for those people."
Ms. Matteucci said, "We will do that."
Senator Jacobsen requested a list from Mr. Gronowski of the equipment his agency has and the value of it.
Mr. Gronowski stated the equipment is worth over $1 million, and agreed to provide the information Senator Jacobsen requested. He also distributed a memorandum to Joel Pinkerton, dated March 9, 1993, regarding Pesticide Programs (Exhibit K). Discussion ensued.
Mr. Gronowski stated, "All work conducted for pesticides is done in a coordinated effort between the persons we hire out of another fund, the Agriculture Enforcement Fund, people paid out of the U.S. Environmental Protection Agency Grant directly."
Ms. Matteucci stated, "We are not recommending the pesticide program be transferred."
Mr. Pinkerton said he had asked Mr. Gronowski what pesticide programs there are and how they are operated.
Senator O'Donnell requested figures from Mr. Gronowski, so he could determine whether or not the cost versus the benefit is there in the insecticide inspection program.
Senator Glomb said:
I'd like a better understanding of what is seen as reorganization savings in this budget. There are 12 positions transferring to the Department of Transportation for Weights and Measures. Is there an additional [approximately] $200,000 which would be the value of the executive director and the Accountant II positions?
Ms. Matteucci stated, "I believe it is the administrative of plant industry, and an accountant position that are included for reorganization savings."
Senator Glomb commented, "It seems to me you are either going to have a chief with no Indians, or a lot of Indians with no chief."
Ms. Matteucci responded:
You have both Mr. Gronowski and Mr. Ballow. If this is no longer a department, you probably don't need both Mr. Gronowski and Mr. Ballow. The accountant is proposed to be transferred into the administrative account of business and industry. That's where the savings are. When the executive director of this department is appointed, he may look at it and decide he wants to have a different mix of positions, and we're suggesting that be left up to the executive director of the Department of Business and Industry.
Senator Glomb stated there had been $20,000 in 1991-92 and $11,000 in 1992-93 and is then reduced to $1,800 in federal funds. "What was that and why are they no longer included?"
Mr. Gronowski replied:
We received federal grants to do certain projects for the federal government. One project was the interception of an exotic insect in Las Vegas, not known to the west, and harmful to humans. A $10,000 grant was received to insure their eradication, and after eradication the grant disappeared.
Grade and Certification of Agricultural Products - Page 463
Mr. Gronowski distributed a copy of a memorandum dated March 24, 1993, to Joel Pinkerton (Exhibit L), regarding a budget correction for Grade and Certification of Agricultural Products. He stated the part-time and seasonal personnel were dropped out of the budget accidentally and not noticed immediately and had to be added into the Personnel Expenses portion of the budget in 1993-94 in the amount of $45,500 and $46,523 added to 1994-95, which will be paid by decreasing the reserve.
Alfalfa Seed Research - Page 467
Mr. Gronowski stated this fund is derived by a self-tax on all clean alfalfa seed, and used to conduct research for alfalfa seed and for promotion. Alfalfa seed is one of the largest and most profitable industries.
Agricultural Registration/Enforcement - Page 469
Mr. Gronowski distributed a copy of a memorandum dated March 24, 1993, to Joel Pinkerton (Exhibit M), regarding budget page 469, and stated:
This fund is derived from registration fees on anti-freeze, pesticides and a tonnage tax on commercial fertilizer. We also receive grants from the U.S. Environmental Protection Agency to perform inspections for them. The entire budget is either paid for by the fees or by the grants.
Apiary Inspection - Page 473
Mr. Gronowski distributed a copy of a memorandum dated March 24, 1993, to Joel Pinkerton (Exhibit N), regarding budget page 473. He stated, "The income comes from a fee charged to beekeepers in the state for registering their bees." The money is used to prevent spreading bee diseases. Reserve will be decreased to pay for the part-time, seasonal personnel.
Senator Coffin requested in writing how much money will be needed to be able to start an educational program on the "killer bees" in the schools next September.
Livestock Inspection - Page 480
Stephen J. Mahoney, Director, Division of Brand Inspection, State Department of Agriculture, provided a revised budget request from the Division of Brand Inspection from the Department of Agriculture (Exhibit O). He stated the primary mission of the agency is to assist the livestock industry in keeping track of the livestock, avoid cattle being stolen, and the return of stray livestock, through a good point of brand inspection program, by recording some 4,300 brands in the state in the office of Livestock Inspection, enforcing the codes and statutes, and licensing all livestock dealers. Mr. Mahoney said the agency is entirely funded by the industry and receives no General Fund money whatsoever.
Ms. Matteucci stated there are no reorganizational savings in this budget.
Veterinary Medical Services - Page 484
Jack N. Armstrong, Doctor of Veterinary Medicine (D.V.M.), Director, Division of Animal Industry, State Department of Agriculture, distributed an expanded narrative (Exhibit P) on budget page 484. He stated the budget provides for the investigation, diagnosis and control of animal diseases, as well as those diseases of animals that are transmissible to humans. The agency's basic mission is to provide a comprehensive, statewide animal health monitoring system and to serve as the informational hub to assist animal owners, human health-care professionals, and many other state and federal agencies in the management of animals and animal transmitted diseases. There currently are no diseases in the state that would be of concern to either the livestock community or the human health sector.
Regarding the budget request, Mr. Armstrong has only one area of concern, which relates to the payroll expenses. See Exhibit P.
Ms. Matteucci said there are no reorganizational savings in this budget. She added seasonal part-time help would be added back into the budget, which had been inadvertently dropped, as well as the longevity pay which had been omitted as an "oversight."
Insect Abatement - Page 488
Mr. Gronowski stated there is a revolving fund to pay for the insects and weeds control. All funds derived from the agriculture department are reimbursed by landowners or, if not paid, collected by tax liens on the property. Within the last 2 years two major eradications were conducted. He mentioned the drought kills the trees not the insects. When the trees are dry they have no defenses to keep the insects out. Once bark beetles are in a tree it is almost impossible to kill them, and the tree cannot be saved.
Rural Rehabilitation Trust Fund - Page 494
Mr. Ballow distributed a brochure (Exhibit Q) outlining the Agricultural Loan Mediation Program from the State Department of Agriculture. He stated the Rural Rehabilitation Trust Fund is money that was left over from a program started in the great depression, funded by the federal government, primarily to provide loans to farmers and ranchers to help them recover from the effects of the depression.
Senator Jacobsen requested a list of who has loans, and in what amounts, from the Rural Rehabilitation Trust Fund.
Nevada Beef Council - Page 575
Tammy Rae Wright, Nevada Beef Council, testified from written testimony (Exhibit R). She stated the money is spent on research, education and promotion. The agency works closely with health professionals, school teachers, the cattle women. With the National Beef Council the agency works to produce easy and versatile recipes. Although declining, beef is still the number one menu item. Ms. Wright also distributed a fact sheet of bacteria found in meat and symptoms after consumption (Exhibit S).
Mr. Busselman stated:
On the issue of the beef council and the discussions made, the plan we are working on right now with the budget office suggests we would grant the board of agriculture the authority to appoint a subcommittee, probably with one of their members serving as a liaison between the beef council and the board of agriculture. Producers themselves pay the money to do the promotion, and their concern and emotional tie is, if we're going to pay our money to do our promotion, we want to have a say in how that money is spent.
Mrs. Licht stated:
Each year Nevada farms and ranches generate approximately one-third of a billion dollars in personal income, but only make up about 1.3 percent of our state's total income. The $150 million farm value of Nevada's food and fibre translates into $525 million throughout the overall Nevada economy as these products are processed, distri-buted and sold. Agriculture in Nevada supports about 61,000 jobs which is nearly 10 percent of all the jobs in the state. Approximately 5,000 of these jobs are directly farm-related. The rest are associated with the packing, processing, transportation and distribution.
Frederick Dressler, Rancher, concurred with Barbara Curti's views and added, "We don't want to lose sight of where we put the money. Be careful."
There being no further business before the committee, Senator Raggio adjourned the meeting at 10:18 a.m.
RESPECTFULLY SUBMITTED:
Joan McConnell,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
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Senate Committee on Finance
March 25, 1993
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