MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
April 16, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 7:35, a.m., on Friday, April 16, 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 Lawrence E. Jacobsen
Senator Bob Coffin
Senator Diana Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
COMMITTEE MEMBERS ABSENT:
Senator Raymond D. Rawson (Excused)
STAFF MEMBERS PRESENT:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Marion Entrekin, Committee Secretary
OTHERS PRESENT:
Raymond L. Sparks, Chief, Registration Division, Department of Motor Vehicles and Public Safety
Rochelle Summers, Principal Budget Analyst, Budget Division, Department of Administration
Daryl E. Capurro, Executive Director, Nevada Franchised Auto Dealers Association
Fredric W. Harrell, Executive Director, Motorcycle Dealers Association of Nevada
Peter D. Krueger, Nevada Rental Association
Secretary of State - Page 52
Dan Miles, Fiscal Analyst, Fiscal Division, Legislative Counsel Bureau, testified the Governor's recommended budget for the Office of the Secretary of State includes the transfer of a Microcomputer Specialist III to the new Department of Data Processing. Mr. Miles said this transfer is a concern to Secretary of State Cheryl Lau, who does not wish to see a drop in the level of service provided by her office.
SENATOR GLOMB MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR SUBJECT TO A FINAL DECISION REGARDING THE TRANSFER OF THE MICROCOMPUTER SPECIALIST III TO THE DEPARTMENT OF DATA PROCESSING.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Secretary of State Securities - Page 57
Mr. Miles stated the secretary of state expressed concern regarding the new investigator positions that are reflected in the Governor's
Executive Budget as Investigator I's rather than Investigator III's as she had requested. Mr. Miles pointed out that although the new positions requested were listed as Investigator I's, the salary level for these positions was funded at an Investigator III level.
SENATOR O'DONNELL MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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State Treasurer - Page 61
Since the Governor has not yet recommended a requested position of deputy treasurer, Senator Raggio requested this budget be held.
W.I.C.H.E. Administration - Page 172
SENATOR COFFIN MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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W.I.C.H.E. Loan and Stipend - Page 176
Senator Raggio noted the Governor's recommended budget proposes reduced slots for the Physical Therapy, Library Sciences, Law, and Veterinary Medicine programs at the University of Nevada, Las Vegas, and the University of Nevada, Reno.
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Postsecondary Education Regulation - Page 580
Mr. Miles said under the Governor's proposed reorganization plan, this agency will be transferred to the new Department of Business and Industry.
Mr. Miles commented that $535 vacancy savings is recommended to be eliminated from this budget since there are only four employees and no vacancies which would make it impossible to achieve.
Senator Raggio said it is the chairman's position that the $535 be restored increasing the General Fund appropriation and eliminating the vacancy savings in the second year of the biennium.
SENATOR O'DONNELL MOVED TO ADJUST THE BUDGET AS RECOMMENDED BY THE GOVERNOR TO INCLUDE THE $535 INCREASE
FOR THE GENERAL FUND AND ELIMINATE THE VACANCY SAVINGS IN THE SECOND YEAR OF THE BIENNIUM.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Motion Pictures - Page 593
Mr. Miles stated the Division of Motion Pictures is not influenced by the reorganization, and funding has been recommended at 25 percent from the General Fund and 75 percent from a transfer of room-tax funds from the Commission on Tourism.
In response to a request by the Senate Committee on Finance made at the hearing for this budget on March 2, 1993, the division prepared an Enhancement Proposal, Exhibit C, that outlines their enhancement requests. Mr. Miles stated the Fiscal Division prepared Budget Closing Options 1 and 2, Exhibit D, which defines the enhancement requests submitted by the Division of Motion Pictures and reviewed these options with the committee.
Senator Callister commented he believes the division brings a considerable amount of revenue into the state, and he supports Option 1 (Exhibit D) that recommends an increase in the amount of contract services for location scouting of $60,000 in each year 1994-1995, an increase in the General Fund appropriation for fiscal years 1994 and 1995, and an increase in the amount of revenue to be transferred into this budget account from the Commission on Tourism for fiscal years 1994 and 1995.
Senator Callister noted many of the western states are investing far more in the expansion of motion picture production than Nevada, and he believes to remain competitive, it will be necessary to fund this division accordingly.
SENATOR CALLISTER MOVED TO APPROVE THE BUDGET BY ADOPTING ALL OF OPTION 1 TO ADD AN ADDITIONAL $58,000 FROM THE GENERAL FUND AND $170,000 FROM THE COMMISSION ON TOURISM BUDGET IN THE NEXT BIENNIUM.
SENATOR O'DONNELL SECONDED THE MOTION.
Senator Coffin said he is worried about Option 1 versus Option 2 for the cost because of the precedent this may set in terms of increasing this budget and not the budgets for other agencies. He would prefer to see a direct General Fund increase.
Senator Callister stated he still stands by his original motion to support Option 1 since he believes the motion picture industry offers the best promotion opportunities for the state in terms of advertisements through movies that are produced in Nevada resulting in a significant benefit to the general economy.
Senator O'Donnell agreed with Senator Callister and stated the state should invest in the movie industry because this investment will ultimately yield millions of dollars to the state's economy.
Senator Raggio commented although the arguments heard today are persuasive, comparing this budget to all others he would consider it inadvisable to increase the General Fund at this time.
THE MOTION FAILED. (SENATOR COFFIN, SENATOR JACOBSEN, AND SENATOR RAGGIO VOTED NO. SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Senator Raggio noted the motion failed with a tie vote and asked if there is a further motion.
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR AND INCLUDE OPTION 2 TO INCREASE THE BUDGET BY $28,000 FROM THE GENERAL FUND AND $84,000 FROM THE COMMISSION ON TOURISM BUDGET IN THE NEXT BIENNIUM.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Commission on Tourism - Page 602
Senator Raggio stated this budget will now require adjustment due to the action taken on the motion picture budget, page 593.
Mr. Miles referred to Exhibit E, a memorandum dated November 9, 1992, from the commission concerning room-tax revenue projections, and proceeded to review its contents with the committee.
SENATOR O'DONNELL MOVED TO ADJUST THE BUDGET TO ADD THE AUTHORIZED INCREASE IN ROOM-TAX REVENUE, ADJUST THE NEW SALARY POSITION FOR 1995 FOR THE FULL YEAR, AND ADJUST THE RESERVE BALANCE TO COMPLY WITH ACTIONS TAKEN ON THE MOTION PICTURE BUDGET, PAGE 593.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Senator Raggio opened discussion on Senate Bill (S.B.) 220.
SENATE BILL 220: Increases licensing fees for motor vehicle
manufacturers, distributors, dealers, rebuilders and lessors.
Raymond L. Sparks, Chief, Registration Division, Department of
Motor Vehicles and Public Safety (DMV&PS), testified during the budget request preparation process for the 1993-1995 biennium the department faced the problem of a statutory 22 percent cap on their expenditures. S.B. 220 proposes to increase the business-license fee charged by the department from $125 for an initial license and $50 for an annual renewal to $300 for an initial license and $300 for an annual renewal. Mr. Sparks pointed out the fee as presently charged by the department has not been raised since 1983.
According to Mr. Sparks, other types of business licenses such as those required for an auto wrecker, body shop, or salvage pool, are presently at the $300 initial and $300 renewal rate.
Senator Raggio asked what this fee increase is projected to raise in additional revenue, and Mr. Sparks replied approximately $305,000 per year.
Senator Raggio asked if the fee increase proposal had been discussed with the industry.
Mr. Sparks stated generally the industry has been supportive of the need for an adjustment in the fees although they may prefer to see a different fee structure.
Senator Raggio asked where the funds from the fee increase will be used, and Mr. Sparks said this will be used for highway funding.
Senator O'Donnell remarked:
When we codify certain fees and rates inside the law, there eventually comes a time when those fees and costs are way out of line....If you adjust for the Consumer Price Index (CPI) or use the rule of seven you may look at perhaps doubling your money in seven years at 10 percent. In 1990 it should have been $250, but your $300 figure is probably close to accurate for a new applicant. However, the $50 fee going to $300 is not an adjustment in real dollars to a present value in 1983, but is an adjustment upwards....
Mr. Sparks said there was no sophisticated economic analysis that went into the determination of the proposed fees. The program to license and regulate the auto industry is one that is not self-supporting and according to Mr. Sparks costs the state a considerable amount of money. The fees will only nominally offset the total cost of that program. Mr. Sparks stated the department's thoughts were more of equity with other industries that are already charged a $300 renewal fee.
Senator Raggio asked how close the department is at this time to the 22 percent limitation on administrative expenditures from the highway fund.
Mr. Sparks answered the department was very close, probably within a tenth of a percent under the cap. Mr. Sparks further stated although the budget for the department for the upcoming biennium is slightly under the 22 percent limitation, there is a long-term concern regarding future bienniums.
Senator Coffin commented this bill should be considered in light of any other bills the department may have to raise funds, and Mr. Sparks replied the other bills reflected on the agenda (Exhibit A) to be discussed today will also provide some relief toward the 22 percent restriction. Also, there are other measures being discussed that will address the situation.
Mr. Sparks stated the interpretation of the statute that imposes the 22 percent ceiling is not particularly clear, and there may be alternate ways of calculating this.
Senator Raggio asked the Budget Division if the fee increases were reflected in the Governor's Executive Budget under highway funding.
Rochelle Summers, Principal Budget Analyst, Budget Division, Department of Administration, stated she believed the fees were included as proposed revenue to the highway fund.
Daryl E. Capurro, Executive Director, Nevada Franchised Auto Dealers Association, said the association is not against the fee increase proposed by S.B. 220, but feel more of an effort has to be put forth by the DMV&PS in the licensing process as far as checking criminal records and other items necessary for a first-time licensee.
Mr. Capurro said the Nevada Franchised Auto Dealers Association would like to see a bifurcated fee and suggested the same amount of money would be produced by placing a $500 fee on a new licensee application and decreasing the renewal fee to $250 each year. He pointed out that is still a large percentage increase, but there are other licenses within state government that are being charged at a higher rate.
Senator Raggio asked if there would be a sufficient number of new licensees to produce the total projected revenue of about $305,000.
Mr. Capurro qualified the amounts he had previously stated were arrived at after discussion with Mr. Sparks, and are within a $10,000 range of the $305,000 projected as revenue by the DMV&PS.
After a quick calculation, Mr. Sparks said the $500 and $250 fees would produce revenue very close to the $305,000 his department projected with their suggested $300 fee increases.
Mr. Capurro mentioned that at some future time, the committee should review the artificial 22 percent level of funding for the DMV&PS. He stated if the Department of Motor Vehicles and Public Safety is split as suggested by the Governor's reorganization plan, this 22 percent limitation will definitely have to be revisited.
Fredric W. Harrell, Executive Director, Motorcycle Dealers Association of Nevada, stated he polled their 25 members and after discussion with Mr. Sparks and Mr. Capurro, he is certain the association will approve fee increases of $500 and $250 as suggested by Mr. Capurro. Mr. Harrell concurs with the testimony provided by Mr. Capurro.
Peter D. Krueger, Nevada Rental Association, remarked he represents a group of 125 equipment-rental store operators located throughout the state who are involved with the rental of construction-related equipment. The concern of the association, many of which are short-term lessors of motorized construction equipment, is with section 2 of S.B. 220 which states they must comply with the terms and conditions which apply to vehicle dealers.
Mr. Krueger stated the amount of revenue that would be generated by imposing this fee upon equipment-rental store operators would be minimal in comparison with new car and motorcycle dealers. However, this fee would impact upon the costs related to family-owned businesses or small entrepreneurial businesses who lease equipment, especially if the $500 and $300 fee charges are imposed.
Since there are not many individuals getting into the equipment-rental business, Mr. Krueger concedes the individual annual renewal fee of $250 would be more acceptable than the $300 renewal fee suggested by the DMV&PS.
Mr. Krueger commented the fee increase to equipment-rental dealers will be passed on to the consumer who rents the equipment and suggested this increase be phased in to lessen the impact.
Senator Raggio asked how many rental businesses would be influenced by the proposed increase, and Mr. Krueger replied out of 125 rental stores, there would be a total of 18 who would be impacted by the passage of S.B. 220.
Senator Raggio stated the problem is the total amount of revenue this bill would produce is built into the Governor's Executive Budget as overall revenue. Therefore, he is not certain how the committee could reasonably and logically make an exception to the proposal.
Senator Raggio noted the renewal fee proposed by S.B. 220 is recommended to be changed from $50 each year to $300 each year
to make the charge the same as a new application fee. He asked Mr. Sparks, "Where are we with parity in that situation?"
Mr. Sparks replied the judgment of the department is that fees should be raised to the fee level currently imposed for body shops, auto wreckers, and salvage pools of $300 for a new license application and $300 for an annual renewal charge. He explained the procedures required by the department to license those types of businesses are generally similar and the cost to the state to issue those licenses is also equivalent.
Senator Raggio closed the hearing on S.B. 220 and opened the hearing for discussion on Senate Bill (S.B.) 222.
SENATE BILL 222: Makes certain changes concerning licensing with regard to sale or lease of vehicles.
Mr. Sparks explained S.B. 222 would propose to eliminate the current requirement that persons engaged in the occupation of vehicle sales be licensed by the state. He pointed out this was prompted by an attempt to identify areas in the department's budget where expenditures could be reduced.
Mr. Sparks stated his department originally believed the responsibility for ensuring the integrity of vehicle salesmen should rest with the vehicle dealer and the department felt by eliminating the requirement that the salesmen be licensed through the state, no significant harm would occur and the state would realize a savings of approximately $125,000. In subsequent discussions with Mr. Capurro and the vehicle industry, an argument was made that Mr. Sparks believes has merit. That is, the state is in a unique position to perform criminal history checks on applicants for a salesman license. If the responsibility to screen salesmen were vested in the employer, they would not have access to the criminal history records, and the ability to eliminate unfit persons from engaging in vehicle sales would be adversely impacted.
Mr. Sparks further commented Mr. Capurro has indicated the auto dealer industry would not be opposed to adjusting the fees for the salesmen licensing to make the program self supporting, and this would satisfy the department's concerns.
Senator Raggio asked for an explanation of section 1 of S.B. 222.
Mr. Sparks answered the most significant element of the bill is the repeal of Nevada Revised Statutes (NRS 482.352 which deletes the current statute requiring licensing. Section 1 of S.B. 222 specifies grounds for denial and revocation of licenses and deletes the act of allowing an unlicensed salesman to sell or lease any vehicle. Mr. Sparks clarified the amended language in sections 1 and 2 of S.B. 222 is to be consistent with that repeal.
Senator Raggio noted section 2 of S.B. 222 changes the fee to $300 and asked, "Is this affected by the recommendations made in the previous bill?"
Mr. Sparks replied it was his understanding the fee change was done to be consistent with S.B. 220.
Senator Raggio pointed out if the committee amends S.B. 220, they will also have to amend section 2 of S.B. 222.
Senator Glomb asked for clarification, "Since the dealer pays the fee, will the salesmen no longer be required to pay a fee?"
Mr. Sparks explained S.B.222 would delete the requirement that the salesmen be licensed and he would not, therefore, have to pay the current fee for licensing.
Senator Glomb asked how this would result in a net savings to the state.
Mr. Sparks answered the registration division within DMV&PS has anticipated the department could reduce staff by four positions, and the bulk of the savings to the state would be the reduction of personnel costs associated with the four positions. Also, there would be a small amount of savings associated with the cost of the licensing process.
Senator Glomb asked if the four positions are currently filled and Mr. Sparks answered there may be one position that is currently vacant but the other [three] positions are filled.
Senator O'Donnell noted Mr. Sparks is testifying against a bill that was introduced by the department. He concurs the purchase of an automobile is a major purchase and to have someone unlicensed and without a background check would not be in order. He asked, "If you scrapped the bill but keep the repealed text in, and adjust the payment for licensure upwards to accommodate the shortfall, would that work?"
Mr. Sparks believed the suggestion made by Senator O'Donnell would be a reasonable change to the bill and would satisfy the department's concerns which are primarily revenue-neutral concerns.
In response to an inquiry by Senator Raggio, Mr. Sparks explained currently the fee charged is $48 for an initial license of which $38 is a pass through and represents the cost incurred by the department for a criminal history check.
Following up on Senator O'Donnell's suggestion, Senator Raggio asked what the increase would have to be to a salesman, either for a new license or a renewal, to make this proposal cost effective to the state.
Mr. Sparks stated he reviewed a scenario where the fee would be $50 for a new license, $50 for a renewal license, and $25 for the transfer of a license. He also looked at a scenario where the fee would be $75 for a new license, $40 for a renewal, and $20 for a transfer. Both of the scenarios were in the approximate cost figures discussed. It is his understanding Mr. Capurro would prefer the second of the two scenarios outlined.
Mr. Sparks wished to point out the department performed a survey of some of the other fees that are charged in the state for other types of occupational licensing. The State Contractors' Board, for example, charges $270 for the initial licensing of a plumber, builder, or electrician and an annual renewal fee of $120. The Manufactured Housing Division charges $163 for the initial licensing fee for salesmen of manufactured homes with a renewal fee every 2 years of $85. Real estate agents are charged $195 for a new license and an annual renewal fee of $140. Comparing the fees currently charged for vehicle-salesmen licenses to some of the other occupational licensing fees, Mr. Sparks believes the department's fees are unusually low.
Senator Jacobsen asked how sales of farm machinery and construction machinery is handled.
Mr. Sparks explained that salesmen involved in the sale of this type of equipment would not be licensed by the department as long as they are restricted to off-road vehicle sales.
Senator Coffin asked if there are any assembly bills pending for fee increases to assist the department in remaining within the 22 percent limitation or cap.
Mr. Sparks answered there are no assembly bills that were introduced specifically to deal with the revenue issue or the 22 percent ceiling.
Senator Coffin asked if there has been consideration given to licensing mopeds and Mr. Sparks replied he is not aware of a bill that would require the registration of mopeds.
Senator Coffin noted that S.B. 220 and S.B. 222 propose to reduce expenditures of the Department of Motor Vehicles and Public Safety. In order to do this, the department will be eliminating four positions, and he is concerned about the service that will not be provided after these positions are removed. He asked Mr. Sparks what positions would be cut.
Mr. Sparks replied the department would eliminate two investigators and two of the clerical staff that process the license applications.
Senator Coffin pointed out that if these positions are held by individuals with many years of state service, they could bump somebody who has less time in service and this could result in a hardship to the individuals involved as well as disrupt the services rendered by the department.
Mr. Sparks said he looked at the number of complaints that the department investigated against vehicle salesmen in calendar year 1992, and there were 305 such complaints which he believes is a significant number.
Senator Raggio asked if the proposal were to increase the fees to cover the cost associated with the DMV&PS, and retain the licensure of salesmen, how would this effect the fiscal note?
Using the scenarios previously mentioned Mr. Sparks said the fiscal note would be amended to reflect additional revenue of about $100,000 to the state, depending upon the scenario that would be selected. Also, the four positions would not be eliminated.
Senator Raggio inquired, "Instead of $140,000 savings, we would gain another $60,000?"
Mr. Sparks responded, "No, sir. We would pay for that $120,000 and in addition we would receive approximately $100,000 in additional revenue."
Mr. Capurro stated the Nevada Franchised Auto Dealers Association opposes S.B. 222 in its current form for the reasons previously given.
Mr. Capurro wished to add:
If you have 305 complaints and you did not license the activity, it would be highly unlikely there would be attention given to the consumer problems that would result. We oppose the elimination of salesmen licensing because we would have no way of checking, particularly outside the state, the background of anyone who might apply. Since it is usually the second largest purchase a person makes, it is protection for us and the consumer. We would go along with the suggestion that the repealed section of the bill be adjusted to reflect whatever is necessary to bring the program to a neutral basis. The figures Mr. Sparks gave us, $75 for a new license, $40 for a renewal, and $20 for a transfer... I thought that would be revenue neutral. If what I heard was there would be an additional $100,000 over and above costs raised, we might modify our position on this.
Because he shares Mr. Capurro's concerns, Senator Raggio clarified if the Senate Committee on Finance plans to process S.B. 220 and S.B. 222, he will first refer the bills to Senator O'Donnell to act as a committee of one to develop appropriate fiscal notes.
As a final comment concerning S.B. 222, Mr. Capurro stated more effort goes into the initial licensing process and, therefore, there should be a bifurcation of those fees.
Mr. Harrell stated he concurs with the statements made by Mr. Capurro and said the Motorcycle Dealers Association of Nevada opposes the passage of S.B. 222 as presently written.
Mr. Harrell also concurred the association will back the $75, $40, and $20 fees suggested by Mr. Sparks providing this will result in a revenue-neutral situation. However, if the implementation of these fees will result in a $100,000 windfall for the state, they will not be in favor of the fees.
Senator Raggio reiterated there would be a windfall from S.B. 222 as it exists of $140,000 and the committee does not wish to jeopardize this while looking into the additional $100,000 revenue that would result from the $75, $40, and $20 fees suggested. Therefore, he will delay action on S.B. 220 and S.B. 222 pending Senator O'Donnell's recommendations.
Senator Raggio concluded discussion on S.B. 222 and opened the hearing for discussion of Senate Bill (S.B.) 333.
SENATE BILL 333: Establishes fee for dealer's report of sale and for special permit that enables buyer of motor vehicle to operate motor vehicle for 10 days.
Mr. Sparks stated S.B. 333 would establish a $5 fee for a Dealer Report of Sale form and the form the DMV&PS refers to as an Interim Finance Permit. In the case of the sale of a vehicle by a vehicle dealer, if a Contract of Sale is entered into and time is necessary to perfect that contract, a vehicle dealer can issue an Interim Finance Permit to allow the operation of the vehicle for a period not to exceed 10 days. After the Contract of Sale is entered into, the Interim Finance Permit form is removed from the vehicle at which time the dealer issues the Dealer Report of Sale form which confirms the sale and allows the purchaser to drive the vehicle for 10 days and get it registered with the DMV&PS. The department currently produces these forms and furnishes them to the vehicle dealers without charge. As an attempt to address their revenue problems, the department has proposed a fee be established for both of these forms. Mr. Sparks anticipates revenue of approximately $1.1 million will be raised in each calendar year from this fee.
In addition to the generation of revenue that will be raised by charging this fee, Mr. Sparks said the department also feels better control will be provided over the forms. Since they are free at the present time, there is little incentive for a dealer to exercise strict control over the books of forms.
Senator Raggio asked why this and the other fees suggested today are not considered a tax.
Mr. Sparks replied in the case of the fee of the Dealer Report of Sale form, there is an expense to the state to print and distribute those forms and the department is attempting to recoup some of that cost as opposed to some type of a levy on an activity or business operation.
Mr. Sparks commented it would be difficult to estimate the revenue from this source precisely, but the department believes the estimate of $1.1 million per year, or $2.2 million in the biennium, is a close approximation. He explained the department's current usage of the form is 350,000 per year but since there is no charge for the forms at present, they believe the actual usage will decrease substantially when there is an incentive to be more cautious with the forms.
Senator Raggio asked if the proposed revenue from this fee is reflected in the budget at this time.
Ms. Summers replied, "I do not know. The Budget Division will have to report back to the committee concerning this."
Senator Raggio asked if the revenue from this fee will go to the highway fund, and Mr. Sparks answered in the affirmative.
Senator Coffin asked if it is possible that people using the forms at the present time could be operating an unlicensed vehicle simply by generating a new form when needed and placing it in the window of the vehicle.
Mr. Sparks answered the department has had some cases where this has occurred since an individual who has access to a pad of these forms can continue to issue them for a vehicle and escape the registration requirements in that manner.
Senator Coffin asked if there are 200,000 transactions per year to generate revenue of $1 million.
Mr. Sparks answered this would apply for sales of new and used vehicles through dealers and he believes there are at least 200,000 vehicle transactions done each year.
After previous discussion with Mr. Capurro, Mr. Sparks wished to state for the record that it would be the department's intention to allow credit to the dealers for any forms that may be spoiled or voided. The DMV&PS would not expect the dealers to absorb the cost of those forms.
Senator Raggio asked if this information should be added as an amendment to S.B. 333.
Mr. Sparks said the department currently is doing this in the case of Emission Certificate forms and the process is not specified in statute, yet the department does allow the credit in those cases of voided or spoiled forms.
Mr. Capurro said he has some concern because he does not believe it would cost $5 to produce a Dealer Report of Sale form. He further stated the auto dealers association would prefer to see the system remained unchanged and are opposed to the passage of S.B. 333 as written.
Mr. Capurro remarked:
...What I would request of you....Aside from the finance permit, the Dealer Report of Sale is really an extension of the title and registration process and, therefore, should be collected upon registration by DMV&PS at the time it is presented at the window. If it is the intent of this committee to act with respect to whether the fee is $5, $3, $2, or whatever...we would request you consider making this a fee that is collected at the time the form is brought to the window for registration of the vehicle.
Senator Raggio asked if S.B. 333 were passed, would the fee be passed onto the customer at the time of purchase of a vehicle, and Mr. Capurro stated the auto dealers would pass that cost on. However, the dealers do not collect fees for the state at the present time, and Mr. Capurro feels it would be faster and easier for the DMV&PS to collect the fee if S.B. 333 is passed.
Senator Raggio asked Mr. Sparks if the department anticipates this fee would be paid to the dealer.
Mr. Sparks stated the process they had envisioned was the department would sell the books of forms to the dealer and it would be at the dealer's discretion whether to pass that cost onto the consumer or simply absorb it. It would be analogous to the situation of Emission Inspection Certificates that are sold by the department to the emission station and at the time of performing the inspection, the emission station operator charges the customer $6 to recoup his costs since he had already paid the department.
Mr. Harrell stated the motorcycle dealers would like to see the process left unchanged, but if changed, they concur with Mr. Capurro that the fee should be collected by the DMV&PS.
Senator Raggio closed the hearing on S.B. 333 and asked the Budget Division to indicate as soon as possible to what extent the potential revenues will be reflected in the Governor's Executive Budget.
Senator Raggio requested that S.B. 220, 222, and 333 be assigned to Senator O'Donnell to review in order to make recommendations to the committee and determine what fiscal notes may be necessary.
Nevada Magazine - Page 607
SENATOR O'DONNELL MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR COFFIN AND SENATOR RAWSON WERE ABSENT FOR THE VOTE.)
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Indian Commission - Page 1013
Mr. Miles referred to Exhibit F, a memorandum from Gerald W. Allen, Acting Director, Nevada Indian Commission, dated April 6, 1993, in which it was indicated the commission does not wish to move their office from Reno to Carson City, Nevada, into state-owned space.
Senator Raggio pointed out the commission only has 1.75 positions and if they are required to move to Carson City, they have requested their management assistant be increased to a full-time position.
Dissertation ensued by the committee concerning the cost of moving the commission to Carson City versus having them remain in leased space in Reno.
Senator Jacobsen commented there are two buildings located at Stewart that were dedicated to the Indians. One of the buildings has never been used but with some renovation he suggested this building could be used to house the Indian Commission.
Senator Raggio remarked he believed the building needed a substantial amount of repair before it could be occupied.
Senator Jacobsen believes Stewart would be an ideal location for the Nevada Indian Commission and would not be an added cost to the state to house the office there.
Senator Raggio stated he would hold this budget and asked Senator Jacobsen to determine the cost of repair to the building at Stewart before a decision can be made regarding the location of the office for the Nevada Indian Commission.
State Occupational Information Coordinating Committee - Page 1111
Mr. Miles stated this is a federally-funded budget.
SENATOR GLOMB MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Committee to Hire Handicapped - Page 1116
Mr. Miles stated the agency has not yet responded to a request made at the time of their budget hearing concerning fees.
Senator Raggio requested this budget be held pending receipt of a fee schedule.
* * * * *
Public Employees Retirement System - Page 1647
Senator Raggio noted this budget was amended to reflect a reduction of $225,000 in the first year and $283,000 in the second year of the biennium.
SENATOR O'DONNELL MOVED TO APPROVE THE BUDGET IN ACCORDANCE WITH THE ADJUSTMENT SUGGESTED BY STAFF AND THE AMENDED BUDGET SUBMITTED BY THE AGENCY.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Mansion Maintenance - Page 5
Senator Jacobsen stated he has not yet had a meeting with the first lady regarding this budget.
Senator Raggio requested this budget be held pending a report from Senator Jacobsen.
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Lieutenant Governor - Page 14
Senator Raggio referred to Exhibit G, a letter dated March 31, 1993, from the Lieutenant Governor regarding the lack of clerical help in her Las Vegas office and asked what the cost of this position would be to the General Fund.
Mr. Miles replied there is an existing administrative secretary in the north and the salary, including fringe benefits, is approximately $31,000 annually.
Senator Raggio noted during the last session an attempt was made to enhance this budget by increasing the salary of the Lieutenant Governor, but the Lieutenant Governor rejected this proposal by stating she would not accept a salary increase.
Senator Glomb stated the Lieutenant Governor made a strong appeal for her need for clerical help for the office in Las Vegas, Nevada.
SENATOR GLOMB MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR WITH THE ADDITION OF A FULL-TIME CLERICAL POSITION FOR THE LAS VEGAS, NEVADA, OFFICE.
SENATOR CALLISTER SECONDED THE MOTION.
Senator Raggio asked if the Budget Division had any problems with the motion made by Senator Glomb.
Ms. Summers replied, "This is the first I have heard of it. I do not have any comments."
Senator Callister stated he has had occasion to visit Lieutenant Governor Sue Wagner at her office in Las Vegas and feels it is ridiculous for her not to have clerical support in southern Nevada. He further commented it is inappropriate to take someone to meet an elected-statewide constitutional officer and not have an individual in the office to properly greet the party.
Senator Raggio concurred with Senator Callister that the Lieutenant Governor should have clerical assistance in southern Nevada and indicated he would accept the motion made by Senator Glomb, but the motion should also state an equivalent salary should be authorized for the clerical assistant in the Las Vegas office.
SENATOR GLOMB MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR WITH THE ADDITION OF A FULL-TIME CLERICAL POSITION FOR THE LAS VEGAS OFFICE WHOSE SALARY SHALL BE THE SAME AS THE (SIMILAR) POSITION IN THE NORTH.
SENATOR CALLISTER SECONDED THE MOTION.
Inherent with the second motion by Senator Glomb, Senator Raggio requested staff to develop the numbers that would accommodate the motion.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
National Association of Insurance Commissioners - Page 345
Mr. Miles indicated in the major budget for the Department of Insurance is a proposal that the National Association of Insurance commissioners seek national accreditation, but the department's budget does not provide for training funds. He suggested a letter of intent should be drafted to direct the agency to use a portion of their funds for training to upgrade the skills of staff members to meet accreditation requirements.
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR O'DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
Upon concurrence from the committee, Senator Raggio stated a letter of intent will be directed to utilize whatever portion of funds is necessary for training of staff members to meet accreditation requirements and requested this information be inherent in the motion.
* * * * *
Insurance Cost Stabilization - Page 351
SENATOR GLOMB MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR O'DONNELL SECONDED THE MOTION .
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Commission for Hospital Patients - Page 361
Patricia Jarman, Executive Director, Commission for Hospital Benefits, appeared before the Senate Committee on Human Resources and Facilities recently and according to Senator Glomb, made an excellent case for the need of an additional position to assist consumers to recover costs associated with charges from the provider of services.
Senator Glomb pointed out the commission recovered $731,000 in behalf of consumers in the state during the period July 1991 to April 1, 1993, and she feels an additional position would be justified to assist the two individuals that perform all of the duties associated with the commission.
Senator O'Donnell suggested waiting until the 1995 session of the legislature to fill an additional position because the work load may justify doing so at that time.
Senator Glomb volunteered to seek additional information from the commission to determine how to fund the additional position since the revenue involved is not General Fund money.
Senator Callister commented he would be interested in knowing the volume of the caseload for the commission. He stated this is a service that is significantly utilized by seniors in the southern Nevada area and he believes the figure reflected in the Performance Indicators of two cases per day is low.
Senator Glomb advised she would also secure this information and will report her findings to the committee.
Senator Raggio requested this budget be held pending receipt of information from Senator Glomb.
Insurance Education and Research - Page 365
Senator Raggio noted this budget will be included in the same letter of intent to be issued for accreditation purposes for the National Association of Insurance Commissioners, page 345.
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Insurance Recovery - Page 370
SENATOR O'DONNELL MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Prepaid Funeral and Cemetery - Page 371
Mr. Miles said as requested by the commissioner, the revenue and expenditures related to the financial examinations of funeral and cemetery service are transferred to the Insurance Examiners' Fund on page 358. All other fees collected are deposited to the General Fund. However, NRS 689.710 and NRS 452.380 require those fees be deposited in the regulatory account for the Department of Insurance.
Mr. Miles referred to Exhibit H, a suggested bill draft to change the statutes to allow the examination fees to flow through to the Insurance Examiners' Fund and license fees to the General Fund. He pointed out the agency is doing it this way anyway.
Senator Raggio concluded if the budget is to be approved, a bill draft should be recommended to make the changes as suggested by Mr. Miles.
SENATOR GLOMB MOVED TO REQUEST A BILL DRAFT BE PREPARED TO AMEND NRS 452.380 AND NRS 689.710 TO ACCOMMODATE APPROVAL OF PREPAID FUNERAL AND CEMETERY BUDGET, PAGE 371.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
SENATOR O'DONNELL MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR AFTER ADJUSTMENT IN ACCORDANCE WITH THE STAFF RECOMMENDATION (EXHIBIT H) WHICH DELETES EXAMINATION AND CEMETERY FEES AND ALL OTHER REVENUES, AND A CORRESPONDING ADJUSTMENT FOR EXPENDITURES.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
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Financial Institutions - Page 394
Mr. Miles provided an explanation to the committee of Exhibit I, memorandums from L. Scott Walshaw, Commissioner, Division of Financial Institutions, Department of Commerce, concerning changes to this budget account. If the proposal outlined in the memorandums is accepted, the adjustment to the budget would be to include $2,775 in the first year of the biennium and $3,060 in the second year of the biennium for equipment repair.
Mr. Miles explained this budget is funded by the General Fund but their costs are assessed to the financial institutions.
SENATOR O'DONNELL MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR WITH AN ADJUSTMENT TO INCLUDE $2,775 IN THE FIRST YEAR OF THE BIENNIUM AND $3,060 IN THE SECOND YEAR OF THE BIENNIUM FOR EQUIPMENT REPAIR.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Financial Institutions Investigation - Page 399
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Audit Program - Page 401
SENATOR COFFIN MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Real Estate Administration - Page 404
Mr. Miles stated there are no recommended changes to this budget account but there may be a problem with the rent figures in this budget. The Budget Division is checking and will report their findings. Rents may have to be adjusted in a number of budgets once all the figures are verified.
Mr. Miles said there is a Microcomputer Specialist position in this budget and once a decision is made on data processing consolidation, this budget may have to be adjusted to determine the proper location of the position.
Mr. Miles also indicated as part of the proposed reorganization, the budget would have reorganization savings of $36,640 in fiscal year 1994, and $46,505 in fiscal year 1995, which is equal to an accountant position.
Senator Callister asked that action on this budget be deferred until a final determination is made regarding the position decisions that have to be reconciled as explained by Mr. Miles.
Senator Raggio stated at the request of Senator Callister the committee will defer action pending decisions regarding the value of positions.
Real Estate Education and Research - Page 409
SENATOR GLOMB MOVED TO ADOPT THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Real Estate Investigative Fund - Page 412
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Real Estate Recovery Account - Page 414
SENATOR COFFIN MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR GLOMB SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Manufactured Housing Fund - Page 416
Mr. Miles stated there are no changes recommended to this budget but suggested there may be a rent adjustment proposal that will be submitted from the Budget Division.
Mr.Miles also stated in this budget there is a transfer reflected to the new Department of Business and Industry.
Senator Raggio said he would accept a motion to approve the budget as recommended by the Governor subject to any adjustments.
SENATOR CALLISTER MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR SUBJECT TO ANY ADJUSTMENT FOR RENT AND SUBJECT TO THE APPROVAL OF THE BUSINESS AND INDUSTRY BUDGET UNDER THE REORGANIZATION.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Mobile Home Parks - Page 420
Mr. Miles stated there may be a rent adjustment in this budget account which is being investigated by the Budget Division.
SENATOR O'DONNELL MOVED TO APPROVE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Lot Rent Subsidy - Page 423
Dissertation took place between the committee members regarding information that was to be provided to the committee regarding
an annual fee assessment to subsidize rent for low-income mobile home owners, and procedural regulations regarding income limitations and the number of approved applicants determined eligible to receive a low-rent subsidy.
Mr. Miles stated the Manufactured Housing Division may need to adjust their expenditure categories after July 1, 1993, when a Lot Rent Trust Subsidy fund for low-income owners of mobile homes has been implemented. The Manufactured Housing Division has asked for a letter of intent to give them [the division] the option to appear before the Interim Finance Committee for funding purposes.
Bob Guernsey, Deputy Fiscal Analyst, Fiscal Division, Legislative Counsel Bureau, referred the committee to Exhibit J, a memorandum dated April 15, 1993, from Joan Clements, Administrator, Manufactured Housing Division, Department of Commerce, concerning this budget account.
Mr. Guernsey said at the request of this committee, he contacted Ms. Clements who outlined the procedures her division will follow in reference to the Lot Rent Trust Subsidy. These procedures are reflected in Exhibit J.
Mr. Guernsey mentioned one of the issues of interest to the committee was how Ms. Clements would handle the distribution of funds to be used for low-income applicants. He believes she plans to allocate assistance to eligible applicants on a first-come-first-serve basis but her decision on this may have to be revised in the future since she is not certain how many people will be eligible for the subsidy.
Senator Coffin was surprised to hear that Ms. Clements had not yet made an effort to determine eligibility by contacting a social services office in each of the larger counties, as he had suggested during her budget hearing on March 2, 1993.
Mr. Guernsey replied Ms. Clements indicated she had made some attempt to determine the number of individuals who would be eligible for the subsidy, but she is not yet comfortable with any of the information she has received thus far. She feels she will not have a definite number until the program is operational.
Senator Raggio stated this budget will be held pending receipt of further information from the Manufactured Housing Division.
Senator Raggio adjourned the hearing at 10:25 a.m.
RESPECTFULLY SUBMITTED:
Marion Entrekin,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
April 16, 1993
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