MINUTES OF THE
SENATE COMMITTEE ON GOVERNMENT AFFAIRS
Sixty-seventh Session
January 25, 1993
The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 1:30 p.m., on Monday, January 25, 1993, in Room 227 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator Ann O'Connell, Chairman
Senator Sue Lowden, Vice Chairman
Senator William J. Raggio
Senator Dean A. Rhoads
Senator Thomas J. Hickey
Senator Leonard V. Nevin
Senator Matthew Q. Callister
STAFF MEMBERS PRESENT:
Caren Jenkins, Senior Research Analyst
Diana Gamble, Committee Secretary
Ricka Benum, Committee Secretary
OTHERS PRESENT:
Darrel R. Daines, State Controller
Doug Dickerson, City of Las Vegas
Marvin A. Leavitt, City of Las Vegas
Larry L. Wissbeck, Chief Deputy Secretary of State
Gentty P. Etcheverry, Nevada League of Cities
Nancy J. Howard, Nevada League of Cities
Janice Fondi, Management Assistant, Legislative Liaison, State Treasurer
Brian Krolicki, Chief Deputy Treasurer
Henry Etchemendy, Nevada Association of School Boards
Robert Seale, State Treasurer
Ken West, Chief Deputy Controller
John Callister, State Controller's Office
Chairman O'Connell called the meeting to order and asked the secretary to call the roll. She opened the hearing on Senate Bill (S.B.) 49.
SENATE BILL 49: Revises procedure for payment of claim from state treasury made pursuant to legislative appropriation or authorization.
Darrel Daines, State Controller, State of Nevada and Bob Seale, State Treasurer, State of Nevada, introduced themselves to the committee and stated they were both in support of S.B. 49. Mr. Daines explained the federal government passed the Cash Management Improvement Act of 1990 which was suppose to be effective in November of 1992. Mr. Daines said he has been able to get this act postponed until July 1993. Mr. Daines continued to explain that S.B. 49 requires a substantial change in the way grants are accounted for to the federal government. Mr. Daines said when the federal government gave any of the agencies a federal grant the agency could request the money be transferred to the State of Nevada and our state could spend it at the appropriate time. The federal government realized how much money they were losing in interest because of this way of transfer and in response to that loss, the federal government developed the Cash Management Improvement Act over the last 10 years to try to eliminate the receipt of money from the federal government before it was necessary to actually spend the money in the state. He clarified by telling the committee the federal government wanted the State of Nevada to draw federal money out for welfare recipients on a Wednesday after the checks were issued and sent on the preceding Friday because the checks were not at the bank until that Wednesday. This would preclude the State of Nevada from paying interest to the federal government for drawing the money in advance.
Mr. Daines added other agencies which require matching funds from the federal government had to come up with a certain amount of money of their own. These agencies would spend their own money first and then draw from the federal government.
Therefore, Mr. Daines stated the point of S.B. 49 was to get to a point where the State of Nevada does not owe the federal government any interest and the federal government does not owe the State of Nevada any interest as the transaction of business goes from one agency to another.
Chairman O'Connell asked what the Cash Management Improvement Act was going to do when it became effective. Mr. Daines answered this act has complicated both the treasurer's office and the controller's office because Mr. Seale would have to immediately request funds from the federal government when the money is needed. The two offices would have to expand the accounting of all the federal grants in detail which they have never had to do before this Cash Management Improvement Act was in effect.
Chairman O'Connell stated the attorney general's office had mentioned an accounting procedure at a previous meeting and asked Mr. Daines if the Cash Management Improvement Act applied to the attorney general. Mr. Daines was not sure if his office had a grant from the attorney general's office.
Chairman O'Connell asked Mr. Daines if his intention in the bill was to delay the timing of the deposits from his office. He answered she was correct in her statement and added this bill was not going to make a lot of difference in the way their office had been transacting business. He explained when the legislature makes appropriations, it is done in the anticipation of revenues being generated at a later date. The language in S.B. 49 makes it possible for the state controller and state treasurer to issue the checks to welfare recipients on Friday and then not request the money from the federal government until Wednesday of the following week. The money is transferred instantly after the State of Nevada and the federal government agree what the delay time will be between the time of the issue of the checks and when they clear the bank. Mr. Daines told the committee the State of Nevada would have to enter into a contract with the federal government in order to carry out this proposed money transaction.
Chairman O'Connell asked Mr. Daines to clarify whether or not S.B. 49 would make our state not have to pay interest to the federal government. Mr. Daines agreed and added if our state continued to operate at the current procedure they are now using for moving money, we would be paying about $800,000 to the federal government for using their money in advance to our actual need.
Senator Raggio pointed out as the system now is the federal government will charge interest to the State of Nevada if the money is actually received before the money is drawn out of the bank. Senator Raggio pointed out that Mr. Daines would have no control over when the recipient of the welfare check cashed the check. Mr. Daines answered that his office would negotiate a contract with the federal government upon the known money transactions from experience from their records.
Senator Raggio clarified what Mr. Daines had said by stating Mr. Daines's office would negotiate procedure for receiving the federal government money and dispersing the money in a way which would make the State of Nevada pay no interest. Mr. Daines referred to what Senator Raggio was describing as a "revenue neutral position".
Mr. Daines then referred to Exhibit C to request an amendment to S.B. 49 referring to the lined-out portion of Exhibit C as the part of the bill which his office and State Treasurer Bob Seale's office would suggest be eliminated.
Chairman O'Connell mentioned the Cash Management Improvement Act would become effective on July 1, 1993 and asked Mr. Daines if it would be helpful to him if S.B. 49 could become effective upon passage and approval. Mr. Daines answered it would be very helpful if Chairman O'Connell's suggestion were possible. The chairman stated as long as the committee was asking for an amendment on S.B.49 it would also ask for a provision which would make the bill effective upon passage and approval.
Senator Nevin asked Mr. Daines to explain further the proposed amendments to S.B. 49. Mr. Daines answered any language which had a line drawn through it in Exhibit C would make the bill operative for his office.
There was no opposition testimony to S.B.49. With no further questions from the committee, Chairman O'Connell closed the hearing on S.B. 49 and opened the hearing for testimony on Senate Bill 52.
SENATE BILL 52: Allows constitutional officers to submit budgets directly to legislature.
Mr. Daines, introduced Bob Seale, State Treasurer, State of Nevada, who was seated with him to show his support for S.B. 52. Mr. Daines read his testimony verbatim from Exhibit D.
Senator Callister asked Mr. Daines if he had done an informal study of other states to ascertain whether or not Nevada was normal in its treatment of elected constitutional officers. Mr. Daines answered that there were only 18 controllers elected in other states with the remainder being appointed. Senator Callister persisted with the same question as to what the other 49 states' policies were as to their budgets. Both Mr. Daines and Mr. Seale stated they had not looked into what other states had been doing in relation to the proposed legislation in S.B. 52.
Senator Callister asked permission of the chair for Mr. Daines and Mr. Seale to get any information they could from other states which would relate to the laws in the State of Nevada as to constitutional officers and their budgets.
Chairman O'Connell asked for further testimony on S.B. 52. She then closed the hearing on S.B. 52 and opened the hearing on Senate Bill 53.
SENATE BILL 53: Requires certain state officers, departments and commissions to deposit money directly in financial institution designated by state treasurer.
Robert Seale, State Treasurer, State of Nevada, spoke in favor of S.B. 53 explaining the bill made changes to the existing law in two ways. He said the existing language in the statutes state all agencies would deposit their money with the state treasurer's office. Since Mr. Seale has taken office, the agencies have been taking their deposits directly to the bank and informing the treasurer's office of the transaction. S.B. 53 would allow the agencies to make deposits directly in the bank by statute.
Mr. Seale continued explaining S.B. 53 would eliminate a reporting process in his office which his staff would prepare at the end of each day as a culmination of the agencies' deposits. Mr. Seale stated that each morning the bank would report to his office the total amount of the deposits made the day before from the various agencies. He was asking the committee to do away with the necessity to keep a report of individual deposits from agencies. Mr. Seale said the report from the bank was sufficient information for his office to proceed with the recording of deposits for the records at the State Treasurer's office and would make the process more modern for his staff.
Senator Raggio asked Mr. Seale if there was a concern with the State Treasurer's office losing some control of the funds when an agency would make a direct deposit. Senator Raggio indicated there might be a need for Mr. Seale's office to monitor the agency in depositing the money in a correct account or to monitor the amount of the deposit. Mr. Seale answered from time to time there is a problem with agencies putting money in the wrong account but he continued this problem would continue whether or not the agencies were reporting to him or not. Mr. Seale further explained his office has procedures to check each agency and their deposits and if there was a mistake, he would be advised of the error.
Senator Hickey wanted to know if an agency ever needed to notify the state treasurer's office of its deposit. Mr. Seale said that he would use the bank's information rather than the report for each agency. Senator Hickey asked why the system was now in place where the individual agencies were reporting to Mr. Seale's office. Mr. Seale answered the present system was in place because their previous electronic record-keeping technology had not been developed as is presently now in place. He said his office had updated their record- keeping ability and it was completely unnecessary for the agency to report the amount of their daily deposits.
Chairman O'Connell asked Mr. Seale if the State of Nevada had in excess of 346 different bank accounts, some of which were not authorized. Mr. Seale answered in the affirmative as to the number of accounts. He did not know if all the accounts were authorized but he assumed every bank account was an authorized account. Mr. Seale explained there were some bank accounts which were outside the control of the treasurer's office but that he was attempting to identify those accounts. Mr. Seale stated there was presently some pending legislation to reduce the number of bank accounts now open because of the impracticality of so many accounts.
Chairman O'Connell asked Mr. Seale why the wildlife agency was allowed 10 days to accumulate money when the other agencies were not allowed those days. Mr. Seale stated he did not know why the Department of Wildlife was allowed the time because it was in force before he took office.
Chairman O'Connell continued in her questioning about the agency accounts asking Mr. Seale why there was a $10,000 balance allowed in each account before a deposit had to be made. Mr. Seale assumed the amount of $10,000 seemed to be practical so that each agency would not have to continue to make numerous trips to the bank.
Chairman O'Connell continued stating the audits prepared during the interim shows that an agency does not make regular deposits. She again questioned why an agency was allowed to accumulate $10,000 and if Mr. Seale thought it was for the purpose of not making numerous deposits. Mr. Seale affirmed each agency was allowed to accumulate $10,000 but added it was not good practice.
Senator Nevin reminded Mr. Seale the Nevada State Department of Motor Vehicles would hold on to money longer rather than making regular deposits. He continued to state to Mr. Seale the intent of the committee was to make each agency make regular deposits by mandate. Mr. Seale agreed there was a problem because each agency did not deposit frequently which caused a tremendous amount of money to sit rather than being invested. Mr. Seale stated he did not know how much money was idle before being deposited but he guessed the figure would be very large.
The chairman asked Mr. Seale to provide language for legislation which would help correct the problem of undeposited money in various agencies. Mr. Seale stated he would be glad to provide that information.
Senator Raggio defended the wildlife agency explaining it was difficult for various people out in the field to have to be mandated to deposit all their money in a time limit. Senator Raggio said legislation was going to be proposed which would require agencies to deposit money on the next working day. It would not be very practical for the Department of Wildlife to comply with that requirement.
Chairman O'Connell expressed a concern over the wildlife agency having in their possession any amount of cash and asked Mr. Seale to check if the Department of Wildlife possessed cash for a long period of time and how much cash was in their possession during a certain period of time.
Senator Nevin stated it should be simple for any agency to make a deposit because of the electronic age in which we now live. He believed any agency could make a deposit with the telephone. Mr. Seale said if any payment was made in the form of a personal check or any other instrument of money, an agency would have to physically present that check to a bank. Senator Nevin said if any agency has cash in its possession, he would like to see it deposited everyday regardless of the amount so that the State of Nevada would not lose any interest.
Chairman O'Connell closed the hearing on S.B. 53 and opened the hearing of Senate Bill 54.
SENATE BILL 54: Requires public body to retain permanently minutes of its public meetings.
Marvin Leavitt, City of Las Vegas spoke on behalf of S.B. 54. Mr. Leavitt explained the statutes require the keeping of public minutes for 5 years, however, the Nevada Administrative Code provide for to minutes be kept permanently. He testified there were so many things in public body minutes that have a permanent application such as zoning changes and bond issue approvals, where it is necessary many years in the future to go back and reference the minutes. Occasionally a new clerk would use the statutes and would destroy all the minutes after 5 years which would cause problems. S.B. 54 would conform the statute to the Nevada Administrative Code.
Senator Rhoads asked if there was a fiscal note involved with S.B. 54. Mr. Leavitt answered he had not seen the fiscal note and added the Nevada Adminstrative Code provides for minutes and records to be kept permanently, therefore there should be no need for any fiscal note.
Senator Rhoads stated the counties have gone on record requesting money to accompany any mandate coming from the legislature. Mr. Leavitt restated there was no change in existing policy, there should be no cost.
Senator Raggio expressed a concern about adopting Nevada Administrative Code which would mandate the keeping of records permanently when the statutes stated 5 years was the amount of time to hold records. Senator Raggio did not agree with the word permanently in S.B. 54 because of the high amount of paper which would be generated and have to be stored. Mr. Leavitt said the minutes have a permanent nature because the subject matter makes them important enough to be kept on a permanent basis. Mr. Leavitt suggested an elimination of the 5-year limitation of keeping records from the statutes and let the Nevada Administrative Code govern the record- keeping system. Mr. Leavitt continued to explain the inconsistency of two separate requirements for record keeping which is confusing to personnel.
Senator Raggio persisted with his concern of the enormous amount of paperwork involved and storage space needed for permanent record keeping considering all of the different record-keeping bodies in the State of Nevada.
Mr. Leavitt said he believes every office was presently keeping all their minutes on a permanent basis because of the Nevada Administrative Code requirement.
Senator Hickey noted the rural counties may have a problem with the expense of keeping records. Mr. Leavitt replied it was just a matter of storing the records, adding a small entity would only have a small amount of paperwork to keep.
Senator Nevin asked someone in the audience if Reno was keeping permanent records and the person in the audience answered affirmatively.
Chairman O'Connell asked for any other testimony in favor or against S.B. 54 and there being no other testimony, she closed the hearing on S.B. 54.
Chairman O'Connell announced that the Senate Committee on Government Affairs would always meet at 2:00 p.m. except on Fridays. On Fridays, the committee will meet upon adjournment from the Senate chambers.
Chairman O'Connell asked for a committee introduction of Bill Draft Request (BDR) 20-1047.
BILL DRAFT REQUEST 20-1047: Exempts reasonable agricultural activity from certain local ordinances concerning air pollution.
SENATOR RHOADS MOVED FOR COMMITTEE INTRODUCTION OF BDR 20-1047.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman O'Connell adjourned the meeting at 3:15 p.m.
RESPECTFULLY SUBMITTED:
Diana Gamble,
Committee Secretary
APPROVED BY:
Senator Ann O'Connell, Chairman
DATE:
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Senate Committee on Government Affairs
January 25, 1993
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