The Committee on Ways and Means was called to order at 7:45 AM, on Wednesday, March 3, 1999. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Mrs. Jan Evans, Vice Chair

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. David Parks

Mr. Robert Price

COMMITTEE MEMBERS ABSENT:

Mr. John Marvel (Excused)

Mr. Richard Perkins (Excused)

STAFF MEMBERS PRESENT:

Vice-Chair Jan Evans called the meeting to order and opened the hearing on Budget Account 3920.

Vice-Chair Evans asked Judy Sheldrew, Chairman, Public Utilities Commission, to provide the committee with a brief overview of the budget and then proceed through the modules.

Ms. Sheldrew stated the Public Utilities Commission (PUC) was changed significantly by legislation in the 1997 Legislative Session. Specifically, that legislation directed the PUC to encourage and enhance a competitive market for the provision of utility services in Nevada. It also tasked the commission with the reliability and safety of the provision of utility services within that competitive market. It was a significant change of direction for a body that used to rely on cost of service regulation for public utilities. The commission was reduced in size from five members to three members, and created a new Transportation Services Authority with a three-member commission to handle transportation matters that were formerly assigned to the old Public Service Commission.

With the new directive, the agency had sought to play the role of a market maker for those services that could best be provided by more than one competitor. The PUC remained wary and aware of those services that were and still should be provided by monopolies.

The interim had been very busy and exciting trying to get to the forefront of electric re-structuring. That formed the basis for the budget proposed for the coming biennium.

One other part of the 1997 legislation was a directive to the commission to reorganize the PUC. The agency presented a reorganization proposal to the Interim Finance Committee (IFC), the Governor, and the Budget Division in a letter dated December 31, 1998.

Ms. Sheldrew explained the PUC had numerous discussions with the legislative oversight committee about the organizational structure which had been in place for about 1 year. The agency had flattened the hierarchical structure of the former Public Service Commission which essentially brought the commission and the regulatory operations staff closer together and eliminated many lines of supervision.

Ms. Sheldrew stated the commission was a somewhat bifurcated agency. The policy side included the public utility commissioners, their immediate staff and general counsel. The commissioners’ responsibility was to set policy direction, and initiate rule makings and investigations that moved public policy toward the legislative directives the commission had been assigned.

The enforcement arm included the regulatory operations staff that served to review 100 percent of the filings that were made before the PUC and resolve a number of those without requiring them to go to hearing before the commissioners themselves.

Ms. Sheldrew added the PUC had a Consumer Complaint Resolution Division as a part of the re-organizational structure that was moved to be equal to the regulatory operations staff. The PUC believed there would be an increasing emphasis on consumer issues as the agency moved forward in the restructured marketplace. The division was responsible for receiving and responding to direct complaints from consumers about any number of issues. Some of those issues included:

• Billing disputes;
• Resolutions of questions regarding service;
• Disconnection of service;
• Slamming (if long distance carrier service was changed without the customers knowledge or consent); and
• Cramming (the telephone bill includes charges for services that were not authorized).

Ms. Sheldrew provided committee members with a breakdown of consumer complaints received in calendar year 1998 (Exhibit C). Exhibit C showed the kinds of activities included in the total of 4,403 complaints. The division would have an increased role in the competitive marketplace. The PUC was trying to establish itself as a place for consumers to call for information, but was not the Bureau of Consumer Protection whereby they represented consumers before the commission or prosecuted anti-trust issues. The division’s purpose was simply to resolve consumer’s complaints in writing or by telephone. The total number of complaints (4,403) in calendar year 1998 was about a
32 percent increase over the previous calendar year. In the three calendar years prior to 1997 complaints had been fairly static.

Ms. Sheldrew stated the regulatory operations staff contained five specific divisions. Some were specifically directed toward development of a competitive marketplace. Some were more reliant and would continue to perform some of the traditional services expected of a regulatory agency.

The Safety Division included railroad inspectors, gas pipeline inspectors, and inspectors that ensured contractors were aware of the "Call Before You Dig" program and similar kinds of activities. The Safety Division was not expected to be greatly impacted by the move to competition.

Ms. Sheldrew stated likewise the Small Utility Analysis and Compliance Division was responsible for assistance to small water and telephone companies who were really not moving toward alternative forms of regulation. The staff assisted in preparation of applications and assuring rates would sustain the companies in business. There were a number of small water companies that faced quite a challenge to be able to continue to provide service to small groups of customers throughout the state.

The remaining three divisions would be impacted by the move to competition. The Resource Analysis and Quality Assurance Division was the division assigned the responsibility for assuring sufficient electric capacity was available within the state for all residents as the agency moved toward competition. The service was previously provided by the integrated electric utilities as part of their resource planning process with the move to competition. The agency did not think the competitive sellers would want to tell one of their potential competitors about what their loads and resources were. The division responsibility was transitional in nature.

The secondary responsibility of the Resource Analysis and Quality Assurance Division was to develop quality assurance measures. That function was becoming increasingly important as the agency attempted to define performance standards between competitors and incumbent utilities when incumbent utilities were providing network services to those competitors.

Ms. Sheldrew gave an example of performance standards such as new telephone connections installed within a certain period of time. Standards were needed to measure whether or not the incumbents were acting slowly to impede the development of competition. Recently, the PUC had established through a settlement, a very significant set of performance standards for competitive telephone providers.

The Financial Analysis Division previously contained all the auditors responsible for auditing all financial information of regulated entities in preparation of rate cases. As the agency moved forward it was not likely to have as many rate cases but it would have more review of interrelationships between affiliates and regulated entities. The agency expected the Financial Analysis Division to focus their attention on those affiliate transactions to assure that the regulated entities would not be subsidizing their competitive efforts by funding certain responsibilities belonging to the affiliates.

The Regulatory Policy and Market Analysis Division was the lead division. That unit housed several Ph.D. economists and engineers. The staff did most of the work in setting the stage for a competitive marketplace. The ground rules needed to be established so that nothing was done in regulatory policy to inhibit the development of a competitive marketplace.

Ms. Sheldrew said that completed the overview of the PUC’s proposed reorganization structure which was already in place. She provided for committee members an overview of a study completed by Moore Information, Inc. (Exhibit D). The report was in two parts and reviewed whether the proposed structure appeared to be in the mainstream and satisfied the desired outcomes of the transition. The report was compared against the agency’s strategic plan. The agency strategic plan was found lacking by the consultant so the summary and conclusion stated that some changes were needed pursuant to the consultant’s recommendations that made the strategic plan more of a living document and more helpful to staff.

Vice-Chair Evans referred to Exhibit C concerning the number and nature of complaints received. She asked what span of control the PUC had in terms of "slamming" complaints. Vice-Chair Evans noted slamming often occurred from an out-of-state based company. Ms. Sheldrew replied the Consumer Advocate was bringing forward a bill to outline legislative directives regarding "slamming." At present the PUC did not have a lot of control over "slamming" in the area of penalties. A federal bill was also under consideration to impose penalties at the federal level.

When "slamming" complaints were received, the Consumer Division called the carrier and frequently got the carrier to reimburse for the extra charges incurred by the ratepayer. Carriers did not want the PUC to be dissatisfied with the issue. There had been a high success rate in reversing overcharges and returning the consumer to their desired carrier. At present there was not very much that could be done in the way of penalties.

Vice-Chair Evans referred to gross utility operating revenue and asked, based on the known gross utility operating revenue, did the agency see any modification in the budget from estimates to actuals. Ms. Sheldrew responded the construction of the proposed budget was based on essentially a "no-growth" scenario in the gross revenues for utilities. The last actual revenue information available was from 1997 calendar year data. The 1998 actual data would not be available until about May 1999. The new utility assessment would be based on the May 1999 information. From an abundance of caution, the agency decided to flat-line the gross revenues on a going-forward basis because they had some reporting problems and with the move toward competition, the agency did not know at what point some of the revenues from existing public utilities would be transferred to some of the alternative sellers.

Ms. Sheldrew stated the mil assessment statute specifically applied to public utilities. The PUC was in the process of establishing "rule-makings" to develop a licensing fee for competitive providers to establish something comparable on an annual basis. Ms. Sheldrew noted it was not a problem in relation to competitive telephone providers because they were considered public utilities and received a Certificate of Public Convenience and Necessity (CPCN) and there had not been a lot of problems with the phone companies paying. There was a recent dispute as to whether or not a commercial mobile radio service provider was subject to the mil assessment. One company had not made their 1997 payment which was substantial because the company felt they were not subject the mil assessment.

Ms. Sheldrew related the PUC had taken a very conservative approach in its revenues because they did not want to make forward projections, lower the mil assessment, and find the revenue not materializing. She suspected the PUC would have a bit better growth than what was projected in The Executive Budget. The 1998 figures would be provided to the committee as soon as they were available.

Vice-Chair Evans asked if the mil assessment rate was to remain at
.294 percent. Ms. Sheldrew replied in the original proposed budget it was at .294 percent, but when the PUC was informed by the Budget Division they were going to be one of the agencies to be moved out of the Sawyer Building in Las Vegas, the agency moved the mill assessment to .304 mils. The change was located in decision unit E-276. During the current fiscal year the assessment was at .325 mils. In the previous fiscal year the assessment was at the statutory maximum because the PUC wanted to have sufficient resources to accommodate all expenditures projected on behalf of electric restructuring.

Vice-Chair Evans asked if the gross utility operating revenue came in higher whether the mil assessment rate could be reduced. Ms. Sheldrew replied the statute required the PUC to set mil assessment rates in May of each year. When actual gross revenues were received the commission set the mil assessment. A letter was sent to all of the regulated entities billing them for the assessment. There was considerable flexibility in setting the mil assessment rate and it could be based on known revenues. The PUC had until May of each year to establish the rate.

Vice-Chair Evans asked if the mil assessment rate was increased to provide the funds to be transferred to the Office of Consumer Protection. Ms. Sheldrew replied the Office of Consumer Protection set their own rate and the PUC simply included it in their budget and applied it. The PUC was simply a billing agent for the Office of Consumer Protection. Ms. Sheldrew added she believed the Consumer Advocate was increasing his rate and he would be the one to tell the committee why the increase was needed.

Assemblywoman de Braga asked how the situation with the telephone entity that had not paid since 1997 was being resolved and what effect that had on the budget. Ms. Sheldrew replied the PUC legal team was talking with the utility’s legal team and the amount involved was $300,000 for the 1997 year alone.

Vice-Chair Evans asked Ms. Sheldrew to explain the utilization plan for reserves recommended by the Governor. Ms. Sheldrew replied the agency did not have such a plan. Vice-Chair Evans noted the reserve seemed to be increasing.
Ms. Sheldrew replied the increase was in the Governor’s recommendation but the agency request had projected the reserve to decrease. She noted the agency knew the Ways and Means Committee was very interested in keeping reserves at a bare minimum. The agency related back to the .350 mil assessment rate of 1997-98 which generated more in reserves than could be used, so those funds were balanced-forward and used in the revenue in addition to the agency projections of what the mil assessment should be, to calculate what the mil assessment in the current year should be. The intent over the course of the biennium was to spend down the reserve. The agency had been cautious because of the expenditures incurred as a result of restructuring and the agency was asking for an increase in the consumer outreach contract. The PUC did not have a specific expenditure plan however.

Assemblywoman Chowning asked Ms. Sheldrew to explain who had required the PUC to move from the Grant Sawyer Building in Las Vegas. Mrs. Chowning noted the Grant Sawyer building had various agencies located there and it was a convenient location for consumers and everyone involved. How much would the move cost and what non-state location was under consideration.
Ms. Sheldrew replied E-276 included a decision unit that showed expected expenditures with a reserve for contingency items. Because the Carson City office had just been moved, the agency was aware that unexpected things came up at the last minute. The PUC had asked for approximately 1,200 additional square feet in the Sawyer Building where the Transportation Services Authority was currently located and were told by the Buildings and Grounds Division that other state agencies needed that space. Ms. Sheldrew’s guess was that General Fund agencies had requested the space. Because the PUC was not a General Fund agency they could afford to move to typically more expensive non-state building space.

Ms. Sheldrew stated the PUC did not yet have a new location. They had been looking at space in a price range of $1.61 to $1.65 per square foot including utilities. The projected expenses in the budget were approximately $152,000 in category 01 and approximately $116,000 residual in anticipation of what rent prices would be.

Assemblywoman Chowning requested the Chair to direct staff to research the issue and determine exactly why the demand to move was being made, which agencies were going to assume the space, and what funding mechanism the agencies fell under.

Assemblywoman Chowning asked Ms. Sheldrew to touch on the Rail Safety Inspection Program because the prior method of funding was no longer available and it appeared the task of providing inspectors was being placed on the rail industry. Mrs. Chowning also asked what the approximate amount of increase was and why the funding needed to fall so much to the industry. Ms. Sheldrew replied an intense discussion was held during the Sixty-ninth Legislature. The program had been funded for a number of years from the receipts from the hazardous waste facility at the Beatty dumpsite. The site was being used less and less and would likely close. The legislation passed in 1997 gave the Public Utilities Commission the authority to assess the utilities based on cargo hauled through the state. Two additional railroad inspectors were hired and a much more thorough job of inspection was being done on both rails and equipment. In the budget, the agency had tried to estimate how much revenue would be received from Beatty which was in decline. There was a corresponding increase in the rail assessment from .00424 to .00438 based on projections.

Assemblywoman Chowning asked what the additional rail inspectors had accomplished and how many additional inspections had been done.
Ms. Sheldrew referred to performance indicator 9 that projected 75 percent of total track units inspected throughout the biennium and performance indicator 10 that projected 75 percent of hazardous material site inspections. There were a large number of performance indicators in place but due to limited space in the budget only a few were included there.

Assemblyman Beers asked for confirmation that the mil assessment was essentially a tax on consumers and noted a raise was proposed. He stated his understanding of a possibility the requirements of the PUC could be accommodated without a raise if the 1998 revenues were higher than the estimate. Ms. Sheldrew replied the agency proposed to decrease the mil assessment from .325 to .304, however if the revenues came in higher it was possible the assessment could be decreased even further.

Assemblyman Beers asked why it took the PUC 5 months from the close of the fiscal period to determine what actual revenues were. Ms. Sheldrew replied it took utilities a long time to finalize their calendar year revenues and provide the information to the PUC. Even in May the PUC needed to pressure the utilities to complete their revenue reports. She added the good news was that the mil assessment was based on the previous calendar year so figures used were actual expenditures versus projections.

Assemblyman Beers asked if the deadline for revenue reports was early May or late May and Ms. Sheldrew replied she believed the required deadline was in early May.

Ms. Sheldrew stated the base budget recommended the continued funding for the 88 full-time equivalent (FTE) classified and unclassified positions. The mil assessment reflected the .294 percent level and the consumer protection assessment of .75 percent. There was an adjustment in the Governor’s recommendations to lower the in-state rent figure by $57,593 in the first year of the biennium and by $76,513 in the second fiscal year.

Ms. Sheldrew noted the number of dockets before the commissioners continued to increase. The three commissioners were currently addressing those. In 1996 425 dockets were opened, in 1997 505 dockets were opened and in 1998 dockets opened stood at 520.

Vice-Chair Evans asked if the change in the number of commissioners was sufficient. She had been approached with concerns of what happened if discourse were to occur amongst the three-member commission. If two commissioners discussed a docket constituting a quorum and the docket was not an agendized item, under the open meeting law would they be in violation of the law. Ms. Sheldrew replied three full-time commissioners were probably about the right number to handle the workload. After the initial crunch of additional investigative requirement for rule adoption in electricity and natural gas restructuring, the workload would be about correct. The open meeting law restriction did present some serious problems. The commission used to produce proposed decisions and circulate them to the commissioners for review prior to the agendized hearings where specific language could be decided. However, a complaint was filed during the interim by a newspaper that was concerned about proposed decisions being released in advance. The newspaper asked the for an opinion from the attorney general’s office which replied if draft opinions or orders were circulated, those must be shared with the public. Ms. Sheldrew likened the ruling to a judge on the Supreme Court sharing his decision with the public before the whole court got to vote on it.

The Public Utilities Commission had asked for a declaratory ruling from the district court as to whether the final draft opinions should be released. In the meantime, to comply with the attorney general opinion, the PUC had gone to two agendas. One agenda was a deliberative agenda where all three commissioners got together and the presiding officer who was responsible for preparation of the draft opinion suggested an overview of the decision, but not any kind of draft order. At that point the other two commissioners could express areas of concern and the presiding officer took their concerns under advisement and the next day a final agenda was prepared and draft orders were made available including all changes. Ms. Sheldrew stated the procedure was very cumbersome and restrictive. It seemed to mitigate the values of a commission. The mission of a commission was to bring diverse ideas and backgrounds together to arrive at a unified decision.

Ms. Sheldrew noted decision unit M-100 – Inflation, was fairly routine. In
M-200 – Demographics/Caseload Changes, the 1997 Legislature gave authorization for $500,000 in a contract for a public information and education campaign about electric restructuring. Ms. Sheldrew noted two firms were hired to assist the PUC in the their efforts. Kruse and Parker an advertising firm, constructed the brochure provided to the committee as Exhibit E. The brochure was designed to provide, in layman’s language, easy information to people who were interested in electric restructuring. The PUC had received tremendous response to the brochure. It formed the basis for some television public service announcements (PSA’s) even around superbowl time.

Before launching efforts along those lines and in concert with the legislative oversight committee, the PUC conducted some focus groups to learn the public perception, opinions, and knowledge of electric restructuring. Three focus groups were held in Elko, Reno and Las Vegas. The Las Vegas focus group consisted of residential customers and they were the group who told the PUC the switch plate brochure really reached out. The outcome seemed to be one of a desire for receiving certain information at varying times to ensure they could make informed choices at appropriate times.

A media campaign was formed from the information gathered in the focus groups to determine how to best communicate with residential customers in particular. The PUC conducted a telephone poll and a summary of all that information was included in Exhibit D. The telephone poll revealed 59 percent of contacts were in favor of electric competition. A lesser percentage really knew what was happening and who the Public Utilities Commission was. The goal was to establish the PUC as an objective source of information for the public.

The PUC was preparing to send out a direct mail piece to all the ratepayers to advise them of the changes. Ms. Sheldrew introduced Kathy Kollar, Consumer Outreach Coordinator. Ms. Sheldrew said the focus groups indicated they preferred a direct mail piece instead of a bill stuffer.

Ms. Kollar reported the PUC had requested a ratepayer base from both incumbent utilities by February 12,1999, to facilitate mailing of the informational letter. The ratepayer information had not been received however Ms. Kollar understood legal staff of both utilities was preparing a response to the request. A response was anticipated in some type of cooperative effort. The PUC expected approximately 1,050,000 people would need the communication.

Kruse and Parker’s research indicated the cost of a direct mail piece would vary depending on what it contained. The timing was critical so that only one direct mail piece was needed.

Vice-Chair Evans asked what other forms of media had been explored.
Ms. Kollar replied the PUC was lucky enough to receive a "fire sale" in Northern Nevada for two spots on Superbowl Sunday and the AFC playoffs. Those spots cost $7,500 instead of the $1 million for 30 seconds that the beer companies and others were paying.

Ms. Kollar referred to the last page of Exhibit D which indicated the timelines and activities planned prior to the restructure. The most critical issue was timing to reinforce the PUC message all along and stay within the timeline of what people remembered requesting.

Vice-Chair Evans noted the time frames appeared to be adaptable for the anticipated delay. Ms. Kollar responded the PUC had used parameters such as in newspaper advertising which indicated it was to be done statewide within
4 to 10 months of the start of competition rather than a specific date.

Ms. Kollar noted newspaper editorial board meetings would be an ongoing free source of information distribution. Paid advertising on television would be in a
2 to 6 month time frame prior to implementation of deregulation. As the shortest and most expensive media, it was almost the last reminder planned for the consumers.

Vice-Chair Evans noted one media source was brochures developed in the Spanish language and asked if part of the plan was to include Spanish radio and television. Ms. Kollar noted the PUC had already made their first effort on television in both English and Spanish. Ms. Kollar explained when an agency paid for a certain amount of television advertising they received a certain amount of free public service time as well. The rules for television advertising used to require changing the information from the paid ad to the free service but currently the same information could be used for both.

Vice-Chair Evans noted legislators had heard a great deal from constituents wanting to know what deregulation meant and the effects it would have and were please to hear about the efforts of the PUC.

Ms. Kollar added she and her two staff members in Las Vegas and Elko had been trained, and were working within the local non-profit organizations and senior centers to provide individual and group information.

Assemblywoman Cegavske asked how the PUC was dealing with companies that were calling a number and reaching a minor who might give permission to do whatever solicitation was being offered. She asked the PUC to provide her with a contact to help some of the parents with 900 calls or with companies that "skirted" calls. She explained a number could be called and the call went out of the country and then came back, which created exorbitant bills.

Assemblywoman Cegavske also stated in working with a variety of schools and community groups in Clark County she had found bill stuffers to be very beneficial. She disagreed with the PUC and felt direct mail was very costly versus bill stuffing to disseminate information in the best manner at a lesser cost. She stated forcefully she would not support the PUC doing anything other than bill stuffing. Ms. Sheldrew responded for the record that the PUC was using both types of media to get their message out. The focus groups had indicated that residents did not read their bill stuffers and when the PUC was trying to make residents understand the whats and whys of regulation and receive the most exposure possible the indication was that bill stuffers were not read. Assemblywoman Cegavske rebutted the same could be said for letters that were not personally directed and the sender was unknown. Ms. Sheldrew stated the letter would be personally directed and was the reason for the request for ratepayer lists. She added different advertising agencies and focus groups would generate different advice and that was why the PUC was trying to cover the "waterfront" on a fairly meager budget. The agency had one of the smallest advertising budgets allocated for deregulation across the country. California had spent a lot of money and done a very ineffective job. Maine, a smaller state, had an advertising budget of $1.5 million.

Ms. Sheldrew stated one reason the PUC wanted to do a direct mail piece was so they could tell the legislature how much closer people were getting to understanding the issues.

Assemblyman Beers said maybe he had misunderstood. Focus groups indicated people who threw away their bill stuffers read their junk mail. Ms. Sheldrew clarified the direct mailing was not junk mail. The PUC wanted to send a letter directed individually to residents and that project was summarized in Exhibit D.

Ms. Kollar explained through the focus group, the direct mail piece was the preferred method of knowledge and the preferred agency to disseminate that information was the Public Utilities Commission. Both the focus groups and the telephone survey indicated the PUC ought to be the objective information provider. In the follow-up telephone survey however, the preferred source of information to learn about restructuring was:

• Television 27 percent;
• Newspapers 25 percent;
• Bill stuffers 15 percent;
• Paid advertisements were 4 percent; and tied with that
• The internet was 4 percent; and
• 1 percent were speeches or direct presentations.

The follow-up telephone survey included 500 people which allowed a broader perspective of meaning of deregulation. However, a greater amount of time was spent working with the focus groups attempting to get the disseminate information on deregulation. It was nearly unanimous that people preferred to receive a direct mail piece addressed specifically to them. The agency had also learned through focus groups that a direct mail piece might be kept until it was time for the resident to make a choice, thereby providing the resident assistance to the point of choice.

Assemblyman Beers noted decision unit E-125 contained software upgrades. He added his understanding that the agency had been studying their docket tracking and consumer complaint systems over the past biennium and E-125 did not contain any request to change those systems. Ms. Sheldrew replied E-125 was simply to upgrade the Microsoft 97 Suite software. The agency was currently using Office 95. In another decision unit the agency needed to make an adjustment because the agency was not satisfied with their mainframe docket tracking system. It was converted to an Access database and was being run parallel to the mainframe system. In each year of the biennium the payment to the Department of Information Technology (DoiT) for programming expenses was approximately $14,000 per year. Assemblyman Beers asked if the parallel was working satisfactorily. Ms. Sheldrew replied the parallel Access system was much more flexible and it provided workload information that the mainframe did not. The consumer complaint system was also on Access currently. Assemblyman Beers suggested the agency consider using Crystal Writer for reports from the Access files.

Assemblyman Beers asked why the PUC requested 40 copies of upgraded software in FY 2000 and then waited until FY 2001 for another 40 copies.
Ms. Sheldrew replied both the Carson City and Las Vegas offices used local area networks and she did not feel the agency could reduce the number of copies of software requested. Assemblyman Beers suggested the agency to check Yahoo on the Internet because he found the same Office software for $88 as opposed to the $495 per copy shown in The Executive Budget.
Ms. Sheldrew stated they would research the suggestion. The agency typically used their own estimates rather than those supplied by DoIT because traditionally their own agency estimates came in much lower. Assemblyman Beers asked if the software could be purchased at $88 per copy it seemed the agency should obtain all 80 copies in the first year of the biennium.
Ms. Sheldrew replied she thought there was also a question of how long it would take their data processing staff to do the installations and Mr. Beers responded each installation should take approximately 20 minutes.

Assemblywoman Giunchigliani commented she had received considerable e-mail from constituents regarding Senate Bill (S.B.) 222 and S.B. 226 and asked if Ms. Sheldrew could briefly comment on what those bills would do for shareholders. Ms. Giunchigliani stated she also thought there was a bill to extend the effective date of electric deregulation. Ms. Sheldrew responded on S.B. 222 and S.B. 226 stating she was not aware what affect those bills would have on shareholders but they would cost ratepayers $700 million to
$900 million in additional over-market costs. The bills removed some of the commission’s authority to net those costs against such things as after tax net gains received from the sale of generating units. Both bills preserved the additional above market costs that would be born by ratepayers. She offered to meet with Assemblywoman Giunchigliani later to discuss the issue in further detail.

Regarding the delay of electric deregulation, Ms. Sheldrew stated the PUC had also recommended a delay. There were certain things that needed to be in effect and in place before the PUC could be sure a competitive marketplace existed. Assemblyman Bache’s bill would be heard the following day in Assembly Government Affairs, and that bill hit on the problem of "Y2K", the issue of conversion of computers to be year 2000 compliant.

The PUC also felt there were two institutions that needed to be developed through the Federal Energy Regulatory Commission (FERC). A tariff was needed under which the new sole generation units would work. An independent system administrator was also needed. Both were FERC jurisdictional and the PUC could not set the time frame for those. The PUC was also watching Arizona to see when they implemented the restructured marketplace because if two states opened at the same time, Nevada might lose out because of its small market size.

Ms. Sheldrew said it appeared there would be a delay of 3 to 10 months and anywhere in that range would allow the PUC time to address some of the issues of concern. She opined the nation was not slowing down on deregulation, it was just that the issue was very complex and it took a long time to get it right. Ms. Giunchigliani commented the bill in the 1997 Legislature that authorized deregulation in Nevada was approximately 600 pages long and one of the last bills of the session so it almost surely was not read by most before it was voted on. Ms. Sheldrew added the original sponsor of the bill was no longer pushing deregulation and Nevada consumers and shareholders must be protected with appropriate, timely decisions. Ms. Sheldrew agreed and added deregulation had to be done right and done right on the first try. She added there were a number of federal bills being pushed at the present time. The Consumer Advocate and the president of the National Association of Utility Shareholders, could probably provide further detail.

Assemblywoman Chowning referred to decision units, E-126, E-710 and E-720. She asked the PUC to provide staff with background material as to why the PUC was having to spend $13,000 on training for "Call Before You Dig" and what type of training was involved. She noted a federal grant previously covered the training and asked what type of training was given and to whom it would be provided. Based on the difference in the cost of software cited earlier, she asked the PUC to check closely on costs of new and replacement equipment needed because of the move. She asked why additional equipment and furniture was needed.

Vice-Chair Evans stated there were some other questions as well and asked
Ms. Sheldrew to direct her staff to work with fiscal staff in answering the questions.

Vice-Chair Evans noted the highlights of the budget had been covered. She noted there was one larger and different question that should be addressed. On the subject of bulk energy purchases, was that something the legislature should be looking into for some of the major institutions because in some cases the state was a high-energy consumer. Ms. Sheldrew she would provide more detail at a later time but suggested the state should be actively following the issue and pursuing bulk energy purchases for either all of state government or at least certain institutions such as the prisons and hospitals. The PUC would encourage local governments, cities and municipalities to consider entering the bulk energy business. Ms. Sheldrew noted the state should not necessarily acquire the bulk purchases themselves, but put out a request for proposal indicating the state energy utilization and purchase energy from a licensed aggregator who conducted their business in the open market for many customers. Savings were to be made in numbers.

Ms. Sheldrew stated under the M-201-- demographic caseload changes, the PUC had requested and the Governor recommended the deletion of a financial analyst and the agency would like to decrease the financial analysts by two. The agency had not had a great deal of opportunity or success in recruitment for those positions. The agency requested some amount, perhaps $50,000, to be put into contract services instead, to allow consulting services for some of the auditing services. The Budget Division had been informed.

The Vice-Chair closed the hearing on Budget Account 3920 and opened the hearing on Budget Account 3921.

Judy Sheldrew, Chairman, PUC, explained Budget Account 3921 was an account in which a variety of administrative fines were collected in accordance with the provision of the agency’s duties.

The Governor’s recommendation directed funds in the account to be placed in the reserve because the agency did not have a specific spending plan in place for the administrative fines income. The account and authority was established simply to have a place to deposit fines on a "going-forward basis." In the current year the agency had collected approximately $46,000 in fines that were received via settlement with some contractors who violated the state’s "Call Before You Dig" program. Vice-Chair Evans noted the explanation of the purpose of the account and the increase in the reserve were the only issues in Budget Account 3921. The Vice-Chair closed the hearing on Budget Account 3921 and opened the hearing on Budget Account 3922.

Judge John Mendoza, Chairman, of the Transportation Services Authority (TSA) introduced Paul J. Christensen, Commissioner and Sandra Avants, Deputy Commissioner. The mission of the TSA was fairly well defined as the administration of economic regulation and state laws governing the intrastate transportation of passengers, household goods movers, tow cars, taxis, limousines, and buses. As a result of the 1997 Legislature, the Public Service Commission was divided into two agencies. The transportation unit of the Public Service Commission was converted into the Transportation Services Authority. A delay in transferring those functions occurred due to a requirement for the agency to come before the Interim Finance Commission in September 1997 with a budget. At that time it was ascertained for the first time, that the agency was understaffed and underfunded. As a result the TSA asked for some relief which was forthcoming through funding from the Taxicab Authority Trust Funds. Those funds had allowed operation of the TSA during the interim.

The TSA was also mandated to become involved in stopping the unauthorized limousines, taxicabs or other passenger vehicle operating in Nevada without a license. That task had been accomplished, but as a result the agency ascertained the problem was a very difficult and pernicious type of problem because hundreds of thousands of dollars were being channeled out of the state by illegal operators.

The TSA was required to regulate all carriers for public safety and had modified their regulations extensively. Large dockets were reviewed and regulation revisions culled out all references to the utility part of the industry. As a result, in regulating and approving applications, the TSA was required to see that individuals were fit, willing, and able to perform under statutes.

A number of factors mandated in statutes included:

• Fitness of the applicant;
• Financial fitness; and
• Whether the applicant would unreasonably and adversely affect other carriers operating in the state;

Mr. Mendoza continued as a result of the statute concerning unreasonable or adverse affect, additional parties participated in every application. Every carrier who was able to show valid and legitimate reasons for appearing and becoming part of the application process or a lawsuit was entitled to notice, the right to examine, cross examine, present witnesses and participate fully in the application process or proceeding.

Mr. Mendoza stated the TSA had one function clearly set forth in the purpose clause of the statutes governing the agency. The service received had to benefit the traveling and shipping public. In effect, the agency regulated for the public interest, not merely to regulate individuals who were within the jurisdiction. The agency was also required to ensure the treatment received by tourists when they came to Nevada was fair and equitable.

Mr. Mendoza stated illegal operators could charge whatever they wanted until they were caught and did not have to carry insurance. In many investigations, the TSA had uncovered accidents in which individuals were injured and no insurance covered the accident. Some passengers had been deposited in the desert between Las Vegas and the valley when the independent operator had the opportunity for a higher fare somewhere in the Las Vegas area. A wedding party had been abandoned at the Indian reservation between Overton and Las Vegas. A Channel 8 reporter was double-charged for her wedding when she arranged for two limousines, one for the bridal party and one for the groom party. When the groom party got to the destination they were charged for the service the bride had already paid for in full. A complaint was filed and the TSA was able to make a partial recovery of payment.

The rates charged by regulated carriers must be reasonable and non-discriminatory. Rates in the state of Nevada were some of the lowest in the nation.

The Transportation Services Authority also regulated the tow car industry which continued to give them the highest complaint rate even though rates charged were not a part of the authority of the TSA.

The TSA established a minimum insurance standard. Investigations uncovered false insurance policies, fraud in the form of altered dates of coverage, and in some cases no insurance coverage at all.

The philosophy of the TSA had been to focus on the quality of service and to ensure tourists received a good first impression of Nevada through the person who transported them from the airport to their hotels. The agency took pride in what they felt was a fair and balanced approach. Mr. Mendoza noted whenever the legislature passed a new statute that someone disagreed with, the agency involved seemed to be sued. The TSA had been sued repeatedly because of the impound statute. In all of the suits for which decisions were based on whether or not there was a factual basis for the suit, the agency had been sustained by the district courts.

A question had been raised about the constitutionality of the TSA structure and staff believed the agency had been operating within the law.

The commission consisted of three commissioner positions of which one was vacant. The agency consisted of 20 positions within two divisions, administration and enforcement.

The Enforcement Division handled management of transportation issues, compliance, investigations, financial analysis and audit. The Administrative Division dealt with dockets, calendars, hearings and other areas.

Mr. Mendoza stated the TSA became a legal entity in October 1997 and substantial curtailment of uncertified limousine operators in Nevada had been accomplished.

Mr. Mendoza stated the TSA was also to process appeals from the Taxicab Authority to the TSA. One appeal had been made and a decision would be forthcoming in the next 30 days. A cab company had made application to the Taxicab Authority which authorized the application but an appeal of the authorization had been made to the TSA.

The TSA had worked to streamline their docket and hearing procedures and felt those were currently moving faster. Most delays were created by applicants who did not read instructions and did not keep in contact after filing an application. Several legal technicalities extended the process.

Vice-Chair Evans asked Judge Mendoza to summarize his opening remarks in the interest of time. Judge Mendoza provided committee members with a summary presentation document (Exhibit F).

Mr. Mendoza noted under performance indicators for the period from October 1997 through December 1998 there had been:

• Phone and counter complaints 2,062;
• Phone and counter informational requests 6,002;
• Record searches and requests for affidavits and data copying 650;
• Investigations and stings of unlicensed illegal activity 899;
• Vehicle, general safety and certification inspections 1,105;
• Out-of-service notices issued 167
• New applications for authority 221;
• Administrative and justice court citations issued 181; and
• Impound hearings, first appearances, prehearing conferences, discovery, rulemaking workshops, and agenda hearings 282.

During all of those activities the attorney general’s staff represented the TSA staff and Commission. Only one deputy attorney general was assigned to the TSA but in actuality three were needed.

Assemblywoman Chowning stated the regulation was extremely necessary and that consumers were affected positively and negatively by the businesses in the regulated industries. She stated the performance indicators included numbers but there was no breakdown. She asked:

• What was the cost of conducting stings; and
• What percentage of movers, tow trucks and limousines were the performance indicators relevant to.

Assemblywoman Chowning asked Mr. Mendoza to provide the information to staff and to briefly specify which industry created the greatest activity of the TSA. Mr. Mendoza replied the agency would provide the requested information. He noted the agency had received a number of complaints in the household mover area. Because of limited staff the agency had not been able to properly regulate the household mover industry. The TSA had prepared a merger bill that would have provided additional staff, but the bill had been withdrawn.
Mr. Mendoza indicated a similar bill had been introduced in Senator O’Donnell’s committee and would be heard later on.

The tow industry still had a high incidence of complaints as always. The area of the most dollar expenditures was obviously in the limousine industry.

Assemblywoman Cegavske noted looking at the program description, she was pleased to see "fair impartial regulations to promote safe, adequate,
economical, and efficient service." The mission statement contained some of the same phrases. Assemblywoman Cegavske stated she had not been in favor of, and remained someone who was opposed to breaking off from the Public Service Commission.

Assemblywoman Cegavske stated in Mr. Mendoza’s earlier testimony, he kept referring to limousines coming from out-of-state. She told of an incident that happened to a constituent living in her district, whose stories over the past few months in dealing with the TSA were a horror story for him.

The constituent was a 13-year resident of Nevada who found himself in one of the TSA sting operations which Assemblywoman Cegavske would like to know more about. His cellular phones, vehicles and personal property was taken. She was concerned. In looking through all the information regarding the TSA, Assemblywoman Cegavske saw nothing in the plan that it was to be the police, the judge, and the jury of all of those industries. She acknowledged perhaps she was misunderstanding but she was concerned as to how first offenders were treated. Assemblywoman Cegavske acknowledged the TSA had rules, regulations and laws the TSA wanted obeyed and one function of the legislature was to help encourage that. She noted some agencies could not be made to pursue and act on the laws governing them, and then there were other agencies that went overboard in her estimation.

Assemblywoman Cegavske expressed concern that small Nevada businesses and residents were being harassed. She suggested if they were Nevada residents, they should be working with rather than making attorneys rich. The attorneys were having a heyday. Her constituent had paid an exorbitant amount of legal fees. In the performance indicators on stings Assemblywoman Cegavske asked for an explanation of what the stings were, who conducted them, why confiscations were done up front, and what happened to impounds. Her biggest issue was that not every group of limousine operators conducted their business in the same way. Her constituent had rented the vehicles from a rental agency and been told that was illegal. The customer was required to rent the vehicle from the rental company and the constituent had corrected that issue. There were other groups who were residents in Clark County who were doing the same thing but nothing had happened to them.

Mr. Mendoza asked whether Assemblywoman Cegavske or her constituent had submitted information on the other limousine agencies to the TSA for investigation. Assemblywoman Cegavske replied affirmatively and added she had written a letter. Assemblywoman Cegavske stated her constituent’s attorney would be addressing the issue to the TSA.

Mr. Mendoza stated he could not respond to some of Assemblywoman Cegavske’s questions because if it regarded a pending case he would be sitting in judgement on it later. After the case was closed he would be very happy to address those issues.

Vice-Chair Evans stated the hearing needed to focus on the budget, but in general, the committee was concerned about some of the publicity that had arisen regarding the TSA. Vice-Chair Evans provided committee members with a copy of a nationally published news article from the Reno Gazette-Journal (Exhibit G). Vice-Chair Evans quoted: "Las Vegas limo business slams the doors on Independents." The committee applauded the TSA’s efforts to crack down on unlicensed or unscrupulous operators; the committee was concerned that hard-working, honest business persons might be getting the squeeze.

Mr. Mendoza responded he stood ready to address the article (Exhibit H) or do so when the issue was revisited. Mr. Mendoza emphasized Mr. Will’s facts were wrong. The Vice-Chair stated the article was not good publicity for Nevada.

Sandra Avants, Deputy Commissioner, TSA, referred to the base budget revenue. Prior to the proposed budget, revenue was derived from certain fees to tow trucks and taxi cabs in the state outside of Clark County. In addition the TSA received Highway Funds, and there was a transfer from the Taxicab Authority from their reserve. Initially for the 9-month period, the agency received $227,000 in revenue transfers and $366,000 in revenue transfers in the current year. Those would not be used as funding in the proposed budget. The budget would generally come from the Highway Fund with the exception of tow truck fees of $17,983 in both years of the biennium. A like figure would be generated for taxicabs. In addition, under Investigations, when investigators were required to go out-of-state those expenses were charged back to the applicant.

$16,831 was provided the Budget Division for photocopy services. The agency was going to talk to the Budget Division on that figure and the number for applications fees. A slight negative adjustment on revenue would likely be made.

The Highway Fund would pick up all revenue except for approximately
3 percent of the budget.

Ms. Avants noted there were no significant changes in the base budget.

Speaker Dini stated he thought tow trucks had been deregulated. He asked if tow trucks were a very good source of income. Ms. Avants replied tow trucks only brought in approximately $18,000 per year. The fee was $36 per year and the industry was significantly deregulated. The TSA now only regulated the tow industry through certificating companies into the industry, maintaining locations, company names, and company tariffs were posted with the TSA. Tow company applications were turned around in approximately 45 days. Speaker Dini confirmed there was no franchised territory assigned. Ms. Avants replied there were no franchises but the companies did indicate the areas in which they would serve.

Vice-Chair Evans asked Ms. Avants to present the enhancement modules of the budget. Ms. Avants stated E-129, represented the same situation of a required move as described earlier by the PUC. The TSA was across the hall from the PUC in the Grant Sawyer Building and had also been asked to move out of the building by August 31, 1999. The TSA was searching for non-state owned property to share with the PUC so the two agencies could share meeting rooms and accommodate both agencies’ needs. The TSA would be paying $1.60 per square feet, currently had 2,700 square feet and did not have a meeting room. The move would increase their size to 5,000 square feet, which would give the TSA the ability to hold its meetings. The cost for the TSA to move would be approximately $23,000. Those costs would cover moving the equipment, the installation and hookups of telephones and computers. The lease contract included payment of all utilities.

Vice-Chair Evans asked if $1.60 per square foot was a good price. Ms. Avants replied it was a very good price. Some of the pricing at the beginning of their search had been $2.20 a square foot. Because state contracts were considered good renters, they were able to negotiate the lower rate. The agency also tried to complement their agency by being housed with other state agencies to allow sharing of resources and for the convenience of the public. Ms. Avants concluded E-129 would total $104,000 for FY 2000 and $100,800 for
FY 2001.

E-130 was a credit to the budget by deleting purchase of uniforms. The agency had determined the compliance/enforcement investigators did approximately
80 percent of their work in plain clothes. Overalls, jackets and caps had been purchased for when the investigators were required to do the more mechanical type of work. E-130 would include a reversion of $2,440 for uniforms.

Ms. Avants stated E-135 was the $366,000 the TSA was currently receiving from the Taxicab Authority that would be eliminated because the agency would be funded by the Highway Fund.

Vice-Chair Evans stated one concern was that through the current biennium the TSA had exceeded their budget rather substantially. Overall, as the committee viewed the budget they saw a pretty large increase. Building rent accounted for a portion of the increase. It appeared the cost was significantly increased to handle the transportation segment of the old Public Service Commission.
Ms. Avants replied that could be addressed because previously the transportation unit was part of the PSC, another large agency.

Vice-Chair Evans asked if there was a justification for three commissioners, noting the Insurance Division had only one Commissioner of Insurance.
Ms. Avants replied the TSA commissioners had been very busy and operated statewide. One commissioner handled a considerable amount of the work outside Clark County and the two remaining commissioners were constantly in hearings, reviewing work, and preparing to make decisions. Vice-Chair Evans commented the Insurance Division also operated statewide. Ms. Avants deferred to Paul Christiansen, Commissioner, TSA. Mr. Christiansen replied three commissioners were approved by the legislature to carry the workload, and one of the reasons splitting the agency was more expensive was because they were doing the job. The concentration of the PSC was more on utilities than on transportation. Complaints would not be forthcoming from illegal operators if the agency was not doing its job.

Mr. Christensen noted the Senate had asked if the TSA was a little "top-heavy" and he had replied, "they were not top-heavy, they were bottom-light." There were only two clerical assistants in the office and if one was on vacation and the other went to lunch, the commissioner answered the phones.

Mr. Christensen noted the budget not a self-funded agency. Vice-Chair Evans noted his comments made a strong argument for a more effective agency. She added while the agency was not a General Fund agency, the concern was that the agency was now creating an increase on the Highway Fund.
Mr. Christensen replied one request in the original merger bill was a proposed fee on limousines. Taxicabs paid approximately $2,800 a year in fees and limousines paid nothing.

Assemblywoman Chowning referred to E-129 and asked what costs were being attributed to the move. There was no appropriation for new furniture. She asked again why the agency was being told they must move from the state building and asked the agency to provide the information to staff.

Assemblywoman Chowning asked what type of education the Transportation Services Authority provided to the hotels that in many instances refer patrons to limousine services. Was the hotel staff being educated that they could be sued for referring to unlicensed, uninsured business operators. Mr. Mendoza replied the TSA went to the chiefs’ association for security of all the hotels and addressed the problems of uncertified carriers. He also addressed the board of the Nevada Resort Hotel Association. The agency also trained airport staff and convention center authorities. Mr. Mendoza also addressed the maitre d’ association because they were the people who assisted visitors directly to the limousine services.

Mr. Christiansen noted most of the training was done on the commissioners' own time. He joked that when he was hired, he was provided a tin desk and he furnished everything else in his office and had to pay a certificated carrier $200 to move it there. He owns his own chairs, bookcase, credenza and all other furniture. When the agency spoke at luncheons or meetings, they bought their own lunches and paid their own fare.

Assemblywoman Chowning stated the Department of Motor Vehicles and Public Safety (DMV) budget dealt with tow truck drivers and the current budget also dealt with towing services and wanted to ensure there was not a duplication of services. Hearings were also processed in DMV and she asked staff to review the issue.

Assemblyman Beers referred to the earlier discussion concerning the turn-around time on tow truck applications and suggested the performance indicators could be included for turn-around times of all applications the TSA processed.
Ms. Avants replied they could provide that information.

Vice-Chair Evans asked Judge Mendoza to provide a quick comment on the Administration Fines Budget.

Mr. Mendoza referred to Exhibit F in presenting Budget Account 3923. It included a summary of revenues and expenditures for FY 1998. During that time a total of 50 citations were issued and fines collected were in the amount of $88,630. Law enforcement officer expenses related to administrative fines were $3,413. In FY 1999 through February 28, 1999 a total of 32 citations were issued and resulted in the collection of $123,456. The enforcement staff incurred travel and training expenses in the amount of $8,067 for a total of $115,388. Total administrative fines collected from October 1, 1997 to February 28, 1999 were $212,086. Uncollected fines from 49 outstanding citations issued to 17 respondents were being pursued with the assistance of the attorney general. Uncollected administrative fines totaled $309,110.

Mr. Mendoza noted one individual had 16 citations issued for a total of $150,000 and another individual had 12 outstanding citations for a total of $80,000. Those two individuals appeared to have incurred uncollectable fines as both were out of business. The individuals had substantial contracts with conventioneers coming to Las Vegas and were really competing against the certified carriers.

Vice-Chair Evans stated Budget Account 3923 did need some performance measures. She noted an increase in the reserve and asked if there should be some reversion to the Highway Fund of those funds not needed for enforcement expenditures. Mr. Mendoza responded the reason no reversion had been made was because of the legal issues that had been raised. There was a pending case in the Eighth Judicial District Court where the question was what type of usage could be made of administrative fine revenues. There were two funds in the TSA budget. One dealt with fines and the other dealt with the trust funds which was their general operating budget. The issue raised by the Independent Limousine Association was that the TSA was violating the constitution because the commissioners sat in judgement and then fined individuals and as a result, those fines paid the commissioners’ salaries.

Mr. Mendoza said the allegation was false and that was what had been reported in the news article (Exhibit G). The TSA would address the issue to both money committees in letter form. Vice-Chair Evans stated the committee would keep an eye on the reserve and not allow it grow unduly.

Daryl Capurro, Managing Director, Nevada Motor Transport Association, provided a historical perspective. About 10 years ago Congress totally deregulated interstate economic regulation altogether. The Interstate Commerce Commission that had been in charge of those interstate regulatory functions much like the TSA worked intrastate, was phased out over a period of years.

The Intermodal Transportation Efficiency Act (ISTEA) bill of 1994 included a provision that substantially prevented the states from intrastate regulation. Household goods, all business movements, and exhibition movements were deregulated intrastate. What remained were residential moves.

In the tow car area, only non-consent or third party tows (law enforcement tows) were left under a regulatory structure. The bill before Congress did not touch taxicabs, limousines or buses in 1994.

When the federal T-21 or transportation bill passed and became law
July 21, 1998, it contained a provision that again pre-empted the state from regulating buses. A bill would be introduced in the Senate soon that would end the rest of regulation for tow cars and buses. Mr. Capurro noted there would be a question about how far bus preemption went because the federal law mentioned charter buses but the simple matter of sightseeing buses was not indicated at the congressional level.

The other fact was that of moving charter buses into the same classification as sightseeing buses which basically ended regulation of that area too. Buses were described as vehicles carrying more than 16 passengers including the driver. Everything else was considered either limousines or taxicabs. The bill before the Senate would retain regulation of household goods carriers, taxicab motor carriers and limousine motor carriers.

Under the continuing erosion of the ability of the state to regulate, it called into question how far the legislature should go to maintain an agency to regulate, or whether it was more economical to merge it with the Taxicab Authority which was statewide agency but with a 400,000 population cap. The legislature must look at what happens during the Seventieth Legislative Session particularly with the preemption part in which there was no choice. Safety and insurance were all moved over to the DMV for freight and a they shared certain responsibilities with the TSA. Logically speaking, Mr. Capurro felt the responsibilities belonged with the DMV because upon registration an individual must show evidence of insurance. Safety was already handled by the Highway Patrol and the Commercial Division for trucks.

Mr. Capurro suggested the committee not close either the TSA or Taxicab Authority budgets until all bills dealing with those areas had all been heard.

Assemblyman Beers asked for clarification of whether insurance was being proposed to move to DMV or whether it was already under the DMV.
Mr. Capurro replied currently all the insurance and safety responsibility for freight other than what was under TSA was under DMV. The bill that would deregulate buses and tow cars would move what was now a joint authority into the DMV.

Chairman Arberry closed Budget Account 3923 and opened the hearing on Budget Account 4130.

Robert Anselmo, Administrator, Taxicab Authority stated the authority had jurisdiction over taxicabs in Clark County only.

The responsibility of the Taxicab Authority was to determine the number of taxi- cabs authorized by a certified company, the issuance and suspension or revocation of drivers permits, determination of the safety and mechanical operation and comfort standards of the cabs, determination of the fares to be charged and conducting criminal investigations in conjunction with other law enforcement agencies.

Mr. Anselmo stated the Taxicab Authority was unique in the nation as the only state agency regulating cabs. Requests came all the time from other areas concerning the jurisdictional problem of taxicabs operating county to county or city to county.

Mr. Anselmo stated there were currently 881 permanently medallioned taxicabs and 210 time-restricted medallions for operations between the hours of noon and midnight and 100 geographically restricted medallions allocated to serve the 17.1 million trips annually in 1998 within Clark County.

In addition to the 1,191 medallioned taxicabs there were over 350 spare taxicabs available for service. Those spare taxis were issued temporary medallions for the greatly increased volume of traffic during large conventions or major holiday weekends. Over one-quarter of the taxicabs in Clark County were replaced with new vehicles each year. That made the Clark County taxicab fleet the most modern in the United States.

Mr. Anselmo testified the Field Investigator Division was primarily responsible on a 24-hour a day, 7-day a week basis to provide services to the traveling public. The division ensured taxicab drivers were properly operating their vehicles, properly licensed and they were operating within the standards of the industry. The investigators wrote over 2,000 notices of violation in the previous year. The notices were initiated either through observation or through complaints.

Serious violations must be adjudicated by the Taxicab Authority hearings officer in a scheduled administrative hearing. Investigators must immediately inspect all taxicabs involved in one of more than an estimated 2,250 minor accidents for 1998. The inspections determined the extent of the damage as it applied to the serviceability of the taxi. The field investigators also investigated more than 2,700 complaints during FY 1998. Investigators conducted the annual driver’s awareness training to educate all taxi drivers for their protection and safety. In 1998 over 1,500 drivers were taught defensive driving techniques, driver conduct, and courtesy as required by the statute. More than 1,500 taxis must be inspected each quarter. The vehicles were inspected for the safety of the traveling public.

The vehicle inspectors and investigators examined taximeters to ensure the customer was not being cheated. Mr. Anselmo noted if anyone had seen the television program where drivers deflated their tires to increase their revenue, it was not cost-effective method to do so. In Clark County driving 21 miles with deflated tires would create 30 cents of profit.

The airport staff consisted of 13 uniformed officers who operated at the airport to ensure the accurate and effective flow of taxicabs through the airport, and to assist the public in finding any lost or stolen property while riding in a cab.
Mr. Anselmo added the officers were peace officers only while on airport property and they did cite drivers for overcharging customers. Some drivers were entrepreneurial and charged an airport connection fee of $1.20 when taking customers to the airport from hotels. The connection fee was only authorized when customers were being taken from the airport to hotels.

Mr. Anselmo stated they had heard rumors of concern that the Taxicab Authority’s ability to continue to provide a subsidized senior transportation through the Division of Aging, Senior Ride Program. Mr. Anselmo noted the budget included a slight reduction. The budget contained approximately $216,000 in the first year of the biennium to pay for the program.

The Taxicab Authority felt that if its revenues continued to grow as it had in the past through new property openings such as Mandalay Bay and the Venetian, then within the first quarter of FY 2000 they might be able to increase their support of the senior program.

Mr. Anselmo introduced Rick Boxer, Program Manager, who could address the budget by program if so requested.

Chairman Arberry noted annual growth in taxi trips was more significant in
FY 1991 through FY 1997. The current growth was projected at .4 percent over FY 1997 and asked why there was such a lack of growth in the number of trips in FY 1998. Mr. Boxer, replied the whole economy in Clark County remained very flat in 1998. The taxicab industry was doing slightly better than visitor volume and airport enplane and deplane of passengers. Basically for the first three-quarters of 1998 the taxicab industry was running at 1 to 1.5 percent growth. With the opening of the Bellagio, October, November and December were very good months and brought the calendar year increase to 2.66 percent. Some periods in 1998 showed a decrease in the number of trips basically because of the fewer number of visitors.

Chairman Arberry confirmed because of no change in the number of new properties coming on, the industry was relatively flat. Mr. Boxer agreed. In conjunction with the opening of the Bellagio, the Clark County economy took off again. In January 1999 trips exceeded the previous January by 173,000 or 11.5 percent increase. It broke the all time record for number of trips in a month by 122,000. With the opening of the Mandalay Bay, the Venetian and the Paris later in the year, revenue figures should be more optimistic.

Assemblywoman Chowning noted the number of vehicle inspections was at approximately 2,000 and asked what percentage of the total vehicles that figure represented. How many of the 52 positions were inspectors and the
2,000 complaints did not seem like a large number out of 17 million taxi trips. She asked what happened to those entrepreneurial folks who were charging too much. Were customers riding in safe vehicles. Mr. Anselmo replied the Taxicab Authority would be glad to respond. The taxicab numbers constantly increased and currently there were 1,181 authorized medallions and another 350 cabs available for service. Depending upon the month of the year and their schedule the numbers fluctuated. One day inspectors might do 50 inspections a day and sometimes only 20. The vehicle inspectors were the ones who must clear any 24-hour notices. Mr. Anselmo gave an example of a taxi that pulled into the airport and one of the airport control officers observed a taillight was out, that was a safety issue but not a large enough issue to take the cab out of service. The driver would be issued a 24-hour notice, which gave the company 24 hours to replace the bulb. One of the inspectors must inspect the cab before it could be put back in service.

Approximately 3,770 inspections were done in 1998 by 4 field inspectors. One of the inspectors had a medical problem for a while which substantially reduced the number of inspections done. Assemblywoman Chowning requested
Mr. Anselmo to provide the answers for the remainder of her questions to staff.

Chairman Arberry asked how the increases in Laughlin and Mesquite had affected the workload. Mr. Anselmo replied the Mesquite area did not affect the workload very much. The inspectors went out there and to Laughlin three or four times a year. The two cab companies that operated in Laughlin were also licensed to operate within the urban area of Las Vegas. In many instances cars were transferred up to the urban area for inspection. Otherwise inspectors and investigators were sent out randomly to ensure drivers were not becoming entrepreneurial.

Assemblywoman Chowning asked the status of driver personal safety. What was the industry doing to enhance the safety of the drivers. Mr. Anselmo replied a safety committee was formed a number of years ago, which was a combination of drivers, owners and law enforcement officers to attempt to address the issue. Taxi cab drivers were unique people in that they were very susceptible to being robbed. In the past the safety committee recommended an annual safety training class which was being done for all drivers. Another recommendation was for a green light to be installed on the roof so that if the driver felt he was in a dangerous situation he had a hidden switch to turn on the green light alerting someone to get help. A few public service announcements had been done to alert the public to the meaning of the green light. One of the Taxicab Authority board members had a safety committee involved in researching placement of a Global Positioning Satellite (GPS) locator to be installed in all cabs so that in the event of an emergency the driver could push a button which would flash a notice on the television screen at the nearest Metropolitan Police station. Some caution was needed because some drivers liked it and others felt it was a "big brother" action.

Mr. Anselmo noted the previous Saturday there had been a very bad accident where a taxicab legally driving down the street was broadsided by a drunk driver and two of the passengers were killed. The driver and a third passenger were in critical condition in the hospital. The safety of drivers was a high concern of the Taxicab Authority although it could do nothing about such a situation. The annual training included warnings not to pick up "flaggers," deny rides to people if they were suspicious, if the ride could not give a specific address or the address was in an out-of-the-way place, not to pick up the passenger. Mr. Anselmo added to support the public, the agency did encourage drivers to pickup those who wanted to make short trips.

Assemblyman Price commented he had ridden in two cabs within the past
24 hours and discussed safety with the drivers. One had been robbed and both mentioned being careful about the fares they picked up and making sure fares had money to pay for the ride. It appeared the cab drivers were becoming very aware.

Assemblyman Price stated he had not realized Nevada was the only taxicab authority in the United States. Mr. Anselmo replied Nevada had the only state agency. In most cities and counties the functions were either performed by a city commission, a county commission, or county or city licensing bureau.

Assemblyman Price asked if there was any type of a national organization the Taxicab Authority worked with. He commented there was one national major city where the airport was actually across a state line and asked where that was. Mr. Anselmo replied it was the state of Kentucky and Cincinnati, Ohio. In that particular instance the licensing procedure was a county commission for Kentucky and a city commission for Cincinnati. Another unique situation was in New Orleans, Louisiana where the taxis charged a flat rate to the county line and then the meter was turned on going into the city. The Nevada Taxicab Authority was a member of the International Taxicab Regulators and they pretty much looked at Nevada as the epitome of regulation.

Chairman Arberry asked Mr. Anselmo to update the committee on the Senior Ride Program. Mr. Anselmo replied the Senior Ride Program submitted a budget substantially higher than what was finally recommended. The program wanted another position, a new computer, and a desk. The ending fund balance was required to remain above $200,000. Rather than impact the program totally the Taxicab Authority took some hits in its budget to sustain enough funding to allow for 20,000 ride books to be sold in 1999, an increase of 5,000 over the previous year. The Taxicab Authority had every confidence the revenues would continue to increase, and a letter of intent might be submitted to the legislature in the first quarter of the next biennium at which time the Taxicab Authority would support the Senior Ride Program in their request for additional funds. The program was not in jeopardy.

Chairman Arberry closed the hearing on Budget Account 4130 and opened the hearing on Assembly Bill (A.B.) 224.

Assemblywoman Chris Giunchigliani, Assembly District 9, briefly introduced A.B. 224. She noted it was her fourth session to introduce similar legislation. She added the legislation had never been secured as a line item within the Department of Education Budget and hoped the committee would consider doing that in the Seventieth Legislative Session. It should not be something left to an afterthought because the council did go without funding for several years.

A.B. 224 simply carried through what was done in the previous legislative session, which appropriated $75,000 over the biennium for the education council to conduct its activities. In the Sixty-ninth Legislative Session
Mrs. Updike addressed the full Assembly. Her story and her presence were delightful, but it also brought people to tears. The whole issue of the council was not only education but also making sure people never forgot the Holocaust.

Assemblywoman Giunchigliani showed a copy of the book, "The World Must Know" regarding the Holocaust Museum in Washington, D.C. She shared a quotation from the book illustrating why the council and the education program were so necessary.

"The Nazis called the murder of the Jews ‘The Final solution to the Jewish Problem.’ It was their way of speaking euphemistically. Defining Jews as a problem or a question demands a resolution. The word final was only too accurate. Their intention was total—to end Jewish history, to eliminate all Jewish blood. The murder of the Jews was filled with apocalyptic meaning. It was in the eyes of the Nazi perpetrators, essential to the salvation of the German people."

Not only was the council about the Jewish people but other countries today such as Bosnia and Rwanda, where genocide was occurring all across the world. People must never forget what has happened and continue to teach tolerance. Assemblywoman Giunchigliani stated the council brought that message all across the state, not only to the youth, but the teachers who taught them. She added many teachers learned the subject in isolation. She had to teach herself through counselors and teachers on her campus that had participated in the programs.

Assemblywoman Giunchigliani introduced her dear friend and constituent, Edythe Katz Yarchever, Chairperson, Governor’s Advisory Council on Education Relating to the Holocaust.

Ms. Yarchever exhibited two books they tried to put into every library in the state of Nevada. The book titles were "Holocaust Denial" written by the American Jewish Commission and "The World Must Know: As told in the United States Holocaust Memorial Museum." The council had never mandated that teachers teach about the Holocaust. "Mandating" was sometimes a dirty word. She added she got calls from other states that did the same type of work asking if Nevada mandated Holocaust Education. If teachers did not want to teach about the Holocaust, they would not. Nevada teachers however, were mandating Holocaust education.

Ms. Yarchever stated 2 years previous, she had attended a social studies teacher’s conference and they were the ones who mandated Holocaust education.

Holocaust education was started back in 1978 and at the time the Jewish Federation was and is still involved. The churches and teachers were mandated to watch the mini-series on the Holocaust. Ms. Yarchever stated she was fortunate enough to have as a mentor, the man considered the "Father of Holocaust Education," and a Methodist minister. His colleague for 28 years
Mr. Hubert Locke, an African-American political science teacher organized the annual scholars’ conference on Holocaust education.

A number of conferences were held in Las Vegas and Reno. Ms. Yarchever stated some committee members might recall a conference done in Northern Nevada on ethics and morality. Elizabeth Maxwell was the keynote speaker and the legislature was in session. The council had always been a part of the multi-cultural conference in Las Vegas. The council did the very first workshop on Armenian genocide and on the displacement of the Japanese Americans.

The council started with the Gertrude Sperling Library, looking for funding.
Ms. Yarchever’s mother had given her some stock and the council started a library in Las Vegas. The library was open to everyone and widely used. On Friday March 5, 1999, Ms. Yarchever had a meeting scheduled with the Ron Mack Family to organize a Holocaust Library at the University of Nevada, Reno in honor of Judy Mack’s father who died at Auschwitz.

Ms. Yarchever provided the committee with an overview of the program and the agenda for The National Judicial College Conference in Washington D.C., February 14-19, 1999 (Exhibit H). The council was approached the previous year by the Judicial College for a small grant of $3,000 because the museum in Washington, D.C. was doing a seminar on World War II crimes trials with Nuremberg as the key. The council agreed to provide the grant and was invited to return again in the current year. The Judicial College of Reno ran the whole show.

Ms. Yarchever told a story of about 3 years previous when she and her husband were in Krackow, Poland and toured the Center for Judaic Study. Two people were there from England that were involved in similar work and when
Ms. Yarchever gave them a business card the couple said, "Oh, you’re from Nevada. It is the best." Ms. Yarchever said the legislature had helped make it so.

The council had taught about 200 teachers in 1999. More teachers were being taught all the time and a breakthrough had finally occurred in the Elko area. A program for "Days of Remembrance" was being worked on. In the Fall, teacher training was going to be conducted. Professor Madsen at the University of Nevada, Las Vegas was sent to study at Yad Vashem. Some of the public school teachers were also sent to Yad Vashem. The council intended to send someone from Elko and someone from Reno in the coming year, someone from the community college in Truckee, California and someone from the community college in Las Vegas were included in future plans as well.

The exhibit the council provided in Las Vegas was an exhibit that came in from Washington, D.C. that included Varian Fry, the only American in the Avenue of the Righteous Gentiles. There was a tree planted at Yad Vashem for gentiles who saved Jews. Varian Fry worked for the State Department in Europe and contrary to his employer’s directions, saved at least 6,000 people. The Clark County School District provided buses and approximately 1,500 children attended the exhibit. The Leslie Art Exhibit was also well attended. He was an artist in Trezin, Poland who was allowed to sketch cartoons about life in the ghetto. When he knew he was on his way to Auschwitz he cut up the art and buried it. Mr. Leslie lived and his wife dug up the cartoons from which
Mr. Leslie made large copies. The children did not go into the main exhibit because of its graphic nature but some did come back with their parents.

Vice-Chair Evans congratulated Assemblywoman Giunchigliani for persevering in such a very import endeavor. She commented she periodically received a four to five page letter from a person in Incline Village telling her how she had gone astray by supporting the Holocaust bill and its efforts. It was an impassioned diatribe on how the Holocaust was all a hoax, and was greatly overblown. She commented it was hopeless to try to educate some individuals. She noted there was still work to be done so that sort of thinking could not prevail.

Ms. Yarchever thanked the Vice-Chair and asked committee members to recall when Mrs. Maxwell was present. She was the widow of the wealthy publisher who fell off a boat and died. At the dinner when the Governor introduced her, he started by saying he had gotten a nasty note from somewhere that accused him of being a Jew lover and he added, "You know what—I am."
Ms. Yarchever stated what happened to one could happen to others as well.

Ms. Yarchever introduced Gene Greenberg, Treasurer, Governor’s Advisory Council on Education Relating to the Holocaust, and Jim Rogers, a "patron saint."

Assemblywoman Chowning directed everyone to the supporters of the council listed on the letterhead of Exhibit H and noted it included many well-respected, wonderful educators and contributors to the state. She added her support for A.B. 224. Assemblywoman Chowning added the intolerance problems that kept coming up elsewhere were abhorrent. She thanked Ms. Yarchever for the breakout of the expenses incurred and specific funding expenditures.

Gene Greenberg thanked the state for their support of the council. He testified he was a member of a group called the Second Generation. He explained that meant his parents were survivors of the Holocaust. Both of his parents had survived Auschwitz. He felt it was his duty to continue his parents’ work of telling the story. One of the great things the council did was to expose children in the school system to the very few survivors that were left alive. He commented there was no way to debate a survivor of the Holocaust.

Mr. Greenberg stated he was touched by Assemblywoman Giunchigliani’s quotation from the book. He told the committee he spent a lot of time speaking in schools and one thing he liked to do was quote Elie Wiesel, who was author, Holocaust survivor, and Nobel Prize Winner. He was asked what he felt the world had learned from the Holocaust and he said, "That you can get away with it."

Ms. Yarchever interjected that Mr. Greenberg lost two little brothers in Auschwitz that he never knew.

Assemblywoman Cegavske stated she was working on a history compact disc for the State of Nevada and asked if Ms. Yarchever would work with Joan Kershner, State Museum, Library and Archives, to include some information from Holocaust survivors living in Nevada. Assemblywoman Giunchigliani replied she would not speak for the council but opined it was a wonderful idea.

Jim Rogers was in the television business in several states, and testified he spent about 65 percent of his total time in education. Mr. Rogers stated he was a Methodist and added there was no more important issue than education about the Holocaust. He commented he did not often appear in public forums such as the committee hearing but he was pleased to be present and strongly supported A.B. 224.

Mr. Rogers indicated his organization in the past year, had made commitments to the law school in Southern Nevada and to the Engineering School in Northern Nevada that would exceed $30 million. An integral part of education was dealing with the Holocaust issue on an ongoing basis. He commented $75,000 was not a lot of money and added his organization had also given financial support to the council and would continue to do so.

Assemblywoman Giunchigliani concluded by urging the committee to place funding for the council in the Department of Education budget permanently. Ms. Yarchever had spoken with Governor Guinn about that potential as well.

Assemblywoman Giunchigliani summarized by saying, Michael Berenbaum, Director of the Washington, D.C. Museum told a story about a gentleman whose responsibility was to greet new arrivals at the concentration camps. His responsibility was to explain what was happening. She quoted, "I have told you this story is not to weaken you, but to strengthen you. Now it is up to you." Assemblywoman Giunchigliani stated she would leave the committee with those words because the budget process was part of what was up to legislators as well.

Ms. Yarchever stated it was a privilege to live in the state of Nevada.

Mary Peterson, Superintendent of Public Instruction, testified lending her support to A.B. 224. The Holocaust Council, of which she was privileged to be a part, was doing wonderful things educating students about the Holocaust and the lessons related to it.

Eddie Floyd, host of a live talk show, called "Nevada Matters" testified each and every person present mattered. He noted he had received more faxes, telephone calls and letters on behalf of Ms. Yarchever and the unbelievable job she had been doing. He asked to personally give her on behalf of himself and his co-host, "Uncle" Mel Gordon, a round of applause.

Seeing no further testimony, Chairman Arberry closed the hearing on A.B. 224. No action was taken.

There being no further business before the committee, the meeting was adjourned at 10:47 a.m.

RESPECTFULLY SUBMITTED:

Cindy Clampitt,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

DATE: