The Assembly Ways and Means and Senate Finance Joint Subcommittee on General Government was called to order at 8:12 a.m., on Tuesday, March 9, 1999. Chairwoman Vonne Chowning presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List.

ASSEMBLY SUBCOMMITTEE MEMBERS PRESENT:

Mrs. Vonne Chowning, Chairwoman

Mr. Bob Beers

Mrs. Marcia de Braga

Ms. Chris Giunchigliani

Mr. David Goldwater

SENATE SUBCOMMITTEE MEMBERS PRESENT:

Senator William O’Donnell, Chairman

Senator Lawrence Jacobsen

Senator Joe Neal

SUBCOMMITTEE MEMBERS ABSENT:

None

STAFF MEMBERS PRESENT:

Chairwoman Chowning called the meeting to order and asked Paul Iverson, Administrator, Division of Agriculture, Department of Business and Industry, to provide an overview of the agency’s proposed reorganization plan.

Mr. Iverson explained the Division had approximately 50 different programs and managed 12 or 13 budgets. He introduced Bob Gronowski, Chief, Bureau of Plant Industry; Don Henderson, Deputy Administrator, Public Lands, Noxious Weeds, and Horse issues, and Ed Hoganson, Supervisor, Bureau of Weights and Measures. Additional staff present were Dr. David Thane, State Veterinarian; and Rick Gimlin, Administrative Services Officer.

Mr. Iverson explained during the interim the Division of Agriculture had the opportunity to go through two very thorough reviews. The agency had a Legislative Counsel Bureau (LCB) audit, which had laid some foundations for the division to build on.

The Division of Agriculture also went through a base budget review by the Fiscal Analysis Division, LCB. It helped to define the agency, determine where the needs were and what the Division of Agriculture needed to do in the future. One thing both reviews revealed was the agency did not have a strategic plan. That meant the agency did not know where it was going and if they "got there", whether they were "there or not."

The strategic plan was not developed in a vacuum. Throughout the process the agency was in constant contact with their budget analyst and the LCB audit staff. The subcommittee members were the first individuals to see the strategic plan. All of the management staff had attended the strategic planning classes taught by the Department of Administration. The strategic plan was presented as Exhibit C. The plan had been approved by the Board of Agriculture and put through a peer review of all staff of the agency.

The plan contained the agency mission and vision statements. Goals and objectives were listed and for each objective there was a measurement indicator in Exhibit C. The measurement indicators in The Executive Budget were different than those in the strategic plan and would be changed to follow the strategic plan.

The strategic plan was a dynamic document that could be updated to reflect changes in the division. The agency discovered the plan was missing quantitative numbers that would be added.

Rick Gimlin, Administrative Services Officer, stated all of the budget accounts requested both training funds and new or replacement computers. The requests were made to make sure staff had the tools needed to do their jobs in the future. Many challenges were being remedied through the use of technology. The division planned to update all computers to Pentium class machines.

The training was requested to update staff on how to use various pieces of software and to allow the Bureau of Livestock Inspection to make some videos on their operational procedures. Brand inspectors were scattered throughout the state and were difficult to reach. A training video would allow communication with those inspectors without bringing them into the headquarters office. The proposed budget would allow certification training in the metrology laboratory in the weights and measures program. He concluded the budget requests would help the agency meet the many challenges of the future.

Mr. Iverson stated a number of changes were taking place in agriculture. Twenty years ago the focus of the agency was strictly toward the agriculture industry, however the agency had gone through transition and many of the current programs were not focused on agriculture. Most of the current programs focused on the urban areas of the state. The agency was much more involved in water and land issues, and large-scale issues that impacted the entire state.

With some of the reorganization requests new things were happening. Threats of bio-terrorism involved the agency. All state veterinarians had been trained and the agency was working with the counties and the state in development of an emergency plan. The anthrax scare in Las Vegas was a "wake-up" call to everyone in the country. If and when a threat occurred the agency would be on the first line of defense.

A new dog-bite program was started. Rabies at one time was an issue that focused on foxes and bats but with the tremendous number of dog bites in the state the focus on dog bites was gaining importance. Two years ago the agency tested over 200 dog heads. The agency was trying to reduce that number. Every time a dog-bite occurred the head did not have to be cut off and sent to the agency. A major program was underway especially in the Las Vegas area providing education in the form of posters, billboards and television ads. The information explained if a dog was pestered it would bite and under those conditions a rabies shot was not always necessary.

The Division of Agriculture was probably the only agency in the entire country that tried to manage an urban horse issue. Wild horses in the Reno area were not all living in the mountains any longer.

Mr. Iverson took a moment to thank those who served on the Interim Audit and Base Budget Review Committees.

Mr. Iverson provided subcommittee members with an Information Packet
(Exhibit D) and called attention to page D-3 and D-4 that contrasted the current and proposed organizational structure. The agency had a 10-member board who set policy and answered to the Governor and the legislature. Members were appointed by the Governor.

The Division of Agriculture had three bureaus:

1. Bureau of Plant Industry;
2. Bureau of Livestock Identification; and
3. Bureau of Animal Industry.

Under the Bureau of Plant Industry there were six units. Those included: Crop Science, Laboratory Services, Industry Services, Environmental Compliance, Las Vegas Office, and Weights and Measures. There was also an administrative team that included the administrative services officer, all the accounting staff, and the personnel staff. They served nearly all of the remaining staff.

The agency received a large amount of revenue into the Plant Industry Bureau and it was very difficult to track all those funds. One audit recommendation was to categorize the program elements. Fifty-five percent of the agency budget was from fee revenues. As services were provided from the state, the agency needed to ensure the state was reimbursed for those funds.

The other problem that occurred under Plant Industry was a large "pot" of money that paid for agriculture and for many years had paid for weights and measures as well. Weights and Measures was a public service or consumer protection function rather than an agriculture function. The agency would like to separate weights and measures into a separate budget with a separate funding mechanism of 50 percent from fees and 50 percent from the General Fund. That would give the agency an opportunity over the next biennium to look at exactly what costs were incurred and return in the next legislative session to make recommendations of what, if any, changes were needed in the area of fees and the General Fund.

The other reorganization proposal was a new Bureau of Administration. The Bureau of Administration would primarily serve the entire agency and be funded through allocations from the fee-based budgets. It would take the biennium to figure out exactly how much time each member of administration was spending on each and every budget to make proper allocations. The agency was requesting General Fund money to pay for the bureau through the next biennium. All that would happen would be a transfer of funds from the Plant Industry Bureau. The agency had picked up a small amount of funding from Budget Account 4537, Gas Pollution Standards. It was the only fee-based budget that had sufficient funding to help support the new Bureau of Administration. The Division of Agriculture was not asking for additional General Fund money to fund the bureau. The reorganization would simply separate out the administrative function.

Exhibit D, page D-5, showed the growth of plant nurseries in the state. Las Vegas had an imported fire ant issue. Other issues required every nursery to be inspected at least annually. At present the agency only had one staff person to conduct those inspections. That meant only major nurseries were being inspected, as there was not enough time or staff to inspect the Wal Marts and Albertsons type of stores. There was tremendous growth in the Las Vegas area of major nurseries. Most nursery stock was coming in from areas that raised a high level of concern. A major survey would be done because of what was being found and what had happened in California.

Exhibit D, page D-6 showed the growth of pest control companies. The Division of Agriculture had a responsibility to regulate that industry. Las Vegas had nearly 1,200 pest control operators in nearly 300 companies and the agency had not done a good job of inspection of that industry. Those companies were spraying homes, hospitals, casinos, and restaurants with pesticides and they needed inspection. Some type of continuing education program needed implementation. Almost every profession had continuing education requirements to cover advancements in technology, and especially new warnings and issues related to chemicals. The agency had the full support of the industry.

Chairwoman Chowning stated Budget Account 4540, Plant Industry, was under discussion and asked if the agency was having to inspect more nurseries and more out-of-state products should the agency assess a fee to the nurseries. She noted two Agriculturist II positions were requested. If the nurseries were bringing in the product and selling it and making a profit, they should help pay for the escalating costs. Mr. Iverson added his total agreement. What the agency was asking, was to be given the coming biennium to make determinations and policy recommendations of whether certain activities should be General Fund or fee-based. He stated his belief that with both nurseries and pest control companies it should be a fee-based program. As the agency prepared its next budget in a year it wanted the policy recommendations ready. He reiterated, the industry would support fee increases but policy decisions had to be in place. It must be ensured that consumers and the public were protected and at the same time try to protect the General Fund during the budget crunch.

Chairwoman Chowning stated because of the budget crunch, while she would like to think everyone was innovative all of the time; she was not convinced that was the case. In the crunch there was no choice and people had to be innovative. She asked how long the agency felt was needed to develop proper funding policies. She suggested funding the agency from the General Fund in the first year of the biennium and the second year would be funded from fee assessments. Mr. Iverson replied the only concern of the agency was all the various fees would need to be reviewed. The Chair requested Mr. Iverson to consider the possibility of funding the Agriculturists with fees in FY 2001 and to get back to the subcommittee members in 2 to 3 weeks. Mr. Iverson replied they would review which fees were assessed through regulation and which were set in statute. It was probably too late to make changes to the ones set by statutes in the current legislature. The Chair stated even with the new deadlines for the 120-day legislative session there was still time to make changes.

Senator Jacobsen asked if Mr. Iverson could develop a chart that would detail the five or six different units and indicate what fees were assessed and their purpose. He asked fees not assessed to also be included with the report. Mr. Iverson stated the agency would develop the chart. He explained so many of the fees were based on what happened 5 or 10 years ago. A real analysis of revenue and expenditure policies was needed. He gave an example of Weights and Measures and asked what portion of that should be General Fund, what portion should be paid by the petroleum industry, what part by small supermarkets with store scales, and who should be paying what.

Chairwoman Chowning concurred with Senator Jacobsen’s request and asked for an overall chart of who paid what, what positions were funded or needed to be funded with assessments, and when the last time fees were increased.
Mr. Iverson agreed and stated the discussion was what he had hoped for to lay a foundation for the other budgets.

Mr. Iverson continued his presentation referring back to Exhibit D and stated the next group of tables showed what was happening in Weights and Measures. The agency would look at the fees with their board from both the legislative and executive branch sides. Weights and Measures had experienced tremendous growth and was currently at nearly 23,000 units that required annual inspections by the current 15-member staff.

The agency was asking for four positions from the General Fund in the next biennium. Mr. Iverson stated those included a clerical position and explained since he had been with the agency, there was no clerical support at the front desk to answer the phone. Another request was for a person to work with pest control companies and a person to work with nurseries. He added the positions would not be devoted solely to those functions because no one in the agency had specified duties. If there was a bee problem for instance, everyone focused on bees. The final request was for a person in Weights and Measures. One major issue that was a current problem was store scanners. It was incredible how many merchants were failing in scanner checks. The Division of Agriculture was working in conjunction with the attorney general to develop a scanner inspection program. He indicated that the division kept coming back with requests for weights and measures staff because they could not keep up with the growth. He added his agreement with the subcommittee’s approach that the agency could ask for additional staff if needed each session but they were responsible to provide what the ratio of fee-based and General Fund should be.

Mr. Iverson referred to the final graph of Exhibit D that showed activity in lab services. He noted laboratory services where changing as well. The agency was still going into retail outlets, checking pesticides, insecticides, and checking for registration. All fertilizers, antifreezes and pesticides were registered. The inspections absolutely had to include the Wal Marts, Home Depots and similar retail outlets.

In the last two years the agency had increased their work in water residues. He gave a series of examples. A report that someone was spraying and got a child wet with spray. Inmates were spraying the road and forgot to wear protective gear and suddenly became ill. All the dogs in one neighborhood were dying so stomachs had to be removed and tested. Someone sprayed along the roadway and killed all the trees on a golf course. Those types of work were extremely difficult and the Division of Agriculture had the only chemical pesticide and petroleum laboratories in the state.

Mr. Iverson provided a graph of the petroleum laboratory samples gathered
(Exhibit E). Samples were up to about 3,000 samples annually and the graph showed how many were actually tested. Because the agency was involved in a broad approach, some of the testing had gone down because the agency needed to be more involved in fuel and air standards issues statewide. The Division of Agriculture worked very closely with the Division of Environmental Protection and the counties. Fuel quality related to air quality.

Mr. Iverson reported the agency received many complaints and provided examples. A person filled up their gas tank, drove down the road, and their car quit. The agency had to pull a sample and test it to ensure the fuel did not contain water and that the additives were correct.

Chairwoman Chowning stated her business when not serving in the legislature was real estate. She noted in Southern Nevada it seemed there was a large program for pre-treatment of homes for termite control. She asked why it was necessary since termites could only enter homes through wood and did not see the necessity when wood was grounded in cement as so many were.

Senator O’Donnell noted foundations were typically 18 inches above the grade anyway. Mr. Iverson replied there were termites in Las Vegas and pre-treatment was important. As the community continued to grow out into the desert and land was cleared by knocking down sagebrush and filling in with dirt to produce a nice looking area. Unfortunately the sagebrush roots and sometimes even the plants were underneath the fill which was a perfect setting for termites. Pre-treatment had been going on for a long time. The Environmental Protection Agency enacted a law that required treatment ingredients to be the same as those advertised on the label. The Division of Agriculture started a movement to educate the public or what was required. Housing and Urban Development and others had come out with other regulations to lower the guarantee from 5 years to 1 year. Even with pre-treatment termites could still enter homes. Building codes currently required a barrier around homes by requiring the wooden frame to be a specified distance off the ground. Sometimes through landscaping the barrier was breached and termites got under the slabs. In those cases the owner would never be able to get rid of the termites. Some new treatments were out that would help somewhat. The agency’s primary concern was that if pre-treatment was done, it must be done according to the label.

Chairwoman Chowning thanked Mr. Iverson for his explanation and support of truth in advertising. She opened the hearing on Budget Account 4540, Business and Industry, Plant Industry.

Chairwoman Chowning commented a large portion of Budget Account 4540 was being transferred into Budget Account 4554, Agriculture Administration.

Mr. Iverson stated Budget Account 4540 was the largest budget of the agency and was also the largest draw from the agency on the General Fund. He added
55 percent of the agency budget was fee-based and 44 percent was from the General Fund.

Mr. Iverson focused on the major requests of the agency in the budget beginning with M-200. The Division of Agriculture was asking for one clerical position for the front desk that would be transferred in enhancements under E-900 to Budget Account 4554. In addition to reception duties, the position would perform data entry, accounts receivable and deposits. The position was 100 percent funded from the General Fund and eventually there would be an allocation established to help pay for the costs.

Chairwoman Chowning asked why the position was completely under the General Fund and why some cost allocations could not be made. Mr. Iverson replied there would be allocations at a later time. Chairwoman Chowning asked if those allocations would be presented to the subcommittee in the next 2 to 3 weeks.
Mr. Iverson replied the whole new Budget Account 4554, Administration, would eventually have cost allocations from all the fee-based budgets. At present the division was in a position where an allocation could not be made in some of the smaller budgets. There was an allocation from the only outside money source in the Fuel Standards, Budget Account 4537. Mr. Iverson continued, in all the interim work that was done, the agency had asked for another biennium to figure out what fees should be charged and what fees should go to what budget. The agency had 13 budget accounts and staff had not had the time to determine what percentage of each person would be spent on each budget. The agency should have all that data together in time for the next budget process.

Chairwoman Chowning stated she was not patient enough to wait for another biennium. She asked if there was some plan the agency could provide in the next 2 or 3 weeks to show the plan to develop the figures. She asked again if the agency would agree to one year of General Fund allocation and an allocated budget in the second year. Mr. Iverson responded the agency had full intentions of doing that because by June 2000 the agency would be back in the budget cycle again anyway. He added the agency could delineate for the committee what they were going to do and return to the Interim Finance Committee in May or June, 2000 with the proposed allocations. The Chair directed Mr. Iverson to work with the subcommittee staff in the next 2 weeks and tell the members what plan was developed.

The subcommittee wanted to know why M-200 which was funded at $24,000 in FY 2000 and $30,000 in FY 2001 could not be cost allocated, at least in part. He explained an example of one of the many obstacles the agency needed to resolve was in brand inspection. The division had been trying to keep the Brands Unit alive for 4 years. By December of 1999 a decision had been made to raise the re-recording fee from $60 to $80 and running that out 8 years should make the unit financially sound. In January, February and March 2000, an allocation could begin from the re-recording fees to help pay for some of the costs. If the allocation was taken out beginning in July 1999 the Brands Unit would be out of funds before the end of the year.

Assemblywoman de Braga asked if the agency had the ability through regulation to raise the re-recording fee and Mr. Iverson replied that was correct. Assemblywoman de Braga asked if the agency had been able to realize any increase in the Head Tax by working with local assessors to collect the tax.
Mr. Iverson replied the agency was realizing a change and they knew a change was occurring because of all the calls received from people who could not understand why they had to pay. He explained in the past the tax was done on a "per head" basis and in the previous year the tax changed to a $5 minimum. In Clark County alone the agency had sent out 10 declarations in the past and in the latest mailing had sent out 4,500. It would take the next several years to find all the owners of livestock. The projection indicated the brand revenues would increase by somewhere between $20,000 and $50,000. It would take a couple years to get the funding smoothed out.

Assemblywoman de Braga asked how contact was being made with livestock owners. Mr. Iverson stated they were working very positively with all the assessors. The brand inspectors spent a period of time driving the streets and roads and writing down all the addresses where they found livestock and submitted those addresses to the assessors. The assessors sent out a declaration to each address and when those were returned an appropriate bill was sent to the resident.

Assemblywoman de Braga noted at one time there had been discussion of sending a letter to every address within areas zoned for livestock. She asked if that would be more cost effective or if the mailing would cost too much to do that way.
Mr. Iverson replied with the help of the assessors and doing the project the way they had, within 2 years the agency would have 80 percent of the livestock owners listed. Of course new livestock owners were moving in all the time and some were moving away so the numbers changed all the time. He expressed surprise that the legislators had not heard from their constituents on the issue because he felt like he had heard from half the state. He added most people were understanding once the program was explained to them.

Chairwoman Chowning noted module M-202 included one Weights and Measures Inspector. Mr. Iverson stated the agency had originally requested more positions but had worked out the situation with the Governor’s office and agreed with the one inspector who would have statewide responsibility. The position was not just to certify gas pumps, they would also be working on the scanning program and package checking. The position would be transferred to the new budget for Weights and Measures in E-900.

M-201 contained the request for two agriculturist positions discussed earlier.
Mr. Iverson said one position would focus on pest control companies and pest control education. The other position would work with nurseries and nursery inspections in an attempt to keep Nevada as clean as possible from insects.

Chairwoman Chowning asked if M-202 was projected to be funded 14 percent from the Motor Vehicle Pollution Control Account and 86 percent from the General Fund. She added if the inspector was inspecting more devices would it not follow more funds would be collected. She asked why such a large amount was required from the General Fund. Mr. Gimlin replied he had developed the budget by building all the growth factors into the base budget. In M-202, it did not show any additional weights and measures fees coming into the account. Those were reflected in the base budget. The agency needed to go back and reexamine their funding mix to determine if the program should be funded 100 percent through a fee-base, whether it should be all General Fund as it was a consumer protection program, or what the appropriate mix was.

Chairwoman Chowning asked Mr. Gimlin to work with staff to explain how the increased revenues were built into the base and whether the General Fund percentage could be decreased because of increased fee revenue.

Mr. Iverson indicated the 14 percent of pollution control funding paid for the entire weights and measures budget. He agreed with the Chair that a major policy decision of appropriate funding splits needed to be made between the Board of Agriculture, the industry and the legislature. The primary concern of the agency and the industry was that they had a good program to protect the consumer and the industry.

Chairwoman Chowning asked how the agency had arrived at 14 percent funding from the pollution control account. Mr. Iverson replied Mr. Ed Hoganson, Chief, Weights and Measures was asked to look at his staff and determine the amount of time they spent checking pumps, scales, weights or anything else and determine what percentage of time was actually spent collecting samples. Mr. Iverson believed that might need to be reevaluated during the next biennium and added pumps used to have three hoses but currently only had one hose. The Chair asked Mr. Iverson if he would report on that need in the information he was gathering in the next 2 weeks. She asked if it could be changed during the current biennium budget discussions. Mr. Iverson replied it was strictly a budgetary decision and he would ask two of his staff members to go out and recalculate the time needed for each sampling. The agency would come back with a recommendation.

Chairwoman Chowning closed the hearing on Budget Account 4540 and opened the hearing on Budget Account 4554.

Chairwoman Chowning commented Budget Account 4554 was the new budget account forming the Bureau of Administration.

Mr. Iverson stated currently all administration costs were charged to the Plant Industry budget. The administrative personnel’s tasks crossed all the budgets. By transferring the eight positions, plus the additional clerical position to the new account, it would give the agency the opportunity to develop an accurate allocation plan and in the long-term would allow time to determine a percentage of effort spent per staff member in each budget.

Chairwoman Chowning asked how much of the agency’s federal grants could be allowed for administrative costs. She asked if the agency had really taken that factor into its budget development sufficiently. Mr. Gimlin replied the agency chose indirect costs to match the federal grants rather than direct dollar match from the General Fund. He gave an example that if the agency received $300,000 from Environmental Protection, he might match up the 40 percent of "in-kind" donation with his time, Mr. Iverson’s time or staff time. He agreed to explore doing some kind of indirect costs agreement and determine if there was a way to recover funds directly. Mr. Gimlin noted that might entail the agency needing to ask for more direct General Fund match for the grants. The agency had tried to avoid that kind of load on the General Fund.

The Chair noted that enhancement modules E-900 and E-909 included a number of transfers coming into Budget Account 4554 from the other budgets.

Chairwoman Chowning closed the hearing on Budget Account 4554 and opened the hearing on Budget Account 4551.

Mr. Iverson testified Budget Account 4551 contained a number of E-900 units as well, transferring staff positions out of the Plant Industry budget, which was a primary agriculture budget. The agency wanted to move the Weights and Measures function out of Plant Industry to isolate costs. Weights and Measures staff did no agriculture work. Their duties primarily included fuel standard and consumer protection work.

Mr. Iverson stated the agency requested 1 new position and would transfer
14 existing positions. The agency also wanted to transfer to Budget Account 4551 two positions from Budget Account 4537.

Of particular interest in the Weights and Measures budget was the fact the new position was planned to conduct some scanning work. The agency stated in the original survey done on the scanners:

• 52 percent of merchants in Las Vegas failed;
• 73 percent in the Reno area failed; and
• Only 27 percent of those checked passed.

Mr. Iverson noted failure meant if an item was supposed to be on sale, during the scanner survey that item did not come up at a sale price. Reno-Sparks was just surveyed again with a result that 77 percent failed. The agency was preparing to survey Las Vegas again and explained the inspectors revisited the same locations to see if there had been any improvement. Mr. Iverson commented scanner testing was a new area for the division.

Weights and Measures was such an important area of the state with all the new growth in gas stations, supermarkets and stores on an ongoing basis. The agency would be coming before the legislature each session asking for additional help. The agency was again looking for what services should be fee-based and what should be funded publicly. He commented the Weights and Measures Budget would probably take the longest to determine whether funding should be coming from fees or a public appropriation.

Chairwoman Chowning asked what the agency did to let the public know when it found scanning machine errors. Mr. Iverson replied there were currently no regulations established and the agency conducted scanner investigations to assist the consumers and merchants. The investigator would check approximately
200 random items. When the report was finished, the bureau met with management and scanner staff and explained what difficulties were found and what was needed. The agency had hoped the percentage in the second Reno-Sparks survey would drop from 74 percent instead of increasing to 77 percent. By law, if the merchant marked an item at a specific price that was the price that must be charged at the scanner. Most merchants had positive attitudes and wanted to go back and make it right. He added scanner inaccuracy was a nationwide problem. Chairwoman Chowning stated if there was no regulatory authority, some work needed to be done through the Consumer Affairs Division or with the attorney general’s Consumer Protection Division to alert consumers to the problem. Mr. Iverson agreed and noted the agency was working with the attorney general’s office and would be working with Consumer Affairs.

Mr. Iverson stated the program would become much more elevated with staff hired specifically for that purpose. Chairwoman Chowning commented currently auto repair complaints were the number one area of concern but perhaps if consumers knew they were being cheated, scanner fraud might be the number one complaint.

Assemblyman Beers stated having some experience with scanner technology, he had some questions on technical details. He asked if what Mr. Iverson was describing was a computer data base problem, not a scanner problem. He stated it was almost impossible for a scanner to pick the wrong item off a bar code. The scanner went to the computer and looked up the item in the computer inventory database and popped up the price. He asked if the phenomena being described was the failure to accurately maintain the inventory pricing database in the computer at the store. Mr. Iverson agreed.

Assemblyman Beers asked if the agency felt sloppiness or malevolence caused the failure. Mr. Iverson replied in most cases he did not feel the failure of accurate pricing was a malevolent act. Most stores had so many items that keeping pricing changed on a regular basis and making sure the computer was talking to the cash register was more an issue of accuracy. Merchants needed to put more emphasis on updating the computer.

Assemblyman Beers asked if the stores were a week behind. Mr. Iverson agreed. Assemblyman Beers stated he had a problem characterizing the problem as the consumer being cheated. He explained if corn was on sale the previous week for 25 cents and in the current week it was being sold for 50 cents the computer probably still said 25 cents. Mr. Beers asked what was the percentage of stores in which the charged price was actually lower than what was posted and asked if the agency could include a performance indicator to show what variances were being found, which direction they were going and how significant they were in each direction. Mr. Iverson replied, as the project became a full-fledged program the information would be supplied. The same thing could be found in many other areas of the Weights and Measures Program. Many of the failures found at gas pumps were in the consumer’s favor. The genesis of a problem could not be determined until the scales were checked. The agency had a tolerance standard and if a merchant was outside the tolerance they were told to fix it.

Chairwoman Chowning noted consumers needed to be aware, they needed to check their prices for all their hard-earned pennies, but they also needed to be aware that in some cases they would be paying less than what was posted. She wondered how many consumers told merchants about an error that would favor the merchant.

Assemblywoman de Braga asked if scales were required to be brought into compliance and if there was a specified period of time to meet compliance.
Mr. Iverson replied everything had to be brought into compliance. If scales were out of compliance the agency could "red tag" one that was out of tolerance and keep it closed until the problem was fixed.

Assemblywoman de Braga asked if there was a fine involved or if scales were simply shut down. Mr. Iverson replied the agency had a fining schedule since the 1997 Legislative Session but normally a business received a warning and
99.9 percent of the merchants in the state with a problem would fix it because so many times it was a cost to the merchant.

Chairwoman Chowning stated performance indicators included:

• Number of devices that were going to be tested and inspected;
• Number of package item inspections; and
• Responses to consumer complaints.

The Chair stated those looked like good performance indicators but the subcommittee would like added what the outcomes would be. Mr. Iverson agreed.

Chairwoman Chowning referred to decision unit E-903 that transferred two Weights and Measures Inspectors from Budget Account 4537 (Gas Pollution Standards). She asked if the positions had been previously funded totally with inspection fees and why they were changing to partial General Fund funding.
Mr. Iverson replied the two positions had been funded 100 percent from Budget Account 4537. When the two individuals were moved into Budget Account 4551 it was a complicated issue, because it was determined 14 percent should come from Budget Account 4537 and the remainder should be General Fund. The agency felt the 14 percent offset the General Fund request and it was an equal cost.

Chairwoman Chowning stated maybe the General Fund portion needed to be looked at again and if the positions were inspecting devices why couldn’t the fees help pay for some of the cost for doing the work. She stated maybe that could be part of the 2-week report. Mr. Iverson replied perhaps the figures needed reassessment.

The Chair closed the hearing on Budget Account 4551 and opened Budget Account 4537.

Mr. Iverson testified Budget Account 4537 was all money from the petroleum fund and the Air Pollution Control Account. The budget contained no General Fund requests. The agency was asking for authority to hire two new chemists.

A major change of focus had been made. Over many years all the staff in that budget had been doing was taking and testing samples. Because of what was happening in Nevada, the division had to look at a "larger picture." The division had to be involved with the counties and their air quality issues, and had to be involved in some of the statewide issues with the Environmental Commission. The chief petroleum chemist was being placed in a position to be involved in the larger issues.

The division wanted to hire two additional chemists and place one in Las Vegas and one in Reno to assist in the petroleum labs, which were the only two in the state.

Assemblywoman Chowning asked how the positions would be paid for if there were not enough fees. She also asked if there was enough space to house the positions. Mr. Iverson responded currently space was not a problem. There was a new lab in Las Vegas and the lab in Reno. The individual currently working in the Reno laboratory had been working for a while and was the most qualified person in the state on fuel standards. She would be doing a lot more work with the counties, running samples. There was also a person in Las Vegas who was capable of working on the broader approach.

Chairwoman Chowning asked for confirmation of whether the Las Vegas lab was complete. Mr. Iverson replied the laboratory was complete. He added they were going to build a new lab in the Sparks Weights and Measures building. Currently the lab was in downtown Reno with lots of fuel samples going in and out and the agency wanted to get away from downtown and closer to Weights and Measures where the gas samples came in. That Capitol Improvement Project was put on hold. The division was taking money from the Air Pollution Control Account to build the lab. A proposal had been in for a new Division of Agriculture building as well, but because of the budget situation that was not going to happen. Chairwoman Chowning asked if the new lab was not built where the new position would be housed. Mr. Iverson replied the position would be placed in the existing lab and they would make enough room.

Assemblywoman Giunchigliani asked how many fuel standards violations there had been in the last biennium. She stated she had heard water was added to the fuel at some of the more cut-rate service stations. Such a practice would add not only to cars not running properly but also perhaps to air quality. Mr. Iverson replied in 1998, 2,751 samples were taken and 2,047 had been analyzed and there were
59 violations. He stated stations did not add water because there were standards that had to be met in the fuel industry and those were set on a nationwide basis. California had additional standards as well and that was where most of Nevada’s fuel supplies came from. If someone was adding water, the division had the ability to stop that in a hurry.

One of the biggest problems, especially in urban areas such as Las Vegas, was that a load of fuel might arrive in the morning and if a person fueled up at 5 p.m. and then called in a complaint, by the next morning a new load of fuel would have arrived at the station before the division even received the complaint call. All companies had to meet standards. There were several issues involved:

• Air quality;
• Fuel quality;
• How the car ran; and
• Taxes.

If a complaint was received, the division was there as quickly as possible to try to get a sample of the same load of fuel as the consumer who made a complaint.

Assemblywoman Giunchigliani asked if other things could be added to the fuel rather than water. She noted she had received numerous complaints on bad fuel. Mr. Iverson stated all fuels had standards they had to meet, but they all had different additives. For the big companies such as Arco, Shell or Chevron it was not worth it to add water or other stretchers to the fuel supplies. Once in a while small independents bought a load of fuel from someone that might not meet standards. Assemblywoman Giunchigliani asked if the stations checked the standards themselves. Mr. Iverson replied the stations did not have the ability to do that. A sample would need to be taken and sent to the division’s laboratory.

Chairwoman Chowning suggested they move to decision unit E-720 that requested the purchase of new equipment and asked Mr. Iverson to explain why the equipment was needed both in the south and in the north. She asked why samples could not be sent just to the main lab. Mr. Iverson explained the cost of sending gasoline would probably cost more than the entire proposed budget. Sending gasoline through the mail was not a good idea. All samples from Las Vegas were taken to that laboratory.

Chairwoman Chowning asked if the agency ever sent samples through the mail. Mr. Iverson responded if a Weights and Measures Inspector was going to the outlying areas, he would collect the samples and bring them back with him to the appropriate laboratory. Once in a great while if there was an emergency and something that could only be done at the opposite lab was needed, one vial might be sent by mail. He added sending 2,000 vials a year would be extremely cost prohibitive.

The equipment in both laboratories had to be exactly the same because both would be connected by computer. The agency was requesting two machines to check gasoline for liquid vapor. The other equipment requested was for British Thermal Unit (BTU) machines. So many vehicles even in the state fleet were converting to natural gas. It was still a fuel and thus the division was still responsible. All fuels, ethynol, gasoline, diesel, or natural gas had a BTU equivalent in common. The requested equipment would test the fuels and determine the actual BTU equivalent.

Chairwoman Chowning asked if the division tested Liquefied Petroleum Gas (LPG) fuel as well. Mr. Iverson said they did. The Chair asked if Compressed Natural Gas (CNG) was being used in Washoe County and other parts of the state, other than Clark County. Mr. Iverson responded it should be. He added there were some CNG users in northern Nevada. Propane was also being used. All those types of fuel needed to have a BTU equivalent and needed to be checked. It all impacted the internal combustion of engines. The Chair commented there was so much more LPG and CNG being used in Southern Nevada and asked because of the complexity of the equipment, was the same equipment needed at both ends of the state. Mr. Iverson stated if was necessary because of the distance factor. There were going to be issues at both ends of the state with the new Environmental Protection Agency (EPA) and fleet laws.

Chairwoman Chowning directed Mr. Iverson to provide further justification to the subcommittee. Mr. Iverson stated he would and commented none of the funds planned to purchase the equipment were from the General Fund. Equipment was funded 100 percent from the Air Pollution Control Account. Funds were allocated to the division primarily to ensure fuel standards were met. Chairwoman Chowning asked if the fuel users were contributing to the cost of the equipment or testing costs. Mr. Iverson replied fuel users all contributed. When a car was inspected for compliance with emission standards in Las Vegas and Washoe County a fee was charged for the inspection. Some portion of that fee went to the Air Pollution Control Account.

Chairwoman Chowning asked if that applied to those who were using LPG or
CNG-type vehicles as well. She stated her intent was to determine everyone in the state was paying their fair share and she was not sure they were. Mr. Iverson replied anyone in Reno or Las Vegas had to be checked for air pollution and a portion of the fee went to the Air Pollution Control Account.

Senator O’Donnell asked why a smog check would be done on a LPG vehicle.
Mr. Iverson stated a LPG equipped vehicle still made emissions into the air and noted he was not a chemist. When a smog check was done, the check was made of what particulates were burned by the vehicle and what was being emitted. Senator O’Donnell commented that water was coming out of LPG vehicles.

Senator O’Donnell asked if any chemists or individuals who understood the issue were present and could come forward to testify. Joe Johnson came forward and testified he normally represented the Sierra Club but in this instance he was representing himself. He was formerly a chemist with the U.S. Bureau of Mines and conducted gas chromatographic work. He had been involved in air quality and vehicle checking. Part of the vehicle test was to see if the vehicle was smoking. If a LPG-equipped vehicle was out-of-tune it could still be a contributor to particulate matter. If it was working correctly, it had very, very low emissions, much lower than even the accepted standards for gasoline engines. There was potential for mis-adjustment and to be a polluter. The same was true of CNG. There were
LPG and CNG-equipped vehicles in the northern part of the state as well and it was an area of concern.

Senator O’Donnell requested Mr. Johnson to get him statistics on the number of LPG vehicles that failed inspection. Mr. Johnson replied he would do that. Senator O’Donnell stated he was sometimes labeled as a non-environmentalist which was not true. He asked with all the trips to smog inspection stations for testing that only resulted in one or two people who did not pass, the smog emitted by those one or two vehicles did not make up for the thousands and thousands of trips it took to go the smog stations. A balance needed to be found.

Senator O’Donnell stated he understood California was currently looking at banning Methyl Tertiary Butyl Ether (MTBE) and asked what Nevada was doing. What were the health risks of MTBE. Mr. Johnson replied under another office, he sat on the State Environmental Commission, which had a hearing on the issue because of a request from Clark County to set standards. At one time Clark County intended to use MTBE as a summertime oxygenate. Extensive research was being done in California and it was Mr. Johnson’s opinion was that Nevada would wait for the results of California’s research. Senator O’Donnell interjected those findings were due out March 9, 1999. Mr. Johnson continued by stating California in general, would be discouraging MTBE. The commission did not anticipate use in Nevada. It was an issue that was before the commission and the commission would be addressing it.

Mr. Johnson stated regarding the level of risk, some studies had shown MTBE to be carcinogenic in animals. There were other factors in gasolines that were much more carcinogenic and hazardous. Expert testimony before the commission expressed the taste and smell standards would come into play in water before the actual threshold for carcinogens was met. MTBE was not a highly hazardous material although it did have long-term carrying capacity. In water it transported out beyond the plume rapidly and increased the cost of cleanup significantly. It was his personal opinion as a member of the commission that they would discourage the use of MTBE in the state but the commission had not yet taken action.

Senator O’Donnell asked if there was a law or ordinance requiring MTBE to be used in Clark County within a certain time frame in the Las Vegas Basin. Mr. Johnson replied there was a federal standard that made the southern air basin in California use MTBE in the summertime. Anticipation that Clark County would be bumping up against ozone standards in the summer led the Clark County Air Quality District to propose the ordinance. Senator O’Donnell stated his belief that Clark County already had the ordinance. Mr. Johnson replied Clark County was in the process of considering it and the request from the Clark County Health Board to the commission last fall was to make a determination by March 31, which had not been done to date. The question was whether there would be fuel available that contained MTBE and there were other possible choices. One of those possibilities was re-formatted non-oxygenated fuel that would meet the technical specifications. A federal ruling was anticipated to relax those demands. Nevada was not presently under a mandate to use MTBE, and other fuels could meet the performance standards.

Mr. Iverson stated he also served on the Environmental Commission although he was not a chemist and some of the issues could be a little challenging. He added the commission had heard excellent testimony regarding health hazards from some members of the medical community and whether MTBE posed a carcinogen threat was still being debated in the scientific communities.

Mr. Iverson stated the division would get the LPG inspection failure rate to Senator O’Donnell. He added the Environmental Commission made the determinations of what vehicles or how often vehicles were inspected, not the Division of Agriculture. Senator O’Donnell commented the legislature also had a part in determining when and what vehicles were inspected. He needed the statistics to determine whether he needed to introduce a law. Mr. Iverson encouraged Senator O’Donnell to attend the next meeting of the Environmental Commission because inspections, older vehicles, and who should be inspected were on the agenda. He stated the senator brought up a very valid point that he had not heard before. He likened smog inspection to the horse issue where half the people thought it was a great idea and the other half absolutely thought it was ridiculous. Mr. Iverson asked why a new vehicle should be inspected. Senator O’Donnell noted there were approximately 1.2 million cars in the state and about 800,000 vehicles were in Las Vegas. If one added 800,000 times a person had to drive to a smog station to get checked and considered that pollution versus how many failed, he wondered if smog checks were worth doing. Mr. Iverson stated he would have Mr. Hoganson call DMV and determine the actual number of propane and LPG vehicles inspected and what the failure rate was. He stressed the Division of Agriculture had nothing to do with the pollution program except for fuel standards.

Chairwoman Chowning stated there were some bills currently in the legislature dealing with those subjects.

The Chair closed the hearing on Budget Account 4537 and opened the hearing on Budget Account 4545.

Mr. Iverson stated that the employees in Budget Account 4545 were involved with testing of pesticides, antifreeze, and fertilizers. Over the last 10 years the emphasis had changed considerably toward pesticides. Issues included more people, more types of pesticides, more chemicals, more individual spraying, and more pest control companies. There were restricted-use pesticides, pesticides, and insecticides used throughout the state.

Every pesticide, all antifreeze, and chemical fertilizers were registered. The division was asking for one fee-funded position paid by the cost of registration. The position request was for a chemist at the laboratory. Mr. Iverson noted the agency was having a tough time keeping up with the workload in the laboratory. Water and residue testing were extremely complicated and were taking up more and more time. The position would be placed in the Reno pesticide laboratory.

Mr. Iverson referred to module E-710, which contained a request for computers. The agency had originally asked for a piece of equipment that was not recommended by the Governor. The agency agreed with the Governor’s recommendation, however, the agency would probably ask for the equipment again in the 2001 Legislative Session. The equipment would test certain new chemicals that had a unique polarity for which the agency did not currently have the ability to test. The agency could probably maintain testing through the biennium and if they did get such a chemical, they could probably send it off to a more sophisticated lab. He stressed sending pesticides through the mail was not a real cost effective or safe way to deal with the situation.

Mr. Iverson added in emergency situations such as an airplane crash where pesticides were being transported or the big chemical spill in Sparks where the chemical that spilled was not known, the pesticide laboratory had the ability to solve those unknowns. Some of the pesticides and other chemicals were extremely hazardous and the agency did not want to put HAZMAT teams in harm’s way. The pesticide laboratories were a real service to the communities. Samples could be transported to either lab in 5 or 6 hours through the Nevada Highway Patrol.

Chairwoman Chowning confirmed the agency request was because they were already performing the work but the agency wanted another person because of increased workload. Mr. Iverson agreed. He added the chemist would not be a "high-level" chemist but one who would come in and do some of the preliminary work and train in the office in case there became a need later for additional staff. The Chair asked Mr. Iverson to get the justification to staff. She also requested him to provide why the new position was needed, the complexity of the work and how the funding would be structured. She asked if some of the cost of the position could be paid through the EPA pesticide grant or would the funding come 100 percent from fees. Mr. Iverson stated funding would come from fees to pesticide companies. The Chair commented the reason for the question was it did not appear there was sufficient funding from fee projections to pay for the position. She asked Mr. Iverson to review the funding again and if there was a gap, explore how that funding would be provided. Mr. Iverson replied the agency had the ability to set fees by regulation in the budget but if in fact there was not enough funding to sustain Budget Account 4545 he did not have another recommendation. The Chair stated if a fee increase was needed the subcommittee needed to know so it could be put in the budget.

Mr. Iverson asked the proper procedure for such a request. The Chair replied it was much more efficient if the agency worked with staff but she did appreciate Mr. Iverson asking.

Chairwoman Chowning closed the hearing on Budget Account 4545 and opened the hearing on Budget Account 4546.

Mr. Iverson stated Budget Account 4546 contained the brand inspection program. He reported the agency should make it through the fiscal year. With the aid of re-recording fees in an approximate amount of $400,000 the budget should sustain at least until the year 2008.

Mr. Iverson stated all the fees collectable under Budget Account 4546 were primarily set by regulation. The agency had been in a tough situation because
3 months into the biennium, the industry went down about the same time the agency realized it was "broke." The agency had done everything it could to reduce costs and tried to come up with some additional revenue. He noted the Livestock Inspection budget was an extremely important budget for the livestock industry in the state. Some of the functions of the staff within that budget included ensuring animals were not being stolen and were kept by those to whom they belonged. The budget included approximately 100 staff people. Once re-recording was established and once the new head tax was received and the agency had a better idea of revenue available, it would go back and provide a proper allocation.
Mr. Iverson noted if he did a proper allocation on Budget Account 4546 at the present time, the budget would run out of funding before the end of the fiscal year.

Mr. Iverson stated the requests in the budget including media and a video cassette recorder (VCR) would not be purchased until re-recordings were complete, the head taxes were submitted, and a significant reserve was in place. The past 4 years had been tough for everyone involved in the budget process. The agency did not want to go back to the General Fund. The unit did have some needs if appropriate levels of funding were available.

Chairwoman Chowning asked if the agency was sure they had implemented safeguards so the budget would not be overspent again. She asked how the division was paying for the employees. Mr. Iverson replied the unit did have incoming livestock inspection fees at 70 cents a head. Chairwoman Chowning clarified since the reserves were drawn down so far, how the agency paid and planned to continue paying for staff. Mr. Iverson replied, "A prayer." He continued, the agency was very optimistic. They had implemented some policies and tracked and monitored and knew how many cattle were being shipped and they knew the costs for each of the 100 employees. Mr. Iverson commented it was very difficult to control the amount of travel because the staff in that particular bureau basically consisted of 100 self-employed people who happened to be state employees.

Mr. Iverson stated the unit had dropped down from eight full-time brand inspectors to three. Vacant positions had not been re-hired. The bureau chief and secretarial staff vacancies had not been re-hired. Everyone was pitching in to try and make the budget last through the biennium. He stated he thought they could make it work and noted he knew the subcommittee didn’t like to hear the word "think" but that was all he could offer at the moment.

Chairwoman Chowning asked Mr. Iverson to provide the subcommittee with a report of the kinds of safeguards in place to protect the reserve. She added the subcommittee appreciated the attitude and camaraderie of the agency. Mr. Iverson replied this was a budget that was upside down. The agency was fortunate no one had quit that had hundreds of hours of compensatory time on the books. He stated the members and staff of the legislature and the Legislative Council Bureau had all helped keep the bureau afloat.

Chairwoman Chowning noted there appeared to be an increased amount of overtime and asked how it was being addressed. Mr. Iverson replied overtime was a problem. At issue were three full time brand inspectors performing a lot more work. When the horse killings occurred in the Virginia Range the agency had to do what it had to do. If a truck was tipped over on the highway there was no one else to call but the brand inspectors. The inspectors had more overtime than the law provided currently. A letter had been written to each inspector asking them to draft a plan to drop the overtime to a maximum of 240 hours by June 30, 1999. The same letter had been written the year before and the agency encouraged the inspectors to keep their overtime down. Mr. Iverson stated as an administrator, he hated to reprimand his employees because they were working hard to make the program work. He added if all three brand inspectors quit, the program would be finished.

Chairwoman Chowning closed the hearing on Budget Account 4546 and opened the hearing on Budget Account 4550.

Mr. Iverson noted Budget Account 4550 had also been through quite a transition over the past 2 years. Historically veterinary medical services had always been something that served the livestock industry. Over the past 4 years the bureau had really reached out and worked much more in the urban areas.

One veterinarian went to Las Vegas once a month and the bureau also worked with animal control agents in Las Vegas. Veterinarians worked in the dog bite program and the bureau had hosted a major veterinarian seminar. Recently the bureau had become involved in the bio-terrorism issue. When the anthrax scared happened in Las Vegas the bureau was in constant contact with those working the scare. The bureau was also doing a lot more work on food safety issues. The bureau was doing all the slaughterhouse ecoli testing throughout the state. The bureau was working with the food industry to develop a program that went from the farm to the table. The agency was involved in national policy in food safety and trade agreements that affected animals coming into the country. The bureau ensured animals coming into the country were properly vaccinated. The agency spent considerable time working zonation of diseases transmitted from animals to humans.

The veterinary lab was recognized as the laboratory for the state. The bureau did many hundred of rabies samples on bats and in 1998 six bats that tested positive for rabies were found. One individual in Ely would have been in serious trouble if the bat could not have been transported to the veterinary lab and tested. Bat bites and bat contacts were extremely important. Six children in Reno had been playing with a bat that ultimately tested positive and one of the children had to be tracked down in California. His parents had begun traveling to California within just hours of the contact with the child in the back seat.

Mr. Iverson stressed foxes were also a concern. The facility was very important to the state. It conducted tests on animals that died for an unknown reason and performed autopsies and diagnostics on anything from snakes to birds.

The budget was requesting no new staff. It did request a new refrigerator. There were currently worn out refrigerators with thousands of blood samples that were kept in case a problem occurred.

Another request was for a hot plate stirrer and a new modern dishwasher. Many hundreds of biologic samples were collected and no one wanted to take the samples because no one else was equipped to do the testing.

The bureau had its own incinerator and they burned their own dogs, cats and snakes because no one else wanted infected animals.

Chairwoman Chowning asked how equipment was currently being washed if the bureau did not have a dishwasher. Mr. Iverson replied they had an antiquated stainless steel dishwasher. He explained the dishwashers under discussion were scientific stainless dishwashers that eliminated possible bacteria growth on the inside. He recognized the previous legislature had allowed the bureau to purchase a new autoclave for instrument sterilization.

Mr. Iverson stated one major accomplishment of the bureau had been their deer program. The bureau sent out 500 blood pouches to deer and elk hunters asking them to submit blood and fecal samples. They had gotten a tremendous response. He explained it helped the bureau study some of the wild animal herds and to test for some diseases of concern.

Senator O’Donnell stated he had a question about fire ants and asked if surveys for those were done through Budget Account 4550. Mr. Iverson replied it was in another budget but he would cover it now at the pleasure of the subcommittee. Senator O’Donnell asked if a random check for fire ants was currently being done. Mr. Iverson replied the agency had never had fire ants as close to the borders as they currently were.

Fire ants had been found right outside the Nevada border in Riverside, California and the State of California had quarantined an 80-square mile area. Because Nevada had no border control stations, the agency was very concerned over what might already be in the Las Vegas area or what might be coming to Las Vegas.
Mr. Iverson explained it was believed that the infestation had been present for over 5 years and a large amount of the nursery stock coming to Las Vegas came from the Riverside area. Infestation was also possible from the backs of trucks and trailers as well as nurseries. Large nursery operators were very cautious and tried to bring in only good plants and soil that had been treated.

In 1998 two "finds" were located in Nevada. Two individuals had been stung at one nursery. The agency was trying to protect the citizens of Clark County and planned to increase the survey 100-fold to reach every one of the nurseries. That included all the stores like Albertson’s and Home Depot, and also golf courses, landscapers, and developers who had bought materials perhaps from California. The highways would have to be closed for inspections of incoming nursery products for certification. The agency had a major job ahead to ensure those pests were not colonizing in the community. As the fire ants colonized they could be attacked and the expense would not be that great, but if nothing was done and the fire ants got out of hand there would be no way to stop them. Other states had tried to stop them and it had been almost impossible.

The agency planned approximately 200 new surveys of a quarter-mile radius. The Division of Agriculture would put up posters asking neighborhoods to collect ants and place them on special post cards to return to the agency. It any of the ants were suspect the agency would go to the site.

Senator O’Donnell asked if the agency was receiving any federal funds for the project. Mr. Iverson replied the Division of Agriculture had no state or federal funds for the project. He emphasized before the legislative session ended some dollars would have to be found to avert a $5 million problem starting in 2 years.

Senator O’Donnell asked for verification that there was a border inspection station out near Prim and asked what it would take activate the station. Mr. Iverson responded he had talked to the Highway Patrol and was told the station was opened on a random basis and Mr. Iverson had asked if the Highway Patrol could activate it more. Agency staff would be out at Prim more often inspecting loads and if a load was found that did not have a certificate it would be turned around and taken to a spot where the load could be inspected. The agency was also going to put brand inspectors at the station on days it was closed to let people know they would not just be allowed to come into the state. Lake Blight would not have been stopped as quickly as it had been if a quarantine had not been erected. Lake Blight was coming from California and that state had not even known they had a problem until the Nevada Division of Agriculture had found it in one of the
Wal-Mart stores.

Senator O’Donnell asked what fire ants looked like. Mr. Iverson described fire ants as being about one-quarter inch long and looking like a regular ant which was a very dark red in color, almost black. They were extremely aggressive not unlike the africanized bees that would also have to be dealt with in the Las Vegas area because they had now wintered there.

Fire ants bit very hard, the bite was extremely painful and they had a pheromone effect that caused them to all seem to bite at the same time. Mr. Iverson explained most everyone was familiar with the typical red ant that when its nest was kicked, several hundred ants would pour out. If a red fire ant nest was disturbed thousands or tens of thousands of ants would be seen instantly. That was the danger with livestock and small children. The ants liked air conditioning units and liked to eat the wiring off of the units. The ants were known to eat stoplights and expansion joints in highways.

Senator O’Donnell asked if fire ants would eat killer bees. Mr. Iverson replied they actually would. One of the issues with killer bees was that they had a tendency to nest low to the ground and fire ants did sometimes attack the bees. He expressed an opinion that in Las Vegas the bees would be in water boxes and swimming pool maintenance shops. Eight to ten calls a day were being received about swarms of bees in Las Vegas. He explained that should not be happening. Mr. Iverson concluded by stating he did not believe there was a major infestation of fire ants in Nevada and if a small infestation was found it would be fixed before it grew through the help of the legislature.

Senator O’Donnell asked if the Division of Agriculture was prepared with sufficient staff to handle the number of phone calls regarding killer bees. If the agency was not, Senator O’Donnell stated emphatically he wanted to know now. Mr. Iverson replied the agency had one individual at present and the agency would be coming back to the Interim Finance Committee (IFC) and asking permission to hire that person permanently. Some additional help was needed and something would need to be done.

Mr. Iverson stated the agency knew the killer bees had wintered and there would be a problem in the Las Vegas area. The agency was going to continue their survey and meetings with the fire departments and police agencies. The answer to the question was, "They may" (need help). The agency was doing alright at present with the africanized bees, with the help of the county, but in the long run they could not keep up. Meanwhile they were doing what they could.

Senator O’Donnell stated the legislature might want to set aside another staff person in the budget to be requested in IFC if necessary. Chairwoman Chowning stated her agreement and told the agency that was one area where the subcommittee appreciated conservation but at the same time they did not want to be so conservative a huge problem was created that cost money and injuries. She encouraged the agency to be proactive.

The Chair requested the agency to provide a recommendation during the session so that the issue could be considered in budget closings. She asked if the two requested agricultural inspectors would be used to perform some of the tasks concerning fire ants and killer bees. She asked Mr. Iverson to address a plan for assessing fees as well.

Assemblyman Beers stated the issue was probably a joint Clark County/State problem and asked the agency to describe any cooperative efforts with Clark County. Mr. Iverson said the Division of Agriculture was working with Vector Control in the county. He added, unfortunately with vector control, they could only deal with public entities. Vector Control could not work with the general public although they had done a little by jointly publishing a brochure and they were working together in the school districts.

Mr. Iverson stated Senator Porter had requested a bill that would require the convention authority and school districts to get involved and established some funding to help people who could not afford to pay for pest control company assistance. At present there were approximately 30 companies that would handle africanized bees. Not all companies were equipped or had the knowledge to handle such a situation. He added nearly every swarm of bees currently being reported was africanized. By the end of the year it was likely that every swarm in Las Vegas except those in privately owned beehives would be africanized. In the summer of 1999 there would be five or ten times more swarms than in 1998.

Mr. Iverson referred back to Assemblyman Beer’s question of whether the county was involved and stated Senator Porter was trying to get the Convention Authority to assist with some public relations efforts. Nothing had been done yet in public relations except what had been done through the newscasters and he thanked the news crews for their support. Public service announcements (PSAs) were needed on what people should do and who should be contacted. A lot more citizen involvement was needed. Fire departments would go out if there was an emergency sting and 911 would handle emergency calls.

One problem was empty lots. If an empty lot had a swarm on it, no one wanted to take care of the problem and yet kids could be standing there at a bus stop. The agency planned to work with the county to establish an abatement program where the county or state could eradicate the swarm and costs would be passed on to the private land owner.

Surveys had to continue because it had to be determined where swarms would establish and what happened with weather changes. It was not known how far the bees would travel. At one time it was thought they would get no further than Amargosa Valley but the bees might in fact move further because they were becoming hybrid where they picked up some of the characteristics of European bees and at the same time maintained their aggressiveness.

A swarm was found in a water main near the airport that contained about
40 pounds of hive inside a box underground. There was at least 12 or 13 pounds of honey in the bottom of the water box. Historically africanized bees did not collect a lot of honey but for some reason more was being collected. There was no reason the bees could not move further north if they had the ability to collect honey and keep themselves fed through the winter.

Chairwoman Chowning asked if the agency had any funding budgeted for public service announcements and education. If not, why not. The Consumer Affairs and other divisions had done a wonderful job with PSAs and the broadcasting services. She stated her understanding it was a county problem but the Division of Agriculture needed some funding for PSAs as well. Mr. Iverson responded the division had no such funding and in fact when the budget was prepared no provision was made for a public relations staff person. The agency was going before IFC asking for a position to be established immediately and would modify the budget to continue beyond June 1999. Chairwoman Chowning commented it seemed it would do no good to provide funding for PSAs because there was no staff position to prepare them. Mr. Iverson replied the agency had absolute confidence the legislature would allow them to keep the person on staff and modify the budget. The agency had first wanted to find out if the bees were going to winter in Nevada and now that they had the whole plan had to change.

Chairwoman Chowning asked if the subcommittee could expect a budget modification in the next two weeks from the agency and Mr. Iverson replied they could.

Chairwoman Chowning closed the hearing on Budget Account 4550 and opened the hearing on Budget Account 4552.

Senator Jacobsen noted the issue of noxious weeds was coming to the forefront more every day. He referred to "white top" and others that were easily identifiable. He was surprised the university system extension program and the inmate camps were not involved in digging out the troublesome weeds. He realized some areas were too large to clean but he had noticed an area by Cradlebaugh Bridge about half the size of the committee room infested with "white top." Some kind of control was needed. Perhaps something could be started through 4-H and Future Farmers of America in the younger set.

Mr. Iverson testified there was no funding in the budget for noxious weeds. Noxious weeds were handled like so many other things through individuals who knew about a problem and would work on it. There was a weed action committee and while there was tremendous support from the counties, the agency was trying to get the counties, the Bureau of Land Management (BLM), and the Forest Service more involved. He added Senator Jacobsen made a very good point in that the agency needed to get people on the ground. Somewhere, someplace, someone needed to put together a proposal to actually get people on the ground with shovels and sprays to kill weeds. Areas could be planted to death, but the weeds continued to grow at about a 14 percent rate.

Senator O’Donnell asked why services such as use of prison inmates and others were not being used and asked if the agency was communicating with other agencies such as the prison or whether the problem was a lack of funds to pay prisoners to do the eradication. Mr. Iverson replied the budget had zero dollars for the program and Senator O’Donnell asked how much the agency needed.
Mr. Iverson replied if some funding was provided a portion would be dedicated to noxious weed control and getting some people out on the ground. He added Senator Rhoads was sponsor of a bill to provide a staff person to do research and coordination. There was no statewide weed coordination. A significant amount of funding would be needed to get a program going but if some funding could be provided in the first year to get some people on the ground that would be a prime point. Crews were already out picking up garbage and there was no reason in the world they couldn’t pull weeds as well.

Senator Jacobsen stated a beginning point should be through the extension service at the university system. Let each county extension agent identify how many acres there were of any particular noxious weed. Inmate crews were available at no cost on projects like weed control.

Mr. Iverson said the agency was already working closely with the extension service and BLM. The agency was trying to get an inventory and was in the process of putting together a plan to utilize inmate labor. There had to be a cost somewhere, whether it was in the Agriculture or Prison budget.

Assemblywoman de Braga stated there was a request in the extension budget for funds to deal with noxious weed abatement. Her concern was that programs should not take off in 60 different directions. A coordinated effort was needed especially with the counties and there was also some soil conservation funds that could be used. In addition, there was a "tall white top" task force that had been functioning for a long time but she did not know what progress they had made.

Assemblywoman de Braga said there was a large problem area in the canyon going from Fallon to Reno and stated the river posed a problem there because certain types of pesticides could not be used. She stressed coordination was vital to whatever else was done.

Mr. Iverson testified the Noxious Weed Program was like two hands. All those different things were going on with a large variety of agencies but the things lacking were a coordinated plan and people on the ground digging weeds. If one acre of weeds was dug, more was accomplished than a lot of people planning it to death. He introduced Don Henderson, Deputy Administrator, Division of Agriculture who had noxious weeds as one of his many functions and was available to answer specific questions.

Mr. Henderson responded to some of the subcommittee’s questions. He stated the division had taken a lead role in establishment of the Nevada Weed Action Committee. The committee was a federal and state interagency function to establish a statewide plan or strategy on noxious weeds. The committee was focusing on the local level to get the work done. A gap analysis was also being developed to see what the state or the group might be able to do to fill the gaps. He indicated the process would take a couple of years to work out the strategy and then the subcommittee needed to talk about funding.

Mr. Henderson told Senator Jacobsen that Douglas County did have a weed district and the invasion of "tall white top" he had seen should be discussed with the weed district.

Chairwoman Chowning asked if Mr. Henderson would be working with the extension service and considering prison assistance as well. Mr. Henderson answered affirmatively.

Mike Nolan, Budget Division, reminded subcommittee members that forestry crews were under a letter of intent to provide services free of charge to the Veteran’s Cemetery and to state parks, and had done a yeoman’s job in increasing their revenue. The forestry revenue for the upcoming biennium was raised to
$1.2 million per year. Mr. Nolan stated if increasing services were provided free of charge it would begin to have an adverse affect on revenues. Of course the legislature set policy but if all the free services were being provided, they would have to be backed up with funding. Chairwoman Chowning agreed.

Mr. Joe Johnson, Toiyabe Chapter of the Sierra Club commented historically the Sierra Club had been concerned about herbicides and had monitored the programs already in place. Other bills were being proposed that would affect the extension service. The Sierra Club wished to go on the record with a request for the subcommittee to support those bills through use of General Funds. The club saw those bills as absolutely essential to control noxious weeds.

Chairwoman Chowning thanked Mr. Johnson for his continued work and closed the hearing on Budget Account 4552. She opened the hearing on Budget Account 4600.

Chairwoman Chowning commented there were a number of modules in Budget Account 4600 and unless the subcommittee members had specific questions they would like the agency to work with staff on the budget. She stated one area of concern was enhancement modules E-375 and E-900.

Robert Beach, State Director, Nevada Animal Damage Control Program, supplied subcommittee members with a packet of information (Exhibit F). Under the Animal Damage Control Program (ADC) was the Predatory Animal and Rodent Control (PARC) and the Woolgrower’s Predatory Animal Committee budgets. He introduced Mr. Pete Paris, Jr., PARC and the Sheep Commission.

Mr. Beach referred to the map included in Exhibit F and explained it delineated the three districts in the program across the state. Also included in the exhibit was an organizational chart. Mr. Beach had highlighted state positions in the organization and explained other positions were federally funded positions.

The ADC Program represented federal and state organizations working together. Red arrows on the organizational chart included in Exhibit F indicated where the Clark County position reflected in budget enhancement module E-375 was placed. The chart also indicated how Budget Accounts 4604 and 4600 would be merged. Currently a .5 Full Time Equivalent (FTE) position worked in each budget.

Also included in Exhibit F were:

• Minutes from a meeting on the Clark County Desert Conservation Plan that explained PARC had approved funding for .5 FTE in the next biennium only if matching funds were provided;
• A letter and a resolution from the cattlemen and sheep growers supporting the program; and
• A letter of support from the Clark County animal control group.

Exhibit G is an additional support letter from the Division of Wildlife supporting the PARC presence in the Las Vegas Valley and surrounding communities.

Mr. Beach reported Exhibit F included several articles from the Las Vegas Review-Journal, Reader’s Digest, and Outdoor Life discussing urban problems with coyotes causing loss of pets and endangerment to small children. He noted in the recent past a child had been attacked at South Lake Tahoe.

In the previous biennium when Mr. Beach spoke before the legislature one issue raised had been what type of complaints were received that prompted the need for a Field Assistant position in the Las Vegas area. Exhibit F contained a monthly itinerary for the 50/50 funded person working out of the Reno office. It showed the different animals and locations the staff person had worked. Toward the back of the itinerary it indicated the human health and safety (disease and parasite) work. That work included taking blood samples on all coyotes captured around urban or suburban environments. The samples were tested for plague titer. Another insert in the exhibit gave examples of the titers that had been found. One had a
1/1024 titer and the PARC was advised to notify hospitals and doctors that an active plague occurrence was happening. That was referred to as a "hot" titer. Over 50 percent of coyotes tested had some degree of plague titer present. They had taken some coyotes off the Reno airport runway and two had tested positive for plague titer. The ratio on those was 1/624, which was still a "hot" titer but did not constitute an emergency situation.

Assemblywoman Giunchigliani asked if Bubonic Plague was still a problem in the state. Mr. Beach replied when he referred to "plague" he was talking about Bubonic Plague. Bubonic Plague was an interesting disease. While it was in constant supply as Sylvatic Plague in ground squirrels, as soon as it jumped from ground squirrels to humans it became bubonic. If it was passed on by a flea it got into lymph systems. If someone was skinning an animal or attending to a sick animal and got the organism through a cut it became systemic plague. Systemic plague could kill within 24 hours.

Assemblywoman Giunchigliani asked if warnings were still posted in the
Mt. Charleston area and noted she had not seen ground squirrels at the 5,000 to 8,000 foot levels. Mr. Beach replied the PARC did monitor the organisms through blood samples and put out warnings as necessary.

Assemblywoman Giunchigliani asked what was being done about mountain lions. Mr. Beach replied PARC was on constant call for mountain lions and one budget request was cellular telephones for each of the mountain lion staff. He explained when staff was out on a call involving livestock and another call came in that a mountain lion was in a back yard endangering people, the ADC wanted to be able to divert the staff to the more threatening situation. Only two staff members were qualified as lion hunters. Assemblywoman Giunchigliani asked how many calls had been received statewide. Mr. Beach replied he did not have an actual count on the number of calls. He would provide that information. An agreement was in place with the Division of Wildlife (NDOW) which was why NDOW had agreed to increase the amount of revenue to PARC by $20,000.

Assemblywoman Giunchigliani asked if the public was aware of whom to contact when a sighting occurred. Mr. Beach stated the PARC was working on that and had recently met with the sheriff departments and animal control units so that dispatchers knew how to reach assistance.

Chairwoman Chowning noted in the itinerary included in Exhibit F a fair amount of activity had occurred on Saturdays and Sundays and asked if that was because the person was responding to calls. Mr. Beach replied the PARC had a lot of the same calls
Mr. Iverson had talked about. When someone called in and said something had just killed a sheep or their dog had just disappeared immediate response was needed. The person represented in the itinerary covered a territory from Gardnerville to Gerlach. Because of the nature of the work, if equipment was set out, employees were obligated to return for humaneness to the animal. Also, the insistence of the

public when incidents occurred created "must respond" situations.

Mr. Beach stated one reason the ADC felt the request was an appropriate General Fund request was because the animals were so far ranging. Many times PARC got a call and by the time the agent responded the animal was visiting everyone’s yards in the neighborhood. Some were aware of the predator and others were not.

Mr. Beach stated a document listing performance indicators and an explanation of why outcomes had not met projections on each was included in Exhibit F. Also included was a profile of the federal side of the program because the state and federal worked so closely together.

Mr. Beach acknowledged the concern over decision unit E-375 was that it was a stretch to conduct some of the goose and duck work done in Clark County. He explained there was an agreement between PARC and Wildlife Services and the agency got 60 percent federal/40 percent state funding, part of which came from grazing fees. The agency had three airplanes and could fly in and take care of a situation much quicker than the federal staff could respond. As a trade-off the federal staff backed up the PARC on some of the goose and duck complaints that were mandated under federal migratory bird regulations to address.

Chairwoman Chowning asked for assurance that Clark County would fund the second half of the requested position. Mr. Beach replied affirmatively.

The Chair asked where the position would be located. Mr. Beach replied
Mr. Iverson had provided an office in the Agriculture Division building. They had been maintaining an office with a phone for the past year but had provided staff by pulling a person from the Ely office. Chairwoman Chowning asked if there was a rent cost. Mr. Beach replied the Division of Agriculture had an extra office they allowed PARC to open and use and there had been no talk of rent. A cost was associated with the phone system but PARC had been able to use some federal funding to cover that. The Chair stated the subcommittee just wanted assurance the Division of Agriculture would incur no cost and if they did, those charges needed to be passed on to PARC. Mr. Beach explained when they first got the office it was not even been being used for storage. He added PARC worked very closely with the Agriculture Division. The Chair directed staff to review the cost issues.

Chairwoman Chowning asked how the subcommittee could be assured Clark County would pay .5 FTE of the position. Mr. Beach reiterated the letter from Clark County discussed earlier included a budget accounting of their costs for the biennium and in the footnote it stated, "subject to state matching, a reporting system verifying at least 50 percent of the expenditures or on the species of concern and U.S. Fish and Wildlife approval." The approval from U.S. Fish and Wildlife was obtained and the itinerary had been approved. The only piece remaining was receipt of the state matching funds. Chairwoman Chowning requested a letter from Clark County and Mr. Beach replied he would obtain one.

Chairwoman Chowning asked Mr. Beach to discuss decision unit E-900. Mr. Beach explained Assembly Bill (A.B.) 500 of the Sixty-ninth Legislative Session took the Sheep Commission from under the state and transferred the Sheep Tax revenue to Elko County. When that happened, the Woolgrowers Predatory Animal Control Fund was left stranded. Budget Account 4604 was moved over to PARC and that budget had only a .5 FTE position.

Mr. Beach stated the current budget request was to eliminate Budget Account 4604 and to transfer its revenue and expenditures to Budget Account 4600. Currently the 20 cents per head sheep tax that was due PARC was collected and deposited to Elko County then moved to state Budget Account 4604. The PARC wanted a paperwork reduction whereby the budget account would be reduced to a revenue item that would be submitted to the PARC as income, and have the .5 FTE transferred from Budget Account 4604 to Budget Account 4600 (PARC). It was a no net change transfer. Chairwoman Chowning asked how the subcommittee would know the fees would be forthcoming. If there was no assurance, the position should not be transferred. Mr. Beach replied two things would happen. The PARC had a reserve that went over to Elko County and that reserve of approximately $40,000 was a known factor. The tax was a state law and
20 cents per head sheep tax would be collected and would be a known income. PARC did a projection looking at the amount of revenue from sheep tax currently plus the amount in the reserve and felt there would be sufficient for at least
6 years. After that point the funding would be solely from the sheep head tax revenue.

Chairwoman Chowning stated only $11,000 was shown in revenue in The Executive Budget. Mr. Beach replied that was the annual amount received in 1998 and did not include the reserve revenues. The Chair stated if the cost of the position was $18,000 and the reserve was $40,000 the funding did not match up. Mr. Beach replied the sheep tax typically experienced a delay because people paid the tax at the last minute, thus $11,000 in revenue had been received but PARC anticipated a larger amount for the annual total. Chairwoman Chowning stated if a larger projection was anticipated it must be presented in the budget and asked
Mr. Beach to work with staff.

Stephanie Licht, Acting Secretary, Board of Sheep Commissioners, was introduced. Chairwoman Chowning stated the subcommittee members wanted to know for sure that the position was absolutely going to continue to be fee-funded and if
Ms. Licht felt there would be enough fee revenue to sustain the position. Ms. Licht stated the basis of the problem in misunderstanding began in 1993 when the sheep commissioners came before the legislature as the Sheep Commission was going to be surveyed and taken out of the state system. They had managed to stay alive and retain the Sheep Commission which was funded by the sheep inspection fund and the Woolgrowers Predatory Animal Control Committee.

What happened during the 1997 Legislative Session was that the Sheep Commission had the opportunity to enter into a cooperative agreement with Elko County, since their funds were fairly small. The Sheep Commission was still a state agency but the budgets would not appear before the legislature, hopefully, after the current session. The intent was to help the legislature by not causing them to review a budget with so little revenue. The commission was not able to pay the state cost allocation.

Ms. Licht explained the Woolgrowers Predatory Animal Control funds were still in the state account because there were still several county assessors that had not discovered the change of responsibility to Elko County. The assessors were supposed to send the 10-cent tax and the 20-cent Predatory Animal Tax to Elko County. Elko County held the funds in trust and when Mr. Beach submitted a request for funds to Ms. Licht, she signed the request and forwarded it to the state treasurer’s office which issued a check to the state account for PARC for deposit in that account. By statute all of the funds must go to Mr. Beach’s office to conduct wildlife service-type activities. It could not be used for any other purpose. That procedure would continue while the money lasted. Chairwoman Chowning stated, that was the problem, "as long as the money lasted."

Ms. Licht stated from when she first started with the Sheep Commission in 1989 they grew until they reached a high of 110,000 sheep in the state in 1991. Currently there was only record of approximately 55,000 sheep in Nevada. That translated to revenue in 1998 of $5,500, which meant $11,000 for PARC.
Ms. Licht stated the sheep commission hoped with some of the policy being set the downward trend in sheep population would reverse. Many things were happening to cause hope and they would give all the money available.

Chairwoman Chowning stated everyone must be aware that if the funding zeroed out, the position would have to be eliminated.

Mr. Beach pointed out the position already existed in Budget Account 4604 and the agency was not requesting an additional position. The only request was that rather than give funding of the position budget status, it be reverted to a line item in revenue. In doing so, paperwork was reduced, two budgets were condensed into one and no other affects resulted. The agency was just requesting a "cleanup" action. The Chair stated they would proceed as long as Mr. Beach understood the potential for losing the position.

Chairwoman Chowning stated the subcommittee had covered the primary questions in Budget Account 4600. Mr. Beach noted many functions in PARC were funded through NDOW because the agency had asked for increased funds for lion hunter staff based on the increased number of calls. That money was being used to increase the ability to have the mountain lion staff mobile. He added
Mr. Paris had come in from Elko if the subcommittee wished to have his testimony.

Chairwoman Chowning asked the Budget Division to assure the subcommittee that the funds from NDOW would continue.

Assemblywoman de Braga asked if there was still a government trapper position or was it a federally funded position. Mr. Beach replied they weren’t called government trappers any longer. They were called wildlife service specialists or animal damage control professionals. In Nevada, half of the force was federal and half was state. Both performed the same functions. Many more tools than traps were used at present including airplanes.

Senator Jacobsen stated it appeared to him something was lacking at the hearing. He saw no one present from the Cattleman’s Association, Bob Hadfield representing the Nevada Association of Counties and others were also absent. He stated issues were not being addressed. At some time, all the entities needed to be brought together to adequately resolve some of the issues.

Senator Jacobsen stated the legislature sent a number of resolutions to Congress and perhaps staff needed to draft letters to various agencies telling them the intent. It was always hoped intent was present in the final budget but once legislators went home agencies dealt with the daily issues. Not enough was being done. He told the story of a rancher in Dayton who lost 50 lambs overnight and had killed the mountain lion himself. As a result the environmentalists sued him. NDOW had a difficult time deciding whether they had any authority in the situation. Many people’s livelihoods were at stake.

Senator Jacobsen related the story he had taken a trip the previous year into California and stated cattle ranchers there were restricted to running their cattle every third year. He asked what the ranchers were to do with the intervening years.

Mr. Beach pointed out the Cattlemen’s Association and the Sheep Growers had provided him with resolutions which were included in Exhibit F and NDOW had provided a letter (Exhibit G). The agency worked closely with the Division of Wildlife and had been requested to do some raven control to protect some of the upland game birds. Nevada was faced with the possibility of the federal government making sage grouse an endangered species and that would cause a lot of trouble for the state. He expressed his opinion that the provision of resolutions and letters of support were felt to be equal to being present.

Chairwoman Chowning asked if that approach was acceptable to Senator Jacobsen and he replied, " It was like swatting flies, you can’t get to them all at one time." Senator Jacobsen stated he was not trying to condemn the agency efforts but he simply felt not enough was being done. Each of the budgets discussed at the hearing had serious issues. Mr. Beach stated Mr. Paris could provide expert testimony because he had experienced serious trouble with predators. He could attest that working predator control across public lands was not an easy task.

Chairwoman Chowning asked subcommittee members to review module E-250. Extra funds were requested because of the danger of animal eradication from airplanes.

Pete Paris, PARC, stated he did not know where to begin. He agreed with Senator Jacobsen that something needed to be done. It was almost similar to the killer bee and fire ant testimony heard earlier.

His family’s sheep ranch was the last sheep herd in the Ruby Mountains in Elko County, which at one time had hundreds of thousand of sheep. Now only
5,000 sheep were being run. He said maybe the only reason the 5,000 sheep were still there was because they were not paid for and he did not know how to convince someone to take them off his hands. Thus the family had to keep plugging away at raising the sheep so they didn’t dump 20 years of their lives down the drain.

ADC had one staff person in the Elko area and the Forest Service had given him
43 miles of forest to run the sheep on but that also gave them 43 miles of access for every coyote in the valley.

Mr. Paris stated emphatically without the aerial hunting program there would be no dogs, no cattle and pretty quick no children in the valley. He noted 20 years ago when a town hall meeting was held all the livestock owners would be there worried about their livestock, but in 1998 NDOW held a town hall meeting in Elko and the people in attendance represented about half of the Spring Creek community worried about their dogs and cats. He felt the next meeting would be parents worried about their little children. A balance had to be achieved. He concluded it was a very important and serious issue. He exclaimed the ADC needed about
10 positions instead of half-time and sole positions. He added his understanding there was simply not enough money for that but stated funding a single position was like placing very small band-aids on very large wounds.

Chairwoman Chowning suggested a hearing could be scheduled to bring in all the various entities affected by the predators and Senator Jacobsen agreed.

Assemblywoman de Braga asked Mr. Paris if he had any statistics on the increase in the predator populations. Mr. Paris replied he had no specific statistics but the biggest one he knew of was the reason there was only one sheep operation left in the Ruby Mountains. Raising sheep was no longer feasible in that area of the state.

Assemblywoman de Braga asked if the issue was that the predator populations were increasing or had the efforts to eradicate them decreased. Mr. Paris replied the number of predators was increasing. In his personal experience the percentage had gone from somewhere around 10 percent to nearly 20 percent.

Mr. Beach stated there was some information available. Predators were notoriously hard to count because of their secretive nature and their wide range. NDOW had released information on the raven population. It was increasing by about 5 percent per year. The blame for the raven increase was currently being placed on the availability of food through road kills, landfill availability and that they had moved into cities and were feeding out of dumpsters.

The coyote populations were characterized as a healthy and growing population.

One reason for the problem was there used to be a lot of neighbors with sheep and if one person had a problem the protection extended to more than one ranch. Assemblywoman de Braga noted the state should be glad a proposal had not been requested to re-introduce wolves into that area of the state.

Chairwoman Chowning closed Budget Account 4600 and noted Budget Account 4604 had already been discussed and was proposed for transfer. She requested Mr. Beach to get the requested assurance of adequate funding to staff. The Chair opened the hearing on Budget Account 4470.

Stacy Jennings, Director, Dairy Commission stated she was only in her second week on the job. She introduced Bob Barengo, Chairman, Nevada State Dairy Commission, from the audience. She also introduced Dave Geordge, Management Analyst, who prepared the budget, and Mr. Bob King, Compliance and Audit Investigator.

Ms. Jennings stated the mission of the Dairy Commission was to ensure the people of the state of Nevada reaped the benefits of a viable dairy industry by ensuring there was an adequate and healthful supply of dairy products available to the consumer, the dairy products were reasonably priced, and that unfair trade practices that might threaten the existence of a strong domestic dairy industry were controlled or eliminated. The agency was established and governed under Nevada Revised Statutes (NRS) 584.

The commission itself consisted of three members appointed by the Governor; a public or certified public accountant, an agricultural economist, and a member experienced in banking and finance. The Governor designated one member as Chairperson and the commission met on a monthly basis alternating between the north and south.

Recently the applicable Nevada Administrative Code (NAC) regulations were completely revised allowing the Dairy Commission to update its audit and investigative procedures and to pursue right sizing of the agency staff. That had resulted in better utilization of staff, better communication with licensees, and a more even-handed application of the law. In turn that led to increased regulatory compliance and fewer prosecutable violations.

The Dairy Commission was a self-funded agency with revenues generated primarily from two sources; license fees and assessments on regulated dairy products.

The agency had 174 licensees of which two-thirds were located outside the state of Nevada. The commission currently levied assessments on the distribution of butter, ice cream, cottage cheese and yogurt.

Though the budget submission reflected an essentially flat budget request, two items were notable. The agency relinquished hiring authority for 3 of the agency’s 17 authorized positions as part of the ongoing efforts to right-size the agency. Secondly, the agency requested approximately $3,000 to fund the printing of public information brochures regarding the dairy industry. She offered to provide copies of the last brochure published if the subcommittee wished to see them.

The agency also wished to fund a third person to attend the annual International Association of Milk Control Agencies meeting.

Ms. Jennings alerted subcommittee members that the commission would be approaching IFC with a FY 1999 work program request. The request had been recently identified as a critical need as the agency was not in compliance with the Year 2000 computer problem. The Department of Information Technology (DoIT) had performed a recent assessment of needs and the funds requested from IFC would be based on the DoIT recommendation. The commission had sufficient funds in the current fiscal year to cover the requested amount from the agency reserve.

Assemblywoman Giunchigliani asked when DoIT had provided the commission with the Year 2000 report. Ms. Jennings replied DoIT had come to the agency on March 3, 1999, and provided the report on March 5, 1999. Assemblywoman Giunchigliani noted DoIT’s testimony 2 weeks prior was that they had fixed all the problems. Ms. Jennings replied a part of the problem might have been that the agency had been without an administrator and the commission had not filed a report. When she had assumed the position of administrator and saw the condition of the equipment she had immediately called DoIT for the survey. Assemblywoman Giunchigliani stated legislators would check further because other agencies might have fallen through the cracks as well.

Assemblywoman Giunchigliani stated although her mantra since 1991 had been to eliminate the Dairy Commission she would not suggest that in the current session because the commission had at least eliminated three positions.

Chairwoman Chowning asked why the commission was able to decrease staff. Ms. Jennings responded the agency had been looking at its role and reevaluating agency goals. They were trying to make better use of the staff they had. The Chair applauded the efforts and noted it made her wonder how long the positions had been duplicative. Ms. Jennings stated it was her understanding some of the positions had been leaving over the period of the last fiscal year and as the positions were vacated functions were reevaluated.

Chairwoman Chowning asked to whom brochures were being provided and were to be distributed. Ms. Jennings replied the brochures would be provided to the general public and the commission would work with some of the retailers to put up a kiosk in the milk section of the retail outlets for the public to access. In turn the Dairy Commission could be a resource to the general public.

Assemblyman Goldwater noted he constantly reviewed the commodity price index and had read the day before that there had been a drastic fall in the price of milk and other dairy commodities and asked if that would have any effect on the budget in the long-term. Ms. Jennings replied the commission did not currently levy an assessment on milk but it did have that authority through statute. The commission suspended the assessment on milk in October of 1994.

Chairwoman Chowning noted the commission assessed ice cream and asked if that would not result in an effect because ice cream was made from milk.
Ms. Jennings replied ice cream was milk based however, when stating the price of milk had dropped that referred to the price of "producer" milk and there were still a number of other costs inherent to making ice cream besides the milk. She added the price of milk was somewhat cyclical, getting somewhat cheaper in the summer months and then climbing in the fall and winter months. Assemblyman Goldwater noted the price was down 37 percent.

Senator Jacobsen asked if the subcommittee could be provided some figures showing how much milk was being imported from California and Utah and what was being produced in Nevada. He realized in his senatorial district there were originally 14 dairies and only 2 were left. He acknowledged Las Vegas had a federal marketing order and if the trend continued everyone would see exactly what milk would cost. He added he was sorry to see evidence of yet another agriculture industry falling apart. Ms. Jennings responded the agency collected that information and would provide it for the subcommittee members.

Chairwoman Chowning voiced her sadness as well that the dairies in Nevada were dwindling and complimented Mr. Don Hellwinkel for the educational work he had done in bringing animals to Southern Nevada where teachers and kindergarten and first grade classes saw the animals, some for the first time.

Assemblyman Beers noted the work program fines figure was greatly increased compared to the prior year and the forecast for future years. He added the recommended budget would increase the agency reserve by $100,000 during the biennium. Ms. Jennings replied it was not the policy of the Dairy Commission to be collecting assessments on products far in excess of what was needed to fund the agency. To that end, after the budget requests were submitted, the commission had lowered the assessment on ice cream products from 4 cents to
3 cents per gallon in October. The assessment was lowered again to 2 cents per gallon in January. The agency had submitted some revised revenue estimates to the Budget Division to reflect those changes. The end result was that the reserve would be at about $200,000 rather than the larger figure in the initial budget request.

Dave Geordge, Management Analyst addressed the issue of fines. He explained the authority for fines fell to the three-member commission. Those fines were based on what was deemed necessary to bring a licensee into compliance with either a previously registered audit finding or a continuing audit finding that had not been fixed. The lower rate of fine was directly related to the greater amount of compliance. As the audit and investigation programs had improved there had been greater compliance within the licensees and a lesser needs for fines.

Chairwoman Chowning closed the hearing on Budget Account 4470 and opened the hearing on Budget Account 4868.

DeeAnne Parsons, Administrator, State Energy Office, stated Budget Account 4868 was the operating budget, which received no General Fund monies and was funded through federal energy programs. She added NRS 523 pretty well explained what the agency functions were.

The primary tasks were to participate in federal energy programs, promote the efficient use of all forms of energy, and encourage the development of alternative sources of energy. They agency felt they had accomplished a great deal during the first year of the current biennium and were in line to achieve their goals and performance indicators for the entire biennium.

The agency had drawn over $1 million in federal funds to Nevada. Through a wide variety of partner agencies they had completed a number of energy projects amounting to over $1.7 million.

Ms. Parsons noted certain significant accomplishments.

1. In 1998 the home energy rating system and energy efficient mortgage programs began. Those programs would result in consumer savings. Now that those programs were running the agency was trying to integrate solar hot water heating, particularly in the Las Vegas area.

The performance indicators were based on the projected number of houses and projected savings. She noted the performance indicators were not accurate in one way, because the projected savings were for one year but the actual savings were ongoing. Projecting to the year 2001 consumers should save $2.5 million in energy costs.

As raters were trained and performed it would produce more economic activity.

2. Funding had just been received for a new energy efficient retrofit program

called "Rebuild America." The agency hoped to retrofit 8 million square feet

each year of commercial, multi-family, and government buildings.

Training programs would also be established for that program to train energy management people in the public buildings, and train people to conduct the energy audits. Career programs would also be set up through some of the community colleges.

3. Training programs were being set up regarding alternative fuels. They were

other cutting edge issues to encourage bringing in natural gas vehicles for air

quality.

The agency worked with manufacturers and in some cases they were able to pay incremental costs to change to alternative fuels.

4. With all the problems of forest health in the Tahoe Basin, the agency wanted

to take the forest residuals that needed to be cleaned out for fire reasons and

turn those into energy and sell it back as "green power." The agency had just

started the first phase in which 230 bone-dry tons would be removed and taken

to Loyalton, California where they would be used to generate electricity. Just

that small amount would furnish enough energy to provide 10 percent of the

annual energy needs of 300 homes. The cost to a homeowner to purchase the

"green power" would be $37 per year. Ms. Parsons stated that effort was just

the "tip of the iceberg" in the Tahoe Basin.

Many other efforts were being done. There were no major changes in the budgets.

Chairwoman Chowning stated a letter of intent was issued in the 1997 Legislative Session that asked the agency to minimize expenses and maximize funding opportunities and asked how and if that had been done. Ms. Parsons stated the agency worked very hard to obtain competitive grants to achieve their goals. During the 1997 Legislature the agency had asked for some General Fund money that they had not received. The agency was surviving without money from the General Fund and had no intention of asking for more. The agency had explored fee-based funding but had found no appetite for adding a few pennies to utility bills and of course electric restructuring had really confused that issue. The agency maximized every dollar it received to achieve the successes they had achieved.

Chairwoman Chowning closed the hearing on Budget Account 4868 and opened the hearing on Budget Account 4539.

Ms. Parsons testified Budget Account 4539 was funded through various federal court settlements with oil companies going back to when those companies made overcharges between 1973 and 1981. The funding was to be used primarily in the five energy programs that had been reduced to one or two through combinations.

It was anticipated the first year of the new biennium would be the final year that overcharge rebate payments would be made to Budget Account 4539. From that point the only funds in the account would be from the reserve and interest.

The funds were used as the required non-federal matching funds for federal grants. It was also the only funds available for the agency to provide as grants to jump-start other programs.

The agency was requesting $156,000 each year of the biennium for the match and for grant programs. The agency was also requesting $20,000 each year to support the Senior Transportation Program through the Division of Human Resources.

Chairwoman Chowning asked if the agency anticipated continually having to ask for more General Fund dollars because the settlement dollars would dry up.
Ms. Parsons replied the agency hoped settlement funds would last another 4 years. Every year it lasted gave the agency time to identify other sources and methods of funding. They hoped to come up with some fee-based program that made sense.

Chairwoman Chowning requested the agency to report to the legislature regarding the agency fee recommendations.

Chairwoman Chowning asked if anyone in the audience wished to speak on that or any other budget and seeing none, the meeting was adjourned at 11:50 a.m.

RESPECTFULLY SUBMITTED:

Cindy Clampitt,

Committee Secretary

APPROVED BY:

Assemblywoman Vonne Chowning, Chairwoman

DATE:

Senator William O’Donnell, Chairman

DATE:_______________________________