The Committee on Ways and Means was called to order at 8:08 a.m., on Monday, March 29, 1999. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Ms. Jan Evans, Vice Chair

Mr. Bob Beers

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph E. Dini, Jr.

Ms. Chris Giunchigliani

Mr. Lynn Hettrick

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

COMMITTEE MEMBERS ABSENT:

Mrs. Barbara Cegavske (Excused)

Mr. David Goldwater (Excused)

Mr. Bob Price (Excused)

STAFF MEMBERS PRESENT:

The Chair recognized Don Hataway, Deputy Budget Administrator, Budget Division, Department of Administration. Mr. Hataway explained S.B. 278 was the result of a shortfall in sales tax revenues from the amount estimated during the 1997 Legislative Session.

He reminded committee members they had heard a bill to provide a supplemental appropriation for the Distributive School Account (DSA) that was before the legislature because of the statutory provisions requiring the General Fund to act as the guarantor of funding. He pointed out there was no statutory authority on class size reduction to support the request for a supplemental appropriation. Committee members were told the school districts had contracted with teachers to perform services and the budget office had requested the supplemental appropriation to fulfill those contractual obligations.

Mr. Hataway emphasized the fact the budget office was aware it would have to again approach the legislature for a refinement of the bill prior to the end of the current legislative session. He explained the original supplemental appropriation was based upon obtaining the same amount of revenue as last year, but that estate tax revenues year-to-date continued to be depressed. The budget office felt there would be an additional $6 million requirement over the amount provided for in S.B. 278.

He explained the Department of Education had a quarterly payment due
April 1, 1999, and would be short approximately $12 million. The budget office was requesting S.B. 278 be passed in its present form, knowing an additional request would be necessary.

The Chair recognized Vice Chair Evans who asked when the dollar amount above and beyond the original supplemental appropriation would be confirmed.
Mr. Hataway explained the budget office would have that information available toward the latter part of April 1999. He anticipated that, as part of the authorization bill for class size reduction, there would be a section that would further amend the appropriation for the current biennium and provide for the balance of the shortfall. He explained the budget office was experiencing a very unusual year regarding tax collections and those collections may not even reach the level achieved in 1993.

Mr. Marvel commented that people were living longer. Mr. Hataway alluded to
Mr. Goldwater’s testimony wherein Nevada’s statutes possibly included verbiage that did not encourage people to domicile their estates in Nevada. Mr. Hataway said the budget office was following that issue closely.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on S.B. 278 closed.

The Chair recognized Kathy Von Tobel, Assemblywoman, District # 20.
Ms. Von Tobel explained A.B. 317 was a compilation of research she had done during the 1997 Legislative Session and would provide clean-up language to the original merit pay program.

She said A.B. 317, section 1, would allow the University System to continue to award merit pay to those positions of Dean and above, but not from state-funded budgets. The University System’s current practice of payment to those positions added to the position’s base salary and, ultimately, to the base budget. Ms. Von Tobel explained to committee members it had never been the intent of the legislature to fund merit pay for those positions. She provided the following verbatim testimony:

Ms. Von Tobel told committee members she had asked the fiscal office of the Legislative Counsel Bureau to perform a study of exactly how many ineligible positions had received merit pay. She referred committee members to Exhibit C, and said merit payments to ineligible employees totaled $440,113 in FY 1998-99. The clearest explanation she had been able to obtain from the University System regarding those ineligible payments was that vacancy savings had been used. She never received an accounting of whether the vacancy savings were generated by administrative or faculty positions. Ms. Von Tobel wondered how the University system had accumulated that much in vacancy savings in view of the astronomical enrollment numbers and a hiring freeze.

She was aware the Chancellor had reported the University System was never made aware it could not use salary savings to provide merit pay to Deans and above. Ms. Von Tobel was before committee members to try and fix something she felt needed fixing since 1987. She said the legislature’s intent never was to give merit increases to Deans and above. A.B. 317 identified those "non-merit" positions as follows: chancellor; vice-chancellor; legal counsel to the chancellor; president of a university, community college, or the Desert Research Institute; vice president of a university, community college, or the Desert Research Institute; director of the university press; director of the computing center; administrator at a community college if the position is equivalent to the position of dean; administrative head of a center within the Desert Research Institute, or director of an intercollegiate athletic program. Ms. Von Tobel explained those positions did not, and had never been intended to, participate in the merit pool. There was a cumulative affect due to the fact those positions also received cost-of-living increases.

She told committee members she had many discussions with faculty members that were demoralized by the fact that 80 percent of the administrators were receiving merit increases yet faculty members had to endure a very strenuous process to obtain the same benefit. Most colleges, she said, averaged between 40 percent and 45 percent of faculty receiving merit increases.

Ms. Von Tobel hoped committee members would agree the process should be fixed and pass A.B. 317.

The Chair recognized Mr. Marvel who asked if the research had shown the merit pay went into base salaries and Ms. Von Tobel replied in the affirmative. Mark Stevens, Assembly Fiscal Analyst, Legislative Counsel Bureau, confirmed University merit pay increased an individual’s base salary.

Mrs. de Braga asked for the total savings and Ms. Von Tobel said that would have been $440,113. She explained those monies would have remained in vacancy savings where they could have been used for their original intent – to hire faculty or administrators.

Mr. Stevens provided Exhibit D for the record which amended the total payment of merit increases during FY 1998-99 from $440,113 to $253,800.

The Chair recognized Thomas Anderes, Vice Chancellor, Finance and Administration, University and Community College System of Nevada. Mr. Anderes said he would be happy to provide additional information to committee members regarding how the salary savings had been derived. He said he would be very surprised if those savings came from faculty.

Mr. Anderes appeared before committee members in opposition to A.B. 317 and offered the following verbatim testimony:

Mr. Anderes broke from his verbatim testimony to explain the University’s concern regarding the development of a "reasonable plan," in view of the fact the University did, indeed, use vacancy savings. He said vacancy savings were used in a variety of areas in support of University programs and added the legislature had been made aware of those expenditures, whether they were for funding for additional library hours, or faculty support for additional students. He felt those features were important in identifying and retaining the most competent people. Mr. Anderes continued with his verbatim testimony:

The Chair recognized Ms. Giunchigliani who commented the legislature had wrestled with this issue for many years. She felt it was very clear in the budget closing she had negotiated in 1991 regarding the issue of merit that merit was not to be paid positions of Dean or above. Those positions were paid a different commensurate salary for the type of management and administerial jobs they possessed. She said merit was always intended to be for those who gave direct instruction. For the University to try to argue it needed that flexibility to recruit and maintain staff was not legitimate. Ms. Giunchigliani felt A.B. 317 was a good piece of legislation.

The Chair recognized Mr. Marvel who recalled an individual must meet three criteria in order to receive merit pay. Those criteria were classroom hours, public service, and research. Mr. Marvel asked if those guidelines were followed. Mr. Anderes said those guidelines were followed, but also commented the University System provided merit pay, for other reasons, to the administrative side of the house.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 317 closed.

The Chair recognized Mr. Dini who said he had introduced A.B. 359 on behalf of the Office of the State Fire Marshal. He explained A.B. 359 earmarked 1 percent of the taxes collected from writing casualty insurance to support the Office of the State Fire Marshal.

The Chair recognized Chief Marvin Carr, State Fire Marshal, who provided committee members with a packet of information in support of the legislation attached as Exhibit E. Chief Carr explained in October of 1980, SCR 23 was generated which required a statewide study of the training requirements and needs of fire services within Nevada. The study became the statewide master plan for fire protection. During the 1997 Legislative Session, the Fire Service Standards and Training Committee and the Fire Marshal’s Advisory Board were directed to re-study SCR 23. Chief Carr explained those committees met several times to discuss training issues and make further recommendations. Those meetings resulted in a response and recommendations document Chief Carr identified as beginning on page D-6 of Exhibit E.

Chief Carr explained pages D-1 through D-5 were letters from around the state expressing support of A.B. 359. The Office of the State Fire Marshal had conducted a fire insurance premium tax survey of 18 states throughout the nation. The results of that study began on page D-15 of Exhibit E. Of the 18 states surveyed, 14 used a portion of the fire insurance premium tax to fund the fire marshal’s office and/or provide for training on a nationwide basis. Page D-19 of Exhibit E were the recommendations of the Clark Commission, one of which suggested the Nevada Legislature should utilize a portion of the insurance premium tax on fire insurance as a stable funding source for the agency.

Pages D-21 through D-23 represented the Division of Insurance’s review of the proposed legislation and suggested approach to calculating the funding for
A.B. 359. Chief Carr explained page D-22 of Exhibit E outlined the proposed formula developed by the Division of Insurance which would allot $225,752 to the state fire marshal’s office. He reiterated the tax was not a new tax, rather, the agency was requesting 1 percent of taxes that were already collected. Comments provided by the Division of Insurance indicated they would not have much of a problem with the program, nor would it generate additional work on the part of insurers, the Division of Insurance, or Taxation to calculate.

Chief Carr pointed out the $225,752 would not fund the entire intent of the program as outlined on page D-24 of Exhibit E, but would be a 100 percent improvement over the current situation. Pages D-26 and D-27 of Exhibit E represented the travel costs to attend weekend training in Carson City from Panaca, Austin, Jackpot, and Yerington. As committee members could see, the cost to send six students from Panaca to Carson City for training would cost the local jurisdiction, or fire department, slightly in excess of $4,000. He explained the small, rural fire departments did not have the financial ability to send their employees and/or volunteers to Carson City for training. It was the fire marshal’s intent to send contract instructors into the rural areas and, by bringing the local departments together, increase the total number of hours taught far beyond the current level. Chief Carr expressed the great need to provide training in the rural fire departments in the State of Nevada.

Mr. Dini asked Chief Carr to explain the difficulty the Office of the State Fire Marshal had in maintaining people because of the uncertainty of funding. Chief Carr explained the funding of the agency’s training division depended solely upon the hazardous materials permitting process. He pointed out his agency had not done a good job permitting all locations that handled and/or stored hazardous material, but lacked the staff to do so.

Referring committee members to the last page of Exhibit E, Chief Carr explained the fire marshal had been very successful in providing training on hazardous materials and terrorism because the funds for that training came from either state emergency response grants or federal grants. He said 243 volunteer firefighters, 207 career firefighters, and 362 other first responders had received training. The area that lacked attention was the training of volunteer firefighters in the rural areas of Nevada.

Chief Carr explained there were approximately 2,000 volunteer firefighters in the State of Nevada. He reminded committee members the 1997 legislature had directed the fire marshal’s office to provide training for the volunteers. While a concerted effort had been made, the level of success was not as good as it could have been. Chief Carr told committee members there were more and more volunteers each year that dedicated their time and personal resources to provide fire protection to their respective communities. Training was vital for the safety of not only those firefighters, but the people they protected.

The Chair recognized Mr. Marvel who asked if there was any activity at Beatty. Chief Carr explained his agency had been unable to build Beatty into its budget as the result of a declining economy in the Beatty area. While the fire marshal could not plan a training program for Beatty based on money generated from revenue, a slot existed in the budget to accept that revenue should it become available.

Mr. Marvel asked if the Beatty facility generated low-level hazardous waste and Chief Carr replied it did. Mr. Marvel then asked how much revenue was currently generated from the Beatty plant and Chief Carr said that amount was approximately $160,000 per year. Those funds had been dedicated to fire service training.

The Chair asked why the request for training funds was not requested in the agency’s budget as opposed to asking for a percentage of the tax. Chief Carr said it had been determined the agency budget should be left status quo and legislation should be introduced to generate training funds and provide a future stable source of funding. He pointed out other positions had been requested in the agency’s original budget request, but had been cut due to the budgetary shortfall. The Chair explained it would have been helpful if the request had been made through the budget. Under this scenario, committee members would not know if the agency’s training request would have been deleted from its budget. Chief Carr told committee members the two hazardous materials inspectors that had been cut from the agency’s original budget would have actually generated funds for the agency, a portion of which would have been used for training.

The Chair recognized Ms. Giunchigliani who commented it had been quite a few years since the Office of the State Fire Marshal had increased the fees for inspection of systems, fire extinguishers, etc. She reminded Chief Carr the legislature had recommended the agency increase those fees to generate revenue and asked if that avenue had been pursued. Chief Carr said the agency had figured approximately $65,000 in revenue could be projected through a 10 percent increase in fees. Ms. Giunchigliani said she was under the impression equipment was separate from the permit. Chief Carr clarified the placement of fire extinguishers, sprinkler heads, etc., was a part of the permit process and involved Budget Account 3816, not Budget Account 3834. He said the training budget, Budget Account 3834, would generate a minimal amount of revenue. The agency was afraid of the adverse publicity it would receive by trying to raise taxes and/or fees. While that option was a possibility, it would a require a change to the Nevada Administrative Code (NAC). Ms. Giunchigliani was aware a change would be required and that the legislature had determined that option would be a proper source to look at for additional revenue. Ms. Giunchigliani asked the cost of a permit and Chief Carr responded $120. A 10 percent increase would represent $12 per permit. Ms. Giunchigliani asked why a 10 percent increase had been chosen and Chief Carr said the decision was arbitrary. Chief Carr pointed out his office already had problems collecting the $120. Ms. Giunchigliani asked what kinds of problems were encountered in the collection process. Chief Carr said a flat fee was paid for those locations paying a hazardous materials storage fee. Ms. Giunchigliani said perhaps it would be worthwhile to make changes in the authority allowed the state fire marshal’s office and Chief Carr said that would certainly be helpful.

The Chair recognized David Drew, Chairman, Fire Service Standards and Training Committee. Mr. Drew explained it had become painfully obvious to the members of the committee trying to effect positive changes in fire service training in the State of Nevada, that there were precious little resources available financially. The committee had looked at and had developed several different methods of funding. The joint committee had come up with several solid proposals with regard to the joint resolutions of the two committees.

Mr. Drew commented on the notion of contract instructors. He told committee members that while administrative support needed to come from the Office of the State Fire Marshal, the Fire Service Standards and Training Committee felt very strongly the most cost effective way to transfer the wealth of knowledge available in Nevada into the more rural areas was by the use of contract instructors.

Speaking for the committee, Mr. Drew expressed his strong support of A.B. 359. He said a considerable amount of research had been performed throughout the state, at all levels of the fire service, to derive a system whereby fire safety issues could be addressed. One of the reasons the fire insurance tax had been identified was the logic in their minds that the fire insurance people themselves would benefit the most by having trained firefighters.

The Chair recognized Mr. Marvel who asked how the fire training schools operated and if they were a benefit to the fire service in Nevada. Chief Carr said they were a great asset. He explained the Carlin facility was basically an oil and gas fire training facility. The Office of the State Fire Marshal supported that facility in any way possible. Mr. Marvel asked if the fire marshal’s office could use the facility and Chief Carr said yes. Mr. Marvel asked the tuition cost and Mr. Drew said the cost for 20 to 30 students to complete the school was approximately $2,000 per day. He pointed out the tuition would increase as the cost of fuel increased. Another benefit to his local fire district was that several of its firefighters were instructors at the Carlin facility and donated their time to train its own fire district employees. Mr. Drew explained the facility had become popular nationwide and it was difficult to reserve training time. Mr. Marvel asked how large the classes were and Mr. Drew said the number of students would vary greatly depending upon the nature of the training. While oil companies would send up to 50 students to train on all the props located at the facility, local fire departments would send fewer students to train on several of those props.

The Chair recognized Roy Slate, Chairman, State Board of Fire Services. Mr. Slate felt A.B. 359 was a step in the right direction for the Office of the State Fire Marshal. He felt during his tenure on the board, the environment both politically and bureaucratically, had not been conducive to increasing fees or providing support to the overall budget of the Office of the State Fire Marshal. He pointed out Chief Carr had done an outstanding job in improving the productivity of the Office of the State Fire Marshal. He felt A.B. 359 was the first step between the State Board of Fire Services and the Fire Standards and Training Center to attempt to stabilize the agency’s budget in terms of training. If those entities could continue to seek the support of the state legislature on other funding mechanisms, the productivity of the Office of the State Fire Marshal would continue to grow. While the request would not support the entire array of responsibilities and charges of the agency during the next biennium, it was a very necessary first step.

While the Chair understood the dilemma of the Office of the State Fire Marshal, he pointed out it would be very difficult for committee members to set a precedent by allowing the use of a percentage of the insurance premium tax.

The Chair recognized Mrs. Chowning who brought up the fact the tire tax was not expended on anything remotely dealing with automobile issues, and the rental car tax did not go to the Highway Fund, but rather the General Fund. Those were two examples of nonsensical legislation. She said legislators had been reminded in a recent subcommittee of the increased problems with fires and accidents caused because of workers that did not speak English. There had been a fire in Fallon that had been caused because a worker did not know how to read the instructions on a boiler. She commented the cost of doing business kept some businesses from providing adequate training to its employees in the language spoken by those employees. The result was an impact on our firefighters. She felt strongly there needed to be adequate training and wondered if representatives from the Office of the State Fire Marshall would visit businesses and provide instruction in language other than English. Although that type of training was not currently provided, Chief Carr said there was no reason it could not be provided in the future. He said many fire departments in the state had Hispanic-speaking people that could provide that instruction.

The Chair recognized Mr. Drew who mentioned one of the benefits of volunteer systems that occurred in the majority of the state geographically was that the majority of those volunteers worked in businesses in their own communities. Those employees would follow-up on any hazard they encountered in the workplace.

While Mr. Drew understood the Chair’s concern of not wanting to set a precedent by tapping into an existing tax structure, he called committee members’ attention to the significance of the problem in the State of Nevada. Firefighters in most of Nevada’s rural areas were volunteers who donated their own personal time and safety to perform a job for which they were not properly trained.

The Chair recognized Mr. Slate who said the Office of the State Fire Marshal seemed to have run up against a wall when it came to legislation over the last several years. Whether it was through the normal budget process, or other avenues, there needed to be a viable way to fund training for the firefighters in the state.

The Chair recognized Mr. Dini who said the problem was the lack of consistent funding for the Office of the State Fire Marshal. Historically, Mr. Dini said, there had been a bill introduced in the Senate during the 1977 legislature that wiped out the Office of the State Fire Marshal. A deal had been struck to maintain the rural areas and remove some services to Clark and Washoe Counties. He said it was a hard-fought battle to maintain the office and it had been difficult since that time to provide proper funding. A.B. 359 was aimed at providing the agency some fiscal stability. Most people did not realize the great service the Office of the State Fire Marshal provided to the state. He commented there was currently a bill in the Senate that would cut the agency’s funding by two thirds.

The Chair recognized Jim Reinhardt, Fire Chief, East Fork Fire and Paramedic Districts. Mr. Reinhardt explained that district was comprised of 11 volunteer departments and 250 members. Chief Reinhardt was before committee members to speak in favor of A.B. 359 and he applauded Mr. Dini stepping up to the plate and attacking the sacred cow (insurance premium tax). Chief Reinhardt characterized state fire service training to the leper calf that nobody wanted to care for. He said it was time for the state to step up to the plate and say yes, it would provide a stable funding source for state fire service training. There was a great need in the rural counties. He pointed out there were many fire departments in Nevada that were made up of only five or six people and if those people were sent to Carson City for training, who would be available to fight fires in their small jurisdictions. A better way would be to send contract instructors to the rural areas to train firefighters on their own equipment.

The Chair recognized Ms. Ronna Hubbard, who represented the Nevada State Firefighters Association. She explained the association represented approximately 2,500 volunteers throughout the State of Nevada, including Clark County, Washoe County, and all of the rural districts. The training was extremely important to recruit and maintain volunteers. She told committee members the association had sent out 117 surveys to fire departments throughout the state and was in the process of evaluating those responses. Of the 35 percent of responses received to date, the top two concerns were recruiting and retention of volunteers, and training.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 359 closed.

The Chair recognized Marcia de Braga, Assemblywoman, District # 35 who explained A.B. 480 represented the last of three bills introduced by White Pine County. The bill would assist White Pine County to pay its debt stemming from the financial collapse of the White Pine County School District four years ago. As committee members probably recalled, the legislature had passed emergency legislation that allowed the Department of Taxation to take over the school district and help them get back on their feet. She explained the district had refinanced the debt two years ago through a private source and there was still $380,000 each year that came right off the top of the district’s distributive school account (DSA) dollars. While the school district was currently financially sound, Mrs. de Braga felt it was being punished for past performance. She advised committee members the school district did not even have the funds to repair and maintain existing buildings. A.B. 480 was a creative way to remedy the problem and allowed a school district that was in severe financial difficulty to receive additional DSA funds, not to exceed 5 percent, to pay for a loan or debt that was created strictly from severe financial difficulty.

Mrs. de Braga said an additional portion of the bill asked for an appropriation of $350,000 to extend access to the NOVA program. The NOVA program was a very creative program in White Pine County that had achieved tremendous success in placing dropouts back in school. Those students would obtain either their GED or their high school diploma. She originally thought the bill would ask for an additional appropriation to NOVA that would relieve some money already being paid to that program by the White Pine County School District. Those dollars would then become available to perform necessary repairs. The district was currently paying $260,000 per year for the NOVA program.

The Chair recognized Mr. Marvel who asked Jeanne Botts, Sr. Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, how much the appropriation would increase the per-student support from the DSA. Ms. Botts said that amount was approximately $200 per student. Mr. Marvel asked the amount of remaining debt and Ms. Botts said the district had six to seven years remaining. The Chair recognized Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, who said if the average statewide basic support guarantee were used, that amount would be slightly over $1. Again, Mr. Marvel asked the balance of the debt and Ms. Botts responded approximately $2 million. The exact information would be provided to committee members.

The Chair recognized Don Hataway, Deputy Budget Administrator, Budget Division, Department of Administration. Mr. Hataway told committee members the budget division had not taken a position on the issue, however, he conveyed to committee members the potential precedent that would be set regarding the first portion of the bill. Although the district was being well-managed today in terms of its fiscal practices, the current problem was, in fact, the result of poor fiscal management in the past. He told committee members an example of that type of precedent-setting was when the Board of Dispensing Opticians received a declaratory judgment against them in the early 90’s in the amount of $200,000. Because the board did not have the resources to pay the judgment, an agreement was entered that would allow them to pay back the debt in increments of $5,000 per year over time.

The Chair recognized Mrs. de Braga who reminded committee members the legislature had forced the school district to borrow money to pay off the debt it had gotten itself into. At that time, she was very concerned that enough room be left in the school district’s funding for maintenance of its existing buildings. While the school district had been able to construct a much-needed high school, the fact remained there were several sub-standard buildings in the district.

The Chair recognized Mr. Hettrick who commented on Mr. Hataway’s earlier testimony regarding the judgment against the Board of Dispensing Opticians. Mr. Hettrick pointed out if the state had loaned the board $200,000, a charge of 8 percent interest would equal a yearly payback amount of $16,000. He felt that type of situation represented a give-away program rather than a loan.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 480 closed.

The Chair announced A.B. 148 would be held and rescheduled at a later date.

The Chair recognized Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau who advised there were no staff recommendations regarding this budget account.

Mr. Stevens explained staff did have recommendations as well as a decision point requiring committee action. He said actual experience in FY 1999 had been slightly higher in the first two quarters than was contemplated. Staff recommended adjustments in both revenues and expenditures. Those adjustments resulted in a lower reserve balance of $309,000 in the first year of the biennium and $424,000 in the second year of the biennium. Mr. Stevens said the Department of Personnel had indicated that a reserve of $200,000 was acceptable. The committee could either decide to retain the assessment level of .13 percent of payroll for this budget account which would result in a reserve level of $309,000 in the first year of the biennium and $424,000 in the second year of the biennium, or, the committee could adjust the assessment to .11 percent of payroll which would leave a budgeted reserve of $209,000 in the first year of the biennium and $221,000 in the second year of the biennium.

Mr. Stevens pointed out an assessment level change would not normally be recommended; however, the personnel assessment in every account would also need to be adjusted.

The Chair recognized Ms. Giunchigliani who asked Mr. Stevens the status of the proposed Department of Information Technologies (DoIT) portion. Mr. Stevens explained the Department of Personnel would be assessed approximately
$600,000 more based on the proposed DoIT assessment. That issue was still in subcommittee.

The Chair recognized Mr. Beers who thought it might be prudent to put off the vote until the DoIT issue had been addressed. Mr. Stevens commented that issue would not impact this budget, the hit would be taken on the Department of Personnel’s budget. Mr. Stevens clarified the .13 percent assessment in this account strictly funded benefits.

Mr. Stevens explained there had been a slight adjustment that involved the Treasurer’s Interest Distribution.

Mr. Stevens explained there were no staff recommendations to this budget. A listing of grants had been provided to committee members for their review.

The Chair recognized Ms. Evans who questioned receipt of funds by the Nevada Network. Mr. Stevens said he was not prepared to answer the question, nor were there any program analysts present at the meeting to answer detail questions. He suggested if there were questions, the budgets could be held and rescheduled.

The Chair determined the budget closing hearing for the Victims of Domestic Violence would be held and rescheduled.

Mr. Stevens explained a slight adjustment had been made to the budget which involved the projected increase in the number of birth and death certificates to be issued in the upcoming biennium.

HR, CHILD ABUSE AND NEGLECT – BUDGET PAGE DCFS-40

Mr. Stevens advised staff had no recommendations regarding this budget account.

Mr. Stevens advised staff had no recommendations regarding this budget account. He pointed out there would, however, be some adjustments necessary regarding cost allocations.

Mr. Stevens explained staff had received information from the budget office requesting revisions to this budget account. He said the revenues coming into this account had been slightly lower than anticipated and, therefore, the agency had requested some adjustments be made in the Governor Recommends budget that would basically eliminate several new positions and adjust the revenue projections. Staff had not made any adjustments on their own other than what the agency had requested after budget preparation.

Mr. Stevens explained the next several budgets were from within the Colorado River Commission. The main Colorado River Commission budget would be a subcommittee closing, while the smaller accounts were a staff responsibility.

Mr. Stevens advised staff had no recommendations regarding this budget account.

Mr. Stevens advised staff had no recommendations regarding this budget account.

Mr. Stevens advised staff had no recommendations regarding this budget account.

Mr. Stevens advised staff had no recommendations regarding this budget account.

The Chair announced this budget closure would be held and rescheduled.

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The Chair recognized Mr. Stevens who explained A.B. 288 was built into
The Executive Budget. He explained a bill had been introduced in the 1997 Legislative Session that changed the administrative fee the Department of Taxation charged for collection of sales and other taxes from 1 percent of total collections to 0.5 percent of local collections. That legislation was effective July 1, 1999.

The Executive Budget recommended the assessment be changed to 0.75 percent. Mr. Stevens referred committee members to Exhibit F, information provided by the Department of Taxation that justified the 0.75 percent administrative fee. Local governments had testified against A.B. 288 and had wanted to see the assessment lowered to 0.5 percent. Mr. Stevens explained if A.B. 288 were not passed, it would be worth approximately $7.5 million and that funding would have to be derived from another source.

The Chair recognized Ms. Giunchigliani who felt the legislation was unfair to Nevada’s counties. She said it appeared many assumptions had been made regarding The Executive Budget based on the assumed direction of the legislature. Mr. Stevens felt committee members would have to get either comfortable or uncomfortable with the Department of Taxation’s analysis of whether a 0.75 assessment rate could be justified. Ms. Giunchigliani asked what kind of hit the counties in Nevada would take and Mr. Stevens responded that amount would be $7 million.

The Chair recognized Mr. Dini who asked if information was available regarding the impact of the proposed legislation on a county-by-county basis. Mr. Stevens responded that information would have to be developed. He pointed out the impact would be based on the amount of local receipts. Clark County would be hit the hardest, followed by Washoe County, and on down the line. Mr. Dini felt this legislation represented another unfunded mandate on the counties.

The Chair recognized Don Hataway, Deputy Budget Administrator, Budget Division, Department of Administration. Mr. Hataway explained the current charge was 1 percent until July 1, 1999, at which time the plan was to reduce the assessment to 0.5 percent. The result of a study performed by the Department of Taxation at the request of the budget office resulted in the 0.75 percent assessment rate. The budget office felt the three-quarter of one percent assessment rate was more fair than the 0.5 percent assessment.

The Chair recognized Ms. Giunchigliani who asked who proposed the July 1, 1999 reduction, and Mr. Hataway responded the counties. Ms. Giunchigliani asked Mr. Hataway if the budget office was willing to send a letter to the counties telling them an error had been made during the last legislative session and Mr. Hataway said absolutely. He felt there had been better communication between the budget office and the counties and that the counties would understand the reason for the 0.75 assessment.

Ms. Giunchigliani asked if the counties had sufficient time to prepare their budgets in view of the change in assessment. Mr. Hataway said the budget office wanted to ensure A.B. 288 was heard and acted upon before the June 15, 1999 deadline for counties to certify their final budgets to the Department of Taxation.

The Chair recognized Mr. Hettrick who explained the counties did not feel they should have to fund 72 percent of the staff and asked if the counties were actually costing the state 72 percent. Mr. Hataway responded in the affirmative and explained the majority of the taxes the Department of Taxation collected went to local government (school districts, counties, cities, etc.). He felt centralized collection would be best in the long run, it was the matter of the Department of Taxation being reasonably reimbursed for its expenses.

The Chair recognized Vice Chair Evans who said if there was no need to take immediate action, she would prefer to see a breakout of the numbers by each local entity. Mr. Hataway said following the experience of the LSST, Clark County would be 60 percent, Washoe County was about 20 percent, and the balance of the counties were about 20 percent.

The Chair announced A.B. 288 would be held until the requested information was received.

* * * * * * * * * *

Mr. Stevens explained A.B. 345 was the supplemental appropriation for the Distributive School Account (DSA). He pointed the amount of $28.9 million on line 3 of the bill needed to be amended as the result of sales tax coming in at a higher level in the last several months than projected by the Economic Forum.

Mr. Stevens said the current tax collections for the DSA represented an approximate 8.9 percent increase thus far, and projecting an 8.5 percent increase in sales tax for the year, would generate $17,859,623. Both the Fiscal Analysis Division and the Budget Office agreed that number would be appropriate for the committee to consider in amending A.B. 345.

Mr. Dini and Mr. Marvel agreed the $17,859,623 figure should be rounded up to $17,900,000.

Based on previous testimony, Mr. Stevens said committee members were aware state tax revenues were coming in at a lower rate than projected. Staff’s recommendation was to pass the bill to allow money to be provided to school districts and that an adjustment would be made to the class-size reduction bill or to the appropriations act, late in session.

The Chair recognized Mr. Hettrick who said he understood the intent of ACR 9, but did have a problem with passing a resolution that encouraged a state agency to perform duties for which the legislature provided no funding. If language in the bill were changed to say those duties were "needed," rather than indicating those duties would be "paid for," he would have no problem supporting the legislation.

The Chair recognized Ms. Giunchigliani who questioned the legislation in view of the fact Congress had already taken the same action approximately three weeks prior. Mr. Hettrick agreed with that assessment.

The Chair brought A.B. 239 before committee members for discussion purposes only.

Mr. Stevens explained A.B. 239 had been heard by committee members the week prior and involved background checks for persons who worked directly with children. The issue was whether or not it was appropriate to use monies in the reserve of the criminal history repository to pay for background checks for people who worked directly with children.

The Chair recognized Ms. Giunchigliani who recalled in earlier testimony, Mr. Nolan had agreed to an amendment that would remove the reserve issue if it would make the difference in passage of the bill. She felt it would not be proper to have that kind of commitment and, if fingerprinting were required, the cost should be borne by the individual.

The Chair recognized Mr. Hettrick who also advised committee members his notes reflected Mr. Nolan had requested an amendment to ask for no money and to simply allow for gifts.

Mr. Stevens said the bill would provide for a gift account and, if gifts were received, those funds could be used for fingerprinting purposes. He referred committee members to section 2, subsection 3, which provided "any money remaining in the budget account of the director of the department from fees charged by the central repository for criminal investigations at the end of the fiscal year, and gifts, donations, bequests, and other sources* * *."

Mr. Hettrick suggested the removal of the "any money remaining" portion and that the "gifts and donations portion" be maintained.

The Chair recognized Ms. Giunchigliani who advised language would have to be deleted from subsection 5, as well, and Mr. Hettrick agreed.

The Chair advised A.B. 239 would be rescheduled.

The Chair brought A.B. 289 before committee members for discussion purposes only.

The Chair recognized Ms. Giunchigliani who said she had explained to employee groups that while the legislature appreciated the need for refrigerators, gift funds, and plaques, that was not an appropriate use of these funds. She felt that other issues such as prison medical and sick leave use were far more important than the vending machine issue in and of itself.

The Chair recognized Ms. Giunchigliani who advised a subcommittee report had been generated on A.B. 468 to amend and re-refer to the Assembly Committee on Ways and Means.

There being no further business, the meeting was adjourned at 10:30 a.m.

RESPECTFULLY SUBMITTED:

Debbie Zuspan,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

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