The Committee on Ways and Means was called to order at 8:18 a.m., on Tuesday, May 18, 1999. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada.

COMMITTEE MEMBERS PRESENT:

Mr. Morse Arberry Jr., Chairman

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph E. Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

Mr. Bob Price

COMMITTEE MEMBERS ABSENT:

Ms. Jan Evans, Vice Chair (Excused)

STAFF MEMBERS PRESENT:

The Chair advised committee members they would meet in joint committee with Senate Finance at 9:00 a.m. that morning and that Mark Stevens, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau would brief them on budget closing differences to be discussed at that meeting. Mr. Stevens told committee members he would explain the differences between the Assembly and Senate budget closings.

Mr. Stevens explained the Assembly’s version of this budget closing had eliminated funding for the Washington office and the Senate’s version had closed the budget as the Governor had recommended.

Mr. Stevens explained the Assembly’s version of this budget closing had eliminated one new position recommended in Decision Unit E-125. Committee members had pointed out the agency received one new position as a result of the 1997 legislature and the Lieutenant Governor had five existing support staff positions.

Mr. Stevens advised a memo had been received two weeks earlier from the budget office that indicated two additional positions not included in
The Executive Budget should be considered for the Controller’s Office. He said The Executive Budget included a total of five new positions related to the integrated financial system project. The Assembly’s version of this budget closing had not included the two additional positions while the Senate’s version had.

Mr. Stevens said the only difference between the Assembly’s version of this budget closing and Senate’s version was that the Senate wanted to include a letter of intent requesting the Department of Taxation obtain a third party independent review of results and recommendations from phase I of the Business Process Reengineering Study.

Mr. Stevens advised the major difference in this budget closing related to the revised Governor’s recommendations that had been received several weeks earlier. Those recommendations included $160,000 per year to address the issues of the fire ant, africanized honey bees, and the wild horse facility program. He said the Senate’s version of this budget closing added those dollars into this budget account. The Assembly had not yet taken action on the request.

The Chair recognized Mrs. Chowning who asked if the Senate had closed adding $26,623 in FY 2000 and $8,956 in FY 2001 to the Africanized Honey Bee Program and $25,000 in each year of the biennium to the Wild Horse Facility Program. Mr. Stevens explained the majority of the costs regarding those programs and the fire ant issue were found in Decision Unit E-125. Personnel costs in Decision Unit E-125 totaled $110,286 in FY 2000 and $122,028 in
FY 2001. Mrs. Chowning asked why the Assembly had closed different than the Senate. She did not recall any controversy regarding those programs.

The Chair recognized Mrs. de Braga who told committee members she had introduced a bill to infuse money into the Wild Horse Facility Program. Without an appropriation from the legislature to pay for feed, the program would not be able to continue unless they sold horses to pay for the cost of keeping the horses that would be adopted. She recalled there had been discussions regarding the need for additional dollars to fund the Africanized Honey Bee Program and, if appropriated, those dollars would also cover the costs of personnel and the costs to deal with the fire ant problem.

The Chair recognized Mr. Stevens who advised the information he had received from Senate Finance provided for increases of $57,000 in the first year of the biennium and $52,000 in the second year of the biennium for one Agriculturist position that would perform public outreach and surveys related to bees. Also included was $64,000 in each year of the biennium for three Seasonal Agricultural Inspectors to conduct a survey of imported fire ants; $15,000 in each year of the biennium for a half-time Agricultural Inspector to assist the Entomologist; and $25,000 in each year of the biennium for cost and feeding of horses at the Carson City Wild Horse Facility.

To answer Mrs. Chowning’s earlier question, Mr. Stevens explained staff had received information late in session that the Governor had recommended those additional amounts be considered by the Assembly and Senate. There had been no specific testimony on these three issues in either subcommittee or full committee.

The Chair recognized Mr. Dini who recalled there had been testimony regarding the Africanized honey bee issue. He indicated both the bees and the ants were a serious problem in southern Nevada that needed to be addressed immediately.
Mr. Stevens explained committee members had discussed those issues on several occasions but never the associated costs. He said there had been a bill before committee members to provide $40,000 per year to conduct a survey regarding the fire ants and a one-shot appropriation of $25,000 for the wild horse facility. Mr. Dini recalled a bill that would provide $80,000 to address wild horse issues. He pointed out funding for hay would have to be provided if the wild horse program at the prison farm were to be continued.

The Chair recognized Mr. Marvel who commented a beautiful facility had been constructed at the prison farm to deal with the "nuisance problem" associated with wild horses.

The Chair recognized Mrs. Chowning who advised she had strongly supported funding of services to deal with the fire ant and Africanized honey bee issues. She recalled the funding for those programs was originally to be supported by an increase in fees to nurseries, etc. She wanted to know if there would be an increase in fees in addition to the direct appropriations or if funding would be provided solely through direct appropriations. Mr. Stevens said it was his understanding there was a bill being drafted that would allow the Department of Agriculture to increase fees to fund at least a portion of the two Agriculturist positions. He said there was a fee component associated with positions originally identified in The Executive Budget. However, the two new Agriculturist positions discussed in the Senate’s version of this budget closing were scheduled to be funded via the General Fund.

The Chair recognized Mrs. Chowning who told committee members there had been a family in Pahrump who were unable to leave their home for three days as a result of the Africanized honey bee problem. She thought perhaps the Senate felt there was not enough time for an increase in fees to allow the new positions to "gear up."

The Chair confirmed it was the pleasure of committee members to support the Senate’s closing of this budget account.

Mr. Stevens explained there were two differences between the Assembly’s version of this budget closing and the Senate’s version. The first was regarding letter of intent language to be added to the Appropriations Bill to allow unexpended Train Employees Now (TEN) monies between fiscal years. Staff had no problem with that language and had intended to place the same language at the back of the Appropriations Bill. The second was a letter of intent from the Assembly that the Commission on Economic Development increase the average wage requirement for the TEN program from 75 percent to 80 percent, or higher. That letter of intent was not supported in the Senate’s version.

Mr. Stevens advised funding for the Washington Office had been removed from the Assembly’s version of this budget closing as the result of its elimination.

The Chair recognized Mr. Dini who asked how the Senate had closed this Washington Office issue and Mr. Stevens advised there had been a budget amendment that requested the mix of funding be changed; i.e., that less money come out of this budget account based on the original Governor’s recommendation, and that the Commission on Tourism and the Nevada Department of Transportation contribute more.

Mr. Stevens told committee members the major difference between the Assembly’s version of this budget closing and the Senate’s version was that committee members had increased the room tax by 1 percent based on the actual experience-to-date figures. That growth rate was then applied to each ear of the biennium and generated additional revenue of approximately
$256,000. Additionally, the projection for the reserve in this account was $1,133,000. He said the Commission on Tourism had indicated it needed
$1 million as a minimum reserve and therefore, the reserve was reduced by $133,000. The combination of the room tax revenue and the reduction in reserve totaled $390,000. That amount was transferred to augment the amount of money available for park improvements in the amount of $193,000 in the first year of the biennium and $197,000 in the second year of the biennium. On the list scheduled for improvements were Lake Lahontan, Valley of Fire, Lake Tahoe, and Spring Mountain. The Senate’s version had not concurred with those changes.

The Chair asked why the Senate had not concurred. Mr. Stevens advised the Senate had not rejected the Assembly’s version, rather, they had not considered those items.

Mr. Stevens explained there were several differences that needed to be addressed for closing purposes. The difference was the EMS rural initiative found in Decision Unit E-131. That initiative added $20,000 in each year of the biennium for training of EMS personnel. Monies allocated in the first year of the biennium would provide for a trailer that could be transported around Nevada for training purposes, and slightly in excess of $5,000 for training costs. The entire $20,000 in the second year of the biennium would fund training costs. The Senate had not made that recommendation in its version.

The Chair recognized Mr. Dini who asked for this budget closing to be held. He stressed the importance of training being brought to the rural areas of Nevada.

The Chair recognized Mr. Parks who asked if there had been a change in the radio network request. Mr. Stevens said there was a change and the Senate’s version was not reflective of that change.

Mr. Stevens told committee members the only difference in this budget account was that the Senate’s version added one Social Worker position related to
S.B. 288. The Chair stated S.B. 288 was Senator Washington’s bill. It was his feeling the individual counties should absorb the costs of an additional social worker position should they establishing a pilot program for foster care. The Chair told committee members he had discussed the issue with Senator Washington and the Senator had agreed the counties should be responsible for costs associated with adding a social worker position.

Mr. Stevens explained the Senate’s version of this budget closing added approximately $3,000 for a personal computer related to the social worker position it added to the HR, Children and Family Administration budget.

Mr. Stevens explained the differences in these three budgets were related to
A.B. 181 that transferred the Bureau of Alcohol and Drug Abuse (BADA) from Employment Training and Rehabilitation to Human Resources. He advised there were a number of budgets within Employment Training and Rehabilitation that performed work related to BADA that were not included in the BADA budget. If those positions were transferred to a different department, they needed to transfer with the BADA budget. Those positions were as follows:

• One Management Analyst position in the Director’s Office that monitored BADA grants. Decision Unit E-125 in the Director’s Office budget reflected that reduction.
• One Accountant Technician position and one half-time Account Clerk position that performed accounting functions related to BADA.
• One Rehabilitation Specialist who worked on policy issues related to BADA.

Mr. Stevens told committee members the Senate’s version did not include those transfers.

The Chair recognized Mr. Dini who thought there was an attempt being made to kill A.B. 181 by interest groups.

Mr. Stevens told committee members the Senate’s version of this budget closing did not allow for the inclusion of language in the body of the Appropriations Act to not allow the privatizing of medical/mental health services at facilities other than Ely. One possible option was to provide for Interim Finance Committee (IFC) review/approval.

The Senate’s version regarding the proposed letters of intent was the same as the Assembly’s version with the addition of the request for the Nevada Department of Prisons (NDOP) administration to review the feasibility of providing some type of housing for staff assigned to the Lovelock Correctional Center and the Ely State Prison.

The Chair asked committee members how they felt regarding the housing issue and recognized Mrs. de Braga. Mrs. de Braga stated there was more than sufficient housing in the Ely area. She agreed that housing was a problem in the Lovelock area. Even if there was sufficient housing, she said, people did not want to live in that area. They would rather live in Winnemucca, Fernley, or Fallon. She said one reason was the limited shopping and other basic living resources available in Lovelock.

The Chair recognized Mr. Marvel who felt the housing issue in Lovelock would not have been a problem had the 2-year period of mothballing not occurred. He felt that adequate housing would develop in the future.

Mr. Stevens told committee members the Senate’s version of this budget closing included a change in the debt service required for the privatized women’s facility in Las Vegas from General Fund to General Obligation Bonds. He said the State Treasurer had recently refinanced bonds and there were dollars available within that refinancing to pay for debt service. The Governor had proposed charging the privatized women’s facility debt cost to General Obligation Bonds, thereby freeing-up General Fund dollars that could be used elsewhere, i.e., the loan repayment from White Pine County School District. Mr. Stevens advised that committee members had not discussed that issue.

The Chair suggested the Assembly’s version coincide with the Senate’s version on this budget account.

Mr. Stevens explained the proposed reorganization of DMV was the only issue regarding these budget accounts.

The Chair asked for discussion regarding the proposed reorganization and recognized Ms. Giunchigliani. It was Ms. Giunchigliani’s opinion the Assembly should "hold" DMV’s budgets. She pointed out the reorganization had been
"a plan in movement, continually changing." To place the reorganization in statute or include it as part of the budget closings would be remiss on the part of the legislature and would be potentially damaging to the reorganization’s success. She said no one had argued that GENESIS should not go forward. The only point the Assembly and Senate had differed on, she said, was that the Assembly wanted an oversight committee to be established regarding the issue of a full reorganization. The Assembly wanted to allow DMV the interim period to test the reorganization structure and report back to the oversight committee. If a positive report was provided, the oversight committee would adopt the reorganization. At this time, however, the Assembly did not feel it was good management sense to adopt a plan that had been changed four times since the beginning of the legislative session.

The Chair recognized Mr. Perkins who said that while he was concerned regarding the testimony of Deloitte & Touche and how the reorganization had been woven into their contract, he was truly dismayed at how the reorganization had been presented in subcommittee.

The Chair recognized Mr. Dini who asked if the oversight committee would overlook the reorganization and that final approval would come from the Interim Finance Committee and Ms. Giunchigliani said that was correct. She clarified that both the Assembly and Senate had closed with the oversight committee language, the difference had been the Senate wanted to adopt the reorganization plan immediately. She pointed out the contract issue regarding Deloitte & Touche had never surfaced during the subcommittee hearing.
Mr. Dini asked if final approval from IFC would solve the problem and
Ms. Giunchigliani felt that it would.

The Chair hoped that DMV would not use the reorganization as an excuse to make GENESIS a "NOMADS" project.

Mr. Stevens told committee members there were two issues with this budget account. The first was regarding the proposed reorganization. The second was the cost for digitized driver’s license photos. The Senate version included the funding for those digitized photos costs from Highway Fund dollars while the Assembly increased driver’s license fees, noting there was an existing fee designed to pay for the costs incurred with the issuance of a driver’s license.

The Chair asked the amount of the increased driver’s license fee and recognized Mrs. Chowning who indicated she did not recall the amount of the fee increase. She felt the digitized driver’s license photos should be funded through a Highway Fund appropriation.

The Chair recognized Mr. Hettrick who asked if there was an actual increase in the driver’s license fee and Mr. Stevens said there would be an additional cost. The Chair recognized Gary Ghiggeri, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau. Mr. Ghiggeri explained the additional cost would run between $1 and $1.50 and would be passed on to the public. He advised the photo license fee category represented the existing charge for a Polaroid picture.

The Chair recognized Ms. Giunchigliani who said the issue was "not a good deal" because the photo already had an associated charge and DMV just wanted the new technology. She did not recall the issue of the Highway Fund having been addressed as a way to offset the fee cost. The photo had always been charged for in the past, it was just a new type of photo using different technology. She was concerned the Highway Fund was not necessarily being used for proper purposes.

The Chair recognized Mr. Beers who told committee members the general rule he used when implementing new technology was what benefit would be derived. In the case of the digitized photos, he saw a higher cost and no increased benefit.

The Chair recognized Mr. Dini who asked if the fee increase fell within the current administration’s guidelines. Mr. Hataway, Deputy Budget Administrator, Budget Division, Department of Administration said he did not know.

The Chair recognized Mr. Hettrick who asked if the cost for the digitized photos was $700,000 annually. He said he had recently checked on the number of driver’s licenses in Nevada and found they totaled 700,000. He pointed out all of those licenses did not renew annually. It would take five years to collect $700,000 at a cost of $1 each. The cost for each license would have to be increased by approximately $5 for the program to pay for itself.

The Chair recognized Mrs. Chowning who asked if a bill had been introduced regarding digitized photos and if that bill contained funding language.
Mr. Ghiggeri said there was a bill regarding digitized photos that had been approved by both houses.

Mr. Stevens explained the only difference was a letter of intent by the Senate to report quarterly to IFC on activities related to the Drug Commission. There was no dollar amount change.

Mr. Stevens told committee members The Executive Budget originally reflected the state and the grantee sharing 50 percent of a 25 percent match for the federal funds. The Executive Budget was then revised because only a
10 percent match was required. The revision recommended the grantee pay 100 percent of the match cost. Staff had received a second revision from the budget division that indicated the 10 percent match cost should be divided equally between the state and the grantee. He said committee members had closed this budget account with the grantee incurring 100 percent of the match cost as proposed in the first Governor’s revision. The Senate’s version closed this budget with the state and the grantee sharing the 10 percent match cost, as proposed in the second Governor’s revision. Mr. Stevens said the bottom line was whether the grantee should pay 100 percent of the match, approximately $82,000 to $85,000, or whether the state should participate 50/50 in that match cost at $43,000 to the state and $43,000 to the grantee.

Mr. Stevens explained committee members had closed this budget very early in session. He said additional information had become available regarding positions and the Senate’s version closed this budget account in light of that additional information.

It was Mr. Stevens’ recommendation that the Assembly’s version of this budget closing coincide with the Senate’s version.

Mr. Stevens told committee members a memo had been received two weeks prior from the budget division that added funds to this budget account. That addition was not considered in the Assembly’s version of the budget closing. He explained the differences were in Decision Unit E-125 in the categories of out-of-state travel, equipment, information technology, and training.

Mr. Stevens added there had been no testimony regarding the additional funds.

Mr. Stevens explained this budget account involved the Vehicle Theft Unit (VIPER) program. The one difference was that the Assembly’s version of this budget closing included a letter of intent to the agency to revise the VIPER program and return to IFC for possible funding from the contingency fund. He said the Senate had included the program in the "add-back" list. The program was not included in either the Assembly’s or Senate’s version of this budget closing.

Mr. Stevens advised if a number of these types of programs, such as the VIPER program, came back to IFC, committee members would have to consider the impact those programs would have on the balance in IFC. He said committee members may just want to decide whether or not to fund the VIPER program with existing money and not seek funding from IFC.

The Chair recognized Ms. Giunchigliani who felt the VIPER program should not receive immediate funding in view of previous testimony that had indicated the program needed to be revised. Ms. Giunchigliani felt it would be irresponsible to commit to a program that committee members agreed did not work in its present format.

She questioned the "add-back" list and its intent. Mr. Stevens advised there were a number of items that had been reviewed in joint subcommittee closings that committee members were interested in providing additional funds, but the availability of additional funds was not known. He explained those budgets had been closed in subcommittee with the request for additional funds placed on a priority list for consideration at a later date.

Ms. Giunchigliani said she would rather give money to the disabled community than to a VIPER program.

Mr. Stevens explained the only difference in the Assembly’s version of this budget closing and the Senate’s version was that the Assembly requested a letter of intent to pass as many of the grant funds as possible through to local governments. He advised the Assembly had requested a similar letter of intent regarding the Emergency Management Assistance Program.

Mr. Stevens explained the Assembly’s version of this budget closing included the addition of General Fund dollars to provide for a three-month cash flow reserve. He said committee members had initially eliminated the Beatty dump fees and had attempted to fully-fund those fees. Subsequently, committee members included $20,000 in Beatty dump fees to fund a rural training component and provided that if Beatty dump fees came in higher than the $20,000 level, those extra dollars would be reverted back to the General Fund. That action represented an add of $177,000 in the first year of the biennium and approximately $64,000 in the second year of the biennium.

Mr. Stevens explained this budget account involved S.B. 167. He said the program was currently funded out of 20 percent of the registration fee collected by the Highway Patrol for hazardous waste carriers. S.B. 167 would place that amount in the Highway Fund to pay for the program. He said it would be important to keep track of the fee to ensure it generated sufficient funds to offset the Highway Fund appropriation. The Assembly’s version of this budget closing maintained the program under its current funding component and the Senate’s version assumed passage of S.B. 167 which would place the fee into the Highway Fund and result in the requirement for a Highway Fund appropriation to finance this budget account.

Mr. Marvel asked the status of S.B. 167 and Mr. Stevens said it was on the Assembly side, however, not in Ways and Means. The Chair recognized
Mrs. de Braga who advised the bill would be heard in her committee on
May 19, 1999 and would be re-referred.

Mr. Stevens told committee members the Colorado River Commission had requested three positions be reclassified from classified to unclassified service. Those positions included the heads of the power division and water division, and the administrative services officer. The commission had also requested the salary of those positions be increased to $90,000 per year. He advised the Senate’s version had closed this budget account with all three positions being reclassified and the Assembly’s version of this budget closing only reclassified the head of the power division and the head of the water division.

FORESTRY – BUDGET PAGE CNR-52

Mr. Stevens told committee members the only difference between the Assembly’s version and the Senate’s version of this budget closing was in Decision Unit E-410 that involved the new Forester position that was funded with pollution control funds. He advised the Senate’s version deleted the Forester position.

Mr. Stevens explained Decision Unit E-730 reflected the transfer of additional room tax money from the Commission on Tourism in the amount of $193,000 in the first year of the biennium and $197,000 in the second year of the biennium. Those transferred dollars would be used for the park improvement programs.

Mr. Stevens advised the only difference between the Assembly’s version and the Senate’s version of this budget closing was the closure of the Washington Office.

Mr. Stevens explained the Senate’s version of this budget’s closure included a letter of intent questioning whether the home should be privatized or state-run.

At the call of the Chair, the meeting was recessed at 9:10 a.m.

RESPECTFULLY SUBMITTED:

Debbie Zuspan,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

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