The Joint Subcommittee on Public Safety/Natural Resources/Transportation of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman Lawrence E. Jacobsen, at 8:10 a.m., on Tuesday, March 2, 1999, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

SENATE COMMITTEE MEMBERS PRESENT:

Senator Lawrence E. Jacobsen, Chairman

Senator William R. O’Donnell

Senator Joseph M. Neal Jr.

Ms. Chris Giunchigliani, Chairman

Mrs. Vonne S. Chowning

Mr. Richard D. Perkins

Mr. Bob Price

Mr. John W. Marvel (Excused)

STAFF MEMBERS PRESENT:

Gary Ghiggeri, Principal Deputy Fiscal Analyst

Debbra J. King, Program Analyst

Jean Laird, Committee Secretary

OTHERS PRESENT:

John Drew, Acting Director, Department of Motor Vehicles and Public Safety, noted that under normal circumstances he would present budgets in the order they appear in The Executive Budget, but because of Project Genesis, the department will address the areas that are changing. He said that in 1995 the motor vehicle branch of the department began to change and, with the current Governor’s recommended budget, it will change again. Those changes are designed to take the Drivers’ License Division and the Registration Division into the future for Nevada. The changes will employ new technology and there has been a bill draft submitted to change the current organizational structure.

Mr. Drew said these changes have not come easily for anyone. He added that staff has worked long and hard to ensure transitions are implemented correctly and the new system will work. He noted the hard work does not mean there have been no problems. The most recent problem is the department’s failure to provide information to Legislative Counsel Bureau (LCB) staff prior to this hearing. He indicated it was more important for the information to be as accurate as possible and late, rather than on time but wrong.

Mr. Drew reiterated the changes began in 1995. He said that during the last legislative session the department provided testimony and received funding to move forward with implementation of new processes, supporting technology and an improved organizational structure. He added that, consequently, the last two years have been extremely active for the department.

Mr. Drew informed the committee the department has several new recommended budget accounts in The Executive Budget. He said the new budget accounts are in preparation for the organizational changes. He noted that during the last session Genesis was separate from the daily operations of the Department of Motor Vehicles and Public Safety (DMV&PS). He said that as the department moves closer to implementation, Genesis becomes more "a part of today rather than the future." He explained realignment of the budgets allows the department to take advantage of the benefits of new thinking, while maintaining budget integrity.

Mr. Drew said the department has not traveled this road alone. He explained an Interim Finance Committee (IFC) subcommittee was appointed to provide oversight and guidance in the development of Project Genesis. He recognized the efforts of the subcommittee members, which included Senator Lawrence E. Jacobsen, Senator William R. O'Donnell, and Assemblywoman Vonne S. Chowning, for their invaluable contributions. He said Genesis staff periodically met with the subcommittee to report progress and the subcommittee provided guidance in the next steps to be taken. The Genesis team demonstrated the proposed system and the subcommittee reported its work to the full IFC in December 1998.

Mr. Drew said a project of this size and complexity spawns many questions. He said the department, therefore, has prepared a short presentation of the overall project, including where it is now and where it is going. He explained that after the presentation the department would discuss budget accounts and enhancements.

Donna C. West, Project Manager, Project Genesis, Department of Motor Vehicles and Public Safety, stated that since the 1997 Legislative Session the Genesis team has worked closely with the IFC subcommittee. She explained that, unlike a division budget, Project Genesis has no performance indicators. However, she said, in concert with the subcommittee the Genesis team developed a set of benchmarks, or "go/no go" points.

Ms. West referenced a document titled "DMV&PS, Motor Vehicles Branch, Budget Presentation, March 2, 1999" (Exhibit C. Original is on file in the Research Library.). She called attention to the second page of the exhibit, which identifies decision points and IFC subcommittee meeting dates as follows:

• Technology User Requirements – June 24, 1998
• Organizational Realignment – September 22, 1998
• Technology Infrastructure – November 18, 1998
• Phase B Pilot – December 13, 1998

Ms. West said that at the November meeting the IFC subcommittee approved procurement of the system and at the December meeting approved a pilot project for the occupational and business licensing functions.

Ms. West said that at this hearing she would report on how the department is performing according to the project plan, how the team is preparing the organization to operate in the new environment, how the department is performing against the project budget, and the proposed budgets for the next biennium.

Ms. West described the reengineering plan as a three-legged stool, the "legs" being process, organization, and technology. She said the processes were radically redesigned first. The team asked questions such as: "Why do we do this? Do we really need to do this? What is the best and most efficient way to handle this transaction?" She explained the department looked at automating manual processes and providing more information to the field to help customers. She added the department also provided more information internally for effective internal management.

Ms. West indicated that at the last session the department testified it would use the streamlined process to create a request for proposal (RFP) for a technology vendor. She said the department also testified it would use collected ideas and form process improvement teams to implement immediate "fixes" to the agency. She added the department also testified at the last session it would create employee training programs for the new organizational structure and the new technology.

Ms. West described what the department has actually done since the last session. She said the department issued an RFP for a technology vendor on August 5, 1997. She noted the contract was awarded to the firm of Deloitte and Touche, who started work on April 6, 1998. She said the department, using the ideas that were collected, formed 10 process improvement teams and each team developed a recommendation. Ms. West said 6 of those 10 recommendations have been implemented as changes within the agency. She explained that four groups reviewed the recommendations and found no action was required on behalf of the department.

Continuing, Ms. West said subject matter training (cross training) has begun and is about 95 percent complete in northern Nevada and about 50 percent complete in southern Nevada. She informed the committee the department also has a cross-utilization program so employees in the Registration Division and the Drivers’ License Division can maintain skills by working in the other division. Ms. West added the application training is currently being designed.

Ms. West said the second leg of the stool is the organization. She noted that once the department determined what the new processes would be, it was apparent the existing divisions of registration and drivers’ license overlapped and there was duplication. She explained the divisions repeated the same types of functions with a different focus within each of the two areas. She admitted the divisions operated independently and separately and did not always communicate well. She added that this communication deficit led to problems and confusion for the customers.

Ms. West stated that at the last session, the department discussed the framework for the new organization and it was agreed it was not appropriate at that time to completely realign the DMV organization. She reminded the committee one new budget was created, DMV Field Services, which combined the face-to-face customer service employees from the Registration and Drivers’ License Divisions into one budget. This change has enabled cross training and cross utilization to take place between the two divisions while maintaining budget integrity, Ms. West continued.

Ms. West said it was discussed at the last session and with the oversight IFC subcommittee that during the time between sessions the department would work with the Department of Personnel to validate the proposed organization. She said the department was to select administrators for the new divisions, identify who would serve in the manager slots, and validate the team structures for the organization to make sure everyone is appropriately placed for training. She testified the department has met with the Department of Personnel, looked at the organization vertically within each division and horizontally across the organization to ensure equity, and created new classes where needed to appropriately reflect job duties for the new organization.

Ms. West said the department identified new administrators between August 1998 and January 1999. She noted the department has designated the 4 new administrators and 14 of the 16 managers who would serve in the new organization. She stated these positions went through the normal state recruitment process. She added the announcements included a statement that these new positions were contingent upon legislative approval, as agreed to with the IFC subcommittee.

Ms. West explained the department needed to take these steps to get the organization in place to ensure the department is ready to implement the training, the hardware, and the new system. She reiterated the proposed organization needs to be ready for implementation should the project be approved. She added it is important to the department to proceed to ensure organizational readiness for the new system. Failure to do so might result in a lack of efficiencies when the new system is implemented, she stated.

Ms. West said the third leg of the stool is technology. Deloitte and Touche was brought aboard to help determine hardware needs, design new screens for the application, test pilot, and put the new system into production. She reminded the committee that at the last session the department said it would replace dumb terminal/mainframe architecture with client/server hardware. She said the department had testified it would create an integrated database of all driver and vehicle records. She added the department testified it would enhance service processes with bar code readers and credit card scanners and it would plan for emerging technology for phase 3 of the project.

Ms. West then described what DMV&PS has done regarding technology. She said the department is currently installing hardware and it will be completed at the end of March 1999. She noted the department is collecting and entering data linking driver and vehicle records. She explained that with registration renewals, by mail or in the office, the department has asked customers to provide driver’s license numbers. Ms. West stated the department has hired, as approved by the IFC subcommittee, two contract staff from the Bureau of Vocational Rehabilitation, Rehabilitation Division, Department of Employment and Training, to enter the linkage data to help create the integrated database. She said the department is constructing and testing screens for "one-stop service" in batch processes that occur behind the scenes. She informed the committee bar code readers and credit card scanners are being installed to work with the new application before the system goes live.

Continuing, Ms. West said the department would be discussing budget requests for a digitized photo system, the Interactive Voice Response Unit that allows for telephone transactions, Internet transactions, and renewal at emission control stations. Ms. West said the new system has been designed to allow the department to link these technologies. She mentioned the department has also prepared the organization by involving employees. Ms. West also referenced Senate Bill (S.B.) 279.

Ms. West reminded the committee that at the last session a new budget was created, budget account 201-4739, DMV, Project Genesis, to help isolate and track the cost of the project. She said the seven core team members of Project Genesis have business knowledge about various aspects of the department and are involved in the development phases leading to implementation.

Ms. West said there are also five subject matter experts from other areas of the department not represented by the core team. She added that people from the Drivers’ License Division, the Title Bureau, the Insurance Verification Section, and a part-time subject matter expert from the Administrative Services Division (to help with the revenue portion of the system) have been involved.

Ms. West testified 230 employees have also been involved on a 1- to 3-day basis in design sessions for the new system. She explained that visits to other states indicated high user involvement in the development phase was critical to the success of the system. She noted these 230 employees were chosen for their expertise and experience in a particular area of the department.

Continuing, Ms. West explained there are also "extended team members." There are 13 individuals writing test scenarios; they will be wrapping up that work this month. She said five of those employees will be with the team full-time through November 1999 until the end of the contract with Deloitte and Touche. Those five will continue testing changes and debugging the system before the team distributes system components to staff and customers.

Ms. West said four employees are working with the team February 1999 through July 1999 to write new procedures manuals and to help implement procedures for the new system.

Ms. West said there are 12 trainers. Four of the trainers began conducting subject matter training in August 1998 and are continuing so all employees in the motor vehicles branch will be adequately cross-trained. There are four personal computer (PC) trainers to help employees work with the new hardware. Four team members were assigned in February 1999 to work full-time on application training, which will continue through July 1999. Ms. West stated the department would be adding 11 more people to complete the application training before the department goes live with the system.

Ms. West said three DMV&PS automation staff are now working with the team to prepare office sites for hardware and equipment. She reminded the committee that at the last session the Legislature approved information system (IS) positions for Project Genesis. Eleven of those positions are filled. She said the purpose of the positions is to work with the vendor to learn the development coding and testing of the system. This needs to be done to give DMV&PS the ability to maintain and improve the system after it has been implemented and the vendor staff is no longer on board.

Continuing, Ms. West addressed how the agency is performing against the budget. She recalled that the department started with the business process reengineering (BPR) phase in 1996. She reminded the committee the department had just over $500,000 available and reverted approximately $43,000 to the Highway Fund. She said the BPR process included reviewing processes, planning for the new organization, reviewing technology, and developing a project plan. She noted the costs included vendor contracts, travel, and computer hardware for the project team. For phase 1, which was completed during 1998, the department had just over $1 million. The department spent about $700,000 and reverted just over $300,000. She stated that in phase 1 the department laid the foundation. Ms. West said the department also developed the RFP for the technology vendor, developed the budget for the project, and started establishing how the team would approach several areas such as "base line" and training.

Ms. West said the department is currently in phase 2. The Project Genesis budget includes the core team, IS staff, hardware, software, network, contractors, travel, training development, and development by the Department of Information Technology (DoIT). She said the department is on track with the current year spending. She explained that because of the aggressive work schedule and the necessary "rework," the department will spend nearly all the budget during this implementation phase. Ms. West said costs were estimated based on anticipated needs. She added there was no other state agency to use as a model, so these were best estimates of the funding needed in each phase of the project.

Ms. West said her final testimony is a description of how the department developed the new organization in the proposed new budgets. She said page 11 of Exhibit C shows the motor vehicles branch of the department currently has two "silos," drivers’ license and vehicle registration. She called attention to the overlapping and duplication between the two divisions. She explained that each does field issuance and each has behind-the-scenes production work, such as renewal by mail and sanctions (suspension and revocation). She added each has similar compliance areas working with businesses. Ms. West noted there are also duplications in support areas, such as fiscal, personnel, and program support. The Executive Budget recommends four new budgets for the motor vehicles branch and eliminates budget account 201-4716, DMV, Drivers’ License, and budget account 201-4718, DMV, Registration. She informed the committee there is also a corresponding bill draft submitted by the Department of Administration establishing the new budgets.

Ms. West said budget account 201-4735, DMV, Field Services, was created during the last session. She explained this was the first step towards creating the four divisions proposed under the realignment of DMV. The new Field Services Division enables improved customer service by providing cross training and cross utilization, providing one-stop service for customers based on the complexity of their transaction, and enabling the department to stay focused on customer service.

Ms. West continued the current performance indicators in this area primarily address outputs, such as the number of transactions completed and the waiting times. She said that when this new division is actually formalized, it will track the number of transactions per employee, the average transaction turnaround time, and the number and causes of incomplete transactions. She added the new performance indicators would enable the department to implement further improvements and refinements in field services.

Ms. West then addressed behind-the-scenes functions, such as renewal by mail, license suspension, and title issuance. She said these functions have been formed into one new division for central services and records, called the Central Services Division. She explained this new division would enable the next steps towards cross training and cross utilization for behind-the-scenes batch processes in the department. She noted it allows for more efficient use of space and equipment in a central processing location. Most importantly, she said, it will help decrease the lines of customers waiting in field offices by providing service alternatives. Ms. West explained the department proposes that this new central services and records division would manage the enabling technology processes, such as Internet transactions and telephone transactions, because they are behind-the-scenes functions separate from field services. She noted the department has performance measures in this area to address the number of titles produced and the turnaround times. She said the department believes it can bring consistent performance measures among all these work units by locating them in one division with a common function.

Next, Ms. West addressed common functions of licensing and services to businesses that would be the proposed Compliance Enforcement Division. She said this is another area with similar functions in separate divisions. The Drivers’ License Division is responsible for licensing driving schools, while the Bureau of Enforcement and Registration has been licensing all other businesses. She noted this has led to licensing inconsistencies. She explained there would be two primary areas in this new division. The first would be compliance enforcement, which would include the investigation of licensees, vehicle inspections and appraisals, and the emission control program. The other area for this division would be audit and operational review. This would include motor carrier audit, motor carrier revenue collection, motor carrier tax licensing, and a new operational review unit for continuous improvement and consistency throughout the agency. Ms. West said this is another division for which the department currently measures only outputs. By bringing focus to these functions, the department can begin looking at outcomes and how the department could operate more effectively and efficiently. Examples would be reducing consumer complaints, managing the average time required of licensees, and managing the turnaround time for investigations.

Ms. West then addressed overlapping and duplication in support functions. She explained the proposed Management Services and Programs Division would provide focus and a single point of contact for all program-related functions. She noted this is currently difficult for the department. She named Assembly Bill (A.B.) 404 of the Sixty-ninth Session as an example.

Ms. West described this as the mandatory driver education law. She said that during the course of implementing the law there were at times five different employees assigned responsibility for seeing it through the Drivers’ License Division. She said that it was difficult to bring focus and to identify one owner for that legislation to see it through from beginning to end. She stated that by bringing management analysts and program manager staff into one area, the department would be able to overcome some of the struggles in implementing legislation and in improving existing programs. She said the department currently does not have organizational performance measures that address how the department is doing in these areas. She pointed out that by creating this division, the department would be able to assess how to improve program costs, assess time spent on development and implementation, track continuous improvement projects, track training costs and training effectiveness, and assess the division’s overall fiscal effectiveness.

Ms. West listed the four new budget accounts related to the new organization:

DMV, Field Services - Budget Account 201-4735, created by the 1997 Legislature.

Ms. West said that after DMV&PS representatives explain the other (existing) budgets submitted they will explain these new budgets.

Senator Jacobsen noted the Legislature is putting a lot of emphasis on performance indicators. He said that although the Legislature is interested in department processes, it is more interested in results, allowing for evaluation that is more effective.

Senator Jacobsen noted the positions needed for the reorganization are not in The Executive Budget and asked for comment. Ms. West responded the department originally prepared the budgets for the existing Registration Division and Drivers’ License Division. She said that, in working with the budget office, the department realized if it were going forward with realignment of the organization, The Executive budget would need to reflect the new budgets for the new divisions. She said the department prepared the new budgets with the best information available at that time, which was August 1998. She reiterated that between September 1998 and January 1999 the department selected administrators who could then take ownership and reassess the organization.

Ms. West explained that the four new administrators were only recently able to meet to review the budgets that had been submitted. More important, she said, the new administrators needed to assess the organization from the perspective of being responsible for creating and operating a new division. This work came much later than was needed to ensure The Executive Budget was correct. She said those new positions reflect the department’s concepts at this time and certainly are not a substitute for what is in The Executive Budget.

Senator Joseph M. Neal Jr. referenced the department’s proposed organization charts (Exhibit D). He asked how the department proposed the Compliance Enforcement Division, the Field Services Division, and the Central Services Division would communicate with one another, particularly with respect to storage and retrieval of records and information. Ms. West answered that is one of the benefits of an integrated database. She explained that all the information would be stored in one place, so any division has access to information necessary to do the job. For example, an investigator in the proposed Compliance Enforcement Division would be able to access and read records having to do with drivers, registered vehicles, and any licensee that investigator is working with. She said someone in the proposed Central Services Division who is processing renewals would have access to records needed for the renewal process. Ms. West pointed out all records are located in one database. She added that by designing employee profiles, based on individual needs and training levels, the necessary information would be made available to employees.

Senator Neal asked whether the objective is to have field staff input information to the system. Ms. West said everyone who works on the system will be able to input a record, whether an employee in a branch office, a central services employee, or someone in compliance enforcement working with a business record. There will be a single record with all the components attached to it for each customer. Ms. West noted the information is all in one place, but everyone who needs access can either enter data or retrieve data from it.

DMV, Drivers’ License – Budget Page DMV-29 (Volume 3)

Budget Account 201-4716

Ginny Lewis, Assistant Chief, Administrative Services Division, Department of Motor Vehicles and Public Safety, said she would present the drivers’ license budget. She stated this budget is funded from the Highway Fund. Ms. Lewis first referenced performance indicators and pointed out that many reflect zeros. She said the reason for this is that since the 1997 Legislative Session and the creation of the field services budget, indicators relating to the issuance of a driver’s license are in the Field Services budget account, 201-4735. Ms. Lewis said the indicators in this budget reflect activities remaining in the drivers’ license program; those activities are license review and driver information.

Ms. Lewis explained the revenue for this account is predominantly from the Highway Fund. She said it does include some revenue collections for photo licenses, which offset costs of the Polaroid contract, and it includes administrative charges for individuals who opt to renew their license through the mail.

Assemblywoman Chris Giunchigliani referenced performance indicators for the mail renewal program. She said that even if she refers to the field services budget, she cannot find how many were done by mail, what percentage were accurate, what the timelines were, and what the turnaround time was. She asked where that information exists. Ms. Lewis said performance indicator No. 10 in Budget Account 201-4716, DMV, Drivers’ License, reflects the number of licenses the department projects to be renewed by mail. She added that in Fiscal Year (FY) 1998 about 55 percent of the individuals eligible to renew through the mail did so. Ms. Giunchigliani noted that in FY 1998, 81,000 were projected and the actual was 100,000. She said there is no information on how many were eligible and added that would be an important performance indicator. She pointed out the budget could show the universe (the total number eligible for mail renewal), the target, and the actual. She added the department could follow up on those who were eligible to renew by mail but did not and determine why they did not. She said those things help drive a program budget and the Legislature is not looking at that. She added the information is "choppy" in terms of providing the committee actual results.

Ms. Lewis responded that Ms. Giunchigliani was correct. The performance indicators are "choppy" and for the most part reflect outputs. She added that with Project Genesis and the work involved in creating the new divisions, the Drivers’ License Division did not specifically focus on changing performance indicators to outcome measures that demonstrate program effectiveness. She said that when Project Genesis staff addresses the new divisions, new performance indicators that better capture effectiveness will also be presented. Ms. Giunchigliani commented she hoped so because throughout all the department’s budgets there is nothing to inform the committee whether additional staff or other budget requests are truly needed. She said her attitude is, if it is not justified, the department will not get it.

Ms. Giunchigliani asked for information on backlogs of vehicle titles. Ms. Lewis said Pete English would address that when he presents the Registration Division budget.

Ms. Giunchigliani referenced M-200, which recommends three new staff. Ms. Lewis said three new positions are recommended in M-200 for license review, which is the suspension, cancellation, and revocation of licenses, and three are recommended for the driver information section. Ms. Giunchigliani said her recollection is the positions were funded only through June 1999 to eliminate the backlog. Ms. Lewis said there were two positions funded by the 1997 Legislature specifically to address the backlog in license review. Ms. Giunchigliani asked whether that backlog will be eliminated. Ms. Lewis said the backlog has been reduced from 2 years to 2 months on the failure to appear notifications (FTAs) received by the department from the courts. Ms. Giunchigliani asked whether the backlog will be eliminated by June 1999 as projected. Ms. Lewis said it is her hope the backlog will be gone by the end of the fiscal year. She noted that many factors affect the backlog, such as staff being used for Project Genesis, staff being used for joint application development (JAD) sessions, and turnover, which is a constant factor in this unit. She said many factors occurred over the past year that contributed to reducing or increasing the backlog.

Senator Neal asked whether the renewal of licenses through the mail is optional. Ms. Lewis said it is. Senator Neal asked whether the number of renewal forms sent out to the drivers were the only information used to judge who is taking advantage of the mail renewal program. Ms. Lewis said that first the department looked at the number of drivers due to renew in a year, essentially a snapshot of the file. Senator Neal asked whether a document is sent out to the driver. Ms. Lewis replied it is. Senator Neal asked whether a driver is obligated to renew by mail or can choose to renew at the nearest field office. Ms. Lewis said a driver may choose to renew either by mail or in person. Senator Neal said the performance indicator in the budget reflects the number who actually renewed by mail. He questioned the value of knowing the number who chose not to renew by mail. Ms. Lewis said one of the goals of this program was to reduce the number of people having to stand in line in the field offices, and mail renewal reduces that number. The department has kept the renewal turnaround time to 3 days and hopes the drivers will see the mail renewal option as a good way to renew.

Senator Jacobsen referenced the performance indicator for license revocation actions and asked whether the number 153,057 in the budget for FY 1998 is correct. Ms. Lewis said that number reflects all the withdrawal actions taken by that unit, not specifically revocations.

Ms. Lewis indicated this decision module recommends six new positions. She said three of those new positions are for the license review section, which handles revocations, suspensions, and cancellations of drivers’ licenses. She said the 1997 Legislature funded two positions, which are scheduled to sunset at the close of FY 1999. She said the department hopes with the three additional staff, one position could be assigned to each of the three teams in the license review section. Currently, the department has team leaders in this unit, the frontline supervisors, who also carry a partial caseload. She said this caseload responsibility has detracted from supervisory duties. She testified the additional staff could better handle the workload and allow the supervisors to train staff, perform employee evaluations, monitor the work processes, and develop policies and procedures for the unit.

Senator Jacobsen asked Ms. Lewis to indicate how quickly and accurately the reviews have been handled. Ms. Lewis said this unit is the behind-the-scene unit for withdrawal actions. She added that positions were funded by the 1997 Legislature to address the tremendous backlog. She informed the committee the backlog in entering the FTA actions and taking the appropriate steps has been reduced from 2 years to 2 months. The unit has also utilized other staffing resources, such as Job Opportunities in Nevada (JOIN) and Western Nevada Community College (WNCC) to help that unit stay above water.

Ms. Lewis said the other three positions requested in this module are for the driver information section. She noted this section has not received additional staff in at least 10 years. She explained the unit is responsible for maintaining the accurate and up-to-date driver information files through data entry and microfilming of all documents used in the process. This section routinely communicates with courts, law enforcement agencies, other motor vehicle agencies, and all the statewide field offices, she added.

Ms. Lewis said the staffing in this module is scheduled to begin January 2000. She explained that the 22 percent statutory expenditure limitation in Nevada Revised Statutes (NRS) 408.235 became an issue as the department developed the motor vehicle budgets. Therefore, start dates for positions in this group are delayed from October, when new positions typically start, to January.

Ms. Lewis said this decision module recommends software needed for the optical character recognition (OCR) microfilm machines in the driver information section to bring this equipment into Year 2000 (Y2K) compliance.

Ms. Lewis said this decision module allows for implementation of digitized imaging for the drivers’ licenses and identification cards. She said there are approximately 44 jurisdictions in the country that have implemented this new technology and Nevada is one of the last, since it is still using the laminated process. She said this technology allows a person’s image and signature to be captured, displayed on a computer monitor, and stored in a database. She explained the image files could later be retrieved and used for positive identification of an individual who is applying for a duplicate driver’s license or identification card. She added most government agencies and private businesses rely on the presentation of a driver’s license and identification card to verify a person’s identity. She said it is incumbent on Nevada to implement a technology that prohibits the alteration or reproduction of such cards. She noted the funding for this technology is recommended for the second year of the biennium. This would allow adequate time for the department to complete the RFP and acquire and implement the technology statewide in all the field offices.

Mrs. Chowning said this request is very important. She related that her daughter had severe vision problems and had a Nevada Identification card. She lost her card and applied to replace it. Mrs. Chowning said that because her daughter’s signature did not match the signature of seven years ago, the agency intended to keep her social security card and not issue her an identification card, until Mrs. Chowning stepped in. She said the lack of a photo is what causes this problem. If there had been a photograph, it could have been ascertained she was indeed the same person. Mrs. Chowning acknowledged it is important to do the double-checking because of potential fraudulent activities to make sure this is the same person and not someone stealing someone else’s identification. She said she is supportive of this request and knows the need exists.

Mrs. Chowning noted she has heard that in other states the driver’s license agencies are selling people’s photos. She said Nevada wants to be sure that does not happen in this state and asked Ms. Lewis to address the issue.

Ms. Lewis responded that when the new technology is implemented, the department’s position will be that access to images of a driver will be limited to the department and to law enforcement. It is not the intention of the department to sell images to anyone, she stated.

Mrs. Chowning asked how the committee could be sure the sale of images would not occur without legislative concurrence. Ms. Lewis said if there were legislation to secure records, the department would, of course, respond. Mrs. Chowning asked whether the committee needs to take this step and prepare a bill draft request (BDR). Ms. Lewis said she would need to look at the current public record laws that govern the release of motor vehicle records. Directing her comments to Senator Jacobsen, Mrs. Chowning remarked that before the current legislative session ends, she would like to address this issue and make sure a BDR is requested if it is needed.

In follow up, Ms. Giunchigliani asked why the department would take possession of someone’s social security card. Ms. Lewis responded the department currently maintains the social security number on the database. She said it is up to the individual to choose whether to have the social security number placed on the driver’s license, but an applicant is required to show the social security card upon issuance of the driver’s license. Ms. Giunchigliani said Mrs. Chowning’s statement was the department wanted to take possession of the social security card. She emphasized the card does not belong to the department and should not be taken from an individual. Ms. Giunchigliani added it is not a form of identification the state should count on.

Assemblyman Bob Price said he thought if a person did not want to give a social security number, or did not have one, the department would then issue another type number. He said Nevada does not absolutely require a social security number to license a person to drive. He added there are adults who drive and for various reasons do not have, or choose not to provide, social security numbers. Ms. Lewis responded if an individual does not have a social security number, the person must complete a disclaimer form and the department then issues an "X number." Mr. Price asked what happens when the person has a social security number, but does not want to provide it. Ms. Lewis responded that when the person has a social security number, the department enters the number into the database. She added the customer does have the option of whether the number appears on the driver’s license.

Ms. Giunchigliani said she recently dealt with this issue and discovered a social security number is still required, by statute, for a driver’s license, but this requirement may not be appropriate. She stated Nevada might need to revisit that issue. She added there are individuals who either do not have a social security number or would refuse to provide it. She remarked the department could be taken to court if the issue were pursued and would probably lose the issue.

Ms. Giunchigliani asked whether the current fee charged each driver for the cost of the photo license is $1. Ms. Lewis said it is. Ms. Giunchigliani said this digitized imaging is a high-cost request and asked what the projected fee increase is for the additional cost. Ms. Lewis said the department projects the cost per card for this new process to be $2.11. She added this would include the basic card and two levels of security. Ms. Giunchigliani asked whether the increased fee will pay for the program. Ms. Lewis said The Executive Budget reflects an increase in revenue from the Highway Fund to cover the cost of the digitized photo technology. Ms. Giunchigliani asked what increase to the fee would be needed if there were no increase in revenue from the Highway Fund. Ms. Lewis said it would be no more than $3. Ms. Giunchigliani asked Ms. Lewis to provide a budget revision with the additional cost being met by an increase in fees to the cardholders rather than the Highway Fund so the committee will have both options to consider. Ms. Lewis said she would provide the budget revision.

Ms. Giunchigliani asked whether the request for replacement computer equipment is a duplication of computer equipment being replaced under Project Genesis. Ms. Lewis responded there are three replacement computers in this decision unit for administrative support positions and a motor vehicle Safety Coordinator position. She testified the computers were recommended in this budget because they are not within the scope of computers being purchased through Project Genesis. Ms. Giunchigliani suggested the department review this request in light of the testimony provided by the department that all computers were being replaced under Project Genesis. Ms. Lewis said the department will review the computer equipment request and if there is duplication the request will be withdrawn.

Ms. Lewis noted that throughout this budget computer equipment is requested to correspond with any new positions recommended.

Senator Jacobsen asked Ms. Lewis to comment on the E-900 decision unit series. Ms. Lewis responded that the "transfer modules" essentially represent the dissolution of this budget account and reflect the transfer of all staff and associated costs to the new budgets.

DMV, Motor Carrier – Budget Page DMV-41 (Volume 3)

Budget Account 201-4717

Pete English, Chief, Registration Division, Department of Motor Vehicles and Public Safety, said this budget is a Highway Fund account that supports the Motor Carrier Bureau of the Registration Division. This bureau licenses all commercial vehicles over 26,000 pounds, licenses all vehicles with apportioned registrations, collects taxes on special fuels from special fuel users, suppliers and dealers, and conducts audits of motor carriers, special fuel users, suppliers and dealers. The bureau also administers the International Registration Plan (IRP) and the International Fuel Tax Agreement (IFTA) for the state of Nevada.

Mr. English said this decision module recommends that two Program Assistant positions become permanent positions within the Motor Carrier Bureau. He explained the two positions are currently scheduled to "sunset" June 30, 1999. He said staff in these two positions have identified approximately $1.4 million in discrepancies and have collected net amounts of $855,000 in one schedule and just over $500,000 in another.

Mr. English said this module recommends an additional revenue officer be located in Las Vegas. He testified approximately 50 percent of motor carrier collection activities occur in the southern region of the state. He noted there is no revenue officer in that location. He said this position is requested for the Las Vegas office and would be responsible for collecting and processing delinquent payments and providing related services.

Mr. English said this module recommends funds for the Lockheed Martin contract and the administration of the IFTA agreement and IRP software. He testified this request does not include enhancements to those programs, just funding for the contract.

E-175 Improved Work Environment – Page DMV-44

Mr. English said this module recommends a Management Analyst position to oversee the development and operation of various spreadsheet and database programs used by the Motor Carrier Bureau. He explained that users currently maintain these programs and it is not an effective or efficient use of their time. He said this position would be better able to serve those programs.

Senator Jacobsen noted E-175 recommends Highway Fund support of travel that was previously funded by a federal transportation grant and asked whether this travel can continue to be paid from federal transportation grants. Mr. English responded that the grant the department had in the past is no longer available. Senator Jacobsen asked whether there is any indication there will be grants available in the future. Mr. English responded there are none he is aware of.

Mr. English said this module recommends replacement of miscellaneous office equipment totaling $3,056 the first year and $900 the second year. He added this module mistakenly includes replacement cost for two vehicles for a total of $37,337 during the first year of the biennium. He explained the Motor Carrier Bureau has never been funded for vehicles and this request should be under E-720 for new equipment.

Clay Thomas, Assistant Chief, Registration Division, Department of Motor Vehicles and Public Safety, called attention to the performance indicators for out-of-state field audits, in-state field audits, and desk audits. He noted a correction, explaining the indicators for FY 1998 listed in The Executive Budget reflect data through April 1998 and do not include the last 3 months of the fiscal year. He said the numbers have been corrected, however, in the expanded program narrative. He said 641 audits were conducted in FY 1998. Mr. Thomas indicated analysis of performance indicators for the audit section reveals the department exceeded FY 1998 projections. He added that FY 1997 and FY 1998 actual audit counts are very close and should be used as a base-line measurement. He said the out-of-state audits are projected to remain constant at 24 per year based on the funding recommendations of The Executive Budget. He stated it is the intent of the Motor Carrier Bureau to increase the number of desk audits, but this would depend on other IRP and IFTA jurisdictions providing Nevada with the required information. He testified that an internal goal for the bureau is to increase in-state audits by approximately 10 each year. He said this goal is predicated on the retention of audit staff whose experience and expertise will increase productivity. He said, however, the bureau has had problems in the past retaining experienced and trained auditors.

Senator Jacobsen noted fuel taxes have been a problem and Nevada "never reaches a panacea." He referenced the fuel tax refunds and asked for explanation of the increase in the refund amount. Mr. Thomas explained the projected increase in refunds is based on the average increase over the years. He said frequency is also a factor as the number of motor carriers increases.

Senator Jacobsen asked whether the department is currently experiencing any problems in collections. Mr. Thomas responded there was an audit in 1987 commenting on the lack of money collected by the Motor Carrier Bureau. At that time $1,303,859 was identified as the amount due and not collected. He said the department has since reduced that balance to $582,526 for 16 accounts. He explained that 12 are in bankruptcy and the other 4 have been submitted to the Office of the Attorney General to proceed with the collection process. He noted that from January 1, 1997, to February 2, 1999, the collection rate for the Motor Carrier Bureau was 92 percent.

Senator Jacobsen noted that is not a bad collection rate and asked whether the 12 in bankruptcy are uncollectable. Mr. Thomas said the department is not giving up yet. He said with the recommended additional revenue officer position, the department hopes the unit can better track the information from bankruptcy trustees. Right now, the trustee is sometimes remiss in getting the information to the department, which is needed to go forward. If the department gets the position requested, when all positions are filled it will be able to track the bankruptcies better and take steps to collect the money.

Senator William R. O'Donnell said the Senate Committee on Transportation heard testimony the Registration Division had produced as many of the Tahoe license plates as it could. He explained the way the funding mechanism works is that the Legislature authorizes a certain expenditure amount, and once the division reaches that amount it cannot make additional plates because the account is not replenished. He noted the Highway Fund benefits financially from the license plate revenues. He added that although the fire department license plate was approved by the Legislature at the last session, none have been made because the department does not have the money to make the plates. The senator said the transportation committee asked for a bill draft to correct that financial situation. He asked Mr. English whether the department has developed a formula or a recommendation for the bill draft. Mr. English replied staff is compiling language as requested to create an enterprise account for the license plate factory. Senator O'Donnell said it is important for this committee to be aware that, although the transportation committee approves license plates, the finances are not there for the department to make those plates. He added that the whole group of firefighters was disenfranchised because they could not get their license plates.

Ms. Giunchigliani returned to the issue of the special fuel tax audits. She noted a decrease in the number of special fuel tax audits from 200 retail stores to approximately 80 and asked why the audit positions are needed. Mr. Thomas asked for a page reference and Ms. Giunchigliani referenced M-200 on page DMV-42.

Ms. Giunchigliani, to provide history, said that in 1995 the Legislature changed the point of taxation from the retail level (gas station) to the rack level (distribution). In 1997, the department requested audit positions not be eliminated because it was the department’s intent to increase fuel tax-evasion detection activities. In addition to leaving the audit positions in the account, two program assistant positions were authorized to reconcile the monthly reports. Ms. Giunchigliani said the additional positions were supported by a plan provided by the department to implement fuel tax-evasion detection activities. She indicated there were five tasks in the plan and only one has been completed. She added the department is now requesting additional positions although there is a decrease in the number of retail store audits.

Mr. Thomas responded that M-200 recommends the continuation of two program assistant positions, not auditor positions. He said when the law changed the point of taxation, the number of reports did, in fact, decrease. He explained that under the old law the retailers only had to report on one schedule. Changing the point of taxation increased the number of schedules from 1 to 11 for each entity. Mr. Thomas said the department requested the two program assistant positions to eliminate the backlog and to track the program activity. He said that since the two program assistants have come on board there has been high turnover, partly because the positions were to sunset and the incumbents were unsure whether their positions would continue. He said Mr. English testified earlier the program assistants have collected over $1.3 million but have not completely eliminated the backlog. He said that function is still 10 to 12 months behind.

Mr. Thomas responded to Ms. Giunchigliani’s comments regarding the fuel tax-evasion plan and the activity report. He said there were five areas: the shared information with the Internal Revenue Service (IRS), the audit refund requests, supplier reconciliation, the dyed diesel enforcement, and the motor carrier education.

Regarding the goal of shared information with the IRS, Mr. Thomas reported that some tasks have not been completed due to changes in personnel in the department and in the IRS. He said the department has, however, signed an agreement on the coordination of tax administration with IRS and an addendum to the agreement recently required by the IRS has been forwarded to the disclosure office in Phoenix for signature. He noted that until the IRS has signed the addendum and reviewed the department’s safeguard procedures, the department is not able to share the information. The security methods for receiving correspondence have been set up and once the department and IRS begin sharing information the department will reevaluate the benefits. Mr. Thomas said a meeting is scheduled on March 16, 1999, for the IRS to evaluate the department’s security system.

Mr. Thomas testified the audit refund requests have been completed. He said the original concept was to target the nontaxable requests, but the department decided all refund requests over $5,000 should be forwarded to the audit section for review and possible audit. He stated the department has developed and implemented an auditing procedure for those requests. He added the department has also included these statistics in the internal monthly breakdown of audits and this report is used for performance indicators.

Mr. Thomas said procedures were drafted for the supplier reconciliation project following approval of the program assistant positions. He added the department reviewed the data collection requirements with the Nevada Department of Transportation (NDOT) and has supplied NDOT with monthly reports. He said baseline measurements include completion of 5 reconciliations a month. He explained the goal was to have the backlog caught up within 6 months but that has not occurred and the unit has a 10- to 12-month backlog right now. He reiterated the number of required schedules from each entity increased from 1 to 11 after the change in point of taxation.

Ms. Giunchigliani asked whether the increase from 1 schedule to 11 is the reason for the remaining backlog. Mr. Thomas said that is what contributed to the department’s request for the additional positions.

Ms. Giunchigliani referenced the number of audits represented in the performance indicators in The Executive Budget. She said that, as with other performance indicators the department presents, these do not reveal anything. She explained that performance indicators need to include the universe (the total number of audits due, versus those actually done). She added both numbers should be broken out by type of audit. She said the approximate amount of time required to perform audits would also be important information. Ms. Giunchigliani explained this is the type of information the Legislature needs to determine staffing needs. She requested the department to rework the performance indicators and provide them to LCB fiscal staff so the committee can make informed decisions. She said it is the committee’s desire to address backlogs, and over the past few years the Legislature has made efforts to do that for DMV&PS but the justification has not been there.

Senator Jacobsen asked what the major problem is in the Motor Carrier Bureau, if any. Mr. English responded the Motor Carrier Bureau operates smoothly. Senator Jacobsen asked whether staffing is adequate. Mr. English said if the recommended positions are approved the bureau will certainly be able to improve performance, but in terms of problems, the bureau operates smoothly. Senator Jacobsen asked whether the facilities are adequate. Mr. English said the Carson City office is currently undergoing a remodel, so staff are in cramped quarters at this time. He said things will be much better when the remodel is completed and staff are in permanent quarters.

Mrs. Chowning asked whether there would be sufficient space for all the requested new positions after the remodel. She also inquired how much of M-200 is for license plate material. She referenced E-175 and noted a motor carrier software interface is being requested and asked why this is separate from Project Genesis.

Mr. English responded he believes there will be adequate space for the additional staff with the remodel. He said the license plate material is requested in M-200 because the Motor Carrier Bureau issues apportioned license plates to motor carriers and the bureau pays for the materials for those plates. He asked Ms. West to come forward to respond to the question related to Project Genesis.

Ms. West said nearly the entire motor carrier program was originally outside the scope of Project Genesis because the Motor Carrier Bureau has been satisfied with the service provided by its existing contract with Lockheed Martin. She said that during the design process the department considered including motor carriers who operate only in Nevada ("100 percent Nevada’s") in Project Genesis as well as the revenue for motor carrier. She said that at the IFC subcommittee meetings the department presented all the additions and deletions. One of the deletions was when the Motor Carrier Bureau opted out of putting "100 percent Nevada’s" on the Genesis system. She explained the Motor Carrier Bureau chose to keep its entire application on Lockheed Martin. She added the bureau chose to develop that application with its existing vendor, rather than have part of its application on Lockheed and part on Genesis. She noted there is a link and Motor Carrier Bureau staff are able to access the Genesis application.

Senator Jacobsen noted some of the time frames for Project Genesis were not met and asked for an explanation of the failure to meet deadlines on the organizational piece. Ms. West indicated the department started the process of identifying administrators over the summer of last year, and this took a while to accomplish. All the administrators were not identified until January 1999. While the DMV&PS hoped to have the administrators on board to help build the budgets for the new divisions, the department was not able to have that staff in place. That is the reason for meetings with LCB and budget staff at the end of January. The department looked at the organization again and produced the "color" organizational charts (Exhibit D). Senator Jacobsen noted the reorganization has been difficult for LCB staff to track because it was received late.

DMV, Registration – Budget Page DMV-47 (Volume 3)

Budget Account 201-4718

Mr. English testified this is a Highway Fund account that supports the Registration/Title Bureau and programs within the Bureau of Enforcement. He said that through the Registration/Title Bureau the Registration Division registers and titles vehicles, manufactures license plates, and issues special handicapped plates and parking placards. The Bureau of Enforcement regulates the automotive industry, investigates violations, and enforces laws and regulations. Mr. English said the Registration/Title Bureau and the Bureau of Enforcement have not requested any new programs in this budget.

Senator Jacobsen noted this decision unit recommends a new Investigator position and asked Mr. English to discuss the need for the position. Mr. English said this pertained to an investigator position requested for the Elko office. Upon further evaluation of the needs of the investigative program, the department is recommending this position request be deleted.

Senator Jacobsen noted there are five positions recommended in M-200 and asked whether the positions are part of the Project Genesis reorganization. Mr. English said the positions are not part of the Genesis reorganization. Senator Jacobsen asked for justification for the positions. Mr. English responded there is a request for a Driver/Warehouse Worker for the license plate factory. He said under current operations there are only two positions at the factory. He explained that when staff make deliveries throughout the state, production is virtually shut down. He added the recommended driver/warehouse worker would allow production to continue while deliveries are being made.

Mr. English said another position recommended in M-200 is the DMV Technician position, which is part of the "titles" program. It is reflected as a human resources position in The Executive Budget because it is a supervisory position, provides direction, and evaluates employee performance. This position currently exists but is due to sunset June 30, 1999, and the department is requesting the position become permanent.

Mr. English informed the committee there are two positions recommended for the Bureau of Enforcement. These Program Officer positions are requested to provide training to the automotive industry and to provide consumer information and training. One is for Reno and one is for Las Vegas to allow statewide coverage.

Russ Benzler, Assistant Chief for Bureau of Enforcement, Registration Division, Department of Motor Vehicles and Public Safety, testified regarding the investigator position recommended for Elko. He said it was requested in part to provide coverage in the Elko office during leave time. He explained the existing investigator position in the Elko office supervises a motor vehicle appraiser, an inspector, and an office staff worker. Under that arrangement, he said, any time any staff is gone the investigator must provide coverage. A significant portion of his time has been expended on supervisory duties. Mr. Benzler said the division has decided to transfer the supervision of the other positions to the Field Services Supervisor position in the Elko office. This would free up the investigator for investigations and negate the need for the recommended new investigator position.

Mrs. Chowning directed attention to the parking-fine revenue program. She noted it was intended to provide added financial support to DMV&PS. She said it was legislative intent for DMV&PS to collect parking fines and be paid a certain amount by the local jurisdictions for the service. She pointed out there appears to be a shortfall. She asked how the program is doing, how many courts have signed up for the program, how much revenue is expected, what the department is doing to encourage participation in the program, and whether the program is worthwhile. She added that if this program is not successful, maybe this is not a proper form of funding. She asked Mr. English to address this issue.

Mr. English explained the parking violation program was approved at the 1995 Legislative Session to create an opportunity for courts to collect on unpaid tickets by placing a stop on registration of vehicles for which the tickets were issued. He noted this is an elective program for the courts, which are not mandated to participate. He said that at the inception of the program, there were two courts which enrolled. Because of lack of enrollment the anticipated revenues were not realized, Mr. English continued. He pointed out the projected revenues were built into this budget and since the revenues were not realized, there is a budget shortfall. The department has initiated an aggressive campaign and has contacted district and municipal courts, airport authorities, and universities. Mr. English stated that at this time, the department has received interest from several other jurisdictions and there may be additional enrollments. He noted the city of Henderson just recently came on-line and is the third court system to enroll.

Mrs. Chowning asked how successful the program has been for the courts that have signed up. Mr. English said it has been extremely successful for the courts. He explained that for each dollar invested in the program, the city of Las Vegas received a 2000 percent return.

Senator Jacobsen asked how many local governments participate. Mr. English responded the city of Las Vegas, the city of Reno, and the city of Henderson currently participate.

Ms. Giunchigliani noted the department completed the programming changes necessary to implement the program through use of a loan of over $300,000 from the Central Repository for Nevada Records of Criminal History (criminal history repository) that has not been repaid. Mr. English responded the loan was $159,000 and acknowledged it has not been repaid. Ms. Giunchigliani clarified there is a shortfall of $316,000, overall. She said it is good the courts are collecting, but this program is not benefiting the state; it has only generated about $10,000 in revenue. She asked whether this program should be eliminated. Mr. English responded this program is not cost-effective for the state. Ms. Giunchigliani asked what the impact would be on the local jurisdictions if the program were deleted. Mr. English said the local jurisdictions would have to revert to their previous methods of collection. He added the local jurisdictions initiated the legislation because they were having trouble collecting parking fines.

Mr. English described how the program works. The court of jurisdiction notifies DMV&PS of the outstanding parking ticket and the amount of the fine. The renewal notice sent to the registered owner of the vehicle includes notice of the outstanding parking ticket or tickets and the amount of fine owed to the court. The owner is instructed to go to the court to pay the fine. DMV&PS does not collect the fine. Once the individual has paid the fine, he or she provides DMV&PS with a receipt proving the fine has been paid. The vehicle is then registered.

Ms. Giunchigliani asked why the local jurisdictions would have to change their procedures and would not be able to continue to notify DMV&PS, which would continue to include notification in the renewal mailing. Mr. English said that could be done, but the difference would be the department would not stop registration of the vehicles as is currently required. The process requires the department to input data into the database, which is why there is a fee to the courts.

Ms. Giunchigliani asked whether DMV&PS is charging the courts enough to offset the costs. Mr. English said the difficulty with the program is that it was based on funding up front which was untested. He explained it was built into the operating budget with no backup revenue to support it. Ms. Giunchigliani asked what the state would need to charge the courts to be able to repay the loan and cover the costs of the program. She reiterated if the courts are collecting 2000 percent of their investment, the state should be getting "a piece of that pie" for setting up the program. Mr. English explained the department has created temporary regulations, in effect through this session, that enable the department to charge the courts $5 for each transaction. He noted the $5 fee would be charged each time the court submits a transaction to the department and each time it withdraws a transaction, or $10 a parking ticket. Ms. Giunchigliani asked for the revenue projections with the new regulations. Mr. English said that based on the lack of participation at this point, the department has not projected any revenue. Ms. Giunchigliani said the courts are getting their money back by going through DMV&PS, which stops the registration. She asked whether the $5 per transaction fee is in place now. Mr. English responded the original fee was $1.

Ms. Giunchigliani pointed out the state undercharged the courts and asked how the state can recoup that money and repay the criminal history repository. She also asked what the state should charge to offset costs. She requested the department to develop a proposal to recoup costs to get this program up and running on its own revenue. She noted the plan could take up to a biennium to recoup the costs. Ms. Giunchigliani said the committee needs a plan to repay the loan and to properly charge the courts. She indicated the courts should cooperate because they would not otherwise have this income. Mr. English said the department would provide that proposal.

Assemblyman Price asked how much parking tickets are and whether they are the same in every jurisdiction. Mr. English said he does not have that information, but he thinks the fee structure is established by each jurisdiction. Mr. Price noted that if the transaction charge is not significantly less than the local municipalities’ parking ticket fees, it will not be worthwhile for them.

Senator Jacobsen noted this module includes recommendations for investigative travel and for travel for staff to appear before the Legislature. Mr. English acknowledged there is a recommendation in this decision unit for additional travel for Bureau of Enforcement supervisory and management staff. He said this request is based on the need for management staff to participate in staff meetings, to meet with their staff and review and evaluate programs, to meet with licensees, to meet with local government officials, and to meet with local law enforcement entities. He added there is occasional need for the southern region manager to travel to Carson City to participate in the legislative sessions.

Senator Jacobsen asked whether the "train the trainer" program is working effectively. Mr. English responded there are certified trainers in both the northern and southern regions that provide training to staff. He added the program also utilizes training services from other agencies if the bureau does not have certified trainers in a particular subject area. He said that, for example, counterparts on the public safety side of the department frequently provide training for the bureau. Senator Jacobsen asked whether there is a lack of training or trainers. Mr. Benzler indicated there is a problem with some of the investigators getting the in-service training, such as the Peace Officers Standards and Training Committee (P.O.S.T.) mandatory training and defensive tactics training. He said that in this budget the department has requested travel and money for in-house trainers so employees do not have to wait for another agency to have an opening.

Continuing with the discussion on training, Ms. Giunchigliani asked whether the investigators in the Bureau of Enforcement participate with the Nevada Division of Investigations (NDI) in their training. Mr. Benzler responded they do and an example is the training in defensive tactics referred to earlier. He said the bureau investigators sometimes participate in training with the Nevada Highway Patrol in Reno and Las Vegas, with the Las Vegas Metropolitan Police Department (Metro), and with P.O.S.T. if class schedules allow for it.

Ms. Giunchigliani stated that since Nevada has a training academy (P.O.S.T.), it seems duplicative and expensive for every budget to have a peace officer training unit. She asked for an organizational chart showing all the training positions and a report of who attended what training.

Senator Jacobsen asked whether anyone in the department has a seat in the P.O.S.T. Academy. Mr. Benzler responded the Bureau of Enforcement does not have a seat, but the department does.

Mrs. Chowning asked whether a BDR is needed to address the funding mechanism for the special license plates. Mr. English said he believes Senator O'Donnell, as chairman of the Senate Committee on Transportation, is addressing the issue with amendments to Senate Bill 67 to create an enterprise fund for the license plate factory for the special issues.

Ms. Giunchigliani referenced the license plate materials category in the base budget. She said the work program for FY 1999 is $938,804. She asked whether this entire amount is for production of license plates. Mr. English replied that category is for raw materials. Ms. Giunchigliani asked whether the department has spent all the money. Mr. English replied the department has spent all or nearly all of it. Ms. Giunchigliani asked Mr. English to provide a report of actual expenditures. She noted that in FY 1998 the department only spent $859,423 on raw materials. She also noted the work program amount for FY 1999 is $938,804, yet the amount the agency requested in the base is back down to about $895,000 for the next two years. She asked what the agency request is based on.

Mr. English explained the requested amount is based on the Tahoe plates because the department took "a big hit" on that. Ms. Giunchigliani asked whether the department’s testimony is that there is a funding problem or a revenue problem and whether the department is collecting enough money to pay for this. Mr. English said his testimony is that it is a funding mechanism issue. He said the funding is there, but it is not available to the production plant, which operates according to the legislatively approved budget. He added that once the amount in the budget is expended, there is no opportunity to appear before the Interim Finance Committee (IFC) for additional funds from the Highway Fund.

Carol English, Budget Analyst, Budget Division, Department of Administration, explained the department gets a portion of the revenue from the plates and the rest is deposited into the Highway Fund. She further explained an appropriation is provided to this budget to cover the cost of those plates. If that appropriation is depleted, the agency has no more funding to make more plates.

Ms. Giunchigliani asked whether the legislation being discussed includes a provision that the department would not be able to spend more money than the revenue it generates for the Highway Fund from the sale of the plates. Ms. English said she has not been present during discussions of the enterprise fund. However, she said, the way it typically works is that all or part of the revenue from the plates which now goes to the Highway Fund would go into the enterprise fund. It would become a self-supporting unit. Presumably, if the revenue exceeded the cost of making the existing plates, there would even be sufficient resources in that fund for additional special plates requested.

Ms. Giunchigliani said Senator Valerie Wiener, Clark County Senatorial District No. 3, proposed that DMV&PS be authorized to approve special license plates by regulation. If that were to happen, the Legislature would not have to deal with it every session. Ms. Giunchigliani asked whether there has been a bill introduced to that effect and whether the department has reviewed it. Mr. English replied Senator Wiener’s bill is S.B. 67, which he referenced earlier. He explained the Senate Committee on Transportation is considering an amendment to S.B. 67 to provide for an enterprise fund.

Ms. Giunchigliani asked whether there would be a sunset clause so plates that are not often requested would be eliminated. Mr. English said it already exists. He explained if the requested plate does not achieve the 250 applications within 4 years, it is eliminated. Ms. Giunchigliani asked Mr. English whether her understanding is correct that the department cannot access the money which has been deposited into the Highway Fund for making the additional plates. Mr. English said that is correct.

Mrs. Chowning reaffirmed there is a problem by expressing that the Lake Tahoe plate has been highly successful with almost 10,000 orders. She said the firefighter plate would have generated lots of money if it could have been produced. She stated there will be an infusion of dollars if the amended S.B. 67 is passed, which would allow the plates to be produced and Nevada citizens to buy the plates. She asked why supplemental funds have not been requested during this session. Mr. English responded the request has been made in a onetime appropriation request. Senator Jacobsen asked for the bill draft request (BDR) number. Carol English indicated she did not know the BDR number but would find out and notify the committee.

DMV, Verification of Insurance – Budget Page DMV-69 (Volume 3)

Budget Account 201-4731

Mr. English said this is a self-funding account, consisting of special purpose funds for the verification of liability insurance for motor vehicles registered in Nevada. He said the requests in this account are minimal.

Mr. English stated this decision unit provides for additional in-state travel for staff from the insurance verification program to conduct meetings with the insurance industry.

Mr. English said this decision unit provides for the replacement of worn and unsafe chairs.

Senator Jacobsen asked how effective the insurance verification program is. Owen Ritchie, Assistant Chief, Registration division, Department of Motor Vehicles and Public Safety, said the insurance verification program is very effective. Currently the unit is capturing 100 percent of all insurance terminations. He added this allows the program to identify one out of two persons who do not have insurance, while in the past it could only identify one out of four.

Ms. Giunchigliani recalled there have been some difficulties in the past with vehicle identification numbers (VINs) when there was a different name on the insurance documents than on the registration. She said that sometimes the department issued notices reflecting no insurance when in reality there was insurance. Mr. Ritchie replied that if someone changes from one insurance company to another, that company sends the insurance verification program a termination notice. At that point, program staff have no way of knowing whether that person has purchased insurance with another company. He explained that when there is no corresponding notification received by the insurance verification program of new or renewed insurance within 7 days, the program sends a request for proof of insurance coverage. If the individual responds and proves coverage within that 7-day period, there is no further action. If the person has not purchased insurance within those 7 days, the license is suspended.

Ms. Giunchigliani asked what could be done to clean up the inaccurate-match potential. Mr. Ritchie said much of the problem has already been alleviated and the new integrated system will improve it even more. He said the only way the program could improve significantly would be to identify 100 percent of all persons without insurance, rather than 100 percent of insurance terminations. Ms. Giunchigliani asked whether the Project Genesis system would recognize the fact that different spouses have different names and be able to match insurance and registration in different names. Mr. Ritchie said there would be a match on the integrated database because the system would know the name of every driver of a registered vehicle.

Ms. Giunchigliani asked what program would be implemented to reduce the number of uninsured motorists. She also asked whether the number of uninsured motorists is exaggerated because of the past inability to match different names for insurance and registration. Mr. Ritchie reiterated the program identifies 100 percent of the terminations, but that does not identify 100 percent of the people without insurance. He explained some people buy vehicles and do not purchase insurance to start with. Until those drivers register the vehicle, the program does not know whether they have insurance. He said people also trade vehicles without notifying insurance companies and this will result in a failure to match. He said those are examples of program problem areas that could be addressed if there were enough staff, but right now the staff are concentrating on terminations as requested by the last Legislature. He said program staff have done that and are now detecting 100 percent of terminations.

Ms. Giunchigliani asked whether a person is required to notify the insurance verification program that insurance is transferred from one vehicle to another when that person purchases a new vehicle and trades one in. She also asked whether the department continues to carry the trade-in as registered and insured if the driver does not know to do that. Mr. Ritchie responded that it does, until that person registers the new vehicle. He explained the department will at that time require proof of insurance and the person must contact the insurance company to transfer the insurance from one vehicle to another. The driver then presents the proof of insurance to the department.

Ms. Giunchigliani asked whether there are timelines required for insurance companies to forward that information to an individual to be able to register within 10 days and whether there is any penalty for the insurance company. Mr. Ritchie said insurance companies have until the next monthly reporting period, which could be 30 to 40 days. Ms. Giunchigliani asked whether it would help to have shorter time frames spelled out in statute to give the department more authority. Ronald Hood, Analyst, Insurance Verification Program, Department of Motor Vehicles and Public Safety, responded there is a time frame in the Nevada Revised Statutes. He added there are penalties in place if insurance companies do not comply. Ms. Giunchigliani asked whether the statute allows 40 days. Mr. Hood said it depends on when the insurance company receives the information. For example, if a new car were purchased towards the end of the month, the insurance company would be allowed to report after the 15^th of the following month. He explained that with the new process through Genesis, it could be as soon as one business day because insurance companies will be able to submit the information electronically. Ms. Giunchigliani stated she does not want a person to be caught in the 10-day time frame waiting for paperwork from the insurance company.

Ms. Giunchigliani asked whether there is still the option of signing a form declaring insurance and providing the proof later. Mr. Hood said the department currently accepts the proof of insurance card, which would be available right away. Again, with the Genesis program the time period of 30-40 days will probably be reduced to fewer than 10 days. Ms. Giunchigliani asked whether the department would make regulatory changes requiring insurance companies to meet shorter time frames. Mr. Hood said he agreed with the need to do that. Ms. Giunchigliani asked whether the state has ever fined an insurance company for violating the time requirement. Mr. Hood said it has. Ms. Giunchigliani asked whether the state ever collected on those fines. Mr. Hood replied the insurance commissioner has collected fines.

Senator Jacobsen asked whether the office has the ability to obtain insurance information around the clock. For example, if the Nevada Highway Patrol calls to see whether a person is the owner of a car, can he access insurance information at the same time? Mr. Ritchie said when an officer does a record check on registration, it is flagged that there is an insurance suspension or mandatory insurance problem (MIP).

Mr. Price asked whether Nevada has provisions to not have to pay insurance and registration when a car is inoperable for multiple months or years while being renovated. Mr. Ritchie said the best thing for a person to do is turn in the license plates during that period and insurance would not be required. He added that when the vehicle is ready to drive, it should be reregistered and reinsured. He explained that if a person has not turned in the license plates but kept receipts to prove it has consistently been in the shop, there is a "vehicle under repair" consideration.

Mrs. Chowning said that at the last session the committee asked the department to refund money to people who requested the refund because they had been fined for not turning in the verification of insurance form. She asked how much was refunded to the taxpayers. Mr. English responded there were 1,072 refund requests and 870 approved refunds totaling $77,956.

DMV, Salvage Wreckers/Body Shops – Budget Page DMV-64 (Volume 3)

Budget Account 101-4690

Mrs. Chowning noted there were two positions in this budget and one recommended to be eliminated because it has been vacant. She asked the department to provide LCB staff with information on the reason the position was left vacant and justification for keeping the position. She said it is her opinion it is not possible to provide statewide investigation and compliance of the salvage wreckers and body shops with just one position. Mr. Benzler said the department will provide the requested information

DMV, Motor Vehicle Pollution Control – Budget Page DMV-73 (Volume 3)

Budget Account 101-4722

Mr. English said this is a self-funded account, consisting of special purpose funds for licensing and regulation of the emission control industry and for administration of vehicle emission and air quality programs.

Mr. English said this module provides for one DMV Technician in Clark County to work exclusively with the smoking-vehicle observation program. It also provides for four Visible Smoke Enforcement Program Officers in response to a legislative letter of intent.

Ms. Giunchigliani commended the department for acknowledging during the last legislative session that the smog control program was not working and should be eliminated. She noted, however, the current plan does not seem much different. She said that while Nevada must do something about pollution control, this is not the answer. She added that from a scientific standpoint, the pollution caused by visible polluters is statistically insignificant and having several people stopping cars and issuing citations is not the answer. She recalled Nevada had piloted a project to repair older vehicles for people with low incomes. She said if that project was successful, it might be a more appropriate emphasis for this budget than putting "smog buster cops" on the street.

Jim Parsons, Program Manager, Vehicle Emission Control Section, Registration Division, Department of Motor Vehicles and Public Safety, responded the department had funded a program with Clark County Health District as a pilot repair project. He said that program has not gone well up to this point. He explained there was only a 10 percent response to the letters the department sent out to potential participants. Mr. Parsons explained most of those vehicles did not qualify or had already been repaired. He estimated that only 19 vehicles had been repaired to date.

Mr. Parsons said the department is considering modifications to the way the program is advertised and is changing the program to try to make it work better. Ms. Giunchigliani asked at what age a vehicle becomes exempt. Mr. Parsons answered the department tests cars made in 1968 or later. Ms. Giunchigliani asked whether "scaling the age of the car back to capture more cars" had been considered. Mr. Parsons responded statistical information indicates the worst cars are in "the middle 10 years." The department does not test until the car is on its third registration cycle. He said cars are statistically the "dirtiest" the 10 years after that. He stated he could provide information on the Clark County program and Ms. Giunchigliani asked him to do that.

Ms. Giunchigliani voiced her opinion that it makes sense to encourage larger employers to provide for satellite parking. She said that upon application for new construction of hotels, for example, local jurisdictions should only grant a certain number of parking spaces immediately adjacent to the facility. They should require the facility to provide satellite parking in an outlying area and then bus the people in. She said alternative transportation modes directly relate to pollution control, but there is a tendency to focus instead on the vehicle on the street. Ms. Giunchigliani indicated concern about being able to stop a car because the exhaust looks dirty. She said she is not convinced this proposed program would provide results. She added the committee and the department could look at the information from the Clark County program and discuss ideas. One possible decision would be to not move forward in this one area again this session, she remarked.

Senator Jacobsen mentioned there is a bill to exempt certain older cars the Senate Committee on Transportation will be hearing.

Mr. English said this decision module provides additional out-of-state travel to enable the environmental staff to participate in technology conferences and additional in-state travel to participate in air quality meetings. Many of these meetings take place in southern Nevada and the staff is located in northern Nevada.

Mr. English said this decision module provides for replacement vehicles. He testified the department is evaluating these requests and will be working with LCB staff in making amendments.

Mr. English said this decision module also provides office furnishings, new testing equipment for the emission laboratories, and workstations for the Sahara laboratory in Las Vegas.

Senator Jacobsen asked whether the department has had or anticipates having problems with enforcement by persons who stop drivers and are not licensed peace officers. Mr. Benzler said the employees stopping vehicles for the Visible Smoke Enforcement Program (VSEP) would be Category 1 certified peace officers.

Brian L. Jennison, Ph.D., Director, Air Quality Management Division, District Health Department, Washoe County, spoke in favor of the Visible Smoke Enforcement Program on this aspect of the budget. He testified that in Washoe County on-road vehicles account for 66 percent of carbon monoxide emissions and nearly 50 percent of ozone-precursor emissions (oxides, nitrogen, and volatile organic compounds). He said the situation is similar in Las Vegas. According to recent studies, he added, about 10 percent of vehicles on the road are producing over half the vehicle-caused pollution. Gross emitters can have emissions as high as a quarter pound per mile. Dr. Jennison added that in a 1-year period (12,000 miles) this is 3,000 pounds of pollutants per car. He explained that not all gross emitters are smoking vehicles, but all smoking vehicles are gross emitters. He asserted a gasoline-powered vehicle should never smoke. If it does, he said, there is something wrong with it and it needs to be repaired.

Dr. Jennison indicated that people operating these vehicles in some cases simply need to be told. In Reno a "fix-it" ticket is given without a fine. It is a notice that the person’s car is emitting 100 times more pollution than other cars. He said it is true there is no statistical data that would prove the proposed system works, primarily because there has not been a system in place. He said the smoking vehicle program is somewhat like the DARE (Drug Abuse Resistance Education) Program. Although there is no statistical proof, he said, the county thinks it ought to work and would like to give it a chance.

Senator Jacobsen asked Dr. Jennison to indicate whether the Washoe County program consists of a visible inspection monitoring station and whether it covers Lake Tahoe. Dr. Jennison responded the program in place covers Clark County and the Truckee Meadows region of Reno and Sparks for smog check. The smoking vehicle program would be statewide. However, he said, the officers would work primarily in Reno and Las Vegas.

Ms. Giunchigliani asked whether Dr. Jennison would support mandating smog emission control statewide. Dr. Jennison said air pollution is really identified in terms of basins and it is only the Las Vegas basin and the Reno-Sparks basin that are out of compliance. Ms. Giunchigliani acknowledged that information, but said the issue is to get at older vehicles that contribute to pollution. She remarked, "Air does not stop at Nye County and say ‘Whoa, I cannot go past here.’" Dr. Jennison agreed that air pollution does not respect political boundaries but said it does dilute and it is not causing a health problem in Nye County.

Ms. Giunchigliani asked about the fix-it tickets. Dr. Jennison said any police officer in all local jurisdictions can now stop a smoking vehicle and issue a fix-it ticket. It is treated the same as having a taillight out. Ms. Giunchigliani asked who follows up on that. Dr. Jennison said almost no one does and that is what this proposed program would do. Ms. Giunchigliani said she did not believe the program would do that. She explained she felt it would be a duplication of what already exists at the local level.

Ms. Giunchigliani said the state would perhaps invest the $500,000 if the program assured follow-through with vehicle repairs, but it is not worth it to do what is already allowed by statute through the existing sworn officers. Dr. Jennison replied having the ability by law to do something and having the people on board to actually do it are two different things. Ms. Giunchigliani stated that adding three people "versus all the peace officers out there currently citing violators" is not going to enhance the program, in her opinion. She said she appreciates the county wanting to do something about the pollution, but she does not feel this plan would accomplish what everyone wants to accomplish.

Mr. Benzler said one difference between the current and proposed procedures is that at present when a police officer issues a citation or a fix-it ticket there is no clear follow-up procedure. With the VSEP, those tickets would be monitored and if there were no compliance, registrations would be cancelled and the vehicle would be removed from the road. Ms. Giunchigliani said if that is the case, the issue is transmitting the information to the Registration Division, not adding peace officers. She noted that an enhancement could be the addition of matching grants to the counties for individuals identified who do not have the resources to correct the emission on the car. She said she is looking for something that works, not just a paper trail that benefits no one.

Senator Jacobsen asked whether the Washoe County program has any exclusion, such as for agricultural equipment, NDOT equipment, or construction equipment. Dr. Jennison responded the program applies only to on-road gasoline-powered vehicles and light trucks.

The meeting was adjourned at 11 a.m.

RESPECTFULLY SUBMITTED:

Jean Laird,

Committee Secretary

APPROVED BY:

Senator Lawrence E. Jacobsen, Chairman

DATE:

Assemblywoman Chris Giunchigliani, Chairman

DATE: