The Joint Subcommittee on General Government of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman William R. O’Donnell, at 8:25 a.m., on Tuesday, April 13, 1999, in Room 3137 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.

COMMITTEE MEMBERS PRESENT:

Senator William R. O’Donnell, Chairman

Senator Joseph M. Neal, Jr.

Senator Lawrence E. Jacobsen

ASSEMBLY COMMITTEE MEMBERS PRESENT:

Mrs. Vonne S. Chowning, Chairman

Mr. Bob Beers

Mrs. Marcia de Braga

Ms. Christina R. Giunchigliani

Mr. David E. Goldwater

STAFF MEMBERS PRESENT:

Brian Burke, Program Analyst

Rick Combs, Program Analyst

Patricia Hampton, Committee Secretary

OTHERS PRESENT:

Mrs. Chowning stated the committee would like to hear about the new agriculturist positions and how they will be funded.

Paul J. Iverson, Administrator, Division of Agriculture, Department of Business and Industry, said that since the last presentation to the Joint Subcommittee on General Government the division has followed through with the suggestions made at that time. He pointed out approval has been given through the budget office and The Executive Budget for a reorganization whereby the Weights and Measures Program and the administrative personnel can be separated from the Bureau of Plan Industry, creating two separate budget accounts: Administration, budget account 101-4554, and Weights and Measures, budget account 101-4551. He explained this will provide the ability to have all of the staff currently involved in the administration of programs moved into one bureau of administration. He said the funds would be cost-allocated once some formal funding policies are established and there has been an opportunity to determine the percentage of time spent on administrative matters.

Mr. Iverson noted that fees, statutes and regulations have been reviewed since the last meeting. He provided a handout outlining legislation needing to be proposed by this committee (Exhibit C) that would take certain fees out of statute and place them in regulation and give the board the opportunity, as funding policies are determined and adjustments made to meet the requirements of certain programs, to raise fees. He maintained many of the current fees have not been changed since the 1970s. He pointed out there have been many increases in costs and the fees need to be adjusted.

Mr. Iverson said the division is in a growing phase and needs to develop a strategic plan that is real and workable and is based upon good measurement indicators. He pointed out that the indicators in the past have all been quantitative, not performance-based. He said that by the time the next Legislature meets, the division will have a good plan and the performance indicators will include performance and quantity so the direction of all programs will be evident.

Mrs. Chowning asked which fees have been updated and which have not. She asked whether opposition to an increase is expected and who might object. Mr. Iverson stated he does not believe there will be significant opposition to fee increases. He said he spoke with individuals on the board representing pest control companies and nurseries. He maintained fees currently charged are not adequate to cover what is being done. He said the plan is to increase fees charged to pest control companies and nurseries. Mr. Iverson pointed out the two agriculturists requested were originally to be assigned to those two areas, but the need to change priorities became apparent. He explained the Africanized honey bee program will be the primary responsibility of the agriculturist originally planned for pest control companies. He said it was not known at the time the budget was planned how significant the Africanized honey bee problem would be. He emphasized there needs to be a staff person dedicating a majority of his or her time to the bee problem in Las Vegas.

Mr. Iverson said if the pest control program administrators cannot get the program running the way they would like to, another position will most likely be requested next legislative session. He stressed it is essential to have a continuing education program in the area of pest control. Noting there are approximately 1,500 pest control operators using chemicals in homes, hospitals, and businesses, he asserted there needs to be some type of continuing education program for these individuals who must have training every year on the dangers, the safety issues and the new chemicals and labeling requirements.

Mr. Iverson said the division is requesting the two agriculturists be paid out of the General Fund for the first year. The second year it is expected the fee increases will raise enough money to pay for the positions, he stated. Mr. Iverson said the total cost budgeted will be $105,000, and $97,000 should be raised in additional fees the second year to meet the cost of the two positions. He provided a handout indicating the costs of the positions over the biennium and the estimated fees (Exhibit C).

Mr. Iverson reviewed the current fees and the summary of proposed fee changes shown on page 1 of Exhibit C. He said every nursery in the state has to be licensed whether it is located at Albertsons, K-Mart or other such store or in an actual nursery. He stated it is expected $50,000 will be raised from nursery fees alone. He said most of the fees were revised in 1983. Mr. Iverson pointed out every pest control operator has to take a test and there are fees charged for the testing. He noted the fees were last modified in 1983. He said all pest control companies in Las Vegas pay a yearly fee for registration and inspection. He stated most of the companies would likely say the proposed fee increase is not adequate to cover the cost of time spent. He estimated it would take a year to go through the public process of posting and noticing, issuing temporary regulations, and passing permanent regulations.

Mrs. Chowning said the proposal being submitted is to remove all fees from statute and to authorize the State Board of Agriculture to set the fees by regulation. She asked why the subcommittee should not simply authorize the board to set nursery and pesticide fees by regulation and leave the other fees in statutes. Mr. Iverson answered the proposal took out not only all the pest control and nursery money but also the pesticides, antifreeze, and fertilizer, because all these chemicals are registered through the state. He noted the rates for the chemicals are set by statute and while changes are being made there is no reason not to include chemicals under regulations.

Mrs. Chowning asked what areas would be left if nursery and pest control fees are removed from statute. Mr. Iverson replied the area of restrictive-use pesticides which are used by farmers and ranchers would remain in the statutes. The fee is set at $10, which would most likely be increased to $25. Mr. Iverson explained that each year the individuals using these chemicals are trained for an entire day and then take a test. He said termite inspections, hay certifications, fertilizer, and antifreeze are covered by NRS and pesticide registration fees are set by regulations. He explained all these fees would be placed under regulations and the board would set the regulations to meet the division’s costs in administering the programs needs. He stressed the board is made up of individuals representing various industries who make sure things will not be done to hurt industry, but on the other hand make sure the industries are paying for the services the industries are requiring of the state.

Mrs. de Braga asked whether the Governor is likely to approve the fee increases. Mr. Iverson responded an increase in fees is not being requested. The request is that the fees be removed from statute and placed under regulations, he maintained, so there can be an evaluation of what the fees should be. He pointed out that in some cases the fees might not be raised to the level estimated and in some cases they might be raised more. He said it is fair for an industry to pay its fair share of the cost for regulating and servicing the industry.

Mr. Iverson stated if the two positions can be funded from the General Fund during the first year and they cannot be funded adequately from fees the second year, it would be necessary to eliminate the positions. He emphasized the Africanized honey bee program is not just any industry, it is strictly a public safety issue and he would go to the IFC and ask for additional money during the second year in an emergency situation. He said the bee problem in Las Vegas will escalate to a point that additional positions will be requested for the second year of the biennium. He pointed out the bees have been sheltered because it is cold, but he expects a significant change over the next 2 weeks.

Mrs. de Braga pointed out the two positions are not the total cost of the program. She said each time this budget has been heard the question has been, Is there more money needed to address this problem? She asked about the costs other than those related to the positions. Mr. Iverson said there are two issues needing to be addressed. He said it was not known 2 months ago that there was an imported fire ant issue in Las Vegas. He pointed out the IFC provided funding for 3 part-time employees to perform a survey and the ant issue will have to be addressed after the survey is completed. He said The Executive Budget provides two agriculturists and an adjustment has been requested in the amount of $10,000 to The Executive Budget so that one of the agriculturists can begin work July 1, 1999. Mr. Iverson stated something needs to be done about pest control companies’ problems. He asserted the reason fire ants are established in some Las Vegas locations is that the division has not adequately addressed all of the nurseries.

Mr. Iverson pointed out these are the reasons such a strong stance was taken on getting a position for nurseries and one for pest control. He said the bee and ant problems have arisen since that time. He commented the division will work with whatever budget it receives and if it becomes necessary, priorities will be changed. He said he knows the Legislature is supportive of the division’s programs and if he has to, he will come back to the IFC and say he "goofed up" when the committee asked what was needed and now he needs additional resources.

Senator Neal pointed out the Governor cut this budget by 50 percent for Fiscal Year (FY) 2000, reducing the number of positions from 36 to 16 and increasing the number to 26 in FY 2001. He asked why the budget was cut. Mr. Iverson responded that when the budget process was started, the division administrators looked at what they thought the needs to be and submitted a budget accordingly. He said the division is going through a similar process on funding policies and will come to the Legislature and the budget office regarding how the division feels things should be paid.

Senator Neal asked whether there was a miscalculation in the reduction. Mr. Iverson answered no. He said that in any budget cycle decisions are made based on state needs and that he is supportive of The Executive Budget. He pointed out that in the final analysis the two positions were what was absolutely needed. Senator Neal asked whether the two positions exceed what was recommended by the Governor. Mr. Iverson replied no, the positions were recommended in The Executive Budget.

Mrs. Chowning pointed out the committee had previously asked that fees in the industry be reviewed to see how long ago the fees were raised. She stated Mr. Iverson has done a very good job of studying the issue and providing answers to the questions. Mrs. Chowning said the question now is, Could both of the positions, or perhaps one, be funded by fees? She said perhaps the position dealing with the bees should be funded permanently with general funds because the bee problem is not going away. She asked that staff be provided a list of the duties of both positions and said a discussion needs to be held with the Governor regarding his position on the fees.

Senator O’Donnell asked about citizens who cannot afford charges involved when they have a swarm of bees to be dealt with and whether there are any contingency plans. Mr. Iverson responded no. He said the issue was brought up by Senator Porter when Boulder City had some bee swarms in empty lots and no one would take responsibility. He stressed, "You cannot wait and have something happen." He said Senator Porter has a bill that would give the agency $10,000 in a special fund to use to enter into an agreement with the Pest Control Association so someone could take care of the problem immediately.

Senator O’Donnell said he does not have a problem with the fees being set by regulation. He stated having the fees in regulations allows the ability to change the fees as necessary in the future. Mr. Iverson remarked that the audit pointed out there needs to be ongoing revision of funding policies. He said the division wants to set up a trigger mechanism so that the board will review the fees every 2 years to make sure they are appropriate.

Ms. Giunchigliani said there is already a person paid by general funds and asked, "Why not send that individual to eradicate the bees when a call is received?" Mr. Iverson stated a person would be sent to evaluate the situation and then call a pest control company. He said he would not recommend that unless the current employee holding the position is a beekeeper or bee eradicator.

B&I AG Weights and Measures – Budget Page B & I-155 (Volume 2)

Budget Account 101-4551

Mrs. Chowning asked how it was determined the fees were available to fund the position of Weights and Measures Inspector. Mr. Iverson explained that when the budget was developed, the number of devices inspected in 1998 was reviewed and future growth projected. He said that every year there is a 9 or 10 percent increase in the number of devices due to growth in the state. He stated this increase was built into the base and perhaps it should have been built into the enhancements. He said that at the request of the Legislative Counsel Bureau (LCB) the division used figures from 1999, because it was known how many devices have been inspected to date, and projected through the end of the year. He pointed out there is a much better picture of what will be inspected this year and the incremental cost has been added. Mr. Iverson explained the $30,000 in FY 2000 and the $40,000 in FY 2001, shown on page 2 of Exhibit C, are what is expected in inspection fees. He said these funds are in addition to what is in the base budget to be used for the Weights and Measures position.

Rick Gimlin, Administrative Services Officer, Division of Agriculture, Department of Business and Industry, agreed with the explanation provided by Mr. Iverson. He said the anticipated funds shown are incremental increases based upon the device inspection count in FY 1999. He commented it is not enough to entirely fund the position. He recalled the cost of the position for FY 2000 was approximately $50,000 and drops in FY 2001 because of equipment needs. He said an offset is provided to the general funds requested in the original budget.

Gas Pollution Standards – Budget Page B&I-158 (Volume 2)

Budget Account 101-4537

Mr. Iverson said that historically there have been two positions in Weights and Measures paid out of budget 101-4537. After consultation with LCB and the budget office, it is being recommended the two positions, along with the funding for the positions, would transfer to the new Weights and Measures budget and the money paid out of the air quality fund. The division has reviewed the percentage of time spent by weights and measures inspectors on fuel-quality-related issues and has determined the time spent has increased from 14 percent to 15 percent, as displayed on page 2 of Exhibit C.

Mr. Gimlin explained that in the original budget it was requested the positions being transferred from budget account 101-4537 be funded by 14 percent of the gas pollution money. At the time this was the percentage of duties that could be assigned to air quality activities. Mr. Gimlin said the remaining offset for those two positions would be General Fund. He stated that would follow the overall precedent set in the last legislative session. He pointed out the committee, in a hearing on March 9, 1999, asked the division to review the percentage to see if more time is being spent on air quality activities. Mr. Gimlin said Ed Hoganson, supervisor of the Weights and Measures program, performed a review finding the percentage had increased from 14 percent to 15 percent. He stated that is not a large increase but does change the amount of money that could be taken from the pollution control fund in support of the Weights and Measures account. He said the incremental increase going from 14 to 15 percent is in the diagram shown on page 2 of Exhibit C.

Mr. Gimlin said the proposal at this time would simply be to increase the percentage from 14 percent to 15 percent as a total for the Weights and Measures budget and there would be a corresponding reduction in General Fund support. Mrs. Chowning asked how much the reduction would be in the General Fund. Mr. Gimlin answered it would be $14,008 in FY 2000 and $3,766 in FY 2001.

Senator Neal asked how the fee is based for petroleum inspection, which is included in the Weights and Measures budget. Mr. Gimlin replied the fee is set by statute and .0005 percent is received from a tax on all motor fuel and lubricating oil that comes into Nevada. Senator Neal asked whether the fee would rise correspondingly with gas prices. Mr. Gimlin answered no. He said it is not tied to gas prices, only to the quantity of product sold.

Mr. Iverson added that as prices rise, people become very concerned about getting the amount of gas they are paying for, and as prices increase the number of complaints and requests to have gas pumps checked also increases.

Mrs. Chowning inquired why the two positions were funded totally from the air pollution control account in the past. Mr. Iverson answered, "When you look at the 14 percent of all costs associated with Weights and Measures and you equate that back to those two positions, that is approximately the amount of money to cover the two positions." He said that in the past the salaries were paid from the gas pollution money and now the division would like to tie the salaries more closely to the duties of the positions.

Mrs. Chowning asked whether there is opposition to continuing to fund the positions from the air pollution control account. Mr. Iverson responded no but said with all the emphasis on the gas pollution fund this year, it is something that needs to be examined. He maintained that 14 percent of a Weights and Measures inspector’s time is spent on pollution-control activities, but he does not have a problem with the positions being funded as before. Mrs. Chowning pointed out the General Fund costs would be approximately $150,000 less.

Mrs. Chowning asked about the study on cost allocation and what the results have been regarding how the administrative services will be funded. Mr. Iverson stated the cost allocation has been debated for about a year. He said that once administration was separated it would become necessary to have a cost allocation program. He pointed out one problem is that some of the fee-based agencies cannot pay their portion of the allocation plan at this time. He explained that historically all administrative support was provided in budget account 101-4540 and funded with general funds and there was not a cost allocation fee in place. He said the plan is to set up a new bureau and take money from the fee-based agencies to help pay for this new entity, the bureau of administration. He said when he looked at the cost allocation schedule that should be established, the determination was made that there is not enough money in the fee-based agencies, because of how the fees have been established historically, to pay for a cost allocation the first year. He said if there is an opportunity to adjust fees, approximately $98,000 could be taken out of account 101-4540 the second year to go to the new bureau of administration.

Mr. Iverson said he requested the division be given this biennium to perform cost analysis, formulate funding policies, and to devise allocation schedules. He emphasized that by this time next legislative session the division will have a full-fledged funding and allocation policy to be presented to the Legislature that would show how the bureau of administration will be paid for.

Mrs. Chowning requested semiannual reports be given to the IFC regarding progress in having the information ready for the 2001-2002 biennium. She acknowledged the work that has been done and "will continue to be done."

Mrs. Chowning asked for a brief discussion on Assembly Bill (A.B.) 103, the proposed move, benefits, and whether the Governor supports reestablishing a separate department for the functions of the Division of Agriculture.

Mr. Iverson said A.B. 103 primarily would separate the Division of Agriculture from the Department of Business and Industry and would include the agriculturally related boards, commissions and agencies. He explained the division would be reestablished as a department, as it was prior to the reorganization. He said the Division of Agriculture pays approximately $50,000 into the Department of Business and Industry for cost allocation for the different agencies. He stated that under the bill, the money would remain with the Division of Agriculture and would help pay for some of the administrative costs through cost allocation once the bureau of administration is established. He said the agricultural sector sees the separation as an advantage because it "gives the division cabinet-level status and takes a layer of government out of the picture." He pointed out there would be a direct line of contact to the Governor’s Office for both the Division of Agriculture and the Division of Minerals. He emphasized many of the issues for the division are not business-related, they are more natural resources-related.

Mrs. Chowning asked that the Assembly Committee on Ways and Means be informed at the next meeting as to whether this change has been discussed with the Governor.

DEPARTMENT OF ADMINISTRATION

Printing Office – Budget Page ADMIN-33 (Volume 1)

Budget Account 741-1330

Brian Burke, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, reviewed the budget and technical adjustments as shown on pages 1-3 of Exhibit D.) He said the agency agreed to lower the classification of the Offset Supervisor if the quick-print office in Las Vegas is approved. He pointed out there are adjustments throughout the administrative accounts. Adjustments are needed to the base, M-800 and E-800 cost allocation modules to match the individual agency accounts to the administrative services cost in the Governor’s recommended budget.

Mr. Burke said it was important to make note of module M-100 in the closing sheets because of the increase in the cost of raw materials. He pointed out that based on inflation, the cost of materials would increase by $75,241 in FY 2000 and $156,877 in FY 2001. He said the major decision is whether or not to approve the satellite quick print center in Las Vegas. This would enable the southern area of the state to have faster service with a cost savings over the current expenses. Mr. Burke said that while the Joint Subcommittee on General Government never received firm figures, the agency did indicate that copying and shipping costs for Las Vegas agencies would decrease between 61 and 191 percent.

Mr. Burke explained module E-127 establishes a reserve fund to cover any increase in personnel costs due to a pay increase approved by the Legislature. He mentioned there was discussion on the increased overtime funding. He said the agency has mentioned in other modules that automation has improved efficiency. Looking at a history from 1995-1998, it does not appear the overtime additions above the base requested in module E-129 would be needed.

Mrs. Chowning commented the increase for overtime does not appear to be needed. Senator O’Donnell suggested one has to realize who is utilizing the overtime. He said it is not the printing office, it is all of the agencies that request the printing office produce printed materials. He pointed out that if the overtime increase is eliminated, all of the agencies requesting printing will have to wait longer for their products and he is not sure that is wise. Mrs. Chowining stated she is not talking about taking everything out of overtime. She said the money would stay in the base but this particular request would not be granted.

Mr. Burke explained the E-129 request is to supplement the overtime in the base budget. He said there would still be $186,000 for overtime in the base budget and this seems to be sufficient based on an historical overview. Mrs. Chowning pointed out one position has been eliminated due to the efficiency of the automated equipment.

Ms. Giunchigliani stated that regarding the quick-print center, she had asked the budget director to let the committee know whether there was going to be an offset and had said that if not, the center would not be approved. Mr. Burke said he placed an excerpt on page 2 of Exhibit D under item No. 2 as to what was provided by the agency to respond to Ms. Giunchigliani’s previous requests. He said there was never any firm savings estimate provided as far as savings to state agencies or on shipping costs. Ms. Giunchigliani maintained getting the savings figures was part of the understanding as to what would be needed for committee approval of the print center. Mr. Burke stated a business plan was furnished but the only savings estimate provided was a percentage savings on each copy made. Ms. Giunchigliani emphasized that even the agency admitted the print center should not be approved if savings could not be shown.

Mrs. Chowning asked whether this issue would be given further study and the necessary information be provided so that perhaps next biennium a quick-print center would be opened. Ms. Giunchigliani maintained the concept was acceptable, but it was "thrown together." She added she does not feel there is anything wrong with the agency reviewing the possibility of a print shop to be considered in a future biennium. She said she would add as part of the motion that a letter of intent be given asking the agency to provide better justification. Mrs. Chowning remarked perhaps that is what is needed. She said a print center in the area would be more convenient than going to the private printing companies.

Senator O’Donnell called attention to the agency having found space in the Grant Sawyer State Office Building reducing the cost for non-state-owned space and pointed out the total increase in expenditure is only $36,840. He maintained that is very reasonable for a quick-print service. He commented "there appears to be a feeling state government only operates in Carson City, that the monies for southern Nevada seem to be excised." He maintained the plan for the print center is a good plan and would be an efficient way to obtain printing for agencies in southern Nevada.

Mrs. Chowning stated a request was made for actual dollar savings related to the quick-print center. Jim Manning, Principal Budget Analyst, Budget Division, Department of Administration, said he was unaware sufficient information was not provided on the quick-print center.

John P. Comeaux, Director, Department of Administration, testified the belief is that opening the print office in Las Vegas will not only save agencies shipping costs, but will attract more business from agencies who now use printers other than the state printer because they need printing in a hurry. He said he does not have the cost savings figures requested by the committee.

Mrs. Chowning stated the budget cannot be closed without this information. Senator O’Donnell asked why the budget cannot be closed without the figures. Mrs. Chowning said the print center budget would be $241,000 in FY 2000 and $246,000 in FY 2001. She said this is not offset by any estimate of how much would be saved by using the print center.

Mrs. de Braga asked, "If this is a savings, how long will it take to make up what is being spent before [the] savings begin?" She said she has a problem with this proposal considering there is no information as to how much will be saved annually.

Mr. Comeaux stated he believes the print center is a good idea, and the budget office will provide specific savings information within 2 days.

Mr. Beers said the information was requested weeks ago from someone other than the budget office. He stated one of the answers was there is an inconsistency in the general ledger accounts, used by various agencies, to expense their outside printing costs, so the information is not easily gathered. He pointed out the printing office should be able to segregate the outbound shipping costs from other charges. He said perhaps the subtotal by vendor, which would include the small quick print-shops, might be another way to get some figures.

If there was no objection, Ms. Guinchigliani said she would withdraw her motion and hold the budget to wait to see what the saving figures are and make a determination at that time. Mrs. de Braga withdrew the second.

Motor Pool – Budget Page ADMIN-42 (Volume 1)

Budget Account 711-1354

Mr. Burke said he has provided a recap of the new rates projected for the Motor Pool account shown on page 5 of Exhibit D. He reminded the committee that during earlier hearings the budget director testified a letter would be written directing all state agencies to standardize expense general ledger usage related to revenue sources of fee-funded accounts and indicated the budget instructions for the 2001-03 biennium would reinforce the need to standardize. He reviewed the technical adjustments shown on page 5 of Exhibit D.

Mr. Burke called attention to several amendments to the Motor Pool account shown under decision items on pages 5-6 of Exhibit D. He said if approved as amended, module M-200 will fund operating and depreciation costs for a total of 49 new vehicles through one-shot funds and 8 through the intrafund transfer from the Motor Pool account. He said fiscal staff is asking for approval to make any modifications to the Motor Pool account and the Motor Pool Vehicle Purchase account that might result from changes to Assembly Bill (A.B.) 346.

Mr. Burke explained the two new positions in module E-125, overtime in module E-126, replacement equipment in module E-710 and new equipment in E-720, all shown on page 6 of Exhibit D.

Mrs. Chowning asked whether the overtime would be needed if the positions being requested were approved. Mr. Burke responded it might not be. He said the administrator did not give a definite "it would not be" but conceded overtime possibly would not be needed if the positions were funded.

Mrs. Chowning asked whether this motion included approving the two new positions. Senator O’Donnell answered yes. Mrs. Chowning pointed out that there has not been any overtime budgeted in the past and asked, "Why would you need to add $5,000, considering the new positions?" Senator O’Donnell said the agency is getting larger and has more vehicles and made the case at the last hearing that there was some overtime worked, but there was no contingency money to cover it.

Mr. Burke testified the agency has not been budgeted for overtime in the past. He said the amount requested is for overtime worked in FY 1998 and historically has been paid out of existing resources.

Senator O’Donnell said he would like to change his motion.

Mrs. Chowning pointed out the staff recommendation is to delete the overtime request. She asked about the number of vehicles being increased from 33 to 49 to address the proposals in the amendments. Senator O’Donnell said it is his understanding A.B. 346 is still in the Assembly Committee on Ways and Means and the budget cannot be closed totally until the disposition of the bill is known.

Mr. Burke explained that what he has done in the closing sheets is to reflect the proposed amendments from the Budget Division. If there are changes to A.B. 346 he requested the authority to make needed modifications to the operating and depreciation categories.

Mrs. Chowning asked for clarification on staff recommendations for module E-126. Mr. Burke stated the closing sheets do not reflect a reduction to the overtime amount. In the narrative on page 6, item 3, of Exhibit D, staff has indicated the overtime is not historically funded and staff was encouraging the subcommittee to consider deleting the overtime. He said staff is not recommending whether or not to delete the overtime, just providing information that overtime has not historically been budgeted offering a reminder that the agency administrator did testify the overtime might not be needed if the two new positions were approved.

Mrs. Chowning reminded the committee the motion is to include the funding for overtime even though the new positions are requested.

Ms. Giunchigliani stated she could not support closing the budget in this manner. She pointed out the agency found funds to pay the overtime in the past. She asked why money should be set aside for something that has not historically been funded.

Senator O’Donnell said the two positions will be allocated but the agency will not fill the positions so the Vacancy Savings from the positions can be used to pay off the overtime already owed, and once the bill is paid they will fill the positions.

Mr. Goldwater asked what brings about overtime in the motor pool. Frank Revell, Chief, State Motor Pool, Department of Administration, testified that historically not very much overtime has been used so it has been paid from the budget. He said he was not originally aware the money had been requested for overtime. He stated the two requested positions address the agency’s growth and existing problems. He pointed out the agency is small and when one person is sick, overtime has to be paid for whoever has to work in place of the ill employee. He said there is usually someone sick or on vacation at any one of the motor pools because of the small number of employees. He stated there are 5 employees at the Las Vegas motor pool and with 3 weeks of vacation a year for each employee, this makes 15 weeks that someone’s shift has to be covered.

Mrs. Chowning asked whether the overtime funding is needed if the new positions are approved. Mr. Revell answered he believes some overtime money will be needed. Mrs. Chowning asked how much. Mr. Revell replied he does not see the numbers changing much. He explained that because the new positions only address growth and one of the two positions will eliminate several positions the agency already has, that particular position will address only a small portion of the growth in the Carson City Office. Mr. Revell stated he concurs with the $5,000 suggested by Senator O’Donnell. He said he would work at keeping the overtime to a minimum. He said the position for Carson City provides a full-fledged staff member that can work in Reno if someone is ill. As it is now, there are only 1 or 2 people in the Carson City office that can do that, he pointed out.

Mrs. de Braga asked when these 2 positions would be filled. Mr. Revell said October 1, 1999, is the anticipated date.

Senator O’Donnell said he would amend his motion.

Motor Pool Vehicle Purchase – Budget Page ADMIN-48 (Volume 1)

Budget Account 711-1356

Mr. Burke said there were also several amendments to the motor pool recommendation as far as vehicle purchases. He reviewed the decision items shown on pages 7-8 of Exhibit D. He explained the adjustments would reflect the revisions to the depreciation as a result of each of the amendments. He pointed out this assumes A..B. 346 will be passed with the recommended amendments. He commented fiscal staff requests approval to make any modifications to the Motor Pool account and the Motor Pool Vehicle Purchase account which may result from changes to the bill.

Purchasing – Budget Page ADMIN-51 (Volume 1)

Budget Account 718-1358

Mr. Burke explained the technical adjustments and decision units shown on pages 9-11 of Exhibit D.

Mrs. Chowning said the budget could be closed as recommended. However, she said, there needs to be a decision whether to approve billing individually rather than using full-time equivalent (FTE) assessments for module E-876 and whether to approve the reserve balance as $500,000 rather than the lower amount that she said would result in problems.

Surplus Property – Budget Page ADMIN-59 (Volume 1)

Budget Account 101-1367

Administrative Services – Budget Page ADMIN-105 (Volume 1)

Budget Account 716-1371

Mr. Burke reviewed the technical adjustments and decision units shown on pages 20-21 of Exhibit D. Mrs. Chowning pointed out that initially it was thought there would be no General Fund impact from making the position transfers in module E-900. Upon further discussion however, it was determined there will be a slight increase in General Fund appropriations of $6,065 if the positions are moved. She stated fiscal staff needs to be given permission to make other required changes in the cost allocation modules.

DEPARTMENT OF BUSINESS & INDUSTRY

B&I, Real Estate Administration – Budget Page B&I-43 (Volume 2)

Budget Account 101-3823

Senator O’Donnell disclosed he is a licensed real estate broker and will not participate in any discussion of this budget because one of his former agents is under investigation. Mrs. Chowning stated she is also a real estate licensee and does not believe these discussions will affect her any differently than anyone else.

Rick Combs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, pointed out two technical adjustments have been made to this budget as shown on page 22 of Exhibit D. He said the major issue for the committee’s decision today has to do with the base budget. He stated The Executive Budget eliminated the half-time position that operates the program for the certification of building inspectors. He said testimony was received that the program would not be eliminated. Mr. Combs stated the subcommittee asked the division to submit a proposal on how much it would take in operating costs to administer the program, and a copy of the proposal is shown on page 24 of Exhibit D. He pointed out the cost would be approximately $5,131 in each year of the biennium. He said the division has indicated the program can be operated with the licensing section and appraisal officer, as well as the deputy administrator, performing the duties currently performed by the part-time position.

Mrs. Chowning noted this program was put into effect the last legislative session to address the many problems associated with individuals who call themselves real estate inspectors but do not have the adequate background to perform the services.

Joan Buchanan, Administrator, Real Estate Division, Department of Business and Industry, stated the division has licensed 120 structural inspectors but many have upgraded to a higher level, leaving the number at 70. She said this number will bring in $17,500 over 2 years. She pointed out the program now costs $36,729 to operate. She explained that alternatives are having the licensing section handle the applications and distributing the remaining work to others. Ms. Buchanan said that perhaps the division could report to the IFC on how the program is working. She stated the division will do its very best to make the program work with the proposed changes. She said that, as of now, the division does not see any major problems. She maintained the changes would work as long as there is funding for operating costs to handle any legal problems, hearings, regulations or investigations and perhaps to have someone to attend a conference to keep current with home inspections.

Ms,. Chowning asked who determined the half-time position was not needed. Ms. Buchanan explained there is a lot of work required when a program is being set up, and once the program is in place the responsibilities can be assigned to other areas. Mrs. Chowning asked the division to come to the IFC and provide reports.

Mr. Combs continued reviewing other budget closing issues shown on page 23 of Exhibit D. He called attention to one change in decision unit E-125. He said he received a call from the division with changes that eliminated the need for $19,564 in hardware costs for a server and an ethernet hub for the Las Vegas and Carson City offices. He stated he has discussed this change with the division and the Department of Business and Industry director’s office and it appears equipment will be shared with other Business and Industry agencies. Mr. Combs said this will reduce the number of servers needed, which will affect repair costs. He stated that because this change will require some new equipment and maneuvering he is recommending a reduction in E-125 for computer hardware by $15,564. This will leave $4,000 in case something comes up while the change is being implemented so the division will have some ability to handle the situation.

Mrs. Chowning inquired whether Ms. Buchanan agreed with that change. Ms. Buchanan responded yes.

Mr. Combs said the primary decisions are the increased amount for the operation of the building inspector program and the reduction in E-125 of the computer hardware costs.

Mrs. Chowning said she has a question regarding A.B. 105. which the Governor vetoed.

Mrs. Chowning asked whether the fee is for conducting the timeshare exam. She asked what the benefit would have been to the General Fund, "because the cost was to offset the cost of the exam for those selling timeshares." Ms. Buchanan answered she recalls it was 200 persons a year taking the timeshare salesman examination. She said the reason a fee was needed was that many taking the exam do not study for it and just keep taking the exam until they pass, and it seems appropriate for the division to charge for the exam as it does for other exams and for continuing education fees. She stated that was the reasoning behind the legislation. She said the division may be able to come back to the Legislature with a more definitive program in the future.

Mr. Goldwater said it makes him feel terrible when in budget hearings it is said "we can get along without the fee" when testimony has been given that the division wants the fee. He asked why the fee is being requested if the program can be operated without the fee. Mrs. Chowning pointed out the taxpayers are "taking the hit" because the division will pay for the cost of the examination from the General Fund, rather than requiring the people who take the exam to reimburse the division for those costs.

Senator Jacobsen requested the bookcases and workstation come from Prison Industries. Ms. Buchanan said most of the division’s new furniture has been purchased from Prison Industries and the division will try to do the same with future purchases.

B&I, Financial Institutions – Budget Page B&I-60 (Volume 2)

Budget Account 101-3835

Mr. Combs requested the joint subcommittee’s approval to make some retroactive technical adjustments, similar to ones granted in the past, on computer hardware and software costs. He said the division has special needs when it hires new employees for laptop computers to be functional for particular purposes. He testified he will work with the Purchasing Division and the Division of Financial Institutions to obtain the cost of the exact model of computer needed and revise the cost in the budget accordingly.

Mr. Combs called attention to decision unit M-200, addressed under budget closing issues on pages 25 and 26 of Exhibit D. He said a copy of the division’s response to a request for information regarding performance measurement indicator data, as well as other support for the need for new positions, is shown on pages 27-29 of Exhibit D. He stated that based on the information provided by the division, the request for 4 new positions requested for FY 2000 appears reasonable. He said the joint subcommittee may wish to consider that past legislatures have provided the division with some authority to hire positions when the need arises. Mr. Combs pointed out the division is funded entirely through a General Fund appropriation, but at the end of each fiscal year enough fees are charged to financial institutions for examination hours to reimburse the General Fund for the cost of the state appropriation.

Ms. Chowning asked for an explanation of why the 4 examiners in the second year of the biennium are needed. L. Scott Walshaw, Commissioner, Division of Financial Institutions, Department of Business and Industry, answered the 4 examiners in the second year of the biennium are based strictly on growth of licensee projections. He said that since 1987 the Legislature has approved funding and vacant positions have been maintained in the budget to be filled, on a contingency basis, as the man-hours are needed for the purpose of administering examinations.

Ms. Giunchigliani inquired whether any of the other mortgage-broker legislative bills would carry a simple appropriation. Mr. Walshaw responded there is pending legislation that will prospectively have a fiscal impact on the division. He said "the conversion of what are now referred to as exempt mortgage companies to a license status are described in general terms as mortgage-banking entities." He explained that right now a program of issuing exemption certificates is being administered on an annual basis to approximately 300 mortgage bankers who are exempt under current statutory instruction. He stated there is a fee of approximately $200 a year to renew the exemption certificate. Mr. Walshaw said what the division had proposed would essentially convert the exemption certificate issuance to a license status. However, the way the licensing was structured the division would only examine those companies on an exception basis, meaning if there is a problem, the companies will be given examinations. Mr. Walshaw said there is no requirement for annual examinations; therefore, there is nothing in the projections, either before or after any legislation, that would impact the number of examiners requested.

Mr. Walshaw said the division has presented facts and figures showing the division needs approximately 4 examiner positions to handle the current cases for FY 2000. The request for the second 4 positions is based on the projection there will be a continuation of growth in the economy and therefore in the number of licensees under supervision. He said this request was in the budget before A.B. 64 was even considered.

Senator O’Donnell asked how the 4 positions in FY 2001 would be funded. Mr. Combs answered the way the positions are funded is through General Fund appropriation. At the end of each fiscal year the division is responsible for collecting enough fees through the examination process to reimburse the General Fund for the appropriation. He said if the budget is closed this way it would be suggested to the Economic Forum that their projections for revenue from this agency be increased by the amount of whatever maintenance and enhancement units that are approved

Mr. Goldwater asked whether this budget could be held until after the hearing on A.B. 64. Ms. Giunchigliani pointed out Mr. Walshaw testified A.B. 64 had no effect on this budget.

Senator O’Donnell stated the request is for 8 new positions to solve problems in the division. He said there are a number of bills dealing with mortgages and this is the beginning of the "straightening out of this industry. The industry can no longer turn away and think that it can solve its own problems." He maintained the division needs the staff and resources to take care of the problems. Mrs. Chowning reminded the committee that Mr. Walshaw stated the 8 positions will have nothing to do with any pending bills.

B&I, Minerals – Budget Page B&I-212 (Volume 2)

Budget Account 101-4219

Mrs. Chowning stated the material requested regarding a contingency plan that could be implemented if the fee increase did not become a reality has been provided and is shown on pages 32-35 of Exhibit D. Mr. Combs said the subcommittee had some concerns regarding the projected interest in this account. He said he has reviewed the reserve balances in each year of the biennium compared to FY 1998 and FY 1999. He stated the subcommittee would be warranted in adjusting FY 2000 by $3,000 to $4,000 to make it more accurate, but it is not totally necessary to adjust it. He said the funds could also be "work-programmed in as well."

B&I, Labor Relations – Budget Page B&I-218 (Volume 2)

Budget Account 101-3900

Mr. Combs testified there were two closing issues in this budget shown on page 36 of Exhibit D. He said there were also issues previously discussed by the subcommittee shown on pages 36-37 of Exhibit D.

B&I, Employees Management Relations Board – Budget Page B&I-221 (Volume 2)

Budget Account 101-1374

Mr. Combs said there are minor recommendations in this budget. He said decision unit M-200 recommended increasing the number of days on which hearings were held in FY 2000 by 2 hearings and in FY 2001 by 4 hearings. He said there is also funding in the amount of $480 in FY 2000 to upgrade the board’s computer software. He said both of these items appear to be reasonable.

Mr. Combs stated the subcommittee requested the board to provide details regarding the request for funding of an unclassified salary adjustment for the secretary of the board. The response is shown on page 40-41 of Exhibit D. He said there would have to be a change in the unclassified pay bill for that to happen. He stated if the change were made he could be directed to make sure the board has the proper authority in the budget to make the salary adjustment.

Mr. Goldwater inquired whether this would be the way to make a salary adjustment. Mr. Combs explained the reason this would be appropriate is that if the board is given the authority and the pay bill does not get amended, the salary cannot be paid statutorily; but if the pay bill is changed and the board is not given the budget authority, there is no money to make the salary adjustment. He stated the rational progression is to have the bill amended and he will be responsible for ensuring the funds are in the budget.

B&I, Athletic Commission – Budget Page B&I-238 (Volume 2)

Budget Account 101-3952

Mr. Combs provided an overview of the account and closing issues as shown on pages 42-43 of Exhibit D. He pointed out that normally overtime pay is not funded, but based on the size of the staff and the need to supervise events at night and on the weekends, budgeting for a limited amount of overtime pay appears reasonable.

Mr. Beers said he would consider purchasing a typewriter for museums but maintained it was not functional office equipment. He recommended the funding requested for a typewriter be put into word processing classes.

Marc Ratner, Executive Director, Nevada Athletic Commission, Department of Business and Industry, explained a typewriter is needed to type information on the licenses. He said perhaps new programs could be added to the word processing capability. Mr. Beers pointed out Microsoft Word now comes with templates that can be used with Avery stock paper, and logos can be added. He said there is very little that cannot be done on word processors.

Mr. Combs said the agency has estimated the cost of the typewriter would be $600. Senator Neal asked whether any thought had been given to changing the form used for licensing. Mr. Ratner agreed the form could be changed. Senator Neal stated that perhaps the form should be changed to work with technology now being used.

Senator Neal asked how much that would be. Mr. Ratner said this is being discussed with the commissioners and the issue will be discussed with other legislators. He said it is not up to him to decide. Senator Neal emphasized he was only talking about how much money would be available for whatever increase would be recommended. Mr. Goldwater said a ceiling of $10,000 could be set on budget authority.

The meeting was adjourned at 10:55 a.m.

RESPECTFULLY SUBMITTED:

Patricia Hampton

Committee Secretary

APPROVED BY:

Senator William R. O’Donnell, Chairman

DATE:

Assemblywoman Vonne S. Chowning, Chairman

DATE: