The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 9:00 a.m., on Tuesday, May 11, 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.

COMMITTEE MEMBERS PRESENT:

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

Senator Bob Coffin

Senator Bernice Mathews

Senator Alice Constandina (Dina) Titus, Clark County Senatorial District No. 7

STAFF MEMBERS PRESENT:

Dan Miles, Senate Fiscal Analyst

Debbra King, Program Analyst

Johnnie Willis, Committee Secretary

OTHERS PRESENT:

John P. Sande III, Lobbyist, Nevada Bankers Association

Russell Roberts, Department of Comprehensive Planning, Clark County

John Drew, Acting Director, Department of Motor Vehicles and Public Safety

Senator Raggio opened the hearing on Senate Bill (S.B.) 167 indicating the bill had been heard by the Senate Committee on Natural Resources who referred it to the Senate Committee on Finance.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association, said S.B. 167 revises the hazardous material law. He noted the law has not been updated for about 10 years, and during that time period a number of changes have taken place. He indicated Nevada has become a party to the Alliance Program and is one of four states that joined together for the purpose of ensuring hazardous material laws are uniform throughout the United States. He said presently six states are part of the Alliance Program and another two are considering joining. Mr. Capurro explained the Alliance Program is very much like the International Registration Plan, which began the same way and presently consists of all 50 states. He pointed out the purpose of S.B. 167 is to make Nevada’s hazardous material laws concurrent with the laws of other states to assure that rules and regulations are consistent with interstate commerce. He indicated most of the language in the first sections of S.B. 167 came directly from the Alliance Program and will make Nevada consistent with the other states in the program.

Continuing, Mr. Capurro noted this issue is also being presented to the Federal Department of Transportation (DOT). He indicated that in the near future DOT would make a determination in regard to adopting uniform rules on a federal level.

Further, Mr. Capurro said the changes in sections 2 through 18 of S.B. 167 refer to the proposed uniform language. He explained the measure changes the way the transportation permit fee collected for transporting hazardous material is deposited. He said S.B. 167 would deposit the entire amount into the Highway Fund and the State Emergency Response Commission would be funded from the Highway Fund rather than from a separate fund. He noted that at present the fee is split with 80 percent going to the Highway Fund and 20 percent to the State Emergency Response Commission.

Senator Raggio inquired whether the fees were deposited to the contingency hazardous materials account. Mr. Capurro replied that is correct.

Mr. Capurro indicated the contingency hazardous materials account also contains grant money used by the State Emergency Response Commission (SERC) to distribute funds to first responders’ training, equipment, and other such items. He said the SERC was forced in the past to "raid" grant funds to cover administrative costs because 20 percent would not cover the cost of administering the program. Mr. Capurro remarked the commission has collected about $120,000 this fiscal year on 20 percent of the fees. He pointed out the commission’s budget is about $125,00 to $130,000 for each year of the biennium.

Mr. Capurro stated the change in funding procedures would require the contingency hazardous materials account to be budgeted from the Highway Fund by action of this committee, the same as the Highway Patrol, the Department of Motor Vehicles and Public Safety, and the Emergency Response Commission accounts are budgeted.

Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), indicated the fiscal staff questioned whether the bill met constitutional requirements. Mr. Capurro replied that Brenda Erdoes, Legislative Counsel, Legal Division, LCB, indicated there were no constitutional problems with the changes that would be made by S.B. 167.

Senator Raggio inquired whether the original bill contained language regarding the Alliance Program and asked whether the present bill is the first reprint. Mr. Capurro replied the first reprint is two bills "rolled into one." He explained S.B. 82 was combined with S.B. 167 and corrections were made to the combined bill which resulted in the first reprint of S.B. 167.

Colonel Michael Hood, Chief, Nevada Highway Patrol Division, Department of Motor Vehicles and Public Safety, said the highway patrol has been working with the hazardous waste industry to construct the bill. He explained the highway patrol had concerns regarding recouping costs for permitting, inspections, and other such items but determined that S.B. 167 addresses and remedies the concerns.

James Rhode, Program Manager, Hazardous Permits Section, Nevada Highway Patrol Division, Department of Motor Vehicles and Public Safety, said S.B. 167 allows the Nevada Highway Patrol to recoup some of the costs involved in reviewing motor carrier safety records regarding transport materials, as well as hazardous waste carriers.

Senator Raggio inquired what the highway funds contribution would be should S.B. 167 be enacted. Mr. Capurro replied the highway funds contribution would be between $125,000 and $130,000 for each year of the biennium. Senator Raggio asked whether the estimate is close to the projected budget for the Emergency Response Commission. Mr. Capurro responded the cost is "close to a wash" over the next 2 years but he was unable to project what it would be thereafter. He said the state is presently working under an exemption in regard to bringing the laws into compliance with the language of the Alliance Program, and therefore it is essential the changes be made to S.B. 167.

Senator Raggio closed the hearing on S.B. 167 and opened the hearing on S.B. 363.

Senator Raggio indicated S.B. 363 was referred to the committee for the Senate Committee on Natural Resources.

Allen Biaggi, Administrator, Division of Environmental Protection, State Department of Conservation and Natural Resources, explained that S.B. 363 proposes the establishment of a "brownfills" program for Nevada. He said this legislation would augment existing programs in the Bureau of Corrective Actions and encourage revitalization of vacant, unproductive, environmentally contaminated lands throughout the state. He pointed out the sites in question typically consist of industrial and commercial properties that are abandoned or vacant due to hazardous substance contamination in soils or groundwater from past activities. Mr. Biaggi said examples of these sites include former landfills, salvage yards, plating shops, gasoline stations, and a variety of other industrial and manufacturing facilities. He said that due to perceived or actual contamination at these sites, landowners, prospective buyers, and developers are reluctant to proceed with redevelopment even though the properties may be ideally suited in prime locations.

Continuing, Mr. Biaggi stated the Division of Environmental Protection has been an active participant in the federal brown fills program and helped facilitate the first Brownfills Pilot Project Grant to the city of Las Vegas in 1998. He indicated a similar project is planned for the Ely area. He said the state has entered into "brownfills-like" agreements with property owners and purchasers.

Mr. Biaggi pointed out there is a fiscal note for S.B. 363. He said the agency reviewed the first year’s funding and discussed the issue with "grants individuals" at the federal Environmental Protection Agency (EPA), which concluded in a decision to allow the agency to cover the costs for the first year using existing grants. Mr. Biaggi indicated the fiscal note states the program should be self- supporting and costs allocated to users of the program. He pointed out there would be no cost to the State of Nevada or the General Fund.

Senator Raggio asked what part of the fiscal note indicated there would be no cost to the state. Mr. Biaggi replied it is documented in the addendum.

Senator Raggio questioned from whence would come $53,263 for the first year. Mr. Biaggi replied the agency proposed to use existing grants. Senator Raggio inquired from whence would come $226,103 for the second year. Mr. Biaggi said the costs would be allocated to individuals using the program. Senator Raggio asked what would happen should the fees not come in. Mr. Biaggi answered the program would be scaled down as deemed appropriate. He indicated the program would only be scaled up to where it is needed. He said the agency is unaware at this point how much interest the program will generate in communities throughout the state.

Senator Raggio asked what incentive could be used to prevent this program from being a cost to the state.

Senator Alice Constandina (Dina) Titus, Clark County Senatorial District No. 7, explained brown fills are areas that have been contaminated. She said these areas are undeveloped because developers fear the cost of future liability. She stated S.B. 363 is supported by the business communities because it provides incentive to clean up the area and receive a "clean bill of health," and it takes the "deep pockets" element out of the liability problem for the future.

Senator Titus indicated about 40 sites have been identified where businesses may want to utilize this program. She explained businesses would not be held responsible for liability in the future if they pay the fee, clean up the property, and have the property inspected.

Senator Raggio asked whether owners of properties would be required to use the program or it would be voluntary. Senator Titus replied the program would be strictly voluntary. Senator Raggio asked whether the act could be used to force individuals to use the program. Senator Titus replied "No, sir."

Ray Bacon, Lobbyist, Nevada Manufacturers Association, indicated the association supports S.B. 363. He said this type of legislation has been passed in many eastern industrial states and the program has proven successful in the resulting reuse of industrial areas.

Joseph L. Johnson, Lobbyist, Sierra Club, Toiyabe Chapter, indicated the Sierra Club supports S.B. 363. He mentioned a proposed amendment which is also supported by the Sierra Club.

Senator Raggio asked who was presenting the proposed amendment to S.B. 363. John P. Sande III, Lobbyist, Nevada Bankers Association, indicated a letter addressed to Douglas Zimmerman, Bureau Chief, Bureau of Corrective Action (Exhibit C), outlined the proposed amendment to S.B. 363. He said the Nevada Bankers Association supports the bill and would like to add language clarifying that lenders with security interest in a property might be subject to this bill. Mr. Sande noted there are many lenders in Nevada "sitting" on property that may have contamination. He pointed out that although lenders are not responsible for contamination on a property, they are not utilizing properties because of concern about future liability injunctions in connection with possible contamination.

Mr. Sande indicated two changes are proposed for S.B. 363. He said the first change is in section 5 of S.B. 363 and is only "cosmetic." He explained the change would assure the measure would not only address a pending investigation or enforcement action, but clarifies that it refers to the individual, or individuals, who own, manage, or control a property.

Continuing, Mr. Sande explained the second suggested change would be in section 18 of S.B. 363, wherein it would be clarified that the section would apply to lenders who foreclose and within a reasonable period of time attempt to sell the property to a third party who may want to utilize the program. He noted the lender would not be the responsible party and subject to liability by foreclosing and selling the property. Mr. Sande stated the language is supported by the Division of Environmental Protection and the State Environmental Commission.

Senator Raggio disclosed he would not vote or participate in the action of S.B. 363 because his business associate, Mr. Sande, is involved with it.

Senator Coffin said he would abstain from voting on the amendment only.

Senator Raggio closed the hearing on S.B. 363 and opened the hearing on S.B. 432.

Senator Jon C. Porter, Sr., Clark County Senatorial District No. 1, said S.B. 432 was requested by the Southern Nevada Strategic Planning Authority. He said there were numerous hearings and meetings with "stakeholders" and S.B. 432 represents the compromise that was reached.

Elizabeth N. Fretwell, City of Henderson, Southern Nevada Strategic Planning Authority (SNSPA), indicated S.B. 432 establishes a committee comprising both public and private sector members who would review existing and proposed new programs, conduct technical studies, and review the regulatory and funding structure for air quality control mechanisms in southern Nevada over the next 18  months. She said those duties would be performed through a consultant.

Ms. Fretwell explained the amount of the fiscal note is $500,000 and the funding would be provided by the motor vehicle air pollution control budget account. She said $400,000 would be allocated specifically to committee activities, and $100,000 would be allocated to the DMV&PS to fund the heavy-duty diesel, on- road testing program in Clark County.

Senator Raggio inquired whether this was to be a onetime study or an ongoing committee. Ms. Fretwell replied S.B. 432 is for a onetime study; however, it is anticipated the committee would open communication for a long-term relationship between impacted industries and regulators. She opined that is the reason the industries support the measure.

Senator Raggio pointed out S.B. 432 proposes appropriating funds from the pollution control account. He said the Senate Committee on Finance is reluctant to fund other proposals because the funding will come from Clark and Washoe Counties. He stated the issue would need to be discussed with the committee.

Ms. Fretwell indicated the original plan was for Washoe County to participate in the proposed study; however, the county did not wish to do so. She said that in the past Washoe County received grants from the air pollution fund. Ms. Fretwell expressed the opinion that this proposal would have an adverse impact on Washoe County’s requests.

Russell Roberts, Department of Comprehensive Planning, Clark County, emphasized the importance of the working group and the technical studies that would be supervised by the group. He said Clark County would not need assistance with the pollutants with which it is currently dealing; however, it may need assistance for a new particulate standard, a new ozone standard, and a regional haze program. He indicated Clark County would share the responsibility for improving visibility in the Grand Canyon and the Colorado Plateau. Mr. Roberts said S.B. 432 would provide resources and a working group to review the issues. He stated the measure would provide a good start to handling the issues.

Senator Jacobsen asked whether the issue addresses an isolated area or all of Clark County. Mr. Roberts replied the proposed committee in S.B. 432 would answer that question.

Clifford J. (Jim) Parsons, Emission Program Manager, Advisory Committee for the Control of Vehicle Emissions, Department of Motor Vehicles and Public Safety, indicated Washoe County, as well as Clark County, would benefit when the program to test heavy-duty diesels is initiated. He said such a program would help research appropriate test procedures on heavy-duty diesels.

Senator Jacobsen asked whether oil-burning furnaces would be included in the proposed committee’s area of study. Mr. Roberts replied that on a larger scale one of the issues pertaining to both ozone and regional haze may be power generation. He said an assessment would be required to ascertain the committee’s contribution to the pollution issue.

Senator Coffin asked whether the Senate Committee on Finance could receive clarification regarding how much money is in the pollution control account. John Drew, Acting Director, Department of Motor Vehicles and Public Safety, indicated the department would provide the information to the committee.

Mr. Miles said the pollution control account is projected to have a reserve of about $4.3 million by the end of the present fiscal year. He pointed out there are proposals in The Executive Budget for expenditures over the next 2 years from this account that will decrease the reserve to about $2.1 million. He stated there are other requests for funding from the pollution control account.

Senator Coffin asked the DMV&PS to provide information regarding the amount expected to be drawn from the fund over the next 2 years. Mr. Drew replied the department would supply the requested information that day. Senator Coffin asked whether the information would include the next 2 years, and Mr. Drew noted the information has been projected for a 7-year period.

Mr. Capurro indicated his organization supports the provisions of S.B. 432, particularly the allocation of funds for the study and the DMV&PS. He said the Nevada Motor Transport Association has supported diesel emission testing in the past and will continue to do so. He stated the measure will provide a microcosmic look at surface streets in Clark County area, not just interstate highways.

Peter D. Krueger, Lobbyist, Nevada Petroleum Marketers and Convenience Store Association, indicated his association supports S.B. 432. He said Clark County would be able to provide a solution to its current air pollution problem without the study proposed in S.B. 432. He speculated the solution could lead to a fuel that would be refined only for Las Vegas. Mr. Krueger asserted the solution would present a tremendous fuel logistics problems because it is a special product that would impact the cost of fuel for the area.

Further, Mr. Krueger indicated the definition of "hazy day" has not been defined. He said the petroleum industry requires "good science" to implement a solution plan. He urged the committee to pass S.B. 432.

Senator Raggio asked the reason $500,000 is requested for the study. He declared the cost of a study has historically been placed in a bill; for example, if a bill states $1 million, the cost is $1 million; if a bill states $300,000, the cost will be $300,000. The senator reiterated, "Why $500,000?" Mr. Roberts replied the size of the study proposed by S.B. 432 is similar to studies conducted in the past and the costs are similar.

Senator Raggio inquired whether there was a list of the costs. Mr. Roberts said he would provide a list of costs to the committee. He indicated $100,000 was allocated for diesel program equipment, which would leave $400,000 for technical studies. He stated the costs are on the same scale as studies presently being conducted.

Senator Raggio requested the DMV&PS supply the committee with specifications on the use of $100,000 for the equipment required for the diesel program. He inquired whether the proposal intended to use $400,000 for a consultant. Mr. Roberts pointed out "consultant language" was not included in S.B. 432 to ensure no single party or governmental agency could move the study in any particular direction. Senator Raggio asked the reason an agency would take that particular action. Mr. Roberts explained that "everyone has their own view of environmental issues, which is the reason for a stakeholder group comprising many viewpoints." He said that should an outside consultant not perform the study, it would be left to the regulatory agencies. It was determined a disinterested third party should perform the study to prevent opposition to its outcome, Mr. Roberts remarked.

Senator Raggio said it would be helpful for the information to include comparable studies and the cost of potential consultants to help the committee understand the reason this amount of funding is necessary. Mr. Roberts indicated he would supply the information within a day or two.

Cheryl C. Blomstrom, Lobbyist, Nevada Chapter of Associated General Contractors, indicated the Nevada Chapter of Associated General Contractors support S.B. 432.

Ray E. Bacon, Lobbyist, Nevada Manufacturing Association (NMA), indicated the industrial and point-source emissions occurring in Clark County probably emanate from industries with the most data collected on them. He said the NMA believes the proposed study will be a major step toward sorting out the confusion regarding how much air pollution is caused by industrial sites, versus how much is caused by mobile sites. Mr. Bacon stated the study would help legislators make good decisions in the future regarding clean-up measures and regulation of industries.

Senator Raggio requested information regarding what types of groups perform air pollution studies.

Mr. Johnson said the Toiyabe Chapter of the Sierra Club opposes the bill as presently written. He stated the Sierra Club supported the recommendations of a study group similar to the one proposed in S.B 432. He indicated that particular study group recommended specific permissive language for the Clark County Board of Health to promulgate regulations in order to begin the process with regional haze and to control emissions from heavy-duty diesel vehicles. He reported the Clark County Board of Health had indicated it would need permissive authorization but that did not mean the county would immediately implement the programs. He pointed out there would be a need to study the science for the programs to develop and back up what had been proposed. Mr. Johnson asserted S.B. 432 would allocate $500,000 for a study that would duplicate many other studies which have already been conducted. He said the Desert Research Institute recently completed a similar study to what is proposed in S.B. 432.

Further, Mr. Johnson stated the studies performed on air quality control are adequate and are partially documented on a handout entitled "Comments on S.B. 432 ¾ Sierra Club Clean Air Project" (Exhibit D). He called attention to the list of references on page 2 of Exhibit D and explained it is only one page of a 50-page document produced by the World Health Organization.

Senator Raggio asked whether the studies were specific to Clark County. Mr. Johnson replied no but said the studies addressed the overall, broader aspect of diesel vehicles operated throughout the world. He agreed site-specific studies would be needed before any regulations could be implemented.

Senator Raggio indicated it was his understanding "the diesel aspect" of S.B. 432 is to acquire equipment for testing. Mr. Johnson said the Sierra Club does not oppose the allocation for testing equipment, but he stated there are adequate provisions regarding disbursement of the fund for the division to apply for a grant to fund the acquisition of testing equipment.

Senator Raggio said, "Assuming Mr. Johnson’s assessment of the division’s ability to apply for grant funds is correct, what is the harm in passing S.B. 432 and performing the studies?" Mr. Johnson replied the measure would delay the Clark County Health Board’s implementation of the process to adopt regulations. He said should S.B. 432 pass in its original form, the adoption of the regulations would probably take 2 years to accomplish. Senator Raggio reflected a benefit of the bill is that stakeholders agreed to "sign on" and be part of the process. Mr. Johnson replied:

In summary, Mr. Johnson emphasized the studies need to go forward. He indicated the Sierra Club has taken the position that there is adequate process for funding these measures in the air quality fund, as well as an established procedure for prioritizing their distribution.

Senator Jacobsen asked whether federal funds were available for air studies to determine from whence pollution emanates in the Grand Canyon and the Colorado Plateau. Mr. Biaggi replied no funds will be forthcoming from the federal government with regard to regional haze and pointed out the issue is another unfunded mandate.

Senator Raggio closed the hearing on S.B. 432 and opened the hearing on S.B. 485, which has been referred to the committee from the Senate Committee on Judiciary.

Anne B. Cathcart, Special Assistant Attorney General, Office of the Attorney General (AG), indicated S.B. 485 resulted from the work of many people from both the public and the private sectors. She said S.B. 485 is an effort to address crime committed through the use of technology. She noted the measure addresses identification of criminal activities such as slamming, cramming, computer viruses, or using encryption to conceal criminal activities. Ms. Cathcart explained that these activities need to be identified, defined, and made criminal activities within the boundaries of the definition of misuse, and penalties for such misuse need to be stated. She explained these activities have promoted civil action, for example, if a company has been damaged because of intrusion into its computer system with the intent to steal information or disrupt its business.

Continuing, Ms. Cathcart pointed out the Office of the Attorney General worked with the Senate Committee on Judiciary to amend S.B. 485. She remarked the collaboration that went into constructing S.B. 485 made it a "very strong" bill, and it is only a beginning. She said the National Association of Attorneys General determined the problem will be around for a long time. Ms. Cathcart indicated the jurisdictional issue is very complicated and will require vast amounts of time and cooperation to resolve state, national, and international technology definitions of such crimes, as well as acceptable penalties.

Further, Ms. Cathcart noted the recommendations of the High Technology Task Force will ensure Nevadans are protected from technology criminals. She indicated S.B. 485 consists of two portions: one is identification of the criminal activity, and the other provides an advisory board appointed by the Governor. Ms. Cathcart said the board would be made up of members from the public and private sectors and two legislators. She declared the board would meet quarterly to provide guidance and planning. Ms. Cathcart mentioned the items are referenced in a letter from Attorney General Del Papa to Senator Raggio, dated May 3, 1999 (Exhibit E).

Ms. Cathcart maintained that fees and assessments are not viable to fund this task force, and the General Fund is limited. She pointed out funding of such a project would be expensive, and the issue needs to be addressed in the public and private sectors and at the city, county, state and federal levels.

Commenting further, Ms. Cathcart explained the reason for proposing S.B. 485 in this particular format is that the executive director will be responsible for making the initiative "mostly" self-supporting with the ability to seek federal government or private foundation grants.

In summary, Ms. Cathcart indicated section 8 of S.B. 485 authorizes the appointment of an executive director, and section 9 of S.B. 485 authorizes the appointment of a secretary. She said the board originally was to be funded from the General Fund; however, it is now anticipated the Office of the Attorney General will receive about $400,000 in reimbursements from the national tobacco companies for attorneys’ fees and costs expended in the tobacco litigation settlement. She said the Office of the Attorney General requests authorization to use those funds for the executive director and secretary positions. Ms. Cathcart indicated she discussed S.B. 485 with Brenda Erdoes, Legislative Counsel, LCB, which resulted in a recommendation that the General Fund portion be removed and tobacco settlement funds be allocated for this purpose. She noted Ms. Erdoes indicated the executive director and secretary positions should not be funded until the Office of the Attorney General receive the funds from the tobacco settlement.

Senator Raggio asked how the forensic equipment requested in S.B. 485 would be funded. Ms. Cathcart replied the forensic equipment request was removed from the bill because it was not tied to the work of the advisory board. Senator Raggio inquired whether tobacco funds could be used to purchase the forensic equipment. Ms. Cathcart answered it was her understanding the attorney general would be open to that suggestion. Senator Raggio observed that reimbursement funds not be allocated to a specific purpose, they would be allocated to the General Fund. Ms. Cathcart replied, "I believe so, Senator."

Kevin Higgins, Chief Deputy Attorney General, Director, Workers’ Compensation Fraud Unit, Office of the Attorney General, indicated one of the motivations behind S.B. 485 is the need for education and training. He pointed out that every police officer in the state must be able to recognize these crimes. He said police units have managed to solve crimes based on the data that exists in the computer at the crime scene. Mr. Higgins emphasized the importance of training officers and prosecutors to present these kinds of cases to a jury. He said the Office of the Attorney General receives many requests from rural law enforcement for help on this type of crime; however, the attorney general’s office has neither the assets nor the authorization to come to their aid.

Mr. Higgins reflected this is only the beginning of "tackling" the growth of white-collar crime into the next century. He pointed out the state needs the tools to recognize and prosecute technological crimes to remain "ahead of the game."

Senator Raggio asked from whence the funds for training would come. Mr. Higgins replied the Office of the Attorney General anticipates providing training through the White Collar Crime Center (WCCC). He said the state will have to convince the WCCC to provide the training in Nevada at no cost. Presently the training would not require any additional expenditures, Mr. Higgins remarked.

Senator O'Donnell asked whether the proposed advisory board would not be better served in a law enforcement agency than in the Office of the Attorney General. He indicated the recent trend has been to utilize a prosecutorial agency rather than a police agency for this type of crime. He declared a prosecutor should be unbiased when reviewing a case; however, the absence of bias would be difficult to achieve when the regulatory system is located within the Office of the Attorney General. In response, Mr. Higgins replied the Office of the Attorney General would have the responsibility for coordinating initiation of the advisory board. He indicated the cases themselves would be prosecuted in local jurisdiction courts and would not likely be prosecuted by the Office of the Attorney General.

Senator O'Donnell wondered whether or not the Office of the Attorney General would accept some of the funds being allocated to Washoe County or Clark County for training. Ms. Cathcart replied that part of the concept of S.B. 485 is the need for training throughout the entire state for officers and investigators, as well as prosecutors and judges. She said the intent is to help provide training resources for all groups involved.

Senator Neal asked whether S.B. 485 provides the capacity to accomplish the tasks necessary to review, define, and train the necessary units involved in technology crimes. He pointed out there would be problems relating to search, seizure, and venue, and wondered whether the proposed advisory board would be equipped to deal with the issues. He indicated the U.S. Department of Justice distributed a 141-page guideline regarding this area of crime. The senator mentioned that the only technical expertise documented in S.B. 485 is the expertise of an individual from the information office.

Ms. Cathcart replied Senator Neal’s point was well-taken. She also expressed concern there may not be sufficient resources to accomplish the task. She indicated S.B. 485 was the first step to creating a mechanism to accomplish the tasks. Ms. Cathcart noted the Senate Committee on Judiciary suggested including two legislators on the advisory board. She said the rationale behind the suggestion was that this will be an ongoing problem and it would be helpful to have legislators on the advisory board who would understand the activities and be able to report the findings to the Legislature.

Senator Neal noted S.B. 485 addresses a highly technical area which presents new problems to law enforcement agencies. He pointed out the federal government has documented this kind of crime and published guidelines on how to handle the issues. Mr. Higgins replied S.B. 485 would set up the framework. He said the idea behind the task force system would be to allow local law enforcement units to provide technologically trained individuals to help solve high-technology crimes. He declared the state has "a few" people with applicable expertise; however, more people are needed to handle the caseload. Senator Neal suggested the advisory board consist of individuals with technological expertise. Mr. Higgins indicated the task force that would prosecute and investigate the crimes would consist of people with technological expertise.

Senator Raggio pointed out a letter from Internet Alliance (Exhibit F) regarding the organization’s opposition to section 21 of S.B. 485, which was received by each member of the committee.

Senator Raggio recessed the hearing on S.B. 485 until after the Senate floor session and opened the hearing on budget closings from Closing List No. 28 (Exhibit G).

DEPARTMENT OF MOTOR VEHICLES AND PUBLIC SAFETY

Debbra King, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), presented the overview of the Department of Motor Vehicles and Public Safety (DMV&PS) on page 1 of Exhibit G. She said the major issue faced by the DMV&PS is staffing and she indicated the department requested 50 new positions over the biennium in 5 different accounts. Ms. King pointed out Project Genesis is in a transition period and the DMV&PS is conducting training, testing, and implementation of the program. She said that on March 8, 1999, the Joint Subcommittee on Public Safety/Natural Resources/Transportation learned that 85 of the 825 positions authorized for the motor vehicle branch were vacant, and 19 positions authorized by the 1997 Legislature had never been filled. She stated the joint subcommittee recommended not authorizing any additional positions, eliminating $1 million in vacancy savings, and instructing the department to fill the 83 existing vacant positions as quickly as possible. Ms. King indicated the recommendation would provide the department immediate resources to meet both customer services and Project Genesis staffing needs. She said the subcommittee voted to include language in the General Appropriations Act which would allow the department to approach the Interim Finance Committee (IFC) for approval to move and reclassify staff as Project Genesis stabilizes and staffing needs are better known. The action would provide the department maximum flexibility to meet its staffing needs, Ms. King remarked.

Continuing, Ms. King said reorganization of the DMV&PS was also discussed by the Joint Subcommittee on Public Safety/Natural Resources/Transportation. She said the reorganization was approved by the members of the subcommittee. She noted the adjustments made due to reorganization of these budgets are extensive.

Further, Ms. King reported that decision unit E-805 pertains to a classification study conducted by the Department of Personnel. She said the reclassification study will be on the June IFC agenda at a cost of $2.1 million in Fiscal Year (FY) 2000 and $2.5 million in FY 2001.

Senator Raggio asked why the IFC would deal with this issue and wondered whether the Legislature should address it now. Mr. Miles replied that should the Legislature approve the reclassification study it would not be required that the study go to the IFC.

Senator Raggio asserted the Senate Committee on Finance should address the joint subcommittee recommendations on the new positions issue. He said it is appropriate for the department to fill the vacant positions and assess what will be needed for Project Genesis when it is fully implemented. The senator asked Mr. Comeaux whether the solution would be acceptable to the budget office.

John P. (Perry) Comeaux, Director, Department of Administration, replied he had conferred with John Drew, Acting Director, Department of Motor Vehicle and Public Safety, who indicated he would prefer to have the requested additional staff. Mr. Comeaux indicated that filling the 83 positions would improve the immediate staffing problems of the department.

Senator Raggio inquired why the vacant positions had not been filled. Mr. Comeaux explained there were special circumstances regarding salary savings and recruiting problems. Mr. Comeaux pointed out that should the budget be closed as recommended by the joint subcommittee, the department would fill as many of the open positions as possible.

Senator Raggio noted the motion on the staffing issue would be carried throughout the Department of Motor Vehicles and Public Safety budgets.

Senator Raggio asked Ms. King to clarify the reorganization issue. Ms. King replied the reorganization would eliminate the Registration Division and the Drivers License Division. She said the staff would be appropriately distributed among the new divisions, which would be the Compliance Enforcement Division, the Management Services Division, the Field Services Division and the Central Services Division.

Senator Raggio asked how the Assembly Committee on Ways and Means voted on the reorganization issue. Ms. King replied the Assembly committee voted not to allow the reorganization. Senator O'Donnell indicated the joint subcommittee voted to reorganize the DMV&PS Motor Vehicle Branch, with Senator Jacobsen the only dissenting vote.

Senator Raggio asked Senator Jacobsen to share his reasons for voting against the reorganization. Senator Jacobsen said he conferred with many employees of the DMV&PS who indicated the reorganization was unnecessary.

Senator Raggio questioned the advantages of the reorganization. Mr. Comeaux said the department indicated the reorganization was more critical than the staffing issue. He indicated reorganization would allow the department to structure the staff to accommodate operation of Project Genesis. He commented the existing organizational structure is "nonsensical" based on the way the DMV&PS will operate when Project Genesis is implemented. Mr. Comeaux declared the purpose of the reorganization is to allow the department to discontinue departmentalization of the registration, licensing, and titling functions. He pointed out the current system has people "running hither and yon" to take care of their motor vehicle needs. He explained the reorganization would allow citizens one place to handle all their motor vehicle business. He said that arrangement would be reflected in the budget of the Field Services Division. Mr. Comeaux indicated department staff expressed concern that some employees were uneasy about the reorganization, but he said anxiety is expected when people are faced with a major change. He stated the department determined the reorganization is necessary and will be beneficial.

Senator Jacobsen indicated a number of employees had been requested to move to a different department or were removed, or demoted. He said he observed that some current positions were recommended for a three or four-grade increase and suspected the department was attempting to circumvent the system regarding salary raises. The senator opined there was no leadership in the department "from the top on down."

Senator O'Donnell indicated it is necessary to address the situation. He pointed out that computerization of an agency involves a great deal of manipulation of positions, combination of positions, and deletion of positions. The senator stated some individuals will "have to get organized," some will lose tasks, and others will have to make a change. He commented that should the department not be reorganized, the Legislature would be forced to spend another $1 million to reprogram the computers to allow the two divisions to run separately. Senator O'Donnell explained the Driver’s License Division would have to address drivers licenses, and the Registration Division would have to address registration. He reiterated the computers would have to be reprogrammed at a cost of $1 million. He added that when the Legislature decides to reorganize the system, the cost will be another $1 million to "program it back."

Senator Raggio inquired whether there was any reason the reclassification issue could not be approved at this time, and clarified that the issue was implementation of the study. Senator Neal suggested the IFC could approve the money for the study.

Ms. King explained the issue was the reclassification of the "NPD 19 study," which is independent of the reorganization and based upon existing job duties. She asserted the issue needs to be approved now, or in the budgets, because IFC does not have any Highway Fund money to appropriate.

Compliance Enforcement – Budget Page DMV-1 (Volume 3)

Budget Account 201-4740

Ms. King indicated this budget represents the Compliance Enforcement Division, is primarily funded through transfers from other accounts, and will perform the activities previously conducted by the Bureau of Enforcement.

*****

Field Services – Budget Page DMV-7 (Volume 3)

Budget Account 201-4735

Ms. King said the Joint Subcommittee on Public Safety/Natural Resources/ Transportation adjusted this budget for the staffing differences, the addition of the $1 million, vacancy savings, and some technical adjustments. She indicated these are the actual field services offices and their staffs.

*****

Central Services – Budget Page DMV-17 (Volume 3)

Budget Account 201-4741

Ms. King noted this budget account will be used to conduct the back office centralized functions, such as mail-in renewals, and reflects the adjustments and transfers from the driver’s license and registration accounts. Senator Raggio clarified the action being taken by the committee would be consistent with its action on the reorganization.

*****

Management Services – Budget Page DMV-24 (Volume 3)

Budget Account 201-4742

Ms. King indicated this is a new budget account and will contain the Management Analyst position and program staff who develop programs, policy manuals, and procedures and will subsequently conduct the analysis of the programs. She declared this action will reflect the reorganization that was just approved.

*****

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

Budget Account 201-4716

Ms. King indicated the issues in this budget account are the same regarding staffing, reorganization, and technical changes; however, she noted there was an issue regarding the "digitized photo" license. She said the department added a charge to the driver’s license fee to cover the cost of the photograph. She pointed out Nevada Revised Statutes 287.347 mandates the department to increase the driver’s license fee up by to $1 to defray the cost of the digitized photo. Ms. King said the department currently charges an additional $1 for the cost of the digitized photo; however, the cost would be approximately $3 should digitized photos be used. Therefore, the joint subcommittee voted to fund the additional cost for digitized photos through an increase in that fee, Ms. King remarked.

Senator Raggio asked, "What are digitized photos?" Senator Rawson explained that rather than taking the photograph on a Polaroid camera, the photographs are computer-generated.

Ms. King indicated The Executive Budget recommended the digitized photos be funded through a Highway Fund appropriation, but the Joint Subcommittee on Public Safety/Natural Resources/Transportation recommended continuing the tradition of charging the license holder, which would require a statutory change.

Senator O'Donnell declared the Governor would veto a bill containing a fee increase for driver’s licenses. He pointed out the fee for a digitized license is approximately $2.12, versus the .90 cents charged presently. He noted that funding digitized licenses with a general appropriation from the Highway Fund is being considered and speculated it was probably the manner in which the bill would be passed out of the Senate Committee on Transportation.

Senator Raggio inquired whether closing the budget in this manner would differ from the way in which the Assembly Committee on Ways and Means closed the budget. In response, Ms. King indicated the Assembly Committee on Ways and Means voted to increase the driver’s license fee.

*****

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

Budget Account 201-4717

Ms. King noted that in this budget account the subcommittee authorized the continuation of two Program Assistant positions which were authorized by the 1997 Legislature but were scheduled to "sunset" June 30, 1999. She said the joint subcommittee indicated the positions were necessary to support continued receipt, or enhance the receipt, of special fuel taxes. She declared the subcommittee recommended the budget without the additional positions and some technical adjustments.

*****

Registration – Budget Page DMV-47 (Volume 3)

Budget Account 201-4718

Ms. King indicated, consistent with the overview, the joint subcommittee did not approve the additional positions and recommended some technical changes for cost and number of items purchased. She noted the subcommittee also:

• Reduced in-state travel in decision unit E-175 by $11,215 in each year of biennium.

• Eliminated computer maintenance contracts because they are being replaced under Project Genesis.

• Eliminated furniture because there is a one-shot appropriation for new modular furniture for the Carson City office.

*****

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

Budget Account 201-4731

Ms. King indicated the Joint Subcommittee on Public Safety/Natural Resources/Transportation approved The Executive Budget with some technical corrections for cost and elimination of chairs funded in other areas, as well as the reorganization.

*****

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

Budget Account 101-4722

Ms. King said there were technical adjustments in this budget account. She pointed out this budget account received a great deal of discussion regarding funding for the Tahoe Regional Planning Association (TRPA). Referring to page 26 of Exhibit G, Ms. King indicated the subcommittee voted to close this budget account in accordance with the general funding recommendations in The Executive Budget. However, the Joint Subcommittee on Public Safety/Natural Resources/Transportation voted to request an amendment to S.B. 511 which authorized additional use of this account to sunset the ability to fund TRPA, "and Parks and Forestry positions from ongoing funding of this account after FY-2000."

Senator Raggio commented that the committee differs from the Assembly Committee on Ways and Means regarding funding of the TRPA. Senator O'Donnell indicated a decision that came out of the discussion was to fund TRPA out of the pollution control fund for this biennium with a stipulation that next year TRPA would be funded out of the General Fund, but the money would be replenished out of the pollution control accounts in Washoe County and Clark County. Senator Raggio recalled the committee’s action was to fund the base portion of the budget and not the enhancements, which is different than the action taken by the Assembly Committee on Ways and Means. Senator O'Donnell said that was also part of the committee’s action.

Senator Raggio indicated this budget account would be held.

Project Genesis – Budget Page DMV-80 (Volume 3)

Budget Account 201-4739

Ms. King indicated this budget account was created by the 1997 Legislature to identify the costs associated with the development and implementation of Project Genesis. She said the account will be eliminated at the end of the 2001 biennium. She noted there was a technical adjustment to remove the reorganization costs that were added to the individual budgets, and the Joint Subcommittee on Public Safety/Natural Resources/Transportation voted to continue the IFC oversight committee for Project Genesis on an ongoing basis.

*****

Automation – Budget Page DMV-88 (Volume 3)

Budget Account 201-4715

Ms. King said the subcommittee voted to close this budget account with technical adjustments to remove items funded in Project Genesis. Answering a question from Senator Raggio, she indicated this is the legacy system. She said some of the computer programmers from Project Genesis will be transferred into this budget account for cross training effective July 1, 1999.

*****

Drug Commission – Budget Page DMV-101 (Volume 3)

Budget Account 101-4704

Ms. King testified this budget account was on the consent agenda and the staff recommended closing it in accordance with the Governor’s recommendation. Senator Raggio asked whether the Drug Commission is active. Ms. King answered the Drug Commission is active and there are one or two bills to more clearly define its responsibilities. Senator Raggio commented the performance indicators show "absolutely nothing" and asked whether the Drug Commission meets quarterly. Ms. King responded the Drug Commission did not meet quarterly during FY 1998 because there was a delay in appointment of the positions of the commission members. Senator Raggio asserted the Drug Commission should be requested to submit a report at each IFC meeting.

Senator Raggio entertained a motion on closing the budget account to include a Letter of Intent that the Drug Commission submit a report at each meeting of the IFC.

*****

Dignitary Protection – Budget Page DMV-137 (Volume 3)

Budget Account 101-4738

John P. (Perry) Comeaux, Director, Department of Administration, referred to his memorandum dated May 5, 1999, shown on page 32 of Exhibit G. He indicated he had been informed by both the administration at DMV and the head of the dignitary protection unit that "a couple of things" had not been addressed in this budget. In regard to out-of-state travel, he noted the number of trips recommended in The Executive Budget was based on the reduced amount of travel by Governor Miller in the base year. He indicated the number of trips originally recommended have already been exceeded this fiscal year, and it would be reasonable to assume the situation will occur in the 2 years of the biennium as well. Mr. Comeaux pointed out training funds were not included in the budget and explained new hires would be required to attend a course in protection of public officials. He said replacement of four computers that were not Y2K (Year 2000) compliant was not budgeted and there is a request for funds to replace three of them. Funding is requested in each year of the biennium to replace two original surveillance cameras in the Governor’s Mansion, Mr. Comeaux remarked.

In response to a question by Senator Raggio, Mr. Comeaux stated the total amount of the budget is $23,619 in FY 2000 and $15,554 in FY 2001.

*****

Highway Patrol – Budget Page DMV-140 (Volume 3)

Budget Account 201-4713

Ms. King stated that in the base decision unit the Joint Subcommittee on Public Safety/Natural Resources/Transportation voted to reduce the vacancy savings by half, or approximately $416,000 in each year of the biennium, to reflect the public safety nature of the Nevada Highway Patrol. She indicated the subcommittee reviewed the proposed staffing formulas for urban, commercial, and rural staffing. While the results of the staffing formula were reasonable for this biennium, the subcommittee did not accept it "100 percent," preferring to "receive some history and reporting" in regard to it. She said the subcommittee noted that after troopers were added for FY 2000-01, and based upon the staffing formula, no additional troopers would be needed in the rural areas unless more roads were built or the speed limit decreased. Ms. King pointed out the subcommittee eliminated decision unit E-383, a second highway patrol facility in Las Vegas, in FY 2000. She said the highway patrol currently has a capital improvement program (CIP) for a public safety building which should be completed by December 26, 2001. She indicated the subcommittee determined the highway patrol could operate in the current location without difficulty.

Continuing, Ms. King mentioned equipment was adjusted to reflect current prices. She indicated the joint subcommittee did not approve the purchase of the Snocat in decision unit E-720. Senator Raggio asked the purpose of the Snocat. Ms. King answered the Snocat would have been used for the highway patrol to access mountaintop communication sites. Senator Raggio queried the reason the subcommittee turned down the request for a Snocat. Ms. King replied the subcommittee determined the highway patrol could share a Snocat with other state agencies.

Senator O'Donnell inquired whether the Vehicle Investigation Project for Enforcement and Recovery Program (VIPER) Program was included in this budget. Ms. King indicated the VIPER Program was included in the Nevada Department of Investigations (NDI) budget which closed with a recommendation it be added to the add-back list. Senator O'Donnell pointed out the committee dealt with vacancy savings in the Nevada Highway Patrol budget. For the committee’s edification, he said an anomaly occurs due to hiring practices which cause a delay between the time an individual is hired and the time the person is "put on the street." He indicated this situation builds up vacancy savings and if those savings are eliminated from the next year’s budget, officers will not be hired because of the time delay which leaves another vacancy savings gap. Therefore, should vacancy savings be taken continually, as time goes on there will be no officers left, Senator O'Donnell remarked. Senator Raggio clarified the vacancy savings had been put back into the budget.

*****

Parole and Probation – Budget Page DMV-180 (Volume 3)

Budget Account 101-3740

Ms. King indicated the Joint Subcommittee on Public Safety/Natural Resources/Transportation recommended staffing changes to reflect revised caseload projections received in March 1999. She said staffing needs were reduced by moving three staff forward from FY 2001 to FY 2000 and reducing some of the staff needed in 2001. This resulted in changes in staffing in decision unit E-376, which is the 70:1 caseload recommended by the Governor.

Further, Ms. King said there was an adjustment to decision unit E-377, which is the caseload for sex offenders. She said staff was added to reflect a 45:1 caseload. She indicated the subcommittee voted to approve to contract for psychosexual evaluations and the division determined this would be a cost savings. Ms. King pointed out there are currently five positions authorized. She said the division wished to retain one of the accounting positions in an attempt to continue receiving fees. She stated it was a General Fund increase of $385,000 in FY 2000 and $201,000 in FY 2001.

Continuing, Ms. King indicated the subcommittee revised the budget to reflect new residential confinement fees. She said the new contract requires the contractor to collect the fees that resulted in General Fund savings of $222,000 in FY 2000 and $269,000 in FY 2001. She declared that in E-806 and E-807 the subcommittee recommended using 3 of the 5 positions recommended by The Executive Budget for prerelease, and use 3 of those in the sex offender registration unit. This would allow the division to get caught up in the "very critical sex offender issue." Ms. King indicated the sex offender registration staff are program assistants and the prerelease unit are program officers; therefore, the subcommittee action saved $16,000 in FY 2000 and $5,000 in FY 2001.

Finally, Ms. King said the subcommittee recommended a pilot program to "civilianize" the presentencing investigation activity, or the court services unit. She pointed out this is largely a paper-intensive unit and the division indicated they would be able to convert three positions in northern Nevada and four positions in southern Nevada. She noted these would be Program Officer III positions and while the salary savings are "not that significant" because it is only one pay-grade different, the savings are realized by having eliminated the need to purchase guns and vests and train the officers at the shooting range each quarter. Ms. King indicated the seven positions will save $49,000 in FY 2000 and $23,000 in FY 2001.

Senator Coffin inquired whether the shortfall in mileage imposed upon parole officers was addressed by the subcommittee. Ms. King explained the mileage issue related to a revenue collection issue in 1998 and 1999, which has been resolved. She indicated parole officers are fully funded for 1,000 miles a month per officer for travel in their cars. Senator Coffin suggested the amount should be more than 1,000 miles a month. Ms. King responded the mileage amount has historically been 1,000 miles a month; however, because of the revenue shortfall the amount was reduced. In response to comments by Senator Coffin, she indicated all motor pool costs were calculated based upon 1,000 miles a month and the number of parole officers needing cars.

*****

Parole Board – Budget Page DMV-244 (Volume 3)

Budget Account 101-3800

Ms. King said the subcommittee voted to approve this budget account as recommended by the Governor with a technical adjustment to reduce computer cost and perform the cost allocation for the public safety "infotechnology account."

*****

NEVADA DEPARTMENT OF TRANSPORTATION

Administration – Budget Page NDOT-1 (Volume 3)

Budget Account 201-4660

Ms. King indicated the subcommittee voted to close this budget account with the recommendations and modifications recommended in The Executive Budget. She said there were cost changes for the Washington Office and the addition of cost due to the implementation of the integrated financial system (IFS).

Senator Raggio expressed the understanding the Assembly Committee on Ways and Means decided not to fund the Washington Office and asked whether the money had been deleted from this budget account. Ms. King indicated it had been. She said, "By not funding the Washington Office the money was deleted from this budget account."

SPECIAL PURPOSE AGENCIES

Retired Employee Group Insurance – Budget Page SPECPURPOSE-18 (Volume 3)

Budget Account 101-1368

Ms. King said this budget account was amended to reflect the increase in the proposed retired employee group assessment. She explained it is an assessment against the active state payroll and is used to fund the state subsidy for retirees.

Senator Raggio inquired about the rates. Ms. King pointed out the rates in The Executive Budget were .0101 and .1151. She said the rates were increased in this budget to .0112 and .0132. Senator Raggio asked whether it was requested by the Department of Administration, and Ms. King answered no. She indicated the Department of Administration recommended the shortage in this account not be funded.

Senator Coffin noted the Assembly Committee on Ways and Means agreed to include a Letter of Intent regarding the Medicare "carve out" and asked what the extra cost was. Ms. King indicated the Medicare carve-out was approximately $3.3 million a year and the Assembly Committee on Ways and Means voted to include a Letter of Intent to eliminate it if financially possible. Senator Coffin requested a definition of "financially possible," a specific time frame, and where the issue sits on their priority list. Ms. King stated the Assembly Committee on Ways and Means indicated the issue is very high on their priority list.

Ms. King said this budget account collects money from state agencies to pay the state employees’ medical insurance subsidy. She declared the issue of benefits would have been discussed in the closing of the benefit services fund, at which point the issues of cost, premiums, and so forth were discussed. She indicated the issue of changing the benefits, recommended in The Executive Budget, was not discussed during the closing of the benefit services budget account.

Senator Raggio pondered that although the rate is raised (which he noted has not been recommended by the Governor), resulting in an additional cost of $448,000 the first year and $645,000 the second, the rate has been decreased in workers’ compensation and unemployment which results in savings from the original amounts in the Governor's budget for those three assessments.

Senator Raggio recessed the hearing at 11:30 a.m., to be reconvened after the Senate floor session.

Senator Raggio reopened the hearing on S.B. 485 at 1:35 p.m..

Anne B. Cathcart, Special Assistant Attorney General, Office of the Attorney General, pointed out that of the $160,000 for the biennium for the staff of the advisory board to the high-technology task force, $80,000 has been used in a grant application that was made for federal Byrne Grant funding. She explained the Office of the Attorney General would not receive funding if the office was are unable to provide matching funds. Ms. Cathcart stressed the importance of the issue.

Continuing, Ms. Cathcart indicated the Office of the Attorney General is involved more than any other agency in the state in handling white collar crime, partly because local authorities generally do not have the resources to do it and their priorities are with other types of crimes. She said in white collar crime "fraud computers" are typically utilized, which is one of the reasons the Office of the Attorney General has become involved.

Kevin Higgins, Chief Deputy Attorney General, Director, Workers’ Compensation Fraud Unit, Office of the Attorney General, referring to the Internet Alliance letter (Exhibit F) addressing section 21 of S.B. 485, indicated the letter is basically an attempt to strengthen some of the "antispam" legislation of 2 years ago. He said the purpose of S.B. 485 was to make e-mail addresses and related information private unless an individual was advised or voluntarily allowed it to be disclosed. For instance, advertising is part of the agreement when an individual accepts free e-mail services.

Mr. Higgins pointed out the Internet Alliance indicated it is in favor of privacy and informing consumers that their e-mail addresses will be disclosed. He said that although the Internet Alliance states it does not disclose e-mail addresses, the alliance opposes being mandated and prefers to be allowed to do so voluntarily. Mr. Higgins indicated this is satisfactory for respected Internet providers in the country, but the problem lies with those who do not behave quite so well. He declared he did not understand the objections of the Internet Alliance regarding a mandate of something they are already doing.

Senator Raggio declared that although he prefers the least amount of regulation necessary, he was "sick and tired" of everybody getting his name off of every available list, "including the DMV&PS and other entities" from whom he purchases magazines, even though he realizes it is "big business." He expressed support for the provision in S.B. 485 that would prevent individuals’ names from being added to mailing lists.

Todd G. Shipley, Detective Sergeant, Detective Division, City of Reno Police Department, noted he operates the financial and computer crimes unit. He said the Reno Police Department has been working closely with the Office of the Attorney General and the task force regarding S.B. 485. He noted that over the past 4 years the Reno Police Department has been working to develop an in-house resource to deal with technology-related crimes. Detective Shipley testified it has become increasingly difficult to apprehend the people who perform these crimes. He asserted S.B. 485 is a good start in deterring technology-related crimes that occur every day. He pointed out most people are unaware of this type of crime and said the community must be educated to come forward when such crimes are committed. He mentioned that a local company in Reno had thousands of dollars worth of fraud committed against it but was unaware law enforcement could do anything about it and therefore did not report it. The detective emphasized the importance of the advisory committee and asserted it would provide training, guidance, and direction to local law enforcement in areas of technology.

Senator Raggio inquired whether the Detective Division received any training at present. Detective Shipley indicated a core group of detectives had been trained as a collateral assignment because there are insufficient personnel resources to dedicate to the task. He said he supervises five detectives who collaterally perform high-technology-related investigations. He stated some preliminary training has been done at the briefing level to inform officers of this new area of crime and evidence. Detective Shipley pointed out he teaches new recruits at the P.O.S.T. (Peace Officers’ Standards and Training Committee) and High Sierra academies in seeking out new kinds of evidence, and he exposes them to high-technology crime.

Bob Gastonguay, Executive Director, Nevada State Cable Telecommunications Association (NSCTA), strongly urged passage of S.B. 485. He indicated NSCTA has been working with the Office of the Attorney General on this measure for a period of 18 months. He said cable television will be coming into its own in the future. He pointed out the biggest concern is the "infamous black boxes out there." He noted approximately $10 million of revenue is lost by cable operators within the state each year, which equates to $500,000 lost to the communities that are served based upon the fact they pay franchise fees.

Senator Raggio asked what is done with the black boxes. Mr. Gastonguay said the black boxes access Show Time, Home Box Office (HBO), Cinemax, and Pay Per View and are illegal boxes that are manufactured and, in some cases, warehoused and distributed out of the state. Senator Raggio clarified that individuals who have the illegal black boxes avoid monthly charges. Mr. Gastonguay agreed and added the franchise fees are based on the gross receipts of the cable operator.

Senator Raggio indicated his understanding of the proposed amendment is that the appropriation provided for the positions, and, to the extent possible, the equipment will be coming out of the reimbursement for legal fees that will be received in connection with the tobacco settlement.

Senator Raggio closed the hearing on S.B. 485 and reopened the hearing on S.B. 167.

Senator Raggio asked whether anyone present objected to processing S.B. 167. Mr. Miles indicated the current funding for the State Emergency Response Commission (SERC) is through fees that are collected. He said S.B. 167 would change it to place the fees in the Highway Fund, and then appropriate from the Highway Fund to support SERC. He declared that should S.B. 167 be passed, a corresponding adjustment would be made in the budget for this account.

Senator Jacobsen asked whether the passage of S.B. 167 would affect SERC because it deals with emergency response in all 17 counties. Mr. Miles replied that is correct, to the best of his knowledge. He said the only adjustment would be to remove the fees going into SERC and replace them with the same amount with Highway Fund appropriations.

Senator Raggio opened the hearing on S.B. 363.

Senator Raggio indicated he would abstain from voting on S.B. 363 because John Sande had testified on it.

Senator Jacobsen indicated he would also abstain from voting on S.B. 363 because he was "under suit."

Senator Raggio asked whether the committee was agreeable to revisiting the Tahoe Regional Planning Agency (TRPA) budget to attempt to come into agreement with the Assembly Committee on Ways and Means. He indicated the committee had agreed to fund the base budget with pollution control funds and did not approve the enhancements. The senator noted that through various communications the committee had been informed the TRPA "will sink" if funding for the enhancements is not approved, which will affect the amount of money that will be contributed by California. He pointed out The Executive Budget recommended the funding come from the pollution control funds.

Senator Rawson expressed the understanding the intent would be to replace the funds as revenue allows. Senator Raggio explained that the Assembly Committee on Ways and Means sent a clear signal of expectation that it will not be necessary to fund the TRPA this way in the next legislative session.

Senator Raggio reopened the hearing on S.B. 485.

Senator Raggio stated he concurred with Senator Neal regarding the concern that S.B. 485 would "ultimately do the job." He was concerned that the same source of funding might not be available as the division grows. He said that although he was supportive of the purpose of the measure, he did not wish to see the division return in the future to accuse the Legislature of creating the advisory board and then not allowing it enough money to operate. Senator Raggio suggested the bill be "streamlined" with what is available.

Senator Raggio explained the amendment to S.B. 485 addresses the cost of the legislation, and places the same source of funding for the requested equipment into the budget of the attorney general’s office. He said, "I realize there is not a real nexus, but unfortunately you are stuck with that because the representation that was made originally was that there was a nexus."

There being no further business, the hearing was adjourned at 2 p.m.

RESPECTFULLY SUBMITTED:

Barbara Moss,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE: