MINUTES OF THE meeting of the
JOINT SUBCOMMITTEE ON general government
OF THE
SENATE committee on Finance
AND THE ASSEMBLY COMMITTEE ON WAYS AND MEANS
Seventy-First Session
May 9, 2001
The Senate Subcommittee on General Government of the Senate Committee on Finance and the Assembly Committee on Ways and Meanswas called to order by Chairwoman Vonne S. Chowning at 1:18 p.m., on Wednesday, May 9, 2001, 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.
ASSEMBLY COMMITTEE MEMBERS PRESENT:
Mrs. Vonne S. Chowning, Chairwoman
Mr. Bob Beers
Ms. Christina R. Giunchigliani
Mr. Lynn C. Hettrick
Ms. Sheila Leslie
Mr. David R. Parks
SENATE COMMITTEE MEMBERS PRESENT:
Senator William R. O’Donnell, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Joseph M. Neal Jr.
STAFF MEMBERS PRESENT:
Mark W. Stevens, Assembly Fiscal Analyst
Michael J. Chapman, Program Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Russell J. Guindon, Deputy Fiscal Analyst
Bob Atkinson, Program Analyst
Debra Petrelli, Committee Secretary
OTHERS PRESENT:
David Pursell, Executive Director, Department of Taxation
P. Forrest Thorne, Deputy Executive Director, Department of Taxation
Ms. Chowning stated that since the Senate Floor Session was still going, the Assembly would start the meeting with no senators present.
ADMINISTRATION
Budget and Planning – Budget Page ADMIN-1 (Volume 1)
Budget Account 101-1340
Michael J. Chapman, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, referring to the Joint Subcommittee on General Government Closing List #8 (Exhibit C), stated that technical adjustments reflect revised computer prices provided by the Purchasing Division.
M-200 Demographics/Caseload Changes – Page ADMIN-2
Mr. Chapman commented that in decision unit M-200 there is a request for a Budget Analyst IV position. He pointed out that the Budget Division has indicated it needs this position to spread workload out and take away some workload from the Senior Budget Analysts. This would allow Senior Budget Analysts more time to act as team leaders and trainers, he added.
Mr. Chapman pointed out decision unit M-200 also includes $10,000 in the second year of the biennium for temporary clerical assistance in preparing The Executive Budget. He said the Budget Division has indicated that its current clerical staff cannot absorb any more workload than it already has.
E-225 Reward More Efficient Operation – Page ADMIN-4
Mr. Chapman stated that E-225 recommends moving $358,814 from the second year of the biennium to the first year of the biennium to upgrade the Nevada Executive Budget System (NEBS) from the Department of Information Technology (DoIT) mainframe to a stand-alone file server system. He remarked that during a previous budget hearing, the director indicated that the conversion was necessary to allow more efficient, direct data entry by state agencies. He pointed out that, during the course of review on this item, it became apparent that while the DoIT mainframe charges were eliminated, support costs for the new file server environment were not incorporated.
Mr. Chapman said that after review of different support costs, including computer hardware cost and software costs, there have been adjustments to reflect a reduction of $101,801 in the first year of the biennium, and $55,429 in the second year of the biennium.
E-275 Working Environment & Wage – Page ADMIN-4
Mr. Chapman pointed out that decision unit E-275 contains three parts. The first part, he said, recommends eliminating a current Management Analyst III position, which has been vacant for just over a year. He said it was initially established to support occupational licensing boards, and if Assembly Bill (A.B.) 569 is not approved, the division has indicated that they have no intent to retain this position.
ASSEMBLY BILL 569: Exempts certain professional and occupational boards from provisions concerning state financial administration. (BDR 31-341)
Mr. Chapman remarked that the second part of module E-275 reclassifies a current Management Analyst III position to a Budget Analyst IV position. He stated that this position is assigned a number of budget accounts and acts in a Budget Analyst capacity. He said the third piece to E-275 is a Public Service Intern position that is recommended by the Governor. He said this position would essentially assist in special projects such as the Statistical Abstract and would handle a few minor budget accounts during the preparation of The Executive Budget.
E-710 Replacement Equipment – Page ADMIN-5
Mr. Chapman stated that decision unit E-710 funds replacement of five printers and five desktop computers.
E-805 Major Reclassifications – Page ADMIN-5
E-900 Transfer to BA 1342 – Page ADMIN-6
E-901 Transfer to BA 1342 – Page ADMIN-6
Mr. Chapman commented that E-805, E-900, and E-901 include the reclassification and transfer of six full-time pre-audit positions from Budget and Planning to the Division of Internal Audits. He pointed out that the Division of Internal Audits’ budget closed approving this transfer of positions from Budget and Planning to the Division of Internal Audit.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-1340 WITH STAFF RECOMMENDATIONS FOR TECHNICAL ADJUSTMENTS; TO APPROVE DECISION UNIT M-200 WHICH PROVIDES $10,000 FOR A TEMPORARY CLERICAL POSITION; TO APPROVE DECISION UNIT E-225; TO APPROVE DECISION UNIT E‑275 WHICH ELIMINATES A MANAGEMENT ANALYST III POSITION AND RECLASSIFIES A MANAGEMENT ANALYST III POSITION; NOT TO RECOMMEND A PUBLIC SERVICE INTERN POSITION; AND TO APPROVE DECISION UNITS E-710, E‑805, E-900, AND E-901 REGARDING THE UPGRADE OF THE EXISTING PRE-AUDIT ACCOUNTING TO THE DIVISION OF INTERNAL AUDITS.
ASSEMBLYMAN DAVID R. PARKS SECONDED THE MOTION.
THE MOTION CARRIED ON THE ASSEMBLY SIDE, BUT THE MOTION FAILED ON THE SENATE SIDE FOR LACK OF A QUORUM. (SENATORS JACOBSEN AND NEAL WERE ABSENT FOR THE VOTE.)
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TAXATION
Department of Taxation – Budget Page TAX-1 (Volume 1)
Budget Account 101-2361
Russell J. Guindon, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated that there are technical adjustments resulting in a net reduction in General Fund of $15,628 in Fiscal Year (FY) 2002, and $21,731 in FY 2003. He said that these technical adjustments were due to the elimination of requested reclassifications that were denied by the Department of Personnel. He pointed out the adjustments also include a position that was reclassified at a position lower than requested.
E-125 Equitable, Stable Tax Structure – Page TAX-4
Mr. Guindon commented that E-125 recommends a General Fund appropriation of $740,421 in FY 2002, and $1,461,962 in FY 2003, to offset the loss of Highway Funds due to the transfer of the motor fuel tax collection program from the Department of Taxation to the Department of Motor Vehicles and Public Safety (DMV&PS). He added that this transfer is scheduled to become effective January 1, 2002, based on Assembly Bill (A.B.) 584 of the Seventieth Session being passed by the 1999 legislature.
ASSEMBLY BILL 584 OF THE SEVENTIETH SESSION: Transfers responsibility for collection of taxes and fees imposed on certain fuels from department of taxation to department of motor vehicles and public safety and revises provisions relating to imposition and collection of tax on certain types of motor vehicle fuel. (BDR 32-212)
E-901 Transfer to BA 4717 – Page TAX-5
Mr. Guindon stated that decision unit E-901 includes the transfer of 3 Tax Examiner positions and associated operating costs for this program. He indicated that the General Fund offset is required because of the cost allocation methodology used for this program, which resulted in more Highway Funds being allocated to the program than needed for the actual operating costs.
Mr. Guindon pointed out that because of the revised Economic Forum forecast, the leadership of the Legislature met with the Governor and discussed certain alternatives and the possibility of resolving the revenue shortfall. Mr. Guindon mentioned that one alternative was the possibility of delaying the transfer of this program from the Department of Taxation to the DMV&PS from the January 1 scheduled date to July 1, 2002. He pointed out it would result in a savings to the General Fund of $740,421 in FY 2002.
Mr. Guindon stated that if the program is not transferred at all, an additional savings of $1,461,962 will be incurred in FY 2003. He indicated that if the subcommittee chooses to enact this measure, it will require legislation to allow the delay to take place.
E-250 Eliminate Duplicate Effort – Page TAX-4
Mr. Guindon said that module E-250 recommends General Fund appropriations of $59,719 in FY 2002, and $73,989 in FY 2003, for the recommended transfer of 4 Information Systems Specialists from the Department of Information Technology (DoIT) to the Department of Taxation.
E-903 Transfer to BA 2363 – Page TAX-6
Mr. Guindon pointed out that module E-903 recommends a reduction in General Funds of $79,735 in FY 2002, and $82,475 in FY 2003, to facilitate the recommended transfer of the administration of the Senior Citizens Property Tax Assistance program from the Department of Taxation to the Department of Human Resources, Aging Services Division. He said that this decision unit includes the transfer of 1 Program Officer, an intermittent position, and operational costs from the Department of Taxation to the Senior Citizens’ Property Tax Assistance account.
Mr. Guindon noted that the corresponding decision unit is the Senior Citizens’ Property Assistance Tax account; budget account 101-2363. He added that it was approved by the Joint Subcommittee on Human Resources, pending the approval of the transfer of the program to the Department of Human Resources, Aging Services Division.
Not included in The Executive Budget, he added, are two final decision items. He said the first is the agency’s request of $5,382 in FY 2002, and $9,598 in FY 2003, for increased costs of printing cigarette stamps that are sold to wholesalers. This item was included in the agency’s original budget request document at funding levels higher than they are currently requesting, he added.
Mr. Guindon said, based on a request from staff, the department provided information from the actual manufacturer of these stamps. He explained that due to increased costs of printing, the cost will rise, and the contract is set to expire at the end of this Fiscal Year. He added that the subcommittee will need to decide whether it wishes to approve funding for the requested increase for printing cigarette stamps.
The second item not included in The Executive Budget is a request for $42,707 in each year of the biennium for annual software renewal costs that were inadvertently removed from the department’s base budget during the development of the adjusted base budget. Mr. Guindon pointed out that these software costs cover the annual renewal of several programs that are administered by the department.
Mr. Guindon pointed out that the department provided staff with revised information on the costs of its website software, which is listed on page 5 of Exhibit C. He stated that rather than costing approximately $35,000 in each year of the biennium, it will need to be renewed in FY 2002 for $57,000, which will cover a 2-year period.
Mr. Guindon said that, based on this revised information, the agency is requesting $64,712 in FY 2002 and $7,712 in FY 2003. He commented that this increases the appropriation by approximately $22,000 in FY 2002 and reduces it by approximately $35,000 in FY 2003. He added that this is a net reduction over the biennium of approximately $13,000 from the original request.
Mr. Guindon mentioned that there is one additional item that the subcommittee does not need to take action on, but should be aware of. He said it regards the one-time appropriation recommended in The Executive budget for $1.3 million, specified in Assembly Bill (A.B.) 519. He testified that this appropriation allows the department to begin phase II (the system requirements phase) to build a new integrated computer revenue management system. He added that the Governor is now recommending that A.B. 519 be amended to include $800,000 in funding for the department’s process improvement initiative. He said this initiative develops and implements an electronic document and imaging management system.
ASSEMBLY BILL 519: Makes appropriation to Department of Taxation for implementation of Phase II of Business Process Re-Engineering Project. (BDR S-1429)
Mr. Guindon drew attention to Senate Bill (S.B.) 125, and said it would make various changes to the Department of Taxation’s and local governments’ responsibilities regarding the filing and publication of local fiscal reports. He said it would include a one-time expense of $75,000, which will be required to facilitate the transfer of this program to the Department of Taxation. He pointed out that it has been suggested the $75,000 could be added to the appropriation in A.B. 519.
SENATE BILL (S.B.) 125: Makes various changes to provisions relating to financial reporting of local governments. (BDR 31-898)
Mr. Guindon said that if all of these adjustments are approved, the total amount of the one-time appropriation would increase from $1.3 million to $2,175,000.
Mr. Beers asked what current website software is being used. Mr. Guindon said his understanding is it is software the department uses to run and administer its website. He commented that the department’s website has a section that administers and manages the frequently asked questions (FAQ) section. He added this helps that section run more efficiently and the overall management of the administration of the website.
David Pursell, Executive Director, Department of Taxation, stated that this software program is used to catalog the database of “frequently asked questions” from the business community. He said by going through the website, these questions can be accessed directly, rather than necessitating contact with someone at the department. He commented that “frequently asked questions” are categorized by subject. He pointed out that if a subject cannot be found under the FAQ section on the Department of Taxation’s website, a tax examiner or revenue officer can be contacted by e-mail. He added that the tax examiner and revenue officers respond to all e-mails that are left on the website regarding questions that are not included in the database. The database grows continually, he noted.
Mr. Pursell asked whether Mr. Beers was requesting technical aspects of the software, and pointed out that P. Forrest Thorne, Deputy Executive Director, Department of Taxation, could answer those types of questions.
Mr. Beers commented that maintaining the FAQ list is something that a web‑master would take about an hour to do. He added that this is an awful lot of money.
Mrs. Chowning suggested that if there is further information, staff would be given authorization to change these figures based on any increased costs.
Mr. Thorne commented that the current software is an interactive FAQ database that provides categories. He pointed out that when a question is typed on the website, it responds by bringing the most frequently asked questions to the top of the list. He added that it provides a search through use of key words. He said it additionally allows interaction with the department’s staff by e-mail. He added that e-mail is automatically distributed to the appropriate department of expertise. He pointed out that a response can be returned privately, if needed.
Mr. Thorne remarked that, as more and more questions in a particular area are received, the questions are combined and put on a public site, allowing both public and private responses to individual tax questions. He said additionally a taxpayer who has an interest in a particular topic or regulation can register with the department through the software. He added that anytime there is a change in that particular area, the person requesting that information will be notified automatically by e-mail.
Mr. Beers asked how the license fee is determined. Mr. Thorne replied that the license fee is a 2-year subscription to the software. It provides all of the software updates automatically during that time, he added. He said the renewal cost actually caught the department by surprise, as well, in being significantly higher than was anticipated.
Mr. Beers inquired whether this fee is based on the size of the machine, number of processors, or number of hits to the website. Mr. Thorne responded that this fee is strictly for the software.
Mr. Beers said that in looking at this website under the category of estate tax, it displays five questions on distribution. Two of these questions are on motor fuel, and three questions are on the FAQ list, he added. He asked whether this is “overkill.” He pointed out that there are FAQ lists all across the web and most of them are maintained manually. He commented that $60,000 for two years’ time could almost buy a full-time web master.
Mr. Thorne said he could not defend the pricing, but he would defend the functionality. He explained that the department’s intent is to reduce the number of incoming calls that tax examiners must respond to by having this information and e-mail interaction available.
Mr. Beers asked how long this program has been in effect. Mr. Thorne replied it has been in effect since January 2001. Mr. Beers queried whether the department was recommending the elimination of any examiners in this budget because of the relief provided for responses to routine questions. Mr. Thorne responded that the department was not recommending the elimination of any examiner positions. He said they hope to live within the flat budget as required over the next 2 years.
Mrs. Chowning said it appears that there will be a savings of $740,400 from the delay of the transfer of the motor fuel tax collection program. However, she noted, expenditures will likely exceed this amount because of the one-time appropriation of $875,000 being requested in A.B. 519.
Senator O’Donnell asked what the cost for software would be. Mr. Guindon replied that based on the information the department has received from the vendor; the cost of the software is $57,000 for a 2-year contract period.
ASSEMBLYMAN HETTRICK MOVED TO CLOSE BUDGET ACCOUNT 101‑2361 WITH SOFTWARE ISSUES BEING DEFERRED UNTIL CLOSURE BY THE FULL COMMITTEE, WITH THE REMAINDER TO CLOSE AS STAFF RECOMMEND WITH TECHNICAL ADJUSTMENTS ON DECISION ITEM 1 FOR DELAY OF THE TRANSFER OF THAT PROGRAM UNTIL JULY 1, 2002; TO CLOSE ITEMS 2, 3, AND 4 AS RECOMMENDED; AND TO CLOSE ITEM 5 BASED ON THE LATEST INFORMATION FROM THE DEPARTMENT OF TAXATION AND ASSEMBLYMAN BEERS UPON CLOSURE BY FULL COMMITTEE WITH ADJUSTMENTS AT THAT TIME.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED ON THE ASSEMBLY SIDE, BUT THE MOTION FAILED ON THE SENATE SIDE FOR LACK OF A QUORUM. (SENATORS JACOBSEN AND NEAL WERE ABSENT FOR THE VOTE.)
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PERSONNEL
Personnel – Budget Page PERSNL-1 (Volume 1)
Budget Account 717-1363
Bob Atkinson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, commented that at the last hearing a lot of the discussion evolved around the issue of Social Security numbers on timesheets, which was not contemplated in the budget. He stated that the chairman appointed a group to work with the Department of Personnel to find a solution to that situation. He added that a solution was arrived at which removed Social Security numbers from timesheets. He pointed out that programming costs are between $37,000 and $54,000, with approximately $6,000 in other work that would be done by the agency. He said this issue was discussed with the agency, which agreed it could be funded out of the overtime that was recommended in the existing budget.
Mr. Atkinson commented that this budget has been adjusted to reduce overtime by moving it to the category containing the contract for software changes. He pointed out that computer prices have been adjusted based on the most recent pricing from the Purchasing Division. He added that staff recommends that this account be closed as adjusted.
Ms. Chowning said she would like to thank Mr. Beers, Mr. Hettrick, and Senator Neal for the work done in removing Social Security numbers from timesheets. Senator O’Donnell concurred.
Mr. Beers commented that he would include the Department of Personnel, the budget office and everyone that helped in coming up with a “happy” resolution to the issue of Social Security numbers being removed from timesheets.
Ms. Chowning said now Social Security numbers will not be on timesheets, which was a matter of privacy that is of great concern.
MR. PARKS MOVED TO CLOSE BUDGET ACCOUNT 717-1363 WITH THE ADJUSTMENTS RECOMMENDED BY STAFF.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Mrs. Chowning requested that Assembly members remain present so there could be a joint closing by Assembly and Senate members on budget account 101-1340 Budget and Planning.
JOINT COMMITTEE CLOSING
Budget and Planning – Budget Page ADMIN-1 (Volume 1)
Budget Account 101-1340
Mr. Chapman restated the same testimony as presented to the Assembly earlier in the meeting regarding the closing of budget account 101-1340.
Mrs. Chowning stated that for the Senate’s information, the Assembly closed on this budget and approved everything with the exception of 1 Public Service Intern position in decision unit E-275.
Senator Neal asked why the Public Service Intern position was excluded. Mrs. Chowning responded the reason was because there was approval for a new Budget Analyst IV position, an appropriation was approved for temporary clerical assistance when needed, and approval was given to reclassify a Management Analyst III position to a Budget Analyst IV position. She added that this will require new General Fund dollars, so the Public Service Intern position could be requested again in the next biennium. She commented that with all the other positions approved, the Assembly felt that the intern position was not necessary.
Senator Neal stated that by these comments, he questions whether the Assembly believes in training. Mrs. Chowning replied that is certainly not the Assembly’s position.
Senator O’Donnell asked whether the Clerical Assistant position was deleted. Mrs. Chowning replied that position was approved. Senator O’Donnell questioned what was not approved. Mrs. Chowning responded that the only item not approved was the Public Service Intern, grade 29, position. She added that everything else was approved.
Senator O’Donnell asked why, with current budget restraints, the Management Analyst position and the clerical assistance were approved. Mrs. Chowning replied that the clerical position is a $10,000 request that would provide approximately 650 hours of help, and it would only be in the second part of the biennium in preparation for The Executive Budget. She added that it is offset by overtime.
Senator O’Donnell inquired about the reclassification of the Management Analyst III position in E-275. Mrs. Chowning said that was approved.
SENATOR NEAL MOVED TO CLOSE BUDGET ACCOUNT 101-1340 WITH STAFF RECOMMENDATIONS FOR TECHNICAL ADJUSTMENTS; TO APPROVE DECISION UNIT M-200 WHICH PROVIDES $10,000 FOR A TEMPORARY CLERICAL POSITION; TO APPROVE DECISION UNIT E-225; TO APPROVE E‑275 WHICH ELIMINATES A MANAGEMENT ANALYST III POSITION AND RECLASSIFIES A MANAGEMENT ANALYST III POSITION; NOT TO RECOMMEND THE PUBLIC SERVICE INTERN POSITION; AND TO APPROVE DECISION UNITS E-710, E-805, E-900 AND E-901 REGARDING THE UPGRADE OF THE EXISTING PRE-AUDIT ACCOUNTING TO THE DIVISION OF INTERNAL AUDITS.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED.
*****
Mrs. Chowning stated that the Assembly and the Senate closed in the same manner on budget account 101-1340, Budget and Planning.
Mrs. Chowning adjourned the meeting at 1:59 p.m.
RESPECTFULLY SUBMITTED:
Debra Petrelli
Committee Secretary
APPROVED BY:
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Assemblywoman Vonne S. Chowning, Chairwoman
DATE: ___
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Senator William R. O’Donnell, Chairman
DATE: ___