MINUTES OF THE
JOINT Subcommittee on
General Government
of the
Senate Committee on Finance
AND THE
Assembly Committee on Ways and Means
Seventy-second Session
March 18, 2003
The Senate Committee on Finance and the Assembly Committee on Ways and Means, Joint Subcommittee on General Government was called to order at 8:08 a.m., on Tuesday, March 18, 2003. Chairman Sandra J. Tiffany presided in Room 2134 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4406, 555 East Washington Avenue, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
Senate COMMITTEE MEMBERS PRESENT:
Senator Sandra J. Tiffany Chairman
Senator Bob Coffin
Senator Dean A. Rhoads
Assembly COMMITTEE MEMBERS PRESENT:
Mrs. Vonne Stout Chowning, Chairman
Mr. Joshua B. Griffin
Ms. Kathyrn A. McClain
Mr. David R. Parks
Mr. Richard D. Perkins
STAFF MEMBERS PRESENT:
Bob Guernsey, Principal Deputy Fiscal Analyst
Steven J. Abba, Principal Deputy Fiscal Analyst
Joyce Garrett, Program Analyst
Julie Walker, Committee Secretary
OTHERS PRESENT:
Gail J. Anderson, Administrator, Real Estate Division, Department of Business and Industry
Melody L. Luetkehans, Lobbyist, Nevada Association of Realtors
Kathalie Koche, Budget Analyst IV, Budget and Planning Division, Department of Administration
Shirley Penzel, Projects Chief, Real Estate Division, Department of Business and Industry
Eldon Hardy, Ombudsman, Ombudsman for Owners in Common-Interest Communities, Real Estate Division, Department of Business and Industry
Marc Ratner, Executive Director, Nevada Athletic Commission, Department of Business and Industry
Dr. Luther Mack, Las Vegas, Chairman, Nevada Athletic Commission, Department of Business and Industry
Joseph A. Dahlia, Acting Administrator, Taxicab Authority, Department of Business and Industry
Richard A. Boxer, Administrative Services Officer I, Taxicab Authority, Department of Business and Industry
Paul J. Christensen, Las Vegas, Chairman, Transportation Services Authority, Department of Business and Industry
Dave Kimball, Las Vegas, Deputy Commissioner, Transportation Services Authority, Department of Business and Industry
A.R. Fairman, Lobbyist, Budget Chauffeur Drive, Pty. Ltd., Trailways Transportation System
David Geordge, Management Analyst, State Dairy Commission, Department of Business and Industry
Anna Vickrey, Rating Officer, Milk and Dairy Foods Inspection Program, State Dairy Commission, Department of Business and Industry
Robert King, Chief Investigator Compliance/Audit, State Dairy Commission, Department of Business and Industry
Senator Tiffany:
B&I, Real Estate Administration- Budget Page B&I-9 (Volume 2)
Budget Account 101-3823
Gail J. Anderson, Administrator, Real Estate Division, Department of Business and Industry:
Despite cuts in positions, the Real Estate Division has consistently accepted more responsibilities. Some of the negative audit reports have focused on several key areas, one being in the internal fiscal controls and the other in administrative staffing needs. However, the division has still been successful in accomplishing its service to the public and its purpose.
Exhibit C, page 2, shows that 10,969 licenses were projected, which is a significantly lower amount than licenses issued. There were 1,346 projects that were reviewed, and 28 percent of the complaints were resolved. The advisory review committees were implemented for the appraisal program to help address the case backlog for minor cases that did not need to go to full hearing. The accounting support position has been filled in the division. This budget represents continued revenue into the General Fund. Page 3 shows a further breakdown of the General Fund contribution. The bottom line on that page is the net gain to the State General Fund from real estate licensees, and real estate licensees’ transactions.
Decision unit E-225 is an enhancement for travel that would allow the administrator or deputy administrator to attend one annual conference of the Association of Real Estate License Law Officials (ARELLO). At the present time the appraisal officer travels to two regulatory conferences for federal information. ARELLO, for real estate license law officials, provides another benefit. Decision unit E-227 addresses the restoration of the operating supplies budget.
Senator Tiffany:
Please describe the fee increases.
Ms. Anderson:
Our budget requests a $20 fee increase for an original real estate license and a $10 fee increase for a license renewal. A $10 fee increase for a change of name or address, and a request for an increase of fees for inspectors of structures, which was inadvertently omitted in the original drafting of NRS 645D are also requested. At the present time, the only fees are for an application for a certificate and for issuance or renewal of a certificate. We are adding change fees, duplicate replacement fees, and change of status fees.
Senator Tiffany:
How much revenue will be generated by those increases?
Ms. Anderson:
The increases would generate approximately $431,000, adjusted for the economic forum’s 8-percent growth increase.
Senator Tiffany:
Were the fees calculated by determining how much funding was needed, then developing the fee increases accordingly?
Ms. Anderson:
No. I reviewed the fee increases that had been decided upon before I became administrator and felt the revenue was sufficient for the fees to be raised.
Assemblywoman Chowning:
First, I need to disclose that I am a state real estate licensee. Normally, I say that these budgets will not affect me more than anyone else, but this budget will affect me directly. My husband, who is a broker, will also be affected directly, as will our associates.
May I have a list of fees? You have estimated $400,000 and $200,000 revenue, but you have not indicated what that would be used for. Would background checks be done on licensees, the inspectors, and appraisers? I would also like to know how many people made the decision to increase the fees and if there is buy-in from the industry.
Melody Leutkehans, Lobbyist, Nevada Association of Realtors:
The Nevada Association of Realtors (NAR) is the association and trade organization for Nevada real estate licensees. The association is composed of five regional local boards. The Real Estate Division brought the fee increase before the leadership of the Nevada Association of Realtors. The NAR board is an elected board of industry professionals involved with the local boards. Ms. Anderson made a presentation to the board, the fee increases were reviewed by the board, and the fee increases were supported. That would answer your question regarding the industry having a buy-in. It was determined by the 11,000 members that a representative board look at the fees, address it with the administrator, and support it.
Assemblywoman Chowning:
In which committee is this bill being heard?
Ms. Anderson:
The bill will be introduced through the Senate Committee on Commerce and Labor.
Assemblywoman Chowning:
I would like an answer on the background checks.
Ms. Anderson:
We do a background check on every licensee application, so that could be a real estate licensee, an inspector of structures, a time-share or community association manager, and all other licenses and permits.
Assemblywoman McClain:
What would happen if the bill does not pass?
Ms. Anderson:
The revenues from the proposed increase would not go into the State General Fund.
Senator Tiffany:
Was the $320,000 appropriated in 2001 reverted or used to go back and evaluate functional requirements?
Ms. Anderson:
The proposal was withdrawn. We did not receive that money.
Senator Tiffany:
Now that you have done some functional requirements for the licensing system, including Web-based and online transactions, could you explain what will be done in that direction?
Ms. Anderson:
The intention is to add timeshare and appraisal to the other databases, and incorporate all of them into one database. It is a Web-based proposal and information will be available on the Web to the public and to the licensee about each of the programs we administer and regulate. The public will not have access to certain information in the database, but information that can be publicly shared would be there.
Senator Tiffany:
What online revenues will be collected?
Ms. Anderson:
Revenues for license renewals will be paid online within two years.
Senator Tiffany:
Do you have a document that shows the milestones for implementation?
Ms. Anderson:
Yes, I will give that to the staff.
Senator Tiffany:
What is covered by the $900,000 shown in the budget for the biennium?
Kathalie Koche, Budget Analyst iv, Budget and Planning Division, Department of Administration:
The funding was reduced. The Department of Information Technology (DoIT) prepared a reserve contingency in its study, but the policy of the budget division was to not fund for reserve contingencies for the licensing system. We reduced the dollar amount threshold to $650,000 for the first year and some ongoing support the second year of the biennium. I do not recall the dollar amount for the second year.
Senator Tiffany:
Please get that information to the staff. Are you working with DoIT?
Ms. Koche:
Yes.
Senator Tiffany:
Do you have technical staff to support that?
Ms. Koche:
The Department of Business and Industry has staff, and we will also have technical support from DoIT.
Senator Tiffany:
Did you do a request for proposal (RFP) and consult an independent contractor?
Ms. Koche:
We will not do that until we are funded.
Senator Tiffany:
You have a revised budget to give us. Are the functional specifications completed by DoIT in the revision?
Ms. Koche:
Yes.
Senator Tiffany:
When is the determination for the RFP?
Ms. Koche:
The determination will be made as soon as it is approved, hopefully by FY 2004. DoIT’s projection was 2 years to have the program up and running. I think it may take up to 3 years to have it fully implemented with this phase.
Senator Tiffany:
There is a new position on E-500, program officer II. Please describe that position and the proposed functions of that position.
Ms. Anderson:
The program officer II is a position for the inspector of structures program. This program had a part-time program officer when it was initiated in 1998, and it was eliminated in 1999 due to budget cuts. The position involves three levels of certification: the pre-licensing education; the continuing education; and the industry issues. There are 292 active and inactive certified inspectors and another 169 in application status. The administrator is the only one available to do these duties at the present time.
Senator Tiffany:
Next is E-501, one-half administrative assistant II position.
Ms. Anderson:
It was originally submitted as a full-time position, but I removed the backup to the licensing section portion and it became half time.
Senator Tiffany:
Why do you think there is an increase in the public offering statements?
Ms. Anderson:
It is due to the growth in Nevada. There is a large backlog.
Senator Tiffany:
Is revenue brought in through this position?
Ms. Anderson:
Yes.
Shirley Penzel, Projects Chief, Real Estate Division, Department of Business and Industry:
The input and processing of real estate projects was minimal in 1997. There were very few timeshare projects and there was a system for exemptions during the previous 20 years allowing letters to be sent in simply stating “exception,” without having to prove the exemption. Of 100 registrations processed every year, 9 have not been reviewed.
Senator Tiffany:
If this brings in more revenue, perhaps an expedite fee should be considered.
Ms. Penzel:
We get the fee before we do the review, so they submit the application without knowing how long it will take.
Senator Coffin:
What efforts have you made to make all the documents scannable?
Ms. Anderson:
The projects chief requests a disc with information on it as well as paperwork. It is definitely something we can look into.
Senator Tiffany:
Next is E-605, to eliminate a position auditor II. Will you explain that, please.
Ms. Anderson:
I agreed that in order to fill the chief investigator position I would eliminate a position in the compliance section. I had applicants for that position, but I could not get them qualified within the agency in 2 days. I will be working on getting this restored as soon as possible. We need an auditor, but the option was to lay off an investigator, and I did not want to do that.
Senator Tiffany:
Why do you want to bring in 25 more computers before the licensing system is in place?
Ms. Anderson:
That is the first phase, to get the hardware in place. We do not have the capacity to begin some of these tasks with the equipment we have now.
Assemblyman Parks:
I would like to disclose that I am a real estate licensee. In order to put in an upgraded registration system, a server would be required to run to the computers. Are you holding off on that acquisition, or do you have one?
Ms. Anderson:
Part of the implementation plan is the server aspect.
Assemblyman Parks:
In the information you supplied on the fines, penalties, and restitution, I noted that the revenue generated in 2002 was 38 percent less than 2001. Could you explain why that decreased?
Ms. Anderson:
Penalties are from late transactions. Perhaps there were not so many of those. Fines would be from administrative sanctions, so there were probably not so many people who were sanctioned. What you do not see here are cases where penalties could not be collected if there were outstanding fines that were not paid.
Assemblywoman Chowning:
Performance indicator 6 (Exhibit C) page 2, indicates 809 complaints were received, but the rest of the numbers do not add up. Only 410 complaints were opened. I would encourage you to let us know if you need more staff to handle the complaints and issue the fines.
Ms. Anderson:
On the 809 complaints received, 234 were determined to be non-jurisdictional, and those are not opened as an investigation. The resolution of 160 complaints is due to the efforts of the staff. I believe we had one staff report missing for the month of July, so the numbers did not add up to 809, but the 410, the 160, and the 234 bring you closer. We need more staff. We do not have people to send out proactively to go into brokers’ offices and audit files. We also have inspectors of structures to regulate, community association managers to regulate, as well as the 645 licenses to issue. We no longer have an auditor to investigate embezzlement and fraud.
Senator Tiffany:
You generate money for the General Fund, and I believe you cannot do your job right now. If your system was up today, I would say go ahead and get the scanning system for documents.
B&I, Common Interest Communities – Budget Page B&I-26 (Volume 2)
Budget Account 101-3820
Ms. Anderson:
The carryforward for fiscal year (FY) 2003 was $1,391,488. We have proposed adding four positions in the enhancement units to support people that take phone calls and assist people. Right now, there is an ombudsman and one program officer responsible for the alternative dispute resolution program.
Senator Tiffany:
Are you talking about using the reserve to fund the new positions?
Ms. Anderson:
A few thousand dollars would be used from the fund. The projected expenditure for FY 2002 was $280,000, and for FY 2004, $365,800. We are tracking Senate Bill (S.B.) 100 which proposes a commission for common interest communities.
SENATE BILL 100: Makes various changes to provisions governing common-interest communities. (BDR 10-29)
We have submitted a fiscal note on that. The attorney general’s office has submitted a fiscal note and that will significantly impact the reserve fund. The projections we have now indicate it will take 7 years to deplete the reserve fund based upon the current revenue income from these unit fees.
Senator Tiffany:
If S.B. 100 passes, what is the fiscal note?
Ms. Anderson:
The fiscal note is approximately $400,000, and that would be taken from the reserve.
Senator Tiffany:
Instead of reducing the $3-per-unit fee, are you looking at spending it on adding four new positions, and if S.B. 100 passes, to form the commission?
Ms. Anderson:
Yes, and that fiscal note has additional positions, commission salaries, travel and all of the costs associated with hearings.
Senator Tiffany:
If it does not pass, what is your plan?
Ms. Anderson:
The contingency plan is to have my budget analyst do a projection based on costs. We can take a look at reducing fees, if that is appropriate.
Senator Tiffany:
By the statutes, are there any other areas of need where the surplus could be used?
Ms. Anderson:
No. It is set up to pay rent in the Bradley Building in southern Nevada, making a contribution toward the licensing system in the first year and a smaller one in the second implementation year. We have two self-funded budgets that will contribute toward that, and that is what we have given to our budget analysts.
Senator Tiffany:
Will the licensing system assessment come out of the reserve too?
Ms. Anderson:
Yes.
Senator Tiffany:
Since this $3-per-unit fee is quite a substantial amount, would the $3-per-unit fee be a top priority to put online first for collection?
Ms. Anderson:
Yes. One of our challenges in that program is we know we have a lot of unregistered associations. We are working with the Office of the Secretary of State and coordinating our efforts to identify associations because we know there are a number out there that are not registered. That is another aspect we will focus on in this next biennium.
Senator Tiffany:
Does that mean adding more positions?
Ms. Anderson:
It does not mean adding more than we have already written into our program.
Assemblywoman McClain:
How many associations do you think are not registered and not paying this
per-unit fee?
Ms. Anderson:
There are hundreds.
Assemblywoman McClain:
Do you think the new system will get them on line?
Ms. Anderson:
There will be more public awareness by the existence of the Web site to see which associations are registered, who the property managers or contact persons are, how many units there are, and what type of association it is.
Assemblywoman McClain:
This fee was established to fund an ombudsman. There are millions of dollars, and yet you say there are associations that are not paying the fees. I think the reasonable thing to do would be to cut back the fees. I must disclose that I live in a condominium where there is a homeowners’ association. I think this has gotten out of control over the past years; cutting back the per-unit fees is one option to help people who live in these places.
Senator Tiffany:
We have asked staff to look into the impact of cutting the per unit fee to $2. On the additional four positions, where will the program officers II positions be located?
Ms. Anderson:
They will be in the south. Two other positions are included in the fiscal note for S.B. 100. We do not know what the impact will be. The ombudsman’s office has not had the authority by law to assist in resolving complaints, and S.B. 100 would give that authority.
Senator Tiffany:
How would the north be served?
Ms. Anderson:
It would be served through travel and a toll-free telephone number to the ombudsman’s office for the State.
Senator Tiffany:
Is better coverage needed?
Ms. Anderson:
If we get one or two program officers in S.B. 100, I think we need an office in the north.
Senator Tiffany:
Are there two more positions asked for besides the four that are required by S.B. 100?
Ms. Anderson:
That is correct.
Senator Tiffany:
Is it your intention to have one office in the south and one in the north?
Ms. Anderson:
That is the intent if the need is there.
Senator Tiffany:
Are mediation, arbitration, and education all being addressed?
Ms. Anderson:
Yes. We have one person, and that is enough. We have no backlog.
Senator Tiffany:
Could the administrative assistant that you have requested be shared with the Real Estate Division?
Ms. Anderson:
Yes, that is the plan. There is a position plan for the office of the ombudsman in my handout. The four current and four additional positions are listed there. The administrative assistant is slated to be the first point of contact inside the Bradley Building for information for real estate services.
Senator Tiffany:
Would this position have a cost-allocation for each entity served?
Ms. Anderson:
That cost would be picked up by the common communities.
Senator Tiffany:
If the position serves various people, should that be cost-allocated? By statute we want to have the cost-allocation.
Ms. Anderson:
We can look at that.
Senator Tiffany:
Decision unit E-300, the transfer of funds to the real estate administration budget to support the licensing system, is a transfer of $95,000. How was the $95,000 determined?
Ms. Anderson:
We were looking at $75,000 in FY 2004 and $20,000 in FY 2005. That allocation looked at the 249,000 units registered as potential contacts to the office of the ombudsman, and against the 20,000 licensees in the state, and we came up with $75,000. We tried to look at the number of potential users of the system.
Senator Tiffany:
The reserve could offer more substance on the Web to the ombudsman program.
Assemblywoman Chowning:
On E-350, there are 249,000 units, 3200 information requests, and 800 problem assists. Eight hundred out of 249,000 is not a large percentage. There were 110 alternative dispute resolution (ADR) claims processed. Either a good job was done, or there was a backlog of 700 that have not been handled. If the ombudsman does not have authority, who is processing these alternative dispute resolutions?
Ms. Anderson:
The program officer in the Real Estate Division makes the arrangement for an arbitrator. A neutral third party does the arbitration. A filing fee is paid to file for arbitration. We are trying to let the program officer solve the problems without attorneys.
Assemblywoman Chowning:
I would like backup documentation on that.
Senator Tiffany:
We will go to E-502. How did you determine the need for 2500 handbooks?
Ms. Anderson:
With training sessions, an information center, and new laws that will be passed out of this session, there will be a high interest in the latest version of Chapter 116 of Nevada Revised Statutes (NRS). It is a projection based on what the interest might be in S.B. 100 and from any of the other 10 bills.
Eldon Hardy, Ombudsman, Las Vegas, Real Estate Division, Department of Business and Industry:
I would like people to understand the significance of a million people in the state who live in associations, many of them with issues and problems with their homeowner associations. I speak to 10 percent of the homeowners in the state, but I talk to some of them 4 or 5 times a day. We have four people that are dealing with a million people living in associations. Many of them are greatly affected by the problems they experience because they live in an association. Our office takes about 1500 calls per month and the success ratio is good. These people cannot afford to go through the ADR program. Many people from the north have to call long distance to our office. I would like to have at least two people in northern Nevada so the people there would have a contact person they could deal with directly. We do not have the authority and staff to do the best job we can.
Senator Tiffany:
By giving you authority you need, as well as adding two new positions in the budget plus two others, do you think that will solve the problem?
Mr. Hardy:
No. Although S.B. 100 is a good start and a good concept, it is not going to be functional enough in a timely manner to meet the needs of the homeowners.
Senator Tiffany:
What do you think that would require?
Mr. Hardy:
We need more people to meet with homeowners in board meetings, face-to-face and provide on-site education and advice. We need more authority to determine who is right or wrong in some of the disputes.
Senator Tiffany:
How many more staff would you like to add besides the four that you see here?
Mr. Hardy:
We need approximately 20.
Senator Tiffany:
What titles would you give those positions?
Ms. Anderson:
I believe he is talking about field officers.
Senator Tiffany:
Would you say that you would like to see more staff so they could go into the field and the reserves would pay the funding?
Mr. Hardy:
Yes.
Senator Tiffany:
Are there any bill drafts that would give you the authority to resolve some of the complaints?
Ms. Anderson:
We can reassess in another year, but we will be doing a lot to pull this together for a strong program.
B&I, Athletic Commission – Budget Page B&I-162 (Volume 2)
Budget Account 101-3952
Marc Ratner, Executive Director, Nevada Athletic Commission, Department of Business and Industry:
In the current fiscal year, we have had 46 events, and you will see by the calendar I passed out (Exhibit D) we have another 23 events. We have taken in $1.3 million this year.
Senator Tiffany:
We have some questions about the amateur boxing program, your contribution, and what the Governor has budgeted. There seems to be a discrepancy. The request was for $100,000 per year in the biennium, but the Governor allocated $50,000.
Mr. Ratner:
The promoters fund the amateur program. We get 50 cents per ticket sold on fights that gross under $500,000. We get $1 per ticket sold for fights that gross over $500,000. It is a pass-through amount of money. We do not get any money from the State General Fund. We pass out grants at every commission meeting to amateur clubs who write letters reviewed by the five commissioners asking for different travel funds. This should be a separate line item showing that it is no expense to the State.
Steven J. Abba, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
It is reflected as a separate revenue source to the budget as a ticket surcharge recommended at $50,000 per year. It has a separate expenditure category of $50,000 each year, titled “Amateur Boxing Program,” so it is segregated in this budget.
Mr. Ratner:
We never know how much we will get because it depends on how many events are held and how much revenue is collected. There is a carryover at the end of the fiscal year and it is put back.
Senator Tiffany:
Did you see impact from 9-11, or do you anticipate impact if we go to war?
Mr. Ratner:
After 9-11 we lost five events. We cannot anticipate how many fights we will have. The trend looks healthy now.
Senator Tiffany:
How was the tax on admissions, amusements, and entertainment avoided?
Dr. Luther Mack, Las Vegas, Chairman, Nevada Athletic Commission, Department of Business and Industry:
We did not want to raise the taxes because that would discourage customers from coming to the boxing arena, so we felt it was not necessary to tax the tickets.
Mr. Ratner:
We have been paying a 4-percent tax for the past 20 years. We have always had a gate tax.
Dr. Mack:
We are up against site fees. Indian gaming can offer a lower fee for sites because they do not have to pay the federal tax like the casinos here. We do not want to include it because of double taxation and potential competition.
Mr. Ratner:
The promoter pays 4 percent of the ticket back to the State. If the individual was paying the tax on the ticket, as opposed to the promoter, the promoter would have to pay on the taxed amount also. It would be included in the gate.
Assemblywoman Chowning:
What is a gate charge at an Indian gaming event? How do we know what the difference is?
Mr. Ratner:
There are several Indian reservations in the State of Connecticut. They are competing with us directly for major fights. They offer big site fees, they have a 10,000-seat arena, and they are holding matches now. Depending upon the magnitude of the fight, the prices of Nevada versus Connecticut could be the same, but it depends on what the Indian gaming is willing to pay the promoter. If it is a large fee, they will have to charge more for the tickets.
Dr. Mack:
We have three people in our office now, and we propose a reclassification for these people because that is the only way they can get a raise.
Senator Tiffany:
We do not reclassify just for a pay increase, we reclassify because of a job change.
B&I, Taxicab Authority – Budget Page B&I-147 (Volume 2)
Budget Account 245-4130
Senator Tiffany:
We have four issues to discuss: a proposed fee increase, the restoration of 11 positions plus 3 new ones, the increase in the Senior Ride Program, and the assistance with licensing processes for the Transportation Services Authority.
Assemblywoman Chowning:
These are members of the industry whose fees are to be increased, in some cases by two different agencies. For example, if they are taxicab owners, there is a fee, and if they are limousine owners, there is another increase. Could you tell us why the fees are being requested and what the fee increases will do for the consumers?
Joseph A. Dahlia, Acting Administrator, Taxicab Authority, Department of Business and Industry:
I have submitted a handout for your review (Exhibit E). Since 1987 we have operated on a 15-cents-per-trip-charge. After 9-11, we fell short of one million trips in 2001 and 650,000 trips in 2002, with a loss to the agency of $242,000 in revenue. Because of the loss in revenue, we have had to draw from our reserves. We are mandated to fund the Senior Ride Program if we have an excess of $200,000 in our reserves, and we are down to that now because of the losses after 9-11. We have S.B. 288 before the Legislature that would increase the 20,000 coupon books we give to senior ride to 30,000 coupon books.
SENATE BILL 288: Increases fees for compensable trips of taxicabs and driver’s permit to operate taxicab. (BDR 58-1251)
Additionally, with this increase we will bring the reserve back up, be able to keep the 11 officers at McCarran Airport and the 6 inspectors whose responsibility it is to inspect the taxicabs on a quarterly basis, provide services to the drivers coming in to get their permits, and maintain inspection vehicles.
Senator Tiffany:
Do you have a contingency plan if the fees are not approved?
Mr. Dahlia:
The contingency plan is that the four vacant positions at McCarran will not be filled, the existing seven employees at McCarran will be laid off, and the investigative staff will have to handle the entire county, which will increase the response time to one-half to one-hour.
Senator Tiffany:
What are the top three impacts if the increase does not pass?
Mr. Dahlia:
The first priority is the Senior Ride Program; second is loss of personnel; and third is replacing equipment.
Senator Tiffany:
Why do you need the three new positions?
Mr. Dahlia:
The three new positions are needed because of the tremendous growth. We do not have the number of people we need to issue permits, conduct investigations, and conduct inspections. We have implemented a dispatch system to better serve the community and the law enforcement community.
Senator Tiffany:
Are the three new positions for answering dispatch calls?
Mr. Dahlia:
Two of the three are to answer dispatch calls.
Senator Tiffany:
If the third is to expand the auditing functions, why are they being expanded?
richard a. boxer, administrative services officer I, taxicab authority, Department of business and industry:
We now have 1 management analyst II position. Two new taxicab companies have been certificated and we must audit 16 companies. We plan to use the new management analyst II to do surprise audits, convention audits, and possible fraud audits. We would like the person to be computer-literate to help internally.
Senator Tiffany:
How would you describe the help you are seeking with the computers?
mr. boxer:
We have a computer system manager on staff now. He is actually an investigator and wants to be on the road doing investigations. He has voluntarily taken over the computer functions.
Mr. Dahlia:
We have updated our computer system and we have found we are better served to pay one of our staff to go to school and learn how to do some programming, then write the programs and maintain the programs ourselves.
Senator Tiffany:
Is it realistic to believe you can find someone who can do audits programming? Would it be better to use one position for programming or for audit, and keep the job classification as it should be?
Mr. Dahlia:
We have to be versatile in this agency; because we are self-funded we do everything we can to hold the cost down.
Assemblywoman Chowning:
I am looking at your performance indicators. There were 4077 notices of violations issued, but that does not explain the breakdown of violation notices. There is a number given for the events requiring investigative activity, but what percentage of the total would this be? What is the percentage of 18,000 driver permit transactions of the total?
Mr. Dahlia:
There was only one company violation to my knowledge last year; all the rest were drivers.
Assemblywoman Chowning:
What happened with those 4076 violations issued to drivers?
Mr. Dahlia:
The drivers were issued citations, the cases were heard, and the hearing officer made his determination whether it was a fine or going to classes.
Assemblywoman Chowning:
Did every driver have at least one citation?
Mr. Dahlia:
There are many repeat offenders.
Assemblywoman Chowning:
We need to have accurate numbers to be accountable to the taxpayers. Could you update the numbers for us?
Mr. Dahlia:
The citations are a direct result of a call by someone who complained about a driver’s specific actions or of an incident an investigator saw in the field. It accurately reflects how many times we have issued citations or notices of violations to a driver. Complaints about service have to do with the customer being dissatisfied with the route taken, the demeanor of the cab driver, or failure of the cab driver to perform his responsibilities under the statutes.
Senator Tiffany:
What is the Taxicab Authority’s role for licensing limousine drivers for the Transportation Services Authority?
Paul J. Christensen, Las Vegas, Chairman, Transportation Services Authority:
They do not have a role in that yet because we do not have the authority to license limousine drivers yet. That is part of S.B. 192.
SENATE BILL 192: Makes various changes to provisions governing certain motor carriers and drivers. (BDR 58-537)
Senator Tiffany:
Does S.B. 192 address that question?
Mr. Christensen:
S.B. 192 gives the power to the Transportation Services Authority to license limousine drivers and the funding in the bill to charge fees in order to offset that cost. That bill has not had a hearing yet, and I do not know if it is scheduled for a hearing.
Senator Tiffany:
Could you give the five major points in S.B. 192?
Mr. Christensen:
The major point in S.B. 192 is granting the authority to license limousine drivers. Other points would be for impound authority for household goods movers and tow trucks, revision of application fees to cover those costs, collection of reimbursement fees for the actual costs of investigations, and increasing user fees to pay for costs of the extra personnel necessary to license limousine drivers and impounds.
Senator Tiffany:
How many limousines operate in the state?
Mr. Christensen:
I think there are approximately 900.
Senator Tiffany:
Were 10 positions requested in S.B. 192?
Mr. Christensen
There are 9.6 positions.
Senator Tiffany:
How did you arrive at 9.6?
Dave Kimball, Las Vegas, Deputy Commissioner, Transportation Services Authority, Department of Business and Industry:
We looked at the revenues we could generate in the fee categories and applied that to meet our needs for the budget.
Senator Tiffany:
Are you increasing the application fees, the tariff charges, the toll fees, fees for licensing the drivers, investigation fees, and actual cost fees?
Mr. Kimball:
Yes, that is how we built the budget. I did not mention the $350 annual fees on limousines. We are making some estimates, and when we go to the transportation committee, if the amount is less than $350, we will backtrack and make sure the two balance.
Mr. Christensen:
To clarify our discussion, the limousine fee was the amount agreed upon last session. That is the agreement we talked about, an agreement between the industry and us.
Senator Tiffany:
There are three areas of enforcement responsibility that fall short of a reasonable performance. Could you explain the reason for the low percentages and what the impact would be on the regulatory environment?
Mr. Kimball:
We have been unable to be out there monitoring the industry because there should be 18 shifts and we have 9 shifts to fill to meet the total. We have never had an increase in enforcement staff since we started.
Senator Tiffany:
Do you believe the performance indicators in enforcement, inspection, and the financial audit will increase if you add staff?
Mr. Kimball:
Absolutely.
Senator Tiffany:
How many companies are represented in these performance indicators?
Mr. Kimball:
Approximately 300 are represented.
Senator Tiffany:
Is there a statutory requirement for the number of inspections you must do or audits you must have?
Mr. Kimball:
There is not a statutory requirement for the number of inspections to be done. NRS 706.171 and NRS 706.172 set out the responsibilities. We believe a reasonable inspection would be every other year, or 50 percent of the vehicles per year.
mr. christensen:
The responsibility is statutory, and the only way to meet the responsibility is through the auditing process.
Senator Tiffany:
How many investigators do you have on staff?
Mr. Kimball:
We have nine field investigators, a supervisor in the north, a chief investigator in the south, and a manager of transportation is the chief of enforcement, plus a financial analyst who works in the enforcement section.
Senator Tiffany:
Are they certified?
Mr. Kimball:
Yes. They are all level II policemen. To complete my answer to your questions, that represents 26 audits out of 296 companies, and most of those are an audit of a new application. We are not getting out in the field at all.
Senator Tiffany:
How often is the investigator’s certification renewed?
Mr. Kimball:
I think the only renewal is with their firearms. Once they are certified in Police Officers Service Training (P.O.S.T.) they maintain that designation.
Mr. christensen:
They are only renewed if they leave service for a period of time. They must maintain certain standards, and our manager of transportation keeps records of that.
Senator Tiffany:
Can you reduce travel if you teleconference from north to south?
Mr. Kimball:
That works fairly well, but when an application for a new business is being reviewed, we need to have the commissioner talk to the administrative attorney beforehand to look at all the paperwork, ask questions, and be able to give advice. We have tried to cut back on our travel.
Assemblywoman Chowning:
Is an increase being proposed for the northern company taxicabs? Is the agreed amount per limousine the same as 2001?
Mr. Christensen:
I do not know where they stand at the present time. That is what it was when we approached the Legislature last time and that was the agreed upon amount last time.
Assemblywoman Chowning:
Was $350 agreed upon in 2001?
Mr. Christensen:
Yes. Cab fees in the north had already been raised.
Assemblywoman Chowning:
Have 56 percent of the companies have been inspected?
Mr. Kimball:
Yes. Fifty-six percent of the companies have been inspected, but not fifty-six percent of the vehicles. One company may have 300 vehicles, another company may have 10.
Assemblywoman Chowning:
What are the benefits for the public, the company owners, and the people paying these fees?
Mr. Christensen:
The benefits to the public would be a safer ride, because there would be more inspections, plus the drivers would be licensed with background checks which will be beneficial both to the public and to the companies. The benefit to the public of impound ability would ensure that household goods movers would not be able to put goods on the truck and double the price before unloading them. Drug testing and training records would be required to be kept.
B&I, Transportation Services Authority Admin Fines – Budget Page B&I-158
(Volume 2) Budget Account 226-3923
Assemblywoman Chowning
S.B. 192 shows $120,000 in additional fine revenue is projected. I think you would be encouraged to fine if those fines bring in revenue for your industry.
Mr. Christensen:
We can fine large amounts, which we do not do. We are looking for compliance rather than punitive damages. We use the fines to accomplish compliance. We have stayed within the guidelines put out by the attorney general’s office, because the fine money can only be used to satisfy the costs of enforcement. None of the fine money goes into administrative costs. We are not allowed to do that.
Senator Tiffany:
What assumptions were made in estimating the additional fine revenue?
Mr. Kimball:
We took a very conservative historical look at the fines we had imposed on household goods movers, though we were unable to collect. The estimate is probably half of what we will get.
Senator Tiffany:
On E-720, how many background checks are currently being performed?
Mr. Kimball:
Decision unit E-720 gives us the ability to do the national crime information (NCI) checks. We have to do a background check every time there is an application to see if there is a criminal record. We have approximately 50 applications per year, but with the bill we would be required to do a background check on every driver. We wait 10 to12 days to get those checks back.
Senator Tiffany:
How many are you doing?
Mr. Kimball:
Now, about 50 per year, and with the bill we would pick that up with every driver, so you would add 2400 more.
Assemblywoman Chowning:
Are you asking for the new positions only if the bill passes? If it does not pass, will it remain the same?
Mr. Christensen:
That is correct.
A.R. Fairman, Lobbyist, Budget Chauffeur Drive, Pty. Ltd. Trailways Transportation System:
We used to be a regulated carrier in the state. Now we are a transport service through the state as a scheduled bus service. After analyzing the bill and the recommendations by the Governor, a proposal was put together (Exhibit F. Original is on file in the Research Library.). If S.B. 192 is going to post fines or regulate the charter bus industry again, we would like to know how this can be accomplished.
Assemblywoman Chowning:
We cannot answer that question. This will be handled in the Assembly Committee on Transportation.
Mr. Christensen:
We do not anticipate licensing bus drivers. We are talking about limousine drivers.
Mr. Fairman:
It is not clear in the bill.
Mr. Christensen:
Our bill is for limousine drivers statewide and taxicab drivers in the north, not buses.
Assemblywoman Chowning:
If there are any other questions, we would ask the Transportation Services Authority to answer the questions in writing.
B&I, Dairy Commission –Budget Page B&I-69 (Volume 2)
Budget Account 233-4470
David Geordge, Management Analyst, State Dairy Commission, Department of Business and Industry:
The fee increases came about as a result of discussions in October 2002 with the budget office regarding a projected reserve balance in FY 2005. At that point, Mr. King, Kathalie Koche, and I found ways to put that negative balance into positive reserve balance. One way was with the increase in fluid milk. In 1994, the fluid milk and cream assessment appeared in our budget as a revenue line item. In October 1994 it was suspended, and it was removed from our budget in 1995, after the legislative session. It was re-instituted in July 2001 to support the dairy inspection program. The revenues from that have supported that inspection program since July 2001.
Senator Tiffany:
How is the dairy inspection program different from the health division inspection?
Anna Vickrey, Rating Officer, Milk and Dairy Foods Inspection Program, State Dairy Commission, Department of Business and Industry:
We have the same program, but have expanded it to increase the inspection numbers. We want to make sure our industry is able to ship milk across state lines. With the inspection programs increased we have better quality staff, with a veterinarian on the staff, and training with other regulatory staff provided to our employees. We received Food and Drug Administration (FDA) training, and by doing so we can go out into the plants and farms to use that knowledge. It helps them keep on top of the industry and ensures they will be able to continue to have good inspections.
Senator Tiffany:
Is there a statutory requirement regarding investigations?
Bob King, Chief Investigator Compliance/Audit, State Dairy Commission, Department of Business and Industry:
There is no statutory requirement. Originally those performance indicators were set up with four investigators on board. Since then, we have three investigators on board, and one of the positions has been changed to operations manager.
Senator Tiffany:
Why did you choose fluid milk and cream for the assessments?
Mr. King:
We looked at all the revenues that came in. We had two meetings, one in the south and one in the north. We invited all the licensees who participate in the process of paying us assessments throughout the year to decide where we
would find the extra revenues. After the meetings, the three commissioners made the decision it was logical that the fluid milk be assessed at a higher rate.
Senator Tiffany:
In other words, those in the field determined to assess themselves to maintain or increase your reserve balance.
I have some questions on Financial Institutions, 101-3835; however, we do not have time to cover that. We will adjourn the meeting at 10:55 a.m.
RESPECTFULLY SUBMITTED:
Julie Walker,
Committee Secretary
APPROVED BY:
Senator Sandra J. Tiffany, Chairman
DATE:
Assemblywoman Vonne Stout Chowning, Chairman
DATE: