MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session June 26, 1995 The Committee on Ways and Means was called to order at 8:12 a.m., on Monday, June 26, 1995, Chairman Marvel presiding, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Jan Evans, Vice Chairman Ms. Sandra Tiffany, Vice Chairman Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Vonne Chowning Mr. Jack D. Close Mr. Joseph E. Dini, Jr. Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. Bob Price Mr. Larry L. Spitler COMMITTEE MEMBERS ABSENT: None STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst Mr. Dan Miles, Fiscal Analyst Mr. Gary Ghiggeri, Deputy Fiscal Analyst Ms. Jeanne Botts, Program Analyst SENATE BILL 126 Revises limit on balance in fund to stabilize operation of state government and revises amount of reserve required in state budget. Mr. Dan Miles, Fiscal Analyst, explained he was appearing on behalf of Senator Ray Rawson, Clark County Senatorial District No. 6. Mr. Miles testified S.B. 126 would change the limit on the state's "rainy day fund" from $100 million to an amount equal to 10 percent of annual General Fund appropriations. As the amount of appropriations increased, the allowable limit on the reserve fund would increase. Ms. Giunchigliani inquired why the limit was set at 10 percent. Mr. Miles replied the fund was tied to the proposed reserve set forth in NRS 353, which requires the Governor or the Budget Director to propose a budget with a reserve of between 5 percent and 10 percent. MR. ARBERRY MOVED DO PASS S.B. 126. MR. FETTIC SECONDED THE MOTION. Ms. Giunchigliani asked where the money for the rainy day fund would be coming from. Mr. Miles stated no funding would be placed into the rainy day fund pursuant to S.B. 126. The intent of the legislation was simply to adjust the limit on the amount which could be deposited to the fund. Mr. Stevens noted the Governor recommended placing $100 million into the rainy day fund. The current balance of the fund is approximately $17 million. He explained appropriations recommended to increase the rainy day fund would be one-time appropriations. The fund was designed to be used in times when revenues did not meet projections. Ms. Giunchigliani expressed concern with setting a higher limit on a fund where money could be placed prior to adequately funding the base budget. THE MOTION CARRIED. MRS. CHOWNING, MRS. EVANS, MS. GIUNCHIGLIANI, AND MR. SPITLER WERE OPPOSED. MR. DINI AND MR. HETTRICK WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 218 Makes appropriation from state Highway Fund to Department of Motor Vehicles and Public Safety for business process reengineering study and revision of existing motor vehicle operating applications. Mr. Ray Sparks, Acting Deputy Director, Department of Motor Vehicles and Public Safety, explained S.B. 218 is a request for a one-time appropriation of $935,388 to fund a business process reengineering (BPR) study and programming activities resulting from that study. He noted there were considerable problems with the Department of Motor Vehicles' level of service, particularly in Las Vegas. In the past the department has attempted to solve those problems by adding positions and working space. The purpose of this request was to obtain funding to undertake a study to analyze work processes to determine how those processes could be made more efficient. Mr. Sparks noted the department was currently constrained from making any significant improvements in its operation by the age of its automation system. The department wished to ensure work processes were efficient before an investment was made in new computer equipment to automate those work processes. Ms. Giunchigliani noted the bill would have to be amended to correspond to the budget closing. She explained $595,000 had been allocated for the BPR in the budget. The balance of the requested funding was to be held aside in a reserve fund. At the completion of the BPR the department would be required to approach the Interim Finance Committee for the release of the reserve balance. Mr. Sparks stated it was his understanding the funding contemplated by S.B. 218 for computer programming was distinct from the money which was set aside in reserve for computer hardware in the budget. ASSEMBLY BILL 622 Revises provisions related to tobacco. ASSEMBLY BILL 637 Revises provisions governing crimes related to tobacco and licensing of cigarette dealers. Chairman Marvel noted A.B. 622 had been heard previously by the committee but there were additional questions regarding this legislation to be answered. Mr. Harvey Whittemore, representing R. J. Reynolds Tobacco, testified he had been in discussion with representatives of the Attorney General's Office and the Bureau of Alcohol and Drug Abuse regarding compliance with and enforcement of the provisions of A.B. 622 and A.B. 637. He explained compliance under A.B. 622 was envisioned to use the $60,000 funding allocated to the Attorney General in A.B. 637 to allow the Attorney General to develop a survey mechanism for random, unannounced inspections to compile information from which to report violations to local law enforcement agencies or to initiate enforcement proceedings against retailers who violated the law. Mr. Whittemore noted the Attorney General had expressed concern that some of the allocated funds be made available for enforcement of the law. Ms. Brooke Nielsen, Assistant Attorney General, stated the concerns raised by the Attorney General regarding how unannounced inspections would be conducted had been addressed in the amendments to the bill to allow the Attorney General to contract with others to perform those inspections. She added concern about funding the inspection program and enforcement efforts sufficient to satisfy federal requirements had been alleviated by A.B. 637. Chairman Marvel asked if the Attorney General was agreeable to making her office the vehicle for implementing the program. Ms. Nielsen responded affirmatively. She noted if $60,000 was found to be insufficient to fund the inspection and enforcement efforts, the Attorney General would seek additional funding. Mrs. Chowning asked how sale of cigarettes to minors from vending machines could be prohibited. Mr. Sam McMullen, representing Phillip Morris, stated an attempt had been made to locate cigarette vending machines in areas not accessible to minors. Mrs. Chowning questioned whether this legislation would be effective in keeping minors from purchasing cigarettes from vending machines. Mr. McMullen answered at least the restriction was placed into statute. He noted there was a consensus among retailers that monitoring access to cigarettes by minors represented a key piece of their business operation. Mrs. Chowning expressed appreciation for the cooperation of the retailers. Chairman Marvel questioned whether the $60,000 should be appropriated to the Attorney General's Office. Ms. Nielsen said the combined intent of A.B. 622 and A.B. 637 was that the funding go to the Attorney General for inspection and enforcement. She suggested amending that bill to that effect. Chairman Marvel stated the pertinent language would be placed into a separate bill. Chairman Marvel asked if the effective date of this legislation should be July 1, 1995. Ms. Liz Breshears, Bureau of Alcohol and Drug Abuse, noted unless the state could show an enforcement program in effect prior to October 1, 1995, it would be in violation of federal law. She stated the effective date should be July 1, 1995, in order to allow compliance with federal law. MS. GIUNCHIGLIANI MOVED AMEND AND DO PASS A.B. 622 TO ADD AN EFFECTIVE DATE OF JULY 1, 1995. MRS. CHOWNING SECONDED THE MOTION. THE MOTION CARRIED. MRS. BROWER WAS OPPOSED. MR. DINI AND MR. HETTRICK WERE ABSENT. MS. GIUNCHIGLIANI MOVED AMEND AND DO PASS A.B. 637 TO CHANGE THE EFFECTIVE DATE TO JULY 1, 1995, DELETE SECTION 7, REMOVE REFERENCES TO THE BUREAU OF ALCOHOL AND DRUG ABUSE AND THE DEPARTMENT OF EMPLOYMENT, TRAINING AND REHABILITATION, ALLOCATE FUNDING TO THE ATTORNEY GENERAL, AND DELETE REFERENCES TO INAPPLICABLE STATUTES. MR. FETTIC SECONDED THE MOTION. THE MOTION CARRIED. MRS. BROWER WAS OPPOSED. MR. DINI AND MR. HETTRICK WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 16 Increase compensation of Supreme Court justices and district court judges. Ms. Giunchigliani said she was not comfortable with the salary increase proposed by S.B. 16. She suggested increasing salaries 7 percent and allowing for cost of living adjustments, less the amount of longevity pay. Mr. Stevens noted judges' salaries could not be increased during their term of office, i.e., the current judges' salaries would not be increased until after they were reelected. Judges' terms were six years, during which they could not receive a salary increase, which was the reason for the large increase requested in S.B. 16. Ms. Giunchigliani noted longevity pay for judges was cumulative and amounted to between 4 percent and 16 percent. She stated she would not support more than a 7 percent increase in salaries. Mrs. Evans said she was concerned with the magnitude of the increase requested. She asked what the percentage increase would be. Mr. Stevens said the proposed increase was 26.5 percent. Mrs. Evans stated she could not support an increase of that size. She suggested this was the time for legislators to request an increase in compensation, possibly at the same rate as allowed for state employees. She noted the last increase to legislators was approved in 1985. Chairman Marvel noted the salary commission had made a recommendation to increase legislative salaries although the Legislature was sensitive to approving increases for its members. Ms. Tiffany expressed agreement with Mrs. Evans' suggestion to increase compensation to legislators. SENATE BILL 78 Makes appropriation to Department of Education for training of school administrators. MRS. EVANS MOVED DO PASS S.B. 78. MRS. BROWER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. DINI AND MR. HETTRICK WERE ABSENT FOR THE VOTE. * * * * * ASSEMBLY BILL 176 Establishes formula for determining mobility of pupils. Chairman Marvel stated it was his understanding there was no fiscal note associated with A.B. 176. Ms. Giunchigliani said Chairman Marvel's understanding was correct. Mr. Stevens said there was a companion bill to A.B. 176. A.B. 176 defined how to count students. A.B. 275 provided the funding. Ms. Jeanne Botts, Program Analyst, Fiscal Division, noted amendments to A.B. 176 revised the language to make the formula coincide with the formula used by the Department of Education in compiling the school-by-school accountability reports. MS. GIUNCHIGLIANI MOVED AMEND AND DO PASS A.B. 176. MS. TIFFANY SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. DINI AND MR. HETTRICK WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 226 Creates fund for educational technology. Mr. Stevens noted this bill had been passed on June 16, 1995, but was brought back to committee following further review by fiscal staff. He explained there was no General Fund impact associated with S.B. 226. MS. TIFFANY MOVED DO PASS S.B. 226. MR. ARBERRY SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. DINI AND MR. HETTRICK WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 470 Makes appropriation to Department of Education to develop and carry out new high school proficiency examination. MR. ALLARD MOVED DO PASS S.B. 470. MR. FETTIC SECONDED THE MOTION. Mr. Arberry asked if funding for this appropriation was included in the Executive Budget. Mr. Stevens stated this appropriation was not included in the Executive Budget. Ms. Botts noted this funding was requested by the Department of Education but it was not recommended by the Governor. The Governor did recommend funding new proficiency tests for grades four and eight. Ms. Tiffany inquired how this appropriation related to the accountability report. Ms. Botts explained this appropriation would pay for the development and implementation of the new high school proficiency test which would replace the test currently being used. She noted the current test was developed in 1988. Ms. Botts explained the results of the new test would be reported in the accountability report. Ms. Tiffany asked if the new testing program would be implemented prior to the 1997 legislative session. Ms. Botts responded the new test was proposed to be administered in the second year of the biennium and any unspent funding would revert at the end of Fiscal Year 1997. If problems were encountered, the test could be delayed until the following year. She noted the new test was developed by Nevada teachers to correspond with curriculum required for high school graduation in Nevada. THE MOTION CARRIED UNANIMOUSLY. MR. SPITLER WAS ABSENT FOR THE VOTE. * * * * * SENATE BILL 386 Makes various changes concerning program of accountability of public schools and statewide achievement and proficiency testing of pupils. Chairman Marvel noted this bill had been passed but committee members had additional questions. Ms. Giunchigliani asked if this test would be limited to grades four and eight. Ms. Botts responded affirmatively. She noted a commercial test would be used. The Governor recommended funding of $479,000 in the Executive Budget. The Senate Finance Committee recommended increasing the appropriation to $670,000 to include funding for statewide scoring and an equating analysis. The Senate further amended the bill to require school districts to report the results of tests administered to grades other than four and eight. Ms. Giunchigliani inquired how long the current test had been used. Ms. Mary Peterson, Superintendent of Public Instruction, reported the test had been in use for approximately seven years. The standard for using the test was five years. Chairman Marvel asked if positive results were being gathered from the testing process. Ms. Peterson responded the results of the tests were questionable due to the length of time they had been in use. Mrs. Chowning questioned how tests could be administered to non-English speaking students. Ms. Peterson stated students who were not proficient in English would be exempt from the test. Mrs. Chowning asked if that information would be included in the accountability report. Ms. Peterson stated it would be useful information to include in the report. SENATE BILL 526 Authorizes Director of Office of Science, Engineering and Technology to engage in other employment under certain circumstances. Ms. Tiffany suggested moving this position out of the Governor's Office into the Commission on Economic Development. Ms. Giunchigliani agreed with Ms. Tiffany. Mr. Dini said he was opposed to moving this position out of the Governor's Office. MS. TIFFANY MOVED TO AMEND AND DO PASS S.B. 526 TO DELETE SUBSECTIONS 1 AND 2 OF SECTION 2 AND MOVE THE POSITION TO THE COMMISSION ON ECONOMIC DEVELOPMENT. MR. CLOSE SECONDED THE MOTION. Mr. Dini repeated his opposition to moving the position. He noted this was a policy which was the responsibility of the Governor, and the position should not be removed from the Governor's Office. He noted the committee heard no testimony supporting moving the position to the Commission on Economic Development. THE MOTION FAILED FOR LACK OF A MAJORITY VOTE. MR. ALLARD, MRS. CHOWNING, MR. DINI, MR. FETTIC, MR. HETTRICK, CHAIRMAN MARVEL, AND MR. PRICE WERE OPPOSED. MR. ARBERRY, MRS. EVANS, AND MR. SPITLER WERE ABSENT FOR THE VOTE. * * * * * MR. DINI MOVED AMEND AND DO PASS S.B. 526 TO DELETE SUBSECTIONS 1 AND 2 OF SECTION 2. MR. FETTIC SECONDED THE MOTION. THE MOTION CARRIED. MS. GIUNCHIGLIANI AND MS. TIFFANY WERE OPPOSED. MR. ARBERRY, MRS. EVANS, AND MR. SPITLER WERE ABSENT FOR THE VOTE. * * * * * ASSEMBLY BILL 181 Makes appropriation to University and Community College System of Nevada for support of health service corps. Mr. Dini stated this program was instituted by the Legislature in 1989. The program provides the services of doctors, physician assistants, nurse practitioners, nurse midwives, and a medical student to rural Nevada. He explained if state funding was eliminated, all federal matching funds would disappear as well. Ms. Giunchigliani asked if only rural Nevada was served by this program. Mr. Dini stated services were not limited to rural Nevada. MR. DINI MOVED DO PASS A.B. 181. MR. HETTRICK SECONDED THE MOTION. Ms. Giunchigliani asked if this funding was included in the budget. Mr. Dini stated it was not. Ms. Tiffany asked what the funds would be used for. Mr. Dini said the appropriation was to assist doctors with student loan repayments to encourage them to practice in Nevada. Mr. Close asked how this program differed from the W.I.C.H.E. program. Mr. Dini noted there were no doctor positions in the W.I.C.H.E. program. Mrs. Brower inquired who had oversight responsibility for this program. Mr. Dini said the program is administered by the University and Community College System. Mr. Allard noted many of the program doctors served rural Clark County, and he was in favor of this program. THE MOTION CARRIED UNANIMOUSLY. MRS. EVANS ABSTAINED. MR. ARBERRY AND MR. PRICE WERE ABSENT FOR THE VOTE. * * * * * ASSEMBLY BILL 695 Creates presidential preference primary election. MR. FETTIC MOVED DO PASS A.B. 695. MR. CLOSE SECONDED THE MOTION. THE MOTION CARRIED. MRS. CHOWNING, MRS. EVANS, MS. GIUNCHIGLIANI, AND MR. SPITLER WERE OPPOSED. MR. ARBERRY AND MR. PRICE WERE ABSENT FOR THE VOTE. * * * * * BUDGET CLOSINGS LEGISLATIVE COUNSEL BUREAU - PAGE 157 Mr. Stevens stated there were some differences in the Senate and Assembly budget closings which needed to be resolved before the Appropriations Act could be introduced. The differences related to additional staffing and data processing equipment necessary to create a legislative budget document. He noted funding for one research position was also requested in a bill which remained to be heard in the Assembly. Chairman Marvel noted the Assembly would not process legislation to request a legislative budget office, but the Fiscal Analysis Division should be provided with additional tools to continue to perform its current function. Mr. Dini agreed it was important to fund additional staff and equipment to create a link between the Fiscal Analysis Division and the Budget Division as a means of improving the Legislature's involvement in the budget process. Mr. Spitler asked if the fiscal impact would be the same as it would have been if the legislative budget office was created. Mr. Stevens stated the Senate Finance Committee approved funding for a position to research federal mandates in the Research Division budget. The ongoing costs related to the Fiscal Analysis Division would be approximately $210,000 annually and would provide for three Program Analyst positions and one Management Assistant position. Mrs. Evans said it was time for the Legislature to support its own branch of government. She expressed support for augmenting the Fiscal Analysis Division budget. She asked that more time be given to consider the need for the research position. MRS. EVANS MOVED TO REOPEN THE BUDGET TO ADD FUNDING TO SUPPORT ADDITIONAL STAFFING AND EQUIPMENT FOR THE FISCAL ANALYSIS DIVISION. MR. HETTRICK SECONDED THE MOTION. Mr. Spitler stated he opposed funding additional positions because the function of those positions had not been defined and he was concerned they would be used as legislative budget office staff. THE MOTION CARRIED. MR. SPITLER WAS OPPOSED. MR. ARBERRY AND MS. GIUNCHIGLIANI WERE ABSENT FOR THE VOTE. BUDGET CLOSED. * * * * * ASSEMBLY BILL 421 Revises provisions relating to taxation of liquefied petroleum gas. Chairman Marvel stated an amendment had been proposed to increase tax rates to $.17 per gallon for liquefied petroleum gas and $.23 per gallon for compressed natural gas. MRS. CHOWNING MOVED AMEND AND DO PASS A.B. 421. MRS. BROWER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. ARBERRY WAS ABSENT FOR THE VOTE. * * * * * There being no further business, the meeting was adjourned at 11:00 a.m. RESPECTFULLY SUBMITTED: Dale Gray, Committee Secretary Assembly Committee on Ways and Means June 26, 1995 Page