MINUTES OF THE MEETING OF THE JOINT SUBCOMMITTEE ON PUBLIC SAFETY, NATURAL RESOURCES AND TRANSPORTATION ASSEMBLY COMMITTEE ON WAYS AND MEANS AND SENATE COMMITTEE ON FINANCE Sixty-eighth Session May 4, 1995 The meeting of the Joint Subcommittee on Public Safety, Natural Resources and Transportation of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order at 7:40 a.m., on Thursday, May 4, 1995, Chairman Fettic presiding, in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. ASSEMBLY SUBCOMMITTEE MEMBERS PRESENT: Mr. Thomas A. Fettic, Chairman Mr. Larry L. Spitler, Chairman Mr. Morse Arberry, Jr. Mr. Jack D. Close Ms. Chris Giunchigliani Mr. John Marvel ASSEMBLY SUBCOMMITTEE MEMBERS ABSENT: None SENATE SUBCOMMITTEE MEMBERS PRESENT: Senator William R. O'Donnell Senator Bernice Mathews SENATE SUBCOMMITTEE MEMBERS ABSENT: Senator Lawrence E. Jacobsen, Chairman (Excused) STAFF MEMBERS PRESENT: Mr. Gary Ghiggeri, Deputy Fiscal Analyst Mr. Bob Guernsey, Deputy Fiscal Analyst Ms. Debbra King, Program Analyst DEPARTMENT OF MOTOR VEHICLES AND PUBLIC SAFETY - PAGES 1679-1745 Chairman Fettic asked for input from members of the subcommittee regarding the proposed reorganization of the department. He noted fiscal staff advised if the department was split, there could be a General Fund impact of between $900,000 and $1.3 million per year. Mr. Arberry said he would not like to see the subcommittee close this budget until funding was identified to offset this General Fund impact. He noted there was the potential for making mistakes by closing this budget prematurely. He asked the Chairman to consider not taking action to close this budget. Mr. Marvel asked for an explanation of the General Fund impact if the department was split. Ms. Debbra King, Program Analyst, responded the impact to the General Fund would be between $900,000 and $1.3 million, depending on allocations for revenue and manpower and how much of those funds could provide support for administration and how much were restricted grant funds. Chairman Fettic stated he would like the subcommittee to consider Mr. Arberry's request. He expressed concern that other budget accounts would be affected by the subcommittee's action on this budget. Ms. King stated the proposed department reorganization would actually impact only four budget accounts. Other accounts would simply be moved from one department to the other. Senator O'Donnell noted there was an unconstitutional provision in the funding of this department, and if the decision was made to reorganize this department into two separate departments, additional funding would be required. He suggested the subcommittee seek the Administration's position on whether or not to split the department. If the Administration wanted the department to be split, it would have to present its proposal for the additional funding. Senator O'Donnell stated the focus here was hiring an administrator who would operate the Department of Motor Vehicles effectively. The department has a Deputy Director of Motor Vehicles but is not able to offer a salary commensurate with the desired position qualifications. He suggested both problems could be solved by increasing salaries of the deputies of the department rather than splitting the department but any action should be made in conjunction with the Administration. Senator O'Donnell asked if there was a representative of the Governor in the audience who could express the Governor's opinion on this matter. There was not. Mr. Marvel said he was not convinced splitting the department would solve problems with the agency in Las Vegas. He agreed with Senator O'Donnell that hiring another Deputy Director might be the most effective course of action. Mr. James Weller, Director, Department of Motor Vehicles and Public Safety, said splitting the department would allow the individual in charge of the Department of Motor Vehicles (in the event the split occurs) to concentrate on provision of service in Las Vegas. He expressed his opinion hiring another Deputy Director was not the issue. He agreed with Senator O'Donnell the issue was to increase salaries for existing Deputy Director positions to entice more qualified and dedicated people to fill those positions. Mr. Weller said addressing service issues in southern Nevada would mean hiring more people and acquiring more and better equipment. He noted that was addressed in the department's five-point plan. Mr. Marvel inquired whether funding for more people and equipment was included in the Executive Budget. Mr. Weller said he did not know the status of funding. The issue was how to provide funding in light of the 22 percent cap. There had been a proposal to raise the cap. There was also a proposal to use the 6 percent motor vehicle commission for the additional funding. Mr. Marvel asked about the status of pending legislation. Mr. Bill Gosnell, Chief of Administrative Services, stated a bill was pending in the Senate Committee on Transportation. Discussions were being heard on the element of that proposed legislation regarding the $6 checkoff for the Highway Patrol. The proposal to remove the 22 percent cap was part of legislation pending in the Assembly, which was expected to be addressed within a week. Another Senate bill was referred to the Senate Committee on Finance which also deals with the $6 checkoff, but not with the 22 percent issue. Mr. Close expressed frustration with the lack of information regarding the potential costs associated with increasing salaries. He said he agreed with Mr. Arberry that action on this budget was premature. He suggested fiscal staff develop cost information for options other than splitting the department (i.e., increasing salaries for individuals in both departments). Mr. Gosnell noted Mr. Weller had presented salary proposals for the Deputy Director positions for consideration by the Budget Division. The Executive Budget currently reflected a second Director position for the Department of Motor Vehicles. He noted that was the only new position which would result from splitting the department. If the split was not accomplished and Deputy Director salaries were increased, the new Director position could be eliminated, resulting in a cost savings. Chairman Fettic stated action on the department reorganization would be held until Thursday, May 11, 1995. He asked the Budget Division to provide additional information to the subcommittee regarding the costs of the proposed departmental split prior to that time. He expressed the hope this issue could be resolved at the next subcommittee meeting. Mr. Marvel inquired whether a salary proposal for the Deputy Director positions had been submitted. Mr. Weller answered a salary proposal had gone through the budget process. He explained a portion of the funding allocated for the second Director position would be distributed to the Deputy Director positions. Mr. Marvel asked if both positions were unclassified. Mr. Weller responded affirmatively. Mr. Weller noted 35 people were paid more than the Deputy Directors, and there was a potential for the number to go beyond 35 because of overtime pay. Chairman Fettic asked Mr. Weller to provide that information to fiscal staff. Mr. Weller agreed to do so. DRIVERS LICENSE - PAGE 1701 REGISTRATION - PAGE 1711 Ms. King noted the subcommittee had previously discussed the agency's proposal for Level II funding to allow offices to be open 12 hours Mondays through Fridays and 8 hours on Saturdays and 80 percent of service windows to be open 100 percent of that time. The purpose for extending business hours was to reduce lines in the Las Vegas offices. Ms. King stated the agency had prepared a plan to phase in the proposed program. Beginning in October 1995, staff would be hired for the West Flamingo Office. After a two-month training period additional staff would be hired in December 1995 and trained for two months. In February 1996 the office would begin operating at full staffing and at the expanded hours. After three months, the department would report to the Interim Finance Committee on the impact of the expanded operations (i.e., whether or not lines were reduced). Ms. King reported on the cost estimates for the phased-in approach. The cost for Fiscal Year 1997--assuming continuation of the program through the entire year-- would be $2,557,280. There were two alternatives for funding the proposed program. First, retaining motor vehicle privilege tax commission rather than depositing it into the Highway Fund. Second, removing the 22 percent cap. Senator O'Donnell noted a Senate subcommittee had requested the five-point plan and developed a plan for funding necessary staff, equipment, and organizational studies. But in discussions with the Administration the question of whether or not to split the department arose. It was apparent splitting the department would be costly. He expressed his preference for not splitting the department and funding the Senate's five-point plan, but he had received no direction from the Administration, and he did not want the Administration to try to get the five-point plan approved and then deal with splitting the department. He said that action did not seem to be congruent with the package he had promoted. He suggested the subcommittee reexamine this issue. Chairman Fettic acknowledged Senator O'Donnell's concerns. He asked for subcommittee discussion. Ms. Giunchigliani asked what the agency required to implement the five-point plan. Mr. Weller noted the Administration was committed to the five-point plan as presented by the department, with one exception. The Administration was concerned with the proposal to redirect funds away from the Department of Information Services in the second biennium of the plan. Chairman Fettic inquired whether the subcommittee could approve moving ahead with the five-point plan and later splitting the department. Ms. King explained the information she had presented represented the staffing portion of the five-point plan. Staffing would not be impacted by splitting the department since these staff members would remain in the Drivers License and Registration direct service areas. Chairman Fettic asked if fiscal staff and department staff were in agreement about the information provided by Ms. King. Ms. King indicated there was agreement. Chairman Fettic asked if the subcommittee wished to act on the staff recommendation regarding the five-point plan. Senator O'Donnell questioned how the plan would be funded. Ms. King reiterated the funding alternatives were retaining the motor vehicle privilege tax commission or removing the 22 percent cap. Either alternative would mean taking money from the Department of Transportation budget. A letter from the Department of Transportation indicated the shift of funding would reduce the road maintenance and construction which could be performed in future years. Mr. Marvel asked what the cost of staffing would be. Ms. King responded the cost would be $847,889 in the first year of the biennium and $2,557,280 in the second year, if fully implemented. Retaining the motor vehicle privilege tax commission would provide approximately $6.4 million in the first year of the biennium. Since the plan would not cost $6.4 million, the appropriation from the Highway Fund would decrease. Ms. Giunchigliani asked how much the commission was and how much the privilege tax revenue was. Ms. King said the $6.4 million represented the 6 percent commission. Total privilege tax revenue collected would, therefore, be approximately $100 million. Approximately $94 million would be returned to the counties. Senator O'Donnell stated the issue was if money was going to be redirected from the Highway Fund to the Department of Motor Vehicles budget, that money would have to be replaced in the Highway Fund some way or the Legislature would have to take responsibility for reduced funding for road construction and maintenance. Ms. Giunchigliani asked how the 6 percent commission was determined. Ms. King answered the rate was set by statute. Ms. Giunchigliani requested clarification of the county privilege taxes. Mr. Gosnell explained the motor vehicle privilege tax was derived from the value of the vehicle. The privilege tax revenue is returned to the county in which the vehicle is registered. He noted there is a base privilege tax and, in some counties, a supplemental privilege tax. Money is returned to the counties on a monthly basis and use of those funds is determined by local county ordinances. Ms. Giunchigliani noted a portion of the privilege tax was designated for the Distributive School Account. She asked how that portion was handled. Mr. Gosnell said the total distribution, less the 6 percent commission, was made to the counties each month. The 6 percent commission was deposited to the Highway Fund each month. Chairman Fettic asked again if the subcommittee wished to act on the proposed five-point plan to be funded either with the motor vehicle privilege tax commission or by removing the 22 percent cap. Mr. Weller noted these problems could be eliminated if the counties collected their own privilege tax and the department collected the $33 state registration fee. Chairman Fettic noted there was a great deal of confusion about this budget. He stated the budget would be heard again on Tuesday, May 9, 1995, after additional information was obtained. He requested a response from the Administration regarding whether or not it was still in favor of splitting the department, and if so, how it proposed funding the split. There being no further business, the meeting was adjourned at 8:37 a.m. RESPECTFULLY SUBMITTED: Dale Gray, Committee Secretary Joint Subcommittee on General Government Assembly Committee on Ways and Means and Senate Committee on Finance May 4, 1995 Page