MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session June 22, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Thursday, June 22, 1995, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews GUEST LEGISLATORS PRESENT: Assemblywoman Deanna Braunlin, Assembly District No. 4 STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Sue Parkhurst, Committee Secretary OTHERS PRESENT: Bruce Glover, Chief, Drivers' License Division, Department of Motor Vehicles and Public Safety Randy C. Day, Commissioner, Office of Nevada Commissioner for Veteran Affairs, Department of Motor Vehicles and Public Safety John Sarb, Administrator, Division of Child and Family Services, Department of Human Resources Annette Swainston, Administrative Services Officer, Division of Child and Family Services, Department of Human Resources J. Scott Miller, Administrator, Division of Museums and History, Department of Museums, Library and Arts Roy W. Trenoweth, State Forester Firewarden, Division of Forestry, State Department of Conservation and Natural Resources Otis N. Turner, Assistant State Forester, Administration and Fire Management, Division of Forestry, State Department of Conservation and Natural Resources Michael Pitlock, Executive Director, Department of Taxation John P. Comeaux, Director, Department of Administration BILL DRAFT REQUEST 53-2138: Revises provisions governing allocation of money in unemployment compensation administration fund. Senator Raggio said this bill draft request (BDR) was a recommendation of the joint subcommittee, and a hearing on the bill is to be scheduled as soon as possible. SENATOR RAWSON MOVED TO INTRODUCE BDR 53-2138. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS COFFIN AND JACOBSEN WERE ABSENT FOR THE VOTE.) * * * * * Senator Raggio noted Senator Jacobsen has been excused to testify in a meeting of the Senate Committee on Judiciary and will arrive later. ASSEMBLY BILL 530: Revises provisions regarding renewal of drivers' licenses. Deanna Braunlin, Assembly District No. 4, Clark County, introduced Bruce Glover, Chief, Drivers' License Division, Department of Motor Vehicles and Public Safety (DMV&PS) and then testified in support of Assembly Bill (A.B.) 530. Mrs. Braunlin said A.B. 530 would allow Nevada residents to renew a drivers' license through the mail. She testified one of the most frequently asked questions she receives from her constituents is, What can you do about the lines at (DMV&PS)? She said this measure is an attempt to alleviate some of the long waits in line. She deferred to Mr. Glover for further explanation of A.B. 530. Mr. Glover told the committee that during the joint subcommittee hearing of the budget for the Drivers' License Division, the agency proposed two alternative methods for delivering better services to its customers. He said both of these services, renewal by mail and reciprocal licensing (Senate Bill (S.B.) 65), along with the division's five- point plan, would reduce lines in the DMV&PS field offices. SENATE BILL 65: Revises provisions governing examination of applicant for driver's license. Continuing, Mr. Glover said it is estimated approximately 60 percent of the people eligible would use the renewal by mail program for drivers' license customers. This would reduce the number of customers in the offices of the Drivers' License Division by approximately 500 people daily, he noted. Mr. Glover informed the committee the proposal would not translate into a reduction in staff. He explained that renewal by mail represents an opportunity to change the way in which transactions are processed, not the number of licenses renewed. The work load remains the same, necessitating the same level of staff, he said. The same number of renewal transactions will occur, only with less public contact. Referencing a breakdown of the cost for this program (Exhibit C), Mr. Glover explained eligibility would be limited to persons between the ages of 25 and 70 who have a good driving record (with three or less convictions in the last 4 years) and no medical restrictions on their license; additionally, by law commercial drivers' licenses cannot be renewed by mail. He said the fiscal note was based on these criteria. He pointed out that in Fiscal Year (FY) 1996, 202,910 people would be eligible for the program; based on the assumption 60 percent of those eligible would choose to renew by mail, an estimated 121,746 persons will participate in FY 1996 and 126,007 persons in FY 1997. He said the costs involved are primarily for printing of forms and the mailing costs. Continuing, Mr. Glover said to cover the cost of this program the agency has proposed that each person wishing to renew by mail will pay a fee of $1.50 to support the program. He suggested the amount of the fee is negligible in view of the value of the program to customers who presently must wait in long lines. In response to questioning from Senator Raggio, Mr. Glover said under the program in A.B. 530 a driver's license could be renewed by mail for a 4-year period; the renewal by mail can only be done once. He said A.B. 530 has the support of law enforcement. The appropriation of $30,700 from the state Highway Fund would be sufficient to fully implement the program, he affirmed. After closing the hearing on A.B. 530 Senator Raggio said the next bill on the agenda, S.B. 548, would be held pending the arrival of Senator Jacobsen. SENATE BILL 554: Repeals prospect of expiration of provisions requiring solicitation of certain information concerning veterans when issuing or renewing drivers' licenses. Randy Day, Commissioner, Office of Nevada Commissioner for Veteran Affairs, testified in support of S.B. 554. He said when legislation was passed during the 1993 Legislature providing for the solicitation of certain information concerning veterans when issuing or renewing drivers' licenses, for some reason a sunset clause was included in the bill. He stated the purpose of S.B. 554 is to remove this clause. Senator Raggio questioned Mr. Day as to the history and purpose of the initial legislation. Mr. Day indicated the legislation allowed two questions to be asked of individuals applying for or renewing their drivers' license: (1) Have you served in the armed forces? and (2) What years? The objective is to obtain not only total population numbers, but other demographic data, such as where the veteran population lives, age groups, and disabilities. S.B. 554 would allow the DMV&PS to continue receiving this information. Senator Raggio asked how the information has been used. Mr. Day replied he has gathered some data, but more is needed to provide credible information. Senator Raggio noted he was not asked the two questions the last time he renewed his drivers' license, although he acknowledged he might have renewed the license subsequent to the enactment of this legislation. Mr. Day said clerical staff are instructed to ask the two questions, but he has been informed of a number of occasions where the questions have not been asked. He said he has been urging the DMV&PS supervisors to ensure their staff asks the two questions. Senator Raggio inquired as to reason for the $4,600 appropriation from the state Highway Fund. Mr. Day said there was an appropriation in the initial legislation to revise the questionnaire, but he was unaware of a fiscal note attached to S.B. 554. Senator Raggio instructed staff to determine the reason for the $4,600 appropriation requested in S.B. 554. He said the bill may need to be amended if it is determined the $4,600 in funding is not needed. Senator O'Donnell asked if the data obtained by the DMV&PS in response to the two questions concerning veterans is public information. Mr. Day replied to his knowledge the responses are not public information. Senator Raggio said staff would be asked to determine whether the information is regarded as private or is available to the public before the committee processes the bill. ASSEMBLY BILL 218: Makes appropriation to and authorizes expenditures by division of child and family services of department of human resources for vehicles, computers and miscellaneous equipment. Senator Raggio stated this bill was amended by the Assembly. John Sarb, Administrator, Division of Child and Family Services, Department of Human Resources, testified in support of A.B. 218. He said the bill requests a one-shot appropriation to the division for the child welfare and licensing portions of the division in the amount of $434,484. Senator Raggio noted a larger appropriation was initially requested in this bill but was reduced by $195,000, eliminating 25 laptop computers and a new telephone system from the request. He asked how the requested funds will be allocated. Mr. Sarb stated the planned allocation of the funds as follows: 25 computers, $50,915; 25 pieces of software, $66,410; 15 printers, $4, 177, for a total of $121,502. The total cost for the 27 vehicles is $356,300, of which the General Fund portion would be $271,536. Further questioning by the senator elicited the fact there are federal matching funds available for the vehicles (Title IV-E funds in the amount of $47,672 and Title IV-A funds in the amount of $37,092). Senator Raggio requested explanation of the repayment provision in A.B. 218 . It was indicated by Annette Swainston, Administrative Services Officer, Division of Child and Family Services, Department of Human Resources, that the provision in the bill relates to Federal Register A-87, to which the agency must adhere with regard to depreciation of the vehicles. For the 3 years following the purchase of the vehicles the agency would be earning federal dollars which would be used to reimburse the General Fund as they are earned. Senator Raggio ascertained the situation to be as follows: The full amount of the appropriation is advanced to the agency, which qualifies for federal funding on a 4-year depreciation schedule and then reimburses the General Fund as the federal funds are earned. ASSEMBLY BILL 219: Makes appropriation to department of museums, library and arts for enhancement of computer system, improvement of various functions of state library and remodeling of basement in state library and transfers certain amounts between projects. J. Scott Miller, Administrator, Division of Museums and History, Department of Museums, Library and Arts, stated the bill being heard has been adopted with amendments. He noted that in this first reprint, there has been a slight modification in the means by which the requested objects and devices in the one-shot appropriation are paid for. He said the total amount of the appropriation, $560,218, is to be used principally for computer-related equipment and software and also includes office equipment, a compact shelving system and a new pickup truck. Continuing, Mr. Miller said the bill also recommends a General Fund appropriation of $171,968 for remodeling of the basement of the state library building, and that would be augmented by a transfer of funds in the amount of $144,032 from the library construction budget within the budget of the State Public Works Board. He said the last element of the bill is another transfer of $45,000 from the same library construction budget to a previously authorized project for paving of a parking lot adjacent to the library building. Mr. Miller referred the committee to their packets of information containing the itemized detail on A.B. 219 (Exhibit D). Senator Raggio asked if staff has reviewed the detail. Bob Guernsey, Principal Deputy Fiscal Analyst, said Brian M. Burke, Program Analyst, has worked extensively with the agency on this request, and the Department of Information Services (DIS) has also been consulted. He said adjustments have been made in the request, and some of the software requests have been reduced. Senator Raggio requested explanation of the transfer of the $45,000 from the construction project for the Nevada State Library to Capital Improvement Project (CIP) 91-L5 (parking for the capitol complex) and asked whether this was added by the Assembly Committee on Ways and Means. Mr. Miller replied yes. He said the purpose was to expedite the project to create the parking lot to the north of the new state library building, which has been somewhat in limbo for the past several years. He provided background information regarding the intended development of the parking facility. Senator Raggio asked if the $45,000 is funding remaining from the 1989 library project. Mr. Guernsey indicated this is correct. He said the initial project was to have included underground parking within the library building itself, but that component of the project was eliminated. He noted parking has been a problem for visitors to the state library. ASSEMBLY BILL 232: Makes appropriation to division of forestry of state department of conservation and natural resources for equipment and aircraft maintenance. Roy W. Trenoweth, State Forester Firewarden, Division of Forestry, State Department of Conservation and Natural Resources, spoke in support of A.B. 232. He said this one-shot appropriation was revised in the Assembly, and the agency accepts the revisions. The measure would provide for various items, including removal of underground fuel storage tanks, volunteer equipment, communications equipment, airplane repairs, miscellaneous honor camp items, and computer software. In response to questioning by Senator Raggio, Mr. Trenoweth said the amount of the appropriation in the most recent version of the bill is $2,375,947. He called attention to back-up material provided to the committee (Exhibit E) that includes information regarding the replacement and installation of new above-ground fuel storage tanks managed by the forestry division (pages 2-6). He said there are 26 tanks to be removed and they will be replaced with 18 new tanks. Continuing, Mr. Trenoweth explained that in the conservation camps the forestry division is converting to primarily diesel vehicles throughout the agency and can therefore manage with one tank, whereas now there are two tanks in most of the camps. They will all be removed. Senator Rhoads inquired whether the division can take advantage of the federal fund (Superfund) for underground storage tank removal. Mr. Trenoweth said there is an initial cost of $25,000 to participate in the fund. The senator asked if the division has any large spills to be cleaned up. Mr. Trenoweth replied the tanks have been examined and to his knowledge there are none leaking at this time. He said all of the underground fuel storage tanks must be removed by December 22, 1988 (sic). Senator Raggio asked by whose authority the storage tank removal is required. Mr. Trenoweth answered it is in the Federal Register under the authority of the Environmental Protection Agency (EPA). Regarding the second item in A.B. 232, Senator Raggio asked if the fire-resistant clothing, 27 self-containing breathing apparatuses and other items are primarily for volunteer firefighters. Mr. Trenoweth replied yes. He said under the Nevada Revised Statutes (NRS) 616.318, in the State Industrial Insurance System (SIIS) legislation enacted in 1993, volunteers are included in the safety plan and must be provided the same equipment as full-time firefighting personnel. Senator Raggio noted item 3 in the bill involves maintenance required on two of the division's airplanes. Mr. Trenoweth said the division is replacing the older radios, which are unserviceable at present, with a newer type of radio (9600 channel). Senator Raggio asked Mr. Trenoweth if he is aware that, according to a proposal heard by the committee recently, there will be four pilots. Mr. Trenoweth answered yes. It was ascertained the $12,000 pilot training cost in the bill relates to this proposal. Responding to questioning from Senator Raggio regarding proposed improvements to the communication system in A.B. 232, Mr. Trenoweth said at the dispatch center the dispatching is done through the telephone lines which run from the East Lake office through two different telephone companies. He said the communication system breaks down occasionally, requiring the shifting of the 24-dispatch operations to the Galena station because it is more centrally located for communication on the repeaters. He noted the system malfunctioned several weeks ago for a 2-day period. Utilizing the microwave system at Snow Valley Peak would be much more reliable, he stated. Senator Raggio inquired as to the proposed replacement of vehicles at a cost of $1.6 million. Mr. Trenoweth responded the division intends to have the camps convert their method of transportation from a 12-passenger bus to a crew cab and chassis, with multichannel radios. The vehicles will be dispersed evenly throughout the camp system. With the reduction in the number of crew supervisors, each camp will have vehicles that are in at least fair condition. There are eight other vehicles, which will be assigned to staff. Mr. Trenoweth said the agency intends to assess all of the vehicles to determine which of them should be replaced first. Senator Raggio asked how many new buses would be provided in A.B. 232 and what will happen to the old ones. Mr. Trenoweth replied there would be 24 new buses, and the old buses will be removed from the system. Senator Raggio ascertained the agency's itemizations and costs have been reviewed by staff. Senator Rawson requested assurance the aircraft are well maintained and that no shortcuts are taken. Mr. Trenoweth assured him this is being done and is the reason for the proposals in A.B. 232. He pointed out that Peter G. Morros, the director of the department that encompasses the Division of Forestry, is a pilot. Mr. Trenoweth said neither he nor Mr. Morros will allow an airplane or helicopter to fly without having had the proper, ongoing maintenance. Senator Jacobsen asked if the Division of Forestry has any equipment that will no longer be used within the agency but might be used elsewhere. Mr. Trenoweth called on his deputy to respond. Otis N. Turner, Assistant State Forester, Administration and Fire Management, Division of Forestry, State Department of Conservation and Natural Resources, told Senator Jacobsen a majority of the computers in service within the agency are federal excess property which remains the property of the federal government. At such time as they become unserviceable or are taken out of service, the division is required to return the equipment to the federal government through a disposal process that is controlled by the U.S. Forest Service. ASSEMBLY BILL 245: Makes appropriation to department of taxation for computer and office equipment. Michael Pitlock, Executive Director, Department of Taxation, spoke in support of A.B. 245. He said when this measure was heard for the first time in the Assembly, he testified before the ways and means committee that the original amount was inadequate to provide the department with the opportunity to improve its efficiency in the revenue collection process. Based on that testimony, the committee invited Mr. Pitlock to submit an additional proposal. Several different proposals were presented in the ensuing months, Mr. Pitlock stated, and in a cooperative effort with Assemblywoman Sandra Tiffany a "very reasonable" first step has been made toward bringing the Department of Taxation up to speed in terms of information processing. Mr. Pitlock referred the committee to a handout (Exhibit F) detailing the expenditures that would be made with the funds obtained from A.B. 245. The request includes approximately $350,000 for computer equipment, $25,000 for an automation study to be used by the department to develop its long-range equipment needs, and approximately $54,000 for office equipment that was contained in the original proposal. Continuing, Mr. Pitlock said by the end of the biennium the Department of Taxation will be administering and collecting almost $2 billion, and the department needs to be able to improve its efficiency with regard to these operations. He said every small improvement in efficiency results in increased revenues for the State of Nevada. Based on the amount of the appropriation in A.B. 245, he stated, just a minor improvement in efficiency would more than repay the amount of the appropriation to the state General Fund within the biennium. Mr. Pitlock stated that without the kind of appropriation in A.B. 245, the department will be unable to realize any improvement whatsoever in efficiency and will lose ground because of the tremendous growth in not only the number of taxpayers, but also in the complexity of the issues the agency addresses on a daily basis. Senator Raggio asked John P. Comeaux, Director, Department of Administration, if the administration endorses the augmented amount of the appropriation in A.B. 245. Mr. Comeaux replied yes. Noting Mr. Pitlock has been in charge of the Department of Taxation since the end of January 1995, Senator Raggio asked him if progress has been made in addressing the deficiencies in collections that existed at the time he assumed his current position. Mr. Pitlock responded the news is very good at this point in time, and collections have steadily increased since January. He stated that based on the latest figures provided by the Audit Division, if the level of collections realized in the first quarter is maintained, the department will more than exceed his previously stated goal of $20 million in collections. He added that with the closing of the agency's budgets, not including the 55 combined audits, he has observed significant improvement in the morale in the Audit Division. Mr. Pitlock said the audit personnel were very concerned as to how they would be able to administer a program with only 55 audits; now that the problem has been addressed they are anxious to return to what they do best, which is sales and use tax recoveries. At Senator Jacobsen's request, Senator O'Donnell explained how computer equipment wears out. SENATE BILL 548: Makes appropriation to Douglas County for repairs or replacement of well and appurtenant equipment at China Spring Youth Camp. Senator Jacobsen testified in support of S.B. 548. He said the Division of Water Resources has determined it is necessary to drill a new water well at the China Spring Youth Camp, primarily because the casing has been damaged by earthquakes. The division is concerned the water at the proposed new site for the well might not be potable because there have been problems with the three existing wells in this regard. Senator Jacobsen further explained the problems entailed in locating a viable well. He said heap leaching at a gold and silver mine, which is no longer operational, caused contamination of the water on the east side of U.S. Highway 395. Continuing, Senator Jacobsen said if it is found after drilling the new well the water is not potable, it will be necessary to install a filtration system estimated to cost more than $100,000. He voiced the opinion the $150,000 in the bill is adequate and recommended setting the funds aside and making them available through approval of the Interim Finance Committee (IFC). Senator Raggio said this measure will not be processed at this time, pending communications with the Assembly Committee on Ways and Means regarding a list of proposed measures to be considered by the money committees. Emphasizing the severity of the situation, Senator Jacobsen said the county commissioners have visited the site and analyzed the situation and have determined they must proceed one way or another to remedy the water situation. He said bottled water is being used for drinking, and the current well is producing only three gallons per minute and is deteriorating rapidly. ASSEMBLY BILL 218: Makes appropriation to and authorizes expenditures by division of child and family services of department of human resources for vehicles, computer and miscellaneous equipment. SENATOR RHOADS MOVED TO DO PASS A.B. 218. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 219: Makes appropriation to department of museums, library and arts for enhancement of computer system, improvement of various functions of state library and remodeling of basement in state library and transfers certain amounts between projects. SENATOR RHOADS MOVED TO DO PASS A.B. 219. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 232: Makes appropriation to division of forestry of state department of conservation and natural resources for equipment and aircraft maintenance. SENATOR RHOADS MOVED TO DO PASS A.B. 232. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 245: Makes appropriation to department of taxation for computer and office equipment. SENATOR RAWSON MOVED TO DO PASS A.B. 245. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 530: Revises provisions regarding renewal of drivers' licenses. SENATOR RAWSON MOVED TO DO PASS A.B. 530. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * SENATE BILL 198: Makes appropriation to department of prisons for replacement of various equipment. Senator Raggio called attention to Amendment No. 1165 to S.B. 198, which he noted changes the amount of the appropriation to $2,557,834. He said the bill will be referred to the secretary's desk with the previous recommendation of do pass as amended by Amendment No. 1165. Senator Raggio reminded the committee of the dinner to be held later for members of the Senate Committee on Finance and staff. He invited Mr. Comeaux to attend and also extended the invitation to Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration. There was discussion regarding legislation being held by the Assembly Committee on Ways and Means. At 9:03 a.m. the meeting was recessed until the call of the chair. RESPECTFULLY SUBMITTED: Sue Parkhurst, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance June 22, 1995 Page