MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-Second Session
May 22, 2003
The Committee on Ways and Meanswas called to order at 8:20 a.m., on Thursday, May 22, 2003. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairwoman
Mr. Walter Andonov
Mr. Bob Beers
Mrs. Vonne Chowning
Mrs. Dawn Gibbons
Mr. David Goldwater
Mr. Josh Griffin
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Ms. Kathy McClain
Mr. David Parks
COMMITTEE MEMBERS ABSENT:
Mr. Richard Perkins (excused)
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Susan Cherpeski, Committee Secretary
Linda Smith, Committee Secretary
Assembly Bill 548: Abolishes Commission on Substance Abuse Education, Prevention, Enforcement and Treatment within Department of Public Safety. (BDR 40-1343)
Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained that A.B. 548 was a result of budget closings and would eliminate the Commission on Substance Abuse Education, Prevention, Enforcement and Treatment, which had been part of the budget closings in both the Assembly and the Senate. He pointed out there was money under the Commission’s control through gifts and donations and that money would be transferred to the Department of Human Resources’ Gift Fund and the Department of Human Resources would then be in control of those funds.
Assemblyman Marvel asked if the Department of Public Safety budget would need to be reopened if A.B. 548 did not pass. Mr. Stevens said that would be unnecessary. If A.B. 548 did not pass, the Commission would still have statutory authority to operate, but there would not be any funding available.
Chairman Arberry asked if there were any additional questions or comments, there being none, he closed the hearing on A.B. 548.
Assembly Bill 549: Revises provisions relating to uses of forfeited property or proceeds of forfeited property. (BDR 14-1354)
Mr. Stevens explained that A.B. 549 was also a result of budget closings. In The Executive Budget, the multiagency task forces were going to be removed from the narcotics control budget. The Subcommittee on Public Safety had been in favor of preserving the task forces, there were Byrne Grant monies available but a state match was required. Forfeiture funds had been discovered as an alternative method to match those funds, and A.B. 549 would change the statutory language on the allowable use of forfeiture funds in order to use them as a match to preserve those multiagency task forces through the upcoming biennium. Mr. Stevens added that both the Assembly Committee on Ways and Means and the Senate Committee on Finance had closed the budget in a similar manner and A.B. 549 would make the statute consistent with the closing action.
Lucille Lusk, Nevada Concerned Citizens, spoke in opposition to A.B. 549. She disagreed with A.B. 549 as it would remove the prohibition on using money obtained from the proceeds of forfeitures for the ordinary operating expenses of an agency. She was concerned that the policy of allowing the proceeds from confiscated property to be used to fund an agency would create a situation where, because the agency was dependent upon those funds, the agency would seek ways to obtain more forfeitures, even when the forfeiture might be on the marginal edge, in order to maintain funding. Ms. Lusk requested that the Committee examine not only the fiscal impact of A.B. 549, but the policy of it as well.
Chairman Arberry asked if there were any further questions or comments. As there were none, he declared the hearing on A.B. 549 closed.
Senate Bill 456: Revises various provisions of Uniform Athletes’ Agents Act. (BDR 34-153)
Renee Parker, Chief Deputy Secretary of State, Office of the Secretary of State, presented S.B. 456 and said the bill would make some changes to the Uniform Athletes’ Agents Act to provide for due process for hearing procedures and administrative procedures. She pointed out that the Office of the Secretary of State had authority under the Act, which had been passed in the 2001 Legislative Session, to revoke or suspend a license that was issued; however, there had been no hearing procedure established. Ms. Parker indicated that S.B. 456 had been written to mirror the procedures in the Uniform Securities Act.
Ms. Parker commented that S.B. 456 had passed the Senate and the Assembly Committee on Education, there was no fiscal impact, and she was unsure as to why the bill had been brought before the Assembly Committee on Ways and Means. There had not been any fee changes, the maximum fine had remained at $25,000, and violations would still be gross misdemeanors.
Assemblywoman Giunchigliani said the issue was the expansion into investigations and modeling the bill after the Uniform Securities Act had provided authority to the Secretary of State that had not been anticipated in 2001. Ms. Giunchigliani opined that the Secretary of State should not have that investigatory power.
Ms. Parker acknowledged her concern and said the legislation had been modeled after the Uniform Securities Act because the Secretary of State had been given the authority to suspend or revoke a license, but not to investigate, and there had been no procedures for suspending or revoking a license or issuing a subpoena. She pointed out that had not allowed for due process.
Ms. Giunchigliani questioned whether S.B. 456 would allow the Secretary of State to go out of state to conduct investigations. Ms. Parker said she did not believe that had been included in the bill. Ms. Giunchigliani pointed out that Section B allowed the Secretary of State to “conduct such other investigations as he finds necessary.” She suggested that amendments could be made to remove the possibility of out-of-state investigations.
Ms. Parker agreed and added that the intent had been to establish procedures for a hearing to allow for due process. She said language had been added to allow for censure as well as suspension and revocation as in certain circumstances there might be a violation of the Act that would not necessarily merit suspending or revoking the license and the lesser punishment of censuring would be more appropriate.
Ms. Giunchigliani asked how many problems there had been. Ms. Parker indicated that there were only 12 licensees currently and there had not been any problems to date.
As there were no other questions or comments, Chairman Arberry declared the hearing on S.B. 456 closed. He indicated that the Committee had a BDR to consider.
ASSEMBLYWOMAN LESLIE MOVED FOR COMMITTEE INTRODUCTION OF BDR 40-1357.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
MOTION CARRIED. (Mr. Andonov, Mrs. Gibbons, Mr. Goldwater, Mr. Griffin, Mr. Parks, and Mr. Perkins were not present for the vote.)
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Chairman Arberry called a brief recess at 8:32 a.m.
The meeting was reconvened at 9:07 a.m. Chairman Arberry indicated that the Committee would consider a few bills, beginning with A.B. 195.
Assembly Bill 195: Makes appropriation for planning and construction of ports of entry on certain highways. (BDR S‑83)
Mr. Stevens explained that A.B. 195 related to ports of entry and did have a substantial appropriation. There were a few proposed amendments (Exhibit C) which would remove the fiscal note. One of the amendments would authorize the Department of Transportation to work with other state agencies to formulate a plan to jointly enforce the laws of the state and the inspection of vehicles coming into the state. Essentially, it would alter A.B. 195 in such a way that it would authorize a study rather than an appropriation. The results of that study would then be submitted by September 1, 2005. Mr. Stevens suggested that the date be changed so that the results would be submitted before the next legislative session.
Mr. Stevens referred to Section 2 of the bill and said that the authorizing language in Section 2(a) and 2(c) was unnecessary as the tasks outlined were already being done or could be done. Section 2(b) would authorize the potential construction and operation of ports of entry, but as the purpose of the amendments was to remove the fiscal note and ensure the issue would be studied, it was possible that the Committee might wish to remove that language as well. Mr. Stevens indicated that the Committee would need to decide how to address those concerns.
Ms. Giunchigliani recommended that Section 2 be deleted, the report date be changed from September 1, 2005, to December 1, 2004, and the report be submitted to the Governor and the Director of the Legislative Counsel Bureau. The Committee appeared to be in agreement.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS A.B. 195 WITH AMENDMENTS AS DISCUSSED.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
MOTION CARRIED. (Mrs. Chowning, Mrs. Gibbons, Mr. Goldwater, and Mr. Perkins were not present for the vote.)
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Assembly Bill 548: Abolishes Commission on Substance Abuse Education, Prevention, Enforcement and Treatment within Department of Public Safety. (BDR 40-1343)
ASSEMBLYMAN MARVEL MOVED TO DO PASS A.B. 548.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
MOTION CARRIED. (Mrs. Chowning, Mrs. Gibbons, Mr. Goldwater, and Mr. Perkins were not present for the vote.)
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Assembly Bill 549: Revises provisions relating to uses of forfeited property or proceeds of forfeited property. (BDR 14-1354)
Mr. Stevens noted that the Committee had heard the bill earlier in the day, and he pointed out that there had been concerns regarding the language of the bill.
Chairman Arberry commented that Ms. Lusk had a valid point regarding the policy change and he asked Mr. Stevens if there was a way to ensure that the agency would not seek out additional forfeitures to balance the budget. Mr. Stevens opined that the agency would not be likely to do that, although the Budget Office or the Fiscal Analysis Division might attempt to find ways to use forfeiture funds to offset General Fund monies. He said the Committee could choose to alter the language of the bill, but the bill was based on the budget closing and the intent was to use forfeiture dollars to match federal funds in order to maintain those narcotic task forces through the upcoming biennium.
Mr. Beers said it seemed as though A.B. 549 might be “setting the agency loose to go hunting for their next paycheck.”
Mr. Stevens said he understood the concerns and clarified that the money that would be used for the match was already on hand. It was money that had been collected in forfeitures and had been banked. The amount the agency would receive would not be based on what the agency could generate in terms of forfeitures. He reiterated that the money used to match the federal grant had already been realized and would be reserved for that use during the upcoming biennium.
ASSEMBLYMAN MARVEL MOVED TO DO PASS A.B. 549.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
MOTION CARRIED WITH MR. GRIFFIN VOTING NO. (Mrs. Chowning, Mrs. Gibbons, Mr. Goldwater, and Mr. Perkins were not present for the vote.)
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Senate Bill 416: Authorizes issuance of bonds and other securities for completion of Fish Hatchery Refurbishment Project. (BDR S-1212)
Mr. Stevens quickly reviewed the bill and noted that Mr. Marvel had expressed some concerns regarding the reasoning behind using General Obligation Bonds. Mr. Stevens explained that staff had contacted the Treasurer’s Office and the Treasurer’s Office had indicated that General Obligation Bonds were being used because a better interest rate could be obtained compared to revenue bonds. The funding source to pay the principal and interest payments were trout stamp dollars. He reemphasized that General Obligation Bonds were used, but were not redeemed with the $0.16 property tax. Mr. Marvel indicated that had allayed his concerns.
ASSEMBLYMAN MARVEL MOVED TO DO PASS S.B. 416.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
MOTION CARRIED. (Mrs. Chowning, Mrs. Gibbons, and Mr. Perkins were not present for the vote.)
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Assembly Bill 490 (1st Reprint): Revises provisions governing mortgage brokers and mortgage agents. (BDR 54‑998)
Assemblyman Goldwater indicated he was ready to present A.B. 490 to the Committee. He thanked Doug Walther, Chief of the Office of Business Finance and Planning for the Department of Business and Industry; Sydney Wickliffe, Director of the Department of Business and Industry; and Marybel Batjer, Chief of Staff for the Governor, for their hard work in addressing a difficult area of commerce in the state of Nevada.
Mr. Goldwater proposed an amendment to A.B. 490 and indicated that the amendment, along with supporting budget documents, had been given to the Committee (Exhibit D), and Mr. Goldwater hoped that documentation would be sufficient to pass the bill and the information could be expanded and given to the Interim Finance Committee. He indicated that the amendment would accomplish several things:
Mr. Goldwater concluded by saying that A.B. 490 would create a division, license the agents, and provide for education. The Legislature would be able to monitor the agency, and the industry was in support of oversight. He referred to the fiscal impact and explained that it would be a self-funded agency. He opined that creating a division and increasing the oversight would “clean up” the industry. Mr. Goldwater emphasized that the amendment did not change the fees that were included in the bill and had been discussed at a previous hearing, and he indicated that Ms. Wickliffe was present to answer any questions regarding the fees.
Assemblywoman Chowning commented that she was a real estate agent and sold real estate to people who then needed mortgages, and she had observed many abuses of the system. She applauded Mr. Goldwater’s efforts and said changes were needed. She asked if A.B. 490 would address situations where out-of-state lenders would purchase billboards that advertised amazing deals, but the customer would discover that the deal was not as advertised. It was a classic example of the “bait and switch,” and Mrs. Chowning wondered whether the legislation would address those problems.
Mr. Goldwater said that much of the abuse came through the net branch concept, which was what Mrs. Chowning had alluded to with the out-of-state lenders, and the amendment to A.B. 490 did address that problem. He added that the amendment also established a Commissioner of Mortgage Brokers whose job would be to regulate the industry, and the Commissioner would be able to identify problem areas and work to find a solution.
Chairman Arberry remarked that he had received an e-mail regarding the fees in A.B. 490 and there had been a concern regarding balancing the level of fees. In response, Mr. Goldwater said there had been questions regarding the fees of exempt mortgage companies and regulated mortgage companies. He pointed out that exempt companies did not require the same level of regulation that non-exempt companies required, and as the regulatory structure of the exempt companies had not changed, it had not been deemed necessary to raise their fees. Mr. Goldwater acknowledged the disparity in the fees and conceded that the Committee could choose to raise the fees of the exempt mortgage companies to make them commensurate with the non-exempt companies but that was a policy decision.
Ms. Wickliffe addressed the Committee and clarified that the amendment would not create a new department; rather, it would create a new agency within the Department of Business and Industry. She commended Mr. Goldwater for his hard work and said he had asked for the Department’s assistance in developing amendments to A.B. 490 and ensuring that it would be fiscally conservative and fiscally sound. She thanked Mr. Walther and Bill Maier, Administrative Services Officer for the Department of Business and Industry, for their hard work as well.
Chairman Arberry said that there had been concerns regarding the collection of fees, and the way the bill had been written seemed to indicate that a portion of the fees would be transferred to the General Fund and a portion of the fees would be transferred to another account to deal with fraud and other issues, but there did not seem to be a mechanism for transferring a portion of the collections to a fund to support the Board or the Division.
Ms. Wickliffe explained that there were two funds or budget accounts for the new agency. One account would be the investigative fund, which would be for the investigation of new applicants and would be funded through application fee monies. The other account would be the operating account for the agency, which would be funded through the collection of the regular annual renewal fees and other customary fees that an ongoing mortgage company paid.
Ms. Wickliffe emphasized that the agency would be entirely self-funded, and she indicated that a similar process was occurring within the Division of Financial Institutions. The new agency would be supported by the industry that it regulated, whether those individuals were applying to get into the industry or were currently working in the industry, and it would not require any General Fund monies.
Chairman Arberry requested that Ms. Wickliffe submit that information in writing to the Fiscal Analysis Division of the Legislative Counsel Bureau. Ms. Wickliffe indicated that the fiscal information provided (Exhibit D) showed that there were funds being transferred from the Division of Financial Institutions for the start-up of the new agency. She pointed out that there would be a transition period, but during that time, the money from the fees would be accumulating and available for use when necessary.
Mr. Goldwater interjected that the requested information had been provided to the Committee, and he added that there had been a discussion about allowing the new agency to refine its budget and then bring that budget to the Interim Finance Committee for final approval.
Chairman Arberry asked if there were any other questions or comments. There being none, he declared the hearing on A.B. 490 closed. The meeting was adjourned at 9:32 a.m.
RESPECTFULLY SUBMITTED:
Susan Cherpeski
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: