MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-Second Session
May 31, 2003
The Committee on Ways and Meanswas called to order at 3:49 p.m., on Saturday, May 31, 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. Bob Beers
Mrs. Vonne Chowning
Mrs. Dawn Gibbons
Mr. David Goldwater
Mr. Josh Griffin
Ms. Sheila Leslie
Mr. John Marvel
Ms. Kathy McClain
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
Mr. Walter Andonov (excused)
Mr. Lynn Hettrick (excused)
GUEST LEGISLATORS PRESENT:
Senator Dean Rhoads, Northern Nevada Senatorial District
Assemblyman John Carpenter, District No. 33
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Susan Cherpeski, Committee Secretary
Anne Bowen, Committee Secretary
Chairman Arberry adjourned the first meeting of the day, which had been held at 8:00 a.m., and called the second meeting to order.
Assembly Bill 551: Requires certain local governments to pay periodic assessments for portion of costs of operating Commission on Ethics. (BDR 23-1368)
Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained that A.B. 551 had been introduced earlier in the day and was a result of budget closings upon which both the Senate Committee on Finance and the Assembly Committee on Ways and Means had agreed. The bill involved the funding of the Commission on Ethics, and he reminded the Committee that the budget closing decision had allocated costs between local and state government according to the workload of the Commission on Ethics. Based on the previous two years, the Commission’s workload had been 65 percent local government and 35 percent state government; thus, the Committee had voted to close the budget by providing 35 percent of the budget in General Fund appropriations and 65 percent of the budget as authorized revenue from local governments.
Mr. Stevens indicated that the assessments would be based on population and the county must have a population greater than 10,000 to be assessed. Within those counties that had a population in excess of 10,000, each city within the county that had a population in excess of 10,000 would be assessed a pro rata share based on population.
Mr. Stevens added that, in the future, the total amount of money derived from assessments paid pursuant to A.B. 551 must be determined by the Legislature and included in the budget approved by the Legislature. The terms of the assessments would be reviewed each legislative session, and upon review the percentage paid by various entities might change. On or before July 1 of each year, the Executive Director of the Commission on Ethics would bill each of the local entities that would be assessed, and those amounts would be due semi-annually on August 1 and February 1 of each year for deposit in the account of the Commission on Ethics.
Mr. Stevens directed the Committee’s attention to subsection 4 on page 3, which contained a provision that, if a local entity did not pay after the Executive Director of the Commission on Ethics had made reasonable efforts to collect, the Commission on Ethics could petition the Director of the Department of Taxation who could then deduct the amount owed from the entity’s share of the sales tax distribution.
Mary Henderson, Nevada League of Cities, spoke in opposition to A.B. 551 as she felt it was an unfunded mandate. She pointed out that the local governments had no control over the complaints that went to the Commission on Ethics and many were of a frivolous nature. She did not think the local governments should fund the Commission on Ethics if the local governments had no part in deciding the business of the Commission on Ethics.
Ms. Henderson said the tone of the bill was negative, and she was not comfortable with the provisions placed in the bill to force the local governments to pay. The bill made budget planning difficult as the amount owed could change from year to year and was based on population of the county rather than the actual number of complaints originating from the county. She urged the Committee to oppose A.B. 551.
Bob Ostrovsky, City of Las Vegas, voiced opposition to A.B. 551. He said he was opposed to unfunded mandates, which was what A.B. 551 appeared to be. He pointed out that given the short amount of notice he had received in regard to the bill, he had been unable to gather sufficient data about the cost to the City of Las Vegas.
Mr. Ostrovsky commented that A.B. 551 was another bill in a continuing trend of placing pressure on local governments to ease the state’s financial situation, and he did not feel that was fair. He noted that the cost would not be very great, but it set a precedent that would allow the state to charge local governments for services that the state provided. The Commission on Ethics’ budget was approved by the Legislature, the local governments did not have any control over the budget, and it seemed that the Commission could request more funding from the Legislature, which would then pass that cost on to the counties.
Mr. Ostrovsky opined that it was unfair to charge only those local governments that met the population requirements as smaller counties used the services of the Commission on Ethics as well. He suggested that if the Legislature was looking for an alternative method of funding, then the Commission on Ethics should become a fee-based agency. Thus, those who used the Commission would pay for it, and the Commission would have to present a fee schedule, and a procedure for charging the fees, to the Legislature for approval.
Mr. Ostrovsky concluded by discussing redundancies in government and informed the Committee that the City of Las Vegas had eliminated its own Commission on Ethics. He opined that the state was the appropriate entity to run the Ethics Commission as that would ensure all local government officials and employees would be treated the same and issues would not be adjudicated twice. Mr. Ostrovsky urged the Committee to reject A.B. 551, particularly as it had been introduced so near the end of the legislative session.
Kimberly McDonald, MPA, Special Projects Analyst and Lobbyist, City of North Las Vegas, testified in opposition to A.B. 551. She agreed with earlier comments and voiced her concern regarding the unfunded mandate.
Nicole Lamboley, City of Reno, said as the bill had only been presented earlier in the day, there was not a formal council position; however, the council had a policy of opposing any unfunded mandates. She was opposed to A.B. 551 for that reason, and she pointed out that there were several individuals in Reno who filed frivolous claims with the Commission on Ethics, which increased the workload, but was not the result of action by the local government.
Assemblywoman Giunchigliani said she appreciated the comments from those representing the local governments and indicated that there had been much debate in regard to the funding of the Commission on Ethics. She remarked that there would not be any need for a Commission on Ethics if individuals did not break the ethics laws.
Neena Laxalt, City of Sparks, said she was opposed to A.B. 551 and was in agreement with earlier testimony.
As there were no further questions or comments, Chairman Arberry declared the hearing on A.B. 551 closed and opened the hearing on S.B. 3.
Senate Bill 3 (1st Reprint): Makes various changes to off-track pari-mutuel wagering. (BDR 41-41)
Senator Dean Rhoads, Northern Nevada Senatorial District, presented S.B. 3, which concerned horse and mule racing. He said that the Elko County Fair Board had sponsored the largest horse races in the state for approximately 75 years, with 5 days of horse racing. One of the problems Elko faced was obtaining enough prize money for the winning horses. If the purse was not sufficient, the quality of the horses entered in the races was not as good, and the overall event suffered, but S.B. 3 would allow for a larger purse.
Senator Rhoads said that S.B. 3 would allow money from off-track pari-mutuel wagering to be used in certain rural counties that hold horse or mule races. The fiscal note for the bill was $216,000; however, the bill had been amended by the Nevada Pari-Mutuel Association to allow betting to cross state lines, which would likely generate far more than the $216,000 for which the rural counties would be eligible. Senator Rhoads urged the Committee’s support of S.B. 3.
Vice Chairwoman Giunchigliani questioned the regulation of off-track pari-mutuel wagering, and Senator Rhoads indicated that Dennis Neilander, Chairman of the Gaming Control Board, would be speaking later and would answer her questions at that point.
Assemblyman John Carpenter, District No. 33, said he supported S.B. 3 and explained that the bill would increase the amounts in the purses for the local races and would improve the quality of the horses brought to race. As the overall races improved, more patrons would attend and more money would be raised, which would benefit the rural counties. He pointed out that those individuals who came for the horse and mule races would boost local economies as they would spend money at other community establishments, such as restaurants and hotels. Mr. Carpenter said S.B. 3 was a good bill that would help maintain the “western flavor” in the rural counties. He urged the Committee to support the bill.
Assemblyman Marvel asked if the bill would promote races in communities such as Ely in White Pine County. Senator Rhoads said several communities had expressed interest in holding horse or mule races. Mr. Marvel confirmed that S.B. 3 would expand the pari-mutuel “take” throughout the state of Nevada, and Senator Rhoads agreed.
Vice Chairwoman Giunchigliani asked if Section 2 of the bill was the language offered by the Nevada Pari-Mutuel Association.
Alfredo Alonso, Lionel Sawyer & Collins, representing the Nevada Pari-Mutuel Association, indicated that Section 2 contained the amendments from the Association. He explained that several years earlier, the Legislature had legalized pari-mutuel wagering across state lines; however, there had been federal restrictions at that time. Since then, those restrictions had been lifted, and Section 2 merely reflected existing federal law. S.B. 3 would allow the Gaming Control Board to establish safeguards with respect to pari-mutuel wagering as well as allow for incentives and other marketing ideas to be adopted if deemed appropriate. Mr. Alonso opined that it was a “win-win situation” for both the state and the rural communities and he urged passage of the bill.
Vice Chairwoman Giunchigliani questioned the fiscal note and asked if the cost was in lost gaming fee revenue. Mr. Alonso said the fiscal note was $216,000, and then the counties would receive 5 percent of the new revenue. Vice Chairwoman Giunchigliani requested clarification of the 5 percent. Mr. Alonso indicated that Section 1, subsection 2(d), of the bill specified that 5 percent of any amount that exceeded $5,036,938 would be distributed to the rural counties for their racing purses.
Assemblyman Beers referred to lines 41 through 45 on page 3 and said, if properly implemented, those provisions would increase the state’s tax revenue. Mr. Alonso agreed and said that was the goal of the legislation.
Dennis Neilander, Chairman, State Gaming Control Board, said the fiscal note attached to the bill concerned Section 1, subsection 2(c), as subsection 2(d) had been written after the fiscal note had been determined. Mr. Neilander noted that the added language would hopefully result in a “handle” increase, which should allow the state to recognize increased revenue. Additionally, the counties would receive 5 percent of any increase.
Mr. Neilander explained that $5,036,938 was the actual amount of taxes the state received from off-track pari-mutuel wagering in FY2002. The bill was written so that the counties would receive 5 percent of any increase in the amount of taxes received, but if that amount did not increase, the counties would not receive money. He noted that the $5,036,938 was the baseline and would remain the baseline in future biennia unless the Legislature chose to change that amount.
Mr. Marvel said it appeared that the state would not be losing money as the counties would only receive a percentage of the increase. Mr. Neilander said that was correct under the language in subsection 2(d).
Vice Chairwoman Giunchigliani questioned subsection 2(c) and commented that the state could gain monies in subsection 2(d) but would have to expend monies in subsection 2(c). Mr. Neilander indicated that was correct and said that subsection 2(d) would not go into effect until the next year as the mule races were held in early June and the Elko horse races were held in September. Thus, the funds would not be available until the following year. He added that the original fiscal note still applied to subsection 2(c).
Mr. Neilander spoke in reference to the amendment that would allow the Gaming Control Board to adopt regulations with respect to interstate pari-mutuel wagering and said that the Nevada Gaming Commission regulations prohibited Internet wagering. He emphasized that the gambling across state lines was not Internet gambling, but rather a matter of placing bets by telephone, which was allowed under the federal Interstate Horseracing Act. Mr. Neilander stated that the final section of the bill referenced rebates, but the amounts paid in rebates could not be deducted from the gross revenue and were not to be used as a tax deduction.
Assemblywoman Leslie asked why language had not been added to clarify that the wagering was to take place by telephone and not on the Internet. Mr. Neilander indicated that there were other ways of placing wagers that might use cable or other types of communication that would be permissible under federal law. Ms. Leslie commented that if federal law changed to allow Internet wagering, the statute would not have to be changed. Mr. Neilander agreed.
Vice Chairwoman Giunchigliani referred to line 25 on page 5, which said “ . . . from gross revenue may not be exempt.” She asked if that left the possibility of there being an exemption. Mr. Neilander said he understood that to mean there was not an exemption.
Stephanie Licht, Elko County Commission, voiced support of S.B. 3 and urged the Committee to pass the bill.
Jim Avance, citizen, spoke in favor of S.B. 3 and said he had been attending the horse races in Elko for 15 years. He said he met many individuals from other states who were attending the races, and those individuals rented hotel rooms and spent money in the casinos, which was a boon to the economy. Mr. Avance described many of the events that took place at the Elko County Fair, which included the horse races, and he urged the Committee’s support of Senate Bill 3.
Vice Chairwoman Giunchigliani thanked those who had testified and indicated the hearing on S.B. 3 was closed. She opened the hearing on S.B. 49.
Senate Bill 49: Creates Statewide Program for Suicide Prevention within Department of Human Resources. (BDR 40-288)
Assemblywoman Leslie presented S.B. 49, which was a result of an interim study regarding suicide. The bill would create a suicide prevention program within the Department of Human Resources. The program would have two staff positions, a coordinator and a trainer. Ms. Leslie pointed out that the Joint Subcommittee on Human Resources had funded the two positions in the budget closing, and both the Senate Committee on Finance and the Assembly Committee on Ways and Means had agreed with the terms of the budget closing. She offered to answer any questions.
Vice Chairwoman Giunchigliani emphasized that the positions were included in the budget as well as in S.B. 49. Ms. Leslie indicated that was correct and said she had asked the Department of Human Resources what would happen if the Committee chose not to process the bill. The Department’s response had been that if the bill was not processed, the two positions would be hired on a contract basis and would not be considered as state positions.
Assemblyman Parks said he had been one of the members of the legislative committee that had studied suicide prevention, and he strongly endorsed S.B. 49.
Bobbie Gang, Nevada Women’s Lobby and National Association of Social Workers, said both organizations were in support of S.B. 49. She commented that while the program had already been funded in the budget, she believed that passage of S.B. 49 was important to define the positions and the responsibilities.
As there were no further questions or comments, Chairman Arberry closed the hearing on S.B. 49 and opened the hearing on S.B. 210.
Senate Bill 210 (1st Reprint): Revises provisions governing regional training programs for professional development of teachers and administrators. (BDR 34-636)
Ms. Giunchigliani indicated that she had not proposed S.B. 210; however, she would be willing to explain the provisions of the bill. She said the bill was the implementation portion of consolidating the Nevada Early Literacy Program and the Regional Professional Development Centers, which had been done during the K-12 budgeting process. She noted that there had been an amendment adding a member from the Nevada State Education Association.
Ms. Giunchigliani commented that if the Committee chose to process the bill, which she recommended as the consolidation saved the state approximately $6 million, a change would need to be made in Section 2 replacing “executive director” with “president.” She pointed out that there had been an amendment to the bill that would provide per diem allowances, and those allowances were not included in the budget.
Chairman Arberry asked if there were any further questions or comments. There being none, he declared the hearing on S.B. 210 closed.
Assembly Bill 460 (1st Reprint): Makes various changes regarding manufacture, sale and use of tobacco products. (BDR 15-1283)
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS A.B. 460 WITH THE FOLLOWING AMENDMENTS:
· DELETE SECTIONS 1O THROUGH 37 AND 59 THROUGH 79.
· CORRECT PAGE 18, LINE 11.
· DELETE “CREATE AND” IN SECTION 53, ON PAGE 18, LINE 22.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
Mr. Parks asked if there were any changes to Section 80. Ms. Giunchigliani indicated there had been no changes.
MOTION CARRIED. (Mr. Andonov, Mrs. Chowning, and Mr. Hettrick were not present for the vote.)
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The meeting was recessed at 4:27 p.m., and due to time constraints, was not reconvened.
RESPECTFULLY SUBMITTED:
Susan Cherpeski
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: