MINUTES of the AUGUST 23, 2016 MEETING of the INTERIM FINANCE COMMITTEE Carson City, Nevada
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MINUTES OF THE AUGUST 23, 2016 MEETING OF THE INTERIM FINANCE COMMITTEE Carson City, Nevada Vice Chair Ben Kieckhefer served as Chair in the absence of Assemblyman Paul Anderson. He called a regular meeting of the Interim Finance Committee (IFC) to order at 9:14 a.m. on August 23, 2016, in Room 4100 of the Nevada Legislative Building, 401 South Carson Street, Carson City, Nevada. The meeting was videoconferenced to Room 4401 of the Grant Sawyer Office Building, 555 East Washington Avenue, Las Vegas, Nevada. COMMITTEE MEMBERS PRESENT: Senator Ben Kieckhefer, Vice Chair Senator Kelvin Atkinson for Senator Woodhouse Senator Pete Goicoechea Senator Michael Roberson Senator James Settelmeyer for Senator Lipparelli Senator Pat Spearman Assemblyman Derek Armstrong Assemblywoman Teresa Benitez-Thompson Assemblywoman Irene Bustamante Adams Assemblywoman Maggie Carlton Assemblywoman Jill Dickman Assemblyman Chris Edwards Assemblyman Randy Kirner Assemblyman James Ohrenschall for Assemblywoman Swank Assemblyman P.K. O’Neill for Assemblyman Hambrick Assemblyman James Oscarson Assemblyman Stephen Silberkraus Assemblyman Michael Sprinkle Assemblyman Tyrone Thompson Assemblywoman Robin Titus Assemblyman Jim Wheeler for Assemblyman Paul Anderson COMMITTEE MEMBERS EXCUSED: Senator Mark Lipparelli Senator David Parks Senator Joyce Woodhouse Assemblyman Paul Anderson, Chair Assemblyman John Hambrick Assemblywoman Heidi Swank LEGISLATIVE COUNSEL BUREAU STAFF PRESENT: Rick Combs, Director, Legislative Counsel Bureau Mark Krmpotic, Fiscal Analyst, Senate Cindy Jones, Fiscal Analyst, Assembly Alex Haartz, Deputy Fiscal Analyst Sarah Coffman, Deputy Fiscal Analyst Brenda Erdoes, Legislative Counsel Eileen O’Grady, Chief Deputy Legislative Counsel Cheryl Harvey, Fiscal Analysis Division Secretary Carla Ulrych, Fiscal Analysis Division Secretary EXHIBITS: (Exhibit A): Agenda (Exhibit B): Meeting Packet – Volume I (Exhibit C): Meeting Packet – Volume II (Exhibit D): Handout - Nevada Arts Council (Exhibit E): Stewart Indian School Scope Site Plan – Nevada Indian Commission A. ROLL CALL. Rick Combs, Director, Legislative Counsel Bureau and Secretary, Interim Finance Committee, called the roll; all members were present, except Senator Lipparelli, Senator Parks, Senator Woodhouse, Assemblyman Paul Anderson, Assemblyman Hambrick and Assemblywoman Swank, who were excused. Assemblywoman Benitez-Thompson and Assemblyman Sprinkle joined the meeting in progress. B. PUBLIC COMMENT. John Wagnon, Commissioner, Nevada Commission on Tourism (NCOT), spoke about Agenda Item C-68, Department of Tourism and Cultural Affairs (DTCA), Tourism Development Fund. He said tourism was the leading economic driver for the State of Nevada. He said 30 percent of Nevada’s workforce was employed by the tourism industry, and 13 percent of Nevada’s gross national product was driven by the travel industry. Mr. Wagnon said, in 2015 Nevada tourism increased 3 percent year-over-year, which was a remarkable number. He said 55 million travelers spent over $62 billion in the State of Nevada, which was an increase of $3 billion year-over-year. He said state tourism marketing played a key role in driving those year-over-year increases. Mr. Wagnon said that before he was a commissioner with NCOT, he was a commissioner with the California Travel and Tourism Commission (CTTC) for eight years. When he first began as a CTTC Commissioner, the tourism marketing budget for the State of California was $7 million, which was among the lowest in the nation. Mr. Wagnon said tourism in the State of California was on the decline at the time, which was extraordinary. He said California’s tourism marketing budget at the end of his commission term was $50 million, and there had been a dramatic rebound in the tourism economy and growth of tourism in the State of California. He said there used to be a theory that California would market itself due to the reputation of the state and the abundance of things to see and do; however, that was not the case. He said the State of California learned that tourism marketing was essential, because tourism was a highly competitive industry. As a result of California’s growth, its tourism 2 marketing budget increased from $50 million to $120 million, one of the largest budgets in the country. Mr. Wagnon said, by comparison, the NCOT budget was one-tenth of California’s budget. More relevantly, Nevada’s tourism marketing budget was also below that of Oregon, Utah and Arizona, Nevada’s three nearest competitors. He said it was no longer reasonable to think that a state’s reputation would market itself, it was important to have a competitive budget and build a brand for the state. Mr. Wagnon said for the past 12 years he had been responsible for marketing three Lake Tahoe ski resorts owned by Vail Resorts, the largest ski operator in the world. He said NCOT played a critical role in helping the state establish Lake Tahoe as one of the leading winter sports destinations in North America, competing with Colorado and Utah. He said both Colorado and Utah had larger state tourism marketing budgets than Nevada, and those budgets were highly focused on the sport of skiing, which was not the case in Nevada. Mr. Wagnon said, as a NCOT Commissioner and having been a tourism marketing executive for the past 30 years, he thought the Division of Tourism was doing an excellent job of leveraging its budget, maximizing impact, creating a brand and brand recognition for the State of Nevada, and generating 3 percent year-over-year growth as mentioned earlier. He reiterated that tourism was a highly competitive industry, and marketing was necessary for growth. Mr. Wagnon thought the state needed to continue to fund NCOT at the highest level possible, so Nevada could remain competitive, particularly compared to its closest competitors in the western United States. Ed Guthrie, Executive Director and Chief Executive Officer Emeritus, Opportunity Village, spoke regarding Agenda Item C-24, Department of Health and Human Services (DHHS), Developmental Disabilities Councils (DDC). Mr. Guthrie said he was in favor of Agenda Item C-24, with one concern. He said, if approved, there would be one Social Services Program Specialist position handling self-advocacy throughout Nevada. He said that position would be located in Northern Nevada; however, 72.5 percent of Nevada’s population was in Southern Nevada. Mr. Guthrie said he assumed that percentage also corresponded with the percentage of people with intellectual disabilities in Nevada. He said there were approximately 400 self-advocates in Southern Nevada, and he hoped that the Social Services Program Specialist would spend a significant amount of time in Southern Nevada. Cindy Carano, Vice Chair, NCOT, and Executive Director, Eldorado Resorts, thanked Mr. Wagnon for his earlier comments. She reminded the Committee that tourism dollars were three-eighths of 1 percent of the room tax dollars collected throughout the state. Ms. Carano said she had been with NCOT for more than eight years, and she thought the current leadership within the DTCA was outperforming its predecessors. She said marketing dollars had a return on investment of approximately $70 per $1 spent in tax dollars. She thought the money was being well spent and increasing the number of visitors to Nevada. Ms. Carano echoed Mr. Wagnon’s comments that Nevada had a lot of competition, both nationally and globally. She said the lodging tax funds would be used to preserve Nevada’s heritage. She said the wild west was still very marketable in 3 the global market; international visitors found Nevada’s heritage interesting, as do Nevadans. Ms. Carano said the funds were being spent prudently, and she was excited about the projects. She urged the Committee to keep the funds where they belonged, so they could be used to promote the State of Nevada. C. APPROVAL OF GIFTS, GRANTS, WORK PROGRAM REVISIONS AND POSITION CHANGES IN ACCORDANCE WITH CHAPTER 353 OF NRS. Mark Krmpotic, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), directed the Committee to the revised list for Agenda Item C. The Committee expressed interest in hearing testimony on the following items: Agenda Items C-28, Department of Health and Human Services, Division of Public and Behavioral Health; C-41 and C-42, Department of Employment, Training and Rehabilitation; C-59 and C-60, Department of Conservation and Natural Resources; C-68 through C-73, Department of Tourism and Cultural Affairs; and C-82 and C-83, Department of Administration, Director’s Office. Mr. Krmpotic noted that Agenda Items C-39, Department of Employment, Training and Rehabilitation; and C-66 and C-67, Department of Education, had been withdrawn. Vice Chair Kieckhefer requested further testimony on Agenda Items C-64 and C-65, Department of Education. Assemblyman Ohrenschall said, because the IFC was considering a work program that had items that tangentially related to medical marijuana and marijuana establishments, he wanted to advise the Committee that his wife was employed by, and lobbied on behalf of, medical marijuana dispensary owners. After consulting with Legislative Counsel, he chose to make the disclosure in an abundance of caution and pursuant to Standing Rule 23. Assemblyman Ohrenschall said he would vote on the item, because it would not impact his wife’s clients any differently than other dispensary owners in the state. ASSEMBLYWOMAN DICKMAN MOVED TO APPROVE THE REMAINING WORK PROGRAM REVISIONS AND POSITION RECLASSIFICATIONS