MINUTES OF THE ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session February 2, 1995 The Committee on Government Affairs was called to order at 8:00 a.m., on Thursday, February 2, 1995, Chairman Lambert presiding in Room 330 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Douglas A. Bache, Chairman Mrs. Joan A. Lambert, Chairman Mrs. Deanna Braunlin, Vice Chairman Mr. P.M. Roy Neighbors, Vice Chairman Mr. Max Bennett Mrs. Marcia de Braga Mr. Pete Ernaut Mrs. Vivian L. Freeman Mr. William Z. (Bill) Harrington Ms. Saundra (Sandi) Krenzer Mr. Dennis Nolan Mrs. Gene Wines Segerblom Mrs. Patricia A. Tripple Mr. Wendell P. Williams COMMITTEE MEMBERS ABSENT: None GUEST LEGISLATORS PRESENT: Assemblyman John Marvel, District 34 STAFF MEMBERS PRESENT: Denice Miller, Senior Research Analyst OTHERS PRESENT: Mr. Bob Gagnier, Executive Director, State of Nevada Employees Association; Mr. Jim Spencer, Deputy Attorney General, State of Nevada Department of Personnel; Ms. Barbara Willis, Director, State of Nevada Department of Personnel; Mr. Bob Bayer, Director, Department of Prisons; Mr. Brian Hutchins, Chief Deputy Attorney General, Department of Transportation and Department of Motor Vehicles and Public Safety; Mr. Ray Sparks, Acting Deputy Director, Department of Motor Vehicles and Public Safety (see also Exhibit B attached hereto). ASSEMBLY BILL NO. 46 - Makes various changes to provisions governing state personnel system. Mr. Bob Gagnier, Executive Director, State of Nevada Employees Association (hereinafter referred to as the Association), testified by reading from prepared text (Exhibit C). He advised one purpose of A.B. 46 was to increase the number of members of the Personnel Commission and to change the method by which those members were selected. He pointed out, under A.B. 46, the Governor, the Lieutenant Governor, the Secretary of State and the Attorney General, each, would appoint one member of the general public to the Personnel Commission and the remaining three members would be classified state employees elected by their peers. He suggested the composition of the Personnel Commission should be changed to include classified state employees in order to prevent decisions of the Personnel Commission from being made solely by management. Mr. Gagnier said another purpose of A.B. 46 was to replace the present Employee- Management Committee with professional arbitrators. He said, although the Employee-Management Committee had worked well for many years in resolving employees' grievances, over the past six years a numbers of problems had arisen, such as: employee positions on the committee being filled by representatives of management; lack of consistency in the committee's rulings; and tied votes of the committee. Mr. Jim Spencer, Deputy Attorney General, State of Nevada Department of Personnel, testified in opposition to A.B. 46. Mr. Spencer advised matters pertaining to discipline of an employee required procedural due process. He said a pre-disciplinary procedure must be followed to ensure an employee understood the charges against him and allow the employee an opportunity to dissuade his employer from pursuing disciplinary action. He stated the Administrative Code provided an employee must receive at least 10 working days notice before discipline could be imposed against him. He contended if a 30 day limit "...on the imposition of the effective date of discipline..." was imposed (as proposed by A.B. 46), an employer would, in effect, have two weeks in which to make a decision as to whether or not discipline should be imposed on an employee. He suggested this provision would work to the disadvantage of an employee, if his employer had not had an opportunity to fully investigate, because at the end of the two week period, the employer would be forced to impose discipline or lose the opportunity to do so and would, therefore, file a notice of discipline against the employee in order to meet the proposed 30 day deadline. Mr. Spencer stated the proposed 30 day deadline would also work to the disadvantage of the employer because, in the case of an ongoing investigation in which more than one act which required discipline was discovered, the employer was faced with filing serial disciplinary actions as the various acts were discovered. He cited as an example an ongoing disciplinary investigation currently being conducted in Las Vegas. He declared the Department of Personnel was opposed to the proposed 30 day limit. Assemblyman Ernaut commented he interpreted A.B. 46 to say discipline must be implemented within 30 days after an employer determined an employee committed an act necessitating such discipline and it did not appear to him the provision limited either an employer's power to investigate or the duration of an investigation. Mr. Spencer replied as he read the provision, it said discipline "...must become effective..." and required if an employee was to be terminated, he must be terminated within 30 days of his employer's discovery of the act he committed resulting in the decision to terminate him. He again explained the result he felt the language under discussion would have when an ongoing investigation uncovered successive acts of an employee. Mr. Ernaut stated A.B. 46 did not say discipline must be imposed within 30 days from the date an employer discovered an act was committed but rather discipline must be imposed within 30 days from the date the employer proved the employee committed the act. Chairman Lambert concurred with Mr. Ernaut's interpretation. Mr. Bob Gagnier joined Mr. Spencer at the witness table. Mr. Gagnier suggested Mr. Spencer was partially correct. He indicated the Association might agree to a change in the language of A.B. 46 to the effect an employee must have action taken against him within 30 days (of his employer's discovery of an act of the employee requiring the employee be disciplined) but such action must not necessarily become effective within 30 days. He suggested changing the language of A.B. 46 to read "...and the employee must be notified of the disciplinary action within 30 days after the appointing authority discovers that the employee committed the act." Mr. Ernaut suggested wording was needed to reflect once it was discovered both that an act was committed and that an employee committed the act, then discipline must be rendered within 30 days. Mr. Gagnier concurred. Mr. Spencer said if the provision of A.B. 46 under discussion was amended to provide discipline must be imposed within 30 days after an investigation concerning an employee's act was completed, he would then have no problem with the provision. Assemblyman Harrington commented Mr. Spencer had indicated concern about other sections of A.B. 46 and asked Mr. Spencer to state his concerns. Mr. Spencer advised he objected to a classified employee being a member of the Personnel Commission for two reasons: first, because such an employee then could vote on employees' classifications, a matter in which such employee might have a pecuniary interest; second, because the Personnel Commission created regulations pertaining to such benefits as annual leave, sick leave and leave without pay, and a classified employee would have an interest in enhancing such benefits as those benefits would inure to him. He pointed out pursuant to Chapter 232A N.R.S, persons appointed to commissions must have no pecuniary interest in matters governed by those commissions. Mr. Spencer stated the Department of Personnel's main objection to the provisions of A.B. 46 pertaining to arbitration was the cost involved. He explained, under A.B. 46, an employee wishing to file a grievance would be confronted with a cost to do so, whereas at the present time, there was no cost to an employee to file a grievance. He contended the necessity to pay to file a grievance would have a chilling effect on employees who had meritorious grievances. Mr. Spencer said he assumed union employees would have legal representation for their grievances, therefore, A.B. 46 might enhance union membership. He said, however, an expense would be imposed on the state because the state would have to pay one- half the cost of any grievance. Ms. Barbara Willis, Director, State of Nevada Department of Personnel, testified. She advised Mr. Spencer had addressed the Department of Personnel's concerns regarding the 30 day time limit for imposing disciplinary action. Ms. Willis provided a written overview of the Personnel Commission (hereinafter referred to as the Commission) and the Employee-Management Committee (hereinafter referred to as the Committee) (Exhibit D). She explained two of the most important functions of the Commission were to adopt personnel regulations and to rule on classification appeals. She declared regulations adopted by the Commission governed all aspects of personnel administration in state government, including job classification, compensation, recruiting, testing, certification of eligible persons, appointments, probationary periods, performance reports, training, attendance, leave, separation, disciplinary procedures, adjustment of grievances and hearings. She advised classification appeals heard by the Commission were those which resulted from an employee's disagreeing with the Department of Personnel with regard to his pay grade and said the Commission heard about 40 appeals per year. She stated the Commission ruled in favor of the Department of Personnel in approximately 60 percent of those appeals and in favor of the employee in approximately 40 percent of those appeals. Ms. Willis advised, at present, the Commission consisted of five members, all of whom were appointed by the Governor. She stated the Department of Personnel believed current law prohibited any member of the Commission being a state employee for good reason. She pointed out A.B. 46 would require three members of the Commission be state employees. She contended, because of the Commission's authority to regulate all aspects of employment and to determine job classifications, a clear conflict of interest would exist if state employees were made members of the Commission because those employees would make decisions concerning matters, including financial matters, in which they or their peers had either a direct or an indirect interest. Ms. Willis said current law also required members of the Commission be qualified in that they must have either a background in personnel administration or demonstrated interest in personnel administration. She stated A.B. 46 would not require members of the Commission to have any qualifications. Ms. Willis pointed out A.B. 46 would increase the number of members of the Commission from five to seven. She advised, currently, all members of the Commission were appointed by the Governor. She said A.B. 46 would allow only one member to be appointed by the Governor and, of the remaining six members, the three state employee members would be elected by their peers and the other three members would be "...named by the different constitutional officers." She declared the Department of Personnel saw no need for the Commission to have seven members and the composition of the Commission proposed by A.B. 46, would serve no purpose other than to promote divisiveness. Ms. Willis said current law required an affirmative vote by a majority of the Commission's members, towit: three out of five members, to adopt any regulation. She stated, under A.B. 46, an affirmative vote of five members of the Commission would be required to adopt a regulation and, therefore, at least one member who was a state employee would be required to agree. Ms. Willis advised the proposed elections of state employees to the Commission would require the Department of Personnel to establish costly and time-consuming internal controls to ensure nominations and elections were valid and would also require the Department of Personnel to bear the expense of preparing, printing and distributing ballots as well as the programming expenses associated with tabulating ballots. Ms. Willis said boards and commissions functioned as arms of the executive branch of state government and represented taxpayers. She said such boards and commissions determined whether proposals presented to them were good public policy and made decisions on technical matters and in order to do so, needed some expertise in effective discipline. She declared the Commission was no different from other boards and commissions in that regard. She contended the Commission provided a valuable service, members of the Commission were qualified and the Commission's decisions could not be viewed as being biased in favor of any party. She said the legislature saw fit to grant the Governor authority to appoint the members of the Commission and to establish criteria for such appointments and stated the Department of Personnel saw no reason for that authority to be changed. Ms. Willis advised the Committee consisted of six members, appointed by the Governor. She indicated the Committee's primary function was to hold hearings and make decisions regarding unresolved grievances, not including grievances for dismissals, demotions or suspensions and said the Committee's decisions were subject to judicial review. She stated three members of the Committee represented management and three members represented employees. She advised employee representatives were chosen from names submitted to the Governor by various employee unions. Ms. Willis advised A.B. 46 would abolish the Employee-Management Committee and replace it with arbitration. She said unless the employee and employer could agree upon an arbitrator, the arbitrator would be a member of the American Arbitration Association and each party to the arbitration would be responsible for one-half the cost of the arbitration. She declared the Department of Personnel did not object to the concept of arbitration as a means to resolve grievances but was concerned about the cost of arbitration, both to the state and to unrepresented employees. She stated the Department of Personnel was advised virtually all arbitrators selected in the manner proposed by A.B. 46 would have to be "...brought in from out of state." She advised the average cost per arbitration case was projected to be $3,000. She said the state currently spent approximately $750 per case, not including the cost of time spent by Employee-Management Committee members which she contended was an indirect cost. She suggested in addition to the cost to the state of the proposed arbitration proceedings, there would be costs to unrepresented employees. She advised approximately 60 percent of state employees were not represented by any union and pointed out such employees would have to absorb one-half of the $3,000 cost of an arbitration proceeding. Ms. Willis said during the past fiscal year, the Committee heard and rendered decisions in 47 cases and had heard 14 cases thus far in the current fiscal year. She explained the Committee ruled in favor of the agency in approximately 70 to 75 percent of cases it heard and in favor of the employee in approximately 25 to 30 percent of those cases. Assemblyman Bennett asked if Ms. Willis could clarify the Commission's responsibility for appointing hearing officers to render decisions concerning transfers, dismissals, demotions and suspensions. Ms. Willis replied the Commission appointed hearing officers, who were attorneys, to hear and rule on appeals which resulted when a permanent, classified state employee was dismissed, demoted, suspended or involuntarily transferred. Mr. Bennett observed such an employee was, then, appealing to one individual rather than a body of individuals. Ms. Willis replied Mr. Bennett was correct but said the hearing officer was an appointee of the Commission. Mr. Bob Bayer, Director, Department of Prisons, testified in opposition to A.B. 46. He said because of its size, the Department of Prisons was frequently involved with the issues being discussed. He indicated he had observed how the Personnel Commission and Employee-Management Committee worked, and believed both worked well and there was no need to change the present system. He expressed concern about the cost of the arbitration proceedings proposed by A.B. 46 and suggested those costs could impose severe hardship on employees who did not have union representation. Mr. Bayer said he was most concerned about the provision contained in lines 41 to 43, on page 3, of A.B. 46. He declared to ensure an employee received due process took time. He advised the Department of Prisons was complex and said in many cases (of possible misconduct by an employee) circumstances were not clear cut. He said it took time to review all submitted reports and to conduct all needed interviews. He indicated to ensure fairness to an employee, the Department of Prisons often utilized regulations of its own, such as a "critical incident review", a process in which witnesses were interviewed and evidence collected and after which it might be determined an employee had done something wrong. He suggested after it was concluded an employee had done something wrong, the Department of Prisons then might wish to take action. He described the process by which the department determined if the action it proposed to take was consistent with the law and with its prior actions and was in fact the action it wished to take. He said after such a determination was made, the department then began "...our due process to let the employee know this is what's going to happen." He indicated every effort was made to make the process as fair as possible. He suggested when an employee was placed on administrative leave with pay it was stressful for all parties involved but the security of the institution involved required the employee not be present at work until the situation (which resulted in the employee being placed on administrative leave) was resolved. He stated often, in order to permit an employee to continue working pending completion of an investigation, the employee was reassigned or was given a letter of reprimand, a letter of instruction, or a brief suspension. Chairman Lambert asked how long it took, after an investigation was concluded, to complete the various review processes and arrive at a final decision regarding disciplining an employee. Mr. Bayer replied he felt one problem was terminology, to-wit: what constituted the conclusion of an investigation. He cited a case in which, after he had concluded his investigation and had recommended discipline, approximately six weeks were required to complete the various review processes required before discipline could be imposed. Mr. Bayer emphasized the weight of the decisions involved in these actions and the effect they had on employees' futures. He suggested it was difficult to place a time limit on investigations and on due process, and he discussed some of the procedures involved in due process. Mr. Bayer stated the Department of Prisons conducted 30 disciplinary actions during the previous year. He advised the average time from the commencement of those disciplinary actions until their conclusion was two and one-half months. He expressed the belief it was dangerous to place a time restriction on due process and said he felt the present system worked as it was and needed no changes at this time. Assemblyman Nolan inquired of Mr. Spencer whether, when criminal allegations were involved, the Employee-Management Committee worked concurrently with, but independently of, the criminal justice system and whether the Committee waited to determine what occurred in criminal justice proceedings or in a trial situation before rendering its decision. Mr. Spencer replied the manner in which the Committee worked varied from case to case. He indicated in some instances, the Committee deferred to the criminal justice system and did not proceed with disciplinary action. He explained in some circumstances, the Committee tried not to interfere with a criminal investigation and not to alert an employee to the fact the employee was being investigated. Mr. Nolan asked, in those instances when concurrent investigations were conducted, what happened when the Committee determined an employee committed wrongful acts and the employee was subsequently acquitted in a criminal trial. Mr. Spencer responded such a situation could well arise because different standards of proof were involved in civil and in criminal actions but he was not aware of any such situation. Mr. Bayer asked to be allowed to respond to Mr. Nolan's questions. He gave examples of situations in which it was determined not to impose disciplinary action upon an employee until such time as criminal charges against the employee were adjudicated. Mr. Brian Hutchins, Chief Deputy Attorney General, Department of Transportation and Department of Motor Vehicles and Public Safety, testified, on behalf of the Department of Transportation, in opposition to A.B. 46. He stated he echoed many of the concerns expressed by Mr. Spencer and by Mr. Bayer. Mr. Hutchins referred to Section 6 of A.B. 46, on page three, lines 41 through 43, concerning the requirement discipline must become effective not later than 30 days after discovery an employee committed an act for which discipline was to be imposed. He indicated he heard nothing in the testimony given the committee which would require a change in existing law. He said thus far, he had heard of no abuse in the bringing of disciplinary charges. He expressed uncertainty as to what was meant by the term "effective." He pointed out paragraph 1A of Section 284.656 of the Nevada Administrative Code required 10 working days written notice of any proposed disciplinary action. He explained after such notice was given, a predetermination hearing must be held by the employer to determine what action the employer desired to take against the employee. He advised the employer must consider, among other things, similar offenses previously committed by other employees and the punishment or discipline rendered against those employees. Mr. Hutchins referred to the previous discussions regarding the meaning of the word "discovers" as it pertained to an act committed by an employee. He said it was suggested the language of A.B. 46 be changed to read "conclusion of an investigation." He queried whether "conclusion of an investigation" would refer to conclusion of a criminal investigation or conclusion of an administrative investigation. He advised Section 1702.0 of the current State Administrative Manual reinforced Mr. Bayer's testimony regarding the necessity of obtaining the advice and counsel of the Attorney General's Office. He quoted the manual as saying, "Prior to the imposition of any suspension, demotion or termination of an employee, an appointing authority must first consult with the attorney General regarding the proposed discipline." He contended consultation with the Attorney General was necessary because of the many different situations and the many legal analyses (of those situations) which existed. He declared any changes in the language of A.B. 46 needed to be well thought out, and he expressed concern over placing any arbitrary time limit on an appointing authority's determination of when discipline against an employee must take place. Mr. Bennett asked if he correctly interpreted Mr. Hutchins' testimony to mean if an employer wished to discipline an employee, the employer had 10 working days in which to issue a letter setting forth all the possible disciplines which might be imposed. Mr. Hutchins responded in the negative. He said the portion of the Nevada Administrative Code to which he had referred required an employee must be given 10 working days notice of the specific action the employer intended to take against the employee. He pointed out if an employer intended to take no action against an employee, the employer need not give notice. Mr. Bennett asked if the 10 days notice was to be given while the employer was still deciding upon what action to take or after the employer had determined what action to take. Mr. Hutchins stated the notice was to be given after the employer had determined the action to be taken, however the employer still must hold a predetermination hearing and the purpose of the notice was to provide the employee an opportunity to provide his side of the matter to his employer. He indicated at the predetermination hearing, the employer could reconsider its proposed action. Mr. Nolan referred to prior testimony that when there was a tie in the decision of the Employee-Management Committee, the tie was resolved in favor of the employer. He indicated he saw no statutory provision for this resolution of ties. He said he wondered if such resolution resulted from an internal rule or policy of the Committee and suggested such resolution might account for the inequity in the decisions of the Committee which favored the employer and those which favored the employee. Mr. Hutchins indicated he did not recall the rules which governed whether a tie vote was resolved in favor of the employer or in favor of the employee. He suggested Mr. Spencer or Ms. Willis might be better able to respond to Mr. Nolan's query. Mr. Spencer then addressed Mr. Nolan's question and advised a tie vote was resolved in favor of the employer because the employee was requesting something be changed and it required a majority vote of the Committee to make a change. Mr. Ray Sparks, Acting Deputy Director, Department of Motor Vehicles and Public Safety (hereinafter referred to as the Department), testified in opposition to A.B. 46. He stated the Department was concerned about Section 6 of A.B. 46 which proposed a 30 day time limit. He suggested applying the 30 day time frame from the time it was determined an infraction or misconduct had occurred until the time notice of a pre-disciplinary hearing was served would be more workable than applying it in the manner proposed in A.B. 46. Mr. Sparks explained the process utilized by the Department with regard to disciplinary action involving "...sworn or peace officer personnel." He advised the Department's Internal Affairs Unit, which was independent of and divorced from the Department's operating divisions, investigated the more serious complaints regarding such personnel and determined whether, in fact, an offense had occurred. He said if the Internal Affairs Unit determined an offense had occurred, it referred the report of its investigation to the appropriate division and it was then up to the division's chief to recommend disciplinary action. He stated when the disciplinary action to be imposed had been determined, an official personnel document was prepared and submitted to the Attorney General for review after which review, notice was served on the employee. He expressed concern that adequate time be allowed to accomplish all required procedures. Assemblyman Ernaut referred to Section 2 of A.B. 46. He asked Mr. Gagnier what relevance to the appointment process there was in having an appointment made by the Attorney General or by the Lieutenant Governor. Mr. Ernaut also asked if it would not be more appropriate to have appointments made by the legislature rather than by a disinterested constitutional officer. Mr. Gagnier replied the Association was advised appointments by the legislature would not stand a test of constitutionality. He contended most constitutional officers were not disinterested and suggested as long as constitutionally elected members of the executive branch made the appointments, it did not matter which officers they were. Mr. Gagnier pointed out prior testimony suggested employees should not be members of the Personnel Commission because employees were affected by rules adopted by the Commission and by the Commission's involvement in testing procedures and disciplinary processes. He contended those functions of the Commission were also functions of licensing boards. He advised the law required licensing boards to be composed, in part, of those individuals whom they licensed, which individuals would then be involved in meting out discipline to their peers and in providing testing, establishing fees and adopting rules for themselves. Mr. Gagnier referred to lines 16 though 18 of A.B. 46 and indicated the Association did not care which four constitutional officers were designated as long as the Governor did not make all the appointments. Mr. Ernaut asked why the Association did not wish the Governor to make all the appointments. Mr. Gagnier responded the Association's concern was based on the fact the Governor was first and foremost "the employer" and secondarily governor of the state, a distinction unique to state employees. He contended no other body of employees in the state had such a situation. He suggested for the employer to make all the decisions left the employees with no recourse. Mr. Ernaut asked, rhetorically, if the situation Mr. Gagnier described, wherein the employer made the decisions, did not imitate the situation in the private sector. Mr. Ernaut said the Association was asking the committee to make a giant policy reversal and the committee needed to know it was "...performing policy rather than politics." He asked how the committee could know it was dealing with policy rather than with politics in removing appointments from the Governor. Mr. Gagnier responded when an employer (in the private sector) took an action to which his employees objected, his employees had a legal right to collective bargaining, which state employees did not have, and his employees had a series of bodies, the members of which were not appointed by their employer, to which they could appeal. Mr. Ernaut suggested an employer in the private sector had the ability to terminate his employees while the state had difficulty in doing so. Mr. Gagnier disagreed with Mr. Ernaut and said hundreds of state employees were fired each year. Mr. Ernaut referred to the assumption that the committee was being asked to make a major policy reversal and directed Mr. Gagnier's attention to N.R.S. 284.035 which he quoted as saying, "No member of the commission shall have held a partisan political office or have been an employee of the state within the calendar year immediately preceding his appointment nor shall he seek or hold such an office or employment during his term as a member of the commission." Mr. Ernaut contended that policy statement was very specific. Mr. Gagnier indicated that policy statement was one of the things which A.B. 46 sought to repeal. Mr. Ernaut asked why the committee should "...make a 180 degree policy change." Mr. Gagnier contended employees did not feel the present system worked. Mr. Ernaut suggested specific examples (of the present system's failure) were lacking. Mr. Gagnier offered to give Mr. Ernaut specific examples. He said a few years previously a rule change was proposed which was vehemently opposed by the Association. He stated a hearing was held regarding the proposed rule change at which hearing many representatives of management testified and the Association stated its opposition. He declared when voting to pass the regulation, the chairman of the Commission said, "If we were to believe you, then this room would be full of employees opposing this regulation." Mr. Gagnier stated, based upon the chairman's comment, the Association arranged for many employees to appear at a subsequent hearing held before the Commission. He indicated on that occasion also, the Commission ruled against the Association and said after the hearing, one of the members of the Commission stated he voted against the Association because it had so many people in the audience. Mr. Gagnier suggested these disparate comments by members of the Commission indicated a lack of consistency. He declared he had seen the Commission rule in favor of upgrading an employee because the employee cried and had seen the Commission rule in favor of upgrading an employee because the employee had put in a great deal of overtime. He suggested those criteria had nothing to do with employee classification. He contended the situations he had discussed were representative of those which occurred when a body was comprised of laymen. Mr. Ernaut stated he believed there must be a solid, concrete and justifiable reason to "...reverse 41 years of policy" and believed more concrete evidence of the need for change was required. Mr. Ernaut referred to the proposed change in the number of members of the Commission, from five members to seven members of which three members were to be classified state employees. He said he found it difficult to justify such a change in light of N.R.S. 232.020 which he quoted as saying, "A member appointed to a board or commission or similar body as a representative of the general public shall be a person who...does not have pecuniary interest in any matter which is within the jurisdiction of the board, commission or similar body." Mr. Ernaut asked if the Commission was now to be held to a different standard. Mr. Gagnier indicated he believed the distinction pertained to the language "representative of the general public" which he indicated would apply only to the first four members of the Commission as proposed by A.B. 46. Mr. Ernaut said it was intended members of the general public, held to the standard set forth in N.R.S., administer the Personnel Commission but A.B. 46 was now suggesting a different makeup of the Commission, with members who were held to a different standard and who had a pecuniary interest administering the Commission. Mr. Ernaut asserted he understood Mr. Gagnier's prior analogy, likening the Commission to licensing boards, but wished the committee to understand the gravity of what it was being asked to do, which was not to make a simple change in policy but rather to make a major reversal in policy. Mr. Gagnier said, "...on the matter of the seven versus five. That's something we're less concerned about. If it was three and two, we wouldn't have a problem." Mr. Ernaut referred to the provision in Section 5 of A.B. 46 relating to submission of a grievance to an arbitrator. He indicated he was concerned with the cost involved in submitting a grievance to an arbitrator and with placing a price tag on the filing of a grievance. He suggested A.B. 46 could be conceived as removing the power of appointment from the Governor with respect to a commission which handled very important state employee issues and placing that power elsewhere, thereby insulating state employees in any grievance situation. He proposed the average person might view A.B. 46 as a political bill. Mr. Gagnier asked if, when Mr. Ernaut used the term "political," Mr. Ernaut was referring to "...partisan political or just political in general." Mr. Ernaut replied he was referring to personalities rather than partisanship. Mr. Gagnier responded the Association was endeavoring to remove personalities from the process. Mr. Ernaut indicated he understood the intent but was questioning the method. Mr. Gagnier stated cost was one thing to be considered with respect to the issue of utilizing an arbitrator. He advised provisions for cost sharing had been included in A.B. 46 in order to make those agencies which had the greatest number of grievances share in the arbitration costs. He stated the Association did not wish either state employees or the Association to have to bear costs and would have no objection if the committee wished to remove provisions for cost sharing from A.B. 46 and to allow the Department of Personnel to pay all arbitrator's costs. He advised, however, the Association had included provisions for cost sharing to indicate its willingness to pay a share of arbitrators' costs. Mr. Gagnier advised 20 percent of the Association's members were employees of one agency and those employees accounted for 62 percent of the Association's grievances. Mr. Gagnier addressed Chairman Lambert and advised in previous testimony, a suggestion was made to change the word "discovers", in line 42, page 3, of A.B. 46, to the word "determine." He advised the Association would have no objection to such a change. Assemblyman Harrington suggested changing the composition of the Commission to one of seven members, four of which would be appointed by various constitutional officers and three of which would be elected from among classified employees, and requiring a "super majority" of five would give one classified employee an absolute veto power. He asked why a simple majority was not considered rather than a super majority. Mr. Gagnier replied, "So that at least one knowledgeable person would have to vote on it." Mr. Gagnier discussed the fact the Public Employee's Retirement System was a seven member board which was comprised solely of members of the retirement system and which voted on issues which affected those members. He stated the Association felt at least one classified employee should have a voice in determining regulations governing employees. He indicated although the Association would not be pleased with a simple majority, a simple majority would at least not result in a tie vote. Mr. Nolan summarized the problems Mr. Gagnier had discussed in his testimony as being dissatisfaction with rulings of the Personnel Commission based on the lack of consistency in those rulings, dissatisfaction with the fact tie votes were resolved in favor of the employer and "...a delay in the penal system with this." He suggested prior testimony indicated some simple changes in the language of A.B. 46 might address the latter problem. He suggested inconsistency in rulings was inherent in any process in which nonprofessional individuals made judgments. He contended, over the past 200 years, the United States had based its jury process on having nonprofessionals render judgment. Mr. Nolan referred to Mr. Gagnier's testimony that there had not been many tied votes of the Commission in the past but recently, there had been an increase in such tied votes. He asked to what cause Mr. Gagnier attributed the increased number of ties. Mr. Gagnier responded he could not guess the cause. Mr. Gagnier commented on Mr. Nolan's observation regarding the jury system, indicating while a jury might be composed of nonprofessionals, a judge, knowledgable in the law, was involved in the system and such a judge had great influence and could, in some instances, overturn the decision of a jury. Mr. Gagnier stated the majority of states used arbitrators in their grievance processes and only a few states used a grievance system similar to Nevada's system. He advised 26 states had arbitration provisions utilizing professional arbitrators. Assemblyman Krenzer indicated she understood Mr. Gagnier's testimony to be if the Personnel Commission were made a five member board, with three of those members being appointed by constitutional officers and two of those members being elected by the SNEA body, then the Association would consider agreeing to a simple majority rather than a super majority. Mr. Gagnier responded affirmatively. He indicated the question of what kind of majority there would be was not the most important issue to the Association but rather, the most important issue to the Association was ensuring some members of the Commission were elected members. Mrs. Krenzer asked Mr. Gagnier to comment on the fact the integrity of the Association's election process had been questioned. Mr. Gagnier replied he was not certain the integrity of the election process had been questioned. He indicated the cost of holding an election and ensuring such election was held in an equitable manner had been questioned. He said, "I think any time you start an election process, you're going to have that." Mrs. Krenzer commented she believed, with respect to the arbitration provisions of A.B. 46, the request to share costs was a fair request and suggested in some cases, arbitration "...is the norm in other states." Mr. Gagnier responded the majority of the states had arbitration. Assemblyman Segerblom commented the union would not pay for an arbitrator unless it (the employee involved in the grievance) was a union member. Mr. Gagnier responded Mrs. Segerblom was correct. Chairman Lambert closed the hearing on A.B. 46 and declared a brief recess. The committee having reconvened, Chairman Lambert opened the hearing on Assembly Bill 44. ASSEMBLY BILL 44 - Revises provisions governing forfeiture of annual leave by state employees. Assemblyman John Marvel, District 34, testified. He suggested annual leave was a necessary employee benefit but indicated information gathered during the last two legislative sessions suggested annual leave had been abused. Mr. Mark Stevens, Fiscal Analysis Division, Legislative Counsel Bureau, testified. Mr. Stevens said Subsection 1 of Section 1 of A.B. 44 indicated annual leave could not be accumulated in excess of 30 days or 240 hours. He advised Subsection 2 of Section 1 provided any employee who, on January 1st, had accumulated annual leave in excess of 30 working days or 240 hours forfeited such excess annual leave unless on or before October 15th, the employee requested to take annual leave and his request was denied, in writing, in which case the employee was eligible to receive payment for his annual leave in excess of 240 hours. He said, however, A.B. 44 provided an employee could not be paid for forfeited annual leave in two consecutive years. Mr. Stevens referred to a schedule prepared by the Fiscal Analysis Division, reflecting forfeited annual leave payments for the years 1989 through 1994 (Exhibit E), and explained the information set forth therein. He indicated in 1994, the provisions of A.B. 44 would have eliminated payments for forfeited annual leave made to 13 individuals and said the value of those eliminated payments would have been $19,512. Mr. Stevens said he believed Mr. Marvel was contending forfeited annual leave was intended for use in situations where employees could not take time off from their jobs because of work load constraints but was not intended to be used continually over several years in order for an employee to increase his salary. He advised A.B. 44 would allow payment for forfeited annual leave but would not allow such payments to be paid two years in a row. Mr. Marvel stated he believed there had been abuses of the system with respect to payment for forfeited annual leave. Assemblyman Neighbors asked if an employee who quit his job was paid for any compensatory time he had accumulated. Mr. Stevens replied affirmatively. Mr. Neighbors asked if money was expended to cover the position of an employee who took annual leave. Mr. Stevens explained the budgets of most state departments would not provide for such expenditure, however the budgets of some departments which operated on a 24 hour basis, such as those dealing with prisons or mental health, would. He suggested there might be instances when a department would have to pay an employee to work overtime to make up for the absence of an employee on annual leave. Mr. Harrington asked if payments made to employees for unused annual leave were considered when calculating retirement benefits and other employee benefits which were based upon salary. Mr. Stevens responded overtime pay was not included in an employee's base salary for purposes of calculating retirement and he would guess retirement contributions would not be taken from payments for forfeited annual leave and those payments would not be included when calculating an employee's base salary in order to determine retirement benefits. Mr. Harrington asked if the only cost (to the state) for annual leave payments was the money actually paid out for the purpose of buying back annual leave from an employee. Mr. Stevens responded he would ascertain the answer to Mr. Harrington's question. Mr. Bob Gagnier, Executive Director, State of Nevada Employees Association, testified. Mr. Gagnier provided the committee with copies of a proposed amendment to A.B. 44 (Exhibit F). Mr. Gagnier advised the law which provided an employee could not carry over from one year to the next more than 30 days of annual leave existed because the legislature wished to encourage employees to use their annual leave. He said, however, in the past, many state agencies had not allowed their employees to take all of their annual leave or even some part of their annual leave. He explained for that reason, the Association approached the legislature some years ago to request the provision set forth in sections (a) and (b) of Section 1, Subsection 2 of A.B. 44. He indicated at the time the Association made its request of the legislature, the Assembly Committee on Government Affairs inquired of the Department of Personnel how much money was forfeited in annual leave. He stated the Department of Personnel made a study and determined over $250,000 was forfeited in annual leave. Mr. Gagnier pointed out the last page of Exhibit F reflected the amount of money paid for annual leave over the years covered by Exhibit F. He suggested the change in the law made pursuant to the Association's request resulted in a decrease in payments for annual leave from $250,000 to the amounts reflected on the last page of Exhibit F. Mr. Gagnier said the Association was concerned A.B. 44 would result in an employee who was paid for his annual leave in one year being denied use of his annual leave by his employer in the following year. He stated because of that concern, the Association suggested A.B. 44 be amended, at line 20, to read "In such case, the appointing authority is required to allow the employee annual leave necessary to avoid any loss. Such leave shall be at the employee's discretion." He said at present, an employer had absolute control over its employees' annual leave. He stated the Association requested "...if you accept Mr. Marvel's language, then put this in to make sure the employer will give them their annual leave." Mr. Gagnier contended many of those individuals who received payment for their annual leave were individuals who regulated their own hours and determined for themselves whether or not they would take annual leave. He suggested perhaps such individuals should not be eligible to receive payment for unused annual leave. Mr. Gagnier referred to lines 14 and 15 of A.B. 44, pertaining to written denial of an employee's request to take annual leave, and said he wondered how many of the personnel files of employees who were denied annual leave would contain such a written denial. He suggested some of the individuals (who received payment for unused annual leave) were agency heads who determined for themselves whether or not to take their annual leave rather than individuals who were denied the right to take such leave. He contended the law providing for payment for unused annual leave was not designed for such individuals but rather was intended to apply when an employee was denied the right to take his annual leave by his employer. He said the second amendment to A.B. 44 proposed by the Association (Exhibit F) might address the problem of agency heads receiving payment for unused annual leave. He indicated based on discussions held with Mr. Marvel, the language of the proposed second amendment to A.B. 44 should perhaps be expanded to say "division or agency heads." Mr. Gagnier advised because of abuses by some administrators, in 1971, the legislature enacted a provision in the law which limited the amount of compensatory time which could be paid to a department head or an employee of the Governor's office. He indicated that law was repealed during the last legislative session because those individuals to whom the law applied were no longer eligible to work overtime and therefore could not acquire compensatory time. Mr. Harrington suggested giving an employee total discretion as to when he would use his annual leave could create problems and contended a manager needed to have some control over when key people in his department could or could not use their leave. He said, however, he believed the decision as to the manner in which an employee was compensated for annual leave which he had earned, whether by his using such leave or by his being paid for such leave, should be entirely the decision of the employee. Mr. Gagnier referred to Mr. Neighbors' earlier question regarding whether money paid for unused annual leave was considered when calculating retirement benefits and said it was not considered. He said, "Bonus or additional salary, those are not part of compensation under the definition in N.R.S. 286." Mrs. Krenzer said she did not believe Mr. Gagnier had addressed Mr. Harrington's question concerning giving an employee total discretion in use of his annual leave. Mr. Gagnier said he believed Mr. Harrington had made a statement rather than asked a question. He stated the Association believed, in a situation in which an employer advised an employee the employee would not be permitted to use his annual leave but would be paid for such leave and then, in the subsequent year, advised the employee he would neither be allowed to use his annual leave nor would he be paid for it, it should be left to the employee's discretion whether to use his annual leave or receive payment for such leave. Mrs. Krenzer said she agreed the right to take leave should be left to the discretion of the employee but suggested perhaps the employee should not have total discretion as to when he took such leave. Mr. Gagnier proposed if it were not left to the discretion of the employee to determine when he took his leave, his employer might dictate when the employee could take his leave. He suggested an employer could circumvent the law by requiring an employee to take annual leave in increments as small as one day rather than as a vacation period as the law intended. Chairman Lambert pointed out most payments for unused annual leave appeared to be made to heads of agencies and queried whether if agency heads were not permitted to receive such payments, there would be any cause about which to be concerned. Mr. Gagnier referred to Exhibit F and said a number of the individuals reflected therein (as having received payment for unused annual leave) were not managers. Mr. Bennett referred to Mr. Gagnier's testimony regarding an employer forcing an employee to use his annual leave in one day increments and asked Mr. Gagnier to provide specific instances of such occurrences. Mr. Gagnier responded he was unable to say any such instance had, in fact, occurred but contended if an employer denied an employee the right to use his annual leave and the employee then advised the employer that the employer was required to allow him to use such leave, the employer's response might be "Well, O.K. Take each Tuesday off." He contended such an employer had already demonstrated he did not wish to allow his employee to take time off work and would certainly not allow his employee to take his annual leave in weekly increments. Mrs. Krenzer commented many personnel studies indicated time off from work may increase an employee's productivity and improve his general attitude as well as provide other benefits. She suggested an employee's ability to control his time off work, such as in planning a vacation, enhanced the employee's self-esteem and improved his productivity. She indicated she had worked with many state agencies and had observed capricious denial of use of leave time by employers. She suggested, however, there needed to be a balance between allowing either the employee or the employer to exercise total discretion over an employee's use of accrued leave. Mr. Gagnier reiterated his previous testimony regarding situations in which an employer had already denied an employee use of his annual leave. Mr. Bennet asked if an employee (who was denied use of his annual leave) had the right to file a grievance. Mr. Gagnier replied such an employee could file a grievance but since current regulations provided the time when an employee could take annual leave was within the discretion of the appointing authority, the Employee-Management Committee would rule use of annual leave was a management prerogative. Chairman Lambert closed the hearing on A.B. 44. Chairman Lambert advised two bill draft requests were to be considered for possible committee introduction. BILL DRAFT REQUEST 22-686 - Authorizes community redevelopment agencies to issue bonds at discount. MR. BACHE MOVED TO INTRODUCE B.D.R. 22-686. MR. BENNETT SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY ALL MEMBERS PRESENT. BILL DRAFT REQUEST 22-687 - Revises provisions governing jurisdiction and authority of certain units of specialized law enforcement established by political subdivision. MR. BACHE MOVED TO INTRODUCE B.D.R. 22-687. MR. NOLAN SECONDED THE MOTION. THE MOTION PASSED UNANIMOUSLY BY ALL MEMBERS PRESENT. There being no further business to come before the committee, Chairman Lambert adjourned the meeting at 10:05 a.m. RESPECTFULLY SUBMITTED: Sara Kaufman, Committee Secretary APPROVED BY: Assemblyman Douglas A. Bache, Chairman Assemblyman Joan A. Lambert, Chairman Assembly Committee on Government Affairs February 2, 1995 Page